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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO

SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934



(Mark One)

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

For The Fiscal Year Ended December 31, 2003.

OR

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



Commission File Number: 000-22003



US UNWIRED INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Louisiana                                                      |  | 72-1457316                             
|(State or other jurisdiction of incorporation or Organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|                                                               |  | 70601                                  
|                                                               |  | (Zip code)                             

901 Lakeshore Drive

Lake Charles, Louisiana 70601

(Address of principal executive offices)



(337) 436-9000

(Registrants telephone number, including area code)



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



Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share

Title of Each Class



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



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



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



The aggregate market value of the voting stock held by non-affiliates of the registrant computed by reference to the closing
sales price on the OTC Bulletin Board on June 30, 2003, the last business day of the registrants most recently completed second fiscal quarter, was approximately $38,445,956. (For purposes of determination of the foregoing amount, only our
directors, executive officers and 10% shareholders have been deemed affiliates).



There were 128,831,535 shares of common stock, $0.01 par value per share, outstanding at February 15, 2004.



DOCUMENTS INCORPORATED BY REFERENCE



1. Portions of the US Unwired Inc. Proxy Statement of Registrant for its 2004 annual meeting of shareholders.



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US UNWIRED INC.



ANNUAL REPORT ON FORM
10-K



TABLE OF CONTENTS



|           |  |                                                                                                |  |     
|---------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                |  | Page
|           |  | PART I                                                                                         |  |     
|ITEM 1.    |  | Business                                                                                       |  | 1   
|ITEM 2.    |  | Properties                                                                                     |  | 41  
|ITEM 3.    |  | Legal Proceedings                                                                              |  | 41  
|ITEM 4.    |  | Submission of Matters to a Vote of Security Holders                                            |  | 41  
|           |  |                                                                                               
|           |  | PART II                                                                                        |  |     
|ITEM 5.    |  | Market For Registrants Common Equity And Related Stockholder Matters                          |  | 42  
|ITEM 6.    |  | Selected Financial Data                                                                        |  | 43  
|ITEM 7.    |  | Managements Discussion And Analysis Of Financial Condition And Results Of Operations          |  | 43  
|ITEM 7A.   |  | Quantitative And Qualitative Disclosures About Market Risk                                     |  | 60  
|ITEM 8.    |  | Financial Statements and Supplementary Data                                                    |  | 60  
|ITEM 9.    |  | Changes In And Disagreements With Accountants On Accounting And Financial Disclosure           |  | 60  
|ITEM 9A.   |  | Controls and Procedures                                                                        |  | 60  
|           |  |                                                                                               
|           |  | PART III                                                                                       |  |     
|ITEM 10.   |  | Directors And Executive Officers Of The Registrant                                             |  | 61  
|ITEM 11.   |  | Executive Compensation                                                                         |  | 62  
|ITEM 12.   |  | Security Ownership Of Certain Beneficial Owners And Management and Related Stockholder Matters |  | 62  
|ITEM 13.   |  | Certain Relationships And Related Transactions                                                 |  | 62  
|ITEM 14.   |  | Principal Accounting Fees and Services                                                         |  | 62  
|           |  |                                                                                               
|           |  | PART IV                                                                                        |  |     
|ITEM 15.   |  | Exhibits, Financial Statements, Schedules, and Reports On Form 8-K                             |  | 63  
|           | 
|Signatures |  | 70                                                                                            



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Cautionary Note Regarding Forward-Looking Statements



This report contains forward-looking statements, which are statements about
future business strategy, operations and capabilities, construction plans, construction schedules, financial projections, plans and objectives of management, expected actions of third parties and other matters. Forward-looking statements often
include words like believes, belief, expects, plans, anticipates, intends, projects, estimates, may, might, would or similar words. Forward-looking statements speak only as of the date of this report. They involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially different. In addition to the risk factors described elsewhere, specific factors that might cause such a difference include, but are not limited to (i) our ability to
finance future growth opportunities; (ii) our dependence on Sprint PCS; (iii) our ability to expand our Sprint PCS network or to upgrade the Sprint PCS network to accommodate new technologies; (iv) limited operating history in the PCS market and
anticipation of future losses; (v) potential fluctuations in operating results; (vi) changes or advances in technology; (vii) changes in law or government regulation; (viii) competition in the industry and markets in which we operate; (ix) future
acquisitions; (x) our ability to attract and retain skilled personnel; (xi) our dependence on contractor and consultant services, network implementation and information technology support; (xii) our potential inability to expand the services and
related products we provide in the event of substantial increases in demand in excess of supply for network and handset equipment and related services and products; (xiii) the availability at acceptable terms of sufficient funds to pay for our
business plans; (xiv) changes in labor, equipment and capital costs; (xv) any inability to comply with the indentures that govern our senior notes or credit agreements; (xvi) changes in management; and (xvii) general economic and business
conditions.



You should not rely too heavily on any
forward-looking statement. We cannot assure you that our forward-looking statements will prove to be correct. We have no obligation to update or revise publicly any forward-looking statement based on new information, future events or otherwise. For
a discussion of some of the factors discussed above as well as additional factors, see RISK FACTORS contained in this document.



PART I



ITEM 1. Business



General



Through our wholly owned subsidiaries, Louisiana Unwired, LLC
(Louisiana Unwired) and IWO Holdings, Inc. (IWO), we provide wireless personal communication services, commonly referred to as PCS, in eastern Texas, southern Oklahoma, southern Arkansas, the Florida panhandle, southern
Tennessee, upstate New York, New Hampshire (other than the Nashua market) and Vermont; significant portions of Louisiana, Alabama, Georgia and Mississippi; and portions of Massachusetts and Pennsylvania. We are a network partner of Sprint PCS, the
personal communications services group of Sprint Corporation. Sprint PCS, directly and through network partners like us, provides wireless services in more than 4,000 cities and communities across the country. We have the exclusive right to provide
PCS services under the Sprint® and Sprint PCS® brand names in service areas that had approximately
17.6 million residents as of December 31, 2003. Our combined service areas are among the largest in population and subscribers of the Sprint PCS network partners and are contiguous with Sprint PCSs launched markets of Houston, Dallas, Little
Rock, New Orleans, Birmingham, Jacksonville, Memphis, Atlanta, New York and Boston.



At December 31, 2003, we were providing PCS service to approximately 617,800 subscribers and network coverage to approximately 12.8 million residents or 73% out of approximately 17.6 million total residents. The
number of residents in our service area does not represent the number of Sprint PCS subscribers that we expect to have in our service area.



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Recent Developments



For a discussion of recent developments in 2003 including our operating results, liquidity and relationship with Sprint PCS, please refer to Recent
Developments in Item 7. Managements Discussion and Analysis of Financial Condition And Results of Operations.



Our Affiliation with Sprint PCS



Sprint PCS adopted a strategy to extend its 100% digital, 100% PCS network by entering into agreements with independent wireless companies such as us,
which we refer to as affiliates, to construct and manage Sprint PCS markets and market Sprint PCS services. Through these affiliations, Sprint PCS services are available in key cities contiguous to current and future Sprint PCS markets.



Under our agreements with Sprint PCS, we market Sprint PCS products and
services in our service area using licenses that Sprint PCS acquired from the FCC in 1994 and 1996. We are the only provider of Sprint PCS products and services in our service area. Some key points about these agreements are:



| |  | Each agreement lasts up to 50 years with an initial period of 20 years and three successive 10-year renewal periods.
| | - | --------------------------------------------------------------------------------------------------------------------



| |  | Each agreement requires revenue sharing of 8% to Sprint PCS and 92% to US Unwired, except that US Unwired retains 100% of the revenues from non-US Unwired Sprint PCS subscribers
traveling in our service area, merchandise sales and other revenues as defined in the Sprint PCS Management Agreement.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | If we terminate or breach the agreements, we may be required to sell our PCS business and network to Sprint PCS or to purchase the Sprint PCS licenses from Sprint PCS.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | If Sprint PCS terminates or breaches the agreements, we may be able to sell our PCS business and network to Sprint PCS or to purchase the Sprint PCS licenses from Sprint PCS.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, through services agreements, we pay
Sprint PCS service fees for certain back office functions performed by Sprint PCS for us. We pay service fees to Sprint PCS for new subscribers activations as well recurring monthly fees for services performed for existing subscribers
such as billing and customer service.



We also purchase other
goods and services, such as handsets, from Sprint PCS where Sprint PCS has contracted with third party vendors. Sprint PCS has entered into agreements with national retailers that sell handsets and service to new subscribers in our markets. Sprint
PCS pays these national retailers a new subscriber commission and provides handsets to them below cost. For new subscribers added in our markets by these national retailers, Sprint PCS passes the costs of commissions and handset subsidies to us.



We believe that our service area is important to the Sprint
PCS network. To date, Sprint PCS has made considerable investments in the licenses covering our service area.



Our Service Area



Our
Sprint PCS service area includes all or portions of 68 markets spanning over 237,000 square miles with a population of approximately 17.6 million people in eastern Texas, southern Oklahoma, southern Arkansas, the Florida panhandle, southern
Tennessee, upstate New York, New Hampshire (other than the Nashua market) and Vermont; significant portions of Louisiana, Alabama, Georgia and Mississippi; and portions of Massachusetts and Pennsylvania as a network partner of Sprint PCS. The number
of residents in our service area does not represent the number of Sprint PCS subscribers that we expect to have in our service area.



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PCS Services and Features



We offer Sprint PCS products and services in our service area. Our products and services are designed to mirror those of
Sprint PCS and to be a part of the Sprint PCS nationwide network. Sprint PCS subscribers in our service area may use Sprint PCS services throughout our contiguous markets and seamlessly throughout the Sprint PCS network.



We support Sprint PCSs newest technology, PCS Vision, throughout our service area. PCS Vision allows subscribers that purchase handsets with the
appropriate features the ability to access the Internet, receive and send email, download pictures and sounds, and take digital pictures either with a built-in or attachable camera.



We offer Code Division Multiple Access (CDMA) handsets that weigh 2.7 to 7.0 ounces and can offer up to 16 days of standby
time and up to 3.8 hours of talk time. Many of these models are dual-mode handsets that allow subscribers to make and receive calls on both PCS and cellular frequency bands. All handsets are equipped with preprogrammed features and are sold under
the Sprint PCS brand name.



We provide roaming service to both
Sprint PCS subscribers that are traveling through our service area as well as certain non-Sprint PCS subscribers traveling through our service area. Sprint PCS and other affiliates provide a similar service to our subscribers traveling outside of
our market area. Roaming allows a person to make a phone call outside the service area where they purchased the service.



PCS Marketing Strategy



We benefit from the recognizable Sprint PCS brand names and logos and from Sprint PCSs technological developments. We enhance the national effort
with local marketing managers and coordinators who develop strategies specifically tailored to our local markets. They assist the sales force in driving traffic to the stores through promotions, contests and community relations programs and assist
the outside sales force in targeting business sales.



Pricing



We use the Sprint PCS pricing
strategy to offer our subscribers a menu of service plans typically structured with monthly recurring charges, large local calling areas, bundles of minutes and options and features such as voicemail, enhanced caller identification, call waiting,
three-way calling and PCS Vision web. In order to meet the competitive needs of our specific local markets, we occasionally alter Sprint PCSs pricing plans. In addition, we offer a pre-paid service called Chat Pak in certain markets where we
believe that it will provide a competitive advantage.



Advertising



We capitalize on the
Sprint PCS name and reputation to attract subscribers. We benefit from Sprint PCSs national advertising campaign at no additional cost. Sprint PCS also runs numerous promotional campaigns that provide subscribers with benefits such as
additional features at the same rate or free ancillary services. We direct our media and promotional efforts at the community level by advertising Sprint PCSs products and services through radio, print, outdoor, billing inserts, direct mail
and promotional displays in our retail stores.



Sponsorships



Sprint PCS sponsors
numerous national and regional events. These sponsorships provide Sprint PCS with brand name and product awareness. Our regional marketing teams sponsor local events, teams and projects to increase consumer awareness of the Sprint PCS brand in the
local community and to provide occasions to develop positive community relationships in our markets.



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Sales and Distribution



We target a broad range of consumer and business markets through a sales and distribution plan. We use traditional sales channels, like our retail
stores, mass merchandisers and other national retail outlets, independent agents and an outside sales force. We also use lower-cost methods like direct marketing and a corporate website.



Retail stores



At December 31, 2003, we had 54 retail outlets. Our retail outlets are located in principal retail districts in each market, designed in accordance with
Sprint PCS specifications and branded as Sprint stores. We use our stores for the distribution and sale of our handsets and services. Sales representatives in these outlets receive in-depth training that allows them to explain our service in an
informed manner. We believe that these representatives foster effective and enduring customer relationships.



Mass merchandisers and outlets



We target subscribers through our mass-market retail outlets through Sprint PCS negotiated distribution agreements with national and regional mass
merchandisers and consumer electronic retailers, including Radio Shack, Wal-Mart, Best Buy and Office Depot and, at December 31, 2003, had a presence in over 600 national retail outlet locations in our service area.



Independent agents



We have a contracted network of independent agents that creates additional
opportunities for local distribution. Most of these businesses are family-owned consumer electronics dealers and wireless telecommunication retailers. At December 31, 2003, we had approximately 300 independent agents under contract.



Other Sprint PCS initiatives



We participate in Sprint PCSs national accounts program, which targets
Fortune 1000 companies. This allows us to take advantage of Sprint PCSs inbound telemarketing sales program and Sprint PCSs internet site that allows subscribers in our service area who purchase products and services over the Sprint PCS
internet site become subscribers of our PCS network.



Resellers



Effective July 2002, we
agreed to participate in a reseller program in our service area through Sprint PCS as part of the partnership between Sprint PCS and Virgin Mobile USA, LLC (Virgin). The agreement allows Virgin to sell prepaid wireless services and pay
us for use of our network on a per minute basis. Virgin targets the 15- to 30-year-old consumer market to purchase pay-as-you-go wireless communications services while eliminating the responsibilities of monthly bills and credit requirements.



No single manufacturer has accounted for more than 10% of our
sales in the current reporting period or in the past three years.



Suppliers
and Equipment Vendors



We do not manufacture any of the
handsets that we use in our operations. We purchase our handsets directly from Sprint PCS and our accessories from certain other third party vendors.



Competition



We face significant competition in our service area from a number of competitors. There are five other national mobile telephony operators that offer
service in at least some portion of our service areaAT&T



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Wireless, Verizon, Cingular, Nextel and T-Mobile. In addition, there are many local and regional carriers that offer PCS and cellular services in our service
area. According to the FCCs Eighth Annual Commercial Mobile Services Competition (CDMR) Report, released July 14, 2003, 270 million people, or 95% of the total population, have three or more different operators offering
mobile telephone service in the counties in which they live.



Wireless local number portability (WLNP) was introduced in a portion of our markets in November 2003. WNLP allows customers to retain existing telephone numbers when switching from one wireless carrier to another. The
introduction of WLNP in all of our markets in May 2004 may result in higher customer turnover, lower revenues and increased operating costs. We are closely monitoring the effects of WNLP but cannot state with any certainty the impact that it will
have on our future operations.



In order to attract new
subscribers, we offer discounts on handsets and service plans that include more minutes and/or more anytime minutes and other enhancements such as complimentary periods of free data usage. Based upon increased competition, we anticipate that market
prices for two-way wireless services will continue to decline in the future. We compete to attract and retain subscribers principally on the basis of services and features, the size and location of our service areas, network coverage and
reliability, customer care and pricing. Our ability to compete successfully depends, in part, on our ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in
consumer preferences, demographic trends, economic conditions and discount pricing strategies by competitors.



We believe that our ability to compete effectively with other PCS providers will depend on:



| |  | the continued expansion and improvement of the Sprint PCS network, customer care system and telephone handset options.
| | - | ----------------------------------------------------------------------------------------------------------------------



| |  | the continued success of CDMA technology in providing better call quality and clarity than other systems.
| | - | ---------------------------------------------------------------------------------------------------------



| |  | our competitive pricing with various options suiting individual subscribers calling needs.
| | - | ------------------------------------------------------------------------------------------



The main wireless technologies used in the United States are: Code Division Multiple Access (CDMA), Global
System Mobile Communications (GSM) and Time Division Multiple Access (TDMA).



Sprint PCS has chosen CDMA technology, which we believe offers significant advantages in the marketplace.



CDMA offers superior call quality and clarity. CDMA also offers the highest
capacity of the three standards. This means that more simultaneous calls can be handled on a CDMA network than on equivalent TDMA or GSM networks. CDMA also offers a high level of security, giving subscribers confidence that their calls remain
private. CDMA offers many advanced features such as short text messaging, Internet access, call waiting, call forwarding and three way calling. Several providers in the United States, including Sprint PCS and Verizon use CDMA technology.



TDMA is generally less expensive to deploy if a carrier seeks to overlay
an analog network, like a cellular carrier would be required to do. TDMA also offers increased call security and advanced features like those available on a CDMA network. Several providers in the United States, including AT&T and Cingular use
TDMA but have announced intentions to overlay their existing TDMA networks with GSM technology.



GSM is the most widely adopted standard around the world. It originated in Europe, where it continues to be the dominant standard. It has been widely
deployed for over ten years, which means that economies of scale for network and handset equipment have been achieved. This has lowered the cost of purchasing the equipment for a GSM system. GSM also offers increased call security and advanced
features like those available on a CDMA network. T-Mobile uses GSM technology.



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We do not currently face significant competition from resellers on our facilities and believe our
relationship with Virgin compliments our other distribution channels. We expect to continue to be subject to the FCC rule that requires cellular and PCS licensees to permit resale of carrier service.



Network Operations



We have completed the initial network build out plan for all of our markets, except for certain IWO markets. The Sprint PCS
Management Agreement requires us to provide network coverage to 65% of the resident population in our service area.



We have met this requirement in all of our service areas except for IWOs service area, and it is unlikely that IWO will have sufficient liquidity to
complete the build-out in the IWO service area. Should we be unable to complete the IWO build-out, Sprint PCS has the right to place the IWO Sprint PCS management agreement in default and take actions up to and including termination of the IWO
Sprint PCS Management Agreement.



We believe that our inability
to complete the build-out of the IWO service area will have no effect on the non-IWO service area. We are continuing to expand our service by selectively upgrading network equipment and adding cell sites in only certain markets that we believe will
help us provide increased subscriber growth or enhanced coverage that we believe will reduce subscriber turnover.



Cell sites



Our preference is to selectively add cell sites through co-location, which is leasing available space on a tower owned by another company. When we
co-locate, we generally have lower construction costs, and it is likely that any zoning difficulties have been resolved. As of December 31, 2003, we had 1,878 PCS cell sites, of which approximately 94% were co-locations and 6% owned with network
coverage of approximately 12.8 million residents out of approximately 17.6 million total residents. The number of people in our service area does not represent the number of Sprint PCS subscribers that we expect to have in our service area.



Microwave relocation



Fixed microwave operators previously used the frequencies that are now
allocated for PCS licenses. The FCC has established procedures for PCS licensees to relocate these existing microwave paths, generally at the PCS licensees expense. We have paid our share of those reported cost for relocation that have been
triggered by our current site build out. We do not expect any substantial relocation cost for additional planned build out of sites.



Switching centers



We own or lease property for our eight switching centers for our service area. These centers are located in Albany, New York, Londonderry, New Hampshire,
Shreveport, Louisiana, Macon, Georgia, Jackson, Mississippi and Montgomery, Alabama. Each switching center serves several purposes, including subscriber validation, call routing, managing call hand off and managing access to landlines and access to
Sprint PCS national platforms.



Interconnection



We connect our digital PCS network to the landline
telephone system through interconnection agreements with local exchange carriers. Through our agreements with Sprint PCS, we benefit from the interconnection agreements that Sprint PCS negotiates.



Network monitoring systems



We use Sprint PCSs Network Operations Control to provide monitoring
and maintenance of our entire network, including the constant monitoring for blocked or dropped calls, call clarity and signs of tampering, cloning or fraud, the recording of network traffic statistics and the overseeing of customer usage, data
collected at switch facilities and billing.



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Government Regulation



The FCC and other federal, state and local regulatory agencies regulate our PCS system.



Licensing of PCS systems



A broadband PCS system operates under a service area license granted by the FCC for a particular market. These licenses
operate on one of six frequency blocks allocated for broadband PCS service. Narrowband PCS is for non-voice applications such as paging and data service and is separately licensed. The FCC awards all PCS licenses by auction.



All PCS licenses have a 10-year term and must be renewed at the end of this
term. The FCC generally will renew a PCS license if the licensee provided substantial service during the past license term and substantially complied with applicable law. The FCC may revoke a license for serious violations of FCC rules. All PCS
licensees must satisfy coverage requirements. Licensees that fail to meet the coverage requirements may lose the service area that is not covered, or the license.



For up to five years after a PCS license is granted, the licensee must share spectrum with existing licensees that operate
fixed microwave systems within its license area. To operate our PCS systems efficiently and with adequate population coverage, we must relocate many of these existing licensees. The FCC has adopted a transition plan to relocate microwave operators
and a cost-sharing plan for relocation that benefits more than one PCS licensee. These plans expire on April 4, 2005.



Other regulatory requirements



The Communications Act preempts state and local regulation of the entry of, or the rates charged by, any provider of private mobile radio service or of
commercial mobile radio service (CMRS), which includes PCS and cellular service. The FCC does not regulate CMRS or private mobile radio service rates. However, CMRS providers are common carriers and are required under the Communications
Act to offer their services to the public without unreasonable discrimination.



The FCC imposes additional regulatory requirements on all CMRS, operators, which include PCS and cellular systems as well as some specialized mobile radio systems. These requirements may change. Some of the current
requirements include:



| |  | Roaming. CMRS carriers must provide service to all subscribers of a compatible CMRS service in another geographic region.
| | - | -------------------------------------------------------------------------------------------------------------------------



| |  | Number portability. CMRS carriers are required to allow their subscribers to take their phone numbers with them if they change to a competitive service and must be able to
deliver calls to carried numbers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Enhanced 911. CMRS carriers must transmit 911 calls from any qualified handset without credit check or validation, must provide 911 service to individuals with speech or
hearing disabilities, and must provide the approximate location of the 911 caller.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Wiretaps. CMRS carriers must provide law enforcement personnel with sufficient capacity to enable wiretaps on the CMRS network.
| | - | -------------------------------------------------------------------------------------------------------------------------------



| |  | Customer information. The FCC has rules that protect the customer against the use of customer proprietary information for marketing purposes.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | Interconnection. All telecommunications carriers, including CMRS carriers, must interconnect directly or indirectly with other telecommunications carriers.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | Universal service and other fees. The FCC imposes universal service support fees on telecommunications carriers, including CMRS carriers. The FCC imposes additional fees for
telecommunications relay service, number portability and the cost of FCC regulation.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Tower Construction, Marking and Lighting. The FCC and FAA regulate the location, height, and marking of proposed towers.
| | - | ------------------------------------------------------------------------------------------------------------------------



Transfers and assignments of PCS licenses



The FCC must approve the assignment or transfer of control of a license for
a PCS system. In addition, the FCC requires licensees who transfer control of a PCS license within the first three years of their license term to disclose the total consideration received for the transfer. FCC approval is not required for the sale
of an interest that does not transfer control of a license. Any acquisition or sale of a PCS interest may also require the prior approval of the Federal Trade Commission, the Department of Justice and state or local regulatory authorities.



State and Local Regulation



State governments can regulate other terms and conditions of wireless
service. Several states have imposed, or have proposed legislation that will impose, various consumer protection regulations on the wireless industry. States also may impose their own universal service support fees on wireless carriers, similar to
the requirements that have been established by the FCC. At the local level, wireless facilities typically are subject to zoning and land use regulation, although the Communications Act preempts both state and local governments from categorically
prohibiting the construction of wireless facilities in any community or unreasonably discriminating against a carrier. Numerous state and local jurisdictions have considered imposing conditions on a drivers use of wireless technology while
operating a motor vehicle, and a few have actually done so.



Foreign ownership



The Communications
Act of 1934 limits the non-U.S. ownership of licensees. If foreign ownership exceeds the permitted level, the FCC may revoke the PCS licenses or require an ownership restructuring.



Additional spectrum



From time to time, the FCC conducts auctions of additional spectrum. We have no way of knowing whether the new spectrum in our service area will be
used to compete with our PCS systems.



Intellectual
Property



The Sprint® and Sprint PCS® brand names and logos are registered service trademarks owned by Sprint. We have
license agreements with Sprint that allow us to use, without payment and only in our service area, the Sprint design logo and diamond symbol and other Sprint service trademarks, like PCS Vision. We can use some of Sprints licensed trademarks on some wireless telephone
handsets. The license agreements have many restrictions on our use of their licensed trademarks. We are the only person entitled to market Sprint PCS products and services in our service area, except for the Sprint PCS national marketing programs.



Employees



As of December 31, 2003, we had approximately 939 employees. No union
represents our employees. We believe that we have good relations with our employees.



Seasonality



Like the wireless communications
industry in general, our subscribers increase in the fourth quarter due to the holiday season. A greater number of phones sold at holiday promotional prices increases our losses on



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merchandise sales. Our sales and marketing expenses increase also with holiday promotional activities. We generally have the most use and revenue per
subscriber in the summer because of an increase in revenues from fees charged to non-US Unwired, non-Sprint PCS subscribers who use our network while traveling in our service area. We believe that the increased traffic in our service area comes from
people traveling during summer vacation. We expect these trends to continue based on historical operating results.



RISK FACTORS



OUR SECURITY HOLDERS AND PERSONS WHO ARE CONSIDERING AN INVESTMENT IN OUR SECURITIES SHOULD CAREFULLY CONSIDER THESE RISK FACTORS, IN ADDITION TO THE
FACTORS DESCRIBED ELSEWHERE.



The risk factors described below
are qualified and supplemented in their entirety by the discussions in Note 2 to the condensed consolidated financial statements included herein and in Item 7 (Managements Discussion and Analysis of Financial Condition and Results of
Operations) under the captions Overview and Liquidity. These items contain important disclosures related to our and IWO Holdings, Inc.s current liquidity, debt, relationship with Sprint PCS and constraints on our
business in the current environment. An adequate understanding of near term risks facing us requires consideration of the referenced discussions.



Introduction



In this section, unless the context indicates otherwise, we and our and combined company refer collectively to US
Unwired and all of its subsidiaries. We use US Unwired to refer just to our parent company without reference to its subsidiaries. LA Unwired refers collectively to our subsidiaries Louisiana Unwired, LLC, Texas Unwired
general partnership, and Georgia PCS Management, L.L.C. (Georgia PCS), unless the context of the reference indicates otherwise.



An extremely brief overview introduces each of the subsections below. We think the overview captures the gist of the subsection, but it is not a
substitute for reading the entire subsection.



Risks
Related to Our Stock Price



Overview of this
subsection:



Our stock price has not been stable. Many
additional shares have become freely tradeable in the public market. This may have caused our stock price to fluctuate greatly. Our common stock was delisted from the Nasdaq National Market effective May 8, 2003 and since then it has been traded on
the Over the Counter (OTC) Bulletin Board.



The
stock price of US Unwired may continue to be unstable or depressed.



The market price of our common stock has been significantly depressed and could be subject to fluctuations in response to factors such as the following, some of which are beyond our control:



| |  | quarterly variations in our operating results;
| | - | ----------------------------------------------



| |  | operating results that vary from the expectations of securities analysts and investors;
| | - | ---------------------------------------------------------------------------------------



| |  | changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| |  | changes in our liquidity that may impact our ability to meet the financial covenants of our senior bank credit facility and repay our debts;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| |  | changes in our relationship with IWO that may include being forced to seek bankruptcy protection for IWO and that may possibly include having no involvement with IWO at all;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | possible significant increases in subscriber turnover with the introduction of wireless portability that affected a significant portion of our markets beginning in November 2003 for
metro markets and May 2004 for all other markets;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | changes in our relationship and that of other Sprint PCS affiliates with Sprint PCS;
| | - | ------------------------------------------------------------------------------------



| |  | announcements by Sprint PCS or Sprint PCS affiliates concerning developments or changes in its business, financial condition or results of operations, or in its expectations as to
future financial performance;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | actual or potential defaults in bank covenants by Sprint PCS or Sprint PCS affiliates, which may result in a perception that we are unable to comply with our bank covenants;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | announcements of technological innovations or new products and services by Sprint PCS or our competitors;
| | - | ---------------------------------------------------------------------------------------------------------



| |  | changes in results of operations, market valuations and investor perceptions of Sprint PCS, Sprint PCS affiliates or of other companies in the telecommunications industry in general
and the wireless industry in particular, including our competitors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | departures of key personnel;
| | - | ----------------------------



| |  | changes in laws and regulations;
| | - | --------------------------------



| |  | significant claims or lawsuits;
| | - | -------------------------------



| |  | the large number of US Unwired shares that can freely be sold in the public market, as described under the following italicized heading;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  | general economic and competitive conditions.
| | - | --------------------------------------------



The number of shares of our common stock that is freely tradeable in the public market increased substantially after November 22, 2002. Sales of
unusually large numbers of shares of our common stock in the public market, or the perception that such sales could occur, could further depress our stock price.



We issued approximately 44,400,000 additional shares of our common stock when we acquired Georgia PCS and IWO in March and
April 2002 through two mergers, and we agreed to issue about another 6,900,000 shares upon the exercise of warrants and options that we assumed from IWO. Before November 22, 2002, most of these shares were not freely tradeable in the public market
because of the combined effect of restrictions under federal securities laws and of agreements, called lock up agreements, that we obtained from the holders not to sell shares before specified dates. The restrictions imposed by federal securities
laws on sales of these shares terminated on November 22, 2002, which was the effective date of the registration statement that we were required to file to register certain of those shares for resale. On March 28, 2003, all remaining shares that were
then still subject to the lock up agreements, equal to about 1,080,000 shares became freely tradeable.



The market price of our common stock could continue to be depressed if the holders of shares that have become freely tradeable sell them or if the market
perceives that they intend to sell them. We cannot predict whether future sales of our common stock or the availability of our common stock for sale will adversely affect the market price for our common stock.



We rely on Sprint PCS for a substantial amount of our financial
information. If that information is not accurate, the investment community could lose confidence in us.



Under our agreements with Sprint PCS, it performs our billing, manages our accounts receivable and provides a substantial amount of financial data about
our accounts. We use that information to calculate our financial results and to prepare our financial statements. If we later find errors in that information, we may be



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required to restate our financial statements. If that occurs with respect to us or any other Sprint PCS affiliate, investors and securities analysts may lose
confidence in us. In fact, we and Sprint PCS have discovered billing and other errors or inaccuracies that have been material to us. If we are required to make adjustments to our financial statements as a result of these inaccuracies, that could
negatively affect the investment communitys perception of us. For more information about these inaccuracies, please see the section of these Risk Factors entitled Risks Particular to the Our Relationship with Sprint PCS.



Our common stock was delisted from the Nasdaq National
Market effective May 8, 2003 and is now quoted on the Over the Counter (OTC) Bulletin Board.



Our common stock was delisted from the Nasdaq National Market effective May 8, 2003 and is now quoted on the OTC Bulletin Board. The stock was delisted
because we did not meet Nasdaqs requirements for continued listing related to our stock price and stockholders equity. Since then, it has become more difficult to buy and sell our shares and securities analysts and news media have lost
much of their interest in us. Additionally, we may become subject to SEC rules that affect penny stocks, which are stocks priced below $5.00 per share that are not quoted on a Nasdaq market. These rules would make it more difficult for
brokers to find buyers for our shares and could lower the net sales prices that our stockholders are able to obtain.



If our common stock price remains low, we may not be willing or able to raise equity capital.



Our business is capital intensive, and we may contemplate raising equity
capital in the future. A low stock price may frustrate our doing so, for two reasons:



| |  | We may be unwilling to sell our shares at such prices.
| | - | ------------------------------------------------------



| |  | Investors may not be interested in a company whose shares are priced so low.
| | - | ----------------------------------------------------------------------------



Risks Related to the Our Business, Strategy and Operations



Overview of this subsection:



None of our operating subsidiaries has ever operated profitably or achieved consistent positive cash flow. If that
doesnt change, we will not have enough cash to run our business, as more fully discussed in the Managements Discussion section of this report. Timely expansion or completion of the PCS networks of our operating subsidiaries is a key to
our success, but we face numerous challenges in doing that. Revenues we receive from travelers in our territories will likely not meet our expectations.



Our operating subsidiaries have not yet operated their PCS businesses profitably or achieved consistent positive cash flow.



We expect to continue to incur significant operating losses and we expect IWO
to continue to generate negative cash flow while we complete and/or expand our PCS networks and build our customer base. Our ultimate profitability will depend upon many factors, including our ability to market our services successfully and operate
our networks efficiently, in addition to numerous other factors that are described in this Risk Factors section. If we fail to achieve at least consistent positive cash flow within a reasonable period of time, we may not be able to
service our debt and an investment in our securities may not have much value.



If our business strategies are not implemented or are unsuccessful, our business could be adversely affected.



Our strategies seek to (1) limit capital expenditures to required technical upgrades and only adding cell site coverage in areas that are expected to
produce positive cash returns, (2) sell certain assets that are not part of our core PCS business, (3) reduce the number of our employees and our corporate overhead and close retail outlets that do not meet minimum internal rates of return, (4)
evaluate, and in certain cases renegotiate, certain expenses, (5) reduce customer turnover or churn rate and improve customer service and credit quality, (6) improve US Unwireds relationship with Sprint PCS and (7) increase our market share
among higher credit quality customers



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and initiate pre-payment and deposit programs for certain high credit risk subscribers. We have implemented all of these strategies, except for improving our
relationship with Sprint PCS, but it is still too early to determine whether these strategies will have any positive or negative long-term effect on our business. In particular:



| |  | Because technology in our business continually evolves, we may be required to spend significant amounts of money on capital expenditures or risk obsolescence.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We may lose customers if they are not satisfied with our coverage.
| | - | ------------------------------------------------------------------



| |  | Although we have divested our cellular business and certain PCS licenses and we have agreed to sell approximately 90 cell site towers, the amounts realized will not be significant
to our overall cash flow requirements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Our reduced workforce may not be sufficient and our service may suffer because of it.
| | - | -------------------------------------------------------------------------------------



| |  | We may not be able to improve our cost structure because we cannot control the outcome of negotiations with counter parties, including Sprint PCS.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Our relationship with Sprint PCS could deteriorate further as a result of the lawsuits we have filed against Sprint and Sprint PCS and that Sprint and Sprint PCS have filed against
us.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We may not be able to reduce customer churn, and the introduction of wireless number portability in a significant portion of our markets beginning in November 2003 may cause it to
increase.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We may not be able to improve customer quality without restricting overall subscriber growth.
| | - | ---------------------------------------------------------------------------------------------



Potential loss of management fees from IWO would result in material loss of revenue and income and have a material
adverse effect on our liquidity and financial condition.



US Unwired currently receives management fees from IWO, which amounted to $8.4 million in 2003. There is a risk that this arrangement could be terminated due to the uncertainties surrounding IWO. This result could occur if IWO were to file
for bankruptcy and elect to terminate this arrangement. Moreover, IWOs lenders are entitled to designate a manager for the IWO business and may not choose us. In addition, we believe our equity position in IWO currently has negligible
value.



We will not receive as much Sprint PCS net
travel, or roaming, revenue as we anticipated.



We are paid
a fee from Sprint PCS for every minute that a Sprint PCS subscriber based outside of our markets uses the Sprint PCS network in our markets. Similarly, we pay a fee to Sprint PCS for every minute that a Sprint PCS subscriber based in our markets
uses the Sprint PCS network outside our markets. Sprint PCS subscribers from our markets may spend more time in other Sprint PCS coverage areas than we anticipate and Sprint PCS subscribers from outside our markets may spend less time in our markets
or may use our services less than we anticipate. As a result, we may receive less Sprint PCS travel revenue than we anticipate or we may have to pay more Sprint PCS travel fees than the travel revenue we collect.



Under our agreements with Sprint PCS, we believe that Sprint PCS can change
the fee, called a travel rate, within certain limitations, that we receive and pay for each Sprint PCS travel minute. Sprint PCS changed the reciprocal travel rate for Louisiana Unwired from $0.20 per minute in 2002 to $0.058 per minute in 2003 and
for IWO, Georgia PCS and Texas Unwired from $0.10 per minute in 2002 to $0.058 per minute in 2003. Sprint PCS notified us that the rate will further decrease for all of our markets from $0.058 per minute to $.041 per minute in 2004. We have notified
Sprint and Sprint PCS that we believe these particular reductions are not in accordance with our agreements with Sprint PCS, and we have included these reductions among our claims in our lawsuit against Sprint and Sprint PCS that is discussed in
more detail below under the caption Risks Particular to Our Relationship with Sprint PCS. However, our recourse against Sprint PCS for these reductions may be limited. Currently the revenues we receive for subscribers of Sprint PCS and
its other network partners using our networks exceed the expenses that we pay for our subscribers using their networks. The change in the travel rate



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will further materially decrease our revenues, expenses and our net travel position, which is the difference between travel revenue and travel expense, and
will further materially decrease our cash flow from operations. For 2003, the reduction in the travel rate caused a $133.4 million decrease to our revenues, a $107.4 million decrease to our expenses and a reduction in cash flow of $26.0
million.



If we do not successfully manage our
operations and expected growth, our operating performance may be adversely impacted.



Our operating subsidiaries have limited operating histories as Sprint PCS affiliates. Louisiana Unwired began operations as a Sprint PCS affiliate on June 8, 1998, IWO on January 5, 2000, Texas Unwired on January 7,
2000 and Georgia PCS on June 8, 1998. The combined companys ability to achieve and sustain operating profitability will depend upon many factors, including our operating subsidiaries abilities to effectively market Sprint PCS services
and manage customer turnover rates in their respective markets. In addition, a key factor the combined companys operational performance will depend upon is our ability to manage growth of the combined company through the expansion or
completion of IWOs network build-out, which appears unlikely at present. To be successful, our operating subsidiaries will require continued development, construction, testing, deployment and operation of their respective networks. These
activities are expected to place demands on our managerial, operational and financial resources.



The failure of any of our operating subsidiaries to timely expand or complete the build-out of its network, or to obtain the equipment needed for
completion on a timely basis, may result in a decrease in the number of expected new PCS subscribers and adversely affect its and the combined companys results of operations or, in the case of IWO, result in a breach of its agreements with
Sprint PCS or, in the case of LA Unwired, result in the loss of the FCC licenses that it owns.



LA Unwired has completed the network build-out that is required by its agreements with Sprint PCS. Nevertheless, we may decide from time to time to build
out additional portions of its markets to increase the population that is covered by its Sprint PCS service or we may acquire additional territory to be built out by acquiring additional markets from Sprint PCS or by acquiring other Sprint PCS
network partners that have not completed their build-out requirements. Due to liquidity issues as described in Note 2 above, IWO has not yet completed its required build-out and has determined to abandon the construction of cell sites that do not
provide a sufficient level of enhanced coverage. In 2003, IWO recorded an asset abandonment charge of $12.1 million for the cell sites and related property leases of these abandoned cell sites. Included in this asset abandonment are cell sites that
IWO is required to construct to meet the build out requirements under the IWO Sprint Management Agreement. Failure to complete the build-out of the IWO service area may place IWO in default of its Sprint PCS Management Agreement, and Sprint PCS may
take actions up to and including termination of the Management Agreement. We estimate that IWO will need to spend approximately $11.4 million to complete the construction of the cell sites it plans to complete and make those sites operational.



In order to expand or complete network build-outs, our
operating subsidiaries must successfully lease or otherwise retain rights to a sufficient number of radio communications and network control sites, complete the purchase and installation of equipment, build-out the physical infrastructure and test
the network. The applicable company must also meet all requirements of its agreements with Sprint PCS and all FCC requirements. One of these FCC requirements is that our networks not interfere with microwave radio systems. Compliance with that
requirement could delay or impede expansion or build-out of our networks. Regulatory changes, engineering design changes and required technological upgrades could affect the number and location of our operating subsidiaries towers as well as
their ability to obtain sufficient rights to meet their network build-out expansion goals or requirements. Some of the radio communications and network control sites required for IWO to complete its required build-out are likely to require zoning
variances or other local governmental or third party approvals. The local governmental authorities in various locations in IWOs markets have, at times, placed moratoriums on the construction of additional cell sites. The expansion of our
networks or the completion of



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IWOs build-out could also be impaired by changes Sprint PCS may make in its technology or network. Any failure by IWO to complete its network build-out
on a timely basis may limit its network capacity and/or reduce the number of its expected new PCS subscribers, either of which could adversely affect our or IWOs results of operations and financial condition or result in IWOs breach of
its agreements with Sprint PCS. Any failure by LA Unwired to expand its network on a timely basis may limit its network capacity and/or reduce the number of its expected new PCS subscribers, either of which could adversely affect our results of
operations and financial condition or result in a loss of LA Unwireds licenses.



The foregoing expansion, as well as maintenance, capacity enhancements and coverage improvements, could require additional capital expenditures that we may not be able to fund. Additional funds could be required for a
variety of reasons, including unanticipated expenses or operating losses. We may face significant limitations on our ability to obtain additional funds. Even if those funds are available, we may not be able to obtain them on a timely basis, or on
terms acceptable to us or within limitations permitted by our debt agreements. Failure to obtain additional funds, should the need for them develop, would result in the delay or abandonment of our development and expansion plans.



Our liquidity situation has forced us to sell assets without any certainty
of improvement in our long-term financial condition.



Because our cash flow from operations may be insufficient in the long term to fund our capital requirements and our access to capital markets may be limited, we have sold certain assets that we consider non-core to our business consisting
of our cellular business and certain non-essential PCS licenses. We have also entered into a sale and leaseback agreement for approximately 90 cell site towers with a minimum aggregate purchase commitment of $10 million, with the possibility of
selling the remaining towers at a later date. Although we have divested certain non-core assets, the amounts realized will not be significant to our overall cash flow requirements because the holders of the US Unwired senior bank credit facility are
requiring us to use a significant portion of the net proceeds from the non-core asset sales to repay existing bank debt.



Our ability to sell core assets is subject to several restrictions under the Sprint PCS agreement. Our operating subsidiaries are subject to a prohibition
on the sale of certain of its assets to competitors of Sprint or Sprint PCS. Also, Sprint PCS has the right of first refusal on certain sales of our operating subsidiaries operating assets to a third party, and under certain circumstances
Sprint PCS could purchase our operating subsidiaries operating assets at a discount. See Risks Particular to Our Relationship with Sprint PCS. These and other restrictions may limit our ability to sell core assets and may also
reduce the value a buyer would be willing to pay for such core assets. Also, we cannot assure you that our core assets will be sold quickly enough or for sufficient amounts to enable us to meet our obligations.



Sales of core assets may lead to loss of revenues generated by these core
assets and/or an increase in operating expenses and may materially reduce our capacity to generate cash flows. This, in turn, may adversely impact our ability to satisfy financial covenants and to service our outstanding obligations as they become
due. If we fail to satisfy our financial covenants under our senior secured credit facility, our lenders would be permitted to declare a default and accelerate payments due under the loan which would in turn give rise to an event of default under
our senior notes.



We may not be able to obtain the
communications equipment that we need to expand our network.



From time to time, there is considerable demand for the communications equipment that our operating subsidiaries need to expand or complete their networks, and manufacturers of this equipment could have substantial backlogs of orders.
Competitors who purchase large quantities of communications equipment may receive priority in the delivery of this equipment. If our operating subsidiaries cannot get this equipment, they may fail to expand or construct their networks timely.



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We obtain most of our network equipment from two suppliers. This equipment is not interchangeable, and
we would be materially adversely affected if we could not obtain this network equipment timely or at all.



Our PCS networks are either Lucent networks, meaning that the network equipment is supplied by Lucent, or Nortel networks, meaning that the network
equipment is supplied by Nortel. If additional equipment is needed for expansion or repair of a network, it must come from Lucent, if the network is a Lucent network, or Nortel, if the network is a Nortel network, for compatibility with our existing
network equipment. If either of these suppliers should cease or delay to supply its equipment, we would be prevented or delayed in expanding or repairing the affected network or completing the IWO build-out.



Any inability to expand our networks, or to keep them repaired or to complete
the IWO build-out, could have a material adverse effect on us.



Our territory has limited amounts of licensed spectrum, which may adversely affect the quality of our service and our results of operations.



We have sold eight non-core PCS licenses. LA Unwired still owns five PCS licenses for 10 MHz of spectrum. Sprint PCS has licenses for 10 to 30 MHz of
spectrum in all of our territories, which we have an agreement to use. In the future, as the number of subscribers in our territories increases, this limited amount of licensed spectrum may not be able to accommodate increases in call volume, may
lead to increased dropped or blocked calls and may limit our ability to offer enhanced services, all of which could result in increased customer turnover and adversely affect the combined companys results of operations and financial condition.



If any of our operating subsidiaries loses the right to
install its equipment on wireless towers or is unable to renew expiring leases for wireless towers on favorable terms or at all, our business and results of operations could be adversely impacted and we may not comply with our agreements with Sprint
PCS.



Substantially all of the cell sites of our operating
subsidiaries are installed on leased tower facilities that are shared with one or more other wireless service providers. In addition, a large portion of these leased tower sites are owned by a few tower companies. If a master agreement with one of
these tower companies were to terminate, or if one of these tower companies were unable to support use of its tower sites by any of our operating subsidiaries, the affected subsidiaries would have to find new sites or may be required to rebuild the
affected portion of their networks. In addition, the concentration of our operating subsidiaries cell sites with a few tower companies could adversely affect our results of operations and financial condition if any of our operating
subsidiaries is unable to renew its expiring leases with these tower companies on favorable terms or at all. If any of the tower leasing companies that we do business with should experience severe financial difficulties, or file for bankruptcy
protection, our ability to use our towers could be adversely affected. That, in turn, would aversely affect our revenues and financial condition if a material number of towers were involved and may result in non-compliance with our Sprint PCS
management agreements.



The loss of the officers and skilled
employees upon whom we depend to operate our business or the inability to attract additional personnel for the combined companys growth could adversely affect the combined companys results of operations.



Our business is managed by a small number of executive officers. We believe
that our future success will depend in part on our continued ability to retain these executive officers and to attract and retain highly qualified technical and management personnel for the combined company. We may not be successful in retaining key
personnel or in attracting and retaining other highly qualified technical and management personnel. We have adopted a retention plan for our key employees under which they can receive a payment of 30% to 50% of their base salary on certain dates
over the next two years, if they remain employed by us and if certain other conditions are met. We cannot guarantee that this plan will be successful. We do not maintain policies of life insurance on our key executives. In addition, we granted stock
options as a method of attracting and retaining employees, to motivate performance and to align the interests of management with those of our stockholders. Due to the decline



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in the trading price of our common stock, a substantial number of the stock options held by our employees have an exercise price that is higher than the
current trading price of our common stock, and therefore these stock options may not be effective in helping us to retain valuable employees.



Expanding LA Unwireds or IWOs territory may have a material adverse effect on its business and reduce the market value of our securities.



As part of LA Unwireds and IWOs continuing
operating strategy, it may expand its territory through the grant of additional markets from Sprint PCS or through acquisitions of other Sprint PCS network partners. These transactions may require the approval of Sprint PCS and commonly involve a
number of risks, including the:



| |  | difficulty of integrating acquired operations and personnel;
| | - | ------------------------------------------------------------



| |  | diversion of managements attention;
| | - | ------------------------------------



| |  | disruption of ongoing business;
| | - | -------------------------------



| |  | impact on our cash and available credit lines for use in financing future growth and working capital needs;
| | - | -----------------------------------------------------------------------------------------------------------



| |  | inability to retain key personnel;
| | - | ----------------------------------



| |  | inability to successfully incorporate acquired assets and rights into our service offerings;
| | - | --------------------------------------------------------------------------------------------



| |  | inability to maintain uniform standards, controls, procedures and policies; and
| | - | -------------------------------------------------------------------------------



| |  | impairment of relationships with employees, subscribers or vendors.
| | - | -------------------------------------------------------------------



Failure to overcome these risks or any other problems encountered in these transactions could have a material adverse effect on the combined
companys business. In connection with these transactions, we may issue additional equity securities, and we may, subject to any necessary approval of existing bank credit facility lenders, incur additional debt or incur significant
amortization expenses related to certain intangible assets connected with a newly acquired Sprint PCS management agreement or a newly acquired subscriber base.



Our service area will be threatened by bad weather, including hurricanes and severe winter weather, which could cause interruptions in service
resulting in increased expenses and reduced operating results.



Much of LA Unwireds service area is on or near the Gulf of Mexico or the Atlantic Ocean and could be damaged by bad weather like hurricanes and excessive rain. In addition, the IWO service area could be adversely affected by severe
winter storms. We may face service interruptions for indefinite periods if a major hurricane or winter storm strikes one or more of our service areas, resulting in increased expenses and reduced operating results.



Unauthorized use of our networks could disrupt our business.



We will likely incur costs associated with the
unauthorized use of our networks, including administrative and capital costs associated with detecting, monitoring and reducing the incidence of fraud. Fraud impacts interconnection costs, capacity costs, administrative costs, fraud prevention costs
and payments to other carriers for unbillable fraudulent roaming.



IWOs projected build-out plan and LA Unwireds completed build-out do not cover all of their territories, which could make it difficult to maintain profitable customer bases.



As of December 31, 2003, LA Unwired covered approximately 73% of the resident
population in its territory and IWO covered 75% of residents in its territory. IWOs projected build-out plan, which has currently been suspended due to liquidity issues, and LA Unwireds build-out do not cover all their service areas. The
coverage may not adequately serve the needs of the potential subscribers in the respective territories or attract



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enough subscribers to operate our business successfully. To correct this potential problem, LA Unwired or IWO may have to cover a greater percentage of its
territory than anticipated, which it may not have the financial resources to complete or may be unable to do profitably.



Sprint PCSs roaming arrangements may not be competitive with other wireless service providers, which may restrict our ability to attract and
retain subscribers and create other risks for us.



We rely
on Sprint PCSs roaming arrangements with other wireless service providers for coverage in some areas where Sprint PCS service is not yet available. The risks related to these arrangements include:



| |  | the quality of the service provided by another provider during a roaming call may not approximate the quality of the service provided by the Sprint PCS network;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the price of a roaming call off our network may not be competitive with prices of other wireless companies for roaming calls;
| | - | -----------------------------------------------------------------------------------------------------------------------------



| |  | subscribers must end a call in progress and initiate a new call when leaving the Sprint PCS network and entering another wireless network;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS subscribers may not be able to use Sprint PCSs advanced features, such as high speed Internet access and voicemail notification, while roaming; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS or the carriers providing the service may not be able to provide us with accurate billing information on a timely basis.
| | - | -----------------------------------------------------------------------------------------------------------------------------------



If Sprint PCS subscribers are not able to roam instantaneously or efficiently
onto other wireless networks, we may lose current Sprint PCS subscribers and our Sprint PCS services will be less attractive to new subscribers.



Sales of wireless products and services in our territory by a reseller that is 50% owned by Sprint PCS could reduce our number of
subscribers and our margins.



We allow a company, called a
reseller, to sell wireless products and services in our territories. Our networks provide the wireless services that are sold by the reseller in our territories. We receive income from the reseller that we consider to be a fair return for this use
of our networks, but our margins are greater when we generate our own subscribers. The reseller is 50% owned by Sprint PCS.



Risks Particular to the Indebtedness of the Combined Company



Note: We have two separate debt structures. Each of US Unwired and IWO has issued senior notes under agreements called
indentures, and each of them has senior credit facilities with banks. Because of restrictions in the indentures governing the senior notes and the credit agreements governing the senior credit facilities, funds borrowed by US Unwired may not be used
to finance IWO and IWOs subsidiaries but are available for all of US Unwireds other subsidiaries. Because of the same restrictions, funds borrowed by IWO may be used only to finance IWO and IWOs subsidiaries.



Overview of this subsection:



US Unwired and IWO have a substantial amount of debt. They cannot borrow
from their banks unless they meet the banks requirements for borrowing. IWO has in fact failed to make interest payments on its senior bank credit facility. The recent economic downturn is making it more difficult to meet the banks
requirements. US Unwired and its senior lenders have agreed to a reduction in the amount of credit available under its revolving credit facility from $80 million to $40 million. If we fail to repay our debt on time, our lenders may foreclose on our
assets and, if that occurs, our stock will probably be worthless.



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Both US Unwired and IWO have substantial debt that neither of them may be able to service; a failure
to service this debt may result in the lenders under this debt taking away assets of ours (other than IWOs) if US Unwired fails to service its debt, or assets of IWO if IWO fails to service its debt.



The substantial debt of US Unwired and IWO will have a number of important
consequences for our operations and our investors, including the following:



| |  | Each company will have to dedicate a substantial portion of any cash flow from its operations to the payment of interest on, and principal of, its debt, which will reduce funds
available for other purposes;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Neither company may be able to obtain additional financing for capital requirements, capital expenditures, working capital requirements and other corporate purposes;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Some of each companys debt, including financing under each companys senior credit facility, will be at variable rates of interest, which could result in higher interest
expense in the event of increases in market interest rates;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In 2003, IWO failed to make $9.5 million in interest payments on its $240 million senior bank credit facility, and effective as of the date of the first missed payment, we believe
all loans under the senior bank credit facility bear interest 4.25-4.75 percent above the agent banks prime rate;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Due to the liens on substantially all of each companys assets and the pledges of stock of each companys existing and future subsidiaries as collateral for such
companys senior debt, lenders may control US Unwireds or IWOs assets or the assets of the subsidiaries of US Unwired or IWO in the event of a default.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



US Unwireds and IWOs ability to make payments on their respective debt will depend upon their future operating
performance, which is subject to general economic and competitive conditions and to financial, business and other factors, many of which neither of them can control. If the cash flow from either companys operating activities is insufficient,
US Unwired or IWO may continue to take actions such as delaying or reducing capital expenditures, attempting to restructure or refinance its debt, or selling assets or operations or it may seek additional equity capital. Any or all of these actions
may not be sufficient to allow US Unwired or IWO to service its debt obligations or may adversely affect its results of operations. Further, US Unwired or IWO may be unable to take any of these actions on satisfactory terms, in a timely manner or at
all. The credit facilities and indentures governing US Unwireds and IWOs respective debt limit their ability to take several of these actions, and limit their ability to borrow more money. Their failure to generate sufficient funds to
pay their debts or to successfully undertake any of these actions could, among other things, materially adversely affect the market value of US Unwired common stock or other securities or result in lenders controlling the assets of each of them and
their subsidiaries (other than unrestricted subsidiaries).



If US Unwired does not meet all of the conditions required under its credit facilities, it may not be able to draw down all of the funds it anticipates receiving from the lenders and it may not be able to fund operating losses and
working capital needs. IWO does not meet the conditions required under its credit facility, and its lenders have refused to make further funds available to it. Without additional funds, IWO will not be able to fund operating losses and working
capital needs.



As of December 31, 2003, US Unwired had
approximately $76.0 million outstanding under its senior credit facility and IWO had approximately $213.2 million outstanding under its senior credit facility. As of December 31, 2003, IWO had $19.4 million in restricted cash. As of December 31,
2003, US Unwired had $38.3 million of availability under its senior bank credit facility, after giving consideration to $1.7 million in outstanding letters of credit, and IWO had no availability under its senior bank credit facility. As discussed in
Note 2 to our consolidated financial statements below, on October 30, 2003, US Unwired and the holders of the US Unwired senior bank credit facility revised certain provisions of the US Unwired $130 million senior bank credit facility through
execution of the third amendment to the US Unwired senior bank credit facility. US Unwired and its senior lenders agreed to a revised set of financial covenants, a reduction in the amount of available credit under its revolving credit facility from
$80 million to $40 million, subject to certain borrowing conditions, an



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immediate $10.0 million partial repayment of the US Unwired senior bank term loans and a 0.5% increase in the interest rate. The US Unwired senior bank
credit facility allows for up to $2.0 million in letters of credit and any letters of credit issued by US Unwired reduce the amount available under the revolving credit facility.



The availability of US Unwireds or IWOs senior bank credit facilities is subject to the applicable company
meeting all of the conditions specified by the respective financing documents and, in addition, is subject at each funding date to specific conditions, including the following:



| |  | that the representations and warranties in such companys loan documents are true, correct and complete in all material respects;
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| |  | that such companys financial and operating covenant tests are satisfied, including leverage and operating performance covenants and covenants relating to earnings and cash
flow;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | that we are solvent; and
| | - | ------------------------



| |  | the absence of a default under such companys loan documents, including its indenture.
| | - | --------------------------------------------------------------------------------------



US Unwired was in compliance with the restrictive covenants of its senior secured credit facility at December 31, 2003 and,
as noted above, recently amended its covenants to permit more flexibility in covenant compliance. However, due to the nature of the revised covenants, should actual results differ from the underlying business model assumptions, US Unwireds
ability to comply with the amended financial covenants could be adversely affected. US Unwired could be required to raise additional capital that may or may not be available on terms acceptable to it, if at all. This could have a material adverse
effect on US Unwireds ability to achieve its intended business objectives. Based on our current assumptions, however, we believe that US Unwired will comply with the financial covenants of its amended senior bank credit facility and will have
sufficient cash to fund its operations, debt service and capital requirements over the next twelve months.



IWO was not in compliance with its restrictive covenants of its senior bank credit facility at December 31, 2003 and in 2003, IWO failed to make $9.5
million in interest payments on its $240 million senior bank credit facility. The holders of the IWO senior bank credit facility have denied IWO access to the remaining $25.2 million of availability as a result of covenant violations and the missed
interest payments. As a result, we have classified all of IWOs outstanding indebtedness, including its senior bank credit facility and its senior notes, as a current liability. The Company is in discussions with the IWO banking group to arrive
at an acceptable restructuring to preserve IWO liquidity but has been unable to develop an acceptable plan. We currently anticipate seeking bankruptcy protection for IWO in 2004.



Please see the discussion under Risks Related to Factors Currently Affecting Our Business, below.



US Unwired may fail and IWO has failed to pass financial and business
tests under its separate senior credit facilities.



US
Unwireds and IWOs senior credit facilities require US Unwired and IWO to maintain specified financial ratios and to satisfy specified tests. Depending on the company, these tests include:



| |  | minimum number of subscribers and/or average revenue per subscriber;
| | - | --------------------------------------------------------------------



| |  | maximum dollar amounts for capital expenditures;
| | - | ------------------------------------------------



| |  | various leverage tests;
| | - | -----------------------



| |  | minimum last four quarters operating cash flow;
| | - | -----------------------------------------------



| |  | a minimum debt service coverage test;
| | - | -------------------------------------



| |  | interest coverage tests; and
| | - | ----------------------------



| |  | fixed charges.
| | - | --------------



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As a result of covenant violations, the holders of the IWO senior bank credit facility have denied IWO
access to the remaining available funds. We believe that US Unwired is currently in compliance with all financial and operating covenants relating its senior secured credit facility and, based upon existing assumptions in the business model, we
believe that it will be able to comply with the financial covenants of the amended US Unwired senior bank credit and have sufficient cash to fund its operations, debt service and capital requirements over the next twelve months. Should actual
results differ from the underlying business model assumptions, our liquidity position and ability to comply with the amended financial covenants could be adversely affected. Additionally, if our business does not generate the results required by the
covenants in the senior secured credit facility, our ability to make borrowings under the revolving line of credit required to operate our business would be restricted or terminated and the credit facility could be declared in default. Such a
restriction, termination or declaration of default would have a material adverse affect on our liquidity. In addition to making funds under the senior bank credit facility unavailable to US Unwired and, in the case of IWO where there is no
availability under the senior bank credit facility, an event of default under its senior credit facilities would in the case of US Unwired and does in the case of IWO prohibit it from paying its senior notes, which would cause a default under the
affected companys indenture, or may result in the affected companys lenders controlling substantially all of the affected companys assets or accelerating the maturity of the affected companys debt. Should this occur to US
Unwired, the common stock and other securities of US Unwired may have little or no value.



Please see the discussion under Risks Related to Factors Currently Affecting Our Business, below.



If US Unwired or IWO needs additional financing that it cannot obtain, it may have to change its network construction plans and modify its business
plans. If the affected company is US Unwired, the network construction plans of LA Unwired may also have to be changed.



US Unwired expects to make significant capital expenditures to expand the PCS networks of LA Unwired. Actual expenditures may differ significantly from
estimates. US Unwired would have to obtain, subject to the approval of its senior lenders, additional financing to fund LA Unwireds network expansion plans, and IWO would have to obtain additional financing to fund its network construction or
expansion plans, if:



| |  | existing sources of capital are unavailable or insufficient;
| | - | ------------------------------------------------------------



| |  | LA Unwired or IWO significantly departs from or changes its business plan;
| | - | --------------------------------------------------------------------------



| |  | LA Unwired or IWO experiences unexpected delays or cost overruns in the expansion or completion of its network, including changes to the schedule or scope of the network build-out
or expansion;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | changes in technology or governmental regulations create unanticipated costs; or
| | - | --------------------------------------------------------------------------------



| |  | LA Unwired or IWO acquires additional licenses or Sprint PCS grants any of them more service areas to build out and manage.
| | - | ---------------------------------------------------------------------------------------------------------------------------



IWO needs to make significant capital expenditures to complete or expand its
PCS network and has abandoned cell sites required to complete its build-out due to liquidity issues. IWO will be required to obtain additional financing to fund its network completion or expansion, including the completion of the cell sites it has
not abandoned.



We cannot predict whether any additional
financing will be available to US Unwired or IWO or on what terms such financing would be available. If either US Unwired or IWO needs additional financing that it cannot obtain, the affected company will have to change its plans for the remainder
of its network, which would adversely affect such companys expected future results of operations.



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US Unwireds and IWOs indebtedness place restrictions on them which will limit their
operating flexibility and US Unwireds and IWOs ability to engage in some transactions.



The respective indentures governing US Unwireds and IWOs senior notes and their respective senior credit facilities impose material operating
and financial restrictions on US Unwired and its subsidiaries (other than IWO), on the one hand, and on IWO and its subsidiaries, on the other hand. These restrictions may limit their ability to engage in some transactions, including the following:



| |  | completing designated types of mergers or consolidations;
| | - | ---------------------------------------------------------



| |  | creating liens;
| | - | ---------------



| |  | paying dividends or other distributions to their stockholders;
| | - | --------------------------------------------------------------



| |  | making investments;
| | - | -------------------



| |  | selling assets;
| | - | ---------------



| |  | repurchasing their common stock or debt instruments like their senior notes;
| | - | ----------------------------------------------------------------------------



| |  | changing lines of business;
| | - | ---------------------------



| |  | borrowing additional money;
| | - | ---------------------------



| |  | entering into transactions with their affiliates; and
| | - | -----------------------------------------------------



| |  | issuing additional shares of common stock.
| | - | ------------------------------------------



These restrictions could also limit their ability to obtain financing by borrowing money or issuing common stock, refinance or pay principal or interest
on US Unwireds or IWOs outstanding debt, consummate acquisitions for cash or debt or react to changes in their operating environment. Moreover, these restrictions could cause the combined company to be at a competitive disadvantage to
competitors who do not have similar restrictions.



If a
specified change in control of US Unwired or IWO occurs, the affected company may not be able to buy back its senior notes as required by its indenture.



If US Unwired or IWO has a change in control as defined under its indenture, the applicable company will be required to offer to buy back all of its
outstanding senior notes. We cannot assure you that US Unwired or IWO will have sufficient funds at the time of a change in control to perform this obligation or that restrictions in its credit facilities would allow it to do so. US Unwireds
or IWOs requirement to buy back its notes upon a change in control could impair the value of US Unwired common stock and other securities or could cause a default under the affected companys indenture which, in turn, would cause a
default under its senior credit facility. In addition, a change in control as defined under US Unwireds or IWOs respective credit facilities would cause the affected company to default under its senior credit facility.



If US Unwired or IWO defaults under its senior credit facilities, the
affected companys lenders may declare its debt to be immediately due and payable and Sprint PCS may force the affected company to sell its assets to Sprint PCS without stockholder approval.



IWO has defaulted on its senior credit facility. If its lenders accelerate
the maturity of its debt, or if US Unwired defaults and its debt is accelerated, Sprint PCS has the option to purchase the affected companys assets at a discount to market value and assume that companys obligations under its senior
credit facility without further approval of the stockholders of the affected company. If Sprint PCS does not exercise this option, the affected companys lenders may sell its assets to third parties without further approval of the stockholders
of the affected company.



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If either US Unwired or IWO fails to pay the debt under its credit facility, Sprint PCS has the option
of purchasing the affected companys loans, giving Sprint PCS certain rights of a creditor to foreclose on that companys assets.



Sprint PCS has contractual rights, triggered by an acceleration of the maturity of the debt under US Unwireds or IWOs respective senior credit
facility, pursuant to which Sprint PCS may purchase US Unwireds or IWOs obligations to its senior lenders and obtain the rights of a senior lender. To the extent Sprint PCS purchases these obligations, Sprint PCSs interests as a
creditor would likely conflict with our interests. Sprint PCSs rights as a senior lender would enable it to exercise rights with respect to the affected companys assets and its continuing relationship with Sprint PCS in a manner not
otherwise permitted under US Unwireds or IWOs Sprint PCS agreements.



Risks Particular to Our Relationship with Sprint PCS



Overview of this subsection:



We depend heavily on Sprint PCS. It performs our billing, designs and advertises the products and services we sell, and provides our customer service, in
addition to a wide variety of other services, including network design, research and development. If Sprint PCS does not succeed, it is highly unlikely that we will succeed. We have little influence with Sprint PCS under our agreements with it. We
have recently sued and been countersued by Sprint.



The
termination of LA Unwireds or IWOs affiliation with Sprint PCS or Sprint PCSs failure to perform its obligations under the Sprint PCS agreements would severely restrict the affected companys ability to conduct its business.



LA Unwired owns few of the FCC licenses that we operate.
IWO does not own any FCC licenses. Each of our operating subsidiaries operates under the FCC licenses of Sprint PCS and LA Unwired that are applicable to its territory. Other than performing its contractual obligations under the management agreement
and other related agreements between us, Sprint PCS is not obligated to provide us with any support in connection with our business or otherwise. The ability of each of our operating subsidiaries to offer Sprint PCS products and operate a PCS
network is almost entirely dependent on its Sprint PCS agreements remaining in effect and not being terminated.



| |  | These agreements give it the right to use the Sprint® and Sprint PCS® brand names and logos and related rights. If it loses these rights, our operations will be impaired.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | These agreements impose strict requirements on the construction of each companys network. IWO has not yet completed construction of its network and has determined to abandon
the construction of certain cell sites that it is required to construct under its Sprint Agreement. If IWO does not meet its build-out requirements, these agreements may be terminated and IWO could lose the right to be the provider or sole provider
of Sprint PCS products and services in IWOs service area.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | These agreements require our operating subsidiaries to meet strict technical requirements such as the percentage of time the network is operative, the percentage of dropped calls,
the ratio of blocked call attempts to total call attempts, the ratio of call origination to termination failures, and call transport requirements for links between cell sites, switches and outside telephone systems. If these and other requirements
are not met, Sprint PCS can terminate the affected agreements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Sprint PCS agreements of any of our operating subsidiaries may be terminated also if any of Sprint PCSs FCC licenses are lost or jeopardized, or if the subsidiary becomes
insolvent.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | These agreements give Sprint PCS a substantial amount of influence and control over the conduct of each companys business. Sprint PCS may make decisions that adversely affect
our operating subsidiaries business, like introducing costly new products that fail in the marketplace or setting the prices for its national plans at levels that may not be economically sufficient for our operating subsidiaries
business.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | If any of our management agreements are terminated, we may be required to sell our operating assets to Sprint PCS. This sale may take place for a price equal to 72% of our entire
business value, subject to the valuation criteria and procedures described under Certain of Our Agreements with Sprint PCS. The provisions of our management agreement that allow Sprint PCS to purchase our operating assets at a discount
may limit our ability to sell our business, reduce the value a buyer would be willing to pay for our business and limit our ability to obtain new investment or support from any source. If we were to file for bankruptcy protection, the management
agreement would provide Sprint PCS with various remedies, including purchase rights at a discount to market value, though we cannot predict if or to what extent such remedies would be enforceable. In addition, we may be very reluctant to reject the
management agreement under Section 365 of the federal Bankruptcy Code because our ability to conduct our business without it would be severely restricted. If Sprint PCS were to file for bankruptcy, Sprint PCS may be able to reject the management
agreement under Section 365 of the federal Bankruptcy Code. In addition, in the event of a Sprint PCS bankruptcy, the management agreement would provide us various remedies, including purchase and put rights, though we cannot predict if or to what
extent our remedies would be enforceable. In any event, a bankruptcy by Sprint PCS could severely restrict our ability to conduct our business for the reasons set forth above. For additional information concerning the remedies available under the
management agreement, see Certain of Our Agreements with Sprint PCS.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The management agreements are not perpetual. If Sprint PCS decides not to renew the management agreements at the expiration of the 20-year initial term or any 10-year renewal term,
the affected subsidiaries would no longer be a part of the Sprint PCS network. Moreover, each of these agreements can be terminated at any time for breach of any material term.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS is permitted to terminate the management agreements for breach of any of the material terms of the agreements. These terms include operational and network requirements
that are extremely technical and detailed and apply to each retail store, cell site and switch site. Many of these operational and network requirements can be changed by Sprint PCS with little notice. As a result, our operating subsidiaries may not
always be in compliance with all requirements of the Sprint PCS agreements. Sprint PCS conducts periodic audits of compliance with various aspects of its program guidelines and identifies issues it believes need to be addressed. There may be
substantial costs associated with remedying any non-compliance, and such costs may adversely affect our operating results and cash flow.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Sprint PCS may make business decisions that are not in the best interests of our operating subsidiaries, which may adversely affect the relationships
of our operating subsidiaries with subscribers in their territories, increase their expenses and/or decrease their revenues.



Sprint PCS, under the Sprint PCS agreements, has a substantial amount of influence and control over the conduct of the businesses of our operating
subsidiaries. Conflicts between us and Sprint PCS may arise and, if Sprint PCS owes us no duties except as set forth in the agreements, those conflicts may not be resolved in our favor. Accordingly, Sprint PCS has made and may continue to make
decisions that adversely affect LA Unwireds or IWOs business, such as the following:



| |  | Sprint PCS could price its national plans based on its own objectives and could set price levels or other terms that may not be economically sufficient for LA Unwireds or
IWOs business;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS could raise the costs it charges us to perform back office services for LA Unwired and IWO or otherwise seek to increase what we pay Sprint PCS, or it could reduce levels
of services it provides our operating subsidiaries;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS may elect, with little or no notification, to upgrade or convert its financial reporting, billing or inventory software or change third party service organizations that
can adversely affect our ability to determine or report our operating results, adversely affect our ability to obtain handsets or adversely affect our subscriber relationships.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | Sprint PCS has sought to charge us more as a result of launching the new third generation, or 3G, technology called one times radio transmission technology,
or IXRTT;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS prohibits LA Unwired or IWO from selling non-Sprint PCS approved equipment;
| | - | --------------------------------------------------------------------------------------



| |  | Sprint PCS could develop products and services, or establish credit policies such as the NDASL program that is described below, that adversely affect our business;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS has made it very expensive for us to migrate in-house or to other vendors services that they currently perform;
| | - | --------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS is negotiating its fee structure with other Sprint PCS affiliates and, if we do not enter into negotiations with Sprint PCS, it may continue to increase the fees it
charges to us. Moreover, Sprint PCS has not decreased the 2004 travel rate for Sprint PCS affiliates that have agreed to negotiate with it. We have been in discussions with Sprint PCS to modify certain components of IWOs Sprint PCS management
agreement including a fee simplification process, modification of certain build-out requirements and the settlement of IWOs outstanding disputes with Sprint, but no definitive agreement has been reached at this time. We have had no such
discussions with Sprint PCS as it relates to the affiliate agreements with other US Unwired subsidiaries.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS introduced a payment method for subscribers to pay the cost of service with us. This payment method did not initially have adequate controls or limitations, and we have
discovered that some fraudulent payments were made to accounts using this payment method. The controls and limitations have now been strengthened. If the other types of fraud become widespread, it could have a material adverse impact on our results
of operations and financial condition;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS could keep us from developing our own promotional plans that we may believe to be necessary to attract new subscribers or from selling equipment selected by us;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS could, subject to limitations under LA Unwireds and IWOs Sprint PCS agreements, alter its network and technical requirements or request that LA Unwired or IWO
build out additional areas within LA Unwireds or IWOs territories, which could result in increased equipment and build-out costs;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint or Sprint PCS could make decisions which could adversely affect the Sprint® and Sprint PCS® brand names, products or services; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS could decide not to renew the Sprint PCS agreements or to no longer perform its obligations, which would severely restrict LA Unwireds and IWOs ability to
conduct business.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Decisions such as those
referred to above could adversely affect our operating subsidiaries relationships with their subscribers by changing products, services and price plans to which those subscribers had become accustomed. Should Sprint PCS have a change of
control, or should management of Sprint PCS change, the pace at which decisions such as the foregoing occur could change, increasing the risk of disfavor from subscribers of our operating subsidiaries. In fact, Sprint has made changes to its senior
management, including replacing its chairman and chief executive officer and dismissing its president and chief operating officer.



We deal with Sprint PCS daily on a variety of issues. Sometimes we disagree with Sprint PCS or oppose what Sprint PCS would like us to do or require us to
pay, and we have numerous disputes with Sprint PCS that we have as yet been unable to resolve, many of which we have described elsewhere in these Risk Factors. This occurs particularly when Sprint PCS tells us we must adopt business methods or
pricing plans that we think will hurt our business. Our disputes with Sprint PCS, including our lawsuit against Sprint that is referred to in Note 10 to our audited consolidated financial statements that are a part of this filing and is further
described below, could adversely affect our relationship with Sprint PCS. Because we rely so heavily on our relationship with Sprint PCS, any deterioration of that relationship or of Sprint PCSs desire to cooperate with LA Unwired or IWO could
adversely affect the combined companys business. In addition, Sprint PCSs level of control and influence over us would make it difficult for us to sell our business to anyone other than Sprint PCS.



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In the future, we may approach Sprint PCS and seek to modify our management agreements, the consent and
agreement and our other agreements with Sprint PCS and take other actions consistent with such objective, including formally bringing certain claims or proceedings under such arrangements that we believe we may have against Sprint PCS. We have not
determined whether we will approach Sprint PCS or bring such claims or proceedings or take such other actions. In the event we do, we can provide no assurance that any such modifications will be made or that, if any such claims are brought or other
such actions taken, they will be resolved in our favor.



If
Sprint PCS decides to terminate its contracts with national retailers to whom we sell our products, our revenues would be materially and adversely impacted.



We rely on Sprint PCS to negotiate contracts with national retailers such as Best Buy and RadioShack to whom we sell our product. We are not permitted
under our agreements with Sprint PCS to enter into contracts with those retailers directly unless Sprint allows us to. Our sales to national retailers who have contracted with Sprint PCS account for almost 30% of our total sales. If Sprint PCS
decides to terminate its contracts with such vendors and refuses to allow us to deal with them directly, our revenues would be materially adversely affected.



Sprints reintegration of its PCS wireless business into its wireline operations could disrupt the services it provides to us.



Sprint has announced that it is reintegrating its PCS wireless business into
its wireline operations and will realign its internal resources. Instead of aligning its resources according to business segments, Sprint will focus on two distinct consumer typesbusinesses and individuals. The elimination of a separate
division within Sprint that is focused specifically on PCS services could result in a disruption in the services Sprint provides to us, which could adversely affect our subscribers and lead to increased churn.



Our dependence on Sprint PCS may adversely affect our ability to predict
our results of operations.



Our dependence on Sprint PCS
injects a great degree of uncertainty into our business and financial planning. Unanticipated expenses and reductions in revenue have had and, if they occur in the future, will have a negative impact on our liquidity and make it more difficult to
predict with reliability our future performance. Inaccuracies in data provided by Sprint PCS could understate our expenses or overstate our revenues, result in out-of-period adjustments or lead us to make bad business decisions that may materially
adversely affect our financial results. A significant portion of cost of service and roaming in our financial statements relates to charges from Sprint PCS. In addition, because Sprint PCS provides billing and collection services for us, it collects
cash from our subscribers on our behalf and remits that cash to us. As a result, we rely on Sprint PCS to provide accurate, timely and sufficient data and information to properly record our revenues, expenses and accounts receivable that underlie a
substantial portion of our periodic financial statements and other financial disclosures.



We and Sprint PCS have disputes concerning billing and other errors or inaccuracies. As of December 31, 2003, we and IWO had disputed approximately $19.1 million and $9.3 million, respectively, of charges from Sprint
PCS. If we are required in the future to make additional adjustments or charges as a result of errors or inaccuracies in data provided to us by Sprint PCS, such adjustments or charges may have a material adverse effect on our financial results in
the period that the adjustments or charges are made, on our ability to satisfy covenants contained in our credit facilities, and our ability to make fully informed business decisions.



The inability of Sprint PCS to maintain high quality back office services or our inability to use Sprint PCSs back
office services and third party vendors back office systems could lead to customer dissatisfaction, increase the loss of subscribers or otherwise increase our costs or adversely affect our businesses.



We rely on Sprint PCSs internal support systems, including customer
care, billing and other back office support. Our operations could be disrupted if Sprint PCS is unable to maintain and expand its internal support systems in a high quality manner, or to efficiently outsource those services and systems through third
party



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vendors. We expect the rapid expansion of Sprint PCSs business and the consolidation of back office services by Sprint PCS to continue to pose a
significant challenge to its internal support systems. Additionally, Sprint PCS has relied on third party vendors for a significant number of important functions and components of its internal support systems and may continue to rely on these
vendors in the future. Our operating subsidiaries depend on Sprint PCSs willingness to offer and provide back office services effectively and at competitive costs. Our agreements with Sprint PCS provide that, upon nine months prior
written notice, Sprint PCS may elect to terminate any of these services. The inability of Sprint PCS to maintain high quality back office services, or provide us with adequate notification of our inability to continue to provide those services or
our inability to use Sprint PCSs back office services and third party vendors back office systems could lead to customer dissatisfaction, increase the loss of subscribers or otherwise disrupt our business and increase our costs.
Additionally, we are dependent on Sprint PCS to assist us in transferring our back office services from Sprint PCS to a third party if we choose to do that, and any failure by Sprint PCS to cooperate in this effort, such as by making a transfer cost
prohibitive, could have a similar adverse effect on us.



We
rely on Sprint PCS for providing timely and accurate information to allow us to meet our financial reporting obligations. If material internal control weaknesses exist at Sprint PCS, we may not be able to provide timely and accurate information.



Inaccuracies in data provided by Sprint PCS could
understate our expenses or overstate our revenues, result in out-of-period adjustments or lead us to make bad business decisions that may materially adversely affect our financial results.



A significant portion of Cost of Service expenses and
Roaming revenues in our financial statements relates to charges from Sprint PCS. In addition, because Sprint PCS provides billing and collection services for us, it collects cash from our subscribers on our behalf and remits that cash to
us. As a result, we rely on Sprint PCS to provide accurate, timely and sufficient data and information to properly record our revenues, expenses and accounts receivables that underlie a substantial portion of our periodic financial statements and
other financial disclosures.



We and Sprint PCS have discovered
billing and other errors or inaccuracies that could be material to us. We have disputed invoices that Sprint PCS has sent us in the amount of $19.1 million for US Unwired and $9.3 million for IWO as of December 31, 2003. If we are required in the
future to make additional adjustments or charges as a result of errors or inaccuracies in data provided to us by Sprint PCS, such adjustments or charges may have a material adverse affect on our financial results in the period that the adjustments
or charges are made, on our ability to satisfy covenants contained in our credit facility, and our ability to make fully informed business decisions.



Changes in Sprint PCS products and services may reduce customer additions and may be otherwise economically adverse.



The competitiveness and effective promotion of Sprint PCS products and
services are key factors in our ability to attract and retain subscribers. For example, under the Sprint PCS service plans, subscribers who do not meet certain credit criteria can nevertheless select any plan offered subject to an account-spending
limit, referred to as ASL, to control credit exposure. Account spending limits range from $125 to $200 depending on the credit quality of the customer. Prior to May 2001, all of these subscribers were required to make a deposit ranging from $125 to
$250 that could be credited against future billings. In May 2001, a new Sprint PCS program, called NDASL for no deposit account spending limit, eliminated the deposit requirement on certain, but not all, credit classes. A significant
amount of our new customer additions occurred in 2002 under the NDASL program. Sprint PCS has replaced the NDASL program with the Clear Pay Program. The Clear Pay Program is substantially similar to the NDASL program but with an
increased emphasis on payment of outstanding amounts. Under the Clear Pay Program, subscribers who do not meet certain credit criteria can select any plan offered, subject to an account-spending limit.



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The NDASL program had the effect of increasing churn and bad debt expense and, though better than the
NDASL program, the Clear Pay Program still caused an unacceptable rate of churn. Sprint PCS has the right to end or materially change the terms of the Clear Pay Program. If Sprint PCS chooses to eliminate the Clear Pay Program or alter its features,
the growth rate we expect to achieve may decrease. Our operating subsidiaries requested and received, effective February 24, 2002, the ability to reinstate deposits in their territories for subscribers with poor or inadequate payment histories. We
believe that reinstatement of the deposit has reduced the number of potential new subscribers in these markets. While deposits for Clear Pay customers provide us with protection against bad debt expense for sub-prime customers, it has and may
continue to deter some people with sub-prime credit from becoming subscribers. As a result, our gross additions have declined and may continue to do so, which may further result in lower cash flows and impair our ability to service our debt. As of
December 31, 2003, approximately 30% of our subscribers had a credit rating placing them in the sub-prime category.



Sprint PCS may elect to offer additional programs that may attract high credit risk subscribers. Sprint PCS may not offer relief in any of such programs.



If Sprint PCS does not complete the construction of its
nationwide PCS network, our operating subsidiaries may not be able to attract and retain subscribers.



Sprint PCS and its affiliates currently intend to cover a significant portion of the population of the United States, Puerto Rico and the U.S. Virgin
Islands by creating a nationwide PCS network through Sprint PCSs own construction efforts and those of its network partners like LA Unwired and IWO. Sprint PCS and its affiliates are still constructing the nationwide network and do not yet
offer PCS services, either on Sprint PCSs own network or through its roaming agreements, everywhere in the United States.



If one of LA Unwireds or IWOs subscribers travels in an area where a Sprint PCS or compatible system is not yet operational, the customer
would not be able to make a call on that areas system unless he or she has a telephone handset that can make calls on both systems. Generally, these handsets are more costly. Moreover, the Sprint PCS network does not allow for calls to be
transferred without interruption between the Sprint PCS network and another wireless network. This means that a customer must end a call in progress and initiate a new call when entering an area not served by the Sprint PCS network. The quality of
the service provided by another network may not be equal to that of the Sprint PCS network, and LA Unwireds or IWOs subscribers may not be able to use some of the advanced features of its network. This could result in customer
dissatisfaction and loss of subscribers.



Sprint PCS has
entered into management agreements similar to LA Unwireds and IWOs with companies in other markets under its nationwide PCS build-out strategy. LA Unwireds and IWOs results of operations are dependent on Sprint PCSs
national network and, to a lesser extent, on the networks of Sprint PCSs other network partners. Sprint PCSs network may not provide nationwide coverage to the same extent as its competitors, which could adversely affect LA
Unwireds and IWOs ability to attract and retain subscribers.



If Sprint PCS does not succeed, or if LA Unwired or IWO does not maintain a good relationship with Sprint PCS, LA Unwireds or IWOs business may not succeed.



If Sprint PCS has a significant disruption to its business plan or network,
fails to operate its business in an efficient manner, or suffers a weakening of its brand name, LA Unwireds and IWOs operations and profitability would likely be impaired. Sprint PCS currently intends to cover a significant portion of
the population of the United States, Puerto Rico and the U.S. Virgin Islands by creating a nationwide PCS network through its own construction efforts and those of its network partners. Sprint PCS is still constructing its nationwide network and
does not offer PCS services, either on its own network or through its roaming agreements, in every city in the United States. Sprint PCSs network may not provide nationwide coverage to the same extent as its competitors, which would adversely
affect our ability to attract and retain customers.



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If Sprint PCS should have significant financial problems, including bankruptcy, our PCS business would
suffer material adverse consequences that could include termination or revision of our Sprint PCS agreements.



LA Unwired and IWO use their relationships with Sprint PCS to obtain, at favorable prices, handsets and the equipment for the construction or expansion
and operation of their networks. Any disruption in their relationships with Sprint PCS could make it much more difficult for them to obtain this equipment.



On July 11, 2003, we sued Sprint and Sprint PCS for violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty and
fraud. On September 25, 2003, we filed an amended complaint to include contractual claims. On October 20, 2003, Sprint and Sprint PCS answered the suit and filed a counterclaim against us for approximately $13.3 million related primarily to
contractual disputes. They also asked that our suit be partially dismissed. On October 21, 2003, Sprint filed a partial motion for judgment and asked that the court disregard our request for a jury trial. On February 3, 2004, the court denied
Sprints and Sprint PCSs motion for judgment and their motion to strike our request for a jury trial. Our disputes with Sprint PCS, such as our lawsuit against Sprint and Sprint PCS and their lawsuit against us, could cause our
relationship with Sprint PCS to further deteriorate, which could in turn adversely affect our business



If Sprint PCS or other Sprint PCS network partners have financial difficulties, the Sprint PCS network could be disrupted.



Sprint PCSs national network is a combination of networks. The large
metropolitan areas are owned and operated by Sprint PCS, and the areas in between them are owned and operated by Sprint PCS network partners, all of which are independent companies like we are. We believe that most, if not all, of these companies
have incurred substantial debt to pay the large cost of building out their networks. Some of these companies have experienced financial difficulties, and if this continues, the Sprint PCS network could be disrupted in those companies
territories, which would adversely affect our ability to attract and retain customers.



If other network partners experience financial difficulties, the Sprint PCS network could be disrupted in the territories of those partners. If the Sprint PCS agreements of those partners are like ours, Sprint PCS
would have the right to step in and operate the affected territory. Of course this right could be delayed or hindered by legal proceedings, including any bankruptcy proceeding relating to the affected network partner. Sprint PCS network partners
iPCS, Inc. and Horizon have filed for bankruptcy, and other network partners, including IWO, may follow. The impact of these developments on the Sprint PCS network, on our funding and our relationship with Sprint PCS, and on our travel revenue from
subscribers roaming in iPCS markets may be materially adverse.



Material disruptions in the Sprint PCS network would have a material adverse effect on our ability to attract and retain subscribers.



Certain provisions of the Sprint PCS agreements may diminish the value of US Unwired common stock and other securities and restrict the sale of our
business.



Under some circumstances and without further
stockholder approval, Sprint PCS may purchase LA Unwireds or IWOs operating assets at a discount. In addition, Sprint PCS must approve any change of control of the ownership of LA Unwired or IWO and must consent to any assignment of LA
Unwireds or IWOs Sprint PCS agreements.



Sprint PCS
also has a right of first refusal if LA Unwired or IWO decides to sell its operating assets to a third party. LA Unwired and IWO also are subject to a number of restrictions on the transfer of their businesses, including a prohibition on the sale of
LA Unwired or IWO or their operating assets to competitors of Sprint or Sprint PCS. These restrictions and other restrictions contained in the Sprint PCS agreements could adversely affect the value of US Unwired common stock and other securities,
may limit our ability to sell LA Unwireds and IWOs business, may reduce the value a buyer would be willing to pay for LA Unwireds or IWOs business and may reduce LA Unwireds or IWOs or the combined companys
entire business value.



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LA Unwired or IWO may have difficulty in obtaining an adequate supply of certain handsets from Sprint
PCS, which could adversely affect LA Unwireds or IWOs results of operations.



LA Unwired and IWO depend on our and their relationships with Sprint PCS to obtain handsets at a competitive cost. Sprint PCS orders handsets from various manufacturers. LA Unwired or IWO could have difficulty
obtaining specific types of handsets at a competitive cost and in a timely manner if:



| |  | Sprint PCS does not adequately project the need for handsets for itself, its Sprint PCS network partners and its other third party distribution channels, particularly in transition
to new technologies such as 3G;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sprint PCS gives preference to other distribution channels;
| | - | -----------------------------------------------------------



| |  | LA Unwired or IWO does not adequately project our need for handsets;
| | - | --------------------------------------------------------------------



| |  | Sprint PCS modifies its handset logistics and delivery plan in a manner that restricts or delays LA Unwireds or IWOs access to handsets; or
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | there is an adverse development in the relationship between Sprint PCS and its suppliers or vendors.
| | - | ----------------------------------------------------------------------------------------------------



The occurrence of any of the foregoing could disrupt LA Unwireds or IWOs customer service and/or result in a
decrease in LA Unwireds or IWOs subscribers, which could adversely affect its results of operations.



Non-renewal or revocation by the FCC of LA Unwireds licenses or the Sprint PCS licenses LA Unwired or IWO uses would significantly harm the
affected companys business.



PCS licenses are subject
to renewal and revocation by the FCC. LA Unwireds and Sprint PCSs licenses in LA Unwireds and IWOs territories will begin to expire in 2005 but may be renewed for additional ten-year terms. There may be opposition to renewal
of these licenses upon their expiration, and the licenses may not be renewed. The FCC has adopted specific standards to apply to PCS license renewals. Any failure by Sprint PCS, LA Unwired or IWO to comply with these standards could cause revocation
or forfeiture of the licenses for its territories. If any of the licenses of Sprint PCS that our operating subsidiaries are using should be lost, the affected subsidiary would be severely restricted in its ability to conduct its business. If we were
to lose any of the licenses we own, we could replace it with a Sprint PCS license in the affected territory, but at a greater cost to us than the use of our own license.



If Sprint PCS does not maintain control over its licensed spectrum, the Sprint PCS agreements may be terminated, which
would result in LA Unwireds and IWOs inability to provide PCS service.



The FCC requires that license holders like Sprint PCS and LA Unwired maintain control of their licensed spectrum and not delegate control to third-party operators or managers. Although the Sprint PCS agreements with
LA Unwired and IWO reflect an arrangement that the parties believe meets the FCC requirements for licensee control of licensed spectrum, we cannot assure you that the FCC will agree. If the FCC were to determine that the Sprint PCS agreements need
to be modified to increase the level of licensee control, LA Unwired and IWO have agreed with Sprint PCS to use best efforts to modify the Sprint PCS agreements to comply with applicable law. If LA Unwired and IWO cannot agree with Sprint PCS to
modify the Sprint PCS agreements, the agreements may be terminated. If the Sprint PCS agreements are terminated, LA Unwired and IWO would no longer be a part of the Sprint PCS network and the combined company would be severely restricted in its
ability to conduct business.



We have limited rights if
Sprint PCS fails to perform its obligations to our operating subsidiaries under their agreements with Sprint PCS. Should that occur, the consequences to us would be severe.



If Sprint PCS fails to perform its obligations to our operating subsidiaries, the consequences to us would be severe. Our
operating subsidiary could terminate its Sprint PCS agreements, but in that case it may have to discontinue its PCS business or to conduct it on a reduced scale. It would not be permitted to offer Sprint PCS products and services. We would in these
events suffer material adverse consequences to our results of



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operations and financial condition. The only remedy of our operating subsidiary would be to require Sprint PCS either to purchase its operating assets at a
price that would be unfavorable to us, or to assign to our operating subsidiary limited amounts of Sprint PCSs licensed spectrum for a price equal to the greater of 10% of the business value of our operating subsidiary or Sprint PCSs
original cost for the spectrum plus any costs incurred in relocating microwave radio systems.



Sprint PCS has notified us of charges and fees that it intends to pass on to us. We did not anticipate these charges and fees when we formulated our business plan. We believe these charges and fees are material,
and if Sprint PCS is entitled to collect them, they could materially and adversely affect out results of operations and financial condition.



Sprint PCS has presented us with a number of charges and fees that we did not expect when we formulated our business plan, including:



| |  | New development costs and fees to upgrade Sprint PCSs systems to cover new third generation technology services, such as one times radio transmission technology or 1XRTT,
offered to our subscribers. In addition, Sprint PCS has begun billing us for back office services related to new technology that we believe are provided for under our existing arrangements.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Fees for services that Sprint PCS provides on our behalf, such as voice mail, operator services, second generation wireless web services, text messaging and voice command dialing,
and fees for the information technology that supports Sprint PCS services such as these. We believe these charges and fees are already included in our management fee.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Fees for the maintenance of switches in the Sprint PCS network that we own. We have disputed the manner in which Sprint PCS allocates those fees among its affiliates and Sprint PCS.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Sprint PCS invoked certain dispute resolution
provisions of our agreements with respect to several ongoing disputes between our companies. This process required senior management officials of each company to attempt to resolve the disputes, and if a dispute was not resolved, the parties were
free to proceed with litigation or, in certain specified cases, to arbitration. We also invoked certain dispute resolution provisions under the agreements.



The disputes were not resolved pursuant to the dispute resolution process and therefore we filed a lawsuit against Sprint and Sprint PCS related to
disputes that had been subject to the resolution process and to other disputes among Sprint, Sprint PCS and us that are not within the scope of the dispute resolution process. Sprint and Sprint PCS have sued us for recovery of approximately $13
million of fees and other charges that we have disputed. The dispute resolution process under our agreements with Sprint PCS has been terminated pending the outcome of our lawsuits.



The total amount of charges and fees we have disputed at December 31, 2003 is $19.1 million for US Unwired and $9.3 million
for IWO. We believe that these charges and fees are material, and if Sprint PCS is entitled to collect them, they could have a material adverse effect on our results of operations or financial condition or both.



We rely on the use of the Sprint PCS brand name and logo to market our
services, and a loss of use of this brand and logo or a decrease in the attractiveness of this brand and logo to potential customers would significantly impair our ability to market our products.



The Sprint PCS brand and logo is highly recognizable. If we lose our rights
to use the Sprint PCS brand and logo under our trademark and service mark license agreements, we would lose the advantages associated with marketing efforts conducted by Sprint PCS. If we lose the rights to use this brand and logo or the value of
the brand and logo decreases, it is highly unlikely that customers would recognize our brand and we would have to spend significantly more money on advertising to create brand recognition.



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Our July 2003 lawsuit and our September amended complaint against Sprint and Sprint PCS may cause
Sprint PCS to retaliate against LA Unwired, which is also a plaintiff in the lawsuit, or IWO, which is not. The lawsuit and the countersuit filed by Sprint and Sprint PCS against us may also cause further deterioration in our relationship with
Sprint and Sprint PCS.



Our lawsuit against Sprint and
Sprint PCS alleges, among other things, that:



| |  | They have violated the Racketeer Influenced and Corrupt Organizations Act,
| | - | --------------------------------------------------------------------------



| |  | Their goal is to acquire us at a substantial discount by driving us to the brink of financial ruin,
| | - | ---------------------------------------------------------------------------------------------------



| |  | They have committed fraud and extortion against us,
| | - | ---------------------------------------------------



| |  | They have used certain of our assets without our consent and without properly compensating us,
| | - | ----------------------------------------------------------------------------------------------



| |  | They have improperly charged fees to us and misappropriated revenues, discounts and rebates that belong to us, and
| | - | ------------------------------------------------------------------------------------------------------------------



| |  | They have violated certain provisions of our Sprint PCS management agreement.
| | - | -----------------------------------------------------------------------------



The Sprint and Sprint PCS countersuit against us alleges that we have refused to pay Sprint certain fees and charges we are obligated to pay under our
agreements with Sprint, currently amounting to over $13 million.



We had a tense relationship with Sprint PCS before we and Sprint and Sprint PCS filed lawsuits. Our allegations may cause further deterioration in that relationship, with the adverse effects that are described above. Should Sprint and
Sprint PCS prevail in their claims, our liquidity could be further eroded.



If, despite our lawsuit, Sprint PCS succeeds in what we believe to be its plan to acquire us at a substantial discount, our stockholders and creditors would be adversely affected.



Risks Particular to the Combined Companys Industry



Overview of this subsection:



We face significant competition in our service areas from a number of
competitors. There are five other national operators that offer service in at least some portion of our service areas in addition to a number of local and regional carriers. Approximately 95% of the population has three or more different operators
offering mobile telephone service in the counties in which they live. The result is that prices of wireless services have dramatically dropped. Providers are offering larger bundles of minutes at lower prices and this has resulted in a decrease in
airtime revenue, which is the price a customer pays for using the service in excess of allotted minutes. In addition, other factors affecting our industry are changing rapidly. If we cannot effectively meet the challenges of these conditions, we
probably will not succeed. Activists are seeking new laws that would restrict use of telephones by drivers, our placement of the towers that carry our transmissions and disposal of wireless phones. Such laws could adversely impact our business.



Our operating subsidiaries business may suffer
because subscribers frequently disconnect their service in the PCS industry. The rate at which these disconnections occur, or churn, may be even higher in the future.



The PCS industry in general and Sprint PCS in particular have experienced a high rate of subscribers who disconnect their
service. This rate is referred to as churn. We experienced even higher churn in 2002 due in large part, we believe, to the NDASL program that Sprint PCS introduced in May 2001 and the Clear Pay program that replaced NDASL. These programs are
described under Risks Particular to Our Relationship with Sprint PCS. Although our churn declined in 2003, our future churn rate may be higher due to intense competition and general economic conditions, among other factors. Factors that
tend to contribute to higher churn include:



| |  | wireless portability, which allows subscribers to retain their PCS numbers while changing wireless carriers. Wireless portability was introduced in a significant portion of our
markets in November 2003 and will be available in all of our markets in May 2004.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | inability of subscribers to pay, which caused a significant percentage of our churn in 2002. We believe that a large portion of this churn is attributable to the NDASL and Clear Pay
Program, which resulted in subscriber accounts with greater than normal credit risks.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | our generous handset return policy, which makes it easier to cancel an account.
| | - | -------------------------------------------------------------------------------



| |  | intense competition in our industry.
| | - | ------------------------------------



| |  | performance and coverage of our networks.
| | - | -----------------------------------------



| |  | ineffective customer service.
| | - | -----------------------------



| |  | increase in prices.
| | - | -------------------



| |  | performance and reliability of handsets.
| | - | ----------------------------------------



| |  | changes in our products and services.
| | - | -------------------------------------



A high rate of PCS subscriber churn could harm the competitive position of our operating subsidiaries and their results of operations. We subsidize some
of the costs of handsets for our new subscribers, pay commissions for new accounts and incur expenses to advertise and maintain a distribution network. When we experience a high rate of churn, we may not receive sufficient revenue to offset these
costs. Sprint PCS may elect to offer additional programs that may attract high credit risk subscribers.



Sprint PCS and we face intense competition that may reduce its and our market share and harm its and our financial performance.



There is substantial competition in the telecommunications industry.
According to information it has filed with the SEC, Sprint PCS believes that the traditional dividing lines between long distance, local, wireless, and Internet services are increasingly becoming blurred. Through mergers and various service
integration strategies, major providers, including Sprint PCS, are striving to provide integrated solutions both within and across all geographical markets.



Sprint PCS expects competition to intensify as a result of the entrance of new competitors and the rapid development of new technologies, products, and
services. Sprint PCS cannot predict which of many possible future technologies, products, or services will be important to maintain its competitive position or what expenditures will be required to develop and provide these technologies, products or
services. Sprint PCSs ability to compete successfully will depend on marketing and on its ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in
consumer preferences, demographic trends, economic conditions, and discount pricing strategies by competitors. To the extent Sprint PCS does not keep pace with technological advances or fails to respond timely to changes in competitive factors in
its industry, it could lose market share or experience a decline in revenue and net income.



Each of the markets in which Sprint PCS competes is served by other wireless service providers, including cellular, enhanced specialized mobile radio, called ESMR, and PCS operators and resellers. A majority of
markets have five or more commercial mobile radio services or CMRS providers. Each of the top 50 metropolitan markets has at least two other PCS competitors in addition to one ESMR competitor and two cellular incumbents. Some of these competitors
have been operating for a number of years and currently serve a substantial subscriber base. The FCC has eliminated its rule imposing limits on spectrum aggregation, but it continues to evaluate the competitive effects of CMRS spectrum aggregation
on a case-by-case basis. Competition may continue to increase to the extent that licenses are transferred from smaller stand-alone operators to larger, better capitalized, and more experienced wireless communications operators. These larger wireless
communications operators may be able to offer subscribers network features not offered by Sprint PCS. The actions of these larger wireless communications operators could negatively affect Sprint PCSs and our customer churn, ability to attract
new subscribers, average revenue per user, cost to acquire subscribers, and operating costs per customer.



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Sprint PCS relies on agreements with competitors to provide automatic roaming capability to Sprint PCS
subscribers in many of the areas of the United States not covered by the Sprint PCS network, which primarily serves metropolitan areas. Certain competitors may be able to offer coverage in areas not served by Sprint PCSs network or may be able
to offer roaming rates that are lower than those offered by Sprint PCS. Certain of Sprint PCSs competitors are seeking to reduce access to their networks through actions pending with the FCC. Moreover, analog wireless technology, called AMPS,
the dominant air interface for cellular systems on which PCS subscribers roam, is being phased out by many carriers and by 2007 cellular carriers will no longer be required to operate analog networks. If cellular operators cease to offer their AMPS
networks for roaming, some Sprint PCS subscribers may have difficulty roaming in certain markets.



Some wireless providers, some of which have an infrastructure in place and have been operating for a number of years, have been upgrading their systems
and provide expanded and digital services to compete with Sprint PCSs services. Some of these wireless providers require their subscribers to enter into long-term contracts, which may make it more difficult for Sprint PCS to attract
subscribers away from these wireless providers.



Significant
competition in the wireless communications services has resulted in LA Unwired, IWO and their competitors offering lower prices and may result in LA Unwireds and IWOs competitors offering new or better products and services. These
factors could prevent LA Unwired or IWO from operating profitably or reduce their profitability.



Competition in the wireless communications industry is intense. Our major competitors include such wireless companies as Verizon, T-Mobile, Cingular,
AT&T Wireless, and Nextel. LA Unwireds and IWOs ability to compete will depend, in part, on their ability to anticipate and respond to various competitive factors affecting the telecommunications industry, including new services that
may be introduced, changes in consumer preferences, demographic trends, economic conditions and discount pricing strategies by our competitors. We anticipate that competition will continue to cause the market prices for two-way wireless products and
services to decline in the future. In order to attract new subscribers, we have offered steeper discounts on handsets and more generous service plans that may include more minutes and other enhancements such as complimentary periods of free data
usage. Offering larger bundles of minutes at lower prices has resulted in a decrease in airtime revenue, which is the price a customer pays for using the service in excess of allotted minutes.



Our operating subsidiaries dependence on Sprint PCS to develop
competitive products and services and the requirement that they obtain Sprint PCSs consent to sell local pricing plans and equipment that Sprint PCS has not approved may limit their ability to keep pace with competitors on the introduction of
new products, services and equipment. Many of these competitors are larger than our operating subsidiaries individually or combined, may have entered the wireless communications services market before our operating subsidiaries did, possess greater
resources and more extensive coverage areas, may offer lower rates, and may market other services, such as landline telephone service, cable television and Internet access, with their wireless communications services. In addition, we may be at a
competitive disadvantage since we may have more debt than some of our competitors.



Furthermore, there has been a recent trend in the wireless communications industry towards consolidation of wireless service providers through joint ventures, reorganizations and acquisitions. We expect this
consolidation to lead to larger competitors over time. We may be unable to compete successfully with larger companies that have substantially greater resources or that offer more services than LA Unwired and IWO do.



We believe that our ability to compete effectively with other PCS providers
will depend on:



| |  | the continued expansion and improvement of the Spring PCS network, customer care system and telephone handset options.
| | - | ----------------------------------------------------------------------------------------------------------------------



| |  | the continued success of CDMA technology in providing better call quality and clarity than other systems.
| | - | ---------------------------------------------------------------------------------------------------------



| |  | our competitive pricing with various options suiting individual subscribers calling needs.
| | - | -------------------------------------------------------------------------------------------



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Alternative technologies and current uncertainties in the wireless market may reduce demand for PCS.



PCS providers in the United States use one of three
technological standards. Even though the three standards share basic characteristics, they are not compatible or interchangeable with each other. Our operating subsidiaries and Sprint PCS use the standard known as CDMA. If another standard becomes
preferred in the industry, our operating subsidiaries may be at a competitive disadvantage. If Sprint PCS changes its standard, our operating subsidiaries will need to change theirs as well, which will be costly and time consuming. If our operating
subsidiaries cannot change the standard, they may not be able to compete with other systems.



The wireless communications industry is experiencing significant technological change, as evidenced by the increasing pace of digital upgrades in existing analog wireless systems, satellite coverage, evolving industry
standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements and changes in end-user requirements and preferences. Technological advances and industry changes could
cause the technology used on our operating subsidiaries networks to become obsolete. Sprint PCS may not be able to respond to such changes and implement new technology on a timely basis, or at an acceptable cost.



If Sprint PCS is unable to keep pace with these technological changes or
changes in the wireless communications market based on industry consolidation, the effects of new regulations flowing from the Telecommunications Act of 1996, the uncertainty of future government regulation, the technology used on our operating
subsidiaries networks, or their business strategy, may become obsolete. In addition, some wireless carriers have implemented an upgrade to their digital systems known as one times radio transmission technology, or 1XRTT, which is also broadly
known as third generation, or 3G, technology throughout the industry. Some carriers are upgrading their digital systems to implement what is known as 1X EvDO, a 3G data technology that is a generation above 1XRTT. 3G technology promises high-speed,
always-on Internet connectivity and high-quality video and audio. We cannot assure you that our operating subsidiaries or Sprint PCS can implement 3G technology successfully or on a cost-effective basis.



Regulation by government and taxing agencies may increase our operating
subsidiaries costs of providing service or require them to change their services, either of which could impair the combined companys financial performance.



Our operations and the operations of Sprint PCS are subject to varying degrees of regulation by the FCC, the Federal Trade
Commission, the Federal Aviation Administration, the Environmental Protection Agency, the Occupational Safety and Health Administration and state and local regulatory agencies and legislative bodies. Adverse decisions or regulations of these
regulatory bodies could negatively impact operations and costs of doing business. For example, changes in tax laws or the interpretation of existing tax laws by state and local authorities could subject us to increased income, sales, gross receipts
or other tax costs or require LA Unwired or IWO to alter the structure of its current relationship with Sprint PCS. In addition:



| |  | The loss of any of LA Unwireds FCC licenses, or any of Sprint PCSs FCC licenses in LA Unwireds or IWOs service area, may impair the affected companys
business and operating results.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The FCC may revoke or refuse to renew any of LA Unwireds or Sprint PCSs PCS licenses at any time for cause. Cause could be a failure to comply with terms of the licenses
or applicable FCC rules. We cannot ensure that LA Unwireds and Sprint PCSs PCS licenses will not be revoked or will be renewed when they expire.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The FCC regulates LA Unwireds and IWOs relationship with Sprint PCS under each companys Sprint PCS agreements.
| | - | -----------------------------------------------------------------------------------------------------------------



| |  | We may need to acquire additional licenses, which will require approval of regulatory authorities. These regulatory authorities may not grant approval in a timely manner, if at all.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | All PCS licenses, including LA Unwireds own licenses and Sprint PCSs licenses, are subject to the FCCs build-out regulations. These regulations require license
holders to offer specified levels of service to the population in their service areas within set time periods. Even though our operating subsidiaries have developed a build-out plan that meets these requirements, they may be unable to meet their
build-out schedules. If LA Unwired or IWO or Sprint PCS does not meet these requirements, the FCC could take back the portions of the service area that are not being served, impose fines, or even revoke the related licenses.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The FCC has allocated additional spectrum that can be used to compete with us and may continue to offer additional spectrum for new carriers, or release unlicensed spectrum to the
public, which could increase the competition our operating subsidiaries face.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The FCC imposes additional requirements on holders of PCS licenses reserved for small businesses. These licenses are called C-block and F-block licenses. LA Unwired holds F-block
licenses and must meet special requirements to hold them. While we believe LA Unwired has met all such requirements, if it does not meet these requirements, the FCC could fine it, revoke its licenses or require it to restructure its ownership.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The FCC has mandated that wireless carriers implement portability for wireless subscribers. This permits users of wireless services the opportunity to retain the same phone number
as they change local wireless carriers. Prior to implementation, subscribers that changed carriers were also required to change phone numbers. We believe that this will make it easier for subscribers to switch wireless carriers resulting in
increased subscriber churn and increased cost associated with retaining our overall subscriber base. The manner in which wireline carriers implement this program may also adversely affect us. In preparation of wireless local number portability
BellSouth has implemented intralata dialing pattern changes for wireless providers who use reverse toll billing. This change will now require wireline customers to dial 1+ to reach wireless customers that are not within the local calling area
regardless of their reverse toll billing status. We believe that this process will be confusing to our subscribers and is likely result in a higher level of subscriber churn.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Additionally, some rural wireline companies have requested from state public utility commissions an extension of time to comply with number portability requirements which, if
granted, could delay our ability to attract wireline customers who wish to transfer their numbers to us.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Although the Telecommunications Act of 1934, as amended, preempts state and local regulation of market entry or the rates charged by a CMRS provider, states are permitted to
regulate other terms and conditions of mobile service, such as billing practices and other consumer-related issues. Several states have commenced proceedings to implement consumer protection and service quality regulations that would
impose substantial incremental costs across the industry. The location and construction of radio towers and antennas are also subject to a variety of state and local zoning, land use and regulatory requirements. The time needed to obtain zoning
approvals for the construction of additional wireless facilities varies from market to market and state to state.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The introduction of wireless number portability is likely to lead to an increase in subscriber churn.



The FCC has mandated that wireless carriers implement phone number
portability for wireless subscribers that affected a significant portion of our markets starting in November 2003. This permits users of wireless services the opportunity to retain the same phone number when they change local wireless carriers.
Prior to implementation, subscribers who changed carriers were also required to change phone numbers. We believe that portability will make it easier for subscribers to switch wireless carriers, resulting in increased subscriber churn, increased
costs associated with retaining our overall subscriber base and lower revenues. The manner in which wireless carriers implement this program may also adversely affect us.



In preparation for wireless local number portability BellSouth has implemented dialing pattern changes for wireless
providers who use reverse toll billing. This change will now require wireline carriers to dial 1+ to reach



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wireless customers that are not within the local calling area regardless of their reverse toll billing status. We believe that this process is very confusing
to our subscribers and is likely to result in a higher level of subscriber churn.



An increase in the amount of our foreign ownership could cause us to lose our FCC licenses or restructure our ownership.



Ownership of US Unwired capital stock by non-U.S. citizens is subject to limitations under the Communications Act of 1934 and FCC regulations. In the
absence of FCC consent, not more than 25% of US Unwired capital stock may be owned or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives, or by a foreign corporation. We believe the level of foreign
ownership in US Unwired common stock to be approximately 25%. Because US Unwired common stock is publicly traded, the level of foreign ownership may fluctuate.



The FCC has granted us the authority to permit US Unwireds foreign ownership to exceed 25%, subject to specific limitations. If US Unwired
exceeds the permitted levels or does not comply with the applicable limitations, it may have to restructure its ownership to come within the permitted ownership limit or else we may lose our FCC licenses. In that case, the articles of incorporation
of US Unwired permit it to force foreign shareholders to sell their shares to US Unwired, whether they wish to do so or not, so as to reduce the foreign ownership of US Unwired to slightly lower than permitted levels.



Our future prospects are uncertain because the future prospects of the PCS
industry are uncertain.



PCS systems have not operated in
the United States for very long, and we cannot assure you that the operation of these systems in our markets will become profitable. In addition, we cannot estimate how much demand there will be for PCS in our markets or how much competitive pricing
pressure there will be. As a result, the future prospects of the PCS industry, including LA Unwireds and IWOs prospects, remain uncertain. The future demand for wireless communications services in general is uncertain. We also cannot
predict what new challenges we may face in this changing industry environment. If we cannot react promptly and effectively to these challenges, our business could be materially and adversely affected.



Use of hand-held phones may pose health risks, which could result in the
reduced use of wireless services or liability for personal injury claims.



Some media reports and some studies have suggested that certain radio frequency emissions from wireless handsets may be linked to various health problems, including cancer, and may interfere with various electronic
medical devices, including hearing aids and pacemakers. Concerns over radio frequency emissions may discourage use of wireless handsets or expose the combined company to potential litigation. Any resulting decrease in demand for wireless services,
or costs of litigation and damage awards, could impair the combined companys ability to achieve and sustain profitability.



Our operating subsidiaries may be subject to potential litigation relating to the use of wireless phones while driving. In addition, several state and
local governments are considering, or have adopted, legislation that restricts the use of wireless handsets by drivers.



Some studies have indicated that some aspects of using wireless phones while driving may impair drivers attention in certain circumstances, making
accidents more likely. These concerns could lead to potential litigation relating to accidents, deaths or serious bodily injuries, or to new restrictions or regulations on wireless phone use, any of which also could have material adverse effects on
our results of operations.



A number of U.S. state and local
governments are considering or have enacted legislation that would restrict or prohibit the use of a wireless handset while driving a vehicle or, alternatively, require the use of a hands-free telephone. Legislation of this sort, if continued to be
enacted, would require wireless service providers to provide



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hands-free enhanced services such as voice activated dialing and hands-free speaker phones and headsets so that they can keep generating revenue from their
subscribers, who make many of their calls while on the road. If we are unable to provide hands-free services and products to our subscribers in a timely and adequate fashion, the volume of wireless phone usage would likely decrease, and our ability
to generate revenues would suffer. Moreover, studies have found that driver distraction due to cell phone use can occur regardless of whether hand-held or hands-free cell phones are used, and that cell phone conversations create much higher levels
of driver distractions than listening to the radio or even driving under the influence of alcohol. If legislation is adopted in our service areas banning all cell phone use while driving, our revenues would be even more significantly impacted.



Environmental groups have asked the FCC to halt the
building of towers used for transmission of wireless signals.



Environmental groups claim that towers used for transmission of wireless signals kill migratory birds. They have petitioned the FCC to study how many birds die from flying into towers, and have asked the FCC to halt tower construction until
the study is completed. In February 2003, environmental groups filed suit against the FCC to force it to protect migratory birds from communication towers. On May 1, 2003, the FCC announced that it would launch a study of this issue but the lawsuit
has been dismissed. If we cannot build new towers, we may not be able to complete or expand our networks.



Some environmental groups believe that the disposal of wireless phones could pose a threat to public health. If new regulations governing wireless
phone disposal are passed, or if our industry does not develop an efficient disposal or recycling program, our operating costs could increase.



An environmental research group has argued that the disposal of used wireless phones could pose a threat to public health because the phones contain small
amounts of toxic chemicals that may leak into the soil and water supply when they are deposited in landfills. If new and burdensome regulations governing the disposal of wireless phones are passed in the states covered by our network, or if the PCS
industry cannot develop a cost-effective disposal or recycling program for wireless phones, our operating costs could increase.



General Risks Currently Affecting our Business



Overview of this subsection



Our business has recently been challenged by a number of adverse factors. IWO has violated covenants of its senior bank credit facility and has failed to
make required payments of interest in 2003 amounting to approximately $9.5 million. As a result, IWOs lenders have denied IWO access to remaining credit under this facility. If our assumptions in the US Unwired business model are impacted by
adverse factors as discussed in Note 2 below, it is likely that US Unwireds business will suffer to the point that US Unwired will not meet some of the amended covenants in the US Unwired bank debt agreements. If that occurs and the US Unwired
banks do not agree to again revise the US Unwired amended covenants, they would be able to declare a default under the US Unwired bank debt and to refuse to advance funds to us.



Our business is being adversely affected by our highly leveraged capital structure, increased competition, slower
subscriber growth than we anticipated, uncertainties regarding churn due to the introduction of wireless number portability, our relationship with Sprint and Sprint PCS, general economic conditions and other factors. If these factors continue, it is
likely that we will not have enough cash to operate our business. IWO is already in default of its senior bank credit facility due to covenant violations and missed interest payments. The IWO bank lenders could demand payment of what we owe them,
and they have already denied IWO access to the remaining available funds under the facility. If payment were demanded, we would also be in default under the IWO senior notes and the related indenture. US Unwireds liquidity status and ability
to comply with its amended senior bank credit facility financial covenants are dependent upon a number of factors. Should actual results differ from the assumptions underlying our business model, US Unwireds liquidity position and its ability
to comply with



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the amended financial covenants could be adversely affected. It could be required to raise additional capital that may or may not be available on terms
acceptable to it, if at all. This could have a material adverse effect on US Unwireds ability to achieve its intended business objectives. If we were unable to comply with our amended covenants, the banks could place us in default and demand
payment. If payment were demanded, we would also be in default under our senior notes and the related indenture and it is likely that we will not have enough cash to operate.



Our business has been adversely affected by the following factors:



| |  | Our highly leveraged capital structure.
| | - | ---------------------------------------



| |  | A highly competitive marketplace.
| | - | ---------------------------------



| |  | General economic conditions in our markets have not been good, further adversely affecting subscriber growth and churn.
| | - | -----------------------------------------------------------------------------------------------------------------------



| |  | Initiatives by Sprint PCS including the introduction of NDASL, the charging of higher fees than we believe are contractually permitted, the forced migration to Sprint PCS back
office services, and other factors affecting our business relationship.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Our tense relationship with Sprint and Sprint PCS.
| | - | --------------------------------------------------



In addition, there are other factors that could contribute to a continuation of poor business conditions for us. These include:



| |  | Uncertainty whether our expected level of capital expenditures will be sufficient to support our networks.
| | - | ----------------------------------------------------------------------------------------------------------



| |  | Uncertainty about charges that Sprint PCS is seeking to impose on us, as described above.
| | - | -----------------------------------------------------------------------------------------



| |  | Uncertainly as to our future relationship with Sprint and Sprint PCS as a result of outstanding litigation.
| | - | -----------------------------------------------------------------------------------------------------------



As a result of our adverse business conditions, due to the above and other
factors, IWO has failed to meet some of the financial covenants with its banks and in 2003, it failed to make $9.5 million in interest payments on the IWO $240 million senior bank credit facility.



Loan covenants are promises that borrowers make either to do or not to do
specified things or not to allow specified things to happen. A failure to meet a loan covenant has three principal consequences. First, it permits the lender to refuse to advance additional borrowings. IWOs lenders have already taken this
action. IWO will not have sufficient cash to operate if it is unable to obtain the proceeds under its bank loan agreements or comparable amounts from alternative financing sources, and it is most unlikely that alternate financing will be available.
We believe that US Unwired will have sufficient cash to fund its operations, debt service and capital requirements in the next twelve months without additional borrowing, but, should the assumptions underlying our business model for US Unwired be
incorrect, it may need additional borrowing to fund those needs in 2004.



Second, failure to meet a loan covenant allows the lender to declare the loan to be in default and to insist on payment of all amounts due under the loan. US Unwired and IWO would not have sufficient cash to repay
these loans, and their failure to repay them, if repayment is demanded by the banks, would allow their note holders to declare a default under the indentures that govern the senior notes and to insist on payment of all amounts due under the senior
notes. If these things happen and we were unable to work out a debt restructuring with our banks and note holders on mutually acceptable terms, we likely would have no other alternative than to seek protection under bankruptcy laws.



Third, during any time that a default exists, even if the lenders do not
insist on payment, our debt would be classified as a current liability on our balance sheet and our outside auditors would place a going concern qualification on their opinion on our financial statements. In fact, we have already classified all of
IWOs debt as a current liability and our auditors have placed a going concern opinion on IWOs financial statements.



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We have updated the US Unwired business model to take into account its operating performance in 2003 and
the initiatives as discussed above, such as our limitation of capital expenditures, sale of non-core assets and personnel changes. Based upon existing assumptions underlying the business model, we believe that, over the next twelve months, US
Unwired will be able to comply with the financial covenants of its amended senior bank credit facility and have sufficient cash to fund its operations, debt service and capital requirements. US Unwireds funding status and ability to comply
with these amended financial covenants is dependent upon a number of factors influencing projections of earnings and operating cash flows. These factors include subscriber growth, average monthly revenue per user, customer churn and cost per gross
addition. Should actual results differ from the underlying business model assumptions, US Unwireds liquidity position and its ability to comply with the amended financial covenants could be adversely affected. We could be required to raise
additional capital that may or may not be available on terms acceptable to it, if at all. This could have a material adverse effect on its ability to achieve its intended business objectives.



We have been in discussions with the IWO banking group to arrive at an
acceptable restructuring to preserve IWOs liquidity, but have been unable to develop an acceptable plan. We anticipate seeking bankruptcy protection for IWO in the near future.



The economic downturn in the United States contributed to a general weakening of our business. If our business in
general, and our sales and churn in particular, do not improve, we may not have the financial and operational performance that we were expecting.



We have not achieved the number of new subscribers that we expected in our business plan. We attribute this to weak economic conditions, churn associated
with high credit risk subscribers and intense price competition. In addition, our primary customer base is individual consumers. The weak economy may have hurt the ability of our existing subscribers, who are primarily individual consumers, to pay
us on time, which may force us to terminate their service. Furthermore, there is also uncertainty as to the extent of customer demand as well as the extent to which airtime and monthly recurring charges may continue to decline. If all of the
foregoing events occur, our financial and operational performance may suffer.



A recession in the United States involving significantly lowered spending could continue to negatively affect our results of operations.



Our primary customer base is individual consumers and our accounts receivable represent unsecured credit. If the economic
downturn that the United States and our territories have recently experienced does not continue to improve and spending by individual consumers drops significantly, our business would continue to be negatively affected. Moreover, the recent upturn
in the national economy has not significantly resulted in improvements to our financial performance, and there is no assurance that it will ultimately do so.



Our allowance for doubtful accounts may not be sufficient to cover uncollectible accounts.



On an ongoing basis, we estimate the amount of customer receivables that we
will not be able to collect. This allows us to calculate the expected loss on our receivables for the period we are reporting. Our allowance for doubtful accounts may underestimate actual unpaid receivables for various reasons, including:



| |  | adverse changes in our churn rate exceeding our estimates;
| | - | ----------------------------------------------------------



| |  | adverse changes in the economy generally exceeding our expectations; or
| | - | -----------------------------------------------------------------------



| |  | unanticipated changes in Sprint PCSs products and services.
| | - | ------------------------------------------------------------



If our allowance for doubtful accounts is insufficient to cover losses on our receivables, our business, financial position or results of operations could
be materially adversely affected.



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Demand for some of Sprint PCSs communications products and services has been adversely affected
by the recent downturn in the United States economy as well as changes in the global economy.



Demand for some of Sprint PCSs communications products and services has been adversely affected by a downturn in the United States economy as well
as changes in the global economy. According to Sprint PCS, a number of its suppliers have recently experienced financial challenges. If these suppliers cannot meet their commitments, Sprint PCS states that it would have to use different vendors and
this could result in delays, interruptions, or additional expenses associated with the upgrade and expansion of Sprint PCSs networks and the offering of its products and services. If general economic conditions do not continue to improve, the
revenues, cash flow, and operating results of Sprint PCS could be adversely affected. Any of these developments could adversely affect our business, financial position or results of operations.



Our customers are using more minutes of use than they have in past.
Accommodating this additional call volume could cause our operating costs and capital expenditures to increase.



Our customers are increasingly expending more minutes of use. In order to accommodate this additional call volume from our existing customers as well as
to meet the demand created by new customers, we may be required to purchase additional equipment to increase our network capacity. This would cause our operating costs and the long term capital expenditures needed to maintain our network to
increase. Given our liquidity situation discussed above, there can be no assurance that we will have or will be able to acquire the funds needed to increase our network capacity.



Risks Related to Anti-Takeover Provisions



Overview of this subsection:



Our anti-takeover provisions may permit our board of directors to turn down a proposal that our stockholders would like us
to accept.



Anti-takeover provisions in US Unwireds
charter and by-laws will make it difficult for anyone to acquire US Unwired without approval of its board of directors (other than an acquisition of LA Unwired or IWO, or both, by Sprint PCS under the terms of our agreements with Sprint PCS that are
described above).



Prior to acquiring IWO, US Unwired had
little concern about being acquired against the will of its board of directors (other than an acquisition of LA Unwired or IWO, or both, by Sprint PCS under the terms of our agreements with Sprint PCS that are described above) because the voting
power of its founding family and their related interests, even if not completely united, could prevent such an acquisition of it. That voting power decreased to about 33% after the IWO acquisition as a result of that acquisition and the amendments
to US Unwireds articles of incorporation that converted its class B common stock, which had 10 votes per share, to class A common stock (later renamed common stock), which has one vote per share. Because of this, US Unwireds
board of directors has implemented additional anti-takeover provisions. These anti-takeover provisions, and others, including a poison pill that our board of directors may adopt hereafter, may discourage offers to acquire us and may
permit our board of directors to choose not to entertain offers to purchase us, even offers that are at a substantial premium to the market price of our stock. Our stockholders may therefore be deprived of opportunities to profit from a sale of
control.



Internet Website and Availability of Public Filings



Our Internet address is www.usunwired.com. We make
available free of charge on our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 as soon as reasonably practical after we electronically file such material with, or furnish such material to the SEC. We also include 16(a) reports of our directors and officers. Commencing on February 3, 2003 we made our SEC



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filings available via a direct link to our filings on the SEC website. Our reports may also be examined on the SECs website at www.sec.gov.
Prior to February 3, 2003 and during 2002, our filings could be accessed at the FreeEdgar website.



ITEM 2. Properties



We own an
11-story, 115,300 square foot office building in Lake Charles, Louisiana that is used as our corporate headquarters and lease 38,000 square feet of office space in Albany, New York that serves as a regional headquarters for our IWO operations.



We own property that houses our switching equipment in Albany,
New York and lease space for all of our other switching centers. We lease all of our other retail outlets, kiosk floor space and sales and operations offices. We operated 1,878 PCS cell sites at December 31, 2003, of which approximately 94% were
leased and 6% owned.



ITEM 3. Legal Proceedings



On
July 11, 2003, US Unwired and two of its subsidiaries, Louisiana Unwired, LLC and Texas Unwired (the Company), filed suit in the U.S. District Court for the Western District of Louisiana (U.S. District Court), against Sprint
Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom, Inc. (collectively, Sprint). The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty and fraud arising out of
Sprints conduct in its dealings with the plaintiff companies. It seeks treble actual damages in unspecified amounts and appointment of a receiver over property and assets controlled by Sprint in Louisiana. On September 25, 2003, the Company
filed an amended complaint to include contractual claims. On October 20, 2003, Sprint submitted their Answer, Defenses, and Counterclaim of Defendants seeking dismissal of US Unwireds First Amended Complaint and filing a counter-claim for
approximately $13.3 million related primarily to contractual disputes as discussed above. On October 21, 2003, Sprint filed a Defendants Partial Motion for Judgment on the Proceedings seeking partial dismissal of claims filed in the First
Amended Complaint. On October 21, 2003, Sprint filed Defendants Motion to Strike Plaintiffs Jury Demand from the First Amended Complaint. On February 3, 2004, the U.S. District Court denied in all respects Sprints request to
dismiss U.S. Unwireds lawsuit. US Unwired and Sprint have submitted to the District Court an agreed upon schedule to complete the discovery process by and anticipate a late-2004 trial by jury in the State of Louisiana.



We are from time to time involved in other litigation that we believe
ordinarily accompanies the communications business. We do not believe that any of our other pending or threatened litigation will have a material adverse effect on our business or financial situation.



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



None



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PART II



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



Our common stock was delisted from the Nasdaq National Market effective May 8, 2003 and is now quoted on the OTC Bulletin Board. Prior to that, our common
stock was traded on the Nasdaq National Market under the symbol UNWR since May 23, 2000 and prior to that date, there was no public market for our common stock. The following table sets forth, the periods indicated, the range of high and low sales
prices for our common stock as reported on the OTC Bulletin Board and Nasdaq:



|                             |  |                            |       |     |   |     
|---------------------------- |  | -------------------------- | ----- | --- | - | ----
|                             |  | Price Range ofCommon Stock
|                             |  | High                       |       | Low
|Year Ended December 31, 2003 |  |                            |       |     |   |     
|Fourth Quarter               |  | $                          | 1.15  |     | $ | 0.65
|Third Quarter                |  | $                          | 1.68  |     | $ | 0.36
|Second Quarter               |  | $                          | 0.65  |     | $ | 0.15
|First Quarter                |  | $                          | 0.55  |     | $ | 0.08
|                             |  |                           
|Year Ended December 31, 2002 |  |                            |       |     |   |     
|Fourth Quarter               |  | $                          | 1.46  |     | $ | 0.36
|Third Quarter                |  | $                          | 3.14  |     | $ | 0.63
|Second Quarter               |  | $                          | 7.20  |     | $ | 2.14
|First Quarter                |  | $                          | 11.10 |     | $ | 4.37



On January 29, 2004,
there were 374 holders of record of our common stock.



We have
not declared or paid any cash dividends on our common stock or any other of our securities. We do not expect to pay cash dividends on our capital stock in the foreseeable future. We currently intend to retain our future earnings, if any, to fund the
development and growth of our business. Our future decisions concerning the payment of dividends on our common stock will depend upon our results of operations, financial condition and capital expenditure plans, as well as such other factors as the
board of directors, in its sole discretion, may consider relevant. In addition, our existing indebtedness restricts, and we anticipate our future indebtedness may restrict, our ability to pay dividends.



|                                                            |  |                                                                                               |  |                                                                               |  |                                                                                                                                             
|----------------------------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|Equity Compensation Plan Information                       
|Plan Category                                               |  | (a) Number of securities to beissued upon exercise ofoutstanding options,warrants, and rights |  | (b) Weighted average exerciseprice of outstanding options,warrants and rights |  | (c ) Number of securities remaining available for futureissuance under equitycompensation plans
(excludingsecurities reflected in column(a))
|Equity compensation plans approved by security shareholders |  | 8,709,326                                                                                     |  | $3.66                                                                         |  | 3,099,259                                                                                                                                   
|                                                            |  |                                                                                               |  |                                                                               |  |                                                                                                                                             



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ITEM 6. Selected Financial Data



The following selected financial data are derived from the consolidated financial statements of US Unwired Inc. and subsidiaries. The data should be read in conjunction with the consolidated financial statements, related notes and other
financial information included herein.



|                                                         |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|-------------------------------------------------------- |  | ---------------------------------------- | -------- | - | -------- | - | -------- | ---- |  | - | -------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                         |  | As of December 31,                       |         
|                                                         |  | 2003                                     |          |   | 2002 (1) |   |          | 2001 |  |   | 2000     |   |  | 1999 |        
|                                                         |  | (In thousands except for per share data) |         
|Statement of Operations Data:                            |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|Revenues                                                 |  | $                                        | 535,751  |   |          | $ | 511,564  |      |  | $ | 230,220  |   |  | $    | 80,254  |   |  | $ | 12,473  |  
|Cost of services and merchandise sold                    |  |                                          | 257,250  |   |          |   | 270,785  |      |  |   | 138,519  |   |  |      | 58,226  |   |  |   | 19,026  |  
|Other operating expenses (2)                             |  |                                          | 350,600  |   |          |   | 357,810  |      |  |   | 175,279  |   |  |      | 102,329 |   |  |   | 24,385  |  
|Impairment of goodwill (3)                               |  |                                          |         |   |          |   | 214,191  |      |  |   |         |   |  |      |        |   |  |   |        |  
|Impairment of intangible assets (3)                      |  |                                          |         |   |          |   | 188,330  |      |  |   |         |   |  |      |        |   |  |   |        |  
|                                                         |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|Operating loss                                           |  | $                                        | (72,099  | ) |          | $ | (519,552 | )    |  | $ | (83,578  | ) |  | $    | (80,301 | ) |  | $ | (30,938 | )
|                                                         |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|Loss from continuing operations                          |  | $                                        | (159,460 | ) |          | $ | (590,750 | )    |  | $ | (107,945 | ) |  | $    | (82,000 | ) |  | $ | (24,133 | )
|                                                         |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|Loss from continuing operations per diluted common share |  | $                                        | (1.24    | ) |          | $ | (5.00    | )    |  | $ | (1.29    | ) |  | $    | (1.14   | ) |  | $ | (0.40   | )
|                                                         |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|                                                         | 
|                                                         |  | As of December 31,                       |         
|                                                         |  | 2003                                     |          |   | 2002 (1) |   |          | 2001 |  |   | 2000     |   |  | 1999 |        
|                                                         |  | (In thousands)                           |         
|Balance Sheet Data:                                      |  |                                          |          |   |          |   |          |      |  |   |          |   |  |      |         |   |  |   |         |  
|Cash and cash equivalents                                |  | $                                        | 97,193   |   |          | $ | 61,985   |      |  | $ | 100,589  |   |  | $    | 15,136  |   |  | $ | 14,695  |  
|Marketable securities                                    |  |                                          |         |   |          |   |         |      |  |   |         |   |  |      | 165,438 |   |  |   | 141,453 |  
|Property and equipment, net                              |  |                                          | 411,518  |   |          |   | 476,941  |      |  |   | 247,549  |   |  |      | 203,900 |   |  |   | 88,188  |  
|Total assets                                             |  |                                          | 718,328  |   |          |   | 831,430  |      |  |   | 474,534  |   |  |      | 456,980 |   |  |   | 318,970 |  
|Long-term debt and redeemable preferred stock            |  |                                          | 797,587  |   |          |   | 767,220  |      |  |   | 339,368  |   |  |      | 305,533 |   |  |   | 266,080 |  
|Stockholders equity (deficit)                           |  |                                          | (229,767 | ) |          |   | (70,238  | )    |  |   | 39,638   |   |  |      | 100,054 |   |  |   | 28,585  |  

---

|(1) | On March 8, 2002, US Unwired acquired 100% of the ownership interests of Georgia PCS for approximately $84.5 million and on April 1, 2002, US Unwired acquired 100% of the ownership
interest in IWO for approximately $446.0 million. The Companys operating results include the operating results of Georgia PCS since the date of acquisition, March 8, 2002 and the operating results of IWO from date of acquisition, April 1,
2002.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Other operating expenses include an IWO asset abandonment charge of $12.1 million for the cell sites and the related property leases of these abandoned cell sites in 2003.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | In 2002, the Company recognized a $402.5 million impairment of goodwill and intangible assets as a result of its impairment testing of IWO in compliance with SFAS No. 142 Goodwill
and Other Intangible Assets and SFAS No. 144 Accounting for the Disposal of Long-Lived Assets. For a detailed discussion on this topic, refer to Note 3 Adoption of Statement 142 in our accompanying Consolidated Financial Statements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 7. Managements Discussion and Analysis of Financial Condition And Results of Operations



The following discussion should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Report.
The discussion contains forward-looking statements that involve risks and uncertainties. For a detailed discussion on this topic, refer to our opening comments at the beginning of this Form 10-K.



Critical Accounting Policies and Estimates



Our discussion and analysis of our financial condition and results of
operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of



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contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to Sprint PCS disputes, bad debts, activation fee
revenues and related expense, determination of fair value of separate units for the application of EITF 00-21, revenue recognition for contract cancellation and late fees, inventory reserves, intangible assets and contingencies. We base our
estimates on our historical experience, the historical experience of Sprint PCS and the historical experience of other Sprint PCS affiliates and various other assumptions that are believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from these estimates under different assumptions or conditions.



We believe the following critical accounting policies affect our significant
judgments and estimates used in the preparation of our consolidated financial statements.



Reliance on Sprint PCS Processing



We rely on Sprint PCS for much of our financial reporting information including: revenues; commissions paid to national retailers; fees paid for customer care and billing; roaming revenue and roaming expense on the
Sprint PCS and Sprint PCS affiliate network; and, the maintenance of accounts receivable, including cash collections and the write off of customer balances that are not collectible and the accuracy of our accounts receivable balance. Where
uncertainty exists regarding revenues, we do not record these revenues until substantive information has been provided to ensure that such revenues have been earned. Based upon the timing of the information received from Sprint PCS, we make certain
assumptions that the information is accurate and that it is consistent with historical trends. We also rely upon the evaluation of internal controls as performed by Sprint PCSs external auditors that were performed in accordance with AICPA
Statement on Auditing Standards (SAS) No. 70.



Bad Debt
Expense



We maintain allowances for doubtful accounts
for estimated losses resulting from the inability of subscribers to make payments. If the financial conditions of our subscribers deteriorate, resulting in the subscribers inability to make payments, additional allowances will be required.



We estimate our allowance by examining the components of our
revenue. We establish a general reserve of all accounts receivable that are estimated to be uncollectible. In addition, we do not recognize 100% of our late fees or cancellation fees as revenue because of high uncertainty of the collectibility of
these amounts. Reserves for these amounts are recorded to our allowance for doubtful accounts. Our evaluation of the adequacy of these amounts includes our own historical experience and discussions with Sprint PCS and other Sprint PCS affiliates.



Revenue Recognition



We recognize only a portion of contract cancellation fees billed to
subscribers that disconnect service prior to fulfilling the contractual length of service, as there is significant uncertainty that all contract cancellation fees that are billed will be collected. We have very limited information at a detail level
sufficient to perform our own evaluation and rely on Sprint PCS historical trending to make our estimates. If the collections on contract cancellation fees are less than that recognized, additional allowances may be required.



We recognize only a portion of late fees billed to subscribers that fail to
pay their bills within the required payment period, as there is no assurance that all late fees that are billed will be collected. We have very limited information at a detail level sufficient to perform our own evaluation and rely on Sprint PCS
historical trending to make our estimates. If the collections on late fees are less than that recognized, additional allowances may be required.



For sales channels other than our retail outlets, we defer revenues collected for activation fees over the estimated life of the subscriber relationship,
which we believe to be up to 32 months, based upon our historical trends of average customer lives and discussions with Sprint PCS. For these same sales channels, we also defer an activation expense in an amount equal to the activation fee revenue
and amortize this expense in an amount



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equal to the activation fee revenue over the life of the subscriber relationship. If the estimated life of the subscriber relationship increases or
decreases, the amounts of deferred revenue and deferred expense will be adjusted over the revised estimated life of the subscriber relationship. For our retail sales channels, the sale of handsets and future service under contract are accounted for
as separate units under EITF 00-21. As a result, the total consideration under these arrangements, including any related activation fees, is allocated between these separate units based upon their relative fair values. The determination of fair
values for these separate units can vary depending upon market conditions.



Inventory Reserves



We review our inventory semi-annually and write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future
demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be necessary.



Accrued Commissions



We accrue commissions and other costs related to national retailers based upon their sales to new subscribers. The national retailers receive both a
commission and, because the handset is typically sold below cost, a reimbursement for the difference between the sales price and the cost. We base our accruals on information provided by Sprint PCS on subscriber additions and recognize that there
are typically timing differences between the point of subscriber activation and the time that we are invoiced for commissions by Sprint PCS. We periodically and annually evaluate the adequacy of our accruals through analysis of historical
information and discussions with Sprint PCS. Depending on the level of sales and other factors, our estimates of the amounts accrued for commissions and other costs owed to such retailers may require modification of our previous estimates.



Goodwill and Intangible Assets Impairment Analysis



We perform impairment tests of goodwill and long
lived assets, including intangible assets, as required by Statements of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142)andNo. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS 144). The impairment analysis requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell the
asset. SFAS No. 142 requires annual tests for impairment of goodwill and intangible assets that have indefinite useful lives and interim tests when an event has occurred that more likely than not has reduced the fair value of such assets.



We determined that US Unwired and IWO are to be considered
separate reporting units under SFAS No. 142, as each constitutes a separate business for which discrete financial information is available and management regularly reviews the operating results of each of these businesses. This determination is
further supported as each has separate senior bank credit facilities and separate senior subordinated discount notes (US Unwired) or senior notes (IWO). Under the terms of these debt instruments, funds available under the US Unwired debt can only be
used by US Unwired, and funds available under the IWO debt can only be used by IWO. US Unwired is not obligated for the payment of IWOs debt, and IWO is not obligated for the payment of US Unwireds debt.



The abovementioned impairment analyses require numerous subjective
assumptions and estimates to determine future undiscounted cash flows and fair values of each of the respective reporting units. Changes in these subjective assumptions and estimates that may be caused by future changes in the levels of revenues,
liquidity, or other factors, may result in the recognition of impairment charges in the future. Based upon valuation analyses performed by an independent third-party valuations as of October 31, 2003, there was no impairment of goodwill or
intangible assets as of October 31, 2003.



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Overview



Through our wholly owned subsidiaries, we provide wireless personal communication services, commonly referred to as PCS, in eastern Texas, southern
Oklahoma, southern Arkansas, the Florida panhandle, southern Tennessee, upstate New York, New Hampshire (other than the Nashua market) and Vermont; significant portions of Louisiana, Alabama, Georgia and Mississippi; and portions of Massachusetts
and Pennsylvania. We are a network partner of Sprint PCS, the personal communications services group of Sprint Corporation. Sprint PCS, directly and through network partners like us, provides wireless services in more than 4,000 cities and
communities across the country. We have the exclusive right to provide digital PCS services under the Sprint® and Sprint PCS® brand names in service areas that had approximately 17.6 million residents as of December 31, 2003. Our combined service areas are among the largest in population and subscribers of the Sprint PCS network partners and
are contiguous with Sprint PCSs launched markets of Houston, Dallas, Little Rock, New Orleans, Birmingham, Jacksonville, Memphis, Atlanta, New York and Boston.



Recent Developments



Our operating results continue to be impacted by our highly leveraged capital structure, our relationship with Sprint PCS and a highly competitive
marketplace.



Our Highly Leveraged Capital Structures



US Unwired and IWO have separate debt structures. US
Unwired entered into a senior bank credit facility and senior subordinated discount notes prior to the April 2002 acquisition of IWO. IWO has a senior bank credit facility and senior notes that were also entered into prior to the April 2002
acquisition. Under the terms of these debt instruments, funds available under the US Unwired debt can only be used by US Unwired, and funds available under the IWO debt can only be used by IWO. US Unwired is not obligated for the payment of
IWOs debt, and IWO is not obligated for the payment of US Unwireds debt.



US Unwired



As of
December 31, 2003, US Unwired had $64.9 million in cash and cash equivalents; availability under the US Unwired senior bank credit facility of $38.3 million, net of $1.7 million in outstanding letters of credit; and indebtedness that consisted of
$76.0 million related to the US Unwired senior bank credit facility, $359.3 million related to the US Unwired senior subordinated discount notes and $10.6 million in capital leases, promissory notes and vendor financing for a total of $445.9
million. As a result of the sale of our cellular properties in February 2004 as discussed below, our bank indebtedness was reduced by $6.2 million to $69.8 million See Note 11 for commitments and contingencies that may affect US Unwireds
liquidity. US Unwired must comply with certain financial covenants of the US Unwired senior bank credit facility and the US Unwired senior subordinated discount notes, and as of December 31, 2003, was in compliance with these financial covenants.



On October 30, 2003, we and the holders of the US Unwired
senior bank credit facility revised certain provisions of the US Unwired senior bank credit facility through execution of the third amendment to the US Unwired senior bank credit facility. We and our senior lenders agreed to a revised set of
financial covenants, a $40 million revolving credit facility that is subject to certain borrowing conditions, an immediate $10.0 million partial repayment of the senior bank term loans and a 0.5% increase to the interest rate. The October 30, 2003
amendment requires us to remit a portion of the net proceeds of any asset disposals. The amendment also provides for additional restrictions on our ability to draw on the $40.0 million revolver that includes certain financial requirements and only
allow for additional draws if our cash balance falls below $15.0 million prior to March 31, 2005 or $10.0 million on or subsequent to March 31, 2005. We incurred approximately $2.7 million in banking and other professional fees related to this
amendment.



On February 6, 2004, we consummated the sale of our
cellular operations and certain PCS licenses for approximately $30.0 million and used $6.2 million of the proceeds to partially repay our recently amended



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US Unwired senior bank credit facility. We have entered into an agreement for the sale and leaseback of approximately 90 cell site towers. This sale is
expected to close in March and April 2004 for approximately $10.0 million. A portion of the proceeds, approximately $4.7 million, will be used to further reduce our bank debt.



On May 15, 2003, we announced an offer to exchange any and all of our existing $400 million US Unwired 13.375% senior
subordinated discount notes for $187.50 in cash and $185.00 in face amount of new notes per $1,000 face amount of existing notes with a maximum amount of cash to be paid of $37.5 million. On June 24, 2003, we announced that the offer had expired and
none of the notes were exchanged. In conjunction with this offering, we incurred approximately $3.5 million in outside legal and other professional services and costs. These costs are included in General & Administrative Expenses in the
accompanying consolidated financial statements.



Based on our
2004 operating forecasts, we believe that US Unwired will be able to comply with the financial covenants of the amended US Unwired senior bank credit facility and have sufficient cash to fund its operations, debt service and capital requirements
over the next twelve months. However, our liquidity and ability to comply with these amended financial covenants is dependent upon a number of factors influencing forecasts of earnings and operating cash flows. These factors include subscriber
growth, average monthly revenue per user (ARPU), customer turnover or churn and cost per gross addition (CPGA). These performance metrics are explained in our Management Discussion and Analysis section of this
filing.



Should actual results differ from our underlying
business model assumptions, our liquidity position and ability to comply with the amended financial covenants could be adversely affected. We could be required to raise additional capital that may or may not be available on terms acceptable us, if
at all. This could have a material adverse effect on our ability to achieve our intended business objectives.



IWO Liquidity



We have been unable to develop a business plan for IWO that provides sufficient cash to fund operations, debt service and capital requirements for 2004.
We have been in discussions with the IWO banking group to arrive at an acceptable restructuring to preserve liquidity but have been unable to arrive at an acceptable plan. We anticipate seeking protection under bankruptcy in 2004.



During 2003 IWO failed to make $9.5 million in interest payments on the IWO
on senior bank credit facility and was not in compliance with the restrictive covenants under the IWO senior bank credit facility at December 31, 2003. As a result of IWOs failure to make scheduled interest payments and the covenant
violations, IWO was in default of the IWO senior bank credit facility at December 31, 2003 and the holders of the IWO senior bank credit facility have denied IWO access to the remaining $25.2 million of availability. As a result, we have classified
all outstanding indebtedness of both the IWO senior bank credit facility and the IWO senior notes as a current liability.



As of December 31, 2003, IWO had $32.3 million in cash and cash equivalents and $19.4 million in restricted cash; and indebtedness that consisted of
$213.2 million related to the IWO senior bank credit facility and $138.5 million related to the IWO senior notes for a total of $351.7 million. A portion of the original proceeds of the IWO senior notes offering was set aside as restricted cash to
make the first six scheduled semi-annual interest payments on the IWO senior notes through January 2004. Principal repayment of the IWO senior bank credit facility commences in March 2004.



As a result of liquidity challenges, IWO has made the decision to reduce
capital expenditures for network expansion and abandon the construction of cell sites that do not provide a sufficient level of enhanced coverage. IWO recorded an asset abandonment charge of $12.1 million during 2003 for these abandoned cell sites
and their related property leases. Included in this asset abandonment charge are cell sites that IWO is required to construct to meet the build out requirements under the IWO Sprint PCS management agreement. Failure to complete the build out of the
IWO service area will place IWO in violation of the IWO Sprint PCS management agreement. As a result, Sprint PCS could declare IWO in default and take action up to and including termination of the IWO Sprint management agreement. At December 31,
2003, IWOs construction in progress included $6.0 million



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primarily related to cell sites that IWO plans to complete, and we estimate that completion of these cell sites will require approximately $11.4 million in
additional costs to complete construction and place these sites in operation.



Due to restrictions in the US Unwired debt instruments, US Unwired cannot provide any capital or other financial support to IWO. Further, IWO creditors, IWO lenders and IWO note holders cannot place any liens or
encumbrances on the assets of US Unwired. Should the holders of the IWO senior bank credit facility place IWO in default, US Unwireds relationship with IWO may change and several alternatives exist ranging from working for the holders of the
IWO senior bank credit facility and the holders of the IWO senior notes as a manager of the IWO territory, possibly subject to the approval by Sprint PCS, to no involvement with IWO at all.



Considering IWOs default of the IWO loan agreements and its liquidity
as discussed above, there is substantial doubt about IWOs ability to continue as a going concern.



Our Relationship with Sprint PCS



See Our Affiliation with Sprint PCS for a detailed discussion of the Sprint PCS Management Agreements.



We are dependent on Sprint PCS for a significant portion of our financial
information as a result of our contractual relationship with Sprint PCS as a service bureau provider for billing, cash collections and other back office functions such as customer service. We also purchase certain goods and services through Sprint
PCS, such as handsets, network maintenance and access to national retail chain sales channels in our markets, where Sprint PCS has negotiated contracts and allows us to operate under those contractual arrangements.



We do not always agree with the validity of charges assessed by Sprint PCS
and as of December 31, 2003, had disputed approximately $19.1 million of charges to US Unwired and $9.3 million of charges to IWO. Based upon the information provided to us by Sprint PCS to date, we believe the accompanying consolidated balance
sheet adequately reflects our obligation that may be due to Sprint PCS for these charges. However, our cash flow could be adversely affected in the future should these disputes not be settled in our favor.



On July 11, 2003, we, Louisiana Unwired and its wholly owned subsidiary,
Texas Unwired, a limited partnership, (Texas Unwired), filed suit in the U.S. District Court for the Western District of Louisiana (US District Court), against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and
Sprintcom, Inc. (collectively, Sprint). The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), breach of fiduciary duty and fraud arising out of Sprints conduct in its dealings
with the plaintiff companies. It seeks treble actual damages in unspecified amounts and appointment of a receiver over property and assets controlled by Sprint in Louisiana. On September 25, 2003, we filed an amended complaint to include contractual
claims. On October 20, 2003, Sprint submitted their Answer, Defenses, and Counterclaim of Defendants seeking dismissal of our First Amended Complaint and filing a counter-claim for approximately $13.3 million related primarily to contractual
disputes as discussed above. On October 21, 2003, Sprint filed a Defendants Partial Motion for Judgment on the Proceedings seeking partial dismissal of claims filed in the First Amended Complaint. On October 21, 2003, Sprint filed
Defendants Motion to Strike Plaintiffs Jury Demand from the First Amended Complaint. On February 3, 2004, the U.S. District Court denied in all respects Sprints motions for judgment on the proceedings, allowed US Unwired to hire an
outside accounting company to monitor monies with a receiver as an acceptable option at a later time and agreed with US Unwireds request for a trial by jury in Louisiana. US Unwired and Sprint have submitted to the District Court an agreed
upon schedule to complete the discovery process during 2004 and anticipate a late-2004 trial date. We do not believe that a negative outcome of our lawsuit will have a material adverse effect on the Company.



We have been in discussions with Sprint PCS to modify certain components of
IWOs Sprint PCS management agreement including a fee simplification process, modification of certain build-out requirements and the settlement of IWOs outstanding disputes with Sprint, but no definitive agreement has been reached at this
time. We have had no such discussions with Sprint PCS as it relates to the affiliate agreements with other US Unwired subsidiaries.



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Our agreements with Sprint PCS stipulate a reciprocal travel rate. Sprint PCS travel revenue is generated
on a per minute basis when a Sprint PCS subscriber outside of our markets uses our service when traveling through our markets. Sprint PCS travel expense is generated on a per minute basis when our subscribers travel outside our market area and use
the Sprint PCS network. Historically, our Sprint PCS travel revenue exceeds our Sprint PCS travel expense. Effective January 1, 2003, Sprint PCS reduced the reciprocal travel rate for Louisiana Unwired from $0.20 per minute in 2002 to $0.058 per
minute in 2003 and for Texas Unwired and Georgia PCS Management, LLC (Georgia PCS), both subsidiaries of LA Unwired, and IWO from $0.10 per minute in 2002 to $0.058. On December 4, 2003, Sprint PCS notified us that it is reducing the
reciprocal roaming rate to $0.041 per minute of use in 2004.



Competitive Market Place



We face
significant competition in our service area. In order to attract new subscribers, we offer steeper discounts on handsets and generous service plans that include more minutes and/or more anytime minutes and other ancillary enhancements such as free
long distance. Based upon increased competition, we anticipate that market prices for two-way wireless services will continue to decline in the future. Wireless local number portability (WLNP), which allows subscribers to change carriers
and retain their existing phone numbers, was introduced into a portion of our marketplace in November 2003 and will be in effect in all of our markets in May 2004. Given the limited time that we have had to evaluate WLNP, we are uncertain of the
future impact. For more detail, see the Competition discussion in Item 1 Business.



Our Business Strategy



We have undertaken a number of key initiatives designed to enable US Unwired to achieve the underlying assumptions of the US Unwired business model and preserve IWO liquidity. We have:



| |  | focused on attracting customers that are in good credit standing.
| | - | -----------------------------------------------------------------



| |  | reinstated the deposit requirement for certain higher credit risk subscribers and will request not to participate in any Sprint PCS programs where our analysis indicates adversely
impacted levels of customer turnover or unsatisfactory economic returns.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | restructured sales employees programs to pay higher commissions on subscribers with better credit ratings.
| | - | -----------------------------------------------------------------------------------------------------------



| |  | revised the local agent commission structure. We pay higher commissions for subscribers with good credit ratings. We have cancelled and continue to cancel agreements with local
agents that target higher credit risk subscribers or provide low economic value.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | reintroduced US Unwireds pre-pay program, which requires advance payment for minutes of use. We believe that this program offers higher credit risk subscribers a less
stressful environment in which to subscribe to our service by providing an opportunity to better manage their expenditures for the service provided and limit our bad debt exposure.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | supplemented Sprint PCSs customer service function with certain members of our own staff who focus on subscriber retention.
| | - | ----------------------------------------------------------------------------------------------------------------------------



| |  | limited our capital expenditures to: (1) capacity and required technical upgrades of existing equipment, and (2) only adding additional cell site coverage in areas that we expect
will produce positive cash returns as a result of either new subscriber growth or decreases in subscriber turnover.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | continued to identify and will seek to divest of certain non-core assets.
| | - | -------------------------------------------------------------------------



| |  | undertaken a corporate wide evaluation of expenses. This includes the consolidation of functions, divesting of unused and under utilized facilities, renegotiation of vendor
contracts, extension of vendor payment terms and other cost cutting measures.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | evaluated and continue to evaluate our markets and reduce sales staffing levels and close retail outlets that do not meet its minimum internal rates of returns.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | continued to work with Sprint PCS to improve the detail, timeliness and accuracy of information processed by Sprint PCS on our behalf.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



As a result of these initiatives and operating results to date, we believe
that US Unwired will be able to comply with the US Unwired senior bank credit facility financial covenants and have sufficient cash to fund its operations, debt service and capital requirements over the next twelve months. However, as discussed
above, US Unwireds funding status and ability to comply with these amended financial covenants is dependent upon a number of factors influencing forecasts of earnings and operating cash flows. While we believe that these initiatives have had
and will continue to have a positive impact on operating results and support the ability of US Unwired to comply with its amended senior bank credit facility covenants and have sufficient cash to support the operations of US Unwired over the next
twelve months, we cannot state with certainty that these initiatives will result in our ability to sustain IWOs operations in 2004.



Cash Flows



Operating Activities. Cash provided by operating activities was $60.6 million in 2003. This primarily consisted of our net loss of $157.0 million offset
by a $34.7 million increase in working capital, $125.7 million in depreciation and amortization, a $12.1 million IWO asset abandonment charge and $45.1 million in debt discount accretion. Cash used in operations was $23.4 million for 2002 and cash
used in operations was $22.8 million for 2001.



Investing
Activities. Cash used in investing activities was $8.0 million for 2003. This primarily consisted of $30.5 million in purchases of property and equipment offset by $21.9 million in proceeds from the release of restricted cash and $0.6 million in
miscellaneous other investing activities. Net cash used in investing activities was $97.3 million in 2002 and net cash provided by investing activities was $106.5 million in 2001.



Financing Activities. Cash flow used in financing activities was $17.4 million in 2003 and consisted of $14.7 million in
principal payments on long-term debt and $2.7 million in debt issuance costs. Net cash provided by financing activities was $82.0 million in 2002 and $1.8 million in 2001.



Contractual Obligations



Our future contractual obligations related to long-term debt, capital lease obligations, and non-cancelable operating leases
at December 31, 2003 were as follows assuming acceleration of IWO obligations in 2004:



|                                             |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|-------------------------------------------- |  | ---------------------- | --------- | --------------- | - | -------- |  | -------- | ------ | ------------- | - | ------ |  | - | -------
|                                             |  | Payments due by period
|                                             |  | Total                  |           | Less than1 Year |   | 1-3Years |  | 4-5Years |        | After 5 Years
|                                             |  | (In thousands)        
|US Unwired Inc.                              |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|Senior subordinated discount notes           |  | $                      | 400,000   |                 | $ |         |  | $        |       |               | $ |       |  | $ | 400,000
|Senior bank credit facility                  |  |                        | 76,000    |                 |   | 10,400   |  |          | 31,780 |               |   | 33,820 |  |   |       
|Promissory notes                             |  |                        | 3,452     |                 |   | 215      |  |          | 3,237  |               |   |       |  |   |       
|Vendor financing                             |  |                        | 310       |                 |   | 64       |  |          | 220    |               |   | 26     |  |   |       
|Capital leases                               |  |                        | 8,863     |                 |   | 792      |  |          | 2,377  |               |   | 1,591  |  |   | 4,103  
|Operating leases                             |  |                        | 150,366   |                 |   | 23,758   |  |          | 61,193 |               |   | 36,850 |  |   | 28,565 
|                                             |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|Total US Unwired Inc.                        |  |                        | 638,991   |                 |   | 35,229   |  |          | 98,807 |               |   | 72,287 |  |   | 432,668
|                                             |  |                        |           |                 |  
|IWO Holdings, Inc.                           |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|Senior notes                                 |  | $                      | 160,000   |                 | $ | 160,000  |  |          |       |               |   |       |  |   |       
|Senior bank credit facility                  |  |                        | 213,184   |                 |   | 213,184  |  |          |       |               |   |       |  |   |       
|Operating leases                             |  |                        | 72,395    |                 |   | 72,395   |  |          |       |               |   |       |  |   |       
|                                             |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|Total IWO Holdings, Inc.                     |  |                        | 445,579   |                 |   | 445,579  |  |          |       |               |   |       |  |   |       
|                                             |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        
|                                             |  |                        |           |                 |  
|Total US Unwired Inc. and IWO Holdings, Inc. |  | $                      | 1,084,570 |                 | $ | 480,808  |  | $        | 98,807 |               | $ | 72,287 |  | $ | 432,668
|                                             |  |                        |           |                 |   |          |  |          |        |               |   |        |  |   |        



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During 2003, IWO failed to make $9.5 million in interest payments on the IWO senior bank credit facility,
and IWO was not in compliance with its restrictive covenants under the IWO senior bank credit facility at December 31, 2003. As a result of IWOs failure to make scheduled interest payments and the covenant violations, IWO was in default of the
IWO senior bank credit facility at December 31, 2003 and the holders of the senior bank credit facility have denied IWO access to the remaining $25.2 million of availability. As a result, we have classified all outstanding indebtedness of both the
IWO senior bank credit facility and the IWO senior notes as a current liability.



The availability under the US Unwired senior bank credit facility will be permanently reduced by the following amounts in the future as follows (in millions). As discussed above, due to the failure to make scheduled
interest payments and covenant violations, IWO has no available funds remaining on the IWO senior bank credit facility:



|                                       |  |                      |      |          |   |           |  |           |      |  |   |  
|-------------------------------------- |  | -------------------- | ---- | -------- | - | --------- |  | --------- | ---- |  | - | -
|                                       |  | Reduction by period 
|                                       |  | Current Availability |      | NextYear |   | 1-3 Years |  | 4-5 Years
|US Unwired senior bank credit facility |  | $                    | 40.0 |          | $ |          |  | $         | 40.0 |  | $ | 
|IWO senior bank credit facility        |  |                      |     |          |   |          |  |           |     |  |   | 
|                                       |  |                      |      |          |   |           |  |           |      |  |   |  
|Total                                  |  | $                    | 40.0 |          | $ |          |  | $         | 40.0 |  | $ | 
|                                       |  |                      |      |          |   |           |  |           |      |  |   |  



PCS Performance
Measurements and Metrics



The wireless telecommunications
industry uses terms such as subscriber additions, average revenue per user, churn and cost per gross addition as performance measurements or metrics. None of these terms are measures of financial performance under accounting principles generally
accepted in the United States (GAAP). When we use these terms, they may not be comparable to similar terms used by other wireless telecommunications companies.



|                                         |  |                                 |         |   |                         |   |         |      |  |   |         |   |  |      |         |   |      |   |         |   |  |   |         |  
|---------------------------------------- |  | ------------------------------- | ------- | - | ----------------------- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | - |  | - | ------- | -
|                                         |  | Three months ended December 31, |         |   | Year ended December 31, |  
|                                         |  | 2003                            |         |   | 2002                    |   |         | 2001 |  |   | 2003    |   |  | 2002 |         |   | 2001 |  
|Subscribers                              |  |                                 |         |   |                         |   |         |      |  |   |         |   |  |      |         |   |      |   |         |   |  |   |         |  
|Gross Additions                          |  |                                 | 88,107  |   |                         |   | 95,160  |      |  |   | 70,947  |   |  |      | 316,100 |   |      |   | 337,391 |   |  |   | 233,966 |  
|Net Additions                            |  |                                 | 22,089  |   |                         |   | 19,881  |      |  |   | 41,070  |   |  |      | 59,246  |   |      |   | 73,799  |   |  |   | 151,030 |  
|Total Customers                          |  |                                 | 617,813 |   |                         |   | 561,162 |      |  |   | 277,036 |   |  |      | 617,813 |   |      |   | 561,162 |   |  |   | 277,036 |  
|Churn                                    |  |                                 | 3.4     | % |                         |   | 4.3     | %    |  |   | 4.0     | % |  |      | 3.4     | % |      |   | 4.2     | % |  |   | 3.3     | %
|                                         |  |                                 |         |   |                         |  
|Virgin Subscribers (in our service area) |  |                                 | 88,219  |   |                         |   |        |      |  |   |        |   |  |      | 88,219  |   |      |   |        |   |  |   |        |  
|                                         |  |                                 |         |   |                         |  
|Average Revenue Per User, Monthly        |  |                                 |         |   |                         |   |         |      |  |   |         |   |  |      |         |   |      |   |         |   |  |   |         |  
|Including Roaming                        |  | $                               | 72.39   |   |                         | $ | 84.56   |      |  | $ | 92.03   |   |  | $    | 72.11   |   |      | $ | 85.17   |   |  | $ | 86.58   |  
|Without Roaming                          |  | $                               | 52.63   |   |                         | $ | 53.97   |      |  | $ | 55.18   |   |  | $    | 53.94   |   |      | $ | 54.67   |   |  | $ | 53.23   |  
|                                         |  |                                 |         |   |                         |  
|Cost Per Gross Addition                  |  | $                               | 383     |   |                         | $ | 342     |      |  | $ | 359     |   |  | $    | 347     |   |      | $ | 361     |   |  | $ | 347     |  
|                                         |  |                                 |         |   |                         |  
|Average Monthly MOUs Per Subscriber      |  |                                 |         |   |                         |   |         |      |  |   |         |   |  |      |         |   |      |   |         |   |  |   |         |  
|Home                                     |  |                                 | 594     |   |                         |   | 471     |      |  |   | 371     |   |  |      | 567     |   |      |   | 462     |   |  |   | 349     |  
|Roaming Off Our Network                  |  |                                 | 193     |   |                         |   | 147     |      |  |   | 113     |   |  |      | 179     |   |      |   | 136     |   |  |   | 86      |  
|                                         |  |                                 |         |   |                         |  
|System MOUs (Millions)                   |  |                                 |         |   |                         |   |         |      |  |   |         |   |  |      |         |   |      |   |         |   |  |   |         |  
|Subscriber                               |  |                                 | 1,074   |   |                         |   | 775     |      |  |   | 280     |   |  |      | 4,012   |   |      |   | 2,664   |   |  |   | 846     |  
|Roaming                                  |  |                                 | 512     |   |                         |   | 330     |      |  |   | 124     |   |  |      | 1,771   |   |      |   | 1,094   |   |  |   | 365     |  
|                                         |  |                                 |         |   |                         |  
|Licensed POPs (Millions)                 |  |                                 | 17.6    |   |                         |   | 17.6    |      |  |   | 9.9     |   |  |      | 17.6    |   |      |   | 17.6    |   |  |   | 9.9     |  
|                                         |  |                                 |         |   |                         |  
|Covered POPs (Millions)                  |  |                                 | 12.8    |   |                         |   | 12.6    |      |  |   | 6.8     |   |  |      | 12.8    |   |      |   | 12.6    |   |  |   | 6.8     |  
|Towers (Owned and Leased)                |  |                                 | 1,878   |   |                         |   | 1,796   |      |  |   | 872     |   |  |      | 1,878   |   |      |   | 1,796   |   |  |   | 872     |  
|Cum. CapEx Per Covered POP               |  | $                               | 50.21   |   |                         | $ | 48.77   |      |  | $ | 37.69   |   |  | $    | 50.21   |   |      | $ | 48.77   |   |  | $ | 37.69   |  



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Subscribers



We refer to our customers as subscribers. Gross additions refer to the total number of new subscribers added
during the period. Net subscribers refer to the total number of new subscriber additions during the period reduced by any subscribers that have cancelled or terminated their service with us during this same period.



The number of gross additions decreased for 2003 as compared to 2002
primarily as a result of our marketing efforts to target customers of good credit quality and the re-institution and increase of deposits for certain credit challenged subscribers.



The number of net additions decreased for 2003 as compared to 2002 primarily as a result of a reduction in gross additions
that was partially offset by an improvement in subscriber churn, as discussed below.



Churn



Churn is the
monthly rate of customer turnover expressed as a percentage of our overall average customers for the reporting period. Customer turnover includes both customers that elected voluntarily to not continue using our service and customers that were
involuntarily terminated from using our service because of non-payment. Churn is calculated by dividing the sum of (i) the number of customers that discontinue service; (ii) less those customers discontinuing their service within 30 days of their
original activation date; (iii) adding back those customers that reactivate their service, by our overall average customers for the reporting period; and, (iv) dividing by the number of months in the period. Churn decreased for 2003 as compared to
2002 primarily as a result of a continuing improvement in the credit quality of our subscriber base.



Subscriber and Roaming Revenue



Subscriber or service revenue consists primarily of a basic service plan (where the customer purchases a pre-allotted number of minutes for voice and/or
data transmission); airtime (which consists of billings for minutes that either exceed or are not covered by the basic service plan); long distance; and charges associated with travel outside our service area.



Roaming revenue consists primarily of Sprint PCS travel revenue, foreign
roaming and reseller revenue. Sprint PCS travel revenue is generated on a per minute basis when a Sprint PCS subscriber outside of our markets uses our service when traveling through our markets. Sprint PCS travel expense is generated on a per
minute basis when our subscribers travel outside our market area and use the Sprint PCS network. Historically, our Sprint PCS travel revenue exceeds our Sprint PCS travel expense. Foreign roaming revenue is generated when a non-Sprint PCS customer
uses our service when traveling through our markets. Reseller revenue is generated from our agreement with Virgin and is classified as foreign roaming because they pay on a per minute basis for usage of our network.



Effective January 1, 2003, Sprint PCS reduced the reciprocal travel rate for
Louisiana Unwired from $0.20 per minute in 2002 to $0.058 per minute in 2003 and for Texas Unwired and Georgia PCS Management Inc. (Georgia PCS), both subsidiaries of LA Unwired, and IWO from $0.10 per minute in 2002 to $0.058 per minute
in 2003. For 2003, the reduction in the travel rate has resulted in a decrease to our revenues of approximately $133.4 million, a reduction to our expenses of approximately $107.4 million and a reduction to our cash flow of approximately $26.0
million.



Average Revenue per User



Average revenue per user (ARPU) is the average monthly service
revenue per subscriber and is calculated by dividing total subscriber revenue for the period by the average number of subscribers during the period. We present ARPU excluding and including roaming revenue. The decrease in ARPU excluding roaming for
2003 as



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compared to 2002 was primarily as a result of more competitive plans that offer more generous allotment of minutes partially offset by an increase in data
revenues. The decrease in ARPU including roaming for 2003 as compared to 2002 was primarily as a result of the reduction in the reciprocal travel rate as discussed above.



Cost per Gross Addition



Cost per gross addition (CPGA) summarizes the average cost to acquire new customers during the reporting period. CPGA is computed by adding
selling and marketing expenses and cost of equipment and reducing the amount by the revenue from handset and accessory sales. The net amount is divided by the number of total new subscribers added for the period. The decrease in CPGA for 2003 as
compared to 2002 was primarily as a result of an overall decrease in selling and marketing expenses.



Average Monthly Minutes of Use per Subscriber



We calculate average monthly minutes of use (MOUs) per subscriber to provide us with an indication of the effectiveness of our basic service plans.
We calculate average monthly MOUs per subscriber by dividing total subscriber minutes with and without roaming by the average number of our subscribers. Our average subscriber MOUs with and without roaming are increasing primarily as a result of
more generous allotments of minutes in our basic service plans.



System Minutes of Use



System minutes of Use
(MOUs) provide an indication of total network (system) usage. We track and evaluate system usage for our subscribers as well as other Sprint PCS, Sprint PCS affiliates and non-Sprint PCS subscribers using our system in order
to assess network capacity. Our overall system minutes are increasing primarily as a result of increases in subscribers and increases in minutes allotted to subscriber plans.



Resident Population/ Service Area



Our service area comprises a population (Licensed POPs) of approximately 17.6 million residents. When we use the
term Covered POPs, we refer to that portion of residents in our service area that have service available as a result of our network build out. The number of people in our service area does not represent the number of Sprint PCS
subscribers that we expect to have in our service area. The increase in Covered POPs is the result of additional cell site towers (towers) that either we have constructed and own or where we have leased space on cell site towers owned by
others.



Cumulative Capital Expenditures Per Covered POP



Cumulative Capital Expenditures Per Covered POP
(Cum CapEx Per Covered POP) is calculated by dividing our capital expenditures since inception by our ending Covered POPs.



Results of Operations



2003 compared to 2002



Revenues



|                     |  |                         |         |      |   |        
|-------------------- |  | ----------------------- | ------- | ---- | - | -------
|                     |  | Year Ended December 31,
|                     |  | 2003                    |         | 2002
|                     |  | (In thousands)         
|Subscriber revenues  |  | $                       | 381,558 |      | $ | 315,256
|Roaming revenues     |  |                         | 128,553 |      |   | 175,929
|Merchandise revenues |  |                         | 23,224  |      |   | 17,915 
|Other revenues       |  |                         | 2,416   |      |   | 2,464  
|                     |  |                         |         |      |   |        
|Total revenues       |  | $                       | 535,751 |      | $ | 511,564
|                     |  |                         |         |      |   |        



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Subscriber revenues



Total subscriber revenues were $381.6 million for 2003 as compared to $315.3 million for 2002, representing an increase of
$66.3 million and was primarily the result of an increase in subscribers as discussed above and our IWO acquisition.



Roaming revenues



Roaming revenues were $128.6 million for 2003 as compared to $175.9 million for 2002, representing a decrease of $47.3 million and was primarily as a
result of our April 1, 2002 acquisition of IWO that added $7.1 million in roaming revenue, an increase of $67.6 million related to a higher volume of PCS subscribers traveling though our service area, an increase of $11.4 million related to
non-Sprint PCS subscribers traveling through our service area including $1.7 million generated by Virgin usage offset by a decrease of $133.4 million related to our decrease in the reciprocal roaming rate as discussed in Subscriber and Roaming
Revenue above. We provided service in 68 PCS markets at December 31, 2003 and December 31, 2002. We continue to add cell sites in locations that we believe will enhance service and increase roaming revenue



Merchandise sales



Merchandise sales were $23.2 million for 2003 as compared to $17.9 million
for 2002, representing an increase of $5.3 million and related to subscriber additions. The increase is primarily as a result of our IWO acquisition, no longer discounting handset sales to local agents and our July 1, 2003 adoption of EITF 00-21 as
discussed in Revenue Recognition above. The cost of handsets typically exceeds the amount received from our subscribers because we subsidize the price of handsets to remain competitive in the marketplace. We face significant competition in our
marketplace and typically sell handsets below cost to new subscribers in order to remain competitive in the market place through steep discounts and instant rebates.



Other revenues



Other revenues were $2.4 million for 2003 as compared to $2.5 million for 2002, representing a decrease of $0.1 million and was primarily attributable to
a decrease in access fee revenues.



Operating Expenses



|                                |  |                          |         |      |   |          
|------------------------------- |  | ------------------------ | ------- | ---- | - | ---------
|                                |  | Years Ended December 31,
|                                |  | 2003                     |         | 2002
|                                |  | (In thousands)          
|Cost of services                |  | $                        | 210,883 |      | $ | 234,679  
|Merchandise cost of sales       |  |                          | 46,367  |      |   | 36,106   
|General and administrative      |  |                          | 130,526 |      |   | 141,453  
|Sales and marketing             |  |                          | 86,403  |      |   | 103,469  
|Non-cash stock compensation     |  |                          | 2,404   |      |   | 4,349    
|Depreciation and amortization   |  |                          | 119,188 |      |   | 108,539  
|IWO asset abandonment charge    |  |                          | 12,079  |      |   |         
|Impairment of goodwill          |  |                          |        |      |   | 214,191  
|Impairment of intangible assets |  |                          |        |      |   | 188,330  
|                                |  |                          |         |      |   |          
|Total operating expenses        |  | $                        | 607,850 |      | $ | 1,031,116
|                                |  |                          |         |      |   |          



Cost of service



Cost of service was $210.9 million for 2003 as compared
to $234.7 million for 2002, representing a decrease of $23.8 million that was primarily the result of a $46.4 million decrease in roaming expense offset by



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our April 1, 2002 acquisition of IWO that added $17.5 million in cost of service and a $3.0 million increase in lease expense primarily related to new cell
site leases and escalators on existing leases and a net increase of $2.1 million in all other cost of service expenses. The overall decrease in roaming expense was primarily as a result of an increase of $61.8 million related to a higher volume of
our subscribers traveling through other Sprint PCS offset by a decrease of $107.4 million related to our decrease in the roaming revenue rate as discussed in Subscriber and Roaming Revenue above and a decrease of $0.8 million related to our
subscribers using non-Sprint PCS service area and Sprint PCS affiliate service area.



Merchandise cost of sales



Merchandise cost of sales was $46.4 million for 2003 as compared to $36.1 million for 2002, representing an increase of $10.3 million that was primarily the result of our April 1, 2002 acquisition of IWO that added $4.5 million and $7.8
million that related to a combination of non-discounted sales to independent agents and adoption of EITF 00-21 offset by lower sales and higher discounts in our retail sales channels. The cost of handsets typically exceeds the amount received from
our subscribers because we subsidize the price of handsets to remain competitive in the marketplace.



General and administrative expenses



General and administrative expenses were $130.5 million for 2003 as compared to $141.5 million for 2002, representing a decrease of $11.0 million that was
primarily as a result of our April 1, 2002 acquisition of IWO that added $13.0 million of general and administrative expense, a one-time charge of $3.5 million in professional fees related to an unsuccessful debt exchange offer, $2.8 million related
to the IWO restructuring and $1.5 related to the Sprint PCS lawsuit and other legal matters offset by a $19.4 million decrease in bad debt expense, a $7.8 million decrease in wages, taxes, benefits and other general and administrative cost that we
believe resulted from reductions associated with our integration efforts and other cost saving initiatives, a $2.8 million decrease in Sprint PCS related charges and a $1.3 million refund on Universal Service Fees.



Sales and marketing expenses



Sales and marketing expenses were $86.4 million for 2003 as compared to
$103.5 million for 2002, representing a decrease of $17.1 million that was primarily as a result of our April 1, 2002 acquisition of IWO that added $8.5 million of selling and marketing expense offset by decreases in advertising of $11.9 million,
agent commissions and handset subsidies of $12.2 million and decreases in other sales and marketing expenses of $1.5 million.



Non-cash stock compensation



Non-cash compensation was $2.4 million for 2003 as compared to $4.3 million for 2002, representing a decrease of $1.9 million that is primarily the result
of a portion of our outstanding options being fully amortized in 2003. The non-cash stock compensation consists of compensation expense related to the granting of certain stock options for the Companys stock in July 1999 and January 2000 with
exercise prices less than the market value of the Companys stock at the date of the grant and the impact of the stock options granted in connection with the IWO acquisition. The non-cash stock compensation expense is generally being amortized
over a four-year period representing the vesting periods of the options.



Depreciation and amortization expense



Depreciation and amortization expense was $119.2 million for 2003 as compared to $108.5 million for 2002, representing an increase of $10.7 million that was primarily as a result of our April 1, 2002 acquisition of
IWO that added $5.9 million of depreciation and $7.5 million of amortization expense related to the Sprint management agreement and subscriber base and a $10.0 million increase in depreciation expense offset by a reduction of $7.3 million in
amortization expense related to the IWO impairment. Property and equipment



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increased to $645.7 million at December 31, 2003 from $630.7 million at December 31, 2002, and intangible assets were unchanged at $117.1 million at December
31, 2003 and December 31, 2002 following a fourth quarter 2002 asset impairment charge of $188.3 million as discussed below.



Impairment of Goodwill and Intangible Assets



In 2002, we recorded impairment charges totaling $402.5 million for the impairment of goodwill and an intangible asset that resulted from the acquisition
of IWO. See our comparison of 2002 to 2001 below for a detailed discussion on this topic.



Other Income/(Expense)



|                                   |  |                         |         |   |      |   |         |  
|---------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | -
|                                   |  | Year Ended December 31, |        
|                                   |  | 2003                    |         |   | 2002 |  
|                                   |  | (In thousands)          |        
|Interest expense                   |  | $                       | (92,455 | ) |      | $ | (74,197 | )
|Interest income                    |  |                         | 1,640   |   |      |   | 2,866   |  
|Gain on the sale of assets/markets |  |                         | 12      |   |      |   | 3       |  
|                                   |  |                         |         |   |      |   |         |  
|Total other expense                |  | $                       | (90,803 | ) |      | $ | (71,328 | )
|                                   |  |                         |         |   |      |   |         |  



Interest expense was
$92.5 million for 2003 as compared to 74.2 million for 2002, representing an increase of $18.3 million. The increase in interest expense was primarily as a result of our increase in outstanding debt. Our outstanding debt, including current
maturities, was $797.6 million at December 31, 2003 as compared to $767.2 million at December 31, 2002. All loans under the IWO senior bank credit facility, effective with the date of the default bear interest at a rate of 4.25-4.75 percent above
the agent banks prime rate.



Interest income was $1.6
million for 2003 as compared to $2.9 million for 2002, representing a decrease of $1.3 million. The decrease was primarily due to less cash and cash equivalents available for investment.



2002 compared to 2001



Revenues



|                     |  |                         |         |      |   |        
|-------------------- |  | ----------------------- | ------- | ---- | - | -------
|                     |  | Year Ended December 31,
|                     |  | 2002                    |         | 2001
|                     |  | (In thousands)         
|Subscriber revenues  |  | $                       | 315,256 |      | $ | 128,872
|Roaming revenues     |  |                         | 175,929 |      |   | 80,724 
|Merchandise revenues |  |                         | 17,915  |      |   | 15,674 
|Other revenues       |  |                         | 2,464   |      |   | 4,950  
|                     |  |                         |         |      |   |        
|Total revenues       |  | $                       | 511,564 |      | $ | 230,220
|                     |  |                         |         |      |   |        



Subscriber revenues



Total subscriber revenues were $315.3 million for 2002 as
compared to $128.9 million for 2001, representing an increase of $186.4 million and was primarily the result of an increase in subscribers as discussed in Subscriber Additions above.



Roaming revenues



Roaming revenues were $175.9 million for 2002 as compared to $80.7 million for 2001, representing an increase of $95.2 million and was primarily the
result of a higher volume of Sprint PCS®
subscribers traveling



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through our markets and the expansion of our network coverage due to market build out. Additionally, our April 1, 2002 acquisition of IWO added $39.0 million
of roaming revenue in 2002. We provided service in 68 PCS markets at December 31, 2002 (including 26 markets added as a result of the IWO and Georgia PCS acquisitions) as compared to 41 PCS markets at December 31, 2001.



Merchandise sales



Merchandise sales were $17.9 million for 2002 as compared to $15.7 million
for 2001, representing an increase of $2.2 million and related to subscriber additions. The number of new subscribers purchasing handsets increased by approximately 45% in 2002 when compared to 2001 and a significant portion of this was the result
of our IWO acquisition. However, our revenues only increased 14% in 2002. Due to increased competition, our average handset selling price decreased 25% in 2002 when compared to 2001. We face significant competition in our marketplace and typically
sell handsets below cost to new subscribers in order to remain competitive in the market place through steep discounts and instant rebates.



Other revenues



Other revenues were $2.5 million for 2002 as compared to $5.0 million for 2001, representing a decrease of $2.5 million and was primarily attributable to
a decrease in management services provided to related companies and a decrease in access fee revenues.



Operating Expenses



|                                |  |                          |           |      |   |        
|------------------------------- |  | ------------------------ | --------- | ---- | - | -------
|                                |  | Years Ended December 31,
|                                |  | 2002                     |           | 2001
|                                |  | (In thousands)          
|Cost of services                |  | $                        | 234,679   |      | $ | 109,005
|Merchandise cost of sales       |  |                          | 36,106    |      |   | 29,514 
|General and administrative      |  |                          | 141,453   |      |   | 50,827 
|Sales and marketing             |  |                          | 103,469   |      |   | 67,322 
|Non-cash stock compensation     |  |                          | 4,349     |      |   | 4,567  
|Depreciation and amortization   |  |                          | 108,539   |      |   | 52,563 
|Impairment of goodwill          |  |                          | 214,191   |      |   |       
|Impairment of intangible assets |  |                          | 188,330   |      |   |       
|                                |  |                          |           |      |   |        
|Total operating expenses        |  | $                        | 1,031,116 |      | $ | 313,798
|                                |  |                          |           |      |   |        



Cost of service



Cost of service was $234.7 million for 2002 as compared
to $109.0 million for 2001, representing an increase of $125.7 million, which primarily related to an increase of $57.8 million in travel and roaming expense, $4.8 million in cell site leases and $3.1 million in circuit and usage costs. Travel
expense is subscriber growth related. It is incurred when our subscribers use Sprint PCS or Sprint PCS affiliated service outside our service area, and roaming expense is incurred when our subscribers are using a non-Sprint PCS related network in an
area typically where the Sprint PCS network is unavailable. The increase in cell site lease expense results from a full year of lease costs as a result of the towers sold and the tower space lease back in 2001 and the expansion of our network
coverage by leasing additional space in 2002. Additionally, our April 1, 2002 acquisition of IWO added $56.3 million of service costs in 2002.



Merchandise cost of sales



Merchandise cost of sales was $36.1 million for 2002 as compared to $29.5 million for 2001, representing an increase of $6.6 million. Of this amount, our
April 1, 2002 acquisition of IWO added $8.5 million of merchandise cost of sales. A portion of our 2001 merchandise cost of sales related to a selective group of existing



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subscribers that returned handsets and were provided new models at no charge. In 2002, we identified these transactions, which amounted to $9.5 million, and
recognized the related cost in General and Administrative expenses as we view these transactions as a customer retention expense due to our highly competitive market. We are unable to quantify this cost for 2001, as they were not identified when the
transaction occurred. The cost of handsets typically exceeds the amount received from our subscribers because we subsidize the price of handsets to remain competitive in the marketplace. This subsidy continues to increase to remain competitive.



General and administrative expenses



General and administrative expenses were $141.5 million for 2002 as compared
to $50.8 million for 2001, representing an increase of $90.7 million that was primarily related to $23.6 million in increases for billing, customer service costs and Sprint PCS management fees associated with our subscriber base increase; $15.7
million in increased bad debts associated primarily with Sprint PCS rate plans that extended credit to credit challenged subscribers; and, $9.5 million in expenses associated with handset upgrades provided to existing subscribers in subscriber
retention initiatives. Additionally, our April 1, 2002 acquisition of IWO added $38.7 million of general and administrative expense in 2002.



Sales and marketing expenses



Sales and marketing expenses were $103.5 million for 2002 as compared to $67.3 million for 2001, representing an increase of $36.2 million. This increase
was primarily related to our April 1, 2002 acquisition of IWO, which added $29.9 million of selling and marketing expense, $4.3 million in advertising expenses, and $1.3 million in sales wages and benefits.



Non-cash stock compensation



Non-cash compensation was $4.3 million for 2002 as compared to $4.6 million
for 2001, representing a decrease of $0.3 million and is considered comparable. The non-cash stock compensation consists of compensation expense related to the granting of certain stock options for the Companys stock in July 1999 and January
2000 with exercise prices less than the market value of the Companys stock at the date of the grant and the impact of the stock options granted in connection with the IWO acquisition. The non-cash stock compensation expense is generally being
amortized over a four-year period representing the vesting periods of the options. Non-cash compensation includes $70,700 related to technical salaries in cost of services, $461,600 related to salaries in sales and marketing and $4.1 million related
to salaries in general and administrative.



Depreciation and
amortization expense



Depreciation and amortization
expense was $108.5 million for 2002 as compared to $52.6 million for 2001, representing an increase of $55.9 million. Property and equipment increased to $630.7 million at December 31, 2002, which includes $205.5 million from our April 1, 2002
acquisition of IWO, from $189.9 million at December 31, 2001. Additionally, our April 1, 2002 acquisition of IWO added $15.7 million of additional depreciation expense, and $28.7 million of additional amortization expense as a result of the purchase
price allocation to the Sprint management agreement and subscriber base intangible assets. The remaining increase in depreciation was the result of capital asset additions in 2001 and 2002.



Impairment of Goodwill and Intangible Assets



As a result of the purchase accounting related to our acquisitions of IWO
and Georgia PCS, we recorded the following intangible assets:



|                            |  |                |        |     |   |         |  |   |        
|--------------------------- |  | -------------- | ------ | --- | - | ------- |  | - | -------
|                            |  | Georgia PCS    |        | IWO |   | Total  
|                            |  | (In thousands)
|Acquired customer base      |  | $              | 12,300 |     | $ | 57,500  |  | $ | 69,800 
|Sprint management agreement |  |                | 15,500 |     |   | 215,000 |  |   | 230,500
|Goodwill                    |  |                | 25,389 |     |   | 214,191 |  |   | 239,580



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Due to the indicators of impairment as discussed above, during the fourth quarter of 2002, we engaged a
nationally recognized valuation firm to assist us in performing a fair value assessment of goodwill and other long-lived assets of US Unwired and IWO. Based on the results of these impairment analyses, we recorded impairment charges totaling $402.5
million for the impairment of goodwill and an intangible asset that resulted from the acquisition of IWO.



We determined that US Unwired and IWO are to be considered separate reporting units under SFAS No. 142, as each constitutes a separate business for which
discrete financial information is available and management regularly reviews the operating results of each of these businesses. This determination is further supported as each has separate senior bank credit facility and separate senior subordinated
discount notes (US Unwired) or senior notes (IWO). US Unwired has a senior bank credit facility and senior subordinated discount notes. IWO has senior bank credit facility and senior notes. US Unwired and IWO entered into these prior to the
acquisition. Under the terms of these debt instruments, funds available under the US Unwired debt can only be used by US Unwired, and funds available under the IWO debt can only be used by IWO. US Unwired is not obligated for the payment of
IWOs debt, and IWO is not obligated for the payment of US Unwireds debt.



The results of these impairment valuations indicated that both goodwill and a significant portion of IWOs intangible assets were impaired and that there was no impairment of goodwill for US Unwired. As a result,
we recorded a goodwill impairment of approximately $214.2 million and an impairment of the IWO Sprint PCS Management Agreement intangible asset of $188.3 million during the quarter ended December 31, 2002. The IWO Sprint PCS Management Agreement was
originally assigned a value of $215.0 million and was being amortized using the straight-line method over 218 months. The valuation analysis determined that carrying amount of the IWO subscriber base was not impaired.



Other Income/(Expense)



|                                   |  |                         |         |   |      |   |         |  
|---------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | -
|                                   |  | Year Ended December 31, |        
|                                   |  | 2002                    |         |   | 2001 |  
|                                   |  | (In thousands)          |        
|Interest expense                   |  | $                       | (74,197 | ) |      | $ | (39,353 | )
|Interest income                    |  |                         | 2,866   |   |      |   | 6,609   |  
|Gain on the sale of assets/markets |  |                         | 3       |   |      |   | 9,269   |  
|                                   |  |                         |         |   |      |   |         |  
|Total other expense                |  | $                       | (71,328 | ) |      | $ | (23,475 | )
|                                   |  |                         |         |   |      |   |         |  



Interest expense was
$74.2 million for 2002 as compared to $39.4 million for 2001, representing an increase of $34.8 million. The increase in interest expense resulted from the increase in outstanding debt. Our outstanding debt, including current maturities, was $767.2
million at December 31, 2002, which includes $350.2 million from our April 1, 2002 acquisition of IWO, as compared to $339.4 million at December 31, 2001.



Interest income was $2.9 million for 2002 as compared to $6.6 million for 2001, representing a decrease of $3.7 million. The decrease was primarily due to
less cash and cash equivalents available for investment.



Gain
on sale of assets was $3,000 for 2002 as compared to $9.3 million for 2001. The 2001 gain relates primarily to the sale and leaseback of 173 towers.



Equity in Losses of Affiliates



Equity in losses in affiliates was $.7 million for 2002 as compared to $2.8 million for 2001, representing a decrease of $2.1 million and relates to
recognizable losses associated with additional contributions provided in connection with our 13.28% ownership of a PCS operator.



Inflation



We believe that inflation has not impaired, and will not impair, our results of operations.



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ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk



Quantitative and Qualitative Disclosure about Market Risk



In the normal course of business, the Companys operations are exposed to interest rate risk on its credit facilities and any future financing
requirements.



At December 31, 2003, our outstanding long-term
debt consisted of $400 million in US Unwired senior subordinated discount notes, $160 million in IWO senior notes, $76 million in term loans under the US Unwired senior bank credit facility and a $213.2 million under the IWO senior bank credit
facility. Interest on the US Unwired senior subordinated discount notes is fixed at 133/8% but does not begin to
accrue until November 11, 2004. Interest on the IWO senior notes is fixed at 14% and is payable semi-annually on January 15 and July 15 of each year. We acquired IWO in April 2002. At December 31, 2003, the market value of the US Unwired senior
subordinated discount notes was $290 million and the market value of the IWO senior notes was $25 million. At December 31, 2002, the market value of the US Unwired senior subordinated discount notes was estimated to be $15.0 million and the market
value of the IWO senior notes was $25 million.



Borrowings under the US Unwired senior bank credit facility totaled $76 million and borrowings under the IWO senior bank credit facility totaled $213.2 million at December 31, 2003. These borrowings bear interest at a variable rate and all
loans under the IWO senior bank credit facility, effective with the date of the default, bear interest at a rate of 4.25-4.75 percent above the agent banks prime rate. A 1% increase in interest rates in 2003 would have resulted in
approximately a $2.9 million increase in interest expense for the year ended December 31, 2003 of which $0.8 million would relate to the US Unwired senior bank credit facility and $2.1 million to the IWO senior bank credit facility. A 1% increase in
interest rates in 2002 would have resulted in a $3.0 million increase in interest expense for the year ended December 31, 2002 of which $0.9 million would relate to the US Unwired senior bank credit facility and $2.1 million to the IWO senior bank
credit facility.



ITEM 8. Financial Statements



Our financial statements are listed under Item 15(a) of this annual report and are filed as part of this report on the pages indicated.



ITEM 9. Changes In And Disagreements With Accountants on Accounting And Financial Disclosure



None.



Item 9A. Controls and Procedures



The Companys principal executive officer and principal financial officer evaluated the effectiveness of the Companys disclosure controls and procedures as of December 31, 2003. Based on the evaluation, the Companys
principal executive officer and principal financial officer believe that:



| |  | the Companys disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the Companys disclosure controls and procedures were effective to ensure such information was accumulated and communicated to the Companys management, including the
Companys principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Changes in Internal Controls



There have been no significant changes in the Companys internal controls or in other factors that could significantly
affect the Companys internal controls subsequent to their evaluation, nor have there been any corrective actions with regard to significant deficiencies or material weaknesses.



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PART III



ITEM 10. Directors And Executive Officers Of The Registrant



The sections under the headings Election of Directors, The Compensation Committees Report on Executive Compensation and The Audit Committees Report in the proxy statement for the annual meeting of
stockholders currently scheduled to be held in April 2004 are incorporated herein by reference.



The following table presents information with respect to our executive officers:



|                        |  |     |  |                                                
|----------------------- |  | --- |  | -----------------------------------------------
|Name                    |  | Age |  | Position                                       
|William L. Henning, Jr. |  | 50  |  | Chairman of the Board of Directors             
|Robert W. Piper         |  | 45  |  | President, Chief Executive Officer and Director
|Jerry E. Vaughn         |  | 58  |  | Chief Financial Officer                        
|Thomas G. Henning       |  | 44  |  | Secretary and General Counsel and Director     
|Michael D. Bennett      |  | 39  |  | Senior Vice President Sales and Distribution   
|Paul Clifton            |  | 49  |  | Chief Technical Officer                        



William L. Henning,
Jr. is Chairman of our Board of Directors and has been a director of US Unwired or our predecessor company since 1998. From 1988 to 2000, he was our Chief Executive Officer.



Robert W. Piper has been our President since 1995 and was named Chief Executive Officer in 2000. He served as our Chief
Operating Officer from 1995 to 2000.



Jerry E. Vaughn has
served as our Chief Financial Officer since June 1999. He has over 20 years of diversified financial management experience and focused the last 11 of these years in the telecommunications industry. From 1994 until he joined us, Mr. Vaughn was
President of NTFC Capital Corporation, a subsidiary of GE Capital. Before that, he was Treasurer of Northern Telecom Finance Corporation and Vice President of Mellon Bank Corporation.



Thomas G. Henning has been General Counsel and Secretary since 1994.



Michael D. Bennett served as Vice President and Chief Operating Officer from
August 2001 to April 2002 and currently serves as Senior Vice President Sales and Distribution. He served as our Vice President-Southern Sales and Operations from April 2002 to December 2002 and was Vice President and General Manager of Wireless
Operations from his date of hire in January 2000 until his promotion in August 2001. He has 16 years of telecommunications experience and during the balance of the last five years held various positions with PrimeCo, a telecommunication company,
including area director and sales and marketing director in Jacksonville, Florida, and director of strategy and planning in Dallas, Texas. He has also worked in various management positions with two other telecommunication companies, U.S. Intelco
Networks in Olympia, Washington and CenturyTel, Inc. in Monroe, Louisiana.



Paul J. Clifton has served as our Vice President and Chief Technical Officer since November 2001. He was Vice President of Research and Development since 1998. From 1994 to 1998, he was our Vice President for
Engineering and Technical Services. From his hire in 1988 to 1994, he served us in various capacities such as manager of network systems and traffic manager.



Code of Ethics



US Unwired Inc. has adopted a code of ethics that applies to its President and Chief Executive Officer (principal executive officer), Chief Financial
Officer (principal financial officer) and Controller (Principal Accounting Officer). This code of ethics, which is entitled Standards of Business, is posted at US Unwireds



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website, www.usunwired.com. We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a
provision of this code of ethics by posting such information on our website, a the address, and location previously specified.



The Board of Directors of US Unwired has determined that Thomas J. Sullivan, Chairman of the Audit Committee, meets the definition of Audit
Committee Financial Expert within the meaning of that term as defined by the SEC, and that he is otherwise independent within the meaning of applicable rules of the NASDAQ National Market System.



Item 11. Executive Compensation



The section Executive Compensation of the proxy statement is incorporated herein by reference.



Item 12. Security Ownership Of Certain Beneficial Owners And Management



The section Stock Ownership of Directors and Officers and Stock Ownership of Certain Beneficial Owners of the proxy statement is incorporated herein by
reference.



Item 13. Certain Relationships And Related Transactions



The section Certain Transactions of the proxy statement is incorporated herein by reference.



Item 14. Principal Accounting Fees and Services



The section Principal Accounting Fees and Services of the proxy statement is incorporated herein by reference.



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##### Table of Contents

PART IV



Item 15. Exhibits, Financial Statements, Schedules, And Reports on Form 8-K



a. Financial Statements



Listed in the Index to Consolidated Financial Statements provided in response to Item 8 hereof (see page F-1 for Index).



b. Financial Statement schedule



Listed in the Index to Financial Statements provide in response to item 8
hereof (see page F-1 for Index).



All other schedules for which
provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.



c. Reports on Form 8-K



On October 10, 2003, we filed a Current Report on Form 8-K to include a
presentation that US Unwired Inc. management gave on September 24, 2003.



On October 31, 2003, we filed a Current Report on Form 8-K containing a press release announcing that the Company had reached agreement with its senior credit lenders to modify certain provisions of the US Unwired
$130 million senior bank credit facility.



On November 10,
2003, we filed a Current Report on Form 8-K containing a press release announcing the Companys earnings for the fiscal quarter ended September 30, 2003



d. Exhibits



|               |  |                                                                                                                                                                                                                                                                                                                                                                              |  |                            
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                       |  | Sequentially Numbered Pages
|3.1            |  | Third Restated Articles of Incorporation of US Unwired Inc. (Incorporated by reference to Exhibit 3.1 of Form 10-Q filed by the Registrant on May 9, 2002)                                                                                                                                                                                                                   |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                             
|3.2            |  | By-Laws of US Unwired Inc. as amended on April 29, 2003. (Incorporated by reference to Exhibit 4.i.a filed with the registrants Quarterly Report on Form 10-Q filed by the Registrant on
November 13, 2002)                                                                                                                                                                 |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                             
|4.1            |  | Indenture dated as of October 29, 1999 among US Unwired Inc., the Guarantors (as defined therein) and State Street Bank and Trust Company. (Incorporated by reference to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc.,
Louisiana Unwired, LLC and Unwired Telecom Corp. on December 7, 1999) |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                             
|4.2            |  | Pledge and Security Agreement dated as of October 29, 1999 by and between Louisiana Unwired LLC and State Street Bank and Trust Company. (Incorporated by reference to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc.,
Louisiana Unwired, LLC and Unwired Telecom Corp. on December 7, 1999)   |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                             
|4.3            |  | Supplemental Indenture dated as of March 11, 2002, among Georgia PCS Management, LLC and Georgia PCS Leasing, LLC, both Georgia limited liability
companies and                                                                                                                                                                                                              |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                            
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Sequentially Numbered Pages
|               |  | subsidiaries of US Unwired Inc., the other Guarantors and State Street Bank and Trust Company, as trustee under the indenture. (Incorporated by reference to Exhibit 4.i.d. of Form 10-Q filed
by the Registrant on August 14, 2002)                                                                                                                                                                                                                                                                                                                                                         |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.4            |  | Amended and Restated Credit Agreement dated March 8, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit 4.1 of Form 8-K filed by the Registrant on March 21,
2002)                                                                                                                                                                                                                                                                                                                                                                                              |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.5            |  | Third Amendment to Credit Agreement dated October 30, 2003 between US Unwired, Inc. and lenders. (Incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Registrant on October 31,
2003)                                                                                                                                                                                                                                                                                                                                                                                         |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.6            |  | Waiver and Amendment dated May 1, 2002 to the Amended and Restated Agreement Credit Agreement dated March 8, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit
4.i.b. of Form 10-Q filed by the Registrant on August 14, 2002)                                                                                                                                                                                                                                                                                                                                 |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.7            |  | Second Agreement Regarding Amendments to Loan Documents dated March 8, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit 4.i.c. of Form 10-Q filed by the
Registrant on May 9, 2002)                                                                                                                                                                                                                                                                                                                                                                           |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.8            |  | Intercreditor Agreement dated as of October 29, 1999 between CoBank, ACB and State Street Bank and Trust Company. (Incorporated by reference to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and
Unwired Telecom Corp. on December 7, 1999)                                                                                                                                                                                                                                          |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.9            |  | Indenture, dated as of February 2, 2001, among IWO Holdings, Inc., Independent Wireless One Corporation and Firstar Bank, N.A., as trustee for the Senior Notes (Incorporated by reference to
Exhibit 4.9 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                                                                                                                                                                                                                                                                       |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.10           |  | Credit Agreement, dated as of December 20, 1999, among Independent Wireless One Corporation, as borrower, the lenders thereto from time to time,
Chase Securities Inc., as book manager and lead arranger, First Union National Bank and BNP Paribas (as successor in interest to Paribas), as senior
managing agents, UBS AG, Stamford Branch, as documentation agent, and The Chase Manhattan Bank, as administrative agent (Incorporated by reference to Exhibit 4.10 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                        |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.11           |  | Amendment No. 1, dated as of June 30, 2000, to the Credit Agreement, dated as of December 20, 1999, among Independent Wireless One Corporation, as borrower, the lenders thereto from time to
time, Chase Securities Inc., as book manager and lead arranger, First Union National Bank and BNP Paribas (as successor in interest to Paribas), as senior managing agents, UBS AG, Stamford Branch, as documentation agent, and The Chase Manhattan
Bank, as administrative agent. (Incorporated by reference to Exhibit 4.11 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)    |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4.12           |  | Amendment No. 2, dated as of December 8, 2000, to the Credit Agreement, dated as of December 20, 1999, among Independent Wireless One Corporation, as borrower, the lenders thereto from time
to time, Chase Securities Inc., as book manager and lead arranger, First Union National Bank and BNP Paribas (as successor in interest to Paribas), as senior managing agents, UBS AG, Stamford Branch, as documentation agent, and The Chase Manhattan
Bank, as administrative agent. (Incorporated by reference to Exhibit 4.12 of the Form 10-K filed by US Unwired Inc. on March 31, 2002) |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                            
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | Sequentially Numbered Pages
|4.13           |  | Registration Rights Agreement dated as of October 29, 1999 between US Unwired Inc. and The 1818 Fund, LP. (Incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-4,
Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on December 7, 1999).                                                                                                                                                                                                                                                                                                                                                              |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.14           |  | First Amendment to Registration Rights Agreement dated as of February 15, 2000 by and among US Unwired Inc., The 1818 Fund III, L.P., TCW Leveraged Income Trust, L.P., TCW Leveraged Income
Trust II, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown University Third Century Fund
(Incorporated by reference to Exhibit 10.19 to Amendment No. 2 to the Registration Statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on
February 23, 2000). |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.15           |  | Second Amendment to Registration Rights Agreement dated as of June 9, 2000 by and among US Unwired Inc., The 1818 Fund III, L.P., TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust
II, L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown University Third Century
Fund.                                                                                                                                                                                                                                                                            |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.16           |  | Shareholders Agreement dated as of October 29, 1999 by and among US Unwired Inc., The 1818 Fund III, L.P. and the shareholders of US Unwired Inc. who are signatories thereto. (Incorporated by
reference to Exhibit 10.8 to the Registration Statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on December 7, 1999).                                                                                                                                                                                                                                                                                         |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.17           |  | First Amendment to Shareholders Agreement dated as of February 15, 2000 by and among US Unwired Inc., The 1818 Fund III, L.P., TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust II,
L.P., TCW Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown University Third Century Fund. (Incorporated
by reference to Exhibit 10.18 to Amendment No. 2 to the Registration Statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on February 23,
2000).       |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4.18           |  | Second Amendment to Shareholders Agreement dated as of May 16, 2000 among US Unwired Inc., The 1818 Fund III, L.P., TCW Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P., TCW
Shared Opportunity Fund II, L.P., TCW Shared Opportunity Fund IIB, LLC, TCW Shared Opportunity Fund III, L.P., TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine Partners II, L.P. and Brown University Third Century Fund, and the shareholders of
US Unwired Inc. named therein. (Incorporated by reference to Exhibit 10.29 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-1, Registration Nos. 333-33964 filed by US Unwired Inc. on May 18, 2000).                                   |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                            
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | Sequentially Numbered Pages
|4.19           |  | Registration Rights Agreement, dated April 1, 2002, by and among the Registrant, and Investcorp IWO Limited Partnership, Ballet Limited, Denary Limited, Gleam Limited, Highlands Limited,Noble
Limited, Outrigger Limited, Quill Limited, Radial Limited, Shoreline Limited, Zinnia Limited, Investcorp Investment Equity Limited, Alloway Limited, Carrigan Limited, Frankfort Limited,Paugus Limited, Wireless International Limited, Wireless Equity
Limited, Wireless Holdings Limited, Wireless Investments Limited, IWO Equity Limited, IWO Investments Limited, Cellular Equity Limited, Mobile Holdings Limited, Wireless IIP Limited, Equity IWO Limited, New IWO Equity Limited, New Wireless IIP
Limited, New Equity IWO Limited, Odyssey Investment Partners Fund, LP, Odyssey Coinvestors, LLC, Paribas North America Inc., TCW/Crescent Mezzanine Trust II, TCW/Crescent Mezzanine Partners II, LP, TCW/Crescent Leveraged Income Trust, LP,
TCW/Crescent Leveraged Income Trust II, LP, TCW/Crescent Leveraged Income Trust IV, LP, Solon Kandel, J.K. Hage III, Steven Nielsen, Delhi PCS Inc., Dry Brook Holdings LLC, MTC North Inc., Newport PCS Inc., Finger Lakes Technologies Group Inc.,
Adirondack Capital LLC, Cerberus Investments LP, Charles Lane, William L. Henning, Sr., Lena B. Henning, William L. Henning, Jr., John A. Henning, and Thomas G. Henning. (Incorporated by reference to Exhibit 4(i)(e) filed with the Registrants
Quarterly Report on Form 10-Q on August 13, 2002). |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.20           |  | Agreement and Plan of Merger, dated as of February 8, 2002 by and among US Unwired Inc., Saints Sub, LLC and Georgia PCS Management, LLC. (Incorporated by reference to Exhibit 2.1 filed with
US Unwired Inc.s Amendment to Current Report on Form 8-K filed on March 22, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.21           |  | Warrant Agreement dated as of February 2, 2001 by and among IWO Holdings, Inc., a Delaware corporation and Firstar Bank, N.A. as warrant agent (Incorporated by reference to Exhibit 10.20
filed with the registration statement on Form S-4, filed by IWO Holdings, Inc. and Independent Wireless One Corporation on April 13, 2001, Registration no. 333-58902).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.22           |  | Warrant Registration Rights Agreement, dated as of February 2, 2001, among IWO Holdings, Inc. and Credit Suisse First Boston Corporation (acting
through an affiliate, Donaldson, Lufkin & Jenrette Securities Corporation), Chase Securities Inc., BNP Paribas Securities Corp. and UBS Warburg LLC as
representatives of the initial purchasers of IWO Holdings, Inc.s senior notes and warrants. (Incorporated by reference to Exhibit 4.19 of the Form 10-K filed by US Unwired Inc. on March 31, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.23           |  | Form of Standstill Agreement, dated as of December 19, 2001, by and among the Registrant and Ballet Limited, Denary Limited, Gleam Limited, Highlands Limited, Noble Limited, Outrigger
Limited, Quill Limited, Radial Limited, Shoreline Limited, Zinnia Limited, Investcorp Investment Equity Limited, Investcorp IWO Limited Partnership, Alloway Limited, Carrigan Limited, Frankfort Limited, Paugus Limited, Wireless International
Limited, Wireless Equity Limited, Wireless Holdings Limited, Wireless Investments Limited, IWO Equity Limited, IWO Investments Limited, Cellular Equity Limited, Mobile Holdings Limited, Wireless IIP Limited, Equity IWO Limited, New IWO Equity
Limited, New Wireless IIP Limited, and New Equity IWO Limited. (Incorporated by reference to Exhibit 10.6 filed with the Registration Statement on Form S-4 filed by the Registrant on February 1, 2002, registration no. 333-81928.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                            
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Sequentially Numbered Pages
|10.1           |  | Sprint PCS Management Agreement dated February 8, 1999 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired LLC,
including Sprint Trademark and Service Mark License Agreement and Sprint Spectrum Trademark and Service Mark License Agreement. (Incorporated by reference to Amendment No. 3 to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana
Unwired, LLC and Unwired Telecom Corp. on March 1, 2000). |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.2           |  | Addendum I to Sprint PCS Management Agreement dated February 8, 1999 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired (Incorporated by reference to Exhibit 10.4 of the Registration statement on S-4/A, Registration Nos. 333-9271, 333-92271-01, and
33392271-02, filed by US Unwired Inc. on March 1, 2000)                                                                                                                                                                                  |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.3           |  | Addendum II to Sprint PCS Management Agreement dated February 8, 1999 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired (Incorporated by reference to Exhibit 10.4 of the Registration statement on S-4/A, Registration Nos. 333-9271, 333-92271-01, and
33392271-02, filed by US Unwired Inc. on March 1, 2000)                                                                                                                                                                                 |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.4           |  | Addendum III to Sprint PCS Management Agreement dated February 8, 1999 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired (Confidential treatment requested pursuant to Rule 406 under the Securities Act).                                                                                                                                                                                                                                                                                       |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.5           |  | Sprint PCS Management Agreement dated June 8, 1998 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired LLC, including Sprint Trademark and Service Mark License
Agreement and Sprint Spectrum Trademark and Service Mark License Agreement. (Incorporated by reference to Amendment No. 3 to the Registration statement on
Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on March 1, 2000).     |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.6           |  | Addendum II, III and IV to Sprint PCS Management Agreement dated June 8, 1998 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired LLC (Incorporated by
reference to Exhibit 10.5 of the Registration statement on S-4/A, Registration Nos. 333-9271, 333-92271-01, and 33392271-02, filed by US Unwired Inc. on March 1, 2000)                                                                                                                                                                     |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.7           |  | Addendum V to Sprint PCS Management Agreement dated June 8, 1998 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Louisiana Unwired (Incorporated by reference to Exhibit 10.15 of the Form 10-K filed by US Unwired Inc. on March 26, 2001)                                                                                                                                                                                                                                                                      |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.8           |  | Sprint PCS Management Agreement dated as of January 7, 2000 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Texas Unwired, including Sprint Trademark and Service Mark License Agreement
and Sprint Spectrum Trademark and Service Mark License Agreement. (Incorporated by reference to Amendment No. 3 to the Registration statement on Form S-4,
Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on March 1, 2000).    |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                            
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Sequentially Numbered Pages
|10.9           |  | Addendum I to Sprint PCS Management Agreement dated as of January 7, 2000 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Texas Unwired (Incorporated by reference to Exhibit
10.20 of the Registration statement on S-4/A, Registration Nos. 333-9271, 333-92271-01, and 33392271-02, filed by US Unwired Inc. on March 1, 2000)                                                                                                                                  |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.10          |  | Addendum II to Sprint PCS Management Agreement dated January 7, 2000 among Wirelessco, L.P., Sprint Spectrum L.P., SprintCom, Inc. and Texas Unwired, L.P. (Incorporated by reference to Exhibit 10.15 of the Form 10-K filed by US Unwired Inc. on March 26, 2001)                                                                                                                                                                                                                  |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.11          |  | Amended and Restated Consent and Agreement dated as of March 8, 2002 between Sprint Spectrum L.P., SprintCom, Inc., Sprint Communications Company, L.P., Wirelessco, L.P. and CoBank, ACB.
(Incorporated by reference to Exhibit 10.11 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                                                                                                                                  |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.12          |  | Sprint PCS Management Agreement, dated as of February 9, 1999, among Independent Wireless One Corporation, Sprint Spectrum L.P. and WirelessCo, L.P., as amended by Addendum I, Addendum II and
Addendum III including Sprint Trademark and Service Mark License Agreement, Sprint Spectrum Trademark and Service Mark License Agreement and Sprint PCS Services Agreement. (Incorporated by reference to Exhibit 10.12 of the Form 10-K filed by US
Unwired Inc. on March 31, 2002) |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.13          |  | Consent and Agreement, dated as of December 17, 1999, between Sprint Spectrum L.P., Sprint Communications Company, L.P., WirelessCo, L.P. and The Chase Manhattan Bank, as administrative
agent. (Incorporated by reference to Exhibit 10.13 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                                                                                                                            |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.14          |  | Sprint PCS Management Agreement, dated as of June 8, 1998 among Georgia PCS Management LLC, Sprint Spectrum L.P. and SprintCom, Inc., including
Sprint Trademark and Service Mark License Agreement, Sprint Spectrum Trademark and Service Mark License Agreement and Sprint PCS Services Agreement. (Incorporated by reference to Exhibit 10.14 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                        |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.15          |  | Addendum II to Sprint PCS Management Agreement dated October 10, 2000 among among Georgia PCS Management LLC, Sprint Spectrum L.P. and SprintCom, Inc. (Incorporated by reference to Exhibit 10.15 of the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                                                                                                                                                                      |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.16          |  | Amended and Restated US Unwired Inc. 1999 Equity Incentive Plan. (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                                                                                                                                |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.17          |  | Employment contract between US Unwired Inc. and William L. Henning, Jr. (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                                                                                                                         |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.18          |  | Employment contract between US Unwired Inc. and Robert W. Piper (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                                                                                                                                 |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.19          |  | Employment contract between US Unwired Inc. and Thomas G. Henning (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                                                                                                                               |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.20          |  | Employment contract between US Unwired Inc. and Jerry E. Vaughn (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                                                                                                                                 |  |                            



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|               |  |                                                                                                                                                                                                                                                                                                                                                                                    |  |                            
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                             |  | Sequentially Numbered Pages
|10.21          |  | Employment Agreement between US Unwired Inc. and Michael D. Bennett (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                           |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.22          |  | Amendment to Employee Agreement between US Unwired Inc. and Michael D. Bennett (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                                                |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.23          |  | Second Amendment to Employee Agreement between US Unwired Inc. and Michael D. Bennett. (Incorporated by reference to Exhibit 10.30 of the Form 10-K filed by US Unwired Inc. on March 31,
2002)                                                                                                                                                                                    |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.24          |  | U.S. Unwired, Inc. Key Employee Retention Plan dated April 1, 2003                                                                                                                                                                                                                                                                                                                 |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.31          |  | Management and Construction Agreement dated as of January 1, 1999 by and Between US Unwired Inc. and Louisiana Unwired LLC. (Incorporated by reference to Amendment No. 2 to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US
Unwired Inc., Louisiana Unwired, LLC and Unwired Telecom Corp. on February 23, 2000). |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.32          |  | Billing Agreement dated as of May 13, 1998 by and between Unibill Inc. and Louisiana Unwired LLC. (Incorporated by reference to Amendment No. 2 to the Registration statement on Form S-4, Registration Nos. 333-92271, 333-92271-01 and 333-92271-02, filed by US Unwired Inc., Louisiana Unwired,
LLC and Unwired Telecom Corp. on February 23, 2000).                           |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.33          |  | Billing Agreement dated as of May 13, 1998 by and between Unibill Inc. and Unwired Telecom Corporation. (Incorporated by reference to Form 10-K of US Unwired Inc. filed on March 26, 2001).                                                                                                                                                                                       |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.36          |  | Office lease dated October 1, 2000 between US Unwired Inc. and Xspedius Holding Corp. (Incorporated by reference to Exhibit 10.36 of the Form 10-K filed by US Unwired Inc. on March 31,
2002)                                                                                                                                                                                     |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|10.37          |  | Office and warehouse lease dated March 1, 1998 and First Amendment to Office Lease dated July 1, 2001 between US Unwired Inc. and Unibill Inc. (Incorporated by reference to Exhibit 10.37 of
the Form 10-K filed by US Unwired Inc. on March 31, 2002)                                                                                                                            |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|21.1           |  | Subsidiaries of US Unwired Inc.                                                                                                                                                                                                                                                                                                                                                    |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|23.1           |  | Consent of Ernst & Young LLP                                                                                                                                                                                                                                                                                                                                                       |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|31.1           |  | Certification by President and Chief Executive Officer                                                                                                                                                                                                                                                                                                                             |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|31.2           |  | Certification by Chief Financial Officer                                                                                                                                                                                                                                                                                                                                           |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|32.1           |  | Certification by President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                   |  |                            
|               |  |                                                                                                                                                                                                                                                                                                                                                                                   
|32.2           |  | Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                 |  |                            



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SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 27, 2004.



US Unwired Inc.By:

/s/    JERRY
E.VAUGHNName: Jerry E. VaughnTitle: Chief Financial Officer




Pursuant to the
requirements of the Securities Act of 1934, this report has been signed on behalf of the registrant and in the capacities and on the date indicated:



|                                                                        |  |                                                                              
|----------------------------------------------------------------------- |  | -----------------------------------------------------------------------------
|Signature                                                               |  | Title                                                                        
|                                                                        | 
|/s/    ROBERT W.
PIPERRobert W. Piper
February 27, 2004                 |  | President, Chief Executive Officer and Director (Principal Executive Officer)
|                                                                        | 
|/s/    JERRY E.
VAUGHNJerry E. Vaughn
February 27, 2004                 |  | Chief Financial Officer (Principal Financial Officer)                        
|                                                                        | 
|/s/    DONALD
LOVERICHDonald
Loverich February 27, 2004                 |  | Corporate Controller (Principal Accounting Officer)                          
|                                                                        | 
|/s/    WILLIAM L. HENNING,
JR.William L. Henning,
Jr. February 27, 2004 |  | Chairman of the Board of Directors                                           
|                                                                        | 
|/s/    THOMAS G.
HENNINGThomas G.
Henning February 27, 2004             |  | Director                                                                     
|                                                                        | 
|/s/    CHRISTOPHER J.
STADLERChristopher J.
Stadler February 27, 2004   |  | Director                                                                     
|                                                                        | 
|/s/    LAWRENCE C.
TUCKERLawrence C.
Tucker February 27, 2004           |  | Director                                                                     
|                                                                        | 
|/s/    HENRY P. HEBERT,
JR.Henry P. Hebert,
Jr. February 27, 2004       |  | Director                                                                     
|                                                                        | 
|/s/    THOMAS J.
SULLIVANThomas J.
Sullivan February 27, 2004           |  | Director                                                                     
|                                                                        | 
|/s/    HARLEY M.
RUPPERTHarley M.
Ruppert February 27, 2004             |  | Director                                                                     



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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND

FINANCIAL STATEMENT SCHEDULES



|                                                                            |  |     
|--------------------------------------------------------------------------- |  | ----
|                                                                            |  | Page
|Report of independent auditors                                              |  | F-2 
|Consolidated balance sheets at December 2003 and 2002.                      |  | F-3 
|For each of the three years in the period ended December 31, 2003:          |  |     
|Consolidated statements of operations                                       |  | F-4 
|Consolidated statements of stockholders equity (deficit)                   |  | F-5 
|Consolidated statements of cash flows                                       |  | F-6 
|Notes to consolidated financial statements                                  |  | F-7 
|Schedule for each of the three years in the period ended December 31, 2003: |  |     
|II  Valuation and qualifying accounts and reserves                         |  | S-1 



F-1



---

##### Table of Contents

REPORT OF INDEPENDENT AUDITORS



Board of Directors

US Unwired Inc.



We have audited the accompanying consolidated balance sheets of US Unwired Inc. as of December 31, 2003 and 2002, and the related consolidated statements
of operations, stockholders equity (deficit), and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the index at Item 15(b). These financial
statements and schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.



We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of US Unwired Inc. at December 31, 2003 and 2002, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.



As discussed in Note 3 to the consolidated financial statements, effective January 1, 2002, the Company changed its method of accounting for goodwill.



/s/    ERNST & YOUNG
LLP



Houston, Texas

February 6, 2004



F-2



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)



|                                                                                    |  |                    |          |   |      |   |          |  
|----------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ---- | - | -------- | -
|                                                                                    |  | As of December 31, |         
|                                                                                    |  | 2003               |          |   | 2002 |  
|ASSETS                                                                              |  |                    |          |   |      |   |          |  
|Current Assets:                                                                     |  |                    |          |   |      |   |          |  
|Cash and cash equivalents                                                           |  | $                  | 97,193   |   |      | $ | 61,985   |  
|Restricted cash and US Treasury securities at amortized cost  held to maturity     |  |                    | 19,358   |   |      |   | 33,218   |  
|Subscriber receivables, net of allowance for doubtful accounts of $6,418 and $6,981 |  |                    | 28,687   |   |      |   | 46,706   |  
|Other receivables                                                                   |  |                    | 2,625    |   |      |   | 2,660    |  
|Inventory                                                                           |  |                    | 5,615    |   |      |   | 5,216    |  
|Prepaid expenses                                                                    |  |                    | 14,833   |   |      |   | 15,014   |  
|Receivables from related parties                                                    |  |                    | 647      |   |      |   | 681      |  
|Receivables from officers                                                           |  |                    | 85       |   |      |   | 101      |  
|Current assets related to discontinued operations                                   |  |                    | 1,049    |   |      |   | 1,184    |  
|                                                                                    |  |                    |          |   |      |   |          |  
|Total current assets                                                                |  |                    | 170,092  |   |      |   | 166,765  |  
|                                                                                    |  |                   
|Property and equipment, net                                                         |  |                    | 411,518  |   |      |   | 476,941  |  
|Restricted cash                                                                     |  |                    |         |   |      |   | 8,000    |  
|Goodwill                                                                            |  |                    | 46,705   |   |      |   | 51,961   |  
|Intangible assets, net                                                              |  |                    | 40,785   |   |      |   | 78,292   |  
|Note receivable from unconsolidated affiliate                                       |  |                    | 1,887    |   |      |   | 1,811    |  
|Other assets                                                                        |  |                    | 42,571   |   |      |   | 40,479   |  
|Non-current assets related to discontinued operations                               |  |                    | 4,770    |   |      |   | 7,181    |  
|                                                                                    |  |                    |          |   |      |   |          |  
|Total assets                                                                        |  | $                  | 718,328  |   |      | $ | 831,430  |  
|                                                                                    |  |                    |          |   |      |   |          |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                               |  |                    |          |   |      |   |          |  
|Current liabilities:                                                                |  |                    |          |   |      |   |          |  
|Accounts payable                                                                    |  | $                  | 41,377   |   |      | $ | 28,301   |  
|Accrued expenses                                                                    |  |                    | 77,137   |   |      |   | 67,624   |  
|Current maturities of long-term debt, including IWO debt in default                 |  |                    | 362,842  |   |      |   | 5,018    |  
|Current liabilities related to discontinued operations                              |  |                    | 49       |   |      |   | 41       |  
|                                                                                    |  |                    |          |   |      |   |          |  
|Total current liabilities                                                           |  |                    | 481,405  |   |      |   | 100,984  |  
|Long-term debt, net of current maturities                                           |  |                    | 434,745  |   |      |   | 762,202  |  
|Deferred gain                                                                       |  |                    | 30,729   |   |      |   | 34,474   |  
|Investments in and advances to unconsolidated affiliates                            |  |                    | 1,216    |   |      |   | 3,901    |  
|Non-current liabilities related to discontinued operations                          |  |                    |         |   |      |   | 107      |  
|Stockholders deficit:                                                              |  |                    |          |   |      |   |          |  
|Common stock, $0.01 par value:                                                      |  |                    |          |   |      |   |          |  
|Authorized 800,000 shares; issued and outstanding 128,832 shares in 2003 and 2002   |  |                    | 1,288    |   |      |   | 1,288    |  
|Additional paid-in capital                                                          |  |                    | 654,899  |   |      |   | 657,459  |  
|Retained deficit                                                                    |  |                    | (885,765 | ) |      |   | (728,811 | )
|Promissory note                                                                     |  |                    | (179     | ) |      |   | (174     | )
|Treasury stock                                                                      |  |                    | (10      | ) |      |   |         |  
|                                                                                    |  |                    |          |   |      |   |          |  
|Total stockholders deficit                                                         |  |                    | (229,767 | ) |      |   | (70,238  | )
|                                                                                    |  |                    |          |   |      |   |          |  
|Total liabilities and stockholders deficit                                         |  | $                  | 718,328  |   |      | $ | 831,430  |  
|                                                                                    |  |                    |          |   |      |   |          |  



See accompanying notes



F-3



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|----------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---- | - | --------- | ---- |  | - | -------- | -
|                                                                                                |  | Years Ended December 31, |         
|                                                                                                |  | 2003                     |          |   | 2002 |   |           | 2001 | 
|Revenues:                                                                                       |  |                          |          |   |      |   |           |      |  |   |          |  
|Service revenues:                                                                               |  |                          |          |   |      |   |           |      |  |   |          |  
|Subscriber                                                                                      |  | $                        | 381,558  |   |      | $ | 315,256   |      |  | $ | 128,872  |  
|Roaming                                                                                         |  |                          | 128,553  |   |      |   | 175,929   |      |  |   | 80,724   |  
|Merchandise sales                                                                               |  |                          | 23,224   |   |      |   | 17,915    |      |  |   | 15,674   |  
|Management fees                                                                                 |  |                          | 14       |   |      |   | 253       |      |  |   | 3,245    |  
|Other revenue                                                                                   |  |                          | 2,402    |   |      |   | 2,211     |      |  |   | 1,705    |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Total revenues                                                                                  |  |                          | 535,751  |   |      |   | 511,564   |      |  |   | 230,220  |  
|Operating expenses:                                                                             |  |                          |          |   |      |   |           |      |  |   |          |  
|Cost of services                                                                                |  |                          | 210,883  |   |      |   | 234,679   |      |  |   | 109,005  |  
|Merchandise cost of sales                                                                       |  |                          | 46,367   |   |      |   | 36,106    |      |  |   | 29,514   |  
|General and administrative                                                                      |  |                          | 130,526  |   |      |   | 141,453   |      |  |   | 50,827   |  
|Sales and marketing                                                                             |  |                          | 86,403   |   |      |   | 103,469   |      |  |   | 67,322   |  
|Non-cash stock compensation                                                                     |  |                          | 2,404    |   |      |   | 4,349     |      |  |   | 4,567    |  
|Depreciation and amortization                                                                   |  |                          | 119,188  |   |      |   | 108,539   |      |  |   | 52,563   |  
|IWO asset abandonment charge                                                                    |  |                          | 12,079   |   |      |   |          |      |  |   |         |  
|Impairment of goodwill                                                                          |  |                          |         |   |      |   | 214,191   |      |  |   |         |  
|Impairment of intangible assets                                                                 |  |                          |         |   |      |   | 188,330   |      |  |   |         |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Total operating expenses                                                                        |  |                          | 607,850  |   |      |   | 1,031,116 |      |  |   | 313,798  |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Operating loss                                                                                  |  |                          | (72,099  | ) |      |   | (519,552  | )    |  |   | (83,578  | )
|Other (expense) income:                                                                         |  |                          |          |   |      |   |           |      |  |   |          |  
|Interest expense                                                                                |  |                          | (92,455  | ) |      |   | (74,197   | )    |  |   | (39,353  | )
|Interest income                                                                                 |  |                          | 1,640    |   |      |   | 2,866     |      |  |   | 6,609    |  
|Gain on sale of assets                                                                          |  |                          | 12       |   |      |   | 3         |      |  |   | 9,269    |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Total other expense                                                                             |  |                          | (90,803  | ) |      |   | (71,328   | )    |  |   | (23,475  | )
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Loss from continuing operations before income taxes and equity in income (losses) of affiliates |  |                          | (162,902 | ) |      |   | (590,880  | )    |  |   | (107,053 | )
|Income tax benefit                                                                              |  |                          | (531     | ) |      |   | (781      | )    |  |   | (1,868   | )
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Loss from continuing operations before equity in income (losses) of affiliates                  |  |                          | (162,371 | ) |      |   | (590,099  | )    |  |   | (105,185 | )
|Equity in income (losses) of affiliates                                                         |  |                          | 2,911    |   |      |   | (651      | )    |  |   | (2,760   | )
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Loss from continuing operations                                                                 |  |                          | (159,460 | ) |      |   | (590,750  | )    |  |   | (107,945 | )
|                                                                                                |  |                          |         
|Income from discontinued operations                                                             |  |                          | 2,506    |   |      |   | 8,272     |      |  |   | 10,334   |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Net loss                                                                                        |  | $                        | (156,954 | ) |      | $ | (582,478  | )    |  | $ | (97,611  | )
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Basic and diluted (loss) earnings per common share:                                             |  |                          |          |   |      |   |           |      |  |   |          |  
|Continuing operations                                                                           |  | $                        | (1.24    | ) |      | $ | (5.00     | )    |  | $ | (1.29    | )
|Discontinued operations                                                                         |  |                          | .02      |   |      |   | .07       |      |  |   | .12      |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Net loss per common share                                                                       |  | $                        | (1.22    | ) |      | $ | (4.93     | )    |  | $ | (1.17    | )
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  
|Weighted average outstanding common shares                                                      |  |                          | 128,832  |   |      |   | 118,194   |      |  |   | 83,310   |  
|                                                                                                |  |                          |          |   |      |   |           |      |  |   |          |  



See accompanying notes



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)

(In thousands)



|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  
|-------------------------------------------------------------------- |  | -------------------- | ----- | -------------------- | - | ---- | -------------------------- |  | - | --------------------------------------------- | - |  | -------------------------- | ------ | - | --------------- | - | -------- | -------------- |  | - | ----- | - |  | - | --- | - |  | - | -------- | -
|                                                                     |  | Class A Common Stock |       | Class B Common Stock |   |      | Additional Paid-in Capital |  |   | Accumulated Other Comprehensive Income (Loss) |   |  | Retained Earnings(Deficit) |        |   | PromissoryNotes |   |          | TreasuryShares |  |   | Total |  
|Balance at December 31, 2000                                         |  | $                    | 129   |                      | $ | 661  |                            |  | $ | 147,870                                       |   |  | $                          | 1,276  |   |                 | $ | (49,882  | )              |  | $ |      |   |  | $ |    |   |  | $ | 100,054  |  
|Exercise of stock options                                            |  |                      | 4     |                      |   |     |                            |  |   | 1,752                                         |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 1,756    |  
|Stock compensation                                                   |  |                      |      |                      |   |     |                            |  |   | 4,893                                         |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 4,893    |  
|Purchase of minority interests                                       |  |                      | 50    |                      |   |     |                            |  |   | 30,612                                        |   |  |                            |       |   |                 |   | 1,160    |                |  |   |      |   |  |   |    |   |  |   | 31,822   |  
|Conversion of class B common stock to class A common stock           |  |                      | 95    |                      |   | (95  | )                          |  |   |                                              |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   |         |  
|Change in unrealized gain on marketable securities                   |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            | (1,276 | ) |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | (1,276   | )
|Net loss                                                             |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   | (97,611  | )              |  |   |      |   |  |   |    |   |  |   | (97,611  | )
|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  
|Comprehensive loss                                                   |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | (98,887  | )
|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  
|Balance at December 31, 2001                                         |  |                      | 278   |                      |   | 566  |                            |  |   | 185,127                                       |   |  |                            |       |   |                 |   | (146,333 | )              |  |   |      |   |  |   |    |   |  |   | 39,638   |  
|Issuance of common stock in merger with Georgia PCS Management, LLC  |  |                      | 54    |                      |   |     |                            |  |   | 28,337                                        |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 28,391   |  
|Issuance of common stock in merger with IWO Holdings, Inc.           |  |                      | 389   |                      |   |     |                            |  |   | 389,438                                       |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 389,827  |  
|Exercise of stock options                                            |  |                      | 1     |                      |   |     |                            |  |   | 281                                           |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 282      |  
|Stock compensation                                                   |  |                      |      |                      |   |     |                            |  |   | 4,672                                         |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 4,672    |  
|Stock options and warrants assumed in merger with IWO Holdings, Inc. |  |                      |      |                      |   |     |                            |  |   | 49,410                                        |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 49,410   |  
|Conversion of class B common stock to class A common stock           |  |                      | 566   |                      |   | (566 | )                          |  |   |                                              |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   |         |  
|Promissory notes assumed from the merger with IWO Holdings, Inc.     |  |                      |      |                      |   |     |                            |  |   | 194                                           |   |  |                            |       |   |                 |   |         |                |  |   | (194  | ) |  |   |    |   |  |   |         |  
|Payment received on promissory notes                                 |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   |         |                |  |   | 20    |   |  |   |    |   |  |   | 20       |  
|Net loss                                                             |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   | (582,478 | )              |  |   |      |   |  |   |    |   |  |   | (582,478 | )
|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  
|Balance at December 31, 2002                                         |  |                      | 1,288 |                      |   |     |                            |  |   | 657,459                                       |   |  |                            |       |   |                 |   | (728,811 | )              |  |   | (174  | ) |  |   |    |   |  |   | (70,238  | )
|Change in promissory note balance                                    |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   |         |                |  |   | (5    | ) |  |   |    |   |  |   | (5       | )
|Forfeiture of Georgia PCS Management, LLC shares held in escrow      |  |                      |      |                      |   |     |                            |  |   | (5,250                                        | ) |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   | (10 | ) |  |   | (5,260   | )
|Stock compensation                                                   |  |                      |      |                      |   |     |                            |  |   | 2,690                                         |   |  |                            |       |   |                 |   |         |                |  |   |      |   |  |   |    |   |  |   | 2,690    |  
|Net loss                                                             |  |                      |      |                      |   |     |                            |  |   |                                              |   |  |                            |       |   |                 |   | (156,954 | )              |  |   |      |   |  |   |    |   |  |   | (156,954 | )
|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  
|Balance at December 31, 2003                                         |  | $                    | 1,288 |                      | $ |     |                            |  | $ | 654,899                                       |   |  | $                          |       |   |                 | $ | (885,765 | )              |  | $ | (179  | ) |  | $ | (10 | ) |  | $ | (229,767 | )
|                                                                     |  |                      |       |                      |   |      |                            |  |   |                                               |   |  |                            |        |   |                 |   |          |                |  |   |       |   |  |   |     |   |  |   |          |  



See accompanying notes



F-5



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                                         |  | Years ended December 31, |         
|                                                                                                         |  | 2003                     |          |   | 2002 |   |          | 2001 | 
|Cash flows from operating activities                                                                     |  |                          |          |   |      |   |          |      |  |   |          |  
|Net loss                                                                                                 |  | $                        | (156,954 | ) |      | $ | (582,478 | )    |  | $ | (97,611  | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                |  |                          |          |   |      |   |          |      |  |   |          |  
|Depreciation and amortization                                                                            |  |                          | 125,696  |   |      |   | 115,360  |      |  |   | 55,755   |  
|Asset abandonment                                                                                        |  |                          | 12,079   |   |      |   |         |      |  |   |         |  
|Impairment of goodwill                                                                                   |  |                          |         |   |      |   | 214,191  |      |  |   |         |  
|Impairment of intangible assets                                                                          |  |                          |         |   |      |   | 188,330  |      |  |   |         |  
|Accretion of debt discount                                                                               |  |                          | 45,085   |   |      |   | 39,361   |      |  |   | 33,683   |  
|Gain on sale of assets                                                                                   |  |                          | (145     | ) |      |   | (35      | )    |  |   | (9,314   | )
|Equity in (income) losses of affiliates                                                                  |  |                          | (2,911   | ) |      |   | 651      |      |  |   | 2,760    |  
|Non-cash stock compensation                                                                              |  |                          | 2,690    |   |      |   | 4,672    |      |  |   | 4,894    |  
|Interest income on restricted cash in escrow                                                             |  |                          |         |   |      |   |         |      |  |   | (101     | )
|Discontinued operations  noncash charges and changes in operating assets and liabilities                |  |                          | 397      |   |      |   |         |      |  |   |         |  
|Changes in operating assets and liabilities, net of acquisitions, disposals and discontinued operations: |  |                          |          |   |      |   |          |      |  |   |          |  
|Subscriber receivables                                                                                   |  |                          | 18,224   |   |      |   | (4,305   | )    |  |   | (21,186  | )
|Other receivables                                                                                        |  |                          | (26      | ) |      |   | 8,345    |      |  |   | 5,092    |  
|Inventory                                                                                                |  |                          | (407     | ) |      |   | 5,485    |      |  |   | (3,174   | )
|Prepaid expenses                                                                                         |  |                          | (1,970   | ) |      |   | (2,138   | )    |  |   | (1,221   | )
|Income tax receivable                                                                                    |  |                          |         |   |      |   |         |      |  |   |         |  
|Receivables/payables  related parties                                                                   |  |                          | 27       |   |      |   | 454      |      |  |   | (398     | )
|Other assets                                                                                             |  |                          | (1,009   | ) |      |   | 6,125    |      |  |   | (3,934   | )
|Accounts payable                                                                                         |  |                          | 14,201   |   |      |   | (17,968  | )    |  |   | (100     | )
|Accrued expenses                                                                                         |  |                          | 9,580    |   |      |   | 5,091    |      |  |   | 17,727   |  
|Deferred gain                                                                                            |  |                          | (3,916   | ) |      |   | (4,491   | )    |  |   | (5,689   | )
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) operating activities                                                      |  |                          | 60,641   |   |      |   | (23,350  | )    |  |   | (22,817  | )
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash flows from investing activities                                                                     |  |                          |          |   |      |   |          |      |  |   |          |  
|Purchases of property and equipment                                                                      |  |                          | (30,486  | ) |      |   | (122,608 | )    |  |   | (106,499 | )
|Acquisition of businesses, net of cash acquired                                                          |  |                          |         |   |      |   | (61,713  | )    |  |   |         |  
|Purchases of marketable securities                                                                       |  |                          |         |   |      |   |         |      |  |   | (12,544  | )
|Proceeds from maturities and sales of marketable securities                                              |  |                          |         |   |      |   | 66,967   |      |  |   | 176,705  |  
|Proceeds from sale of assets                                                                             |  |                          | 350      |   |      |   | 10,319   |      |  |   | 45,030   |  
|Distributions from unconsolidated affiliates                                                             |  |                          | 250      |   |      |   | 792      |      |  |   | 636      |  
|Investments in unconsolidated affiliates                                                                 |  |                          |         |   |      |   | (1,491   | )    |  |   | (1,902   | )
|Purchase of licenses & subscriber base                                                                   |  |                          |         |   |      |   |         |      |  |   | (666     | )
|Proceeds from restricted cash                                                                            |  |                          | 21,859   |   |      |   | 10,449   |      |  |   | 5,753    |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) investing activities                                                      |  |                          | (8,027   | ) |      |   | (97,285  | )    |  |   | 106,513  |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash flows from financing activities                                                                     |  |                          |          |   |      |   |          |      |  |   |          |  
|Proceeds from long-term debt                                                                             |  |                          |         |   |      |   | 83,184   |      |  |   | 1,822    |  
|Principal payments on long-term debt                                                                     |  |                          | (14,718  | ) |      |   | (693     | )    |  |   | (1,673   | )
|Debt issuance cost                                                                                       |  |                          | (2,688   | ) |      |   | (762     | )    |  |   | (148     | )
|Proceeds from exercised options                                                                          |  |                          |         |   |      |   | 282      |      |  |   | 1,756    |  
|Proceeds from payment on promissory notes                                                                |  |                          |         |   |      |   | 20       |      |  |   |         |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) financing activities                                                      |  |                          | (17,406  | ) |      |   | 82,031   |      |  |   | 1,757    |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Net change in cash and cash equivalents                                                                  |  |                          | 35,208   |   |      |   | (38,604  | )    |  |   | 85,453   |  
|Cash and cash equivalents at beginning of year                                                           |  |                          | 61,985   |   |      |   | 100,589  |      |  |   | 15,136   |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash and cash equivalents at end of year                                                                 |  | $                        | 97,193   |   |      | $ | 61,985   |      |  | $ | 100,589  |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Supplemental cash flow disclosures                                                                       |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash paid for interest                                                                                   |  | $                        | 33,796   |   |      | $ | 26,162   |      |  | $ | 5,232    |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Cash paid for income taxes                                                                               |  |                          |         |   |      |   |         |      |  |   |         |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  
|Non-cash activities                                                                                      |  |                          |          |   |      |   |          |      |  |   |          |  
|Property purchases in accounts payable                                                                   |  | $                        | 1,207    |   |      | $ | 3,399    |      |  | $ | 12,681   |  
|                                                                                                         |  |                          |          |   |      |   |          |      |  |   |          |  



See accompanying notes



F-6



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2003



1. Description of Business and Summary of Significant Accounting Policies



Description of Organization



US Unwired Inc. (the Company) is principally engaged in the ownership and
operation of wireless communications systems in the Gulf States and Northeast regions of the United States. The Company is a network partner of Sprint PCS and has the exclusive right to provide digital PCS services under the Sprint and Sprint PCS
brand names within the Companys service areas.



US
Unwired is comprised of three wholly owned subsidiaries: Louisiana Unwired LLC (Louisiana Unwired), IWO Holdings, Inc. (IWO) and Unwired Telecom Corporation (Unwired Telecom). Louisiana Unwired and IWO provide PCS
telecommunication services, and Unwired Telecom provides cellular and paging telecommunications service.



On September 15, 2003, the Company executed an agreement for the sale of its cellular operations and certain PCS licenses for approximately $30.0 million
contingent upon the approval of the Companys senior lenders. On October 30, 2003, the Companys senior lenders approved the Companys plans to sale its cellular operations. On February 6, 2004, the Company consummated the sale of our
cellular operations and certain PCS licenses for approximately $30.0 million and used $6.2 million of the proceeds to partially repay its recently amended US Unwired senior bank credit facility. The Company has entered into an agreement for the sale
and leaseback of approximately 90 cell site towers expected to close in March and April 2004 for approximately $10.0. A portion of the proceeds, approximately $4.7 million, will be used to further reduce our bank debt. The accompanying consolidated
financial statements reflect the Companys cellular operations as a discontinued operation. Revenues for these discontinued operations were $14.7 million, $22.5 million, and $29.3 million for the years ended December 31, 2003, 2002, and 2001,
respectively.



Consolidation Policy



The consolidated financial statements include the accounts of US Unwired
Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.



Cash Equivalents



The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.



Inventory



Inventory consists of PCS telephones and related accessories and is carried at cost. Cost is determined by the weighted
average moving method, which approximates the first-in, first-out method.



Property and Equipment



Property and equipment
is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets as follows:



|                                            |  |        
|------------------------------------------- |  | -------
|                                            |  | Years  
|Buildings and building improvements         |  | 39     
|Leasehold improvements                      |  | 5 to 10
|Facilities and equipment                    |  | 7 to 10
|Furniture, fixtures, computers and vehicles |  | 3 to 7 



F-7



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Depreciation expense was approximately $80.9 million, $67.8 million and $43.0 million for the years
ended December 31, 2003, 2002 and 2001, respectively.



The
Company leases certain facilities and equipment under capital leases. Assets recorded under capital leases are amortized over the lives of the respective leases and such amortization is included in depreciation expense. Assets under these
obligations, totaled $6.1 million (which is net of accumulated amortization of $2.3 million) at December 31, 2003, are included in facilities and equipment.



Long Lived Assets



Prior to the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, and No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, the Company assessed long-lived assets for impairment under SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of.
SFAS 121 required that long-lived assets and certain identifiable intangibles to be held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The Company periodically evaluated the recoverability of the carrying amounts of its licenses and property and equipment in each market, as well as the depreciation and amortization periods based on estimated undiscounted future
cash flows and other factors to determine whether current events or circumstances warrant reduction of the carrying amounts or acceleration of the related amortization period. If such assets were considered to be impaired, the impairment to be
recognized was measured by the amount by which the carrying amount of the assets exceeded the fair value of the assets. Assets to be disposed of were reported at the lower of the carrying amount or fair value less costs to sell.



Effective January 1, 2002, the Company assessed impairment of long-lived
assets and goodwill in accordance with the provisions of SFAS No. 144, and 142. SFAS No. 144 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. SFAS No. 142 requires annual tests for impairment of goodwill and intangible assets that have indefinite useful lives and interim tests when an event has occurred that more likely than not has reduced the
fair value of such assets.



Licenses



Licenses consist primarily of costs incurred in connection with the
Companys acquisition of PCS licenses and systems. These assets are recorded at cost and amortized using the straight-line method over an estimated useful life of 20 years. Accumulated amortization was approximately $3.9 million and $3.1
million at December 31, 2003 and 2002, respectively.



Deferred Financing
Costs



Deferred financing costs include costs incurred in
connection with the issuance of the Companys long-term debt. These costs are amortized over the terms of the related debt using the interest method. Accumulated amortization expense was approximately $10.2 million and $6.2 million at December
31, 2003 and 2002, respectively.



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US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Investments in Unconsolidated Affiliates



The Companys investments in less than majority-owned affiliated companies are accounted for using the equity method
and equity in earnings (losses) are reported as equity in income (losses) of affiliates in the accompanying statement of operations.



Revenue Recognition



The Company earns revenue by providing access to and usage of its network and sales of merchandise. Subscriber revenue consists primarily of a basic
service plan (where the customer purchases a pre-allotted number of minutes for voice and/or data transmission); airtime (which consists of billings for minutes that either exceed or are not covered by the basic service plan); long distance; and
charges associated with travel outside our service area. Travel revenue is generated on a per minute basis when a Sprint PCS subscriber outside of our markets uses the Companys service when traveling through our markets. Foreign roaming
revenue is generated when a non-Sprint PCS customer uses the Companys service when traveling through the Companys markets. The Company recognizes roaming revenue through an agreement that allows a reseller to sell prepaid wireless
services in its markets. Revenues are recognized when amounts are considered to be earned under the respective service plans and collection of such amounts is considered probable.



Sprint retains 8% of collected service revenues from subscribers based in the Companys service area, foreign roaming
and for revenue generated under its reseller agreement. The amount of affiliation fees retained by Sprint PCS is recorded as a General and Administrative expense. Revenues derived from the sale of handsets and accessories by the Company and from
certain roaming services (outbound roaming and roaming revenues from Sprint PCS and its PCS network partner subscribers) are not subject to the 8% affiliation fee from Sprint PCS.



Revenues from the sales of merchandise, primarily wireless handsets and accessories, represent a separate earnings process
and are recognized at the time of the customer purchase. These revenues and related costs are included in merchandise sales and cost of sales, respectively. The Company reduces recorded revenue for rebates and discounts given to subscribers on
wireless handsets sales in accordance with Emerging Issues Task Force (EITF) Issue No. 01-9 Accounting for Consideration Given by a Vendor to a Subscriber (Including a Reseller of the Vendors Products).



The Company recognizes revenues from activation fees in accordance with
Emerging Issues Task Force (EITF) No. 00-21. In May 2003, the EITF modified its previous consensus to EITF 00-21 to clarify the scope of Issue 00-21 and its interaction with other authoritative literature. As permitted under the modified
consensus, the Company adopted this modified consensus effective July 1, 2003 for all revenue arrangements entered into subsequent to June 30, 2003. EITF 00-21 addresses the determination of whether an arrangement involving more than one deliverable
contains more than one unit of accounting and how the related revenues should be measured and allocated to the separate units of accounting. In applying this guidance, separate contracts with the same party, entered into at or near the same time,
will be presumed to be a package, and the consideration will be measured and allocated to the separate units based on their relative fair values. The Company believes that the sale of handsets and future service under contract should be accounted
for as separate units under EITF 00-21. As a result, the total consideration under these arrangements, including any related activation fees, is allocated between these separate units based on their relative fair values.



Advertising Costs



Advertising costs are charged to expenses as incurred. For the years ended December 31, 2003, 2002 and 2001, approximately
$20.5 million, $28.2 million, and $16.5 million, respectively, of advertising costs were incurred.



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Commissions and Handset Subsidies



Commissions are paid to the Companys sales staff and local and national retailers for new subscribers. The Company
also reimburses certain retailers for the difference between the cost of a handset and the sales price when the handset is sold below cost, referred to as a handset subsidy. Because the new subscriber must meet certain criteria, such as a minimum
time period, commissions and handset subsidies may be paid in periods subsequent to the actual date the subscriber is activated. The Company accrues commissions and handset subsidies payable in future periods.



Income Taxes



The Company accounts for deferred income taxes using the asset and liability method, under which deferred tax assets and
liabilities are recognized for the differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled.



Earnings (Loss) per Common Share



Earnings (loss) per common share are calculated by dividing net loss by the weighted average number of shares outstanding during the year. The effect of
options have not been included in the computation of diluted earnings per share because the Company was in a net loss position and, therefore, the effect would have been antidilutive.



Stock Compensation Arrangements



The Company accounts for its stock compensation arrangements under the
provisions of APB 25, Accounting for Stock Issued to Employees.



Had compensation expense for the Companys stock option plan been determined in accordance with SFAS No. 123, the Companys net loss and basic and diluted net loss per share of common stock for each of the three years in the
period ended December 31, 2002 would have been:



|                                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|---------------------------------------------------------------- |  | ----------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                 |  | Year ended December 31, |         
|                                                                 |  | 2003                    |          |   | 2002 |   |          | 2001 | 
|Net loss                                                         |  |                         |          |   |      |   |          |      |  |   |          |  
|As reported                                                      |  | $                       | (156,954 | ) |      | $ | (582,478 | )    |  | $ | (97,611  | )
|Add recorded non-cash stock compensation                         |  |                         | 2,404    |   |      |   | 4,349    |      |  |   | 4,567    |  
|Less non-cash stock compensation in accordance with SFAS No. 123 |  |                         | (6,649   | ) |      |   | (8,798   | )    |  |   | (8,018   | )
|                                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Pro forma                                                        |  | $                       | (161,199 | ) |      | $ | (586,927 | )    |  | $ | (101,062 | )
|                                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Basic and diluted net loss per share of common stock             |  |                         |          |   |      |   |          |      |  |   |          |  
|As reported                                                      |  | $                       | (1.22    | ) |      | $ | (4.93    | )    |  | $ | (1.17    | )
|                                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Pro forma.                                                       |  | $                       | (1.25    | ) |      | $ | (4.96    | )    |  | $ | (1.21    | )
|                                                                 |  |                         |          |   |      |   |          |      |  |   |          |  



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Use of Estimates



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



Concentrations of Credit Risk



Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts
receivable. The Company places its cash and temporary cash investments with high credit quality financial services companies.



Collectibility of subscriber receivables is impacted by economic trends in each of the Companys markets and the Company has provided an allowance,
which it believes, is adequate to absorb losses from uncollectible amounts.



Reclassifications



Certain reclassifications
have been made to the 2002 and 2001 financial statements to conform to the 2003 presentation.



New Accounting Pronouncements



In May 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Liabilities and Equity, which is effective at the beginning of
the first interim period beginning after June 15, 2003. However, certain aspects of SFAS 150 have been deferred. SFAS No. 150 establishes standards for the Companys classification of liabilities in the financial statements that have
characteristics of both liabilities and equity. The Company will continue to review SFAS No. 150; however, the Company does not expect SFAS 150 to have a material impact on the Companys financial position, results of operations, or cash flows.



In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest EntitiesAn Interpretation of Accounting Research Bulletin (ARB) No. 51 (FIN 46). This interpretation clarifies how to identify variable interest entities and how a company should
assess its interests in a variable interest entity to decide whether to consolidate the entity. FIN 46 applies to variable interest entities created after January 31, 2003, in which a company obtains an interest after that date. Also, FIN 46 applies
in the first fiscal quarter or interim period beginning after December 15, 2003, to variable interest entities in which a company holds a variable interest that it acquired before February 1, 2003. The adoption of this interpretation did not have a
material effect on the Companys financial position, results of operations or cash flows.



In November 2002, the FASB issued FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This
interpretation expands the disclosures to be made by a guarantor about its obligations under certain guarantees and requires that, at the inception of a guarantee, a guarantor recognize a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements are effective immediately. As disclosed in Note 5 to the Consolidated Financial Statements, Louisiana Unwired LLC and Unwired Telecom Corporation have fully and unconditionally guaranteed the
Companys obligations under the US Unwired 133/8% senior subordinated discount notes and Independent
Wireless One Corporation has fully and unconditionally guaranteed



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##### Table of Contents

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



the Companys obligations under the IWO 14% senior notes. The initial recognition and measurement provisions of this interpretation are effective for
guarantees issued or modified after December 31, 2002. The adoption of the initial recognition and measurement provisions of this interpretation did not have a material effect on the Companys financial position, results of operations or cash
flows.



2. Liquidity and Current Business Plans



The Companys operating results continue to be impacted by its highly
leveraged capital structure, its relationship with Sprint PCS and a highly competitive marketplace.



The Companys Highly Leveraged Capital Structures



US Unwired and IWO have separate debt structures. US Unwired entered into a senior bank credit facility and senior
subordinated discount notes prior to the April 2002 acquisition of IWO. IWO has a senior bank credit facility and senior notes that were also entered into prior to the April 2002 acquisition. Under the terms of these debt instruments, funds
available under the US Unwired debt can only be used by US Unwired, and funds available under the IWO debt can only be used by IWO. US Unwired is not obligated for the payment of IWOs debt, and IWO is not obligated for the payment of US
Unwireds debt.



US Unwired



As of December 31, 2003, US Unwired had $64.9 million in cash and cash
equivalents; availability under the US Unwired senior bank credit facility of $38.3 million, net of $1.7 million in outstanding letters of credit; and indebtedness that consisted of $76.0 million related to the US Unwired senior bank credit
facility, $359.3 million related to the US Unwired senior subordinated discount notes and $10.6 million in capital leases, promissory notes and vendor financing for a total of $445.9 million. See Note 11 for commitments and contingencies that may
affect US Unwireds liquidity. US Unwired must comply with certain financial covenants of the US Unwired senior bank credit facility and the US Unwired senior subordinated discount notes, and as of December 31, 2003, was in compliance with
these financial covenants.



On February 6, 2004, the Company
consummated the sale of its cellular operations and certain PCS licenses for approximately $30.0 million and used $6.2 million of the proceeds to partially repay its recently amended US Unwired senior bank credit facility. The Company has entered
into an agreement for the sale and leaseback of approximately 90 cell site towers. This sale is expected to close in March and April 2004 for approximately $10.0 million. A portion of the proceeds, approximately $4.7 million, will be used to further
reduce its bank debt.



In October 2003, the Company and the
holders of the US Unwired senior bank credit facility revised certain provisions of the US Unwired million senior bank credit facility through execution of the third amendment to the US Unwired senior bank credit facility. The Company and its senior
lenders agreed to a revised set of financial covenants, a $40 million revolving credit facility that is subject to certain borrowing conditions, an immediate $10.0 million partial repayment of the senior bank term loans and a 0.5% increase to the
interest rate. The October 30, 2003 amendment requires the Company to remit a portion of the net proceeds of any asset disposals. The amendment also provides for additional restrictions on the Companys ability to draw on the $40.0 million
revolver that includes certain financial requirements and only allow for additional draws if the Companys cash balance falls below $15.0 million prior to March 31, 2005 or $10.0 million on or subsequent to March 31, 2005. The Company incurred
approximately $2.7 million in banking and other professional fees related to this amendment.



In May 2003, the Company announced an offer to exchange any and all of our existing $400 million US Unwired 13.375% senior subordinated discount notes for $187.50 in cash and $185.00 in face amount of new



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##### Table of Contents

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



notes per $1,000 face amount of existing notes with a maximum amount of cash to be paid of $37.5 million. In June 2003, the Company announced that the offer
had expired and none of the notes were exchanged. In conjunction with this offering, the Company incurred approximately $3.5 million in outside legal and other professional services and costs. These costs are included in General & Administrative
Expenses in the accompanying consolidated financial statements.



Based on its 2004 operating forecasts, the Company believes that US Unwired will be able to comply with the financial covenants of the amended US Unwired senior bank credit facility and have sufficient cash to fund its operations, debt
service and capital requirements over the next twelve months. However, the Companys liquidity and ability to comply with these amended financial covenants is dependent upon a number of factors influencing forecasts of earnings and operating
cash flows. These factors include subscriber growth, average monthly revenue per user (ARPU), customer turnover or churn and cost per gross addition (CPGA). These performance metrics are explained in our
Management Discussion and Analysis section of this filing.



Should actual results differ from the underlying business model assumptions, the Companys liquidity position and ability to comply with the amended financial covenants could be adversely affected. The Company could be required to
raise additional capital that may or may not be available on acceptable terms, if at all. This could have a material adverse effect on the Companys ability to achieve its intended business objectives.



IWO Liquidity



The Company has been unable to develop a business plan for IWO that provided
sufficient cash to fund operations, debt service and capital requirements for 2004. The Company has been in discussions with the IWO banking group to arrive at an acceptable restructuring to preserve liquidity but have been unable to arrive at an
acceptable plan. The Company anticipates seeking protection under bankruptcy in 2004.



During 2003, the Company failed to make $9.5 million in interest payments on the IWO senior bank credit facility and was not in compliance with the restrictive covenants under the IWO senior bank credit facility at
December 31, 2003. As a result of the Companys failure to make scheduled interest payments and the covenant violations, the Company was in default of the IWO senior bank credit facility at December 31, 2003 and the holders of the IWO senior
bank credit facility have denied it access to the remaining $25.2 million of availability. As a result, the Company has classified all outstanding indebtedness of both the IWO senior bank credit facility and the IWO senior notes as a current
liability.



As of December 31, 2003, IWO had $32.3 million in
cash and cash equivalents; $19.4 million in restricted cash; and indebtedness that consisted of $213.2 million related to the IWO senior bank credit facility and $138.5 million related to the IWO senior notes for a total of $351.7 million. A portion
of the original proceeds of the IWO senior notes offering was set aside as restricted cash to make the first six scheduled semi-annual interest payments on the IWO senior notes through January 2004. Principal repayment of the IWO senior bank credit
facility commences in March 2004.



As a result of liquidity
challenges, IWO has made the decision to reduce capital expenditures for network expansion and abandon the construction of cell sites that do not provide a sufficient level of enhanced coverage. IWO recorded an asset abandonment charge of $12.1
million during 2003 for these abandoned cell sites and related property. Included in this asset abandonment charge are cell sites that IWO is required to construct to meet the build out requirements under the IWO Sprint PCS management agreement.
Failure to complete the build out of the IWO service area will place IWO in violation of the IWO Sprint PCS management agreement. As a result, Sprint PCS could declare IWO in default and take action up to and including termination of the IWO Sprint
management agreement. At December 31, 2003, IWOs construction in progress included $6.0 million



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##### Table of Contents

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



primarily related to cell sites that IWO plans to complete, and the Company estimates that completion of these cell sites will require approximately $11.4
million in additional costs to complete construction and place these sites in operation.



Due to restrictions in the US Unwired debt instruments, US Unwired cannot provide any capital or other financial support to IWO. Further, IWO creditors, IWO lenders and IWO note holders cannot place any liens or
encumbrances on the assets of US Unwired. Should the holders of the IWO senior bank credit facility place IWO in default, US Unwireds relationship with IWO may change and several alternatives exist ranging from working for the holders of the
IWO senior bank credit facility and the holders of the IWO senior notes as a manager of the IWO territory, possibly subject to the approval by Sprint PCS, to no involvement with IWO at all.



Considering IWOs default of the IWO loan agreements and its liquidity
as discussed above, there is substantial doubt about IWOs ability to continue as a going concern.



The Companys Relationship with Sprint PCS



See The Companys Affiliation with Sprint PCS in Part I of this filing for a detailed discussion of the Sprint PCS Management Agreements.



The Company is dependent on Sprint PCS for a significant
portion of its financial information as a result of its contractual relationship with Sprint PCS as a service bureau provider for billing, cash collections and other back office functions such as customer service. The Company also purchases certain
goods and services through Sprint PCS, such as handsets, network maintenance and access to national retail chain sales channels in its markets, where Sprint PCS has negotiated contracts and allows it to operate under those contractual arrangements.



The Company does not always agree with the validity of certain
charges assessed by Sprint PCS and as of December 31, 2003, had disputed approximately $19.1 million of charges to US Unwired and $9.3 million of charges to IWO. Based upon the information provided to the Company by Sprint PCS to date, the Company
believes the accompanying consolidated balance sheet adequately reflects its obligation that may be due to Sprint PCS for these charges. However, the Companys cash flow could be adversely affected should these disputes not be settled in its
favor.



On July 11, 2003, US Unwired, Louisiana Unwired and its
wholly owned subsidiary, Texas Unwired, a limited partnership, (Texas Unwired), filed suit in the U.S. District Court for the Western District of Louisiana, against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom,
Inc. (collectively, Sprint). The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty and fraud arising out of Sprints conduct in its dealings with the plaintiff companies. It
seeks treble actual damages in unspecified amounts and appointment of a receiver over property and assets controlled by Sprint in Louisiana. On September 25, 2003, the Company filed an amended complaint to include contractual claims. On October 20,
2003, Sprint submitted their Answer, Defenses, and Counterclaim of Defendants seeking dismissal of the Companys First Amended Complaint and filing a counter-claim for approximately $13.3 million related primarily to contractual disputes as
discussed above. On October 21, 2003, Sprint filed a Defendants Partial Motion for Judgment on the Proceedings seeking partial dismissal of claims filed in the First Amended Complaint. On October 21, 2003, Sprint filed Defendants Motion
to Strike Plaintiffs Jury Demand from the First Amended Complaint. On February 3, 2004, the U.S. District Court denied in all respects Sprints motions for judgment on the proceedings, allowed US Unwired to hire an outside accounting
company to monitor monies with a receiver as an acceptable option at a later time and agreed with US Unwireds request for a trial by jury in



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Louisiana. US Unwired and Sprint have submitted to the District Court an agreed upon schedule to complete the discovery process during 2004 and anticipate a
late-2004 trial date. The Company does not believe that a negative outcome of its lawsuit will have a material adverse effect on the Company.



The Company has been in discussions with Sprint PCS to modify certain components of IWOs Sprint PCS management agreement including a fee
simplification process, modification of certain build-out requirements and the settlement of IWOs outstanding disputes with Sprint, but no definitive agreement has been reached at this time. The Company has had no such discussions with Sprint
PCS as it relates to the affiliate agreements with other US Unwired subsidiaries.



The Companys agreements with Sprint PCS stipulate a reciprocal travel rate. Sprint PCS travel revenue is generated on a per minute basis when a Sprint PCS subscriber outside of its markets uses its service when
traveling through its markets. Sprint PCS travel expense is generated on a per minute basis when our subscribers travel outside its market area and use the Sprint PCS network. Historically, the Companys Sprint PCS travel revenue exceeds its
Sprint PCS travel expense. Effective January 1, 2003, Sprint PCS reduced the reciprocal travel rate for Louisiana Unwired from $0.20 per minute in 2002 to $0.058 per minute in 2003 and for Texas Unwired and Georgia PCS Management, LLC.
(Georgia PCS), both subsidiaries of LA Unwired, and IWO from $0.10 per minute in 2002 to $0.058. On December 4, 2003, Sprint PCS notified the Company that it intends to reduce the reciprocal roaming rate to $0.041 per minute of use in
2004.



Competitive Market Place



The Company faces significant competition in our service area. In order to
attract new subscribers, the Company offers steep discounts on handsets and generous service plans that include more minutes and/or more anytime time minutes and other ancillary enhancements such as free long distance. Based upon increased
competition, the Company anticipates that market prices for two-way wireless services will continue to decline in the future. Wireless local number portability (WLNP), which allows subscribers to change carriers and retain their existing
phone numbers, was introduced into a portion of the Companys markets in November 2003. Given the limited time that the Company has had to evaluate WLNP, the Company is uncertain of the future impact. For more detail, see the
Competition discussion in Part I of this filing.



The
Companys Business Strategy



The Company has
undertaken a number of key initiatives designed to enable US Unwired to achieve the underlying assumptions of the US Unwired business model and preserve IWO liquidity. The Company has:



| |  | focused on attracting customers that are in good credit standing.
| | - | -----------------------------------------------------------------



| |  | reinstated the deposit requirement for certain higher credit risk subscribers and will request not to participate in any Sprint PCS programs where the Companys analysis
indicates adversely impacted levels of customer turnover or unsatisfactory economic returns.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | restructured sales employees programs to pay higher commissions on subscribers with better credit ratings.
| | - | -----------------------------------------------------------------------------------------------------------



| |  | revised the local agent commission structure to pay higher commissions for subscribers with good credit ratings. The Company has cancelled and continues to cancel agreements with
local agents that target higher credit risk subscribers or provide low economic value.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | reintroduced the pre-pay program, which requires advance payment for minutes of use. The Company believes that this program offers higher credit risk subscribers a less stressful
environment in which to subscribe to our service by providing an opportunity to better manage their expenditures for the service provided and limit our bad debt exposure.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



| |  | supplemented Sprint PCSs customer service function with certain members of its own staff who focus on subscriber retention.
| | - | ----------------------------------------------------------------------------------------------------------------------------



| |  | limited its capital expenditures to: (1) capacity and required technical upgrades of existing equipment, and (2) only adding additional cell site coverage in areas that the Company
expects will produce positive cash returns as a result of either new subscriber growth or decreases in subscriber turnover.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | continued to identify and will seek to divest of certain non-core assets.
| | - | -------------------------------------------------------------------------



| |  | undertaken a corporate wide evaluation of expenses. This includes the consolidation of functions, divesting of unused and under utilized facilities, renegotiation of vendor
contracts, extension of vendor payment terms and other cost cutting measures.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | evaluated and continue to evaluate our markets and reduce sales staffing levels and close retail outlets that do not meet its minimum internal rates of returns.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | continued to work with Sprint PCS to improve the detail, timeliness and accuracy of information processed by Sprint PCS on our behalf.
| | - | --------------------------------------------------------------------------------------------------------------------------------------



As a result of these initiatives and operating results to date, the Company
believes that US Unwired will be able to comply with the US Unwired senior bank credit facility financial covenants and have sufficient cash to fund its operations, debt service and capital requirements over the next twelve months. However, as
discussed above, US Unwireds funding status and ability to comply with these amended financial covenants is dependent upon a number of factors influencing forecasts of earnings and operating cash flows. While the Company believes that these
initiatives have had and will continue to have a positive impact on operating results and support the ability of US Unwired to comply with its amended senior bank credit facility covenants and have sufficient cash to support the operations of US
Unwired over the next twelve months, the Company cannot state with certainty that these initiatives will result in its ability to sustain IWOs operations in 2004.



3. Goodwill and Asset Impairments



The Company adopted SFAS No. 142, Goodwill and Other Intangible Asset, and No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, on January 1, 2002.



The Company completed the
first of the required impairment tests of goodwill and indefinite lived assets as of January 1, 2002 and determined that the adoption of this provision of the new rules had no impact on the Companys financial statements at that time. As a
result of the impairment indicators discussed in Note 2, above, the Company performed an impairment test of goodwill in the fourth quarter of 2002 and in the fourth quarter of 2003. In connection with this impairment tests, the Company also reviewed
its long-lived assets for impairment under SFAS No. 144. Accounting for Impairment or Disposal of Long-Lived Assets.



The following information provides net loss and net loss per share information for the year ended December 31, 2001 adjusted to exclude amortization
expense recognized in these periods related to goodwill.



|                                |  |                             |         |  
|------------------------------- |  | --------------------------- | ------- | -
|                                |  | Year ended December 31,2001 |        
|                                |  | (In thousands)              |        
|Reported net loss               |  | $                           | (97,611 | )
|Add back: Goodwill amortization |  |                             | 3,821   |  
|                                |  |                             |         |  
|Adjusted net loss               |  | $                           | (93,790 | )
|                                |  |                             |         |  



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Basis and diluted loss per share:



|                                |  |                              |       |  
|------------------------------- |  | ---------------------------- | ----- | -
|                                |  | Year ended December 31, 2001 |      
|Reported net loss               |  | $                            | (1.17 | )
|Add back: Goodwill amortization |  |                              | .04   |  
|                                |  |                              |       |  
|Adjusted net loss               |  | $                            | (1.13 | )
|                                |  |                              |       |  



The Company determined
that US Unwired and IWO are considered to be separate reporting units as each constitutes a separate business for which discrete financial information is available and management regularly reviews the operating results of each of these businesses.
This determination is further supported as each has separate senior bank credit facility and separate senior subordinated discount notes (US Unwired) or senior notes (IWO), which under the terms of these, funds available under the US Unwired debt
instruments can only be used by US Unwired to finance the operations of US Unwired, and the funds available under the IWO debt instruments can only be used to finance the operations of IWO Unwired.



The Company engaged an independent national valuation firm to assist with the
impairment valuation. As a result of the impairment valuation as of October 31, 2002, management believed that US Unwired was not impaired. However, the valuation analysis determined that both goodwill and a significant portion of IWOs
intangible assets were impaired. As a result, IWO recorded a goodwill impairment of approximately $214.2 million and an intangible asset impairment of $188.3 million associated with IWOs right to provide service under the Sprint PCS management
Agreement in the quarter ended December 31, 2002. The Sprint PCS management agreement was originally assigned a value of $215.0 million and was being amortized using the straight-line method over 218 months. A similar valuation by the independent
national valuation firm as of October 31, 2003 indicated no additional impairment of goodwill or any of the Companys long-lived assets.



The changes in the carrying amount of goodwill from December 31, 2001 to December 31, 2003 are as follows (in thousands):



|                                                                                                               |  |   |          |  
|-------------------------------------------------------------------------------------------------------------- |  | - | -------- | -
|Goodwill as of December 31, 2001                                                                               |  | $ | 26,447   |  
|Goodwill acquired on March 8, 2002 with the acquisition of Georgia PCS (preliminary purchase price allocation) |  |   | 26,421   |  
|Goodwill acquired on April 1, 2002 with the acquisition of IWO (preliminary purchase price allocation)         |  |   | 220,913  |  
|Adjustments to preliminary purchase price allocations                                                          |  |   | (7,629   | )
|Goodwill impairments, from the IWO acquisition                                                                 |  |   | (214,191 | )
|                                                                                                               |  |   |          |  
|Goodwill as of December 31, 2002                                                                               |  |   | 51,961   |  
|Forfeiture of Georgia PCS Management, LLC shares held in escrow                                                |  |   | (5,260   | )
|Adjustment to preliminary purchase price allocation                                                            |  |   | 4        |  
|                                                                                                               |  |   |          |  
|Goodwill as of December 31, 2003                                                                               |  | $ | 46,705   |  
|                                                                                                               |  |   |          |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



The amortization period, gross carrying amount, impairments, accumulated amortization and net
carrying amount of intangible assets as of December 31, 2003 are as follows (in thousands):



|                                                     |  |                              |  |                     |         |             |   |                         |  |                    |        |  |   |       
|---------------------------------------------------- |  | ---------------------------- |  | ------------------- | ------- | ----------- | - | ----------------------- |  | ------------------ | ------ |  | - | ------
|                                                     |  | Year ended December 31, 2002
|                                                     |  | Amortizationperiod           |  | GrossCarryingAmount |         | Impairments |   | AccumulatedAmortization |  | Net CarryingAmount
|Sprint management agreement, IWO acquisition(1)      |  | 218 months                   |  | $                   | 215,000 |             | $ | 195,234                 |  | $                  | 187    |  | $ | 19,579
|Subscriber base, IWO acquisition                     |  | 24 months                    |  |                     | 57,500  |             |   |                        |  |                    | 21,562 |  |   | 35,938
|Sprint management agreement, Georgia PCS acquisition |  | 219 months                   |  |                     | 15,500  |             |   |                        |  |                    | 708    |  |   | 14,792
|Subscriber base, Georgia PCS acquisition             |  | 24 months                    |  |                     | 12,300  |             |   |                        |  |                    | 4,949  |  |   | 7,351 
|Subscriber base, Louisiana Unwired                   |  | 24 months                    |  |                     | 3,854   |             |   |                        |  |                    | 3,457  |  |   | 397   
|Subscriber base, Texas Unwired                       |  | 24 months                    |  |                     | 8,170   |             |   |                        |  |                    | 7,935  |  |   | 235   
|                                                     |  |                              |  |                     |         |             |   |                         |  |                    |        |  |   |       
|Total                                                |  |                              |  | $                   | 312,324 |             | $ | 195,234                 |  | $                  | 38,798 |  | $ | 78,292
|                                                     |  |                              |  |                     |         |             |   |                         |  |                    |        |  |   |       

|(1) | Includes impairment charge of $188,330 and adjustment of accumulated amortization of $6,904.
|--- | --------------------------------------------------------------------------------------------



|                                                     |  |                              |  |                      |         |                         |   |                    |  |   |       
|---------------------------------------------------- |  | ---------------------------- |  | -------------------- | ------- | ----------------------- | - | ------------------ |  | - | ------
|                                                     |  | Year ended December 31, 2003
|                                                     |  | Amortizationperiod           |  | Gross CarryingAmount |         | AccumulatedAmortization |   | Net CarryingAmount
|Sprint management agreement, IWO acquisition         |  | 218 months                   |  | $                    | 19,766  |                         | $ | 1,311              |  | $ | 18,455
|Subscriber base, IWO acquisition                     |  | 24 months                    |  |                      | 57,500  |                         |   | 50,313             |  |   | 7,187 
|Sprint management agreement, Georgia PCS acquisition |  | 219 months                   |  |                      | 15,500  |                         |   | 1,557              |  |   | 13,943
|Subscriber base, Georgia PCS acquisition             |  | 24 months                    |  |                      | 12,300  |                         |   | 11,100             |  |   | 1,200 
|Subscriber base, Louisiana Unwired                   |  | 24 months                    |  |                      | 3,854   |                         |   | 3,854              |  |   |      
|Subscriber base, Texas Unwired                       |  | 24 months                    |  |                      | 8,170   |                         |   | 8,170              |  |   |      
|                                                     |  |                              |  |                      |         |                         |   |                    |  |   |       
|Total                                                |  |                              |  | $                    | 117,090 |                         | $ | 76,305             |  | $ | 40,785
|                                                     |  |                              |  |                      |         |                         |   |                    |  |   |       



Estimated future
amortization expense on intangible assets for the years ended December 31,



|     |  |   |       
|---- |  | - | ------
|2004 |  | $ | 10,361
|     |  |   |       
|2005 |  | $ | 1,973 
|     |  |   |       
|2006 |  | $ | 1,973 
|     |  |   |       
|2007 |  | $ | 1,973 
|     |  |   |       
|2008 |  | $ | 1,973 
|     |  |   |       



4. Acquisitions



On March 8, 2002, the Company acquired 100% of the ownership interest of
Georgia PCS for approximately $84.5 million. In conjunction with the Companys acquisition of Georgia PCS, 1.1 million shares valued at $5.26 per share of the Companys common stock were placed in escrow pending resolution of certain post
closing adjustments. On June 20, 2003 the Company notified the former owners of Georgia PCS that the Company intends to offset 1.0 million shares of the Companys common stock that is in the escrow account in



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



satisfaction of certain post closing adjustments. As a result, the Company recorded a receivable and a reduction of goodwill for the return of this stock
from escrow in 2003. In June 2003, these shares were returned to the Company and have been recorded as treasury shares in the accompanying balance sheet.



On April 1, 2002, the Company acquired 100% of the ownership interest in IWO for approximately $446 million in Company stock. The aggregate purchase price
has been allocated to the assets acquired and liabilities assumed based on estimates of fair values as determined by an independent valuation performed by a national valuation firm . The excess of the purchase price over the fair value of the net
identifiable assets has been allocated to goodwill. The Companys operating results include the operating results of IWO from date of acquisition, April 1, 2002.



The following unaudited supplemental pro forma information for the years ended December 31, 2002 and 2001 presents the
results of operations as if the IWO acquisition had occurred at the beginning of 2001 and are not necessarily indicative of future results or actual results that would have been achieved had these acquisitions occurred as of the beginning of the
period.



|               |  |                                       |          |   |      |   |          |  
|-------------- |  | ------------------------------------- | -------- | - | ---- | - | -------- | -
|               |  | Years ended December 31,              |         
|               |  | 2002                                  |          |   | 2001 |  
|               |  | (In thousands, except per share data) |         
|Revenues       |  | $                                     | 569,616  |   |      | $ | 370,487  |  
|               |  |                                       |          |   |      |   |          |  
|Net loss       |  | $                                     | (609,315 | ) |      | $ | (161,869 | )
|               |  |                                       |          |   |      |   |          |  
|Loss per share |  | $                                     | (5.16    | ) |      | $ | (1.32    | )
|               |  |                                       |          |   |      |   |          |  



5. Details of Certain Balance Sheet
Accounts



Additional information regarding certain balance
sheet accounts is presented below:



|                                  |  |                |         |      |   |        
|--------------------------------- |  | -------------- | ------- | ---- | - | -------
|                                  |  | December 31,  
|                                  |  | 2003           |         | 2002
|                                  |  | (in thousands)
|Property and equipment            |  |                |         |      |   |        
|Land                              |  | $              | 754     |      | $ | 754    
|Buildings                         |  |                | 14,755  |      |   | 15,520 
|Leasehold improvements            |  |                | 7,074   |      |   | 6,715  
|Facilities and equipment          |  |                | 599,430 |      |   | 564,921
|Furniture, fixtures, and vehicles |  |                | 9,059   |      |   | 8,763  
|Construction in progress          |  |                | 14,594  |      |   | 34,004 
|                                  |  |                |         |      |   |        
|                                  |  |                | 645,666 |      |   | 630,677
|Less accumulated depreciation     |  |                | 234,148 |      |   | 153,736
|                                  |  |                |         |      |   |        
|                                  |  | $              | 411,518 |      | $ | 476,941
|                                  |  |                |         |      |   |        
|Intangible assets                 |  |                |         |      |   |        
|Sprint management agreement       |  | $              | 35,266  |      | $ | 35,266 
|Subscriber base                   |  |                | 81,824  |      |   | 81,824 
|                                  |  |                |         |      |   |        
|                                  |  |                | 117,090 |      |   | 117,090
|Less accumulated amortization     |  |                | 76,305  |      |   | 38,798 
|                                  |  |                |         |      |   |        
|                                  |  | $              | 40,785  |      | $ | 78,292 
|                                  |  |                |         |      |   |        



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



|                                       |  |                |        |      |   |       
|-------------------------------------- |  | -------------- | ------ | ---- | - | ------
|                                       |  | December 31,  
|                                       |  | 2003           |        | 2002
|                                       |  | (in thousands)
|Other assets                           |  |                |        |      |   |       
|Licenses                               |  | $              | 14,548 |      | $ | 12,904
|Deferred financing costs               |  |                | 34,603 |      |   | 32,408
|Other                                  |  |                | 7,522  |      |   | 4,442 
|                                       |  |                |        |      |   |       
|                                       |  |                | 56,673 |      |   | 49,754
|Less accumulated amortization          |  |                | 14,102 |      |   | 9,275 
|                                       |  |                |        |      |   |       
|                                       |  | $              | 42,571 |      | $ | 40,479
|                                       |  |                |        |      |   |       
|Accrued expenses                       |  |                |        |      |   |       
|Unearned revenue and customer deposits |  | $              | 17,196 |      | $ | 18,579
|Accrued commissions                    |  |                | 11,858 |      |   | 14,939
|Accrued Sprint settlements             |  |                | 9,093  |      |   | 9,557 
|Other                                  |  |                | 38,990 |      |   | 24,549
|                                       |  |                |        |      |   |       
|                                       |  | $              | 77,137 |      | $ | 67,624
|                                       |  |                |        |      |   |       



6. Investments in Unconsolidated
Affiliates



Investments in unconsolidated affiliates
consists of the following:



|                                                               |  |                      |      |  |                |        |   |  |   |        |  
|-------------------------------------------------------------- |  | -------------------- | ---- |  | -------------- | ------ | - |  | - | ------ | -
|                                                               |  | Percentage Ownership |      |  | December 31,   |       
|                                                               |  |                      | 2003 |  |                | 2002   |  
|                                                               |  |                      |      |  | (In thousands) |       
|Gulf Coast Wireless, LP (Gulf Coast Wireless)                |  | 13.28                | %    |  | $              | (2,467 | ) |  | $ | (5,000 | )
|Command Connect, LLC (Command Connect)                       |  | 50.00                | %    |  |                | (51    | ) |  |   | 69     |  
|GTE Mobilenet of Texas RSA #21 Limited Partnership (GTE #21) |  | 25.00                | %    |  |                | 1,302  |   |  |   | 1,030  |  
|Wireless Management Corporation                                |  | 20.00                | %    |  |                |       |   |  |   |       |  
|                                                               |  |                      |      |  |                |        |   |  |   |        |  
|                                                               |  |                      |      |  | $              | (1,216 | ) |  | $ | (3,901 | )
|                                                               |  |                      |      |  |                |        |   |  |   |        |  



Gulf Coast Wireless is
a Sprint PCS network partner and provides services under the Sprint and Sprint PCS brand names in the Baton Rouge, Hammond and Lafayette, Louisiana and Biloxi, Mississippi markets. Command Connect owns certain LMDS licenses. Command Connect
originally purchased the owned licenses, and holds the licenses until such time as LA Unwired builds out the network for these licenses. At that time, the license is transferred from Command Connect to LA Unwired, who commences operations.



GTE #21 operates a cellular network in Texas RSA #21.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



7. Long-Term Debt



Long-term debt, including capital lease obligations, consisted of the following:



|                                                           |  |                |         |      |   |        
|---------------------------------------------------------- |  | -------------- | ------- | ---- | - | -------
|                                                           |  | December 31,  
|                                                           |  | 2003           |         | 2002
|                                                           |  | (In thousands)
|US Unwired Inc. Senior subordinated discount notes         |  | $              | 359,302 |      | $ | 315,707
|US Unwired Inc. Senior Bank Credit Facility                |  |                | 76,000  |      |   | 90,000 
|Capital leases                                             |  |                | 6,825   |      |   | 7,269  
|Promissory note                                            |  |                | 3,452   |      |   | 3,667  
|Vendor financing                                           |  |                | 311     |      |   | 370    
|                                                           |  |                |         |      |   |        
|Total long-term obligations, US Unwired                    |  |                | 445,890 |      |   | 417,013
|                                                           |  |               
|IWO Holdings, Inc. Senior notes                            |  |                | 138,513 |      |   | 137,023
|IWO Holdings, Inc. Senior Bank Credit Facility, in default |  |                | 213,184 |      |   | 213,184
|                                                           |  |                |         |      |   |        
|Total long-term debt, in default, IWO Holdings             |  |                | 351,697 |      |   | 350,207
|                                                           |  |               
|Less current maturities, including IWO debt in default     |  |                | 362,842 |      |   | 5,018  
|                                                           |  |                |         |      |   |        
|Long-term obligations, excluding current maturities        |  | $              | 434,745 |      | $ | 762,202
|                                                           |  |                |         |      |   |        



As of December 31,
2003, US Unwired was in compliance with all financial covenants under the US Unwired senior bank credit facility and the US Unwired senior subordinated discount notes. Additionally, management believes that it will be able to comply with such
covenants through December 31, 2004.



During 2003, the IWO
failed to make $9.5 million in interest payments on the IWO senior bank credit facility and was not in compliance with the restrictive covenants under the IWO senior bank credit facility at December 31, 2003. As a result of the Companys
failure to make scheduled interest payments and the covenant violations, the Company was in default of the IWO senior bank credit facility at December 31, 2003 and the holders of the IWO senior bank credit facility have denied it access to the
remaining $25.2 million of availability. As a result, the Company has classified all outstanding indebtedness of both the IWO senior bank credit facility and the IWO senior notes as a current liability.



US Unwired Senior Subordinated Discount Notes  133/8%



In October 1999, US Unwired issued $400 million in aggregate principal amount of 133/8% Senior Subordinated Discount Notes due November 1, 2009 (the US Unwired senior subordinated discount notes). The US Unwired senior subordinated discount notes were
issued at a substantial discount such that the Company received gross proceeds of approximately $209.2 million. The US Unwired senior subordinated discount notes increase in value daily, compounded twice per year, at the rate of 133/8% per year until November 1, 2004. On that date, the value of the US Unwired senior subordinated discount notes
will be equal to the face amount of the US Unwired senior subordinated discount notes and interest will begin to accrue at the rate of 133/8% per year. The Company will be required to pay the accrued interest beginning May 1, 2005, and on each November 1 and May 1 thereafter. The US Unwired senior subordinated discount notes are a general
unsecured obligation of the Company, except for the limited security provided by a pledge agreement by the Companys wholly owned subsidiary, Louisiana Unwired. The US Unwired senior subordinated discount notes rank junior to all existing and
future senior debt of the Company and equal in right of payment of any future senior subordinated indebtedness of the Company.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



The US Unwired senior subordinated discount notes are fully, unconditionally, and jointly and
severally guaranteed by two of the Companys wholly owned subsidiaries: Louisiana Unwired and Unwired Telecom. Each of the guarantees is a general unsecured obligation of the guarantor, except for a pledge by Louisiana Unwired of its interest
in Texas Unwired and any notes payable to it by Texas Unwired as security for the guarantee. Each of the guarantees ranks equally in right of payment with the guarantors future senior subordinated indebtedness and is subordinated in right of
payment to all existing and future senior debt of the guarantor. The US Unwired senior subordinated discount notes are not guaranteed by IWO.



US Unwired Senior Bank Credit Facility



The US Unwired senior bank credit facility consists of a $40 million reducing revolving credit facility and $90 million in term loans. Effective October
30, 2003, the Company and the holders of the US Unwired senior bank credit facility executed the Third Amendment to Credit Agreement which provided for a revised set of financial covenants, the reduction of the revolving credit facility from $80
million to $40 million, an immediate $10.0 million partial repayment of the term loans and a 0.5% increase to the interest rate. The $40 million reducing revolving credit facility will be permanently reduced by reductions of $4.0 million to $6.0
million per quarter beginning in September 2005. The US Unwired senior bank credit facility matures in 2008 and allows for up to $2.0 million in letters of credit that reduce the amount available under the reducing revolving credit facility. The
term loans are being repaid in quarterly installments that began in June 2003. All loans under the US Unwired senior bank credit facility bear interest at variable rates tied to the federal funds rate or LIBOR and are secured by all of the assets of
the Company and its subsidiaries (other than property owned by IWO). Such collateral also secures certain interest rate protection and other hedging agreements permitted by our credit agreement that may be entered into from time to time by the
Company. At December 31, 2003, the Company had $38.3 available under the credit facility. Lucent Technologies, Inc, is also a guarantor of a portion of our senior secured credit facility. The proceeds from the US Unwired senior bank credit facility
are available for use only by US Unwired and its subsidiaries other than IWO.



IWO Senior Notes  14%



In February 2001, IWO issued 160,000 units, each consisting of $1,000 principal amount of 14% Senior Notes (the IWO senior notes) due January 15, 2011 and one warrant to purchase 12.50025 shares of IWOs class C common
stock at an exercise price of $7.00 per share. As a result of US Unwireds acquisition of IWO in April 2002, this warrant was converted to a US Unwired warrant to purchase 12.96401 shares of US Unwireds common stock at $6.75 per share.
Interest is payable semi-annually on January 15 and July 15 of each year. Independent Wireless One Corporation, a wholly owned subsidiary of IWO, is the sole guarantor of the IWO senior notes. All of IWOs restricted subsidiaries formed or
acquired after the issuance of the IWO senior notes that guarantee the IWO senior bank credit facility will also be required to guarantee the IWO senior notes. The IWO senior notes are not guaranteed by Independent Wireless One Realty Corporation, a
wholly owned subsidiary of IWO, or US Unwired and its subsidiaries.



A portion of the original proceeds of the IWO senior notes were used to purchase a portfolio of U.S. government securities that will generate sufficient proceeds to make the first six scheduled interest payments on the IWO senior notes
through January 2004. The account holding the investment securities and all of the securities and other items contained in the account have been pledged to the trustee for the benefit of the holders of the IWO senior notes.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



IWO Senior Bank Credit Facility



Effective December 2000, Independent Wireless One Corporation, a wholly
owned subsidiary of IWO, entered into an amended and restated secured credit facility (the IWO senior bank credit facility) under which it may borrow up to $240 million in the aggregate consisting of up to $70 million in revolving loans
and $170 million in term loans. The IWO senior bank credit facility matures in 2008. The term loans are due to be repaid in quarterly installments beginning in March 2004 and the reducing revolver matures in March 2008. All loans under the senior
bank credit facility, effective with the date of the default, bear interest at a rate of 4.25-4.75 percent above the agent banks prime rate. The IWO senior bank credit facility is secured by all of the assets of IWO and its subsidiaries. As
discussed above, the holders of the IWO senior bank credit facility have denied IWO access to the remaining $25.2 million of availability as a result of IWOs failure to make scheduled interest payments and the covenant violations. The IWO
credit facility is available for use only by IWO and its subsidiaries.



Maturities of contractual obligations are as follows assuming acceleration of IWO obligations in 2004:



|                                                          |  |                 |         |     |   |         |  |                           |         |       |   |       |  |   |        
|--------------------------------------------------------- |  | --------------- | ------- | --- | - | ------- |  | ------------------------- | ------- | ----- | - | ----- |  | - | -------
|                                                          |  | Long Term Debt |         |     |   |        
|                                                          |  | USUnwired       |         | IWO |   | Total   |  | Capital Lease Obligations |         | Total
|                                                          |  | (In thousands) 
|2004                                                      |  | $               | 10,679  |     | $ | 373,184 |  | $                         | 383,863 |       | $ | 792   |  | $ | 384,655
|2005                                                      |  |                 | 18,705  |     |   |        |  |                           | 18,705  |       |   | 792   |  |   | 19,497 
|2006                                                      |  |                 | 15,473  |     |   |        |  |                           | 15,473  |       |   | 792   |  |   | 16,265 
|2007                                                      |  |                 | 1,059   |     |   |        |  |                           | 1,059   |       |   | 792   |  |   | 1,851  
|2008                                                      |  |                 | 33,847  |     |   |        |  |                           | 33,847  |       |   | 792   |  |   | 34,639 
|Thereafter                                                |  |                 | 400,000 |     |   |        |  |                           | 400,000 |       |   | 4,903 |  |   | 404,903
|                                                          |  |                 |         |     |   |         |  |                           |         |       |   |       |  |   |        
|                                                          |  |                 | 479,763 |     |   | 373,184 |  |                           | 852,947 |       |   | 8,863 |  |   | 861,810
|Less amounts representing interest                        |  |                 |        |     |   |        |  |                           |        |       |   | 2,038 |  |   | 2,038  
|                                                          |  |                 |         |     |   |         |  |                           |         |       |   |       |  |   |        
|Long-term debt and present value of future lease payments |  | $               | 479,763 |     | $ | 373,184 |  | $                         | 852,947 |       | $ | 6,825 |  | $ | 859,772
|                                                          |  |                 |         |     |   |         |  |                           |         |       |   |       |  |   |        



As a result of
IWOs failure to make scheduled interest payments and the covenant violations, IWO was in default of the IWO senior bank credit facility at December 31, 2003 and the Company has classified all outstanding indebtedness of both the IWO senior
bank credit facility and the IWO senior notes as a current liability.



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US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



8. Income Taxes



Income tax expense (benefit) consisted of the following:



|         |  |                          |      |   |      |   |      |      |  |   |        |  
|-------- |  | ------------------------ | ---- | - | ---- | - | ---- | ---- |  | - | ------ | -
|         |  | Years ended December 31, |     
|         |  | 2003                     |      |   | 2002 |   |      | 2001 | 
|         |  | (In thousands)           |     
|Federal: |  |                          |      |   |      |   |      |      |  |   |        |  
|Current  |  |                          |     |   |      | $ | (781 | )    |  | $ | (1,868 | )
|Deferred |  |                          |     |   |      |   |     |      |  |   |       |  
|         |  |                          |      |   |      |   |      |      |  |   |        |  
|State:   |  |                          |      |   |      |   |      |      |  |   |        |  
|Current  |  | $                        | (531 | ) |      |   |     |      |  |   |       |  
|Deferred |  |                          |     |   |      |   |     |      |  |   |       |  
|         |  |                          |      |   |      |   |      |      |  |   |        |  
|         |  |                          |     |   |      |   |     |      |  |   |       |  
|         |  |                          |      |   |      |   |      |      |  |   |        |  
|         |  | $                        | (531 | ) |      | $ | (781 | )    |  | $ | (1,868 | )
|         |  |                          |      |   |      |   |      |      |  |   |        |  



The benefit for 2003
resulted from a reduction to the prior year state tax contingencies resolved in the current year. The benefit for 2002 resulted from a carry back of certain AMT net operating loss carry forwards during 2002 for which a valuation allowance had been
provided at December 31, 2002.



Income tax expense differs from
the amounts computed by applying applicable U.S. federal income tax rate to loss before income taxes, minority interest and equity in losses of affiliates as a result of the following:



|                                                |  |                          |         |   |      |   |          |      |  |   |         |  
|----------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                                                |  | Years ended December 31, |        
|                                                |  | 2003                     |         |   | 2002 |   |          | 2001 | 
|                                                |  | (In thousands)           |        
|Computed expected tax expense                 |  | $                        | (55,471 | ) |      | $ | (204,130 | )    |  | $ | (34,818 | )
|Equity in loss of affiliates                    |  |                          |        |   |      |   | 245      |      |  |   | 966     |  
|Refund of AMT taxes                             |  |                          |        |   |      |   | (781     | )    |  |   | (1,868  | )
|Disqualified interest                           |  |                          | 1,329   |   |      |   | 1,169    |      |  |   | 1,027   |  
|Change in valuation allowance                   |  |                          | 80,641  |   |      |   | 147,523  |      |  |   | 32,558  |  
|Other, net                                      |  |                          | 81      |   |      |   | 100      |      |  |   | 267     |  
|State income taxes, net of federal income taxes |  |                          | (7,839  | ) |      |   | (18,245  | )    |  |   |        |  
|Prior year return to provision reconciliation   |  |                          | (18,741 | ) |      |   |         |      |  |   |        |  
|Change in state tax contingency                 |  |                          | (531    | ) |      |   |         |      |  |   |        |  
|Goodwill impairment                             |  |                          |        |   |      |   | 74,900   |      |  |   |        |  
|                                                |  |                          |         |   |      |   |          |      |  |   |         |  
|                                                |  | $                        | (531    | ) |      | $ | (781     | )    |  | $ | (1,868  | )
|                                                |  |                          |         |   |      |   |          |      |  |   |         |  



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



The tax effects of temporary differences that give rise to the significant components of deferred tax
assets and deferred tax liabilities are presented below:



|                                      |  |                |         |      |   |        
|------------------------------------- |  | -------------- | ------- | ---- | - | -------
|                                      |  | December 31,  
|                                      |  | 2003           |         | 2002
|                                      |  | (In thousands)
|Deferred tax assets:                  |  |                |         |      |   |        
|Federal net operating losses          |  | $              | 208,133 |      | $ | 154,208
|State net operating losses            |  |                | 10,373  |      |   | 4,535  
|Interest on Notes                     |  |                | 56,607  |      |   | 40,091 
|Stock compensation                    |  |                | 8,379   |      |   | 7,303  
|Tax credit carry forward              |  |                | 246     |      |   | 131    
|Allowance for bad debts               |  |                | 2,597   |      |   | 4,273  
|Intangible assets                     |  |                | 12,237  |      |   |       
|Unearned revenues                     |  |                | 16,516  |      |   | 17,896 
|Accrued Rebates                       |  |                | 1,102   |      |   |       
|Unrealized loss on sale of securities |  |                | 266     |      |   |       
|Discontinued Operations               |  |                | 159     |      |   |       
|Other exp                             |  |                | 1,895   |      |   | 1,841  
|Accrued expenses                      |  |                | 1,213   |      |   | 1,371  
|                                      |  |                |         |      |   |        
|Deferred tax assets                   |  |                | 319,723 |      |   | 231,649
|Less valuation allowance              |  |                | 256,623 |      |   | 175,983
|                                      |  |                |         |      |   |        
|                                      |  |                | 63,100  |      |   | 55,666 
|                                      |  |                |         |      |   |        
|Deferred tax liabilities:             |  |                |         |      |   |        
|Fixed assets                          |  |                | 63,100  |      |   | 46,803 
|Intangible Assets                     |  |                |        |      |   | 8,863  
|                                      |  |                |         |      |   |        
|                                      |  |                | 63,100  |      |   | 55,666 
|                                      |  |                |         |      |   |        
|Net deferred tax liability            |  | $              |        |      | $ |       
|                                      |  |                |         |      |   |        



At December 31, 2003,
the Company had available approximately $534.0 million of net operating loss carry forwards for federal income tax purposes. This carry forward, which may provide future tax benefits, begins to expire in 2019. Under the provisions of the Internal
Revenue Code, certain substantial changes in the Companys ownership may limit the amount of federal net operating loss carry forwards that could be used in future years to offset taxable income and taxes payable. The Company also had available
approximately $204.6 million of net tax operating loss carry forwards for state income tax purposes which will begin to expire in 2012.



The state net operating loss carryover excludes the carry over available in various states in which IWO files. The net operating loss carryover for these
states is dependent upon the income tax apportionment percentage in effect for the year that the net operating loss will be utilized.



In assessing the possibility of realization of deferred tax assets at December 31, 2003, the Company considered whether it was more likely than not that
some portion or all of the deferred tax assets would not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become
deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these considerations, the Company provided a valuation allowance
to reduce the carrying value of certain of its deferred tax assets



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



At April 1, 2002, the valuation allowance on the deferred tax assets was reduced due to the
acquisition of IWO and GA PCS. The Company reduced goodwill related to the acquisition of IWO and GA PCS to reflect the reduction in the valuation allowance.



9. Stockholders Equity



The Company is authorized by its Articles of Incorporation to issue 800 million shares of common stock, $0.01 par value, and 200 million shares of no par
preferred stock, of which 128,831,535 shares of common stock and 0 shares of preferred stock are issued and outstanding at December 31, 2003. The Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights,
redemption rights and other privileges and restrictions applicable to the preferred stock.



Effective April 1, 2002, the Company converted all of its 56.5 million shares of Class B common stock to Class A common stock and changed the name of Class A common stock to common stock.



10. Stock Option Plan



During 1999, the Board of Directors amended and modified the 1998 Equity Plan to the US Unwired Inc. 1999 Equity Incentive
Plan (the 1999 Equity Plan). As part of this amendment, the maximum aggregate amount of Common Stock with respect to which options or other awards may be granted was increased from 8,528,640 to 12,259,920 shares. As of December 31, 2003, 3,099,259
shares of common stock were available for future grants under the 1999 Equity Plan.



The following summarizes stock option activity and related information:



|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|------------------------------------------------------------------- |  | ---------------------------------------- | - | ---- | ------------------------------- | ---- | ------ | ----- | - | ------------------------------- | - | ------ |  | ----- | ------------------------------- |  | - | ----
|                                                                    |  | Year ended December 31,                 
|                                                                    |  | 2003                                     |   | 2002 |                                 | 2001
|                                                                    |  | Shares                                   |   |      | Weighted Average Exercise Price |      | Shares |       |   | Weighted Average Exercise Price |   | Shares |  |       | Weighted Average Exercise Price
|                                                                    |  | (In thousands, except per share amounts)
|Outstanding  beginning of year                                     |  | 7,511                                    |   |      | $                               | 3.69 |        | 6,626 |   |                                 | $ | 3.69   |  | 6,937 |                                 |  | $ | 4.54
|Granted                                                             |  | 1,842                                    |   |      | $                               | 0.12 |        | 1,148 |   |                                 | $ | 4.78   |  | 452   |                                 |  | $ | 6.81
|Exercised                                                           |  |                                         |   |      | $                               |     |        | (43   | ) |                                 | $ | 4.98   |  | (409  | )                               |  | $ | 4.30
|Forfeited                                                           |  | (644                                     | ) |      | $                               | 4.73 |        | (220  | ) |                                 | $ | 5.38   |  | (354  | )                               |  | $ | 6.35
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Outstanding  end of year                                           |  | 8,709                                    |   |      | $                               | 3.66 |        | 7,511 |   |                                 | $ | 4.62   |  | 6,626 |                                 |  | $ | 4.61
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Exercisable  end of year                                           |  | 5,541                                    |   |      | $                               | 4.11 |        | 3,931 |   |                                 | $ | 4.05   |  | 2,312 |                                 |  | $ | 3.69
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Weighted average fair value of options granted with exercise price: |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Equal to market price                                               |  |                                          |   |      | $                               |     |        |       |   |                                 | $ | 4.78   |  |       |                                 |  | $ |    
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Less than market price                                              |  |                                          |   |      | $                               |     |        |       |   |                                 | $ |       |  |       |                                 |  | $ |    
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     
|Greater than market price                                           |  |                                          |   |      | $                               | 0.12 |        |       |   |                                 | $ |       |  |       |                                 |  | $ | 6.81
|                                                                    |  |                                          |   |      |                                 |      |        |       |   |                                 |   |        |  |       |                                 |  |   |     



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



The following table summarizes information concerning outstanding options at December 31, 2003:



|                        |  |                                             |  |                              
|----------------------- |  | ------------------------------------------- |  | -----------------------------
|Range of Exercise Price |  | Weighted Average Remaining Contractual Life |  | Number of Options Outstanding
|$  0.12                 |  | 9.2 years                                   |  | 1,717,500                    
|$  1.13                 |  | 5.6 years                                   |  | 2,530,258                    
|$  4.77                 |  | 8.2 years                                   |  | 750,000                      
|$  4.98                 |  | 6.0 years                                   |  | 2,123,089                    
|$  5.06                 |  | 7.2 years                                   |  | 19,625                       
|$  5.12                 |  | 8.3 years                                   |  | 99,250                       
|$  6.81                 |  | 7.3 years                                   |  | 386,750                      
|$  8.72                 |  | 5.8 years                                   |  | 200,000                      
|$11.00                  |  | 5.6 years                                   |  | 882,854                      



All options granted
under the 1999 Equity Plan have a ten-year term and vest over a four-year period. As allowed by SFAS No. 123, the Company has elected to continue to follow APB Opinion No. 25, Accounting for Stock Issued to Employees, which does not provide for
compensation expense on the issuance of stock options if the option terms are fixed and the exercise price equals or exceeds the fair value of the underlying stock on the grant date.



In connection with these options, the Company has total deferred stock compensation of $18.3 million, of which $2.4 million,
$4.3 million and $4.6 million has been recognized as stock compensation expense for the years ended December 31, 2003, 2002 and 2001, respectively, as the exercise prices of these options were less than the estimated fair value of the Companys
stock at the grant date. The non-cash compensation expense of $0.1 million, $2.2 million and $0.1 million was related to cost of services, general and



administrative and sales and marketing, respectively for 2003; $0.1 million, $4.1 million and $0.1 million was related to cost of services, general and
administrative and sales and marketing, respectively for 2002; and $0.1 million, $4.3 million and $0.2 million was related to cost of services, general and administrative and sales and marketing, respectively for 2001.



As required by SFAS No. 123, the Company determined the pro forma information
as if the Company had accounted for stock options granted under the fair value method of SFAS No. 123. The Black-Scholes option-pricing model was used with the following weighted average assumptions:



|                                          |  |                         |   |  |      |   |  |      |  
|----------------------------------------- |  | ----------------------- | - |  | ---- | - |  | ---- | -
|                                          |  | Year ended December 31, |  
|                                          |  | 2003                    |   |  | 2002 |   |  | 2001 |  
|Risk-free interest rate                   |  | 3.49                    | % |  | 5.02 | % |  | 5.93 | %
|Expected dividend yield                   |  | 0                       |   |  | 0    |   |  | 0    |  
|Expected volatility                       |  | 1.43                    |   |  | .82  |   |  | .72  |  
|Weighted average expected life (in years) |  | 7                       |   |  | 7    |   |  | 7    |  



11. Commitments and Contingencies



The Company uses Sprint PCS to process all post-pay
subscriber billings including monthly recurring charges, airtime and other charges such as interconnect fees. The Company pays various fees to Sprint PCS for new subscribers as well as recurring monthly fees for services performed for existing
customers including billing



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



and management of customer accounts. Sprint PCSs billing for these services is based upon an estimate of the actual costs incurred by Sprint PCS to
provide such services. At the end of each calendar year, Sprint PCS compares its actual costs to provide such services to remittances by the Company for estimated billings and either refunds overpayments or bills for costs in excess of the payments
made. Based upon information as provided by Sprint PCS, the Company believes it has adequately provided for the above-mentioned costs in the accompanying consolidated financial statements. Additionally, Sprint PCS has contracted with national
retailers that sell handsets and service to new subscribers in the Companys markets. Sprint PCS pays these national retailers a new subscriber commission and provides handsets to such retailers below cost. Sprint PCS passes these costs of
commissions and the handset subsidies to the Company.



The
Company periodically reviews all charges from Sprint PCS and from time to time, the Company may dispute certain of these charges. As of December 31, 2003, the Company had disputed approximately $19.1 million of charges to US Unwired and $9.3 of
charges to IWO. Based upon the information provided to the Company by Sprint PCS to date, the Company believes the accompanying consolidated balance sheet adequately reflects its obligation that may be due to Sprint PCS for these charges.



On July 11, 2003, the Company and two of its subsidiaries,
Louisiana Unwired, LLC and Texas Unwired (the Company), filed suit in the U.S. District Court for the Western District of Louisiana, against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom, Inc. (collectively,
Sprint). The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty and fraud arising out of Sprints conduct in its dealings with the plaintiff companies. It seeks treble actual
damages in unspecified amounts and appointment of a receiver over property and assets controlled by Sprint in Louisiana. On September 25, 2003, the Company filed an amended complaint to include contractual claims. On October 20, 2003, Sprint
submitted their Answer, Defenses, and Counterclaim of Defendants seeking dismissal of US Unwireds First Amended Complaint and filing a counter-claim for approximately $13.3 million related primarily to contractual disputes as discussed above.
On October 21, 2003, Sprint filed a Defendants Partial Motion for Judgment on the Proceedings seeking partial dismissal of claims filed in the First Amended Complaint. On October 21, 2003, Sprint filed Defendants Motion to Strike
Plaintiffs Jury Demand from the First Amended Complaint. On February 3, 2004, the U.S. District Court denied in all respects Sprints motions for judgment on the proceedings, allowed US Unwired to hire an outside accounting company to
monitor monies with a receiver as an acceptable option at a later time and agreed with US Unwireds request for a trial by jury in Louisiana. US Unwired and Sprint have submitted to the District Court an agreed upon schedule to complete the
discovery process during 2004 and anticipate a late-2004 trial date.The Company does not believe that a negative outcome of its lawsuit will have a material adverse effect on the Company.



The Company is involved in, various other claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Companys consolidated financial position, results of operations or liquidity.



Employees of the Company participate in a 401(k) retirement plan (the
401(k) plan). Employees are eligible to participate in the 401(k) plan when the employee has completed six months of service. Under the 401(k) plan, participating employees may defer a portion of their pretax earnings up to certain limits prescribed
by the Internal Revenue Service. The Company contributes a discretionary match equal to a percentage of the deferred by the employee. The Companys contributions are fully vested upon the completion of 5 years of service. Contribution expense
related to the 401(k) plan were approximately $0.6 million, $0.8 million and $0.5 million for the years ended December 31, 2003, 2002 and 2001, respectively.



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##### Table of Contents

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



The Companys PCS licenses and the PCS licenses that the Company operates for Sprint PCS are
subject to a requirement that the Company construct network facilities that offer coverage to 25% of the population or have substantial service in each of its Basic Trading Areas (BTAs) within five years from the grant of the licenses.
As of December 31, 2003, management believes that Sprint PCS has met the requirements necessary for the licenses that the Company operates for Sprint PCS under the Sprint PCS management agreements and that the Company has met the requirements
necessary for the licenses that it owns.



The Company is a
party to various non-cancelable operating leases for facilities and equipment. Future minimum lease payments due under non-cancelable operating leases with terms in excess of one year are as follows:



|                         |  |                |         |     |   |        |  |   |        
|------------------------ |  | -------------- | ------- | --- | - | ------ |  | - | -------
|                         |  | US Unwired     |         | IWO |   | Total 
|                         |  | (In thousands)
|Year ending December 31, |  |                |         |     |   |        |  |   |        
|2004                     |  | $              | 23,758  |     | $ | 16,209 |  | $ | 39,967 
|2005                     |  |                | 22,191  |     |   | 16,028 |  |   | 38,219 
|2006                     |  |                | 19,954  |     |   | 13,100 |  |   | 33,054 
|2007                     |  |                | 19,049  |     |   | 7,737  |  |   | 26,786 
|2008                     |  |                | 18,539  |     |   | 4,949  |  |   | 23,488 
|Thereafter               |  |                | 46,875  |     |   | 14,372 |  |   | 61,247 
|                         |  |                |         |     |   |        |  |   |        
|                         |  | $              | 150,366 |     | $ | 72,395 |  | $ | 222,761
|                         |  |                |         |     |   |        |  |   |        



Rental expense was
$34.1 million, $28.0 million and $12.9 million for the years ended December 31, 2003, 2002 and 2001, respectively.



The Company has agreed to guarantee repayment of up to approximately $2.5 million plus all interest and expenses, pursuant to a loan agreement dated May
16, 1997, related to bank financing obtained by Gulf Coast Wireless that matures in 2007.



12. Disclosure About Fair Value of Financial Instruments



The carrying amounts of cash and cash equivalents, subscriber receivables, accrued interest and other receivables, and accounts payable and accrued
expenses approximate fair value because of the short-term nature of these items. The estimated fair value and carrying values of the Companys senior subordinated discount notes at December 31, 2003 and 2002 was:



|                                                   |  |                    |         |            |   |               |  |           |         |  |   |       
|-------------------------------------------------- |  | ------------------ | ------- | ---------- | - | ------------- |  | --------- | ------- |  | - | ------
|                                                   |  | As of December 31,
|                                                   |  | 2003               |         | 2002      
|                                                   |  | CarryingValue      |         | Fair Value |   | CarryingValue |  | FairValue
|US Unwired Inc. senior subordinated discount notes |  | $                  | 359,302 |            | $ | 290,000       |  | $         | 315,707 |  | $ | 14,500
|IWO Holdings, Inc. senior notes                    |  |                    | 138,513 |            |   | 24,800        |  |           | 137,022 |  |   | 25,000
|                                                   |  |                    |         |            |   |               |  |           |         |  |   |       
|                                                   |  | $                  | 497,815 |            | $ | 314,800       |  | $         | 452,729 |  | $ | 39,500
|                                                   |  |                    |         |            |   |               |  |           |         |  |   |       



The fair value of
these notes is based on the most recently available trading prices. The carrying amount of substantially all of the remainder of the Companys long-term debt approximates fair value due to the borrowings variable interest rates.



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Fair value estimates are subject to inherent limitations. Estimates of fair value are made at a
specific point in time, based on relevant market information and information about the financial instrument. The estimated fair values of financial instruments presented above are not necessarily indicative of amounts the Company might realize in
actual market transactions. Estimates of fair value are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the
estimates.



13. Related Party Transactions



The Company contracted with Unibill, Inc. (Unibill), a subsidiary of Cameron
Communications LLC (Cameron), for a portion of its subscriber billing and programming. The aggregate amounts paid to Cameron for such services during the years ended December 31, 2003, 2002 and 2001 totaled $1.7 million, $1.9 million and
$5.5 million, respectively. Additionally, the Company leases office space, equipment and warehouse space from Unibill. The Company paid Unibill $0.3 million during each of the years ended December 31, 2003, 2002 and 2001 to lease these properties.



The Company also purchases long distance services from Cameron
pursuant to a verbal agreement and resells the service to the Companys customers. The aggregate amounts paid to Cameron for such services during the years ended December 31, 2003, 2002 and 2001, totaled $0.3 million, $2.9 million and $6.6
million, respectively. Cameron also provides circuit and interconnect services to the Company and was paid $0.4 million, $0.4 million and $0.4 million for the years ended December 31, 2003, 2002 and 2001, respectively. The Company leases tower space
and paid Cameron $0.1 million, $0.1 million and $0.1 million for the years ended December 31, 2003, 2002 and 2001, respectively. The Company also leases time on the Cameron corporate jet at rate of $3.00 per nautical mile and paid Cameron $32,000,
$0.2 million and $0.2 million for the years ended December 31, 2003, 2002 and 2001, respectively. In addition, the Company sold a tract of vacant land in 2001 to this related entity for $0.8 million.



During the years ended December 31, 2002 and 2001, the Company paid $1.7
million and $1.7 million, respectively, to a company owned by certain of the Companys principal stockholders for internet, voice mail services and local telephone service which the Company uses in its business. There was no such amount in
2003. The Company leases office space to this related entity and realized rental income of $0.7 million and $0.4 million for the years ended December 31, 2002 and 2001, respectively. There was no such amount in 2003.



The Company has entered into management agreements with affiliated entities.
During the years ended December 31, 2002, and 2001, the Company recorded $0.2 million and $3.1 million respectively, in management fee revenues pursuant to these agreements. There was no such amount in 2003.



14. Selected Quarterly Financial Data (Unaudited)



|                                 |  |                |         |   |                |   |         |               |  |   |                |   |  |   |         |  
|-------------------------------- |  | -------------- | ------- | - | -------------- | - | ------- | ------------- |  | - | -------------- | - |  | - | ------- | -
|                                 |  | First Quarter  |         |   | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter |  
|                                 |  | (In thousands) |        
|2003 (1)                         |  |                |         |  
|Revenues                         |  | $              | 124,730 |   |                | $ | 133,680 |               |  | $ | 139,306        |   |  | $ | 138,035 |  
|Operating loss                   |  |                | (37,887 | ) |                |   | (14,570 | )             |  |   | (8,237         | ) |  |   | (11,405 | )
|Net loss                         |  |                | (57,472 | ) |                |   | (35,020 | )             |  |   | (31,307        | ) |  |   | (33,155 | )
|                                 |  |                |         |  
|Basic and diluted loss per share |  | $              | (0.45   | ) |                | $ | (0.27   | )             |  | $ | (0.25          | ) |  | $ | (0.25   | )



F-30



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



|                                 |  |                |         |   |                |   |         |               |  |   |                |   |  |   |          |  
|-------------------------------- |  | -------------- | ------- | - | -------------- | - | ------- | ------------- |  | - | -------------- | - |  | - | -------- | -
|                                 |  |                |         |  
|                                 |  | First Quarter  |         |   | Second Quarter |   |         | Third Quarter |  |   | Fourth Quarter |  
|                                 |  | (In thousands) |        
|2002 (1)                         |  |                |         |  
|Revenues                         |  | $              | 85,565  |   |                | $ | 137,865 |               |  | $ | 143,656        |   |  | $ | 144,478  |  
|Operating loss                   |  |                | (21,432 | ) |                |   | (33,089 | )             |  |   | (35,834        | ) |  |   | (429,197 | )
|Net loss                         |  |                | (28,361 | ) |                |   | (49,746 | )             |  |   | (53,803        | ) |  |   | (450,568 | )
|                                 |  |                |         |  
|Basic and diluted loss per share |  | $              | (0.33   | ) |                | $ | (0.39   | )             |  | $ | (0.42          | ) |  | $ | (3.79    | )

---

|(1) | On September 15, 2003, the Company executed an agreement for the sale of its cellular operations. The unaudited quarterly financial information reflects the Companys cellular
operations as a discontinued operation in compliance with Statement of Financial Accounting Standards No. 144. The table below summarizes the operating results of the Companys discontinued operation and must be consolidated with the table
above to reconcile to prior SEC filings.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Discontinued operations (unaudited):



|                                 |  |                |       |                |   |               |  |                |       |  |   |      
|-------------------------------- |  | -------------- | ----- | -------------- | - | ------------- |  | -------------- | ----- |  | - | -----
|                                 |  | First Quarter  |       | Second Quarter |   | Third Quarter |  | Fourth Quarter
|                                 |  | (In thousands)
|2003                             |  |                |      
|Revenues                         |  | $              | 4,017 |                | $ | 3,823         |  | $              | 3,626 |  | $ | 3,278
|Operating loss                   |  |                | 844   |                |   | 850           |  |                | 606   |  |   | 523  
|Net loss                         |  |                |      |                |   |              |  |                |      |  |   |     
|                                 |  |                |       |               
|Basic and diluted loss per share |  |                |      |                |   |              |  |                |      |  |   |     
|                                 |  |                |       |               
|                                 |  | First Quarter  |       | Second Quarter |   | Third Quarter |  | Fourth Quarter
|                                 |  | (In thousands)
|2002                             |  |                |      
|Revenues                         |  | $              | 6,505 |                | $ | 6,547         |  | $              | 5,162 |  | $ | 4,302
|Operating loss                   |  |                | 2,673 |                |   | 2,959         |  |                | 1,640 |  |   | 1,000
|Net loss                         |  |                |      |                |   |              |  |                |      |  |   |     
|                                 |  |                |       |               
|Basic and diluted loss per share |  |                |      |                |   |              |  |                |      |  |   |     



15. Condensed Consolidating
Financial Information



As discussed in Note 7, the US
Unwired senior subordinated discount notes are guaranteed by certain of the Companys subsidiaries. The following information presents the condensed consolidating balance sheets as of December 31, 2003 and 2002 and the condensed consolidating
statements of operations and cash flows for the years ended December 31, 2003, 2002 and 2001 of (a) the Parent Company, US Unwired Inc., (b) the Guarantors, Unwired Telecom Corporation and Louisiana Unwired, and (c) the
Non-Guarantor, IWO Holding Inc. and includes eliminating entries and the Company on a consolidated basis.



The separate consolidated financial statements of IWO, including disclosure of condensed consolidating financial information for IWO, are included in
IWOs separate Form 10-K filing.



F-31



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Balance Sheet



|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|----------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | ------------------------------------ | -------- | - | -------------------- | - | -------- | ------------ |  | - | ---------- | - |  | - | -------- | -
|                                                                              |  | As of December 31, 2003 |         
|                                                                              |  | USUnwiredInc. (Parent)  |          |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorporation(Non-Guarantor) |          |   | ConsolidatingEntries |   |          | Consolidated | 
|                                                                              |  | (In thousands)          |         
|ASSETS:                                                                       |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current Assets:                                                               |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Cash and cash equivalents                                                     |  | $                       | 60,424   |   |                                      | $ | 911    |                                |  | $ | 3,521            |   |  | $                                    | 4,432    |   |                      | $ | 32,337   |              |  | $ |           |   |  | $ | 97,193   |  
|Restricted cash and US Treasury securities at amortized cost-held to maturity |  |                         |         |   |                                      |   |       |                                |  |   |                 |   |  |                                      |         |   |                      |   | 19,358   |              |  |   |           |   |  |   | 19,358   |  
|Subscriber receivables, net                                                   |  |                         |         |   |                                      |   | 155    |                                |  |   | 18,594           |   |  |                                      | 18,749   |   |                      |   | 9,938    |              |  |   |           |   |  |   | 28,687   |  
|Other receivables                                                             |  |                         | 52       |   |                                      |   |       |                                |  |   | 2,425            |   |  |                                      | 2,425    |   |                      |   | 148      |              |  |   |           |   |  |   | 2,625    |  
|Inventory                                                                     |  |                         |         |   |                                      |   |       |                                |  |   | 3,996            |   |  |                                      | 3,996    |   |                      |   | 1,619    |              |  |   |           |   |  |   | 5,615    |  
|Prepaid expenses and other assets                                             |  |                         | 1,297    |   |                                      |   |       |                                |  |   | 7,817            |   |  |                                      | 7,817    |   |                      |   | 5,719    |              |  |   |           |   |  |   | 14,833   |  
|Receivables from (payables to) related parties                                |  |                         | (147     | ) |                                      |   | (97    | )                              |  |   | 930              |   |  |                                      | 833      |   |                      |   | (39      | )            |  |   |           |   |  |   | 647      |  
|Receivables from officers                                                     |  |                         | 85       |   |                                      |   |       |                                |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   |           |   |  |   | 85       |  
|Current assets related to discontinued operations                             |  |                         |         |   |                                      |   | 1,049  |                                |  |   |                 |   |  |                                      | 1,049    |   |                      |   |         |              |  |   |           |   |  |   | 1,049    |  
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current assets                                                          |  |                         | 61,711   |   |                                      |   | 2,018  |                                |  |   | 37,283           |   |  |                                      | 39,301   |   |                      |   | 69,080   |              |  |   |           |   |  |   | 170,092  |  
|Property and equipment, net                                                   |  |                         | 10,210   |   |                                      |   | 1,107  |                                |  |   | 234,298          |   |  |                                      | 235,405  |   |                      |   | 165,872  |              |  |   | 31         |   |  |   | 411,518  |  
|Goodwill and other intangible assets, net                                     |  |                         |         |   |                                      |   |       |                                |  |   | 61,848           |   |  |                                      | 61,848   |   |                      |   | 25,642   |              |  |   |           |   |  |   | 87,490   |  
|Notes receivable from unconsolidated affiliates                               |  |                         | 143,234  |   |                                      |   | 33,623 |                                |  |   |                 |   |  |                                      | 33,623   |   |                      |   | 179      |              |  |   | (175,149   | ) |  |   | 1,887    |  
|Other assets                                                                  |  |                         | 12,211   |   |                                      |   |       |                                |  |   | 13,820           |   |  |                                      | 13,820   |   |                      |   | 16,540   |              |  |   |           |   |  |   | 42,571   |  
|Non-current assets related to discontinued operations                         |  |                         |         |   |                                      |   | 4,770  |                                |  |   |                 |   |  |                                      | 4,770    |   |                      |   |         |              |  |   |           |   |  |   | 4,770    |  
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total assets                                                                  |  | $                       | 227,366  |   |                                      | $ | 41,518 |                                |  | $ | 347,249          |   |  | $                                    | 388,767  |   |                      | $ | 277,313  |              |  | $ | (175,118   | ) |  | $ | 718,328  |  
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):                               |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current liabilities:                                                          |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Accounts payable                                                              |  | $                       | 745      |   |                                      | $ | 340    |                                |  | $ | 23,213           |   |  | $                                    | 23,553   |   |                      | $ | 17,079   |              |  | $ |           |   |  | $ | 41,377   |  
|Accrued expenses                                                              |  |                         | 6,546    |   |                                      |   | 685    |                                |  |   | 31,655           |   |  |                                      | 32,340   |   |                      |   | 38,251   |              |  |   |           |   |  |   | 77,137   |  
|Current maturities of long term debt                                          |  |                         | 42,351   |   |                                      |   | 64     |                                |  |   | 143,700          |   |  |                                      | 143,764  |   |                      |   | 351,697  |              |  |   | (174,970   | ) |  |   | 362,842  |  
|Current liabilities related to discontinued operations                        |  |                         |         |   |                                      |   | 49     |                                |  |   |                 |   |  |                                      | 49       |   |                      |   |         |              |  |   |           |   |  |   | 49       |  
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current liabilities                                                     |  |                         | 49,642   |   |                                      |   | 1,138  |                                |  |   | 198,568          |   |  |                                      | 199,706  |   |                      |   | 407,027  |              |  |   | (174,970   | ) |  |   | 481,405  |  
|Long term debt, net of current maturities                                     |  |                         | 428,139  |   |                                      |   | 247    |                                |  |   | 6,359            |   |  |                                      | 6,606    |   |                      |   |         |              |  |   |           |   |  |   | 434,745  |  
|Deferred gain                                                                 |  |                         |         |   |                                      |   |       |                                |  |   | 29,836           |   |  |                                      | 29,836   |   |                      |   | 893      |              |  |   |           |   |  |   | 30,729   |  
|Investments in and advance to unconsolidated affiliates                       |  |                         | 31,095   |   |                                      |   | 1,857  |                                |  |   | 130,800          |   |  |                                      | 132,657  |   |                      |   |         |              |  |   | (162,536   | ) |  |   | 1,216    |  
|Stockholders equity (deficit):                                               |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Common stock                                                                  |  |                         | 1,288    |   |                                      |   |       |                                |  |   |                 |   |  |                                      |         |   |                      |   | 1        |              |  |   | (1         | ) |  |   | 1,288    |  
|Additional paid in capital                                                    |  |                         | 656,020  |   |                                      |   | 1,947  |                                |  |   | 803,808          |   |  |                                      | 805,755  |   |                      |   | 446,449  |              |  |   | (1,253,325 | ) |  |   | 654,899  |  
|Retained deficit                                                              |  |                         | (938,808 | ) |                                      |   | 36,329 |                                |  |   | (822,122         | ) |  |                                      | (785,793 | ) |                      |   | (577,057 | )            |  |   | 1,415,893  |   |  |   | (885,765 | )
|Promissory note                                                               |  |                         |         |   |                                      |   |       |                                |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   | (179       | ) |  |   | (179     | )
|Treasury stock                                                                |  |                         | (10      | ) |                                      |   |       |                                |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   |           |   |  |   | (10      | )
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total stockholders equity (deficit)                                          |  |                         | (281,510 | ) |                                      |   | 38,276 |                                |  |   | (18,314          | ) |  |                                      | 19,962   |   |                      |   | (130,607 | )            |  |   | 162,388    |   |  |   | (229,767 | )
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total liabilities and stockholders equity (deficit)                          |  | $                       | 227,366  |   |                                      | $ | 41,518 |                                |  | $ | 347,249          |   |  | $                                    | 388,767  |   |                      | $ | 277,313  |              |  | $ | (175,118   | ) |  | $ | 718,328  |  
|                                                                              |  |                         |          |   |                                      |   |        |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  



F-32



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Balance Sheet



|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|----------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | ------------------------------------ | -------- | - | -------------------- | - | -------- | ------------ |  | - | ---------- | - |  | - | -------- | -
|                                                                              |  | As of December 31, 2002 |         
|                                                                              |  | USUnwiredInc. (Parent)  |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorporation(Non-Guarantor) |          |   | ConsolidatingEntries |   |          | Consolidated | 
|                                                                              |  | (In thousands)          |         
|ASSETS:                                                                       |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current Assets:                                                               |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Cash and cash equivalents                                                     |  | $                       | 23,025   |   |                                      | $ | 2,605                          |  | $ | 1,347            |   |  | $                                    | 3,952    |   |                      | $ | 35,008   |              |  | $ |           |   |  | $ | 61,985   |  
|Restricted cash and US Treasury securities at amortized cost-held to maturity |  |                         |         |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   | 33,218   |              |  |   |           |   |  |   | 33,218   |  
|Subscriber receivables, net                                                   |  |                         |         |   |                                      |   | 382                            |  |   | 34,481           |   |  |                                      | 34,863   |   |                      |   | 11,843   |              |  |   |           |   |  |   | 46,706   |  
|Other receivables                                                             |  |                         | 33       |   |                                      |   |                               |  |   | 1,030            |   |  |                                      | 1,030    |   |                      |   | 1,597    |              |  |   |           |   |  |   | 2,660    |  
|Inventory                                                                     |  |                         |         |   |                                      |   |                               |  |   | 2,637            |   |  |                                      | 2,637    |   |                      |   | 2,579    |              |  |   |           |   |  |   | 5,216    |  
|Prepaid expenses and other assets                                             |  |                         | 1,012    |   |                                      |   |                               |  |   | 9,323            |   |  |                                      | 9,323    |   |                      |   | 4,679    |              |  |   |           |   |  |   | 15,014   |  
|Receivables from (payables to) related parties                                |  |                         | (1,362   | ) |                                      |   | 402                            |  |   | 1,307            |   |  |                                      | 1,709    |   |                      |   | 320      |              |  |   | 14         |   |  |   | 681      |  
|Receivables from officers                                                     |  |                         | 101      |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   |           |   |  |   | 101      |  
|Current assets related to discontinued operations                             |  |                         |         |   |                                      |   | 1,184                          |  |   |                 |   |  |                                      | 1,184    |   |                      |   |         |              |  |   |           |   |  |   | 1,184    |  
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current assets                                                          |  |                         | 22,809   |   |                                      |   | 4,573                          |  |   | 50,125           |   |  |                                      | 54,698   |   |                      |   | 89,244   |              |  |   | 14         |   |  |   | 166,765  |  
|Property and equipment, net                                                   |  |                         | 11,844   |   |                                      |   | 1,958                          |  |   | 273,261          |   |  |                                      | 275,219  |   |                      |   | 189,878  |              |  |   |           |   |  |   | 476,941  |  
|Restricted cash                                                               |  |                         |         |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   | 8,000    |              |  |   |           |   |  |   | 8,000    |  
|Goodwill and other intangible assets, net                                     |  |                         |         |   |                                      |   |                               |  |   | 74,736           |   |  |                                      | 74,736   |   |                      |   | 55,517   |              |  |   |           |   |  |   | 130,253  |  
|Notes receivable from unconsolidated affiliates                               |  |                         | 187,600  |   |                                      |   | 25,609                         |  |   |                 |   |  |                                      | 25,609   |   |                      |   | 174      |              |  |   | (211,572   | ) |  |   | 1,811    |  
|Other assets                                                                  |  |                         | 11,572   |   |                                      |   |                               |  |   | 11,295           |   |  |                                      | 11,295   |   |                      |   | 17,612   |              |  |   |           |   |  |   | 40,479   |  
|Non-current assets related to discontinued operations                         |  |                         |         |   |                                      |   | 7,181                          |  |   |                 |   |  |                                      | 7,181    |   |                      |   |         |              |  |   |           |   |  |   | 7,181    |  
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total assets                                                                  |  | $                       | 233,825  |   |                                      | $ | 39,321                         |  | $ | 409,417          |   |  | $                                    | 448,738  |   |                      | $ | 360,425  |              |  | $ | (211,558   | ) |  | $ | 831,430  |  
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):                               |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current liabilities:                                                          |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Accounts payable                                                              |  | $                       | 1,164    |   |                                      | $ | 1,054                          |  | $ | 11,089           |   |  | $                                    | 12,143   |   |                      | $ | 14,994   |              |  | $ |           |   |  | $ | 28,301   |  
|Accrued expenses                                                              |  |                         | 3,803    |   |                                      |   | 775                            |  |   | 33,726           |   |  |                                      | 34,501   |   |                      |   | 29,320   |              |  |   |           |   |  |   | 67,624   |  
|Current maturities of long term debt                                          |  |                         | 28,313   |   |                                      |   | 59                             |  |   | 188,044          |   |  |                                      | 188,103  |   |                      |   |         |              |  |   | (211,398   | ) |  |   | 5,018    |  
|Current liabilities related to discontinued operations                        |  |                         |         |   |                                      |   | 41                             |  |   |                 |   |  |                                      | 41       |   |                      |   |         |              |  |   |           |   |  |   | 41       |  
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current liabilities                                                     |  |                         | 33,280   |   |                                      |   | 1,929                          |  |   | 232,859          |   |  |                                      | 234,788  |   |                      |   | 44,314   |              |  |   | (211,398   | ) |  |   | 100,984  |  
|Long term debt, net of current maturities                                     |  |                         | 404,860  |   |                                      |   | 310                            |  |   | 6,825            |   |  |                                      | 7,135    |   |                      |   | 350,207  |              |  |   |           |   |  |   | 762,202  |  
|Deferred gain                                                                 |  |                         |         |   |                                      |   |                               |  |   | 33,523           |   |  |                                      | 33,523   |   |                      |   | 951      |              |  |   |           |   |  |   | 34,474   |  
|Investments in and advance to unconsolidated affiliates                       |  |                         | (88,013  | ) |                                      |   | 2,009                          |  |   | 35,240           |   |  |                                      | 37,249   |   |                      |   |         |              |  |   | 54,665     |   |  |   | 3,901    |  
|Non-current liabilities related to discontinued operations                    |  |                         |         |   |                                      |   | 107                            |  |   |                 |   |  |                                      | 107      |   |                      |   |         |              |  |   |           |   |  |   | 107      |  
|Stockholders equity (deficit):                                               |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Common stock                                                                  |  |                         | 1,288    |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   | 1        |              |  |   | (1         | ) |  |   | 1,288    |  
|Additional paid in capital                                                    |  |                         | 659,180  |   |                                      |   | 1,947                          |  |   | 809,067          |   |  |                                      | 811,014  |   |                      |   | 446,449  |              |  |   | (1,259,184 | ) |  |   | 657,459  |  
|Retained deficit                                                              |  |                         | (776,770 | ) |                                      |   | 33,019                         |  |   | (708,097         | ) |  |                                      | (675,078 | ) |                      |   | (481,497 | )            |  |   | 1,204,534  |   |  |   | (728,811 | )
|Promissory note                                                               |  |                         |         |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   | (174       | ) |  |   | (174     | )
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total stockholders equity (deficit)                                          |  |                         | (116,302 | ) |                                      |   | 34,966                         |  |   | 100,970          |   |  |                                      | 135,936  |   |                      |   | (35,047  | )            |  |   | (54,825    | ) |  |   | (70,238  | )
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total liabilities and stockholders equity (deficit)                          |  | $                       | 233,825  |   |                                      | $ | 39,321                         |  | $ | 409,417          |   |  | $                                    | 448,738  |   |                      | $ | 360,425  |              |  | $ | (211,558   | ) |  | $ | 831,430  |  
|                                                                              |  |                         |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  



F-33



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Operations



|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  
|-------------------------------------------------------- |  | ---------------------------- | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | -------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | -------- | -
|                                                         |  | Year ended December 31, 2003 |         
|                                                         |  | US UnwiredInc. (Parent)      |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorp (Non-Guarantor) |          |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                         |  | (In thousands)               |         
|Revenues                                                 |  | $                            | 30,816   |   |                                      | $ |                               |  | $ | 363,717          |   |  | $                              | 363,717  |   |                      | $ | 171,849 |              |  | $ | (30,631 | ) |  | $ | 535,751  |  
|Operating expenses                                       |  |                              | 35,912   |   |                                      |   |                               |  |   | 374,366          |   |  |                                | 374,366  |   |                      |   | 227,197 |              |  |   | (29,625 | ) |  |   | 607,850  |  
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Operating (loss) income                                  |  |                              | (5,096   | ) |                                      |   |                               |  |   | (10,649          | ) |  |                                | (10,649  | ) |                      |   | (55,348 | )            |  |   | (1,006  | ) |  |   | (72,099  | )
|Other income (expense), net                              |  |                              | (44,225  | ) |                                      |   | 1,418                          |  |   | (7,815           | ) |  |                                | (6,397   | ) |                      |   | (40,212 | )            |  |   | 31      |   |  |   | (90,803  | )
|Equity in income (losses) of unconsolidated subsidiaries |  |                              | (113,248 | ) |                                      |   | 392                            |  |   | (95,560          | ) |  |                                | (95,168  | ) |                      |   |        |              |  |   | 211,327 |   |  |   | 2,911    |  
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Income (loss) before income tax benefit                  |  |                              | (162,569 | ) |                                      |   | 1,810                          |  |   | (114,024         | ) |  |                                | (112,214 | ) |                      |   | (95,560 | )            |  |   | 210,352 |   |  |   | (159,991 | )
|Income tax benefit                                       |  |                              | (531     | ) |                                      |   |                               |  |   |                 |   |  |                                |         |   |                      |   |        |              |  |   |        |   |  |   | (531     | )
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  
|(Loss) income from continuing operations                 |  |                              | (162,038 | ) |                                      |   | 1,810                          |  |   | (114,024         | ) |  |                                | (112,214 | ) |                      |   | (95,560 | )            |  |   | 210,352 |   |  |   | (159,460 | )
|Income from discontinued operations                      |  |                              |         |   |                                      |   | 1,500                          |  |   |                 |   |  |                                | 1,500    |   |                      |   |        |              |  |   | 1,006   |   |  |   | 2,506    |  
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Net (loss) income                                        |  | $                            | (162,038 | ) |                                      | $ | 3,310                          |  | $ | (114,024         | ) |  | $                              | (110,714 | ) |                      | $ | (95,560 | )            |  | $ | 211,358 |   |  | $ | (156,954 | )
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |         |              |  |   |         |   |  |   |          |  



F-34



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Operations



|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  
|-------------------------------------------------------- |  | ---------------------------- | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | -------- | - | -------------------- | - | -------- | ------------ |  | - | --------- | - |  | - | --------- | -
|                                                         |  | Year ended December 31, 2002 |         
|                                                         |  | US UnwiredInc. (Parent)      |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorp (Non-Guarantor) |          |   | ConsolidatingEntries |   |          | Consolidated | 
|                                                         |  | (In thousands)               |         
|Revenues                                                 |  | $                            | 29,428   |   |                                      | $ |                               |  | $ | 385,847          |   |  | $                              | 385,847  |   |                      | $ | 124,896  |              |  | $ | (28,607   | ) |  | $ | 511,564   |  
|Operating expenses                                       |  |                              | 38,391   |   |                                      |   |                               |  |   | 439,022          |   |  |                                | 439,022  |   |                      |   | 580,242  |              |  |   | (26,539   | ) |  |   | 1,031,116 |  
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  
|Operating (loss) income                                  |  |                              | (8,963   | ) |                                      |   |                               |  |   | (53,175          | ) |  |                                | (53,175  | ) |                      |   | (455,346 | )            |  |   | (2,068    | ) |  |   | (519,552  | )
|Other income (expense), net                              |  |                              | (37,473  | ) |                                      |   | 912                            |  |   | (8,616           | ) |  |                                | (7,704   | ) |                      |   | (26,151  | )            |  |   |          |   |  |   | (71,328   | )
|Equity in income (losses) of unconsolidated subsidiaries |  |                              | (544,618 | ) |                                      |   | 447                            |  |   | (481,497         | ) |  |                                | (481,050 | ) |                      |   |         |              |  |   | 1,025,017 |   |  |   | (651      | )
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  
|Income (loss) before income tax benefit                  |  |                              | (591,054 | ) |                                      |   | 1,359                          |  |   | (543,288         | ) |  |                                | (541,929 | ) |                      |   | (481,497 | )            |  |   | 1,022,949 |   |  |   | (591,531  | )
|Income tax benefit                                       |  |                              | (781     | ) |                                      |   |                               |  |   |                 |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   | (781      | )
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  
|(Loss) income from continuing operations                 |  |                              | (590,273 | ) |                                      |   | 1,359                          |  |   | (543,288         | ) |  |                                | (541,929 | ) |                      |   | (481,497 | )            |  |   | 1,022,949 |   |  |   | (590,750  | )
|Income from discontinued operations                      |  |                              |         |   |                                      |   | 6,204                          |  |   |                 |   |  |                                | 6,204    |   |                      |   |         |              |  |   | 2,068     |   |  |   | 8,272     |  
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  
|Net (loss) income                                        |  | $                            | (590,273 | ) |                                      | $ | 7,563                          |  | $ | (543,288         | ) |  | $                              | (535,725 | ) |                      | $ | (481,497 | )            |  | $ | 1,025,017 |   |  | $ | (582,478  | )
|                                                         |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                                |          |   |                      |   |          |              |  |   |           |   |  |   |           |  



F-35



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Operations



|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  
|------------------------------------------------------ |  | ---------------------------- | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------- | ------- | - | ------------ | - | ------- | - |  | - | -------- | -
|                                                       |  | Year ended December 31, 2001 |         
|                                                       |  | US UnwiredInc. (Parent)      |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | ConsolidatingEntries |         |   | Consolidated |  
|                                                       |  | (In thousands)               |         
|Revenues                                               |  | $                            | 29,621   |   |                                      | $ |                               |  | $ | 226,425          |   |  | $                    | 226,425 |   |              | $ | (25,826 | ) |  | $ | 230,220  |  
|Operating expenses                                     |  |                              | 42,791   |   |                                      |   |                               |  |   | 293,028          |   |  |                      | 293,028 |   |              |   | (22,021 | ) |  |   | 313,798  |  
|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  
|Operating (loss) income                                |  |                              | (13,170  | ) |                                      |   |                               |  |   | (66,603          | ) |  |                      | (66,603 | ) |              |   | (3,805  | ) |  |   | (83,578  | )
|Other income (expense), net                            |  |                              | (26,332  | ) |                                      |   | 366                            |  |   | 2,491            |   |  |                      | 2,857   |   |              |   |        |   |  |   | (23,475  | )
|Equity in income (losses) of unconsolidated affiliates |  |                              | (64,633  | ) |                                      |   | 431                            |  |   |                 |   |  |                      | 431     |   |              |   | 61,442  |   |  |   | (2,760   | )
|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  
|(Loss) income before income tax benefit                |  |                              | (104,135 | ) |                                      |   | 797                            |  |   | (64,112          | ) |  |                      | (63,315 | ) |              |   | 57,637  |   |  |   | (109,813 | )
|Income tax benefit                                     |  |                              | (1,868   | ) |                                      |   |                               |  |   |                 |   |  |                      |        |   |              |   |        |   |  |   | (1,868   | )
|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  
|(Loss) income from continuing operations               |  |                              | (102,267 | ) |                                      |   | 797                            |  |   | (64,112          | ) |  |                      | (63,315 | ) |              |   | 57,637  |   |  |   | (107,945 | )
|Income from discontinued operations                    |  |                              |         |   |                                      |   | 6,529                          |  |   |                 |   |  |                      | 6,529   |   |              |   | 3,805   |   |  |   | 10,334   |  
|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  
|Net (loss) income                                      |  | $                            | (102,267 | ) |                                      | $ | 7,326                          |  | $ | (64,112          | ) |  | $                    | (56,786 | ) |              | $ | 61,442  |   |  | $ | (97,611  | )
|                                                       |  |                              |          |   |                                      |   |                                |  |   |                  |   |  |                      |         |   |              |   |         |   |  |   |          |  



F-36



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Cash Flows



|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Year ended December 31, 2003 |        
|                                                     |  | US UnwiredInc.(Parent)       |         |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorp (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                     |  | (In thousands)               |        
|Cash flows from operating activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) operating activities  |  | $                            | 2,376   |   |                                      | $ | 5,757  |                                |  | $ | 63,820           |   |  | $                              | 69,577  |   |                      | $ | (11,250 | )            |  | $ | (62     | ) |  | $ | 60,641  |  
|                                                     |  |                              |         |   |                                      |   |       
|Cash flows from investing activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Payments for the purchase of equipment               |  |                              | (378    | ) |                                      |   | (54    | )                              |  |   | (16,836          | ) |  |                                | (16,890 | ) |                      |   | (13,354 | )            |  |   | 136     |   |  |   | (30,486 | )
|Proceeds from the sale of assets                     |  |                              |        |   |                                      |   | 350    |                                |  |   |                 |   |  |                                | 350     |   |                      |   | 74      |              |  |   | (74     | ) |  |   | 350     |  
|Proceeds from restricted cash                        |  |                              |        |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   | 21,859  |              |  |   |        |   |  |   | 21,859  |  
|Investments in unconsolidated affiliates             |  |                              |        |   |                                      |   | 250    |                                |  |   |                 |   |  |                                | 250     |   |                      |   |        |              |  |   |        |   |  |   | 250     |  
|Disbursement of intercompany note                    |  |                              | 44,366  |   |                                      |   | (7,938 | )                              |  |   |                 |   |  |                                | (7,938  | ) |                      |   |        |              |  |   | (36,428 | ) |  |   |        |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) investing activities  |  |                              | 43,988  |   |                                      |   | (7,392 | )                              |  |   | (16,836          | ) |  |                                | (24,228 | ) |                      |   | 8,579   |              |  |   | (36,366 | ) |  |   | (8,027  | )
|                                                     |  |                              |         |   |                                      |   |       
|Cash flows from financing activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Proceeds from long-term debt                         |  |                              | 8,717   |   |                                      |   |       |                                |  |   | 46,550           |   |  |                                | 46,550  |   |                      |   |        |              |  |   | (55,267 | ) |  |   |        |  
|Proceeds from stock options exercised                |  |                              |        |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |        |  
|Proceeds from promissory notes                       |  |                              |        |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |        |  
|Principal payments of long-term debt                 |  |                              | (14,994 | ) |                                      |   | (59    | )                              |  |   | (91,360          | ) |  |                                | (91,419 | ) |                      |   |        |              |  |   | 91,695  |   |  |   | (14,718 | )
|Debt issuance costs                                  |  |                              | (2,688  | ) |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   | (2,688  | )
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) activities            |  |                              | (8,965  | ) |                                      |   | (59    | )                              |  |   | (44,810          | ) |  |                                | (44,869 | ) |                      |   |        |              |  |   | 36,428  |   |  |   | (17,406 | )
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                              | 37,399  |   |                                      |   | (1,694 | )                              |  |   | 2,174            |   |  |                                | 480     |   |                      |   | (2,671  | )            |  |   |        |   |  |   | 35,208  |  
|Cash and cash equivalents at beginning of period     |  |                              | 23,025  |   |                                      |   | 2,605  |                                |  |   | 1,347            |   |  |                                | 3,952   |   |                      |   | 35,008  |              |  |   |        |   |  |   | 61,985  |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Cash and cash equivalents at end of period           |  | $                            | 60,424  |   |                                      | $ | 911    |                                |  | $ | 3,521            |   |  | $                              | 4,432   |   |                      | $ | 32,337  |              |  | $ |        |   |  | $ | 97,193  |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  



F-37



---

##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Cash Flows



|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|---------------------------------------------------- |  | ---------------------------- | -------- | - | ------------------------------------ | - | ------- | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | ------- | - | -------------------- | - | ------- | ------------ |  | - | -------- | - |  | - | -------- | -
|                                                     |  | Year ended December 31, 2002 |         
|                                                     |  | US UnwiredInc.(Parent)       |          |   | UnwiredTelecomCorporation(Guarantor) |   |         | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorp (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                     |  | (In thousands)               |         
|Cash flows from operating activities:                |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Net cash provided by (used in) operating activities  |  | $                            | 10,315   |   |                                      | $ | 17,817  |                                |  | $ | (21,346          | ) |  | $                              | (3,529  | ) |                      | $ | (32,700 | )            |  | $ | 2,564    |   |  | $ | (23,350  | )
|                                                     |  |                              |          |   |                                      |   |        
|Cash flows from investing activities:                |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Payments for the purchase of equipment               |  |                              | (2,120   | ) |                                      |   | (1,078  | )                              |  |   | (65,590          | ) |  |                                | (66,668 | ) |                      |   | (53,820 | )            |  |   |         |   |  |   | (122,608 | )
|Acquisition of business, net of cash acquired        |  |                              | (61,990  | ) |                                      |   |        |                                |  |   | 3,032            |   |  |                                | 3,032   |   |                      |   | (191    | )            |  |   | (2,564   | ) |  |   | (61,713  | )
|Proceeds from maturities and sales of investments    |  |                              |         |   |                                      |   |        |                                |  |   |                 |   |  |                                |        |   |                      |   | 66,967  |              |  |   |         |   |  |   | 66,967   |  
|Proceeds from the sale of assets                     |  |                              | 303      |   |                                      |   |        |                                |  |   | 10,016           |   |  |                                | 10,016  |   |                      |   |        |              |  |   |         |   |  |   | 10,319   |  
|Proceeds from restricted cash                        |  |                              |         |   |                                      |   |        |                                |  |   |                 |   |  |                                |        |   |                      |   | 10,449  |              |  |   |         |   |  |   | 10,449   |  
|Investments in unconsolidated affiliates             |  |                              |         |   |                                      |   | (699    | )                              |  |   |                 |   |  |                                | (699    | ) |                      |   |        |              |  |   |         |   |  |   | (699     | )
|Disbursement of intercompany note                    |  |                              | (59,770  | ) |                                      |   | (17,798 | )                              |  |   |                 |   |  |                                | (17,798 | ) |                      |   |        |              |  |   | 77,568   |   |  |   |         |  
|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Net cash provided by (used in) investing activities  |  |                              | (123,577 | ) |                                      |   | (19,575 | )                              |  |   | (52,542          | ) |  |                                | (72,117 | ) |                      |   | 23,405  |              |  |   | 75,004   |   |  |   | (97,285  | )
|                                                     |  |                              |          |   |                                      |   |        
|Cash flows from financing activities:                |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Proceeds from long-term debt                         |  |                              | 57,798   |   |                                      |   |        |                                |  |   | 91,851           |   |  |                                | 91,851  |   |                      |   | 43,184  |              |  |   | (109,649 | ) |  |   | 83,184   |  
|Proceeds from stock options exercised                |  |                              | 282      |   |                                      |   |        |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |         |   |  |   | 282      |  
|Proceeds from promissory notes                       |  |                              |         |   |                                      |   |        |                                |  |   |                 |   |  |                                |        |   |                      |   | 20      |              |  |   |         |   |  |   | 20       |  
|Principal payments of long-term debt                 |  |                              | (215     | ) |                                      |   | (55     | )                              |  |   | (32,504          | ) |  |                                | (32,559 | ) |                      |   |        |              |  |   | 32,081   |   |  |   | (693     | )
|Debt issuance costs                                  |  |                              | (762     | ) |                                      |   |        |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |         |   |  |   | (762     | )
|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Net cash provided by (used in) activities            |  |                              | 57,103   |   |                                      |   | (55     | )                              |  |   | 59,347           |   |  |                                | 59,292  |   |                      |   | 43,204  |              |  |   | (77,568  | ) |  |   | 82,031   |  
|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Net increase (decrease) in cash and cash equivalents |  |                              | (56,159  | ) |                                      |   | (1,813  | )                              |  |   | (14,541          | ) |  |                                | (16,354 | ) |                      |   | 33,909  |              |  |   |         |   |  |   | (38,604  | )
|Cash and cash equivalents at beginning of period     |  |                              | 79,184   |   |                                      |   | 4,418   |                                |  |   | 15,888           |   |  |                                | 20,306  |   |                      |   | 1,099   |              |  |   |         |   |  |   | 100,589  |  
|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  
|Cash and cash equivalents at end of period           |  | $                            | 23,025   |   |                                      | $ | 2,605   |                                |  | $ | 1,347            |   |  | $                              | 3,952   |   |                      | $ | 35,008  |              |  | $ |         |   |  | $ | 61,985   |  
|                                                     |  |                              |          |   |                                      |   |         |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |          |   |  |   |          |  



F-38



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



Condensed Consolidating Statement of Cash Flows



|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|---------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | -------------------- | ------- | - | ------------ | - | -------- | - |  | - | -------- | -
|                                                     |  | Year ended December 31, 2001 |        
|                                                     |  | USUnwiredInc.(Parent)        |         |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | ConsolidatingEntries |         |   | Consolidated |  
|                                                     |  | (In thousands)               |        
|Cash flows from operating activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Net cash provided by (used in) operating activities  |  | $                            | 10,686  |   |                                      | $ | 1,971  |                                |  | $ | (35,474          | ) |  | $                    | (33,503 | ) |              | $ |         |   |  | $ | (22,817  | )
|                                                     |  |                              |         |   |                                      |  
|Cash flows from investing activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Payments for the purchase of equipment               |  |                              | (7,242  | ) |                                      |   | (3,167 | )                              |  |   | (96,090          | ) |  |                      | (99,257 | ) |              |   |         |   |  |   | (106,499 | )
|Payments for microwave relocation                    |  |                              |        |   |                                      |   |       |                                |  |   | (666             | ) |  |                      | (666    | ) |              |   |          |   |  |   | (666     | )
|Purchase of marketable securities                    |  |                              | (12,544 | ) |                                      |   |       |                                |  |   |                 |   |  |                      |        |   |              |   |         |   |  |   | (12,544  | )
|Sale of marketable securities                        |  |                              | 137,382 |   |                                      |   |       |                                |  |   | 39,323           |   |  |                      | 39,323  |   |              |   |         |   |  |   | 176,705  |  
|Proceeds from the sale of assets                     |  |                              | 791     |   |                                      |   | 106    |                                |  |   | 44,133           |   |  |                      | 44,239  |   |              |   |         |   |  |   | 45,030   |  
|Distributions from unconsolidated affiliates         |  |                              |        |   |                                      |   | 636    |                                |  |   |                 |   |  |                      | 636     |   |              |   |         |   |  |   | 636      |  
|Investments in unconsolidated affiliates             |  |                              |        |   |                                      |   | (1,902 | )                              |  |   |                 |   |  |                      | (1,902  | ) |              |   |         |   |  |   | (1,902   | )
|Proceeds from restricted cash                        |  |                              |        |   |                                      |   | 5,753  |                                |  |   |                 |   |  |                      | 5,753   |   |              |   |         |   |  |   | 5,753    |  
|Disbursement of intercompany note                    |  |                              | (62,832 | ) |                                      |   | (6,000 | )                              |  |   |                 |   |  |                      | (6,000  | ) |              |   | 68,832   |   |  |   |         |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Net cash provided by (used in) investing activities  |  |                              | 55,555  |   |                                      |   | (4,574 | )                              |  |   | (13,300          | ) |  |                      | (17,874 | ) |              |   | 68,832   |   |  |   | 106,513  |  
|                                                     |  |                              |         |   |                                      |  
|Cash flows from financing activities:                |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Proceeds from long-term debt                         |  |                              | 7,840   |   |                                      |   |       |                                |  |   | 135,527          |   |  |                      | 135,527 |   |              |   | (141,545 | ) |  |   | 1,822    |  
|Proceeds from stock options exercised                |  |                              | 1,756   |   |                                      |   |       |                                |  |   |                 |   |  |                      |        |   |              |   |         |   |  |   | 1,756    |  
|Principal payments of long-term debt                 |  |                              | (148    | ) |                                      |   | (52    | )                              |  |   | (74,186          | ) |  |                      | (74,238 | ) |              |   | 72,713   |   |  |   | (1,673   | )
|Debt issuance costs                                  |  |                              | (148    | ) |                                      |   |       |                                |  |   |                 |   |  |                      |        |   |              |   |         |   |  |   | (148     | )
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Net cash provided by (used in) financing activities  |  |                              | 9,300   |   |                                      |   | (52    | )                              |  |   | 61,341           |   |  |                      | 61,289  |   |              |   | (68,832  | ) |  |   | 1,757    |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Net increase (decrease) in cash and cash equivalents |  |                              | 75,541  |   |                                      |   | (2,655 | )                              |  |   | 12,567           |   |  |                      | 9,912   |   |              |   |         |   |  |   | 85,453   |  
|Cash and cash equivalents at beginning of period     |  |                              | 3,642   |   |                                      |   | 7,073  |                                |  |   | 4,421            |   |  |                      | 11,494  |   |              |   |         |   |  |   | 15,136   |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  
|Cash and cash equivalents at end of period           |  | $                            | 79,183  |   |                                      | $ | 4,418  |                                |  | $ | 16,988           |   |  | $                    | 21,406  |   |              | $ |         |   |  | $ | 100,589  |  
|                                                     |  |                              |         |   |                                      |   |        |                                |  |   |                  |   |  |                      |         |   |              |   |          |   |  |   |          |  



F-39



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

December 31, 2003



16. Subsequent Events (Unaudited)



On February 12, 2004, Sprint PCS notified the Company of a settlement related to certain previous amounts charged to the
Company. While the settlement will result in a refund of these previous charges by $5.4 million, Sprint PCS is applying $4.3 million of this refund to the disputed amounts discussed in Note 11. The Company will record this settlement is the period
in which the amounts are received from Sprint PCS, which is expected to be in the first quarter of 2004.



F-40



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES

Schedule IIValuation and Qualifying Accounts

(In thousands)



|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|---------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                   |  | Year ended December 31, |        
|                                   |  | 2003                    |         |   | 2002 |   |         | 2001 | 
|Income tax valuation allowance     |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at beginning of year       |  | $                       | 176,099 |   |      | $ | 61,534  |      |  | $ | 29,398 |  
|Additions                          |  |                         | 80,524  |   |      |   | 114,565 |      |  |   | 32,136 |  
|Reductions                         |  |                         |        |   |      |   |        |      |  |   |       |  
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at end of year             |  | $                       | 256,623 |   |      | $ | 176,099 |      |  | $ | 61,534 |  
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|Allowance for doubtful accounts    |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at beginning of year       |  | $                       | 6,981   |   |      | $ | 3,079   |      |  | $ | 224    |  
|Additions                          |  |                         | 6,673   |   |      |   | 24,926  |      |  |   | 4,666  |  
|Reductions                         |  |                         | (7,236  | ) |      |   | (21,024 | )    |  |   | (1,811 | )
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at end of year.            |  | $                       | 6,418   |   |      | $ | 6,981   |      |  | $ | 3,079  |  
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|Reserve for inventory obsolescence |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at beginning of year       |  | $                       | 351     |   |      | $ | 785     |      |  | $ | 166    |  
|Additions                          |  |                         | 1,050   |   |      |   |        |      |  |   | 619    |  
|Reductions                         |  |                         |        |   |      |   | (434    | )    |  |   |       |  
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  
|Balance at end of year             |  | $                       | 1,401   |   |      | $ | 351     |      |  | $ | 785    |  
|                                   |  |                         |         |   |      |   |         |      |  |   |        |  



S-1