##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004 OR
|- | ----------------------------------------------------------------------------------------------------------------------------------------



| ̈ | 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)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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 128,920,585 shares of common stock, $0.01 par value per share, outstanding at May 1, 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 |  | 17  
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 26  
|           |  |                                                                                      
|Part II   |  | OTHER INFORMATION                                                                     |  |     
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |  | 26  
|           |  |                                                                                      
|Item 3.    |  | Defaults in Senior Securities                                                         |  | 27  
|           |  |                                                                                      
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                      |  | 27  
|           |  |                                                                                      
|Signatures |  |                                                                                       |  | 28  



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)

|                                                            |  |               |          |   |                  |   |          |  
|----------------------------------------------------------- |  | ------------- | -------- | - | ---------------- | - | -------- | -
|                                                            |  | March 31,2004 |          |   | December 31,2003 |  
|                                                            |  | (Unaudited)   |          |   | (Note 1)         |  
|Assets                                                      |  |               |          |   |                  |   |          |  
|Current assets:                                             |  |               |          |   |                  |   |          |  
|Cash and cash equivalents                                   |  | $             | 144,328  |   |                  | $ | 97,193   |  
|Restricted cash                                             |  |               | 8,173    |   |                  |   | 19,358   |  
|Subscriber receivables, net                                 |  |               | 34,270   |   |                  |   | 28,687   |  
|Other receivables                                           |  |               | 3,093    |   |                  |   | 2,625    |  
|Inventory                                                   |  |               | 4,309    |   |                  |   | 5,615    |  
|Prepaid expenses and other assets                           |  |               | 17,676   |   |                  |   | 14,833   |  
|Receivables from related parties                            |  |               | 641      |   |                  |   | 647      |  
|Receivables from officers                                   |  |               | 85       |   |                  |   | 85       |  
|Current assets related to discontinued operations           |  |               | 156      |   |                  |   | 1,049    |  
|                                                            |  |               |          |   |                  |   |          |  
|Total current assets                                        |  |               | 212,731  |   |                  |   | 170,092  |  
|                                                            |  |              
|Property and equipment, net                                 |  |               | 388,119  |   |                  |   | 411,518  |  
|Goodwill                                                    |  |               | 46,705   |   |                  |   | 46,705   |  
|Intangibles, net                                            |  |               | 31,904   |   |                  |   | 40,785   |  
|Notes receivable from unconsolidated affiliates             |  |               | 1,906    |   |                  |   | 1,887    |  
|Other assets                                                |  |               | 33,421   |   |                  |   | 42,571   |  
|Non-current assets related to discontinued operations       |  |               | 150      |   |                  |   | 4,770    |  
|                                                            |  |               |          |   |                  |   |          |  
|Total assets                                                |  | $             | 714,936  |   |                  | $ | 718,328  |  
|                                                            |  |               |          |   |                  |   |          |  
|                                                            |  |              
|Liabilities and stockholders deficit                       |  |               |          |   |                  |   |          |  
|Current liabilities:                                        |  |               |          |   |                  |   |          |  
|Accounts payable                                            |  | $             | 42,902   |   |                  | $ | 41,377   |  
|Accrued expenses                                            |  |               | 81,083   |   |                  |   | 77,137   |  
|Current maturities of long term obligations                 |  |               | 15,585   |   |                  |   | 11,145   |  
|Current maturities of long term obligations in default      |  |               | 352,120  |   |                  |   | 351,697  |  
|Current liabilities related to discontinued operations      |  |               | 373      |   |                  |   | 49       |  
|                                                            |  |               |          |   |                  |   |          |  
|Total current liabilities                                   |  |               | 492,063  |   |                  |   | 481,405  |  
|                                                            |  |              
|Long term obligations, net of current maturities            |  |               | 428,314  |   |                  |   | 434,745  |  
|Long term obligations in default, net of current maturities |  |               |         |   |                  |   |         |  
|Deferred gain                                               |  |               | 31,212   |   |                  |   | 30,729   |  
|Investments in and advances to unconsolidated affiliates    |  |               | 2,547    |   |                  |   | 1,216    |  
|                                                            |  |              
|Stockholders deficit:                                      |  |               |          |   |                  |   |          |  
|Common stock                                                |  |               | 1,288    |   |                  |   | 1,288    |  
|Additional paid in capital                                  |  |               | 654,947  |   |                  |   | 654,899  |  
|Retained deficit                                            |  |               | (895,425 | ) |                  |   | (885,765 | )
|Promissory note                                             |  |               |         |   |                  |   | (179     | )
|Treasury stock                                              |  |               | (10      | ) |                  |   | (10      | )
|                                                            |  |               |          |   |                  |   |          |  
|Total stockholders deficit                                 |  |               | (239,200 | ) |                  |   | (229,767 | )
|                                                            |  |               |          |   |                  |   |          |  
|Total liabilities and stockholders deficit                 |  | $             | 714,936  |   |                  | $ | 718,328  |  
|                                                            |  |               |          |   |                  |   |          |  



See accompanying notes
to condensed consolidated financial statements



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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 ended March 31, |        
|                                                                                     |  | 2004                                 |         |   | 2003 |  
|Revenue:                                                                             |  |                                      |         |   |      |   |         |  
|Subscriber                                                                           |  | $                                    | 101,781 |   |      | $ | 91,348  |  
|Roaming                                                                              |  |                                      | 31,083  |   |      |   | 26,607  |  
|Merchandise sales                                                                    |  |                                      | 8,324   |   |      |   | 6,186   |  
|Other revenue                                                                        |  |                                      | 423     |   |      |   | 589     |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Total revenue                                                                        |  |                                      | 141,611 |   |      |   | 124,730 |  
|Expense:                                                                             |  |                                      |         |   |      |   |         |  
|Cost of service                                                                      |  |                                      | 68,762  |   |      |   | 77,281  |  
|Merchandise cost of sales                                                            |  |                                      | 14,285  |   |      |   | 9,185   |  
|General and administrative                                                           |  |                                      | 7,927   |   |      |   | 7,260   |  
|Sales and marketing                                                                  |  |                                      | 22,589  |   |      |   | 25,844  |  
|Non-cash stock compensation                                                          |  |                                      | 45      |   |      |   | 986     |  
|Depreciation and amortization                                                        |  |                                      | 29,400  |   |      |   | 29,658  |  
|IWO asset abandonment charge                                                         |  |                                      |        |   |      |   | 12,403  |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Total operating expense                                                              |  |                                      | 143,008 |   |      |   | 162,617 |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Operating loss                                                                       |  |                                      | (1,397  | ) |      |   | (37,887 | )
|Other income (expense):                                                              |  |                                      |         |   |      |   |         |  
|Interest expense                                                                     |  |                                      | (24,520 | ) |      |   | (20,690 | )
|Gain on sale of assets                                                               |  |                                      | (495    | ) |      |   | 2       |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Total other expense                                                                  |  |                                      | (25,015 | ) |      |   | (20,688 | )
|                                                                                     |  |                                     
|Loss from continuing operations before equity in income of unconsolidated affiliates |  |                                      | (26,412 | ) |      |   | (58,575 | )
|Equity in income of unconsolidated affiliates                                        |  |                                      | 116     |   |      |   | 180     |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Loss from continuing operations                                                      |  |                                      | (26,296 | ) |      |   | (58,395 | )
|                                                                                     |  |                                     
|Discontinued operations:                                                             |  |                                      |         |   |      |   |         |  
|Gain on disposal of discontinued operations                                          |  |                                      | 16,183  |   |      |   |        |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Income from discontinued operations                                                  |  |                                      | 451     |   |      |   | 923     |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|                                                                                     |  |                                      | 16,634  |   |      |   | 923     |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|Net loss                                                                             |  | $                                    | (9,662  | ) |      | $ | (57,472 | )
|                                                                                     |  |                                      |         |   |      |   |         |  
|Basic and diluted loss per share                                                     |  |                                      |         |   |      |   |         |  
|Continuing operations                                                                |  | $                                    | (0.20   | ) |      | $ | (0.45   | )
|Discontinued operations                                                              |  |                                      | .13     |   |      |   |        |  
|                                                                                     |  |                                      |         |   |      |   |         |  
|                                                                                     |  | $                                    | (0.07   | ) |      | $ | (0.45   | )
|                                                                                     |  |                                      |         |   |      |   |         |  
|Weighted average outstanding common shares                                           |  |                                      | 128,845 |   |      |   | 128,832 |  
|                                                                                     |  |                                      |         |   |      |   |         |  



See accompanying notes
to condensed consolidated financial statements



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##### Table of Contents

UNWIRED INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)



|                                                 |  |                                      |         |   |      |   |        |  
|------------------------------------------------ |  | ------------------------------------ | ------- | - | ---- | - | ------ | -
|                                                 |  | For the three months ended March 31, |        
|                                                 |  | 2004                                 |         |   | 2003 |  
|Cash flows from operating activities             |  |                                      |         |   |      |   |        |  
|Net cash provided by operating activities        |  | $                                    | 12,851  |   |      | $ | 9,959  |  
|                                                 |  |                                     
|Cash flows from investing activities             |  |                                      |         |   |      |   |        |  
|Proceeds from restricted cash                    |  |                                      | 11,186  |   |      |   | 11,035 |  
|Proceeds from sale of assets                     |  |                                      | 41,565  |   |      |   | 350    |  
|Distribution from unconsolidated affiliates      |  |                                      | 500     |   |      |   |       |  
|Payments for the purchase of equipment           |  |                                      | (5,226  | ) |      |   | (9,829 | )
|                                                 |  |                                      |         |   |      |   |        |  
|Net cash provided by investing activities        |  |                                      | 48,025  |   |      |   | 1,556  |  
|                                                 |  |                                     
|Cash flows from financing activities             |  |                                      |         |   |      |   |        |  
|Principal payments of long-term debt             |  |                                      | (13,741 | ) |      |   | (172   | )
|                                                 |  |                                      |         |   |      |   |        |  
|Net cash used in financing activities            |  |                                      | (13,741 | ) |      |   | (172   | )
|                                                 |  |                                      |         |   |      |   |        |  
|Net increase in cash and cash equivalents        |  |                                      | 47,135  |   |      |   | 11,343 |  
|                                                 |  |                                     
|Cash and cash equivalents at beginning of period |  |                                      | 97,193  |   |      |   | 61,985 |  
|                                                 |  |                                      |         |   |      |   |        |  
|Cash and cash equivalents at end of period       |  | $                                    | 144,328 |   |      | $ | 73,328 |  
|                                                 |  |                                      |         |   |      |   |        |  



See accompanying notes
to condensed consolidated financial statements



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##### Table of Contents

US UNWIRED INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 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-month
period ended March 31, 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 with the Securities and Exchange Commission.



Certain reclassifications have been made to the financial statements for the three-month period ended March 31, 2003 to
conform to the presentation of the financial statements for the three-month period ended March 31, 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 June 30, 2003. EITF 00-21 addresses the determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the
related revenues should be measured and allocated to the separate units of accounting. In applying this guidance, separate contracts with the same party, entered into at or near the same time, will be presumed to be a package, and the consideration
will be measured and allocated to the separate units based on their relative fair values. The Company 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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##### Table of Contents

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



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



The Company provides digital PCS services through its wholly owned
subsidiaries: Louisiana Unwired LLC (Louisiana Unwired) and IWO Holdings, Inc. (IWO). Through January 2004, the Company provided regional cellular service in southwest Louisiana through Unwired Telecom Corporation
(Unwired Telecom).



In February 2004, the Company
consummated the sale of its cellular operations, which included certain cellular towers, for $21.5 million and recognized a gain of $16.2 million that has been recorded as a gain on the disposal of discontinued operations. In March 2004, the Company
sold 81 cellular and PCS cell site towers for $9.8 million. Concurrent with the sale, the Company entered into operating leases for a portion of the antenna space on the sold towers from the buyer for an initial term of 10 years, renewable at the
option of the Company for two additional ten-year terms at an initial rental of $1.4 million per year, increasing each year by 4% of the previous years rental. The Company recorded a deferred gain of approximately $1.8 million that will be
recognized ratably over the initial 10-year term of the operating lease. Also during the three-month period ended March 31, 2004, the Company divested of other non-core assets including certain PCS licenses and a minority interest in an
unconsolidated affiliate for $10.3 million and recorded a loss of $.5 million. The Company used $11.0 million of the $41.6 million in proceeds to partially repay the US Unwired senior bank credit facility. The accompanying consolidated financial
statements reflect the Companys cellular operations as a discontinued operation.



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



US Unwired has a senior bank credit facility and senior subordinated discount notes. IWO has a senior bank credit facility and senior notes. Under the
terms of these debt instruments, funds available under the US Unwired debt can only be used by US Unwired, and funds available under the IWO debt can only be used by IWO. US Unwired is not obligated for the payment of IWOs debt, and IWO is not
obligated for the payment of US Unwireds debt.



US
Unwired Liquidity



As of March 31, 2004, US Unwired had
$108.1 million in cash and cash equivalents; availability under the US Unwired senior bank credit facility of $38.3 million; and indebtedness that consisted of $62.4 million related to the US Unwired senior bank credit facility, $371.1 million
related to the US Unwired senior subordinated discount notes and $10.4 million in capital leases, promissory notes and vendor financing for a total of $443.9 million. See Note 6 for commitments and contingencies that may affect US Unwireds
liquidity. US Unwired must comply with certain financial covenants of the US Unwired senior bank credit facility and the US Unwired senior subordinated discount notes, and as of March 31, 2004, was in compliance with these financial covenants.



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



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##### Table of Contents

IWO Liquidity



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 an acceptable restructuring to preserve liquidity but has been unable to arrive at an acceptable plan. The Company anticipates seeking
protection under bankruptcy in 2004.



As of March 31, 2004,
IWO had $36.2 million in cash and cash equivalents and $8.2 million in restricted cash set aside for the IWO senior bank credit facility; and indebtedness that consisted of $213.2 million related to the IWO senior bank credit facility and $138.9
million related to the IWO senior notes for a total of $352.1 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.



In March 2004, IWO failed to make
the initial $2.3 million principal payment on the IWO senior bank credit facility and since March 31, 2003, IWO has failed to make $14.2 million in interest payments on the IWO senior bank credit facility. IWO was also not in compliance with its
restrictive covenants under the IWO senior bank credit facility at March 31, 2004. As a result of IWOs failure to make scheduled principal and interest payments and the covenant violations, IWO was in default of the IWO senior bank credit
facility at March 31, 2004 and the holders of the senior bank credit facility have denied IWO access to the remaining $25.2 million of availability. As a result, the Company has classified all outstanding indebtedness of both the IWO senior bank
credit facility and the IWO senior notes as a current liability.



As 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 the
IWO Sprint management agreement. 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 March 31, 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 $11.1 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 bank credit facility place IWO
in default, US Unwireds relationship with IWO may change and several alternatives exist ranging from working for the holders of the IWO senior bank credit facility and the holders of the IWO senior notes as a manager of the IWO territory,
possibly subject to the approval by Sprint PCS, to no involvement with IWO at all.



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



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##### Table of Contents

|4. | Details of Certain Balance Sheet Accounts
|-- | -----------------------------------------



Major categories of property and equipment consisted of the following:



|                                               |  |                |         |                   |   |        
|---------------------------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                                               |  | March 31, 2004 |         | December 31, 2003
|                                               |  | (In thousands)
|Land                                           |  | $              | 754     |                   | $ | 754    
|Buildings and leasehold improvements           |  |                | 21,839  |                   |   | 21,829 
|Facilities and equipment                       |  |                | 574,490 |                   |   | 599,430
|Furniture, fixtures and vehicles               |  |                | 29,495  |                   |   | 9,059  
|Construction in progress                       |  |                | 12,999  |                   |   | 14,594 
|                                               |  |                |         |                   |   |        
|                                               |  |                | 639,577 |                   |   | 645,666
|Less accumulated depreciation and amortization |  |                | 251,458 |                   |   | 234,148
|                                               |  |                |         |                   |   |        
|                                               |  | $              | 388,119 |                   | $ | 411,518
|                                               |  |                |         |                   |   |        



Intangible assets
consisted of the following:



|                              |  |                |         |                   |   |        
|----------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                              |  | March 31, 2004 |         | December 31, 2003
|                              |  | (In thousands)
|Sprint affiliation agreement  |  | $              | 35,266  |                   | $ | 35,266 
|Subscriber base               |  |                | 81,824  |                   |   | 81,824 
|                              |  |                |         |                   |   |        
|                              |  |                | 117,090 |                   |   | 117,090
|Less accumulated amortization |  |                | 85,186  |                   |   | 76,305 
|                              |  |                |         |                   |   |        
|Intangible assets, net        |  | $              | 31,904  |                   | $ | 40,785 
|                              |  |                |         |                   |   |        



|5. | Long-Term Obligations
|-- | ---------------------



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



|                                                           |  |                |         |                   |   |        
|---------------------------------------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                                                           |  | March 31, 2004 |         | December 31, 2003
|                                                           |  | (In thousands)
|US Unwired Inc. senior subordinated discount notes         |  | $              | 371,053 |                   | $ | 359,302
|US Unwired Inc. senior bank credit facility                |  |                | 62,441  |                   |   | 76,000 
|Capital leases                                             |  |                | 6,711   |                   |   | 6,825  
|Promissory note                                            |  |                | 3,398   |                   |   | 3,452  
|Vendor financing                                           |  |                | 296     |                   |   | 311    
|                                                           |  |                |         |                   |   |        
|Total long-term obligations, US Unwired Inc.               |  |                | 443,899 |                   |   | 445,890
|IWO Holdings, Inc. senior notes                            |  |                | 138,936 |                   |   | 138,513
|IWO Holdings, Inc. senior bank credit facility, in default |  |                | 213,184 |                   |   | 213,184
|                                                           |  |                |         |                   |   |        
|Total long-term obligations, IWO Holdings, Inc.            |  |                | 352,120 |                   |   | 351,697
|Less current maturities                                    |  |                | 367,705 |                   |   | 362,842
|                                                           |  |                |         |                   |   |        
|Long-term obligations, excluding current maturities        |  | $              | 428,314 |                   | $ | 434,745
|                                                           |  |                |         |                   |   |        



As of March 31, 2004,
US Unwired was in compliance with all financial covenants under the US Unwired senior bank credit facility and the US Unwired senior subordinated discount notes.



In March 2004, IWO failed to make the initial $2.3 million principal payment on the IWO senior credit facility and since
March 31, 2003, IWO has failed to make $14.2 million in interest payments on the IWO million senior bank credit facility. As a result of the failure to make scheduled principal and interest payments and the covenant violations, IWO was in default of
its senior bank credit facility at



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March 31, 2004 and the holders of the senior bank credit facility have denied the Company access to the
remaining $25.2 million of availability. As a result of this and those issues as discussed in Note 3 above, the Company has classified all outstanding indebtedness of both the IWO senior bank credit facility and the IWO senior notes as a current
liability.



US Unwired Senior Subordinated Discount Notes
 13 3/8%



In October 1999, US Unwired issued $400
million in aggregate principal amount of 13 3/8% Senior Subordinated Discount Notes due November 1, 2009 (the US Unwired senior subordinated discount notes). The US Unwired senior subordinated discount notes were issued at a substantial
discount such that the Company received gross proceeds of approximately $209.2 million. The US Unwired senior subordinated discount notes increase in value daily, compounded twice per year, at the rate of 13 3/8% per year until November 1, 2004. On
that date, the value of the US Unwired senior subordinated discount notes will be equal to the face amount of the US Unwired senior subordinated discount notes and interest will begin to accrue at the rate of 13 3/8% per year. The Company will be
required to pay the accrued interest beginning May 1, 2005, and on each November 1 and May 1 thereafter. The US Unwired senior subordinated discount notes are a general unsecured obligation of the Company, except for the limited security provided by
a pledge agreement by the Companys wholly owned subsidiary, Louisiana Unwired LLC (LA Unwired). The US Unwired senior subordinated discount notes rank junior to all existing and future senior debt of the Company and equal in right
of payment of any future senior subordinated indebtedness of the Company.



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



US Unwired Senior Bank Credit Facility



The US Unwired senior bank credit facility, as amended in October 2003,
consists of $90 million in term loans and a $40 million reducing revolving credit facility. The term loans are being repaid in quarterly installments that began in June 2003, and as a result of these quarterly installments and other payments, the
Company has reduced its outstanding term loans to $62.4 million as of March 31, 2004. The $40 million reducing revolving credit facility is subject to certain cash balance requirements and will be permanently reduced by reductions of $4.0 million to
$6.0 million per quarter beginning in September 2005. As of March 31, 2004, $38.3 million was available. The US Unwired senior bank credit facility matures in 2008. The US Unwired senior bank credit facility allows for up to $2.0 million in letters
of credit and any letters of credit issued by the Company reduce the amount available under the reducing revolving credit facility. All loans under the US Unwired senior bank credit facility bear interest at variable rates tied to the federal funds
rate or LIBOR. The US Unwired senior bank credit facility is secured by all of the assets of the Company and its subsidiaries (other than property owned by IWO). Such collateral also secures certain interest rate protection and other hedging
agreements permitted by the credit agreement that may be entered into from time to time by the Company. Lucent Technologies, Inc, is also a guarantor of a portion of the senior secured credit facility. The proceeds from the US Unwired senior bank
credit facility are available for use only by US Unwired and its subsidiaries other than IWO.



IWO Senior Notes  14%



In February 2001, IWO issued 160,000 units, each consisting of $1,000 principal amount of 14% Senior Notes (the IWO senior notes) due January 15, 2011 and one warrant to purchase 12.50025 shares of IWOs class C common
stock at an exercise price of $7.00 per share. As a result of US Unwireds acquisition of IWO in April 2002, this warrant was converted to a US Unwired warrant to purchase 12.96401 shares of US Unwireds common stock at $6.75 per



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share. Interest is payable semi-annually on January 15 and July 15 of each year. Independent Wireless One
Corporation, a wholly owned subsidiary of IWO, is the sole guarantor of the IWO senior notes. All of IWOs restricted subsidiaries formed or acquired after the issuance of the IWO senior notes that guarantee the IWO senior bank credit facility
will also be required to guarantee the IWO senior notes. The IWO senior notes are not guaranteed by Independent Wireless One Realty Corporation, a wholly owned subsidiary of IWO, or US Unwired and its subsidiaries.



A portion of the original proceeds of the IWO senior notes 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 Bank Credit Facility



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



|6. | Commitments and Contingencies
|-- | -----------------------------



The Company uses Sprint PCS to process all post-pay subscriber billings including monthly recurring charges, airtime and other charges such as
interconnect fees. The Company pays various fees to Sprint PCS for new subscribers as well as recurring monthly fees for services performed for existing customers including billing 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. In March 2004, Sprint PCS remitted to the Company approximately $5.5 million for 2003 billings related to these services consisting of $1.1 million in cash
and $4.3 million in credits to previously disputed charges. 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 March 31,
2004, the Company had disputed approximately $19.8 million of charges to US Unwired and $10.1 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 March 31, 2004, management believes that Sprint
PCS has met the requirements necessary for the licenses that the Company operates for Sprint PCS under the Sprint



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PCS affiliation agreements and that the Company has met the requirements necessary for the licenses that
it owns.



On July 11, 2003, the Company and two of its
subsidiaries, Louisiana Unwired LLC and Texas Unwired (the Company), filed suit in U.S. District Court for the Western District of Louisiana, against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and Sprintcom, Inc.
(collectively, Sprint) and on September 25, 2003, the Company 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. 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 the Company to hire an outside accounting company or other expert to monitor monies
received by Sprint, and agreed with the Companys position that certain claims are subject to trial by jury in Louisiana. On March 8, 2004, the Company 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 the Companys Second Amended Complaint, which included a claim that the Company owed
Sprint approximately $16.3 million related to contractual disputes between the parties. On March 25, 2004, the Company filed Plaintiffs Application to Appoint an Outside Accounting Company or Other Expert to Contemporaneously Monitor Monies
Paid to Sprint From US Unwired Affiliate Customers. Sprint has filed an objection to the Companys application. The Company anticipates that the Court will rule on its application in the coming weeks. The Company and Sprint also have submitted
to the Court an agreed upon schedule to complete the discovery process during 2004 and the Company anticipates an early 2005 trial date. The Company does not believe that a negative outcome on Sprints counterclaim will have a material adverse
effect on the Company.



|7. | 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.



|8. | Stock Compensation
|-- | ------------------



The Company accounts for its stock compensation arrangements under the provision of APB 25, accounting for stock issued to employees.



Had compensation expense for the Companys stock option plan been
determined in accordance with SFAS No. 123, the Companys net loss and basic and diluted net loss per share of common stock for the three-month periods ended March 31, 2004 and 2003 would have been:



|                                                        |  |                             |         |   |      |   |         |  
|------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                        |  | Three months endedMarch 31, |        
|                                                        |  | 2004                        |         |   | 2003 |  
|Net loss:                                               |  |                             |         |   |      |   |         |  
|As reported                                             |  | $                           | (9,662  | ) |      | $ | (57,472 | )
|Add recorded non-cash stock compensation                |  |                             | 45      |   |      |   | 986     |  
|Less stock compensation in accordance with SFAS No. 123 |  |                             | (1,813  | ) |      |   | (1,871  | )
|                                                        |  |                             |         |   |      |   |         |  
|Pro forma net loss                                      |  | $                           | (11,430 | ) |      | $ | (58,357 | )
|                                                        |  |                             |         |   |      |   |         |  
|Basic and diluted loss per share:                       |  |                             |         |   |      |   |         |  
|As reported                                             |  | $                           | (0.07   | ) |      | $ | (0.45   | )
|                                                        |  |                             |         |   |      |   |         |  
|Pro forma net loss per share                            |  | $                           | (0.09   | ) |      | $ | (0.45   | )
|                                                        |  |                             |         |   |      |   |         |  



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|9. | Condensed Consolidating Financial Information
|-- | ---------------------------------------------



As discussed in Note 5, the US Unwired Senior Subordinated Discount Notes are guaranteed by certain of the Companys subsidiaries. The following
information presents the condensed consolidating balance sheets as of March 31, 2004 and December 31, 2003 and the condensed consolidating statements of operations and cash flows for the three-month periods ended March 31, 2004 and March 31, 2003 of
(a) the Parent Company, US Unwired Inc., (b) the Guarantors, Unwired Telecom Corporation and Louisiana Unwired, 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.



Condensed Consolidating Balance Sheet



|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|------------------------------------------------------- |  | ---------------------- | -------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | ------------------------------------ | -------- | - | -------------------- | - | -------- | ------------ |  | - | ---------- | - |  | - | -------- | -
|                                                        |  | As of March 31, 2004   |         
|                                                        |  | USUnwiredInc. (Parent) |          |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldingCorporation(Non-Guarantor) |          |   | ConsolidatingEntries |   |          | Consolidated | 
|                                                        |  | (In thousands)         |         
|ASSETS:                                                 |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Current Assets:                                         |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Cash and cash equivalents                               |  | $                      | 106,863  |   |                                      | $ | 845                            |  | $ | 377              |   |  | $                                    | 1,222    |   |                      | $ | 36,243   |              |  | $ |           |   |  | $ | 144,328  |  
|Restricted cash                                         |  |                        |         |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   | 8,173    |              |  |   |           |   |  |   | 8,173    |  
|Subscriber receivables, net                             |  |                        |         |   |                                      |   | 91                             |  |   | 23,278           |   |  |                                      | 23,369   |   |                      |   | 10,901   |              |  |   |           |   |  |   | 34,270   |  
|Other receivables                                       |  |                        | 82       |   |                                      |   |                               |  |   | 2,817            |   |  |                                      | 2,817    |   |                      |   | 194      |              |  |   |           |   |  |   | 3,093    |  
|Inventory                                               |  |                        |         |   |                                      |   |                               |  |   | 3,106            |   |  |                                      | 3,106    |   |                      |   | 1,203    |              |  |   |           |   |  |   | 4,309    |  
|Prepaid expenses and other assets                       |  |                        | 1,868    |   |                                      |   |                               |  |   | 9,484            |   |  |                                      | 9,484    |   |                      |   | 6,324    |              |  |   |           |   |  |   | 17,676   |  
|Receivables from (payables to) related parties          |  |                        | (3,793   | ) |                                      |   | 137                            |  |   | 4,576            |   |  |                                      | 4,713    |   |                      |   | (279     | )            |  |   |           |   |  |   | 641      |  
|Receivables from officers                               |  |                        | 85       |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   |           |   |  |   | 85       |  
|Current assets related to discontinued operations       |  |                        |         |   |                                      |   | 156                            |  |   |                 |   |  |                                      | 156      |   |                      |   |         |              |  |   |           |   |  |   | 156      |  
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current assets                                    |  |                        | 105,105  |   |                                      |   | 1,229                          |  |   | 43,638           |   |  |                                      | 44,867   |   |                      |   | 62,759   |              |  |   |           |   |  |   | 212,731  |  
|Property and equipment, net                             |  |                        | 9,830    |   |                                      |   | 1,107                          |  |   | 216,812          |   |  |                                      | 217,919  |   |                      |   | 160,339  |              |  |   | 31         |   |  |   | 388,119  |  
|Goodwill and other intangible assets, net               |  |                        |         |   |                                      |   |                               |  |   | 60,435           |   |  |                                      | 60,435   |   |                      |   | 18,174   |              |  |   |           |   |  |   | 78,609   |  
|Notes receivable from unconsolidated affiliates         |  |                        | 110,609  |   |                                      |   | 58,742                         |  |   |                 |   |  |                                      | 58,742   |   |                      |   |         |              |  |   | (167,445   | ) |  |   | 1,906    |  
|Other assets                                            |  |                        | 11,706   |   |                                      |   |                               |  |   | 5,973            |   |  |                                      | 5,973    |   |                      |   | 15,742   |              |  |   |           |   |  |   | 33,421   |  
|Non-current assets related to discontinued operations   |  |                        |         |   |                                      |   | 150                            |  |   |                 |   |  |                                      | 150      |   |                      |   |         |              |  |   |           |   |  |   | 150      |  
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total assets                                            |  | $                      | 237,250  |   |                                      | $ | 61,228                         |  | $ | 326,858          |   |  | $                                    | 388,086  |   |                      | $ | 257,014  |              |  | $ | (167,414   | ) |  | $ | 714,936  |  
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|                                                        |  |                        |          |   |                                     
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT):         |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              | 
|Current liabilities:                                    |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Accounts payable                                        |  | $                      | 1,182    |   |                                      | $ | 133                            |  | $ | 27,980           |   |  | $                                    | 28,113   |   |                      | $ | 13,607   |              |  | $ |           |   |  | $ | 42,902   |  
|Accrued expenses                                        |  |                        | 5,217    |   |                                      |   | 132                            |  |   | 36,165           |   |  |                                      | 36,297   |   |                      |   | 39,569   |              |  |   |           |   |  |   | 81,083   |  
|Current maturities of long term debt                    |  |                        | 71,884   |   |                                      |   | 65                             |  |   | 111,081          |   |  |                                      | 111,146  |   |                      |   | 352,120  |              |  |   | (167,445   | ) |  |   | 367,705  |  
|Current liabilities related to discontinued operations  |  |                        |         |   |                                      |   | 373                            |  |   |                 |   |  |                                      | 373      |   |                      |   |         |              |  |   |           |   |  |   | 373      |  
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total current liabilities                               |  |                        | 78,283   |   |                                      |   | 703                            |  |   | 175,226          |   |  |                                      | 175,929  |   |                      |   | 405,296  |              |  |   | (167,445   | ) |  |   | 492,063  |  
|Long term debt, net of current maturities               |  |                        | 421,844  |   |                                      |   | 231                            |  |   | 6,239            |   |  |                                      | 6,470    |   |                      |   |         |              |  |   |           |   |  |   | 428,314  |  
|Deferred gain                                           |  |                        |         |   |                                      |   |                               |  |   | 30,461           |   |  |                                      | 30,461   |   |                      |   | 751      |              |  |   |           |   |  |   | 31,212   |  
|Investments in and advance to unconsolidated affiliates |  |                        | 46,852   |   |                                      |   | 3,188                          |  |   | 149,227          |   |  |                                      | 152,415  |   |                      |   |         |              |  |   | (196,720   | ) |  |   | 2,547    |  
|Stockholders equity (deficit):                         |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Common stock                                            |  |                        | 1,288    |   |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   | 1        |              |  |   | (1         | ) |  |   | 1,288    |  
|Additional paid in capital                              |  |                        | 656,068  |   |                                      |   | 1,947                          |  |   | 803,808          |   |  |                                      | 805,755  |   |                      |   | 446,449  |              |  |   | (1,253,325 | ) |  |   | 654,947  |  
|Retained deficit                                        |  |                        | (967,075 | ) |                                      |   | 55,159                         |  |   | (838,103         | ) |  |                                      | (782,944 | ) |                      |   | (595,483 | )            |  |   | 1,450,077  |   |  |   | (895,425 | )
|Treasury stock                                          |  |                        | (10      | ) |                                      |   |                               |  |   |                 |   |  |                                      |         |   |                      |   |         |              |  |   |           |   |  |   | (10      | )
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total stockholders equity (deficit)                    |  |                        | (309,729 | ) |                                      |   | 57,106                         |  |   | (34,295          | ) |  |                                      | 22,811   |   |                      |   | (149,033 | )            |  |   | 196,751    |   |  |   | (239,200 | )
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  
|Total liabilities and stockholders equity (deficit)    |  | $                      | 237,250  |   |                                      | $ | 61,228                         |  | $ | 326,858          |   |  | $                                    | 388,086  |   |                      | $ | 257,014  |              |  | $ | (167,414   | ) |  | $ | 714,936  |  
|                                                        |  |                        |          |   |                                      |   |                                |  |   |                  |   |  |                                      |          |   |                      |   |          |              |  |   |            |   |  |   |          |  



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Condensed Consolidating Balance Sheet



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



14



---

##### Table of Contents

Condensed Consolidating Statement of Operations



|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|-------------------------------------------------------- |  | --------------------------------------- | ------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                         |  | Three-month period ended March 31, 2004 |        
|                                                         |  | USUnwiredInc. (Parent)                  |         |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                         |  | (in thousands)                          |        
|Revenues:                                                |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Subscriber                                               |  | $                                       |        |   |                                      | $ |                               |  | $ | 68,810           |   |  | $                                | 68,810  |   |                      | $ | 32,971  |              |  | $ |       |   |  | $ | 101,781 |  
|Roaming                                                  |  |                                         |        |   |                                      |   |                               |  |   | 22,610           |   |  |                                  | 22,610  |   |                      |   | 8,597   |              |  |   | (124   | ) |  |   | 31,083  |  
|Merchandise sales                                        |  |                                         |        |   |                                      |   |                               |  |   | 6,039            |   |  |                                  | 6,039   |   |                      |   | 2,285   |              |  |   |       |   |  |   | 8,324   |  
|Other revenue                                            |  |                                         | 7,337   |   |                                      |   |                               |  |   | 154              |   |  |                                  | 154     |   |                      |   | 84      |              |  |   | (7,152 | ) |  |   | 423     |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total revenues                                           |  |                                         | 7,337   |   |                                      |   |                               |  |   | 97,613           |   |  |                                  | 97,613  |   |                      |   | 43,937  |              |  |   | (7,276 | ) |  |   | 141,611 |  
|Expenses:                                                |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Cost of service                                          |  |                                         | 1,081   |   |                                      |   |                               |  |   | 46,377           |   |  |                                  | 46,377  |   |                      |   | 22,452  |              |  |   | (1,148 | ) |  |   | 68,762  |  
|Merchandise cost of goods sold                           |  |                                         |        |   |                                      |   |                               |  |   | 10,143           |   |  |                                  | 10,143  |   |                      |   | 4,142   |              |  |   |       |   |  |   | 14,285  |  
|General and administrative                               |  |                                         | 5,860   |   |                                      |   |                               |  |   | 4,785            |   |  |                                  | 4,785   |   |                      |   | 2,954   |              |  |   | (5,672 | ) |  |   | 7,927   |  
|Sales and marketing                                      |  |                                         | 396     |   |                                      |   |                               |  |   | 15,072           |   |  |                                  | 15,072  |   |                      |   | 7,512   |              |  |   | (391   | ) |  |   | 22,589  |  
|Non-cash stock compensation                              |  |                                         | 45      |   |                                      |   |                               |  |   |                 |   |  |                                  |        |   |                      |   |        |              |  |   |       |   |  |   | 45      |  
|Depreciation and amortization                            |  |                                         | 457     |   |                                      |   |                               |  |   | 14,979           |   |  |                                  | 14,979  |   |                      |   | 13,964  |              |  |   |       |   |  |   | 29,400  |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total operating expense                                  |  |                                         | 7,839   |   |                                      |   |                               |  |   | 91,356           |   |  |                                  | 91,356  |   |                      |   | 51,024  |              |  |   | (7,211 | ) |  |   | 143,008 |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Operating income (loss)                                  |  |                                         | (502    | ) |                                      |   |                               |  |   | 6,257            |   |  |                                  | 6,257   |   |                      |   | (7,087  | )            |  |   | (65    | ) |  |   | (1,397  | )
|Other income (expense), net                              |  |                                         | (12,009 | ) |                                      |   | 2,145                          |  |   | (3,812           | ) |  |                                  | (1,667  | ) |                      |   | (11,339 | )            |  |   |        |   |  |   | (25,015 | )
|Equity in income (losses) of unconsolidated subsidiaries |  |                                         | (15,756 | ) |                                      |   | 116                            |  |   | (18,426          | ) |  |                                  | (18,310 | ) |                      |   |        |              |  |   | 34,182 |   |  |   | 116     |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss) from continuing operations             |  |                                         | (28,267 | ) |                                      |   | 2,261                          |  |   | (15,981          | ) |  |                                  | (13,720 | ) |                      |   | (18,426 | )            |  |   | 34,117 |   |  |   | (26,296 | )
|Income from discontinued operations, net                 |  |                                         |        |   |                                      |   | 16,569                         |  |   |                 |   |  |                                  | 16,569  |   |                      |   |         |              |  |   | 65     |   |  |   | 16,634  |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss)                                        |  | $                                       | (28,267 | ) |                                      | $ | 18,830                         |  | $ | (15,981          | ) |  | $                                | 2,849   |   |                      | $ | (18,426 | )            |  | $ | 34,182 |   |  | $ | (9,662  | )
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  



Condensed Consolidating Statement of
Operations



|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|-------------------------------------------------------- |  | --------------------------------------- | ------- | - | ------------------------------------ | - | ------------------------------ |  | - | ---------------- | - |  | -------------------------------- | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------ | - |  | - | ------- | -
|                                                         |  | Three-month period ended March 31, 2003 |        
|                                                         |  | USUnwiredInc. (Parent)                  |         |   | UnwiredTelecomCorporation(Guarantor) |   | LouisianaUnwiredLLC(Guarantor) |  |   | Total Guarantors |   |  | IWOHoldings,Inc. (Non-Guarantor) |         |   | ConsolidatingEntries |   |         | Consolidated | 
|                                                         |  | (In thousands)                          |        
|Revenues:                                                |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Subscriber                                               |  | $                                       |        |   |                                      | $ |                               |  | $ | 61,275           |   |  | $                                | 61,275  |   |                      | $ | 30,073  |              |  | $ |       |   |  | $ | 91,348  |  
|Roaming                                                  |  |                                         |        |   |                                      |   |                               |  |   | 19,676           |   |  |                                  | 19,676  |   |                      |   | 7,081   |              |  |   | (150   | ) |  |   | 26,607  |  
|Merchandise sales                                        |  |                                         |        |   |                                      |   |                               |  |   | 4,435            |   |  |                                  | 4,435   |   |                      |   | 1,751   |              |  |   |       |   |  |   | 6,186   |  
|Other revenue                                            |  |                                         | 6,550   |   |                                      |   |                               |  |   | 286              |   |  |                                  | 286     |   |                      |   | 115     |              |  |   | (6,362 | ) |  |   | 589     |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total revenues                                           |  |                                         | 6,550   |   |                                      |   |                               |  |   | 85,672           |   |  |                                  | 85,672  |   |                      |   | 39,020  |              |  |   | (6,512 | ) |  |   | 124,730 |  
|Expenses:                                                |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Cost of service                                          |  |                                         | 663     |   |                                      |   |                               |  |   | 50,770           |   |  |                                  | 50,770  |   |                      |   | 26,722  |              |  |   | (874   | ) |  |   | 77,281  |  
|Merchandise cost sales                                   |  |                                         |        |   |                                      |   |                               |  |   | 6,674            |   |  |                                  | 6,674   |   |                      |   | 2,511   |              |  |   |       |   |  |   | 9,185   |  
|General and administrative                               |  |                                         | 4,733   |   |                                      |   |                               |  |   | 3,496            |   |  |                                  | 3,496   |   |                      |   | 3,360   |              |  |   | (4,329 | ) |  |   | 7,260   |  
|Sales and marketing                                      |  |                                         | 1,154   |   |                                      |   |                               |  |   | 16,882           |   |  |                                  | 16,882  |   |                      |   | 8,906   |              |  |   | (1,098 | ) |  |   | 25,844  |  
|Non-cash stock compensation                              |  |                                         | 935     |   |                                      |   |                               |  |   | 51               |   |  |                                  | 51      |   |                      |   |        |              |  |   |       |   |  |   | 986     |  
|Depreciation and amortization                            |  |                                         | 654     |   |                                      |   |                               |  |   | 15,630           |   |  |                                  | 15,630  |   |                      |   | 13,374  |              |  |   |       |   |  |   | 29,658  |  
|IWO asset abandonment charge                             |  |                                         |        |   |                                      |   |                               |  |   |                 |   |  |                                  |        |   |                      |   | 12,403  |              |  |   |        |   |  |   | 12,403  |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Total operating expense                                  |  |                                         | 8,139   |   |                                      |   |                               |  |   | 93,503           |   |  |                                  | 93,503  |   |                      |   | 67,276  |              |  |   | (6,301 | ) |  |   | 162,617 |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Operating income (loss)                                  |  |                                         | (1,589  | ) |                                      |   |                               |  |   | (7,831           | ) |  |                                  | (7,831  | ) |                      |   | (28,256 | )            |  |   | (211   | ) |  |   | (37,887 | )
|Other income (expense), net                              |  |                                         | (10,149 | ) |                                      |   | 325                            |  |   | (1,993           | ) |  |                                  | (1,668  | ) |                      |   | (8,871  | )            |  |   |        |   |  |   | (20,688 | )
|Equity in income (losses) of unconsolidated subsidiaries |  |                                         | (46,888 | ) |                                      |   | 154                            |  |   | (37,127          | ) |  |                                  | (36,973 | ) |                      |   |        |              |  |   | 84,041 |   |  |   | 180     |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss) from continuing operations             |  |                                         | (58,626 | ) |                                      |   | 479                            |  |   | (46,951          | ) |  |                                  | (46,472 | ) |                      |   | (37,127 | )            |  |   | 83,830 |   |  |   | (58,395 | )
|Income from discontinued operations, net                 |  |                                         |        |   |                                      |   | 712                            |  |   |                 |   |  |                                  | 712     |   |                      |   |         |              |  |   | 211    |   |  |   | 923     |  
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  
|Net income (loss)                                        |  | $                                       | (58,626 | ) |                                      | $ | 1,191                          |  | $ | (46,951          | ) |  | $                                | (45,760 | ) |                      | $ | (37,127 | )            |  | $ | 84,041 |   |  | $ | (57,472 | )
|                                                         |  |                                         |         |   |                                      |   |                                |  |   |                  |   |  |                                  |         |   |                      |   |         |              |  |   |        |   |  |   |         |  



15



---

##### Table of Contents

Condensed Consolidating Statement of Cash Flows



|                                                     |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | --------------------------------------- | ------- | - | ------------------------------------ | - | ---- | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | ------- | - | -------------------- | - | ------ | ------------ |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Three-month period ended March 31, 2004 |        
|                                                     |  | 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  |  | $                                       | (2,120  | ) |                                      | $ | 48   |                                |  | $ | 20,756           |   |  | $                              | 20,804  |   |                      | $ | (5,833 | )            |  | $ |        |   |  | $ | 12,851  |  
|                                                     |  |                                         |         |   |                                      |   |     
|Cash flows from investing activities:                |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|Payments for the purchase of equipment               |  |                                         | (95     | ) |                                      |   |     |                                |  |   | (3,679           | ) |  |                                | (3,679  | ) |                      |   | (1,452 | )            |  |   |        |   |  |   | (5,226  | )
|Proceeds from the sale of assets                     |  |                                         | 41,542  |   |                                      |   |     |                                |  |   | 18               |   |  |                                | 18      |   |                      |   | 5      |              |  |   |        |   |  |   | 41,565  |  
|Proceeds from restricted cash                        |  |                                         |        |   |                                      |   |     |                                |  |   |                 |   |  |                                |        |   |                      |   | 11,186 |              |  |   |        |   |  |   | 11,186  |  
|Distribution from unconsolidated affiliates          |  |                                         |        |   |                                      |   | 500  |                                |  |   |                 |   |  |                                | 500     |   |                      |   |       |              |  |   |        |   |  |   | 500     |  
|Disbursement of intercompany note                    |  |                                         | 20,124  |   |                                      |   | (600 | )                              |  |   |                 |   |  |                                | (600    | ) |                      |   |       |              |  |   | (19,524 | ) |  |   |        |  
|                                                     |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) investing activities  |  |                                         | 61,571  |   |                                      |   | (100 | )                              |  |   | (3,661           | ) |  |                                | (3,761  | ) |                      |   | 9,739  |              |  |   | (19,524 | ) |  |   | 48,025  |  
|                                                     |  |                                         |         |   |                                      |   |     
|Cash flows from financing activities:                |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|Proceeds from long-term debt                         |  |                                         | 600     |   |                                      |   |     |                                |  |   | 5,550            |   |  |                                | 5,550   |   |                      |   |       |              |  |   | (6,150  | ) |  |   |        |  
|Principal payments of long-term debt                 |  |                                         | (13,612 | ) |                                      |   | (14  | )                              |  |   | (25,789          | ) |  |                                | (25,803 | ) |                      |   |       |              |  |   | 25,674  |   |  |   | (13,741 | )
|                                                     |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) financing activities  |  |                                         | (13,012 | ) |                                      |   | (14  | )                              |  |   | (20,239          | ) |  |                                | (20,253 | ) |                      |   |       |              |  |   | 19,524  |   |  |   | (13,741 | )
|                                                     |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                                         | 46,439  |   |                                      |   | (66  | )                              |  |   | (3,144           | ) |  |                                | (3,210  | ) |                      |   | 3,906  |              |  |   |        |   |  |   | 47,135  |  
|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           |  | $                                       | 106,863 |   |                                      | $ | 845  |                                |  | $ | 377              |   |  | $                              | 1,222   |   |                      | $ | 36,243 |              |  | $ |        |   |  | $ | 144,328 |  
|                                                     |  |                                         |         |   |                                      |   |      |                                |  |   |                  |   |  |                                |         |   |                      |   |        |              |  |   |         |   |  |   |         |  



Condensed Consolidating Statement of
Cash Flows



|                                                     |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|---------------------------------------------------- |  | --------------------------------------- | ------ | - | ------------------------------------ | - | ------ | ------------------------------ |  | - | ---------------- | - |  | ------------------------------ | ------- | - | -------------------- | - | ------- | ------------ |  | - | ------- | - |  | - | ------ | -
|                                                     |  | Three-month period ended March 31, 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  |  | $                                       | (1,395 | ) |                                      | $ | 1,077  |                                |  | $ | 25,669           |   |  | $                              | 26,746  |   |                      | $ | (15,392 | )            |  | $ |        |   |  | $ | 9,959  |  
|                                                     |  |                                         |        |   |                                      |   |       
|Cash flows from investing activities:                |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|Payments for the purchase of equipment               |  |                                         | (52    | ) |                                      |   | (31    | )                              |  |   | (5,167           | ) |  |                                | (5,198  | ) |                      |   | (4,579  | )            |  |   |        |   |  |   | (9,829 | )
|Proceeds from maturities and sales of investments    |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |       |  
|Proceeds from the sale of assets                     |  |                                         |       |   |                                      |   | 350    |                                |  |   |                 |   |  |                                | 350     |   |                      |   |        |              |  |   |        |   |  |   | 350    |  
|Proceeds from restricted cash                        |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   | 11,035  |              |  |   |        |   |  |   | 11,035 |  
|Investments in unconsolidated affiliates             |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |       |  
|Disbursement of intercompany note                    |  |                                         | 19,254 |   |                                      |   | (3,565 | )                              |  |   |                 |   |  |                                | (3,565  | ) |                      |   |        |              |  |   | (15,689 | ) |  |   |       |  
|                                                     |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|Net cash provided by (used in) investing activities  |  |                                         | 19,202 |   |                                      |   | (3,246 | )                              |  |   | (5,167           | ) |  |                                | (8,413  | ) |                      |   | 6,456   |              |  |   | (15,689 | ) |  |   | 1,556  |  
|                                                     |  |                                         |        |   |                                      |   |       
|Cash flows from financing activities:                |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|Proceeds from long-term debt                         |  |                                         | 4,345  |   |                                      |   |       |                                |  |   | 12,000           |   |  |                                | 12,000  |   |                      |   |        |              |  |   | (16,345 | ) |  |   |       |  
|Proceeds from stock options exercised                |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |       |  
|Proceeds from promissory notes                       |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |       |  
|Principal payments of long-term debt                 |  |                                         | (833   | ) |                                      |   | (10    | )                              |  |   | (31,363          | ) |  |                                | (31,373 | ) |                      |   |        |              |  |   | 32,034  |   |  |   | (172   | )
|Debt issuance costs                                  |  |                                         |       |   |                                      |   |       |                                |  |   |                 |   |  |                                |        |   |                      |   |        |              |  |   |        |   |  |   |       |  
|                                                     |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|Net cash provided by (used in) financing activities  |  |                                         | 3,512  |   |                                      |   | (10    | )                              |  |   | (19,363          | ) |  |                                | (19,373 | ) |                      |   |        |              |  |   | 15,689  |   |  |   | (172   | )
|                                                     |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents |  |                                         | 21,319 |   |                                      |   | (2,179 | )                              |  |   | 1,139            |   |  |                                | (1,040  | ) |                      |   | (8,936  | )            |  |   |        |   |  |   | 11,343 |  
|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           |  | $                                       | 44,344 |   |                                      | $ | 426    |                                |  | $ | 2,486            |   |  | $                              | 2,912   |   |                      | $ | 26,072  |              |  | $ |        |   |  | $ | 73,328 |  
|                                                     |  |                                         |        |   |                                      |   |        |                                |  |   |                  |   |  |                                |         |   |                      |   |         |              |  |   |         |   |  |   |        |  



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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 Sprint PCS; (iii) our ability to expand our Sprint PCS network or to upgrade the Sprint PCS network to accommodate new technologies; (iv) limited operating history in the PCS market and anticipation of future losses; (v)
potential fluctuations in operating results; (vi) changes or advances in technology; (vii) changes in law or government regulation; (viii) competition in the industry and markets in which we operate; (ix) future acquisitions; (x) our ability to
attract and retain skilled personnel; (xi) our dependence on contractor and consultant services, network implementation and information technology support; (xii) our potential inability to expand the services and related products we provide in the
event of substantial increases in demand in excess of supply for network and handset equipment and related services and products; (xiii) the availability at acceptable terms of sufficient funds to pay for our business plans; (xiv) changes in labor,
equipment and capital costs; (xv) any inability to comply with the indentures that govern our senior notes or credit agreements; (xvi) changes in management; and (xvii) general economic and business conditions.



You should not rely too heavily on any forward-looking statement. We cannot assure you that
our forward-looking statements will prove to be correct. We have no obligation to update or revise publicly any forward-looking statement based on new information, future events or otherwise. 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 Sprint PCSs external auditors that were performed in accordance with AICPA Statement on Auditing Standards (SAS) No. 70.



Bad Debt Expense



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



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



Revenue Recognition



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



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



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



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value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable
than those projected by management, additional inventory write-downs may be necessary.



Accrued Commissions



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



Goodwill and Intangible Assets Impairment Analysis



We perform impairment tests of goodwill and indefinite lived assets as
required by Statements of Financial Accounting Standards 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 FAS 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, New York, New Hampshire, Vermont and portions of Massachusetts and Pennsylvania. We are a network partner of Sprint PCS, the personal
communications services group of Sprint Corporation. Sprint PCS, directly and through 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.



Liquidity and Capital Resources



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



US Unwired Liquidity



As of March 31, 2004, US Unwired had $108.1 million in cash and cash equivalents; availability under the US Unwired senior bank credit facility of $38.3 million; and
indebtedness that consisted of $62.4 million related to the US Unwired senior bank credit facility, $371.1 million related to the US Unwired senior subordinated discount notes and $10.4 million in capital leases, promissory notes and vendor
financing for a total of $443.9 million. See Note 6 for commitments and contingencies that may affect US Unwireds liquidity. US Unwired must comply with certain financial covenants of the US Unwired senior bank credit facility and the US
Unwired senior subordinated discount notes, and as of March 31, 2004, was in compliance with these financial covenants.



In February 2004, we consummated the sale of our cellular operations, which included certain cellular towers, for $21.5 million and recognized a gain of $16.2 million
that has been recorded as a gain on the



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disposal of discontinued operations. In March 2004, we sold 81 cellular and PCS cell site towers for $9.8 million.
Concurrent with the sale, we entered into operating leases for a portion of the antenna space on the sold towers from the buyer for an initial term of 10 years, renewable at the option of the Company for two additional ten-year terms at an initial
rental of $1.4 million per year, increasing each year by 4% of the previous years rental. We recorded a deferred gain of approximately $1.8 million that will be recognized ratably over the initial 10-year term of the operating lease. Also
during the three-month period ended March 31, 2004, we divested of other non-core assets including certain PCS licenses and a minority interest in an unconsolidated affiliate for $10.3 million and recorded a loss of $.5 million. We used $11.0
million of the $41.6 million in proceeds to partially repay the US Unwired senior bank credit facility. The accompanying consolidated financial statements reflect our cellular operations as a discontinued operation.



IWO Liquidity



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



As of March 31, 2004, IWO had $36.2
million in cash and cash equivalents and $8.2 million in restricted cash set aside for the IWO senior bank credit facility; and indebtedness that consisted of $213.2 million related to the IWO senior bank credit facility and $138.9 million related
to the IWO senior notes for a total of $352.1 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.



In March 2004, IWO failed to make the initial $2.3 million
principal payment on the IWO senior credit facility and since March 2003, has failed to make $14.2 million in interest payments on the IWO senior bank credit facility. IWO was not in compliance with its restrictive covenants under the IWO senior
bank credit facility at March 31, 2004. As a result of IWOs failure to make scheduled principal and interest payments and the covenant violations, IWO was in default of the IWO senior bank credit facility at March 31, 2004 and the holders of
the senior bank credit facility have denied IWO access to the remaining $25.2 million of availability. As a result, we have classified all outstanding indebtedness of both the IWO senior bank credit facility and the IWO senior notes as a current
liability.



As a result of liquidity challenges, IWO has made the decision to
reduce capital expenditures for network expansion. Included are cell sites that IWO is required to construct to meet the build out requirements under the IWO Sprint management agreement. Failure to complete the build out 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 March 31, 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 $11.1 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 bank credit facility place IWO in default, US Unwireds relationship with IWO may change and several alternatives exist ranging from working for the holders of the IWO senior bank credit
facility and the holders of the IWO senior notes as a manager of the IWO territory, possibly subject to the approval by Sprint PCS, to no involvement with IWO at all.



Considering IWOs default of the IWO loan agreements and its liquidity as discussed above, there is substantial doubt about IWOs
ability to continue as a going concern and our ability to sustain IWO operations through the end of 2004.



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Cash Flows



Net cash provided by operating activities during the three-month period ended March 31, 2004 was $12.9 million. Net cash provided by
investing activities during the three-month period ended March 31, 2004, was $48.0 million and included $11.2 million in proceeds of restricted cash that was set aside for repayment of the IWO senior notes, $41.6 million in proceeds from the sale of
assets as discussed above and $500,000 in distributions from unconsolidated affiliates offset by $5.2 million for capital expenditures. Cash used in financing activities during the three-month period ended March 31, 2004 was $13.7 million and
represented principal repayment of long-term debt, primarily our US Unwired senior bank credit facility.



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 March 31, |        
|                                    |  | 2004                               |         |   | 2003 |  
|Subscribers                         |  |                                    |         |   |      |   |         |  
|Gross Additions                     |  |                                    | 101,702 |   |      |   | 93,118  |  
|Net Additions                       |  |                                    | 37,787  |   |      |   | 25,623  |  
|Total Customers                     |  |                                    | 651,347 |   |      |   | 584,190 |  
|Churn                               |  |                                    | 3.1     | % |      |   | 3.7     | %
|                                    |  |                                   
|Reseller subscribers                |  |                                    | 116,786 |   |      |   | 22,812  |  
|                                    |  |                                   
|Average Revenue Per User, Monthly   |  |                                    |         |   |      |   |         |  
|Including Roaming                   |  | $                                  | 70.03   |   |      | $ | 68.81   |  
|Without Roaming                     |  | $                                  | 53.64   |   |      | $ | 53.29   |  
|                                    |  |                                   
|Cost per Gross Add                  |  | $                                  | 281     |   |      | $ | 309     |  
|                                    |  |                                   
|Average Monthly MOUs Per Subscriber |  |                                    |         |   |      |   |         |  
|Home                                |  |                                    | 583     |   |      |   | 516     |  
|Roaming Off Our Network             |  |                                    | 213     |   |      |   | 158     |  
|                                    |  |                                   
|System MOUs (Millions)              |  |                                    |         |   |      |   |         |  
|Subscriber                          |  |                                    | 1,106   |   |      |   | 885     |  
|Roaming                             |  |                                    | 570     |   |      |   | 352     |  
|                                    |  |                                   
|Licensed POPs (Millions)            |  |                                    | 17.6    |   |      |   | 17.6    |  
|Covered POPs (Millions)             |  |                                    | 12.8    |   |      |   | 12.7    |  
|Towers (Owned and Leased)           |  |                                    | 1,894   |   |      |   | 1,831   |  



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Subscribers



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



The number of gross and net additions increased for the three-month period ended March 31,
2004 as compared to the three month period ended March 31, 2003 primarily as a result of our continuing marketing efforts to target subscribers in good credit standing and efforts to redirect customers with challenged credit standing to our pre-pay
or pay as you go service.



Churn



Churn is the monthly rate of customer turnover expressed as a percentage of our overall
average customers for the reporting period. Customer turnover includes both customers that elected voluntarily to not continue using our service and customers that were involuntarily terminated from using our service because of non-payment. Churn is
calculated by dividing the sum of (i) the number of customers that discontinue service; (ii) less those customers discontinuing their service within 30 days of their original activation date; (iii) adding back those customers that reactivate their
service, by our overall average customers for the reporting period; and, (iv) dividing by the number of months in the period. The decrease in churn for the three-month period ended March 31, 2004 as compared to the three-month period ended March 31,
2003 was primarily as a result of the our efforts to attract and retain subscribers in good credit standing.



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 $0.058per minute in 2003. For the three-month period ended March 31, 2004, the reduction in the travel rate has resulted in a $8.3 million decrease to our revenues, a $7.7 million decrease to our expenses and a reduction to our cash
flow of $.6 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 increase in ARPU including roaming for
the three-month period ended March 31, 2004 as compared to the three-month period ended March 31, 2003 was primarily as a result of an increase in data usage by our subscribers and a volume increase in voice and data roaming by Sprint and reseller
subscribers using our network that was partially offset by a decrease in revenues related to minutes over plan and a decrease in the reciprocal travel rate as discussed above. The increase in ARPU excluding roaming for the three-month period ended
March 31,



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##### Table of Contents

2004 compared to the three-month period ended March 31, 2003 was primarily related to an increase in data usage offset by
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-month period ended March 31, 2004 as compared to the three-month period ended March 31, 2003 primarily as a result of higher market penetration.



Cost per Gross Addition



Cost per gross addition (CPGA) summarizes the average cost to acquire new
customers during the reporting period. CPGA is computed by adding selling and marketing expenses and cost of equipment and reducing the amount by the revenue from handset and accessory sales. The net amount is divided by the number of total new
subscribers added for the period. The decrease in CPGA for the three-month period ended March 31, 2004 as compared to the three-month period ended March 31, 2003 was primarily as a result of an overall decrease in selling and marketing expenses as
explained 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.



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Three-Month Period Ended March 31, 2004 Compared to the Three-Month Period Ended March
31, 2003



Revenues



|                    |  |                                   |         |      |   |        
|------------------- |  | --------------------------------- | ------- | ---- | - | -------
|                    |  | Three-month periodended March 31,
|                    |  | 2004                              |         | 2003
|                    |  | (In thousands)                   
|Subscriber revenues |  | $                                 | 101,781 |      | $ | 91,348 
|Roaming revenues    |  |                                   | 31,083  |      |   | 26,607 
|Merchandise sales   |  |                                   | 8,324   |      |   | 6,186  
|Other revenues      |  |                                   | 423     |      |   | 589    
|                    |  |                                   |         |      |   |        
|Total revenues      |  | $                                 | 141,611 |      | $ | 124,730
|                    |  |                                   |         |      |   |        



Subscriber revenues



Total subscriber revenues were $101.8 million
for the three-month period ended March 31, 2004 as compared to $91.3 million for the three-month period ended March 31, 2003, representing an increase of $10.5 million and was primarily as a result of an increase in subscribers as discussed in
Subscriber Additions above.



Roaming revenues



Roaming revenues were $31.1 million for the three-month period ended March
31, 2004 as compared to $26.6 million for the three-month period ended March 31, 2003, representing an increase of $4.5 million and was primarily as a result of an increase of $9.3 million related to a higher volume of PCS subscribers traveling
though our service area, an increase of $1.9 million related to data travel and an increase of $1.5 million related to other network usage including resellers offset by a decrease of $8.3 million related to our decrease in the reciprocal roaming
rate as discussed in Subscriber and Roaming Revenue above. We provided service in 68 PCS markets at March 31, 2004 and March 31, 2003. We continue to add cell sites in locations that we believe will enhance service and increase roaming revenue.



Merchandise sales



Merchandise sales were $8.3 million for the three-month period ended March 31, 2004 as
compared to $6.2 million for the three-month period ended March 31, 2003, representing an increase of $2.1 million. The increase is primarily as a result of an increase in sales to new subscribers, no longer discounting handset sales to local agents
and our July 1, 2003 adoption of EITF 00-21 as discussed in Note 1 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.



Operating Expenses



|                             |  |                                   |         |      |   |        
|---------------------------- |  | --------------------------------- | ------- | ---- | - | -------
|                             |  | Three-month periodended March 31,
|                             |  | 2004                              |         | 2003
|                             |  | (In thousands)                   
|Cost of service              |  | $                                 | 68,762  |      | $ | 77,281 
|Merchandise cost of sales    |  |                                   | 14,285  |      |   | 9,185  
|General & administrative     |  |                                   | 7,927   |      |   | 7,260  
|Sales & marketing            |  |                                   | 22,589  |      |   | 25,844 
|Non-cash stock compensation  |  |                                   | 45      |      |   | 986    
|Depreciation & amortization  |  |                                   | 29,400  |      |   | 29,658 
|IWO asset abandonment charge |  |                                   |        |      |   | 12,403 
|                             |  |                                   |         |      |   |        
|Total operating expenses     |  | $                                 | 143,008 |      | $ | 162,617
|                             |  |                                   |         |      |   |        



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##### Table of Contents

Cost of service



Cost of service was $68.8 million for the three-month period ended March 31, 2004 as compared to $77.3 million for the three-month period
ended March 31, 2003, representing a decrease of $8.5 million. Decreases primarily related to a $4.5 million reduction in bad debt expense that included a $1.3 million Sprint PCS settlement related to accounts previously written off, a $5.5 million
true-up of 2003 Sprint PCS service bureau fees, an overall reduction in certain Sprint PCS service bureau fees of $.8 million and $.9 million related to circuit and usage rate reductions. This was offset by increases primarily related to $1.3
million in higher data travel volume, $1.3 million in our Sprint PCS franchise fee as a result of our increased revenues and a $.6 million Sprint PCS settlement for certain feature expenses.



Merchandise cost of sales



Merchandise cost of sales was $14.3 million for the three-month period ended March 31, 2004
as compared to $9.2 million for the three-month period ended March 31, 2003, representing an increase of $5.1 million that was primarily as a result of the increase in sales to new subscribers 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.



General and administrative expenses



General and administrative expenses were $7.9 million for the three-month period ended March 31, 2004 as compared to $7.3 million for the three-month period ended March
31, 2003, representing an increase of $.6 million that was primarily as a result of a $.5 million increase in outside legal fees related to our Sprint PCS lawsuit and IWO related restructuring expense.



Sales and marketing expenses



Sales and marketing expenses were $22.6 million for the three-month period ended March 31,
2004 as compared to $25.8 million for the three-month period ended March 31, 2003, representing a decrease of $3.2 million that primarily as a result of a decrease in advertising of $2.2 million and a decrease in wages, taxes and benefits of $2.0
million related to store closings and other initiatives offset by an increase in independent agent commissions related to new customer additions of $1.0 million.



Non-cash stock compensation



Non-cash compensation was $45,000 for the three-month period ended March 31, 2004 as compared to $1.0 million for the three-month period
ended March 31, 2003, representing a decrease of approximately $950,000. 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 comparable at $29.4 million for the three-months period ended March 31, 2004 million as compared to $29.7 million for the
three-month period ended March 31, 2003.



Asset Abandonment Charge



In the three-month period ended March 31,
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.



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Other Income/(Expense)



|                              |  |                                    |         |   |      |   |         |  
|----------------------------- |  | ---------------------------------- | ------- | - | ---- | - | ------- | -
|                              |  | Three-month period ended March 31, |        
|                              |  | 2004                               |         |   | 2003 |  
|                              |  | ( In thousands)                    |        
|Interest expense              |  | $                                  | (24,836 | ) |      | $ | (21,313 | )
|Interest income               |  |                                    | 316     |   |      |   | 623     |  
|(Loss) gain on sale of assets |  |                                    | (495    | ) |      |   | 2       |  
|                              |  |                                    |         |   |      |   |         |  
|Total other expense           |  | $                                  | (25,015 | ) |      | $ | (20,688 | )
|                              |  |                                    |         |   |      |   |         |  



Interest expense was $24.8 million for
the three-month period ended March 31, 2004 as compared to $21.3 million for the three-month period ended March 31, 2003, representing an increase of $3.5 million and is primarily the result of interest expense related to our IWO senior bank credit
facility. All loans under the IWO senior bank credit facility, effective with the date of the default as discussed in Note 5 above, bear interest at a rate of 4.25-4.75 percent above the agent banks prime rate.



Interest income was $.3 million for the three-month period ended March 31, 2004 as compared
to $.6 million for the three-month period ended March 31, 2003, representing a decrease of $.3 million. The decrease was primarily as a result of less cash and cash equivalents available for investment.



Loss on sale of assets



As discussed above, during the three-month period ended March 31, 2004, we sold various
non-core assets including PCS licenses, towers, a minority interest in an unconsolidated affiliate and vehicles for approximately $19.9 million and recognized a $.5 million loss on these transactions in the current period and, as discussed above, a
deferred gain of $1.8 million.



Discontinued
operations



Our discontinued operations reflect the operating results of our
cellular properties. As discussed above, during the three-month period ended March 31, 2004, we sold our cellular operations including cell site towers and cellular licenses for approximately $21.5 million and recognized a $16.2 gain.



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 increase also 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 4. | Controls and Procedures
|------- | -----------------------



As of March 31,
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 March 31, 2004. There have been no changes in the
Companys internal control over financial reporting during the fiscal quarter ended March 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



PART II



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



On July 11, 2003, the
Company and two of its subsidiaries, Louisiana Unwired LLC and Texas Unwired (the Company), filed suit in U.S. District Court for the Western District of Louisiana, against Sprint Corporation, Sprint Spectrum, L.P., Wireless, L.P. and
Sprintcom, Inc. (collectively, Sprint) and on



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##### Table of Contents

September 25, 2003, the Company 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. 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 the
Company to hire an outside accounting company or other expert to monitor monies received by Sprint, and agreed with the Companys position that certain claims are subject to trial by jury in Louisiana. On March 8, 2004, the Company 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 the
Companys Second Amended Complaint, which included a claim that the Company owed Sprint approximately $16.3 million related to contractual disputes between the parties. On March 25, 2004, the Company filed Plaintiffs Application to
Appoint an Outside Accounting Company or Other Expert to Contemporaneously Monitor Monies Paid to Sprint From US Unwired Affiliate Customers. Sprint has filed an objection to the Companys application. The Company anticipates that the Court
will rule on its application in the coming weeks. The Company and Sprint also have submitted to the Court an agreed upon schedule to complete the discovery process during 2004 and the Company anticipates an early 2005 trial date. The Company does
not believe that a negative outcome on Sprints counterclaim will have a material adverse effect on the Company.



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



In
March 2004, Independent Wireless One Corporation, a wholly owned subsidiary of IWO, failed to make the initial $2.3 million principal payment and since March 31, 2003 has failed to make $14.2 million in interest payments on its amended and restated
secured credit facility (the IWO senior bank credit facility) under which it may borrow up to $240 million in the aggregate consisting of up to $70 million in revolving loans and $170 million in term loans and was not in compliance with
its restrictive covenants. As a result of the failure to make scheduled principal and interest payments and the covenant violations, the Company was in default of the IWO senior bank credit facility at March 31, 2004.



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



a. Exhibits



(a) The following
exhibits are filed as part of this report:



|          |  |                                                                                                                                                                                                                                                                                                                                                                                                     
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          | 
|(3)(i)    |  | Third Restated Articles of Incorporation of US Unwired Inc. (Incorporated by reference to Exhibit 3.1 of Form 10-Q filed by the Registrant on May 9, 2002)                                                                                                                                                                                                                                          
|          | 
|3(ii)     |  | By-laws of US Unwired Inc. as Amended on April 29, 2003 (Incorporated by reference to Exhibit 4.i.a filed with the registrants Quarterly Report on Form 10-Q filed by the Registrant on
November13, 2002)                                                                                                                                                                                          
|          | 
|(4)(i)(a) |  | Amended and Restated Agreement Credit Agreement dated March 8, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit 4.1 of Form 8-K filed by the Registrant on March
21, 2002)                                                                                                                                                                                           
|          | 
|(4)(i)(b) |  | Waiver and Amendment dated May 1, 2002 to the Amended and Restated Agreement Credit Agreement dated March 8, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit
4.i.b. of Form 10-Q filed by the Registrant on August 14, 2002)                                                                                                                                        
|          | 
|(4)(i)(c) |  | Second Agreement Regarding Amendments to Loan Documents dated June 6, 2002 between US Unwired Inc. and lenders. (Incorporated by reference to Exhibit 4.i.c. of Form 10-Q filed by the
Registrant on May 9, 2002)                                                                                                                                                                                   
|          | 
|(4)(i)(d) |  | Third Amendment to Credit Agreement dated October 30, 2003 between US Unwired, Inc. and lenders. (Incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Registrant on October 31,
2003)                                                                                                                                                                                                
|          | 
|(4)(i)(e) |  | 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. of Form 10-Q filed by the Registrant on August 14, 2002)



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|          |  |                                                                                                                                                                                                                                                                                       
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|          | 
|(4)(i)(f) |  | Registration Rights Agreement, dated April 1, 2002, by and among Issuer, Northeast Unwired Inc. and IWO Holdings Inc. for certain registration rights of US Unwired common stock (Incorporated
by reference to Exhibit 4.i.e. of Form 10-Q filed by the Registrant on August 14, 2002)
|          | 
|(31.1)    |  | Certification by President and Chief Executive Officer                                                                                                                                                                                                                                
|          | 
|(31.2)    |  | Certification by Chief Financial Officer                                                                                                                                                                                                                                              
|          | 
|(32.1)    |  | Certification by President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                      
|          | 
|(32.2)    |  | Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                    



-



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 February 9, 2004, we filed a Current
Report on Form 8-K containing an Opinion and Order of the US District Court for the State of Louisiana (US District Court) dated February 3, 2004 and a press release announcing that the US District Court had denied in all
respects Sprint Corporations request to dismiss US Unwired lawsuit.



On March 2, 2004, we filed a Current Report on Form 8-K containing a press release announcing the Companys earnings for the fiscal quarter and year ended December 31, 2003.



On March 3, 2004, we filed a Current Report on Form 8-K containing a
transcript of our March 3, 2004 conference call discussing the Companys earnings for the fiscal quarter and year ended December 31, 2003.



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.



|            |  |  |  |     |  |                                         |  | 
|----------- |  |  |  | --- |  | --------------------------------------- |  | 
|May 3, 2004 |  |  |  |     |  | US UNWIRED INC.                        
|            |  |  | 
|            |  |  |  | By: |  | /s/ Jerry E. Vaughn                    
|            |  |  |  |     |  | Jerry E. Vaughn Chief Financial Officer



28