Page 121 - DMGT207_MANAGEMENT_OF_FINANCES

Management of Finances

Notes Exhibit 1: Consolidated Income Statements Year ended May 31
(in millions excepts per share data) 2000 2001 2002 2003 2004 2005 2006
Revenues 4,760.8 6,470.6 9,816.5 9,553.1 8,776.9 8,995.1 9,488.8
Cost of goods sold 2,865.3 3,906.7 5,503.0 6,065.5 5,493.5 5,403.8 7,784.9
Gross profit 1,895.6 2,563.9 3,683.5 3,487.6 3,283.4 3,591.3 3,703.9
Selling and administrative 1,209.8 1,588.6 2,303.7 2,623.8 2,426.6 2,606.4 2,689.7
Operating Income 685.8 975.3 1,379.8 863.8 856.8 984.9 1,014.2
Interst expense 24.2 39.5 52.3 60.0 44.1 45.0 58.7
Other expense net 11.7 36.7 32.3 20.9 21.5 23.2 34.1
Restructuring charge,net --- --- --- 129.9 45.1 2.5 ---
Income before Income taxes 649.9 899.1 1,295.20 653.0 746.1 919.2 921.4
Income taxes 250.2 345.9 499.4 253.4 294.7 340.1 331.7
Net Income 399.7 553.2 795.8 399.6 451.4 579.4 589.7
Diluted earning per Annum Shares 1.4 1.9 2.7 1.4 1.6 2.1 2.2
Average shares outstanding (diluted) 294.0 293.6 297.0 296.0 287.5 279.8 273.3
Growth(%)
Revenue 35.9 42.0 4.0 8.1 2.5 5.5
Operating income 42.2 41.5 37.4 0.8 15.0 3.0
Net income 38.4 43.9 49.8 13.0 28.3 1.8
Margins (%)
Gross margin 39.6 40.1 36.5 37.4 39.9 39.0
Operating margin 15.1 15.0 9.0 9.8 10.9 10.7
Net margin 8.5 8.7 4.2 3.1 6.4 6.2
Effective tax rate (%) 38.5 38.6 38.8 39.5 37.0 36.0

Exhibit 2: Discounted-Cash-flow Analysis

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Assumption
Revenue growth (%) 7.0 6.5 6.5 6.5 6.0 6.0 6.0 6.0 6.0 6.0
COGS/Sales (%) 60.0 60.0 59.5 59.5 59.0 59.0 58.5 58.5 58.0 58.0
S & A / Sales (%) 28.0 27.5 27.0 26.5 26.0 25.5 25.0 25.0 25.0 25.0
Tax rate (%) 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0
Current Assets / sales (%) 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0
Current liabilities/ sales (%) 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.5
Yearly depreciations Equals capex.
Cost of Capital (%) 12.0
Terminal growth rate (%) 3.0
Discounted cash flow
Opeating income 1,218.4 1,351.6 1554.6 1717.0 1950.0 2135.9 2410.2 2554.8 2790.1 2957.5
Taxes 463.0 513.6 590.8 652.5 741.0 811.7 915.9 970.8 1060.2 1123.9
NOPAT 755.4 838.0 963.9 1064.5 1209.0 1324.3 1494.3 1584.0 1729.9 1833.7
Capex.net of dereciation --- --- --- --- --- --- --- --- --- ---
Change in NWC 8.8 -174.9 186.3 198.4 195.0 206.7 219.1 232.3 246.2 261.0
Free cash flow 764.1 663.1 776.6 866.2 1014.0 1176.6 1275.2 1351.7 1483.7 1572.7
Terminal value 17998.7
Total flows 764.1 663.1 776.6 866.2 1014.0 1176.6 1275.2 1351.7 1483.7 19571.5
Present value of flows 682.3 528.6 553.5 550.5 575.4 566.2 576.8 545.9 535.0 6301.5
Enterprise value 11415.7
Less : current outstanding dept. 1296.6
Equity value 10119.1
Current shares outstanding 271.5
Equity value per share $37.27 Current share price $42.09

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