InvestmentBanking,2EValuation,LeveragedBuyouts,andMergers&AcquisitionsM&AModel-CompletedJOSHUAROSENBAUMJOSHUAPEARLBuyerCoAcquisitionofValueCoMergerConsequencesAnalysisFinancingStructure:Structure1($inmillions,fiscalyearendingDecember31)OperatingScenario:BaseTransactionSummarySourcesofFundsUsesofFundsPremiumPaid&ExchangeRatioAcquisitionStructure&Synergies%ofTotalMultipleofProFormaEBITDA%ofTotalValueCoCurrentSharePrice$43.50StockConsiderationforEquity50%AmountSources2012CumulativePricingAmountUsesOfferPriceperShare$58.73TransactionDebtRaised$3,700.0RevolvingCreditFacility0.00.00.00.0L+350bpsPurchaseValueCoEquity$4,700.074.0%PremiumPaid35%%ofValueCoEnterpriseValue62%TermLoanA0.00.00.00.0NARepayExistingDebt1,500.023.6%BuyerCoCurrentSharePrice$70.00AcquisitionTypeStockSaleTermLoanB2,200.034.6%1.0x1.0xL+375bpsTender/CallPremiums20.00.3%ExchangeRatio0.8xTermLoanC0.00.00.01.0xNATransactionFees40.00.6%Year1Synergies$1002ndLien0.00.00.01.0xNADebtFinancingFees90.01.4%PurchasePriceOptionsSeniorNotes1,500.023.6%0.6x1.6x7.500%OfferPriceperShare$58.73FinancingStructure1SeniorSubordinatedNotes0.00.00.01.6xNAFullyDilutedShares80.0OperatingScenario1IssuanceofCommonStock2,350.037.0%1.0x2.6xEquityPurchasePrice$4,700.0CashFlowSweep1CashonHand300.04.7%0.1x2.7xCashBalance1Other0.00.00.02.6xPlus:ExistingNetDebt1,250.0AverageInterest1TotalSources$6,350.0100.0%2.7x2.7xTotalUses$6,350.0100.0%EnterpriseValue$5,950.0FinancingFees1ProFormaCombinedFinancialSummaryValuationSummaryProForma12345TargetAcquirer201220132014201520162017CompanyNameValueCoBuyerCoSales$10,205.8$10,937.5$11,593.7$12,173.4$12,660.3$13,040.1TickerVLCOBUY%growth8.2%7.2%6.0%5.0%4.0%3.0%CurrentSharePrice(12/20/2012)$43.50$70.00GrossProfit$3,947.2$4,230.4$4,484.2$4,708.4$4,896.8$5,043.7PremiumtoCurrentSharePrice35%%margin38.7%38.7%38.7%38.7%38.7%38.7%OfferPriceperShare$58.73EBITDA$2,311.3$2,469.7$2,611.9$2,737.5$2,843.0$2,925.3FullyDilutedShares80.0140.0%margin22.6%22.6%22.5%22.5%22.5%22.4%EquityValue$4,700.0$9,800.0InterestExpense374.7348.5296.2270.2270.2270.2Plus:TotalDebt1,500.02,200.0NetIncome$945.8$1,043.3$1,148.8$1,231.4$1,289.6$1,336.0Plus:PreferredEquity0.00.0%margin9.3%9.5%9.9%10.1%10.2%10.2%Plus:NoncontrollingInterest0.00.0FullyDilutedShares173.6173.6173.6173.6173.6173.6Less:CashandEquivalents(250.0)(400.0)DilutedEPS$5.45$6.01$6.62$7.09$7.43$7.70EnterpriseValue$5,950.0$11,600.0CashFlowfromOperatingActivities1,387.91,528.01,641.71,729.61,803.5TransactionMultiplesLess:CapitalExpenditures(383.8)(406.8)(427.1)(444.2)(457.5)TargetAcquirerFreeCashFlow$1,004.1$1,121.2$1,214.6$1,285.4$1,346.0MetricMultipleMetricMultipleEnterpriseValue/LTMEBITDA$700.08.5x$1,443.18.0xSeniorSecuredDebt2,200.01,095.90.00.00.00.0EnterpriseValue/2012EEBITDA725.08.2x1,486.37.8xSeniorDebt5,900.04,795.93,700.03,700.03,700.03,700.0EnterpriseValue/2013EEBITDA779.47.6x1,590.37.3xTotalDebt5,900.04,795.93,700.03,700.03,700.03,700.0Cash&Equivalents350.0250.0275.31,489.92,775.34,121.3EquityValue/2012ENetIncome$268.817.5x$728.513.5xEquityValue/2013ENetIncome297.015.8x786.812.5xCreditStatisticsProFormaOwnershipBuyerCoProForma12345SharesOwnership2012201220132014201520162017ExistingBuyerCoShareholders140.080.7%EBITDA/InterestExpense10.3x6.2x7.1x8.8x10.1x10.5x10.8xFormerValueCoShareholders33.619.3%(EBITDA-Capex)/InterestExpense8.9x5.2x6.0x7.4x8.6x8.9x9.1xProFormaFullyDilutedShares173.6100.0%SeniorSecuredDebt/EBITDA0.01.0x0.4x0.00.00.00.0AnnualEPSAccretion/(Dilution)SensitivityAnalysis-PremiumPaidSeniorDebt/EBITDA1.5x2.6x1.9x1.4x1.4x1.3x1.3xYearTotalDebt/EBITDA1.5x2.6x1.9x1.4x1.4x1.3x1.3xOfferPricePremium201220132014201520164.7%7.0%10.1%11.6%11.6%NetDebt/EBITDA1.2x2.4x1.8x1.3x0.8x0.3x(0.1x)$54.3825%7.3%9.5%12.4%13.6%13.7%Debt/TotalCapitalization47.0%55.3%45.2%34.7%31.1%28.1%25.5%$56.5530%6.0%8.2%11.3%12.6%12.7%$58.7335%4.7%7.0%10.1%11.6%11.6%$60.9040%3.5%5.7%8.9%10.5%10.6%Accretion/(Dilution)Analysis$63.0845%2.2%4.5%7.7%9.4%9.7%BuyerCoStandaloneDilutedEPS$5.20$5.62$6.01$6.36$6.66$6.892013EEPSAccretion/(Dilution)SensitivityAnalysis-PremiumPaid&ConsiderationMixValueCoStandaloneDilutedEPS$3.36$3.71$4.08$4.44$4.70$4.86%StockConsiderationMixOfferPricePremium0%25%50%75%100%7.0%0.0%25.0%50.0%75.0%100.0%ProFormaCombinedDilutedEPS$5.45$6.01$6.62$7.09$7.43$7.70$54.3825%25.2%16.5%9.5%3.4%(2.9%)Accretion/(Dilution)-$$0.25$0.39$0.61$0.74$0.77$0.81$56.5530%24.2%15.4%8.2%2.1%(4.2%)Accretion/(Dilution)-%4.7%7.0%10.1%11.6%11.6%11.7%$58.7335%23.3%14.3%7.0%0.8%(5.6%)Accretive/DilutiveAccretiveAccretiveAccretiveAccretiveAccretiveAccretive$60.9040%22.4%13.1%5.7%(0.4%)(6.9%)BreakevenPre-TaxSynergies/(Cushion)($68.8)($109.5)($170.2)($206.0)($216.9)($225.6)$63.0845%21.4%12.0%4.5%(1.6%)(8.1%)BreakevenSynergiesSensitivityAnalysis2013EEPSAccretion/(Dilution)SensitivityAnalysis-PremiumPaid&SynergiesSynergiesRequiredtoBreakevenEstimatedSynergiesOfferPricePremium20122013201420152016OfferPricePremium$0$50$100$150$200$31($10)($70)($106)($117)7.0%$0$50$100$150$200$54.3825%($5)($47)($106)($139)($151)$54.3825%2.9%6.2%9.5%12.8%16.0%$56.5530%$13($28)($88)($123)($134)$56.5530%1.7%5.0%8.2%11.5%14.7%$58.7335%$31($10)($70)($106)($117)$58.7335%0.5%3.7%7.0%10.2%13.4%$60.9040%$49$9($51)($88)($100)$60.9040%(0.7%)2.5%5.7%8.9%12.1%$63.0845%$67$28($31)($70)($83)$63.0845%(1.9%)1.3%4.5%7.7%10.9%Debt/EBITDAEBITDA/InterestExpense%StockConsiderationMix%StockConsiderationMix2.6x0%25%50%75%100%6.2x0%25%50%75%100%25%3.42x2.95x2.48x2.01x1.54x25%4.88x5.50x6.32x7.41x8.96x30%3.49x3.00x2.51x2.03x1.54x30%4.79x5.42x6.24x7.36x8.96x35%3.57x3.06x2.55x2.04x1.54x35%4.70x5.34x6.17x7.31x8.96x40%3.65x3.12x2.59x2.06x1.54x40%4.62x5.26x6.10x7.26x8.96x45%3.72x3.18x2.63x2.08x1.54x45%4.54x5.18x6.03x7.21x8.96x($inmillions,exceptpersharedata,fiscalyearendingDecember31)ProFormaIncomeStatementHistoricalPeriodProjectionPeriodLTMProFormaYear1Year2Year3Year4Year52009201020119/30/2012201220132014201520162017BuyerCoSales$4,771.7$5,484.7$6,232.6$6,559.6$6,755.8$7,228.7$7,662.4$8,045.5$8,367.4$8,618.4ValueCoSales2,600.02,900.03,200.03,385.03,450.03,708.83,931.34,127.84,293.04,421.7TotalSales$7,371.7$8,384.7$9,432.6$9,944.6$10,205.8$10,937.5$11,593.7$12,173.4$12,660.3$13,040.1%growthNA13.7%12.5%NA8.2%7.2%6.0%5.0%4.0%3.0%BuyerCoCOGS$3,053.9$3,455.4$3,864.2$4,067.0$4,188.6$4,481.8$4,750.7$4,988.2$5,187.8$5,343.4ValueCoCOGS1,612.01,769.01,920.02,035.02,070.02,225.32,358.82,476.72,575.82,653.0TotalCOGS$4,665.9$5,224.4$5,784.2$6,102.0$6,258.6$6,707.0$7,109.5$7,464.9$7,763.5$7,996.4%sales63.3%62.3%61.3%61.4%61.3%61.3%61.3%61.3%61.3%61.3%BuyerCoGrossProfit$1,717.8$2,029.3$2,368.4$2,492.6$2,567.2$2,746.9$2,911.7$3,057.3$3,179.6$3,275.0ValueCoGrossProfit988.01,131.01,280.01,350.01,380.01,483.51,572.51,651.11,717.21,768.7TotalGrossProfit$2,705.8$3,160.3$3,648.4$3,842.6$3,947.2$4,230.4$4,484.2$4,708.4$4,896.8$5,043.7%margin36.7%37.7%38.7%38.6%38.7%38.7%38.7%38.7%38.7%38.7%BuyerCoSG&A$811.2$905.0$997.2$1,049.5$1,080.9$1,156.6$1,226.0$1,287.3$1,338.8$1,378.9ValueCoSG&A496.6551.0608.0650.0655.0704.1746.4783.7815.0839.5TotalSG&A$1,307.8$1,456.0$1,605.2$1,699.5$1,735.9$1,860.7$1,972.4$2,071.0$2,153.8$2,218.4%sales17.7%17.4%17.0%17.1%17.0%17.0%17.0%17.0%17.0%17.0%BuyerCoEBITDA$906.6$1,124.4$1,371.2$1,443.1$1,486.3$1,590.3$1,685.7$1,770.0$1,840.8$1,896.0ValueCoEBITDA491.4580.0672.0700.0725.0779.4826.1867.4902.1929.2Synergies0.00.00.0100.0100.0100.0100.0100.0100.0100.0TotalEBITDA$1,398.0$1,704.4$2,043.2$2,243.1$2,311.3$2,469.7$2,611.9$2,737.5$2,843.0$2,925.3%margin19.0%20.3%21.7%22.6%22.6%22.6%22.5%22.5%22.5%22.4%BuyerCoDepreciation135.1144.6153.2160.9167.3172.4BuyerCoAmortization33.836.138.340.241.843.1ValueCoDepreciation155.3166.9176.9185.8193.2199.0ValueCoAmortization51.855.659.061.964.466.3DepreciationonTangibleAssetWrite-up22.022.022.022.022.022.0AmortizationonIntangibleAssetWrite-up14.714.714.714.714.714.7EBIT$1,898.7$2,029.8$2,147.8$2,252.0$2,339.5$2,407.8%margin18.6%18.6%18.5%18.5%18.5%18.5%InterestExpenseRevolvingCreditFacility0.00.00.00.00.00.0BuyerCoTermLoan0.00.00.00.00.00.0NewTermLoanB104.578.326.00.00.00.0BuyerCoSeniorNotes143.0143.0143.0143.0143.0143.0NewSeniorNotes112.5112.5112.5112.5112.5112.5SeniorSubordinatedNotes0.00.00.00.00.00.0CommitmentFeeonUnusedRevolver2.52.52.52.52.52.5AdministrativeAgentFee0.20.20.20.20.20.2CashInterestExpense$362.7$336.4$284.2$258.2$258.2$258.2AmortizationofDeferredFinancingFees12.112.112.112.112.112.1TotalInterestExpense$374.7$348.5$296.2$270.2$270.2$270.2InterestIncome(1.5)(1.5)(1.3)(4.4)(10.7)(17.2)NetInterestExpense$373.2$347.0$294.9$265.8$259.5$253.0EarningsBeforeTaxes$1,525.5$1,682.8$1,852.8$1,986.2$2,080.0$2,154.9Plus:Non-TaxDeductibleDepreciation22.022.022.022.022.022.0Plus:Non-TaxDeductibleAmortization14.714.714.714.714.714.7TaxableIncome$1,562.2$1,719.5$1,889.5$2,022.9$2,116.7$2,191.5CurrentIncomeTaxExpense593.6653.4718.0768.7804.3832.8DeferredTaxExpense(13.9)(13.9)(13.9)(13.9)(13.9)(13.9)NetIncome$945.8$1,043.3$1,148.8$1,231.4$1,289.6$1,336.0%margin9.3%9.5%9.9%10.1%10.2%10.2%DilutedSharesOutstanding173.6173.6173.6173.6173.6173.6DilutedEPS$5.45$6.01$6.62$7.09$7.43$7.70%growth10.3%10.1%7.2%4.7%3.6%BuyerCoMarginalTaxRate38.0%38.0%38.0%38.0%38.0%38.0%EffectiveTaxRate38.9%38.8%38.8%38.7%38.7%38.6%($inmillions,fiscalyearendingDecember31)ProFormaBalanceSheetStandaloneProjectionPeriodBuyerCoValueCoAdjustmentsProFormaYear1Year2Year3Year4Year520122012+-201220132014201520162017CashandCashEquivalents$400.0$250.0(300.0)$350.0$250.0$275.3$1,489.9$2,775.3$4,121.3AccountsReceivable1,000.0450.01,450.01,553.81,647.01,729.31,798.51,852.5Inventories1,225.0600.01,825.01,955.82,073.12,176.72,263.82,331.7PrepaidsandOtherCurrentAssets525.0175.0700.0749.9794.9834.6868.0894.0TotalCurrentAssets$3,150.0$1,475.0$4,325.0$4,509.4$4,790.3$6,230.6$7,705.6$9,199.5Property,PlantandEquipment,net2,500.02,500.0330.05,330.05,380.35,434.95,493.45,555.05,619.2Goodwill575.01,000.01,859.0(1,000.0)2,434.02,434.02,434.02,434.02,434.02,434.0IntangibleAssets825.0875.0220.01,920.01,813.61,701.61,584.81,463.91,339.8OtherAssets450.0150.0600.0600.0600.0600.0600.0600.0DeferredFinancingFees0.00.090.090.077.965.953.841.829.7TotalAssets$7,500.0$6,000.0$14,699.0$14,815.2$15,026.7$16,396.6$17,800.3$19,222.3AccountsPayable925.0215.01,140.01,220.91,294.11,358.81,413.21,455.6AccruedLiabilities945.0275.01,220.01,306.81,385.21,454.41,512.61,558.0OtherCurrentLiabilities225.0100.0325.0348.3369.1387.6403.1415.2TotalCurrentLiabilities$2,095.0$590.0$2,685.0$2,875.9$3,048.5$3,200.9$3,328.9$3,428.8RevolvingCreditFacility0.00.00.00.00.00.00.00.0BuyerCoTermLoan0.00.00.00.00.00.00.00.0ValueCoTermLoan0.01,000.0(1,000.0)0.00.00.00.00.00.0NewTermLoanB0.00.02,200.02,200.01,095.90.00.00.00.0BuyerCoSeniorNotes2,200.00.02,200.02,200.02,200.02,200.02,200.02,200.0ValueCoSeniorNotes0.0500.0(500.0)0.00.00.00.00.00.0NewSeniorNotes0.00.01,500.01,500.01,500.01,500.01,500.01,500.01,500.0SeniorSubordinatedNotes0.00.00.00.00.00.00.00.0OtherDebt0.00.00.0DeferredIncomeTaxes100.0300.0209.0609.0595.1581.1567.2553.3539.3OtherLong-TermLiabilities625.0110.0735.0735.0735.0735.0735.0735.0TotalLiabilities$5,020.0$2,500.0$9,929.0$9,001.8$8,064.6$8,203.1$8,317.2$8,403.1NoncontrollingInterest0.00.00.00.00.00.00.00.0Shareholders'Equity2,480.03,500.02,290.0(3,500.0)4,770.05,813.36,962.18,193.59,483.110,819.1TotalShareholders'Equity$2,480.0$3,500.0$4,770.0$5,813.3$6,962.1$8,193.5$9,483.1$10,819.1TotalLiabilitiesandEquity$7,500.0$6,000.0$14,699.0$14,815.2$15,026.7$16,396.6$17,800.3$19,222.3BalanceCheck0.0000.0000.0000.0000.0000.0000.0000.000NetWorkingCapital655.0635.01,290.01,383.51,466.51,539.81,601.41,649.4(Increase)/DecreaseinNetWorkingCapital(93.5)(83.0)(73.3)(61.6)(48.0)BalanceSheetRatiosCurrentAssetsDaysSalesOutstanding(DSO)54.047.651.951.951.951.951.951.9DaysInventoryHeld(DIH)106.7105.8106.4106.4106.4106.4106.4106.4PrepaidandOtherCurrentAssets(%ofsales)7.8%5.1%6.9%6.9%6.9%6.9%6.9%6.9%CurrentLiabilitiesDaysPayableOutstanding(DPO)80.637.966.566.466.466.466.466.4AccruedLiabilities(%ofsales)14.0%8.0%12.0%11.9%11.9%11.9%11.9%11.9%OtherCurrentLiabilities(%ofsales)3.3%4.8%3.2%3.2%3.2%3.2%3.2%3.2%($inmillions,fiscalyearendingDecember31)ProFormaCashFlowStatementProjectionPeriodYear1Year2Year3Year4Year520132014201520162017OperatingActivitiesNetIncome$1,043.3$1,148.8$1,231.4$1,289.6$1,336.0Plus:Depreciation311.5330.2346.7360.5371.3Plus:Amortization91.897.3102.1106.2109.4Plus:DepreciationonTangibleAssetsWrite-up22.022.022.022.022.0Plus:AmortizationonIntangibleAssetsWrite-up14.714.714.714.714.7Plus:AmortizationofFinancingFees12.112.112.112.112.1ChangesinWorkingCapitalItems(Inc.)/Dec.inAccountsReceivable(103.8)(93.2)(82.3)(69.2)(54.0)(Inc.)/Dec.inInventories(130.8)(117.3)(103.7)(87.1)(67.9)(Inc.)/Dec.inPrepaidandOtherCurrentAssets(49.9)(45.0)(39.7)(33.4)(26.0)Inc./(Dec.)inAccountsPayable80.973.364.754.442.4Inc./(Dec.)inAccruedLiabilities86.878.469.358.245.4Inc./(Dec.)inOtherCurrentLiabilities23.320.918.515.512.1(Inc.)/Dec.inNetWorkingCapital(93.5)(83.0)(73.3)(61.6)(48.0)Inc./(Dec.)inDeferredTaxes(13.9)(13.9)(13.9)(13.9)(13.9)CashFlowfromOperatingActivities$1,387.9$1,528.0$1,641.7$1,729.6$1,803.5InvestingActivitiesCapitalExpenditures(383.8)(406.8)(427.1)(444.2)(457.5)OtherInvestingActivities0.00.00.00.00.0CashFlowfromInvestingActivities($383.8)($406.8)($427.1)($444.2)($457.5)FinancingActivitiesRevolvingCreditFacility0.00.00.00.00.0TermLoanA0.00.00.00.00.0BuyerCoTermLoan0.00.00.00.00.0NewTermLoanBFacility(1,104.1)(1,095.9)0.00.00.0ExistingTermLoan0.00.00.00.00.02ndLien0.00.00.00.00.0BuyerCoSeniorNotes0.00.00.00.00.0NewSeniorNotes0.00.00.00.00.0SeniorSubordinatedNotes0.00.00.00.00.0OtherDebt0.00.00.00.00.0Dividends0.00.00.00.00.0EquityIssuance/(Repurchase)0.00.00.00.00.0CashFlowfromFinancingActivities($1,104.1)($1,095.9)0.00.00.0ExcessCashforthePeriod($100.0)$25.3$1,214.6$1,285.4$1,346.0BeginningCashBalance350.0250.0275.31,489.92,775.3EndingCashBalance$250.0$275.3$1,489.9$2,775.3$4,121.3CapitalExpenditures(%ofsales)3.5%3.5%3.5%3.5%3.5%($inmillions,fiscalyearendingDecember31)ProFormaDebtScheduleProjectionPeriodProformaYear1Year2Year3Year4Year5201220132014201520162017ForwardLIBORCurve0.25%0.35%0.50%0.75%1.00%1.25%CashFlowfromOperatingActivities$1,387.9$1,528.0$1,641.7$1,729.6$1,803.5CashFlowfromInvestingActivities(383.8)(406.8)(427.1)(444.2)(457.5)CashAvailableforDebtRepayment$1,004.1$1,121.2$1,214.6$1,285.4$1,346.0TotalMandatoryRepaymentsMinCash(22.0)(22.0)0.00.00.0CashFromBalanceSheet250.0100.00.025.31,239.92,525.3CashAvailableforOptionalDebtRepayment$1,082.1$1,099.2$1,239.9$2,525.3$3,871.3RevolvingCreditFacilityRevolvingCreditFacilitySize$500.0Spread3.500%LIBORFloor1.000%Term6yearsCommitmentFeeonUnusedPortion0.50%BeginningBalance0.00.00.00.00.0Drawdown/(Repayment)0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestRate4.50%4.50%4.50%4.50%4.75%InterestExpense0.00.00.00.00.0CommitmentFee2.52.52.52.52.5AdministrativeAgentFee0.10.20.20.20.2TermLoanAFacilitySize0.0Spread0.0Term0yearsRepaymentSchedule0.00.00.00.00.0BeginningBalance0.00.00.00.00.0MandatoryRepayments0.00.00.00.00.0OptionalRepayments0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestRate0.35%0.50%0.75%1.00%1.25%InterestExpense0.00.00.00.00.0BuyerCoTermLoanSize0.0Spread0.0LIBORFloor0.0Term0yearsRepaymentSchedule0.0PerAnnum,BulletatMaturityBeginningBalance0.00.00.00.00.0MandatoryRepayments0.00.00.00.00.0OptionalRepayments0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestRate0.35%4.50%4.50%4.50%4.75%InterestExpense0.00.00.00.00.0NewTermLoanBFacilitySize$2,200.0Spread3.750%LIBORFloor1.000%Term7yearsRepaymentSchedule1.0%PerAnnum,BulletatMaturityBeginningBalance$2,200.0$1,095.90.00.00.0MandatoryRepayments(22.0)(22.0)0.00.00.0OptionalRepayments(1,082.1)(1,073.9)0.00.00.0EndingBalance$1,095.90.00.00.00.0InterestRate4.75%4.75%4.75%4.75%5.00%InterestExpense78.326.00.00.00.0TermLoanCFacilitySize0.0Spread0.0LIBORFloor0.0RemainingTerm0yearsRepaymentSchedule0.0PerAnnum,BulletatMaturityBeginningBalance0.00.00.00.00.0`MandatoryRepayments0.00.00.00.00.0OptionalRepayments0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestRate0.35%0.50%0.75%1.00%1.25%InterestExpense0.00.00.00.00.02ndLienSize0.0Spread0.0LIBORFloor0.0Term0yearsBeginningBalance0.00.00.00.00.0Repayment0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestRate0.35%0.50%0.75%1.00%1.25%InterestExpense0.00.00.00.00.0BuyerCoExistingSeniorNotesSize$2,200.0Coupon6.500%Term8yearsBeginningBalance$2,200.0$2,200.0$2,200.0$2,200.0$2,200.0Repayment0.00.00.00.00.0EndingBalance$2,200.0$2,200.0$2,200.0$2,200.0$2,200.0InterestExpense143.0143.0143.0143.0143.0NewSeniorNotesSize$1,500.0Coupon7.500%Term8yearsBeginningBalance$1,500.0$1,500.0$1,500.0$1,500.0$1,500.0Repayment0.00.00.00.00.0EndingBalance$1,500.0$1,500.0$1,500.0$1,500.0$1,500.0InterestExpense112.5112.5112.5112.5112.5NewSeniorSubordinatedNotesSize0.0Coupon0.0Term0yearsBeginningBalance0.00.00.00.00.0Repayment0.00.00.00.00.0EndingBalance0.00.00.00.00.0InterestExpense0.00.00.00.00.0($inmillions,fiscalyearendingDecember31)CapitalizationProjectionPeriodBuyerCoValueCoAdjustmentsProforma1234520122012+-201220132014201520162017Cash$400.0$250.0(300.0)$350.0$250.0$275.3$1,489.9$2,775.3$4,121.3RevolvingCreditFacility0.00.00.00.00.00.00.00.0ValueCoTermLoan0.01,000.0(1,000.0)0.00.00.00.00.00.0NewTermLoanB0.00.02,200.02,200.01,095.90.00.00.00.0OtherDebt0.00.00.00.00.00.00.00.0TotalSeniorSecuredDebt0.0$1,000.0$2,200.0$1,095.90.00.00.00.0BuyerCoSeniorNotes2,200.00.02,200.02,200.02,200.02,200.02,200.02,200.0ValueCoSeniorNotes0.0500.0(500.0)0.00.00.00.00.00.0NewSeniorNotes0.00.01,500.01,500.01,500.01,500.01,500.01,500.01,500.0TotalSeniorDebt$2,200.0$1,500.0$5,900.0$4,795.9$3,700.0$3,700.0$3,700.0$3,700.0SeniorSubordinatedNotes0.00.0TotalDebt$2,200.0$1,500.0$5,900.0$4,795.9$3,700.0$3,700.0$3,700.0$3,700.0Shareholders'Equity2,480.03,500.02,290.0(3,500.0)4,770.05,813.36,962.18,193.59,483.110,819.1TotalCapitalization$4,680.0$5,000.0$10,670.0$10,609.2$10,662.1$11,893.5$13,183.1$14,519.1%ofBankDebtRepaid0.050.2%100.0%100.0%100.0%100.0%CreditStatisticsEBITDA$1,486.3$725.0100.0$2,311.3$2,469.7$2,611.9$2,737.5$2,843.0$2,925.3CapitalExpenditures202.7155.3357.9383.8406.8427.1444.2457.5InterestExpense144.485.9144.4374.7348.5296.2270.2270.2270.2EBITDA/InterestExpense10.3x8.4x6.2x7.1x8.8x10.1x10.5x10.8x(EBITDA-Capex)/InterestExpense8.9x6.6x5.2x6.0x7.4x8.6x8.9x9.1xSeniorSecuredDebt/EBITDA0.01.4x1.0x0.4x0.00.00.00.0SeniorDebt/EBITDA1.5x2.1x2.6x1.9x1.4x1.4x1.3x1.3xTotalDebt/EBITDA1.5x2.1x2.6x1.9x1.4x1.4x1.3x1.3xNetDebt/EBITDA1.2x1.7x2.4x1.8x1.3x0.8x0.3x(0.1x)%Debt/TotalCapitalization47.0%30.0%55.3%45.2%34.7%31.1%28.1%25.5%Debt/EBITDAEBITDA/InterestExpense%StockConsiderationMix%StockConsiderationMix2.6x0%25%50%75%100%6.2x0%25%50%75%100%25%3.4x2.9x2.5x2.0x1.5x25%4.9x5.5x6.3x7.4x9.0xPremium30%3.5x3.0x2.5x2.0x1.5xPremium30%4.8x5.4x6.2x7.4x9.0xPaid35%3.6x3.1x2.6x2.0x1.5xPaid35%4.7x5.3x6.2x7.3x9.0x40%3.6x3.1x2.6x2.1x1.5x40%4.6x5.3x6.1x7.3x9.0x45%3.7x3.2x2.6x2.1x1.5x45%4.5x5.2x6.0x7.2x9.0x($inmillions,exceptpersharedata)Accretion/(Dilution)Analysis-50%Stock/50%CashProjectionPeriodProforma12345201220132014201520162017BuyerCoEBIT$1,317.4$1,409.6$1,494.2$1,568.9$1,631.6$1,680.6ValueCoEBIT518.0556.9590.3619.8644.6663.9Synergies100.0100.0100.0100.0100.0100.0ProFormaCombinedEBIT(pre-dealstructure)$1,935.4$2,066.4$2,184.4$2,288.7$2,376.2$2,444.5DepreciationfromWrite-Up22.022.022.022.022.022.0AmortizationfromWrite-Up14.714.714.714.714.714.7ProFormaCombinedEBIT$1,898.7$2,029.8$2,147.8$2,252.0$2,339.5$2,407.8StandaloneNetInterestExpense142.4140.6137.0133.0128.9124.5IncrementalNetInterestExpense230.8206.3157.9132.8130.7128.5EarningsBeforeTaxes$1,525.5$1,682.8$1,852.8$1,986.2$2,080.0$2,154.9IncomeTaxExpense@38.0%579.7639.5704.1754.8790.4818.8ProFormaCombinedNetIncome$945.8$1,043.3$1,148.8$1,231.4$1,289.6$1,336.0BuyerCoStandaloneNetIncome$728.5$786.8$841.5$890.2$931.7$964.8StandaloneFullyDilutedSharesOutstanding140.0140.0140.0140.0140.0140.0NetNewSharesIssuedinTransaction33.633.633.633.633.633.6ProFormaFullyDilutedSharesOutstanding173.6173.6173.6173.6173.6173.6ProFormaCombinedDilutedEPS$5.45$6.01$6.62$7.09$7.43$7.70BuyerCoStandaloneDilutedEPS$5.20$5.62$6.01$6.36$6.66$6.89Accretion/(Dilution)
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