#1STRICTLY PRIVATE AND CONFIDENTIAL PROJECT PLATO Valuation discussion materials JPMorgan MARCH 8, 2006#2PROJECT PLATO This presentation was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed and delivered (including such client's subsidiaries, the "Company") in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by JPMorgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan. 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JPMorgan PROJECT PLATO#3PROJECT PLATO Agenda JPMorgan Introduction Public market overview Valuation summary Appendix Page 1 3 7 16 PROJECT PLATO 1#4INTRODUCTION Introduction Over the past two weeks we received the financial information necessary to complete our valuation analysis We used the management Upside Case as a basis for our valuation analysis The Upside Case includes certain projects that we believe will occur with a high degree of probability In addition, have calculated two sensitivity cases Adjusted Upside Case 10% upside in 2006 on Atlantis, Paradise Island over management's Upside Case EBITDA projections Franchise value JPMorgan Additional upside from franchise value of Atlantis brand Development of two additional large scale resorts PROJECT PLATO 2#5PROJECT PLATO Agenda JPMorgan Introduction Public market overview Valuation summary Appendix Page 1 3 7 16 PROJECT PLATO 3#6PUBLIC MARKET OVERVIEW Public market overview Trading summary ($ millions, except per share data) Closing share price (3/06/06) 52-week intraday high (12/19/05) % of 52-week high 52-week intraday low (10/12/05) % over 52-week low Diluted shares (mm) Equity value Plus: Debt (as of 6/30/06)¹ Less: Cash (as of 6/30/06) Firm value Based on closing share price Last 3 months 0.0% 0.0% 4.6% 94.8% 0.6% $68.73 $70.28 6.6% 97.8% $52.49 30.9% $2,647 697 38.5 Last 6 months 30.0% Trading summary Firm value/EBITDA (35) $3,309 Long-term growth < $50 $55 - $60 $60-$65 $65 - $70 $70+ 1 Does not include non-recourse Palmilla and Reethi Rah debt of $164 million 2 1/B/E/S median estimates as of 3/06/06 JPMorgan 2006E 2007E 2008E Price/Earnings 2006E 2007E 2008E 16.2% 47.0% < $50 $55 - $60 $60-$65 $65 - $70 0.3% $70+ Street Metric² Multiple $229 293 NM $2.80 3.37 NM 5.1% 14.4x 11.3 Last 12 months 41.9% NM 24.5x 20.4 20.0% NM Upside Case Metric $214 251 330 $2.78 2.73 4.13 27.3% 25.5% < $50 $55 - $60 $60 - $65 $65 - $70 Multiple 15.5x 13.2 10.0 24.7x 25.2 16.7 0.1% $70+ PROJECT PLATO 4#7PUBLIC MARKET OVERVIEW K-2 analyst commentary and stock price Wall Street estimates Revision date 2/22/2006 2/20/2006 2/15/2006 2/13/2006 12/7/2005 High Low Mean Median Source: Equity research Analyst (firm) Joseph Greff (Bear Stearns) Lawrence Klatzkin (Jefferies & Co) Steven Kent (Goldman Sachs) William Schmitt (CIBC) Marc Falcone (Deutsche Bank) Recommendation Source: Tradeline Buy Buy Hold Hold Buy JPMorgan EPS estimate 2006E $2.11 2.61 2.82 2.80 3.40 $3.40 $2.11 $2.75 $2.80 2007E $3.21 2.63 3.52 3.90 ΝΑ $3.90 $2.63 $3.32 $3.37 12-month target price $75.00 81.00 ΝΑ 71.00 79.00 Analyst commentary "Strong results were driven mainly by record performance at the company's Paradise Island properties, posting $29.8 million EBITDA, a 19% increase year over year" - Jefferies (2/14/06) $81.00 $71.00 $76.50 $77.00 "K-2's flagship property Atlantis continues to generate strong non-room revenue growth (F&B revenues up 23% and casino revenues up 22%) since it opened the Marina Village in July 2005. This growth should accelerate into Paradise Island seasonally stronger periods, namely 1Q and 2Q" - Bear Stearns (2/13/06) "Our sense is that the scope and financial impact of K-2's Phase III waterpark expansion is significantly underappreciated. A tour of Paradise Island showcased developable land after Phase III; we believe this also is underappreciated" - Deutsche Bank (12/7/05) PROJECT PLATO 5#8PUBLIC MARKET OVERVIEW Analysis at various prices $ millions, except per share data Share price % premium Diluted shares (mm) Equity value Plus: Debt (as of 6/30/06)¹ Less: Cash (as of 6/30/06) Firm value FV/2006E EBITDA FV/2007E EBITDA FV/2008E EBITDA P/2006E EPS P/2007E EPS P/2008E EPS Upside Case 1 Does not include non-recourse Palmilla and Reethi Rah debt of $164 million JPMorgan $214 251 330 $2.78 2.73 4.13 Current price (3/06/06) $68.73 0.0% 38.5 $2,647 697 (35) $3,309 15.5× 13.2 10.0 24.7x 25.2 16.7 $75.00 9.1% 38.9 $2,918 697 (35) $3,580 16.7x 14.3 10.8 26.9x 27.4 18.2 $80.00 16.4% 39.2 $3,135 697 (35) $3,797 17.7x 15.1 11.5 28.7x 29.3 19.4 $85.00 23.7% 39.4 $3,351 697 (35) $4,013 18.7x 16.0 12.2 30.5× 31.1 20.6 PROJECT PLATO 6#9PROJECT PLATO Agenda JPMorgan Introduction Public market overview Valuation summary Appendix Page 1 3 7 16 PROJECT PLATO 7#10VALUATION SUMMARY Key assumptions K-2 Base Case ■ Atlantis, Phase III ■ Opens in 2007 ■ Total capital expenditures of $730mm ■ Atlantis, Pl (incl. Phase III) performance from 2006 to 2007 (when Phase III opens) ■ Average room rate grows 6.2% to $298.76 ■ Occupancy rate drops 1.8% to 80.3% ■ F&B per occupied room grows approx. 5% to $270.90 ■Win/table/day grows 12.7% to $3,172 ■Win/slot/day grows 14.6% to $238 ■ Atlantis, the Palm, Dubai ■Opens in 2009 ■ Total development/construction costs of $1.5bn ■Year 1 key assumptions Average room rate of $313 Occupancy of 78% 5,000 daily waterpark visitors 1,863 daily entertainment village visitors ■ Morocco ■ Opens in 2008 ■ Total development/construction costs of $300mm ■Year 1 key assumptions Average room rate of $140 Occupancy of 60% Win/table/day of $1,967 Win/slot/day of $131 JPMorgan K-2 Upside Case ■ K-2 Base Case plus the following: ■ Condotel development cost of $400 million; 50/50 JV with Turnberry ■ $45mm development of golf course on Athol Island completed in 2007 Development of Harborside - Phase II Two villa expansion of Palmilla ■ Marginally more aggressive assumptions on casino revenues in Morocco Adjusted Upside Case K-2 Upside Case plus the following: ■ 10% upside on Atlantis, Pl over management's Upside Case EBITDA projections in 2006 Based on analysis of K-2 management budgets vs. actual property results in 2003, 2004 and 2005 Over the past three years, K-2 has outperformed its 1-year forward budget by 12.4% K-2 Upside Case EBITDA growth in 2007 and thereafter ■ Cost synergy assumption of $5mm in LBO analysis Franchise value Additional upside from franchise value of Atlantis brand ■ Development of two additional resort projects over the next 10 years Paradise Island land value ■ 64.1 acres of undeveloped land ■ Cost basis of approximately $1.4mm/acre ■ Valued at $6mm/acre with a 5% annual appreciation PROJECT PLATO 8#11VALUATION SUMMARY Projection cases $ millions, except per share data Base Case EBITDA % growth EPS % growth Upside Case EBITDA % growth EPS % growth Adjusted Upside Case EBITDA % growth EPS % growth I/B/E/S median¹ EBITDA % growth EPS % growth 1 As of 3/06/06 JPMorgan 2006E $214 $2.78 2006E $214 $2.78 2006E $232 $3.26 2006E $229 $2.80 2007E $254 18.5% $2.79 0.2% 2007E $251 17.3% $2.73 (1.8%) 2007E $267 14.8% $3.13 (3.9%) 2007E $293 27.9% $3.37 20.4% 2008E $305 20.4% $3.52 26.3% 2008E $330 31.4% $4.13 51.0% 2008E $349 30.7% $4.59 46.7% 2008E 2009E $345 13.0% $4.52 28.5% 2009E $381 15.3% $5.47 32.5% 2009E $400 14.8% $5.96 29.7% 2009E 2010E $366 6.0% $5.20 14.9% 2010E $404 6.1% $6.21 13.5% 2010E $424 6.0% $6.71 12.6% 2010E PROJECT PLATO 9#12VALUATION SUMMARY Valuation summary Equity value per share Key: Publicly-traded comparables 20.0x-23.0x 2008E EPS¹ Precedent transactions 12.0x-14.0x 2008E EBITDA¹.² 18.9x-22.6x implied 2008E EPS¹ Discounted cash flow analysis 9.5-10.5% WACC 3.0-3.5 % perpetuity growth rate Sum of the parts LBO analysis (67% leverage) 18-22% return threshold 11.5-13.5x exit FV/EBITDA LBO analysis (62% leverage, K-2) 18-22% return threshold 11.5-13.5x exit FV/EBITDA JPMorgan Upside Case Adjusted Upside Case $40 Current price: $68.73 $65.00 $72.50 $66.50 $70.50 1 $70.00 1 $77.50 I $68.00 I $73.50 1 $72.00 $77.50 1 $75.00 $83.50 $83.50 $79.50 $82.00 $84.50 $84.50 $93.00 $93.00 $100.00 $80.50 $98.00 $88.50 $90.50 $99.50 Additional franchise value³ $20 $60 $80 $100 Note: Valuation based on the Upside Case projections provided by management, sensitized for valuation assumptions ¹ Implied equity value discounted to 2006 using an estimated equity cost of capital of 12.5% z Assumes full consolidation of Palmilla & Reethi Rah EBITDA and debt 3 Represents the expected incremental value attributable to two additional large development projects over 10 years $99.50 $106.50 $104.00 $120 $140 PROJECT PLATO 10#13VALUATION SUMMARY Leveraged buyout analysis Assumptions ■ Five year hold period ■ $5 million of annual cost synergies ■ Sponsor IRR threshold range of 18.0%-22.0% ■Management promote of 10% of terminal equity value in excess of initial equity contribution in the Upside Case; Promote level rises to 15% in the Adjusted Upside Case 7.5% cost of LBO debt Summary results Upside Case, 62% leverage (K-2) Equity value per share IRR: 18.0% 20.0% 22.0% Exit FVIEBITDA multiple 11.5× JPMorgan $74.15 70.59 68.22 12.5× $77.28 74.86 72.24 13.5x $80.42 77.56 74.71 IRR: Upside Case, 67% leverage Equity value per share 18.0% 20.0% 22.0% $75.72 ■ Exit FV/EBITDA range of 11.5-13.5x on 2011E EBITDA $100 million of transaction fees, including bond breakage costs¹ Exit FVIEBITDA multiple 11.5× 72.39 ■ $76mm Reethi Rah notes receivable monetized in 2008 ☐ 64.1 acres of undeveloped land valued at $6 million per acre with 5% annual value appreciation 70.19 12.5× $78.86 76.61 74.15 13.5x $82.00 79.32 76.64 Adjusted Upside Case, 67% leverage Equity value per share IRR: 18.0% 20.0% 22.0% ¹ Comprised of approximately $37 million of bond breakage costs, $25 million of advisory and legal fees, and $38 million of financing fees Exit FVIEBITDA multiple 11.5x $78.01 74.49 72.13 12.5× $81.15 78.70 76.08 13.5x $84.30 81.43 78.58 PROJECT PLATO 11#14VALUATION SUMMARY Discounted cash flow analysis Assumptions Ten year projection period ■3% revenue growth assumed each year after 2010 until 2015 ■ EBITDA margin improvement of 0.25% assumed in each year after 2010 until 2015 No synergies $76mm Reethi Rah notes receivable monetized in 2008 Summary results Equity value per share - Upside Case WACC: JPMorgan 9.50% 10.00% 10.50% Terminal growth rate 3.25% 3.00% $88.97 82.81 77.43 $90.86 84.37 78.74 3.50% $92.91 86.05 80.13 Estimate of developable Paradise Island land value added to enterprise value to derive implied equity value 64.1 acres of undeveloped land valued at $6 million per acre with 5% annual value appreciation Perpetuity growth rate of 3.0% -3.5% on terminal year free cash flow ■WACC of 9.5-10.5% Equity value per share - Adjusted Upside Case WACC: 9.50% 10.00% 10.50% Terminal growth rate 3.25% 3.00% $95.69 89.05 83.27 $97.74 90.74 84.68 3.50% $99.96 92.56 86.19 PROJECT PLATO 12#15Sum-of-the-parts analysis VALUATION SUMMARY $ per share Contribution to equity value per share Equity value per share $52.12 JPMorgan Existing operations The Palm mgmt. fees +$6.26 The Palm + $0.85 Phase III +$7.03 Condo Tel +$5.95 Morocco +$2.57 BLB +$0.98 Development projects Note: Detailed analysis can be located in the appendix; represents the midpoint of the assumed valuation range OC Condos + $0.85 Land +$6.56 Equity value per share $83.18 Upside Case Equity value per share $87.70 Adjusted Upside Case PROJECT PLATO 13#16VALUATION SUMMARY Franchise opportunities Brand Design Development expertise JPMorgan Growth opportunities Ability to develop and operate more Atlantis properties worldwide PROJECT PLATO 14#17VALUATION SUMMARY Key business risks Hurricane New supply Atlantis Phase III JPMorgan Construction costs Political Terrorism ■ A material disruption in operations on Paradise Island would have a severe negative impact on K-2's operating performance Impact of proposed Baha Mar development on Cable Beach may be significant ■ Demand for Atlantis, the Palm in light of plans for an additional 30 hotels on the Palm ■ Impact of proposed new supply in Massachusetts may be significant on Lincoln Park Uncertainty around feasibility of projected casino and F&B revenue per occupied room Uncertainty around success of dolphin attraction ■ Uncertainty around demand for condotel units at projected prices ■ Condotel financing gets renegotiated in light of degradation of credit from LBO Risks associated with escalating building materials and labor costs Vast majority of development budget in Dubai is not at fixed cost ■ Potential cost overruns at Lincoln Park and in Morocco Future cooperation of Dubai government and other foreign jurisdictions where development is expected Terrorist event in the U.S. could significantly impact leisure travel ■ Large destination resorts could be targets for terrorist organizations PROJECT PLATO 15#18PROJECT PLATO Agenda JPMorgan Introduction Public market overview Valuation summary Appendix Page 1 3 7 16 PROJECT PLATO 16#19APPENDIX Selected public market comparables Market information Company Las Vegas Sands Corp Starwood Hotels & Resorts' Harrah's Entertainment MGM Mirage Hilton Hotels Wynn Resorts Ltd7 Gaylord Entertainment Orient Express Hotels Average Median Gaming - median 3/6/2006 share price $56.63 63.50 JPMorgan 71.64 39.51 23.59 72.24 44.92 35.30 % of 52-week high 99.8% 97.0% 89.9% 84.5% 90.6% 94.5% 91.7% 96.9% Equity Market value¹ $20,056.1 15,440.5 13,165.9 11,247.0 9,863.1 7,189.5 1,882.8 1,406.9 $10,031.5 $10,555.0 $12,206.4 Total market cap² $21,649.7 18,620.5 23,762.3 23,518.3 18,056.1 9,288.3 2,464.5 1,965.2 $14,915.6 $18,338.3 $22,584.0 2006E NM $10,260.3 29.1 19.6 21.2 22.7 NM NM 26.3 23.8x 22.7x 20.4x Price/EPS³ 26.3x 2007E NM 23.7 17.0 17.5 18.3 NM NM 20.3 19.4x 18.3x 17.2x Aggregate value / EBITDA¹ 2006E 2007E NM NM 13.9 12.1 9.2 8.5 9.7 9.0 11.9 10.6 NM 10.9 11.2 Lodging - median $5,873.0 ¹ Includes common shares, common share equivalents (excluding options) 2 Equals the sum of equity market value, minority interests, debt outstanding and preferred stock at liquidation preference 3 Estimates for EPS are from equity research 4 Aggregate value is total market capitalization less cash and cash equivalents. EBITDA estimates from analyst reports 5 Starwood Hotels pro forma for announced transaction with Host Marriott * Hilton Hotels pro forma for announced acquisition of Hilton plc assets 7Wynn Resorts pro forma for $900 million sale of Macau casino rights * Total debt as of 9/30/05 for Gaylord Entertainment excludes $613 million associated with the Company's secured forward exchange contract 20.3x NM 14.9 14.0 12.3x 12.9x 9.4x 13.9x 10.4x 10.7x 8.8x 11.1x PROJECT PLATO 17#20APPENDIX Selected public market comparables (cont'd) Credit information Company Las Vegas Sands Corp Starwood Hotels & Resorts Harrah's Entertainment MGM Mirage Hilton Hotels Wynn Resorts Ltd Gaylord Entertainment Orient Express Hotels Average Median 3/6/2006 Equity share price market value¹ $56.63 $20,056.1 63.50 15,440.5 71.64 13,165.9 39.51 11,247.0 23.59 9,863.1 72.24 7,189.5 44.92 1,882.8 35.30 1,406.9 JPMorgan Debt-to- Total total market market cap² capitalization $21,649.7 7.4% 18,620.5 17.1% 23,762.3 44.5% 23,518.3 52.2% 18,056.1 45.4% 9,288.3 22.6% 2,464.5 23.6% 1,965.2 28.2% 30.1% 25.9% Debt+prfd/ total market capitalization 7.4% 17.1% 44.5% 52.2% 45.4% 22.6% 23.6% 28.2% 30.1% 25.9% Debt-to- total book capitalization³ 51.6% 36.8% 45.6% 52.8% 75.1% 57.2% 40.3% 44.8% 50.5% 48.6% Debt/ LTM EBITDA 3.8x 2.4 3.8 4.3 9.0 NA 5.5 5.2 4.9x 4.3x Senior debt ratings LTM EBITDA/ interest Moody's/S&P 3.7x B2/BB- 5.4 Baa3/BBB- 4.0 Ba2/BB 2.7 NR/NR 3.5 NA B2/B+ B3/B Ba1/BB+ Baa3/BBB- 1.5 3.9 3.5x 3.7x ¹ Includes common shares, common share equivalents (excluding options) z Equals the sum of equity market value, minority interests, debt outstanding and preferred stock at liquidation preference. Does not include restricted cash > Book capitalization equals the sum of debt outstanding, preferred stock at liquidation preference, minority interests and shareholders' equity PROJECT PLATO 18#21APPENDIX Comparable precedent transactions Private and public - target transactions Date announced 1/30/2006 6/14/2005 10/24/2004 7/15/2004 6/4/2004 2/12/2004 Observations Acquirer Target Colony Capital & Kingdom Hotels/ Fairmont Hotels & Resorts Blackstone/Wyndham JPMorgan Blackstone/Boca Resorts Harrah's Entertainment/ Caesars Entertainment MGM Mirage/Mandalay Resort Group CNL Hospitality/KSL Recreation Corporation Lodging - median Gaming -median Description of target Fairmont is a leading owner/operator of luxury hotels and resorts. Fairmont's managed portfolio consists of 87 luxury and first-class properties Wyndham Intemational offers upscale and luxury hotel and resort accommodations in the U.S., Canada, Mexico, the Caribbean, and Europe Boca Resorts owns 5 luxury resorts and 4 golf clubs located in South Florida Caesars Entertainment owns 22 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Mandalay Resort Group owns and operates 11 properties in Nevada as well as casino's in Mississippi, Illinois and Michigan KSL's portfolio consists of leading resorts in Hawaii, Arizona and other vacation destinations Size Forward EBITDA (mm) multiple 15.8x 3,900 3,240 1,184 9,440 7,750 2,160 ■ K-2 is a blend of lodging and gaming ■ K-2 is not expected to offer the same level of synergy opportunities as a strategic buyer ■K-2 EBITDA is generally tax-exempt 12.6x 11.8x 8.5x 9.5x 13.1x 12.9x 9.0x PROJECT PLATO 19#22APPENDIX Discounted cash flow analysis - Upside Case Projections ($ millions, except per share data) 2006E $102 0 (6) (36) Adjusted cash EBITDA, Less: Mohegan adjustment Less: recurring equity earnings Less: Depreciation EBIT Less: Tax expense Net income Plus: Depreciation Less: Capex Plus: Capitalized interest adj. Plus: Cape Town notes monetization Plus: Kanahura notes monetization Plus: Reethi Rah notes monetization Less: Dev. Proj. Investments Less: Project advances Less: Lux (repayments) / issuances Plus: CF from AC land sale Less: Increases in NWC Plus: Equity earnings terminal valuation Plus: Palmilla dividend Plus: Dividend income Unle vered free cash flow Valuation Equity value per share WACC: $60 (3) $58 36 (263) 26 0 0 0 (97) 0 3.00% $88.97 82.81 77.43 (1) 0 7 0 0 14 ($220) 2007 E $290 0 (10) (90) $190 5 $194 90 (192) 32 0 0 0 (28) (20) (12) 0 1 0 0 47 $113 2008E $347 0 (17) (98) WACC: $231 (9) $222 98 (75) 18 0 pogon - 2-000 0 76 0 5 1 (0) 1 8 65 $418 2009E $378 0 (22) (99) $257 (9) $248 99 (80) 0 10 2 0 0 10 2 40 (2) 0 9 20 $357 2006E FV/EBITDA multiple 2010E $404 0 (27) (100) $277 (9) $268 100 (85) 0 ܘ ܘ ܘ ܘ ܘ ܚ ܘ ܝ ܘ ܚ 10 13 $309 2011E $416 0 (28) (99) $289 (10) $279 99 (88) 0 0 0 0 0 0 0 0 0 0 13 4 $307 2012E $428 0 (29) (99) $301 (10) $291 99 (90) 0 0 0 ooooooom 13 4 $316 Terminal growth rate Terminal growth rate 3.25% 3.50% 3.00% 3.25% 3.50% 9.50% $90.86 $92.91 9.50% 17.5x 17.8x 18.2x 9.50% 10.00% 84.37 86.05 10.00% 16.3 16.6 16.9 10.00% 10.50% 78.74 80.13 10.50% 15.4 15.6 15.9 10.50% Note: Valuation date 6/30/06; assumes land value of $385mm and net debt of $662mm; 2006E adjusted to reflect only Q3-Q4 stub period ¹ Differs from EBITDA in that it includes non-recurring equity earnings and land sales per K-2 model JPMorgan 2013E $441 0 (30) (98) $313 (10) $303 98 (93) 0 0 0 0 0 0 0 0 0 0 13 4 $325 g WACC: 2014E $454 0 (30) (98) $326 (11) $315 98 (96) 0 0 0 0 0 0 0 0 0 0 13 4 $334 2015E $468 (52) (31) (98) 3.00% 10.4x 9.6 9.0 $287 (10) $277 98 (99) 0 0 0 0 0 0 0 0 0 423 13 5 $717 Implied terminal FV/EBITDA multiple Terminal growth rate 3.25% 2016E $482 (54) (32) (98) 10.8x 10.0 9.4 $297 (10) $288 98 (101) 0 O O O O O O O OOMS 13 $301 3.50% 11.3x 10.4 9.7 PROJECT PLATO 20#23APPENDIX Discounted cash flow analysis - Adjusted Upside Case Projections ($ millions, except per share data) Adjusted cash EBITDA Less: Mohegan adjustment Less: recurring equity earnings Less: Depreciation EBIT Less: Tax expense Net income Plus: Depreciation Less: Capex Plus: Capitalized interest adj. Plus: Cape Town notes monetization Plus: Kanahura notes monetization Plus: Reethi Rah notes monetization Less: Dev. Proj. Investments Less: Project advances Less: Lux (repayments)/issuances Plus: CF from AC land sale Less: Increases in NWC Plus: Equity earnings terminal valuation Plus: Palmilla dividend Plus: Dividend income Unle vered free cash flow Valuation Equity value per share WACC: 2006E $108 0 (6) (36) 3.00% $95.69 89.05 83.27 $66 (3) $64 36 (263) 26 0 0 0 (97) 0 (1) 0 7 0 0 14 ($214) 2007 E $306 0 (10) (90) $205 5 $210 90 (192) 32 0 0 0 (28) (20) (12) 0 1 0 0 47 $128 2008E $365 0 WACC: EⓇ * * * º °°pon-2-00 (17) (98) $250 (9) $241 98 (75) 18 76 5 1 (0) 1 8 65 $436 2009E $397 0 (22) (99) $276 (9) $267 99 (80) 0 10 2 0 O SONÔNOO 40 20 $377 2006E FV/EBITDA multiple 2010E $424 0 (27) (100) $297 (9) $288 100 (85) 0 ܘ ܘ ܘ ܘ ܘ ܚ ܘ ܗ ܘ ܚ ܟ 13 $330 Terminal growth rate 3.25% 2011E $437 0 (28) (99) $3 10 (10) $300 99 (88) 0 0 0 0 0 0 0 0 0 13 4 $329 2012E $450 0 (29) (99) $323 (10) $313 99 (90) 0 0 0 0 0 0 0 0 0 0 13 4 $338 2013E $464 0 (30) (98) Terminal growth rate 3.25% 3.50% 3.00% 3.50% 9.50% $97.74 $99.96 9.50% 17.3x 17.7x 18.1x 9.50% 10.00% 90.74 92.56 10.00% 16.2 16.5 16.8 10.00% 84.68 86.19 10.50% 15.3 15.5 15.7 10.50% 10.50% Note: Valuation date 6/30/06; assumes land value of $385mm and net debt of $662mm; 2006E adjusted to reflect only Q3-Q4 stub period ¹ Differs from EBITDA in that it includes non-recurring equity earnings and land sales per K-2 model JPMorgan $336 (10) $325 98 (93) 0 WACC: 0 0 0 0 0 0 0 0 0 13 4 $348 2014E $477 0 (30) (98) $349 (11) $338 98 (96) 0 0 0 0 0 0 0 0 0 13 4 $358 2015E $492 (52) (31) (98) 3.00% 10.7x 9.9 9.3 $311 (10) $301 98 (99) 0 0 0 0 0 0 0 0 0 423 13 5 $741 Implied terminal FV/EBITDA multiple Terminal growth rate 3.25% 11.1x 10.3 9.6 2016E $507 (54) (32) (98) $322 (10) $312 98 (101) 0 O O O O O O O O O 13 5 $326 3.50% 11.6x 10.7 10.0 PROJECT PLATO 21#24APPENDIX Leveraged buyout analysis - Upside Case, 67% leverage Assumptions Entry assumptions Date Purchase price per share Cost of debt Full-year 2006E EBITDA Exit ass um ptions Date Management promote Exit FV/EBITDA multiple Terminal year EBITDA Sources & us es Sources New LBO debt New equity Total sources Us es Equity purchase price Refinanced debt Transaction value Transaction fees Totaluses 6/30/06 $75.00 7.50% $240 6/30/11 10.0% 12.5x $345 $2,399 1,281 $3,680 $2,918 662 $3,580 100 $3,680 Projections Adjusted cash EBITDA¹ Plus: Cost synergies Less: Recurring equity earnings Less: Depreciatio EBIT Plus: Cash interest income Less: Cash interest expense Plus: Capitalized interest adj Pre-tax income Less: Tax expens e Net income Plus: Depreciation Plus: Reethi Rah notes monetization Plus: Cape Town notes monetization Plus: Kanahura notes monetization Plus: Land sale Less: Capex Less: Dev. Proj. Investments Less: Project advances Less: Lux (repayments)/issuances Plus: CF from AC land sale Less: Increases in NWC Plus: Palmilla dividend Plus: Dividend income Available CF for paydown Internal rate of return Credit statistics 2006E $102 Total debt/EBITDA Total debt/Purchase price 3 (6) (36 $63 0 1 (96) (208) 32 $19 26 ($7) 0 ($7) 0 $19 36 90 0 0 0 0 0 0 0 0 (263) (97) 0 (1) 0 7 0 14 ($311) 20.9% $290 5 (10) (90) $195 2007E 2008E 2009E 2010E 2011E $378 $404 $416 5 5 5 (22) (27) (28) (99) (100) (99) $262 $282 $294 1 1 1 (188) (157) (126) 0 0 $125 $168 $347 5 (17) (98) $236 1 (203) 18 $51 0 $51 98 0 $74 0 $74 0 0 $125 $168 100 99 99 76 0 0 0 0 467 2006E 11.4x 76% 1.06x (192) (28) (20) (12) 0 1 6/30/06 10.0x 67% EBITDA/interest NA Note: Valuation date 6/30/06; 2006E adjusted to reflect only Q3-Q4 stub period ¹ Differs from EBITDA in that it includes non-recurring equity earnings and land sales per K-2 model JPMorgan 0 ge-006 (75) (0) 10 2 0 (80) 0 10 2 40 (2) 9 (85) 0 10 3 0 (3) 13 4 0 47 20 ($95) $229 $184 $634 4.4x 2007E 2008E 2009E 2010E 9.7x 7.5x 6.4x 79% 1.39x 1.71x 72% 50% 67% 2.01x 2.57x 0 0 0 0 (88) 0 0 0 0 0 13 4 $197 2011E 3.8x 44% 3.30x Exit EBITDA adjustment 2011E EBITDA Less: Mohegan 2011E CF Adjusted exit EBITDA Equity value per share IRR: Price 18.0% 20.0% 22.0% Internal rate of return $75.00 $80.00 $85.00 IRR: Exit FVIEBITDA multiple 11.5x $75.72 72.39 70.19 18.0% 20.0% 22.0% 12.5x 62.3% 19.6% 17.3 15.0 $78.86 76.61 74.15 Debt to cap on entry 65.0% 20.3% 17.9 15.6 Implied entry FVEBITDA multiple Exit FV/EBITDA multiple 11.5x 15.1x 14.6 14.2 12.5x 15.6x 15.1 14.7 $416 (43) $373 13.5x $82.00 79.32 76.64 67.0% 20.9% 18.4 16.0 13.5x 16.2x 15.7 15.2 PROJECT PLATO 22#25APPENDIX Leveraged buyout analysis - Adjusted Upside Case, 67% leverage Assumptions Entry assumptions Date Purchase price per share Cost of debt Full-year 2006E EBITDA Exit ass um ptions Date Management promote Exit FV/EBITDA multiple Terminal year EBITDA Sources & us es Sources New LBO debt New equity Total sources Us es Equity purchase price Refinanced debt Transaction value Transaction fees Totaluses 6/30/06 $75.00 7.50% $258 6/30/11 15.0% 12.5x $367 $2,399 1,281 $3,680 $2,918 662 $3,580 100 $3,680 Projections Adjusted cash EBITDA¹ Plus: Cost synergies Less: Recurring equity earnings Less: Depreciatio EBIT Plus: Cash interest income Less: Cash interest expense Plus: Capitalized interest adj Pre-tax income Less: Tax expens e Net income Plus: Depreciation Plus: Reethi Rah notes monetization Plus: Cape Town notes monetization Plus: Kanahura notes monetization Plus: Land sale Less: Capex Less: Dev. Proj. Investments Less: Project advances Less: Lux (repayments)/issuances Plus: CF from AC land sale Less: Increases in NWC Plus: Palmilla dividend Plus: Dividend income Available CF for paydown Internal rate of return Credit statistics $108 2006E 2007E 2008E 2009E 2010E $306 $365 $397 $424 5 5 5 5 (10) (17) (22) (27) (90) (98) (99) (100) $255 $281 $302 1 (36 $69 $210 0 1 1 (96) (207) 26 ($1) 0 ($1) 32 $35 0 $35 1 (201) 18 $72 0 $72 (184) (151) 0 $152 $198 0 $152 100 0 $98 0 $98 99 0 $198 99 36 90 98 76 0 0 0 0 0 0 0 (88) 0 0 0 0 0 13 Total debt/EBITDA Total debt/Purchase price 3 (6) 0 0 0 0 (263) (97) 0 (1) 0 7 0 14 ($304) 22.5% 0 0 0 0 (192) (28) (20) (12) 0 1 0 47 ($ 78) 6/30/06 9.3x 67% EBITDA/interest NA Note: Valuation date 6/30/06; 2006E adjusted to reflect only Q3-Q4 stub period ¹ Differs from EBITDA in that it includes non-recurring equity earnings and land sales per K-2 model JPMorgan 2006E 2007E 9.2x 10.6x 76% 1.12x 1.48x 78% 0 0 0 (75) 0 5 1 (0) 1 8 65 $250 10 2 0 (80) 0 10 2 40 (2) 9 0 467 (85) 0 10 3 0 (3) 13 20 4 $208 $661 2008E 2009E 2010E 7.0x 5.9x 4.0x 71% 65% 47% 1.82x 2.16x 2.81x 2011E $437 5 (28) (99) $315 1 (118) 0 4 $226 2011E 3.3x 41% 3.71x Exit EBITDA adjustment 2011E EBITDA Less: Mohegan 2011E CF Adjusted exit EBITDA Equity value per share IRR: Price 18.0% 20.0% 22.0% Internal rate of return $75.00 $80.00 $85.00 IRR: Exit FVIEBITDA multiple 11.5x $78.01 74.49 72.13 18.0% 20.0% 22.0% 12.5x $81.15 78.70 76.08 Debt to cap on entry 65.0% 21.8% 19.6 17.3 62.3% 21.0% 18.8 16.6 Implied entry FV/EBITDA multiple Exit FV/EBITDA multiple 11.5x 14.4x 13.9 13.5 12.5x 14.9x 14.4 14.0 $437 (43) $394 13.5x $84.30 81.43 78.58 67.0% 22.5% 20.2 17.9 13.5x 15.4x 14.9 14.4 PROJECT PLATO 23#26APPENDIX Leveraged buyout analysis - K-2 case, 62% leverage Assumptions Entry assumptions Date Purchase price per share Cost of debt Full-year 2006E EBITDA Exit ass um ptions Date Management promote Exit FV/EBITDA multiple Terminal year EBITDA Sources & us es Sources New LBO debt New equity Total sources Us es Equity purchase price Refinanced debt Transaction value Transaction fees Totaluses 6/30/06 $75.00 7.50% $240 6/30/11 10.0% 12.5x $345 $2,230 1,450 $3,680 $2,918 662 $3,580 100 $3,680 Projections Adjusted cash EBITDA¹ Plus: Cost synergies Less: Recurring equity earnings Less: Depreciation EBIT Plus: Cash interest income Less: Cash interest expense Plus: Capitalized interest adj Pre-tax income Less: Tax expens e Net income Plus: Depreciation Plus: Reethi Rah notes monetization Plus: Cape Town notes monetization Plus: Kana hura notes monetization Plus: Land sale Less: Capex Less: Dev. Proj. Investments Less: Project advances Less: Lux (repayments)/issuances Plus: CF from AC land sale Less: Increases in NWC Plus: Palmilla dividend Plus: Dividend income Available CF for paydown Internal rate of return Credit statistics 2010E 2011E $102 $416 5 2006E 2007E 2008E 2009E $290 $347 $378 $404 5 5 5 5 (10) (17) (22) (27) (28) (90) (98) (99) (100) (99) $195 $236 $262 $282 $294 1 1 (195) (189) (172) 1 1 (140) 0 1 (107) 0 18 $66 0 $90 32 $32 0 $32 0 0 $90 99 $142 $187 0 0 $142 $187 100 99 90 0 0 0 0 0 0 0 0 0 0 0 (88) 0 0 0 0 0 13 Total debt/EBITDA Total debt/Purchase price 3 (6) (36 $63 0 (90) 26 ($1) 0 ($1) 36 0 0 0 0 (263) (97) 0 (1) 0 7 0 14 (192) (28) (20) (12) 0 1 19.6% $66 98 76 6/30/06 9.3x 62% EBITDA/interest NA Note: Valuation date 6/30/06; 2006E adjusted to reflect only Q3-Q4 stub period ¹ Differs from EBITDA in that it includes non-recurring equity earnings and land sales per K-2 model JPMorgan 0 0 0 (75) 0 (0) 1 0 8 47 65 ($304) ($81) $243 5 1 10 2 0 (80) 0 10 2 10 3 0 (3) 13 20 4 $200 $652 $215 40 0 467 (2) 9 (85) 0 2006E 2007E 2008E 2009E 2010E 9.1x 6.9x 5.8x 3.8x 10.7x 71% 1.13x 1.49x 74% 67% 61% 43% 1.84x 2.20x 2.88x 4 2011E 3.2x 37% 3.87x Exit EBITDA adjustment 2011E EBITDA Less: Mohegan 2011E CF Adjusted exit EBITDA Equity value per share IRR: Price 18.0% 20.0% 22.0% Internal rate of return $75.00 $80.00 $85.00 IRR: Exit FVIEBITDA multiple 11.5× $74.15 70.59 68.22 18.0% 20.0% 22.0% 12.5 $77.28 74.86 72.24 Debt to cap on entry 65.0% 20.3% 17.9 15.6 62.3% 19.6% 17.3 15.0 Implied entry FW/EBITDA multiple Exit FVIEBITDA multiple 11.5x 14.8x 14.3 13.9 12.5x 15.3x 14.8 14.3 $416 (43) $373 13.5x $80.42 77.56 74.71 67.0% 20.9% 18.4 16.0 13.5x 15.9x 15.3 14.8 PROJECT PLATO 24#27APPENDIX Sum-of-the-parts analysis - Upside Case $ millions, except per share data Existing operations Paradise Island (excl. Phase III) 2006 E EBITDA Multiple Enterprise value Ocean Club 2006 E EBITDA Multiple Enterprise value Mohegan PV of annuity Less: CT tax @ 7% Enterprise value One & Only Gross 080 fees Less: Expenses Net 080 fees Multiple Enterprise value Harborside Fees Multiple Enterprise value Corporate 2006 E adj. corp. expense Multiple Enterprise value Equity earnings Equity income Less: Palmilla equity earnings Adjusted equity eamings Multiple Enterprise value Enterprise value Less: Net debt Plus: Equity value of Palmilla Equity value Diluted shares¹ Equity value per share Plus: Un developed land Plus: Development projects Equity value per share JPMorgan Low $170 10.0x $1,701 $13 14.0x $176 $211 (15) $196 $24 (13) $11 18.0x $200 $4 8.0x $33 ($38) 9.0x ($344) $14 (3) $11 20.0x $218 $2,180 (355) 85 $1,910 39.1 $48.88 3.28 21.21 $73.36 High $170 11.0x $1,872 $13 15.0x $189 $225 (15) $210 20.0x $222 $4 10.0x $41 ($38) 10.0x ($382) $24 (13) $11 Low High $14 (3) $11 25.0x $272 $2,424 Development projects (355) 95 $2,164 39.1 $55.37 9.84 27.92 $93.13 First stabilized year EBITDA Multiple Enterprise value Less: Project net debt Equity value Discount years Discount rate Present value of equity Percentage ownership Pro rata equity value PV of remaining funding Net equity value Diluted shares Equity value per share (midpoint) 2006E EBITDA Multiple Enterprise value Less: Net debt Equity value % ownership Equity value Acres (mm) $mm per acre Total value Palmilla Diluted shares Equity value per share BLB 2007 $75 $597 8.0x (433) $164 0.5 12.5% Low $154 38% $58 $38 39.1 $0.98 (19) $0.64 $1.33 Undeveloped land Low 20 14.0x 280 (110) $170 50.0% $85 64.1 $2 $128 39.1 $3.28 Phase III 2009 $103 10.5x $1,080 (711) $369 2.5 12.5% $275 $275 0 $275 39.1 $7.03 High 100% $5.92 $8.20 20 15.0x 300 (110) $190 50.0% $95 High 64.1 $6 $385 39.1 $9.84 Morocco 2008 $34 8.5x $290 (152) $138 1.5 12.5% $116 50% $58 (24) $34 39.1 $0.86 $0.66 $1.06 Morocco Fees 2008 $6 14.0x $80 0 $80 1.5 12.5% $67 100% $67 0 $67 39.1 $1.71 $1.57 $1.86 Mohegan BLB Phase III Morocco Morocco Fees The Palm 2009 The Palm The Palm Fees OC Condos Condo Tel Condo Tel Fees Land ($ per acre) $141 10.0x $1,413 (1,124) $289 2.5 12.5% $215 50% $108 (74) $33 39.1 $0.85 $0.14 $1.60 Note: Development projects valuation multiples represents the midpoint of each project's assumed valuation range 1 Based on the midpoint of the valuation range The Palm Fees 2009 Low High $329 Development project valuation ranges $24 14.0x 0 $329 2.5 12.5% $245 100% $245 0 $245 39.1 $6.26 $5.69 $6.86 Development projects total Low EBITDA multiple 7.5x 10.0x 8.0x 13.0x 9.5x 13.0x 50% of OC Condos 9.5x $2.0 $33 100% $33 0 $33 39.1 $0.85 $0.85 $0.86 High 8.5x 11.0x 9.0x 15.0x 10.5x 15.0x 10.0x $6.0 50% of Condo Tel $75 100% $75 (41) $34 39.1 $0.86 $0.84 $0.87 Low Discount rate Condotel Fees 2008 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% $24 9.8x $238 0 $238 1.5 12.5% $199 100% $199 0 $199 39.1 $5.09 $4.89 $5.29 $21.21 $27.92 High 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% PROJECT PLATO 25#28APPENDIX Sum-of-the-parts analysis - Adjusted Upside Case $ millions, except per share data Existing operations Paradise Island (excl. Phase III) 2006 E EBITDA Multiple Enterprise value Ocean Club 2006 E EBITDA Multiple Enterprise value Mohegan PV of annuity Less: CT tax @ 7% Enterprise value One & Only Gross 080 fees Less: Expenses Net 080 fees Multiple Enterprise value Harborside Fees Multiple Enterprise value Corporate 2006 E adj. corp. expense Multiple Enterprise value Equity earnings Equity income Less: Palmilla equity earnings Adjusted equity earings Multiple Enterprise value Enterprise value Less: Net debt Plus: Equity value of Palmilla Equity value Diluted shares¹ Equity value per share Plus: Unde ve loped land Plus: Development projects Equity value per share JPMorgan Low $187 10.0x $1,872 $14 14.0x $194 $211 (15) $196 $24 (13) $11 18.0x $200 $4 8.0x $33 ($38) 9.0x ($344) $14 (3) $11 20.0x $218 $2,368 (355) 85 $2,098 39.3 $53.36 3.26 21.08 $77.71 High $187 11.0x $2,059 $14 15.0x $208 $225 (15) $210 20.0x $222 $4 10.0x $41 ($38) 10.0x ($382) $24 (13) $11 Low High $14 (3) $11 25.0x $272 Development projects $2,630 (355) 95 $2,370 39.3 $60.28 9.78 27.76 $97.82 First stabilized year EBITDA Multiple Enterprise value Less: Project net debt Equity value Discount years Discount rate Present value of equity Percentage ownership Pro rata equity value PV of remaining funding Net equity value Diluted shares Equity value per share (midpoint) 2006E EBITDA Multiple Enterprise value Less: Net debt Equity value % ownership Equity value Acres (mm) $mm per acre Total value Palmilla Diluted shares Equity value per share $75 BLB 2007 $597 8.0x (433) $164 0.5 12.5% $154 Low 38% $58 $38 39.3 $0.98 (19) $0.64 $1.32 Undeveloped land Low 20 14.0x 280 (110) $170 50.0% $85 64.1 $2 $128 39.3 $3.26 Phase III 2009 $103 10.5x $1,080 (711) $369 2.5 12.5% $275 $275 0 $275 39.3 $6.99 High 100% $5.89 $8.15 20 15.0x 300 (110) $190 50.0% $95 High 64.1 $6 $385 39.3 $9.78 Morocco 2008 $34 8.5x $290 (152) $138 1.5 12.5% $116 50% $58 (24) $34 39.3 $0.85 $0.66 $1.05 Morocco Fees 2008 $6 14.0x $80 0 $80 1.5 12.5% $67 100% $67 0 $67 39.3 $1.70 $1.56 $1.85 Mohegan BLB Phase III Morocco Morocco Fees The Palm 2009 The Palm The Palm Fees OC Condos Condo Tel Condo Tel Fees Land ($ per acre) $141 10.0x $1,413 (1,124) $289 2.5 12.5% $215 50% $108 (74) $33 39.3 $0.85 $0.14 $1.59 Note: Development projects valuation multiples represents the midpoint of each project's assumed valuation range 1 Based on the midpoint of the valuation range The Palm Fees 2009 Low High $329 $24 14.0x 0 $329 2.5 12.5% $245 100% $245 Development project valuation ranges 0 $245 39.3 $6.23 $5.66 $6.82 Development projects total Low EBITDA multiple 7.5x 10.0x 8.0x 13.0x 9.5x 13.0x 50% of OC Condos 9.5x $2.0 $33 100% $33 0 $33 39.3 $0.85 $0.84 $0.85 High 8.5x 11.0x 9.0x 15.0x 10.5x 15.0x 10.0x $6.0 50% of Condo Tel $75 100% $75 (41) $34 39.3 $0.85 $0.84 $0.87 Low Discount rate Condotel Fees 2008 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% 11.5% $24 9.8x $238 0 $238 1.5 12.5% $199 100% $199 0 $199 39.3 $5.06 $4.86 $5.26 $21.08 $27.76 High 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% PROJECT PLATO 26#29APPENDIX Financial buyer cost synergy analysis Cost synergies opportunities ($ thousands) Corporate salaries Corporate Executive bonus plan Finance, accounting and legal Public relations Human resources Additional Total 1 Source: K-2 management JPMorgan 2006E budget¹ $4,860 3,750 5,463 1,902 1,860 $17,835 Synergies % (100.0%) (33.0%) Synergies - $ (3,750) (628) (945) $5,000 PROJECT PLATO 27#30APPENDIX Paradise Island land K-2's total usable, undeveloped land on Paradise Island Main Club Med (including Option land) Lot 1 (Hart House) Lot 2,3 + (Mcweeney House) West of Phase III (formerly Club Med) South of Phase III (Trailer park and Helipad) Hurricane Hole (excluding Marina) East of Riu on Beach (Parcels F & E) PI Colony Lot East of Car Park structure Total acreage Source: K-2 management JPMorgan Acres 39.4 0.5 1.8 41.7 8.5 7.1 6 0.8 64.1 Comparable transactions Melk Property - beachfront, adjacent to Ocean Club Estates Hurricane Hole Marina Ocean Club Condo Property Club Med (adjacent to Phase III) Acres 7.5 7.0 9.0 41.0 $mm$mm/acre $15.0 14.0 18.0 40.0 $2.0 2.0¹ 2.0 1.0 Weighted average Source: K-2 management ¹ Hurricane Hole transaction included a marina with $1mm of annual EBITDA. Total transaction value of $24mm assumes a 10x purchase multiple for marina $1.4 PROJECT PLATO 28#31APPENDIX Additional development projects Additional Atlantis developments (100% probability of success) Atlantis Management resort 1/1/09 $141 10.0x Assumed opening day EBITDA Multiple Enterprise value Less: Net debt held at project Equity value Discount period Discount rate PV of Equity Percentage ownership Owned equity value Less: Present value of remaining funding Net equity value at 6/30/06 Total equity value at 6/30/06 Equity value¹ 6/30/06E $278 Discount period Discount rate Present value of Atlantis projects JPMorgan 1,413 (1,124) $289 2.5 12.5% 215 50% $108 (74) $33 2013E $347 Total additional equity value Diluted shares (current) Total additional equity value per share ¹ Equity value of additional Atlantis resorts grown by inflation 7.5 12.5% $143 fees 1/1/09 $24 14.0x 329 0 $329 2.5 12.5% 245 100% $245 0 $245 $278 2017E $391 11.5 12.5% $101 $244 38.5 $6.35 Proposed Singapore development (25% probability of success) Singapore resort 1/1/09 $375 10.0x $3,750 (3,000) $750 2.5 12.5% $559 25% $140 Assumed opening day EBITDA Multiple Enterprise value Less: project cost Equity value Discount period Discount rate PV of Equity Probability of success Prob. weighted PV of Equity Percentage ownership Net equity value at 6/30/06 Diluted shares (current) Total additional equity value per share 60% $84 38.5 $2.18 PROJECT PLATO 29#32APPENDIX Adjusted cash EBITDA build-up - Upside Case $ millions EBITDA: Paradise Island Ocean Club Phase III Paradise Island CondoTel CondoTel Fees Harborside Fees The Palm Dome UK Gaming Mohegan Catskills Morocco 080 Management Fees: Mauritius Kanuhura Reethi Rah Dubai Palmilla Cape Town Marketing Fees 080 Management Fees 080 Development Fees Total Segment EBITDA Corporate Expenses New Project Expenses Corp. Stock Comp Amort. 080 Expenses Corporate and 080 Expenses Minority Interest Adjusted consolidated EBITDA Plus: Corp. Stock Comp. Amort. Plus: Equity earings, Net Cash EBITDA Plus: Non-recurring adjustments Plus: Land sales Adjusted cash EBITDA JPMorgan 2004A 144 10 2 156 0 0 3 0 0 (2) 37 0 0 8 1 0 3 1 0 0 14 1 210 (29) (4) (2) (14) (49) (2) 160 2 2 163 (15) 0 148 2005A 162 12 2 176 0 0 4 0 0 (5) 39 0 0 0 1 4 3 0 2 18 (0) 233 (27) (9) (3)! (13) (52) (2)! 179 3 12 194 (75) 0 120 '06Q1 57 5 2 64 0 0 1 0 0 (2) 9 0 0 MI NITO -0 DON 3 1 2 1 1 1 8 (0) 80 (8) (2) (4) (3) (18) (1) 62 4 6 72 (6) 0 66 '0602 55 4 2 61 0 0 1 1 0 (2) 9 0 0 - 001 -0050 1 74 (8) (2) (4) (3) (18) (0) 56 4 2 63 9 0 72 '0603 34 2 2 37 0 0 1 1 0 (1) 10 0 0 TOTO - OOM O 1 0 1 0 1 0 0 3 0 AKO WENO N (8) (2) (3) (18) (0) 0 39 11 0 50 '0604 25 2 2 29 0 0 1 1 0 (2) 10 0 0 0 2 1 2 0 1 8 0 新 三 47 (8) (1) (4)! (3)! (16) 31 5 9202 40 12 52 2006E 170 13 9 191 0 0 4 2 0 (7) 39 0 0 8 1 5 4 4 0 2 24 0 254 (31) (7) (18) (13) (69) (2) 183 18 14 214 26 0 240 2007E 143 13 74 231 0 0 4 4 0 (4) 37 0 1 ܣ ܝ ܗ ܦ ܚ ܘ 8 5 4 3 2 23 1 296 (33) (5) (16) (14) (68) (4) 225 16 10 251 34 5 290 2008E 172 14 93 278 21 0 3 4 0 (2) 38 0 1 SECTES -NOGA - 00 371 (73) 294 11 5 347 2009E 182 14 103 299 23 0 4 24 0 0 39 0 7 8 1 6 4 5 1 2 29 0 425 (40) (5) (17) (16) (77) (6) 341 17 22 381 (3) 0 378 2010E 191 15 107 312 24 0 4 26 0 0 40 0 9 9 1 6 5 5 2 2 30 0 446 (42) (5) (17) (16) (80) (7) 359 17 27 404 0 0 404 PROJECT PLATO 30#33APPENDIX Adjusted cash EBITDA build-up - Adjusted Upside Case 10% upside on Atlantis, Paradise Island and Ocean Club over management's Upside Case EBITDA projections $ millions EBITDA: Paradise Island Ocean Club Phase III Total Paradise Island CondoTel CondoTel Fees Harborside Fees The Palm Dome UK Gaming Mohegan Catskills Morocco 080 Management Fees: Mauritius Kanuhura Reethi Rah Dubai Palmilla Cape Town Marketing Fees 080 Management Fees 080 Development Fees Total Segment EBITDA Corporate Expenses New Project Expenses Corp. Stock Comp Amort. 080 Expenses Corporate and O80 Expenses Minority Interest Adjusted consolidated EBITDA Plus: Corp. Stock Comp. Amort. Plus: Equity earings, Net Cash EBITDA Plus: Non-recurring adjustments Plus: Land sales Adjusted cash EBITDA JPMorgan 2004A 144 10 2 156 0 0 3 0 0 (2) 37 0 0 8 1 0 3 1 0 0 14 1 210 (29) (4) (2) (14) (49) (2) 160 2 2 179 (15) 0 163 2005A 162 12 2 176 0 0 4 0 (5) 39 0 0 1 4 3 0 2 18 (0) 233 (27) (9)! (3)! (13) (52) (2)! 179 3 12 212 (75) 0 137 '06Q1 63 5 2 70 0 0 1 0 (2) 9 0 0 N-w 2 1 1 0 1 8 (0) 86 (8) (2) (4) (3) (18) (1) 68 4 6 78 (6) 0 72 '0602 SSDOO- TONGoo 60 5 2 67 0 0 1 1 0 (2) 9 0 0 1 0 0 1 1 0 0 5 0 80 (8) (2) (4) (3) (18) (0) 62 4 2 69 9 0 78 '06Q3 37 2 2 41 0 0 1 1 0 (1) 10 0 0 TOTO-00mo 1 1 1 3 55 (8) (2) (4) (3) (18) (0) 38 4 0 42 11 0 53 '0604 27 2 2 31 0 1 1 0 (2) 10 0 0 3 0 2 1 2 0 1 8 50 (8) (1)! (4)! (3)! (16) (1) 2 5 _3 12 0 55 43 2006E 187 14 210 0 0 4 2 0 (7) 39 0 0 8 1 5 4 4 0 2 24 0 272 (31) (7) (18) (13) (69) (2) 201 18 14 232 26 0 258 2007E 157 14 74 246 0 0 4 4 0 (4) 37 0 1 ܣ ܝ ܗ ܂ 4 3 0 2 23 1 312 (33) (5) (16) (14) (68) (4) 240 16 10 267 34 5 306 2008E 189 15 93 297 21 0 3 4 0 (2) 38 0 1 8 1 6 4 5 0 2 26 1 390 (34) (5) (19) (15) (73) (5) 312 19 17 349 11 5 365 2009E 200 16 103 319 23 0 4 24 0 0 39 0 7 8 1 6 4 5 1 2 29 0 445 (40) (5) (17) (16) (77) (6) 361 17 22 400 (3) 0 397 2010E 210 16 107 333 24 0 4 26 0 0 40 0 9 . 3 833JE NNGG 467 (42) (16) (80) 0 424 PROJECT PLATO 31#34APPENDIX WACC analysis WACC calculation Risk free rate Unlevered Beta Levered Beta Equity risk premium Cost of equity (Re) Pre-tax cost of debt (YTW) (Rd) Effective tax rate Post-tax cost of debt Target debt/total capital Target debt /equity WACC WACC (rounded) Leverage (8 of TMC) Debt Equity Debt/equity JPMorgan 4.74% 1.30 1.75 4.24% 12.16% 6.55% 0.0% 6.55% 35.0% 53.8% 10. 20% 10. 20% 35.0% 35.0 65.0 53.8% Estimated peer beta analysis Company MGM Mirage Harrah's Entertainment Wynn Resorts Las Vegas Sands Gaylord Entertainment Orient Express Hotels Starwood Hotels & Resorts Hilton Hotels Mean Median Beta 1.50 Predicted beta 1.50 1.25 1.75 1.60 1.50 1.50 1.25 1.25 1.75 2.00 WACC sensitivity by beta and cost of debt 6.05% 9.33% 10.02% 1.45 1.50 10.71% Total debt $12,271 10,596 NM NM 582 558 3,180 8,193 6.30% 9.42% 10.11% 5,897 5,687 10.80% Equity mkt. cap 11,247 13,166 NM NM 1,883 1,407 15,440 9,863 8,834 10,555 Cost of debt 6.55% 9.51% 10.20% 10.89% Debt/ capital 52% 45% NM NM 24% 28% 17% 45% 35% 37% 6.80% 9.60% 10.29% 10.97% Tax rate 35% 35% NM NM 35% 35% 35% 35% 35% 35% Unlevered beta 1.12 0.97 NM NM 1.30 1.27 1.13 0.97 1.12 1.12 7.05% 9.68% 10.37% 11.06% PROJECT PLATO 32#35APPENDIX Value of NOLS K-2 has $279.8mm of U.S. NOLS outstanding in its K-2 International North America, Inc. ("KINA") subsidiary $0.5mm are restricted in use $279.3mm are unrestricted In a change of control transaction, K-2's NOLs will be subject to certain restrictions Limit on using more than (4.36% * equity value of KINA) of NOLS in any given year Only exception is that if K-2 sells any assets within KINA where the sale price is greater than the basis, K-2 may be able to utilize the NOLS without limitation to shield any capital gains JPMorgan PROJECT PLATO 33#36APPENDIX K-2 model - Key drivers Room Margin % growth Rev PAR % growth ADR % growth Occupancy % growth Phase I # of Rooms Phase II # of Rooms Phase III # of Rooms Total Rooms Win/Table/Day % growth Slot Win/Day % growth % of revenue Food Beverage Food COGS Beverage COGS Payrol & related Telephone expense F&B margin % growth F&B/occupied room night % growth Food/occupied room night % growth Beverage/occupied room night % growth Telephone/occupied room night JPMorgan 2004A 78.1% 0.2% $207.00 2.9% $257.06 2.1% 80.5% 0.7% 1,116 1,201 2,317 $2,636 (12.0%) $177 8.4% 72.4% 26.2% 27.9% 19.8% 32.3% 40.6% 29.9% 10.9% $189.33 6.6% $137.03 6.9% $49.52 5.1% $13.18 2005A 79.0% 0.8% $221.09 6.8% $271.52 5.6% 81.4% 0.9% 1,116 1,201 2,317 $2,788 5.8% $213 20.6% 71.5% 26.9% 27.8% 18.9% 31.8% 32.3% 29.7% (0.5%) $207.71 9.7% $148.54 8.4% $55.79 12.7% $10.86 2006E 78.8% (0.2%) $230.76 4.4% $281.20 3.6% 82.1% 0.6% 1,116 1,201 2,317 $2,814 0.9% $208 (2.5%) 72.2% 26.8% 27.7% 18.9% 31.7% 33.7% 30.9% 4.1% $257.93 24.2% $186.10 25.3% $69.01 23.7% $11.17 2007 E 78.6% (0.1%) $239.89 4.0% $298.76 6.2% 80.3% (1.8%) 1,116 1,201 600 2,917 $3,172 12.7% $238 14.6% 72.2% 26.7% 27.8% 18.9% 31.7% 40.9% 30.9% (0.3%) $270.90 5.0% $195.60 5.1% $72.35 4.8% $11.39 2008 E 78.8% 0.1% $255.67 6.6% $316.32 5.9% 80.8% 0.5% 1,116 1,201 600 2,917 $3,452 8.8% $258 8.2% 72.2% 26.8% 27.7% 18.9% 31.7% 40.6% 30.9% 0.3% $284.38 5.0% $205.18 4.9% $76.09 5.2% $11.85 2009E 78.8% (0.0%) $269.02 5.2% $328.80 3.9% 81.8% 1.0% 1,116 1,201 600 2,917 $3,587 3.9% $268 4.0% 72.2% 26.8% 27.7% 18.9% 31.7% 40.7% 30.9% (0.0%) $298.60 5.0% $215.45 5.0% $79.89 5.0% $12.20 2010E 78.8% 0.0% $279.77 4.0% $341.94 4.0% 81.8% 0.0% 1,116 1,201 600 2,917 $3,694 3.0% $276 3.0% 72.2% 26.8% 27.7% 18.9% 31.7% 40.7% 30.9% 0.0% $313.53 5.0% $226.22 5.0% $83.88 5.0% $12.56 PROJECT PLATO 34#37APPENDIX Premiums paid analysis Median - All deals (mean premiums in parentheses) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 21.5% JPMorgan (24.2%) 25.9% (26.2%) 1-day Note: All-cash deals greater than $1bn announced 2004-present 1-week 24.3% (28.4%) 1-month Median - LBO deals (mean premiums in parentheses) 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 19.5% (20.7%) 1-day 21.6% (23.6%) 1-week 19.9% (24.0%) 1-month Note: All-cash leveraged buyouts greater than $1bn announced 2004-present PROJECT PLATO 35#38APPENDIX Premiums paid Based on all 100% cash deals greater than $1bn 2004-present (86 deals) Date Announced Date Effective 2/27/2006 Target Name KeySpan Corp NA NA MeriStar Hospitality Corp NA Lafarge N America Inc 2/21/2006 2/6/2006 1/30/2006 1/22/2006 1/10/2006 1/3/2006 12/19/2005 12/14/2005 12/13/2005 12/7/2005 11/30/2005 11/21/2005 11/21/2005 11/20/2005 11/18/2005 11/13/2005 11/10/2005 11/9/2005 11/8/2005 10/24/2005 10/24/2005 10/24/2005 10/16/2005 10/3/2005 9/29/2005 9/19/2005 9/18/2005 9/15/2005 9/1/2005 8/29/2005 8/24/2005 8/4/2005 8/2/2005 7/21/2005 7/10/2005 6/30/2005 6/17/2005 6/16/2005 6/14/2005 6/13/2005 6/7/2005 6/3/2005 6/2/2005 6/2/2005 5/16/2005 5/12/2005 5/4/2005 5/2/2005 4/21/2005 3/28/2005 3/17/2005 JPMorgan NA NA NA NA NA NA NA NA NA NA NA NA 2/27/2006 12/23/2005 NA 1/25/2006 NA 2/7/2006 NA NA 11/30/2005 12/28/2005 1/4/2006 12/13/2005 11/17/2005 NA NA NA 12/9/2005 12/1/2005 1/31/2006 10/14/2005 8/12/2005 NA 9/27/2005 9/14/2005 8/16/2005 12/2/2005 9/30/2005 NA 8/31/2005 7/29/2005 8/5/2005 8/2/2005 NA 10/6/2005 7/28/2005 8/11/2005 7/21/2005 Fairm ont Hotels & Resorts Sports Authority Inc Hughes Supply Inc Engelhard Corp Town & Country Trust Abgenix Inc Anteon International Corp CenterPoint Properties Trust General Maritime Corp Alam osa Holdings Inc NorthWestern Corp Beverly Enterprises Inc Scientific Atlanta Inc Georgia-Pacific Corp SERENA Software Inc La Quinta Corp Linens n Things Inc Amli Residential Ppty Trust Independence Cmnty Bk Corp,NY Nextel Partners Inc Adv Neuromodulations Sys Inc Shopko Stores Inc. IDX Systems Corp Spinnaker Exploration Co TBC Corp UICI Chiron Corp PanAm Sat Holding Corp York International Corp Metris Cos Inc Reebok International Ltd Priority Healthcare Corp US Unwired Inc NorthWestern Corp CRT Properties Inc Vicuron Pharmaceuticals Inc Wyndham International Inc Commercial Federal,Omaha, NE Gables Residential Trust Acxiom Corp Storage Technology Corp Titan Corp Overnite Corp Cuno Inc Renal Care Group Inc Neim an Marcus Group Inc Transkaryotic Therapies Inc Sun Gard Data Systems Inc Toys "R" Us Inc Acquiror Name National Grid PLC Blackstone Group LP Lafarge SA Colony Capital & Kingdom Holdings Investor Group Home Depot Inc BASF AG Magazine Acquisition GP LLC Amgen Inc General Dynamics Corp CalEast Industrial Investors FrontLine Ltd Sprint Nextel Corp. Black Hills Power Inc Fillmore Capital Partners LLC Cisco Systems Inc Koch Forest Products Inc Silver Lake Partners Blackstone Group LP Investor Group Prime Property Fund Sovereign Bancorp Inc,PA Sprint Nextel Corp St Jude Medical Inc Investor Group GE Healthcare Ltd Norsk Hydro ASA Sumitom o Corp of America Investor Group Novartis AG Intelsat Ltd Johnson Controls Inc HSBC Finance Corp adidas-Salomon AG Express Scripts Inc Sprint Corp Montana Public Power Inc DRA Advisors LLC Pfizer Inc Blackstone Group LP Bank of the West, CA Investor Group Value Act Capital Partners LP Sun Microsystems Inc L-3 Communications Hldg Inc UPS 3M Corp Fresenius Medical Care AG Investor Group Shire Pharmaceuticals Grp PLC Investor Group Investor Group Value of Deal (Smil) $11,317.99 3,428.78 2,796.26 3,900.00 1,371.13 3,475.66 4,995.4 1,470.96 2,262.89 2,100.87 3,288.12 1,804.07 4,353.26 1,973.10 1,913.96 5,323.97 20,460.05 1,086.90 2,940.56 1,267.84 1,959.83 3,656.88 7,545.33 1,203.12 1,145.51 1,264.06 2,544.97 1,091.05 1,719.09 6,067.87 6,271.11 3,113.87 1,592.98 4,288.05 1,192.43 1,324.84 1,904.11 1,557.89 1,791.47 3,099.42 1,340.33 2,425.88 2,588.17 3,139.84 2,652.48 1,293.33 1,402.81 3,998.12 5,193.99 1,346.72 10,844.35 6,114.41 1-day 16.08% 5.24 16.73 28.10 19.96 20.62 2.71 32.67 58.56 34.61 9.6 5.89 15.31 20.44 6.56 3.74 38.53 2.74 36.86 7.94 20.72 29.43 11.72 30.37 13.63 25.1 34.35 34 19.04 23.49 26.26 38.34 1.08 37.97 7.69 1.46 12.61 15.4 84.18 18.56 34.07 14.11 35.28 18.48 15.33 46.21 31.34 22.13 33.77 21.55 44.28 16.96 1-week 16.76% 5.45 17.18 40.58 26.01 26.98 20.44 32.28 57.34 30.68 9.43 5.43 19.27 23.81 5.66 10.54 46.79 7.29 33.14 14.89 22.72 30.8 15.76 22.77 16.23 33.57 44.33 34.36 17.08 27.4 26.26 36.14 0.54 37.94 9.29 4.34 13.64 17.15 78.64 19.79 34.76 19.47 32.98 18.29 25.82 35.79 34.73 26.64 37.38 38.11 41.5 21.64 1-month 16.02% 9.77 22.56 38.80 20.74 24 23.08 34.13 67.66 23.61 12.71 5.51 20.97 17.49 9.55 30.18 54.69 24.35 40.8 16.95 19.05 21.85 13.01 21.77 17.88 38.8 51.48 34.56 19.89 23.28 25.12 35.17 3.16 39.05 10.67 24.25 12.26 18.7 68.4 19.79 36.11 17.09 28.27 32.05 33.06 42.74 36.78 25.29 38.46 55.52 37.29 23.21 PROJECT PLATO 36#39APPENDIX Premiums paid (continued) Based on all 100% cash deals greater than $1bn 2004-present (86 deals) Target Name Acquiror Name Investor Group Insight Communications Co Inc United Defense Industries Inc Circuit City Stores Inc Date Announced Date Effective 3/7/2005 12/16/2005 3/7/2005 6/24/2005 2/15/2005 NA 2/4/2005 1/31/2005 12/19/2004 12/5/2 11/24/2004 11/19/2004 11/3/2004 11/1/2004 10/20/2004 10/19/2004 10/18/2004 9/29/2004 8/27/2004 8/24/2004 8/20/2004 7/22/2004 7/21/2004 7/13/2004 6/4/2004 5/24/2004 5/19/2004 5/18/2004 5/4/2004 5/3/2004 4/20/2004 4/15/2004 3/22/2004 3/15/2004 3/5/2004 2/17/2004 1/13/2004 Median Mean JPMorgan 9/16/2005 6/3/2005 4/20/2005 2/22/2005 4/27/2005 10/3/2005 7/1/2005 12/10/2004 12/22/2004 2/24/2005 11/12/2004 2/3/2005 12/21/2004 11/12/2004 12/23/2004 4/13/2005 10/18/2004 4/25/2005 7/28/2005 7/7/2004 7/8/2004 8/31/2004 8/4/2004 8/20/2004 5/21/2004 8/20/2004 11/1/2004 5/12/2004 10/26/2004 4/6/2004 John Q Hamm ons Hotels Inc Pulitzer Inc Kramont Realty Trust Sola International lonics Inc Hollywood Entertainment Corp Argosy Gaming Co Kaneb Services LLC Boca Resorts Inc Robert Mondavi Corp Select Medical Corp Orbitz Inc LNR Property Corp Price Legacy Corp Rouse Co AMC Entertainment Inc Texas Genco Holdings Inc National Processing Inc Mandalay Resort Group NeighborCare Inc A LARIS Medical Systems Inc Kroll Inc Charter One Finl,Cleveland, OH Keystone Property Trust PanAm Sat Corp Tom Brown Inc. US Oncology Inc Community First Bankshares, ND Extended Stay America Inc AT&T Wireless Services Inc TheraSense Inc BAE Systems North America Highfields Capital Mgmt LP Investor Group Lee Enterprises Inc Centro Watt America REIT III Investor Group GE Infrastructure Inc Movie Gallery Inc Penn National Gaming Inc Valero LP Blackstone Real Estate Advisor Constellation Brands Inc EGL Holding Co Cendant Corp Riley Property Holdings LLC PL Retail LLC General Growth Properties Inc Marquee Holdings Inc Investor Group Bank of America Corp MGM Mirage Inc Om nicare Inc Cardinal Health Inc Marsh & McLennan Cos Inc Citizens Financial Group,RI Investor Group Investor Group EnCana Corp Welsh Carson Anderson & Stowe BancWest Corp,Honolulu, HI Blackstone Group LP Cingular Wireless LLC Abbott Laboratories Value of Deal (Smil) $3,307.31 4,200.07 2,404.57 1,235.15 1,529.16 1,104.21 1,083.17 1,297.55 1,076.29 2,149.84 1,151.46 1,188.15 1,271.89 2,287.01 1,089.75 3,959.93 1,387.29 11,894.65 2,196.20 2,886.02 1,135.86 7,643.65 2,067.13 2,050.13 1,886.69 10,529.98 1,375.61 4,681.62 2,684.66 1,282.16 1,213.42 3,181.58 47,100.41 1,169.72 1-day 21.38% 28.73 19.47 2.96 1.75 17.03 26.63 47.9 13.44 16.39 37.93 27.93 49.9 26.58 34.47 6.73 0.69 33.37 13.64 28.36 -9.52 29.99 96.66 18.38 32.43 24.72 17.01 5 23.8 18.5 12.6 24.6 75.44 33 21.47% 24.18% 1-week 23.68% 37.06 18.38 20 -1.46 16.57 33.9 43.04 13.34 11.06 34.13 30.65 52.27 27.84 33.82 10.7 -0.16 38.32 35.89 42.16 -7.96 29.44 94.35 11.64 32.85 31.46 14.2 1.42 23.07 20.3 11.9 26.29 82.7 35.54 25.92% 26.21% 1-month 12.54% 46.63 19.55 18.22 -0.85 18.21 42.49 52.51 36.6 17.82 31.72 31.08 50.93 39.32 48.41 16.83 2.33 41.21 23.34 39.23 -8.75 34.9 44. 19 17.76 34.55 25.71 0.54 14.69 33.7 17.3 17.53 27.44 105.76 50 24.30% 28.38% PROJECT PLATO 37#40APPENDIX Premiums paid - LBO deals Based on all leveraged buyouts greater than $1bn 2004-present (27) Date Announced Date Effective 1/30/2006 NA NA NA NA NA 1/22/2006 12/19/2005 11/20/2005 11/10/2005 11/9/2005 11/8/2005 10/24/2005 10/3/2005 9/15/2005 6/17/2005 6/14/2005 6/7/2005 6/3/2005 5/2/2005 3/28/2005 3/17/2005 3/7/2005 2/15/2005 2/4/2005 12/5/2004 10/20/2004 7/21/2004 5/3/2004 4/20/2004 3/22/2004 3/5/2004 Median Mean JPMorgan 1/25/2006 NA 2/7/2006 12/28/2005 NA 9/27/2005 8/16/2005 9/30/2005 NA 10/6/2005 8/11/2005 7/21/2005 12/16/2005 NA 9/16/2005 3/22/2005 12/10/2004 4/13/2005 8/4/2004 8/20/2004 8/20/2004 5/12/2004 Target Name Fairmont Hotels & Resorts Sports Authority Inc Town & Country Trust Beverly Enterprises Inc SERENA Software Inc La Quinta Corp Linens n Things Inc Amli Residential Ppty Trust Shopko Stores Inc. UICI CRT Properties Inc Wyndham International Inc Gables Residential Trust Acxiom Corp Neiman Marcus Group Inc Sun Gard Data Systems Inc Toys "R" Us Inc Insight Communications Co Inc Circuit City Stores Inc John Q Hamm ons Hotels Inc Sola International Inc Boca Resorts Inc Texas Genco Holdings Inc Keystone Property Trust PanAm Sat Corp US Oncology Inc Extended Stay America Inc Acquiror Name Colony Capital & Kingdom Holdings Investor Group Magazine Acquisition GP LLC Fillmore Capital Partners LLC Silver Lake Partners Blackstone Group LP Investor Group Prime Property Fund Investor Group Investor Group DRA Advisors LLC Blackstone Group LP Investor Group ValueAct Capital Partners LP Investor Group Investor Group Investor Group Investor Group Highfields Capital Mgmt LP Investor Group Investor Group Blackstone Real Estate Advisor Investor Group Investor Group Investor Group Welsh Carson Anderson & Stowe Blackstone Group LP Value of Deal (Smil) $3,900.00 1,371.13 1,470.96 1,913.96 1,086.90 2,940.56 1,267.84 1,959.83 1,145.51 1,719.09 1,557.89 3,099.42 2,425.88 2,588.17 5,193.99 10,844.35 6,114.41 3,307.31 2,404.57 1,235.15 1,083.17 1,188.15 2,886.02 1,375.61 4,681.62 1,282.16 3,181.58 1-day 28.10% 19.96 32.67 6.56 2.74 36.86 7.94 20.72 13.63 19.04 15.4 18.56 14.11 35.28 33.77 44.28 16.96 21.38 19.47 2.96 26.63 27.93 28.36 17.01 5 18.5 24.6 19.47% 20.68% 1-week 40.58% 26.01 32.28 5.66 7.29 33. 14 14.89 22.72 16.23 17.08 17.15 19.79 19.47 32.98 37.38 41.5 21.64 23.68 18.38 20 33.9 30.65 42.16 14.2 1.42 20.3 26.29 21.64% 23.58% 1-month 38.80% 20.74 34. 13 9.55 24.35 40.8 16.95 19.05 17.88 19.89 18.7 19.79 17.09 28.27 38.46 37.29 23.21 12.54 19.55 18.22 42.49 31.08 39.23 0.54 14.69 17.3 27.44 19.89% 24.00% PROJECT PLATO 38#41APPENDIX Share price performance Historical price performance $80 70 60 50 40 30 20 10 0 1994 1995 1996 K-2 JPMorgan 1996 1997 1998 1999 2000 Peer Index 2001 Source: Tradeline Note: Peer index has been indexed to K-2 price, includes MGM, HET, WYNN, LVS, OEH, GET, HOT and HLT 2001 2002 www. 2003 K-2 $68.73 +348% Peers +235% 2004 2005 2006 PROJECT PLATO 39