Describe the methodological approach that should be used to value AirThread (e.g., WACC, APV or some combination of the two approaches). Estimate the cash flows from 2008 through 2012 along with the terminal value. Should the non-operating investments in equity affiliates be accounted for in the valuation?

AIRTHREAD ACQUISITION Revenue Projections: Service Revenue Service Revenue Growth 2008 4,194.3 14.00 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 7.59 403.7 7.5% 444.1 7.59. 475.2 7.59 Operating Expenser: System Operating Expenses System Operating Exp./Service Revenue 838.9 20.09 956.3 20.09. 1,075.8 20.09. 1.183.4 20.09. 1.266.3 20.09 755.5 240.00 861.2 240.0 968.9 240.09. 1,065.8 240.0 1.140.4 240.00 Cost of Equipment Sold Equipment COGS Selling, General & Administrative SG&A Total Revenue 1,803.6 40.00 2.056.2 40.09. 2.313.2 40.00 2,544.5 40.00 2,722.6 40.00 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 Amptions (I): Accounts Receivable Days Sales Equip. Rev. Prepaid Expenses Accounts Payable Deferred Serv. Revenve Accrued Liabilities 41.67% 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 41.67% 154.36x 1.38% 35.54x 14.01x 6.85x 41.67x 154.36x 1.38% 35.54x 14.01x 6.85x Capital Expenditures (2): Capital Expenditures Cap-x/Total Revenue 631.3 14.09. 719.7 14.0 867.4 15.09 970.1 15.39 1,055.0 15.59 ; 25 Payment 41 41 41 41 41 42 41 41 41 41 41 41 41 41 41 42 41 41 41 41 41 Date: 6/30/2011 7/31/2011 8/31/2011 9/30/2011 10/31/2011 11/30/2011 12/31/2011 131/2012 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 1231 2012 Annual Interest Principal 5.50% 12 28 12 29 12 29 12 29 12 29 12 29 12 29 11 29 11 29 11 30 11 30 12 30 11 30 12 30 30 10 30 10 31 10 31 10 2.166 OS O 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 Payment 42 41 41 41 41 41 41 41 42 41 41 41 42 41 41 41 41 41 41 2,176 386 to 99999 Annual Interest Principal 5.50% 17 24 17 24 17 24 17 24 17 24 17 24 17 24 16 24 16 24 16 25 16 25 16 25 16 25 16 25 16 25 16 25 15 25 15 25 15 26 15 26 15 26 15 26 15 26 15 26 14 26 14 26 14 27 14 27 14 27 14 27 14 27 14 27 14 27 13 27 13 28 13 28 13 28 13 28 13 28 13 28 12 28 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 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 3,133 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 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 Comparable Companies: Universal Mobile Neuberger Wireless Agile Connections Big Country Communications Rocky Mountain Wireless Average Equity Market Value 118,497 189,470 21,079 26.285 7,360 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 11.795 7,020 1,631 6,702 510 EBITDA 16.949 14,099 9,914 12,614 1,028 Net Income 3,794 4,103 (30) 3,384 240 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. AIRTHREAD ACQUISITION Revenue Projections: Service Revenue Service Revenue Growth 2008 4,194.3 14.00 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 7.59 403.7 7.5% 444.1 7.59. 475.2 7.59 Operating Expenser: System Operating Expenses System Operating Exp./Service Revenue 838.9 20.09 956.3 20.09. 1,075.8 20.09. 1.183.4 20.09. 1.266.3 20.09 755.5 240.00 861.2 240.0 968.9 240.09. 1,065.8 240.0 1.140.4 240.00 Cost of Equipment Sold Equipment COGS Selling, General & Administrative SG&A Total Revenue 1,803.6 40.00 2.056.2 40.09. 2.313.2 40.00 2,544.5 40.00 2,722.6 40.00 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 Amptions (I): Accounts Receivable Days Sales Equip. Rev. Prepaid Expenses Accounts Payable Deferred Serv. Revenve Accrued Liabilities 41.67% 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 41.67% 154.36x 1.38% 35.54x 14.01x 6.85x 41.67x 154.36x 1.38% 35.54x 14.01x 6.85x Capital Expenditures (2): Capital Expenditures Cap-x/Total Revenue 631.3 14.09. 719.7 14.0 867.4 15.09 970.1 15.39 1,055.0 15.59 ; 25 Payment 41 41 41 41 41 42 41 41 41 41 41 41 41 41 41 42 41 41 41 41 41 Date: 6/30/2011 7/31/2011 8/31/2011 9/30/2011 10/31/2011 11/30/2011 12/31/2011 131/2012 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 1231 2012 Annual Interest Principal 5.50% 12 28 12 29 12 29 12 29 12 29 12 29 12 29 11 29 11 29 11 30 11 30 12 30 11 30 12 30 30 10 30 10 31 10 31 10 2.166 OS O 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 Payment 42 41 41 41 41 41 41 41 42 41 41 41 42 41 41 41 41 41 41 2,176 386 to 99999 Annual Interest Principal 5.50% 17 24 17 24 17 24 17 24 17 24 17 24 17 24 16 24 16 24 16 25 16 25 16 25 16 25 16 25 16 25 16 25 15 25 15 25 15 26 15 26 15 26 15 26 15 26 15 26 14 26 14 26 14 27 14 27 14 27 14 27 14 27 14 27 14 27 13 27 13 28 13 28 13 28 13 28 13 28 13 28 12 28 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 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 3,133 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 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 41 Comparable Companies: Universal Mobile Neuberger Wireless Agile Connections Big Country Communications Rocky Mountain Wireless Average Equity Market Value 118,497 189,470 21,079 26.285 7,360 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 11.795 7,020 1,631 6,702 510 EBITDA 16.949 14,099 9,914 12,614 1,028 Net Income 3,794 4,103 (30) 3,384 240 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