Project Ares (Final Approval)

U.S. Telecom Co-investment Opportunity with Stonepeak

2021/01 Project 1st in-charge: Hoi Tung

Investment in-charge: Dennis Chan
Risk in-charge: Julian Wang

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Contents

I Third Party Due Diligence Findings 2

II Investment Structure 4

III Updated Return Summary 5

IV Key Terms of Co-investment 7

V Responses to Preliminary IC Questions 9

VI Appendix – Preliminary IC Memo (updated if applicable) 15

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Summary of Third-Party Due Diligence Findings – (1/2)
Item Summary of Key Findings
• PwC recommend that PAOH invest through alternative blocked structures, i.e. two Cayman blockers that are treated
as corporations for US federal income tax purposes. The blockers would shield PAOH from US effectively connected
income from Project Ares and hence, PAOH would not be required to file US tax return. Distribution from the Cayman
blockers should be free of US tax (see page 4 for proposed Investment Structure)
• PAOH intends to use a Cayman SPV to hold the co-investment, which PwC recommend that the SPV should be treated
as a corporation for US federal income tax purpose and again PAOH would not be required to file US tax return either
• Stonepeak’s base case IRR of 14.2% is based on the two major assumptions: 1) distribution of refinancing proceeds in
2026 would be non-taxable return of capital, which PwC believe would be reasonable given that the co-investment
platforms would likely have minimal US tax earnings & profits after expense deduction and amortization of stepped up
Tax (PwC) tax basis in acquired assets; and 2) disposal of co-investment in 2027-29 (presumably by way of an IPO) would not be
subject to US tax, which would not be appear to be unreasonable if (i) at the time of IPO, Ares would not be US real
property interests as defined under IRC Section 897; and (ii) pre-IPO restructuring would be effected in a tax-free
manner. Based on the above PwC’s analysis, the tax leakage for PAOH is expected to be minimal with base case IRR
of 13.8% and MOIC of 2.3x
• To mitigate potential HK profits tax risk, PwC suggest that Cayman SPV to negotiate, conclude and execute both the
co-investment and subsequent transfer documents outside of HK in order to establish a non-taxable offshore claim
and/or capital gain. Funding to Cayman SPV should be in the form of equity as dividend is generally not subject to tax
in HK
• The Cayman Islands itself does not impose any taxes
• CFIUS analysis： With respect to the CFIUS analysis, MoFo have opined that PAOH’s passive and indirect (via
Stonepeak managed funds) investments in Astound will not, absent other factors, require or necessitate notification to
Legal (International- CFIUS
Morrison & Foerster & • PRC regulatory analysis: Given that the underlying business is a cable company, PAOH’s investment is US$30m and
PRC - Haiwen) there is no cross-broader funding, Haiwen have opined that no relevant regulatory approval is required from National
Development and Reform Commission (NDRC), China Banking and Insurance Regulatory Commission (CBIRC), Ministry
of Commerce of the PRC and/or Safe Administration of Foreign Exchange (SAFE)

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Investment Structure
SP co-investment platforms
(blocker structure) in which
Ping An’s SPV will participate

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Ping An Base Case 13.8% Net IRR / 2.3x Net MOIC
Ping An believes Stonepeak’s P60 Case (or Base Case) return is highly achievable
Assumes zero
households D E
passed with
C
entry=exit, and
B F
ARPU growth of G
3.7% vs. 7.8%
historical

SP Base Return, Exit Multiple SP Base Case Litigation Cost PA Tax Leakage PA Base Case
Starting Return: Existing Continued Edge Outs Commercial Business Incremental M&A
Compression Return
Footprint Acceleration Entry = Exit
D E F
A B C Though the business solutions segment (BSS) Long-term cable multiples have
The P60 Case assumes ARPU Management has Since 2003, the Ares
has demonstrated steady growth (7.4% since steadily traded up with The P60 Case assume
grows at 3.7%, versus L2Y CAGR identified 1.5mm homes to management team
2017), Stonepeak believes the business is CableOne and Charter trading at US$15m litigation cost. PA
of 7.8%. The broader cable pass through the edge-out has executed multiple
being vastly underutilized. Despite fiber 17.7x and 11.5x, respectively, reviewed LDD report and
industry (inclusive of Ares) has program over the next 5 transactions, earning
network assets and on-net connectivity largely driven by the improving conservatively increase
grown ARPU over that same years. Even excluding the MOICs of 2.6x-5.2x.
counts that compare well with benchmarks, cashflow conversion of litigation cost to US$141.5m
period at 6.9%, with 3-year and impact of new household Through RCN and
Ares ranks last in rep coverage per dollar of businesses increasingly to address 2 open copyright
5-year CAGRs of 6.2% and 6.0%, formation, the P60 Case ultimately, Ares,
TAM and sales rep productivity. Even comprised of high-margin data infringement litigation, 2
respectively. Broadband ARPU over 7 years does not management has
assuming sales rep productivity reverts to the products. P60 case assumes exit patent infringement matter
increases are a function of exhaust the TAM—leaving acquired ~$35mm of and 2 potentially putative
second-worst peer in its group, the BSS at 10.5x NTM EBITDA, a multiple
product mix-shift (e.g., speed up- headroom at exit. EBITDA per annum, class actions. Some of them
would improve its average gross MRR installs compression of 0.9x relative to
tiering, incremental add-ons) Additionally, strategic including two are still in early stage
over L2Y by nearly 3x (from $1.8mm per NTM entry multiple at
from the customer base, and an M&A often expands edge- strategic tuck-ins this without estimates while the
month to $5.2mm per month). P60 Case only transaction close. As cable
ability to maintain high customer out TAM (e.g., small Digital year. P60 Case others are based on the
assumes a fraction of that increase, to businesses shed legacy video
satisfaction / NPS—Ares has West acquisition added assumes ~$21mm of indicated claims and/or high
$2.9mm per month (overall revenue CAGR of and become increasingly data-
consistently demonstrated an incremental 100-200k EBITDA acquired per level estimates
9.0%). Through DD, SP have identified fair centric, we expect further uplift
ability to do both potential HHs) annum
share gaps of 500bps+ in several key markets. to multiples
G
*PA tax leakage is based on PwC’s analysis which is based on two major assumptions: 1) distribution of refinancing proceeds in 2026 would be non-taxable return of capital, which PwC believe
would be reasonable given that the co-investment platforms would likely have minimal US tax earnings & profits after expense deduction and amortization of stepped up tax basis in acquired
assets; and 2) disposal of co-investment in 2027-29 (presumably by way of an IPO) would not be subject to US tax, which would not be appear to be unreasonable if (i) at the time of IPO, Ares would
not be US real property interests as defined under IRC Section 897; and (ii) pre-IPO restructuring would be effected in a tax-free manner.

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Return Summary with Key Assumptions
Ping An Base Case
13.8% net IRR / 2.3x net MOIC
• Stonepeak P60 Case adjusting
for litigation cost and PA tax
leakage

Ping An Downside Case

7.8% net IRR / 1.6x net MOIC
Ping An Base Case adjusting for:
• Lower ARPU CAGR
(3.7% -> 2.7%)
• Average HH passed per annum
(129k -> 100k)
• Bolt-on M&A EBITDA
(~$21m p.a. -> ~$8m p.a.
2021E-26E)
• The target and blockers are US
real property holding company

Ping An Upside Case

19.0% net IRR / 2.6x net MOIC
Ping An Base Case adjusting for:
• Exit multiple
(10.5x -> 11.1x Exit = Entry)
and
Exit mechanism
(IPO with discount over time
-> trade sale w/o discount)
• Higher ARPU CAGR
(3.7% -> 5.0%)

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Key Terms of Co-investment (1/2)
Key Element Description

• The Partnership, a Delaware limited partnership, is a co-investment fund of Stonepeak Infrastructure Fund III LP and Stonepeak
Infrastructure Fund IV LP (together with parallel funds, feeder funds, AIVs, collectively the “Main Fund”)
Structure
• The general partner of the Partnership is Stonepeak Associates IV LLC (the “GP”), a Delaware limited liability company
• The advisor of the Partnership is Stonepeak Advisors IV LLC (the “Advisor”), a Delaware limited liability company

• The purpose of the Partnership is to directly and/or indirectly acquire interests in Radiate Holdings, L.P. and its subsidiaries and
related entities (together, the “Portfolio Company”) through Stonepeak Tiger Holdings I LLC (“Holdings I”) alongside Stonepeak
Infrastructure Fund III (AIV I) LP (“Fund III AIV”) and/or Stonepeak Infrastructure Fund IV (AIV I) LP (“Fund IV AIV”, Fund III AIV and/or
Investment
Fund IV AIV are referred to as the “Main Fund AIV Vehicles”) pursuant to the Agreement and Plan of Merger by and among Stonepeak
Tiger Holdings I LLC, Stonepeak Tiger Holdings II Sub LLC, and the other parties thereto, dated as of October 31, 2020 (the “Merger
Agreement”)

Follow on • The Partnership may also make further investments in or relating to the Portfolio Company (each, a “Follow-On Investment”). The
Investment Initial Portfolio Investment and the Follow-On Investments are collectively referred to as “Portfolio Investment”

• In the event that the Partnership is offered the opportunity to purchase additional equity interests in the Portfolio Investment, and the
Additional Partnership does not have sufficient Unpaid Capital Commitments for a Follow-On Investment, then the GP shall provide each Partner
Capital with an opportunity to make an additional Capital Commitment to the Partnership, which shall increase the Unpaid Capital
Commitment Commitment of such Partner that elects to participate in the Additional Capital Commitment, to enable such Partner to participate with
respect to its pro rata share of such additional investment opportunity

• Any co-investment opportunities offered to a limited partner of Fund III or Fund IV shall, unless otherwise mutually agreed between the
GP and such LP, not be subject to management fees or carried interest until such LP has accepted an amount of co-investment
No Fee / opportunities equal to the aggregate amount of such LP’s capital commitment in Fund III or Fund IV, as applicable (the “Co-Investment
Carry Threshold”), and amounts of co-investment opportunities accepted by such limited partner in excess of such Co-Investment Threshold
shall be charged management fees and carried interest at a rate equal to 50% of the applicable rates with respect to such LP under
the Fund III Main Fund LPA or Fund IV Main Fund LPA, as applicable

• Current Income will be distributed within sixty (60) calendar days following the end of the Fiscal Quarter in which such Current Income
Distribution is actually received by the Partnership. Disposition Proceeds from the Portfolio Investment shall be distributed within forty-five (45)
calendar days after the date such Disposition Proceeds are actually received by the Partnership

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Key Terms of Co-investment (2/2)
Key Element Description
No-Fault • If the GP of Fund IV is removed upon a 75% Combined Limited Partner Consent (as defined in the Fund IV Main Fund LPA), the GP of
Removal of the Partnership will also be removed as general partner of the Partnership and replaced by the same successor general partner as for
GP Fund IV
• The GP shall promptly notify the LPs of any Cause Event. For 90 days after the occurrence of a Cause Event and receipt by the LPs of
written notice thereof (whether from the GP or otherwise), the GP may be removed upon a consent of a Majority in Interest of the LPs.
A “Cause Event” occurs when the General Partner or the Advisor is found by any court or governmental body of competent jurisdiction
For-Cause to have committed:
Removal of (i) a felony or a material violation of applicable laws, rules and/or regulations to which the General Partner or the Advisor is subject
GP which would adversely affect the ability of the Partnership to conduct its business and affairs in a significant manner;
(ii) any other felony committed in connection with the Partnership’s investment activities; or
(iii) bad faith, gross negligence, fraud, willful misconduct, a reckless disregard of its duties under Co-Invest Fund LPA or a knowing and
material breach of the Co-Invest Fund LPA or the Investment Advisory Agreement in connection with the performance of its duties.
• A LP may not Transfer its limited partnership interest in the Partnership without the prior written consent of the GP, which consent shall
not be unreasonably withheld. The GP shall not withhold its consent to any Transfer by a LP to a Person if such Person is an Affiliate of
Transfer by
such LP the beneficial ownership of which is substantially similar to such LP; provided that the GP reasonably concludes that such
LPs
Transfer will not cause the Partnership or Portfolio Company to violate any applicable law or negatively affect the status of the
Partnership or Portfolio Company under the relevant tax laws, securities laws or ERISA
• If the GP or a LP determines in good faith and after receiving the advice of an internationally recognized and reputable law firm that the
Required continued participation of such LP would be reasonably likely to result in a violation of any law or regulation applicable to the
Withdrawal Partnership or such LP (a “Legal Violation”), then the GP or such LP shall notify the other of such Legal Violation and such LP shall be
required to withdraw from the Partnership immediately following such notification to the extent necessary to cure such Legal Violation
• Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Partnership, and within 90 days
(subject in both cases to reasonable delays, but in no event later than 120 days after the end of each Fiscal Year) after the end of each
Reporting
Fiscal Year of the Partnership, the GP shall send to each Partner the financial statements (balance sheet, statement of income or loss,
statement of partner’s capital and capital account statement) for the Partnership
• Each LP that (i) itself is an investment partnership or other collective investment vehicle having reporting obligation to its limited
partners or other investors and (ii) has notified the GP in writing prior to the closing of its subscription of Interest to elect disclosure right
contemplated in this paragraph may, in order to satisfy each of their respective reporting obligations, provide on a confidential basis the
Disclosure following information to such Persons regarding the Partnership and the Portfolio Company:
of (A) the cost of the Partnership’s investment in the Portfolio Company and the percentage interest of the Portfolio Company acquired by
Confidential the Partnership (but not the current value of such investment in the Portfolio Company),
Information (B) a description of the business of the Portfolio Company and information regarding the industry and geographic location of the
Portfolio Company,
(C) the name and address of the Partnership, and
(D) the fund level, aggregate performance information permitted to be disclosed as required by law.
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Responses to Preliminary IC Questions – (1/6)
Q1: Further analysis of Stonepeak’s business plan to understand the rationale and assumptions of the EBITDA growth
through the edge-outs strategy
• The EBITDA growth is driven by residential edge-outs strategy which assumes ~129k homes p.a. passed over the forecast period.
Stonepeak advised that it is reasonable on the basis:
1. Management was able to consistently grow the business through edge-outs, passing 110k homes p.a. over last two years;
management’s P60 Case is ~150k homes p.a. passed;
2. Management has identified 1.5 million homes to pass through over the next 5 years, even excluding the impact of new household
formation, which does not exhaust the TAM – leaving headroom for future growth;
3. The base case assumes zero incremental edge-out opportunities from M&A, which has not been typical for Ares;
4. Analysis of last four years has not indicated that penetration levels have started to compress (see charts below) and the new build
penetration forecast is conservative in most markets;
5. The market consultant, Altman Solon’s fair share analysis has indicated headroom above current penetration levels; and
6. The base case also assume overall penetration remains flat at ~30%

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Responses to Preliminary IC Questions – (2/6)
Q2: What is the mitigant or downside protection if the ARPU growth falls short of expectation and results in
downside scenario?

• The base case assumes ARPU grows at CAGR 3.7% versus CAGR 7.8% in the last 2 years. The broader cable industry (inclusive of Ares)
has grown ARPU over the same period at 6.9%, with 3-year and 5-year CAGRs of 6.2% and 6.0%, respectively;
• Broadband ARPU increases are a function of product mix-shift (e.g., speed up-tiering, incremental add-ons) from the customer base,
and an ability to maintain high customer satisfaction / NPS – Ares has consistently demonstrated an ability to do both;
• Ares historical analysis shows ARPU increases (on average) ~60% from pure price increases, with the remaining ~40% from upward
speed mix shifts from 2016-2020. Stonepeak’s base case assumes “further price increase” of $3.57 (versus management case of $6.07),
accounting for ~27% (see below 2020-2025 data ARPU bridge) of total price increase; and
• If the APRU growth is reduced from 3.7% CAGR to 2.7% CAGR (i.e. excluding further price increase), the IRR impact will be -2.5%

Historically, ~60% of Ares’ ARPU increase came from “further price increase”
and ~40% came from upward speed mix shifts from 2016-2020

Base Case consumer-driven price increases consist of 1) continued mix shift towards higher speed and higher priced data packages 2) gradual reduction in
data ARPU discounts associated with bundling packages as customers increasingly purchase data-only packages 3) increased uptake in Wifi Add-Ons
including Eero mesh WiFi product

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Responses to Preliminary IC Questions – (3/6)
Q3: Please provide further comparable analysis / transactions
1. Please see below private comparable transactions
Target Buyer Year xLTM TEV ($mm)
Cable
MBI Cable One 2020 16.5x $1,650
Ritter Comm. Grain Management 2019 14.0x ~$400
Vyve Mega Broadband 2019 11.0x ~$300
Fidelity Comm. Cable One 2019 11.7x $526
MetroCast Atlantic Broadband 2017 12.2x $1,400
Wave Broadband RCN, Grande 2017 12.6x $2,365
NewWave Cable One 2017 11.5x $735
RCN, Grande TPG 2016 8.2x $2,250
Cablevision Altice 2015 10.0x $17,700
MetroCast CT Atlantic Broadband 2015 9.5x $200
Time Warner Cable Charter 2015 9.5x $78,678
Bright House Charter 2015 10.0x $10,400
Suddenlink Altice 2015 10.1x $9,100
Median 11.0x
Enterprise
inexio EQT 2019 26.0x $1,100
Zayo EQT / Digital Colony 2019 11.8x $14,300
IP-Only EQT 2019 19.6x $1,913
FPL FiberNet Crown Castle 2016 16.7x $1,500
Level 3 CenturyLink 2016 13.1x $34,926
Median 16.7x
FTTH
i3 Broadband Wren House 2020 20.0x NA
Blue Stream GI Partners 2020 18.0x NA
HyperOptic (75%) KKR Infra 2019 ~100.0x £500
SFR FttH Allianz / Omers 2019 40 - 50x ~€1,250
Inexio (90%) EQT 2019 ~18.0x ~€1,000
Altice PT (49%) MSIP 2019 20.0x $4,630
CityFibre GS Infra / Antin 2018 38.0x $750
Ufinet Spain Antin Infra 2018 17.0x $1,040
Median 20.0x
Overall Median 13.6x

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 Responses to Preliminary IC Questions – (4/6)
Q3: Please provide further comparable analysis / transactions

2. Please see below public comparables

Source: Bloomberg, 11th Jan 2021

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Responses to Preliminary IC Questions – (5/6)
Q4: Please provide the detailed breakdown of residential and business capex for 2020 and 2021, and whether there is
sufficient budget for the proposed capex

• Please see below the breakdown of capex which is in line with historical capex program and remains at 24-26% of revenue (excl.
incremental M&A);
• The spike of build multiple of residential capex is due to a conservative assumption to account for potential COVID delays; and
• For business solutions capex, there is a spike in FY2020 and 2021, which is related to the one-time buildout of fiber backbone to ~410
small cell sites for a national carrier in New York and ~132 sites in Texas. Ares fully expects the ability to blend down this build multiple
over time through incremental gross install opportunities and synergies captured on the residential side of the business. Further the
spike of build multiple again represents Stonepeak conservative assumptions to account for potential COVID delays (management does
not expect the same degree of slowdown, so to the extent their budget plays out per expectations, there is scope for meaningful
outperformance here).

Capex Build 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E
Residential New Build Capex $37.8 $53.5 $52.8 $50.0 $63.5 $67.7 $72.3 $77.1 $82.2
Business Solutions New Build Capex 82.4 43.8 44.3 63.8 61.6 50.2 59.0 77.4 75.0
CPE Capex 91.3 89.4 74.9 78.4 81.0 87.5 92.5 98.6 104.2
Capitalized Labor Capex 76.5 84.5 90.5 92.2 93.2 94.1 95.0 96.0 96.9
Other Capex 100.7 90.2 89.5 74.8 72.9 73.2 73.5 81.7 98.7
Entouch Capex 11.7 10.2 11.3 10.0 18.9 16.4 14.3 14.3 14.1
Total Capex Excl. Incremental M&A $400.4 $371.6 $363.3 $369.1 $391.1 $389.2 $406.6 $445.0 $471.1
Incremental M&A – – – 2.4 2.8 3.5 19.9 37.3 55.6
Total Capex Incl. Incremental M&A $400.4 $371.6 $363.3 $371.5 $393.9 $392.6 $426.5 $482.3 $526.7
% of Revenue Excl. Incremental M&A 27.7% 25.1% 23.9% 24.1% 25.2% 24.6% 25.0% 26.2% 26.5%

Q5: Ping An investment structure and its potential tax impact

• Please refer to page 4 for Ping An’s investment structure. As advised by PwC, the tax leakage as a result of blocker structure is around
0.1% IRR, resulting in Ping An’s base case IRR being 13.8%

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Responses to Preliminary IC Questions – (6/6)
Q6: Will Ares be under financial stress if the business is underperforming
• Given that its recurring revenue basis and high cashflow conversion, the risk of financial stress is considered to be low
• Please see below the leverage (ND/EBITDA) under each of base case and downside case (see chart below). The leverage of downside
case remains below the covenant of 7x ND/EBITDA over the forecasted period
• Ares is still able to prepay debt voluntarily under the downside case, i.e. [Link]$900m over 2021-29E. Also the mandatory amortization is
minimal at c. US$26.9m p.a. which gives a great flexibility to Ares (see table below)
• c.30% of capex is discretionary, which Ares can postpone or delay if necessary

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Project Ares
U.S. Telecom Co-investment Opportunity with Stonepeak

2020/12 Project 1st in-charge: Hoi Tung

Investment in-charge: Dennis Chan
Risk in-charge: Julian Wang

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Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

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Executive Summary – Investment Overview (1/2)
 Headquartered in Princeton, New Jersey, Ares is the 6th largest cable provider in the U.S. and provides high-speed data, voice and
video services to over 940,000 residential customers and serves a broad range of enterprise customers through its small- and
medium-business and business solutions segment
- Passes 3.1m households with 30.7% penetration rate
- Pipeline of ~2.9m households adjacent to existing service territories
 With a footprint that spans 31,000 route miles, including 22,000 fiber route miles, Ares’ fiber-rich network is fully upgraded with
the latest cable DOCSIS 3.1 standards, capable of delivering 1 Gigabit internet speeds across the U.S.
 Ares comprises three of TPG’s historical acquisitions, RCN (2017), Grande (2017) and Wave (2018), as well as EnTouch (2020) and
Digital West (2020), now under one roof and run by management team
Ares
Background  Ares operates in 8 out of the top 10 Designated Market Areas (DMAs) by GDP per capita and ranks above U.S. national averages
in key metrics, including population density, median household income and nominal GDP growth
- Key markets include incumbent positions in Wave North and Lehigh Valley (~40% of 2019A EBITDA), and partial incumbent
positions in Chicago, Texas and Wave South (~40% of 2019A EBITDA)
 In 2019, Ares generated $1.522b of revenue and $624m of EBITDA (41% EBITDA margin) and has grown EBITDA at 9.2% CAGR
from 2017-2019. More than 74% of Ares’ gross profit was from high-speed data, which flows through at over 95% gross margins
and continues to support expanding EBITDA margins (EBITDA improved by 437bps from 36.6% in 2017 to 41% in 2019) and
cashflow conversion (after capex) from 19.4% to 35.0% over the same period
 Ares’ management team, led by Steve Simmons (Chairman), Jim Holanda (CEO) and John Feehan (CFO) have worked together for
more than 10 years, and whom Stonepeak believes are among the most capable and accomplished executives in the sector
 U.S. cable has shown steady growth and been recession resilient through the last three cycles – industry revenue grew 9% during
1990-1991 recession, grew 11% during 2000-2001 recession and grew 6% during 2007-2008 recession
 Internet traffic and data consumption have continued to grow in the past decade – U.S. residential broadband penetration has
Industry
grown from sub-60% in 2008 to ~80% in 2019, and U.S. residential broadband subscribers have grown from 67m in 2008 to 109m
Highlights
in 2019, representing a CAGR of 4.5%
 U.S. cable download speeds has grown from 7.5 Mbps in 2010 to 50.2 Mbps, driven by improving infrastructure satisfying
customer demands, favoring players with fiber-rich network

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Executive Summary – Investment Overview (2/2) Page #

 Non-cyclical, steadily growing industry: Cable providers employ a recurring revenue, subscription business model that has continued to 31
grow through recessions (U.S. cable industry revenue grew 9% during 1990-1991 recession, grew 11% during 2000-2001 recession and
grew 6% during 2007-2008 recession)
 Robust competitive position across diversified, attractive markets: Ares operates in 8 out of the top 10 Designated Market Areas
(DMAs) by GDP per capita. Across its footprint, Ares ranks above U.S. national averages in key metrics, including population density (694 38
per sq. miles for Ares vs. 94 per sq. miles average), median household income ($80k vs. $66k) and nominal GDP growth (5.2% vs. 4.2%) ,
which translate into higher propensity of spend on data consumption
 Scale platform with significant owned infrastructure: Ares’ footprint spans 3.1 million homes and businesses, with 19,000 network
nodes, 32,000 total plant miles – of which 22,000 or approximately 70% are fiber – and a fully upgraded network capable of delivering 39
gigabit data speeds across its entire footprint. As a result, Ares is almost never at a speed disadvantage versus competitors in its high-
speed data offerings. General cable companies’ network is 25% of fiber and 75% of coax
 Ability to capitalize on continued demand for higher bandwidth: Ares has consistently seen greater speed take-up across subscriber 55
base, with 44% of its residential users moving to speeds of 100-300 Megabytes in 2019, up from just 9% five years ago. Ares’ ability to
deliver speeds of up to 1 Gigabyte across its network, along with its strong Net Promoter Scores (“NPS”), enables runway of future 40
growth
Investment  Consistent track record of growth with long runway of “edge-out” targets: Management able to consistently grow the business through
Highlights targeted network expansions or “edge-outs”, passing 110k homes p.a. over last two years, with an identified opportunity set of 1.5 58
million homes, with “edge-out” returns at ~38% IRR and 2.5-year payback period; leveraging existing fiber infrastructure to quickly and
46
inexpensively build past homes currently served by poor-performing incumbent operators provides opportunity to invest capital into
expansion at attractive economics (typically mid-single digit build multiples)
 Opportunity to leverage network assets to drive commercial segment growth: Opportunity to accelerate growth in the business 61
solutions segment through leveraging Ares’ extensive fiber network; “fair share gaps” of 500 bps+ in several key markets per consultant
47
report and management has identified 878k near-net commercial targets, 481 near-net data centers, and a number of tower backhaul
opportunities (with an expected unlevered IRR at ~20%)
 Strong management team: Ares’ management team is one of most capable and accomplished group of operators in cable industry in
Stonepeak’s view, having invested in and operated several cable companies over past two decades; each of those investments have
50
grown EBITDA at high-single digit or double-digit EBITDA CAGRs, with CEO Jim Holanda and team driving growth through organic
initiatives and M&A. This is the management’s 6th partnership with private equity, delivering 2.6-5.2x MOIC with PE firms they worked
with in the past
 Strong M&A track record: Management has demonstrated ability to execute on M&A opportunities, mostly recently closed acquisitions
of EnTouch (6.3x) and Digital West (~7.1x) in 2020; Stonepeak believes there remains a significant runway of inorganic growth 63
opportunities for Ares

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Executive Summary - Key Risks and Mitigants Page #
 Medium - Ability to maintain share and continued accretive “edge outs”: Fundamental to the investment thesis is that Ares can defend share in existing
markets and pass new homes at run-rate penetration levels in-line with present trends – to the extent that Ares is unable to (a) retain status quo
penetration levels in key markets – particularly Wave and Lehigh Valley, given their ~56% contribution to EBITDA and/or (b) faces a material decline in
build efficiency and edge-out opportunities, projected returns could come under pressure
Mitigants: Analysis of last four years has not indicated that penetration levels have started to compress; the market consultant, Altman Solon’s fair share 58
analysis has indicated headroom above current penetration levels
 Medium to Low - Legacy products are declining: Despite the relatively small portion of Ares’ earnings that the voice and video products comprise, there is
continued drag from ongoing churn of legacy voice and video products and there are some variables that could potentially exacerbate those impacts,
namely (a) if Ares is no longer able to pass through increase in content and programming costs on the video side to customers in the form of price
increases and (b) if bundling dynamics result in a video revenue generating unit (“RGU”) churn event causing a data RGU churn at the same subscriber
Mitigants: Base Case assumptions assume acceleration in legacy product declines vs. historical, and given relatively limited exposure, a further acceleration 44
in these declines would have a limited impact on returns. Gross margin contribution from voice and video is assumed to decline from 22% in 2019A to 9%
in 2025 in the Base Case
 Medium to Low - Competitive threat from fixed wireless: In conjunction with 5G rollout, U.S. carriers have discussed the potential for fixed wireless
(which involves leveraging mid- to high-band spectrum and small cell deployments to provide customers with wireless internet connections) to act as a
substitute for wired internet connections
Mitigants: None of the major U.S. carriers other than Verizon and T-Mobile have committed to fixed wireless plans, and both have seen their progress
stalled by technical challenges (i.e., network underperformance and interference); fixed wireless is typically used in areas which it is uneconomical to build
94-95
Key Risks wireline infrastructure and is either uncompetitive with FTTH / DOCSIS 3.1 gigabit speeds or is challenged by line-of-sight / coverage radius issues, and
and hence not a credible challenge in the areas in which Ares operates. A cost comparison between wired and wireless connection is estimated at $1500/per
Mitigants
home higher for wireless, which even doesn’t include the cost of the small cell deployment based on Verizon’s fixed wireless rollout in Sacramento
 Medium to Low - Exit considerations: The projected size of Ares at the time of exit, which would be very large, may limit exit options
Mitigants: While the equity check required would be large, there are multiple private equity, infrastructure and pension funds with the requisite capital to
execute the contemplated transaction. There will also be the optionality to take Ares public (which is Stonepeak’s Base Case), and Stonepeak & co- 66
investors can sell down in public market gradually
 Low - High leverage: Ares would be levered at 6.8x on gross basis at inception of Stonepeak’s hold, which is relatively tight given Stonepeak’s planned
capital investment program (e.g., edge-outs and M&A)
Mitigants: Ares has shown an ability to consistently grow EBITDA, generate cashflow and de-lever and cable companies are typically more highly levered 48
than incumbent telcos (Altice at 5.3x and Charter at 4.5x). Stonepeak assume de-lever to 4.2x by 2025 and recap to 5.0x in 2026
 Low - Regulatory risks: As cable companies continue to grow their share of broadband subscribers to >60%, they could attract the attention of regulators.
The Cable Act of 1992 authorizes the U.S. Federal Communications Commission (FCC) to certify a state or local franchising authority to regulate the rates
for basic cable service charged by any cable system that it finds is not subject to effective competition.
Mitigants: Stonepeak and industry participants view price regulation as a highly unlikely outcome, given the focus to date on broadband regulation has
been around the issue of net neutrality. Any cable regulation would require the re-classification of the industry as a Title II service by the FCC which would
bring the industry under the agency’s purview. As a point of reference, mobile services have been classified as a Title II service for the last two decades
with no pricing regulation. As such, Stonepeak don’t view pricing regulation as a realistic outcome. With respect to the Cable Act of 1992 - Ares competes
against 2+ competitors across substantially the entire footprint and as such, even in the highly unlikely case of targeted price regulation, Stonepeak does
not view Ares as a likely target. 19页
Executive Summary – Transaction Background
• On October 2020, Stonepeak III and Stonepeak IV executed definitive agreements to acquire Ares
• Total purchase price was $8.1b, of which ~$3.7b would be equity, of which ~$1.5b from Stonepeak III and ~$2.2b from Stonepeak IV –
this transaction would be Stonepeak III’s last investment and Stonepeak IV’s first investment
Sources & Uses

Sources $mm % x 2021E Uses $mm % x 2021E

Stonepeak Equity 3,770.4 45.2% 5.3x Shareholder Equity 3,534.4 42.4% 5.0x
Existing Debt 4,565.6 54.8% 6.4x Existing Net Debt 4,565.6 54.8% 6.4x
Minimum Cash to Balance Sheet 100.0 1.2% 0.1x
Stonepeak Deal Fee 81.0 1.0% 0.1x
Advisory & Legal Fees 55.0 0.7% 0.1x
Total Sources 8,336.0 100.0% 11.7x Total Uses 8,336.0 100.0% 11.7x

• The purchase price represents 11.4x EV/EBITDA on NTM basis, at anticipated transaction close
• The acquisition of Ares represents Stonepeak’s third investment in the broadband infrastructure space – with the first deal being
euNetworks in January 2018 (European fiber network across 51 cities in 15 countries) and second deal being Xplorenet in June 2020
(Canada’s largest rural-focused broadband service provider) – based on Stonepeak’s conviction of the criticality of internet access in the
modern society, which was further strengthened during COVID-19 pandemic; in terms of track record, as of Q3 2020:
- Stonepeak III’s gross IRR was 30% and gross MOIC was 1.4x, with 0% loss ratio
- euNetworks’ gross IRR was 12.6% and gross MOIC was 1.4x
- Xplorenet’s gross IRR was 141% and gross MOIC was 1.3x
• Stonepeak has commenced the co-invest process to syndicate a portion of Stonepeak III and Stonepeak IV’s final holds – the total
syndication amount is expected to be $1.4-1.7b
- Ping An has $47.5m remaining co-investment rights with Stonepeak III on no-fee, no-carry basis
• Stonepeak has requested interested co-investors to submit (i) non-binding LOI in the week of December 9, 2020 and (ii) final
commitment on January 15, 2021 to allow time for legal closing of co-investment at the end of January 2021
• The closing of Ares is subject to customary regulatory approvals, which Stonepeak expects to obtain within 6 to 9 months of signing

20页
Executive Summary - Ping An Base Case 13.8% Net IRR / 2.3x Net MOIC
Ping An believes Stonepeak’s P60 Case (or Base Case) return is highly achievable
Assumes zero
households D E
passed with
C
entry=exit, and
B F
ARPU growth of G
3.7% vs. 7.8%
historical

SP Base Return, Exit Multiple SP Base Case Litigation Cost PA Tax Leakage PA Base Case
Starting Return: Existing Continued Edge Outs Commercial Business Incremental M&A
Compression Return
Footprint Acceleration Entry = Exit
D E F
A B C Though the business solutions segment (BSS) Long-term cable multiples have
The P60 Case assumes ARPU Management has Since 2003, the Ares
has demonstrated steady growth (7.4% since steadily traded up with The P60 Case assume
grows at 3.7%, versus L2Y CAGR identified 1.5mm homes to management team
2017), Stonepeak believes the business is CableOne and Charter trading at US$15m litigation cost. PA
of 7.8%. The broader cable pass through the edge-out has executed multiple
being vastly underutilized. Despite fiber 17.7x and 11.5x, respectively, reviewed LDD report and
industry (inclusive of Ares) has program over the next 5 transactions, earning
network assets and on-net connectivity largely driven by the improving conservatively increase
grown ARPU over that same years. Even excluding the MOICs of 2.6x-5.2x.
counts that compare well with benchmarks, cashflow conversion of litigation cost to US$141.5m
period at 6.9%, with 3-year and impact of new household Through RCN and
Ares ranks last in rep coverage per dollar of businesses increasingly to address 2 open copyright
5-year CAGRs of 6.2% and 6.0%, formation, the P60 Case ultimately, Ares,
TAM and sales rep productivity. Even comprised of high-margin data infringement litigation, 2
respectively. Broadband ARPU over 7 years does not management has
assuming sales rep productivity reverts to the products. P60 case assumes exit patent infringement matter
increases are a function of exhaust the TAM—leaving acquired ~$35mm of and 2 potentially putative
second-worst peer in its group, the BSS at 10.5x NTM EBITDA, a multiple
product mix-shift (e.g., speed up- headroom at exit. EBITDA per annum, class actions. Some of them
would improve its average gross MRR installs compression of 0.9x relative to
tiering, incremental add-ons) Additionally, strategic including two are still in early stage
over L2Y by nearly 3x (from $1.8mm per NTM entry multiple at
from the customer base, and an M&A often expands edge- strategic tuck-ins this without estimates while the
month to $5.2mm per month). P60 Case only transaction close. As cable
ability to maintain high customer out TAM (e.g., small Digital year. P60 Case others are based on the
assumes a fraction of that increase, to businesses shed legacy video
satisfaction / NPS—Ares has West acquisition added assumes ~$21mm of indicated claims and/or high
$2.9mm per month (overall revenue CAGR of and become increasingly data-
consistently demonstrated an incremental 100-200k EBITDA acquired per level estimates
9.0%). Through DD, SP have identified fair centric, we expect further uplift
ability to do both potential HHs) annum
share gaps of 500bps+ in several key markets. to multiples
G
*PA tax leakage is based on PwC’s analysis which is based on two major assumptions: 1) distribution of refinancing proceeds in 2026 would be non-taxable return of capital, which PwC believe
would be reasonable given that the co-investment platforms would likely have minimal US tax earnings & profits after expense deduction and amortization of stepped up tax basis in acquired
assets; and 2) disposal of co-investment in 2027-29 (presumably by way of an IPO) would not be subject to US tax, which would not be appear to be unreasonable if (i) at the time of IPO, Ares would
not be US real property interests as defined under IRC Section 897; and (ii) pre-IPO restructuring would be effected in a tax-free manner.

21页
Executive Summary - Return Summary with Key Assumptions
Ping An Base Case
13.8% net IRR / 2.3x net MOIC
• Stonepeak P60 Case adjusting
for litigation cost and PA tax
leakage

Ping An Downside Case

7.8% net IRR / 1.6x net MOIC
Ping An Base Case adjusting for:
• Lower ARPU CAGR
(3.7% -> 2.7%)
• Average HH passed per annum
(129k -> 100k)
• Bolt-on M&A EBITDA
(~$21m p.a. -> ~$8m p.a.
2021E-26E)
• The target and blockers are US
real property holding company

Ping An Upside Case

19.0% net IRR / 2.6x net MOIC
Ping An Base Case adjusting for:
• Exit multiple
(10.5x -> 11.1x Exit = Entry)
and
Exit mechanism
(IPO with discount over time
-> trade sale w/o discount)
• Higher ARPU CAGR
(3.7% -> 5.0%)

22页
Executive Summary – Comparables Analysis
Ares exhibits significant data exposure alongside a robust EBITDA growth profile relative to peers
Peer Benchmarking

A B C (5)
H

G
D
E
F F

A Ares has the second B Ares’ historical and projected C Capital intensity expected to D Comcast: Includes E F G H
highest exposure to EBITDA growth rate are in-line remain at elevated levels several other segments: WOW: Pure ILECs: Business Altice: More CableOne
high-growth, high- with industry leaders, Charter relative to peers as edge-outs entertainment, content, overbuilder model inflection / competitive & Charter:
margin data revenue, & Cable One. Current margin remain a key part of the bet, theme parks (e.g., NBC, with heavy transformational footprint Best-in-
just slightly behind levels expected to expand in currently with the 2nd highest Universal, Sky); SOTP legacy upgrades and lower class cable
industry leader Cable line with industry wide mix- annual HHs passed growth multiple for cable exposure required growth operators
One shift to data rate in the sector business at ~11x

Significant Data Exposure 6th Largest Platform in the U.S. Ares Residential Penetration by Market
Residential Data as % of Total Cable Revenues Top 10 Platforms by HSD Subs (mm)

Incumbent
Partially Incumbent
Clear
penetration
variance
Ares between
incumbent
/ non-
incumbent
markets

Incumbent
Non-

(6)

Source: S&P Global Market Intelligence, Factset, Capital IQ, Company filings; Note: Market data as of 10/21/20.
1. PF for Fidelity 2. Trading multiples reflect Comcast WholeCo [Link] for Hawaii; ARPU growth based on data FTTH ARPU. 4. PF for Fairpoint 5. Represents 2021E EBITDA multiple 6. Altice USA, Atlantic Broadband, Cable One (Sparklight), Charter, 23页
Comcast, GCI Liberty (Cable consumer + business), Mediacom, Shentel (Cable), TDS (Cable) and WOW.
Executive Summary – Ares is on Budget for 2020 despite COVID Headwinds
Business has performed remarkably well, proven its resiliency

*2020YTD as of end June 2020

24页
Executive Summary - Investment Structure
SP co-investment platforms
(blocker structure) in which
Ping An’s SPV will participate

25页
Executive Summary – Ping An’s Interviews with U.S. Industry Experts (1/2)
Ping An’s interviews with U.S. industry experts were arranged through GLG and largely corroborated with our own analysis and the story presented by Stonepeak
• Incumbents such as Comcast, AT&T and Verizon have the power to determine pricing, have deep pockets and have wide recognition. Overbuilders face uphill battle as they
need to pay franchise fee to offers services in certain states or cities.
• Overbuilders usually loses money on one product line to make money on other products, e.g., lose money on the video, but make money on the data.
• Residential side sometimes no contracts and commercial side usually 3-year contracts.
• Under COVID-19 pandemic, U.S. households are moving out to suburbs and using cable for entertainment, so churn lower than before.
• Incumbents have significant investments and costs in running legacy network so ARPU not increasing (but also not losing customers), whereas overbuilders’ infrastructure
Peter Ficarri technology is newer, which allows overbuilders to increase their ARPU faster than incumbents
(Former National • Fiber optic much more scalable and does not require as much components as coax.
Director of Business • If a building has 3+ competitors, a player wouldn’t want to build there.
Development at RCN • When deciding to go into new area to compete with incumbents, overbuilders are looking to get investment back within 12-18 months (benchmark is attaining 20%
Telecom) penetration in first year, and level off at around 30% penetration).
• In comparison with fiber, coax is asymmetric (upload and download speed not the same, cannot get to 1GB), used as “disaster recovery play” or insurance. Fiber is
symmetrical and more stable. Fiber more expensive to build than coax, and so higher ARPU. With pandemic, people need more stable services.
• Residential and commercial customers on same network is good, because they each have different peak use time.
• Over the long-term, fiber prices should go up, especially after pandemic is over, so telecoms firms do not want to sell these assets.
• 5G/wireless not a serious threat to broadband because still lots of places in U.S. in which wireless won’t get to high speed, e.g., Verizon 5G only in very densely populated
areas. Wireless could be affected by weather (e.g., snow, rain), and there are lots of unknowns in the stability of the service quality. Still a long way away, still very far off.
• Historically, incumbents didn’t compete (licenses granted by local cities), so in most U.S. cities only 1-2 cable operators, plenty of business in early days; technology
standards deployed (e.g., modems) are jointly developed and applied, which lowers risks and costs for all the operators; for telcos, different standards.
• For customers, if services and prices are satisfactory, then they don’t tend to leave, so difficult for overbuilders to take the incumbents’ business, especially when
incumbents can react for adjusting pricing or whatever needs to be done to retain the customers, but new entrants can compete on prices.
• In U.S., many types of markets:
 Wealthy, high income towns: New entrant would typically target the best areas for higher returns, somewhat hurting returns of incumbents (broadband cable
extremely profitable, 70% margin), and a new incumbent can still find profitable niche but hasn’t taken hold very well
 Suburban: Density and income are average, cable been there for many years, harder to overbuild because of density
 Low income housing: may use wireless to some extent, and some with usage cap, sometimes data usage even higher than average, higher density
 Rural: Density (only 10-15 homes per mile), not good for overbuilders but some try because less served and can get government subsidies
Aldo Casartelli  SME and enterprise market: Some overbuilders exclusively target businesses, more density, one-on-one relationships
(Principal at Cable  Commercial buildings: Overbuilders successful in commercial buildings with one owner and multiple tenants, high density and returns are good, but requires one-on-
Media Group, former one relationships with owners, owners want to share revenue, e.g., 15%
VP of High Speed Data • For ARPU, it has grown because more products to sell, not just video, also broadband and voice; many customers are cutting the cord (dropping the video) and because of
the discounts in bundling that were eliminated, so ARPU can still grow; operators can raise price and not lose customers, operators able to increase speed & increase price,
Product at Cable One)
but may be hard to increase speed a lot more (1 Gigabit near maximum)
• Gross margin for data, video and voice are 70%, 30% and 40%, respectively
• 5G more of an opportunity for cable rather than a threat because can sell fiber to 5G tower operators
• Cable still a very predictable business, even if new U.S. administration may fine tune certain policies
• Cable and fiber will always be superior to wireless because of physics, but maybe in low usage areas, wireless may be viable
• For edge-outs, operators will perform customer segmentation, cost per mile analysis, typically 25% penetration, payback 5 years, 15-20% IRR, U.S. South & West seeing
population growth, so some operators edging out to these communities, limited growth in U.S. East
• Higher fiber content network is a competitive advantage, and that is coming from better performance and more opportunities to sell to 5G towers and businesses
• Video is a challenging because costs are increasing, e.g., sports, other content, some cable operators dropping channels and de-emphasizing their video products
• For SMB/Enterprise market, sales is key and cable difficult to compete against telcos, but can offer lower price; backhaul and dark fiber most lucrative in enterprise segment

26页
Executive Summary – Ping An’s Interviews with U.S. Industry Experts (2/2)
Ping An’s interviews with U.S. industry experts were arranged through GLG and largely corroborated with our own analysis and the story presented by Stonepeak
• Competitive dynamics
- Incumbents have deep pockets and primary products are video, voice and data, and have cable network in place and do not have extra cost to offer
services
- Overbuilders have to build their own network to connect homes, and with local franchise fee eliminated, franchise fee is not entry barrier for new
entrants
- For product line profitability, video: slim margin, high costs; broadband: high margin; telephone: giveaway product
• Fixed broadband vs. 5G wireless
- Mobile companies offer lower price for lower speed; but consumers may not want slower speed
- During Covid-19, cable companies offer lower price for lower speed for WFH
- Small cells need to be backhauled to switch, and getting permit to build 5G small cells is challenging
• Technology risk for cable companies
- Cable companies such as Comcast are building their own 5G network
- Cable companies use fiber network for new places and in the long term, will upgrade to 5G network, which is a long-term strategy for cable
companies and may not have to be cooperation with telcos because they could build their own towers and small cells, which Comcast is doing
• Densely populated areas vs. suburbs vs. rural areas
- Most densely populated areas have cable network in place
- The fastest speed by satellite is 20 Mbps
Michael Edwards • ARPU growth
(Former Director of - Video: price increases every year without offering something extra because program costs get higher every year
Operations at Charter - Landline telephone: price increase will lead to decrease of subscribers
Communications) - Internet: slight increase because of small increase in speed; need to offer higher speed in return for higher price
• NPS score
- Customer stickiness is high and customers will not leave unless they are very angry
- Many consumers do not like their cable companies because of the increase of video products but they do not have a second choice so they do stay with
the cable company
- Consumers complain that cable companies do not deliver the service they promise
- Consumers are paying more but they are not offered something new
• Coax and fiber
- In greenfield situations, cable companies normally build fiber which is able to deliver high speed
- Whether to replace existing cable network (coax) depends on the technology they deploy; if companies can deliver higher speed with existing coax
network, they do not need to replace
- Cost to operate fiber is lower because of the stability
• Edge-out strategy
- Cable companies have 20% IRR in edge-outs
• Key concerns
- Biggest concern would be the customer service with the consistent increase of price; and whether 5G could perform as it is supposed to deliver
- The regulation on broadband in terms of price increase in the next presidential period would also be a concern; it will not devastate cable companies
but would make it more difficult for cable companies to increase price and marketing strategy

27页
Executive Summary – Conclusion
Ares operates in 8 out of the top 10 DMAs by GDP per capita in the U.S. Best-in-class fiber infrastructure and strong customer satisfaction

 Across its footprint, Ares ranks above U.S. national averages in key  Ares’ footprint spans 3.1 million homes and businesses, with 19,000
metrics, including population density (694 per sq. miles for Ares vs. 94 per network nodes and 32,000 total plant miles – of which 70% are fiber vs.
sq. miles average), median household income ($80k vs. $66k) and nominal only 25% for industry norm, which translate to higher speeds
GDP growth (5.2% vs. 4.2%) , which translate into higher propensity of  Positive brand recognition and strong customer service, which translate
spend on data consumption to top Net Promoter Score (“NPS”) in 2020 per industry source
Ares Net Promoter Score

Ares deal entry multiple (11.4x EV/EBITDA on NTM basis) represents discount
to CableOne (17.7x) and in-line with Charter (11.5x), which are Ares’ closest
cable comparables based on EBITDA growth and revenue profile
Consistently outperforming industry peers Trading History (2000 to now)
EV/EBITDA NTM basis
 Track record of industry-leading EBITDA growth, driven by organic
capital deployment, M&A, and focus on high-margin data products

Ares entry at 11.4x

EBITDA Growth EBITDA Margin EV/EBITDA Data as % of

(2017-2019A) (2019A) (NTM basis) Revenue
Ares 8.6% 41.0% 11.4x 46.7%
CableOne 11.1% 48.8% 17.7x 50.0%
Charter 5.0% 36.8% 11.5x 38.7%
Altice 3.5% 43.7% 8.8x 37.2%
Comcast 6.4% 40.1% 8.6x 34.7%
28页
Executive Summary – Recommendation

 We seek the Investment Committee’s approval for:

– Investment of up to US$30 million in Ares; conditional non-binding indication to be sent, with final closing subject to satisfactory

legal and tax due diligence results, and documentation

– Source of capital: China Ping An Insurance Overseas (Holdings) Limited

– Engagement of professional advisors for due diligence:

o Legal advisor: budget US$120,000

o Tax advisor: budget US$30,000

29页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

30页
U.S. Cable Non-Cyclical & Growing
Cable has shown steady growth and been recession-resilient through the last three cycles
Indexed U.S. Cable Industry Revenue Growth Since 1990

Source: SNL Kagan

31页
U.S. Cable Industry Product Shift Over Time
U.S. cable industry has demonstrated consistent, long-term topline growth and an increasing share of the communications market
Transition from Video to Broadband Well Under Way
Broadband & Video Subscribers Over Time (million) Broadband as % of Revenue

Broadband
Video

With Continued Mix Shift and Penetration Increases Expected to Continue to Drive Industry Growth
Cable Download Speeds Over Time (Mbps) Broadband Penetration in the U.S.

Source: Stonepeak
32页
Increasing demand for high speed data in U.S.
Broadband sector poised to continue strong growth

33页
U.S. Cable Industry Broadband Pricing Over Time
Cable operators have demonstrated an ability to push through sustained price increases across the last decade
Broadband ARPU Benchmarking
$85

$82
$80
$78
$80

$76
$74
$72
$75

$71
$70
$69

$68

$67
$67

$66
$70

$64

$64
$64

$64

$64
$63

$63

$62

$62
$62

$61

$61
$65

$61

$59
$59
$58
$58

$58
$58

$57
ARPU

$56
$60

$56

$55

$55
$54

$54
$54

$54
$54

$52
$52
$51
$55

$50
$50

$50
$49
$49
$48
$47

$46
$50
$45
$44

$43

$45
$40
2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E
WOW Charter
14.5% Comcast RCN Ares Altice Cable One

13.3%
15.0%
11.3%

12.5%
9.9%

9.7%

9.3%
8.8%

8.7%
8.6%
YoY ARPU Growth

8.6%

8.3%
10.0%
8.1%

8.0%

7.8%
7.7%
7.3%
7.3%

6.4%

6.1%
7.5% 5.6%

5.5%

5.1%
5.0%

4.6%

4.5%

4.5%
4.5%
4.5%

4.4%

4.3%
4.3%

4.3%

4.2%
4.2%

4.0%
3.7%

3.5%

3.5%
3.5%

3.5%
3.5%

3.5%
3.4%
5.0%
3.1%

2.9%
2.6%

2.5%
2.5%
2.4%

2.3%

2.5%

0.0%
2014A 2015A 2016A 2017A 2018A 2019A 2020E 2021E 2022E
WOW Charter Comcast RCN Ares Altice Cable One

Source: Stonepeak
34页
U.S. Cable Through Recession Performance
Cable operators experienced moderate declines in broadband amidst the GFC, although Stonepeak views this as unlikely to repeat
given increasing importance of broadband with operators continuing to push through price increases amidst COVID-19
Broadband Sub Growth (‘07 – ‘12)

Broadband Penetration (‘07 – ‘12)

Broadband ARPU (‘07 – ‘12)

A

A
The decline in broadband ARPU during the recession coincides with (i) the peak for putting customers into bundles discounts that are today unwinding and providing a tailwind for ARPU (ii) voice
subscriptions being added to triple plays at the fastest rate, providing an accounting headwind to broadband as bundles revenues must be allocated on the basis of arbitrary set standalone list prices

Note: Street research, Moffett

35页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

36页
Ares Overview – 6th Largest Cable and Data Services Provider
Ares Asset Overview Historical EBITDA Growth vs. Peers (% change, YoY)1
 Nation’s 6th largest cable and data services provider, headquartered in
Business Princeton, New Jersey
Description  Provides voice, video, and data services to residential, SMB, and mid-
to-large enterprise customers

 3.1mm households passed, 30.7% penetration

Owned  Capable of delivering gigabit speed across entire footprint
Infrastructure  ~31k route miles
 ~22k fiber route miles

 Residential: Data, Video, Voice

Core Service  SMB: Business Internet, Hosted Voice, Video
Offerings  Enterprise: Wavelength, dark fiber, dedicated internet access,
wireless backhaul, DC:DC connectivity

 2019A: 988k customers | 879k residential data RGUs | 386k residential Consistent track record of industry-leading EBITDA growth, driven by organic capital
KPIs video RGUs | 187k residential voice RGUs deployment, accretive M&A, and focus on high-margin data products
 95% data penetration among households connected

Ares Asset Map Ares Historical Financial Performance1

’17A – ’19A CAGR
Wave Broadband
2.6% A
 Seattle* (Wave North) Ares (7.4%)
 Sacramento* (Wave South) (5.5%)

Revenue
 San Francisco (Wave South) (5.2%)
 Portland* (Wave South) 11.2%
Grande
2020B
 Austin (Texas)
 Waco* (Texas)
 Midland* (Texas) Contribution as % of Wholeco Gross Margin
B

Data
 Corpus Christi (Texas)
 Dallas* (Texas) 67% 71% 74% 78%
 San Antonio (Texas)
 Temple (Texas)
Adjusted EBITDA

 Houston (enTouch)
$574.8 $624.1 $654.5
RCN *Incumbent Market $529.5 7.3% A
C

C
Lehigh Valley*  Diversified presence across 8 of the top 10 DMAs
 Chicago (partial incumbent)  Key markets include incumbent positions in Wave North 36.6% 38.8% 41.0% 42.8%
 Boston and Lehigh Valley (~40% of 2019A EBITDA), and partial
 New York incumbent positions in Chicago, Texas and, Wave South 2017A 2018A 2019A 2020B
A BAdj. EBITDA data with Adj. C
EBITDA Margin (%) margin
 D.C. (~40% of 2019A EBITDA) Topline and EBITDA growth High-growth Continued EBITDA
 Philadelphia driven by data, partially increasing levels of expansion driven by mix-shift
offset by legacy drag contribution margin towards high-margin data products

1. To maintain comparability across extended time period, figures calculated on mgmt-adj. EBITDA and 2. Figures exclude 2020 acquisition of Digital West (~$2.4mm EBITDA)
exclude buyside QoE adjustments and acquisition of Digital West (~$2.4mm EBITDA) 37页
Ares Plays in Attractive Markets
There is a total of 210 DMAs in the U.S. and Ares’ footprint across the U.S. spans 8 of the top 10 DMAs by size and 7 of the top 10
DMAs by GDP per capita

Ares • Fast growing markets

• Diversified local economies
• Strong representation from
Fortune 500 companies
• Robust new business
formation
• High home density
• Above average household
income
• Young demographic with
elevated bandwidth
demands

Ares Ares Ares Ares

Note: Ares macro statistic averages weighted by market on the basis of homes pass; 1) Ares median age is weighted average of median age within markets; 2) 2015-2018A; gross of inflation
Source: SNL Kagan, Bureau of Labor Statistics, U.S. Census 38页
Ares’ Network is Technically Advanced and Fiber Rich

Younger network built with more fiber…

Ares

39页
Strong Product Positioning with High NPS
Positive brand recognition and strong customer service
Among top Net Promoter Score (“NPS”) in 2020

40页
Ares’ Historical EBITDA Growth
Ares has a long track record of achieving high single digit EBITDA growth

Pro-forma EnTouch &

Digital West
Figures in $m
$678

41页
Ares Segment Overview with Data Contributing ~55% Revenue / ~74% Gross Margin 2019A
Ares passes 3.1mm households at 30.7% penetration, generating 2019A revenue of $1,522mm and Adj. EBITDA of $624mm
Residential Segment (84% of 2019A Revenue) Business Solutions Segment (10% of 2019A Revenue)
Product  Data, Video, Voice Product  Wavelength, dark fiber, dedicated internet access, wireless
Offerings Offerings backhaul, DC:DC connectivity

6,000 32% 32% 31% 31% 30% 30% 30% 30% 30% 30% 30%
$375

$293
$264
5,000

4,086
3,950

$238
$300

3,816
3,684

$213
3,554
3,427

$192
3,303
3,181

$180
4,000
3,069

$170
2,958

$225

$160
$157
2,849

$144
$137
Penetration

3,000 $150

$252
$228
$205
$181
1,239

$162
1,198

$150
1,156
2,000

1,113

$140
1,071
1,031

$128
$122
$75

$108
993

$97
975
941
936
908

1,000 $0
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
0 Data Advertising and Other Voice Video
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Homes Connected Homes Passed Penetration SMB Segment (6% of 2019A Revenue)
$2,000 Product  Business Internet, Hosted Voice, Video

$1,536
Offerings
$1,485
$1,430

$1,750
$1,382
$1,337

$150
$1,303
$1,289
$1,280

$1,280
$1,259

$121
$1,236

$116
$1,500

$111
$106
$205
$125

$101
$237

$96
$266

$1,250

$91
$91
$296

$85
$328

$100

$31
$362

$78
Revenue

$397

$30
$73
$436

$1,000

$29
$485

$28
$518
$543

$27
$75

$26
$25
$25
$750
$1,242

$26
$1,156
$1,069

$24
$24
$50
$986
$906

$500

$80
$833

$75
$777

$70
$721

$65
$662

$61
$591

$57
$53
$535

$52
$46
$25 $42
$38

$250

$0 $0
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Data Video Voice Advertising and Other Data Voice Video Advertising and Other

42页
Ares’ Existing Customer Base with Expanding 5Y+ Tenure
Existing base of loyal customers alongside industry-leading NPS scores position Ares to push through ARPU rate increases over hold
Analysis of RCN-Only Customer Tenure
Data RGUs by Tenure (‘000s) Data ARPU by Tenure

Ares has demonstrated an ability to further expand its Year 5+ RCN-only customer base, with this loyal base key to pushing through YoY price increases

Churn by Market

Source: Company financials, website.

43页
Ares’ Gross Margin Benefitting from Natural Mix-Shift towards Data Products (95%+ GM)
Natural mix-shift to data products with 95%+ gross margin drive overall margin uplift over the projection period

Gross Margin by Segment

100.0% 95.7% 95.7% 96.0% 96.3% 96.3% 96.1% 96.0% 96.0% 95.9% 95.8% 95.8%
95.0%
90.0%
85.0%
Data

80.0%
75.0%
70.0%
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
100.0%
95.0%
90.0% 85.5% 85.2% 86.4% 86.9% 86.5% 86.0% 85.6% 85.2% 84.9% 84.7% 84.4%
85.0%
Voice

80.0%
75.0%
70.0%
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

40.0%
35.0%
30.0% 26.0% 25.5% 26.7% 25.6%
24.0% 24.4% 23.2% 21.8%
Video

25.0% 20.4% 19.1%

20.0% 17.8%
15.0%
10.0%
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

Gross Margin Contribution Over Time

$2,000 Data: 92%
$1,539 $1,638
$1,750 Data: 74.5% $1,441
$1,500 $1,266 $1,350
$1,114 $1,157 $1,201
$1,250 $996 $1,070
$958
$1,000
$750 $1,397 $1,507
$1,083 $1,182 $1,289
$500 $867 $934 $999
$642 $708 $797
$250
$0
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Data Gross Margin Video Gross Margin Voice Gross Margin Other Gross Margin

44页
EBITDA Margin Expansion Comparison
Like peers, Ares has seen recent margin expansion due to mix-shift. Excluding the drag of video, Ares’s EBITDA margin would be at 49.0% today
Peer EBITDA Margins Over Time

2020E Adjusted EBITDA Industry Margins Excluding Video

70.0%
65.0%
60.0% 58.0%
54.4% Analysis strips out Video segment revenue and gross margin contribution with
55.0% no adjustment to total company SG&A expense – excluding video revenue and
47.5% 48.7% 49.0% associated programming costs, Ares 2020E Adj. EBITDA would come in at
50.0% 45.8%
44.6% 43.3% 49.0%, or an increase of 621bps
45.0% 42.8%
40.2%
40.0%
35.0%
30.0%
Charter Comcast Altice Cable One Ares
Including Video Excluding Video

45页
Ares’ Residential Capex Profile (Highly Accretive)
Improvement in build efficiency over time reflects fall-away of legacy products, as Ares’s unit economics increasingly driven by data earnings

Residential Build Multiple (historically at 6-8x) Residential Build Multiple – Adjusted for YoY Decline in Legacy Gross Margin

17.5x 16.5x
17.5x
15.0x 16.5x 15.0x
12.5x
12.5x 12.5x
10.0x
10.0x 8.7x 10.0x
10.8x 8.1x 7.6x
10.2x 7.3x
7.5x 8.7x 7.5x
7.6x 7.1x 7.4x
5.0x 6.5x 6.3x 6.1x 6.2x 5.0x
5.7x 5.9x
4.9x 5.4x 4.9x 5.0x 4.9x 5.1x 5.2x
2.5x 2.5x

0.0x 0.0x
2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

Residential Build Multiple Cumulative Build Multiple Build Multiple Adjusted for YoY Legacy Gross Margin Decline

Consolidated Build Cost Per HH Passed YoY Decline in Legacy Gross Margin

$50 7.5%
$750 $713 6.0% 6.5%
$677
$643 $40
$611 5.5%
$580 4.5%
$551 4.3%
$515 $523
$479 3.9% 4.5%
$500 $444 $448 $30
3.2% 3.3%
3.5%
$27 2.4% 2.3%
$20 $23 $23 2.5%
$22 1.7% 1.5%
$20
$250 $17 1.5%
$16 $16
$10 $13 $13
0.5%

$0 $0 (0.5%)
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

YoY Decline in Legacy Gross Margin As % of EBITDA

46页
Ares’ Business Solutions Capex Profile
P60 case assumes near-term increases in paybacks as large projects are pushed through and salesforce ramps, with out-years close to historical
Business Solutions Build Multiple

20.0x 2020E spike represents large, one-time

54.2x commercial builds in NY and Texas
(cellular backhaul) with longer-term
strategic optionality
15.0x

10.2x 10.4x 10.1x

9.0x
10.0x 8.0x
10.6x 7.6x 7.3x
10.2x 9.6x
8.4x 7.8x 7.3x
5.0x 5.9x 6.3x 6.3x

0.0x
2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Business Solutions Build Multiple Cumulative Build Multiple
Implied Payback Period – Months on Revenue Basis

45.0 Stonepeak conservatively assume potential

39.4 COVID delays impact despite Ares don’t
40.0 expect the same degree of slowdown
35.0 33.2

30.0 27.1
24.5 25.3 24.6
25.0 23.4
21.9 21.3 20.8
20.0

15.0

10.0

5.0

0.0
2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

47页
Ares’ Leverage is Expected to De-lever in line with Industry
$883
$818
Existing debt is covenant
$800light with a springing covenant on the undrawn $410mm revolver of 1st Lien leverage not to exceed 7.0x (to the extent more than 35% of the
$758
revolver is drawn and with up to 5 equity cures) , with weighted average cost at 4.8%. During 3 years of ownership, TPG operated the asset at or above 6x, and has
taken out $800mm of dividends via recap $707
$670
Uses of Operating Free Cash Flow (P60 Case excluding M&A)
$600 $1,200
Management has indicated that “Keep-
the-lights-on” capex is significantly $1,032
lower than assumed steady-state capex, $953
$1,000

Capex
Discretionary Steady
likely in the $150-$175mm range $144
$878
$812 $184
$400 $752
$800 $174 $88
$698 $130
$661 $103 $99
$54 $81

-State Capex
$13 $75
$600 $62 $50 $59 $77 $99
$77 $78 $80 $85 $90
$298
$200
$400 $289
$229 $232 $237 $250 $269

Service
Debt
$200 $333
$0 $229 $228 $216 $210 $205 $236
2021E 2022E 2023E 2024E 2025E 2026E 2027E
$0
2021E 2022E 2023E 2024E 2025E 2026E 2027E
Mandatory Debt Paydown Interest Expense Steady-State Capex Edge Out Capex
Business Solutions Capex CPE Growth Capex Network Growth Capex Voluntary Debt Paydown
Total Debt (P60 Case excluding M&A)

$6,500 P60 assumes 8.0x

6.5x recap in 2026E
$6,000 6.1x
5.5x
4.8x 5.0x 6.0x
$5,500 4.2x 4.4x
$5,133
$5,000 $4,961 4.0x
$4,570 $4,490
$4,500 $4,359
$4,201
$3,999 2.0x
$4,000

$3,500 0.0x
2021E 2022E 2023E 2024E 2025E 2026E 2027E
Total Debt LTM Total Net Lev.

48页
Peer Comparison
Ares compares favorably to peers in terms of EBITDA growth, gross margin and high-speed data as % of revenue

Ares Ares

Ares Ares

49页
Outstanding Management Team Rich in Experience and Depth
Ares Management have 300+ years of combined industry experience

50页
Management Assessment
Key area of focus in Stonepeak’s DD was management retention and continued drive for a next leg. Per Stonepeak’s, top three (see below) are
enthusiastic about the opportunity, prepared to roll meaningful capital into the deal, and are keenly focused on re-upping the management
agreement and negotiating an incentive package. There will be some changeover due to the transaction. Per Stonepeak, Jim Holanda has
identified all potential moves, presented succession plans for each and was transparent with key considerations.

Name Title DD/SIP Met Interactions / Summary Observations Assessment

 Known commodity to Stonepeak with significant industry experience and personal relationship with Andrew
Barron (Virgin Media)
 Initial concerns were focused on tenure / continued enthusiasm – throughout DD, Steve has been actively
Steve Simmons Chairman ☑ monitoring Stonepeak’s progress (attending functional Zoom sessions on mute) and was a vocal figure in
Stonepeak’s in-person session with management
 Asked to be considered for go-forward Chairman role and is expected to be one of the top three rollover
investors. Playing a central role in continued management / incentive plan discussions

 Successful steward of business for over 18 years (currently 55 years old). When pressed on next chapter
(multiple times), Jim has expressed genuine enthusiasm about the opportunity – stating an expected “exit
horizon of 6-7 years” in-line with Stonepeak’s underwriting cases (note: Patriot media agreement runs for ~8
Jim Holanda CEO ☑ years). Active steward of business – has impressed with relatively granular knowledge of KPIs, market
competitors, key non-executive functional areas, etc. Board leadership on Cable Association leads to M&A
 Wasn’t shy in sharing views on the rest of the team, including retirements of certain executives (noted below),
succession playing and focus on increasing diversity in management team and Board (recently added Doreen
Toben ex-Verizon EVP to Board)

 From Stonepeak’s perspective, seemingly the engine room of Ares. Attended all Stonepeak DD sessions,
leading DD tracker, follow-up and responses, also running point in tandem with TPG/GC on merger agreement
John Feehan CFO ☑  Good rapport to date, appear to be building a direct dialogue (all DD/legal docs done outside of the banks)
 Outside of the process, key areas of focus are FP&A, accounting, tax, treasury and M&A/BD

 Presented well / “safe pair of hands” – responsible for market general managers, customer care and sales and
Chris Fenger COO ☑ marketing (worth noting that direct report Jackie Heitman – SVP of S&M showed well in DD session)
 Plans to be with business through 2022 then retire. Jim has identified two potential GMs that can fill the role

Rob Roeder CDO ☑  Key functional areas include product development, IT/billing, data traffic management. Interactions with
Stonepeak haven’t been as in-depth as others – committed to next investor ownership period

Pat Murphy CTO ☑  Strong contributor (mostly driving network builds and associated technology) – will likely retire at culmination
of transaction. Internal candidates have been identified and will run an external search to validate talent

Jeffrey Kramp & GC/

John Gdovin CAO ☑  Work closely together managing HR/benefits/admin, regulatory, programming contract negotiations, and all
other legal functions. Well prepared for DD sessions and showed well

51页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

52页
Investment Highlight Page #

 Non-cyclical, steadily growing industry: Cable providers employ a recurring revenue, subscription business model that has continued to 31
grow through recessions (U.S. cable industry revenue grew 9% during 1990-1991 recession, grew 11% during 2000-2001 recession and
grew 6% during 2007-2008 recession)
 Robust competitive position across diversified, attractive markets: Ares operates in 8 out of the top 10 Designated Market Areas
(DMAs) by GDP per capita. Across its footprint, Ares ranks above U.S. national averages in key metrics, including population density (694 38
per sq. miles for Ares vs. 94 per sq. miles average), median household income ($80k vs. $66k) and nominal GDP growth (5.2% vs. 4.2%) ,
which translate into higher propensity of spend on data consumption
 Scale platform with significant owned infrastructure: Ares’ footprint spans 3.1 million homes and businesses, with 19,000 network
nodes, 32,000 total plant miles – of which 22,000 or approximately 70% are fiber – and a fully upgraded network capable of delivering 39
gigabit data speeds across its entire footprint. As a result, Ares is almost never at a speed disadvantage versus competitors in its high-
speed data offerings. General cable companies’ network is 25% of fiber and 75% of coax
 Ability to capitalize on continued demand for higher bandwidth: Ares has consistently seen greater speed take-up across subscriber 55
base, with 44% of its residential users moving to speeds of 100-300 Megabytes in 2019, up from just 9% five years ago. Ares’ ability to
deliver speeds of up to 1 Gigabyte across its network, along with its strong Net Promoter Scores (“NPS”), enables runway of future 40
growth
Investment  Consistent track record of growth with long runway of “edge-out” targets: Management able to consistently grow the business through
Highlights targeted network expansions or “edge-outs”, passing 110k homes p.a. over last two years, with an identified opportunity set of 1.5 58
million homes, with “edge-out” returns at ~38% IRR and 2.5-year payback period; leveraging existing fiber infrastructure to quickly and
46
inexpensively build past homes currently served by poor-performing incumbent operators provides opportunity to invest capital into
expansion at attractive economics (typically mid-single digit build multiples)
 Opportunity to leverage network assets to drive commercial segment growth: Opportunity to accelerate growth in the business 61
solutions segment through leveraging Ares’ extensive fiber network; “fair share gaps” of 500 bps+ in several key markets per consultant
47
report and management has identified 878k near-net commercial targets, 481 near-net data centers, and a number of tower backhaul
opportunities (with an expected unlevered IRR at ~20%)
 Strong management team: Ares’ management team is one of most capable and accomplished group of operators in cable industry in
Stonepeak’s view, having invested in and operated several cable companies over past two decades; each of those investments have
50
grown EBITDA at high-single digit or double-digit EBITDA CAGRs, with CEO Jim Holanda and team driving growth through organic
initiatives and M&A. This is the management’s 6th partnership with private equity, delivering 2.6-5.2x MOIC with PE firms they worked
with in the past
 Strong M&A track record: Management has demonstrated ability to execute on M&A opportunities, mostly recently closed acquisitions
of EnTouch (6.3x) and Digital West (~7.1x) in 2020; Stonepeak believes there remains a significant runway of inorganic growth 63
opportunities for Ares

53页
Key Return Drivers
Metric Commentary Page #

 The P60 Case assumes ARPU grows at 3.7%, versus L2Y CAGR of 7.8%. The broader cable industry (inclusive of Ares)
Broadband has grown ARPU over that same period at 6.9%, with 3-year and 5-year CAGRs of 6.2% and 6.0%, respectively
1
ARPU Growth  Broadband ARPU increases are a function of product mix-shift (e.g., speed up-tiering, incremental add-ons) from the
Profile customer base, and an ability to maintain high customer satisfaction / NPS—Ares has consistently demonstrated an ability to 55
do both
 Ares has incumbent positions in Lehigh Valley and Wave North (~45-55% penetration), with Texas, Wave South, and Chicago
markets all having partial incumbent positions (~30%). Despite competition, Ares has sustained attractive penetration levels in
its key markets through market-leading speed offerings and customer service
 Management has identified 1.5mm homes to pass through their edge-out program over the next 5 years with the majority of
new subscribers coming from incumbent / partial incumbent markets. Even excluding the impact of new household
2 Edge Out formation, Stonepeak’s P60 Case over 7 years does not exhaust the TAM—leaving headroom for the future
Opportunity Set
 Residential edge-outs historically are highly attractive with 2.5 years average payback period and ~38% IRR by year four
and 63% contribution margin 56-60
 Ares has edged out at ~110 HHP p.a. over L2Y—P60 Case assumes ~129k HHP p.a., with pace ramping up over the hold
 P60 Case assumes edge-out penetration in line with historical, and also presumes zero incremental edge-out opportunities
from M&A, which has not been typical for Ares
 Despite a sizable fiber network (22k route miles) with significant on-net connectivity (13k connections), Ares lags nearly every
Acceleration in major enterprise fiber peer on a revenue per mile basis ($7.2 vs. peer median of $17) and sales rep productivity ($1.4k MRR /
3 Business month / rep, versus peer median of $4.2k). Based on market analysis, Ares is only capturing 3% of its 10% fair share of TAM.
Solutions  Stonepeak, Chris Morley, and Stonepeak’s consultants strongly believe this is not due to underlying network characteristics or
Segment (BSS) the products offered, but historical lack of focus within a primarily residential-oriented company. With the appropriate go-to- 61-62
market strategy and re-orientation of the target customers, P60 Case projects BSS to grow at 9.0% vs. 7.4% historically

Incremental  Since 2003, the Ares management team has executed on multiple transactions, earning MOICs of 2.6x-5.2x.
4 M&A  Through RCN and ultimately, Ares, they have acquired ~$35mm of EBITDA p.a., including two tuck-ins this year. P60 Case
63-65
Opportunity Set assumes ~$21mm of EBITDA acquired p.a
 COVID-19 has reinforced the essential nature of broadband infrastructure assets, with CableCos increasingly focused on their
high-margin data product. As cashflow dynamics improve with mix-shift, Stonepeak expects further accretion to multiples,
which have increased by 5.5x and 1.1x for the two best-in-class peers, Cable One and Charter, respectively
5 Exit Multiple 66
 P60 Case assumes exit at 10.5x NTM EBITDA, vs. an entry price of 11.4x NTM EBITDA at anticipated transaction close
 For context: presuming the legacy portion of Ares’s EBITDA command a multiple of 4.5x today and 1.5x at exit, Stonepeak is
still implying broadband multiple degradation of 1.7x, from 12.9x to 11.2x at P60 Case purchase and exit assumptions

54页
1 Ares’ Broadband and ARPU Deep Dive
P60 Case assumes ~2.6% annual rate increase on data ARPU through 2025E relative to a ~3.0% annual rate increase over the historical
period with the remaining ~1.1% of annual rate increase driven by consumer mix shift, inside of the 2.5% historical average
RCN-Only Historical ARPU Increases
Change in ARPU Customer Speed Mix Shift
RCN-Only Ares
100% 3%
9% 7% 8% 11% 14%
24% 13%
80% 31% 15%
32% 15%
38%
60% 32% 42%
44%
37% 47%
40%
37%
59%
43% 28%
20% 24%
30% 22%
15% 10%
0% 5%
2014A 2015A 2016A 2017A 2018A 2019A 2Q20A
MB<26 MB26-100 MB100-300 MB300-500 MB500-1GB
2017 rate decrease driven by significant soft upgrade of MB26-100 category of customers as the company provided free speed upgrades to lower speed
customers with subsequent push through of faster rate increases across the speed category

2020E – 2025E Data ARPU Bridge

Historically, ~60% of Ares’ ARPU increase came from “further price increase”
and ~40% came from upward speed mix shifts from 2016-2020

P60 Case consumer-driven price increases consist of 1) continued mix shift towards higher speed and higher priced data packages 2) gradual reduction in
data ARPU discounts associated with bundling packages as customers increasingly purchase data-only packages 3) increased uptake in Wifi Add-Ons
including Eero mesh WiFi product
55页
2 Ares’ Edge-Out Opportunity Set
Management plan identified ~1.5mm homes in its 5-year plan and indicated that there is a deep pipeline of further potential expansion
opportunities – additionally, management has typically expanding edge out territory through bolt-on M&A (EnTouch, Digital West)
Total Addressable Market Overview
900.0
 Focus on incumbents / partial incumbents markets
 Focus on near-network neighborhoods exclusively
800.0  ~1.5mm homes to pass with low variable cost
 Target returns of 20%+
103.9
 Target penetration ranges from 24-45%
700.0
12.4
52.2
4.6 20.2
600.0 147.6 52.5
27.2 9.8
43.7
196.6
500.0 3.8 237.4 115.2 46.7
135.2
7.2
98.3
400.0 132.8 53.4

153.8
300.0 18.9
517.1 33.3
449.5 41.7
200.0 388.1 382.0 371.0
328.7
265.6
100.0 211.6

0.0
Lehigh Valley Wave North Chicago Texas Wave South Boston DC Metro New York
2019A HHs Passed 2020E-27E HHs Passed Remaining Identified Opportunity Set Implied Household Formation

56页
 2 Ares’ Edge-Out and Penetration by Market
P60 case assumes slight uptick in edge-outs p.a., with more conservative assumptions around cost to pass, and static penetration levels
Buildout & Penetration Summary Key Buildout Assumptions
Edge-outs & Cost to Build Avg. Cost Per HH Passed Ares Penetration F Altman % of Total
A Ares has edged out at ~110 HHP p.a. over L2Y—P60 Case assumes Market 17A - '19A 20E - '27E Pre-2017 Cohort 2019A Edge Out RR Fair Share HHs Passed
~129k HHP p.a., with pace ramping up over the hold and with builds
concentrated in incumbent / partial incumbent territories Lehigh Valley $702.8 $787.7 59.5% 53.4% 47.5% 60.0% 15.1%
B Management has indicated that their p80 case is 125k p.a., with p60 and Wave North 237.4 485.2 49.0% 45.1% 45.0% 46.0% 13.1%
p40 running at 150k p.a. and 175k-200k p.a. There is a pipeline of Chicago 428.7 544.1 32.1% 30.1% 27.5% 36.0% 23.4%
1.5mm+ identified HHs in the next five years, before any incremental Texas 590.3 867.1 35.5% Inc: 42.3% 40.7% 35.0% 14.5%
opportunities from M&A (e.g., new adjacencies), new market (Grande) Non-Inc: 28.4%
expansions, or organic household growth (1-2% across markets) Wave 341.3 486.9 31.5% Inc: 42.9% 26.9% 36.0% 11.3%
C P60 Case assumes average cost per HHP of $597 vs. historical cost of South Non-Inc: 19.0%
$474, for a comfortable margin of safety and to account for potential Entouch NA NA NA NA NA NA 3.6%
cost-creep
D Penetration Boston 491.5 480.3 21.4% 20.4% 22.5% 34.0% 9.7%

DC Metro 295.7 430.4 24.3% 23.3% 25.0% 35.0% 4.1%
E Ares has consistently achieved blended run-rate penetration of ~33%
 P60 Case assumes edge out penetrations in line with historical, with the New York 236.2 401.7 20.3% 20.1% 22.5% 34.0% 5.3%
C D E
majority of new subscribers coming from incumbent / partial incumbent Total $474.4 $597.2 32.9% 30.7% 32.8% NA
F markets such as Lehigh, Wave North, Chicago, Texas, and Wave South Note: edge-out plan in Texas is focused on incumbent territories within the Grande footprint, which have historically
 Commercial diligence shows that Ares has headroom to fair share in achieved 42%+ penetration. P60 Case assumes 41% penetration. Altman fair share figure is blended for incumbent and
nearly every market—P60 Case does not contemplate closing that gap non-incumbent locales.

Annual Homes Passed by Market

% of Existing
3.1% 3.8% 3.6% 3.6% 3.8% 3.7% 3.7% 3.6% 3.5% 3.4% 3.4%
Footprint
Management
175.0
P40: ~175k+
Management Projected
150.0 B
P60: ~150k A Historical A Average: 130.3 132.0 133.7 135.4
Average: ~129k 123.4 127.6
Management 121.7
125.0 ~110k 112.6
P80: ~125k 108.9 110.8 Incumbent

100.0
83.5
75.0
Partial
Incumbent
50.0

25.0
Overbuilder
Pre-TPG ownership
0.0
2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
New York DC Metro Boston Entouch Wave South Texas Chicago Wave North Lehigh Valley
Management indicated that their P80 is 125k per annum with a P60 of ~150k per annum and a P40 of 175k – 200k per annum. Stonepeak has assumed ~129k per annum
over the projection period, which is well inside levels that management has indicated are achievable
57页
2 Highly Accretive Residential Edge-out
Mature cohorts trend toward 30%+ IRR

Historical RCN Capital Deployment Strategy

Quarterly customer penetration by built quarter

Note: 1. Figure weighted by invested capital; capital investment timing phased by homes released 58页
2 Ares’ Go-Forward Penetration of New Builds
P60 case assumes LHV and Chicago achieve new build penetration rates well inside historical track record
Lehigh Valley – 15.1% of Total Homes Passed
80.0%

60.0%

40.0%

44.3%
42.7%
41.1%
39.8%
11.5%

38.5%
37.3%
36.0%
33.8%
20.0%

31.6%
29.3%
27.1%
7.7%

24.2%
21.2%
18.3%
15.3%
3.8%

0.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Assumed Penetration Curve 1Q16 2Q16 3Q16 4Q16
1Q17 2Q17 3Q17 4Q17 1Q18
2Q18 3Q18 4Q18 1Q19 2Q19

Chicago – 23.4% of Total Homes Passed

80.0%

60.0%

40.0%

20.0%

26.9%
7.7%

26.5%
26.2%
25.5%
24.7%
23.9%
23.1%
21.9%
5.1%

20.7%
19.5%
10.2%

12.2%

14.2%

16.2%

18.2%
2.6%

0.0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Assumed Penetration Curve Q1-16 Q2-16 Q3-16 Q4-16
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Q2-18 Q3-18 Q4-18 Q1-19 Q2-19

59页
2 Ares’ Penetration Over Investment Period
Overall penetration drops ~30bps vs. 2020E levels in the P60 case, with edge-out ramps implying slightly longer paybacks vs. historical
Penetration by Type
While Stonepeak does not have the detail to split out pre-2020 individual cohorts – increase in penetration in existing markets
likely captures 2017 – 2019 cohorts ramping to run-rate penetration levels (~300k households passed in 2017 – 2019)
Existing Markets1

35.0%
31.7% 32.1% 32.4% 32.4% 32.4% 32.3% 32.1%
32.5% 31.4%
30.0%
27.5%
25.0%
2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E
Consolidated Edge Outs

35.0%
30.0% 25.5% 26.7%
23.8%
25.0% 21.4%
18.1%
20.0% 13.8%
15.0% 8.3%
10.0%
5.0%
0.0%
2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

33.7% 34.2% 34.2%

2021E Edge Out Cohort

35.0% 31.5%
30.0% 26.9%
25.0% 19.4%
20.0%
15.0% 8.3%
10.0%
5.0%
0.0%
2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

Assuming new homes passed as % of overall homes remains constant on a yearly basis with edge outs occurring at comparable
35.0%
Consolidated Ares

penetration levels to historical cohorts, the company’s overall penetration should remain relatively flat over the projection period
32.5% 30.6% 30.1% 30.1% 30.1% 30.2% 30.3% 30.3% 30.3%
30.0%
27.5%
25.0%
2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E

60页
3 Ares’ Commercial Segment Overview
Ares’s Commercial segment is comprised of legacy Wave regions and select markets in the Grande and RCN footprints
Segment Summary 2020E Revenue by Customer and Product

 Provides enterprise-focused offerings including fiber, metro area

Ethernet transport, and local area networking service among
Business others, as well as traditional business services offerings
Solutions including data, video, and voice
 Dense fiber network enables Ethernet services up to 100 Gbps
across the footprint

SMB  Provides traditional offerings including data, video, voice

 MRR  Near-net buildings

 Route Miles  Addressable towers
KPIs  Fiber Miles  Addressable data centers
 On-net buildings  RGUs

 Connectivity: ethernet, wavelength, dark fiber

 Internet: DIA, business class internet, high speed internet Near-Net Commercial TAM Forecast by Segment ($mm)
 Voice: hosted voice, business trunks
Products  Cloud Networking: data center access, interconnection
 Custom Solutions: custom networks, managed services/SD ’18A – ’20E CAGR: 3.5% ’20E – ’25E CAGR: 6.5%
WAN, video solutions

Market Share: Key Markets Overview

Headroom to Fair Share | Headroom ($mm)
2%|$4 6%|$58 5%|$29 7%|$64 7%|$128 7%|$529

Historical Financial Performance ’17A – ’19A

CAGR
7.5%
Revenue

7.8%
7.4%

Source: Altman Solon 2020 market study.

1. Assumption based on revenue contribution by product. 61页
3 Ares’ Commercial Opportunity – Leverage on High Capacity Fiber Rich Network
Large, near-term addressable commercial opportunity leveraging Ares’s deep fiber network of 22k route miles

A Despite a sizable fiber network (22k route miles) with significant on-net Route Miles
connectivity (13k connections), Ares lags every major enterprise fiber peer on
reps per dollar of TAM coverage and sales rep productivity ($1.4k MRR /
A
month / rep, versus peer median of $4.2k)

B Based on market analysis, Ares is only capturing 3% of its 10% fair
share of TAM, implying $529mm+ of headroom to fair share
C Stonepeak, Chris Morley, and Stonepeak’s consultants strongly believe this

is not due to underlying network characteristics or the products offered, but
historical lack of focus within a primarily residential-oriented company. With On-Net Buildings
the appropriate go-to-market strategy, appropriate personnel decisions, and
re-orientation of the target customer set, Stonepeak believes the business A
solutions segment can grow at 9.0% topline rate, vs. 7.4% historically

Current Market Share(1)

Headroom ($mm) B
Reps / $1bn TAM
$4 $58 $19 $96 $74 $58 $29 $64 $128 $529

Enterprise Sales Productivity ($k per rep per month)

C Commercial Business: Go-Forward Strategy

Key Personnel Go-to-Market Strategy Areas of Investment
 Identify 3-5 candidates with an  Target core verticals with higher-value products—and map
 Invest behind sales representatives to bring total reps in line with TAM
appropriate mix of sales, opportunities to network assets and addressable market opportunity, and revamp quota system to incentivize meeting targets
business, leadership  Harmonize fiber design, engineering and local teams
 Accelerate residential homes passed opportunities through
credentials  Distinguish clear ownership of customer experience and
development and extension of fiber network
 Chris Morley to help identify, strategic allocation decisions. Should be a clear  Invest in 5G growth cycle tailwinds—macro tower backhaul, small cells,
mentor, and manage the new organizational demarcation of Commercial business from etc. given presence in 8 of country’s top 10 DMAs
executive and team dynamic Residential

62页
4 Ares’ M&A History

63页
4 Ares’ M&A Opportunities

Broadband Assets Operational Turnaround Assets

64页
4 Ares’ M&A Considerations
Ares has consistently executed on M&A. Together with management, Stonepeak has reviewed full cable, LEC and fiber opportunity set
(see below) during DD
Management Track Record Key M&A Targets (Ares Discussions)

Detailed Management Track Record Target Revenue EBITDA Selected Commentary

Realized Unrealized ~$1,040 ~$466 Hostile Altice situation (family rejected)

Metric $1,135 $377 Waiting for bid-ask spread to narrow

~$740 ~$310 Sole owner – close relations with Steve

Hold 2003 – 2007 – 2010 – 2013 – 2017 – 2017 – 2018 – ~$230 ~$100 Bid-ask spread due to regulated portion

Cable
Period 2007 2015 2017 2017 Present Present Present
-- ~$100 Reviewing situation

~$275 ~$60 Reviewing situation

$18mm $17mm $154mm $65mm $154mm $65mm $198mm
Entry (32.7%) (32.7%) (27.0%) (32.4%) (27.0%) (32.4%) (45.1%) -- -- Reviewed and in discussions
EBITDA |
Exit or -- ~$50 Expected to come to market imminently
2020A/E
~$1,530 ~$390 Reviewed twice prior to Macquarie
EBITDA $46mm $40mm $193mm $76mm $346mm $112mm $261mm
(45.5%) (45.9%) (NA) (NA) (47.4%) (43.3%) (51.2%) Frontier Florida ~$1,040 ~$340 Tampa market ILEC play

LEC/FTTH
~$175 ~$55 Select markets of interest
EBITDA
26% 11% NA NA 8% 8% 10% -- -- Family asset in LHV – sold over time?
CAGR
~$240 ~$100+ Will position ahead of sale
Spect- Spect-
Investor Abry Abry TPG TPG TPG ~$170 ~$72 Seller valuation expectations (for now)
rum rum

Ent
Total $6,575+ $2,420+
At proposed purchase price,
Stonepeak estimates TPG will
MOIC 2.6x 5.2x 4.2x 3.8x Given 6-7 year time horizon, Ares can pursue accretive tuck-ins or more
generate ~3.8x in the three-year
transformational deals (which require heavy capital investment) across cable,
period from 2017-2020
LEC/FTTH and enterprise

65页
5 Ares’ Exit Considerations
Continued mix-shift towards high-margin data products support higher cashflow conversion, and ongoing multiple re-rate
Commentary Public Comparables

A As cable players become increasingly broadband- A B

centric, EBITDA margins see commensurate
uplifts given the relative contribution gross margin (5)
from broadband (90%+) versus legacy products
(especially video, which tends to be sub-25% and
declining). Charter and Cable One, given their
growth, data mix, and geographic diversity are
B likely Ares’s best comps
 As margins rise, warranted EBITDA multiples
should also improve—since at any given level of
capital intensity, a higher-margin business
converts a higher percentage of its EBITDA into
C uFCF—a trend that is slowly unfolding among the
majority of cable operators
 On a SOTP basis, presuming the legacy portion of
Ares commands a multiple of 4.5x today, that
implies a value of 12.9x for the broadband COVID-19 has reinforced the essential nature of broadband infrastructure assets, with CableCos becoming increasingly
business (inside of recent M&A for pure-play focused on their high-margin data product. As cashflow dynamics improve with mix-shift, Stonepeak expects further
broadband at 18-20x) accretion to multiples.
D Even assuming that legacy valuation degrades to
1.5x at exit, Stonepeak is implying a broadband Key Cable Comparables: NTM EBITDA Multiple Over Time
multiple at exit of 11.2x, a meaningful degradation
vs. today’s value
SOTP – P60 Case Excl. Incremental M&A
9/30/21 NTM EBITDA
Segment EBITDA TEV xNTM
Da ta 584.1 7,543.9 12.9x
Lega cy 123.6 556.1 4.5x
Total $707.7 $8,100.0 11.4x
Legacy Implied Broadband Multiple
0.0x 13.9x
1.5x 13.6x
3.0x 13.2x
C 4.5x 12.9x
6.0x 12.6x
9/30/27 NTM EBITDA
Segment EBITDA TEV xNTM
Da ta 1,081.0 12,150.0 11.2x
Lega cy 88.9 133.3 1.5x
Total $1,169.8 $12,283.3 10.5x
Legacy Implied Broadband Multiple
0.0x 11.4x
D 1.5x 11.2x
3.0x 11.1x
4.5x 11.0x
6.0x 10.9x
Note: Market data as of 10/21/20.
1. PF for Fidelity 2. Trading multiples reflect Comcast WholeCo [Link] for Hawaii. 4. PF for Fairpoint 5. Represents 2021E EBITDA multiple
66页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

67页
Competitive Dynamics by Market
Ares faces ~2 competitors in most of its markets, key markets include Lehigh Valley, Chicago, Wave North & South and Texas (Grande)

Ares Market Snapshot

Brands
Regions Lehigh Valley Chicago Boston New York D.C. Philadelphia North South Texas Ares Total

Incumbent  Partial      Partial Partial Partial

% Incumbent 100% 50% – – – – 100% 70% 50% 45%
Avg. Competitors 2.0 2.0 2.0 2.1 2.0 2.0 1.3 2.1 2.1 2.0
1 comp. 2% 4% 1% – 1% 1% 68% 32% 5% 11%
2 comp. 94% 94% 99% 92% 99% 99% 29% 37% 81% 80%
3+ comp. 3% 1% – 8% 1% – 1% 30% 13% 9%

Top Competitors

Total HH Passed
2019A 266 388 382 371 212 99 329 450 517 3,069
2027E 419 626 480 424 253 99 461 565 665 4,086
% of 2019A Total HH Passed 9% 13% 12% 12% 7% 3% 11% 15% 17% 100%
% of 2027E Total HH Passed 10% 15% 12% 10% 6% 2% 11% 14% 16% 100%
Penetration
2019A 50% 29% 20% 20% 23% 18% 43% 27% 30% 31%
2027E 47% 26% 19% 19% 22% 18% 46% 29% 31% 30%
Projected Fair Share (1) 60% 36% 34% 34% 35% 36% 46% 36% 35%
Revenue
2019A $243 $143 $127 $127 $68 $31 $254 $242 $253 $1,522
2027E $343 $194 $124 $140 $70 $25 $381 $308 $316 $1,950
EBITDA
2019A $127 $73 $48 $44 $24 $11 $152 $114 $97 $624
2027E $247 $118 $63 $67 $32 $11 $260 $192 $186 $1,093

Note: Total HH passed, penetration, revenue, and EBITDA includes enTouch; total revenue and EBITDA exclude incremental M&A, and total EBITDA includes QoE adjustments.
1. Represents 2025E penetration as presented by Altman Solon October 19, 2020 report. 68页
Competitive Overview: Wave North Ares 100% Incumbent

Wave North is Ares’s largest market by EBITDA, contributing 22% of 2019A EBITDA. It is an incumbent market

Market Overview Pricing Overview

 Core incumbent market for Ares

 Compete against a variety of LEC and MSO peers, including
Market
CenturyLink, Comcast, and Frontier
Overview
 Focus on suburbs of Seattle and MDU units within the downtown
area; Ziply Fiber likely to be primary upcoming competitor

A Forecasted penetration curves assumed to be inside historical
results; despite advantaged network, some concern given
Takeaways potential Ziply builds

B Forecast assumes Ares continues to build out its consistently
speed-advantaged product in the Wave North region

Competitive Overlap

B Consolidated Market Penetration Forecast

B Competitor Speed Distribution

Edge Out Penetration: Historical vs. Base Case Forecast

A 2025E Fair
Share: 46%

Source: Company financials, website. 69页

Competitive Overview: Lehigh Valley Ares 100% Incumbent

Lehigh Valley is Ares’s second-largest market by EBITDA, contributing 18% of 2019A EBITDA. It is an incumbent market

Market Overview Pricing Overview

 Core incumbent market for Ares B

 Primarily compete against Service Electric, family-owned
Market business with inferior network and higher pricing
Overview  Expansion plans to edge out into Wilkes-Barre; primary
competitor there will be Comcast, underpinning the slightly
lower penetration expectations in the base case

A Forecasted penetration curves assumed to be inside achieved
historical results, with significant headroom to fair share (+12%)
Takeaways given majority of footprint only has 1 fast HSD competitor
B Promo pricing remains lowest across all speeds, with retail price

offerings competitive against Service Electric

Competitive Overlap

Consolidated Market Penetration Forecast

Competitor Speed Distribution

Edge Out Penetration: Historical Cohorts vs. Base Case Forecast

A 2025E Fair
Share: 60%
A

Source: Company financials, website.

70页
Competitive Overview: Wave South Ares 70% Incumbent

Wave South is Ares’s third-largest market by EBITDA, contributing 16% of 2019A EBITDA. It is a partially incumbent market

Market Overview Pricing Overview

 Wave South is comprised of Sacramento, Portland, and San

Francisco; the former two are incumbent markets, and the latter
is non-incumbent
Market
 Despite the press around fixed wireless, Ares has not seen
Overview
meaningful share take-up by Verizon in Sacramento
 Management believes they have a large opportunity to take
share from Comcast and AT&T across the region
 Forecasted penetration curves assumed to be inside achieved
A
historical results, with significant headroom to fair share
Takeaways B Management has focused on deploying its WaveG (bi-directional
gig speeds) to take share from players, with less than half of the
footprint overlapping with 1 or more fast HSD providers

Competitive Overlap: San Francisco

Consolidated Market Penetration Forecast

B Competitor Speed Distribution

Edge Out Penetration: Historical Cohorts vs. Base Case Forecast

A 2025E Fair
Share: 36%

Source: Company financials, website. 71页

Competitive Overview: Texas Ares 50% Incumbent

Texas is Ares’s fourth-largest market by EBITDA, contributing 14% of 2019A EBITDA. It is a partially incumbent market

Market Overview Pricing Overview

 With cable systems across several types of localities (Austin,

Dallas, Waco, Corpus, etc.), Texas has a mix of incumbencies
 Certain markets—such as Dallas and Waco—have penetration
Market
rates in-line with incumbents, at 49% and 40%, respectively
Overview
 Management also sees opportunities through its enTouch
acquisition in Houston, which provided them with a fully
upgraded FTTH network and deep fiber backbone

A Despite competing against Charter across Austin, Ares has
maintained 31% share and is building out bidirectional gigabit
products in high-density MDUs

B The edge outs targeted in the forecast period are largely focused
Takeaways
on incumbent or incumbent-like geographies, hence the
relatively higher penetration expectations versus the overall
blended footprint. For reference, average incumbent
penetration at YE2019 was 42%
Consolidated Market Penetration Forecast
A Competitive Overlap: Austin

Competitor Speed Distribution

B Edge Out Penetration: Historical Cohorts vs. Base Case Forecast

2025E Blended
Fair Share: 35%

Source: Company financials, website. 72页

Competitive Overview: Chicago Ares 50% Incumbent

Chicago is Ares’s fifth-largest market by EBITDA, contributing 10% of 2019A EBITDA. It is a partially incumbent market

Market Overview Edge Out Penetration: Historical Cohorts vs. Base Case Forecast
2025E Fair
 Chicago is a dense, competitive market in which Ares has
Share: 36%
traditionally taken share from AT&T and Comcast in the metro
Market
areas, but operated as an incumbent in less competitive sections A
Overview  Given AT&T’s mix of FTTN and legacy wire, Comcast is Ares’s
primary competitors in the MDU areas

A Forecasted penetration curves assumed to be inside achieved A
historical results, with significant headroom to fair share

B Given a third of Ares’s footprint is still only covered by one fast
Takeaways HSD provider, management is focused on quickly building to
capture a share of that market. Base case build projections
assume overbuilder-like penetration for a significant margin of
safety versus fair share

Competitive Overlap
B Consolidated Market Penetration Forecast

Competitor Speed Distribution

Source: Company financials, website. 73页

Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

74页
Key Risks and Mitigants Page #
 Medium - Ability to maintain share and continued accretive “edge outs”: Fundamental to the investment thesis is that Ares can defend share in existing
markets and pass new homes at run-rate penetration levels in-line with present trends – to the extent that Ares is unable to (a) retain status quo
penetration levels in key markets – particularly Wave and Lehigh Valley, given their ~56% contribution to EBITDA and/or (b) faces a material decline in
build efficiency and edge-out opportunities, projected returns could come under pressure
Mitigants: Analysis of last four years has not indicated that penetration levels have started to compress; the market consultant, Altman Solon’s fair share 58
analysis has indicated headroom above current penetration levels
 Medium to Low - Legacy products are declining: Despite the relatively small portion of Ares’ earnings that the voice and video products comprise, there is
continued drag from ongoing churn of legacy voice and video products and there are some variables that could potentially exacerbate those impacts,
namely (a) if Ares is no longer able to pass through increase in content and programming costs on the video side to customers in the form of price
increases and (b) if bundling dynamics result in a video revenue generating unit (“RGU”) churn event causing a data RGU churn at the same subscriber
Mitigants: Base Case assumptions assume acceleration in legacy product declines vs. historical, and given relatively limited exposure, a further acceleration 44
in these declines would have a limited impact on returns. Gross margin contribution from voice and video is assumed to decline from 22% in 2019A to 9%
in 2025 in the Base Case
 Medium to Low - Competitive threat from fixed wireless: In conjunction with 5G rollout, U.S. carriers have discussed the potential for fixed wireless
(which involves leveraging mid- to high-band spectrum and small cell deployments to provide customers with wireless internet connections) to act as a
substitute for wired internet connections
Mitigants: None of the major U.S. carriers other than Verizon and T-Mobile have committed to fixed wireless plans, and both have seen their progress
stalled by technical challenges (i.e., network underperformance and interference); fixed wireless is typically used in areas which it is uneconomical to build
94-95
Key Risks wireline infrastructure and is either uncompetitive with FTTH / DOCSIS 3.1 gigabit speeds or is challenged by line-of-sight / coverage radius issues, and
and hence not a credible challenge in the areas in which Ares operates. A cost comparison between wired and wireless connection is estimated at $1500/per
Mitigants
home higher for wireless, which even doesn’t include the cost of the small cell deployment based on Verizon’s fixed wireless rollout in Sacramento
 Medium to Low - Exit considerations: The projected size of Ares at the time of exit, which would be very large, may limit exit options
Mitigants: While the equity check required would be large, there are multiple private equity, infrastructure and pension funds with the requisite capital to
execute the contemplated transaction. There will also be the optionality to take Ares public (which is Stonepeak’s Base Case), and Stonepeak & co- 66
investors can sell down in public market gradually
 Low - High leverage: Ares would be levered at 6.8x on gross basis at inception of Stonepeak’s hold, which is relatively tight given Stonepeak’s planned
capital investment program (e.g., edge-outs and M&A)
Mitigants: Ares has shown an ability to consistently grow EBITDA, generate cashflow and de-lever and cable companies are typically more highly levered 48
than incumbent telcos (Altice at 5.3x and Charter at 4.5x). Stonepeak assume de-lever to 4.2x by 2025 and recap to 5.0x in 2026
 Low - Regulatory risks: As cable companies continue to grow their share of broadband subscribers to >60%, they could attract the attention of regulators.
The Cable Act of 1992 authorizes the U.S. Federal Communications Commission (FCC) to certify a state or local franchising authority to regulate the rates
for basic cable service charged by any cable system that it finds is not subject to effective competition.
Mitigants: Stonepeak and industry participants view price regulation as a highly unlikely outcome, given the focus to date on broadband regulation has
been around the issue of net neutrality. Any cable regulation would require the re-classification of the industry as a Title II service by the FCC which would
bring the industry under the agency’s purview. As a point of reference, mobile services have been classified as a Title II service for the last two decades
with no pricing regulation. As such, Stonepeak don’t view pricing regulation as a realistic outcome. With respect to the Cable Act of 1992 - Ares competes
against 2+ competitors across substantially the entire footprint and as such, even in the highly unlikely case of targeted price regulation, Stonepeak does
not view Ares as a likely target. 75页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

76页
Ping An Base Case 13.8% Net IRR / 2.3x Net MOIC
Ping An believes Stonepeak’s P60 Case (or Base Case) return is highly achievable
Assumes zero
households D E
passed with
C
entry=exit, and
B F
ARPU growth of G
3.7% vs. 7.8%
historical

SP Base Return, Exit Multiple SP Base Case Litigation Cost PA Tax Leakage PA Base Case
Starting Return: Existing Continued Edge Outs Commercial Business Incremental M&A
Compression Return
Footprint Acceleration Entry = Exit
D E F
A B C Though the business solutions segment (BSS) Long-term cable multiples have
The P60 Case assumes ARPU Management has Since 2003, the Ares
has demonstrated steady growth (7.4% since steadily traded up with The P60 Case assume
grows at 3.7%, versus L2Y CAGR identified 1.5mm homes to management team
2017), Stonepeak believes the business is CableOne and Charter trading at US$15m litigation cost. PA
of 7.8%. The broader cable pass through the edge-out has executed multiple
being vastly underutilized. Despite fiber 17.7x and 11.5x, respectively, reviewed LDD report and
industry (inclusive of Ares) has program over the next 5 transactions, earning
network assets and on-net connectivity largely driven by the improving conservatively increase
grown ARPU over that same years. Even excluding the MOICs of 2.6x-5.2x.
counts that compare well with benchmarks, cashflow conversion of litigation cost to US$141.5m
period at 6.9%, with 3-year and impact of new household Through RCN and
Ares ranks last in rep coverage per dollar of businesses increasingly to address 2 open copyright
5-year CAGRs of 6.2% and 6.0%, formation, the P60 Case ultimately, Ares,
TAM and sales rep productivity. Even comprised of high-margin data infringement litigation, 2
respectively. Broadband ARPU over 7 years does not management has
assuming sales rep productivity reverts to the products. P60 case assumes exit patent infringement matter
increases are a function of exhaust the TAM—leaving acquired ~$35mm of and 2 potentially putative
second-worst peer in its group, the BSS at 10.5x NTM EBITDA, a multiple
product mix-shift (e.g., speed up- headroom at exit. EBITDA per annum, class actions. Some of them
would improve its average gross MRR installs compression of 0.9x relative to
tiering, incremental add-ons) Additionally, strategic including two are still in early stage
over L2Y by nearly 3x (from $1.8mm per NTM entry multiple at
from the customer base, and an M&A often expands edge- strategic tuck-ins this without estimates while the
month to $5.2mm per month). P60 Case only transaction close. As cable
ability to maintain high customer out TAM (e.g., small Digital year. P60 Case others are based on the
assumes a fraction of that increase, to businesses shed legacy video
satisfaction / NPS—Ares has West acquisition added assumes ~$21mm of indicated claims and/or high
$2.9mm per month (overall revenue CAGR of and become increasingly data-
consistently demonstrated an incremental 100-200k EBITDA acquired per level estimates
9.0%). Through DD, SP have identified fair centric, we expect further uplift
ability to do both potential HHs) annum
share gaps of 500bps+ in several key markets. to multiples
G
*PA tax leakage is based on PwC’s analysis which is based on two major assumptions: 1) distribution of refinancing proceeds in 2026 would be non-taxable return of capital, which PwC believe
would be reasonable given that the co-investment platforms would likely have minimal US tax earnings & profits after expense deduction and amortization of stepped up tax basis in acquired
assets; and 2) disposal of co-investment in 2027-29 (presumably by way of an IPO) would not be subject to US tax, which would not be appear to be unreasonable if (i) at the time of IPO, Ares would
not be US real property interests as defined under IRC Section 897; and (ii) pre-IPO restructuring would be effected in a tax-free manner.

77页
Base Case Projections – Income Statement
'17A - '19A '20E - '27E
Income Statement 2017A 2018A 2019A 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E CAGR CAGR
Revenue by Segment
Total Residential Revenue $1,236.1 $1,259.1 $1,280.1 $1,280.0 $1,289.4 $1,303.2 $1,336.5 $1,381.9 $1,429.8 $1,484.7 $1,536.2 $1,585.9 $1,637.1 $1,700.0 1.8% 2.6%
Total SMB Revenue $72.8 $77.6 $84.6 $90.7 $91.5 $95.7 $100.7 $105.7 $110.8 $115.9 $121.2 $126.8 $132.6 $138.7 7.8% 4.2%
Business Solutions $136.6 $144.1 $157.5 $160.0 $170.2 $180.2 $192.3 $212.7 $238.0 $264.4 $292.8 $324.3 $359.2 $397.9 7.4% 9.0%
Total Revenue Excl. Incremental
M&A $1,445.5 $1,480.8 $1,522.2 $1,530.6 $1,551.0 $1,579.1 $1,629.4 $1,700.3 $1,778.5 $1,865.0 $1,950.2 $2,036.9 $2,128.9 $2,236.6 2.6% 3.5%
% Growth NA 2.4% 2.8% 0.6% 1.3% 1.8% 3.2% 4.4% 4.6% 4.9% 4.6% 4.4% 4.5% 5.1%
Incremental M&A – – – 12.2 12.6 13.2 79.6 149.3 222.5 299.3 380.0 399.0 418.9 439.9 NA 63.4%
Total Revenue Incl. Incremental
M&A $1,445.5 $1,480.8 $1,522.2 $1,542.8 $1,563.6 $1,592.3 $1,709.0 $1,849.6 $2,001.0 $2,164.3 $2,330.2 $2,435.9 $2,547.8 $2,676.5 2.6% 6.1%
% Growth NA 2.4% 2.8% 1.4% 1.3% 1.8% 7.3% 8.2% 8.2% 8.2% 7.7% 4.5% 4.6% 5.1%
Gross Margin
Voice $121.0 $115.5 $109.2 $101.0 $95.1 $89.6 $85.0 $81.6 $79.0 $77.8 $76.7 $76.0 $75.6 $76.0 (5.0%) (3.8%)
Video 145.5 128.2 128.2 121.2 106.0 92.5 79.8 68.0 57.4 48.0 39.1 32.5 26.1 20.5 (6.1%) (14.9%)
Data 641.8 708.3 797.0 867.5 933.6 999.2 1,083.4 1,182.2 1,288.5 1,397.2 1,506.7 1,619.0 1,737.7 1,865.5 11.4% 8.2%
Advertising and
Other 50.0 44.4 35.9 24.9 22.3 19.7 17.6 18.2 15.9 16.0 16.0 15.9 15.7 15.5 (15.3%) (6.1%)
Total Gross Margin Excl.
Incremental M&A $958.2 $996.5 $1,070.2 $1,114.5 $1,157.0 $1,201.0 $1,265.7 $1,350.1 $1,440.9 $1,539.0 $1,638.5 $1,743.4 $1,855.2 $1,977.4 5.7% 5.7%
% Margin 66.3% 67.3% 70.3% 72.8% 74.6% 76.1% 77.7% 79.4% 81.0% 82.5% 84.0% 85.6% 87.1% 88.4%
% Growth NA 4.0% 7.4% 4.1% 3.8% 3.8% 5.4% 6.7% 6.7% 6.8% 6.5% 6.4% 6.4% 6.6%
Gross Margin by
Product
Voice 85.5% 85.2% 86.4% 86.9% 86.5% 86.0% 85.6% 85.2% 84.9% 84.7% 84.4% 84.3% 84.2% 84.1%
Video 26.0% 24.0% 25.5% 26.7% 25.6% 24.4% 23.2% 21.8% 20.4% 19.1% 17.8% 17.5% 17.5% 17.4%
Data 95.7% 95.7% 96.0% 96.3% 96.3% 96.1% 96.0% 96.0% 95.9% 95.8% 95.8% 95.6% 95.5% 95.4%
Advertising and Other 67.1% 62.3% 56.1% 41.9% 38.4% 34.3% 30.6% 30.1% 26.3% 25.4% 24.3% 23.3% 22.2% 21.0%
Total EBITDA Excl. Incremental M&A $557.9 $607.3 $664.5 $713.9 $742.6 $782.7 $840.6 $911.5 $990.6 $1,077.3 $1,165.5 $1,258.9 $1,358.9 $1,467.3 9.1% 7.3%
% Margin 38.6% 41.0% 43.7% 46.6% 47.9% 49.6% 51.6% 53.6% 55.7% 57.8% 59.8% 61.8% 63.8% 65.6%
% Growth NA 8.9% 9.4% 7.4% 4.0% 5.4% 7.4% 8.4% 8.7% 8.8% 8.2% 8.0% 7.9% 8.0%
One-Time Expenses 16.2 24.2 32.2 33.8 12.9 13.9 14.1 14.7 15.0 15.3 15.6 15.9 16.3 16.6
Patriot Media & Other
Corporate Overhead (50.4) (59.5) (72.5) (74.3) (70.9) (74.1) (76.7) (79.4) (81.2) (82.8) (84.5) (86.2) (87.9) (89.7) 20.0% 1.9%
Total Adjusted EBITDA Excl.
Incremental M&A $523.7 $571.9 $624.2 $673.4 $684.5 $722.4 $778.0 $846.8 $924.4 $1,009.8 $1,096.6 $1,188.7 $1,287.2 $1,394.2 9.2% 7.2%
% Margin 36.2% 38.6% 41.0% 44.0% 44.1% 45.7% 47.7% 49.8% 52.0% 54.1% 56.2% 58.4% 60.5% 62.3%
% Growth NA 9.2% 9.1% 7.9% 1.7% 5.5% 7.7% 8.8% 9.2% 9.2% 8.6% 8.4% 8.3% 8.3%
QoE Adjustments Incl. Synergy
Adjustments 5.8 2.9 (0.1) (18.9) (6.4) (4.5) (4.0) (4.0) (4.0) (4.0) (4.0) (4.0) (4.0) (4.0)
Total Adjusted EBITDA Excl. Incremental
M&A, Incl. QoE Adjustments $529.5 $574.8 $624.1 $654.5 $678.1 $717.9 $774.0 $842.8 $920.4 $1,005.8 $1,092.6 $1,184.7 $1,283.2 $1,390.2 8.6% 7.6%
% Margin 36.6% 38.8% 41.0% 42.8% 43.7% 45.5% 47.5% 49.6% 51.8% 53.9% 56.0% 58.2% 60.3% 62.2%
% Growth NA 8.6% 8.6% 4.9% 3.6% 5.9% 7.8% 8.9% 9.2% 9.3% 8.6% 8.4% 8.3% 8.3%
Incremental M&A - EBITDA – – – 2.4 2.8 3.5 30.9 63.2 100.0 139.0 180.0 196.2 209.2 219.9 NA 85.3%
Total Adjusted EBITDA Incl.
Incremental M&A $529.5 $574.8 $624.1 $656.9 $680.9 $721.4 $804.9 $905.9 $1,020.4 $1,144.8 $1,272.6 $1,380.9 $1,492.4 $1,610.1 8.6% 9.9%
% Margin 36.6% 38.8% 41.0% 42.6% 43.5% 45.3% 47.1% 49.0% 51.0% 52.9% 54.6% 56.7% 58.6% 60.2%
% Growth NA 8.6% 8.6% 5.3% 3.7% 5.9% 11.6% 12.6% 12.6% 12.2% 11.2% 8.5% 8.1% 7.9%

78页
Base Case Projections – Cash Flow

79页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

80页
Return Summary with Key Assumptions

81页
PA Downside Case: 7.8% Net IRR / 1.6x Net MOIC

B
C
D

SP Base Case ARPU 7-year CAGR Avg. Homes Passed Avg. Acquired PA Tax Leakage PA Downside
Return from Base Case 3.7% '21E - '27E from Base EBITDA p.a. from Case Return
to 2.7% Case 129.2k p.a. to $20.8m to $8.3m
100k p.a.
A B C D
PA downside case assumes Data
PA downside case PA downside case assumes the target and
ARPU grows at 2.7% CAGR versus PA downside case
assumes average 100k blockers are US real property holding
L2Y CAGR of 7.8%, removing assumes $8.3m p.a. of
p.a. new homes passed vs EBITDA acquired over corporation (USRPHC) which is subject to a
“further price increase” from
~110k p.a. homes passed 2021-2026E @ 9.25x 21% tax liability on capital gains if (i) at the
ARPU due to increased
in the last 2 years. time of IPO Ares is considered as US real
competition. multiple.
property interests as defined under USIRC
Historically, ~60% of Ares’ ARPU Ares management has
Section 897; and (ii) pre-IPO restructuring
increase came from “further acquired ~$35mm of
would not be effected in a tax-free manner.
price increase” and ~40% came EBITDA p.a. over ,
The risk is mitigated by (i) existing seller
from upward speed mix shifts including two strategic
believes Ares is not USRPHC; and (ii) a tax-
from 2016-2020 according to tuck-ins this year
free pre-IPO restructuring is common to
SP’s commercial consultant,
minimize potential tax impacts
Altman Solon (“AS”).

82页
PA Upside Case: 19.0% Net IRR / 2.6x Net MOIC

C
B D
A

SP Base Case ARPU 7-year CAGR Exit Multiple from Exit from an IPO in PA Tax Leakage PA Upside Case
Return from Base Case 3.7% 10.5x to 11.1x Base Case to Trade Return
to 5.0% (= Entry Multiple) Sale
A B C D
PA upside case assumes Data Same as PA base case
PA upside case assumes
ARPU grows at 5.0% CAGR PA upside case assumes which Ares is not
exit via trade sale.
versus L2Y CAGR of 7.8%, ARPU exit multiple equal to considered as
While the equity check
elevated due to faster mix shift entry multiple at 11.1x USRPHC at exit and
required would be large,
towards higher priced hence no capital gain
there are multiple PE,
products. tax is applied
infrastructure and
The broader cable industry
pension funds with the
(inclusive of Ares) has grown
requisite capital to
ARPU in the last 2 years at
execute. Recent M&A for
6.9%, with 3-year and 5-year
pure-play broadband at
CAGRs of 6.2% and 6.0%,
18-20x
respectively.

83页
Contents

I Executive Summary 17

II Overview of U.S. Broadband Market 31

III Ares Overview 37

IV Investment Highlights 53

V Key Ares Market Profiles 68

VI Risks and Mitigants 75

VII Investment Return & Projections 77

VIII Scenarios & Sensitivity Analysis 81

IX Appendix 85

84页
Stonepeak’s Track Record in Communications Sector
• Track record as at the end of September 2020

85页
U.S. Cable Long-Term Industry Growth (1/2)
Cable operators have demonstrated sustained revenue and EBITDA growth over the last decade, even amidst the video to broadband transition

Long-Term Revenue & EBITDA Growth

Revenue Grow th 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A
Grande 5.9% 7.0% 8.5% 6.8%
RCN (0.9%) (2.5%) 1.8% 5.0% 6.4% 4.3% 5.4%
Wave 13.1% 11.6% 13.1% 9.5%
Ares NA (0.9%) (2.5%) 1.8% 7.3% 8.0% 7.5% 6.9% 3.8% 2.6% 3.1%
Charter 4.3% 4.5% 2.1% 4.2% 5.0% 4.5% 4.9% 7.1% 3.9% 4.9% 4.9%
Comcast 4.4% 6.1% 5.3% 6.4% 5.6% 5.6% 6.3% 6.6% 6.0% 3.9% 5.3%
Altice 2.6% 2.0%
Cable One (0.9%) 1.5% 2.3% 4.7% 8.9%
WOW 5.4% (3.7%) 1.6% (4.0%) (2.9%) (0.7%)
Peer Median 4.3% 5.3% 3.7% 5.3% 5.3% 5.4% 2.0% 4.1% 3.1% 3.9% 4.9%
Delta vs. Peer Median NA (6.2%) (6.1%) (3.5%) 1.9% 2.6% 5.6% 2.7% 0.7% (1.3%) (1.8%)

EBITDA Grow th 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A

Grande 16.1% 7.7% 10.0% 7.5%

RCN (0.6%) 2.6% 4.4% 4.2% 6.4% 4.9% 8.7%
Wave 16.8% 10.6% 10.3% 11.6%
Ares NA (0.6%) 2.6% 4.4% 10.5% 8.1% 7.8% 9.6% 8.5% 9.3% 9.7%
Charter 5.2% 6.0% 3.6% 0.5% 2.9% 3.1% 2.4% 11.9% 5.8% 5.0% 5.0%
Comcast 4.4% 6.4% 7.3% 7.1% 7.3% 5.2% 5.2% 5.6% 5.3% 6.0% 3.6%
Altice 3.9% 2.4%
Cable One 1.5% 12.5% 15.3% 7.2% 13.7%
WOW 7.7% 3.0% (1.1%) (8.1%) 6.2%
Peer Median 4.8% 6.2% 5.4% 3.8% 5.1% 4.2% 3.8% 8.8% 5.5% 5.0% 5.0%
Delta vs. Peer Median NA (6.9%) (2.8%) 0.6% 5.4% 4.0% 4.0% 0.8% 2.9% 4.3% 4.7%
Note: Ares consolidated 2017A – 2019A EBITDA figures represent management presented adjusted EBITDA

Source: Company financials, website.

86页
U.S. Cable Long-Term Industry Growth (2/2)
Industry EBITDA margins, particularly for broadband heavy operators Ares and Cable One, have improved significantly in recent years as video
roll off accelerates alongside increasing data ARPUs

Long-Term EBITDA Margin & Video as a % of Revenue

EBITDA Margin 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A
Grande 29.8% 32.7% 32.9% 33.3% 33.6%
RCN 27.0% 27.1% 28.5% 29.2% 29.0% 29.0% 29.2% 30.1%
Wave 42.3% 43.7% 43.3% 42.3% 43.1%
Ares NA NA NA 32.7% 33.7% 33.8% 33.9% 34.7% 36.3% 38.6% 41.1%
Charter 36.1% 36.6% 37.2% 35.7% 35.0% 35.0% 34.9% 36.1% 36.8% 36.8% 36.8%
Comcast 38.4% 39.4% 40.2% 41.0% 41.1% 41.0% 40.6% 39.6% 38.5% 38.7% 40.1%
Altice 30.9% 36.6% 42.8% 43.5% 43.7%
Cable One 35.5% 37.5% 40.1% 43.5% 46.2% 46.7% 48.7%
WOW 31.5% 35.3% 35.7% 36.8% 36.0% 37.7%
Peer Median 37.2% 38.0% 38.7% 38.4% 35.5% 36.3% 35.3% 36.6% 38.5% 38.7% 40.1%
Delta vs. Peer Median NA NA NA (5.6%) (1.8%) (2.5%) (1.4%) (1.9%) (2.2%) (0.1%) 1.1%

Video - % of Revenue 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A
Grande 40.5% 39.9% 39.7% 40.0%
RCN 53.1% 52.3% 50.1% 48.6% 47.8%
Wave 46.4% 42.7% 38.8%
Ares NA NA NA NA 47.2% 45.3% 43.7% 43.8% 37.6% 35.0% 31.9%
Charter 49.5% 48.8% 47.0% 40.9% 40.0% 39.8% 38.5%
Comcast 49.1% 47.1% 45.9% 43.9% 42.8% 40.1% 38.3%
Altice 47.5% 46.2% 45.9% 43.4% 41.0%
Cable One 46.7% 44.3% 41.2% 36.0% 34.6% 32.0% 28.7%
WOW 44.1% 45.0% 44.2% 41.8% 41.5% 37.7%
Peer Median NA NA NA NA 49.1% 45.7% 45.9% 43.9% 41.8% 40.1% 38.3%
Delta vs. Peer Median NA NA NA NA (1.9%) (0.4%) (2.2%) (0.1%) (4.3%) (5.1%) (6.5%)

Source: Company financials, website.

87页
Recent Acquisition – enTouch (TEV ~$100m)

88页
Recent Acquisition – Digital West (TEV $26m)

 Digital West is located in the central coast region of CA around San Louis Obispo, delivering a mix of connectivity, voice
and cloud services to business customers
 2020 projected EBITDA of $2.4M
 Serves approximately 2K customers with revenue of $12.2M
 Network consists of 70 owned fiber route miles and 210 leased fiber route miles, currently with 322 lit buildings
 Network would fill a hole between two areas Ares have built fiber – Santa Maria and Salinas
 Have identified and outlined 5 expansion projects that would pass over 5,300 businesses and 23,000 residential
passing’s
 Like the pending acquisition of enTouch, Digital West has been struggling due to capital constraints which has limited
their growth opportunity
 Digital West has identified and developed expansion plans into new areas. Includes going into residential
services in new expansion areas
 Purchase price originally designed to consist of both cash and the issuance of incentive equity to the existing CEO;
however, recently purchase price changed to all cash
 Envision retaining the current CEO as he would like to continue with the business and Ares see value in his
knowledge and relationships
 Ares have identified $1M - $1.5M of potential synergies
 2020 projected EBITDA with synergies ($1.25M mid-point) results in a range of multiples from 7.1x – 7.25x

89页
Potential for Upside Through Tax Receivable Agreement (“TRA”)
Series of sponsor-backed IPOs in recent years have monetized tax attributes at exit through a tax receivable agreement, typically receiving cash
flows equal to 85% of the value of utilized tax attributes providing a potential uplift of $200mm - $300mm on an NPV basis at a 15 – 20%
discount rate – TRA proceeds also provides a hedge on exit multiple in a public market exit

Net Present Value of TRA

TRA Valuation Annual Cash Flow Ending Year NPV of Tax Attributes Tax Rate NPV of Tax Shield
Amorti zati on of Secti on 743(b) Bas i s Step-Up on Sal e of Unbl ocked Interes t $400.7 2041E $855.7 26.2% $224.2
Secti on 743(b) Amorti zati on remai ni ng wi th SIP Bl ockers 24.8 2035E 44.1 26.2% 11.6
Secti on 743(b) Amorti zati on remai ni ng wi th Acqui red Bl ockers 46.0 2030E 49.1 26.2% 12.9
Acqui red Bl ockers NOL Carryforward 71.1 2041E 151.8 26.2% 39.8
Cumulative Discounted Tax Shield to Future Buyer While TRA valuation is inherently a subjective endeavor, Stonepeak believes there is real value to $288.4
(x) Val ue payabl e to TRA Reci pi ent by IPO Co be had at exit presuming the Company generates meaningful taxable income. Stonepeak has not 85.0%
Illustrative Value to Stonepeak baked in any value into its base case. $245.2

Precedent TRA Arrangements

Year Company Sponsor % of Tax Attributes

2020 90%

2020 85%

2018 85%

2018 85%

2017 Founder 85%

2017 Founder 85%

Source: Company financials, website. 90页

Fixed Wireless Landscape
Neither 4G LTE or 5G-based fixed wireless systems are likely to be a major threat to Ares’s subscriber, but they may pressure ARPU

Fixed Wireless Offering Landscape Overview

Technology Provider Target Market Current Scale Price Performance Threat to Cable / FTTH

4g
$29.95 - 25Mbps –
High Low
$59.95 50Mbps
4G
4g
$40 - $60 25Mbps –
Medium Low
50Mbps

5g
Limited $50 ~200Mbps Low-Medium

5g
300Mpbs-
5G Limited $50-70 Low-Medium
1Gbps

5g
50Mbps –
n/a n/a Low-Medium
200+ Mbps

Both 4G LTE and 5G fixed wireless competitors are unlikely to constitute a significant threat to cable and FTTH operators given slower speeds and lower reliability. In areas where
they compete with faster wireline operators, they are unlikely to gain significant share but may act as a check on growing internet ARPUs, especially for lower speed offers

91页
Fixed Wireless Operator Overview
Verizon and T-Mobile have been the most vocal about pursuing a 5G Fixed Wireless strategy, but through varying approaches

Operator Strategy and Hurdles

• Depending on 5G fixed wireless to • 2018: “For a residential broadband • Agreed to provide mid-band spectrum
drive revenue growth as its base is solution, the economics don’t make with lower (e.g., ~50-100 Mbps) speed
stagnant sense” AT&T CFO 5G FW offer in “rural” areas to
• Already needs to aggressively densify • 2019: “fixed 5G wireless will appease regulators and gain approval
‘unequivocally’ be a landline broadband for Sprint merger
Strategy and both mobile and fiber (for backhaul)
Drivers networks for 5G mobility; economies replacement product” AT&T CEO • October 2020, announced Home
of scope to simultaneously pursue fixed • 2020: “I don't believe in the near term Internet pilot expansion to 20 million
residential and small business services that 5G is the right fixed line homes in 450 cities and towns where
via FW and enterprise with fiber replacement strategy in what I would AT&T will no longer offer DSL
call a typical single-family home
infrastructure” AT&T CEO

• Seemingly focused on overcoming • Offered on a first come, first serve basis,

technological and operational challenges • In 2017, AT&T began testing 5G FW in depending on equipment and network
to compete with cable/FTTH Waco, TX but recently admitted that a capacity
broad 5G FW deployment is not
• Will prioritize areas with high return • Still some uncertainty around post-merger
economical until new chipset are
potential – areas that offer attractive strategy; Focusing T-Mobile 5G FW build in
released, likely in Q4 2020
density and demographics and lower costs underserved, rural areas, but may also be
Key Hurdles
of deployment, perhaps in areas where the • Issues with signal propagation broader
local telco has not yet upgraded to FTTH modeling software led to 4G CAF II
• Mid-band spectrum (e.g., 600MHz-2.5GHz)
coverage gaps, which may indicate
will not result in speeds competitive with
technological and operational
FTTH/DOCSIS 3.x networks but does partially
challenges associated with future
alleviate technical and operational
technology upgrades
challenges vs. mmWave

Verizon and T-Mobile have both been pursuing fixed wireless strategies; the former largely through its mmWave holdings (high-band) and the latter through
its mid-band spectrum. AT&T lags behind the other two in rollout pace

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Fixed Wireless Competitive Overlap with Ares
Limited overlap with Ares’s current footprint

5G Fixed Wireless Providers

Bands Lehigh
Company Owned1 Valley Chicago Boston New York Washington DC Philadelphia Seattle Sacramento Texas

LMDS, 37Ghz,
39Ghz, ☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑
LMDS
L1/L2/A/B 825-1450Mhz 2000 Mhz 1600-1700Mhz 1700-1900Mhz 2000Mhz 1350-1550Mhz 1550-1750Mhz 1400-1600Mhz 1800-2000Mhz

24Ghz, LMDS,
39Ghz, LMDS
☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑
L1/L2
500Mhz 400Mhz 600Mhz 600-700Mhz 500Mhz 600Mhz 500Mhz 600Mhz 500Mhz

Shared 37Ghz,
Licensed X X X X X X X X X
24Ghz2

5G FW Operations Today X No License ☑ License

The top three 5G Fixed Wireless providers have limited operational overlap with Ares today. Verizon and T-Mobile have licensed spectrum in each of Ares’s core
markets and could expand operations in the future, though likely at a meaningful actual speed disadvantage

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Challenges to Fixed Wireless Deployment at Scale
5G overbuilders face several hurdles to broad deployments – network management is challenging and the technology remains unproven

The Network Management Challenge

• The heaviest mobile users consumes ~12.5GB of data per month; the average residential user consumes ~250GB of data per month (or 20x more), with usage in
the post-COVID world rising to ~400GB of data per month
• In a scenario in which the residential user base continues consuming data at a similar pace (which is conservative, as homes continue to rapidly scale up
bandwidth usage), and a meaningful shift to fixed wireless occurs, wireless networks would quickly become overwhelmed
• Network management is a problem that continues to hamper effective rollout of fixed wireless; and given the economic proposition (e.g., mobile user ARPU is
roughly equivalent to fixed ARPU today, despite using 20x less data), wireless providers tend to prioritize their mobile users (T-Mobile explicitly tells its fixed
wireless customers that they will see speed throttles as a result of network traffic)
• Even putting aside the value proposition and the vastly superior product offered by fixed residential broadband, it is difficult to envision wireless networks
coping with the scale of residential data throughput

5G remains unproven at scale and faces hurdles to deployment 5G CBRS (mid-band) is less expensive but will struggle against cable
Not yet seen successful 5G FW deployments 5G CBRS is more attractive for rural areas than mmWave, but will lose head-
to-head against cable or FTTH
• Verizon launched 5G FW in 4 markets in late 2019
• Has wider coverage radius (potentially up to 5 mi. maximum with 100Mbps)
 In Sacramento, build stalled out at ~5-10% of expected coverage; costs to
build higher and penetration rates lower than expected  Could play a role in the rural digital opportunity fund (“RDOF”) auction if
bidders are able to put together business plans around a nascent
 While network performance was adequate, clear challenges in densifying
technology
with enough small cells and coverage radius
• Also attractive for lower income buyers already looking for low-cost
 Verizon and AT&T claim 5G FW specialized chipsets available in Q4 2020
solutions—not Ares’s target demographic
will improve unit economics
• However, speeds won’t approach cable or FTTH, and signal interference
• In Q3 2020, T-Mobile activated 81 locations with 2.5 GHz spectrum and
along with customer expectation issues will likely prove frustrating for
expects to activate up to 1,000 sites per month
consumers
5G marketing will be inconsistent with experience
Very unlikely to be overbuilt into areas with 2 strong competitors
• For mmWave, providers can market “up to 1Gbps”, but propagation distance
• Significant ‘first mover’ advantage – third players almost never enter market
can create challenges in delivering anything close to those speeds
with strong cable co. and an FTTH provider (which comprise a meaningful
• For citizen broadband radio service (“CBRS”), the wider expected coverage portion of Ares’s markets)
radius also will lead to more potential disruption of the signal
• 5G CBRS has advantage of a quicker theoretical time to market, but
• Disappointing speeds and service delivered has serious impacts to brand commercialization likely to lag per industry feedback—see previous pages on
perception (same dynamic for FTTN services like U-Verse) big-3 wireless operators and their respective challenges

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Verizon Case Study
Despite immense marketing hype, Verizon’s fixed wireless rollout in Sacramento yielded extremely low penetration at a high cost to build

Sacramento Rollout, Market Analysis, and Economic Takeaways

Overview of Verizon’s Fixed Wireless Rollout

 Verizon rolled out fixed wireless in Sacramento in 2019 and 2020 as part of its fixed wireless broadband (FWBB) program
 Verizon’s core argument was that given the need to densify their network with fiber ahead of 5G, it was cheaper for them to connect the “last mile” (e.g. from fiber backbone to
premise) with a wireless product rather than a true FTTH wired build
Research Methodology and Results
 Through public records, Verizon was shown to have deployed 391 small cells across Sacramento, of which 273 were used for 5G (remainder for 4G)
 Of the 45,000 addresses tested by a research firm in Sacramento, only 6% of homes were deemed to be “eligible” for FWBB. Put another way: Verizon deemed that only 6% of
households in Sacramento were technologically able to be ‘passed’ by their FWBB product
 While this was only 6 months into the program, it illustrates the engineering challenge of rolling out FWBB small cells whose service capabilities are heavily dependent on
geographic topography
 After six months, Verizon had signed up ~3% (their ‘penetration’) of eligible homes, or 0.1% of all homes in the market
 Over the tested period, churn percentages exceeded 6% on a monthly basis (albeit on a small sample size of sub-100 customers)
 Researchers also discovered that because mmWave technology is highly dependent on line-of-sight propagation, determining the appropriate coverage radius of any specific small cell
deployment is more probabilistic than not. I.e., a small cell deployment at 200 feet may cover one household without foliage in the way, but it may not cover another at the same
distance if the topography is even slightly different, creating deployment challenges
Economic Implications
 Wired connection: On average, the typical cost per home passed for a fiber deployment is ~$1,000 per home (for reference, Ares has historically averaged sub-$500), with a cost to
connect the home at $700 per home. Assuming 50% penetration of all homes passed, the all-in cost per connected home is $1,000 / 50% + $700, or $2,700
 Wireless connection: While the cost per home passed with fiber is the same, with a wireless receiver, the cost to connect can be as low as $200 per home
 However, given the eligibility challenges (e.g., some homes may not qualify given physical obstructions, distance, etc.), even if we generously assume 50% of homes are eligible
and that of those, 50% are penetrated as in the wired example, overall penetration of all homes will be just 25% in a given area
 Thus, the all-in cost per connected home is $1,000 / 50% / 50% + $200, or $4,200 per home
 And that is assuming that eligibility is at 50% and penetration at 50%--as we saw in the example above, eligibility came in at 6% and penetration at 3%, implying an
overall deployment cost magnitudes higher than a wired deployment
 This also ignores the cost of the small cell deployment itself, which adds incremental cost to deployment

Exhibits

Despite a roll-out in the densest parts of Sacramento, Verizon FWBB eligibility was only ~6%, with approximately 3% penetration within eligible homes, or 0.1% of
overall market

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Summary of Stonepeak’s Due Diligence
All confirmatory workstreams will be completed in the coming days. Findings to date have presented no material red flags.

Advisor Area Commentary Diligence Status

 Altman Solon’s findings have been consistent with Stonepeak’s diligence of the business, the view of
Stonepeak’s operating partners, and the management team’s representations: that Ares’ footprint covers
demographically attractive, dense markets with a network footprint that offers industry-leading speeds with
best-in-class customer satisfaction (critically important when analyzing long-term stability of growth)
Commercial /
 On the commercial front, Altman believes that Ares has a significant opportunity to capture incremental share
Business
with its deep network offering (often times 2x+ more coverage vs. traditional enterprise footprint) and ability to
offer a variety of fiber-led solutions. Similar to efforts at Zayo, there is a large opportunity in wholesale and
enterprise across highly sticky/strategic projects (e.g., FTTH, cable landing stations, etc.). Stonepeak’s view,
developed alongside Chris Morley, is that the challenge is mostly around execution (not market/asset quality)

 Financial / accounting diligence have resulted in no QoE or other financial-related red flags (Stonepeak has
adjusted its model for on-going cash adjustments to EBITDA and free cash flow)
QoE, Tax &
 Full tax forecast is included in Stonepeak’s P60 Case projections, including accounting for various tax leakages
Accounting
from blocker entities. Note: Stonepeak has given no credit in its P60 Case for the value of delivering a step-up to
HR & benefits the next buyer at exit (likely structured through a TRA agreement in an Up-C structure at IPO)
 HR and benefits team have found no meaningful issues to date – final read-out to come

 Legal review of docs (e.g., material contracts, and environmental, labor, and FCPA items, etc.) have not raised
material red flags. The STB team continues to review certain franchise and programming agreements
 STB identified two ongoing lawsuits. The estimates of damages (if the company settles) for the first is $1.3mm.
The second case has estimates of damages at trial to be up to $8mm. If the Company is found guilty unwilfully,
Legal
maximum damages would be up to ~$24mm. If the Company is found guilty willfully, damages could be $100mm
(seen as very low likelihood). Based on conversations with Management and counsel the P60 case assumes
$10mm of total litigation charges; the ROC case assumes $50mm
 Regulatory filings for the transaction are expected to be HSR & Franchise Cable Licenses (State / Municipalities)

Network,  Saras has found no red flags in their analysis. As per their feedback, Ares has been very focused on network
Engineering investments (e.g., DOCSIS 3.1) in an attempt to offer leading or equal service levels to other cable and fiber
and Technical players. Technical needs are met for every type of product and customer that Ares serves

 Marsh is in the process of finishing their work and as of ICM distribution identified no major issues
 They have recommended purchasing property insurance separate from Ares’ current arrangement with a TPG
portfolio company and increasing Ares’ casualty limits. Stonepeak’s P60 Case includes incremental, recurring
Insurance insurance costs of $1.25mm to cover any increase in program costs
 Ares is also managing a malware event that required a $2.1M ransom payment plus ~$800-900K in mitigation
costs, all of which was covered through cyber insurance with a deductible of $250k. This policy will renew in
early 2021 and the cost is expected to increase by ~$300k, which Stonepeak have also included in the forecast

Environmental  No red flags raised by RPS, and no DD issues approaching materiality threshold

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Stonepeak’s 100 Day Plan
Metric Descriptions

 Per earlier Management Assessment slide, Stonepeak believes it is imperative to shore up the plan for the key ~20-30 functional
leaders across HQ and each key market. Jim identified a period of 3-6 months to work through strategic vision & planning process
Management Team
 Key Output: In tandem with Management, Stonepeak to present organizational chart for next six years (including identifying
pipeline of internal/external talent and thoughtful succession planning)

 Ares has multiple avenues to grow its business – in-fill, ARPU increases, edge-outs, commercial and M&A, yet all must fit within an
Capital Allocation appropriately managed capital structure to avoid any issues out of the gates
Framework  Key Output: Develop framework for capital allocation across business segments in light of portable debt. Ring-fence key
parameters for FCF management in first 18 months and setting up flexibility for longer-term success

 Canvas M&A pipeline for accretive cable, LEC/FTTH and/or enterprise opportunities. Continue momentum with small
residential/commercial tuck-ins, while developing game plan for more strategic/transformative combinations
M&A Pipeline
 Key Output: Stonepeak / Management to discuss deal execution & philosophy. Stonepeak’s early impression is Management is
appropriately patient regarding M&A (i.e., doesn’t stretch when not good deal) – but that needs substantiation with early reps

 DD has substantiated a large growth opportunity in enterprise, with an organization that needs a substantial amount of work to
reach best-in-class execution.

Commercial Segment  Key Output: Chris Morley (with Stonepeak in support) to drive progress across several key fronts; (i) talent assessment across
existing workforce / consider changes, (ii) market segmentation, (iii) refine go-to market strategy (on-board new reps, consider
changes to quotas, etc.). Stonepeak’s P60 case contemplates a modest amount of disruption in 2021/22 before re-accelerating
topline growth thereafter

 Harmonization of multiple corporate brands (e.g., RCN/Wave/Grande) under Ares over next ~18-24 months
Corporate Branding
 Key Output: Review and agree execution timeline, potential commercial impact and mitigation plan for any potential issues

 Patriot Media has deep experience looking for ways to drive value under PE ownership. Stonepeak has discussed potential areas in
partnership, namely; (i) bulk purchasing across comms portfolio (e.g., network procurement spend), (ii) agency/NPS, etc.
 Reinforced by DD / conversation with TPG – KPI monitoring appears to be a relative strength of the company (particularly RCN).
Stonepeak Notable exceptions include historical cohort data in Wave & Grande and a potentially more robust strategic planning process re-
Onboarding commercial (see below for further detail). Stonepeak/Management to agree formal monthly reporting cadence with focus on key
themes that support thesis (e.g., edge-outs, ARPU, margin, ROIC, etc.)
 Continue to support ESG efforts / monitoring. Share learnings across equity and inclusion efforts at Stonepeak regarding new
Management hires and potential Board representation

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Glossary of Key Terms
 Represents a customer that subscribes to a single
Revenue Generating service/product  Typically refers to a third entrant into a market that
Units (“RGUs”)  For example, a customer that subscribes to data and Overbuilder overbuilds the ILEC and / or local cable MSO as a ‘third
voice is considered as two RGUs wire’ into the home or commercial premise

Average Revenue Per

 Represents the average revenue generated per RGU
User (“ARPU”)
Route Miles  Miles of fiber and / or cable infrastructure

Average Cost Per

 Represents the average cost per RGU
User (“ACPU”)
 Offering high capacity connectivity between cities or
inside a metro area (e.g., DC:DC connectivity)
Households or  Total number of homes passed by an operator’s
Wavelength  Links high-traffic locations with key data centers and
Homes Passed (“HHs network. Homes connected are a subset of the homes fiber-fed access points for seamless connections with
Passed”) passed single or multiple circuits (10G, 100G)
Households or
 Number of homes to which an operator is connected to  Secure, dedicated fiber-based connection between local
Homes Connected Dedicated Internet area network (“LAN”; a group of computers and related
and provides product to in a service area
(“HHs Connected”) Access (“DIA”) devices that share a common link to a server within a
distinct geographic area) and internet (10G to 100G)
Residential  Total Homes Connected as a percentage of Homes
Penetration Passed  Fiber-based bandwidth direct to cell sites, hub sites to
mobile switching centers (“MSCs”), which connects calls
 The percentage of subscribers within a subscriber base Wireless Backhaul between subscribers by switching the digital voice
that pay for that particular product. E.g., 95% subscriber packets between network paths, and MSCs to MSCs
Product Penetration connections
data penetration means that 95% of all subscribers are
paying for a data product
 Dedicated, low-latency fiber connections from data
Customer-premises  Equipment associated with connecting a subscriber to a DC:DC Connectivity
center to data center complexes
Equipment (“CPE”) network, located at the customers’ premises

 Market in which an operator was the first of its kind to  Expansion into near-network neighborhoods—are
build out a network (e.g., there is one incumbent local Edge-outs typically adjacent to existing plant and can be expanded
Incumbent Market exchange carrier (“ILEC”) and one incumbent multi into with minimal capital outlay
service operator (“MSO”) in each territory). For Ares,
these are Lehigh Valley and Wave North
 Texas, Wave South and Chicago, which are each reported Legacy Business  Represents video and voice products
Partially Incumbent
as one geography, but include both Incumbent and Non-
Market
Inc. markets within the broader reporting geography

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