Krause Fund Research Spring 2015 Healthcare Recommendation: SELL Analysts Alex Knight Alex-Knight@uiowa.edu

Imran Hasan Imran-Hasan@uiowa.edu

Company Overview Mylan Inc., is a leading global pharmaceutical company that develops and manufactures generic and specialty pharmaceuticals worldwidevii. Operating in 140 countries, Mylan boasts a portfolio of 1,300 products as well as more than 2,100 products pending regulatory approval. During fiscal year 2014, Mylan recorded earnings per share of $2.63, up 64.38% year over year. Stock Performance Highlights 52 week High $72.62 52 week Low $44.80 Beta Value 1.32 Average Daily Volume 6.89 m Share Highlights Market Capitalization $25.75 b Shares Outstanding 373 m Book Value per share $8.77 EPS 2014 $2.50 P/E Ratio 64.52 Dividend Yield 0% Dividend Payout Ratio 0% Company Performance Highlights ROA 5.87% ROE 22.67% Sales $7.72 b Financial Ratios Current Ratio 1.28 Debt to Equity 4.15 Gross Margin 47.5% Asset Turnover Ratio 0.49

Mylan Inc. (NASDAQ: MYL)

April 17, 2015

Current Price $69.82 Target Price $68.10

The Age of Generics

• Aging demographic will continue to age and the need for health care will never go away. • Medicare enrollment is increasing, government spending is decreasing. Ideal environment for generic pharmaceuticals. • 2014 was the largest year ever for biopharma M&A deals, combining for over $200 billion. The generic firms are trying to bridge the gap between them and big pharma. • Mylan’s specialty segment growth has increased 28.8% and 19.9% in 2013 and 2014, respectively.

• Mylan acquired Famy Care in Q1 2015 to further expand into India and women’s health care.

• Mylan’s marginal tax rate drops to 21% as they are now officially incorporated abroad and that trend looks to continue.

One Year Stock Performance vs. S&P 500

Source: Thumbchartsxxi

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Investment Thesis

Through our thorough research and creation of multiple valuation models, we have determined the intrinsic price per share of Mylan to be $68.10. Our valuation model suggests that Mylan is currently overvalued by 2.53% and warrants a SELL recommendation. In Q1 2015 Mylan announced the acquisition of Famy Care, a women’s health company in India and effectively lowered their tax rate to 21% by officially incorporating abroad. Mylan boasts a portfolio of 1,300 pharmaceutical products as well as 2,100 drugs in regulatory phases in 140 countries worldwide.

Economic Outlook Our team has identified four macroeconomic factors that are crucial for the future growth of Mylan. These economic drivers are Gross Domestic Product, Interest Rates, Demographics, and Government Regulation & Legislation.

Gross Domestic Product

Gross Domestic Product (GDP) is the global standard for assessing the state of a nation’s economy and represents the total dollar value of all goods and services produced by that country in a given time period adjusted for price changes. The health care sector currently has the largest single share of the economy at 17.4% of GDP and is expected to outpace the GDP growth by over 1% annually due to increased direct investment in the sector and an aging demographici. Additionally, the health care sector is defensive to economic sensitivity as the need for health care will never go away, making it a favorable choice for investment in times of stagnant economic growth. The chart below shows a one year comparison of the health care sector performance against the S&P 500. Even with dismal economic growth, the health care sector clearly outperforms.

Source: Fidelityxxii As reports show GDP growth in Q4 2014 slowed to 2.2%, our team believes GDP growth will continue to lag in the short term to 2% in Q1 2015ii. We attribute this halted growth to the strong USD which we anticipate to decrease total US exports as consumers continue to save.

Interest Rates

Since the start of 2015, the rate for a 10-Yr US Treasury bill has hovered around the 2.0% mark, closing at 1.87% on 4/17/2015iii.With the Fed recently ending their Quantitative Easing, it appears that there may be a hike in interest rates, however we do not foresee that happening until next year Q1 because of missed inflation reportsiv

U.S. 10 Year Treasury Yield

Source: CNBCxii Our team believes the 10-Yr rate will reach the 2.0% mark again by FYE 2015 and could reach 3.85% within three years. Corporate bond yields tied to Treasury yield will also increase resulting in an increased cost of borrowing. Firms within the health care sector, specifically pharmaceutical companies, heavily rely on debt to finance their operations. Mylan has taken advantage of this low interest rate period and has successfully

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implemented several debt offerings, where major competitors such as Actavis and Teva Pharmaceuticals have relied more on equity financing and will face higher costs of debt in the future.

Demographics

The aging population in the United States will play an important role in the Healthcare sector as more baby boomers continue to reach retirement age and qualify for Medicare. Below is the most recent enrollment demographic from the Centers for Medicare and Medicaid Services. The 52 million number is expected to increase rapidly, generating even more demand for medical services.

Source: Center for Medicare and Medicaid Servicesv

As an increasingly large amount of people qualify for government subsidized health care, even more money will be spent in that sector, which was estimated to grow to nearly 4 trillion in fiscal year 2014v. Our team believes that the number of US citizens aged 65+ will amount to 35 million in one year and grow to 51 million within 2-3 years. We see a huge opportunity for generic pharmaceutical companies, like Mylan, to seize increased market share as the government will seek the most cost-effective treatments.

Government Regulation & Legislation

The government plays a large role in the health care fields, especially in regards to health care

coverage. As noted above, Medicare enrollment has been increasing yoy with it expected to further grow in 2015 and beyond. As Medicare and Medicaid enrollment increases, it is important to note that the corresponding Medicare Sustainable Growth Rate (SGR) is decreasing. According to CMS.gov, the SGR is expected to be -13.7%, the lowest since its implementation in 1997vi. The decreasing SGR represents that the Medicaid program is cutting back on its budget and that they are expecting healthcare fees to decrease going forward. We believe that this will cause Medicaid reimbursement rates to fall to accommodate the growing enrollment. Another thing to look at is how the passage of the Affordable Care Act has opened up opportunities for various new streams of income. The new revenue streams are largely comprised of Americans that previously opted to not receive health care coverage and other patients that received care, but did not pay. The below graph shows the uninsured rate among adults since 2009. Since the passage of the ACA, we have seen the rate fall to a record low 11.9% during Q1 2015vii.

Source: Obamacarefacts.comvii It is also interesting to note that in the peak years leading up to the recession in 2008, the uninsured rate hovered between 14-15%, much higher than the number we are faced with nowvii. In 2-3 years we predict the ACA will enroll 35 million Americans leaving only 3-4% of the population uninsured. The growth in enrollment will be due to increased tax penalties and pull back on state

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medical insurance programs that currently help the poor. As Medicare enrollment continues to increase and the SGR continues to decrease, we believe the government will look to generic pharmaceutical companies for low-cost health care solutions.

Capital Markets Outlook

Our team believes that the current economic conditions strongly favor investment in the health care sector. As GDP continues to lag in the short-term, the health care sector provides a rare opportunity to outpace growth and outperform the general consensus. Moreover, an aging demographic coupled with aggressive health care reform warrants investment in pharmaceutical companies, specifically generic firms that can provide the low-cost remedies the government will be seeking for years to come.

Industry Analysis

The pharmaceutical industry is made up of companies that design and manufacture medicinal and pharmaceutical products in various forms to treat a variety of ailments. The pharmaceutical industry is large and extremely competitive, and can be segmented into two sub-industries: generic and specialty pharmaceuticals. High R&D costs and limited available market share often deter new firms from making an impact in the pharmaceutical industry. We are going to focus on the generic side of the pharmaceutical industry as that made up 84% of total revenues for Mylan in 2014viii. Although generic firms are not able to achieve as high of profit margins as specialty firms, they save on the extensive R&D costs, maintain low SG&A expenses and can generate high levels of return on invested capitalviii.

Recent Developments & Industry Trends

Our group has identified three major trends that we deem to be most influential in driving future growth for Mylan and the growth of the generic pharmaceutical industry as a whole. These trends are the patent cliff of major specialty drugs, the

emergence of biosimilars in everyday life, and the surge of innovation and robust R&D pipelines.

Patent Cliff In recent years, the generic pharmaceutical industry has seen a pressure towards increased innovation as the patent cliff continues to press on. Big-pharma stands to lose a combined $188 billion as many top drugs continue to lose their patent exclusivityix. Once drugs lose patent protection, lower priced generics can consume 80% of all salesx. This provides a great opportunity for generic firms to increase revenues and grab existing market share. Biosimilars New legislation in the United States will allow generic versions of biological drugs called Biosimilars. This creates the possibility for an entirely new revenue stream for generic firms globally. Our team believes that biosimilars will soon dominate the marketplace as the Patient Protection and Affordable Care Act created an abbreviated licensure pathway for biosimilar drugsxi. One key barrier to entry in emerging markets is affordability of medicines, and because of this reason generics tend to perform better. With the high anticipated growth in emerging markets, coupled with the increasing demand for low cost generics domestically (particularly with the increase in imports expected due to the strengthening of the dollar) generics have growth prospects on multiple fronts. Innovation Innovation plays a large role in the direction of the pharmaceutical industry from two different angles. One of which is the government’s appetite for innovation and another is the amount of research and development that is currently being spent. The government has shown that they are highly in favor of drug innovation. The FDA Safety and Innovation Act of 2012 created a new designation which allowed drugs to be labeled as a “breakthrough” therapyxiii. Through this process drugs can enter an accelerated process if they represent significant advances over current treatments. Research and Development in large pharma companies has seen modest growth at 2.4% as we continue to see cost constraintsxiii. Even though growth is modest we have seen a

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stronger pipeline in comparison to last year. The current value of the pipeline is up 46% from last year to 418.5bnxiii.

Markets and Competition

The current climate of the pharmaceutical industry is extremely competitive, with many firms vying for their chance to gain market share and earn their fortune. The generic sub-industry is very saturated, but is dominated by three firms; Actavis, Teva Pharmaceuticals, and Mylan, with global generic market shares of 33.51%, 17.12%, and 9.33% respectivelyviii. The below graph displays the market share make-up of the generic pharmaceutical industry in 2014.

Source: Factsetviii The main means for competition in the generic pharmaceutical sub-industry are government barriers to entry, high drug regulatory fees, research and development costs, and maintaining a robust drug pipeline. Our team believes that as Mylan is already positioned as a leader in the industry coupled with increasing economies of scale and favorable economic conditions, Mylan could reach 12% total global market share by FYE2015. As we looked to compare Mylan relative to their peers, we added in three large competitors from specialty pharmaceuticals as Mylan has a growing presence in that sub-industry as well. The below table shows Mylan’s relative position.

Source: Yahoo! Financexv 4/17/2015 Over the last few years, Mylan has emerged as a leader in the global generic pharmaceutical industry. They have EPS and forward P/E right in line with their much larger competitors and are constantly looking to grow and add value organically, but also from strategic M&A moves. We believe that Mylan differentiates themselves in their complete access to active pharmaceutical ingredients (API). Direct access to API makes Mylan one of only two global generics manufacturers with a comprehensive, vertically integrated supply chainxx. Through the use and potential sales of API, we expect immense growth in emerging markets, especially in Africa with the development of Antiretrovirals, (by Mylan subsidiary Mylan Laboratories Ltd.) to treat the symptoms of HIV/AIDS where there is currently no generic form available.

Key Investment Positives

Though we believe the pharmaceutical industry is entering the mature stage of the industry life cycle there are a few key investment positives that firms, if positioned correctly, can take advantage of. For generic pharmaceutical companies patent expirations will continue and the demand for generics will continue to grow. Popular drugs such as Abilify (schizophrenia), Copaxone (multiple sclerosis), and Gleevec (chronic myeloid leukemia) will all lose their patent protection in 2015, as well as Humira (Rheumatoid Arthritis) and Crestor (High

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Cholesterol) in 2016, and Viagra (Erectile Dysfunction) in 2020ix. Favorable health care reform will promote industry growth, particularly for the generic firms. The Affordable Care Act implemented changes in generic drug approval, Medicare Part D discounts, and a 12-year patent protection period on biologic drugsxiv. The increase in costs for firms should be manageable and the larger pool of consumers covered by health insurance should offset the costs. Also, President Obama’s 2015 budget calls for lowering the patent protection period on biologics from 12 years to 7, opening up the doors for low cost generics to enter the market more quicklyxiv. Although the pharmaceutical industry as a whole is in the mature stage of the industry life cycle (particularly branded firms), we believe the generic manufacturing sub-industry is in the growth stage, with the industries contribution to the economy in the ten years to 2019 averaging an annual growth rate of 6.4%, significantly higher than the projected GDP growth rate of 2.5% over that same periodxiii.

Company Analysis

Mylan is a leading global pharmaceutical company that boasts a robust R&D product pipeline as well as a portfolio of over 1300 manufactured drugsxvi. Mylan operates within both the generic and specialty segments of the pharmaceutical industry. The generics segment primarily provides generic or branded generic pharmaceuticals as well as active pharmaceutical ingredients (APIs), whereas the specialty segment manufactures and sells branded specialty injectable and nebulized products including the EpiPen Auto-Injector for severe allergic reactions. The below chart displays Mylan Revenue Segments in 2014.

Source: Factsetviii

Financial Summary

In addition to the 1300 drugs already developed, Mylan boasts approximately 2100 additional pharmaceutical products pending regulatory approval around the worldxvi. In its most recent annual report Mylan indicated that for the fiscal year ended December 31, 2014, Mylan reported total revenues of $7.7 billion, compared to $6.9 billion for fiscal year ending December 31, 2013. This represents an increase in revenues of $810 million, or 11.37%xvii. This revenue growth is stronger than the 1.7% growth experienced in 2013. Even despite increased purchase related amortization and other costs associated with Mylan’s acquisition of Agila Specialties Private Limited in late 2013, gross margin increased to 45.7% in 2014, up from 44.0% a year earlierxvii. We believe the increase in yoy gross profit percentage could be a result of the growing portion of sales attributed to Mylan’s specialty business, which tend to carry higher margins. Following management’s guidance, we see Mylan experiencing similar growth of 12% in FY2015. Recently, Mylan has made a number of acquisitions including Agila (2013), Abbott’s non-US developed markets specialty and generics division, and a portion of Mumbai based Famy Care’s female health care business. As a result, Mylan is strengthening its growth profile, particularly outside of the United States. With the Abbott acquisition Mylan further diversifies its commercial profile, receiving 100 new generic and branded pharmaceutical productsxviii. Our team sees the true added benefit of the acquisition is Mylan’s eventual transition into Mylan N.V., effective starting FY2015, which becomes the

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new parent company in an effort to reduce its effective corporate tax rate. The merger will bring the marginal tax rate down from 25% to 21% this year and then into the teens in 3-5 yearsxviii. The below graph displays how much Mylan will save with a lower tax rate over the next three years using our forecasted revenues.

Source: Forecast This move helps explain Mylan’s subsequent acquisition in Famy Care as they continue to expand abroad with a lower tax rate. However, if they were ever to repatriate corporate earnings back into the United States, say to pay dividends, they would need to pay taxes to make up the difference in corporate tax rates between countries. Last year was a milestone year for the pharmaceutical industry as mergers and acquisitions exceeded $200 billion, over twice the annual deal volume seen in the last decadexxiii. Our team thinks that Mylan needs to use its newfound tax advantages to seek strategic mergers and acquisitions that not only add revenue growth, but also build on earnings. By doing this is will give them a leg up and one step closer to competing with the pharma giants. The graph below shows how 2014 was the year of mergers and acquisitions for generic and specialty firms, bridging the gap to big pharma.

Source: EY Firepower Fireworksxxiii Products Mylan’s product lines embody five broad categories: transdermal patches, high-potency formulations, injectables, controlled-release, and respiratory productsxvi. Although known for generics, Mylan is the producer of EpiPen Auto-Injector for allergy relief, which holds the most market share for treatments in severe allergic reactions and is poised to be a billion dollar a year brand for Mylan in FY2015xiv. The specialty segment has seen growth of 24.8% and 19.9% in 2013 and 2014, respectively. The below chart shows Mylan product segment revenue categorized by the type of disease category treated.

Source: Mylanxvii Moving forward, we see continued strong growth in the generics segment, but are encouraged by the spark in the specialty brands. We believe that further expanding the specialty segment through strategic mergers and acquisitions will position Mylan for high levels of profitability.

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Valuation Analysis

Throughout the duration of our coverage of Mylan, we conducted thorough research and constructed multiple valuation models to help us better understand Mylan. We calculated the drivers that explained what best spurs organic growth for Mylan. From there we forecasted until we felt Mylan was in steady state growth, while also considering all potential economic and industrial threats and opportunities.

Key Assumptions Revenue Decomposition We segmented our revenues by the category of disease it treated. We felt it would be beneficial to see a layout of the various drug segments to track growth between years. For the first forecast, we followed management’s guidance. We also broke down the various disease segments as a percentage of total revenue. Increased legislation and attempting to reduce the overall cost of health care in the United States could fare well for Mylan and other generic pharmaceutical companies as generics offer a low cost alternative to addressing illnesses. This can also be a double edged sword, however, as the favorable disposition towards pharmaceuticals may stagnate innovation, resulting in less blockbuster drugs for generic companies to replicate. CV Growth Rate We determined the CV Growth Rate to be 3.75% after taking all economic factors into account. With our prediction for the health care sector to outgrow the rate of GDP by 1%. We see Mylan growing faster in the short-term as the demand for health care will grow almost exponentially, but we believe they will not sustain that growth forever. When real GDP returns to 3-4% Mylan will still be growing comfortably. Margins The margins were a little more difficult to forecast, as our team believes that the government’s desire for low cost health care could

diminish margins, even for generic firms. We calculated the 5-Yr average from historical data and used that figure to forecast out until steady state. With low R&D expenditures and a favorable environment for generic pharmaceuticals, our team is confident that Mylan will be able to maintain margins of 48% through steady state. Payout Policy Our team felt very confident that Mylan will not be paying a cash dividend anytime soon. In 2007 to takeover Merck Generics in Germany, Mylan rescinded their dividend and took on a very heavy burden of debt, one which they are still paying back, with little cash for dividendsxxiv. Discounted Cash Flow and Economic Profit Model Our team is confident in the ability of both models to accurately find the intrinsic value for a share of Mylan. Both models found the price target to be $68.10, which is overweight by 2.53%. We believe that using the discounted cash flows and economic profit models offered a more precise target than the dividend discount model as Mylan does not pay any dividends.

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Sensitivity Analyses

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I. National Health Expenditure Projections 2013-2023

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2013.pdf II. News Release: Gross Domestic Product https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm III. U.S. Department of Treasury – Daily

Yield Curve Rates http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2015 IV. Fed’s Rosengren: Conditions for Rate

Hike not yet met http://www.reuters.com/article/2015/04/16/us-usa-fed-rosengren-idUSKBN0N726Q20150416 V. Center for Medicare and Medicaid

Services: 2014 CMS Statistics http://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/cms-statistics-reference-booklet/downloads/cms_stats_2014_final.pdf#tableiii1 VI. Estimated Sustainable Growth Rate and

Conversion Factor, for Medicare Payments to Physicians in 2015

http://www.cms.gov/medicare/medicare-fee-for-service-payment/sustainablegratesconfact/downloads/SGR2015f.pdf VII. Obamacare Enrollment Numbers http://obamacarefacts.com/sign-ups/obamacare-enrollment-numbers/

VIII. Factset, Company Snapshot (NASDAQ: MYL)

IX. Patent Cliff: Lethal Blow to Big Pharma

or Just a Tiny Bump

http://www.bidnessetc.com/29932-patent-cliff-a-lethal-blow-to-big-pharma-or-just-a-tiny-bump/ X. Drug Firms Face Billions in Losses as

Patents End http://www.nytimes.com/2011/03/07/business/07drug.html?pagewanted=all6&_r=0 XI. State Laws and Legislation Related to

Biologic Medications and the Substitution of Biosimilars

http://www.ncsl.org/research/health/state-laws-and-legislation-related-to-biologic-medications-and-substitution-of-biosimilars.aspx XII. U.S. 10-YR Treasury, 1 Year Snapshot

http://data.cnbc.com/quotes/US10Y/tab/2 XIII. EvaluatePharma: World Preview 2014,

Outlook to 2020 http://info.evaluategroup.com/rs/evaluatepharmaltd/images/EP240614.pdf XIV. Obamacare will bring Drug Industry $35 Billion in Profits http://www.forbes.com/sites/brucejapsen/2013/05/25/obamacare-will-bring-drug-industry-35-billion-in-profits/ XV. Yahoo! Finance, Personal Portfolio XVI. Mylan Website: About Us http://www.mylan.com/company/about-us XVII. Mylan 2014 10-K Report

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XVIII. Mylan Inversion Deal Completed http://www.bizjournals.com/pittsburgh/news/2015/02/27/mylan-inversion-deal-completed.html XIX. ARGUS Analyst Report (Mylan): John Eade & Nicolay Nielsen XX. Mylan Website: Active Pharmaceutical Ingredients http://www.mylan.com/businesses/active-pharmaceutical-ingredients XXI. Thumbcharts: MYL vs S&P 500 comparison http://www.thumbcharts.com/100838/MYL-vs-S-P-500 XXII. Fidelity Sectors and Industry Overviews https://eresearch.fidelity.com/eresearch/markets_sectors/sectors/sectors_in_market.jhtml XXIII. EY: Firepower Fireworks: Focus, Scale and Growth drive explosive M&A http://www.ey.com/Publication/vwLUAssets/EY-firepower-works/$FILE/EY-firepower-fireworks.pdf XXIV. Mylan CEO says Firm Unlikely to Resume Dividend http://www.post-gazette.com/business/businessnews/2007/10/04/Mylan-CEO-says-firm-unlikely-to-resume-dividend/stories/200710040315

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Important Disclaimer This report was created by students enrolled in the Applied Equity Valuation (6F:112) class at the University of Iowa. The report was originally created to offer an internal investment recommendation for the University of Iowa Krause Fund and its advisory board. The report also provides potential employers and other interested parties an example of the students’ skills, knowledge and abilities. Members of the Krause Fund are not registered investment advisors, brokers or officially licensed financial professionals. The investment advice contained in this report does not represent an offer or solicitation to buy or sell any of the securities mentioned. Unless otherwise noted, facts and figures included in this report are from publicly available sources. This report is not a complete compilation of data, and its accuracy is not guaranteed. From time to time, the University of Iowa, its faculty, staff, students, or the Krause Fund may hold a financial interest in the companies mentioned in this report.

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Mylan Inc.Key Assumptions of Valuation Model

Ticker Symbol MYLCurrent Share Price $69.82Current Model Date 4/17/2015Fiscal Year End Dec. 31

Pre-Tax Cost of Debt 4.33%Beta 1.322Risk-Free Rate 2.51%Equity Risk Premium 4.62%CV Growth of NOPLAT 3.00%CV Growth of EPS 3.75%Current Dividend Yield 0%Marginal Tax Rate 21%Effective Tax RateWACC 7.32%CV ROIC 13.10%

I/S 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Revenue Growth 1.115 1.07 1.060 1.06 1.05 1.04 1.0425Cost of Sales (Exluding Dep & Amort) 0.46 0.45 0.45 0.45 0.45 0.45 0.455Depreciation (as % of Beg. Net PP&E) 0.12 0.12 0.12 0.12 0.12 0.12 0.12Amortization (as % of Beg. Net Intangible Assets) 0.16 0.16 0.16 0.16 0.16 0.16 0.16R&D 0.07 0.07 0.07 0.07 0.07 0.07 0.07SG&A 0.2 0.2 0.2 0.2 0.2 0.2 0.2Interest Expense (% of Total Beg. Debt) 0.0433 0.0433 0.0433 0.0433 0.0433 0.0433 0.0433 Other Income (Expense), net (5-yr Avg + Est Growth x Cash) 1.015 1.015 1.015 1.02 1.02 1.02 1.02Income Tax Provision = Marginal Tax Rate 20% 20% 20% 19% 19% 19% 19%B/SCash/Cash EquivalentsAccounts Receivable (% of Sales, 5-yr Avg) 0.27 0.27 0.27 0.27 0.27 0.27 0.27Inventories (% of Sales) = 22% 0.22 0.22 0.22 0.22 0.22 0.22 0.22Deferred Income Tax Benefit (Current) (Avg 11% Growth) 1.07 1.07 1.07 1.07 1.065 1.065 1.06Deferred Income Tax Benefit (Long-term) (Avg 44% Growth) 1.1 1.1 1.1 1.1 1.09 1.08 1.08Deferred Income Tax Liability (Current) (% of Income Tax Provision) 0.0075 0.0075 0.0075 0.0075 0.0075 0.0075 0.0075Deferred Income Tax Liability (Long-term) (% of Income Tax Provision) 0.9 0.9 0.9 0.9 0.9 0.9 0.9Prepaid Expenses and Other Current Assets 0.25 0.25 0.25 0.25 0.25 0.25 0.25Other Assets = % of Beg Total Assets, 4-yr Avg 0.06 0.06 0.06 0.06 0.06 0.06 0.06PP&E (% of Sales, 5-yr Avg) 0.2239 0.2239 0.2239 0.2239 0.2239 0.2239 0.2239Intangible Assets 1.05 1.05 1.065 1.06 1.06 1.05 1.05Notes Payable (Avg = 5%) 0.04 0.05 0.05 0.06 0.06 0.05 0.05Trade Accounts Payable (% of COGS (ex. Dep&Amort), 5-yr Avg) 0.24 0.24 0.24 0.24 0.24 0.24 0.24Short-term Borrowings (Avg % of Total Borrowings) 0.04 0.04 0.04 0.04 0.04 0.04 0.04Current Portion of Long-term Debt (Avg % of Total Long-term Debt) 0.13 0.13 0.13 0.13 0.13 0.13 0.13Income Taxes Payable (% of Income Tax Provision) 0.2 0.2 0.2 0.2 0.2 0.2 0.2Other Current Liabilities (Avg % of Sales) 0.175 0.175 0.175 0.175 0.175 0.175 0.175Long-term Debt (% of Beg Total Assets) 0.39 0.38 0.38 0.38 0.38 0.38 0.38Other Long Term Obligations (Avg % of Sales) 0.1763 0.1763 0.1763 0.1763 0.1763 0.1763 0.1763Treasury Stock (No repurchases in most recent year so grow by ~4%) 1.08 1.08 1.08 1.08 1.08 1.08 1.08Accumulated Other Comprehensive Income (Avg converging to 0) 0.95 0.95 0.95 0.95 0.95 0.95 0.95Operating Leases (% of PP&E) 0.0863 0.0863 0.0863 0.0863 0.0863 0.0863 0.0863

Mylan Inc.Revenue Decomposition

Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Revenues

Net revenues 6,750,246 6,856,606 7,646,500 8,545,381 9,143,558 9,692,171 10,273,701 10,787,387 11,218,882 11,695,684 Other revenues 45,864 52,537 73,100 61,973 66,311 70,290 74,507 78,232 81,362 84,820

Total revenues 6,796,110 6,909,143 7,719,600 8,607,354 9,209,869 9,762,461 10,348,209 10,865,619 11,300,244 11,780,504 Allergy 741,487 850,222 1,017,500 1,045,139 1,118,299 1,185,397 1,256,521 1,319,347 1,372,121 1,430,436 Growth (%) 55.45% 14.66% 19.67% 2.72% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Anti-Infectives 1,034,332 1,080,334 1,264,400 1,356,285 1,451,224 1,538,298 1,630,596 1,712,126 1,780,611 1,856,287 Growth (%) 2.89% 4.45% 17.04% 7.27% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Cardiovascular 1,156,348 1,162,280 955,900 1,326,894 1,419,776 1,504,963 1,595,261 1,675,024 1,742,025 1,816,061 Growth (%) 11.44% 0.51% -17.76% 38.81% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Central Nervous System 1,473,928 1,393,339 1,318,600 1,692,008 1,810,448 1,919,075 2,034,220 2,135,931 2,221,368 2,315,776 Growth (%) 21.41% -5.47% -5.36% 28.32% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Dermatological 157,296 247,881 233,800 256,448 274,400 290,864 308,315 323,731 336,680 350,989 Growth (%) 9.41% 57.59% -5.68% 9.69% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Endocrine and Metabolic 645,936 568,337 778,700 798,757 854,670 905,950 960,307 1,008,323 1,048,656 1,093,223 Growth (%) 20.65% -12.01% 37.01% 2.58% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Gastrointestinal 418,934 365,849 344,600 457,137 489,136 518,485 549,594 577,073 600,156 625,663 Growth (%) -14.97% -12.67% -5.81% 32.66% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Respiratory System 229,249 259,653 252,300 298,593 319,494 338,664 358,984 376,933 392,011 408,671 Growth (%) -8.55% 13.26% -2.83% 18.35% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Other 892,736 928,711 1,490,700 1,317,846 1,410,095 1,494,701 1,584,383 1,663,602 1,730,146 1,803,677 Growth (%) -6.01% 4.03% 60.51% -11.60% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%Total Net revenues 6,750,246 6,856,606 7,646,500 8,545,381 9,143,558 9,692,171 10,273,701 10,787,387 11,218,882 11,695,684 Growth (%) 10.55% 1.58% 11.52% 11.76% 7.00% 6.00% 6.00% 5.00% 4.00% 4.25%

Percentage of Total RevenueAllergy 10.98% 12.40% 13.31% 12.23% 12.65% 12.73% 12.53% 12.64% 12.63% 12.60%Anti-infectives 15.32% 15.76% 16.54% 15.87% 16.05% 16.15% 16.03% 16.08% 16.09% 16.06%Cardiovascular 17.13% 16.95% 12.50% 15.53% 14.99% 14.34% 14.95% 14.76% 14.69% 14.80%Central Nervous System 21.84% 20.32% 17.24% 19.80% 19.12% 18.72% 19.21% 19.02% 18.99% 19.07%Dermatological 2.33% 3.62% 3.06% 3.00% 3.22% 3.09% 3.11% 3.14% 3.11% 3.12%Endocrine and Metabolic 9.57% 8.29% 10.18% 9.35% 9.27% 9.60% 9.41% 9.43% 9.48% 9.44%Gastrointestinal 6.21% 5.34% 4.51% 5.35% 5.06% 4.97% 5.13% 5.06% 5.05% 5.08%Respiratory System 3.40% 3.79% 3.30% 3.49% 3.53% 3.44% 3.49% 3.48% 3.47% 3.48%Other 13.23% 13.54% 19.50% 15.42% 16.15% 17.02% 16.20% 16.46% 16.56% 16.41%

Mylan Inc.Income Statement(In Thousands except per share amounts)Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Revenues

Net revenues 6,750,246 6,856,606 7,646,500 8,545,381 9,143,558 9,692,171 10,273,701 10,787,387 11,218,882 11,695,684 Other revenues 45,864 52,537 73,100 61,973 66,311 70,290 74,507 78,232 81,362 84,820

Total revenues 6,796,110 6,909,143 7,719,600 8,607,354 9,209,869 9,762,461 10,348,209 10,865,619 11,300,244 11,780,504 Cost of sales 3,341,202 3,352,803 3,625,000 3,959,383 4,144,441 4,393,107 4,656,694 4,889,529 5,085,110 5,360,129 Amortization 386,400 363,700 393,800 375,536 394,313 414,028 440,940 467,397 495,441 520,213 Depreciation 160,204 152,297 172,800 214,284 231,262 247,451 262,298 278,036 291,937 303,615

Gross profit 2,908,304 3,040,343 3,528,000 4,058,151 4,439,853 4,707,874 4,988,277 5,230,658 5,427,756 5,596,547 Operating Expenses

Research & development expense 401,341 507,823 581,800 602,515 644,691 683,372 724,375 760,593 791,017 824,635 Selling, general & administrative expense 1,400,747 1,411,629 1,625,700 1,721,471 1,841,974 1,952,492 2,069,642 2,173,124 2,260,049 2,356,101

Total operating expenses 1,802,088 1,919,452 2,207,500 2,323,986 2,486,665 2,635,864 2,794,016 2,933,717 3,051,066 3,180,736 Earnings (loss) from operations 1,106,216 1,120,891 1,320,500 1,734,166 1,953,188 2,072,010 2,194,260 2,296,941 2,376,690 2,415,811 Non-Operating Expenses

Interest expense 308,699 313,336 333,200 369,691 310,804 313,743 328,524 344,575 360,769 375,709 Other expense (income), net (3,500) 74,900 (35,100) 7,524 7,637 7,752 7,907 8,065 8,226 8,391

Earnings (loss) before income taxes & noncontrolling interest 801,017 732,655 1,022,400 1,356,950 1,634,747 1,750,515 1,857,830 1,944,301 2,007,696 2,031,712 Income tax provision (benefit) 161,145 120,808 41,400 271,390 326,949 350,103 343,699 359,696 371,424 375,867

Net earnings (loss) 639,872 611,847 981,000 1,085,560 1,307,798 1,400,412 1,514,132 1,584,606 1,636,272 1,655,845 Basic EPS 1.54 1.60 2.63 2.90 3.50 3.75 4.05 4.24 4.38 4.43 Total shares outstanding 415,200 383,300 373,700 373,702 373,705 373,707 373,709 373,712 373,714 373,716 Dividends per share - - - - - - - - - -

Mylan Inc.Balance Sheet(In thousands except share and per share amounts)Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Assets

Current AssetsCash & cash equivalents 349,969 291,293 225,500 83,561 843,404 1,125,898 1,258,135 1,355,845 1,425,679 1,364,360 Accounts receivables, net 1,554,342 1,820,273 2,268,500 2,323,986 2,486,665 2,635,864 2,794,016 2,933,717 3,051,066 3,180,736 Inventories 1,525,242 1,664,693 1,651,400 1,893,618 2,026,171 2,147,741 2,276,606 2,390,436 2,486,054 2,591,711 Deferred income tax benefit 229,348 248,861 345,700 369,899 395,792 423,497 453,142 482,596 513,965 544,803 Prepaid expenses & other current assets 243,816 446,140 2,295,800 2,151,839 2,302,467 2,440,615 2,587,052 2,716,405 2,825,061 2,945,126

Total current assets 3,902,717 4,471,260 6,786,900 6,822,902 8,054,499 8,773,616 9,368,951 9,878,999 10,301,825 10,626,736 Property, plant & equipment, at cost 2,484,011 2,725,776 2,955,800 3,311,571 3,677,736 4,048,912 4,442,359 4,836,243 5,225,493 5,636,638 Less accumulated depreciation 1,086,795 1,062,700 1,170,100 1,384,384 1,615,646 1,863,097 2,125,395 2,403,431 2,695,368 2,998,983 Property, plant & equipment, net 1,397,216 1,663,076 1,785,700 1,927,187 2,062,090 2,185,815 2,316,964 2,432,812 2,530,125 2,637,655 Intangible assets, net 2,224,457 2,517,888 2,347,100 2,464,455 2,587,678 2,755,877 2,921,229 3,096,503 3,251,328 3,413,895 Goodwill 3,515,655 4,288,124 4,049,300 4,049,300 4,049,300 4,049,300 4,049,300 4,049,300 4,049,300 4,049,300Deferred income tax benefit 87,655 77,829 83,400 91,740 100,914 111,005 122,106 133,095 143,743 155,243 Other assets 804,197 2,218,164 834,200 953,196 978,527 1,069,980 1,136,736 1,194,917 1,247,138 1,291,407

Total Assets 11,931,897 15,236,341 15,886,600 16,308,779 17,833,007 18,945,594 19,915,286 20,785,627 21,523,458 22,174,236 Liabilities

Current LiabilitiesTrade accounts payable 777,908 1,072,838 905,600 950,252 994,666 1,054,346 1,117,607 1,173,487 1,220,426 1,286,431 Short-term borrowings 298,987 439,797 330,700 276,074 278,684 291,813 306,071 320,455 333,726 345,199 Income taxes payable 33,731 49,749 160,700 54,278 65,390 70,021 68,740 71,939 74,285 75,173 Current portion of long-term debt & other long-term obligations 98,048 3,636 2,474,400 794,018 801,526 839,286 880,293 921,663 959,831 992,830 Deferred income tax liability 1,283 787 200 2,035 2,452 2,626 2,578 2,698 2,786 2,819 Other current liabilities 983,546 1,389,263 1,434,100 1,506,287 1,611,727 1,708,431 1,810,936 1,901,483 1,977,543 2,061,588

Total current liabilities 2,193,503 2,956,070 5,305,700 3,582,944 3,754,445 3,966,523 4,186,225 4,391,726 4,568,597 4,764,041 Long-term debt 5,337,196 7,586,459 5,732,800 6,107,829 6,165,583 6,456,049 6,771,485 7,089,718 7,383,317 7,637,156 Other long-term liabilities 771,111 1,265,375 1,336,700 1,517,477 1,623,700 1,721,122 1,824,389 1,915,609 1,992,233 2,076,903 Deferred income tax liability 274,259 468,530 235,400 211,860 190,674 171,607 154,446 139,001 125,101 112,591

Total Liabilities 8,576,069 12,276,434 12,610,600 11,420,109 11,734,402 12,315,300 12,936,544 13,536,053 14,069,248 14,590,691 Equity

Common stock 4,256,578 4,375,667 4,486,100 4,562,994 4,639,888 4,716,782 4,793,676 4,870,570 4,947,464 5,024,358 Retained earnings 2,061,370 2,685,081 3,614,500 4,391,444 5,365,937 6,406,379 7,531,743 8,696,480 9,879,294 11,045,405 Accumulated other comprehensive earnings (loss) (86,498) (240,131) (987,000) (216,952) (206,105) (195,800) (186,010) (176,709) (167,874) (159,480)Total shareholder's equity before treasury stock 6,231,450 6,820,617 7,113,600 8,737,486 9,799,720 10,927,362 12,139,410 13,390,341 14,658,885 15,910,283 Noncontrolling interest 15,110 18,090 20,100 20,100 20,100 20,100 20,100 20,100 20,100 20,100 Less treasury stock - at cost 2,890,732 3,878,800 3,857,700 4,166,316 4,499,621 4,859,591 5,248,358 5,668,227 6,121,685 6,611,420

Total equity 3,355,828 2,959,907 3,276,000 4,591,270 5,320,199 6,087,871 6,911,152 7,742,214 8,557,300 9,318,963 Total equity and liabilities 11,931,897 15,236,341 15,886,600 16,308,779 17,833,007 18,945,594 19,915,286 20,785,627 21,523,459 22,174,235

Mylan Inc.Cash Flow Statement(In thousands of dollars)Fiscal Years Ending Dec. 31 2012 2013 2014Operating ActivitiesNet Income (loss) 639,872 611,847 981,000

Depreciation 160,204 152,297 172,800 Amortization 386,400 363,700 393,800 Stock-based compensation expense 42,579 46,971 66,000 Net earnings from equity method investees - - 91,400 Change in estimated sales allowances 265,532 345,750 707,900 Deferred income tax expense (benefit) (108,930) (87,133) (315,200) Impairment loss on goodwill - - - Other non-cash items 235,985 161,720 139,100 Litigation settlements, net (3,133) (14,639) 7,400

Changes in Operating Assets and Liabilities:Accounts receivable (354,844) (553,525) (939,100) Inventories (172,020) (157,056) (147,500) Trade accounts payable 81,429 137,212 (300) Income taxes payable (49,989) (1,107) 78,500 Deferred revenue (19,765) (151) - Other operating assets and liabilities, net (157,364) 85,992 (173,100)

Cash flows from operating activities 945,956 1,091,878 1,062,700 Investing Activities

Capital expenditures (305,325) (334,580) (325,300) Change in restricted cash 6,972 (228,031) (5,100) Cash paid for acquisitions, net - (1,261,853) (50,000) Proceeds from sale of property, plant and equipment 16,338 25,250 8,900 Purchase of marketable securities (9,884) (19,346) (19,900) Proceeds from sale of marketable securities 8,061 10,600 20,200 Other items, net (80,404) (60,854) (429,100)

Cash flow used for investing activities (364,242) (1,868,814) (800,300) Financing Activities

Cash dividends paid - - - Payment of financing fees (7,691) (34,634) (5,800) Cash paid for warrant amendment and exchange - - - Purchase of common stock (999,893) (999,999) - Change in short-term borrowings, net 174,335 141,422 (107,800) Proceeds from issuance of long-term debt 2,043,448 4,974,712 2,235,000 Payment of long-term debt (1,990,796) (3,480,289) (2,295,800) Proceeds from exercise of stock options 143,883 76,172 53,800 Other items,net 25,198 15,530 (146,800)

Cash flows provided (used) in financing activities (611,516) 692,914 (267,400) Effect on cash of changes in exchange rates 1,653 10,661 (12,900)

Cash and cash equivalents at the beginning of the year 375,056 349,969 291,293Cash and cash equivalents at the end of the year 349,969$ 291,293$ 225,500$ Increases (decreases) in cash and cash equivalents (25,087) (58,676) (65,793)

Mylan Inc.Cash Flow Statement(In thousands of dollars)Fiscal Years Ending Dec. 31 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Operating ActivitiesNet Income (loss) 1,085,560 1,307,798 1,400,412 1,514,132 1,584,606 1,636,272 1,655,845

Depreciation 214,284 231,262 247,451 262,298 278,036 291,937 303,615 Amortization 375,536 394,313 414,028 440,940 467,397 495,441 520,213 Deferred income tax expense (benefit) (54,244) (55,836) (56,691) (57,954) (55,768) (55,829) (54,814)

Changes in Operating Assets and Liabilities:Accounts receivable (55,486) (162,679) (149,200) (158,152) (139,701) (117,349) (129,670) Inventories (242,218) (132,553) (121,570) (128,864) (113,830) (95,617) (105,657) Prepaid expenses & other current assets 143,962 (150,629) (138,148) (146,437) (129,353) (108,656) (120,065) Trade accounts payable 44,652 44,414 59,680 63,261 55,880 46,939 66,005 Income taxes payable (106,422) 11,112 4,631 (1,281) 3,199 2,346 889 Other operating assets and liabilities, net (46,809) 80,109 5,250 35,751 32,365 23,839 39,776

Cash flows from operating activities 1,358,816 1,567,311 1,665,843 1,823,693 1,982,831 2,119,323 2,176,135 Investing Activities

Change in PP&E Gross (141,487) (134,903) (123,725) (131,149) (115,848) (97,312) (107,530) Change in intangible assets (492,891) (517,536) (582,227) (606,293) (642,670) (650,266) (682,779)

Cash flow used for investing activities (634,378) (652,439) (705,953) (737,442) (758,519) (747,578) (790,309) Financing Activities

Short-term borrowings (54,626) 2,610 13,129 14,258 14,384 13,271 11,474 Current portion of long-term debt & other long-term obligations (1,680,382) 7,508 37,761 41,007 41,370 38,168 32,999 Long-term debt 375,029 57,754 290,466 315,435 318,233 293,600 253,839 Other long-term obligations 180,777 106,223 97,422 103,267 91,219 76,624 84,670 Issuance of Common Stock 76,894 76,894 76,894 76,894 76,894 76,894 76,894 Repurchase of Common Stock (308,616) (333,305) (359,970) (388,767) (419,869) (453,458) (489,735) Accumulated other comprehensive earnings (loss) 770,048 10,848 10,305 9,790 9,300 8,835 8,394

Cash flows provided (used) in financing activities (640,877) (71,468) 166,007 171,884 131,533 53,934 (21,466)

Cash and cash equivalents at the beginning of the year 225,500 83,561 843,404 1,125,898 1,258,135 1,355,845 1,425,679 Cash and cash equivalents at the end of the year 309,061 926,965 1,969,302 2,384,032 2,613,980 2,781,524 2,790,039 Increases (decreases) in cash and cash equivalents 83,561 843,404 1,125,898 1,258,135 1,355,845 1,425,679 1,364,360

Mylan Inc.Common Size Income Statement

Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Revenues

Net revenues 99.33% 99.24% 99.05% 99.28% 99.28% 99.28% 99.28% 99.28% 99.28% 99.28%Other revenues 0.67% 0.76% 0.95% 0.72% 0.72% 0.72% 0.72% 0.72% 0.72% 0.72%

Total revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%Cost of sales 49.16% 48.53% 46.96% 46.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.50%Amortization 5.69% 5.26% 5.10% 4.36% 4.28% 4.24% 4.26% 4.30% 4.38% 4.42%Depreciation 2.36% 2.20% 2.24% 2.49% 2.51% 2.53% 2.53% 2.56% 2.58% 2.58%

Gross profit 42.79% 44.00% 45.70% 47.15% 48.21% 48.22% 48.20% 48.14% 48.03% 47.51%

Operating ExpensesResearch & development expense 5.91% 7.35% 7.54% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%Selling, general & administrative expense 20.61% 20.43% 21.06% 20.00% 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%

Total operating expenses 26.52% 27.78% 28.60% 27.00% 27.00% 27.00% 27.00% 27.00% 27.00% 27.00%Earnings (loss) from operations 16.28% 16.22% 17.11% 20.15% 21.21% 21.22% 21.20% 21.14% 21.03% 20.51%Non-Operating Expenses

Interest expense 4.54% 4.54% 4.32% 4.30% 3.37% 3.21% 3.17% 3.17% 3.19% 3.19%Other income (expense), net -0.05% 1.08% -0.45% 0.09% 0.08% 0.08% 0.08% 0.07% 0.07% 0.07%

Earnings (loss) before income taxes & noncontrolling interest 11.79% 10.60% 13.24% 15.77% 17.75% 17.93% 17.95% 17.89% 17.77% 17.25%Income tax provision (benefit) 2.37% 1.75% 0.54% 3.15% 3.55% 3.59% 3.32% 3.31% 3.29% 3.19%

Net earnings (loss) 9.42% 8.86% 12.71% 12.61% 14.20% 14.34% 14.63% 14.58% 14.48% 14.06%

Mylan Inc.Common Size Balance Sheet (as % of sales)

Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Assets

Current AssetsCash & cash equivalents 5.18% 4.25% 2.95% 0.98% 9.22% 11.62% 12.25% 12.57% 12.71% 11.67%Accounts receivables, net 23.03% 26.55% 29.67% 27.20% 27.20% 27.20% 27.20% 27.20% 27.20% 27.20%Inventories 22.60% 24.28% 21.60% 22.16% 22.16% 22.16% 22.16% 22.16% 22.16% 22.16%Deferred income tax benefit 3.40% 3.63% 4.52% 4.33% 4.33% 4.37% 4.41% 4.47% 4.58% 4.66%Prepaid expenses & other current assets 3.61% 6.51% 30.02% 25.18% 25.18% 25.18% 25.18% 25.18% 25.18% 25.18%

Total current assets 57.82% 65.21% 88.76% 79.84% 88.09% 90.52% 91.19% 91.58% 91.83% 90.86%Property, plant & equipment, at cost 36.80% 39.75% 38.66% 38.75% 40.22% 41.78% 43.24% 44.83% 46.58% 48.19%Less accumulated depreciation 16.10% 15.50% 15.30% 16.20% 17.67% 19.22% 20.69% 22.28% 24.03% 25.64%Property, plant & equipment, net 20.70% 24.26% 23.35% 22.55% 22.55% 22.55% 22.55% 22.55% 22.55% 22.55%Intangible assets, net 32.95% 36.72% 30.70% 28.84% 28.30% 28.43% 28.43% 28.70% 28.98% 29.19%Goodwill 52.08% 62.54% 52.96% 47.39% 44.29% 41.78% 39.41% 37.54% 36.09% 34.62%Deferred income tax benefit 1.30% 1.14% 1.09% 1.07% 1.10% 1.15% 1.19% 1.23% 1.28% 1.33%Other assets 11.91% 32.35% 10.91% 11.15% 10.70% 11.04% 11.06% 11.08% 11.12% 11.04%

Total Assets 176.76% 222.21% 207.76% 190.85% 195.03% 195.47% 193.85% 192.68% 191.85% 189.59%Liabilities

Current LiabilitiesTrade accounts payable 11.52% 15.65% 11.84% 11.12% 10.88% 10.88% 10.88% 10.88% 10.88% 11.00%Short-term borrowings 4.43% 6.41% 4.32% 3.23% 3.05% 3.01% 2.98% 2.97% 2.97% 2.95%Income taxes payable 0.50% 0.73% 2.10% 0.64% 0.72% 0.72% 0.67% 0.67% 0.66% 0.64%Current portion of long-term debt & other long-term obligations 1.45% 0.05% 32.36% 9.29% 8.77% 8.66% 8.57% 8.54% 8.56% 8.49%Deferred income tax liability 0.02% 0.01% 0.00% 0.02% 0.03% 0.03% 0.03% 0.03% 0.02% 0.02%Other current liabilities 14.57% 20.26% 18.75% 17.63% 17.63% 17.63% 17.63% 17.63% 17.63% 17.63%

Total current liabilities 32.50% 43.11% 69.39% 41.93% 41.06% 40.93% 40.75% 40.71% 40.72% 40.73%Long-term debt 79.07% 110.64% 74.97% 71.48% 67.43% 66.61% 65.91% 65.72% 65.81% 65.30%Other long-term liabilities 11.42% 18.45% 17.48% 17.76% 17.76% 17.76% 17.76% 17.76% 17.76% 17.76%Deferred income tax liability 4.06% 6.83% 3.08% 2.48% 2.09% 1.77% 1.50% 1.29% 1.12% 0.96%

Total LiabilitiesEquity

Common stock 63.06% 63.82% 58.67% 53.40% 50.74% 48.67% 46.66% 45.15% 44.10% 42.96%Retained earnings 30.54% 39.16% 47.27% 51.39% 58.69% 66.10% 73.31% 80.62% 88.06% 94.44%Accumulated other comprehensive earnings (loss) -1.28% -3.50% -12.91% -2.54% -2.25% -2.02% -1.81% -1.64% -1.50% -1.36%Total shareholder's equity before treasury stock 92.31% 99.48% 93.03% 102.25% 107.18% 112.74% 118.16% 124.13% 130.66% 136.04%Noncontrolling interest 0.22% 0.26% 0.26% 0.24% 0.22% 0.21% 0.20% 0.19% 0.18% 0.17%Less treasury stock - at cost 42.82% 56.57% 50.45% 48.76% 49.21% 50.14% 51.09% 52.54% 54.57% 56.53%

Total equity 49.71% 43.17% 42.84% 53.73% 58.19% 62.81% 67.27% 71.77% 76.28% 79.68%Total equity and liabilities 176.76% 222.21% 207.76% 190.85% 195.03% 195.47% 193.85% 192.68% 191.85% 189.59%

Mylan Inc.Value Driver Estimation

Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)NOPLAT Computation:

EBITA:Net Sales 6,750,246 6,856,606 7,646,500 8,545,381 9,143,558 9,692,171 10,273,701 10,787,387 11,218,882 11,695,684 -Cost of Products Sold 3,341,202 3,352,803 3,625,000 3,959,383 4,144,441 4,393,107 4,656,694 4,889,529 5,085,110 5,360,129 -Depreciation 160,204 152,297 172,800 214,284 231,262 247,451 262,298 278,036 291,937 303,615 -Amortization of Non-Goodwill Intangibles 386,400 363,700 393,800 375,536 394,313 414,028 440,940 467,397 495,441 520,213 -Operating Expenses

Research & development expense 401,341 507,823 581,800 602,515 644,691 683,372 724,375 760,593 791,017 824,635 Selling, general & administrative expense 1,400,747 1,411,629 1,625,700 1,721,471 1,841,974 1,952,492 2,069,642 2,173,124 2,260,049 2,356,101

+Implied Interest on Operating Leases 4,606 4,474 4,673 7,201 7,706 8,168 8,658 9,091 9,455 9,856 EBITA 1,064,958 1,072,828 1,252,073 1,679,394 1,894,583 2,009,888 2,128,411 2,227,799 2,304,783 2,340,848

Less: Adjusted Taxes:Provision for Income Taxes 161,145 120,808 41,400 271,390 326,949 350,103 343,699 359,696 371,424 375,867 +Tax Shield on Interest Expense 64,827 65,801 69,972 77,635 65,269 65,886 68,990 72,361 75,761 78,899 +Tax Shield on Implied Lease Interest 967 939 981 1,512 1,618 1,715 1,818 1,909 1,985 2,070 -Tax on Other Interest Income (expense) (735) 15,729 (7,371) 1,580 1,604 1,628 1,660 1,694 1,727 1,762 Adjusted Taxes 226,204 203,277 104,982 352,118 395,440 419,332 416,167 435,659 450,898 458,597

Plus: Change in Deferred Tax (DT) LiabilitiesDT Liabilities 275,542 469,317 235,600 213,895 193,126 174,232 157,024 141,699 127,887 115,410 DT Current Assets (229,348) (248,861) (345,700) (369,899) (395,792) (423,497) (453,142) (482,596) (513,965) (544,803) DT Long-Term Assets (87,655) (77,829) (83,400) (91,740) (100,914) (111,005) (122,106) (133,095) (143,743) (155,243) Net DT Liabilities (41,461) 142,627 (193,500) (247,744) (303,580) (360,270) (418,224) (473,993) (529,821) (584,636)

Net Change in DT Liabilities (109,316) 184,088 (336,127) (54,244) (55,836) (56,691) (57,954) (55,768) (55,829) (54,814)

NOPLAT: EBITA-Adjusted Taxes+Change in DT 729,438 1,053,639 810,964 1,273,033 1,443,306 1,533,865 1,654,290 1,736,372 1,798,056 1,827,436

Invested Capital Computation:

Operating Current Assets:Normal Cash (lesser of actual or 2%) 135,922 138,183 154,392 83,561 184,197 195,249 206,964 217,312 226,005 235,610 Accounts Receivable, Net 1,554,342 1,820,273 2,268,500 2,323,986 2,486,665 2,635,864 2,794,016 2,933,717 3,051,066 3,180,736 Inventory 1,525,242 1,664,693 1,651,400 1,893,618 2,026,171 2,147,741 2,276,606 2,390,436 2,486,054 2,591,711 PPD Expenses 243,816 446,140 2,295,800 2,151,839 2,302,467 2,440,615 2,587,052 2,716,405 2,825,061 2,945,126 Operating Current Assets 3,459,322 4,069,289 6,370,092 6,453,003 6,999,500 7,419,470 7,864,639 8,257,870 8,588,185 8,953,183

Operating Current Liabilities:Accounts Payable 777,908 1,072,838 905,600 950,252 994,666 1,054,346 1,117,607 1,173,487 1,220,426 1,286,431 Accrued Expenses 332,718 489,546 491,400 330,352 344,074 361,834 374,811 392,394 408,011 420,373 Operating Current Liabilities 1,110,626 1,562,384 1,397,000 1,280,604 1,338,740 1,416,180 1,492,417 1,565,881 1,628,437 1,706,804

Net Operating Working Capital 2,348,696 2,506,905 4,973,092 5,172,399 5,660,760 6,003,290 6,372,221 6,691,989 6,959,748 7,246,379

Plus: Net PPE 1,397,216 1,663,076 1,785,700 1,927,187 2,062,090 2,185,815 2,316,964 2,432,812 2,530,125 2,637,655

Plus: Intangible Assets 2,224,457 2,517,888 2,347,100 2,464,455 2,587,678 2,755,877 2,921,229 3,096,503 3,251,328 3,413,895

Plus: PV of Operating Leases 103,318 107,925 149,111 166,316 177,958 188,636 199,954 209,952 218,350 227,630

Plus: Other Oper. Assets 804,197 2,218,164 834,200 953,196 978,527 1,069,980 1,136,736 1,194,917 1,247,138 1,291,407

Invested Capital: 6,877,884 9,013,958 10,089,203 10,683,553 11,467,013 12,203,599 12,947,104 13,626,173 14,206,689 14,816,966

Value Drivers:

ROICNOPLAT 729,438 1,053,639 810,964 1,273,033 1,443,306 1,533,865 1,654,290 1,736,372 1,798,056 1,827,436 Beginning Invested Capital 6,817,671 6,877,884 9,013,958 10,089,203 10,683,553 11,467,013 12,203,599 12,947,104 13,626,173 14,206,689 ROIC 10.70% 15.32% 9.00% 12.62% 13.51% 13.38% 13.56% 13.41% 13.20% 12.86%

EPNOPLAT 729,438 1,053,639 810,964 1,273,033 1,443,306 1,533,865 1,654,290 1,736,372 1,798,056 1,827,436 Beginning Invested Capital 6,817,671 6,877,884 9,013,958 10,089,203 10,683,553 11,467,013 12,203,599 12,947,104 13,626,173 14,206,689 WACC 7.32% 7.32% 7.32% 7.32% 7.32% 7.32% 7.32% 7.32% 7.32% 7.32%EP 230,384 550,178 151,142 534,503 661,270 694,480 760,987 788,644 800,621 787,507

FCFNOPLAT 729,438 1,053,639 810,964 1,273,033 1,443,306 1,533,865 1,654,290 1,736,372 1,798,056 1,827,436 Change in Invested Capital 60,213 2,136,074 1,075,245 594,349 783,460 736,586 743,506 679,069 580,515 610,277 FCF 669,224 (1,082,436) (264,282) 678,684 659,846 797,279 910,785 1,057,303 1,217,541 1,217,159

Mylan Inc.Weighted Average Cost of Capital (WACC) Estimation

2014Risk Free Rate 2.51% 30 Year US Treasury Bonds YTM @ April 17th, 2015 from Treasury.gov Beta:Equity Risk Premium 4.62% Krause Fund Consensus Unlevered 1.025Beta 1.322 Levered 1.322Cost of Equity (CAPM) 8.62%

Pre-tax Cost of Debt 4.33%Tax Rate 21%Cost of Debt 3.42%

Share Price $69.82Shares Outstanding 373,702 Market Cap 26,091,896 Book Value of Debt 8,537,900 Capitalized Operating Leases 149,111 Enterprise Value 34,778,907

% Equity 75.02%% Debt 24.98%

7.32%WACC

Mylan Inc.Discounted Cash Flow (DCF) and Economic Profit (EP) Valuation Models

Key Inputs: CV Growth 3.75% CV ROIC 13.10% WACC 7.32% Cost of Equity 8.62%

Fiscal Years Ending Dec. 31 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)

DCF ModelInvested Capital 10,089,203 10,683,553 11,467,013 12,203,599 12,947,104 13,626,173 14,206,689 14,816,966 NOPLAT 810,964 1,273,033 1,443,306 1,533,865 1,654,290 1,736,372 1,798,056 1,827,436 ROIC 8.60% 12.62% 13.51% 13.38% 13.56% 13.41% 13.20% 12.86%Change in IC 594,349 783,460 736,586 743,506 679,069 580,515 610,277 FCF 1,867,382 2,226,766 2,270,451 2,397,796 2,415,441 2,378,572 2,437,714 Continuing Value 36,270,193

CF to Discount 1,867,382 2,226,766 2,270,451 2,397,796 2,415,441 2,378,572 36,270,193 Periods to Discount 1 2 3 4 5 6 6Discount Factor 1.0732 1.1517 1.2361 1.3265 1.4236 1.5278 1.5278PV(CF) 1,740,020 1,933,378 1,836,858 1,807,576 1,696,688 1,556,836 23,739,776 Value of Operating Assets 34,311,134

+ Excess Cash 71,108 - Short-term Borrowing (276,074) - Current Portion of LT-Debt & Other Obligations (794,018) - Long-term Debt (6,107,829) - Other Long-term obligations (1,517,477) - PV of Operating Leases (149,111) - PV of Employee Stock Options (718,880) + Non-controlling Interest 20,100

Value of Equity 24,838,953 Shares Outstanding 373,702 Intrinsic Stock Price 12/31/14 66.47$ Intrinsic Stock Price Today 68.17$

Next FYE 4/22/2015Last FYE 12/31/2015Days in FY 12/31/2014Days to FYE 365 Elapsed Fraction 112

0.307

EP ModelInvested Capital 10,089,203

Economic Profit 534,503 661,270 694,480 760,987 788,644 800,621 787,507 Continuing Value 14,438,192

1 2 3 4 5 6 61.0732 1.1517 1.2361 1.3265 1.4236 1.5278 1.5278

498,048 574,144 561,854 573,669 553,970 524,027 22,059,012 10,666,259.0

Present Value of Operating Assets 35,433,928 (+)Excess Cash 71,108 (-)Short-term Borrowing (276,074) (-)Current Portion of LT Debt & Other Obligations (794,018) (-)Long-Term Debt (6,107,829) (-)Other Long-Term Obligations (1,517,477) (-)PV of Operating Leases (149,111) (-)PV of Employee Stock Options (718,880) (+)Non-Controlling Interest 20,100

Value of Equity 24,838,953 Shares Outstanding 373,702 Economic Profit Share Value 12/31/14 66.47$ Economic Profit Share Value Today 68.17$

Mylan Inc.Dividend Discount Model (DDM) or Fundamental P/E Valuation Model

Fiscal Years Ending Dec. 31 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)

EPS 2.90$ 3.50$ 3.75$ 4.05$ 4.24$ 4.38$ 4.43$

Key Assumptions CV growth 3.75% CV ROE 35.54% Cost of Equity 8.62%

Future Cash Flows P/E Multiple (CV Year) 80.46$ 18.16 EPS (CV Year) 4.43$ Future Stock Price 80.46$ Dividends Per Share 0 Future Cash Flows - - - - - - 66.11$ Periods to Discount 1 2 3 4 5 6 6Discount Factor 1.086 1.180 1.281 1.392 1.512 1.642 1.642 Discounted Cash Flows 40.259$

Intrinsic Value 40.26$

Next FYE 42116 Adjusted Intrinsic Value 41.29$ Last FYE 42369.00Days in FY 42004.00Days to FYE 365.00Elapsed Fraction 112

0 0.306849

Mylan Inc.Relative Valuation Models

Generic EPS EPS Est. 5yrTicker Company Price 2015E 2016E P/E 15 P/E 16 EPS gr. PEG 15 PEG 16ACT Actavis PLC $297.05 $17.58 $21.28 16.9 14.0 18.0 0.94 0.78 ABT Abbott Laboratories $46.25 $2.15 $2.41 21.5 19.2 9.6 2.23 1.99 TEVA Teva Pharmaceuticals $64.91 $5.14 $5.09 12.6 12.8 4.5 2.79 2.82 LLY Eli Lilly and Company $72.47 $3.15 $3.55 23.0 20.4 4.6 5.00 4.44 MRK Merck & Co, Inc. $56.88 $3.38 $3.80 16.8 15.0 5.1 3.28 2.92 PFE Pfizer, Inc. $35.04 $2.08 $2.24 16.8 15.6 3.1 5.43 5.05

Average 18.0 16.2 3.3 3.0

MYL Mylan Inc. $69.82 2.90 3.50 24.0 20.0 10.8% 223.1 185.2

Implied Value: Relative P/E (EPS15) $ 52.15 Relative P/E (EPS16) 56.53$ PEG Ratio (EPS15) 1.03$ PEG Ratio (EPS16) 1.13$

Mylan Inc.Key Management Ratios

Fiscal Years Ending Dec. 31 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Key Management Ratios

Liquidity RatiosCurrent Ratio=CA/CL 1.78 1.51 1.28 1.90 2.15 2.21 2.24 2.25 2.25 2.23 Quick Ratio=(CA-INV)/CL 1.08 0.95 0.97 1.38 1.61 1.67 1.69 1.71 1.71 1.69 Working Capital=CA-CL 1,709,214 1,515,190 1,481,200 3,239,958 4,300,054 4,807,094 5,182,727 5,487,274 5,733,228 5,862,695

Activity or Asset-Management RatiosAsset Turnover Ratio=Total Revenues/Total Assets 0.57 0.45 0.49 0.53 0.52 0.52 0.52 0.52 0.53 0.53 Accounts Payable Turnover=Total Purchases/Average AP Bala 4.69 3.77 3.65 4.53 4.40 4.41 4.41 4.37 4.33 4.36 Net Working Capital Turnover= Revenues/Net Working Capit 2.89 2.76 1.55 1.66 1.63 1.63 1.62 1.62 1.62 1.63

Financial Leverage RatiosDebt to Equity=Total Liabilities/Total Equity 2.31 2.56 4.15 3.85 2.49 2.21 2.02 1.87 1.75 1.64 Debt Ratio=Total Debt/Total Assets 0.48 0.53 0.54 0.44 0.41 0.40 0.40 0.40 0.40 0.40 Interest Coverage Ratio=EBIT/Interest Expense 5.22 5.07 5.46 6.14 8.11 8.51 8.62 8.63 8.57 8.42

Profitability RatiosGross Margin=(Revenue-COGS)/Revenue 42.79% 44.00% 45.70% 47.15% 48.21% 48.22% 48.20% 48.14% 48.03% 47.51%Operating Margin=Operating Income/Net Sales 16.28% 16.22% 17.11% 20.15% 21.21% 21.22% 21.20% 21.14% 21.03% 20.51%Net Margin=Net Profit/Revenue 9.42% 8.86% 12.71% 12.61% 14.20% 14.34% 14.63% 14.58% 14.48% 14.06%FCF Margin=FCF/Revenues 9.85% -15.67% -3.42% 7.88% 7.16% 8.17% 8.80% 9.73% 10.77% 10.33%ROA=(Net Income)/Avg Total Assets 5.36% 4.02% 6.18% 6.66% 7.33% 7.39% 7.60% 7.62% 7.60% 7.47%ROE=Net Income/Avg Shareholder Equity 20.26% 19.62% 24.94% 21.91% 22.93% 21.55% 20.67% 19.44% 18.31% 35.54%

Payout Policy RatiosDividend Payout 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Total Payout = (Divs+Repurchases)/Net Income 0.41% 0.34% 0.31% 0.29% 0.27% 0.26% 0.26%**No Dividends have been paid since2009 and we predict this trend to continue

Present Value of Operating Lease Obligations (2014) Present Value of Operating Lease Obligations (2013) Present Value of Operating Lease Obligations (2012) Present Value of Operating Lease Obligations (2011) Present Value of Operating Lease Obligations (2010) Present Value of Operating Lease Obligations (2009) Present Value of Operating Lease Obligations (2008)(In Thousands) (In Thousands) (In Thousands) (In Thousands) (In Thousands) (In Thousands) (In Thousands)

Operating Operating Operating Operating Operating Operating Operating#REF! Leases Fiscal Years Ending Dec. 31 Leases Fiscal Years Ending Leases Fiscal Years Ending 68.2862511919061 Leases #REF! Leases Fiscal Years Ending Leases Fiscal Years Ending Leases2014 37,300 2014 38,292 2013 38,720 2012 35,511 2011 35,284 2010 30,334 2009 30,081 2015 32,500 2015 30,535 2014 31,695 2013 26,327 2012 30,204 2011 24,523 2010 24,178 2016 25,800 2016 18,320 2015 20,361 2014 20,325 2013 25,086 2012 17,354 2011 19,230 2017 12,900 2017 9,858 2016 10,986 2015 12,524 2014 14,398 2013 12,861 2012 12,814 2018 8,900 2018 6,767 2017 2,301 2016 8,219 2015 9,851 2014 9,605 2013 10,128 Thereafter 62,300 Thereafter 17,662 Thereafter 11,211 Thereafter 17,184 Thereafter 20,430 Thereafter 63,172 Thereafter 57,908 Total Minimum Payments 179,700 Total Minimum Payments 121,434 Total Minimum Payments 115,274 Total Minimum Payments 120,090 Total Minimum Payments 135,253 Total Minimum Payments 157,849 Total Minimum Payments 154,339 Less: Interest 30,589 Less: Interest 13,509 Less: Interest 11,956 Less: Interest 13,724 Less: Interest 15,983 Less: Interest 28,674 Less: Interest 26,623 PV of Minimum Payments 149,111 PV of Minimum Payments 107,925 PV of Minimum Payments 103,318 PV of Minimum Payments 106,366 PV of Minimum Payments 119,270 PV of Minimum Payments 129,175 PV of Minimum Payments 127,716

Capitalization of Operating Leases Capitalization of Operating Leases Capitalization of Operating Leases Capitalization of Operating Leases Capitalization of Operating Leases Capitalization of Operating Leases Capitalization of Operating Leases

Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33% Pre-Tax Cost of Debt 4.33%Number Years Implied by Year 6 Payment 7.0 Number Years Implied by Year 6 Payment 2.6 Number Years Implied by Year 6 Payment 4.9 Number Years Implied by Year 6 Payment 2.1 Number Years Implied by Year 6 Payment 2.1 Number Years Implied by Year 6 Payment 6.6 Number Years Implied by Year 6 Payment 5.7

Lease PV Lease Lease PV Lease Lease PV Lease Lease PV Lease Lease PV Lease Lease PV Lease Lease PV LeaseYear Commitment Payment Year Commitment Payment Year Commitment Payment Year Commitment Payment Year Commitment Payment Year Commitment Payment Year Commitment Payment1 37300 35751.9 1 38292 36702.8 1 38720 37113.0 1 35511 34037.2 1 35284 33819.6 1 30334 29075.1 1 30081 28832.62 32500 29858.3 2 30535 28053.0 2 31695 29118.7 2 26327 24187.1 2 30204 27748.9 2 24523 22529.7 2 24178 22212.73 25800 22719.2 3 18320 16132.4 3 20361 17929.6 3 20325 17897.9 3 25086 22090.4 3 17354 15281.7 3 19230 16933.74 12900 10888.1 4 9858 8320.5 4 10986 9272.6 4 12524 10570.8 4 14398 12152.5 4 12861 10855.2 4 12814 10815.55 8900 7200.2 5 6767 5474.6 5 2301 1861.5 5 8219 6649.3 5 9851 7969.6 5 9605 7770.5 5 10128 8193.76 & beyond 8900 42693.8 6 & beyond 6767 13242.0 6 & beyond 2301 8022.1 6 & beyond 8219 13023.8 6 & beyond 9851 15489.4 6 & beyond 9605 43662.5 6 & beyond 10128 40727.7PV of Minimum Payments 149111.5 PV of Minimum Payments 107925.3 PV of Minimum Payments 103317.6 PV of Minimum Payments 106366.0 PV of Minimum Payments 119270.4 PV of Minimum Payments 129174.7 PV of Minimum Payments 127715.8

Effects of ESOP Exercise and Share Repurchases on Common Stock Balance Sheet Account and Number of Shares Outstanding

Number of Options Outstanding (shares): 16,207Average Time to Maturity (years): 7.00Expected Annual Number of Options Exercised: 2,315

Current Average Strike Price: 33.21$ Cost of Equity: 8.62%Current Stock Price: $69.82

2015E 2016E 2017E 2018E 2019E 2020E 2021E(CV)Increase in Shares Outstanding: 2,315 2,315 2,315 2,315 2,315 2,315 2,315Average Strike Price: 33.21$ 33.21$ 33.21$ 33.21$ 33.21$ 33.21$ 33.21$ Increase in Common Stock Account: 76,894 76,894 76,894 76,894 76,894 76,894 76,894

Change in Treasury Stock 308,616 333,305 359,970 388,767 419,869 453,458 489,735Expected Price of Repurchased Shares: 69.82$ 75.84$ 82.37$ 89.47$ 97.18$ 105.56$ 114.65$ Number of Shares Repurchased: 4,420 4,395 4,370 4,345 4,320 4,296 4,271

Shares Outstanding (beginning of the year) 4,486 4,563 4,640 4,717 4,794 4,871 4,947Plus: Shares Issued Through ESOP 2,315 2,315 2,315 2,315 2,315 2,315 2,315Less: Shares Repurchased in Treasury 4,420 4,395 4,370 4,345 4,320 4,296 4,271 Shares Outstanding (end of the year) 2,381 2,483 2,585 2,687 2,788 2,890 2,991

VALUATION OF OPTIONS GRANTED IN ESOP

Ticker Symbol MYLCurrent Stock Price $69.82Risk Free Rate 2.51%Current Dividend Yield 0.00%Annualized St. Dev. of Stock Returns 31.60%

Average Average B-S ValueRange of Number Exercise Remaining Option of OptionsOutstanding Options of Shares Price Life (yrs) Price GrantedRange 1 16,207 33.21 7.00 44.36$ 718,880$ Total 16,207 33.21$ 7.00 44.36$ 718,880$