Exhibit TN-1 DCF Value of Acquisition Opportunities
Risk Free Rate= Risk Premiun= 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 En Enterprise Va Value
6 . 2 8% 7.20% 0 .8 2 12.18% 2001 76,436 1,529 74,907
2002 89,711 1,794 87,917
2003 101,966 2,039 99,927
2004 115,277 2,306 112,971
90,420 (15,513) (5,274) (10,238) 30,795 2,100 90,420 47,287 0.8914 42,151
90,840 (2,923) (994) (1,929) 3,875 2,100 90,840 82,935 0.7944 65,899
91,260 8,667 2,947 5,720 3,726 2,100 91,260 91,154 0.7080 64,563
91,680 21,291 7,239 14,052 3,800 2,100 91,680 99,832 0.6310 63,030
[email protected] 235,643 2 ,0 8 6 ,5 1 4 1 ,3 1 6 ,5 8 8 1 ,5 5 2 ,2 3 1
Terminal Value as a growing perpetuity 4% 6% 8% 235,643 235,643 235,643 1,268,637 1,711,221 2,576,924 800,508 1,079,778 1,626,036 1,036,152 1,315,422 1,861,680
Exhibit TN-2 Net Working Capital as a Percen of Revenues
Percentage of Reve Revenues Net Trade/Accounts Accounts Accounts Accounts of Commissions Receivable Payable Receivable Payable 1997 32,367 8,722 258 27% 1% 1998 46,109 12,026 1,190 26% 3% 1999 81,703 19,833 1,663 24% 2% Average
26%
2%
nues Net Working Capital 26% 24% 22% 24%
Exhibit TN-3 Alternative Valuation of Acquisition Opportunities
Assumptions Growth rates: 2001-2015 Beyond 2015 Discount rate
10% 3% 12.2%
Year 2001
EBITDA 74,907
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
87,917 99,927 112,971 124,269 136,695 150,365 165,402 181,942 200,136 220,149 242,164 266,381 293,019 322,321
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
EBITDA Growth
17.40% 13.66% 13.05% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Depreciation 90,420
90,840 91,260 91,680 92,100 92,100 92,100 92,100 92,100 92,100 92,100 92,100 92,100 92,100 92,100 331,990 (2,100) 329,890 (112,163) 217,728 (3,578) 214,150 2,331,767 0.178
Present value of TV
414,756
Present value of 2001-15 CF
781,879
Taxable Income
(15,513) (2,923) 8,667 21,291 32,169 44,595 58,265 73,302 89,842 108,036 128,049 150,064 174,281 200,919 230,221
Tax (5,274)
(994) 2,947 7,239 10,937 15,162 19,810 24,923 30,546 36,732 43,537 51,022 59,255 68,312 78,275
Cash Flow Adjustments
57,525 84,865 85,434 85,780 85,820 85,402 84,942 84,436 83,879 83,267 82,594 81,854 81,039 80,143 79,157
Present value of TV Total enterprise value
414,756 1,196,635
After-tax Cash Flow
47,287 82,935 91,154 99,832 107,051 114,835 123,397 132,815 143,175 154,571 167,107 180,896 196,064 212,749 231,103
Discount Factor
Present Value
0.891 0.794 0.708 0.631 0.562 0.501 0.447 0.398 0.355 0.316 0.282 0.251 0.224 0.200 0.178
42,151 65,880 64,535 62,994 60,204 57,559 55,126 52,881 50,808 48,888 47,106 45,448 43,903 42,459 41,107
Total
781,879
Change in net working capital 30,795 3,875 3,726 3,800 4,180 4,598 5,058 5,564 6,121 6,733 7,406 8,146 8,961 9,857 10,843
2 3 4 5 6 7 8 9 10 11 12 13 14 15
Exhibit TN-4 Valuation of Potential Acquisitions Using Trading Multiples Industry Average Acquisition Value BCF EBITDA After-tax Cash Flow
Radio One
Multiple Value multiple Value 76,436 18.1 1,383,492 22.1 1,689,236 74,907 19.4 1,453,201 24.2 1,812,756 74,681 26.1 1,949,169 36.5 2,725,849
Hispanic Multiple Value 42.1 3,217,956 44.5 3,333,374 59.7 4,458,444
