<PAGE>

                                  UNITED STATES
                                  -------------
                       SECURITIES AND EXCHANGE COMMISSION
                       ----------------------------------
                             WASHINGTON, D.C. 20549
                             ----------------------

                                   -----------
                                   FORM 10-Q/A
                                   -----------
                                (Amendment No. 2)
                                -----------------
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                ------------------------------------------------
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     --------------------------------------
                                ----------------
       For the quarter ended: September 30, 2000    Commission File: 0-16751

                                   NTELOS Inc.
                                   -----------
             (Exact name of Registrant as specified in its Charter)


          Virginia                                          54-1443350
 (State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification Number)


                                  P.O. Box 1990
                                  -------------
                           Waynesboro, Virginia 22980
                           --------------------------
           (Address of principal executive office, including zip code)


Registrant's telephone number, including area code         540-946-3500
                                                         ---------------

                       Formerly CFW Communications Company
                       -----------------------------------
            (Former name, former address and former fiscal year, if
                           changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes    x       No  ____
   --------

                     (APPLICABLE ONLY TO CORPORATE ISSUERS)

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Class Common Stock, no par value

Outstanding on November 14, 2000 was 13,129,653.

<PAGE>

                                EXPLANATORY NOTE
                                ----------------
This Amendment No. 2 to the Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2000 is being filed in order to reverse the
impairment charge recorded during the quarter ended September 30, 2000
associated with certain switching equipment planned for early disposition. This
asset impairment charge was recorded for $5.6 million ($3.4 million after tax)
and this restatement is issued to reverse this charge and record additional
depreciation of $1.4 million. For additional details regarding this issue and a
summary of the financial statement impact, see Note 1 to the condensed,
consolidated financial statements.


                                       2

<PAGE>

                                   NTELOS INC.


                                      INDEX

                                                                          Page
                                                                         Number
                                                                         ------

PART I. FINANCIAL INFORMATION

        Condensed Consolidated Balance Sheets, September 30, 2000 and
        December 31, 1999                                                   4-5


        Condensed Consolidated Statements of Income, Three and Nine
        Months Ended September 30, 2000 and 1999                              6


        Condensed Consolidated Statements of Cash Flows Nine Months
        Ended September 30, 2000 and 1999                                     7


        Condensed Consolidated Statements of Shareholders' Equity,
        Three and Nine Months Ended September 30, 2000 and 1999               8


        Notes to Condensed Consolidated Financial Statements               9-17


        Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                         18-27

        Signature                                                            28


                                       3

<PAGE>

                                   NTELOS INC.

                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                                     September 30,
                                                                                         2000
                                                                                    (Unaudited and           December 31,
                                                                                       Restated)                 1999
                                                                                  --------------------   ---------------------
<S>                                                                               <C>                    <C>
ASSETS

Current Assets
  Cash and cash equivalents                                                       $        39,318,550    $           198,240
  Accounts receivable, net of allowance of $5.2 million ($1.1 million in 1999)             25,492,585             12,212,886
  Materials and supplies                                                                    5,552,622                955,381
  Prepaid expenses and other                                                                2,807,669                572,339
  Income tax receivable                                                                       417,134              1,999,715
  Directory assistance assets                                                                       -              8,023,326
                                                                                  --------------------   ---------------------

                                                                                           73,588,560             23,961,887
                                                                                  --------------------   ---------------------
Investments and Advances
  Advance to affiliates                                                                    57,629,800              3,824,585
  Securities and investments                                                               24,829,596             39,109,476
  Restricted cash                                                                          70,258,938                      -

Property and Equipment
  Land and building                                                                        26,416,750             23,526,095
  Network plant and equipment                                                             274,823,877            100,938,828
  Furniture, fixtures, and other equipment                                                 33,147,064             26,158,859
  Radio spectrum licenses                                                                 383,949,680             15,478,079
                                                                                  --------------------   ---------------------
     Total in service                                                                     718,337,371            166,101,861
  Under construction                                                                       37,797,388              9,124,046
                                                                                  --------------------   ---------------------

                                                                                          756,134,759            175,225,907
  Less accumulated depreciation                                                            72,543,795             55,756,282
                                                                                  --------------------   ---------------------

                                                                                          683,590,964            119,469,625
                                                                                  --------------------   ---------------------
Other Assets

  Goodwill and other intangibles, net of accumulated amortization of $5.6
     million ($2.4 million in 1999)                                                       135,302,646             23,411,894
  Deferred charges                                                                         21,081,717                359,294
  Radio spectrum licenses and license deposits                                              7,864,963              7,864,836
                                                                                  --------------------   ---------------------

                                                                                          164,249,326             31,636,024
                                                                                  --------------------   ---------------------

                                                                                  $     1,074,147,184    $       218,001,597
                                                                                  ====================   =====================
</TABLE>


See Notes to Condensed Consolidated Financial Statements

                                       4

<PAGE>

                           CFW COMMUNCICATIONS COMPANY

                      Condensed Consolidated Balance Sheets

                                          September 30, 2000
                                              (Unaudited)
                                              (Restated)      December 31, 1999
                                          ------------------  ------------------
Liabilities and Shareholders' Equity

Current Liabilities
  Accounts payable                        $   35,742,925      $  9,552,592
  Customers' deposits                          2,912,379           448,995
  Advance billings                             4,821,476         2,677,044
  Accrued payroll                              1,975,879         1,030,413
  Accrued interest                             9,473,321           280,151
  Other accrued liabilities                    9,844,423         1,617,206
  Deferred revenue                             4,985,108         1,835,694
  Directory assistance liabilities                     -         2,293,799
                                          ------------------  ------------------

                                              69,755,511        19,735,894
                                          ------------------  ------------------

Long-Term Debt                               526,463,138        37,684,783
                                          ------------------  ------------------

Long-term Liabilities
  Deferred income taxes                       48,318,341        31,077,684
  Retirement benefits                         11,862,833        10,741,020
  Other                                       12,703,685           797,175
                                          ------------------  ------------------

                                              72,884,859        42,615,879
                                          ------------------  ------------------

Minority Interests                             1,258,439         1,781,241
                                          ------------------  ------------------

Redeemable and Convertible, Redeemable
  Preferred stock                            244,423,499                 -
                                          ------------------  ------------------

Commitments

Shareholders' Equity
  Common stock, no par                        45,038,404        43,943,136
  Stock warrants                              22,873,680                 -
  Retained earnings                           80,980,339        50,385,117
  Unrealized gain on securities available
   for sale, net                              10,469,315        21,855,547
                                          ------------------  ------------------

                                             159,361,738       116,183,800
                                          ------------------  ------------------

                                          $1,074,147,184      $218,001,597
                                          ==================  ==================

See Notes to Condensed Consolidated Financial Statements.

                                       5

<PAGE>

                                   NTELOS INC.
                   Condensed Consolidated Statements Of Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended                    Nine Months Ended
                                                            ---------------------------------    ---------------------------------
                                                             September 30,     September 30,       September 30,     September 30,
                                                                 2000               1999               2000
                                                              (Restated)                            (Restated)            1999
                                                            --------------    ---------------    --------------     --------------
<S>                                                         <C>               <C>                <C>                <C>
Operating Revenues
  Wireline communications                                   $   15,287,209    $    11,378,606    $   43,859,715     $   31,380,122
  Wireless communications                                       17,460,975          5,623,540        29,158,797         16,095,078
  Other communications services                                    675,730          1,107,630         2,533,587          3,164,590
                                                            --------------    ---------------    --------------     --------------

                                                                33,423,914         18,109,776        75,552,099         50,639,790
                                                            --------------    ---------------    --------------     --------------

Operating Expenses
  Cost of Wireless Sales (Exclusive of Items Shown
  Separately Below)                                              5,830,494          2,023,212        10,687,541          5,512,961
  Maintenance and support                                        8,800,746          4,045,771        20,487,796         10,181,811
  Depreciation and amortization                                 13,629,949          2,887,913        20,381,316          8,086,082
  Asset write-down and impairment charges                                -          2,713,221                 -          2,713,221
  Customer operations                                           10,978,067          2,870,465        18,369,006          8,311,927
  Corporate operations                                           3,362,407          2,096,037         7,520,627          5,163,161
                                                            --------------    ---------------    --------------    ---------------

                                                                42,601,663         16,636,619        77,446,286         39,969,163
                                                            --------------    ---------------    --------------     --------------

Operating Income (Loss)                                         (9,177,749)         1,473,157        (1,894,187)        10,670,627

Other Income (Expenses)
  Equity loss from PCS investees
     VA PCS Alliances                                             (840,531)        (1,297,807)       (3,679,095)        (4,135,859)
     WV PCS Alliances                                           (1,933,520)        (1,403,377)       (5,750,428)        (3,834,606)
  Equity income from other wireless investees                       12,036             45,665           110,665            133,431
  Gain on sale of assets                                        62,633,282          8,366,378        62,633,282          8,366,378
  Other financing costs                                         (6,275,625)                 -        (6,275,625)                 -
  Interest expense                                             (12,278,436)          (399,745)      (13,748,241)        (1,076,261)
  Other income, principally interest                             3,039,371             63,128         3,499,201            193,957
                                                            --------------    ---------------    --------------     --------------

                                                                35,178,828          6,847,399        34,895,572         10,317,667

Income Taxes                                                    14,004,111          2,274,000        13,916,797          3,470,237
                                                            --------------    ---------------    --------------     --------------

                                                                21,174,717          4,573,399        20,978,775          6,847,430

Minority Interests                                                       -           (122,586)          105,092           (341,144)
                                                            --------------    ---------------    --------------     --------------

Income from continuing operations                               21,174,717          4,450,813        20,873,683          6,506,286

Discontinued operations
  Income (loss) from discontinued operations, net of tax          (290,545)           (73,388)          396,160            505,973
  Gain on sale of discontinued operations, net of tax           16,496,984                  -        16,496,984                  -
                                                            --------------    ---------------    --------------     --------------

Net Income                                                      37,381,156          4,377,425        37,766,827          7,012,259

Dividend requirements on preferred stock                         5,670,371                  -         5,670,371                  -
                                                            --------------    ---------------    --------------     --------------
Net Income applicable to common shares                      $   31,710,785    $     4,377,425    $   32,096,456     $    7,012,259
==================================================================================================================================

Basic earnings (loss) per common share:

Continuing operations                                       $         1.18    $          0.34    $         1.16     $         0.50
Discontinued operations                                               1.23              (0.01)             1.29               0.04
Basic earnings per common share                             $         2.41    $          0.33    $         2.45     $         0.54

Diluted earnings (loss) per common share:
Continuing operations                                       $         1.15    $          0.34    $         1.14     $         0.50
Discontinued operations                                               1.20              (0.01)             1.26               0.04
Diluted earnings per common share                           $         2.35    $          0.33    $         2.40     $         0.54

Average shares outstanding - basic                              13,127,996         13,050,090        13,098,652         13,037,438
Average shares outstanding - diluted                            13,516,271         13,110,152        13,359,373         13,093,342

Cash dividends per common share                             $            -    $       0.11475    $      0.11475     $      0.34425
                                                            ======================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       6

<PAGE>

                                   NTELOS INC.
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                Nine Months Ended
                                                                                September 30, 2000            September 30, 1999
                                                                                     (Restated)
                                                                               ---------------------         --------------------
<S>                                                                            <C>                           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                     $          37,766,827         $          7,012,259
Deduct income from discontinued operations                                                  (396,160)                    (505,973)
Deduct gain on sale of discontinued operations                                           (16,496,984)                           -
                                                                               ---------------------         --------------------
Income from continuing operations                                                         20,873,683                    6,506,286
Adjustments to reconcile net income to net cash provided by operating
   activities:
   Gain on disposition of assets and investments                                         (62,633,282)                  (8,317,646)
   Asset write-down and impairment charges                                                         -                    2,713,221
   Depreciation                                                                           17,826,457                    7,402,254
   Amortization                                                                            2,554,859                      683,828
   Deferred taxes                                                                         24,489,828                    2,476,388
   Retirement benefits                                                                     1,121,813                       33,919
   Other                                                                                   2,003,852                      895,248
   Equity loss from PCS Alliances                                                          9,427,897                    7,837,034
   Minority interests, net of distributions                                                 (522,802)                      37,187
   Other equity gains from investees                                                        (576,591)                           -
Changes in assets and liabilities from operations, net of effects of
   acquisitions and dispositions:
   (Increase) decrease in accounts receivable                                             (7,443,175)                     135,258
   (Increase) decrease in materials and supplies                                             179,612                   (2,009,988)
   Increase in other current assets                                                         (503,115)                    (703,743)
   Changes in income taxes                                                                (9,495,088)                   1,171,380
   Increase (decrease) in accounts payable                                                 5,668,949                     (992,849)
   Increase (decrease) in other accrued liabilities                                        6,504,530                     (284,164)
   Increase in other current liabilities                                                   4,081,369                      273,352
                                                                               ---------------------         --------------------
Net cash provided by continuing operations                                                13,558,796                   17,856,965
Net cash used by discontinued operations                                                    (543,885)                  (2,891,456)
                                                                               ---------------------         --------------------
Net cash provided by operating activities                                                 13,014,911                   14,965,509

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                                                      (34,152,541)                 (21,433,647)
Cash payment on purchase of PrimeCo VA                                                  (408,643,570)                           -
Investments in restricted cash                                                           (70,258,938)                           -
Proceeds from sale of discontinued operation                                              31,744,225                            -
Purchase of minority interest in cellular partnership                                    (10,745,236)                           -
Investments in PCS Alliances                                                             (15,292,138)                  (3,892,138)
Repayments from (advances to) PCS Alliances                                              (53,805,215)                   4,543,519
Proceeds from sale of tower and investments                                                3,200,000                    9,463,434
Purchase of PCS licenses, net of minority interest                                                 -                   (1,349,898)
Acquisition of internet company and subscribers                                           (1,364,376)                  (7,497,652)
Purchase of investments                                                                   (5,000,000)                           -
Other                                                                                        381,295                      130,954
                                                                               ---------------------         --------------------
Net cash used in investing activities                                                   (563,936,494)                 (20,035,428)
                                                                               ---------------------         --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends on common shares                                                           (1,501,234)                  (4,492,029)
Payments on senior notes                                                                 (12,727,272)                  (3,636,364)
Payment of debt financing closing costs                                                  (17,721,607)                           -
Proceeds from issuance of preferred stock and warrants                                   242,538,128                            -
Proceeds from issuance of long-term debt                                                 520,458,884                            -
Payoff of VA PCS Alliance long-term debt                                                (118,570,274)                           -
Additional borrowing (payments) under lines of credit, net                               (23,530,000)                  12,893,056
Net proceeds from exercise of stock options                                                1,095,268                      362,634
                                                                               ---------------------         --------------------
Net cash provided by financing activities                                                590,041,893                    5,127,297
                                                                               ---------------------         --------------------
Decrease in cash and cash equivalents                                                     39,120,310                       57,378
Cash and cash equivalents:
Beginning                                                                                    198,240                       42,590
                                                                               ---------------------         --------------------

Ending                                                                         $          39,318,550         $             99,968
                                                                               =====================         ====================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       7

<PAGE>
                                   NTELOS INC.

                 Consolidated Statements of Shareholders' Equity
                            (Unaudited and Restated)

<TABLE>
<CAPTION>
                                                                                                         Accumulated
                                                                                                            Other         Total
                                                   Common Stock                          Retained       Comprehensive  Shareholders'
                                               Shares       Amount        Warrants       Earnings           Income        Equity
                                             ----------  ------------  -------------   ------------    --------------  -------------
<S>                                          <C>         <C>           <C>             <C>             <C>             <C>
     Balance, December 31, 1998              13,016,988  $ 43,527,636  $           -   $ 49,882,849    $          -    $ 93,410,485
     Comprehensive income:
        Net Income                                                                        1,339,726
        Unrealized gain on securities
          available for sale, net of $1.0
          million of deferred tax obligation                                                              1,580,294
        Comprehensive income                                                                                              2,920,020
     Cash dividends                                                                      (1,495,905)                     (1,495,905)
     Stock options exercised, net                19,428        75,022                                                        75,022
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, March 31, 1999                 13,036,416    43,602,658              -     49,726,670       1,580,294      94,909,622
     Comprehensive income:
        Net Income                                                                        1,295,108
        Unrealized gain on securities
          available for sale, net of $1.7
          million of deferred tax obligation                                                              2,719,995
        Comprehensive income                                                                                              4,015,103
     Cash dividends                                                                      (1,498,100)                     (1,498,100)
     Stock options exercised, net                 5,663        76,737                                                        76,737
                                             ----------  ------------  -------------   ------------    --------------  ------------
     Balance, June 30, 1999                  13,042,079    43,679,395              -     49,523,678       4,300,289      97,503,362
     Comprehensive income:
        Net Income                                                                        4,377,425
        Reversal of unrealized gain on
          securities sold, net of $2.6
          million of deferred tax obligation                                                             (4,300,289)
        Comprehensive income                                                                                                 77,136
     Cash dividends                                                                      (1,498,024)                     (1,498,024)
     Stock options exercised, net                11,000       210,875                                                       210,875
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, September 30, 1999             13,053,079    43,890,270              -     52,403,079               -      96,293,349
     Comprehensive income:
        Net Income                                                                         (519,601)
        Unrealized gain on securities
          available for sale, net of $14.0
          million of deferred tax obligation                                                             21,855,547
        Comprehensive income                                                                                             21,335,946
     Cash dividends                                                                      (1,498,361)                     (1,498,361)
     Stock options exercised, net                 7,307        52,866                                                        52,866
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, December 31, 1999              13,060,386    43,943,136              -     50,385,117      21,855,547     116,183,800
     Comprehensive income:
        Net Income                                                                           48,410
        Unrealized loss on securities
          available for sale, net of $1.0
          million of deferred tax benefit                                                                (2,409,118)
        Comprehensive income                                                                                             (2,360,708)
     Cash dividends                                                                      (1,501,234)                     (1,501,234)
     Stock options exercised, net                34,043       382,356                                                       382,356
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, March 31, 2000                 13,094,429    44,325,492              -     48,932,293      19,446,429     112,704,214
     Comprehensive income:
        Net Income                                                                          337,261
        Unrealized loss on securities
          available for sale, net of $0.4
          million of deferred tax benefit                                                                   685,514
        Comprehensive income                                                                                              1,022,775
     Stock options exercised, net                22,124       421,893                                                       421,893
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, June 30, 2000                  13,116,553    44,747,385              -     49,269,554      20,131,943     114,148,882
     Comprehensive income:
        Net Income                                                                       37,381,156
        Dividend requirements on preferred
          stock                                                                          (5,670,371)
        Unrealized loss on securities
          available for sale, net of $6.1
          million of deferred tax benefit                                                                (9,662,628)
        Comprehensive income                                                                                             22,048,157
     Issuance of warrants                                                 22,873,680                                     22,873,680
     Stock options exercised, net                13,100       291,019                                                       291,019
                                             ----------  ------------  -------------   ------------    ------------    ------------
     Balance, September 30, 2000             13,129,653  $ 45,038,404  $  22,873,680   $ 80,980,339    $ 10,469,315    $159,361,738
                                             ==========  ============  =============   ============    ============    ============
     Comprehensive income:
     For the nine months ended September
     30, 2000                                                                                                          $  7,012,258
                                                                                                                       ============
     For the nine months ended September
     30, 1999                                                                                                          $ 20,710,225
                                                                                                                       ============
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       8

<PAGE>
                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements

(1)  In the opinion of the Company, the accompanying condensed consolidated
     financial statements which are unaudited, except for the condensed
     consolidated balance sheet dated December 31, 1999, which is derived from
     audited financial statements, contain all adjustments (consisting of only
     normal recurring accruals) necessary to present fairly the financial
     position as of September 30, 2000 and December 31, 1999, the results of
     operations for the three and nine months ended September 30, 2000 and 1999
     and cash flows for the nine months ended September 30, 2000 and 1999. The
     results of operations for the three and nine months ended September 30,
     2000 and 1999 are not necessarily indicative of the results to be expected
     for the full year.

     Certain amounts on the prior year financial statements have been
     reclassified, with no effect on net income, to conform with classifications
     adopted in 2000. In prior periods, the Company reported wireless revenues
     net of cost of sales, primarily handsets. On June 1, 2000, the Company
     retroactively revised its reporting to no longer net the cost of sales for
     handsets and to present these amounts as a separate component of operating
     expenses. Operating revenues for wireless communications were increased by
     an identical amount. This revision was made because, in the opinion of
     management, it more appropriately reflects the revenues and costs of its
     wireless operations in accordance with industry practice.

     This Form 10Q-A is being filed to amend the previously reported Form 10Q
     for the fiscal period ended September 30, 2000. As a result of the PrimeCo
     VA acquisition and the planned R&B merger, both of which utilize Lucent
     switch equipment, the Company decided to convert to a uniform Lucent
     switching platform. Accordingly, the Company recognized a $5.6 million
     ($3.4 million after tax) write-down of existing equipment in the third
     quarter 2000. This represents a write-down to its estimated net realizable
     value with planned disposition at the end of the second quarter of 2001.
     This write-down was calculated using the held for disposal method under
     Statement of Financial Accounting Standards ("SFAS") No. 121. However, the
     Company continued to utilize this equipment within its business prior to
     its planned disposal date and did not have the ability to replace the
     assets at the time of write-down according to ability as discussed in
     "Staff Accounting Bulletin 100: Restructuring and Impairment Charges" (SAB
     100) since the replacement switch was not physically on site and
     operational at the time of the original writedown. SAB 100 is an
     interpretive guidance issued by the Securities and Exchange Commission to,
     among other things, clarify the appropriate timing of this type of
     write-down under SFAS No. 121. Therefore, this document is issued to
     restate the original Form 10-Q to reflect the reversal of the $5.6 million
     asset impairment charge and recognize $1.4 million in additional
     depreciation to reflect the planned replacement of this switching equipment
     by the end of the second quarter of 2001 (see Note 1 for a summary of the
     financial statement impact).

     The following is a summary of the effects this restatement has on the
     September 30, 2000 financial statements (amounts in 000's except Earnings
     Per Share):

<TABLE>
<CAPTION>
                                                             September 30, 2000
                                                      -------------------------------
      Excerpt from Condensed                                             Originally      Increase
      Consolidated Balance Sheet                        (Restated)        Reported      (decrease)
     ---------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>              <C>
      Network plant and equipment                      $ 274,824        $ 267,288        $ 7,536
      Less accumulated depreciation                       72,544           69,227          3,317
      Net property and equipment                         683,591          679,372          4,219
      Deferred income tax liability                       48,318           46,631          1,687
      Retained Earnings                                $  80,980        $  78,449        $ 2,531

<CAPTION>


                                                        Three Months Ended
                                                        September 30, 2000
      Excerpt from Condensed                                             Originally      Increase
      Consolidated Balance Sheet                        (Restated)        Reported      (decrease)
     ---------------------------------------------------------------------------------------------
<S>                                                       <C>              <C>             <C>
      Depreciation and amortization                    $  13,630        $  12,224        $ 1,406
      Asset impairment charge                                  -            5,625         (5,625)
      Operating loss                                      (9,178)         (13,397)         4,219
      Income taxes                                        14,004           12,317          1,687
      Income from continuing operations                   21,175           18,644          2,531
      Net income                                          37,381           34,850          2,531
      Income available to common shares                   31,711           29,180          2,531
      Income per share from continuing
        operations-basic                                    1.18             0.99           0.19
      Earnings per common share-basic                       2.41             2.22           0.19
      Income per share from continuing
        operations-diluted                                  1.15             0.96           0.19
      Earnings per common share-diluted                $    2.35        $    2.16        $  0.19

                                                        Nine Months Ended
                                                        September 30, 2000
</TABLE>

                                       9

<PAGE>
                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued
<TABLE>
<CAPTION>

        Excerpt from Condensed Consolidated                               Originally      Increase
        Statements of Income                              (Restated)       Reported      (decrease)
        ---------------------------------------------- ---------------- -------------- -------------
<S>                                                    <C>              <C>            <C>
        Depreciation and amortization                      $20,381           $18,975      $ 1,406
        Asset impairment charge                                  -             5,625       (5,625)
        Operating Loss                                      (1,894)           (6,113)       4,219
        Income taxes                                        13,917            12,230        1,687
        Income from continuing operations                   20,874            18,553        2,531
        Net income                                          37,767            35,446        2,531
        Income available to common shares                   32,096            29,775        2,531
        Income per share from continuing
          operations-basic                                    1.16              0.97         0.19
        Earnings per common share-basic                       2.45              2.26         0.19
        Income from continuing operations-diluted             1.14              0.95         0.19
        Earnings per common share-diluted                  $  2.40           $  2.21      $  0.19
</TABLE>

(2)     Prior to the third quarter transactions described in Notes 6,7,8 and 10,
        the Company had five primary business segments which have separable
        management focus and infrastructures and that offer different products
        and services. These segments are described in more detail in Note 2 of
        the Company's 1999 Annual Report to Shareholders. As a result of the
        third quarter transactions noted above, the Company has added a new
        segment referred to as Wireless PCS. This segment includes the digital
        PCS results of the Company's RSA 6 digital, VA East and VA PCS Alliance
        PCS operations. The Company's RSA 6 analog operations, which were
        disposed of in July 2000 (Note 7) and the Company's voicemail and paging
        operations, both of which previously were reported under a wireless
        segment, have been included in Other column. Summarized financial
        information concerning all reportable segments, as adjusted for all
        periods for the effect of the Company's discontinued operations (Note
        10), is shown in the following table.

<TABLE>
<CAPTION>
                                               Network &                 Wireless
(in thousands)                       Telephone   CLEC       Internet        PCS       Cable       Other        Total
---------------------------------------------------------------------------------------------------------------------
<S>                                  <C>      <C>          <C>           <C>         <C>       <C>         <C>
For the three months ended September 30, 2000 (Restated)
Revenues                             $ 8,059  $  2,681     $  4,147      $ 15,315    $   598   $  2,624    $   33,424
EBITDA                                 5,632        38          432        (2,770)       153        967         4,452
Depreciation & amortization            1,075       516        1,361         9,546        311        821        13,630

For the three months ended September 30, 1999
Revenues                             $ 7,918  $  1,507     $  1,552      $  1,397       $652   $  5,083    $   18,109
EBITDA                                 5,371       335         (263)         (724)        30      2,325         7,074
Depreciation & amortization              933       329          376            21        517        712         2,888
Asset impairment charge                    -         -            -             -      2,713          -         2,713

As of and for the nine months ended September 30, 2000 (Restated)
Revenues                             $24,049  $  7,057     $ 11,559      $ 19,430    $ 1,836   $ 11,621    $   75,552
EBITDA                                16,611      (238)         823        (4,006)       410      4,887        18,487
Depreciation & amortization            3,142     1,466        2,868         9,593        973      2,339        20,381
Total segment
   assets                             50,913    32,511       20,375       640,684     19,528     46,689       810,700
Corporate assets                                                                                              263,447
                                                                                                         ------------
Total assets                                                                                               $1,074,147

For the nine months ended September 30, 1999
Revenues                             $23,428  $  3,928     $  2,818      $  3,491    $ 2,093   $ 14,882    $   50,640
EBITDA                                16,396       837         (872)       (2,137)       315      6,931        21,470
Depreciation & amortization            2,755       879          611            57      1,797      1,987         8,086
Asset impairment charge                    -         -            -             -      2,713          -         2,713
Total segment
   assets                             42,305    21,532       11,427         1,606     20,785     19,945       117,600
Corporate assets                                                                                               54,214
                                                                                                         ------------
Total assets                                                                                               $  171,814
</TABLE>


(3) The weighted average number of common shares outstanding, which was used to
compute diluted net income per share in accordance with FASB Statement No. 128,
Earnings Per Share, were increased by 169,796 and 60,062 shares for the three
months ended September 30, 2000 and 1999, respectively, and by 187,363 and
55,904 shares for the nine months ended

                                       10

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

        September 30, 2000 and 1999, respectively, to reflect the assumed
        conversion of dilutive stock options. Additionally, the Company issued
        stock warrants in July 2000 (Note 6) and the weighted average number of
        common shares outstanding increased by 218,479 and 73,358 shares for
        the three and nine months ended September 30, 2000, respectively, in
        the computation of diluted earnings per share. The Company currently
        has 806,948 options outstanding and 1.3 million warrants outstanding to
        acquire shares of common stock. Of these, 257,042 options and no
        warrants are currently exercisable.

(4)     As of September 30, 2000, the Company had a 65% common ownership
        interest in the Virginia PCS Alliance, L.C. (VA Alliance), a provider of
        personal communications services (PCS) serving a 1.7 million populated
        area in central and western Virginia. The Company is managing the
        build-out of this area pursuant to a service agreement. PCS operations
        began throughout the Virginia region in the fourth quarter of 1997. On
        July 25, 2000, the Company converted its preferred interest to common
        interest and exercised its right to fund the redemption of the VA
        Alliances' Series A preferred membership interest. Pursuant to this, the
        Company increased its common interest from 21% to 65% and commenced
        consolidating the VA Alliance as of July 26, 2000 (Note 8).

        As of September 30, 2000, the Company had a 45% common ownership
        interest in the West Virginia PCS Alliance, L.C. (WV Alliance), a PCS
        provider serving a 2.0 million populated area in West Virginia and parts
        of eastern Kentucky, southwestern Virginia and eastern Ohio. The Company
        is managing the build-out of this area pursuant to a service agreement.
        The WV Alliance commenced operations in the fourth quarter of 1998,
        offering services along the Charleston and Huntington corridor and
        expanded to the northern corridor of West Virginia, including the cities
        of Clarksburg, Fairmont and Morgantown in the second quarter of 1999.

        Summarized financial information for the VA Alliance and WV Alliance
        ("Alliances") is contained in the table below.

<TABLE>
<CAPTION>
                                                     Virginia PCS Alliance L.C.
                                                    Condensed Statement of Income
                                                             (Unaudited)

    (Dollars in thousands except per share                Three Months Ended                            Nine Months Ended
    ---------------------------------------               ------------------                            -----------------
      amounts)
      -------                                 September 30, 2000                             September 30, 2000
                                                  (Restated)        September 30, 1999           (Restated)       September 30, 1999
                                             ---------------------- ------------------     ---------------------- ------------------
<S>                                          <C>                    <C>                    <C>                    <C>
    Operating Revenue
      Subscriber Revenues                    $          3,145       $          2,075       $          8,819       $          5,417
      Wholesale/Roaming Revenues                        2,421                    839                  5,357                  2,131
      Equipment Revenues                                  265                    240                  1,071                    812
      Other Revenues                                      469                    488                  1,481                  1,464
                                             ----------------       ----------------       ----------------       ----------------
                                                        6,300                  3,642                 16,728                  9,824

    Operating Expenses
      Cost of Wireless Sales (Exclusive of
      Items Shown Separately Below)                     2,673                  1,565                  7,138                  4,417
      Depreciation and Amortization                     3,531                  2,642                  7,603                  7,495
      Maintenance and Support                           2,224                  1,607                  6,274                  4,963
      Customer Operations                               2,668                  1,843                  7,442                  5,697
      Corporate Operations                                698                    398                  2,105                  1,583
                                             ----------------       ----------------       ----------------       ----------------
                                                       11,794                  8,055                 30,562                 24,155
                                             ----------------       ----------------       ----------------       ----------------

    Operating Loss                                     (5,494)                (4,413)               (13,834)               (14,331)
    Other Expenses, principally interest,
      net                                               5,132                  1,511                 10,439                  4,583
                                             ----------------      -----------------       ----------------       ----------------

    Net Loss                                 $        (10,626)      $         (5,924)      $        (24,273)      $        (18,914)
                                             ================       ================       ================       ================
    Company's Share of Net Loss              $           (841)      $         (1,298)      $         (3,679)      $         (4,136)
                                             ================       ================       ================       ================
</TABLE>


The above table represents full periods of operation. The Company's share of the
net loss for the third quarter 2000 and nine months ended September 30, 2000
shown above represents the Company's 21% ownership interest through the period
ending July 25, 2000. The operations of the Virginia PCS Alliance L.C. were
consolidated into CFW Communications effective July 26, 2000.

As a result of the PrimeCo VA acquisition (See Note 6 below) and planned R&B
merger, both of which utilize Lucent switch equipment, the

                                       11

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

Company decided to convert to a uniform Lucent switch equipment platform by the
middle of 2001. Accordingly, the Company has recognized $1.2 million in
additional depreciation to reflect this early planned disposition.

In July 2000, the Virginia PCS Alliance redeemed its $12.9 million series A
redeemable preferred stock and entered into a new financing agreement with the
Company, using the proceeds from such financing to repay $118.3 million of
borrowings from the Rural Telephone Finance Cooperative. In connection with
these transactions, the Virginia PCS Alliance recognized $1.5 million of
make-whole finance charges.

<TABLE>
<CAPTION>
                                                        West Virginia PCS Alliance L.C.
                                                         Condensed Statement of Income
                                                                  (Unaudited)
(Dollars in thousands except per share
---------------------------------------
  amounts)                                              Three Months Ended                            Nine Months Ended
  -------                                               ------------------                            -----------------
                                            September 30, 2000     September 30, 1999     September 30, 2000      September 30, 1999
                                           ---------------------  ---------------------- ----------------------  -------------------
Operating Revenue
<S>                                        <C>                    <C>                    <C>                     <C>
  Subscriber Revenues                      $          3,008       $            578       $          7,381        $           985
  Wholesale/Roaming Revenues                            763                    137                  1,535                    137
  Equipment Revenues                                    186                    160                    955                    351
  Other Revenues                                          -                      -                      -                      -
                                           ---------------------  ---------------------- ----------------------  -------------------
                                                      3,957                    875                  9,871                  1,473

Operating Expenses
  Cost of Wireless Sales (Exclusive of
  Items Shown Separately Below)                       2,197                    702                  6,470                  1,402
  Depreciation and Amortization                         550                    613                  1,713                  1,305
  Maintenance and Support                             1,804                  1,110                  4,794                  2,970
  Customer Operations                                 1,598                    993                  5,128                  2,568
  Corporate Operations                                  499                    296                  1,525                  1,302
                                           ---------------------  ---------------------  ----------------------  -------------------
                                                      6,648                  3,714                 19,630                  9,547
                                           ---------------------  ---------------------  ----------------------  -------------------

Operating Loss                                       (2,691)                (2,839)                (9,759)                (8,074)

Other Expenses, principally interest, net             1,197                    307                  2,683                    520
                                           ---------------------  ---------------------  ----------------------  -------------------

Net Loss                                   $         (3,888)      $         (3,146)      $        (12,442)       $        (8,594)
                                           =====================  =====================  ======================  ===================

Company's Share of Net Loss                $         (1,934)      $         (1,403)      $         (5,750)       $        (3,834)
                                           =====================  =====================  ======================  ===================
</TABLE>

The operations of the West Virginia PCS Alliance L.C. are reported using the
equity method of accounting by CFW Communications for all periods presented.
Effective upon the planned merger with R&B Communications, the operations of the
West Virginia PCS Alliance L.C. will be consolidated.

In July 2000, the West Virginia PCS Alliance entered into a new financing
agreement with the Company, using the proceeds from such financing to repay
$51.1 million of borrowings from the Rural Telephone Finance Cooperative. At
September 30, 2000 the $57.5 million had been advanced to the WV Alliance which
has been reflected as long-term debt in the table below and as Advances to
Affiliates in the Company's consolidated balance sheet. In connection with this
transaction, the West Virginia PCS Alliance recognized $.3 million of make-whole
finance charges.


                                           West Virginia PCS Alliance L.C.
                                              Condensed Balance Sheet
                                                   (Unaudited)
(Dollars in thousands)            September 30, 2000        December 31, 1999
                                ----------------------   -----------------------

Assets

                                       12

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

<TABLE>
<S>                                            <C>            <C>
Current Assets                                 $      4,489   $   2,367
Investments                                               -       2,506
Property & Equipment, net                            53,950      45,422
Other Assets                                          3,117       3,202
                                               ------------   ---------
Total Assets                                   $     61,556   $  53,497
                                               ============   =========

Liabilities and Shareholders' Equity
Current Liabilities                            $      3,434   $   3,076
Long-Term Debt                                       57,458      51,125
Other Long-Term Liabilities                          12,836           -
Shareholder's' Equity                               (12,172)       (704)
                                               ------------   ---------
Total Liabilities and Shareholders' Equity     $     61,556   $  53,497
                                               ============   =========
</TABLE>

(5)     In February 2000, the Company acquired 4,400 Internet subscribers from
        Twin County Internet Access ("TCIA") for a purchase price of $1.0
        million. TCIA is located in Galax, VA and serves parts of Southwestern
        Virginia and Northern North Carolina. In May 2000, the Company acquired
        2,195 Internet subscribers from Heart of Virginia Communications, Inc.
        ("HOVAC") for a purchase price of $0.3 million. HOVAC is located in
        Farmville, VA.

        In March 2000, the Company sold 10 towers for $3.2 million and the
        Alliances sold a total of 123 towers for $38.5 million to Crown Castle
        International Corp ("Crown"). In April 2000, the Alliances sold a total
        of 18 towers for $5.7 million to Crown. In connection with these
        transactions, the Company has certain future leaseback and other
        commitments. Accordingly, gains on the sales have been deferred for book
        purposes and is being amortized over a ten year expected leaseback
        period.

(6)     On July 26, 2000, the Company closed on the acquisition of PrimeCo
        Personal Communications, L.P. PCS licenses, assets and operations in the
        Richmond and Hampton Roads areas of Virginia ("PrimeCo VA") for cash of
        $408.6 million, the assumption of approximately $20.0 million of lease
        obligations and the transfer of a limited partnership interest and the
        assets, licenses and operations of our analog wireless operation, with a
        combined value of approximately $78.5 million. This acquisition was
        accounted for under the purchase method of accounting. The Company's
        results of operations include PrimeCo VA for the period July 26, 2000
        through September 30, 2000.

        The Company obtained financing through issuance of unsecured Senior
        Notes for $280 million, Subordinated Notes for $95 million, a Senior
        Secured Credit Facility of up to $325 million and various preferred
        stock offerings of $250 million. These financing transactions closed
        concurrent with or just prior to the PrimeCo VA acquisition. The Company
        used the proceeds of the financing vehicles to fund the PrimeCo VA
        acquisition, to repay substantially all of its existing indebtedness and
        that of the Alliances, and for future expansion. Prior to this closing,
        the Company had entered into a bridge financing arrangement which was
        not utilized. Accordingly, the Company has expensed $5.6 million in
        bridge financing commitment fees during the period.

        The Senior Notes were issued at 98.61% of par value and contain a 13.0%
        coupon rate. They mature in August 2010. Approximately $69.1 million was
        placed in escrow to pre-fund the first four interest payments. The
        Senior Notes are redeemable early at a redemption price of up to 106.5%,
        reducing to 100% by August 2008 and contain various financial covenants.
        Additionally, these notes were issued with warrants to purchase an
        aggregate of 504,000 shares of the Company's common stock at a price of
        $47.58 per share. The warrants have been valued at $6.9 million using
        the Black-Scholes option-pricing model, are exercisable one year from
        July 2000, and expire August 2010. The Senior Notes were recorded net of
        the $3.9 million discount associated with the issue price and $6.9
        million for the related warrants.

        The Subordinated Notes were issued at par and contain a 13.5% coupon
        rate. They mature in February 2011. These notes are subordinate to all
        senior indebtedness, including the senior notes. These notes contain
        early redemption features similar to the senior notes. The notes were
        issued with warrants to purchase an aggregate of 300,000 shares of the
        Company's common stock at a price of $0.01 per share. These warrants
        have been valued at $12.2 million using the Black-Scholes option-pricing
        model, are exercisable one year from July 2000 and expire February 2011.
        The Subordinated Notes were recorded net of the $12.2 million for the
        related warrants.

        As of September 30, 2000, the Company has borrowed $150 million of the
        $325 million senior secured term loans. The loans contain a tranche A
        term loan of $50 million, tranche B term loan of $100 million, tranche C
        term loan of $75 million and a revolving credit facility of $100
        million. These loans begin maturing in four years with final maturities
        occurring in seven to

                                       13

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

     eight years. The loans bear interest at rates 3% to 4% above the Eurodollar
     rate or 2.5% to 3% above the federal funds rates. The loans contain certain
     financial covenants and restrictions as to their use.

     The Company has incurred loan origination fees and other closing costs
     related to the above financing totaling $18.7 million which are classified
     as deferred charges on the Company's balance sheet. These costs are being
     amortized using the straight- line method to interest expense over the life
     of the respective instrument.

     The preferred stock offering contained Series B convertible, redeemable
     preferred stock of $112.5 million, Series C convertible, redeemable
     preferred stock of $60.3 million, and Series D redeemable preferred stock
     of $77.2 million. The Series B preferred stock converts to common stock at
     $41 per share, contains warrants to purchase an aggregate of 500,000 shares
     of the Company's common stock at a price of $50 per share and pays an 8.5%
     per annum dividend. The warrants have been valued at $3.8 million using the
     Black-Scholes option-pricing model, are exercisable one year from July 2000
     and expire February 2011. The Series C preferred stock converts to common
     stock at $43 per share and pays an 8.5% per annum dividend. The Series C
     conversion price goes to $45 per share and the dividend rate goes to 5.5%
     upon shareholder approval. The Series D pays an 18% per annum dividend.
     Upon shareholder approval, as required within the terms of the Series D
     preferred stock, the Series D converts to Series C with a conversion price
     of $45 per share and a dividend rate of 5.5%. Closing costs associated with
     the preferred stock totaled $11.2 million. These costs are netted against
     the preferred stock item on the balance sheet. As of September 30, 2000 the
     Company had accrued a dividend requirement of $5.7 million, in the
     aggregate for the preferred series based on their current dividend and
     interest terms and amortization of issuance costs and discounts. This
     amount has been added to the principal amount of the preferred stock since
     payment is contemplated to be in additional shares of the respective
     preferred stock. Accordingly, the $5.7 million has not been reflected in
     the accompanying Statement of Cash Flows. On December 4, 2000 the Company's
     shareholders will vote on the revised terms of the Series C Preferred and
     the conversion of the Series D Preferred and, if approved, the Company
     would adjust the dividend accrual to reflect the revised dividend terms.

     Concurrent with closing the PrimeCo VA acquisition and above financing,
     $149.4 million of the amount borrowed under the senior term loans was
     loaned to the Alliances, which they used to repay their indebtedness to the
     Rural Telephone Finance Cooperative ("RTFC"). Additionally, of the total
     proceeds obtained from all financing sources, the Company paid $408.6
     million to PrimeCo as part of the acquisition consideration, paid $43.0
     million of their outstanding borrowings under previously existing lines of
     credit, placed $69.1 million in escrow to be used to fund the first four
     interest payments on the senior notes, acquired additional common ownership
     interest in the VA Alliance for $11.4 million, and has incurred
     approximately $36 million in transaction fees and costs and issued warrants
     valued at $22.9 million relating to all of the transactions discussed
     herein. Of the total transaction fees and costs, $6.3 million has been
     recognized as bridge financing costs with the majority of the remainder to
     be recognized through amortization and accretion over the expected life of
     the related asset or debt obligation.

     In September 2000, the Company entered into two five-year interest rate
     swap agreements to modify the interest characteristics on $162.5 million of
     debt under the $325 million senior credit facility from a variable rate to
     a fixed rate basis. These agreements involve the Company paying an amount
     based on a fixed interest rate of 6.8% and receiving an amount based on
     one-month London Interbank Offered Rates (LIBOR) variable interest rate
     (6.6% at September 30, 2000), calculated on a $162.5 million notional
     amount. The senior credit facility provides for payment of a LIBOR based
     variable interest rate plus an interest rate ranging from 2.75% to 4.0%,
     depending on the respective loan tranche. At September 30, 2000, with $100
     million of Term Loan B and $50 million of Term Loan C outstanding, the
     interest rate swap provided a fixed rate totaling 10.8% and 9.5% for the
     Term Loan B and Term Loan C, respectively.

(7)  In connection with the aforementioned acquisition of PrimeCo VA, the
     Company exchanged the cellular analog assets and operations of VA RSA6 and
     its 22% limited partnership interest in VA RSA5 as part of the
     consideration paid in the acquisition. The exchange was valued at $78.5
     million, in the aggregate, and resulted in a book gain of $62.6 million,
     before tax. VA RSA6's analog operations contributed revenues of $0.7
     million and $ 3.0 million for the three month periods ending September 30,
     2000 and 1999, respectively, and contributed revenues of $5.6 million for
     the period January 1, 2000 through July 25, 2000, the date of disposition,
     and $8.7 million for the period January 1, 1999 through September 30, 1999.
     VA RSA6's analog operations contributed EBITDA of $.2 million and $ 1.7
     million for the three month periods ending September 30, 2000 and 1999,
     respectively, and contributed EBITDA of $2.7 million for the period January
     1, 2000 through July 25, 2000, the date of disposition, and $4.8 million
     for the period January 1, 1999 through September 30, 1999. The equity
     income from VA RSA5 was not material for the periods presented.

(8)  Concurrent with the closing of the PrimeCo VA acquisition and the
     aforementioned debt and equity financing, the VA Alliance redeemed its
     series A preferred membership interest for $16.8 million. This payment
     included consideration for redemption of

                                       14

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

     $12.9 million in principal, $2.8 million in accrued interest and $1.1
     million in early redemption fees. The Company then exercised its right to
     fund $11.4 million of this redemption in exchange for additional common
     membership interest in the VA Alliance. The Company also elected to convert
     its convertible preferred membership interest in the VA Alliance into
     common membership interest. These redemptions and conversions increased the
     Company's common membership interest in the VA Alliance from 21% to 65%. As
     mentioned in Note 4 above, the Company consolidated the operations of the
     VA Alliance as of July 26, 2000.

(9)  On June 16, 2000, the Company's Board of Directors approved an agreement
     and plan of merger with R&B Communications, Inc. ("R&B"). Under the terms
     of that agreement, the Company will issue approximately 3.7 million shares
     of its common stock in exchange for 100% of R&B's outstanding common stock.
     This transaction remains subject to shareholder and regulatory approval.
     The transaction will be accounted for using the purchase method of
     accounting.

     R&B is an Integrated Communications Provider (ICP) supplying local and long
     distance telephone service, and dial-up and high-speed Internet service to
     business and residential customers in Roanoke, Virginia and the surrounding
     area, as well as in the New River Valley of Virginia.

     R&B increased its ownership in the VA Alliance to 26% in the third quarter
     2000 by exercising its right to fund $1.6 million of the series A preferred
     membership redemption and converting its Series B preferred membership
     interests to common interest. R&B has a 34% common membership interest in
     the WV Alliance. Upon completion of the merger with R&B, the Company will
     own 91% and 79% of the VA Alliance and WV Alliance, respectively.
     Accordingly, the WV Alliance would also be consolidated concurrent with the
     closing of the R&B merger.

(10) Effective July 11, 2000, pursuant to a stock purchase agreement dated May
     17, 2000 with telegate AG, a Federal Republic of Germany corporation, the
     Company sold the capital stock of CFW Information Services, Inc., through
     which directory assistance operations are conducted. In exchange, the
     Company received $32.0 million in cash and $3.5 million in stock from
     telegate AG and recognized a $27.6 million gain, before tax, ($16.5 million
     after tax). As such, the directory assistance operation is treated as a
     discontinued operation in these financial statements. Accordingly, the
     overhead costs which had been allocated to this business segment, but were
     not specifically identified and incremental to the directory assistance
     operations, were reclassified as corporate expenses and included as "other"
     in Note 2. These costs totaled $.4 million and $.5 million for the nine
     months ended September 30, 2000 and 1999, respectively, and $.1 million and
     $.2 million for the three months ended September 30, 2000 and 1999,
     respectively.

     Components of amounts pertaining to the discontinued operations are
     reflected in the financial statements and are presented in the following
     table:

<TABLE>
<CAPTION>
                                                                   Three Months Ended                       Nine Months Ended
      (In thousands; unaudited)                             September 30,         September 30,     September 30,      September 30,
                                                                2000                  1999              2000               1999
      ------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                   <C>                 <C>                <C>
      Operating revenues                                   $        4            $    3,280          $    6,792         $    9,147
      Operating income                                           (493)                 (110)                639                677
      Income taxes (benefit)                                     (187)                  (37)                252                190
      Income (loss) from operations of discontinued
        segment                                            $     (291)           $      (73)         $      396         $      506
      ==============================================================================================================================


      (In thousands; unaudited)                             September 30,         December 31,
                                                                2000                  1999
      -------------------------------------------------------------------------------------------
      Net assets of discontinued operations:
      Current assets                                       $        -            $    1,612
      Property and equipment, net                                   -                 6,411
                                                              --------------       --------------
      Assets of discontinued segment                       $        -            $    8,023
                                                              --------------       --------------
      Current liabilities                                           -                 1,654
      Deferred taxes                                                -                   527
      Retirement benefits                                           -                   113
                                                              --------------       --------------
      Liabilities of discontinued operations               $        -            $    2,294
                                                              ==============       ==============
</TABLE>

                                       15

<PAGE>

                                  NTELOS INC.
              Notes to Condensed Consolidated Financial Statements
                                   Continued

(11) In the third quarter of 1999, the Company recognized an asset impairment
     charge relating to certain wireless analog cable equipment of $2.7 million
     ($1.7 million after tax). The Company provides wireless analog cable
     services over MMDS spectrum. Acquisitions of MMDS spectrum by Sprint Corp.
     and MCI WorldCom are expected to accelerate development of digital
     equipment for high speed digital data, and possibly voice, applications. As
     a result of these actions, an analysis of cash flows in each market and an
     assessment of the alternative uses for this spectrum, the Company
     determined that the carrying value of certain wireless analog cable
     equipment was impaired. The wireless analog cable equipment, which was
     deemed to be impaired in value, was written-down to estimated net
     realizable value of $0.3 million based on the Company's assessment of fair
     value of similar used equipment.

(12) The effective tax rate for the Company changed significantly, from 35% for
     the nine months ended September 30, 1999 to 40% for the nine months ended
     September 30, 2000. The tax rate in 2000 is slightly above the statutory
     rate due to an increase in non-deductible goodwill from the Internet
     acquisitions which occurred over the last 18 months and other
     non-deductible goodwill. Although the nondeductible goodwill increases the
     effective rate, the percentage increase over the statutory rate is only 1%
     as income before taxes is significantly higher due to the gains described
     in Notes 7 and 10. In the prior year, tax credits and the favorable
     treatment of a significant charitable contribution caused the prior year
     rate to be below statutory rates. In addition to the increased effective
     tax rate, the Company is anticipating that its current tax provision will
     be significantly greater than prior periods as a result of the recognition
     of the entire tower gain for tax purposes, as well as the gains on sale of
     the directory assistance (Note 10). The Company is anticipating the
     deferral of a significant portion of the tax cost associated with the
     disposition of its analog cellular assets and operations as a result of the
     like-kind exchange (Notes 6 and 7).

(13) The Company has entered into a three-year agreement with Lucent which sets
     forth the commitment, terms and conditions under which the Company would
     purchase up to $100 million of wireline and wireless equipment and
     services. As of September 30, 2000, the Company has committed to purchase
     under this contract approximately $40 million of equipment and services.

(14) The pro forma unaudited results of operations for the nine months ended
     September 30, 2000 and September 30, 1999, assuming consummation of the
     transactions more fully described in Notes 6, 7, 8 and 10 as of January 1,
     1999 are as follows:

<TABLE>
<CAPTION>
         (In thousands, except per share data)             Nine Months Ended   September 30th
                                                                 2000               1999
                                                              (Restated)
                                                           -----------------  ----------------
         <S>                                               <C>                 <C>
         Operating revenues                                $   107,856         $    85,273
         EBITDA                                                  4,140              11,217
         Net loss                                              (60,614)            (53,752)
         Dividend requirements on preferred stock               22,750              22,750
         Loss applicable to common shares                      (83,364)            (76,503)
         Net loss per common share:
            Basic and diluted                                    (6.38)              (5.87)
</TABLE>

                                       16

<PAGE>

Overview

     NTELOS Inc. (the "Company") is a leading regional integrated communications
provider offering a broad range of wireless and wireline products and services
to business and residential customers in Virginia, West Virginia, Kentucky,
Tennessee and North Carolina. We own our own digital PCS licenses, fiber optic
network, switches and routers, which enables us to offer our customers
end-to-end connectivity in the regions that we serve. This facilities-based
approach allows us to control product quality and generate operating
efficiencies. As of September 30, 2000, the Company, combined with the VA
Alliance and WV Alliance and including the subscribers obtained in the PrimeCo
VA acquisition, had approximately 157,700 digital PCS subscribers and
approximately 52,500 combined ILEC (incumbent local exchange carrier) and CLEC
(competitive local exchange carrier) access lines installed. PrimeCo VA
operations accounted for 88,300 of the total PCS subscribers.

     Historically, we have derived much of our revenues from our ILEC services.
As a result of our increasing focus on and growth in digital PCS, Internet
access and CLEC services, a significant portion of our operating revenues and
EBITDA (earnings before interest, taxes, depreciation and amortization and asset
write-down and impairment charges) are being generated by businesses other than
our ILEC. These newer businesses have generated lower operating margins due to
start-up costs associated with expansion into new markets and introduction of
new service offerings throughout the region. As we expand our markets through
start-up activities and acquisitions of new businesses and introduce new
products, we expect these lower operating margins to continue.

     We have recently significantly expanded the scope of the geographic markets
that we serve and focused our growth efforts on our core communications
services, primarily digital PCS services, Internet access, including dedicated,
high-speed DSL and dial-up services, high-speed data transmission and local
telephone services. Through September 30, 2000, we have completed the following:

     .    acquisition of the wireless licenses, assets and operations of PrimeCo
          Personal Communications, L.P. ("PrimeCo") in the Richmond and Hampton
          Roads, Virginia markets ("PrimeCo VA and referred to within the
          Company's operations as VA East");

     .    issuance and sale of $375 million of debt securities in a private
          placement;

     .    closing on $325 million in new senior credit facility, with $150
          million borrowed on the date of the PrimeCo VA closing;

     .    payment of existing senior indebtedness and refinancing of the VA & WV
          Alliance debt obligations;

     .    issuance and sale of Series B, Series C and Series D Preferred Stock;

     .    entered into an agreement to acquire certain PCS licenses currently
          owned by AT&T that will add 2.5 million POPs in certain markets in
          Maryland and Pennsylvania, with closing remaining subject to
          regulatory approval;

     .    redemption of the series A preferred membership interest in the VA
          Alliance and conversion of series B preferred membership interest into
          common interest;

     .    dispositions of RSA 5 and the analog assets and operations of RSA 6 in
          connection with the transaction with PrimeCo;

     .    disposition of our directory assistance operations; and

     .    execution of a merger agreement with R&B Communications, an integrated
          communications provider in a geographic market contiguous to ours.
          This agreement is subject to regulatory and shareholder approval and
          is expected to close towards the end of the fourth quarter of 2000 or
          early 2001.

Collectively these events are referred to as the "Transactions" elsewhere in
this document.

Due to the disposition of the directory assistance operation in July 2000, the
Company has accounted for the directory assistance operation as a discontinued
operation and, therefore, the directory assistance operating results are
separated in the financial statements from the results of continuing operations
and are separately discussed after the income taxes section below.

As a result of the Transactions (Notes 6, 7, 8 and 10), third quarter results
differ significantly from the first and second quarter of 2000 and the prior
year comparable quarters. Additionally, the fourth quarter of 2000 will differ

                                       17

<PAGE>

significantly from the third quarter 2000 as the VA East acquisition and VA
Alliance consolidation were consummated on July 26, 2000 and therefore, the
results of operations contain less than a full quarter of activities for these
businesses. The Company will report significant losses from operations due to
addition of the VA East operations, consolidation of the VA Alliance results,
significant goodwill and licenses amortization and the significant increases in
interest related costs.

The discussion and analysis herein should be read in conjunction with the
financial statements and the notes thereto included herein. Much of the
discussion in this section involves forward-looking statements. Our actual
results may differ significantly from the results suggested by these
forward-looking statements. The Company wishes to caution readers that these
forward-looking statements and any other forward-looking statements made by the
Company are based on a number of assumptions, estimates and projections
including but not limited to, changes in industry conditions created by federal
and state legislation and regulations; successful integration of acquisitions;
the achievement of build-out, operational, capital, financing and marketing
plans relating to deployment of PCS services; retention of our existing customer
base and service levels and our ability to attract new customers; continuation
of economic growth and demand for wireless and wireline communications services;
rapid changes in technology; the competitive nature of the wireless telephone
and other communications services industries; the effects of inflation and price
changes not being greater than anticipated, adverse changes in the roaming rates
we charge and pay; the capital intensity of the wireless telephone business and
our debt structure; our substantial debt obligations and our ability to service
those obligations; the cash flow and financial performance of our subsidiaries;
restrictive covenants and consequences of default contained in our financing
arrangements; completion of our anticipated merger with R&B Communications; our
opportunities for growth through acquisitions and investments and our ability to
manage this growth; the level of demand for competitive local exchange services
in smaller markets; our ability to manage and monitor billing; and possible
health effects of radio frequency transmission. Investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that any significant deviations from these
assumptions could cause actual results to differ materially from those in the
above and other forward-looking statements. Forward-looking statements included
herein are as of the date hereof and the Company undertakes no obligation to
revise or update such statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events

     Revenues

     Our revenues are generated from the following categories:

     .    wireless communications, including digital PCS, analog cellular
          (disposed of on July 26, 2000), paging, voice mail and wireless cable,
          which consists primarily of video services;

     .    wireline communications, including telephone revenues, fiber optic
          network usage, or carrier's carrier services, Internet, CLEC, long
          distance and cable television revenues; and

     .    other communications services revenues, including revenues from our
          sale and lease of communications equipment and security alarm
          monitoring and installation and rental of property and equipment
          primarily to the Alliances.

     Operating Expenses

     Our operating expenses are generally incurred from the following
     categories:

     .    cost of sales, including handset equipment costs, usage-based access
          charges, including long distance, roaming charges, and other direct
          costs. We sell handsets to our customers at a price below our cost.
          Previously, we have netted these discounts and costs against our
          revenues. We have reclassified prior periods to conform them to our
          new policy of separately reporting cost of sales;

     .    maintenance and support expenses, including costs related to specific
          property and equipment, as well as indirect costs such as engineering
          and general administration of property and equipment;

                                       18

<PAGE>

     .    depreciation and amortization, including amortization of goodwill from
          acquired assets and capital outlays to support continued business
          expansion;

     .    asset impairment charges, if applicable;

     .    customer operations expenses, including marketing, product management,
          product advertising, sales, publication of a regional telephone
          directory, customer services and directory services;

     .    corporate operations expenses, including taxes other than income,
          executive, accounting, legal, purchasing, information management,
          human resources and other general and administrative expenses.

     Other Income (Expenses)

     Our other income (expenses) are generated (incurred) from interest income
and expense, dividend income, equity income or loss from RSA 5 (through July 25,
2000), equity income or loss from the Virginia Alliance (through July 25, 2000)
and West Virginia Alliance, gain on sale of investments and assets and loss on
write-down of investments.

     Income Taxes

     Our income tax liability and effective tax rate increases or decreases
based upon changes in a number of factors, including our pre-tax income or loss,
losses sustained by the Alliances, net operating losses and related
carryforwards, alternative minimum tax credit carryforwards, gain or loss on the
sale of assets and investments, write-down of assets and investments,
non-deductible amortization, investment and employment tax credits, and
charitable contributions and other tax deductible amounts.

Results of Operations

     Overview

     Revenue increased $15.3 million, or 85%, from $18.1 million to $33.4
million, and $25.0 million, or 49%, from $50.6 million to $75.6 million for the
respective three and nine month periods ended September 30, 2000 as compared to
1999. EBITDA decreased $2.6 million, or 37%, from $7.1 million to $4.5 million,
and $3.0 million, or 14%, from $21.5 million to $18.5 million, for the
respective three and nine month periods ended September 30, 2000 and 1999.
Operating income decreased $10.7 million from $1.5 million to $(9.2) million,
and $12.6 million, from $10.7 million to $(1.9) million for the respective three
and nine month periods ended September 30, 2000 and 1999.

     These results reflect customer growth from our wireless, CLEC and Internet
businesses, with customers from these services totaling 228,400 as of September
30, 2000, a 162,190 customer increase from September 30, 1999. Over half of this
growth was from the acquisition of PrimeCo VA (hereinafter referred to as "VA
East"). In addition to this, the Company experienced significant internal growth
and expansion throughout our markets in PCS, Internet and CLEC and from Internet
acquisitions. EBITDA decreased primarily due to the inclusion of the VA Alliance
in the Company's consolidated operating results in the current year and the
acquisition of VA East. Also, CLEC start-up losses are in the current versus the
prior year due to expansion, particularly in our new West Virginia markets.
Operating income decreased from the prior year comparable quarter and nine month
period due to the decrease in EBITDA coupled with the higher levels of
depreciation and significant increases in amortization of licenses, goodwill and
other intangibles generated from acquisitions and from capital investments in
our growth businesses and underlying supporting infrastructure. Finally, the
Company recognized additional depreciation of $1.2 million in the third quarter
of 2000 related to wireless switch equipment scheduled to be replaced in the
middle of 2001. In the third quarter of 1999, an asset impairment charge of $2.7
million was recognized related to wireless analog cable equipment.

     Net income for the three and nine months ended September 30, 2000 was $37.4
million and $37.8 million, respectively. The nine month results included a gain
of $62.6 million ($37.6 million, net of tax) on the exchange of RSA6 analog
assets and operations, along with the Company's 22% limited partnership interest
in VA RSA5 in connection with the VA East acquisition. Also, the Company
recognized a gain on the sale of the directory assistance segment of $27.6
million ($16.5 million, net of tax) and non-recurring bridge financing
commitment charges of $6.3 million. Interest expense net of interest income,
amounted to $10.2 million ($6.1 million after tax), and the Company's share of
unconsolidated PCS losses totaled $2.8 million ($1.7 million after tax) and $9.4
million ($5.7 million after tax)

                                       19

<PAGE>

for the three and nine months ended September 30, 2000, respectively. As
discussed in Note 3, the Alliances were accounted for on the equity method prior
to the consolidation of the VA Alliance on July 26, 2000.

     Net income for the three and nine months ended September 30, 1999 was $4.4
million and $7.0 million, respectively. This included a $2.7 million loss ($1.6
million loss after-tax) and $8.0 million loss ($4.8 million loss after tax) for
the three and nine month periods, respectively, relating to our equity share of
losses from our investments in the Alliances.

     Operating Revenues

     Operating revenues increased $15.3 million, or 85%, from $18.1 million for
the three months ended September 30, 1999 to $33.4 million for the three months
ended September 30, 2000. Operating revenues increased $25.0 million, or 49%,
from $50.6 million for the nine months ended September 30, 1999 to $75.6 million
for the nine months ended September 30, 2000.

     Wireless Communications Revenues. Wireless communications revenues
increased $11.8 million, and $13.1 million, or 81%, for the respective three and
nine month periods ended September 30, 2000 as compared to September 30, 1999.
Wireless communications revenues were $17.4 million and $29.2 million for the
three and nine months ended September 30, 2000, as compared to $5.6 million and
$16.1 million for the three and nine months ended September 30, 1999.

     .    Digital PCS Revenue. Revenues for digital PCS increased $13.9 million
          from $1.3 million for the three months ended September 30, 1999 to
          $15.2 million for the three months ended September 30, 2000 and
          increased $15.9 million from $3.5 million for the nine months ended
          September 30, 1999 to $19.4 million for the nine months ended
          September 30, 2000. The increase was primarily attributable to the
          consolidation of the VA Alliance into the Company's operating results
          (Notes 4 and 8), the acquisition of VA East (Note 6) and significant
          customer growth in the Company's core market. Consolidation of the VA
          Alliance and the acquisition of VA East accounted for 91% and 82% of
          the total increase in the three and nine months ended September 30,
          2000 versus the prior year comparable periods. Excluding customers
          from the WV Alliance, as their revenue is not included in the results
          of operations, the Company had 133,500 digital customers as of
          September 30, 2000, which represented a 108,800 increase in the number
          of digital customers from September 1999.

     .    Other Wireless Revenues. Revenues for analog cellular, paging and
          voicemail decreased $2.0 million, or 56%, from $3.6 million for the
          three months ended September 30, 1999 to $1.6 million for the three
          months ended September 30, 2000 and decreased $2.6 million, or 25%,
          from $10.5 million for the nine months ended September 30, 1999 to
          $7.9 million for the nine months ended September 30, 2000. This
          decrease reflects the absence of analog cellular revenues for over two
          months in the third quarter 2000, as that business was sold in
          connection with the VA East acquisition (Note 7) on July 26, 2000.

     .    Wireless Cable Revenues. Wireless cable revenues decreased $.1
          million, or 14%, from $.7 million for the three months ended September
          30, 1999 to $.6 million for the three months ended September 30, 2000
          and decreased $.3 million, or 12%, from $2.1 million for the nine
          months ended September 30, 1999 to $1.8 million for the nine months
          ended September 30, 2000.

     Wireline Communications Revenues. Wireline communications revenues
increased $3.9 million, or 34%, and $12.5 million, or 39%, for the three and
nine month periods ended September 30, 2000 as compared to September 30, 1999,
respectively. Wireline communications revenues were $15.3 million and $43.9
million for the three and nine months ended September 30, 2000 and were $11.4
million and $31.4 million for the three and nine months ended September 30,
1999.

     .    Telephone Revenues. Telephone revenues, which include local service,
          access and toll services, directory advertising and calling feature
          revenues, increased $.2 million, or 1.8%, from $7.9 million for the
          three months ended September 30, 1999 to $8.1 million for the three
          months ended September

                                       20

<PAGE>

          30, 2000 and increased $.5 million, or 2.6%, from $23.5 million for
          the nine months ended September 30, 1999 to $24.0 million for the nine
          months ended September 30, 2000. The increase was due to an increase
          in access minutes of 11%, toll minutes of 16%, and access lines of 5%.

     .    Fiber Optic Network Usage and CLEC Revenues. Revenues from fiber optic
          network usage for carrier's carrier services and CLEC operations
          increased $1.2 million, or 80%, from $1.5 million for the three months
          ended September 30, 1999 to $2.7 million for the three months ended
          September 30, 2000 and increased $3.2 million, or 80%, from $3.9
          million for the nine months ended September 30, 1999 to $7.1 million
          for the nine months ended September 30, 2000. Approximately $1.2
          million and $3.0 million of these increases for the three and nine
          month related periods was due to the growth in CLEC customers and
          revenues. As of September 30, 2000, CLEC customers totaled 13,168, an
          increase of 9,168 customers from September 30, 1999.

     .    Internet Revenues. Revenues from Internet services increased $2.5
          million, from $1.6 million for the three months ended September 30,
          1999 to $4.1 million for the three months ended September 30, 2000,
          and increased $8.8 million, from $2.8 million for the nine months
          ended September 30, 1999 to $11.6 million for the nine months ended
          September 30, 2000. This revenue growth was attributable to
          acquisitions, internal customer growth and improved unit revenues.
          This growth in Internet services comprised the largest single
          component of wireline revenue growth in the three months ended
          September 30, 2000, as Internet and DSL customers grew to 57,600 as of
          September 30, 2000, an increase of 25,900 customers from September 30,
          1999. Internet customer growth from acquisitions accounted for 16,300
          of this total, and 9,600 was from internal growth.

     .    Wireline Cable Revenues. Wireline cable revenues remained unchanged at
          $.4 million and $1.2 million for the three and nine months ended
          September 30, 2000 and 1999, respectively. This revenue stream is
          stable due to a decrease in the level of marketing and sales and other
          resources deployed to support the operation.

     Other Communications Services Revenues. Other communications services
revenues decreased $.4 million, or 36%, from $1.1 million to $.7 million for the
three months ended September 30, 1999 and 2000, respectively. Other
communications services revenues decreased $.6 million, or 19%, from $3.1
million for the nine months ended September 30, 1999 to $2.5 million for the
nine months ended September 30, 2000. Revenues from phone systems sales and
services decreased $.4 million due to a shift in marketing and sales efforts
from this business. Our revenues from rentals, primarily for company owned
assets, which are being used by the Alliances, decreased $.2 million as rental
from the VA Alliance had to be eliminated subsequent to the consolidation of
this business into the Company's results from operations.

     Operating Expenses

     Total Operating Expenses. Total operating expenses increased $30.2 million,
from $16.6 million for the three months ended September 30, 1999 to $46.8
million for the three months ended September 30, 2000. The consolidation of the
VA Alliance and the acquisition of VA East accounted for $27.5 million, or 91%,
of the total increase. Also, the VA Alliance recorded additional depreciation of
$1.2 million in the third quarter of 2000 related to the useful life change of
wireless switching equipment scheduled for early replacement in the middle of
2001. In the third quarter of 1999, the Company recorded an asset write-down
charge of $2.7 million. The net effect of these two items resulted in a decrease
in operating expenses of $1.5 million in the current versus the prior year
comparative periods. Operating expenses, excluding depreciation and amortization
and asset write-down and impairment charges, increased $27.9 million, or 96%,
from $29.2 million for the nine months ended September 30, 1999 to $57.1 million
for the nine months ended September 30, 2000. The combined effect of the
consolidation of the VA Alliance and the acquisition of VA East accounted for
59% of the total increase for the nine month periods ended September 30, 1999
and 2000. Wireline operating expenses increased $3.2 million and $11.6 million
for the three and nine month periods, respectively, and wireless operating
expenses increased $12.6 million and $14.4 million for the same periods,
respectively. Within the wireline business, Internet and network comprised 100%
and 94% of the total wireline increases for the three and nine months ended
September 30, 1999 and 2000, respectively.

                                       21

<PAGE>

     Cost of Goods Sold. Cost of goods sold increased $3.8 million, from $2.0
million for the three months ended September 30, 1999 to $5.8 million for the
three months ended September 30, 2000 and increased $5.2 million, or 94%, from
$5.5 million for the nine months ended September 30, 1999 to $10.7 million for
the nine months ended September 30, 2000. Of this increase, $3.4 million is from
the addition of VA Alliance and VA East.

     Maintenance and Support Expenses. Maintenance and support expenses
increased $4.8 million, from $4.0 million for the three months ended September
30, 1999 to $8.8 million for the three months ended September 30, 2000, and
increased $10.3 million, from $10.2 million for the nine months ended September
30, 1999 to $20.5 million for the nine months ended September 30, 2000. This
increase was attributable to the addition of the VA Alliance and VA East in the
consolidated results for approximately the last two months of the period. These
entities accounted for $8.8 million of the total three and nine month increases.
Additionally, $3.1 million of the increase came from Internet acquisitions
occurring after September 30, 1999. Also, network and CLEC maintenance and
support expenses increased $.6 million and $2.1 million for the three and nine
month comparable periods resulting from CLEC rollout and engineering and
operations support growth. Other wireless maintenance and support is down $.6
million for the nine month period ended September 30, 2000 as compared to 1999
due to the sale of the analog business in July 2000. Other increases in
maintenance and support expenses were consistent with customer and revenue
growth.

     Depreciation and Amortization Expenses. Depreciation and amortization
expense increased $10.7 million, from $2.9 million for the three months ended
September 30, 1999 to $13.6 million for the three months ended September 30,
2000, and increased $12.3 million, from $8.1 million for the nine months ended
September 30, 1999 to $20.4 million for the nine months ended September 30,
2000. Of this increase, $7.0 million (of which $1.9 million was amortization of
goodwill and other intangible assets, and $1.8 million was from amortization of
PCS licenses) came from the addition of the VA Alliance and VA East. Network and
CLEC depreciation increased $.8 million and $1.1 million for the three and nine
months ended September 30, 2000 as compared to 1999. This increase was due to an
increase in property and equipment of approximately 43%, from $21.3 million as
of September 30, 1999 to $30.5 million as of September 30, 2000. This increase
is due to a shift in the composition of the asset base to network plant and
equipment and a higher amount of goodwill from Internet acquisitions, both of
which carry shorter lives. Finally, the Company recognized $1.2 million of
additional depreciation on switching equipment due to the planned early
retirement in the middle of 2001. This switching equipment is being replaced for
economic reasons and in order to obtain one consistent switching platform across
all markets.

     Customer Operations Expenses. Customer operations expense increased $8.1
million, from $2.9 million for the three months ended September 30, 1999 to
$11.0 million for the three months ended September 30, 2000, and increased $10.1
million, or 121%, from $8.3 million for the nine months ended September 30, 1999
to $18.4 million for the nine months ended September 30, 2000. Aside from the
$6.2 million increase attributable to the addition of the VA Alliance and VA
East, primary areas of increase were in the Internet and Network and CLEC
operations, which increased a combined $1.2 million and $3.2 million for the
three and nine months ended September 30, 2000 as compared to 1999. These
increases relate primarily to marketing and sales activities, customer care
costs primarily associated with adding new customers, and the 1999 internet
acquisitions, which were added in the last four months of 1999.

     Corporate Operations Expenses. Corporate operations expense increased $1.3
million, or 60%, from $2.1 million for the three months ended September 30, 1999
to $3.4 million for the three months ended September 30, 2000 and increased $2.3
million, or 46%, from $5.2 million for the nine months ended September 30, 1999
to $7.5 million for the nine months ended September 30, 2000. Of this increase,
$.1 million and $.8 million for the three and nine months ended September 30,
2000 over 1999, respectively, related to acquired Internet operations and $.6
million relates to the VA Alliance and VA East. The remaining increases
represent growth in the corporate infrastructure associated with the significant
customer growth and the Company's geographic expansion.

     Other Income (Expenses)

     Total other income (expenses) increased $39.0 million, from $5.4 million
for the three months ended September 30, 1999 to $44.4 million for the three
months ended September 30, 2000. Other income (expenses) increased $37.2
million, from an expense of $.4 million for the nine months ended September 30,
1999 to other income of $36.8 million

                                       22

<PAGE>

for the nine months ended September 30, 2000.

     Gains on sale of assets increased $54.2 million, from $8.4 million for the
three and nine months ended September 30, 1999 to $62.6 million for the three
and nine months ended September 30, 2000. The $8.4 million increase from the
prior year related to the gain on sale of a tower and the sale of the Company's
holdings in American Telecasting, Inc. The $62.6 million gain in the current
year related to the sale of the 22% limited partnership interest in RSA5 and the
disposition of the RSA6 analog assets and operations (Notes 6 and 7).

     The Company incurred bridge commitment financing fees and related expenses
of $6.3 million in the third quarter of 2000 (Note 6).

     Interest expense increased $11.9 million and $12.7 million for the three
and nine months ended September 30, 2000 versus the comparable prior year
periods. These increases were due to additional financing to fund acquisitions
and other third quarter transactions, and to fund future growth activity in an
expanded market (Notes 6, 7, and 8). Other income, principally interest,
increased $3.0 million and $3.3 million for the three and nine months ended
September 30, 2000 as compared to 1999. This interest is generated from the $70
million of restricted cash required by debt covenants and the $57 million
advance to the WV Alliance in connection with the refinancing of its
indebtedness with the Rural Telephone Finance Cooperative in contemplation of
the pending consolidation of the WV Alliance (Notes 4, 6 and 9).

     Our share of losses from the Virginia Alliance decreased $.5 million, or
35%, from $1.3 million for the three months ended September 30, 1999 to $.8
million for the three months ended September 30, 2000 and decreased $.4 million,
or 11%, from $4.1 million to $3.7 million for the nine months ended September
30, 1999 and 2000. This is primarily due to the fact that equity accounting was
used through July 25, 2000 after which, as a result of the Company converting
its preferred interest to common interest and exercising its right to fund $11.4
million of the VA Alliance's series A preferred interest and thus obtaining a
controlling interest (increasing from 21% to 65%), the Company began
consolidating the VA Alliance results of operations. Our share of losses from
the West Virginia Alliance, which commenced operations in the latter part of the
third quarter of 1998 and expanded significantly in the second quarter of 1999,
increased $.5 million, or 38%, from $1.4 million for the three months ended
September 30, 1999 to $1.9 million for the three months ended September 30, 2000
and increased $1.9 million, or 50%, from $3.8 million for the nine months ended
September 30, 1999 to $5.7 million for the nine months ended September 30, 2000.
The Company's ownership interests in the VA and WV Alliance will increase to 91%
and 79%, respectively, upon completion of the R&B merger (Note 9), which is
expected to be completed by the fourth quarter of 2000 or early in the first
quarter of 2001. After this transaction is completed, both Alliances will be
consolidated into our financial statements.

     Combined customer growth for the Alliances from September 30, 1999 to
September 30, 2000 totaled 127,200, with total customers exceeding 157,000 as of
September 30, 2000. Net sales increased $15.3 million for the nine months ended
September 30, 2000 from $11.3 million for the nine month period ending September
30, 1999 (Note 4).

     Equity income from RSA 5 was not material for the three and nine months
ended September 30, 1999 and 2000. In July 2000, the Company's 22% limited
interest in RSA5 was sold to Verizon (previously PrimeCo) as part of
consideration for the PrimeCo VA acquisition (Note 7).

     Income Taxes

     Income taxes increased $11.7 million, from $2.3 million for the three
months ended September 30, 1999 to $14.0 million for the three months ended
September 30, 2000, and increased $10.4 million, from $3.5 million for the nine
months ended September 30, 1999 to $13.9 million for the nine months ended
September 30, 2000. These increases were due to the change in the pre-tax income
for the comparable periods. Additionally, the effective rate changed from a
34.8% tax obligation for the nine months ended September 30, 1999 to a 39.8% tax
obligation for the nine months ended September 30, 2000. The effective tax rate
change is due to the continuing operations results turning from a profit to a
loss with non-deductible goodwill from 1999 Internet acquisitions being added
back to the pre-tax loss, offset by significant gains. This results in a tax
obligation greater than the statutory rate.

     Discontinued Operations

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     In May 2000, the Company announced that it had entered into a definitive
agreement to sell its directory assistance operations. The Company sold its
directory assistance operations in July 2000. All periods presented on the
income statement have been restated to reflect the accounting for the directory
assistance segment as discontinued operations. Non-incremental corporate
overhead of $.2 million for the three month periods ended September 30, 2000 and
1999, and $.4 million and $.5 million for the nine month periods ended September
30, 2000 and 1999, respectively, which was previously allocated to this business
segment, have been included in operating expenses of continuing operations.

     Liquidity and Capital Resources

     The Company has funded its working capital requirements and capital
expenditures from net cash provided from operating activities and borrowings
under credit facilities. After closing on the PrimeCo VA operations (Note 7) and
the related financing, the Company had $175 million in unused borrowings
available under its senior credit facility.

     Operating Cash Flows

     In the nine months ended September 30, 2000, net cash provided by operating
activities was $13.0 million. Principal changes in operating assets and
liabilities were as follows: accounts receivable increased $7.4 million
resulting from the inclusion of the VA PCS Alliance and VA East accounts
receivable totaling $10.2 million, offset by improved aging on receivables and
increases in receivable reserves; income taxes receivable changed from $2.0
million at December 31, 1999 to $.4 million at September 30, 2000 due to taxes
due on the business dispositions (Note 6, 7, and 10) offset by tax benefits
primarily from PCS operating losses; and accounts payable and other liabilities
changed by $16.3 million from December 31, 1999, again primarily due to the
inclusion of the VA PCS Alliance and the VA East operation in the Company's
consolidated financial position at September 30, 2000.

     The Company's cash flows used in investing activities for the nine months
ended September 30, 2000 aggregated $563.9 million and include the following:

     .   $34.2 million for the purchase of property and equipment,
     .   $408.6 million representing the cash portion of the acquisition price
         for PrimeCo VA (Note 6),
     .   $70.3 million cash outlay relates to the purchase of restricted cash
         investments equal to the first two years interest payments on the
         senior notes,
     .   $31.7 million of proceeds from the sale of the directory assistance
         operation (Note 10),
     .   $10.7 million cash outlay for the purchase of minority interest in the
         cellular business which was subsequently disposed of through a non-cash
         like-kind asset exchange in connection with the PrimeCo VA acquisition,
     .   $15.3 of investments in the WV PCS Alliance and VA PCS Alliance ($3.9
         million in scheduled equity contributions and $11.4 million in
         connection with the purchase of controlling common ownership interest
         (Note 8)),
     .   $53.8 million of net advances to the Alliances, the majority of which
         was to the WV PCS Alliance in order for them to pay off their existing
         long-term debt in contemplation of the pending consolidation (Note 9),
     .   $3.2 million received from the sale of 10 towers and $1.4 million cash
         outlay to acquire Internet subscribers (Note 5), and
     .   $5.0 million purchase of RTFC capital certificates in connection with
         RTFC participation in the senior credit facility.

     Net cash provided by financing activities for the nine months ended
September 30, 2000 aggregated $590.0 million which represents the following:

     .   Payment of dividends on outstanding common stock of $1.5 million in
         the first quarter 2000,
     .   redemption payment on the senior notes of $12.7 million (see Note 5 in
         the 1999 Annual Report to Shareholders),
     .   $17.7 million in payments for investment banking, legal and other
         professional services associated with

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<PAGE>

         the issuance of long-term debt,
     .   $242.5 million in proceeds from the issuance of preferred stock and the
         related warrants and $520.5 million in proceeds from the issuance
         of long-term debt (Note 6),
     .   $118.6 million cash outlay to payoff certain VA PCS Alliance debt,
     .   $23.5 million of cash outlay to payoff the Company's existing lines of
         credit, and
     .   $1.1 million of net proceeds from the exercise of stock options.

     Under restrictions related to the new debt financing (Note 7), we have
discontinued payment of dividends to common shareholders effective for the
quarter ending June 30, 2000. This will allow the Company to retain future
earnings, if any, to fund the development and growth of its businesses and to
service its debt obligations.

     After the completion of the Transactions, our liquidity needs will be
influenced by numerous factors including:

     .   significantly reduced or negative EBITDA that we expect to continue
         until at least into 2001, as a result of acquiring capital intensive
         businesses in their early stages, entering new markets and disposing
         of businesses that generate positive EBITDA;
     .   increased capital expenditures to support planned PCS network growth
         and expansion, much of which is discretionary in nature, and to
         support planned customer growth;
     .   our own continuing capital expenditures due to our ongoing strategy of
         offering our services in new markets, adding new products and
         services, and enhancing organic growth;
     .   significant capital expenditures to become an integrated
         communications provider in many of our existing, newly acquired and
         other potential markets by offering a broader range of products and
         services;
     .   capital expenditures for the Richmond and Hampton Roads markets
         (PrimeCo VA acquisition) and R&B Communications;
     .   continued investment in the Alliances;
     .   future acquisitions; and
     .   significantly increased interest expense.

     After the completion of the Transactions, our liquidity sources include:

     .   cash flow from operations, if any;
     .   approximately $70.3 million held in the escrow account to fund the
         first four interest payments on the senior notes;
     .   $175.0 million available under our new credit facility subject to
         certain conditions;
     .   public and private debt and equity markets;
     .   disposition of additional non-core businesses and assets, such as
         additional cell towers owned in VA East and wireline cable operations,
         and investments; and
     .   interest on the escrow account.

     We expect capital expenditures for the last three months of 2000 to be
between $30 and $40 million and for the year 2001 to be between $80 million to
$100 million. We expect these capital expenditures to be used to:

     .   support continued expansion of CLEC and Internet access services;
     .   add another building to support employee additions commensurate with
         the growth in digital PCS, Internet and CLEC customers; and
     .   support the continued expansion of VA East, VA Alliance and WV
         Alliance operations.

     VA East and the Alliances have substantially satisfied their FCC build-out
requirements. Consequently, the expenditures above are generally discretionary,
permitting us to maintain flexibility in our business plans and capital
expenditures. Since these are generally discretionary expenditures, we cannot
assure you when, if ever, these proposed uses will be initiated or completed.

     Based on our assumptions about the future of our operating results, our
capital expenditure needs, many of which are discretionary, and the availability
of borrowings under our new credit facility and our other sources of liquidity,
we

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<PAGE>

believe that we will have sufficient capital resources until we begin generating
significant positive EBITDA. However, if any of our assumptions prove incorrect
or if we make additional acquisitions, we may not have sufficient capital
resources. If so, we may have to delay or abandon some of our anticipated
capital expenditures and our ability to make interest and principal payments on
the notes will be significantly impaired.

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                                   SIGNATURES


        Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized in
the City of Waynesboro, Commonwealth of Virginia, on March 14, 2002.


                                        NTELOS Inc.
                                        a Virginia corporation
                                        (Registrant)


                                        By: /s/ James S. Quarforth
                                           -------------------------
                                            James S. Quarforth
                                            Chief Executive Officer














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