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Valuing the cash flows to capital under the pre-bid plan when interest tax shields are included

in the cash flows


(millions of dollars except per share data)
1989

1990

1991

1992

1993

Cash Flows available for capital payments [a]

517

948

1399

2073

2551

Cash Interest [a]

582

662

693

690

658

Cash Flows available for capital [b]

1099

1610

2092

2763

3209

Discount Rate [c]

14.6

14.6

14.6

14.6

14.6

Cumulative discount factor [d]

0.87

0.76

0.66

0.58

0.51

13553

13553

13553

8008

9279

11030

Less: Assumed Debt

21561

22832

24583

Net Value

16357

17628

19379

71

77

85

Cash Flows

Present Value
Valuation
Growth in cash flows after 1998
Present value of cash flows, 1989-98
Present Value of terminal value [e]

Net Value per share [f]

a=case exhibit 5
b=cash flows available for capital equal cash flows available for capital payments plus cash interest
c=discount rate is computed using the CAPM, with an unlevered asset beta of 0.70, a risk-free rate of 9% and a risk premium
d=the cumulative discount factor for each year is the present value of $1 received at the end of the year
e=calculated as the present value in 1988 of a growing perpetuity of the 1998 cash flow available to capital
f=assumes 229 million shares outstanding

n the cash flows

1994

1995

1996

1997

1998

2869

3253

3617

4075

4589

594

458

410

259

-21

3463

3711

4027

4334

4568

14.6

14.6

14.6

14.6

14.6

0.44

0.39

0.34

0.29

0.26

e of 9% and a risk premium of 8%

Cost of capital under the pre-bid plan using tax-adjusted discount rates (millions of dollars)
Assumptions
Unlevered asset beta = 0.70
Assumed debt beta = 0
Risk free rate = 9%
after tax expected return [a]=5.9%
risk premium = 8%
Beginning of year book values
Assumed debt
Market Value of equity [b]
value of rjr nabisco
Equity beta [c] 0.98
cost of equity [d] (in %)
WACC [in %]

1989
5204
12790
17994

1990
4894
14949
19843

1991
4519
17405
21924

1992
3798
20199
23997

1993
3982
23361
26343

1994
2582
26939
29521

0.98
16.9
13.7

0.94
16.5
13.8

0.89
16.1
14

0.84
15.7
14.1

0.8
15.4
14.3

0.77
15.2
14.3

a=cost of debt is assumed to be the risk free rate because the beta of the debt is assumed to be zero. The tax rate is 34%
b= the market value of equity is assumed to grow at the cost of equity
c= the levered equity beta (beta-e)=E/V[beta-a], where E is the market value of jr nabisco and beta-a is the unlevered asset b
d=caculated using the CAPM

1995
1854
31016
32870

1996
0
35649
35649

1997
0
40853
40853

1998
0
46818
46818

0.75
15
14.4

0.7
14.6
14.6

0.7
14.6
14.6

0.7
14.6
14.6

o be zero. The tax rate is 34%

nd beta-a is the unlevered asset beta

Valuing the cash flows for capital under the pre bid plan using tax adjusted discount rates(millions of dollars except per sha
Cash Flows
1989
1990
1991
1992
1993
Cash flows available for capital payments
517
948
1399
2073
2551
After tax cash interest
384
437
457
455
434
Cash flows available for capital
901
1385
1856
2528
2985
WACC(d)
13.7%
13.8%
14.0%
14.1%
14.3%
Cumulative discount factor
0.88
0.77
0.68
0.59
0.52
Present value
792.88 1066.45 1262.08 1491.52
1552.2
As per sheet
1070
1258
1502
1552
Valuation
Growth in cash flows after 1998
0%
2%
Present value of cash flows,1989-1998
12910
12910
Present value of terminal value(f)
8273
9586

Less: Assumed debt


Net value
Net value per share(g)

Assume 229 million shares outstanding


Assume a 34% tax rate equals interest in Exhibit 5 times 66%

21183
5204
15979
69.77729

22496
5204
17292
75.51092

ions of dollars except per share data)


1994
1995
1996
2869
3253
3617
392
302
271
3261
3555
3887
14.3%
14.4%
14.6%
0.45
0.4
0.35
1467.45
1422 1360.45
1483
1412
1348
4%
12910
11395

24304
5204
19100
83.40611

1997
4075
171
4246
14.6%
0.3
1273.8
1285

1998
4589
-14
4575
14.6%
0.26
1208

Valuing the cash flows to capital under the managemnt group plan when interest tax sheilds are included in the cash flows
Cash Flows
Cash flows available for capital payments
After tax cash interest
Cash flows available for capital
WACC(d)
Cumulative discount factor
Present value
Valuation
Growth in cash flows after 1998
Present value of cash flows,1989-1998
Present value of terminal value(f)

Less: Assumed debt


Net value
Net value per share(g)

1989
12018
2792
14810
14.6%
0.87
12884.7
As per sheet 12923

1990
593
1353
1946
14.6%
0.76
1478.96
1482

1991
919
1286
2205
14.6%
0.66
1455.3
1465

1992
1282
1183
2465
14.6%
0.58
1429.7
1429

0%
23982
6427

2%
23982
7447

30408
5204
25204
110.0611

31428
5204
26224
114.5153

Assume 229 million shares outstanding


Assume a 34% tax rate equals interest in Exhibit 5 times 66%
Cash flows available for capitalequlas Cash flows available for capital payments plus cash interest

cluded in the cash flows(mn of dollrs exceot per share data)


1993
1594
1037
2631
14.6%
0.51
1341.81
1331

1994
1946
850
2796
14.6%
0.44
1230.24
1234
4%
23982
8852

32833
5204
27629
120.6507

1995
2344
624
2968
14.6%
0.39
1157.52
1143

1996
2797
351
3148
14.6%
0.34
1070.32
1058

1997
3332
0
3332
14.6%
0.29
966.28
977

1998
3666
0
3666
14.6%
0.26
953.16
938

TN-5 Capital structure for RJR Nabisco under the management group plan (millions of dollars)
1989
Bank debt
Amount = $ 15000
Interest rate = 12 %

1990

Beginning Balance
Interest
Paydown
Ending Balance

15000
1800
11708
3292

2392
395
218
3075

5204
572
310
4894

4894
538
375
4519

3000
420
0
3000

3000
420
0
3000

1373
258
0
0
1632

1632
307
0
0
1938

Assumed Debt

Amount = $5204

Interest Rate = 11%

Beginning Balance
Interest
Paydown
Ending Balance
Subordinated Debt

Amount = $3000

Interest Rate = 14%

Beginning Balance
Interest
Paydown
Ending Balance
PIK Preferred

Amount = $ 1373

Beginning Balance
PIK dividends
Cash Dividends
Paydown
Ending Balance
Convertible
Beginning Balance
PIK dividends
Cash Dividends
Paydown
Ending Balance

Amount = $ 916

Interest Rate = 18.8%

Interest Rate = 13 % (1989), 18.8% (1990 - 1998)


916
119
0
0
1035

1035
195
0
1229

1991

1992

1993

1994

1995

1996

1997

1998

3075
369
198
2877

2877
345
466
2411

2411
289
1194
1217

1217
145
1217
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

4519
497
721
3798

3798
418
816
2982

2982
328
400
2584

1854
204
1854
0

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

3000
420
0
3000

3000
420
0
3000

3000
420
0
3000

3000
420
0
3000

3000
420
0
3000

2510
351
2510
0

0
0
0
0

0
0
0
0

1938
364
0
0
2303

2303
433
0
0
2736

2736
514
0
0
3259

3250
611
0
0
3861

3861
726
0
0
4587

4857
862
0
0
5162

5162
970
0
0
2801

2801
527
0
0
0

1229
231

1460
275

1735
326

2061
387

2448
460

2909
547

3455
650

4105
772

1460

1735

2061

2448

2909

3455

4105

% (1990 - 1998)

TN-6 Cost of capital under management group plan using tax adjusted discount rates (millions of dollars)
Assumptions
Bank Debt
Subordinate Debt:
beta
0
beta
0.25
Unlevered asset Beta
0.7
after tax rate (a) 0.06
after tax rate (a) 0.07
Risk free rate
9%
risk premium
8%
Assumed debt:
preferred stock
beta
0
beta
0.25
after tax rate (a) 0.06
interest rate
0.07

1989
Beginning of year book values (b)
Assumed debt
bank debt
sunordinated debt

5204
15000
3000

preferred stock
convertible preferred

1373
916

market value of equity

2500

value of RJR Nabisco


Equity Beta (d)

27993
7.3

Cost of Equity (e)

67.50%

WACC(f)

11.70%

(a)
(b)
c

Using a 34% tax rate, after tax debt rates are calculated as 66% of the CAPM determ
Exhibit TN-5
Value at the beginning of the year. Assumes that the market value of equity begins

(d)

The equity beta with positive subordinated debt and preferred stock betas is

1990

1991

1992

1993

1994

1995

1996

1997

1998

4894
3292
3000

4519
3075
3000

3798
2877
3000

2982
2411
3000

2852
1217
3000

1854
0
3000

0
0
2510

0
0

0
0

1632
1035

1938
1229

2303
1460

2736
1735

3250
23061

3861
2448

4587
2909

5162
3455

2801
4105

4187

5461

6905

5830

10347

12369

14614

17108

19916

18039

19222

20343

21394

22457

23532

24620

25725

26822

2.7

2.2

1.8

1.5

1.3

1.1

0.9

0.9

30.40%

26.50%

23.50%

21.30%

19.50%

18.10%

17.10%

16.40%

15.80%

12.00%

12.20%

12.40%

12.50%

12.70%

12.90%

13.10%

13.30%

13.60%

s 66% of the CAPM determined rate based on the assumed beta. Preferred stock expected returns are also calculated using the CAPM

ket value of equity begins at the management groups equity investment of $2.5 billion and grows at the cosqt of equity

erred stock betas is

also calculated using the CAPM

e cosqt of equity

Valuing the cash flows to capital under the managemnt group plan when tax adjusted discount rates are included in the ca
Cash Flows
1989
Cash flows available for capital payments
12018
After tax cash interest
1843
Cash flows available for capital
13861
WACC(d)
11.7%
Cumulative discount factor
0.9
Present value
12474.9
As per sheet 12411
Valuation
Growth in cash flows after 1998
Present value of cash flows,1989-1998
Present value of terminal value(f)

Less: Assumed debt


Net value
Net value per share(g)

1990
593
893
1486
12.0%
0.8
1188.8
1187

1991
919
849
1768
12.2%
0.71
1255.28
1259

1992
1282
781
2063
12.4%
0.63
1299.69
1308

0%
23375
8175

2%
23375
9580

31550
5204
26346
115.048

32955
5204
27751
121.1834

Assume 229 million shares outstanding


Assume a 34% tax rate equals interest in Exhibit 6 times 66%
Cash flows available for capitalequlas Cash flows available for capital payments plus cash interest

1993
1594
685
2279
12.5%
0.56
1276.24
1284

rates are included in the cash flows(mn of dollrs exceot per share data)
1994
1946
561
2507
12.7%
0.5
1253.5
1253
4%
23375
11568

34943
5204
29739
129.8646

1995
2344
412
2756
12.9%
0.44
1212.64
1220

1996
2797
232
3029
13.1%
0.39
1181.31
1187

1997
3332
0
3332
13.3%
0.35
1166.2
1151

1998
3666
0
3666
13.6%
0.3
1099.8
1115

Valuing the cash flows to capital under the KKR's plan when interest tax sheilds are included in the cash flows(mn of dollrs
Cash Flows
1989
1990
Cash flows available for capital
3732
payments3521
After tax cash interest
2548
2103
Cash flows available for capital
6280
5624
WACC(d)
14.6%
14.6%
Cumulative discount factor 0.87
0.76
Present value
5463.6 4274.24
As per sheet
5480
4283
Valuation
Growth in cash flows after 1998
0%
Present value of cash flows,1989-1998 21872
Present value of terminal value(f)
7572

Less: Assumed debt


Net value
Net value per share(g)

29444
5204
24240
105.8515

1991
1414
1685
3099
14.6%
0.66
2045.34
2059

1992
1740
1522
3262
14.6%
0.58
1891.96
1891

1993
1983
1321
3304
14.6%
0.51
1685.04
1672

1994
2383
1088
3189
14.6%
0.44
1403.16
1532

2%
21872
8774

4%
21872
10429

30646
5204
25442
111.1004

32301
5204
27097
118.3275

1995
2832
806
3319
14.6%
0.39
1294.41
1401

Discount rate is computed using the CAPM model with an unlevered asset beta of 0.7 a risk free rate of 9% and risk premium
Assume 229 million shares outstanding
Assume a 34% tax rate equals interest in Exhibit 5 times 66%
Cash flows available for capitalequlas Cash flows available for capital payments plus cash interest

ed in the cash flows(mn of dollrs exceot per share data)


1996
3330
487
3351
14.6%
0.34
1139.34
1283

1997
3956
21
3977
14.6%
0.29
1153.33
1166

1998
4319
0
4319
14.6%
0.26
1122.94
1106

free rate of 9% and risk premium of 8%

TN-9 capital structure for RJR Nabisco under KKR's Operating Plan (millions of dollars)
Bank debt

Amount = $ 12380

Amount = $5204

Amount = $3500

Beginning Balance
Interest
Paydown
Ending Balance
PIK Preferred

Amount = $ 1373

Beginning Balance
PIK dividends
Cash Dividends
Paydown
Ending Balance
Convertible
Beginning Balance
PIK dividends
Cash Dividends
Paydown
Ending Balance

12380
1486
3422
8958

8958
1075
3146
5812

5204
572
310
4894

4894
538
375
4519

3500
490
0
3500

3500
490
0
3500

Interest Rate = 11%

Beginning Balance
Interest
Paydown
Ending Balance
Subordinated Debt

1990

Interest rate = 12 %

Beginning Balance
Interest
Paydown
Ending Balance
Assumed Debt

1989

Interest Rate = 14%

Interest Rate = 15% (1989-1990), 17.2%(1991-1992)


1373
206
0
0
1580

Amount = $ 2518

1580
237
0
0
1817

Interest Rate = 15 % (1989-1990), 18.8% (1991 - 1998)


2518
378
0
0
2896

2896
435
0
0
3331

1991

1992

1993

1994

1995

1996

1997

1998

5812
697
693
5119

5119
614
924
4195

5195
503
1583
2612

2612
313
1983
629

629
76
629
0

0
0
0
0

0
0
0
0

0
0
0
0

4519
497
721
3798

3798
418
816
2982

2982
328
400
2582

2582
284
400
2182

2182
240
2182
0

0
0
0
0

0
0
0
0

0
0
0
0

3500
490
0
3500

3500
490
0
3500

3500
490
0
3500

3500
490
0
3500

3500
490
21
3479

3479
487
3330
149

149
21
149
0

0
0
0
0

2129
366
0
0
2495

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

3958
744
0
0
4702

4702
884
0
0
5586

5586
1050
0
0
6636

6636
1248
0
0
7883

7883
1482
0
0
9365

9365
1761
0
3806
7320

7320
1376
0
4319
4377

17.2%(1991-1992)
1817
312
0
0
2129

), 18.8% (1991 - 1998)


3331
626
0
0
3958

Cost of capital under KKR's plan using the tax-adjusted discount rates [millions of dollars]
Assumptions
Unlevered beta = 0.70
Risk free rate = 9%
Risk premium =8%
Beginning of year book values [b]
Assumed debt
Bank debt
senior subordinated debt
subordinated debt
converting debt
preferred stock
market value of equity [c]
value of rjr nabisco
equity beta [d]
cost of equity [e]
wacc [f]

1989

1990

5204
12380
3500
0
1373
2518
1500
26475
11.1
98
11.5

4894
8958
3500
0
1580
2896
2970
24798
5.2
50.4
11.7

a=using a 34% tax rate, after tax debt rates are calculated as 66% of the CAPM determined rate based on the assumption bet
b= exhibit 9
c=value at the beginning of the year. Assumes that the market value of equity begins at KKR's equity investment of $2.5 billio

Beta
After tax rate [a]

Bank debt Sub-ordinated debt converting debt assumed debt preferred stock
0
0.25
0.25
0
0.25
0.06
0.07
0.07
0.06
0.07

1991

1992

1993

1994

1995

1996

4519
5812
3500
0
1817
3331
4466
23446
3.2
34.5
11.9

3798
5119
3500
0
2129
3958
6008
24512
2.5
28.7
12

2982
4195
3500
0
0
4792
10469
26848
1.5
21.3
12.6

2582
2612
3500
0
0
5586
12695
26975
1.3
19.5
12.8

2182
629
3500
0
0
6636
15167
28114
1.1
18
12.9

0
0
3479
0
0
7883
17903
29266
1
16.9
13.1

ed rate based on the assumption beta. Preferred stock expected returns are also calculated using the CAPM.

KKR's equity investment of $2.5 billion and grows at the cost of equity. Convertible debt becomes equity in 1992.

1997

1998

0
0
149
0
0
9365
20926
30441
0.9
16.2
13.4

0
0
0
0
0
7320
24324
31644
0.8
15.7
13.7

Valuing the cash flows to capital under the KKR's plan using tax adjusted discount rates (mn of dollrs exceot per share data
Cash Flows
Cash flows available for capital payments
After tax cash interest
Cash flows available for capital
WACC(d)
Cumulative discount factor
Present value
As per sheet
Valuation
Growth in cash flows after 1998
Present value of cash flows,1989-1998
Present value of terminal value(f)

Less: Assumed debt


Net value
Net value per share(g)

1989
3732
1682
5414
11.5%
0.9
4872.6
4854

1990
3521
1388
4909
11.7%
0.8
3927.2
3941

1991
1414
1112
2526
11.9%
0.72
1818.72
1813

1992
1740
1005
2745
12.0%
0.64
1756.8
1758

1993
1983
872
2855
12.6%
0.57
1627.35
1625

1994
2383
718
2915
12.8%
0.5
1457.5
1565

0%
21206
9628

2%
21206
11268

4%
21206
13583

30834
5204
25630
111.9214

32474
5204
27270
119.083

34789
5204
29585
129.1921

Discount rate is computed using the CAPM model with an unlevered asset beta of 0.7 a risk free rate of 9% and risk premium
Assume 229 million shares outstanding
Assume a 34% tax rate equals interest in Exhibit 5 times 66%
Cash flows available for capitalequlas Cash flows available for capital payments plus cash interest

ollrs exceot per share data)


1995
2832
532
3153
12.9%
0.45
1418.85
1503

1996
3330
321
3344
13.1%
0.39
1304.16
1442

e of 9% and risk premium of 8%

1997
3956
14
3970
13.4%
0.35
1389.5
1382

1998
4319
0
4319
13.7%
0.31
1338.89
1322

Summary of the values of the three different rjr nabisco plans when
interest tax shields are included in the cash flows (millions of dollars
except per share data)
Discount rate [a]
cumulative discount factor [b]

1989
14.6
0.87

1990
14.6
0.76

1991
14.6
0.66

517
582
1099
959

948
662
1610
1225

1399
693
2092
1390

12018
2792
14810
12923

593
1353
1946
1482

919
1286
2205
1465

3732
2548
6280
5480

3521
2103
5625
4283

1414
1685
3099
2059

Valuing the cash flows to capital under the pre-bid plan [interest tax
shields in cash flows]
Cash flows for available for capital payments[h] [exh.5]
Cash interest [exh.5]
Cash flows available for capital [h]
present value

Valuing the cash flows to capital under the management group plan
[interest tax shields in cash flows]
Cash flows for available for capital payments[h] [exh.5]
Cash interest [exh.5]
Cash flows available for capital [h]
present value

Valuing the cash flows to capital under KKR's plan [interest tax
shields in cash flows]
Cash flows for available for capital payments[h] [exh.5]
Cash interest [exh.5]
Cash flows available for capital [h]
present value

1992
14.6
0.58

1993
14.6
0.51

1994
14.6
0.44

1995
14.6
0.39

1996
14.6
0.34

1997
14.6
0.29

1998 Terminal Value [c]


14.6
0.26

2073
690
2763
1602

2551
658
3209
1624

2869
594
3463
1529

3253
458
3711
1429

3617
410
4027
1354

4075
259
4334
1271

4589
-21
4568
1169

31288
8008

1282
1183
2465
1429

1594
10387
2631
1331

1946
850
2796
1234

2344
624
2967
1143

2797
351
3149
1058

3332
0
3332
997

3666
0
3666
938

25109
6427

1740
1522
3262
1891

1983
1321
3304
1672

2383
1088
3471
1532

2832
806
3637
1401

3330
487
3817
1283

3956
21
3977
1166

4319
0
4319
1106

29584
7572

Total [d]

less debt [e]

equity value [f]

per share [g]

21561

5204

16357

71

30408

5204

25204

110

29444

5204

24240

106

TN-13 Summary of values of the three different RJR Nabisco plans using after tax adjusted discount rates (millions of dollar
1989
1990
1991
Valuing the cash flows to capital under the prebid plan (interest tax shield in WACC)
Cash Flows Available for
517
948
1399
Capital Payments (f)
384
437
457
After tax cash interest
Cash Flows Available for
901
1385
1856
Capital
WACC
13.70%
13.80%
13.90%
Cumulative WACC
0.88
0.77
0.68
Present Value
793
1070
1259
Valuing the cash flows to capital under the management group plan (interest tax shields in WACC)
Cash Flows Available for
Capital Payments
12018
593
919
After tax cash interest
1843
893
849
Cash Flows Available for
Capital
13861
1486
1768
WACC
11.70%
12.00%
12.20%
Cumulative WACC
0.9
0.8
0.71
Present Value
12411
1187
1259
Valuing the cash flows to capital under the KKR's plan (interest tax shields in WACC)
Cash Flows Available for
Capital Payments
3732
3521
After tax cash interest
1682
1388
Cash Flows Available for
Capital
5414
4909
WACC
11.50%
11.70%
Cumulative WACC
0.9
0.8
Present Value
4854
3941

a
b
c
d
e
f

calculated as a perpetuity of the 1998 cash flows


present

1414
1112
2526
11.90%
0.72
1813

d discount rates (millions of dollars except pe share data)


1992
1993
1994
1995

1996

1997

a
b
1998 Terminal Value
Total

2073
455

2551
434

2869
392

3253
302

3671
271

4075
171

4589
-14

2528

2985

3261

3555

3942

4246

4575

31337

14.10%
0.59
1502

14.20%
0.52
1553

14.30%
0.46
1484

14.40%
0.4
1414

14.60%
0.35
1349

14.60%
0.3
1286

14.60%
0.26
1209

8283

1282
781

1594
685

1946
561

1344
412

2797
232

3332
0

3666
0

2063
12.40%
0.63
1308

2279
12.50%
0.56
1284

2507
12.70%
0.5
1253

1756
12.90%
0.44
1220

3029
13.10%
0.39
1187

3332
13.30%
0.35
1151

3666
13.60%
0.3
1115

1740
1005

1983
872

2383
718

2832
532

3330
321

3956
14

4319
0

2745
12.00%
0.64
1758

2855
12.60%
0.57
1625

3101
12.80%
0.5
1565

3364
12.90%
0.45
1503

3651
13.10%
0.39
1442

3970
13.40%
0.35
1382

4319
13.70%
0.31
1322

21203

26882

8175

31550

31447

9628

30834

c
d
e
Less Debt Equity Value
Per Share

5204

15999

70

5204

263465

115

5204

25630

112

TN-14 Selected Operating Flows Under the three different Plans


1989

1990

1991

198
936
949

225
796
460

236
679
437

Planned Capital Expenditure


Pre-bid strategy
KKR's Strategy
Management Group's Startegy

1708
774
432

1462
556
381

1345
555
380

Net Proceeds from Asste Sales


Pre-bid strategy
KKR's Strategy
Management Group's Startegy

0
3500
12680

0
2700
0

0
0
0

2993
3121
2299

3352
3414
2584

Interest Tax Shields (interest * tax rate)


Pre-bid strategy
KKR's Strategy
Management Group's Startegy

After-tax operating cash flows (operating profits * (1 - tax rates) + depriciation)


Pre-bid strategy
2720
KKR's Strategy
3049
Management Group's Startegy
2042

NOTE: Data for prebid strategy are from Exhibit 5; for the management group strategy fro Exhibit 6 and for KKR's strategy fro
(a)
terminal values are calculated as perpetuities of the 1998 value without growth using a 14.6% discount rate
(b)
Calculated using a 14.6% discount rate

1992

1993

1994

1995

1996

1997

235
642
402

224
449
353

2
37
289

156
274
212

139
166
119

88
7
0

-7
0
0

0
0
0

930
572
389

738
586
396

735
598
402

735
618
412

735
636
422

735
658
432

735
678
442

5034
4644
3024

0
0
0

0
0
0

0
0
0

0
0

0
0
0

0
0
0

0
0
0

0
0
0

3632
3639
2891

2924
3895
3118

4228
4162
3357

4560
4453
3621

4925
4771
3910

5326
5120
4229

5761
5501
4580

39458
37678
31367

xhibit 6 and for KKR's strategy from exhibit 7


using a 14.6% discount rate

1998 1998 Terminal Value (a)

Present value(b)
970
2800
2130

6957
4367
2836

0
5110
11064

29385
29096
23134