Leverage Ratio Solution Strictly Confidential

Table of Contents
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Leverage Ratios Solution Year 1 Year 2 Year 3

Balance Sheet
GBP millions
Assets
Current assets:
Cash 1,325 1,042 1,788
Short term investments - - 360
Accounts receivable 892 1,079 1,311
Inventories 1,464 1,931 2,430
Prepaid expenses - - -
Other current assets 70 116 103
Total current assets 3,751 4,168 5,992

Non-current assets
Investments 1,225 1,178 1,421
Property, plant and equipment 15,882 16,976 19,787
Goodwill and intangible assets 1,525 2,045 2,336
Other non-current assets 180 440 628
Total assets 22,563 24,807 30,164

Liabilities and shareholders' equity

Current liabilities:
Accounts payable 5,083 6,046 7,359
Accrued liabilities - - -
Deferred revenues - - -
Debt 1,646 1,554 2,084
Other short term liabilities 789 552 902
Total current liabilities: 7,518 8,152 10,345

Non-current liabilities:
Long-term debt 3,742 4,146 5,972
Minority interest 64 65 87
Other long term liabilities 1,859 1,938 1,974
Total non-current liabilities: 5,665 6,149 8,033

Shareholder's equity:
Common stock in issuance 395 397 393
Other movements 3,988 4,376 4,511
Retained earnings 4,997 5,733 6,882
Total shareholders' equity 9,380 10,506 11,786
Total liabilities and shareholders' equity 22,563 24,807 30,164

Ratio Analysis
Leverage Ratios

Debt to Equity = Interest Bearing Debt = 0.57 0.54 0.68

Equity

Debt to TNW = Interest Bearning Debt = 0.69 0.67 0.85

Tangible Net Worth

Total Liabilities to Equity = Total Liabilities = 1.41 1.36 1.56

Equity

Total Assets to Equity = Total Assets = 2.41 2.36 2.56

Equity
Year 4 Year 5

3,509 2,819
1,233 1,314
1,820 1,888
2,669 2,729
- -
3,850 2,642
13,081 11,392

1,860 2,746
23,152 24,203
4,076 4,177
3,395 3,505
45,564 46,023

8,665 9,442
- -
4,538 4,357
3,471 1,529
921 687
17,595 16,015

12,391 11,744
57 85
2,672 3,583
15,120 15,412

395 399
4,638 4,801
7,816 9,396
12,849 14,596
45,564 46,023
1.23 0.91

1.81 1.27

2.55 2.15

3.55 3.15