INTERCO

($000,000 except share price)

The following is supporting analysis for Exhibit 12.

EXHIBIT 12
CASH FLOW PROJECTIONS ($000,000)
Sales growth rate
Tax rate

7.2%
41%
1989

1990

1991

1992

1993

1994

1995

1996

3,582
9.20%
330
29
43

3,840
9.30%
357
29
43

4,116
9.40%
387
29
43

4,413
9.50%
419
29
43

4,730
9.60%
454
29
43

5,071
9.70%
492
29
43

5,436
9.80%
533
29
43

5,828
6,247
6,697
9.90% 10.00% 10.10%
577
625
676
29
29
29
43
43
43

4. EBIT
5. Taxes

316
129

343
140

373
153

406
166

440
180

478
195

519
212

563
230

611
250

663
271

6. Net income
7. Change in NWC

187
-

203
-

221
-

240
-

260
-

283
40

307
42

333
45

361
49

392
52

8. Cash flow (6-7)

187

203

221

240

260

243

265

288

313

340

1. Sales
2. Operating margin
3. Operating earnings (1x2)
Plus: other income
Less: corporate expense

1997

1998

Note: The tax rate is the same as in first quarter 1988. Other income and corporate expense
is the same as in year ending Feb. 29, 1988. Corporate expense was inferred from Exhibit 8,
using interest expense and other income data from Exhibit 7.

The following compares historical operating results to the projections.

HISTORICAL
1986

PROJECTED
1987

1988

Net sales
Operating earnings
Operating margin

2,832
252
8.9%

2,947
264
9.0%

3,341
301
9.0%

Curent assets
Current liabilities

1,216
250

1,287
358

1,359
373

Net working capital

NWC as % of sales

966
34%

928
32%

986
30%

Cash
Marketable securities

17
127

17
64

21
11

NWC less cash and securities

Adjusted NWC as % of sales

822
29%

848
29%

954
29%

Sales growth rate

4.0%

13.4%

Net property plant and equipment

442
Change (=investment less depreciation)

485
43

479
(6)

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998