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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

OR

FOR THE TRANSITION PERIOD FROM              TO             .

Commission file number 333-39746

IWO HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

(337) 436-9000

(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  x    No  ¨

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

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IWO HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

See accompanying notes to condensed consolidated financial statements

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IWO HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

See accompanying notes to condensed consolidated financial statements

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IWO HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

See accompanying notes to condensed consolidated financial statements

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IWO HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2004

(Unaudited)

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

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

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

Recent Accounting Pronouncements

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities—An Interpretation of Accounting Research Bulletin (ARB) No. 51” (“FIN 46”). This interpretation clarifies how to identify variable interest entities and how a company should assess its interests in a variable interest entity to decide whether to consolidate the entity. FIN 46 applies to variable interest entities created after January 31, 2003, in which a company obtains an interest after that date. Also, FIN 46 applies at the end of the first reporting period after March 15, 2004, to variable interest entities in which a company holds a variable interest that it acquired before February 1, 2003. The adoption of this interpretation did not have a material effect on the Company’s financial position, results of operations or cash flows.

In May 2003, the Emerging Issues Task Force (“EITF”) modified its previous consensus to EITF 00-21 to clarify the scope of Issue 00-21 and its interaction with other authoritative literature. As permitted under the modified consensus, the Company adopted this modified consensus effective July 1, 2003 for all revenue arrangements entered into subsequent to September 30, 2003. EITF 00-21 addresses the determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the related revenues should be measured and allocated to the separate units of accounting. In applying this guidance, separate contracts with the same party, entered into at or near the same time, will be presumed to be a package, and the consideration will be measured and allocated to the separate units based on their relative fair values. The Company has reviewed EITF 00-21 and determined that the sale of handsets and future service under contract should be accounted for as separate units under EITF 00-21. As a result, the total consideration under these arrangements, including any related activation fees, is allocated between these separate units based on their relative fair values.

IWO Holdings, Inc. (“the Company” or “IWO”), a wholly owned subsidiary of US Unwired Inc. (“US Unwired”), is a network partner of Sprint PCS and has the exclusive right to provide digital PCS services under the Sprint and Sprint PCS brand in all or portions of Massachusetts, New Hampshire, New York, Pennsylvania and Vermont.

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

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

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

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

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

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

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

As a result of liquidity challenges, the Company has reduced capital expenditures for network expansion. Included in this reduction are cell sites that it is required to construct to meet the build out requirements under its management agreement with Sprint. Failure to complete the build out of its service area will place the Company in violation of its management agreement with Sprint. As a result, Sprint PCS could declare the Company in default and take action up to and including termination of its management agreement with Sprint. At September 30, 2004, the Company’s construction in progress included $5.6 million primarily related to cell sites that it plans to complete and management estimates that completion of these cell sites will require approximately $7.2 million in additional costs to complete construction and place these sites in operation. The Company anticipates that only a portion of these sites will be completed in 2004.

Due to restrictions in the US Unwired debt instruments, US Unwired cannot provide any capital or other financial support to the Company. Further, IWO creditors, IWO lenders and IWO note holders cannot place any liens or encumbrances on the assets of US Unwired. Should the holders of the IWO senior secured credit facility place IWO in default, US Unwired’s relationship with IWO may change and several alternatives exist

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ranging from working for the holders of the IWO senior secured credit facility and the holders of the IWO senior notes as a manager of the IWO territory, possibly subject to the approval by Sprint PCS, to no involvement with the Company at all.

Considering the Company’s default of its senior secured credit facility and its liquidity as discussed above, there is substantial doubt about the Company’s ability to continue as a going concern.

Major categories of property and equipment consisted of the following:

Intangibles consisted of the following:

The Company eliminated amounts for its subscriber bases and related amortization related to its April 2002 acquisition by US Unwired, that was fully amortized in the nine-month period ended September 30, 2004.

Long-term obligations consisted of the following:

IWO is an unrestricted subsidiary of US Unwired. As a result, funds available under the Company’s senior secured credit facility and senior notes can only be used by the Company to finance the operations of the Company and funds available under US Unwired’s senior notes can only be used by US Unwired to finance operations of US Unwired.

Since March 2004, the Company has failed to make $8.8 million in principal payments due on its senior secured credit facility. The Company was also not in compliance with its restrictive covenants under its senior secured credit facility at September 30, 2004. As a result of the Company’s failure to make scheduled

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principal payments and the covenant violations, the Company was in default of its senior secured credit facility at September 30, 2004 and the holders of the senior secured credit facility have denied the Company access to the remaining $23.4 million of availability.

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

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

Amended and Restated Senior Secured Bank Credit Facility

Effective December 2000, Independent Wireless One Corporation, a wholly owned subsidiary of the Company, entered into amended and restated senior secured bank credit facility (“senior secured credit facility”) under which it may borrow up to $240 million in the aggregate consisting of $170 million in term loans and up to $70 million in revolving loans. The senior secured credit facility matures in 2008. The term loans are due to be repaid in quarterly installments beginning in March 2004 and the reducing revolver matures in March 2008. All loans under the senior secured credit facility, effective with the date of the default, as discussed above, bear interest at a rate of 4.25-4.75 percent above the agent bank’s prime rate. The senior secured credit facility is collateralized by all of the assets of the Company and its subsidiaries.

Senior Notes – 14%

In February 2001, the Company issued 160,000 units, each consisting of $1,000 principal amount of 14% Senior Notes (“senior notes”) due January 15, 2011 and one warrant to purchase 12.50025 shares of the Company’s class C common stock at an exercise price of $7.00 per share. As a result of US Unwired’s acquisition of the Company in April 2002, this warrant was converted to a US Unwired warrant to purchase 12.96401 shares of the US Unwired’s common stock at $6.75 per share. Interest is payable semi-annually on January 15 and July 15 of each year. Independent Wireless One Corporation, a wholly owned subsidiary of the Company, is the sole guarantor of the senior notes. All of the Company’s restricted subsidiaries formed or acquired after the issuance of the senior notes that guarantee the Company’s senior bank credit facility will also be required to guarantee the senior notes. The senior notes are not guaranteed by Independent Wireless One Realty Corporation, a wholly owned subsidiary of the Company. Effective April 1, 2002, with the acquisition by US Unwired, the Company’s senior notes were revalued to a fair value of $136.0 million. The resulting discount is being accreted over the remaining life of the notes using the effective interest method.

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

The PCS licenses that the Company operates for Sprint PCS are subject to a requirement that Sprint PCS construct network facilities that offer coverage to 25% of the population or have substantial service in each of its Basic Trading Areas (“BTAs”) within five years from the grant of the licenses. As of September 30, 2004, management believes that Sprint PCS has met the requirements necessary for the licenses that the Company operates for Sprint PCS under its Sprint PCS management agreements.

The Company uses Sprint PCS to process all post-pay PCS subscriber billings including monthly recurring charges, airtime and other charges such as interconnect fees. The Company pays various fees to Sprint PCS for new subscribers as well as recurring monthly fees for services performed for existing customers including billing and management of customer accounts. Sprint PCS’s billing for these services is based upon an estimate of the actual costs incurred by Sprint PCS to provide such services. At the end of each calendar year, Sprint PCS compares its actual costs to provide such services to remittances by the Company for estimated billings and either refunds overpayments or bills for costs in excess of the payments made. Based upon information as provided by Sprint PCS, the Company believes it has adequately provided for the above-

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mentioned costs in the accompanying consolidated financial statements. Additionally, Sprint PCS has contracted with national retailers that sell handsets and service to new PCS subscribers in the Company’s markets. Sprint PCS pays these national retailers a new subscriber commission and provides handsets to such retailers below cost. Sprint PCS passes these costs of commissions and the handset subsidies to the Company.

The Company periodically reviews all charges from Sprint PCS and from time to time, the Company may dispute certain of these charges. As of September 30, 2004, the Company had disputed approximately $15.2 million of charges to IWO. Based upon the information provided to the Company by Sprint PCS to date, the Company believes the accompanying condensed consolidated balance sheet adequately reflects its obligation that may be due to Sprint PCS for these charges.

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

The Company’s effective income tax rate for the interim periods presented is based on management’s estimate of the Company’s effective tax rate for the applicable year and differs from the federal statutory income tax rate primarily due to nondeductible permanent differences, state income taxes and changes in the valuation allowance for deferred tax assets. The Company’s income or loss for tax purposes is included in the income tax return of the parent. However, the Company’s income tax provision is computed on a separate basis.

Independent Wireless One Leased Realty Corporation (the “Non-Guarantor”), a 100% wholly owned subsidiary of Independent Wireless One Corporation, is precluded from guaranteeing the debt of IWO Holdings, Inc. based on current agreements in effect. Independent Wireless One Corporation is not restricted from serving as a guarantor of the IWO Holdings, Inc. debt.

Independent Wireless One Leased Realty Corporation holds all of the cell site leases and certain leases related to the retail stores and tower site leases. Operating expenses are comprised of rent expense from these leases. Independent Wireless One Leased Realty Corporation has charged Independent Wireless One Corporation a fee equal to its rent expense for use of its leased cell sites, office and retail space.

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The information which follows presents the condensed consolidating balance sheet as of September 30, 2004 and December 31, 2003 and the condensed consolidating results of operations and cash flows for the three and nine-month periods ended September 30, 2004 and 2003 of (a) the Parent Company, IWO Holdings, Inc., (b) the “Guarantor”, Independent Wireless One Corporation, and (c) the “Non-Guarantor”, Independent Wireless One Leased Realty Corporation, and includes consolidating entries and the Company on a consolidated basis.

Condensed Consolidating Balance Sheet

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Condensed Consolidating Balance Sheet

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Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Operations

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Condensed Consolidating Statement of Operations