Data Addendum Valuation Seminar June 4-6, 2012

Transcription

1 Data Addendum Valuation Seminar June 4-6, 2012 Aswath Damodaran

2 Government Bond Rates by Country Source: list- by- country

3 Sovereign Ratings

4

5 Emerging Market Government Bond Rates Source:

6 Ratings/Default Spread Rating Default spread in basis points Aaa 0 Aa1 25 Aa2 50 Aa3 70 A1 85 A2 100 A3 115 Baa1 150 Baa2 175 Baa3 200 Ba1 240 Ba2 275 Ba3 325 B1 400 B2 500 B3 600 Caa1 700 Caa2 850 Caa3 1000

7 Betas by Sector: US Industry Name Number of Firms Average Beta Unlevered Beta Unlevered Beta corrected for cash Advertising Aerospace/Defense Air Transport Apparel Auto Parts Automotive Bank Bank (Midwest) Beverage Biotechnology Building Materials Cable TV Chemical (Basic) Chemical (Diversified) Chemical (Specialty) Coal Computer Software Computers/Peripherals Diversified Co Drug E-Commerce Educational Services Electric Util. (Central) Electric Utility (East) Electric Utility (West) Electrical Equipment Electronics Engineering & Const Entertainment Entertainment Tech Environmental Financial Svcs. (Div.) Food Processing Foreign Electronics Funeral Services Furn/Home Furnishings

8 Healthcare Information Heavy Truck & Equip Homebuilding Hotel/Gaming Household Products Human Resources Industrial Services Information Services Insurance (Life) Insurance (Prop/Cas.) Internet IT Services Machinery Maritime Med Supp Invasive Med Supp Non- Invasive Medical Services Metal Fabricating Metals & Mining (Div.) Natural Gas (Div.) Natural Gas Utility Newspaper Office Equip/Supplies Oil/Gas Distribution Oilfield Svcs/Equip Packaging & Container Paper/Forest Products Petroleum (Integrated) Petroleum (Producing) Pharmacy Services Pipeline MLPs Power Precious Metals Precision Instrument Property Management Public/Private Equity Publishing R.E.I.T Railroad Recreation

9 Reinsurance Restaurant Retail (Hardlines) Retail (Softlines) Retail Automotive Retail Building Supply Retail Store Retail/Wholesale Food Securities Brokerage Semiconductor Semiconductor Equip Shoe Steel Telecom. Equipment Telecom. Services Telecom. Utility Thrift Tobacco Toiletries/Cosmetics Trucking Utility (Foreign) Water Utility Wireless Networking Total Market

10 Cost of Capital by Sector Industry Name Beta Cost of Equity E/(D+E) After-tax Cost of Debt D/(D+E) Cost of Capital Advertising % 69.80% 5.24% 30.20% 11.42% Aerospace/Defense % 79.58% 2.67% 20.42% 7.30% Air Transport % 80.44% 2.68% 19.56% 7.93% Apparel % 84.47% 3.67% 15.53% 8.77% Auto Parts % 78.34% 3.54% 21.66% 10.27% Automotive % 42.63% 2.94% 57.37% 6.57% Bank % 39.05% 2.83% 60.95% 4.27% Bank (Midwest) % 62.69% 2.77% 37.31% 5.74% Beverage % 79.04% 3.13% 20.96% 6.35% Biotechnology % 88.12% 5.72% 11.88% 7.81% Building Materials % 51.46% 3.44% 48.54% 7.31% Cable TV % 59.50% 2.45% 40.50% 7.03% Chemical (Basic) % 78.53% 2.27% 21.47% 8.41% Chemical (Diversified) % 81.72% 2.64% 18.28% 9.48% Chemical (Specialty) % 82.54% 3.19% 17.46% 8.46% Coal % 77.58% 2.94% 22.42% 9.26% Computer Software % 93.03% 3.83% 6.97% 7.87% Computers/Peripherals % 90.72% 4.30% 9.28% 9.21% Diversified Co % 49.45% 3.27% 50.55% 5.98% Drug % 86.61% 5.56% 13.39% 8.22% E-Commerce % 93.98% 3.83% 6.02% 7.83% Educational Services % 89.03% 2.90% 10.97% 6.47% Electric Util. (Central) % 53.72% 1.62% 46.28% 4.19% Electric Utility (East) % 60.18% 1.58% 39.82% 4.29% Electric Utility (West) % 54.19% 1.63% 45.81% 4.21% Electrical Equipment % 88.76% 3.21% 11.24% 9.14% Electronics % 81.75% 3.92% 18.25% 7.51% Engineering & Const % 89.29% 2.85% 10.71% 8.57% Entertainment % 70.93% 4.97% 29.07% 9.76% Entertainment Tech % 91.11% 3.42% 8.89% 8.79% Environmental % 69.59% 4.30% 30.41% 5.99% Financial Svcs. (Div.) % 28.45% 3.53% 71.55% 5.30% Food Processing % 77.20% 2.70% 22.80% 6.32% Foreign Electronics % 70.38% 1.86% 29.62% 6.51% Funeral Services % 63.86% 1.98% 36.14% 6.29% Furn/Home Furnishings % 80.39% 3.48% 19.61% 10.98% Healthcare Information % 94.03% 3.01% 5.97% 8.60%

11 Heavy Truck & Equip % 69.61% 3.07% 30.39% 9.82% Homebuilding % 49.93% 3.67% 50.07% 7.14% Hotel/Gaming % 65.76% 3.31% 34.24% 9.26% Household Products % 84.04% 2.52% 15.96% 7.40% Human Resources % 90.65% 2.89% 9.35% 8.73% Industrial Services % 75.35% 3.13% 24.65% 6.43% Information Services % 76.80% 2.33% 23.20% 6.95% Insurance (Life) % 60.92% 2.43% 39.08% 7.91% Insurance (Prop/Cas.) % 80.90% 2.31% 19.10% 6.40% Internet % 97.37% 5.47% 2.63% 8.37% IT Services % 94.26% 3.13% 5.74% 7.96% Machinery % 83.95% 2.62% 16.05% 8.07% Maritime % 36.99% 3.66% 63.01% 6.11% Med Supp Invasive % 86.15% 3.41% 13.85% 6.50% Med Supp Non-Invasive % 88.48% 3.81% 11.52% 7.60% Medical Services % 66.91% 3.10% 33.09% 5.97% Metal Fabricating % 86.59% 2.84% 13.41% 10.32% Metals & Mining (Div.) % 87.64% 5.22% 12.36% 9.31% Natural Gas (Div.) % 72.96% 2.24% 27.04% 7.81% Natural Gas Utility % 59.74% 1.66% 40.26% 4.16% Newspaper % 68.33% 3.65% 31.67% 9.72% Office Equip/Supplies % 61.34% 2.66% 38.66% 7.27% Oil/Gas Distribution % 63.17% 2.91% 36.83% 5.92% Oilfield Svcs/Equip % 81.36% 2.78% 18.64% 9.66% Packaging & Container % 65.87% 2.17% 34.13% 6.58% Paper/Forest Products % 62.55% 4.35% 37.45% 7.94% Petroleum (Integrated) % 83.90% 2.08% 16.10% 7.89% Petroleum (Producing) % 80.08% 3.88% 19.92% 8.76% Pharmacy Services % 83.00% 2.54% 17.00% 7.60% Pipeline MLPs % 70.94% 2.69% 29.06% 6.32% Power % 40.19% 4.45% 59.81% 6.69% Precious Metals % 92.43% 4.50% 7.57% 8.47% Precision Instrument % 86.25% 3.33% 13.75% 8.71% Property Management % 41.56% 3.56% 58.44% 5.70% Public/Private Equity % 62.55% 3.72% 37.45% 10.78% Publishing % 61.24% 2.74% 38.76% 6.82% R.E.I.T % 74.23% 2.84% 25.77% 8.70% Railroad % 79.91% 2.19% 20.09% 8.88% Recreation % 67.25% 3.20% 32.75% 8.19% Reinsurance % 80.94% 2.66% 19.06% 6.55% Restaurant % 88.68% 3.04% 11.32% 8.79%

12 Retail (Hardlines) % 80.43% 3.75% 19.57% 10.84% Retail (Softlines) % 94.68% 2.54% 5.32% 10.13% Retail Automotive % 72.41% 2.21% 27.59% 7.95% Retail Building Supply % 87.67% 1.97% 12.33% 7.41% Retail Store % 79.63% 2.90% 20.37% 8.27% Retail/Wholesale Food % 70.75% 1.97% 29.25% 5.10% Securities Brokerage % 18.85% 2.12% 81.15% 3.43% Semiconductor % 92.30% 3.44% 7.70% 10.36% Semiconductor Equip % 86.80% 3.28% 13.20% 11.46% Shoe % 97.87% 2.55% 2.13% 9.28% Steel % 68.31% 2.66% 31.69% 9.06% Telecom. Equipment % 88.52% 3.79% 11.48% 7.52% Telecom. Services % 74.58% 3.32% 25.42% 6.65% Telecom. Utility % 50.98% 2.38% 49.02% 4.82% Thrift % 77.32% 2.95% 22.68% 5.44% Tobacco % 84.24% 1.98% 15.76% 6.23% Toiletries/Cosmetics % 82.89% 2.69% 17.11% 8.53% Trucking % 78.27% 2.51% 21.73% 7.89% Utility (Foreign) % 39.21% 2.12% 60.79% 4.30% Water Utility % 55.12% 1.54% 44.88% 3.91% Wireless Networking % 78.70% 3.40% 21.30% 8.23% Total Market % 68.19% 3.27% 31.81% 7.05%

13 Profitability Measures Industry Name EBITDASG&A/Sales EBITDA/Sales Pre-tax operating margin Net Margin Advertising 49.98% 14.41% 10.27% 3.63% Aerospace/Defense 20.81% 12.53% 10.16% 6.78% Air Transport 26.54% 13.76% 8.78% 3.76% Apparel 45.71% 13.73% 10.97% 6.72% Auto Parts 20.02% 9.48% 6.49% 5.10% Automotive 24.59% 12.50% 6.99% 3.36% Bank NA NA NA NA Bank (Midwest) NA NA NA NA Beverage 59.01% 25.15% 20.45% 13.99% Biotechnology 52.73% -0.79% -7.79% 9.11% Building Materials 29.07% 11.10% 4.17% -4.01% Cable TV 57.03% 35.30% 19.58% 9.02% Chemical (Basic) 27.15% 17.12% 12.09% 12.46% Chemical (Diversified) 32.58% 18.12% 13.20% 8.79% Chemical (Specialty) 34.27% 15.86% 11.10% 8.04% Coal 29.09% 24.19% 15.94% 12.00% Computer Software 77.44% 35.60% 31.35% 24.78% Computers/Peripherals 32.83% 17.18% 14.15% 10.74% Diversified Co % 18.56% 14.09% 9.21% Drug 73.12% 30.51% 21.91% 17.99% E-Commerce 62.83% 20.59% 14.39% 10.73% Educational Services 60.38% 24.64% 20.80% 11.86% Electric Util. (Central) 30.38% 28.70% 17.72% 8.89% Electric Utility (East) 29.35% 29.35% 19.13% 9.77% Electric Utility (West) 29.37% 28.92% 16.79% 8.53% Electrical Equipment 38.02% 16.90% 13.19% 12.12% Electronics 18.38% 8.08% 5.99% 4.63% Engineering & Const 11.09% 6.26% 4.72% 3.47% Entertainment 39.33% 23.55% 17.72% 10.12% Entertainment Tech 53.74% 16.05% 10.48% 9.62% Environmental 36.52% 23.56% 15.22% 7.53% Financial Svcs. (Div.) 89.25% 46.41% 43.49% 5.08% Food Processing 25.93% 11.36% 9.08% 5.36% Foreign Electronics 36.80% 10.65% 5.27% 1.83% Funeral Services 32.24% 20.32% 15.64% 7.48% Furn/Home Furnishings 32.06% 9.51% 6.43% 3.76% Healthcare Information 53.93% 18.39% 12.11% 8.81%

14 Heavy Truck & Equip 27.33% 12.69% 9.13% 8.48% Homebuilding 14.64% -0.70% -1.56% -5.64% Hotel/Gaming 34.67% 20.74% 12.61% 6.29% Household Products 49.70% 20.58% 17.38% 11.66% Human Resources 20.47% 2.86% 1.91% 1.66% Industrial Services -8.07% % % 3.26% Information Services 45.94% 27.90% 19.33% 11.94% Insurance (Life) NA NA NA NA Insurance (Prop/Cas.) NA NA NA NA Internet 53.69% 22.91% 18.25% 16.00% IT Services 35.14% 17.98% 14.43% 10.59% Machinery 36.55% 15.10% 11.05% 7.26% Maritime 34.47% 27.89% 14.81% 0.78% Med Supp Invasive 67.65% 27.86% 22.22% 16.64% Med Supp Non-Invasive 20.30% 7.96% 6.48% 4.89% Medical Services 27.91% 13.23% 11.11% 4.84% Metal Fabricating 32.83% 18.71% 15.07% 7.84% Metals & Mining (Div.) 40.93% 38.91% 31.57% 7.36% Natural Gas (Div.) 61.83% 53.71% 28.94% 12.72% Natural Gas Utility 35.16% 18.02% 12.80% 5.10% Newspaper 53.69% 20.16% 14.59% 3.11% Office Equip/Supplies 32.72% 9.62% 6.65% 4.07% Oil/Gas Distribution 39.89% 28.25% 18.45% 9.80% Oilfield Svcs/Equip % 24.15% 15.11% 10.72% Packaging & Container 24.08% 14.82% 10.12% 13.46% Paper/Forest Products 26.93% 19.45% 12.01% 4.63% Petroleum (Integrated) 21.17% 14.70% 9.76% 7.99% Petroleum (Producing) 44.46% 39.33% 25.74% 10.69% Pharmacy Services 18.75% 6.41% 5.11% 2.91% Pipeline MLPs 16.65% 13.08% 8.95% 7.11% Power 30.10% 22.31% 14.54% 1.49% Precious Metals 54.58% 46.27% 33.30% 30.24% Precision Instrument 48.89% 16.03% 10.74% 9.57% Property Management 30.28% 21.90% 15.63% 9.18% Public/Private Equity 12.87% -2.41% -2.58% 62.30% Publishing 43.92% 17.80% 12.10% 6.22% R.E.I.T % % % % Railroad 37.70% 37.39% 28.43% 17.86% Recreation 34.95% 17.59% 11.51% 7.28% Reinsurance NA NA NA NA Restaurant 31.65% 20.57% 15.82% 10.70%

15 Retail (Hardlines) 35.61% 10.73% 7.50% 3.86% Retail (Softlines) 38.82% 12.76% 9.39% 5.56% Retail Automotive 25.56% 8.57% 6.88% 4.35% Retail Building Supply 35.10% 10.72% 8.13% 5.14% Retail Store 26.60% 7.91% 5.84% 3.45% Retail/Wholesale Food 20.66% 5.15% 3.18% 4.16% Securities Brokerage 54.21% 51.69% 48.78% 11.45% Semiconductor 59.69% 33.21% 22.76% 17.82% Semiconductor Equip 45.84% 25.81% 21.65% 16.30% Shoe 46.44% 13.07% 11.34% 8.44% Steel 16.68% 10.96% 5.83% 3.52% Telecom. Equipment 47.37% 14.78% 10.87% 7.22% Telecom. Services 57.59% 38.57% 22.74% 5.11% Telecom. Utility 59.85% 32.83% 15.83% 8.50% Thrift NA NA NA NA Tobacco 33.90% 22.75% 20.61% 8.46% Toiletries/Cosmetics 64.47% 13.43% 10.85% 7.37% Trucking 16.91% 12.60% 6.37% 2.74% Utility (Foreign) 27.79% 25.34% 11.60% 0.55% Water Utility 45.76% 39.41% 26.61% 12.25% Wireless Networking 17.87% -4.49% % 7.96% Total Market 40.23% 22.68% 17.24% 8.32%

16 Quality of Growth Numbers Industry Name ROE ROC Non-cash WC/ Revenues Payout Ratio Reinvestment Rate Sales/Capital Advertising 8.89% 15.49% % 43.75% % 1.42 Aerospace/Defense 34.00% 22.91% 2.89% 29.13% 11.95% 2.53 Air Transport % 26.18% -9.25% 18.91% 3.48% 2.40 Apparel 17.34% 17.87% 17.24% 18.85% 17.36% 1.85 Auto Parts 22.59% 23.10% 5.59% 23.74% 10.38% 3.18 Automotive 18.46% 12.12% 19.37% 22.24% % 1.41 Bank 7.60% NA NA 33.53% 0.00% NA Bank (Midwest) 9.08% NA NA 38.36% 0.00% NA Beverage 24.58% 15.95% 1.08% 46.35% -2.00% 0.83 Biotechnology 15.15% -7.55% -5.83% 59.34% NA 0.97 Building Materials -5.17% 7.70% 7.66% NA % 0.82 Cable TV 16.13% 15.93% -9.65% 18.03% % 0.71 Chemical (Basic) 25.83% 19.78% 9.68% 30.79% 20.19% 1.43 Chemical (Diversified) 19.26% 19.22% 15.58% 31.68% 34.42% 1.48 Chemical (Specialty) 18.50% 17.62% 12.60% 40.43% 9.02% 1.56 Coal 24.24% 23.63% 3.61% 33.78% 24.20% 1.22 Computer Software 79.13% 51.27% % 21.61% -7.95% 1.83 Computers/Peripherals 52.52% 39.13% -1.97% 8.61% 1.00% 2.96 Diversified Co % 10.63% 71.65% 36.81% 1.26% 0.68 Drug 22.64% 21.11% 7.53% 49.12% % 0.89 E-Commerce 16.47% 18.68% % 1.89% -1.79% 1.20 Educational Services 53.22% 41.10% -7.82% 2.83% 6.75% 2.66 Electric Util. (Central) 10.77% 10.34% 8.98% 63.88% 35.10% 0.55 Electric Utility (East) 11.91% 10.58% 8.33% 66.22% 53.61% 0.54 Electric Utility (West) 9.88% 10.51% -0.59% 56.70% 68.22% 0.54 Electrical Equipment 23.02% 19.46% 12.28% 29.40% 7.08% 1.51 Electronics 22.20% 21.48% 10.63% 11.97% 13.62% 3.51 Engineering & Const 15.44% 18.06% 3.30% 6.31% -6.77% 4.05 Entertainment 11.46% 13.07% 1.72% 25.84% -6.73% 0.78 Entertainment Tech 15.08% 18.52% % 11.57% % 1.29 Environmental 11.00% 11.79% 0.48% 46.73% -0.17% 0.80 Financial Svcs. (Div.) % 6.32% 11.08% NA 12.60% 0.18 Food Processing 17.85% 14.91% 8.01% 45.25% 20.62% 1.82 Foreign Electronics 6.25% 15.41% 1.47% 51.37% % 2.43 Funeral Services 12.34% 10.13% 3.76% 49.81% -2.71% 0.79

17 Furn/Home Furnishings 11.66% 14.49% 13.45% 27.83% -8.15% 2.08 Healthcare Information 11.00% 14.79% 2.00% 12.22% % 1.24 Heavy Truck & Equip 30.24% 15.23% 24.35% 34.22% 67.62% 1.64 Homebuilding % -1.25% 76.53% NA NA 1.00 Hotel/Gaming 5.64% 11.65% -2.12% 40.37% -0.47% 0.69 Household Products 21.80% 17.20% 4.70% 48.97% 5.04% 1.13 Human Resources 7.25% 11.60% 4.81% 50.59% 18.20% 6.48 Industrial Services 13.76% % 10.25% 24.98% NA 2.26 Information Services 15.60% 16.28% -1.61% 38.73% % 0.72 Insurance (Life) 10.45% NA NA 29.39% 0.24% NA Insurance (Prop/Cas.) 13.32% 0.84% 6.02% 23.46% 57.45% 0.00 Internet 39.73% 41.19% -8.44% 0.66% 3.83% 2.25 IT Services 36.11% 33.61% 2.88% 32.87% -3.79% 2.61 Machinery 14.59% 17.54% 16.27% 25.38% 6.06% 1.53 Maritime 4.88% 9.04% 3.32% 25.25% % 0.35 Med Supp Invasive 22.13% 20.07% 22.14% 22.91% 1.19% 0.92 Med Supp Non- Invasive 29.56% 23.85% 3.04% 37.29% -2.59% 4.00 Medical Services 32.81% 22.23% -5.59% 8.82% % 2.51 Metal Fabricating 18.66% 18.24% 18.02% 25.70% 26.42% 1.36 Metals & Mining (Div.) 24.79% 24.08% 6.22% 33.51% 18.82% 0.89 Natural Gas (Div.) 9.04% 13.39% -4.26% 33.81% % 0.41 Natural Gas Utility 10.98% 11.42% 5.53% 67.28% 35.37% 0.94 Newspaper 16.73% 15.65% -3.13% 14.56% % 1.23 Office Equip/Supplies 18.05% 15.20% 6.78% 28.06% % 2.26 Oil/Gas Distribution 11.35% 10.59% -0.01% 73.98% 80.00% 0.47 Oilfield Svcs/Equip % 13.74% 16.89% 41.88% 43.91% 0.76 Packaging & Container 17.52% 15.19% 9.01% 24.38% 74.52% 1.48 Paper/Forest Products 8.40% 18.20% 10.19% 43.21% % 1.12 Petroleum (Integrated) 14.76% 15.82% 1.98% 38.99% 55.85% 1.78 Petroleum (Producing) 9.46% 20.52% 2.28% 9.50% 42.14% 0.71 Pharmacy Services 14.82% 14.27% 3.68% 20.26% 4.35% 3.56 Pipeline MLPs 12.71% 12.53% 0.88% 33.53% 30.05% 0.99 Power 6.95% 11.79% 10.94% 13.75% 41.20% 0.69 Precious Metals 9.09% 13.43% 7.21% 26.71% 44.35% 0.40 Precision Instrument 15.37% 18.57% 15.14% 11.24% 1.33% 1.38 Property Management 10.74% 7.25% -3.02% 27.66% 98.01% 0.40 Public/Private Equity 35.96% -0.10% 31.62% 17.28% NA 0.30 Publishing 31.94% 17.49% 0.81% 25.02% -5.54% 1.37 R.E.I.T % 16.14% % 91.36% -1.71% 0.11

18 Railroad 16.43% 14.63% -1.76% 34.63% 27.44% 0.60 Recreation 11.06% 12.98% -0.96% 42.67% 32.17% 0.89 Reinsurance 13.29% NA NA 15.87% 50.50% NA Restaurant 38.25% 26.54% -4.82% 46.73% 6.40% 1.82 Retail (Hardlines) 22.91% 21.73% 8.40% 19.62% 59.57% 3.00 Retail (Softlines) 36.27% 40.14% 3.40% 21.08% 0.71% 4.94 Retail Automotive 20.53% 12.37% 13.56% 2.49% 32.59% 2.22 Retail Building Supply 16.06% 16.06% 5.88% 47.32% -4.76% 2.37 Retail Store 21.01% 18.51% 0.88% 29.16% 11.00% 3.55 Retail/Wholesale Food 16.43% 17.07% -0.01% 28.62% 14.03% 5.02 Securities Brokerage NA 11.04% % 10.93% % 0.29 Semiconductor 39.10% 42.57% 6.93% 30.53% 3.89% 1.57 Semiconductor Equip 65.76% 48.42% 12.51% 11.30% 2.16% 2.21 Shoe 30.49% 31.62% 16.28% 25.89% 16.53% 3.33 Steel 7.28% 11.61% 11.41% 34.26% -3.27% 1.21 Telecom. Equipment 29.93% 32.20% -3.38% 53.72% % 2.73 Telecom. Services 16.47% 23.53% % 43.63% -3.23% 0.83 Telecom. Utility 18.29% 17.58% -7.76% 80.94% % 0.74 Thrift -2.14% NA NA NA 0.00% NA Tobacco 74.21% 30.92% -2.44% 67.56% -3.80% 1.84 Toiletries/Cosmetics 62.53% 24.17% 8.55% 25.04% 10.83% 2.70 Trucking 8.19% 18.85% 5.03% 41.07% 45.30% 2.16 Utility (Foreign) 3.12% 8.30% 7.52% 0.32% 72.64% 0.58 Water Utility 8.44% 8.08% 7.51% 48.16% 71.80% 0.30 Wireless Networking 21.34% % 7.62% 9.13% NA 1.14 Total Market 16.07% 16.06% 7.01% 37.92% 6.57% 0.97

19 Industry Name PE Multiples by Sector Price/Current EPS Price/Trailing EPS Price/Forward EPS Advertising Aerospace/Defense Air Transport Apparel Auto Parts Automotive Bank Bank (Midwest) Beverage Biotechnology Building Materials Cable TV Chemical (Basic) Chemical (Diversified) Chemical (Specialty) Coal Computer Software Computers/Peripherals Diversified Co Drug E-Commerce Educational Services Electric Util. (Central) Electric Utility (East) Electric Utility (West) Electrical Equipment Electronics Engineering & Const Entertainment Entertainment Tech Environmental Financial Svcs. (Div.) Food Processing Foreign Electronics Funeral Services Furn/Home Furnishings Healthcare Information

20 Heavy Truck & Equip Homebuilding Hotel/Gaming Household Products Human Resources Industrial Services Information Services Insurance (Life) Insurance (Prop/Cas.) Internet IT Services Machinery Maritime Med Supp Invasive Med Supp Non- Invasive Medical Services Metal Fabricating Metals & Mining (Div.) Natural Gas (Div.) Natural Gas Utility Newspaper Office Equip/Supplies Oil/Gas Distribution Oilfield Svcs/Equip Packaging & Container Paper/Forest Products Petroleum (Integrated) Petroleum (Producing) Pharmacy Services Pipeline MLPs Power Precious Metals Precision Instrument Property Management Public/Private Equity Publishing R.E.I.T Railroad Recreation Reinsurance Restaurant

21 Retail (Hardlines) Retail (Softlines) Retail Automotive Retail Building Supply Retail Store Retail/Wholesale Food Securities Brokerage Semiconductor Semiconductor Equip Shoe Steel Telecom. Equipment Telecom. Services Telecom. Utility Thrift Tobacco Toiletries/Cosmetics Trucking Utility (Foreign) #DIV/0! Water Utility Wireless Networking Total Market

22 EV Multiples by sector Industry Name Number of Firms EV/EBITDA EV/EBIT EV/EBIT(1-t) Advertising Aerospace/Defense Air Transport Apparel Auto Parts Automotive Bank Bank (Midwest) Beverage Biotechnology 158 NA NA NA Building Materials Cable TV Chemical (Basic) Chemical (Diversified) Chemical (Specialty) Coal Computer Software Computers/Peripherals Diversified Co Drug E-Commerce Educational Services Electric Util. (Central) Electric Utility (East) Electric Utility (West) Electrical Equipment Electronics Engineering & Const Entertainment Entertainment Tech Environmental Financial Svcs. (Div.) Food Processing Foreign Electronics Funeral Services Furn/Home Furnishings Healthcare Information

23 Heavy Truck & Equip Homebuilding 23 NA NA NA Hotel/Gaming Household Products Human Resources Industrial Services 137 NA NA NA Information Services Insurance (Life) Insurance (Prop/Cas.) Internet IT Services Machinery Maritime Med Supp Invasive Med Supp Non-Invasive Medical Services Metal Fabricating Metals & Mining (Div.) Natural Gas (Div.) Natural Gas Utility Newspaper Office Equip/Supplies Oil/Gas Distribution Oilfield Svcs/Equip Packaging & Container Paper/Forest Products Petroleum (Integrated) Petroleum (Producing) Pharmacy Services Pipeline MLPs Power Precious Metals Precision Instrument Property Management Public/Private Equity 11 NA NA NA Publishing R.E.I.T Railroad Recreation Reinsurance Restaurant

24 Retail (Hardlines) Retail (Softlines) Retail Automotive Retail Building Supply Retail Store Retail/Wholesale Food Securities Brokerage Semiconductor Semiconductor Equip Shoe Steel Telecom. Equipment Telecom. Services Telecom. Utility Thrift Tobacco Toiletries/Cosmetics Trucking Utility (Foreign) Water Utility Wireless Networking 57 NA NA NA Total Market

25 Book Value Multiples by Sector Industry Name Price/BV ROE EV/Invested Capital ROC Advertising % % Aerospace/Defense % % Air Transport % % Apparel % % Auto Parts % % Automotive % % Bank % 0.93 NA Bank (Midwest) % 1.20 NA Beverage % % Biotechnology % % Building Materials % % Cable TV % % Chemical (Basic) % % Chemical (Diversified) % % Chemical (Specialty) % % Coal % % Computer Software % % Computers/Peripherals % % Diversified Co % % Drug % % E-Commerce % % Educational Services % % Electric Util. (Central) % % Electric Utility (East) % % Electric Utility (West) % % Electrical Equipment % % Electronics % % Engineering & Const % % Entertainment % % Entertainment Tech % % Environmental % % Financial Svcs. (Div.) % % Food Processing % % Foreign Electronics % % Funeral Services % % Furn/Home Furnishings % % Healthcare Information % %

26 Heavy Truck & Equip % % Homebuilding % % Hotel/Gaming % % Household Products % % Human Resources % % Industrial Services % % Information Services % % Insurance (Life) % 0.73 NA Insurance (Prop/Cas.) % 1.00 NA Internet % % IT Services % % Machinery % % Maritime % % Med Supp Invasive % % Med Supp Non-Invasive % % Medical Services % % Metal Fabricating % % Metals & Mining (Div.) % % Natural Gas (Div.) % % Natural Gas Utility % % Newspaper % % Office Equip/Supplies % % Oil/Gas Distribution % % Oilfield Svcs/Equip % % Packaging & Container % % Paper/Forest Products % % Petroleum (Integrated) % % Petroleum (Producing) % % Pharmacy Services % % Pipeline MLPs % % Power % % Precious Metals % % Precision Instrument % % Property Management % % Public/Private Equity % % Publishing % % R.E.I.T % % Railroad % % Recreation % % Reinsurance % 0.69 NA Restaurant % %

27 Retail (Hardlines) % % Retail (Softlines) % % Retail Automotive % % Retail Building Supply % % Retail Store % % Retail/Wholesale Food % % Securities Brokerage % % Semiconductor % % Semiconductor Equip % % Shoe % % Steel % % Telecom. Equipment % % Telecom. Services % % Telecom. Utility % % Thrift % 0.94 NA Tobacco % % Toiletries/Cosmetics % % Trucking % % Utility (Foreign) % % Water Utility % % Wireless Networking % % Total Market % %

28 Industry Name Revenue Multiples Price/Sales Net Margin EV/Sales After-tax Operating Margin Advertising % % Aerospace/Defense % % Air Transport % % Apparel % % Auto Parts % % Automotive % % Bank NA NA NA NA Bank (Midwest) NA NA NA NA Beverage % % Biotechnology % % Building Materials % % Cable TV % % Chemical (Basic) % % Chemical (Diversified) % % Chemical (Specialty) % % Coal % % Computer Software % % Computers/Peripherals % % Diversified Co % % Drug % % E-Commerce % % Educational Services % % Electric Util. (Central) % % Electric Utility (East) % % Electric Utility (West) % % Electrical Equipment % % Electronics % % Engineering & Const % % Entertainment % % Entertainment Tech % % Environmental % % Financial Svcs. (Div.) % % Food Processing % % Foreign Electronics % % Funeral Services % % Furn/Home Furnishings % % Healthcare Information % %

29 Heavy Truck & Equip % % Homebuilding % % Hotel/Gaming % % Household Products % % Human Resources % % Industrial Services % % Information Services % % Insurance (Life) NA NA NA NA Insurance (Prop/Cas.) NA NA NA NA Internet % % IT Services % % Machinery % % Maritime % % Med Supp Invasive % % Med Supp Non-Invasive % % Medical Services % % Metal Fabricating % % Metals & Mining (Div.) % % Natural Gas (Div.) % % Natural Gas Utility % % Newspaper % % Office Equip/Supplies % % Oil/Gas Distribution % % Oilfield Svcs/Equip % % Packaging & Container % % Paper/Forest Products % % Petroleum (Integrated) % % Petroleum (Producing) % % Pharmacy Services % % Pipeline MLPs % % Power % % Precious Metals % % Precision Instrument % % Property Management % % Public/Private Equity % % Publishing % % R.E.I.T % % Railroad % % Recreation % % Reinsurance NA NA NA NA Restaurant % %

30 Retail (Hardlines) % % Retail (Softlines) % % Retail Automotive % % Retail Building Supply % % Retail Store % % Retail/Wholesale Food % % Securities Brokerage % % Semiconductor % % Semiconductor Equip % % Shoe % % Steel % % Telecom. Equipment % % Telecom. Services % % Telecom. Utility % % Thrift NA NA NA NA Tobacco % % Toiletries/Cosmetics % % Trucking % % Utility (Foreign) % % Water Utility % % Wireless Networking % % Total Market % %

31 Industry Name Standard deviations in equity and firm value by sector Number of Firms Std Deviation in Equity Std Deviation in Firm Value Advertising % 77.55% Aerospace/Defense % 51.49% Air Transport % 54.83% Apparel % 77.93% Auto Parts % 66.89% Automotive % 39.72% Bank % 33.89% Bank (Midwest) % 39.66% Beverage % 55.18% Biotechnology % % Building Materials % 50.00% Cable TV % 35.05% Chemical (Basic) % 40.97% Chemical (Diversified) % 48.20% Chemical (Specialty) % 61.75% Coal % 45.76% Computer Software % 77.48% Computers/Peripheral s % 90.50% Diversified Co % 46.56% Drug % 92.48% E- Commerce % 83.91% Educational Services % 71.44% Electric Util. (Central) % 15.19% Electric Utility (East) % 12.72% Electric Utility (West) % 12.97% Electrical Equipment % 61.72% Electronics % 77.01% Engineering & Const % 59.51% Entertainment % 83.88% Entertainment Tech % 71.48% Environmental % 70.39% Financial Svcs. (Div.) % 40.66% Food Processing % 49.84% Foreign Electronics % 27.25% Funeral Services % 28.40% Furn/Home % 68.43%

32 Furnishings Healthcare Information % 62.66% Heavy Truck & Equip % 53.43% Homebuilding % 43.68% Hotel/Gaming % 58.18% Household Products % 54.40% Human Resources % 72.46% Industrial Services % 60.09% Information Services % 39.37% Insurance (Life) % 37.38% Insurance (Prop/Cas.) % 32.19% Internet % % IT Services % 66.28% Machinery % 49.97% Maritime % 37.49% Med Supp Invasive % 70.51% Med Supp Non- Invasive % 77.14% Medical Services % 56.75% Metal Fabricating % 61.66% Metals & Mining (Div.) % 94.17% Natural Gas (Div.) % 38.49% Natural Gas Utility % 17.23% Newspaper % 68.48% Office Equip/Supplies % 45.21% Oil/Gas Distribution % 40.58% Oilfield Svcs/Equip % 53.22% Packaging & Container % 30.63% Paper/Forest Products % 66.84% Petroleum (Integrated) % 34.04% Petroleum (Producing) % 74.32% Pharmacy Services % 51.47% Pipeline MLPs % 27.01% Power % 54.54% Precious Metals % 85.40% Precision Instrument % 58.23% Property Management % 46.83% Public/Private Equity % 55.23% Publishing % 45.67% R.E.I.T % 39.63%

33 Railroad % 36.17% Recreation % 52.68% Reinsurance % 25.85% Restaurant % 62.23% Retail (Hardlines) % 78.52% Retail (Softlines) % 58.33% Retail Automotive % 40.84% Retail Building Supply % 33.94% Retail Store % 56.88% Retail/Wholesale Food % 30.92% Securities Brokerage % 19.92% Semiconductor % 66.20% Semiconductor Equip % 61.53% Shoe % 54.57% Steel % 42.96% Telecom. Equipment % 79.79% Telecom. Services % 54.96% Telecom. Utility % 38.12% Thrift % 44.35% Tobacco % 36.37% Toiletries/Cosmetics % 52.20% Trucking % 49.67% Utility (Foreign) % 18.14% Water Utility % 12.46% Wireless Networking % 62.50% Total Market % 56.59%