Projections and Valuation

Estimated price for most recent fiscal year

Estimated price for target date

12/31/2012
4/8/2014

=
=
Most Recent
12/31/12

$
$

45.44
48.48

Projected
12/31/13

Income Statement ($ Thousands)

Sales
Costs of goods sold (COGS)
Sales, general and administrative expense (SGA)
Depreciation
Operating profit
Interest expense
Interest income
Nonoperating income (Expense)
Earnings before taxes (EBT)
Tax expense
Net income before extraordinary items
After-tax extraordinary income (Expense)
Net income (NI)
Dividends-- preferred
Dividends-- common
Additions to RE

5,995,000
2,449,000
2,270,790
175,000
1,100,210
8,210
(123,000)
9,000
978,000
349,000
629,000
0
629,000

6,010,587
2,455,367
2,344,129
189,333
1,021,757
181,525
0
9,023
849,256
301,486
547,770
0
547,770

$
$
$

0
284,000
345,000

$
$
$

0
306,720
241,050

$
$

Balance Sheets ($ Thousands)

Assets
Cash
Inventory
Accounts receivable
Other short-term operating assets
Short-term investments
Total current assets
Net plant, property, & equipment (PPE)
Other long-term operating assets
Long-term investments
Total Assets
Liabilities and Equity
Accounts payable (AP)
Accruals
Other operating current liabilities
All short-term debt
Total current liabilities
Long-term debt
Deferred taxes
Preferred stock
Other long-term liabilities
Total liabilities

$
$

12/31/12
$

12/31/13

366,000
197,000
602,000
170,000
0
1,335,000
1,202,000
6,377,000
14,000
8,928,000

283,000
180,000
519,000
250,000
1,232,000
2,686,000
630,000
0
2,100,000
6,648,000

180,318
192,339
601,059
170,442
501,714
1,645,871
1,262,223
6,287,829
13,824
9,209,747

283,736
180,468
520,349
0
984,553
3,119,192
661,565
0
1,923,388
6,688,697

Par plus PIC Less treasury (and other adjustments)

Retained earnings (RE)
Total common equity
Total liabilities and equity

$
$

(4,000)
2,284,000
2,280,000 $
8,928,000 $

(4,000)
2,525,050
2,521,050
9,209,747

Info for making the sheets balance

Specified assets
Specified liabilities
Net required financing

8,708,034
9,209,747
(501,714)

Current debt
Short-term investments

0
501,714
Balance

Balance check: TA-TL

Valuation
Calculating Projected FCF
Marginal tax rate
35.7%
Reported income tax expense
349,000
Taxes reported but not paid
44,000
Actual taxes paid
305,000
Plus tax saved due to net interest expenses
46,823
Minus tax paid on non-operating income
3,212
Tax on operating income
348,611
Net operating profit after taxes (NOPAT)
751,600
NOPAT adjusted for extraordinary income
751,600
Operating current assets
1,335,000
Operating current liabilities
982,000
Net operating working capital
353,000
Operating long term capital
7,579,000
Operating capital (adjusted for any special asset impairment of accounting7,932,000
changes)
Investment in operating capital
125,000
Free cash flow (including extraordinary income)
626,600

35.5%
301,486
31,565
269,921
64,441
3,203
331,159
690,598
690,598
1,144,157
984,553
159,604
7,550,052
7,709,656
(222,344)
912,942

Calculating Projected ROIC

ROIC (NOPAT/ Beginning capital)

9.6%

8.7%

Projected Growth Rates

Growth in Sales
Growth in NOPAT
Growth in operating capital
Growth in FCF

0.3%
-8.1%
-2.8%
45.7%

Calculating Value
WACC
Assumed long-term return on invested capital
Horizon value
Value of operations

6.58%

13,900,886

6.58%

13,901,950

Value of operations adjusted for half-year

convention
Value of investments
Total value of firm
Value of all debt, preferred stock, and other
nonoperating liabilities
Value of equity
Number of shares
Estimated price per share, end of fiscal year

14,350,614
14,000
14,364,614

14,351,712
515,538
14,867,250

5,036,000
9,328,614
205,293

5,042,580
9,824,670
205,293

45.44

47.86

Price per share on target date

Most recent actual fiscal year end

12/31/2012

Target valuation date

Most recent fiscal year-end prior to target date
Number of days from target to fiscal year-end
prior to target

4/8/2014
12/31/2013

Value of operations on target date

Value of investments on target date
Total value of firm on target date
Value of debt, preferred stock, and other
nonoperating liabilities on target date
Value of equity on target date
Number of shares on target date
Price per share, target date

Equity value per share (growth rate vs W

$48.48
2%
3%
4%
5%

98.00
14,464,876
580,240
15,045,117
5,091,619
9,953,498
205,293

48.48

Selected Projected Ratios and Other Data

Projected economic profit (EP)
Projected market value added (MVA)
Price/earnings ratio (P/E ratio)
Market to book ratio
Value/EBITDA ratio
Value/Sales ratio
Times-interest-earned ratio
Long-term debt/value of operations

751,599
6,418,614
14.8
4.1
11.3
2.4
8.4

169,057
6,642,055
17.9
3.9
12.3
2.5
5.6
21.7%

Statement of Cash Flows

Operating Activities
Net income
Depreciation
Change in deferred tax
Change in inventory
Change in accounts receivable
Change in other short-term operating assets
Change in accounts payable
Change in accruals
Change in other current liabilities
Net cash from operating activities

629,000
175,000
44,000

15,000
33,000
39,000
18,000
(483,000)
(16,000)
454,000 $

547,770
189,333
31,565
4,661
941
(442)
736
468
1,349
776,382

Investing Activities
Investment in PPE
Investment in other long-term oper. ass.
Net cash from investing activities
Financing Activities
Change in short-term investments
Change in long-term investments
Change in short-term debt
Change in long-term debt
Preferred dividends
Change in preferred stock
Change in other long-term liabilities
Change in common stock (Par + PIC)
Common dividends
Net cash from financing activities
Net cash flow
Starting cash
Ending cash

$
$

$
$
$

(225,000) $
(16,000)
(241,000) $

(249,557)
89,171
(160,386)

0 $
(1,000)
(202,000)
332,000
0
0
(65,000)
(328,000)
(284,000)
(548,000) $

(501,714)
176
(250,000)
433,192
0
0
(176,612)
0
(306,720)
(801,678)

(335,000) $
701,000
366,000 $

(185,682)
366,000
180,318

Projected
12/31/14
$

6,122,575
2,530,072
2,350,935
197,710
1,043,857
194,107
5,234
9,192
864,175
306,782
557,393
0
557,393

$
$
$

0
327,164
230,229

$
$

Projected
12/31/15

Projected
12/31/17

$ 6,296,183
2,626,194
2,383,291
207,608
$ 1,079,090
207,900
13,772
9,452
$
894,415
317,517
$
576,898
0
$
576,898

$ 6,511,847
2,736,794
2,432,821
218,540
$ 1,123,692
223,984
24,441
9,776
$
933,924
331,543
$
602,381
0
$
602,381

$
$
$

$
$
$

12/31/14
$

Projected
12/31/16

0
345,737
231,160
12/31/15

0
362,832
239,549

Projected
12/31/18
$

6,758,193
2,857,870
2,494,707
230,220
1,175,396
242,338
36,564
10,146
979,768
347,818
631,950
0
631,950

$
$
$

0
378,804
253,146

$
$

12/31/16

Projected
12/31/19
$

7,028,520
2,987,121
2,566,124
242,484
1,232,791
263,129
49,717
10,552
1,029,931
365,625
664,305
0
664,305

7,309,661
3,106,606
2,642,071
252,183
1,308,801
286,712
55,513
10,974
1,088,576
386,444
702,131
0
702,131

$
$
$

0
393,956
270,349

$
$
$

0
409,714
292,417

$
$

12/31/17

$
$

12/31/18

12/31/19

158,006
188,899
612,257
176,051
726,125
1,861,339
1,318,067
6,394,800
30,396
9,604,603

140,873
188,343
629,618
183,306
915,739
$ 2,057,880
1,384,054
6,563,962
46,439
$ 10,052,335

127,397
189,787
651,185
191,704
1,085,727
$ 2,245,800
1,456,933
6,774,181
62,236
$ 10,539,150

116,665
192,713
675,819
200,946
1,242,933
$ 2,429,076
1,534,801
7,012,824
77,931
$ 11,054,632

108,090
196,799
702,852
210,856
1,387,833
$ 2,606,429
1,616,560
7,272,039
93,603
$ 11,588,631

287,236
183,793
502,543
0
973,573
3,340,832
654,527
0
1,884,392
6,853,324

293,719
188,970
491,203
0
$
973,893
3,599,299
635,832
0
1,860,872
$ 7,069,896

302,225
195,411
484,081
0
$
981,717
3,894,235
596,186
0
1,845,023
$ 7,317,162

312,198
202,773
479,905
0
994,877
4,228,335
524,066
0
1,832,221
7,579,498

323,312
210,856
477,939
0
1,012,107
4,607,294
404,140
0
1,819,606
7,843,147

101,139
204,671
730,966
219,290
195,115
$ 1,451,181
1,681,222
7,537,186
109,160
$ 10,778,749

336,244
219,290
497,057
0
1,052,591
4,964,902
420,306
0
1,803,050
8,240,849

$
$

(4,000)
(4,000)
(4,000)
(4,000)
(4,000)
(1,504,000)
2,755,279
2,986,439
3,225,988
3,479,134
3,749,484
4,041,901
2,751,279 $ 2,982,439 $ 3,221,988 $ 3,475,134 $ 3,745,484 $ 2,537,901
9,604,603 $ 10,052,335 $ 10,539,150 $ 11,054,632 $ 11,588,631 $ 10,778,749

8,878,478
9,604,603
(726,125)

9,136,596
10,052,335
(915,739)

9,453,422
10,539,150
(1,085,727)

9,811,699
11,054,632
(1,242,933)

10,200,798
11,588,631
(1,387,833)

10,583,634
10,778,749
(195,115)

0
726,125
Balance

0
915,739
Balance

0
1,085,727
Balance

0
1,242,933
Balance

0
1,387,833
Balance

0
195,115
Balance

35.5%
306,782
(7,038)
313,820
67,050
3,263
377,607
666,250
666,250
1,135,214
973,573
161,641
7,712,867
7,874,508
164,852
501,398

35.5%
317,517
(18,695)
336,212
68,915
3,356
401,772
677,318
677,318
1,142,141
973,893
168,248
7,948,016
8,116,264
241,756
435,562

35.5%
331,543
(39,645)
371,188
70,838
3,470
438,556
685,136
685,136
1,160,073
981,717
178,355
8,231,114
8,409,469
293,205
391,931

35.5%
347,818
(72,121)
419,938
73,050
3,602
489,386
686,009
686,009
1,186,143
994,877
191,266
8,547,625
8,738,891
329,422
356,588

35.5%
365,625
(119,926)
485,551
75,761
3,746
557,566
675,225
675,225
1,218,597
1,012,107
206,490
8,888,599
9,095,088
356,197
319,028

35.5%
386,444
16,166
370,279
82,076
3,896
448,459
860,342
860,342
1,256,066
1,052,591
203,474
9,218,408
9,421,882
326,794
533,548

8.6%

8.6%

8.4%

8.2%

7.7%

9.5%

1.9%
-3.5%
2.1%
-45.1%

2.8%
1.7%
3.1%
-13.1%

3.4%
1.2%
3.6%
-10.0%

3.8%
0.1%
3.9%
-9.0%

4.0%
-1.6%
4.1%
-10.5%

4.0%
27.4%
3.6%
67.2%

6.58%

6.58%

6.58%

6.58%

6.58%

6.58%

14,314,626

14,820,273

15,402,798

16,058,969

16,795,843

17,366,648

14,777,740
756,522
15,534,261

15,299,745
962,178
16,261,923

15,901,116
1,147,963
17,049,080

16,578,516
1,320,864
17,899,380

17,339,230
1,481,435
18,820,665

17,928,502
304,276
18,232,778

5,225,225
10,309,037
205,293

5,460,171
10,801,752
205,293

5,739,258
11,309,822
205,293

6,060,556
11,838,824
205,293

6,426,900
12,393,765
205,293

6,767,952
11,464,826
205,293

50.22

52.62

55.09

57.67

60.37

55.85

y value per share (growth rate vs WACC)

5%
6%
7%
8%
Error: See W96 Error: See W96Error: See W96Error: See W96
Error: See W96 Error: See W96Error: See W96Error: See W96
Error: See W96 Error: See W96Error: See W96Error: See W96
$86.24
$86.24
$86.24
$86.24

159,328
6,903,231
18.5
3.7
12.5
2.5
5.5
22.6%

159,557
7,183,481
18.7
3.6
12.6
2.6
5.6
23.5%

151,479
7,491,647
18.8
3.5
12.7
2.6
5.6
24.5%

133,074
7,839,624
18.7
3.4
12.7
2.6
5.7
25.5%

100,629
8,244,142
18.7
3.3
12.8
2.7
5.8
26.6%

262,326
8,506,620
16.3
4.5
11.7
2.5
5.7
27.7%

557,393 $
197,710
(7,038)

576,898 $
207,608
(18,695)

602,381 $
218,540
(39,645)

631,950 $
230,220
(72,121)

664,305 $
242,484
(119,926)

702,131
252,183
16,166

3,439
(11,199)
(5,609)
3,501
3,325
(17,806)
723,717 $

557
(17,361)
(7,256)
6,483
5,177
(11,340)
742,071 $

(1,444)
(21,566)
(8,397)
8,506
6,441
(7,122)
757,692 $

(2,925)
(24,635)
(9,242)
9,973
7,362
(4,176)
766,408 $

(4,086)
(27,033)
(9,910)
11,114
8,082
(1,966)
763,065 $

(7,872)
(28,114)
(8,434)
12,932
8,434
19,118
966,544

$
$

$
$
$

(253,554) $
(106,971)
(360,525) $

(273,595) $
(169,162)
(442,757) $

(291,419) $
(210,218)
(501,637) $

(308,089) $
(238,643)
(546,732) $

(324,242) $
(259,215)
(583,457) $

(316,846)
(265,147)
(581,993)

(224,412) $
(16,572)
0
221,640
0
0
(38,995)
0
(327,164)
(385,503) $

(189,614) $
(16,042)
0
258,467
0
0
(23,521)
0
(345,737)
(316,447) $

(169,988) $
(15,797)
0
294,935
0
0
(15,848)
0
(362,832)
(269,531) $

(157,206) $
(15,695)
0
334,100
0
0
(12,802)
0
(378,804)
(230,407) $

(144,900) $
(15,671)
0
378,960
0
0
(12,615)
0
(393,956)
(188,183) $

1,192,717
(15,558)
0
357,608
0
0
(16,556)
(1,500,000)
(409,714)
(391,503)

(22,311) $
180,318
158,006 $

(17,133) $
158,006
140,873 $

(13,476) $
140,873
127,397 $

(10,732) $
127,397
116,665 $

(8,575) $
116,665
108,090 $

(6,951)
108,090
101,139

Projected
12/31/20
$

Projected
12/31/21
$

7,602,048
3,230,870
2,722,631
262,271
1,386,276
308,966
7,805
11,413
1,096,527
389,267
707,260
0
707,260

$
$
$

0
426,103
281,157

$
$

7,906,129
3,360,105
2,807,894
272,761
1,465,369
332,636
20,040
11,869
1,164,642
413,448
751,194
0
751,194

$
$
$

0
443,147
308,047

$
$

12/31/20
$

Projected
12/31/22

Projected
12/31/23
$

8,222,375
3,494,509
2,897,962
283,672
1,546,232
357,767
33,800
12,344
1,234,609
438,286
796,323
0
796,323

$
$
$

0
460,873
335,450

$
$

12/31/21

Projected
12/31/24
$

8,551,270
3,634,290
2,992,944
295,019
1,629,017
384,392
49,163
12,838
1,306,625
463,852
842,773
0
842,773

$
$
$

0
479,308
363,466

$
$

12/31/22

Projected
12/31/25
$

8,893,320
3,779,661
3,112,662
306,820
1,694,178
412,527
66,209
13,351
1,361,211
483,230
877,981
0
877,981

9,249,053
3,930,848
3,237,169
319,092
1,761,945
442,553
84,913
13,885
1,418,190
503,458
914,733
0
914,733

$
$
$

0
498,480
379,501

$
$
$

0
518,419
396,313

$
$

12/31/23

$
$

12/31/24

12/31/25

95,585
212,857
760,205
228,061
500,995
$ 1,797,703
1,748,471
7,807,578
124,644
$ 11,478,396

91,233
221,372
790,613
237,184
845,009
$ 2,185,411
1,818,410
8,082,308
140,091
$ 12,226,220

87,922
230,226
822,237
246,671
1,229,079
$ 2,616,136
1,891,146
8,360,201
155,540
$ 13,023,023

85,513
239,436
855,127
256,538
1,655,233
$ 3,091,847
1,966,792
8,639,752
171,025
$ 13,869,416

88,933
249,013
889,332
266,800
2,122,834
$ 3,616,912
2,045,464
8,919,059
177,866
$ 14,759,301

349,694
228,061
516,939
0
1,094,695
5,345,268
437,118
0
1,782,258
8,659,338

363,682
237,184
537,617
0
1,138,483
5,749,112
454,602
0
1,756,918
9,099,115

378,229
246,671
559,121
0
1,184,022
6,176,961
472,787
0
1,726,699
9,560,468

393,358
256,538
581,486
0
$ 1,231,383
6,629,064
491,698
0
1,691,251
$ 10,043,396

409,093
266,800
604,746
0
$ 1,280,638
7,111,570
511,366
0
1,650,205
$ 10,553,779

92,491
258,973
924,905
277,472
2,629,818
$ 4,183,659
2,127,282
9,195,730
184,981
$ 15,691,653

425,456
277,472
628,936
0
$ 1,331,864
7,622,964
531,821
0
1,603,169
$ 11,089,818

(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
4,323,058
4,631,105
4,966,555
5,330,020
5,709,522
6,105,835
$ 2,819,058 $ 3,127,105 $ 3,462,555 $ 3,826,020 $ 4,205,522 $ 4,601,835
$ 11,478,396 $ 12,226,220 $ 13,023,023 $ 13,869,416 $ 14,759,301 $ 15,691,653

10,977,401
11,478,396
(500,995)
0
500,995
Balance

11,381,211
12,226,220
(845,009)
0
845,009
Balance

11,793,944
13,023,023
(1,229,079)

12,214,183
13,869,416
(1,655,233)

12,636,467
14,759,301
(2,122,834)

13,061,834
15,691,653
(2,629,818)

0
1,229,079
Balance

0
1,655,233
Balance

0
2,122,834
Balance

0
2,629,818
Balance

35.5%
389,267
16,812
372,455
106,912
4,051
475,316
910,960
910,960
1,296,708
1,094,695
202,013
9,556,049
9,758,062
336,180
574,781

35.5%
413,448
17,485
395,963
110,972
4,214
502,721
962,648
962,648
1,340,402
1,138,483
201,919
9,900,718
10,102,637
344,575
618,073

35.5%
438,286
18,184
420,102
115,008
4,382
530,728
1,015,504
1,015,504
1,387,058
1,184,022
203,036
10,251,347
10,454,383
351,746
663,758

35.5%
463,852
18,911
444,941
119,006
4,557
559,390
1,069,627
1,069,627
1,436,613
1,231,383
205,230
10,606,544
10,811,775
357,392
712,235

35.5%
483,230
19,668
463,562
122,943
4,740
581,765
1,112,412
1,112,412
1,494,078
1,280,638
213,440
10,964,523
11,177,962
366,187
746,225

35.5%
503,458
20,455
483,003
126,962
4,929
605,036
1,156,909
1,156,909
1,553,841
1,331,864
221,977
11,323,012
11,544,990
367,028
789,881

9.7%

9.9%

10.1%

10.2%

10.3%

10.3%

4.0%
5.9%
3.6%
7.7%

4.0%
5.7%
3.5%
7.5%

4.0%
5.5%
3.5%
7.4%

4.0%
5.3%
3.4%
7.3%

4.0%
4.0%
3.4%
4.8%

4.0%
4.0%
3.3%
5.9%

6.58%

6.58%

6.58%

6.58%

6.58%

6.58%

17,933,752

18,494,852

19,047,159

19,587,304

20,128,975

20,662,605

18,513,953
625,639
19,139,592

19,093,205
985,100
20,078,305

19,663,381
1,384,618
21,047,999

20,221,001
1,826,259
22,047,260

20,780,196
2,300,700
23,080,897

21,331,091
2,814,799
24,145,890

7,127,526
12,012,066
205,293

7,506,030
12,572,275
205,293

7,903,660
13,144,340
205,293

8,320,315
13,726,945
205,293

8,761,775
14,319,122
205,293

9,226,133
14,919,756
205,293

58.51

291,457
8,755,891
17.0
4.3
11.6
2.5
4.6
28.9%

707,260
262,271
16,812

61.24

321,040
8,990,568
16.7
4.0
11.6
2.5
4.7
30.1%

(8,187)
(29,239)
(8,772)
13,450
8,772
19,882
982,250 $

751,194
272,761
17,485

64.03

351,239
9,208,998
16.5
3.8
11.5
2.6
4.8
31.4%

(8,514)
(30,408)
(9,122)
13,988
9,122
20,678
1,037,183 $

796,323
283,672
18,184

66.87

382,235
9,409,226
16.3
3.6
11.5
2.6
4.9
32.8%

(8,855)
(31,625)
(9,487)
14,547
9,487
21,505
1,093,751 $

842,773
295,019
18,911

69.75

401,521
9,602,234
16.3
3.4
11.5
2.6
4.9
34.2%

(9,209)
(32,889)
(9,867)
15,129
9,867
22,365
1,152,099 $

877,981
306,820
19,668

72.68

421,940
9,786,101
16.3
3.2
11.6
2.6
4.9
35.7%

(9,577)
(34,205)
(10,262)
15,734
10,262
23,259
1,199,680 $

914,733
319,092
20,455
(9,961)
(35,573)
(10,672)
16,364
10,672
24,190
1,249,299

$
$

$
$
$

(329,520) $
(270,392)
(599,912) $

(342,700) $
(274,730)
(617,431) $

(356,408) $
(277,893)
(634,301) $

(370,665) $
(279,551)
(650,216) $

(385,491) $
(279,306)
(664,798) $

(400,911)
(276,671)
(677,582)

(305,880) $
(15,484)
0
380,365
0
0
(20,792)
0
(426,103)
(387,893) $

(344,014) $
(15,447)
0
403,845
0
0
(25,340)
0
(443,147)
(424,104) $

(384,070) $
(15,448)
0
427,849
0
0
(30,219)
0
(460,873)
(462,761) $

(426,155) $
(15,486)
0
452,103
0
0
(35,448)
0
(479,308)
(504,293) $

(467,601) $
(6,841)
0
482,506
0
0
(41,046)
0
(498,480)
(531,462) $

(506,984)
(7,115)
0
511,394
0
0
(47,036)
0
(518,419)
(568,160)

(5,555) $
101,139
95,585 $

(4,351) $
95,585
91,233 $

(3,311) $
91,233
87,922 $

(2,410) $
87,922
85,513 $

3,421
85,513
88,933

$
$

3,557
88,933
92,491

Projected
12/31/26
$

9,619,015
4,088,082
3,366,655
331,856
1,832,422
474,377
105,193
14,441
1,477,679
524,576
953,103
0
953,103

$
$
$

0
539,156
413,947

$
$

Projected
12/31/27

Projected
12/31/28

Projected
12/31/29

Projected
12/31/30

Projected
12/31/31

$ 10,003,776
4,251,605
3,501,322
345,130
$ 1,905,719
507,979
127,166
15,018
$ 1,539,924
546,673
$
993,251
0
$
993,251

$ 10,403,927
4,421,669
3,641,374
358,935
$ 1,981,948
543,295
150,954
15,619
$ 1,605,226
569,855
$ 1,035,371
0
$ 1,035,371

$ 10,820,084
4,598,536
3,787,029
373,293
$ 2,061,226
580,201
176,683
16,244
$ 1,673,952
594,253
$ 1,079,699
0
$ 1,079,699

$ 11,252,887
4,782,477
3,938,511
388,225
$ 2,143,675
618,493
204,473
16,893
$ 1,746,548
620,025
$ 1,126,524
0
$ 1,126,524

$ 11,703,003
4,973,776
4,096,051
403,754
$ 2,229,422
657,866
234,441
17,569
$ 1,823,567
647,366
$ 1,176,200
0
$ 1,176,200

$
$
$

$
$
$

$
$
$

$
$
$

$
$
$

12/31/26

0
560,722
432,529
12/31/27

0
583,151
452,220
12/31/28

0
606,477
473,222
12/31/29

0
630,736
495,787
12/31/30

12/31/31

96,190
269,332
961,902
288,570
3,179,142
$ 4,795,137
2,212,374
9,466,785
192,380
$ 16,666,676

100,038
280,106
1,000,378
300,113
3,773,861
$ 5,454,495
2,300,868
9,728,523
200,076
$ 17,683,962

104,039
291,310
1,040,393
312,118
4,417,070
$ 6,164,930
2,392,903
9,976,372
208,079
$ 18,742,284

108,201
302,962
1,082,008
324,603
5,111,827
$ 6,929,601
2,488,619
10,204,704
216,402
$ 19,839,326

112,529
315,081
1,125,289
337,587
5,861,031
$ 7,751,516
2,588,164
10,406,605
225,058
$ 20,971,343

442,475
288,570
654,093
0
$ 1,385,138
8,162,932
553,093
0
1,549,730
$ 11,650,894

460,174
300,113
680,257
0
$ 1,440,544
8,730,440
575,217
0
1,489,451
$ 12,235,652

478,581
312,118
707,467
0
$ 1,498,165
9,323,492
598,226
0
1,421,870
$ 12,841,754

497,724
324,603
735,766
0
$ 1,558,092
9,938,828
622,155
0
1,346,499
$ 13,465,574

517,633
337,587
765,196
0
$ 1,620,416
10,571,523
647,041
0
1,262,824
$ 14,101,804

0
655,966
520,235

117,030
327,684
1,170,300
351,090
6,667,255
$ 8,633,360
2,691,691
10,573,611
234,060
$ 22,132,722

538,338
351,090
795,804
0
$ 1,685,232
11,214,493
672,923
0
1,170,300
$ 14,742,948

(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
(1,504,000)
6,519,782
6,952,310
7,404,530
7,877,752
8,373,539
8,893,774
$ 5,015,782 $ 5,448,310 $ 5,900,530 $ 6,373,752 $ 6,869,539 $ 7,389,774
$ 16,666,676 $ 17,683,962 $ 18,742,284 $ 19,839,326 $ 20,971,343 $ 22,132,722

13,487,533
16,666,676
(3,179,142)

13,910,101
17,683,962
(3,773,861)

14,325,214
18,742,284
(4,417,070)

14,727,499
19,839,326
(5,111,827)

15,110,312
20,971,343
(5,861,031)

15,465,467
22,132,722
(6,667,255)

0
3,179,142
Balance

0
3,773,861
Balance

0
4,417,070
Balance

0
5,111,827
Balance

0
5,861,031
Balance

0
6,667,255
Balance

35.5%
524,576
21,273
503,303
131,060
5,126
629,237
1,203,185
1,203,185
1,615,995
1,385,138
230,856
11,679,158
11,910,015
365,025
838,160

35.5%
546,673
22,124
524,549
135,189
5,331
654,407
1,251,313
1,251,313
1,680,634
1,440,544
240,091
12,029,391
12,269,482
359,467
891,846

35.5%
569,855
23,009
546,847
139,281
5,545
680,583
1,301,365
1,301,365
1,747,860
1,498,165
249,694
12,369,275
12,618,970
349,488
951,877

35.5%
594,253
23,929
570,324
143,249
5,767
707,806
1,353,420
1,353,420
1,817,774
1,558,092
259,682
12,693,323
12,953,005
334,035
1,019,385

35.5%
620,025
24,886
595,138
146,977
5,997
736,118
1,407,557
1,407,557
1,890,485
1,620,416
270,069
12,994,769
13,264,838
311,834
1,095,723

35.5%
647,366
25,882
621,484
150,316
6,237
765,563
1,463,859
1,463,859
1,966,104
1,685,232
280,872
13,265,302
13,546,174
281,336
1,182,523

10.4%

10.5%

10.6%

10.7%

10.9%

11.0%

4.0%
4.0%
3.2%
6.1%

4.0%
4.0%
3.0%
6.4%

4.0%
4.0%
2.8%
6.7%

4.0%
4.0%
2.6%
7.1%

4.0%
4.0%
2.4%
7.5%

4.0%
4.0%
2.1%
7.9%

6.58%

6.58%

6.58%

6.58%

6.58%

6.58%

21,183,043

21,684,016

22,157,896

22,595,428

22,985,389

23,314,191

21,868,366
3,371,523
25,239,889

22,385,547
3,973,936
26,359,483

22,874,758
4,625,148
27,499,906

23,326,445
5,328,229
28,654,673

23,729,022
6,086,088
29,815,111

24,068,462
6,901,315
30,969,778

9,712,662
15,527,226
205,293

10,219,891
16,139,592
205,293

10,745,362
16,754,544
205,293

11,285,327
17,369,346
205,293

11,834,347
17,980,764
205,293

12,384,793
18,584,984
205,293

75.63

444,084
9,958,351
16.3
3.1
11.7
2.6
5.0
37.3%

953,103
331,856
21,273

78.62

468,211
10,116,065
16.2
3.0
11.7
2.6
5.0
39.0%

(10,359)
(36,996)
(11,099)
17,018
11,099
25,157
1,301,052 $

993,251
345,130
22,124

81.61

494,628
10,255,788
16.2
2.8
11.7
2.6
5.1
40.8%

(10,773)
(38,476)
(11,543)
17,699
11,543
26,164
1,355,118 $

1,035,371
358,935
23,009

84.61

523,703
10,373,440
16.1
2.7
11.8
2.6
5.1
42.6%

(11,204)
(40,015)
(12,005)
18,407
12,005
27,210
1,411,713 $

1,079,699
373,293
23,929

87.59

555,876
10,464,184
16.0
2.6
11.8
2.6
5.2
44.6%

(11,652)
(41,616)
(12,485)
19,143
12,485
28,299
1,471,094 $

1,126,524
388,225
24,886

90.53

591,675
10,522,288
15.8
2.5
11.8
2.6
5.3
46.6%

(12,118)
(43,280)
(12,984)
19,909
12,984
29,431
1,533,575 $

1,176,200
403,754
25,882
(12,603)
(45,012)
(13,503)
20,705
13,503
30,608
1,599,534

$
$

$
$
$

(416,947) $
(271,055)
(688,002) $

(433,625) $
(261,738)
(695,363) $

(450,970) $
(247,849)
(698,820) $

(469,009) $
(228,331)
(697,340) $

(487,769) $
(201,901)
(689,671) $

(507,280)
(167,006)
(674,287)

(549,324) $
(7,399)
0
539,968
0
0
(53,439)
0
(539,156)
(609,350) $

(594,718) $
(7,695)
0
567,508
0
0
(60,279)
0
(560,722)
(655,907) $

(643,209) $
(8,003)
0
593,053
0
0
(67,581)
0
(583,151)
(708,892) $

(694,757) $
(8,323)
0
615,335
0
0
(75,371)
0
(606,477)
(769,593) $

(749,204) $
(8,656)
0
632,695
0
0
(83,675)
0
(630,736)
(839,576) $

(806,225)
(9,002)
0
642,970
0
0
(92,524)
0
(655,966)
(920,746)

3,700
92,491
96,190

$
$

3,848
96,190
100,038

$
$

4,002
100,038
104,039

$
$

4,162
104,039
108,201

$
$

4,328
108,201
112,529

$
$

4,501
112,529
117,030

Projected
12/31/32
$ 12,171,123
5,172,727
4,259,893
419,904
$ 2,318,599
697,878
266,690
18,272
$ 1,905,683
676,518
$ 1,229,166
0
$ 1,229,166
$
$
$

0
682,204
546,961
12/31/32

121,711
340,791
1,217,112
365,134
1,681,275
$ 3,726,024
2,799,358
10,695,376
243,422
$ 17,464,181

559,872
365,134
827,636
0
$ 1,752,642
11,857,852
699,840
0
1,217,112
$ 15,527,446

(7,504,000)
9,440,735
$ 1,936,735
$ 17,464,181

15,782,905
17,464,181
(1,681,275)
0
1,681,275
Balance

35.5%
676,518
26,917
649,601
153,072
6,487
796,186
1,522,413
1,522,413
2,044,749
1,752,642
292,107
13,494,734
13,786,841
240,667
1,281,746

11.2%

4.0%
4.0%
1.8%
8.4%

6.58%
6.58%
23,565,389
23,565,389

24,327,787
1,924,698
26,252,485
13,074,964
13,177,520
205,293

64.19

631,731
10,540,946
10.7
6.8
9.6
2.2
5.4
48.7%

1,229,166
419,904
26,917
(13,107)
(46,812)
(14,044)
21,534
14,044
31,832
1,669,433

$
$

$
$
$

(527,571)
(121,764)
(649,336)

4,985,980
(9,362)
0
643,359
0
0
46,812
(6,000,000)
(682,204)
(1,015,416)
4,681
117,030
121,711

Inputs for Projections and Valuation

Other long-term op. A. / Sales

Historical

140.00%
120.00%

100.00%
80.00%

Key Output of Valuation:

60.00%

Projected ROIC at horizon

Estimated price for 12/31/2012

Estimated price for 4/8/2014

$
$

11.2%
45.44
48.48

40.00%
20.00%

0.00%
2005

2010

2015

2020

2025

2030

2035

Inputs
Historical Values for Ratios Used to Project
Financial
Statements
Year
of analysis

Average

Ratios to calculate operating profit

Sales growth rate
0.9%
COGS / Sales
41.2%
SGA / Sales
37.5%
Depreciation / Net PPE
17.7%
Ratios to calculate operating capital
Cash / Sales
5.6%
Inventory/ Sales
4.4%
Accts. rec. / Sales
10.5%
Other short term operating assets/Sales
3.0%
Net PPE / Sales
18.8%
Other long-term op. A. / Sales
112.2%
Accts. pay./ Sales
4.6%
Accruals / Sales
2.9%
Other current liabilities / Sales
10.3%
Ratios to calculate operating taxes
Deferred taxes/Net PPE
90.2%
Average tax rate (Taxes/EBT)
33.0%
Marginal tax rate
33.0%
Dividend and debt ratios
Dividend policy: growth rate
#N/A
Long-term debt / market value of firm
#N/A
Preferred stock / market value of firm
#N/A
Coupon rate on preferred stock
#N/A
Permanent component of short-term debt / market value of firm#N/A
Ratios to calculate rest of income statement and
balance sheet
Nonop. inc. / Sales
-0.01%
Extr. inc. / Sales
-2.70%
Long-term investments / Sales
0.50%
Other long-term liab. / Sales
22.85%
Interest rates
Interest rate on cash
Interest rate on short-term invest.
Interest rate on all current debt
Interest rate on long-term debt
Cost of Capital and L-T ROIC
Weighted Average Cost of Capital (WACC)
Long-term return on invested capital

Target valuation date

2014

4/8/2014

Trend

Most Recent
0

Starting
rate

Long
Term
rate

Time until
long term
(years)

Fade
Rate

graph

Number of years historical data analyzed

2013

Projected Projected

Sales g
CGS

4.6%
38.8%
39.7%
12.9%

1.6%
40.9%
37.9%
14.6%

0.26%
40.85%
39.00%
15.00%

4.00%
42.50%
35.00%
15.00%

5
5
10
5

0.50
0.20
0.10
0.10

10.6%
2.8%
9.9%
3.2%
22.0%
104.6%
4.9%
7.8%
6.8%

6.1%
3.3%
10.0%
2.8%
20.1%
106.4%
4.7%
3.0%
8.7%

3.00%
3.20%
10.00%
2.84%
21.00%
104.61%
4.72%
3.00%
8.66%

1.00%
2.80%
10.00%
3.00%
23.00%
85.00%
4.60%
3.00%
6.80%

10
5
5
5
5
20
5
5
5

0.20
0.20
0.10
0.10
0.15
-0.15
0.10
0.10
0.10

Cash
Invty

25.6%
36.6%
36.6%

52.4%
35.7%
35.7%

52.41%
35.50%
35.50%

25.00%
35.50%
35.50%

5
5
5

-0.30
0.10
0.10

Def Tax
Avg Tax

13.1%
#N/A
#N/A
#N/A
#N/A

13.1%
21.7%
#N/A
#N/A
#N/A

8.00%
21.73%
0.00%
0.00%
0.01%

4.00%
51.00%
0.00%
0.00%
0.00%

5
20
0
0
0

0.30
-0.05
0.00
0.00
0.00

Div g
LTD/MV

-0.22%
2.18%
-0.36%
49.53%

0.15%
0.00%
0.23%
35.03%

0.15%
0.00%
0.23%
32.00%

0.15%
0.00%
2.00%
10.00%

5
5
10
18

0.10
0.10
0.10
0.00

N-OP Inc
Ex Inc

5
5
5
5

0.10
0.10
0.10
0.10

Cash Int
STinv Int

0.00%
0.10%
5.75%
6.22%
6.58%
6.58%

0.00%
4.00%
5.75%
6.22%

SGA
Depr

AcctRec

Othr STA
Net PPE
Othr LTA
Acct Pay
Accruals
Othr CL

Marg Tax

PFS/MV
PFS Cpn
Perm STD

LT Inv
Othr LT L

Cur D Int
LT D Int

2013 1

2014 2

0.3%
40.9%
39.0%
15.0%

1.9%
41.3%
38.4%
15.0%

3.0%
3.2%
10.0%
2.8%
21.0%
104.6%
4.7%
3.0%
8.7%

2.6%
3.1%
10.0%
2.9%
21.5%
104.4%
4.7%
3.0%
8.2%

52.4%
35.5%
35.5%

49.7%
35.5%
35.5%

8.0%
21.7%
0.0%
0.0%
0.0%

6.7%
22.6%
0.0%
0.0%
0.0%

0.15%
0.00%
0.23%
32.00%

0.15%
0.00%
0.50%
30.78%

0.00%
0.10%
5.75%
6.22%

0.00%
1.04%
5.75%
6.22%

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected

2015 3

2016 4

2017 5

2018 6

2019 7

2020 8

2021 9

202210

202311

202412

202513

202614

202715

202816

202917

203018

203119

2.8%
41.7%
37.9%
15.0%

3.4%
42.0%
37.4%
15.0%

3.8%
42.3%
36.9%
15.0%

4.0%
42.5%
36.5%
15.0%

4.0%
42.5%
36.1%
15.0%

4.0%
42.5%
35.8%
15.0%

4.0%
42.5%
35.5%
15.0%

4.0%
42.5%
35.2%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

4.0%
42.5%
35.0%
15.0%

2.2%
3.0%
10.0%
2.9%
22.0%
104.3%
4.7%
3.0%
7.8%

2.0%
2.9%
10.0%
2.9%
22.4%
104.0%
4.6%
3.0%
7.4%

1.7%
2.9%
10.0%
3.0%
22.7%
103.8%
4.6%
3.0%
7.1%

1.5%
2.8%
10.0%
3.0%
23.0%
103.5%
4.6%
3.0%
6.8%

1.4%
2.8%
10.0%
3.0%
23.0%
103.1%
4.6%
3.0%
6.8%

1.3%
2.8%
10.0%
3.0%
23.0%
102.7%
4.6%
3.0%
6.8%

1.2%
2.8%
10.0%
3.0%
23.0%
102.2%
4.6%
3.0%
6.8%

1.1%
2.8%
10.0%
3.0%
23.0%
101.7%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
101.0%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
100.3%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
99.4%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
98.4%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
97.2%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
95.9%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
94.3%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
92.5%
4.6%
3.0%
6.8%

1.0%
2.8%
10.0%
3.0%
23.0%
90.3%
4.6%
3.0%
6.8%

45.9%
35.5%
35.5%

40.9%
35.5%
35.5%

34.1%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

25.0%
35.5%
35.5%

5.7%
23.5%
0.0%
0.0%
0.0%

4.9%
24.5%
0.0%
0.0%
0.0%

4.4%
25.5%
0.0%
0.0%
0.0%

4.0%
26.6%
0.0%
0.0%
0.0%

4.0%
27.7%
0.0%
0.0%
0.0%

4.0%
28.9%
0.0%
0.0%
0.0%

4.0%
30.1%
0.0%
0.0%
0.0%

4.0%
31.4%
0.0%
0.0%
0.0%

4.0%
32.8%
0.0%
0.0%
0.0%

4.0%
34.2%
0.0%
0.0%
0.0%

4.0%
35.7%
0.0%
0.0%
0.0%

4.0%
37.3%
0.0%
0.0%
0.0%

4.0%
39.0%
0.0%
0.0%
0.0%

4.0%
40.8%
0.0%
0.0%
0.0%

4.0%
42.6%
0.0%
0.0%
0.0%

4.0%
44.6%
0.0%
0.0%
0.0%

4.0%
46.6%
0.0%
0.0%
0.0%

0.15%
0.00%
0.74%
29.56%

0.15%
0.00%
0.96%
28.33%

0.15%
0.00%
1.15%
27.11%

0.15%
0.00%
1.33%
25.89%

0.15%
0.00%
1.49%
24.67%

0.15%
0.00%
1.64%
23.44%

0.15%
0.00%
1.77%
22.22%

0.15%
0.00%
1.89%
21.00%

0.15%
0.00%
2.00%
19.78%

0.15%
0.00%
2.00%
18.56%

0.15%
0.00%
2.00%
17.33%

0.15%
0.00%
2.00%
16.11%

0.15%
0.00%
2.00%
14.89%

0.15%
0.00%
2.00%
13.67%

0.15%
0.00%
2.00%
12.44%

0.15%
0.00%
2.00%
11.22%

0.15%
0.00%
2.00%
10.00%

0.00%
1.90%
5.75%
6.22%

0.00%
2.67%
5.75%
6.22%

0.00%
3.37%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

0.00%
4.00%
5.75%
6.22%

2032
Projected

203220

4.0%
42.5%
35.0%
15.0%
1.0%
2.8%
10.0%
3.0%
23.0%
87.9%
4.6%
3.0%
6.8%
25.0%
35.5%
35.5%
4.0%
48.7%
0.0%
0.0%
0.0%

0.15%
0.00%
2.00%
10.00%
0.00%
4.00%
5.75%
6.22%

ProjectionsHistorical
Year
#N/A
#N/A
Other long-term
#N/A
op. A. / Sales
#N/A

#N/A
#N/A

#N/A
#N/A

2007
2008
2009
2010
2011
2012
118.44% 112.07% 115.33% 113.04% 107.76% 106.37%

Other long-term op. A. / Sales

10
10
1 Sales growth rate
1 Sales growth rate
2 COGS / Sales
2 COGS / Sales
3 SGA / Sales
3 SGA / Sales
4 Depreciation / Net PPE
4 Depreciation / Net PPE
6 Cash / Sales
6 Cash / Sales
7 Inventory/ Sales
7 Inventory/ Sales
8 Accts. rec. / Sales
8 Accts. rec. / Sales
9 Other short term operating assets/Sales 9 Other short term operating assets/Sales
10 Net PPE / Sales
10 Net PPE / Sales
11 Other long-term op. A. / Sales
11 Other long-term op. A. / Sales
12 Accts. pay./ Sales
12 Accts. pay./ Sales
13 Accruals / Sales
13 Accruals / Sales
14 Other current liabilities / Sales
14 Other current liabilities / Sales
16 Deferred taxes/Net PPE
16 Deferred taxes/Net PPE
17 Average tax rate (Taxes/EBT)
17 Average tax rate (Taxes/EBT)
18 Marginal tax rate
18 Marginal tax rate
20 Dividend policy: growth rate
20 Dividend policy: growth rate
21 Long-term debt / market value of firm
21 Long-term debt / market value of firm
22 Preferred stock / market value of firm
22 Preferred stock / market value of firm
23 Coupon rate on preferred stock
23 Coupon rate on preferred stock
24 Permanent component of short-term debt24
/ market
Long-term
valuedebt
of firm
/ market value of firm
26 Nonop. inc. / Sales
26 Nonop. inc. / Sales
27 Extr. inc. / Sales
27 Extr. inc. / Sales
28 Long-term investments / Sales
28 Long-term investments / Sales
29 Other long-term liab. / Sales
29 Other long-term liab. / Sales
31 Interest rate on cash
30 blank
32 Interest rate on short-term invest.
33 Interest rate on all current debt
34 Interest rate on long-term debt

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

######## ######## ######## ######## ######## ######## ######## ######## ######## ######## ######## ######## ######## 99.423% 98.417% 97.249% 95.890%

2029

2030

2031

2032

94.313% 92.479% 90.350% 87.875%

Cost of Capital
Enter inputs in yellow cells.
Key Output of Valuation:
Estimate of WACC =
Estimated price at end of most recent fiscal year=
Estimated price at target date=

Inputs to Estimate WACC

Input

Enter Current Market Value for Equity

Current stock price

Number of shares common stock outstanding

$47.71

203,570

Market value of common stock

$9,712,325

Enter Current Market Value for Long-Term Debt

Estimated value of long-term debt

$2,697,322

Enter Current Market Value for Short-Term Debt

Estimated value of short-term debt

$1,000

Enter Current Market Value for Preferred Stock

Estimated value of preferred stock

$0

Estimate Percent of Firm that will be Financed by Long-term Debt

Current percent of firm financed with long-term
debt
21.73%

Target percent financed with long-term debt=

51%

Estimate Percent of Firm that will be

Financed by Preferred Stock
Current percent of firm financed with preferred
stock

0.00%

Target percent financed with preferred stock =

0.00%

Estimate Percent of Firm that will be

Financed by Short-term Debt
Current percent of firm financed with short-term
debt

0.01%

Target percent financed with short-term debt =

0.00%

Estimate Cost of Equity

Beta=

0.94

Risk-free rate=

2.50%

Market risk premium =

7.17%

Cost of equity=

9.24%

Estimate Cost of Long-term Debt

Bond rating for company's debt
Spread for bond rating

BBB+
3.72%

Tax rate=

35.5%

Cost of long-term debt=

After-tax cost of long-term debt=

6.22%
4.01%

Inputs to Estimate Cost of Preferred Stock

Yield on preferred stock
Current coupon rate (preferred
dividend/preferred stock)

Cost of preferred stock =

0.00%
0.00%

0.00%

Inputs to Estimate Cost of Short-term Debt

Prime rate
Adjustment to prime

3.25%
2.50%

Cost of short-term debt

5.75%

After-tax cost of short-term debt

3.71%

Estimated WACC

6.58%

6.58%
$45.44
$48.48
Suggested Sources

(1) www.thomsonfn.com Enter ticker symbol, get quote.

(2) finance.yahoo.com, enter ticker symbol, get quote, then select
Key Statistics.
(1) www.thomsonfn.com, enter ticker symbol, get quote, then
select TipSheet.
(2) finance.yahoo.com, enter ticker symbol, get quote.

ng-term Debt

Judgment, based on historical ratios in Hist Analys sheet and

market conditions. In our experience, virtually all solvent firms
should be financed with at least 15% debt, with stronger
companies having at least 20% and up to 40%.

Judgment, based on historical ratios in Hist Analys sheet and

market conditions. We usually choose the default value, which is
the current value.

Judgment, based on historical ratios in Hist Analys sheet and

market conditions. We usually choose the default value, which is
the current value (unless the current sum of shor-term debt and
long-term debt produces a ratio greater than 40%, in which case
we choose sufficient short-term debt so the total is 40%).

(1) www.thomsonfin.com.
(2) www.bloomberg.com.
(3) yahoofinance.com.
Yield to maturity on long-term Treasury securities.
(1) www.federalreserve.gov, Research and Data, Statistics,
Selected Interest Rates
(2) www.bloomberg.com, U.S. Treasuries
(3) bonds.yahoo.com/rates.html
5% to 7% for U.S.; toward the low end when the stock market is
high, toward the upper end when the market is low. See discussion
in Ch 11.

(1) www.moodys.com.
(2) www.bondsonline.com.
www.bondsonline.com,
We usually look at the most recent value and average value from
the Hist Analys worksheet. If both are between 36% and 40%, we
usually choose a value similar to the average rate.

yahoo.finance.com
Actual coupon rate as shown in footnotes to financial statements or
as shown at finance.yahoo.com.

Judgment, based on yield on preferred and/or current coupon rate.

(1) www.federalreserve.gov, Research and Data, Statistics,

Selected Interest Rates
(2) www.bloomberg.com, Markets, Key Rates
Judgment, based on risk of company.

Judgment, based on yield on preferred and/or current coupon rate.

221352425.xls.ms_office

Hist Analys

6.00
Analysis of Historical Financial
Statements

Receivable turnover
10.20
10.00
9.80
9.60
9.40
9.20
9.00
8.80
8.60
2005

Industry

12/31/2012
2010

12/31/2011

12/31/2010

12/31/2009

12/31/2008

12/31/2007

12/31/2006

2015

2012

2011

2010

2009

2008

2007

2006

36%
349,000
44,000
305,000
46,823
3,212
348,611
751,600
12.5%
751,600
1,335,000
982,000
353,000
7,579,000
7,932,000
132.3%
125,000

35%
320,529
(497,000)
817,529
40,509
4,680
853,357
176,738
3.0%
176,738
1,757,000
1,463,000
294,000
7,513,000
7,807,000
132.3%
(107,000)

36%
294,558
45,000
249,558
46,322
(27,732)
323,612
705,742
12.5%
705,742
1,309,000
934,000
375,000
7,539,000
7,914,000
140.4%
1,000

36%
316,139
57,000
259,139
87,840
9,123
337,856
750,192
13.6%
750,192
1,279,000
854,000
425,000
7,488,000
7,913,000
143.1%
88,000

16%
117,671
(343,000)
460,671
37,500
3,317
494,855
438,681
7.7%
(479,037)
1,237,000
801,000
436,000
7,389,000
7,825,000
137.0%
72,000

40%
328,959
32,000
296,959
74,672
2,613
369,018
645,982
11.2%
639,328
1,212,000
1,135,000
77,000
7,676,000
7,753,000
134.9%
796,000

37%
296,739
1,292,000
(995,261)
77,916
585
(917,931)
1,930,931
40.8%
1,934,084
1,053,000
1,691,000
(638,000)
7,595,000
6,957,000
146.9%
6,957,000
(5,026,069)
$ (5,022,916)

6 years of data to analyze

Historical Free Cash Flow (FCF)
Assumed marginal tax rate
Reported income tax expense
Taxes reported but not paid
Actual taxes paid
Plus tax saved due to net interest expenses
Minus tax paid on non-operating income
Tax on operating income
Net operating profit after taxes (NOPAT)
NOPAT/Sales
NOPAT/Sales
NOPAT adjusted for extraordinary income
Operating current assets
Operating current liabilities
Net operating working capital
Operating long term capital
Operating capital (adjusted for any special asset impairment of accounting changes)
Op. Capital/Sales
Operating capital/Sales
Investment in operating capital
FCF
Free cash flow from ongoing operations
Free cash flow (including extraordinary income)
Historical Return on Invested Capital
ROIC (NOPAT/ Beginning capital)
Historical Economic Profit
Historical weighted average costs of capital
Economic profit

Econ. Prof.

Traditional Ratio Analysis: Fill in

yellow cells with ratios for industry or
for closest competitor for most recent
year.
Graph
Payout ratio
Annual sales growth rate
Quick ratio
Current ratio
LT debt to equity
Total debt to equity
Interest coverage (Times-interest-earned)
Gross margin
EBITD margin
Operating margin
Pre-tax margin
Net profit margin
Return on assets
Receivable turnover
Inventory turnover
Asset turnover

Payout Ratio
Sales g
Quick Ratio
Current Ratio
L-TD/E

Most
Recent
Industry
or
Competit

Tot D/E
Int. Cov.
Gross Margin
EBITD Margin
Op. Margin
Pre-Tax Mgn.
Net Profit Mgn.
ROA
Rec. TO
Inv. TO
Asset TO

Most
Recent
Industry
or
Competit

Historical Values for Ratios Used to

Project Financial Statements
Ratios to calculate operating profit
Sales growth rate
COGS / Sales
SGA / Sales
Depreciation / Net PPE
Ratios to calculate operating capital
Cash / Sales
Inventory/ Sales
Accts. rec. / Sales
Other short term operating assets/Sales
Net PPE / Sales
Other long-term op. A. / Sales
Accts. pay./ Sales
Accruals / Sales
Other current liabilities / Sales
Ratios to calculate operating taxes
Deferred taxes/Net PPE
Average tax rate (Taxes/EBT)
Marginal tax rate
Dividend and debt ratios
Dividend policy: growth rate
Long-term debt / market value of firm
Preferred stock / market value of firm
Coupon rate on preferred stock
Long-term debt / market value of firm
Ratios to calculate rest of income statement
and balance sheet
Nonop. inc. / Sales
Extr. inc. / Sales
Long-term investments / Sales
Other long-term liab. / Sales

626,600
626,600

283,738
283,738

704,742
704,742

662,192
662,192

(150,018)
(156,672)

9.6%

2.2%

8.9%

9.6%

5.7%

9.3%

8.0%
127,040

9.0%
(535,522)

10.0%
(85,558)

10.0%
(32,308)

10.0%
$ (1,254,337)

10.0%
(56,372)

10.0%
$ 1,934,084

0.0%
-3.1%
1.19
1.50
0.94
0.94
4.50
61.5%
23.7%
19.7%
15.8%
10.0%
6.3%
9.67
8.12
0.63

0.0%
-0.7%
1.22
1.54
1.39
1.39
4.05
56.3%
20.0%
16.3%
12.7%
-5.5%
-3.6%
9.79
9.49
0.66

0.0%
21.4%
2.13
2.41
0.58
0.58
5.37
55.7%
20.6%
17.7%
14.5%
8.6%
4.7%
8.67
7.83
0.55

0.0%
#DIV/0!
0.79
0.97
0.95
0.95
4.80
59.4%
24.3%
21.4%
17.0%
10.8%
5.5%
8.09
6.41
0.51

ROIC

Sales g
CGS %
SGA %
Depr % PPE

Cash %
Inv. %
Acct. Rec. %
Oth. ST OA %

Net PPE %
Other LT A%
Acct. Pay %
Accruals %
Other CL %
Def. Taxes %
Avg. Tax rate
Margn. Tax
Div. g
LTD/MV Firm
Pf. Stk./MV F
Pf. Stk. Coupon
LTD/MV F

Nonop inc %
Extr. inc. %
L-T Inv. %
Othr L-T Liab.%

Compan
y's
Historica
l
Average
20.6%
0.9%
1.18
1.41
0.97
1.05
6.51
58.8%
21.3%
18.0%
14.9%
7.2%
4.5%
9.54
9.72
0.63

Trend
59.2%
4.6%
0.41
0.50
1.15
1.36
9.79
61.2%
21.5%
18.5%
16.6%
12.8%
8.7%
10.06
12.71
0.69

Most Recent
45.2%
1.6%
0.92
1.08
1.18
1.29
8.39
59.1%
21.3%
18.4%
16.3%
10.5%
7.0%
9.96
12.43
0.67

Average

Trend

Most Recent

#N/A
0.9%
4.6%
#N/A
41.2%
38.8%
#N/A
37.5%
39.7%
#N/A
17.7%
12.9%
Competitor Average Trend
#N/A
5.6%
10.6%
#N/A
4.4%
2.8%
#N/A
10.5%
9.9%
#N/A
3.0%
3.2%
#N/A
18.8%
22.0%
#N/A
112.2% 104.6%
#N/A
4.6%
4.9%
#N/A
2.9%
7.8%
#N/A
10.3%
6.8%
Competitor Average Trend
#N/A
90.2%
25.6%
#N/A
33.0%
36.6%
#N/A
33.0%
36.6%
Competitor Average Trend
#N/A
#N/A
13.1%
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A

1.6%
40.9%
37.9%
14.6%
Most Recent
6.1%
3.3%
10.0%
2.8%
20.1%
106.4%
4.7%
3.0%
8.7%
Most Recent
52.4%
35.7%
35.7%
Most Recent
13.1%
#N/A
#N/A
#N/A
#N/A

Competitor Average Trend

#N/A
0.0%
-0.2%
#N/A
-2.7%
2.2%
#N/A
0.5%
-0.4%
#N/A
22.9%
49.5%

Most Recent
0.2%
0.0%
0.2%
35.0%

41.4%
4.7%
0.81
0.92
1.04
1.24
8.80
58.6%
20.3%
17.5%
15.7%
10.3%
6.5%
9.30
11.53
0.64

36.7%
1.9%
0.80
0.98
0.71
0.88
7.96
61.3%
21.7%
18.3%
14.6%
9.4%
6.0%
9.87
8.93
0.64

366,681
(551,037)

#N/A

4.7%
41.4%
38.3%
14.5%

1.9%
38.7%
39.7%
16.4%

-3.1%
38.5%
37.8%
20.2%

-0.7%
43.7%
36.3%
21.0%

21.4%
44.3%
35.1%
19.5%

#DIV/0!
40.6%
35.0%
18.4%

11.9%
3.6%
10.8%
3.5%
19.5%
107.8%
4.5%
11.2%
9.1%

5.6%
4.3%
10.1%
3.0%
20.7%
113.0%
5.3%
2.5%
8.8%

5.1%
4.7%
10.3%
2.9%
20.1%
115.3%
4.6%
0.1%
10.8%

3.7%
4.6%
10.2%
3.2%
17.3%
112.1%
4.1%
0.1%
9.8%

1.2%
5.7%
11.5%
2.7%
15.1%
118.4%
4.5%
0.4%
14.9%

0.7%
6.3%
12.4%
2.3%
15.9%
144.5%
5.4%
0.3%
30.1%

50.9%
35%
34.6%

92.7%
36%
36%

93.6%
36%
36%

99.1%
16%
16%

152.5%
40%
40%

171.1%
37%
37%

29.4%
#N/A
#N/A
#N/A
#N/A

#N/A
#N/A
#N/A
#N/A
#N/A

#N/A
#N/A
#N/A
#N/A
#N/A

#N/A
#N/A
#N/A
#N/A
#N/A

#N/A
#N/A
#N/A
#N/A
#N/A

#N/A
#N/A
#N/A
#N/A
#N/A

0.2%
0.0%
0.2%
36.7%

-1.4%
0.0%
0.2%
39.4%

0.5%
0.0%
0.2%
12.4%

0.4%
-16.1%
0.2%
11.2%

0.1%
-0.1%
2.0%
2.4%

0.0%
0.1%
2.5%
0.6%

Year
Receivable turnover
14
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
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26

Michael C. Ehrhardt

Page 38

2012
2011
2010
9.9585
9.2961
9.8704
#N/A
Payout ratio
Annual sales growth rate
Quick ratio
Current ratio
LT debt to equity
Total debt to equity
Interest coverage (Times-interest-earned)
Gross margin
EBITD margin
Operating margin
Pre-tax margin
Net profit margin
Return on assets
Receivable turnover
Inventory turnover
Asset turnover
Sales growth rate
COGS / Sales
SGA / Sales
Depreciation / Net PPE
Cash / Sales
Inventory/ Sales
Accts. rec. / Sales
Other short term operating assets/Sales
Net PPE / Sales
Other long-term op. A. / Sales
Accts. pay./ Sales
Accruals / Sales
Other current liabilities / Sales
Deferred taxes/Net PPE
Average tax rate (Taxes/EBT)
Marginal tax rate
Dividend policy: growth rate
Long-term debt / market value of firm
Preferred stock / market value of firm
Coupon rate on preferred stock
Long-term debt / market value of firm
Nonop. inc. / Sales
Extr. inc. / Sales
Long-term investments / Sales
Other long-term liab. / Sales
NOPAT/Sales
Operating capital/Sales
Free cash flow from ongoing operations
ROIC (NOPAT/ Beginning capital)
Economic profit

2009
9.6696

2008
9.7942

2007
8.6697

#N/A
#N/A

#N/A
#N/A

#N/A
#N/A

#N/A
#N/A

4/8/2014

221352425.xls.ms_office

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Michael C. Ehrhardt

Condensed Historical Financial Statements

You should not change any formulas in this worksheet.
6.00
12/31/2012
12/31/2011
12/31/2010
2012

2011

12/31/2009
2010

12/31/2008
2009

2008

12/31/2007
12/31/2006
2007
2006

Income Statement
Sales
Costs of goods sold (COGS)
Sales, general and administrative expense (SGA)
Depreciation
Operating profit
Interest expense
Interest income
Nonoperating income (Expense)
Earnings before taxes (EBT)
Tax expense
Net income before extraordinary items
After-tax extraordinary income (Expense)
Net income (NI)

5,903,000
2,444,000
2,261,904
167,000
1,030,096
6,096
(111,000)
13,529
926,529
320,529
606,000
0
606,000

0
284,000
345,000

$
$
$

Total current assets $

Net plant, property, & equipment (PPE)
Other long-term operating assets
Long-term investments
Total assets $

366,000
197,000
602,000
170,000
0
1,335,000
1,202,000
6,377,000
14,000
8,928,000

Liabilities and Equity

Accounts payable (AP)
Accruals
Other operating current liabilities
All short-term debt
Total current liabilities
Long-term debt
Deferred taxes
Preferred stock
Other long-term liabilities
Total liabilities
Par plus PIC Less treasury (and other adjustments)
Retained earnings (RE)
Total common equity
Total liabilities and equity

283,000
180,000
519,000
250,000
1,232,000
2,686,000
630,000
0
2,100,000
6,648,000
(4,000)
2,284,000
2,280,000
8,928,000

Dividends-- preferred
Dividends-- common

5,995,000
2,449,000
2,270,790
175,000
1,100,210
8,210
(123,000)
9,000
978,000
349,000
629,000
0
629,000

$
$
Additions to RE $

$
$
$

$
$

5,636,000
2,179,000
2,236,646
191,000
1,029,354
4,354
(125,000)
(77,442)
822,558
294,558
528,000
0
528,000

0
251,000
355,000

$
$
$

701,000
212,000
635,000
209,000
0
1,757,000
1,152,000
6,361,000
13,000
9,283,000

265,000
663,000
535,000
452,000
1,915,000
2,354,000
586,000
0
2,165,000
7,020,000
324,000
1,939,000
2,263,000
9,283,000

$
$

5,531,000
2,127,000
2,091,952
224,000
1,088,048
3,048
(239,000)
25,139
871,139
316,139
555,000
0
555,000

0
194,000
334,000

$
$
$

0
0
555,000

$
$
$

315,000
244,000
571,000
179,000
0
1,309,000
1,168,000
6,371,000
11,000
8,859,000

280,000
262,000
572,000
165,000
0
1,279,000
1,109,000
6,379,000
9,000
8,776,000

298,000
139,000
497,000
404,000
1,338,000
1,757,000
1,083,000
0
2,222,000
6,400,000
875,000
1,584,000
2,459,000
8,859,000

252,000
4,000
598,000
0
854,000
3,009,000
1,038,000
0
688,000
5,589,000
1,937,000
1,250,000
3,187,000
8,776,000

$
$

$
$
$

5,710,000
2,495,000
2,073,464
208,000
933,536
5,536
(225,000)
20,389
723,389
117,671
605,717
(917,717)
(312,000)

$ 5,748,000
2,546,000
2,018,000
169,000
$ 1,015,000
0
(189,000)
6,613
$ 832,613
328,959
$ 503,654
(6,654)
$ 497,000

0 $
0 $
(312,000) $

$ 4,735,000
1,924,000
1,659,000
139,000
$ 1,013,000
0
(211,000)
1,585
$ 803,585
296,739
$ 506,846
3,154
$ 510,000

0
0
497,000

$
$
$

0
0
510,000

Balance Sheet
Assets
Cash
Inventory
Accounts receivable
Other short-term operating assets
Short-term investments

$
$

Check to see if sheets balance

$
$

Balance

$
$

$
$

$
$

Balance

Balance

Balance

606,000 $
167,000
(497,000)

528,000
191,000
45,000

Change in inventory
Change in accounts receivable
Change in other short-term operating assets
Change in accounts payable
Change in accruals
Change in other current liabilities
Net cash from operating activities $

15,000
33,000
39,000
18,000
(483,000)
(16,000)
454,000 $

32,000
(64,000)
(30,000)
(33,000)
524,000
38,000
743,000 $

18,000
1,000
(14,000)
46,000
135,000
(101,000)
849,000 $

1,000
11,000
12,000
18,000
(1,000)
36,000
913,000 $

Investing Activities
Investment in PPE
$
Investment in other long-term oper. ass.
Net cash from investing activities $

(225,000) $
(16,000)
(241,000) $

(151,000) $
10,000
(141,000) $

(250,000) $
8,000
(242,000) $

(343,000) $
20,000
(323,000) $

Financing Activities
Change in short-term investments
$
Change in long-term investments
Change in short-term debt
Change in long-term debt
Preferred dividends
Change in preferred stock
Change in other long-term liabilities
Change in common stock (Par + PIC)
Common dividends
Net cash from financing activities $

0 $
(1,000)
(202,000)
332,000
0
0
(65,000)
(328,000)
(284,000)
(548,000) $

0 $
(2,000)
48,000
597,000
0
0
(57,000)
(551,000)
(251,000)
(216,000) $

0 $
(2,000)
404,000
(1,252,000)
0
0
1,534,000
(1,062,000)
(194,000)
(572,000) $

0 $
3,000
0
(602,000)
0
0
50,000
25,000
0
(524,000) $

Net cash flow

Starting cash
Ending cash

(335,000) $
701,000
366,000 $

214,000
263,000
583,000
177,000
0
1,237,000
990,000
6,399,000
12,000
8,638,000

67,000
325,000
663,000
157,000
1,527,000
$ 2,739,000
868,000
6,808,000
113,000
#########

234,000
5,000
562,000
0
801,000
3,611,000
981,000
0
638,000
6,031,000
1,912,000
695,000
2,607,000
8,638,000

257,000
22,000
856,000
0
$ 1,135,000
2,912,000
1,324,000
0
136,000
$ 5,507,000
4,014,000
1,007,000
$ 5,021,000
#########

Balance

Balance

(312,000) $
208,000
(343,000)

497,000
169,000
32,000

35,000
300,000
585,000
133,000
579,000
$ 1,632,000
755,000
6,840,000
119,000
$ 9,346,000

$
$

256,000
12,000
1,423,000
0
1,691,000
3,084,000
1,292,000
0
29,000
6,096,000
2,740,000
510,000
3,250,000
9,346,000
Balance

Statement of Cash Flows

Operating Activities
Net income
Depreciation
Change in deferred tax

$
$

Check for consistency with cash shown in balance sheet

629,000
175,000
44,000

OK

386,000
315,000
701,000
OK

$
$

35,000
280,000
315,000
OK

$
$

555,000
224,000
57,000

66,000
214,000
280,000
OK

$
$

62,000
(25,000)
80,000
(78,000)
(20,000)
(24,000)
(23,000)
1,000
(17,000)
10,000
(294,000)
(567,000)
(659,000) $
15,000 $

510,000
139,000
1,292,000
(300,000)
(585,000)
(133,000)
256,000
12,000
1,423,000
2,614,000

(330,000) $ (282,000) $ (894,000)

409,000
32,000
(6,840,000)
79,000 $ (250,000) $ (7,734,000)

1,527,000 $ (948,000) $
101,000
6,000
0
0
699,000
(172,000)
0
0
0
0
502,000
107,000
(2,102,000)
1,274,000
0
0
727,000 $ 267,000 $
147,000
67,000
214,000
OK

$
$

32,000
35,000
67,000
OK

$
$

(579,000)
(119,000)
0
3,084,000
0
0
29,000
2,740,000
0
5,155,000
35,000
0
35,000
OK

Scratch calculations
"Uncapitalizing" Capitalized interest
Annual capitalized interest
Annual reduction in depreciation (assuming straight-line for 20 years)
Annual addition to interest expense
Annual reduction in tax expense
Annual reduction in RE
Cumulative reduction in gross PPE
Cumulative depreciation of capitalized interest
Cumulative reduction in net PPE
Cumulative reduction in RE
Cumulative reduction in book equity as though company had issue special-dividend due to extra
- cash available from
- tax savings

Page 39

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104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135

12/31/2012

12/31/2011

12/31/2010

12/31/2009

12/31/2008

12/31/2007

12/31/2006

5,995,000.0
2,500,000.0

5,903,000.0
2,485,000.0

5,636,000.0
2,243,000.0

5,531,000.0
2,234,000.0

5,710,000.0
2,590,000.0

5,748,000.0
2,617,000.0

4,735,000.0
1,994,000.0

Income Statement
Total net revenues
Cost of goods sold expense
Cost of services or operations expense
Depreciation expense (for tangible assets, if reported separately)
Amortization expense (for goodwill and Intangible, if reported separately)
Depreciation and amortization expense (if reported combined)
Research & development expense
Sales & marketing expenses (if not included in SGA)
General & administrative expenses (if not included in SGA)
Selling, gen. & admin. expense [if reported as a single item]
Minority interest expense (if shown as pre-tax operating expense)
Merger and restructuring costs
Asset impairment losses or write-downs
Extraordinary charges or expenses (if shown on pre-tax basis)
Extraordinary credit or income (if shown on a pre-tax basis)
Other operating expenses (Income)
Interest expense (Income)
Interest capitalized
Interest income
Reserve expense (income) (increase in reserves is expense, decrease is income)
Investment income (Expense) (if shown on pre-tax basis)
Gain (loss) on sale of assets or discontinued operation (if shown on pre-tax basis)
Remitted income (Expense) or equity earnings (Losses) in affiliates
Unremitted income (Expense) or equity earnings (Losses) in affiliates
Minority interest expense (if shown as pre-tax nonoperating expense)
Losses on equity investees and other (if shown on pre-tax basis)
Other nonoperating income (Expense) (if shown on pre-tax basis)
Special nonrecurring items income (Expense) (if shown on pre-tax basis)
Provision for income tax expense (Rebate)
Minority interest expense (if shown on after-tax basis)
Equity in earnings expense (if shown on after-tax basis)
Extraordinary items (if shown on after-tax basis)
Discontinued operations (if shown on after-tax basis)
Extraordinary items and discontinued operations (if shown on after-tax basis)
Investment gains (Losses) (if shown on after-tax basis)
All other income (Losses) (if shown on after-tax basis)
Cumulative effect of accounting changes
Net income from Actual Sheet
Calculated net income from Comprehensive Sheet
Check to see if calculated net income is consistent with Actual sheet

124,000.0

126,000.0

127,000.0

117,000.0

113,000.0

98,000.0

69,000.0

2,268,000.0

2,257,000.0

2,233,000.0

2,135,000.0

2,075,000.0

2,018,000.0

1,659,000.0

1,096,000.0

82,000.0

27,000.0

11,000.0

11,000.0

(123,000.0)

(111,000.0)

8,000.0

(125,000.0)

(40,000.0)

(239,000.0)

4,000.0

(225,000.0)

9,000.0

12,000.0

(79,000.0)

22,000.0

18,000.0

349,000.0

320,000.0

294,000.0

315,000.0

(61,000.0)

1,000.0
-

1,000.0
-

2,000.0
-

2,000.0
-

629,000.0
629,000.0
OK

606,000.0
606,000.0
OK

528,000.0
528,000.0
OK

555,000.0
555,000.0
OK

(312,000.0)
(312,000.0)
OK

366,000.0

701,000.0

315,000.0

280,000.0

214,000.0

(189,000.0)

(211,000.0)

71,000.0

32,000.0

322,000.0

2,000.0
2,000.0
497,000.0
497,000.0
OK

298,000.0

3,000.0
(2,000.0)
510,000.0
510,000.0
OK

Balance Sheet
Assets
Cash and equivalents
Marketable securities
Notes receivable
Short-term investments or investment securities
Accounts receivable
Tax refund receivable
Progress payments
Prepaid expenses
Current deferred tax asset
Inventories
Other nonoperating current assets
Other operating current assets

67,000.0

35,000.0

1,527,000.0

579,000.0

602,000.0

635,000.0

571,000.0

572,000.0

583,000.0

663,000.0

585,000.0

66,000.0
197,000.0

96,000.0
212,000.0

57,000.0
244,000.0

53,000.0
262,000.0

93,000.0
263,000.0

81,000.0
325,000.0

61,000.0
300,000.0

104,000.0
1,335,000

113,000.0
1,757,000

122,000.0
1,309,000

112,000.0
1,279,000

84,000.0
1,237,000

76,000.0
2,739,000

72,000.0
1,632,000

14,000.0

13,000.0

11,000.0

9,000.0

12,000.0

13,000.0

12,000.0

1,202,000.0
2,983,000.0
2,684,000.0

1,152,000.0
2,980,000.0
2,677,000.0

1,168,000.0
2,984,000.0
2,691,000.0

1,109,000.0
2,983,000.0
2,702,000.0

990,000.0
2,983,000.0
2,712,000.0

868,000.0
3,183,000.0
3,617,000.0

755,000.0
3,180,000.0
3,651,000.0

130,000.0

131,000.0

144,000.0

151,000.0

140,000.0

8,000.0

9,000.0

580,000.0

573,000.0

552,000.0

543,000.0

564,000.0

8,928,000.0
8,928,000.0
OK

9,283,000.0
9,283,000.0
OK

8,859,000.0
8,859,000.0
OK

8,776,000.0
8,776,000.0
OK

8,638,000.0
8,638,000.0
OK

250,000.0

452,000.0

404,000.0

283,000.0
65,000.0

265,000.0
65,000.0

298,000.0
65,000.0

70,000.0

68,000.0

56,000.0

45,000.0

530,000.0

18,000.0

Total current assets

Long-term receivables
Investments in unconsolidated subsidiaries
Other investments
Net property, plant, & equip (PPE)
Goodwill (if shown separately)
Intangibles (if shown separately)
Cost in excess of fair value of net assets acquired also called goodwill)
Goodwill and intangibles (if shown combined)
Deferred tax asset (Long-term)
Long-term notes receivable
Other operating long-term assets
Deferred charges
Deposits
Investments & advances to subsidiaries
Other nonoperating long-term assets
Total assets from Actual Sheet
Calculated total assets from Comprehensive Sheet
Check to see if total assets consistent with Actual sheet
Liabilities and Equity
Notes payable
Current portion of long-term debt
Current portion of capitalized leases
All other short-term debt
Accounts payable
Short-term unearned revenue
Interest payable (or accrued interest)
Dividends payable
Short-term deferred taxes
Taxes payable or accrued taxes
Accrued wages or salary
Other accrued expenses or accruals
Other nonoperating current liabilities
Other operating current liabilities

252,000.0
4,000.0

234,000.0
5,000.0

100,000.0
10,528,000.0
10,528,000.0
OK

257,000.0
-

107,000.0
9,346,000.0
9,346,000.0
OK

256,000.0
-

22,000.0

12,000.0

519,000.0
1,232,000

535,000.0
1,915,000

497,000.0
1,338,000

598,000.0
854,000

562,000.0
801,000

856,000.0
1,135,000

1,423,000.0
1,691,000

Non-current portion of long-term debt

Mortgages
Non-current portion of capitalized leases
Convertible debt
Any other long-term debt
Provision for risks and charges
Reserve accounts
Deferred tax liability in untaxed reserves
Deferred income taxes (Long-term)
Deferred income
Long-term unearned revenue
Restructuring obligations
Commitments and contingencies
Other long-term liabilities
Retirement, pension, and health insurance related liabilities
Minority interest
Nonequity reserves
Preferred stock
Common stock (at par)
Common stock capital suprplus or paid-in-capital
Revaluation of reserves
Other appropriated reserves
Unappropriated (free) reserves
Retained earnings
Equity in untaxed reserves
ESOP guarantees
Treasury stock
Common stock warrants and stock options
Other equity
Unrealized gain (loss) on marketable securities
Accumulated other comprehensive income or cumulative other adj.
Unrealized gain (loss) on foreign exchange
Cumulative foreign currency translations
Total shareholder equity from Actual Sheet
Calculated total shareholder equity from Comprehensive Sheet
Check to see if shareholder total eq. is consistent with Actual sheets

2,554,000.0

2,256,000.0

1,687,000.0

2,960,000.0

3,522,000.0

2,912,000.0

3,084,000.0

1,038,000.0

981,000.0

1,324,000.0

1,292,000.0

20,000.0

1,000.0

2,280,000.0
2,280,000.0
OK

2,263,000.0
2,263,000.0
OK

2,459,000.0
2,459,000.0
OK

3,187,000.0
3,187,000.0
OK

2,607,000.0
2,607,000.0
OK

5,021,000.0
5,021,000.0
OK

3,250,000.0
3,250,000.0
OK

136
Total Liabilities and Equity from Actual Sheet
137
Calculated Total Liabilities and Equity from Comprehensive Sheet
138 Check to see if Total Liab. & Eq. consistent with Comprehensive sheet
139
140
Check for balancing of statements
141

8,928,000.0
8,928,000.0
OK

9,283,000.0
9,283,000.0
OK

8,859,000.0
8,859,000.0
OK

8,776,000.0
8,776,000.0
OK

8,638,000.0
8,638,000.0
OK

10,528,000.0
10,528,000.0
OK

9,346,000.0
9,346,000.0
OK

Balances

Balances

Balances

Balances

Balances

Balances

Balances

(284,000.0)
175,000.0

(251,000.0)
167,000.0

(194,000.0)
191,000.0

224,000.0

208,000.0

169,000.0

139,000.0

205,292.7

212,130.2

223,936.2

254,109.0

253,685.7

142
143
144
145
146
147
148
149
150
151
152
153
154
155

Comprehensive Statements

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

Comprehensive

Total current liabilities

630,000.0

586,000.0

1,083,000.0

1,386,000.0

1,449,000.0

1,515,000.0

714,000.0
132,000.0

716,000.0
98,000.0

707,000.0
70,000.0

688,000.0
49,000.0

638,000.0
89,000.0

136,000.0
-

29,000.0
-

1,310,000.0

1,633,000.0

2,087,000.0

3,159,000.0

3,143,000.0

5,001,000.0

3,249,000.0

1,080,000.0

740,000.0

400,000.0

87,000.0

(110,000.0)

(110,000.0)

(28,000.0)

(59,000.0)

(430,000.0)

(106,000.0)

Required Items: You must supply these inputs in the

yellow cells, unless they are truly zero.
Required Items from Statement of Cash Flows
Preferred dividends paid
Common dividends paid
Depreciation of PPE and tangible Assets
Amortization of goodwill and intangibles
Required Items from Footnotes or Annual Report
Number of shares outstanding
Required Items from Financial Statements or User's Judgment
Assumed marginal tax rate

35.7%

34.6%

35.8%

36.3%

16.3%

39.5%

36.9%

6.22%
0%
-

6.22%
0%
-

6.22%
0%
-

6.22%
0%
-

6.22%
0%
-

6.22%
0%
-

6.22%
0%
-

629,000.0
(5,000)
175,000.0
31,000
57,000.0
(481,000)
406,000

606,000.0
(15,000)
167,000.0
(26,000)
(23,000.0)
529,000
1,238,000

528,000.0
(21,000)
191,000.0
3,000
9,000.0
80,000
790,000

555,000.0
(38,000)
224,000.0
29,000
(16,000.0)
53,000
807,000

(312,000.0)
(118,000)
208,000.0
(144,000)
134,000.0
(334,000)
(566,000)

497,000.0
(497,000)
169,000.0
(19,000)
(107,000.0)
(556,000)
(513,000)

510,000.0
(510,000)
139,000.0
(70,000)
(957,000.0)
1,691,000
803,000

(225,000)
(18,000)
(243,000)

(151,000)
(5,000)
(156,000)

(250,000)
(1,000)
(251,000)

(343,000)
34,000
(309,000)

(330,000)
542,000
212,000

(282,000)
30,000
(252,000)

(894,000)
(6,843,000)
(7,737,000)

Net cash from financing activities

(202,000)
298,000
13,000
(323,000)
(284,000)
(498,000)

48,000
569,000
(526,000)
(454,000)
(82,000)
(251,000)
(696,000)

404,000
(1,273,000)
1,600,000
(1,072,000)
31,000
(194,000)
(504,000)

(562,000)
67,000
16,000
47,000
(432,000)

1,527,000
100,000
610,000
248,000
(1,858,000)
(126,000)
501,000

(948,000)
7,000
(172,000)
139,000
1,752,000
19,000
797,000

(579,000)
(107,000)
3,084,000
1,321,000
3,249,000
1,000
6,969,000

Net cash flow

Starting cash from balance sheet
Ending cash
Check to see if ending cash is consistent with balance sheet

(335,000)
701,000
366,000
OK

386,000
315,000
701,000
OK

Optional Items for Special Accounting Adjustments: If you

choose to make any of the special accounting
adjustments described in the Chapter 10 Appendix, then
you must supply these inputs in the yellow cells;
otherwise, just leave them as the default values already
156 here.
157
158
159
160
161
162
163
164
165

LIFO reserve (from Footnotes of Annual Report)

Interest rate on pension liabilities
Interest rate on operating leases
Capitalized value of operating leases
Stock options (Warrants)
Capitalized operating costs
Special goodwill impairment or accounting change

Statement of Cash Flows (Calculated from the

Income Sheet and Balance Sheets shown above.
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198

Operating Activities
Net income
Adjustments for reconciliation of RE account
Depreciation and amortization
Change in deferred tax
Change in operating current assets
Change in operating current liabilities
Net cash from operating activities
Investing Activities
Investment in PPE
Investment in other long-term oper. ass.
Net cash from investing activities
Financing Activities
Changes in short-term investments
Changes in long-term investments
Changes in all short-term debt
Changes in all long-term debt
Changes in all other long-term liabilities
Change in preferred stock
Change in Par + PIC
Change in common stock warrants and stock options
Change in treasury and cumulative adjustments
Preferred dividends
Common dividends

Michael C. Ehrhardt

35,000
280,000
315,000
OK

66,000
214,000
280,000
OK

147,000
67,000
214,000
OK

32,000
35,000
67,000
OK

35,000
35,000
OK

Page 40

4/8/2014

Standardized Annual Income Statement

Report Date
Currency
Audit Status
Consolidated
Scale
Sales Revenue
Total Revenue
Direct Costs
Gross Profit
Selling General & Admin
Depreciation & Amortization
Restruct Remediation & Impair
Other Operating Expense
Total Indirect Operating Costs
Operating Income
Interest Income
Gains on Sale of Assets
Other Non-Operating Income
Total Non-Operating Income
Other Income/Expense
Earnings Before Tax
Taxation
Earnings After Tax
Equity Earnings
Extraordinary Items
Accounting Changes
Net Income
Preference Dividends & Similar
Net Income to Common
Average Shares Basic
EPS Net Basic
EPS Continuing Basic
Average Shares Diluted
EPS Net Diluted
EPS Continuing Diluted
Shares Outstanding

12/31/2012
USD
Not Qualified
Yes
Thousands
5,995,000
5,995,000
2,500,000
3,495,000
2,268,000
124,000

12/31/2011
USD
Not Qualified
Yes
Thousands
5,903,000
5,903,000
2,485,000
3,418,000
2,257,000
126,000

12/31/2010
USD
Not Qualified
Yes
Thousands
5,636,000
5,636,000
2,243,000
3,393,000
2,233,000
127,000

12/31/2009
USD
Not Qualified
Yes
Thousands
5,531,000
5,531,000
2,234,000
3,297,000
2,135,000
117,000

11,000
2,403,000
1,092,000
-123,000

11,000
2,394,000
1,024,000
-111,000

8,000
2,368,000
1,025,000
-125,000

-40,000
2,212,000
1,085,000
-239,000

12/31/2008
USD
Not Qualified
Yes
Thousands
5,710,000
5,710,000
2,590,000
3,120,000
2,075,000
113,000
1,096,000
4,000
3,288,000
-168,000
-225,000

9,000
-114,000

12,000
-99,000

-79,000
-204,000

22,000
-217,000

18,000
-207,000

978,000
349,000
629,000

925,000
320,000
605,000
1,000
0
0
606,000
0
606,000
218,700,000
3
3
221,200,000
3
3
212,130,239

821,000
294,000
527,000
1,000
0
0
528,000
0
528,000
240,400,000
2
2
242,600,000
2
2
223,936,156

868,000
315,000
553,000
2,000
0
0
555,000
0
555,000
254,200,000
2
2
255,200,000
2
2
254,109,047

-375,000
-61,000
-314,000
2,000
0
0
-312,000
0
-312,000
254,000,000
-1.23
-1.23
254,000,000
-1.23
-1.23
253,685,733

12/31/2010
USD
Not Qualified
Yes
Thousands
528,000
364,000
1,643,000
2,535,000
-246,000
-1,000
18,000

12/31/2009
USD
Not Qualified
Yes
Thousands
555,000
332,000
-22,000
865,000
-317,000

7,000

12/31/2011
USD
Not Qualified
Yes
Thousands
606,000
-273,000
427,000
760,000
-215,000
-2,000
3,000

-7,000
-193,000

-3,000
-217,000

4,000
-225,000

61,000
-251,000

50,000
-362,000
-284,000
-7,000
-603,000
3,000
-335,000
701,000
366,000
175,000
-186,000

600,000
-492,000
-251,000
-9,000
-152,000
-5,000
386,000
315,000
701,000
167,000
-212,000

-978,000
-1,107,000
-194,000
-1,000
-2,280,000
5,000
35,000
280,000
315,000
191,000
-228,000

-550,000
1,000

0
0
629,000
0
629,000
210,600,000
3
3
212,300,000
3
3
205,292,657

12/31/2007
USD
Not Qualified
Yes
Thousands
5,748,000
5,748,000
2,617,000
3,131,000
2,018,000
98,000
82,000
0
2,198,000
933,000
-189,000
71,000

12/31/2006
USD
Not Qualified
Yes
Thousands
4,735,000
4,735,000
1,994,000
2,741,000
1,659,000
69,000
27,000
0
1,755,000
986,000
-211,000
32,000

71,000
2,000
817,000
322,000
495,000
2,000
0
0
497,000
0
497,000

32,000
-2,000
805,000
298,000
507,000
3,000
0
0
510,000
0
510,000

12/31/2008
USD
Not Qualified
Yes
Thousands
-312,000
1,058,000
-37,000
709,000
-304,000
-165,000
4,000
1,540,000
-1,000
1,074,000
0
456,000

12/31/2007
USD
Not Qualified
Yes
Thousands
497,000
185,000
-79,000
603,000
-230,000
-1,967,000
6,000
1,008,000
96,000
-1,087,000

12/31/2006
USD
Not Qualified
Yes
Thousands
510,000
132,000
-61,000
581,000
-158,000
-526,000
16,000
166,000
0
-502,000

-610,000
4,000

30,000
1,000

-2,081,000
-1,625,000
-11,000
147,000
67,000
214,000
208,000
-300,000

1,121,000
515,000
1,000
32,000
35,000
67,000
169,000
-224,000

-103,000
-72,000

Standardized Annual Cash Flows

Report Date
Currency
Audit Status
Consolidated
Scale
Net Income
Adjustments from Inc to Cash
Change in Working Capital
Cash Flow from Operations
Purchase of Pty Plant & Equip
Purchase of Investments
Proceeds from Pty Plant & Equip
Disposal of Investments
Other Investing Cash Flows
Cash Flow from Investing
Change in ST Debt
Change in LT Debt
Change in Equity
Payment of Dividends
Other Financing Cash Flows
Cash Flow from Financing
Effect of Exchange Rate
Change in Cash
Opening Cash
Closing Cash
Depn & Amortn (CF)
Net Purch of Pty Plant & Equip

12/31/2012
USD
Not Qualified
Yes
Thousands
629,000
283,000
-454,000
458,000
-193,000

5,000

-5,000
-554,000
6,000
66,000
214,000
280,000
224,000
-312,000

7,000
28,000
35,000
139,000
-142,000

EBITDA

1,216,000

As Reported Annual Balance Sheet

Report Date
Currency
Audit Status
Consolidated
Scale
Cash & cash equivalents
Accounts receivable, trade, gross
Less: allowance for doubtful accounts
Accounts receivable, trade, net
Accounts receivable, other
Related party receivable
Note receivable from related parties
Raw materials
Work in process
Finished goods
Inventories at first-in, first-out (FIFO)
Reduction to last-in, first-out (LIFO) cost
Inventories
Deferred tax assets
Prepaid expenses & other current assets
Total current assets
Land
Buildings & improvements
Machinery & equipment
Cold drink equipment
Software
Construction in progress
Gross property, plant & equipment
Less: accumulated depreciation & amortization
Property, plant & equipment, net
Investments in unconsolidated subsidiaries
Goodwill, net
Other intangible assets, gross
Less: accumulated amortization - other intangible assets
Other intangible assets, net
Long-term receivables from Cadbury
Long-term receivables from Kraft Foods Inc. (Kraft)
Long-term receivables Mondelez
Deferred financing costs, net
Customer incentive programs
Derivative instruments
Other non-current assets
Other non-current assets
Other non-current assets
Non-current deferred tax assets
Total assets
Trade accounts payable
Customer rebates
Accrued compensation
Insurance reserves
Third party interest accrual & interest rate swap liability
Interest accrual & interest rate swap liability
Dividends payable
Other current liabilities
Total Other Current Liabilities
Accounts payable & accrued expenses
Accounts payable
Deferred revenue
Related party payable
Current portion of long-term debt payable to related parties
Current portion of long-term obligations
Income taxes payable
Total current liabilities
Senior unsecured notes
Revolving credit facility
Less: current portion
Subtotal - long-term obligations
Long-term capital lease obligations
Long-term obligations
Long-term debt payable to related parties
Long-term debt payable to third parties
Non-current deferred tax liabilities
Non-current deferred revenue
Long-term payables due to Cadbury
Long-term payable due to Mondelez

12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006

USD
USD
USD
USD
USD
USD
USD
Not
Not
Not
Not
Not
Not
Not
Qualified
Qualified
Qualified
Qualified
Qualified
Qualified
Qualified
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Thousands Thousands Thousands Thousands Thousands Thousands Thousands
366,000
701,000
315,000
280,000
214,000
67,000
35,000
555,000
588,000
541,000
547,000
545,000
558,000
576,000
3,000
3,000
5,000
7,000
13,000
20,000
14,000
552,000
585,000
536,000
540,000
532,000
538,000
562,000
50,000
50,000
35,000
32,000
51,000
59,000
18,000
66,000
5,000
1,527,000
579,000
114,000
91,000
97,000
105,000
78,000
110,000
105,000
5,000
4,000
5,000
4,000
5,000
151,000
171,000
184,000
193,000
235,000
245,000
214,000
270,000
266,000
286,000
73,000
54,000
42,000
40,000
50,000
30,000
24,000
197,000
212,000
244,000
262,000
263,000
325,000
300,000
66,000
96,000
57,000
53,000
93,000
81,000
61,000
104,000
113,000
122,000
112,000
84,000
76,000
72,000
1,335,000
1,757,000
1,309,000
1,279,000
1,237,000
2,739,000
1,632,000
72,000
80,000
81,000
90,000
84,000
90,000
79,000
465,000
422,000
408,000
341,000
272,000
284,000
265,000
1,275,000
1,165,000
1,084,000
995,000
911,000
570,000
472,000
308,000
284,000
265,000
201,000
157,000
282,000
258,000
195,000
181,000
153,000
136,000
111,000
125,000
105,000
50,000
58,000
90,000
135,000
141,000
120,000
75,000
2,365,000
2,190,000
2,081,000
1,898,000
1,676,000
1,471,000
1,254,000
1,163,000
1,038,000
913,000
789,000
686,000
603,000
499,000
1,202,000
1,152,000
1,168,000
1,109,000
990,000
868,000
755,000
14,000
13,000
11,000
9,000
12,000
13,000
12,000
2,983,000
2,980,000
2,984,000
2,983,000
2,983,000
3,183,000
3,180,000
2,795,000
2,783,000
2,788,000
111,000
106,000
97,000
2,684,000
2,677,000
2,691,000
2,702,000
2,712,000
3,617,000
3,651,000
386,000
430,000
419,000
402,000
439,000
13,000
15,000
15,000
23,000
66,000
63,000
82,000
84,000
84,000
83,000
26,000
23,000
39,000
23,000
34,000
34,000
29,000
580,000
573,000
552,000
543,000
564,000
100,000
107,000
130,000
131,000
144,000
151,000
140,000
8,000
9,000
8,928,000
9,283,000
8,859,000
8,776,000
8,638,000 10,528,000
9,346,000
226000
105000
43000

225000
98000
35000

224,000
102,000
29,000

27000
70000
118000
589000

52000
68000
125000
603000

283,000
65,000

265,000
65,000

16,000
56,000
126,000
553000
851,000
298,000
65,000

250,000
45,000
1,232,000
2,748,000

452,000
530,000
1,915,000
2,701,000

404,000
18,000
1,338,000
2,081,000

250,000
2,498,000
56,000
2,554,000

452,000
2,249,000
7,000
2,256,000

404,000
1,677,000
10,000
1,687,000

630,000
1,386,000

586,000
1,449,000

1,083,000
1,515,000

209,000
126,000
68,000
24,000

177,000
86,000
59,000
58,000

200,000
127,000

184,000
96,000

171,000
598000
850,000
252,000

182,000
562000
796,000
234,000

228,000
555000
812,000
257,000

252,000
532000
788,000
256,000

175,000
126,000

183,000
708,000

5,000
801,000

22,000
1,135,000

12,000
1,691,000

3,522,000
981,000

2,893,000
19,000
1,324,000

2,541,000
543,000
1,292,000

4,000
854,000
2,542,000
405,000
2,947,000
13,000
2,960,000

1,038,000

112,000
98,000

Long-term payables due to Kraft

Liabilities for unrecognized tax benefits
Liabilities for unrecognized tax benefits & other tax related items 574,000
Long-term pension & postretirement liability
55,000
Insurance liability
77,000
Other non-current liabilities
42,000
Other non-current liabilities
846,000
Total liabilities
6,648,000
Cadbury Schweppes' net investment
Common stock
2,000
Additional paid-in capital
1,308,000
Retained earnings (accumulated deficit)
1,080,000
Net foreign currency translation adjustment
-8,000
Net change in pension liability
-56,000
Net cash flow hedges
-46,000
Accumulated other comprehensive income (loss)
-110,000
Total stockholders' equity
2,280,000

102,000

112,000

115,000

567,000
44,000
54,000
47,000
814,000
7,020,000

561,000
19,000
51,000
34,000
777,000
6,400,000

534,000
49,000

89,000

39,000
737,000
5,589,000

11,000
727,000
6,031,000

2,000
1,631,000
740,000
-27,000
-48,000
-35,000
-110,000
2,263,000

2,000
2,085,000
400,000
7,000
-31,000
-4,000
-28,000
2,459,000

3,000
3,156,000
87,000

3,000
3,140,000
-430,000

-59,000
3,187,000

-106,000
2,607,000

515,000

136,000

29,000

5,507,000
5,001,000

6,096,000
3,249,000

20,000
5,021,000

1,000
3,250,000