Appendix

J.C.Cord Valuation(Base)
2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Net sales

3139

4186

4579

4486

3605

3677.1

3750.642

3825.655

3902.168

3980.211

Cost of sales

2139

2909

3005

3060

2458

2941.68

3000.514

3060.524

3121.734

3184.169

Gross profit

1006

1373

1574

1426

1147

735.42

750.1284

765.131

780.4336

796.0423

461

646

730

746

622

551.565

562.5963

573.8482

585.3252

597.0317

Payroll tax

24

55

43

72

74

48.90543

49.88354

50.88121

51.89883

52.93681

rent

82

98

113

139

149

107.739

109.8938

112.0917

114.3335

116.6202

insurance

41

82

72

106

54.00924

55.08943

56.19122

57.31504

all oher

240

289

348

243

370

29.4168

30.00514

30.60524

31.21734

31.84169

Total

848

1170

1306

1306

1215

737.6263

806.388

822.5158

838.9661

855.7454

Operating income

158

203

268

120

-68

-2.20626

-56.2596

-57.3848

-58.5325

-59.7032

12

14

4.890543

4.988354

5.088121

5.189883

5.293681

Terminal
Value

Operating Cost
Salary/wages/commission

Other income
EBIT

158

203

268

-134

-54

2.684283

-51.2713

-52.2967

-53.3426

-54.4095

Income Tax

47.4

60.9

80.4

-40.2

-16.2

0.805285

-15.3814

-15.689

-16.0028

-16.3228

110.6

142.1

187.6

-93.8

-37.8

1.878998

-35.8899

-36.6077

-37.3398

-38.0866

19

41

62

65

26

21.6312

22.06382

22.5051

22.9552

23.4143

84.56895

4.326239

4.412764

4.501019

4.591039

669.1152

-3.68424

-3.75792

-3.83308

-3.90974

-730.174

-14.4681

-14.7574

-15.0526

-15.3536

-160.249

PV Factor

0.903531

0.816368

0.737613

0.666456

0.602164

0.602164

P of CF

-659.735

-11.8113

-10.8853

-10.0319

-9.24541

-96.4962

Earnings after tax

Depreciation
Capex
CNWC
FCF
Time

29.5

57.6

-829.5

-236.727

SSC Valuation (Base)

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Terminal

Net sales

19214

19829

24245

23834

15650

15593

15904.86

16222.96

16547.42

16878.36

17215.93

Cost of sales

14018

14983

19534

18096

11398

11323

11133.4

11356.07

11583.19

11814.86

12051.15

Gross profit

5196

4846

6711

5738

4252

4270

4771.458

4866.887

4964.225

5063.509

5164.78

2578

2882

3242

2465

2159

2862.875

2920.132

2978.535

3038.106

3098.868

Payroll taxes & fringes

262

274

319

295

168

197.2203

201.1647

205.188

209.2917

213.4776

Insurance

341

485

430

190

194.9026

198.8007

202.7767

206.8322

Advertising

190

235

77

202

132

122.4674

124.9168

127.4151

129.9634

132.5627

R.E Taxes/Rent

259

252

178

293

307

318.0972

324.4591

330.9483

337.5673

344.3186

All other

1203

1749

1882

954

1862

1081.53

1103.161

1125.224

1147.729

1170.683

Total

4833

5877

6128

4399

4628

4582.19

4868.737

4966.111

5065.434

5166.742

Operating Income(loss)

363

-1031

583

5738

-147

-358

189.2678

-1.84942

-1.88641

-1.92413

-1.96262

Other Income(expense)

190

734

221

-806

91

58.84798

60.02494

61.22544

62.44995

63.69895

EBIT

553

-297

804

4932

-140

-267

248.1158

58.17552

59.33904

60.52582

61.73633

Income Tax

165.9

-89.1

241.2

1479.6

-42

-80.1

74.43474

17.45266

17.80171

18.15774

18.5209

earnings after Tax

387.1

-207.9

562.8

3452.4

-98

-186.9

173.6811

40.72287

41.53732

42.36807

43.21543

128.1901

130.7539

133.369

136.0364

138.7571

Capex

8.37844

8.546009

8.716929

8.891268

9.069093

CNWC

1501.812

12.6441

12.89698

13.15492

13.41802

FCF

-1208.32

150.2867

153.2924

156.3583

159.4854

1865.794894

PV Factor

0.912131

0.831984

0.758878

0.692197

0.631374

0.631374309

P of CF

-1102.15

125.0361

116.3303

108.2307

100.695

1178.014962

Operating Cost
Salary/wages

Depreciation

Time

2|Page

Operational Restructuring (Cord)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Net sales

3139

4186

4579

4486

3605

3677.1

3750.642

3825.655

3902.168

3980.211

Cost of sales

2139

2909

3005

3060

2458

2941.68

3000.514

3060.524

3121.734

3184.169

Gross profit

1006

1373

1574

1426

1147

735.42

750.1284

765.131

780.4336

796.0423

461

646

730

746

622

367.71

375.0642

382.5655

390.2168

398.0211

Payroll tax

24

55

43

72

74

33.0939

33.75578

34.43089

35.11951

35.8219

rent

82

98

113

139

149

107.739

109.8938

112.0917

114.3335

116.6202

insurance

41

82

72

106

54.00924

55.08943

56.19122

57.31504

all oher

240

289

348

243

370

14.7084

15.00257

15.30262

15.60867

15.92085

Total

848

1170

1306

1306

1215

523.2513

587.7256

599.4801

611.4697

623.6991

Operating income

158

203

268

120

-68

212.1687

162.4028

165.6509

168.9639

172.3431

12

14

6.61878

6.751156

6.886179

7.023902

7.16438

Terminal
Value

Operating Cost
Salary/wages/commission

discontinued building Expense

266

Other income
EBIT

158

203

268

-134

-54

218.7875

169.154

172.537

175.9878

179.5075

Income Tax

47.4

60.9

80.4

-40.2

-16.2

65.63623

50.74619

51.76111

52.79633

53.85226

110.6

142.1

187.6

-93.8

-37.8

153.1512

118.4078

120.7759

123.1914

125.6553

19

41

62

65

26

21.6312

22.06382

22.5051

22.9552

23.4143

84.56895

4.326239

4.412764

4.501019

4.591039

29.5

57.6

-829.5

-236.727

669.1152

-3.68424

-3.75792

-3.83308

-3.90974

-578.902

139.8296

142.6262

145.4787

148.3883

1548.758

PV Factor

0.903531

0.816368

0.737613

0.666456

0.602164

0.602164

P of CF

-523.055

114.1524

105.203

96.9552

89.35404

932.6062

Earnings after tax

Depreciation
Capex
CNWC
FCF
Time

3|Page

Operational Restructuring (SSC)

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Terminal

Net sales

19214

19829

24245

23834

15650

15593

15904.86

16222.96

16547.42

16878.36

17215.93

Cost of sales

14018

14983

19534

18096

11398

11323

10974.35

11193.84

11417.72

11646.07

11878.99

Gross profit

5196

4846

6711

5738

4252

4270

4930.507

5029.117

5129.699

5232.293

5336.939

2578

2882

3242

2465

2159

2862.875

2920.132

2978.535

3038.106

3098.868

Payroll taxes & fringes

262

274

319

295

168

174.9535

178.4525

182.0216

185.662

189.3753

Insurance

341

485

430

190

194.9026

198.8007

202.7767

206.8322

Advertising

190

235

77

202

132

122.4674

124.9168

127.4151

129.9634

132.5627

R.E Taxes/Rent

259

252

178

293

307

318.0972

324.4591

330.9483

337.5673

344.3186

All other

1203

1749

1882

954

1862

1081.53

1103.161

1125.224

1147.729

1170.683

Total

4833

5877

6128

4399

4628

4559.923

4846.024

4942.945

5041.804

5142.64

Operating Income(loss)

363

-1031

583

5738

-147

-358

370.5832

183.0923

186.7541

190.4892

194.299

Other Income(expense)

190

734

221

-806

91

58.84798

60.02494

61.22544

62.44995

63.69895

EBIT

553

-297

804

4932

-140

-267

429.4312

243.1172

247.9796

252.9392

257.998

Income Tax

165.9

-89.1

241.2

1479.6

-42

-80.1

128.8294

72.93517

74.39387

75.88175

77.39939

earnings after Tax

387.1

-207.9

562.8

3452.4

-98

-186.9

300.6019

170.1821

173.5857

177.0574

180.5986

128.1901

130.7539

133.369

136.0364

138.7571

Capex

8.37844

8.546009

8.716929

8.891268

9.069093

CNWC

1317.743

8.962713

9.141967

9.324806

9.511302

FCF

-897.329

283.4273

289.0958

294.8777

300.7753

3518.722571

PV Factor

0.912131

0.831984

0.758878

0.692197

0.631374

0.631374309

P of CF

-818.482

235.8068

219.3886

204.1134

189.9018

2221.631032

Operating Cost
Salary/wages

Depreciation

Time

4|Page

Cord Swap Valuation

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Net sales

3139

4186

4579

4486

3605

3677.1

3750.642

3825.655

3902.168

3980.211

Cost of sales

2139

2909

3005

3060

2458

2941.68

3000.514

3060.524

3121.734

3184.169

Gross profit

1006

1373

1574

1426

1147

735.42

750.1284

765.131

780.4336

796.0423

461

646

730

746

622

367.71

375.0642

382.5655

390.2168

398.0211

Payroll tax

24

55

43

72

74

33.0939

33.75578

34.43089

35.11951

35.8219

rent

82

98

113

139

149

107.739

109.8938

112.0917

114.3335

116.6202

insurance

41

82

72

106

54.00924

55.08943

56.19122

57.31504

all oher

240

289

348

243

370

14.7084

15.00257

15.30262

15.60867

15.92085

Total

848

1170

1306

1306

1215

523.2513

587.7256

599.4801

611.4697

623.6991

Operating income

158

203

268

120

-68

212.1687

162.4028

165.6509

168.9639

172.3431

12

14

6.61878

6.751156

6.886179

7.023902

7.16438

Terminal
Value

Operating Cost
Salary/wages/commission

discontinued building Expense

266

Other income
EBIT

158

203

268

-134

-54

218.7875

169.154

172.537

175.9878

179.5075

Income Tax

47.4

60.9

80.4

-40.2

-16.2

65.63623

50.74619

51.76111

52.79633

53.85226

110.6

142.1

187.6

-93.8

-37.8

153.1512

118.4078

120.7759

123.1914

125.6553

19

41

62

65

26

21.6312

22.06382

22.5051

22.9552

23.4143

84.56895

4.326239

4.412764

4.501019

4.591039

29.5

57.6

-829.5

-236.727

669.1152

-3.68424

-3.75792

-3.83308

-3.90974

-578.902

139.8296

142.6262

145.4787

148.3883

1510.34

PV Factor

0.901526

0.812749

0.732714

0.66056

0.595512

0.595512

P of CF

-521.895

113.6463

104.5041

96.09743

88.36699

899.4252

Earnings after tax

Depreciation
Capex
CNWC
FCF
Time

5|Page

New Product

New Product
Inputs relating the underlying asset
Enter the present value of expansion potential (as assessed today) =
Entet the annualized standard deviation in ln(present value of CF)
Enter the initial investment needed for expansion option (in PV $) =
Enter the number of years you have rights to project
General Inputs
Enter the riskless rate that corresponds to the option lifetime =

$244.56
15.00%
$300.00
5

(in currency)
(in %)
(in currency)
(in years)

5.00%

(in %)

VALUING A LONG TERM OPTION/WARRANT

Stock Price=
Strike Price=
Expiration (in years) =

$244.56
$300.00
5

d1 =
N(d1) =

0.303946943
0.619415843

d2 =
N(d2) =

-0.031463254
0.487450048

Value of Option

T.Bond
rate=
Variance=
Cost of
delay =

5.00%
0.02
0.00%

$37.60

6|Page

Net sales
Cost of sales
Gross profit
Operating Cost
Salary/wages/commission
Payroll tax
rent
insurance
all oher
Total
Operating income
discontinued building Expense
Other income
EBIT
Income Tax
Earnings after tax
Depreciation
Capex
CNWC
FCF
Time
PV Factor

2007
3139
2139
1006

2008
4186
2909
1373

2009
4579
3005
1574

2010
4486
3060
1426

2011
3605
2458
1147

461
24
82
41
240
848
158

646
55
98
82
289
1170
203

730
43
113
72
348
1306
268

622
74
149

158
47.4
110.6

203
60.9
142.1

268
80.4
187.6

746
72
139
106
243
1306
120
266
12
-134
-40.2
-93.8

19

41

62

65

29.5

57.6

-829.5

Terminal
2012
2013
2014
2015
2016 Value
3677.1 3750.642 3825.655 3902.168 3980.211
2941.68 3000.514 3060.524 3121.734 3184.169
735.42 750.1284 765.131 780.4336 796.0423

367.71
33.0939
107.739
0
370 14.7084
1215 523.2513
-68 212.1687

375.0642
33.75578
109.8938
54.00924
15.00257
587.7256
162.4028

382.5655
34.43089
112.0917
55.08943
15.30262
599.4801
165.6509

14 6.61878 6.751156 6.886179

-54 218.7875 169.154 172.537
-16.2 65.63623 50.74619 51.76111
-37.8 153.1512 118.4078 120.7759
26

390.2168
35.11951
114.3335
56.19122
15.60867
611.4697
168.9639

398.0211
35.8219
116.6202
57.31504
15.92085
623.6991
172.3431

7.023902 7.16438
175.9878 179.5075
52.79633 53.85226
123.1914 125.6553

21.6312 22.06382 22.5051 22.9552 23.4143

84.56895 4.326239 4.412764 4.501019 4.591039

236.727 669.1152

-3.68424

-3.75792

-3.83308

-3.90974

-578.902 139.8296 142.6262 145.4787 148.3883 1548.758

1
2
3
4
5
5
0.903531 0.816368 0.737613 0.666456 0.602164 0.602164
7|Page

P of CF

-523.055 114.1524

105.203

96.9552 89.35404 932.6062

Back Up Plan(Retail)

Net sales

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

3139

4186

4579

4486

3605

3677.1

3750.642

3825.655

3902.168

3980.211

2941.68

3000.514

3060.524

3121.734

3184.169

Sales
Cost of sales

2139

2909

3005

3060

2458

2353.344

2400.411

2448.419

2497.387

2547.335

Gross profit

1006

1373

1574

1426

1147

588.336

600.1027

612.1048

624.3469

636.8338

461

646

730

746

622

294.168

300.0514

306.0524

312.1734

318.4169

Payroll tax

24

55

43

72

74

26.47512

27.00462

27.54471

28.09561

28.65752

rent

82

98

113

139

149

107.739

109.8938

112.0917

114.3335

116.6202

insurance

41

82

72

106

43.2074

44.07154

44.95297

45.85203

all oher

240

289

348

243

370

11.76672

12.00205

12.2421

12.48694

12.73668

Total

848

1170

1306

1306

1215

440.1489

492.1592

502.0024

512.0425

522.2833

Operating income

158

203

268

120

-68

148.1871

107.9435

110.1023

112.3044

114.5505

12

14

5.295024

6.751156

6.886179

7.023902

7.16438

Terminal
Value

Operating Cost
Salary/wages/commission

Other income
EBIT

158

203

268

-134

-54

153.4822

114.6946

116.9885

119.3283

121.7149

Income Tax

47.4

60.9

80.4

-40.2

-16.2

46.04465

34.40839

35.09656

35.79849

36.51446

110.6

142.1

187.6

-93.8

-37.8

107.4375

80.28624

81.89197

83.52981

85.2004

19

41

62

65

26

21.6312

22.06382

22.5051

22.9552

23.4143

84.56895

4.326239

4.412764

4.501019

4.591039

669.1152

-3.68424

-3.75792

-3.83308

-3.90974

-624.615

101.7081

103.7422

105.8171

107.9334

1268.792

Earnings after tax

Depreciation
Capex
CNWC
FCF
Time

29.5

57.6

-829.5

-236.727

8|Page

PV Factor

0.903531

0.816368

0.737613

0.666456

0.602164

0.602164

P of CF

-564.359

83.03118

76.52165

70.52245

64.99359

764.0203

Liquidation

Cash
Accounts receivables

Amount

Best Recover

Liquidation
Amount

Base Recover

Liquidation
Amount

Worst
Recover

Liquidation
Amount

33.5

100%

33.494

100%

33.494

100%

33.494

1196.6616

80%

1063.6992

60%

797.7744

1634.3628

60%

1400.8824

40%

933.9216

70.715

30%

42.429

62.0495

30%

37.2297

412.99875

60%
0%

330.399

1329.6

Inventories

2334.804

Other current asset

141.43

Other Assets

124.099

90%
70%
60%
60%

84.858
74.4594

Net fixed assets

50%
50%
75%

550.67
Cord investment in Shaw

80%
0%

480.00
Cord note to SSC

440.532
0%
0

0%
960.00

Loans to stockholders

Scenario

0%
0

0%
0

3,464.37
weight

value

0%
0

0%
132.00

0%

3,043.84
Weighted value

Best

3,464.37

0.2

692.87

Base

3,043.84

0.5

1,521.92

worst

2,175.25

0.3

652.57

Average liquidation value

Less: Transaction cost (30%)
Less: Legal fees (20%)
Liquidation value

2,175.25

2,867.37
Less: Transaction cost

860.21
573.47
1,433.68

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