Projected Financial Performance and Key Metrics for Company ABC

UpsideCase
ProjectedFiscalYearEndingMarch31,
(USD$inthousands,ExceptperShareData)
IncomeStatement
Revenues
GrossProfit
EBITDA
EBIT
NetIncome
BalanceSheet
TotalAssets
CurrentLiabilities
Debt
TotalLiabilities
TotalEquity
Cashflow
CashInflow/(Outflow)fromOperation
CashInflow/(Outflow)fromInvesting
CashInflow/(Outflow)fromFinancing
2000
2001
2002
2003
$45,000
$15,000
$4,650
$2,743
$65,000
$30,000
$15,050
$11,479
$71,500
$39,325
$22,165
$13,199
$80,080
$45,646
$25,626
$13,341
$89,690 $100,452 $112,507

$52,917 $60,271 $67,504
$30,494 $35,158 $39,377
$16,350 $25,433 $29,684
$2,243
$6,250
$10,668
$10,915
$13,472
$16,507
$4,845
$5,000
$9,845
$38,171
$14,474
$5,000
$19,474
$62,493
$20,600
$5,000
$25,600
$75,551
$22,743
$5,000
$27,743
$91,384 $115,384 $143,539

$25,104 $27,910 $31,259
$5,000
$5,000
$5,000
$30,104 $32,910 $36,259
$6,662
$18,697
$36,893
$47,808
$61,280
$82,474 $107,280
$20,297
($19,050)
$7,528
$23,146
($7,500)
$0
$27,565
($7,950)
$0
$30,828 $34,357
($8,800) ($10,000)
$0
$0
$8,775
$2,500
$11,275
$664
$19,050
$1,247
$15,646
$11,275
$26,921
($53)
$7,500
$15,646
$19,615
$26,921
$46,536
($52)
$7,950
$19,615
$22,028
$46,536
$68,564
($91)
$8,800
$22,028
NetCashInflow/(Outflow)
OpeningCashBalance
ClosingCashBalance
Inc.(Dec.)inNetWorkingCapital
CapitalExpenditures
FreeCashFlow
2004
2005
$21,193
2006
$24,806
$24,357
$68,564
$92,921
($143)
$10,000
$24,357
Key Financial Ratios
2000
2001
2002
2003
2004
2005
2006
Profitability
RevenueGrowth
GrossMargin
EBITDAMargin
EBITMargin
NA
33.3%
10.3%
6.1%
44.4%
46.2%
23.2%
17.7%
10.0%
55.0%
31.0%
18.5%
12.0%
57.0%
32.0%
16.7%
12.0%
59.0%
34.0%
18.2%
12.0%
60.0%
35.0%
25.3%
12.0%
60.0%
35.0%
26.4%
NetIncomeMargin
EBIT/TotalAssets[pretaxROA]
EBIT(1Tax)/TotalAssets[ROA]
6.1%
16.6%
17.7%
30.1%
17.1%
18.5%
21.1%
17.7%
16.7%
17.7%
15.0%
18.2%
17.9%
15.2%
25.3%
22.0%
18.7%
26.4%
20.7%
17.6%
33.4%
28.9%
22.8%
22.0%
25.7%
23.1%
2.4
0.6
7.3
30.4
29.7
1.3
0.3
9.6
31.3
66.9
1.6
0.6
10.0
75.0
90.0
2.2
1.3
10.0
75.0
90.0
2.9
2.0
10.0
75.0
90.0
3.5
2.6
10.0
75.0
90.0
4.0
3.1
10.0
75.0
90.0
0.3x
9.3x
5.5x
9.3x
0.3x
2.1x
0.1x
30.1x
23.0x
30.1x
0.1x
1.3x
0.1x
44.3x
26.4x
6.2x
NA
NA
0.1x
51.3x
26.7x
36.3x
NA
NA
0.1x
61.0x
32.7x
45.1x
NA
NA
0.0x
70.3x
50.9x
52.7x
NA
NA
0.0x
78.8x
59.4x
58.8x
NA
NA
NetIncome/BookValueofEquity[ROE]
Liquidity
CurrentRatio
QuickRatio
DaysSalesinReceivables
DaysCOGSinPayables
DaysCOGSinInventory
Financing
TotalDebt/TotalCapitalization
EBITDA/NetInterest
EBIT/NetInterest
(EBITDACapEx)/NetInterest
NetDebt/NetCapitalization
NetDebt/EBITDA
Company ABC
CapTable
ExistingShareholders
A
B
C
D
E
Newshareholders
Citi
CoinvestorX
'000ofshares
1,406
1000
500
1500
300
4,706
941
0
941
5,647
%Shareholding%ShareholdingAmountRaised
Date
EquityValuation
(Pre)
(Post)
$'000
(Post)$'000
29.9%
21.2%
10.6%
31.9%
6.4%
100.0%
24.9%
17.7%
8.9%
26.6%
5.3%
83.3% ###
3/31/1995
2,000
16.7%
0.0%
16.7% ###
3/31/2001
45,176
100.0%
Company ABC
KeyFinancialAssumptions
UpsideCase
AcquisitionTerms
LeveragedDebtFinancingTerms
SharestobeAcquired
Primary Secondary
NumberofShares('000)
941
0
PriceperShare
8.00
CostofShares
7,528
0
CommonSharesOutstanding(post)
5,647
AcquisitionStake
16.66%
AcquisitionPrice
7,528
TransactionFees
0
AssumedLiabilities(ExistingDebt)
0
TotalAcquisitionCost
7,528
LeveragedDebtAmount
Maturity(years)
Repayment(0Bullet/1Amortizing)
PrepaymentPenalty
BaseRate
10yearsTreasuryBond
Spread
InterestRate
ArrangementFee
AcquisitionCapitalStructure
CorporateTaxRate
(average,effective)
WithholdingTaxRate(ifapplicable)
EquityInvestment
LeveragedDebt
Total
Leverage(Debt/Equity)
100.00%
0.00%
100.00%
7,528
0
7,528
0.00
CostofCapital
IndustryBeta(unlevered)
RiskFreeRate(10yearTreasuryBond)
EquityRiskPremium
CostofEquity
DebttoCapitalization
EquitytoCapitalization
WACC
Adjustforilliquidity/smallcompany
AdjustedWACC
0.80
7.0%
7.50%
13.00%
15.0%
85.0%
12.0%
15.0%
27.0%
EntryValuation
0
0
1
None
7.00%
3.00%
10.00%
0.0
Taxation
19.85%
0.00%
Currency&InterestRateAssumption
BaseCurrency
LongTerm
10yearTreasuryBond
LongTermCreditSpread
LongTermDiscountRate
USD$
7.00%
1.00%
8.00%
FutureFinancingAssumption
%financedbynewdebt
%bynewequity
15%
85%
Valuation(AcquisitionPrice/Stake)
45,176
CurrentYear Prospective
PricetoEarnings
7.23
4.23
PricetoEBITDA
3.00
2.04
PricetoSalesRevenue
0.70
0.63
PricetoBookValue
2.42
1.22
PriceperCustomer
N/A
N/A
ExitMarketValuation
PricetoEarnings
PricetoEBITDA
PricetoSalesRevenue
PricetoBookValue
PriceperCustomer
10.00
5.00
1.00
n.a.
n.a.
Company ABC
KeyOperatingAssumptions
UpsideCase
###
2000
2001
2002
2003
2004
2005
2006
RevenueGrowthRateProductA
COGS(excl.Deprec.)/RevenueProductA
SG&A/Revenue
OtherOperatingExp/Revenue
Minority%InterestinTotalIncome
EffectiveTaxRate
DaysCOGSinInventory
OtherCurrentAssets/Revenues
DaysCOGSinPayables
OtherCurrentLiabilities/Revenues
IncreaseinOtherLongTermAssets
###
###
###
###
###
###
###
###
###
###
66.7%
8.0%
15.0%
0.0%
7.3
29.7
13.3%
30.4
5.2%
$0.0
44.4%
53.8%
8.0%
15.0%
0.0%
43.1%
9.6
66.9
12.3%
31.3
17.7%
$0.0
10.0%
45.0%
10.0%
14.0%
0.0%
16.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
12.0%
43.0%
11.0%
14.0%
0.0%
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
12.0%
41.0%
11.0%
14.0%
0.0%
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
12.0%
40.0%
11.0%
14.0%
0.0%
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
12.0%
40.0%
11.0%
14.0%
0.0%
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
IncreaseinOtherLongTermLiabilities
0.0
0.0
0.0
0.0
0.0
0.0
0.0
###
###
###
###
###
2000
66.7%
8.0%
15.0%
0.0%
2001
44.4%
53.8%
8.0%
15.0%
0.0%
2002
10.0%
45.0%
10.0%
14.0%
0.0%
2003
12.0%
43.0%
11.0%
14.0%
0.0%
2004
12.0%
41.0%
11.0%
14.0%
0.0%
2005
12.0%
40.0%
11.0%
14.0%
0.0%
2006
12.0%
40.0%
11.0%
14.0%
0.0%
###
###
###
###
###
###
7.3
29.7
13.3%
30.4
5.2%
$0.0
43.1%
9.6
66.9
12.3%
31.3
17.7%
$0.0
16.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
###
###
###
###
###
2000
66.7%
8.0%
15.0%
0.0%
2001
44.4%
53.8%
8.0%
15.0%
0.0%
2002
10.0%
30.0%
10.0%
14.0%
0.0%
2003
12.0%
27.0%
11.0%
14.0%
0.0%
2004
12.0%
30.0%
11.0%
14.0%
0.0%
2005
12.0%
30.0%
11.0%
14.0%
0.0%
2006
12.0%
30.0%
11.0%
14.0%
0.0%
###
###
###
###
###
###
7.3
29.7
13.3%
30.4
5.2%
$0.0
43.1%
9.6
66.9
12.3%
31.3
17.7%
$0.0
16.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
15.0%
10.0
90.0
16.4%
75.0
19.6%
$0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
OtherOperatingExp.(Inc.)/Revenues
###
###
###
###
###
2000
66.7%
8.0%
15.0%
0.0%
2001
44.4%
53.8%
8.0%
15.0%
0.0%
2002
10.0%
60.0%
10.0%
15.0%
0.0%
2003
5.0%
60.0%
12.0%
15.0%
0.0%
2004
5.0%
65.0%
13.0%
15.0%
0.0%
2005
5.0%
65.0%
14.0%
15.0%
0.0%
2006
5.0%
65.0%
15.0%
15.0%
0.0%
EffectiveTaxRate
DaysCOGSinInventory
DaysCOGSinPayables
###
###
###
###
###
7.3
29.7
13.3%
30.4
43.1%
9.6
66.9
12.3%
31.3
16.0%
10.0
90.0
16.4%
75.0
15.0%
10.0
90.0
16.4%
75.0
15.0%
10.0
90.0
16.4%
75.0
15.0%
10.0
90.0
16.4%
75.0
15.0%
10.0
90.0
16.4%
75.0
1 UpsideCase
(1=BaseCase,2=UpsideCase,3=DownsideCase)
ProjectedYearEndingDecember31,
Upside Case
SG&A/Revenue
EffectiveTaxRate
DaysCOGSinInventory
DaysCOGSinPayables
Base Case
EffectiveTaxRate
DaysCOGSinInventory
DaysCOGSinPayables
Downside Case
###
5.2%
$0.0
17.7%
$0.0
19.6%
$0.0
19.6%
$0.0
19.6%
$0.0
19.6%
$0.0
19.6%
$0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Company ABC
IncomeStatement
UpsideCase
2000
2001
2002
2003
2004
2005
2006
###
0.0
0.0
65,000.0
0.0
0.0
71,500.0
80,080.0
89,689.6
100,452.4
112,506.6
###
$65,000.0
$71,500.0
$80,080.0
$89,689.6
$100,452.4
$112,506.6
###
0.0
0.0
###
$35,000.0
0.0
0.0
$35,000.0
$32,175.0
$34,434.4
$36,772.7
$40,180.9
$45,002.7
Revenue
ProductA
ProductB
ProductC
TotalRevenue
COGS
ProductA
ProductB
ProductC
TotalCOGS
$32,175.0
$34,434.4
$36,772.7
$40,180.9
$45,002.7
GrossProfit
GrossMargin
SG&A
OthersOperatingExpenses
###
$30,000.0
$39,325.0
$45,645.6
$52,916.9
$60,271.4
$67,504.0
33.3%
###
###
46.2%
5,200.0
9,750.0
55.0%
7,150.0
10,010.0
57.0%
8,808.8
11,211.2
59.0%
9,865.9
12,556.5
60.0%
11,049.8
14,063.3
60.0%
12,375.7
15,750.9
EBITDA(OperatingCashFlow)
EBITDAMargin
###
10.3%
$15,050.0
23.2%
$22,165.0
31.0%
$25,625.6
32.0%
$30,494.5
34.0%
$35,158.3
35.0%
$39,377.3
35.0%
Depreciation
AmortizationofIntangibles
###
0.0
3,571.0
0.0
8,965.5
0.0
12,284.3
0.0
14,144.5
0.0
9,725.0
0.0
9,693.8
0.0
EBIT(OperatingIncome)
EBIT(Operating)Margin
OtherExpenses(Income):
###
6.1%
$11,479.0
17.7%
$13,199.5
18.5%
$13,341.3
16.7%
$16,349.9
18.2%
$25,433.3
25.3%
$29,683.6
26.4%
InterestIncome
InterestExpense
0.0
500.0
0.0
500.0
0.0
500.0
0.0
500.0
0.0
500.0
0.0
500.0
0.0
500.0
PreTaxIncome
###
$10,979.0
$12,699.5
$12,841.3
$15,849.9
$24,933.3
$29,183.6
IncomeTaxes
NetIncome
MinorityInterestinNetIncome
AdjustedNetIncome
0.0
4,729.4
2,031.9
1,926.2
2,377.5
3,740.0
4,377.5
###
$6,249.6
$10,667.6
$10,915.1
$13,472.5
$21,193.3
$24,806.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
###
$6,249.6
$10,667.6
$10,915.1
$13,472.5
$21,193.3
$24,806.0
PreferredDividends
0.0
0.0
0.0
0.0
0.0
0.0
0.0
NetIncometoCommon
ExtraordinaryCharges(Income)
###
0.0
$6,249.6
0.0
$10,667.6
0.0
$10,915.1
0.0
$13,472.5
0.0
$21,193.3
0.0
$24,806.0
0.0
###
$6,249.6
$10,667.6
$10,915.1
$13,472.5
$21,193.3
$24,806.0
AdjustedNetIncometoCommon
Company ABC
BalanceSheet
UpsideCase
CashandEquivalents
AccountsReceivable
Inventory
PrepaidExpenses
OtherCurrentAssets
TotalCurrentAssets
2000
2001
2002
2003
2004
2005
2006
$2,157.2
901.0
2,442.6
0.0
6,000.0
$2,500.0
1,717.8
6,413.3
0.0
8,000.0
$11,274.9
1,958.9
7,933.6
0.0
11,701.5
$26,920.9
2,194.0
8,490.7
0.0
13,105.7
$46,535.9
2,457.2
9,067.2
0.0
14,678.4
$68,563.7
2,752.1
9,907.6
0.0
16,439.8
$92,920.7
3,082.4
11,096.5
0.0
18,412.6
11,501
18,631
32,869
50,711
72,739
97,663
125,512
5,006.2
0.0
0.0
19,539.8
0.0
0.0
29,624.3
0.0
0.0
24,840.0
0.0
0.0
18,645.5
0.0
0.0
17,720.5
0.0
0.0
18,026.8
0.0
0.0
16,507
38,171
62,493
75,551
91,384
115,384
143,539
$2,500.0
$3,000.0
$6,611.3
$7,075.6
$7,556.0
$8,256.4
$9,247.1
$0.0
2,345.2
$0.0
11,473.8
$0.0
13,989.2
$0.0
15,667.9
$0.0
17,548.0
$0.0
19,653.8
$0.0
22,012.3
4,845
14,474
20,600
22,743
25,104
27,910
31,259
0.0
5,000.0
0.0
5,000.0
0.0
5,000.0
0.0
5,000.0
0.0
5,000.0
0.0
5,000.0
0.0
5,000.0
TotalDebt
5,000
5,000
5,000
5,000
5,000
5,000
5,000
DeferredTaxes
MinorityInterest
OtherLongTermLiabilities
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
9,845
19,474
25,600
27,743
30,104
32,910
36,259
163.2
9,944.8
206.7
9,944.8
0.0
(3,446.2)
6,661.8
0.0
8,545.7
18,697.2
206.7
9,944.8
7,528.0
0.0
19,213.3
36,892.8
206.7
9,944.8
7,528.0
0.0
30,128.4
47,807.9
206.7
9,944.8
7,528.0
0.0
43,600.8
61,280.3
206.7
9,944.8
7,528.0
0.0
64,794.2
82,473.7
206.7
9,944.8
7,528.0
0.0
89,600.2
107,279.7
16,507.0
38,171.0
62,493.3
75,551.3
91,384.4
115,383.8
143,539.1
9.3
30.1
44.3
NetProperty,Plant&Equipment
IntangibleAssets
OtherLongTermAssets
TotalAssets
Payables
DepositsReceived
OtherCurrentLiabilities
TotalCurrentLiabilities
Termloan
OtherDebt
TotalLiabilities
ShareCapital
SharePremium
AdditionalEquity
ConvertiblePreferredStock
CommonStockholders'Equity
TotalEquity
TotalLiabilities&Equity
BalanceCheck
EBITDA/NetInterestExp.
Company ABC
CashFlowStatement
UpsideCase
1999
2000
NetIncometoCommon
#REF! $2,242.9
Depreciation
#REF!
1,907.1
#REF!
0.0
NonCashInterestExpense
0.0
0.0
IncreaseinDeferredTaxes
#REF!
0.0
GainonDisposalofFixedAsset(fromOtherNonOpInc.)
2001
2006
2008
2009
2010
2011
$6,249.6 $10,667.6 $10,915.1 $13,472.5 $21,193.3 $24,806.0

3,571.0
8,965.5 12,284.3 14,144.5
9,725.0
9,693.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
#REF!
0.0
0.0
#REF!
0.0
0.0
0.0
#REF!
0.0
0.0
#REF!
0.0
0.0
0.0
#REF!
0.0
0.0
#REF!
0.0
0.0
0.0
#REF!
0.0
0.0
#REF!
0.0
0.0
0.0
FundsFromOperations
(Inc.)Dec.inAcct.Rec.
(Inc.)Dec.inInventory
(Inc.)Dec.inPrepaidExpenses
(Inc.)Dec.inOtherCurrentAssets
Inc.(Dec.)inAccountPayables
Inc.(Dec.)inOtherCurrentLiabilities
Inc.(Dec.)inNetWorkingCapital
CashFlowFromOperations
2002
2003
2004
2005
19,633
23,199
27,617
30,918
34,500
#REF!
#REF!
#REF!
#REF!
(241.1)
(1,520.3)
0.0
(3,701.5)
3,611.3
2,515.4
(235.1)
(557.1)
0.0
(1,404.2)
464.3
1,678.7
(263.3)
(576.6)
0.0
(1,572.7)
480.5
1,880.1
(294.9)
(840.4)
0.0
(1,761.4)
700.3
2,105.8
(330.3)
(1,188.9)
0.0
(1,972.8)
990.8
2,358.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
664
53
52
91
143
#REF!
#REF!
#REF!
#REF!
20,297
23,146
27,565
30,828
34,357
(19,050.0)
0.0
0.0
0.0
(7,500.0)
0.0
0.0
0.0
(7,950.0)
0.0
0.0
0.0
(8,800.0)
0.0
0.0
0.0
(10,000.0)
0.0
0.0
0.0
FreeCashFlow
1,247
15,646
19,615
22,028
24,357
STDebtIssuance(Repay.)
Exist.DebtIssuance(Repay.)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Capex
MaintenanceCapex
Investments
ProceedsfromDisposals
DebtIssuance(Repayments)
CommonStockDividends
Convert.PreferredIssuance
Equity(Reduction)Issuance
Other
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
#REF!
0.0
0.0
0.0
ChangeinCashandEquivalents
$0.0
$0.0
$0.0
8,775
15,646
19,615
22,028
24,357
#REF!
#REF!
#REF!
BeginningCashandEquivalents
0.0
0.0
2,157.2
2,500.0
11,274.9
26,920.9
46,535.9
68,563.7
0.0
0.0
0.0
0.0
2,500.0
11,275
26,921
46,536
68,564
92,921
#REF!
#REF!
#REF!
#REF!
EndingCashandEquivalents
Financingrequired
Financedbydebt
Financedbyequity
15%
85%
0.0
0.0
0
0.0
0.0
7,528.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Company ABC
CapExandDepreciationSchedule
UpsideCase
1999
2002
2003
2004
2005
BeginningNetPP&E
CapitalExpenditures
Depreciation
$19,539.8
19,050.0
(8,965.5)
$29,624.3
7,500.0
(12,284.3)
$24,840.0
7,950.0
(14,144.5)
$18,645.5
8,800.0
(9,725.0)
$17,720.5 $18,026.8 $18,026.8

10,000.0
0.0
#REF!
(9,693.8)
0.0
0.0
EndingNetPP&E
$19,539.8 $29,624.3
$24,840.0
$18,645.5
$17,720.5
$18,026.8 $18,026.8
2000
2001
2006
2007
2008
#REF!
Capital Expenditures
PlantA
$500.0
$500.0
$1,500.0
$1,600.0
$1,700.0
$1,800.0
$2,500.0
PlantB
$600.0
$600.0
$1,550.0
$1,700.0
$1,850.0
$2,000.0
$2,500.0
PlantC
$1,000.0
$1,000.0
$6,000.0
$2,200.0
$2,400.0
$3,000.0
$3,000.0
PlantD
$1,000.0
$1,000.0 $10,000.0
$2,000.0
$2,000.0
$2,000.0
$2,000.0
$3,100.0 $19,050.0
$7,500.0
$7,950.0
$8,800.0
$10,000.0
9.37%
8.86%
8.76%
8.89%
TotalCapitalExpenditure
$3,100.0
CapitalExpenditure/TotalRevenues
6.89%
4.77%
26.64%
$0.0
#REF!
Book Depreciation
ExistingPP&ELife
3.0Years
TimesDeclining
SalvageValue
1.0x
Land/NonDepreciableItems
$0.0 NewCapExLife
4.0Years
0.0 TimesDeclining
1.0x
ExistingNetPP&E
$19,539.8
$6,584.3
$6,584.3
$6,513.3
$0.0
$0.0
$0.0
$0.0
2002
$19,050.0
7,500.0
7,950.0
8,800.0
10,000.0
0.0
0.0
0.0
0.0
0.0
$2,381.3
$4,762.5
$937.5
$4,762.5
$1,875.0
$993.8
$4,762.5
$1,875.0
$1,987.5
$1,100.0
$2,381.3
$1,875.0
$1,987.5
$2,200.0
$1,250.0
$0.0
937.5
1,987.5
2,200.0
2,500.0
0.0
$0.0
0.0
993.8
2,200.0
2,500.0
0.0
0.0
$8,965.5
$12,284.3
$14,144.5
$9,725.0
$9,693.8
2003
2004
2005
2006
2007
2008
2009
2010
2011
TotalBookDepreciationExpense
Company ABC
IntangiblesSchedule
UpsideCase
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
AmortizationofIntangible2
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
TotalBookAmortizationofIntangibles
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
TaxAmortizationofIntangibles
TaxAmortizationofIntangible2
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
TotalTaxDeductibleAmortizationofIntangibles
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Book Amortization
Intangibles
Intangible2
Intangible3
Intangible4
0Years
0Years
0Years
0Years
TotalBookIntangibles
Tax Amortization
Intangibles
Intangible2
Intangible3
Intangible4
40Years ($0=NonTaxDeductible)
0Years
0Years
0Years
TotalTaxIntangibles
Company ABC
DebtSchedule
UpsideCase
(AmountsinUS$000s)
NEWBORROWINGSA
Openingbalance
Additions
Repayments
Endingbalance
Interestpayment
Totaldebtservice(Interest+Principal)
TERMLOANB
Openingbalance
Additions
Repayments
Endingbalance
Interestpayment
TERMLOANC
Openingbalance
Additions
Repayments
Endingbalance
Interestpayment
TOTAL
OpeningBalance
EndingBalance
Totalinterestpaid
2002
2003
2004
2005
2006
$0
0
0
$0
$0
$0
$0
0
0
$0
$0
$0
$0
0
0
$0
$0
$0
$0
0
0
$0
$0
$0
$0
0
0
$0
$0
$0
$5,000
0
0
$5,000
$500
$500
$5,000
0
0
$5,000
$500
$500
$5,000
0
0
$5,000
$500
$500
$5,000
0
0
$5,000
$500
$500
$5,000
0
0
$5,000
$500
$500
$0
0
0
$0
0
$0
$0
0
0
$0
0
$0
$0
0
0
$0
0
$0
$0
0
0
$0
0
$0
$0
0
0
$0
0
$0
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$500
$500
$500
$500
$500
Effectiveinterestrate
10.00%
10.00%
10.00%
Effectiveinterestrate
Company ABC
FourYearFreeCashFlowAnalysis
UpsideCase
TerminalEBITDAMultipleApproach
NetIncome
NetInterestExpense/(Income)
MarginalTaxRate
FinancingTaxShield
2002
2003
2004
$10,667.6 $10,915.1 $13,472.5
500.0
500.0
500.0
16.0%
15.0%
15.0%
(80.0)
(75.0)
(75.0)
0.0
0.0
0.0
2005
$21,193.3
500.0
15.0%
(75.0)
0.0
2006
$24,806.0
500.0
15.0%
(75.0)
0.0
EarningsBeforeInterest
DepreciationandAmortization
IncreaseinDeferredTaxes
ChangeinNetWorkingCapital
CapitalExpenditures
$11,087.6 $11,340.1 $13,897.5

8,965.5 12,284.3 14,144.5
0.0
0.0
0.0
0.0
0.0
0.0
663.8
(53.4)
(51.9)
(19,050.0)
(7,500.0)
(7,950.0)
$21,618.3
9,725.0
0.0
0.0
(90.6)
(8,800.0)
$25,231.0
9,693.8
0.0
0.0
(142.7)
(10,000.0)
$1,666.9 $16,071.0 $20,040.1
$22,452.7
$24,782.1
$39,377.3
$25,088.3
US$inthousands
UnleveredFreeCashFlow
TerminalEBITDA
TerminalAdjustedFreeCashFlow
4.5x
5.0x
5.5x
TerminalEBITDAMultipleRange
4.0x
TerminalEBITDAMultipleRange
6.0x
4.0x
TerminalValue
4.5x
5.0x
5.5x
6.0x
ImpliedTerminalP/EMultiple
$157,509
$177,198 $196,887 $216,575
WACC
26.0%
26.5%
27.0%
27.5%
28.0%
$87,737
86,269
84,833
83,428
82,053
PresentValueofFirmValue
$93,934 $100,130 $106,327
92,344
98,419 104,495
90,789
96,746 102,702
89,268
95,109 100,950
87,780
93,508
99,235
WACC
26.0%
26.5%
27.0%
27.5%
28.0%
8.9%
9.3
9.7
10.2
10.6
$236,264
9.9x
WACC
$112,524
110,570
108,659
106,790
104,963
26.0%
26.5%
27.0%
27.5%
28.0%
$85,237
83,769
82,333
80,928
79,553
26.0%
26.5%
27.0%
27.5%
28.0%
56.5%
56.3%
56.2%
56.0%
55.8%
10.7x
11.5x
12.3x
13.1x
EquityValueasof3/31/01
$91,434
$97,630 $103,827 $110,024
89,844
95,919 101,995 108,070
88,289
94,246 100,202 106,159
86,768
92,609
98,450 104,290
85,280
91,008
96,735 102,463
ImpliedPerpetuityGrowthRate
10.6%
11.9%
13.1%
11.0
12.4
13.5
11.4
12.8
14.0
11.9
13.3
14.4
12.3
13.7
14.9
WACC
14.0%
14.5
15.0
15.4
15.9
TerminalValue/PresentValue
59.4%
61.9%
64.1%
59.2%
61.7%
64.0%
59.0%
61.6%
63.8%
58.9%
61.4%
63.6%
58.7%
61.3%
63.5%
66.1%
65.9%
65.8%
65.6%
65.5%
(a) EquityValueequalsFirmValuelesstotalstraightandconvertibledebt,straightandconvertiblepreferredstockandminorityinterest,pluscash,optionsandwarrantsproceedsandinvestmentsinunconsolidatedsubsidiaries.
(b) EquityValueperShareequalsEquityValuedividedbyDilutedsharesoutstanding,beforeTreasuryStockMethodsharebuyback.
DCFAssumptions
TerminalMultipleBasedon
1
2
3
2006Revenue
2006EBITDA
2006Earnings
2006EBITDA
DCFAssumptions
Data MidRange Sensitivity

$112,506.6
1.0x
0.1x
39,377.3
5.0
0.5
24,806.0
10.0
0.5
$39,377.3
5.0x
0.5x
InvestmentinUncons.Subs.
MinorityInterest
TerminalYearNetDebt
TerminalYearNetIncome
LatestFiscalYearEnd
ValuationDate
ImpliedDaysBeforeValuationDate
ImpliedDaysLeftAfterValuationDate
0.0
0.0
($87,920.7)
24,806.0
3/31/01
3/31/01
0
365
Company ABC
IRRAnalysis
UpsideCase
US$000,exceptpersharedata
SummaryAssumptions
EntryAmount
$7,528.0
CurrentMarketPrice
PremiumtoMarket
InvestmentPriceperShare
SharesPurchased('000)
TotalSharesOutstanding(Post)
%ofNewSharesIssued
Asof3/31
ExchangeRate
NetDebt@2006
2006EEBITDA
2006ESales
AssumedInvestmentDate
$0.00
0.0%
$8.00
941.0
5,647.0
1.0
($87,920.7)
$39,377.3
$112,506.6
3/31/2001
16.7%
2001
2002
2003
2004
2005
2006
InvestmentReturnCalculation
2006EEBITDA
5.0x
6.0x
7.0x
($7,528.0)
(7,528.0)
(7,528.0)
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$47,459.5
$54,021.2
$60,582.9
44.5%
48.3%
51.8%
2006ESales
1.0x
1.1x
1.2x
($7,528.0)
(7,528.0)
(7,528.0)
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$33,398.6
$35,273.4
$37,148.2
34.7%
36.2%
37.6%
Note:Assumesnotaxleakage
IRR
Incrementalfinancing
Company ABC
ValuationUsingComparables
UpsideCase
2001
ABC
PeerA
PeerB
PeerC
42,000
BalanceSheet
TotalAssets
38,171
30,000
38,000
LongtermDebt
5,000
1,000
2,000
4,000
NetWorth
18,697
15,000
17,500
18,000
IncomeStatement
Revenues
65,000
54,000
60,000
45,000
EBITDA
15,050
36,000
38,000
34,000
NetIncome
6,250
23,000
20,000
21,000
5,647
5,000
5,000
5,000
8.0
30
40
MarketData
SharesOutstandings('000)
SharePrice
55
NumberofCustomers
650,000 600,000 500,000
600,000
EquityValuation/MarketCap.
45,176
150,000 200,000
275,000
NetDebt
2,500
50,000
100,000
200,000
EnterpriseValue
47,676
200,000 300,000
475,000
EarningsGrowth(CAGRpast3years)
2001
22%
6%
ABC
EarningsGrowth(CAGRpast3years)
8%
PeerA
22%
6%
10%
PeerB
8%
PeerC
Industry
Average
10%
PriceEarningRatio
7.23
6.52
10.00
13.10
9.87
EV/EBITDA
3.17
5.56
7.89
13.97
9.14
EV/Sales
0.73
3.70
5.00
10.56
6.42
PricetoBook(Equity)
2.42
10.00
11.43
15.28
12.24
EV/Customer
73.35
333.33
600.00
791.67
575
Note:Peercompaniesarethosepubliccompanieswithsimilarnatureofbusinessoftargetfirm.
*
20.00
01 P/E
15.00
10.00
5.00
(0%)
5%
10%
15%
EPS Growth
20%
25%
30%
ValuationUsingVentureCapitalMethod
UpsideCase
Assumptions:
TargetRateofReturn(IRR)
15%
InvestmentAmount(US$'MM)
7,528.00
PercentageofDilutioninESOP
10%
PercentageofDilutioninIPO
15%
PercentageofDilutioninotherRoundsPriortoIPO
0%
AveragePERatio
9.9
TotalCurrentShareOutstanding
4,706
ExitYear
2001
2002
2003
2004
2005
2006
NetIncome
10,668
10,915
13,472
21,193
24,806
TerminalValue
105,314
107,758
133,004
209,227
244,893
91,577
81,480
87,453
119,626
121,755
DiscountedTerminalValue
RequiredFinalPercentageOwnership
8.22%
9.24%
8.61%
6.29%
6.18%
10.40%
11.69%
10.89%
7.96%
7.82%
NumberofNewShares
546
623
575
407
399
PriceperNewShare($)
13.78
12.09
13.09
18.50
18.85
ImpliedPremoneyValuation
64,865
56,883
61,604
87,038
88,721
ImpliedPostmoneyValuation
72,393
64,411
69,132
94,566
96,249
RequiredCurrentPercentageOwnership
ControlPage
GeneralModelInformation
CompanyName
MarketPrice
52WeekHigh
52WeekLow
Currency
DollarsIn
DollarHeader
HistoricalYear
UseLTMdata
FiscalYearEndMonth
FiscalYearEndDay
DateHeader
CompanyABC
$0.00
$0.00
$0.00
Date
###
###
###
USD$
thousands Enterunitsinlowercase
2001 YearofLastFullYearofHistoricalData
Yes
3 March FiscalYearEndMonth:1=Jan,2=Feb,etc..
31 EnterLastDayofFiscalYear,ex.31
3/31/2001 Acquiror'sLatestFullYearofHistoricalFinancialsEndDate
AcquirorLatestFullYearofHistoricalFinancials
#REF!
348
12

Projected Financial Performance and Key Metrics for Company ABC

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Projected Financial Performance and Key Metrics for Company ABC

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UpsideCase

$89,690 $100,452 $112,507

$91,384 $115,384 $143,539

$6,249.6 $10,667.6 $10,915.1 $13,472.5 $21,193.3 $24,806.0

$17,720.5 $18,026.8 $18,026.8

$11,087.6 $11,340.1 $13,897.5

$1,666.9 $16,071.0 $20,040.1

$177,198 $196,887 $216,575

Data MidRange Sensitivity

650,000 600,000 500,000

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