1976 $MM 1981 $MM 1987 $MM 1991 $MM Exhibit 1 Top Integrated Circuit Manufacturers, Worldwide Revenues ($ Millions)

Exhibit 1 Top Integrated Circuit Manufacturers, Worldwide Revenues ($ millions)
1976 $MM 1981 $MM 1987 $MM 1991 $MM

TI 135 Intel 491 NEC 2,006 NEC 4,742
Intel 132 NEC 438 Toshiba 1,566 Intel 4,059
NEC 74 Motorola 372 Intel 1,473 Toshiba 3,910
Gen’l Inst. 68 TI 350 Hitachi 1,236 Hitachi 3,587
National 67 Hitachi 288 Fujitsu 1,014 Motorola 3,096
Hitachi 63 National 255 Motorola 986 TI 2,667
AMI 59 Toshiba 250 Mitsubishi 811 Mitsubishi 2,121
Mostek 56 Fujitsu 218 TI 784 AMD 1,185
Motorola 55 Mostek 210 Matsushita 593 VLSI Tech. 165
Rockwell 50 Gen’l Inst. 141 OKI 566 Chips & Tech. 158
Source: Dataquest, 1992

Exhibit 2: Annual Income Statements
December December December December December December
1991(E) 1990 1989 1988 1987 1986
Sales 4,779 3,921 3,127 2,875 1,907 1,265
Cost of goods sold 1,898 1,638 1,440 1,295 872 687
Gross profit 2,881 2,283 1,687 1,580 1,035 578
SG & A, of which: 1,383 1,133 849 775 618 540
R&D 618 517 365 318 260 228
advertising expense 121 94 55 55 28 28
Operating income before depreciation
1,498 1,151 838 805 417 38
Depreciation, depletion, and amortization
418 292 237 211 171 174
Operating profit 1,080 858 601 594 246 (135)
Interest expense 105 102 102 78 66 39
Interest income 194 203 154 102 61 42
Other nonoperating income 26 27 (70) 11 46 (42)
Pretax income 1,195 986 583 629 288 (175)
Total income taxes 376 336 192 176 112 9
Income before extraordinary items and discontinued operations
extraordinary
819 650 391 453 176 (183)
items 0 0 0 0 73 10
Net income 819 650 391 453 248 (173)
Earnings per share (fully diluted)
3.62 3.19 2.06 2.51 1.38 -0.99
Common shares outstanding 208.99 199.65 184.52 180.54 168.33 176.66
Book value per share 21.14 17.99 13.81 11.52 7.76 7.22
Market-to-book ratio (end of year)
2.01 2.14 2.50 2.06 3.41 1.94
Tax rate 0.3146444 0.34077079 0.32933105 0.27980922 0.38888889 -0.05142857

Source: Intel Corp. 1991 figures include casewriter estimates.
YoY EBIT Growth 25.87%
Exhibit 3: Annual Balance Sheet ($ millions)

1991(E) 1990 1989 1988 1987 1986
Assets:
Cash and equivalents 2,277 1,785 1,090 971 619 373
Net receivables 698 710 569 506 439 298
Inventories 422 415 347 366 236 198
Other current assets 207 209 157 126 138 154
Total Current Assets 3,604 3,119 2,163 1,970 1,431 1,024
Gross PP&E 3,723 2,814 2,249 1,898 1,536 1,364
Accumulated depreciation 1,560 1,156 965 775 645 585
Net PP&E 2,163 1,658 1,284 1,122 891 779
Long-term investmentsa 480 561 508 422 262 264
Other assets 46 38 39 36 13 13
Total Assets 6,292 5,276 3,994 3,550 2,597 2,080
Liabilities:
Long-term debt: current portion 0 86 16 0 117 0
Notes payable 173 193 140 217 335 112
Accounts payable 245 209 165 153 115 62
Taxes payable 152 241 167 156 25 15
Accrued expenses 536 464 337 308 206 118
Deferred income on shipment to distributors 122 121 96 100 83 67
Total Current Liabilities 1,228 1,314 921 934 882 374
Long-term debt 363 345 412 479 298 287
Deferred taxes 144 126 111 56 105 132
Investment tax credit 0 0 0 0 6 12
Equity:
Common stock + capital surplusb 1,411 1,404 1,011 861 540 757
Retained earningsb 3,007 2,188 1,538 1,219 766 518
Common equity 4,418 3,592 2,549 2,080 1,306 1,275
Put warrants 140 0 0 0 0 0
Total Equity 4,558 3,592 2,549 2,080 1,306 1,275
Total Liabilities and Equity 6,292 5,376 3,994 3,550 2,597 2,080
Capital Expenditures: 948 680 422 362 302 155

(Cash + Long-term investments - Long-term debt) / assets 0.38 0.37 0.30 0.26 0.22 0.17
nts
1985 1984 1983 1982 1981 1980
1,365 1,629 1,122 900 789 855
784 774 539 467 395 350
581 855 583 432 393 504
482 496 359 329 301 272
195 180 142 131 116 96
30 24 16 14 14 12
99 359 224 103 93 232
159 109 85 75 63 49
(60) 250 139 28 30 183
26 15 17 17 15 8
53 57 46 18 21 9
27 6 10 2 5 0
(5) 298 178 30 40 185
(7) 100 62 0 13 89
2 198 116 30 40 185

0 0 0 0 0 0
2 198 116 30 27 97
0.01 1.13 0.70 0.22 0.20 0.74

174.12 170.75 167.55 136.09 131.3 128.21
8.16 7.97 6.60 4.06 3.72 3.38
2.39 2.34 4.18 3.19 2.02 3.97
1.4 0.33557047 0.34831461 0 0.325 0.48108108
illions)
1985 1984 1983 1982 1981 1980
361 231 389 85 115 128
364 354 303 221 180 196
171 219 152 122 97 91
128 154 89 100 67 32
1,024 958 933 528 460 447
1,338 1,165 801 697 591 447
490 386 297 236 179 126
848 778 504 462 412 321
267 272 217 51 0 0
12 21 26 16 0 0
2,152 2,029 1,680 1,056 872 767
4 0 0 0 0 0
84 66 81 75 32 12
57 80 79 39 32 12
3 40 18 0 0 4
85 117 73 56 46 55
72 88 74 52 53 46
307 390 326 223 172 147
271 146 128 197 150 150
134 113 89 68 44 23
19 20 15 17 18 14
730 671 631 177 143 128

691 689 491 375 345 305
1,421 1,360 1,122 552 488 433
0 0 0 0 0 0
1,421 1,360 1,122 552 488 433
2,152 2,029 1,680 1,056 872 767
236 388 145 138 157 156

0.17 0.18 0.28 -0.06 -0.04 -0.03
US GDP growth rate
Year GDP growth Change
1980 -0.26% -3.42%
1981 2.54% 2.79%
1982 -1.80% -4.34%
1983 4.58% 6.39%
1984 7.24% 2.65%
1985 4.17% -3.07%
1986 3.46% -0.71%
1987 3.46% 0.00%
1988 4.18% 0.72%
1989 3.67% -0.50%
1990 1.89% -1.79%
US GDP growth rate
0.08
7.24%
0.06
4.58%
0.04 4.17% 4.18%
3.46% 3.46%
2.54%
0.02
0 -0.26%
1980 1981 1982 1983 1984 1985 1986 1987 1988 198
-0.02 -1.80%
-0.04
rowth rate
24%
4.17% 4.18%
3.46% 3.46% 3.67%
1.89%
1985 1986 1987 1988 1989 1990

Exhibit 4 Analyst Estimates of Market Segments 1987 to 1991 ($ millions)
1987 1988 1989 1990 1991

Segment Sales:
EPROMS 130 220 265 252 228
SRAM 103 180 140 116 113
Other 102 137 120 133 131
Memory 335 537 525 501 472
8086 Family 69 39 29 18 12
80286 275 202 98 63 41
80386 210 538 822 1084 1361
80486 0 0 22 338 713
80586 0 0 0 0 0
i860 0 0 18 70 65
Coprocessors 81 175 163 233 255
Other 37 35 22 48 54
Microprocessors 672 989 1174 1854 2501
8-bit microcontrollers 200 255 245 223 195
16-bit microcontrollers 67 110 120 143 177
Microcontrollers 267 365 365 366 372
Processor Support 94 145 160 159 222
Graphics/Disk Controllers 58 73 80 79 122
Communications 53 84 75 63 117
Peripherals 205 302 315 301 461
OEM PC 0 0 45 175 295
Other Systems 428 682 702 723 723
Systems 428 682 747 898 1018
Total 1907 2875 3126 3920 4824
Operating Profit:
Memory 41 81 50 57 51
Peripherals 23 50 61 65 91
Systems 60 117 116 174 123
Total 246 594 557 858 1087
Operating Margin:
Memory 12% 15% 10% 11% 11%
Peripherals 11 17 19 22 20
Systems 14 17 16 19 12
Total 13 21 18 22 23
Source: Analyst estimates, Morgan Stanley.

Exhibit 8 Selected Financial Data, 1987 to 1991
Advanced Micro Devices Chips and Technologies

1987 1988 1989 1990 1991(E) 1987 1988 1989 1990 1991
Sales 997 1,126 1,105 1,059 1,175 80 141 218 293 225
Net income (48) 19 46 (54) (59) 13 22 33 29 (10)
Cash flow 105 173 182 75 188 14 24 38 29 2
Capital expenditures 138 132 159 304 142 2 7 5 14 9
Cash 235 287 279 115 128 30 48 59 72 38
Total assets 1,114 1,081 1,122 1,112 -- 51 95 141 202 159
Long-term debt 136 130 126 131 155 1 3 6 9 7
(Long-term debt - cash)/market
value of equity (%) -0.13 -0.23 -0.24 0.04 -- -1.09 -0.17 -0.16 -0.21 -0.30
Years of casha 0.7 1.2 1.0 -0.1 -0.2 18.5 6.8 10.8 4.7 3.6
Return on equity (%) -7.3 3.0 6.7 -8.4 -- 48.8 33.2 31.4 1.9 -8.4
Cash dividend 0 0 0 0 0 0 0 0 0 0
High price 24.88 16.88 10.50 11.38 -- 37.75 21.25 26.25 23.50 13.25
Low price 7.50 7.13 7.13 3.63 -- 8.25 10.75 13.25 5.25 6.00
Book/share 6.21 5.91 6.39 5.63 6.7 2.03 4.79 7.30 9.31 8.51
P/E ratio 78 18 -- -- 14 8 7 10 --
Market value 775 690 639 401 -- 322 261 339 306 103
Shares (millions) 78.51 79.95 81.14 82.34 83.60 13.01 13.92 14.44 14.39 13.44
Beta 1.96 1.90 1.94 1.69 1.92 -- -- 2.13 1.92 2.12
Intel IBM
Sales 1,907 2,875 3,127 3,921 4,779 54,217 59,681 62,710 69,018 64,700
Net income 248 453 391 650 819 5,258 5,806 3,758 5,020 2,425
Cash flow 347 664 628 943 1,215 8,785 9,362 7,998 10,237 8,696
Capital expenditures 302 477 422 680 873 4,304 5,390 6,414 6,509 6,580
Cashb 881 1,393 1,598 2,346 2,757 6,967 6,123 4,961 4,551 4,700
Total assets 2,597 3,550 3,994 5,376 6,292 63,688 73,037 77,734 87,568 --
Long-term debt 298 479 412 345 363 3,858 8,518 10,825 11,943 11,991
value of equity (%) -0.13 -0.21 -0.19 -0.26 -0.49 -0.05 0.03 0.11 0.11 --
Years of casha 1.9 1.9 2.8 2.9 2.7 0.7 -0.4 -0.9 -1.1 1.1
Return on equity (%) 13.4 21.8 15.3 18.1 22.8 13.7 13.9 9.8 14.1 --
Cash dividend 0 0 0 0 0 2,654 2,609 2,752 2,774 2,803
High price 41.83 37.25 36.00 52.00 59.00 175.88 129.50 130.88 123.13 --
Low price 13.83 19.25 22.88 28.00 37.00 102.00 104.25 93.38 94.50 --
Book/share 7.76 11.52 13.81 17.99 21.14 64.09 66.99 67.01 74.96 74.60
P/E ratio 19 9 17 12 11 13 13 15 11 --
Market value 4,461 4,288 6,366 7,687 8,882 68,960 71,875 54,094 64,567 --
Shares (millions) 168.33 180.54 184.52 199.65 208.99 597.05 589.74 574.70 571.39 572.14
Beta 1.67 1.74 1.68 1.70 1.75 0.75 0.81 0.85 0.75 0.74
LSI Logic Corp. Motorola, Inc.

1987 1988 1989 1990 1991 1987 1988 1989 1990 1991(E)
Sales 262 379 547 655 -- 6,707 8,250 9,620 10,885 11,400
Net income 11 25 (25) (33) -- 308 445 498 499 450
Cash flow 50 77 63 67 -- 802 988 1,148 1,289 1,267
Capital expenditures 174 101 114 62 -- 689 873 1,094 1,256 1,128
Cash 267 204 153 159 -- 258 340 433 577 627
Total assets 699 787 765 784 -- 5,321 6,710 7,686 8,742 --
Long-term debt 188 192 204 190 -- 344 343 755 792 794
value of equity (%) -0.20 -0.03 0.18 0.12 -- 0.01 0 0.04 0.03 --
Years of casha 0.5 0.1 -0.4 -0.5 -- -0.1 0 -0.3 -0.2 -0.1
Return on equity (%) 3.5 7.2 -8.4 -12.3 -- 10.2 13.2 13.1 11.7 --
Cash dividend 0 0 0 0 -- 83 87 99 100 100
High price 17.25 13.63 12.38 13.00 -- 74.00 54.63 62.50 88.38 --
Low price 6.50 7.25 6.25 5.13 -- 34.50 35.88 39.50 49.13 --
Book/share 7.70 8.20 7.24 6.55 -- 23.26 26.02 28.16 32.32 35.05
P/E ratio 37 19 -- -- 21 12 15 14 --
Market value 395 435 293 263 -- 6,433 5,447 7,612 6,898 --
Shares (millions) 40.05 40.46 41.07 42.06 -- 129.30 129.70 130.40 131.70 131.95
Beta 2.30 1.95 1.76 1.48 1.71 1.47 1.49 1.55 1.48 1.49
Texas Instruments VLSI Technology
Sales 5,594 6,295 6,522 6,567 6,600 172 221 288 325 410
Net income 309 366 292 (39) (170) 8 7 1 (13) 9.5
Cash flow 637 756 745 502 398 32 36 38 36 57
Capital expenditures 463 628 863 909 500 50 55 39 35 50
Cash 663 780 637 412 416 103 75 55 35 41
Total assets 4,256 4,427 4,804 5,048 -- 271 303 318 327 --
Long-term debt 487 624 618 715 950 81 84 85 89 100
value of equity (%) -0.04 -0.05 -0.01 0.1 -- -0.09 0.04 0.17 0.48 --
Years of casha 0.4 0.2 0.0 -0.3 -1.0 0.4 -0.2 -0.8 -1.5 -1.2
Return on equity (%) 14.9 21.3 14.9 -2.1 -- 5.7 4.5 0.3 -8.7 --
Cash dividend 55 58 59 59 59 0 0 0 0 0
High price 80.25 60 46.75 44.00 -- 20.25 11.38 10.13 12.25 --
Low price 36.25 34.50 28.13 22.50 -- 7.13 5.88 6.38 3.00 --
Book/share 21.95 21.36 24.10 22.46 17.10 6.15 6.40 6.42 5.86 6.30
P/E ratio 15 10 12 -- -- 36 29 369 @NM --
Market value 4,383 3,306 2,924 3,108 -- 246 200 178 113 --
Shares (millions) 78.62 80.65 81.50 81.78 81.99 22.86 23.48 24.17 25.11 25.81
Beta 1.09 1.31 1.50 1.43 1.58 2.11 1.84 1.69 1.63 1.99
Source: Value Line and Standard and Poors

Note:
a”Years of Cash” reports the number of years of current investment expenditures that can be funded by net cash balances– (Cash - Long-term Debt) / Capital Expenditures
bCash balances for Intel include Long-term Investments.
Exhibit 11 Stock Price History and Recent End-of-Month Stock Prices
Recent End-of-Month Stock Prices
INTEL AMD CHIPS & TECHNOLOGY Intel price return
31-Dec-90 38.500 4.875 7.250

31-Jan-91 45.750 7.250 10.125 0.18831168831
28-Feb-91 47.750 8.125 11.250 0.043715846995
29-Mar-91 46.750 10.500 10.750 -0.020942408377
30-Apr-91 49.250 12.250 10.000 0.053475935829
31-May-91 55.750 13.500 9.750 0.131979695431
28-Jun-91 46.500 12.000 7.625 -0.165919282511
31-Jul-91 47.000 11.125 8.000 0.010752688172
30-Aug-91 49.500 12.375 8.875 0.053191489362
30-Sep-91 42.250 9.375 9.125 -0.146464646465
31-Oct-91 40.625 12.750 8.125 -0.038461538462
29-Nov-91 41.000 14.375 8.000 0.009230769231
20-Dec-91 42.500 17.000 7.750 0.036585365854
0.01295463361
variance 0.10041026700
annualized 0.3478
Exhibit 12 Estimates of Future Cash Flows
Depreciation Worksheet 1991 1992 1993 1994 1995

Earnings estimates from analysts:
Average 819 862 1,028 1,166 1,339
Pessimistic 819 485 595 700 900
Capital Expenditures: (948) (1,200) (1,380) (1,587) (1,746)
Land and Buildings (237) (240) (276) (317) (349)
Machinery and Equipment (711) (960) (1,104) (1,270) (1,397)
Depreciation Expense 418 666 971 1,044 1,235
Net Additions to PPE (530) (534) (409) (543) (511)
Decrease in Net Working Capital (58) (11) (42) (35) (43)
Shares issued, @$40, 3M/yr 120 120 120 120 120
Put warrants issued 14 0 0 0 0
Paydown of Long-Term Debt to 0 0 (91) (91) (91) (90)
Annual Change in Casha:
Average 365 346 606 617 815
% of Estimated Revenues 8% 9% 12% 11% 12%
Pessimistic 365 1 198 221 426
% of Estimated Revenues 8% 0% 2% 3% 4%
Cash Balance plus Long-Term
Investments less Long-Term Debt:
Average 2,394 2,740 3,346 3,964 4,779
Pessimistic 2,394 2,395 2,593 2,815 3,241
Total Assets 6,292 7,169 8,309 9,335 10,694
Total Cash/Total Assets:
Average 38% 38% 40% 42% 45%
Pessimistic 38% 33% 31% 30% 30%
Source: Intel Corporation, and casewriter and analyst estimates.

Note:
a Annual change in cash is equal to estimated Earnings and Net additions to PP&E + decrease in Net working capital + proceeds
from shares
Capital and warrants
Expenditures issued + to
are assumed cost of paying
grow at 15%down long-term debt.
per year.
Depreciation: Straight line over 3.5 years for machinery and equipment and 25 years for plant and property.
Capital spending is also depreciated for six months in the year made. Net working capital: calculated as current assets - current
liabilities - cash and cash equivalents. In 1990 and 1991 NWC was 28% and 24% of earnings, respectively. Estimates for 1992-1995
assume that NWC remains at 25% of average estimated earnings.
Major Categories Ratios 1990 1989 1988 1987
1. Profitability Ratios
Gross Profit Margin 58.2% 53.9% 55.0% 54.3%
Net Profit Margin 16.6% 12.5% 15.8% 13.0%
Retrun on Asset (ROA) 12.3% 9.8% 12.8% 9.5%
Return on Equity (ROE) 18.10% 15.34% 21.78% 18.99%
2. Activity Ratio Ratios
Fixed Asset Turnover 1.77 1.74 1.86 1.65
Total Asset Turnover 0.74 0.78 0.81 0.73
Asset to Equity Ratio 1.47 1.57 1.71 1.99
Equity Turnover 1.09 1.23 1.38 1.46
3. Liquidity Ratio Ratios
Current Ratio 2.37366819 2.348534202 2.109208 1.62244898
4. Solvency Ratio Ratios
Debt to Asset ratio 0.338 0.362 0.414 0.497
D/E Ratio 0.497 0.567 0.707 0.989
Long term debt to equity ratio 0.096047 0.161632 0.230288 0.228178
Major Categories Ratios

Dupont Analysis
Profit margin 0.166 0.125 0.158 0.130
Asset turnover 0.743 0.783 0.810 0.734
Total Assets/Equity 1.469 1.567 1.707 1.989
Reurn on Equity 0.181 0.153 0.218 0.190
DU Pont Analysis
Profit margin Asset turnover Total Assets/Equity Reurn on Equity
2.5
1.989
2
1.707 1.631
1.567 1.514 1.492
1.469
1.5
1 0.743 0.783 0.810 0.734 0.803

Profit margin Asset turnover Total Assets/Equity Reurn on Equity
2.5
1.989
2
1.707 1.631
1.567 1.514 1.492
1.469
1.5
1 0.743 0.783 0.810 0.734 0.803

0.608 0.634
0.5
0.166 0.181 0.125 0.153 0.158 0.218 0.190 0.14
0.130 0.122
0.001 0.001
0
1990 1989 1988 1987 1986 1985 1984
-0.137 -0.136
-0.5
1986 1985 1984
45.7% 42.6% 52.5%
-13.7% 0.1% 12.2%
-8.3% 0.1% 9.8%
-13.57% 0.14% 14.56%
1.21 1.22 1.55

0.61 0.63 0.80
1.63 1.51 1.49 1990 1989 1988 1987
0.99 0.96 1.20 Current Ratio 2.373668 2.348534 2.109208 1.622449
2.73796791 3.33550489 2.4564103

4
0.387 0.340 0.330
3.5
0.631 0.514 0.492
0.225098 0.190711 0.107353 3
2.5
2
1.5
1
-0.137 0.001 0.122 0.5
0.608 0.634 0.803 0
1.631 1.514 1.492 1990 1989 1988 1987 1986
-0.136 0.001 0.146
activity Ratios
Fixed Asset Turnover Total Asset Turnover Asset to Equity Rat
2.5
y Reurn on Equity 1.99
2 1.77
1.86
1.74 1.71 1.65 1.63
1.57 1.51
1.47
1.5
1.21 1.22
631
1.514 1.492 1
0.74 0.78 0.81
0.73
0.61 0.63
0.803 0.5
2.5
y Reurn on Equity 1.99
2 1.77
1.86
1.74 1.71 1.65 1.63
1.57 1.51
1.47
1.5
1.21 1.22
631
1.514 1.492 1
0.74 0.78 0.81
0.73
0.61 0.63
0.803 0.5
0.634
0
0.122 0.146 1990 1989 1988 1987 1986 1985
0.001 0.001
6 1985 1984
-0.136
Solvency ratio
Debt to Asset ratio D/E Ratio
Long term debt to equity ratio
1.2
0.989
1
0.8 0.707
0.631
0.567
0.6 0.497 0.497 0.514 0.492
0.414 0.387
0.4 0.338 0.362 0.340 0.330
0.230288 0.228178 0.225098 0.190711
0.2 0.161632
0.096047 0.107353
0
1990 1989 1988 1987 1986 1985 1984
1986 1985 1984
2.737968 3.335505 2.45641
1988 1987 1986 1985 1984
Ratios
t Turnover Asset to Equity Ratio
1.99
1.63
1.51 1.55 1.49
1.21 1.22
.73 0.80
0.61 0.63
1.99
1.63
1.51 1.55 1.49
1.21 1.22
.73 0.80
0.61 0.63
987 1986 1985 1984
E Ratio
31
0.514 0.492
0.340 0.330
225098 0.190711
0.107353
86 1985 1984
Year 1990 1989 1988 1987 1986 1985
Working Capital 1,805 1,242 1,036 549 650 717
Total Assets 5,276 3,994 3,550 2,597 2,080 2,152
Working Capital/Total Assets 0.342 0.311 0.292 0.211 0.313 0.333
Weight 1.20
X1 Total 0.411 0.373 0.350 0.254 0.375 0.400
Retained Earnings 2188.00 1538.00 1219.00 766.00 518.00 691.00

Retained Earnings/Total Assets 0.415 0.385 0.343 0.295 0.249 0.321
Weight 1.40
X2 Total 0.58 0.54 0.48 0.41 0.35 0.45
EBIT 858 601 594 246 -135 -60

EBIT/Total Assets 0.163 0.150 0.167 0.095 -0.065 -0.028
Weight 3.30
X3 Total 0.537 0.497 0.552 0.313 -0.214 -0.092
MV Of Equity $3,592 $2,549 $2,080 $1,306 $1,275 $1,421

Total Debt 1784.00 1445.00 1470.00 1291.00 805.00 731.00
Equity/Total Debt 2.013 1.764 1.415 1.012 1.584 1.944
Weight 0.60
X4 Total 1.208 1.058 0.849 0.607 0.950 1.166
Sales 3921.00 3127.00 2875.00 1907.00 1265.00 1365.00

Sales/Total Assets 0.74 0.78 0.81 0.73 0.61 0.63
Weight 1.00
X5 Total 0.743 0.783 0.810 0.734 0.608 0.634
Z score 3.4790 3.2502 3.0419 2.3205 2.0680 2.5580

Safe Zone Gray Zone Gray Zone Gray Zone Gray Zone Gray Zone
Average 2.8512
1984
568
2,029
0.280
0.336
689.00
0.340
0.48
250
0.123
0.407
$1,360
669.00
2.033
1.220
1629.00 Risk Distribution

0.80 Z > 2.90 Safe Zone
0.803 1.23 < Z < 2.90 Gray Zone
3.2405 Z < 1.23 Distress Zone

Safe Zone
Business Risk Calculation
Sales Variability
Year 1984 1985 1986 1987 1988 1989 1990
Sales 1629 1365 1265 1907 2875 3127 3921
Mean Sales 865.061
Standard Deviation 940.541
CV 0.920
Operating profit Variability

Year 1984 1985 1986 1987 1988 1989 1990
Operating profit 250 -60 -135 246 594 601 858
% Change in operating profit -124.00% 125.00% -282.22% 141.46% 1.18% 42.76%
Degree Of Operating Leverage

Year 1984 1985 1986 1987 1988 1989 1990
% Change in operating profit -124.0000% 125.0000% -282.2222% 141.4634% 1.1785% 42.7621%
% Change in Sales -16.2063% -7.3260% 50.7510% 50.7604% 8.7652% 25.3917%
DOL 765% -1706% -556% 279% 13% 168%
Average DOL -173%
Year DOL
1985 765%
1986 -1706%
1987 -556% 1.6
1988 279%
1.4
1989 13%
1990 168% 1.2
1
Financial Risk Calculation 0.8
Degree of Financial Leverage
0.6
Year 1984 1985 1986 1987 1988 1989 1990
EBIT 250 -60 -135 246 594 601 858 0.4
Interest 15 26 39 66 78 102 102
DFL 1.063829787 0.697674419 0.775862069 1.3666666667 1.151162791 1.20440882 1.134920635 0.2
0
1984 1985
0.6
0.4
0.2
Average DFL 1.056360741 0
1984 1985
Interest Coverage Ratio
Year 1984 1985 1986 1987 1988 1989 1990
EBIT 250 -60 -135 246 594 601 858
Interest 15 26 39 66 78 102 102
Interest Coverage Ratio (TIE) 16.66666667 -2.30769231 -3.46153846 3.7272727273 7.615384615 5.89215686 8.411764706
Average TIE 5.220573544
Year DFL Year TIE

1984 1.063829787 1984 16.6666667
1985 0.697674419 1985 -2.3076923
1986 0.775862069 1986 -3.4615385
1987 1.366666667 1987 3.72727273
1988 1.151162791 1988 7.61538462
1989 1.204408818 1989 5.89215686
1990 1.134920635 1990 8.41176471
Times Interest Earned Ratio

20
15
10
0
1984 1985 1986 1987 1988 1989
-5
1985 1986 1987
DOL 7.651364 -17.0625 -5.56092
Average DOL -1.72777
10
Standard of Measuring DOL Risk Status Risk Premium 5

Less than 1 to 1 Very low 1%
1 to 2 Low 1.50% 0
2 to 3 Moderate 2.50% 1985 1986 1987 1988
3 to 4 High 3.50%
-5
4+ Very high 4.50%
Business risk is very low
-10
-15
-20
1.6
1.4
1.2
0.8
1984 1985 1986 1987
0.6 DFL 1.0638297872 0.6977 0.7759 1.366667
0.4
0.2
0
1984 1985 1986 1987 1988 1989 1990
0.6
0.4
0.2
0
1984 1985 1986 1987 1988 1989 1990
Standard of Measuring DFL Risk Status Risk Premium

0 to 1 Very low 1%
1 to 2 Low 1.50%
2 to 3 Moderate 2.50%
3 to 4 High 3.50%
4+ Very high 4.50%
Financial risk is low (1.5% risk premium will be charged)
est Earned Ratio
1987 1988 1989 1990

1988 1989 1990
2.786888 0.134446 1.684093
1987 1988 1989 1990
1988 1989 1990

1.151163 1.204409 1.134921
US treasury medium-term bond yields 10.45%
US treasury long-term bond yields 11.11%
Risk-free rate (Average) 10.78%
Beta of intel (1990) 1.70
Rm
WACC for Basic Valuation

Risk Free Int. Rate 10.78%
Equity Beta 1.70
Equity Risk Premium 3.00%
Cost of Equity 15.88%
Cost of Debt 29.57%
After tax cost of debt 19.49%
Total debt 345
Total equity 3,592
Weight of equity 91.24%
weight of debt 8.76%
Base WACC 16%
Business risk premium 1.00%
Financial risk premium 1.50%
Risk adjusted WACC 18.70%
Interest expense (1990) 102 Business risk premium
Interest bearing long term debt (1990) 345 Financial risk premium
Interest rate 29.57%
Tax rate 34.08%
WACC for D/E 25% WACC for Repurchased stock

Risk Free Int. Rate 10.78% Risk Free Int. Rate
Equity Beta 1.70 Equity Beta
Equity Risk Premium 3.00% Equity Risk Premium
Cost of Equity 15.8800% Cost of Equity
Cost of Debt 29.57% Cost of Debt
After tax cost of debt 19.49% After tax cost of debt
Total debt 900 Total debt
Total equity 3,592 Total equity
Weight of equity 79.96% Weight of equity
weight of debt 20.04% weight of debt
Base WACC 17% Base WACC
Business risk premium 1.00% Business risk premium
Financial risk premium 1.50% Financial risk premium
Risk adjsuted WACC 19.10% Risk adjsuted WACC
New Long term debt 555
1%
1.50%
CC for Repurchased stock WACC for D/E 48%

10.78% Risk Free Int. Rate 10.78%
1.70 Equity Beta 1.70
3.00% Equity Risk Premium 3.00%
15.88% Cost of Equity 15.88%
29.57% Cost of Debt 29.57%
19.49% After tax cost of debt 19.49%
345 Total debt 1,725
3,235 Total equity 3,592
90.36% Weight of equity 67.56%
9.64% weight of debt 32.44%
16% Base WACC 17%
1.00% Business risk premium 1.00%
1.50% Financial risk premium 1.50%
18.73% Risk adjsuted WACC 19.55%
Assumptions set:
Fore
Year 1990 (base year) 1991
Base year net income 650
Average 819
Pessimistic 819
Estimated net income 819
Interest bearing debt (Long term debt) 345 363

YoY debt growth rate 5.22%
Interest expense 102 105
Interest rate 29.57% 28.93%
Depreciation 292 418
Pretax income 986 1,195
Total income taxes 336 376
Tax rate 0.340770791075 31
Net additions to PPE 530
Decrease in Net Working Capital 58
Terminal growth
WACC 1
1990 (base year) 1991
Net income after tax $650.00 $819.00
Add: Depreciation and non cash items $292.00 418
Add: Interest*(1-Tax rate) 67.241 71.962
Add:Decrease in Operating WC 58
Less: Invest. in Fixed Assets 530
FCFF $836.96
+ Terminal Value
FCFF $836.96
Enterprise value $10,753.49
+ Surplus Cash & Marketable securities $1,785.00
FIRM VALUE $12,538.49
(-) Value of Debt $345.00
(-) PV of agency cost $376.15
Value of equity $11,817.34
(÷)Number of Shares 199.65
Value per Share $59.19
Forecasted
1992 1993 1994 1995
862 1,028 1,166 1,339

485 595 700 900 Giving 70% weight on average e
748.9 898.1 1026.2 1207.3
381.939130434 401.866389411 422.833331466 444.894200932507
110.478260869 116.242344045 122.307161994 128.688405228411
666 971 1,044 1,235
31.46%
534 409 543 511
11 42 35 43
5%
18.70%
1992 1993 1994 1995
$748.90 $898.10 $1,026.20 $1,207.30
666 971 1,044 1,235
75.717 79.667 83.824 88.197
11 42 35 43
534 409 543 511
$967.62 $1,581.77 $1,646.02 $2,062.50
$15,811.65
$967.62 $1,581.77 $1,646.02 $17,874.15
Giving 70% weight on average estimated income and 30% on pessimistic estimated income
NORMALIZED EARNINGS GROWTH RATE

1991 1992 1993 1994 1995
Estimated earnings 819 748.9 898.1 1026.2 1207.3
YoY change -0.085592 0.199226 0.142634450506625 0.176476
Average growth rate 10.82%

Forecas

Average 819
Pessimistic 1990 1991 (F)
Estimated net income 819
Interest bearing debt (Long term debt) 345 363
Interest expense 102 105
Interest rate 29.57% 28.93%
Depreciation 292 418
Pretax income 986 1195
Total income taxes 336 376
Tax rate 34.08% 31.46%
Net additions to PPE 0
Decrease in Net Working Capital 58
Terminal growth 0.05
WACC 1
Enterprise value 5903.925

+ Surplus Cash & Marketable securities 1785
Firm value 7688.925
(-) Value of Debt 345
(-) PV of agency cost 230.6678
Value of equity 7113.257
Value per Share 35.62864
Forecasted
862 1,028 1,166 1,339

1992(F) 1993(F) 1994(F) 1995(F)
748.9 898.1 1026.2 1207.3
381.94 401.87 422.83 444.89
110.48 116.24 122.31 128.69
666 971 1044 1235
534 409 543 511

11 42 35 43
19.58%
Assumption set: Repurchase of share with 20% excess cash ($1785 million*20%=357)
Sales growth rate 10.82% Stock closing price 38.5

Cost of goods sold (% of sales) 41.78% Cash for repurchase 357
R&D 13.19% Shares repurchase 9.27
advertising expense 2.40%
Others 5.94%
Debt 345
Interest expense 102
Interest income 5.18%
other non operating income 0.69%
Terminal growth rate 5%
WACC 18.73%
Income statement
Forecasted Income Statement

1990( Base) 1991 1992 1993 1994 1995
Sales 3,921 4345.20 4815.29 5336.23 5913.54 6553.30
Cost of goods sold 1,638 1815.21 2011.59 2229.21 2470.38 2737.65
Gross profit 2,283 2529.99 2803.70 3107.02 3443.16 3815.66
R&D 517 572.93 634.92 703.60 779.72 864.08
advertising expense 94 104.17 115.44 127.93 141.77 157.11
Others 233 258.10 286.03 316.97 351.26 389.27
Depreciation, depletion, and amortization 292 418.00 666.00 971.00 1044.00 1235.00
Operating profit 858 1176.78 1101.32 987.51 1126.40 1170.20
Interest expense 102 102.00 102.00 102.00 102.00 102.00
Interest income 203 225.08 249.43 276.42 306.32 339.46
Other nonoperating income 27 29.98 33.23 36.82 40.80 45.22
Pretax income 986 1329.85 1281.97 1198.75 1371.52 1452.88
Tax 336 453.21 436.90 408.53 467.42 495.14
Net Income after taxes 650 876.63 845.08 790.22 904.11 957.74
Valuation
1990( Base) 1991 1992 1993 1994 1995
Net income 650 876.63 845.08 790.22 904.11 957.74
Add: Non-cash expense- Depreciation 292 418 666 971 1044 1235
Interest 102 102.00 102.00 102.00 102.00 102.00
Interest(1-t) 67.2384 67.2384 67.2384 67.2384 67.2384 67.2384
Subtract: Addition to PPE 530 534 409 543 511
Add: Decrease in NWC 58 11 42 35 43
FCFF 890 1055 1461 1507 1792
Terminal value 13706.22
FCFF 890 1055 1461 1507 15498
PV of FCFF 9710.06
FIRM VALUE 11138.06
WACC for Repurchased stock
Equity Beta 1.70
Cost of Debt 29.57%
Total debt 345
Total equity 3,235
Base WACC 16%
Risk adjusted capital 18.73%
Assumption set: Dividend $84 million ($0.42 per share)
Tax 34.08%
Sales growth rate 10.82%
Cost of goods sold (% of sales) 41.78%
R&D 13.19%
Others 5.94%
Debt 345
WACC 18.70%
Income statement
Forecasted income statement

1990( Base) 1991 1992 1993 1994 1995
Sales 3,921 4345.20 4815.29 5336.23 5913.54 6553.30
Gross profit 2,283 2529.99 2803.70 3107.02 3443.16 3815.66
R&D 517 572.93 634.92 703.60 779.72 864.08
Others 233 258.10 286.03 316.97 351.26 389.27
Depreciation, depletion, and amortization 292 418.00 666.00 971.00 1044.00 1235.00
Interest income 203 225.08 249.43 276.42 306.32 339.46
Pretax income 986 1329.85 1281.97 1198.75 1371.52 1452.88
Tax 336 453.21 436.90 408.53 467.42 495.14
Valuation
Net income 650 876.63 845.08 790.22 904.11 957.74
Interest 102 102.00 102.00 102.00 102.00 102.00
Interest(1-t) 67.2384 67.2384 67.2384 67.2384 67.2384 67.2384
FCFF 890 1055 1461 1507 1792
FCFF 890 1055 1461 1507 15530
PV of FCFF 9723.46
+ Surplus Cash & Marketable securities 1701.00
FIRM VALUE 11424.46
(-) Value of Debt 345.00
WACC for dividend issue
WACC for Basic Valuation 0
Equity Beta 1.70
Cost of Debt 29.57%
After tax cost of debt 0
Total debt 345
Total equity 3,592
Base WACC 16%
Financial risk premium 2%
Forecasted
Year 1990 (base year) 1991 1992
Net income 650 819 748.9
Assumptions
Sales growth 10.82%
COGS (% of sales) 41.78%
R&D (% of sales) 13.19%
advertising expense (% of sales) 2.40%
Others (% of sales) 5.94%
Interest income (% of sales) 5.18%
other non operating income (% of sales) 0.69%
Interest bearing debt (Long term debt) 345 363 381.9391304 401.866389
Interest expense 102 105 110.4782609 116.242344
Interest rate 29.57% 28.93% 0.00% 0.00%
Depreciation 292 418 666 971
Tax rate 34.08%
WACC 18.70%
Forecasted Income Statement and Valuation

1990( Base) 1991 1992 1993
Sales 3,921 4345.19741980535 4815.287074 5336.233861
Cost of goods sold 1,638 1815.20871554225 2011.5889383 2229.214758
Gross profit 2,283 2529.9887042631 2803.6981357 3107.019104
R&D 517 572.932177005705 634.91543414 703.6044137
advertising expense 94 104.16948672831 115.43916984 127.9280752
Others 233 258.104726736438 286.02805219 316.9722914
Depreciation, depletion, and amortization 292 418 666 971
Operating profit 858 1176.78231379265 1101.3154795 987.5143232
Interest expense 102 105 110.4782609 116.242344
Interest income 203 225.081226345917 249.43187043 276.416914
Other nonoperating income 27 29.9818621966569 33.22548081 36.82001364
Pretax income 986 1326.84540233522 1273.4945698 1184.508907
Tax 336 452.150157421171 433.96975202 403.6460373
Net Income after taxes 650 874.695244914051 839.5248178 780.8628696
Add: Non-cash expense- Depreciation 292 418 666 971
Interest 102 105 110.4782609 116.242344
Interest(1-t) 67.241379308 69.2190669345 72.830496534 76.63034848
Subtract: Addition to PPE 530 534 409
Add: Decrease in NWC 58 11 42
FCFF 890 1055 1461
Terminal value
FCFF 890 1055 1461
PV of FCFF 9723.74
+ Surplus Cash & Marketable securities 1785.00
FIRM VALUE 11508.74
(-)Value of debt 345
Option value 8.58887214
Total price 62.78
OPTION PRICE CALCULATION

S 38.5 Current Asset Value
X 50 Exercise (Strike) Price
T 2.00 Time to Maturity (Years)
rf 10.78% Riskless Interest Rate (% p.a.)
s 0.348 Volatility (% p.a.)
d1 0.1529
d2 -0.3390
N(d1) 0.5608
N(d2) 0.3673
CE 6.786 European Call Value ($)

PE 8.588872 European Put Value ($)
Forecasted
1993 1994 1995
898.1 1026.2 1207.3 WACC for put warrant issue
Equity Beta 1.70
Cost of Debt 29.57%
Total debt 345
Total equity 3,592
422.8333315 444.8942009 Weight of equity 91.24%
122.307162 128.6884052 Base WACC 16%
0.00% 0.00% Business risk premium 1.00%
1,044 1,235 Financial risk premium 1.50%
and Valuation
1994 1995
5913.53981251 6553.3022023
2470.38465006 2737.6457555
3443.15516245 3815.6564468
779.724581247 864.07988742
141.768105681 157.10543408
351.264264863 389.26615082
1044 1235
1126.39821066 1170.2049745
122.307162 128.6884052
306.321362288 339.46105408
40.8034247063 45.217785196
1351.21583565 1426.1954085
460.454889262 486.00573763
890.76094639 940.18967091
1044 1235
122.307162 128.6884052
80.6284536481 84.835155555
543 511
35 43
1507 1792
13738.13969
1507 15530
Assumption set: Debt/Equity= 25%
Sales growth rate (YoY 1990 to 91 growth) 10.82% Tax 34.08%

Cost of goods sold (% of sales) 41.78% Interest expense 29.57%
R&D 13.19%
Others 5.94%
Debt 900
Interest expense 266.22
WACC 21.12%
Income statement
Forecasted I/S
1990( Base) 1991 1992 1993 1994 1995
Sales 3,921 4345.20 4815.29 5336.23 5913.54 6553.30
Gross profit 2,283 2529.99 2803.70 3107.02 3443.16 3815.66
R&D 517 572.93 634.92 703.60 779.72 864.08
Others 233 258.10 286.03 316.97 351.26 389.27
Depreciation, depletion, and amortization 292 418 666 971 1044 1235
Interest income 203 225.081226346 249.4318704 276.416914 306.3213623 339.4610541
Pretax income 986 1165.63 1117.75 1034.53 1207.30 1288.66
Tax 336 397.25 380.93 352.57 411.45 439.18
Valuation
Net income 650 768.38 736.82 681.96 795.85 849.49
Interest 102 266.22 266.22 266.22 266.22 266.22
Interest(1-t) 67.2384 175.492224 175.492224 175.492224 175.492224 175.492224
FCFF 890 1055 1461 1507 1792
FCFF 890 1055 1461 1507 13462
PV of FCFF $8,140.72
FIRM VALUE 9925.72
(-)PV of distress cost 28.288
WACC when D/E is 25%
Equity Beta 1.70
Cost of Debt 29.57%
Total debt 900
Total equity 3,592
weight of debt 20.04% 25.068207130000000%
Base WACC 16.60%
Risk adjsuted WACC 19.10%
New Long term debt 555
D/E
0.2506820713
Assumption set: Debt/Equity= 48%
Sales growth rate 10.82%

Cost of goods sold (% of sales) 41.78%
R&D 13.19%
Others 5.94%
Debt 1,725
WACC 22.82%
Income statement
Forecasted I/S
1990( Base) 1991 1992 1993 1994 1995
Sales 3,921 4345.1974198 4815.28707 5336.23386 5913.53981 6553.3022
Gross profit 2,283 2529.9887043 2803.69814 3107.0191 3443.15516 3815.65645
R&D 517 572.93217701 634.915434 703.604414 779.724581 864.079887
Others 233 258.10472674 286.028052 316.972291 351.264265 389.266151
Depreciation, depletion, and amortization 292 418 666 971 1044 1235
Interest expense 102 510 510 510 510 510
Interest income 203 225.08122635 249.43187 276.416914 306.321362 339.461054
Pretax income 986 921.85 873.97 790.75 963.52 1044.88
Tax 336 314.16491312 297.849941 269.488026 328.368638 356.096404
Valuation
Net income 650 607.68 576.12 521.26 635.15 688.79
Interest 102 510 510 510 510 510
Interest(1-t) 67.2384 336.192 336.192 336.192 336.192 336.192
FCFF 890 1055 1461 1507 1792
FCFF 890 1055 1461 1507 12351
PV of FCFF $7,294.66
FIRM VALUE $9,079.66
(-) Value of Debt 1,725
(-)PV of distress cost 25.88
WACC when D/E is 48%
Equity Beta 1.70
Cost of Debt 29.57%
Total debt 1,725
Total equity 3,592
Base WACC 17%
Risk adjsuted WACC 19.55%
Total debt 345
New debt 1,380
D/E
48.02339%
December December
1991(E) 1990 YoY (%) change % of sales (91) % of sales (90)
Sales 4,779 3,921 21.88% 100.00% 100.00%
Cost of goods sold 1,898 1,638 15.87% 39.72% 41.78%
Gross profit 2,881 2,283 26.19% 60.28% 58.22%
SG & A, of which: 1,383 1,133 22.07% 28.94% 28.90%
R&D 618 517 19.54% 12.93% 13.19%
advertising expense 121 94 28.72% 2.53% 2.40%
Operating income before depreciation 1,498 1,151 30.15% 31.35% 29.35%
Depreciation, depletion, and amortization 418 292 43.15% 8.75% 7.45%
Operating profit 1,080 858 25.87% 22.60% 21.88%
Interest expense 105 102 2.94% 2.20% 2.60%
Interest income 194 203 -4.43% 4.06% 5.18%
Other nonoperating income 26 27 -3.70% 0.54% 0.69%
Pretax income 1,195 986 21.20% 25.01% 25.15%
Total income taxes 376 336 11.90% 7.87% 8.57%
Income before extraordinary items and discontinued 819 650 26.00% 17.14% 16.58%
operations
items extraordinary 0 0 #DIV/0! 0.00% 0.00%
Net income 819 650 0.26 17.14% 16.58%
Earnings per share (fully diluted) 3.62 3.19
Common shares outstanding 208.99 199.65
Book value per share 21.14 17.99
Market-to-book ratio (end of year) 2.01 2.14
Value per
Alternatives share
Share repurchase 48.62
Dividend Issue 47.9
Put warrant 51.13
WACC CV
19.70% 0.2283
19.58% 0.2249
19.58% 0.2456

1976 $MM 1981 $MM 1987 $MM 1991 $MM Exhibit 1 Top Integrated Circuit Manufacturers, Worldwide Revenues ($ Millions)

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1976 $MM 1981 $MM 1987 $MM 1991 $MM Exhibit 1 Top Integrated Circuit Manufacturers, Worldwide Revenues ($ Millions)

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Exhibit 1 Top Integrated Circuit Manufacturers, Worldwide Revenues ($ millions)

1976 $MM 1981 $MM 1987 $MM 1991 $MM

Source: Dataquest, 1992

Tax rate 0.3146444 0.34077079 0.32933105 0.27980922 0.38888889 -0.05142857

Exhibit 3: Annual Balance Sheet ($ millions)

Capital Expenditures: 948 680 422 362 302 155

99 359 224 103 93 232

2 198 116 30 40 185

0.01 1.13 0.70 0.22 0.20 0.74

2.39 2.34 4.18 3.19 2.02 3.97

1.4 0.33557047 0.34831461 0 0.325 0.48108108

730 671 631 177 143 128

236 388 145 138 157 156

1985 1986 1987 1988 1989 1990

1987 1988 1989 1990 1991

Source: Analyst estimates, Morgan Stanley.

Advanced Micro Devices Chips and Technologies

LSI Logic Corp. Motorola, Inc.

Source: Value Line and Standard and Poors

Recent End-of-Month Stock Prices

INTEL AMD CHIPS & TECHNOLOGY Intel price return

31-Dec-90 38.500 4.875 7.250

Depreciation Worksheet 1991 1992 1993 1994 1995

Source: Intel Corporation, and casewriter and analyst estimates.

Major Categories Ratios

1 0.743 0.783 0.810 0.734 0.803

1 0.743 0.783 0.810 0.734 0.803

1.21 1.22 1.55

2.73796791 3.33550489 2.4564103

1988 1987 1986 1985 1984

987 1986 1985 1984

Retained Earnings 2188.00 1538.00 1219.00 766.00 518.00 691.00

EBIT 858 601 594 246 -135 -60

MV Of Equity $3,592 $2,549 $2,080 $1,306 $1,275 $1,421

Sales 3921.00 3127.00 2875.00 1907.00 1265.00 1365.00

Z score 3.4790 3.2502 3.0419 2.3205 2.0680 2.5580

1629.00 Risk Distribution

0.803 1.23 < Z < 2.90 Gray Zone

3.2405 Z < 1.23 Distress Zone

Operating profit Variability

Degree Of Operating Leverage

Average TIE 5.220573544

Year DFL Year TIE

Times Interest Earned Ratio

Standard of Measuring DOL Risk Status Risk Premium 5

Standard of Measuring DFL Risk Status Risk Premium

est Earned Ratio

1987 1988 1989 1990

1987 1988 1989 1990

1988 1989 1990

WACC for Basic Valuation

WACC for D/E 25% WACC for Repurchased stock

CC for Repurchased stock WACC for D/E 48%

Estimated net income 819

Interest bearing debt (Long term debt) 345 363

862 1,028 1,166 1,339

748.9 898.1 1026.2 1207.3

381.939130434 401.866389411 422.833331466 444.894200932507

110.478260869 116.242344045 122.307161994 128.688405228411

666 971 1,044 1,235

NORMALIZED EARNINGS GROWTH RATE

YoY change -0.085592 0.199226 0.142634450506625 0.176476