Exhibit A DCF Value of Acquisition Opportunities
Risk Free Rate Risk Premium Asset Beta Asset Return
BCF New Markets Corporate EBITDA Depreciation EBIT Taxes EBIAT=NI Net Working Capital Capital Expenditures Depreciation Cash Flow Discount Factor PV of Cash Flow
PV of CF (01-04) 2004 TV PV of 2004 TV Total Enterprise Value
6.28%
7.20% 0.82 12.18%
2001
2002
2003
2004
76,436 1,529 74,907 90,420 (15,513) (5,274) (10,238)
89,711 1,794 87,917 90,840 (2,923) (994) (1,929) 3,875 2,100 90,840 82,935 0.7946 $65,899
101,966 2,039 99,927 91,260 8,667 2,947 5,720 3,726 2,100 91,260 91,154 0.7083 $64,563
115,277 2,306 112,971 91,680 21,291 7,239 14,052 3,800 2,100 91,680 99,832 0.6314 $63,030
30,795
2,100 90,420 47,287 0.8914 $42,151
[email protected] $235,643 2,086,514 1,317,339 $1,552,982
Terminal Value as a Growing Perpetuity 4.00% 6.00% 8.00%
$235,643
$235,643
$235,643
1,268,637 800,965 $1,036,608
1,711,221 1,080,394 $1,316,037
2,576,924 1,626,964 $1,862,607
Exhibit B Alternative Valuation of Acquisition Opportunities Assumptions
Growth rates: 2001-2015 Beyond 2015 Discount rate Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
10.00% 3.00% 12.18%
Cash Flow After-tax Discount Present EBITDA EBITDA Growth Depreciation Taxable Income Tax adjustments Cash Flow factor Value 74,907 90420 -15,513 -5,274 57525 47,286 0.8910 42,132 87,917 17.4% 90840 -2,923 -994 84865 82,935 0.7946 65,899 99,927 13.7% 91260 8,667 2,947 85434 91,154 0.7083 64,563 112,971 13.1% 91680 21,291 7,239 85780 99,832 0.6314 63,030 124,269 10.0% 92100 32,169 10,937 85820 107,051 0.5628 60,247 136,695 10.0% 92100 44,595 15,162 85402 114,835 0.5017 57,609 150,365 10.0% 92100 58,265 19,810 84942 123,397 0.4472 55,181 165,402 10.0% 92100 73,302 24,923 84436 132,815 0.3986 52,942 181,942 10.0% 92100 89,842 30,546 83879 143,175 0.3553 50,873 200,136 10.0% 92100 108,036 36,732 83267 154,571 0.3167 48,957 220,149 10.0% 92100 128,049 43,537 82594 167,107 0.2823 47,180 242,164 10.0% 92100 150,064 51,022 81854 180,896 0.2517 45,526 266,381 10.0% 92100 174,281 59,255 81039 196,064 0.2243 43,984 293,019 10.0% 92100 200,919 68,312 80143 212,749 0.2000 42,544 322,321 10.0% 92100 230,221 78,275 79157 231,103 0.1783 41,195 Total 781,860
2016 EBITDA=2015 grown by rate Less: Depreciation = Capital Exp. EBIT Less: Tax@34% EBIAT Less: Wkg Cap 2016 Normalized 2016 cash flow 2015 value of TV Discount factor in 2015 Present value of TV
331,990 2,100 329,890 112,163 217,728 3,578 214,150 2,331,769 0.1783 415,644
Present value of 2001-15 CF
781,860
Present value of TV
415,644
Total enterprise value
1,197,505
Exhibit C Valuation of Potential Acquisitions Using Trading Multiples Acquisition Value Industry Average
BCF EBITDA
Radio One
Hispanic
76436
Multiple 18.1
Value 1,383,492
Multiple 22.1
Value 1,689,236
Multiple 42.1
Value 3,217,956
74907.28
19.4
1,453,201
24.2
1,812,756
44.5
3,333,374
After-tax Cash Flow 74,681 26.1 1,949,169 36.5 2,725,849 59.7 4,458,444 Average 1,595,287 2,075,947 3,669,925 The after-tax cash flow for Radio One is normalized to rem ove the effect of the initial working capital funding in 2001. The normalized after-tax cash flow is calculated as: 2001 After-tax cash flow Plus: Initial working capital funding Less: Workin capital for change in sales from 2000-2001 at 24% of net revenue Normalized after-tax cash flow
47,287 30,795 3,401 74,681
