TABLE OF CONTENTS Sheet Tab Description Author

1 TABLE OF CONTENTS
2 INPUTS -->
3 Acquirer Financials
4 Target Financials
5 Transaction Assumptions
6 Synergies
7 TRANSACTION -->
8 Sources and Uses
9 Goodwill
10 Pro-Forma Balance Sheet
11 Debt Issues
12 CONSOLIDATION -->
13 Consolidated Financials
14 Summary
15 EPS Chart
16 Debt Leverage Chart
17 ROE Chart
18 ROI Chart
19 Interest Coverage Chart
20 Verification
21 Rating Band Chart
22 Working Chart
23 Bond Rating Standards
24 Sheet11

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C:\Courses\Course Materials\3 Templates and Exercises M&A Models\Consolidation Structuring Examp

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s\Consolidation Structuring Example.xls
INPUTS -->

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0
Acquirer Financials Units Formula
Show Comments
Year 2002 2003 2004

Assumptions

Operating Assumptions
Revenues 5,200.00 5,357.04
Operating Expesnes 4,780.00 4,923.74
Capital Expenditures 425.00 137.70

Interest Rates, taxes and depreciation

Short-term Interest Rate 5% 5%
Tax Rate 40% 40%
Depereciation Rate 4% 4%

Financing
Long Term Debt Balance 750.0 750.0
Long Term Debt Maturities - -
Long Term Debt Interest 36.0 36.0
Long Term New Issues - -

Equity Finaincing
New Equity Issues - -
Price on New Shares 20.0 20.0
Dividend Payout Ratio 80% 80%

Other
A/R Revenues 5% 5%
A/P Expenses 10% 10%

Income Statement
Revenues 5,200.0 5,357.0
Operating Expenses 4,780.0 4,923.7
EBITDA 420.0 433.3
Depreciation 77.0 82.5
EBIT 343.0 350.8
Short-term Interest Expense - 14.7
Long-term Interest Expense 36.0 36.0
Interest Income - -
EBT 307.0 300.1
 Taxes 122.8 120.1
Net Income 184.2 180.1

Cash Flow
Net Income 184.2 180.1
Depreciation 77.0 82.5
Working Capital Change 82.0 (6.5)
Operating Cash Flow 179.2 269.1
Capital Expenditures 425.0 137.7
Cash Before Financing (245.8) 131.4
New Equity Issues - -
New Debt Issues - -
Debt Re-payments - -
Dividends 147.4 144.1
Cash After Dividends (393.2) (12.7)

Balance Sheet
Assets
Cash and Temporary Securities 100.0 - -
Current Assets 200.0 260.0 267.9
Gross Plant 1,500.0 1,925.0 2,062.7
Accumulated Depreciation 100.0 177.0 259.5
Net Plant 1,400.0 1,748.0 1,803.2
Total Assets 1,700.0 2,008.0 2,071.0

Liabilities and Capital

Current Liabilities 500.0 478.0 492.4
Debt
Revolver Balance 293.2 305.8
Long-term Debt 750.0 750.0
Total Debt 750.0 1,043.2 1,055.8
Equity 450.0 486.8 522.9
Liabilities and Capital 1,700.0 2,008.0 2,071.0
- -
Revolver and Cash Balance

Working Capital (300.0) (218.0) (224.5)

Working Capital Change 82.0 (6.5)

Beginning Balance of Cash and Revolver 100.0 100.0 (293.2)

 Add: Net Cash Flow (393.2) (12.7)
Ending Balance 100.0 (293.2) (305.8)

Short-term Debt 293.2 305.8

Cash Balance - -

Short-term Interest - 14.7

Interest Income on Cash Balance - -

Share Balance
Beginning Shares 80 80 80
Add: New Share Issues 0 0
Ending Shares 80 80 80

EPS 2.30 2.25

Interest Coverage 9.53 6.92
Debt Leverage 68% 67%
ROE 38% 34%
ROI 13% 13%
 2005 2006 2007 2008 2009 2010

5,518.82 5,685.49 5,857.19 6,034.08 6,216.31 6,404.04

5,071.82 5,224.35 5,381.47 5,543.33 5,710.07 5,881.82
151.64 155.47 159.41 163.45 167.60 171.86

5% 5% 5% 5% 5% 5%
40% 40% 40% 40% 40% 40%
4% 4% 4% 4% 4% 4%

300.0 300.0 300.0 300.0 - -

450.0 - - - 300.0 -
27.0 18.0 18.0 18.0 9.0 -
- - - - - -

- - - - - -
20.0 20.0 20.0 20.0 20.0 20.0
80% 80% 80% 80% 80% 80%

5% 5% 5% 5% 5% 5%
10% 10% 10% 10% 10% 10%

5,518.8 5,685.5 5,857.2 6,034.1 6,216.3 6,404.0

5,071.8 5,224.3 5,381.5 5,543.3 5,710.1 5,881.8
447.0 461.1 475.7 490.7 506.2 522.2
88.6 94.8 101.2 107.7 114.4 121.3
358.4 366.3 374.5 383.0 391.8 400.9
15.3 38.7 39.5 40.2 40.7 55.9
27.0 18.0 18.0 18.0 9.0 -
- - - - - -
316.1 309.6 317.0 324.8 342.2 345.0
 126.5 123.9 126.8 129.9 136.9 138.0
189.7 185.8 190.2 194.9 205.3 207.0

189.7 185.8 190.2 194.9 205.3 207.0

88.6 94.8 101.2 107.7 114.4 121.3
(6.7) (6.9) (7.1) (7.3) (7.6) (7.8)
285.0 287.5 298.5 310.0 327.3 336.1
151.6 155.5 159.4 163.5 167.6 171.9
133.3 132.0 139.1 146.5 159.7 164.2
- - - - - -
- - - - - -
450.0 - - - 300.0 -
151.7 148.6 152.2 155.9 164.2 165.6
(468.4) (16.6) (13.1) (9.4) (304.6) (1.4)

- - - - - -
275.9 284.3 292.9 301.7 310.8 320.2
2,214.3 2,369.8 2,529.2 2,692.7 2,860.3 3,032.1
348.1 442.9 544.0 651.8 766.2 887.4
1,866.3 1,926.9 1,985.2 2,040.9 2,094.1 2,144.7
2,142.2 2,211.2 2,278.0 2,342.6 2,404.9 2,464.9

507.2 522.4 538.1 554.3 571.0 588.2

774.2 790.8 803.9 813.3 1,117.9 1,119.3

300.0 300.0 300.0 300.0 - -
1,074.2 1,090.8 1,103.9 1,113.3 1,117.9 1,119.3
560.8 597.9 636.0 675.0 716.0 757.4
2,142.2 2,211.2 2,278.0 2,342.6 2,404.9 2,464.9
- - - - - -

(231.2) (238.2) (245.3) (252.6) (260.2) (268.0)

(6.7) (6.9) (7.1) (7.3) (7.6) (7.8)

(305.8) (774.2) (790.8) (803.9) (813.3) (1,117.9)

(468.4) (16.6) (13.1) (9.4) (304.6) (1.4)
(774.2) (790.8) (803.9) (813.3) (1,117.9) (1,119.3)

774.2 790.8 803.9 813.3 1,117.9 1,119.3

- - - - - -

15.3 38.7 39.5 40.2 40.7 55.9

- - - - - -

80 80 80 80 80 80
0 0 0 0 0 0
80 80 80 80 80 80

2.37 2.32 2.38 2.44 2.57 2.59

8.48 6.46 6.51 6.58 7.89 7.17
66% 65% 63% 62% 61% 60%
34% 31% 30% 29% 29% 27%
13% 13% 13% 13% 13% 13%
Target Financials Units Formula

Show Comments
Year 2002 2003 2004

Assumptions

Operating Assumptions
Revenues 742.50 833.09
Operating Expesnes 510.61 569.20
Capital Expenditures 137.36 154.02

Interest Rates, taxes and depreciation

Short-term Interest Rate 7% 7%
Tax Rate 20% 20%
Depereciation Rate 4% 4%

Financing
Long Term Debt Balance 300.0 300.0
Long Term Debt Maturities - -
Long Term Debt Interest 18.0 18.0
Long Term New Issues - -

Equity Finaincing
New Equity Issues - -
Price on New Shares 20.0 20.0
Dividend Payout Ratio 80% 80%

Other
A/R Revenues 12% 12%
A/P Expenses 10% 10%

Income Statement
Revenues 742.5 833.1
Operating Expenses 510.6 569.2
EBITDA 231.9 263.9
Depreciation 37.5 43.7
EBIT 194.4 220.2
Short-term Interest Expense - 6.3
Long-term Interest Expense 18.0 18.0
Interest Income - -
EBT 176.4 196.0
 Taxes 35.3 39.2
Net Income 141.1 156.8

Cash Flow
Net Income 141.1 156.8
Depreciation 37.5 43.7
Working Capital Change 18.0 5.0
Operating Cash Flow 160.6 195.4
Capital Expenditures 137.4 154.0
Cash Before Financing 23.2 41.4
New Equity Issues - -
New Debt Issues - -
Debt Re-payments - -
Dividends 112.9 125.4
Cash After Dividends (89.7) (84.0)

Balance Sheet
Assets
Cash and Temporary Securities - - -
Current Assets 80.0 89.1 100.0
Gross Plant 800.0 937.4 1,091.4
Accumulated Depreciation 100.0 137.5 181.1
Net Plant 700.0 799.9 910.2
Total Assets 780.0 889.0 1,010.2

Liabilities and Capital

Current Liabilities 60.0 51.1 56.9
Debt
Revolver Balance 89.7 173.7
Long-term Debt 300.0 300.0
Total Debt 300.0 389.7 473.7
Equity 420.0 448.2 479.6
Liabilities and Capital 780.0 889.0 1,010.2
- -
Revolver and Cash Balance

Working Capital 20.0 38.0 43.1

Working Capital Change 18.0 5.0

Beginning Balance of Cash and Revolver - - (89.7)

 Add: Net Cash Flow (89.7) (84.0)
Ending Balance - (89.7) (173.7)

Short-term Debt 89.7 173.7

Cash Balance - -

Short-term Interest - 6.3

Interest Income on Cash Balance - -

Share Balance
Beginning Shares 40 40 40
Add: New Share Issues 0 0
Ending Shares 40 40 40

EPS 3.53 3.92

Share Value 15

P/E Ratio 4.25

 2005 2006 2007 2008 2009 2010

934.72 1,048.76 1,176.71 1,320.26 1,481.34 1,662.06

634.86 708.45 790.95 883.43 987.11 1,103.36
172.71 193.67 217.19 243.58 273.18 306.39

7% 7% 7% 7% 7% 7%
20% 20% 20% 20% 20% 20%
4% 4% 4% 4% 4% 4%

150.0 150.0 150.0 150.0 - -

150.0 - - - 150.0 -
15.0 12.0 12.0 12.0 6.0 -
- - - - - -

- - - - - -
20.0 20.0 20.0 20.0 20.0 20.0
80% 80% 80% 80% 80% 80%

12% 12% 12% 12% 12% 12%

10% 10% 10% 10% 10% 10%

934.7 1,048.8 1,176.7 1,320.3 1,481.3 1,662.1

634.9 708.5 790.9 883.4 987.1 1,103.4
299.9 340.3 385.8 436.8 494.2 558.7
50.6 58.3 67.0 76.7 87.7 99.9
249.3 282.0 318.8 360.1 406.6 458.8
12.2 29.1 36.3 44.3 53.2 73.4
15.0 12.0 12.0 12.0 6.0 -
- - - - - -
222.1 240.9 270.4 303.8 347.4 385.4
 44.4 48.2 54.1 60.8 69.5 77.1
177.7 192.7 216.3 243.0 277.9 308.3

177.7 192.7 216.3 243.0 277.9 308.3

50.6 58.3 67.0 76.7 87.7 99.9
5.6 6.3 7.1 8.0 9.0 10.1
222.6 244.7 276.2 311.8 356.6 398.2
172.7 193.7 217.2 243.6 273.2 306.4
49.9 51.0 59.0 68.2 83.5 91.8
- - - - - -
- - - - - -
150.0 - - - 150.0 -
142.2 154.2 173.1 194.4 222.3 246.7
(242.2) (103.1) (114.0) (126.2) (288.9) (154.9)

- - - - - -
112.2 125.9 141.2 158.4 177.8 199.4
1,264.1 1,457.8 1,675.0 1,918.5 2,191.7 2,498.1
231.7 290.0 357.0 433.8 521.4 621.4
1,032.4 1,167.7 1,317.9 1,484.8 1,670.3 1,876.7
1,144.5 1,293.6 1,459.1 1,643.2 1,848.0 2,076.2

63.5 70.8 79.1 88.3 98.7 110.3

415.9 519.1 633.1 759.3 1,048.2 1,203.1

150.0 150.0 150.0 150.0 - -
565.9 669.1 783.1 909.3 1,048.2 1,203.1
515.1 553.7 596.9 645.5 701.1 762.8
1,144.5 1,293.6 1,459.1 1,643.2 1,848.0 2,076.2
- - - - - -

48.7 55.0 62.1 70.1 79.0 89.1

5.6 6.3 7.1 8.0 9.0 10.1

(173.7) (415.9) (519.1) (633.1) (759.3) (1,048.2)

(242.2) (103.1) (114.0) (126.2) (288.9) (154.9)
(415.9) (519.1) (633.1) (759.3) (1,048.2) (1,203.1)

415.9 519.1 633.1 759.3 1,048.2 1,203.1

- - - - - -

12.2 29.1 36.3 44.3 53.2 73.4

- - - - - -

40 40 40 40 40 40
0 0 0 0 0 0
40 40 40 40 40 40

4.44 4.82 5.41 6.08 6.95 7.71

Transaction Assumptions
General Acquirer Debt Retired
Target Company Name Target Switch for Total Debt Retirement
Acquirer Company Name Acquiror
Scenario Name Debt Retired
Transaction Date 1/1/2004 Issue 1
Transaction Financing
Purchase Price
Equity Value - Cash Consideration 1,700.00
Equity Value - Consideration in Shares -
Target Debt Value 389.69 Issue 2
Target Enterprise Value 2,089.69

Shares Issued
Number of Shares 51.83
Stock Price of Shares 9.00 Transaction Costs
Value of Shares Issued 466.48 Debt Issue Costs
Debt Issued
Issue 1 On-Going Assumptions
Amount of Debt 1,338.00 Tax Rate
Interest Rate 5% Depreciation Rate on Write-up
Term 10.00 Interest Rate on Revolver
Interest Income Rate
Issue 2 Dividend Per-Share
Amount of Debt -
Interest Rate 0% Graphs
Term - Years on Graph
Acquirer Debt Retired Model Verified 1
Switch for Total Debt Retirement 0

Debt Retired Source Minus Uses -

Issue 1 Goodwill 356.26
Amount of Debt - Retire

Interest Rate 7%
Show Comments
Term -

Issue 2
Amount of Debt - Accounting
Interest Rate 0% Asset Write-up 1,000.00
Term -
Synergies 50.00
Transaction Costs 104.48
Debt Issue Costs -

On-Going Assumptions
Tax Rate 30%
Depreciation Rate on Write-up 5%
Interest Rate on Revolver 7%
Interest Income Rate 4%
Dividend Per-Share 1.00

Years on Graph 7
Synergies
2003 2004 2005 2006 2007

Revenue Increases 50 50 50 50

Expense Reductions

Capital Expenditure Reductions

2008 2009 2010

50 50 50
Consolidated Financials
Show Comments
Year 2004 2005 2006 2007

Assumptions

Interest Rate on Revolver 7.0% 7.0% 7.0%

Interest Rate on Cash Balance 4.0% 4.0% 4.0%
Income Tax Rate 30.0% 30.0% 30.0%
Dividend Per Share 1.00 1.00 1.00

Income Statement
Revenues
Target 833 935 1,049
Acquirer 5,357 5,519 5,685
Synergies - 50 50
Total 6,190 6,504 6,784
Operating Expenses
Target 569 635 708
Acquirer 4,924 5,072 5,224
Synergies - - -
Total 5,493 5,707 5,933
EBITDA 697 797 851
Depreciation
Target 44 51 58
Acquirer 83 89 95
Asset Write-up 50 50 50
Total Depreciation 176 189 203
EBIT 521 608 648
Other Income
Target
Acquirer
Interest Expense
Existing Interest 121 109 97
Interest Expense on Revolver - 24 62
Interest Income on Cash Balance - - -
Net Interest Expense 121 133 159
EBT 400 474 490
Taxes 120 142 147
Goodwill Writeoff
Net Income 280 332 343
Cash Flow
Net Income 280 332 343
Depreciation and Goodwill 176 189 203
Working Capital Change (2) (1) (1)
Operating Cash Flow 458 522 546
Capital Expenditures
Target 154 173 194
Acquiror 138 152 155
Synergies - - -
Total Capital Expenditure 292 324 349
Cash Before Financing 166 198 197
New Debt Issues - - -
New Equity Issues
Debt Repayments - 600 -
Dividends 132 132 132
Cash After Dividends 34 (534) 65

Balance Sheet
Assets
Cash and Temporary Securities - - - -
Current Assets
Target 100 112 126
Acquiror 268 276 284
Total Current Assets 349 368 388 410
Gross Plant 2,862 3,154 3,478 3,828
Accumulated Depreciation 314 491 680 883
Net Plant 2,548 2,663 2,799 2,945
Other Assets 1,000 1,000 1,000 1,000
Goodwill 356 356 356 356
Total Assets 4,253 4,388 4,543 4,711

Liabilities and Capital

Current Liabilities
Target 57 63 71
Acquiror 492 507 522
Total Current Liabilities 529 549 571 593
Debt Balance
Existing Debt 2,388 2,388 1,788 1,788
Revolver 383 349 882 817
Total Debt 2,771 2,737 2,670 2,605
Other Liabilities - - - -
 Minority Interest - - - -
Beginning Equity 953 1,102 1,302
Add: Net Income 280 332 343
Add: Equity Issues - - -
Less: Dividends 132 132 132
Ending Equity 953 1,102 1,302 1,513
Liabilities and Capital 4,253 4,388 4,543 4,711

Assets less Liabilities - - - -

Check 1 1 1 1 1

Total Trade Working Capital (180) (181) (183) (183)

Change in Working Capital (2) (1) (1)

Net Revolver Balance

Beginning Cash Less Short Term (383) (349) (882)
Add Cash Flow 34 (534) 65
Ending Revolver and Cash Balance (382.85) (349) (882) (817)

Cash Balance - - -
Revolver Balance 349 882 817

Cash Interest Income - - -

Revolver Intersest Expense - 24 62

Shares
Beginning Shares 132 132 132
New Shares
Ending Shares 132 132 132 132

Consolidated
EPS 2.12 2.52 2.60
EBIT/Interest 4.31 4.56 4.09
Debt/Captial 71.3% 67.2% 63.3%
ROE 27.3% 27.6% 24.4%
ROIC 9.5% 10.7% 11.0%

Standalone - Acquirer
EPS 2.25 2.37 2.32
EBIT/Interest 6.92 8.48 6.46
Debt/Captial 67% 66% 65%
ROE 34% 34% 31%
ROIC 13% 13% 13%
 2008 2009 2010 2011

7.0% 7.0% 7.0% 7.0%

4.0% 4.0% 4.0% 4.0%
30.0% 30.0% 30.0% 30.0%
1.00 1.00 1.00 1.00

1,177 1,320 1,481 1,662

5,857 6,034 6,216 6,404
50 50 50 50
7,084 7,404 7,748 8,116

791 883 987 1,103

5,381 5,543 5,710 5,882
- - - -
6,172 6,427 6,697 6,985
911 978 1,050 1,131

67 77 88 100
101 108 114 121
50 50 50 50
218 234 252 271
693 743 798 860

97 97 82 67
57 51 43 64
- - - -
154 148 125 131
539 595 673 728
162 179 202 219

377 417 471 510

 377 417 471 510
218 234 252 271
(0) 1 1 2
596 650 722 779

217 244 273 306

159 163 168 172
- - - -
377 407 441 478
219 243 281 301
- - - -

- - 450 -
132 132 132 132
87 112 (301) 169

- - - -

141 158 178 199

293 302 311 320
434 460 489 520
4,204 4,611 5,052 5,530
1,101 1,336 1,588 1,859
3,103 3,276 3,464 3,671
1,000 1,000 1,000 1,000
356 356 356 356
4,893 5,092 5,309 5,547

79 88 99 110
538 554 571 588
617 643 670 699

1,788 1,788 1,338 1,338

730 618 919 750
2,518 2,406 2,257 2,088
- - - -
 - - - -
1,513 1,758 2,043 2,383
377 417 471 510
- - - -
132 132 132 132
1,758 2,043 2,383 2,761
4,893 5,092 5,309 5,547

- - - -
1 1 1 1

(183) (183) (181) (179)

(0) 1 1 2

(817) (730) (618) (919)

87 112 (301) 169
(730) (618) (919) (750)

- - - -
730 618 919 750

- - - -
57 51 43 64

132 132 132 132

132 132 132 132

2.86 3.16 3.57 3.87

4.50 5.02 6.38 6.55
58.9% 54.1% 48.6% 43.1%
23.1% 21.9% 21.3% 19.8%
11.3% 11.7% 12.0% 12.4%

2.38 2.44 2.57 2.59

6.51 6.58 7.89 7.17
63% 62% 61% 60%
30% 29% 29% 27%
13% 13% 13% 13%
TRANSACTION -->
Sources and Uses
Amount
Uses 2003
Target Equity - Cash 1,700.00
Target Equity - Shares -
Target Debt Retired Retire -
Transaction Fees 104.48
Acquirer Debt
Working Capital
Debt Issue Costs -
Total Uses 1,804.48

Sources
New Shares Issued 466.48
New Debt Issued - 1 1,338.00
New Debt Issued - 2 -
New Preferred Issued
Cash Used
Total Sources 1,804.48
Difference -
Shares Required -
Test 1

Overall Model Verified 1

Shares
2003

51.83
Goodwill

Goodwill Calculation 2003

Step 1: Equity Purchase Price vs Book Value

Equity Purchase Price - Total Consideration 1,700.00

Less: Book Value of Target Company Equity 448.22
Net 1,251.78

Step 2: Add Transaction Costs 104.48

Step 3: Less Asset Write-ups

Intangible Asset Write-up 1,000.00

Net Asset - Write-ups 1,000.00

Step 4: Add Liability Write-ups

Net Liability Write-ups

Step 5: Total Goodwill 356.26

Pro-Forma Balance Sheet

2003 2003

Debt
Assets Acquiror Target Issue

Restricted Cash
Cash and Temporary Investments - -
Other Current Assets 260.00 89.10
Gross Plant Value 1,925.00 937.36
Accumulated Depreciation 177.00 137.49
Net Plant 1,748.00 799.87
Intangible Assets
Deferred Debits and Goodwill
Total Assets 2,008.00 888.97 -

Liabilities and Capital

Current Liabilities 478.00 51.06

Short-term Debt 293.16 89.69
Existing and Input Debt 750.00 300.00 1,338.00
Other Liabilities and Deferred Credits
Deferred Taxes
Minority Interest
Common Equity Balance 486.84 448.22
Total Liabilities and Capital 2,008.00 888.97 1,338.00

1 1
Shares 80
 Eliminate New Adjusted
Debt Cash Asset Target Equity Balance
Retired Changes Write-up Goodwill Equity Issues Total Adj Sheet

- -
- -
- 349
- 2,862
- 314
- 2,548
1,000.00 1,000 1,000
356.26 356 356
- - 1,000.00 356.26 - - 1,356 4,253

- 529
- 383
1,338 2,388
- -
- -
- -
(448.22) 466.48 18 953
- - - - (448.22) 466.48 1,356 4,253

1
52 132
Debt Issues
Show Comments
Total Debt Issues 2003 2004 2005 2006 2007
Aggregation of All Debt Issues
New Issues 1,338 - - - -
Debt Maturities - - 600 - -
Ending Balance 2,388 2,388 1,788 1,788 1,788
Interest Expense 87 121 109 97 97

Check 1

Target Existing Debt

New Issues - - - - -
Debt Maturities - - 150 - -
Retired Debt -
Ending Balance 300 300 150 150 150
Interest Expense 18 18 15 12 12

Acquirer Existing Debt

New Issues - - - - -
Debt Maturities - - 450 - -
Ending Balance 750 750 300 300 300
Interest Expense 36 36 27 18 18

New Debt Issued - 1

Beginning Balance - 1,338 1,338 1,338 1,338
New Issues 1,338 - - - -
Debt Maturities - - - - -
Ending Balance 1,338 1,338 1,338 1,338 1,338
Interest Expense 33 67 67 67 67

New Debt Issued - 2

Beginning Balance - - - - -
New Issues - - - - -
Debt Maturities - - - - -
Ending Balance - - - - -
Interest Expense - - - - -

Debt Retired - 1
Beginning Balance - - - - -
New Issues - - - - -
Debt Maturities
Ending Balance - - - - -
Interest Expense - - - - -
Debt Retired - 2
Beginning Balance - - - - -
New Issues - - - - -
Debt Maturities
Ending Balance - - - - -
Interest Expense - - - - -
 2008 2009 2010

- - -
- 450 -
1,788 1,338 1,338
97 82 67

- - -
- 150 -

150 - -
12 6 -

- - -
- 300 -
300 - -
18 9 -

1,338 1,338 1,338

- - -
- - -
1,338 1,338 1,338
67 67 67

- - -
- - -
- - -
- - -
- - -

- - -
- - -

- - -
- - -
- - -
- - -

- - -
- - -
CONSOLIDATION -->
 Equity Consideration 1,700.00 Synergies 50.00
Equity Issued 466.48 Write-up 1,000.00
Debt Issued 1,338.00

EPS Comparison: Target Combined with Acquiror

Interest Coverage Comparison
Transaction Value 2,090 Shares Issued 52
Transaction Value 2
12 10.00
9.00
10
8.00

8 7.00
6.00
6 5.00
4.00
4 3.00
Consolidated
2.00
2 Standalone
1.00

0 -
2004 2005 200

ROE Comparison: Target Combined with Acquiror Debt to Capital Comparison:

Transaction Value 2,090 Shares Issued 52
12
12
10
10
8
8
6
6
4 Consolidated 4
Standalone

2 2

0 0
 Years on Graph 7
4
Business Risk Category
Target Bond Rating BBB

Equity Valu 1700

Interest Coverage Comparison: Target Combined with Acquiror
Transaction Value 2,090 Debt Issued 1,338
Debt 1338
00 Bond Rating
Standard
00
Consolidated Equity 466
00
00
00
Sources/Uses
00
00
00
00
00
-
2004 2005 2006 2007 2008 2009 2010

Debt to Capital Comparison: Target Combined with Acquiror Transaction Value 2,090 Debt Issued 1,338

12

10

4
Consolidated
Standalone
2

0
-
 EPS Comparison: Target Combined with Acquiror
Transaction Value 2,090 Shares Issued 52
12

10

Consolidated
Standalone
2

0
 Debt to Capital Comparison: Target Combined with Acquiror Transaction Value 2,090 Debt Issued 1,338

12

10

Consolidate
d
Standalone

0
 ROE Comparison: Target Combined with Acquiror
Transaction Value 2,090 Shares Issued 52
12

10

Consolidated
Standalone
2

0
 ROI Comparison: Target Combined with Acquiror Transaction Value 2,090 Shares Issued 52

12

10

Consolidated
Standalone

0
 Interest Coverage Comparison: Target Combined with Acquiror
Transaction Value 2,090 Debt Issued 1,338
12

10

Consolidated
Standalone

0
Verification

Sources and Uses 1

Pro-Forma Balance Sheet 1

On-Going Balance Sheet 1

Debt Reconciliation 1

Aggregate Check 1
8

4
7

BBB

Maximum
4 Minimum

0
2004 2005 2006 2007 2008 2009 2010
 Interest Coverage Comparison: Target Combined with Acquiror
Transaction Value 2,090 Debt Issued 1,338
10

9
4

8
BBB

Maximum
5 Minimum
Consolidate
d
4

0
1 2 3 4 5 6 7
Bond Rating Standards

1
2
3
4
5
6
7
8
9

Row Num
Target

Minimum
Maximum
 AA A BBB BB
From To From To From To From To
2.5 3 1.5 2.5 1 1.5
3 4 2 3 1 2
3.5 4.5 2.5 3.5 1.5 2.5 1 1.5
4.2 5 3 4.2 2.5 3.5 1.5 2.5
4.5 5.5 3.8 4.5 2.8 3.8 1.8 2.8
5.2 6 4.2 5.2 3 4.2 2 3
6.5 8 4.5 6.5 3.2 4.5 2.2 3.2
7.5 10 5.5 7.5 3.5 5.5 2.5 3.5
7 10 4 7 2.8 4

4 4 4 4 4 4 4 4
4.2 5 3 4.2 2.5 3.5 1.5 2.5

Rating Target
3 4 4

AA 1
A 2
BBB 3 BBB
BB 4
5
6
7
8
9

2004 2005 2006 2007 2008 2009 2010

2.5 2.5 2.5 2.5 2.5 2.5 2.5
3.5 3.5 3.5 3.5 3.5 3.5 3.5

4.31 4.56 4.09 4.50 5.02 6.38 6.55

Sheet11 ='Transaction Assumptions'!$E$3
debt_2 ='Transaction Assumptions'!$E$24
debt_cap1 =OFFSET('Consolidated Financials'!$F$116,0,0,1,'Transaction Assumptions'!$
debt_cap2 =OFFSET('Consolidated Financials'!$F$123,0,0,1,'Transaction Assumptions'!$
debt_issue_1 ='Transaction Assumptions'!$E$19
debt_issue_costs ='Transaction Assumptions'!$L$16
debt_rate_1 ='Transaction Assumptions'!$E$20
debt_rate_2 ='Transaction Assumptions'!$E$25
debt_retire_rate_1 ='Transaction Assumptions'!$L$7
debt_retire_term_1 ='Transaction Assumptions'!$L$8
debt_retired_1 ='Transaction Assumptions'!$L$6
debt_retirement_switch ='Transaction Assumptions'!$L$2
debt_target ='Transaction Assumptions'!$E$10
debt_term_1 ='Transaction Assumptions'!$E$21
debt_term_2 ='Transaction Assumptions'!$E$26
dep_rate_write_up ='Transaction Assumptions'!$L$20
div_per_share ='Transaction Assumptions'!$L$23
E10debt_target ='Transaction Assumptions'!$E$10
eps1 =OFFSET('Consolidated Financials'!$F$114,0,0,1,'Transaction Assumptions'!$L$26)
eps2 =OFFSET('Consolidated Financials'!$F$121,0,0,1,'Transaction Assumptions'!$L$26)
equity_consideration_cash ='Transaction Assumptions'!$E$8
equity_consideration_shares ='Transaction Assumptions'!$E$9
income_rate ='Transaction Assumptions'!$L$22
int_cov =OFFSET('Consolidated Financials'!$F$115,0,0,1,'Transaction Assumptions'!$L$26)
int_cov2 =OFFSET('Consolidated Financials'!$F$122,0,0,1,'Transaction Assumptions'!$L$26)
revolver_rate ='Transaction Assumptions'!$L$21
roe_1 =OFFSET('Consolidated Financials'!$F$117,0,0,1,'Transaction Assumptions'!$L$26)
roe_2 =OFFSET('Consolidated Financials'!$F$124,0,0,1,'Transaction Assumptions'!$L$26)
roi_1 =OFFSET('Consolidated Financials'!$F$118,0,0,1,'Transaction Assumptions'!$L$26)
roi_2 =OFFSET('Consolidated Financials'!$F$125,0,0,1,'Transaction Assumptions'!$L$26)
scenario_name ='Transaction Assumptions'!$E$4
shares_issued ='Transaction Assumptions'!$E$14
stock_price ='Transaction Assumptions'!$E$15
target_name ='Transaction Assumptions'!$E$2
tax_rate ='Transaction Assumptions'!$L$19
total_enterprise_value ='Transaction Assumptions'!$E$11
transaction_cost ='Transaction Assumptions'!$L$15
transaction_date ='Transaction Assumptions'!$E$5
value_of_shares ='Transaction Assumptions'!$E$16
x_range =OFFSET('Consolidated Financials'!$F$2,0,0,1,'Transaction Assumptions'!$L$26)
 Transaction Value 2,090 Shares Issued 52
Transaction Value 2,090 Debt Issued 1,338
saction Assumptions'!$ Debt to Capital Comparison: Target Combined with Acquiror Transaction Value 2,090 Debt Issued 1,338
saction Assumptions'!$ Transaction Value 2,090 Shares Issued 52
ROI Comparison: Target Combined with Acquiror Transaction Value 2,090 Shares Issued 52

BBB

saction Assumptions'!$L$26)
saction Assumptions'!$L$26)

saction Assumptions'!$L$26)
saction Assumptions'!$L$26)

saction Assumptions'!$L$26)
saction Assumptions'!$L$26)
saction Assumptions'!$L$26)
saction Assumptions'!$L$26)

ction Assumptions'!$L$26)
t Issued 1,338