FIN 3512 CLASSWORK ASSIGNMENT 10.16.

2019 TO BE UPLOADED AT END OF CLASS

Income Statement
($millions) Actual Actual Actual Actual Actual Projected Projected Projected Projected Projected
For the year ended December 31 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Revenue $ 1,230.0 $ 1,295.0 $ 1,379.0 $ 1,464.0 $ 1,544.0 $ 1,667.5 $ 1,784.2 $ 1,891.3 $ 1,985.9 $ 2,065.3
Growth rate n/a 5.3% 6.5% 6.2% 5.5% 8.0% 7.0% 6.0% 5.0% 4.0%
Cost of goods sold 924.0 969.0 1,031.0 1,101.0 1,157.0 1,250.6 1,338.2 1,418.5 1,489.4 1,549.0
Gross profit 306.0 326.0 348.0 363.0 387.0 416.9 446.1 472.8 496.5 516.3
Overhead expense 96.0 103.0 109.0 115.0 121.0 133.4 142.7 151.3 158.9 165.2
SG&A expenses 44.0 48.0 52.0 56.0 59.0 66.7 71.4 75.7 79.4 82.6
EBITDA 166.0 175.0 187.0 192.0 207.0 216.8 232.0 245.9 258.2 268.5
Depreciation 50.0 55.0 65.0 70.0 71.0 75.0 76.7 77.5 77.4 76.4
EBIT 116.0 120.0 122.0 122.0 136.0 141.7 155.2 168.3 180.7 192.1
Interest Expense 35.0 34.0 33.0 32.0 30.0 36.5 40.1 33.9 28.1 25.2
EBT 81.0 86.0 89.0 90.0 106.0 105.3 115.1 134.4 152.6 166.9
Taxes 20.0 22.0 24.0 25.0 27.0 26.3 28.8 33.6 38.1 41.7
Net Income $ 61.0 $ 64.0 $ 65.0 $ 65.0 $ 79.0 $ 78.9 $ 86.3 $ 100.8 $ 114.4 $ 125.2

Common Size Assumptions (in BLUE)/Common Size % (in BLACK)

Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Revenue Growth Rate n/a 5.3% 6.5% 6.2% 5.5% 8.0% 7.0% 6.0% 5.0% 4.0%
Cost of goods sold % of Revenue 75.1% 74.8% 74.8% 75.2% 74.9% 75.0% 75.0% 75.0% 75.0% 75.0%
Gross profit % of Revenue 24.9% 25.2% 25.2% 24.8% 25.1% 25.0% 25.0% 25.0% 25.0% 25.0%
Overhead expense 7.8% 8.0% 7.9% 7.9% 7.8% 8.0% 8.0% 8.0% 8.0% 8.0%
SG&A expense % of Revenue 3.6% 3.7% 3.8% 3.8% 3.8% 4.0% 4.0% 4.0% 4.0% 4.0%
Depreciation expense % Revenue 4.1% 4.2% 4.7% 4.8% 4.6% 4.5% 4.3% 4.1% 3.9% 3.7%
EBITDA MARGIN 13.5% 13.5% 13.6% 13.1% 13.4% 13.0% 13.0% 13.0% 13.0% 13.0%
EBIT MARGIN 9.4% 9.3% 8.8% 8.3% 8.8% 8.5% 8.7% 8.9% 9.1% 9.3%
Income Tax Rate 24.7% 25.6% 27.0% 27.8% 25.5% 25.0% 25.0% 25.0% 25.0% 25.0%
Net Income Margin 5.0% 4.9% 4.7% 4.4% 5.1% 4.7% 4.8% 5.3% 5.8% 6.1%
Dividend Payout % 24.6% 23.4% 23.1% 23.1% 19.0% 380.0% 20.0% 20.0% 20.0% 20.0%
Dividends $ 15.0 $ 15.0 $ 15.0 $ 15.0 $ 15.0 $ 300.0 $ - $ - $ - $ -

Page 1 Projected Income Statement

 FIN 3512 CLASSWORK ASSIGNMENT 10.16.2019 TO BE UPLOADED AT END OF CLASS
Balance Sheet Accounts
($millions) Actual Actual Actual Actual Actual Projected Projected Projected Projected Projected
As of December 31 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Cash $ 25.0 $ 25.0 $ 25.0 $ 24.0 $ 64.0 $ 20.0 $ 20.0 $ 20.0 $ 63.0 $ 169.3
Accounts receivable 113.0 120.0 131.0 133.0 141.0 150.8 161.3 171.0 179.5 186.7
Inventory 210.0 215.0 225.0 242.0 251.0 277.9 297.4 315.2 331.0 344.2
Prepaid expenses 18.0 22.0 24.0 25.0 28.0 30.0 32.1 34.0 35.7 37.2
Total Current Assets 366.0 382.0 405.0 424.0 484.0 478.7 510.8 540.3 609.3 737.4

Fixed Assets - net 325.0 345.0 360.0 375.0 364.0 345.2 326.1 310.6 295.1 283.6
Total Assets 691.0 727.0 765.0 799.0 848.0 823.9 836.9 850.8 904.3 1,021.0

Revolver borrowings - - - - - 202.5 134.4 53.7 0.0 (0.0)

Accounts payable 75.0 78.0 82.0 83.0 86.0 92.5 99.0 104.9 110.2 114.6
Accrued expenses 29.0 33.0 37.0 40.0 42.0 45.0 48.2 51.1 53.6 55.8
Total Current Liabilities 104.0 111.0 119.0 123.0 128.0 340.0 281.6 209.7 163.8 170.3

Debt Outstanding 500.0 480.0 460.0 440.0 420.0 405.0 390.0 375.0 360.0 345.0
Total Liabilities 604.0 591.0 579.0 563.0 548.0 745.0 671.6 584.7 523.8 515.3

Common Stock 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0
Retained Earnings 47.0 96.0 146.0 196.0 260.0 38.9 125.3 226.1 340.5 465.7

Total Liabilities and Equity $ 691.0 $ 727.0 $ 765.0 $ 799.0 $ 848.0 $ 823.9 $ 836.9 $ 850.8 $ 904.3 $ 1,021.0
In balance - - - - - - (0.00) 0.00 (0.00) 0.00

Assumptions (BLUE)
Revenue $ 1,230.0 $ 1,295.0 $ 1,379.0 $ 1,464.0 $ 1,544.0 $ 1,667.5 $ 1,784.2 $ 1,891.3 $ 1,985.9 $ 2,065.3
Cost of goods sold 924.0 969.0 1,031.0 1,101.0 1,157.0 1,250.6 1,338.2 1,418.5 1,489.4 1,549.0
Minimum required cash level n/a n/a n/a n/a n/a $ 20.0 $ 20.0 $ 20.0 $ 20.0 $ 20.0
Accounts receivable DSO 34 34 35 33 33 33 33 33 33 33
Inventory turnover (Cogs) 4.4 4.5 4.6 4.5 4.6 4.5 4.5 4.5 4.5 4.5
Prepaid Expenses as a % of Revenue 1.5% 1.7% 1.7% 1.7% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%
Accounts Payable Days of COGS 30 29 29 28 27 27 27 27 27 27
Accrued Expenses % of Revenue 2.4% 2.5% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7%

CAPX Statistics Assumptions (BLUE)

Capital Expenditures $ 55.0 $ 75.0 $ 80.0 $ 85.0 $ 60.0 $ 56.3 $ 57.5 $ 62.0 $ 62.0 $ 65.0
Depreciation 50.0 55.0 65.0 70.0 71.0 75.0 76.7 77.5 77.4 76.4
Capx / Depreciation & Amortization 110% 136% 123% 121% 85% 75% 75% 80% 80% 85%

Page 2 Projected Balance Sheet

 FIN 3512 CLASSWORK ASSIGNMENT 10.16.2019 TO BE UPLOADED AT END OF CLASS
Statement of Cash Flow
($millions) Actual Actual Actual Actual Projected Projected Projected Projected Projected
For the year ended December 31 2015 2016 2017 2018 2019 2020 2021 2022 2023

Operating activity
Net Income $ 64.0 $ 65.0 $ 65.0 $ 79.0 $ 78.9 $ 86.3 $ 100.8 $ 114.4 $ 125.2
Plus/(Less):
Depreciation 55.0 65.0 70.0 71.0 75.0 76.7 77.5 77.4 76.4
Change in accounts receivable (7.0) (11.0) (2.0) (8.0) (9.8) (10.6) (9.7) (8.5) (7.2)
Change in inventory (5.0) (10.0) (17.0) (9.0) (26.9) (19.5) (17.8) (15.8) (13.2)
Change in prepaids (4.0) (2.0) (1.0) (3.0) (2.0) (2.1) (1.9) (1.7) (1.4)
Change in accounts payable 3.0 4.0 1.0 3.0 6.5 6.5 5.9 5.2 4.4
Change in accrued expenses 4.0 4.0 3.0 2.0 3.0 3.2 2.9 2.6 2.1
Cash from operating activity 110.0 115.0 119.0 135.0 124.8 140.6 157.8 173.7 186.3

Investment activity
Capital expenditures (75.0) (80.0) (85.0) (60.0) (56.3) (57.5) (62.0) (62.0) (65.0)
Net cash from investment activity (75.0) (80.0) (85.0) (60.0) (56.3) (57.5) (62.0) (62.0) (65.0)

Financing activity
Repayment of debt (20.0) (20.0) (20.0) (20.0) (15.0) (15.0) (15.0) (15.0) (15.0)
New borrowings - - - - - - - - -
Dividends (15.0) (15.0) (15.0) (15.0) (300.0) - - - -
Net cash from financing activity (35.0) (35.0) (35.0) (35.0) (315.0) (15.0) (15.0) (15.0) (15.0)

Net increase/(decrease) in cash - - (1.0) 40.0### (246.5) 68.0 80.7 96.7 106.3
Cash beginning of year 25.0 25.0 25.0 24.0 64.0 20.0 20.0 20.0 63.0
Total 25.0 25.0 24.0 64.0 (182.5) 88.0 100.7 116.7 169.3
Minimum required operating cash n/a n/a n/a n/a 20.0 20.0 20.0 20.0 20.0
Cash Surplus/(Deficit) n/a n/a n/a n/a (202.5) 68.0 80.7 96.7 149.3
Revolver borrowings n/a n/a n/a n/a 202.5 - - - -
Revolver repayment n/a n/a n/a n/a - (68.0) (80.7) (53.7) 0.0

Cash end of year $ 25.0 $ 25.0 $ 24.0 $ 64.0 20.0 20.0 20.0 63.0 169.3

Projected Cash Flow Statement

Page 3
 FIN 3512 CLASSWORK ASSIGNMENT 10.16.2019 TO BE UPLOADED AT END OF CLASS
Debt Schedule
($millions) Actual Projected Projected Projected Projected Projected
For the year ended December 31 2018 2019 2020 2021 2022 2023

Debt outstanding
Beginning $ 420.0 $ 405.0 $ 390.0 $ 375.0 $ 360.0
Less: Repayments 15.0 15.0 15.0 15.0 15.0
Add: New borrowings - - - - -
Ending 420.0 405.0 390.0 375.0 360.0 345.0

Interest Rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Interest Expense n/a $ 29.4 $ 28.4 $ 27.3 $ 26.3 $ 25.2

Revolver debt outstanding

Beginning $ - $ 202.5 $ 134.4 $ 53.7 $ (0.0)
Add: new borrowings 202.5 - - - -
Less: repayments - 68.0 80.7 53.7 0.0
Ending - 202.5 134.4 53.7 0.0 (0.0)

Average outstanding balance $ 101.2 $ 168.5 $ 94.1 $ 26.9 $ (0.0)

Interest Rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Interest Expense n/a $ 7.1 $ 11.8 $ 6.6 $ 1.9 $ (0.0)

Total Interest Expense n/a $ 36.5 $ 40.1 $ 33.9 $ 28.1 $ 25.2

DEBT COVENANTS
EBITDA - Capx $ 160.5 $ 174.4 $ 183.8 $ 196.2 $ 203.5
EBITDA 216.8 232.0 245.9 258.2 268.5

EBITDA-Capx/Interest 4.4 4.3 5.4 7.0 8.1

Minimum Covenant 4.0 4.0 5.0 6.0 7.0
Pass = P and Fail = F P P P P P

Total Debt/EBITDA 2.80 2.26 1.74 1.39 1.28

Maximum Covenant 3.25 2.75 2.25 1.75 1.50

Page 4 Projected Debt Schedule

 Pass = P and Fail = F P P P P P

Page 5 Projected Debt Schedule

 FIN 3512 CLASSWORK ASSIGNMENT 10.16.2019 TO BE UPLOADED AT END OF CLASS
RE and Fixed Assets Schedule
($millions) Actual Projected Projected Projected Projected Projected
For the year ended December 31 2018 2019 2020 2021 2022 2023

Retained Earnings
Beginning $ 260.0 $ 38.9 $ 125.3 $ 226.1 $ 340.5
Add/(less): Net income/loss 78.9 86.3 100.8 114.4 125.2
Less: dividends 300.0 - - - -
Ending $ 260.0 $ 38.9 $ 125.3 $ 226.1 $ 340.5 $ 465.7

Fixed Assets
Beginning $ 364.0 $ 345.2 $ 326.1 $ 310.6 $ 295.1
Add: Capx 56.3 57.5 62.0 62.0 65.0
Less: Depreciation 75.0 76.7 77.5 77.4 76.4
Ending $ 364.0 $ 345.2 $ 326.1 $ 310.6 $ 295.1 $ 283.6

Page 6 Projected RE and Fixed Assets Schedule