DCF TEMPLATE

x Key Assumptions

Exit Multiple
Start 7.0x
Step 1.0x

Perpetuity Growth Rate

Start 1.00%
Step 0.75%

WACC
Start 10.00%
Step 1.00%

Mid-Year Discounting ON
Starting Date 12/31/2017

Net Debt $55

x Projected Cash Flows

Fiscal Year Ending December 31, 2018E 2019E 2020E 2021E

Revenue $121 $129 $140 $148
% Growth 7.0% 8.0% 6.0%

Adj. EBITDA $43 $47 $51 $55

% Margin 35.5% 36.3% 36.5% 37.1%

( - ) D&A ($6) ($6) ($7) ($7)

Adj. EBIT $37 $41 $44 $48
% Margin 30.6% 31.4% 31.7% 32.4%

Illustrative Tax Rate 38.0% 38.0% 38.0% 38.0%

NOPAT $23 $25 $28 $30
( + ) D&A 6 6 7 7
( - ) CapEx (7) (7) (8) (8)
( - ) Increase in NWC (3) (3) (3) (4)
Unlevered Free Cash Flow $19 $21 $23 $25

Mid-Year
Discount Period ON 0.5 1.5 2.5 3.5
 WACC
10.00% $18 $18 $18 $18
PV of FCF 11.00% 18 18 18 17
12.00% 18 18 17 17

Terminal Value - Perpetuity Growth Method

WACC 10.00% 11.00%

Perpetuity Growth Rate 1.00% 1.75% 2.50% 1.00% 1.75%

Terminal Year FCFF $26 $26 $26 $26 $26

( x ) (1 + g) 1.01 1.02 1.03 1.01 1.02
( x ) (1 / (r - g)) 11.11 12.12 13.33 10.00 10.81
FV - Terminal Value $295 $324 $359 $266 $289
Implied Exit Multiple 5.4x 5.9x 6.6x 4.9x 5.3x

( x ) Discount Factor 0.65 0.65 0.65 0.63 0.63

PV of Terminal Value $192 $211 $234 $166 $181
( + ) PV of Cash Flows $89 $89 $89 $87 $87
Enterprise Value $281 $300 $323 $253 $268

x Terminal Value - Exit Multiple Method

WACC 10.00% 11.00%

LTM Exit Multiple 7.0x 8.0x 9.0x 7.0x 8.0x

LTM EBITDA $57 $57 $57 $57 $57

FV - Terminal Value $401 $459 $516 $401 $459
Implied Perp. Growth 2.93% 3.76% 4.42% 3.83% 4.68%

( x ) Discount Factor 0.62 0.62 0.62 0.59 0.59

PV of Terminal Value $249 $285 $320 $238 $272
( + ) PV of Cash Flows $89 $89 $89 $87 $87
Enterprise Value $338 $374 $410 $325 $359

x Perpetuity Growth Method - Output

x Exit Multiple Method - Output
2022E Terminal
$154 $154
4.0% --

$57 $57
37.2% 37.2% % of Terminal
CapEx
($7) ($8) 95.0%
$50 $49
32.5% 32.0%

38.0% 38.0%
$31 $31
7 8
(9) (9)
(4) (4)
$26 $26

Years
4.5 5.0
 Sum
$17 $89
16 87
16 85

11.00% 12.00%
2.50% 1.00% 1.75% 2.50%

$26 $26 $26 $26

1.03 1.01 1.02 1.03
11.76 9.09 9.76 10.53
$317 $241 $261 $284
5.8x 4.5x 4.8x 5.2x

0.63 0.60 0.60 0.60

$198 $145 $157 $170
$87 $85 $85 $85
$285 $230 $242 $256

11.00% 12.00%
9.0x 7.0x 8.0x 9.0x

$57 $57 $57 $57

$516 $401 $459 $516
5.35% 4.74% 5.59% 6.27%

0.59 0.57 0.57 0.57

$306 $228 $260 $293
$87 $85 $85 $85
$393 $313 $346 $378
Discount NPV of FCFF PV of Terminal Value (Perpetuity Growth Rate)
Rate '18 - '22 1.00% 1.75%
10.00% $89 $192 $211
11.00% 87 + 166 181
12.00% 85 145 157
Discount Less: Equity Value (Perpetuity Growth Rate)
Rate Net Debt 1.00% 1.75%
10.00% ($55) $226 $245
11.00% (55) = 198 213
12.00% (55) 175 187

Discount NPV of FCFF PV of Terminal Value (LTM Exit Multiple)

Rate '18 - '22 7.0x 8.0x
10.00% $89 $249 $285
11.00% 87 + 238 272
12.00% 85 228 260

Discount Less: Equity Value (LTM Exit Multiple)

Rate Net Debt 7.0x 8.0x
10.00% ($55) $283 $319
11.00% (55) = 270 304
12.00% (55) 258 291
e (Perpetuity Growth Rate) Enterprise Value (Perpetuity Growth Rate)
2.50% 1.00% 1.75% 2.50%
$234 $281 $300 $323 1
198 = 253 268 285 $1.00
170 230 242 256 1
erpetuity Growth Rate) Implied LTM EBITDA Exit Multiples
2.50% 1.00% 1.75% 2.50%
$268 5.4x 5.9x 6.6x
230 = 4.9 5.3 5.8
201 4.5 4.8 5.2

Value (LTM Exit Multiple) Enterprise Value (LTM Exit Multiple)

9.0x 7.0x 8.0x 9.0x
$320 $338 $374 $410 1
306 = 325 359 393 $1.00
293 313 346 378 1

e (LTM Exit Multiple) Implied Perpetuity Growth Rates

9.0x 7.0x 8.0x 9.0x
$355 2.93% 3.76% 4.42%
338 = 3.83% 4.68% 5.35%
323 4.74% 5.59% 6.27%
TRUE TRUE
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TRUE TRUE
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TRUE TRUE