cedc dcf

Period Ending 30-Dec-11 30-Dec-10 30-Dec-09Net Income -1,291,816 -104,667 78,329

Operating Activities, Cash Flows Provided By or Used InDepreciation 19,718 16,947 49,775Adjustments To Net Income 1,248,030 135,020 -66,261Changes In Accounts Receivables 60,604 -19,812 -21,433Changes In Liabilities -3,805 -51,564 -16,862Changes In Inventories -2,857 -5,828 35,590Changes In Other Operating Activities -115 3,094 33,181Total Cash Flow From Operating Activities 29,759 -29,386 89,752

Investing Activities, Cash Flows Provided By or Used InCapital Expenditures -15,075 -6,194 -16,080Investments - - - Other Cash flows from Investing Activities -41,779 463,615 -1,051,049Total Cash Flows From Investing Activities -56,854 457,421 -1,067,129

Financing Activities, Cash Flows Provided By or Used InDividends Paid - - - Sale Purchase of Stock 72 3,550 491,828Net Borrowings 10,019 -428,913 528,429Other Cash Flows from Financing Activities - 7,500 -7,876Total Cash Flows From Financing Activities 10,091 -417,863 997,964Effect Of Exchange Rate Changes -10,910 -14,287 21,213Change In Cash and Cash Equivalents -27,914 -4,115 41,800

Depr % of revenue 0.02246843 0.0238175 0.072199

Coverage RatiosDebt coverage 0.0164764 -0.0160447 0.03259042Interest coverage 1.5549893 0.9878702 2.47338978Debt payment

30-Dec-08 AVERAGE 2008Cash flows from operating activities of continuing operationsNet income / (loss) -14,918Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities:Net (income) / loss from discontinued operations -22,034Depreciation and amortization 9,929Deferred income taxes -19,285Unrealized foreign exchange (gains) / losses 133,528Cost of debt extinguishment 1,156Stock options fair value expense 3,850

97,670 Dividends received 0Hedge fair value revaluation 0Equity (income)/loss in affiliates -1,168Gain on fair value remeasurement of previously held equity intere 0Impairment charge 0Amortization of deferred charges 0Other non cash items 2,025Changes in operating assets and liabilities:Accounts receivable -84,480Inventories 8,745Prepayments and other current assets 13,864Trade accounts payable 27,952Other accrued liabilities and payables 38,506

Net cash provided by / (used in) operating activities from continu 97,670Cash flows from investing activities of continuing operationsInvestment in fixed assets -19,652

0.01738143 0.039495 Proceeds from the disposal of fixed assets 2,325Investment in trademarks 0Changes in restricted cash 0Purchase of financial assets -103,500Disposal of subsidiaries 0Acquisitions of subsidiaries, net of cash acquired -548,799

Net cash provided by / (used in) investing activities from continu -669,626Cash flows from financing activities of continuing operationsBorrowings on bank loans and overdraft facility 94,845Borrowings on long-term bank loans 35,617Payment of bank loans, overdraft facility and other borrowings -23,131Payment of long-term borrowings 0Net borrowings of Senior Secured Notes 0Payment of Senior Secured Notes -26,996Repayment of obligation to former shareholders 0Hedge closure 0Decrease in short term capital leases payable -772Increase in short term capital leases payable 1,216Issuance of shares in public placement 233,845Transactions with equity holders 0

Net borrowings on Convertible Senior Notes 304,403Options exercised 1,899

Net cash provided by / (used in) financing activities from continu 620,926

Cash flows from discontinued operationsNet cash provided by / (used in) operating activities of discontin -655Net cash (used in) investing activities of discontinued operations -2,920Net cash provided by / (used in) financing activities of discontinu -8,032

Net cash provided by/(used in) discontinued operations -11,607Adjustment to reconcile the change in cash balances of discontin 11,607Currency effect on brought forward cash balances -34,564Net increase / (decrease) in cash 14,406Cash and cash equivalents at beginning of period 70,233

Cash and cash equivalents at end of period 84,639

Supplemental Schedule of Non-cash Investing ActivitiesCommon stock issued in connection with investment in subsidiari 134,631

Supplemental disclosures of cash flow informationInterest paid 52,734Income tax paid 33,865

Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities:

Cash flows from operating activities of continuing operationsNet income / (loss)Adjustments to reconcile net income / (loss) to net cash provided by operating activities:Net loss from discontinued operationsDepreciation and amortizationDeferred income taxesUnrealized foreign exchange (gains) / lossesCost of debt extinguishmentStock options fair value expenseDividends receivedHedge fair value revaluationEquity (income)/loss in affiliatesGain on fair value remeasurement of previously held equity interestImpairment chargeAmortization of deferred chargesImpairments related to assets held for saleOther non cash itemsChanges in operating assets and liabilities:Accounts receivableInventoriesPrepayments and other current assetsTrade accounts payableOther accrued liabilities and payables (including taxes)

Net cash provided by operating activities from continuing operations

Cash flows from investing activities of continuing operationsPurchase of fixed assetsProceeds from the disposal of fixed assetsPurchase of intangibles (licenses)Changes in restricted cashPurchase of trademarksDisposal of subsidiariesAcquisitions of subsidiaries, net of cash acquired

Net cash provided by / (used in) investing activities from continuing operations

Cash flows from financing activities of continuing operationsBorrowings on bank loans and overdraft facilityPayment of bank loans, overdraft facility and other borrowingsPayment of long-term borrowingsNet borrowings of Senior Secured notesPayment of Senior Secured NotesRepayment of obligation to former shareholdersHedge closure

Decrease in short term capital leases payableIncrease in short term capital leases payableIssuance of shares in public placementTransactions with equity holdersOptions exercised

Net cash provided by / (used in) financing activities from continuing operations

Cash flows from discontinued operationsNet cash used in operating activities of discontinued operationsNet cash provided by investing activities of discontinued operationsNet cash provided by financing activities of discontinued operations

Net cash used in discontinued operations

Adjustment to reconcile the change in cash balances of discontinued operationsCurrency effect on brought forward cash balancesNet increase / (decrease) in cashCash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental Schedule of Non-cash Investing ActivitiesCommon stock issued in connection with investment in subsidiaries

Supplemental disclosures of cash flow informationInterest paidIncome tax paid

NCC % of sales2009 2010 2011 2008 2009 2010 2011 Average

0.19 -0.02 0.21 0.08 0.1681,037 -104,667 -1,291,816

-8,360 11,778 011,274 16,947 19,718

-34,941 -41,591 35,533-38,760 -2,911 139,728

0 14,114 03,782 3,206 2,605

10,868 10,859 09,160 0 05,583 -14,254 8,814

-32,727 0 -7,89820,309 131,849 1,057,81938,501 0 0

0 0 7,355-1,175 21,970 4,074

-21,433 -19,812 60,60435,590 -5,828 -2,85727,906 518 -115

-92,552 5,243 -6,773 108,001 -16,486 151,967 70,201 <-- total Non-cash charges75,690 -56,807 2,968

89,752 -29,386 29,759

-16,080 -6,194 -15,0753,874 0 511

0 0 -693-481,419 481,419 0

0 -6,000 -17,4730 124,160 0

-573,504 -135,964 -24,124

-1,067,129 457,421 -56,854

5,810 63,853 57,512-112,084 -174,251 -47,417-265,517 -19,098 0929,569 67,561 0

0 -367,954 0-28,814 0 0-14,417 0 0

-535 0 -760 976 0

490,974 0 0-7,876 7,500 0

854 3,550 72

997,964 -417,863 10,091

19,527 2,806 0-2,596 -330 0

-11,656 100 0

5,275 2,576 0

-5,275 -2,576 021,213 -14,287 -10,91041,800 -4,115 -27,91484,639 126,439 122,324

126,439 122,324 94,410

81,197 41,344 23,174

68,865 111,535 103,83616,270 29,544 5,139

<-- total Non-cash charges

Inputs Beta_equity 1.64Growth Rates:Cedc 60.60%Industry 16.41% Sector 15.02%S&P 500 10.71%Economy 3.50%RF_10yr 6.50%Excess period 5Risk Premium 5.79% 12.24%Cost of equity 16.00%Cost of debt 5.61%Debt spread - t-bond 6.75%Tax rate - Cedc 10-Q 21.00%Profit margin 13%NCC % of rev 16%Working Cap % of rev 46%Share price 3.3Shares outstanding 94,556,308 78,842,022MV of equity 312035816.4MV of debt 1,664,328,274D/V 0.84211622853238E/V 0.15788377146762WACC 7.25%

FCFF 2010 2011 Actual 2011 Adjusted 2012Period -2 -1 -1 0Revenue 877,587,000 877,587,000 848,433,058NI -1,291,816,000 -233,997 108,938,092NCC 1,267,748,000 70,201,000 100,000,000Interest expense 111,649,000 111,649,000 109,596,875Taxes -32,205,000 -32,205,000 86,581,531FCInv - Cap expenditures 15,075,000 15,075,000 12,500,000Working Capital 404,799 252,784,000 252,784,000 387,659,301Increase in WC -252,379,201 -252,379,201 134,875,301FCFF 301,438,911 395,473,914 148,144,323 PV of FCFF 148,144,323Sum of FCFF 3,336,200,311 Enterprise value 4,062,230,311 Value to comm equity 2,256,071,311 Intrinsic value 23.86 the way you did this looks fine-although we will have to adjust it to the new deal debt structure-but that shouldn’t have a material impact on the true value

0.094968572337650.10422

0.1158

2013 2014 2015 2016 Residual1 2 3 4

878,128,215 908,862,702 940,672,897 973,596,448112,750,925 116,697,208 120,781,610 125,008,966100,000,000 100,000,000 100,000,000 100,000,000419,596,875 100,296,875 100,296,875 1,334,096,875331,481,531 79,234,531 79,234,531 1,053,936,531

12,500,000 12,500,000 12,500,000 12,500,000401,227,376 415,270,334 429,804,796 444,847,964

13,568,076 14,042,958 14,534,462 15,043,168 518,164,381 269,388,781 272,981,680 1,251,402,330 1,724,614,355

483,143,632 234,205,405 221,288,892 945,870,705 1,303,547,354

the way you did this looks fine-although we will have to adjust it to the new deal debt structure-but that shouldn’t have a material impact on the true value

is it typical for ni to be regularly higher than fcf?

how does this compare to the historical cash flow statement-its imperative that were not overly optomistic on forecasting this we might not be discounting this at a high enough rate - as a going concern, they will increase their equity/debt-which will increase wacc also, interest rates will increase in the future

how does this compare to the historical cash flow statement-its imperative that were not overly optomistic on forecasting this we might not be discounting this at a high enough rate - as a going concern, they will increase their equity/debt-which will increase wacc

Statement of Operations data: 2006 2007 2008 2009 2010 2,011Sales 1,573,702 1,782,602Excise tax -862,165 -905,015Net sales 284,240 398,050 571,242 689,414 711,537 877,587Cost of goods sold 173,471 254,615 321,274 340,482 383,671 538,218Gross profit 110,769 143,435 249,968 348,932 327,866 339,369Sales, general and administrative expens 51,614 62,897 114,607 164,467 351,458 1,320,652Operating income / (loss) 59,155 80,538 135,361 184,465 -23,592 -981,283Non-operating income / (expense), netInterest expense, net -30,385 -33,867 -47,810 -73,468 -104,866 -111,649Other financial income / (expense), net 17,212 13,594 -123,801 25,193 6,773 -139,952Amortization of deferred charges 0 0 0 -38,501 0 0Other income / (expense), net 978 -2,272 -488 -934 -13,572 -17,913Income/(loss) before taxes and equity in 46,960 57,993 -36,738 96,755 -135,257 -1,250,797Income tax (expense)/benefit -8,057 -9,054 -1,382 -18,495 28,114 -32,205Equity in net earnings/(losses) of affiliate 0 0 1,168 -5,583 14,254 -8,814Net income / (loss) from continuing oper 38,902 48,939 -36,952 72,677 -92,889 -1,291,816Discontinued operationsIncome / (loss) from operations of distrib 31,203 36,087 27,203 9,410 -11,815 0Income tax benefit / (expense) -5,929 -6,856 -5,169 -1,050 37 0Income / (loss) on discontinued operatio 25,275 29,231 22,034 8,360 -11,778 0Net income / (loss) 64,177 78,170 -14,918 81,037 -104,667 -1,291,816Less: Net income attributable to noncontro 8,727 1,068 3,680 2,708 0 0Net income /(loss) attributable to CEDC 55,450 77,102 -18,598 78,329 -104,667 -1,291,816Net income / (loss) per common share, ba 1.55 1.96 -0.34 1.51 -1.49 -17.9Net income / (loss) per common share, di 1.53 1.93 -0.34 1.5 -1.49 -17.9Average number of outstanding shares o 35,799 39,871 44,088 53,772 70,058 72,172

Gross margin 39% 36% 44% 51% 46% 39%Operating margin 21% 20% 24% 27% -3% -112%Profit margin 23% 20% -3% 12% -15% -147%NOPM 0.208116 0.2023314 0.236959 0.267568 -0.033156 -1.1181604Tax rate -0.171572 -0.1561223 0.037618 0.191153 0.207856 -0.0257476Working capital % of revenue 0.641247 0.4293757 0.295953 0.517944 0.568908 0.2880444

Balance Sheet Data: 2006 2007 2008 2009 2010 2011Cash and cash equivalents 147,937 70,233 84,639 126,439 122,324 94,410Restricted cash 0 0 0 481,419 0 0Working capital 182,268 170,913 169,061 357,078 404,799 252,784Total assets 1,377,988 1,859,346 2,436,138 4,439,100 3,396,182 2,072,529Long-term debt and capital lease obligatio 394,342 468,509 804,941 1,331,815 1,251,933 1,237,941Stockholders’ equity 520,599 817,725 993,511 1,685,162 1,564,671 266,370

Common Size2011 2010 2009 2011 2010 2009

ASSETSCurrent AssetsCash and cash equivalents 94,410 122,324 126,439 0.045553 0.036018 0.028483Restricted cash 0 0 481,419 0 0 0.10845Accounts receivable, net o 466,317 478,379 475,126 0.224999 0.140858 0.107032Inventories 116,897 93,678 92,216 0.056403 0.027583 0.020774 <-- goodPrepaid expenses and other 36,989 35,202 33,302 0.017847 0.010365 0.007502Loans granted 0 0 1,608 0 0 0.000362Loans granted to affiliates 0 0 7,635 0 0 0.00172Deferred income taxes 8,455 80,956 82,609 0.00408 0.023837 0.018609Debt issuance cost 2,962 2,739 7,078 0.001429 0.000806 0.001594Current assets of disconti 0 0 267,561 0 0 0.060274

Total Current Assets 726,030 813,278 1,574,993 0.350311 0.239468 0.3548Intangible assets, net 463,848 627,342 773,222 0.223808 0.18472 0.174184Goodwill, net 666,653 1,450,273 1,484,072 0.321662 0.42703 0.334318Property, plant and equipm 179,478 201,477 215,916 0.086599 0.059325 0.04864 <-- goodDeferred income taxes 22,295 44,028 27,123 0.010757 0.012964 0.00611Equity method investment in 0 243,128 244,504 0 0.071589 0.05508Debt issuance costs 13,550 16,656 17,492 0.006538 0.004904 0.00394Non-current assets of disc 675 0 101,778 0.000326 0 0.022928

Total Non-Current Assets 1,346,499 2,582,904 2,864,107 0.649689 0.760532 0.6452

Total Assets 2,072,529 3,396,182 4,439,100 1 1 1

LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent LiabilitiesTrade accounts payable 144,801 114,958 113,006Bank loans and overdraft fac 85,762 45,359 81,053Income taxes payable 8,766 5,102 3,827Taxes other than income ta 188,307 182,232 208,784Other accrued liabilities 44,501 55,070 91,435Short-term obligations und 0 0 363,688Current portions of obligat 1,109 758 481Deferred consideration 0 5,000 160,880Current liabilities of disco 0 194,761

Total Current Liabilities 473,246 408,479 1,217,915Long-term debt, less curren 0 106,043Long-term obligations under 532 1,175 480

304,645

Long-term obligations unde 932,764 1,250,758 1,225,292Long-term accruals 2,027 2,572 3,214Deferred income taxes 92,945 168,527 198,174Non-current liabilities of discontinued op 0 2,820

Total Long Term Liabilities 1,332,913 1,423,032 1,536,023Stockholders’ EquityCommon Stock ($0.01 par va 727 708 694Additional paid-in-capital 1,369,471 1,343,639 1,296,391Retained earnings -1,131,566 160,250 264,917Accumulated other compreh 27,888 60,224 82,994Accumulated other compreh 0 40,316Less Treasury Stock at cos -150 -150 -150

Total CEDC Stockholders’ E 266,370 1,564,671 1,685,162Noncontrolling interests in subsidiaries 0 0

Total Equity 266,370 1,564,671 1,685,162

Total Liabilities and Stockh 2,072,529 3,396,182 4,439,100

Liquidity & Solvency RatiosCurrent 1.534149259 1.990991 1.2931879Quick 1.184853121 1.470585 0.4939302Cash 0.199494555 0.299462 0.1038159

LT debt - equtiy 5.00399069 0.909477 0.9114987Debt - equity 6.780639712 1.170541 1.6342275Total debt 0.871475864 0.539285 0.6203821Fin leverage 7.780639712 2.170541 2.6342275

ADJ - 2011 Average 2012 2013 2014

877,587538,218339,369262,833

76,536 ($1,664,328,274.09) 100,000.00 200,000.00 250,000.00 future value $146,410.00 $266,200.00 $302,500.00 total

-192,978

-233,997

-233,997

39%9%

-27% 13%0.228743670390.199504533660.45691206527

2006 2007 2008 20090

20,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

operating income

operating income

doing a comparison doesn’t hold much value because there are not any public companies that are similar to cedcconstellation(stz)

Feb-12

$ 85 $ - $ 437 $ 1,374,500

$ 2,034,300 $ 866,400 $ 2,632,900 $ 1,255,800

$ 7,109,900

$ 491,500

$ 708,100

$ 1,199,600 608700

$ 204,200

$ 2,421,400

$ 3,234,300

$ 2,600

$ 2,107,300

$ 2,676,000

$ 7,109,900

1.700.00044

1.208631.656910.623622.65691

2015 2016

300,000.00 350,000.00 $330,000.00 350,000.00

$1,395,110,000.00 ($1,664,328,274.09)

($269,218,274.09)

2006 2007 2008 20090

20,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

operating income

operating income

doing a comparison doesn’t hold much value because there are not any public companies that are similar to cedc

Debt OutstandingPrincipal Total interest due Due

310000000 18600000 semi 2013380000000 173375000 2016507000000 224981250 2016

70000000 10500000 201666700000 29598125 2016

102600000 30780000 2016107500000 32250000 2016

sum $ 1,543,800,000 520084375after-tax cost of debt

TotalLong-term debt obligations 1,237,409Interest on long-term debt 412,755Short-term debt obligations 85,762Interest on short-term debt 3,520Operating leases 46,182Capital leases 1,641Contracts with suppliers 7,867

Total 1,795,136

Forecasted Interest Expense

Total interest pmts

Interest rate Weight Weighted rate FV weighted maturitWeighted interst pmt0.03 0.20080321285141 0.00602409638554 620000000 18600000

0.09125 0.24614587381785 0.02246081098588 1900000000 1733750000.08875 0.32841041585698 0.02914642440731 2535000000 224981250

0.03 0.04534266096645 0.00136027982899 350000000 105000000.08875 0.04320507837803 0.00383445070605 333500000 29598125

0.06 0.06645938593082 0.00398756315585 513000000 307800000.06 0.06963337219847 0.00417800233191 537500000 32250000

1 0.07099162780153 6789000000 $ 520,084,375 0.05608338596321 4.39759036144578 $ 118,265,762

Less than 1 yr 1-3 yrs$ 0 $ 304,645 $

93,296 158,46085,762 0

3,520 011,670 26,000

1,109 5327,684 183

203,041 489,820

2012 2013 2014 2015 2016203,041,000 163273333.333333 163273333.333333 163273333.333333 53666333.3333333

9300000 31930000034675000 34675000 34675000 34675000 41467500044996250 44996250 44996250 44996250 551996250

2100000 2100000 2100000 2100000 721000005919625 5919625 5919625 5919625 726196256156000 6156000 6156000 6156000 1087560006450000 6450000 6450000 6450000 113950000

$ 109,596,875 $ 419,596,875 $ 100,296,875 $ 100,296,875 $ 1,334,096,875

pv ($1,664,328,274.09)

3-5 yrs More than 5 yrs932,764 0160,999 0

0 00 0

8,512 00 00 0

1,102,275 0

Not using these anymore, took into account the new debt deals the best I could and forecasted int pmts

Not using these anymore, took into account the new debt deals the best I could and forecasted int pmts

Poland Estimated dollar amtsVolume Sales Mix by Product Category 2009 2010 2011 2010Domestic Vodka 75% 73% 75% $ 160,900 Vodka Export 2% 3% 5% $ 6,612 Imports Beer 2% 7% 5% $ 15,429 Wine 13% 8% 10% $ 17,633 Spirits other than vodka 2% 5% 3% $ 11,021 Other 6% 4% 2% $ 8,816 Total 100% 100% 100% $ 220,411

Russia Estimated dollar amtsVolume Sales Mix by Product Category 2010 2011 2010Vodka domestic 78% 68% $ 359,272 Vodka export 7% 11% $ 32,242 Ready to drink products 15% 14% $ 69,091 Wine and spirits other than vodka 0% 7% $ - Total 100% 100% $ 460,605

Segment Net Sales Twelvemonths ended December 31,

2008 2009 2010 2011 Est 2012SegmentPoland 398000 259000 220,411 230,515 230,515Russia 129800 394000 460,605 616,065 554,459 Hungary 43000 37000 30,521 31,007 31,007

Total Net Sales $ 570,800 $ 690,000 $ 711,537 $ 877,587 $ 815,981

Year Ended December 31,2010 2011

($ in thousands)S,G&A 178,756 225,080Marketing 32,851 34,814Depreciation and amortization 8,002 10,837

Sub-Total 219,609 270,731Impairment charges in Poland 131,849 1,057,819Fair value adjustments 0 -7,898

Total operating expense 351,458 1,320,652

Year ended December 31,2010 2011

SegmentPoland 33,550 27,345Russia 77,732 42,713Hungary 5,442 5,448Sub-Total 116,724 75,506Impairment charges -131,849 -1,057,819Fair value adjustments 0 7,898Corporate overheadGeneral corporate overhead -5,261 -4,263Option expense -3,206 -2,605

Total operating income/(loss) -23,592 -981,283

December 31, 2010 2011

Raw materials and supplies 26,847 22,237In-process inventories 3,314 2,655Finished goods and goods for resale 63,517 92,005Total 93,678 116,897

Goodwill, as at December 31, 2009 1,484,072Foreign exchange impact -33,799

Goodwill, as at December 31, 2010 1,450,273

Impairment charges during the period -930,127Acquisitions during the period 269,555Foreign exchange impact -123,048

Goodwill, as at December 31, 2011 666,653

Estimated dollar amts Growth of Spirit Class2011 % Growth Est amt 2012

$ 172,886 0% $ 172,886 $ 11,526 5% $ 12,102 russian vodka market should decrease greatly long term as the government wants to decrease vodka consumption by 72% $ 11,526 5% $ 12,102 $ 23,052 5% $ 24,204 we need to see if rouste trading will enable cedc to develop other markets $ 6,915 5% $ 7,261 $ 4,610 5% $ 4,841 $ 230,515 $ 233,396

Estimated dollar amts Growth of Spirit Class2011 % Growth Est amt 2012

$ 418,924 -10% $ 377,032 $ 67,767 5% $ 71,156 $ 86,249 5% $ 90,562 $ 43,125 5% $ 45,281 $ 616,065 $ 584,030

Segment Net Sales Twelvemonths ended December 31,

2012 (spirit class estimate)

$ 233,396 polands trend is down $ 584,030 russias trend looked good through 2011;except that recent performance is not so great (20121q10q)

31,007 Also keep in mind hugely that russias long term vodka forecast due to regulations looks horrible

$ 848,433 (So maybe these two as a range) I also believe this to be between conservative and realistic

russian vodka market should decrease greatly long term as the government wants to decrease vodka consumption by 72%

we need to see if rouste trading will enable cedc to develop other markets

russias trend looked good through 2011;except that recent performance is not so great (20121q10q) Also keep in mind hugely that russias long term vodka forecast due to regulations looks horrible

CEDC Acquisitions

whitehall The Whitehall Group is one of the leading importers and distributors of premium wines and spirits in Russia.

date payments6/18/2008 $ 47,000,000 6/18/2008 $ 200,000,000 2/24/2009 $ 5,876,352 2/24/2009 $ 25,263,000 3/15/2009 $ 2,000,000

6/5/2009 $ 11,270,575 6/18/2009 $ 25,120,000 9/15/2009 $ 11,625,082

2/7/2011 $ 23,000,000 2/7/2011 $ 68,500,000

$ 7,500,000 total $ 427,155,009 this is in line for what cedc paid for the last 20% econ and 51% voting

date cedc received2010 dvd $ 10,900,000 that year cedc had changed its accounting method from consolidation to equity - which makes sense for the 10.9mm dvd

whitehall had net sales of 175mm in 2007 - idk what fcf waswhitehall had net sales of 155mm in 2011; which was consolidated into the 2011 10k

dvd discount model 1.I feel the dvd discount model is appropriate because cedc would want to get as much as they could in dvd, as much for there 80% stake warrented2. the question to answer is what growth rate whitehall would need for this price to make sense

value $ 427,155,009 dividend $ 13,080,000 this is adjusted for the 100% economic rights cedc now ownsdiscount rate 12% this is the rate cedc uses for russian affiliates

growth rate assumed 8.9378797597685400% 1. for this model, they assumed a 8.9% dvd perpeturity; But read the note below this one because this is way to simplistic and unrealistic2. in reality - this should be modeled using a three-period approach. 12% for excess growth period. Another period with a high discount rate due to the fact that the industry is very uncertain. Then 3.5% for long term

still don’t know fcf for whitehall - this dvd could be from retained earnings - which means that they are just fulling investors and making bad-econ choices

breakeven 1.lets look at this acquisition from a breakeven perspective, disregarding growth and synergies39.1885329724771 2. so without even discounting, it would take 39 years to breakeven for this acquisition

cedc also gave whitehall 7mm for working captial(this did not make much sense) not sure of date

As a result of this transaction, the Company acquired 100% of the voting and economic interest in the Whitehall Group and changed the accounting treatment for interest in Whitehall from the equity method of accounting to consolidation starting from February 7, 2011.

Import Portfolio We are one of the leading importers of wine and spirits in Russia. Whitehall, our main import company, has exclusive rights to import and distribute a number of brands of spirits and wines into Russia. Through Whitehall, we have one of the leading platforms for importing and distributing faster growing imported brown spirits and wines in Russia. Exclusively imported brands include the following:

SPIRITS WINES

Cortel Brandy

DeKuyper Hardy’sGreat Valley

Jose Cuervo

Label 5 Nobilo

Trivento

Janneau

we could look at the market at estimate a value for these import products

Concha y Toro

Robert Mondavi

Paul Masson

PascualToso

Kumala&Flagstone

Pere Magloire

The Whitehall Group is one of the leading importers and distributors of premium wines and spirits in Russia.

this is in line for what cedc paid for the last 20% econ and 51% voting

that year cedc had changed its accounting method from consolidation to equity - which makes sense for the 10.9mm dvd

1.I feel the dvd discount model is appropriate because cedc would want to get as much as they could in dvd, as much for there 80% stake warrented2. the question to answer is what growth rate whitehall would need for this price to make sense

this is adjusted for the 100% economic rights cedc now owns

1. for this model, they assumed a 8.9% dvd perpeturity; But read the note below this one because this is way to simplistic and unrealistic2. in reality - this should be modeled using a three-period approach. 12% for excess growth period. Another period with a high discount rate due to the fact that the industry is very uncertain. Then 3.5% for long term

still don’t know fcf for whitehall - this dvd could be from retained earnings - which means that they are just fulling investors and making bad-econ choices

1.lets look at this acquisition from a breakeven perspective, disregarding growth and synergies2. so without even discounting, it would take 39 years to breakeven for this acquisition

cedc also gave whitehall 7mm for working captial(this did not make much sense) not sure of date

As a result of this transaction, the Company acquired 100% of the voting and economic interest in the Whitehall Group and changed the accounting treatment for interest in Whitehall from the equity method of accounting to consolidation starting from February 7, 2011.

We are one of the leading importers of wine and spirits in Russia. Whitehall, our main import company, has exclusive rights to import and distribute a number of brands of spirits and wines into Russia. Through Whitehall, we have one of the leading platforms for importing and distributing faster growing imported brown spirits and wines in Russia. Exclusively imported brands include the following:

2. in reality - this should be modeled using a three-period approach. 12% for excess growth period. Another period with a high discount rate due to the fact that the industry is very uncertain. Then 3.5% for long term

As a result of this transaction, the Company acquired 100% of the voting and economic interest in the Whitehall Group and changed the accounting treatment for interest in Whitehall from the equity method of accounting to consolidation starting from February 7, 2011.

We are one of the leading importers of wine and spirits in Russia. Whitehall, our main import company, has exclusive rights to import and distribute a number of brands of spirits and wines into Russia. Through Whitehall, we have one of the leading platforms for importing and distributing faster growing imported brown spirits and wines in Russia. Exclusively imported brands include the following:

As a result of this transaction, the Company acquired 100% of the voting and economic interest in the Whitehall Group and changed the accounting treatment for interest in Whitehall from the equity method of accounting to consolidation starting from February 7, 2011.

We are one of the leading importers of wine and spirits in Russia. Whitehall, our main import company, has exclusive rights to import and distribute a number of brands of spirits and wines into Russia. Through Whitehall, we have one of the leading platforms for importing and distributing faster growing imported brown spirits and wines in Russia. Exclusively imported brands include the following:

S&P 500 CedcMonth Price Return Price Return06/2012 1362.16 3.96% 2.86 -27%08/1998 957.28 -14.58% 1.78 -9%07/1998 1120.67 -1.16% 1.96

Beta 1.64

For smaller and riskier firms

If interest coverage ratio is

greater than ≤ to Rating is Spread is

-100000 0.499999 D 12.00%

0.5 0.799999 C 10.50%

0.8 1.249999 CC 9.50%

1.25 1.499999 CCC 8.75%

1.5 1.999999 B- 6.75%

2 2.499999 B 6.00%

2.5 2.999999 B+ 5.50%

3 3.499999 BB 4.75%

3.5 3.9999999 BB+ 3.75%

4 4.499999 BBB 2.50%

4.5 5.999999 A- 1.65%

6 7.499999 A 1.40%

7.5 9.499999 A+ 1.30%

9.5 12.499999 AA 1.15%

12.5 100000 AAA 0.65%