AIRTHREAD ACQUISITION

Equity Net Debt/ Debt/ Equity Asset

Comparable Companies: Market Value Debt Value Equity Beta Beta
Universal Mobile 65,173 60,160 48.0% 92.3% 0.86 0.55
Neuberger Wireless 94,735 27,757 22.7% 29.3% 0.89 0.76
Agile Connections 37,942 9,144 19.4% 24.1% 1.17 1.02
Big Country Communications 47,314 15,003 24.1% 31.7% 0.97 0.81
Rocky Mountain Wireless 5,299 2,353 30.8% 44.4% 1.13 0.89
Average 50,093 22,883 29.0% 40.8% 1.00 0.81
 Debt/ Debt/ Asset Equity Cost of Cost of
Value Equity Beta Beta Equity Debt WACC
0.0% 0.0% 0.81 0.81 8.29% 5.50% 8.29%
5.0% 5.3% 0.81 0.85 8.50% 5.50% 8.24%
10.0% 11.1% 0.81 0.90 8.74% 5.50% 8.19%
15.0% 17.6% 0.81 0.95 9.00% 5.50% 8.15%
20.0% 25.0% 0.81 1.01 9.30% 5.50% 8.10%
25.0% 33.3% 0.81 1.08 9.64% 5.50% 8.05%
29.0% 40.8% 0.81 1.14 9.94% 5.50% 8.01%
35.0% 53.8% 0.81 1.24 10.47% 5.50% 7.96%
40.0% 66.7% 0.81 1.35 10.98% 5.50% 7.91%
45.0% 81.8% 0.81 1.47 11.60% 5.50% 7.86%
47.0% 88.7% 0.81 1.52 11.87% 5.50% 7.84%
50.0% 100.0% 0.81 1.62 12.33% 5.50% 7.81%
Assumptions:
Marginal Tax Rate 40.0%
Debt Beta 0.00

Market Risk Premium 5.00%

Risk-Free Rate 4.25%
Average industry EBIT 5,532
Cost of Debt 5.50% Average Industry P/E 13.19
Re-levering the asset beta on the
constant capital structure assumption,
Equity Beta = Asset Beta (V/E) i.e.,
Be = Ba*(1/1-(D/V))
Cost of Capital
AIRTHREAD ACQUISITION

Operating Results: 2008 2009 2010 2011 2012

Service Revenue 4,194.3 4,781.5 5,379.2 5,917.2 6,331.4
Plus: Equipment Sales 314.8 358.8 403.7 444.1 475.2
Plus: Synergy Related Business Revenue 0.0 0.0 0.0 0.0 0.0
Total Revenue 4,509.1 5,140.4 5,782.9 6,361.2 6,806.5
Less: System Operating Expenses 838.9 956.3 1,075.8 1,183.4 1,266.3
Plus: Backhaul Synergy Savings 0.0 0.0 0.0 0.0 0.0
Less: Cost of Equipment Sold 755.5 861.2 968.9 1,065.8 1,140.4
Less: Selling, General & Administrative 1,803.6 2,056.2 2,313.2 2,544.5 2,722.6
EBITDA 1,111.1 1,266.7 1,425.0 1,567.5 1,677.3
Less: Depreciation & Amortization 705.2 804.0 867.4 922.4 952.9
EBIT 405.9 462.7 557.6 645.2 724.4
Tax @40% 162.4 185.1 223.0 258.1 289.7
Un-Levered Free Cash Flow:
NOPAT 243.5 277.6 334.6 387.1 434.6
Plus: Depreciation & Amortization 705.2 804.0 867.4 922.4 952.9
Less: Changes in Working Capital 25.9 19.7 20.0 18.0 13.9
Less: Capital Expenditures 631.3 719.7 867.4 970.1 1,055.0
Un-Levered Free Cash Flow 291.6 342.3 314.5 321.4 318.6

PV Intermediate FCF 8.29% 1,256.6 269.3 291.9 247.7 233.7 214.0

Operating Margins:
Service Revenue Growth 14.0% 14.0% 12.5% 10.0% 7.0%
Equipment Sales/Service Revenue 7.5% 7.5% 7.5% 7.5% 7.5%
Total Revenue Growth 14.3% 14.0% 12.5% 10.0% 7.0%
Wireless Service Gross Profit Margin 80.0% 80.0% 80.0% 80.0% 80.0%
Equipment Sales Gross Profit -140.0% -140.0% -140.0% -140.0% -140.0%
Selling, General & Administrative 40.0% 40.0% 40.0% 40.0% 40.0%
EBITDA 24.6% 24.6% 24.6% 24.6% 24.6%
Depreciation & Amortization 15.6% 15.6% 15.0% 14.5% 14.0%
EBIT 9.0% 9.0% 9.6% 10.1% 10.6%
Effective Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%
Cap-x/Revenue 14.0% 14.0% 15.0% 15.3% 15.5%
Intermediate Operating Cash Flows
Based on projected cashflows excluding the benefits of Synergy
Changes in Working Capital: 2007 2008
Accounts Receivable 435.5 521.9
Plus: Inventory 101.0 135.0
Plus: Prepaid Expenses 41.6 46.9
Less: Deferred Revenue 143.4 163.2
Less: Accounts Payable 260.8 335.5
Less: Accrued Liabilities 59.2 64.7
Net Working Capital 114.6 140.4
Increase in NWC 0 25.8
benefits of Synergy
2009 2010 2011 2012
595.0 669.4 736.3 787.9
153.9 173.1 190.4 203.7
53.5 60.1 66.2 70.8
186.1 209.3 230.3 246.4
382.4 430.2 473.2 506.4
73.7 82.9 91.2 97.6
160.1 180.1 198.1 212.0
19.7 20.0 18.0 13.9
AIRTHREAD ACQUISITION

AirThread Debt Capacity:

Pre-Synergy Est. 2007 EBITDA 1,033 Total Borrowing
Interest Coverage Ratio 5.00x Amortization Period
Maximum Interest Expense 207 Payments Per Year
Interest Rate 5.50% Monthly Payment
Est. Debt Capacity 3,758

Excludes Synergies:
Excess Cash: 2008 2009 2010 2011 2012
Un-Levered Free Cash Flow 291.6 342.3 314.5 321.4 318.6
Less: After-Tax Interest Expenses 119.7 109.8 99.5 88.5 77.0
Less: Scheduled Principal Payme 289.9 306.3 323.6 341.8 2,496.0
Excess Cash (118.0) (73.8) (108.5) (109.0) (2,254.3)

Cash on Balance Sheet 86.58 12.7 (95.8) (204.7) (2,459.0)

Includes Synergies:
Excess Cash: 2008 2009 2010 2011 2012
Un-Levered Free Cash Flow 324.3 416.5 424.5 487.9 535.7
Less: After-Tax Interest Expsnse 119.7 109.8 99.5 88.5 77.0
Less: Scheduled Principal Payme 289.9 306.3 323.6 341.8 2,496.0
Excess Cash (85.3) 0.4 1.5 57.6 (2,037.3)

Cash on Balance Sheet 119.2 119.6 121.1 178.7 (1,858.6)

Cash Reconciliation: 2008

Beginning Cash Balance 204.5
Plus: Cash From Operations 291.6
Less: Aft-Tax Interest Exp. 119.7
Less: Principal Payments 289.9
Ending Cash Balance 86.58

Cash Reconciliation: 2008

Beginning Cash Balance 204.5
Plus: Cash From Operations 324.3
Less: Aft-Tax Interest Exp. 119.7
Less: Principal Payments 289.9
Ending Cash Balance 119.2
 3,758
10 Years
12
41
Debt Capacity
AIRTHREAD ACQUISITION

Interest Tax Shields: 2008 2009 2010 2011 2012

Interest Expense 199.4 183.1 165.8 147.5 128.3
Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%
Tax Shield 79.8 73.2 66.3 59.0 51.3
Interest Rate 5.50%
PV of Intermediate Tax Shields 284.8 75.6 65.8 56.5 47.6 39.3
Intermediate Tax Shields
AIRTHREAD ACQUISITION
Terminal Value With Lon-Term D/V of 29%

Un-Levered Free Cash Flows: 2008 2009 2010 2011 2012

NOPAT 243.5 277.6 334.6 387.1 434.6
Plus: Depreciation & Amortization 705.2 804.0 867.4 922.4 952.9
Less: Changes in Working Capital 25.9 19.7 20.0 18.0 13.9
Less: Capital Expenditures 631.3 719.7 867.4 970.1 1,055.0
Un-Levered Free Cash Flow 291.6 342.3 314.5 321.4 318.6

PV of FCF 8.29% 1,256.6 269.3 291.9 247.7 233.7 214.0

Interest Tax Shields 79.8 73.2 66.3 59.0 51.3
PV of Interest Tax Shields 284.8 75.6 65.8 56.5 47.6 39.3
Total Intermediate Term Value 1,541.3

TV Growth Rate 2.9%

TV WACC Cash Flow 4,334.3 6,372.8

Value of Operating Assets 5,875.7

Value of Non-Operating Assets 1,187.3
Total Enterprise Value 7,063.0
Adjusted Present Value
Excludes Synergy
AIRTHREAD CONNECTION ACQUISITION

Project: AIRTHREAD CONNECTION ACQUISITION

Analysis: Projected Cash Flows
AIRTHREAD CONNECTION ACQUISITION

Projected Income Statements

Operating Results: 2008 2009 2010 2011 2012

Service Revenue 4,194.3 4,781.5 5,379.2 5,917.2 6,331.4
Plus: Equipment Sales 314.8 358.8 403.7 444.1 475.2
Plus: Synergy Related Business Revenue 156.5 268.6 387.3 569.9 704.5
Total Revenue 4,665.6 5,409.0 6,170.3 6,931.2 7,511.0
Less: System Operating Expenses 838.9 956.3 1,075.8 1,183.4 1,266.3
Plus: Backhaul Synergy Savings 0.0 (13.4) (25.8) (52.5) (76.0)
Less: Cost of Equipment Sold 755.5 861.2 968.9 1,065.8 1,140.4
Less: Selling, General & Administrative 1,866.2 2,163.6 2,468.1 2,772.5 3,004.4
EBITDA 1,205.0 1,441.3 1,683.3 1,962.1 2,175.9
Less: Depreciation & Amortization 729.7 846.0 925.5 1,005.0 1,051.5
EBIT 475.3 595.3 757.7 957.0 1,124.4
Less: Interest Expense 199.4 183.1 165.8 147.5 128.3
EBT 275.9 412.2 591.9 809.5 996.1
Less: Taxes @ 40% 110.4 164.9 236.8 323.8 398.4
Net Income 165.5 247.3 355.2 485.7 597.7

Un-Levered Free Cash Flow:

NOPAT 285.2 357.2 454.6 574.2 674.6
Plus: Depreciation & Amortization 729.7 846.0 925.5 1,005.0 1,051.5
Less: Changes in Working Capital 37.4 29.4 30.1 34.3 26.3
Less: Capital Expenditures 653.2 757.3 925.5 1,057.0 1,164.2
Un-Levered Free Cash Flow 324.3 416.5 424.5 487.9 535.7

Operating Margins:
Service Revenue Growth 14.0% 14.0% 12.5% 10.0% 7.0%
Equipment Sales/Service Revenue 7.5% 7.5% 7.5% 7.5% 7.5%
Total Revenue Growth 18.2% 15.9% 14.1% 12.3% 8.4%
Wireless Service Gross Profit Margin 80.0% 80.0% 80.0% 80.0% 80.0%
Equipment Sales Gross Profit -140.0% -140.0% -140.0% -140.0% -140.0%
Selling, General & Administrative 40.0% 40.0% 40.0% 40.0% 40.0%
EBITDA 25.8% 26.6% 27.3% 28.3% 29.0%
Depreciation & Amortization 15.6% 15.6% 15.0% 14.5% 14.0%
EBIT 10.2% 11.0% 12.3% 13.8% 15.0%
Effective Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%
Cap-x/Revenue 14.0% 14.0% 15.0% 15.3% 15.5%

AIRTHREAD CONNECTION ACQUISITION

Projected Balance Sheets

Assets: 2007 2008 2009 2010 2011 2012

Cash & Cash Equivalents 204.5 119.2 119.6 121.1 178.7 0.0
Marketable Securities 16.4 16.4 16.4 16.4 16.4 16.4
Accounts Receivable 435.5 540.0 626.1 714.2 802.3 869.4
Inventory 101.0 135.0 153.9 173.1 190.4 203.7
Prepaid Expenses 41.6 47.8 54.8 61.9 68.6 73.6
Deferred Taxes 18.6 18.6 18.6 18.6 18.6 18.6
Other Current Assets 16.2 16.2 16.2 16.2 16.2 16.2
Total Current Assets 833.8 893.1 1,005.5 1,121.5 1,291.1 1,197.9

Property, Plan & Equipment 2,595.1 2,518.6 2,429.9 2,429.9 2,481.8 2,594.5
Licenses 1,482.4 1,482.4 1,482.4 1,482.4 1,482.4 1,482.4
Customer Lists 15.4 15.4 15.4 15.4 15.4 15.4
Investments in Affiliated Entities 157.7 157.7 157.7 157.7 157.7 157.7
Long Term Note Receivable 4.4 4.4 4.4 4.4 4.4 4.4
Goodwill 491.3 491.3 491.3 491.3 491.3 491.3
Other Long Term Assets 31.8 31.8 31.8 31.8 31.8 31.8
Total Assets 5,611.9 5,594.7 5,618.4 5,734.4 5,956.0 5,975.4

Liabilities & Owners' Equity:

Accounts Payable 260.8 341.6 391.7 443.0 490.6 526.7
Deferred Revenue & Deposits 143.4 163.2 186.1 209.3 230.3 246.4
Accrued Liabilities 59.2 65.8 75.5 85.4 94.6 101.5
Taxes Payable 43.1 43.1 43.1 43.1 43.1 43.1
Other Current Liabilities 97.7 97.7 97.7 97.7 97.7 97.7
Total Current Liabilities 604.2 711.5 794.1 878.5 956.2 1,015.4

Long Term Debt 1,002.3 3,467.6 3,161 2,838 2,496 1,859

Deferred Tax Liability 554.4 554.4 554.4 554.4 554.4 554.4
Asset Retirement Obligation 126.8 126.8 126.8 126.8 126.8 126.8
Other Deferred Liabilities 84.5 84.5 84.5 84.5 84.5 84.5

Minority Interest 43.4 43.4 43.4 43.4 43.4 43.4

Total Equity 3,196.2 606.4 853.8 1,208.9 1,694.6 2,292.3

Total Liabilities & Owners' Equity 5,611.9 5,594.7 5,618.4 5,734.4 5,956.0 5,975.4
Cash Balance
Beginning Cash 204.5 119.2 119.6 121.1 178.7
Plus: Un-Levered Free Cash Flow 324.3 416.5 424.5 487.9 535.7
Less: After-Tax Interest Expense 119.7 109.8 99.5 88.5 77.0
Less: Principal Payments 289.9 306.3 323.6 341.8 2,496.0
Ending Cash 119.2 119.6 121.1 178.7 (1,858.6)
Projected Cash Flows
 Projected Cash Flows

Synergy Switches:
Bus. Revenue Synergy: 1
Include Synergy 1
Exclude Synergy 2

Reduction in Backhaul: 1
Include Synergy 1
Exclude Synergy 2
Projected Cash Flows

Based on projected cash

Changes in Working Ca
Accounts Receivable
Plus: Inventory
Plus: Prepaid Expenses
Less: Deferred Revenue
Less: Accounts Payable
Less: Accrued Liabilities
Net Working Capital
Increase in NWC
Based on projected cashflows including the benefits of Synergy
Changes in Working Capital: 2007 2008 2009 2010 2011 2012
Accounts Receivable 435.5 540.0 626.1 714.2 802.3 869.4
Plus: Inventory 101.0 135.0 153.9 173.1 190.4 203.7
Plus: Prepaid Expenses 41.6 47.8 54.8 61.9 68.6 73.6
Less: Deferred Revenue 143.4 163.2 186.1 209.3 230.3 246.4
Less: Accounts Payable 260.8 341.6 391.7 443.0 490.6 526.7
Less: Accrued Liabilities 59.2 65.8 75.5 85.4 94.6 101.5
Net Working Capital 114.6 152.1 181.4 211.5 245.9 272.2
Increase in NWC 0 37.4 29.4 30.1 34.3 26.3
AIRTHREAD ACQUISITION
Terminal Value With Lon-Term D/V of 29%

Un-Levered Free Cash Flows: 2008 2009 2010 2011 2012

NOPAT 285.2 357.2 454.6 574.2 674.6
Plus: Depreciation & Amortization 729.7 846.0 925.5 1,005.0 1,051.5
Less: Changes in Working Capital 37.4 29.4 30.1 34.3 26.3
Less: Capital Expenditures 653.2 757.3 925.5 1,057.0 1,164.2
Un-Levered Free Cash Flow 324.3 416.5 424.5 487.9 535.7
PV of FCF 8.29% 1,703.5 299.5 355.2 334.3 354.8 359.7

Interest Tax Shields 79.8 73.2 66.3 59.0 51.3

PV of Interest Tax Shields 284.8 75.6 65.8 56.5 47.6 39.3
Total Intermediate Term Value 1,988.2
Discount rate 8.01%
TV Growth Rate 3.4%
TV WACC Cash Flow 8,132.1 11,956.8

Value of Operating Assets 10,120.4

Value of Non-Operating Assets 1,187.3
Total Enterprise Value 11,307.7
Adjusted Present Value
Synergies Included
AIRTHREAD CONNECTIONS ACQUISITION

Project: AIRTHREAD CONNECTIONS ACQUISITION

Analysis: Synergies
AIRTHREAD CONNECTIONS ACQUISITION

Wireless Business Subscribers: 2008 2009 2010 2011 2012

Average Monthly Subscribers (in MM's) 0.30 0.50 0.70 1.00 1.20
Average Monthly Minutes 859 885 911 939 967
Total Monthly Minutes 258 442 638 939 1,160
Revenue Per Minute 0.0506 0.0506 0.0506 0.0506 0.0506
Annual Business Revenue Increase 156.5 268.6 387.3 569.9 704.5

Backhaul Savings: 2008 2009 2010 2011 2012

System Operating Expenses 838.9 956.3 1,075.8 1,183.4 1,266.3
Backhaul Percentage 20.0% 20.0% 20.0% 20.0% 20.0%
Estimated Backhaul Costs 167.8 191.3 215.2 236.7 253.3
Reduction in Backhaul Costs 0.0% 7.0% 12.0% 22.2% 30.0%
Backhaul Savings 0.0 13.4 25.8 52.5 76.0
Synergies
Synergies
AIRTHREAD ACQUISITION

Annual Amortization
Payment Interest Principal Balance Period
Date: 41 5.5% 3,758 120
1/31/2008 40.78 17.22 23.56 3,733.99 1
2/28/2008 40.78 17.11 23.67 3,710.32 2
3/31/2008 40.78 17.01 23.77 3,686.55 3
4/30/2008 40.78 16.90 23.88 3,662.67 4
5/31/2008 40.78 16.79 23.99 3,638.67 5
6/30/2008 40.78 16.68 24.10 3,614.57 6
 7/31/2008 40.78 16.57 24.21 3,590.36 7
8/31/2008 40.78 16.46 24.32 3,566.04 8
9/30/2008 40.78 16.34 24.43 3,541.60 9
10/31/2008 40.78 16.23 24.55 3,517.06 10
11/30/2008 40.78 16.12 24.66 3,492.40 11
12/31/2008 40.78 16.01 24.77 3,467.62 12
1/31/2009 40.78 15.89 24.89 3,442.74 13
2/28/2009 40.78 15.78 25.00 3,417.74 14
3/31/2009 40.78 15.66 25.11 3,392.62 15
4/30/2009 40.78 15.55 25.23 3,367.39 16
5/31/2009 40.78 15.43 25.35 3,342.05 17
6/30/2009 40.78 15.32 25.46 3,316.59 18
7/31/2009 40.78 15.20 25.58 3,291.01 19
8/31/2009 40.78 15.08 25.70 3,265.31 20
9/30/2009 40.78 14.97 25.81 3,239.50 21
10/31/2009 40.78 14.85 25.93 3,213.57 22
11/30/2009 40.78 14.73 26.05 3,187.52 23
12/31/2009 40.78 14.61 26.17 3,161.35 24
1/31/2010 40.78 14.49 26.29 3,135.06 25
2/28/2010 40.78 14.37 26.41 3,108.65 26
3/31/2010 40.78 14.25 26.53 3,082.12 27
4/30/2010 40.78 14.13 26.65 3,055.46 28
5/31/2010 40.78 14.00 26.78 3,028.69 29
6/30/2010 40.78 13.88 26.90 3,001.79 30
7/31/2010 40.78 13.76 27.02 2,974.77 31
8/31/2010 40.78 13.63 27.14 2,947.62 32
9/30/2010 40.78 13.51 27.27 2,920.36 33
10/31/2010 40.78 13.38 27.39 2,892.96 34
11/30/2010 40.78 13.26 27.52 2,865.44 35
12/31/2010 40.78 13.13 27.65 2,837.80 36
1/31/2011 40.78 13.01 27.77 2,810.02 37
2/28/2011 40.78 12.88 27.90 2,782.12 38
3/31/2011 40.78 12.75 28.03 2,754.09 39
4/30/2011 40.78 12.62 28.16 2,725.94 40
5/31/2011 40.78 12.49 28.29 2,697.65 41
 Annual
Payment Interest Principal Balance
Date: 41 5.50% 2,698
6/30/2011 40.78 12.36 28.41 2,669.24
7/31/2011 40.78 12.23 28.55 2,640.69
8/31/2011 40.78 12.10 28.68 2,612.02
9/30/2011 40.78 11.97 28.81 2,583.21
10/31/2011 40.78 11.84 28.94 2,554.27
11/30/2011 40.78 11.71 29.07 2,525.20
12/31/2011 40.78 11.57 29.21 2,495.99
1/31/2012 40.78 11.44 29.34 2,466.65
2/28/2012 40.78 11.31 29.47 2,437.18
3/31/2012 40.78 11.17 29.61 2,407.57
4/30/2012 40.78 11.03 29.74 2,377.83
5/31/2012 40.78 10.90 29.88 2,347.95
6/30/2012 40.78 10.76 30.02 2,317.93
7/31/2012 40.78 10.62 30.16 2,287.77
8/31/2012 40.78 10.49 30.29 2,257.48
9/30/2012 40.78 10.35 30.43 2,227.05
10/31/2012 40.78 10.21 30.57 2,196.47
11/30/2012 40.78 10.07 30.71 2,165.76
12/31/2012 2,175.69 9.93 2,165.76 0.00
 Amortization Schedule

Amortization
Period Interest Expense per Annum ($mn)
84 2008 2009 2010 2011 2012
42 199.43 183.08 165.80 147.55 128.27
43
44 Principal payment per Annum
45 289.92 306.28 323.55 341.80 2,495.99
46 After-Tax Interest Expense per Annum
47 119.7 109.8 99.5 88.5 77.0
48
49
50
51
52
53
54
55
56
57
58
59
60

Amortization Schedule
AIRTHREAD ACQUISITION

estmd from with synergy CF estmd from without synergy CF

Long-Term Growth Rate: 2012 2012
NOPAT 674.6 434.6
Invested Capital 4,107.5 4,039.5
ROC 16.4% 10.8%

Net Reinvestment 138.9 116.0

NOPAT 674.6 434.6
Reinvestment Rate 20.6% 26.7%
Est. EBIT Growth Rate 3.4% 2.9%
Growth Rate