Exhibit 5 Iridium Financial Projections and Capitalization, 1999-2007 ($ millions) 1998 Act. 1999 2000 2001 2002 2003 2004 2005 2006 2007 Income Statement (millions) # Voice Subscribers 800 1,475 2,525 3,675 4.550 5.275 5.900 6.525 7,150 # Paging Subscribers 50 125 225 325 425 525 600 650 690 Revenues $0.2 $403 $2,183 $3.748 $4.994 $5.821 $6.249 $6.435 $6,495 $6,481 EBITDA 436 351 1,339 2,809 3,859 4,611 4,973 5,100 5,084 5,001 Doprociation/Amort. 552 811 966 1,213 1,333 1,084 1,109 1,020 822 605 EBIT 988 -1,162 373 1,596 2.520 3,527 3,864 4.080 4,262 4,396 Interest Expense, not 265 387 454 424 278 59 39 92 Profil Before Tax -1,253 -1,549 1.172 2.240 3.400 3,804 4,080 4,223 4,304 Taxes @ 15% 176 337 520 580 612 633 646 Net Income -1,253 -1,549 81 996 1,911 2,948 3,284 3.468 3.590 3,658 Cash Flow Data Depr./Amortization 552 811 966 1,213 1.333 1.084 1,109 1,020 822 605 Capital Expenditures 716 027 1,340 1.246 1.268 1,274 385 301 413 844 Iner. (Decr.) in NWC a (398) 290 63 (102) (81) (54) (28) (12) (4) (1) Balance Sheet Data Cash 25 10 10 10 10 20 30 SO 50 50 Prop., Plant & Equip. 3,584 3.215 3,597 3,630 3.555 3,745 3,020 2,390 1,981 2,103 Total Assols 3,739 3.319 3.833 3,979 3.990 4.270 3,582 2.988 2.583 2,704 Total Debt 2.854 3,930 4.437 3.352 1.266 450 1155 Iridium, LLC, Capitalization as of 12/31/98 Capital Market Data as of 12/31/98 ($millions) Dobt Iridium Information Secured Bank Debt, @ Prime + 2.75% $500 Stock Price (IRIDO) $39.56 Guaranteed Bank Debt, @ Prime 625 Equity Bota (wookly data) 1.58 Sr. Sub. Notes @ 14.5%, duo 2006 323 Asset Beta (1998 average) 1.25 Senior Notes A @ 13.0%, due 2005 278 Class 1 Interests (shares) 141 million Sonior Notos B @ 14.0%, duo 2005 480 Class 1 Interests (fully diluted) b 185 million Ronior Notes C @ 11.25%, due 2005 300 Procoeds from Class 1 warrants b $220 million Senior Notes D @ 10.88%, due 2005 348 Total Debt 2.854 Yields on US Treasury Bills, Notes and Bonds Deferred payments due to Motorola $218 3-month 4.48% Equity 1-year 4.53% Preferred Partnerships (Equity-Class 2) $46 10-year 4.65% Total Class 1 Equily Raised 2,114 30-year 5.09% Accumulated Losses 1,683 Net Class 1 Equity (book value) $431 Prime Rate 7.75% Debt/Total Capital (book value) 86% Yields on Corporate Bonds Debt/Total Capital (market value) 34% Ana Rato 6.23% Debt/Total Capital (capital raised) 57% Ban Rated 7.23% Source: Salomon Smith Barney, Equity Research Report, 2/1/99; case writer estimates.Question 4 [15 marks] Please, refer to exhibit 5. and your answers from Question 3. Calculate the residual income {El} and free cash ows {FEFJ for projected years in exhibit 5. and estimate an appropriate perpetual growth rate for both Ills and FCFs to apply for perpetual cash ows beyond 211W. {5 marks} Using the RI, FCF numbers and appropriate grotvth rates you found above, please, calculate the value of equity for Iridium LLIL". {'5 marks) Calculate the equity value and enterprise value for Iridium LLIL". (It? marks) Eitplain1 any disadvantages of three values you have calculated previously. What changed would you propose to improve the quality of valuation? (5 marks}