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EXPERT REPORT
The following pages contain a valuation analysis of Federal-Mogul Corporation (Federal-Mogul or the Company) prepared by Jefferies & Company, Inc. (Jefferies). The information contained in this presentation was based upon publicly available information obtained by Jefferies or information furnished by the Company. Jefferies has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information, and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fair in all respects. All budgets, projections, financial analyses, reports and other information with respect to Federal-Mogul and its respective subsidiaries operations contained herein have been prepared by the management of Federal-Mogul or are derived from such budgets, projections, financial analyses, reports and other information of Federal-Mogul which involves numerous and significant subjective determinations made by the management of Federal-Mogul. The estimates, budgets and projections contained herein may or may not be achieved and differences between projected results and those actually achieved may be material. With respect to Federal-Moguls financial projections examined by Jefferies, Jefferies assumed that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Federal-Mogul as to the future performance of Federal-Mogul. Jefferies valuation analysis assumes that operating results projected by the Company will be achieved in all material respects. To the extent that the valuation is dependent upon the Companys achievement of its projections, the valuation must be considered speculative. It should be understood that, although subsequent developments may affect Jefferies conclusions, Jefferies does not have any obligation to update, revise or reaffirm its estimates. Neither Jefferies nor any of its advisors or accountants take any responsibility for the accuracy or completeness of any of the accompanying material. Jefferies has not been requested to, and did not make an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise), solvency or financial condition of Federal-Mogul or any of its respective subsidiaries or affiliates, nor has Jefferies been furnished with any such evaluations or appraisals. The preparation of the material contained herein involves various determinations as to the most appropriate and relevant methods of financial analyses and the application of those methods to particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Furthermore, Jefferies did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Jefferies analyses must be considered as a whole. Considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the conclusions expressed herein. In its analyses, Jefferies made many assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Federal-Mogul. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth herein. Based on Jefferies' work in this case and the accuracy of Federal-Mogul management's recent projections, Jefferies believes there is no valid reason to question the reasonableness of Federal-Mogul's budgets, projections and other financial analyses relied upon herein.
TABLE OF CONTENTS
TAB
Jefferies Qualifications....................................................................................................................... 1 Executive Summary ........................................................................................................................... 2 Valuation Analysis.............................................................................................................................. 3 Appendix ............................................................................................................................................ 4 Comparable Company Valuation Analysis ................................................................................A Comparable M&A Transaction Valuation Analysis....................................................................B Discounted Cash Flow Valuation Analysis ................................................................................C Restructured Debt Discount Analysis ........................................................................................D
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JEFFERIES QUALIFICATIONS
JEFFERIES QUALIFICATIONS
Background
Jefferies is optimally positioned to opine on Federal-Moguls value due to the depth and breadth of its knowledge of securities valuation, restructuring and the public markets
SECURITIES AND VALUATION CREDENTIALS Jefferies is one of the leading traders / market makers of equities in the United States #1 volume trader of NASDAQ stocks(1) Trader of 13% of NYSE(1) Jefferies has led or co-managed over $5.1 billion in 39 separate IPOs and secondary equity offerings YTD 2004 #10 in mergers and acquisitions (M&A) transactions under $500 million(2) #1 ranked underwriter in 2002 to first half 2004 domestic single B new issues under $150 million POST-RESTRUCTURING EQUITIES CREDENTIALS #1 trader of post restructuring equities One of the only firms to have dedicated equity research analysts for post-restructuring sector One of the only firms to have dedicated, integrated end-to-end post-restructured equities trading and market making capabilities
(1) (2)
Source: Autex. For the period July 1, 2003 June 30, 2004. Source: Mergerstat. All announced U.S. based deals with transaction value of less than $500 million for 2003. Excludes certain transactions such as privatizations, buybacks, open market purchases, joint ventures, litigations, alliances and collars; full credit to each advisor. 2
JEFFERIES QUALIFICATIONS
Jefferies is an industry expert at trading and valuing post-reorganization equity securities
Jefferies powerful sales and trading platform and distribution are key to its capabilities 125 account execs cover over 2,000 institutional accounts, among largest on the Street Ranked #1 in the trading and execution of small cap stocks according to 2001 Reuters Survey Jefferies Execution Services handles approximately 13% of the reported trading volume on the NYSE Makes markets in nearly 3,000 stocks Top 5 trader in over 2,000 Nasdaq stocks (AutEx, LTM June 30, 2004) Over 100 research professionals follow more than 750 companies, including Federal-Moguls sector Jefferies is an industry expert at trading and valuing post-reorganization equity securities The firm has strong standing in special situations and Bulletin Board trading A leading trader of distressed and post Chapter 11 debt and equity securities Farukh Z. Farooqi, Post-Reorganization Equity Analyst, and Joseph Von Meister, Senior Analyst of Distressed and Special Situations, specialize in sector
JEFFERIES QUALIFICATIONS
Jefferies dominates the trading of post-Chapter 11 equity securities
Company
Alderwoods Group Anacomp Arch Wireless Assisted Living Carmike Cinemas Chiquita Brands Dade Behring Factory Card Outlet Genesis Health Joy Global Kindred Health Kmart Holding Corp McLeodUSA Motient Corp. Pathmark Stores Pillowtex Corp. Sun Healthcare Washington Grp.
Ticker
AWGI ANCPA AWIN ASLC CKEC CQB DADE FCPO GHVI JOYG KIND KMRT MCLD MNCP PTMK PWTXQ SUNH WGII
Jefferies Trading Rank (Date of First Trade through September 30, 2004)
2 1 1 2 2 4 1 3 1 1 3 1 6 1 1 2 4 2
(1)
JEFFERIES QUALIFICATIONS
Bill Derrough Biography
William Q. Derrough is Managing Director, Co-head of Jefferies Recapitalization and Restructuring Group and Head of the firms New York investment banking office where he oversees all investment banking activities. At Jefferies, Mr. Derrough works with a diverse group of clients and investors in a wide range of industries. Since joining Jefferies in early 1998, Mr. Derrough has been actively involved in over 40 restructurings, recapitalizations, financings, M&A and other transactions Prior Professional Experience Doyle & Boissiere, Principal (1997 1998) Chanin and Company, Senior Vice President (1991 1997) Salomon Brothers, Financial Analyst (1988 1991) Education and Affiliations BA from University of California, Berkeley Co-Chair, American Bankruptcy Institutes Investment Banker Program Securities Licenses and Memberships NASD Series 7 General Securities Representative Series 63 State Agent Series 24 General Securities Principal Philadelphia Stock Exchange, Pacific Stock Exchange General Securities Representative
JEFFERIES QUALIFICATIONS
Bill Derrough Biography (Contd)
Mr. Derrough has served as investment banker in a number of restructurings, financings and M&A transactions, including:
Jefferies & Company, Inc. (1998 present)
AmeriServe Food Distribution Co. (food distributor) Anacomp, Inc. (data management) CHS Electronics (computer distributor) Cone Mills Corporation (textile manufacturing) pending CyberCash (online bill payment) Decora Industries, Inc. (consumer products) Einstein/Noahs Bagel Corp. (restaurants) Electronic Retailing Solutions, Inc. (wireless retail shelf labeling; self-checkout) Enterprises Shipholding Corporation (refrigerated and container ships) Envirosource Corp. (steel services and waste management) Ermis Maritime Holdings (shipping) Farrell Lines, Inc. (U.S. flag container shipping) Federal-Mogul Corporation (automotive parts manufacturer) pending Fitzgeralds Gaming Corporation (casino hotels) Formica Corporation (building materials) Ft. Worth Tower (communications tower manufacturing) Globalstar (satellite telecommunications) Golden Books Family Entertainment (childrens publishing and media) Golden Ocean Group, LTD. (oil tankers) Heartland Wireless Communications (broadband wireless TV and internet) Hvide Marine (maritime) ICO Global Communications Ltd. (satellite communications) ICO Teledesic Global Ltd. (satellite communications) International Wireless Communications (developing country wireless telephony) Kellstrom Industries (aviation parts) LLS Corporation (injection molded closures and containers) Long Distance International (international long distance network) Loral Space & Communications, Ltd. (satellite manufacturer and service provider) pending MobileMedia Corporation (wireless messaging) Net2000 (CLEC) NextWave Communications (PCS wireless telephony) Orbital Sciences Corporation (satellite manufacturer and services provider) Orius Corp. (telecom infrastructure) Pliant Systems (telecom equipment manufacturer) Russell-Stanley (plastic and steel containers) Specialty Foods Corporation (bakery and meat products) Startec Communications (international long-distance telecom provider) Sunterra (timeshare/real estate) Trans Texas Corporation (oil & gas exploration, gas distribution and oil refining) TSR Wireless Communications (paging and wireless telephony) Vlasic Foods (branded food manufacturer) XO Communications (CLEC)
JEFFERIES QUALIFICATIONS
Bill Derrough Biography (Contd)
Chanin and Company (1991 1997)
Ames Department Stores (retailer) Anacomp (data storage and imaging) Angeles Corp. (real estate) Angeles Participating Mortgage Trust (mortgage REIT) Angeles Mortgage Investment Trust (mortgage REIT) Burlington Motor Holding (trucking) Carter Hawley Hale Stores (department stores) C&R Clothiers (mens apparel) Cherokee (casual apparel manufacturer) Evergreen International Aviation (air cargo) International Paging Corporation (paging) KDI Corporation (manufacturing) Kerr Group (plastic closure manufacturing) Morrison Knudsen Corporation (engineering and construction) Northern Automotive Corporation (auto parts retailer) Orange County, California (municipality) Resorts International (casino-hotels) Scott Cable Communications (rural cable television systems) Sea Life Park (marine mammal amusement park) Strategic Partners (medical uniforms)
JEFFERIES QUALIFICATIONS
Bill Derrough Expert Testimony
Cases in which Mr. Derrough testified as an expert at trial:
Company Cherokee, Inc. MobileMedia Corporation Heartland Wireless Communications, Inc. VF Brands, Inc. (Vlasic Foods) Cych, Inc., et al. (Cybercash) Pliant Systems, Inc. Golden Books Family Entertainment, Inc. Globalstar L.P. Formica Corporation Exide Technologies Filing Date 4/23/93 1/30/97 12/4/98 1/29/01 3/2/01 5/1/01 6/4/01 2/15/02 3/5/02 4/15/02 Case Number 93-00467-HSB 97-00175-PJW 98-02692-PJW 01-00285-MFW 01-00622-MFW 01-01264 01-01920-MFW 02-10504-PJW 02-10969-BRL 02-11125-KJC Judge Helen S. Balick Peter J. Walsh Peter J. Walsh Mary F. Walrath Mary F. Walrath A. Thomas Small Mary F. Walrath Peter J. Walsh Burton R. Lifland Kevin J. Carey Court U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Eastern District of North Carolina U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Delaware U.S. Bankruptcy Court - Southern District of New York (Manhattan) U.S. Bankruptcy Court - Delaware
JEFFERIES QUALIFICATIONS
Michael Henkin Biography
Michael Henkin is Senior Vice President of Jefferies Investment Banking Department with over 12 years of investment banking and operational experience. Mr. Henkin has significant expertise in restructuring advisory with distressed companies, representing both debtors and creditors in a wide range of industries, including communications, technology, manufacturing, services and consumer. Mr. Henkin has been with Jefferies for over six years (1991 1994, 2001 present) and has executed and closed over 30 transactions, including more than ten Chapter 11 cases (and foreign equivalents) and numerous public / private financings, M&A and other corporate finance assignments Prior Professional Experience NextEngine, President and Chief Operating Officer (1999 2001) Loral Space & Communications, Senior Vice President, Business Development and Director, Operations Planning (1998 1999) News Corporation, Vice President, Business Development (1995 1998) Education Stanford Graduate School of Business, MBA and Global Management Certificate (1996) University of California, Los Angeles, BA in Economics / Business, Summa Cum Laude, Phi Beta Kappa (1990) Musicians Institute, Guitar Institute of Technology (1991) Securities Licenses NASD Series 7 General Securities Representative Series 63 State Agent
JEFFERIES QUALIFICATIONS
Michael Henkin Biography (Contd)
Mr. Henkin has served as investment banker in a number of restructurings, financings and M&A transactions, including:
Jefferies & Company, Inc. (1991 1994, 2001 Present)
Ballys Park Place, Inc. (casino / lodging operator) BTI Telecom Corporation (telecommunications services company) CHC Helicopter Corporation (commercial helicopter operator) Cherokee, Inc. (apparel marketer and licenser) DDI Corp. (electronics developer and manufacturer) Earthlink, Inc. / OmniSky Corp. (internet and wireless services) Exide Technologies (battery manufacturer) Federal-Mogul Corporation (automotive parts manufacturer) pending Jordon Industries, Inc. (multiple-industry holding company) Kash n Karry Food Stores, Inc. (supermarket operator) Liggett Group Inc. (tobacco distributor) Loral Space & Communications Ltd. (satellite manufacturer and service provider) pending
Microcell Telecommunications, Inc. (wireless services provider) Mpower Holding Corp. (telecommunications service provider) Orbital Sciences Corp. / Orbital Imaging Corp. (satellite manufacturer and service provider) Orchard Supply Hardware Stores Corporation (retailer) Philip Services Corp. (environmental and metal services) Rhythms NetConnections, Inc. (telecommunications service provider) Seattle Lighting (lighting distributor and retailer) Terex Corporation (heavy equipment manufacturer) Transeastern Properties, Inc. (homebuilder) Trans-Resources, Inc. (agricultural and industrial chemicals manufacturer) Wilrig AS (offshore oil rig operator)
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JEFFERIES QUALIFICATIONS
Michael Henkin Expert Testimony
Cases in which Mr. Henkin testified as an expert at trial:
Company Philip Services Corp. Loral Space & Communications Ltd. Filing Date 6/2/2003 7/15/2003 Case Number 03-37718-H2-11 03-41710 Judge Court Wesley W. Steen U.S. Bankruptcy Court - Southern District of Texas, Houston Division Robert D. Drain U.S. Bankruptcy Court - Southern District of New York
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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Introduction
This presentation, among other things, analyzes various valuation and comparison methodologies using public data including: Comparable Company Analysis Comparable M&A Transaction Analysis Discounted Cash Flow Analysis Jefferies used methodologies in each analysis substantially similar in approach to those used throughout Jefferies Investment Banking Department for pricing equity transactions, valuing transactions for fairness opinions, advising in mergers and acquisitions and other similar transactions The valuation analysis in this presentation is based upon the Companys business plan and other financial information provided by the Company and its financial advisor By using supporting data from various analyses, we conclude that there is substantial value for unsecured claims as of December 31, 2004, the projected bankruptcy exit date (the Effective Date) Yields and securities pricing presented herein are as of September 30, 2004, unless otherwise indicated The valuation analysis and conclusions contained herein have been presented to the Jefferies Restructuring Valuation Committee (the Jefferies Committee) and reflects the unanimous consent of the Jefferies Committee
13
EXECUTIVE SUMMARY
Objective and Scope
Jefferies prepared a valuation analysis of the business enterprise of Federal-Mogul and its operating subsidiaries assuming an exit from bankruptcy as of the Effective Date In determining its opinion as to the estimated range of value for Federal-Mogul, Jefferies performed the following due diligence: Review of the operations of Federal-Moguls key business units Review of managements financial forecast for fiscal years 2004E to 2007P including various supporting schedules and information Review of the assumptions underlying managements four-year plan, as well as risk factors and opportunities that could impact expected performance Discussions with various senior managers with respect to the business operations and the four-year plan Analysis of the industry, the Companys key competitors, and trends in the environment in which Federal-Mogul operates Analysis of financial information of key competitors and/or similar publicly-traded companies to determine appropriate valuation multiples Analysis of the performance and market position of the Company relative to its key competitors and/or similar publicly-traded companies Analysis of precedent transactions in the industry to determine prices paid for assets, business lines and/or companies similar to Federal-Mogul to determine appropriate valuation multiples; and Preparation of such other analyses as Jefferies deemed appropriate
14
EXECUTIVE SUMMARY
Valuation Conclusions as of the Effective Date
Based on Jefferies' valuation analysis, we have concluded that the range of Enterprise Value is $4.1 billion to $4.3 billion, as set forth herein Based on Jefferies' valuation analysis, we have concluded that the range of Equity Value to Noteholders is $0.9 billion to $1.0 billion, as set forth herein
15
EXECUTIVE SUMMARY
Summary Enterprise Valuation Analysis as of the Effective Date
($ in Millions)
Comparable Company Analysis $3,121 Comparable M&A Transaction Analysis $4,183 Discounted Cash Flow Analysis $4,624 Concluded Range of Valuation $4,054 $3,000 $3,500 $4,000 $4,336 $4,500 $5,000 $5,500 $4,962 $4,449 $3,320
Based on Jefferies weighting of 55% for the Discounted Cash Flow Analysis, 35% for the Comparable Company Analysis and 10% for the Comparable M&A Analysis, we believe the range of Enterprise Value for Federal-Mogul is $4.1 to $4.3 billion
16
EXECUTIVE SUMMARY
Conclusion of Value as of the Effective Date
($ in Millions)
Jefferies analyses produced enterprise values ranging from $4.1 billion to $4.3 billion Pro forma capitalization is based on current estimates from Federal-Mogul and other Plan Proponents(1)
Estimated as of December 31, 2004 Low High
Estimated Enterprise Value Pro Forma Capitalization New Exit Revolver New Exit Term Loan New Tranche A Senior Secured Term Loans, net of discount New Junior Secured PIK Notes, net of discount Reduction in Equity Value Arising from Proposed UK Settlement(2) Vendor Note Foreign Debt Total Debt Plus: Excess Cash(3) RESIDUAL EQUITY VALUE
(1) (2)
$ $
$ $
(3)
The Plan Proponents consist of the Company, the Official Committee of Unsecured Creditors, the Asbestos Claimants Committee, JP Morgan Chase Bank as the administrative agent for the holders of pre-petition bank claims, the Future Claimants Representative and the Official Committee of Equity Security Holders. Pursuant to the terms of the recently proposed UK settlement, the T&N Pension Scheme would be assumed by the Company and conditions would apply related to the funding of the T&N Pension Scheme (the "Proposed UK Settlement"). For purposes of this valuation, we have assumed the Proposed UK Settlement is implemented, and we estimate an equity valuation impact of the Proposed UK Settlement as it relates to the T&N Pension Scheme to be approximately $200 million. Net of $160 million minimum operational cash balance and includes approximately $40 million note receivable from the Trust. 17
EXECUTIVE SUMMARY
Equity Value to Noteholders as of the Effective Date
($ in Millions)
Residual Equity Value Black Scholes Warrant Valuation Equity Value, net of Warrant Value Equity Value to Noteholders (49.9%)
1,837 21 1,816
2,119 30 2,089
906
1,042
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EXECUTIVE SUMMARY
Valuation of Warrants for Pre-Petition Equity Holders
($ in Millions, Except Per Share Data)
Concluded Equity Value Aggregate Common Stock Value Stock Price Shares Outstanding Warrant Strike Price Risk-Free Rate (Seven-year Treasury) Volatility per Annum Term of Warrants Price of a Call Number of Warrants Total Value of Warrants
$ $ $
$ $ $
100,000,000
100,000,000
$ $
3.08 6,951,872 21
$ $
4.26 6,951,872 30
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EXECUTIVE SUMMARY
Recovery to Non-Noteholder U.S. Unsecured Claims
($ in Millions)
$ $
Assuming the maximum amount of allowed claims, the Non-Noteholder U.S. Unsecured claim holders will receive $30.1 million on the Effective Date, $30.1 million one year after the Effective Date and the remaining $30.1 million two years after the Effective Date
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EXECUTIVE SUMMARY
Selected Historical and Projected Financial Data(1)(2)
($ in Millions)
2002A Sales % Growth of Sales Gross Margin % of Sales Selling, General and Admin. Expenses % of Sales Other Expenses / (Income) Amortization EBIT(3) % of Sales EBITDA(4) % of Sales Capital Expenditures
(1) (2)
2003A $ 5,546 7.0% 1,175 21.2% 872 15.7% (44) 17 329 5.9% 637 11.5% 301 $
2004E 5,886 6.1% 1,214 20.6% 903 15.3% (41) 17 335 5.7% 664 11.3% 298 $
2005P 5,935 0.8% 1,246 21.0% 898 15.1% (40) 17 372 6.3% 683 11.5% 297 $
2006P 6,089 2.6% 1,404 23.1% 879 14.4% (42) 17 550 9.0% 860 14.1% 299 $
2007P 6,230 2.3% 1,450 23.3% 859 13.8% (43) 17 617 9.9% 929 14.9% 292
5,184 1.8% 1,048 20.2% 817 15.8% (21) 14 238 4.6% 512 9.9% 339
(3) (4)
Financial projections assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries. 2002A-2004E results are presented pro forma for certain fresh start accounting adjustments relating to pension expense. Excluding these adjustments, EBITDA for 2002A, 2003A and 2004E would be $485 million, $549 million and $585 million, respectively. 2005P-2007P results are presented with fresh start accounting adjustments relating to pension expense, inventory and health insurance (FAS 106) and assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries. EBIT is defined as earnings before interest, income taxes, extraordinary items and certain nonrecurring items such as restructuring and impairment charges, Chapter 11 and Administration related reorganization expenses and gains or losses on the sales of businesses. EBITDA is defined as EBIT plus depreciation and amortization.
21
VALUATION ANALYSIS
VALUATION ANALYSIS
Valuation Methodology
While several generally accepted valuation techniques for estimating enterprise value were considered, Jefferies primarily considered three methodologies: Comparable Company Analysis, Comparable M&A Transaction Analysis and Discounted Cash Flow Analysis Comparable Company Analysis Evaluates the current multiples of comparable public companies and applies those multiples to the operating results of the subject company Comparable M&A Transaction Analysis Evaluates the trading multiples of comparable public company merger and acquisition transactions and applies those multiples to the operating results of the subject company Discounted Cash Flow Analysis Evaluates the projected operating results of the subject company and discounts its future cash flows to present value at a required rate of return Jefferies believes the EBITDA multiple is the most appropriate measure in determining the multiple-based valuation analyses because EBITDA is used as an approximation of unlevered operating cash flow and is an operating metric commonly used by the market to value companies in this industry sector Jefferies used adjusted operating data for 2004E-2007P to: Account for the impact of certain fresh start adjustments related to inventory, pension expense and health insurance (FAS 106); and Reflect the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries
23
VALUATION ANALYSIS
Weighting Methodology
Jefferies believes weighting the Discounted Cash Flow Analysis at 55% of the concluded valuation range is appropriate because this analysis reflects the Company's expected improvement in future performance after realizing further benefits of the restructuring initiatives implemented during the Companys Chapter 11 proceedings Jefferies believes the Company's current financial performance is impacted by the reorganization. Since the Comparable Company Analysis values Federal-Mogul based upon current financial performance, Jefferies believes a 35% weighting of the Comparable Company Analysis in the concluded valuation range appropriately takes into consideration the effects of the Companys restructuring initiatives Jefferies believes weighting the Comparable M&A Transaction Analysis at 10% is appropriate because of the limited number of recent comparable M&A transactions and the inclusion of older transactions since 1998
24
VALUATION ANALYSIS
Comparable Company Valuation Analysis
($ in Millions)
Comparable companies operating data have been adjusted to exclude unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Moguls fresh start adjusted operating data The following multiples were chosen for comparison on a latest twelve month period (LTM) ended June 30, 2004 basis Enterprise values are calculated using mean and median multiples applied to Federal-Moguls estimated 2004 results Jefferies attributes a 35% weighting for the Comparable Company Analysis in the Concluded Range of Valuation
Enterprise Value / LTM Revenue EBITDA EBIT Free Cash Flow(1)
High Low Trimmed Mean(2) Mean Median Projected Bankruptcy Exit Date As of 12/31/04 2004E Operating Data Implied Enterprise Value Mean(3) Implied Enterprise Value Median(3)
(1) (2) (3)
Free cash flow is defined as EBITDA minus capital expenditures. Trimmed mean is defined as the average of the values, excluding the highest and lowest values. If enterprise value was calculated using an estimate of excess cash for the comparable companies, the Enterprise Value / LTM EBITDA median and mean multiples would be 4.9x and 5.2x, respectively. Implied enterprise value based upon the Enterprise Value / LTM EBITDA median and mean multiples assuming an adjustment for excess cash would be $3.3 billion and $3.5 billion, respectively. These calculations use a definition of excess cash as book value cash less minimum required cash. Minimum required cash equals the lessor of: book value cash as of prior year end, current book value cash or 1.5% of sales.
Applying EBITDA multiples as of the Projected Bankruptcy Exit Date, the Comparable Company Analysis suggests an Enterprise Value range of $3.1 to $3.3 billion
25
VALUATION ANALYSIS
Comparable M&A Transaction Valuation Analysis
($ in Millions)
The following multiples were chosen for comparison based on the LTM period prior to the announcement of each of the selected transactions Enterprise values are calculated using mean and median multiples applied to Federal-Moguls estimated 2004 results Jefferies attributes a 10% weighting for the Comparable M&A Transaction Analysis in the Concluded Range of Valuation
Enterprise Value / LTM Revenue EBITDA EBIT Free Cash Flow(1)
High Low Trimmed Mean(2) Mean Median Projected Bankruptcy Exit Date As of 12/31/04 2004E Operating Data Implied Enterprise Value Mean Implied Enterprise Value Median
(1) (2)
Free cash flow is defined as EBITDA minus capital expenditures. Trimmed mean is defined as the average of the values, excluding the highest and lowest values.
Applying EBITDA multiples as of the Projected Bankruptcy Exit Date, the Comparable M&A Transaction Analysis suggests an Enterprise Value range of $4.2 to $4.4 billion
26
VALUATION ANALYSIS
Discounted Cash Flow Valuation Analysis Overview of Calculation
Enterprise Value was estimated by adding the following: The discounted value of the Companys annual projected distributable cash flows (cash flows available to all investors), and The discounted terminal value for the Company (the value of the Company beyond the definitive time period) Distributable Cash Flows Calculated using projected annual operating income plus depreciation and amortization plus net changes in working capital less projected capital expenditures less restructuring payments plus the net impact of pensions and other assets/liabilities Terminal Value The terminal value was calculated by using EBITDA multiples ranging from 6.0x to 6.5x Jefferies utilized this EBITDA multiple range after taking into consideration the results of both the Comparable Company Analysis and the Comparable M&A Transaction Analysis Discount Rate The Companys cash flows and terminal value were discounted to present values at a weighted average cost of capital (WACC) of 11.0 % to determine enterprise value
27
VALUATION ANALYSIS
Discounted Cash Flow Valuation Analysis
The following enterprise values were determined based on a Discounted Cash Flow Analysis Jefferies attributes a 55% weighting for the Discounted Cash Flow Analysis in the Concluded Range of Valuation
Terminal EBITDA Multiple Projected Bankruptcy Exit Date 12/31/2004 6.0x 6.5x
$ $ $
$ $ $
Applying a discount rate range of 11.0% and a terminal multiple range of 6.0x to 6.5x, the Discounted Cash Flow Analysis suggests an Enterprise Value range of $4.6 to $5.0 billion
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APPENDIX
Criteria
Relevant Industry Sector(2) Sales Greater Than Or Equal to $1.0 Billion Relevant Product Focus Excludes Bankruptcy / No Operations Relevant Customer Concentration / Mix(3) Public Companies
(1) (2)
74 28 20 18 16 14
Reflects cumulative number of companies that satisfy criteria including criteria on previous lines. Reflects companies within the following SIC codes: 3465: Automotive Stampings 2396: Automotive Trimmings, Apparel Findings and Related Parties 3594: Fluid Power Pumps and Motors 3714: Motor Vehicle Parts and Accessories 5013: Motor Vehicle Supplies and New Parts
(3)
31
American Axle & Manufacturing Holdings, Inc. is a global Tier I supplier to the automotive industry. The Company manufactures, engineers, designs and validates driveline systems and related powertrain components and modules for light trucks, sport utility vehicles (SUVs) and passenger cars. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. The Company's driveline and related powertrain products include axles, modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and forged products. The Company is the principal supplier of driveline components to General Motors Corporation (GM) for its rear-wheel drive light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and front four-wheel-drive/all-wheel-drive axle requirements for these vehicle platforms in 2003. ArvinMeritor, Inc. is a global supplier of a range of integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers (OEMs) and certain aftermarkets. The Company also provides coil-coating applications to the transportation, appliance, construction, heating, ventilation and air conditioning, and doors industries. ArvinMeritor serves OEM customers worldwide, including truck OEMs, light vehicle OEMs, trailer producers and specialty vehicle manufacturers and certain aftermarkets. BorgWarner, Inc. is a global Tier I supplier of highly engineered systems and components, primarily for vehicle powertrain applications. The Company's products fall into five operating segments: Morse TEC, Air/Fluid Systems, Cooling Systems, TorqTransfer Systems and Transmission Systems. These products are manufactured and sold worldwide, primarily to OEMs of passenger cars, sport utility vehicles, trucks and commercial transportation products. The Company operates manufacturing and technical facilities in 43 locations in 14 countries serving customers in North America, South America, Europe and Asia, and is an original equipment supplier to major automotive OEMs worldwide. Collins & Aikman Corporation is engaged in the design, engineering and manufacturing of automotive interior components, including instrument panels, fully assembled cockpit modules, floor and acoustic systems, automotive fabric, interior trim and convertible top systems. Sales are diversified among all North American OEMs, transplants such as Toyota, Honda and Nissan and major Tier I integrators. The Company has more than 115 plants and facilities worldwide and conducts all of its operating activities through its wholly owned subsidiary, Collins & Aikman Products Co. The Company markets the majority of its products to customers through a single global commercial operations group that supplies products from four primary categories: plastic components and cockpits, carpet and acoustics, automotive fabrics and convertible top systems. Dana Corporation is an independent supplier of modules, systems and components for light, commercial and off-highway vehicle OEMs globally and for related OEM service customers. Its products are used in passenger cars and vans, sport-utility vehicles, light, medium and heavy trucks and a wide range of off-highway vehicles. In addition, Dana is an aftermarket supplier in the North American market. Nearly all of its aftermarket operations have been conducted through the Automotive Aftermarket Group (AAG). In December 2003, the Company announced its intention to sell substantially all of the AAG. The remaining portion of the AAG, which distributes engine hard parts, has become a part of Dana's engine and fluid management operations. The Company's continuing operations are organized into three market-focused strategic business units: Automotive Systems Group, Engine and Fluid Management Group and Heavy Vehicle Technologies and Systems Group. On July 9, 2004, Cypress Group agreed to purchase the AAG from the Company for approximately $1.1 billion. The transaction is currently pending. Operating results present the AAG as a discontinued operation.
ArvinMeritor, Inc.
BorgWarner, Inc.
Dana Corporation
32
Eaton Corporation
33
Visteon Corporation
34
Enterprise Value(2) 6.6 $ 2,014.7 2,768.9 2,855.1 1,870.9 4,406.5 7,499.9 1,082.1 11,179.6 5,496.8 5,818.3 1,803.3 1,118.4 4,508.6 1,933.4
122.0 144.0 11.0 498.0 666.0 134.4 289.0 148.8 1,958.0 166.0 192.9 534.0 1,010.0
(1) Represents book value of cash. If an assumption for estimating the amount of excess cash on hand for the comparable companies were made, enterprise values would be higher by the amount of the implied minimum required cash. See page 25, footnote 3. (2) Enterprise Value is defined as market capitalization plus total debt plus preferred stock less book value cash. Where available, market values of debt (if less than par) and equity securities have been used.
35
(1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul's "fresh start" adjusted operating data. (2) Free cash flow is defined as EBITDA minus capital expenditures. (3) Trimmed mean is defined as the average of the values, excluding the high and low values.
36
(1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul's "fresh start" adjusted operating data. (2) Free cash flow is defined as EBITDA minus capital expenditures. (3) Trimmed mean is defined as the average of the values, excluding the high and low values.
37
Criteria for selecting transactions include: Relevant industry sector: SIC codes 2396, 5013, 3465, 3594 and 3714 Announced on or after June 30, 1998 Domestic transactions Target company sales greater than or equal to $1 billion Majority stake acquired
LTM at Time of Acquisition Cooper Automotive Aeroquip-Vickers United Technologies Automotive Arvin Industries, Inc. MascoTech, Inc. Textron Automotive Trim The Torrington Company TRW, Inc. - Automotive Parts (4) Dana Corporation (Automotive Aftermarket Group) $ Revenue 1,850.2 2,149.5 2,962.0 3,220.3 1,696.2 1,622.8 1,196.3 10,433.0 2,070.0 $ EBITDA 290.7 271.0 295.0 301.5 304.8 174.4 147.9 989.0 145.1 EBIT $ 206.7 191.4 169.0 186.0 221.5 102.9 98.9 511.0 96.7 $ FCF
(2)
EBITDA Margin 15.7% 12.6% 10.0% 9.4% 18.0% 10.7% 12.4% 9.5% 7.0%
EBIT Margin 11.2% 8.9% 5.7% 5.8% 13.1% 6.3% 8.3% 4.9% 4.7%
FCF Margin 12.3% 6.0% 3.4% 5.1% 11.0% 4.9% 8.9% 5.5% NA
(1) Reflects LTM data available at time of acquisition. Excludes unusual or non-recurring charges. (2) Free cash flow is defined as EBITDA minus capital expenditures. (3) Trimmed mean is defined as the average of the values, excluding the high and low values. (4) Transaction is still pending.
39
Criteria for selecting transactions include: Relevant industry sector: SIC codes 2396, 5013, 3465, 3594 and 3714 Announced on or after June 30, 1998 Domestic transactions Target company sales greater than or equal to $1 billion Majority stake acquired
Date Announced 8/17/98 2/1/99 3/16/99 4/6/00 8/2/00 8/7/01 10/16/02 11/17/02 7/9/04 Target Cooper Automotive Aeroquip-Vickers United Technologies Automotive Arvin Industries, Inc. MascoTech, Inc. Textron Automotive Trim The Torrington Company TRW, Inc. - Automotive Parts Dana Corporation (Automotive Aftermarket Group)(4) Acquiror Federal-Mogul Corp. Eaton Corp. Lear Corp. Meritor Automotive, Inc. Heartland Industrial Partners LP Collins & Aikman Corp. Timken Co. Blackstone Group Cypress Group $ Transaction Value 1,900.0 1,986.0 2,305.4 1,116.6 2,053.0 1,208.4 829.3 4,725.0 1,100.0 Revenues 1.0x 0.9x 0.8x 0.3x 1.2x 0.7x 0.7x 0.5x 0.5x Transaction Value / EBITDA(2) 6.5x 7.3x 7.8x 3.7x 6.7x 6.9x 5.6x 4.8x 7.6x EBIT 9.2x 10.4x 13.6x 6.0x 9.3x 11.7x 8.4x 9.2x 11.4x FCF(3) 8.4x 15.4x 23.1x 6.8x 11.0x 15.3x 7.7x 8.2x NA
(1) Trimmed mean is defined as the average of the values, excluding the high and low values. (2) Reflects LTM data available at time of acquisition. Excludes unusual or non-recurring charges. (3) Free cash flow is defined as EBITDA minus capital expenditures. (4) Transaction is still pending.
40
(1) Excludes tax shield resulting from interest expense, assuming 35% tax rate. (2) Reflects adjusted EBITDA which excludes the impact of fresh start adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries. (3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.
42
(1) Excludes tax shield resulting from interest expense, assuming 35% tax rate. (2) Reflects adjusted EBITDA which excludes the impact of fresh start adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries. (3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.
43
Be Rm Rc Rf Ke kd t Kd
10.0%
11.0%
(1) Long-horizon expected equity risk premium. Per Ibbotson Associates. Stocks, Bonds, Bills and Inflation Valuation Edition 2003 Yearbook. (2) Excludes peer companies with an average trading volume over the past six months of less than 100,000. (3) For pre-tax cost of debt detail, see page 46. (4) Assumed Federal-Mogul tax rate per Federal-Mogul management.
44
Company American Axle & Manufacturing Holdings, Inc. Arvinmeritor, Inc. BorgWarner, Inc. Collins & Aikman Corp. Delphi Corporation Dana Corporation Dura Automotive Systems, Inc. Eaton Corporation Lear Corporation, Inc. Magna International, Inc. Tenneco Automotive, Inc. Tower Automotive, Inc. Visteon Corporation
Ticker AXL ARM BWA CKC DPH DCN DRRA ETN LEA MGA TEN TWR VC Mean Median Trimmed Mean(3) High Low
Beta Levered (2) 1.08 1.08 1.14 1.11 1.14 1.60 1.42 1.13 1.11 0.87 2.13 1.61 1.29 1.29 1.14 1.25 2.13 0.87
(1) Excludes TRW Automotive due to lack of trading history and available data. (2) Two-year adjusted beta per Bloomberg, Inc. (3) Trimmed mean is defined as the average of the values, excluding the high and low values. (4) Excludes peer companies with an average trading volume over the past six months of less than 100,000.
45
The pre-tax cost of debt analysis derives the implied cost of debt for Federal-Mogul based upon its pro forma capital structure and its debt-to-equity ratio over time This table calculates the Companys implied pre-tax cost of debt as of its Effective Date
Blended Average 0.000% 2.288% 4.860% 1.150% 0.082% 8.380%
New Exit Revolver New Exit Term Loan New Tranche A Term Loans, net of discount New Junior Secured PIK Notes, net of discount Foreign Debt
Rate 6.216% (1) 6.466% (1) 9.000% (2) 12.000% (2) 8.000%
(3)
(1) Reflects average forward LIBOR yields to interpolate fixed rate equivalent for Exit Facilities assuming LIBOR + 225 bps for the ABL Facility and L+250 bps for the Term Loan. (2) Based upon an implied market rate of return derived from a comparable yield analysis. (3) Represents principal amount of total debt, net of discount and excludes approximately $60.2 million vendor note which will be non-interest bearing.
Based upon the Companys projections to repay indebtedness with excess cash over time and the associated implied debt-toequity ratio over time, Jefferies has estimated the appropriate pre-tax cost of debt for Federal-Mogul to be 8.0%
46
The following table summarizes the implied discount for the New Tranche A Loans and the New PIK Notes:
Total New Tranche A Loans and New PIK Notes(1)
Principal Amount Comparable Yield Implied Discount (%) Implied Discount ($) Principal Amount, Net of Discount
(1) (2)
Includes $1,605.4 million in Restructured Pre-Petition Bank Debt, $5.3 million New Surety PIK Notes and $24.7 million in New Surety Tranche A Loans. Implied discount calculated using average forward LIBOR yields to interpolate fixed rate equivalent for New Tranche A Loans.
49
8.0%
6.0%
3.0%
4.0%
2.0%
0.0%
1 2 3
6 Month
10
30
5-Year Treasury
10-Year Treasury
30-Year Treasury
10/01/04
6-Month 1-Year(1) 2-Year
04/01/04
3-Year 5-Year
10/01/03
7-Year 10-Year 30-Year(2)
Date
3-Month
Source:
Bloomberg, L.P.
Source: Bloomberg, L.P. The yield on the 1-year treasury is interpolated from the applicable yield curve. (2) On October 31, 2001, the U.S. Government announced its plans to stop issuing 30-year treasury bonds. The yield on the 30-year treasury is based on the last issued 30-year from February 15, 2001 which matures in 2031.
(1)
50
Maturity Date 3/15/08 3/1/09 3/15/10 8/15/11 3/15/28 3/1/29 12/15/07 5/1/09 4/15/12 4/15/12 5/1/09 11/1/13 6/15/12 7/15/13 10/15/09 2/15/13 2018 2/15/13 2/15/13 2/15/13 Mean(2) Median(2) Trimmed Mean(2)(3) High(2) Low(2)
Price 105.880 105.750 113.500 120.750 100.500 100.500 102.000 105.000 98.000 99.000 89.000 93.000 79.500 114.000 105.500 114.250 NA 119.000 NA NA
Current Data - 9/30/2004 Yield To Maturity Yield To Worst 4.640 4.640 5.030 5.030 7.100 3.920 5.350 5.350 6.960 6.960 6.960 6.960 7.900 5.670 9.620 9.320 9.750 9.750 8.810 8.810 12.200 12.200 11.250 11.250 15.660 15.660 8.000 7.160 10.200 9.480 7.090 (3) 7.090 (3) 12.000 12.000 7.860 7.860 NA NA NA NA 9.523 9.095 9.420 13.455 6.007 1.850 3.390 4.410 2.200 2.840 9.164 8.652 9.014 13.455 5.477 4.080 3.390 4.410 2.320 2.840 3.408 3.390 3.437 4.410 2.320
Price 103.900 103.920 114.260 117.270 96.230 96.340 101.710 103.630 98.180 103.540 97.630 88.140 99.430 114.070 107.010 113.970 NA 118.480 NA NA
Average from 9/30/03 - 9/30/04 Yield To Maturity Yield To Worst 5.370 5.370 5.570 5.570 7.140 4.800 6.060 6.060 7.350 7.350 7.330 7.330 8.060 7.200 10.060 9.690 9.710 9.700 8.030 7.880 9.620 9.550 10.110 10.080 13.480 13.480 8.060 7.370 9.940 6.840 7.200 7.200 12.000 12.000 8.020 8.020 NA NA NA NA 9.073 9.037 9.044 11.795 6.470 2.000 1.590 3.370 1.880 2.810 2.330 2.000 2.230 3.370 1.590 8.603 8.789 8.439 11.780 6.080 2.500 1.670 3.400 NM 2.810 2.595 2.655 2.655 3.400 1.670
Yield Differential Between Senior Notes and Subordinated Notes Delco Remy Intl Inc. Dura Oper Corp Metaldyne Corp Tenneco Automotive Inc. TRW Automotive
(5)
51
52
53
54
55
56
57
Mean Median Trimmed Mean(2) (1) Includes single B rated notes issued on or after September 30, 2003. (2) Trimmed Mean excludes top and bottom 10% of the range.
58
OpCo
AMC Entertainment Inc. AMC Entertainment Inc. AMC Entertainment Inc. AMC Entertainment Inc. Marquee Holdings
9.500% Sr. Sub. Notes due 2011 9.875% Sr. Sub. Notes due 2012 8.625% Sr. Notes due 2012 8.000% Sr. Notes due 2014 12.000% Sr. Discount Notes due 2014
HoldCo
OpCo HoldCo
9.750% Sr. Sub. Notes 2012 11.250% Sr. Discount Notes due 2014
$165.0 $446.0
114.75 72.75
5.287% 8.617%
OpCo
CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. CSC Holdings, Inc. Cablevision System Corp. Cablevision System Corp.
7.250% Sr. Notes due 2008 8.125% Sr. Notes due 2009 8.125% Sr. Debentures due 2009 7.625% Sr. Notes due 2011 6.750% Sr. Notes due 2012 10.500% Sr. Sub. Debentures due 2016 7.875% Sr. Debentures due 2018 7.625% Sr. Debentures due 2018 7.875% Sr. Notes due 2007 8.000% Sr. Notes due 2012
$500.0 $500.0 $400.0 $1,000.0 $500.0 $250.0 $300.0 $500.0 $500.0 $1,000.0
104.00 106.25 106.25 105.38 100.25 113.50 103.25 102.00 106.13 104.50
6.050% 6.580% 6.600% 6.600% 6.710% 4.890% 7.480% 7.390% 5.750% 7.210%
6.050% 6.580% 6.600% 6.600% 6.710% 8.630% 7.480% 7.390% 5.750% 7.210% 232 bp 116 bp
Holdco
OpCo HoldCo
10.000% Sr. Sub. Notes due 2011 12.750% Sr. Discount Notes due 2012 12.000% Sr. Sub. Discount Notes due 2013
OpCo
Dex Media East Dex Media West Dex Media East Dex Media West Dex Media, Inc.
9.875% Sr. Notes due 2009 8.500% Sr. Notes due 2010 12.125% Sr. Sub. Notes due 2012 9.875% Sr. Sub. Notes due 2013 8.000% Sr. Notes due 2013 9.000% Sr. Discount Notes due 2013
HoldCo
59
OpCo HoldCo
11.750% Sr. Discount Notes 2011 12.500% Sr. Discount Notes 2011
$140.0 $135.0
110.00 61.00
9.485% 11.782%
OpCo HoldCo
Johnson Diversey, Inc. Johnson Diversey, Inc. Johnson Diversey Holdings, Inc.
9.625% Sr. Sub. Notes due 2012 9.625% Sr. Sub. Notes due 2012 (Euro) 10.670% Sr. Discount Notes due 2013
112.00 82.50
6.30% 9.07%
OpCo HoldCo
11.125% Sr. Sub. Notes Due 2012 14.125% Sr. Discount Notes Due 2013
$165.0 $55.0
102.50 53.50
10.523% 13.893%
OpCo HoldCo
10.125% Sr. Sub. Notes due 2012 11.000% Sr. Discount Notes due 2013
$150.0 $68.4
112.00 72.13
6.98% 9.33%
OpCo HoldCo
9.375% Sr. Notes due 2008 11.625% Sr. Discount Notes due 2009
$180.0 $89.0
100.75 99.00
8.75% 11.92%
OpCo HoldCo
Medquest MQ Associates
11.875% Sr. Sub. Notes 2012 12.250% Sr. Discount Notes due 2012
$180.0 $87.8
114.00 84.80
8.177% 12.270%
OpCo HoldCo
9.500% Sr. Sub. Notes due 2013 12.250% Sr. Sub. Discount Notes due 2014
$225.0 $136.0
95.00 52.00
10.38% 13.55%
OpCo HoldCo
10.000% Sr. Sub. Notes due 2012 14.750% Sr. Discount Notes due 2014
$315.0 $223.0
108.00 64.25
8.184% 11.612%
60
HoldCo
OpCo HoldCo
8.625% Sr. Sub. Due 2012 11.000% Sr. Discount Notes due 2013
$175.0 $77.0
99.50 68.00
8.716% 11.218%
OpCo HoldCo
Nexstar Finance LLC Nexstar Finance LLC Nexstar Finance Holdings LLC
12.000% Sr. Sub. Notes due 2008 7.000% Sr. Sub. Notes due 2014 11.375% Sr. Discount Notes due 2013
OpCo HoldCo
9.000% Sr. Sub. Notes due 2011 9.875 Sr. Discount Notes due 2014
$150.0 $80.3
109.00 72.50
6.871% 8.818%
OpCo HoldCo
9.250% Sr. Notes due 2012 12.250% Sr. Discount Notes due 2014
$200.0 $97.0
96.00 51.00
10.024% 15.925%
OpCo
PanAmSat Corp PanAmSat Corp PanAmSat Corp PanAmSat Corp PanAmSat Holding
6.375% Notes due 2008 8.500% Sr. Notes due 2012 6.875% Debentures due 2028 9.000% Sr. Notes due 2014 10.375% Sr. Discount Notes due 2014
HoldCo
OpCo HoldCo
$450.0 $219.0
106.00 63.00
8.833% 10.886%
Pharma Services Intermediate Holdings 11.500% Sr. Discount Notes due 2014
61
OpCo HoldCo
Town Sports International Holdings, Inc. 11.000% Sr. Discount Notes due 2014
OpCo HoldCo
8.250% Sr. Notes due 2011 10.750% Sr. Discount Notes due 2012
$225.0 $125.0
108.00 76.50
6.478% 9.183%
Mean Median Trimmed Mean (1) High Low (1) Trimmed Mean excludes high and low values.
62