8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 24, 2010

USA Mobility, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-51027	16-1694797
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

6677 Richmond Highway, Alexandria, Virginia	22306
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 800-611-8488

Not Applicable
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 24, 2010, USA Mobility, Inc. announced operating results for the fourth quarter and year ended December 31, 2009. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 2.02 by reference. The information in this Item 2.02 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 8.01 Other Events.

On February 24, 2010, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share of common stock. The cash distribution will be paid on March 31, 2010 to stockholders of record on March 17, 2010. The Company expects the entire amount of the cash distribution to be paid as a return of capital.

The information in this Item 8.01 of this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibit.

(a) Financial statements of business acquired:

Not applicable.

(b) Pro forma financial information:

Not applicable.

(c) Exhibit:

Exhibit 99.1

Description of Exhibit — Press Release dated February 24, 2010 (furnished pursuant to Items 2.02 and 8.01; not “filed” for purposes of Section 18 of the Exchange Act)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	USA Mobility, Inc.
February 26, 2010	By:	/s/ Thomas L. Schilling
		Name:	Thomas L. Schilling
		Title:	Chief Operating Officer and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	USA Mobility, Inc. Press Release dated February 24, 2010

EX-99.1

Exhibit 99.1

News Release

For Immediate Release	Contact:	Bob Lougee (703) 721-3080
Wednesday, February 24, 2010		bob.lougee@usamobility.com

USA Mobility Reports Fourth Quarter and 2009 Operating Results;
Announces Regular Quarterly Cash Distribution

Subscriber and Revenue Trends Improve; Operating Expenses Decline;
$45.5 Million in Capital Returned to Stockholders in 2009

Alexandria, VA (February 24, 2010) — USA Mobility, Inc. (Nasdaq: USMO), a leading provider of wireless messaging and communications services, today announced operating results for the fourth quarter and year ended December 31, 2009.

In addition, the Company’s Board of Directors declared a regular quarterly cash distribution of $0.25 per share. The cash distribution will be paid on March 31, 2010 to stockholders of record on March 17, 2010. The Company expects the entire amount of the cash distribution to be paid as a return of capital.

For the fourth quarter, total revenues were $65.4 million, compared to $69.5 million in the third quarter of 2009 and $84.3 million in the fourth quarter of 2008. EBITDA (earnings before interest, taxes, depreciation, amortization and accretion) was $21.0 million in the fourth quarter of 2009, compared to $29.8 million in the year-earlier quarter. Fourth quarter operating income was $12.2 million, compared to $18.1 million in the fourth quarter of 2008, while net income was $3.6 million, or $0.16 per fully diluted share, compared to $8.0 million, or $0.32 per fully diluted share, in the year-earlier quarter.

For the full-year 2009, revenues totaled $289.7 million, compared to $359.4 million in 2008, while EBITDA was $99.3 million, or 34.3 percent of revenue, compared to $115.9 million, or 32.2 percent of revenue, in the prior year. The Company reported net income for 2009 of $67.6 million, or $2.90 per fully diluted share, compared to a net loss of $157.1 million, or $5.83 per fully diluted share, for 2008. The prior year loss

resulted from the goodwill impairment in the first quarter of 2008 for which the Company incurred a $188.2 million non-cash expense to write-off its entire goodwill balance. Absent the goodwill write-down, net income for 2008 would have been $31.1 million, or $1.15 per fully diluted share.

Key results and highlights for the fourth quarter and 2009 included:

• Net unit losses were 115,000 in the fourth quarter, compared to 152,000 in the third quarter and 187,000 in the year-earlier quarter, while the quarterly rate of unit erosion decreased to 5.0 percent from 6.2 percent in the third quarter. The annual rate of unit erosion was 22.5 percent in 2009, compared to 19.2 percent in 2008. Net unit losses were 633,000 in 2009 versus 670,000 in 2008. Units in service at year-end 2009 totaled 2,182,000, compared to 2,815,000 a year earlier.

• The quarterly rate of revenue erosion improved to 5.9 percent in the fourth quarter from 7.5 percent in the third quarter. The year-over-year rate of revenue decline increased to 19.4 percent in 2009 from 15.3 percent in 2008.

• Operating expenses (excluding depreciation, amortization, accretion and goodwill impairment) were $44.4 million for the fourth quarter, a reduction of $10.1 million, or 18.5 percent, from $54.4 million in the year-earlier quarter. For the full year, operating expenses (excluding depreciation, amortization, accretion and goodwill impairment) declined by $53.1 million, or 21.8 percent, to $190.4 million from $243.5 million in 2008. Expense reduction during the year was largely the result of continued network rationalization, staff reductions and implementation of other company-wide cost efficiencies.

• Average revenue per unit (ARPU) was $8.88 for the fourth quarter, compared to $8.89 in the third quarter and $8.71 in the fourth quarter of 2008. For the year, ARPU totaled $8.77, compared to $8.64 in 2008.

• EBITDA as a percentage of revenue, or EBITDA margin, was 32.2 percent in the fourth quarter, compared to 35.4 percent the year-earlier quarter.

• Capital expenses were $5.0 million in the fourth quarter versus $4.2 million in the year-earlier quarter. For 2009, capital expenses totaled $17.2 million, compared to $18.3 million in 2008.

• The Company generated $84.8 million in cash during the year from operating and investing activities and had a cash balance of $109.6 million at December 31, 2009.

• During the year the Company distributed to stockholders total cash distributions of $2.00 per share of common stock, representing a return of capital to stockholders of $45.5 million.

• The number of full-time equivalent employees declined from 811 at the beginning of the year to 672 at year-end as a result of various consolidation and expense control initiatives.

“We again made excellent progress in the fourth quarter and throughout 2009,” said Vincent D. Kelly, president and chief executive officer. “Despite a struggling economy, high unemployment and ongoing industry challenges, we continued to operate the Company profitably while meeting our primary performance goals, including reducing expenses, increasing revenue per unit and operating margins, enhancing organizational efficiencies and concentrating selling and marketing around our core market segments, especially Healthcare. At the same time, we met our goal of generating a high enough level of cash flow to return significant capital to stockholders.”

Kelly said subscriber and revenue trends, which had deteriorated during the first three quarters of 2009, improved in the fourth quarter as general economic conditions began to stabilize. “We were pleased to see modest improvement in the pace of subscriber and revenue erosion during the quarter as our net loss rates reached their lowest level in more than 18 months. Whether these trends are sustainable, it’s too early to say,” he added; “however, we are encouraged by the positive results and hopeful that these early signs of an economic recovery will continue and favorably impact our future operating performance. Clearly, we are much more optimistic about subscriber trends today than we were a year ago.”

During 2009, Kelly noted, the Company continued to focus its sales and marketing efforts around its Healthcare market segment, which represented 57.6 percent of the Company’s direct subscriber base at year-end as well as 51.5 percent of direct paging revenue in the fourth quarter. “Healthcare continues to be our best performing market segment, contributing two-thirds of our direct gross placements in the fourth quarter, while net churn among Healthcare accounts remained significantly lower than for all other subscriber segments.”

Kelly said USA Mobility paid cash distributions to stockholders totaling $2.00 per share during 2009, including regular quarterly cash distributions of $0.25 per share and a special cash distribution of $1.00 per share in the first quarter, representing a return of capital totaling $45.5 million. “We were delighted to be able to return capital to stockholders during the year consistent with our stated capital allocation strategy. Over the past five years we have now returned $322.4 million to our stockholders. In addition,” he noted, “we repurchased $42.9 million of our common stock since the inception of our stock buy-back program.” Kelly said the Company expects to continue to operate the business consistent with its goal of producing sufficient cash flow to return capital to stockholders. “However,” he cautioned, “the rate at which the Company will continue to return capital to stockholders, either in the form of cash distributions or share repurchases, will depend largely on future operating results as well as economic factors and other business opportunities.”

Thomas L. Schilling, chief operating officer and chief financial officer, said: “Overall, our 2009 operating results were very strong. Although we continued to operate in a challenging environment, we expanded our EBITDA and net operating cash flow after investing activities to 34.3 percent and 29.3 percent, respectively, in the face of a 19.4 percent decline in revenue. At the same time, ARPU remained strong, operating and capital expenses declined, and we generated net operating cash flow after investing activities of $84.8 million.”

Schilling added: “For the year, operating expenses (excluding depreciation, amortization, accretion and goodwill impairment) declined 21.8 percent from 2008, outpacing the 19.4 percent year-over-year decline in revenues. In fact, costs in 2009 declined faster than revenues for the fourth straight year. Expense savings were largely the result of significant progress in our network rationalization program, including lower site rents, combined with staff reductions and various cost savings initiatives implemented throughout the Company.” Schilling noted positive results for the fourth quarter included “improvement in the rate of unit and revenue erosion to 5.0 percent and 5.9 percent, respectively, from 6.2 percent and 7.5 percent in the third quarter, while total paging ARPU increased to $8.88 in the fourth quarter from $8.71 in the fourth quarter of 2008.”

Commenting on the Company’s financial guidance, Schilling said: “We are pleased the financial guidance we provided for 2009 was either within or better than our target estimates. “Total revenue of $289.7 million was within our guidance range of $286 million to $291 million; operating expenses (excluding depreciation, amortization and accretion) of $190.4 million were better than the guidance range of $194 million to $197 million; and capital expenses of $17.2 million were within the guidance range of $16 million to $18 million. With respect to guidance for 2010, the Company expects revenue to be in a range from $228 million to $238 million, operating expenses (excluding depreciation, amortization and accretion) to be in a range from $158 million to $163 million, and capital expenses in a range from $10 million to $12 million.”

* * * * * * * * *

USA Mobility plans to host a conference call for investors on its fourth quarter and 2009 results at 10:00 a.m. Eastern Time on Thursday, February 25, 2010. The dial-in number for the call is 877-419-6600 (toll-free) or 719-325-4839 (toll). The pass code for the call is 1151304. A replay of the call will be available from 3:00 p.m. ET on February 25 until 11:59 p.m. on Thursday, March 11. The replay number is 888-203-1112 (toll-free) or 719-457-0820 (toll). The pass code for the replay is 1151304.

* * * * * * * * *

About USA Mobility

USA Mobility, Inc., headquartered in Alexandria, Virginia, is a comprehensive provider of reliable and affordable wireless communications solutions to the healthcare, government, large enterprise and emergency response sectors. As a single-source provider, USA Mobility’s focus is on the business-to-business marketplace and supplying wireless connectivity solutions. The Company operates the largest one-way paging and advanced two-way paging networks in the United States. In addition, USA Mobility offers mobile voice and data services through Sprint Nextel, including BlackBerry® smartphones and GPS location applications. The Company’s product offerings include customized wireless connectivity systems for the healthcare, government and other campus environments. USA Mobility also offers M2M (machine-to-machine) telemetry solutions for numerous applications that include asset tracking, utility meter reading and other remote device monitoring applications on a national scale. For further information visit www.usamobility.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act: Statements contained herein or in prior press releases which are not historical fact, such as statements regarding USA Mobility’s future operating and financial performance, are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that may cause USA Mobility’s actual results to be materially different from the future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expectations include, but are not limited to, declining demand for paging products and services, the ability to continue to reduce operating expenses, future capital needs, competitive pricing pressures, competition from both traditional paging services and other wireless communications services, government regulation, reliance upon third-party providers for certain equipment and services, as well as other risks described from time to time in periodic reports and registration statements filed with the Securities and Exchange Commission. Although USA Mobility believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. USA Mobility disclaims any intent or obligation to update any forward-looking statements.

Tables to Follow

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(unaudited and in thousands, except share and per share amounts)

	For the three months ended
	3/31/08			6/30/08			9/30/08			12/31/08			3/31/09			6/30/09			9/30/09			12/31/09
Revenues:
Paging service	$	86,773		$	83,360		$	80,533		$	75,989		$	72,021		$	67,972		$	63,308		$	59,657
Cellular		1,859			1,547			1,494			993			991			775			980			795
Product sales		4,871			5,741			5,014			5,863			5,271			5,269			4,354			3,927
Other		1,255			1,427			1,316			1,413			1,408			1,129			856			993
Total revenues		94,758			92,075			88,357			84,258			79,691			75,145			69,498			65,372
Operating expenses:
Cost of products sold		1,081			1,408			1,291			1,812			1,669			1,421			1,593			1,513
Service, rental and maintenance		33,969			31,583			29,069			28,199			22,955			21,290			20,950			20,115
Selling and marketing		7,836			7,549			6,756			6,144			6,062			5,600			5,198			4,955
General and administrative		21,808			20,782			20,631			18,289			20,186			22,801			16,050			15,289
Severance and restructuring		145			153			5,063			(35	)		190			52			15			2,480
Depreciation, amortization and accretion		12,513			11,674			11,075			11,750			11,270			11,174			10,689			8,781
Goodwill impairment		188,170			—			—			—			—			—			—			—
Total operating expenses		265,522			73,149			73,885			66,159			62,332			62,338			54,495			53,133
% of total revenues		280.2	%		79.4	%		83.6	%		78.5	%		78.2	%		83.0	%		78.4	%		81.3	%
Operating (loss) income		(170,764	)		18,926			14,472			18,099			17,359			12,807			15,003			12,239
% of total revenues		-180.2	%		20.6	%		16.4	%		21.5	%		21.8	%		17.0	%		21.6	%		18.7	%
Interest income (expense), net		578			672			471			79			26			28			16			(1	)
Other income (expense), net		125			202			205			90			112			(42	)		185			275
(Loss) income before income tax expense (benefit)		(170,061	)		19,800			15,148			18,268			17,497			12,793			15,204			12,513
Income tax expense (benefit)		7,739			9,528			12,730			10,235			7,516			(31,953	)		6,003			8,883
Net (loss) income	$	(177,800	)	$	10,272		$	2,418		$	8,033		$	9,981			44,746		$	9,201		$	3,630
Basic net (loss) income per common share (b)	$	(6.48	)	$	0.37		$	0.09		$	0.32		$	0.43		$	1.96		$	0.40		$	0.16
Diluted net (loss) income per common share (b)	$	(6.48	)	$	0.37		$	0.09		$	0.32		$	0.43		$	1.93		$	0.40		$	0.16
Basic weighted average common shares outstanding		27,459,068			27,474,156			27,474,156			25,348,440			23,134,072			22,858,573			22,856,951			22,830,040
Diluted weighted average common shares outstanding		27,459,068			27,600,976			27,602,296			25,444,277			23,479,796			23,200,736			23,194,360			23,167,729
Reconciliation of operating (loss) income to EBITDA (c):
Operating (loss) income	$	(170,764	)	$	18,926		$	14,472		$	18,099		$	17,359		$	12,807		$	15,003		$	12,239
Add back: depreciation, amortization and accretion		12,513			11,674			11,075			11,750			11,270			11,174			10,689			8,781
Add back: goodwill impairment		188,170			—			—			—			—			—			—			—
EBITDA	$	29,919		$	30,600		$	25,547		$	29,849		$	28,629		$	23,981		$	25,692		$	21,020
% of total revenues		31.6	%		33.2	%		28.9	%		35.4	%		35.9	%		31.9	%		37.0	%		32.2	%

(a)	Slight variations in totals are due to rounding.
(b)	Basic and diluted net (loss) income per common share is computed independently for each period presented. As a result, the sum of the quarterly basic and diluted net (loss) income per common share for the years ended December 31, 2008 and 2009 may not equal the total computed for the year.
(c)	EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and goodwill impairment is a non-GAAP measure and is presented for analytical purposes only.

USA MOBILITY, INC.
UNITS IN SERVICE ACTIVITY (a)
(unaudited and in thousands)

	For the three months ended
	3/31/08			6/30/08			9/30/08			12/31/08			3/31/09			6/30/09			9/30/09			12/31/09
Units in service
Beginning units in service
Direct one-way		2,854			2,732			2,614			2,491			2,349			2,198			2,079			1,969
Direct two-way		221			207			196			184			171			157			147			141
Total direct		3,075			2,939			2,810			2,675			2,520			2,355			2,226			2,110
Indirect one-way		312			285			261			226			196			161			139			116
Indirect two-way		98			109			105			101			99			91			84			71
Total indirect		410			394			366			327			295			252			223			187
Total beginning units in service		3,485			3,333			3,176			3,002			2,815			2,607			2,449			2,297
Gross placements
Direct one-way		77			90			76			60			67			74			64			55
Direct two-way		8			11			8			7			6			7			9			5
Total direct		85			101			84			67			73			81			73			60
Indirect one-way		17			22			12			9			8			9			7			6
Indirect two-way		16			7			7			6			4			2			1			2
Total indirect		33			29			19			15			12			11			8			8
Total gross placements		118			130			103			82			85			92			81			68
Gross disconnects
Direct one-way		(199	)		(209	)		(199	)		(202	)		(218	)		(193	)		(174	)		(143	)
Direct two-way		(22	)		(21	)		(20	)		(20	)		(20	)		(17	)		(15	)		(13	)
Total direct		(221	)		(230	)		(219	)		(222	)		(238	)		(210	)		(189	)		(156	)
Indirect one-way		(44	)		(47	)		(47	)		(39	)		(43	)		(31	)		(30	)		(21	)
Indirect two-way		(5	)		(10	)		(11	)		(8	)		(12	)		(9	)		(14	)		(6	)
Total indirect		(49	)		(57	)		(58	)		(47	)		(55	)		(40	)		(44	)		(27	)
Total gross disconnects		(270	)		(287	)		(277	)		(269	)		(293	)		(250	)		(233	)		(183	)
Net gain (loss)
Direct one-way		(122	)		(119	)		(123	)		(142	)		(151	)		(119	)		(110	)		(88	)
Direct two-way		(14	)		(10	)		(12	)		(13	)		(14	)		(10	)		(6	)		(8	)
Total direct		(136	)		(129	)		(135	)		(155	)		(165	)		(129	)		(116	)		(96	)
Indirect one-way		(27	)		(25	)		(35	)		(30	)		(35	)		(22	)		(23	)		(15	)
Indirect two-way		11			(3	)		(4	)		(2	)		(8	)		(7	)		(13	)		(4	)
Total indirect		(16	)		(28	)		(39	)		(32	)		(43	)		(29	)		(36	)		(19	)
Total net change		(152	)		(157	)		(174	)		(187	)		(208	)		(158	)		(152	)		(115	)
Ending units in service
Direct one-way		2,732			2,614			2,491			2,349			2,198			2,079			1,969			1,881
Direct two-way		207			196			184			171			157			147			141			133
Total direct		2,939			2,810			2,675			2,520			2,355			2,226			2,110			2,014
Indirect one-way		285			261			226			196			161			139			116			101
Indirect two-way		109			105			101			99			91			84			71			67
Total indirect		394			366			327			295			252			223			187			168
Total ending units in service		3,333			3,176			3,002			2,815			2,607			2,449			2,297			2,182

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
AVERAGE REVENUE PER UNIT (ARPU) AND CHURN (a)
(unaudited)

	For the three months ended
	3/31/08			6/30/08			9/30/08			12/31/08			3/31/09			6/30/09			9/30/09			12/31/09
ARPU
Direct one-way	$	7.83		$	7.85		$	8.08		$	8.09		$	8.11		$	8.18		$	8.08		$	8.04
Direct two-way		23.68			23.90			23.78			23.77			23.68			23.62			23.42			23.59
Total direct		8.95			8.97			9.16			9.16			9.15			9.21			9.10			9.06
Indirect one-way		4.10			4.57			4.79			5.12			7.05			7.43			7.51			7.77
Indirect two-way		7.52			7.08			5.35			4.53			4.58			5.19			5.49			5.14
Total indirect		4.97			5.28			4.96			4.93			6.19			6.60			6.74			6.73
Total one-way		7.47			7.54			7.79			7.85			8.03			8.14			8.05			8.02
Total two-way		18.44			18.07			17.29			16.84			16.66			16.86			17.09			17.32
Total paging ARPU	$	8.49		$	8.54		$	8.69		$	8.71		$	8.86		$	8.96		$	8.89		$	8.88
Gross disconnect rate (b)
Direct one-way		-7.0	%		-7.6	%		-7.6	%		-8.1	%		-9.3	%		-8.8	%		-8.4	%		-7.2	%
Direct two-way		-10.2	%		-10.4	%		-10.2	%		-10.6	%		-11.8	%		-11.0	%		-10.2	%		-8.9	%
Total direct		-7.2	%		-7.8	%		-7.8	%		-8.3	%		-9.5	%		-8.9	%		-8.5	%		-7.3	%
Indirect one-way		-13.9	%		-16.4	%		-17.9	%		-17.3	%		-22.0	%		-19.4	%		-21.9	%		-18.9	%
Indirect two-way		-5.3	%		-8.8	%		-10.3	%		-7.7	%		-11.6	%		-9.1	%		-16.4	%		-8.5	%
Total indirect		-11.8	%		-14.3	%		-15.7	%		-14.3	%		-18.5	%		-15.6	%		-19.8	%		-14.9	%
Total one-way		-7.7	%		-8.5	%		-8.6	%		-8.9	%		-10.3	%		-9.5	%		-9.2	%		-7.9	%
Total two-way		-8.7	%		-9.8	%		-10.2	%		-9.6	%		-11.7	%		-10.3	%		-12.5	%		-8.8	%
Total paging gross disconnect rate		-7.7	%		-8.6	%		-8.7	%		-9.0	%		-10.4	%		-9.6	%		-9.5	%		-8.0	%
Net gain / loss rate (c)
Direct one-way		-4.3	%		-4.3	%		-4.7	%		-5.7	%		-6.4	%		-5.4	%		-5.3	%		-4.4	%
Direct two-way		-6.4	%		-5.2	%		-6.1	%		-6.8	%		-8.5	%		-6.4	%		-4.4	%		-5.5	%
Total direct		-4.4	%		-4.4	%		-4.8	%		-5.8	%		-6.6	%		-5.5	%		-5.2	%		-4.5	%
Indirect one-way		-8.5	%		-8.6	%		-13.2	%		-13.7	%		-17.8	%		-13.7	%		-16.9	%		-13.6	%
Indirect two-way		11.0	%		-2.4	%		-4.1	%		-1.5	%		-8.2	%		-7.2	%		-14.9	%		-5.2	%
Total indirect		-3.9	%		-6.9	%		-10.6	%		-10.0	%		-14.6	%		-11.3	%		-16.1	%		-10.4	%
Total one-way		-4.7	%		-4.8	%		-5.5	%		-6.4	%		-7.3	%		-6.0	%		-6.0	%		-5.0	%
Total two-way		-1.1	%		-4.2	%		-5.4	%		-4.9	%		-8.4	%		-6.7	%		-8.2	%		-5.4	%
Total paging net gain / loss rate		-4.4	%		-4.7	%		-5.5	%		-6.2	%		-7.4	%		-6.0	%		-6.2	%		-5.0	%

(a)	Slight variations in totals are due to rounding.
(b)	Gross disconnect rate is current period disconnected units divided by prior period ending units in service.
(c)	Net gain / loss rate is net current period placements and disconnected units in service divided by prior period ending units in service.

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION BY MARKET SEGMENT (a)
(unaudited)

	For the three months ended
	3/31/08			6/30/08			9/30/08			12/31/08			3/31/09			6/30/09			9/30/09			12/31/09
Gross placement rate (b)
Healthcare		3.3	%		4.8	%		3.8	%		3.0	%		3.7	%		4.4	%		3.8	%		3.4	%
Government		2.2	%		2.1	%		2.2	%		2.1	%		1.7	%		2.4	%		2.4	%		1.9	%
Large enterprise		2.4	%		2.3	%		2.2	%		2.1	%		2.4	%		2.2	%		3.3	%		2.2	%
Other		2.5	%		2.6	%		2.4	%		2.2	%		2.4	%		2.5	%		2.3	%		2.2	%
Total direct		2.8	%		3.4	%		3.0	%		2.5	%		2.9	%		3.4	%		3.3	%		2.8	%
Total indirect		8.0	%		7.4	%		5.1	%		4.4	%		3.9	%		4.3	%		3.7	%		4.5	%
Total		3.4	%		3.9	%		3.2	%		2.7	%		3.0	%		3.5	%		3.3	%		3.0	%
Gross disconnect rate (b)
Healthcare		-5.1	%		-5.8	%		-6.0	%		-6.4	%		-6.8	%		-6.2	%		-6.7	%		-5.5	%
Government		-6.7	%		-8.5	%		-8.5	%		-9.3	%		-9.9	%		-10.7	%		-10.7	%		-9.4	%
Large enterprise		-8.6	%		-9.2	%		-9.2	%		-8.9	%		-13.3	%		-13.0	%		-10.7	%		-9.4	%
Other		-10.7	%		-10.5	%		-10.1	%		-11.4	%		-13.0	%		-12.4	%		-10.6	%		-10.1	%
Total direct		-7.2	%		-7.8	%		-7.8	%		-8.3	%		-9.5	%		-8.9	%		-8.5	%		-7.3	%
Total indirect		-11.8	%		-14.3	%		-15.7	%		-14.3	%		-18.5	%		-15.6	%		-19.8	%		-14.9	%
Total		-7.7	%		-8.6	%		-8.7	%		-9.0	%		-10.4	%		-9.6	%		-9.5	%		-8.0	%
Net loss rate (b)
Healthcare		-1.7	%		-0.9	%		-2.1	%		-3.4	%		-3.1	%		-1.8	%		-2.9	%		-2.1	%
Government		-4.5	%		-6.4	%		-6.3	%		-7.1	%		-8.2	%		-8.4	%		-8.3	%		-7.5	%
Large enterprise		-6.2	%		-6.9	%		-7.0	%		-6.8	%		-10.9	%		-10.9	%		-7.4	%		-7.2	%
Other		-8.2	%		-7.9	%		-7.8	%		-9.2	%		-10.6	%		-10.0	%		-8.3	%		-7.9	%
Total direct		-4.4	%		-4.4	%		-4.8	%		-5.8	%		-6.6	%		-5.5	%		-5.2	%		-4.5	%
Total indirect		-3.9	%		-6.9	%		-10.6	%		-10.0	%		-14.6	%		-11.3	%		-16.1	%		-10.4	%
Total		-4.4	%		-4.7	%		-5.5	%		-6.2	%		-7.4	%		-6.0	%		-6.2	%		-5.0	%
End of period units in service % of total (b)
Healthcare		38.3	%		40.0	%		41.5	%		42.8	%		44.9	%		49.8	%		51.5	%		53.2	%
Government		17.9	%		17.7	%		17.6	%		17.4	%		17.2	%		15.6	%		15.3	%		14.9	%
Large enterprise		13.1	%		12.8	%		12.6	%		12.5	%		12.0	%		11.8	%		11.8	%		11.4	%
Other		18.9	%		18.0	%		17.4	%		16.8	%		16.2	%		13.7	%		13.2	%		12.8	%
Total direct		88.2	%		88.5	%		89.1	%		89.5	%		90.3	%		90.9	%		91.8	%		92.3	%
Total indirect		11.8	%		11.5	%		10.9	%		10.5	%		9.7	%		9.1	%		8.2	%		7.7	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(a)	Slight variations in totals are due to rounding.
(b)	Changes in the classification of units in service are reflected in the quarter when such changes are identified. Such changes are then appropriately reflected in calculating the gross placement, gross disconnect and net loss rates.

USA MOBILITY, INC.
SUPPLEMENTAL INFORMATION — DIRECT UNITS IN SERVICE AND CELLULAR ACTIVATIONS (a)
(unaudited)

	For the three months ended
	3/31/08			6/30/08			9/30/08			12/31/08			3/31/09			6/30/09			9/30/09			12/31/09
Account size ending units in service (000’s)
1 to 3 units		184			172			159			149			137			126			118			109
4 to 10 units		112			104			97			89			82			75			70			66
11 to 50 units		276			255			236			218			199			183			168			158
51 to 100 units		164			155			144			133			125			112			104			97
101 to 1,000 units		784			750			716			681			626			580			546			519
>1,000 units		1,419			1,374			1,323			1,250			1,186			1,150			1,104			1,065
Total		2,939			2,810			2,675			2,520			2,355			2,226			2,110			2,014
End of period units in service % of total direct
1 to 3 units		6.2	%		6.1	%		5.9	%		5.9	%		5.8	%		5.7	%		5.6	%		5.4	%
4 to 10 units		3.8	%		3.7	%		3.6	%		3.5	%		3.5	%		3.4	%		3.3	%		3.3	%
11 to 50 units		9.4	%		9.1	%		8.8	%		8.7	%		8.4	%		8.2	%		8.0	%		7.8	%
51 to 100 units		5.6	%		5.5	%		5.4	%		5.3	%		5.3	%		5.0	%		4.9	%		4.8	%
101 to 1,000 units		26.7	%		26.7	%		26.8	%		27.0	%		26.6	%		26.0	%		25.9	%		25.8	%
>1,000 units		48.3	%		48.9	%		49.5	%		49.6	%		50.4	%		51.7	%		52.3	%		52.9	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Account size net loss rate
1 to 3 units		-7.8	%		-6.9	%		-7.0	%		-6.9	%		-7.8	%		-7.9	%		-6.9	%		-7.4	%
4 to 10 units		-6.5	%		-7.2	%		-6.7	%		-7.8	%		-8.8	%		-7.9	%		-6.7	%		-6.1	%
11 to 50 units		-7.6	%		-7.4	%		-7.4	%		-7.6	%		-8.9	%		-8.2	%		-7.7	%		-5.9	%
51 to 100 units		-6.9	%		-5.5	%		-7.5	%		-7.2	%		-6.2	%		-10.1	%		-7.6	%		-6.8	%
101 to 1,000 units		-5.2	%		-4.3	%		-4.6	%		-4.9	%		-8.0	%		-7.4	%		-5.9	%		-4.9	%
>1,000 units		-2.4	%		-3.2	%		-3.7	%		-5.5	%		-5.1	%		-3.1	%		-4.0	%		-3.5	%
Total		-4.4	%		-4.4	%		-4.8	%		-5.8	%		-6.6	%		-5.5	%		-5.2	%		-4.5	%
Account size ARPU
1 to 3 units	$	14.66		$	14.62		$	14.72		$	14.68		$	14.73		$	15.07		$	14.98		$	15.03
4 to 10 units		13.56			13.56			13.92			13.89			14.00			14.30			14.24			14.21
11 to 50 units		10.99			11.03			11.40			11.35			11.41			11.65			11.54			11.45
51 to 100 units		9.57			9.76			10.36			10.25			10.30			10.13			10.06			10.06
101 to 1,000 units		8.23			8.45			8.91			8.98			8.94			9.04			8.89			8.82
>1,000 units		7.75			7.70			7.72			7.75			7.77			7.80			7.76			7.79
Total	$	8.95		$	8.97		$	9.16		$	9.16		$	9.15		$	9.21		$	9.10		$	9.06
Cellular revenue
Number of activations		4,509			3,970			3,779			2,287			2,389			2,207			2,633			2,253
Revenue from cellular services (000’s)	$	1,859		$	1,547		$	1,494		$	993		$	991		$	775		$	980		$	795

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
CONSOLIDATED OPERATING EXPENSES SUPPLEMENTAL INFORMATION (a)
(unaudited and in thousands)

	For the three months ended
	3/31/08		6/30/08		9/30/08		12/31/08			3/31/09		6/30/09		9/30/09			12/31/09
Cost of products sold	$	1,081	$	1,408	$	1,291	$	1,812		$	1,669	$	1,421	$	1,593		$	1,513
Service, rental and maintenance
Site rent		17,792		16,756		15,463		14,785			11,218		10,223		10,422			9,871
Telecommunications		6,204		5,503		5,072		5,307			4,485		4,284		3,945			3,885
Payroll and related		6,683		6,504		5,827		5,490			5,631		5,286		4,988			4,725
Stock based compensation		17		19		19		18			49		7		13			12
Other		3,273		2,801		2,688		2,599			1,572		1,490		1,582			1,622
Total service, rental and maintenance		33,969		31,583		29,069		28,199			22,955		21,290		20,950			20,115
Selling and marketing
Payroll and related		5,164		4,797		4,317		4,145			4,175		3,711		3,366			3,199
Commissions		1,724		2,037		1,742		1,213			1,201		1,422		1,328			1,131
Stock based compensation		39		50		49		60			109		26		26			26
Other		909		665		648		726			577		441		478			599
Total selling and marketing		7,836		7,549		6,756		6,144			6,062		5,600		5,198			4,955
General and administrative
Payroll and related		8,682		8,129		7,847		7,992			9,075		7,754		7,213			7,089
Stock based compensation		190		247		253		298			569		241		241			241
Bad debt		711		691		680		618			850		750		699			654
Facility rent		2,073		2,199		1,937		1,689			1,628		1,446		1,457			1,411
Telecommunications		1,048		983		936		834			771		721		720			702
Outside services		5,359		4,584		4,632		4,519			4,514		4,063		3,269			3,051
Taxes, licenses and permits		1,958		2,055		2,216		372			1,101		1,695		(680	)		660
Other		1,787		1,894		2,130		1,967			1,678		6,131		3,131			1,481
Total general and administrative		21,808		20,782		20,631		18,289			20,186		22,801		16,050			15,289
Severance and restructuring		145		153		5,063		(35	)		190		52		15			2,480
Depreciation, amortization and accretion		12,513		11,674		11,075		11,750			11,270		11,174		10,689			8,781
Goodwill impairment		188,170		—		—		—			—		—		—			—
Operating expenses	$	265,522	$	73,149	$	73,885	$	66,159		$	62,332	$	62,338	$	54,495		$	53,133
Capital expenses	$	3,988	$	3,892	$	6,214	$	4,242		$	6,054	$	4,355	$	1,806		$	5,014

(a) Slight variations in totals are due to rounding.

USA MOBILITY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	12/31/08		12/31/09
Assets
Current assets:
Cash and cash equivalents	$	75,032	$	109,591
Accounts receivable, net		25,118		19,051
Tax receivables		—		5,117
Prepaid expenses and other		6,226		3,016
Deferred income tax assets, net		6,025		1,068
Total current assets		112,401		137,843
Property and equipment, net		57,867		41,295
Intangible assets, net		6,520		226
Deferred income tax assets, net		59,599		32,123
Other assets		4,973		2,061
Total assets	$	241,360	$	213,548
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	40,983	$	35,214
Customer deposits		1,203		888
Deferred revenue		9,958		7,422
Total current liabilities		52,144		43,524
Other long-term liabilities		48,478		11,228
Total liabilities		100,622		54,752
Stockholders’ equity:
Preferred stock		—		—
Common stock		2		2
Additional paid-in capital		140,736		137,378
Retained earnings		—		21,416
Total stockholders’ equity		140,738		158,796
Total liabilities and stockholders’ equity	$	241,360	$	213,548

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	For the twelve months ended
	12/31/08			12/31/09
Cash flows from operating activities:
Net (loss) income	$	(157,077	)	$	67,558
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion		47,012			41,914
Goodwill impairment		188,170			—
Deferred income tax expense		36,831			32,433
Amortization of stock based compensation		1,259			1,560
Provisions for doubtful accounts, service credits and other		5,851			4,515
Non-cash transaction tax accrual adjustments		(5,499	)		(7,218	)
Loss on disposals of property and equipment		48			2
Changes in assets and liabilities:
Accounts receivable		(2,925	)		1,553
Prepaid expenses and other		3,167			(2,062	)
Intangibles and other long-term assets		4,279			1,628
Accounts payable and accrued liabilities		(12,586	)		482
Customer deposits and deferred revenue		(2,490	)		(2,851	)
Other long-term liabilities		—			(37,654	)
Net cash provided by operating activities		106,040			101,860
Cash flows from investing activities:
Purchases of property and equipment		(18,336	)		(17,229	)
Proceeds from disposals of property and equipment		179			168
Net cash used in investing activities		(18,157	)		(17,061	)
Cash flows from financing activities:
Cash distributions to stockholders		(39,061	)		(45,502	)
Purchase of common stock		(38,332	)		(4,738	)
Net cash used in financing activities		(77,393	)		(50,240	)
Net increase in cash and cash equivalents		10,490			34,559
Cash and cash equivalents, beginning of period		64,542			75,032
Cash and cash equivalents, end of period	$	75,032		$	109,591
Supplemental disclosure:
Interest paid	$	11		$	2
Income taxes paid (state and local)	$	462		$	447

USA MOBILITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)

	For the year ended December 31,
	2008			2009
Revenue:
Paging service	$	326,655		$	262,958
Cellular		5,893			3,541
Product sales		21,489			18,821
Other		5,411			4,386
Total revenue		359,448			289,706
Operating expenses:
Cost of products sold		5,592			6,196
Service, rental and maintenance		122,820			85,310
Selling and marketing		28,285			21,815
General and administrative		81,510			74,326
Severance and restructuring		5,326			2,737
Depreciation, amortization and accretion		47,012			41,914
Goodwill impairment		188,170			—
Total operating expenses		478,715			232,298
% of total revenue		133.2	%		80.2	%
Operating (loss) income		(119,267	)		57,408
% of total revenue		-33.2	%		19.8	%
Interest income, net		1,800			69
Other income, net		622			530
(Loss) income before income tax expense (benefit)		(116,845	)		58,007
Income tax expense (benefit)		40,232			(9,551	)
Net (loss) income	$	(157,077	)	$	67,558
Basic net (loss) income per common share	$	(5.83	)	$	2.95
Diluted net (loss) income per common share	$	(5.83	)	$	2.90
Basic weighted average common shares outstanding		26,936,072			22,918,904
Diluted weighted average common shares outstanding		26,936,072			23,260,431
Reconciliation of operating (loss) income to EBITDA (a):
Operating (loss) income	$	(119,267	)	$	57,408
Add back: depreciation, amortization and accretion		47,012			41,914
Add back: goodwill impairment		188,170			—
EBITDA	$	115,915		$	99,322
% of total revenue		32.2	%		34.3	%

(a) EBITDA or earnings before interest, taxes, depreciation, amortization, accretion and goodwill impairment is a non-GAAP measure and is presented for analytical purposes only.