##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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



FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004



OR



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



FOR THE TRANSITION PERIOD FROM  TO
.



Commission file number 000-22003



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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 No.)
|                                                               | 
|901 Lakeshore Drive Lake Charles, LA                           |  | 70601                               
|(Address of principal executive offices)                       |  | (Zip code)                          



(337) 436-9000

(Registrants telephone number, including area code)





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



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



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



There were 163,614,312 shares of common stock, $0.01 par
value per share, outstanding at October 26, 2004.



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##### Table of Contents

|           |  |    |  |                                                                                       |  |     
|---------- |  | -- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |    |  |                                                                                       |  | Page
|Part I     |  |   |  | Financial Information                                                                 |  |     
|           |  |    | 
|Item 1.    |  |    |  | Financial Statements                                                                  |  |     
|           |  |    | 
|           |  |    |  | Condensed Consolidated Balance Sheets                                                 |  | 3   
|           |  |    |  | Condensed Consolidated Statements of Operations                                       |  | 4   
|           |  |    |  | Condensed Consolidated Statements of Cash Flows                                       |  | 5   
|           |  |    | 
|           |  |    |  | Notes to Condensed Consolidated Financial Statements                                  |  | 6   
|           |  |    | 
|Item 2.    |  |    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 21  
|           |  |    | 
|Item 3.    |  |    |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 33  
|           |  |    | 
|Item 4.    |  |    |  | Controls and Procedures                                                               |  | 34  
|           |  |    | 
|Part II    |  |   |  | Other Information                                                                     |  |     
|           |  |    | 
|Item 1.    |  |    |  | Legal Proceedings                                                                     |  | 34  
|           |  |    | 
|Item 2.    |  |    |  | Changes in Securities                                                                 |  | 35  
|           |  |    | 
|Item 3.    |  |    |  | Defaults Upon Senior Securities                                                       |  | 35  
|           |  |    | 
|Item 5.    |  |    |  | Other Information                                                                     |  | 35  
|           |  |    | 
|Item 6.    |  |    |  | Exhibits and Reports on Form 8-K                                                      |  | 40  
|           | 
|Signatures |  | 42



2



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##### Table of Contents

Part I    Financial Information

Item 1. Financial Statements



US UNWIRED INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)



|                                                            |  |                    |          |   |                   |   |          |  
|----------------------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | -------- | -
|                                                            |  | September 30, 2004 |          |   | December 31, 2003 |  
|                                                            |  | (Unaudited)        |          |   | (Note 1)          |  
|Assets                                                      |  |                    |          |   |                   |   |          |  
|Current assets:                                             |  |                    |          |   |                   |   |          |  
|Cash and cash equivalents                                   |  | $                  | 167,387  |   |                   | $ | 97,193   |  
|Restricted cash                                             |  |                    | 79       |   |                   |   | 19,358   |  
|Subscriber receivables, net                                 |  |                    | 34,613   |   |                   |   | 28,687   |  
|Other receivables                                           |  |                    | 1,667    |   |                   |   | 2,625    |  
|Inventory                                                   |  |                    | 4,228    |   |                   |   | 5,615    |  
|Prepaid expenses and other assets                           |  |                    | 16,948   |   |                   |   | 14,833   |  
|Receivables from related parties                            |  |                    | 645      |   |                   |   | 647      |  
|Receivables from officers                                   |  |                    | 116      |   |                   |   | 85       |  
|Current assets related to discontinued operations           |  |                    | 63       |   |                   |   | 1,049    |  
|                                                            |  |                    |          |   |                   |   |          |  
|Total current assets                                        |  |                    | 225,746  |   |                   |   | 170,092  |  
|                                                            |  |                   
|Property and equipment, net                                 |  |                    | 369,028  |   |                   |   | 411,518  |  
|Goodwill                                                    |  |                    | 46,705   |   |                   |   | 46,705   |  
|Intangibles, net                                            |  |                    | 30,917   |   |                   |   | 40,785   |  
|Notes receivable from unconsolidated affiliates             |  |                    | 1,944    |   |                   |   | 1,887    |  
|Other assets                                                |  |                    | 34,528   |   |                   |   | 42,571   |  
|Non-current assets related to discontinued operations       |  |                    |         |   |                   |   | 4,770    |  
|                                                            |  |                    |          |   |                   |   |          |  
|Total assets                                                |  | $                  | 708,868  |   |                   | $ | 718,328  |  
|                                                            |  |                    |          |   |                   |   |          |  
|Liabilities and Stockholders Deficit                       |  |                    |          |   |                   |   |          |  
|Current liabilities:                                        |  |                    |          |   |                   |   |          |  
|Accounts payable                                            |  | $                  | 57,381   |   |                   | $ | 41,377   |  
|Accrued expenses                                            |  |                    | 92,635   |   |                   |   | 77,137   |  
|Current maturities of long term obligations                 |  |                    | 484      |   |                   |   | 11,145   |  
|Current maturities of long term obligations in default      |  |                    | 354,816  |   |                   |   | 351,697  |  
|Current liabilities related to discontinued operations      |  |                    | 647      |   |                   |   | 49       |  
|                                                            |  |                    |          |   |                   |   |          |  
|Total current liabilities                                   |  |                    | 505,963  |   |                   |   | 481,405  |  
|                                                            |  |                   
|Long term obligations, net of current maturities            |  |                    | 405,163  |   |                   |   | 434,745  |  
|Long term obligations in default, net of current maturities |  |                    |         |   |                   |   |         |  
|Deferred gain                                               |  |                    | 28,766   |   |                   |   | 30,729   |  
|Investments in and advances to unconsolidated affiliates    |  |                    | 2,602    |   |                   |   | 1,216    |  
|                                                            |  |                   
|Stockholders deficit:                                      |  |                    |          |   |                   |   |          |  
|Common stock                                                |  |                    | 1,636    |   |                   |   | 1,288    |  
|Additional paid in capital                                  |  |                    | 751,436  |   |                   |   | 654,899  |  
|Retained deficit                                            |  |                    | (986,688 | ) |                   |   | (885,765 | )
|Promissory note                                             |  |                    |         |   |                   |   | (179     | )
|Treasury stock                                              |  |                    | (10      | ) |                   |   | (10      | )
|                                                            |  |                    |          |   |                   |   |          |  
|Total stockholders deficit                                 |  |                    | (233,626 | ) |                   |   | (229,767 | )
|                                                            |  |                    |          |   |                   |   |          |  
|Total liabilities and stockholders deficit                 |  | $                  | 708,868  |   |                   | $ | 718,328  |  
|                                                            |  |                    |          |   |                   |   |          |  



See accompanying notes
to condensed consolidated financial statements



3



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)



|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|--------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------- | - | -------------------------------------- | - | ------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                                                              |  | For the three months endedSeptember 30, |         |   | For the nine months endedSeptember 30, |  
|                                                                                              |  | 2004                                    |         |   | 2003                                   |   |         | 2004 |  |   | 2003     |  
|Revenue:                                                                                      |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Subscriber                                                                                    |  | $                                       | 109,834 |   |                                        | $ | 98,563  |      |  | $ | 318,972  |   |  | $ | 286,306  |  
|Roaming                                                                                       |  |                                         | 35,719  |   |                                        |   | 34,466  |      |  |   | 99,976   |   |  |   | 92,808   |  
|Merchandise sales                                                                             |  |                                         | 6,655   |   |                                        |   | 5,637   |      |  |   | 21,925   |   |  |   | 16,708   |  
|Other revenue                                                                                 |  |                                         | 563     |   |                                        |   | 639     |      |  |   | 1,401    |   |  |   | 1,891    |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Total revenue                                                                                 |  |                                         | 152,771 |   |                                        |   | 139,305 |      |  |   | 442,274  |   |  |   | 397,713  |  
|Expense:                                                                                      |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Cost of service                                                                               |  |                                         | 81,531  |   |                                        |   | 79,153  |      |  |   | 228,638  |   |  |   | 232,479  |  
|Merchandise cost of sales                                                                     |  |                                         | 12,532  |   |                                        |   | 11,751  |      |  |   | 41,878   |   |  |   | 29,590   |  
|General and administrative                                                                    |  |                                         | 8,418   |   |                                        |   | 7,031   |      |  |   | 24,065   |   |  |   | 26,729   |  
|Sales and marketing                                                                           |  |                                         | 19,601  |   |                                        |   | 19,473  |      |  |   | 64,984   |   |  |   | 65,959   |  
|Non-cash stock compensation                                                                   |  |                                         | 182     |   |                                        |   | 210     |      |  |   | 271      |   |  |   | 2,182    |  
|Depreciation and amortization                                                                 |  |                                         | 21,726  |   |                                        |   | 29,924  |      |  |   | 72,357   |   |  |   | 89,066   |  
|IWO asset abandonment charge                                                                  |  |                                         |        |   |                                        |   |        |      |  |   |         |   |  |   | 12,403   |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Total operating expense                                                                       |  |                                         | 143,990 |   |                                        |   | 147,542 |      |  |   | 432,193  |   |  |   | 458,408  |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Operating income (loss)                                                                       |  |                                         | 8,781   |   |                                        |   | (8,237  | )    |  |   | 10,081   |   |  |   | (60,695  | )
|Other income (expense):                                                                       |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Interest expense                                                                              |  |                                         | (20,424 | ) |                                        |   | (23,715 | )    |  |   | (67,944  | ) |  |   | (65,654  | )
|Loss on sale of assets                                                                        |  |                                         | (69     | ) |                                        |   | (29     | )    |  |   | (724     | ) |  |   | (21      | )
|Loss on debt extinguishment                                                                   |  |                                         | (4,484  | ) |                                        |   |        |      |  |   | (58,977  | ) |  |   |         |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Total other expense                                                                           |  |                                         | (24,977 | ) |                                        |   | (23,744 | )    |  |   | (127,645 | ) |  |   | (65,675  | )
|                                                                                              |  |                                         |         |  
|Loss from continuing operations before equity in income (losses) of unconsolidated affiliates |  |                                         | (16,196 | ) |                                        |   | (31,981 | )    |  |   | (117,564 | ) |  |   | (126,370 | )
|Equity in income (losses) of unconsolidated affiliates                                        |  |                                         | (30     | ) |                                        |   | 57      |      |  |   | 224      |   |  |   | 191      |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Loss from continuing operations                                                               |  |                                         | (16,226 | ) |                                        |   | (31,924 | )    |  |   | (117,340 | ) |  |   | (126,179 | )
|                                                                                              |  |                                         |         |  
|Discontinued operations:                                                                      |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Gain on disposal of discontinued operations                                                   |  |                                         |        |   |                                        |   |        |      |  |   | 16,131   |   |  |   |         |  
|Income from discontinued operations                                                           |  |                                         |        |   |                                        |   | 617     |      |  |   | 284      |   |  |   | 2,380    |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|                                                                                              |  |                                         |        |   |                                        |   | 617     |      |  |   | 16,415   |   |  |   | 2,380    |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Net loss                                                                                      |  | $                                       | (16,226 | ) |                                        | $ | (31,307 | )    |  | $ | (100,925 | ) |  | $ | (123,799 | )
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Basic and diluted loss per share                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Continuing operations                                                                         |  | $                                       | (0.10   | ) |                                        | $ | (0.25   | )    |  | $ | (0.81    | ) |  | $ | (0.98    | )
|Discontinued operations                                                                       |  |                                         |        |   |                                        |   |        |      |  |   | 0.11     |   |  |   | 0.02     |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|                                                                                              |  | $                                       | (0.10   | ) |                                        | $ | (0.25   | )    |  | $ | (0.70    | ) |  | $ | (0.96    | )
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  
|Weighted average outstanding common shares                                                    |  |                                         | 163,612 |   |                                        |   | 128,832 |      |  |   | 144,596  |   |  |   | 128,832  |  
|                                                                                              |  |                                         |         |   |                                        |   |         |      |  |   |          |   |  |   |          |  



See accompanying notes
to condensed consolidated financial statements



4



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)



|                                                    |  |                                        |          |   |      |   |         |  
|--------------------------------------------------- |  | -------------------------------------- | -------- | - | ---- | - | ------- | -
|                                                    |  | For the nine months endedSeptember 30, |         
|                                                    |  | 2004                                   |          |   | 2003 |  
|Cash flows from operating activities                |  |                                        |          |   |      |   |         |  
|                                                    |  |                                       
|Net cash provided by operating activities           |  | $                                      | 61,734   |   |      | $ | 34,992  |  
|                                                    |  |                                       
|Cash flows from investing activities                |  |                                        |          |   |      |   |         |  
|                                                    |  |                                       
|Release of restricted cash                          |  |                                        | 19,279   |   |      |   | 21,924  |  
|Proceeds from sale of assets                        |  |                                        | 43,314   |   |      |   | 350     |  
|Distribution from unconsolidated affiliates         |  |                                        | 500      |   |      |   | 250     |  
|Payments for the purchase of equipment              |  |                                        | (24,044  | ) |      |   | (26,361 | )
|                                                    |  |                                        |          |   |      |   |         |  
|Net cash provided by (used in) investing activities |  |                                        | 39,049   |   |      |   | (3,837  | )
|                                                    |  |                                       
|Cash flows from financing activities                |  |                                        |          |   |      |   |         |  
|                                                    |  |                                       
|Proceeds from long-term debt                        |  |                                        | 360,232  |   |      |   |        |  
|Proceeds from exercised options                     |  |                                        | 307      |   |      |   |        |  
|Principal payments of long-term debt                |  |                                        | (378,620 | ) |      |   | (3,203  | )
|Debt issuance cost                                  |  |                                        | (12,508  | ) |      |   |        |  
|                                                    |  |                                        |          |   |      |   |         |  
|Net cash used in financing activities               |  |                                        | (30,589  | ) |      |   | (3,203  | )
|                                                    |  |                                        |          |   |      |   |         |  
|Net increase in cash and cash equivalents           |  |                                        | 70,194   |   |      |   | 27,952  |  
|                                                    |  |                                       
|Cash and cash equivalents at beginning of period    |  |                                        | 97,193   |   |      |   | 61,985  |  
|                                                    |  |                                        |          |   |      |   |         |  
|Cash and cash equivalents at end of period          |  | $                                      | 167,387  |   |      | $ | 89,937  |  
|                                                    |  |                                        |          |   |      |   |         |  



See accompanying notes
to condensed consolidated financial statements



5



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2004

(Unaudited)



|1. | Basis of Presentation
|-- | ---------------------



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three and
nine-month periods ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004.



The condensed consolidated balance sheet at December 31, 2003 has been derived from the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The condensed consolidated financial statements contained herein should be read in conjunction with the
financial statements and notes included in the Form 10-K for US Unwired Inc. for the year ended December 31, 2003, filed on March 2, 2004 and in the Form 8-K for US Unwired with regards to reclassifications made to the annual information filed on
July 9, 2004 with the Securities and Exchange Commission.



Certain reclassifications have been made to the financial statements for the three and nine-month periods ended September 30, 2003 to conform to the presentation of the financial statements for the three and nine-month periods ended
September 30, 2004.



Recent Accounting Pronouncements



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
at the end of the first reporting period after March 15, 2004, 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 May 2003, the Emerging Issues Task Force (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 September 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 has reviewed EITF 00-21 and determined 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.



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|2. | Description of the Organization
|-- | -------------------------------



US Unwired Inc. (the Company) is principally engaged in the ownership and operation of wireless communications. 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. The Company operates, directly and through its subsidiaries, both a southern group of markets and a
northern group of markets. The southern group of markets, which is operated by US Unwired and its subsidiaries other than IWO, which is identified in the next sentence, comprises portions of Alabama, Arkansas, Florida, Georgia, Louisiana,
Mississippi, Oklahoma, Tennessee and Texas. The northern group of markets, which is operated by IWO Holdings, Inc. and its subsidiaries, collectively referred to as IWO, comprises all or portions of Massachusetts, New Hampshire, New York,
Pennsylvania and Vermont.



|3. | Liquidity and Capital Resources
|-- | -------------------------------



US Unwired and IWO have separate debt instruments. Under the terms of these debt instruments, funds available under the US Unwired debt instruments 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 Liquidity



As of September 30, 2004, US Unwired had $126.3 million in cash and cash
equivalents and $405.6 million in indebtedness.



During May
and June 2004, the Company executed a series of transactions to refinance its debt that included:



| |  | issuing $360 million of US Unwired senior secured notes (as further described in Note 4 below);
| | - | -----------------------------------------------------------------------------------------------



| |  | purchasing for $247.4 million approximately $235.8 million aggregate face value of its 133/8% senior subordinated discount notes;
| | - | ---------------------------------------------------------------------------------------------------------------------------------



| |  | issuing approximately 34.5 million shares of its common stock in exchange for approximately $75.0 million aggregate face value of its 133/8% senior subordinated discount notes;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | paying in full its $55.4 million outstanding balance and terminating the US Unwired senior credit facility; and
| | - | ---------------------------------------------------------------------------------------------------------------



| |  | retiring approximately $3.7 million of debt related to a promissory note and vendor financing.
| | - | ----------------------------------------------------------------------------------------------



On August 30, 2004, the Company purchased for $51.1 million approximately $48.0 million aggregate face value of its 133/8% senior subordinated discount notes. The Company recorded a $4.5 million loss on extinguishment of debt related to
this transaction.



On November 1, 2004, the Company
retired its remaining outstanding 133/8% senior subordinated discount notes by purchasing $41.1 million
aggregate face value for $43.9 million.



For 2004, the
Company has issued guidance that it intends to expend between $27 million and $33 million for US Unwired capital expenditures in 2004. As of September 30, 2004, the Company had spent approximately $16.6 million for US Unwired capital expenditures.



The Company periodically reviews all charges from Sprint PCS
and from time to time, the Company may dispute certain of these charges. As of September 30, 2004, the Company had disputed approximately $28.2 million of charges to US Unwired. Based upon the information provided to the Company by Sprint PCS to
date, the Company believes the accompanying condensed consolidated balance sheet adequately reflects its obligation that may be due to Sprint PCS for these charges. However, should these disputes be settled in a manner unsatisfactory to the Company,
US Unwireds cash flow would be adversely impacted to the extent of the unfavorable settlement.



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##### Table of Contents

Based on its operating forecasts, the Company believes that US Unwired will have sufficient cash to fund
its operations, debt service and capital requirements over the next twelve months. However, US Unwireds liquidity 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 the Managements Discussion and Analysis
section of this filing.



IWO Liquidity



As of September 30, 2004, IWO had $41.0 million in cash and indebtedness
that consisted of $215.0 million related to the IWO senior secured credit facility and $139.8 million related to the IWO senior notes for a total of $354.8 million.



As of September 30, 2004, IWO was in default of the IWO senior secured credit facility. Since March 2004, IWO has failed to
make $8.8 million in principal payments due on the IWO senior secured credit facility and is not in compliance with its restrictive covenants under the IWO senior secured credit facility. In September 2004, one of the holders of the IWO senior
secured credit facility elected to fund IWO $1.8 million, which represents that holders remaining obligation of a draw request made in 2002. The holders of the IWO senior secured credit facility have denied IWO access to the remaining $23.4
million in availability.



Additionally, IWO failed to make a
scheduled semi-annual interest payment on the IWO senior notes due July 15, 2004 and the holders of the senior notes had the right to place IWO in default of its senior notes. However, on July 22, 2004, IWO entered into an agreement with an ad hoc
committee of note holders owning approximately 68% of the IWO senior notes pursuant to which such holders agreed to, under certain circumstances, not take any action to enforce their rights including accelerating the principal amount of the IWO
senior notes.



As a result, the Company has classified all
outstanding indebtedness of both the IWO senior secured credit facility and the IWO senior notes as a current liability.



The Company has been unable to develop a business plan for IWO that provides sufficient cash to fund operations, debt service and capital requirements in
2004. The Company has been in discussions with the IWO creditors to arrive at a consensual restructuring to preserve liquidity but has been unable to arrive at an acceptable plan. The Company has retained a Chief Restructuring Officer
(CRO) to guide IWOs restructuring efforts and, where appropriate, to manage IWO in the planning, process and emergence from reorganization through a Chapter 11 case. IWO anticipates seeking protection under Chapter 11 in 2004.



Effective April 2004, IWO and US Unwired formalized its
existing management arrangement with the execution of a management agreement engaging US Unwired to oversee, manage and supervise the development and operation of IWO. The 2004 monthly fee is comparable to monthly amounts previously billed and
collected by US Unwired under the previous arrangement and allows for certain bonuses for the achievement of above targeted operating results. The agreement also includes a monthly restructuring fee and a bonus for a successful restructuring, an
early termination fee if the agreement is terminated prior to December 31, 2005 and a deferred fee should the agreement not be extended beyond December 31, 2005.



The Company periodically reviews all charges from Sprint PCS and from time to time, the Company may dispute certain of these
charges. As of September 30, 2004, the Company had disputed approximately $15.2 million of charges to IWO. Based upon the information provided to the Company by Sprint PCS to date, the Company believes the accompanying condensed consolidated balance
sheet adequately reflects its obligation that may be due to Sprint PCS for these charges. However, should these disputes be settled in a manner unsatisfactory to the Company, IWOs cash flow would be adversely impacted to the extent of the
unfavorable settlement.



As a result of liquidity challenges,
IWO has reduced capital expenditures for network expansion. Included in this reduction are cell sites that IWO is required to construct to meet the build out requirements under IWOs management agreement with Sprint. Failure to complete the
build out of



8



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##### Table of Contents

the IWO service area will place IWO in violation of IWOs management agreement with Sprint. 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 September 30, 2004, IWOs construction in progress included $5.6 million primarily related to cell sites
that IWO plans to complete and management estimates that completion of these cell sites will require approximately $7.2 million in additional costs to complete construction and place these sites in operation. IWO anticipates that only a portion of
these sites will be completed in 2004.



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 secured 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 secured 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 senior secured credit facility and its liquidity as discussed above, there is substantial doubt about IWOs
ability to continue as a going concern.



|4. | Loss on Debt Extinguishment  US Unwired
|-- | ----------------------------------------



As described in Note 3, during 2004 the Company executed a series of transactions to refinance the debt of US Unwired. The Company recognized a loss of
$59.0 million related to the payment in full and termination of its US Unwired senior secured credit facility and the retirement of a portion of its 133/8% senior subordinated discount notes using the proceeds from the sale of $360 million of US Unwired new senior secured notes and approximately 34.5 million shares of US Unwired common stock. IWO was
not affected by this transaction. The following table details the transactions:



|                                     |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  
|------------------------------------ |  | ---------------------------------------------- | ------- | - | ---------------------------------------------------- | - | ------ | ------------------------------------ |  | - | ------ | - |  | - | ------- | -
|                                     |  | 133/8% seniorsubordinateddiscountnotes retired |         |   | 133/8% seniorsubordinateddiscountnotes exchanged
(1) |   |        | Senior securedcredit facilityretired |  |   | Total  |  
|                                     |  | (In thousands)                                 |        
|Purchase or exchange price           |  | $                                              | 298,510 |   |                                                      | $ | 96,373 |                                      |  | $ | 55,411 |   |  | $ | 450,294 |  
|                                     |  |                                                |         |  
|Carrying value of debt:              |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  
|Face value tendered                  |  |                                                | 283,856 |   |                                                      |   | 75,000 |                                      |  |   | 55,411 |   |  |   | 414,267 |  
|Unamortized discount                 |  |                                                | (12,090 | ) |                                                      |   | (3,526 | )                                    |  |   |       |   |  |   | (15,616 | )
|Unamortized deferred financing costs |  |                                                | (4,518  | ) |                                                      |   | (1,201 | )                                    |  |   | (718   | ) |  |   | (6,437  | )
|                                     |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  
|Carrying value                       |  |                                                | 267,248 |   |                                                      |   | 70,273 |                                      |  |   | 54,693 |   |  |   | 392,214 |  
|                                     |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  
|Loss before expenses                 |  |                                                | 31,262  |   |                                                      |   | 26,100 |                                      |  |   | 718    |   |  |   | 58,080  |  
|Add transaction expenses             |  |                                                | 675     |   |                                                      |   | 143    |                                      |  |   | 79     |   |  |   | 897     |  
|                                     |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  
|Loss on debt extinguishment          |  | $                                              | 31,937  |   |                                                      | $ | 26,243 |                                      |  | $ | 797    |   |  | $ | 58,977  |  
|                                     |  |                                                |         |   |                                                      |   |        |                                      |  |   |        |   |  |   |         |  

---

|(1) | From May 26, 2004 to September 4, 2004, the Company issued approximately 34.5 million shares in exchange of its US Unwired senior notes. The exchange price of the US Unwired common
stock issued was determined by using the close price of the US Unwired common stock on the day preceding the execution of each exchange agreement multiplied by the agreed upon number of common shares to be exchanged.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|5. | Details of Certain Balance Sheet Accounts
|-- | -----------------------------------------



Major categories of property and equipment consisted of the following:



|                                               |  |                    |         |                   |   |        
|---------------------------------------------- |  | ------------------ | ------- | ----------------- | - | -------
|                                               |  | September 30, 2004 |         | December 31, 2003
|                                               |  | (In thousands)    
|Land                                           |  | $                  | 620     |                   | $ | 754    
|Buildings and leasehold improvements           |  |                    | 22,222  |                   |   | 21,829 
|Facilities and equipment                       |  |                    | 597,193 |                   |   | 578,891
|Furniture, fixtures and vehicles               |  |                    | 29,985  |                   |   | 29,598 
|Construction in progress                       |  |                    | 11,906  |                   |   | 14,594 
|                                               |  |                    |         |                   |   |        
|                                               |  |                    | 661,926 |                   |   | 645,666
|Less accumulated depreciation and amortization |  |                    | 292,898 |                   |   | 234,148
|                                               |  |                    |         |                   |   |        
|                                               |  | $                  | 369,028 |                   | $ | 411,518
|                                               |  |                    |         |                   |   |        



Intangible assets
consisted of the following:



|                              |  |                    |        |                   |   |        
|----------------------------- |  | ------------------ | ------ | ----------------- | - | -------
|                              |  | September 30, 2004 |        | December 31, 2003
|                              |  | (In thousands)    
|Sprint affiliation agreement  |  | $                  | 35,266 |                   | $ | 35,266 
|Subscriber base               |  |                    |       |                   |   | 81,824 
|                              |  |                    |        |                   |   |        
|                              |  |                    | 35,266 |                   |   | 117,090
|Less accumulated amortization |  |                    | 4,349  |                   |   | 76,305 
|                              |  |                    |        |                   |   |        
|Intangible assets, net        |  | $                  | 30,917 |                   | $ | 40,785 
|                              |  |                    |        |                   |   |        



The Company
eliminated amounts for its subscriber bases and related amortization related to its March and April 2002 acquisitions of Georgia PCS and IWO, respectively, that were fully amortized in the nine-month period ended September 30, 2004.



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|6. | Long-Term Obligations
|-- | ---------------------



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



|                                                                           |  |                    |         |                   |   |        
|-------------------------------------------------------------------------- |  | ------------------ | ------- | ----------------- | - | -------
|                                                                           |  | September 30, 2004 |         | December 31, 2003
|                                                                           |  | (In thousands)    
|US Unwired long-term obligations:                                          |  |                    |         |                   |   |        
|US Unwired Inc. first priority senior secured floating rate notes due 2010 |  | $                  | 125,000 |                   | $ |       
|US Unwired Inc. 10% second priority senior secured notes due 2012          |  |                    | 233,455 |                   |   |       
|US Unwired Inc. 133/8% senior subordinated discount notes due 2009         |  |                    | 40,714  |                   |   | 359,302
|Capital leases                                                             |  |                    | 6,478   |                   |   | 6,825  
|US Unwired Inc. senior bank credit facility                                |  |                    |        |                   |   | 76,000 
|Promissory note                                                            |  |                    |        |                   |   | 3,452  
|Vendor financing                                                           |  |                    |        |                   |   | 311    
|                                                                           |  |                    |         |                   |   |        
|Total long-term obligations, US Unwired Inc.                               |  |                    | 405,647 |                   |   | 445,890
|                                                                           |  |                   
|IWO long-term obligations:                                                 |  |                    |         |                   |   |        
|IWO Holdings, Inc. senior notes                                            |  |                    | 139,816 |                   |   | 138,513
|IWO Holdings, Inc. senior bank credit facility, in default                 |  |                    | 215,000 |                   |   | 213,184
|                                                                           |  |                    |         |                   |   |        
|Total long-term obligations, IWO Holdings, Inc.                            |  |                    | 354,816 |                   |   | 351,697
|                                                                           |  |                   
|Less current maturities:                                                   |  |                    |         |                   |   |        
|US Unwired current maturities                                              |  |                    | 484     |                   |   | 11,145 
|IWO current maturities                                                     |  |                    | 354,816 |                   |   | 351,697
|                                                                           |  |                    |         |                   |   |        
|Total current maturities                                                   |  |                    | 355,300 |                   |   | 362,842
|                                                                           |  |                    |         |                   |   |        
|Long-term obligations, excluding current maturities                        |  | $                  | 405,163 |                   | $ | 434,745
|                                                                           |  |                    |         |                   |   |        



US Unwired and IWO
have separate debt structures. 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 long-term obligations



US Unwired First Priority Senior Secured Floating Rate Notes due 2010 and 10% Second Priority Senior Secured Notes due
2012



In June 2004, US Unwired issued $125 million
aggregate principal amount of First Priority Senior Secured Floating Rate Notes due June 15, 2010 (the 2010 Notes) and $235 million aggregate principal amount of 10% Second Priority Senior Secured Notes due June 15, 2012 (the 2012
Notes). The 2010 Notes bear interest at a floating rate equal to LIBOR plus 4.25% per year, and the 2012 Notes bear interest at a fixed rate of 10% per year. Interest on the 2010 Notes resets quarterly and is payable quarterly in arrears on
March 15, June 15, September 15 and December 15 of each year, beginning on September 15, 2004. Interest on the 2012 Notes is payable semi-annually on June 15 and December 15 of each year, beginning on December 15, 2004. The 2010 Notes will mature on
June 15, 2010, and the 2012 notes will mature on June 15, 2012. The Company may redeem all or a part of the 2010 Notes on or after June 15, 2006 and all or a part of the 2012 Notes on or after June 15, 2008. In addition, before June 15, 2006 the
Company may redeem up to 35% of the 2010 Notes, and before June 15, 2007 the Company may redeem up to 35% of the 2012 Notes, in each case with the proceeds of certain equity offerings. The 2010 Notes and 2012 Notes are senior secured obligations,
and are guaranteed on a senior secured basis by all of the Companys existing and future restricted subsidiaries. The US Unwired 2010 Notes and 2012 Notes are not guaranteed by IWO. The 2010 Notes and 2012 Notes rank equally in right of payment
with all existing and future senior debt and senior in right of payment to the US Unwired 133/8% senior notes
and any future subordinated debt. The 2010 Notes are secured on a first priority basis and the 2012 Notes are secured on a second priority basis, in each case by liens on substantially all of the US Unwireds assets.



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US Unwired Senior Subordinated Discount Notes  133/8%



In October 1999, the Company issued $400 million in aggregate principal amount of 133/8% senior subordinated discount notes due November 1, 2009. The 133/8% senior subordinated discount notes were issued at a substantial discount such that the Company received gross proceeds of approximately $209.2 million. The 133/8% 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 133/8% senior subordinated discount notes will be equal to the face amount of the 133/8% 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 133/8% senior subordinated discount notes are a general unsecured obligation of the Company. The 133/8% 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. As discussed in Note 3, as of November 1, 2004, the Company has retired all of the 133/8% US Unwired Senior Subordinated Discount Notes.



US Unwired Reimbursement and Collateral Account Agreement



On July 14, 2004, US Unwired entered into a Possessory Security Agreement
with Whitney National Bank (Whitney) pursuant to which US Unwired pledged cash to Whitney in an amount equal to 100% of US Unwireds maximum repayment obligations with respect to any letters of credit issued by Whitney National
Bank. As of September 30, 2004, the Company had $1.7 million in outstanding letters of credit.



IWO long-term obligations



Since March 2004, IWO has failed to make $8.8 million in principal payments due on the IWO senior secured credit facility. IWO was also not in compliance with its restrictive covenants under the IWO senior secured credit facility at
September 30, 2004. As a result of IWOs failure to make scheduled principal payments and the covenant violations, IWO was in default of the IWO senior secured credit facility at September 30, 2004 and the holders of the IWO senior secured
credit facility have denied IWO access to the remaining $23.4 million of availability.



In July 2004, IWO failed to make a scheduled interest payment of $11.2 million on the IWO senior notes and the holders of the IWO senior notes may declare IWO to be in default. In June 2004, IWO entered into an
agreement with an ad hoc committee of IWO note holders owning approximately 68% of the IWO senior notes pursuant to which such holders agreed to, under certain circumstances, not take any action to enforce their rights including accelerating the
principal amount of the IWO senior notes resulting from IWOs failure to make the interest payment of $11.2 million due on the senior notes on July 15, 2004.



As a result of this and those issues as discussed in Note 3, the Company has classified all outstanding indebtedness of both
the IWO senior secured credit facility and the IWO senior notes as a current liability.



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 secured 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.



12



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A portion of the original proceeds of the IWO senior notes was set aside as restricted cash and used to
make the first six scheduled interest payments on the IWO senior notes through January 2004.



IWO Senior Secured 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 secured 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 secured credit facility matures in 2008. The term loans are due to be repaid in quarterly
installments that began in March 2004 and the reducing revolver matures in March 2008. All loans under the senior secured 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 secured credit facility is secured by all of the assets of IWO and its subsidiaries. As discussed above, the holders of the IWO senior secured credit facility have denied IWO access to the remaining $23.4
million of availability as a result of IWOs covenant violations. IWO credit facility is available for use only by IWO and its subsidiaries.



|7. | Commitments and Contingencies
|-- | -----------------------------



In June 2004, the Company consummated its offering of $360 million of US Unwired senior secured notes, consisting of $125 million aggregate principal
amount of first priority senior secured floating rate notes due 2010 (2010 Notes) and $235 million aggregate principal amount of 10% second priority senior secured notes due 2012 (2012 Notes). The Company is required to use
$75.0 million of cash immediately following the issuance of the US Unwired senior secured notes to permanently reduce at any time, or from time to time, the principal amount of the US Unwired senior secured notes or the US Unwired 133/8% senior notes and may not use the cash for any other purpose. On November 1, 2004, the Company satisfied this
commitment by retiring its remaining outstanding 133/8% senior subordinated discount notes by purchasing $41.1
million aggregate face value for $43.9 million.



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 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 September 30, 2004, the Company had disputed approximately $28.2 million of charges to US Unwired and $15.2 million of
charges to IWO. Based upon the information provided to the Company by Sprint PCS to date, the Company believes the accompanying condensed consolidated balance sheet adequately reflects its obligation that may be due to Sprint PCS for these charges.



The Companys PCS licenses and the PCS licenses that the
Company operates for Sprint PCS are subject to a requirement that Sprint PCS 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 September 30, 2004, management believes that Sprint PCS has met the requirements necessary for the licenses that the Company operates for Sprint PCS under the Sprint PCS affiliation agreements and that the
Company has met the requirements necessary for the licenses that it owns.



13



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On July 11, 2003, US Unwired and two of its subsidiaries, Louisiana Unwired LLC and Texas Unwired
(US Unwired), filed suit in federal court in Louisiana against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom, Inc. (collectively, Sprint) and on September 25, 2003, US Unwired filed an amended
complaint. The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty, breach of contract, 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 or fiscal agent over property and assets controlled by Sprint. IWO is not a plaintiff in the original or the amended suit. On February 5, 2004, the U.S. District Court denied
in all respects Sprints previously-filed motion for judgment on the pleadings, stated that it was amenable to allowing US Unwired to hire an outside accounting company or other expert to monitor monies received by Sprint, and agreed with the
US Unwired position that certain claims are subject to trial by jury in Louisiana. On March 8, 2004, US Unwired filed its Second Amended Complaint against Sprint to include certain additional factual allegations related to its claims, as requested
by the Courts February 5 Order. On April 8, 2004, Sprint filed its Answer, Defenses, and Counterclaim to US Unwireds Second Amended Complaint, which included a claim that US Unwired owed Sprint approximately $16.3 million related to
contractual disputes between the parties. IWO is not a defendant in this suit. On March 25, 2004, US Unwired filed an application to appoint an outside accounting company or other expert to contemporaneously monitor monies paid to Sprint from US
Unwired customers. Sprint filed an objection to the US Unwired application. On June 14, 2004, the District Court granted US Unwireds motion to appoint an outside accounting company or other expert to the extent that the court announced its
intention to appoint a special master for the limited purpose of determining if accounting procedures are being performed accurately and in compliance with the terms of US Unwireds agreements with Sprint. On August 27, 2004, the District Court
appointed Robert S. Cohen, CPA, of Crowe Chizek & Company, LLP as the special master to consider and make findings upon issues that arise out of the accuracy of the accounting for revenues Sprint PCS passes on to US Unwired and the fees Sprint
PCS charges US Unwired. The special master will report proposed findings of fact to the court as findings of fact. On September 30, 2004, the court entered an order setting a schedule to complete the discovery process during 2004 and the court has
set a jury trial date for May 9, 2005. The Company does not believe that a negative outcome on Sprints counterclaim will have a material adverse effect on the Company.



|8. | Income Taxes
|-- | ------------



The Companys effective income tax rate for the interim periods presented is based on managements estimate of the Companys effective tax
rate for the applicable year and differs from the federal statutory income tax rate primarily due to nondeductible permanent differences, state income taxes and changes in the valuation allowance for deferred tax assets.



14



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|9. | Stock Compensation
|-- | ------------------



The Company accounts for its stock compensation arrangements under the provision of Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees.



Had compensation expense for the
Companys stock option plan been determined in accordance with Statement of Financial Accounting Standards (SFAS No. 123), the Companys net loss and basic and diluted net loss per share of common stock for the three and
nine-month periods ended September 30, 2004 and 2003 would have been:



|                                                        |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                        |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|                                                        |  | 2004                            |         |   | 2003                           |   |         | 2004 |  |   | 2003     |  
|Net loss:                                               |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|As reported                                             |  | $                               | (16,226 | ) |                                | $ | (31,307 | )    |  | $ | (100,925 | ) |  | $ | (123,799 | )
|Add recorded non-cash stock compensation                |  |                                 | 182     |   |                                |   | 210     |      |  |   | 271      |   |  |   | 2,182    |  
|Less stock compensation in accordance with SFAS No. 123 |  |                                 | (664    | ) |                                |   | (728    | )    |  |   | (1,828   | ) |  |   | (4,647   | )
|                                                        |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|Pro forma net loss                                      |  | $                               | (16,708 | ) |                                | $ | (31,825 | )    |  | $ | (102,482 | ) |  | $ | (126,264 | )
|                                                        |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|Basic and diluted loss per share:                       |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|As reported                                             |  | $                               | (0.10   | ) |                                | $ | (0.25   | )    |  | $ | (0.70    | ) |  | $ | (0.96    | )
|                                                        |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  
|Pro forma net loss per share                            |  | $                               | (0.10   | ) |                                | $ | (0.25   | )    |  | $ | (0.71    | ) |  | $ | (0.98    | )
|                                                        |  |                                 |         |   |                                |   |         |      |  |   |          |   |  |   |          |  

|10. | Stockholders Equity
|--- | --------------------



In June 2004, through a series of debt for equity exchanges, the Company completed agreements to retire $75 million face amount of US Unwired 133/8% senior subordinated discount notes due 2009 in exchange for 34,487,473 shares of its common stock valued at $96.4
million.



|11. | Condensed Consolidating Financial Information
|--- | ---------------------------------------------



As discussed in Note 6, the US Unwired Senior Subordinated Discount Notes, and the 2010 Notes and the 2012 Notes are guaranteed by certain of the
Companys subsidiaries. The following information presents the condensed consolidating balance sheets as of September 30, 2004 and December 31, 2003 and the condensed consolidating statements of operations and cash flows for the three and
nine-month periods ended September 30, 2004 and September 30, 2003 of (a) the Parent Company, US Unwired Inc., (b) the Guarantors, Unwired Telecom Corporation and Louisiana Unwired LLC, and (c) the Non-Guarantor,
IWO, 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-Q filing.



15



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Condensed Consolidating Balance Sheet



|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|------------------------------------------------------------------------ |  | ------------------------ | ---------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | --------------------------------- | -------- | - | -------------------- | - | -------- | ------------ |  | - | ---------- | - |  | - | -------- | -
|                                                                         |  | September 30, 2004       |           
|                                                                         |  | US Unwired Inc. (Parent) |            |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings, Inc. (Non-Guarantor) |          |   | ConsolidatingEntries |   |          | Consolidated | 
|                                                                         |  | (In thousands)           |           
|ASSETS:                                                                  |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current Assets:                                                          |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Cash and cash equivalents                                                |  | $                        | 119,601    |   |                                      | $ |       |                                |  | $ | 6,742            |   |  | $                                 | 6,742    |   |                      | $ | 41,044   |              |  | $ |           |   |  | $ | 167,387  |  
|Restricted cash                                                          |  |                          |           |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   | 79       |              |  |   |           |   |  |   | 79       |  
|Subscriber receivables, net                                              |  |                          |           |   |                                      |   |       |                                |  |   | 23,506           |   |  |                                   | 23,506   |   |                      |   | 11,107   |              |  |   |           |   |  |   | 34,613   |  
|Other receivables                                                        |  |                          | 85         |   |                                      |   |       |                                |  |   | 1,429            |   |  |                                   | 1,429    |   |                      |   | 153      |              |  |   |           |   |  |   | 1,667    |  
|Inventory                                                                |  |                          |           |   |                                      |   |       |                                |  |   | 3,055            |   |  |                                   | 3,055    |   |                      |   | 1,173    |              |  |   |           |   |  |   | 4,228    |  
|Prepaid expenses and other assets                                        |  |                          | 1,534      |   |                                      |   |       |                                |  |   | 8,428            |   |  |                                   | 8,428    |   |                      |   | 6,986    |              |  |   |           |   |  |   | 16,948   |  
|Receivables from (payables to) related parties                           |  |                          | 887        |   |                                      |   |       |                                |  |   | 922              |   |  |                                   | 922      |   |                      |   | (1,164   | )            |  |   |           |   |  |   | 645      |  
|Receivables from officers                                                |  |                          | 116        |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   |         |              |  |   |           |   |  |   | 116      |  
|Current assets related to discontinued operations                        |  |                          |           |   |                                      |   | 63     |                                |  |   |                 |   |  |                                   | 63       |   |                      |   |         |              |  |   |           |   |  |   | 63       |  
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current assets                                                     |  |                          | 122,223    |   |                                      |   | 63     |                                |  |   | 44,082           |   |  |                                   | 44,145   |   |                      |   | 59,378   |              |  |   |           |   |  |   | 225,746  |  
|Property and equipment, net                                              |  |                          | 9,333      |   |                                      |   |       |                                |  |   | 205,088          |   |  |                                   | 205,088  |   |                      |   | 154,576  |              |  |   | 31         |   |  |   | 369,028  |  
|Goodwill and other intangible assets, net                                |  |                          |           |   |                                      |   |       |                                |  |   | 60,010           |   |  |                                   | 60,010   |   |                      |   | 17,612   |              |  |   |           |   |  |   | 77,622   |  
|Notes receivable from unconsolidated affiliates                          |  |                          | 76,228     |   |                                      |   | 1,944  |                                |  |   |                 |   |  |                                   | 1,944    |   |                      |   |         |              |  |   | (76,228    | ) |  |   | 1,944    |  
|Other assets                                                             |  |                          | 15,756     |   |                                      |   |       |                                |  |   | 4,581            |   |  |                                   | 4,581    |   |                      |   | 14,191   |              |  |   |           |   |  |   | 34,528   |  
|Non-current assets related to discontinued operations                    |  |                          |           |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   |         |              |  |   |           |   |  |   |         |  
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total assets                                                             |  | $                        | 223,540    |   |                                      | $ | 2,007  |                                |  | $ | 313,761          |   |  | $                                 | 315,768  |   |                      | $ | 245,757  |              |  | $ | (76,197    | ) |  | $ | 708,868  |  
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):                          |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current liabilities:                                                     |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Accounts payable                                                         |  | $                        | 1,205      |   |                                      | $ |       |                                |  | $ | 36,302           |   |  | $                                 | 36,302   |   |                      | $ | 19,874   |              |  | $ |           |   |  | $ | 57,381   |  
|Accrued expenses                                                         |  |                          | 14,245     |   |                                      |   |       |                                |  |   | 40,969           |   |  |                                   | 40,969   |   |                      |   | 37,421   |              |  |   |           |   |  |   | 92,635   |  
|Current maturities of long term obligations                              |  |                          |           |   |                                      |   |       |                                |  |   | 76,712           |   |  |                                   | 76,711   |   |                      |   | 354,816  |              |  |   | (76,228    | ) |  |   | 355,300  |  
|Current liabilities related to discontinued operations                   |  |                          |           |   |                                      |   | 647    |                                |  |   |                 |   |  |                                   | 647      |   |                      |   |         |              |  |   |           |   |  |   | 647      |  
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current liabilities                                                |  |                          | 15,450     |   |                                      |   | 647    |                                |  |   | 153,983          |   |  |                                   | 154,629  |   |                      |   | 412,111  |              |  |   | (76,228    | ) |  |   | 505,963  |  
|                                                                         |  |                          |            |   |                                      |   |       
|Long term obligations, net of current maturities                         |  |                          | 399,169    |   |                                      |   |       |                                |  |   | 5,994            |   |  |                                   | 5,994    |   |                      |   |         |              |  |   |           |   |  |   | 405,163  |  
|Deferred gain                                                            |  |                          |           |   |                                      |   |       |                                |  |   | 28,265           |   |  |                                   | 28,265   |   |                      |   | 501      |              |  |   |           |   |  |   | 28,766   |  
|Investments in and advance to consolidated and unconsolidated affiliates |  |                          | 78,097     |   |                                      |   | 3,242  |                                |  |   | 167,048          |   |  |                                   | 170,290  |   |                      |   |         |              |  |   | (245,785   | ) |  |   | 2,602    |  
|                                                                         |  |                          |            |   |                                      |   |       
|Stockholders equity (deficit):                                          |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Common stock                                                             |  |                          | 1,636      |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   | 1        |              |  |   | (1         | ) |  |   | 1,636    |  
|Additional paid in capital                                               |  |                          | 752,557    |   |                                      |   | 1,947  |                                |  |   | 803,808          |   |  |                                   | 805,755  |   |                      |   | 446,449  |              |  |   | (1,253,325 | ) |  |   | 751,436  |  
|Retained earnings (deficit)                                              |  |                          | (1,023,359 | ) |                                      |   | (3,829 | )                              |  |   | (845,337         | ) |  |                                   | (849,165 | ) |                      |   | (613,305 | )            |  |   | 1,499,142  |   |  |   | (986,688 | )
|Treasury stock                                                           |  |                          | (10        | ) |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   |         |              |  |   |           |   |  |   | (10      | )
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total stockholders equity (deficit)                                     |  |                          | (269,176   | ) |                                      |   | (1,882 | )                              |  |   | (41,529          | ) |  |                                   | (43,410  | ) |                      |   | (166,855 | )            |  |   | 245,816    |   |  |   | (233,626 | )
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total liabilities and stockholders equity (deficit)                     |  | $                        | 223,540    |   |                                      | $ | 2,007  |                                |  | $ | 313,761          |   |  | $                                 | 315,768  |   |                      | $ | 245,757  |              |  | $ | (76,197    | ) |  | $ | 708,868  |  
|                                                                         |  |                          |            |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  



16



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##### Table of Contents

Condensed Consolidating Balance Sheet



|                                                                         |  |                        |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|------------------------------------------------------------------------ |  | ---------------------- | -------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | --------------------------------- | -------- | - | -------------------- | - | -------- | ------------ |  | - | ---------- | - |  | - | -------- | -
|                                                                         |  | December 31, 2003      |         
|                                                                         |  | USUnwiredInc. (Parent) |          |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings, Inc. (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                                                          |  |                        |         |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   | 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 obligations                              |  |                        | 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 obligations, 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 consolidated and unconsolidated affiliates |  |                        | 14,664   |   |                                      |   | 1,857  |                                |  |   | 130,800          |   |  |                                   | 132,657  |   |                      |   |         |              |  |   | (146,105   | ) |  |   | 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 earnings (deficit)                                              |  |                        | (922,377 | ) |                                      |   | 36,329 |                                |  |   | (822,122         | ) |  |                                   | (785,793 | ) |                      |   | (577,057 | )            |  |   | 1,399,462  |   |  |   | (885,765 | )
|Promissory note                                                          |  |                        |         |   |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   |         |              |  |   | (179       | ) |  |   | (179     | )
|Treasury stock                                                           |  |                        | (10      | ) |                                      |   |       |                                |  |   |                 |   |  |                                   |         |   |                      |   |         |              |  |   |           |   |  |   | (10      | )
|                                                                         |  |                        |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total stockholders equity (deficit)                                     |  |                        | (265,079 | ) |                                      |   | 38,276 |                                |  |   | (18,314          | ) |  |                                   | 19,962   |   |                      |   | (130,607 | )            |  |   | 145,957    |   |  |   | (229,767 | )
|                                                                         |  |                        |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total liabilities and stockholders equity (deficit)                     |  | $                      | 227,366  |   |                                      | $ | 41,518 |                                |  | $ | 347,249          |   |  | $                                 | 388,767  |   |                      | $ | 277,313  |              |  | $ | (175,118   | ) |  | $ | 718,328  |  
|                                                                         |  |                        |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |          |   |                      |   |          |              |  |   |            |   |  |   |          |  



17



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##### Table of Contents

Condensed Consolidating Statement of Operations



|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------------------- | ------- | - | ------------------------------------ | - | --- | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                          |  | Three-month period ended September 30, 2004 |        
|                                                                          |  | USUnwiredInc. (Parent)                      |         |   | UnwiredTelecomCorporation(Guarantor) |   |     | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                                          |  | (In thousands)                              |        
|Revenues:                                                                 |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Subscriber                                                                |  | $                                           |        |   |                                      | $ |    |                                |  | $ | 73,556           |   |  | $                                | 73,556  |   |                      | $ | 36,278  |              |  | $ |       |   |  | $ | 109,834 |  
|Roaming                                                                   |  |                                             |        |   |                                      |   |    |                                |  |   | 25,056           |   |  |                                  | 25,056  |   |                      |   | 10,790  |              |  |   | (127   | ) |  |   | 35,719  |  
|Merchandise sales                                                         |  |                                             |        |   |                                      |   |    |                                |  |   | 4,335            |   |  |                                  | 4,335   |   |                      |   | 2,320   |              |  |   |       |   |  |   | 6,655   |  
|Other revenue                                                             |  |                                             | 6,863   |   |                                      |   |    |                                |  |   | 403              |   |  |                                  | 403     |   |                      |   | 96      |              |  |   | (6,799 | ) |  |   | 563     |  
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total revenues                                                            |  |                                             | 6,863   |   |                                      |   |    |                                |  |   | 103,350          |   |  |                                  | 103,350 |   |                      |   | 49,484  |              |  |   | (6,926 | ) |  |   | 152,771 |  
|Expenses:                                                                 |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Cost of service                                                           |  |                                             | 809     |   |                                      |   |    |                                |  |   | 56,045           |   |  |                                  | 56,045  |   |                      |   | 25,613  |              |  |   | (936   | ) |  |   | 81,531  |  
|Merchandise cost of sales                                                 |  |                                             |        |   |                                      |   |    |                                |  |   | 8,349            |   |  |                                  | 8,349   |   |                      |   | 4,183   |              |  |   |       |   |  |   | 12,532  |  
|General and administrative                                                |  |                                             | 5,671   |   |                                      |   |    |                                |  |   | 4,051            |   |  |                                  | 4,051   |   |                      |   | 4,303   |              |  |   | (5,607 | ) |  |   | 8,418   |  
|Sales and marketing                                                       |  |                                             | 383     |   |                                      |   |    |                                |  |   | 12,264           |   |  |                                  | 12,264  |   |                      |   | 7,337   |              |  |   | (383   | ) |  |   | 19,601  |  
|Non-cash stock compensation                                               |  |                                             | 182     |   |                                      |   |    |                                |  |   |                 |   |  |                                  |        |   |                      |   |        |              |  |   |       |   |  |   | 182     |  
|Depreciation and amortization                                             |  |                                             | 476     |   |                                      |   |    |                                |  |   | 14,231           |   |  |                                  | 14,231  |   |                      |   | 7,019   |              |  |   |       |   |  |   | 21,726  |  
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total operating expense                                                   |  |                                             | 7,521   |   |                                      |   |    |                                |  |   | 94,940           |   |  |                                  | 94,940  |   |                      |   | 48,455  |              |  |   | (6,926 | ) |  |   | 143,990 |  
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Operating income (loss)                                                   |  |                                             | (658    | ) |                                      |   |    |                                |  |   | 8,410            |   |  |                                  | 8,410   |   |                      |   | 1,029   |              |  |   |       |   |  |   | 8,781   |  
|                                                                          |  |                                             |         |   |                                      |   |    
|Other income (expense), net                                               |  |                                             | (14,273 | ) |                                      |   | 772 |                                |  |   | (1,191           | ) |  |                                  | (419    | ) |                      |   | (10,285 | )            |  |   |       |   |  |   | (24,977 | )
|Equity in income (losses) of consolidated and unconsolidated subsidiaries |  |                                             | (1,294  | ) |                                      |   | (30 | )                              |  |   | (9,256           | ) |  |                                  | (9,286  | ) |                      |   |        |              |  |   | 10,550 |   |  |   | (30     | )
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss) from continuing operations                              |  |                                             | (16,225 | ) |                                      |   | 742 |                                |  |   | (2,037           | ) |  |                                  | (1,295  | ) |                      |   | (9,256  | )            |  |   | 10,550 |   |  |   | (16,226 | )
|Loss from discontinued operations, net                                    |  |                                             |        |   |                                      |   |    |                                |  |   |                 |   |  |                                  |        |   |                      |   |        |              |  |   |       |   |  |   |        |  
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss)                                                         |  | $                                           | (16,225 | ) |                                      | $ | 742 |                                |  | $ | (2,037           | ) |  | $                                | (1,295  | ) |                      | $ | (9,256  | )            |  | $ | 10,550 |   |  | $ | (16,226 | )
|                                                                          |  |                                             |         |   |                                      |   |     |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  



Condensed Consolidating Statement of Operations



|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------------------- | ------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                                          |  | Three-month period ended September 30, 2003 |        
|                                                                          |  | USUnwiredInc. (Parent)                      |         |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                                          |  | (In thousands)                              |        
|Revenues:                                                                 |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Subscriber                                                                |  | $                                           |        |   |                                      | $ |                               |  | $ | 64,521           |   |  | $                                | 64,521  |   |                      | $ | 34,042  |              |  | $ |       |   |  | $ | 98,563  |  
|Roaming                                                                   |  |                                             |        |   |                                      |   |                               |  |   | 24,351           |   |  |                                  | 24,351  |   |                      |   | 10,257  |              |  |   | (142   | ) |  |   | 34,466  |  
|Merchandise sales                                                         |  |                                             |        |   |                                      |   |                               |  |   | 3,887            |   |  |                                  | 3,887   |   |                      |   | 1,750   |              |  |   |       |   |  |   | 5,637   |  
|Other revenue                                                             |  |                                             | 7,117   |   |                                      |   |                               |  |   | 335              |   |  |                                  | 335     |   |                      |   | 120     |              |  |   | (6,933 | ) |  |   | 639     |  
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total revenues                                                            |  |                                             | 7,117   |   |                                      |   |                               |  |   | 93,094           |   |  |                                  | 93,094  |   |                      |   | 46,169  |              |  |   | (7,075 | ) |  |   | 139,305 |  
|Expenses:                                                                 |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Cost of service                                                           |  |                                             | 736     |   |                                      |   |                               |  |   | 53,288           |   |  |                                  | 53,288  |   |                      |   | 26,064  |              |  |   | (935   | ) |  |   | 79,153  |  
|Merchandise cost of sales                                                 |  |                                             |        |   |                                      |   |                               |  |   | 8,467            |   |  |                                  | 8,467   |   |                      |   | 3,284   |              |  |   |       |   |  |   | 11,751  |  
|General and administrative                                                |  |                                             | 5,564   |   |                                      |   |                               |  |   | 4,144            |   |  |                                  | 4,144   |   |                      |   | 2,441   |              |  |   | (5,118 | ) |  |   | 7,031   |  
|Sales and marketing                                                       |  |                                             | 817     |   |                                      |   |                               |  |   | 12,042           |   |  |                                  | 12,042  |   |                      |   | 7,392   |              |  |   | (778   | ) |  |   | 19,473  |  
|Non-cash stock compensation                                               |  |                                             | 218     |   |                                      |   |                               |  |   | (8               | ) |  |                                  | (8      | ) |                      |   |        |              |  |   |       |   |  |   | 210     |  
|Depreciation and amortization                                             |  |                                             | 698     |   |                                      |   |                               |  |   | 15,440           |   |  |                                  | 15,440  |   |                      |   | 13,786  |              |  |   |       |   |  |   | 29,924  |  
|IWO asset abandonment charge                                              |  |                                             |        |   |                                      |   |                               |  |   |                 |   |  |                                  |        |   |                      |   |        |              |  |   |       |   |  |   |        |  
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total operating expense                                                   |  |                                             | 8,033   |   |                                      |   |                               |  |   | 93,373           |   |  |                                  | 93,373  |   |                      |   | 52,967  |              |  |   | (6,831 | ) |  |   | 147,542 |  
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Operating income (loss)                                                   |  |                                             | (916    | ) |                                      |   |                               |  |   | (279             | ) |  |                                  | (279    | ) |                      |   | (6,798  | )            |  |   | (244   | ) |  |   | (8,237  | )
|                                                                          |  |                                             |         |   |                                      |   |                               
|Other income (expense), net                                               |  |                                             | (11,301 | ) |                                      |   | 364                            |  |   | (1,987           | ) |  |                                  | (1,623  | ) |                      |   | (10,820 | )            |  |   |       |   |  |   | (23,744 | )
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Equity in income (losses) of consolidated and unconsolidated subsidiaries |  |                                             | (18,834 | ) |                                      |   | 57                             |  |   | (17,618          | ) |  |                                  | (17,561 | ) |                      |   |        |              |  |   | 36,452 |   |  |   | 57      |  
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss) from continuing operations                              |  |                                             | (31,051 | ) |                                      |   | 421                            |  |   | (19,884          | ) |  |                                  | (19,463 | ) |                      |   | (17,618 | )            |  |   | 36,208 |   |  |   | (31,924 | )
|Income from discontinued operations, net                                  |  |                                             |        |   |                                      |   | 373                            |  |   |                 |   |  |                                  | 373     |   |                      |   |        |              |  |   | 244    |   |  |   | 617     |  
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss)                                                         |  | $                                           | (31,051 | ) |                                      | $ | 794                            |  | $ | (19,884          | ) |  | $                                | (19,090 | ) |                      | $ | (17,618 | )            |  | $ | 36,452 |   |  | $ | (31,307 | )
|                                                                          |  |                                             |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  



18



---

##### Table of Contents

Condensed Consolidating Statement of Operations



|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|------------------------------------------------------------------------- |  | ------------------------------------------ | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | -------- | -
|                                                                          |  | Nine-month period ended September 30, 2004 |         
|                                                                          |  | USUnwiredInc. (Parent)                     |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                                          |  | (In thousands)                             |         
|Revenues:                                                                 |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Subscriber                                                                |  | $                                          |         |   |                                      | $ |                               |  | $ | 214,576          |   |  | $                                | 214,576 |   |                      | $ | 104,396 |              |  | $ |        |   |  | $ | 318,972  |  
|Roaming                                                                   |  |                                            |         |   |                                      |   |                               |  |   | 71,842           |   |  |                                  | 71,842  |   |                      |   | 28,504  |              |  |   | (370    | ) |  |   | 99,976   |  
|Merchandise sales                                                         |  |                                            |         |   |                                      |   |                               |  |   | 15,151           |   |  |                                  | 15,151  |   |                      |   | 6,774   |              |  |   |        |   |  |   | 21,925   |  
|Other revenue                                                             |  |                                            | 20,695   |   |                                      |   |                               |  |   | 699              |   |  |                                  | 699     |   |                      |   | 271     |              |  |   | (20,264 | ) |  |   | 1,401    |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Total revenues                                                            |  |                                            | 20,695   |   |                                      |   |                               |  |   | 302,268          |   |  |                                  | 302,268 |   |                      |   | 139,945 |              |  |   | (20,634 | ) |  |   | 442,274  |  
|Expenses:                                                                 |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Cost of service                                                           |  |                                            | 2,698    |   |                                      |   |                               |  |   | 156,293          |   |  |                                  | 156,293 |   |                      |   | 72,749  |              |  |   | (3,102  | ) |  |   | 228,638  |  
|Merchandise cost of sales                                                 |  |                                            |         |   |                                      |   |                               |  |   | 28,771           |   |  |                                  | 28,771  |   |                      |   | 13,107  |              |  |   |        |   |  |   | 41,878   |  
|General and administrative                                                |  |                                            | 16,737   |   |                                      |   |                               |  |   | 12,287           |   |  |                                  | 12,287  |   |                      |   | 11,205  |              |  |   | (16,164 | ) |  |   | 24,065   |  
|Sales and marketing                                                       |  |                                            | 1,260    |   |                                      |   |                               |  |   | 42,515           |   |  |                                  | 42,515  |   |                      |   | 22,512  |              |  |   | (1,303  | ) |  |   | 64,984   |  
|Non-cash stock compensation                                               |  |                                            | 271      |   |                                      |   |                               |  |   |                 |   |  |                                  |        |   |                      |   |        |              |  |   |        |   |  |   | 271      |  
|Depreciation and amortization                                             |  |                                            | 1,397    |   |                                      |   |                               |  |   | 43,102           |   |  |                                  | 43,102  |   |                      |   | 27,858  |              |  |   |        |   |  |   | 72,357   |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Total operating expense                                                   |  |                                            | 22,363   |   |                                      |   |                               |  |   | 282,968          |   |  |                                  | 282,968 |   |                      |   | 147,431 |              |  |   | (20,569 | ) |  |   | 432,193  |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Operating income (loss)                                                   |  |                                            | (1,668   | ) |                                      |   |                               |  |   | 19,300           |   |  |                                  | 19,300  |   |                      |   | (7,486  | )            |  |   | (65     | ) |  |   | 10,081   |  
|                                                                          |  |                                            |          |   |                                      |   |                               
|Other income (expense), net                                               |  |                                            | (96,044  | ) |                                      |   | 3,428                          |  |   | (6,267           | ) |  |                                  | (2,839  | ) |                      |   | (28,762 | )            |  |   |        |   |  |   | (127,645 | )
|Equity in income (losses) of consolidated and unconsolidated subsidiaries |  |                                            | (2,873   | ) |                                      |   | 224                            |  |   | (36,248          | ) |  |                                  | (36,024 | ) |                      |   |        |              |  |   | 39,121  |   |  |   | 224      |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Net income (loss) from continuing operations                              |  |                                            | (100,585 | ) |                                      |   | 3,652                          |  |   | (23,215          | ) |  |                                  | (19,563 | ) |                      |   | (36,248 | )            |  |   | 39,056  |   |  |   | (117,340 | )
|Income from discontinued operations, net                                  |  |                                            |         |   |                                      |   | 16,350                         |  |   |                 |   |  |                                  | 16,350  |   |                      |   |        |              |  |   | 65      |   |  |   | 16,415   |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Net income (loss)                                                         |  | $                                          | (100,585 | ) |                                      | $ | 20,002                         |  | $ | (23,215          | ) |  | $                                | (3,213  | ) |                      | $ | (36,248 | )            |  | $ | 39,121  |   |  | $ | (100,925 | )
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  



|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|------------------------------------------------------------------------- |  | ------------------------------------------ | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | -------- | -
|                                                                          |  | Nine-month period ended September 30, 2003 |         
|                                                                          |  | USUnwiredInc. (Parent)                     |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                                          |  | (In thousands)                             |         
|Revenues:                                                                 |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Subscriber                                                                |  | $                                          |         |   |                                      | $ |                               |  | $ | 189,521          |   |  | $                                | 189,521 |   |                      | $ | 96,785  |              |  | $ |        |   |  | $ | 286,306  |  
|Roaming                                                                   |  |                                            |         |   |                                      |   |                               |  |   | 67,594           |   |  |                                  | 67,594  |   |                      |   | 25,641  |              |  |   | (427    | ) |  |   | 92,808   |  
|Merchandise sales                                                         |  |                                            |         |   |                                      |   |                               |  |   | 11,729           |   |  |                                  | 11,729  |   |                      |   | 4,979   |              |  |   |        |   |  |   | 16,708   |  
|Other revenue                                                             |  |                                            | 25,154   |   |                                      |   |                               |  |   | 935              |   |  |                                  | 935     |   |                      |   | 397     |              |  |   | (24,595 | ) |  |   | 1,891    |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Total revenues                                                            |  |                                            | 25,154   |   |                                      |   |                               |  |   | 269,779          |   |  |                                  | 269,779 |   |                      |   | 127,802 |              |  |   | (25,022 | ) |  |   | 397,713  |  
|Expenses:                                                                 |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Cost of service                                                           |  |                                            | 2,132    |   |                                      |   |                               |  |   | 155,507          |   |  |                                  | 155,507 |   |                      |   | 77,581  |              |  |   | (2,741  | ) |  |   | 232,479  |  
|Merchandise cost of sales                                                 |  |                                            |         |   |                                      |   |                               |  |   | 21,431           |   |  |                                  | 21,431  |   |                      |   | 8,159   |              |  |   |        |   |  |   | 29,590   |  
|General and administrative                                                |  |                                            | 20,080   |   |                                      |   |                               |  |   | 16,093           |   |  |                                  | 16,093  |   |                      |   | 9,263   |              |  |   | (18,707 | ) |  |   | 26,729   |  
|Sales and marketing                                                       |  |                                            | 2,942    |   |                                      |   |                               |  |   | 42,685           |   |  |                                  | 42,685  |   |                      |   | 23,142  |              |  |   | (2,810  | ) |  |   | 65,959   |  
|Non-cash stock compensation                                               |  |                                            | 2,088    |   |                                      |   |                               |  |   | 94               |   |  |                                  | 94      |   |                      |   |        |              |  |   |        |   |  |   | 2,182    |  
|Depreciation and amortization                                             |  |                                            | 2,011    |   |                                      |   |                               |  |   | 46,304           |   |  |                                  | 46,304  |   |                      |   | 40,751  |              |  |   |        |   |  |   | 89,066   |  
|IWO asset abandonment charge                                              |  |                                            |         |   |                                      |   |                               |  |   |                 |   |  |                                  |        |   |                      |   | 12,403  |              |  |   |        |   |  |   | 12,403   |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Total operating expense                                                   |  |                                            | 29,253   |   |                                      |   |                               |  |   | 282,114          |   |  |                                  | 282,114 |   |                      |   | 171,299 |              |  |   | (24,258 | ) |  |   | 458,408  |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Operating income (loss)                                                   |  |                                            | (4,099   | ) |                                      |   |                               |  |   | (12,335          | ) |  |                                  | (12,335 | ) |                      |   | (43,497 | )            |  |   | (764    | ) |  |   | (60,695  | )
|                                                                          |  |                                            |          |   |                                      |   |                               
|Other income (expense), net                                               |  |                                            | (31,978  | ) |                                      |   | 1,042                          |  |   | (6,048           | ) |  |                                  | (5,006  | ) |                      |   | (28,691 | )            |  |   |        |   |  |   | (65,675  | )
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Equity in income (losses) of consolidated and unconsolidated subsidiaries |  |                                            | (87,174  | ) |                                      |   | 205                            |  |   | (72,188          | ) |  |                                  | (71,983 | ) |                      |   |        |              |  |   | 159,348 |   |  |   | 191      |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Net income (loss) from continuing operations                              |  |                                            | (123,251 | ) |                                      |   | 1,247                          |  |   | (90,571          | ) |  |                                  | (89,324 | ) |                      |   | (72,188 | )            |  |   | 158,584 |   |  |   | (126,179 | )
|Income from discontinued operations, net                                  |  |                                            |         |   |                                      |   | 1,616                          |  |   |                 |   |  |                                  | 1,616   |   |                      |   |        |              |  |   | 764     |   |  |   | 2,380    |  
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  
|Net income (loss)                                                         |  | $                                          | (123,251 | ) |                                      | $ | 2,863                          |  | $ | (90,571          | ) |  | $                                | (87,708 | ) |                      | $ | (72,188 | )            |  | $ | 159,348 |   |  | $ | (123,799 | )
|                                                                          |  |                                            |          |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |         |   |  |   |          |  



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##### Table of Contents

Condensed Consolidating Statement of Cash Flows



|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|---------------------------------------------------- |  | ------------------------------------------ | -------- | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | --------------------------------- | ------- | - | -------------------- | - | ------ | ------------ |  | - | ------- | - |  | - | -------- | -
|                                                     |  | Nine-month period ended September 30, 2004 |         
|                                                     |  | USUnwiredInc.(Parent)                      |          |   | UnwiredTelecomCorporation(Guarantor) |   |        | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings, Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |        | Consolidated | 
|                                                     |  | (In thousands)                             |         
|Cash flows from operating activities:                |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Net cash provided by (used in) operating activities  |  | $                                          | (9,891   | ) |                                      | $ | 2,827  |                                |  | $ | 73,926           |   |  | $                                 | 76,753  |   |                      | $ | (5,128 | )            |  | $ |        |   |  | $ | 61,734   |  
|                                                     |  |                                            |          |   |                                      |   |       
|Cash flows from investing activities:                |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Payments for the purchase of equipment               |  |                                            | (471     | ) |                                      |   |       |                                |  |   | (16,154          | ) |  |                                   | (16,154 | ) |                      |   | (7,419 | )            |  |   |        |   |  |   | (24,044  | )
|Proceeds from the sale of assets                     |  |                                            | 42,853   |   |                                      |   |       |                                |  |   | 302              |   |  |                                   | 302     |   |                      |   | 159    |              |  |   |        |   |  |   | 43,314   |  
|Release of restricted cash                           |  |                                            |         |   |                                      |   |       |                                |  |   |                 |   |  |                                   |        |   |                      |   | 19,279 |              |  |   |        |   |  |   | 19,279   |  
|Distribution from unconsolidated affiliates          |  |                                            |         |   |                                      |   | 500    |                                |  |   |                 |   |  |                                   | 500     |   |                      |   |       |              |  |   |        |   |  |   | 500      |  
|Disbursement of intercompany note                    |  |                                            | 54,506   |   |                                      |   | (3,927 | )                              |  |   |                 |   |  |                                   | (3,927  | ) |                      |   |       |              |  |   | (50,579 | ) |  |   |         |  
|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Net cash provided by (used in) investing activities  |  |                                            | 96,888   |   |                                      |   | (3,427 | )                              |  |   | (15,852          | ) |  |                                   | (19,279 | ) |                      |   | 12,019 |              |  |   | (50,579 | ) |  |   | 39,049   |  
|                                                     |  |                                            |          |   |                                      |   |       
|Cash flows from financing activities:                |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Proceeds from long-term debt                         |  |                                            | 362,342  |   |                                      |   |       |                                |  |   | 5,550            |   |  |                                   | 5,550   |   |                      |   | 1,816  |              |  |   | (9,476  | ) |  |   | 360,232  |  
|Proceeds from exercised options                      |  |                                            | 307      |   |                                      |   |       |                                |  |   |                 |   |  |                                   |        |   |                      |   |       |              |  |   |        |   |  |   | 307      |  
|Principal payments of long-term debt                 |  |                                            | (377,961 | ) |                                      |   | (311   | )                              |  |   | (60,403          | ) |  |                                   | (60,714 | ) |                      |   |       |              |  |   | 60,055  |   |  |   | (378,620 | )
|Debt issuance costs                                  |  |                                            | (12,508  | ) |                                      |   |       |                                |  |   |                 |   |  |                                   |        |   |                      |   |       |              |  |   |        |   |  |   | (12,508  | )
|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Net cash provided by (used in) financing activities  |  |                                            | (27,820  | ) |                                      |   | (311   | )                              |  |   | (54,853          | ) |  |                                   | (55,164 | ) |                      |   | 1,816  |              |  |   | 50,579  |   |  |   | (30,589  | )
|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Net increase (decrease) in cash and cash equivalents |  |                                            | 59,177   |   |                                      |   | (911   | )                              |  |   | 3,221            |   |  |                                   | 2,310   |   |                      |   | 8,707  |              |  |   |        |   |  |   | 70,194   |  
|Cash and cash equivalents at beginning of period     |  |                                            | 60,424   |   |                                      |   | 911    |                                |  |   | 3,521            |   |  |                                   | 4,432   |   |                      |   | 32,337 |              |  |   |        |   |  |   | 97,193   |  
|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  
|Cash and cash equivalents at end of period           |  | $                                          | 119,601  |   |                                      | $ |       |                                |  | $ | 6,742            |   |  | $                                 | 6,742   |   |                      | $ | 41,044 |              |  | $ |        |   |  | $ | 167,387  |  
|                                                     |  |                                            |          |   |                                      |   |        |                                |  |   |                  |   |  |                                   |         |   |                      |   |        |              |  |   |         |   |  |   |          |  



Condensed Consolidating Statement of Cash Flows



|                                                     |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ------------------------------------------ | ------ | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Nine-month period ended September 30, 2003 |       
|                                                     |  | USUnwiredInc.(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  |  | $                                          | 3,162  |   |                                      | $ | 4,647  |                                |  | $ | 45,253           |   |  | $                              | 49,900  |   |                      | $ | (18,070 | )            |  | $ |        |   |  | $ | 34,992  |  
|                                                     |  |                                            |        |   |                                      |   |       
|Cash flows from investing activities:                |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Payments for the purchase of equipment               |  |                                            | (236   | ) |                                      |   | (54    | )                              |  |   | (14,845          | ) |  |                                | (14,899 | ) |                      |   | (11,226 | )            |  |   |        |   |  |   | (26,361 | )
|Proceeds from the sale of assets                     |  |                                            |       |   |                                      |   | 350    |                                |  |   |                 |   |  |                                | 350     |   |                      |   |        |              |  |   |        |   |  |   | 350     |  
|Release of restricted cash                           |  |                                            |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   | 21,924  |              |  |   |        |   |  |   | 21,924  |  
|Distribution from unconsolidated affiliates          |  |                                            |       |   |                                      |   | 250    |                                |  |   |                 |   |  |                                | 250     |   |                      |   |        |              |  |   |        |   |  |   | 250     |  
|Disbursement of intercompany note                    |  |                                            | 29,511 |   |                                      |   | (7,333 | )                              |  |   |                 |   |  |                                | (7,333  | ) |                      |   |        |              |  |   | (22,178 | ) |  |   |        |  
|                                                     |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) investing activities  |  |                                            | 29,275 |   |                                      |   | (6,787 | )                              |  |   | (14,845          | ) |  |                                | (21,632 | ) |                      |   | 10,698  |              |  |   | (22,178 | ) |  |   | (3,837  | )
|                                                     |  |                                            |        |   |                                      |   |       
|Cash flows from financing activities:                |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Proceeds from long-term debt                         |  |                                            | 8,112  |   |                                      |   |       |                                |  |   | 37,305           |   |  |                                | 37,305  |   |                      |   |        |              |  |   | (45,417 | ) |  |   |        |  
|Proceeds from exercised options                      |  |                                            |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |        |  
|Proceeds from promissory notes                       |  |                                            |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |        |  
|Principal payments of long-term debt                 |  |                                            | (3,607 | ) |                                      |   | (44    | )                              |  |   | (67,147          | ) |  |                                | (67,191 | ) |                      |   |        |              |  |   | 67,595  |   |  |   | (3,203  | )
|Debt issuance costs                                  |  |                                            |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |        |  
|                                                     |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) financing activities  |  |                                            | 4,505  |   |                                      |   | (44    | )                              |  |   | (29,842          | ) |  |                                | (29,886 | ) |                      |   |        |              |  |   | 22,178  |   |  |   | (3,203  | )
|                                                     |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                                            | 36,942 |   |                                      |   | (2,184 | )                              |  |   | 566              |   |  |                                | (1,618  | ) |                      |   | (7,372  | )            |  |   |        |   |  |   | 27,952  |  
|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           |  | $                                          | 59,967 |   |                                      | $ | 421    |                                |  | $ | 1,913            |   |  | $                              | 2,334   |   |                      | $ | 27,636  |              |  | $ |        |   |  | $ | 89,937  |  
|                                                     |  |                                            |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |         |  



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



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 integrate operations and finance future growth opportunities; (ii) our dependence on and lawsuit
against Sprint; (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. This discussion should be read in conjunction with our
financial statements included in this report and with the financial statements, Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations that are included in the Form 10-K for US Unwired Inc. for
the year ended December 31, 2003, filed on March 2, 2004 with the Securities and Exchange Commission (SEC) and with the financial statements and Managements Discussion and Analysis of Financial Condition and Results of Operations
in the Form 10-K for IWO Holdings, Inc. for the year ended December 31, 2003, filed on March 2, 2004 with the SEC.



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 contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, activation fee revenues and related expense, determination of fair value of separate units for the
application of EITF 00-21, revenue recognition of 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.



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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 auditors engaged by Sprint PCS 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.
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 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.



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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 indefinite lived assets as required by Statements of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. The impairment analysis requires numerous subjective
assumptions and estimates to determine fair value of the respective reporting units as required by SFAS No. 142. Depending on level of sales, our liquidity and other factors, we may be required to recognize impairment charges in the future.



Overview



Through our subsidiaries, Louisiana Unwired LLC (LA Unwired) and IWO Holdings,
Inc. (IWO), we provide wireless personal communication services, commonly referred to as PCS, in all or some portion of Louisiana, Texas, Florida, Arkansas, Mississippi, Georgia, Alabama, Tennessee, Oklahoma, New York, New Hampshire, Vermont
and portions of Massachusetts and Pennsylvania. We are a network partner of Sprint PCS, the personal communications services operations of Sprint Corporation. Sprint PCS, directly and through affiliates 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 our service area which is among the largest in population and subscribers of
all of the Sprint PCS network partners and is contiguous with Sprint PCSs launched markets.



For a discussion of Recent Developments, refer to our Liquidity and Capital Resources section below.



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Results of Operations



PCS Performance Measurements and Metrics (Non-GAAP Terms)



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-month period ended September 30, |         |   | Nine-month period ended September 30, |  
|                                    |  | 2004                                   |         |   | 2003                                  |   |         | 2004 |  |   | 2003    |  
|Subscribers                         |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Gross Additions                     |  |                                        | 83,375  |   |                                       |   | 68,635  |      |  |   | 264,249 |   |  |   | 227,993 |  
|Net Additions                       |  |                                        | 11,508  |   |                                       |   | 2,656   |      |  |   | 66,653  |   |  |   | 37,157  |  
|Total Customers                     |  |                                        | 680,213 |   |                                       |   | 595,724 |      |  |   | 680,213 |   |  |   | 595,724 |  
|Churn, monthly                      |  |                                        | 3.3     | % |                                       |   | 3.5     | %    |  |   | 3.1     | % |  |   | 3.4     | %
|                                    |  |                                        |         |  
|Reseller subscribers                |  |                                        | 139,836 |   |                                       |   | 46,593  |      |  |   | 139,836 |   |  |   | 46,593  |  
|                                    |  |                                        |         |  
|Average Revenue Per User, Monthly   |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Including Roaming                   |  | $                                      | 71.94   |   |                                       | $ | 74.60   |      |  | $ | 71.96   |   |  | $ | 72.99   |  
|Without Roaming                     |  | $                                      | 54.28   |   |                                       | $ | 55.27   |      |  | $ | 54.79   |   |  | $ | 55.12   |  
|                                    |  |                                        |         |  
|Cost Per Gross Addition             |  | $                                      | 306     |   |                                       | $ | 372     |      |  | $ | 322     |   |  | $ | 345     |  
|                                    |  |                                        |         |  
|Average Monthly MOUs Per Subscriber |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Home                                |  |                                        | 704     |   |                                       |   | 580     |      |  |   | 669     |   |  |   | 565     |  
|Roaming Off Our Network             |  |                                        | 219     |   |                                       |   | 188     |      |  |   | 222     |   |  |   | 176     |  
|                                    |  |                                        |         |  
|System MOUs (Millions)              |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Subscriber                          |  |                                        | 1,425   |   |                                       |   | 1,035   |      |  |   | 3,893   |   |  |   | 2,937   |  
|Roaming                             |  |                                        | 666     |   |                                       |   | 481     |      |  |   | 1,851   |   |  |   | 1,259   |  
|                                    |  |                                        |         |  
|Licensed POPs (Millions)            |  |                                        | 17.6    |   |                                       |   | 17.6    |      |  |   | 17.6    |   |  |   | 17.6    |  
|Covered POPs (Millions)             |  |                                        | 12.8    |   |                                       |   | 12.8    |      |  |   | 12.8    |   |  |   | 12.8    |  
|Towers (Owned and Leased)           |  |                                        | 1,924   |   |                                       |   | 1,864   |      |  |   | 1,924   |   |  |   | 1,864   |  



Subscribers



We refer to our customers as subscribers.
Gross additions refer to the total number of new subscribers added during the period. Net Additions 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 and net additions
increased for the three and nine-month periods ended September 30, 2004 as compared to the three and nine-month periods ended September 30, 2003 primarily as a result of our continuing marketing efforts to attract new subscribers and retain existing
subscribers.



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



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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; and, (iii) adding back those
customers that reactivate their service, by our overall average customers for the reporting period; and dividing the result by the number of months in the period. The decrease in churn for the three and nine-month periods ended September 30, 2004 as
compared to the three and nine-month periods ended September 30, 2003 was primarily as a result of the efforts described above.



Subscriber and Roaming Revenue



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.



Roaming revenue consists primarily of Sprint PCS travel revenue and foreign roaming 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.



Effective January 1, 2004, Sprint PCS reduced the reciprocal travel rate to $0.041 per minute
in 2004 from $0.058 per minute in 2003. For the three-month period ended September 30, 2004, the reduction in the travel rate has resulted in a $10.3 million decrease to our revenues, an $8.1 million decrease to our expenses and a reduction to our
cash flow of $2.2 million. For the nine-month period ended September 30, 2004, the reduction in the travel rate has resulted in a $28.2 million decrease to our revenues, a $23.5 million decrease to our expenses and a reduction to our cash flow of
$4.7 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 including roaming for the three and nine-month periods ended September
30, 2004 as compared to the three and nine-month periods ended September 30, 2003 was primarily as a result of a decrease in revenues related to minutes over plan and a decrease in the reciprocal travel rate as discussed above.



The decrease in ARPU excluding roaming for the three and nine-month periods ended September
30, 2004 compared to the three and nine-month periods ended September 30, 2003 was primarily related to a decrease in revenues related to minutes over plan.



Reseller Subscribers



We 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. The number of reseller subscribers increased for the three and nine-month periods ended September 30, 2004 as compared to the
three and nine-month periods ended September 30, 2003 primarily as a result of marketing and sales efforts.



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 sales and
marketing expenses and merchandise cost of sales and reducing the amount by the revenue from merchandise sales. The net amount is divided by the number



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of total new subscriber gross additions for the period. The decrease in CPGA for the three and nine-month periods ended
September 30, 2004 as compared to the three and nine-month periods ended September 30, 2003 was primarily as a result of an overall increase in subscriber gross additions. Merchandise sales, Merchandise cost of sales and Sales and marketing expenses
are further discussed below.



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.



Three-Month Period Ended September 30, 2004 Compared to the Three-Month Period Ended September 30, 2003



Revenues



|                    |  |                                        |         |      |   |        
|------------------- |  | -------------------------------------- | ------- | ---- | - | -------
|                    |  | Three-month period ended September 30,
|                    |  | 2004                                   |         | 2003
|                    |  | (In thousands)                        
|Subscriber revenues |  | $                                      | 109,834 |      | $ | 98,563 
|Roaming revenues    |  |                                        | 35,719  |      |   | 34,466 
|Merchandise sales   |  |                                        | 6,655   |      |   | 5,637  
|Other revenues      |  |                                        | 563     |      |   | 639    
|                    |  |                                        |         |      |   |        
|Total revenues      |  | $                                      | 152,771 |      | $ | 139,305
|                    |  |                                        |         |      |   |        



Subscriber revenues



Total subscriber revenues were $109.8 million
for the three-month period ended September 30, 2004 as compared to $98.6 million for the three-month period ended September 30, 2003, representing an increase of $11.2 million and was primarily as a result of an increase in subscribers as discussed
in Subscribers above.



Roaming revenues



Roaming revenues were $35.7 million for the three-month period ended
September 30, 2004 as compared to $34.5 million for the three-month period ended September 30, 2003, representing an increase of $1.2 million and was primarily as a result of an increase of $9.2 million related to a higher volume of PCS subscribers
traveling through our service area, an increase of $2.0 million related to data travel and an



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increase of $0.3 million related to other network usage including resellers, offset by a decrease of $10.3 million
related to our decrease in the reciprocal roaming rate as discussed in Subscriber and Roaming Revenue above. We continue to add cell sites in locations that we believe will enhance service and increase roaming revenue.



Merchandise sales



Merchandise sales were $6.7 million for the three-month period ended September 30, 2004 as
compared to $5.6 million for the three-month period ended September 30, 2003, representing an increase of $1.1 million. The increase is primarily as a result of an increase in sales to new subscribers and a reduction of our discount for handset
sales to local agents. 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.



Operating Expenses



|                              |  |                                        |         |      |   |        
|----------------------------- |  | -------------------------------------- | ------- | ---- | - | -------
|                              |  | Three-month period ended September 30,
|                              |  | 2004                                   |         | 2003
|                              |  | (In thousands)                        
|Cost of service               |  | $                                      | 81,531  |      | $ | 79,153 
|Merchandise cost of sales     |  |                                        | 12,532  |      |   | 11,751 
|General and administrative    |  |                                        | 8,418   |      |   | 7,031  
|Sales and marketing           |  |                                        | 19,601  |      |   | 19,473 
|Non-cash stock compensation   |  |                                        | 182     |      |   | 210    
|Depreciation and amortization |  |                                        | 21,726  |      |   | 29,924 
|                              |  |                                        |         |      |   |        
|Total operating expenses      |  | $                                      | 143,990 |      | $ | 147,542
|                              |  |                                        |         |      |   |        



Cost
of service



Cost of service was $81.5 million for the three-month period ended
September 30, 2004 as compared to $79.2 million for the three-month period ended September 30, 2003, representing an increase of $2.3 million. Increases primarily related to $0.9 million in network usage, $2.5 million in Sprint PCS related charges
that were primarily volume related, $0.6 million of hurricane related repairs and maintenance in our Florida markets and $0.8 million in lease expense related to a combination of annual rate increases, sale and leaseback arrangements and additional
towers. Decreases primarily related to a $1.6 million reduction in certain independent agent expenses and a $1.0 million reduction in bad debts.



Merchandise cost of sales



Merchandise cost of sales was $12.5 million for the three-month period ended September 30, 2004 as compared to $11.8 million for the three-month period ended September
30, 2003, representing an increase of $0.7 million that was primarily as a result of the increase in sales to new subscribers. 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 $8.4 million for the three-month period ended September 30, 2004 as compared to $7.0 million for the three-month period ended September 30, 2003, representing an increase of $1.4 million that was primarily related to IWO restructuring
expenses.



Sales and marketing expenses



Sales and marketing expenses were comparable at $19.6 million for the
three-month period ended September 30, 2004 and $19.5 million for the three-month period ended September 30, 2003.



Non-cash stock compensation



Non-cash compensation was comparable at $0.2 million for the three-month period ended September 30, 2004 and the three-month period ended September 30, 2003. The non-cash
stock compensation consists of



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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 $21.7 million for the three-month period ended September 30, 2004 as compared to $29.9 million for the three-month period ended
September 30, 2003 representing a decrease of $8.2 million that was primarily related to fully amortizing the IWO subscriber base established as a result of our April 1, 2002 IWO acquisition.



Other Income/(Expense)



|                            |  |                                        |         |   |      |   |         |  
|--------------------------- |  | -------------------------------------- | ------- | - | ---- | - | ------- | -
|                            |  | Three-month period ended September 30, |        
|                            |  | 2004                                   |         |   | 2003 |  
|                            |  | ( In thousands)                        |        
|Interest expense            |  | $                                      | (21,020 | ) |      | $ | (24,030 | )
|Interest income             |  |                                        | 596     |   |      |   | 315     |  
|Loss on sale of assets      |  |                                        | (69     | ) |      |   | (29     | )
|Loss on debt extinguishment |  |                                        | (4,484  | ) |      |   |        |  
|                            |  |                                        |         |   |      |   |         |  
|Total other expense         |  | $                                      | (24,977 | ) |      | $ | (23,744 | )
|                            |  |                                        |         |   |      |   |         |  



Interest expense was $21.0 million for
the three-month period ended September 30, 2004 as compared to $24.0 million for the three-month period ended September 30, 2003, representing a decrease of $3.0 million and is primarily the result of our US Unwired refinancing efforts that resulted
in lower interest rates. Interest rates on our long-term obligations are discussed in detail in Note 6 to the unaudited condensed consolidated financial statements.



Interest income was $0.6 million for the three-month period ended September 30, 2004 as compared to $0.3 million for the three-month period
ended September 30, 2003, representing an increase of $0.3 million and is primarily related to the increase in our cash position.



Loss on debt extinguishment



During the three-month period ended September 30, 2004, we purchased for $51.1 million approximately $48.0 million aggregate face value of our 133/8% senior subordinated discount notes and recorded a $4.5 million loss on extinguishment of debt related to this
transaction.



Nine-month Period Ended September 30, 2004 Compared to the
Nine-month Period Ended September 30, 2003



Revenues



|                    |  |                                      |         |      |   |        
|------------------- |  | ------------------------------------ | ------- | ---- | - | -------
|                    |  | Nine-month period endedSeptember 30,
|                    |  | 2004                                 |         | 2003
|                    |  | (In thousands)                      
|Subscriber revenues |  | $                                    | 318,972 |      | $ | 286,306
|Roaming revenues    |  |                                      | 99,976  |      |   | 92,808 
|Merchandise sales   |  |                                      | 21,925  |      |   | 16,708 
|Other revenues      |  |                                      | 1,401   |      |   | 1,891  
|                    |  |                                      |         |      |   |        
|Total revenues      |  | $                                    | 442,274 |      | $ | 397,713
|                    |  |                                      |         |      |   |        



Subscriber revenues



Total subscriber revenues were $319.0 million
for the nine-month period ended September 30, 2004 as compared to $286.3 million for the nine-month period ended September 30, 2003, representing an increase of $32.7 million and was primarily as a result of an increase in subscribers as discussed
in Subscribers above.



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Roaming revenues



Roaming revenues were $100.0 million for the nine-month period ended September 30, 2004 as compared to $92.8 million for the nine-month
period ended September 30, 2003, representing an increase of $7.2 million and was primarily as a result of an increase of $26.5 million related to a higher volume of PCS subscribers traveling through our service area, an increase of $5.9 million
related to data travel and an increase of $3.0 million related to other network usage including resellers, offset by a decrease of $28.2 million related to our decrease in the reciprocal roaming rate as discussed in Subscriber and Roaming Revenue
above. We continue to add cell sites in locations that we believe will enhance service and increase roaming revenue.



Merchandise sales



Merchandise sales were $21.9 million for the nine-month period ended September 30, 2004 as compared to $16.7 million for the nine-month period ended September 30, 2003,
representing an increase of $5.2 million. The increase is primarily as a result of an increase in sales to new subscribers, a reduction of our discount for handset sales to local agents and our July 1, 2003 adoption of EITF 00-21 as discussed in
Note 1 to the unaudited condensed consolidated financial statements. 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.



Operating Expenses



|                              |  |                                       |         |      |   |        
|----------------------------- |  | ------------------------------------- | ------- | ---- | - | -------
|                              |  | Nine-month period ended September 30,
|                              |  | 2004                                  |         | 2003
|                              |  | (In thousands)                       
|Cost of service               |  | $                                     | 228,638 |      | $ | 232,479
|Merchandise cost of sales     |  |                                       | 41,878  |      |   | 29,590 
|General and administrative    |  |                                       | 24,065  |      |   | 26,729 
|Sales and marketing           |  |                                       | 64,984  |      |   | 65,959 
|Non-cash stock compensation   |  |                                       | 271     |      |   | 2,182  
|Depreciation and amortization |  |                                       | 72,357  |      |   | 89,066 
|IWO asset abandonment charge  |  |                                       |        |      |   | 12,403 
|                              |  |                                       |         |      |   |        
|Total operating expenses      |  | $                                     | 432,193 |      | $ | 458,408
|                              |  |                                       |         |      |   |        



Cost
of service



Cost of service was $228.6 million for the nine-month period ended
September 30, 2004 as compared to $232.5 million for the nine-month period ended September 30, 2003, representing a decrease of $3.9 million. Decreases primarily related to a $5.5 million reduction in bad debt expense that included a $1.3 million
Sprint PCS settlement related to accounts previously written off and a $2.2 million reduction in Sprint PCS service bureau fees and other charges that included a $6.1 million downward adjustment of previously billed Sprint PCS service bureau fees.
This was offset by a $3.8 million increase in travel expense and a $1.9 million increase in lease expense related to a combination of annual rate increases, sale and leaseback arrangements and additional towers.



Merchandise cost of sales



Merchandise cost of sales was $41.9 million for the nine-month period ended September 30,
2004 as compared to $29.6 million for the nine-month period ended September 30, 2003, representing an increase of $12.3 million that was primarily as a result of the increase in sales to new subscribers, a marketing effort targeted at subscriber
retention and our adoption of EITF 00-21 as discussed 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.



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General and administrative expenses



General and administrative expenses were $24.1 million for the nine-month period ended
September 30, 2004 as compared to $26.7 million for the nine-month period ended September 30, 2003, representing a decrease of $2.6 million. The decrease was primarily as a result of a one time charge in the nine-month period ended September 30,
2003 of $3.9 million for professional fees related to an unsuccessful debt exchange that was partially offset by increases in IWO restructuring charges in the nine-month period ended September 30, 2004.



Sales and marketing expenses



Sales and marketing expenses were $65.0 million for the nine-month period ended September
30, 2004 as compared to $66.0 million for the nine-month period ended September 30, 2003, representing a decrease of $1.0 million that was primarily as a result of a decrease in advertising of $4.7 million and a decrease in wages, taxes and benefits
of $2.8 million related to store closings and other initiatives that was offset by an increase in independent agent expenses related to new customer additions of $6.1 million and an increase of $0.4 million in credit checks.



Non-cash stock compensation



Non-cash compensation was $0.3 million for the nine-month period ended September 30, 2004 as
compared to $2.2 million for the nine-month period ended September 30, 2003, representing a decrease of approximately $1.9 million. 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 $72.4 million for the nine-month period ended September 30, 2004 as compared to $89.1 million for the nine-month period ended
September 30, 2003 representing a decrease of $16.7 million that is primarily related to fully amortizing the IWO subscriber base established as a result of our April 1, 2002 IWO acquisition.



Asset abandonment charge



During the nine-month period ended September 30, 2003, we recorded a $12.4 million write off
of IWO construction in progress and related lease expense due to abandoned cell site construction at IWO.



Other Income/(Expense)



|                            |  |                                       |          |   |      |   |         |  
|--------------------------- |  | ------------------------------------- | -------- | - | ---- | - | ------- | -
|                            |  | Nine-month period ended September 30, |         
|                            |  | 2004                                  |          |   | 2003 |  
|                            |  | ( In thousands)                       |         
|Interest expense            |  | $                                     | (69,265  | ) |      | $ | (66,992 | )
|Interest income             |  |                                       | 1,321    |   |      |   | 1,338   |  
|Loss on sale of assets      |  |                                       | (724     | ) |      |   | (21     | )
|Loss on debt extinguishment |  |                                       | (58,977  | ) |      |   |        |  
|                            |  |                                       |          |   |      |   |         |  
|Total other expense         |  | $                                     | (127,645 | ) |      | $ | (65,675 | )
|                            |  |                                       |          |   |      |   |         |  



Interest expense was $69.3 million for
the nine-month period ended September 30, 2004 as compared to $67.0 million for the nine-month period ended September 30, 2003, representing an increase of $2.3 million and is primarily the result of interest expense related to our IWO senior
secured credit facility that was partially offset by a decrease in interest expense related to our 2010 and 2012 Notes. All loans under the IWO senior secured credit facility, effective with the date of the default as discussed in Note 6 to the
unaudited condensed consolidated financial statements, bear interest at a rate of 4.25-4.75 percent above the agent banks prime rate.



Interest income was comparable at $1.3 million for the nine-month period ended September 30, 2004 and the nine-month period ended September 30, 2003.



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During the nine-month period ended September 30, 2004, we sold various non-core assets including PCS licenses, towers, a
minority interest in an unconsolidated affiliate and vehicles for approximately $21.2 million and recognized a $0.7 million loss on these transactions in the current period and a deferred gain of $2.3 million.



Loss on debt extinguishment



During the nine-month period ended September 30, 2004, we completed a new debt offering that
consisted of $360.0 million of new senior secured notes. We used a portion of the proceeds to retire our senior secured credit facility and a portion of our existing notes. Additionally, we exchanged a portion of our existing notes for shares of our
common stock. This resulted in a loss of $59.0 million. The transactions are detailed in Note 4 to the unaudited condensed consolidated financial statements.



Discontinued operations



Our discontinued operations reflect the operating results of our cellular properties. In February 2004, we consummated the sale of our cellular operations, which included
certain cellular towers, for $22.1 million and recognized a gain of $16.1 million that has been recorded as a gain on the disposal of discontinued operations.



Liquidity and Capital Resources



US Unwired and IWO have separate debt instruments. Under the terms of these debt instruments, funds available under the US Unwired debt instruments 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 Liquidity



As of September 30, 2004, US Unwired had $126.3 million in cash and cash equivalents and $405.6 million in indebtedness.



During May and June 2004, we executed a series of transactions to refinance US Unwireds
debt that included:



| |  | issuing $360 million of US Unwired senior secured notes (as further described in Note 6 to the unaudited consolidated financial statements)
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| |  | purchasing for $247.4 million approximately $235.8 million aggregate face value of US Unwired 133/8% senior subordinated discount notes;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| |  | issuing approximately 34.5 million shares of US Unwired common stock in exchange for approximately $75.0 million aggregate face value of US Unwired 133/8% senior subordinated discount notes;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | paying in full its $55.4 million outstanding balance and terminating the US Unwired senior credit facility; and
| | - | ---------------------------------------------------------------------------------------------------------------



| |  | the retiring debt of approximately $3.7 million related to a promissory note and vendor financing.
| | - | --------------------------------------------------------------------------------------------------



On August 30, 2004, we purchased for $51.1 million approximately $48.0 million aggregate face value of US Unwired 133/8% senior subordinated discount notes. We recorded a $4.5 million loss on extinguishment of US Unwired debt related
to this transaction.



On November 1, 2004, we retired our remaining
outstanding US Unwired 133/8% senior subordinated discount notes by purchasing $41.1 million aggregate face
value for $43.9 million.



For 2004, we issued guidance that we intend to
expend between $27 million and $33 million for US Unwired capital expenditures in 2004. As of September 30, 2004, we had spent approximately $16.6 million for US Unwired capital expenditures.



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We periodically review all charges from Sprint PCS and from time to time, may dispute certain of these charges. As of
September 30, 2004, we had disputed approximately $28.2 million of charges to US Unwired. Based upon the information provided to us by Sprint PCS to date, we believe the accompanying condensed consolidated balance sheet adequately reflects our
obligation that may be due to Sprint PCS for these charges. However, should these disputes be settled in a manner unsatisfactory to us, US Unwireds cash flow would be adversely impacted to the extent of the unfavorable settlement.



Based on operating forecasts, we believe that US Unwired will have sufficient cash to fund
its operations, debt service and capital requirements over the next twelve months. However, US Unwireds liquidity 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 the Managements Discussion and Analysis
section of this filing.



IWO Liquidity



As of September 30, 2004, IWO had $41.0 million in cash and indebtedness that consisted of
$215.0 million related to the IWO senior secured credit facility and $139.8 million related to the IWO senior notes for a total of $354.8 million. A portion of the original proceeds of the IWO senior notes offering was set aside as restricted cash
and used to make the first six scheduled interest payments on the IWO senior notes through January 2004.



As of September 30, 2004, IWO was in default of the IWO senior bank credit facility. Since March 2004, IWO has failed to make $8.8 million in principal payments due on the IWO senior secured credit facility and is not
in compliance with its restrictive covenants under the IWO senior secured credit facility. In September 2004, one of the holders of the IWO senior secured credit facility elected to fund IWO $1.8 million, which represents that holders
remaining obligation of a draw request made in 2002. The holders of the IWO senior secured credit facility have denied IWO access to the remaining $23.4 million in availability.



Additionally, IWO failed to make a scheduled semi-annual interest payment on the IWO senior notes due July 15, 2004 and the holders of the
senior notes can place IWO in default of its senior notes. However, on July 22, 2004, IWO entered into an agreement with an ad hoc committee of note holders owning approximately 68% of the IWO senior notes pursuant to which such holders agreed to,
under certain circumstances, not take any action to enforce their rights including accelerating the principal amount of the IWO senior notes.



As a result, we have classified all outstanding indebtedness of both the IWO senior secured credit facility and the IWO senior notes as a current liability.



We have been unable to develop a business plan for IWO that provides sufficient cash to
fund operations, debt service and capital requirements in 2004. We have been in discussions with the IWO creditors to arrive at a consensual restructuring to preserve liquidity but have been unable to arrive at an acceptable plan. We have retained a
Chief Restructuring Officer (CRO) to guide IWOs restructuring efforts and, where appropriate, to manage IWO in the planning, process and emergence from reorganization through a Chapter 11 case. IWO anticipates seeking protection
under Chapter 11 in 2004.



Effective April 2004, IWO and US Unwired formalized
its existing management arrangement with the execution of a management agreement engaging US Unwired to oversee, manage and supervise the development and operation of IWO. The 2004 monthly fee is comparable to monthly amounts previously billed and
collected by US Unwired under the previous arrangement and allows for certain bonuses for the achievement of above targeted operating results. The agreement also includes a monthly restructuring fee and a bonus for a successful restructuring, an
early termination fee if the agreement is terminated prior to December 31, 2005 and a deferred fee should the agreement not be extended beyond December 31, 2005.



We periodically review all charges from Sprint PCS and from time to time, may dispute certain of these charges. As of September 30, 2004, we
had disputed approximately $15.2 million of charges to IWO.Based upon the information provided to us by Sprint PCS to date, we believe the accompanying condensed consolidated balance sheet adequately reflects our obligation that may be due
to Sprint PCS for these charges. However, should these disputes be settled in a manner unsatisfactory to us, IWOs cash flow would be adversely impacted to the extent of the unfavorable settlement.



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As a result of liquidity challenges, IWO has made the decision to reduce capital expenditures for network expansion.
Included in this reduction are cell sites that IWO is required to construct to meet the build out requirements under IWOs management agreement with Sprint. Failure to complete the build out of the IWO service area will place IWO in violation
of the IWO Sprint 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 September 30, 2004, IWOs construction in progress included
$5.6 million primarily related to cell sites that IWO plans to complete and management estimates that completion of these cell sites will require approximately $7.2 million in additional costs to complete construction and place these sites in
operation. IWO anticipates that only a portion of these sites will be completed in 2004.



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 secured 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 secured 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 senior secured credit facility and its liquidity as
discussed above, there is substantial doubt about IWOs ability to continue as a going concern.



Cash Flows



Net cash provided by operating activities during the nine-month period ended September 30, 2004 was $61.7 million. Net cash provided by investing activities during the
nine-month period ended September 30, 2004 was $39.0 million and included $19.3 million in proceeds from the release of restricted cash that was set aside for the IWO senior note interest payment in January 2004 and interest and fees due on the IWO
senior bank credit facility, $43.3 million in proceeds from the sale of assets and $500,000 in distributions from unconsolidated affiliates, offset by $24.0 million for capital expenditures. Cash used in financing activities during the nine-month
period ended September 30, 2004 was $30.6 million and included $360.2 million in proceeds from the issuance of new notes that was offset by $378.6 million in repayment of existing debt and $12.5 million in debt issuance costs.



Seasonality



Like the wireless communications industry in general, there is an increase in subscriber
additions in the fourth quarter due to the holiday season. A greater number of phones sold at holiday promotional prices causes our losses on merchandise sales to increase. Our sales and marketing expenses also increase with holiday promotional
activities. We generally have the weakest demand for new wireless services during the summer. We expect these trends to continue based on historical operating results.



Item 3. Quantitative and Qualitative Disclosures about Market Risk



We do not engage in derivatives or other financial instruments for trading, speculative or hedging purposes, though we may do so from time to time if such instruments are available to us on acceptable terms and
prevailing market conditions are accommodating. We have been subject to some interest rate risk on our senior secured borrowings and could be subject to interest rate risk on any future floating rate financing.



Our primary interest rate risk exposures relate to (i) the interest rate on long-term
borrowings; (ii) our ability to refinance our debt at maturity at market rates; and (iii) the impact of interest rate movements on our ability to meet interest expense requirements and financial covenants under our debt instruments.



Our fixed rate debt consists of the accreted carrying value of the US Unwired Inc. 133/8% subordinated discount notes due November 1, 2009 ($40.7 million at September 30, 2004 and fully retired as of
November 1, 2004), the accreted carrying value of the IWO 14% Senior Notes due January 15, 2011 ($139.8 million at September 30, 2004) and the US Unwired $235 million aggregate principal amount 10% Second Priority Senior Secured Notes due June 15,
2012 (issued on June 15, 2004).



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Our variable rate debt consists of borrowings made under the US Unwired $125 million aggregate principal amount First
Priority Senior Secured Floating Rate Notes (2010 Notes) due June 15, 2010 (issued June 15, 2004) and the IWO senior secured credit facility ($215.0 million at September 30, 2004). The US Unwired 2010 Notes bear interest at a floating
rate equal to the London Interbank Offered Rate (LIBOR) plus 4.25% per year. LIBOR is assumed to equal 1.88%. The IWO senior secured credit facility, which is in default as of September 30, 2004, bears interest at a default rate of
4.25-4.75 percent above the agent banks prime rate. For the three months ended September 30, 2004, the weighted average interest rate under US Unwired 2010 Notes was 5.8% and under the IWO senior secured credit facility was 7.2%.



A one percent increase (decrease) in the variable interest rate would result in a $3.5
million increase (decrease) in the related interest expense on an average annual basis based upon borrowings outstanding at September 30, 2004.



The amounts discussed above for the IWO Senior Notes and the IWO senior secured credit facility are classified as current in the accompanying condensed balance sheets as
a result of the events of default as discussed in the Liquidity and Capital Resources section of our Managements Discussion and Analysis of Financial Condition and Results of Operations.



Item 4. Controls and Procedures



As of September 30,
2004, an evaluation was performed under the supervision and with the participation of the Companys management, including the CEO and CFO, of the effectiveness of the design and operation of the Companys disclosure controls and
procedures. Based on that evaluation, the Companys management, including the CEO and CFO, concluded that the Companys disclosure controls and procedures were effective as of September 30, 2004. There have been no changes in the
Companys internal control over financial reporting during the fiscal quarter ended September 30, 2004 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



PART II Other Information



Item 1. Legal Proceedings



On July 11, 2003, US
Unwired and two of its subsidiaries, Louisiana Unwired LLC and Texas Unwired (US Unwired), filed suit in federal court in Louisiana against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom, Inc. (collectively,
Sprint) and on September 25, 2003, US Unwired filed an amended complaint. The suit alleges violations of the Racketeer Influenced and Corrupt Organizations Act, breach of fiduciary duty, breach of contract, 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 or fiscal agent over property and assets controlled by Sprint. IWO is not a plaintiff in the
original or the amended suit. On February 5, 2004, the U.S. District Court denied in all respects Sprints previously-filed motion for judgment on the pleadings, stated that it was amenable to allowing US Unwired to hire an outside accounting
company or other expert to monitor monies received by Sprint, and agreed with the US Unwired position that certain claims are subject to trial by jury in Louisiana. On March 8, 2004, US Unwired filed its Second Amended Complaint against Sprint to
include certain additional factual allegations related to its claims, as requested by the Courts February 5 Order. On April 8, 2004, Sprint filed its Answer, Defenses, and Counterclaim to US Unwireds Second Amended Complaint, which
included a claim that US Unwired owed Sprint approximately $16.3 million related to contractual disputes between the parties. IWO is not a defendant in this suit. On March 25, 2004, US Unwired filed an application to appoint an outside accounting
company or other expert to contemporaneously monitor monies paid to Sprint from US Unwired customers. Sprint filed an objection to the US Unwired application. On June 14, 2004, the District Court granted US Unwireds motion to appoint an
outside accounting company or other expert to the extent that the court announced its intention to appoint a special master for the limited purpose of determining if accounting procedures are being performed accurately and in compliance with the
terms of US Unwireds agreements with Sprint. On August 27, 2004, the District Court appointed Robert S. Cohen, CPA, of Crowe Chizek & Company, LLP as the special master to consider and make findings upon issues that arise out of the
accuracy of the accounting for revenues Sprint



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##### Table of Contents

PCS passes on to US Unwired and the fees Sprint PCS charges US Unwired. The special master will report proposed findings
of fact to the court as findings of fact. On September 30, 2004, the court entered an order setting a schedule to complete the discovery process during 2004 and the court has set a jury trial date for May 9, 2005. The Company does not believe that a
negative outcome on Sprints counterclaim will have a material adverse effect on the Company.



Item 2. Changes in Securities



From May 26, 2004 to
June 4, 2004, US Unwired exchanged 34.5 million shares of its common stock for $75.0 million face amount of its US Unwired 133/8% senior subordinated discount notes. Exemption for such transaction is claimed pursuant to Section 3(a)(9) of the Securities Act of 1933.



Item 3. Defaults Upon Senior Securities



Since March
2004, Independent Wireless One Corporation, a wholly owned subsidiary of IWO, has failed to make $8.8 million principal payments on its amended and restated secured credit facility (the IWO senior secured 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 and was not in compliance with its restrictive covenants. As a result of the failure to make scheduled principal
payments and the covenant violations, the Company was in default of the IWO senior secured credit facility at September 30, 2004.



On July 15, 2004, IWO failed to make a scheduled interest payment of $11.2 million on the IWO senior notes and the holders of the IWO senior notes may declare IWO to be
in default. On September 22, 2004, IWO entered into an agreement with an ad hoc committee of IWO note holders owning approximately 68% of the IWO senior notes pursuant to which such holders agreed to, under certain circumstances, not take any action
to enforce their rights including accelerating the principal amount of the IWO senior notes resulting from IWOs failure to make the interest payment of $11.2 million due on the senior notes on July 15, 2004.



Item 5. Other Information



Due to the separate debt
structures of US Unwired and IWO, we are presenting financial and operational information for US Unwired excluding the operations of IWO. The tables below set forth certain condensed financial information that has been derived from our unaudited
condensed consolidated financial statements presented elsewhere in this filing. We have not consolidated the operations of IWO, but rather have included it substantially on the equity method of accounting. We have included in Investments In and
Advances To Unconsolidated Affiliates IWOs losses that exceed our investment in the operations of IWO and we have recorded as other revenue management fees that we derive from IWO. We have presented the information because we believe it is
more meaningful to investors in the US Unwired notes, who will have no claim against the assets or business of IWO and are not likely to derive any value from our ownership of IWOs common stock. The condensed financial statements that exclude
the operations of IWO should be read in conjunction with the unaudited condensed consolidated financial statements, related notes and other financial information included in this filing.



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Condensed consolidated balance sheet of US Unwired, excluding the operations of IWO



|                                                         |  |                    |          |   |                   |   |          |  
|-------------------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | -------- | -
|                                                         |  | September 30, 2004 |          |   | December 31, 2003 |  
|                                                         |  | (Unaudited)        |         
|                                                         |  | (In thousands)     |         
|Assets                                                   |  |                    |          |   |                   |   |          |  
|Current assets:                                          |  |                    |          |   |                   |   |          |  
|Cash and cash equivalents                                |  | $                  | 126,343  |   |                   | $ | 64,856   |  
|Subscriber receivables, net                              |  |                    | 23,506   |   |                   |   | 18,749   |  
|Other receivables                                        |  |                    | 1,514    |   |                   |   | 2,477    |  
|Inventory                                                |  |                    | 3,055    |   |                   |   | 3,996    |  
|Prepaid expenses and other assets                        |  |                    | 9,962    |   |                   |   | 9,114    |  
|Receivables from related parties                         |  |                    | 1,809    |   |                   |   | 686      |  
|Receivables from officers                                |  |                    | 116      |   |                   |   | 85       |  
|Current assets related to discontinued operations        |  |                    | 63       |   |                   |   | 1,049    |  
|                                                         |  |                    |          |   |                   |   |          |  
|Total current assets                                     |  |                    | 166,368  |   |                   |   | 101,012  |  
|                                                         |  |                   
|Property and equipment, net                              |  |                    | 214,421  |   |                   |   | 245,615  |  
|Goodwill and other intangibles, net                      |  |                    | 60,010   |   |                   |   | 61,848   |  
|Notes receivable from unconsolidated affiliates          |  |                    | 1,944    |   |                   |   | 1,887    |  
|Other assets                                             |  |                    | 20,337   |   |                   |   | 26,031   |  
|Non-current assets related to discontinued operations    |  |                    |         |   |                   |   | 4,770    |  
|                                                         |  |                    |          |   |                   |   |          |  
|Total assets                                             |  | $                  | 463,080  |   |                   | $ | 441,163  |  
|                                                         |  |                    |          |   |                   |   |          |  
|                                                         |  |                   
|Liabilities and stockholders deficit                    |  |                    |          |   |                   |   |          |  
|Current liabilities:                                     |  |                    |          |   |                   |   |          |  
|Accounts payable                                         |  | $                  | 37,507   |   |                   | $ | 24,298   |  
|Accrued expenses                                         |  |                    | 55,214   |   |                   |   | 38,886   |  
|Current maturities of long term obligations              |  |                    | 484      |   |                   |   | 11,145   |  
|Current liabilities related to discontinued operations   |  |                    | 647      |   |                   |   | 49       |  
|                                                         |  |                    |          |   |                   |   |          |  
|Total current liabilities                                |  |                    | 93,852   |   |                   |   | 74,378   |  
|                                                         |  |                   
|Long term obligations, net of current maturities         |  |                    | 405,163  |   |                   |   | 434,745  |  
|Deferred gain                                            |  |                    | 28,265   |   |                   |   | 29,836   |  
|Investments in and advances to unconsolidated affiliates |  |                    | 169,650  |   |                   |   | 132,016  |  
|                                                         |  |                   
|Stockholders deficit:                                   |  |                    |          |   |                   |   |          |  
|Common stock                                             |  |                    | 1,636    |   |                   |   | 1,288    |  
|Additional paid in capital                               |  |                    | 751,242  |   |                   |   | 654,705  |  
|Retained deficit                                         |  |                    | (986,718 | ) |                   |   | (885,795 | )
|Treasury stock                                           |  |                    | (10      | ) |                   |   | (10      | )
|                                                         |  |                    |          |   |                   |   |          |  
|Total stockholders deficit                              |  |                    | (233,850 | ) |                   |   | (229,812 | )
|                                                         |  |                    |          |   |                   |   |          |  
|Total liabilities and stockholders deficit              |  | $                  | 463,080  |   |                   | $ | 441,163  |  
|                                                         |  |                    |          |   |                   |   |          |  



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Condensed consolidated statement of operations of US Unwired, excluding the operations of IWO



|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|------------------------------------------------------------------------------------ |  | ---------------------------------------- | ------- | - | --------------------------------------- | - | ------- | ---- |  | - | -------- | - |  | - | -------- | -
|                                                                                     |  | For the three months ended September 30, |         |   | For the nine months ended September 30, |  
|                                                                                     |  | 2004                                     |         |   | 2003                                    |   |         | 2004 |  |   | 2003     |  
|                                                                                     |  | (Unaudited)                              |        
|                                                                                     |  | (In thousands)                           |        
|Revenue:                                                                             |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Subscriber                                                                           |  | $                                        | 73,556  |   |                                         | $ | 64,521  |      |  | $ | 214,576  |   |  | $ | 189,521  |  
|Roaming                                                                              |  |                                          | 25,056  |   |                                         |   | 24,351  |      |  |   | 71,842   |   |  |   | 67,594   |  
|Merchandise sales                                                                    |  |                                          | 4,335   |   |                                         |   | 3,887   |      |  |   | 15,151   |   |  |   | 11,729   |  
|Other revenue                                                                        |  |                                          | 3,017   |   |                                         |   | 2,491   |      |  |   | 8,049    |   |  |   | 7,893    |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Total revenue                                                                        |  |                                          | 105,964 |   |                                         |   | 95,250  |      |  |   | 309,618  |   |  |   | 276,737  |  
|Expense:                                                                             |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Cost of service                                                                      |  |                                          | 56,257  |   |                                         |   | 53,440  |      |  |   | 156,829  |   |  |   | 155,928  |  
|Merchandise cost of sales                                                            |  |                                          | 8,349   |   |                                         |   | 8,467   |      |  |   | 28,771   |   |  |   | 21,431   |  
|General and administrative                                                           |  |                                          | 6,353   |   |                                         |   | 6,120   |      |  |   | 18,800   |   |  |   | 22,419   |  
|Sales and marketing                                                                  |  |                                          | 12,364  |   |                                         |   | 12,314  |      |  |   | 42,881   |   |  |   | 43,660   |  
|Non-cash stock compensation                                                          |  |                                          | 182     |   |                                         |   | 210     |      |  |   | 271      |   |  |   | 2,182    |  
|Depreciation and amortization                                                        |  |                                          | 14,707  |   |                                         |   | 16,138  |      |  |   | 44,499   |   |  |   | 48,315   |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Total operating expense                                                              |  |                                          | 98,212  |   |                                         |   | 96,689  |      |  |   | 292,051  |   |  |   | 293,935  |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Operating income (loss)                                                              |  |                                          | 7,752   |   |                                         |   | (1,439  | )    |  |   | 17,567   |   |  |   | (17,198  | )
|Other income (expense):                                                              |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Interest expense                                                                     |  |                                          | (10,198 | ) |                                         |   | (12,926 | )    |  |   | (39,266  | ) |  |   | (36,994  | )
|Gain (loss) on sale of assets                                                        |  |                                          | (10     | ) |                                         |   | 2       |      |  |   | (640     | ) |  |   | 10       |  
|Loss on debt extinguishment                                                          |  |                                          | (4,484  | ) |                                         |   |        |      |  |   | (58,977  | ) |  |   |         |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Total other expense                                                                  |  |                                          | (14,692 | ) |                                         |   | (12,924 | )    |  |   | (98,883  | ) |  |   | (36,984  | )
|                                                                                     |  |                                          |         |  
|Loss from continuing operations before equity in losses of unconsolidated affiliates |  |                                          | (6,940  | ) |                                         |   | (14,363 | )    |  |   | (81,316  | ) |  |   | (54,182  | )
|Equity in losses of unconsolidated affiliates                                        |  |                                          | (9,286  | ) |                                         |   | (17,561 | )    |  |   | (36,024  | ) |  |   | (71,997  | )
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Loss from continuing operations                                                      |  |                                          | (16,226 | ) |                                         |   | (31,924 | )    |  |   | (117,340 | ) |  |   | (126,179 | )
|                                                                                     |  |                                          |         |  
|Discontinued operations:                                                             |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Gain (loss) on disposal of discontinued operations                                   |  |                                          |        |   |                                         |   |        |      |  |   | 16,131   |   |  |   |         |  
|Income (loss) from discontinued operations                                           |  |                                          |        |   |                                         |   | 617     |      |  |   | 284      |   |  |   | 2,380    |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|                                                                                     |  |                                          |        |   |                                         |   | 617     |      |  |   | 16,415   |   |  |   | 2,380    |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Net loss                                                                             |  | $                                        | (16,226 | ) |                                         | $ | (31,307 | )    |  | $ | (100,925 | ) |  | $ | (123,799 | )
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Basic and diluted loss per share                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Continuing operations                                                                |  | $                                        | (0.10   | ) |                                         | $ | (0.25   | )    |  | $ | (0.81    | ) |  | $ | (0.98    | )
|Discontinued operations                                                              |  |                                          |        |   |                                         |   |        |      |  |   | 0.11     |   |  |   | 0.02     |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|                                                                                     |  | $                                        | (0.10   | ) |                                         | $ | (0.25   | )    |  | $ | (0.70    | ) |  | $ | (0.96    | )
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  
|Weighted average outstanding common shares                                           |  |                                          | 163,528 |   |                                         |   | 128,832 |      |  |   | 144,583  |   |  |   | 128,832  |  
|                                                                                     |  |                                          |         |   |                                         |   |         |      |  |   |          |   |  |   |          |  



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Condensed consolidated statement of cash flows of US Unwired, excluding the operations of IWO



|                                                    |  |                                         |          |   |      |   |         |  
|--------------------------------------------------- |  | --------------------------------------- | -------- | - | ---- | - | ------- | -
|                                                    |  | For the nine months ended September 30, |         
|                                                    |  | 2004                                    |          |   | 2003 |  
|                                                    |  | (Unaudited)                             |         
|                                                    |  | (In thousands)                          |         
|Cash flows from operating activities                |  |                                         |          |   |      |   |         |  
|                                                    |  |                                        
|Net cash provided by operating activities           |  | $                                       | 66,862   |   |      | $ | 53,062  |  
|                                                    |  |                                        
|Cash flows from investing activities                |  |                                         |          |   |      |   |         |  
|                                                    |  |                                        
|Proceeds from sale of assets                        |  |                                         | 43,155   |   |      |   | 350     |  
|Distribution from unconsolidated affiliates         |  |                                         | 500      |   |      |   | 250     |  
|Payments for the purchase of equipment              |  |                                         | (16,625  | ) |      |   | (15,135 | )
|                                                    |  |                                         |          |   |      |   |         |  
|Net cash provided by (used in) investing activities |  |                                         | 27,030   |   |      |   | (14,535 | )
|                                                    |  |                                        
|Cash flows from financing activities                |  |                                         |          |   |      |   |         |  
|                                                    |  |                                        
|Proceeds from long-term debt                        |  |                                         | 358,416  |   |      |   |        |  
|Proceeds from exercised options                     |  |                                         | 307      |   |      |   |        |  
|Principal payments of long-term debt                |  |                                         | (378,620 | ) |      |   | (3,203  | )
|Debt issuance cost                                  |  |                                         | (12,508  | ) |      |   |        |  
|                                                    |  |                                         |          |   |      |   |         |  
|Net cash used in financing activities               |  |                                         | (32,405  | ) |      |   | (3,203  | )
|                                                    |  |                                         |          |   |      |   |         |  
|Net increase in cash and cash equivalents           |  |                                         | 61,487   |   |      |   | 35,324  |  
|                                                    |  |                                        
|Cash and cash equivalents at beginning of period    |  |                                         | 64,856   |   |      |   | 26,977  |  
|                                                    |  |                                         |          |   |      |   |         |  
|Cash and cash equivalents at end of period          |  | $                                       | 126,343  |   |      | $ | 62,301  |  
|                                                    |  |                                         |          |   |      |   |         |  



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##### Table of Contents

PCS Performance Measurements and Metrics (Non-GAAP Terms) of US Unwired, excluding the operations of IWO



|                                    |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------- |  | -------------------------------------- | ------- | - | ------------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                    |  | Three-month period ended September 30, |         |   | Nine-month period ended September 30, |  
|                                    |  | 2004                                   |         |   | 2003                                  |   |         | 2004 |  |   | 2003    |  
|Subscribers                         |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Gross Additions                     |  |                                        | 56,456  |   |                                       |   | 47,262  |      |  |   | 185,563 |   |  |   | 158,577 |  
|Net Additions                       |  |                                        | 6,787   |   |                                       |   | 2,046   |      |  |   | 50,906  |   |  |   | 27,356  |  
|Total Customers                     |  |                                        | 449,455 |   |                                       |   | 384,827 |      |  |   | 449,455 |   |  |   | 384,827 |  
|Churn                               |  |                                        | 3.4     | % |                                       |   | 3.7     | %    |  |   | 3.2     | % |  |   | 3.7     | %
|                                    |  |                                        |         |  
|Reseller subscribers                |  |                                        | 68,643  |   |                                       |   | 22,268  |      |  |   | 68,643  |   |  |   | 22,268  |  
|                                    |  |                                        |         |  
|Average Revenue Per User, Monthly   |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Including Roaming                   |  | $                                      | 73.69   |   |                                       | $ | 77.19   |      |  | $ | 75.06   |   |  | $ | 76.97   |  
|Without Roaming                     |  | $                                      | 54.97   |   |                                       | $ | 56.04   |      |  | $ | 56.23   |   |  | $ | 56.74   |  
|                                    |  |                                        |         |  
|Cost Per Gross Addition             |  | $                                      | 288     |   |                                       | $ | 352     |      |  | $ | 303     |   |  | $ | 330     |  
|                                    |  |                                        |         |  
|Average Monthly MOUs Per Subscriber |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Home                                |  |                                        | 763     |   |                                       |   | 633     |      |  |   | 730     |   |  |   | 617     |  
|Roaming Off Our Network             |  |                                        | 241     |   |                                       |   | 206     |      |  |   | 245     |   |  |   | 193     |  
|                                    |  |                                        |         |  
|System MOUs (Millions)              |  |                                        |         |   |                                       |   |         |      |  |   |         |   |  |   |         |  
|Subscriber                          |  |                                        | 1,021   |   |                                       |   | 729     |      |  |   | 2,787   |   |  |   | 2,063   |  
|Roaming                             |  |                                        | 463     |   |                                       |   | 336     |      |  |   | 1,324   |   |  |   | 909     |  
|                                    |  |                                        |         |  
|Licensed POPs (Millions)            |  |                                        | 11.3    |   |                                       |   | 11.3    |      |  |   | 11.3    |   |  |   | 11.3    |  
|Covered POPs (Millions)             |  |                                        | 8.1     |   |                                       |   | 8.1     |      |  |   | 8.1     |   |  |   | 8.1     |  
|Towers (Owned and Leased)           |  |                                        | 1,214   |   |                                       |   | 1,193   |      |  |   | 1,214   |   |  |   | 1,193   |  



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Item 6. Exhibits and Reports on Form 8-K



| | a. | Exhibits
| | -- | --------



The following exhibits are filed as part of this report:



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | Third Restated Articles of Incorporation of US Unwired Inc. (Incorporated by reference to Exhibit 3.1 to the Form 10-Q filed by US Unwired Inc. on May 9, 2002)                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | 
|3.2 |  | By-Laws of US Unwired Inc. as amended on April 29, 2003. (Incorporated by reference to Exhibit 3(ii) to the Form 10-Q filed by US Unwired Inc. on November 13, 2003)                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | 
|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 Exhibit 4.1 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 Exhibit 4.2 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 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 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) to the Form 10-Q filed by US Unwired Inc. on August 14, 2002)                                                                                                                                                                                     
|    | 
|4.4 |  | Supplemental Indenture, dated as of May 25, 2004, among US Unwired Inc., the Guarantors (as defined in the Indenture referred to therein) and U.S. Bank National Association as Trustee under
the Indenture referred to therein. (Incorporated by reference to Exhibit 99.2 to the Form 8-K filed by US Unwired Inc. on May 28, 2004)                                                                                                                                                                                                                                                          
|    | 
|4.5 |  | Registration Rights Agreement, dated as of September 16, 2004, by and among US Unwired Inc., Georgia PCS Leasing, LLC, Georgia PCS Management, L.L.C., Louisiana Unwired, LLC, Unwired Telecom
Corp., Texas Unwired, Lehman Brothers Inc., Banc of America Securities LLC, and Bear, Stearns & Co. Inc. (Incorporated by reference to Exhibit 4.19 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC,
Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)
|    | 
|4.6 |  | Indenture, dated as of September 16, 2004, between US Unwired Inc., the Guarantors listed therein and U.S. Bank National Association, as trustee for the 10% Second Priority Senior Secured
Notes due 2012. (Incorporated by reference to Exhibit 4.20 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC
on July 9, 2004, Registration No. 333-117284)                                                                                            
|    | 
|4.7 |  | Indenture, dated as of September 16, 2004, between US Unwired Inc., the Guarantors listed therein and U.S. Bank National Association, as trustee for the First Priority Senior Secured Floating
Rate Notes due 2010. (Incorporated by reference to Exhibit 4.21 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS
Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                   



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|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.8     |  | Intercreditor Agreement, dated as of September 16, 2004, between U.S. Bank National Association, as trustee for the 2010 Noteholders referred to therein, U.S. Bank National Association, as
trustee for the 2012 Noteholders referred to therein, U.S. Bank National Association, as collateral agent pursuant to the 2010 Indenture and the 2012 Indenture referred to therein, US Unwired Inc., the Subsidiary Guarantors referred to therein, the
Loan Parties referred to therein, and the Secured Parties and Secured Party Representatives referred to therein. (Incorporated by reference to Exhibit 4.22 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC,
Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)
|        | 
|4.9     |  | Security Agreement, dated as of September 16, 2004, between US Unwired Inc., the Subsidiary Guarantors referred to therein, and U.S. Bank National Association, as collateral agent for the
Secured Parties referred to therein. (Incorporated by reference to Exhibit 4.23 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and
Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                                                                                                                                                                                                                                                                      
|        | 
|4.10    |  | Intellectual Property Security Agreement, dated as of September 16, 2004, between US Unwired Inc., the Subsidiary Guarantors referred to therein, and U.S. Bank National Association, as
collateral agent for the Secured Parties referred to therein. (Incorporated by reference to Exhibit 4.24 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS
Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                                                                                                                                                                                                                                                
|        | 
|4.11    |  | Purchase Agreement, dated September 10, 2004, by and among US Unwired Inc., Georgia PCS Leasing, LLC, Georgia PCS Management, L.L.C., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas
Unwired, Lehman Brothers Inc., Banc of America Securities LLC, and Bear, Sterns & Co. Inc. (Incorporated by reference to Exhibit 4.25 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom
Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                                                                                                                                                                                                                 
|        | 
|4.12    |  | Multiple Indebtedness Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing by US Unwired Inc. in favor of U.S. Bank National Association, in its capacity as
collateral agent, dated September 15, 2004. (Incorporated by reference to Exhibit 4.26 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C.,
and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                                                                                                                                                                                                                                                                   
|        | 
|4.13    |  | Forbearance agreement dated September 22, 2004 between IWO and certain beneficial owners of the IWO 14% Senior Notes due 2011. (Incorporated by reference to Exhibit 4.1.3 to the Form 10-Q
filed by US Unwired Inc. on July 28, 2004)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 
|4.13(a) |  | Amendment No. 1 to the Forbearance agreement dated September 22, 2004 between IWO and certain beneficial owners of the IWO 14% Senior Notes due 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|4.14    |  | Possessory Security Agreement dated July 14, 2004 by US Unwired Inc. in favor of Whitney National Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 
|10.1    |  | Cameron Communications Service Agreement dated September 10, 1999, between Cameron Communications Corporation and US Unwired Inc. (Incorporated by reference to Exhibit 10.15 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 
|10.2    |  | Office and warehouse lease dated January 16, 2004 between US Unwired Inc. and UniBill, L.L.C. (Incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-4 filed by US
Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



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##### Table of Contents

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3 |  | Management Agreement, dated as of April 1, 2004, by and among US Unwired Inc., IWO Holdings, Inc., Independent Wireless One Corporation, and Independent Wireless One Leased Realty
Corporation. (Incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC
on July 9, 2004, Registration No. 333-117284)
|     | 
|10.4 |  | Letter Agreement, dated January 30, 2003, among Weil, Gotshal & Manges LLP, US Unwired Inc. and Brown Brothers Harriman & Co. (Incorporated by reference to Exhibit 10.30 to the
Registration Statement on Form S-4 filed by US Unwired Inc., Louisiana Unwired, LLC, Unwired Telecom Corp., Texas Unwired, Georgia PCS Management, L.L.C., and Georgia PCS Leasing, LLC on July 9, 2004, Registration No. 333-117284)                                                                   
|     | 
|31.1 |  | Certification of President and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | 
|31.2 |  | Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     | 
|32.1 |  | Section 1350 Certification of President and Chief Executive Officer.                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | 
|32.2 |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                   



Registrant agrees to
furnish to the Commission on request copies of any instrument defining the rights of holders of long-term debt the total amount of which does not exceed 10% of the total consolidated assets of the registrant and which is otherwise not filed as an
exhibit.



| | b. | Reports on Form 8-K
| | -- | -------------------



On July 9, 2004, we filed a Current Report on Form 8-K containing a press release announcing that the board of directors of IWO Holdings, Inc.
(IWO), and IWOs senior lenders had reached an agreement under which US Unwired would continue to manage IWO through 2005 and that IWO may extend the agreement through 2006. We also explained that we made certain reclassifications
to our consolidated financial statements for each of the three years ending December 31, 2003 to be consistent with reclassifications made during the three-month period ended March 31, 2004 included in the Form 10-Q filed with the Securities and
Exchange Commission on May 3, 2004. The reclassifications were between the expense categories of Cost of service, General and administrative and Sales and marketing and reclassified financial information was provided.



On July 28, 2004, we filed a Current Report on Form 8-K pursuant to Item 12
of Form 8-K containing a press release announcing our earnings for the fiscal quarter ended June 30, 2004 and containing a transcript of our July 29, 2004 conference call discussing our earnings for the fiscal quarter ended June 30, 2004.



On September 29, 2004, we filed a Current Report on Form 8-K
pursuant to Item 12 of Form 8-K containing a press release announcing that we had given notice to U.S. Bank National Association (as trustee and paying agent) to redeem all of US Unwireds outstanding 133/8% Senior
Subordinated Discount Notes due 2009.



SIGNATURES



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



|                 |  |                 |  |                                        
|---------------- |  | --------------- |  | ---------------------------------------
|November 1, 2004 |  | US UNWIRED INC.
|                 |  |                
|                 |  | By:             |  | /s/ Jerry E. Vaughn                    
|                 |  |                 |  | Jerry E. Vaughn Chief Financial
Officer



42