Performance Coatings Historical Performance

(dollars in millions)
5-year
2007 2008 2009 2010 2011 CAGR
Net Sales $4,347 $4,360 $3,428 $3,806 $4,281 -0.3%
Year-over-Year Growth 0.3% -21.4% 11.0% 12.5%
Pretax Operating Income 366 -8 69 255 268 -6.0%
Margin 8.4% -0.2% 2.0% 6.7% 6.3%

Depreciation and Amortization 107 111 123 105 104

Research and Development 71 69 56 48 46
Capital Expenditures 126 91 55 74 80
Segment Net Assets 2,607 2,226 2,018 2,047 2,107

Sales by Industry
Aftermarket (refinishing) 53% 44% 43%
Vehicle OEM 28% 36% 37%
General Industrial 14% 14% 15%
Other 5% 6% 5%

Sales by Region
North America 26% 27% 27%
Asia-Pacific 12% 13% 13%
Europe, Middle East, and Africa 46% 44% 43%
Latin America 16% 18% 17%

Data source: Company Databooks, various years.

Stand-Alone Valuation
(dollars in millions)
PPG Industries
Metric Actual Projected
2011 2012E 2013E
Sales Growth (%) 10.9% 4.1% 4.3%
EBIT Margin (Pretax) 11.2% 11.0% 12.0%
EV/EBITDA 2012 (×) 7.3

DuPont Performance Coatings

Metric Projected
Closing
2011A 2012E 2013E 2014E
Sales Growth (%) 12.5% 4.0% 4.0% 4.0%
Depreciation and Amortization $104 $115 $118 $122
EBIT Margin (Pretax) 6.3% 10.0% 10.0% 10.0%
Tax Rate1 25% 25% 25% 25%
Capital Expenditures $80 $115 $122 $132
Net Working Capital (%) 15.0% 15.0% 15.0%

Terminal EBITDA Multiple (×) 2

Debt/EBITDA 2012 (×) N/A
Debt
Blended Interest Rate on Debt 6.75%
Unlevered Cost of Equity 3 11.2%

APV Analysis
2011A Closing 2012E 2013E 2014E
Net Sales $4,281 $4,452 $4,630 $4,816
EBITDA $372 $560 $581 $604
Depreciation and Amortization $104 $115 $118 $122
Pretax Operating Income (EBIT) $268 $445 $463 $482
Interest Expense $0 $0 $0
Earnings before Taxes $445 $463 $482
Taxes ($111) ($116) ($120)
Net Income $334 $347 $361
Increase in Net Working Capital ($26) ($27) ($28)
Capital Expenditures ($115) ($122) ($132)
Residual (Levered) Cash Flow $308 $317 $323

Unlevered Free Cash Flow (FCF) $308 $317 $323

Terminal Value
Unlevered FCF, including TV $308 $317 $323
Enterprise Value (EV) $3,970
Interest Tax Shield
PV Tax Shield
EV with Tax Shield $3,970
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
taxed 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
because 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
a 6% market risk premium.
Projected
2015E 2016E
4.0% 4.0%
$125 $130
10.0% 10.0%
25% 25%
$144 $150
15.0% 15.0%

7.0

2015E 2016E
$5,008 $5,208
$626 $651
$125 $130
$501 $521
$0 $0
$501 $521
($125) ($130)
$376 $391
($29) ($30)
($144) ($150)
$327 $341

$327 $341
$4,738
$327 $5,079
e case writer estimates. PPG’s
kingham Research Group analyst

esult of international operations

7 and is below PPG’s multiple

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

 DuPont Performance Coatings EBITDA Exit Multiple: 7.00x
APV Analysis Assumed Debt / 2012 EBITDA: 5.00x
Rd: 6.75%
Unlevered Re: 11.20% 13.32% 24.09%
Tax Rate: 25.00%
Purchase Bid ($M): $ 4,750

2012E 2013E 2014E 2015E 2016E

Net Sales
Y-o-Y Growth 5.00% 5.00% 5.00% 5.00% 5.00%
Operating Income (EBIT)
EBIT Margin 12.00% 12.00% 12.00% 12.00% 12.00%

Depreciation and Amortization $ 115 $ 118 $ 122 $ 125 $ 130

Capital Expenditures $ 115 $ 122 $ 132 $ 144 $ 150
NWC % Sales 15.0% 15.0% 15.0% 15.0% 15.0%

@ Close 2012E 2013E 2014E 2015E 2016E

Sales $ 4,495 $ 4,720 $ 4,956 $ 5,204 $ 5,464
EBIT $ 539 $ 566 $ 595 $ 624 $ 656
less taxes ($135) ($142) ($149) ($156) ($164)
NOPAT $ 405 $ 425 $ 446 $ 468 $ 492

plus Depreciation $ 115 $ 118 $ 122 $ 125 $ 130

less Capital Expenditures ($115) ($122) ($132) ($144) ($150)
less Increase in NWC ($32) ($34) ($35) ($37) ($39)
Unlevered FCF $ 372 $ 387 $ 401 $ 412 $ 433
Terminal Value $ 5,500
Total Unlevered FCF $ - $ 126 $ 387 $ 401 $ 412 $ 5,932
Unlevered Enterprise Value (EV) $ 5,059
Stand Alone Unlevered NPV $ 309
Stand Alone Unlevered IRR @ $4750 Bid 13.32%
-$ 4,750 $ 126 $ 387 $ 401 $ 412 $ 5,932
8/30/2012 11/1/2012 7/1/2013 7/1/2014 7/1/2015 7/1/2016
12/31/2012
FCF to Equity
Debt Available @ Close $ 3,272.0
Interest Expense ($74) ($221) ($221) ($221) ($221)
Levered FCF -$ 1,478 $ 51 $ 166 $ 180 $ 191 $ 2,439
Stand Alone Levered IRR @ $4750 Bid 24.09%

PV of Debt Tax Shield

Outstanding Debt $ 3,272.0
Tax rate 25.00%
PV of Tax Shield - Perpetual $ 818.0
PV of Tax Shield - Horizon Only $ 208.5
$0.0 $18.6 $55.2 $55.2 $55.2 $55.2
 Financial Characteristics of Potential Strategic Buyers
(fiscal-year-end values in millions, except multiples and percentages)

Market
Capitalization
12/31/2011 Revenues EBITDA Total Debt
Akzo Nobel N.V. $11,837 $18,972 $2,311 4,585
BASF SE $66,702 $95,482 $15,205 16,972
PPG Industries $12,893 $14,885 $2,141 3,682
Sherwin-Williams $9,263 $8,766 $956 993
Valspar $3,637 $3,953 $513 1,057

Data source: Financial data are from Capital IQ; stock price performance is based on CRSP data.
al Strategic Buyers
multiples and percentages)

Total Debt/ 5-Year Stock 1-Year Stock

EBITDA Performance Performance
2.0× NA -21.0%
1.1× -5.4% -12.8%
1.7× 30.0% -0.7%
1.0× 40.4% 6.6%
2.1× 41.0% 13.0%
 Volume and Number of Buyout Deals above $1 Billion

$600 120

$500 98 100
Deal Volume ($ billions)

$400 80

No. Deals > $1 B

$300 61 60

$200 41 40
33 36
28 31
$100 20
10
$0 0
2004 2005 2006 2007 2008 2009 2010 2011

Above $1B Under $1B No. Deals > $1B

Debt, Equity, and Purchase Price Multiples for Buyout Deals

Medians 2004 2005 2006 2007 2008 2009 2010

Total Debt/EBITDA 5.3 5 5.9 7.6 4.4 3.3 4.6
Equity/EBITDA 2.3 3.2 3.1 1.2 5 3.2 2.7
Purchase Price/EBITDA 7.6 8.2 9 8.8 9.4 6.5 7.3

Data source: PitchBook, Annual Private Equity Breakdown 2012.

2011
6.2
2.8
9.0
 Number of Exits by Exit Type

300
266
252
250 240
229
219
200 193
Number of Exits

164
150 142 150
150
107
100
66
51
50 40
24 33 30
14
0
2006 2007 2008 2009 2010 2011

Strategic buyer PE-backed IPOs Secondary buyouts

Exit Multiple by Exit Type

Medians 2006 2007 2008 2009 2010 2011 Average
Strategic buyer 9.5 10.9 9.5 8.0 8.5 8.7 9.2
PE-backed IPOs 5.8 11.7 10.8 7.4 7.2 5.1 8.0
Secondary buyouts 11.0 6.9 9.8 12.4 9.4 9.6 9.9

Data source: PitchBook and Grant Thornton, Private Equity Exits Report, 2012 Annual Edition.