AT&T

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Drexel Hamilton	Barry M. Sine	bsine@drexelhamilton.com
Cowen & Company	Colby Synesael	colby.synesael@cowen.com
FBR Capital Markets & Co	David Dixon	ddixon@fbr.com
Raymond James	Frank G. Louthan IV	frank.louthan@raymondjames.com
William Blair	James D. Breen	jbreen@williamblair.com
DA Davidson	James Moorman	jmoorman@dadco.com
Buckingham Research	James Ratcliffe	jratcliffe@buckresearch.com
Scotiabank GBM	Jeffrey Fan	jeff.fan@scotiabank.com
Nomura Research	Jeffrey Kvaal	jeffrey.kvaal@nomura.com
Wells Fargo Securities	Jennifer M. Fritzsche	jennifer.fritzsche@wellsfargo.com
RBC Capital Markets	Jonathan Atkin	jonathan.atkin@rbccm.com
Evercore ISI	Jonathan Schildkraut	schildkraut@evercoreisi.com
Credit Suisse	Joseph Mastrogiovanni	joseph.mastrogiovanni@credit-suisse.com
Deutsche Bank Research	Matthew Niknam	matthew.niknam@db.com
Pacific Crest Securities-KBCM	Michael G. Bowen	mbowen@pacific-crest.com
Jefferies	Mike McCormack	mmccormack@jefferies.com
Bernstein Research	Paul de Sa	paul.desa@bernstein.com
Oppenheimer	Timothy Horan	tim.horan@opco.com
BTIG	Walter Piecyk	wpiecyk@btig.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	16,012	16,818	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	15,865	16,936	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	1,411	1,628	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	(21,410)	(22,847)	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	-74.79%	-73.61%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	14,671	24,410	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	91.62%	145.14%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	7.07%	6.12%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	5.53%	5.52%
Enterprise value	EV_Market	321,887	374,979	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	323,929	368,739
Long-Run Growth	g = IR x ROIC	-68.52%	-106.84%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	16.78%	15.80%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	47.19%	49.97%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	2.19	2.29	1.97%	1.54%	2.23%	2.67%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	6.90	7.25	1.97%	1.54%	2.23%	2.67%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	20.10	22.30	1.97%	1.54%	2.23%	2.67%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	20.29	22.14	1.97%	1.54%	2.23%	2.67%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	13.07	14.49	1.97%	1.54%	2.23%	2.67%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	-15.03	-16.41	1.97%	1.54%	2.23%	2.67%