CoverInvestment Banking, 2EValuation, Leveraged Buyouts,and Mergers & AcquisitionsDCF Analysis - TemplateJOSHUA ROSENBAUMJOSHUA PEARL

DCFValueCo CorporationDiscounted Cash Flow Analysis($ in millions, fiscal year ending December 31)Operating ScenarioBaseOperating Scenario1Mid-Year ConventionYHistorical PeriodCAGRProjection Period199819992000('98 - '01)2001200220032004200520062007200820092010Sales-0-0$104.6-$320.4$448.6$605.6$805.4$990.6$1,188.8$1,379.0$1,585.8$1,731.7$1,870.2% growthNA-0-0206.3%40.0%35.0%33.0%23.0%20.0%16.0%15.0%9.2%8.0%Cost of Goods Sold-0-0-0-0-0-0-0-0-0-0-0Gross Profit-0-0$104.6-$320.4$448.6$605.6$805.4$990.6$1,188.8$1,379.0$1,585.8$1,731.7$1,870.2% margin-0-0100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%Selling, General & Administrative-0-0121.8283.2375.4495.3658.8810.3972.41,143.21,297.21,414.81,528.0EBITDA-0-0($17.2)-$37.2$73.1$110.2$146.6$180.3$216.4$235.8$288.6$316.9$342.3% margin-0-0(16.4%)11.6%16.3%18.2%18.2%18.2%18.2%17.1%18.2%18.3%18.3%Depreciation & Amortization-0-04.010.413.518.224.229.735.741.447.652.056.1EBIT-0-0($21.2)-$26.8$59.7$92.0$122.4$150.6$180.7$194.4$241.0$264.9$286.1% margin-0-0(20.3%)8.4%13.3%15.2%15.2%15.2%15.2%14.1%15.2%15.3%15.3%Taxes-0-0(0.2)3.420.331.341.651.261.466.182.090.197.3EBIAT-0-0($21.0)-$23.4$39.4$60.7$80.8$99.4$119.3$128.3$159.1$174.9$188.9Plus: Depreciation & Amortization-0-04.010.413.518.224.229.735.741.447.652.056.1Less: Capital Expenditures-0-0205.8233.8(269.1)(242.2)(273.8)(237.8)(237.8)(248.2)(237.9)(173.2)(84.2)Less: Inc./(Dec.) in Net Working Capital-0(32.4)(29.0)(31.0)(32.0)(31.0)(34.0)(36.0)(34.0)(24.0)(23.0)Unlevered Free Cash Flow$188.8$235.2($245.3)($194.3)($200.9)($139.7)(116.8)(114.5)(65.2)29.6137.8WACC6.8%Discount Period0.51.52.53.54.55.56.57.58.5Discount Factor0.970.910.850.790.740.700.650.610.57Present Value of Free Cash Flow($237.4)($176.1)($170.5)($111.0)($86.9)($79.8)($42.6)$18.1$78.9Enterprise ValueImplied Equity Value and Share PriceImplied Perpetuity Growth RateCumulative Present Value of FCF($807.2)Enterprise Value$1,268.1Terminal Year Free Cash Flow (2010E)$137.8Less: Total Debt(345.7)WACC6.8%Terminal ValueLess: Preferred StockTerminal Value$3,747.7Terminal Year EBITDA (2010E)$342.3Less: Noncontrolling Interest-0Exit Multiple- xPlus: Cash and Cash Equivalents117.5Implied Perpetuity Growth Rate3.0%Terminal Value$3,747.7Discount Factor0.55Implied Equity Value$1,040.0Implied EV/EBITDAPresent Value of Terminal Value$2,075.3Enterprise Value$1,268.1% of Enterprise Value163.7%Fully Diluted Shares Outstanding40.6LTM 9/30/2012 EBITDA-0Enterprise Value$1,268.1Implied Share Price$25.61Implied EV/EBITDA- xEnterprise ValueImplied Perpetuity Growth RateExit MultipleExit Multiple1,268.1-1.0x-0.5x0.0x0.5x1.0x0.0-1.0x-0.5x0.0x0.5x1.0xWACC-1.0%(4,810)(4,810)(4,810)(4,810)(4,810)WACC-1.0%3.0%3.0%3.0%3.0%3.0%-0.5%(5,160)(5,160)(5,160)(5,160)(5,160)-0.5%3.0%3.0%3.0%3.0%3.0%0.0%(5,640)(5,640)($5,640)(5,640)(5,640)0.0%3.0%3.0%3.0%3.0%3.0%0.5%(6,330)(6,330)(6,330)(6,330)(6,330)0.5%3.0%3.0%3.0%3.0%3.0%1.0%(7,382)(7,382)(7,382)(7,382)(7,382)1.0%3.0%3.0%3.0%3.0%3.0%AssumptionsSales (% growth)NA- %- %206.3%40.0%35.0%33.0%23.0%20.0%16.0%15.0%9.2%8.0%COGS (% sales)- %- %100.0%100.0%- %- %- %- %- %- %- %- %- %SG&A (% sales)- %- %116.4%88.4%83.7%81.8%81.8%81.8%81.8%82.9%81.8%81.7%81.7%Depreciation & Amortization (% sales)- %- %3.8%3.2%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%Capital Expenditures (% sales)- %- %(196.7%)(73.0%)60.0%40.0%34.0%24.0%20.0%18.0%15.0%10.0%4.5%Tax Rate- %- %- %34.0%34.0%34.0%34.0%34.0%34.0%34.0%34.0%34.0%34.0%Working Capital (% sales)10.5%10.6%10.6%10.6%10.6%10.7%10.6%10.6%10.6%ValueCo CorporationSensitivity Analysis($ in millions, fiscal year ending December 31)Enterprise ValueImplied Equity ValueExit MultipleExit Multiple1,268.1-1.0x-0.5x0.0x0.5x1.0x1,040.0-1.0x-0.5x0.0x0.5x1.0xWACC-1.0%(4,810)(4,810)(4,810)(4,810)(4,810)WACC-1.0%(5,038)(5,038)(5,038)(5,038)(5,038)-0.5%(5,160)(5,160)(5,160)(5,160)(5,160)-0.5%(5,388)(5,388)(5,388)(5,388)(5,388)0.0%(5,640)(5,640)($5,640)(5,640)(5,640)0.0%(5,869)(5,869)($5,869)(5,869)(5,869)0.5%(6,330)(6,330)(6,330)(6,330)(6,330)0.5%(6,558)(6,558)(6,558)(6,558)(6,558)1.0%(7,382)(7,382)(7,382)(7,382)(7,382)1.0%(7,610)(7,610)(7,610)(7,610)(7,610)Implied Perpetuity Growth RateImplied Enterprise Value / LTM EBITDAExit MultipleExit Multiple0.0-1.0x-0.5x0.0x0.5x1.0x- x6.5x7.0x0.0x0.5x1.0xWACC-1.0%3.0%3.0%3.0%3.0%3.0%WACC-1.0%- x- x- x- x- x-0.5%3.0%3.0%3.0%3.0%3.0%-0.5%- x- x- x- x- x0.0%3.0%3.0%3.0%3.0%3.0%0.0%- x- x- x- x- x0.5%3.0%3.0%3.0%3.0%3.0%0.5%- x- x- x- x- x1.0%3.0%3.0%3.0%3.0%3.0%1.0%- x- x- x- x- xPV of Terminal Value % of Enterprise ValueExit Multiple1.66.5x7.0x7.5x8.0x8.5xWACC-1.0%80.8%80.8%80.8%80.8%80.8%-0.5%82.2%82.2%82.2%82.2%82.2%0.0%83.9%83.9%83.9%83.9%83.9%0.5%85.8%85.8%85.8%85.8%85.8%1.0%87.9%87.9%87.9%87.9%87.9%Calculation of Implied Share PriceEnterprise Value$1,268.1Less: Total Debt(345.7)Less: Preferred Securities-0Less: Noncontrolling Interest-0Plus: Cash and Cash Equivalents117.5Implied Equity Value$1,040.0Options/WarrantsNumber ofExerciseIn-the-MoneyTrancheSharesPriceSharesProceedsTranche 1-0-0-0-0Tranche 2-0-0-0-0Tranche 3-0-0-0-0Tranche 4-0-0-0-0Tranche 5-0-0-0-0Total-0-0-0Basic Shares Outstanding35.100Plus: Shares from In-the-Money Options5.500Less: Shares Repurchased-0Net New Shares from Options5.500Plus: Shares from Convertible Securities-0Fully Diluted Shares Outstanding40.600Implied Share Price$25.61

NWCValueCo CorporationWorking Capital Projections($ in millions, fiscal year ending December 31)Historical PeriodProjection Period1998199920002001200220032004200520062007200820092010Sales-0-0$104.6$320.4$600.8$884.0$1,192.0$1,485.0$1,802.0$2,114.0$2,466.0$2,694.0$2,912.0Cost of Goods Sold-0-0-0-0-0-0-0-0-0-0-0-0-0Current AssetsAccounts Receivable-0-021.620.8124.1182.5246.1306.7372.1-0-0-0-0Inventories-0-01.12.2-0-0-0-0-0-0-0-0-0Prepaid Expenses and Other-0-02.73.715.623.031.038.646.9-0-0-0-0Total Current Assets-0-0$25.4$26.7$139.7$205.5$277.1$345.3$419.0-0-0-0-0Current LiabilitiesAccounts Payable-0-012.924.5-0-0-0-0-0-0-0-0-0Accrued Liabilities-0-05.618.332.447.764.480.297.3-0-0-0-0Other Current Liabilities-0-05.316.030.645.160.875.791.9-0-0-0-0Total Current Liabilities-0-0$23.8$58.8$63.1$92.8$125.2$155.9$189.2-0-0-0-0Net Working Capital-0-0$1.6$34.0$63.0$94.0$126.0$157.0$191.0$227.0$261.0$285.0$308.0% sales-0-01.5%10.6%10.5%10.6%10.6%10.6%10.6%10.7%10.6%10.6%10.6%(Increase) / Decrease in NWC-0($1.6)($32.4)($29.0)($31.0)($32.0)($31.0)($34.0)($36.0)($34.0)($24.0)($23.0)AssumptionsCurrent AssetsDays Sales Outstanding-0-075.475.475.475.475.475.475.4Days Inventory Held-0-0-0-0-0-0-0-0-0Prepaids and Other CA (% of sales)- %- %2.6%2.6%2.6%2.6%2.6%2.6%2.6%Current LiabilitiesDays Payable Outstanding-0-0-0-0-0-0-0-0-0Accrued Liabilities (% of sales)- %- %5.4%5.4%5.4%5.4%5.4%5.4%5.4%Other Current Liabilities (% of sales)- %- %5.1%5.1%5.1%5.1%5.1%5.1%5.1%

WACCValueCo CorporationWeighted Average Cost of Capital Analysis($ in millions)WACC CalculationComparable Companies Unlevered BetaTarget Capital StructurePredictedMarketMarketDebt/MarginalUnleveredDebt-to-Total Capitalization67.7%CompanyLevered Beta (4)Value of DebtValue of EquityEquityTax RateBetaEquity-to-Total Capitalization32.3%CompCo A-0-0-0- %- %-0CompCo B-0-0-0- %- %-0CompCo C-0-0-0- %- %-0Cost of DebtCompCo D-0-0-0- %- %-0Cost-of-Debt7.6%CompCo E-0-0-0- %- %-0Tax Rate34.0%After-tax Cost of Debt5.0%Mean-0- %-0Median-0- %-0Cost of EquityValueCo Relevered BetaRisk-free Rate (1)5.0%MeanTargetTargetMarket Risk Premium (2)5.0%UnleveredDebt/MarginalReleveredLevered Beta1.10BetaEquityTax RateBetaSize Premium (3)- %Relevered Beta-0209.6%34.0%-0Cost of Equity10.5%WACC Sensitivity AnalysisPre-tax Cost of DebtWACC6.8%Debt-to-Total Capitalization0.1-1.0%-0.5%0.0%0.5%1.0%-20.0%12.7%12.7%12.6%12.5%12.5%-10.0%11.6%11.6%11.6%11.5%11.5%0.0%10.5%10.5%10.5%10.5%10.5%10.0%9.4%9.4%9.5%9.5%9.5%20.0%8.3%8.3%8.4%8.5%8.5%(1) Interpolated yield on 20-year U.S. Treasury, sourced from Bloomberg(2) Obtained from Ibbotson SBBI Valuation Yearbook(3) Mid-cap Decile size premium based on market capitalization, per Ibbotson(4) Sourced from Bloomberg

AS1Assumptions Page 1 - Income Statement and Cash Flow StatementProjection PeriodYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 102002200320042005200620072008200920102011Income Statement AssumptionsSales (% growth)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %Cost of Goods Sold (% sales)- %- %- %- %- %- %- %- %- %- %Upside1- %- %- %- %- %- %- %- %- %- %Management2- %- %- %- %- %- %- %- %- %- %Base3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %SG&A (% sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %Depreciation & Amortization (% sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %Cash Flow Statement AssumptionsCapital Expenditures (% of sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %

AS2Assumptions Page 2 - Balance SheetProjection PeriodYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 102002200320042005200620072008200920102011Current AssetsDays Sales Outstanding (DSO)75.475.475.475.475.475.475.475.475.475.4Base175.475.475.475.475.475.475.475.475.475.4Upside2-0-0-0-0-0-0-0-0-0-0Management3-0-0-0-0-0-0-0-0-0-0Downside 14-0-0-0-0-0-0-0-0-0-0Downside 25-0-0-0-0-0-0-0-0-0-0Days Inventory Held (DIH)0.10.10.10.10.10.10.10.10.10.1Base10.10.10.10.10.10.10.10.10.10.1Upside2-0-0-0-0-0-0-0-0-0-0Management3-0-0-0-0-0-0-0-0-0-0Downside 14-0-0-0-0-0-0-0-0-0-0Downside 25-0-0-0-0-0-0-0-0-0-0Prepaid and Other Current Assets (% of sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %Current LiabilitiesDays Payable Outstanding (DPO)-0-0-0-0-0-0-0-0-0-0Base1-0-0-0-0-0-0-0-0-0-0Upside2-0-0-0-0-0-0-0-0-0-0Management3-0-0-0-0-0-0-0-0-0-0Downside 14-0-0-0-0-0-0-0-0-0-0Downside 25-0-0-0-0-0-0-0-0-0-0Accrued Liabilities (% of sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %Other Current Liabilities (% of sales)- %- %- %- %- %- %- %- %- %- %Base1- %- %- %- %- %- %- %- %- %- %Upside2- %- %- %- %- %- %- %- %- %- %Management3- %- %- %- %- %- %- %- %- %- %Downside 14- %- %- %- %- %- %- %- %- %- %Downside 25- %- %- %- %- %- %- %- %- %- %

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