EFTA02705504

TAP ADVISORS AA Global Bit Discussion Materials May 2014 EFTA_R1_02095948 EFTA02705504 Summary of Valuation Methodologies Ucscriptiun Spectrum Value • Industry standard valuation methodology (AKA "Greenfield Approach") • • Primary methodology used in the absence of "good" comps IRR Analysis • Google's review and endorsement of the financial projections narrows the discussion items • — We've sensitized the analysis for higher discount rates - We've assumed that 20% of Global Bit's ("GB") equity will be set aside for employees • Geostationary satellite spectrum rights have become increasingly scarce in recent years • • — Whereas historically satellite spectrum rights were granted for nominal fees, more recently satellite operators have paid up to $90mm per slot GEO Slot Equivalent • GB's spectrum provides coverage that is more comprehensive than geostationary spectrum and provides significantly more bandwidth Valuation • GB's spectrum can be converted into geostationary spectrum slot-equivalents based on coverage and bandwidth • We have valued GB's spectrum by applying average purchase prices paid for geostationary satellite spectrum slots to GB's spectrum slot-equivalents • In theory, an orbital spectrum right is a government granted license to provide a particular service in a certain market • • • Franchise licenses in the US cable industry provide an analogous economic model Franchise Fee Valuation - Cable operators in the US must obtain franchise licenses and pay franchise fees from each municipality where they wish to offer cable service; these fees are —5% of revenue • We applied the same percentage to the revenues generated by GB's business model as a proxy for the value of the spectrum $300 million would yield 67% IRR $700 million would yield 61% IRR $4.6 billion 141 GEO slot equivalents at 532mm/slot $11.1 billion NPV of 5% franchise fee of revenue discounted at 10% with 0% perpetuity growth TAP ADVISORS AS EFTA_R1_02095949 EFTA02705505 Summary of Valuation Methodologies (cont'd) Descriptio❑ Valle • GB's business model is fundamentally a broadband play which is much more analogous to the terrestrial wireless business model rather than the traditional • FSS business model Developing Markets Wireless — Therefore, can use terrestrial spectrum valuations to provide a proxy for the value of GB's spectrum License Proxy • Industry standard practice is to value spectrum on a MHzPOP basis in order to account for amount of spectrum and size/density of coverage area • Valuation metric can be adjusted to take into account varying economic and technical qualities of the spectrum • We have reviewed the license/franchise/spectrum book value as a percentage of total enterprise value for various industries (wireless, cable, satellite) • • License Value of Mature Businesses • We have applied this ratio to the total "mature" enterprise value of GB's business model, valuing GB using a 10% WACC (Wireless, Cable, Satellite) Must value company's business model under the assumption that is a mature business with significant going-concern, brand, goodwill, customer-relationship and other intangible value 2 $45.3 billion $6.9-$13.9 billion 10-20% spectrum value of total enterprise value calculated on a "mature" basis TAP ADVISORS AA EFTA_R1_02095950 EFTA02705506 IRR Analysis • An IRR or DCF analysis (mathematically equivalent) is an industry standard methodology for determining the value of a cash flow generating asset • For a start-up venture such as GB, there are significant assets that need to be acquired and/or developed in order for the business to function - If the costs for acquiring/developing these assets are captured by the cash flows then, those assets are not a part of what is being valued by the analysis. Specific examples include: • Satellites - captured through capital expenditures • Manufacturing facilities - captured through capital expenditures • Intellectual property - captured through NRE spend • Management talent - captured through the options pool and stock grants • Capital - captured through required rate of return / WACC - The valuation (or purchase price in the case of an IRR framework) resulting from the analysis needs to be allocated amongst all the assets whose costs are not captured in the cash flows • The only assets that aren't accounted for in the cash flows are the spectrum rights and landing rights • Landing rights in the Ku-band have historically been very easy to acquire and require nominal administrative fees 4 male on+ Total Soto (mm) Revenue % Growth Tora ha to 2.314 2015 2016 I. lot, I Nil t rating Prote, t un. 2017 2018 2019 2020 2021 2022 2012 ol 0 $36.187 406% 1241 2024 1033 $44,461 301% 446 2823 1033 $19,851 1.2.3% 6150 TV Ls, Total Coon EBITDA % Margin D&& Err 1/41, Taws Plus. D&A LewCepa Ism. A Net Wooing Cartel Unleveled KT leo Spectrum Purchase Prke IRR 00 10 /44, 68 ( ) ( 07) 058) 0-▪ 5) ( ( (3. ) (4.804) 01 ) D ) 0 7) 0 ) 7) OD 111 Wa 1 00 1.0 49 146 173 426 60 7 10 $186 51319 $3,738 $8,358 113,666 524.310 We Nu 500.0% 233.3% 124.1% 63.5% 779% 144 068) 0 107) ($1510 0139) 1450 12.163 55,738 18.862 $16.16' 122.946 529,993 $33,701 0/11 Ws 402% 58,0% 61.7% 64.8% 665% 674% 67.5% 67.6% (47) (135) (159) (232) (261) (172) 4412) (3831 (418) (410) (353) (3401 0115) 0242) ($317) 0371) 5189 $1,590 $4,025 $6479 $15,749 522.534 529.642 $33,341 ii 0 0 0 0 (073) (1.206) (2.120) 0,037) (3.834) (7.410) 0,340) 47 135 159 232 261 272 412 383 418 410 353 340 (318) (621) (165) 017) (206) (79) (996) (114) 059) (114) (114) (114) 3 2 3 03) 00) 97 93 83 153 95 86 44381, 0384) 0726) 0324) ($669) $194 11.708 $3318 $6,711 $11,523 $17,293 $22,556 $24,809 (5001 (3841 4726) 4324) (669) 191 1,708 3,118 6,711 11,523 17.293 22536 24,809 $500 63.63/4 111,1021 Purchase Dam 6/30/14 Terminal Value C ulat. on 2025 DITTDA (ass Normalued D&A EMT Less: Taxes Plus: 3kermlixed D&A Lem: Nam alixed CapEx Nel Terminal ra 533,701 (370) $33,331 0333) 370 (370) 524,998 PerpetuityGrowth Rate 0.0% PetpeRniv 0r.count Rate IR 0% Terminal Value $138478 lmplird ORDA Muni* 4.1x Envloym Ownership 20.0% Nei Terminal Valve 1111.102 TAP ADVISORS sA EFTA_R1_02095951 120 66 1.36 EFTA02705507 IRR Sensitivity Analysis ERR ccmnn,n I I I 5300 66.9% 400 652% 500 634% 600 62.2% 700 610% 00% 5300 66.9% 400 65.2% 500 634% 600 62.2% 700 614% 0% 5300 66.9% 400 65.2% 500 634% 600 622% 700 610% Meremeelal SAC 50 $75 $150 5225 645% 61.6% 590% 62.9% 615% 602% 590% 40.2% 589% 57.7% 56.6% 57.7% 565% 55.4% 544% Satellite CapEx Inman 20D% 400% 60.0% 65.7% 616% 635% 64,1% 624% 61.3% 60.1% 630% 61.7% 60.4% 59.3% 620% 60.7% 59.5% 585% Mn) Rechmlien % 15% 30% 45% 630% 582% 532% 61.4% 59.9% 584% 573% 55.9% 54.7% 519% 504% 493% 57,4% 33.6% 483% Implied 2023 EDEMA Marla 674% 67.4% 67.0% 66.5% 65.5% 5300 55.9% 54.8% 537% 52.7% 512% 800% 62.5% 61.1% 592% 582% 57.7% 60% 46.1% 449% 43.9% 429% 420% I I lnaemental Chown % 0% 5300 66.9% 400 652% 500 634% 600 62.2% 700 610% 00% 5300 669% 400 65.2% 500 634% 600 622% 700 610% 8% 15% 23% 654% 636% 620% 63.7% 62.1% 604% 622% 604% 59D% 601% 593% 57.7% 594% 58.1% 565% NRECapF.x Increase 250% 50.0% 75.0% 653% 632% 624% 63.7% 623% 610% 592% 623% 611% 599% 582% 61.1% 59.9% 58.8% 578% C.009 Increase% 30% 602% 58.6% 572% 56.0% 542% NOD% 61.1% 399% 582% 572% 56.9% $300 500 600 700 0% 15% 30% 45% 60% 669% 645% 611% 59.9% 572% 652% 559% 616% 547% 622% 53.6% 610% 590% 56.9% 549% 526% latiAle4 2025 EDITDA Musla 674% 621% 582% 535% 482% 62.9% 615% 602% 604% 592% 580% 58.5% 572% 56.0% I I 5300 400 503 600 700 0 66.9% 652% 634% 622% 610% De 6 653 63.5% 61.9% 605% 593% M Delp 12 60.4% 582% 56.1% 573% 542% 560% 534% 54.9% 18 57.6% 5300 400 500 600 700 0% 15% 30% 45% 60% 10% 674% 652% 64.3% 62.9% 617% 0% 634% 59.9% 55.9% 50.6% 43.9% 420% 394% 523% Em Ownendi 15% 672% 655% 610% 62.6% 613% 24 524% 510% 49.8% 484% 47.6% 20% 66.9% 652% 634% 622% 610% 25% 30% 66.2% 644% 62.9% 61.5% 665% 642% 633% 61.9% 60.6% 603% Coils remise % 15% 30% 45% 615% 592% 572% 572% 531% 485% 55.9% 515% 462% 53.5% 49.1% 442% 372% Now: &Kinney 5500mm Swine I Parcher Prtir 60% 542% 510% 464% 41.6% 342% CBITnk lzrgn M-nr,inty COSti hic rea se % 0% 0% 674% 15% 674% 30% 670% 45% 645% 60% 655% IS% 30% 62.9% 624% 62.2% 61.6% 605% 552% 57.9% 574% 56/f 55.5% 45% 60% 48.8% 484% 478% 46.9% 535% 53.1% 526% 518% 504% 454% TAP ADVISORS AS EFTA_R 1_02095952 EFTA02705508 IRR Sensitivity Analysis (cont'd) Even with draconian haircuts to the business plan, Google would still significantly exceed its cost of capital I RR Waterfall Is/ Purchase Price Range of 5300-700mm 0 0 The business case contemplates a partnership approach where local distributors carry the burden or subscriber acquisition in exchange for a revenue share — We assumed an incremental $150/sub SAC cost in addition to the revenue share Churn costs (in the form of SAC and hardware subsidies) will be borne by distributors in exchange for a revenue share; take rate projections were developed on a "net adds" basis — We assumed 30% incremental chum resulting in 80.0% - 70.0% • 60.0% - 66.9% 61.0% 61.6% 56.6% increased SAC costs and lower revenue 50.0% - 47.1% 0 Current plan ARPUs are based on detailed market analysis; they offer better service for lower prices than competitors 10.0% - 43.3% 38.•1% 0 — We reduced ARPU by 20%; this is incremental to the revenue reduction as a result of chum Current operating costs are based on a detailed, bottoms- up cost model with significant cushion built in (15% of revenue in excess of scheduled costs) 30.0% - 35.5% 34.0% 33.1% 30.3% 31.5% 30.7% 28.4% — We increased fixed and variable costs by 20%, thereby reducing EBITDA margins 20.0% - 16.5% 0 Satellite, launch and NRE capital expenditures have been based on detailed discussions with and proposals from 15.1% vendors 10.0% - — We increased manufacturing and launch capex by 20% and NRE capex by 100%, significantly increasing required capital 0.0% Base Case SAC Churn ARPU Costs Satellite NRE Delay +2 0 Satellite and commercial launch based on a detailed schedule developed by management and Google +$150 +30% -20% +20% Capex Capex yrs — We delayed commercial launch by 2 years to provide -Ir.. •1(K1' additional buffer for delays 5 TAP ADVISORS AS EFTA_R1_02095853 EFTA02705509 GEO Slot Equivalent Valuation ■ Historically, orbital spectrum rights were assigned for nominal fees • As high-quality orbital spectrum rights have become scarce, valuations have gone up dramatically — Recently, satellite operators have paid upwards of $90mm for satellite orbital slot licenses Recent Brazil Orbital Slot Auction Results Year Company Price (S mm) Bands Longitude 2014 Hispasat $29.3 Ku 61 W 2014 SES 14.9 C, Ku, Ka 48 W 2014 SES 12.1 Ku 64 W 2014 Eutelsat 12.8 C, Ku 69.45 W 2011 Hughes Network Systems 91.6 Ku, Ka 45 W 2011 Hughes Network Systems 22.2 Ku, Ka, X 68.5 W 2011 Star One 23.3 Ku, Ka 84 W 2011 Star One 23.3 Ku, Ka, X 70W Average Price/Slot $28.7 High 91.6 LOU' 12.1 TAP ADVISORS AS EFTA_R1_02095954 EFTA02705510 GEO Slot Equivalent Valuation (cont'd) Additionally, when orbital spectrum rights have been acquired in M&A transactions, the acquirer is required to mark to market the value of those rights, providing a market-based valuation for orbital rights Intel sal -Pa na insat • Panamsat merged with Intelsat Bermuda (subsidiary of Intelsat) in 2005, making the world's largest commercial satellite company — Leading global FSS provider of video, corporate, Internet, voice and government communications services — Had a fleet of 23 active satellites (including 2 backup satellites) • Allocated $1.1 billion of the $3.3 billion purchase price to orbital slot value — 34% of total value attributable to orbital slots - $59 million per slot over 19 orbital slots Viasat-WildBlue • WildBlue acquired by Viasat in 2009 - Premier Ka-band satellite broadband service provider - Didn't own any orbital slots, but had 2 satellites that were providing service under colocation agreement • Allocated $8.2 million of the $574 million purchase price to satellite co-location rights - 10 year agreement set to expire in 2019 - Extrapolating $8.2 million per 10 years as a DCF (at 3% inflation) to estimate perpetual rights yields an NPV of the slot of $21.7 million, at a discount rate of 8% I oral/PSI I elesat Canada • Telesat Canada acquired by Loral Space & Communications and the Public Pension Investment Board of Canada in 2007; subsequently, was merged with Loral Skynet - Satellite services operator and provider of global communications services to broadcast, telecom, corporate and government customers - Had 13 GEO satellites in operation • Allocated $494 million of the $3.3 billion purchase price to orbital slot value - 15% of total value attributable to orbital slots — $45 million per slot over 11 orbital slots TAP ADVISORS sA 7 EFTA_R1_02095955 EFTA02705511 GEO Slot Equivalent Valuation (cont'd) We valued GB's spectrum by converting it into "geo slot equivalents" and applied the range of prices paid for orbital spectrum rights CEO Slot Equivalent Calculation (Bandwidth in Gips) Bandwidth / Spot Beam Spot Beams / Satellite Satellites / Constellation 0.59 19 1,560 [1.971 119] 1,560 Total Bandwidth 17,347 58,406 75,754 % of Capacity over Land 25% 25% 25% Total Bandwidth Over Land 4,337 14,602 18,938 ViaSat-1 Bandwidth 134 134 134 ViaSat-1 Slot Equivalents 32 109 C141) First Constellation Second Constellation Total 'slot \ aloes Year Company Price (5 mm) Bands Longitude 2014 Hispasat 5293 Ku 61 W 2014 SES 14.9 C, Ku, Ka 48 W 2014 SES 12.1 Ku 64 W 2014 Eutelsat 12.8 C, Ku 69.45 W 2011 Hughes Network Systems 91.6 Ku, Ka 45 W 2011 Hughes Network Systems 22.2 Ku, ICa, X 68.5W 2011 Star One 233 Ku, Ka 84 W 2011 Star One 23.3 Ku, ICa, X 70 W 2009 Wildblue 21.7 Ka 111.1 W 2007 Telesat Canada 45.0 various various 2005 Panamsat 59.0 various various Average Price/Slot $333 Number of Slots (...141.e>1 Global Bit Spectrum Value $4,563 8 TAP ADVISORS sA EFTA_R1_02095956 EFTA02705512 Franchise Fee Valuation • In theory, an orbital spectrum right is a government granted license to provide a particular service in a certain market • Franchise licenses in the US cable industry provide an analogous economic model - Cable operators in the US must obtain franchise licenses and pay franchise fees from each municipality where they wish to offer cable service; these fees are —5% of revenue • Apply the same percentage to the revenues generated by the Company's business model as a proxy for the value of the spectrum • The comparison is imperfect: — GB's rights are fundamentally superior to franchise rights as franchise rights are generally non-exclusive whereas GB will have exclusive rights to provide high-bandwidth, low-latency Ku-band broadband access from a LEO orbit - Comparison does not account for CapEx/OpEx differences in the broadband vs. MSO business model Cable Co Franchise Fee Analysis n Corricast Time Warner Cable Charter Franchise Fee I'aid Video Revenue $1,259 $19,936 490 10,183 190 3,840 Fr. Fee as "0 Video Revenue 6.3% 4.7% 4.9% Spectrum Cash I hos. Based on CableCo I ranchise ire Structure 2015 (S vtitlimul Revenue Frandtise Fee % Spectrum Cash Flows PV of Spectrum Cash Flows 2014 2016 2017 2018 $0 $0 $0 $186 $1,119 5.0% 5.0% 5.0% 5.0% 5.0% SO SO $0 $9 $56 2019 $3,730 2020 $8,358 2021 $13,666 2022 2023 $24,310 $34,187 2024 $44,461 5.0% 5.0% 5.0% 5.0% .5.0% 5.0% $186 $418 $683 $1,216 $1,709 $2,223 T'Y $22,231 $0 $o so $7 S38 $116 $236 $351 $567 $725 $857 58,172 NPV $11,069 Discount Rate Perpetuity Growth 10.0% 0.0% NPV Sensitivity I O Franchise Fee % 3.0% 4.0% 5.0% 6.0% 7.0% 6.0% $14,431 $19,241 8.0% 9,459 10.0% 6,641 12.0% 4,877 14.0% 3,698 4,930 $24,051 $28,861 12,612 8,855 6,502 15,764 18,917 11,069 13,282 8,128 9,754 6,163 7,395 $33,672 22,070 15.496 11,379 8428 0 gg Franchise Fee % 0.0% 15.0% 30.0% 45.0% 60.0% 3.0% 4.0% 5.0% 6.0% $8,855 $11,069 $13,282 $6,641 5,645 4,649 3,653 2456 7.0% 7,527 6,198 4,870 3,542 4,427 5,313 9,408 11290 7,748 9298 6,088 7,305 . late: calculated using 10% discount mt< TAp 9 $15,496 13,172 10,847 8,523 6,198 ADVISORS AA EFTA_R1_02095957 EFTA02705513 Developing Markets Wireless License Proxy • GB's business model is fundamentally a broadband play which is much more analogous to the terrestrial wireless business model rather than the traditional FSS business model — Traditional FSS uses wide coverage beams (often encompassing entire continents) thereby broadcasting identical information to a wide geographic footprint (perfect for some applications, such as DTH video) — GB's business model uses many small spot beams each carrying unique data which is well suited for broadband service - Therefore, can use terrestrial spectrum valuations to provide a proxy for the value of satellite spectrum • Industry standard practice is to value spectrum on a MHzPOP basis in order to account for amount of spectrum and size/density of coverage area • Valuation metric needs to be adjusted for varying economic and technical qualities of the spectrum — Terrestrial spectrum, under optional conditions, can theoretically reach spectral efficiencies of 30 bits/Hz, although real world values are closer to 1-7 bits/Hz - GB's first generation constellation will have a spectral efficiency of 1.2 bits/Hz - (Satellite networks can achieve 2x the frequency reuse of terrestrial networks by implementing dual-polarization frequency reuse, which is difficult to implement in terrestrial networks] - this has not been reflected in the valuation analysis - The build-out costs for terrestrial networks, on a per covered POP basis, are orders of magnitude higher than for satellite networks - this has not been reflected in the valuation analysis (1) (2) (3) (4) Average Price/MHzPOPM $0.12 Median 0.08 Global Bit Spectrum Spectrum (MHz) Population (mm) MHzPOP (mm) 2,050 7,046 14,444,300 Wireless Spectral Efficiency 30.00 Global Bit Spectral Efficiency 120 Efficiency Factor 0.04 Adjusted MHzPOP (mm) 577,772 Median Price/ MHzPOP 0.08 GB Spectrum Value ($mm) $45,319 Illustrative Comparison of Build-Out Off\ Myanmar (Ooredoo) US. (AT&T Wireless) US. (Industry Estimate)ta) Global (Global Bit) Excludes top 4 and bottom 4 auction results; see Appendix for full dataset Source: http://online.wstcom/news/articles/SB10001424052702303743604579352310122552966 AT&T disclosures indicate that 24% of its PP&E (of 4275bn) is related to the wireless business Industry insider/expert estimate for de novo spectrum build out I 0 Build-Out CapEx $15,000 65,952(3) 3,750 3,210 Population Coverage On m 56 $269.08 319 206.81 319 11.76 7,046 0.46 Implied Cost/POI' TAP ADVISORS sA EFTA_R1_02095958 EFTA02705514 License Value of Mature Businesses • Companies across the wireless, cable and satellite industries assign a carrying value to license/franchise/spectrum rights on their books - Unlike young companies, mature businesses have spent significant capital building up hard assets, intangibles (other than license/spectrum/franchise rights) as well as going-concern value. These assets are already paid for and thus the enterprise value needs to be allocated among these assets • The percentage of license/franchise/spectrum value of enterprise value of these companies can be applied to GB's enterprise value to value spectrum assets. Analysis only applies if GB is valued on a "mature" basis. Two possible approaches: — Estimate the value of hard assets, intangibles, and going concern-value the business would develop once it reached steady state - very difficult, if not impossible, to do - Value the company on a DCF basis using a steady-state WACC (we used 10%) License Value Across Industries License Value Across Industries License Enterprise %LV License Enterprise LV IS millions) Country Value Value of EV (S millions) Country Value Value of LV Mobile Carriers Cable Companies AT&T USA S59,584 $166,987 35.7% Comcast USA $56,364 5182.364 30.9% Verizon USA 72,713 260,301 27.9% Time Warner Cable USA 26,934 64,056 42.0% Sprint USA 41,978 62,898 66.7% Charter USA 6,009 28,101 21.4% T-Mobile USA 17)83 39,464 44.0% Cablevision USA 732 13,416 53% China Mobile China 222 142,677 0.2% Shaw Communications Canada 7,476 14,802 505% Vodafone United Kingdom 43,991 102,552 42.9% DBS Bharti Airtel India 3,013 32,732 9.2% America Movil Mexico 9,433 118,679 7.9% Dish USA $3,297 $30,234 10.9% Telefonica Spain 27238 145,411 18.7% DirecTV USA 785 55,918 1.4% Axiata Malaysia 580 20,809 2.8% FSS Vimpelcom Netherlands 6,797 39210 173% SES Luxembourg $1,011 518,391 53% Etisalat UAE 2,191 25,045 8.7% Intelsat Luxembourg 2.388 17,301 13.8% Telenor Norway 5,962 45,015 13.2% TeliaSonera Sweden 1,252 45,521 2.8% Other Sirius XM Deutsche Telekom Germany 48,476 141,020 34,4% USA 52,084 $25,750 8.1% Reliance Communications India 4,282 10,557 40.6% Iridium USA 14 1,323 1.1% Idea Cellular India 1,730 10,719 16.1% MI5 Russia 182 23,731 0.8% Average") 17.8% Telecom Italia Italy 8,803 61,933 142% Median 13.8% Tata Teleservictu India 366 1,266 28.9% Global Bit Implied Spectrum Value Turkccll Turkey 1,112 9,261 12.0% Spectrum Value as % of EVa) Megaton Russia 1.905 24529 7.8% (1) Excludes top 4 and bottom 4 observations (2) Calculated off F.V of 569,620mm; based on 10% WACC and 0% perpetuity growth 11 10.0% 12.5% 15.0% 17.5% 20.0% $6,962 I $8,703 510,443 512,184 I $13,924 TAP ADVISORS AS EFTA_R1_02095959 EFTA02705515 Appendix EFTA_R1_02095960 EFTA02705516 Financial Projections Base case model: no SAC or churn; revenue, costs, capex and timing as projected Putrha.e Pale 6/30/14 0 matrns; Pumha... 2014 2015 201e 2017 '018 201 20'0 2021 2022 2 2u24 2025 It Terminal Value ( • kulaiwo 'foul Cub, Onn0 11(1 00 00 10 4 146 273 426 60.7 810 1033 1033 2025 EBITDA $33,701 Revenue SO SO $0 $186 $1,119 $3,730 $3,358 513266 $2010 $34,187 $41,461 $49851 Len. Normalized D&A (370) % CAntilt Ne we Mt get. 500.0% 2333% 124.1% 635% 77.9% 40.6% 30.1% 121% ENT $33,331 Las: Taxes (8,333) Network Ops & Tranweswo $8 $14 $18 $43 $53 $87 $150 $212 $335 5442 5510 $584 Plus. Normalized 370 Set Manufaclunm; 8 15 30 63 32 32 64 35 66 36 36 36 Is,,: Nornulired CapE% (370) Billing Sr Care 0 1 1 16 86 274 587 926 1512 2.124 2,762 3,096 Net Terminal IMF $24298 ReVellUe Share 0 0 0 IS 90 298 669 1493 1,94$ 2.735 3257 3,936 Rat Deln 0 0 0 2 11 37 84 137 243 342 445 499 Perpetuity Growth Rate 0.0% Ampeluely INfionn1 Rase 180% VartaNe Cosa $16 $30 $19 5139 $272 5730 $1,553 52403 $1,101 55.678 57,329 58203 TennInal Value $138278 Mktg & Prod Dev $6 $14 $34 $65 $96 5107 $109 $120 $131 $142 $154 $154 Implied LAMM Multiple &Ix Research & Dcv 17 21 23 21 37 49 62 67 33 94 104 105 Employee Clu nen.hip 200% GRA 29 42 53 97 264 681 1-195 2214 3228 5327 6,880 7.689 Not Terminal Value $111,102 Fluid Costa $52 $77 $109 $136 $396 5337 $1267 $2401 $4,043 $5,563 57238 $7,947 Suhwnter Acqumition Coals 0 0 0 0 0 0 0 0 0 0 0 0 Gres Add« 0 0 0 I 4 10 13 15 18 20 22 0 Corczvr Cruse Aid s: Total Cub We (68) *5, (107) ' v.( (158) 116 (125) 58 (669) 46 (1567) 64 (3,120) 80 (4.304) 123 0214) 139 (11.241) 161 0067) eft (16.150 84311DA 000 0107) 0158) 0139) $150 $2,163 $5,238 5062 $16246 $22,916 $29,995 133201 Alergin Mt Mt 40.2% 58.0% 62.7% 642% 663% 67.1% 67SX 676% s: D&A (47) (133) 059) (242) (261) (272) (4112) (383) (418) (410) (353) (340) ERIT 0115) 0 2411 153171 0371) $189 $1290 $4,025 $8479 615749 S22.536 $29,642 633.361 LewTaxes 0 0 0 0 0 0 73) (1206) (2.110) (3.9371 0.634) (7.410) 0240) Plus: D&A 47 135 159 232 261 272 412 383 418 410 353 340 Less:CapFA PIS) 0 21) 068) pin (206) (79) (996) (114) (859) (114) (114) (114) less. A Net Pierian Ca tel 3 2 3 3 97 83 83 153 95 86 418 Uakvered FCV 0384) 0726) ($324) 06691 $194 $1,703 $3,118 $6711 $11.523 $17,293 $22,556 524809 FCF 000) 084) (726) (3241 (669) 194 1200 3,118 6,711 11.523 17,293 22,556 24209 111.102 Spectrum Purchase Price 5500 IRR 63.6% 13 TAP ADVISORS AS EFTA_R1_02095961 EFTA02705517 Key Assumptions Global Bit Operating Assumptions ($ minions, except per unit amounts) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 RF Satellite Launches: Phase 1 1560 satellites 2017-2024 Phase 2 1560 satellites 2020-2027 Phase 3 1560 satellites 2022-2029 Coverage:. Land Coverage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% Capacity Utilization 0% 0% 0% 1% 5% 15% 16% 25% 21% 28% 40% 40% Business Customers (based off total) 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% Overall Utilization 0% 0% 0% 1% 7% 20% 22% 34% 28% 38% 54% 54% Provisioning (at lowest residential package): 240 Kbps Allocation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 60.0% 60.0% 60.0% 60.0% 180 Kbps Allocation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 90.0% 90.0% 35.0% 35.0% 35.0% 35.0% 60 Kbps Allocation 0.0% 0.0% 0.0% 100.0% 100.0% 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 60 Kbps Allocation (Entry) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 10.0% 10.0% 5,0% 5.0% 5.0% 5.0% Customer Care / Sub / Year $0 $0 $0 $7 $6 $5 $4 $3 $1 $1 $1 SI Residential ARPU: Capacity. Costs: CapEx: 240 kbps $20 Phase I Gbps / Sat 11.12 Backhaul/Circuits % 1.0% Manufacturing CapEx / Sat $250,000 180 Icbps 15 Phase 2 Gbps / Sat 37.44 Revenue Share % 8.0% Launch CapEx / Sat 325,000 60 kbps 15 Phase 3 Gbps / Sat 55.50 Other G&A % of Rev 15.0% Total NRE CapEx (Swim) 675 60 kbps (entry) 5 SAC $0 Ongoing CapEx / Year ($nun) 114 Business 80 - 100 TAP ADVISORS AS EFTA_R1_02095962 EFTA02705518 Developing Markets Wireless License Proxy Relent )12VCIOpIllg Market Sri:OIL/Ill AUCtIM1 Rt alts Country Year Price ISmml MHz Bou t Population (mm) WM I lzPOP India 2014 30,081 10 1,009 52.98 Croatia 2013 31 10 5 0.67 Excluded from Average Czech Republic 2013 136 20 10 0.66 Czech Republic 2013 122 20 10 059 Czech Republic 2013 114 20 10 0.56 Croatia 2013 19 10 5 0.41 Myanmar 2014 500 30 56 0.30 India 2014 2,627 12 1,009 022 India 2014 1,887 14 1,009 0.13 India 2014 2,108 20 1,009 0.10 India 2014 2,168 21 1,009 0.10 Pakistan 2014 307 20 174 0.09 Pakistan 2014 301 20 174 0.09 Pakistan 2014 148 10 174 0.08 Pakistan 2014 148 10 174 0.08 Czech Republic 2013 2 2 10 0.08 Czech Republic 2013 3 4 10 0.08 Czech Republic 2013 2 2 10 0.08 Czech Republic 2013 2 2 10 0.08 Czech Republic 2013 7 10 10 0.06 Pakistan 2014 210 20 174 0.06 Slovakia 2014 9 30 5 0.05 Czech Republic 2013 16 40 10 0.04 Czech Republic 2013 16 40 10 0.04 Czech Republic 2013 16 40 10 0.04 India 2014 143 3.6 1,009 0.04 Lithuania 2013 0 20 3 0.03 Chile 2014 13 30 17 0.02 Chile 2014 8 20 17 0.02 Lithuania 2013 20 3 0.01 Lithuania 2013 0 20 3 0.01 Excluded from Average Latvia 2014 0 20 2 0.00 Chile 2014 $1 20 17 0.00 TAP ADVISORS sA 15 EFTA_R 1_02095963 EFTA02705519 Disclaimer This presentation has been prepared by TAP Advisors ("TAP") for the exclusive use of the party to whom TAP delivers this presentation (together with its subsidiaries and affiliates, the "Company") using information provided by the Company and other publicly available information. TAP has not independently verified the information contained herein, nor does TAP make any representation or warranty, either express or implied, as to the accuracy, completeness or reliability of the information contained in this presentation. Any estimates or projections as to events that may occur in the future (including projections of revenue, expense, net income and stock performance) are based upon the best judgment of TAP from the information provided by the Company and other publicly available information as of the date of this presentation. There is no guarantee that any of these estimates or projections will be achieved. Actual results will vary from the projections and such variations may be material. Nothing contained herein is, or shall be relied upon as, a promise or representation as to the past or future. TAP expressly disclaims any and all liability relating or resulting from the use of this presentation. This presentation has been prepared solely for the informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The Company should not construe the contents of this presentation as legal, tax, accounting or investment advice or a recommendation. The Company should consult its own counsel, tax and financial advisors as to legal and related matters concerning any transaction described herein. This presentation does not purport to be all-inclusive or to contain all of the information that the Company may require. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. This presentation has been prepared on a confidential basis solely for the use and benefit of the Company. Distribution of this presentation to any person other than the Company and those persons retained to advise the Company, who agree to maintain the confidentiality of this material and be bound by the limitations outlined herein, is unauthorized. This material must not be copied, reproduced, distributed or passed to others at any time without the prior written consent of TAP. TAP ADVISORS sA EFTA_ R1_ 02095964 EFTA02705520