Wells Fargo Wireless Auction October 14

Please see page 21 for rating definitions, important disclosures and required analyst certifications All estimates/forecasts are as of 10/02/14 unless otherwise stated.

Wells Fargo Securities, LLC does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of the report and investors should consider this report as only a single factor in making their investment decision.

October 2, 2014

Equity Research

Broadcast: A Detailed Look At the Incentive Auction We took a detailed look at spectrum using the FCCs reserve prices. On

10/1, the FCC released an information packet (Incentive Auction Opportunities For Broadcasters) that is flush with information for those station groups eligible to participate in the Incentive Auction. This intensely complex document has a lot of incremental data--the most important to us being i) the FCCs estimated reserve prices by market, and ii) a partial description of the potential tax implications. In this note, we summarize the most important aspects of the broadcast incentive auction as well as the recent FCC document. Perhaps most valuable is how we use the new data to provide both a total spectrum portfolio value as well as hidden spectrum value for all publicly traded station groups. BOTTOM LINE: We found SBGI and NXST have the greatest spectrum portfolio value as a % of equity and enterprise value; while NXST and MEG have the highest hidden spectrum value.

A quick review of the incentive auction: The broadcast incentive auction originated from the governments National Broadband Plan (2010), which aims to provide 100MM homes with internet speeds of 100Mbps down by 2020. To do this, the FCC has been requested to make 500MHz of spectrum available for broadband use, with 120MHz coming from broadcasters via a voluntary incentive auction that is comprised of 3 parts: 1) A reverse auction, whereby TV licensees bid to voluntarily relinquish spectrum in exchange for payments, 2) A forward auction, whereby wireless suitors bid on that relinquished spectrum, and 3) A repacking of the TV band so that both TV and wireless spectrum can once again be contiguous. The FCC still intends to conduct this auction in mid-2015, but we wouldnt be surprised to see this pushed given the various complexities.

FINALLY--we got the reserve prices! In the information packet, the FCC provided estimated station reserve prices for 210 DMAs (Designated Market Areas). Two things here: 1) it sounds like the FCC will eventually have different reserve prices for each eligible station in every market, and 2) the reserve prices are NOT based strictly on per-MHz pop valuations like weve seen in wireless spectrum auctions. As the document states, the FCC used a top-down methodology that values each station according to its relative interference value that reflects its footprint and its impact on adjacent stations it overlaps with.

Were still pulling our hair out over the potential tax implications. We read the FCC document, the IRS letter and way too many sections of the Internal Revenue Code cover to cover. And while it is sort of clear as to how the potential gains will be taxed upon both relinquishment of spectrum as well as repacking, we still dont know how to calculate such gains because WE HAVE NO IDEA HOW THE IRS IS DETERMINING THE COST BASIS OF THE BROADCAST SPECTRUM. We certainly dont believe the cost basis should be $0, but given lack of clarity, we have no choice but to make this assumption until we get more info.

Our station portfolio analysis: We did some cool stuff here! We tried calculating spectrum values in our 5/17/13 piece: TV: Spectrum Values Provide A Pretty Nice Floor. To be honest, that was probably more of a theoretical exercise vs. anything else. In this note, we use REAL reserve prices as well as various tax rates to provide a more realistic view of spectrum portfolio value as well as hidden value. Based on our analysis, companies with the GREATEST median spectrum portfolio value as a % of enterprise value are SBGI (52%), NXST (49%), and MEG (27%) after a 20% tax on proceeds and companies with the GREATEST hidden spectrum value are: NXST ($11/sh.), MEG ($4), and TRBAA ($3).

Media & Cable

Marci Ryvicker, CFA, CPA, Senior Analyst(212) 214-5010 /

marci [email protected] Huh, Associate Analyst

(212) 214-8044 / [email protected]

Eric Katz, Associate Analyst(212) 214-5011 /

[email protected] Bisson, Associate Analyst

(212) 214-8033 / [email protected]

WELLS FARGO SECURITIES, LLC Media & Cable EQUITY RESEARCH DEPARTMENT

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We took a detailed look at spectrum value using updated information as provided by the FCC. On October 1st, the FCC released an information package entitled Incentive Auction Opportunities For Broadcasters that is flush with information for those station groups eligible to participate in the Incentive Auction. This intensely complex document was specifically prepared for the FCC by investment firm Greenhill and Co. Inc. and has a lot of incremental data--the most important to us being i) the FCCs estimated reserve prices by market, and ii) a partial description of the potential tax implications (we explain why we say partial below). We read the document(s); and while the FCC is planning to host a call on the specifics at some point on 10/2, we felt the need to get our initial thoughts out given the number of incoming calls we have received from investors. So, in this note, we summarize the most important aspects of the broadcast incentive auction as well as the recent FCC document. Perhaps most important is that we use the new data to provide both a total spectrum portfolio value as well as spectrum option value for all publicly traded station groups. BOTTOM LINE: We found SBGI and NXST have the greatest spectrum portfolio value as a % of equity and enterprise value; while NXST and MEG have the highest hidden spectrum value. A quick review of the broadcast incentive auction: Recall that the broadcast incentive auction originated from the governments National Broadband Plan (2010), which aims to provide 100MM homes with internet speeds of 100Mbps down by 2020. To do this, the FCC has been requested to make 500MHz of spectrum available for broadband use, with 120MHz coming from broadcasters. The FCC has been given the authority via the JOBS Act (2012) to reclaim this spectrum through a voluntary incentive auction that is comprised of three parts: 1) A reverse auction in which broadcast television licensees bid to voluntarily relinquish spectrum usage rights in

exchange for payments.

2) A forward auction whereby wireless companies bid on that relinquished spectrum.

3) A repacking of the TV band so that both TV and wireless spectrum can once again be contiguous.

The FCC still intends to conduct this auction in mid-2015, but we wouldnt be surprised to see this pushed to 2016 given the complexities FINALLY--we got the reserve prices! One of the most important aspects of this auction that we (and the broadcasters) have been waiting for is the potential reserve prices (or net proceeds) that the station groups can expect to receive in the reverse auction. The FCCs document provides just this--for roughly 210 DMAs (Designated Market Areas). A FEW THINGS HERE: 1) In reading the insane amount of paper we have in front of us, it sounds like the FCC will assign a different reserve

price to each eligible station in each eligible market. However, in this information package, the FCC merely provides two EXAMPLES for each market--one being the median reserve price for the stations in the market and one being the maximum reserve price for the best station in the market.

2) Importantly, the reserve prices do NOT seem to be based strictly on per-MHz pop valuations from prior spectrum auctions (this is how wireless spectrum is valued). Summarized best by Broadcasting & Cable, the FCC employs a top-down methodology that gives each station a weighted interference value that reflects its footprint and its impact on adjacent stations it overlaps with. A station with a big footprint and a lot of overlap with other stations would have a higher interference value--and command a higher value--than one in a more rural area that may

WELLS FARGO SECURITIES, LLC Broadcast: A Detailed Look At the Incentive Auction EQUITY RESEARCH DEPARTMENT

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not overlap with many stations or cover as large a number of people. That is because if the FCC doesnt get that one station with the bigger footprint, it might have to buy three or four stations to achieve the same repacking.

We provide a complete list of the FCCs estimated reserve prices (both median and maximum) excerpted directly from the Information Package in Appendix 1 on pages 11-15. As part of Appendix 2 (pages 16-20) we also provide the per-MHz pop valuations implied by the FCCs estimated reserve prices--which we use to compare to the per-MHZ pop valuations that resulted from the 2008 wireless spectrum auction (Auction 73). We still pull our hair out over the potential tax implications. We read the FCC document, the IRS letter and way too many sections of the Internal Revenue Code cover to cover. And while it is sort of clear as to how the potential gains will be taxed upon both relinquishment of spectrum as well as repacking, we still dont know how to calculate such gains because WE HAVE NO IDEA HOW THE IRS IS DETERMINING THE COST BASIS OF THE BROADAST SPECTRUM. We certainly dont believe the cost basis should be $0. We do understand that the broadcasters initially received this spectrum for free. BUT: (i) since that time, 96% of spectrum has changed hands via M&A, providing a pretty clear basis; and (2) these companies have spent a lot of money in building a business model around the free spectrum, which should also be taken into account when calculating the cost basis. Unfortunately, the IRS does a pretty poor job of providing any clarity here, so we really had no choice but to use a $0 cost basis assumption in some of our calculations below (see page 9). We intend to update our analyses and conclusions once we have more information (whenever that may be). Now, onto what we DO know. The most important thing we learned from the FCC document is that the tax treatment of any sale of spectrum will be determined by HOW a broadcast owner decides to participate in the auction. If a broadcaster outrights sells spectrum with no channel sharing or move to VHF, the gain from the sale of such spectrum will be treated as a long-term capital gain as long as the rights to that spectrum were held for longer than one year. If spectrum is relinquished through channel sharing, there are two potential outcomes: 1) In a partnership, the relocating party may qualify for deferral from tax for the portion of the gain associated with

moving to a shared channel. 2) In a cost-sharing arrangement, the gain will be taxed as if it is a straight relinquishment of spectrum (i.e. long

term capital gain if held for one year).

Lastly, if spectrum is relinquished via a move from UHF to VHF, the broadcaster can defer immediate taxation of a portion of the gain resulting from the relinquishment of existing spectrum rights in exchange for a VHF channel under the like-kind exchange provisions of the Internal Revenue Code. The proceeds under this option would constitute boot and any gain attributable to such boot must be reported in gross income.

The last part of the tax document confirms that there will be NO taxation on any reimbursement of repacking/ relocating costs. Other stuff we learned from the Incentive Auction Opportunities For Broadcasters: The documents begin with an overview of the incentive auction and its relevance--reiterating that this process is COMPLETELY VOLUNTARY.

A couple of the more interesting parts of this document: IT IS NOT JUST LARGE MARKET STATIONS that are being targeted for participation. Specifically, the FCC

says that due to the daisy chain nature of interference, stations in mid- to smaller-sized markets will be valuable in this process. In other words, adjacent markets (regardless of size) may also be needed to help clear the most congested top markets.


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PARTICIPATION OF OVER 200 BROADCASTERS IS NEEDED (we dont know what happens if the FCC doesnt hit this target).

Independent studies have estimated that the total auction proceeds (FORWARD AUCTION) could

approach $45B. This assumes 100MHz of spectrum sold for an average of $1.50/MHzPop.

Total net proceeds to the broadcasters COULD approach $38B (although we question how realistic this is given that the FCC has no intention of allowing station groups to receive a windfall from this aucti0n). We get to this $38B by subtracting from that $45B above: i) $5B to cover the costs of FirstNet that are not covered by the H Block and AWS-3 auctions; ii) $1.75B for the TV Broadcaster Relocation Fund; and iii) $250MM for auction-related costs.

The FCC has a 126MHz clearing target the difference between the 126MHz and the 100MHz that is actually being sold has to do with guard bands and the duplex gap (buffers between TV and wireless services sharing the band), which are not available for auctioning.

An overview of prior wireless auctions and recent secondary transactions: The document goes on to provide an overview of the last auction (Auction 73 in 2008), whereby 62MHz of spectrum in the 700MHz band (right next to the TV stations) went for $19B, with an average unit price for all blocks of $1.28 per MHz-pop and an average unit price for paired blocks (most comparable to the TV stations 600MHz band) of $1.35 per MHz pop.

Somewhere in the middle, the FCC highlighted rising spectrum valuations and included a summary of the most recent transactions (see our chart below). Major Wireless Spectrum Transactions Over The Last Several Years

ATT-Qualcom700 MHz Band

$1.9 billion

Verizon-SpectrumCoAWS Band$3.6 billion

Verizon-Grain700 MHzBand$189 million

T-Mobile-USCCAWS Band

$308 million

T-Mobile-USCC700 MHz Band

$3.3 billion

Dec. 2010 Dec. 2011 Jan. 2013 June 2013 Jan. 2014

Source: FCC and Wells Fargo Securities, LLC Recent Transaction Comps For 700MHz and AWS Spectrum

$4.25

$4.00

$0.54

$1.29

$0.85 $0.68 $0.52

$4.08

$0.96

$1.85

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Feb-05 Jul-06 Nov-07 Mar-09 Aug-10 Dec-11 May-13 Sep-14

($ /

MHz

-POP

)

700MHz

AWS transactions

AWS-1 auction

700MHzauction

Qualcom / AT&T

Verizon / CoxVerizon / SpectrumCo

T-Mobile / US Cellular

T-Mobile / Verizon700MHz A Block

Grain / Verizon700MHz B Block

Source: FCC and Wells Fargo Securities, LLC


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As the FCC states, MHz-POP unit prices for spectrum licenses have increased at a 6% CAGR over auction prices, or approximately 33% over a five-year period IF WE WERE TO APPLY THAT 6% CAGR SINCE THE 2008 AUCTION, WE WOULD GET AN AVERAGE PER MHZ POP VALUE OF $2.03 BY 2015 (this compares to the FCCs current target valuation of $1.50/MHzPop). Ways in which the broadcast stations can participate in the reverse auction: The document goes on to remind us of the various ways that the broadcasters can participate in the reverse auction--we summarize these here, as this is a question that comes up often from the investment community.

1) A station can relinquish its entire 6MHz channel and go off the air

This would result in the highest level of compensation. A broadcaster has up to 3 months after it receives proceeds to cease operations

2) A broadcaster can CHANNEL SHARE by relinquishing its entire 6MHz channel and negotiate a commercial

arrangement with another broadcaster to share channels/facilities and stay on the air (by the way, this is explicitly why we do NOT think SSAs are going away--Shared Service Agreements (SSAs) are needed to channel share).

This allows broadcasters to remain on the air while receiving the same level of compensation as in (1) above. Each shared station remains a primary FCC licensee with all current licensee rights ESPECIALLY MUST

CARRY Those that channel share must vacate the relinquished channel within 3 months of receiving compensation

3) A broadcaster can MOVE TO A VHF station by relinquishing its 6MHZ UHF station in exchange for another

channel

Broadcasters will retain must carry rights on their new channel Broadcasters choosing this option will have up to 39 months after the Incentive Auction ends to move to the

new channel.

4) There is a FOURTH option that we did NOT know about (maybe we missed it in earlier documents--who knows?). Here, a HIGH VHF broadcaster can move to a LOWER VHF channel.

Broadcasters will retain must carry rights on their new channel Broadcasters choosing this option will have up to 39 months after the Incentive Auction ends to move to the

new channel.

A few things to remember here: (1) Every channel is comprised of 6MHz of spectrum; but (2) NOT EVERY CHANNEL has the right kind of spectrum. The FCC is primarily looking for FULL POWER UHF, some HIGH VHF, and Class A stations--all of which must have been licensed as of February 22, 2012.

The mechanics of the reverse and forward auction proceedings: A big portion of this document describes the specific mechanics of both the reverse and the forward auctions. We re-print both sections below.


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Descripti0n of Reverse Auction Proceeding

Round Bid Price Stations Accepting Bid Price Stations in Excess of Clearing Target

(1) $$$$$$ 3 stations

(2) $$$$$ 1 station Dropped out part icipantsrepacked into pre-auction band

(3) $$$$ 1 station

(4) $$$ 0 station Market clears / dropped out part icipantsrepacked into pre-auction band

(1) (2)

(3) (4)

The Reverse AuctionWill Use A Descending Clock Format to Make Participation Easy And Transparent For Broadcasters

IllustrativeReverse Auction Example Where 2 Stations Are Needed(Assumes technically identical stations)

i . The Reverse Auction begins with a Clearing Target of 2 stations and an Opening Price of $$$$$$

ii. 5 stations accept this Opening Price

ii i . Since there are 3 stations above the Clearing Target, the market does not clear and the new round of bidding begins with a lower bid price

i. The second round begins with a price of $$$$$

ii. Only 3 stations accept this price

i i i . Since there is 1 station above the Clearing Target, themarket does not clear and the new round of bidding begins with a lower price

i. The third round begins with a price of $$$$

ii. Al l 3 remaining stations sti l l bid to accept this bid price

i i i . Since there is 1 station above the Clearing Target, themarket does not clear and the new round of bidding begins with a lower price

i. The fourth round begins with a price of $$$

ii. 2 stations accept this price

i i i . Since there are no stations above the Clearing Target, the current stage of the Reverse Auction ends

Source: FCC and Wells Fargo Securities, LLC


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Description of Forward Auction Proceeding

Round Price/Block Bidder 1 Bidder 2 Excess Demand

(4) $$$$$ 2 Blocks 4 Blocks 0 Blocks --- Prices set

(3) $$$$ 3 Blocks 4 Blocks 1 Block

(2) $$$ 4 Blocks 4 Blocks 2 Blocks

(1) $$ 6 Blocks 6 Blocks 6 Blocks

(1) (2)

(3) (4)

The Forward Auction Is Designed To Be Efficient And Fast To Draw In Maximum Participation From Wireless Providers

IllustrativeForward Auction Example With 6 Blocks For Sale

i . The Forward Auction begins with 6 blocks for saleand an opening Bid Price of $$

ii . Bidder 1 and Bidder 2 each demand 6 blocks

ii i . Since there are 6 blocks of excess demand, a newround begins with a higher price per block

i. The round begins with a Bid Price of $$$

ii. Bidder 1 and Bidder 2 each reduce their demand by 2blocks

ii i . Since there are 2 blocks of excess demand, a new round begins with a higher price per block

i. The round begins with a Bid Price of $$$$

ii. Bidder 1 reduces its demand by 1 block

ii i . Since there is 1 block of excess demand, a newround begins with a higher price per block

i. The round begins with a Bid Price of $$$$$

ii. Bidder 1 reduces its demand by 1 additional block

ii i . Since there is no excess demand for blocks, the current stage of the Forward Auction ends

Source: FCC and Wells Fargo Securities, LLC Integration of the reverse and forward auction proceedings: There is also an explanation as to how the FCC intends to integrate the reverse and forward auctions. Here are the specific steps as outlined in the information packet: 1) Prior to the incentive auction, the FCC will determine an initial spectrum clearing target based on the number of

broadcasters willing to bid at opening prices.

2) The reverse auction bidding process will determine the total amount of incentive payments to broadcasters required to clear that target level of spectrum.

3) The forward auction bidding process will proceed subsequent to the reverse auction and will determine how much

wireless providers are willing to pay for spectrum licenses corresponding to that target level of spectrum. If forward auction proceeds cover the reverse auction bids as well as fund the Relocation Fund and satisfy

other requirements of the Final Stage Rule, then the incentive auction will close at that spectrum clearing target.

If forward auction proceeds DO NOT cover the reverse auction bids, etc., then the clearing target will be reduced and the reverse and forward auction bidding process will be repeated until the Final Stage Rule is met (this Final Stage Rule is very technical--we wont reprint it here because our eyes are bleeding but you can find it by clicking this link: http://www.fcc.gov/document/fcc-adopts-rules-first-ever-incentive-auction-0).

Repacking the TV band upon auction completion: One of the final parts of the document describes the repacking process for those stations that remain in existence post auction close. Remember that the key to success for the forward auction is to ultimately provide wireless companies with CONTIGUOUS spectrum, which means ALL broadcasters--whether they participate in the auction or not--are likely to be moved, or repacked. As part of the JOBS Act, the FCC has earmarked $1.75B for reimbursement of relocation costs.


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Results from the L.A. channel sharing test: Last but not least, the FCCs document sheds light on the results from the Channel Sharing trial that had been held in Los Angeles in early 2014. If you recall, PBS affiliate KLCS and Spanish Language affiliate KJLA tested the technical feasibility of having two different licensees share a single 6MHz channel. Data from the trial suggested (among other things):

Channel sharing is feasible--all TVs and tuners received and correctly parsed the required information; One HD stream is possible with numerous SD programs (the trial tested 1 HD and up to 7SD streams); and It is technically feasible to have two 720p high def streams combine with 2 SD program streams WE USED THE FCCS RESERVE PRICES TO CALCULATE SPECTRUM PORTFOLIO VALUES: One of the questions we anticipate getting from the investment community is what are the publicly traded TV station groups worth from a spectrum portfolio perspective? We tried to answer this once already--in our note dated May 17, 2013 and entitled TV: Spectrum Values Provide A Pretty Nice Floor. But in that analysis, we used the MHz-pop prices from the 2008 wireless auction to come up with theoretical values. We also neglected to tax-effect any potential proceeds. In this analysis, however, we use real information as provided by the FCC--specifically the reserve price as shown in the information package and which we reprint in Appendix 1 on pages 11-15). A few things to point out to help you understand how we came up with our calculations: We use ONLY UHF full power and Class A stations--we give $0 value to VHF stations; We include all shared stations whether the FCC license is owned or not; We provide a tax-adjusted number under three different scenarios: 0% (to show the pure amount of proceeds),

20% and 40% (quite frankly, these were sort of random); Our cost basis is unfortunately $0 given lack of clarity from the IRS; and We use both the median and maximum reserve prices as provided by the FCC staff (again in Appendix 1 on page 11-

15) Once we calculated the specific portfolio values, we compared the resulting figures to each publicly traded companys current equity AND enterprise value (the EV is something we didnt do in our May 2013 note but should have). ACCORDING TO OUR CALCULATIONS, companies with the GREATEST spectrum portfolio values (on a 20% tax-adjusted rate) as a PERCENT OF CURRENT EQUITY AND ENTERPRISE VALUE INCLUDE: SBGI, NXST, MEG, and GTN; while the diversifieds have the LOWEST spectrum portfolio values as a percent of current equity and enterprise value (no surprise here). We do provide a caveat from the FCCs published documents--The reserve prices are estimated high payouts that illustrate the economic potential of the auction. In the actual auction, prices will be bid down in many markets and payouts to many winning bidders will be lower as a result. On a nationwide basis, it is anticipated that forward auction revenues will exceed the winning bid amounts and the other requirements specified by the final stage rule. Those additional revenues will be deposited in the Public Safety Trust to advance the financial goals identified by Congress in the Spectrum Act.


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FCC Median And Maximum Spectrum Valuations as a % of Equity Value And Enterprise Value (figures in millions, except per share and percentage data)

FCC Med. FCC Max. Diluted sh Med. Val. Max. Val. 10/1/2014 Enterprise Med. Spec. Val. Max. Spec. Val. Med. Spec. Val. Max. Spec. Val.Ticker Spec. Val. Spec. Val. O/S (Q2'14) / Sh / Sh Close Price Val. % of Price % of Price % of EV % of EVSBGI $3,681 $5,134 98 $37.61 $52.46 $25.79 $5,715 146% 203% 64% 90%NXST $1,428 $2,016 32 $44.72 $63.13 $39.68 $2,335 113% 159% 61% 86%MEG $1,471 $2,022 137 $10.74 $14.76 $12.72 $4,399 84% 116% 33% 46%GTN $466 $657 58 $7.99 $11.27 $7.71 $1,541 104% 146% 30% 43%MDP $636 $920 37 $17.29 $25.01 $42.33 $2,235 41% 59% 28% 41%TRBAA $2,501 $3,503 94 $26.69 $37.39 $63.06 $8,839 42% 59% 28% 40%CBS $2,909 $4,077 581 $5.01 $7.02 $52.81 $34,124 9% 13% 9% 12%GCI $602 $985 232 $2.59 $4.24 $29.21 $10,707 9% 15% 6% 9%FOXA $1,786 $2,276 2,228 $0.80 $1.02 $33.70 $88,727 2% 3% 2% 3%CMCSA $3,322 $4,633 2,628 $1.26 $1.76 $52.93 $181,949 2% 3% 2% 3%DIS $146 $160 1,728 $0.08 $0.09 $87.49 $163,148 0% 0% 0% 0%

Note: spectrum valuations are pro forma for all announced acquisitions; Source: TvB, BIA, Public FCC Documents, FactSet and Wells Fargo Securities, LLC estimates 20% Tax Effected FCC Median And Maximum Spectrum Valuations as a % of Equity Value And Enterprise Value (figures in millions, except per share and percentage data)

20% Tax-effectedFCC Med. FCC Max. Diluted sh Med. Val. Max. Val. 10/1/2014 Enterprise Med. Spec. Val. Max. Spec. Val. Med. Spec. Val. Max. Spec. Val.

Ticker Spec. Val. Spec. Val. O/S (Q2'14) / Sh / Sh Close Price Val. % of Price % of Price % of EV % of EVSBGI $2,945 $4,107 98 $30.09 $41.97 $25.79 $5,715 117% 163% 52% 72%NXST $1,142 $1,613 32 $35.78 $50.51 $39.68 $2,335 90% 127% 49% 69%MEG $1,177 $1,618 137 $8.59 $11.81 $12.72 $4,399 68% 93% 27% 37%GTN $373 $526 58 $6.39 $9.01 $7.71 $1,541 83% 117% 24% 34%MDP $509 $736 37 $13.83 $20.01 $42.33 $2,235 33% 47% 23% 33%TRBAA $2,001 $2,802 94 $21.36 $29.91 $63.06 $8,839 34% 47% 23% 32%CBS $2,327 $3,262 581 $4.01 $5.61 $52.81 $34,124 8% 11% 7% 10%GCI $482 $788 232 $2.07 $3.40 $29.21 $10,707 7% 12% 4% 7%FOXA $1,429 $1,821 2,228 $0.64 $0.82 $33.70 $88,727 2% 2% 2% 2%CMCSA $2,658 $3,706 2,628 $1.01 $1.41 $52.93 $181,949 2% 3% 1% 2%DIS $117 $128 1,728 $0.07 $0.07 $87.49 $163,148 0% 0% 0% 0% Note: spectrum valuations are pro forma for all announced acquisitions; Source: TvB, BIA, Public FCC Documents, FactSet and Wells Fargo Securities, LLC estimates 40% Tax Effected FCC Median And Maximum Spectrum Valuations as a % of Equity Value And Enterprise Value (figures in millions, except per share and percentage data)

40% Tax-effectedFCC Med. FCC Max. Diluted sh Med. Val. Max. Val. 10/1/2014 Enterprise Med. Spec. Val. Max. Spec. Val. Med. Spec. Val. Max. Spec. Val.

Ticker Spec. Val. Spec. Val. O/S (Q2'14) / Sh / Sh Close Price Val. % of Price % of Price % of EV % of EVSBGI $2,209 $3,080 98 $22.57 $31.48 $25.79 $5,715 88% 122% 39% 54%NXST $857 $1,210 32 $26.83 $37.88 $39.68 $2,335 68% 95% 37% 52%MEG $883 $1,213 137 $6.44 $8.85 $12.72 $4,399 51% 70% 20% 28%GTN $280 $394 58 $4.79 $6.76 $7.71 $1,541 62% 88% 18% 26%MDP $382 $552 37 $10.38 $15.01 $42.33 $2,235 25% 35% 17% 25%TRBAA $1,501 $2,102 94 $16.02 $22.43 $63.06 $8,839 25% 36% 17% 24%CBS $1,745 $2,446 581 $3.00 $4.21 $52.81 $34,124 6% 8% 5% 7%GCI $361 $591 232 $1.56 $2.55 $29.21 $10,707 5% 9% 3% 6%FOXA $1,072 $1,366 2,228 $0.48 $0.61 $33.70 $88,727 1% 2% 1% 2%CMCSA $1,993 $2,780 2,628 $0.76 $1.06 $52.93 $181,949 1% 2% 1% 2%DIS $88 $96 1,728 $0.05 $0.06 $87.49 $163,148 0% 0% 0% 0% Note: spectrum valuations are pro forma for all announced acquisitions; Source: TvB, BIA, Public FCC Documents, FactSet and Wells Fargo Securities, LLC estimates WE USED THE FCCS RESERVE PRICES TO CALCULATE EACH GROUPS HIDDEN SPECTRUM VALUE Up until now, weve had a hard time giving the broadcasters credit for any hidden value when it comes to spectrum given a) they USE this spectrum to run their day-to-day business; and b) while they dont need ALL 6MHz of every channel to broadcast an HD stream, its hard to figure out who actually has excess and where such excess might be located. Well, it turns out that we were probably a little too conservative here. We say this because channel sharing seems to be a real strategy for a lot of these groups--and one that some (such as SBGI) are already pursuing. Just to remind you--each channel is comprised of 6MHz of spectrum, but only 3MHz is really needed to broadcast an HD feed over the air. Therefore, in channel sharing, two stations are essentially put together with one on a primary feed and the other on a secondary feed (also referred to as a multi-cast). In technical terms (and from the FCC


10

website), stations that share employ a single channel and transmission facility but each continue to be licensed separately, retain its original call sign, retain all the rights pertaining to an FCC license, and remain subject to all of the FCCs rules, policies, and obligations. We tried our hand at determining each broadcasters hidden spectrum value by using this channel sharing philosophy. In essence, we assume that each broadcaster will sell ONE of their duopoly channels back to the FCC for cash; while maintaining all of the programming (and hence EBITDA) via multi-cast on that remaining channel. In these calculations, we used almost all of the same assumptions that underlie our spectrum portfolio value analysis above. The big difference, however, is two-fold. In our hidden spectrum value analysis, we actually had to INCLUDE the VHF stations, as these are viable options for channel sharing; but we had to EXCLUDE any channel that is already being used to multi-cast another channels programming. ACCORDING TO OUR CALCULATIONS, companies with the GREATEST HIDDEN SPECTRUM VALUE include: NXST, MEG, TRBAA and MDP; while companies with the LEAST HIDDEN SPECTRUM VALUE include: CMCSA, FOXA, GTN (we remind you that GTN already multi-casts on almost all of their stations), and DIS. Median and Maximum Hidden Spectrum Value per Share

Med. Val. Max. Val. Med. Val. Max. Val. Med. Val. Max. Val.Ticker / Sh / Sh / Sh / Sh / Sh / ShNXST $14.03 $20.73 $11.22 $16.59 $8.42 $12.44MEG $4.55 $6.85 $3.64 $5.48 $2.73 $4.11TRBAA $3.76 $5.85 $3.01 $4.68 $2.25 $3.51MDP $3.26 $4.49 $2.61 $3.59 $1.96 $2.69SBGI $3.16 $4.18 $2.53 $3.34 $1.89 $2.51CBS $2.68 $3.84 $2.15 $3.07 $1.61 $2.31GCI $0.81 $1.31 $0.64 $1.04 $0.48 $0.78CMCSA $0.52 $0.73 $0.42 $0.58 $0.31 $0.44FOXA $0.46 $0.55 $0.37 $0.44 $0.28 $0.33GTN $0.02 $0.03 $0.01 $0.03 $0.01 $0.02DIS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

40% Tax Effected0% Tax Effected 20% Tax Effected

Note: spectrum valuations are pro forma for all announced acquisitions; Source: TvB, BIA, Public FCC Documents, and Wells Fargo Securities, LLC estimates


11

Appendix 1: FCC Estimated Auction Reserve Prices by DMA (figures in millions of dollars, except for DMA ranking data)

DMA Rank DMA Maximum Medium Maximum Medium1 New York, NY 490 410 360 2802 Los Angeles, CA 570 340 370 3103 Chicago, IL 130 120 120 1004 Philadelphia, PA 400 230 180 1105 Dallas-Ft. Worth, TX 67 53 58 506 San Francisco-Oakland-San Jose, CA 140 110 92 707 Boston, MA 140 93 77 778 Washington, DC 140 130 98 679 Atlanta, GA 91 65 54 5110 Houston, TX 52 45 38 3611 Detroit, MI 170 110 58 4612 Phoenix, AZ 36 23 22 1013 Seattle-Tacoma, WA 95 3614 Tampa-St Petersburg-Sarasota, FL 71 60 43 3915 Minneapolis - St. Paul, MN 32 20 18 1816 Miami - Ft. Lauderdale, FL 80 78 76 7017 Denver, CO 33 28 22 1018 Orlando-Daytona Beach-Melbourne, FL 85 68 67 4419 Cleveland-Akron, OH 130 72 26 1820 Sacramento-Stockton-Modesto, CA 130 94 55 4321 St. Louis, MO 21 20 13 1122 Portland, OR 24 18 15 1423 Pittsburgh, PA 46 40 38 2124 Raleigh-Durham, NC 51 47 26 2025 Charlotte, NC 54 44 25 2026 Indianapolis, IN 42 36 28 2127 Baltimore, MD 180 160 79 7928 San Diego, CA 250 200 230 14029 Nashville, TN 30 20 12 1130 Hartford-New Haven, CT 280 170 77 6331 Kansas City, KS-MO 14 1432 Columbus, OH 41 36 20 1433 Salt Lake City, UT 12 12 11 734 Milwaukee, WI 68 53 32 3035 Cincinnati, OH 44 42 35 3536 San Antonio, TX 35 29 22 2037 Greenville-Spartanburg, SC-Asheville, NC 57 3638 West Palm Beach-Ft. Pierce, FL 100 93 47 2939 Grand Rapids-Kalamazoo-Battle Creek, MI 70 39 20 1440 Austin, TX 48 36 24 1241 Oklahoma City, OK 17 13 13 1242 Las Vegas, NV 15 12 13 1143 Harrisburg-Lancaster-Lebanon-York, PA 180 13044 Birmingham, AL 33 25 20 1245 Norfolk-Portsmouth-Newport News, VA 28 24 16 1146 Greensboro-High Point-Winston Salem, NC 60 4547 Albuquerque-Santa Fe, NM 9 5 6 548 Jacksonville, FL 27 23 16 1549 Louisville, KY 31 25 18 1150 Memphis, TN 13 11 10 8

Full Power Class A

Note: blank values were not disclosed; Source: Public FCC Documents, Wells Fargo Securities, LLC


12

Appendix 1 (continued): FCC Estimated Auction Reserve Prices by DMA (figures in millions of dollars, except for DMA ranking data)

DMA Rank DMA Maximum Medium Maximum Medium51 New Orleans, LA 18 15 13 1152 Buffalo, NY 73 46 6 453 Providence, RI-New Bedford, MA 160 110 56 5654 Wilkes Barre-Scranton, PA 150 140 56 855 Fresno-Visalia, CA 30 26 17 1656 Little Rock-Pine Bluff, AR 16 12 9 757 Richmond-Petersburg, VA 44 3958 Albany-Schenectady-Troy, NY 81 37 110 1059 Mobile, AL-Pensacola, FL 15 12 10 1060 Tulsa, OK 19 14 11 1061 Knoxville, TN 27 1962 Ft. Myers-Naples, FL 50 35 14 963 Lexington, KY 31 2064 Dayton, OH 53 4865 Charleston-Huntington, WV 23 1666 Roanoke-Lynchburg, VA 25 22 12 1267 Wichita - Hutchinson, KS 8 2 2 268 Flint-Saginaw-Bay City, MI 100 4569 Honolulu, HI 10 5 6 670 Green Bay-Appleton, WI 13 10 1 171 Tucson, AZ 38 20 15 1172 Des Moines-Ames, IA 13 8 4 473 Spokane, WA 7 3 0 074 Omaha, NE 9 875 Springfield, MO 11 8 3 376 Toledo, OH 100 55 38 3877 Columbia, SC 41 1778 Rochester, NY 34 30 20 1679 Huntsville-Decatur-Florence, AL 26 22 18 1680 Portland-Auburn, ME 37 2281 Paducah-Cape Girardeau-Harrisburg-Mt Vernon 17 9 5 482 Shreveport, LA 16 13 4 383 Madison, WI 40 35 12 1284 Champaign-Springfield-Decatur, IL 35 19 4 485 Syracuse, NY 34 24 10 886 Harlingen-Weslaco-Brownsville-McAllen, TX 32 21 28 1387 Chattanooga, TN 62 33 21 1888 Waco-Temple-Bryan, TX 63 47 15 1489 Colorado Springs-Pueblo, CO 25 22 5 590 Cedar Rapids-Waterloo-Iowa City-Dubuque, IA 21 1391 El Paso, TX 9 792 Savannah, GA 11 8 4 393 Baton Rouge, LA 24 18 14 794 Jackson, MS 17 1195 Charleston, SC 14 10 10 796 South Bend-Elkhart, IN 65 5697 Tri-Cities, TN-VA 32 21 13 1198 Burlington, VT-Plattsburgh, NY 58 17 1 199 Greenville-New Bern-Washington, NC 33 22100 Davenport, IA-Rock Island-Moline, IL 22 20

Class AFull Power



13


DMA Rank DMA Maximum Medium Maximum Medium101 Ft. Smith-Fayetteville-Springdale-Rogers, AR 14 10 8 5102 Myrtle Beach-Florence, SC 32 25 21 21103 Johnstown-Altoona, PA 38 26 23 12104 Evansville, IN 16 10 10 6105 Lincoln-Hastings-Kearney, NE 14 5106 Tallahassee, FL-Thomasville, GA 10 9 5 3107 Reno, NV 48 17 4 4108 Tyler-Longview, TX 34 24109 Ft. Wayne, IN 33 31 5 5110 Boise, ID 5 4 2 2111 Sioux Falls-Mitchell, SD 8 2112 Augusta, GA 25 17 8 7113 Youngstown, OH 95 90114 Springfield-Holyoke, MA 120 120 32 32115 Lansing, MI 84 62116 Fargo-Valley City, ND 3 1117 Peoria-Bloomington, IL 30 17118 Macon, GA 40 19 9 9119 Traverse City-Cadillac, MI 28 6120 Montgomery, AL 18 13 8 5121 Eugene, OR 21 6 6 5122 Lafayette, LA 16 14 7 7123 Santa Barbara-Santa Maria-San Luis Obispo, CA 120 30 59 4124 Yakima-Pasco-Richland-Kennewick, WA 5 3 2 1125 Monterey-Salinas, CA 79 72 36 31126 Columbus, GA 38 18 6 6127 Bakersfield, CA 80 31 28 15128 La Crosse-Eau Claire, WI 18 13 3 3129 Corpus Christi, TX 16 11 4 2130 Amarillo, TX 2 1 0 0131 Wilmington, NC 18 17132 Chico-Redding, CA 18 16 22 12133 Columbus-Tupelo-West Point, MS 13 11 4 4134 Topeka, KS 18 8 5 5135 Wausau-Rhinelander, WI 15 6136 Rockford, IL 55 45137 Monroe, LA-El Dorado, AR 11 8 1 1138 Columbia-Jefferson City, MO 9 7139 Duluth, MN-Superior, WI 7 3140 Medford-Klamath Falls, OR 5 1 2 1141 Beaumont-Port Arthur, TX 17 14142 Salisbury, MD 55 50143 Lubbock, TX 3 2 1 1144 Wichita Falls, TX -Lawton, OK 15 12 1 1145 Minot-Bismarck-Dickinson, ND 1 0146 Anchorage, AK 2 1 1 1147 Sioux City, IA 12 5148 Palm Springs, CA 180 100 170 26149 Erie, PA 41 29150 Odessa-Midland, TX 3 1

Full Power Class A



14


DMA Rank DMA Maximum Medium Maximum Medium151 Albany, GA 14 10152 Joplin, MO-Pittsburg, KS 12 9153 Rochester, MN-Mason City, IA-Austin, MN 15 9154 Panama City, FL 15 7 5 4155 Terre Haute, IN 22 17156 Bangor, ME 6 5157 Wheeling, WV- Steubenville, OH 59 53 19 10158 Bluefield-Beckley-Oak Hill, WV 16 15159 Binghamton, NY 40 16 5 5160 Biloxi-Gulfport, MS 16 14161 Sherman, TX - Ada, OK 61 40162 Idaho Falls-Pocatello, ID 2 1 0 0163 Gainesville, FL 31 28 28 12164 Missoula, MT 2 1 1 0165 Abilene-Sweetwater, TX 10 5165 Yuma, AZ-El Centro, CA 11 8167 Hattiesburg-Laurel, MS 15 13168 Billings, MT 1 1169 Clarksburg-Weston, WV 31 15170 Quincy, IL-Hannibal, MO-Keokuk, IA 8 7171 Utica, NY 52 14 6 6172 Dothan, AL 12 9173 Rapid City, SD 2 1174 Elmira, NY 8 7175 Lake Charles, LA 25 15 4 4176 Watertown, NY 17 16 5 3177 Jackson, TN 13 13178 Harrisonburg, VA 64 31 17 6179 Alexandria, LA 10 7180 Marquette, MI 4 2181 Jonesboro, AR 12 12182 Bowling Green, KY 26 11183 Charlottesville, VA 39 27 22 22184 Laredo, TX 9 5 5 5185 Grand Junction-Montrose, CO 2 1 1 1186 Meridian, MS 13 10187 Lima, OH 36 29 15 15188 Butte-Bozeman, MT 1 1 0 0189 Lafayette, IN 52 52190 Greenwood-Greenville, MS 7 7191 Great Falls, MT 1 0192 Twin Falls, ID 2 1193 Bend, OR 2 1 1 1194 Parkersburg, WV 16 16195 Eureka, CA 1 1196 Cheyenne, WY-Scottsbluff, NE 35 8 0 0197 Casper-Riverton, WY 0 0198 San Angelo, TX 2 1 0 0199 Mankato, MN 14 14200 St. Joseph, MO 15 14

Full Power Class A



15


DMA Rank DMA Maximum Medium Maximum Medium201 Ottumwa, IA-Kirksville, MO 7 5202 Fairbanks, AK 0 0 1 1203 Victoria, TX 20 19204 Zanesville, OH 32 32205 Helena, MT 2 1206 Presque Isle, ME 1 1207 Juneau, AK 0 0208 North Platte, NE 2 1 0 0209 Alpena, MI 8 6210 Glendive, MT 0 0

Full Power Class A



16

Appendix 2: FCC Estimated Auction Reserve Prices And MHz-Pops v. 2008 Auction MHz-Pops by DMA (figures in millions of dollars, except for DMA ranking data)

2008 Auction FCC (Max) v. 2008 Auction FCC (Med) v. 2008 AuctionDMA Rank DMA 2013 Coverage (P2+) Maximum MHz/Pop Medium MHz/Pop MHz/Pop MHz/Pop Difference MHz/Pop Difference

1 New York, NY 19.61 490 $4.16 410 $3.48 $4.57 ($0.41) ($1.09)2 Los Angeles, CA 16.74 570 $5.67 340 $3.38 $2.58 $3.09 $0.803 Chicago, IL 9.14 130 $2.37 120 $2.19 $9.19 ($6.82) ($7.00)4 Philadelphia, PA 7.50 400 $8.89 230 $5.11 $6.05 $2.84 ($0.94)5 Dallas-Ft. Worth, TX 6.88 67 $1.62 53 $1.28 $2.13 ($0.51) ($0.85)6 San Francisco-Oakland-San Jose, CA 6.60 140 $3.54 110 $2.78 $5.06 ($1.52) ($2.28)7 Boston, MA 5.86 140 $3.98 93 $2.65 $5.71 ($1.73) ($3.06)8 Washington, DC 6.07 140 $3.84 130 $3.57 $4.81 ($0.97) ($1.24)9 Atlanta, GA 6.06 91 $2.50 65 $1.79 $5.53 ($3.02) ($3.74)10 Houston, TX 6.09 52 $1.42 45 $1.23 $3.69 ($2.27) ($2.46)11 Detroit, MI 4.57 170 $6.20 110 $4.01 $3.54 $2.66 $0.4712 Phoenix, AZ 4.69 36 $1.28 23 $0.82 $6.04 ($4.76) ($5.22)13 Seattle-Tacoma, WA 4.43 95 $3.58 36 $1.36 $7.79 ($4.22) ($6.44)14 Tampa-St Petersburg-Sarasota, FL 4.23 71 $2.80 60 $2.37 $4.23 ($1.43) ($1.87)15 Minneapolis - St. Paul, MN 4.25 32 $1.26 20 $0.78 $4.90 ($3.65) ($4.12)16 Miami - Ft. Lauderdale, FL 4.29 80 $3.11 78 $3.03 $5.00 ($1.89) ($1.96)17 Denver, CO 3.81 33 $1.44 28 $1.23 $1.93 ($0.48) ($0.70)18 Orlando-Daytona Beach-Melbourne, FL 3.55 85 $3.99 68 $3.19 $5.07 ($1.08) ($1.88)19 Cleveland-Akron, OH 3.53 130 $6.14 72 $3.40 $2.54 $3.60 $0.8620 Sacramento-Stockton-Modesto, CA 3.80 130 $5.70 94 $4.12 $3.95 $1.75 $0.1721 St. Louis, MO 3.00 21 $1.17 20 $1.11 $4.25 ($3.08) ($3.14)22 Portland, OR 2.93 24 $1.36 18 $1.02 $2.16 ($0.80) ($1.14)23 Pittsburgh, PA 2.65 46 $2.89 40 $2.51 $3.13 ($0.24) ($0.62)24 Raleigh-Durham, NC 2.82 51 $3.01 47 $2.77 $3.62 ($0.61) ($0.84)25 Charlotte, NC 2.83 54 $3.18 44 $2.59 $4.85 ($1.67) ($2.26)26 Indianapolis, IN 2.68 42 $2.61 36 $2.24 $3.73 ($1.12) ($1.50)27 Baltimore, MD 2.71 180 $11.08 160 $9.85 $3.99 $7.09 $5.8628 San Diego, CA 2.91 250 $14.33 200 $11.46 $5.24 $9.09 $6.2229 Nashville, TN 2.50 30 $2.00 20 $1.33 $4.42 ($2.42) ($3.08)30 Hartford-New Haven, CT 2.45 280 $19.07 170 $11.58 $4.44 $14.63 $7.1431 Kansas City, KS-MO 2.28 14 $1.02 14 $1.02 $3.65 ($2.63) ($2.63)32 Columbus, OH 2.27 41 $3.01 36 $2.64 $1.40 $1.61 $1.2433 Salt Lake City, UT 2.73 12 $0.73 12 $0.73 $3.37 ($2.64) ($2.64)34 Milwaukee, WI 2.18 68 $5.19 53 $4.05 $6.17 ($0.98) ($2.12)35 Cincinnati, OH 2.21 44 $3.31 42 $3.16 $1.88 $1.43 $1.2836 San Antonio, TX 2.36 35 $2.47 29 $2.05 $2.93 ($0.46) ($0.88)37 Greenville-Spartanburg, SC-Asheville, NC 2.01 57 $4.72 36 $2.98 $1.44 $3.28 $1.5438 West Palm Beach-Ft. Pierce, FL 1.88 100 $8.89 93 $8.26 $1.99 $6.90 $6.2839 Grand Rapids-Kalamazoo-Battle Creek, MI 1.83 70 $6.39 39 $3.56 $3.94 $2.45 ($0.38)40 Austin, TX 1.76 48 $4.53 36 $3.40 $2.66 $1.87 $0.7441 Oklahoma City, OK 1.74 17 $1.63 13 $1.24 $7.32 ($5.69) ($6.08)42 Las Vegas, NV 1.90 15 $1.32 12 $1.05 $4.98 ($3.67) ($3.93)43 Harrisburg-Lancaster-Lebanon-York, PA 1.79 180 $16.76 130 $12.11 $0.91 $15.85 $11.2044 Birmingham, AL 1.74 33 $3.16 25 $2.40 $2.22 $0.94 $0.1845 Norfolk-Portsmouth-Newport News, VA 1.76 28 $2.66 24 $2.28 $3.39 ($0.73) ($1.11)46 Greensboro-High Point-Winston Salem, NC 1.66 60 $6.03 45 $4.52 $4.41 $1.62 $0.1147 Albuquerque-Santa Fe, NM 1.72 9 $0.87 5 $0.48 $1.05 ($0.18) ($0.56)48 Jacksonville, FL 1.62 27 $2.77 23 $2.36 $2.28 $0.49 $0.0849 Louisville, KY 1.62 31 $3.19 25 $2.57 $2.93 $0.26 ($0.36)50 Memphis, TN 1.68 13 $1.29 11 $1.09 $2.46 ($1.17) ($1.37)

Full Power

Source: TvB, BIA, Public FCC Documents, and Wells Fargo Securities, LLC estimates


17

Appendix 2 (continued): FCC Estimated Auction Reserve Prices And MHz-Pops v. 2008 Auction MHz-Pops by DMA (figures in millions of dollars, except for DMA ranking data)


51 New Orleans, LA 1.59 18 $1.88 15 $1.57 $1.94 ($0.06) ($0.37)52 Buffalo, NY 1.47 73 $8.28 46 $5.22 $0.75 $7.53 $4.4753 Providence, RI-New Bedford, MA 1.48 160 $17.99 110 $12.37 $4.10 $13.88 $8.2654 Wilkes Barre-Scranton, PA 1.39 150 $17.94 140 $16.74 $0.04 $17.90 $16.7055 Fresno-Visalia, CA 1.81 30 $2.75 26 $2.39 $1.47 $1.29 $0.9256 Little Rock-Pine Bluff, AR 1.34 16 $2.00 12 $1.50 $2.37 ($0.37) ($0.87)57 Richmond-Petersburg, VA 1.35 44 $5.43 39 $4.81 $2.38 $3.05 $2.4358 Albany-Schenectady-Troy, NY 1.26 81 $10.70 37 $4.89 $1.08 $9.62 $3.8159 Mobile, AL-Pensacola, FL 1.28 15 $1.95 12 $1.56 $1.70 $0.25 ($0.14)60 Tulsa, OK 1.29 19 $2.46 14 $1.81 $2.41 $0.05 ($0.60)61 Knoxville, TN 1.24 27 $3.63 19 $2.55 $2.65 $0.98 ($0.10)62 Ft. Myers-Naples, FL 1.16 50 $7.16 35 $5.01 $2.39 $4.77 $2.6263 Lexington, KY 1.15 31 $4.48 20 $2.89 $2.34 $2.14 $0.5564 Dayton, OH 1.18 53 $7.46 48 $6.76 $1.39 $6.07 $5.3765 Charleston-Huntington, WV 1.07 23 $3.58 16 $2.49 $0.16 $3.42 $2.3366 Roanoke-Lynchburg, VA 1.03 25 $4.06 22 $3.58 $0.81 $3.25 $2.7767 Wichita - Hutchinson, KS 1.11 8 $1.20 2 $0.30 $1.97 ($0.77) ($1.67)68 Flint-Saginaw-Bay City, MI 1.08 100 $15.49 45 $6.97 $1.21 $14.28 $5.7669 Honolulu, HI 1.25 10 $1.34 5 $0.67 $1.13 $0.21 ($0.46)70 Green Bay-Appleton, WI 1.05 13 $2.07 10 $1.59 $1.03 $1.04 $0.5671 Tucson, AZ 1.07 38 $5.93 20 $3.12 $2.67 $3.26 $0.4572 Des Moines-Ames, IA 1.02 13 $2.11 8 $1.30 $3.71 ($1.60) ($2.41)73 Spokane, WA 1.01 7 $1.15 3 $0.49 $1.66 ($0.51) ($1.16)74 Omaha, NE 1.02 9 $1.47 8 $1.31 $1.95 ($0.48) ($0.64)75 Springfield, MO 0.98 11 $1.86 8 $1.36 $0.43 $1.44 $0.9376 Toledo, OH 0.98 100 $16.96 55 $9.33 $1.21 $15.76 $8.1277 Columbia, SC 0.45 41 $15.15 17 $6.28 $2.41 $12.74 $3.8778 Rochester, NY 0.95 34 $5.99 30 $5.29 $1.54 $4.46 $3.7579 Huntsville-Decatur-Florence, AL 0.94 26 $4.59 22 $3.88 $1.88 $2.71 $2.0080 Portland-Auburn, ME 0.90 37 $6.83 22 $4.06 $0.46 $6.37 $3.6081 Paducah-Cape Girardeau-Harrisburg-Mt Vernon 0.91 17 $3.13 9 $1.66 $2.35 $0.78 ($0.69)82 Shreveport, LA 0.93 16 $2.86 13 $2.32 $1.69 $1.17 $0.6383 Madison, WI 0.89 40 $7.50 35 $6.56 $2.35 $5.15 $4.2184 Champaign-Springfield-Decatur, IL 0.88 35 $6.61 19 $3.59 $0.38 $6.23 $3.2185 Syracuse, NY 0.90 34 $6.28 24 $4.43 $1.38 $4.90 $3.0686 Harlingen-Weslaco-Brownsville-McAllen, TX 1.23 32 $4.35 21 $2.85 $0.64 $3.71 $2.2287 Chattanooga, TN 0.87 62 $11.86 33 $6.31 $1.68 $10.18 $4.6388 Waco-Temple-Bryan, TX 0.89 63 $11.82 47 $8.82 $2.21 $9.60 $6.6089 Colorado Springs-Pueblo, CO 0.84 25 $4.95 22 $4.36 $1.03 $3.92 $3.3390 Cedar Rapids-Waterloo-Iowa City-Dubuque, IA 0.81 21 $4.33 13 $2.68 $0.99 $3.34 $1.6991 El Paso, TX 0.98 9 $1.53 7 $1.19 $1.14 $0.39 $0.0592 Savannah, GA 0.83 11 $2.21 8 $1.61 $2.58 ($0.37) ($0.97)93 Baton Rouge, LA 0.83 24 $4.80 18 $3.60 $2.21 $2.59 $1.3994 Jackson, MS 0.84 17 $3.39 11 $2.20 $1.35 $2.04 $0.8595 Charleston, SC 0.77 14 $3.04 10 $2.17 $2.04 $1.01 $0.1496 South Bend-Elkhart, IN 0.81 65 $13.31 56 $11.47 $0.59 $12.72 $10.8897 Tri-Cities, TN-VA 0.73 32 $7.27 21 $4.77 $0.95 $6.33 $3.8398 Burlington, VT-Plattsburgh, NY 0.74 58 $13.05 17 $3.83 $0.74 $12.32 $3.0999 Greenville-New Bern-Washington, NC 0.72 33 $7.60 22 $5.07 $1.56 $6.04 $3.51100 Davenport, IA-Rock Island-Moline, IL 0.71 22 $5.13 20 $4.66 $0.92 $4.21 $3.74

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101 Ft. Smith-Fayetteville-Springdale-Rogers, AR 0.75 14 $3.10 10 $2.22 $1.89 $1.21 $0.33102 Myrtle Beach-Florence, SC 0.70 32 $7.63 25 $5.96 $1.56 $6.07 $4.40103 Johnstown-Altoona, PA 0.68 38 $9.36 26 $6.40 $0.04 $9.32 $6.36104 Evansville, IN 0.68 16 $3.93 10 $2.46 $0.17 $3.76 $2.29105 Lincoln-Hastings-Kearney, NE 0.65 14 $3.57 5 $1.28 $0.44 $3.13 $0.83106 Tallahassee, FL-Thomasville, GA 0.66 10 $2.51 9 $2.26 $2.52 ($0.01) ($0.26)107 Reno, NV 0.66 48 $12.06 17 $4.27 $0.66 $11.40 $3.61108 Tyler-Longview, TX 0.68 34 $8.39 24 $5.93 $0.85 $7.55 $5.08109 Ft. Wayne, IN 0.67 33 $8.25 31 $7.75 $0.67 $7.59 $7.09110 Boise, ID 0.67 5 $1.24 4 $0.99 $1.00 $0.24 ($0.01)111 Sioux Falls-Mitchell, SD 0.61 8 $2.18 2 $0.55 $1.24 $0.94 ($0.69)112 Augusta, GA 0.64 25 $6.55 17 $4.45 $1.60 $4.95 $2.86113 Youngstown, OH 0.61 95 $25.97 90 $24.61 $0.94 $25.03 $23.66114 Springfield-Holyoke, MA 0.62 120 $32.52 120 $32.52 $1.62 $30.90 $30.90115 Lansing, MI 0.60 84 $23.15 62 $17.09 $2.13 $21.02 $14.95116 Fargo-Valley City, ND 0.56 3 $0.90 1 $0.30 $0.14 $0.76 $0.16117 Peoria-Bloomington, IL 0.59 30 $8.54 17 $4.84 $0.67 $7.87 $4.17118 Macon, GA 0.59 40 $11.21 19 $5.32 $1.85 $9.35 $3.47119 Traverse City-Cadillac, MI 0.56 28 $8.32 6 $1.78 $1.04 $7.28 $0.74120 Montgomery, AL 0.59 18 $5.12 13 $3.70 $0.98 $4.14 $2.72121 Eugene, OR 0.55 21 $6.41 6 $1.83 $0.51 $5.90 $1.32122 Lafayette, LA 0.57 16 $4.64 14 $4.06 $1.03 $3.61 $3.03123 Santa Barbara-Santa Maria-San Luis Obispo, CA 0.62 120 $32.35 30 $8.09 $2.56 $29.79 $5.53124 Yakima-Pasco-Richland-Kennewick, WA 0.63 5 $1.32 3 $0.79 $0.42 $0.90 $0.37125 Monterey-Salinas, CA 0.65 79 $20.15 72 $18.37 $1.03 $19.12 $17.34126 Columbus, GA 0.52 38 $12.07 18 $5.72 $0.27 $11.80 $5.44127 Bakersfield, CA 0.70 80 $19.12 31 $7.41 $1.04 $18.08 $6.37128 La Crosse-Eau Claire, WI 0.51 18 $5.93 13 $4.28 $2.31 $3.62 $1.97129 Corpus Christi, TX 0.53 16 $5.01 11 $3.44 $0.28 $4.73 $3.16130 Amarillo, TX 0.50 2 $0.67 1 $0.33 $0.29 $0.37 $0.04131 Wilmington, NC 0.43 18 $6.95 17 $6.56 $0.47 $6.48 $6.09132 Chico-Redding, CA 0.47 18 $6.38 16 $5.67 $0.11 $6.27 $5.56133 Columbus-Tupelo-West Point, MS 0.46 13 $4.69 11 $3.97 $0.50 $4.19 $3.47134 Topeka, KS 0.42 18 $7.09 8 $3.15 $0.58 $6.51 $2.57135 Wausau-Rhinelander, WI 0.42 15 $6.00 6 $2.40 $1.94 $4.06 $0.46136 Rockford, IL 0.45 55 $20.46 45 $16.74 $0.63 $19.83 $16.11137 Monroe, LA-El Dorado, AR 0.43 11 $4.30 8 $3.12 $0.98 $3.32 $2.15138 Columbia-Jefferson City, MO 0.42 9 $3.60 7 $2.80 $0.75 $2.85 $2.05139 Duluth, MN-Superior, WI 0.38 7 $3.06 3 $1.31 $0.55 $2.51 $0.76140 Medford-Klamath Falls, OR 0.39 5 $2.14 1 $0.43 $0.27 $1.87 $0.16141 Beaumont-Port Arthur, TX 0.42 17 $6.80 14 $5.60 $0.57 $6.24 $5.04142 Salisbury, MD 0.38 55 $24.29 50 $22.08 $0.50 $23.79 $21.58143 Lubbock, TX 0.41 3 $1.23 2 $0.82 $0.25 $0.98 $0.57144 Wichita Falls, TX -Lawton, OK 0.38 15 $6.58 12 $5.26 $0.28 $6.30 $4.98145 Minot-Bismarck-Dickinson, ND 0.35 1 $0.48 0 $0.00 $0.31 $0.17 ($0.31)146 Anchorage, AK 0.40 2 $0.83 1 $0.42 $0.44 $0.39 ($0.02)147 Sioux City, IA 0.38 12 $5.32 5 $2.22 $1.82 $3.50 $0.40148 Palm Springs, CA 0.41 180 $73.09 100 $40.61 $0.34 $72.75 $40.27149 Erie, PA 0.37 41 $18.43 29 $13.03 $0.05 $18.38 $12.98150 Odessa-Midland, TX 0.39 3 $1.29 1 $0.43 $0.52 $0.77 ($0.09)

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151 Albany, GA 0.38 14 $6.13 10 $4.38 $0.38 $5.75 $3.99152 Joplin, MO-Pittsburg, KS 0.37 12 $5.37 9 $4.03 $1.23 $4.15 $2.80153 Rochester, MN-Mason City, IA-Austin, MN 0.34 15 $7.37 9 $4.42 $0.76 $6.61 $3.66154 Panama City, FL 0.31 15 $8.19 7 $3.82 $0.70 $7.49 $3.12155 Terre Haute, IN 0.34 22 $10.90 17 $8.43 $0.32 $10.58 $8.10156 Bangor, ME 0.32 6 $3.17 5 $2.64 $0.29 $2.88 $2.35157 Wheeling, WV- Steubenville, OH 0.30 59 $33.20 53 $29.83 $0.06 $33.14 $29.76158 Bluefield-Beckley-Oak Hill, WV 0.31 16 $8.67 15 $8.12 $0.38 $8.29 $7.74159 Binghamton, NY 0.31 40 $21.35 16 $8.54 $0.04 $21.31 $8.50160 Biloxi-Gulfport, MS 0.32 16 $8.23 14 $7.20 $1.52 $6.71 $5.68161 Sherman, TX - Ada, OK 0.31 61 $32.89 40 $21.57 $0.12 $32.77 $21.45162 Idaho Falls-Pocatello, ID 0.34 2 $0.97 1 $0.49 $1.00 ($0.03) ($0.51)163 Gainesville, FL 0.29 31 $18.00 28 $16.26 $2.76 $15.25 $13.50164 Missoula, MT 0.26 2 $1.28 1 $0.64 $0.50 $0.78 $0.14165 Abilene-Sweetwater, TX 0.28 10 $6.06 5 $3.03 $0.33 $5.72 $2.69165 Yuma, AZ-El Centro, CA 0.34 11 $5.33 8 $3.88 $0.18 $5.15 $3.70167 Hattiesburg-Laurel, MS 0.27 15 $9.12 13 $7.90 $0.04 $9.08 $7.86168 Billings, MT 0.25 1 $0.66 1 $0.66 $1.01 ($0.35) ($0.35)169 Clarksburg-Weston, WV 0.25 31 $20.95 15 $10.14 $0.50 $20.45 $9.64170 Quincy, IL-Hannibal, MO-Keokuk, IA 0.24 8 $5.54 7 $4.85 $0.04 $5.50 $4.81171 Utica, NY 0.24 52 $35.65 14 $9.60 $0.14 $35.51 $9.46172 Dothan, AL 0.26 12 $7.76 9 $5.82 $1.29 $6.47 $4.53173 Rapid City, SD 0.23 2 $1.44 1 $0.72 $1.07 $0.37 ($0.35)174 Elmira, NY 0.23 8 $5.89 7 $5.15 $0.13 $5.76 $5.02175 Lake Charles, LA 0.24 25 $17.66 15 $10.60 $1.76 $15.90 $8.84176 Watertown, NY 0.23 17 $12.48 16 $11.75 $0.04 $12.44 $11.71177 Jackson, TN 0.22 13 $9.66 13 $9.66 $0.04 $9.62 $9.62178 Harrisonburg, VA 0.22 64 $48.63 31 $23.55 $0.04 $48.59 $23.51179 Alexandria, LA 0.22 10 $7.57 7 $5.30 $2.58 $4.99 $2.72180 Marquette, MI 0.19 4 $3.53 2 $1.76 $0.04 $3.49 $1.72181 Jonesboro, AR 0.19 12 $10.29 12 $10.29 $0.15 $10.14 $10.14182 Bowling Green, KY 0.19 26 $22.77 11 $9.63 $0.04 $22.73 $9.59183 Charlottesville, VA 0.18 39 $36.29 27 $25.12 $0.18 $36.11 $24.94184 Laredo, TX 0.26 9 $5.85 5 $3.25 $0.21 $5.64 $3.04185 Grand Junction-Montrose, CO 0.17 2 $1.95 1 $0.98 $0.04 $1.91 $0.94186 Meridian, MS 0.17 13 $12.96 10 $9.97 $0.04 $12.92 $9.93187 Lima, OH 0.13 36 $47.35 29 $38.14 $0.19 $47.16 $37.95188 Butte-Bozeman, MT 0.15 1 $1.10 1 $1.10 $0.10 $1.00 $1.00189 Lafayette, IN 0.16 52 $54.39 52 $54.39 $0.38 $54.01 $54.01190 Greenwood-Greenville, MS 0.17 7 $6.95 7 $6.95 $0.10 $6.85 $6.85191 Great Falls, MT 0.15 1 $1.09 0 $0.00 $0.67 $0.42 ($0.67)192 Twin Falls, ID 0.17 2 $1.96 1 $0.98 $0.20 $1.76 $0.78193 Bend, OR 0.15 2 $2.21 1 $1.10 $0.20 $2.01 $0.90194 Parkersburg, WV 0.14 16 $18.46 16 $18.46 $0.15 $18.31 $18.31195 Eureka, CA 0.14 1 $1.21 1 $1.21 $0.05 $1.16 $1.16196 Cheyenne, WY-Scottsbluff, NE 0.13 35 $44.21 8 $10.11 $0.33 $43.88 $9.78197 Casper-Riverton, WY 0.13 0 $0.00 0 $0.00 $0.61 ($0.61) ($0.61)198 San Angelo, TX 0.13 2 $2.48 1 $1.24 $1.24 $1.24 ($0.00)199 Mankato, MN 0.12 14 $18.87 14 $18.87 $0.05 $18.82 $18.82200 St. Joseph, MO 0.11 15 $22.21 14 $20.73 $1.20 $21.02 $19.53

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201 Ottumwa, IA-Kirksville, MO 0.11 7 $10.61 5 $7.58 $0.04 $10.57 $7.54202 Fairbanks, AK 0.09 0 $0.00 0 $0.00 $0.00 $0.00 $0.00203 Victoria, TX 0.08 20 $41.11 19 $39.05 $0.00 $41.11 $39.05204 Zanesville, OH 0.08 32 $66.94 32 $66.94 $0.00 $66.94 $66.94205 Helena, MT 0.06 2 $5.21 1 $2.61 $0.00 $5.21 $2.61206 Presque Isle, ME 0.07 1 $2.55 1 $2.55 $0.00 $2.55 $2.55207 Juneau, AK 0.06 0 $0.00 0 $0.00 $0.00 $0.00 $0.00208 North Platte, NE 0.03 2 $9.63 1 $4.82 $0.00 $9.63 $4.82209 Alpena, MI 0.04 8 $35.90 6 $26.92 $0.00 $35.90 $26.92210 Glendive, MT 0.01 0 $0.00 0 $0.00 $0.00 $0.00 $0.00

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Required Disclosures

Additional Information Available Upon Request

I certify that: 1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report.

Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLCs research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue. STOCK RATING 1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY 2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD 3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELL

SECTOR RATING O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months. U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.

VOLATILITY RATING V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.

As of: October 2, 2014

48% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform.

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EEA The securities and related financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (WFSIL). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Conduct Authority. For the purposes of Section 21 of the UK Financial Services and Markets Act 2000 (the Act), the content of this report has been approved by WFSIL a regulated person under the Act. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FCA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients.


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Wells Fargo Wireless Auction October 14

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