Consolidated Income Statements `

(in US$ millions except per share amounts) Actuals Estimates

Period Ending January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017

Revenue
Net Sales 405,132.0 418,952.0 443,854.0
% Growth 3.4% 5.9%
Membership and Other Income 2,953.0 2,897.0 3,096.0

% Growth -1.9% 6.9%

Total revenue 408,085.0 421,849.0 446,950.0 460,358.5 474,169.3 488,394.3 503,046.2 518,137.5

Y/Y revenue growth (%) 3.4% 6.0% 3.0% 3.0% 3.0% 3.0% 3.0%

Cost of goods sold

Cost of goods sold 304,106.0 314,946.0 335,127.0 345,268.9 355,626.9 366,295.7 377,284.6 388,603.2
COGS as a % of revenue 74.5% 74.7% 75% 75.0% 75.0% 75.0% 75.0% 75.0%

Gross profit 103,979.0 106,903.0 111,823.0 115,089.6 118,542.3 122,098.6 125,761.5 129,534.4
Gross profit margin (%) 25.5% 25.3% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%

Operating expenses
Selling, general and administrative 72,820.0 73,720.0 77,135.0 79,642.0 82,031.3 84,492.2 87,027.0 89,637.8
SG&A as a % of revenue 17.8% 17.5% 17.3% 17.3% 17.3% 17.3% 17.3% 17.3%

EBITDA 31,159.0 33,183.0 34,688.0 35,447.6 36,511.0 37,606.4 38,734.6 39,896.6

EBITDA margin (%) 7.6% 7.9% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8%

Depreciation and amortization 7,157.0 7,641.0 8,130.0 8,575.6 9,144.6 9,730.6 10,334.3 10,956.1

EBIT 24,002.0 25,542.0 26,558.0 26,872.0 27,366.5 27,875.7 28,400.2 28,940.5

EBIT margin (%) 5.9% 6.1% 5.9% 5.8% 5.8% 5.7% 5.6% 5.6%

Interest
Interest expense (Debt) 1,787.0 1,928.0 2,034.0 2,083.8 2,083.8 2,083.8 2,083.8 2,083.8
Interest expense (Capital Leases) 278.0 277.0 288.0 281.6 281.6 281.6 281.6 281.6
Interest income (181.0) (201.0) (162.0) (161.6) (170.5) (192.7) (220.3) (266.5)
Net interest expense 1,884.0 2,004.0 2,160.0 2,203.9 2,195.0 2,172.7 2,145.1 2,099.0

EBT 22,118.0 23,538.0 24,398.0 24,668.2 25,171.5 25,703.0 26,255.1 26,841.5

EBT margin (%) 5.4% 5.6% 5.5% 5% 5% 5% 5% 5%

Income tax expense 7,156.0 7,579.0 7,944.0 8,140.5 8,306.6 8,482.0 8,664.2 8,857.7
Tax rate (%) 32.4% 32.2% 32.6% 33.0% 33.0% 33.0% 33.0% 33.0%

Net Income (Adjusted) 14,962.0 15,959.0 16,454.0 16,527.7 16,864.9 17,221.0 17,590.9 17,983.8

Non-recurring events
Discontinued operations (79.0) 1,034.0 (67.0) 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total non-recurring events (79.0) 1,034.0 (67.0) 0.0 0.0 0.0 0.0 0.0

Net Income (After non-recurring events) 14,883.0 16,993.0 16,387.0 16,527.7 16,864.9 17,221.0 17,590.9 17,983.8

Distributions
Income attributable to non-controlling interests (513.0) (604.0) (688.0) (694.2) (708.3) (723.3) (738.8) (755.3)
Non-controlling interests % of Net Income 3.4% 3.6% 4.2% 4.2% 4.2% 4.2% 4.2% 4.2%

Net Income (as Reported) 14,370.0 16,389.0 15,699.0 15,833.5 16,156.6 16,497.7 16,852.1 17,228.5

Earnings per share (EPS)

Basic 3.72 4.48 4.54 4.71 4.95 5.22 5.50 5.81
Diluted 3.71 4.47 4.52 4.70 4.95 5.21 5.49 5.80

Average common shares outstanding

Basic 3,866 3,656 3,460 3,361 3,262 3,163 3,064 2,965
Diluted 3,877 3,670 3,474 3,366 3,267 3,168 3,069 2,970
Shares repurchased 99 99 99 99

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Consolidated Statements of Cash Flows

(in US$ millions) Actuals Estimates

ANSWER:
Period Ending January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017

Cash flows from operating activities (CFO) Total Cash flows from operating activities (CFO)

Net income 14,883.0 16,993.0 16,387.0 16,527.7 16,864.9 17,221.0 17,590.9 17,983.8 2013E 2014E 2015E 2016E 2017E

Loss (income) from discontinued operations 79.0 (1,034.0) 67.0 0.0 0.0 0.0 0.0 0.0 $ 26,777 $ 27,562 $ 28,291 $ 29,071 $ 29,904

Depreciation and amortization 7,157.0 7,641.0 8,130.0 8,575.6 9,144.6 9,730.6 10,334.3 10,956.1 DISCOUNT RATE = 5.16% <--- INPUT

Deferred income taxes (504.0) 651.0 1,050.0 712.5 993.6 773.4 571.8 382.4 PV= $ 25,463 $ 24,923 $ 24,328 $ 23,771 $ 23,253

Other Operating Activities 318.0 1,087.0 398.0 318.0 318.0 318.0 318.0 318.0 YEAR 1 2 3 4 5

Changes in operating working capital

Changes in accounts receivable (297.0) (733.0) (796.0) 310.4 (168.8) (173.9) (179.1) (184.5) NPV= $ 121,738

Changes in inventory 2,213.0 (3,205.0) (3,727.0) 1,008.1 (1,191.2) (1,226.9) (1,263.7) (1,301.6)

Changes in prepaid expenses and other 0.0 0.0 0.0 (704.3) (71.7) (73.8) (76.0) (78.3) Let COGS% vary from 73% to 77% , increasing by 1%

Changes in accounts payable 1,052.0 2,676.0 2,687.0 (354.8) 1,087.6 1,120.2 1,153.8 1,188.4 Let REVENUE GROWTH% vary from 1% to 6% , increasing by 1%

Changes in accrued liabilities 1,348.0 (433.0) 59.0 871.6 570.8 587.9 605.5 623.7

Changes in accrued income taxes 0.0 0.0 0.0 (487.9) 13.8 14.6 15.1 16.1

Net changes in operating working capital 4,316.0 (1,695.0) (1,777.0) 643.2 240.5 248.1 255.7 263.8 TWO-WAY DATATABLE

Total cash flows from operating activities 26,249.0 23,643.0 24,255.0 26,776.9 27,561.6 28,291.1 29,070.7 29,904.1 EFFECT ON NPV CASH FLOW FORECAST: CHANGE IN: COGS% AND REVENUE % : 2013E - 2017E f(x) =
EFFECT OF REV% AND COGS% ON NP
Cash flows from investing activities (CFI) COGS %=
$160,000
Payments for property and equipment (CAPEX) (12,184.0) (12,699.0) (13,510.0) (13,810.8) (14,225.1) (14,651.8) (15,091.4) (15,544.1) NPV= $ 121,738 73% 74% 75% 76% 77% $150,000
$140,000
$130,000

NPV(CFO)
Capex as a % of Revenue 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 1.0%
$120,000
Proceeds from disposal of property and equipment 1,002.0 489.0 580.0 0.0 0.0 0.0 0.0 0.0 2.0% $110,000
$100,000
Investments and business acquisitions, net of cash acquired 0.0 (202.0) (3,548.0) 0.0 0.0 0.0 0.0 0.0 3.0% $90,000
$80,000
1.0% 2.0% 3.0% 4.0
Other investing activities (438.0) 219.0 (131.0) (438.0) 219.0 (131.0) (438.0) 219.0 REVENUE 4.0%
REVENUE GROWTH %
Total cash from investing activities (11,620.0) (12,193.0) (16,609.0) (14,248.8) (14,006.1) (14,782.8) (15,529.4) (15,325.1) GROWTH% = 5.0%

Cash flows from financing activities (CFF) 6.0% COGS=74% Li n

COGS=75% CO
Short-term borrowings (repayments) (1,033.0) 503.0 3,019.0 0.0 0.0 0.0 0.0 0.0 BASE CASE: Line a r (COGS=76%)

Long-term borrowings (repayments) (487.0) 7,316.0 466.0 0.0 0.0 0.0 0.0 0.0 REMARK: BASE CASE REVENUE% = US GDP, NOMINAL, 10 YEARS OF HISTORY, ENDING 2012

Long term debt due within one year 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REVENUE

Capital lease obligations due within one year 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 GROWTH% = 3.0%

Dividends paid (4,217.0) (4,437.0) (5,048.0) (5,344.7) (5,187.3) (5,029.9) (4,872.5) (4,715.1)

Dividends paid ($/share) 1.59 1.59 1.59 1.59 1.59 COGS %= 75.0%

Purchase of common stock [treasury stock] (7,276.0) (14,776.0) (6,298.0) (7,308.2) (7,308.2) (7,308.2) (7,308.2) (7,308.2)

Purchase of redeemable noncontrolling interest (436.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TWO-WAY DATATABLE

Capital Lease Obligations (346.0) (363.0) (355.0) 0.0 0.0 0.0 0.0 0.0 EFFECT ON NPV CASH FLOW FORECAST: CHANGE IN: COGS% AND REVENUE % : 2013E - 2017E

Other (396.0) (271.0) (242.0) (242.0) (242.0) (242.0) (242.0) (242.0) % DIFFERENCE FROM BASE CASE

Total cash from financing activities (14,191.0) (12,028.0) (8,458.0) (12,894.9) (12,737.5) (12,580.1) (12,422.6) (12,265.2) COGS %=

Effect of Exchange Rate on Cash 194.0 66.0 (33.0) 194.0 66.0 (33.0) 194.0 66.0 73% 74% 75% 76% 77%

Total change in cash and cash equivalents 632.0 (512.0) (845.0) (172.7) 884.0 895.3 1,312.6 2,379.7 1.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

SUPPLEMENTAL DATA: 2.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

Cash flow before debt paydown (172.7) 884.0 895.3 1,312.6 2,379.7 3.0% #VALUE! #VALUE! 0.0% #VALUE! #VALUE!

REVENUE 4.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

GROWTH% = 5.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

6.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!

OBSERVATION:

A 1% CHANGE IN REVENUE GROWTH INCREASES/DECREASES NPV OF FCST CASH FLOWS BY 3%, ON AVERAGE

A 1% CHANGE IN COGS/REV INCREASES/DECREASES NPV OF FCST CASH FLOWS BY 12%, ON AVERAGE

HENCE COGS% GROWTH IS SOME 4X AS IMPORTANT TO PROJECTED CASH FLOW FROM OPERATIONS AS REVENUE% GROWTH !

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Consolidated Balance Sheets
(in US$ millions) Actuals Estimates

On January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017

Assets
Current assets:
Cash and cash equivalents 7,395.0 6,550.0 6,377.3 7,261.3 8,156.6 9,469.2 11,848.9
Receivables, net 5,089.0 5,937.0 5,626.6 5,795.4 5,969.3 6,148.3 6,332.8
Inventories 36,437.0 40,714.0 39,705.9 40,897.1 42,124.0 43,387.7 44,689.4
Prepaid expenses and other 2,960.0 1,685.0 2,389.3 2,460.9 2,534.8 2,610.8 2,689.1
Other current assets (discontinued operations) 131.0 89.0 89.0 89.0 89.0 89.0 89.0
Total current assets 52,012.0 54,975.0 54,188.1 56,503.8 58,873.6 61,705.1 65,649.2
Property, plant and equipment, net 107,878.0 112,324.0 117,559.2 122,639.7 127,560.9 132,317.9 136,906.0
Goodwill 16,763.0 20,651.0 20,651.0 20,651.0 20,651.0 20,651.0 20,651.0
Other assets and deferred charges 4,129.0 5,456.0 5,576.0 5,039.0 4,852.0 4,972.0 4,435.0
Total assets 180,782.0 193,406.0 197,974.3 204,833.4 211,937.5 219,646.0 227,641.2

Liabilities
Current liabilities:
Short-term borrowings 1,031.0 4,047.0 4,047.0 4,047.0 4,047.0 4,047.0 4,047.0
Accounts payable 33,676.0 36,608.0 36,253.2 37,340.8 38,461.1 39,614.9 40,803.3
Accrued liabilities 18,701.0 18,154.0 19,025.6 19,596.4 20,184.3 20,789.8 21,413.5
Accrued income taxes 157.0 1,164.0 676.1 689.9 704.5 719.6 735.7
Long term debt due within one year 4,655.0 1,975.0 1,975.0 1,975.0 1,975.0 1,975.0 1,975.0
Obligations under capital leases due within one year 336.0 326.0 326.0 326.0 326.0 326.0 326.0
Current liabilities of discontinued operations 47.0 26.0 26.0 26.0 26.0 26.0 26.0
Total current liabilities 58,603.0 62,300.0 62,328.9 64,001.1 65,723.8 67,498.3 69,326.5
Long-term debt 40,692.0 44,070.0 44,070.0 44,070.0 44,070.0 44,070.0 44,070.0
Long-term obligations under capital leases 3,150.0 3,009.0 3,009.0 3,009.0 3,009.0 3,009.0 3,009.0
Deferred income taxes and other 6,682.0 7,862.0 8,574.5 9,568.1 10,341.6 10,913.4 11,295.7
Redeemable noncontrolling interest 408.0 404.0 404.0 404.0 404.0 404.0 404.0
Total liabilities 109,535.0 117,645.0 118,386.5 121,052.2 123,548.4 125,894.6 128,105.2

Shareholders' equity
Common stock par value + additional paid-in-capital 3,929.0 4,034.0 4,034.0 4,034.0 4,034.0 4,034.0 4,034.0

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 Retained earnings 63,967.0 68,691.0 72,565.8 76,935.2 81,818.1 87,228.4 93,189.0
Accumulated other comprehensive income (loss) 646.0 (1,410.0) (1,458.0) (1,634.0) (1,909.0) (1,957.0) (2,133.0)
Total shareholders' equity 68,542.0 71,315.0 75,141.8 79,335.2 83,943.1 89,305.4 95,090.0
Noncontrolling interest 2,705.0 4,446.0 4,446.0 4,446.0 4,446.0 4,446.0 4,446.0

Total liabilities & equity 180,782.0 193,406.0 197,974.3 204,833.4 211,937.5 219,646.0 227,641.2

SUPPLEMENTAL DATA:
Balance? (Y/N) Y Y Y Y Y Y Y

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Depreciation
(in US$ millions) Actuals Estimates

Period Ending January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017
Property, plant & equipment (beg. of year) 112,324.0
Capital expenditures (beg. of year) 13,810.8 14,225.1 14,651.8 15,091.4 15,544.1

Book (GAAP) depreciation

Useful Life
PP&E Years 14
CAPEX Years 25 25 25 25 25
Depreciation
Existing PP&E 8,023.1 8,023.1 8,023.1 8,023.1 8,023.1
2013 CAPEX 552.4 552.4 552.4 552.4 552.4
2014 CAPEX 569.0 569.0 569.0 569.0
2015 CAPEX 586.1 586.1 586.1
2016 CAPEX 603.7 603.7
2017 CAPEX 621.8
Total book depreciation 8,575.6 9,144.6 9,730.6 10,334.3 10,956.1

Accelerated depreciation (%)

Existing PP&E 8.75% 9.13% 8.21% 7.39% 6.65%
2013 CAPEX 6.56% 7.00% 6.48% 6.00% 5.55%
2014 CAPEX 6.56% 7.00% 6.48% 6.00%
2015 CAPEX 6.56% 7.00% 6.48%
2016 CAPEX 6.56% 7.00%
2017 CAPEX 6.56%

Accelerated depreciation
Existing PP&E 9,828.4 10,255.2 9,221.8 8,300.7 7,469.5
2013 CAPEX 906.4 966.8 895.2 828.1 765.9
2014 CAPEX 933.6 995.8 922.1 852.9
2015 CAPEX 961.6 1,025.6 949.7
2016 CAPEX 990.4 1,056.4
2017 CAPEX 1,020.2
Total tax depreciation 10,734.7 12,155.5 12,074.4 12,067.0 12,114.7

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 Difference in depreciation 2,159.2 3,010.9 2,343.7 1,732.7 1,158.6
Tax rate (%) 33% 33% 33% 33% 33%
Deferred taxes 712.5 993.6 773.4 571.8 382.4

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Operating Working Capital Schedule (OWC)
(in US$ millions) Actuals Estimates

On January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017

Current assets
Receivables, net 5,089.0 5,937.0 5,626.6 5,795.4 5,969.3 6,148.3 6,332.8
Days receivable: (AR/REV)*360 4.4 4.4 4.4 4.4 4.4 4.4
Inventories 36,437.0 40,714.0 39,705.9 40,897.1 42,124.0 43,387.7 44,689.4
Inventory turnover days: (INV/COGS)*360 41.4 41.4 41.4 41.4 41.4 41.4
Prepaid expenses and other 2,960.0 1,685.0 2,389.3 2,460.9 2,534.8 2,610.8 2,689.1
Days prepaid: (PREPAID/SG&A)*360 10.8 10.8 10.8 10.8 10.8 10.8
Total current assets 44,486.0 48,336.0 47,721.8 49,153.4 50,628.0 52,146.9 53,711.3

Current liabilities
Accounts payable 33,676.0 36,608.0 36,253.2 37,340.8 38,461.1 39,614.9 40,803.3
Days payable:(AP/COGS)*360 37.8 37.8 37.8 37.8 37.8 37.8
Accrued liabilities 18,701.0 18,154.0 19,025.6 19,596.4 20,184.3 20,789.8 21,413.5
Days payable: (AL/SG&A)*360 86.0 86.0 86.0 86.0 86.0 86.0
Accrued taxes 157.0 1,164.0 676.1 689.9 704.5 719.6 735.7
Days Payable: (ACCRUED_TAX / INC_TAX_EXP)*360 29.9 29.9 29.9 29.9 29.9 29.9
Total current liabilities 52,534.0 55,926.0 55,954.9 57,627.1 59,349.8 61,124.3 62,952.5

Total operating working capital (8,048.0) (7,590.0) (8,233.2) (8,473.7) (8,721.7) (8,977.4) (9,241.2)
Change in total operating working capital 643.2 240.5 248.1 255.7 263.8

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Debt Schedule
(in US$ millions) Actuals Estimates

Period Ending January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017

Cash available to pay down debt

Cash at beginning of year =cash at year end, t-1 6,550.0 6,377.3 7,261.3 8,156.6 9,469.2
Cash flow before debt paydown= cash flow statement, t (172.7) 884.0 895.3 1,312.6 2,379.7
Minimum cash cushion (1,000.0) (1,000.0) (1,000.0) (1,000.0) (1,000.0)
Total cash available to pay down debt 5,377.3 6,261.3 7,156.6 8,469.2 10,848.9

Short term borrowings / revolver

Short term borrowings (beginning of year) 4,047.0 4,047.0 4,047.0 4,047.0 4,047.0
Mandatory issuances / (retirements) switch= 0.0 0.0 0.0 0.0 0.0
Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0 0.0
Short term borrowings (end of year) 4,047.0 4,047.0 4,047.0 4,047.0 4,047.0 4,047.0
Short term interest expense 4.0 4.0 4.0 4.0 4.0
Short term interest rate 0.1% 0.1% 0.1% 0.1% 0.1%

Long term debt due within one year

Long term debt due within one year (beginning of year) 1,975.0 1,975.0 1,975.0 1,975.0 1,975.0
Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Long term debt due within one year (end of year) 1,975.0 1,975.0 1,975.0 1,975.0 1,975.0 1,975.0
Interest expense 96.8 96.8 96.8 96.8 96.8
Interest rate 4.9% 4.9% 4.9% 4.9% 4.9%

Obligations under capital leases due within one year

Obligations under capital leases due within one year (beginning of year) 326.0 326.0 326.0 326.0 326.0
Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Obligations under capital leases due within one year (end of year) 326.0 326.0 326.0 326.0 326.0 326.0
Interest expense 27.5 27.5 27.5 27.5 27.5
Interest rate: SEE P. 223 OF PIGNATARO 8.4% 8.4% 8.4% 8.4% 8.4%

Long term debt

Long term debt (beginning of year) 44,070.0 44,070.0 44,070.0 44,070.0 44,070.0

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 Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Long term debt (end of year) 44,070.0 44,070.0 44,070.0 44,070.0 44,070.0 44,070.0
Interest expense 1,983.0 1,983.0 1,983.0 1,983.0 1,983.0
Interest rate (T) = RATE (T-1) 4.5% 4.5% 4.5% 4.5% 4.5%

Long term obligations under capital leases

Long term obligations under capital leases (beginning of year) 3,009.0 3,009.0 3,009.0 3,009.0 3,009.0
Mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Non-mandatory issuances / (retirements) 0.0 0.0 0.0 0.0 0.0
Long term obligations under capital leases (end of year) 3,009.0 3,009.0 3,009.0 3,009.0 3,009.0 3,009.0
Interest expense 254.1 254.1 254.1 254.1 254.1
Interest rate 8.4% 8.4% 8.4% 8.4% 8.4%

Total issuances / (retirements) 0.0 0.0 0.0 0.0 0.0

Total interest expense 2,365.5 2,365.5 2,365.5 2,365.5 2,365.5

Cash at the end of the year = CASH_BEG+CASH_AVAIL+TOTAL ISSUANCES 6,550.0 6,377.3 7,261.3 8,156.6 9,469.2 11,848.9
Interest income = AVG(CASH_BEG+CASH_END)*INTEREST RATE 161.6 170.5 192.7 220.3 266.5

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Discounted Cash Flow Analysis
(in US$ millions) Actuals Estimates

Period Ending January 31 2010A 2011A 2012A 2013 2014 2015 2016 2017
Unlevered Free Cash Flow
EBIT 26,558.0 26,872.0 27,366.5 27,875.7 28,400.2 28,940.5
Depreciation & Amortization 8,130.0 8,575.6 9,144.6 9,730.6 10,334.3 10,956.1
Deferred Taxes 1,050.0 712.5 993.6 773.4 571.8 382.4
Other 398.0 318.0 318.0 318.0 318.0 318.0
Changes in Working Capital (1,777.0) 643.2 240.5 248.1 255.7 263.8
Capital Expenditures (13,510.0) (13,810.8) (14,225.1) (14,651.8) (15,091.4) (15,544.1)
Taxes (8,647.3) (8,867.8) (9,030.9) (9,199.0) (9,372.1) (9,550.4)
Total Unlevered Free Cash Flow 12,201.7 14,442.8 14,807.1 15,095.1 15,416.5 15,766.3
Net Present Value Calulation UFCF GROWTH RATE= 5.26%
Period 1.0 2.0 3.0 4.0 5.0
Discounted Cash Flow 5.16% 13,734.5 13,390.5 12,981.4 12,607.7 12,261.4 5.16% 14254.06 14032.40382 13646.58 13198.16 12683.5
Total Net Present Value 64,975.5 67,814.7
Terminal Value
EBITDA Method Cost of Capital
Exit Year EBITDA 39,896.6 Risk Free Rate 2.93% Debt YE 2012 53,427
Multiple EV(2012A)= 300,186.0 8.654x Market Risk Premium 6.00% Stock Price 73.82
Terminal Value EV(2017E)= 345,260.6 Beta 0.42 Shares Outstanding 3,366
Net Present Value 268,509.4 Cost of Equity 5.45% Equity Value 248,459.0
Perpetuity Method Cost of Debt 5.625%
Unlevered Free Cash Flow 15,766.3 Equity % = 82.30%
Growth Rate 1.0% WACC 5.16% Debt % = 17.70%
Terminal Value UFCF(2017E)*(1+g) / (r-g) = 383,077.7
Net Present Value 297,919.8

Discounted Cash Flow Total Valuation EBITDA Method Perpetuity Method

Total of Present Value of Cash Flows 64,975.5 64,975.5
Present Value of Terminal Value 268,509.4 297,919.8
Total Enterprise Value 333,484.9 362,895.3
Net Debt, Non-controlling interests, preferred s 51,727.0 51,727.0
Equity Value 281,757.9 311,168.3 EFFECT OF BETA ON PRICE /SHARE PERPETUITY METHOD
Share Count (millions) 3,365.7 3,365.7 SENSITIVTY TEST: SENSITIVTY TEST:
Estimated Equity Value per Share $83.71 $92.45 DATATABLE: 1-WAY DATATABLE: 2-WAY

IMPLIED g = 0.56% EBITDA PERPETUITY CASH FLOW GROWTH RATE (g)

VALUATION: g such that PERPETUITY METHOD=EBITDA METHOD BETA= 0.42 $83.71 $92.45 PRICE/SHR= $92.45 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75%
0.32 4.00%
0.42 4.50%
IMPLIED Exit Multiple 9.60 0.52 WACC= 5.16%
VALUATION: Multiple such that EBITDA METHOD = PERPETUITY METHOD 0.62 5.50%
0.72 6.00%
6.50%
NOTE:
IMPLIED UFCF g:
EFFECT OF WACC AND CASH GROWTH ON STOCK PRICE
100.0
compued by setting TV (perpetuity method) = TV (multiple method) and solving for g:
95.0
g = ( TV(multiple)*WACC - UFCF(T+5) ) / (TV(multiple) + UFCF(T+5) ) EFFECT OF BETA ON PRICE/SHARE
90.0

g= 0.56% 80.00
85.0
75.00
80.0
PRICE / SHARE

70.00 g = .50
75.0 g = 1.00
IMPLIED MULTIPLE: EV (T+5) / EBITDA(T+5) 65.00 g = 1.50
70.0
computed by setting implied multiple = TV (perpetuity method) / EBITDA(T+5) 60.00
65.0
55.00
multiple (implied) = 60.0
9.60 50.00

55.0
45.00

50.0
40.00
0.32 0.42 0.52 0.62 0.72 4.00% 4.50% 5.16% 5.50% 6.00% 6.50%

EBITDA PERPETUITY WACC