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AIRTHREAD ACQUISITION

Revenue Projections:
Service Revenue
Service Revenue Growth

Operating Assumptions

2008
4,194.3
14.0%

2009
4,781.5
14.0%

2010
5,379.2
12.5%

2011
5,917.2
10.0%

2012
6,331.4
7.0%

Equipment Revenue
Equipment Revenue/Service Revenue (1)

314.8
7.5%

358.8
7.5%

403.7
7.5%

444.1
7.5%

475.2
7.5%

Operating Expenses:
System Operating Expenses
System Operating Exp./Service Revenue

838.9
20.0%

956.3
20.0%

1,075.8
20.0%

1,183.4
20.0%

1,266.3
20.0%

Cost of Equipment Sold
Equipment COGS

755.5
240.0%

861.2
240.0%

968.9
240.0%

1,065.8
240.0%

1,140.4
240.0%

Selling, General & Administrative
SG&A/Total Revenue

1,803.6
40.0%

2,056.2
40.0%

2,313.2
40.0%

2,544.5
40.0%

2,722.6
40.0%

Depreciation & Amortization
Tax Rate

705.2
15.64%
40.0%

804.0
15.64%
40.0%

867.4
15.00%
40.0%

922.4
14.50%
40.0%

952.9
14.00%
40.0%

Working Capital Assumptions (1):
Accounts Receivable
Days Sales Equip. Rev.
Prepaid Expenses
Accounts Payable
Deferred Serv. Revenue
Accrued Liabilities

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

631.3
14.0%

719.7
14.0%

867.4
15.0%

970.1
15.3%

1,055.0
15.5%

522
135

595
154

669
173

736
190

788
204

Capital Expenditures (2):
Capital Expenditures
Cap-x/Total Revenue

(1) Based on a 360-day year. Days Payable, Deferred Service Revenue, and Days Accrued Liabilities are
based on total cash operating expenses.
(2) Includes investments in property, plant & equipment, as well as licenses and customer lists.

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AIRTHREAD ACQUISITION

Licensing Agreemts

Total Consolidated Markets:
Region Population Customers Penetration
Central US
65,096
3,846
5.9%
Mid-Atlantic
11,677
1,180
10.1%
New England
2,830
518
18.3%
Northwest
2,287
431
18.8%
New York
481
147
30.6%
Total
82,371
6,122
7.4%
Total Operating Markets:
Region Population Customers Penetration
Central US
32,497
3,846
11.8%
Mid-Atlantic
7,346
1,180
16.1%
New England
2,344
518
22.1%
Northwest
2,287
431
18.8%
New York
481
147
30.6%
Total
44,955
6,122
13.6%

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AIRTHREAD ACQUISITION

Customer Data:
Net Customer Additions
Cost Per Customer Addition
Cost of New Customer Additions
Cost of Equipment Sold/Equipment Revenue

Monthly Churn Rate

Revenue Per Minute
Monthly ARPU
Customer Minutes Per Month
Revenue Per Minute

2005
301
372
111,972

Customer Operating Data

2006
310
385
119,350

2007
477
487
232,299

251.3%

219.9%

239.8%

2.1%

2.1%

1.7%

2005
45.24
625
0.0724

2006
47.23
704
0.0671

2007
51.13
859
0.0595

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AIRTHREAD ACQUISITION

Income Statement

Historical Operating Results

Operating Results:
Service Revenue
Plus: Equipment Sales
Total Revenue
Less: System Operating Expenses
Less: Cost of Equipment Sold
Less: Selling, General & Administrative
EBITDA
Less: Depreciation & Amortization
EBIT
Less: Interest Expense
Plus: Equity in Earnings of Affiliates
Plus: Gains (Losses) on Investments
Plus: Other Income
EBT
Less: Taxes
Income Before Minority Interest
Less: Minority Interest
Net Income

2005
2,827.0
203.7
3,030.8
604.1
511.9
1,217.7
697.0
490.1
206.9
84.9
66.7
18.1
54.5
261.3
95.9
165.5
10.5
155.0

2006
3,214.4
258.7
3,473.2
639.7
568.9
1,399.6
865.0
555.5
309.5
93.7
93.1
50.8
(46.6)
313.1
120.6
192.5
13.0
179.5

2007
3,679.2
267.0
3,946.3
717.1
640.2
1,555.6
1,033.3
582.3
451.1
84.7
90.0
83.1
7.0
546.5
216.7
329.8
15.1
314.7
40
12

Harvard Business Publishing

AIRTHREAD ACQUISITION

Assets:
Cash & Cash Equivalents
Marketable Securities
Accounts Receivable
Inventory
Prepaid Expenses
Deferred Taxes
Other Current Assets
Total Current Assets
Property, Plan & Equipment
Licenses
Customer Lists
Marketable Equity Securities
Investments in Affiliated Entities
Long Term Note Receivable
Goodwill
Other Long Term Assets
Total Assets
Liabilities & Owners' Equity:
Accounts Payable
Deferred Revenue & Deposits
Accrued Liabilities
Taxes Payable
Deferred Taxes
Note Payable
Forward Contract
Derivative Liability
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Forward Contracts
Derivative Liability
Deferred Tax Liability
Asset Retirement Obligation
Other Deferred Liabilities
Minority Interest
Common Stock & Paid-In Capital
Retained Earnings
Total Liabilities & Owners' Equity

Balance Sheet

2005
29.0
0.0
362.4
92.7
32.1
8.2
15.5
539.9

2006
32.9
249.0
407.4
117.2
35.0
0.0
13.4
854.9

2007
204.5
16.4
435.5
101.0
41.6
18.6
16.2
833.8

2,553.0
1,362.3
47.6
225.4
172.1
4.7
481.2
30.0
5,416.2

2,628.8
1,494.3
26.2
4.9
150.3
4.5
485.5
31.1
5,680.6

2,595.1
1,482.4
15.4
0.0
157.7
4.4
491.3
31.8
5,611.9

254.1
111.4
42.9
36.7
0.0
135.0
0.0
0.0
82.6
662.7

254.9
123.3
47.8
26.9
26.3
35.0
159.9
88.8
93.7
856.7

260.8
143.4
59.2
43.1
0.0
0.0
0.0
0.0
97.7
604.2

1,001.4
159.9
25.8
647.1
90.2
46.2

1,001.8
0.0
0.0
601.5
127.6
62.9

1,002.3
0.0
0.0
554.4
126.8
84.5

41.9

36.7

43.4

1,375.0
1,366.0
5,416.2

1,378.9
1,614.4
5,680.6

1,404.1
1,792.1
5,611.9

working capital for 2007
115

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115

AIRTHREAD ACQUISITION

Amortization Schedule

Term Loan Amortization

Date:
1/31/2008
2/28/2008
3/31/2008
4/30/2008
5/31/2008
6/30/2008
7/31/2008
8/31/2008
9/30/2008
10/31/2008
11/30/2008
12/31/2008
1/31/2009
2/28/2009
3/31/2009
4/30/2009
5/31/2009
6/30/2009
7/31/2009
8/31/2009
9/30/2009
10/31/2009
11/30/2009
12/31/2009
1/31/2010
2/28/2010
3/31/2010
4/30/2010
5/31/2010
6/30/2010
7/31/2010
8/31/2010
9/30/2010
10/31/2010
11/30/2010
12/31/2010
1/31/2011
2/28/2011
3/31/2011
4/30/2011
5/31/2011

Payment
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41

Annual
Interest
5.50%
17
17
17
17
17
17
17
16
16
16
16
16
16
16
16
16
15
15
15
15
15
15
15
15
14
14
14
14
14
14
14
14
14
13
13
13
13
13
13
13
12

Principal
24
24
24
24
24
24
24
24
24
25
25
25
25
25
25
25
25
25
26
26
26
26
26
26
26
26
27
27
27
27
27
27
27
27
28
28
28
28
28
28
28

Amortization
Balance
Period
3,758
120
3,734
1
3,710
2
3,687
3
3,663
4
3,639
5
3,615
6
3,590
7
3,566
8
3,542
9
3,517
10
3,492
11
3,468
12
3,443
13
3,418
14
3,393
15
3,367
16
3,342
17
3,317
18
3,291
19
3,265
20
3,239
21
3,214
22
3,188
23
3,161
24
3,135
25
3,109
26
3,082
27
3,055
28
3,029
29
3,002
30
2,975
31
2,948
32
2,920
33
2,893
34
2,865
35
2,838
36
2,810
37
2,782
38
2,754
39
2,726
40
2,698
41

Date:
6/30/2011
7/31/2011
8/31/2011
9/30/2011
10/31/2011
11/30/2011
12/31/2011
1/31/2012
2/28/2012
3/31/2012
4/30/2012
5/31/2012
6/30/2012
7/31/2012
8/31/2012
9/30/2012
10/31/2012
11/30/2012
12/31/2012

Payment
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
2,176

Annual
Interest
5.50%
12
12
12
12
12
12
12
11
11
11
11
11
11
11
10
10
10
10
10

Principal
28
29
29
29
29
29
29
29
29
30
30
30
30
30
30
30
31
31
2,166

Amortization
Balance
Period
2,698
84
2,669
42
2,641
43
2,612
44
2,583
45
2,554
46
2,525
47
2,496
48
2,467
49
2,437
50
2,408
51
2,378
52
2,348
53
2,318
54
2,288
55
2,257
56
2,227
57
2,196
58
2,166
59
0
60

Harvard Business Publishing

Harvard Business Publishing

AIRTHREAD ACQUISITION

Equity
Comparable Companies:
Market Value
Universal Mobile
118,497
Neuberger Wireless
189,470
Agile Connections
21,079
Big Country Communications
26,285
Rocky Mountain Wireless
7,360
Average

Net
Debt
69,130
79,351
5,080
8,335
3,268

Debt/
Value
36.8%
29.5%
19.4%
24.1%
30.7%
28.1%

Debt/
Equity
58.3%
41.9%
24.1%
31.7%
44.4%
40.1%

Equity
Beta
0.86
0.89
1.17
0.97
1.13
1.00

Revenue
43,882
42,684
34,698
38,896
4,064

EBIT EBITDA
11,795
16,949
7,020
14,099
1,631
9,914
6,702
12,614
510
1,028

Bl= Bu(1+(1-t)D/V)
So
Bu=BL/(1+(1-t)D/V)

Net
Income
3,794
4,103
(30)
3,384
240

unleavered beta
0.637
0.711
1.022
0.815
0.892
0.82

Rf=4.25

Re
8.350

Rpm=5
beta =.82

Wireless Business Subscribers:
Average Monthly Subscribers (in MM's)
Average Monthly Minutes
Total Monthly Minutes
Revenue Per Minute
Annual Business Revenue Increase
Backhaul Savings:
System Operating Expenses
Backhaul Percentage
Estimated Backhaul Costs
Reduction in Backhaul Costs
Backhaul Savings

2008
0.30
859
258
0.0506
156
2008
838.9
20.0%
167.8
0.0%
0.0

2009
0.50
885
442
0.0506
269
2009
956.3
20.0%
191.3
7.0%
13.4

2010
0.70
911
638
0.0506
387

2011
1.00
939
939
0.0506
570

2012
1.20
967
1,160
0.0506
704

2010
1,075.8
20.0%
215.2
12.0%
25.8

2011
1,183.4
20.0%
236.7
22.2%
52.5

2012
1,266.3
20.0%
253.3
30.0%
76.0

#REF!

Revenue Projections:
Service Revenue
Equipment Revenue
Operating Expenses:
System Operating Expenses
Cost of Equipment Sold
Selling, General & Administrative
Depreciation & Amortization
Tax Rate
Working Capital Assumptions (1):
Accounts Receivable
Days Sales Equip. Rev.
Prepaid Expenses
Accounts Payable
Deferred Serv. Revenue
Accrued Liabilities
Capital Expenditures (2):
Capital Expenditures

2008
4,194.3
314.8

2009
4,781.5
358.8

2010
5,379.2
403.7

2011
5,917.2
444.1

2012
6,331.4
475.2

838.9
755.5
1,803.6
705.2
40.0%

956.3
861.2
2,056.2
804.0
40.0%

1,075.8
968.9
2,313.2
867.4
40.0%

1,183.4
1,065.8
2,544.5
922.4
40.0%

1,266.3
1,140.4
2,722.6
952.9
40.0%

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

41.67x
154.36x
1.38%
35.54x
14.01x
6.85x

631.3

719.7

867.4

970.1

1,055.0

522
135

595
154

669
173

736
190

788
204

EBIDTA
Dep and amortization
EBIT
tax rate
EBIT(1-t)

1,111.14 1,266.70 1,425.04 1,567.54 1,677.27
705.2
804.0
867.4
922.4
952.9
405.91
462.74
557.60
645.16
724.36
40.0%
40.0%
40.0%
40.0%
40.0%
243.5466491 277.6432 334.5593 387.0989 434.6153

Accounts Receivable
Days Sales Equip. Rev.
Prepaid Expenses
Accounts Payable
Deferred Serv. Revenue
Accrued Liabilities

521.8951263
134.9679175
46.91482791
335.4213192
163.2542474
64.60903987

594.9604
153.8634
53.4829
382.3803
186.1098
73.65431

669.3305
173.0964
60.16827
430.1778
209.3736
82.86109

736.2635
190.406
66.18509
473.1956
230.3109
91.1472

787.802
203.7344
70.81805
506.3193
246.4327
97.52751

Working capital
Change in WC
Capital Expenditures
Unleavered FCF
PV found by discounting at 8.35%
Interest Expense
Tax sheild
PV of tax sheild @ 5.5%

140.4932652
25.49326522
631.3
292.01
269.50
199
79.6
75.45023697

160.1623
19.66906
719.7
342.28
291.5594
183
73.2
65.76672

180.1826
20.02029
867.4
314.54
247.2793
166
66.4
56.54715

198.2009
18.01826
970.1
321.37
233.1802
148
59.2
47.78723

212.0749
13.87406
1,055.0
318.64
213.3835 1,254.91
128
51.2
39.17488 284.7262

Total Value

1,539.63

Net Reinvestment

116

Growthrate

2.87

from exhibit 5 working capital of 2007 is
115

discount rate of 8.35 from exhibit 7
0.922935
0.851809
0.786164
0.725578
0.669662

Interest Expense
199.000
r= 7.52

growth rate=Rinvestment
Reinvestment Rate*rROIC
Rate*ROIC
Capex+Change in WC-Dep/(EBIT)*EBIT(1-t)/(d+e)
1068.511

Assets:
Cash & Cash Equivalents
Marketable Securities
Accounts Receivable
Inventory
Prepaid Expenses
Deferred Taxes
Other Current Assets
Total Current Assets
Property, Plan & Equipment
Licenses
Customer Lists
Marketable Equity Securities
Investments in Affiliated Entities
Long Term Note Receivable
Goodwill
Other Long Term Assets
Total Assets
Liabilities & Owners' Equity:
Accounts Payable
Deferred Revenue & Deposits
Accrued Liabilities
Taxes Payable
Deferred Taxes
Note Payable
Forward Contract
Derivative Liability
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Forward Contracts
Derivative Liability
Deferred Tax Liability
Asset Retirement Obligation
Other Deferred Liabilities
Minority Interest
Common Stock & Paid-In Capital
Retained Earnings
Total Liabilities & Owners' Equity

2005
29.0
0.0
362.4
92.7
32.1
8.2
15.5
539.9

2006
32.9
249.0
407.4
117.2
35.0
0.0
13.4
854.9

2007
204.5
16.4
435.5
101.0
41.6
18.6
16.2
833.8

2,553.0
1,362.3
47.6
225.4
172.1
4.7
481.2
30.0
5,416.2

2,628.8
1,494.3
26.2
4.9
150.3
4.5
485.5
31.1
5,680.6

2,595.1
1,482.4
15.4
0.0
157.7
4.4
491.3
31.8
5,611.9

254.1
111.4
42.9
36.7
0.0
135.0
0.0
0.0
82.6
662.7

254.9
123.3
47.8
26.9
26.3
35.0
159.9
88.8
93.7
856.7

260.8
143.4
59.2
43.1
0.0
0.0
0.0
0.0
97.7
604.2

1,001.4
159.9
25.8
647.1
90.2
46.2

1,001.8
0.0
0.0
601.5
127.6
62.9

1,002.3
0.0
0.0
554.4
126.8
84.5

41.9

36.7

43.4

1,375.0
1,366.0
5,416.2

1,378.9
1,614.4
5,680.6

1,404.1
1,792.1
5,611.9

Cash and cash equivalents of 2008
ending balance of 2007+fcf of 08-int-principal=interest tax sheild
86.5

2008
87.0
16.0
522.0
135.0
47.0
19.0
16.0
842.0

2009
14.0
16.0
594.0
154.0
53.0
19.0
16.0
866.0

2010
0.0
16.0
670.0
173.0
60.0
19.0
16.0
954.0

2011
0.0
16.0
736.0
190.0
66.0
19.0
16.0
1,043.0

2012
0.0
16.0
787.0 <---- from sheet 1
203.0
70.0
19.0
16.0
1,111.0

2,521.096 2,436.096 2,436.096 2,484.096 2,587.096
1,482.0
1,482.0
1,482.0
1,482.0
1,482.0
15.0
15.0
15.0
15.0
15.0
0.0
0.0
0.0
0.0
0.0
158.0
158.0
158.0
158.0
158.0
4.0
4.0
4.0
4.0
4.0
491.0
491.0
491.0
491.0
491.0
32.0
32.0
32.0
32.0
32.0
5,545.096 5,484.096 5,572.096 5,709.096 5,880.096

2009

2010

2011

2012

14

-97

-207

-2462

<---- from sheet 1

PPE
PPE2007+CAPEX08-DEP08