CostCost based approach (mil. CZK)Cash and equivalents12,469Preferred equity and minority interest0Total debt2,966Estimated equity value (historical cost of net assets = book value of equity)63,813Estimated enterprise value54,310

SimpleSimple approach The rule of Cihak's hand (mil. CZK)EBITDA (multiple)5EBITDA19,653Total debt2,966Estimated equity value95,299Estimated enterprise value98,265

RevenueRevenue based approach Dividend growth model (mil. CZK)Dividend paid in 201112,878Cash and equivalents12,469Preferred equity and minority interest0Total debt2,966Yield of LT Czech government bonds3.0%Equity risk premium6.0%Estimated dividend growth sustainable in a very long run (%)0.0%Dividend paid in 201312,878Levered beta coefficient (decimal)1.0Simplified equity discount rate (%)9.0%Estimated equity value143,089Estimated enterprise value133,586Revenue based approach Discounted cash flow to the firm (mil. CZK)2012201320142015Cash and equivalents12,469Preferred equity and minority interest0Total debt2,966EBITDA19,19718,92518,517EBIT8,3958,5689,132Yield of LT Czech government bonds3.0%Equity risk premium6.0%Unlevered beta coefficient (decimal)0.8Levered beta coefficient (decimal)1.3Country + size premiums (%)1.5%Yield of LT EUR corporate bonds with the same rating (%)3.0%EUR to CZK yield adjustment (%)-0.2%Statutory tax rate19.0%Median capital structure (% of common equity)55.0%Effective tax rate (%)19.0%19.0%19.0%Net operating profit after taxes6,8006,9407,397(+) Depreciation and amortization10,80210,3579,385(-) Capital expenditure-10,802-10,357-9,385(-) Increase in working capital000Free cash flow to the firm6,8006,9407,397Equity discount rate (%)12.3%12.3%12.3%After-tax cost of debt (%)2.2%2.2%2.2%Weighted average cost of capital (%)7.8%7.8%7.8%Discount factor (decimal)0.9280.8610.799Discounted free cash flow6,3095,9755,908Estimated free cash flow growth sustainable in a very long run (%)0.0%Discounted free cash flow of the perpetuity75,971Estimated equity value103,666Estimated enterprise value94,163

ComparableComparable based approach trading multiples (mil. CZK)Cash and equivalents12,469Preferred equity and minority interest0Total debt2,966Median EV / EBITDA multiple of peer companies (multiple)4.2EBITDA19,653Estimated equity value92,046Estimated enterprise value82,543Median M / B multiple of peer companies (multiple)1.8Book value of equity63,813Estimated equity value111,673Estimated enterprise value102,170Median P/E multiple of peer companies (multiple)13.4Net income5,018Estimated equity value67,241Estimated enterprise value57,738Comparable based approach Market price (mil. CZK)Cash and equivalents12,469Preferred equity and minority interest0Total debt2,966Shares outstanding (mil. pieces)322.09Share price (CZK)323.6Estimated equity value104,228Estimated enterprise value94,725

OverviewOverview of results (mil. CZK)Equity valueEnterprise valueDevation (%)Devation (%)Cost based approachHistorical cost method63,81354,310-39%-43%Revenue based approachDividend growth method143,089133,58637%41%Discounted cash flow to the firm103,66694,163-1%-1%Comparable based approachEV / EBITDA trading multiple92,04682,543-12%-13%M / B trading multiple111,673102,1707%8%P / E trading multiple67,24157,738-35%-39%Market price104,22894,7250%0%Simple approachThe rule of Cihak's hand95,29998,265-9%4%

Bloomberg_pastedEQUITY INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012Bloomberg tickerSPTT CP EQUITYNAMETELEFONICA CZECH REPUBLIC ASRemarkHISTORICAL_MARKET_CAP130,451140,592126,259123,393125,619124,005127,387127,3873Q12 filled for 4Q12CASH_AND_MARKETABLE_SECURITIES7,06210,82015,1096,9559,25710,88612,46912,4693Q12 filled for 4Q12PREFERRED_EQUITY_&_MINORITY_INT000000003Q12 filled for 4Q12SHORT_AND_LONG_TERM_DEBT3,0613,1112,9693,0613,0823,1462,9662,9663Q12 filled for 4Q12Historical enterprise value126,450132,883114,119119,499119,444116,265117,884117,8843Q12 filled for 4Q12CUR_MKT_CAP130,446140,592126,259123,393125,615124,005127,387104,228BS_SH_OUT322.100322.090322.090322.090322.100322.090322.090322.0903Q12 filled for 4Q12CURR_ENTP_VAL126,445132,883114,119119,499119,440116,265117,88494,725P&L: reference financials (Q)SALES_REV_TURN12,88913,08513,06413,35012,46812,69712,60512,6053Q12 filled for 4Q12EBITDA5,0635,1895,4995,4994,5605,1394,9774,9773Q12 filled for 4Q12EBIT2,1892,2712,58916,9321,6882,3232,1772,1773Q12 filled for 4Q12NET_INCOME1,7401,8712,2052,8681,6221,6321,764TRAIL_12M_NET_SALES54,62253,64752,85952,38851,96751,57951,12051,1203Q12 filled for 4Q12EBITDA (LTM)21,25020,74720,69720,17519,653EBIT (LTM)23,98123,48023,53223,1208,365Net income (LTM)8,6848,5668,3277,8865,018Balance sheet itemsTOTAL_EQUITY69,09763,88066,10469,09770,61163,25563,81363,8133Q12 filled for 4Q12Cash flow itemsCF_DVD_PAID-12,876-12,8784Q10 filled for 1Q11Analysts estimatesNumber of analystsBEST_EBITDA_MEDIANBEST_FPERIOD_OVERRIDE13YBSTC1319,197BEST_EBITDA_MEDIANBEST_DATA_SOURCE_OVERRIDE14YBSTC1218,925BEST_EBITDA_MEDIANBEST_CONSOLIDATED_OVERRIDE15YBSTC718,517Number of analystsBEST_EBIT_MEDIANBEST_FPERIOD_OVERRIDE13YBSTC108,395BEST_EBIT_MEDIANBEST_DATA_SOURCE_OVERRIDE14YBSTC98,568BEST_EBIT_MEDIANBEST_CONSOLIDATED_OVERRIDE15YBSTC69,132DEBT INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012LT Czech government bondsCZGB 4.2 12/04/36 CORPYLD_YTM_MID4.7%4.3%3.8%4.3%4.1%3.5%3.3%3.0%Cost of debtIssuer ratingRTG_SP_LT_LC_ISSUER_CREDITBBBYield of 10Y EUR bonds (BBB)C67310Y IndexPX_LAST3.0%PEERS INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012NAMETPS PW EQUITYTELEKOMUNIKACJA POLSKA SACRNCYPLNCUR_MKT_CAP16,335CURR_ENTP_VAL21,120EBITDA1,2161,2831,320991EBITDA (LTM)4,810NET_INCOME24225530751NET_INCOME (LTM)855TOTAL_EQUITY12,958EV / EBITDA4.4P / E19.1M / B1.3Capital structure (% of common equity)80%NAMEKPN NA EQUITYKONINKLIJKE KPN NVCRNCYEURCUR_MKT_CAP5,320CURR_ENTP_VAL17,981EBITDA1,1041,1391,1641,121EBITDA (LTM)4,528NET_INCOME288315250-162NET_INCOME (LTM)691TOTAL_EQUITY2,461EV / EBITDA4.0P / E7.7M / B2.2Capital structure (% of common equity)30%

Bloomberg_liveEQUITY INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012Bloomberg tickerSPTT CP EQUITYNAME0RemarkHISTORICAL_MARKET_CAP000000003Q12 filled for 4Q12CASH_AND_MARKETABLE_SECURITIES000000003Q12 filled for 4Q12PREFERRED_EQUITY_&_MINORITY_INT000000003Q12 filled for 4Q12SHORT_AND_LONG_TERM_DEBT000000003Q12 filled for 4Q12Historical enterprise value000000003Q12 filled for 4Q12CUR_MKT_CAP00000000BS_SH_OUT0.0000.0000.0000.0000.0000.0000.0000.0003Q12 filled for 4Q12CURR_ENTP_VAL00000000P&L: reference financials (Q)SALES_REV_TURN000000003Q12 filled for 4Q12EBITDA000000003Q12 filled for 4Q12EBIT000000003Q12 filled for 4Q12NET_INCOME0000000TRAIL_12M_NET_SALES000000003Q12 filled for 4Q12EBITDA (LTM)00000EBIT (LTM)00000Net income (LTM)00000Balance sheet itemsTOTAL_EQUITY000000003Q12 filled for 4Q12Cash flow itemsCF_DVD_PAID004Q10 filled for 1Q11Analysts estimatesNumber of analystsBEST_EBITDA_MEDIANBEST_FPERIOD_OVERRIDE13YBSTC130BEST_EBITDA_MEDIANBEST_DATA_SOURCE_OVERRIDE14YBSTC120BEST_EBITDA_MEDIANBEST_CONSOLIDATED_OVERRIDE15YBSTC70Number of analystsBEST_EBIT_MEDIANBEST_FPERIOD_OVERRIDE13YBSTC100BEST_EBIT_MEDIANBEST_DATA_SOURCE_OVERRIDE14YBSTC90BEST_EBIT_MEDIANBEST_CONSOLIDATED_OVERRIDE15YBSTC60DEBT INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012LT Czech government bondsCZGB 4.2 12/04/36 CORPYLD_YTM_MID0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%Cost of debtIssuer ratingRTG_SP_LT_LC_ISSUER_CREDIT0Yield of 10Y EUR bonds (BBB)C67310Y IndexPX_LAST0.0%PEERS INFOMarch 31, 2011June 30, 2011September 30, 2011December 31, 2011March 31, 2012June 30, 2012September 30, 2012December 31, 2012NAMETPS PW EQUITY0CRNCY0CUR_MKT_CAP0CURR_ENTP_VAL0EBITDA0000EBITDA (LTM)0NET_INCOME0000NET_INCOME (LTM)0TOTAL_EQUITY0EV / EBITDA0.0P / E0.0M / B0.0Capital structure (% of common equity)0%NAMEKPN NA EQUITY0CRNCY0CUR_MKT_CAP0CURR_ENTP_VAL0EBITDA0000EBITDA (LTM)0NET_INCOME0000NET_INCOME (LTM)0TOTAL_EQUITY0EV / EBITDA0.0P / E0.0M / B0.0Capital structure (% of common equity)0%