Discounted Cash Flow (DCF) Analysis

($ in millions, except per share data)

Today
12/31/12

3 Quarters
Ending
9/30/13

Projecte
2014

2015

0.75
0.75

1.00
1.75

1.00
2.75

$94.9

$155.9

$160.1

$82.7
(28.9)
53.8
12.2
(12.8)
2.0

$55.1

$139.7
(48.9)
90.8
16.2
(18.0)
(3.8)

$85.2

$143.9
(50.4)
93.5
16.2
(19.0)
(1.3)

$89.5

$55.1

$85.2

$89.5

$55.1

$85.2

$89.5

Fractional years per period

Cumulative fractional years from close
Assumptions
Net debt
Fully diluted shares outstanding
Tax rate

$25.6
35.159
35.0%

Unlevered Free Cash Flow (UFCF)

EBITDA
EBITA
( ) Taxes
Unlevered net income
( + ) Depreciation
( ) Capital expenditures
( ) Change in working capital
( ) Change in deferred taxes
Unlevered free cash flow
DCF Valuation XNPV Method
( + ) Terminal cash flow (5.0x terminal multiple)
Total cash flow EBITDA multiple method

DCF valuation (XNPV) EBITDA multiple m $773.1

Check that XNPV yields same result as formula

( + ) Terminal cash flow (0.5% terminal growth)

Total cash flow perpetuity growth method

DCF valuation (XNPV) perpetuity growth $766.3

Check that XNPV yields same result as formula

DCF Sensitivity EBITDA Multiple Method

NOTE: Enterprise value can be computed more simply using TABLEs sensitizing the XNPV result to the WACC
can be performed without TABLEs, which are slow to calculate.
Enterprise Value
Terminal EBITDA Multiple

Equity Value
Terminal EBITDA Mu

Discount
Rate
(WACC)

Discount
Rate
(WACC)

11.0%
12.0%
13.0%

11.0%
12.0%
13.0%

4.5x
$751.7
$725.7
$700.9

5.0x
$801.2
$773.1
$746.3

5.5x
$850.6
$820.5
$791.8

Implied Perpetuity Growth Rate

Terminal EBITDA Multiple
4.5x
5.0x
5.5x
(1.4%)
(0.3%)
0.7%
(0.5%)
0.6%
1.6%
0.4%
1.5%
2.5%

4.5x
$726.1
$700.1
$675.3

Value Per Share

Terminal EBITDA Mu
4.5x
$20.65
$19.91
$19.21

DCF Sensitivity Perpetuity Growth Method

NOTE: Enterprise value can be computed more simply using TABLEs sensitizing the XNPV result to the WACC
can be performed without TABLEs, which are slow to calculate.

Discount
Rate
(WACC)

Discount
Rate
(WACC)

11.0%
12.0%
13.0%

Enterprise Value
Terminal Perpetuity Growth Rate

0.5%
1.0%
$813.7
$840.5
$870.0
$744.6
$766.3
$789.9
$686.1
$704.0
$723.3

Equity Value
Terminal Perpetuity Grow

$788.1
$719.0
$660.5

11.0%
12.0%
13.0%

Implied Terminal EBITDA Multiple

Terminal Perpetuity Growth Rate

0.5%
1.0%
5.1x
5.4x
5.7x
4.7x
4.9x
5.2x
4.3x
4.5x
4.7x

Value Per Share

Terminal Perpetuity Grow

$22.42
$20.45
$18.79

Projected Fiscal Years Ending September 30,

2016
2017
2018
2019
2020

2021

2022

1.00
3.75

1.00
4.75

1.00
5.75

1.00
6.75

1.00
7.75

1.00
8.75

1.00
9.75

$161.3

$162.4

$163.6

$164.8

$166.0

$167.2

$168.5

$144.9
(50.7)
94.2
16.4
(19.2)
(0.4)

$91.0

$145.9
(51.1)
94.9
16.5
(19.3)
(0.4)

$91.6

$147.0
(51.4)
95.5
16.6
(19.5)
(0.4)

$92.2

$148.1
(51.8)
96.2
16.8
(19.7)
(0.4)

$92.9

$150.7
(52.8)
98.0
15.3
(19.9)
(0.4)

$93.0

$152.4
(53.3)
99.0
14.9
(20.0)
(0.4)

$93.4

$153.4
(53.7)
99.7
15.0
(20.2)
(0.4)

$94.1

$91.0

$812.2
$903.8

$91.0

$800.5
$892.1

XNPV result to the WACC and terminal multiple, but TABLEs were purposefully avoided to illustrate how this sensitivity

Equity Value
Terminal EBITDA Multiple

5.0x
$775.6
$747.5
$720.7

5.5x
$825.0
$794.9
$766.2

Value Per Share

Terminal EBITDA Multiple
5.0x
5.5x
$22.06
$23.47
$21.26
$22.61
$20.50
$21.79

XNPV result to the WACC and terminal growth rate, but TABLEs were purposefully avoided to illustrate how this sensitivity

Equity Value
Terminal Perpetuity Growth Rate
0.5%
1.0%
$814.9
$844.4
$740.7
$764.4
$678.4
$697.7

Value Per Share

Terminal Perpetuity Growth Rate
0.5%
1.0%
$23.18
$24.02
$21.07
$21.74
$19.29
$19.84

strate how this sensitivity

illustrate how this sensitivity