Nibc 2016 [graduate] - [pepper waves] - ppt

AT&T Pitchbook
Team Pepper Waves

• The acquisition of DirecTV is accretive to AT&T’s business
• EBITDA and operating income margins have stayed pretty consistent, which means AT&T
has controlled its costs very well
• Current trends affecting AT&T include
• Increased market penetration for wireless and broadband subscribers in Latin America
• Regulatory changes in Mexico will be beneficial for AT&T’s Mexico segment
• Media company consolidation
• Increased focus on the Internet of Things
• Strategic Transaction Advice
• Axtel
• AMC Networks
• PTC
Executive Summary at&t

Company Overview
120,000
122,000
124,000
126,000
128,000
130,000
132,000
134,000
2010 2011 2012 2013 2014
Historical Total Revenue
Total Revenue
ⁱAT&T shifted their core business from wireline to wireless as they
recognized the slower growth in the landline industry.
• With a market capitalization of $205.4 billion, AT&T is the
biggest telecommunication company in the industry.
• Wireless, Wireline, Advertising Solutions were the main
revenue drivers of 2014.
• With the purchase of DirecTV in 2015, their revenue streams
have become more diversified and more international.
Financial Metrics (in $m) 2014 2013
Total Revenue 132,447.00$ 128,752.00$
Total Assets 292,829.00$ 277,787.00$
EBITDA 40,795.00$ 41,061.00$
Cash and Near Cash 8,603.00$ 3,339.00$
Diluted EPS 3.26$ 1.94$
Net Debt/EBITDA 1.8x 1.7x
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
2010 2011 2012 2013 2014
Revenue Driver (Before DirectTV)
Wireless Wirelineⁱ Adv n Other
at&t

• Before the acquisition of DirecTV, AT&T’s main
segments were Wireless and Wireline (56% and
44%). But landline (Wireline) revenues have been
declining, so the company has shifted its focus
towards Wireless subscribers.
• In order to increase its growth potential and
decrease its revenue headwinds, the company
should expand to new markets.
• DirectTV brings about this diversification, but the
next key strategy will be the long term cost savings
that result from the synergies between U-Verse and
DirecTV.
• Furthermore, expected revenue from the
International segment will only be about 2% of
total revenue. We believe there is still a lot of
growth potential in this segment.
44%
34%
2%
20%
0%
Revenue (Expected 2015)
Wireless Wireline International DirectTV Adv & other
Sources: Strategy Analytics & fiercewireless.com
Business Model at&t

• We picked a very conservative sales growth
rate (3.1%) because of the competitive
nature of the industry (Wireless and
Wireline in North America will be more
consolidated further in the near future to
compete against companies offering slightly
different services)
• The EBITDA margin and operating income
margin has been stabilizing around 30%
and 18% so we kept the same margins for
our forecasts
• The fixed asset turnover has been
decreasing as a result of the recent
acquisitions, but management should expect
the ratio to improve in the near future as the
cost savings are realized.0.7
0.72
0.74
0.76
0.78
0.8
0.82
0.84
0.86
0.88
2010201120122013201420152016201720182019
Fixed Asset Turnover
Fixed Asset Turnover
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
2010201120122013201420152016201720182019
Net Profit Margin
EBITDA Margin
Operating Income
Margin
Operating Analysis at&t

0.000 0.500 1.000 1.500 2.000
AT&T
Verizon
T-Mobile
Sprints
Current Ratio (2014)
AT&T
Verizon
T-Mobile
Sprints
0.000 0.200 0.400 0.600 0.800 1.000
AT&T
Verizon
T-Mobile
Sprints
Quick Ratio (2014)
AT&T
Verizon
T-Mobile
Sprints
0.000
0.200
0.400
0.600
0.800
1.000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
AT&T Liquidity Ratio (10yr)
Current Ratio Quick Ratio Cash Ratio
• In 2014, AT&T’s current ratio is slightly low at
0.859. However, AT&T is a mature company so
we don’t believe there is a risk of the company
not being able to pay down current obligations.
• The quick ratio (0.620) is also lagging.
However, we don’t believe this will be a
permanent situation.
• The 10 year liquidity ratios, which include both
the historical and forecasted values, show that
the ratios will increase around 18% and will be
stable overtime.
• For our forecast, the current liability increased
as a result of additional operating expenses from
the recent acquisitions.
Liquidity Analysis at&t

• The Debt/Asset ratio is good as it’s lower than
industry average. That means the increase of our
debt from the recent acquisitions will be offset by a
higher proportion of assets (i.e. Higher PPE &
Cash)
• The Debt/Equity ratio is within the reasonable
industry range. For future AT&T transaction targets,
we recommend using less debt financing and more
financing from equity.
• The current portion of long term debt spiked
between 2014 and 2015 because we kept current
portion at 7% of total debt and total debt jumped as
a result of the acquisition of DirecTV.
*Industry Average is from Morningstar Financial
• Debt/EBITDA ratio is good as it’s lower than
industry average. The current debt level doesn’t
adversely affect our earning power.
• The Op. CF/Total Debt is lower than what we
would like but again, we’re not worried that
AT&T is not able to pay down its debt.
DebtCapacity 2014 2015 IndAvg
Debt/Assets 0.25 0.31 0.35
Debt/Equity 0.85 0.94 0.87
CurrentAssets/CurrentLiability 0.86 0.69 0.93
Debt/EBITDA 1.80 2.50 2.88
Cashflow Ops/Total Debt 0.43 0.32 72.81
Debt Capacity at&t

• The main competitor in the industry based on market
cap is Verizon Communications Inc.
• The other two competitors in the wireless industry are
T-Mobile and Sprint Corporation
• Based on historical CAGR, AT&T falls slightly behind
Verizon
• Based just on Wireless Revenues CAGR (5yr), AT&T
beat Sprint
• The Wireless industry is very competitive so smaller,
more nimble competitors have a better chance of
disrupting the industry
0.00% 20.00% 40.00% 60.00%
AT&T
T-Mobile
Sprint
Wireless Revenue CAGR (5yr)
AT&T
T-Mobile
Sprint
0.00% 1.00% 2.00% 3.00% 4.00%
AT&T
Verizon
Total Revenue (CAGR 5yr)
AT&T
Verizon
47%
42%
7%
4%
Market Capⁱ (in $b)
AT&T
Verizon
T-Mobile
Sprint
ⁱ As on 11/24/2015
Competitors at&t

• Net Income’s CAGR for the previous five years
is -6.06%. After acquisitions and with AT&T’s
new strategy, forecasted CAGR is 0.46%
realizing management’s plans for a turnaround
• The top two graphs show that AT&T’s decision
to purchase DirecTV is favorable the
company’s future growth.
• In addition, the new company strategy for better
international market penetration (ie. Latin
America and DirectTV) will bring
diversification and additional growth. This will
be discussed further under valuation analysis.
0.00%0.50%1.00%1.50%2.00%2.50%3.00%
AT&T
AT&T Projection
Total Revenue CAGR (NTM 5yr)
AT&T
AT&T Projection
-8.00% -6.00% -4.00% -2.00% 0.00% 2.00%
AT&T
AT&T Projection
Net Income CAGR (NTM 5yr)
AT&T
AT&T Projection
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
2015 2016 2017 2018 2019 2020
Revenue Driver (After DirectTV)
Wireless Wireline International DirectTV Adv & other
Acquisition Effect at&t

• AT&T Share Price: $33.75 (10/25/2015)
• Very well balanced Capital Structure 46%
Debt and 54% Equity Financing
• The top 10 institutions owned about
22.23% of the equity ownership.
54%
46%
Capital Structure
Total Debt Total Common Stock
Top 10 holders % Total
Vanguard Group, Inc. 5.7
State Street Corp 4.09
Evercore Trust Company, N.A. 3.31
BlackRock Fund Advisors 2.61
Capital Research Global Investors 1.65
Northern Trust Investments, N.A. 1.23
Fidelity Management and Research Company 1.02
Berkshire Hathaway Inc 0.96
Dimensional Fund Advisors, Inc. 0.84
Geode Capital Management, LLC 0.82
Total: Top 10 institutions 22.23
55%
45%
Ownership by type
Institutional Ownership Non Institutional Ownershipⁱ
ⁱ Non Institutional Ownership includes the insider portion of 0.036%
or total shares ($44m).
Shareholder Ownership at&t

Based on EV/Rev Based on EV/EBITDA Based on EV/Rev Based on EV/EBITDA
Comparables $36.94 $42.24 $43.51 $50.48
Precedents $48.04 $35.70 $31.75 $29.79
Combined Entity FairValue perShareSegmented FairValue perShare
Perpetuity Model Multiple Model
DCF $41.48 $40.16
Valuation Overview at&t
0
500
1000
1500
2000
2500
0
5
10
15
20
25
30
35
40
2010/1/4 2011/1/4 2012/1/4 2013/1/4 2014/1/4 2015/1/4
AT&T S&P500
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
EV/EBITDA (Combined)
EV/EBITDA (Segmented)
EV/ Revenue (Combined)
EV/ Revenue (Segmented)
Precedent Transactions
EV/EBITDA (Combined)
EV/EBITDA (Segmented)
EV/ Revenue (Combined)
EV/ Revenue (Segmented)
Comparables
3-7x Exit Multiple
Discounted Cash Flow
$21.08 $59.24
$9.37 $50.09
$23.64 $60.21
$33.12 $54.26
$34.65 $65.58
$25.79 $67.23
$24.53 $57
$25.67 $53.9
$19.23 $46.35
Current Price=$33.75 Fair Price=$40
• AT&T shares are currently about 20% higher than what they
were 5 years ago. This comes at a time when the market for
wireless consumers has been fully saturated and wireline
revenues are decreasing.
• AT&T continues to stand out among its peers through
innovation and strategic acquisitions that help add value for its
shareholders.
• Based on analysis of AT&T’s discounted cash flows,
precedent transactions in relevant industries, and comparables
in the space, we find AT&T to be undervalued at current
levels.

Comparables and Precedent Transactions Inclusion Criteria at&t
• Because AT&T has such a large market cap, we only looked at companies that had a larger than segment
average market cap
• We also looked at EV/EBITDA, EV/Revenue, P/E to find comparable measurements to AT&T
Comparables
Precedent Transactions
• Since AT&T is a large company we looked at transactions involving higher than average EV per segment to
make it more comparable to AT&T
• We also chose transactions that were more recent if possible because recent transactions hold more weight
• We also chose transactions based on whether the buyer company’s share price increased to gauge market
sentiment on such transactions

Segmented Combined Entity
EV/Rev EV/EBITDA EV/Rev EV/EBITDA
Company Name NTM NTM NTM NTM
(all figures presented in USD millions, except per share figures or where noted)
Integrated Telecom
Verizon 2.3x 6.4x
Wireless
T-Mobile 1.5x 5.9x 1.5x 5.9x
AT&T Metric $84,692 $30,405
Implied Enterprise Value 130,042 179,446
Wireline
Comcast 2.6x 7.6x 2.6x 7.6x
Time Warner Cable 3.1x 8.9x 3.1x 8.9x
Wireline Average 2.8x 8.3x
AT&T Metric $62,173 $17,732
Satellite
Dish 2.2x 11.5x 2.2x 11.5x
AT&T Metric $16,318 $4,016
Combined Average 2.3x 8.1x
AT&T Metric $163,183 $52,152
Total Enterprise Value 341,200 372,703 380,288 421,720
- Debt (126,930) (126,930) (126,930) (126,930)
- Preferred & Other (965) (965) (965) (965)
+ Cash 6,202 6,202 6,202 6,202
Equity Value 219,507 251,010 258,595 300,027
Shares Outstanding (millions) 5,943 5,943 5,943 5,943
Fair Value Share Price $36.94 $42.24 $43.51 $50.48
Comparables-Valuation Overview at&t

EV/Revenue EV/EBITDA EV/Revenue EV/EBITDA
Target LTM LTM LTM LTM
(all figures presented in USD millions, except per share figures or where otherwise noted)
US Wireless
Cellco Partnership 3.8x 9.7x 3.8x 9.7x
AT&T Metric 72,204 24,643
US Wireline
Virgin Media 2.1x 5.2x 2.1x 5.2x
AT&T Metric 53,005 14,371
Satellite
DirecTV 1.5x 5.9x 1.5x 5.9x
AT&T Metric 13,912 3,255
Latin America Telecom
Tele Norte Leste Participacoes S.A. 1.3x 3.5x
TV & Media
AOL 1.6x 9.7x
Belo Corp. 3.1x 8.4x
AT&T Metric 139,121 42,269
Total Enterprise Value $407,172 $333,883 $310,375 $298,720
- Debt (126,930) (126,930) (126,930) (126,930)
- Preferred & Other (965) (965) (965) (965)
+ Cash 6,202 6,202 6,202 6,202
Equity Value $285,479 $212,190 $188,682 $177,027
Precedents-Valuation Overview at&t

Valuation
($ in millions of U.S. dollars except per share amounts) Projected Fiscal Years Ending December 31
Free Cash Flows 2015 2016 2017 2018 2019 2020
EBIT * (1-tax rate) 19,809 20,387 20,999 21,648 22,336 23,064
Depreciation And Amortization 19,763 20,417 21,107 21,834 22,600 23,407
Other - - - - - -
Capex (27,421) (28,221) (29,069) (29,968) (30,920) (31,928)
Net change in working capital 3,639 51 197 209 223 237
Free cash flows to the firm (FCFF) 15,789 12,633 13,233 13,723 14,239 14,780
Years to Discount 0.17 1.17 2.17 3.17 4.17 5.17
Cost of Capital 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Discount Factor 0.99 0.94 0.90 0.86 0.82 0.78
PV Free cash flows to the firm (FCFF) 15,662 11,936 11,909 11,764 11,626 11,495
FCFF Fair Value Perpetuity Method FCFF Fair Value Multiple Method
Grown TV FCFF 14,928 EBITDA Multiple 5.0x
Terminal Value 374,508 Last forecast EBITDA 58,890
Present Value of Terminal Value 291,261 Terminal Value 294,450
Terminal Value as % of Total Value 79.7% Present Value of Terminal Value 283,515
Present Value of Forecast FCF 74,391 Terminal Value as % of Total Value 79.2%
Forecast Period as % of Total Value 20.3% Present Value of Forecast FCF 74,391
Enterprise Value 365,652 Forecast Period as % of Total Value 20.8%
- Debt (hardcoe as of valuation date) (125,446) Enterprise Value 357,907
+ Cash (hardcoe as of valuation date) 6,202 - Debt (hardcoe as of valuation date) (125,446)
Net Debt 119,244 + Cash (hardcoe as of valuation date) 6,202
Equity Value (Market Cap) 246,408 Net Debt 119,244
Shares outstanding 5,943 Equity Value (Market Cap) 238,663
Fair value share price 41.46 Shares outstanding 5,943
Fair value share price 40.16
Discounted Cashflow Valuation Overview at&t

• With a $20 billion cap on funding new acquisitions in the near future, at&t has to choose its new projects carefully.
• Some of AT&T’s ratios are not optimal when compared with its industry. The Debt/Equity ratio should be brought in line
with the rest of the industry so management should use limited debt to finance further acquisitions.
• We decided to use 35% Debt and 65% Equity financing and schedule the debt to be fully repaid within 10 years. With this
capital structure, at&t can successfully add value to their firm increasing FCF/Share, Equity/Share while maintaining an
acceptable Net Debt/Adjusted EBITDA (2.48x in 2020).
•We used an Interest Rate of 4.8%. This is derived from dividing the historical Long Term Interest by Long Term Debt. We
expect current interest rates to be similar with AT&T’s historical interest rate of about 5% due to the fact that AT&T has the
ability to pay down their debt obligations and continue to maintain a good bond rating.
•We used a purchase price multiple of 7.5x to reflect the average EV/EBITDA of precedent transactions in TV&Media and
Latin America because we believe that AT&T has the best opportunity to add value for its shareholders in these two
segments.
Levered Finance Overview at&t

Trends (Latin America) at&t
0%
5%
10%
15%
2014* 2015* 2016* 2017* 2018* 2019* 2020*
4G Wireless in Latin America
4G Wireless
0%
20%
40%
60%
80%
2011* 2012* 2013* 2014* 2015* 2016* 2017* 2018* 2019* 2020*
4G Wireless in Northern America
4G Wireless
0
20
40
60
80
100
120
2009 2010 2011 2012 2013 2014
in%
Share of Mobile Internet Subscriptions to
Mobile Telephone Subscriptions
Latin America
Mexico
USA
• 4G Mobile Wireless penetration in Latin America is
only around 5% in 2015, it’s expected to be 14% by
2020. In North America, the 4G Wireless industry is
expected to be consolidated further and the long term
growth rate will decrease.
• The bottom graph showcases the percent share of
mobile Internet to mobile telephone subscriptions. In
Latin America, we see upward sloping trends. That
means more people will be using the Internet.
• On the other hand, in the US, the share of mobile
Internet subscriptions to mobile telephone subscriptions
has evened out. This means that the mobile Internet
industry is maturing and will have smaller but more
constant growth rates.
Sources: Jefferies & Company, Euromonitor portal

Trends (Domestic) at&t
• Internet of Things to generate over $1Bn in review for AT&T this year.
• AT&T moving towards integration of technology with its businesses and on how to
leverage Internet of Things (IoT) within its network
• Mid tier media company consolidation
• Creation of original content
• Content availability across multiple platforms
• Cable company acquisitions of media companies

Target Buy #1 at&t
Company Overview
• Axtel, S.A.B. de C.V has just merged with Alestra.
Together, they provide telephone, television services and
broadband connections. Axtel has been showing strength
in liquidity, debt capacity and operating performance
ratios.
• Revenue drivers:
• Local wireless services: $179.84 million.
• Internet & Video: $80.96 million. (14% increase from
prev. year)
• Data & Network: $114.93 million
• Axtel has invested $2.60 billion in infrastructure, covering
200 cities with Axtel connectivity services, 94 thousand
subscribers for Axtel TV services and 908 thousand
telephone lines in services
Financial Overview(2014)
• Strategic: Grows AT&T’s broadband and TV
subscriber base in Latin America
• Operational: Potential synergies with AT&T’s
Mexico Telecom business and DirecTV’s Latin
America business

Target Buy #2 at&t
Company Overview
• Provides original programming through
AMC, WE tv, Sundance Channel among
others.
• Recently acquired 49.9% of BBC America
• Acquisition of AMC Networks will allow AT&T to
become a player in the media industry providing
original content and leveraging it across multiple
platforms.
• Strategic: Make AT&T a player in the media
industry. Develop, own, and distribute original
content across multiple platforms. Initial
investments into content development can lead to
huge returns in the future through distribution
agreements.
• Operational: Adds EBITDA of over $600Mn to the
entertainment segment which includes expected
DirecTV EBITDA of $7.8Bn

Target Buy #3 at&t
Company Overview
• Develops and delivers technology solutions,
comprised of software and services to help
businesses operate more effectively in a connected
world.
• Acquired Axeda, which has a partnership with AT&T
to develop software to remotely manage and monitor
a company’s global assets
• Acquisition of PTC will allow AT&T to leverage all of
PTC’s sensor technology, software, and connectivity
into IoT solutions for its customers. Technology can be
applied to consumer products also.
• Strategic: Consolidates AT&T’s position as the
industry leader in IoT design and implementation
fueling future growth in the segment.
• Operational: Synergies with Business Solutions and
potential leverage into Consumer Mobility.

Team Overview
Pepper Waves consists of three Master of Science in Applied Finance students from Pepperdine’s Graziadio School of
Business and Management. Reinaldo Johari earned his BBA in Finance at Texas A&M University, is a CFA Level 1
candidate and has a strong interest in Investment Management and Social Investment Entrepreneurship. He is also an
active member of the CFA Society (Los Angeles). YueCong (Marco) Zhang graduated from North China Electric Power
University with a BA in Financial Management. He has been investing in both the Chinese and American markets for
the past five years. His passion is in Investment Banking. Peter Hsiung received his BA in Economics from the
University of Maryland and has interned at an Insurance Asset Management firm. He is part of the Finance Club on
campus and coordinates Wall Street Prep activities for the students. After business school, Peter would like to work in
Investment Banking.
Reinaldo JohariPeter Hsiung YueCong Zhang

DCFSummary - Operating Model
Cashflow Forecast
*All dollar amounts in millions 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
Wireless Revenues 58,500 63,215 66,763 69,899 73,992 77,988 82,199 86,638 91,316 96,247 101,444
Wireline Revenues 61,300 60,140 59,567 58,814 58,425 57,864 57,286 56,713 56,146 55,584 55,029
DirecTV Revenues - - - - - 32,448 33,518 34,625 35,767 36,947 38,167
International Revenues - - - - - 3,000 3,300 3,630 3,993 4,392 4,832
Advertising (discontinued) / Other Revenues 4,480 3,368 1,104 39 30 23 18 14 10 8 6
Total Revenues 124,280 126,723 127,434 128,752 132,447 171,323 176,321 181,619 187,232 193,179 199,477
Revenue Growth - 2.0% 0.6% 1.0% 2.9% 29.4% 2.9% 3.0% 3.1% 3.2% 3.3%
Wireless Expenses (36,185) (41,282) (43,296) (44,508) (48,924) (51,566) (54,350) (57,285) (60,379) (63,639) (67,076)
Wireline Expenses (41,879) (41,360) (41,207) (41,638) (42,471) (42,064) (41,643) (41,226) (40,814) (40,406) (40,002)
DirecTV Expenses - - - - - (24,599) (25,410) (26,249) (27,115) (28,010) (28,934)
International Expenses - - - - - (2,838) (3,122) (3,434) (3,777) (4,155) (4,571)
Advertising (discontinued) / Other Expenses (3,889) (3,115) (1,797) (1,545) (257) (18) (14) (11) (8) (6) (5)
Total Operating Costs (81,953) (85,757) (86,300) (87,691) (91,652) (121,084) (124,540) (128,206) (132,094) (136,217) (140,588)
Wireless EBITDA 22,315 21,933 23,467 25,391 25,068 26,422 27,848 29,352 30,937 32,608 34,369
Wireline EBITDA 19,421 18,780 18,360 17,176 15,954 15,801 15,643 15,486 15,332 15,178 15,027
DirecTV EBITDA - - - - - 7,849 8,108 8,376 8,652 8,938 9,233
International EBITDA - - - - 162 178 196 216 237 261
Advertising (discontinued) / Other EBITDA 591 253 (693) (1,506) (227) 5 4 3 2 2 1
Total EBITDA 42,327 40,966 41,134 41,061 40,795 50,238 51,781 53,413 55,139 56,963 58,890
EBITDA Growth - (3.2%) 0.4% (0.2%) (0.6%) 23.1% 3.1% 3.2% 3.2% 3.3% 3.4%
EBITDA Margin 34.1% 32.3% 32.3% 31.9% 30.8% 29.3% 29.4% 29.4% 29.4% 29.5% 29.5%
Wireless EBITDA Growth (1.7%) 7.0% 8.2% (1.3%) 5.4% 5.4% 5.4% 5.4% 5.4% 5.4%
Wireline EBITDA Growth (3.3%) (2.2%) (6.4%) (7.1%) (1.0%) (1.0%) (1.0%) (1.0%) (1.0%) (1.0%)
DirecTV EBITDA Growth 3.3% 3.3% 3.3% 3.3%
International EBITDA Growth 10.0% 10.0%
Advertising / Other EBITDA Growth (23.1%) (23.1%) (23.1%) (23.1%) (23.1%)
Wireless EBITDA Margin 38.1% 34.7% 35.1% 36.3% 33.9% 33.9% 33.9% 33.9% 33.9% 33.9% 33.9%
Wireline EBITDA Margin 31.7% 31.2% 30.8% 29.2% 27.3% 27.3% 27.3% 27.3% 27.3% 27.3% 27.3%
DirecTV EBITDA Margin 24.2% 24.2% 24.2% 24.2% 24.2% 24.2%
International EBITDA Margin 5.4% 5.4% 5.4% 5.4% 5.4% 5.4%
Advertising / Other EBITDA Margin 13.2% 7.5% (62.8%) (3861.5%) (756.7%) 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%

DCFSummary - Capital Structure
Cashflow Forecast
*All dollar amounts in millions 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
Total EBITDA 42,327 40,966 41,134 41,061 40,795 50,238 51,781 53,413 55,139 56,963 58,890
Capex (19,530) (20,110) (19,465) (20,944) (21,199) (27,421) (28,221) (29,069) (29,968) (30,920) (31,928)
Tax 1,162 (2,532) (2,900) (9,224) (3,442) (9,230) (8,782) (8,992) (9,246) (9,459) (9,763)
Working Capital and Other Adjustments (8,267) (3,954) 3,286 3,501 (1,383) (29,237) 51 197 209 223 237
Free Cashflows 15,692 14,370 22,055 14,394 14,771 (15,651) 14,828 15,548 16,134 16,807 17,436
Cashflow for Debt Service 15,692 14,370 22,055 14,394 14,771 (15,651) 14,828 15,548 16,134 16,807 17,436
Interest Expense (2,994) (3,535) (3,444) (3,940) (3,613) (4,103) (6,272) (6,614) (6,888) (7,338) (7,588)
Isssurance / Repayment of Long-term Debt (7,059) 362 4,753 9,138 5,633 24,005 6,841 5,480 8,985 5,007 6,884
Interest Income and Other Items 2,438 1,033 886 1,238 1,827 - - - - - -
Cashflow Available for Equity Distributions 8,077 12,230 24,250 20,830 18,618 4,251 15,397 14,414 18,231 14,476 16,732
Equity Issuance / Repurchase and Equity Items (465) (214) (12,186) (12,663) (3,802) 672 (9,002) (2,150) (1,599) (2,092) (1,762)
Dividends (incl. distributions of cash balance) (9,916) (10,172) (10,241) (9,696) (9,552) (5,757) - (14,369) (15,724) (13,260) (14,267)
Net Cashflows (2,304) 1,844 1,823 (1,529) 5,264 (834) 6,395 (2,105) 908 (876) 703
Ending Cash Balance 1,437 3,045 4,868 3,339 8,603 7,769 14,165 12,060 12,968 12,092 12,795
Ending Debt Balance 64,515 64,753 69,843 74,767 82,062 125,446 132,287 137,767 146,752 151,760 158,643
Ending Net Debt Balance 63,078 61,708 64,975 71,428 73,459 117,677 118,123 125,707 133,784 139,668 145,848
Net Debt to EBITDA - 1.5 x 1.6 x 1.7 x 1.8 x 2.3 x 2.4 x 2.2 x 2.0 x 1.9 x 1.6 x
Basic shares outstanding (millions) 5,913 5,928 5,801 5,368 5,205 5,924 5,924 5,924 5,924 5,924 5,924
Diluted shares outstanding (millions) 5,938 5,950 5,821 5,385 5,221 5,943 5,943 5,943 5,943 5,943 5,943
Diluted adjusted earnings (loss) per share 3.91$ 2.91$ 2.96$ 1.94$ 3.26$ 3.05$ 2.91$ 2.97$ 3.05$ 3.12$ 3.21$
Dividend per share(diluted) 1.68$ 1.72$ 1.75$ 1.78$ 1.84$ 0.97$ -$ 2.42$ 2.65$ 2.23$ 2.40$
Free cashflow per share (diluted) 2.28$ 2.27$ 3.35$ 2.17$ 2.49$ (3.32)$ 1.44$ 1.50$ 1.56$ 1.59$ 1.66$
Equity cashflow per share (diluted) 2.55$ 2.03$ 4.22$ 3.09$ 3.88$ 0.72$ 2.59$ 2.43$ 3.07$ 2.44$ 2.82$

DCFSummary - Valuation Results
Cashflow Forecast
*All dollar amounts in millions 2015E 2016E 2017E 2018E 2019E 2020E
Free cash flow s to the firm (FCFF) 15,662 11,936 11,909 11,764 11,626 11,495
Enterprise Value EBITDA Multiple Method Enterprise Value Perpetual Growth Method WACC Assumptions
EBITDA Multiple 5.0x Perpetual grow th of firm cash flow s 1.00% Valuation date 1-Nov-15
Terminal Year EBITDA 58,890
10-yr US government bond rate2.0%
Present Value of Terminal Value 283,515 Present Value of Terminal Value 291,261 Expected market return 8.5%
Present Value of Forecast FCF 74,391 Present Value of Forecast FCF 74,391 Market risk premium 6.5%
Enterprise Value 357,907 Enterprise Value 365,652 Beta 0.75
- Debt (125,446) - Debt (125,446) CAPM cost of equity 6.9%
+ Cash 6,202 + Cash 6,202 Cost of debt 5.0%
Equity Value (Market Cap) 238,663 Equity Value (Market Cap) 246,408 Tax rate 35.0%
Shares outstanding 5,943 Shares outstanding 5,943 After tax cost of debt 3.3%
Fair value share price $40.16 Fair value share price $41.46 Target gearing 52.1%
WACC 5.0%

Operating Assumptions
Assumption Key Metric Justification
Total Revenue
(CAGR '16-'20)
3.1%
Consolidated from management guidance for each segment which is based on case package
Wireless Revenue
(CAGR '16-'20)
5.4%
Used average sales growth from 2012-2014
Wireline Revenue
(CAGR '16-'20)
(1.0)%
Used average sales growth from 2012-2014
International Revenue
(CAGR '16-'20)
10.0%
Based on current 10Q, management expects total revenue will be much more diversified and international will be
the fasted growing segment
DIRECTV Revenue
(CAGR '16-'20)
3.3%
Based on case package: appendix A, pg. 11, forecasted CAGR
Total EBITDA
(CAGR '16-'20)
3.3%
Based on growth in revenues and expenses
Wireless EBITDA
(CAGR '16-'20)
5.4%
Assumed constant expense to revenue ratio so if revenues grew by 5.4% then expenses will grow by 5.4%
Wireline EBITDA
(CAGR '16-'20)
(1.0)%
Assumed constant expense to revenue ratio so if revenues decreased by 1% then expenses will decrease by
1%
International EBITDA
(CAGR '16-'20)
10.0%
Assumed constant expense to revenue ratio so if revenues increased by 10% then expenses will increase by
10%
DIRECTV EBITDA
(CAGR '16-'20)
3.3%
Assumed constant expense to revenue ratio so if revenues increased by 3.3% then expenses will increase by
3.3%
Capex (% of revenue)
(Average '16-'20)
16.0%
Based on historical capex to revenue ratio
Valuation Assumptions
Assumption Key Metric Justification
Beta 0.75 Based on Valueline Research report
Risk-free Rate 2.0% 10-yr US treasury constant maturity rate at October 2nd, 2015
Cost of Debt (pre-tax) 5.0% Based on Case Package
Perpetual Growth Rate 1.0% As a mature company in a mature industry, growth rate is tempered
Exit Multiple 5.0x
Potential buyers of AT&T will want a conservative EV/EBITDA multiple. This multiple is valued without the
control premium

Standalone Cashflow Projection
Forecast
2015 2016 2017 2018 2019 2020
A. Standalone Cashflows
Revenues 8,889 9,067 9,248 9,433 9,622
Operating Costs (6,222) (6,165) (6,196) (6,226) (6,254)
EBITDA 2,667 2,901 3,052 3,207 3,368
Revenue Growth 2.0% 2.0% 2.0% 2.0%
EBITDA Growth (initial synergies ramp) 8.8% 5.2% 5.1% 5.0%
EBITDA Margin 32.0% 33.0% 34.0% 35.0%
Taxes (349) (431) (484) (539) (596)
Capex (889) (907) (925) (943) (962)
Change in Working Capital (1) (11) (11) (11) (11)
Operating Cashflows 1,427 1,553 1,632 1,714 1,798
Interest Expense (336) (309) (281) (251) (220)
Principal Repayment (562) (589) (617) (647) (678)
Debt Issuance Debt 35% 7,000 - - - -
Equity Issuance Equity 65% 13,000 - - - -
Purchase Price Multiple 7.5x (20,000) - - - -
Equity Cashflows 530 655 734 816 900
Dividends Paid 530 655 734 816 900
Residual Cashflows 1,059 1,311 1,469 1,632 1,801
B. Key Metrics
Incremental Debt Opening Balance 7,000 6,438 5,850 5,233 4,586
Incremental Debt Issued - - - - -
Incremental Principal Paid (562) (589) (617) (647) (678)
Incremental Debt Closing Balance 6,438 5,850 5,233 4,586 3,908
Incremental Interest Expense 336 309 281 251 220
Net Debt / EBITDA 2.41x 2.02x 1.71x 1.43x 1.16x
Incremental Diluted Shares Issued (millions) 391 391 391 391 391
Free Cashflow per Share 3.65$ 3.97$ 4.17$ 4.38$ 4.59$
Equity Cashflow per Share 1.35$ 1.67$ 1.88$ 2.08$ 2.30$

Corporate Cashflow Projections
Forecast
2015 2016 2017 2018 2019 2020
A. Corporate Cashflows (Pre-Transaction)
Corporate Revenues 176,321 181,619 187,232 193,179 199,477
Corporate Opex (124,540) (128,206) (132,094) (136,217) (140,588)
Corporate EBITDA 51,781 53,413 55,139 56,963 58,890
Corporate Capital Expenditures, Working Capital and Taxes (36,953) (37,865) (39,004) (40,156) (41,454)
Corporate Operating Cashflows 14,828 15,548 16,134 16,807 17,436
Corporate Net Debt Flow s 569 (1,134) 2,097 (2,330) (704)
Corporate Equity Cashflows 15,397 14,414 18,231 14,476 16,732
B. Corporate Cashflows (Pro-Forma)
Corporate Revenues 176,321 181,619 187,232 193,179 199,477
Incremental Revenues 8,889 9,067 9,248 9,433 9,622
Proforma Revenues 185,210 190,685 196,480 202,612 209,099
Corporate EBITDA 51,781 53,413 55,139 56,963 58,890
Incremental EBITDA 2,667 2,901 3,052 3,207 3,368
Proforma EBITDA 54,448 56,315 58,191 60,170 62,257
Corporate Capital Expenditures, Working Capital and Taxes (36,953) (37,865) (39,004) (40,156) (41,454)
Incremental Capital Expenditures, Working Capital and Taxes (1,239) (1,349) (1,420) (1,494) (1,570)
Proforma Operating Cashflows 16,256 17,101 17,766 18,520 19,233
Corporate Net Debt Flow s 569 (1,134) 2,097 (2,330) (704)
Incremental Debt Service (898) (898) (898) (898) (898)
Combined Debt Flow s (329) (2,032) 1,199 (3,228) (1,602)
Proforma Equity Cashflows 15,927 15,069 18,965 15,292 17,632
C. Key Metrics
Existing Diluted Shares Outstanding (millions) 5,943 5,943 5,943 5,943 5,943
Free Cashflows per Share (Pre-Transaction) 2.50$ 2.62$ 2.71$ 2.83$ 2.93$
Equity Cashflows per Share (Pre-Transaction) 2.59$ 2.43$ 3.07$ 2.44$ 2.82$
Incremental Diluted Shares Issued (millions) 391 391 391 391 391
Combined Total Cumulative Diluted Shares Outstanding (millions) 6,334 6,334 6,334 6,334 6,334
Free Cashflows per Share (Pro-Forma) 2.57$ 2.70$ 2.80$ 2.92$ 3.04$
Equity Cashflows per Share (Pro-Forma) 2.51$ 2.38$ 2.99$ 2.41$ 2.78$
Corporate Net Debt (Closing Balance) 118,123 125,707 133,784 139,668 145,848
Corporate Net Debt / EBITDA Ratio (Pre-Transaction) 2.28x 2.35x 2.43x 2.45x 2.48x
Incremental Debt (Closing Balance) 6,438 5,850 5,233 4,586 3,908
Combined Total Corporate Net Debt (Closing Balance) 124,561 131,557 139,017 144,254 149,757
Corporate Net Debt / EBITDA Ratio (Pro-Forma) 2.29x 2.34x 2.39x 2.40x 2.41x

Company Name Market EV
(1)
Net Debt EV/Revenue
(3)
EV/EBITDA
(3)
P/E
(3)
EBITDA CAGR
(3)
Revenue CAGR
(3)
EBITDA WACC
Cap.
(1)
/ EV 2014A LTM NTM 2016E 2014A LTM NTM 2016E 2014A LTM NTM 2016E 3-Yr Hist 2-Yr Fcst 3-Yr Hist 2-Yr Fcst %
(all figures presented in USD millions, except per share figures or where noted)
Integrated Telecom
Verizon USD 187,860 297,407 36.4% 2.3x 2.3x 2.3x 2.3x 6.9x 6.6x 6.4x 6.4x 19.1x 12.1x 11.7x 11.6x 7.4% 0.9% 4.3% 0.3% 34.5% 5.7%
Shaw Communuications CAD 9,217 13,458 29.7% 2.8x 3.0x 3.2x 3.2x 6.6x 6.8x 7.4x 7.3x 13.2x 14.9x 14.5x 14.2x (4.7%) 1.0% (5.2%) 0.3% 43.2% 5.4%
Rogers Communications CAD 20,672 33,811 38.9% 2.9x 3.1x 3.3x 3.2x 7.7x 8.2x 8.6x 8.5x 17.9x 18.2x 17.7x 17.5x (7.2%) 2.8% (6.5%) 1.8% 38.1% 4.5%
Telus Corporation CAD 19,967 27,069 26.2% 2.5x 2.6x 2.8x 2.7x 7.1x 7.3x 7.8x 7.5x 18.2x 17.3x 16.9x 15.6x (4.5%) 4.9% (4.0%) 3.0% 35.1% 5.2%
BCEINC. CAD 49,020 64,148 23.1% 3.4x 3.5x 3.9x 3.9x 8.8x 8.9x 9.8x 9.6x 21.4x 19.8x 22.4x 21.5x (6.3%) 2.7% (6.5%) 1.4% 39.5% 4.9%
Integrated Telecom Average 57,347 87,179 30.9% 2.8x 2.9x 3.1x 3.0x 7.4x 7.6x 8.0x 7.9x 17.9x 16.5x 16.6x 16.1x -3.1%* 2.4% (3.6%) 1.4% 38.1% 5.1%
Wireless
T-Mobile USD 33,768 52,934 36.2% 1.8x 1.7x 1.5x 1.5x 9.1x 8.1x 5.9x 5.8x 133.5x 44.2x 27.2x 19.9x 14.3% 20.7% 86.4% 7.4% 20.3% 5.8%
Sprint USD 19,365 49,020 60.5% 1.4x 1.5x 1.5x 1.5x 7.2x 13.1x 6.4x 6.4x N/A neg neg neg 9.6% 18.8% (0.7%) (1.0%) 11.1% 5.4%
US Cellular Corp USD 3,151 4,103 22.9% 1.1x 1.0x 1.0x 1.0x 8.9x 5.5x 6.2x 6.0x neg neg neg neg (3.7%) 5.3% (3.5%) 0.9% 18.9% 7.4%
Wireless Average 18,761 35,352 39.9% 1.4x 1.4x 1.3x 1.3x 8.4x 8.9x 6.1x 6.1x 133.5x 44.2x 27.2x 19.9x 6.7%* 15.0% 27.4% 2.4% 16.8% 6.2%
Wireline
CenturyLink Inc. USD 15,561 36,104 56.9% 2.0x 2.0x 2.0x 2.0x 5.3x 5.5x 5.2x 5.4x 20.3x 21.2x 10.8x 11.5x (2.9%) (1.2%) (0.9%) 0.0% 37.1% 5.6%
Frontier Communications USD 6,121 15,223 59.8% 3.2x 2.9x 2.7x 2.8x 7.8x 7.7x 5.2x 5.4x 40.3x 32.2x neg neg 1.2% 15.6% 3.6% 14.7% 38.1% 6.1%
Consolidated Communications USD 1,085 2,450 55.5% 3.9x 3.4x 3.1x 3.1x 10.2x 9.4x 7.7x 7.8x 61.4x 31.8x 27.2x 26.4x 21.5% 0.5% 18.1% (1.4%) 35.6% 5.6%
Telephone and Data Systems USD 2,857 4,909 31.0% 1.0x 1.0x 0.9x 0.9x 7.6x 5.0x 5.3x 5.1x neg neg neg 59.4x (2.2%) 3.9% (1.0%) 1.4% 19.2% 6.4%
Comcast USD 151,218 196,363 22.3% 2.9x 2.7x 2.6x 2.5x 8.6x 8.1x 7.6x 7.5x 19.0x 19.2x 17.3x 16.6x 7.2% 5.4% 5.5% 4.5% 33.3% 7.0%
Charter Communications USD 20,287 41,307 50.9% 4.5x 4.4x 4.1x 3.9x 13.4x 13.2x 11.5x 11.0x neg neg 182.9x 104.7x 9.0% 9.9% 9.2% 7.8% 33.1% 6.2%
Time Warner Cable USD 51,883 74,898 30.7% 3.3x 3.2x 3.1x 3.0x 9.4x 9.3x 8.9x 8.5x 25.4x 25.8x 25.8x 23.5x 2.0% 6.2% 3.5% 5.9% 34.6% 6.2%
Cablevision Systems Corp USD 9,071 17,300 47.5% 2.7x 2.7x 2.6x 2.6x 9.6x 9.5x 9.5x 9.2x 27.8x 52.2x 38.2x 35.3x 2.6% 1.6% 2.3% 1.1% 27.8% 4.9%
Wireline Average 32,261 48,569 44.3% 2.9x 2.8x 2.6x 2.6x 9.0x 8.5x 7.6x 7.5x 32.4x* 30.4x* 50.4x* 39.6x* 4.8% 5.2% 5.0% 4.2% 32.3% 6.0%
Satellite
Dish USD 28,653 33,921 15.4% 2.3x 2.3x 2.2x 2.2x 11.7x 11.3x 11.5x 11.6x 30.2x 24.9x 36.7x 35.3x 10.6% (1.6%) 4.6% 1.7% 20.2% 7.4%
Satellite Average 28,653 33,921 15.4% 2.3x 2.3x 2.2x 2.2x 11.7x 11.3x 11.5x 11.6x 30.2x 24.9x 36.7x 35.3x 10.6% (1.6%) 4.6% 1.7% 20.2% 7.4%
Cumulative Average 86,459 102,782 28.5% 4.0x 3.9x 3.8x 3.7x 12.0x 11.9x 10.2x 10.1x 45.2x 29.6x 35.9x 28.6x 7.7% 6.1% 8.9% 3.8% 31.1% 6.7%
AT&T USD 204,275 325,759 37.1% 2.5x 2.3x 2.0x 1.9x 8.0x 7.7x 6.2x 6.1x 27.9x 13.3x 11.9x 11.9x 4.5% 7.2% 5.0% 8.1% 30.4% 5.2%

Company Name EV/Rev Yes EV/EBITDA Yes EV/Rev Yes EV/EBITDA Relevance to Target Valuation
Incl.? NTM Incl.? NTM Incl.? NTM Incl.? NTM
Integrated Telecom
Verizon Yes 2.3x Yes 6.4x The biggest in Integrated Telecom.
Shaw Communuications No 0.0x No 0.0x Not a large company. Has negative historical EBITDA
Rogers Communications No 0.0x No 0.0x Not a large company. Has negative historical EBITDA
Telus Corporation No 0.0x No 0.0x Not a large company. Has negative historical EBITDA
BCE INC. No 0.0x No 0.0x Not a large company. Has negative historical EBITDA
Wireless
T-Mobile Yes 1.5x Yes 5.9x Yes 1.5x Yes 5.9x The biggest in Wireless by market cap
Sprint No 0.0x No 0.0x No 0.0x No 0.0x Small
US Cellular Corp No 0.0x No 0.0x No 0.0x No 0.0x Too small
Wireless Average 1.5x 5.9x
AT&T Metric (4)
$84,692 $30,405
Wireline
CenturyLink Inc. No 0.0x No 0.0x No 0.0x No 0.0x Too small
Frontier Communications No 0.0x No 0.0x No 0.0x No 0.0x Too small
Consolidated Communications No 0.0x No 0.0x No 0.0x No 0.0x Too small
Telephone and Data Systems No 0.0x No 0.0x No 0.0x No 0.0x Too small
Comcast Yes 2.6x Yes 7.6x Yes 2.6x Yes 7.6x One of tw o biggest in Wireline by market cap
Charter Communications No 0.0x No 0.0x No 0.0x No 0.0x Too small
Time Warner Cable Yes 3.1x Yes 8.9x Yes 3.1x Yes 8.9x One of tw o biggest in Wireline by market cap
Cablevision Systems Corp No 0.0x No 0.0x No 0.0x No 0.0x Too small
Wireline Average 2.8x 8.3x
AT&T Metric (4)
$62,173 $17,732
Satellite
Dish Yes 2.2x Yes 11.5x Yes 2.2x Yes 11.5x Only relevant satellite company. Similar EV/Revenue
Satellite Average 2.2x 11.5x
AT&T Metric (4)
$16,318 $4,016
AT&T Metric $163,183 $52,152
Total Enterprise Value 341,200 372,703 380,288 421,720
- Debt (126,930) (126,930) (126,930) (126,930)
- Preferred & Other (965) (965) (965) (965)
+ Cash 6,202 6,202 6,202 6,202
Equity Value 219,507 251,010 258,595 300,027

EV/Revenue EV/EBITDA EV/Revenue EV/EBITDA
Target Incl.? LTM Incl.? LTM Incl.? LTM Incl.? LTM Relevance to Target Valuation
US Wireless
Cellco Partnership Yes 3.8x Yes 9.7x Yes 3.8x Yes 9.7x Biggest Implied EV in the segment and one of the most recent transactions
Leap Wireless No 0.00 No 0.00 No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
Clearw ire No 0.00 No #VALUE! No 0.00 No #VALUE! Implied EV, Revenue, and EBITDA is too small
Sprint No 0.00 No 0.00 No 0.00 No 0.00 Revenue is relatively small
Alltel No 0.00 No 0.00 No 0.00 No 0.00 Transaction happened too long ago
SunCom Wireless No 0.00 No 0.00 No 0.00 No 0.00 Transaction happened too long ago
US Wireless Average 3.8x 9.7x
AT&T Metric 72,204 24,643
US Wireline
TW Telecom No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
Charter Communications No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
Bresnan Broadband No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
Virgin Media Yes 2.1x Yes 5.2x Yes 2.1x Yes 5.2x Biggest Implied EV in the segment and one of the most recent transactions
Atlantic Broadband Finance No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
Insight Communications No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
Qw est Communications No 0.0x No 0.0x No 0.0x No 0.0x Transaction happened too long ago
BellSouth Corporation No 0.0x No 0.0x No 0.0x No 0.0x Transaction happened too long ago
Verizon Business Global No 0.0x No 0.0x No 0.0x No 0.0x Transaction happened too long ago
AT&T Corp. No 0.0x No 0.0x No 0.0x No 0.0x Transaction happened too long ago
US Wireline Average 2.1x 5.2x
AT&T Metric 53,005 14,371
Satellite
DirecTV Yes 1.5x Yes 5.9x Yes 1.5x Yes 5.9x Biggest Implied EV in the segment and one of the most recent transactions
Hughes Communications No 0.0x No 0.0x No 0.0x No 0.0x Implied EV, Revenue, and EBITDA is too small
AT&T Metric 13,912 3,255
Columbus Communications No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
Telefonos de Mexico No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
Tele Norte Leste Participacoes S.A. Yes 1.3x Yes 3.5x Biggest Implied EV in the segment and one of the most recent transactions
America Telecom No 0.00 No 0.00 Transaction happened too long ago
TV & Media
AOL Yes 1.6x Yes 9.7x Biggest Implied EV in the segment (how ever, transaction rejected by regulators) look below
LIN Media No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
Astral Media Inc. No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
NBCUniversal Media Yes 3.1x Yes 8.4x Because biggest transaction in space w as rejected, w e averaged it w ith the next biggest
Belo Corp. No 0.00 No 0.00 Implied EV, Revenue, and EBITDA is too small
AT&T Metric 139,121 42,269
Total Enterprise Value $407,172 $333,883 $310,375 $298,720
- Debt (126,930) (126,930) (126,930) (126,930)
- Preferred & Other (965) (965) (965) (965)
+ Cash 6,202 6,202 6,202 6,202
Equity Value $285,479 $212,190 $188,682 $177,027

Target Buyer Transaction
Company Type Company Type EV
(1)
Date Year Rationale Impl. EV Revenue EBITDA Revenue EBITDA
US Wireless
Cellco Partnership (Verizon Wireless)Wireless Verizon Integrated 297,407 September 2, 2013 2013 Consolidation 288,889 75,868 29,682 3.8x 9.7x
Leap Wireless Wireless AT&T Integrated 278,293 July 12, 2013 2013 Market Consolidation 1,200 3,051 467 0.4x 2.6x
Clearw ire Wireless Sprint Wireless 49,020 December 13, 2012 2012 Market Consolidation 6,127 1,260 (405) 4.9x neg'
Sprint Wireless SoftBank Integrated 149,070 October 15, 2012 2012 Diversification 29,346 35,404 4,479 0.8x 6.6x
Alltel Wireless Cellco Partnership Integrated N/A June 6, 2008 2008 Market Consolidation 6,063 9,040 3,201 0.7x 1.9x
SunCom Wireless Wireless T-Mobile Wireless 52,934 September 12, 2007 2007 Market Consolidation 1,600 920 151 1.7x 10.6x
US Wireless Average 2.1x 6.3x
US Wireline
TW Telecom Wireline Level 3 Communications Integrated 28,786 June 16, 2014 2014 Market Consolidation 5,800 1,591 518 3.6x 11.2x
Charter Communications Wireline Liberty Media Media 27,009 March 19, 2013 2013 Market Consolidation 2,600 7,504 2,644 0.3x 1.0x
Bresnan Broadband Wireline Charter Communications OperatingWireline N/A February 7, 2013 2013 Market Consolidation 1,600 509 163 3.1x 9.8x
Virgin Media Wireline Liberty Global Wireline 84,033 February 5, 2013 2013 Diversification 13,200 6,279 2,532 2.1x 5.2x
Atlantic Broadband Finance Wireline Cogeco Cable Wireline 4,888 July 18, 2012 2012 Diversification 1,400 329 145 4.3x 9.7x
Insight Communications Wireline Time Warner Cable Wireline 74,635 August 15, 2011 2011 Market Consolidation 3,000 1,064 369 2.8x 8.1x
Qw est Communications Wireline CenturyLink Wireline 36,104 April 22, 2010 2010 Market Consolidation 20,792 12,104 4,027 1.7x 5.2x
BellSouth Corporation Wireline AT&T Integrated 278,293 March 6, 2006 2006 Consolidation 79,780 20,547 8,772 3.9x 9.1x
MCI (Verizon Business Global) Wireline Verizon Integrated 297,407 February 14, 2005 2005 Consolidation 6,600 18,914 2,075 0.3x 3.2x
AT&T Corp. Wireline SBC Communications Wireline N/A January 30, 2005 2005 Consolidation 16,000 30,537 6,507 0.5x 2.5x
Satellite
DirecTV Satellite AT&T Integrated 278,293 May 18, 2014 2014 Diversification 47,900 32,029 8,156 1.5x 5.9x
Hughes Communications Satellite EchoStar Satellite 5,045 February 14, 2011 2011 Market Consolidation 1,300 1,043 209 1.2x 6.2x
Satellite Average 1.4x 6.0x
Columbus Communications Latin America Telecom Cable & Wireless CommunicationsIntegrated 7,732 November 6, 2014 2014 Diversification 1,900 505 213 3.8x 8.9x
Telefonos de Mexico Latin America Telecom America Movil Latin America Telecom 95,227 August 1, 2011 2011 Market Consolidation 9,694 8,040 3,193 1.2x 3.0x
Tele Norte Leste Participacoes Latin America Telecom Oi Latin America Telecom 10,592 May 24, 2011 2011 Market Consolidation 22,909 17,810 6,614 1.3x 3.5x
America Telecom Latin America Telecom America Movil Latin America Telecom 95,227 November 9, 2006 2006 Consolidation 36,304 12,490 4,036 2.9x 9.0x
Latin America Telecom Average 2.3x 6.1x
TV & Media
AOL Media Verizon Integrated 297,407 May 12, 2015 2015 Diversification 4,200 2,569 433 1.6x 9.7x
LIN Media Media Media General Media 4,141 March 31, 2014 2014 Market Consolidation 1,400 702 175 2.0x 8.0x
Astral Media Media Bell Media Media N/A March 16, 2012 2012 Market Consolidation 3,334 1,033 334 3.2x 10.0x
Belo Corp. Media TEGNA Media 10,594 June 13, 2013 2013 Market Consolidation 2,200 719 262 3.1x 8.4x
NBCUniversal Media Media Comcast Wireline 196,363 February 12, 2013 2013 Diversification 34,082 23,812 4,290 1.4x 7.9x
TV & Media Average 2.3x 8.8x
AT&T 2.0x 8.8x
LTM EV/LTM
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