1. You estimated revenues - let's multiply that by AT&T's 5.7% 2012 net income margin [1]. Y1 earnings: $12.7 million.
2. That seems low - let's double your business revenue estimate. Adjusted Y1 earnings: $17 million.
3. Los Angeles-Long Beach-Anaheim real GDP grew at 2.4% a year between 2009 and 2012. Assume that continues into perpetuity. AT&T pays 5.3% and 3.7% on its 2041 and 2029 debt, respectively - let's say you can borrow between those.
--> Present value of cash flows: $0.6 to $1.3 billion. Quadruple your revenue estimates and borrow at 3.75% to hit $5 billion.
CAYENNE:
1. $5 billion to roll out fibre across Los Angeles seems optimistic. The issue is compounded by the city council having no skin in the game, even with regards to bureaucratic inefficiencies (e.g. some land use or environmental commission jamming the entire project for 5 years).
SUGAR:
1. Your revenue estimates look pessimistic - businesses could pay differing rates based on usage and more than 1/4 of the population could sign up. You also don't include government demand. But it's thorough enough to look closer than 4x off.
∴ The RFP in its present form looks more like a political stunt than a serious proposal. Not sure what the LA electoral calendar looks like over the next 3-6 months.
SALT:
1. You estimated revenues - let's multiply that by AT&T's 5.7% 2012 net income margin [1]. Y1 earnings: $12.7 million.
2. That seems low - let's double your business revenue estimate. Adjusted Y1 earnings: $17 million.
3. Los Angeles-Long Beach-Anaheim real GDP grew at 2.4% a year between 2009 and 2012. Assume that continues into perpetuity. AT&T pays 5.3% and 3.7% on its 2041 and 2029 debt, respectively - let's say you can borrow between those.
--> Present value of cash flows: $0.6 to $1.3 billion. Quadruple your revenue estimates and borrow at 3.75% to hit $5 billion.
CAYENNE:
1. $5 billion to roll out fibre across Los Angeles seems optimistic. The issue is compounded by the city council having no skin in the game, even with regards to bureaucratic inefficiencies (e.g. some land use or environmental commission jamming the entire project for 5 years).
SUGAR:
1. Your revenue estimates look pessimistic - businesses could pay differing rates based on usage and more than 1/4 of the population could sign up. You also don't include government demand. But it's thorough enough to look closer than 4x off.
∴ The RFP in its present form looks more like a political stunt than a serious proposal. Not sure what the LA electoral calendar looks like over the next 3-6 months.
[1] http://finance.yahoo.com/q/is?s=T+Income+Statement&annual