Intrinsic Value Worksheet

Variable

Growth and Discount Assumptions

First Stage Growth 0.1 g1

First Stage Discount Rate 0.12 d1

Second Stage Growth 0.05 g2

Second Stage Discount Rate 0.15 d2

Earnings, Shares Outstandings, EPS

Beginning Earnings (M) 102.5 E

Number of Shares (M) 48.5 s

Beginning Earnings per Share (EPS) 2.11

Calculation

Discounted Ten Year Earnings Stream

year 1 100.67 (E*(1+g1)^1)/(1+d1)^1

year 2 98.87 (E*(1+g1)^2)/(1+d1)^2

year 3 97.11 (E*(1+g1)^3)/(1+d1)^3

year 4 95.37 (E*(1+g1)^4)/(1+d1)^4

year 5 93.67 (E*(1+g1)^5)/(1+d1)^5

year 6 92 (E*(1+g1)^6/(1+d1)^6

year 7 90.35 (E*(1+g1)^7)/(1+d1)^7

year 8 88.74 (E*(1+g1)^8)/(1+d1)^8

year 9 87.16 (E*(1+g1)^9)/(1+d1)^9

year 10 85.6 (E*(1+g1)^10)/(1+d1)^10

Total Discounted Return, First Ten Years 929.54 Sum Years 1-10

Continuing Value beyond Ten Years 941.59 [E*(1+g1)^(n+1)]/(d2-g2)

(n is the number of years in the first stage) (1+d1)^n

Total Future Returns, discounted 1871.13 Ten Year + Continuing

Long Term Debt Adjustment 0 From Statements

Net Future Returns Value 1871.13 Subtract Long Term Debt

Per Share Intrinsic Value 38.58 Net Future Value/# Shares