Appendix 1

Summary
Base Case LIBOR Forecast IRR Average
Worse Case Best Case
Principal $100,000,000 $100,000,000 $100,000,000 $100,000,000 Scenario Base Case LIBOR
LIBORForecast
+ 2.5% LIBOR - 2.5% Cost
Interest rate/cap rate LIBOR forecast 11.31% 10.00% 11.00% Swap 11.80% 11.80% 11.80% 11.80%
Floor rate - - - 8.38% Cap 12.62% 14.09% 10.93% 12.55%
Spread 2.00% 2.00% 2.00% 2.00% Collar 12.19% 13.62% 10.79% 12.20%
Premium - - $1,370,000 -
IRR - Quarterly 2.91% 2.83% 3.02% 2.92%
IRR - Annual 12.18% 11.80% 12.62% 12.19%

Cap all in Collar all

Year Quarter LIBOR Forecast LIBOR Loan CF Fixed rate Swap CF Cap cost Cap CF Collar in cost Collar CF Columbia River Pulp Inc
100,000,000 100,000,000 98,630,000 100,000,000 Financial forecast 1995 1994 1993 1992 1991 1990 1989
Aug-88 Q1 0.0825 (2,562,500) 0.1131 (2,827,500) 0.0825 0.1025 (2,562,500) 0.0838 0.1038 (2,593,750) EBIT 88,975 96,275 77,160 50,934 54,387 74,234 80,308
Q2 0.0875 (2,687,500) 0.1131 (2,827,500) 0.0875 0.1075 (2,687,500) 0.0875 0.1075 (2,687,500) Interest expense 11,181 14,097 20,489 23,465 26,465 29,997 33,149
Q3 0.0925 (2,812,500) 0.1131 (2,827,500) 0.0925 0.1125 (2,812,500) 0.0925 0.1125 (2,812,500) Coverage 7.96 6.83 3.77 2.17 2.06 2.47 2.42
Q4 0.0975 (2,937,500) 0.1131 (2,827,500) 0.0975 0.1175 (2,937,500) 0.0975 0.1175 (2,937,500)
Aug-89 Q1 0.1025 (3,062,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1025 0.1225 (3,062,500) Current asset 94,556 93,969 75,641 61,105 54,041 47,888 39,322
Q2 0.1075 (3,187,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1075 0.1275 (3,187,500) Current liabilities 8,608 8,276 47,957 23,688 23,266 22,853 23,593
Q3 0.1050 (3,125,000) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1050 0.1250 (3,125,000) Liquidity 10.98 11.35 1.58 2.58 2.32 2.10 1.67
Q4 0.1025 (3,062,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1025 0.1225 (3,062,500)
Aug-90 Q1 0.1000 (3,000,000) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1000 0.1200 (3,000,000) Sales 257,413 258,265 323,949 200,793 196,663 208,508 209,168
Q2 0.0975 (2,937,500) 0.1131 (2,827,500) 0.0975 0.1175 (2,937,500) 0.0975 0.1175 (2,937,500) Total assets 175,364 190,907 188,299 189,108 192,049 195,246 195,410
Q3 0.0950 (2,875,000) 0.1131 (2,827,500) 0.0950 0.1150 (2,875,000) 0.0950 0.1150 (2,875,000) ROA 146.79% 135.28% 172.04% 106.18% 102.40% 106.79% 107.04%
Q4 0.0925 (102,812,500) 0.1131 (102,827,500) 0.0925 0.1125 (102,812,500) 0.0925 0.1125 (102,812,500)
IRR 2.915% 2.828% 3.016% 2.918% Net Income 54,006 56,116 38,709 19,149 19,156 29,530 31,191
Shareholders equity 57,301 57,301 57,301 57,301 57,301 57,301 57,301
Worse Case LIBOR + 2.5% ROE 94.25% 97.93% 67.55% 33.42% 33.43% 51.53% 54.43%
Principal $100,000,000 $100,000,000 $100,000,000 $100,000,000
Interest rate/cap rate LIBOR forecast 11.31% 10.00% 11.00%
Floor rate - - - 8.38%
Spread 2.00% 2.00% 2.00% 2.00%
Premium - - $3,425,000 -
IRR - Quarterly 3.04% 2.83% 3.35% 3.24%
IRR - Annual 12.72% 11.80% 14.09% 13.62%

Cap all in Collar all

Year Quarter LIBOR Forecast LIBOR Loan CF Fixed rate Swap CF Cap cost Cap CF Collar in cost Collar CF
100,000,000 100,000,000 96,575,000 100,000,000
Aug-88 Q1 0.1075 (2,687,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1075 0.1275 (3,187,500)
Q2 0.1125 (2,812,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q3 0.1175 (2,937,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q4 0.1225 (3,062,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Aug-89 Q1 0.1275 (3,187,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q2 0.1325 (3,312,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q3 0.1300 (3,250,000) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q4 0.1275 (3,187,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Aug-90 Q1 0.1250 (3,125,000) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q2 0.1225 (3,062,500) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q3 0.1200 (3,000,000) 0.1131 (2,827,500) 0.1000 0.1200 (3,000,000) 0.1100 0.1300 (3,250,000)
Q4 0.1175 (102,937,500) 0.1131 (102,827,500) 0.1000 0.1200 (103,000,000) 0.1100 0.1300 (103,250,000)
IRR 3.039% 2.828% 3.351% 3.244%

Best Case LIBOR - 2.5%

Principal $100,000,000 $100,000,000 $100,000,000 $100,000,000
Interest rate/cap rate LIBOR forecast 11.31% 10.00% 11.00%
Floor rate - - - 8.38%
Spread 2.00% 2.00% 2.00% 2.00%
Premium - - $3,425,000 -
IRR - Quarterly 1.79% 2.83% 2.63% 2.59%
IRR - Annual 7.37% 11.80% 10.93% 10.79%

Cap all in Collar all

Year Quarter LIBOR Forecast LIBOR Loan CF Fixed rate Swap CF Cap cost Cap CF Collar in cost Collar CF
100,000,000 100,000,000 96,575,000 100,000,000
Aug-88 Q1 0.0575 (1,437,500) 0.1131 (2,827,500) 0.0575 0.0775 (1,937,500) 0.0838 0.1038 (2,593,750)
Q2 0.0625 (1,562,500) 0.1131 (2,827,500) 0.0625 0.0825 (2,062,500) 0.0838 0.1038 (2,593,750)
Q3 0.0675 (1,687,500) 0.1131 (2,827,500) 0.0675 0.0875 (2,187,500) 0.0838 0.1038 (2,593,750)
Q4 0.0725 (1,812,500) 0.1131 (2,827,500) 0.0725 0.0925 (2,312,500) 0.0838 0.1038 (2,593,750)
Aug-89 Q1 0.0775 (1,937,500) 0.1131 (2,827,500) 0.0775 0.0975 (2,437,500) 0.0838 0.1038 (2,593,750)
Q2 0.0825 (2,062,500) 0.1131 (2,827,500) 0.0825 0.1025 (2,562,500) 0.0838 0.1038 (2,593,750)
Q3 0.0800 (2,000,000) 0.1131 (2,827,500) 0.0800 0.1000 (2,500,000) 0.0838 0.1038 (2,593,750)
Q4 0.0775 (1,937,500) 0.1131 (2,827,500) 0.0775 0.0975 (2,437,500) 0.0838 0.1038 (2,593,750)
Aug-90 Q1 0.0750 (1,875,000) 0.1131 (2,827,500) 0.0750 0.0950 (2,375,000) 0.0838 0.1038 (2,593,750)
Q2 0.0725 (1,812,500) 0.1131 (2,827,500) 0.0725 0.0925 (2,312,500) 0.0838 0.1038 (2,593,750)
Q3 0.0700 (1,750,000) 0.1131 (2,827,500) 0.0700 0.0900 (2,250,000) 0.0838 0.1038 (2,593,750)
Q4 0.0675 (101,687,500) 0.1131 (102,827,500) 0.0675 0.0875 (102,187,500) 0.0838 0.1038 (102,593,750)
IRR 1.793% 2.828% 2.627% 2.594%