Stand-Alone Valuation

(dollars in millions)
PPG Industries
Metric Actual Projected
2011 2012E 2013E
Crecimiento de las Ventas 10.9% 4.1% 4.3%
Margen EBIT antes de impuestos 11.2% 11.0% 12.0%
EV/EBITDA 2012 (×) 7.3

DuPont Performance Coatings

Metric Projected
Closing
2011A 2012E 2013E 2014E
Crecimiento de las Ventas 12.5% 5.0% 5.0% 5.0%
Depreciacion y Amortizacion $104 $115 $118 $122
Margen EBIT antes de impuestos 6.3% 12.0% 12.0% 12.0%
Tasa de Impuestos 25% 25% 25% 25%
Gastos de Capital $80 $115 $122 $132
Capital de Trabajo Neto 15.0% 15.0% 15.0%

Multiplo EBIT (×) 2

Debt/EBITDA 2012 (×) N/A
Debt
Tasa de Interes Combinada sobre
Deuda
6.75%
Costo de Capital no Apalancado 11.2%

APV Analysis
2011A Closing 2012E 2013E 2014E
Ventas Netas $4,281 $4,495 $4,281 $4,506
EBITDA $372 $654 $632 $663
Depreciacion y Amortizacion. $104 $115 $118 $122
Ingresos Operativos antes de Impues $268 $539 $514 $541
Gastos por Intereses $0 $0 $0
Ganancias Antes de Impuestos $539 $514 $541
Impuestos ($135) ($128) ($135)
Ingresos Netos $405 $385 $406
Aumento del Capital de Trabajo Neto ($32) $32 ($34)
Gastos de Capital ($115) ($122) ($132)
Flujo de Caja Residual (Apalancado) $372 $413 $362

Flujo de caja libre sin

apalancamiento $372 $413 $362
Valor Terminal
FCF sin apalancamiento, incluida la
TV $372 $413 $362

Valor empresarial (EV) $4,518

Escudo de impuestos sobre

intereses

Escudo fiscal PV
EV Escudo Fiscal
Escudo fiscal PV $4,518

Deuda 6 Forward de Ebitda 6 6 6

Valor Deuda 3,926 3,790 3,976

                                                              i.      ¿Cuáles son las ventajas y riesgos de este LBO?

Data sources: Historical information for DPC is from DuPont company Databooks. Projections are case writer estimates. PPG’s
enterprise value is based on prices at the end of January 2012. PPG’s projections are based on Buckingham Research Group analyst
report, PPG Industries: “Other” Industrial Coatings Review, May 21, 2012.
 
Notes to stand-alone model:
1
DPC’s estimated average tax rate of 25% is lower than the U.S. marginal corporate tax rate as a result of international operations taxe
at lower rates.
2
Assumed forward exit multiple for Terminal Value is based on projected EBITDA growth in 2017 and is below PPG’s multiple becau
of lower margins and slightly lower growth.
3
Unlevered Cost of Equity (ku) is based on PPG’s estimated unlevered beta of 1.2, a normalized 4% long-term U.S. Treasury rate, and
6% market risk premium.
Projected
2015E 2016E
5.0% 5.0%
$125 $130
12.0% 12.0%
25% 25%
$144 $150
15.0% 15.0%

7.5

2015E 2016E
$4,495 $4,506
$664 $671
$125 $130
$539 $541
$0 $0
$539 $541
($135) ($135)
$405 $406
$2 ($2)
($144) ($150)
$387 $384

$387 $384
$5,282
 $387 $5,666

6 6
3,986 4,025

case writer estimates. PPG’s

kingham Research Group analyst

esult of international operations taxed

and is below PPG’s multiple because

% long-term U.S. Treasury rate, and a