AIRTHREAD ACQUISITION Operating Assumptions

Revenue Projections: 2008 2009 2010 2011 2012

Service Revenue 4,194.3 4,781.5 5,379.2 5,917.2 6,331.4
Service Revenue Growth 14.0% 14.0% 12.5% 10.0% 7.0%

Equipment Revenue 314.8 358.8 403.7 444.1 475.2

Equipment Revenue/Service Revenue (1) 7.5% 7.5% 7.5% 7.5% 7.5%

Operating Expenses:
System Operating Expenses 838.9 956.3 1,075.8 1,183.4 1,266.3
System Operating Exp./Service Revenue 20.0% 20.0% 20.0% 20.0% 20.0%

Cost of Equipment Sold 755.5 861.2 968.9 1,065.8 1,140.4

Equipment COGS 240.0% 240.0% 240.0% 240.0% 240.0%

Selling, General & Administrative 1,803.6 2,056.2 2,313.2 2,544.5 2,722.6

SG&A/Total Revenue 40.0% 40.0% 40.0% 40.0% 40.0%

Depreciation & Amortization 705.2 804.0 867.4 922.4 952.9

Tax Rate 40.0% 40.0% 40.0% 40.0% 40.0%

Working Capital Assumptions (1):

Accounts Receivable 41.67x 41.67x 41.67x 41.67x 41.67x
Days Sales Equip. Rev. 154.36x 154.36x 154.36x 154.36x 154.36x
Prepaid Expenses 1.38% 1.38% 1.38% 1.38% 1.38%
Accounts Payable 35.54x 35.54x 35.54x 35.54x 35.54x
Deferred Serv. Revenue 14.01x 14.01x 14.01x 14.01x 14.01x
Accrued Liabilities 6.85x 6.85x 6.85x 6.85x 6.85x

Capital Expenditures (2):

Capital Expenditures 631.3 719.7 867.4 970.1 1,055.0
Cap-x/Total Revenue 14.0% 14.0% 15.0% 15.3% 15.5%

2,007
Accounts Receivable ca 521.90 594.96 669.33 736.26 787.80 435.50
Days Sales Equip. Rev. ca 134.97 153.86 173.10 190.41 203.73 101.00
Prepaid Expenses ca 46.91 53.48 60.17 66.19 70.82 41.60
Accounts Payable cl 335.42 382.38 430.18 473.20 506.32 260.80
Deferred Serv. Revenue cl 132.26 150.77 169.62 186.58 199.64 143.40
Accrued Liabilities cl 64.61 73.65 82.86 91.15 97.53 59.20
NWC 171.49 195.50 219.94 241.93 258.86 114.70
56.8 24.01 24.44 21.99 16.94

(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.

Harvard Business Publishing

ting Assumptions
d Business Publishing
 Licensing Agreemts

Total Consolidated Markets:

Region Population CustomersPenetration
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 CustomersPenetration
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%

Harvard Business Publishing

AIRTHREAD ACQUISITION Customer Operating Data

Customer Data: 2005 2006 2007

Net Customer Additions 301 310 477
Cost Per Customer Addition 372 385 487
Cost of New Customer Additions 111,972 119,350 232,299

Cost of Equipment Sold/Equipment Reven 251.3% 219.9% 239.8%

Monthly Churn Rate 2.1% 2.1% 1.7%

Revenue Per Minute 2005 2006 2007

Monthly ARPU 45.24 47.23 51.13
Customer Minutes Per Month 625 704 859
Revenue Per Minute 0.0724 0.0671 0.0595
AIRTHREAD ACQUISITION Statement
Historical Operating Results

Operating Results: 2005 2006 2007

Service Revenue 2,827.0 3,214.4 3,679.2
Plus: Equipment Sales 203.7 258.7 267.0
Total Revenue 3,030.8 3,473.2 3,946.3
Less: System Operating Expenses 604.1 639.7 717.1
Less: Cost of Equipment Sold 511.9 568.9 640.2
Less: Selling, General & Administrative 1,217.7 1,399.6 1,555.6
EBITDA 697.0 865.0 1,033.3
Less: Depreciation & Amortization 490.1 555.5 582.3
EBIT 206.9 309.5 451.1
Less: Interest Expense 84.9 93.7 84.7
Plus: Equity in Earnings of Affiliates 66.7 93.1 90.0
Plus: Gains (Losses) on Investments 18.1 50.8 83.1
Plus: Other Income 54.5 (46.6) 7.0
EBT 261.3 313.1 546.5
Less: Taxes 95.9 120.6 216.7
Income Before Minority Interest 165.5 192.5 329.8
Less: Minority Interest 10.5 13.0 15.1
Net Income 155.0 179.5 314.7
AIRTHREAD ACQUISITION Balance Sheet

Assets: 2005 2006 2007

Cash & Cash Equivalents 29.0 32.9 204.5
Marketable Securities 0.0 249.0 16.4
Accounts Receivable 362.4 407.4 435.5
Inventory 92.7 117.2 101.0
Prepaid Expenses 32.1 35.0 41.6
Deferred Taxes 8.2 0.0 18.6
Other Current Assets 15.5 13.4 16.2
Total Current Assets 539.9 854.9 833.8

Property, Plan & Equipment 2,553.0 2,628.8 2,595.1

Licenses 1,362.3 1,494.3 1,482.4
Customer Lists 47.6 26.2 15.4
Marketable Equity Securities 225.4 4.9 0.0
Investments in Affiliated Entities 172.1 150.3 157.7
Long Term Note Receivable 4.7 4.5 4.4
Goodwill 481.2 485.5 491.3
Other Long Term Assets 30.0 31.1 31.8
Total Assets 5,416.2 5,680.6 5,611.9

Liabilities & Owners' Equity:

Accounts Payable 254.1 254.9 260.8
Deferred Revenue & Deposits 111.4 123.3 143.4
Accrued Liabilities 42.9 47.8 59.2
Taxes Payable 36.7 26.9 43.1
Deferred Taxes 0.0 26.3 0.0
Note Payable 135.0 35.0 0.0
Forward Contract 0.0 159.9 0.0
Derivative Liability 0.0 88.8 0.0
Other Current Liabilities 82.6 93.7 97.7
Total Current Liabilities 662.7 856.7 604.2

Long Term Debt 1,001.4 1,001.8 1,002.3

Forward Contracts 159.9 0.0 0.0
Derivative Liability 25.8 0.0 0.0
Deferred Tax Liability 647.1 601.5 554.4
Asset Retirement Obligation 90.2 127.6 126.8
Other Deferred Liabilities 46.2 62.9 84.5

Minority Interest 41.9 36.7 43.4

Common Stock & Paid-In Capital 1,375.0 1,378.9 1,404.1

Retained Earnings 1,366.0 1,614.4 1,792.1
Total Liabilities & Owners' Equity 5,416.2 5,680.6 5,611.9
Harvard Business Publishing
AIRTHREAD ACQUISITION Amortization Schedule
Term Loan Amortization

Annual Amortization Annual Amortization

Payment Interest Principal Balance Period Payment Interest Principal Balance Period
Date: 41 5.50% 3,758 120 Date: 41 5.50% 2,698 84
1/31/2008 41 17 23.6 3,734 1 6/30/2011 41 12 28 2,669 42
2/28/2008 41 17 23.7 3,710 2 7/31/2011 41 12 29 2,641 43
3/31/2008 41 17 23.8 3,687 3 8/31/2011 41 12 29 2,612 44
4/30/2008 41 17 23.9 3,663 4 9/30/2011 41 12 29 2,583 45
5/31/2008 41 17 24.0 3,639 5 10/31/2011 41 12 29 2,554 46
6/30/2008 41 17 24.1 3,615 6 11/30/2011 41 12 29 2,525 47
7/31/2008 41 17 24.2 3,590 7 12/31/2011 41 12 29 2,496 48
8/31/2008 41 16 24.3 3,566 8 1/31/2012 41 11 29 2,467 49
9/30/2008 41 16 24.4 3,542 9 2/28/2012 41 11 29 2,437 50
10/31/2008 41 16 24.5 3,517 10 3/31/2012 41 11 30 2,408 51
11/30/2008 41 16 24.7 3,492 11 4/30/2012 41 11 30 2,378 52
12/31/2008 41 16 24.8 3,468 12 5/31/2012 41 11 30 2,348 53
1/31/2009 41 16 24.9 3,443 13 6/30/2012 41 11 30 2,318 54
2/28/2009 41 16 25.0 3,418 14 7/31/2012 41 11 30 2,288 55
3/31/2009 41 16 25.1 3,393 15 8/31/2012 41 10 30 2,257 56
4/30/2009 41 16 25.2 3,367 16 9/30/2012 41 10 30 2,227 57
5/31/2009 41 15 25.3 3,342 17 10/31/2012 41 10 31 2,196 58
6/30/2009 41 15 25.5 3,317 18 11/30/2012 41 10 31 2,166 59
7/31/2009 41 15 25.6 3,291 19 12/31/2012 2,176 10 2,166 0 60
8/31/2009 41 15 25.7 3,265 20
9/30/2009 41 15 25.8 3,239 21
10/31/2009 41 15 25.9 3,214 22
11/30/2009 41 15 26.1 3,188 23
12/31/2009 41 15 26.2 3,161 24
1/31/2010 41 14 26.3 3,135 25
2/28/2010 41 14 26.4 3,109 26
3/31/2010 41 14 26.5 3,082 27
4/30/2010 41 14 26.7 3,055 28
5/31/2010 41 14 26.8 3,029 29
6/30/2010 41 14 26.9 3,002 30
7/31/2010 41 14 27.0 2,975 31
8/31/2010 41 14 27.1 2,948 32
9/30/2010 41 14 27.3 2,920 33
10/31/2010 41 13 27.4 2,893 34
11/30/2010 41 13 27.5 2,865 35
12/31/2010 41 13 27.6 2,838 36
1/31/2011 41 13 27.8 2,810 37
2/28/2011 41 13 27.9 2,782 38
3/31/2011 41 13 28.0 2,754 39
4/30/2011 41 13 28.2 2,726 40
5/31/2011 41 12 28.3 2,698 41
Harvard Business Publishing
on Schedule
ess Publishing
AIRTHREAD ACQUISITION Wireless Comparables

Equity Net Debt/ Debt/ Equity Net

Comparable Companies: Market Value Debt Value Equity Beta1 Revenue EBIT EBITDA Income
Universal Mobile 118,497 69,130 36.8% 58.3% 0.86 43,882 11,795 16,949 3,794
Neuberger Wireless 189,470 79,351 29.5% 41.9% 0.89 42,684 7,020 14,099 4,103
Agile Connections 21,079 5,080 19.4% 24.1% 1.17 34,698 1,631 9,914 (30)
Big Country Communications 26,285 8,335 24.1% 31.7% 0.97 38,896 6,702 12,614 3,384
Rocky Mountain Wireless 7,360 3,268 30.7% 44.4% 1.13 4,064 510 1,028 240
Average 28.1% 40.1% 1.00

1) Equity betas were estimated on a weekly based on weekly stock returns over a three year period.
Note: The current industry and competitor leverage ratios reflect the historical averages that existed over the past three years.

Harvard Business Publishing

ss Comparables

Business Publishing
AIRTHREAD ACQUISITION
Historical Operating Results

Operating Results: 2005 2006 2007 2008 2009 2010

Service Revenue 2,827.0 3,214.4 3,679.2 4,194.3 4,781.5 5,379.2
Plus: Equipment Sales 203.7 258.7 267.0 314.8 359 404
Total Revenue 3,030.8 3,473.2 3,946.3 4,509.1 5,140.4 5,782.9
Less: System Operating Expenses 604.1 639.7 717.1 839 956 1,076
Less: Cost of Equipment Sold 511.9 568.9 640.2 755 861 969
Less: Selling, General & Administrative 1,217.7 1,399.6 1,555.6 1,804 2,056 2,313
EBITDA 697.0 865.0 1,033.3 1,111.1 1,266.7 1,425.0
Less: Depreciation & Amortization 490.1 555.5 582.3 705 804 867
EBIT 206.9 309.5 451.1 405.9 462.7 557.6
Less: Interest Expense 84.9 93.7 84.7 199 183 166
Plus: Equity in Earnings of Affiliates 66.7 93.1 90.0 0 0 0
Plus: Gains (Losses) on Investments 18.1 50.8 83.1 0 0 0
Plus: Other Income 54.5 (46.6) 7.0 0 0 0
EBT 261.3 313.1 546.5 206.5 279.7 391.8
Less: Taxes@40% 40% 95.9 120.6 216.7 83 112 157
Income Before Minority Interest 165.5 192.5 329.8 123.9 167.8 235.1
Less: Minority Interest 10.5 13.0 15.1 0 0 0
Net Income 155.0 179.5 314.7 123.9 167.8 235.1

EBIAT 244 278 335

Add Depreciation 705 804 867
Subtract Delta NWC (57) (24) (24)
Subtract Capex (631) (720) (867)
FCFF 261 338 310
Terminal Value
261 338 310
APV Without synergies
All Equity value 4,694
Interest expense 199 183 166
ITS 80 73 66
PV of tax shields 266
Value of operating assets 4,960
Computation of Ka
Reinvestment rate (Net Capex+Delta NWC)/EBI
Value of non-operating assets Return on Investment EBIAT/(Total investment)
Growth Rate
Earning from affiliates 90 US Long term growth rate
P/E Multiple 19.095 ATC Growth rate
Value of affiliates 1,719 Ka
As long term growth rate cannont be more than economy growth rate
Total firm value 6,679
 Income Statement

2011 2012
5,917.2 6,331.4
444 475
6,361.2 6,806.5
1,183 1,266
1,066 1,140
2,544 2,723
1,567.5 1,677.3
922 953
645.2 724.4
148 128
0 0
0 0
0 0
497.6 596.1
199 238
298.6 357.7
0 0
298.6 357.7

387 435
922 953
(22) (17)
(970) (1,055)
317 316
5,164
317 5,479

148 128
59 51

utation of Ka
t Capex+Delta NWC)/EBI 27%
IAT/(Total investment) 10.52%
2.88%
2.30%
2.00%
8.23%
be more than economy growth rate

Harvard Business Publishing

AIRTHREAD ACQUISITION Balance Sheet
Assets: 2005 2006 2007 2008 2009 2010 2011 2012 2008 2009
Cash & Cash Equivalents 29.0 32.9 204.5 2,789.3 2,749.4 2,599.6 2,527.1 2,740.2 Interest 199 183
Marketable Securities 0.0 249.0 16.4 16.4 16.4 16.4 16.4 16.4 Post Tax Interest 119 110
Accounts Receivable 362.4 407.4 435.5 521.9 595.0 669.4 736.3 787.9 41.67x as Receivable ratio Principal 290 306
Inventory 92.7 117.2 101.0 156.5 137.0 193.1 170.1 218.6 Inventory calculation usnig historical data Unlevered FCF 261 338
Prepaid Expenses 32.1 35.0 41.6 46.9 53.5 60.1 66.2 70.8 1.38% of operating costs
Deferred Taxes 8.2 0.0 18.6 18.6 18.6 18.6 18.6 18.6
Other Current Assets 15.5 13.4 16.2 16.2 16.2 16.2 16.2 16.2
Total Current Assets 539.9 854.9 833.8 3,565.7 3,586.1 3,573.4 3,550.8 3,868.6
Asset Schedule 2008 2009
Property, Plan & Equipment 2,553.0 2,628.8 2,595.1 2,521.1 2,436.8 2,436.8 2,484.5 2,586.6 PPE Previous year + CapEx current year - Depreciation Capex 631 720
Licenses 1,362.3 1,494.3 1,482.4 1,482.4 1,482.4 1,482.4 1,482.4 1,482.4 Depr 705 804
Customer Lists 47.6 26.2 15.4 15.4 15.4 15.4 15.4 15.4
Marketable Equity Securities 225.4 4.9 0.0 0 0 0 0 0
Investments in Affiliated Entities 172.1 150.3 157.7 157.7 157.7 157.7 157.7 157.7
Long Term Note Receivable 4.7 4.5 4.4 4.4 4.4 4.4 4.4 4.4 Accounts Receivable ca
Goodwill 481.2 485.5 491.3 491.3 491.3 491.3 491.3 491.3 Days Sales Equip. Rev. ca
Other Long Term Assets 30.0 31.1 31.8 31.8 31.8 31.8 31.8 31.8 Prepaid Expenses ca
Total Assets 5,416.2 5,680.6 5,611.9 8,269.9 8,205.9 8,193.3 8,218.3 8,638.3 Accounts Payable cl
Deferred Serv. Revenue cl
Liabilities & Owners' Equity: 2005 2006 2007 2008 2009 2010 2011 2012 Accrued Liabilities cl
Accounts Payable 35.54 254.1 254.9 260.8 335.5 382.4 430.2 473.2 506.4 Per total operating costs NWC
Deferred Revenue & 14.00 111.4 123.3 143.4 132.1 150.6 169.5 186.4 199.5 Per total operating costs Change in NWC
Accrued Liabilities 6.85 42.9 47.8 59.2 64.7 73.7 82.9 91.2 97.6 Per total operating costs
Taxes Payable 36.7 26.9 43.1 43.1 43.1 43.1 43.1 43.1
Deferred Taxes 0.0 26.3 0.0 0 0 0 0 0 Inventory calculation
Note Payable 135.0 35.0 0.0 0 0 0 0 0 2005 2006
Forward Contract 0.0 159.9 0.0 0 0 0 0 0 COGS 511.9 568.9
Derivative Liability 0.0 88.8 0.0 0 0 0 0 0 Inventory 92.7 117.2
Other Current Liabilities 82.6 93.7 97.7 97.7 97.7 97.7 97.7 97.7 ITR 5.420
Total Current Liabilities 662.7 856.7 604.2 673.0 747.6 823.4 891.7 944.2

Net Working Capital 171.5 195.5 219.9 241.9 258.9

Delta NWC 56.9 24.0 24.4 22.0 16.9

Long Term Debt 1,001.4 1,001.8 1,002.3 3,468 3,161 2,838 2,496 2,506
Forward Contracts 159.9 0.0 0.0 0 0 0 0 0
Derivative Liability 25.8 0.0 0.0 0 0 0 0 0
Deferred Tax Liability 647.1 601.5 554.4 554 554 554 554 554
Asset Retirement Obligation 90.2 127.6 126.8 127 127 127 127 127
Other Deferred Liabilities 46.2 62.9 84.5 85 85 85 85 85

Minority Interest 41.9 36.7 43.4 43 43 43 43 43

Common Stock & Paid-In Capital 1,375.0 1,378.9 1,404.1 1,404 1,404 1,404 1,404 1,404
Retained Earnings 1,366.0 1,614.4 1,792.1 1,916 2,084 2,319 2,617 2,975
Total Liabilities & Owners' Equity 5,416.2 5,680.6 5,611.9 8,269.9 8,205.9 8,193.3 8,218.3 8,638.3
 2010 2011 2012
166 148 128
100 89 77
324 342 2,496
310 317 316

2010 2011 2012

867 970 1,055
867 922 953

2008 2009 2010 2011 2012

522 595 669 736 788
135 154 173 190 204
47 53 60 66 71
335 382 430 473 506
132 151 170 187 200
65 74 83 91 98
171 195 220 242 259
57 24 24 22 17

ory calculation
2007
640.2
101.0
5.869
 Equity Net Debt/ Debt/ Equity Net
Comparable Companies:
Market Value Debt Value Equity Beta Revenue EBIT EBITDA
1
Income
Universal Mobile 118,497 69,130 36.8% 58.3% 0.86 43,882 11,795 16,949 3,794
Neuberger Wireless 189,470 79,351 29.5% 41.9% 0.89 42,684 7,020 14,099 4,103
Agile Connections 21,079 5,080 19.4% 24.1% 1.17 34,698 1,631 9,914 (30)
Big Country Communication 26,285 8,335 24.1% 31.7% 0.97 38,896 6,702 12,614 3,384
Rocky Mountain Wireless 7,360 3,268 30.7% 44.4% 1.13 4,064 510 1,028 240
Average 26,285 8,335 28.1% 40.1% 1.00 38,896 6,702 12,614 3,384

1) Equity betas were estimated on a weekly based on weekly stock returns over a three year period.
Note: The current industry and competitor leverage ratios reflect the historical averages that existed over the past three years.

Calculation of WACC Estimation of Ke Estimation of Beta d

D/V 50.00% E/V 50.00% Avg. beta 0.80 Rd = Rf + Beta d (Rm-Rf)
Kd 5.50% Ke 10.97% Ka 8.23% Rm
Tax Rate 40.00% Ke 10.97% Rf
Rm-Rf
WACC 7.13% Rd-Rf
Beta d
Calculation of WACC (Long term ) Post Acquisition
D/V 28.12% E/V 71.88%
Kd 5.50% Ke 9.30%
Tax Rate 40.00%

Long term hurdle rate WACC 7.62%

 Beta of Asset

0.64 Assuming constant D/V case (Fin rule 2)

0.70 Assuming all firms have Kd = 5.5%
0.99
0.80
0.86
0.80

Estimation of Beta d
Rd = Rf + Beta d (Rm-Rf)
9.25%
4.25%
5.00%
1.25%
0.250
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 156 269 387 570 704
13,376
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%
0.0 13.4 25.8 52.5 76.0

Valuation of synergies 1,443

Firm value without acquisition 6,679

Firm value with synergies 10,538

Synergy value 3,859

AIRTHREAD ACQUISITION
Historical Operating Results

Operating Results: 2005 2006 2007 2008 2009

Service Revenue 2,827.0 3,214.4 3,679.2 4,194 4,782
Plus: Equipment Sales 203.7 258.7 267.0 314.8 358.8
Plus: Synergy related revenue 0.0 0.0 0.0 156.5 268.6
Total Revenue 3,030.8 3,473.2 3,946.3 4,665.6 5,409.0
Less: System Operating Expenses 604.1 639.7 717.1 839 956
Plus: Backhaul Synergy Savings 0.0 0.0 0.0 0 13
Less: Cost of Equipment Sold 511.9 568.9 640.2 755 861
Less: Selling, General & Administrative 1,217.7 1,399.6 1,555.6 1,866.2 2,163.6
EBITDA 697.0 865.0 1,033.3 1,205.0 1,441.3
Less: Depreciation & Amortization 490.1 555.5 582.3 705.2 804.0
EBIT 206.9 309.5 451.1 499.8 637.3
Less: Interest Expense 84.9 93.7 84.7 199 183
Plus: Equity in Earnings of Affiliates 66.7 93.1 90.0 0 0
Plus: Gains (Losses) on Investments 18.1 50.8 83.1 0 0
Plus: Other Income 54.5 (46.6) 7.0 0 0
EBT 261.3 313.1 546.5 300.8 454.3
Less: Taxes 95.9 120.6 216.7 120.3 181.7
Income Before Minority Interest 165.5 192.5 329.8 180.5 272.6
Less: Minority Interest 10.5 13.0 15.1 0 0
Net Income 155.0 179.5 314.7 180.5 272.6

EBIAT 300 382

Add Depreciation 705 804
Subtract Delta NWC (66) (29)
Subtract Capex (631) (720)
FCFF 308 438
Terminal Value
308 438
APV Without synergies
All Equity value 8,553

Interest expense 199 183

ITS 80 73
PV of tax shields 266
Value of operating assets 8,819

Value of non-operating assets

Earning from affiliates 90

P/E Multiple 19.095
Value of affiliates 1,719

Total firm value 10,538

 Income Statement

2010 2011 2012

5,379 5,917 6,331
403.7 444.1 475.2
387.3 569.9 704.5
6,170.3 6,931.2 7,511.0
1,076 1,183 1,266
26 53 76
969 1,066 1,140
2,468.1 2,772.5 3,004.4
1,683.3 1,962.1 2,175.9
867.4 922.4 952.9
815.8 1,039.7 1,223.0
166 148 128
0 0 0
0 0 0
0 0 0
649.8 891.7 1,095.0
259.9 356.7 438.0
389.9 535.0 657.0
0 0 0
389.9 535.0 657.0

489 624 734

867 922 953
(30) (29) (21) US Long term growth rate 2.30%
(867) (970) (1,055) ATC Growth rate 2.00%
460 547 610 Ka 8.23%
9,985
460 547 10,595 As long term growth rate cannont be more than economy growth rate

166 148 128

66 59 51

Harvard Business Publishing

AIRTHREAD ACQUISITION

Assets: 2005 2006 2007 2008 2009 2010

Cash & Cash Equivalents 29.0 32.9 204.5 2,760 2,767 2,787
Marketable Securities 0.0 249.0 16.4 16.4 16.4 16.4
Accounts Receivable 362.4 407.4 435.5 540 626 714
Inventory 92.7 117.2 101.0 135 154 173
Prepaid Expenses 32.1 35.0 41.6 47 53 60
Deferred Taxes 8.2 0.0 18.6 18.6 18.6 18.6
Other Current Assets 15.5 13.4 16.2 16.2 16.2 16.2
Total Current Assets 539.9 854.9 833.8 3,533.2 3,651.0 3,785.4

Property, Plan & Equipment 2,553.0 2,628.8 2,595.1 2,521 2,437 2,437
Licenses 1,362.3 1,494.3 1,482.4 1,482.4 1,482.4 1,482.4
Customer Lists 47.6 26.2 15.4 15.4 15.4 15.4
Marketable Equity Securities 225.4 4.9 0.0 0.0 0.0 0.0
Investments in Affiliated Entities 172.1 150.3 157.7 157.7 157.7 157.7
Long Term Note Receivable 4.7 4.5 4.4 4.4 4.4 4.4
Goodwill 481.2 485.5 491.3 491.3 491.3 491.3
Other Long Term Assets 30.0 31.1 31.8 31.8 31.8 31.8
Total Assets 5,416.2 5,680.6 5,611.9 8,237.4 8,270.9 8,405.3

Liabilities & Owners' Equity:

Accounts Payable 254.1 254.9 260.8 335 381 428
Deferred Revenue & Deposits 111.4 123.3 143.4 90 107 125
Accrued Liabilities 42.9 47.8 59.2 18 22 26
Taxes Payable 36.7 26.9 43.1 43.1 43.1 43.1
Deferred Taxes 0.0 26.3 0.0 0.0 0.0 0.0
Note Payable 135.0 35.0 0.0 0.0 0.0 0.0
Forward Contract 0.0 159.9 0.0 0.0 0.0 0.0
Derivative Liability 0.0 88.8 0.0 0.0 0.0 0.0
Other Current Liabilities 82.6 93.7 97.7 97.7 97.7 97.7
Total Current Liabilities 662.7 856.7 604.2 583.9 651.2 719.2

Long Term Debt 1,001.4 1,001.8 1,002.3 3,468 3,161 2,838

Forward Contracts 159.9 0.0 0.0 0.0 0.0 0.0
Derivative Liability 25.8 0.0 0.0 0.0 0.0 0.0
Deferred Tax Liability 647.1 601.5 554.4 554.4 554.4 554.4
Asset Retirement Obligation 90.2 127.6 126.8 126.8 126.8 126.8
Other Deferred Liabilities 46.2 62.9 84.5 84.5 84.5 84.5

Minority Interest 41.9 36.7 43.4 43.4 43.4 43.4

Common Stock & Paid-In Capital 1,375.0 1,378.9 1,404.1 1,404 1,404 1,404
Retained Earnings 1,366.0 1,614.4 1,792.1 1,972.5 2,245.1 2,635.0
Total Liabilities & Owners' Equity 5,416.2 5,680.6 5,611.9 8,237 8,271 8,405
 Balance Sheet

2011 2012
2,887 3,417
16.4 16.4
802 869
190 204
65 70
18.6 18.6
16.2 16.2
3,996.4 4,611.2
Working capital 2007 2008 2009 2010 2011 2012
2,485 2,587
1,482.4 1,482.4 Accounts Receivable 540 626 714 802 869
15.4 15.4 Inventory 135 154 173 190 204
0.0 0.0 Prepaid Expenses 48 55 63 70 76
157.7 157.7 723 835 950 1,063 1,149
4.4 4.4
491.3 491.3 Accounts Payable 342 394 448 501 542
31.8 31.8 Deferred Revenue & Deposits 135 155 177 198 214
8,664.0 9,380.9 Accrued Liabilities 66 76 86 96 104
NWC 115 181 209 239 268 289
Change in WC 66 29 30 29 21
468 499
145 160 Working Capital Assumptions (1):
31 35 Accounts Receivable 41.67x 41.67x 41.67x 41.67x 41.67x
43.1 43.1 Days Sales Equip. Rev. ### ### ### ### ###
0.0 0.0 Prepaid Expenses 1.38% 1.38% 1.38% 1.38% 1.38%
0.0 0.0 Accounts Payable 35.54x 35.54x 35.54x 35.54x 35.54x
0.0 0.0 Deferred Serv. Revenue 14.01x 14.01x 14.01x 14.01x 14.01x
0.0 0.0 Accrued Liabilities 6.85x 6.85x 6.85x 6.85x 6.85x
97.7 97.7
784.7 834.6
Asset Schedule
2,496.0 2,506 2008 2009 2010 2011 2012
0.0 0.0 Capex 631 720 867 970 1,055
0.0 0.0 Depr 705 804 867 922 953
554.4 554.4
126.8 126.8
84.5 84.5

43.4 43.4

1,404 1,404
3,170.0 3,827.0
8,664 9,381
Harvard Business Publishing
Is there a real option in this context
Yes there exists a real option where the company have the opportunity to invet in ATC and reap the benefits of 4661 Mn in synergies
Call price could be said as the amount paid by ACC to acquire ATC