UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

Commission File Number 000-28160

Western Wireless Corporation

(Exact name of registrant as specified in its charter)

(425) 586-8700

(Registrant’s telephone number, including area code)

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

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

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

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

WESTERN WIRELESS CORPORATION

FORM 10-Q

For the Quarter Ended March 31, 2005

TABLE OF CONTENTS

WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

See accompanying notes to the condensed consolidated financial statements

WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Dollars in thousands, except per share data)

(Unaudited)

WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME — (Continued)

(Unaudited)

See accompanying notes to the condensed consolidated financial statements

WESTERN WIRELESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

See accompanying notes to the condensed consolidated financial statements

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

      Western Wireless Corporation (“Western Wireless,” “the Company,” “we,” “our” and “us”) provides wireless communications services in the United States principally through the ownership and operation of cellular systems. We provide cellular operations primarily in rural areas in 19 western states under the CellularONE® and Western Wireless® brand names.

      At December 31, 2004, the Company owned approximately 98% of Western Wireless International Holding Corporation (“WWI”). WWI, through its consolidated subsidiaries and other operating companies, is a provider of wireless communications services in seven countries. WWI owns controlling interests in six of these countries: Austria, Ireland, Slovenia, Bolivia, Haiti and Ghana. We also have a non-controlling interest in Georgia. In January 2005, the President of WWI, who is also an Executive Vice President of the Company, exercised his right, pursuant to a Subscription and Put and Call Agreement with the Company, to exchange, for fair value, his 2.02% interest in WWI. The Company paid approximately $30 million in cash for the interest. This transaction was completed in March 2005 and the Company now owns 100% of WWI.

      The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosures for interim periods. The condensed consolidated balance sheet as of December 31, 2004 has been derived from audited financial statements. The unaudited interim condensed consolidated financial statements dated March 31, 2005 and 2004 are presented herein, and reflect all normal and recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Results of operations for interim periods presented herein are not necessarily indicative of results of operations for the entire year. For further information, refer to our annual audited financial statements and footnotes thereto contained in the Company’s Form 10-K for the year ended December 31, 2004.

      On January 9, 2005, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ALLTEL Corporation (“ALLTEL”) and Wigeon Acquisition LLC, a direct wholly-owned subsidiary of ALLTEL (“Merger Sub”), providing for, among other things, the merger of Western Wireless with and into Merger Sub (the “Merger”).

      In the Merger, each share of Western Wireless Class A Common Stock and Class B Common Stock (collectively, the “Western Wireless Common Stock”) will be exchanged for a combination of approximately 0.535 shares of ALLTEL common stock and $9.25 in cash. In lieu of that combination, Western Wireless shareholders may elect to receive either 0.7 shares of ALLTEL common stock or $40.00 in cash for each share of Western Wireless Common Stock; however, both of those elections will be subject to proration to preserve an overall mix of $9.25 in cash and approximately, but not less than, 0.535 shares of ALLTEL common stock for all of the outstanding shares of Western Wireless Common Stock taken together.

      Consummation of the Merger is subject to certain conditions, including: (i) the effectiveness of ALLTEL’s registration statement for its shares of common stock to be issued in the Merger; (ii) the approval and adoption of the Merger and the Merger Agreement by the holders of Western Wireless Common Stock representing two-thirds of all the votes entitled to be cast thereon; and (iii) the receipt of regulatory approvals, including the approval of the Federal Communications Commission and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). In February 2005, we and ALLTEL each received an additional request for information and documentary materials (a “Second Request”) from the U.S. Department of Justice. The HSR Act provides that the transaction may not close during a waiting period of 30 calendar days following certification by Western Wireless and ALLTEL that they have substantially complied with the Second Request.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      Contemporaneously with entering into the Merger Agreement, ALLTEL entered into a voting agreement (“the Voting Agreement”) with the following holders of Western Wireless Common Stock: John W. Stanton, Theresa E. Gillespie, The Stanton Family Trust, PN Cellular, Inc. and Stanton Communications Corporation. All of the shares of Western Wireless Common Stock beneficially owned by these shareholders, representing approximately 41% of the number of votes entitled to be cast, are subject to the Voting Agreement. Each of these shareholders is obligated by the Voting Agreement to vote its shares in favor of the approval and adoption of the Merger Agreement and the Merger.

      The Merger Agreement contains certain termination rights for each of Western Wireless and ALLTEL and further provides that, in the event of termination of the Merger Agreement under specified circumstances followed by an agreement by the Company to enter into an alternative transaction under specified circumstances, Western Wireless may be required to pay to ALLTEL a termination fee of $120 million.

      Although we believe that the Merger with ALLTEL will be completed in 2005, the underlying accounting within the consolidated financial statements and related disclosures assumes we will continue as a stand-alone entity as the completion of the merger is deemed not probable until all required regulatory approvals have been received.

      Certain amounts in prior years’ financial statements have been reclassified to conform to the 2005 presentation.

      The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its affiliate investments in which we have a greater than 50% interest. The affiliate investment in which we have a non-controlling interest, but have significant influence, is accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated. As of March 31, 2005, we consolidate six of WWI’s operating entities: Austria, Ireland, Slovenia, Bolivia, Haiti and Ghana.

      U.S. headquarter functions of WWI and majority owned European, South American and Caribbean consolidated subsidiaries are recorded as of the date of the financial statements. Our consolidated Ghanaian entity and our Georgian entity, which is accounted for using the equity method, are presented on a one-quarter lag. We believe presenting financial information on a one-quarter lag for certain entities is necessary to provide adequate time to convert the results into United States Generally Accepted Accounting Principles (“GAAP”) and ensure quality and accurate information to the users of our financial statements.

      As permitted under the provisions of Statement of Financial Standards (“SFAS”) No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS No. 148”), we have elected to continue to follow the intrinsic value method under Accounting Principles Board No. 25, “Accounting for Stock Issued to Employees,” (“APB 25”) in accounting for our stock-based compensation plans.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      The following table illustrates the effect on our net income and basic and diluted income per share if we had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), to our stock-based compensation plans:

      The fair value of each common stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option pricing model requires the input of highly subjective assumptions and does not necessarily provide a reliable measure of fair value. We utilized the following weighted average assumptions for options granted during the three months ended March 31, 2004:

      There were no common stock options granted during the three months ended March 31, 2005.

      In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement 123R, “Share-Based Payment, an Amendment of FASB Statements No. 123 and 95” (“SFAS No. 123R”), which requires all companies to measure compensation cost for all share based payments (including employee stock options) at fair value. This statement eliminates the ability to account for stock-based compensation transactions using APB 25 and, generally, would require instead that such transactions be accounted for using a fair-value based method. In April 2005, the SEC issued guidance that amends the compliance date of SFAS No. 123R. The SEC guidance allows companies to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next interim period, that begins after June 15, 2005. As a result, we will implement the new standard on January 1, 2006. The SEC guidance does not change the accounting required by SFAS 123R; only the dates for compliance with the standard. We intend to use the Black-Scholes-Merton

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

formula for initial adoption of SFAS No. 123R, as binomial models are currently still being developed and analyzed. The resulting expense amount recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income will include both the amortization of existing options and new options issued in future periods. We have elected not to perform any retrospective application, as permitted in SFAS No. 123R, and will prospectively implement SFAS No. 123R for our interim period ending March 31, 2006. We are currently evaluating the impact of SFAS No. 123R on our Condensed Consolidated Statements of Operations and Comprehensive Income.

      In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB No. 107”), which explains the interaction between certain SEC rules and regulations and SFAS No. 123R regarding the valuation of share-based payment arrangements for public companies. Specifically, SAB No. 107 provides guidance related to assumptions utilized in valuation methods, the capitalization of compensation cost related to share-based payment arrangements, the modification of stock options prior to adoption of SFAS 123R and disclosures subsequent to the adoption of SFAS 123R. In addition, SAB No. 107 requires compensation cost to be included in cost of service, general and administrative or sales and marketing expense on our Condensed Consolidated Statements of Operations and Comprehensive Income. SAB No. 107 will be effective for our interim period beginning July 1, 2005.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      The aggregate amounts of principal maturities as of March 31, 2005, are as follows (dollars in thousands):

      We have a $1.50 billion credit facility with a consortium of lenders (the “Credit Facility”). The Credit Facility consists of: (i) a $225 million term loan (“Term Loan A”); (ii) a $975 million term loan (“Term Loan B”); and (iii) a $300 million revolving loan (The “Revolving Credit Facility”). At March 31, 2005, the term loans were fully drawn and we had $240 million available to borrow under the Revolving Credit Facility.

      The Credit Facility requires us to make mandatory prepayments from proceeds of the issuance or incurrence of additional debt and from excess cash flow, as defined in the Credit Facility. In April 2005, under the terms of the Credit Facility, we prepaid approximately $34 million, applied to earliest maturities first, related to excess cash flow. Approximately $20 million of the excess cash flow payment was drawn under the Revolving Credit Facility and as such is classified as long-term debt as of March 31, 2005. For the remainder of 2005, there are no additional maturity payments required under the Credit Facility.

      The Credit Facility limits the amount we are permitted to invest in our international subsidiaries to $200 million (so long as $100 million is available under the Revolving Credit Facility), plus certain other amounts received, such as from the sale of stock of Western Wireless in August 2004 or the sale of any WWI stock or assets, subject to certain conditions. In February 2005, we invested approximately $125 million in our tele.ring subsidiary to repay the tele.ring term loan, which reduces the amount we are able to invest in our international subsidiaries. We were in compliance with our financial covenants under the Credit Facility at March 31, 2005.

      In June 2001, under the terms of the transaction to acquire tele.ring from a subsidiary of Vodafone Group Plc (“Vodafone”), an affiliate of Vodafone agreed to make available to tele.ring an unsecured term loan (the “tele.ring Term Loan”) for purposes of funding anticipated working capital and system expansion needs. In February 2005, the tele.ring Term Loan was repaid in full, which represented principal of $218.3 million and accrued interest of $22.0 million. The repayment was primarily made from cash provided by both tele.ring and Western Wireless and this portion was classified in the current portion of long-term debt at December 31, 2004. The repayment also included $30.0 million borrowed under the Revolving Credit Facility and, as such, this portion remained classified as long-term debt at December 31, 2004.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      In January 2005, we entered into a Merger Agreement with ALLTEL and Merger Sub, a direct wholly owned subsidiary of ALLTEL, providing for the Merger of the Company with and into Merger Sub (See Note 1). In connection with the Merger, the Company has entered into commitments for employee retention payments and professional service fees of approximately $45 million. Approximately $25 million of these payments are contingent upon the closing of the Merger.

      The Merger Agreement contains certain termination rights for each of Western Wireless and ALLTEL and further provides that, in the event of termination of the Merger Agreement under specified circumstances followed by an agreement by the Company to enter into an alternative transaction under specified circumstances, Western Wireless may be required to pay to ALLTEL a termination fee of $120 million.

      We, our directors, and ALLTEL are named as defendants in a lawsuit brought on January 12, 2005 in the Superior Court of the State of Washington, County of King at Seattle, arising out of our pending Merger with ALLTEL. The complaint alleges, among other things, that our directors breached their fiduciary duties in approving the merger, and as a result our shareholders will be irreparably harmed in that they will not receive their fair portion of the value of our assets and business and will be prevented from obtaining a fair price for their Western Wireless shares. The complaint also alleges, among other things, that we and ALLTEL have aided and abetted the alleged breaches of fiduciary duties by our directors. The complaint is brought on behalf of a purported class of all holders of our stock who will allegedly be harmed by defendants’ actions. The complaint seeks various forms of injunctive relief, including, among other things: decreeing that the Merger Agreement is unlawful and unenforceable, directing the individual defendants to obtain a transaction which is in the best interests of our shareholders until the process for the sale or auction of us is completed and the highest possible price is obtained, and rescinding the merger to the extent implemented. We and ALLTEL each believe that the allegations of the complaint are without merit.

      As previously disclosed, we are defending two lawsuits filed against us in King County Superior Court in Washington by certain former holders of minority interests in three of our subsidiaries. The lawsuits relate to our acquisition of the remaining minority interests in these three subsidiaries. The plaintiffs alleged a variety of contractual and other claims and sought an unspecified amount of damages. During the course of discovery, the plaintiffs asserted claims for damages in excess of $100 million. In an order dated September 9, 2004, the court granted our motion for summary judgment and dismissed with prejudice plaintiffs’ claims against all defendants. Plaintiffs have filed a notice of appeal with the Court of Appeals for the state of Washington. We believe that plaintiffs’ appeal is without merit and will contest this appeal vigorously. Although litigation is subject to inherent uncertainties, we believe that this litigation will not have a material adverse impact on us.

      In Slovenia, our largest competitor, the state-owned telephone company Mobitel, which has a market share of approximately 75%, charges their customers an exceptionally high tariff to call the customers of other networks, including our Slovenian operating company, Western Wireless International d.o.o. (“Vega”). As a result, potential customers may find subscribing to Vega’s service unattractive since it will be prohibitively expensive for most Slovenians to call them. We believe these pricing practices are anticompetitive and violate the laws of Slovenia and the European Union, including Articles 5 and 10 of the Slovenian Prevention of the

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

Restriction of Competition, Articles 75 and 77 of the Slovenian Telecommunications Act, and Article 82 of the EC Treaty to the European Commission.

      We have filed claims with Slovenia’s National Telecommunications Regulatory Authority (“NTRA”) and Competition Protection Office (“CPO”). In April 2005, the NTRA issued a recommendation that Mobitel equalize its retail charges for on and off-network calls for its prepaid customers and Mobitel has announced it will do so effective May 1, 2005. We further expect the CPO to issue its formal ruling during the second quarter of 2005. While we believe these recommendations and rulings will be supportive of our efforts, it is still unclear that they will ultimately resolve the anticompetitive behavior of Mobitel and we continue to actively pursue several other avenues to bring about regulatory relief, some of which may include legal action.

      We have also served a demand for compensation on the government of Slovenia in the amount of 174 million euro for damages arising from the government’s failure to regulate this market, as well as demanding immediate correction of the anti-competitive behavior of Mobitel. If there is no response to this demand, we expect to file a lawsuit in the courts of Slovenia with uncertainty as to the outcome and timing thereof.

      In the first quarter of 2005, we have had various discussions with Mobitel and the Slovenian government in an attempt to arrive at a solution to our claim for regulatory relief. Pursuant to SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) which requires recognition of an impairment loss if the carrying amount of a long-lived asset or group of long-lived assets exceeds the undiscounted cash flows associated with the asset or asset group, we conducted an impairment analysis of the long-lived assets in our Slovenian operating company as of March 31, 2005. Our impairment analysis included new assumptions that have arisen from our negotiations with Mobitel and the Slovenian government. Based on our negotiations, we believe a settlement is possible and have revised our estimates of future cash flows based on these discussions. Historically our estimates gave more prominence to the assumptions that the regulatory environment would change upon Slovenia’s entrance into the European Union which have not yet materialized to the extent we originally anticipated. Accordingly, we have taken a non-cash impairment charge of $24.3 million, which is equal to the amount by which the carrying value of the long-lived assets exceeded their fair value as of March 31, 2005, in accordance with SFAS No. 144. After taking the impairment charge, the long-lived assets in our Slovenian operating company had a net book value of approximately $66.7 million, of which, approximately 60% represents property and equipment, with the remaining approximately 40% representing licensing costs and other long-lived assets.

      Under the terms of the Ghana license, Western Telesystems Ghana Ltd. (“Westel”) was required to meet certain customer levels and build out requirements by February 2002. Westel was unable to meet the required customer levels due to the inability of the regulator to provide spectrum and enforce interconnection with the incumbent telephone company, and all development has been suspended. The National Communication Authority of Ghana (“NCA”) has assessed a penalty claim of $71 million for not meeting these build out requirements. During the course of settlement negotiations, the Government of Ghana (“GoG”) has proposed reducing the claim to approximately $25 million. Westel has contested this fine on the basis that the government and the NCA failed to deliver the key commitments of spectrum and interconnection. We do not believe the enforcement of these penalties is probable, but there can be no assurance to that effect. If we are unable to reach an agreement with the GoG, we may be required to impair our investment in Westel. As such, this asset is evaluated for impairment on an ongoing basis.

      In September 2004, WWI filed an expropriation claim against the GoG. WWI is seeking $152 million as compensation for the expropriation, by reason of failure to allocate spectrum, of WWI’s investment in Westel by the GoG acting primarily through the Ministry of Communications and the NCA. The Government has

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

submitted to binding international arbitration and both parties have initiated the appointment of arbitrators. Since the commencement of the arbitration proceedings, representatives of Westel and the GoG have recommenced discussions regarding the possible resolution of the dispute. No agreement has yet been reached. The net book value of long-lived assets in our Ghanaian operating company at March 31, 2005 was approximately $3.8 million.

      In the fourth quarter of 2004, we determined that we had adequate evidence that it is more likely than not that we will realize certain deferred tax assets for U.S. federal and state income tax purposes. As a result, we released the valuation allowance on certain federal and state deferred tax assets. We have continued to record a valuation allowance on certain federal and state deferred tax assets and all of our foreign net deferred tax assets, as we do not have sufficient evidence that they will be realized.

      On a consolidated basis, our effective tax rate was approximately 87% for the three months ended March 31, 2005 compared to approximately 21% for the three months ended March 31, 2004. Our effective tax rate for the three months ended March 31, 2005 was primarily impacted by losses in certain foreign jurisdictions, without a corresponding tax benefit, as the deferred tax assets in these jurisdictions continue to have a valuation allowance against them. Our effective tax rate for the three months ended March 31, 2005 is significantly higher than that reported in prior periods due to the release of valuation allowance on certain U.S. federal and state income tax deferred tax assets in the fourth quarter of 2004.

      The following table summarizes the components of our provision for income taxes:

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      The following table allocates the related tax effects for each component of other comprehensive income (loss) for the three months ended March 31, 2005:

      SFAS No. 128 “Earnings Per Share” requires two presentations of income per share — “basic” and “diluted.” Basic income per share is calculated using the weighted average number of shares outstanding during the period. Diluted income per share is computed on the basis of the weighted average number of common shares outstanding plus the dilutive effect of outstanding stock options and convertible debt using the “treasury stock” method or the “if converted” method, as applicable.

      In net income periods, certain options remain anti-dilutive because the option exercise price is above the average market price of our outstanding shares for the period. For the three months ended March 31, 2005 and 2004, weighted average shares issuable upon the exercise of stock options, which were not included in the calculation because they were anti-dilutive, were 661,000 and 761,000, respectively. For the three months ended March 31, 2005, 7,440,000 weighted average shares issuable upon the assumed conversion of the 4.625% Convertible Subordinated Notes due 2023 (“2023 Notes”) were excluded from the calculation of diluted earnings per common share because they were anti-dilutive. Stock option exercises and the conversion of all or a portion of the 2023 Notes could potentially dilute earnings per share in the future.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      The following table sets forth the computation of basic and diluted income per share:

      In March 2005, we entered into an agreement to purchase a 49.9% interest in Great Western Cellular Holdings, LLC (“GWCH”), the owner of the Minnesota 11 Rural Service Area (“RSA”), for $12.5 million. The agreement also requires us, at the option of GWCH, to purchase the remaining interest in 2006 for an additional $12.5 million. We anticipate that this transaction will close in the second quarter of 2005.

      In January 2005, the President of WWI, who is also an Executive Vice President of the Company, exercised his right, pursuant to a Subscription and Put and Call Agreement with the Company, to exchange, for fair value, his 2.02% interest in WWI. The Company paid approximately $30 million in cash for the interest. This transaction was completed in March 2005 and the Company now owns 100% of WWI. The purchase price, including deferred tax liabilities, resulted in $43.3 million in additional license costs in the first quarter of 2005.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      In March 2005, WWI acquired an additional 0.25% ownership of its Austrian subsidiary from a former officer of the same subsidiary for the fair value of approximately $2.3 million. The acquisition was in accordance with a Put Agreement entered into between the subsidiary and the former officer in the fourth quarter of 2001. WWI now holds 100% ownership of its Austrian subsidiary. As a result of this transaction, WWI recorded $2.3 million in additional license costs.

      Operations of the Company are overseen by domestic and international management teams each reporting to the Chief Executive Officer of the Company. Our international operations consist mainly of consolidated subsidiaries around the world. Our Chief Executive Officer acts as our Chief Operating Decision Maker and evaluates international operations on a country-by-country basis. Our reportable operating segments include domestic operations, Austrian operations, and all other international segments. The results of Slovenia, Ireland, Bolivia, Ghana and Haiti, are aggregated into “all other international” as provided for under SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”) based on their relative size along with having substantially similar businesses. Certain allocations have been made between the domestic and all other international segments reflecting certain centralized back office costs and assets benefiting both domestic and international operations. Adjusted EBITDA is the measure of profitability utilized by our Chief Operating Decision Maker and is presented herein in accordance with SFAS No. 131.

      Our domestic segment provides cellular services in rural markets in the western United States. Our Austrian segment provides both wireless and fixed line services in Austria, while the all other international segment provides mainly wireless services.

      The table below summarizes financial results for each segment:

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

(1) Adjusted EBITDA:

      EBITDA is a non-GAAP financial measure generally defined as net income (loss) before interest, taxes, depreciation and amortization. We use the non-GAAP financial measure “Adjusted EBITDA” which further excludes the following items: (i) accretion; (ii) asset dispositions; (iii) stock-based compensation, net; (iv) impairment of long-lived assets; (v) equity in net (income) loss of unconsolidated affiliates, and other, net; (vi) (gain) loss on sale of joint venture; (vii) realized (gain) loss on marketable securities; (viii) realized (gain) loss on interest rate hedges; (ix) loss on extinguishment of debt; (x) minority interests in net (income) loss of consolidated subsidiaries; (xi) discontinued operations; and (xii) cumulative change in accounting principle. Each of these items is presented in our Condensed Consolidated Statements of Operations and Comprehensive Income.

      Other companies in the wireless industry may define Adjusted EBITDA in a different manner or present other varying financial measures, and, accordingly, the Company’s presentation may not be comparable to other similarly titled measures of other companies. The Company’s calculation of Adjusted EBITDA is also not directly comparable to EBIT (earnings before interest and taxes) or EBITDA.

      We view Adjusted EBITDA as an operating performance measure and as such, believe that the GAAP financial measure most directly comparable to Adjusted EBITDA is net income (loss). We have presented Adjusted EBITDA because this financial measure, in combination with other financial measures, is an integral part of our internal reporting system utilized by management to assess and evaluate the performance of our business. Adjusted EBITDA is also considered a significant performance measure. It is used by management as a measurement of our success in obtaining, retaining and servicing customers by reflecting our ability to generate subscriber revenue while providing a high level of customer service in a cost effective manner. The components of Adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which we evaluate our performance.

      Adjusted EBITDA is consistent with certain financial measures used in our Credit Facility and the 9.25% Senior Notes due 2013 (“2013 Notes”). Such financial measures are key components of several negative covenants including, among others, the limitation on incurrence of indebtedness, the limitations on investments and acquisitions and the limitation on distributions and dividends.

      Adjusted EBITDA should not be construed as an alternative to net 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. We believe Adjusted EBITDA is useful to investors as a means to evaluate the Company’s operating performance prior to financing costs, deferred tax charges, non-cash depreciation and amortization expense, and certain other non-cash charges. Although Adjusted EBITDA may be defined differently by other companies in the wireless industry, we believe that Adjusted EBITDA provides some commonality of measurement in analyzing operating performance of companies in the wireless industry.

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      A reconciliation of net income (loss) to Adjusted EBITDA is included in the following table:

WESTERN WIRELESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)

      Within the all other international segment, revenues for our subsidiary in Ireland were $44.8 million and $22.7 million for the three months ended March 31, 2005 and 2004, respectively. Long-lived assets attributable to operations in Ireland, which are primarily comprised of property, plant, equipment and intangible assets, net of accumulated depreciation and amortization, were $209.9 million and $148.3 million at March 31, 2005 and 2004, respectively.

      Cautionary statement for purposes of the “Safe Harbor” provisions of the Private Litigation Reform Act of 1995. This quarterly report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are not based on historical fact, including without limitation statements containing the words “believes,” “may,” “will,” “estimate,” “continue,” “anticipates,” “intends,” “expects” and words of similar import, which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors all of which are difficult to predict and many of which are beyond our control and which may cause the actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, nationally, internationally and in the regions and countries in which Western Wireless Corporation operates; demographic changes; technology changes; increased competition; changes in business strategy or development plans; whether the pending merger described herein with ALLTEL Corporation (“ALLTEL”) will be completed and the effects on us in the event it is not completed; the high leverage of the Company and our ability to access capital markets; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; our ability to acquire and the cost of acquiring additional spectrum licenses; product liability and other claims asserted against the Company; and other factors included elsewhere in this report, in the Company’s filed public offering prospectuses or its reports filed with the Securities and Exchange Commission, including, without limitation, those described under the caption, “Risk Factors,” contained in our Form 10-K for the year ended December 31, 2004 and in our public offering prospectuses.

      Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.

      Unless the context requires otherwise, “Western Wireless,” “the Company,” “we,” “our” and “us” include us and our subsidiaries.

      The following discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Overview

      We provide cellular communications services in 19 western states under the CellularONE® (“CellularONE”) and Western Wireless®brand names principally through the ownership and operation of cellular wireless systems. Our domestic operations are primarily in rural areas due to our belief that there are certain strategic advantages to operating in these areas. Additionally, we own personal communications services (“PCS”) licenses in 18 western states which we primarily use to support our roaming partners.

      A significant portion of our domestic revenues have historically been derived from roaming. Our network includes the four major technologies currently available in the U.S. These technologies include analog and three digital standards: Time Division Multiple Access (“TDMA”); Code Division Multiple Access (“CDMA”); and Global System for Mobile Communications (“GSM”). All of the digital technologies employed by us allow for enhanced capacity and data services.

      At December 31, 2004, we owned approximately 98% of Western Wireless International Holding Corporation (“WWI”). WWI, through its consolidated subsidiaries and other operating companies, is a provider of wireless communications services in seven countries. WWI owns controlling interests in six of these countries: Austria, Ireland, Slovenia, Bolivia, Haiti and Ghana. We also have an equity interest in Georgia. In January 2005, the President of WWI, who is also an Executive Vice President of the Company, exercised his right, pursuant to a Subscription and Put and Call Agreement with the Company, to exchange, for fair value, his 2.02% interest in WWI. The Company paid approximately $30 million in cash for the interest. This transaction was completed in March 2005 and the Company now owns 100% of WWI.

Merger Announcement

      On January 9, 2005, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ALLTEL and Wigeon Acquisition LLC, a direct wholly-owned subsidiary of ALLTEL (“Merger Sub”), providing for, among other things, the merger of Western Wireless with and into Merger Sub (the “Merger”).

      In the Merger, each share of Western Wireless Class A Common Stock and Class B Common Stock (collectively, the “Western Wireless Common Stock”) will be exchanged for a combination of approximately 0.535 shares of ALLTEL common stock and $9.25 in cash. In lieu of that combination, Western Wireless shareholders may elect to receive either 0.7 shares of ALLTEL common stock or $40.00 in cash for each share of Western Wireless Common Stock; however, both of those elections will be subject to proration to preserve an overall mix of $9.25 in cash and approximately, but not less than, 0.535 shares of ALLTEL common stock for all of the outstanding shares of Western Wireless Common Stock taken together.

      Consummation of the Merger is subject to certain conditions, including: (i) the effectiveness of ALLTEL’s registration statement for its shares of common stock to be issued in the Merger; (ii) the approval and adoption of the Merger and the Merger Agreement by the holders of Western Wireless Common Stock representing two-thirds of all the votes entitled to be cast thereon; and (iii) the receipt of regulatory approvals, including the approval of the Federal Communications Commission and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). In February 2005, we and ALLTEL each received an additional request for information and documentary materials (a “Second Request”) from the U.S. Department of Justice. The HSR Act provides that the transaction may not close during a waiting period of 30 calendar days following certification by Western Wireless and ALLTEL that they have substantially complied with the Second Request.

      Contemporaneously with entering into the Merger Agreement, ALLTEL entered into a voting agreement (“the Voting Agreement”) with the following holders of Western Wireless Common Stock: John W. Stanton, Theresa E. Gillespie, The Stanton Family Trust, PN Cellular, Inc. and Stanton Communications Corporation. All of the shares of Western Wireless Common Stock beneficially owned by these shareholders, representing approximately 41% of the number of votes entitled to be cast, are subject to the Voting Agreement. Each of these shareholders is obligated by the Voting Agreement to vote its shares in favor of the approval and adoption of the Merger Agreement and the Merger.

      The Merger Agreement contains certain termination rights for each of Western Wireless and ALLTEL and further provides that, in the event of termination of the Merger Agreement under specified circumstances followed by an agreement by the Company to enter into an alternative transaction under specified circumstances, Western Wireless may be required to pay to ALLTEL a termination fee of $120 million.

Impairment Charge

      In Slovenia, our largest competitor, the state-owned telephone company Mobitel, which has a market share of approximately 75%, charges their customers an exceptionally high tariff to call the customers of other networks, including our Slovenian operating company, Western Wireless International d.o.o. (“Vega”). As a result, potential customers may find subscribing to Vega’s service unattractive since it will be prohibitively expensive for most Slovenians to call them. We believe these pricing practices are anticompetitive and violate the laws of Slovenia and the European Union, including Articles 5 and 10 of the Slovenian Prevention of the

Restriction of Competition, Articles 75 and 77 of the Slovenian Telecommunications Act, and Article 82 of the EC Treaty to the European Commission.

      We have filed claims with Slovenia’s National Telecommunications Regulatory Authority (“NTRA”) and Competition Protection Office (“CPO”). In April 2005, the NTRA issued a recommendation that Mobitel equalize its retail charges for on and off-network calls for its prepaid customers and Mobitel has announced it will do so effective May 1, 2005. We further expect the CPO to issue its formal ruling during the second quarter of 2005. While we believe these recommendations and rulings will be supportive of our efforts, it is still unclear that they will ultimately resolve the anticompetitive behavior of Mobitel and we continue to actively pursue several other avenues to bring about regulatory relief, some of which may include legal action.

      We have also served a demand for compensation on the government of Slovenia in the amount of 174 million euro for damages arising from the government’s failure to regulate this market, as well as demanding immediate correction of the anti-competitive behavior of Mobitel. If there is no response to this demand, we expect to file a lawsuit in the courts of Slovenia with uncertainty as to the outcome and timing thereof.

      In the first quarter of 2005, we have had various discussions with Mobitel and the Slovenian government in an attempt to arrive at a solution to our claim for regulatory relief. Pursuant to Statement of Financials Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) which requires recognition of an impairment loss if the carrying amount of a long-lived asset or group of long-lived assets exceeds the undiscounted cash flows associated with the asset or asset group, we conducted an impairment analysis of the long-lived assets in our Slovenian operating company as of March 31, 2005. Our impairment analysis included new assumptions that have arisen from our negotiations with Mobitel and the Slovenian government. Based on our negotiations, we believe a settlement is possible and have revised our estimates of future cash flows based on these discussions. Historically our estimates gave more prominence to the assumptions that the regulatory environment would change upon Slovenia’s entrance into the European Union which have not yet materialized to the extent we originally anticipated. Accordingly, we have taken a non-cash impairment charge of $24.3 million, which is equal to the amount by which the carrying value of the long-lived assets exceeded their fair value as of March 31, 2005, in accordance with SFAS No. 144. After taking the impairment charge, the long-lived assets in our Slovenian operating company had a net book value of approximately $66.7 million, of which, approximately 60% represents property and equipment, with the remaining approximately 40% representing licensing costs and other long-lived assets.

Results of Domestic Operations for the Three Months Ended March 31, 2005 and 2004

      We had 1,454,000 domestic subscribers at March 31, 2005 representing an increase of 58,600, or 4%, compared to December 31, 2004. We had 1,313,300 domestic subscribers at March 31, 2004 representing an increase of 22,900, or 2%, from December 31, 2003. At March 31, 2005, approximately 8% of our domestic subscribers were with a mobile virtual network operator (“MVNO”). As of March 31, 2005, prepaid subscribers represented approximately 2% of our customer base.

      The following table sets forth certain financial data as it relates to our domestic operations:

      For the definition of Adjusted EBITDA, and the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss), the most directly comparable GAAP financial measure, see “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA.” Adjusted EBITDA is the measure of profitability utilized by our Chief Operating Decision Maker and is presented herein in accordance with SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information” (“SFAS No. 131”).

Domestic Revenues

      The increase in subscriber revenues for the three months ended March 31, 2005 compared to the same period in 2004 was mainly due to an increase in average subscribers partially offset by a decrease in the average subscriber revenue per average subscriber (defined as subscriber revenues divided by average subscribers) (“ARPU”). ARPU was $46.56 for the three months ended March 31, 2005, compared to $47.80 for the three months ended March 31, 2004. The decrease in ARPU is due primarily to a decrease in subscriber access, airtime and incollect revenues on a per average subscriber basis offset by increases in feature revenues on a per average subscriber basis. The decrease in access revenue on a per average subscriber basis is due to growth in: (i) partner plans that share minutes with an existing plan at lower recurring monthly access rates; (ii) popularity of wholesale distribution programs, such as MVNOs; and (iii) prepaid plans that typically have lower revenues but offer flexible plans that appeal to individuals not interested in monthly postpaid services. The decrease in airtime and incollect revenues on a per average subscriber basis is due to the increase in rate plans that include a larger “bucket” of minutes and larger home calling areas. The increase in feature revenues on a per average subscriber basis is due mainly to the launch of data features such as, “Hello2Pix”, “Hello2Txt” and “Hello2Web”. We expect subscriber revenues to increase in 2005 as a result of subscriber growth. We expect that ARPU in 2005 will decrease slightly compared to 2004 due mainly to industry wide growth in partner plans, MVNOs and prepaid plans.

      The increase in roamer revenues for the three months ended March 31, 2005 compared to the same period in 2004 was due to an approximate $13 million increase related to increased roamer minutes of use (“MOUs”) partially offset by an approximate $10 million decrease related to lower per minute roaming rates. The lower revenue per minute was primarily the result of scheduled rate decreases charged between carriers coupled with a new lower contracted TDMA roaming rate with AT&T Wireless Services, Inc. (“AT&T Wireless”) that became effective in July 2004. Prior to the consummation of the merger between AT&T Wireless and Cingular Wireless LLC (“Cingular”) in October of 2004, we amended our TDMA roaming

agreement with AT&T Wireless to provide that AT&T Wireless will continue to prefer our network in a significant majority of our markets for TDMA roaming services in exchange for a lower per minute rate. Our TDMA roaming agreement with AT&T Wireless will continue to remain in effect for former AT&T Wireless customers until 2006. Our GSM roaming agreement with Cingular expires in March 2008. The merger has accelerated AT&T Wireless customer migration to GSM. The rates contained in our TDMA and GSM roaming agreements are substantially the same for AT&T Wireless and Cingular. We do not anticipate the Cingular and AT&T Wireless merger to have a material impact on our roaming traffic. We expect roamer revenues to increase in 2005 compared to 2004 with expected growth in minutes with GSM roaming partners being partially offset by contractual rate decreases.

      The increase in equipment sales for the three months ended March 31, 2005 compared to the same period in 2004 was due to an increase in the number of handsets sold partially offset by a decrease in the average revenue per handset sold. The decrease in average revenue per handset sold was due to changes in our promotional handset sales mix. We expect to continue to offer promotional handset pricing to subscribers who enter into service contracts with us.

Domestic Operating Expenses

      The increase in cost of service for the three months ended March 31, 2005 compared to the same period in 2004 was due to an increase in the volume of subscriber and roamer MOUs partially offset by decreased costs per MOU. Cost of service per MOU decreased to $0.017 for the three months ended March 31, 2005 from $0.019 for the three months ended March 31, 2004. The decrease in cost of service per MOU was primarily attributable to a decrease in interconnection costs on a per minute basis. In addition, we experienced decreased overall and per minute off-network roaming costs for our customers as a result of lower contractual rates. We expect cost of service dollars to increase in 2005 compared to 2004 to support the expansion of our GSM network and to support the growth in network MOUs. We expect cost of service per MOU will decline slightly in 2005 compared to 2004.

      Cost of equipment sales increased for the three months ended March 31, 2005 compared to the same period in 2004. The increase was the result of an increase in the volume of handsets sold partially offset by a decrease in the average per unit cost of handsets sold. The decrease in average revenue per handset sold was due to changes in our promotional handset sales mix. Although subscribers generally are responsible for purchasing or otherwise obtaining their own handsets, we have historically sold handsets below cost to respond to competition and general industry practice and expect to continue to do so in the future.

      General and administrative costs increased for the three months ended March 31, 2005 compared to the same period in 2004. The increase was primarily a result of retention and Merger costs. Our general and administrative monthly cost per average subscriber increased to $13.76 for the three months ended March 31, 2005 compared to $12.03 for the same period in 2004. Retention and Merger costs contributed approximately $10 million, or $2.24 per average subscriber, to the year-over-year increase. As a result of the Merger, the Company has entered into commitments for employee retention payments and professional service fees of approximately $45 million, of which approximately $25 million of these payments are contingent upon the closing of the Merger. In addition to these commitments, we expect to incur approximately $5 million in professional service and legal fees related to the Merger in 2005. Accordingly, we anticipate general and administrative costs and monthly general and administrative cost per average subscriber to be higher in 2005 as compared to 2004.

      Sales and marketing costs increased for the three months ended March 31, 2005 compared to the same period in 2004 primarily due to increases in fixed selling expenses such as advertising and retail store operating costs. For the three months ended March 31, 2005, cost per gross subscriber addition (“CPGA”) (determined by dividing the sum of sales and marketing costs and cost of equipment sales, reduced by equipment sales, by the number of gross subscriber additions) decreased to $353 compared to $422 for the three months ended March 31, 2004. The decrease in CPGA for the three months ended March 31, 2005 compared to the same period in 2004 was due mainly to a higher volume of gross subscriber additions coupled with lower variable costs driven by lower commissions on prepaid products. We include digital handset subsidies incurred in

retaining existing subscribers in subscriber acquisition costs. These subscriber retention costs had a $40 and $59 impact on CPGA for the three months ended March 31, 2005 and 2004, respectively. We expect CPGA to decrease in 2005 compared to 2004 as we expect increases in our gross additions year-over-year to be only partially offset by increases in our sales and marketing costs, including losses on equipment sales.

      Depreciation, amortization and accretion expense increased for the three months ended March 31, 2005 compared to the same period in 2004. This increase was due primarily to fixed asset additions partially offset by fully depreciated assets such as analog radios.

Domestic Adjusted EBITDA

      Domestic Adjusted EBITDA (see definition at “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA”) decreased for the three months ended March 31, 2005 compared to the same period in 2004 primarily as a result of retention and Merger costs. Operating margin (domestic Adjusted EBITDA as a percentage of service revenues) decreased to 39.0% for the three months ended March 31, 2005 compared to 44.5% for the three months ended March 31, 2004. We expect domestic Adjusted EBITDA to be relatively flat in 2005 due to Merger related expenses discussed above.

Results of International Operations for the three months ended March 31, 2005 and 2004

      The following discussions include, where meaningful, the results of WWI and our international operating segments for the quarters ended March 31, 2005 and 2004. WWI has operating segments consisting of each country in which it operates; however, Austria is our only reportable segment under the guidance of SFAS No. 131. Operating results related to Austria are separately disclosed where meaningful.

      U.S. headquarter functions of WWI and majority owned European, South American and Caribbean consolidated subsidiaries are recorded as of the date of the financial statements. Our consolidated Ghanaian entity and our Georgian entity, which is accounted for using the equity method, are presented on a one-quarter lag.

      Our international consolidated operations offer postpaid and prepaid mobile services in Austria, Ireland, Slovenia, Bolivia and Haiti and fixed line service in Austria and Ghana. We had 1,884,200 consolidated international subscribers at March 31, 2005, which represented an increase approximately of 6%, compared to December 31, 2004. Of these consolidated international subscribers, Austria had 917,400 subscribers at March 31, 2005, which represented an increase of approximately 1%, compared December 31, 2004. As of March 31, 2005 and 2004, approximately 40% and 46%, respectively, of our consolidated international subscribers were postpaid customers. As of March 31, 2005 and 2004, approximately 77% and 79%, respectively, of our Austrian subscribers were postpaid customers. As of March 31, 2005, we had 121,300 fixed lines, of which Austria represented 98%.

      The following table sets forth certain financial data as it relates to our international operations:

      For the definition of Adjusted EBITDA, and the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss), the most directly comparable GAAP financial measure, see “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA.” Adjusted EBITDA is the measure of profitability utilized by our Chief Operating Decision Maker and is presented herein in accordance with SFAS No. 131.

      Because our subsidiary, WWI, has operations in Austria, Ireland and Slovenia in which the functional currency is the euro, or is linked to the euro, fluctuations in exchange rates may have a significant impact on its financial results of operations. The results of operations for the three months ended March 31, 2005 compared to the same period in 2004 reflect the effects of a 5% average appreciation of the euro compared to the U.S. dollar. The appreciation of the euro had a comparable positive impact on revenues and negative impact on operating expenses. Our European subsidiaries, in aggregate, represented approximately 84% of total consolidated international revenues for the three months ended March 31, 2005. We cannot predict future fluctuations in currency exchange rates, and accordingly cannot predict the potential impact of any such fluctuations on WWI’s results of operations.

International Revenues

      Subscriber revenues increased for the three months ended March 31, 2005 compared to the same period in 2004 primarily due to an increase in the number of average subscribers across most of our markets and the strengthening of the euro as compared to the U.S. dollar. International ARPU was $40.16 and $41.93 for the three months ended March 31, 2005 and 2004, respectively. Austrian ARPU was $52.30 and $56.57 for the three months ended March 31, 2005 and 2004, respectively. The decreases in international and Austrian ARPU were mainly due a decline in usage per average postpaid subscriber together with an increase in the proportion of prepaid to total subscribers, who generally generate lower service revenue than postpaid subscribers. The strengthening of the euro compared to the U.S. dollar offset $1.85 and $2.90 of the actual decline in international and Austrian ARPU, respectively, for the three months ended March 31, 2005 compared to the same period in 2004. We anticipate growth in subscriber revenues in 2005 compared to 2004,

exclusive of further changes in currency exchange rates, due to anticipated year-over-year subscriber growth, primarily in Austria and Ireland, and a slight decline in ARPU as a result of an increase in the proportion of prepaid to total subscribers.

      Fixed line revenues decreased for the three months ended March 31, 2005 compared to the same period in 2004 as a result of an increase in average fixed line monthly churn in Austria due to competitive tariffs introduced by large fixed line providers and limited marketing activity by our Austrian subsidiary, partially offset by the strengthening of the euro compared to the U.S. dollar. We expect fixed line revenues, exclusive of further changes in currency exchange rates, to decline in 2005 compared to 2004 as a result of our continued limited marketing activity and focus on the wireless business in Austria.

      Equipment sales decreased for the three months ended March 31, 2005 compared to the same period in 2004 primarily due to selling fewer handsets as a result of adding fewer subscribers, mainly in Austria. Equipment sales were also negatively impacted by lower average revenue per handset sold, partially offset by the strengthening of the euro as compared to the U.S. dollar. We anticipate modest growth in international equipment sales in 2005 compared to 2004, exclusive of further changes in currency exchange rates, primarily as a result of increased mobile subscriber additions expected during the remainder of 2005.

International Operating Expenses

      Operating expenses represent the expenses incurred by our consolidated international markets and headquarters administration in the United States.

      Cost of service increased for the three months ended March 31, 2005 compared to the same period in 2004. This was due primarily to an increase in the number of average subscribers across most of our markets and the strengthening of the euro compared to the U.S. dollar. Monthly cost of service per average international subscriber was $17.49 and $20.27 for the three months ended March 31, 2005 and 2004, respectively. Monthly cost of service per average Austrian subscriber was $22.37 and $26.41 for the three months ended March 31, 2005 and 2004, respectively. The decreases in international and Austrian monthly cost of service per average subscriber are mainly due to increased cost efficiencies as a result of a growing subscriber base. The strengthening of the euro increased average monthly cost of service by $0.92 and $1.35 on a per average international and per average Austrian subscriber basis, respectively, in the three months ended March 31, 2005 compared to the same period in 2004. We expect cost of service dollars to increase in 2005 compared to 2004 due to a growing subscriber base, but decline on a per average international subscriber basis, exclusive of further changes in currency exchange rates, due to increased cost efficiencies.

      The decrease in cost of equipment sales for the three months ended March 31, 2005 over the same period in 2004 was largely due to the decline in the volume of handsets sold in Austria as a result of adding fewer subscribers, coupled with a decline in the average cost per handset sold. These decreases were partially offset by the strengthening of the euro as compared to the U.S. dollar. Although subscribers generally are responsible for purchasing or otherwise obtaining their own handsets, WWI has historically sold handsets below cost to respond to competition and general industry practice and expects to continue to do so in the future.

      General and administrative expenses increased for the three months ended March 31, 2005 compared to the same period in 2004 due primarily to an increase in the number of average subscribers across most of our markets and the strengthening of the euro compared to the U.S. dollar. General and administrative monthly cost per average international subscriber was $5.49 and $6.24 for the three months ended March 31, 2005 and 2004, respectively. General and administrative monthly cost per average Austrian subscriber was $4.42 and $6.22 for the three months ended March 31, 2005 and 2004, respectively. The decreases in general and administrative monthly cost per average international and Austrian subscriber were due primarily to increased cost efficiencies due to a growing subscriber base, partially offset by the strengthening of the euro compared to the U.S. dollar. The strengthening of the euro increased general and administrative monthly cost by $0.24 and $0.31 on a per average international subscriber and per average Austrian subscriber basis, respectively, for the three months ended March 31, 2005 compared to the same period in 2004. We expect general and administrative dollars to increase in 2005 compared to 2004 as a result of a growing subscriber base, but

decline slightly on a per average international subscriber basis, exclusive of further changes in currency exchange rates, due to increased cost efficiencies.

      Sales and marketing costs increased for the three months ended March 31, 2005 compared to the same period in 2004 primarily due to increased indirect commissions and the strengthening of the euro as compared to the U.S. dollar. Sales and marketing costs in Austria remained relatively constant for the three months ended March 31, 2005 compared to the same period in 2004. International CPGA was $195 and $210 for the three months ended March 31, 2005 and 2004, respectively. The decline in international CPGA was driven primarily by a decline in fixed sales costs per subscriber addition in Ireland as a result of increased subscriber additions, partially offset by an increase in Austrian CPGA to $408 from $298 in the three months ended March 31, 2005 as compared to the same period in 2004, due primarily to higher customer retention expenses, and the strengthening of the euro as compared to the U.S. dollar. The strengthening of the euro increased international and Austrian CPGA by $10 and $15, respectively, for the three months ended March 31, 2005 compared to the same period in 2004. We expect sales and marketing dollars, including equipment subsidies, to increase in 2005 compared to 2004, exclusive of further changes in currency exchange rates, due to an anticipated higher number of gross additions and increased retention costs resulting from a higher average subscriber base. We expect CPGA to decline in 2005 compared to 2004, exclusive of further changes in currency exchange rates, primarily due to an increase in the proportion of prepaid to total subscriber additions. Prepaid subscribers generally have a significantly lower acquisition cost than postpaid subscribers.

      Depreciation, amortization and accretion expense increased for the three months ended March 31, 2005 compared to the same period in 2004 due primarily to network expansion in our European markets and the strengthening of the euro compared to the U.S. dollar. As WWI continues to add wireless infrastructure to service its growing international subscriber base, we anticipate depreciation, amortization and accretion expense will increase in future periods.

      In the first quarter of 2005, we recorded an impairment of long-lived assets of $24.3 million on our Condensed Consolidated Statements of Operations and Comprehensive Income related to our investment in Slovenia. The impairment was due to updates in our estimate of future cash flows of our Slovenian entity.

International Adjusted EBITDA

      International Adjusted EBITDA (see definition at “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA”) for our international consolidated subsidiaries improved by $37.5 million for the three months ended March 31, 2005 compared to the same period in 2004. The increase was mainly due to an improvement of $23.4 million in Austrian Adjusted EBITDA as a result of revenue growth and cost efficiencies for the three months ended March 31, 2005 compared to the same period in 2004. We expect international Adjusted EBITDA to continue to improve in 2005 as a result of continued subscriber growth and cost efficiencies in existing markets, primarily Austria.

Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA

      EBITDA is a non-GAAP financial measure generally defined as net income (loss) before interest, taxes, depreciation and amortization. We use the non-GAAP financial measure “Adjusted EBITDA” which further excludes the following items: (i) accretion; (ii) asset dispositions; (iii) stock-based compensation, net; (iv) impairment of long-lived assets; (v) equity in net (income) loss of unconsolidated affiliates, and other, net; (vi) (gain) loss on sale of joint venture; (vii) realized (gain) loss on marketable securities; (viii) realized (gain) loss on interest rate hedges; (ix) loss on extinguishment of debt; (x) minority interests in net (income) loss of consolidated subsidiaries; (xi) discontinued operations; and (xii) cumulative change in accounting principle. Each of these items is presented in our Condensed Consolidated Statements of Operations and Comprehensive Income.

      Other companies in the wireless industry may define Adjusted EBITDA in a different manner or present other varying financial measures, and, accordingly, the Company’s presentation may not be comparable to other similarly titled measures of other companies. The Company’s calculation of Adjusted EBITDA is also not directly comparable to EBIT (earnings before interest and taxes) or EBITDA.

      We view Adjusted EBITDA as an operating performance measure and as such, believe that the GAAP financial measure most directly comparable to Adjusted EBITDA is net income (loss). We have presented Adjusted EBITDA because this financial measure, in combination with other financial measures, is an integral part of our internal reporting system utilized by management to assess and evaluate the performance of our business. Adjusted EBITDA is also considered a significant performance measure. It is used by management as a measurement of our success in obtaining, retaining and servicing customers by reflecting our ability to generate subscriber revenue while providing a high level of customer service in a cost effective manner. The components of Adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which we evaluate our performance.

      Adjusted EBITDA is consistent with certain financial measures used in our Credit Facility and the 9.25% Senior Notes due 2013 (“2013 Notes”). Such financial measures are key components of several negative covenants including, among others, the limitation on incurrence of indebtedness, the limitations on investments and acquisitions and the limitation on distributions and dividends.

      Adjusted EBITDA should not be construed as an alternative to net 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. We believe Adjusted EBITDA is useful to investors as a means to evaluate the Company’s operating performance prior to financing costs, deferred tax charges, non-cash depreciation and amortization expense, and certain other non-cash charges. Although Adjusted EBITDA may be defined differently by other companies in the wireless industry, we believe that Adjusted EBITDA provides some commonality of measurement in analyzing operating performance of companies in the wireless industry.

      A reconciliation of net income (loss) to Adjusted EBITDA is included in the following table:

Consolidated Other Income (Expense)

      Interest and financing expense increased slightly to $35.6 million for the three months ended March 31, 2005 from $34.3 million for the three months ended March 31, 2004. The increase in interest and financing expense was due mainly to an increase in our domestic weighted average interest rate and outstanding debt balances. Our domestic weighted average interest rate increased to 6.7% for the three months ended March 31, 2005 compared to 6.4% for the same period in 2004. For the three months ended March 31, 2005 and 2004, the international weighted average interest rate was 7.0% and 6.2%, respectively.

Consolidated Provision for Income Taxes

      For the three months ended March 31, 2005 our consolidated tax provision was $35.9 million on consolidated income before income taxes of $41.2 million. Our consolidated tax provision was comprised of current taxes payable of $5.6 million and $0.4 million in our international and U.S. tax jurisdictions, respectively, as well as $2.1 million and $27.8 million in deferred taxes in our international and U.S. tax jurisdictions, respectively. For the three months ended March 31, 2004 our consolidated tax provision was $9.6 million, comprised of $3.5 million in current taxes payable in our international jurisdictions and $6.1 million of deferred taxes in our U.S. tax jurisdiction, on consolidated income before income taxes of $45.8 million.

      In the fourth quarter of 2004, we determined that we had adequate evidence that it is more likely than not that we will realize certain deferred tax assets for U.S. federal and state income tax purposes. As a result, we released the valuation allowance on certain federal and state deferred tax assets. We have continued to record a valuation allowance on certain federal and state deferred tax assets and all of our foreign net deferred tax assets, as we do not have sufficient evidence that they will be realized.

      On a consolidated basis, our effective tax rate was approximately 87% for the three months ended March 31, 2005 compared to approximately 21% for the three months ended March 31, 2004. Our effective

tax rate for the three months ended March 31, 2005 was primarily impacted by losses in certain foreign jurisdictions, without a corresponding tax benefit, as the deferred tax assets in these jurisdictions continue to have a valuation allowance against them. Our effective tax rate for the three months ended March 31, 2005 is significantly higher than that reported in prior periods due to the release of valuation allowance on certain U.S. federal and state income tax deferred tax assets in the fourth quarter of 2004.

Consolidated Net Income

      On a consolidated basis, our net income decreased by $30.9 million for the three months ended March 31, 2005 compared to the same period a year ago. The decrease was due mainly to the impairment of long-lived assets related to our Slovenian business, an increase in the provision for income taxes and the incurrence of Merger related costs in 2005. These increases were partially offset by an increase in pre-tax income in our Austrian subsidiary.

Consolidated Liquidity and Capital Resources

      We have a $1.50 billion credit facility with a consortium of lenders (the “Credit Facility”). The Credit Facility consists of: (i) a $225 million term loan (“Term Loan A”); (ii) a $975 million term loan (“Term Loan B”); and (iii) a $300 million revolving loan (The “Revolving Credit Facility”). At March 31, 2005, the term loans were fully drawn and we had $240 million available to borrow under the Revolving Credit Facility.

      The Credit Facility requires us to make mandatory prepayments from proceeds of the issuance or incurrence of additional debt and from excess cash flow, as defined in the Credit Facility. In April 2005, under the terms of the Credit Facility, we prepaid approximately $34 million, applied to earliest maturities first, related to excess cash flow. Approximately $20 million of the excess cash flow payment was drawn under the Revolving Credit Facility and, as such, was classified as long-term debt as of March 31, 2005. For the remainder of 2005, there are no additional maturity payments required under the Credit Facility.

      The Credit Facility limits the amount we are permitted to invest in our international subsidiaries to $200 million (so long as $100 million is available under the Revolving Credit Facility), plus certain other amounts received, such as from the sale of stock of Western Wireless in August 2004 or the sale of any WWI stock or assets, subject to certain conditions. In February 2005, we invested approximately $125 million in our tele.ring subsidiary to repay the tele.ring term loan, which reduces the amount we are able to invest in our international subsidiaries. We were in compliance with our financial covenants under the Credit Facility at March 31, 2005.

      In June 2001, under the terms of the transaction to acquire tele.ring from a subsidiary of Vodafone Group Plc (“Vodafone”), an affiliate of Vodafone agreed to make available to tele.ring an unsecured term loan (the “tele.ring Term Loan”) for purposes of funding anticipated working capital and system expansion needs. In February 2005, the tele.ring Term Loan was repaid in full, which represented principal of $218.3 million and accrued interest of $22.0 million. The repayment was primarily made from cash provided by both tele.ring and Western Wireless and this portion was classified in the current portion of long-term debt at December 31, 2004. The repayment also included $30.0 million borrowed under the Revolving Credit Facility and, as such, this portion remained classified as long-term debt at December 31, 2004.

      None of our international loan facilities have recourse to Western Wireless Corporation.

      For the remainder of 2005, we anticipate spending approximately $145 million in domestic capital expenditures that will: (i) expand existing CDMA and GSM capacity to support the MOU growth on our network; (ii) build new coverage sites to expand our network in both CDMA and GSM; (iii) substantially complete our domestic CDMA overlay; and (iv) expand capabilities and the capacity of our information technology infrastructure.

      For the remainder of 2005, WWI’s business plans include capital expenditures of approximately $132 million, which is primarily related to the expansion of their networks in Austria and Ireland. In addition, WWI has debt service requirements of approximately $25 million. WWI plans to fund its international operations, including capital expenditures through cash flows from operations.

      In January 2005, the President of WWI, who is also an Executive Vice President of the Company, exercised his right, pursuant to a Subscription and Put and Call Agreement with the Company, to exchange, for fair value, his 2.02% interest in WWI. The Company paid approximately $30 million in cash for the interest. This transaction was completed in March 2005 and the Company now owns 100% of WWI. The purchase price, including deferred tax liabilities, resulted in $43.3 million in additional license costs in the first quarter of 2005.

      We believe that domestic operating cash flow and operating cash flow from certain international markets will be adequate to fund our projected domestic and international capital requirements for the remainder of 2005. If we do not achieve planned domestic operating cash flow targets, quarterly covenants and borrowing limitations contained in the Credit Facility and the 2013 Notes may trigger a limitation on the available borrowing capacity under the Credit Facility. Our operating cash flow is dependent upon, among other things: (i) the amount of revenue we are able to generate from our customers; (ii) the amount of operating expenses required to provide our services; (iii) the cost of acquiring and retaining customers; and (iv) our ability to grow our customer base. In order to comply with debt covenants or in the event that the borrowing capacity under the Credit Facility is limited, we may be required to curtail capital spending, reduce expenses, or otherwise modify our planned operations and/or raise additional capital through our Shelf Registration Statement and/or restructure or refinance our existing financing arrangements. Our ability to raise additional capital, if necessary, is subject to a variety of factors, including: (i) the commercial success of our operations; (ii) the volatility and demand of the capital markets, conditions in the economy generally and the telecommunications industry specifically; and (iii) other factors we cannot presently predict with certainty. There can be no assurance that such funds will be available to us or if such funding will be available on acceptable terms.

      As part of our overall business strategy, we regularly evaluate opportunities and alternatives, including acquisitions, dispositions, investments, and sources of capital, consummation of any of which could have a material effect on our business, financial condition, liquidity or results of operations. We have from time to time investigated a spin-off or divestiture of all or a portion of our international operations. No decision has been made as to whether to proceed with any transaction relating to our international operations. Any such transaction would be subject to numerous conditions, including, among others, approval by our board of directors of the terms and conditions of such a transaction, consent of ALLTEL as required by the terms of the Merger Agreement we entered into in connection with our announced Merger with ALLTEL, favorable market and financing conditions, the tax effects of such a transaction and any required governmental and third-party approvals.

      The following table summarizes our contractual cash obligations, utilizing current exchange rates, as of March 31, 2005:

      Net cash provided by operating activities was $124.5 million for the three months ended March 31, 2005 as compared to $95.1 million for the same period in 2004. The increase in net cash provided by operating activities for the three months ended March 31, 2005 compared to the same period in 2004 was due to increased non-cash charges included in net income from depreciation, amortization and accretion, deferred income taxes and impairment of long-lived assets.

      Net cash used in investing activities was $138.4 million for the three months ended March 31, 2005 as compared to $97.7 million for the same period in 2004. The year-over-year increase was due primarily to a $43.9 million increase in purchases of property and equipment.

      Net cash used in financing activities was $180.5 million for the three months ended March 31, 2005 as compared to $2.6 million for the same period in 2004. The year-over-year increase was primarily due to the repayment of our tele.ring term loan partially offset by borrowings under our Revolving Credit Facility.

Recently Issued Accounting Standards

      In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement 123R, “Share-Based Payment, an Amendment of FASB Statements No. 123 and 95” (“SFAS No. 123R”), which requires all companies to measure compensation cost for all share based payments (including employee stock options) at fair value. This statement eliminates the ability to account for stock-based compensation transactions using APB 25 and, generally, would require instead that such transactions be accounted for using a fair-value based method. In April 2005, the SEC issued guidance that amends the compliance date of SFAS No. 123R. The SEC guidance allows companies to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next interim period, that begins after June 15, 2005. As a result, we will implement the new standard on January 1, 2006. The SEC guidance does not change the accounting required by SFAS 123R; only the dates for compliance with the standard. We intend to use the Black-Scholes-Merton formula for initial adoption of SFAS No. 123R, as binomial models are currently still being developed and analyzed. The resulting expense amount recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income will include both the amortization of existing options and new options issued in future periods. We have elected not to perform any retrospective application, as permitted in SFAS No. 123R, and will prospectively implement SFAS No. 123R for our interim period ending March 31, 2006. We are currently evaluating the impact of SFAS No. 123R on our Condensed Consolidated Statements of Operations and Comprehensive Income.

      In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB No. 107”), which explains the interaction between certain SEC rules and regulations and SFAS No. 123R regarding the valuation of share-based payment arrangements for public companies. Specifically, SAB No. 107 provides guidance related to assumptions utilized in valuation methods, the capitalization of compensation cost related to share-based payment arrangements, the modification of stock options prior to adoption of SFAS 123R and disclosures subsequent to the adoption of SFAS 123R. In addition, SAB No. 107 requires compensation cost to be included in cost of service, general and administrative or sales and marketing expense on our Condensed Consolidated Statements of Operations and Comprehensive Income. SAB No. 107 will be effective for our interim period beginning July 1, 2005.

Market Risk Management

      We are exposed to various market financial risks, including changes in interest rates and foreign currency rates. As part of our risk management program, we utilize interest rate caps, swaps and collars to hedge a portion of our variable rate interest risk.

Interest Rate Risk

      Our Credit Facility is comprised of variable rate debt that at March 31, 2005 had an outstanding balance of $1.2 billion. The fair value of such debt approximates the carrying value. Of this variable rate debt, $1.0 billion was hedged using interest rate caps, swaps and collars. The caps, swaps and collars in effect at March 31, 2005 expire at various dates between June 2005 and August 2008. The hedges in effect at March 31, 2005 fixed LIBOR between 2.00% and 7.00%. Based on our domestic unhedged variable rate obligations outstanding at March 31, 2005 a hypothetical increase or decrease of 10% in the LIBOR rate would have increased or decreased our domestic interest expense for the three months ended March 31, 2005 by approximately $0.2 million.

      Our domestic operations have an interest rate swap with a total notional value of $200 million which converts fixed rate debt to variable rate debt. The interest rate swap was entered into as a hedge of the fair value of $200 million of the 2013 Notes. The interest rate swap expires on the 2013 Notes’ maturity date and is callable at the option of the issuer beginning July 15, 2008 with an optional termination date of January 8, 2009, exercisable by the issuer of the swap or us. On a semi-annual basis, we will pay a floating rate of interest equal to the six month LIBOR plus a fixed spread of 4.3975% and receive semi-annual fixed rate payments of 9.25% in return. The fair value of the interest rate swap was a liability to us of $5.8 million as of March 31, 2005. Assuming a hypothetical increase or decrease of 10% in interest rates, the fair value of the interest rate swap and 2013 Notes would have changed by approximately $6.0 million at March 31, 2005.

      Our international operations also have variable rate debt that at March 31, 2005 had an outstanding balance of approximately $70.5 million. Of this variable rate debt at March 31, 2005, $63.7 million was hedged using an interest rate swap, which fixes the interest rate at 4.94% through November 2009. Based on WWI’s unhedged variable rate obligations outstanding at March 31, 2005, a 10% increase or decrease in each borrowing’s average interest rate would not have impacted WWI’s interest expense for the three months ended March 31, 2005.

Foreign Currency Risk

      Currently, 15% of our total international revenues are denominated in U.S. dollars. Certain of our international subsidiaries have functional currencies other than the U.S. dollar and their assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. A 10% appreciation in the U.S. dollar would have resulted in an approximately $0.3 million decrease in income before provision for income taxes for the three months ended March 31, 2005. Such a change in income before provision for income taxes would have resulted from applying a different exchange rate to translate and revalue the financial statements of our international subsidiaries with functional currencies other than the U.S. dollar.

      At March 31, 2005, our Slovenian operations, whose functional currency is the Slovenian Tolar, had variable rate debt of approximately $62.6 million and $7.9 million denominated and repayable in Euros and Slovenian Tolars, respectively. The fair value of such debt approximates the carrying amount on the consolidated balance sheet at March 31, 2005. A 10% appreciation in the Euro as compared to the Slovenian Tolar would have resulted in an approximately $6.3 million decrease in income before provision for income taxes during the three months ended March 31, 2005. Such a change in income before provision for income taxes would have been the result of an unrealized foreign exchange loss. A 10% appreciation in the Euro and Slovenian Tolar as compared to the U.S. dollar would have resulted in an approximately $7.8 million increase in debt outstanding at March 31, 2005 with an offsetting currency translation adjustment.

Evaluation of Disclosure Controls and Procedures

      As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer along with our Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Chairman and Chief Executive Officer along with our Executive Vice President and Chief Financial Officer, have concluded that our disclosure controls and procedures were effective to ensure that all material information relating to the Company required to be included in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

      As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2004 which we filed on March 16, 2005, our management concluded that, as of December 31, 2004, a material weakness existed in our internal control over financial reporting. The Public Company Accounting Oversight Board has defined material weakness as “a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.” This material weakness related to the Company’s controls over accounting for income taxes and the determination of income taxes payable, deferred income tax assets and liabilities and the related benefit (provision) for income taxes and could have resulted in a material misstatement to the Company’s annual or interim financial statements. Specifically, the Company did not have effective controls to (i) identify and evaluate in a timely manner the tax implications of certain non-routine transactions, and new accounting pronouncements and new state, federal or international tax legislation; and (ii) ensure appropriate preparation and review of the benefit (provision) for income taxes and the components of income taxes payable and deferred income tax assets and liabilities.

      In order to remediate this material weakness, we implemented the following internal control measures:

      As of March 31, 2005, management has concluded that these measures have been effective in remediating this material weakness. Other than these internal control measures, there have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

      Other than as previously disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2004, there are no material, pending legal proceedings to which we or any of our subsidiaries is a party or of which any of their property is subject which, if adversely decided, would have a material adverse effect on the Company.

      None.

      None.

      None.

      None.

SIGNATURES

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

Dated: May 6, 2005

EXHIBIT INDEX