ValueCo Corporation

Discounted Cash Flow Analysis

($ in millions, fiscal year ending December 31)
Operating Scenario 1
Mid-Year Convention Y Historical Period CAGR
2005 2006 2007 ('05 - '07) 2008
Sales - - - - -
% growth NA - - -
COGS - - - -
Gross Profit - - - - -
% margin - - - -
SG&A - - - -
EBITDA - - - - -
% margin - - - -
Depreciation & Amortization - - - -
EBIT - - - - -
% margin - - - -
Taxes - - - -
EBIAT - - - - -
Plus: Depreciation & Amortization - - - -
Less: Capital Expenditures - - - -
Less: Increase in Net Working Capital
Unlevered Free Cash Flow
WACC -%
Discount Period
Discount Factor
Present Value of Free Cash Flow

Enterprise Value Implied Equity Value and Share Price

Cumulative Present Value of FCF - Enterprise Value
Less: Total Debt
Terminal Value Less: Preferred Securities
Terminal Year EBITDA (2013E) - Less: Noncontrolling Interest
Exit Multiple -x Plus: Cash and Cash Equivalents
 Terminal Value -
Discount Factor 1.00 Implied Equity Value
Present Value of Terminal Value -
% of Enterprise Value -% Implied Share Price

Enterprise Value - Implied Share Price

Enterprise Value
Exit Multiple
0.0 -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0% 0 0 0 0 0
-0.5% 0 0 0 0 0
WACC

WACC
0.0% 0 0 $0 0 0
0.5% 0 0 0 0 0
1.0% 0 0 0 0 0

Assumptions
Sales (% growth) NA -% -% -%
COGS (% sales) -% -% -% -%
SG&A (% sales) -% -% -% -%
Depreciation & Amortization (% sales) -% -% -% -%
Capital Expenditures (% sales) -% -% -% -%
Tax Rate -% -% -% -%
Working Capital (% sales)

ValueCo Corporation
Sensitivity Analysis
($ in millions)
 Enterprise Value
Exit Multiple
0.0 -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0% 0 0 0 0 0
-0.5% 0 0 0 0 0
WACC

WACC
0.0% 0 0 $0 0 0
0.5% 0 0 0 0 0
1.0% 0 0 0 0 0

Implied Share Price

Exit Multiple
NA -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0%
-0.5%
WACC

WACC
0.0%
0.5%
1.0%

Implied Perpetuity Growth Rate

Exit Multiple
-% -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0%
-0.5%
WACC

WACC
0.0%
0.5%
1.0%

Calculation of Implied Share Price

Enterprise Value -
Less: Total Debt -
Less: Preferred Securities -
Less: Noncontrolling Interest -
Plus: Cash and Cash Equivalents -
Implied Equity Value -

Options/Warrants
Number of Exercise In-the-Money
Tranche Shares Price Shares Proceeds
Options 1 - - - -
Options 2 - - - -
Options 3 - - - -
Options 4 - - - -
Options 5 - - - -
Total - - -

Basic Shares Outstanding -

Plus: Shares from In-the-Money Options -
Less: Shares Repurchased -
Net New Shares from Options -
Plus: Shares from Convertible Securities -
Fully Diluted Shares Outstanding -

Implied Share Price -

 Operating Scenario Base

Projection Period CAGR

2009 2010 2011 2012 2013 ('08 - '13)
- - - - - -
- - - - -
- - - - -
- - - - - -
- - - - -
- - - - -
- - - - - -
- - - - -
- - - - -
- - - - - -
- - - - -
- - - - -
- - - - - -
- - - - -
- - - - -
- - - - -
- - - - -

0.5 1.5 2.5 3.5 4.5

1.00 1.00 1.00 1.00 1.00
- - - - -

d Share Price Implied Perpetuity Growth Rate

- Terminal Year Free Cash Flow (2013E) -
- WACC -
- Terminal Value -
-
- Implied Perpetuity Growth Rate -%
 - Implied EV/EBITDA
Enterprise Value -
- LTM 9/30/2008 EBITDA -

NA Implied EV/EBITDA -x

Implied Perpetuity Growth Rate

Exit Multiple
-% -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0%
-0.5%
0.0%
0.5%
1.0%

-% -% -% -% -%
-% -% -% -% -%
-% -% -% -% -%
-% -% -% -% -%
-% -% -% -% -%
-% -% -% -% -%
-% -% -% -% -%
 Implied Equity Value
Exit Multiple
0.0 -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0% 0 0 0 0 0
-0.5% 0 0 0 0 0
0.0% 0 0 $0 0 0
0.5% 0 0 0 0 0
1.0% 0 0 0 0 0

PV of Terminal Value as % of Enterprise Value

Exit Multiple
-% -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0%
-0.5%
0.0%
0.5%
1.0%

Implied Enterprise Value / LTM EBITDA

Exit Multiple
-x -1.0x -0.5x 0.0x 0.5x 1.0x
-1.0%
-0.5%
0.0%
0.5%
1.0%
ValueCo Corporation
Working Capital Projections
($ in millions)

Historical Period Projection Period

2005 2006 2007 2008 2009 2010 2011
Sales - - - - - - -
Cost of Goods Sold - - - - - - -

Current Assets
Accounts Receivable - - - - - - -
Inventories - - - - - - -
Prepaid Expenses and Other - - - - - - -
Total Current Assets - - - - - - -

Current Liabilities
Accounts Payable - - - - - - -
Accrued Liabilities - - - - - - -
Other Current Liabilities - - - - - - -
Total Current Liabilities - - - - - - -

Net Working Capital - - - - - - -

% sales - - - - - - -

(Increase) / Decrease in NWC - - - - - -

Assumptions
Days Sales Outstanding - - - - - - -
Days Inventory Held - - - - - - -
Prepaids and Other CA (% of sales) -% -% -% -% -% -% -%

Days Payable Outstanding - - - - - - -

Accrued Liabilities (% of sales) -% -% -% -% -% -% -%
Other Current Liabilities (% of sales) -% -% -% -% -% -% -%
ction Period
2012 2013
- -
- -

- -
- -
- -
- -

- -
- -
- -
- -

- -
- -

- -

- -
- -
-% -%

- -
-% -%
-% -%
ValueCo Corporation
Weighted Average Cost of Capital Analysis
($ in millions)

WACC Calculation Comparable Companies Unlevered Beta

Target Capital Structure Predicted Market
Debt-to-Total Capitalization -% Company Levered Beta(4) Value of Debt
Equity-to-Total Capitalization 100.0% CompCo1 - -
CompCo2 - -
CompCo3 - -
Cost of Debt CompCo4 - -
Cost of Debt -% CompCo5 - -
Tax Rate -%
After-tax Cost of Debt -% Mean -
Median -

Cost of Equity ValueCo Relevered Beta

Risk-free Rate(1) -%
Market Risk Premium(2) -%
Levered Beta -
Size Premium(3) -% Relevered Beta
Cost of Equity -%
WACC Sensitivity Analysis

Debt-to-Total Capitalization
Pre-tax C
WACC -% 0.0 -1.0%
-20.0% 0.2%
-10.0% 0.1%
0.0% 0.0%
10.0% -0.1%
20.0% -0.2%

(1) Interpolated yield on 20-year U.S. Treasury

(2) Obtained from Ibbotson SBBI Valuation Yearbook
(3) Low-Cap Decile size premium based on market capitalization, per Ibbotson
(4) Sourced from Barra
 Market Debt/ Marginal Unlevered
Value of Equity Equity Tax Rate Beta
- -% -% -
- -% -% -
- -% -% -
- -% -% -
- -% -% -

-% -
-% -

Mean Target Target

Unlevered Debt/ Marginal Relevered
Beta Equity Tax Rate Beta
- -% -% -

Pre-tax Cost of Debt

-0.5% 0.0% 0.5% 1.0%
0.1% 0.0% -0.1% -0.2%
0.1% 0.0% -0.1% -0.1%
0.0% 0.0% 0.0% 0.0%
-0.1% 0.0% 0.1% 0.1%
-0.1% 0.0% 0.1% 0.2%
`
Assumptions Page 1 - Income Statement and Cash Flow Statement

Projection Period
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
2009 2010 2011 2012 2013 2014

Income Statement Assumptions

Sales (% growth) -% -% -% -% -% -
Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

Cost of Goods Sold (% sales) -% -% -% -% -% -

Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

SG&A (% sales) -% -% -% -% -% -
Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

Depreciation & Amortization (% sales) -% -% -% -% -% -

Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

Cash Flow Statement Assumptions

Capital Expenditures (% of sales) -% -% -% -% -% -
Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -
eriod
Year 7 Year 8 Year 9 Year 10
2015 2016 2017 2018

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
Assumptions Page 2 - Balance Sheet

Projection Period
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
2009 2010 2011 2012 2013 2014

Current Assets
Days Sales Outstanding (DSO) - - - - - -
Base 1 - - - - - -
Management 2 - - - - - -
Upside 3 - - - - - -
Downside 1 4 - - - - - -
Downside 2 5 - - - - - -

Days Inventory Held (DIH) - - - - - -

Base 1 - - - - - -
Management 2 - - - - - -
Upside 3 - - - - - -
Downside 1 4 - - - - - -
Downside 2 5 - - - - - -

Prepaid and Other Current Assets (% of sales) -% -% -% -% -% -

Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

Current Liabilities
Days Payable Outstanding (DPO) - - - - - -
Base 1 - - - - - -
Management 2 - - - - - -
Upside 3 - - - - - -
Downside 1 4 - - - - - -
Downside 2 5 - - - - - -

Accrued Liabilities (% of sales) -% -% -% -% -% -

Base 1 -% -% -% -% -% -
 Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -

Other Current Liabilities (% of sales) -% -% -% -% -% -

Base 1 -% -% -% -% -% -
Management 2 -% -% -% -% -% -
Upside 3 -% -% -% -% -% -
Downside 1 4 -% -% -% -% -% -
Downside 2 5 -% -% -% -% -% -
eriod
Year 7 Year 8 Year 9 Year 10
2015 2016 2017 2018

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -

- - - -
- - - -
- - - -
- - - -
- - - -
- - - -