Used multiple valuation methodologies to establish 12-month bull, bear, and base case target prices for Dolby Laboratories.

1. Dolby Laboratories, Inc.
Maxwell Damaska | Jacob Grandstaff | Cianan Moore | Matthew Thomas
January 2017

2. Table of Contents
Investment Thesis 3
Company Overview 4
Industry Dynamics 6
Growth Opportunities & Drivers 7
Valuation & Final Thoughts 11
Appendix 16
2

3. Investment Thesis
3
Catalysts
§ Further expansion of partnerships with cinemas and content creators
§ Expanding product lines becoming the industry standard in television and cinema technologies
§ Chinese revenue growth stemming from planned partnerships and improving IP standards
Market Misconceptions
§ Market has priced in existence of current partnerships, but not the expansion opportunity
§ Market has yet to realize the revenue impact of Dolby’s role in the standardization of 4K TVs
§ Unrealistic fear of intellectual property theft by Chinese electronic manufacturers
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Recommendation: Buy Holding Period: 12 Months Current Price: $48.60
$64.00
31.69% Upside
Base
$72.00
48.15% Upside
Bull
$55.00
13.17% Upside
Bear

4. Company Overview
§ Dolby Laboratories (NYSE: DLB)
• Founded in 1965
• Headquartered in San Francisco, CA
• Over 2,000 employees
§ Develop audio, video and voice technologies
§ Transform entertainment and communications in mobile
devices, at the cinema, at home and at work
Company Description
Performance Historical and Projected Revenue
Key Statistics
MarketData
Current Price $48.60
Market Cap. $4.96B
Forward P/E 26.31x
Price/Book 2.45x
Operations
TTM Revenue $1.03B
Profit Margin 18.2%
Diluted EPS $1.81
Cap.Structure
Net Debt $0
Cash/Equiv. $647.74M
Current Ratio 3.57x
Quick Ratio 3.37x
Value
EV/Revenue 4.19x
EV/EBITDA 13.51x
EV/FCF 9.55x
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
$0
$10
$20
$30
$40
$50
$60
1/6/16 4/6/16 7/6/16 10/6/16 1/6/17
Millions
Source: Bloomberg, Yahoo Finance, Company 10-K
4
- -
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2015 2016 2017E 2018E 2019E 2020E 2021E

5. Operations Breakdown
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Revenue
§ Design and manufacture
audio and imaging
products for various
industries
• Cinema: 98%
• Broadcast and Other:
2%
§ Distributed in over 80
countries
Products
§ Offer various services
that support:
• Theatrical production
• Television production
Services
United States
33% of 2016 Revenue
International
67% of 2016 Revenue
§ Two forms:
• One-time fee paid by
semiconductor/softwar
e companies for using
Dolby’s technology in
designing their
products
• Royalty payments
based on the number
of consumer electronic
units sold
Licensing
9% 89% 2%
Source: Bloomberg, Yahoo Finance, Company 10-K
5

6. Competitive Landscape
§ Licensing revenue segment:
• Strong dependence on the patent portfolio held by the
competing firms
• This suggests competition is along product differentiation
and exclusivity rather than cost
• Competitors:
§ Product segment:
• Segment demand is dependent on how closely competitors
work with the content creators and the discounts offered on
products
• Price is one of the underlying factors
• Competitors:
Segment Focus
Licensing Segment Profit Margin Analysis
R&D as a % of Revenue Among Competitors
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview 21%
28%
22%
7%
4% 4%
0%
10%
20%
30%
40%
50%
Dolby DTS Qualcomm Sony Technicolor
SA
IMAX
23%
-9%
13%
2%
8%
42%
-10%
0%
10%
20%
30%
40%
50%
Dolby Qualcomm Sony Technicolor
SA
IMAX
DTS
Source: Bloomberg, Company Filings
6

7. New Partnerships
§ Combines Dolby Vision and Dolby Atmos
§ Compete with formats such as IMAX and other
premium large format packages
§ Helping Dolby become a tech company in the field of
media and entertainment
§ Dolby Vision and Atmos used in the production of
several major movies in 2015 and 2016
• Expected to be used in major blockbusters of 2017
7
Dolby Cinema
§ Dolby and AMC Entertainment partnership to offer
movie goers a captivating experience
• Driven by Dolby Vision laser projection and Dolby Atmos
surround-sound
§ Last year, AMC announced plans to begin converting
large format auditoriums to meet Dolby Cinema
specifications
• Positive early reactions from filmmakers and moviegoers
§ Recently finished the 50th AMC theatre with an
additional 50 planned for 2017
Notable Cinema Partnerships
§ Content incorporating Dolby Vision is now available
from all major movie studies
Working with Content Creators
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview

8. 4K TV Product Integration
8
§ Dolby Vision is currently supported on select LG Ultra
HD 4K TVs
• LG 4K OLED TVs will begin supporting both Dolby
Vision and Dolby Atmos technologies in 2017
§ VIZIO is including Dolby Vision in their R, P, and M
Series
§ TCL and Skyworth now shipping TVs with Dolby Vision
§ Hisense recently announced their 4K Ultra HD Roku TV
model
Integration
GlobalTelevision Market Share by Manufacturer
§ Due to superior quality, Ultra HD 4K TVs will eventually
replace HD TVs after emerging as the industry standard
• Beginning phase of standardization
§ With major Chinese television manufacturer
partnerships, Dolby has positioned themselves to be on
the forefront of the 4K TV standardization in China
Standardization
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
23%
14%
6% 6% 5% 5% 4% 4% 4%

9. Chinese Market and Opportunities
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
9
§ In the past year, China Telecom and China Unicom launched
services with Dolby products
§ TCL, Skyworth, and LeEco have begun shipping Dolby
Vision Televisions in China
§ Wanda Cinemas currently operates 4 theaters with Dolby
technology and has announced plans to build 100 additional
theaters
§ Jackie Chan studios currently only has one Dolby cinema and
it has become the top grossing theater in China
• Jackie Chan Cinemas has announced plans of opening an
additional 10 Dolby Cinema locations
Growing Chinese Cinema Partnerships
6%
9%
13%
7%
14%
2012 2013 2014 2015 2016
Revenue Concentration in China
$4
$6
$8
$10
$12
$14
$16
2015 2016 2017E 2018E 2019E 2020E
US China
Cinema Revenue Growth Box Office Sales in USD
$-
$4
$8
$12
$16
$20
Billions$
US China

10. Improving Intellectual Property Standards
§ President Trump has announced a “Zero-Tolerance”
policy with Chinese Intellectual Property Theft
§ Enforced through negotiation with the WTO
10
United States PolicyTowards IP Rights
§ 6,600 Patents
§ 4,200 Pending Patents
§ Dolby is in the process of transitioning their patents
from their Dolby Digital technology to their Dolby
Digital Plus
Patent Profile
§ Realizing a more significant portion of lost licensing
revenue due to favorable intellectual property regulation
changes
§ Expanding revenue and market share within the product
and licensing segments in China
• Dolby Vision becoming the imaging standard for major
Chinese TV manufactures
Moving Forward
§ Fastest growing patent office worldwide
§ China’s SIPO has already begun to revamp the patent
application and granting processes
China’s PolicyTowards IP Rights
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview

11. 30 40 50 60 70 80 90 100
Bear Case DCF - PPG
Public Comparables - EV/EBITDA
Base Case DCF - PPG
Bear Case DCF - Exit Multiple
Public Comparables - P/E
Bull Case DCF - PPG
Base Case DCF - Exit Multiple
Bull Case DCF - Exit Multiple
Tier 1 Comparables - P/E
Tier 1 Comparables - EV/EBITDA
Valuation Summary
Current Price:
$48.60
Bear Case:
$55.00
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Team Projections
11
Bull Case:
$72.00
Base Case:
$64.00

12. ($ in millions) General
Market
Valuation LTM Financial Statistics Enterprise Value /
Company Name Ticker
Share
Price
% of 52-
wk. High
Market
Cap
Enterprise
Value Sales EBITDA
Net
Income Sales EBITDA Forward P/E1
2014E
EPS
2015E
EPS
LTM
EPS
Tier 1
DTS, Inc. DTSI US Acquired Acquired Acquired 487 138 24 -12 3.5x 19.3x 17.2x 1.6x -0.7x N/A
IMAX Corp. IMAX US $32.05 90.79% 2,142 2,010 390 123 45 5.2x 16.3x 29.3x 0.6x 0.8x 0.6x
Tier 2
Qualcomm
QCOM
US $65.52 91.48% 96,780 76,177 23,554 8,040 5,723 3.2x 9.5x 13.8x 4.6x 3.8x 3.8x
Sony SNE US $28.96 84.75% 4,189 4,434 7,707 670 105 0.6x 6.6x 19.0x -41.3x 60.7x 71.0x
Technicolor SA TCH FP $5.35 73.94% 2,209 3,066 3,846 587 203 0.8x 5.2x 11.3x 0.6x 0.5x N/A
Dolby
Laboratories DLB US $48.60 88.33% 4,852 4,223 1,026 318 187 4.1x 13.3x 18.8x $2.01 $1.75 $1.82
3rd
Quartile 4,434 7,707 670 203 3.5x 16.3x 19.0x $1.58 $3.84 $37.40
Median $30.51 87.77% 3,199 3,066 3,846 587 105 3.2x 9.5x 17.2x $0.60 $0.79 $3.78
Mean $32.97 85.24% 26,330 17,235 7,127 1,889 1,213 2.7x 11.4x 18.1x ($6.79) $13.02 $25.15
1st
Quartile 3,934 3,141 520 166 0.7x 6.6x 13.8x ($9.90) $1.44 $2.80
Comparables Analysis
EV/EBITDA
DTS, Inc. IMAX Corp.
19.3x 16.3x
Implied Valuation 96.52 79.95
Upside 101.8% 67.1%
Price/Earnings
DTS, Inc. IMAX Corp.
17.2x 29.3x
Implied Valuation 56.49 96.22
Upside 18.1% 101.1%
Tier 1 ImpliedValuation Tier 2 ImpliedValuation
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Team Projections, Bloomberg, Yahoo Finance, Company 10-K, Company Filings
12
EV/EBITDA
1st Quartile Median Mean 3rd Quartile
6.6x 9.5x 11.4x 16.3x
Implied Valuation 25.76 41.69 52.38 79.95
Upside (46.2%) (12.9%) 9.5% 67.1%
Price/Earnings
1st Quartile Median Mean 3rd Quartile
13.8x 17.2x 18.1x 19.0x
Implied Valuation 45.33 56.49 59.46 62.26
Upside (5.3%) 18.1% 24.3% 30.1%

13. Discounted Cash Flow
Sensitivity Analysis: EBITDA Exit Multiple Sensitivity Analysis: Perpetuity Growth Rate
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Team Projections
13
Sensitivity Analysis EBITDA Exit Multiple
Exit Multiple
$65.89 0.0x 0.0x 11.4x 0.0x 0.0x
WACC
8.1% 13.46 13.46 67.30 13.46 13.46
8.4% 13.37 13.37 66.59 13.37 13.37
8.6% 13.28 13.28 $65.89 13.28 13.28
8.9% 13.19 13.19 65.20 13.19 13.19
9.1% 13.10 13.10 64.52 13.10 13.10
Sensitivity Analysis of Perpetuity Growth Rate
Perpetuity Growth Rate
$50.72 1.50% 1.75% 2.00% 2.25% 2.50%
WACC
8.1% 51.59 53.19 54.92 56.80 58.85
8.4% 49.68 51.15 52.74 54.46 56.32
8.6% 47.90 49.26 $50.72 52.29 53.99
8.9% 46.25 47.50 48.85 50.29 51.85
9.1% 44.70 45.86 47.10 48.44 49.87
Projected
2017 2018 2019 2020 2021
Years 1.0 2.0 3.0 4.0 5.0
Revenue $1,078,051 $1,131,953 $1,188,551 $1,247,978 $1,310,377
Less: Operating Expenses 837,596 879,476 923,450 969,623 1,018,104
Operating Profit $240,454 $252,477 $265,101 $278,356 $292,274
Taxes 55,315 58,081 60,985 64,034 67,236
Tax-Effected EBIT $185,139 $194,396 $204,116 $214,322 $225,038
Plus: Depreciation & Amortization $89,545 $94,022 $98,724 $103,660 $108,843
Less: Change in NWC (3,755) (3,913) (4,108) (4,314) (4,529)
Less: Capex (97,025) (101,876) (106,970) (112,318) (117,934)
FCF $173,905 $182,630 $191,762 $201,350 $211,417
Present Value $160,107 $154,801 $149,645 $144,662 $139,844
Present Value of Projection Period 749,059

14. S W
O T
Positioning Analysis
§ Global shift towards digital television
standards will drive broadcasting licensing
growth
§ Strong relationship with its content
creators
• Increasing number of films using Dolby
Atmos and Dolby Vision technologies
§ Face exposure to adverse movements in
currency exchange rates
• 67% of revenue comes from international
operations
§ No binding contract on the content
creators to use Dolby
§ Unrealized licensing revenue due to weak
intellectual property protection
§ Lack of diversification among business
segments
• Heavily reliant on licensing segment
§ Ability of smart TV platforms to support
Dolby Atmos
§ The Wanda Cinema Line has committed
to install Dolby Atmos and Dolby Vision
in over 200 theatres across the U.S. and
China in the next 5 years
§ 4,200 pending patents as they transition
from Dolby Digital to next generation
Dolby Digital Plus
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Team Projections, Bloomberg, Company Filings
14

15. Final Thoughts
§ Further expansion of partnerships with
cinemas and content creators
Market has priced in existence of current
partnerships,but not the expansion opportunity
Partnership Expansion
Recommendation
Valuation Range
§ Chinese revenue growth stemming from
planned partnerships and improving IP
standards
Unrealistic fear of intellectual property theft by Chinese
electronic manufacturers
Continued Chinese Market Penetration
§ Expanding product lines becoming the
industry standard in television and cinema
technologies
Market has yet to realize the revenue impact of
Dolby’s role in the standardization of 4KTVs
Next Generation Product Lines
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Team Projections, Company 10-K
15
30 40 50 60 70 80 90 100
Bear Case DCF - PPG
Public Comparables - EV/EBITDA
Base Case DCF - PPG
Bear Case DCF - Exit Multiple
Public Comparables - P/E
Bull Case DCF - PPG
Base Case DCF - Exit Multiple
Bull Case DCF - Exit Multiple
Tier 1 Comparables - P/E
Tier 1 Comparables - EV/EBITDA
$64.00
31.69% Upside
Base
$72.00
48.15% Upside
Bull
$55.00
13.17% Upside
Bear

16. Appendix Table of Contents
§ Pro Forma Income Statement
§ Pro Forma Balance Sheet
§ Pro Forma Statement of Cash Flows
§ Discounted Cash Flow
§ Comparables
§ WACC Calculation
§ Notable Partnerships
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
16

17. Pro Forma Income Statement
Source: Team Projections, Bloomberg, Yahoo Finance, Company 10-K, Company Filings
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
17
Historicals Projected
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenue $933,014 $909,674 $960,176 $970,638 $1,025,738 $1,078,051 $1,131,953 $1,188,551 $1,247,978 $1,310,377
YoY Growth (2.5%) 5.6% 1.1% 5.7% 5.1% 5.0% 5.0% 5.0% 5.0%
Cost of Goods and Services 92,027 96,719 70,176 94,816 108,982 118,586 124,515 130,741 137,278 144,142
Gross Profit $840,987 $812,955 $890,000 $875,822 $916,756 $959,465 $1,007,438 $1,057,810 $1,110,701 $1,166,236
Sales & Marketing $188,486 $231,103 $252,647 $279,174 $295,267 $310,326 $325,842 $342,134 $359,241 $377,203
General & Administrative 149,175 161,970 178,104 182,176 168,854 177,878 186,772 196,111 205,916 216,212
Research & Development 140,143 168,746 183,128 201,324 219,607 230,807 242,347 254,465 267,188 280,547
Restructuring Charges 1,191 5,874 2,403 (80) 1,233 - - - - - - - - - -
Operating Income $361,992 $245,262 $273,718 $213,228 $231,795 $240,454 $252,477 $265,101 $278,356 $292,274
Interest Expense, Net ($6,215) ($3,273) ($3,527) ($4,361) ($5,559) ($5,390) ($5,660) ($5,943) ($6,240) ($6,552)
Other Non-operating (Income) Loss (784) (2,111) 1,146 (28,193) 1,450 - - - - - - - - - -
EBT $368,991 $250,646 $276,099 $245,782 $235,904 $245,844 $258,137 $271,043 $284,596 $298,825
Taxes 103,857 60,344 67,379 62,542 49,502 55,315 58,081 60,985 64,034 67,236
Net Income $265,134 $190,302 $208,720 $183,240 $186,402 $190,529 $200,056 $210,059 $220,562 $231,590
Metrics & Drivers
Gross Margin 90.1% 89.4% 92.7% 90.2% 89.4% 89.0% 89.0% 89.0% 89.0% 89.0%
Operating Margin 38.8% 27.0% 28.5% 22.0% 22.6% 22.3% 22.3% 22.3% 22.3% 22.3%
Sales & Marketing as % of Revenue 20.2% 25.4% 26.3% 28.8% 28.8% 28.8% 28.8% 28.8% 28.8% 28.8%
G&A as % of Revenue 16.0% 17.8% 18.5% 18.8% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5%
R&D as % of Revenue 15.0% 18.6% 19.1% 20.7% 21.4% 21.4% 21.4% 21.4% 21.4% 21.4%
Restructuring Charges as % 0.1% 0.6% 0.3% (0.0%) 0.1% - - - - - - - - - -
Interest Expense, Net as % (0.7%) (0.4%) (0.4%) (0.4%) (0.5%) (0.5%) (0.5%) (0.5%) (0.5%) (0.5%)
Other Non-operating loss as % (0.1%) (0.2%) 0.1% (2.9%) 0.1% - - - - - - - - - -
Tax Rate 28.1% 24.1% 24.4% 25.4% 21.0% 22.5% 22.5% 22.5% 22.5% 22.5%

18. Pro Forma Balance Sheet
Source: Team Projections, Bloomberg, Yahoo Finance, Company 10-K, Company Filings
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
18
Historical Projected
2015 2016 2017 2018 2019 2020 2021
Cash $ 531,926 $ 516,112 $543,281 $626,334 $713,540 $805,106 $901,251
Restricted cash 2,936 3,645 3,645 3,645 3,645 3,645 3,645
Short-term investments 138,901 121,629 121,629 121,629 121,629 121,629 121,629
Accounts Receivable 101,563 75,688 79,548 83,525 87,702 92,087 96,691
Inventories 13,872 16,354 17,795 18,685 19,619 20,600 21,630
Prepaid and Other 32,031 26,302 26,302 26,302 26,302 26,302 26,302
Total Current Assets $ 821,229 $ 759,730 $792,201 $880,121 $972,437 $1,069,369 $1,171,148
Long-term investments $321,015 $393,904 $393,904 $393,904 $393,904 $393,904 $393,904
Property, plant and equipment, net 403,091 443,656 486,029 530,520 577,235 626,287 677,791
Intangible assets, net 127,507 215,342 223,571 232,211 241,283 250,809 260,811
Goodwill 307,708 309,616 309,616 309,616 309,616 309,616 309,616
Deferred taxes 143,279 166,790 166,790 166,790 166,790 166,790 166,790
Other non-current assets 9,464 21,068 21,068 21,068 21,068 21,068 21,068
Total Assets $ 2,133,293 $ 2,310,106 $ 2,393,178 $ 2,534,230 $ 2,682,334 $ 2,837,844 $ 3,001,129
Accounts payable $20,710 $17,544 $19,090 $20,044 $21,047 $22,099 $23,204
Accrued liabilities 169,307 169,055 169,055 169,055 169,055 169,055 169,055
Income taxes payable 754 2,304 2,304 2,304 2,304 2,304 2,304
Deferred revenue 18,910 24,180 24,180 24,180 24,180 24,180 24,180
Total current liabilities $209,681 $213,083 $214,629 $215,583 $216,586 $217,638 $218,743
Long-term deferred revenue $30,581 $35,366 $35,366 $35,366 $35,366 $35,366 $35,366
Other non-current liabilities 77,024 82,922 82,922 82,922 82,922 82,922 82,922
Total Liabilities $317,286 $331,371 $332,917 $333,871 $334,874 $335,926 $337,031
Stockholder's Equity - Dolby $1,807,068 $1,970,256
Controlling interest 8,939 8,479
Total Stockholders’ Equity $1,816,007 $1,978,735 $2,060,261 $2,200,358 $2,347,460 $2,501,918 $2,664,098
Total Liabilities and Equity $2,133,293 $2,310,106 $2,393,178 $2,534,230 $2,682,334 $2,837,844 $3,001,129

19. Pro Forma Statement of Cash Flows
Source: Team Projections, Bloomberg, Yahoo Finance, Company 10-K, Company Filings
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
19
Projected
2017 2018 2019 2020 2021
Net income including controlling interest $190,529 $200,056 $210,059 $220,562 $231,590
Plus: D&A 89,545 94,022 98,724 103,660 108,843
Less: Changes in NWC (3,755) (3,913) (4,108) (4,314) (4,529)
Cash Provided by Operating Activities $276,319 $290,166 $304,674 $319,908 $335,903
Purchases of Intangible Assets ($43,122) ($45,278) ($47,542) ($49,919) ($52,415)
Capex (97,025) (101,876) (106,970) (112,318) (117,934)
Cash Used in Investing Activities ($140,147) ($147,154) ($154,512) ($162,237) ($170,349)
Proceeds from issuance of common stock
Repurchase of common stock (51,900) - - - - - - - -
Payment of cash dividend (57,103) (59,959) (62,957) (66,104) (69,410)
Distribution to controlling interest
Cash Used in Financing Activities ($109,003) ($59,959) ($62,957) ($66,104) ($69,410)
Net Change in Cash $27,169 $83,053 $87,206 $91,566 $96,144
Beginning Cash 516,112 543,281 626,334 713,540 805,106
Ending Cash 543,281 626,334 713,540 805,106 901,251

20. Discounted Cash Flow
Source: Team Projections, Bloomberg, Yahoo Finance, Company 10-K, Company Filings
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
20
Projected
2017 2018 2019 2020 2021
Years 1.0 2.0 3.0 4.0 5.0
Revenue $1,078,051 $1,131,953 $1,188,551 $1,247,978 $1,310,377
Less: Operating Expenses 837,596 879,476 923,450 969,623 1,018,104
Operating Profit $240,454 $252,477 $265,101 $278,356 $292,274
Taxes 55,315 58,081 60,985 64,034 67,236
Tax-Effected EBIT $185,139 $194,396 $204,116 $214,322 $225,038
Plus: Depreciation & Amortization $89,545 $94,022 $98,724 $103,660 $108,843
Less: Change in NWC (3,755) (3,913) (4,108) (4,314) (4,529)
Less: Capex (97,025) (101,876) (106,970) (112,318) (117,934)
FCF $173,905 $182,630 $191,762 $201,350 $211,417
Present Value $160,107 $154,801 $149,645 $144,662 $139,844
Present Value of Projection Period 749,059
EBITDA EXIT Multiple
Present Value of
Projection Period $749,059
2021 EBITDA $401,116
EBITDA Multiple 11.4x
Terminal Value $4,572,725
Years 5.0
Present Value of Terminal Value $3,024,671
Equity Value $3,773,730
Shares Outstanding 57,270
Implied Share Price $65.89
Perpetuity Growth Model
Present Value of Projection Period $749,059
2021 FCF $211,417
Perpetuity Growth Rate 2.0%
Terminal Value $3,258,765
Years 5.0
Present Value of Terminal Value $2,155,540
Equity Value $2,904,599
Shares Outstanding 57,270
Implied Share Price $50.72

21. WACC Calculation
CAPM
Beta 1.02
Market Risk Premium 6.12%
Risk-free Rate 2.38%
Cost of Equity 8.6%
21
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview

22. Notable Partnerships
§ Jan 2017: Sony announces that their new 4K Ultra HD TVs will be powered by Dolby Vision
§ Jan 2017: LGs 2017 OLED TVs will support both Dolby Vision and Dolby Atmos
§ October 2016: Google announces that it’s new Chromecast device will support Dolby Vision
§ June 2016: First 4 theatres in China with Dolby Cinema open to the public through Wanda Cinemas, 100 theaters planned by
the end of 2018
§ March 2016: Dolby announces a deal with Apple to include Dolby 7.1 surround sound support on iOS 9.3 and all updates into
the future
§ April 2015: AMC Theaters partners with Dolby Cinemas, 50 theaters planned by 2018
§ May 2015: Microsoft announced that Dolby Audio will be a major part of the Microsoft 10 operating system. Microsoft Edge
would be the first browser to Dolby Digital Plus
Investment Thesis
Industry Dynamics
Growth
Opportunities &
Drivers
Valuation & Final
Thoughts
Appendix
Company Overview
Source: Company Filings, Company Announcements
22