DOBSON COMMUNICATIONS CORP, S-1/A, 1999-12-22

DOBSON COMMUNICATIONS CORP
S-1/A, 1999-12-22
RADIOTELEPHONE COMMUNICATIONS

Previous: ADATOM COM INC, PRE 14C, 1999-12-22

Next: INTERLEUKIN GENETICS INC, 424B3, 1999-12-22

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

------------------------------

DOBSON COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
OKLAHOMA 4812 73-1110531
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

------------------------------

13439 NORTH BROADWAY EXTENSION, SUITE 200
OKLAHOMA CITY, OKLAHOMA 73114
(405) 529-8500

(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

BRUCE R. KNOOIHUIZEN
13439 NORTH BROADWAY EXTENSION
SUITE 200
OKLAHOMA CITY, OKLAHOMA 73114
(405) 529-8500

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

------------------------------

COPIES TO:

<TABLE>
<S> <C>
THEODORE M. ELAM, ESQ. JEREMY W. DICKENS, ESQ.
MCAFEE & TAFT A PROFESSIONAL CORPORATION WEIL, GOTSHAL & MANGES LLP
TENTH FLOOR, TWO LEADERSHIP SQUARE 767 FIFTH AVENUE
211 NORTH ROBINSON NEW YORK, NEW YORK 10153
OKLAHOMA CITY, OKLAHOMA 73102-7103 (212) 310-8000
(405) 235-9621
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

------------------------------

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /

------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE
<S> <C> <C>
Class A Common Stock, par value $.001 per share............. $632,500,000 $166,980(1)(3)
</TABLE>

(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(o).

(2) Includes amounts attributable to shares which the underwriters will have
the option to purchase to cover over-allotments.

(3) Of this amount, $159,850 was previously paid.

------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
<PAGE>

SUBJECT TO COMPLETION, DATED DECEMBER 22, 1999

PROSPECTUS

25,000,000 SHARES

[LOGO]

CLASS A COMMON STOCK

------------------

This is our initial public offering of Class A common stock. We are offering
25,000,000 shares of our Class A common stock.

Following this offering, we will have Class A common stock and Class B
common stock outstanding and our Class B common stock will represent
approximately 96.2% of the total combined voting power of our outstanding common
stock.

We have applied for quotation of our Class A common stock on the Nasdaq
National Market under the symbol "DCEL." We expect the initial public offering
price to be between $20 and $22 per share.

INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. RISK FACTORS BEGIN ON PAGE
13.

<TABLE>
<CAPTION>
PER SHARE TOTAL
----------- -----------
<S> <C> <C>
Public Offering Price....................................... $ $
Underwriting Discount....................................... $ $
Proceeds to Dobson Communications Corporation............... $ $
</TABLE>

We and the shareholders listed on page 98 have each granted the underwriters
a 30-day option to purchase up to 1,875,000 additional shares of Class A common
stock on the same terms and conditions set forth above solely to cover
over-allotments. We will not receive any of the proceeds from the sale of shares
by the selling shareholders.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The underwriters expect to deliver the shares of Class A common stock on or
about , 2000.

------------------------

JOINT BOOK RUNNING MANAGERS
LEHMAN BROTHERS SALOMON SMITH BARNEY
JOINT LEAD MANAGER
BANC OF AMERICA SECURITIES LLC

DEUTSCHE BANC ALEX. BROWN

GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.

, 2000
<PAGE>

[Map depicting Dobson-owned markets, American Cellular-owned markets, markets
Dobson proposes to acquire in pending acquisitions and markets of adjacent
roaming partners of each of the foregoing.]

[Samples of brand advertisements utilized by Dobson Communications
Corporation.]

i
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary..................... 1
Risk Factors........................... 13
Use of Proceeds........................ 23
Dividend Policy........................ 23
Dilution............................... 23
Capitalization......................... 25
The American Cellular Acquisition...... 28
Unaudited Pro Forma Consolidated
Financial Data....................... 31
Unaudited Proportionate Adjusted
Statements of Operations............. 38
Selected Consolidated Financial and
Other Data........................... 42
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 46
</TABLE>

Industry Overview...................... 62

Business............................... 64

Management............................. 85

Certain Transactions................... 92

Principal and Selling Shareholders..... 97

Description of Capital Stock........... 99

Shares Eligible for Future Sale........ 107

Federal Income Tax Considerations...... 109

Underwriting........................... 112

Legal Matters.......................... 116

Experts................................ 117

Where You Can Find More Information.... 118

Index to Financial Statements.......... F-1
</TABLE>

--------------------------

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of Class A common stock only in jurisdictions where offers and sales
are permitted.

ii
<PAGE>
PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY.

WHO WE ARE

We are a leading provider of rural and suburban cellular telephone services.
As of September 30, 1999, our systems covered a total population of
approximately 5.9 million and we had approximately 424,000 subscribers. For the
nine months ended September 30, 1999, we had total revenues of $235.1 million,
EBITDA, which we define as our earnings (loss) from continuing operations before
interest income, interest expense, other income, depreciation and amortization,
and minority interests in income of our subsidiaries, of $105.1 million and a
net loss from continuing operations before extraordinary items of
$47.1 million. On a proportionate basis, after giving effect to our expected 50%
interest in American Cellular Corporation, our systems would have covered a net
population of approximately 8.1 million and we would have had approximately
623,000 subscribers as of September 30, 1999. On the same proportionate basis,
we would have had total revenues of $329.0 million, EBITDA of $163.8 million and
a net loss from continuing operations of $75.2 million for the nine months ended
September 30, 1999. We expect to incur significant net losses from continuing
operations in the future.

We began providing cellular telephone service in 1990 in Oklahoma and the
Texas Panhandle. We have since expanded our cellular operations, primarily
through the acquisition of cellular systems and licenses located in
underdeveloped rural and suburban markets that are adjacent to major
metropolitan areas. The systems we have acquired tend to have a high
concentration of expressway corridors and roaming activity. Since 1996, we have
completed 13 acquisitions, increasing the total population we serve by
approximately 5.6 million and significantly expanding the geographic scope of
our operations. We have upgraded substantially all of our systems to digital
technology and now offer a variety of digital services, including digital voice
services, to approximately 93% of our covered population. At September 30, 1999,
we had approximately $1.1 billion of consolidated indebtedness and a
consolidated stockholders' deficit of approximately $296.2 million. We expect to
incur significant additional indebtedness to fund our capital needs in the
future as we continue to acquire, develop and construct our cellular systems and
grow our subscriber base.

We have a strategic relationship with AT&T Wireless, including a
coast-to-coast roaming agreement that allows our customers to utilize wireless
systems owned by AT&T Wireless, and customers of AT&T Wireless to utilize our
cellular systems, each at favorable prices. We also have roaming agreements with
AirTouch Communications, Inc., Southwestern Bell Mobile Systems, Inc. and other
leading wireless providers.

We have entered into an equally-owned joint venture with AT&T Wireless to
acquire American Cellular for approximately $2.4 billion, including fees and
expenses. American Cellular is one of the largest independent rural cellular
telephone operators in the United States with approximately 398,000 subscribers
and systems covering a total population of approximately 4.8 million as of
September 30, 1999. American Cellular's systems serve markets primarily in the
midwestern and eastern United States. The closing of this offering is not
contingent on the completion of the American Cellular acquisition, which we
expect to occur in the first quarter of 2000.

1
<PAGE>
CELLULAR MARKETS

The following table sets forth information with respect to:

- our existing cellular markets, including the Pennsylvania 2 rural service
area which we are managing and control; and

- the cellular markets of American Cellular.

In addition to the markets listed below, we recently entered into definitive
agreements to acquire cellular licenses which would increase the total
population served by our cellular systems by approximately 0.5 million. Net
population represents total population less minority ownership interests in our
licenses. We determine market penetration by dividing total subscribers in each
of our cellular licensed areas at the end of the period by the estimated total
population covered by the applicable cellular license or authorization.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
---------------------------------------------------
TOTAL NET TOTAL MARKET
CELLULAR MARKETS POPULATION POPULATION SUBSCRIBERS PENETRATION
---------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
DOBSON
Northern Region (portions of NY, OH and PA)............ 2,624,000 2,624,000 224,700 8.6%
Central Region (portions of KS, MO, OK and TX)......... 1,254,000 1,164,000 65,800 5.2
Western Region (portions of AZ and CA)................. 1,081,000 1,003,000 61,100 5.7
Eastern Region (portions of MD, PA and WV)............. 949,000 949,000 72,400 7.6
---------- ---------- -------
Total--Dobson Regions............................ 5,908,000 5,740,000 424,000 7.2
========== ========== =======
AMERICAN CELLULAR
Upper Midwest Region (portions of MI, MN and WI)....... 1,808,000 1,794,000 162,900 9.0
New York Region (portions of NY)....................... 1,084,000 1,073,000 101,100 9.3
Kentucky Region (portions of KY and TN)................ 1,074,000 1,074,000 73,400 6.8
Mid-Atlantic Region (portions of OH, PA and WV)........ 854,000 854,000 60,600 7.1
---------- ---------- -------
Total--American Cellular Regions................. 4,820,000 4,795,000 398,000 8.3
Dobson's proportionate interest in American
Cellular..................................... 2,410,000 2,397,500 199,000 8.3
========== ========== =======
TOTAL DOBSON ON A PROPORTIONATE BASIS.................. 8,318,000 8,137,500 623,000 7.5
========== ========== =======
</TABLE>

STRATEGY

Our strategy is to continue to acquire, develop and operate rural and
suburban cellular systems. The principal elements of our strategy include:

- acquiring and integrating additional cellular systems or licenses serving
rural and suburban areas located adjacent to major metropolitan areas
served by operators with whom we have or expect to establish strategic
relationships;

- further increasing the capacity and coverage of our cellular systems and
those we acquire to attract additional subscribers, to increase the use of
our systems by existing subscribers, to increase roaming activity and to
further enhance the overall efficiency of our network;

- capitalizing on our strategic relationships with AT&T Wireless and
entering into roaming agreements with other operators to allow our
subscribers to use the wireless systems of operators in neighboring
metropolitan areas and rural areas at favorable rates; and

- continuing to distinguish ourself as the leading cellular services
provider in our markets by stressing our service quality, local sales
presence, commitment to the community, attractive rate plans and high
level of customer service.

2
<PAGE>

We were incorporated in Oklahoma on February 3, 1997, although our
predecessors have been engaged in the telecommunications business since 1936.
Our principal executive offices are located at Suite 200, 13439 North Broadway
Extension, Oklahoma City, Oklahoma 73114. Our telephone number is (405) 529-8500
and our internet address is WWW.DOBSON.NET. Information contained on our website
is not a part of this prospectus.

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock Offered.............. 25,000,000 shares

Common Stock To Be Outstanding
After This Offering....................... 25,000,000 shares of Class A common stock
63,253,088 shares of Class B common stock
88,253,088 total shares of common stock

Voting Rights............................. The Class A common stock and the Class B common stock
generally will vote together as a single class on all
matters submitted to a vote of shareholders, except as
required by law. Each share of Class A common stock is
entitled to one vote and each share of Class B common
stock is entitled to ten votes, except that each share
of Class B common stock is entitled to only one vote
with respect to any "going private" transaction.

Use of Proceeds........................... We intend to use the net proceeds of this offering as
follows:
- $372.5 million as a capital contribution to our joint
venture with AT&T Wireless to acquire American Cellular;
- $99.3 million to redeem all outstanding shares of our
Class E preferred stock held by our current
stockholders; and
- the balance for working capital and other general
corporate purposes.
To the extent the net proceeds of this offering are
insufficient to complete our capital contribution to our
joint venture with AT&T Wireless and redeem our class E
preferred stock, we will use funds available to us from
our credit facilities or other sources.

The closing of this offering is not contingent upon
completion of the American Cellular acquisition. If we
do not complete the American Cellular acquisition, we
intend to use the net proceeds otherwise allocated to
the American Cellular acquisition to redeem our Class E
preferred stock and:
- to reduce our outstanding indebtedness and to
potentially redeem a portion of our senior preferred
stock;
- to pay our share of any damages to American Cellular
that may arise under the American Cellular merger
agreement; and
- for working capital and other general corporate
purposes.
We will not receive any proceeds from the sale of
Class A common stock by the selling shareholders
pursuant to their over-allotment option.

Proposed Nasdaq National Market
Symbol.................................. DCEL
</TABLE>

3
<PAGE>

The shares of common stock to be outstanding after this offering do not
include shares of Class A common stock that we will issue upon the exercise of
options granted under our 1996 stock option plan. We have reserved a maximum of
6,723,398 shares of our Class A common stock for issuance upon the exercise of
options granted and to be granted under this plan. After this offering, we will
have outstanding options to purchase an aggregate of 3,653,672 shares of our
Class A common stock at a weighted average exercise price of approximately $1.86
per share.

ABOUT THIS PROSPECTUS

Unless otherwise indicated, all information in this prospectus assumes:

- the filing of our amended and restated certificate of incorporation, which
will become effective immediately prior to the closing of this offering;

- our recapitalization, including a conversion of our old Class A common
stock into Class B common stock, a 111.44 for 1 stock split and the other
transactions described under "Capitalization--The Recapitalization," which
will occur immediately prior to the closing of this offering;

- a price to the public of $21 per share of Class A common stock;

- the distribution of all of the outstanding capital stock of our
subsidiary, Logix Communications Enterprises, Inc., to our current
shareholders, which will occur prior to the closing of this offering; and

- no exercise of the underwriters' over-allotment option.

Information with respect to populations in our license areas are management
estimates based upon Kagan's Cellular Telephone Atlas 1999, Paul Kagan
Associates, Inc., Carmel, California, adjusted to exclude those portions of our
markets not covered by our licenses.

All trademarks and trade names appearing in this prospectus are the property
of their respective holders.

4
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth certain historical consolidated financial and
other data for:

- us as of and for each of the three years in the period ended December 31,
1998 and as of and for each of the nine month periods ended September 30,
1998 and September 30, 1999;

- American Cellular as of and for the period from February 26, 1998 through
December 31, 1998, as of and for the period from February 26, 1998 through
September 30, 1998, and as of and for the nine months ended September 30,
1999; and

- American Cellular's predecessor, PriCellular Corporation, as of and for
each of the two years in the period ended December 31, 1997 and as of and
for the six months ended June 30, 1998.

We derived our summary historical consolidated financial data for each of
the three years in the period ended December 31, 1998, and as of and for the
nine months ended September 30, 1999 from our audited consolidated financial
statements included elsewhere in this prospectus. We derived our summary
historical consolidated financial data for the nine months ended September 30,
1998 from our unaudited consolidated financial statements included elsewhere in
this prospectus which, in our opinion, reflect all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the data presented for
such period.

We derived American Cellular's summary historical consolidated financial
data for the period from February 26, 1998 through December 31, 1998 and for the
nine months ended September 30, 1999 from its audited consolidated financial
statements included elsewhere in this prospectus. We derived the summary
historical consolidated financial data for American Cellular's predecessor,
PriCellular, for the six months ended June 30, 1998 and for each of the two
years in the period ended December 31, 1997 from its audited consolidated
financial statements included elsewhere in this prospectus. We derived American
Cellular's summary historical condensed consolidated financial data for the
period from February 26, 1998 through September 30, 1998 from its unaudited
condensed consolidated financial statements included elsewhere in this
prospectus, which, in the opinion of American Cellular's management, reflect all
adjustments, consisting only of normal recurring accruals considered necessary
for a fair presentation of the results for the interim period.

Our operating results and those of American Cellular for the periods ended
September 30, 1999, September 30, 1998 and June 30, 1998 are not necessarily
indicative of results that may be expected for a full year. American Cellular
was formed on February 26, 1998, but it did not have operations until it
acquired PriCellular on June 25, 1998. You should read the following historical
consolidated financial data in conjunction with "Capitalization," "Selected
Consolidated Financial and Other Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
related notes that we include elsewhere in this prospectus.

In the following tables, EBITDA represents earnings (loss) from continuing
operations before interest income, interest expense, other income, income taxes,
depreciation, amortization and minority interests in income of subsidiaries. We
believe that EBITDA provides meaningful additional information concerning a
company's operating results and its ability to service its long-term debt and
other fixed obligations and to fund its continued growth. Many financial
analysts consider EBITDA to be a meaningful indicator of an entity's ability to
meet its future financial obligations, and they consider growth in EBITDA to be
an indicator of future profitability, especially in a capital-intensive industry
such as wireless telecommunications. You should not construe EBITDA as an
alternative to operating income (loss) as determined in accordance with GAAP, as
an alternative to cash flows from operating activities as determined in
accordance with GAAP or as a measure of liquidity. Because EBITDA is not
calculated in the same manner by all companies, it may not be comparable to
other similarly titled measures of other companies. See our consolidated
statement of cash flows in our consolidated financial statements included
elsewhere in this prospectus. EBITDA margin represents EBITDA as a percentage of
total operating revenues.

We determine market penetration by dividing our total subscribers at the end
of the period by our estimated total population. We calculate average monthly
cellular churn rates based on the number of cellular subscriber cancellations
during the period as a percentage of the weighted average total cellular
subscribers for the period. Average monthly revenues per cellular subscriber
exclude equipment sales and other revenues. For a more complete description of
the calculation of average monthly revenue per cellular subscriber, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Revenues."

5
<PAGE>
DOBSON COMMUNICATIONS CORPORATION

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- ---------------------------
1996 1997 1998 1998 1999
----------- ------------ ------------ ------------ ------------
(UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE AND PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues:
Service revenues............................. $ 17,593 $ 38,410 $ 69,402 $ 47,769 $ 117,892
Roaming revenues............................. 7,852 26,263 66,479 45,916 107,296
Equipment sales and other revenues........... 1,494 2,041 4,154 2,661 9,952
----------- ------------ ------------ ------------ ------------
Total operating revenues................... 26,939 66,714 140,035 96,346 235,140
----------- ------------ ------------ ------------ ------------
Operating expenses:
Cost of service.............................. 6,119 16,431 33,267 22,603 35,762
Cost of equipment............................ 2,571 4,046 8,360 5,166 18,562
Marketing and selling........................ 4,462 10,669 22,393 14,856 34,957
General and administrative................... 3,902 11,555 26,051 16,219 40,795
Depreciation and amortization................ 5,241 16,798 47,110 29,714 100,020
----------- ------------ ------------ ------------ ------------
Total operating expenses................... 22,295 59,499 137,181 88,558 230,096
----------- ------------ ------------ ------------ ------------
Operating income............................... 4,644 7,215 2,854 7,788 5,044
Interest expense............................... (4,284) (27,640) (38,979) (25,039) (82,365)
Other income (expense), net.................... (1,503) 2,777 3,858 3,304 3,411
Minority interests in income of subsidiaries... (675) (1,693) (2,487) (1,963) (2,125)
Income tax benefit............................. 593 3,625 11,469 4,864 28,892
----------- ------------ ------------ ------------ ------------
Loss from continuing operations before
extraordinary items.......................... (1,225) (15,716) (23,285) (11,046) (47,143)
----------- ------------ ------------ ------------ ------------
Income (loss) from discontinued operations..... 331 332 (27,110) (17,185) (41,811)
Extraordinary items............................ (527) (1,350) (2,166) (2,644) --
----------- ------------ ------------ ------------ ------------
Net loss....................................... (1,421) (16,734) (52,561) (30,875) (88,954)
Dividends on preferred stock................... (849) (2,603) (23,955) (16,749) (50,513)
----------- ------------ ------------ ------------ ------------
Net loss applicable to common stockholders..... $ (2,270) $ (19,337) $ (76,516) $ (47,624) $ (139,467)
=========== ============ ============ ============ ============
Net loss applicable to common stockholders per
common share................................. $ (4.80) $ (40.87) $ (161.57) $ (100.65) $ (283.50)
=========== ============ ============ ============ ============
Weighted average common shares outstanding..... 473,152 473,152 473,564 473,152 491,954
=========== ============ ============ ============ ============
Net loss applicable to common stockholders per
common share, after recapitalization......... $ (0.04) $ (0.37) $ (1.45) $ (0.90) $ (2.54)
=========== ============ ============ ============ ============
Weighted average common shares outstanding,
after recapitalization....................... 52,728,059 52,728,059 52,773,972 52,728,059 54,823,354
=========== ============ ============ ============ ============
OTHER FINANCIAL DATA:
Cash flows provided by operating activities.... $ 5,239 $ 6,908 $ 28,024 $ 10,257 $ 11,527
Cash flows used in investing activities........ (43,894) (217,640) (999,063) (293,209) (93,380)
Cash flows provided by financing activities.... 38,904 212,505 990,610 285,240 59,869
EBITDA......................................... 9,885 24,013 49,964 37,502 105,064
EBITDA margin.................................. 36.7% 36.0% 35.7% 38.9% 44.7%
Capital expenditures........................... $ 13,536 $ 17,773 $ 55,289 $ 23,793 $ 40,174
OTHER DATA:
Cellular subscribers (at period end)........... 34,000 100,000 352,000 163,000 424,000
Cellular penetration (at period end)........... 5.8% 6.1% 6.8% 5.8% 7.2%
Average monthly cellular churn rates........... 1.8% 1.9% 2.0% 1.9% 1.9%
Average monthly revenues per cellular
subscriber, excluding
roaming revenues............................. $ 48 $ 41 $ 40 $ 40 $ 34
Average monthly revenues per cellular
subscriber, including
roaming revenues............................. $ 70 $ 69 $ 79 $ 80 $ 65
Cell sites (at period end)..................... 67 135 414 210 459
</TABLE>

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
1999
----------------
($ IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 339
Net fixed assets.......................................... 187,291
Total assets.............................................. 1,666,383
Total debt................................................ 1,059,458
Mandatorily redeemable preferred stock.................... 525,797
Stockholders' deficit..................................... (296,249)
</TABLE>

6
<PAGE>
AMERICAN CELLULAR CORPORATION

<TABLE>
<CAPTION>
PRICELLULAR
(THE PREDECESSOR COMPANY) AMERICAN CELLULAR
---------------------------------- ----------------------------------------------------------
PERIOD FROM PERIOD FROM
YEAR ENDED SIX MONTHS FEBRUARY 26, 1998 FEBRUARY 26, 1998 NINE MONTHS
DECEMBER 31, ENDED (DATE OF FORMATION) (DATE OF FORMATION) ENDED
-------------------- JUNE 30, THROUGH THROUGH SEPTEMBER 30,
1996 1997 1998 DECEMBER 31, 1998 SEPTEMBER 30, 1998 1999
--------- -------- ----------- ------------------- ------------------- --------------
($ IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Operating revenues..... $ 112,616 $181,000 $108,670 $ 122,409 $ 61,105 $212,069
Operating expenses:
Cost of service...... 29,571 48,691 20,911 10,917 4,922 18,154
Cost of equipment.... 10,073 12,841 5,365 7,271 3,246 13,128
Selling, general and
administrative..... 34,502 53,485 30,230 37,625 16,384 54,537
Depreciation and
amortization....... 19,537 28,759 17,553 45,569 22,506 72,607
Nonrecurring
charges............ -- -- 4,889 4,355 4,154 --
--------- -------- -------- ----------- ----------- --------
Total operating
expenses........... 93,683 143,776 78,948 105,737 51,212 158,426
--------- -------- -------- ----------- ----------- --------
Operating income....... $ 18,933 $ 37,224 $ 29,722 $ 16,672 $ 9,893 $ 53,643
========= ======== ======== =========== =========== ========

OTHER FINANCIAL DATA:
Cash flows provided by
operating
activities........... $ 39,371 $ 49,026 $ 11,665 $ 35,295 $ 33,555 $ 43,128
Cash flows used in
investing
activities........... (200,969) (36,284) (80,327) (1,512,745) (1,507,978) (31,394)
Cash flows provided by
(used in) financing
activities........... 138,518 (51,749) 58,765 1,511,465 1,511,465 (2,419)
EBITDA, excluding
nonrecurring
charges.............. 38,470 65,983 52,164 66,596 36,553 126,250
EBITDA margin,
excluding
nonrecurring
charges.............. 34.2% 36.5% 48.0% 54.4% 59.8% 59.5%
Capital expenditures... $ 29,470 $ 25,717 $ 20,517 $ 24,260 $ 6,625 $ 43,581

OTHER DATA:
Cellular subscribers
(at period end)...... 139,800 243,700 286,000 334,500 305,100 398,000
Cellular penetration
(at period end)...... 3.6% 5.3% 5.9% 6.8% 6.2% 8.1%
Average monthly
cellular churn
rates................ 1.6% 1.8% 1.4% 1.8% 1.8% 1.7%
</TABLE>

7
<PAGE>
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA

We derived the following summary unaudited pro forma consolidated financial
data from the unaudited pro forma consolidated financial statements included
elsewhere in this prospectus. The summary unaudited pro forma consolidated
financial data are based on currently available information and assumptions that
we believe are reasonable. The summary unaudited pro forma consolidated
financial data do not purport to represent what our results of operations would
have been if the pro forma transactions had been completed on the dates
indicated, nor do they purport to indicate our future financial position or
results of operations. The summary unaudited pro forma consolidated financial
data give effect to the particular transactions, as of the dates, described in
"Unaudited Pro Forma Consolidated Financial Data." You should read the summary
unaudited pro forma consolidated financial data in conjunction with
"Capitalization," "Unaudited Pro Forma Consolidated Financial Data," "Selected
Consolidated Financial and Other Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the financial statements and
related notes that we include elsewhere in this prospectus.

EBITDA represents earnings (loss) from continuing operations before interest
income, interest expense, other income, income taxes, depreciation, amortization
and minority interests in income of subsidiaries. We believe that EBITDA
provides meaningful additional information concerning a company's operating
results and its ability to service its long-term debt and other fixed
obligations and to fund its continued growth. Many financial analysts consider
EBITDA to be a meaningful indicator of an entity's ability to meet its future
financial obligations, and they consider growth in EBITDA to be an indicator of
future profitability, especially in a capital-intensive industry such as
wireless telecommunications. You should not construe EBITDA as an alternative to
operating income (loss) as determined in accordance with GAAP, as an alternative
to cash flows from operating activities as determined in accordance with GAAP or
as a measure of liquidity. Because EBITDA is not calculated in the same manner
by all companies, it may not be comparable to other similarly titled measures of
other companies. EBITDA margin represents EBITDA as a percentage of total
operating revenues.

8
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1998 SEPTEMBER 30, 1999
--------------------------- ---------------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- ----------- ---------- -----------
(UNAUDITED) (UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues:
Service revenues........................................ $ 69,402 $ 134,188 $117,892 $ 117,892
Roaming revenues........................................ 66,479 94,514 107,296 107,296
Equipment sales and other revenues...................... 4,154 11,601 9,952 9,952
--------- ----------- -------- -----------
Total operating revenues.............................. 140,035 240,303 235,140 235,140
--------- ----------- -------- -----------
Operating costs and expenses:
Cost of services........................................ 33,267 43,532 35,762 35,762
Cost of equipment....................................... 8,360 18,804 18,562 18,562
Marketing and selling................................... 22,393 37,323 34,957 34,957
General and administrative.............................. 26,051 42,412 40,795 40,795
Depreciation and amortization........................... 47,110 117,916 100,020 100,020
--------- ----------- -------- -----------
Total operating expenses.............................. 137,181 259,987 230,096 230,096
--------- ----------- -------- -----------
Operating income (loss)................................... 2,854 (19,684) 5,044 5,044
Interest expense.......................................... (38,979) (90,697) (82,365) (76,456)
Equity in loss of unconsolidated subsidiary............... -- (49,071) -- (31,697)
Other income, net......................................... 3,858 3,539 3,411 3,411
--------- ----------- -------- -----------
Loss before minority interests and taxes.................. (32,267) (155,913) (73,910) (99,698)
Minority interests in income of subsidiaries.............. (2,487) (2,487) (2,125) (2,125)
Income tax benefit........................................ 11,469 41,545 28,892 26,648
--------- ----------- -------- -----------
Loss from continuing operations........................... (23,285) (116,855) (47,143) (75,175)
Dividends on preferred stock.............................. (23,955) (57,962) (50,513) (47,122)
--------- ----------- -------- -----------
Loss from continuing operations applicable to
common stockholders....................................... $ (47,240) $ (174,817) $(97,656) $ (122,297)
========= =========== ======== ===========
Loss from continuing operations applicable to common
stockholders per common share............................. $ (99.75) $ (1.98) $(198.51) $ (1.39)
========= =========== ======== ===========
Weighted average common shares outstanding................ 473,564 88,253,088 491,954 88,253,088
========= =========== ======== ===========
</TABLE>

9
<PAGE>

OTHER DATA:
Cellular subscribers (at period end)...................... 352,000 352,000 424,000 424,000
Cellular penetration (at period end)...................... 6.8% 6.8% 7.2% 7.2%
Average monthly cellular churn rates...................... 2.0% 1.7% 1.9% 1.9%
Average monthly revenues per cellular subscriber,
excluding roaming revenues.............................. $ 40 $ 36 $ 34 $ 34
Average monthly revenues per cellular subscriber,
including roaming revenues.............................. $ 79 $ 61 $ 65 $ 65
Cell sites (at period end)................................ 414 414 459 459
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30,
1999
------------------------
HISTORICAL PRO FORMA
---------- -----------
(UNAUDITED)
($ IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 339 $ 339
Net fixed assets.......................................... 187,291 187,291
Total assets.............................................. 1,666,383 2,046,137
Total debt................................................ 1,059,458 1,080,128
Mandatorily redeemable preferred stock.................... 525,797 440,797
Stockholders' equity (deficit)............................ (296,249) 206,662
</TABLE>

10
<PAGE>
SUMMARY UNAUDITED PROPORTIONATE DATA

The following table sets forth summary unaudited proportionate data of us
and American Cellular on a proportionate combined basis, as adjusted for the pro
forma adjustments described in "Unaudited Pro Forma Consolidated Financial Data"
and "Unaudited Proportionate Adjusted Statements of Operations." The
proportionate presentation is an arithmetic combination of:

- the relevant pro forma data of our consolidated subsidiaries adjusted to
exclude the results attributable to the outstanding minority interests in
our subsidiaries; and

- our 50% share of the pro forma operating results of American Cellular
attributable to our interest in the American Cellular joint venture.

The proportionate presentation has not been prepared in accordance with GAAP and
is not intended to replace our unaudited pro forma consolidated financial data
prepared and presented in accordance with the rules and regulations of the
Commission. Under GAAP, our investment in the American Cellular joint venture
will be accounted for using the equity method of accounting and will be
reflected in a single line item entitled "Investment in unconsolidated
subsidiary" in our balance sheet and "Equity in income (loss) of unconsolidated
subsidiary" in our statement of operations. To the extent that the joint venture
incurs losses in the future, our "Investment in unconsolidated subsidiary" will
be reduced. Because we will account for our interest in the American Cellular
joint venture using the equity method of accounting, our statement of operations
will reflect only our 50% share in the net income or loss of the joint venture.
We are presenting the proportionate data to facilitate a better understanding of
the financial and operating data attributable to our substantial investment in
American Cellular.

EBITDA represents earnings (loss) from continuing operations before interest
income, interest expense, other income, income taxes, depreciation, amortization
and minority interests in income of subsidiaries. We believe that EBITDA
provides meaningful additional information concerning a company's operating
results and its ability to service its long-term debt and other fixed
obligations and to fund its continued growth. Many financial analysts consider
EBITDA to be a meaningful indicator of an entity's ability to meet it's future
financial obligations, and they consider growth in EBITDA to be an indicator of
future profitability, especially in a capital-intensive industry such as
wireless telecommunications. You should not construe EBITDA as an alternative to
operating income (loss) as determined in accordance with GAAP, as an alternative
of cash flows from operating activities as determined in accordance with GAAP or
as a measure of liquidity. Because EBITDA is not calculated in the same manner
by all companies, it may not be comparable to other similarly titled measures of
other companies. EBITDA, on a proportionate basis, includes our pro forma
EBITDA, as adjusted to exclude the portion of our EBITDA attributable to the
outstanding minority interests in our

11
<PAGE>

subsidiaries, plus our 50% interest in American Cellular's pro forma EBITDA.
EBITDA margin represents EBITDA as a percentage of total operating revenues.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 NINE MONTHS ENDED SEPTEMBER 30, 1999
------------------------------------- ---------------------------------------
HISTORICAL PROPORTIONATE HISTORICAL PROPORTIONATE
----------------- ----------------- ------------------ ------------------
(UNAUDITED) (UNAUDITED)
($ IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C>
SUPPLEMENTAL PROPORTIONATE DATA:
Operating revenues................. $ 140,035 $ 336,161 $ 235,140 $ 329,004
EBITDA............................. 49,964 148,222 105,064 163,841
EBITDA margin...................... 35.7% 44.1% 44.7% 49.8%
Cellular subscribers (at period
end)............................. 352,000 519,300 424,000 623,000
Average monthly revenue per
subscriber, excluding roaming
revenues......................... $ 40 $ 40 $ 34 $ 32
Average monthly revenue per
subscriber, including roaming
revenues......................... $ 79 $ 61 $ 65 $ 61

Cash and cash equivalents................................................ $ 339 $ 22,039
Net fixed assets......................................................... 187,291 274,791
Total assets............................................................. 1,666,383 3,191,283
Total debt............................................................... 1,059,458 1,896,958
Mandatorily redeemable preferred stock................................... 525,797 440,797
</TABLE>

12
<PAGE>
RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW
BEFORE YOU DECIDE TO BUY OUR CLASS A COMMON STOCK.

RISKS RELATED TO OUR ACQUISITION STRATEGY

IF WE ARE UNABLE TO COMPLETE THE AMERICAN CELLULAR ACQUISITION, WE MAY BE LIABLE
FOR SUBSTANTIAL DAMAGES OWED TO AMERICAN CELLULAR AND THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE SUBSTANTIALLY.

The closing of this offering is not contingent upon completion of the
American Cellular acquisition, which is not expected to occur until after we
complete this offering. The American Cellular acquisition is subject to a number
of closing conditions, including approval by the FCC. If we are unable to
complete the American Cellular acquisition, we would not receive any of the
benefits or synergies we expect the acquisition will provide. If the joint
venture defaults in its obligation to close the American Cellular acquisition,
it will be required to pay up to $500.0 million of damages incurred by American
Cellular as a result of that default. We will be required to pay our share of
all damages that the joint venture may be required to pay to American Cellular.
See "The American Cellular Acquisition." As a result, the trading price of our
common stock could decline substantially, and you could lose all or part of your
investment.

WE WILL SHARE CONTROL OF THE AMERICAN CELLULAR JOINT VENTURE WITH AT&T WIRELESS,
WHICH MAY LIMIT OUR FLEXIBILITY IN MAKING MANAGEMENT DECISIONS AFFECTING THE
JOINT VENTURE AND AMERICAN CELLULAR. IF THE JOINT VENTURE IS UNSUCCESSFUL, THE
COST OF UNWINDING OUR OPERATIONS THAT HAD BEEN INTEGRATED WITH IT COULD BE
COSTLY AND DISRUPTIVE TO OUR BUSINESS AND HAVE A MATERIAL ADVERSE EFFECT ON
OUR OPERATIONS.

Following the American Cellular acquisition, we and AT&T Wireless will each
own a 50% interest in the joint venture that will own American Cellular. A
management committee of four persons, two selected by us and two by AT&T
Wireless will govern the joint venture. The management committee will act by a
majority vote except for specified matters, which will require unanimous
consent.

Even though we will be responsible for the day-to-day operation of American
Cellular, the approval requirements imposed by the joint venture agreement may
limit our flexibility and ability to implement strategies and tactics that we
believe are in our and the joint venture's best interests. In the event the
joint venture is unsuccessful, we may be required to unwind those of our
operations that had been integrated with American Cellular, which could be
costly and disruptive to our business,and have a material adverse effect on our
operations.

WE MAY NEED TO CONTRIBUTE ADDITIONAL FUNDS TO OUR AMERICAN CELLULAR JOINT
VENTURE TO PROTECT OUR INVESTMENT IN THE JOINT VENTURE, WHICH COULD STRAIN OUR
FINANCIAL RESOURCES AND LIMIT OUR ABILITY TO PURSUE OTHER BUSINESS
OPPORTUNITIES.

13
<PAGE>

THE NUMBER OF CELLULAR SYSTEMS AND BUSINESSES AVAILABLE FOR ACQUISITION IS
LIMITED. WE MAY NOT BE SUCCESSFUL IN CONSUMMATING AND INTEGRATING FUTURE
ACQUISITIONS AND THE CELLULAR SYSTEMS WE ACQUIRE MAY BE UNSUCCESSFUL WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS AND OUR STOCK PRICE COULD DECLINE SUBSTANTIALLY.

A substantial part of our growth has been and is expected to continue to be
from acquisitions of cellular systems or businesses. In addition, the cellular
systems we acquire may not perform as we expect. Our acquisition strategy is
subject to a number of risks, including:

- there are a limited number of cellular systems available for acquisition
that meet our criteria and the competition among purchasers for these
cellular systems is increasing;

- we may be required to raise additional financing to consummate future
acquisitions and that financing may not be available to us on acceptable
terms;

- required regulatory approvals may result in unanticipated delays in
completing acquisitions;

- we may fail to consummate our pending acquisitions;

- acquired cellular systems may not support the indebtedness we incur or
equity we issue to acquire or develop those systems; and

- we may not be successful in integrating acquisitions we may make.

The expansion of our operations, including through the American Cellular
acquisition, may place a significant strain on our management, financial and
other resources. Our ability to manage future growth will depend upon our
ability to monitor operations, control costs, maintain effective quality
controls and significantly expand our internal management, technical and
accounting systems, all of which will result in higher operating expenses. The
integration of acquired cellular systems and businesses may involve, among other
things, integration of switching, transmission, technical, sales, marketing,
billing, accounting, quality control, management, personnel, payroll, regulatory
compliance and other systems and operating hardware and software, some of which
may be incompatible with our existing systems and therefore must be replaced. In
addition, telecommunications providers generally experience higher customer and
employee turnover rates during and after an acquisition. We cannot assure you
that we will be able to integrate successfully the cellular systems or
businesses we may acquire, including American Cellular. Our failure to integrate
and manage recently acquired cellular systems, including American Cellular,
could have a material adverse effect on our business, operating results and
financial condition. To the extent securities analysts and investors anticipate
that we will continue to grow through acquisitions and we do not do so, our
stock price could decline, perhaps substantially.

WE MAY LOSE THE BENEFITS OF IMPROVEMENTS WE HAVE MADE TO CELLULAR SYSTEMS WE
MANAGE PENDING THEIR ACQUISITION BY US IF WE DO NOT COMPLETE THOSE
ACQUISITIONS, SOME OF WHICH COULD BE COSTLY AND HAVE A MATERIAL ADVERSE EFFECT
ON OUR BUSINESS AND FINANCIAL CONDITION.

From time to time we enter into agreements to manage the operations of
cellular systems we have agreed to acquire pending the closing of the
acquisition and we frequently provide funding for capital expenditures in these
cellular systems prior to their acquisition by us. If any of these pending
acquisitions does not close, we may be forced to dispose of any improvements we
have made, redeploy them in our other cellular systems or abandon them entirely.
We could incur costs and expenses in connection with any disposal, redeployment
or abandonment, some of which could be material.

14
<PAGE>
RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF NET LOSSES. WE EXPECT TO INCUR SIGNIFICANT ADDITIONAL
LOSSES IN THE FUTURE AND OUR OPERATING RESULTS COULD FLUCTUATE SIGNIFICANTLY
ON A QUARTERLY AND ANNUAL BASIS. AS A RESULT, OUR STOCK PRICE COULD FALL
SUBSTANTIALLY AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.

We sustained net losses of $47.1 million for the nine months ended
September 30, 1999, $23.3 million in 1998, $15.7 million in 1997 and
$1.2 million in 1996. On a pro forma basis after giving effect to the
transactions described in our unaudited pro forma consolidated financial data
appearing elsewhere in this prospectus, we would have incurred a loss from
continuing operations of $75.2 million for the nine months ended September 30,
1999 and $116.9 million for 1998. We expect to incur significant additional
losses during the next several years while we continue to acquire, develop and
construct our cellular systems and grow our subscriber base. Similarly, we
expect American Cellular to generate net losses over the next several years, and
we will record our proportionate share of those losses in the line item entitled
"Investment in unconsolidated subsidiary" in our balance sheet and "Equity in
income (loss) of unconsolidated subsidiary" in our statement of operations.
Moreover, we have a significant amount of amortization costs relating to license
acquisition costs from our past acquisitions. We expect that the losses we will
recognize from our investment in American Cellular and the amortization of our
license acquisition costs, together with our substantial interest expense and
preferred stock dividend requirements, will cause us to continue to experience
net losses for the foreseeable future.

In addition, we believe that our future operating results and cash flows
will be subject to quarterly and annual fluctuations due to many factors,
several of which are outside our control. These factors include increased costs
we may incur in connection with the buildout of our networks and the further
development, expansion and upgrade of our cellular systems and those we may
acquire and fluctuations in the demand for our services.

We cannot assure you that we will achieve or sustain profitability. To the
extent our quarterly or annual results of operations fluctuate significantly and
do not meet the expectations of investors and securities analysts, our stock
price could fall substantially and you could lose all or part of your
investment.

OUR CURRENT STOCKHOLDERS WILL CONTINUE TO CONTROL US AFTER THIS OFFERING. IN THE
PAST WE HAVE ENTERED INTO SIGNIFICANT TRANSACTIONS WITH THE HOLDERS OF OUR
CLASS B COMMON STOCK AND WE CANNOT ASSURE YOU THAT FUTURE TRANSACTIONS WITH
THESE AFFILIATED HOLDERS WILL BE ON TERMS AS FAVORABLE TO US AS COULD BE
ATTAINED FROM UNAFFILIATED THIRD PARTIES. THE INTERESTS OF THE HOLDERS OF OUR
CLASS B COMMON STOCK MAY CONFLICT WITH THE INTERESTS OF THE HOLDERS OF OUR
CLASS A COMMON STOCK AND COULD PROHIBIT A FUTURE CHANGE OF CONTROL WHICH COULD
BE BENEFICIAL TO YOU.

Immediately following this offering, our current shareholders, including
Everett R. Dobson, our Chairman of the Board, President and Chief Executive
Officer; Russell L. Dobson, one of our directors and Everett Dobson's father;
John W. Childs and entities which he owns or controls and their co-investors;
and AT&T Wireless will beneficially own an aggregate of 63,253,088 shares of our
Class B common stock, representing approximately 96.2% of the total voting power
of our outstanding common stock or 95.5% if the underwriters exercise their
over-allotment option in full. Everett R. Dobson will beneficially own
52,925,285 shares of our Class B common stock, representing approximately 80.5%
of the total voting power of our outstanding common stock, following this
offering. Historically, we have entered into significant transactions with
Everett R. Dobson, Russell L. Dobson and the John W. Childs affiliates. See
"Certain Transactions." Although we anticipate that future related party
transactions will be on terms at least as favorable to us as could be obtained
from unaffiliated parties, we cannot assure you that this will be the case.

15
<PAGE>

Everett R. Dobson and the other holders of our Class B common stock are also
parties to an investors agreement that enables them to appoint all of our
directors and which provides that they will vote their shares of common stock
together in a manner that will enable them to elect all of our directors, to
approve transactions between us and any of those persons and to control the
outcome of substantially all matters submitted to our stockholders for a vote,
including matters related to a change of control, except as provided by
applicable law. As a result, without the approval of the holders of our Class B
common stock, we would be unable to consummate transactions involving an actual
or potential change of control, including transactions in which you might
otherwise receive a premium for your shares over then current market prices.

WE ARE HIGHLY DEPENDENT ON OUR SUBSTANTIAL RELATIONSHIP WITH AT&T WIRELESS AND
OUR OTHER ROAMING PARTNERS. THE ROAMING RATES WE RECEIVE UNDER OUR ROAMING
AGREEMENTS WITH AT&T WIRELESS AND OUR OTHER ROAMING PARTNERS WILL DECLINE OVER
THE NEXT SEVERAL YEARS AND THESE AGREEMENTS MAY BE TERMINATED IN CERTAIN
CIRCUMSTANCES OR MAY EXPIRE. OUR INABILITY TO LOWER OUR OPERATING COSTS AND
RENEW OR REPLACE OUR ROAMING AGREEMENTS COULD MATERIALLY AND ADVERSELY AFFECT
OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION AND THE TRADING
PRICE OF OUR COMMON STOCK.

Our results of operations are highly dependent on our substantial
relationship with AT&T Wireless and our other roaming partners. Roaming revenues
accounted for approximately 46% of our total revenues for the nine months ended
September 30, 1999. AT&T Wireless's customers traveling through our areas
accounted for approximately 37% of our roaming revenues, or approximately 17% of
our total revenues, in the nine months ended September 30, 1999. The roaming
rates that we receive under our roaming agreements with AT&T Wireless and our
other roaming partners will decline over the next several years. As a result, if
we are unable to lower our operating costs or increase roaming call volume, our
operating income may decline. Our roaming agreement with AT&T Wireless has a
five-year term, which expires in January 2003, and may be terminated by AT&T
Wireless prior to its expiration if we breach any of its material terms. We may
be unable to renegotiate our roaming agreements when they expire or to obtain
additional roaming agreements with other wireless providers, which could lead to
a substantial decline in our revenues and would have a material adverse effect
on our business, results of operations and financial condition and the trading
price of our common stock.

WE HAVE A SIGNIFICANT AMOUNT OF INDEBTEDNESS. THE TERMS OF OUR INDEBTEDNESS MAY
LIMIT OUR ABILITY TO MEET OUR DEBT SERVICE AND DIVIDEND OBLIGATIONS, TO BORROW
ADDITIONAL MONEY AND TO SURVIVE A DOWNTURN IN OUR BUSINESS.

We have a significant amount of indebtedness and we expect that we will
incur significant additional indebtedness in the future as a result of the
buildout and upgrade of our networks and future acquisitions. At September 30,
1999, on a pro forma basis after giving effect to the transactions described in
our unaudited pro forma consolidated financial data appearing elsewhere in this
prospectus, we would have had approximately $1.1 billion of consolidated
indebtedness, approximately $440.8 million aggregate liquidation preference of
senior preferred stock and consolidated stockholders' equity of approximately
$206.7 million. Our current and future levels of debt could have important
consequences to you, including the following:

- we must use a substantial portion of our cash flows from operations to
make principal and interest payments on our indebtedness, thereby reducing
funds that would otherwise be available to us for working capital, capital
expenditures, future business opportunities and other purposes;

- we may not be able to obtain additional financing for future acquisitions,
working capital, capital expenditures and other purposes on terms
favorable to us or at all;

- borrowings under our bank credit facilities are at variable interest
rates, which could cause us to be vulnerable to increases in interest
rates;

16
<PAGE>
- we may be more highly leveraged than many of our competitors, which may
place us at a competitive disadvantage;

- we may be limited in our flexibility to react to changes in our business;
and

- our debt service requirements and the terms of our senior preferred stock
could prevent us from paying cash dividends on our common stock.

We cannot assure you that we will generate sufficient cash flow to service
current or future debt requirements, dividends on our preferred stock or working
capital and capital expenditure requirements.

WE EXPECT TO REQUIRE SUBSTANTIAL AMOUNTS OF CAPITAL IN THE FUTURE TO EXPAND OUR
OPERATIONS, WHICH MAY NOT BE AVAILABLE OR, IF AVAILABLE, MAY NOT BE AVAILABLE
ON ACCEPTABLE TERMS.

We have required, and will likely continue to require, substantial capital
to further develop, expand and upgrade our cellular systems and those we may
acquire. We had capital expenditures of $40.2 million during the first nine
months of 1999 and we expect our capital expenditures for the last three months
of 1999 to be approximately $32.0 million, excluding acquisitions. We have
budgeted approximately $115.0 million to $120.0 million for capital expenditures
in 2000. We may also require additional financing for future acquisitions and to
refinance our debt at its final maturities and to meet our mandatory redemption
provisions on our senior preferred stock. Our sources of additional capital may
include public and private equity and debt financings, including vendor
financing. The extent of the additional financing that we may require will
depend on the success of our operations. We may not be able to obtain additional
financing on terms acceptable to us and within the limitations contained in the
instruments governing our indebtedness and our senior preferred stock, or any
future financing arrangements. Moreover, our issuance of additional equity
securities may be dilutive to our stockholders. If we cannot raise sufficient
funds to meet our planned growth or debt and senior preferred stock repayment
obligations, including upon a change in control, we may delay or abandon some or
all of our planned expansion or seek to sell assets to raise additional funds,
which could materially limit our ability to compete in the cellular industry and
adversely affect the trading price for our Class A common stock.

THE RESTRICTIVE COVENANTS IN OUR DEBT AND SENIOR PREFERRED STOCK INSTRUMENTS MAY
LIMIT OUR OPERATING FLEXIBILITY, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS, RESULTS OF OPERATION AND FINANCIAL CONDITION.

The instruments governing our indebtedness, including the credit facilities
of our subsidiaries, and the certificates of designation governing our senior
preferred stock, impose significant operating and financial restrictions on us.
These restrictions significantly limit, among other things, our ability and that
of our subsidiaries to incur additional indebtedness, pay dividends, repay
junior indebtedness prior to stated maturities, sell assets, make investments,
engage in transactions with stockholders and affiliates, create liens and engage
in some types of mergers or acquisitions. In addition, our credit facilities
require us to maintain specified financial ratios and substantially all our
assets are subject to liens securing our credit facilities. These restrictions
could limit our ability to obtain future financings, make needed capital
expenditures, withstand a future downturn in our business or the economy in
general, or otherwise conduct necessary corporate activities. Our failure to
comply with these restrictions could lead to a default under the terms of the
relevant indebtedness even though we are able to meet debt service and dividend
obligations.

17
<PAGE>

IF WE DEFAULT UNDER OUR CREDIT FACILITIES OR OTHER INDEBTEDNESS, THAT COULD
RESULT IN THE ACCELERATION OF MATURITY DATE OF OUR OTHER INDEBTEDNESS, WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL CONDITION
AND COULD CAUSE OUR STOCK PRICE TO DECLINE.

If there were an event of a default under our credit facilities or other
indebtedness, the holders of the affected indebtedness could elect to declare
all of that indebtedness to be due and payable which, in turn, could cause all
of our other indebtedness could become due and payable. We cannot assure you
that we and our subsidiaries would have sufficient funds available to make these
payments or that we would be able to obtain sufficient funds from alternative
sources to make these payments. Even if we could obtain additional financing, we
cannot assure you that the terms would be favorable to us. If the amounts
outstanding under our credit facilities were accelerated, our lenders could
proceed against our assets and the stock of our subsidiaries. As a result, any
event of default could have a material adverse effect on our business and
financial condition, and could cause our stock price to decline substantially.
If this occurs, you could lose all or part of your investment.

WE INTEND TO DISTRIBUTE, PRIOR TO THIS OFFERING, THE STOCK OF OUR SUBSIDIARY,
LOGIX, TO OUR CURRENT STOCKHOLDERS. THE DISTRIBUTION OF THE LOGIX STOCK
FOLLOWED BY A SALE OF LOGIX MAY HAVE ADVERSE TAX CONSEQUENCES TO US.

Prior to the consummation of this offering, we intend to distribute the
stock of our subsidiary, Logix, to the current holders of our common and
Class D preferred stock. Purchasers of our Class A common stock in this offering
will not participate in the distribution. We do not intend to seek a ruling from
the Internal Revenue Service regarding the tax consequences to us as a result of
the distribution of Logix stock. We believe that distributees of the Logix stock
may elect to sell Logix following this distribution. If a sale of Logix occurs
within two years following the distribution of the Logix stock, the distribution
of the Logix stock would be a taxable transaction to us, and, we would realize
taxable income equal to the amount by which the value of Logix at the time of
the distribution exceeded our tax basis in Logix. While we believe that our
accumulated net operating losses for federal income tax purposes would
significantly offset the amount of any additional taxable income attributable to
the distribution of the Logix stock, to the extent our accumulated net operating
losses are not sufficient to offset the amount of additional taxable income, we
would be required to pay income tax based upon the amount by which any
additional taxable income exceeded our available net operating losses, plus any
applicable penalties and interest. In this event our ability to utilize net
operating losses to offset future taxable income, if any, would be diminished or
eliminated.

WE DEPEND ON THIRD-PARTY SERVICE MARKS TO MARKET OUR PRODUCTS AND SERVICES. THE
LOSS OF THE RIGHT TO USE THESE SERVICE MARKS OR THE DIMINISHED MARKETING
APPEAL OF THESE SERVICE MARKS COULD ADVERSELY AFFECT OUR BUSINESS.

We use the registered service marks CELLULAR ONE-Registered Trademark- and
AIRTOUCH-TM- CELLULAR-Registered Trademark- to promote the services we offer in
many of our license areas. American Cellular uses the registered service mark
CELLULAR ONE-Registered Trademark- for all of its services. We have agreements
with Cellular One Group and Vodafone AirTouch PLC that govern our use of the
CELLULAR ONE-Registered Trademark- and AIRTOUCH-TM-
CELLULAR-Registered Trademark- service marks, respectively. Under these
agreements, we must meet specified operating and service quality standards for
our systems. If the owners of these service marks terminate our license
agreements because we fail to meet the applicable operating or service quality
standards, or if the names CELLULAR ONE-Registered Trademark- or AIRTOUCH-TM-
CELLULAR-Registered Trademark- were to suffer diminished marketing appeal, our
ability both to attract new subscribers and to retain existing subscribers in
the applicable markets could be materially impaired.

18
<PAGE>

OUR BUSINESS DEPENDS ON THE EFFORTS OF OUR KEY PERSONNEL. THE LOSS OF KEY
PERSONNEL IN A COMPETITIVE EMPLOYMENT ENVIRONMENT COULD AFFECT OUR GROWTH AND
FUTURE SUCCESS.

Our success depends on the continued employment of Everett R. Dobson, our
chief executive officer, G. Edward Evans, president of our cellular
subsidiaries, and Bruce R. Knooihuizen, our chief financial officer, any of whom
may terminate their employment with us at any time. We have no formal employment
agreements with any of our key employees. There is intense competition for
qualified personnel in our industry and the limited availability of qualified
individuals could become an issue of increasing concern in the future. Our
financial condition depends upon qualified personnel implementing a successful
business plan. The loss of any of the individuals listed above could adversely
affect our business.

POTENTIAL FAILURE OF COMPUTER SYSTEMS TO BECOME YEAR 2000 COMPLIANT MAY
ADVERSELY AFFECT OUR OPERATIONS.

Many computer systems and applications, including those embedded in
equipment and facilities, use two digit rather than four digit date fields to
designate an applicable year. As a result, these systems and applications may
not properly recognize the year 2000 or process data that includes it,
potentially causing data miscalculations, inaccuracies, operational malfunctions
or failures. In our business, these failures could result in our inability to
deliver calls to customers or to bill customers for the services that we provide
to them.

If our automated systems or those of our vendors are not year 2000
compliant, we could experience interruptions in services provided by and to us,
which could have a material adverse effect on our business, financial condition
and results of operations. Similarly, if the automated systems of American
Cellular and those of its vendors are not year 2000 compliant, American Cellular
could experience interruptions in service provided by and to American Cellular.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Impact of Year 2000 Issue."

RISKS RELATED TO OUR INDUSTRY

WE FACE INTENSE COMPETITION IN OUR BUSINESS AND MANY OF OUR COMPETITORS HAVE
GREATER RESOURCES THAN DO WE, WHICH COULD PROVIDE THEM WITH AN ADVANTAGE IN
COMPETING WITH US.

We compete with providers of cellular services, personal communications
services and other wireless services, including enhanced specialized mobile
radio networks. Currently, the FCC authorizes two cellular licensees, up to six
personal communications service licensees and one enhanced specialized mobile
radio network licensee to operate in each license area. We also compete,
although to a lesser extent, with resellers, paging companies and landline
telephone service providers. Many of our existing and potential competitors have
substantially greater financial, personnel, technical, marketing, sales and
distribution resources than we do.

AT&T Wireless, Nextel Communications and Sprint PCS operate substantially
nationwide networks, and Bell Atlantic Mobile Systems, VoiceStream Wireless
Corporation and Vodafone AirTouch, among others, through joint ventures and
affiliation arrangements, could operate a substantially nationwide wireless
system. If any of our roaming partners, including AT&T Wireless, were to acquire
a personal communications service license for any of our markets, they could
build out personal communications service networks in our markets to provide
their customers wireless service, which would reduce our roaming revenues. Any
increased competition from personal communications service providers in rural
markets covered by our systems could also have the effect of further reducing
the roaming rates we could charge. Although AT&T Wireless has agreed not to
build out personal communications service networks in any of the markets
currently served by American Cellular for five years after the consummation of
the American Cellular acquisition, AT&T Wireless is not contractually

19
<PAGE>

restricted from building out a competing personal communications service network
in our markets. See "The American Cellular Acquisition--Operating Agreements."

We may also face competition from other technologies developed in the
future, including, but not limited to, satellite systems and services provided
over spectrum allocated by the FCC to general wireless communications services
and local multipoint distribution services. See "--Risks Related to Our
Business--We are highly dependent on our substantial relationship with AT&T
Wireless and our other roaming partners."

OUR BUSINESS IS REGULATED AND THERE IS POTENTIAL FOR ADVERSE REGULATORY CHANGE.
WE MAY BE UNABLE TO OBTAIN REGULATORY APPROVALS WHICH COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR OPERATIONS AND THE TRADING PRICE OF OUR COMMON STOCK.

The FCC regulates the licensing, construction, operation, acquisition and
sale of our cellular systems, as well as the number of cellular and other
wireless licensees permitted in each of our markets. We have experienced
substantial growth through acquisitions, each of which require review by the
FCC. If FCC approvals of any of our future acquisitions were substantially
delayed or, denied, we may experience a substantial reduction in the growth of
our future revenues and results of operations and the trading price of our
common stock could decline. Changes in the regulation of wireless activities and
wireless carriers or the loss of any license or licensed area could have a
material adverse effect on our operations and the trading price of our common
stock. In addition, some aspects of the Telecommunications Act of 1996 place
additional burdens upon us or subject us to increased competition and increase
our costs of doing business. All of our cellular licenses are subject to renewal
upon expiration of each license's initial ten-year term. Grants of cellular
renewals are based upon FCC rules establishing a presumption in favor of
licensees that have complied with their regulatory obligations during the
ten-year license period. However, we cannot assure you that the FCC will grant
us any renewal applications or that our future applications will be free from
challenge.

CONCERNS ABOUT HEALTH AND SAFETY-RELATED RISKS ASSOCIATED WITH WIRELESS
HANDSETS, AND THE POSSIBILITY OF RELATED LEGISLATION, MAY AFFECT OUR
PROSPECTS.

Media reports have suggested that radio frequency emissions from portable
wireless handsets may be linked to cancer and may interfere with pacemakers and
other electronic medical devices. These and other health and safety-related
concerns over radio frequency emissions may have the effect of discouraging the
use of wireless handsets, which could have a material adverse effect on our
business.

20
<PAGE>
Several states have proposed or enacted legislation that would limit or
prohibit the use or possession of mobile phones while driving an automobile. If
adopted, this legislation could have an adverse effect on our business.

RISKS RELATED TO THIS OFFERING

THERE MAY NOT BE AN ACTIVE MARKET FOR OUR CLASS A COMMON STOCK AND ANY FUTURE
TRADING PRICE OF OUR COMMON STOCK MAY DECLINE, MAKING IT DIFFICULT FOR YOU TO
SELL YOUR STOCK.

This is our initial public offering, which means that there is no current
market for our Class A common stock. We cannot assure you that after this
offering our stock will be traded actively. An illiquid market for our stock may
result in price volatility and poor execution of buy and sell orders for
investors. The initial public offering price may bear no relationship to the
price at which the Class A common stock will trade upon completion of this
offering.

Historically, stock prices and trading volumes for newly public companies
fluctuate widely for a number of reasons, including some reasons that may be
unrelated to their businesses or results of operations. This market volatility
could depress the price of our Class A common stock without regard to our
operating performance. In addition, our operating results may be below the
expectations of public market analysts and investors. If this were to occur, the
market price of our common stock could decrease, perhaps significantly.

The offering price of our Class A common stock has been determined by
negotiations with our underwriters. We have historically had net operating
losses, we are in a dynamic sector of the business community and we are subject
to intense competition. These factors may result in a trading price of our Class
A common stock which is less than the offering price.

FUTURE SALES OF OUR CLASS A COMMON STOCK COULD ADVERSELY AFFECT ITS MARKET PRICE
AND IMPEDE OUR ABILITY TO RAISE CAPITAL THROUGH FUTURE ISSUANCES OF EQUITY
SECURITIES.

Sales of substantial amounts of our common stock in the public market
following this offering, or the appearance that a large number of shares is
available for sale, could adversely affect the market price for our Class A
common stock. The number of shares of our common stock available for sale in the
public market will be limited by lock-up agreements under which the holders of
substantially all of our outstanding shares of our common stock and options to
purchase our common stock will agree not to sell or otherwise dispose of any of
their shares for a period of 180 days after the date of this prospectus without
the prior written consent of Lehman Brothers Inc. and Salomon Smith Barney.
However, Lehman Brothers Inc. and Salomon Smith Barney may, in their sole
discretion and at any time without notice, release all or any portion of the
securities subject to lock-up agreements. In addition to the adverse effect a
price decline could have on holders of our common stock, that decline would
likely impede our ability to raise capital through the issuance of additional
shares of common stock or other equity securities. See "Shares Eligible for
Future Sale."

YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF APPROXIMATELY $27.23 PER
SHARE.

The initial public offering price is substantially higher than the net
tangible book value per share of the outstanding Class A common stock
immediately after this offering. Accordingly, if you purchase our Class A common
stock in this offering, you will pay a price per share that substantially
exceeds the book value of our tangible assets after subtracting our liabilities
and will contribute more dollars per share than did our stockholders. As a
result, you will incur immediate and substantial dilution of $27.23 in the net
tangible book value per share of the common stock from the price you pay for our
Class A common stock in this offering.

21
<PAGE>

THERE ARE RISKS THAT MAY MAKE IT DIFFICULT FOR US TO ACHIEVE THE OUTCOMES
PREDICTED IN OUR FORWARD-LOOKING STATEMENTS.

Many of the statements included in this prospectus, including the
description of our plans, strategies, capital expenditures, Year 2000
preparedness, pending or possible acquisitions, anticipated cost savings and
financing plans are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. You can
generally identify forward-looking statements by the use of terminology such as
"may," "will," "expect," "intend," "plan," "estimate," "anticipate," "believe,"
or similar phrases. Our actual future performance could differ materially from
these forward-looking statements. These forward-looking statements involve a
number of risks and uncertainties. Important factors that could cause actual
results to differ materially from our expectations include those risks
identified in the foregoing "Risk Factors," as well as other matters not yet
known to us or not currently considered material by us.

We caution you not to place undue reliance on these forward-looking
statements. All written and oral forward-looking statements attributable to us
or persons acting on our behalf are qualified in their entirety by these
cautionary statements.

22
<PAGE>
USE OF PROCEEDS

The net proceeds from the sale of the shares of Class A common stock we are
offering will be approximately $489.8 million ($525.1 million if the
underwriters exercise their over-allotment option in full), assuming an initial
public offering price of $21 per share and after deducting underwriting
discounts and commissions and estimated offering expenses. We will not receive
any proceeds from the sale of Class A common stock by the selling shareholders
pursuant to their over-allotment option.

We intend to use $372.5 million of the net proceeds of this offering as a
capital contribution to our joint venture with AT&T Wireless. The joint venture
will use these proceeds, together with an equivalent contribution to the joint
venture by AT&T Wireless and proceeds from the joint venture's bank credit
facility, to acquire American Cellular. We intend to use $99.3 million of the
net proceeds of this offering to redeem all outstanding shares of our Class E
preferred stock held by our current stockholders, which will be issued upon
conversion of all outstanding shares of our Class D preferred stock in our
recapitalization. To the extent the net proceeds of this offering are
insufficient to complete our capital contribution to our joint venture with AT&T
Wireless and redeem our Class E preferred stock, we will use funds available to
us from our credit facilities and other sources. We intend to use any remaining
net proceeds for working capital and other general corporate purposes.

- to reduce our outstanding indebtedness and to potentially redeem a portion
of our senior preferred stock;

- to pay our share of any damages to American Cellular that may arise under
the American Cellular merger agreement; and

- for working capital and other general corporate purposes.

We intend to invest the net proceeds in short-term, interest bearing,
investment grade securities pending their use as described above. See "The
American Cellular Acquisition."

DIVIDEND POLICY

We paid cash dividends of approximately $7.6 million to our common
stockholders in 1997. Since then, we have not paid any cash dividends to our
common stockholders. See "Certain Transactions." We currently intend to retain
all of our earnings to finance our operations, repay indebtedness and fund
future growth. We do not expect to pay any dividends on our common stock for the
foreseeable future. In addition, covenants contained in the instruments
governing our bank credit facilities and our outstanding preferred stock limit
our ability to pay cash dividends on our common stock. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operation--Liquidity and Capital Resources" and "Description of Capital
Stock--Preferred Stock."

DILUTION

At September 30, 1999, we had a net tangible book value of approximately
$(1.0) billion, or $(16.43) per share of Class A common stock after giving
effect to the conversion of our Class D preferred stock. Net tangible book value
per share of Class A common stock at any date represents the amount of our total
tangible assets minus total liabilities divided by the total number of our
outstanding shares of Class A common stock after giving effect to the conversion
of all outstanding shares of Class B common stock into Class A common stock.
After giving effect to the sale of the shares of Class A common stock offered by
this prospectus at an assumed initial public offering price of $21 per share
(the midpoint of the range shown on the cover page of this prospectus) and the

23
<PAGE>

application of the estimated net proceeds as described in "Use of Proceeds," our
pro forma net tangible book value would have been approximately
$(549.4) million, or $(6.23) per share. Thus, under these assumptions,
purchasers of our Class A common stock offered by this prospectus will pay $21
per share and will receive shares with a net tangible book value per share of
Class A common stock of $(6.23), which represents an immediate dilution of
$27.23 per share.

The following table illustrates this per share dilution:

<TABLE>
<S> <C>
Assumed initial public offering price per share............. $ 21.00
------------
Net tangible book value per share of Class A common stock at
September 30, 1999........................................ (16.43)
Increase in pro forma net tangible book value per share of
Class A common stock attributable to new investors........ 10.20
------------
Pro forma net tangible book value per share of Class A
common stock after this offering.......................... (6.23)
------------
Dilution per share of Class A common stock to new
investors................................................. $ 27.23
============
</TABLE>

The foregoing computation of dilution excludes an aggregate of approximately
3,653,672 shares of our Class A common stock purchasable at a weighted average
exercise price of approximately $1.86 per share upon the exercise of outstanding
stock options, 1,238,210 of which are currently exercisable.

24
<PAGE>
CAPITALIZATION

The following table sets forth our consolidated capitalization as of
September 30, 1999 adjusted to reflect our recapitalization described below, and
on a pro forma basis to reflect:

- the consummation of this offering of 25,000,000 shares of Class A common
stock at an assumed offering price of $21 per share;

- our acquisition of a 50% interest in the American Cellular joint venture
and its acquisition of American Cellular;

- the redemption of all of our outstanding Class E preferred stock;

- the establishment of a new credit facility to replace the existing credit
facilities of our subsidiaries, Dobson Operating Company and Dobson
Cellular Operations Company;

- the purchase of all $160.0 million aggregate principal amount of our
11 3/4% senior notes using proceeds provided by our new bank credit
facility; and

- the distribution, prior to the consummation of this offering, of all of
the outstanding capital stock of our subsidiary, Logix, to our current
shareholders.

You should read this table together with "Selected Consolidated Financial
and Other Data," "Unaudited Pro Forma Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the historical financial statements and notes thereto included
elsewhere in this prospectus.

If our joint venture with AT&T Wireless does not complete the American
Cellular acquisition, cash and cash equivalents on a pro forma basis would
increase by $372.5 million. In that event, we intend to use the net proceeds
allocated for the American Cellular joint venture as discussed under "Use of
Proceeds."

The term "restricted investments" includes securities that we have pledged
to secure interest payments on our Dobson/Sygnet 12 1/4% senior notes. The
September 30, 1999 pro forma information does not reflect the consummation of
our pending acquisitions, which have an aggregate purchase price of
$165.0 million, including expected costs associated with the aquisitions. We
expect to fund these acquisitions by drawing on our bank facilities.

The following table excludes shares of Class A common stock that we will
issue upon the exercise of options granted under our 1996 stock option plan. We
have reserved a maximum of 6,723,398 shares of our Class A common stock for
issuance upon the exercise of options granted under this plan. After this
offering, we will have outstanding options to purchase an aggregate of 3,653,672
shares of our Class A common stock at a weighted average exercise price of
approximately $1.86 per share.

25
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
---------------------------------
AS ADJUSTED
FOR RECAPITALIZATION PRO FORMA
-------------------- ----------
(UNAUDITED)
($ IN THOUSANDS)
<S> <C> <C>

Cash and cash equivalents................................... $ 339 $ 339
Restricted investments...................................... 57,771 57,771
---------- ----------
Total cash and restricted investments..................... $ 58,110 $ 58,110
========== ==========
Long term debt, including current maturities:
Credit facilities:
Existing Dobson Operating Company and Dobson Cellular
Operations Company credit facilities.................. $ 272,000 $ --
New credit facility..................................... -- 452,670
Existing Dobson/Sygnet credit facility.................. 406,000 406,000
Dobson/Sygnet notes....................................... 200,000 200,000
Senior notes.............................................. 160,000 --
Other long-term debt...................................... 3,958 3,958
---------- ----------
Total long-term debt.................................... 1,041,958 1,062,628
---------- ----------
Minority interests.......................................... 27,110 27,110
---------- ----------
12 1/4% senior preferred stock, $1.00 par value, 734,000
shares authorized, 278,872 shares issued and outstanding
on an as adjusted and pro forma basis, net of discount.... 265,395 265,395
13% senior preferred stock, $1.00 par value, 500,000 shares
authorized, 175,402 shares issued and outstanding on an as
adjusted and pro forma basis.............................. 175,402 175,402
Class E preferred stock, $1.00 par value, 85,000 shares
authorized, 75,093.7 shares issued and outstanding on an
as adjusted basis and none authorized, issued or
outstanding on a pro forma basis.......................... 85,000 --

Stockholders' equity:
Preferred stock, $1.00 par value, shares
authorized, no shares issued and outstanding on an as
adjusted or a pro forma basis........................... -- --
Class A common stock, $.001 par value, shares
authorized, no shares issued and outstanding on an as
adjusted basis, and 25,000,000 shares issued and
outstanding on a pro forma basis........................ -- 25
Class B common stock, $.001 par value, shares
authorized, 63,253,088 shares issued and outstanding on
an as adjusted and pro forma basis...................... 63 63
Paid-in capital........................................... 18,550 508,338
Retained deficit.......................................... (314,862) (301,764)
---------- ----------
Total stockholders' (deficit) equity.................... (296,249) 206,662
---------- ----------
Total capitalization.................................. $1,298,616 $1,737,197
========== ==========
</TABLE>

26
<PAGE>
THE RECAPITALIZATION

We will complete our recapitalization immediately prior to the closing of
this offering. Our recapitalization will include:

- the conversion of our outstanding pre-recapitalization Class D preferred
stock into one share of old Class A common stock and one share of Class E
preferred stock;

- the conversion of our old Class A common stock into Class B common stock;

- the retirement of 81,198 shares of old Class A common stock held as
treasury stock;

- the creation of the Class A common stock to be issued in this offering;

- a 111.44 for 1 stock split of our Class B common stock;

- the retirement of each share of our outstanding pre-recapitalization
Class A preferred stock, which is owned by one of our subsidiaries;

- the amendment of our 1996 stock option plan to permit the issuance of
options exercisable into Class A common stock; and

- the conversion of outstanding options exercisable into old Class B or old
Class C common stock into options exercisable into Class A common stock.

Our pre-recapitalization Class D preferred stock will be retired immediately
following its conversion to old Class A common stock and Class E preferred
stock. The Class E preferred stock will be retired immediately following its
redemption with proceeds from this offering. Upon completion of this offering
and the use of the proceeds therefrom, we will have outstanding only Class A
common stock, Class B common stock, our 12 1/4% senior preferred stock and our
13% senior preferred stock.

27
<PAGE>
THE AMERICAN CELLULAR ACQUISITION

OVERVIEW

In October 1999, we entered into an equally-owned joint venture with AT&T
Wireless to acquire, own and operate American Cellular. The aggregate
acquisition price for American Cellular is $2.4 billion, including fees and
expenses. American Cellular is one of the largest independent rural cellular
telephone operators in the United States, with cellular telephone systems
located primarily in rural areas of the midwestern and eastern United States.
The financing for the American Cellular acquisition will come from a combination
of equity contributions of $372.5 million by each of AT&T Wireless and us, and
by borrowings under the joint venture's proposed new $1.75 billion credit
facility.

THE ACQUISITION

The purchase price for American Cellular will bear interest at an annual
rate of 8% from January 1, 2000 until paid. If the joint venture defaults in its
obligations to close the American Cellular acquisition, it will be required to
pay up to $500.0 million of damages incurred by American Cellular as a result of
that default. However, the joint venture is only required to pay $100.0 million
of liquidated damages to American Cellular if the joint venture's default
results from the refusal of its bank lenders to provide funds under the joint
venture's credit facility for reasons other than:

- the joint venture's breach of its obligations to the bank lenders;

- the joint venture's failure to satisfy funding conditions that are within
its control; or

- the joint venture's inability to reach a definitive loan agreement with
its bank lenders.

We will be required to pay our share of all damages that the joint venture may
be required to pay to American Cellular.

The merger agreement contains several standard representations and
warranties of the parties and completion of the American Cellular acquisition is
subject to the satisfaction of several standard mutual conditions, including,
among others:

- the receipt of an FCC "final order" consenting to the change of control of
American Cellular;

- the expiration or termination of the applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; and

- the receipt of any other necessary federal or state regulatory approvals.

In addition, the joint venture's obligation to complete the acquisition is
subject to satisfaction of, among others, the following conditions:

- the continuing approval of the transaction by American Cellular's
shareholders;

- not more than 5% of the holders of the outstanding Class A common stock of
American Cellular shall have demanded appraisal rights for their shares;

- the repayment of certain indebtedness owed by American Cellular's senior
management to American Cellular; and

- the absence of any material impairment in American Cellular's ability to
consummate the American Cellular merger.

There are no material conditions to be satisfied by the joint venture other
than the payment by the joint venture of the merger consideration.

Either American Cellular or the joint venture may terminate the merger
agreement if the American Cellular acquisition has not been completed by
April 5, 2000. This date will be extended to

28
<PAGE>

October 5, 2000 if the only unsatisfied closing condition remaining on April 5,
2000 is the approval of the merger by regulatory authorities, including FCC
approval and clearance under the Hart-Scott-Rodino Act.

In addition, the joint venture may terminate the merger agreement if
American Cellular's Class A stockholders do not approve the transaction. The
holders of at least 70% of American Cellular's Class A common stock have entered
into a voting agreement with the joint venture under which they have agreed to
vote their shares in favor of the merger.

THE JOINT VENTURE AGREEMENT

Our joint venture with AT&T Wireless is in the form of an equally-owned
limited liability company. We and AT&T Wireless have agreed to each contribute
$372.5 million in cash to the joint venture to provide a portion of the funds to
be used to consummate the American Cellular acquisition. In the event the
proceeds of this offering are insufficient to permit us to fund our entire
investment in the joint venture, our principal shareholder, the Dobson CC
Limited Partnership has agreed to invest up to $200.0 million in us to enable us
to meet our commitment to the joint venture.

Management of the joint venture will be vested in a four-person management
committee, two members designated by AT&T Wireless and two designated by us. We
have agreed with AT&T Wireless to be responsible for the day-to-day operation of
American Cellular. If we experience a change of control and AT&T Wireless and
its affiliates own at least 80% of the joint venture or, if the joint venture
has converted to a corporation and AT&T Wireless and its affiliates retain at
least 50% of their initial economic interests, then AT&T Wireless and its
affiliates will have the right to initiate a buy/sell procedure to acquire our
interest in the joint venture or to require us to acquire their interest in the
joint venture. Similarly, if AT&T Wireless experiences a change of control and
we own at least 80% of the joint venture or, if the joint venture has converted
to a corporation and we retain at least 50% of our initial economic interest,
then we will have the right to initiate the same buy/sell procedure to acquire
the joint venture interest of AT&T Wireless or to require AT&T Wireless to
acquire our interest in the joint venture. The purchase price for the joint
venture interest would be established by the party initiating the buy/sell
procedure in its sole discretion. In addition, we will lose our right to 50%
representation on the management committee and our power to approve all
significant matters. This offering will not constitute a change of control under
the joint venture agreement.

Before the third anniversary of the American Cellular acquisition, neither
AT&T Wireless nor we may transfer any interest in the joint venture without the
consent of the other. Following the third anniversary of the American Cellular
acquisition, each of AT&T Wireless and we have the right to transfer up to 20%
of our economic interest in the joint venture, subject to a pro rata tag-along
right in favor of the other party. Any transfers above that 20% threshold will
be subject to a right of first refusal in favor of the other party. After the
fifth anniversary of the American Cellular acquisition, either AT&T Wireless or
we may elect to cause the joint venture to convert to a corporation and to
conduct an underwritten initial public offering of up to 20% of the common stock
of the corporate joint venture. Additionally, following the fifth anniversary of
the American Cellular acquisition, whether or not an initial public offering has
occurred, either AT&T Wireless or we may initiate a buy/sell procedure by
proposing a cash purchase price for all of the interest of the party initiating
the procedure.

OPERATING ARRANGEMENTS

In connection with our joint venture, we, AT&T Wireless and American
Cellular have entered into a 20-year operating agreement. So long as American
Cellular continues to meet AT&T Wireless' quality standards applicable generally
to wireless systems using the time division multiple access digital standards
and cellular systems owned and operated by AT&T PCS and its affiliates, AT&T
Wireless has

29
<PAGE>

agreed not to construct, own or acquire a controlling interest in, or manage a
communications system that provides mobile wireless services in areas in which
American Cellular operates its cellular systems for a period of five years
following the closing of the American Cellular acquisition. We believe that
American Cellular will be able to meet AT&T Wireless time division multiple
access quality standards as currently in effect. However, AT&T Wireless may:

- resell communications services provided by American Cellular;

- act as American Cellular's agent for the sale of American Cellular's
communications services;

- continue to provide wireless services to customers of AT&T Wireless in
American Cellular's territory;

- provide or resell wireless telecommunications services to or from specific
locations; and

- act as an agent for other carriers who provide cellular products and
services to national account customers of AT&T Wireless in the geographic
areas in which American Cellular operates.

For five years following the consummation of the American Cellular
acquisition,

- we will be the preferred provider of roaming services for American
Cellular's subscribers who roam in our markets;

- AT&T Wireless will be the preferred provider of roaming services for
American Cellular's subscribers who roam in AT&T Wireless's markets; and

- American Cellular will be the preferred provider of roaming services for
our subscribers and AT&T Wireless's subscribers who roam in American
Cellular's markets.

AT&T Wireless has the right to terminate the roaming preferences described
above upon a merger, consolidation, asset acquisition or other business
combination of AT&T Wireless with a business that:

- has annual telecommunication revenues in excess of $5.0 billion;

- derives less from one-third of its aggregate revenues from wireless
services; and

- owns FCC licenses to offer, and does offer, mobile wireless services
serving more than 25% of the population in the American Cellular markets.

JOINT VENTURE CREDIT FACILITY

The joint venture has received a commitment from Banc of America Securities
LLC and its affiliate, Bank of America, N.A., on behalf of a group of banks to
provide a $1.75 billion credit facility to the joint venture, the proceeds of
which will be used primarily to consummate the American Cellular acquisition.
Based on this commitment, we expect that this credit facility will consist of a
$300.0 million revolving credit facility and three term loan facilities. The
revolving credit facility will mature in 2007. Term loan A, which will mature in
2007, will be a $700.0 million facility; term loan B, which will mature in 2008,
will be a $350.0 million facility; and term loan C, which will mature in 2009,
will be a $400.0 million facility.

Borrowing under these credit facilities will bear interest at variable
rates, subject to reductions based on the joint venture's financial leverage.
Assuming the American Cellular acquisition occurs on or prior to March 31, 2000,
we expect that all these term loan facilities will be fully drawn and that the
joint venture will borrow an aggregate principal amount of $1.67 billion under
this credit facility. The joint venture's obligations under the credit facility
will be secured by a pledge of the stock of American Cellular and its
subsidiaries, and liens on all of the assets of the joint venture and of
American Cellular except its FCC licenses.

The joint venture will be required to amortize the term loan facilities
quarterly in amounts ranging from $42.5 million in 2001 to $196.0 million in
2009. In addition, the joint venture will be required to make prepayments of
amounts received from asset sales, excess cash flows and proceeds from new
borrowings or the sale of equity. The joint venture will have the right to
prepay the credit facility in total or in part at any time subject to the
payment of certain fees.

The credit facility will contain restrictive covenants that, among other
things, will limit the ability of the joint venture to incur additional
indebtedness, create liens and pay dividends. In addition, the joint venture
will be required to maintain certain financial ratios, including a ratio of
total indebtedness to the joint venture's EBITDA of 9.5 to 1; a ratio of the
joint venture's EBITDA to debt service requirements of 1.10 to 1; an interest
coverage ratio of at least 1.25 to 1; and a ratio of the joint venture's EBITDA
minus capital expenditures to debt service requirements of greater than 1.0 to
1.

30
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The accompanying unaudited pro forma balance sheet as of September 30, 1999
gives effect to the following transactions as if they had occurred on
September 30, 1999:

- the consummation of this offering of 25,000,000 shares of Class A common
stock at an assumed offering price of $21 per share;

- our acquisition of a 50% interest in the American Cellular joint venture
and its acquisition of American Cellular;

- the redemption of all of our outstanding Class E preferred stock;

- the establishment of a new credit facility to replace the existing credit
facilities of our subsidiaries, Dobson Operating Company and Dobson
Cellular Operations Company;

- the purchase of all $160.0 million principal aggregate amount of our
11 3/4% senior notes using proceeds provided by our new bank credit
facility; and

- the distribution, prior to the consummation of this offering, of all of
the outstanding capital stock of our subsidiary, Logix, to our current
stockholders.

In addition, the accompanying unaudited pro forma statements of operations
give effect to the above transactions and the following transactions as if each
had occurred on January 1, 1998:

- our second quarter 1999 issuance of $170.0 million aggregate liquidation
amount of our 13% senior preferred stock and the utilization of the net
proceeds from that issuance to redeem all our Class F and G preferred
stock and to reduce our bank debt; and

- for purposes of the unaudited pro forma statement of operations for the
year ended December 31, 1998, our acquisition of Sygnet and the related
financing transactions in December 1998.

As discussed under "Use of Proceeds," the closing of this offering is not
contingent on the completion of the American Cellular acquisition. If our joint
venture with AT&T Wireless does not complete the American Cellular acquisition,
cash and cash equivalents on a pro forma basis would increase by
$372.5 million. In that event, we intend to use the net proceeds allocated to
the American Cellular joint venture as discussed under "Use of Proceeds." If the
American Cellular acquisition is not completed because of the American Cellular
joint venture's fault, we would be required to pay our share of any damages to
American Cellular described in "The American Cellular Acquisition--The
Acquisition."

We provide the following unaudited pro forma consolidated financial
statements and the related notes for informational purposes only. The unaudited
pro forma consolidated financial statements are based upon currently available
information and assumptions that we believe are reasonable. The accompanying
data do not purport to represent what our results of operations would have been
if the pro forma transactions had been completed on the dates indicated, nor do
they purport to indicate our future financial position or results of operations.
You should read the unaudited pro forma consolidated financial statements and
notes thereto in conjunction with "Capitalization," "Selected Consolidated
Financial and Other Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical financial statements and
related notes that we include elsewhere in this prospectus.

31
<PAGE>

DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
DOBSON
COMMUNICATIONS AMERICAN CELLULAR
CORPORATION ADJUSTMENTS SUB-TOTAL ADJUSTMENTS TOTAL
-------------- ----------- ---------- ----------------- ----------
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Operating revenues:
Service revenues................... $ 117,892 $ -- $ 117,892 $ -- $ 117,892
Roaming revenues................... 107,296 -- 107,296 -- 107,296
Equipment sales and other
revenues......................... 9,952 -- 9,952 -- 9,952
--------- ---------- ---------- ----------- ----------
Total operating revenues......... 235,140 -- 235,140 -- 235,140
--------- ---------- ---------- ----------- ----------
Operating expenses:
Cost of services................... 35,762 35,762 -- 35,762
Cost of equipment.................. 18,562 -- 18,562 -- 18,562
Marketing and selling.............. 34,957 -- 34,957 -- 34,957
General and administrative......... 40,795 -- 40,795 -- 40,795
Depreciation and amortization...... 100,020 100,020 -- 100,020
--------- ---------- ---------- ----------- ----------
Total operating expenses......... 230,096 230,096 -- 230,096
--------- ---------- ---------- ----------- ----------
Operating income..................... 5,044 5,044 -- 5,044
--------- ---------- ---------- ----------- ----------
Interest expense..................... (82,365) 5,909 (1) (76,456) -- (76,456)
Equity in loss of unconsolidated
subsidiary......................... -- -- -- (31,697)(4) (31,697)
Other income, net.................... 3,411 -- 3,411 -- 3,411
--------- ---------- ---------- ----------- ----------
Loss before minority interests and
income taxes....................... (73,910) 5,909 (68,001) (31,697) (99,698)
Minority interests in income of
subsidiaries....................... (2,125) -- (2,125) -- (2,125)
--------- ---------- ---------- ----------- ----------
Loss from continuing operations
before income taxes................ (76,035) 5,909 (70,126) (31,697) (101,823)
Income tax benefit................... 28,892 (2,244)(2) 26,648 -- 26,648
--------- ---------- ---------- ----------- ----------
Loss from continuing operations...... (47,143) 3,665 (43,478) (31,697) (75,175)
Dividends on preferred stock......... (50,513) 3,391 (3) (47,122) -- (47,122)
--------- ---------- ---------- ----------- ----------
Loss from continuing operations
applicable to common
stockholders....................... $ (97,656) $ 7,056 $ (90,600) $ (31,697) $ (122,297)
========= ========== ========== =========== ==========
Loss from continuing operations
applicable to common stockholders
per share.......................... $ (198.51) $ (1.03) $ (1.39)
========= ========== ==========
Weighted average shares
outstanding........................ 491,954 88,253,088 88,253,088
========= ========== ==========
</TABLE>

See accompanying notes to the unaudited pro forma consolidated statement of
operations.

32
<PAGE>

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999

(1) This reflects:

- the elimination of $2.9 million of interest expense as a result of the
redemption of $160.0 million aggregate principal amount of our 11 3/4%
senior notes with proceeds from our new credit facility having an assumed
weighted average interest rate of 8% per annum (each 1/8% increase in the
assumed weighted average interest rate would increase interest expense by
$0.2 million for the nine month period presented);

- the elimination of $2.9 million of interest expense associated with the
repayment of $100.0 million of bank debt from a portion of the proceeds of
the sale of our 13% senior preferred stock;

- the addition of $1.2 million of amortization of deferred financing costs
related to the new credit facility; and

- the elimination of $1.3 million of interest expense as a result of the
repayment of $22.3 million of long-term debt with proceeds from this
offering.

(2) This reflects the tax impact of the pro forma adjustments.

(3) This reflects:

- the elimination of $9.6 million of accrued dividends on our Class D
preferred stock associated with the conversion of our Class D preferred
stock into shares of our old Class A common stock and Class E preferred
stock and the redemption of our Class E preferred stock;

- the elimination of $3.1 million of preferred stock dividends associated
with the redemption of our Class F and G preferred stock; and

- the addition of $9.3 million of non-cash preferred stock dividend
requirements related to the issuance of our 13% senior preferred stock.

(4) The purchase price for American Cellular of approximately $2.4 billion,
including fees and expenses, is preliminarily allocated as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
------------------
($ IN MILLIONS)
<S> <C>
Working capital........................................... $ 50.0
Property, plant and equipment............................. 175.0
Cellular license acquisition costs........................ 1,300.0
Goodwill.................................................. 800.0
Customer list............................................. 50.0
Other assets.............................................. 25.0
--------
Total purchase price.................................... $2,400.0
========
</TABLE>

Cellular license acquisition costs, goodwill and customer lists are being
amortized over forty, twenty and five-year periods, respectively.

This adjustment reflects our 50% interest in the pro forma net loss of the
American Cellular joint venture. The reconciliation from the historical results
of operations for American Cellular to the pro forma loss is as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
<S> <C>
Historical net loss of American Cellular.................... $(27,485)
Additional depreciation and amortization from purchase
price allocation...................................... (40,328)
Additional interest expense due to the increase in debt
incurred by the joint venture......................... (19,880)
Additional income tax benefit due to the increase in
losses................................................ 24,299
--------
Pro forma net loss of American Cellular..................... $(63,394)
--------
50% of the pro forma net loss of American Cellular.......... $(31,697)
========
</TABLE>

33
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
DOBSON AMERICAN
COMMUNICATIONS CELLULAR
CORPORATION SYGNET ADJUSTMENTS SUB-TOTAL ADJUSTMENTS TOTAL
--------------- -------- ----------- ---------- ----------- ----------
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Service revenues............................. $ 69,402 $ 64,786 $ -- $ 134,188 $ -- $ 134,188
Roaming revenues............................. 66,479 28,035 -- 94,514 -- 94,514
Equipment sales and other revenues........... 4,154 7,447 -- 11,601 -- 11,601
-------- -------- -------- ---------- -------- ----------
Total operating revenues................... 140,035 100,268 -- 240,303 -- 240,303
-------- -------- -------- ---------- -------- ----------
Operating expenses:
Cost of services............................. 33,267 9,433 832 (1) 43,532 -- 43,532
Cost of equipment............................ 8,360 10,444 -- 18,804 -- 18,804
Marketing and selling........................ 22,393 12,327 2,603 (1) 37,323 -- 37,323
General and administrative................... 26,051 19,796 (3,435)(1) 42,412 -- 42,412
Merger related costs......................... -- 1,884 (1,884)(2) -- -- --
Depreciation and amortization................ 47,110 27,498 43,308 (3) 117,916 -- 117,916
-------- -------- -------- ---------- -------- ----------
Total operating expenses................... 137,181 81,382 41,424 259,987 -- 259,987
-------- -------- -------- ---------- -------- ----------
Operating income (loss)........................ 2,854 18,886 (41,424) (19,684) -- (19,684)
-------- -------- -------- ---------- -------- ----------
Interest expense............................... (38,979) (27,895) (23,823)(4) (90,697) (90,697)
Merger related costs........................... -- (5,206) 5,206 (2) -- -- --
Equity in loss of unconsolidated subsidiary.... -- -- -- -- (49,071)(7) (49,071)
Other income, net.............................. 3,858 (319) -- 3,539 -- 3,539
-------- -------- -------- ---------- -------- ----------
Loss before minority interests and income
taxes........................................ (32,267) (14,534) (60,041) (106,892) (49,071) (155,913)
Minority interests in income of subsidiaries... (2,487) -- -- (2,487) -- (2,487)
-------- -------- -------- ---------- -------- ----------
Loss from continuing operations before income
taxes........................................ (34,754) (14,534) (60,041) (109,329) (49,071) (158,400)
Income tax benefit............................. 11,469 -- 30,076 (5) 41,545 -- 41,545
-------- -------- -------- ---------- -------- ----------
Loss from continuing operations................ (23,285) (14,534) (29,965) (67,784) (49,071) (116,855)
Dividends on preferred stock................... (23,955) -- (34,007)(6) (57,962) -- (57,962)
-------- -------- -------- ---------- -------- ----------
Loss from continuing operations applicable to
common stockholders.......................... $(47,240) $(14,534) $(63,972) $ (125,746) $(49,071) $ (174,817)
======== ======== ======== ========== ======== ==========
Loss from continuing operations applicable to
common stockholders per share................ $ (99.75) $ (1.42) $ (1.98)
======== ========== ==========
Weighted average shares outstanding............ 473,564 88,253,088 88,253,088
======== ========== ==========
</TABLE>

See accompanying notes to the unaudited pro forma consolidated statement of
operations.

34
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

(1) This reclassifies certain operating expenses of Sygnet to conform with our
historical presentation.

(2) This eliminates costs that Sygnet incurred related to the consummation of
our acquisition of Sygnet.

(3) This reflects the additional depreciation and amortization resulting from
the allocation of the purchase price attributable to the Sygnet acquisition
of property and equipment, cellular license acquisition costs and intangible
assets.

(4) This reflects:

- the elimination of $27.9 million of interest expense associated with
Sygnet's senior notes and Sygnet's bank facility that we repaid as part of
our acquisition of Sygnet;

- the addition of $64.4 million of interest expense and amortization of
deferred financing costs relating to the Sygnet acquisition;

- the elimination of $8.7 million of interest expense associated with the
repayment of existing bank debt from the proceeds of our May 1999 offering
of 13% senior preferred stock;

- the elimination of $3.8 million of interest expense as a result of the
redemption of $160.0 million aggregate principal amount of our 11 3/4%
senior notes with proceeds from our new credit facility having an assumed
interest rate of 8% per annum (each 1/8% increase in the assumed weighted
average interest rate would increase interest expense by $0.2 million per
annum);

- the addition of $1.6 million of amortization of deferred financing costs
related to the new credit facility; and

- the elimination of $1.8 million of interest expense as a result of the
repayment of $22.3 million of long-term debt with proceeds from this
offering.

(5) This reflects the tax impact of the pro forma adjustments.

(6) This reflects adjustments to dividends resulting from our offerings and
redemption of preferred stock, including the amortization of the issuance
costs and the accretion of discounts with respect thereto, as follows:

- the addition of $23.8 million for our 13% senior preferred stock that we
offered in May 1999;

- the addition of $10.1 million for our 12 1/4% senior preferred stock that
we offered in December 1998;

- the addition of $0.9 million for our senior preferred stock that we
offered in January 1998; and

- the elimination of $0.8 million of dividends on the Class B and C
preferred stock that we redeemed in December 1998.

(7) This adjustment reflects our 50% interest in the pro forma net loss of the
American Cellular joint venture. The reconciliation from the historical
results of operations for American Cellular to the pro forma loss is as
follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1998
-----------------
<S> <C>
Historical net loss of American Cellular.................... $(40,399)
Historical net loss of PriCellular.......................... (6,286)
Additional depreciation and amortization from purchase
price allocation........................................ (53,770)
Additional interest expense due to increase debt borrowed
by the joint venture.................................... (33,568)
Additional income tax benefit due to the increase in
losses.................................................. 35,881
--------
Pro forma net loss of American Cellular..................... $(98,142)
--------
50% of the pro forma net loss of American Cellular.......... $(49,071)
========
</TABLE>

35
<PAGE>

DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
DOBSON AMERICAN
COMMUNICATIONS CELLULAR
CORPORATION ADJUSTMENTS SUB-TOTAL ADJUSTMENTS TOTAL
-------------- ----------- ---------- ----------- ----------
($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets, net of
restricted investments...... $ 64,575 $ 372,500 (1) $ 437,075 $ (372,500)(4) $ 64,575
Restricted investments........ 57,771 -- 57,771 -- 57,771
Property, plant and
equipment................... 187,291 187,291 -- 187,291
Receivable--affiliate......... 8,200 -- 8,200 -- 8,200
Cellular license acquisition
cost........................ 1,227,579 1,227,579 -- 1,227,579
Deferred financing costs...... 69,017 7,254 (2) 76,271 -- 76,271
Other intangibles............. 48,139 -- 48,139 -- 48,139
Investment in unconsolidated
subsidiary.................. -- -- -- 372,500 (4) 372,500
Other assets.................. 3,811 -- 3,811 -- 3,811
---------- --------- ---------- ----------- ----------
Total assets.............. $1,666,383 $ 379,754 $2,046,137 $ -- $2,046,137
========== ========= ========== =========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities........... $ 104,474 $ (9,983)(1) $ 94,491 $ -- $ 94,491
Net liabilities of
discontinued operations..... 48,844 (48,844)(3) -- -- --
Long-term debt, net of current
portion..................... 1,039,844 (22,330)(1)
43,000 (2) 1,060,514 -- 1,060,514
Deferred credits.............. 216,563 -- 216,563 -- 216,563
Minority interests............ 27,110 -- 27,110 -- 27,110
Preferred stock............... 525,797 (85,000)(1) 440,797 -- 440,797
Stockholders' (deficit)
equity...................... (296,249) 489,813 (1)
(35,746)(2)
48,844 (3) 206,662 -- 206,662
---------- --------- ---------- ----------- ----------
Total liabilities and
stockholders' (deficit)
equity.................... $1,666,383 $ 379,754 $2,046,137 $ -- $2,046,137
========== ========= ========== =========== ==========
</TABLE>

See accompanying notes to the unaudited pro forma consolidated condensed balance
sheet.

36
<PAGE>

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1999

(1) This reflects:

- this offering of Class A common stock;

- the interim increase in cash that would occur if we do not complete the
American Cellular acquisition (see "Use of Proceeds" for a discussion of
how we intend to use the net proceeds from this offering if we do not
complete the American Cellular acquisition);

- the conversion of each share of our Class D preferred stock into one share
of our old Class A common stock and one share of our Class E preferred
stock and the redemption of our Class E preferred stock. At the date of
redemption the estimated dividend on the Class E preferred stock will be
approximately $57.5 million; and

- the reduction of long-term debt that will be repaid with proceeds from
this offering.

(2) This reflects:

- the net impact of the elimination of deferred financing costs and our
tender premium associated with the redemption of $160.0 million aggregate
principal amount of our 11 3/4% senior notes with funds borrowed under our
new bank credit facility;

- the elimination of $8.7 million of deferred financing costs associated
with the refinancing of the credit facilities of our subsidiaries, Dobson
Operating Company and Dobson Cellular Operations Company, and our senior
notes; and

- the capitalization of $16.0 million of costs related to our new credit
facility.

(3) This reflects the distribution of all of the outstanding capital stock of
Logix to our current shareholders.

(4) This reflects our purchase of a 50% interest in the American Cellular joint
venture.

37
<PAGE>
UNAUDITED PROPORTIONATE ADJUSTED STATEMENTS OF OPERATIONS

The following table sets forth selected unaudited statement of operations
data of us and American Cellular on a proportionate combined basis, as adjusted
for the pro forma adjustments described in "Unaudited Pro Forma Consolidated
Financial Data" and herein. The proportionate presentation is an arithmetic
combination of:

- the relevant pro forma data of our consolidated subsidiaries adjusted to
exclude the results attributable to the outstanding minority interests in
our subsidiaries; and

- our 50% share of the pro forma operating results of American Cellular
attributable to our interest in the joint venture with AT&T Wireless that
has agreed to acquire American Cellular.

The proportionate presentation has not been prepared in accordance with GAAP
and is not intended to replace our unaudited pro forma consolidated financial
data prepared and presented in accordance with the rules and regulations of the
Securities and Exchange Commission. Under GAAP, our investment in the American
Cellular joint venture will be accounted for using the equity method of
accounting and will be reflected in a single line item entitled "Investment in
unconsolidated subsidiary" in our balance sheet and "Equity in income (loss) of
unconsolidated subsidiary" in our statement of operations. To the extent that
the joint venture incurs losses in the future, our "Investment in unconsolidated
subsidiary" will be reduced. Because we will account for our interest in the
American Cellular joint venture using the equity method of accounting, our
statement of operations will reflect only our 50% share in the net income or
loss of the joint venture. We are presenting the proportionate data to
facilitate a better understanding of the financial and operating data
attributable to our substantial investment in American Cellular. Net loss from
continuing operations does not change as a result of the proportionate
presentation.

38
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

UNAUDITED PROPORTIONATE ADJUSTED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
AMERICAN DOBSON MINORITY
DOBSON CELLULAR INTEREST PROPORTIONATE
PRO FORMA(1) ADJUSTMENTS(2) ADJUSTMENTS(3) ADJUSTED
------------ -------------- --------------- -------------
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
Operating revenues:
Service revenues...................... $117,892 $ 52,009 $(7,153) $ 162,748
Roaming revenues...................... 107,296 47,364 (4,397) 150,263
Equipment sales and other revenues.... 9,952 6,663 (622) 15,993
-------- -------- ------- ---------
Total operating revenues............ 235,140 106,036 (12,172) 329,004

Operating expenses:
Cost of services...................... 35,762 9,077 (2,908) 41,931
Cost of equipment..................... 18,562 6,564 (1,046) 24,080
Marketing and selling................. 34,957 10,986 (1,504) 44,439
General and administrative............ 40,795 16,283 (2,365) 54,713
Depreciation and amortization......... 100,020 56,467 (2,425) 154,062
-------- -------- ------- ---------
Total operating expenses............ 230,096 99,377 (10,248) 319,225
-------- -------- ------- ---------
Operating income (loss)................. 5,044 6,659 (1,924) 9,779
-------- -------- ------- ---------
Interest expense...................... (76,456) (50,250) 22 (126,684)
Equity in loss of unconsolidated
subsidiary.......................... (31,697) 31,697 -- --
Other income, net..................... 3,411 1,768 (23) 5,156
-------- -------- ------- ---------
Loss before minority interests and
income taxes.......................... (99,698) (10,126) (1,925) (111,749)
Minority interests in income of
subsidiaries.......................... (2,125) -- 2,125 --
-------- -------- ------- ---------
Loss before income taxes................ (101,823) (10,126) 200 (111,749)
Income tax benefit...................... 26,648 10,126 (200) 36,574
-------- -------- ------- ---------
Loss from continuing operations......... $(75,175) $ -- $ -- $ (75,175)
======== ======== ======= =========
</TABLE>

See accompanying notes to the unaudited proportionate adjusted statements of
operations.

39
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

UNAUDITED PROPORTIONATE ADJUSTED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
AMERICAN DOBSON MINORITY
DOBSON CELLULAR INTEREST PROPORTIONATE
PRO FORMA(1) ADJUSTMENTS(2) ADJUSTMENTS(3) ADJUSTED
------------ -------------- --------------- -------------
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
Operating revenues:
Service revenues...................... $ 134,188 $ 75,890 $ (8,652) $ 201,426
Roaming revenues...................... 94,514 26,806 (4,831) 116,489
Equipment sales and other revenues.... 11,601 7,274 (629) 18,246
--------- -------- -------- ---------
Total operating revenues............ 240,303 109,970 (14,112) 336,161

Operating expenses:
Cost of services...................... 43,532 10,344 (3,508) 50,368
Cost of equipment..................... 18,804 6,318 (976) 24,146
Marketing and selling................. 37,323 15,292 (2,137) 50,478
General and administrative............ 42,412 23,258 (2,723) 62,947
Depreciation and amortization......... 117,916 58,446 (2,242) 174,120
--------- -------- -------- ---------
Total operating expenses............ 259,987 113,658 (11,586) 362,059
--------- -------- -------- ---------
Operating income (loss)................. (19,684) (3,688) (2,526) (25,898)
--------- -------- -------- ---------
Interest expense...................... (90,697) (67,000) 79 (157,618)
Equity in loss of unconsolidated
subsidiary.......................... (49,071) 49,071 -- --
Other income, net..................... 3,539 3,941 (21) 7,459
--------- -------- -------- ---------
Loss before minority interests and
income taxes.......................... (155,913) (17,676) (2,468) (176,057)
Minority interests in income of
subsidiaries.......................... (2,487) -- 2,487 --
--------- -------- -------- ---------
Loss before income taxes................ (158,400) (17,676) 19 (176,057)
Income tax benefit...................... 41,545 17,676 (19) 59,202
--------- -------- -------- ---------
Loss from continuing operations......... $(116,855) $ -- $ -- $(116,855)
========= ======== ======== =========
</TABLE>

See accompanying notes to the unaudited proportionate adjusted statements of
operations.

40
<PAGE>
NOTES TO UNAUDITED PROPORTIONATE ADJUSTED STATEMENTS OF OPERATIONS

(1) The Dobson unaudited pro forma amounts are from our unaudited pro forma
consolidated statements of operations presented in "Unaudited Pro Forma
Consolidated Financial Data" that we include elsewhere in this prospectus.

(2) The American Cellular adjustment column reflects our 50% share of the
revenues and expenses of the American Cellular joint venture. These amounts
are based on the historical results of American Cellular and its predecessor
adjusted for certain pro forma adjustments. The following pro forma
adjustments have been made to the historical results of American Cellular
and its predecessor:

- to adjust depreciation and amortization expense to reflect the allocation
of $2.4 billion of purchase price, including fees and expenses primarily
to cellular license acquisition costs, intangible assets and property and
equipment;

- to adjust interest expense to reflect the replacement of American
Cellular's bank debt and senior notes with $1.67 billion of debt at an
assumed interest rate of 8%, from the joint venture's new $1.75 billion
credit facility; and

- to adjust the income tax benefit to reflect an effective tax rate of 38%
on the net pro forma taxable loss of the joint venture.

(3) The Dobson minority interest adjustment column reflects adjustments to
eliminate minority interest holders' shares of our revenues and expenses.

41
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth certain of our historical consolidated
financial and other data as of and for each of the five years in the period
ended December 31, 1998 and as of and for each of the nine month periods ended
September 30, 1998 and September 30, 1999. We derived our consolidated financial
data as of December 31, 1997 and December 31, 1998 and for each of the three
years in the period ended December 31, 1998, and as of and for the nine months
ended September 30, 1999, from our consolidated financial statements included
elsewhere in this prospectus, which have been audited by Arthur Andersen LLP. We
derived our consolidated financial data as of December 31, 1994, December 31,
1995 and December 31, 1996 and for each of the two years in the period ended
December 31, 1995 from our consolidated financial statements not included in
this prospectus, which have also been audited by Arthur Andersen LLP. We derived
our consolidated financial data as of and for the nine month period ended
September 30, 1998 from our unaudited consolidated financial statements included
elsewhere in this prospectus, which, in our opinion, reflect all adjustments,
consisting only of normal recurring accruals, necessary to present fairly the
data presented for such period.

The following tables also set forth certain historical consolidated
financial data of American Cellular and its predecessor, PriCellular. We derived
American Cellular's consolidated financial data for the periods from
February 26, 1998 through December 31, 1998 and for the nine months ended
September 30, 1999 from its consolidated financial statements included elsewhere
in this prospectus, which have been audited by Ernst & Young LLP. We derived the
consolidated financial data of American Cellular's predecessor, PriCellular, for
the six months ended June 30, 1998 and for each of the two years in the period
ended December 31, 1997 from its predecessor's consolidated financial statements
included elsewhere in this prospectus, which have also been audited by Ernst &
Young LLP. We derived the selected consolidated financial data of American
Cellular's predecessor, PriCellular, as of and for each of the two years in the
period ended December 31, 1995 from its consolidated financial statements not
included in this prospectus, which have also been audited by Ernst & Young
L.L.P. We derived American Cellular's condensed consolidated financial data for
the period from February 26, 1998 through September 30, 1998 from its unaudited
condensed consolidated financial statements included elsewhere in this
prospectus, which in the opinion of American Cellular's management, reflect all
adjustments, consisting only of normal recurring accruals, considered necessary
for a fair presentation of the results for the interim period.

Our historical data for each of the five years in the period ended
December 31, 1998 and for each of the nine month periods ended September 30,
1998 and September 30, 1999 include the operations of acquisitions we made, as
applicable during those years, from the date of each acquisition. These
acquisitions materially affect the comparability of data from one period to
another. Our operating results and those of American Cellular for the periods
ended September 30, 1999, September 30, 1998 and June 30, 1998 are not
necessarily indicative of results that may be expected for a full year. American
Cellular was formed on February 26, 1998, but it did not have operations until
the Company acquired PriCellular on June 25, 1998. You should read the following
historical consolidated financial data in conjunction with "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and related notes that we include
elsewhere in this prospectus.

42
<PAGE>

income (loss) as determined in accordance with GAAP, as an alternative to cash
flows from operating activities as determined in accordance with GAAP or as a
measure of liquidity. Because EBITDA is not calculated in the same manner by all
companies, it may not be comparable to other similarly titled measures of other
companies. See our consolidated statements of cash flows in our consolidated
financial statements included elsewhere in this prospectus. EBITDA margin
represents EBITDA as a percentage of operating revenues.

DOBSON COMMUNICATIONS CORPORATION

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- ------------------------
1994 1995 1996 1997 1998 1998 1999
---------- ---------- ---------- ---------- ---------- ----------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Operating revenues:
Service revenues.................. $ 10,922 $ 13,949 $ 17,593 $ 38,410 $ 69,402 $ 47,769 $ 117,892
Roaming revenues.................. 3,231 4,370 7,852 26,263 66,479 45,916 107,296
Equipment sales and other
revenues........................ 1,222 1,364 1,494 2,041 4,154 2,661 9,952
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating revenues........ 15,375 19,683 26,939 66,714 140,035 96,346 235,140
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Cost of service................... 2,991 4,654 6,119 16,431 33,267 22,603 35,762
Cost of equipment................. 1,502 2,013 2,571 4,046 8,360 5,166 18,562
Marketing and selling............. 3,098 3,103 4,462 10,669 22,393 14,856 34,957
General and administrative........ 3,193 3,035 3,902 11,555 26,051 16,219 40,795
Depreciation and amortization..... 1,885 2,529 5,241 16,798 47,110 29,714 100,020
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating expenses........ 12,669 15,334 22,295 59,499 137,181 88,558 230,096
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income.................... 2,706 4,349 4,644 7,215 2,854 7,788 5,044
Interest expense.................... (1,195) (1,854) (4,284) (27,640) (38,979) (25,039) (82,365)
Other income (expense), net......... 106 (210) (1,503) 2,777 3,858 3,304 3,411
Minority interests in income of
subsidiaries...................... (1,105) (1,334) (675) (1,693) (2,487) (1,963) (2,125)
Income tax (provision) benefit...... (168) (347) 593 3,625 11,469 4,864 28,892
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before
extraordinary items............... 344 604 (1,225) (15,716) (23,285) (11,046) (47,143)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from discontinued
operations........................ (110) 500 331 332 (27,110) (17,185) (41,811)
Extraordinary items................. 228 -- (527) (1,350) (2,166) (2,644) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)................... 462 1,104 (1,421) (16,734) (52,561) (30,875) (88,954)
Dividends on preferred stock........ (83) (591) (849) (2,603) (23,955) (16,749) (50,513)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) applicable to
common stockholders............... $ 379 $ 513 $ (2,270) $ (19,337) $ (76,516) $ (47,624) $ (139,467)
========== ========== ========== ========== ========== ========== ==========
Net income (loss) applicable to
common stockholders per common
share............................. $ 0.80 $ 1.08 $ (4.80) $ (40.87) $ (161.57) $ (100.65) $ (283.50)
========== ========== ========== ========== ========== ========== ==========
Weighted average common shares
outstanding....................... 473,152 473,152 473,152 473,152 473,564 473,152 491,954
========== ========== ========== ========== ========== ========== ==========
Net income (loss) applicable to
common stockholders per common
share, after recapitalization..... $ 0.01 $ 0.01 $ (0.04) $ (0.37) $ (1.45) $ (0.90) $ (2.54)
========== ========== ========== ========== ========== ========== ==========
Weighted average common shares
outstanding, after
recapitalization.................. 52,728,059 52,728,059 52,728,059 52,278,059 52,773,972 52,728,059 54,823,354
========== ========== ========== ========== ========== ========== ==========
</TABLE>

43
<PAGE>
DOBSON COMMUNICATIONS CORPORATION

OTHER FINANCIAL DATA:
Cash flows provided by operating
activities..................... $ 2,529 $ 4,634 $ 5,239 $ 6,908 $ 28,024 $ 10,257 $ 11,527
Cash flows provided by (used in)
investing activities........... 22 (6,538) (43,894) (217,640) (999,063) (293,209) (93,380)
Cash flows provided by (used in)
financing activities........... (2,985) 2,029 38,904 212,505 990,610 285,240 59,869
EBITDA........................... 4,591 6,878 9,885 24,013 49,964 37,502 105,064
EBITDA margin.................... 29.9% 34.9% 36.7% 36.0% 35.7% 38.9% 44.7%
Capital expenditures............. $ 5,267 $ 3,925 $ 13,536 $ 17,773 $ 55,289 $ 23,793 $ 40,174

OTHER DATA:
Cellular subscribers (at period
end)........................... 21,500 26,600 34,000 100,000 352,000 163,000 424,000
Cellular penetration (at period
end)........................... 6.5% 8.0% 5.8% 6.1% 6.8% 5.8% 7.2%
Average monthly cellular churn
rates.......................... 0.9% 1.5% 1.8% 1.9% 2.0% 1.9% 1.9%
Average monthly revenues per
cellular subscriber, excluding
roaming revenues............... $ 50 $ 50 $ 48 $ 41 $ 40 $ 40 $ 34
Average monthly revenues per
cellular subscriber, including
roaming revenues............... $ 65 $ 66 $ 70 $ 69 $ 79 $ 80 $ 65
Cellular cell sites (at period
end)........................... 36 46 67 135 414 210 459
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------------------------------ SEPTEMBER 30,
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C>
($ IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 607 $ 732 $ 981 $ 2,752 $ 22,324 $ 339
Net fixed assets................................... 11,590 11,414 26,794 52,374 173,054 187,291
Total assets....................................... 33,111 37,711 95,376 359,645 1,703,427 1,666,383
Total debt......................................... 20,661 24,319 75,750 335,570 1,121,556 1,059,458
Mandatorily redeemable preferred stock............. -- 5,913 10,000 11,623 381,320 525,797
Stockholders' equity (deficit)..................... 28 (6,971) (9,802) (36,673) (156,783) (296,249)
</TABLE>

44
<PAGE>
AMERICAN CELLULAR CORPORATION

<TABLE>
<CAPTION>
PRICELLULAR (THE PREDECESSOR COMPANY) AMERICAN CELLULAR
--------------------------------------------------------- -------------------
PERIOD FROM
SIX MONTHS FEBRUARY 26, 1998
YEAR ENDED DECEMBER 31, ENDED (DATE OF FORMATION)
-------------------------------------------- JUNE 30, THROUGH
1994 1995 1996 1997 1998 DECEMBER 31, 1998
--------- --------- --------- -------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS
DATA:
Total operating
revenues........... $ 5,209 $ 41,504 $ 112,616 $181,000 $108,670 $ 122,409
--------- --------- --------- -------- -------- -----------
Operating expenses:
Cost of service.... 1,892 10,694 29,571 48,691 20,911 10,917
Cost of
equipment........ 814 4,951 10,073 12,841 5,365 7,271
Selling, general
and
administrative... 6,005 16,512 34,502 53,485 30,230 37,625
Depreciation and
amortization..... 2,720 10,337 19,537 28,759 17,553 45,569
Nonrecurring
charges.......... -- -- -- -- 4,889 4,355
--------- --------- --------- -------- -------- -----------
Total operating
expenses....... 11,431 42,494 93,683 143,776 78,948 105,737
--------- --------- --------- -------- -------- -----------
Operating income
(loss)............. (6,222) (990) 18,933 37,224 29,722 16,672
Gain (loss) on sale
of investments in
cellular
operations......... 6,819 11,598 (1,401) 8,423 (133) --
Interest expense..... (2,236) (22,953) (47,076) (67,392) (38,955) (61,477)
Other income net..... 199 4,634 6,501 8,114 3,080 4,936
Income tax
provision.......... -- -- -- -- -- (530)
--------- --------- --------- -------- -------- -----------
Net loss............. (1,440) (7,711) (23,043) (13,631) (6,286) (40,399)
Dividends on
preferred stock.... -- -- (6,178) (6,540) (3,357) (21,375)
--------- --------- --------- -------- -------- -----------
Net loss applicable
to common
stockholders....... $ (1,440) $ (7,711) $ (29,221) $(20,171) $ (9,643) $ (61,774)
========= ========= ========= ======== ======== ===========

OTHER FINANCIAL DATA:
Cash flows provided
by (used in)
operating
activities......... $ (831) $ 4,110 $ 39,371 $ 49,026 $ 11,665 $ 35,295
Cash flows used in
investing
activities......... (130,350) (204,353) (200,969) (36,284) (80,327) (1,512,745)
Cash flows provided
by (used in)
financing
activities......... 176,355 278,276 138,518 (51,749) 58,765 1,511,465
EBITDA, excluding
nonrecurring
charges............ (3,502) 9,347 38,470 65,983 52,164 66,596
EBITDA margin,
excluding
nonrecurring
charges............ (67.2)% 22.5% 34.2% 36.5% 48.0% 54.4%
Capital
expenditures....... $ 3,013 $ 6,794 $ 29,470 $ 25,717 $ 20,517 $ 24,260

OTHER DATA:
Cellular subscribers
(at period end).... 17,300 73,000 139,800 243,700 286,000 334,500
Cellular penetration
(at period end).... 1.0% 2.0% 3.6% 5.3% 5.9% 6.8%
Average monthly
cellular churn
rates.............. 2.7% 2.0% 1.6% 1.8% 1.4% 1.8%

<CAPTION>
AMERICAN CELLULAR
------------------------------------
PERIOD FROM
FEBRUARY 26, 1998 NINE MONTHS
(DATE OF FORMATION) ENDED
THROUGH SEPTEMBER 30,
SEPTEMBER 30, 1998 1999
------------------- --------------
<S> <C> <C>
($ IN THOUSANDS,
EXCEPT PER SHARE
DATA)
STATEMENT OF OPERATIONS
DATA:
Total operating
revenues........... $ 61,105 $ 212,069
----------- ---------
Operating expenses:
Cost of service.... 4,922 18,154
Cost of
equipment........ 3,246 13,128
Selling, general
and
administrative... 16,384 54,537
Depreciation and
amortization..... 22,506 72,607
Nonrecurring
charges.......... 4,154 --
----------- ---------
Total operating
expenses....... 51,212 158,426
----------- ---------
Operating income
(loss)............. 9,893 53,643
Gain (loss) on sale
of investments in
cellular
operations......... -- --
Interest expense..... (33,864) (80,620)
Other income net..... 3,994 3,536
Income tax
provision.......... -- (4,044)
----------- ---------
Net loss............. (19,977) (27,485)
Dividends on
preferred stock.... (11,069) (32,487)
----------- ---------
Net loss applicable
to common
stockholders....... (31,046) $ (59,972)
=========== =========
OTHER FINANCIAL DATA:
Cash flows provided
by (used in)
operating
activities......... 33,555 $ 43,128
Cash flows used in
investing
activities......... (1,507,978) (31,394)
Cash flows provided
by (used in)
financing
activities......... 1,511,465 (2,419)
EBITDA, excluding
nonrecurring
charges............ 36,553 126,250
EBITDA margin,
excluding
nonrecurring
charges............ 59.8% 59.5%
Capital
expenditures....... $ 6,625 $ 43,581
OTHER DATA:
Cellular subscribers
(at period end).... 305,100 398,000
Cellular penetration
(at period end).... 6.2% 8.1%
Average monthly
cellular churn
rates.............. 1.8% 1.7%
</TABLE>

45
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
"SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA" AND OUR CONSOLIDATED FINANCIAL
STATEMENTS AND RELATED NOTES CONTAINED ELSEWHERE IN THIS PROSPECTUS. THE
FOLLOWING DISCUSSION DOES NOT INCLUDE THE RESULTS OF OUR PROPOSED ACQUISITION OF
AMERICAN CELLULAR, WHICH WE WILL ACCOUNT FOR USING THE EQUITY METHOD OF
ACCOUNTING.

OVERVIEW

We are a leading provider of rural and suburban cellular telephone services.
We began providing cellular telephone service in 1990 in Oklahoma and the Texas
Panhandle. We have expanded our cellular operations rapidly since then,
primarily through acquisitions. As of September 30, 1999, our cellular systems
covered a total population of approximately 5.9 million and we had approximately
424,000 subscribers.

On October 5, 1999, we and AT&T Wireless entered into an equally-owned joint
venture to acquire, own and operate American Cellular for approximately
$2.4 billion, including fees and expenses. American Cellular is one of the
largest independent rural cellular telephone operators in the United States. As
of September 30, 1999, American Cellular's systems covered a total population of
approximately 4.9 million and it had approximately 398,000 subscribers,
primarily in rural areas of the midwestern and eastern United States.

We will account for our interest in the American Cellular joint venture
using the equity method of accounting. As a result, we will reflect our
proportionate share of the joint venture's equity in a single line item entitled
"Investment in unconsolidated subsidiary" in our balance sheet and we will
reflect our proportionate share of the joint venture's net income or losses in a
single line item entitled "Equity in income (loss) of unconsolidated subsidiary"
in our statement of operations. To the extent that the joint venture incurs
losses in the future, our "Investment in unconsolidated subsidiary" will be
reduced.

We do not expect that the formation of our joint venture with AT&T Wireless
and the joint venture's acquisition of American Cellular will have a significant
adverse impact on our liquidity or capital resource, but we expect to incur
additional losses from continuing operations as a result of the joint venture's
acquisition of American Cellular. American Cellular's management, organization,
billing system, network infrastructure and marketing programs are substantially
similar to ours. We intend to consolidate American Cellular's corporate
functions, including human resources, finance, engineering and information
systems with ours. We do not expect any material disruptions from this
integration; however, we cannot assure you that we will not experience
difficulty integrating American Cellular's operations with ours.

American Cellular has required, and will likely continue to require,
substantial capital to further develop, expand and upgrade its cellular systems.
American Cellular has budgeted approximately $70.0 million for capital
expenditures in 2000. Although the joint venture has received a commitment from
Banc of America Securities LLC and its affiliate, Bank of America, N.A., on
behalf of a group of banks to provide a $1.75 billion credit facility to the
joint venture, we cannot be certain that the American Cellular joint venture
will generate sufficient cash flows from operations or otherwise have sufficient
access to capital to meet all of its debt service, capital expenditure, working
capital or other operating needs. If it does not, we may be required to fund our
50% share of any capital needs of the American Cellular joint venture in order
to protect our substantial investment in the joint venture. See "Risk
Factors--Risks Related to Our Acquisition Strategy--We may need to contribute
additional funds to our American Cellular joint venture to protect our
investment in the joint venture, which could strain our financial resources and
limit our ability to pursue other business opportunities" and "The American
Cellular Acquisition--The Joint Venture Agreement."

46
<PAGE>

If the joint venture defaults on its purchase of American Cellular, the
joint venture will be required to pay actual damages suffered by American
Cellular up to $500.0 million. However, the joint venture is only required to
pay $100.0 million of liquidated damages to American Cellular if the joint
venture's default results from the refusal of its bank lenders to provide funds
under the joint venture's proposed credit facility for reasons other than:

- the joint venture's breach of its obligations to the bank lenders;

- the joint venture's failure to satisfy funding conditions that are within
its control; or

- the joint venture's inability to reach a definitive loan agreement with
its bank lenders.

Our ability to fund our ongoing capital requirements, debt service and working
capital needs are not expected to be materially impacted by the amount, if any,
of damages the joint venture is obligated to pay.

REVENUES

Our cellular revenues consist of service revenues, roaming revenues and
equipment sales and other revenues. There has been an industry trend of
declining average revenues per minute as competition among wireless service
providers has led to reductions in rates for airtime and subscriptions and other
charges. We believe that the impact of this trend will be mitigated by increases
in the number of wireless telecommunications subscribers and the number of
minutes of usage per subscriber. There has also been a broad trend in the
wireless telecommunications industry of declining average revenues per
subscriber. We believe that this downward trend results primarily from the
addition of new lower usage customers who utilize wireless services for personal
convenience, security or as a backup to their traditional landline telephone as
well as declining average revenues per minute.

Roaming revenues are revenues we derive from providing service to
subscribers of other wireless providers when those subscribers "roam" into our
markets and use our systems to carry their calls. Roaming accounted for 29.1%,
39.4%, 47.5%, 47.7% and 45.6% of our cellular revenue for the years ended
December 31, 1996, 1997 and 1998 and for the nine months ended September 30,
1998 and 1999, respectively. Roaming revenues typically yield higher average per
minute rates and higher margins than revenues from our subscribers. We achieve
these higher margins because we incur virtually no costs related to equipment,
customer service or collections to earn roaming revenues. See "Risk
Factors--Risks Related to Our Business--We are highly dependent on our
substantial relationship with AT&T Wireless and our other roaming partners."

We include any toll, or long-distance, revenues related to our cellular and
roaming services in service revenues and roaming revenues. Our roaming yield,
which is our roaming service revenues, including airtime, toll charges and
surcharges, divided by roaming minutes of use, was $0.70, $0.72, $0.61, $0.62
and $0.50 per minute for the years ended December 31, 1996, 1997, 1998 and for
the nine months ended September 30, 1998 and 1999, respectively. Despite the
decline in our roaming yield, we have seen overall roaming revenues grow due to
growth in roaming minutes of use.

We derive roaming revenues from charges to our subscribers when those
subscribers roam into other wireless providers' markets. Our current accounting
practice is to net those revenues against the associated expenses charged to us
by third-party wireless providers (that is, the fees we pay the other wireless
providers for carrying our subscribers' calls on their network) and to record
the net expense as cost of service. Historically, we have been able to pass
through to our subscribers the majority of the costs charged to us by
third-party wireless providers. Recently, the industry has been moving to
pricing plans that include flat rate pricing and larger home areas. Under these
types of plans, amounts charged to us by other wireless providers may not
necessarily be passed through to our subscribers. Therefore, we are currently
assessing the need to report these revenues and expenses separately in our
statements of operations. If we had reported these revenues and expenses
separately in our statement of operations for the years ended December 31, 1997
and 1998 and the nine months ended September 30,

47
<PAGE>

1998 and 1999, revenues would have been $74.4 million, $150.8 million,
$104.0 million and $266.8 million, respectively, average monthly revenues per
cellular subscriber, excluding roaming revenues, would have been $52, $48, $47
and $43, respectively, and EBITDA margin would have been 32.3%, 33.1%, 36.1% and
39.4%, respectively. Information prior to 1997 is not available.

Our overall cellular penetration rates increased for the nine months ended
September 30, 1998 and 1999 and in each of 1996, 1997 and 1998 due to
incremental penetration gains in our markets. We believe that as our cellular
penetration rates increase, the increase in new subscriber revenues will
continue to exceed the loss of revenues attributable to our cellular churns.

COSTS AND EXPENSES

Our primary operating expense categories include cost of service, cost of
equipment, marketing and selling costs, general and administrative costs, and
depreciation and amortization.

Our cost of service consists primarily of costs to operate and maintain our
facilities utilized in providing service to customers and amounts paid to
third-party cellular providers for providing service to our subscribers when our
subscribers roam into their markets.

Our cost of equipment represents the costs associated with telephone
equipment and accessories sold to customers. In recent years, we and other
cellular providers have increased the use of discounts on phone equipment and
free phone promotions as competition between service providers has intensified.
As a result, we have incurred, and expect to continue to incur, losses on
equipment sales and increased marketing and selling costs per gross additional
subscriber. While we expect to continue these discounts and promotions, we
believe that these promotions will result in increased revenues from increases
in the number of our cellular subscribers.

Our marketing and selling costs include advertising, compensation paid to
sales personnel and independent agents and all other costs to market and sell
cellular products and services and costs related to customer retention. We pay
commissions to direct sales personnel for new business generated. Independent
sales agents receive commissions for generating new sales and ongoing sales to
existing customers.

Our general and administrative costs include all infrastructure costs,
including costs for customer support, billing, collections and corporate
administration.

Our depreciation and amortization expense represents the costs associated
with the depreciation of our fixed assets and the amortization of our intangible
assets, primarily cellular license acquisition costs and customer lists.

Since 1996, we have completed 13 acquisitions of cellular licenses and
systems for an aggregate purchase price of $1,190.4 million, increasing the
total population service by our systems by approximately 5.6 million and
significantly expanding the geographical scope of our operations. Although our
cash flows from operations has increased as a result of our acquisitions, the
increased amortization, together with the increased interest expense and
dividend requirements associated with our outstanding indebtedness and preferred
stock, have resulted in increased losses applicable to common stockholders for
1997 and 1998 and for the nine months ended September 30, 1999. We expect that
our interest in the American Cellular joint venture will result in an immediate
increase in our net losses. We expect our net losses to continue until we expand
our acquired systems and increase our subscriber base. Our recent acquisitions
affect the comparability of our historical results of operations for the periods
discussed, therefore these results may not be indicative of future performance.

As part of our recapitalization to be completed immediately prior to the
closing of this offering, the holders of our Class D preferred stock have agreed
to convert all of their Class D preferred shares. Each share of Class D
preferred stock is convertible into one share of old Class A common stock and

48
<PAGE>

one share of Class E preferred stock. As a result of this conversion, we will
allocate the current carrying value of the Class D preferred stock of
$85.0 million to both the old Class A common stock and Class E preferred stock
based on their relative fair market values at the time of conversion. In
addition, we will redeem all of the shares of Class E preferred stock for their
aggregate liquidation value of $85.0 million plus accrued dividends. The
difference between the allocated carrying value of the Class E preferred stock
and their liquidation value will be recognized as a preferred stock dividend at
the date of the redemption.

During the first quarter 2000, we expect to incur an extraordinary pretax
loss of approximately $8.7 million as a result of writing off previously
capitalized financing costs associated with our existing Dobson Operating
Company and Dobson Cellular Operations Company credit facilities and our senior
notes, each of which we expect to refinance in 2000.

RESULTS OF OPERATIONS

In the text below, financial statement numbers have been rounded; however,
the percentage changes are based on our actual financial statements.

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

OPERATING REVENUES. For the nine months ended September 30, 1999, our total
operating revenues increased $138.8 million, or 144.1%, to $235.1 million from
$96.3 million for the comparable period in 1998. Our total service revenues,
roaming revenues and equipment sales and other revenues represented 50.1%, 45.6%
and 4.3%, respectively, of our total operating revenues for the nine months
ended September 30, 1999 and 49.6%, 47.7% and 2.7%, respectively, of our total
operating revenues for the nine months ended September 30, 1998.

The following table sets forth the components of our revenues for the
periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1998 1999
----------- --------
(UNAUDITED)
($ IN THOUSANDS)
<S> <C> <C>
Operating revenues:
Service revenues..................................... $47,769 $117,892
Roaming revenues..................................... 45,916 107,296
Equipment sales and other revenues................... 2,661 9,952
------- --------
Total.............................................. $96,346 $235,140
======= ========
</TABLE>

For the nine months ended September 30, 1999, service revenues increased
$70.1 million, or 146.8%, to $117.9 million from $47.8 million for the
comparable 1998 period. Of this increase, $56.0 million was attributable to
acquisitions. The remaining $14.1 million was primarily attributable to
increased penetration and usage in our existing markets. Our subscriber base
increased 160.1% to approximately 424,000 at September 30, 1999 from
approximately 163,000 at September 30, 1998. We added approximately 193,800
subscribers since September 30, 1998 as a result of acquisitions. For the nine
months ended September 30, 1999, our average monthly service revenues per
subscriber decreased 17.5% to $33 from $40 for the comparable period in 1998 due
to the addition of new lower rate subscribers in our northern region and
competitive market pressures in all our markets.

For the nine months ended September 30, 1999, roaming revenues increased
$61.4 million, or 133.7%, to $107.3 million from $45.9 million for the
comparable 1998 period. Of this increase, $41.5 million was attributable to
acquisitions. The remaining $19.9 million was primarily attributable to
increased roaming minutes in our existing markets due to expanded coverage
areas, deployment of digital technology in most of our markets and increased
usage in these markets.

49
<PAGE>

For the nine months ended September 30, 1999, equipment sales and other
revenues increased $7.3 million, or 274.0%, to $10.0 million from $2.7 million
for the comparable 1998 period due to increased sales of equipment as a result
of growth in subscribers.

COST OF SERVICE. For the nine months ended September 30, 1999, the total
cost of service increased $13.2 million, or 58.2%, to $35.8 million from
$22.6 million for the comparable 1998 period. Of this increase, $11.3 million
was attributable to acquisitions. The remaining $1.9 million was primarily
attributable to increased subscribers and minutes of use in our existing
markets. As a percentage of service and roaming revenues, our cost of cellular
service decreased to 15.9% for the nine months ended September 30, 1999 from
24.1% for the comparable period of 1998. This decrease was primarily a result of
a reduction in rates charged by third-party wireless providers for the use of
their networks while our customers were roaming in their service areas.

COST OF EQUIPMENT. For the nine months ended September 30, 1999, our cost
of equipment increased $13.4 million, or 259.3%, to $18.6 million from
$5.2 million for the comparable period of 1998, primarily as a result of
increases in the volume of equipment we sold due to the growth in subscribers.

MARKETING AND SELLING COSTS. For the nine months ended September 30, 1999,
our marketing and selling costs increased $20.1 million, or 135.3%, to
$35.0 million from $14.9 million for the comparable period of 1998. The overall
increase was a result of an increase in gross subscriber additions. We added
approximately 121,000 gross subscribers in the nine months ended September 30,
1999 and approximately 48,900 gross subscribers in the nine months ended
September 30, 1998. As a percentage of total operating revenues, marketing and
selling costs decreased to 14.9% for the nine months ended September 30, 1999
from 15.4% for the same period in 1998.

GENERAL AND ADMINISTRATIVE COSTS. For the nine months ended September 30,
1999, our general and administrative costs increased $24.6 million, or 151.5%,
to $40.8 million from $16.2 million for the comparable 1998 period. This
increase was the result of increased infrastructure costs, including customer
service, billing, collections and administrative costs as a result of our
overall growth. Our average monthly general and administrative costs per average
subscriber decreased 14.3% to $12 for the nine months ended September 30, 1999
from $14 for the comparable period of 1998. The decrease in general and
administrative costs per subscriber was primarily the result of efficiencies
gained from the integration of acquired companies.

DEPRECIATION AND AMORTIZATION EXPENSE. For the nine months ended
September 30, 1999, our depreciation and amortization expense increased
$70.3 million, or 236.6%, to $100.0 million from $29.7 million for the
comparable 1998 period. Depreciation and amortization of assets acquired in
acquisitions accounted for substantially all of this increase.

INTEREST EXPENSE. For the nine months ended September 30, 1999, our
interest expense increased $57.4 million, or 228.9%, to $82.4 million from
$25.0 million for the comparable 1998 period. The increase resulted primarily
from our increased borrowings to finance our acquisitions.

OTHER INCOME (EXPENSE), NET. For the nine months ended September 30, 1999,
our other income increased $0.1 million, or 3.3%, to $3.4 million from
$3.3 million for the comparable period of 1998. This increase was primarily the
result of an increase in interest income earned on restricted investments less
expenses that we incurred pursuing acquisitions that were not consummated.

MINORITY INTERESTS IN INCOME OF SUBSIDIARIES. For the nine months ended
September 30, 1999, our minority interests in income of subsidiaries increased
$0.1 million, or 8.2%, to $2.1 million from $2.0 million for the comparable
period of 1998. This increase was attributable to increased income earned from
our subsidiaries in established markets in which we do not own a 100% interest,
which

50
<PAGE>

was offset by losses from subsidiaries in newly-acquired markets in which we do
not own a 100% interest.

EXTRAORDINARY EXPENSE. During the first quarter of 1998, we incurred an
extraordinary pretax loss of approximately $3.3 million as a result of writing
off previously capitalized financing costs associated with revolving credit
facilities that were refinanced in March 1998.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS. For the nine months ended
September 30, 1999, our loss, net of income tax benefits, from discontinued
operations increased $24.6 million, or 143.3%, to $41.8 million from
$17.2 million for the comparable period of 1998. The increase was a result of
increased losses by Logix, our local exchange carrier subsidiary, that
substantially expanded its operations in 1999. We intend to distribute the
capital stock of Logix to our current stockholders.

NET INCOME (LOSS). For the nine months ended September 30, 1999, our net
loss was $89.0 million. Our net loss increased $58.1 million, or 188.1%, from
$30.9 million for the comparable 1998 period. The increase in our net loss was
primarily attributable to increased depreciation and amortization expense and
interest expense resulting from our 1998 and 1999 business acquisitions and
related financings, as well as the increase in our loss from discontinued
operations.

DIVIDENDS ON PREFERRED STOCK. For the nine months ended September 30, 1999,
our dividends on preferred stock increased $33.8 million, or 201.6%, to
$50.5 million from $16.7 million for the comparable 1998 period. The increase
was primarily the result of additional dividends on our December 1998 and May
1999 issuances of senior preferred stock.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

OPERATING REVENUES. For the year ended December 31, 1998, our total
operating revenues increased $73.3 million, or 109.9%, to $140.0 million from
$66.7 million for the year ended December 31, 1997. Our total service revenues,
roaming revenues and equipment sales and other revenues represented 49.6%, 47.5%
and 3.0%, respectively, of our total operating revenues for the year ended
December 31, 1998 and 57.6%, 39.4% and 3.1%, respectively, of our total
operating revenues, respectively, for the year ended December 31, 1997.

The following table sets forth the components of our revenues for the
periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------
1997 1998
-------- --------
($ IN THOUSANDS)
<S> <C> <C>
Operating revenues:
Service revenues................................. $ 38,410 $ 69,402
Roaming revenues................................. 26,263 66,479
Equipment sales and other revenues............... 2,041 4,154
-------- --------
Total.......................................... $ 66,714 $140,035
======== ========
</TABLE>

For the year ended December 31, 1998, service revenues increased
$31.0 million, or 80.7%, to $69.4 million from $38.4 million for the year ended
December 31, 1997. Of this increase, $15.8 million was attributable to
acquisitions. The remaining $15.2 million was primarily attributable to
increased penetration and usage in our central and eastern regions. Our
subscriber base increased 251.7% to 352,005 at December 31, 1998 from 100,093 at
December 31, 1997. We added 220,626 subscribers since December 31, 1997 as a
result of acquisitions. For the year ended December 31, 1998, our average
monthly service revenues per subscriber decreased 2.4% to $40 from $41 for the
year ended December 31, 1997 due to the addition of lower rate subscribers in
our eastern region and competitive market pressures in all our markets.

51
<PAGE>

For the year ended December 31, 1998, roaming revenues increased
$40.2 million, or 153.1%, to $66.5 million from $26.3 million for the year ended
December 31, 1997. Of this increase, $25.0 million was attributable to
acquisitions. The remaining $15.2 million was primarily attributable to
increased roaming minutes in our central and eastern regions due to expanded
coverage areas and increased usage in these markets.

For the year ended December 31, 1998, equipment sales and other revenues
increased $2.2 million, or 103.5%, to $4.2 million from $2.0 million for the
year ended December 31, 1997 due to increased sales of equipment as a result of
growth in subscribers.

COST OF SERVICE. For the year ended December 31, 1998, our total cost of
service increased $16.8 million, or 102.5%, to $33.3 million from $16.4 million
for the year ended December 31, 1997. Of this increase, $9.0 million was
attributable to acquisitions. The remaining $7.8 million was primarily
attributable to increased subscribers and minutes of use in our central and
eastern regions and payments we made to other wireless service providers for the
use of their networks while our customers were roaming in their service areas.
As a percentage of service and roaming revenues, our cost of cellular service
remained constant at 24.5% for the year ended December 31, 1998 and the year
ended December 31, 1997.

COST OF EQUIPMENT. For the year ended December 31, 1998, our cost of
equipment increased $4.3 million, or 106.6%, to $8.4 million from $4.0 million
in 1997, primarily as a result of increases in the volume of equipment we sold
due to the growth in subscribers.

MARKETING AND SELLING COSTS. For the year ended December 31, 1998, our
marketing and selling costs increased $11.7 million, or 109.9%, to
$22.4 million from $10.7 million for the year ended December 31, 1997. As a
percentage of total operating revenues, marketing and selling costs remained
constant at 16.0% for the year ended December 31, 1998 and the year ended
December 31, 1997. We added 65,665 gross subscribers in the year ended
December 31, 1998 and 33,354 gross subscribers in the year ended December 31,
1997. Gross subscriber additions do not include subscribers acquired through
business acquisitions.

GENERAL AND ADMINISTRATIVE COSTS. For the year ended December 31, 1998, our
general and administrative costs increased $14.5 million, or 125.5%, to
$26.1 million from $11.6 million for the year ended December 31, 1997. This
increase was the result of increased infrastructure costs, including customer
service, billing, collections and administrative costs as a result of our
overall growth. As a percentage of total operating revenues, general and
administrative costs increased to 18.6% in the year ended December 31, 1998 from
17.3% in the year ended December 31, 1997. The increase as a percentage of total
operating revenues resulted from initial inefficiencies created in our
administrative areas as a result of the fourth quarter 1998 operational split of
our ongoing wireless and our discontinued wireline business segments. In
addition, we experienced higher than expected levels of bad debt expenses in
certain markets in the fourth quarter of 1998.

DEPRECIATION AND AMORTIZATION EXPENSE. For the year ended December 31,
1998, our depreciation and amortization expense increased $30.3 million, or
180.5%, to $47.1 million from $16.8 million for 1997. Depreciation and
amortization of assets acquired in acquisitions accounted for $21.1 million of
this increase. The remainder of this increase was from depreciation attributable
to our depreciable assets.

INTEREST EXPENSE. For the year ended December 31, 1998, our interest
expense increased $11.3 million, or 41.0%, to $39.0 million from $27.6 million
for the year ended December 31, 1997. The increase resulted primarily from our
increased borrowings in 1998 to finance our acquisitions.

OTHER INCOME (EXPENSE), NET. For the year ended December 31, 1998, our
other income increased $1.1 million, or 38.9%, to $3.9 million from
$2.8 million for the year ended December 31, 1997. Of this

52
<PAGE>
increase, $0.9 million was attributable to increased interest income in 1998. In
1998, we had higher investment balances than in 1997, primarily related to
proceeds from the sale of securities pending their use and escrow deposits
relating to acquisitions completed in 1998.

MINORITY INTERESTS IN INCOME OF SUBSIDIARIES. For the year ended
December 31, 1998, our minority interests in income of subsidiaries increased
$0.8 million, or 46.9%, to $2.5 million from $1.7 million in 1997. This increase
was attributable to the increased income earned from our subsidiaries in
established markets in which we do not own a 100% interest, which was offset by
losses from subsidiaries in newly-acquired markets in which we do not own a 100%
interest.

EXTRAORDINARY EXPENSE. In 1998 and 1997, we incurred an extraordinary
pretax loss of approximately $3.3 million and $2.2 million, respectively, as a
result of writing off previously capitalized financing costs associated with
revolving credit facilities that were refinanced in March 1998 and
February 1997, respectively.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS. In the year ended December 31,
1998, we had a loss from discontinued operations of $27.1 million, compared to
income from discontinued operations of $0.3 million in the year ended
December 31, 1997. The loss was the result of increased losses by Logix, our
local exchange carrier subsidiary, that substantially expanded its operations in
1998. We intend to distribute, prior to this offering, the capital stock of
Logix to our current stockholders.

NET INCOME (LOSS). For the year ended December 31, 1998, our net loss was
$52.6 million. Our net loss increased $35.9 million, or 214.1%, from
$16.7 million in the year ended December 31, 1997. The increase in our net loss
was primarily attributable to increased depreciation and amortization expense
and interest expense resulting from our 1998 business acquisitions and related
financings and increased losses from discontinued operations.

DIVIDENDS ON PREFERRED STOCK. For the year ended December 31, 1998, our
dividends on preferred stock increased $21.4 million, or 820.2%, to
$24.0 million from $2.6 million in the year ended December 31, 1997. The
increase was primarily the result of additional dividends on our January 1998
issuance of senior preferred stock.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

OPERATING REVENUES. For the year ended December 31, 1997, our total
operating revenues increased $39.8 million, or 147.6%, to $66.7 million from
$26.9 million for the year ended December 31, 1996. Our total service revenues,
roaming revenues and equipment sales and other revenues represented 57.6%, 39.4%
and 3.1% of our total operating revenues, respectively, in the year ended
December 31, 1997 and 65.3%, 29.1% and 5.5% of our total operating revenues,
respectively, in the year ended December 31, 1996.

The following table sets forth the components of our revenues for the
periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
---------------------------
1996 1997
-------- --------
($ IN THOUSANDS)
<S> <C> <C>
Operating revenues:
Service revenues................................... $17,593 $38,410
Roaming revenues................................... 7,852 26,263
Equipment sales and other revenues................. 1,494 2,041
------- -------
Total.......................................... $26,939 $66,714
======= =======
</TABLE>

For the year ended December 31, 1997, our service revenues increased
$20.8 million, or 118.3%, to $38.4 million from $17.6 million for the year ended
December 31, 1996. Of this increase, $15.0 million was attributable to the
acquisitions of our Maryland and Arizona properties in 1997 and the inclusion

53
<PAGE>

of the operations of our Kansas/Missouri properties for all of 1997. The
remaining increase resulted primarily from increased penetration and usage in
our central region. Our subscriber base increased 194.8% to 100,093 at
December 31, 1997 from 33,955 at December 31, 1996. We added 42,608 subscribers
as a result of the acquisitions of our east Maryland and west Maryland markets.
For the year ended December 31, 1997, our average monthly service revenues per
subscriber decreased 15.0% to $41 from $48 for the year ended December 31, 1996
due to the addition of lower rate subscribers in our eastern region and
competitive market pressures in all our markets.

For the year ended December 31, 1997, our roaming revenues increased
$18.4 million, or 234.4%, to $26.3 million from $7.9 million for the year ended
December 31, 1996. Of this increase, $15.6 million was attributable to the
acquisitions of our Maryland and Arizona markets in 1997 and the inclusion of
the operations of our Kansas/Missouri markets for all of 1997. The remaining
increase was primarily attributable to increased roaming minutes in our central
region due to expanded coverage areas and increased usage.

For the year ended December 31, 1997, equipment sales and other revenues
increased $0.5 million, or 36.7%, to $2.0 million from $1.5 million in 1996 due
to increased sales of equipment as a result of growth in subscribers.

54
<PAGE>

COST OF SERVICE. For the year ended December 31, 1997, our total cost of
service increased $10.3 million, or 168.5%, to $16.4 million from $6.1 million
for the year ended December 31, 1996. Of this increase, $8.4 million was
attributable to the acquisitions of our Maryland and Arizona properties in 1997
and the inclusion of the operations of our Kansas/Missouri markets for all of
1997. The remaining increase was primarily the result of increased subscribers
and minutes of use in our Central Region and payments we made to other wireless
service providers for the use of their networks while our customers were roaming
in their service areas. As a percentage of service and roaming revenues, cost of
service increased to 25.4% for the year ended December 31, 1997 from 24.0% for
the year ended December 31, 1996. This increase was primarily due to the
increased payments we made to other wireless service providers for roaming
charges of our subscribers, as well as additional facility lease costs in east
Maryland.

COST OF EQUIPMENT. For the year ended December 31, 1997, our total cost of
equipment increased $1.4 million, or 57.3%, to $4.0 million from $2.6 million
for the year ended December 31, 1996, primarily as a result of increases in the
volume of equipment we sold due to the growth in subscribers.

MARKETING AND SELLING COSTS. For the year ended December 31, 1997, our
marketing and selling costs increased $6.2 million, or 139.1%, to $10.7 million
from $4.5 million for the year ended December 31, 1996. The increase was
primarily due to the higher level of subscribers we added during 1997. We added
33,354 gross subscribers in 1997 with subscribers added in our eastern region
and in our Arizona 5 license since their acquisitions making up 16,469 and
1,307, respectively, of the gross subscribers added. We added 11,970 gross
subscribers in 1996. Gross subscriber additions do not include subscribers
acquired through business acquisitions.

GENERAL AND ADMINISTRATIVE COSTS. For the year ended December 31, 1997, our
general and administrative costs increased $7.7 million, or 196.2%, to
$11.6 million from $3.9 million for the year ended December 31, 1996. The
increase was primarily due to our increased billing costs as a result of our
growth in our wireless subscribers, our 1997 acquisitions, the inclusion of our
Kansas/Missouri markets for all of 1997, and increased salary costs resulting
from additional personnel. As a percentage of total operating revenues, general
and administrative costs increased from 14.5% in 1996 to 17.3% in 1997. This
increase resulted from the addition of personnel necessary to support our
expanded operations.

DEPRECIATION AND AMORTIZATION EXPENSE. For the year ended December 31,
1997, our depreciation and amortization expense increased $11.6 million, or
220.5%, to $16.8 million from $5.2 million for the year ended December 31, 1996.
Depreciation and amortization expense increased $12.1 million as a result of the
amortization of assets acquired in the acquisitions of our Maryland and Arizona
markets in 1997 and the Kansas/Missouri acquisition in 1996, which was partially
offset by a slight decrease related to our depreciation and amortization of
assets in our central region.

INTEREST EXPENSE. For the year ended December 31, 1997, interest expense
increased $23.3 million to $27.6 million from $4.3 million for 1996. The
increase resulted primarily from our increased borrowings to finance the
acquisitions of the Maryland and Arizona properties.

OTHER INCOME (EXPENSE), NET. For the year ended December 31, 1997, our
other income increased $4.3 million to $2.8 million from other expense of
$1.5 million in the year ended December 31, 1996. The increase resulted
primarily from interest earned on securities we purchased and pledged to secure
payment of the first four semi-annual interest payments on our senior notes due
2007.

MINORITY INTERESTS IN INCOME OF SUBSIDIARIES. For the year ended
December 31, 1997, our minority interests in income of subsidiaries increased
$1.0 million, or 150.8%, to $1.7 million from $0.7 million in 1996. This
increase was attributable to the increased income earned from our subsidiaries
in

55
<PAGE>
established markets in which we do not own a 100% interest, which was offset by
losses from subsidiaries in newly-acquired markets in which we do not own a 100%
interest.

EXTRAORDINARY EXPENSE. In 1997 and 1996, we incurred an extraordinary
pretax loss of approximately $2.2 million and $0.9 million, respectively, as a
result of writing off previously capitalized financing costs associated with a
revolving credit facility that we refinanced in February 1997 and March 1996,
respectively.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS. Our loss from discontinued
operations in the year ended December 31, 1997 of $0.3 million remained constant
from the year ended December 31, 1996.

NET INCOME (LOSS). For the year ended December 31, 1997, our net loss was
$16.7 million. Our net loss increased $15.3 million from $1.4 million in the
year ended December 31, 1996. The increase in our net loss is primarily
attributable to increased depreciation and amortization expense and interest
expense resulting from our 1997 business acquisitions and related financings.

DIVIDENDS ON PREFERRED STOCK. For the year ended December 31, 1997, our
dividends on preferred stock increased $1.8 million, or 206.6%, to $2.6 million
from $0.8 million in the year ended December 31 1996. This increase was
primarily the result of additional dividends on our senior preferred stock,
which was outstanding for all of 1997 but only part of 1996.

LIQUIDITY AND CAPITAL RESOURCES

We have required, and will likely continue to require, substantial capital
to further develop, expand and upgrade our cellular systems and and those we may
acquire. We have financed our operations through cash flows from operating
activities, bank debt and the sale of debt and equity securities. We had capital
expenditures of $40.2 million during the first nine months of 1999 and we expect
our capital expenditures for the last three months of 1999 to be approximately
$32.0 million, excluding acquisitions. We have budgeted approximately
$115.0 million to $120.0 million for capital expenditures in 2000. We may also
require additional financing for future acquisitions, to refinance our debt at
its final maturities and to meet our mandatory redemption provisions on our
senior preferred stock.

At September 30, 1999, we had a working capital deficit of $14.0 million, a
ratio of current assets to current liabilities of 0.9:1 and an unrestricted cash
balance of $0.3 million, which compares to working capital of $13.5 million, a
ratio of current assets to current liabilities of 1.1:1 and an unrestricted cash
balance of $22.3 million at December 31, 1998, and working capital of
$15.9 million, a ratio of current assets to current liabilities of 1.7:1 and an
unrestricted cash balance of $2.8 million at December 31, 1997.

Our net cash provided by operating activities totaled $11.5 million and
$10.3 million for the nine months ended September 30, 1999 and 1998,
respectively. The increase of $1.2 million was primarily due to lower
depreciation and amortization, which was partially offset by a decrease in
deferred credits, an increase in current assets, a decrease in liabilities and
our net loss for the period. Our net cash provided by operating activities
totaled $28.0 million for 1998 compared to $6.9 million for 1997 and
$5.2 million for 1996. The increase of $21.1 million from 1997 to 1998 was
primarily due to lower depreciation and amortization, a decrease in current
assets and an increase in liabilities, which was partially offset by our net
loss for the period. The increase of $1.7 million from 1996 to 1997 was
primarily due to a decrease in current assets, an increase in liabilities, lower
depreciation and amortization and an increase in deferred income taxes, which
was partially offset by our net loss for the period.

Our net cash used in investing activities, which totaled $93.4 million and
$293.2 million for the nine months ended September 30, 1999 and September 30,
1998, respectively, related primarily to acquisitions and capital expenditures
in all periods. Acquisitions and their related costs accounted for

56
<PAGE>

$46.4 million and $200.8 million and capital expenditures were $40.2 million and
$23.8 million for the nine months ended September 30, 1999 and September 30,
1998, respectively. Our cash used in investing activities, which totaled
$999.1 million, $217.6 million and $43.9 million for 1998, 1997 and 1996,
respectively, principally related to acquisitions and capital expenditures in
all periods. Acquisitions accounted for $945.4 million, $190.7 million and
$30.0 million in 1998, 1997 and 1996, respectively, and capital expenditures
were $55.3 million, $17.8 million and $13.5 million in 1998, 1997 and 1996,
respectively.

Net cash provided by financing activities was $59.9 million for the nine
months ended September 30, 1999 compared to $285.2 million for the nine months
ended September 30, 1998. Financing activity sources for the nine months ended
September 30, 1999 consisted primarily of the issuance of $170.0 million of
senior preferred stock, maturities of restricted investments of $19.1 million
and proceeds from long-term debt of $79.0 million, which was partially offset by
the redemption of $55.0 million of our Class F and Class G preferred stock and
repayments of long-term debt totaling $141.1 million. Net cash provided by
financing activities was $990.6 million for 1998 compared to $212.5 million for
1997 and $38.9 million for 1996. Financing activity sources for 1998 consisted
primarily of $740.0 million of proceeds from bank borrowings, the issuance of
$200.0 million of Dobson/Sygnet senior notes, the issuance of $225.0 million of
senior preferred stock and the issuance of $115.0 million of other preferred
stock. These activities were partially offset by financing activity uses,
including the purchase of $67.7 million of restricted investments to be used to
fund the first six semi-annual interest payments on the Dobson/Sygnet senior
notes and $62.0 million of deferred financing costs relating to new credit
facilities and the financing of our acquisition of Sygnet. Proceeds from
long-term debt borrowings exceeded long-term debt repayments by $768.5 million,
$256.3 million and $39.4 million in 1998, 1997 and 1996, respectively.

The minority partners in partnerships that own certain of our cellular
operations receive distributions equal to their share of the profit multiplied
by estimated income tax rates. Under our bank credit agreements, our minority
partners are not entitled to receive any cash distributions in excess of amounts
required to meet income tax obligations until all indebtedness of their
respective partnerships to us is paid or extinguished.

We have agreed to purchase approximately $65.0 million of cell site and
switching equipment from Nortel Networks Corp. prior to November 2001. Of this
commitment, approximately $27.8 million remained outstanding at September 30,
1999. Under another equipment supply agreement, we agreed to purchase
approximately $81.0 million of cell site and switching equipment from Lucent
Technologies Inc. by January 13, 2002. Of this commitment, $33.2 million
remained outstanding at September 30, 1999. We expect that these purchases will
be financed using funds available under our credit facilities.

We have received a commitment from Bank of America, N.A. and its affiliate,
Banc of America Securities LLC, on behalf of a group of banks, to provide us
with an $800.0 million credit facility, the proceeds of which will be used
primarily to consolidate the indebtedness of our Dobson Cellular Operations
Company subsidiary under its $160.0 million credit facility and our Dobson
Operating Company subsidiary under its $250.0 million senior secured credit
facility, to pay the cash portion of certain of our pending acquisitions and to
fund our expected repurchase of our outstanding $160.0 million principal amount
of 11 3/4% senior notes due 2007. This new credit facility will include a
$300.0 million revolving credit facility and a $500.0 million term loan
facility, both of which will mature in 2007.

Advances under our new credit facility will bear interest, at our option, at
prime rate or LIBOR plus up to an additional 1.5% to 2.5% respectively, for the
revolving credit facility and up to an additional 1.5% to 3.0% respectively, for
the term loan facility. Our obligations under the credit facility will be
secured by a pledge of the stock of our restricted subsidiaries, and upon
request by the banks, by liens on all of our assets and those of our restricted
subsidiaries except FCC licenses.

57
<PAGE>
We will be required to amortize the term loan facility quarterly in amounts
ranging from $25.0 million in 2001 to $125.0 million in 2007. In addition, we
will be required to make prepayments of amounts received from asset sales,
excess cash flows and proceeds from new borrowings or the sale of equity, other
than this offering. We will have the right to prepay the credit facility in
whole or in part at any time subject to the payment of certain fees.

Our new credit facility will contain a number of restrictive covenants that,
among other things, will limit our ability to incur additional indebtedness,
create liens and pay dividends. In addition, we will be required to maintain
certain financial ratios, including a ratio of total indebtedness to EBITDA of
7.75 to 1; a ratio of EBITDA to debt service requirements of 1.15 to 1; an
interest coverage ratio of at least 1.40 to 1; and a ratio of EBITDA minus
capital expenditures to debt service requirements of greater than 1.10 to 1.

Our new credit facility will replace the Dobson Cellular Operations Company
credit facility and the Dobson Operating Company credit facility. As of
September 30, 1999, we had outstanding indebtedness of $272.0 million and
availability of approximately $87.0 million under these two facilities.
Obligations under these two credit facilities are secured by all existing and
future assets of Dobson Cellular Operations Company and Dobson Operating
Company, and are guaranteed by their restricted subsidiaries. These two credit
facilities are not secured, however, by FCC licenses. Each of these two credit
facilities require that we maintain specified financial ratios. The failure to
maintain these ratios would constitute an event of default, notwithstanding our
ability to meet debt service obligations. To date, we have met the required
financial ratios. These two credit facilities each amortize quarterly beginning
June 30, 2000 and terminate on June 30, 2006. The weighted average interest rate
on the Dobson Cellular Operations Company credit facility was 6.5% as of
September 30, 1999. The weighted average interest rate on the Dobson Operating
Company credit facility was 7.0% as of September 30, 1999.

Our subsidiary, Dobson/Sygnet, is a party to a credit agreement for an
aggregate of $430.0 million, consisting of a $50.0 million revolving credit
facility and $380.0 million of term loan facilities. Interest on the revolving
credit facility and the term loan facilities is based on a prime rate or a LIBOR
formula, and has ranged between 8.3% and 8.9% since inception. As of
September 30, 1999, we had $406.0 million outstanding under the Dobson/Sygnet
credit facilities and we had $24.0 million of availability under the
Dobson/Sygnet credit facilities.

The obligations under the Dobson/Sygnet credit facilities are secured by a
pledge of the capital stock of Dobson/Sygnet's operating subsidiary as well as a
lien on substantially all of the assets of Dobson/Sygnet and its operating
subsidiary. The Dobson/Sygnet credit facilities require that Dobson/ Sygnet and
we maintain certain financial ratios. The failure to maintain these ratios would
constitute an event of default, notwithstanding Dobson/Sygnet's ability to meet
its debt service obligations. The Dobson/Sygnet credit facilities amortize
quarterly beginning on December 31, 2000 and terminate on December 31, 2008. The
weighted average interest rate on the Dobson/Sygnet credit facilities was 8.7%
as of September 30, 1999.

Dobson/Sygnet has outstanding $200.0 million aggregate principal amount of
senior notes that mature in 2008. The Dobson/Sygnet notes bear interest at an
annual rate of 12 1/4%, payable semi-annually on each June 15 and December 15,
beginning June 15, 1999. The Dobson/Sygnet note indenture contains restrictive
covenants that, among other things, limit our ability and that of Dobson/
Sygnet's subsidiaries to incur additional indebtedness, create liens, pay
dividends or make distributions in respect of their capital stock, make
investments or certain other restricted payments, sell assets, redeem capital
stock, issue or sell stock of restricted subsidiaries, enter into transactions
with stockholders or affiliates or effect a consolidation or merger. Of the net
proceeds from the sale of these notes, we used $67.7 million, to purchase
securities we have pledged to secure the first six semi-annual interest payments
on the notes.

58
<PAGE>
We have outstanding $160.0 million aggregate principal amount of senior
notes which mature in April 2007. The senior notes bear interest at an annual
rate of 11 3/4%, payable semi-annually on each April 15 and October 15. We
expect to offer to repurchase all of our outstanding senior notes with funds
available under our new credit facility described above.

As of September 30, 1999, we have issued and outstanding 12 1/4% senior
preferred stock and 13% senior preferred stock with aggregate liquidation values
of $286.3 million and $179.1 million, respectively, including accrued stock
dividends. Each of the certificates of designation for our senior preferred
stock contains several restrictive covenants which may limit our ability to
issue indebtedness in the future.

We recently entered into definitive agreements to acquire the FCC licenses
for, and certain assets related to, Alaska 1, Alaska 3, Michigan 3 and
Michigan 10 rural service areas for an aggregate purchase price of
$159.0 million. These acquisitions are expected to close in the first quarter of
2000. We are also a party to an agreement to purchase the FCC license for, and
certain assets related to, Pennsylvania 2 RSA for $6.0 million. Pending the
closing of this acquisition, we are managing and control the operation of the
Pennsylvania 2 cellular market under the supervision of the seller. On June 28,
1999 we concluded our purchase of the FCC license for, and certain assets
related to, Maryland 1 RSA and an unserved portion of Cumberland, Maryland MSA
for $9.1 million in cash using available funds under our credit facilities. In
the fourth quarter of 1999, we also acquired the FCC license for, and certain
assets related to, a portion of Arizona 1 RSA for $24.0 million. Arizona 1 is
located in northwestern Arizona. We have no definitive agreements with respect
to any acquisitions other than our acquisitions of Alaska 1, Alaska 3,
Michigan 3, Michigan 10 and Pennsylvania 2 rural service areas and the American
Cellular acquisition.

The American Cellular joint venture has obtained a commitment for a bank
credit facility of $1.75 billion. After initial funding and borrowings under
this credit facility to complete the American Cellular acquisition, we expect
there will be approximately $75.0 million of credit availability under this
facility. American Cellular has required, and will likely continue to require,
substantial capital to further develop, expand and upgrade its cellular systems.
American Cellular has budgeted approximately $70.0 million for capital
expenditures in 2000. If American Cellular does not generate sufficient cash
flows from operations or otherwise have sufficient access to capital to meet all
of its debt service, capital expenditure, working capital or other operating
needs, we may be required to fund our 50% share of any capital needs of the
American Cellular joint venture in order to protect our substantial investment
in the joint venture. See "The American Cellular Acquisition--Joint Venture
Credit Facility."

The following table reflects our planned sources and uses of funds as of
December 15, 1999 (dollars in millions), assuming a public offering price of
$21 per share:

<TABLE>
<CAPTION>
SOURCES USES
------- ----
<S> <C> <C> <C>
Net proceeds from sale of Class A Contribution to American Cellular
common stock....................... $489.8 joint venture...................... $372.5
Payment of debt...................... 18.0
Redemption of Class E Preferred
Stock.............................. 99.3
------
Total................................ 489.8
======
</TABLE>

If our joint venture with AT&T Wireless does not consummate the American
Cellular acquisition, we will initially reduce our borrowings under the new
credit facility or we may redeem a portion of our outstanding senior preferred
stock. In addition, we may be required to pay damages to American Cellular if
the American Cellular joint venture is in default under the American Cellular
merger agreement.

59
<PAGE>
Although we cannot provide any assurance, assuming successful implementation
of our strategy, including the further development of our cellular systems and
significant and sustained growth in our cash flows, we believe that borrowings
under our new credit facility, the net proceeds from this offering and cash
flows from operations should be sufficient to allow us to consummate our pending
acquisitions and are expected to be sufficient to satisfy our currently expected
capital expenditures, working capital and debt service obligations. The actual
amount and timing of our future capital requirements may differ materially from
our estimates as a result of, among other things, the demand for our services
and regulatory, technological and competitive developments. We currently expect
that we may have to refinance our indebtedness at their respective maturities
commencing in 2006. We will also need to refinance our mandatory redemption
obligations under our senior preferred stock. Sources of additional financing
may include commercial bank borrowings, vendor financing and the sale of equity
or debt securities. We cannot assure you that any such financing will be
available on acceptable terms or at all.

EFFECT OF NEW ACCOUNTING STANDARDS

In July 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, or SFAS, No. 133, Derivatives and Hedging.
SFAS 133 establishes uniform hedge accounting criteria for all derivatives
requiring companies to formally document, designate and assess the effectiveness
of transactions that utilize hedge accounting. Under SFAS 133, derivatives will
be recorded on the balance sheet as either an asset or liability measured at
their fair value, with changes in the fair value recognized in current earnings.
Under SFAS 133, we would record an asset of $0.3 million relating to an interest
rate hedge valuation at September 30, 1999. However, in June 1999, the Financial
Accounting Standards Board issued SFAS No. 137, which amended SFAS 133 by
deferring the effective date to fiscal years beginning after June 15, 2000. We
have not determined the timing or method of adoption of SFAS 133.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk relates to changes in interest rates. Market risk is
the potential loss arising from adverse changes in market prices and rates,
including interest rates. The objective of our financial risk management is to
minimize the negative impact of interest rate fluctuations on our earnings and
equity. In March 1999, we entered into an interest rate swap that effectively
fixed the interest rate on $110.0 million of the principal outstanding amount of
the Dobson/Sygnet credit facilities at approximately 5.48% plus a factor based
on our leverage, approximately 8.76% at September 30, 1999. The term of the
interest rate swap is 24 months. In June 1999, we entered into an interest rate
cap agreement terminating on June 14, 2001. The cap agreement minimizes our
interest rate exposure by setting a maximum rate of 7.50% plus a factor based on
our leverage, approximately 8.88% at September 30, 1999, for $160.0 million of
our indebtedness. The counterparty to each of the interest rate swap and cap are
major financial institutions. Increases in interest expense relating to the
interest rate hedge for the nine months ended September 30, 1998 and 1999 were
reflected in income and were immaterial. We did not recognize any gains or
losses in 1996, 1997 or 1998 from such interest rate hedging. We do not enter
into derivatives or other financial instruments for trading or speculative
purposes.

The fair market value of long-term fixed interest rate debt is subject to
interest rate risk. Generally, the fair market value of fixed interest rate debt
will increase as interest rates fall and decrease as interest rates rise. The
estimated fair market values of our total long-term fixed rate debt and our
variable-rate debt are shown in Note 15 to our September 30, 1999 consolidated
financial statements. Based on our market risk sensitive instruments outstanding
at September 30, 1999, we have determined that there was no material market risk
exposure to our consolidated financial position, results of operations or cash
flows as of such date.

60
<PAGE>
IMPACT OF YEAR 2000 ISSUE

In April 1998, we established a multi-disciplined team to perform a year
2000 impact analysis. The team consisted of representatives from each of our
lines of business, as well as representatives from key corporate departments,
and was headed by a full-time year 2000 compliance manager. The team created a
year 2000 assessment methodology that brought a structured approach to the
assessment and management reporting process.

We completed an inventory of our automated systems and services and
identified significant risk areas by line of business, specific compliance
requirements and costs and estimated completion dates for affected systems. The
services we provide are based on the systems of regional Bell operating
companies and other systems outside our control. We have had contact with all of
the vendors of products and services that we believe are critical to our
operations. Our vendors' representations pertaining to year 2000 compliance have
come in writing directly to us, in contracts and by accessing year 2000
information available at their web sites. While all of our vendors have provided
some type of assurance that their products will be year 2000 compliant, not all
have provided us expressly with a "year 2000 compliance statement" and/or a
"year 2000 warranty." Our focus with our vendors has been directed toward
obtaining assurances of year 2000 compliance in the form of documented year 2000
planning and testing and third party audits, whenever available.

We do not have large scale legacy applications used by many
telecommunications providers. From an information systems standpoint, we have
historically relied on outsourcing relationships for most of our business and
operational support applications. Those applications that have not been
outsourced to service providers have been deployed using packaged software from
outside vendors. As a result, the focus of our remediation efforts is not a
large scale in-house effort, but rather an identification of third party systems
and services that are not currently year 2000 compliant and oversight of third
party compliance efforts.

The results of the impact analysis revealed that for most of our information
systems, services and telecommunications infrastructure, year 2000 compliant
versions were to be included as a part of existing maintenance and/or service
agreements at no additional cost to us and were in place and tested by the end
of the second quarter of 1999. All critical systems relating to call delivery,
billing, accounting, payroll and customer care were running on software that was
designated by the vendor as being year 2000 compliant by the end of October
1999. We have replaced or upgraded all non-critical systems such as workstations
to ensure compliance with year 2000. The cost of upgrading or replacing those
systems that were not covered by existing service or maintenance agreements was
approximately $0.75 million. Our estimated upgrade costs does not include the
cost of upgrading and/or replacing those non-year 2000 compliant systems that
were replaced or upgraded based on non-year 2000 related business reasons.

We will continue to analyze systems and services that utilize date-embedded
codes that may experience operational problems when year 2000 is reached. We
will continue communicating with third party vendors of systems software and
equipment, suppliers of telecommunications capacity and equipment, roaming
partners, customers and others with which we do business to coordinate year 2000
compliance. Our year 2000 contingency and business continuity plans are in
development and will be completed during the fourth quarter of 1999. If we are
unable to provide systems and services to our customers, because either our own
systems or those of our vendors are not year 2000 compliant, our reasonably
likely worst case scenario is that we would experience a reduction in our
operating revenues, which could adversely affect our ability to meet our
operating and financial obligations.

61
<PAGE>
INDUSTRY OVERVIEW

Wireless communications systems use a variety of radio frequencies to
transmit voice and data. Broadly defined, the commercial wireless communication
industry includes one-way radio applications, such as paging or beeper services,
and two-way radio applications, such as cellular services, personal
communications services and enhanced specialized mobile radio services. Since
the introduction of commercial cellular service in 1983, the wireless
communications industry has experienced dramatic growth. The number of
subscribers for cellular services, personal communications services and enhanced
specialized mobile radio services has increased from an estimated 340,000 at the
end of 1985 to over 76 million as of June 30, 1999 according to the Cellular
Telecommunications Industry Association, an international association for the
wireless industry. The following chart illustrates the annual growth in U.S.
wireless communication customers for cellular services, personal communications
services and enhanced specialized mobile radio services through June 30, 1999.

<TABLE>
<CAPTION>
JUNE 30
WIRELESS INDUSTRY STATISTICS(1) 1993 1994 1995 1996 1997 1998 1999
- ------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total service revenues (in billions)...... $ 10.9 $ 14.2 $ 19.1 $ 23.6 $ 27.5 $ 33.1 $ 19.4
Subscribers at end of period (in
millions)............................... 16.0 24.1 33.8 44.0 55.3 69.2 76.3
Subscriber growth......................... 45.1% 50.8% 40.0% 30.4% 25.6% 25.1% 25.4%
Average monthly service revenues per
subscriber, excluding roaming
revenues................................ $58.74 $51.48 $47.59 $44.66 $41.12 $39.66 $39.97
Average monthly service revenues per
subscriber, including roaming
revenues................................ $67.13 $59.08 $54.91 $50.61 $46.11 $44.35 $44.37
Penetration at end of period.............. 6.2% 9.4% 13.0% 16.3% 20.7% 25.7% 27.9%
</TABLE>

- ------------------------------

SOURCE: CELLULAR TELECOMMUNICATIONS INDUSTRY ASSOCIATION.

(1) Statistics for 1993 through 1998 were as of and for the years ended
December 31. Statistics for 1999 are as of and for the six months ended
June 30.

Cellular service, which operates in the 800 MHz frequency band of the radio
spectrum, is currently the predominant form of commercial mobile wireless voice
communications service. Cellular systems have historically been analog-based
systems, which use one continuous electronic signal that varies in amplitude or
frequency over a single radio channel. However, over the last several years
cellular operators have deployed digital service in most of the major
metropolitan markets and in many rural and suburban areas. Digital systems
convert voice or data signals into a stream of digits that is compressed before
transmission, enabling a single radio channel to carry multiple simultaneous
signal transmissions. This increases the capacity of the networks of cellular
operators. This enhanced capacity, along with enhancements in digital protocols,
allows digital-based wireless technologies to offer new and enhanced services,
such as greater call privacy, caller ID, call forwarding, call waiting and more
complex data transmission features, including facsimile, electronic mail,
internet and data network access.

The FCC began auctioning spectrum between 1850 to 1990 MHz in late 1994 to
be used by personal communications service licensees to provide wireless
communications services which are substantially similar to digital cellular
services. Personal communications services compete directly with existing
cellular telephone, paging and specialized mobile radio services. In addition to
personal communications services and cellular frequencies, enhanced specialized
mobile radio licensees provide interconnected two-way voice and data services
within a 15 MHz band of spectrum.

Wireless communications systems are divided into multiple geographic
coverage areas, known as "cells." Each cell contains a transmitter, a receiver
and signaling equipment, collectively known as the "cell site." The cell site is
connected by microwave or landline telephone circuits to a switch that uses
computers to control the operation of the wireless systems for the entire
service area. The system controls the transfer of calls from cell to cell as a
subscriber's handset travels, coordinates calls to and

62
<PAGE>
from handsets, allocates calls among the cells within the system and connects
calls to the local landline telephone system or to a long distance carrier.
Wireless communications providers establish interconnection agreements with
local exchange carriers and interexchange carriers, thereby integrating their
system with the existing landline communications system. Because the signal
strength of transmission between a handset and a cell site declines as the
handset moves away from the cell site, the switching office and the cell site
monitor the signal strength of calls in progress. When the signal strength of a
call declines to a predetermined level, the switching office may "hand-off" the
call to another cell site where the signal strength is stronger. Cells are
typically designed on a grid, although terrain factors, including natural and
man-made obstructions, signal coverage patterns and capacity constraints may
result in irregularly shaped cells and overlaps or gaps in coverage.

Wireless system operators normally agree to provide service to subscribers
from other compatible wireless systems who are temporarily located in or
traveling through their service areas in a practice called "roaming." Agreements
among system operators provide that the carrier that normally provides services
to the roaming subscriber pays the serving carrier at rates prescribed by the
serving carrier. Analog cellular handsets are functionally compatible with
cellular systems in all markets within the United States. As a result, analog
cellular handsets may be used wherever a subscriber is located, as long as a
cellular system is operational in the area and necessary roaming arrangements
exist. Although cellular, personal communications service and enhanced
specialized mobile radio systems utilize similar technologies and hardware, they
operate on different frequencies and use different technical and network
standards. Multi-mode phones, however, make it possible in many instances for
users of one type of system to roam on a different type of system outside of
their service area.

Wireless digital signal transmission is accomplished through the use of
various forms of "air interface protocols." The FCC has not mandated a single
national digital standard (as it did with the analog Advanced Mobile Phone
System historically used in cellular systems) and, as a result, the following
three distinct technologies have evolved as standards and have been deployed
nationally in digital cellular and personal communications service systems:

- TDMA--Time Divisional Multiple Access is the standard adopted and
certified by the Cellular Telecommunications Industry Association. It is
the digital standard being deployed nationally by AT&T Wireless and
Southwestern Bell Mobile Systems.

- GSM--Global System for Mobile Communications is the digital standard that
originated in Europe and has been widely deployed by 1.9 GHz license
holders such as VoiceStream Communications, Omnipoint Corporation,
Powertel, Inc. and Aerial Communications, Inc.

- CDMA--Code Divisional Multiple Access is a spread-spectrum technology that
is predominantly being used by Sprint Corporation, Vodafone AirTouch Plc.,
U S WEST, Bell Atlantic Corporation, and GTE.

Each standard of digital technology provides substantially the same level
and quality of service to the end user. However, each technological standard is
currently incompatible with each other technological standard. As a result,
wireless subscribers may only utilize digital wireless service in the areas
where the technological standard that is utilized by their handset has been
deployed. Time divisional multiple access and code divisional multiple access
digital systems have been deployed over a wider area of the nation than the
global system for mobile communications standard has been; however, the global
system for mobile communications standard has also been deployed in Europe.

A subscriber using a multi-mode phone may, however obtain service from both
digital and analog systems and may also utilize both cellular services and
personal communications services. Until digital networks become fully built-out,
these multi-mode handsets are necessary for the portion of the digital
subscriber base who wish to utilize wireless service in areas currently without
digital coverage that utilizes their applicable digital standard.

63
<PAGE>
BUSINESS

OVERVIEW

We are a leading provider of rural and suburban cellular telephone services.
As of September 30, 1999, our systems covered a total population of
approximately 5.9 million and we had approximately 424,000 subscribers. For the
nine months ended September 30, 1999, we had total revenues of $235.1 million,
EBITDA of $105.1 million and a net loss from continuing operations of
$47.1 million. On a proportionate basis, after giving effect to our expected 50%
interest in American Cellular, our systems would have covered a net population
of approximately 8.1 million and we would have had approximately 623,000
subscribers as of September 30, 1999. On the same proportionate basis, we would
have had total revenues of $329.0 million, EBITDA of $163.8 million and a net
loss from continuing operations of $75.2 million for the nine months ended
September 30, 1999. We expect to incur significant net losses from continuing
operations in the future.

We began providing cellular telephone service in 1990 in Oklahoma and the
Texas Panhandle. We have expanded our cellular operations rapidly since then,
primarily through the acquisition of rural and suburban cellular systems. Since
1996, we have completed 13 acquisitions of cellular licenses and systems,
increasing the total population served by our systems by approximately
5.6 million and significantly expanding the geographic scope of our operations.
At September 30, 1999, we had approximately $1.1 billion of consolidated
indebtedness and a consolidated stockholders' deficit of approximately
$296.2 million. We expect to incur significant additional indebtedness and
require substantial capital in the future while we continue to acquire, develop
and construct our cellular systems and grow our subscriber base.

The FCC has designated 428 rural markets across the United States as rural
service areas, or RSAs, and has licensed two cellular licenses in each RSA. The
FCC has also designated 305 geographic areas of the United States that contain
cities with a population of 50,000 or more as metropolitan statistical areas, or
MSAs, and has allocated two cellular licenses to each MSA.

We believe that owning and operating a mix of rural and suburban cellular
systems provides strong growth opportunities because we believe these systems
currently have lower penetration rates, higher subscriber growth rates, a higher
proportion of roaming revenues and less competition for subscribers than
cellular systems located in larger metropolitan areas. We focus on acquiring
underdeveloped cellular systems that are adjacent to major metropolitan areas,
which include a high concentration of expressway corridors and roaming activity.

We have a strategic relationship with AT&T Wireless, which recently became
one of our stockholders. Through this relationship, we have a coast-to-coast
roaming agreement that allows our customers to utilize wireless systems owned by
AT&T Wireless, and customers of AT&T Wireless to utilize our cellular systems,
each at favorable prices. AT&T Wireless customers accounted for approximately
37% of our roaming revenues, or approximately 17% of our total revenues, in the
nine months ended September 30, 1999. We also have roaming agreements with
AirTouch, Southwestern Bell Mobile Systems and other leading wireless providers.

We have entered into an equally-owned joint venture with AT&T Wireless to
acquire American Cellular for approximately $2.4 billion, including fees and
expenses. American Cellular is one of the largest independent rural cellular
telephone operators in the United States. As of September 30, 1999, American
Cellular's systems covered a total population of approximately 4.9 million, and
it had approximately 398,000 subscribers, primarily in rural areas of the
midwestern and eastern United States. Following completion of this acquisition,
we will operate American Cellular's systems. American Cellular's management
organization, billing system, network infrastructure and marketing programs are
substantially similar to ours. The closing of this offering is not contingent on
the completion of the American Cellular acquisition, which we expect to occur in
the first quarter of 2000.

OTHER PENDING ACQUISITIONS

In addition to the American Cellular acquisition, we recently entered into
definitive agreements to acquire the FCC licenses for, and certain assets
related to, Alaska 1 RSA, Alaska 3 RSA, Michigan 3

64
<PAGE>

and Michigan 10 RSA that, if completed, would have increased the total
population served by our cellular systems by approximately 0.5 million as of
September 30, 1999. Each acquisition is subject to FCC approval, compliance with
requirements of the Hart-Scott-Rodino Act and customary closing conditions. The
following is a summary of each acquisition:

ALASKA 3 RSA. On September 30, 1999, we entered into an agreement to
purchase Alaska 3 RSA for $12.0 million, subject to adjustment. Alaska 3 RSA is
located in the southeastern corner of the state. The Alaska 3 market area, which
includes Juneau and Ketchikan, had a total population of approximately 74,000 as
of September 30, 1999. Our acquisition of Alaska 3 is expected to close in the
first quarter of 2000. We are managing this system pending its closing under the
supervision and control of the seller.

ALASKA 1 RSA. On October 6, 1999, we entered into an agreement to purchase
Alaska 1 RSA for $16.0 million, subject to adjustment. Alaska 1 RSA is located
in central Alaska from the western coastline to the eastern border with Canada.
The Alaska 1 market area, which includes Fairbanks, had a total population of
approximately 113,000 as of September 30, 1999. Our acquisition of Alaska 1 is
expected to close in the first quarter of 2000. We are managing this system
pending its closing under the supervision and control of the seller.

MICHIGAN 3 RSA. On October 25, 1999, we entered into an agreement to
purchase Michigan 3 RSA for $97.0 million, subject to adjustment. Michigan 3 RSA
is located in northwestern Michigan. The Michigan 3 RSA market area, which
includes Traverse City and Petoskey, had a total population of approximately
166,000 as of September 30, 1999. Our acquisition of Michigan 3 is expected to
close in the first quarter of 2000.

MICHIGAN 10 RSA. On December 17, 1999 we entered into an agreement to
purchase Michigan 10 RSA for $34.0 million, subject to adjustment. Michigan 10
RSA is located in the eastern "thumb" of Michigan. The Michigan 10 market area,
which is mostly surrounded by Saginaw Bay and Lake Huron, had a population of
approximately 138,000 as of September 30, 1999. Our acquisition of Michigan 10
is expected to close in the first quarter of 2000.

PENNSYLVANIA 2 RSA. We are also a party to agreements to purchase the
FCC license for, and certain assets related to, Pennsylvania 2 RSA for
$6.0 million. Pending the closing, we are managing and control the operation of
this market under the supervision and control of the seller. As a result, we
include the population and subscriber data related to this market in our
population and subscriber data in our eastern region. As of September 30, 1999,
the Pennsylvania 2 RSA had a total population of approximately 88,000. Our
acquisition of Pennsylvania 2 RSA is expected to close in the fourth quarter of
1999.

STRATEGY

We have developed organizational, marketing and operational programs
designed to increase the number and retention of our subscribers, promote
superior customer service, control subscriber acquisition costs and enhance
operating cash flow in our markets. We intend to apply these programs to the
properties we acquire, including American Cellular.

Our strategy is to capitalize on our competitive strengths and acquire,
develop and operate rural and suburban cellular systems. The principal elements
of our strategy include:

- CONTINUE TO GROW THROUGH DISCIPLINED ACQUISITIONS. We intend to acquire
additional cellular operations in RSAs and smaller MSAs that:

- have attractive demographics and growth trends;

- have a favorable competitive environment;

- are located adjacent to major metropolitan areas;

- include a high concentration of expressway corridors that have a
significant amount of roaming activity; and

65
<PAGE>
- have the potential to further develop strategic relationships with
operators of neighboring wireless systems and the ability to offer
service under a leading brand name.

- INTEGRATE ACQUIRED OPERATIONS. We intend to integrate the operations of
cellular systems we acquire, including American Cellular, with our
existing operations to achieve economies of scale. We believe that these
increased efficiencies will come from the consolidation and centralized
control of pricing, customer service and marketing, system design,
engineering, purchasing, financial and administrative functions and
billing functions. We expect to consolidate American Cellular's call
service centers and one or more of our call centers. We intend to use our
increased leverage in negotiating prices and services from third party
service providers and equipment vendors.

- CONTINUE TO INCREASE SYSTEM CAPACITY AND COVERAGE AND FURTHER UPGRADE OUR
SYSTEMS THROUGH THE IMPLEMENTATION OF ADVANCED TECHNOLOGY. We believe that
increasing capacity and upgrading our systems will attract additional
subscribers, increase the use of our systems by existing subscribers,
increase roaming activity and further enhance the overall efficiency of
our network. Approximately 93% of our systems utilize digital technology
and we intend to upgrade our remaining cellular systems with digital
technology to enable us to increase roaming, serve the increasing number
of digital cellular subscribers and personal communications service
subscribers with multimode phones, and provide value-added, high margin,
enhanced capabilities, including caller ID, longer battery life and zone
billing.

- EXPAND STRATEGIC RELATIONSHIPS. We intend to maintain and expand strategic
relationships with operators of wireless systems in major MSAs near our
cellular systems. These relationships include roaming agreements that
allow our subscribers to use the wireless systems of operators in
neighboring MSAs and RSAs at favorable rates. Under these agreements,
similar benefits are available to the MSA operators' subscribers roaming
in our areas. In addition, we deploy digital technology in our system area
that is the same as that selected by our roaming partners in the
neighboring MSA. We also market our cellular products and services under
the predominant brand name used in neighboring MSAs. These brand names
include CELLULAR ONE-Registered Trademark- and AIRTOUCH-TM-
CELLULAR-Registered Trademark-. We believe these strategic relationships
and agreements enable us to increase our roaming revenues, offer our
subscribers larger "home rate" areas and leverage the recognized brand
names of our roaming partners and their extensive marketing efforts.

- AGGRESSIVELY MARKET AND PROMOTE OUR CELLULAR SERVICES IN OUR LOCAL
MARKETS. Our marketing objective is to continue to distinguish ourself in
our markets as the leading cellular services provider by stressing our
service quality, local sales presence and commitment to the community. Our
sales efforts are conducted primarily through our retail outlets and our
direct sales force and, to a lesser extent, through independent agents.
Our local management teams have day-to-day operating authority with the
flexibility to respond to individual market requirements. Their presence
fosters a strong sense of customer service and community spirit. In
addition, we believe that our marketing and customer service functions are
more effective when tailored to the local market population.

- USE HIGHLY TARGETED SALES EFFORTS. We seek to attract subscribers who we
believe are likely to generate high monthly revenues and low churn rates.
Local management conducts market research to identify and design marketing
programs to attract these subscribers and tailor distinctive rate plans
and roaming rates to emphasize the quality, value and advantage of our
cellular services.

- PROVIDE SUPERIOR CUSTOMER SERVICE. We intend to maintain a high level of
customer satisfaction through a variety of techniques, including the
maintenance of 24-hour customer service. We support local customer service
through our direct sales force, our retail stores and regional customer
service centers. The regional presence of our call centers enhances our
knowledge of local markets, which improves our ability to provide customer
service, credit and collection and order activation.

66
<PAGE>

CELLULAR OPERATIONS--DOBSON COMMUNICATIONS

MARKETS AND SYSTEMS

The following table sets forth information with respect to our existing
cellular markets as of September 30, 1999. Information with respect to
populations in our licensed areas are our management's estimates based upon
Kagan's Cellular Telephone Atlas 1999, Paul Kagan Associates, Inc., Carmel,
California, adjusted to exclude those portions of our RSAs and MSAs not covered
by our licenses. Net population represents total population less minority
ownership interests in our licenses. We determine market penetration by dividing
total subscribers in each of our FCC cellular licensed areas at the end of the
period by the estimated total population covered by the applicable cellular
license or authorization.

<TABLE>
<CAPTION>
TOTAL NET TOTAL MARKET DATE
POPULATION POPULATION SUBSCRIBERS PENETRATION ACQUIRED
---------- ---------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
MARKETS:
NORTHERN REGION
Youngstown (Youngstown, OH MSA, Sharon, PA MSA,
PA 1 RSA and OH 11 RSA)........................... 911,000 911,000 1998
OH 2 RSA............................................ 262,000 262,000 1999
Erie (Erie, PA MSA)................................. 280,000 280,000 1998
PA (PA 2, 6 and 7 RSAs )............................ 690,000 690,000 1998
NY 3 RSA............................................ 481,000 481,000 1998
---------- ----------
Total............................................. 2,624,000 2,624,000 224,700 8.6%
---------- ---------- -------
CENTRAL REGION
Northwest OK (Enid, OK MSA and OK
2 RSA)............................................ 106,000 106,000 1991
OK 5 and 7 RSAs..................................... 157,000 101,000 1989
TX 2 RSA............................................ 89,000 55,000 1989
KS/MO (KS 5 RSA, MO 1, 4 and 5 RSAs)................ 246,000 246,000 1996
TX 16 RSA........................................... 336,000 336,000 1998
TX 10 RSA........................................... 320,000 320,000 1998
---------- ----------
Total............................................. 1,254,000 1,164,000 65,800 5.2%
---------- ---------- -------
WESTERN REGION
AZ 5 RSA............................................ 183,000 137,000 1997
AZ 1 RSA............................................ 135,000 135,000 1999
CA 7 RSA............................................ 144,000 144,000 1998
CA 4 RSA............................................ 368,000 368,000 1998
Santa Cruz, CA MSA.................................. 251,000 219,000 1998
---------- ----------
Total............................................. 1,081,000 1,003,000 61,100 5.7%
---------- ---------- -------
EASTERN REGION
West MD (Cumberland, MD MSA, Hagerstown, MD MSA,
MD 1 and 3 RSAs, and PA 10 West RSA).............. 494,000 494,000 1997
East MD (MD 2 RSA).................................. 455,000 455,000 1997
---------- ----------
Total............................................. 949,000 949,000 72,400 7.6%
---------- ---------- -------
Total--Dobson regions combined................ 5,908,000 5,740,000 424,000 7.2%
========== ========== =======
</TABLE>

We have the contractual right to acquire the license for, and certain assets
related to, Pennsylvania 2 RSA and we currently control and are managing the
operation of this market for the seller pending the closing of the acquisition.
As a result, we include the population and subscriber data related to this
market in our population and subscriber data in our eastern region. As of
September 30, 1999, the Pennsylvania 2 RSA had a total population of
approximately 88,000. In addition to our pending acquisition of Pennsylvania 2
RSA and American Cellular, we have pending acquisitions that, if completed,
would have increased the total population served by our cellular systems by
approximately 0.5 million as of September 30, 1999.

PRODUCTS AND SERVICES

We provide a variety of cellular services and products designed to address a
range of business and personal needs. In addition to mobile voice and data
transmission, we offer ancillary services such as

67
<PAGE>
call forwarding, call waiting, three-party conference calling, voice message
storage and retrieval and no-answer transfer. The nature of the services we
offer varies depending upon market area. We also sell cellular equipment at
discount prices and use free phone promotions as a way to encourage use of our
mobile services. We offer cellular service for a fixed monthly access fee
accompanied by varying allotments of unbilled or "free" minutes, plus additional
variable charges per minute of use and for custom calling features. We offer
longer-term pricing programs under single year and, to a lesser extent,
multi-year service contracts. Unlike some of our competitors, we design rate
plans on a market-by-market basis. Our local general managers generally have the
authority to initiate and modify rate plans, depending upon the market and
competitive conditions. Generally, these rate plans include a high-volume user
plan, a medium-volume user plan, a basic plan and an economy plan.

CUSTOMER SERVICE

Customer service is an essential element of our marketing and operating
philosophies. We are committed to attracting new subscribers and retaining
existing subscribers by providing consistently high-quality customer service. In
each of our cellular service areas, we maintain installation and repair
facilities and a local staff, including a market manager and customer service,
technical and sales representatives. In each of our cellular service areas, we
handle our own customer-related functions, such as customer activations, account
adjustments and rate plan changes. We believe our local offices and installation
and repair facilities enhance our knowledge of local markets and enable us to
better serve customers, schedule installations and make repairs. Through the use
of centralized monitoring equipment, we are able to centrally monitor the
technical performance of our cellular service areas.

In addition, our customers generally are able to report cellular telephone
service or account problems 24 hours a day to our regional customer service
centers located in Oklahoma City, Oklahoma and Frederick, Maryland on a
toll-free access number with no airtime charge. We believe that our emphasis on
customer service affords us a competitive advantage over our larger competitors.
We contact our subscribers frequently in order to evaluate and measure, on an
ongoing basis, the quality and competitiveness of our services.

SALES, MARKETING AND DISTRIBUTION

We focus our marketing program on attracting subscribers who we believe are
likely to generate high monthly revenues and low churn rates. We undertake
extensive market research to identify and design marketing programs to attract
these subscribers and tailor distinctive rate plans and roaming rates to
emphasize the quality, value and advantage of our cellular service. We have
established marketing alliances with neighboring cellular systems to create
larger home rate areas in order to increase our roaming revenues and to attract
new subscribers. We market our service offerings primarily through our direct
sales force and company-owned retail stores. We also use a network of dealers
and other agents, such as electronics stores, car dealerships and department
stores. In addition to these traditional channels, our marketing team
continuously evaluates other, less traditional, methods of distributing our
services and products, such as targeted telemarketing and direct mail programs.

We market our cellular products and services under national brand names and,
in selected markets, our own brand name. The service mark we select for use in
each of our markets depends, to a large extent, upon the service mark used by
the principal cellular operator in the neighboring metropolitan areas.

We train and compensate our sales force in a manner designed to stress the
importance of customer service, high penetration levels and minimum acquisition
costs per subscriber. We believe that our direct sales force is better able to
select and screen new subscribers and select pricing plans that realistically
match subscriber means and needs than are independent agents. In addition, we
motivate our direct sales force to sell appropriate rate plans to subscribers,
thereby reducing churn, by linking payment of commissions to subscriber
retention. As a result, we believe that our use of a direct sales force keeps
marketing costs low both directly, because commissions are lower, and
indirectly, because subscriber retention is higher than when we use independent
agents. We had approximately 88 direct sales representatives as of
September 30, 1999.

68
<PAGE>

We believe that our after-sale telemarketing program, which includes
courtesy calls to our new customers and is conducted by our sales force and
customer service personnel, helps to reduce our churn rates. This program
enhances customer loyalty and allows our sales staff to check customer
satisfaction as well as to offer additional calling features, such as voicemail,
call waiting and call forwarding.

We operated 115 retail outlets as of September 30, 1999. Our retail stores
range in size from 420 square feet to 6,400 square feet. Each of our retail
stores is fully equipped to handle customer service and telephone maintenance
and installation. Some of these stores are also authorized warranty repair
centers. Our stores provide subscriber-friendly retail environments, including
extended hours, a large selection of products and services, an expert sales
staff and convenient locations, which are designed to make the sales process
quick and easy for the subscriber.

ROAMING

We believe that regional roaming is an important service component for many
subscribers. Accordingly, where possible, we attempt to arrange roaming
agreements that allow customers to roam at competitive prices. We believe this
increases usage on all cellular systems, including our own. We focus on systems
that are adjacent to major metropolitan areas and include a high concentration
of expressway corridors, which tend to have a significant amount of roaming
activity. The following table lists our principal roaming partners in each of
our cellular markets:

<TABLE>
<CAPTION>
CELLULAR MARKETS PRINCIPAL CELLULAR ROAMING PARTNERS
- ---------------- -------------------------------------
<S> <C>

Northern Region...................... AirTouch
AT&T Wireless
Southwestern Bell Mobile
Central Region....................... AirTouch
AT&T Wireless
Houston Cellular
Southwestern Bell Mobile
U.S. Cellular

Western Region....................... AirTouch
AT&T Wireless
Bay Area Cellular

Eastern Region....................... AT&T Wireless
Southwestern Bell Mobile
</TABLE>

Our largest roaming partner is AT&T Wireless. For the nine months ended
September 30, 1999, AT&T Wireless' customers accounted for approximately 37% of
our roaming revenues, or approximately 17% of our total operating revenues.
Under our roaming agreement with AT&T Wireless, we and AT&T Wireless charge each
other favorable roaming rates for each of our respective markets. This rate will
decrease over time. The agreement provides for the maintenance by us of certain
call features and related services to roaming customers, such as call waiting,
call forwarding, three-way calling, caller ID and voice mail. The roaming
agreement may be terminated or suspended by either party if the FCC revokes a
license covering a material portion of our or AT&T Wireless's markets, either
party fails to control subscriber fraud, either party fails to adhere to system
technical requirements and upgrades or either party breaches any of the material
terms of the roaming agreement. The agreement expires in January 2003.

We also have agreements with the North American Cellular Network, which is
the largest wireless telephone network system in the world linking cellular
operators throughout the United States and Canada and enabling customers to use
their cellular phones to place and receive calls in these areas as easily as
they do in their home areas. Through this network, customers are able to receive
calls

69
<PAGE>

automatically without the use of complicated roaming codes as they roam in more
than 5,000 cities and towns in the United States and Canada. In addition, the
North American Cellular Network enables special services such as call forwarding
and call waiting to automatically follow subscribers as they travel.

SYSTEM DEVELOPMENT AND TECHNOLOGY

SYSTEM DEVELOPMENT. We develop or build out our cellular service areas in
response to projected subscriber demand and competitive factors by adding
channels to existing cell sites and by building new cell sites to increase
capacity with an emphasis on improving coverage for hand-held phones in heavily-
trafficked areas. We develop projected subscriber demand for each cellular
service area on a cell-by-cell basis. In January 1998, we entered into an
agreement with Lucent Technologies Inc. to purchase 300 cell sites, two switches
and related hardware and software for approximately $81.0 million over a four
year period. We estimate our aggregate remaining commitment under this agreement
as of September 30, 1999 was approximately $33.2 million. We are also a party to
another equipment supply agreement with Nortel to purchase approximately
$65.0 million of cell site and switching equipment through the period ending in
November 2001. We estimate our aggregate remaining commitment under this
agreement as of September 30, 1999 was approximately $27.8 million.

We expect our cell site expansion to enable us to continue to add and retain
subscribers, enhance subscriber use of our systems, increase roaming traffic due
to the larger geographic area covered by our cellular network and further
enhance the overall efficiency of our cellular network. We believe that the
increased cellular coverage will have a positive impact on market penetration
and subscriber usage.

DIGITAL TECHNOLOGY. We use two basic protocols in our digital networks. Our
primary digital technology or protocol is Time Divisional Multiple Access, or
TDMA, which divides each channel into three subchannels providing service to
three users instead of one. Our other digital technology or protocol is Code
Divisional Multiple Access, or CDMA, which converts analog signals into digital
for transmission over our cellular network. Our digital services include digital
voice channels, short messaging services, message writing indication and caller
ID services.

70
<PAGE>

Approximately 93% of our systems currently utilize digital technology. We
match the digital protocols of our markets to those used by our roaming partners
in adjoining markets. The following table reflects the digital technology
currently used by us in each of our cellular markets.

<TABLE>
<CAPTION>
STATUS/EXPECTED
CELLULAR MARKET DIGITAL TECHNOLOGY COMPLETION DATE
- --------------- -------------------------- -------------------
<S> <C> <C>
NORTHERN REGION:
Youngstown............................... analog/TDMA IS-136 Completed
Erie..................................... analog/TDMA IS-136 Completed
New York................................. analog/TDMA IS-136 Completed
Pennsylvania............................. analog/TDMA IS-136 Completed
Ohio 2................................... analog/TDMA IS-136 Completed
and analog/CDMA First quarter 2000
CENTRAL REGION:
Oklahoma 5 and 7......................... analog/TDMA IS-136 Completed
Texas Panhandle.......................... analog/TDMA IS-136 Completed
Northwest Oklahoma....................... analog/TDMA IS-136 Completed
Texas 10................................. analog/TDMA IS-136 Completed
Texas 16................................. analog/TDMA IS-136 Completed
Kansas/Missouri.......................... analog/TDMA IS-136 First quarter 2000

WESTERN REGION:
Arizona 5................................ analog/CDMA Completed
Arizona 1................................ analog/TDMA IS-136 Completed
California 7............................. analog/CDMA Second quarter 2000
California 4............................. analog/TDMA IS-136 Completed
Santa Cruz............................... analog/TDMA IS-136 Completed

EASTERN REGION:
East Maryland............................ analog/TDMA IS-136 Completed
West Maryland............................ analog/TDMA IS-136 Completed
</TABLE>

INFORMATION SYSTEMS. H.O. Systems, Inc. recently began providing the
billing function for most of our cellular operations. Proprietary software
furnished by H.O. Systems serves all functions of billing for corporate and
retail locations. All administrative and customer maintenance functions are
handled in-house. H.O. Systems prints and processes all of our customer
invoices. H.O. Systems' software is in place and functioning in our western
region markets and we expect to have fully implemented the H.O. Systems'
software throughout our remaining regions by the end of the fourth quarter of
1999. We use software that compliments this billing system, allowing the use of
credit, collection and switch interfaces.

SERVICE MARKS

We own the service mark Dobson Cellular-TM-, which we use in our cellular
telephone systems in western Oklahoma and the Texas Panhandle. While we have not
attempted to federally register the brand name "Dobson Cellular," we believe
that our prior use of this brand name in the limited areas where it is used will
enable us to effectively police against any infringing uses of our brand name.

71
<PAGE>
The following table sets forth the brand names used by us for products and
services in each of our cellular markets:

<TABLE>
<CAPTION>
CELLULAR MARKET SERVICE MARK
- --------------- -----------------------------------
<S> <C>
Northern Region................................ CELLULAR ONE-Registered Trademark-
AIRTOUCH-TM-
CELLULAR-Registered Trademark-
Central Region................................. Dobson Cellular-TM-
CELLULAR ONE-Registered Trademark-

Western Region................................. CELLULAR ONE-Registered Trademark-
AIRTOUCH-TM-
CELLULAR-Registered Trademark-

Eastern Region................................. CELLULAR ONE-Registered Trademark-
</TABLE>

CELLULAR ONE-Registered Trademark- is a registered service mark with the
U.S. Patent and Trademark Office. The service mark is owned by Cellular One
Group, a Delaware general partnership of Cellular One Marketing, Inc., a
subsidiary of Southwestern Bell Mobile Systems and Cellular One
Development, Inc., a subsidiary of AT&T Wireless. We use the CELLULAR
ONE-Registered Trademark- service mark to identify and promote our cellular
telephone service pursuant to licensing agreements with Cellular One Group. We
believe we obtain substantial marketing benefits from the name recognition
associated with this widely used service mark, both with existing subscribers
traveling outside of our service areas and with potential new subscribers moving
into our service areas. Licensing and advertising fees are determined based upon
the population of the licensed areas. The licensing agreements require us to
provide high-quality cellular telephone service to our customers and to maintain
a certain minimum overall customer satisfaction rating in surveys commissioned
by the licensor. The licensing agreements have original five-year terms that
begin expiring in 2000 and may be renewed at our option, subject to the
satisfaction of certain operating standards, for two additional five-year terms.

AIRTOUCH-TM- CELLULAR-Registered Trademark- is a registered service mark
licensed by Vodafone AirTouch. Our right to use the service mark is
non-exclusive and non-transferrable. The licensing agreement for the
AIRTOUCH-TM- CELLULAR-Registered Trademark- service mark requires us to provide
high-quality cellular telephone service to our customers and to otherwise
maintain reasonable standards set by Vodafone AirTouch. The licensing agreement
is for an initial term of 20 years with automatic extensions for additional
five-year periods.

EMPLOYEES AND AGENTS

As of September 30, 1999, we had approximately 1,020 employees. In addition,
as of that date, we had agreements with approximately 365 independent sales
agents, including car dealerships, electronics stores, paging service companies
and independent contractors. None of our employees is represented by a labor
organization, and we consider our employee relations to be good.

PROPERTIES

We maintain our corporate headquarters in Oklahoma City, Oklahoma where we
lease approximately 24,600 square feet at a monthly rental of approximately
$19,000. As of September 30, 1999, our cellular operations leased 115 retail
offices and 11 administrative offices at aggregate annual rentals of
approximately $3.7 million. We review these leases from time to time and may, in
the future, lease or acquire new facilities as needed. We expect to lease or
purchase additional sales and administrative office spaces in connection with
our pending acquisitions. We do not anticipate encountering any material
difficulties in meeting our future needs for leased space. We also owned and
leased approximately 459 cell sites as of September 30, 1999.

72
<PAGE>

DISCONTINUED OPERATIONS

Through our wholly owned subsidiary, Logix, we provide integrated local,
long distance, data and other telecommunications services to small and
medium-sized business customers throughout the Southwestern United States. Logix
operates long-haul fiber optic facilities in Oklahoma, Texas and Colorado and
incumbent local exchange services in Oklahoma. Logix also offers switch-based
integrated carrier provider services in Oklahoma City, Tulsa, Amarillo, Houston,
Austin, Dallas, Forth Worth and San Antonio.

We have designated Logix as an unrestricted subsidiary with the result that
Logix is not subject to certain covenant restrictions which apply to the rest of
our operations. We will distribute the stock of Logix to the current holders of
our common stock and Class D preferred stock in January 2000, after we complete
either the tender offer for our 11 3/4% senior notes due 2007 or the defeasance
of that debt. We believe the distributees of the Logix stock may sell Logix
following the distribution. Purchasers of Class A common stock in this offering
will not participate in the distribution of Logix. Logix is accounted for as a
discontinued operation in our consolidated financial statements.

COMPETITIVE STRENGTHS/COMPETITION

We believe that our competitive strengths are:

- ESTABLISHED OPERATING HISTORY IN RURAL AND SUBURBAN MARKETS. We began
providing cellular telephone service in 1990 in Oklahoma and the Texas
Panhandle and since then have rapidly expanded our cellular operations to
include systems in rural and suburban markets covering a total population
of approximately 5.9 million as of September 30, 1999. We believe that
during this time we have gained substantial experience as an operator of
cellular systems in rural and suburban markets.

- PROVEN ACQUISITION AND INTEGRATION CAPABILITIES. Since 1996 we have
successfully completed 13 acquisitions of cellular licenses and systems,
significantly expanding the geographic scope of our operations and
increasing our total subscribers from approximately 26,600 as of
December 31, 1995 to approximately 424,000 as of September 30, 1999. We
have grown our revenues from $26.9 million for the year ended
December 31, 1996 to $140.0 million for the year ended December 31, 1998
and during the same period our EBITDA increased from $9.9 million to
$50.0 million. On December 23, 1998 we acquired Sygnet, which increased
the total population covered by our cellular systems by approximately
2.4 million. We substantially completed the integration of Sygnet's
systems and operations by the end of June 1999, and since closing the
Sygnet acquisition have increased the number of our subscribers in the
Sygnet markets from approximately 178,800 to approximately 211,300 as of
September 30, 1999, an 18.2% increase.

- STRATEGIC RELATIONSHIP WITH AT&T WIRELESS. We have a strategic
relationship with AT&T Wireless, which recently became one of our
stockholders. Through this relationship, we have a coast-to-coast roaming
agreement that enables our customers to use AT&T Wireless's systems, and
AT&T Wireless's customers to use our systems, each at favorable rates.
AT&T Wireless customers accounted for approximately 37% of our roaming
revenues, or approximately 17% of our total revenues, in the nine months
ended September 30, 1999. In addition, we and AT&T have entered into an
equally-owned joint venture to acquire American Cellular for approximately
$2.4 billion, including fees and expenses, which has further expanded the
scope of our relationship with AT&T.

- EXPERIENCED MANAGEMENT TEAM. We have an experienced management team. Both
Everett R. Dobson, our Chairman of the Board, President and Chief
Executive Officer, and G. Edward Evans, our President of our cellular
subsidiaries, have substantial experience in the wireless

73
<PAGE>

communications industry and both are actively involved in the Cellular
Telecommunications Industry Association, the leading cellular industry
association.

- ABILITY TO OFFER A VARIETY OF DIGITAL SERVICES, INCLUDING DIGITAL VOICE
SERVICES, TO APPROXIMATELY 93% OF OUR COVERED POPULATION. We have upgraded
approximately 93% of our cellular network to digital technology, which
both enhances our attractiveness as a roaming partner to personal
communications service and other cellular providers and provides increased
services to our current subscribers, including digital voice services.

We compete with various companies in each of our markets. The following
table lists the principal competitors in each of our cellular markets:

<TABLE>
<CAPTION>
CELLULAR MARKET PRINCIPAL COMPETITORS
- --------------------------------------------------- ------------------------
<S> <C>
Northern Region.................................... ALLTEL
Bell Atlantic Mobile
Frontier Cellular
GTE Wireless
Central Region..................................... ALLTEL
AT&T Wireless
Chariton Cellular
GTE Wireless
Kansas Cellular
Pioneer Cellular
Southwestern Bell Mobile
Western Wireless

Western Region..................................... Bell Atlantic Mobile
Centennial Cellular
Citizens Mojave Cellular
GTE Wireless
Nextel
Sprint PCS

Eastern Region..................................... Bell Atlantic Mobile
Nextel
Sprint PCS
U.S. Cellular
</TABLE>

The telecommunications industry is experiencing significant technological
changes, as evidenced by the increasing pace of improvements in the capacity and
quality of digital technology, shorter cycles for new products and enhancements
and changes in consumer preferences and expectations. Accordingly, we expect
competition in the wireless telecommunications industry to be dynamic and
intense as a result of the entrance of new competitors and the development of
new technologies, products and services. Many of our competitors have been
operating for a number of years, operate nationwide systems, currently serve a
substantial subscriber base and have significantly greater financial, personnel,
technical, marketing, sales and distribution resources than we do. Some
competitors are expected to market other services, such as long distance,
landline local exchange and internet access service, with their cellular
telecommunication service offerings.

We compete primarily against one other facilities-based cellular carrier in
each of our cellular markets. We also compete with personal communications
service and enhanced specialized mobile radio providers. We compete for
customers based principally upon price, the services and enhancements offered,
the quality of our cellular system, customer service, system coverage and
capacity. This competition may increase to the extent that licenses are
transferred from smaller, stand-alone operators to larger, better capitalized
and more experienced cellular operators that may be able to offer consumers
certain network advantages.

74
<PAGE>

AT&T Wireless, Nextel Communications and Sprint PCS operate substantially
nationwide networks, and Bell Atlantic Mobile Systems, VoiceStream Wireless
Corporation and Vodafone AirTouch, among others, through joint ventures and
affiliation arrangements, could operate a substantially nationwide wireless
system. If any of our roaming partners, including AT&T Wireless, were to acquire
a personal communications service license for any of our markets, they could
build out personal communications service networks in our markets to provide
their customers with wireless service which would reduce our roaming revenues.
Any increased competition from personal communications service providers in
rural markets covered by our systems could also have the effect of further
reducing the roaming rates we could charge. Although AT&T Wireless has agreed
not to build out personal communications service networks in any of the markets
currently served by American Cellular for five years after the consummation of
the American Cellular acquisition, AT&T Wireless is not contractually restricted
from building out a competing personal communications service network in our
markets. See "The American Cellular Acquisition--Operating Arrangements."

We also face, to a lesser extent, competition from mobile satellite service
providers, as well as from resellers of these services and cellular service. In
the future, we may also compete more directly with traditional landline
telephone service providers. Recently, the FCC created potential sources of new
competition by auctioning additional personal communications service licenses,
as well as licenses for wireless communications services, local multipoint
distribution service and 220 to 222 MHz service. Further, the FCC has announced
plans to auction licenses in the general wireless communications services the 24
GHz and 39 GHz Services, and has allocated spectrum in the 700 MHz band that may
be licensed for mobile use. The FCC has also recently announced its intent to
allocate approximately 200 MHz of additional spectrum to wireless use, much of
which can be licensed for commercial wireless purposes. Continuing technological
advances in telecommunications make it impossible to predict the extent of
future competition. However, due to the depth and breadth of these competitive
services offered by operators using these other technologies, future competition
from these operators could be intense.

CELLULAR OPERATIONS--AMERICAN CELLULAR

American Cellular is one of the largest independent rural cellular telephone
operators in the United States. At September 30, 1999, American Cellular's
systems covered a total population of approximately 4.8 million and it had
approximately 398,000 subscribers, primarily in rural areas of the midwestern
and eastern United States. American Cellular has concentrated its recent efforts
on creating an integrated network of cellular systems in its operating regions.
American Cellular operates four regions of cellular systems in New York,
Kentucky and the Upper Midwest and Mid-Atlantic regions as well as certain other
markets and has a number of other minority interests. American Cellular markets
all of its cellular products and services under the CELLULAR
ONE-Registered Trademark- brand name for its cellular systems. American Cellular
offers digital voice services in approximately 50% of its cellular systems and
expects to convert the remainder of its systems by the second quarter of 2000.
American Cellular's management, organization, billing system, network
infrastructure and working programs are substantially similar to ours. For
additional information regarding the American Cellular acquisition, see "The
American Cellular Acquisition."

The majority of American Cellular's systems are in the early stages of their
growth cycle and, we believe, afford significant opportunities for improvements
in performance, particularly with respect to rates of penetration and churn.
There can be no assurances, however, that we, as the operator of these systems
under our joint venture with AT&T Wireless, will be able to achieve or maintain
such improvements.

75
<PAGE>

MARKETS AND SYSTEMS

The following table sets forth information as of September 30, 1999 with
respect to American Cellular's existing cellular markets.

<TABLE>
<CAPTION>
TOTAL NET TOTAL MARKET DATE
POPULATION POPULATION SUBSCRIBERS PENETRATION ACQUIRED
---------- ---------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
MARKETS:
UPPER MIDWEST REGION
Duluth MSA/MN 4 RSA/WI 2 RSA........................ 290,000 290,000 1994
Eau Claire MSA/WI 2 RSA............................. 174,000 168,000 1994
Wausau MSA/WI 6A RSA................................ 158,000 153,000 1995
MN 2A RSA........................................... 31,000 31,000 1995
MN 3 RSA............................................ 58,000 58,000 1994
MN 5 RSA............................................ 257,000 257,000 1995
MN 6 RSA............................................ 145,000 145,000 1994
WI 1 RSA............................................ 109,000 109,000 1994
WI 3 RSA/WI 2 RSA................................... 166,000 166,000 1994
WI 4 RSA............................................ 119,000 119,000 1997
WI 5 RSA............................................ 80,000 80,000 1997
MI 1 RSA............................................ 198,000 198,000 1995
Alton, IL RSA....................................... 23,000 20,000
---------- ----------
Total............................................. 1,808,000 1,794,000 162,900 8.5%
---------- ---------- -------
NY REGION
Orange County NY MSA................................ 330,000 330,000 1996
Poughkeepsie NY MSA................................. 264,000 253,000 1996
NY 5 RSA............................................ 378,000 378,000 1995
NY 6 RSA............................................ 112,000 112,000 1996
---------- ----------
Total............................................. 1,084,000 1,073,000 101,100 9.3%
---------- ---------- -------
KY REGION
KY 4 RSA............................................ 252,000 252,000 1997
KY 5 RSA............................................ 161,000 161,000 1997
KY 6 RSA............................................ 268,000 268,000 1997
KY 8 RSA............................................ 120,000 120,000 1997
TN 4 RSA............................................ 273,000 273,000 1998
---------- ----------
Total............................................. 1,074,000 1,074,000 73,400 6.8%
---------- ---------- -------
MID-ATLANTIC REGION
OH 7 RSA/OH 10A RSA................................. 323,000 323,000 1995
PA 9 RSA............................................ 187,000 187,000 1996
WV 2 RSA............................................ 78,000 78,000 1995
WV 3 RSA............................................ 266,000 266,000 1996
---------- ----------
Total............................................. 854,000 854,000 60,600 7.1%
---------- ---------- -------
Total--American Cellular regions combined....... 4,820,000 4,795,000 398,000 8.1%
========== ========== =======
</TABLE>

SUBSCRIBERS AND SYSTEM USAGE

American Cellular's cellular subscribers totaled approximately 398,000 as of
September 30, 1999. Its subscribers fall into 12 major categories: construction,
professional/management, medical, sales, real estate, agriculture, service
industry, transportation, financial, government, manufacturing and other, which
includes low-usage subscribers.

MARKETING

American Cellular markets all of its cellular products and services under
the CELLULAR ONE-Registered Trademark- brand names. The national advertising
campaign conducted by the Cellular One Group has enhanced

76
<PAGE>

American Cellular's advertising exposure at a lower cost than could be achieved
alone. American Cellular also has obtained substantial marketing benefits from
the name recognition associated with this widely used service mark, both with
existing subscribers traveling outside of American Cellular's service areas and
with potential new subscribers moving into American Cellular's service areas.

Through its membership in North American Cellular Network and other special
networking arrangements, American Cellular has provided extended regional and
national service to its subscribers in other markets, thereby allowing them to
make and receive calls while in other cellular service areas without dialing
special access codes.

American Cellular's sales force works principally out of its retail stores
in which American Cellular offers a full line of cellular products and services.
As of September 30, 1999, American Cellular maintained approximately 90 retail
locations. Ranging from 250 square feet to 4,000 square feet, each store is
fully equipped to handle customer service and telephone maintenance and
installation. Some of these stores are also authorized warranty repair centers.

PRODUCTS AND SERVICES

In addition to providing high-quality cellular telephone service in each of
its markets, American Cellular also offers various custom-calling features,
including voicemail, call forwarding, call waiting, three-way conference calling
and no answer transfer. In 1998, American Cellular upgraded its systems to
provide digital services in some of its markets such as caller I.D., message
waiting indicator, short messaging services and sleep mode for longer battery
life.

American Cellular offers several rate plans so that customers may choose the
plan that best fits their expected calling needs. American Cellular has designed
rate plans on a market-by-market basis. These rate plans include a high-volume
user plan, a medium-volume user plan, a basic plan and an economy plan. Most
rate plans combine a fixed monthly access fee, a designated amount of free
minutes, per-minute usage charges and additional charges for custom-calling
features in a package which offers value to the customer while enhancing airtime
use and revenues. In general, rate plans which include a higher monthly access
fee typically include a lower usage rate per minute. An ongoing review of
equipment and service pricing is maintained to ensure American Cellular's
competitiveness.

Agreements between American Cellular and other cellular operators allow
their respective subscribers to place calls, or roam, in most cellular service
areas throughout the country. American Cellular's markets, strategically
surrounding or between major metropolitan areas, encompass significant portions
of heavily traveled corridors which results in significant roaming revenues.

CUSTOMER SERVICE

Customer service is an essential element of American Cellular's marketing
and operating philosophy. American Cellular has endeavored to attract new
subscribers and retain existing subscribers by providing consistently
high-quality customer service. In each of its cellular service regions, American
Cellular has maintained a local staff, including a market manager, customer
service representatives, technical and engineering staff, sales representatives
and installation and repair facilities. Each cellular service region handles its
own customer-related functions such as credit evaluation, customer activations,
account adjustments and rate plan changes. Local offices and installation and
repair facilities have enabled American Cellular to better service customers,
schedule installations and make repairs.

SYSTEM DEVELOPMENT AND EXPANSION

American Cellular has developed its cellular service areas by adding
channels to existing cell sites and by building new cell sites with an emphasis
on improving coverage for hand-held phones in high

77
<PAGE>

traffic areas. This development is done for the purpose of increasing capacity
and improving coverage in response to projected subscriber demand and
competitive factors. We believe cell site expansion will enable American
Cellular to continue to add subscribers, enhance use of the systems by existing
subscribers, increase roamer traffic due to the larger geographic areas covered
by the cellular network and further enhance the overall quality of its network.

COMPETITORS AND ADJOINING SYSTEMS

The following chart lists American Cellular's cellular competitors in each
of its clusters and the major adjoining operators.

<TABLE>
<CAPTION>
COMPANY CLUSTER COMPETITORS ADJOINING SYTEMS
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Air Touch Communications,
Upper Midwest Cluster Inc. AT&T
United States Cellular Corp. Western Wireless
CelluLink United States Cellular Corp.
Cellular 2000
CellCom
Century Telephone Enterprises
Rural Cellular Corp.

Mid-Atlantic Cluster United States Cellular Corp. AT&T
Alltel Airtouch Communications Inc.
Ameritech
Bell Atlantic Mobile

New York Cluster Bell Atlantic Mobile Bell Atlantic Mobile
AT&T
Southwestern Bell

Kentucky Cluster BellSouth Mobility GTE
Ramcell, Inc. United States Cellular Corp.
Bluegrass Cellular
United States Cellular Corp.
Alltel
</TABLE>

SERVICE MARKS

American Cellular uses the CELLULAR ONE-Registered Trademark- service mark
to identify and promote its cellular telephone service pursuant to licensing
agreements with Cellular One Group. Licensing and advertising fees are
determined based upon the population of the licensed areas. The licensing
agreements require American Cellular to provide high-quality cellular telephone
service to its customers and to maintain a certain minimum overall customer
satisfaction rating in surveys commissioned by Cellular One Group. The licensing
agreements which American Cellular has entered into are for original five-year
terms expiring on various dates. These agreements may be renewed at American
Cellular's option for three additional five-year terms.

EMPLOYEES AND DEALERS

As of September 30, 1999, American Cellular had approximately 815 employees.
In addition, American Cellular has agreements with independent dealers,
including car dealerships, electronics stores, paging services companies and
independent contractors. None of American Cellular's employees are represented
by a labor organization, and American Cellular's managment considers its
employee relations to be good.

78
<PAGE>

REGULATION

OVERVIEW

The wireless telecommunications industry is subject to extensive
governmental regulation on the federal level and to varying degrees on the state
level. The enactment of the Telecommunications Act of 1996 has had an impact on
many aspects of this regulation. In addition, this regulation is currently the
subject of administrative rulemakings and judicial proceedings that are
significant to us. The following is a summary of the federal laws and
regulations that materially affect the wireless telecommunications industry, in
general, and us, in particular, and a description of applicable certain state
laws. This section does not purport to be a summary of all present and proposed
federal, state and local regulations and legislation relating to the wireless
telecommunications industry.

FEDERAL REGULATION

The licensing, construction, modification, operation, ownership and
acquisition of cellular telephone systems are subject to regulations and
policies of the FCC under the Communications Act of 1934, as amended. The FCC
has promulgated rules and regulations governing, among other things,
applications to construct and operate cellular communications systems,
applications to transfer control of or assign cellular licenses and technical
and operational standards for the operation of cellular systems (such as maximum
power and antenna height).

The FCC licenses cellular systems in accordance with 734 geographically
defined market areas comprised of 306 MSAs and 428 RSAs. In each market, the
frequencies allocated for cellular telephone use are divided into two equal 25
MHz blocks and designated as wireline and non-wireline. Apart from the different
frequency blocks, there is no technical difference between wireline and
non-wireline cellular systems and the operational requirements imposed on each
by the FCC are the same. Under FCC rules, the authorized service area of a
cellular provider in each of its markets is referred to as the cellular
geographic service area. The cellular geographic service area may conform
exactly with the boundaries of the FCC designated MSA or RSA, or it may be
smaller if a licensee has chosen not to provide services to certain areas. A
cellular licensee has the exclusive right to expand its cellular geographic
service area boundaries within the licensee's MSA or RSA for a period of five
years after grant of the licensee's initial construction permit. At the end of
this five-year build-out period, however, other entities may apply to serve
portions of the MSA or RSA, of at least 50 square miles, in areas outside the
licensee's then designated cellular geographic service area. The five year
build-out period has expired for most licensees and the FCC has granted several
"unserved area" applications filed by parties other than the original MSA or RSA
licensee. No entity may, directly or indirectly, own a controlling interest in,
or otherwise have the ability to control, both systems. The FCC may prohibit or
impose conditions on transfers of licenses. In addition, under FCC rules, no
person or entity may have an attributable interest, as defined in FCC rules, in
a total of more than 45 MHz of licensed broadband personal communications
service, cellular and enhanced specialized mobile radio spectrum, regulated as
commercial mobile radio services with significant overlap in any geographic area
except in RSAs, where a total of 55MHz is lawful. This so-called "spectrum cap"
rule could have an impact on our ability to acquire other cellular systems, and
it also could limit the universe of potential buyers of any of our systems
should we wish to sell.

The FCC recently amended the ownership attribution rules to allow for
somewhat more ownership overlap. Significant overlap will occur when at least
10% of the 1990 census population of the licensed service area is within the
cellular geographic service area, as defined below, and/or the personal
communications service area or enhanced specialized mobile radio service area.
Ownership limits on overlapping cellular licensees were recently amended so that
a party with a controlling interest or otherwise attributable interest in a
cellular licensee may have a direct or indirect ownership interest of up to 5%
in another cellular licensee in overlapping cellular geographic service areas,
and a party may have a direct or indirect ownership interest of up to 20% in
both cellular licensees in overlapping

79
<PAGE>

cellular geographic service areas so long as neither interest is a controlling
interest. This change in the ownership attribution rules affords greater
opportunities for non-controlling investment in cellular systems and could
facilitate our ability to attract capital or to make investments in other
cellular operators.

Cellular service providers also must satisfy a variety of FCC requirements
relating to technical and reporting matters. One requirement is the coordination
of proposed frequency usage with adjacent cellular users, permittees and
licensees in order to avoid interference between adjacent systems. In addition,
the height and power of base station transmitting facilities and the type of
signals they emit must fall within specified parameters. We are obligated to pay
annual regulatory fees and assessments to support the FCC's regulation of its
cellular operations, as well as fees necessary to support federal universal
service programs, number portability regional database costs, centralized
administration of telephone numbering, telecommunications relay service for the
hearing-impaired and application filing fees. These regulatory payment
obligations will increase our costs of doing business.

The Communications Act requires prior FCC approval for substantive, non
proforma transfers or assignments to or from us of a controlling interest in any
license or construction permit, or any rights thereunder. Although we cannot
assure you that the FCC will approve or timely act upon any future requests for
approval of applications that we file, we have no reason to believe that the FCC
would not approve or grant such requests or applications in due course. Because
an FCC license is necessary to lawfully provide cellular service, if the FCC
were to disapprove any such filing our business plans would be adversely
affected.

The FCC also regulates a number of other aspects of the cellular business.
For example, the FCC regulates cellular resale practices and currently also
applies such cellular resale requirements to A and B Block (and A/B Block
controlled) broadband personal communications service and enhanced specialized
mobile radio licensees. These cellular, personal communications service and
enhanced specialized mobile radio providers may not restrict any customer's
resale of their services or unreasonably discriminate against resellers of their
services. All resale obligations for cellular, broadband personal communications
service and enhanced specialized mobile radio operators are currently scheduled
to terminate on November 24, 2002. Moreover, federal legislation enacted in 1993
requires the FCC to reduce the disparities in the regulatory treatment of
similar mobile services, such as cellular services, personal communications
services and enhanced specialized mobile radio services. Under this regulatory
structure, all of our cellular licenses are classified as commercial mobile
radio services. As a commercial mobile radio services provider, the FCC
regulates us as a common carrier. The FCC, however, has exempted cellular
services from some typical common carrier regulations, such as tariff filings,
thereby allowing us to respond more quickly to our competition in the
marketplace.

The FCC has also adopted requirements for cellular and other commercial
mobile radio services providers to implement basic and enhanced 911 services.
These services provide emergency service providers with the ability to better
identify and locate callers using wireless services, including callers using
special devices for the hearing impaired. Our obligations to implement these
services are scheduled to occur in several stages, with the final stage
beginning as early as March 2001 and the FCC recently amended its rules to
eliminate a requirement that carriers be compensated for enhanced 911 costs and
expand the circumstances under which wireless carriers may be required to offer
enhanced 911 services. Federal legislation recently signed into law may limit
our liability relative to incompleted 911 calls to a degree commensurate with
wireline carriers in our markets. Federal law also requires cellular and
personal communications service carriers to provide law enforcement agencies
with capacity to support lawful wiretaps by March 12, 2001 and technical
capabilities for wiretaps beginning June 30, 2000 and to comply with
wiretap-related record-keeping and personnel-related obligations. Some of the
FCC's and FBI's rules implementing the wiretap requirements are currently being
reviewed by federal courts. These wireless 911 and law enforcement wiretap
requirements may create additional capital obligations for us to make necessary
system changes.

80
<PAGE>

In addition, the FCC regulates the ancillary service offerings that cellular
and personal communications service licensees can provide and permits cellular,
broadband personal communications service, paging and enhanced specialized
mobile radio licensees to offer fixed services on a co-primary basis along with
mobile services. This rule change may facilitate the provision of wireless local
loop service, which involves the use of wireless links to provide local
telephone service by cellular licensees, as well as broadband personal
communications service and enhanced specialized mobile radio licensees, although
the extent of lawful state regulation of such "wireless local loop" service is
undetermined. In this regard, the FCC has also adopted telephone number
portability rules for local exchange carriers, as well as cellular, personal
communications service and enhanced specialized mobile radio licensees, that
could facilitate the development of local exchange competition, including
wireless local loop service. The new number portability rules generally require
cellular, personal communications service and enhanced specialized mobile radio
licensees to have the capability to deliver calls from their systems to ported
numbers effective December 31, 1998 and offer number portability and roaming to
ported numbers by November 24, 2002 but this schedule may be expedited if deemed
necessary by the FCC to promote number conservation. These requirements may
result in added capital expenditures for us to make necessary system changes,
although we currently have no plans for any such expenditures.

The FCC has also adopted rules to govern customer billing by commercial
mobile radio service providers and is considering whether to extend billing
rules currently applicable to landline carriers to commercial mobile radio
services carriers. Adoption of some of the FCC's proposals could increase the
complexity and costs of our billing processes and limit the manner in which we
bill for services. Finally, the FCC has initiated a rulemaking proceeding to
help facilitate the offering of so-called "calling party pays" services whereby
the party placing the call to a wireless customer pays the wireless airtime
charges. Adoption of a calling party pays system may result in increased usage
of wireless systems, thereby generating increased revenues and creating more
competition between commercial mobile radio services and traditional landline
carriers.

The FCC generally grants cellular and personal communications service
licenses for terms of ten years that are renewable upon application to the FCC.
Near the conclusion of the license term, we must file applications for renewal
of licenses to obtain authority to operate for an additional 10-year term. The
FCC may revoke our licenses and may deny our license renewal applications for
cause after appropriate notice and hearing. The FCC will award a renewal
expectancy to us if we meet certain standards of past performance. If we receive
a renewal expectancy, it is very likely that the FCC will renew our existing
cellular license without entertaining competing applications. To receive a
renewal expectancy, we must show that we have provided "substantial" service
during our past license term, and have substantially complied with applicable
FCC rules and policies and the Communications Act. The FCC defines "substantial"
service as service which is sound, favorable and substantially above a level of
mediocre service that might only minimally warrant renewal. If a licensee does
not receive a renewal expectancy, then the FCC will accept competing
applications for the license, subject to a comparative hearing, and the FCC may
award the license to another entity. To date, the FCC has renewed each of our
licenses for which a renewal application was required for a new ten year term.
The balance of our existing licenses begin to expire in October 2000.

A personal communications service system operates under a protected
geographic service area license granted by the FCC for either a major trading
area or a basic trading area on one of six frequency blocks allocated for
broadband service. The FCC has divided the United States and its possessions and
territories into personal communications service markets based upon Rand
McNally's 493 basic trading areas, all of which are included in the 51 major
trading areas. The FCC has allocated 120 MHz of radio spectrum in the 2 GHz band
for licensed broadband PCS services. The FCC divided the 120 MHz of spectrum
into six individual blocks, two 30 MHz blocks (A and B Blocks) licensed for each
of the 51 major trading areas, one 30 MHz block (C Block) licensed for each of
the 493 basic trading areas, and three 10 MHz blocks (D, E and F Blocks)
licensed for each of the 493 basic trading areas, a total of more than 2,000
licenses.

81
<PAGE>
The FCC may deny applications for FCC authority, and in extreme cases revoke
licenses, if it finds that an entity lacks the requisite "character"
qualifications to be a licensee. In making the determination, the FCC considers
whether an applicant or licensee has been the subject of adverse findings in a
judicial or administrative proceeding involving felonies, the possession or sale
of unlawful drugs, fraud, antitrust violations or unfair competition, employment
discrimination, misrepresentations to the FCC or other government agencies, or
serious violations of the Communications Act or FCC regulations. To our
knowledge, there are no activities, and no judicial or administrative
proceedings, involving either us or the licensees in which we hold a controlling
interest, that would warrant such a finding by the FCC.

If foreign nationals or their representatives, a foreign government or its
representative or any corporation organized under the laws of a foreign country
own of record or vote greater than 25 percent of our equity and the FCC
determines that the public interest would be so served, it may revoke our
cellular licenses or require an ownership restructuring. The FCC will generally
permit additional indirect ownership in excess of the statutory 25 percent
benchmark where that interest is to be held by an entity or entities from member
countries of the World Trade Organization. For investors from countries that are
not members of the World Trade Organization, the FCC will determine whether the
home country of the foreign investor extends reciprocal treatment called
"equivalent competitive opportunities" to U.S. entities. If these opportunities
do not exist, it is unlikely that the FCC will permit investment beyond the
25 percent benchmark. These restrictions could adversely affect our ability to
attract additional equity financing. We have no knowledge that any foreign
national owns any of our capital stock.

The Telecommunications Act, which made significant changes to the
Communications Act and terminated the antitrust consent decree applicable to the
regional Bell operating companies, affects the telecommunications industry. This
legislation, among other things, affects competition for local
telecommunications services, interconnection arrangements for carriers,
universal service funding and the provision of interexchange services.

The Telecommunications Act requires state public utilities commissions
and/or the FCC to implement policies that mandate reciprocal compensation
between local exchange carriers, a category that will, for these purposes,
include cellular carriers, for interconnection services at rates more closely
related to cost. In a rulemaking proceeding pertaining to interconnection
between local exchange carriers and commercial mobile radio service providers
such as us, the FCC concluded that local exchange carriers are required to
compensate commercial mobile radio service providers for the reasonable costs
incurred by these providers in terminating traffic that originates on local
exchange carrier facilities, and vice versa. Consistent with this ruling, the
FCC has determined that local exchange carriers may not charge a commercial
mobile radio service provider or other carrier for terminating local exchange
carrier-originated traffic and that local exchange carriers may not charge
commercial mobile radio service providers for number activation and use fees.
Depending on further FCC disposition of these issues, we may or may not be
successful in securing refunds, future relief or both, with respect to charges
for termination of local exchange carrier-originated local traffic. If the FCC
ultimately resolves these issues in favor of commercial mobile radio service
providers, then we will pursue relief through settlement negotiations,
administrative complaint procedures or both. If these issues are ultimately
decided in favor of the local exchange carriers, we likely would be required to
pay all past due contested charges and may also be assessed interest and late
charges for the withhold amounts. These requirements could in the future have a
material effect on us.

The Telecommunications Act requires, and the FCC has adopted, rules that
require interstate communications carriers, including cellular carriers, to
"make an equitable and non-discriminatory contribution" to a universal service
fund that reimburses communications carriers that provide basic communications
services to users who receive services at subsidized rates. We have made such
payments as the FCC has required. The United States Court of Appeals for the
Fifth Circuit recently reversed many of the FCC's rules regarding carriers'
contribution obligations, and the FCC has recently

82
<PAGE>

adopted rules implementing the court's decision. While it generally appears that
our contributions to federal universal service programs may decrease, our
contributions to state universal service programs may be subject to increases
and, moreover, the FCC's decision implementing the court's decision is subject
to further administrative and possibly judicial proceedings. Thus, the impact of
the court's decision is uncertain. We may also seek to qualify for payments from
these programs in high cost areas where we provide wireless services, although
we are not certain that such payments will be available to cellular carriers. If
such payments are made available to us, they would be an additional source of
revenue to us that could be used to subsidize service we provide in these high
cost areas.

The Telecommunications Act also eases the restrictions on the provision of
interexchange telephone services by wireless carriers affiliated with regional
Bell operating companies. Regional Bell operating company-affiliated wireless
carriers have interpreted the legislation to permit immediate provision of in
region long distance call delivery for their cellular customers, thus presenting
an additional source of competition to us.

Additionally, the Telecommunications Act specifically exempts all cellular
carriers from the obligation to provide equal access to interstate long distance
carriers. However, the Telecommunications Act gives the FCC the authority to
impose rules to require unblocked access through carrier identification codes or
800/888 numbers, so that cellular subscribers are not denied access to the long
distance carrier of their choosing, if the FCC determines that the public
interest so requires. We currently provide "dial around" equal access to all of
our customers.

The Telecommunications Act also imposes restrictions on a telecommunications
carrier's use of customer proprietary network information without prior customer
approval. FCC rules implementing these restrictions are being revised but have
the potential to impose upon us new costly obligations and impose burdens on our
current marketing activities. The FCC's rules implementing the
Telecommunications Act's customer proprietary network information provisions
were recently vacated by the United States Court of Appeals for the Tenth
Circuit on First Amendment grounds. The extent to which the FCC will need to
modify its rules to address the court's concerns is uncertain, but imposition of
rules similar to those vacated by the court would impose additional costs on us
and inhibit our marketing efforts.

The Telecommunications Act also requires telecommunications carriers to make
their services accessible to persons with disabilities and the FCC has adopted
rules to implement these requirements. These rules generally require service
providers to offer equipment and services that are accessible to and usable by
persons with disabilities, if readily available, and to comply with
complaint/grievance procedures for violations of these provisions. These rules
are still new and are subject to interpretation through the complaint process.
While much of the focus of these rules is on the manufacture of equipment,
carriers such as us could, if found to have violated the rules, be subject to
fines and/or the imposition of costly new requirements.

In addition, the FCC is currently considering rules to promote the
conservation of numbering resources. These efforts may affect wireless service
providers by imposing additional costs or limiting access to numbering
resources. The FCC has also authorized a number of states, including California,
Ohio and Texas to initiate limited numbering administration measures while the
FCC's consideration of federal rules remains pending, and other states,
including Ohio, have requested similar authority. The impact of the federal
rules on wireless carriers, and whether states will continue to have numbering
administration authority, is uncertain. If more states are given authority over
numbering administration, differing number conservation regimes may be adopted
in different states. In such a case, we likely would incur additional costs in
order to keep abreast of each such regime.

The FCC has determined that interstate interexchange (long distance) service
offerings of commercial mobile radio service providers are subject to rate
averaging and rate integration requirements of the Telecommunications Act. Rate
averaging requires us to average our interstate long distance commercial mobile
radio service rates between high cost and urban costs. The FCC has

83
<PAGE>

delayed implementation of the rate integration requirements with respect to wide
area rate plans pending further reconsideration of its rules, and has delayed
the requirement that commercial mobile radio service carriers integrate their
rates among commercial mobile radio service affiliates. Other aspects of the
FCC's rules are currently under review before the United States Court of Appeals
for the District of Columbia. There is a pending proceeding in which the FCC
will determine how integration requirements apply to commercial mobile radio
service offerings, including single rate plans. While this proceeding is
pending, commercial mobile radio service providers are subject to long distance
rate integration only where they separately state a long distance toll charge
and bill to customers, and the FCC is not enforcing the requirement for
wide-area plans. To the extent that we offer services subject to these
requirements our pricing flexibility is reduced, and there is no assurance that
the FCC will decline to impose these requirements on us and/or across our
various commercial mobile radio service affiliates.

The overall impact of the Telecommunications Act on our business is unclear
and will likely remain so for the foreseeable future. For example, limitations
on local zoning requirements imposed by the Telecommunications Act may
facilitate the construction of new cell sites and related facilities. However,
these restrictions on zoning authority may provide only limited assistance to
cellular carriers. On the other hand, other provisions of the new statute
relating to interconnection, telephone number portability, universal service,
equal access, use of customer proprietary network information and resale could
subject us to additional costs and increased competition.

STATE, LOCAL AND OTHER REGULATION

The Communications Act preempts state or local regulation of the market
entry of, or the rates charged by, any commercial mobile radio services or any
private mobile service provider, which includes cellular telephone service
providers. The FCC has denied the petitions of eight states to continue their
rate regulation authority, including authority over cellular operators. As a
practical matter, we are free to establish rates and offer new products and
service with a minimum of regulatory requirements. The states in which we
operate maintain nominal oversight jurisdiction, primarily focusing upon prior
approval of acquisitions and transfers of licenses and resolution of customer
complaints.

The location and construction of our cellular transmitter towers and
antennas are subject to FCC and Federal Aviation Administration regulations and
are subject to federal, state and local environmental regulation, as well as
state or local zoning, land use and other regulation. Before we can put a system
into commercial operation, we must obtain all necessary zoning and building
permit approvals for the cell site microwave tower locations. The time needed to
obtain zoning approvals and requisite state permits varies from market to market
and state to state. Likewise, variations exist in local zoning processes.
Additionally, any proposed site must comply with the FCC's environmental rules.
If zoning approval or requisite state permits cannot be obtained, or if
environmental rules make construction impossible or infeasible on a particular
site, our network design might be adversely affected, network design costs could
increase the service provided to our customers might be reduced.

We cannot assure you that any state or local regulatory requirements
currently applicable to our systems will not be changed in the future or that
regulatory requirements will not be adopted in those states and localities which
currently have none. Such changes could impose new obligations on us that would
adversely affect our operating results.

FUTURE REGULATION

From time to time, federal or state legislators propose legislation that
could affect us, either beneficially or adversely. We cannot assure you that
federal or state legislation will not be enacted, or that regulations will not
be adopted or actions taken by the FCC or state regulatory authorities, that
might adversely affect our business. Changes such as the allocation by the FCC
of radio spectrum for services that compete with our business could adversely
affect our operating results.

LEGAL PROCEEDINGS

We are not currently aware of any pending or threatened litigation against
us or our subsidiaries that could have a material adverse effect on our
financial condition, results of operations or cash flows.

84
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers are set forth below. Certain of the
officers and directors hold or have held positions in several of our
subsidiaries. The ages of the persons set forth below are as of December 15,
1999.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- ----------------------------------
<S> <C> <C>
Everett R. Dobson (1)............. 40 Chairman of the Board, President,
Chief Executive Officer and
Director

G. Edward Evans................... 38 President of cellular subsidiaries

Bruce R. Knooihuizen.............. 43 Vice President and Chief Financial
Officer

R. Thomas Morgan.................. 43 Vice President and Chief
Information Officer

Craig T. Sheetz................... 40 Executive Vice President and Chief
Operating Officer

Timothy J. Duffy.................. 40 Senior Vice President and Chief
Technical Officer

Richard D. Sewell, Jr. ........... 42 Treasurer

Stephen T. Dobson (1)............. 36 Secretary and Director

Russell L. Dobson (1)............. 64 Director

Justin L. Jaschke................. 41 Director

Albert H. Pharis, Jr.............. 49 Director

Dana L. Schmaltz.................. 32 Director
</TABLE>

- ------------------------

(1) Everett R. Dobson and Stephen T. Dobson are sons of Russell L. Dobson.

We were incorporated in February 1997 in connection with a corporate
reorganization pursuant to which we became the holding company parent of our
subsidiary, Dobson Operating Company. Unless otherwise indicated, information
below with respect to positions held by our executive officers and directors
refers to their positions with Dobson Operating Company and, since
February 1997, also with us.

EVERETT R. DOBSON has served as a director and officer since 1982. From 1990
to 1996, he served as a director, President and Chief Operating Officer of us
and President of our cellular subsidiaries. He was elected our Chairman of the
Board and Chief Executive Officer in April 1996. Mr. Dobson served on the board
of the Cellular Telecommunications Industry Association in 1993 and 1994. He
holds a B.A. in Economics from Southwestern Oklahoma State University and
currently sits on its Foundation Board and chairs its Investment Committee.

G. EDWARD EVANS has served as President of our cellular subsidiaries since
January 1997. Mr. Evans was employed by BellSouth Mobility, Inc. from 1993 to
1996, serving as General Manager-Kentucky, Director of Field Operations at the
company's corporate office in Atlanta and Director of Marketing-Alabama. He was
an Area Manager and a Market Manager of U.S. Cellular from 1990 to 1993 and was
a Sales Manager of GTE Mobilnet from 1989 to 1990. Mr. Evans serves on the board
of the Cellular Telecommunications Industry Association. He holds a B.S. in
Business Administration from the University of South Florida and an M.B.A. from
Georgia State University.

85
<PAGE>

BRUCE R. KNOOIHUIZEN has served as Vice President and Chief Financial
Officer since July 1996. From 1994 to 1996, Mr. Knooihuizen was Chief Financial
Officer and Secretary for The Westlink Co. in San Diego, a wireless provider
which was formerly an operating unit of US WEST. Previously, he was Treasurer
and Controller of Ameritech Cellular from 1990 to 1994; Director, Accounting
Operations of Ameritech Applied Technologies from 1988 to 1990; and Controller
of Ameritech Properties in 1988, all located in Chicago. From 1980 to 1988 he
held various financial and accounting positions with The Ohio Bell Telephone
Company. Mr. Knooihuizen received a B.S. in Finance from Miami University in
Oxford, Ohio and an M.B.A. in finance from the University of Cincinnati.

R. THOMAS MORGAN has served as Vice President and Chief Information Officer
since December 1997. During 1996 and 1997, Mr. Morgan was Director of Corporate
Services in the Information Services Department of American Electric Power in
Columbus, Ohio, an electric utility serving three million customers in the
Midwest. Previously, he was Manager of Accounting and Human Resources Systems
from 1994 through 1995 and held various positions in the Information Services
Department of American Electric Power from 1985. Mr. Morgan was Manager of
Software Engineering for Access Corporation, a software development company, in
Cincinnati, Ohio from 1981 to 1985 and worked as a Senior Consultant with Arthur
Andersen & Co. in Columbus, Ohio from 1978 to 1981. Mr. Morgan holds a B.S. in
Systems Analysis from Miami University in Oxford, Ohio.

CRAIG T. SHEETZ has served as Executive Vice President and Chief Operating
Officer since December 1998. Mr. Sheetz is responsible for the operations of the
company, including field sales and marketing, call center management, billing
and intercarrier services. Before joining us, he served as Vice President, Chief
Financial Officer and Treasurer of Sygnet Wireless, Inc. since 1990. Prior to
joining Sygnet, Mr. Sheetz served as Assistant Vice President at Mellon Bank and
PNC Bank where he specialized in the media and telecommunications industries.
Mr. Sheetz holds a B.A. in Economics from Albion College and an M.B.A. from the
University of Rochester.

TIMOTHY J. DUFFY has served as Chief Technical Officer and Senior Vice
President of Network Operations and Engineering for Dobson Cellular Systems
since December 1998. In this capacity, he manages Dobson's cellular network
facilities as well as engineering, design and build out of new cellular
networks. Prior to joining us, Mr. Duffy worked for Sygnet Communications from
1985 to 1998 in engineering and related management positions. In 1983 he was
employed as Director of Engineering for the Constrander Corporation where he was
responsible for seven AM and FM radio broadcast facilities in Ohio and
Pennsylvania. From 1976 to 1982 he served as Chief Engineer of radio station
WGRP in Greenville, Pennsylvania. Mr. Duffy holds a U.S. patent concerning the
integration of wireless phone location information to make call management
decisions. He is a member of the Institute of Electrical and Electronics
Engineers and holds a degree in Electrical Engineering from Pennsylvania State
University.

RICHARD D. SEWELL, JR. has served as Treasurer since September 1998.
Mr. Sewell was employed by Dal-Tile International Inc., a ceramic tile
manufacturer and distributor, as Vice President-Finance from 1997 to 1998, as
Vice President-Treasurer from 1995 to 1997 and as Vice President-Financial
Reporting from 1990 to 1995. From 1979 to 1989, Mr. Sewell was employed by a
predecessor entity to Ernst & Young, a public accounting firm, concluding as a
principal in their Entrepreneurial Service Group. Mr. Sewell received a B.S. in
Accounting from the University of Missouri-Kansas City.

STEPHEN T. DOBSON has served as a director since 1990. He served as our
Treasurer from 1990 until September 1998, and he has served as Secretary since
1990. He has also served as General Manager and Secretary of Dobson Telephone
Company from 1994 to 1998 and 1990 to 1998, respectively. He became President of
Logix in January 1997 and Vice Chairman of Logix in 1999. Mr. Dobson is a member
of the Western Rural Telephone Association, National Telephone Cooperative
Association and Telecommunications Resellers Association. He holds a B.S. in
Business Administration from the University of Central Oklahoma.

86
<PAGE>

RUSSELL L. DOBSON has served as a director since 1990 and was Chairman of
the Board and Chief Executive Officer from 1990 to 1996. Mr. Dobson joined his
father at Dobson Telephone Company in 1956 and became the controlling owner and
Chief Executive Officer in 1975 when he purchased his father's interest. He has
been active in many industry-related groups, including the Oklahoma Telephone
Association, Western Rural Telephone Company and Organization for the Protection
and Advancement of Small Telephone Companies.

JUSTIN L. JASCHKE has served as a director since October 1996. Mr. Jaschke
has been the Chief Executive Officer and a director of Verio Inc., a publicly
held internet services provider based in Englewood, Colorado, since its
inception in March 1996. Prior to March 1996, Mr. Jaschke served as Chief
Operating Officer for Nextel Communications, Inc. following its merger with
OneComm Corporation in July 1995. Mr. Jaschke served as OneComm's President and
a member of its Board of Directors from 1993 until its merger with Nextel. From
May 1990 to April 1993, Mr. Jaschke served as President and Chief Executive
Officer of Bay Area Cellular Telephone Company. Mr. Jaschke currently serves as
Chairman of the Board of Directors of Metricom, Inc., a wireless data
communications provider. Mr. Jaschke has a B.S. in mathematics from the
University of Puget Sound and an M.S. in management from the Massachusetts
Institute of Technology Sloan School of Management.

ALBERT H. PHARIS, JR. has served as a director and a consultant since
December 1998. Mr. Pharis became Chief Executive Officer of our subsidiary,
Logix, in September 1999. He served as President, Chief Executive Officer and
Director of Sygnet from 1985 to December 1998. He has been active as a board
member of the Cellular Telecommunications Industry Association since 1985 and as
a member of its Executive Committee since 1989. He has also been Chairman of its
Small Operators Caucus.

DANA L. SCHMALTZ became a director in accordance with the terms of our
stockholders' agreement, dated December 23, 1998, with John W. Childs and
entities which he owns or controls and their co-investors. Mr. Schmaltz is a
Vice President of J.W. Childs Associates, Inc. and has been at J.W. Childs
Associates, Inc. since February 1997. From 1995 to 1997, Mr. Schmaltz was an
associate at DLJ Merchant Banking, Inc. Mr. Schmaltz received an A.B. from
Dartmouth College. Mr. Schmaltz graduated from the Harvard Graduate School of
Business Administration in 1995.

BOARD COMPOSITION

We currently have six directors on our board of directors and one vacancy.
Effective upon the closing of this offering, our board of directors will serve
staggered three-year terms as follows:

<TABLE>
<CAPTION>
MEMBERS EXPIRATION OF TERM
- ------- ------------------
<S> <C>
Everett R. Dobson...........................................
Stephen T. Dobson...........................................
Russell L. Dobson...........................................
Justin L. Jaschke...........................................
Albert H. Pharis, Jr........................................
Dana L. Schmaltz............................................
</TABLE>

This classification of our board of directors may have the effect of delaying or
preventing changes in our control or management. See "Risk Factors--Risks
Related to This Offering--Anti-takeover provisions could adversely affect the
price of our Class A common stock."

Shares of our Class B common stock are entitled to ten votes per share
subject to certain exceptions where they are restricted to one vote per share.
The holders of our Class B common stock have entered into an investors agreement
that enables them to appoint all of our directors and which provides that they
will vote their shares of common stock together in a manner that will enable
them to elect all of our directors and control the outcome of substantially all
matters submitted to our

87
<PAGE>

stockholders for a vote. Pursuant to the investors agreement, the Dobson CC
Limited Partnership is entitled to designate four of our directors, John W.
Childs and entities which he owns or controls and their co-investors are
entitled to designate one of our directors, AT&T Wireless is entitled to
designate one of our directors and the Dobson CC Limited Partnership, John W.
Childs and entities which he owns or controls and their co-investors and AT&T
Wireless are entitled to jointly designate one of our directors. AT&T Wireless
has elected not to exercise its right to designate a director at this time.

Upon the occurrence of certain voting rights triggering events under the
certificates of designation of our senior preferred stock, two additional
directors may be designated by the holders of our 12 1/4% senior preferred stock
and two additional directors may be designated by the holders of our 13% senior
preferred stock. See "Description of Capital Stock."

Our directors serve until they resign or are removed, or are otherwise
disqualified to serve, or until their successors are elected and qualified. Our
executive officers serve at the discretion of our board of directors. Our
officers are appointed at the board's first meeting after each annual meeting of
stockholders.

DIRECTOR COMPENSATION

We reimburse directors for out-of-pocket expenses incurred in attending
board meetings. In addition, we granted Justin L. Jaschke an option to acquire
92,830 shares of our Class A common stock at an exercise price of $0.90 per
share in connection with his election as a director in October 1996.
Mr. Jaschke's option vests ratably over a five-year period and fully vests upon
a change of control. Directors who are our officers or our consultants receive
no additional compensation for services rendered as directors.

BOARD COMMITTEES

Our compensation committee currently consists of Russell L. Dobson and Dana
L. Schmaltz. The compensation committee reviews and evaluates the salaries,
supplemental compensation and benefits of our officers, reviews general policy
matters relating to compensation and benefits of our employees and makes
recommendations concerning these matters to the board of directors. The
compensation committee also administers our 1996 stock option plan.

Our audit committee currently consists of Justin L. Jaschke and Dana L.
Schmaltz. The audit committee reviews with our independent auditor, the scope
and timing of its audit services, the auditor's report on our financial
statements following completion of its audit and our policies and procedures
with respect to interal accounting and financial controls. In addition, the
audit committee makes annual recommendations to our board of directors for the
appointment of independent auditors for the following year.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1998, the members of our compensation committee were Russell L.
Dobson, Justin L. Jaschke and Thadeus J. Mocarski, a former director.
Russell L. Dobson previously served as Chairman of the Board and Chief Executive
Officer from 1990 to 1996 and is the father of Everett and Stephen Dobson. For a
description of certain transactions between Mr. Dobson and us, see "Certain
Transactions."

88
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth the cash and non-cash compensation during
1998, 1997 and 1996 earned by our chief executive officer and our other four
most highly compensated executive officers as of December 31, 1998:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS(1) COMPENSATION OPTION AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(2) (# OF SHARES) ($)(3)
- --------------------------- -------- -------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Everett R. Dobson ........ 1998 380,400 250,000 39,700(4) -- 6,400
Chairman of the Board, 1997 300,000 250,000 54,800(4) -- 9,500
President, Chief 1996 300,000 142,400 77,100(4) -- 6,000
Executive Officer and
Director

Stephen T. Dobson ........ 1998 155,200 80,000 32,600(5) -- 4,700
Secretary and Director 1997 100,000 75,000 13,800(5) -- 6,500
1996 97,000 75,000 20,600(5) -- 3,900

G. Edward Evans .......... 1998 152,500 76,000 -- 111,440 4,300
President of cellular 1997 113,600 80,000(6) -- 672,318 --(7)
subsidiaries 1996(8) -- -- -- -- --
Bruce R. Knooihuizen ..... 1998 165,000 102,500 -- 111,440 4,100
Vice President and 1997 152,500 82,500 -- -- 1,400
Chief Financial Officer 1996 65,900 37,500 57,600(9) 840,369 --

R. Thomas Morgan ......... 1998 135,000 60,000 -- 134,508 --
Vice President and 1997 11,000 20,000(10) -- -- --
Chief Information Officer 1996(8) -- -- -- -- --
</TABLE>

- ------------------------

(1) The bonuses for 1998 represent the bonuses paid in 1999 with respect to
services performed in 1998. The bonuses for 1997 represent the bonuses paid
in 1998 with respect to services performed in 1997. The bonuses for 1996
represent the bonuses paid in 1997 with respect to services performed in
1996, but do not include $205,000 and $69,000 paid to Everett R. Dobson and
Stephen T. Dobson, respectively, in 1996 with respect to services performed
in 1995.

(2) Represents the value of perquisites and other personal benefits in excess of
10% of annual salary and bonus.

(3) Includes the matching contributions made by us to the account of the
executive officer under our 401(k) Profit Sharing Plan.

(4) Includes $26,000, $36,600 and $62,900 for personal use of our aircraft and
$12,300, $18,200 and $12,500 for a company-provided vehicle in 1998, 1997
and 1996, respectively.

(5) Includes $16,100, $10,400 and $7,400 for personal use of our aircraft and
$16,300, $3,400 and $6,500 for a company-provided vehicle in 1998, 1997 and
1996, respectively.

(6) Includes $20,000 received upon commencement of employment.

(7) In February 1997, we made a below market home mortgage loan to Mr. Evans.
See "Certain Transactions."

(8) Not employed by us in 1996.

(9) Includes $5,600 for interim housing expenses, $24,300 for home mortgage
closing costs and $27,700 for tax reimbursements for such expenses and
costs.

(10) Represents $20,000 received upon commencement of employment.

89
<PAGE>

The following tables list those persons in the previous table who were
granted options to purchase shares of our old Class B common stock in 1998. As
part of our recapitalization, these options were amended to be exercisable into
shares of our Class A common stock on a 111.44 for one basis. The following
tables provide information regarding our outstanding options on a converted
basis. No stock options were exercised by the persons in the following tables in
1998.

OPTION GRANTS IN 1998

INDIVIDUAL GRANTS
------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES UNDERLYING OPTIONS GRANTED TO EXERCISE PRICE
NAME OPTIONS GRANTED EMPLOYEES IN 1998 ($/SHARE) EXPIRATION DATE
- ---- --------------------- ------------------ -------------- ---------------
<S> <C> <C> <C> <C>
G. Edward Evans...... 111,440 9.1% $2.69 01/29/08
Bruce R.
Knooihuizen........ 111,440 9.1% $2.69 01/29/08
R. Thomas Morgan..... 134,508 10.9% $2.69 01/29/08

<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ANNUAL RATES OF
STOCK APPRECIATION FOR
OPTION TERM(1)
-----------------------------------
NAME 0%(2) 5% 10%
- ---- ---------- -------- --------
<S> <C> <C> <C>
G. Edward Evans...... $2,040,466 $188,668 $478,123
Bruce R.
Knooihuizen........ $2,040,466 $188,668 $478,123
R. Thomas Morgan..... $2,462,841 $227,546 $576,658
</TABLE>

- ------------------------------

(1) The assumed annual rates of stock price appreciation of 5% and 10% are set
by the Securities and Exchange Commission and are not intended as a
forecast of possible future appreciation in stock prices.

(2) Based upon the mid-range of the offering price of our Class A common stock
set forth on the cover page of this prospectus.

1998 YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT 12/31/98(#) OPTIONS AT 12/31/98($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
- ---- ------------------------------- ---------------------------------------
<S> <C> <C>
G. Edward Evans........................ 134,397 / 649,361 $ 681,390 / $3,092,255
Bruce R. Knooihuizen................... 336,103 / 615,706 $1,704,040 / $2,921,625
R. Thomas Morgan....................... 26,857 / 110,994 $ 124,321 / $372,963
</TABLE>

- ------------------------

(1) The value of unexercised in-the-money options at December 31, 1998 is
computed as the product of the stock value at December 31, 1998 less the
stock option exercise price, and the number of underlying securities at
December 31, 1998.

EMPLOYMENT AGREEMENTS

We do not have formal employment agreements with any of our employees. In
connection with the employment of Bruce R. Knooihuizen in 1996 and G. Edward
Evans in 1997, we agreed to provide them compensation in the form of salary,
bonus, stock options and other benefits. The terms of Mr. Knooihuizen's
employment provide for an initial annual salary of $150,000, an annual bonus
ranging from 30% to 50% of his annual salary, and a 10-year option to purchase
840,369 shares of our Class A common stock vesting at the rate of 20% per year.
The terms of Mr. Evans' employment provide for an initial annual salary of
$120,000, an annual bonus ranging from 30% to 50% of his annual salary, a
five-year home mortgage loan of $300,000 at an annual interest rate of 4% and a
ten-year option to purchase 672,318 shares of our Class A common stock, with
100% of the options vesting ratably over five years. We also agreed to a
severance payment equal to one year's salary in the event of termination of
employment of Messrs. Knooihuizen or Evans without cause. The options to
purchase shares of our Class A common stock held by these officers become fully
vested upon a change of control.

In connection with the employment of R. Thomas Morgan in 1997, we agreed to
provide him compensation in the form of salary, bonus, stock options and other
benefits. The terms of Mr. Morgan's employment provide for an initial annual
salary of $135,000, an annual bonus ranging

90
<PAGE>

from 30% to 40% of his annual salary, and a ten-year option to purchase shares
of our Class A common stock vesting at the rate of 20% per year. The options to
purchase shares of our Class A common stock held by Mr. Morgan become fully
vested upon a change of control.

Prior to August 15, 1998, Russell L. Dobson was one of our corporate
officers. Effective August 15, 1998, we entered into a consulting agreement with
Mr. Dobson. Under the terms of the consulting agreement, Mr. Dobson has been
retained by us from August 15, 1998 through August 31, 2008. In exchange for
Mr. Dobson's services, we agreed to provide monthly compensation of $15,000 and
insurance benefits commensurate with our employee plan. Mr. Dobson's
responsibilities include, but are not necessarily limited to, representing us at
various functions, including trade shows and seminars, assisting with regulatory
matters, including appearances where required before regulatory bodies, and
analyzing technical and financial data to assist executive officers in strategic
planning and forecasting. In addition, Mr. Dobson has agreed not to compete with
us during the term of his consulting agreement. During 1998, we paid Mr. Dobson
approximately $195,000, a portion of which was for services as an officer and
the balance of which was under the consulting agreement.

Effective December 23, 1998, Albert H. Pharis, Jr. became a consultant to us
to assist us on an as-needed basis for a term of five years. Mr. Pharis will
advise and consult with us regarding operational matters affecting our business.
Mr. Pharis received a fee of $40,000 for the first 90 days of such consulting
period and is to receive an annual fee of $60,000 thereafter. In addition,
Mr. Pharis received options to purchase 92,830 shares of our Class A common
stock at an exercise price of approximately $5.97 per share. Mr. Pharis's
options vest ratably over a five-year period and fully vest upon a change of
control.

STOCK OPTION PLAN

We adopted our 1996 stock option plan to encourage our key employees by
providing opportunities to participate in our ownership and future growth
through the grant of incentive stock options and nonqualified stock options. The
plan also permits the grant of options to our directors. The plan is presently
administered by a committee, which currently consists of our board of directors,
but in the future may be administered by a committee of the board. In connection
with our recapitalization, we amended the plan to, among other things, convert
all outstanding options and issuable options to be exercisable, at a
split-adjusted price, for shares of our Class A common stock. The following
discussion gives effect to the conversion of our existing options.

The maximum number of shares for which we may grant options under the plan
is 6,723,398 shares of Class A common stock, subject to adjustment in the event
of any stock dividend, stock split, recapitalization, reorganization or certain
defined change of control events. As of September 30, 1999, we had granted
options to purchase an aggregate of 3,653,672 shares of our Class A common stock
under the plan. Shares subject to previously expired or terminated options
become available again for grants of options. The shares that we will issue
under the plan will be newly issued shares.

The committee determines the number of shares and other terms of each grant.
The price payable upon the exercise of an incentive stock option may not be less
than 100% of the fair market value of our Class A common stock at the time of
grant, or in the case of an incentive stock option granted to an employee owning
stock possessing more than 10% of the total combined voting power of all classes
of our common stock, 110% of the fair market value on the date of grant. We may
grant incentive stock options to an employee only to the extent that the
aggregate exercise price of all such options under all of our plans becoming
exercisable for the first time by the employee during any calendar year does not
exceed $100,000. The price payable upon the exercise of a nonqualified stock
option must be at least the minimum legal consideration required under the laws
of Oklahoma.

Each option that we have granted or will grant under the plan will expire on
the date specified by the committee, but not more than ten years from the date
of grant or, in the case of a 10%

91
<PAGE>

shareholder, not more than five years from the date of grant. Unless otherwise
agreed, an incentive stock option will terminate not more than 90 days, or
twelve months in the event of death or disability, after the optionee's
termination of employment.

An optionee may exercise an option by giving notice to us, accompanied by
full payment of the purchase price in cash or, at the discretion of the
committee:

- common stock having a fair market value equal to the exercise price;

- the optionee's personal recourse note, bearing interest payable not less
than annually at no less than 100% of the lowest applicable federal rate
as defined in Section 1274(d) of the Internal Revenue Code;

- an assignment of proceeds from the sale of a portion of the stock subject
to the option being exercised; or

- a combination of the foregoing.

Outstanding options become nonforfeitable and exercisable in full
immediately prior to certain defined change of control events. Unless otherwise
determined by the committee, outstanding options will terminate immediately
prior to the consummation of our dissolution or liquidation.

The plan may be terminated or amended by the board of directors at any time
subject, in the case of certain amendments, to shareholder approval. If not
earlier terminated, the plan expires on June 1, 2006.

With certain exceptions, Section 162(m) of the Internal Revenue Code denies
a deduction to publicly-held corporations for compensation paid to certain
executive officers in excess of $1.0 million per executive per taxable year
(including any deduction with respect to the exercise of an option). An
exception exists, however, for amounts received upon exercise of stock options
pursuant to certain grandfathered plans. Options granted under our plan are
expected to satisfy this exception.

CERTAIN TRANSACTIONS

We have a policy requiring that any material transaction that we enter into
with with our officers, directors or principal stockholders and their affiliates
be on terms no less favorable to us than reasonably could have been obtained in
an arms' length transaction with independent third parties. Any other matters
involving potential conflicts of interests are to be resolved on a case-by-case
basis. In addition, the terms of our various debt instruments limit the ability
of us and of our subsidiaries to enter into transactions with our affiliates.

The Everett R. Dobson Irrevocable Family Trust, The Steven T. Dobson
Irrevocable Family Trust and The Robbin L. Dobson Irrevocable Family Trust are
the limited partners of the Dobson CC Limited Partnership, which holds
approximately 52,925,285 of our Class B common stock. Everett R. Dobson is the
president and sole director and shareholder of the general partner of the
partnership.

Prior to November 1, 1998, we leased our headquarters from WillRuss Limited
Liability Company pursuant to a 10-year lease expiring in 2005. WillRuss is
owned by Russell L. Dobson and his wife. Monthly rent under the lease was
approximately $23,000, or $.93 per square foot. In October 1998, WillRuss sold
this building to an unrelated third party. As part of the sale transaction, we
entered into an agreement with the buyer to lease the building for a one-year
term at a monthly rent of approximately $19,000. Our lease, with renewals, runs
through October 2000.

We made a $300,000 home mortgage loan to G. Edward Evans in February 1997 in
connection with his employment. The loan is payable in 60 monthly installments
of $1,400, including interest at the annual rate of 4%, with the balance due at
maturity in February 2002.

92
<PAGE>

In our reorganization in February 1997, the shareholders of Dobson Operating
Company exchanged their Dobson Operating Company stock for our stock, and we
assumed outstanding Dobson Operating Company stock options, substituting shares
of our common stock for the Dobson Operating Company stock subject to options.
Also, in February 1997, we issued 100,000 shares of our Class C preferred stock
to the Fleet Investors. At the time of this transaction, a principal of the
Fleet Investors became one of our directors.

Transactions with us described below refer to Dobson Operating Company if
they occurred prior to February 1997.

In March 1996, the Fleet Investors purchased 100,000 shares of our Class B
preferred stock for $10.0 million. In connection with this transaction, we
entered into a shareholders' agreement providing for, among other matters,
registration rights, restrictions on the transfer of our stock, put and call
rights with respect to the Class B preferred stock, and the issuance of
additional stock upon the happening of certain events. The Fleet Investors also
granted us a stock option. In connection with our February 1997 reorganization,
we entered into a new shareholders' agreement having substantially the same
terms and conditions.

The Dobson trusts were co-borrowers with us and certain of our subsidiaries
under a prior bank facility, which we first entered into in 1994. We guaranteed,
and pledged the equity securities of certain of our subsidiaries as security
for, the obligations of the Dobson trusts under a $6.0 million promissory note
maturing in 2004, and the Dobson CC Limited Partnership guaranteed our loan
obligations and those of our subsidiaries under the prior bank facility. All
borrowings were secured by shares of our old Class A common stock. We paid
dividends on that old Class A common stock in amounts sufficient to permit the
Dobson trusts to service the loan. The Dobson trusts incurred legal fees
totaling approximately $0.5 million in connection with the negotiation and
closing of the credit agreement for the prior bank facility in 1994 and an
amendment effected in 1996. We paid those fees. We used $7.5 million of bank
borrowings to pay a dividend to holders of our old Class A common stock, of
which $6.0 million was used to fully pay the loan and $0.5 million was used to
pay indebtedness owed to us by the Dobson trusts with respect to the legal fees
described above.

Everett R. Dobson and Russell L. Dobson beneficially owned 67% of the
capital stock of Associated Telecommunications and Technologies, Inc. In
December 1996, we consolidated $263,000 of Associated Telecommunications'
outstanding indebtedness to us in an unsecured promissory note, which provided
for interest at an annual rate of 10%. The consolidation refinanced earlier
loans made prior to 1994. At September 30, 1997, National Telecommunications
Technologies, Inc., a wholly-owned subsidiary of Associated Telecommunications,
owed us $307,000, representing funds we advanced during 1992, 1993 and 1995.
That indebtedness accrued interest at an annual rate of 10%. The combined
principal amount of $570,000 for the Associated Telecommunications and National
Telecommunications loans, was paid in full on October 1, 1997 in connection with
the closing of our acquisition of the Arizona 5 market. We lent another
subsidiary of Associated Telecommunications $21,000 in 1994 and $32,000 in 1995,
at annual interest rates of 12% and 14%, respectively. These loans were paid in
full in October 1995 and January 1996.

Through September 30, 1997, we performed certain management services for
Associated Telecommunications and its subsidiaries, including accounting, plant
and central office management and engineering. Billings for those services were
based on the time spent by, and hourly rates of, our personnel and expenses
incurred. During 1995, 1996, and the nine months ended September 30, 1997, the
aggregate amounts billed for management fees and expenses to Associated
Telecommunications and its subsidiaries were approximately $210,000, $333,000
and $110,000, respectively. The amounts owed by these entities to us for
management fees at December 31, 1995 and 1996 and September 30, 1997 were
$1.0 million, $1.2 million and $1.3 million, respectively. All amounts owed by
Associated Telecommunications and it subsidiaries for management services
rendered prior to September 30, 1997

93
<PAGE>

were paid in October 1997 in connection with the closing of our acquisition of
Arizona 5. In connection with our Arizona 5 acquisition, Associated
Telecommunications became our wholly owned subsidiary, and a new company,
NATELCO, LLC (an affiliate of Everett R. Dobson and Russell L. Dobson), was
created. For the years ended December 31, 1997 and 1998 the amounts billed for
management fees and expenses to NATELCO, LLC were $21,000 and $47,700,
respectively. The amounts owed by NATELCO, LLC to us for management fees at
December 31, 1997 and 1998 were $8,900 and $0, respectively.

Associated Telecommunications beneficially owned a 20.55% partnership
interest in the Arizona 5 partnership. In connection with our Arizona 5
acquisition, we purchased all of the outstanding capital stock of Associated
Telecommunications for $14.2 million, of which Everett R. Dobson and Russell L.
Dobson, together, received $9.5 million. The purchase price for the Associated
Telecommunications' stock was based on Associated Telecommunications' beneficial
ownership in the Arizona 5 partnership and our negotiations with the other
partner of the Arizona 5 partnership.

In March 1996, we made a $1.4 million unsecured loan to Everett R. Dobson.
He repaid that loan on October 1, 1997 in connection with our Arizona 5
acquisition. Interest on the amount borrowed was payable quarterly at the same
annual rate as that payable under our prior bank facility. The loan consolidated
amounts borrowed prior to 1994, together with accrued interest.

In June 1997, Everett R. Dobson executed a promissory note in our favor for
approximately $354,000, which refinanced loans made to him during 1996, together
with accrued interest. He repaid that loan on October 1, 1997 in connection with
our Arizona 5 acquisition. The loan bore interest at 8% per annum. In December
1996, we made a one-year loan in the amount of $12,900 to Russell L. Dobson
which bore interest at 9% per annum. In June 1997, we made an additional loan to
Russell L. Dobson, in the principal amount of $423,000, of which $304,000
consolidated amounts owed to us from prior to 1994, and $119,000 refinanced a
loan made to him in November 1996, in each case together with accrued interest.
This loan bore interest at an annual rate of 9.07%. Both loans to Russell L.
Dobson were paid in full on October 1, 1997 in connection with our Arizona 5
acquisition. The interest rate charged on our loan to Everett R. Dobson
represented our costs of borrowed funds. The interest rate on the loans to
Russell L. Dobson approximated the prevailing market rates at the time we first
made the loans to him.

In 1995, we bought 75,000 shares of common stock of Zenex Long Distance,
Inc. for $75,000 and 400,000 shares of Zenex preferred stock for $400,000, and
received an option to purchase additional shares of Zenex common stock. In early
1996, we purchased an additional 275,000 shares of Zenex preferred stock for
$275,000. In October 1996, Zenex redeemed all shares of Zenex preferred stock
held by us and purchased our option for an aggregate of $825,000. At the same
time, we sold 30,000 shares of Zenex common stock to an unrelated party for
$142,000. In July 1997, we purchased 30,000 shares of Zenex common stock for
$150,000 and resold the shares in November 1997 to Everett R. Dobson at a price
equal to our cost. In September 1997, we purchased a loan for $263,882 made by a
bank to Zenex and resold such loan to Everett R. Dobson in November 1997 at a
price equal to our cost plus accrued interest. Everett R. Dobson was director of
Zenex from August 1995 to September 1997.

In November 1997, Everett R. Dobson purchased a $0.9 million interest in our
loan to Gila River Telecommunications Subsidiary, Inc., a wholly owned
subsidiary of the Gila River Indian Community. We repurchased this interest in
June 1998 for $0.9 million.

In January 1998, our subsidiary, Logix, purchased contractual rights,
information data and other rights with respect to certain of Zenex's long
distance customers located in areas served by Logix for $105,000. In addition,
in June, 1998, Logix purchased certain long distance customers and related
assets for approximately $4.7 million. In connection with the purchase of these
assets of Zenex, a note

94
<PAGE>
payable in the amount of $284,765, including accrued interest, owed from Zenex
to Everett R. Dobson, was paid in full.

In connection with the Sygnet acquisition in December 1998, the Fleet
Investors converted their Class B preferred stock into our old Class A common
stock. We purchased for $1.9 million all of our 100,000 outstanding shares of
Class C preferred stock held by Fleet Venture Resources, Inc., Fleet Equity
Partners VI, L.P. and Kennedy Plaza Partners, collectively the Fleet Investors,
and also purchased 43,345 shares of our old Class A common stock for
$31.1 million. In addition, the shareholders agreement with the Fleet Investors
was terminated. Thadeus J. Mocarski, a principal of the Fleet Investors, was one
of our directors at the time of our purchase and resigned as a director upon
consummation of the Sygnet acquisition. As part of the Sygnet acquisition, the
Dobson CC Limited Partnership acquired 37,853 shares of Class G preferred stock
from us in exchange for 37,853 shares of our old Class A common stock. On
May 17, 1999 we redeemed all of the outstanding shares of our Class G preferred
stock for $25.0 million plus accrued dividends of $1.5 million. All of the
Class G preferred stock was acquired by the Dobson CC Limited Partnership in
December 1998 as part of the financing of our acquisition of Sygnet and in
exchange for shares of our outstanding common stock valued at $25.0 million.

As part of the Sygnet acquisition in December 1998, our subsidiary, Dobson
Tower Company purchased cellular towers from Sygnet for $25.0 million and leased
the towers back to Sygnet. To finance the tower transaction, the Dobson CC
Limited Partnership purchased preferred stock of Dobson Tower Company for
$7.7 million and Dobson Tower Company obtained a $17.5 million bank credit
facility. We own all of Dobson Tower Company's common stock. On October 15,
1999, Dobson Tower Company sold substantially all of its towers to American
Tower Corporation for a purchase price of approximately $38.7 million. In
connection with the sale, our subsidiary, Sygnet Communications, leased the
towers back from American Tower Corporation for an initial term of ten years. A
portion of the sale proceeds is being held in escrow pending resolution of
various title issues. With the proceeds of this sale, Dobson Tower Company
repaid its $17.5 million credit facility and Dobson Tower Company redeemed all
of its outstanding Class A preferred stock from the Dobson CC Limited
Partnership and repaid certain costs and expenses incurred by the Dobson CC
Limited Partnership for a total of $8.3 million. We used the balance of the sale
proceeds to pay costs associated with the tower sale and to reduce the credit
facility of Sygnet.

In connection with our acquisition of Sygnet and the related financing, we
engaged in a number of transactions with the Dobson CC Limited Partnership and
with John W. Childs and entities which he owns or controls and their
co-investors.

On December 23, 1998, John W. Childs and entities which he owns or controls
and their co-investors and the Dobson CC Limited Partnership purchased shares of
our Class D preferred stock for $85.0 million pursuant to an investment and
transaction agreement and entered into a stockholder and investor rights
agreement with us and certain of our shareholders, other than the holders of the
Class F preferred stock. The Dobson CC Limited Partnership purchased 3,533.8
shares of our Class D preferred stock for $4.0 million and John W. Childs and
entities which he owns or controls and their co-investors purchased 71,559.9
shares of our Class D preferred stock for $81.0 million. Concurrently, John W.
Childs and entities which he owns or controls and their co-investors purchased
13,647.16 shares of our old Class A common stock for $11.5 million from the
Fleet Investors. Each share of Class D preferred stock is convertible into one
share of our old Class A common stock and one share of Class E preferred stock.
On September 17, 1999, AT&T Wireless acquired from John W. Childs and entities
which he owns or controls and their co-investors. 15,472.4 shares of Class D
preferred stock and 3,764.84 shares of our old Class A common stock for
$22.1 million. On the same day, we entered into an amended stockholder and
investor rights agreement with the Dobson CC Limited Partnership, John W. Childs
and entities which he owns or controls and their co-investors and AT&T Wireless.
See "Description of Capital Stock--Common Stock" for a description of the
investors agreement.

95
<PAGE>

On September 13, 1999, our subsidiary, Logix, entered into an amended
revolving credit agreement with Bank of America, N.A., and other banks. As an
inducement to the lenders to enter into this credit agreement, the Dobson CC
Limited Partnership guaranteed up to $50.0 million of the obligation of Logix
thereunder. Upon certain conditions and performance by Logix, the amount of the
obligation guaranteed by the Dobson CC Limited Partnership may be reduced to
$20.0 million prior to the repayment in full of the credit agreement
indebtedness by Logix. The Dobson CC Limited Partnership also entered into an
agreement as of the same date providing, among other things, for the Dobson CC
Limited Partnership to lend up to $20.0 million to Logix under certain
conditions.

On October 5, 1999, the Dobson CC Limited Partnership provided a
$50.0 million letter of credit issued by Bank of America, N.A. for our
subsidiary to use in connection with its obligations as a 50% member of the
American Cellular joint venture with AT&T Wireless. On October 5, 1999, the
Dobson CC Limited Partnership obtained from Bank of America a $200.0 million
loan commitment and agreed to use the loan proceeds, if drawn, to acquire shares
of our preferred stock. We agreed to use the $200.0 million to make part of our
agreed upon capital contributions to the American Cellular joint venture in the
event we do not receive sufficient funds in this offering.

The Dobson CC Limited Partnership and unrelated third parties have acquired
land and have finalized financing for the construction of our new headquarters.
We anticipate completion of the project in the first quarter of 2001.

On November 9, 1999, our subsidiary, DCC PCS, Inc. entered into a license
acquisition agreement with AT&T Wireless, Royal Wireless, L.L.C. and Arnage
Wireless, L.L.C., under which DCC PCS will sell, subject to FCC approval, all of
its personal comunications service licenses to those two companies for
$1.1 million in addition to the assumption of DCC PCS's indebtedness of
approximately $4.0 million. AT&T Wireless has guaranteed the performance of the
obligations of Royal Wireless and Arnage Wireless under this agreement.

As described elsewhere in this prospectus, we intend to distribute the stock
of our subsidiary, Logix, to the current holders of our common stock. Our
directors and principal shareholders, Everett Dobson, Russell Dobson, Dana
Schmaltz, on behalf of John W. Childs and entities which he owns or controls and
their co-investors, and AT&T Wireless, will participate in the distribution
either directly or beneficially. See "Risk Factors--Risks to Our Business--We
intend to distribute, prior to this offering, the stock of our subsidiary,
Logix, to our current stockholders. The distribution of the Logix stock followed
by a sale of Logix may have adverse tax consequences to us."

The Dobson CC Limited Partnership, John W. Childs and entities which he owns
or controls and their co-investors and AT&T Wireless own shares of our Class D
preferred stock. As part of our recapitalization, they will convert all
outstanding shares of our Class D preferred stock into shares of our old
Class A common stock and Class E preferred stock. We expect to redeem the
Class E preferred stock, together with accrued and unpaid dividends thereon, for
an aggregate redemption consideration of $99.3 million, with net proceeds from
this offering. Messrs. Everett Dobson and Dana Schmaltz will receive a direct or
indirect benefit from the redemption of our Class E preferred stock.

96
<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

PRINCIPAL SHAREHOLDERS

The following table provides information concerning beneficial ownership of
each class of our common stock at December 15, 1999, and as adjusted to reflect
the sale of shares of Class A common stock offered by this prospectus, held by:

- each person or group of affiliated persons known by us to beneficially own
more than 5% of each voting class of our stock;

- each of our directors;

- our chief executive officer and each of our other four most highly
compensated executive officers; and

- all directors, director nominees and executive officers as a group.

Unless otherwise indicated, each person named in the table has sole voting
power and investment power, or shares voting and investment power with his or
her spouse, for all shares listed as owned by such person. The number of shares
of common stock outstanding for each listed person includes any shares the
individual has the right to acquire within 60 days of this prospectus. For
purposes of calculating each person's or group's percentage ownership, stock
options exercisable within 60 days are included for that person or group, but
not for the stock ownership of any other person or group.

<TABLE>
<CAPTION>
PERCENT OF TOTAL
CLASS A COMMON STOCK (1) CLASS B COMMON STOCK ECONOMIC INTEREST
---------------------------- ------------------------- ----------------------
NUMBER NUMBER
OF SHARES OF SHARES
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF BEFORE THE AFTER THE
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS OWNED CLASS OFFERING OFFERING
- ------------------------------------ ------------ ---------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Everett R. Dobson(3)......................... -- -- 52,925,285 79.10% 79.10% 57.59%
13439 N. Broadway Ext.
Oklahoma City, OK 73114

Russell L. Dobson............................ -- -- 351,482 * * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114

Bruce R. Knooihuizen(4)...................... 526,554(4) 2% -- -- * *
13439 North Broadway Ext.
Oklahoma City, OK 73114

R. Thomas Morgan(4).......................... 26,857(4) * -- -- * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114

Justin L. Jaschke(4)......................... 55,720(4) * -- -- * *
5616 South Ivy Ct.
Greenwood Village, CO 80111

Albert H. Pharis, Jr.(4)..................... -- -- -- -- * *
7130 S. Raccoon Road
Canfield, OH 44406

G. Edward Evans(4)........................... 291,215(4) 1% -- -- * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114

John W. Childs(5)(6)......................... -- -- 7,832,523 11.71% 11.71% 8.52%
One Federal St., 21st Floor
Boston, MA 02110
c/o J.W. Childs Equity
Partners II, L.P.

Dana L. Schmaltz(6).......................... -- -- 7,832,523 11.71% 11.71% 8.52%

<CAPTION>
PERCENT OF TOTAL
VOTING POWER(2)
----------------------

BEFORE THE AFTER THE
NAME AND ADDRESS OF BENEFICIAL OWNER OFFERING OFFERING
- ------------------------------------ ---------- ---------
<S> <C> <C>
Everett R. Dobson(3)......................... 79.10% 76.25%
13439 N. Broadway Ext.
Oklahoma City, OK 73114
Russell L. Dobson............................ * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114
Bruce R. Knooihuizen(4)...................... * *
13439 North Broadway Ext.
Oklahoma City, OK 73114
R. Thomas Morgan(4).......................... * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114
Justin L. Jaschke(4)......................... * *
5616 South Ivy Ct.
Greenwood Village, CO 80111
Albert H. Pharis, Jr.(4)..................... * *
7130 S. Raccoon Road
Canfield, OH 44406
G. Edward Evans(4)........................... * *
13439 N. Broadway Ext.
Oklahoma City, OK 73114
John W. Childs(5)(6)......................... 11.71% 11.28%
One Federal St., 21st Floor
Boston, MA 02110
c/o J.W. Childs Equity
Partners II, L.P.
Dana L. Schmaltz(6).......................... 11.71% 11.28%
</TABLE>

97
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
One Federal St., 21st Floor
Boston, MA 02110

All directors, nominees and executive
officers as a group (12 persons)........... 900,346 100% 61,109,290 90.82% 90.82% 66.11%

<S> <C> <C>
One Federal St., 21st Floor
Boston, MA 02110
All directors, nominees and executive
officers as a group (12 persons)........... 90.82% 87.57%
</TABLE>

- ----------------------------------

* Less than 1%.

(1) The number of shares of Class A common stock does not include the shares of
Class A common stock issuable upon conversion of the outstanding shares of
Class B common stock.

(2) In calculating the percent of total voting power, the voting power of shares
of Class A common stock and the Class B common stock is aggregated. The
Class A common stock and the Class B common stock vote together as a single
class on all matters submitted to a vote of shareholders, except as required
by law. Each share of Class A common stock is entitled to one vote and each
share of Class B common stock is entitled to ten votes, except that each
share of Class B common stock is entitled to only one vote with respect to
any "going private" transaction.

(3) All such shares are held by the Dobson CC Limited Partnership. As the
president, a director and sole shareholder of RLD, Inc., the general partner
of that partnership, Everett R. Dobson has voting and investment power with
respect to such shares.

(4) Represents exercisable stock options issued pursuant to our 1996 stock
option plan.

(5) Includes shares of our Class B common stock owned by John W. Childs,
entities which are owned or controlled by Mr. Childs or with respect to
which he shares voting power and other investors who may be considered,
together with John W. Childs, to constitute a "group" as that term is
defined in Rule 13d-5 under the Securities Exchange Act of 1934. The number
of shares set forth above includes the 1,875,000 shares subject to the
underwriters' over-allotment option.

(6) Mr. Schmaltz owns 6,605 shares of our Class B common stock. The remainder of
the shares are held by John W. Childs and entities which are owned or
controlled by Mr. Childs or with respect to which he shares voting power.
The number of shares set forth above includes the 1,875,000 shares subject
to the underwriters' over-allotment option.

SELLING SHAREHOLDERS

If the underwriters exercise their over-allotment option in full, the
following shareholders will sell and beneficially own the number of shares
indicated below:

<TABLE>
<CAPTION>
CLASS B COMMON STOCK
CLASS B COMMON AFTER OVER-ALLOTMENT PERCENT OF TOTAL
STOCK TO BE SOLD EXERCISE ECONOMIC INTEREST
THROUGH OVER- ------------------------- -------------------------------
ALLOTMENT EXERCISE NUMBER
---------------------- OF SHARES BEFORE AFTER
NUMBER OF PERCENT OF BENEFICIALLY PERCENT OF OVER-ALLOTMENT OVER-ALLOTMENT
NAME SHARES CLASS OWNED CLASS EXERCISE EXERCISE
- ---- --------- ---------- ------------ ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
John W. Childs(1)....... 1,875,000 2.96% 5,957,523 9.70% 8.52% 6.47%
c/o J.W. Childs Equity
Partners II, L.P.
One Federal St., 21st
Floor
Boston, MA 02110

PERCENT OF TOTAL
VOTING POWER
-------------------------------

BEFORE AFTER
OVER-ALLOTMENT OVER-ALLOTMENT
NAME EXERCISE EXERCISE
- ---- -------------- --------------
<S> <C> <C>
John W. Childs(1)....... 11.28% 9.27%
c/o J.W. Childs Equity
Partners II, L.P.
One Federal St., 21st
Floor
Boston, MA 02110
</TABLE>

- ------------------------------

(1) Includes shares of our Class B common stock owned by John W. Childs,
entities which are owned or controlled by Mr. Childs or with respect to
which he shares voting power and other investors who may be considered,
together with John W. Childs, to constitute a "group" as that term is
defined in Rule 13d-5 under the Securities Exchange Act of 1934.

98
<PAGE>
DESCRIPTION OF CAPITAL STOCK

As of September 30, 1999, our authorized and outstanding capital stock is as
follows:

<TABLE>
<CAPTION>
OTHER
FEATURES
LIQUIDATION EARLIEST RIGHTS,
SHARES SHARES PREFERENCE REDEMPTION PREFERENCES
CLASS AUTHORIZED OUTSTANDING DIVIDENDS PER SHARE DATE AND POWERS
- ----- ---------- ----------- ------------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common Stock
Class A............................. 1,438,000 573,152 As declared -- -- Voting
Class B............................. 31,000 -- As declared -- -- Non-voting
Class C............................. 31,000 -- As declared -- -- Non-voting
--------- -------
1,500,000 573,152
========= =======
Preferred Stock
12 1/4% Senior Exchangeable......... 734,000 278,872 12.25% Cumulative $ 1,000 Jan. 15, 2008 Non-voting
13% Senior Exchangeable............. 500,000 175,402 13% Cumulative $ 1,000 May 1, 2009 Non-voting
Class A............................. 450,000 314,286 5% Non-cumulative $ 70 -- Non-voting
Class D............................. 85,000 75,094 15% Cumulative $1,131.92 Dec. 23, 2010 Convertible
Class E............................. 405,000 -- 15% Cumulative $1,131.92 Dec. 23, 2010 Non-voting
Other............................... 497,000 -- -- -- -- --
--------- -------
2,671,000 843,654
========= =======
</TABLE>

We will complete our capitalization immediately prior to the closing of this
offering. See "Capitalization--The Recapitalization." Following our
recapitalization, and the consummation of this offering and the use of the
proceeds therefrom, our authorized and issued capital stock will be as follows:

<TABLE>
<CAPTION>
OTHER
FEATURES
LIQUIDATION EARLIEST RIGHTS,
SHARES SHARES PREFERENCE REDEMPTION PREFERENCES
CLASS AUTHORIZED ISSUED DIVIDENDS PER SHARE DATE AND POWERS
- ----- ---------- ---------- ----------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common Stock
1 vote per
New Class A........................... 25,000,000 As declared -- -- share
10 votes
per share
New Class B........................... 63,253,088 As declared -- -- Convertible

Preferred Stock
12 1/4% Senior Exchangeable........... 734,000 278,872 12.25% Cumulative $ 1.000 Jan. 15, 2008 Non-voting
13% Senior Exchangeable............... 500,000 175,402 13% Cumulative $ 1.000 May 1, 2009 Non-voting
Other................................. -- -- -- --
</TABLE>

The Class D preferred stock will be retired immediately following its
conversion into Class A common stock and Class E preferred stock. The Class E
preferred stock will be retired immediately following its redemption with
proceeds from this offering.

The following is a summary of the terms of our capital stock which will be
authorized following the closing of this offering and the use of proceeds
therefrom. This summary is qualified in its entirety by the provisions of our
certificate of incorporation and bylaws and to the applicable provisions of
Oklahoma law.

COMMON STOCK

At the closing of this offering, we will be authorized to issue shares
of Class A common stock and shares of Class B common stock. Immediately
after this offering, there will be:

- 25,000,000 shares of Class A common stock issued and outstanding, or
28,750,000 shares if the underwriters exercise their over-allotment option
in full;

99
<PAGE>

- 3,653,672 shares of Class A common stock authorized for issuance upon the
exercise of options granted under our stock option plan;

- 3,069,726 shares of Class A common stock reserved for issuance upon
exercise of future options that may be granted under the plan; and

- 63,253,088 shares of Class B common stock issued and outstanding owned by
35 shareholders.

The rights of holders of the Class A and Class B common stock are identical
in all respects, except as discussed below. All the outstanding shares of
Class A and B common stock are, and the shares of Class A common stock sold in
this offering will be, upon issuance and payment of the purchase price therefor,
validly issued, fully paid and nonassessable.

DIVIDENDS

Subject to the right of the holders of any class of preferred stock, holders
of shares of common stock are entitled to receive dividends that may be declared
by our board of directors out of legally available funds. No dividend may be
declared or paid in cash or property on any share of any class of common stock
unless simultaneously the same dividend is declared or paid on each share of
that and every other class of common stock; provided, that, in the event of
stock dividends, holders of a specific class of common stock shall be entitled
to receive only additional shares of that class.

VOTING RIGHTS

The Class A common stock and the Class B common stock vote together as a
single class on all matters submitted to a vote of shareholders, except as
required by law. Each share of Class A common stock is entitled to one vote and
each share of Class B common stock is entitled to 10 votes, except that each
share of common stock is entitled to one vote with respect to any "going
private" transaction under the Securities Exchange Act of 1934.

LIQUIDATION RIGHTS

Upon our liquidation, dissolution or winding-up, the holders of our common
stock are entitled to share ratably in all assets available for distribution
after payment in full to creditors and holders of our preferred stock, if any.

CONVERSION AND TRANSFERABILITY OF CLASS B COMMON STOCK

Shares of Class B common stock are convertible at any time, at the option of
the holder, into an equal number of fully paid and non-assessable shares of
Class A common stock. All conversion rights of Class B common stock are subject
to any necessary FCC approval. Shares of Class B common stock transferred to a
party other than a controlled affiliate of the transferor will automatically
convert into an equal number of fully paid and non-assessable shares of Class A
common stock.

INVESTORS AGREEMENT

Under an investors agreement, each of John W. Childs and entities which he
owns or controls and their co-investors, AT&T Wireless and the Dobson CC Limited
Partnership have certain demand and "piggy-back" registration rights for the
shares of Class A common stock, including those shares issuable upon sale or
conversion of their Class B common stock. The investors agreement provides that
seven directors will constitute our board of directors. In addition, so long as
John W. Childs and entities which he owns or controls and their co-investors own
at least 35% of the Class B common stock acquired upon conversion of the
pre-recapitalization Class D preferred stock beneficially owned by them as of
April 13, 1999, they will be entitled to designate one director and will be
entitled to have an observer present at all meetings of our board of directors
and any committees of our board of directors. So long as AT&T Wireless
beneficially owns at least 50% of the Class B common stock acquired upon
conversion of the pre-recapitalization Class D preferred stock which it had the
right to

100
<PAGE>

acquire on April 13, 1999, AT&T Wireless will be entitled to designate one
director and will be entitled to have an observer present at all meetings of our
board of directors and any committees of our board of directors. The Dobson CC
Limited Partnership will be entitled to designate four directors, and one
director shall be selected jointly by John W. Childs and entities which he owns
or controls and their co-investors, AT&T Wireless and the Dobson CC Limited
Partnership. Notwithstanding the foregoing, an additional two directors may be
designated by the holders of our 12 1/4% senior preferred stock and an
additional two directors may be designated by the holders of our 13% senior
preferred stock in the event of the non-payment of dividends for certain
periods, a voting rights triggering event.

John W. Childs and entities which he owns or controls and their
co-investors, AT&T Wireless and the Dobson CC Limited Partnership have
preemptive rights with respect to new common stock or securities convertible
into common stock issued by us, excluding securities issued:

- in a public offering,

- upon the exercise of employee stock options, warrants or conversion
rights, or

- in connection with acquisitions, financing capital projects or the
incurrence of indebtedness.

In addition, these parties have tag-along rights with respect to each others'
shares.

OTHER PROVISIONS

The holders of common stock are not entitled to preemptive or similar
rights.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is UMB Bank, n.a.

PREFERRED STOCK

GENERAL

We are authorized to issue shares of preferred stock, par value $.01 per
share. Our board of directors, in its sole discretion, may designate and issue
one or more series of preferred stock from the authorized and unissued shares of
preferred stock.

Subject to limitations imposed by law or our amended and restated
certificate of incorporation, the board of directors is empowered to determine:

- the designation of and the number of shares constituting a series of
preferred stock;

- the dividend rate, if any, for the series;

- the terms and conditions of any voting and conversion rights for the
series, if any;

- the number of directors, if any, which the series shall be entitled to
elect;

- the amounts payable on the series upon our liquidation, dissolution or
winding-up;

- the redemption prices and terms applicable to the series, if any; and

- the preferences and relative rights among the series of preferred stock.

These rights, preferences, privileges and limitations of preferred stock could
adversely affect the rights of holders of common stock.

SENIOR PREFERRED STOCK

12 1/4% SENIOR PREFERRED STOCK

We have issued and outstanding 278,872 shares of our 12 1/4% senior
preferred stock which has a liquidation preference of $1,000 per share plus
accrued and unpaid dividends.

101
<PAGE>
The certificates of designation for our 12 1/4% senior preferred stock
provide for the following rights:

VOTING RIGHTS. The holders of our 12 1/4% senior preferred stock have no
voting rights with respect to general corporate matters except as provided by
law or as set forth in the certificate of designation. The certificates of
designation provide that, upon the occurrence of a voting rights triggering
event, the number of directors constituting our board of directors will be
increased by two directors, whom the holders of 12 1/4% senior preferred stock
will be entitled to elect. Whenever the right of the holders of 12 1/4% senior
preferred stock to elect directors shall cease, the number of directors
constituting the board of directors will be restored to the number of directors
constituting the board of directors prior to the time of the event that entitled
the holders of 12 1/4% senior preferred stock to elect directors.

Under Oklahoma law, the holders of 12 1/4% senior preferred stock will be
entitled to vote as a class upon a proposed amendment to our certificate of
incorporation, whether or not entitled to vote thereon by our certificate of
incorporation, if the amendment would increase or decrease the par value of the
shares of that class, or alter or change the powers, preferences or special
rights of the shares of that class so as to affect them adversely.

DIVIDENDS. The holders of our 12 1/4% senior preferred stock are entitled
to receive cumulative dividends at the annual rate of 12 1/4% of the $1,000 per
share liquidation preference, as and when declared by the board of directors. We
may pay dividends in cash or, on or prior to January 15, 2003, in additional
fully paid and nonassessable shares of senior preferred stock having a
liquidation preference equal to the amount of the dividends.

REDEMPTION. We must redeem the 12 1/4% senior preferred stock on
January 15, 2008, subject to the legal availability of funds therefor, at 100%
of the liquidation preference, plus accrued and unpaid dividends.

At any time and from time to time on or after January 15, 2003, the 12 1/4%
senior preferred stock may be redeemed, in whole or in part, at our option, at a
redemption price expressed as a percentage of the liquidation preference of the
12 1/4% senior preferred stock as set forth below, plus accrued and unpaid
dividends, if such redemption occurs during the 12-month period beginning
January 15 of each of the following years:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003........................................................ 106.125%
2004........................................................ 104.084
2005........................................................ 102.042
2006 and thereafter......................................... 100.000
</TABLE>

Before January 15, 2001, we may redeem up to 35% of the aggregate
liquidation preference amount of the 12 1/4% senior preferred stock at a
redemption price equal to 112.25% of its liquidation preference amount, plus
accrued and unpaid dividends, with net proceeds from a sale of our common stock
if at least 65% of the aggregate liquidation preference amount of the 12 1/4%
senior preferred stock originally issued remains outstanding after any
redemption.

OPTIONAL EXCHANGE. We may exchange the 12 1/4% senior preferred stock in
whole, but not in part, into our senior subordinated exchange debentures.

CHANGE OF CONTROL. Upon a change of control, we must make an offer to
purchase the 12 1/4% senior preferred stock at a purchase price equal to 100% of
the liquidation preference of the 12 1/4% senior preferred stock, plus accrued
and unpaid dividends. A change of control means, with respect to each series of
12 1/4% senior preferred stock, such time as:

- a shareholder becomes the beneficial owner of more than 35% of the total
voting power of our voting stock, on a fully diluted basis, and such
ownership represents a greater percentage of the

102
<PAGE>
total voting power of our voting stock, on a fully diluted basis, than is
held by Everett Dobson and his affiliates on such date, or

- individuals who on the issue date of such 12 1/4% senior preferred stock
constituted the board of directors, together with any new directors whose
election by the board of directors or whose nomination for election by our
stockholders was approved by a vote of at least a majority of the members
of the board of directors then in office who either were members of the
board of directors on the issue date or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the board of directors then in office.

This offering will not result in a change of control under the certificate
of designation of our 12 1/4% senior preferred stock.

RESTRICTIVE COVENANTS. The certificate of designation that governs the
12 1/4% senior preferred stock contains certain restrictive covenants which,
among other things, limit our ability and that of our restricted subsidiaries to
incur additional indebtedness, create liens, pay dividends or make distributions
in respect of their capital stock, make investments or certain other restricted
payments, sell assets, redeem capital stock, issue or sell stock of restricted
subsidiaries, enter into transactions with stockholders or affiliates or effect
a consolidation or merger.

13% SENIOR PREFERRED STOCK

We have issued and outstanding 175,402 shares of our 13% senior preferred
stock which have a liquidation preference of $1,000 per share plus accrued and
unpaid dividends.

The certificate of designation for the 13% senior preferred stock provides
for the following rights:

VOTING RIGHTS. The holders of our 13% senior preferred stock have voting
rights substantially similar to the voting rights provided to the 12 1/4% senior
preferred stock.

DIVIDENDS. The holders of 13% senior preferred stock are entitled to
receive cumulative dividends at the annual rate of 13% of the $1,000 per share
liquidation preference, as and when declared by the board of directors. We may
pay dividends in cash or, on or prior to May 1, 2004, in additional fully paid
and nonassessable shares of 13% senior preferred stock having a liquidation
preference equal to the amount of the dividends.

REDEMPTION. We must redeem the 13% senior preferred stock on May 1, 2009,
subject to the legal availability of funds therefor, at 100% of the liquidation
preference, plus accrued and unpaid dividends.

At any time and from time to time on or after May 1, 2004, we may redeem our
13% senior preferred stock, in whole or in part, at our option, at a redemption
price expressed as a percentage of the liquidation preference of the 13% senior
preferred stock as set forth below, plus accrued and unpaid dividends, if such
redemption occurs during the 12-month period beginning May 1 of each of the
following years:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004........................................................ 106.500%
2005........................................................ 104.333
2006........................................................ 102.167
2007 and thereafter......................................... 100.000
</TABLE>

Before May 1, 2002, we may redeem up to 35% of the aggregate liquidation
preference amount of our 13% senior preferred stock at a redemption rate equal
to 113.00% of its liquidation preference amount, plus accrued and unpaid
dividends, with net proceeds from a sale of our common stock if at least 65% of
the aggregate liquidation preference amount of our 13% senior preferred stock
originally issued remain outstanding after any redemption.

103
<PAGE>
OPTIONAL EXCHANGE. We may exchange our 13% senior exchangeable preferred
stock in whole, but not in part, into our senior subordinated exchange
debentures. Our exchange rights are substantially similar to our exchange rights
with respect to our 12 1/4% senior preferred stock.

CHANGE OF CONTROL. Upon a change of control, which is defined similarly to
the same term used in our 12 1/4% senior preferred stock, we will be required to
make an offer to purchase our outstanding 13% senior preferred stock at a
purchase price equal to 100% of its liquidation preference plus accrued and
unpaid dividends.

FOREIGN OWNERSHIP

Our certificate of incorporation restricts the ownership, voting and
transfer of our capital stock, including our common stock, in accordance with
the Communications Act and the rules of the FCC, which prohibits foreign
nationals or their representatives, a foreign government or its representative,
or any corporation organized under the laws of a foreign country from owning of
record or voting greater than 25% of our equity unless the FCC determines that
the public interest would be served by denying such foreign ownership. In
addition, our certificate authorizes our board of directors to take action to
enforce these prohibitions, including requiring redemptions of common stock to
the extent necessary to reduce aggregate foreign ownership to lawful limits and
placing a legend regarding restrictions on foreign ownership on the certificates
representing the common stock.

OKLAHOMA ANTI-TAKEOVER LAW AND CERTAIN CHARTER PROVISIONS

Our certificate of incorporation and bylaws and the Oklahoma General
Corporation Act include a number of provisions that may have the effect of
encouraging persons considering unsolicited tender offers or other unilateral
takeover proposals to negotiate with our board of directors rather than pursue
non-negotiated takeover attempts. These provisions include a classified board of
directors, authorized blank check preferred stock, restrictions on business
combinations, in certain circumstances the nullification of voting rights of 20%
or more shareholders and the availability of authorized but unissued common
stock.

CLASSIFIED BOARD OF DIRECTORS. Our certificate of incorporation and bylaws
contain provisions for a staggered board of directors with only one-third of the
board standing for election each year. Shareholders may only remove directors
for cause. A staggered board makes it more difficult for stockholders to change
the majority of the directors.

BLANK CHECK PREFERRED STOCK. Our certificate of incorporation authorizes
blank check preferred stock. Our board of directors can set the voting rights,
redemption rights, conversion rights and other rights relating to such preferred
stock and could issue preferred stock in either a private or public transaction.
In some circumstances, the blank check preferred stock could be issued and have
the effect of preventing a merger, tender offer or other takeover attempt which
our board of directors opposes.

Our board of directors has no present intention to issue any new class or
series of preferred stock; however, our board of directors has the authority,
without further shareholder approval, to issue one or more series of preferred
stock that could, depending on the terms of such series, either impede or
facilitate the completion of a merger, tender offer or other takeover attempt.
Although our board of directors is required to make any determination to issue
such stock based on its judgment as to the best interest of our shareholders,
our board of directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority, of the
shareholders might believe to be in their best interests or in which
shareholders might receive a premium for their stock over the then market price
of such stock. Our board of directors does not intend to seek shareholder
approval prior to any issuance of such stock, unless otherwise required by law.

OKLAHOMA TAKEOVER STATUTE. We are subject to Section 1090.3 of the Oklahoma
General Corporation Act. In general, Section 1090.3 prevents an "interested
stockholder" from engaging in a

104
<PAGE>

"business combination" with an Oklahoma corporation for three years following
the date that person became an interested stockholder, unless:

- prior to the date such person became an interested stockholder, our board
of directors approved the transaction in which the interested stockholder
became an interested stockholder or approved the business combination;

- upon consummation of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested
stockholder owns at least 85% of our voting stock outstanding at the time
the transaction commenced, excluding stock held by directors who are also
officers of the corporation and stock held by certain employee stock
plans; or

- on or subsequent to the date of the transaction in which such person
became an interested stockholder, the business combination is approved by
the board of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of two-thirds of the
outstanding voting stock of the corporation not owned by the interested
stockholder.

Section 1090.3 defines a "business combination" to include:

- any merger or consolidation involving the corporation and an interested
stockholder;

- any sale, transfer, pledge or other disposition involving an interested
stockholder of 10% or more of the assets of the corporation;

- subject to certain exceptions, any transaction which results in the
issuance or transfer by the corporation of any stock of the corporation to
an interested stockholder;

- any transaction involving the corporation which has the effect of
increasing the proportionate share of the stock of any class or series of
the corporation beneficially owned by the interested stockholder; or

- the receipt by an interested stockholder of any loans, guarantees, pledges
or other financial benefits provided by or through the corporation.

For purposes of Section 1090.3, the term "corporation" also includes our
majority-owned subsidiaries. In addition, Section 1090.3 defines an "interested
stockholder" as an entity or person beneficially owning 15% or more of our
outstanding voting stock and any entity or person affiliated with or controlling
or controlled by such entity or person.

OKLAHOMA CONTROL SHARE ACT. If we have 1,000 or more shareholders and meet
other conditions, we will be subject to Oklahoma's control share act. With
exceptions, this act prevents holders of more than 20% of the voting power of
our stock from voting their shares. This provision may delay the time it takes
anyone to gain control of us. Holders of our Class B common stock are presently
exempt from the Oklahoma control share act.

STOCKHOLDER ACTION. With respect to any act or action required of or by the
holders of our common stock, the affirmative vote of a majority of the total
combined voting power of all classes of our outstanding common stock, voting
together as a single class, present in person or represented by proxy at a
meeting and entitled to vote thereon is sufficient to authorize, affirm, ratify
or consent to such act or actions, except as otherwise provided by law or in our
certificate of incorporation. The Oklahoma General Corporation Act requires the
approval of the holders of a majority of the total combined voting power of all
classes of our outstanding common stock, voting together as a single class for
certain extraordinary corporate transactions, such as a merger, sale of
substantially all assets, dissolution or amendment of our certificate of
incorporation. Our certificate of incorporation provides for a vote of the
holders of two-thirds of the issued and outstanding stock having voting power,
voting as a single class, to amend, repeal or adopt any provision inconsistent
with the provisions of our certificate of incorporation limiting director
liability and repurchases of our outstanding common stock, and providing for
staggered terms of directors and indemnity for directors. Such vote is also
required for stockholders to amend, repeal or adopt any provisions of our
bylaws.

105
<PAGE>

Pursuant to the Oklahoma General Corporation Act, stockholders may take
actions without the holding of a meeting by written consent if the consent is
signed by the holders of at least the number of shares which would be necessary
to approve the transaction at a duly called shareholder's meeting. If we have
one thousand or more shareholders of record, actions taken by our shareholders
by written consent must be unanimous. Mr. Everett R. Dobson and the other
directors and executive officers as a group will beneficially own shares of
Class B common stock representing approximately 96.2% of the total combined
voting power of all classes of our capital stock entitled to vote, considered as
a single class after the offering. Pursuant to the rules and regulations of the
Securities and Exchange Commission, if stockholder action is taken by written
consent, we will be required to send each stockholder entitled to vote on the
matter acted on, but whose consent was not solicited, an information statement
containing information substantially similar to that which would have been
contained in a proxy statement.

EXCULPATION

Directors and officers shall not be personally liable for monetary damages
(including, without limitation, any judgment, amount paid in settlement,
penalty, punitive damages or expense of any nature (including, without
limitation, attorneys' fees and disbursements)) for any action taken, or any
failure to take any action, unless:

- the director or officer has breached his or her duty of loyalty to the
corporation or its shareholders;

- the breach or failure to perform constitutes an act or omission not in
good faith or which involves intentional misconduct or a knowing violation
of law; or

- for any transaction from which the director or officer derived an improper
personal benefit.

INDEMNIFICATION

To the fullest extent permitted by the Oklahoma General Corporation Act, we
will indemnify any person who was, is, or is threatened to be made, a party to a
proceeding by reason of the fact that he or she:

- is or was our director, officer, employee, or agent; or

- while our director, officer, employee or agent is or was serving at our
request as a director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise.

Any indemnification of our directors, officers or others pursuant to the
foregoing provisions for liabilities arising under the Securities Act of 1933
are, in the opinion of the Securities and Exchange Commission, against public
policy as expressed in the Securities Act of 1933 and are unenforceable.

106
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has not been any public market for our shares
of Class A common stock, and no prediction can be made as to the effect, if any,
that market sales of shares of common stock or the availability of shares of
common stock for sale will have on the market price of our shares of Class A
common stock prevailing from time to time. Nevertheless, sales of substantial
amounts of shares of common stock in the public market, or the perception that
such sales could occur, could adversely affect the market price of our shares of
Class A common stock and could impair our future ability to raise capital
through the sale of our equity securities.

Upon the closing of this offering, we will have an aggregate of 25,000,000
shares of Class A common stock outstanding, or 28,750,000 shares if the
underwriters exercise their over-allotted option in full, and 63,253,088 shares
of Class B common stock outstanding. In addition, 3,653,672 shares of Class A
common stock will be issuable upon exercise of outstanding stock options. The
shares sold in this offering will be freely tradable, except that any shares
held by our "affiliates", as that term is defined in Rule 144 promulgated under
the Securities Act of 1933, may only be sold in compliance with the limitations
described below.

The 25,000,000 shares of Class A common stock and 63,253,088 shares of
Class B common stock outstanding after this offering and held by our affiliates
will be deemed "restricted securities" as defined under Rule 144. Restricted
securities may be sold in the public market only if registered or if they
qualify for an exemption from registration under Rule 144 promulgated under the
Securities Act, which is summarized below. After taking into account the 180-day
lock-up agreements described below and the provisions of Rule 144, additional
shares will be available for sale in the public market:

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE
- ---------------- ---------------------------------------------
<S> <C>
180 days after the date of this prospectus
At various times after 180 days after
the date of this prospectus
</TABLE>

Approximately of the shares of common stock that will become eligible
for resale after the expiration of the 180-day lock-up agreements are held by
affiliates and, therefore, will remain subject to the volume limitations and
other restrictions of Rule 144. See "Risk Factors--Risks Related to This
Offering--Future sales of our Class A common stock would adversely affect its
market price and impede our ability to raise capital through future issuances of
equity securities."

In general, under Rule 144 as currently in effect, a person or persons whose
shares are required to be aggregated, including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period commencing 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of:

- 1% of the then outstanding shares of common stock which, would be
approximately shares immediately after this offering; or

- the average weekly trading volume in the shares of common stock during the
four calendar weeks preceding the date on which notice of such sale is
filed, subject to certain restrictions.

A person who is not deemed to have been an affiliate at any time during the 90
days preceding a sale and who has beneficially owned the shares proposed to be
sold for at least two years would be entitled to sell such shares without regard
to the requirements described above. To the extent that shares were acquired
from an affiliate, the transferee's holding period for the purpose of effecting
a sale under Rule 144 commences on the date of transfer from the affiliate.

All of our directors, officers and shareholders, and our option holders,
have agreed that they will not, without the prior written consent of Lehman
Brothers Inc. and Salomon Smith Barney Inc., sell or

107
<PAGE>
otherwise dispose of any shares of common stock or options to acquire shares of
common stock during the 180-day period following the date of this prospectus.
See "Underwriting."

We intend to file a Form S-8 registration statement under the Securities Act
on or immediately after the date of this prospectus to register all shares of
Class A common stock issuable under our 1996 stock option plan. This
registration statement will automatically become effective upon filing.
Accordingly, shares covered by this registration statement will thereupon be
eligible for sale in the public markets, unless the options are subject to
vesting restrictions or the contractual restrictions described above. See
"Management."

We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of the prospectus, except we
may issue, and grant options to purchase, shares of common stock and we may
offer and sell shares of common stock under our 1996 stock option plan.

Following this offering, in some circumstances and subject to conditions,
holders of our outstanding shares of Class B common stock will have demand
registration rights (subject to the 180-day lock-up arrangement described above)
to require us to register their shares of Class B common stock under the
Securities Act of 1933, and they will have rights to participate in any future
registration of securities by us. See "Description of Capital Stock--Common
Stock--Investors Agreement."

108
<PAGE>
FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal income tax
consequences of the ownership of our Class A common stock, including certain
anticipated U.S. income and estate tax consequences of the ownership and
disposition of our Class A common stock applicable to non-U.S. holders, as
defined below. This discussion does not consider the specific facts and
circumstances that may be relevant to particular holders and does not address
the treatment of holders of Class A common stock under the laws of any state,
local or foreign taxing jurisdiction. This discussion is based on the tax laws
of the U.S., including the Internal Revenue Code, as amended to the date hereof,
existing and proposed regulations thereunder, and administrative and judicial
interpretation thereof, as currently in effect. These laws and interpretations
are subject to change, possibly on a retroactive basis.

YOU SHOULD CONSULT YOUR OWN TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE
FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION, AS WELL AS TO THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS TO WHICH YOU
MAY BE SUBJECT.

GENERAL

We believe that for federal income tax purposes neither we nor any U.S.
holder will recognize any income, gain or loss as a result of the issuance of
our Class A common stock. You are a "U.S holder" for U.S. federal income tax
purposes if you are a beneficial owner of common stock and are:

- a citizen or resident of the U.S.;

- a corporation, partnership or other entity created or organized under the
laws of the U.S. or any state;

- an estate, the income of which is subject to U.S. federal income tax
without regard to its source;

- a trust, if a court within the U.S. is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the
trust; or

- subject to certain exceptions, an individual who is present in the U.S. on
at least 31 days in the current calendar year and for an aggregate of at
least 183 days during a three-year period ending in the current calendar
year, counting for such purposes all of the days present in the current
calendar year, one-third of the days present in the immediately preceding
calendar year, and one-sixth of the days present in the second preceding
year.

CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following discussion summarizes certain U.S. federal income and estate
tax consequences of the ownership and disposition of our Class A common stock by
"non-U.S. holders." You are a "non-U.S. holder" for U.S. federal income tax
purposes if you are:

- a non-resident alien individual;

- a foreign corporation;

- a foreign partnership; or

- an estate or trust that in either case is not subject to U.S. federal
income tax on a net income basis on income or gain from common stock.

DIVIDENDS

If you are a non-U.S. holder of our Class A common stock, dividends paid to
you are subject to withholding of U.S. federal income tax at a 30% rate or at a
lower rate if so specified in an applicable income tax treaty and certain filing
requirements are met. If, however, the dividends are effectively connected with
your conduct of a trade or business within the U.S., and they are attributable
to a permanent establishment that you maintain in the U.S., if that is required
by an applicable income tax treaty as a condition for subjecting you to U.S.
income tax on a net income basis on such dividends,

109
<PAGE>
then these "effectively connected" dividends generally are not subject to
withholding tax provided certain filing requirements are met. Instead, the
effectively connected dividends are taxed at rates applicable to U.S. citizens,
resident aliens and U.S. corporations.

Effectively connected dividends received by a non-U.S. corporation may,
under certain circumstances, be subject to an additional "branch profits tax" at
a 30% rate or at a lower rate if so specified in an applicable income tax
treaty.

Under currently effective U.S. Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of that
country, unless the payor has knowledge to the contrary, for purposes of making
such dividends subject to the 30% withholding tax discussed above. Under current
interpretations of U.S. Treasury regulations, the presumption that dividends
paid to an address in a foreign country are paid to a resident of that country,
unless the payor has knowledge to the contrary, also applies for the purposes of
determining whether a lower tax treaty rate applies.

Under U.S. Treasury regulations, which will generally apply to dividends
paid after December 31, 2000 or the final withholding regulations, if you claim
the benefit of a lower treaty rate, you must satisfy certain certification
requirements. In addition, in the case of Class A common stock held by a foreign
partnership, the certification requirements generally will apply to the partners
of the partnership and the partnership must provide certain information,
including a U.S. taxpayer identification number. The final withholding
regulations also provide look-through rules for tiered partnerships.

If you are eligible for a reduced rate of U.S. withholding tax under a tax
treaty, you may obtain a refund of any excess amounts withheld by filing a
refund claim with the IRS.

GAIN ON DISPOSITION OF CLASS A COMMON STOCK

If you are a non-U.S. holder you generally will not be subject to U.S.
federal income tax on gain recognized on a disposition of our Class A common
stock unless:

- the gain is effectively connected to your conduct of a trade or business
in the U.S. and the gain is attributable to a permanent establishment that
you maintain in the U.S., if that is required by an applicable income tax
treaty as a condition for subjecting you to U.S. taxation on a net income
basis on gain from the sale or other disposition of our Class A common
stock;

- you are an individual, you hold our Class A common stock as a capital
asset and you are present in the U.S. for 183 or more days in the taxable
year of the sale and certain other conditions exist; or

- We are or have been a "United States real property holding corporation"
for federal income tax purposes and you held, directly or indirectly, at
any time during the five-year period ending on the date of disposition,
more than 5% of our common stock and you are not eligible for any treaty
exemption.

Effectively connected gains recognized by a corporate non-U.S. holder may
also, under certain circumstances, be subject to an additional "branch profits
tax" at a 30% rate or at a lower rate if so specified in an applicable income
tax treaty.

We have not been, are not, and do not anticipate becoming a "United States
real property holding corporation" for federal income tax purposes.

FEDERAL ESTATE TAXES

Class A common stock held by a non-U.S. holder at the time of death, or by
certain trusts benefitting the non-U.S. holder as to which no U.S. person has
certain rights or powers will be included in the holder's gross estate for U.S.
federal estate tax purposes, unless an applicable estate tax treaty provides
otherwise.

110
<PAGE>
INFORMATION REPORTING AND BACKUP WITHHOLDING

In general, U.S. information reporting requirements and backup withholding
tax will not apply to dividends paid to you if you are either:

- subject to the 30% withholding tax discussed above;

- not subject to the 30% withholding tax because an applicable tax treaty
reduces or eliminates such withholding tax;

- not subject to the 30% withholding tax discussed above for the reason that
the dividends are effectively connected with your conduct of a trade or
business within the U.S.; or

- not subject to the 30% withholding tax pursuant to U.S. Treasury
Regulations providing relief from undue administrative burden,

although dividend payments to you will be reported for purposes of the
withholding tax. See "--Dividends" above. If you do not meet any of the above
requirements for exemption and you fail to provide certain information,
including your U.S. taxpayer identification number, or otherwise establish your
status as an "exempt recipient," you may be subject to backup withholding of
U.S. federal income tax at a rate of 31% on dividends paid with respect to our
Class A common stock.

Under current law, the payor may generally treat dividends paid to a payee
with a foreign address as exempt from backup withholding and information
reporting unless the payor has definite knowledge that the payee is a U.S.
person. However, under the final withholding regulations, dividend payments
generally will be subject to information reporting and backup withholding unless
certain certification requirements are met. See the discussion under
"--Dividends" for the rules applicable to foreign partnerships under the final
withholding regulations.

U.S. information reporting and backup withholding requirements generally
will not apply to a payment of the proceeds of a sale of common stock made
outside the U.S. through an office outside the U.S. of a non-U.S. broker.
However, U.S. information reporting, but not backup withholding, will apply to a
payment made outside the U.S. of the proceeds of a sale of our Class A common
stock through an office outside the U.S. of a broker that:

- is a U.S person;

- derives 50% or more of its gross income for certain periods from the
conduct of a trade or business in the U.S.;

- is a "controlled foreign corporation" as to the U.S.; or

- with respect to payments made after December 31, 2000, is a foreign
partnership, if at any time during its tax year:

- one or more of its partners are U.S. persons, as defined in the U.S.
Treasury regulation, who in the aggregate hold more than 50% of the
income or capital interest in the partnership; or

- such foreign partnership is engaged in a U.S. trade or business, unless
the broker has documentary evidence in its records that the holder or
beneficial owner is a non-U.S. person or otherwise establishes an
exemption.

Payment of the proceeds of a sale of our Class A common stock to or through
a U.S. office of a broker is subject to both U.S. backup withholding and
information reporting unless the holder certifies its non-U.S. status under
penalty of perjury or otherwise establishes an exemption.

A non-U.S. holder generally may obtain a refund of any excess amounts
withheld under the backup withholding rules by filing a refund claim with the
IRS.

111
<PAGE>
UNDERWRITING

GENERAL

Under the underwriting agreement, which is filed as an exhibit to the
registration statement of which this prospectus is a part, each of the
underwriters named below, for whom Lehman Brothers Inc., Salomon Smith Barney
Inc., Banc of America Securities LLC, Deutsche Bank Securities Inc., Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as
representatives, has agreed to purchase from us the respective number of shares
of Class A common stock shown opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER OF CLASS A COMMON STOCK
- ----------- ------------------------
<S> <C>
Lehman Brothers Inc.......................................
Salomon Smith Barney Inc..................................
Banc of America Securities LLC............................
Deutsche Bank Securities Inc..............................
Goldman, Sachs & Co.......................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated........

-----------------------
Total................................................... 25,000,000
=======================
</TABLE>

The underwriting agreement provides that the underwriters' obligations to
purchase shares of Class A common stock are subject to certain conditions, and
that if any of the foregoing shares of Class A common stock are purchased by the
underwriters pursuant to an underwriting agreement, all of the shares of
Class A common stock that the underwriters have agreed to purchase pursuant to
the underwriting agreement must be so purchased.

COMMISSIONS AND EXPENSES

The representatives have advised us that the underwriters propose to offer
the shares of Class A common stock directly to the public at the public offering
price set forth on the cover page of this prospectus, and to certain selected
dealers, who may include the underwriters, at such public offering price less a
selling concession not in excess of $ per share. The underwriters may allow,
and the selected dealers may reallow, a concession not in excess of $ per
share to certain brokers and dealers. After the offering, the underwriters may
change the offering price and other selling terms.

The following table summarizes the compensation and estimated expenses we
will pay.

<TABLE>
<CAPTION>
TOTAL
-------------------------------
WITHOUT WITH
PER SHARE OVER-ALLOTMENT OVER-ALLOTMENT
--------- -------------- --------------
<S> <C> <C> <C>
Underwriting discounts and commissions.... $ $ $
</TABLE>

112
<PAGE>

Set forth below is an itemization of the total expenses, excluding
underwriting discounts and commissions, that we expect to incur in connection
with the offer and sale of the securities. With the exception of the Securities
Act Registration Fee and NASD fees, all amounts are estimates.

<TABLE>
<S> <C>
Securities Act Registration Fee............................. $166,980
NASD Filing Fee............................................. 30,500
Printing and Engraving Expenses.............................
Legal Fees and Expenses.....................................
Accounting Fees and Expenses................................
Miscellaneous...............................................
--------
Total.....................................................
========
</TABLE>

OVER-ALLOTMENT OPTION

We and John W. Childs and entities which are owned or controlled by Mr.
Childs or with respect to which he shares voting power have each granted to the
underwriters an option to purchase up to an aggregate of 1,875,000 additional
shares of Class A common stock exercisable solely to cover over-allotments, if
any, at the public offering price less the underwriting discounts and
commissions shown on the cover page of this prospectus. Such option may be
exercised at any time, and from time to time, until 30 days after the date of
the underwriting agreement. We will not receive any of the proceeds from the
sale of shares by John W. Childs and entities which are owned or controlled by
Mr. Childs or with respect to which he shares voting power in the over-allotment
option. To the extent that the underwriters exercise this option, each
underwriter will be committed, subject to certain conditions, to purchase a
number of additional shares of Class A common stock proportionate to such
underwriter's initial commitment, as indicated in the preceding table, and we
and the Reselling Shareholders will be obligated, under such over-allotment
option, to sell such shares of Class A common stock to the underwriters.

LOCK-UP AGREEMENTS

We and all of our directors, officers, shareholders and option holders,
holding an aggregate of shares of Class A common stock and
shares of Class B Common Stock have agreed not to offer to sell,
sell or otherwise dispose of directly or indirectly any shares of common stock
during the 180-day period following the date of the prospectus without the prior
written consent of Lehman Brothers Inc. and Salomon Smith Barney Inc., except
that we may grant options to purchase and issue shares of Class A common stock
under our 1996 stock option plan. Lehman Brothers Inc. and Salomon Smith Barney
Inc. have advised us that they do not currently intend to release any shares of
common stock subject to the 180-day lock-up agreements and that the decision
whether to release any of the shares subject to the lock-up agreements in the
future will be based on a number of factors, including, among other things:

- the amount of shares requested to be released;

- the timing of the request;

- the trading price of the shares of Class A common stock;

- the volatility in the trading price of the shares of Class A common stock;
and

- general market conditions.

See "Risk Factors--You will experience immediate and substantial dilution in
the book value of your investment" and "Shares Eligible for Future Sale."

113
<PAGE>

OFFERING PRICE DETERMINATION

Prior to the offering, there has been no public market for the shares of
Class A common stock. The initial public offering price was negotiated between
the representatives and us. In determining the initial public offering price of
the shares of Class A common stock, the representatives considered, among other
things and in addition to prevailing market conditions, our historical
performance and capital structure, estimates of our business potential and
earning prospects, an overall assessment of our management and the consideration
of the above factors in relation to market valuation of companies in related
businesses.

Application has been made to have the shares of Class A common stock
approved for quotation on the Nasdaq National Market under the symbol "DCEL."

INDEMNIFICATION

We have agreed to indemnify the underwriters against liabilities related to
the offering, including liabilities under the Securities Act, and to contribute,
under defined circumstances, to payments that the underwriters may be required
to make in respect thereof.

STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

Until the distribution of the shares of Class A common stock is completed,
rules of the Securities and Exchange Commission may limit the ability of the
underwriters and certain selling group members to bid for and purchase shares of
Class A common stock. As an exception to these rules, the representatives are
permitted to engage in transactions that stabilize the price of shares of
Class A common stock. These transactions may consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the shares of
Class A common stock.

If the underwriters create a short position in the shares of Class A common
stock in connection with the offering (i.e., they sell more shares than are set
forth on the cover page of this prospectus), the representatives may reduce that
short position by purchasing shares of Class A common stock in the open market.
The representatives also may elect to reduce any short position by exercising
all or part of the over-allotment option described herein.

The representatives also may impose a penalty bid on underwriters and
selling group members. This means that if the representatives purchase shares of
Class A common stock in the open market to reduce the underwriters' short
position or to stabilize the price of the shares of Class A common stock, they
may reclaim the amount of the selling concession from the underwriters and
selling group members who sold those shares as part of the offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of those purchases. The
imposition of a penalty bid could have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
an offering.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the shares of Class A common stock. In
addition, neither we nor any of the underwriters makes any representation that
the representatives will engage in these stabilizing transactions or that these
transactions, once commenced, will not be discontinued without notice.

OFFERS AND SALES OUTSIDE THE UNITED STATES

Any offers in Canada will be made only pursuant to an exemption from the
requirements to file a prospectus in the relevant province of Canada in which a
sale is made.

114
<PAGE>
Purchasers of the shares of Class A common stock offered in this prospectus
may be required to pay stamp taxes and other charges under the laws and
practices of the country of purchase, in addition to the offering price listed
on the cover of this prospectus.

DIRECTED SHARE PROGRAM

At our request, the underwriters have reserved up to 5% of the shares of
Class A common stock offered hereby for sale to certain of our employees,
directors and friends at the initial public offering price set forth on the
cover page of this prospectus. These persons must commit to purchase no later
than the close of business on the day following the effective date of the
registration statement, of which this prospectus is a part, and must agree to be
subject to the 180-day lock-up described above. The number of shares available
for sale to the general public will be reduced to the extent these persons
purchase such reserved shares. We have agreed to indemnify the underwriters
against certain liabilities and expenses, including liabilities under the
Securities Act of 1933 in connection with sales of directed shares.

OTHER COMMERCIAL BANKING AND INVESTMENT BANKING TRANSACTIONS

In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and in the future may engage, in commercial
banking and investment banking transactions with us and our affiliates.

Lehman Brothers Inc. has provided investment banking, financial advisory and
other services to us, for which services Lehman Brothers Inc. has received
customary fees. Lehman has acted for us as follows:

- Lehman Brothers Inc. is acting as our financial advisor in connection with
the pending acquisition of American Cellular;

- Lehman Brothers Inc. is acting as the dealer manager in the tender offer
and consent solicitation for our 11 3/4% senior notes;

- Lehman Brothers Inc. is acting as our financial advisor in connection with
the spin-off of our Logix subsidiary;

- Lehman Commercial Paper Inc., an affiliate of Lehman Brothers Inc., is a
lender under our new credit facility and the credit facility for our joint
venture with AT&T Wireless;

- Lehman Brothers Inc. acted as the exclusive initial purchaser in
connection with the sale of our 13% senior preferred stock in May 1999;

- Lehman Brothers Inc. acted as an initial purchaser in connection with the
sale of the Dobson/ Sygnet 12 1/4% senior notes in December 1998; and

- Lehman Commercial Paper Inc. acted as the managing agent and is a lender
under the Dobson/ Sygnet credit facility in December 1998.

Banc of America Securities LLC has provided commercial and investment
banking services to us, for which services they have received customary fees.
Banc of America Securities LLC has acted for us as follows:

- Banc of America Securities LLC is acting as sole dealer manager in the
tender offer and consent solicitation for American Cellular's 10 1/2%
senior notes;

- Banc of America Securities LLC is acting as sole lead arranger for our new
credit facility and the credit facility for our joint venture with AT&T
Wireless and Bank of America, N.A., an affiliate of Banc of America
Securities LLC, is a lender under those facilities;

115
<PAGE>

- Banc of America Securities LLC acted as the sole lead arranger for the
Dobson CC Limited Partnership's credit facilities in December 1999 and
Bank of America, N.A. is a lender under those facilities;

- Banc of America Securities LLC acted as the sole lead arranger for the
Dobson CC Limited Partnership's credit facility in October 1999 and Bank
of America, N.A. is a lender under that facility;

- Banc of America Securities LLC acted as the sole lead arranger for our
Logix credit facility in May 1999 and Bank of America, N.A. is a lender
under that facility;

- Banc of America Securities LLC acted as arranging agent for our Dobson
Operating Company and Dobson Cellular Operations Company credit facilities
in December 1998 and Bank of America, N.A. is a lender under those
facilities;

- Banc of America Securities LLC acted as lead arranger for our
Dobson/Sygnet credit facility in December 1998 and Bank of America, N.A.
is a lender under that facility;

- Banc of America Securities LLC acted as lead manager in connection with
the sale of our Dobson/Sygnet 12 1/4% senior notes in December 1998;

- Banc of America Securities LLC acted as sole manager in connection with
the sale of our 12 1/4% senior preferred stock in December 1998;

- Banc of America Securities LLC acted as sole dealer manager in the tender
offer and consent solicitation for Sygnet's 11 1/2% senior notes in
December 1998;

- Banc of America Securities LLC acted as co-manager in connection with the
sale of our Logix 12 1/4% senior notes in June 1998; and

- Banc of America Securities LLC acted as co-manager in connection with the
sale of our 12 1/4% senior preferred stock in January 1998.

In the event the Dobson CC Limited Partnership fails to be the outstanding
balances under its three credit facilities described above, Bank of America,
N.A. may require the partnership to issue it warrants to purchase shares of our
Class A Common Stock held by the partnership. In no event will the Dobson CC
Limited Partnership issue warrants to Bank of America, N.A. for the purchase of
10% or more of our outstanding common stock.

In February 1999, Alex. Brown & Sons Incorporated, a predecessor to Deutsche
Bank Securities Inc., acted as a co-manager in connection with the sale of our
11 3/4% senior notes due 2007.

In July 1999 American Cellular engaged Merrill Lynch, Pierce, Fenner & Smith
Incorporated as its financial advisor to assist the company in analyzing,
structuring, negotiating and effecting a proposed business combination between
American Cellular and other interested parties. American Cellular is obligated
to pay customary fees for these services upon the occurrence of certain events
and the consummation of a business combination involving the company. In
addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as a
co-manager in connection with the sale of our 12 1/4% senior preferred stock in
January 1998.

LEGAL MATTERS

Certain legal matters with respect to the validity of the Class A common
stock offered hereby are being passed upon for us by McAfee & Taft A
Professional Corporation, Oklahoma City, Oklahoma. Weil, Gotshal & Manges LLP,
New York, New York, has represented the underwriters in connection with this
offering.

116
<PAGE>
EXPERTS

The consolidated balance sheets of Dobson Communications Corporation and its
subsidiaries as of December 31, 1997, December 31, 1998 and September 30, 1999,
and the related consolidated statements of operations, stockholders' deficit and
cash flows for each of the three years in the period ended December 31, 1998 and
for the nine months ended September 30, 1999 included in this prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.

Ernst & Young LLP, independent auditors, have audited the following
financial statements. We have included these financial statements in this
prospectus in reliance on Ernst & Young LLP's reports, given on their authority
as experts in accounting and auditing.

- The consolidated financial statements of Sygnet Wireless, Inc. for the
years ended December 31, 1996 and December 31, 1997 and for the period
from January 1, 1998 through December 23, 1998.

- The consolidated financial statements of American Cellular Corporation and
subsidiaries at December 31, 1998 and September 30, 1999, and for the
period from February 26, 1998 to December 31, 1998 and the nine months
ended September 30, 1999.

- The consolidated financial statements of PriCellular Corporation and
subsidiaries at December 31, 1997 and June 30, 1998, and for the years
ended December 31, 1996 and December 31, 1997 and for the six months ended
June 30, 1998.

117
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement under the Securities Act with respect
to the sale of the Class A common stock offered by this prospectus.

The registration statement, including the attached exhibits and schedules,
that we filed with the Securities and Exchange Commission contains additional
information about us and our common stock. The rules and regulations of the
Securities and Exchange Commission allow us to omit certain information included
in the registration statement from this prospectus.

In addition, we file reports and other information with the Commission under
the Securities Exchange Act of 1934. You may read and copy this information at
the following locations of the Commission:

<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>

You may also obtain copies of this information by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. Further information on the
operation of the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. can be obtained by calling the Securities and Exchange
Commission at 1-800-SEC-0330.

The Securities and Exchange Commission also maintains an Internet world wide
web site that contains reports, proxy statements and other information about
issuers, such as us, who file electronically with the Securities and Exchange
Commission. The address of that site is http:\\www.sec.gov.

You should rely only on the information contained in this prospectus. We
have not authorized anyone to give any information or make any representation
about us or this offering that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated into this document. Therefore, if anyone does give you information
of this sort, you should not rely on it. If you are in a jurisdiction where
offers to sell, or solicitations of offers to buy, the securities offered by
this document are unlawful, or if you are a person to whom it is unlawful to
direct these types of activities, then the offer presented in this document does
not extend to you.

118
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Report of independent public accountants.................. F-3
Consolidated balance sheets as of December 31, 1997 and
1998.................................................... F-4
Consolidated statements of operations for the years ended
December 31, 1996, 1997
and 1998................................................ F-6
Consolidated statements of stockholders' deficit for
the years ended December 31, 1996, 1997 and 1998........ F-8
Consolidated statements of cash flows for the years ended
December 31, 1996, 1997 and 1998........................ F-9
Notes to consolidated financial statements................ F-11
Report of independent public accountants.................. F-29
Consolidated balance sheet as of September 30, 1999....... F-30
Consolidated statements of operations for the nine months
ended September 30, 1998 (unaudited) and 1999........... F-32
Consolidated statement of stockholders' deficit for the
nine months ended September 30, 1999.................... F-33
Consolidated statements of cash flows for the nine months
ended September 30, 1998 (unaudited) and 1999........... F-34
Notes to consolidated financial statements................ F-36

SYGNET WIRELESS, INC.
Report of independent auditors............................ F-52
Consolidated statements of operations for the years ended
December 31, 1996 and 1997 and for the period from
January 1, 1998 to December 23, 1998.................... F-53
Consolidated statements of shareholders' equity (deficit)
for the years ended December 31, 1996 and 1997 and for
the period from January 1, 1998 to December 23, 1998.... F-54
Consolidated statements of cash flows for the years ended
December 31, 1996 and 1997 and for the period from
January 1, 1998 to December 23, 1998.................... F-55
Notes to consolidated financial statements................ F-56

AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES
Report of independent auditors............................ F-64
Consolidated balance sheets as of December 31, 1998 and
September 30, 1999...................................... F-65
Consolidated statements of operations for the period from
February 26, 1998 to December 31, 1998 and
September 30, 1998 (unaudited) and for the nine months
ended September 30, 1999................................ F-67
Consolidated statements of stockholders' equity for the
period from February 26, 1998 to December 31, 1998 and
for the nine months ended September 30, 1999............ F-68
Consolidated statements of cash flows for the period from
February 26, 1998 to December 31, 1998 and
September 30, 1998 (unaudited) and for the nine months
ended September 30, 1999................................ F-69
Notes to consolidated financial statements................ F-70
</TABLE>

F-1
<PAGE>

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PRICELLULAR CORPORATION AND SUBSIDIARIES (THE PREDECESSOR
COMPANY)
Report of independent auditors............................ F-84
Consolidated balance sheets as of December 31, 1997 and
June 30, 1998........................................... F-85
Consolidated statements of operations for the years ended
December 31, 1996 and 1997 and for the six months ended
June 30, 1998........................................... F-86
Consolidated statements of stockholders' equity for the
years ended December 31, 1996 and 1997 and for the six
months ended June 30, 1998.............................. F-87
Consolidated statements of cash flows for the years ended
December 31, 1996 and 1997 and for the six months ended
June 30, 1998........................................... F-88
Notes to consolidated financial statements................ F-90
</TABLE>

F-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Dobson Communications Corporation:

We have audited the accompanying consolidated balance sheets of Dobson
Communications Corporation (an Oklahoma corporation) and subsidiaries as of
December 31, 1997 and 1998, and the related consolidated statements of
operations, stockholders' deficit and cash flows for each of the three years in
the period ended December 31, 1998. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Dobson Communications Corporation and subsidiaries as of December 31, 1997 and
1998, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Oklahoma City, Oklahoma,
December 20, 1999

F-3
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1997 AND 1998

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 2,752,399 $ 22,323,734
Accounts receivable--
Due from customers, net of allowance for doubtful
accounts of $632,661 and $2,043,200 in 1997 and 1998,
respectively.......................................... 14,003,688 43,299,568
Affiliates.............................................. 633,146 --
Restricted cash and investments........................... 17,561,231 30,074,946
Inventory................................................. 1,229,420 5,158,512
Prepaid expenses and other................................ 2,384,683 2,026,538
Deferred income taxes..................................... 214,000 1,404,000
------------ --------------
Total current assets.................................... 38,778,567 104,287,298
------------ --------------
PROPERTY, PLANT AND EQUIPMENT, net.......................... 52,373,866 173,054,329
------------ --------------
OTHER ASSETS:
Receivables--Affiliates................................... 529,107 227,990
Notes receivable--Affiliates.............................. 5,852,282 7,047,272
Restricted investments.................................... 9,216,202 45,505,020
Cellular license acquisition costs, net of accumulated
amortization of $13,814,229 and $43,879,184 in 1997 and
1998, respectively...................................... 206,694,474 1,250,790,448
Deferred financing costs, net of accumulated amortization
of $2,628,777 and $2,511,661 in 1997 and 1998,
respectively............................................ 9,884,308 66,640,301
Other intangibles, net of accumulated amortization of
$851,107 and $2,071,047 in 1997 and 1998,
respectively............................................ 9,328,031 52,795,841
Investments in unconsolidated subsidiaries and other...... 6,911,002 3,078,134
Net assets of discontinued operations..................... 20,077,167 --
------------ --------------
Total other assets...................................... 268,492,573 1,426,085,006
------------ --------------
Total assets............................................ $359,645,006 $1,703,426,633
============ ==============
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

DECEMBER 31, 1997 AND 1998

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable.......................................... $ 11,708,420 $ 47,536,672
Accrued expenses.......................................... 7,641,021 14,222,306
Notes payable............................................. -- 17,500,000
Deferred revenue and customer deposits.................... 1,979,508 5,738,381
Current portion of long-term debt......................... -- 198,871
Accrued dividends payable................................. 1,595,238 5,603,856
------------ --------------
Total current liabilities............................... 22,924,187 90,800,086
------------ --------------
Net liabilities of discontinued operations.................. -- 7,033,166
Payables--affiliates........................................ 8,206,935 5,011,438
Long-term debt, net of current portion...................... 335,570,059 1,103,857,333
Deferred Tax Liabilities.................................... 1,039,000 245,630,000
Minority Interests.......................................... 16,954,165 26,557,203
Commitments (Note 14)
Senior Exchangeable Preferred Stock, net.................... -- 241,320,000
Class B Convertible Preferred Stock......................... 10,000,000 --
Class C Preferred Stock..................................... 1,623,329 --
Class D Convertible Preferred Stock......................... -- 85,000,000
Class F Preferred Stock..................................... -- 30,000,000
Class G Preferred Stock..................................... -- 25,000,000
STOCKHOLDERS' DEFICIT:
Class A preferred stock................................... 100,000 314,286
Class A common stock, $.001 par value, 1,438,000 shares
authorized and 473,152 issued in 1997 and 573,152 issued
in 1998................................................. 473 573
Paid-in capital........................................... 5,980,964 18,298,072
Retained deficit.......................................... (42,754,106) (119,269,863)
------------ --------------
(36,672,669) (100,656,932)
------------ --------------
Less--
Stock held in treasury (81,198 shares of Class A common
stock and 314,296 shares of Class A preferred stock), at
cost.................................................... -- (56,125,661)
------------ --------------
Total stockholders' deficit............................. (36,672,669) (156,782,593)
------------ --------------
Total liabilities and stockholders' deficit............. $359,645,006 $1,703,426,633
============ ==============
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-5
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
OPERATING REVENUE:
Service revenue.................................... $17,593,317 $ 38,410,263 $ 69,402,405
Roaming revenue.................................... 7,852,532 26,262,370 66,479,068
Equipment sales.................................... 661,632 1,455,088 4,129,633
Other.............................................. 831,802 586,206 24,283
----------- ------------ ------------

Total operating revenue.......................... 26,939,283 66,713,927 140,035,389
----------- ------------ ------------

OPERATING EXPENSES:
Cost of service.................................... 6,118,734 16,430,603 33,267,093
Cost of equipment.................................. 2,571,531 4,045,500 8,359,739
Marketing and selling.............................. 4,462,227 10,669,485 22,392,927
General and administrative......................... 3,901,631 11,555,355 26,051,564
Depreciation and amortization...................... 5,241,446 16,797,780 47,109,937
----------- ------------ ------------

Total operating expenses......................... 22,295,569 59,498,723 137,181,260
----------- ------------ ------------

OPERATING INCOME..................................... 4,643,714 7,215,204 2,854,129
----------- ------------ ------------

INTEREST EXPENSE..................................... (4,283,482) (27,639,739) (38,978,898)

OTHER INCOME (EXPENSE), net.......................... (1,502,776) 2,776,730 3,858,290
----------- ------------ ------------

LOSS BEFORE MINORITY INTERESTS IN INCOME OF
SUBSIDIARIES, INCOME TAXES AND EXTRAORDINARY
ITEMS.............................................. (1,142,544) (17,647,805) (32,266,479)

MINORITY INTERESTS IN INCOME OF SUBSIDIARIES......... (675,098) (1,693,372) (2,487,441)
----------- ------------ ------------

LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS..... (1,817,642) (19,341,177) (34,753,920)

INCOME TAX BENEFIT................................... 593,307 3,624,610 11,469,000
----------- ------------ ------------

LOSS FROM CONTINUING OPERATIONS...................... (1,224,335) (15,716,567) (23,284,920)

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of
income tax expense (benefit) of $182,512 in 1996,
$470,170 in 1997 and $(13,352,877) in 1998
(Note 3)........................................... 331,058 332,141 (27,110,387)
----------- ------------ ------------

LOSS BEFORE EXTRAORDINARY ITEMS...................... (893,277) (15,384,426) (50,395,307)
</TABLE>

F-6
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
EXTRAORDINARY EXPENSE, net of income tax benefit of
$323,205 in 1996, $827,210 in 1997 and $1,149,000
in 1998 (Note 6)................................... $ (527,334) $ (1,349,659) $ (2,165,439)
----------- ------------ ------------

NET LOSS............................................. (1,420,611) (16,734,085) (52,560,746)

DIVIDENDS ON PREFERRED STOCK......................... (849,137) (2,603,362) (23,955,011)
----------- ------------ ------------

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS........... $(2,269,748) $(19,337,447) $(76,515,757)
=========== ============ ============

BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDERS PER
COMMON SHARE:
Before discontinued operations and extraordinary
expense.......................................... (4.38) (38.72) (99.75)
Discontinued operations............................ .70 .70 (57.25)
Extraordinary expense.............................. (1.12) (2.85) (4.57)
----------- ------------ ------------

BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDERS PER
COMMON SHARE....................................... $ (4.80) $ (40.87) $ (161.57)
=========== ============ ============

BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING..... 473,152 473,152 473,564
=========== ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-7
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS B STOCK OWNED BY
PREFERRED STOCK COMMON STOCK COMMON STOCK SUBSIDIARY
------------------- ------------------- ------------------- ------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
-------- -------- -------- -------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1995......... -- $ -- 300 $ 1,000 1,000 $ 1,000 1,000 $ (1,000) $ 5,980,437
Net loss................ -- -- -- -- -- -- -- -- --
Recapitalization
(Note 8).............. -- -- 472,852 (527) (1,000) (1,000) (1,000) 1,000 527
Cash dividends declared
on preferred stock.... -- -- -- -- -- -- -- -- --
Cash dividends declared
on common stock....... -- -- -- -- -- -- -- -- --
------- -------- ------- -------- ------- -------- ------- -------- -----------
DECEMBER 31, 1996......... -- -- 473,152 473 -- -- -- -- 5,980,964
Net loss................ -- -- -- -- -- -- -- -- --
Cash dividends declared
on preferred stock.... -- -- -- -- -- -- -- -- --
Cash dividends declared
on common stock....... -- -- -- -- -- -- -- -- --
Preferred stock
dividend.............. -- -- -- -- -- -- -- -- --
Issuance of preferred
stock................. 100,000 100,000 -- -- -- -- -- -- --
------- -------- ------- -------- ------- -------- ------- -------- -----------
DECEMBER 31, 1997......... 100,000 100,000 473,152 473 -- -- -- -- 5,980,964
Net loss................ -- -- -- -- -- -- -- -- --
Conversion of Class B
Preferred Stock....... -- -- 100,000 100 -- -- -- -- 12,531,394
Purchase of treasury
stock, at cost........ -- -- -- -- -- -- -- -- --
Issuance of preferred
stock................. 214,286 214,286 -- -- -- -- -- -- (214,286)
Preferred stock
dividend.............. -- -- -- -- --
------- -------- ------- -------- ------- -------- ------- -------- -----------
DECEMBER 31, 1998......... 314,286 $314,286 573,152 $ 573 -- $ -- -- $ -- $18,298,072
======= ======== ======= ======== ======= ======== ======= ======== ===========

TREASURY RETAINED
STOCK, AT EARNINGS
COST (DEFICIT)
------------ -------------
<S> <C> <C>
DECEMBER 31, 1995......... $(11,913,000) $ (1,040,000)
Net loss................ -- (1,420,611)
Recapitalization
(Note 8).............. 11,913,000 (11,913,000)
Cash dividends declared
on preferred stock.... -- (849,137)
Cash dividends declared
on common stock....... -- (560,291)
------------ -------------
DECEMBER 31, 1996......... -- (15,783,039)
Net loss................ -- (16,734,085)
Cash dividends declared
on preferred stock.... -- (980,033)
Cash dividends declared
on common stock....... -- (7,633,620)
Preferred stock
dividend.............. -- (1,623,329)
Issuance of preferred
stock................. -- --
------------ -------------
DECEMBER 31, 1997......... -- (42,754,106)
Net loss................ -- (52,560,746)
Conversion of Class B
Preferred Stock....... -- --
Purchase of treasury
stock, at cost........ (56,125,661) --
Issuance of preferred
stock................. -- --
Preferred stock
dividend.............. -- (23,955,011)
------------ -------------
DECEMBER 31, 1998......... $(56,125,661) $(119,269,863)
============ =============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-8
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
1996 1997 1998
------------- ------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations............. $ (1,751,669) $ (17,066,226) $(25,450,359)
Adjustments to reconcile net loss to net cash
provided by operating activities--
Depreciation and amortization................. 5,241,446 16,797,780 47,109,937
Deferred income taxes and investment tax
credits, net................................ (97,287) (4,108,699) (14,677,558)
Loss on disposition of assets, net............ 1,799,570 205,694 158,067
Extraordinary loss on financing cost.......... 850,539 2,176,867 3,314,439
Minority interests in income of
subsidiaries................................ 675,098 1,693,372 2,487,441
Equity in income of unconsolidated
partnerships................................ (125,000) (140,227) (283,798)
Changes in current assets and liabilities--
Accounts receivable........................... (1,089,370) (7,279,109) (8,358,070)
Inventory..................................... (546,907) (143,890) (860,921)
Income taxes receivable....................... (1,133,063) 288,063 845,000
Prepaid expenses and other.................... 26,518 (1,422,629) 418,482
Accounts payable.............................. 1,310,062 8,656,849 30,206,977
Accrued expenses.............................. (50,933) 6,459,876 (7,888,703)
Deferred revenue and customer deposits........ 129,699 789,889 1,003,412
------------- ------------- ------------
Net cash provided by operating activities... 5,238,703 6,907,610 28,024,346
------------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................ (13,535,759) (17,773,118) (55,288,571)
Purchase of cellular license and properties..... (30,000,000) (190,719,765) (945,420,000)
Proceeds from sale of property, plant and
equipment..................................... 377,178 332,331 12,600
Proceeds from sale of investment in
unconsolidated subsidiary..................... 967,000 -- --
(Increase) decrease in deposits................. (1,350,000) 1,583,706 (149,379)
Decrease in receivable--affiliate............... 953,736 (2,537,600) 301,117
Decrease in payable--affiliate.................. -- -- (3,195,497)
Increase in notes receivable.................... (1,004,435) (2,585,517) (1,194,990)
Deferred costs.................................. 124,739 -- --
Investment in unconsolidated subsidiaries and
other, net.................................... (426,811) (5,940,344) 5,871,788
------------- ------------- ------------
Net cash used in investing activities....... (43,894,352) (217,640,307) (999,062,932)
------------- ------------- ------------
</TABLE>

F-9
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
1996 1997 1998
------------- ------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable..................... $ -- $ -- $ 17,500,000
Proceeds from long-term debt.................... 63,738,694 343,500,000 940,000,000
Repayments of long-term debt.................... (24,318,859) (87,171,765) (171,513,855)
Dividend distributions--
Preferred stock................................. (176,748) (117,186) --
Common stock...................................... (549,564) (7,633,620) --
Distributions to partners....................... (145,005) (458,378) (911,223)
Issuance of preferred stock..................... 10,000,000 -- 340,000,000
Purchase of treasury stock...................... (5,913,000) -- (31,125,661)
Minority interest in Dobson Tower Company....... -- -- 7,718,750
Purchase of restricted investments.............. -- (38,389,299) (67,733,293)
Maturities of restricted investments............ -- 10,836,243 17,483,654
Deferred financing costs........................ (3,731,741) (9,725,288) (62,038,663)
Amortization of deferred financing costs and
bond premium.................................. -- 1,663,818 1,230,212
------------- ------------- ------------
Net cash provided by financing activities... 38,903,777 212,504,525 990,609,921
------------- ------------- ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS......... 248,128 1,771,828 19,571,335
CASH AND CASH EQUIVALENTS, beginning of year...... 732,443 980,571 2,752,399
------------- ------------- ------------
CASH AND CASH EQUIVALENTS, end of year............ $ 980,571 $ 2,752,399 $ 22,323,734
============= ============= ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for--
Interest (net of amounts capitalized)......... $ 5,055,749 $ 19,858,250 $ 39,113,948
Income taxes.................................. $ 463,100 $ -- $ --
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Issuance of Class G Preferred Stock for the
purchase of treasury stock.................... $ -- $ -- $ 25,000,000
Conversion of Class B Preferred Stock........... $ -- $ -- $ 12,531,394
Purchase of PCS licenses with debt issuance..... $ -- $ 4,056,204 $ --
Allocation of noncash purchase price to license
cost.......................................... $ -- $ 3,747,000 $ --
Stock dividend paid through the issuance of
preferred stock............................... $ -- $ 1,623,329 $ 16,320,000
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-10
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION:

Dobson Communications Corporation ("DCC" or the "Company"), through its
predecessors, was organized in 1936 as Dobson Telephone Company and adopted its
current organizational structure in 1998. The Company is a provider of rural and
suburban cellular telephone services.

1997 REORGANIZATION

DCC was incorporated as an Oklahoma corporation in February 1997. Under an
Agreement and Plan of Reorganization effective February 28, 1997 ("1997
Reorganization"), DCC acquired all of the outstanding Class A Common Stock,
Class C Common Stock and Class B Convertible Preferred Stock of Dobson Operating
Company ("DOC"). In exchange, the holders of the Class A Common Stock and
Class B Convertible Preferred Stock of DOC received equivalent shares of stock
of DCC. The holders of Class C Common Stock received 100,000 shares of Class A
Preferred Stock of DCC. In addition, DCC assumed all DOC outstanding stock
options, substituting shares of DCC Class B Common Stock for the DOC stock
subject to options. As a result of the 1997 Reorganization, DCC became the
parent company of DOC and the stock of certain subsidiaries of DOC was
distributed to DCC.

1998 REORGANIZATIONS

In conjunction with the January 1998 issuance of 175,000 shares of 12.25%
Senior Exchangeable Preferred Stock mandatorily redeemable in 2008 (see
Note 6), the Company formed three new subsidiaries: Dobson Cellular Operating
Company ("DCOC"), DOC Cellular Subsidiary Company ("DOC Cellular Subsidiary")
and Logix Communications Enterprises, Inc. ("Logix"), formerly named Dobson
Wireline Company (collectively, the "January 1998 Reorganization"). DCOC was
created as the holding company for subsidiaries formed to effect certain
cellular acquisitions. DCOC has been designated an unrestricted subsidiary under
the Senior Note Indenture which covers the DCC Senior Notes discussed in
Note 6. DOC Cellular Subsidiary was created as the holding company for the then
existing cellular subsidiaries. Logix was created as the holding company for the
Company's incumbent local exchange carrier ("ILEC"), fiber and integrated
communications provider ("ICP") operations. Logix was designated an unrestricted
subsidiary under the Senior Note Indenture and the Certificate of Designation
establishing the Senior Exchangeable Preferred Stock.

On September 30, 1998, the Company adopted a plan to spin off Logix as
discussed in Note 3 (the "September 1998 Reorganization").

In conjunction with the December 1998 acquisition of Sygnet Wireless, Inc.
("Sygnet Acquisition"), the Company formed a new subsidiary, Dobson/Sygnet
Communications Company ("Dobson/Sygnet") (the "December 1998 Reorganization").
Dobson/Sygnet was created as the holding company for the subsidiaries acquired
in the Sygnet Acquisition. Collectively, the January 1998 Reorganization, the
September 1998 Reorganization and the December 1998 Reorganization are known as
the "1998 Reorganizations."

CAPITAL RESOURCES AND GROWTH

The Company's total indebtedness and debt service requirements have
substantially increased as a result of the transactions described in Note 9 and
the Company will be subject to significant financial restrictions and
limitations. If the Company is unable to satisfy any of the covenants under the
credit facilities described in Note 6, including financial covenants, the
Company will be unable to borrow

F-11
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. ORGANIZATION: (CONTINUED)

under the credit facilities during such time period to fund planned capital
expenditures, its ongoing operations or other permissible uses.

The Company's ability to manage future growth will depend upon its ability
to monitor operations, control costs, maintain effective quality controls and
significantly expand the Company's internal management, technical and accounting
systems, all of which will result in higher operating expenses. Any failure to
expand these areas and to implement and improve such systems, procedures and
controls in an efficient manner at a pace consistent with the growth of the
Company's business could have a material adverse effect on the Company's
business, financial condition and results of operations.

2. SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include the accounts of
all majority owned subsidiaries. For financial reporting purposes, the Company
reports 100% of revenues and expenses for the markets for which it provides
cellular telecommunications service. However, in several of its markets, the
Company holds less than 100% of the equity ownership. The minority stockholders'
and partners' shares of income or losses in those markets are reflected in the
consolidated statements of operations as minority interests in income of
subsidiaries. For financial reporting purposes, the Company consolidates each
subsidiary and partnership in which it has a controlling interest (greater than
50%). Significant intercompany accounts and transactions have been eliminated.
Investments in unconsolidated partnerships where the Company does not have a
controlling interest are accounted for under the equity method.

The Company is responsible for managing and providing administrative
services for certain partnerships of which the Company is the majority partner.
The Company is accountable to the partners and shareholders for the execution
and compliance with contracts and agreements and for filing of instruments
required by law which are made on behalf of these partnerships and corporation.
The books and records of these partnerships and corporation are also maintained
by the Company.

BUSINESS SEGMENT

The Company operates in one business segment pursuant to Statement of
Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an
Enterprise and Related Information."

CASH AND CASH EQUIVALENTS

Cash and cash equivalents on the accompanying consolidated balance sheets
includes cash and short-term investments with original maturities of three
months or less.

INVENTORY

The Company values its inventory at the lower of cost or market on the
first-in, first-out method of accounting.

F-12
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company assesses potential impairments of long-lived assets, certain
identifiable intangibles and goodwill when there is evidence that events or
changes in circumstances indicate that an asset's carrying value may not be
recoverable. An impairment loss is recognized when the sum of the expected
future net cash flows is less than the carrying amount of the asset, including
intangible assets. The amount of any recognized impairment would be based on the
estimated fair value of the asset subject to impairment compared to the carrying
amount of such asset. The fair value of intangible assets will be determined
based on the discounted cash flows of the market or markets to which the
intangible assets relate. No such losses have been identified by the Company.

CELLULAR LICENSE ACQUISITION COSTS

Cellular license acquisition costs consist of amounts paid to acquire FCC
licenses to provide cellular services. Cellular license acquisition costs are
being amortized on a straight-line basis over fifteen years. Amortization
expense of $1,596,794, $10,528,125 and $30,064,955 was recorded in 1996, 1997
and 1998, respectively.

DEFERRED COSTS

Deferred costs consist primarily of fees incurred to secure long-term debt.
Deferred financing costs are being amortized on a straight-line basis over the
term of the debt of eight to ten years. Amortization expense related to these
costs of $401,871, $1,074,845 and $1,965,461 was recorded in 1996, 1997 and
1998, respectively.

OTHER INTANGIBLES

Other intangibles consist of amounts paid to acquire FCC licenses to provide
PCS service and amounts paid to acquire cellular customer lists. PCS license
acquisition costs are not being amortized until the Company's PCS service
becomes operational. Customer list acquisition costs are being amortized on a
straight-line basis over five years. Amortization expense of $0, $851,107 and
$1,219,940 was recorded in 1996, 1997 and 1998, respectively.

ADVERTISING COSTS

Advertising costs are expensed as incurred and are included as marketing and
selling expenses in the accompanying consolidated statements of operations.

INCOME TAXES

The Company files a consolidated income tax return. Income taxes are
allocated among the various entities included in the consolidated tax return, as
agreed, based on the ratio of each entity's taxable income (loss) to
consolidated taxable income (loss). Deferred income taxes reflect the estimated
future tax effects of differences between financial statement and tax bases of
assets and liabilities at year end.

F-13
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

REVENUE RECOGNITION

The Company records service revenues over the period they are earned. The
cost of providing service is recognized as incurred. Airtime and toll revenue is
billed in arrears. The Company accrued estimated unbilled revenues for services
provided of approximately $1,209,000 and $3,445,000 as of December 31, 1997 and
1998, respectively, which are included in accounts receivable in the
accompanying consolidated balance sheets. Monthly access charges are billed in
advance and are reflected as deferred revenue on the accompanying consolidated
balance sheets. Cellular equipment sales are recognized when the cellular
equipment is delivered to the customer. Subscriber acquisition costs (primarily
commissions and loss on equipment sales) are expensed as incurred.

EARNINGS PER SHARE

In 1997, the Company adopted SFAS No. 128, "Earnings Per Share." As a
result, the Company's reported net loss per common share for 1996 was restated.
Basic loss per common share is computed by the weighted average number of shares
of common stock outstanding during the year. Diluted net loss per common share
has been omitted because the impact of stock options and convertible preferred
stock on the Company's net loss per common share is anti-dilutive.

USE OF ESTIMATES

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

SIGNIFICANT CONCENTRATIONS

In connection with providing cellular services to customers of other
cellular carriers, the Company has contractual agreements with those carriers
which provide for agreed-upon billing rates between the parties. Approximately
56% of the Company's cellular roaming revenue was earned from two cellular
carriers during the year ended December 31, 1996. Approximately 45% and 59% of
the Company's cellular roaming revenue was earned from three cellular carriers
during the years ended December 31, 1997 and 1998, respectively.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Derivatives and Hedging ("SFAS 133").
SFAS 133 establishes uniform hedge accounting criteria for all derivatives
requiring companies to formally document, designate and assess the effectiveness
of transactions that receive hedge accounting. Under SFAS 133, derivatives will
be recorded in the balance sheet as either an asset or liability measured at its
fair value, with changes in the fair value recognized as a component of
comprehensive income or in current earnings. SFAS 133 will be effective for
fiscal years beginning after June 15, 1999. Under SFAS 133, the Company would
record a liability of $5.4 million relating to its interest rate hedge valuation
at December 31, 1998. The Company has not determined the timing or method of
adoption of SFAS 133.

F-14
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. DISCONTINUED OPERATIONS

On November 10, 1999, the Company adopted its plans to distribute the stock
of Logix in January, 2000, to the Company's Class A Common shareholders and
Class D Preferred shareholders in a non pro rata spin-off. The Company expects
to have a gain on the distribution and, accordingly, will defer Logix losses
from November 10, 1999 to the date of disposition, at which time the net gain
will be recorded. Additionally, the distribution will be recorded at fair value
on that date. It's expected Logix will be sold subsequent to the spinoff. Any
tax liability to the Company as a result of that sale will be accounted for at
the time of the sale. The wireline segment, or Logix and its subsidiaries,
operates as an integrated communications provider under the LOGIXSM brand name
in Oklahoma and Texas, owns local telephone exchanges in Oklahoma and operates
regional fiber optic transmission networks in Oklahoma, Texas and Colorado.
Pursuant to Accounting Principles Board Opinion ("APB") No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions," the consolidated financial statements have been restated for all
periods presented to reflect the wireline operations, assets and liabilities as
discontinued operations. The assets and liabilities of such operations have been
classified as "Net assets (liabilities) of discontinued operations" on the
consolidated balance sheets and consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1997 1998
------------- -------------
($ IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents........................... $ 254 $ 31,675
Restricted investments--current..................... -- 37,572
Other current assets................................ 2,758 36,747
Property, plant and equipment, net.................. 35,976 89,508
Restricted investments--non-current................. -- 61,988
Goodwill............................................ -- 126,244
Other assets........................................ 12,965 21,769
------- --------
Total assets...................................... 51,953 405,503
Current liabilities................................. 2,544 36,299
Long-term debt, net of current portion.............. 27,498 376,149
Other liabilities................................... 1,834 88
------- --------
Total liabilities................................. 31,876 412,536
------- --------
Net assets (liabilities) of discontinued
operations........................................ $20,077 $ (7,033)
======= ========
</TABLE>

F-15
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. DISCONTINUED OPERATIONS (CONTINUED)

The net income from operations of the wireline segment was classified on the
consolidated statement of operations as "Income (loss) from discontinued
operations." Summarized results of discontinued operations are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1997 1998
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
Net revenues.................................... $17,908 $20,177 $ 67,703
Income (loss) before income taxes............... 514 886 (40,196)
Income tax benefit (provision).................. (183) (337) 12,924
Extraordinary item, net......................... -- (217) --
Cumulative effect of change in accounting
principle, net................................ -- -- (699)
Income from discontinued operations............. 331 332 (27,110)
</TABLE>

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are recorded at cost. Newly constructed
cellular systems are added to property, plant and equipment at cost which
includes contracted services, direct labor, materials overhead and any
capitalized interest. For the years ended December 31, 1996, 1997 and 1998,
interest capitalized was not material. Existing property, plant and equipment
purchased through acquisitions is recorded at its fair value at the date of the
purchase. Repairs, minor replacements and maintenance are charged to operations
as incurred. The provisions for depreciation are provided using the
straight-line method based on the estimated useful lives of the various classes
of depreciable property.

Listed below are the major classes of property, plant and equipment and
their estimated useful lives, in years, as of December 31, 1997 and 1998:

<TABLE>
<CAPTION>
USEFUL
LIFE 1997 1998
-------- ----------- ------------
<S> <C> <C> <C>
Cellular systems and equipment............. 2-10 $42,279,323 $143,501,214
Buildings and improvements................. 5-40 10,387,759 25,089,448
Vehicles, aircraft and other work
equipment................................ 3-10 1,895,477 4,402,975
Furniture and office equipment............. 5-10 3,716,401 14,461,676
Plant under construction................... 4,456,878 15,232,700
Land....................................... 217,892 1,915,733
----------- ------------
Property, plant and equipment............ 62,953,730 204,603,746
Accumulated depreciation................... 10,579,864 31,549,417
----------- ------------
Property, plant and equipment, net....... $52,373,866 $173,054,329
=========== ============
</TABLE>

During 1996, the Company disposed of two mobile telecommunications switching
offices and related equipment for which it recognized a pretax loss of
$1,725,396. The loss is included in other income (expenses) in the accompanying
consolidated statements of operations.

F-16
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. NOTES PAYABLE:

6. LONG-TERM DEBT:

The Company's long-term debt as of December 31, 1997 and 1998, consisted of
the following:

<TABLE>
<CAPTION>
1997 1998
------------ --------------
<S> <C> <C>
Revolving credit facilities.................... $171,513,855 $ 740,000,000
Dobson/Sygnet Senior Notes..................... -- 200,000,000
DCC Senior Notes............................... 160,000,000 160,000,000
Other notes payable............................ 4,056,204 4,056,204
------------ --------------
Total debt................................. 335,570,059 1,104,056,204
Less--Current maturities....................... -- 198,871
------------ --------------
Total long-term debt....................... $335,570,059 $1,103,857,333
============ ==============
</TABLE>

REVOLVING CREDIT FACILITIES

The Company's revolving credit facilities consist of the following:

<TABLE>
<CAPTION>
INTEREST RATE
AMOUNT (WEIGHTED AVERAGE
OUTSTANDING AT RATE AT
MAXIMUM DECEMBER 31, DECEMBER 31,
CREDIT FACILITY AVAILABILITY 1998 1998)
- --------------- ------------ -------------- -----------------
<S> <C> <C> <C>
Dobson/Sygnet Credit
Facilities..................... $430,000,000 $407,000,000 8.9%
DCOC Credit Facility............. 200,000,000 200,000,000 8.2%
DOC Credit Facility.............. 250,000,000 133,000,000 7.0%(1)
</TABLE>

- ------------------------

(1) Weighted average computation is based on actual interest rates without
giving effect to the interest rate hedge discussed below.

On December 23, 1998, the Company's subsidiary, Dobson/Sygnet, obtained $430
million of senior secured credit facilities ("Dobson/Sygnet Credit Facilities")
from NationsBank, N.A., consisting of (a) a $50.0 million, 7 3/4 year reducing
revolving credit facility ("Revolving Credit Facility"), (b) a $125.0 million,
7 3/4 year term loan ("Term Loan A"), (c) a $155.0 million, 8 1/4 year term loan
("Term Loan B") and (d) a $100.0 million, 9 year term loan ("Term Loan C").
Dobson/Sygnet's obligations under the Dobson/Sygnet Credit Facility are secured
by all current and future assets of Dobson/Sygnet. Initial proceeds were used
primarily to finance the Sygnet Acquisition described in Note 9. The Company
expects to use the remaining availability to finance Dobson/Sygnet's capital
expenditures and general operations.

F-17
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

Commencing with the quarter ending December 31, 2000, the borrowing under
the Revolving Credit Facility and Term Loan A will reduce quarterly under the
following annual amortization schedule:

<TABLE>
<CAPTION>
YEAR ANNUAL AMORTIZATION
- ---- -------------------
<S> <C>
2000....................................................... 5.0%
2001....................................................... 7.5%
2002....................................................... 7.5%
2003....................................................... 12.5%
2004....................................................... 15.0%
2005....................................................... 25.0%
2006....................................................... 27.5%
</TABLE>

Commencing with the quarter ending December 31, 2000, the borrowing under
the Term Loan B will reduce quarterly under the following annual amortization
schedule:

<TABLE>
<CAPTION>
YEAR ANNUAL AMORTIZATION
- ---- -------------------
<S> <C>
2000....................................................... 2.5%
2001....................................................... 2.5%
2002....................................................... 2.5%
2003....................................................... 7.5%
2004....................................................... 15.0%
2005....................................................... 25.0%
2006....................................................... 27.5%
2007....................................................... 17.5%
</TABLE>

Term Loan C will amortize annually under the following schedule:

<TABLE>
<CAPTION>
YEAR ANNUAL AMORTIZATION
- ---- -------------------
<S> <C>
1999-2006.................................................. 1.0%
2007....................................................... 92.0%
</TABLE>

On March 25, 1998, the Company's subsidiary DCOC established a $200 million
senior secured credit facility (the "DCOC Credit Facility"). DCOC's obligations
under the DCOC Credit Facility are secured by all current and future assets of
DCOC. At the same time, the Company's subsidiary DOC established a $250 million
senior secured credit facility (the "DOC Credit Facility") to replace its
existing revolving credit facility established on February 28, 1997 ("1997
Credit Facility") and discussed below. The DOC Credit Facility is secured by all
of DOC's stock and the stock or partnership interests of its restricted
subsidiaries and all assets of DOC and its restricted subsidiaries. DCOC is
designated an unrestricted subsidiary with regard to the DOC Facility. The
Company and DOC's wholly owned subsidiaries other than Logix and the Arizona 5
Partnership have guaranteed DOC's obligations under the DOC Credit Facility.
Initial proceeds from the DCOC Credit Facility and DOC Credit Facility were used
primarily to refinance existing indebtedness and finance the 1998 acquisitions
described above. The Company expects to use the remaining availability under the
DCOC Credit Facility and DOC

F-18
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

Credit Facility to finance capital expenditures, consummate future acquisitions
and fund general corporate operations. The facilities will terminate in 2006.

The Dobson/Sygnet Credit Facilities, the DCOC Credit Facility and the DOC
Credit Facility require the Company to maintain certain financial ratios. The
failure to maintain such ratios would constitute an event of default,
notwithstanding the Company's ability to meet its debt service obligations.

In connection with the closing of the DOC Credit Facility, the Company
extinguished its 1997 Credit Facility and recognized a pretax loss of
approximately $3.3 million as a result of writing off previously capitalized
financing costs associated with the revolving credit facility. Such amount is
included in the Company's consolidated statement of operations, net of tax, for
the year ended December 31, 1998 as an extraordinary expense.

On February 28, 1997, the Company amended and restated its existing bank
credit agreement ("1996 Credit Facility") and established the 1997 Credit
Facility. In connection with the closing of the 1997 Credit Facility, the
Company extinguished its 1996 Credit Facility and recognized a pretax loss of
approximately $2.5 million as a result of writing off previously capitalized
financing costs associated with the 1996 Credit Facility. This loss has been
reflected as an extraordinary item, net of tax, in the Company's consolidated
statement of operations for the year ended December 31, 1997.

On March 19, 1996, the Company amended and restated its existing bank credit
agreement ("Old Credit Facility") and established the 1996 Credit Facility. In
connection with this amendment, the Company extinguished its Old Credit Facility
and recognized a pretax loss of approximately $.8 million as a result of writing
off previously capitalized financing costs. This loss has been reflected as an
extraordinary item, net of tax, in the accompanying consolidated statement of
operations for the year ended December 31, 1996.

SENIOR NOTES

On December 23, 1998, the Company's subsidiary issued $200 million of 12.25%
Senior Notes maturing in 2008 ("Dobson/Sygnet Senior Notes"). The net proceeds
were used to finance the Sygnet Acquisition described in Note 9 and to purchase
$67.7 million of securities pledged to secure payment of the first six
semi-annual interest payments on the Dobson/Sygnet Senior Notes, which begin on
June 15, 1999. The pledged securities are reflected as restricted cash and
investments in the Company's consolidated balance sheets. The Dobson/Sygnet
Senior Notes are redeemable at the option of the Company in whole or in part, on
or after December 15, 2003, initially at 106.125%. Prior to December 15, 2001,
the Company may redeem up to 35% of the principal amount of the Dobson/ Sygnet
Senior Notes at 112.25% with proceeds from equity offerings, provided that at
least $130 million remains outstanding.

On February 28, 1997, the Company issued $160 million of 11.75% Senior Notes
maturing in 2007 ("DCC Senior Notes"). The net proceeds were used to finance the
Maryland/Pennsylvania Acquisition described in Note 9 and to purchase securities
pledged to secure payment of the first four semi-annual interest payments on the
DCC Senior Notes, which began on October 15, 1997. The pledged securities are
reflected as restricted cash and investments in the Company's consolidated
balance sheets. The DCC Senior Notes are redeemable at the option of the Company
in whole or in part, on or after April 15, 2002, initially at 105.875%. Prior to
April 15, 2000, the Company may redeem up to 35% of

F-19
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

the principal amount of the DCC Senior Notes at 111.750% with proceeds from
equity offerings, provided that after any such redemption at least $104 million
remains outstanding.

OTHER NOTES PAYABLE

Other notes payable represents the amount financed with the United States
Government for nine PCS licenses as discussed in Note 9.

Minimum future payments of long-term debt for years subsequent to
December 31, 1998, are as follows:

<TABLE>
<S> <C>
1999........................................................ $ 198,871
2000........................................................ 54,066,729
2001........................................................ 80,918,390
2002........................................................ 80,946,762
2003........................................................ 109,651,942
2004 and thereafter......................................... 778,273,510
--------------
$1,104,056,204
==============
</TABLE>

INTEREST RATE HEDGES

In April 1997, the Company entered into an interest rate hedge agreement
terminating on April 24, 2002 to hedge the Company's interest expense on $160
million of its indebtedness under the DOC Credit Facility. In 1998, the
counterparty exercised its rights under the swap agreement, fixing the interest
rate at 6.13% plus a factor based on the Company's leverage. The Company
accounts for this as a hedge. Any cash settlements from the Company's interest
rate hedges are treated as adjustments to interest expense and are shown as
operating activities in the statement of cash flows. There have been no cash
settlements from interest rate hedges as of December 31, 1998.

The Company is currently negotiating an interest rate swap agreement to
establish a fixed interest rate on $75 million of its indebtedness under the
Dobson/Sygnet Credit Facilities.

7. RESTRICTED CASH AND INVESTMENTS:

Restricted cash and investments consist of interest pledge deposits for the
Dobson/Sygnet Senior Notes and the DCC Senior Notes. The Dobson/Sygnet Senior
Notes interest pledge deposit includes the initial deposit of $67.7 million (as
discussed in Note 6), plus interest earned. The DCC Senior Notes interest pledge
deposit of approximately $9.3 million includes an initial deposit of
$38.4 million (as discussed in Note 6), net of interest earned and payments
issued to bondholders. Amortization expense of $322,850 and $269,101 was
recorded in 1997 and 1998, respectively, for bond premiums recorded with the
purchase of the restricted investments. At December 31, 1998, the carrying value
of these investments exceeded the market value by approximately $326,000.

F-20
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' DEFICIT:

As of December 31, 1998, the Company's authorized and outstanding capital
stock is as follows:
<TABLE>
<CAPTION>

LIQUIDATION
# OF SHARES # OF SHARES PAR VALUE PREFERENCE
CLASS TYPE AUTHORIZED ISSUED PER SHARE DIVIDENDS PER SHARE
- --------------------- ---------------- ----------- ----------- --------- ------------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Class A Common Stock 1,438,000 573,152 $ .001 As declared --

Class B Common Stock 31,000 -- $ .001 As declared --

Class C Common Stock 31,000 -- $ .001 As declared --
--------- -------

1,500,000 573,152

Senior
Exchangeable Preferred Stock 550,000 191,320 $ 1.00 12.25% Cumulative $ 1,000

Additional Preferred Stock 184,000 64,646 $ 1.00 12.25% Cumulative $ 1,000

Class A Preferred Stock 450,000 314,286 $ 1.00 5% Non-cumulative $ 70

Class B Preferred Stock -- -- $ 1.00 8% Cumulative $ 100

Class C Preferred Stock 100,000 -- $ 1.00 8% Cumulative $ 16.23

Class D Preferred Stock 85,000 75,094 $ 1.00 15% Cumulative $1,131.92

Class E Preferred Stock 405,000 -- $ 1.00 15% Cumulative $1,131.92

Class F Preferred Stock 205,000 30,000 $ 1.00 16% Cumulative $ 1,000

Class G Preferred Stock 62,000 37,853 $ 1.00 16% Cumulative $ 660.40

Class H Preferred Stock 62,000 -- $ 1.00 16% Cumulative $ 660.45

Other Preferred Stock 397,000 -- $ 1.00 -- --
--------- -------

2,500,000 713,199

<CAPTION>
OTHER
FEATURES,
RIGHTS,
PREFERENCES
CLASS REDEMPTION DATE AND POWERS
- --------------------- ---------------- ------------
<S> <C> <C>
Class A -- Voting
Class B -- Non-voting
Class C -- Non-voting
Senior
Exchangeable Jan. 15, 2008 Non-voting
Additional Jan. 15, 2008 Non-voting
Class A -- Non-voting
Class B -- Voting,
Convertible
Class C -- Non-voting
Class D after Convertible
Dec. 23, 2010
Class E after Non-voting
Dec. 23, 2010
Class F Dec. 31, 2010 Non-voting
Class G 90 days after an Non- voting,
initial public convertible
offering
Class H after Non-voting
Dec. 23, 2010
Other -- --
</TABLE>

On December 23, the Company issued 75,093.7 shares of Class D Convertible
Preferred Stock, including 3,534 shares to its majority shareholder for
aggregate proceeds of $85 million. The Company also issued 30,000 shares of
Class F Preferred Stock to the former shareholders of Sygnet as consideration
for the Sygnet Acquisition.

On December 23, 1998, Fleet, the holder of Class B Preferred Stock,
converted all of its shares to Class A Common Stock. In addition, the Company
redeemed all of the outstanding shares of Class C Preferred Stock which were
held by Fleet for $1.9 million. On December 23, 1998, the Company and one of its
subsidiaries purchased 43,345 shares of its Class A Common Stock from Fleet for
approximately $31.1 million. In addition, the Company purchased 37,853 shares of
its Class A Common Stock from its majority shareholder. In exchange, the Company
issued 37,853 shares of Class G Preferred Stock to its majority shareholder.
These Class A Common Stock shares are held in treasury stock at cost.

As discussed in Note 1, effective February 28, 1997, the stockholders of DCC
and Dobson Holdings Corporation ("Dobson Holdings"), a new corporation, entered
into an agreement and plan of reorganization. Under the reorganization, Dobson
Holdings acquired all of the outstanding Class A common stock, Class C common
stock and Class B Preferred of DCC. In exchange, the holders of the Class A
common stock and Class B Preferred of DCC received equivalent shares of stock of
Dobson

F-21
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' DEFICIT: (CONTINUED)

Holdings. The holders of the Class C common stock received 100,000 shares of
Class A preferred stock of Dobson Holdings. In addition, Dobson Holdings assumed
all DCC outstanding stock options, substituting shares of Dobson Holdings
Class B common stock for the stock subject to options. As a result, Dobson
Holdings is the parent company of DCC.

As part of the reorganization, the stock of certain subsidiaries was
distributed to Dobson Holdings so that DCC is the holding company for the
wireline and cellular subsidiaries. Additionally, DCC changed its corporate name
to DOC and Dobson Holdings changed its corporate name to DCC.

On March 19, 1996, the Company redeemed all of the shares of the Class A
Preferred for $5,913,000, which is reflected in the accompanying consolidated
statement of cash flows for the year ended December 31, 1996.

In conjunction with the execution of the amended and restated revolving
credit facility on March 19, 1996, as described in Note 6, the Company canceled
its then outstanding Class A and Class B common stock and authorized the capital
structure of the Company to consist of 1,000,000 shares of Class A voting common
stock, $1 par value per share, 31,000 shares of Class B common stock, $1 par
value per share, 59,130 shares of 10% cumulative, compounded, convertible,
redeemable Class A preferred stock, $100 par value per share, and 100,000 shares
of Class B convertible preferred stock ("Class B Preferred"), $1 par value per
share, 8% dividend that accrues on a daily basis. On the same date, the Company
issued 100,000 shares of Class B Preferred. The net proceeds from the issuance
of the Class B Preferred was approximately $9,400,000. In addition, the Company
issued 473,152 shares of Class A voting common stock to the holders of the
original Class A common stock. On November 15, 1996, the Company amended its
certificate of incorporation to eliminate Class A Preferred from its authorized
capital stock.

Holders of Class B Preferred are entitled to cumulative dividends as and
when declared by the board of directors of the Company and a liquidation
preference over the other classes of capital stock. The Class B Preferred
stockholders are also entitled to a dividend equal to the amount they would have
received had the Preferred Stock been converted into Class A common stock. Each
share of Class B Preferred is convertible into Class A common stock initially at
a ratio of one to one. Each share of Class B Preferred has voting rights
equivalent to Class A common stock, at a rate equal to the number of Class A
common shares into which the share of Class B Preferred is convertible at the
record date of such vote. In addition, the Class B Preferred stockholders have
the right, as a class, to elect two members of the board of directors of the
Company.

In February 1997, a $7.5 million dividend was paid on the Class A Common
Stock. As a result of the $7.5 million dividend, holders of Class B Preferred
were entitled to a "Make-Whole Dividend" of approximately $1.6 million. In lieu
of such Make-Whole Dividend, the holders of Class B Preferred received 100,000
shares of Class C Preferred Stock having a liquidation preference of $1,623,329.

9. ACQUISITIONS:

On February 28, 1997, the Company purchased the FCC cellular licenses for,
and certain assets relating to two MSAs and two RSAs located in Maryland and
Pennsylvania for $77.6 million. The properties are located immediately outside
the Washington/Baltimore metropolitan area.

On March 3, 1997, the Company purchased the FCC cellular license for, and
certain assets relating to Maryland RSA 2 for $75.8 million. The property is
located to the east of the Washington/Baltimore

F-22
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. ACQUISITIONS: (CONTINUED)

metropolitan area. This acquisition and the one completed on February 28, 1997,
are referred to together as the "Maryland/Pennsylvania Acquisition."

On October 1, 1997, the Company purchased a 75% interest in the Gila River
Cellular General Partnership (the "Arizona 5 Partnership"), which owns the
cellular license for Arizona RSA 5, as well as the associated tangible operating
assets, and Gila River Telecommunications Subsidiary, Inc. ("GRTSI") purchased a
25% interest in the Arizona 5 Partnership. The Company paid a net purchase price
of $39.8 million for its 75% interest in the Arizona 5 Partnership. In addition,
the Company financed approximately $5.2 million of the $13.3 million purchase
price paid by GRTSI for its 25% interest in the Arizona 5 Partnership. The
$5.2 million note receivable bears interest at the Company's available rate
under its revolving credit facility. Principal and interest will be paid from
60% of partnership distributions beginning after September 30, 1998. Any unpaid
amounts of principal and interest are due on December 31, 2013.

On January 26, 1998, the Company purchased the FCC cellular license for, and
certain assets relating to Texas 16 RSA for $56.6 million. The property is
located in south-central Texas in an area bordered by Austin, Houston and San
Antonio.

On April 1, 1998, the Company acquired all of the capital stock of the
corporations which owned the Cellular 2000 Partnership. The Cellular 2000
Partnership owns the FCC cellular license and system for, and certain assets
relating to, the California 4 RSA. The total purchase price paid by the Company
was $90.9 million. The property is located in central California adjacent to
Fresno, Modesto and Yosemite National Park.

On June 16, 1998, the Company acquired an 86.4% interest in the Santa Cruz
Cellular Telephone Partnership ("SCCTP") for $31 million. SCCTP owns the
cellular license and other assets for the Santa Cruz MSA. The Santa Cruz MSA is
located adjacent to the California 4 RSA purchased in April 1998. Subsequent to
September 30, 1998, the Company acquired an additional .5% interest in SCCTP for
$.2 million.

On July 29, 1998, the Company purchased the FCC cellular license and certain
assets of California 7 RSA for $21 million. California 7 is located in the
Imperial Valley extending from east of San Diego to the Arizona state line.

On September 2, 1998, the Company completed the acquisition of the FCC
license of Ohio 2 RSA. The Company is currently negotiating with AirTouch for
the purchase of subscribers and the lease of certain equipment necessary to
operate the system. The purchase price of $39.3 million is being held in escrow
pending resolution of claims made against the titles to the FCC licenses of the
sellers. Ohio 2 is located in north central Ohio and covers an estimated
population of 262,100.

On December 2, 1998, the Company completed the acquisition of the FCC
license for Texas 10 RSA. The Company is currently negotiating with AT&T
Wireless for the purchase of subscribers and the lease of certain equipment
necessary to operate the system. The purchase price of $55.0 million is being
held in escrow pending resolution of claims made against the titles to the FCC
licenses of the sellers. Texas 10 is located in central Texas and covers an
estimated population of 317,900.

On December 23, 1998, the Company's subsidiary, Dobson/Sygnet acquired
Sygnet Wireless, Inc. for $337.5 million in cash and preferred stock and
assumption of approximately $309 million of debt, which was immediately
refinanced (See Note 6). The newly acquired Sygnet markets include cellular
systems in Ohio, Pennsylvania and New York covering an estimated population base
of 2.4 million.

F-23
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. ACQUISITIONS: (CONTINUED)

The acquisition transactions were accounted for as purchases and,
accordingly, their results of operations have been included in the accompanying
consolidated statements of operations from the respective dates of acquisition.
The unaudited pro forma information set forth below includes all acquisitions
for the years ended 1997 and 1998, respectively, as if the purchases occurred at
the beginning of 1997. The unaudited pro forma information is presented for
informational purposes only and is not necessarily indicative of the results of
operations that actually would have been achieved had the acquisitions been
consummated at that time:

<TABLE>
<CAPTION>
1997 1998
--------- ---------
(UNAUDITED)
<S> <C> <C>
Operating revenue..................................... $ 211,300 $ 254,447
Loss before discontinued operations and extraordinary
items............................................... (83,000) (81,977)
Net loss.............................................. (117,181) (124,130)
Net loss applicable to common stockholders............ (142,022) (148,978)
Basic net loss applicable to common stockholders per
common share........................................ $ (300.16) $ (314.59)
</TABLE>

PCS LICENSES

In the second quarter of 1997, the Company was granted PCS licenses in the
FCC "F" Block auction for nine markets adjacent to or overlapping the Company's
existing cellular footprint in Oklahoma, Kansas and Missouri. The aggregate bid
for these licenses was $5.1 million after a 15% discount. The Company financed
approximately $4.1 million of the purchase price in July 1997 by notes payable
to the United States Government at an annual interest rate of 6.25% (see Note
6). Interest only payments are due quarterly on January 15, April 15, July 15
and October 15 for the first two years. The principal obligations will be
amortized quarterly over an eight-year period beginning in 1999.

10. EMPLOYEE BENEFIT PLANS:

401(K) PLAN

The Company maintains a 401(k) plan (the "Plan") in which substantially all
employees of the Company are eligible to participate. The Plan requires the
Company to match 100% of employees' contributions up to 4% of their salary.
Contributions to the Plan charged to the Company's operations were approximately
$109,000, $179,000 and $274,000 during the years ended December 31, 1996, 1997
and 1998, respectively.

STOCK OPTION PLAN

The Company has adopted a stock option plan, the 1996 Stock Option Plan, as
amended (the "Plan"). The Company accounts for the Plan under APB Opinion 25,
under which no compensation cost is recognized in the accompanying consolidated
financial statements if the option price is equal to or greater than the fair
market value of the stock at the time the option is granted.

F-24
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS: (CONTINUED)

during 1997 representing 42.9% of total options granted in 1997 and vest as
follows: options to purchase 12% of such shares first become exercisable on each
of the first five anniversaries of the grant date; options to purchase an
additional 8% of such shares first become exercisable on the same dates if
annual performance objectives are achieved, otherwise, the additional 8% of such
shares become fully vested at the end of the ten year term. The remaining
options issued in 1997 and all of the options issued in 1998 and 1996 vest at a
rate of 20% per year. The Company has reserved 30,166 shares of authorized but
unissued Class B Common Stock ("Class B") and 30,166 shares of authorized but
unissued Class C Common Stock ("Class C") for issuance under the Plan.

Stock options outstanding under the Plan are presented for the periods
indicated.

<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------ ------------------------
NUMBER OF OPTION PRICE NUMBER OF OPTION PRICE
SHARES RANGE SHARES RANGE
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Outstanding December 31, 1995.................... -- -- -- --
------ --------- ----- ---------
Granted.......................................... 8,374 $ 100 -- --
Exercised........................................ -- -- -- --
Canceled......................................... -- -- -- --
------ --------- ----- ---------
Outstanding December 31, 1996.................... 8,374 $ 100 -- --
------ --------- ----- ---------
Granted.......................................... 14,059 $100-$150 -- --
Exercised........................................ -- -- -- --
Canceled......................................... -- -- -- --
------ --------- ----- ---------
Outstanding December 31, 1997.................... 22,433 $100-$150 -- --
------ --------- ----- ---------
Granted.......................................... 8,540 $300-$665 2,414 $400-$420
Exercised........................................ -- -- -- --
Canceled......................................... 1,207 $ 100 -- --
------ --------- ----- ---------
Outstanding December 31, 1998.................... 29,766 $100-$665 2,414 $400-$420
------ --------- ----- ---------
Exercisable at December 31, 1997................. 1,675 $ 100 -- --
------ --------- ----- ---------
Exercisable at December 31, 1998................. 7,122 $100-$150 -- --
------ --------- ----- ---------
</TABLE>

The following schedule shows the Company's net loss and net loss per share
for the last three years, had compensation expense been determined consistent
with the Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation. The pro forma information presented below is based on
several assumptions and should not be viewed as indicative of the Company in
future periods.

<TABLE>
<CAPTION>
($ IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) 1996 1997 1998
- ---------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Net loss applicable to common stockholders:
As reported............................................... $(2,270) $(19,337) $(76,516)
Pro forma................................................. $(2,309) $(19,540) $(76,943)
Basic net loss applicable to common stockholders per common
share:
As reported............................................... $ (4.80) $ (40.87) $(161.57)
Pro forma................................................. $ (4.88) $ (41.30) $(162.48)
</TABLE>

F-25
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS: (CONTINUED)

Diluted net loss per common share has been omitted because the impact of
common stock equivalents is anti-dilutive.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 1996, 1997 and 1998, respectively:

<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------ --------
(AMOUNTS EXPRESSED IN PERCENTAGES) 1996 1997 1998 1998
- ---------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Interest rate.................................. 6.98% 6.60% 5.60% 5.80%
Dividend yield................................. -- -- -- --
Expected volatility............................ 39.88% 40.27% 39.79% 40.20%
</TABLE>

The weighted average fair value of options granted using the Black-Scholes
option pricing model for Class B in 1996, 1997 and 1998 was $64.84, $71.42 and
$205.88, respectively, and for Class C in 1998 was $255.23 assuming an expected
life of ten years.

11. TAXES:

Benefit for income taxes for the years ended December 31, 1996, 1997 and
1998, were as follows:

<TABLE>
<CAPTION>
1996 1997 1998
--------- ----------- ------------
<S> <C> <C> <C>
Federal income taxes--
Current............................... $(452,000) $ -- $ --
Deferred.............................. (83,000) (3,243,000) (10,883,000)
State income taxes (current and
deferred)............................. (58,000) (382,000) (586,000)
--------- ----------- ------------
Total income tax benefit............ $(593,000) $(3,625,000) $(11,469,000)
========= =========== ============
</TABLE>

The provisions for income taxes for the years ended December 31, 1996, 1997
and 1998, differ from amounts computed at the statutory rate as follows:

<TABLE>
<CAPTION>
1996 1997 1998
--------- ----------- ------------
<S> <C> <C> <C>
Income taxes at statutory rate (34%).... $(618,000) $(6,576,000) $(11,816,000)
State income taxes, net of Federal
income tax effect..................... (73,000) (774,000) (1,390,000)
Losses for which no benefit is
recognized............................ -- 3,747,000 1,608,000
Other, net.............................. 98,000 (22,000) 129,000
--------- ----------- ------------
$(593,000) $(3,625,000) $(11,469,000)
========= =========== ============
</TABLE>

F-26
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. TAXES: (CONTINUED)

The tax effects of the temporary differences which gave rise to deferred tax
assets and liabilities at December 31, 1997 and 1998, were as follows:

<TABLE>
<CAPTION>
1997 1998
----------- -------------
<S> <C> <C>
Current deferred income taxes:
Allowance for doubtful accounts receivable..... $ 152,000 $ 812,000
Accrued liabilities............................ 45,000 592,000
Deferred expenses.............................. 17,000 --
----------- -------------
Net current deferred income tax asset........ 214,000 1,404,000
----------- -------------
Noncurrent deferred income taxes:
Fixed assets................................... (1,566,000) (2,440,000)
Cellular license costs and other intangibles... (9,859,000) (291,375,000)
Tax credits and carryforwards.................. 10,386,000 48,185,000
----------- -------------
Net noncurrent deferred income tax asset
(liability)................................ (1,039,000) (245,630,000)
----------- -------------
Total deferred income taxes.................. $ (825,000) $(244,226,000)
=========== =============
</TABLE>

At December 31, 1998, the Company had NOL carryforwards of approximately
$124 million, which may be utilized to reduce future Federal income taxes
payable. The Company's NOL carryforwards begin to expire in 2012.

12. RELATED PARTY TRANSACTIONS:

At December 31, 1997 and 1998, the Company had notes and interest receivable
of $5,852,282 and $7,047,272 due from related parties, including $295,612 and
$290,150 at December 31, 1997 and 1998, respectively, from the Company's
directors and officers. The notes bear interest at various interest rates
ranging from 4% to 14.5% at December 31, 1998.

13. ACCRUED EXPENSES:

Accrued expenses consist of the following at December 31:

<TABLE>
<CAPTION>
1997 1998
---------- -----------
<S> <C> <C>
Interest............................................ $6,006,257 $ 5,846,071
Sygnet acquisition costs (see Note 9)............... -- 5,439,095
Vacation, wages and other........................... 1,839,144 2,937,140
---------- -----------
Total accrued expenses............................ $7,845,401 $14,222,306
========== ===========
</TABLE>

14. COMMITMENTS:

The Company entered into an equipment supply agreement on June 24, 1997, and
as amended, the Company agreed to purchase approximately $65 million of cell
site and switching equipment between June 24, 1997 and November 23, 2001, to
update the cellular systems for the newly acquired

F-27
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. COMMITMENTS: (CONTINUED)

and existing MSAs and RSAs. Of the commitment, approximately $32.3 million
remained at December 31, 1998.

The Company entered into an additional equipment supply agreement with a
second vendor on January 13, 1998. The Company agreed to purchase approximately
$81 million of cell site and switching equipment between January 13, 1998 and
January 12, 2002, to update the cellular systems for the newly acquired and
existing MSAs and RSAs. Of this commitment, approximately $58.4 million remained
at December 31, 1998.

Future minimum lease payments required under operating leases that have an
initial or remaining noncancellable lease term in excess of one year at December
31, 1998, are as follows:

<TABLE>
<S> <C>
1999................................ $ 6,207,303
2000................................ 5,062,326
2001................................ 3,946,908
2002................................ 2,774,654
2003................................ 2,188,040
2004 and thereafter................. 15,151,228
</TABLE>

Lease expense under the above leases was approximately $226,000, $866,000
and $3,034,000 for the years ended December 31, 1996, 1997 and 1998,
respectively.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS:

Unless otherwise noted, the carrying value of the Company's financial
instruments approximates fair value. The Company estimates the fair value of its
long-term debt based on quoted market prices for publicly traded debt or on the
current rates available to the Company for debt with similar terms and remaining
maturation.

Indicated below are the carrying amounts and estimated fair values of the
Company's financial instruments as of December 31:

<TABLE>
<CAPTION>
1997 1998
--------------------------- ---------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revolving credit
facilities.......... $171,513,855 $171,513,855 $740,000,000 $740,000,000
Dobson/Sygnet Senior
Notes............... -- -- 200,000,000 205,000,000
DCC Senior Notes...... 160,000,000 169,200,000 160,000,000 163,200,000
Other notes payable... 4,056,204 4,200,695 4,056,204 4,057,164
Interest rate hedge... -- (2,644,414) -- (5,407,420)
</TABLE>

16. SUBSEQUENT EVENTS:

On March 16, 1999, the Company purchased certain assets and customers
relating to the Ohio 2 RSA for $3.9 million. This completes the acquisition of
the Ohio 2 market, which began on

F-28
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. SUBSEQUENT EVENTS: (CONTINUED)

September 2, 1998, when the Company acquired the FCC license of Ohio 2 RSA for
$39.3 million. Ohio 2 is located in north central Ohio and covers an estimated
population base of 262,300.

On June 24, 1999, the Company's wholly-owned subsidiary, Dobson Cellular of
Maryland, purchased the Maryland 1 RSA for $9.1 million. Maryland 1 is located
in the westernmost county of the state and a small section of West Virginia and
covers an estimated population base of 56,400.

On September 15, 1999, the Company purchased Arizona 1 RSA for
$24.0 million. Arizona 1 is located in the Northwest corner of the state and
covers an estimated population base of 135,000 as of September 30, 1999.

In October 1999, the Company entered into a memorandum of understanding with
AT&T Wireless, Inc. to establish an equally-owned joint venture that will
acquire, own and operate American Cellular Corporation. Management estimates
that the aggregate acquisition price for American Cellular Corporation will be
approximately $2.4 billion, including fees and expenses.

The Company plans to fund its share of the acquisition with non-recourse
bank debt at the joint venture level and cash contributions to the joint venture
of up to approximately $372.5 million each from the two partners. The Company
expects to raise its share of the cash contribution through the issuance of
additional equity securities. The acquisition is expected to close in the first
quarter of 2000.

In October 1999, Dobson Tower Company, a subsidiary of the Company,
completed the sale of substantially all of the towers acquired by Dobson Tower
Company in the Sygnet acquisition to American Tower Corporation for
approximately $38.7 million. In connection with the sale, another subsidiary of
the Company, Sygnet Communications, Inc. has agreed to lease the towers back
from American Tower Corporation for an initial term of ten years.

The Company has entered into definitive agreements to acquire four cellular
systems for an aggregate purchase price of approximately $159.0 million. These
acquisitions will be financed with borrowings under the Company's credit
facilities and are expected to close during the first quarter of 2000.

Subsequent to December 31, 1998, Logix, a subsidiary of the Company engaged
Lehman Brothers to evaluate strategic alternatives, including the potential
merger of the Company with another entity. Should Logix enter into and complete
a merger transaction, subsequent to the planned spin-off of Logix to certain of
the Company's stockholders, the Company would recognize a tax liability equal to
tax effect of the excess of the fair value of Logix over its tax basis at the
date of the merger.

On December 14, 1999, the Company launched a tender offer for all of its
11 3/4% senior notes at a price of 117%. This offer will expire on January 14,
2000. Any premium paid for the tender of these senior notes will be recorded as
an extraordinary loss in the first quarter of 2000.

F-29
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Dobson Communications Corporation:

We have audited the accompanying consolidated balance sheet of Dobson
Communications Corporation (an Oklahoma corporation) and subsidiaries as of
September 30, 1999, and the related consolidated statements of operations,
stockholders' deficit and cash flows for the nine months then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Dobson
Communications Corporation and subsidiaries as of September 30, 1999, and the
results of their operations and their cash flows for the nine months then ended,
in conformity with generally accepted accounting principles.

Oklahoma City, Oklahoma,
December 20, 1999

F-30
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 1999

<TABLE>
<S> <C>
ASSETS

CURRENT ASSETS:
Cash and cash equivalents................................. $ 339,308
Accounts receivable-
Due from customers, net of allowance for doubtful
accounts of $1,527,105.................................. 54,340,677
Restricted cash and investments........................... 23,136,174
Inventory................................................. 6,615,531
Prepaid expenses and other................................ 2,073,273
Deferred income taxes..................................... 1,206,000
--------------

Total current assets.................................. 87,710,963
--------------

PROPERTY, PLANT AND EQUIPMENT, net.......................... 187,291,097
--------------

OTHER ASSETS:
Receivables--Affiliates................................... 815,070
Notes receivable--Affiliates.............................. 7,384,910
Restricted investments.................................... 34,635,000
Cellular license acquisition costs, net of accumulated
amortization of $110,186,947............................ 1,227,578,926
Deferred financing costs, net of accumulated amortization
of $8,125,421........................................... 69,017,136
Other intangibles, net of accumulated amortization of
$10,069,890............................................. 48,138,723
Investments in unconsolidated subsidiaries and other...... 3,810,895
--------------

Total other assets.................................... 1,391,380,660
--------------

Total assets.......................................... $1,666,382,720
==============
</TABLE>

F-31
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 1999

<TABLE>
<S> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable.......................................... $ 30,938,111
Accrued expenses.......................................... 25,031,370
Note payable.............................................. 17,500,000
Deferred revenue and customer deposits.................... 7,268,293
Current portion of long-term debt......................... 2,113,960
Accrued dividends payable................................. 21,622,406
--------------

Total current liabilities............................. 104,474,140
--------------

Net liabilities of discontinued operations.................. 48,844,403

Long-term debt, net of current portion...................... 1,039,843,580

Deferred tax liabilities.................................... 216,563,000

Minority interests.......................................... 27,109,750

Commitments (Note 14)

Senior exchangeable preferred stock, net.................... 440,797,350

Class D convertible preferred stock......................... 85,000,000

STOCKHOLDERS' DEFICIT:
Class A Preferred Stock................................... 314,286
Class A Common Stock, $.001 par value, 1,438,000 shares
authorized, 573,152 issued and 491,954 outstanding...... 573
Paid-in capital........................................... 18,298,072
Retained deficit.......................................... (258,736,773)
--------------

(240,123,842)
--------------

Less--
Class A Common Stock held in treasury (81,198 shares), at
cost.................................................... (56,125,661)
--------------

Total stockholders' deficit........................... (296,249,503)
--------------

Total liabilities and stockholders' deficit........... $1,666,382,720
==============
</TABLE>

The accompanying notes are an integral part of this consolidated balance sheet.

F-32
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

<TABLE>
<CAPTION>
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
OPERATING REVENUES:
Service revenue........................................... $ 47,769,305 $ 117,891,735
Roaming revenue........................................... 45,916,023 107,295,804
Equipment revenue and other............................... 2,660,727 9,952,331
------------ -------------
Total operating revenues................................ 96,346,055 235,139,870
------------ -------------
OPERATING EXPENSES:
Cost of service........................................... 22,603,067 35,762,477
Cost of equipment......................................... 5,166,528 18,561,827
Marketing and selling..................................... 14,855,588 34,957,280
General and administrative................................ 16,219,389 40,795,364
Depreciation and amortization............................. 29,713,544 100,019,510
------------ -------------
Total operating expenses................................ 88,558,116 230,096,458
------------ -------------
OPERATING INCOME............................................ 7,787,939 5,043,412
INTEREST EXPENSE............................................ (25,039,213) (82,364,725)
OTHER INCOME, net........................................... 3,303,914 3,411,347
------------ -------------
LOSS BEFORE MINORITY INTERESTS IN INCOME OF SUBSIDIARIES,
INCOME TAXES, DISCONTINUED OPERATIONS AND EXTRAORDINARY
ITEMS..................................................... (13,947,360) (73,909,966)
MINORITY INTERESTS IN INCOME OF SUBSIDIARIES................ (1,963,308) (2,124,884)
------------ -------------
LOSS BEFORE INCOME TAXES, DISCONTINUED OPERATIONS AND
EXTRAORDINARY ITEMS....................................... (15,910,668) (76,034,850)
INCOME TAX BENEFIT.......................................... 4,864,070 28,891,955
------------ -------------
LOSS FROM CONTINUING OPERATIONS............................. (11,046,598) (47,142,895)
LOSS FROM DISCONTINUED OPERATIONS, net of income tax benefit
of $7,267,566 and $25,626,241 in 1998 and 1999,
respectively.............................................. (17,184,832) (41,811,237)
------------ -------------
LOSS BEFORE EXTRAORDINARY ITEMS............................. (28,231,430) (88,954,132)
EXTRAORDINARY EXPENSE, net of income tax benefit of $671,000
in 1998................................................... (2,643,439) --
------------ -------------
NET LOSS.................................................... (30,874,869) (88,954,132)
DIVIDENDS ON PREFERRED STOCK................................ (16,748,786) (50,512,778)
------------ -------------
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS.................. $(47,623,655) $(139,466,910)
============ =============
BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDERS PER COMMON
SHARE:
Before discontinued operations and extraordinary
expense................................................. $ (58.74) $ (198.51)
Discontinued operations................................... (36.32) (84.99)
Extraordinary expense..................................... (5.59) --
------------ -------------
BASIC NET LOSS APPLICABLE TO COMMON STOCKHOLDERS PER COMMON
SHARE..................................................... $ (100.65) $ (283.50)
============ =============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING............ 473,152 491,954
============ =============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-33
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
CLASS A CLASS A
PREFERRED STOCK COMMON STOCK TREASURY
------------------- ------------------- PAID-IN STOCK, AT RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL COST DEFICIT
-------- -------- -------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1998........ 314,286 $314,286 573,152 $573 $18,298,072 $(56,125,661) $(119,269,863)
Net loss............... -- -- -- -- -- -- (88,954,132)
Preferred stock
dividend............. -- -- -- -- -- -- (50,512,778)
------- -------- ------- ---- ----------- ------------ -------------
SEPTEMBER 30, 1999....... 314,286 $314,286 573,152 $573 $18,298,072 $(56,125,661) $(258,736,773)
======= ======== ======= ==== =========== ============ =============
</TABLE>

The accompanying notes are an integral part of this consolidated financial
statement.

F-34
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

<TABLE>
<CAPTION>
1998 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations....................... $ (11,046,598) $(47,142,895)
Adjustments to reconcile net loss to net cash provided by
operating activities--
Depreciation and amortization......................... 29,713,544 100,019,510
Amortization of bond premium and financing cost....... 1,398,277 4,871,321
Deferred income taxes and investment tax credits,
net................................................. (8,053,765) (28,869,000)
Minority interests in income of subsidiaries.......... 2,068,627 2,124,884
Interest on restricted investments.................... (1,130,925) (2,772,314)
Other................................................. 20,395 99,850
Changes in current assets and liabilities-
Accounts receivable..................................... (10,306,742) (11,041,109)
Inventory............................................... (871,752) (1,457,019)
Prepaid expenses and other.............................. 801,766 (46,735)
Accounts payable........................................ 4,884,350 (16,598,561)
Accrued expenses........................................ 1,500,999 10,809,064
Deferred revenue and customer deposits.................. 1,279,125 1,529,912
------------- ------------
Net cash provided by operating activities........... 10,257,301 11,526,908
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (23,792,922) (40,173,598)
Acquisitions.............................................. (200,790,589) (46,437,966)
Decrease in payable--Affiliates........................... -- (5,011,438)
Increase in receivables--Affiliates....................... (10,056,711) (924,718)
Acquisition escrow deposit................................ (57,150,000) --
Investments in unconsolidated subsidiaries and other...... (1,425,418) (857,992)
Proceeds from the sale of assets.......................... 6,700 25,259
------------- ------------
Net cash used in investing activities............... (293,208,940) (93,380,453)
------------- ------------
</TABLE>

F-35
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

<TABLE>
<CAPTION>
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt.............................. $284,000,000 $ 79,000,000
Repayments of long-term debt.............................. (171,424,854) (141,098,664)
Cash dividends............................................ -- (3,471,621)
Issuance of preferred stock............................... 175,000,000 170,000,000
Redemption of preferred stock............................. -- (55,000,000)
Purchase of restricted investments........................ 810,012 --
Maturities of restricted investments...................... 9,400,000 19,134,000
Deferred financing costs.................................. (12,544,874) (8,694,596)
------------ -------------
Net cash provided by financing activities............... 285,240,284 59,869,119
------------ -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 2,288,645 (21,984,426)
CASH AND CASH EQUIVALENTS, beginning of year................ 2,752,399 22,323,734
------------ -------------
CASH AND CASH EQUIVALENTS, end of year...................... $ 5,041,044 $ 339,308
============ =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for--
Interest (net of amounts capitalized)................... $ 19,817,872 $ 71,506,299

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Stock dividend paid through the issuance of preferred
stock................................................... $ 28,308,000 $ 10,513,000
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-36
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION:

CAPITAL RESOURCES AND GROWTH

2. SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include the accounts of
all majority owned subsidiaries. For financial reporting purposes, the Company
reports 100% of revenues and expenses for the markets for which it provides
wireless telecommunications service. However, in several of its markets, the
Company holds less than 100% of the equity ownership. The minority stockholders'
and partners' shares of income or losses in those markets are reflected in the
consolidated statements of operations as "minority interests in income of
subsidiaries." For financial reporting purposes, the Company consolidates each
subsidiary and partnership in which it has a controlling interest (greater than
50%). Significant intercompany accounts and transactions have been eliminated.
Investments in unconsolidated partnerships where the Company does not have a
controlling interest are accounted for under the equity method.

The Company is responsible for managing and providing administrative
services for certain partnerships of which the Company is the majority partner.
The Company is accountable to the partners and shareholders for the execution
and compliance with contracts and agreements and for filing of instruments
required by law which are made on behalf of these partnerships. The books and
records of these partnerships are also maintained by the Company.

BUSINESS SEGMENTS

The Company operates in one business segment pursuant to Statement of
Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an
Enterprise and Related Information."

F-37
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

CASH AND CASH EQUIVALENTS

Cash and cash equivalents on the accompanying consolidated balance sheet
includes cash and short-term investments with original maturities of three
months or less.

INVENTORY

The Company values its inventory at the lower of cost or market on the
first-in, first-out method of accounting.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company assesses potential impairments of long-lived assets, certain
identifiable intangibles and goodwill when there is evidence that events or
changes in circumstances indicate that an asset's carrying value may not be
recoverable. An impairment loss is recognized when the sum of the expected
future net cash flows is less than the carrying amount of the asset. The amount
of any recognized impairment would be based on the estimated fair value of the
asset subject to impairment compared to the carrying amount of such asset. No
such losses have been identified by the Company.

CELLULAR LICENSE ACQUISITION COSTS

Cellular license acquisition costs consist of amounts paid to acquire FCC
licenses to provide cellular services. Cellular license acquisition costs are
being amortized on a straight-line basis over ten to fifteen years. Amortization
expense of $19,642,000 (unaudited) and $66,206,738 was recorded in the nine
months ended September 30, 1998 and 1999, respectively.

DEFERRED FINANCING COSTS

Deferred financing costs consist of fees incurred to secure long-term debt.
Deferred financing costs are being amortized on a straight-line basis over the
terms of the debt. Amortization expense related to these costs of $805,558
(unaudited) and $4,773,465 was recorded in the nine months ended September 30,
1998 and 1999, respectively.

OTHER INTANGIBLES

Other intangibles consist of amounts paid to acquire FCC licenses to provide
PCS service and amounts paid to acquire cellular customer lists. PCS license
acquisition costs are not being amortized until the Company's PCS service
becomes operational. Customer list acquisition costs are being amortized on a
straight-line basis over five years. Amortization expense of $765,996
(unaudited) and $7,998,843 was recorded in the nine months ended September 30,
1998 and 1999, respectively.

ADVERTISING COSTS

Advertising costs are expensed as incurred and are included as marketing and
selling expenses in the accompanying consolidated statements of operations.

F-38
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

INCOME TAXES

REVENUE RECOGNITION

The Company records service revenues over the period they are earned. The
cost of providing service is recognized as incurred.

Airtime and toll revenue is billed in arrears. The Company accrued estimated
unbilled revenues for services provided of approximately $3,445,000 as of
September 30, 1999, which are included in accounts receivable in the
accompanying consolidated balance sheet. Monthly access charges are billed in
advance and are reflected as deferred revenue on the accompanying consolidated
balance sheet. Cellular equipment sales are recognized when the cellular
equipment is delivered to the customer. Subscriber acquisition costs (primarily
commissions and loss on equipment sales) are expensed as incurred.

USE OF ESTIMATES

SIGNIFICANT CONCENTRATIONS

In connection with providing cellular services to customers of other
cellular carriers, the Company has contractual agreements with those carriers
which provide for agreed-upon billing rates between the parties. Approximately
65% and 63% of the Company's cellular roaming revenue was earned from three
cellular carriers during the nine months ended September 30, 1998 and 1999,
respectively.

UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying unaudited consolidated financial statements for the nine
months ended September 30, 1998, have been prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

F-39
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

recorded in the balance sheet as either an asset or liability measured at its
fair value, with changes in the fair value recognized as a component of
comprehensive income or in current earnings. Under SFAS 133, the Company would
record an asset of $0.3 million relating to an interest rate hedge valuation at
September 30, 1999. In June 1999, the Financial Accounting Standards Board
issued SFAS No. 137 which amended SFAS 133 by deferring the effective date to
fiscal years beginning after June 15, 2000. The Company has not determined the
timing or method of adoption of SFAS 133.

RECLASSIFICATIONS

Certain reclassifications have been made to the previously presented 1998
balances to conform them to the 1999 presentation.

3. DISCONTINUED OPERATIONS

On November 10, 1999, the Company adopted its plans to distribute the stock
of Logix in January, 2000, to the Company's Class A Common shareholders and
Class D Preferred shareholders in a non pro rata spin-off. The Company expects
to have a gain on the distribution and, accordingly, will defer Logix losses
from November 10, 1999 to the date of disposition, at which time the net gain
will be recorded. Additionally, the distribution will be recorded at fair value
on that date. It is expected Logix will be sold subsequent to the spinoff. Any
tax liability to the Company as a result of that sale will be accounted for at
the time of the sale. The wireline segment, or Logix and its subsidiaries,
operates as an integrated communications provider under the LOGIX(SM) brand name
in Oklahoma and Texas, owns local telephone exchanges in Oklahoma and operates
regional fiber optic transmission networks in Oklahoma, Texas and Colorado.
Pursuant to Accounting Principles Board Opinion ("APB") No. 30, "Reporting the
Results of Operations--Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions," the consolidated financial statements have been restated for all
periods presented to reflect the wireline operations, assets and liabilities as
discontinued operations. The assets and liabilities of such operations have been
classified as "Net assets (liabilities) of discontinued operations" on the
condensed

F-40
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. DISCONTINUED OPERATIONS (CONTINUED)

consolidated balance sheets and consist of the following as of September 30,
1999 (dollars in thousands):

<TABLE>
<S> <C>
Cash and cash equivalents................................... $ 2,539
Restricted investments--current............................. 40,186
Other current assets........................................ 25,826
Property, plant and equipment, net.......................... 115,469
Restricted investments--non-current......................... 41,382
Goodwill.................................................... 125,386
Other assets................................................ 60,399
--------
Total assets.............................................. 411,187

Current liabilities......................................... 39,759
Long-term debt, net of current portion...................... 420,162
Other liabilities........................................... 110
--------
Total liabilities......................................... 460,031
--------
Net liabilities of discontinued operations.................. $(48,844)
========
</TABLE>

The net loss from operations of the wireline segment was classified on the
consolidated statements of operations as "Loss from discontinued operations."
Summarized results of discontinued operations are as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1998 1999
----------- --------
(UNAUDITED)
($ IN THOUSANDS)
<S> <C> <C>
Net revenues........................................... $ 40,176 $ 85,359
Loss before income taxes............................... (23,753) (67,437)
Income tax benefit..................................... 7,268 25,626
Cumulative effect of change in accounting principle.... (699) --
Loss from discontinued operations...................... (17,184) (41,811)
</TABLE>

The Company initially reflected the spin-off of Logix as discontinued
operations in its September 30, 1998 financial statements and continued this
treatment through September 30, 1999. In retrospect, this presentation was
premature as the Company did not meet all the criteria for discontinued
operations treatment as provided for in APB No. 30 until the fourth quarter of
1999. If the Logix spin-off had not been accounted for as discontinued
operations, the loss from continuing operations before extraordinary items would
have been as follows:

<TABLE>
<S> <C> <C>
Nine Months Ended September 30, 1998................. $(20,237,430)
Year Ended December 31, 1998......................... $(50,395,307)
Three Months Ended March 31, 1999.................... $(33,744,791)
Six Months Ended June 30, 1999....................... $(63,213,877)
Nine Months Ended September 30, 1999................. $(88,954,132)
</TABLE>

F-41
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are recorded at cost. Newly constructed
cellular systems are added to property, plant and equipment at cost which
includes contracted services, direct labor, materials overhead and capitalized
interest. For the nine months ended September 30, 1999, interest capitalized was
not material. Existing property, plant and equipment purchased through
acquisitions is recorded at its fair value at the date of the purchase. Repairs,
minor replacements and maintenance are charged to operations as incurred. The
provisions for depreciation are provided using the straight-line method based on
the estimated useful lives of the various classes of depreciable property.

Listed below are the major classes of property, plant and equipment and
their estimated useful lives, in years, as of September 30, 1999:

<TABLE>
<CAPTION>
USEFUL LIFE
-----------
<S> <C> <C>
Wireless systems and equipment...................... 2 - 10 $178,848,900
Buildings and improvements.......................... 5 - 40 26,386,951
Furniture and office equipment...................... 5 - 10 14,726,642
Vehicles, aircraft and other work equipment......... 3 - 10 3,355,878
Plant under construction............................ 10,588,900
Land................................................ 2,785,568
------------
Property, plant and equipment..................... 236,692,839

Accumulated depreciation............................ 49,401,742
------------
Property, plant and equipment, net................ $187,291,097
============
</TABLE>

5. NOTE PAYABLE:

On December 23, 1998, the Company's subsidiary, Dobson Tower Company,
obtained a $17,500,000 term loan maturing on December 22, 1999. Interest on the
term loan accrues at 8.0%. Proceeds were used to finance the Sygnet Acquisition
discussed in Note 9. The term loan is secured by all assets of Dobson Tower
Company. Subsequent to September 30, 1999, the Company completed the sale of
substantially all of the towers and repaid this note payable in its entirety as
discussed in Note 16.

6. LONG-TERM DEBT:

The Company's long-term debt as of September 30, 1999, consisted of the
following:

<TABLE>
<S> <C>
Revolving credit facilities................................. $ 678,000,000
DCC Senior Notes............................................ 160,000,000
Dobson/Sygnet Senior Notes.................................. 200,000,000
Other notes payable......................................... 3,957,540
--------------
Total debt................................................ 1,041,957,540

Less--Current maturities.................................... (2,113,960)
--------------
Total long-term debt...................................... $1,039,843,580
==============
</TABLE>

F-42
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

REVOLVING CREDIT FACILITIES

The Company's revolving credit facilities consist of the following:

<TABLE>
<CAPTION>
AMOUNT INTEREST RATE
MAXIMUM OUTSTANDING AT (WEIGHTED AVERAGE RATE AT
CREDIT FACILITY AVAILABILITY SEPTEMBER 30, 1999 SEPTEMBER 30, 1999)
- --------------- ------------ ------------------ -------------------------
<S> <C> <C> <C>
Dobson/Sygnet Credit Facility............. $430,000,000 $406,000,000 8.7%(1)
DCOC Credit Facility...................... 160,000,000 133,000,000 6.5%
DOC Credit Facility....................... 250,000,000 139,000,000 7.0%
</TABLE>

- ------------------------

(1) Weighted average computation is based on actual interest rates without
giving effect to the interest rate hedge discussed below.

On December 23, 1998, the Company's subsidiary, Dobson/Sygnet, obtained
$430 million of financing pursuant to senior secured credit facilities
("Dobson/Sygnet Credit Facility") from NationsBank, N.A., consisting of (a) a
$50.0 million, 7 3/4 year reducing revolving credit facility ("Revolving Credit
Facility"), (b) a $125.0 million, 7 3/4 year term loan ("Term Loan A"), (c) a
$155.0 million, 8 1/4 year term loan ("Term Loan B") and (d) a $100.0 million,
9 year term loan ("Term Loan C"). Dobson/Sygnet's obligations under the
Dobson/Sygnet Credit Facility are secured by all current and future assets of
Dobson/Sygnet. Initial proceeds were used primarily to finance the Sygnet
Acquisition described in Note 9. The Company expects to use the remaining
availability to finance Dobson/Sygnet's capital expenditures and general
operations.

Commencing with the quarter ending December 31, 2000, the borrowing under
the Revolving Credit Facility and Term Loan A will reduce quarterly under the
following annual amortization schedule:

Commencing with the quarter ending December 31, 2000, the borrowing under
the Term Loan B will reduce quarterly under the following annual amortization
schedule:

F-43
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

Term Loan C will amortize annually under the following schedule:

On March 25, 1998, the Company's subsidiary DCOC established a $200 million
senior secured credit facility (the "DCOC Credit Facility"). DCOC's obligations
under the DCOC Credit Facility are secured by all current and future assets of
DCOC. At the same time, the Company's subsidiary DOC established a
$250.0 million senior secured credit facility (the "DOC Credit Facility"). On
May 10, 1999, the commitment level and outstanding borrowings on the DCOC Credit
Facility were reduced from the established amount of $200.0 million to
$100.0 million. Subsequently, on July 2, 1999, the Company's lenders increased
the DCOC credit facility commitment level from $100.0 million to
$160.0 million. Although the commitment levels have changed, the obligations
under the DCOC Credit Facility remain secured by all current and future assets
of DCOC. In addition, the DOC Credit Facility remains secured by all of DOC's
stock and the stock or partnership interests of its restricted subsidiaries and
all assets of DOC and its restricted subsidiaries. DCOC is designated an
unrestricted subsidiary with regard to the DOC Facility. The Company and DOC's
wholly owned subsidiaries other than Logix and the Arizona 5 Partnership have
guaranteed DOC's obligations under the DOC Bank Facility. Initial proceeds from
the DCOC Credit Facility and DOC Credit Facility were used primarily to
refinance existing indebtedness and finance the 1998 acquisitions described
above.

The Dobson/Sygnet Credit Facility, the DCOC Credit Facility and the DOC
Credit Facility requires the Company to maintain certain financial ratios. The
failure to maintain such ratios would constitute an event of default,
notwithstanding the Company's ability to meet its debt service obligations.

The Company has received a commitment from Bank of America, N.A. and its
affiliate, Banc of America Securities LLC, on behalf of a group of banks, to
provide the Company with an $800.0 million credit facility, the proceeds of
which will be used primarily to consolidate the indebtedness of the DCOC and DOC
Credit Facilities, to pay the cash portion of certain of its pending
acquisitions and to fund the Company's expected repurchase of its outstanding
$160.0 million principal amount of 11 3/4% DCC Senior Notes due 2007. This new
credit facility will include a $300.0 million revolving credit facility and a
$500.0 million term loan facility, both of which will mature in 2007.

In connection with the closing of the DOC Credit Facility, the Company
extinguished its 1997 Credit Facility and recognized a pretax loss of
approximately $3.3 million as a result of writing off previously capitalized
financing costs associated with the revolving credit facility. Such amount is
included in the Company's consolidated statement of operations, net of tax, for
the nine months ended September 30, 1998, as an extraordinary expense.

SENIOR NOTES

On December 23, 1998, the Company's subsidiary issued $200.0 million of
12.25% Senior Notes maturing in 2008 ("Dobson/Sygnet Senior Notes"). The net
proceeds were used to finance the Sygnet Acquisition described above and to
purchase securities pledged to secure payment of the first six semi-annual
interest payments on the Dobson/Sygnet Senior Notes, which begin on June 15,
1999. The pledged securities are reflected as restricted cash and investments in
the Company's consolidated

F-44
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG-TERM DEBT: (CONTINUED)

balance sheet. The Dobson/Sygnet Senior Notes are redeemable at the option of
the Company in whole or in part, on or after December 15, 2003, initially at
106.125%. Prior to December 15, 2001, the Company may redeem up to 35% of the
principal amount of the Dobson/Sygnet Senior Notes at 112.25% with proceeds from
equity offerings, provided that at least $130.0 million remains outstanding.

On February 28, 1997, the Company issued $160 million of 11.75% Senior Notes
maturing in 2007 ("DCC Senior Notes"). The net proceeds were used to finance the
Maryland/Pennsylvania Acquisition described above and to purchase securities
pledged to secure payment of the first four semi-annual interest payments on the
DCC Senior Notes, which began on October 15, 1997. The pledged securities are
reflected as restricted cash and investments in the Company's consolidated
balance sheet. The DCC Senior Notes are redeemable at the option of the Company
in whole or in part, on or after April 15, 2002, initially at 105.875%. Prior to
April 15, 2000, the Company may redeem up to 35% of the principal amount of the
DCC Senior Notes at 111.750% with proceeds from equity offerings, provided that
after any such redemption at least $104 million remains outstanding.

OTHER NOTES PAYABLE

Other notes payable represents the amount financed with the United States
Government for nine PCS licenses as discussed in Note 9.

Minimum future payments of long-term debt for the years subsequent to
September 30, 1999, are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
- -------------
<S> <C>
2000........................................................ $ 2,160,317
2001........................................................ 21,499,070
2002........................................................ 14,714,502
2003........................................................ 25,244,221
2004........................................................ 39,838,341
2005 and thereafter......................................... 938,501,089
--------------
$1,041,957,540
==============
</TABLE>

INTEREST RATE HEDGES

In March 1999, the Company entered into an interest rate swap that
effectively fixed the interest rate on $110.0 million of the principal
outstanding on the Dobson/Sygnet credit facilities at approximately 5.48% plus a
factor used on our leverage (approximately 8.76% at September 30, 1999). The
term of the interest rate swap is 24 months. In June 1999, the Company entered
into an interest rate cap agreement terminating on June 14, 2001. The cap
agreement minimizes the Company's interest rate exposure by setting a maximum
rate of 7.50% plus a factor used on our leverage (approximately 8.88% at
September 30, 1999) for $160 million of its indebtedness. Any cash settlements
from the Company's interest rate hedges are treated as adjustments to interest
expense and are shown as operating activities in the statements of cash flows.
There have been no cash settlements from interest rate hedges as of
September 30, 1999.

F-45
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. RESTRICTED CASH AND INVESTMENTS:

Restricted cash and investments consist of interest pledge deposits for the
Dobson/Sygnet Senior Notes. The Dobson/Sygnet Senior Notes interest pledge
deposit of approximately $57.8 million includes the initial deposit of
approximately $67.7 million, net of interest earned, and payments issued to
bondholders. Amortization expense of $237,737 (unaudited) and $604,407 was
recorded for the nine months ended September 30, 1998 and 1999, respectively,
for bond premiums recorded with the purchase of the restricted investments. At
September 30, 1999, the carrying value of these investments exceeded the market
value by approximately $639,300.

8. STOCKHOLDERS' DEFICIT:

As of September 30, 1999, the Company's authorized and issued capital stock
is as follows:
<TABLE>
<CAPTION>

Class B Common Stock 31,000 -- $ .001 As declared --

Class C Common Stock 31,000 -- $ .001 As declared --
--------- -------
1,500,000 573,152
========= =======

Senior
Exchangeable Preferred Stock 550,000 209,647 $ 1.00 12.25% Cumulative $ 1,000

Additional Preferred Stock 184,000 69,225 $ 1.00 12.25% Cumulative $ 1,000

Senior
Exchangeable Preferred Stock 500,000 175,402 $ 1.00 13% Cumulative $ 1,000

Class A Preferred Stock 450,000 314,286 $ 1.00 5% Non-cumulative $ 70

Class D Preferred Stock 85,000 75,094 $ 1.00 15% Cumulative $1,131.92

Class E Preferred Stock 405,000 -- $ 1.00 15% Cumulative $1,131.92

Other Preferred Stock 497,000 -- $ 1.00 -- --
--------- -------
2,671,000 843,654
========= =======

<CAPTION>
OTHER
FEATURES,
RIGHTS,
PREFERENCES
CLASS REDEMPTION DATE AND POWERS
- --------------------- ---------------- ------------
<S> <C> <C>
Class A -- Voting
Class B -- Non-voting
Class C -- Non-voting
Senior
Exchangeable Jan. 15, 2008 Non-voting
Additional Jan. 15, 2008 Non-voting
Senior
Exchangeable May 1, 2009 Non-voting
Class A -- Non-voting
after
Class D Dec. 23, 2010 Convertible
after
Class E Dec. 23, 2010 Non-voting
Other -- --
</TABLE>

In May 1999, the Company issued 170,000 shares of 13% senior exchangeable
preferred stock manditorily redeemable in 2009 for $1,000 per share. The net
proceeds from the private offering of the preferred stock were used to redeem
the outstanding shares of the Company's Class F and Class G Preferred Stock, to
reduce bank debt at DCOC and for general corporate purposes, including
acquisitions. Holders of the preferred stock are entitled to cumulative
quarterly dividends from the date of issuance and a liquidation preference of
$1,000 per share with rights over the other classes of capital stock and equal
to the 12.25% Senior Exchangeable Preferred Stock. On or before May 1, 2004, the
Company may pay dividends, at its option, in cash or in additional shares having
an aggregate liquidation preference equal to the amount of such dividends.
Additionally, the preferred stock is redeemable at the option of the Company on
or after May 1, 2004. Holders of the preferred stock have no voting rights.

F-46
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCKHOLDERS' DEFICIT: (CONTINUED)

Through September 30, 1999, the Company issued cumulative quarterly
dividends in the form of 39,226 and 5,402 additional shares of 12.25% and 13.00%
Senior Exchangeable preferred stock, respectively (resulting in a total
liquidation preference of $286.3 million and $179.1 million, respectively, as of
September 30, 1999) which represented non-cash financing activity, and thus are
not included in the accompanying consolidated statements of cash flows.

9. ACQUISITIONS:

On December 23, 1998, the Company's subsidiary, Dobson/Sygnet acquired
Sygnet Wireless, Inc. for $337.5 million, subject to adjustment. The Sygnet
markets include cellular systems in Ohio, Pennsylvania and New York covering an
estimated population base of 2.4 million people.

On March 16, 1999, the Company purchased certain assets and customers
relating to the Ohio 2 RSA for $3.9 million. This completes the acquisition of
the Ohio 2 market, which began on September 2, 1998, when the Company acquired
the FCC license of Ohio 2 RSA for $39.3 million. Ohio 2 is located in north
central Ohio and covers an estimated population base of 262,300.

On September 15, 1999, the Company purchased Arizona 1 RSA for $24 million.
Arizona 1 is located in the Northwest corner of the state and covers an
estimated population base of 135,000 as of September 30, 1999.

The acquisition transactions were accounted for as purchases and,
accordingly, their results of operations have been included in the accompanying
consolidated statements of operations from the respective dates of acquisition.
The unaudited pro forma information set forth below includes all acquisitions
for the period from January 1, 1998 through September 30, 1999, as if the
purchases occurred at the beginning of each period presented. The unaudited pro
forma information is presented for informational purposes only and is not
necessarily indicative of the results of operations that actually would have
been achieved had the acquisitions been consummated at that time:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1998 1999
------------ ---------
(UNAUDITED)
($ IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Operating revenue...................................... $200,738 $245,421
Loss before discontinued operations and extraordinary
items................................................ (71,094) (46,742)
Net loss............................................... (117,272) (93,356)
Net loss applicable to common stockholders............. (140,792) (143,869)
Basic net loss applicable to common stockholders per
common share......................................... $(286.19) $(292.44)
</TABLE>

F-47
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. ACQUISITIONS: (CONTINUED)

PCS LICENSES

In the second quarter of 1997, the Company was granted PCS licenses in the
FCC "F" Block auction for nine markets adjacent to or overlapping the Company's
existing cellular footprint in Oklahoma, Kansas and Missouri. The aggregate bid
for these licenses was $5.1 million after a 15% discount. The Company financed
approximately $4.1 million of the purchase price in July 1997 by notes payable
to the United States Government at an annual interest rate of 6.25% (see
Note 6). Interest only payments are due quarterly on January 15, April 15,
July 15 and October 15 for the first two years. The principal obligations will
be amortized quarterly over an eight-year period, which began in 1999.
Subsequent to September 30, 1999, the Company entered into a definitive
agreement to sell our nine PCS licenses for $1.1 million plus the assumption of
these notes payable.

10. EMPLOYEE BENEFIT PLANS:

401(K) PLAN

The Company maintains a 401(k) plan (the "Plan") in which substantially all
employees of the Company are eligible to participate. The Plan requires the
Company to match 100% of employees' contributions up to 4% of their salary.
Contributions to the Plan charged to the Company's operations were approximately
$193,000 (unaudited) and $619,000 for the nine months ended September 30, 1998
and 1999, respectively.

STOCK OPTION PLAN

Under the Company's Plan, the Board of Directors may grant both incentive
and non-incentive stock options for employees, officers and directors to acquire
Class B Common Stock and Class C Common Stock. Since the Plan's adoption, stock
options have been issued at the market price on the date of grant with an
expiration of ten years from the grant date. Options granted to one employee
during 1997 representing 42.9% of total options granted in 1997 vest as follows:
options to purchase 12% of such shares first become exercisable on each of the
first five anniversaries of the grant date; options to purchase an additional 8%
of such shares first become exercisable on the same dates if annual performance
objectives are achieved, otherwise, the additional 8% of such shares become
fully vested at the end of the ten-year term. The remaining options issued in
1997 and all of the options issued in 1998 and 1996 vest at a rate of 20% per
year. The Company has reserved 30,166 shares of authorized but unissued Class B
Common Stock ("Class B") and 30,166 shares of authorized but unissued Class C
Common Stock ("Class C") for issuance under the Plan.

F-48
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS: (CONTINUED)

Stock options outstanding under the Plan are presented for the periods
indicated.

The following schedule shows the Company's net loss and net loss per share
for each of the nine months ended September 30, 1998 and 1999, respectively, had
compensation expense been determined consistent with SFAS No. 123. The pro forma
information presented below is based on several assumptions and should not be
viewed as indicative of the Company in future periods.

<TABLE>
<CAPTION>
($ IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) 1998 1999
- ---------------------------------------------- ----------- ---------
(UNAUDITED)
<S> <C> <C>
Net loss applicable to common stockholders:
As reported......................................... $(47,624) $(139,467)
Pro forma........................................... $(47,938) $(139,854)
Basic net loss applicable to common stockholders per
common share:
As reported......................................... $(100.65) $ (283.50)
Pro forma........................................... $(101.32) $ (284.28)
</TABLE>

Diluted net loss per common share has been omitted because the impact of
common stock equivalents is anti-dilutive.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions used for options granted in 1999:

<TABLE>
<CAPTION>
CLASS CLASS
(AMOUNTS EXPRESSED IN PERCENTAGES) B C
- ---------------------------------- -------- --------
<S> <C> <C>
Interest rate.............................................. -- 5.03%
Dividend yield............................................. -- --
Expected volatility........................................ -- 44.67%
</TABLE>

The weighted average fair value of options granted using the Black-Scholes
option pricing model for Class C in 1999 was $267.37 assuming an expected life
of ten years.

F-49
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. TAXES:

The benefits for income taxes for the nine months ended September 30, 1998
and 1999, were as follows:

<TABLE>
<CAPTION>
1998 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
Federal income taxes--
Deferred........................................ $(4,096,000) $(24,330,000)

State income taxes (current and deferred)......... (768,000) (4,562,000)
----------- ------------
Total income tax benefit...................... $(4,864,000) $(28,892,000)
=========== ============
</TABLE>

The benefits for income taxes for the nine months ended September 30, 1998
and 1999, differ from amounts computed at the statutory rate as follows:

<TABLE>
<CAPTION>
1998 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
Income taxes at statutory rate (34%).............. $(5,410,000) $(25,852,000)
State income taxes, net of Federal income tax
effect.......................................... (636,000) (3,176,000)
Losses for which no benefit is recognized......... 1,608,000 --
Other, net........................................ (426,000) 136,000
----------- ------------
$(4,864,000) $(28,892,000)
=========== ============
</TABLE>

The tax effects of the temporary differences which gave rise to deferred tax
assets and liabilities at September 30, 1999, were as follows:

<TABLE>
<S> <C>
Current deferred income taxes:
Allowance for doubtful accounts receivable................ $ 619,000
Accrued liabilities....................................... 587,000
-------------
Net current deferred income tax assets.................. 1,206,000
-------------
Noncurrent deferred income taxes:
Fixed assets.............................................. (5,099,000)
Intangible assets......................................... (274,358,000)
Tax credits and carryforwards............................. 62,894,000
-------------
Net noncurrent deferred income tax asset (liability).... (216,563,000)
-------------
Total deferred income tax liabilities................... $(215,357,000)
=============
</TABLE>

At September 30, 1999, the Company had NOL carryforwards of approximately
$163 million, which may be utilized to reduce future Federal income taxes
payable.

12. RELATED PARTY TRANSACTIONS:

At September 30, 1999, the Company had notes and interest receivable of
$7,384,910 due from related parties, including $285,908 from the Company's
directors and officers. The notes bear interest at various interest rates
ranging from 4% to 14.5% at September 30, 1999.

F-50
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. ACCRUED EXPENSES:

Accrued expenses consist of the following at September 30, 1999:

<TABLE>
<S> <C>
Interest.................................................... $16,704,497
Sygnet acquisition costs (see Note 9)....................... 2,934,684
Vacation, wages and other................................... 5,392,189
-----------
Total accrued expenses.................................... $25,031,370
===========
</TABLE>

14. COMMITMENTS:

The Company entered into an equipment supply agreement on December 6, 1995,
and as last amended on January 5, 1999, the Company agreed to purchase
approximately $65 million of cell site and switching equipment between June 24,
1997 and November 23, 2001, to update the cellular systems for the newly
acquired and existing MSAs and RSAs. Of the commitment, approximately
$27.8 million remained at September 30, 1999.

The Company entered into an additional equipment supply agreement with a
second vendor on January 13, 1998. The Company agreed to purchase approximately
$81 million of cell sites and switching equipment between January 13, 1998 and
January 12, 2002, to update the cellular systems for the newly acquired and
existing MSAs and RSAs. Of this commitment, approximately $33.2 million remained
at September 30, 1999.

Future minimum lease payments required under operating leases that have an
initial or remaining noncancellable lease term in excess of one year at
September 30, 1999, are as follows:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
- ------------------
<S> <C>
December 31, 1999........................................... $ 2,485,077

YEARS ENDED:

2000........................................................ $ 9,114,245
2001........................................................ 7,608,863
2002........................................................ 5,925,882
2003........................................................ 5,041,652
2004........................................................ 4,106,595
2005 and thereafter......................................... 21,931,952
</TABLE>

Lease expense under the above leases was approximately $2.1 million
(unaudited) and $5.5 million for the nine months ended September 30, 1998 and
1999, respectively.

15. FAIR VALUE OF FINANCIAL INSTRUMENTS:

F-51
<PAGE>
DOBSON COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. FAIR VALUE OF FINANCIAL INSTRUMENTS: (CONTINUED)

Indicated below are the carrying amounts and estimated fair values of the
Company's financial instruments as of September 30, 1999:

<TABLE>
<CAPTION>
CARRYING
AMOUNT FAIR VALUE
------------ ------------
<S> <C> <C>
Revolving credit facilities...................... $678,000,000 $678,000,000
Dobson/Sygnet Senior Notes....................... 200,000,000 209,500,000
DCC Senior Notes................................. 160,000,000 168,000,000
Other notes payable.............................. 3,957,540 3,993,771
Interest rate hedge.............................. -- 299,580
</TABLE>

16. SUBSEQUENT EVENTS:

Subsequent to September 30, 1999, Logix, a subsidiary of the Company engaged
Lehman Brothers to evaluate strategic alternatives, including the potential
merger of the Company with another entity. Should Logix enter into and complete
a merger transaction, subsequent to the planned spin-off of Logix to certain of
the Company's stockholders, the Company would recognize a tax liability equal to
the tax effect of the excess of the fair value of Logix over its tax basis at
the date of the merger.

On December 14, 1999, the Company launched a tender offer for all of its
11 3/4% Senior Notes at a price of 117%. This offer will expire on January 14,
2000. Any premium paid for the tender of these Senior Notes will be recorded as
an extraordinary loss in the first quarter of 2000.

F-52
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Sygnet Wireless, Inc.

We have audited the accompanying consolidated statements of operations,
shareholders' equity (deficit), and cash flows of Sygnet Wireless, Inc. for the
years ended December 31, 1996 and 1997, and for the period from January 1, 1998
through December 23, 1998 (the date of the sale of the Company). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of operations
and cash flows of Sygnet Wireless, Inc. for the years ended December 31, 1996
and 1997, and for the period from January 1, 1998 through December 23, 1998, in
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Cleveland, Ohio
February 5, 1999

F-53
<PAGE>
SYGNET WIRELESS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
YEAR ENDED DECEMBER 31, 1998 THROUGH
-------------------------- DECEMBER 23,
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
Revenue:
Subscriber revenue................................. $31,784,883 $ 55,153,827 $ 64,785,498
Roamer revenue..................................... 8,737,284 23,377,299 28,034,831
Equipment sales.................................... 2,416,769 4,323,052 5,794,056
Other revenue...................................... 1,607,245 1,679,412 1,653,264
----------- ------------ ------------
Total revenue........................................ 44,546,181 84,533,590 100,267,649

Costs and expenses:
Cost of services................................... 5,258,386 8,948,346 9,433,254
Cost of equipment sales............................ 5,816,144 9,663,151 10,443,870
General and administrative......................... 9,852,004 16,975,592 19,796,012
Selling and marketing.............................. 6,080,308 10,841,059 12,327,160
Merger related costs (Note 2)...................... -- -- 1,883,952
Depreciation and amortization...................... 10,038,439 28,718,937 27,497,687
----------- ------------ ------------
Total costs and expenses............................. 37,045,281 75,147,085 81,381,935
----------- ------------ ------------
Income from operations............................... 7,500,900 9,386,505 18,885,714

Other:
Interest expense................................... 11,173,688 29,901,678 27,895,156
Merger related costs (Note 2)...................... -- -- 5,205,492
Other expense, net................................. 194,723 101,221 319,121
----------- ------------ ------------
Loss before extraordinary item....................... (3,867,511) (20,616,394) (14,534,055)
Extraordinary loss on extinguishment of debt
(Note 4)........................................... (1,420,864) -- --
----------- ------------ ------------
Net loss............................................. $(5,288,375) $(20,616,394) $(14,534,055)
=========== ============ ============
</TABLE>

SEE ACCOMPANYING NOTES.

F-54
<PAGE>
SYGNET WIRELESS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
WILCOM CORPORATION SYGNET COMMUNICATIONS, INC.
COMMON STOCK COMMON STOCK
----------------------------------------- -----------------------------------------------
TYPE A TYPE B TYPE A TYPE B
------------------- ------------------- -------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- -------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance as of January 1,
1996...................... 500 $ 12,500 2,500 $ 62,500 209,362 $ 209,362 1,046,801 $ 1,046,801
Net loss..................
Dividends declared........
Corporate merger.......... (500) (12,500) (2,500) (62,500) 4,360 4,360 21,800 21,800
Retirement of treasury
stock................... (8,024) (40,173)
Sygnet Wireless
capitalization.......... (205,698) (213,722) (1,028,428) (1,068,601)
Capital contribution of
S Corporation
earnings................
Preferred stock
dividend................
Accretion of preferred
stock...................
Exchange of common
shares..................
---- -------- ------ -------- -------- --------- ---------- -----------
Balance as of December 31,
1996...................... -- -- -- -- -- -- -- --
Net loss..................
Preferred stock
dividend................
Accretion of preferred
stock...................
Stock option
compensation............
Excess of redemption price
over carrying value of
preferred stock.........
Net proceeds from issuance
of common shares to
Boston Ventures.........
Exchange of common
shares..................
---- -------- ------ -------- -------- --------- ---------- -----------
Balance as of December 31,
1997...................... -- -- -- -- -- -- -- --
Net loss..................
Exchange of common
shares..................
---- -------- ------ -------- -------- --------- ---------- -----------
Balance as of December 23,
1998...................... -- $ -- -- $ -- -- $ -- -- $ --
==== ======== ====== ======== ======== ========= ========== ===========

<CAPTION>
SYGNET WIRELESS, SYGNET WIRELESS,
INC. INC.
-------------------- --------------------- NOTE
CLASS A CLASS B ADDITIONAL RETAINED RECEIVABLE
-------------------- --------------------- PAID-IN EARNINGS FROM OFFICER/
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT) SHAREHOLDER
--------- -------- ---------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of January 1,
1996...................... -- $ -- -- $ -- $ 4,170,368 $ 753,675 $(249,952)
Net loss.................. (5,288,375)
Dividends declared........ (261,625)
Corporate merger.......... 48,840
Retirement of treasury
stock................... (1,718,991)
Sygnet Wireless
capitalization.......... 6,170,630 61,706 1,220,617
Capital contribution of
S Corporation
earnings................ 2,809,405 (2,809,405)
Preferred stock
dividend................ (690,411)
Accretion of preferred
stock................... (27,617)
Exchange of common
shares.................. 2,653 27 (2,653) (27)
--------- ------- ---------- -------- ----------- ------------ ---------
Balance as of December 31,
1996...................... 2,653 27 6,167,977 61,679 5,812,211 (7,605,730) (249,952)
Net loss.................. (20,616,394)
Preferred stock
dividend................ (1,149,040)
Accretion of preferred
stock................... (46,849)
Stock option
compensation............ 306,000
Excess of redemption price
over carrying value of
preferred stock......... (925,534)
Net proceeds from issuance
of common shares to
Boston Ventures......... 3,000,000 30,000 43,601,710
Exchange of common
shares.................. 1,008,000 10,080 (1,008,000) (10,080)
--------- ------- ---------- -------- ----------- ------------ ---------
Balance as of December 31,
1997...................... 4,010,653 40,107 5,159,977 51,599 47,598,498 (28,222,124) (249,952)
Net loss.................. (14,534,055)
Exchange of common
shares.................. 731,893 7,319 (731,893) (7,319)
--------- ------- ---------- -------- ----------- ------------ ---------
Balance as of December 23,
1998...................... 4,742,546 $47,426 4,428,084 $ 44,280 $47,598,498 $(42,756,179) $(249,952)
========= ======= ========== ======== =========== ============ =========

TREASURY STOCK
----------------------
SHARES AMOUNT
-------- -----------
<S> <C> <C>
Balance as of January 1,
1996...................... 48,197 $(1,718,991)
Net loss..................
Dividends declared........
Corporate merger..........
Retirement of treasury
stock................... (48,197) 1,718,991
Sygnet Wireless
capitalization..........
Capital contribution of
S Corporation
earnings................
Preferred stock
dividend................
Accretion of preferred
stock...................
Exchange of common
shares..................
------- -----------
Balance as of December 31,
1996...................... -- --
Net loss..................
Preferred stock
dividend................
Accretion of preferred
stock...................
Stock option
compensation............
Excess of redemption price
over carrying value of
preferred stock.........
Net proceeds from issuance
of common shares to
Boston Ventures.........
Exchange of common
shares..................
------- -----------
Balance as of December 31,
1997...................... -- --
Net loss..................
Exchange of common
shares..................
------- -----------
Balance as of December 23,
1998...................... -- $ --
======= ===========
</TABLE>

See accompanying notes.

F-55
<PAGE>
SYGNET WIRELESS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
YEAR ENDED DECEMBER 31, THROUGH
---------------------------- DECEMBER 23,
1996 1997 1998
------------- ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss........................................... $ (5,288,375) $(20,616,394) $(14,534,055)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation................................... 5,948,693 16,018,841 15,085,641
Amortization................................... 4,089,746 12,700,096 12,412,046
Compensation expense from issuance of stock
options...................................... -- 306,000 --
Loss on disposal of equipment.................. 177,633 102,955 96,128
Extraordinary loss on extinguishment of debt... 1,420,864 -- --
Changes in operating assets and liabilities:
Accounts receivable.......................... (184,315) (1,854,599) (1,526,182)
Inventory.................................... (287,900) (170,493) (921,077)
Prepaid and deferred expenses................ 28,649 232,548 30,380
Accounts payable and accrued expenses........ 2,424,406 2,866,653 3,494,470
Accrued interest payable..................... 6,481,912 (190,868) (3,366,590)
------------- ------------ ------------
Net cash provided by operating activities.......... 14,811,313 9,394,739 10,770,761

INVESTING ACTIVITIES
Acquisitions of Horizon and Erie................... (254,150,136) (599,442) --
Purchases of property and equipment................ (10,049,999) (25,575,837) (13,654,200)
Proceeds from sale of equipment.................... -- 405,995 444,500
------------- ------------ ------------
Net cash used in investing activities.............. (264,200,135) (25,769,284) (13,209,700)

FINANCING ACTIVITIES
Dividends paid..................................... (261,625) -- --
Proceeds from long-term debt....................... 320,750,000 30,500,000 21,800,000
Principal payments on long-term debt............... (78,000,000) (37,250,000) (18,800,000)
Increase in financing costs........................ (10,290,097) (65,376) --
Net proceeds from issuance of preferred stock...... 19,000,000 -- --
Redemption of preferred stock...................... -- (21,839,451) --
Net proceeds from issuance of common stock......... -- 43,631,710 --
------------- ------------ ------------
Net cash provided by financing activities.......... 251,198,278 14,976,883 3,000,000
------------- ------------ ------------
Increase (decrease) in cash and cash equivalents... 1,809,456 (1,397,662) 561,061
Cash and cash equivalents at beginning of year..... 448,292 2,257,748 860,086
------------- ------------ ------------
Cash and cash equivalents at end of year........... $ 2,257,748 $ 860,086 $ 1,421,147
============= ============ ============
</TABLE>

SEE ACCOMPANYING NOTES.

F-56
<PAGE>
SYGNET WIRELESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997, AND THE
PERIOD FROM JANUARY 1, 1998 THROUGH DECEMBER 23, 1998

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

These financial statements include the combined financial statements of
Sygnet Communications, Inc. (SYGNET) and Wilcom Corporation (Wilcom) through
August 31, 1996, the effective date of the merger described below and the
accounts of Sygnet Wireless, Inc. and its wholly-owned subsidiary Sygnet
Communications, Inc. (Sygnet) (hereinafter collectively referred to as the
"Company"). Intercompany balances and transactions have been eliminated in the
consolidated financial statements. The Company owns and operates in one segment,
cellular telephone systems, serving one large region with an approximate
population of 2.4 million in Northeastern Ohio, Western Pennsylvania and Western
New York.

On August 19, 1996, the shareholders of SYGNET and Wilcom effected a
corporate restructuring whereby Wilcom was merged into SYGNET and shareholders
of Wilcom received 8.72 shares of SYGNET common stock for each share of Wilcom
common stock held as of August 31, 1996, the effective date of the merger.
Immediately prior to the merger, 90% of SYGNET's voting interests were owned by
the same individuals as 100% of Wilcom's voting interests. This merger was a
business combination between entities under common control whereby the assets
and liabilities so transferred were accounted for at historical cost in a manner
similar to that in pooling-of-interests accounting. Also, in conjunction with
this merger, the shareholders of SYGNET amended the articles of incorporation to
change SYGNET's name to Sygnet Wireless, Inc.

Prior to the restructuring, SYGNET and Wilcom had been operating their
cellular business through three partnerships (Youngstown Cellular Telephone
Company [YCTC], Erie Cellular Telephone Company [Erie], and Wilcom Cellular) and
Sharon--Youngstown Cellular, Inc. (Sharon). As a result of the restructuring and
merger, Sharon was renamed Sygnet and is the wholly-owned subsidiary and
operating company of Sygnet Wireless, Inc. The existence of YCTC, Erie, and
Wilcom Cellular terminated on October 1, 1996 when all partnership interests
transferred to Sygnet.

2. SUBSEQUENT EVENT

On December 23, 1998, a wholly-owned subsidiary of Dobson Communications
Corp. (Dobson), acquired all outstanding shares of Class A and B common stock
(including the granted options of the Company as described in Note 11) of the
Company for $337.5 million in cash. In connection with the purchase, the Notes
(as described in Note 5) were tendered for a total price of $1,181.61 for each
$1,000 in principal. The Bank Credit Facility (as described in Note 5) was
repaid and terminated. The Company incurred $7.1 million in merger costs
associated with this business combination. The merger costs included
approximately $4.8 million for an advisory fee and $0.4 million in legal and
accounting fees which are recorded as other non-operating expenses. In addition,
the Company incurred $1.9 million for related employee severance, retention and
stock option plans which are included in costs and expenses.

3. ACQUISITIONS

On October 9, 1996, the Company acquired certain cellular licenses,
property, equipment, customer lists, current assets and current liabilities of
Horizon Cellular Telephone Company of Chautauqua L.P., Horizon Cellular
Telephone Company of Crawford L.P., and Horizon Cellular Telephone Company of
Indiana L.P. (hereinafter collectively referred to as "Horizon") for cash of

F-57
<PAGE>
SYGNET WIRELESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACQUISITIONS (CONTINUED)

$252.9 million. The acquired systems provide cellular service to an estimated
population of 1.4 million in contiguous markets in Western Pennsylvania and
Western New York.

On September 30, 1995, SYGNET, as a general partner, purchased 95.46% of
Erie for cash of $40.53 million. On November 30, 1995, Sharon purchased 4.54% of
Erie for $1.92 million, which was paid on February 12, 1996.

The above transactions were accounted for as purchases and, accordingly, the
results of operations of the companies acquired have been included in the
consolidated financial statements since the date of acquisition.

Cash paid for the acquisitions in 1996 is summarized below:

<TABLE>
<S> <C>
Current assets acquired..................................... $ 3,613,696
Property and equipment...................................... 18,986,400
Cellular licenses........................................... 207,223,616
Customer lists.............................................. 25,700,000
Current liabilities assumed................................. (774,134)
------------
Net assets acquired......................................... 254,749,578
Cash paid in 1997........................................... (599,442)
------------
Cash paid in 1996........................................... $254,150,136
============
</TABLE>

4. SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS

The Company considers all liquid investments with a maturity of three months
or less when purchased to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and are depreciated over their
estimated useful lives (ranging from 2.5 to 19 years) calculated under the
straight-line or double declining balance methods.

INTANGIBLE ASSETS

CELLULAR LICENSES AND CUSTOMER LISTS

The FCC issues licenses that enable cellular carriers to provide cellular
service in specific geographic areas. The FCC grants licenses for a term of up
to 10 years and generally grants renewals if the licensee has complied with its
obligations under the Communications Act of 1934. In 1993, the FCC adopted
specific standards to apply to cellular renewals, concluding it will award a
renewal to a cellular licensee that meets certain standards of past performance.
Historically, the FCC has granted license renewals routinely. The Company
believes that it has met, and will continue to meet all requirements necessary
to secure renewal of its cellular licenses.

The Company has acquired cellular licenses and customer lists through its
acquisition of interests in various cellular systems. The cost of licenses and
customer lists acquired was $231,003,426 in 1996.

F-58
<PAGE>
SYGNET WIRELESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company uses a 40 year useful life to amortize its licenses under the
straight-line method. Purchased cellular and paging customer lists are being
amortized over 5 years under the straight-line method. Amortization expense was
$3,652,470 and $11,559,031 in 1996 and 1997, respectively, and $11,295,083 for
the period from January 1 through December 23, 1998.

The ongoing value and remaining useful lives of intangible and other
long-term assets are subject to periodic evaluation and the Company currently
expects the carrying amounts to be fully recoverable. When events and
circumstances indicate that intangible and other long-term assets might be
impaired, an undiscounted cash flow methodology would be used to determine
whether an impairment loss would be recognized. Measurement of the amount of the
impairment may be based on appraisal, market values of similar assets, or
estimated discounted cash flows reflecting the use and ultimate disposition of
the assets.

DEFERRED FINANCING COSTS

Deferred financing costs are being amortized over the terms of the bank
credit facility and senior notes. Amortization expense was $437,276 and
$1,141,065 in 1996 and 1997, respectively, and $1,116,963 for the period from
January 1, 1998 through December 23, 1998. Upon entering into a new bank credit
facility in October 1996, an extraordinary loss of $1,420,864 was incurred to
write-off unamortized financing costs under the extinguished bank credit
agreement as described in Note 5.

REVENUE RECOGNITION

The Company earns revenue primarily by providing cellular services to its
customers (Subscriber Revenue) and from the usage of its system by the customers
of other cellular carriers (Roamer Revenue). Access revenue for Subscriber
Revenue is billed one month in advance. Revenue is recognized as service is
rendered. Subscriber acquisition costs (primarily commissions and loss on
equipment sales) are expensed when incurred.

ADVERTISING COSTS

Advertising costs are recorded as expense when incurred. Advertising expense
was $1,225,151 and $1,841,138 in 1996 and 1997, respectively, and $1,851,047 for
the period from January 1, 1998 through December 23, 1998.

STOCK COMPENSATION

The Company accounts for its stock-based employee compensation arrangements
based on the intrinsic value of the equity instruments granted, as set forth in
APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related
interpretations.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Actual
results may differ from those estimates.

F-59
<PAGE>
SYGNET WIRELESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SIGNIFICANT CONCENTRATIONS

In connection with providing cellular services to customers of other
cellular carriers, the Company has contractual agreements with those carriers
which provide for agreed upon billing rates between the parties. Approximately
48%, 43% and 43% of the Company's Roamer Revenue was earned from two cellular
carriers in 1996 and 1997, and for the period from January 1, 1998 through
December 23, 1998, respectively.

FINANCIAL INSTRUMENTS

Derivative financial instruments are used by the Company in the management
of interest rate exposure and are accounted for on an accrual basis. Income and
expense are recorded in the same category as that arising from the related
liability being hedged (i.e., adjustments to interest expense).

The Company uses variable interest rate credit facilities to finance
acquisitions and operations of the Company. The Company may reduce its exposure
to fluctuations in interest rates by creating offsetting positions through the
use of derivative financial instruments. The Company does not use derivative
financial instruments for trading or speculative purposes, nor is the Company a
party to leveraged derivatives. The notional amount of interest rate swaps is
the underlying principal amount used in determining the interest payments
exchanged over the life of the swap. The notional amount is not a measure of the
Company's exposure through its use of derivatives.

The Company may be exposed to credit loss in the event of nonperformance by
the counterparties to its interest rate swap agreements. The Company anticipates
the counterparties will be able to fully satisfy their obligations under the
agreements.

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, which is
required to be adopted in years beginning after June 15, 1999. Because of the
Company's minimal use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on earnings or the
financial position of the Company.

RECLASSIFICATION

Certain 1996 and 1997 amounts have been reclassified to conform with 1998
presentation.

5. LONG-TERM DEBT

On September 19, 1996, the Company Issued $110,000,000 11 1/2% unsecured
Senior Notes due October 1, 2006 (the Notes). The Notes paid interest
semiannually on April 1 and October 1 of each year commencing April 1, 1997. The
Notes were redeemable at the option of the Company at redemption prices
(expressed as a percentage of principal amount) ranging from 105.75% in 2001 to
100.00% in 2005 and thereafter. Among other things, the Notes contain certain
covenants which limited additional indebtedness, payment of dividends, sale of
assets or stock, changes in control and transactions with related parties. The
proceeds from the Notes were used to repay amounts borrowed under a $75 million
bank credit agreement and to finance the acquisition of Horizon described in
Note 3. The notes were retired in connection with the sale of the Company
described in Note 2.

F-60
<PAGE>
SYGNET WIRELESS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT (CONTINUED)

On October 9, 1996, Sygnet entered into a new financing agreement (the Bank
Credit Facility) with a commercial bank group. The Bank Credit Facility was a
senior secured reducing revolver that provided Sygnet the ability to borrow up
to $300 million through June 30, 1999. Mandatory reductions in the revolver were
to occur quarterly thereafter through June 30, 2005, when the Bank Credit
Facility was to terminate. The Bank Credit Facility was secured by certain
assets and the stock of Sygnet. The Bank Credit Facility provided for various
borrowing rate options based on either a fixed spread over the London Interbank
Offered Rate (LIBOR) or the prime rate. Interest payments were made quarterly.
The Bank Credit Facility was retired in connection with the sale of the Company
described in Note 2.

Among other things, the Bank Credit Facility contained financial covenants
which required the maintenance of debt service ratios and the hedging of
interest rate risk and limited distributions to shareholders and sales of
assets. In connection with these covenants, the Company has a three year
interest rate swap with a total underlying notional amount of $80 million. The
swap agreement converted the interest rate on $80 million notional amount of the
credit facility from a variable rate based upon a three month LIBOR (5.25% at
December 23, 1998) to fixed rates ranging from 5.79% to 6.03%. Amounts paid or
received under these agreements are recognized as adjustments to interest
expense.

Interest paid was $4,691,776 and $30,076,031 in 1996 and 1997, respectively,
and $31,294,880 for the period from January 1, 1998 through December 23, 1998.

6. LEASES

The Company has entered into various operating leases for land and office
facilities. Leases for tower sites provide for periodic extensions of lease
periods with future lease payments indexed to the consumer price index.

Rent expense was $906,042 and $2,077,644 in 1996 and 1997, respectively, and
$2,411,310 for the period from January 1, 1998 through December 23, 1998.

7. RETIREMENT PLAN

The Company sponsors a 401(k) retirement and profit sharing plan which
covers substantially all its employees. Eligible employees can contribute from
1% to 15% of their compensation. The Company, at its discretion, may match a
portion of the employee's contribution. The Company may also, at its discretion,
make additional profit sharing contributions to the plan. In connection with the
sale of Company described in Note 2, the Plan will be merged with the Dobson
401(k) plan. Total pension expense was $181,000 and $293,000 in 1996 and 1997,
respectively, and $356,747 for the period from January 1, 1998 through
December 23, 1998.

8. REDEEMABLE PREFERRED STOCK AND WARRANTS

On April 3, 1997, 100,000 shares of Series A Senior Cumulative Nonvoting
Preferred Stock (Preferred Stock) were redeemed by the Company at a cost of
$10,000,000 which was funded by the Bank Credit Facility. On June 20, 1997, the
remaining 118,394.51 shares of Preferred Stock were redeemed by the Company at a
cost of $11,839,451. This redemption was funded by the Common Stock Sale
described in Note 9.

F-61
<PAGE>
SYGNET WIRELESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. REDEEMABLE PREFERRED STOCK AND WARRANTS (CONTINUED)

The Preferred Stock had a redemption value of $100 per share and was
recorded at fair value on the date of issuance less issuance costs. Dividends
were cumulative from the date of issuance, accrued quarterly in arrears and were
payable in shares of Preferred Stock. The dividend rates increased annually from
15% in 1997 to 21% in 2000 and thereafter. As of December 31, 1996, the Company
accrued stock dividends in the amount of $690,411 (which represented 6,904
shares). The Preferred Stock included the potential issuance of warrants to
purchase shares of the Company's Class A Common Stock. No warrants were issued.
For financial reporting purposes, the excess of the redemption value of the
Preferred Stock over the carrying value was accreted by periodic charges to
additional paid-in capital over the life of the issue.

The Company has authorized 5 million shares of Nonvoting Preferred Stock,
par value $.01 per share, of which 500,000 are designated as Series A Senior
Cumulative Nonvoting Preferred Stock.

The Company has also authorized 10 million shares of Voting Preferred Stock,
par value $.01 per share, none of which are issued.

9. SHAREHOLDERS' EQUITY

On June 20, 1997, the Company issued and sold 3,000,000 shares of Class A
Common Stock, $0.01 par value, to Boston Ventures Limited Partnership V (Boston
Ventures) at a price of $15 per share (Common Stock Sale). The proceeds of $43.6
million, net of issuance fees of $1.4 million, were used to redeem the remaining
outstanding Preferred Stock as described in Note 8 and to reduce amounts
outstanding under the Bank Credit Facility. As a condition of the Common Stock
Sale, Boston Ventures appointed two representatives on the Company's eleven
member board of directors.

In August 1997, Boston Ventures purchased 1,000,000 shares of Class B Common
Stock from shareholders pursuant to a tender offer which upon purchase became
Class A Common Stock.

On August 28, 1996, the Company approved a plan to recapitalize the Company
whereby the Sygnet common stock Type A (205,698 shares) and Type B (1,028,428
shares) were converted into 6,170,630 shares of Sygnet Wireless, Inc. Class B
common stock in a 5 for 1 split, effective September 20, 1996. These shares are
entitled to ten votes per share.

Under the most restrictive of the covenants discussed in Note 5, the Company
could not declare any dividends on its common stock through December 23, 1998.

On December 29, 1994, the Company received a promissory note from an
officer/shareholder for $249,952 for the purchase of common shares from a
shareholder. The note required annual payment of interest at 8.23% with
principal repayment commencing on December 31, 1998 through December 31, 2001.
The officer/shareholder repaid 100% of the note and interest accrued on
December 29, 1998.

10. INCOME TAXES

On August 31, 1996, Sygnet and Wilcom terminated their status as Subchapter
S Corporations. As a result of this termination, application of the provisions
of Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR INCOME
TAXES, requires deferred income taxes to be provided for differences in the
basis for tax purposes and for financial accounting purposes of recorded assets
and liabilities. As a result of the termination of their Subchapter S
Corporation status, SYGNET and Wilcom contributed their undistributed earnings
to additional paid-in capital. At December 23, 1998,

F-62
<PAGE>
SYGNET WIRELESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. INCOME TAXES (CONTINUED)

the Company has net deferred tax assets of $37.0 million which includes net
operating loss carryforwards of $45.2 million that expire in 2012 and 2013. For
financial reporting purposes, a valuation allowance of $12.6 million has been
recognized to offset the net deferred tax assets related primarily to the net
operating loss carryforwards.

The components of the income tax provision (benefit) in the consolidated
statements of operations for the years ended December 31, 1996 and 1997, and for
the period January 1, 1998 through December 23, 1998, are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Cumulative effect of conversion from S to C corporation
status............................................... $ 745,000 $ -- $ --
Deferred income tax (benefit).......................... (1,898,500) (6,697,800) (4,782,900)
Valuation allowance.................................... 1,153,500 6,097,800 4,782,900
----------- ----------- -----------
Total provision for income tax (benefit)............... $ -- $ -- $ --
=========== =========== ===========
</TABLE>

11. STOCK OPTION PLAN

The Company has stock option plans that provide for the purchase of Class A
common stock by employees and directors of the Company. Under the stock option
plans, the Company is authorized to issue 1,250,000 options for the purchase of
shares of Class A common stock (1,000,000 for employees and 250,000 for
non-employee directors). These options vest over a period ranging from grant
date to five years, are exercisable based upon the terms of the grants and
expire at the end of ten years. The Company applies APB Opinion No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related interpretations in
accounting for the plan, which requires that for certain options granted, the
Company recognizes as compensation expense the excess of the fair value for
accounting purposes of the common stock over the exercise price of the options.
For the majority of options, no compensation cost has been recognized. Had stock
compensation plans been determined based on the fair value at the grant dates
for awards under those plans consistent with the method of SFAS No. 123,
ACCOUNTING FOR STOCK-BASED COMPENSATION, the Company's net loss would have
increased by $24,000 and $625,000 from the amounts reported in 1996 and 1997,
respectively, and $419,000 from the amounts reported for the period from
January 1, 1998 through December 23, 1998.

For pro forma calculations, the fair value of each option is estimated on
the date of grant using the Minimum Value option-pricing model with the
following weighted-average assumptions used for grants in 1996, 1997 and 1998:
risk-free interest rates ranging from 6.9% to 5.9% and average expected lives
ranging from 5.0 to 7.5 years for issued options.

F-63
<PAGE>
SYGNET WIRELESS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. STOCK OPTION PLAN (CONTINUED)

A summary of the status of the Company's stock option plan as of
December 31, 1996 and 1997, and December 23, 1998, and changes during the
periods then ended is presented below:

<TABLE>
<CAPTION>
1996 1997 1998
-------------------- -------------------- --------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
-------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year............ -- $ -- 533,200 $10.00 716,200 $10.08
Granted..................................... 533,200 10.00 183,000 10.31 210,500 18.03
Exercised................................... -- -- -- -- -- --
Canceled.................................... -- -- -- -- (1,000) 20.00
------- ------ ------- ------ ------- ------
Outstanding at year end..................... 533,200 $10.00 716,200 $10.08 925,700 $11.88
======= ====== ======= ====== ======= ======
Options exercisable at year end............. -- 651,200 815,700
======= ======= =======
Weighted-average fair value of options
granted during the year................... $ -- $ 7.80 $ 1.65
======= ======= =======
Weighted-average remaining contractual
life...................................... 9.68 8.87 8.71
======= ======= =======
</TABLE>

At December 23, 1998, there were 324,300 options available for future grant.

12. COMMITMENTS

On June 8, 1998, the Company entered into an agreement with Pinellas
Communications to purchase the license to operate a cellular telephone system in
the Rural Service Area PA-2. The purchase price is $6 million and the
transaction is expected to close in 1999.

F-64
<PAGE>
REPORT OF INDEPENDENT AUDITORS

Board of Directors
American Cellular Corporation

We have audited the consolidated balance sheets of American Cellular
Corporation and subsidiaries (the Company) as of December 31, 1998 and
September 30, 1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the period from February 26, 1998 (Date
of Formation) to December 31, 1998 and the nine months ended September 30, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
American Cellular Corporation and subsidiaries at December 31, 1998 and
September 30, 1999, and the consolidated results of its operations and its cash
flows and for the period from February 26, 1998 (Date of Formation) to
December 31, 1998 and the nine months ended September 30, 1999, in conformity
with generally accepted accounting principles.

Ernst & Young LLP

Chicago, Illinois
December 1, 1999

F-65
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 34,015 $ 43,330
Restricted short-term investments......................... 26,550 27,729
Accounts receivable, net of allowance for doubtful
accounts of $2,084 in 1998 and $1,062 in 1999........... 26,494 39,367
Inventories............................................... 2,005 4,117
Prepaids and other current assets......................... 1,569 2,128
---------- ----------
Total current assets........................................ 90,633 116,671
Cellular facilities, equipment, and other, net.............. 159,792 177,703
Other assets................................................ 1,267,175 1,203,756
---------- ----------
Total assets................................................ $1,517,600 $1,498,130
========== ==========
</TABLE>

See notes to consolidated financial statements.

F-66
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 3,000 $ 4,000
Accounts payable.......................................... 6,022 5,457
Interest payable.......................................... 22,061 28,359
Accrued operating expenses................................ 16,620 12,407
Income and other taxes payable............................ 3,398 7,679
Deferred revenue.......................................... 6,170 5,926
Other current liabilities................................. 989 1,307
---------- ----------
Total current liabilities................................... 58,260 65,135
Long-term debt.............................................. 1,195,971 1,193,134
Deferred income taxes....................................... -- 3,977
Stockholders' equity:
Series A cumulative redeemable preferred stock, $0.01 par
value,
$100 liquidation value, net of $2,000 notes receivable
from
stockholders; authorized 5,000,000 shares; 3,250,000
shares
issued and outstanding, including accrued dividends of
$21,375
at December 31, 1998 and $53,862 at September 30,
1999.................................................... 344,375 376,862
Common Stock, $0.01 par:
Class A: Authorized 475,000 shares; 250,000 shares
issued
and outstanding at December 31, 1998 and 254,672
shares
issued and outstanding at September 30, 1999.......... 3 3
Class B: Authorized 25,000 shares; 19,687 shares issued
and 19,387 shares outstanding at December 31, 1998 and
15,315 shares issued and 14,715 shares outstanding at
September 30, 1999.................................... -- --
Additional paid-in capital.............................. 25,191 25,191
Accumulated deficit....................................... (106,200) (166,172)
---------- ----------
Total stockholders' equity.................................. 263,369 235,884
---------- ----------
Total liabilities and stockholders' equity.................. $1,517,600 $1,498,130
========== ==========
</TABLE>

See notes to consolidated financial statements.

F-67
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
FEBRUARY 26, FEBRUARY 26,
1998 (DATE OF 1998 (DATE OF NINE MONTHS
FORMATION) TO FORMATION) TO ENDED
DECEMBER 31, SEPTEMBER 30 SEPTEMBER 30,
1998 1998 1999
------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES
Subscriber revenues.................................... $ 58,922 $ 27,828 $ 92,346
Roaming revenues....................................... 36,542 19,592 75,989
Toll revenues.......................................... 19,180 10,163 30,409
Equipment sales........................................ 3,740 1,682 7,087
Other.................................................. 4,025 1,840 6,238
-------- -------- --------
Total revenues......................................... 122,409 61,105 212,069

COSTS AND EXPENSES
Cost of cellular service............................... 10,917 4,922 18,154
Cost of equipment sold................................. 7,271 3,246 13,128
General and administrative............................. 19,262 8,974 32,565
Sales and marketing.................................... 18,363 7,410 21,972
Depreciation and amortization.......................... 45,569 22,506 72,607
Nonrecurring charges................................... 4,355 4,154 --
-------- -------- --------
Total costs and expenses............................... 105,737 51,212 158,426
-------- -------- --------
Operating income....................................... 16,672 9,893 53,643

OTHER INCOME (EXPENSE)
Interest expense....................................... (61,477) (33,864) (80,620)
Interest income........................................ 5,036 3,744 3,454
Other income (expense), net............................ (100) 250 82
-------- -------- --------
(56,541) (29,870) (77,084)
-------- -------- --------
Loss before provision for income taxes................. (39,869) (19,977) (23,441)
Provision for income taxes............................. (530) -- (4,044)
-------- -------- --------
Net loss............................................... $(40,399) $(19,977) $(27,485)
======== ======== ========
</TABLE>

See notes to consolidated financial statements.

F-68
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SERIES A CLASS A CLASS B
-------------------- ------------------- ---------------------
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL
-------------------- ------------------- --------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT
--------- -------- -------- -------- -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial capital
contributions............. 3,250,000 $323,000 250,000 $3 -- $ -- $24,997 $ --
Capital contributions,
net....................... -- -- -- -- 19,387 -- 194 --
Excess purchase price over
predecessor basis......... -- -- -- -- -- -- -- (44,426)
Accrued preferred stock
dividends................. -- 21,375 -- -- -- -- -- (21,375)
Net loss for the period from
February 26, 1998 (Date of
Formation) to
December 31, 1998......... -- -- -- -- -- -- -- (40,399)
--------- -------- ------- -- ------ ---------- ------- ---------
Balance at December 31,
1998...................... 3,250,000 344,375 250,000 3 19,387 -- 25,191 (106,200)
Conversion of Class B
stock..................... -- -- 4,672 -- (4,672) -- -- --
Accrued preferred stock
dividends................. -- 32,487 -- -- -- -- -- (32,487)
Net loss for the nine months
ended September 30,
1999...................... -- -- -- -- -- -- -- (27,485)
--------- -------- ------- -- ------ ---------- ------- ---------
Balance at September 30,
1999...................... 3,250,000 $376,862 254,672 $3 14,715 $ -- $25,191 $(166,172)
========= ======== ======= == ====== ========== ======= =========
</TABLE>

See notes to consolidated financial statements.

F-69
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
FEBRUARY 26, 1998 FEBRUARY 26, 1998 NINE MONTHS
(DATE OF FORMATION) (DATE OF FORMATION) ENDED
TO DECEMBER 31, TO SEPTEMBER 30, SEPTEMBER 30,
1998 1998 1999
------------------- ------------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss................................... $ (40,399) $ (19,977) $(27,485)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
expense................................ 45,569 22,506 72,607
Amortization of deferred financing
costs.................................. 2,393 2,264 3,306
Deferred income tax expense............ -- -- 3,977
Accretion of discount on Senior
Notes.................................. 137 88 163
Amortization of premium on restricted
investments............................ 222 199 229
Amortization of covenant not to
compete................................ (500) -- --
Change in working capital components:
Accounts receivable.................. 2,666 (3,642) (12,873)
Inventories.......................... (1,211) (492) (2,112)
Prepaids and other current assets.... 297 (1) (559)
Accounts payable..................... 2,074 (1,351) (565)
Interest payable..................... 22,061 28,175 6,298
Accrued operating expenses........... (472) 4,005 (4,213)
Income and other taxes payable....... (19) 298 4,281
Deferred revenue..................... 1,537 1,084 (244)
Other current liabilities............ 940 399 318
----------- ----------- --------
Net cash provided by operating
activities............................... 35,295 33,555 43,128
INVESTING ACTIVITIES
Acquisition of cellular operations, net of
cash acquired............................ (1,418,741) (1,418,741) --
Purchase of fixed assets................... (24,260) (6,625) (43,581)
Change in restricted investments, net...... (69,744) (82,612) 12,187
----------- ----------- --------
Net cash used in investing activities...... (1,512,745) (1,507,978) (31,394)
FINANCING ACTIVITIES
Proceeds from sale of preferred and common
stock.................................... 348,194 348,194 --
Proceeds from issuance of Senior Notes..... 282,834 282,834 --
Borrowings against (repayment on) credit
facility................................. 916,000 916,000 (2,000)
Deferred financing costs................... (35,563) (35,563) (419)
----------- ----------- --------
Net cash provided by (used in) financing
activities............................... 1,511,465 1,511,465 (2,419)
----------- ----------- --------
Increase in cash and cash equivalents...... 34,015 37,042 9,315
Cash and cash equivalents at beginning of
period................................... -- -- 34,015
----------- ----------- --------
Cash and cash equivalents at end of
period................................... $ 34,015 $ 37,042 $ 43,330
=========== =========== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest................................. $ 36,886 $ 70,819
Income taxes............................. 351 1,130
</TABLE>

See notes to consolidated financial statements.

F-70
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1999

1. ORGANIZATION, BASIS OF PRESENTATION, AND PENDING SALE OF BUSINESS

American Cellular Corporation, a Delaware corporation, was formed on
February 26, 1998 to acquire the operations of PriCellular Corporation (see Note
3). American Cellular Corporation and Subsidiaries (the Company), is principally
engaged in the ownership and operation of cellular telephone systems. The
Company operates in one business segment pursuant to Statement of Financial
Accounting Standards (SFAS) No. 131, "Disclosures About Segments of an
Enterprise and Related Information."

The consolidated financial statements include the assets, liabilities, and
results of operations of entities in which the Company has a controlling
interest. All significant intercompany balances and transactions have been
eliminated.

PENDING SALE OF BUSINESS

On October 5, 1999, American Cellular Corporation entered into an Agreement
and Plan of Merger, (the Merger Agreement) pursuant to which a newly-formed
joint venture of Dobson Communications Corporation and AT&T Wireless Systems,
Inc. will, subject to the terms and conditions set forth in the Merger
Agreement, acquire the Company by merging a wholly owned subsidiary of the joint
venture with and into the Company (the Merger). Pursuant to the Merger
Agreement, each share of Class A common stock, par value $.01 per share, of the
Company will, at the effective time of the Merger (the Effective Time), be
converted into the right to receive $3,244.24 per share in cash, plus interest
thereon for the period commencing January 1, 2000 through and including the
closing date at a rate of 8% per annum (the Common Stock Purchase Price). As
provided in the Merger Agreement, the Common Stock Purchase Price is subject to
adjustment in the event shares of common stock are repurchased by the Company
pursuant to stock repurchase rights prior to the Effective Time.

The Merger Agreement further provides that each share of nonvoting Class B
common stock, par value $.01 per share, of the Company issued and outstanding
immediately prior to the Effective Time will become fully vested and will
automatically be converted into one share of Class A common stock at the
Effective Time in accordance with the terms of the grant thereof and, as such,
will there upon be subject to conversion into the right to receive the Common
Stock Purchase Price. In addition, each share of nonvoting Series A Preferred
Stock, par value $.01 per share, of the Company issued and outstanding
immediately prior to the Effective Time will, consistent with the terms of such
preferred stock designated in the Company's certificate of incorporation, be
converted at the Effective Time into the right to receive $100 per share in cash
plus all accrued but unpaid dividends thereon to and including the Effective
Time.

Concurrent with the execution of the Merger Agreement, certain stockholders
of the Company executed a stockholder Voting Agreement, dated as of October 5,
1999, pursuant to which, among other things, such stockholders agreed to vote
all shares beneficially owned by such persons in favor of the Merger and each of
the other transactions contemplated by the Merger Agreement at any meeting of
the Company's stockholders in connection with the Merger (or otherwise to
consent in writing thereto, as the case may be). A majority of the stockholders
of the Company voted to approve the Merger Agreement and the transactions
contemplated thereby, including the Merger, at a meeting of the stockholders
held on October 5, 1999.

F-71
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

1. ORGANIZATION, BASIS OF PRESENTATION, AND PENDING SALE OF BUSINESS (CONTINUED)

The completion of the Merger, which is expected to close in the first
quarter of 2000, is subject to certain conditions, including the expiration or
earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Acts of 1976, as amended, and the approval of the Federal
Communications Commission.

2. SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL INFORMATION

The financial information for the period from February 26, 1998 (date of
formation) to September 30, 1998, is unaudited but includes all adjustments
consisting only of normal and recurring accruals that mangement considers
necessary for a fair presentation of its consolidated operating results and cash
flows. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to the Rules and Regulations of the
Securities and Exchange Commission. The results of the interim periods are not
necessarily indicative of future results.

USE OF ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, restricted investments,
accounts receivable, and accounts payable approximate fair value. See Note 5 for
fair value of long-term debt.

CASH EQUIVALENTS

The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost (first in, first out method) or
market. Inventories consist primarily of cellular telephones and accessories.

CELLULAR FACILITIES, EQUIPMENT, AND OTHER

Cellular facilities, equipment, and other fixed assets are recorded at cost,
including labor associated with construction. Depreciation is computed using the
straight-line method over the estimated useful lives, typically three to seven
years.

INVESTMENTS IN CELLULAR OPERATIONS

The Company owns a 44.5% interest in a joint venture with SBC
Communications, Inc. (SBC). Under the terms of the joint venture agreement, the
Company recorded preferential distributions which

F-72
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

totaled $2.6 million for the period from June 25, 1998, the date of the
PriCellular acquisition, through December 31, 1998 and $4.4 million for the nine
months ended September 30, 1999, which are included in other revenues, SBC has
operating control of the properties and, accordingly, the Company accounts for
its investment using the cost method. The Company also had an option to put its
joint venture interest to SBC which it exercised for $39.1 million on
December 1, 1999. The sale of the Company's investment, which is expected to
close in the first quarter of 2000, will result in a pretax gain of
approximately $3.6 million.

OTHER ASSETS

Other assets consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Goodwill/cellular licenses.................................. $1,175,479 $1,175,479
Investments in cellular operations.......................... 35,531 35,531
Deferred financing costs.................................... 35,563 35,982
Restricted investments...................................... 42,972 29,377
Subscriber lists............................................ 11,233 11,233
Accumulated amortization.................................... (33,603) (83,846)
---------- ----------
$1,267,175 $1,203,756
========== ==========
</TABLE>

Goodwill/cellular licenses represent the excess of purchase price over the
fair market value assigned to the net tangible and identifiable intangible
assets of the business acquired.

The Company uses a 20-year life to amortize goodwill/cellular licenses.
Accumulated amortization of goodwill/cellular licenses was approximately
$29.3 million and $73.5 million as of December 31, 1998 and September 30, 1999,
respectively. The Company periodically reviews the carrying value of goodwill/
cellular licenses to determine whether such amounts are recoverable based on
undiscounted future cash flows of the Company in order to determine whether a
reduction to fair value is necessary. The Company has determined that no such
reductions were necessary through September 30, 1999.

Deferred financing costs primarily represent underwriting and related fees
incurred in connection with the issuance of the Company's long-term debt. These
costs are amortized using the effective yield method and the amortization
expense is included in interest expense. Accumulated amortization of deferred
financing costs was approximately $2.4 million and $5.7 million as of
December 31, 1998 and September 30, 1999, respectively.

Approximately $82.4 million of the proceeds from the issuance of the 10.5%
Senior Notes (see Note 5) was used to acquire certain treasury securities
sufficient to pay the first six scheduled interest payments of those notes.
Approximately $12.7 million of securities were sold in 1998 and $12.9 million of
securities were sold in 1999 to satisfy the interest payments with no realized
gain or loss. These securities are held in an escrow account pursuant to a
Pledge Escrow and Assignment Agreement. The restricted investments are
classified in the balance sheet according to their maturities. These treasury

F-73
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

securities mature through May 2001, bear interest rates from 5.625% to 6.375%,
and are considered as held to maturity.

The Company amortizes subscriber lists over a three-year period. Accumulated
amortization was approximately $1.9 million and $4.7 million as of December 31,
1998 and September 30, 1999, respectively.

REVENUE RECOGNITION

The Company earns revenue by providing access to its cellular system and for
usage of its cellular system (collectively subscriber revenues), for providing
service to customers from other cellular systems who roam through the service
area (roaming revenues), and for long-distance calls placed by the Company's
customers and those of other carriers within the Company's service area (toll
revenues). Access revenue is billed one month in advance and is recognized when
earned. Airtime, long-distance, and roaming revenues are recognized when the
service is rendered. Equipment sales are recognized on delivery of the equipment
to the customer.

ADVERTISING COSTS

Advertising costs relating to new subscribers are expensed in the period in
which they are incurred. Advertising expense amounted to $3.7 million and
$4.9 million for the periods ended December 31, 1998 and September 30, 1999,
respectively.

COMPREHENSIVE LOSS

In 1998, the Company adopted SFAS No. 130 "Reporting Comprehensive Income."
Net loss for the periods ended December 31, 1998 and September 30, 1999, are the
same as comprehensive loss defined pursuant to SFAS No. 130.

CONCENTRATIONS OF CREDIT RISK

No single customer is large enough to pose a significant financial risk to
the Company. The Company maintains an allowance for losses based on the expected
collectibility of accounts receivable. Credit losses have been within
management's expectations.

PENDING ACCOUNTING STANDARD

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
will be adopted by the Company effective January 1, 2001. The Statement will
require the Company to recognize all derivatives, including interest rate swaps
and collars, on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in fair value of derivatives will
either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company has not yet determined what the effect of
Statement 133 will be on the results of operations and financial position of the
Company.

F-74
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECLASSIFICATIONS

Certain items have been reclassified in the December 31, 1998 consolidated
financial statements to conform to the current presentation.

3. ACQUISITION OF PRICELLULAR CORPORATION

On June 25, 1998, the Company acquired PriCellular Corporation (PCC)
pursuant to an Agreement and Plan of Merger (the Merger Agreement) dated
March 6, 1998 for approximately $1.5 billion. The acquisition was accounted for
utilizing the purchase method of accounting. The results of operations for PCC
are included in the Company's consolidated statements of operations beginning
July 1, 1998. The results of operations do not differ materially than if the
closing date had been used.

The allocation of the purchase price to the fair value of net assets
acquired is as follows (in thousands):

<TABLE>
<S> <C>
Cash........................................................ $ 51,460
Accounts receivable......................................... 29,160
Cellular facilities and equipment........................... 149,891
Investment in cellular operations........................... 35,531
Other assets................................................ 2,660
Goodwill.................................................... 1,175,479
Subscriber lists............................................ 11,233
Excess purchase price over predecessor basis................ 44,426
Total liabilities assumed................................... (29,639)
----------
Total merger consideration.................................. 1,470,201
Less:
Cash acquired............................................. 51,460
----------
Total cash paid............................................. $1,418,741
==========
</TABLE>

PCC had been partially owned (6.39%) by a group of investors, which also own
approximately 27.2% of the Company (the 6.39% is considered to be the continuing
ownership interest). The cost to acquire the continuing ownership interest in
the net assets of PCC in excess of the predecessor basis has been reflected as a
reduction of stockholders' equity of the Company pursuant to generally accepted
accounting principles.

Nonrecurring charges recorded in the period ended December 31, 1998
represent stay-on bonuses paid by American Cellular Corporation to retain
employees through the completion of the Merger.

F-75
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

4. CELLULAR FACILITIES, EQUIPMENT, AND OTHER

The components of the Company's cellular facilities, equipment, and other
include the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
1998 1999
----------- ------------
<S> <C> <C>
Cellular facilities and equipment......................... $165,522 $206,187
Furniture and other....................................... 8,629 11,501
-------- --------
174,151 217,688
Less accumulated depreciation............................. (14,359) (39,985)
-------- --------
$159,792 $177,703
======== ========
</TABLE>

Depreciation expense was $14.4 million and $25.7 million for the periods
ended December 31, 1998 and September 30, 1999, respectively.

5. LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31 SEPTEMBER 30
1998 FMV 1999 FMV
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Borrowings under Credit Facility:
Revolver Loans........................ $ 66,000 $ 66,000 $ 66,000 $ 66,000
Tranche A Term Loans.................. 50,000 450,000 450,000 450,000
Tranche B Term Loans.................. 200,000 200,000 199,000 199,000
Tranche C Term Loans.................. 200,000 200,000 199,000 199,000
10.5% Senior Notes due 2008............. 282,971 276,450(1) 283,134 292,838(1)
---------- ---------- ---------- ----------
1,198,971 $1,192,450 $1,197,134 $1,206,838
========== ==========
Less: Current portion................... (3,000) (4,000)
---------- ----------
$1,195,971 $1,193,134
========== ==========
</TABLE>

- ------------------------

(1) Based on quoted market price.

The bank syndicated Credit Facility provides a subsidiary of the Company up
to $1 billion in four tranches ($450 million on Tranche A, $200 million for each
Tranche B and C, and up to $150 million on the Revolver). Payments under the
Credit Facility are due quarterly, in varying installments through
December 2007. Additional payments are required for excess cash flow pursuant to
the Credit Facility agreement. Interest is payable quarterly at the adjusted
prime rate, plus the applicable margin for each tranche (0.625% for the Revolver
and Tranche A, 1.5% for Tranche B, and 1.75% for Tranche C) or LIBOR, plus the
applicable margin for each tranche (1.625% for the Revolver and Tranche A, 2.5%
for Tranche B, and 2.75% for Tranche C), based on the subsidiary consolidated
leverage ratio. As of September 30, 1999, the interest rates applicable on the
tranches of the Credit Facility ranged from approximately 7.23% to 8.35%,
yielding a weighted-average rate of 7.76%. In addition, commitment fees of
0.375% on the unutilized portion of the Revolver are payable quarterly. At
September 30, 1999,

F-76
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

5. LONG-TERM DEBT (CONTINUED)

the Company had $84.0 million available under the Revolver Loans of the Credit
Facility. Substantially all of the subsidiaries assets are pledged as collateral
to the Credit Facility. The Credit Facility contains several financial covenants
related to the subsidiary's leverage and debt service ratios and restrictions on
the subsidiary's incurrence of additional debt, payment of dividends, incurrence
of liens, and payments and transfers of net assets from the subsidiary to the
Company. Restricted net assets of the Company approximated $465.5 million and
$463.2 million as of December 31, 1998 and September 30, 1999, respectively.

On May 13, 1998, the Company issued approximately $285.0 million aggregate
principal amount of 10.5% Senior Notes (the Notes), due 2008. The Notes are
unsecured and subordinated to the Credit Facility. Approximately $82.4 million
of the proceeds were used to purchase treasury securities that were placed in an
escrow account (see Note 2). The remaining funds were used to finance the
acquisition of PCC. The Notes were issued at a price of 99.24% million or
$282.8 million. The original issue discount on the Notes accretes, compounded
semiannually, to yield an effective rate of 10.63%. Interest is payable
semiannually on each May 15 and November 15. The first six scheduled interest
payments on the Notes will be funded from the securities held in escrow.

The Notes are subject to redemption at any time on or after May 15, 2003, at
the option of the Company, in amounts of $1,000 at the following redemption
prices, if redeemed during the 12 month period beginning May 15 of the years
indicated below:

<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICES
- ---- ----------
<S> <C>
2003..................................................... 105.25%
2004..................................................... 103.50
2005..................................................... 101.75
Thereafter............................................... 100.00
</TABLE>

The holders of record receive the redemption price plus any accrued and
unpaid interest. In addition, at any time prior to May 15, 2001, the Company may
use the net cash proceeds of one or more equity offerings to redeem up to an
aggregate 35% of the principal amount of Notes originally issued at a redemption
price equal to 110.50%, plus any accrued and unpaid interest.

As part of its interest rate risk management program, the Company utilizes
interest rate swap and collar agreements to hedge variable interest rate risk
under the Credit Facility. Net interest paid or received related to such
agreements is recorded using the accrual method and as an adjustment to interest
expense. At December 31, 1998 and September 30, 1999, the Company had interest
rate collars with an aggregate notional amount of $700 million and
$656.3 million, respectively, effectively fixing the interest rate between 5.38%
and 6.00%, expiring in 2001. At December 31, 1998 and September 30, 1999, the
Company had an interest rate swap with a notional amount of $100 million and
$93.8 million, respectively, effectively fixing the interest rate to 5.84%,
expiring in 2001. The Company has not incurred any gains or losses on
terminations of interest rate agreements. The fair market value of the Company's
interest rate agreements is $(11.6) million and $2.7 million at December 31,
1998 and September 30, 1999, respectively, based on current underlying spot
rates.

F-77
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

5. LONG-TERM DEBT (CONTINUED)

The maturities of the Company's long-term debt are as follows (in
thousands):

<TABLE>
<S> <C>
Three months ended December 31, 1999.................... $ 1,000
Years ended:
2000.................................................. 4,000
2001.................................................. 49,000
2002.................................................. 49,000
2003.................................................. 71,500
Thereafter............................................ 1,022,634
----------
$1,197,134
==========
</TABLE>

6. INCOME TAXES

The significant components of the Company's deferred tax liabilities and
assets are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Deferred tax liabilities:
Cellular facilities, equipment, and other................. (26,055) $(25,165)
Intangible assets......................................... (5,393) (9,329)
State and local deferred taxes............................ (5,656) (6,420)
Investment in joint venture............................... (4,312) (2,514)
Interim provision for utilization of preacquisition net
operating loss carryforwards............................ -- (3,977)
Other..................................................... (2,571) (5,032)
Deferred tax assets:
Net operating loss carryforwards.......................... 76,362 79,585
Accruals.................................................. 3,376 1,963
Other..................................................... 1,324 1,878
-------- --------
Net deferred tax assets..................................... 37,075 30,989
Valuation allowance......................................... (37,075) (34,966)
-------- --------
Net deferred tax liability.................................. $ -- $ (3,977)
======== ========
</TABLE>

At September 30, 1999, the Company had federal tax net operating loss
carryforwards (NOLs) of approximately $207.0 million which are available to
offset future federal taxable income. NOLs begin expiring in the year 2007
through 2019 as follows: 2007--$1.3 million; 2009--$2.7 million; 2010--
$1.7 million; 2011--$5.6 million; 2012--$20.8 million; 2018--$174.7 million, and
2019--$0.2 million. At September 30, 1999, the Company had state tax NOLs of
approximately $128.0 million.

The Company established a valuation allowance in accordance with generally
accepted accounting principles. The Company continually reviews the adequacy of
the valuation allowance and recognizes

F-78
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

6. INCOME TAXES (CONTINUED)

the benefits of deferred tax assets only as assessment indicates that it is more
likely than not that the deferred tax assets will be realized.

A reconciliation of the income tax provision based upon the federal
statutory rate to the actual income tax provision is as follows (in thousands):

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 26,
1998 (DATE OF NINE MONTHS
FORMATION) TO ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- -------------
<S> <C> <C>
Income tax benefit at federal statutory rate.............. $(13,954) $(8,228)
Effect of:
State income tax expense, net of federal benefit........ 344 628
Amortization of goodwill/cellular licenses.............. 6,459 11,627
Increase in valuation allowance......................... 7,681 --
Other................................................... -- 17
-------- -------
Income tax expense........................................ $ 530 $ 4,044
======== =======
</TABLE>

Income tax expense consists of the following (in thousands):

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 26,
1998 (DATE OF NINE MONTHS
FORMATION) TO ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------- -------------
<S> <C> <C>
Current taxes:
Federal................................................. $ -- $ --
State................................................... 530 67
---- ------
Total current taxes....................................... 530 67

Deferred taxes:
Federal................................................. -- 3,076
State................................................... -- 901
---- ------
Total deferred taxes...................................... -- 3,977
---- ------
Total tax provision....................................... $530 $4,044
==== ======
</TABLE>

For the nine months ended September 30, 1999, the Company has recorded an
interim deferred tax provision of $3,977,000 related to the utilization of
preacquisition net operating loss carryforwards. Utilization of such
preacquisition tax benefits has not resulted in a reduction to goodwill in
accordance with SFAS No. 109, "Accounting for Income Taxes" because the Company
expects taxable losses for the fourth quarter that will offset these amounts.
Rather, the liability associated with this provision has been reflected as part
of deferred taxes. Provided such fourth quarter losses are incurred, the interim
provision will be reversed in the fourth quarter. If such losses do not occur,
or are not as large as expected, the interim provision will be adjusted and the
deferred tax liability will be reclassified as a

F-79
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

6. INCOME TAXES (CONTINUED)

reduction to goodwill. Similarly, to the extent preacquisition tax benefits are
utilized in the future, goodwill established at the date of the acquisition will
be reduced.

7. STOCKHOLDERS' EQUITY

PREFERRED STOCK

The Company issued 3,250,000 shares of Series A Preferred Stock for gross
proceeds of $325 million. The preferred stock accrues dividends daily at the
rate of 12% per annum, compounded quarterly. Such dividends shall accrue and be
cumulative on the stated value of $100 per share. Dividends shall be payable
quarterly, in arrears, on the last day of each December, March, June, and
September. Dividends shall be paid in cash. If the payment does not occur on a
regular dividend date, dividends shall accrue to the final payment date.

The holders of Series A Preferred Stock have preference and priority over
the holders of shares of any stock of the Company ranking junior to the
Series A Preferred Stock, with respect to the payment of dividends or
distribution of assets, whether upon liquidation, dissolution, winding up, or
otherwise (Junior Stock). No dividend or distribution shall be declared or paid,
either directly or indirectly, nor shall any Junior Stock, or any warrants,
rights, calls, or options exercisable or convertible into any Junior Stock be
redeemed, purchased, retired, or otherwise acquired for any consideration,
unless as of such date the Company has paid all dividends accrued and payable to
date on the Series A Preferred Stock.

If the Company shall adopt a plan of liquidation, dissolution, or winding
up, no distribution shall be made to the holders of shares of Junior Stock,
unless the holders of Series A Preferred Stock have received in cash the stated
value, $100 per share, plus all accrued but unpaid dividends thereon.

The Company shall have the right to redeem outstanding shares of Series A
Preferred Stock at any time in aggregate amounts of $5 million or more at any
one time. The redemption price shall be $100 per share plus the amount of all
accrued and unpaid dividends through the redemption date.

The Series A Preferred Stock have no voting rights, except certain actions
in which each share of Series A Preferred Stock shall have one vote.

The notes receivable from two stockholders related to the Series A Preferred
Stock bear interest at 6%.

CLASS B COMMON STOCK

The Company has reserved 21,739 shares of its Class B Common Stock for
issuance to certain of its employees. As of December 31, 1998 and September 30,
1999, 19,387 and 14,715 shares are outstanding, respectively. The shares vest in
equal, annual increments over a four-year period starting on the date of
issuance. The shares are convertible into shares of Class A Common Stock on a
one-to-one basis, and automatically convert when vested. No shares were vested
as of December 31, 1998. As of September 30, 1999, 4,672 shares have vested.

F-80
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

7. STOCKHOLDERS' EQUITY (CONTINUED)

OTHER

Upon termination of employment without cause, certain employees have the
right to put their Class A and B Common Stock and Series A Preferred Stock at
the fair market value, provided the Company will have the right to pay certain
amounts by issuing shares of Series A Preferred Stock.

8. LEASE COMMITMENTS

Minimum rental commitments as of September 30, 1999, for all noncancelable
operating leases, consisting principally of leases for office space, real
estate, and tower space, were as follows (in thousands):

<TABLE>
<S> <C>
Three months ended December 31, 1999........................ $ 1,355
Years ended:
2000...................................................... 4,673
2001...................................................... 4,063
2002...................................................... 3,573
2003...................................................... 3,137
Thereafter................................................ 14,994
-------
$31,795
=======
</TABLE>

Total rent expense amounted to approximately $2.7 million and $4.2 million
for the periods ended December 31, 1998 and September 30, 1999, respectively.

9. RELATED PARTIES

The Company obtains customer information management and billing services
from a vendor in which two of the Company's directors have an indirect and
noncontrolling ownership interest. Since June 25, 1998, services provided to the
Company by this vendor pursuant to the terms of a license agreement, totaled
$4.9 million for the period from June 25, 1998 to December 31, 1998 and
$6.7 million for the nine months ended September 30, 1999.

10. YEAR 2000 (UNAUDITED)

YEAR 2000 ISSUES

The term "Year 2000 problem" is a general term used to describe the various
problems that may result from the improper processing of dates and
time-sensitive calculations by computers and other machinery as the Year 2000 is
reached. These problems generally arise from the fact that most of the world's
computer hardware and software has historically used only two digits to identify
the year component of a date. This will often result in a computer reading a
date of "00" as meaning 1900, and not 2000. Problems may also arise from other
sources, including the use of special codes and conventions in software that
make use of a date field.

The Company's Year 2000 issue is primarily the result of the Company's
reliance on third-party vendors for the major systems integral to its
operations. These systems include all hardware and

F-81
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

10. YEAR 2000 (UNAUDITED) (CONTINUED)

software directly related to the Company's cellular networks, interconnect
systems which provide for the delivery of data and voice messaging between the
Company's networks and networks of other carriers, information management
systems that provide customer support and billing functionality, and other
administrative systems that support the operations. The Company is also reliant
upon third-party manufacturers that provide cellular telephone equipment and
accessories that are sold to the Company's subscribers. The Company is working
with its vendors to ensure Year 2000 compliance of these systems. However, if
required modifications to these systems are not completed, the Year 2000 issue
could have a material impact on the operations of the Company.

STATUS OF BECOMING YEAR 2000 COMPLIANT

The Company's Year 2000 readiness program involves the following four
phases: system assessment, remediation, testing, and implementation. To date,
the Company has substantially completed its assessment of all systems that could
be significantly affected by the Year 2000 issue. The assessment indicated all
of the systems could be affected because of the heavy reliance on information
technology products and services. The assessment also indicated that hardware
and software used in administrative operations are also at risk. The Company has
been gathering information about the Year 2000 compliance status of its vendors
that support these systems. The Company's vendors are at various stages in their
Year 2000 compliance programs, and there is no assurance that each vendor will
achieve its goals. Additionally, the Company has identified all carriers that
provide direct interconnect services for local or long distance telephone
services and requested certification as to Year 2000 compliance. However, there
is no assurance that the Company will be able to test these systems beyond the
representations of these carriers.

While management considers that the assessment phase of the Company's Year
2000 program is substantially completed, the Company will continue to review all
areas of operations to identify any other potential Year 2000 issues. In
addition, any new system that may be implemented during the remainder of the
year will be evaluated for Year 2000 compliance prior to the deployment of the
system.

In the remediation phase, the Company is determining the Year 2000
compliance status of each component of each system identified as a risk during
the assessment phase. This process includes contacting each vendor and obtaining
representations regarding the Year 2000 compliance of that vendor's products as
it impacts the Company systems. In the event that a product is determined to be
noncompliant, the Company is requesting information as to the vendor's
procedures to bring the product into compliance. The Company's vendors are at
various stages in their Year 2000 compliance programs, and there is no assurance
that each vendor will achieve its goals. This phase is approximately 98.8%
completed overall and is expected to be 100% completed by November 1999.

In the testing phase, the Company is performing its own evaluation of Year
2000 compliance and, to the extent possible, testing each system or component in
a forward date environment to insure compliance of the system. Although the
Company can verify Year 2000 compliance of its systems in this fashion, the
complexity and variability of systems to which the Company interconnects
prohibits the testing of the telecommunications network as a whole. For example,
the failure of a local power grid or local exchange carrier as a result of a
Year 2000 event will adversely affect the performance of the

F-82
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

10. YEAR 2000 (UNAUDITED) (CONTINUED)

Company's cellular network. This phase is approximately 98.8% completed overall
and is expected to be 100% completed by November 1999.

The implementation phase involves the deployment of Year 2000 compliant
software upgrades and patches into the operating systems, the development of
contingency plans and work around procedures for those systems found to be
noncompliant and the replacement of noncompliant hardware and software used in
administrative support functions. This phase is approximately 98.8% completed
overall and is expected to be 100% completed by November 1999.

No system that are considered to be material to the operations and that are
not expected to be Year 2000 compliant have been identified. Set forth below is
a table of the various systems of the Company and the level of completion of
each of the phases of the Company's Year 2000 readiness program with respect to
each system:

<TABLE>
<CAPTION>
COMPLIANCE PROGRAM PHASE
---------------------------------------------------------------------------------
SYSTEMS ASSESSMENT REMEDIATION TESTING IMPLEMENTATION
- ------- --------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Cellular networks..... 100% completed 96.8% completed 96.8% completed 96.8% completed
Expected completion Expected completion Expected completion
date November 1999 date November 1999 date November 1999

Interconnect 100% completed 99.1% completed 0% completed 99.1% completed
systems............. Expected completion Expected completion Expected completion
date November 1999 date not applicable date November 1999

Information management 100% completed 99.3% completed 99.3 completed 99.3% completed
system.............. Expected completion Expected completion Expected completion
date November 1999 date November 1999 date November 1999

Other administrative 100% completed 99.9% completed 99.9% completed 99.9% completed
systems............. Expected completion Expected completion Expected completion
date November 1999 date November 1999 date November 1999
</TABLE>

COSTS RELATED TO YEAR 2000 COMPLIANCE

The Company will utilize internal resources in completing its Year 2000
readiness plan. Company personnel are assigned specific tasks relating to Year
2000 compliance on the basis of technical skill and availability. The Company
does not account for the time spent on Year 2000 compliance as a separate item
as these costs are not incremental to the operations. The Company has budgeted
for software upgrade costs relating to vendor software of approximately
$100,000. The Company also anticipates an additional $100,000 required to
replace administrative hardware and software that are not Year 2000 compliant.
As of October 31, 1999, actual expenditures or these items were approximately
$75,000.

RISKS ASSOCIATED WITH YEAR 2000 ISSUES

Management believes that it has an effective program in place to resolve
those Year 2000 issues in which it can exert significant influence. As noted in
the table above, the program is not yet completed. In the event the Company does
not complete the additional phases of the program, the Company

F-83
<PAGE>
AMERICAN CELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

SEPTEMBER 30, 1999

10. YEAR 2000 (UNAUDITED) (CONTINUED)

would be unable to provide cellular telephone service, invoice customers, or
collect payments. Disruption of cellular service would also negatively impact
customer satisfaction, which may impact future sales and growth of the
operations. In addition, disruptions in the economy generally resulting from
Year 2000 issues could materially adversely affect the Company. The amount of
potential liability or lost revenue to the Company cannot be reasonably
estimated at this time.

YEAR 2000 CONTINGENCY PLANS

The Company is in the process of developing contingency plans with its
primary vendors for cellular network operations and information management
services. These plans include detail recovery plans, vendor contacts, and work
around procedures upon the occurrence of a Year 2000 event. The Company will
continue to evaluate the necessity and adequacy of its contingency plans as
additional information relating to the Year 2000 readiness of its vendors
becomes available.

YEAR 2000 FORWARD-LOOKING STATEMENTS

The foregoing Year 2000 discussions contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements, including without limitation, anticipated costs and dates by which
the Company expects to complete certain actions, are based on management's best
current estimates, which are derived utilizing numerous assumptions about future
events, including continued availability of certain resources, representations
derived from third parties and other factors. However, there can be no guarantee
that these estimates will be achieved, and the actual results could differ
materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the ability to identify
and remediate all relevant information technology and noninformation technology
systems, results of Year 2000 testing, adequate resolution of Year 2000 issues
by business and other third parties who are service providers, suppliers or
customers of the Company, unanticipated system costs, the adequacy of and the
ability to develop and implement contingency plans and similar uncertainties.
The "forward-looking statements" made in the foregoing Year 2000 discussion
speak only as to the date such statements are made, and the Company undertakes
no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. The foregoing information constitutes a Year
2000 readiness disclosure under the Year 2000 Information and Readiness
Disclosure Act.

F-84
<PAGE>
REPORT OF INDEPENDENT AUDITORS

Board of Directors
PriCellular Corporation

We have audited the consolidated balance sheets of PriCellular Corporation
and subsidiaries as of December 31, 1997 and June 30, 1998, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the two years in the period ended December 31, 1997 and for the six
months ended June 30, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
PriCellular Corporation and subsidiaries at December 31, 1997 and June 30, 1998,
and the consolidated results of their operations and their cash flows for each
of the two years in the period ended December 31, 1997 and for the six months
ended June 30, 1998, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Chicago, Illinois
March 15, 1999

F-85
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 61,357 $ 51,460
Accounts receivable (less allowance of $1,686 and
$2,185)................................................. 19,465 29,160
Inventory................................................. 2,232 794
Other current assets...................................... 1,797 2,269
-------- --------
Total current assets........................................ 84,851 83,683
Fixed assets:
Cellular facilities and equipment......................... 123,935 139,677
Furniture and equipment................................... 10,221 14,996
-------- --------
134,156 154,673
Less accumulated depreciation............................. (29,302) (39,548)
-------- --------
Net fixed assets............................................ 104,854 115,125
Investment in cellular operations........................... 37,017 35,531
Cellular licenses (less accumulated amortization of $23,119
and $30,426).............................................. 493,315 559,981
Deferred financing costs (less accumulated amortization of
$5,191 and $7,496)........................................ 13,352 12,282
Cash committed for the acquisition of cellular operations... 13,000 --
Other assets................................................ 1,267 256
-------- --------
Total assets................................................ $747,656 $806,858
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses..................... $ 28,046 $ 20,416
Deferred revenue.......................................... 4,242 4,633
Other current liabilities................................. 8,045 6,944
-------- --------
Total current liabilities................................... 40,333 31,993
Long-term debt.............................................. 568,323 642,155
Deferred taxes.............................................. 3,797 3,797
Other long-term liabilities................................. 1,023 1,019
Commitments and contingent liabilities...................... -- --
Stockholders' equity:
Preferred Stock, $0.01 par:
Series A, cumulative convertible: authorized 10,000,000
shares; issued and outstanding 96,000 shares.......... 1 1
Common Stock, $0.01 par:
Class A: authorized 100,000,000 shares; issued and
outstanding 21,824,566 and 21,987,766 shares.......... 218 220
Class B: authorized 50,000,000 shares; issued and
outstanding 13,134,275 and 12,971,075 shares.......... 131 129
Additional paid-in capital................................ 180,704 180,704
Accumulated deficit....................................... (46,874) (53,160)
-------- --------
Total stockholders' equity.................................. 134,180 127,894
-------- --------
Total liabilities and stockholders' equity.................. $747,656 $806,858
======== ========
</TABLE>

See notes to consolidated financial statements.

F-86
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------- SIX MONTHS ENDED
1996 1997 JUNE 30, 1998
---------- ---------- ----------------
<S> <C> <C> <C>
REVENUES
Cellular service...................................... $ 105,188 $ 168,394 $ 101,888
Equipment sales....................................... 3,430 5,364 2,868
Other................................................. 3,998 7,242 3,914
---------- ---------- ----------
112,616 181,000 108,670

COSTS AND EXPENSES
Cost of cellular service.............................. 29,571 48,691 20,911
Cost of equipment sold................................ 10,073 12,841 5,365
Selling, general and administrative................... 34,502 53,485 30,230
Depreciation and amortization......................... 19,537 28,759 17,553
Nonrecurring charges.................................. -- -- 4,889
---------- ---------- ----------
93,683 143,776 78,948
---------- ---------- ----------
Operating income...................................... 18,933 37,224 29,722

OTHER INCOME (EXPENSE)
Gain (loss) on sale of investments in cellular
operations.......................................... (1,401) 8,423 (133)
Interest expense...................................... (47,076) (67,392) (38,955)
Interest income....................................... 4,875 4,864 1,570
Other income, net..................................... 1,626 3,250 1,510
---------- ---------- ----------
(41,976) (50,855) (36,008)
---------- ---------- ----------
Net loss.............................................. $ (23,043) $ (13,631) $ (6,286)
========== ========== ==========

Net loss after adjustment for accrued preferred stock
dividend............................................ $ (29,221) $ (20,171) $ (9,643)
========== ========== ==========

Basic and diluted loss per common share............... $ (0.76) $ (0.55) $ (0.28)
========== ========== ==========

Weighted-average number of common shares used in
computation of basic and diluted loss per common
share............................................... 38,493,000 36,751,000 34,959,000
</TABLE>

See notes to consolidated financial statements.

F-87
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS)
<TABLE>
<CAPTION>
SERIES A CLASS A CLASS B
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL
------------------- ------------------- ------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT
-------- -------- -------- -------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE--DECEMBER 31, 1995... 96 $ 1 10,858 $ 109 13,816 $ 138 $215,680 $(10,200)
Purchase and retirement of
common stock............... -- -- (150) (1) -- -- (1,449) --
Conversion of Class B common
stock to Class A common
stock...................... -- -- 1,688 17 (1,688) (17) -- --
Shares issued as a result of
common stock splits........ -- -- 6,498 64 7,383 74 (138) --
Costs incurred in connection
with common and preferred
stock offerings............ -- -- -- -- -- -- (1,364) --
Exercise of employee stock
options.................... -- -- 8 -- -- -- 48 --
Net loss for the year ended
December 31, 1996.......... -- -- -- -- -- -- -- (23,043)
------ -------- ------- ------ -------- -------- -------- --------
BALANCE--DECEMBER 31, 1996... 96 1 18,902 189 19,511 195 212,777 (33,243)
Purchase and retirement of
common stock............... -- -- (2,157) (21) (3,995) (40) (53,800) --
Conversion of Class B common
stock to Class A common
stock...................... -- -- 2,382 24 (2,382) (24) -- --
Costs incurred in connection
with common and preferred
stock offerings............ -- -- -- -- -- -- (206) --
Shares issued in connection
with the Kentucky Cluster
acquisition................ -- -- 1,948 19 -- -- 19,106 --
Exercise of employee stock
options.................... -- 750 7 -- -- 2,827 --
Net loss for the year ended
December 31, 1997.......... -- -- -- -- -- -- -- (13,631)
------ -------- ------- ------ -------- -------- -------- --------
BALANCE--DECEMBER 31, 1997... 96 1 21,825 218 13,134 131 180,704 (46,874)
Conversion of Class B common
stock to Class A common
stock...................... -- -- 163 2 (163) (2) -- --
Net loss for the six months
ended June 30, 1998........ -- -- -- -- -- -- -- (6,286)
------ -------- ------- ------ -------- -------- -------- --------
BALANCE--JUNE 30, 1998....... 96 $ 1 21,988 $ 220 12,971 $ 129 $180,704 $(53,160)
====== ======== ======= ====== ======== ======== ======== ========

STOCKHOLDERS'
EQUITY
-------------
<S> <C>
BALANCE--DECEMBER 31, 1995... $205,728
Purchase and retirement of
common stock............... (1,450)
Conversion of Class B common
stock to Class A common
stock...................... --
Shares issued as a result of
common stock splits........ --
Costs incurred in connection
with common and preferred
stock offerings............ (1,364)
Exercise of employee stock
options.................... 48
Net loss for the year ended
December 31, 1996.......... (23,043)
--------
BALANCE--DECEMBER 31, 1996... 179,919
Purchase and retirement of
common stock............... (53,861)
Conversion of Class B common
stock to Class A common
stock...................... --
Costs incurred in connection
with common and preferred
stock offerings............ (206)
Shares issued in connection
with the Kentucky Cluster
acquisition................ 19,125
Exercise of employee stock
options.................... 2,834
Net loss for the year ended
December 31, 1997.......... (13,631)
--------
BALANCE--DECEMBER 31, 1997... 134,180
Conversion of Class B common
stock to Class A common
stock...................... --
Net loss for the six months
ended June 30, 1998........ (6,286)
--------
BALANCE--JUNE 30, 1998....... $127,894
========
</TABLE>

See notes to consolidated financial statements.

F-88
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
----------------------- JUNE 30,
1996 1997 1998
--------- -------- ----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $ (23,043) $(13,631) $ (6,286)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization............................. 19,537 28,759 17,553
Interest on Senior Subordinated and Convertible Discount
Notes and amortization of deferred financing costs...... 43,174 46,236 16,137
(Gain) loss on sale of investments in cellular
operations.............................................. 1,401 (8,423) 133
Amortization of covenant not to compete................... (1,625) (3,250) (1,625)
Provision for losses on accounts receivable............... (309) (81) 456
Proceeds from covenant not to compete..................... 2,500 2,000 --
Changes in operating assets and liabilities, net of
acquisitions:
Accounts receivable..................................... (6,710) (5,131) (9,577)
Inventory............................................... (369) 103 1,526
Other current assets.................................... (347) (737) (457)
Accounts payable and accrued expenses................... 4,009 2,804 (8,653)
Deferred revenue........................................ 1,151 600 (37)
Other current liabilities............................... (250) -- 1,547
Other, net.............................................. 252 (223) 948
--------- -------- --------
Net cash provided by operating activities................... 39,371 49,026 11,665

INVESTING ACTIVITIES
Purchase of fixed assets.................................... (29,470) (25,717) (20,517)
Amounts refunded from (deposited in) escrow to acquire
cellular properties (net)................................. (5,000) 7,337 --
Deposit for Personal Communications Service auction (net)... 1,640 -- --
Proceeds from sale of investments in cellular operations.... 34,313 23,651 1,352
Acquisition of cellular operations, net of cash acquired.... (110,977) (26,032) (60,185)
Investment in cellular operations........................... (75) (2,523) (977)
Cash committed for the acquisition of cellular operations... (91,400) (13,000) --
--------- -------- --------
Net cash used in investing activities....................... (200,969) (36,284) (80,327)
</TABLE>

See notes to consolidated financial statements.

F-89
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------ JUNE 30,
1996 1997 1998
--------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>

FINANCING ACTIVITIES
Purchase and retirement of common stock..................... $ (1,450) $(53,861) $ --
Proceeds from exercise of stock options..................... 48 2,834 --
Repayments of notes payable and due to stockholders......... (23,104) -- --
Payments for deferred financing costs....................... (5,612) (516) (1,235)
Proceeds from issuance of long-term debt.................... 170,000 -- 60,000
Costs incurred in connection with common and preferred stock
offerings................................................. (1,364) (206) --
-------- -------- --------
Net cash provided by (used in) financing activities......... 138,518 (51,749) 58,765
-------- -------- --------
Decrease in cash and cash equivalents....................... (23,080) (39,007) (9,897)
Cash and cash equivalents at beginning of period............ 123,444 100,364 61,357
-------- -------- --------
Cash and cash equivalents at end of period.................. $100,364 $ 61,357 $ 51,460
======== ======== ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest.................................................. $ 1,110 $ 18,275 $ 22,819
Income taxes.............................................. 448 424 479

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Common stock (1997) and debt (1996) issued in connection
with the acquisition of cellular systems.................. $ 19,429 $ 19,125 $ --
</TABLE>

See notes to consolidated financial statements.

F-90
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1998

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

PriCellular Corporation and subsidiaries, including its wholly owned
subsidiary, PriCellular Wireless Corporation (Wireless) (collectively, the
Company), is principally engaged in the ownership and operation of cellular
telephone systems primarily in rural areas of the Midwestern and Eastern
portions of the United States. The Company operates in one business segment
pursuant to SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information."

The consolidated financial statements include the accounts of the Company
and its wholly owned and majority owned subsidiaries. The assets, liabilities,
and results of operations of entities in which the Company has a controlling
interest have been consolidated. All significant intercompany balances and
transactions have been eliminated.

On June 25, 1998, American Cellular Corporation acquired all of the
operations of the Company pursuant to an agreement and plan of merger. For
further discussion of the merger see Note 8. The accompanying consolidated
financial statements include results of operations of the Company through June
30, 1998, the Company's normal month-end. The results of operations of the
Company do not differ materially from if the actual closing date of the merger
had been used.

USE OF ESTIMATES

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable,
investment in cellular operations and accounts payable in the consolidated
balance sheet approximate fair value. The fair value of long-term debt in the
consolidated balance sheet approximated $733.5 million at June 30, 1998.

CASH EQUIVALENTS

The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

INVENTORY

Inventory is stated at the lower of cost (first in, first out method) or
market. Inventory consists primarily of cellular telephones and accessories.

FIXED ASSETS

F-91
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

1997 and for the six months ended June 30, 1998, was $10.0 million, $16.1
million, and $10.2 million, respectively.

INVESTMENTS IN CELLULAR OPERATIONS

The Company has a 44.5% interest in a joint venture with SBC Communications,
Inc. (SBC). Under the terms of the joint venture agreement, the Company receives
preferential distributions in the first four years of the joint venture
increasing from $3.3 million in 1996 to $5.8 million in 1999. Such preferential
distributions are guaranteed by SBC. The Company also has an option to put its
joint venture interest to SBC at prices escalating to $39.0 million in 1999. SBC
has operating control of the properties and has certain rights to purchase the
Company's interests on November 30, 1999. The Company's guaranteed preferential
distributions from the joint venture for the years ended December 31, 1996 and
1997 and for the six months ended June 30, 1998, amounted to $3.4 million,
$4.3 million, and $2.6 million, respectively, which are included in other
revenues.

CELLULAR LICENSES

Cellular licenses represent the excess of purchase price over the underlying
fair value of assets acquired, and are being amortized on a straight-line basis
over 40 years. Amortization expense for the years ended December 31, 1996 and
1997 and for the six months ended June 30, 1998, was $9.5 million, $12.7
million, and $7.3 million, respectively.

The Company periodically reviews the carrying value of cellular licenses to
determine whether such amounts are recoverable based on undiscounted future cash
flows of the market to which the license relates and by comparing the cellular
license to the estimated market value of the cellular system in order to
determine whether a reduction to fair value is necessary. The Company has
determined that no such reductions were necessary through June 30, 1998.

DEFERRED FINANCING COSTS

Deferred financing costs primarily represent underwriting and related fees
incurred in connection with the issuance of the Company's long-term debt. These
costs are being amortized over the terms of the related debt and the
amortization expense is included in interest expense.

REVENUE RECOGNITION

The Company earns revenue by providing access to its cellular system, for
usage of its cellular system for long-distance calls placed by the Company's
customers and those of other carriers within the Company's service area, and for
providing service to customers from other cellular systems who roam through the
service area. Access revenue is billed one month in advance and is recognized
when earned. Airtime, long-distance, and roaming revenues are recognized when
the service is rendered. Equipment sales are recognized on delivery of the
equipment to the customer.

F-92
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ADVERTISING COSTS

Marketing costs relating to new subscribers are expensed in the period in
which they are incurred. Advertising expense amounted to $2.3 million, $3.7
million, and $2.5 million for the years ended December 31, 1996 and 1997 and for
the six months ended June 30, 1998, respectively.

COMMON STOCK SPLITS

On February 29, 1996 and October 1, 1996, the Company authorized 5- for 4-
stock splits in the form of 25% stock dividends of Class A and Class B common
stock payable March 11, 1996 and October 21, 1996, respectively. All footnote
disclosures and applicable per share data have been restated to reflect these
splits.

NET LOSS PER SHARE

In computing dilutive loss per share for the years ended December 31, 1996
and 1997 and for the six months ended June 30, 1998, no effect has been given to
options outstanding under the Company's 1994 Stock Option Plan, outstanding
warrants to purchase Class B common stock, the 10.75% Senior Subordinated
Convertible Discount Notes, or the Cumulative Convertible Preferred Stock, since
the exercise of any of these items would have an antidilutive effect on net loss
per share.

COMPREHENSIVE INCOME

In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income."
Net loss for the years ended December 31, 1996 and 1997 and for the six months
ended June 30, 1998, is the same as comprehensive loss defined pursuant to SFAS
No. 130.

CONCENTRATIONS OF CREDIT RISK

RECLASSIFICATIONS

Certain items have been reclassified in the 1996 and 1997 consolidated
financial statements to conform to the current presentation.

2. ACQUISITIONS AND DIVESTITURES

The following acquisitions were completed in 1996, 1997, and 1998. All
acquisitions were accounted for utilizing the purchase method of accounting. The
results of operations of the acquired

F-93
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

2. ACQUISITIONS AND DIVESTITURES (CONTINUED)

entities are included in the Company's consolidated results of operations from
their respective dates of acquisition.

<TABLE>
<CAPTION>
ACQUISITION PURCHASE NET POPS
MARKET DATE PRICE ACQUIRED
- ------ -------------------------------------- -------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
1998
TN-4 RSA January 15, 1998...................... $ 73,000 264,000
---------
264,000
=========

1997
KY-4, KY-5, KY-6, and January 7, 1997....................... $115,500(a) 785,000
KY-8 RSAs

WI-4 RSA January 7, 1997....................... 6,300 119,000
WI-5 RSA May 29, 1997.......................... 10,600 81,000
---------
985,000
=========

1996
WI-2 RSA November 18, 1996..................... 4,300 85,645
---------
85,645
=========

PA-9 RSA February 2, 1996...................... 26,100 188,096
WV-3 RSA July 23, 1996......................... 35,000 269,709
---------
457,805
=========

NY-6 RSA April 23, 1996........................ 19,800(b) 111,373
Poughkeepsie, NY MSA April 23, 1996........................ 38,900(b)(c) 218,890
Orange County, NY MSA October 17, 1996...................... (c) 327,053
---------
657,316
=========

Various October 17, 1996...................... (c) 70,740
---------
1,271,506
=========
</TABLE>

- ------------------------

(a) The Company acquired from a subsidiary of Horizon Cellular Telephone
Company, L. P. (Horizon) the system serving four RSAs in Kentucky for
approximately $96.4 million in cash and 1,948,052 shares of the Company's
Class A common stock valued at approximately $19.1 million. On February 4,
1997, the Company repurchased and retired the 1,948,052 shares from Horizon
for $15.3 million.

F-94
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

2. ACQUISITIONS AND DIVESTITURES (CONTINUED)

(b) The Company acquired from a subsidiary of United States Cellular Corporation
the system serving the NY-6 RSA for approximately $19.8 million and 83% of
the stock of the system serving the Poughkeepsie, NY MSA for approximately
$38.9 million, with one-half paid in cash and the balance in a three-year
note (subsequently repaid in November 1996.

(c) The Company exchanged with Vanguard Cellular Systems, Inc. its OH-9 RSA, the
majority of its OH-10 RSA and its Parkersburg, WV/Marietta, OH MSA for the
Orange County, NY MSA, an additional 11.1% of the Poughkeepsie, NY MSA,
12.2% of the Janesville, WI MSA and 28,509 additional Pops, including small
interests in the Eau Claire, WI and Wausau, WI MSAs (in each of which the
Company currently has a majority interest).

The pro forma unaudited condensed consolidated results of operations
assuming the TN-4 RSA acquisition was consummated as of January 1, 1997, are as
follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31 JUNE 30
1997 1998
----------- ----------
<S> <C> <C>
Revenues.................................................... $196,264 $108,670
======== ========

Net loss after adjustment for accrued preferred stock
dividend.................................................. $(20,497) $ (9,643)
======== ========

Basic and diluted loss per common share..................... $ (0.56) $ (0.28)
======== ========
</TABLE>

The Company made the following dispositions of cellular properties and interests
(in thousands):

<TABLE>
<CAPTION>
SALES GAIN
DATE DESCRIPTION PRICE (LOSS)
- ---- ----------- -------- --------
<S> <C> <C> <C>
1998
June Sale of Minority Pops............................... $ 1,352 $ (133)
=======

1997
January Florence, AL MSA and AL-1B RSA, sale of license..... $22,396 $ 8,451
April Sale of Minority Pops............................... 1,255 (28)
-------
$ 8,423
=======

1996
July AL-4 RSA, sale of license........................... $25,000 $(1,640)
September Sale of Minority Pops............................... 2,813 1,817
November MI-2 RSA, sale of license........................... 6,500 (1,578)
-------
$(1,401)
=======
</TABLE>

F-95
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

3. LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ --------
<S> <C> <C>
14% Senior Subordinated Discount Notes due 2001........... $165,000 $165,000
10.75% Senior Subordinated Convertible Discount Notes due 45,623 48,054
2004....................................................
12.25% Senior Subordinated Discount Notes due 2003........ 187,700 199,101
10.75% Senior Notes due 2004.............................. 170,000 170,000
Senior Secured Reducing Revolver.......................... -- 60,000
-------- --------
$568,323 $642,155
======== ========
</TABLE>

On November 23, 1994, Wireless issued $165.0 million aggregate principal
amount of 14% Senior Subordinated Discount Notes due 2001 (the 14% Notes)
primarily to finance the acquisition of Cellular Information Systems, Inc.
(CIS). The 14% Notes were issued at a price of 66.834% or $110.3 million. The
original issue discount on the 14% Notes accreted at a rate of 14% through
November 1997, compounded semiannually, to an aggregate principal amount of
$165.0 million. Interest is currently accruing at the rate of 14% per annum,
payable semiannually in cash.

On August 21, 1995, the Company issued $60.0 million aggregate principal
amount of 10.75% Senior Subordinated Convertible Discount Notes due 2004 (the
10.75% Notes). The 10.75% Notes were issued at a price of 59.345% or $35.6
million. The original issue discount on the 10.75% Notes accretes at a rate of
10.75%, compounded semiannually, to an aggregate principal amount of
approximately $60.0 million by August 15, 2000. Interest will thereafter accrue
at 10.75% per annum, payable semiannually, in cash beginning February 15, 2001.
The 10.75% Notes are convertible into the Company's Class A common stock at a
conversion price of $9.94 per share.

On September 27, 1995, Wireless issued $205.0 million aggregate principal
amount of 12.25% Senior Subordinated Discount Notes due 2003 (12.25% Notes) to
finance the acquisition of the OH-7 RSA; OH-9 RSA; OH-10 RSA; Parkersburg,
WV/Marietta; OH MSA; WV-2 RSA; AL-4 RSA; PA-9 RSA; and NY-5 RSA cellular
systems. The 12.25% Notes were issued at a price of 69.906% or $143.3 million.
The original issue discount on the 12.25% Notes accretes at a rate of 12.25%
compounded semiannually, to an aggregate principal amount of approximately
$205.0 million by October 1, 1998. Interest will thereafter accrue at 12.25% per
annum payable semiannually in cash beginning April 1, 1999.

On November 6, 1996, Wireless issued $170.0 million principal amount of
10.75% Senior Notes due 2004, primarily to finance the acquisition in January
1997 of the Kentucky cluster for $115.5 million consisting of approximately
$96.4 million in cash and $19.1 million in the Company's Class A common stock.
Approximately $19.0 million of the proceeds was used to repay the note issued in
connection with the purchase on April 23, 1996, of the Poughkeepsie, NY MSA.
Interest is payable semiannually on each May 1 and November 1.

On January 15, 1998, the Company borrowed $60.0 million under a Senior
Secured Reducing Revolver (the Borrowing). The Borrowing matures eight years
from the closing date with repayment

F-96
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

commencing in the year 2001 with final payment in the year 2005 in amounts
ranging from 10.0% to 25.0%. Interest will be charged at the LIBOR rate plus a
premium ranging from 1.500% to 2.250% depending on the ratio of debt to cash
flow as defined. The Borrowing requires the attainment by the Company of certain
financial ratios in order to maintain the permitted indebtedness. The Borrowing
is secured by the assets of Kyle Cellular, a wholly owned subsidiary of the
Company.

The Company's long-term debt includes restrictions on Wireless' incurrence
of additional debt, the payment of dividends, the incurrence of liens, and on
payments and transfer of net assets from Wireless to the Company. Restricted net
assets of the Company as of June 30, 1998, approximated $175.6 million.

The maturities of the Company's long-term debt for each of the periods
subsequent to June 30, 1998, are as follows (in thousands):

<TABLE>
<S> <C> <C>
Six months ending December 31, 1998......................... $ --
Years ending December 31:
1999...................................................... --
2000...................................................... --
2001...................................................... 169,500
2002...................................................... 10,500
2003...................................................... 211,101
Thereafter................................................ 251,054
--------
Total................................................... $642,155
========
</TABLE>

4. INCOME TAXES

The significant components of the Company's deferred tax liabilities and
assets are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ --------
<S> <C> <C>
Deferred tax liabilities:
Depreciation.............................................. $ (9,652) $(11,638)
Amortization.............................................. (11,407) (14,799)
License basis difference.................................. (3,797) (3,797)
Other..................................................... (4,385) (4,356)
Deferred tax assets:
Net operating loss carryforwards.......................... 6,915 15,630
Amortization of original issue discount................... 33,726 37,373
State and local deferred taxes............................ 2,280 1,058
Accruals.................................................. 2,049 2,020
Other..................................................... 2,504 1,462
-------- --------
Net deferred tax assets..................................... 18,233 22,953
Valuation allowance......................................... (22,030) (26,750)
-------- --------
Net deferred tax liability.................................. $ (3,797) $ (3,797)
======== ========
</TABLE>

F-97
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

At June 30, 1998, the Company had tax net operating loss carryforwards
(NOLs) of approximately $43.3 million, which are available to offset future
taxable income. NOLs begin expiring in the year 2007 through 2018 as follows:
2007--$1.3 million, 2009--$2.7 million, 2010--$1.7 million, 2011--$5.6 million,
2012--$20.8 million and 2018--$11.2 million.

The Company established a valuation allowance in accordance with the
provisions of SFAS No. 109, "Accounting for Income Taxes." The Company
continually reviews the adequacy of the valuation allowance and recognizes the
benefits of deferred tax assets only as assessment indicates that it is more
likely than not that the deferred tax assets will be realized.

5. STOCKHOLDERS' EQUITY

COMMON STOCK

In January 1996, Price Communications, an affiliate of the Company, acquired
warrants which are convertible directly into 1,820,000 shares of Class B common
stock from former executives of an acquired company. The effective exercise
price is $5.42 per share of Class B common stock at June 30, 1998.

On February 4, 1997, the Company purchased and retired, under separate
authorization of its Board of Directors, 1,948,052 shares of its Class A common
stock from Horizon, which Horizon received in connection with the Kentucky
Cluster acquisition.

In July 1997, the Company repurchased and retired 3,994,945 shares of its
Class B common stock from Aeneas Venture Corp., an affiliate of Harvard Private
Capital Group, Inc. (Harvard) at $9.00 per share, which was the current market
price at the date of the transaction. In addition, 56,275 warrants to purchase
Class B common stock, also owned by Harvard, were redeemed at a net cash
expenditure of $3.83 per warrant ($9.00 current market price less the exercise
price of $5.17).

In November 1997, Robert Price, Chairman of the Board of the Company,
exercised options for 742,188 shares of the Company's Class A common stock.
Subsequently, the Company purchased from Robert Price 200,000 of the 742,188
shares issued at market ($11.25 per share), and simultaneously retired the same
shares.

Shares of Class A common stock reserved for issuance at June 30, 1998 and
December 31, 1997 are as follows (in thousands):

<TABLE>
<S> <C>
Options issued to employees................................. 1,477
Options reserved for issuance............................... 401
Warrants.................................................... 1,820
Shares reserved for convertible securities.................. 32,856
------
36,554
======
</TABLE>

PREFERRED STOCK

The Company issued Series A Cumulative Convertible Preferred Stock, par
value $.01 per share (the Series A Preferred Stock) for gross proceeds of $80.0
million. The preferred stock accrues dividends at the rate of 6.25% per annum
compounded quarterly. Such dividends will not be paid in cash but will accrue
and be calculated on the face value of $1,000 per share. The cumulative accrued

F-98
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

5. STOCKHOLDERS' EQUITY (CONTINUED)

dividends are $16.1 million at June 30, 1998. The number of shares of Class A
common stock into which the Series A Preferred Stock is convertible is equal to
the quotient obtained by dividing the conversion value (initially $83.2 million
and increasing to $96.0 million by the third anniversary of the original date of
issuance or earlier upon the occurrence of certain contingencies, plus, in each
case, accrued dividends through the date of conversion or, upon the occurrence
of certain contingencies, through the fifth anniversary of the date of issuance)
by the conversion price ($8.83 per share subject to adjustment). The holder of
each share of Series A Preferred Stock is entitled to the number of votes equal
to the number of shares of Class A common stock the holder would receive upon
conversion.

STOCK OPTION PLAN

Under the Company's 1994 Stock Option Plan (the Plan), the Board of
Directors can grant options to purchase up to 2,636,000 shares of Class A common
stock to certain eligible employees and directors (Class A shares are entitled
to one vote per share). During 1996, the Company registered approximately
2,636,000 shares of Class A common stock reserved for issuance under the Plan.
The Plan provides that the option price cannot be less than the fair market
value of the stock on the date of grant. All options granted subsequent to
January 1, 1995 have a 10 year term and vest and become fully exercisable at the
end of three years of continued employment.

The Company has adopted SFAS No. 123, "Accounting for Stock-Based
Compensation." However, as permitted under SFAS No. 123, the Company continues
to apply Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," in accounting for its stock option plan. Under APB No. 25,
because the number of options is fixed and the option price is market price at
the date of grant, no compensation expense is required. Pro forma information
regarding net loss and basic and diluted loss per common share is required by
SFAS No. 123, and has been determined as if the Company has accounted for its
employee stock options under the fair value method using the Black-Scholes
valuation method.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

The fair value for the Company's options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1996 and 1997: risk free interest rate of 6.25%; dividend yield
of 0%; a volatility factor of .480 for 1996 and .323 for 1997 and a
weighted-average expected life of the options of four years. There were no
option grants in 1998.

F-99
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

5. STOCKHOLDERS' EQUITY (CONTINUED)

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows (in thousands, except per share):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Net loss after adjustment for accrued preferred stock
dividend:
As reported.......................................... $(29,221) $(20,171) $ (9,643)
Pro forma............................................ (29,996) (21,318) (10,276)

Basic and diluted loss per common share:
As reported.......................................... (0.76) (0.55) (0.28)
Pro forma............................................ (0.78) (0.58) (0.29)
</TABLE>

Because compensation expense associated with option grants is recognized
over the vesting period, the initial impact of applying FAS 123 on pro forma net
loss is not representative of the potential impact on pro forma net loss in
future years when the effect of recognition of a portion of compensation expense
from multiple awards would be reflected.

A summary of the Company's stock option activity, and related information is
as follows:

<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDER
OPTIONS PRICE PER SHARE
------------ ----------------
<S> <C> <C>
Balance at December 31, 1995........................... 1,769,140 $ 3.71 to $8.72
Options granted........................................ 343,125 $10.80 to $10.90
Options exercised...................................... (8,329) $ 4.54 to $4.67
Options returned for future issuance................... (55,704) $ 4.54 to $10.90
--------- ----------------
Balance at December 31, 1996........................... 2,048,232 $ 3.71 to $10.90
Options granted........................................ 217,500 $ 8.88
Options exercised...................................... (750,649) $ 3.71 to $8.72
Options returned for future issuance................... (38,102) $ 4.55 to $10.90
--------- ----------------
Balance at December 31, 1997 and June 30, 1998......... 1,476,981 $ 3.71 to $10.90
========= ================
</TABLE>

The weighted-average grant date fair value of options granted in 1997 and
1996 were $3.38 and $4.84, respectively.

F-100
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

The following table summarizes information about stock options outstanding
at June 30, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------ -----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
RANGE OF NUMBER REMAINING EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE PRICE EXERCISABLE PRICE
- --------------- ----------- ---------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$3.71 to $ 4.67............... 848,957 6.6 years $ 4.29 848,957 $ 4.29
$8.72 to $ 8.88............... 314,899 8.3 years $ 8.83 153,232 $ 8.78
$10.80 to $11.40.............. 313,125 8.1 years $10.88 160,833 $10.89
</TABLE>

At December 31, 1997, 846,057 options were exercisable.

6. LEASE COMMITMENTS

Minimum rental commitments as of June 30, 1998, for all noncancelable
operating leases, consisting principally of leases for office space, real estate
and tower space, are as follows (in thousands):

<S> <C>
Six months ending December 31, 1998......................... $ 2,193
Years ending December 31:
1999...................................................... 4,386
2000...................................................... 3,989
2001...................................................... 3,495
2002...................................................... 3,129
2003...................................................... 2,184
Thereafter.................................................. 2,708
-------
$22,084
=======
</TABLE>

Total rent expense amounted to approximately $2.4 million, $3.4 million, and
$2.0 million for the years ended December 31, 1996 and 1997, and the six months
ended June 30, 1998, respectively, of which $137,000 and $47,000 were paid to an
affiliate during 1996 and 1997, respectively.

7. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER CURRENT LIABILITIES

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ --------
<S> <C> <C>
Accounts payable........................................... $ 5,259 $ 3,948
Accrued operating expenses................................. 16,612 8,917
Income and other taxes payable............................. 1,847 2,951
Other...................................................... 4,328 4,600
------- -------
$28,046 $20,416
======= =======
</TABLE>

F-101
<PAGE>
PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

7. ACCOUNTS PAYABLE, ACCRUED EXPENSES, AND OTHER CURRENT LIABILITIES (CONTINUED)

Other current liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ --------
<S> <C> <C>
Unearned covenant not to compete........................... $ 2,125 $ 500
Interest payable........................................... 5,920 6,444
------- -------
$ 8,045 $ 6,944
======= =======
</TABLE>

8. MERGER WITH AMERICAN CELLULAR CORPORATION

On June 25, 1998, American Cellular Corporation acquired all of the
operations of the Company pursuant to an Agreement and Plan of Merger (the
Merger Agreement). At the effective time, as defined in the Merger Agreement,
the holders of each issued and outstanding share of Class A common stock and
Class B common stock received $14 in cash, without interest, and each issued and
outstanding share of Series A Preferred Stock received the product of $14 and
the number of Class A Shares into which each such share of Series A Preferred
Stock is convertible at such time in connection with a change of control.

F-102
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

25,000,000 SHARES

[LOGO]

CLASS A COMMON STOCK

---------------------

PROSPECTUS
---------------------

, 2000

JOINT BOOK RUNNING MANAGERS
LEHMAN BROTHERS SALOMON SMITH BARNEY
JOINT LEAD MANAGER
BANC OF AMERICA SECURITIES LLC
------------------

DEUTSCHE BANC ALEX. BROWN

GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Set forth below is an itemization of the costs that we expect to incur in
connection with the offer and sale of the securities that we are registering.
With the exception of the Securities Act and NASD fees, all amounts are
estimates.

<S> <C>
Securities Act Registration Fee............................. $ 166,980
NASD Filing Fee............................................. 30,500
Printing and Engraving Expenses.............................
Legal Fees and Expenses.....................................
Accounting Fees and Expenses................................
Miscellaneous...............................................
----------
Total.....................................................
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by the Oklahoma General Corporation Act under which the Company
is incorporated, the Company's Amended and Restated Certificate of Incorporation
provides for indemnification of each of the Company's officers and directors
against (a) expenses, including attorney's fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
any action, suit or proceeding brought by reason of his being or having been a
director, officer, employee or agent of the Company, or of any other
corporation, partnership, joint venture, or other enterprise at the request of
the Company, other than an action by or in the right of the Company, provided
that he acted in good faith and in a manner he reasonably believed to be in the
best interest of the Company, and with respect to any criminal action, he had no
reasonable cause to believe that his conduct was unlawful and (b) expenses
(including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of any action or suit by or in the
right of the Company brought by reason of his being or having been a director,
officer, employee or agent of the Company, or any other corporation,
partnership, joint venture, or other enterprise at the request of the Company,
provided that he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interest of the Company; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged liable to the Company, unless and
only to the extent that the court in which such action or suit was decided has
determined that the person is fairly and reasonably entitled to indemnification
for such expenses which the court shall deem proper. The Company's bylaws
provide for similar indemnification. These provisions may be sufficiently broad
to indemnify such persons for liabilities arising under the Securities Act of
1933, as amended.

The Company's directors and officers are also insured against claims arising
out of the performance of their duties in such capacities.

ITEM 15. RECENT SALE OF UNREGISTERED SECURITIES

In March 1996, the Registrant closed a private sale for cash of 100,000
shares of its Class B Convertible Preferred Stock. The aggregate consideration
received by the Registrant was $10 million. All of such shares were sold to
Fleet Venture Resources, Inc., Fleet Equity Partners VI, L.P. and Kennedy Plaza
Partners, or the Fleet Investors, each of whom was an accredited investor. Each
purchaser represented that the shares of the Registrant's Class B Convertible
Preferred Stock were

II-1
<PAGE>

being acquired for such purchaser's own account for investment and not with a
view to the distribution of such shares. The shares of Class B Convertible
Preferred Stock were not registered under the Securities Act in reliance upon
the exemption provided by Section 4(2) of the Securities Act.

On February 28, 1997, the Registrant closed a private sale for cash of its
11 3/4% Senior Notes due 2007. The gross proceeds received by the Registrant
were $160 million. All of such securities were sold to Morgan Stanley & Co.
Incorporated, Alex. Brown & Sons Incorporated, First Union Capital Markets Corp.
and Nationsbanc Capital Markets, Inc. as the Placement Agents, who offered the
securities only to Qualified Institutional Buyers (as defined in Rule 144A of
the Securities Act), institutional accredited investors (as defined in Rule
501(a)(1), (2), (3) or (7) of the Securities Act) and outside the United States
in compliance with Regulation S under the Securities Act. The securities were
not registered under the Securities Act in reliance upon the exemptions from
registration provided by Section 4(2) of, and Rule 144A promulgated under, the
Securities Act.

On January 22, 1998, the Registrant closed a private sale for cash of
175,000 shares of its 12 1/4% Senior Exchangeable Preferred Stock due 2008. The
gross proceeds received by the Registrant were $175 million. All of such
securities were sold to Morgan Stanley & Co. Incorporated, Merrill Lynch,
Pierce, Fenner and Smith Incorporated and NationsBanc Montgomery Securities LLC
as the Placement Agents, who offered the securities only to Qualified
Institutional Buyers (as defined in Rule 144A of the Securities Act),
institutional accredited investors (as defined in Rule 501(a)(1), (2), (3) or
(7) of the Securities Act) and outside the United States in compliance with
Regulation S under the Securities Act. The securities were not registered under
the Securities Act in reliance upon exemptions from registration provided by
Section 4(2) of, and Rule 144A promulgated under, the Securities Act.

On June 12, 1998, the Registrant's subsidiary, Logix Communications
Enterprises, Inc. (formerly, Dobson Wireless Company) closed a private sale for
cash of its 12 1/4% Senior Notes due 2008. The gross proceeds received by the
Registrant were $350 million. All of such securities were sold to Morgan Stanley
& Co. Incorporated and NationsBanc Montgomery Securities LLC, as the Placement
Agents, who offered the securities only to Qualified Institutional Buyers (as
defined in Rule 144A of the Securities Act), institutional accredited investors
(as defined in Rule 501(a)(1), (2), (3) or (7) of the Securities Act) and
outside the United States in compliance with Regulation S under the Securities
Act. The securities were not registered under the Securities Act in reliance
upon the exemption provided by Section 4(2) of, and Rule 144A promulgated under,
the Securities Act.

On December 23, 1998, the Registrant's subsidiary, Dobson/Sygnet
Communications Company, closed a private sale for cash of its 12 1/4% Senior
Notes due 2008. The gross proceeds received by the Registrant were
$200 million. All of such securities were sold to NationsBanc Montgomery
Securities, LLC, Lehman Brothers Inc., First Union Capital Markets and TD
Securities (USA) Inc. as the Initial Purchasers, who offered the securities only
to Qualified Institutional Buyers (as defined in Rule 144A of the Securities
Act) and outside the United States in compliance with Regulation S under the
Securities Act. The securities were not registered under the Securities Act in
reliance upon the exemptions provided by Section 4(2) of, and Rule 144A
promulgated under, the Securities Act.

On December 23, 1998, the Registrant closed a private sale for cash of
65,646 shares of its 12 1/4% Senior Exchangeable Preferred Stock. The gross
proceeds received by the Registrant were $50 million. All of such securities
were sold to NationsBanc Montgomery Securities LLC as the Initial Purchaser, who
offered a portion of the securities only to Qualified Institutional Buyers (as
defined in Rule 144A of the Securities Act). The securities were not registered
under the Securities Act in reliance upon the exemptions provided by
Section 4(2) of, and Rule 144A promulgated under, the Securities Act.

On December 23, 1998, the Registrant issued an aggregate of 30,000 shares of
its Class F Preferred Stock and warrants to purchase shares of its Class A
Common Stock for an aggregate cash consideration of $30 million. No underwriters
were involved in the transaction. The shares of Class F Preferred Stock and
Warrants were sold to seven purchasers, each of whom was an accredited investor

II-2
<PAGE>
(as defined in Rule 501(a) promulgated under the Securities Act), and each of
who represented that the Registrant's securities were being acquired for the
purchaser's own account for investment, and not with a view to a distribution
thereof. The securities were not registered under the Securities Act in reliance
upon exemptions from registration provided by Section 4(2) of the Securities Act
and Regulation D promulgated thereunder.

On December 23, 1998, the Registrant issued an aggregate of 75,093.7 shares
of its Class D Preferred Stock for an aggregate cash consideration of
$85 million. No underwriters were involved in the transaction. The shares of
Class D Preferred Stock were sold to thirty-three purchasers, each of whom was
an accredited investor (as defined in Rule 501(a) promulgated under the
Securities Act), and each of who represented that the Registrant's securities
were being acquired for the purchaser's own account for investment, and not with
a view to a distribution thereof. The securities were not registered under the
Securities Act in reliance upon exemptions from registration provided by Section
4(2) of the Securities Act and Regulation D promulgated thereunder.

On December 23, 1998, the Registrant issued an aggregate of 100,000 shares
of its Class A Common Stock upon conversion of the Registrant's outstanding
shares of Class B Convertible Preferred Stock. No cash or other consideration
was received by the Registrant in connection with such conversion. No
underwriters were involved in the transaction. The securities were not
registered under the Securities Act in reliance upon exemptions from
registration provided by Section 4(2) of the Securities Act and Regulation D
promulgated thereunder.

On December 23, 1998, the Registrant issued an aggregate of 37,853 shares of
its Class G Preferred Stock for an aggregate purchase price of $25 million in
exchange for 37,853 shares of the Registrant's Class A Common Stock which had
been valued at $25 million by the Registrant's Board of Directors. No
underwriters were involved in the transaction. The shares of Class G Preferred
Stock were sold to the Registrant's principal shareholder who is also an
accredited investor (as defined in Rule 501(a) promulgated under the Securities
Act). The purchaser represented that the shares of the Registrant's Class G
Preferred Stock were being acquired for the purchaser's own account for
investment, and not with a view to a distribution thereof. The securities were
not registered under the Securities Act in reliance upon exemptions from
registration provided by Section 4(2) of the Securities Act and Regulation D
promulgated thereunder.

On May 5, 1999, the Registrant closed a private sale for cash of 170,000
shares of its 13% Senior Exchangeable Preferred Stock due 2009. The gross
proceeds received by the Registrant were $170 million. All of such securities
were sold to Lehman Brothers Inc., as the Initial Purchaser, who offered the
securities only to Qualified Institutional Buyers (as defined in Rule 144A of
the Securities Act). The securities were not registered under the Securities Act
in reliance upon the exemptions from registration provided by Section 4(2) and
Rule 144A of the Securities Act.

From time to time during 1997, 1998 and 1999, the Registrant has granted
options to purchase shares of its Class B Common Stock and Class C Common Stock
pursuant to its existing Stock Option Plan. As of June 30, 1999, options to
purchase an aggregate of 28,560 shares of its Class B Common Stock and
3,622 shares of its Class C Common Stock were outstanding. No options which have
been granted have been exercised. The per share exercise price of each option is
the fair market value of the underlying share of common on the date the option
was granted as determined by the Registrant's Board of Directors. No
underwriters were involved in the grant of options. Each option agreement
requires, as a condition to exercise of the option, that the purchaser agree
that shares acquired upon exercise of the option will be acquired for the
purchaser's own account for investment, and not with a view to the distribution
of such shares. The securities were not registered under the Securities Act in
reliance upon exemptions from registration provided by Section 4(2) of the
Securities Act.

Beginning in September 1998, the Registrant's subsidiary, Logix
Communications Enterprises, Inc., has granted options to purchase shares of
Logix's common stock pursuant to its existing stock option

II-3
<PAGE>
plan. At June 30, 1999, options to purchase an aggregate of 1,728,500 shares of
Logix common stock were outstanding. No options which have been granted have
been exercised. The per share exercise price of each option is the fair market
value of the underlying common stock on the date of grant as determined by
Logix's Board of Directors. No underwriters have been involved in the grant of
options. Each option agreement requires, as a condition to exercise of the
option that the purchaser agree that the shares acquired upon exercise of the
option will be acquired for the purchaser's own account for investment, and not
with a view to the distribution of such shares.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement. **

2.1 Asset Purchase Agreement dated October 9, 1997 between
Texas 16 Cellular Telephone Company and Dobson Cellular
of Texas, Inc. (1) [2.1]

2.2.1 Stock Purchase Agreement dated November 17, 1997 as amended
by Amendment No. 1 thereto effective as of March 18, 1998
between the shareholders of Cellular 2000 Telephone Co.
listed therein and Dobson Cellular of California, Inc. (2) [2.6.1]

2.2.2 Stock Purchase Agreement dated March 19, 1998 between RSA
339, Inc. and AT&T Wireless Services, Inc. and Dobson
Cellular of California, Inc. (2) [2.6.2]

2.3 Securities Purchase Agreement dated March 25, 1998 between
Santa Cruz Cellular Telephone, Inc. and its shareholders
and optionholders listed therein and Dobson Cellular of
California, Inc. (2) [2.7]

2.4 Agreement and Plan of Merger dated July 28, 1998 between
Sygnet Wireless, Inc. and Dobson/Sygnet Operating Company
(formerly known as Front Nine Operating Company) (without
schedules). (3) [2.0]

2.5 Asset Purchase Agreement dated August 20, 1998, between Ohio
Wireless Communications, L.L.C. and Dobson Cellular of
Sandusky. (4) [2.9]

2.6 Asset Purchase Agreement dated as of September 2, 1998
between A-1 Cellular of Texas, L.P. and Dobson Cellular of
Navarro, Inc. (4) [2.10]

2.7 Asset Purchase Agreement dated November 24, 1998 between
First Cellular of Maryland, Inc. and Dobson Cellular of
Maryland, Inc. (4) [2.11]

2.8 Agreement to furnish unfiled schedules. (4) [2.12]

2.9 Asset Purchase Agreement dated September 8, 1999 by and
between ACC Arizona Cellular Communications, Inc. and
Dobson Cellular of Imperial, Inc. (13)

2.10 Asset Purchase Agreement dated September 30, 1999 between
Alaska 3 Cellular, LLC and Dobson Cellular Systems, Inc. (13)

2.11 Agreement and Plan of Merger dated October 5, 1999 among ACC
Acquisition LLC, ACC Acquisition Co. and American Cellular
Corporation. (13)

2.12 Asset Purchase Agreement dated October 6, 1999 between
Pacific Telecom Cellular of Alaska RSA 1, Inc. and Dobson
Cellular Systems, Inc. (13)
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
2.13 Asset Purchase Agreement dated October 25, 1999 between
Trillium Cellular Corp., Interstate Cellular Holdings
Corp., Universal Telecell, Inc. (d/b/a Unitel Wireless
Communications Systems, Inc.) and Dobson Cellular Systems,
Inc. (13)

2.14 License Acquisition Agreement dated November 9, 1999 among
DCC PCS, Inc., Royal Wireless, L.L.C., Arnage Wireless,
L.L.C. and (with respect to Section 10.12 only) AT&T
Wireless Services, Inc. (5)

3.1 Form of Registrant's Amended and Restated Certificate of
Incorporation. (5)

3.2 Form of Registrant's Amended and Restated Bylaws. (5)

4.1 Third Amended and Restated Credit Agreement among the Agents
and Lenders named therein and Dobson Operating Company (6) [4.1]
dated March 25, 1998, as amended. (7) [10.1]

4.2 $120 million Revolving Credit Agreement among Dobson
Cellular Operations Company and the Agents and Lenders (6) [4.2]
named therein dated as of March 25, 1998, as amended. (7) [10.1]

4.3 $80 million 364-Day Revolving Credit and Term Loan Agreement
among Dobson Cellular Operations Company and the Agents
and Lenders named therein dated as of March 25, 1998, as (6) [4.3]
amended. (7) [10.1]

4.4 Credit Agreement among the Agents and Lenders named therein
and Dobson/Sygnet Operating Company, dated as of
December 23, 1998. (4) [4.4]

4.5 $17.5 million Term Loan Agreement between Dobson Tower
Company and NationsBank, N.A. dated as of December 23,
1998. (4) [4.5]

4.6 New credit facility. **

4.7 Telephone Loan Contract dated as of November 7, 1958 between
Dobson Telephone Company, Inc. and United States of
America. (8) [4.2]

4.8 Telephone Loan Contract dated as of March 19, 1956 between
McLoud Telephone Company and United States of America. (8) [4.3]

4.9 Telephone Loan Contract dated as of January 15, 1993 between
Dobson Telephone Company, Inc., Rural Telephone Bank and
United States of America. (8) [4.4]

4.10 Restated Mortgage, Security Agreement and Financing
Statement dated as of May 15, 1993 between Dobson
Telephone Company, Rural Telephone Bank and United States
of America. (8) [4.5]

4.11 Indenture dated as of February 28, 1997 between the
Registrant, as Issuer, and United States Trust Company of
New York, as Trustee. (8) [4.6]

4.12 Escrow and Security Agreement dated February 28, 1997 among
the Registrant as Pledgor, and Morgan Stanley & Co.
Incorporated, Alex. Brown & Sons Incorporated, First Union
Capital Markets, and NationsBanc Capital Markets, Inc., as
Placement Agents, and United States Trust Company of New
York, as Trustee. (8) [4.9]

4.13 Agreement to furnish unfiled debt instruments. (2) [4.12]

4.14 Indenture dated December 23, 1998 between Dobson/Sygnet
Communications Company, as Issuer, and United States Trust
Company of New York, as Trustee. (3) [4.1]
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
4.15 Collateral Pledge and Security Agreement dated December 23,
1998 between Dobson/Sygnet Communications Company, as
Pledgor, and NationsBanc Montgomery Securities LLC, Lehman
Brothers Inc., First Union Capital Markets, a division of
Wheat First Securities, Inc. and TD Securities (USA) Inc.,
as Initial Purchasers, and United States Trust Company of
New York, as Trustee. (4) [4.18]

4.16 Form of Certificate representing Common Stock. **

5 Opinion of McAfee & Taft A Professional Corporation. (5)

10.1.1* Registrant's 1996 Stock Option Plan, as amended. (4) [10.1.1]

10.1.2* 1998 Stock Option Plan of Logix Communications Enterprises,
Inc. (f/k/a Dobson Wireline Company). (4) [10.1.2]

10.2.2 Promissory Note dated February 10, 1997 of G. Edward Evans
in the amount of $300,000 in favor of Western Financial
Services Corp. (8) [10.2.1]

10.2.3 Stock Purchase Agreement, dated as of March 26, 1998,
between the shareholders of American Telco Inc. and
American Telco Network Services, Inc. and Logix
Communications Enterprises, Inc. (f/k/a Dobson Wireline
Company). (9) [2.1]

10.2.3.1 First Amendment to Stock Purchase Agreement among American
Telco Inc. and American Telco Network Services, Inc. and
Logix Communications Enterprises, Inc. (f/k/a Dobson
Wireline Company). (9) [2.2]

10.2.4 Stock Purchase Agreement, dated December 23, 1998 among the
Registrant, the Fleet Investors and the other entities
listed therein. (4) [10.2.5]

10.2.5 Asset Purchase Agreement dated December 23, 1998 by and
between Sygnet Communications, Inc. and Dobson Tower
Company. (4) [10.2.6]

10.2.6.1 Asset Purchase Agreement dated July 6, 1999 by and among
American Tower Corporation, American Tower, LP, Dobson
Tower Company and the Registrant as Sole Shareholder of
Dobson Tower, as amended. (13)

10.2.7 Master Site License Agreement dated December 23, 1998 by and
between Sygnet Communications, Inc. and Dobson Tower
Company. (4) [10.2.7]

10.3.1* Letter dated June 3, 1996 from Registrant to Bruce R.
Knooihuizen describing employment arrangement. (8) [10.3.2]

10.3.2* Letter dated October 15, 1996 from Fleet Equity Partners to
Justin L. Jaschke regarding director compensation. (8) [10.3.3]

10.3.3* Letter dated December 26, 1996 from Registrant to G. Edward
Evans describing employment arrangement. (8) [10.3.1]

10.3.4* Letter dated September 16, 1997 from Registrant to William
J. Hoffman, Jr. describing employment arrangement. (2) [10.3.4]

10.3.5* Letter dated October 28, 1997 from Registrant to R. Thomas
Morgan describing employment arrangement. (2) [10.3.5]

10.3.6* Letter dated August 25, 1998 from Registrant to Richard D.
Sewell, Jr. describing employment arrangement. (4) [10.3.6]

10.3.7* Consulting Agreement dated December 21, 1998 between
Registrant and Albert H. Pharis, Jr. (4) [10.3.7]
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
10.3.8* Consulting Agreement dated August 15, 1998 between the
Registrant and Russell L. Dobson and Addendum thereto
dated October 1, 1998 (5)

10.4.1 North American Cellular Network Services Agreement dated
August 26, 1992 between North American Cellular Network,
Inc. and Dobson Cellular Systems, Inc. (8) [10.4.2]

10.4.2 Agreement for DS-3 service dated December 16, 1993 between
Logix Communications Corporation (f/k/a Dobson Fiber
Company) and NTS Communications, Inc. and Addendum thereto
dated June 1, 1994. (8) [10.4.1]

10.4.3 General Purchase Agreement dated January 13, 1998 between
Lucent Technologies, Inc. and Dobson Cellular Systems,
Inc. (2) [10.4.7]

10.4.4 Operating Agreement dated January 16, 1998 between AT&T
Wireless Services, Inc. and Dobson Cellular Systems, Inc. (13)

10.4.5 Fourth Amended General Purchase Agreement dated January 5,
1999 between Northern Telecom Inc. and Registrant. (2) [10.4.8]

10.6 Second Amended and Restated Partnership Agreement of Gila
River Cellular General Partnership dated September 30,
1997. (11) [10.8]

10.7.1 Investment and Transaction Agreement, dated December 23,
1998, among the Registrant, Dobson CC Limited Partnership
and J. W. Childs Equity Partners II, L.P. (without
exhibits). (4) [10.8.1]

10.7.2 Stockholder and Investor Rights Agreement, dated
December 23, 1998 among the Registrant and the
shareholders listed therein, (without exhibits). (4) [10.8.2]

10.7.2.1 Amendment to Stockholder and Investors Rights Agreement,
dated April 13, 1999 among the Registrant and the
Shareholders listed therein (without exhibits). (4) [10.8.2.1]

10.7.2.2 Amended and Restated Stockholders and Investor Rights
Agreement dated September 17, 1999 by and among the
Registrant and the Cash Equity Investors, as listed and
defined therein (without exhibits). (13)

10.7.3 Investors Agreement, dated December 23, 1998, among the
Registrant, and certain shareholders of Sygnet Wireless,
Inc. and their affiliates listed therein. (4) [10.8.3]

10.8 License Agreement dated February 15, 1999 between Registrant
and H.O. Systems, Inc. (10) [10.9]

21 List of Subsidiaries. (13)

23.1 Consent of McAfee & Taft A Professional Corporation will be
contained in Exhibit 5 hereto. (5)

23.2 Consent of Arthur Andersen LLP (Oklahoma City--DCC). (5)

23.3 Consent of Ernst & Young LLP (Cleveland--Sygnet). (5)

23.4 Consent of Ernst & Young LLP (Chicago--American Cellular). (5)

23.5 Consent of Paul Kagan Associates, Inc. (Carmel, CA). (5)

24 Power of Attorney. (5)
</TABLE>

II-7
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
27 Financial Data Schedule. (12)[27]
</TABLE>

- ------------------------

* Management contract or compensatory plan or arrangement.

** To be filed by amendment.

(1) Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on
April 10, 1998, as the exhibit number indicated in brackets and incorporated
by reference herein.

(2) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997 as the exhibit number indicated in brackets and
incorporated by reference herein.

(3) Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on
January 7, 1999, as the exhibit number indicated in brackets and
incorporated by reference herein.

(4) Filed as an exhibit to the Registrant's Registration Statement on Form S-4
(Registration No. 333-71633), as the exhibit number indicated in brackets
and incorporated by reference herein.

(5) Filed herewith.

(6) Filed as an exhibit to the Registrant's Registration Statement on Form S-4
(Registration No. 333-50107), as the exhibit number indicated in brackets
and incorporated by reference herein.

(7) Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on
May 27, 1999, as the exhibit number indicated in brackets and incorporated
by reference herein.

(8) Filed as an exhibit to the Registrant's Registration Statement of Form S-4
(Registration No. 333-23769), as the exhibit number indicated in brackets
and incorporated by reference herein.

(9) Filed as an exhibit to the Registrant's Current Report on Form 8-K on
June 30, 1998, as the exhibit number indicated in brackets and incorporated
by reference herein.

(10) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1998 as the exhibit number indicated in brackets and
incorporated by reference herein.

(11) Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on
October 15, 1997 and amended on November 6, 1997, as the exhibit number
indicated in brackets and incorporated by reference herein.

(12) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 1999 as the exhibit number indicated in brackets
and incorporated by reference herein.

(13) Previously filed as an exhibit to this Registration Statement.

(b) Financial Statement Schedules

None.

ITEM 17. UNDERTAKINGS.

(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a

II-8
<PAGE>
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.

(2) The undersigned registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this registration statement as of the time it was
declared effective.

(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering thereof.

II-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma
City, State of Oklahoma, on the 21st day of December, 1999.

<TABLE>
<S> <C> <C>
DOBSON COMMUNICATIONS CORPORATION

By: /s/ EVERETT R. DOBSON
-----------------------------------------
Everett R. Dobson
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities indicated on the 21st day of December, 1999.

<TABLE>
<CAPTION>
NAME TITLE
---- -----
<C> <S>
/s/ EVERETT R. DOBSON Chairman of the Board, President, Chief
------------------------------------------- Executive Officer and Director (Principal
Everett R. Dobson Executive Officer)

/s/ STEPHEN T. DOBSON
------------------------------------------- Secretary and Director
Stephen T. Dobson

/s/ BRUCE R. KNOOIHUIZEN
------------------------------------------- Vice President and Chief Financial Officer
Bruce R. Knooihuizen (Principal Financial Officer)

/s/ TRENT LEFORCE
------------------------------------------- Corporate Controller (Principal Accounting
Trent LeForce Officer)

/s/ RUSSELL L. DOBSON
------------------------------------------- Director
Russell L. Dobson

/s/ JUSTIN L. JASCHKE
------------------------------------------- Director
Justin L. Jaschke

------------------------------------------- Director
Albert H. Pharis, Jr.

/s/ DANA L. SCHMALTZ
------------------------------------------- Director
Dana L. Schmaltz
</TABLE>

II-10
<PAGE>
INDEX TO EXHIBITS

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
1.1 Form of Underwriting Agreement. **

2.1 Asset Purchase Agreement dated October 9, 1997 between
Texas 16 Cellular Telephone Company and Dobson Cellular
of Texas, Inc. (1) [2.1]

2.2.2 Stock Purchase Agreement dated March 19, 1998 between RSA
339, Inc. and AT&T Wireless Services, Inc. and Dobson
Cellular of California, Inc. (2) [2.6.2]

2.4 Agreement and Plan of Merger dated July 28, 1998 between
Sygnet Wireless, Inc. and Dobson/Sygnet Operating Company
(formerly known as Front Nine Operating Company) (without
schedules). (3) [2.0]

2.5 Asset Purchase Agreement dated August 20, 1998, between Ohio
Wireless Communications, L.L.C. and Dobson Cellular of
Sandusky. (4) [2.9]

2.6 Asset Purchase Agreement dated as of September 2, 1998
between A-1 Cellular of Texas, L.P. and Dobson Cellular of
Navarro, Inc. (4) [2.10]

2.7 Asset Purchase Agreement dated November 24, 1998 between
First Cellular of Maryland, Inc. and Dobson Cellular of
Maryland, Inc. (4) [2.11]

2.8 Agreement to furnish unfiled schedules. (4) [2.12]

2.9 Asset Purchase Agreement dated September 8, 1999 by and
between ACC Arizona Cellular Communications, Inc. and
Dobson Cellular of Imperial, Inc. (13)

2.10 Asset Purchase Agreement dated September 30, 1999 between
Alaska 3 Cellular, LLC and Dobson Cellular Systems, Inc. (13)

2.11 Agreement and Plan of Merger dated October 5, 1999 among ACC
Acquisition LLC, ACC Acquisition Co. and American Cellular
Corporation. (13)

2.12 Asset Purchase Agreement dated October 6, 1999 between
Pacific Telecom Cellular of Alaska RSA 1, Inc. and Dobson
Cellular Systems, Inc. (13)

2.13 Asset Purchase Agreement dated October 25, 1999 between
Trillium Cellular Corp., Interstate Cellular Holdings
Corp., Universal Telecell, Inc. (d/b/a Unitel Wireless
Communications Systems, Inc.) and Dobson Cellular Systems,
Inc. (13)

3.1 Form of Registrant's Amended and Restated Certificate of
Incorporation. (5)

3.2 Form of Registrant's Amended and Restated Bylaws. (5)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
4.1 Third Amended and Restated Credit Agreement among the Agents
and Lenders named therein and Dobson Operating Company (6) [4.1]
dated March 25, 1998, as amended. (7) [10.1]

4.2 $120 million Revolving Credit Agreement among Dobson
Cellular Operations Company and the Agents and Lenders (6) [4.2]
named therein dated as of March 25, 1998, as amended. (7) [10.1]

4.4 Credit Agreement among the Agents and Lenders named therein
and Dobson/Sygnet Operating Company, dated as of
December 23, 1998. (4) [4.4]

4.5 $17.5 million Term Loan Agreement between Dobson Tower
Company and NationsBank, N.A. dated as of December 23,
1998. (4) [4.5]

4.6 New credit facility. **

4.7 Telephone Loan Contract dated as of November 7, 1958 between
Dobson Telephone Company, Inc. and United States of
America. (8) [4.2]

4.8 Telephone Loan Contract dated as of March 19, 1956 between
McLoud Telephone Company and United States of America. (8) [4.3]

4.9 Telephone Loan Contract dated as of January 15, 1993 between
Dobson Telephone Company, Inc., Rural Telephone Bank and
United States of America. (8) [4.4]

4.10 Restated Mortgage, Security Agreement and Financing
Statement dated as of May 15, 1993 between Dobson
Telephone Company, Rural Telephone Bank and United States
of America. (8) [4.5]

4.11 Indenture dated as of February 28, 1997 between the
Registrant, as Issuer, and United States Trust Company of
New York, as Trustee. (8) [4.6]

4.13 Agreement to furnish unfiled debt instruments. (2) [4.12]

4.14 Indenture dated December 23, 1998 between Dobson/Sygnet
Communications Company, as Issuer, and United States Trust
Company of New York, as Trustee. (3) [4.1]

4.15 Collateral Pledge and Security Agreement dated December 23,
1998 between Dobson/Sygnet Communications Company, as
Pledgor, and NationsBanc Montgomery Securities LLC, Lehman
Brothers Inc., First Union Capital Markets, a division of
Wheat First Securities, Inc. and TD Securities (USA) Inc.,
as Initial Purchasers, and United States Trust Company of
New York, as Trustee. (4) [4.18]

4.16 Form of Certificate representing Common Stock. **

5 Opinion of McAfee & Taft A Professional Corporation. (5)

10.1.1* Registrant's 1996 Stock Option Plan, as amended. (4) [10.1.1]

10.1.2* 1998 Stock Option Plan of Logix Communications Enterprises,
Inc. (f/k/a Dobson Wireline Company). (4) [10.1.2]
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION METHOD OF FILING
--------------------- ----------- -------------------------------
<C> <S> <C>
10.2.2 Promissory Note dated February 10, 1997 of G. Edward Evans
in the amount of $300,000 in favor of Western Financial
Services Corp. (8) [10.2.1]