Comparables companies

Universal Mobiles
Neubeuger Wireless
Agile Connections
Big Country Communications
Rocky Mountain Wireless
Average
Assumptions
Marginal tax rate
Debt Beta
BBB+ bonds
Risk Free Rate
Equity Market Risk Premium
EBITDA Interest Coverage Ratio
Debt to Value Ratio
Long -term growth rate

Debt/Value
0%
5%
10%
15%
20%
21%
22%
23%
24%
25%
26%
27%
28%
28.1%
28.2%
28.3%
28.4%
28.5%
28.6%
29%
30%
35%
40%
45%
50%

Debt/Equity Asset Beta

0%
5.3%
11.1%
17.6%
25.0%
26.6%
28.2%
29.9%
31.6%
33.3%
35.1%
37.0%
38.9%
39.1%
39.3%
39.5%
39.7%
39.9%
40.1%
40.8%
42.9%
53.8%
66.7%
81.8%
100.0%

0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82

Equity
Net Debt
Market Value
118497
69130
189470
79351
21079
5080
26285
8335
7360
3268
72538
33033

40%
0
5.5%
4.25%
5%
5.0x
< 50%
2.9%

Equity Beta
0.82
0.86
0.91
0.96
1.02
1.032
1.046
1.059
1.073
1.087
1.102
1.117
1.133
1.1343
1.1359
1.1375
1.1391
1.1406
1.1422
1.1487
1.17
1.25
1.36
1.48
1.63

Cost of
Equity
8.33%
8.54%
8.78%
9.05%
9.35%
9.412%
9.478%
9.546%
9.616%
9.687%
9.761%
9.836%
9.914%
9.9215%
9.9294%
9.9373%
9.9453%
9.9532%
9.9612%
9.99%
10.08%
10.52%
11.05%
11.66%
12.41%

P/E Ratio

Debt/Value

15.91
38.29
16.04
5.17
20.84
19.09

36.8%
29.5%
19.4%
24.1%
30.7%
28.1%

Debt/Equity Equity Beta

58.3%
41.9%
24.1%
31.7%
44.4%
40.1%

0.86
0.89
1.17
0.97
1.13
1.00

Equity Beta = Asset Beta (Ve+Vd/Ve)

Equity Beta = Asset Beta*(1/(1-(Vd/Ve)))
Asset Beta = Equity Beta* (1/(1+(Vd/Ve)(1-t)))

Asset
Revenue
Beta
0.64
43882
0.71
42684
1.02
34698
0.81
38896
0.89
4064
0.81556
32845
Relevering Equity Beta on
constant capital structure
asumption
<-- Hamada Equation
(see notes unlevered betas)

ACC has predetermined debt schedule, therefore we can

assume that Debt Beta is 0, also Hamada equation is the
right on to unlever Equity Beta or relever Asset Beta

Cost of Debt

WACC

5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%

8.33%
8.28%
8.23%
8.19%
8.14%
8.128%
8.119%
8.109%
8.100%
8.090%
8.081%
8.071%
8.062%
8.0609%
8.0599%
8.0590%
8.0580%
8.0571%
8.0561%
8.05%
8.04%
8.00%
7.95%
7.90%
7.85%

Pre-tax
WACC
8.33%
8.39%
8.45%
8.52%
8.58%
8.590%
8.603%
8.615%
8.628%
8.640%
8.653%
8.665%
8.678%
8.6791%
8.6803%
8.6816%
8.6828%
8.6841%
8.6853%
8.69%
8.70%
8.77%
8.83%
8.89%
8.95%

P/E (E only) (Net Income)

P/E (E+D) (Net Income)
P/E (E+D) (EBITDA)
P/E (E+D) (EBIT)

EBIT

EBITDA

11795
7020
1631
6702
510
5532

16949
14099
9914
12614
1028
10921

ing Equity Beta on

nt capital structure
asumption
amada Equation
tes unlevered betas)

only) (Net Income)

+D) (Net Income)
(E+D) (EBITDA)
E (E+D) (EBIT)

31.56
45.94
9.67
19.09

Net
Income
3794
4103
-30
3384
240
2298

Enterprise
Value
187853
268986
26186
34585
10645
117554

EV/EBITDA

EV/EBIT

11.08
19.08
2.64
2.74
10.36
10.76

15.93
38.32
16.05
5.16
20.87
21.25

EV/Net
Income
49.51
65.56
10.22
44.35
51.15

Revenue Pro
Applying APV methodology

2005

2006

2007

2008

Revenue
Service Revenue
Equipement Revenue
Total Revenue

2827
203.7
3030.7

3214.4
258.7
3473.1

3679.2
267
3946.2

4194.3
314.8
4509.1

604.1
511.9
1217.7
2333.7
697
490.1
206.9
40%
124.14
490.1
122.8

639.7
568.9
1399.6
2608.2
864.9
555.5
309.4
40%
185.64
555.5
-1.8

717.1
640.2
1555.6
2912.9
1033.3
582.3
451
40%
270.6
582.3
229.6

838.9
0
755.5
1803.6
3398
1111.1
705.2
405.9
40%
243.5
705.2
25.9
631.3
291.5
269.1

Operating expenses
System Operating expenses
Backhaul Synergy Savings
COGS
SG&A
Total Expenses
EBITDA
Depreciation & Amortization
EBIT
Tax Rates
NOPAT
Depreciation & Amortization
Change in Working Capital
CAPEX
Unlevered FCF
PV Intermediate Cash Flow

8.33%

1255.2

EBITDA margin
EBIT margin
NOPAT margin

24.64%
9.00%
5.40%

Revenue Projections
2009

2010

2011

2012

4781.5
358.8
5140.3

5379.2
403.7
5782.9

5917.2
444.1
6361.3

6331.4
475.2
6806.6

956.3
0
861.2
2056.2
3873.7
1266.6
804
462.6
40%
277.6
804
19.7
719.7
342.2
291.6

1075.8
0
968.9
2313.2
4357.9
1425
867.4
557.6
40%
334.6
867.4
20
867.4
314.6
247.4

1183.4
0
1065.8
2544.5
4793.7
1567.6
922.4
645.2
40%
387.1
922.4
18
970.1
321.4
233.4

1266.3
0
1140.4
2722.6
5129.3
1677.3
952.9
724.4
40%
434.6
952.9
13.9
1055
318.6
213.6

24.64%
9.00%
5.40%

24.64%
9.64%
5.79%

24.64%
10.14%
6.09%

24.64%
10.64%
6.39%

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
6/30/2011
7/31/2011
8/31/2011
9/30/2011

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
41
41
41
41

Annual
Interest
5.5%
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
12
12
12
12

Principal Balance
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
28
29
29
29

3,758
3,734
3,711
3,687
3,663
3,639
3,615
3,591
3,567
3,542
3,518
3,493
3,468
3,443
3,418
3,393
3,368
3,343
3,317
3,291
3,266
3,240
3,214
3,188
3,162
3,136
3,109
3,083
3,056
3,029
3,002
2,975
2,948
2,921
2,893
2,866
2,838
2,811
2,783
2,755
2,726
2,698
2,670
2,641
2,613
2,584

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

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

12
12
12
11
11
11
11
11
11
11
10
10
10
10
10

29
29
29
29
29
30
30
30
30
30
30
30
31
31
2,166

2,555
2,526
2,497
2,467
2,438
2,408
2,378
2,348
2,318
2,288
2,258
2,228
2,197
2,166
0

Amortization
Period
120
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45

From Exhibit 6 of the case study

Interest Tax Shield Calculation

2008

Interest Expense
Tax Rate
Tax Shield

199.5
40%
79.8

46
47
48
49
50
51
52
53
54
55
56
57
58
59
60

study

2009

2010

2011

2012

183.1
40%
73.2

165.8
40%
66.3

147.6
40%
59.0

128.3
40%
51.3

Revenue Proje
Applying APV methodology
Revenue
Service Revenue
Equipement Revenue
Total Revenue
Operating expenses
System Operating expenses
Backhaul Synergy Savings
COGS
SG&A
Total Expenses
EBITDA
Depreciation & Amortization
EBIT
Tax Rates
NOPAT
Depreciation & Amortization
Change in Working Capital
CAPEX
Unlevered FCF
PV Intermediate Cash Flow
Interest Tax shield
PV Interest Tax Shield
Intermediate Terminal Value

2005

2006

2007

2008

2009

2827
203.7
3030.7

3214.4
258.7
3473.1

3679.2
267
3946.2

4194.3
314.8
4509.1

4781.5
358.8
5140.3

604.1
511.9
1217.7
2333.7
697
490.1
206.9
40%
124.14
490.1
122.8

639.7
568.9
1399.6
2608.2
864.9
555.5
309.4
40%
185.64
555.5
-1.8

717.1
640.2
1555.6
2912.9
1033.3
582.3
451
40%
270.6
582.3
229.6

838.9
0
755.5
1803.6
3398
1111.1
705.2
405.9
40%
243.5
705.2
25.9
631.3
291.5
269.1

956.3
0
861.2
2056.2
3873.7
1266.6
804
462.6
40%
277.6
804.0
19.7
719.7
342.2
291.6

79.8
75.6

73.2
65.8

8.33%

5.5%

1255.2

284.8
1540.0

Revenue Projections
2010

2011

2012

5379.2
403.7
5782.9

5917.2
444.1
6361.3

6331.4
475.2
6806.6

1075.8
0
968.9
2313.2
4357.9
1425
867.4
557.6
40%
334.6
867.4
20.0
867.4
314.6
247.4

1183.4
0
1065.8
2544.5
4793.7
1567.6
922.4
645.2
40%
387.1
922.4
18.0
970.1
321.4
233.4

1266.3
0
1140.4
2722.6
5129.3
1677.3
952.9
724.4
40%
434.6
952.9
13.9
1055.0
318.6
213.6

66.3
56.5

59.0
47.7

51.3
39.3

Revenue Pro

Revenue
Service Revenue
Equipement Revenue
Total Revenue
Operating expenses
System Operating expenses
Backhaul Synergy Savings
COGS
SG&A
Total Expenses
EBITDA
Depreciation & Amortization
EBIT
Tax Rates
NOPAT
Depreciation & Amortization
Change in Working Capital
CAPEX
Unlevered Free Cash Flow
PV Intermediate Cash Flow
Interest Tax shield
PV Interest Tax Shield
Intermediate Terminal Value
Terminal Value Growth Rate
Total Terminal Value

2005

2006

2007

2008

2827
203.7
3030.7

3214.4
258.7
3473.1

3679.2
267
3946.2

4194.3
314.8
4509.1

604.1
511.9
1217.7
2333.7
697
490.1
206.9
40%
124.14
490.1
122.8

639.7
568.9
1399.6
2608.2
864.9
555.5
309.4
40%
185.64
555.5
-1.8

717.1
640.2
1555.6
2912.9
1033.3
582.3
451
40%
270.6
582.3
229.6

838.9
0
755.5
1803.6
3398
1111.1
705.2
405.9
40%
243.5
705.2
25.9
631.3
291.5
269.1

8.33%
WACC
5.5%

2.9%
8.056%
WACC

Value of Operating Assets

Equity in earnings of Affiliates
Value of Non-Operating Assets
Total Entreprise Value

EV/EBITDA
EV/EBIT
EV/Net Income

2007
7.33
16.78
24.07

EBITDA 3-year average

EBIT 3-year average

1255.2

284.8
1540.0

4311.73
5851.72
90
1717.66
7569.37

3-year average
8.75
23.47
34.96

865
322.5

79.8
75.6

given in exhibit 4

Net Income 3-year average

216.5

Revenue Projections
2009

2010

2011

2012

4781.5
358.8
5140.3

5379.2
403.7
5782.9

5917.2
444.1
6361.3

6331.4
475.2
6806.6

956.3
0
861.2
2056.2
3873.7
1266.6
804
462.6
40%
277.6
804
19.7
719.7
342.2
291.6

1075.8
0
968.9
2313.2
4357.9
1425
867.4
557.6
40%
334.6
867.4
20
867.4
314.6
247.4

1183.4
0
1065.8
2544.5
4793.7
1567.6
922.4
645.2
40%
387.1
922.4
18
970.1
321.4
233.4

1266.3
0
1140.4
2722.6
5129.3
1677.3
952.9
724.4
40%
434.6
952.9
13.9
1055
318.6
213.6

73.2
65.8

66.3
56.5

59.0
47.7

51.3
39.3

6353.22

given in exhibit 4