Equity

Comparable Companies:Market Value

Universal Mobile
118,497
Neuberger Wireless
189,470
Agile Connections
21,079
Big Country Communicat
26,285
Rocky Mountain Wireles
7,360
Average

Debt/
Value
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
28.1%
35.0%
40.0%
45.0%
47.0%
50.0%

Debt/
Equity
0.0%
5.3%
11.1%
17.6%
25.0%
33.3%
39.1%
53.8%
66.7%
81.8%
88.7%
100.0%

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

Asset
Beta
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82

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

Asset
Beta
0.64
0.71
1.02
0.81
0.89
0.82

Equity Cost of
Beta Equity
0.82
8.33%
0.86
8.54%
0.91
8.78%
0.96
9.05%
1.02
9.35%
1.09
9.69%
1.13
9.92%
1.25 10.52%
1.36 11.05%
1.48 11.66%
1.54 11.94%
1.63 12.41%

Cost of
Debt
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%

WACC
8.33%
8.28%
8.23%
8.19%
8.14%
8.09%
8.06%
8.00%
7.95%
7.90%
7.88%
7.85%

Assumptions:
Marginal Tax Rate
Debt Beta

40.0%
0.00

Market Risk Premi

Risk-Free Rate

5.00%
4.25%

Cost of Debt

5.50%

Operating Results:
Service Revenue
Plus: Equipment Sales
Plus: Synergy Related Business Revenu
Total Revenue
Less: System Operating Expenses
Plus: Backhaul Synergy Savings
Less: Cost of Equipment Sold
Less: Selling, General & Administrative
EBITDA
Less: Depreciation & Amortization
EBIT

2008
4,194.3
314.8
0.0
4,509.1
838.9
0.0
755.5
1,803.6
1,111.1
705.2
405.9

2009
4,781.5
358.8
0.0
5,140.4
956.3
0.0
861.2
2,056.2
1,266.7
804.0
462.7

2010
5,379.2
403.7
0.0
5,782.9
1,075.8
0.0
968.9
2,313.2
1,425.0
867.4
557.6

2011
5,917.2
444.1
0.0
6,361.2
1,183.4
0.0
1,065.8
2,544.5
1,567.5
922.4
645.2

2012
6,331.4
475.2
0.0
6,806.5
1,266.3
0.0
1,140.4
2,722.6
1,677.3
952.9
724.4

Un-Levered Free Cash Flow:

NOPAT
Plus: Depreciation & Amortization
Less: Changes in Working Capital
Less: Capital Expenditures
Un-Levered Free Cash Flow

243.5
705.2
25.9
631.3
291.6

277.6
804.0
19.7
719.7
342.3

334.6
867.4
20.0
867.4
314.5

387.1
922.4
18.0
970.1
321.4

434.6
952.9
13.9
1,055.0
318.6

PV Intermediate FC

269.2

291.7

247.4

233.4

213.6

8.33% 1,255.3

Pre-Synergy Est. 2007 EBITD

Interest Coverage Ratio
Maximum Interest Expense
Interest Rate
Est. Debt Capacity

AirThread Debt Capacity:

1,033
Total Borrowing
5.00x
Amortization Period
207
Payments Per Year
5.50%
Monthly Payment
3,758

3,758
10 Years
12
41

Interest Tax Shields:

Interest Expense
Tax Rate
Tax Shield
Interest Rate
5.50%
PV of Intermediate Tax Shield

284.8

2008
199.4
40.0%
79.8

2009
183.1
40.0%
73.2

2010
165.8
40.0%
66.3

2011
147.5
40.0%
59.0

2012
128.3
40.0%
51.3

75.6

65.8

56.5

47.6

39.3

#REF!

Un-Levered Free Cash Flows:

NOPAT
Plus: Depreciation & Amortization
Less: Changes in Working Capital
Less: Capital Expenditures
Un-Levered Free Cash Flow

2008
243.5
705.2
25.9
631.3
291.6

2009
277.6
804.0
19.7
719.7
342.3

2010
334.6
867.4
20.0
867.4
314.5

2011
387.1
922.4
18.0
970.1
321.4

2012
434.6
952.9
13.9
1,055.0
318.6

PV of FC

1,255.3

269.2

291.7

247.4

233.4

213.6

Interest Tax Shields

PV of Interest Tax Shields
284.8
Total Intermediate Term Value 1,540.1

79.8
75.6

73.2
65.8

66.3
56.5

59.0
47.6

51.3
39.3

8.33%

TV Growth Rate
2.9%
TV WACC Cash Flow
4,286.7
Value of Operating Assets
5,826.8
Value of Non-Operating Asset 1,718.6
Total Enterprise Value
7,545.4

6,316.3

Operating Results:
Service Revenue
Plus: Equipment Sales
Plus: Synergy Related Business Revenu
Total Revenue
Less: System Operating Expenses
Plus: Backhaul Synergy Savings
Less: Cost of Equipment Sold
Less: Selling, General & Administrative
EBITDA
Less: Depreciation & Amortization
EBIT
Less: Interest Expense
EBT
Less: Taxes
Net Income
Un-Levered Free Cash Flow:
NOPAT
Plus: Depreciation & Amortization
Less: Changes in Working Capital
Less: Capital Expenditures
Un-Levered Free Cash Flow

2008
4,194.3
314.8
156.5
4,665.6
838.9
0.0
755.5
1,866.2
1,205.0
729.7
475.3
199.4
275.9
110.4
165.5

2009
4,781.5
358.8
268.6
5,409.0
956.3
(13.4)
861.2
2,163.6
1,441.3
846.0
595.3
183.1
412.2
164.9
247.3

2010
5,379.2
403.7
387.3
6,170.3
1,075.8
(25.8)
968.9
2,468.1
1,683.3
925.5
757.7
165.8
591.9
236.8
355.2

2011
5,917.2
444.1
569.9
6,931.2
1,183.4
(52.5)
1,065.8
2,772.5
1,962.1
1,005.0
957.0
147.5
809.5
323.8
485.7

2012
6,331.4
475.2
704.5
7,511.0
1,266.3
(76.0)
1,140.4
3,004.4
2,175.9
1,051.5
1,124.4
128.3
996.1
398.4
597.7

285.2
729.7
66.0
653.2
295.7

357.2
846.0
32.7
757.3
413.2

454.6
925.5
33.3
925.5
421.3

574.2
1,005.0
36.9
1,057.0
485.4

674.6
1,051.5
28.5
1,164.2
533.5

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%

Assets:
Cash & Cash Equivalents
Marketable Securities

2007
204.5
16.4

2008
90.7
16.4

2009
87.8
16.4

2010
86.0
16.4

2011
141.1
16.4

2012
0.0
16.4

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

1
2

Reduction in Backhaul:
Include Synergy
Exclude Synergy

1
2

Accounts Receivable
Inventory
Prepaid Expenses
Deferred Taxes
Other Current Assets
Total Current Assets
Property, Plan & Equipment
Licenses
Customer Lists
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
Other Current Liabilities
Total Current Liabilities
Long Term Debt
Deferred Tax Liability
Asset Retirement Obligation
Other Deferred Liabilities
Minority Interest
Total Equity
Total Liabilities & Owners' Equity
Beginning Cash
Plus: Un-Levered Free Cash Flow
Less: After-Tax Interest Expense
Less: Principal Payments
Ending Cash

435.5
101.0
41.6
18.6
16.2
833.8

540.0
135.0
47.8
18.6
16.2
864.6

626.1
153.9
54.9
18.6
16.2
973.8

714.2
173.1
62.3
18.6
16.2
1,086.8

802.3
190.4
69.3
18.6
16.2
1,254.2

869.4
203.7
74.7
18.6
16.2
1,198.9

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

2,518.6
1,482.4
15.4
157.7
4.4
491.3
31.8
5,566.2

2,429.9
1,482.4
15.4
157.7
4.4
491.3
31.8
5,586.7

2,429.9
1,482.4
15.4
157.7
4.4
491.3
31.8
5,699.6

2,481.8
1,482.4
15.4
157.7
4.4
491.3
31.8
5,919.1

2,594.5
1,482.4
15.4
157.7
4.4
491.3
31.8
5,976.5

260.8
143.4
59.2
43.1
97.7
604.2

342
134.7
65.8
43.1
97.7
682.9

392
154.4
75.5
43.1
97.7
762.4

443
174.6
85.4
43.1
97.7
843.7

491
193.4
94.6
43.1
97.7
919.3

527
207.6
101.5
43.1
97.7
976.6

1,002.3
554.4
126.8
84.5

3,467.6
554.4
126.8
84.5

3,161
554.4
126.8
84.5

2,838
554.4
126.8
84.5

2,496
554.4
126.8
84.5

1,898
554.4
126.8
84.5

43.4

43.4

43.4

43.4

43.4

43.4

3,196.2
5,611.9

606.4
5,566.2

853.8
5,586.7

1,208.9
5,699.6

1,694.6
5,919.1

2,292.3
5,976.5

204.5
295.7
119.7
289.9
90.7

90.7
413.2
109.8
306.3
87.8

87.8
421.3
99.5
323.6
86.0

86.0
141.1
485.4
533.5
88.5
77.0
341.8 2,496.0
141.1 (1,898.4)

Changes in Working Capital:

Accounts Receivable
Plus: Inventory

2007
435.5
101.0

2008
540.0
135.0

2009
626.1
153.9

2010
714.2
173.1

2011
802.3
190.4

2012
869.4
203.7

Plus: Prepaid Expenses

Less: Deferred Revenue
Less: Accounts Payable
Less: Accrued Liabilities
Net Working Capital

Changes in Working Capital:

Accounts Receivable
Plus: Inventory
Plus: Prepaid Expenses
Less: Deferred Revenue
Less: Accounts Payable
Less: Accrued Liabilities

41.6
143.4
260.8
59.2
114.6

2007

47.8
134.7
341.6
65.8
180.6

54.9
154.4
391.7
75.5
213.3

62.3
174.6
443.0
85.4
246.6

69.3
193.4
490.6
94.6
283.5

74.7
207.6
526.7
101.5
312.0

66.0

32.7

33.3

36.9

28.5

2008
41.67
154.36
1.38%
14.01
35.54
6.85

2009
41.67
154.36
1.38%
14.01
35.54
6.85

2010
41.67
154.36
1.38%
14.01
35.54
6.85

2011
41.67
154.36
1.38%
14.01
35.54
6.85

2012
41.67
154.36
1.38%
14.01
35.54
6.85

Un-Levered Free Cash Flows:

NOPAT
Plus: Depreciation & Amortization
Less: Changes in Working Capital
Less: Capital Expenditures
Un-Levered Free Cash Flow

2008
285.2
729.7
66.0
653.2
295.7

2009
357.2
846.0
32.7
757.3
413.2

2010
454.6
925.5
33.3
925.5
421.3

2011
574.2
1,005.0
36.9
1,057.0
485.4

2012
674.6
1,051.5
28.5
1,164.2
533.5

PV of FC

1,666.6

273.0

352.1

331.4

352.5

357.6

Interest Tax Shields

PV of Interest Tax Shields
284.8
Total Intermediate Term Value 1,951.4

79.8
75.6

73.2
65.8

66.3
56.5

59.0
47.6

51.3
39.3

8.33%

TV Growth Rate
3.4%
TV WACC Cash Flow
8,038.9
Value of Operating Assets
9,990.3
Value of Non-Operating Asset 1,718.6
Total Enterprise Value
11,708.9

###

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

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

2009
2010
2011
2012
956.3 1,075.8 1,183.4 1,266.3
20.0%
20.0%
20.0%
20.0%
191.3
215.2
236.7
253.3
7.0%
12.0%
22.2%
30.0%
13.4
25.8
52.5
76.0

#REF!

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
###
###
###
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
###
###
###
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
###
###
###
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
Amortization
Interest Principal Balance
Period
5.50%
3,758
120
17
24
3,734
1
17
24
3,710
2
17
24
3,687
3
17
24
3,663
4
17
24
3,639
5
17
24
3,615
6
17
24
3,590
7
16
24
3,566
8
16
24
3,542
9
16
25
3,517
10
16
25
3,492
11
16
25
3,468
12
16
25
3,443
13
16
25
3,418
14
16
25
3,393
15
16
25
3,367
16
15
25
3,342
17
15
25
3,317
18
15
26
3,291
19
15
26
3,265
20
15
26
3,239
21
15
26
3,214
22
15
26
3,188
23
15
26
3,161
24
14
26
3,135
25
14
26
3,109
26
14
27
3,082
27
14
27
3,055
28
14
27
3,029
29
14
27
3,002
30
14
27
2,975
31
14
27
2,948
32
14
27
2,920
33
13
27
2,893
34
13
28
2,865
35
13
28
2,838
36
13
28
2,810
37
13
28
2,782
38
13
28
2,754
39
13
28
2,726
40
12
28
2,698
41

Date:
6/30/2011
7/31/2011
8/31/2011
9/30/2011
###
###
###
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
###
###
###

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

Annual
Amortization
Interest Principal Balance
Period
5.50%
2,698
84
12
28
2,669
42
12
29
2,641
43
12
29
2,612
44
12
29
2,583
45
12
29
2,554
46
12
29
2,525
47
12
29
2,496
48
11
29
2,467
49
11
29
2,437
50
11
30
2,408
51
11
30
2,378
52
11
30
2,348
53
11
30
2,318
54
11
30
2,288
55
10
30
2,257
56
10
30
2,227
57
10
31
2,196
58
10
31
2,166
59
10
2,166
0
60

#REF!

Long-Term Growth Rate:

NOPAT
Invested Capital
ROC
Net Reinvestment
NOPAT
Reinvestment Rate
Est. EBIT Growth Rate

2012
674.6
4,147.3
16.3%
141.1
674.6
20.9%
3.4%

#REF!