Kenney Comment Dec Granting Conditional Authority for Lynch Interactive Corproation, et al to acquire indirect control of Cal-Ore Telphone Co., et al

Appendix A

Appendix A

Surplus/(Deficit) of Cash Available for Capital Expenditures

Scenario 1: $14 million of Debt @ 5% Interest Rate $7.2 million of Debt @ 8% - 10% Interest Rate

Assumptions:

1. $14.0 million of debt with an interest rate of 5% (Supplement filed July 30, 2004, p. 9.)

2. Interest and principal payments on $14.0 million of debt begin in 2006.

3. $7.2 million of debt with an interest rate of 8% in 1st year, 9% in 2nd year, and 10% in subsequent years. (Supplement filed July 30, 2004, pp. 7-8.)

4. Interest payments on $7.2 million of debt begin in 2006. There are no principal payments.

2006

2007

2008

2009

Source of Information

Cash from Operations Before Cost of Debt and Capital Expenditures

2,768,771

2,731,707

2,693,902

2,655,340

Supplement Filed Nov. 22, 2004, Appendix B

Less: Principal Payments on $14.0 million of Debt

(1,167,000)

(1,167,000)

(1,167,000)

(1,167,000)

Supplement Filed Nov. 22, 2004, Appendix B

Less: Interest Payments on $14.0 million of Debt

(670,825)

(612,475)

(554,125)

(495,775)

Computed. See also Supplmt. Filed 11/22/04, Exh. B

Plus: State Tax Benefits from Interest Deduction (5% State Income tax)

33,541

30,624

27,706

24,789

Computed. See also Supplmt. Filed 11/22/04, Exh. B

Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)

228,081

208,242

188,403

168,564

Computed. See also Supplmt. Filed 11/22/04, Exh. B

= Cash Available for Capital Expenditures

1,192,568

1,191,097

1,188,886

1,185,917

Less: Interest Payments on $7.2 million of Debt

(576,000)

(648,000)

(720,000)

(720,000)

Computed

Plus: State Tax Benefits from Interest Deduction (5% State income tax)

28,800

32,400

36,000

36,000

Computed

Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)

195,840

220,320

244,800

244,800

Computed

Subtotal

(351,360)

(395,280)

(439,200)

(439,200)

Computed

Net Cash from Operations Available for Capital Expenditures

841,208

795,817

749,686

746,717

Cash Surplus/(Deficit)

Net Annual Cash Surplus/(Deficit) After Capital Expenditures

2006

2007

2008

2009

Source of Information

Annual Cap. Ex. = $800,000

41,208

(4,183)

(50,314)

(53,283)

Supplmt. Filed Nov. 22, 2004, p. 4

Annual Cap. Ex. = 6-Year Annual Average Depreciation of $1,159,421

(318,213)

(363,604)

(409,735)

(412,704)

Appendix B

Annual Cap. Ex. = 2004 Budget Capital Expenditures of $1,195,000

(353,792)

(399,183)

(445,314)

(448,283)

Supplmt. Filed Nov. 22, 2004, p. 5

Annual Cap. Ex. = 2003 Depreciation of $1,320,382

(479,174)

(524,565)

(570,696)

(573,665)

Supplmt. Filed July 30, 2004, Exh. F

Annual Cap. Ex. = 6-Year Annual Average Cap. Ex of $1,907,142

(714,574)

(716,044)

(718,256)

(721,224)

Appendix B

Annual Cap. Ex. = 3-Year Annual Average Cap. Ex of $2,920,556

(2,079,348)

(2,124,738)

(2,170,870)

(2,173,838)

Appendix B

Appendix A

Surplus/(Deficit) of Cash Available for Capital Expenditures

Scenario 2: $14 million of Debt @ 7% Interest Rate $7.2 million of Debt @ 8% - 10% Interest Rate

Assumptions:

1. $14.0 million of debt with an interest rate of 5% (Supplement filed July 30, 2004, p. 9.)

2. Interest and principal payments on $14.0 million of debt begin in 2006.

3. $7.2 million of debt with an interest rate of 8% in 1st year, 9% in 2nd year, and 10% in subsequent years. (Supplement filed July 30, 2004, pp. 7-8.)

4. Interest payments on $7.2 million of debt begin in 2006. There are no principal payments.

2006

2007

2008

2009

Source of Information

Cash from Operations Before Cost of Debt and Capital Expenditures

2,768,771

2,731,707

2,693,902

2,655,340

Supplement Filed on Nov. 22, 2004, Appendix B

Less: Principal Payments on $14.0 million of Debt

(1,167,000)

(1,167,000)

(1,167,000)

(1,167,000)

Supplement Filed on Nov. 22, 2004, Appendix B

Less: Interest Payments on $14.0 million of Debt

(939,155)

(857,465)

(775,775)

(694,085)

Computed. See also Supplmt. Filed 11/22/04, Exh. B

Plus: State Tax Benefits from Interest Deduction (5% State Income tax)

46,958

42,873

38,789

34,704

Computed. See also Supplmt. Filed 11/22/04, Exh. B

Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)

319,313

291,538

263,764

235,989

Computed. See also Supplmt. Filed 11/22/04, Exh. B

= Cash Available for Capital Expenditures

1,028,886

1,041,653

1,053,679

1,064,948

Less: Interest Payments on $7.2 million of Debt

(576,000)

(648,000)

(720,000)

(720,000)

Computed

Plus: State Tax Benefits from Interest Deduction (5% State income tax)

28,800

32,400

36,000

36,000

Computed

Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)

195,840

220,320

244,800

244,800

Computed

Subtotal

(351,360)

(395,280)

(439,200)

(439,200)

Computed

Net Cash from Operations Available for Capital Expenditures

677,526

646,373

614,479

625,748

Cash Surplus/(Deficit)

Net Annual Cash Surplus/(Deficit) After Capital Expenditures

2006

2007

2008

2009

Source of Information

Annual Cap. Ex. = $800,000

(122,474)

(153,627)

(185,521)

(174,252)

Supplmt. Filed on Nov. 22, 2004, p. 4

Annual Cap. Ex. = 6-Year Annual Average Depreciation of $1,159,421

(481,895)

(513,048)

(544,942)

(533,673)

Appendix B

Annual Cap. Ex. = 2004 Budget Capital Expenditures of $1,195,000

(517,474)

(548,627)

(580,521)

(569,252)

Supplmt. Filed on Nov. 22, 2004, p. 5

Annual Cap. Ex. = 2003 Depreciation of $1,320,382

(642,856)

(674,009)

(705,903)

(694,634)

Supplmt. Filed July 30, 2004, Exh. F

Annual Cap. Ex. = 6-Year Annual Average Cap. Ex of $1,907,142

(878,255)

(865,488)

(853,462)

(842,193)

Appendix B

Annual Cap. Ex. = 3-Year Annual Average Cap. Ex of $2,920,556

(2,243,029)

(2,274,182)

(2,306,076)

(2,294,808)

Appendix B


Appendix A
Surplus/(Deficit) of Cash Available for Capital Expenditures


Scenario 1: $14 million of Debt @ 5% Interest Rate $7.2 million of Debt @ 8% - 10% Interest Rate



Assumptions:

1. $14.0 million of debt with an interest rate of 5% (Supplement filed July 30, 2004, p. 9.)
2. Interest and principal payments on $14.0 million of debt begin in 2006.
3. $7.2 million of debt with an interest rate of 8% in 1st year, 9% in 2nd year, and 10% in subsequent years. (Supplement filed July 30, 2004, pp. 7-8.)
4. Interest payments on $7.2 million of debt begin in 2006. There are no principal payments.


	2006	2007	2008	2009	Source of Information

Cash from Operations Before Cost of Debt and Capital Expenditures	2,768,771	2,731,707	2,693,902	2,655,340	Supplement Filed Nov. 22, 2004, Appendix B
Less: Principal Payments on $14.0 million of Debt	(1,167,000)	(1,167,000)	(1,167,000)	(1,167,000)	Supplement Filed Nov. 22, 2004, Appendix B
Less: Interest Payments on $14.0 million of Debt	(670,825)	(612,475)	(554,125)	(495,775)	Computed. See also Supplmt. Filed 11/22/04, Exh. B
Plus: State Tax Benefits from Interest Deduction (5% State Income tax)	33,541	30,624	27,706	24,789	Computed. See also Supplmt. Filed 11/22/04, Exh. B
Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)	228,081	208,242	188,403	168,564	Computed. See also Supplmt. Filed 11/22/04, Exh. B
= Cash Available for Capital Expenditures	1,192,568	1,191,097	1,188,886	1,185,917

Less: Interest Payments on $7.2 million of Debt	(576,000)	(648,000)	(720,000)	(720,000)	Computed
Plus: State Tax Benefits from Interest Deduction (5% State income tax)	28,800	32,400	36,000	36,000	Computed
Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)	195,840	220,320	244,800	244,800	Computed
Subtotal	(351,360)	(395,280)	(439,200)	(439,200)	Computed

Net Cash from Operations Available for Capital Expenditures	841,208	795,817	749,686	746,717


	Cash Surplus/(Deficit)
Net Annual Cash Surplus/(Deficit) After Capital Expenditures	2006	2007	2008	2009	Source of Information

Annual Cap. Ex. = $800,000	41,208	(4,183)	(50,314)	(53,283)	Supplmt. Filed Nov. 22, 2004, p. 4
Annual Cap. Ex. = 6-Year Annual Average Depreciation of $1,159,421	(318,213)	(363,604)	(409,735)	(412,704)	Appendix B
Annual Cap. Ex. = 2004 Budget Capital Expenditures of $1,195,000	(353,792)	(399,183)	(445,314)	(448,283)	Supplmt. Filed Nov. 22, 2004, p. 5
Annual Cap. Ex. = 2003 Depreciation of $1,320,382	(479,174)	(524,565)	(570,696)	(573,665)	Supplmt. Filed July 30, 2004, Exh. F
Annual Cap. Ex. = 6-Year Annual Average Cap. Ex of $1,907,142	(714,574)	(716,044)	(718,256)	(721,224)	Appendix B
Annual Cap. Ex. = 3-Year Annual Average Cap. Ex of $2,920,556	(2,079,348)	(2,124,738)	(2,170,870)	(2,173,838)	Appendix B



Appendix A
Surplus/(Deficit) of Cash Available for Capital Expenditures


Scenario 2: $14 million of Debt @ 7% Interest Rate $7.2 million of Debt @ 8% - 10% Interest Rate



Assumptions:

1. $14.0 million of debt with an interest rate of 5% (Supplement filed July 30, 2004, p. 9.)
2. Interest and principal payments on $14.0 million of debt begin in 2006.
3. $7.2 million of debt with an interest rate of 8% in 1st year, 9% in 2nd year, and 10% in subsequent years. (Supplement filed July 30, 2004, pp. 7-8.)
4. Interest payments on $7.2 million of debt begin in 2006. There are no principal payments.


	2006	2007	2008	2009	Source of Information

Cash from Operations Before Cost of Debt and Capital Expenditures	2,768,771	2,731,707	2,693,902	2,655,340	Supplement Filed on Nov. 22, 2004, Appendix B
Less: Principal Payments on $14.0 million of Debt	(1,167,000)	(1,167,000)	(1,167,000)	(1,167,000)	Supplement Filed on Nov. 22, 2004, Appendix B
Less: Interest Payments on $14.0 million of Debt	(939,155)	(857,465)	(775,775)	(694,085)	Computed. See also Supplmt. Filed 11/22/04, Exh. B
Plus: State Tax Benefits from Interest Deduction (5% State Income tax)	46,958	42,873	38,789	34,704	Computed. See also Supplmt. Filed 11/22/04, Exh. B
Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)	319,313	291,538	263,764	235,989	Computed. See also Supplmt. Filed 11/22/04, Exh. B
= Cash Available for Capital Expenditures	1,028,886	1,041,653	1,053,679	1,064,948

Less: Interest Payments on $7.2 million of Debt	(576,000)	(648,000)	(720,000)	(720,000)	Computed
Plus: State Tax Benefits from Interest Deduction (5% State income tax)	28,800	32,400	36,000	36,000	Computed
Plus: Federal Tax Benefits from Interest Deduction (34% Fed. Income Tax)	195,840	220,320	244,800	244,800	Computed
Subtotal	(351,360)	(395,280)	(439,200)	(439,200)	Computed

Net Cash from Operations Available for Capital Expenditures	677,526	646,373	614,479	625,748


	Cash Surplus/(Deficit)
Net Annual Cash Surplus/(Deficit) After Capital Expenditures	2006	2007	2008	2009	Source of Information

Annual Cap. Ex. = $800,000	(122,474)	(153,627)	(185,521)	(174,252)	Supplmt. Filed on Nov. 22, 2004, p. 4
Annual Cap. Ex. = 6-Year Annual Average Depreciation of $1,159,421	(481,895)	(513,048)	(544,942)	(533,673)	Appendix B
Annual Cap. Ex. = 2004 Budget Capital Expenditures of $1,195,000	(517,474)	(548,627)	(580,521)	(569,252)	Supplmt. Filed on Nov. 22, 2004, p. 5
Annual Cap. Ex. = 2003 Depreciation of $1,320,382	(642,856)	(674,009)	(705,903)	(694,634)	Supplmt. Filed July 30, 2004, Exh. F
Annual Cap. Ex. = 6-Year Annual Average Cap. Ex of $1,907,142	(878,255)	(865,488)	(853,462)	(842,193)	Appendix B
Annual Cap. Ex. = 3-Year Annual Average Cap. Ex of $2,920,556	(2,243,029)	(2,274,182)	(2,306,076)	(2,294,808)	Appendix B