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Winfield Refuse Management Inc.Raising Debt vs. Equity

Iris ChenAlex HoBrian HuangPramod JindalMichael Trecroce


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Executive Summary

Objective

Alternatives

Recommendation

Criteria

What is the best fnancing option or the $125M ac!isition oMott"#liese ntegrated %ol!tions &M#%'(

1) *ebt +ith ,i-ed #rincipal Repa.ments2) *ebt

/) 0!it.) *ebt 0!it.

Winfeld sho!ld fnance the $125M thro!gh iss!e o bonds +ithno principal repa.ments

mpact on ,irm3 4otal Cost o ,inancing 'mpact on %hareholders3

0#% RO0Ris7 4olerance3 nterest coverage8 *ebt coverage8 *ividend coverage

Winfeld Re!se Management 2


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Introduction

Winfeld

M#%Winfel

d 9M#%

$2:M $15M $2M

Mid+est Mid"Atlantic Mid+est

Mid+est Mid"Atlantic

9 ;

et ncome et ncome et ncome

Region Region Region

Winfeld Re!se Management /


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Winfields Current Financial Position

5


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Financing Alternatives

1+ Debt with ,ied Prin&ipal$epay'ents 15 .ears ?)5= interest rate $?)25M ann!al principal

pa.ment

Capital Needs: $125M.+ Debt 15 .ears ?)5= interest rate ,!ll principal paid at ear 15

1

Winfeld Re!se Management >

Earnings Per Share#re"ac!isition 0#%3 $1)@/

$


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Adj!sted 0#% ; &"principal repa.ment' n!mber o shares

Gigher earnings per share +ith the bond option8 eventreating principal repa.ments as He-pensesI

Winfeld Re!se Management 12 @25 @5@

2-

:-

12-

1:-

22-

2:-

Debt $etire'ent oera;e

*ebt +ith ,i-ed #rincipal Repa.ment *ebtEsti'ated $etained Earnin;s by .0.> (in !)*

Winfeld can sael. meet debt obligations !nder all fnancingalternatives)


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Dividend Payout CoverageAss!ming Winfeld contin!es to pa. $1 dividend per share to all o its

shareholders in each fnancing option3

1*ividend to 15M e-isting shareholders pl!s additional shareholders needed or the

respective option)Winfeld Re!se Management 1/

? @ 5< 52 5 5? 5@ ?

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