Exhibit TN-1 DCF Value of Acquisition Opportunities
RiskFreeRate= RiskPremiun= Asset Beta= AssetReturn=
BCFNewMarkets Corporate EBITDA Depreciation EBIT Taxes EBIAT=NI NetWorkingCapital CapitalExpenditures Depreciation Cash Flow DiscountFactor PVofCashFlow
PVofCF(01-04) 2004TV PVOf2004TV TotalEnterpriseValue
6.28% 7.20% 0.82 12.18% 200 1 76,436 1,529 74,907 90,420 (15,513) (5,274) (10,238) 30,795 2,100 90,420 47,287 0.8914
42,151
[email protected] 235,643 2,086,514 1,316,588 1,552,231
200 2 89,711 1,794 87,917 90,840 (2,923) (994) (1,929) 3,875 2,100 90,840 82,935 0.7944
2 003 101,966 2,039 99,927 91,260 8,667 2,947 5,720 3,726 2,100 91,260 91,154 0.7080
2004 115,277 2,306 112,971 91,680 21,291 7,239 14,052 3,800 2,100 91,680 99,832 0.6310
65,899
64,563
63,030
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 of Commissions Receivable 1997 1998 1999
32,367 46,109 81,703
8,722 12,026 19,833
Accounts Payable 258 1,190 1,663 Average
Accounts Receivable 27% 26% 24% 26%
Accounts Payable 1% 3% 2% 2%
nues Net Working Capital 26% 24% 22% 24%
Exhibit TN-3 Alternative Valuation of Acquisition Opportunities
Assumptions Growth rates: 2001-2015 Beyond2015
10% 3%
Discountrate
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
2016EBITDA=2015grownbyrate Less:Depreciation=capitalExp. EBIT Less: Tax@34% EBIAT Less:WkgCap2016 Normalized2016CashFlow 2015valueofTV Discountfactorin2015 PresentvalueofTV Presentvalueof2001-15CF
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 0.178 414,756 781,879
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
Cash Flow Adjustments Tax (5,274) 57,525
(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
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
PresentvalueofTV Totalenterprisevalue
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
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 Total
Present Value
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 41,107 781,879
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 IndustryAverage Acquisition Value BCF EBITDA After-tax Cash Flow
Multiple
Value
RadioOne multiple
Value
76,436
18.1
1,383,492
22.1
1,689,236
74,907 74, 681
19.4 26.1
1,453,201 1,949,169
24.2 36.5
1,812,756 2,725,849
Hispanic Multiple
Value
42.1
3,217,956
44.5 59.7
3,333,374 4,458,444
