J.P.Morgan Investment Banking
VALUATION 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
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