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Review of Aviator
April 2006
Table of Contents
Section
1
Review of Aviator
A
Business Overview
Current Valuation
Shareholder Profile
Valuation of Aviator
A
Transaction Considerations
CONFIDENTIAL
8202529, v1
Section 1
Review of Aviator
Section 1-A
Business Overview
Snapshot of Aviator
Summary Income Statement
FY Ending 9/30
Revenue
Growth %
EBIT
Operating Margin %
CONFIDENTIAL
($ in millions)
2003A
2004A
2005E
2006E
2007E
$3,796.0
NA
$63.0
1.7
$4,069.0
7.2
$324.0
8.0
$4,934.0
21.3
$320.7
6.5
$5,316.0
7.7
$393.4
7.4
$5,635.0
6.0%
$495.9
8.8%
%
%
%
%
%
%
Revenue
Growth %
EBIT
Operating Margin %
($ in millions)
2004A
2005E
2006E
2007E
$2,048.0
NA
$71.0
3.5
$2,275.3
11.1
$110.6
4.9
$2,450.1
7.7
$146.0
6.0
$2,597.1
6.0%
$189.4
7.3%
%
%
%
%
Media servers
Aviator IP Office
Voice messaging
Media gateways
Telephone handsets
Telephone handsets
CONFIDENTIAL
AviatorGlobal Services
Summary Income Statement
FY Ending 9/30
Revenue
Growth %
EBIT
Operating Margin %
($ in millions)
2004A
2005E
2006E
2007E
$1,761.0
NA
$249.0
14.1
$2,658.7
60.0
$210.1
7.9
$2,865.9
7.8
$249.0
8.7
$3,037.9
6.0
$306.5
10.1
%
%
%
%
%
%
Global Services
Global Services is focused on supporting Aviators customer base with comprehensive, end-to-end global service offerings that enable customers to plan,
design, implement, monitor and manage their converged communications networks worldwide.
Maintenance
CONFIDENTIAL
Business Area
Voice
Services
Applications
Call Center
CONFIDENTIAL
Geographic Region
EMEA
North America
APAC
Nortel
26%
Siemens
16%
NEC
Aviator
21
Alcatel
15
Fujitsu
NEC
10
Aviator
11
Oki
Mitel
Ericsson
10
Samsung
Cisco
Nortel
Nortel
Inter-Tel
Samsung
LG Electronics
Cisco
8%
HP
8.3%
Fujitsu
Aviator
NextiraOne
5.0
HP
HP
Siemens
4.5
Cisco
Northrop Grumman
Cisco
3.9
IBM
Verizon
Nokia
3.5
NEC
IBM
IBM
3.4
Nortel
12%
Aviator
12
Nortel
Polycom
Polycom
Cisco
IBM
IBM
Cisco
Microsoft
Microsoft
Aviator
36%
Aviator
31%
Aviator
55%
Nortel
22
Nortel
23
Nortel
20
Siemens
Alcatel
11
NEC
Aspect
Aspect
Huawei
Aviator
11%
22%
11%
Not Available
AviatorProduct Comparison
Review of Large IP PBXs (1,000 + Stations)(1)
Ratings
Architecture
(2)
Aviator S8710
Media Server,
G650 Gateway
Cisco IP
Communications
System
Alcatel
OmniPCX
Enterprise
ShoreTel
ShoreTel5
Siemens
HiPath 4000
15
14
12
12
10.5
11
Endpoints(3)
20
20
19.5
19
17.5
18
15
11
12
12.5
11.5
11.5
(5)
20
17.5
17.5
15
17
16.5
Security(6)
10
8.5
5.5
Performance(7)
20
19
17
20
16.5
13
100
90
87
83.5
78
75.5
Features
Total
CONFIDENTIAL
CONFIDENTIAL
Risk of technology substitution from open standard IP-based technologies that could
eliminate the need for specialized voice vendors (Commoditization Effect)
Dealing with the threat from IP-Centrex offerings, especially as service providers look for
new revenue platforms
CONFIDENTIAL
2004
12/15/04
11/18/04
10/04/04
08/04/04
2003
11/26/03
10/02/03
2001
04/12/01
03/07/01
02/14/01
CONFIDENTIAL
Target
Amount
Paid
Description
Route Science
Tenovis Germany GmbH
Spectel
Tata Telecom (now Aviator
GlobalConnect Ltd.)
$7 M
371 M
106 M
18 M
A maker of adaptive networking software (ANS) for enterprises and service providers.
A European-based provider of enterprise communications systems and services.
A provider of audio and web conferencing solutions.
An India-based communication solutions provider and a distributor of Aviator products in
India.
Expanets
152 M
A provider of converged communications for mid-sized businesses, and one of the largest
resellers of Aviators products in the United States.
An IT services business unit that develops Java-based software for contact center
platforms, interactive voice response systems, and CRM software.
VISTA Information
Technologies, Inc.
NA
Quintus Corporation
Cyber IQ Systems
30 M
NA
120M
Section 1-B
05/24/04:
07/06/04:
07/27/04:
11/18/04:
01/25/05:
02/24/05:
04/19/05:
10/26/04:
10/28/04:
11/01/04:
Commenced a cash tender offer for any and all of its 11-1/8%
Senior Secured Notes due 2009.
Section 1-C
Bank
Rating
Price Target
Date
Market Perform
NA
05/03/05
Tavis McCourt
Morgan Keegan
Gina Sockolow
Neutral
NM
04/25/05
Jiong Shao
Lehman Brothers
Neutral
$7.40
04/21/05
Scott Coleman
Morgan Stanley
Attractive
16.00
04/20/05
Long Jiang
UBS
Buy 2
13.00
04/20/05
Frank Marsala
First Albany
Neutral
NA
04/20/05
Ehud Gelblum
JP Morgan
Neutral
NA
04/20/05
Manuel Recarey
Kaufman Brothers
Buy
12.00
04/20/05
Timm Bechter
Legg Mason
Buy
21.00
04/20/05
Eric Buck
Janco Partners
Market Perform
9.00
04/20/05
Jason Ader
Thomas Weisel
Peer Perform
NA
04/20/05
Christin Armacost
SG Cowen
NA
NA
04/20/05
Samuel Wilson
JMP Securities
Strong Buy
20.00
04/20/05
Inder Singh
Prudential
Overweight
14.00
04/20/05
B. Alex Henderson
Smith Barney
Buy
20.00
04/13/05
Section 1-D
Current Valuation
Current ValuationAviator
($ in millions, except per share data)
Stock Price
Current Value
$9.53
489.298
Cash
$688.3
(1
)
52-week High
17.76
52-week Low
7.76
AverageLast 30 days
9.00
Analyst Estimates
Net Income
CY 2007E
Equity Value
Enterprise Value
$4,663.0
3,996.7
Total Debt
22.0
Shareholders Equity
Total Debt/Total Capitalization
1,238.3
1.7 %
Revenue
EBITDA
EBIT
$396.2
$5,719.5
$788.9
$513.8
CY 2006E
367.3
5,395.8
686.9
419.0
CY 2005E
296.8
5,029.5
626.4
338.9
Current Value as
a Multiple of:
Equity Value/
Net Income
Revenue
CY 2007E
11.8x
CY 2006E
CY 2005E
Enterprise Value/
EBITDA
EBIT
0.70x
5.1x
7.8x
12.7
0.74
5.8
9.5
15.7
0.79
6.4
11.8
Section 1-E
(1)
Based on 477.043 million basic shares and 20.696 million in-the-money options with a weighted average strike price of $3.89.
($ in millions)
2003
2004
Revenues
% Growth
$4,387.0
NA
$2,370.0
NM
$2,523.0
$4,069.0
7.2
%
$2,124.0
$4,462.0
NM
Cost of Sales
$3,796.0
(13.5
%)
$2,157.0
$2,330.0
$1,264.0
Gross Profit
% Gross Margin
$1,864.0
42.5
%
$1,639.0
43.2
%
$1,945.0
47.8
%
$2,132.0
47.8
%
$1,106.0
46.7
%
Operating Expenses
$2,218.0
$1,576.0
$1,621.0
$1,780.0
$966.0
Operating Income
($354.0
)
(8.1
%)
$63.0
$324.0
$352.0
$140.0
1.7
%
7.9
%
7.9
%
5.9
%
1.0
(51.0
)
($404.0
)
(29.0
)
(78.0
)
($44.0
)
(15.0
)
(66.0
)
$243.0
(40.0
)
(41.0
)
$271.0
(38.0
)
(15.0
)
$87.0
$273.0
$84.0
$43.0
$18.0
NM
NM
($49.0
)
NM
15.9
%
20.7
%
(677.0
)
(128.0)
292.0
228.0
69.0
% Operating Margin
Other Income (expense), net
Interest Expense
Pretax Income
Income Taxes (Benefit)
Effective Tax Rate
Net Income from Cont. Operations
LTM 3/31/2005
6 Months Ended
3/31/05
2002
Diluted EPS
EBITDA
% EBITDA Margin
($2.47
)
($0.34
)
$0.64
$0.48
$0.15
($158.0
)
$234.0
$471.0
$567.4
$287.4
(3.6
%)
6.2
%
11.6
%
12.4
%
12.1
%
($ in millions)
$855
793
364
69
139
$2,220
$747
360
939
390
187
$4,843
Accounts Payable
Debt Maturing within one year
Payroll and Benefit Obligations
Deferred Revenue
Other Current Liabilities
Total Current Liabilities
$403
74
289
234
365
$1,365
Long-Term Debt
Benefit Obligations
Deferred Income Taxes, net
Other Liabilities
Total Non Current Liabilities
Total Shareholders Equity
Total Liabilities and Shareholders Equity
Source: Company 10-K for period ended September 30, 2004 and Press release for period ended March 31, 2005. Shown as reported.
114
1,595
119
411
$2,239
1,239
$4,843
2004A
2005E
2006E
2007E
Revenue
% Growth
$3,769.0
NA
$4,069.0
8.0
%
$4,934.0
21.3
%
$5,316.0
7.7
%
$5,635.0
6.0
%
EBITDA
% Margin
$229.0
6.1
%
$471.0
11.6
%
$615.4
12.5
%
$659.5
12.4
%
$769.2
13.7
%
EBIT
% Margin
$58.0
1.5
%
$324.0
8.0
%
$320.7
6.5
%
$393.4
7.4
%
$495.9
8.8
%
Diluted EPS(1)
% Growth
NA
NA
$0.64
NA
$0.54
(15.5
%)
$0.70
29.4
%
$0.78
11.3
%
10.0
%
Section 1-F
Source: Aviator public filings, Wall Street research, and Bear Stearns estimates.
(1) Based on 480.014 million basic shares and 20.696 million in-the-money options with a weighted average strike price of $3.89.
Jocelyne J. Attal
Chief Marketing Officer
Pamela F. Craven
Sr. Vice President,
General Counsel & Secretary
Louis J. DAmbrosio
Group Vice President,
Global Sales and Channels
and Marketing
Maryanne DiMarzo
Sr. Vice President,
Human Resources
Patricia R. Hume
Global Vice President,
Small and Medium Business
Solutions
David P. Johnson
Group Vice President,
Europe, Middle East and
Africa
Thomas A. Lesica
Group Vice President,
Global Information
Technology and Business
Operations
Karyn Mashima
Sr. Vice President,
Strategy and Technology
Garry K. McGuire
Chief Financial Officer
and Sr. Vice President,
Corporate Development
Francis M. Scricco
Group Vice President,
Avaya Global
Ravi Sethi
President,
Avaya Labs
Michael C. Thurk
Group Vice President,
Enterprise Communications
Group
Director Profile(1)
Board Composition
Insiders
Outsiders
9.1 %
10
Total
90.9
11
100.0 %
Beneficial
Ownership/
(% O/S)
Director
Since
Term
Expires
Age
Donald K. Peterson
2002
2007
55
Previously, Mr. Peterson had been executive vice president and chief financial officer of
Lucent Technologies from 1996-2000. He has also served in various capacities at
Northern Telecom, State Mutual Life Assurance Company and Nortel. He is a member
of the board of directors of Reynolds and Reynolds Co.; a member of the board of
trustees of Worcester Polytechnic Institute; a member of the Council on Foreign
Relations; a member of the World Economic Forum; a member of the board of overseers
of the Amos Tuck School of Business Administration, and a trustee for the Committee
for Economic Development.
5,784,834
1.3%
Joseph P. Landy
2003
2007
43
Mr. Landy has been co-president of Warburg Pincus LLC since January 2002 and a
managing general partner since October 2002. Mr. Landy is also a member of the board
of Indus International Inc., Neustar, Inc., The Cobalt Group and ezGov, Inc.
70,095
NM
Mark Leslie
2001
2007
58
Mr. Leslie is currently the managing director of Leslie Ventures, a private investment
company. He is also an adjunct professor at Stanford Graduate School of Business and
Stanford UniversityGraduate Engineering. Mr. Leslie served as chairman of the board
of Veritas Software Corporation until December 2001 and remains on the board as a
director. Mr. Leslie has also worked at Leslie Consulting (owner) and Rugged Digital
Systems (CEO). Mr. Leslie is a director of WebEx Communications, Inc. and a number
of privately held high-technology corporations.
98,721
NM
Anthony P. Terracciano
2003
2007
65
Mr. Terracciano is vice chairman, American Water Works Company, Inc. and is the
former chairman of Dime Bancorp. He has held executive positions with First Union
Corporation, First Fidelity Bancorporation, Mellon Bank Corp. and Chase Manhattan
Bank.
148,343
NM
Bruce R. Bond
2002
2006
58
Mr. Bond is the former chairman and CEO of PictureTel Corporation. Mr. Bond is a
retired global telecommunications executive with 23 years of experience in the Bell
System, including Ohio Bell, AT&T, US West and Mountain Bell. He has also spent six
years with British Telecom, in London, UK, responsible for transforming the Products
and Services Group as well as leading the National Business Communications Group.
49,908
NM
Directors
Position
Description
Director
Since
Term
Expires
Age
Position
Description
Dan C. Stanzione
2000
2006
59
Dr. Stanzione, president emeritus, Bell Laboratories, served as chief operating officer of
Lucent Technologies, Inc. from November 1997 to October 1999 and as the president of Bell
Laboratories at Lucent. Dr. Stanzione is also a director of Quest Diagnostics, Inc.
125,942
NM
Ronald L. Zarrella
2002
2006
54
Mr. Zarrella is chairman and CEO of Bausch & Lomb. He was president of General Motors
North America before returning to Bausch & Lomb as chairman and CEO in November
2001. He was previously with Bausch & Lomb from 1985 through 1994, first as president of
its international division, then as president and COO. Mr. Zarrella is also a member of the
board of US FIRST (For Inspiration and Recognition of Science and Technology).
64,939
NM
Philip A. Odeen
2002
2005
69
Mr. Odeen is the retired chairman of TRW Inc. Mr. Odeen was president and chief executive
officer of BDM, which TRW acquired in 1997, and directed its growth and evolution as a
multi-national information technology (IT) firm. Mr. Odeen has served in senior positions
with the Office of the Secretary of Defense and the National Security Council staff. Mr.
Odeen is also a member of the board of Convergys Corporation, The Reynolds and Reynolds
Company and WGL Holdings, Inc.
125,131
NM
Hellene S. Runtagh
2003
2005
56
Ms. Runtagh is the former president and CEO of Berwind Group, an enterprise with
businesses in multiple industries. Prior to joining Berwind, from 1997 to 2001, Ms. Runtagh
held senior level positions at Universal Studios and General Electric Company. Ms. Runtagh
is also a member of the board of Covad Communications Group and Lincoln Electric
Holdings.
51,908
NM
Paula Stern
2002
2005
59
Dr. Stern is chairwoman of The Stern Group, Inc., an economic analysis and international
business and trade advisory firm. She is currently a member of the US Presidents Advisory
Committee for Trade Policy and Negotiations and previously served as chairwoman of the
US International Trade Commission. Dr. Stern is also a member of the board of Avon
Products, Inc., Hasbro, Inc. and The Neiman Marcus Group.
51,213
NM
Richard F. Wallman
2003
2005
53
Mr. Wallman is the former senior vice president and chief financial officer of Honeywell
International Inc. Mr. Wallman previously served as chief financial officer of AlliedSignal
Inc., prior to its merger with Honeywell. He also held various positions at IBM Corporation
and Chrysler Corporation. Mr. Wallman is also a member of the board of Ariba, Inc.,
ExpressJet Holdings, Inc., Hayes-Lemmerz and Lear Corporation.
14,016
NM
Directors
(1)
Section 1-G
Shareholder Profile
(1)
Warburg Pincus
Dodge & Cox
Fidelity Management & Research
Lord, Abbett & Co.
Barclays Global Investors
Friess Associates
SSgA Funds Management
Vanguard Group
Wellington Management
AIM Management Group
Calamos Advisors
Top 10 Institutions
Top 15 Institutions
Top 20 Institutions
All Other Institutions
Total Institutions
(2)
Insider Ownership
Donald Peterson
Louis DAmbrosio
Michael Thurk
Other Officers and Directors
Total Insiders
Other Shareholders
Basic Shares Outstanding
Shares Held
% of Total
47,955,205
24,811,519
16,979,323
16,214,594
15,082,667
12,913,000
11,960,949
11,883,167
11,103,715
10,080,020
7,282,718
186,266,877
216,434,130
236,594,164
131,293,886
367,888,050
10.0
5.2
3.5
3.4
3.1
2.7
2.5
2.5
2.3
2.1
1.5
38.8
45.1
49.3
27.4
76.6
1,250,174
328,500
214,130
1,792,804
1,013,384
2,806,188
109,320,035
480,014,273
0.3
0.1
0.0
0.4
0.2
0.6
22.8
100.0
%
%
%
Section 1-H
(1)
(2)
Source: LionShares.
Holdings obtained at a cost basis of approximately $9.16 per share.
Aviator Profile(1)
State of Incorporation
Headquarters
Capital Stock
Delaware
Basking Ridge, NJ
1,700,000,000 authorized common shares (480,014,016 basic shares outstanding).
200,000 authorized preferred shares (none outstanding).
Annual Meeting:
Shareholder Meetings
Directors
Cumulative Voting
Shareholder Action by
Written Consent
(1)
80% shareholder vote required to amend articles V, VIII and IX of the Charter
including:
Election of directors
Re-election/removal of directors
Sources: SharkRepellent.net, Company Corporate Charter as amended on 1/12/03 and Amended and Restated By-laws.
(1)
By-laws: The by-laws may be amended by at least a majority of the total number of
directors then necessary to constitute a full Board. Any by-law may be further amended
or reinstated by a majority of shareholders by vote at either an annual or special
shareholder meeting (provided the amendment is timely included in order of business).
All Officers and Directors of the Company are fully indemnified by the Company
Sources: SharkRepellent.net, Company Corporate Charter as amended on 1/12/03 and Amended and Restated By-laws.
Section 2
Valuation of Aviator
(1)
Sources: SharkRepellent.net, Company Corporate Charter as amended on 1/12/03 and Amended and Restated By-laws.
Section 2-A
($ in millions)
Aviator Enterprise Value Range as a Multiple of CY 2006E/2005E
Valuation Method
$4,500
$4,500
$5,500
$4,500
$5,750
$5,500
$6,500
$6,250
Add:
Cash
Option Proceeds
$688.3
80.4
$688.3
212.0
Less:
Total Debt
Minority Interest
Total Adjustments
$22.0
0.0
$746.7
$22.0
0.0
$878.3
$5,246.7
$7,128.3
497.739
508.173
$10.54
$14.03
$9.53
$9.53
Premium/(Discount)
10.6
%
47.2 %
Revenues
0.83
x
0.89
EBITDA
1.07
x
1.14
6.6
x
7.2
0.83
x
0.89
1.02
x
1.09
6.6
x
7.2
1.02
x
1.09
1.20
x
1.29
8.0
x
8.8
0.83
x
1.16
x
0.89
1.24
CY 2006E/2005E
EBIT
EBITDA
$5,395.8
$686.9
$419.0
$374.8
5,029.5
626.4
338.9
298.7
$5,395.8
$686.9
$419.0
$374.8
5,029.5
626.4
338.9
298.7
$5,395.8
$686.9
$419.0
$374.8
5,029.5
626.4
338.9
298.7
8.4
x
9.2
10.7
x
13.3
13.7
x
17.0
13.8
x
17.3
8.0
x
8.8
10.7
x
13.3
13.1
x
16.2
13.8
x
17.3
9.5
x
10.4
13.1
x
16.2
15.5
x
19.2
16.5
x
20.6
6.6
x
9.1
x
10.7
x
14.9
x
13.8
x
18.5
x
$5,395.8
$686.9
$419.0
$374.8
7.2
10.0
13.3
18.4
17.3
23.2
5,029.5
626.4
338.9
298.7
17.1
x
21.5
EBIT
Net
Income
Revenues
16.5
x
20.6
19.1
x
24.0
Assumes 20.696 million in-the-money options at a weighted average strike price of $3.89 and
31.130 million in-the-money options at a weighted average strike price of $6.81.
Valuation Matrix
($ in millions, except per share data)
Market
$9.53
Premium Over:
Stock Price (05/27/05)
52-Week High
52-Week Low
AverageLast 30 days
$9.53
17.76
7.76
9.00
0.0
%
(46.3
)
22.8
5.9
$10.00
4.9%
$11.00
15.4%
25.9%
$13.00
36.4%
$14.00
46.9%
(43.7)
(38.1)
(32.4)
(26.8)
(21.2)
28.9
11.2
41.8
22.3
54.6
33.4
67.5
44.5
80.4
55.6
497.739
$80.4
$4,663.0
497.739
$80.4
$4,896.9
497.739
$80.4
$5,394.7
497.739
$80.4
$5,892.4
508.173
$212.0
$6,394.2
508.173
$212.0
$6,902.4
+ Debt
+ Minority Interest
- Cash
Enterprise Value
$22.0
688.3
$3,996.7
$22.0
688.3
$4,230.6
$22.0
688.3
$4,728.4
$22.0
688.3
$5,226.1
$22.0
688.3
$5,727.9
$22.0
688.3
$6,236.1
$396.2
367.3
296.8
$5,719.5
CY 2006E Revenue
CY 2005E Revenue
5,395.8
5,029.5
CY 2007E EBITDA
$788.9
CY 2006E EBITDA
CY 2005E EBITDA
686.9
626.4
11.8
x
12.7
15.7
12.4x
13.6x
14.9x
16.1x
17.4x
13.3
16.5
14.7
18.2
16.0
19.9
17.4
21.5
18.8
23.3
0.70
x
0.74
0.79
0.74x
0.83x
0.91x
1.00x
1.09x
0.78
0.84
0.88
0.94
0.97
1.04
1.06
1.14
1.16
1.24
5.1
x
5.8
6.4
5.4x
6.0x
6.6x
7.3x
6.2
6.8
6.9
7.5
7.6
8.3
8.3
9.1
9.1
10.0
9.2x
10.2x
11.1x
12.1x
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
2007EofEBIT
$513.8
7.8
8.2x
(1) CY
Multiple
Equity Value.
7.9x
CY 2006E EBIT
CY 2005E EBIT
419.0
338.9
x
9.5
11.8
10.1
12.5
11.3
14.0
12.5
15.4
13.7
16.9
14.9
18.4
15.00%
PV of Terminal Value
PV of Enterprise
Implied FCF Growth Rate
PV per Share(1)
16.00%
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
$1,345.3
3,075.8
3,618.6
4,161.3
3,539.5
4,084.1
4,628.6
3,419.5
3,799.5
4,179.4
3,510.7
3,761.5
$1,345.3
4,012.3
$4,421.11
$4,963.89
$5,506.68
$4,884.87
$5,429.41
$5,973.95
$4,764.87
$5,144.82
$5,524.77
$4,856.06
$5,106.82
$5,357.59
6.8
%
7.9
%
8.8
%
7.8
%
8.7
%
9.4
%
7.6
%
8.3
%
8.8
%
7.7
%
8.2
%
8.6
%
$10.32
$11.41
$12.49
$11.25
$12.34
$13.42
$11.01
$11.77
$12.53
$11.19
$11.69
$12.19
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
$1,315.7
PV of Terminal Value
2,960.3
3,482.7
4,005.1
3,406.6
3,930.7
4,454.8
3,291.2
3,656.8
4,022.5
3,378.9
3,620.3
3,861.6
PV of Enterprise
$4,276.0
$4,798.4
$5,320.8
$4,722.3
$5,246.4
$5,770.5
$4,606.8
$4,972.5
$5,338.2
$4,694.6
$4,935.9
$5,177.3
7.7
%
8.9
%
9.8
%
8.7
%
9.6
%
10.4
%
8.5
%
9.2
%
9.8
%
8.7
%
9.1
%
9.5
%
$10.03
$11.08
$12.12
$10.92
$11.97
$13.02
$10.69
$11.42
$12.15
$10.87
$11.35
$11.83
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
$1,287.0
PV of Terminal Value
17.00%
2,850.1
3,353.0
3,856.0
3,279.8
3,784.4
4,289.0
3,168.6
3,520.7
3,872.8
3,253.1
3,485.5
3,717.9
PV of Enterprise
$4,137.1
$4,640.1
$5,143.1
$4,566.9
$5,071.5
$5,576.0
$4,455.7
$4,807.7
$5,159.8
$4,540.2
$4,772.5
$5,004.9
8.6
%
9.8
%
10.7
%
9.7
%
10.6
%
11.3
%
9.4
%
10.1
%
10.7
%
9.6
%
10.1
%
10.5
%
$9.76
$10.76
$11.76
$10.61
$11.62
$12.63
$10.39
$11.09
$11.80
$10.56
$11.02
$11.49
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
$1,259.5
PV of Terminal Value
2,744.9
3,229.3
3,713.6
3,158.7
3,644.7
4,130.6
3,051.6
3,390.7
3,729.8
3,133.0
3,356.8
3,580.6
PV of Enterprise
$4,004.3
$4,488.7
$4,973.1
$4,418.2
$4,904.1
$5,390.1
$4,311.1
$4,650.2
$4,989.2
$4,392.5
$4,616.3
$4,840.1
9.6
%
10.8
%
11.7
%
10.6
%
11.5
%
12.3
%
10.4
%
11.1
%
11.7
%
10.6
%
11.0
%
11.4
%
$9.49
$10.46
$11.42
$10.32
$11.29
$12.26
$10.10
$10.78
$11.46
$10.27
$10.71
$11.16
18.00%
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
2005
2006
Revenue
$4,934.0
$5,316.0
$5,635.0
EBITDA
$615.4
$659.5
(294.7
)
EBIT
EBIT Margin
Taxes
Tax Rate
Unlevered Net Income
Depreciation & Amortization
(Increase)/Decrease in Working Capital
Capital Expenditures & Additions to Intangible Assets
Other Cash Flows
2009
2010
$5,973.1
$6,331.6
$6,711.5
$769.2
$847.9
$952.8
$1,010.0
(266.1
)
(273.3
)
(280.5
)
(288.0
)
(305.3
)
$320.7
6.5
%
$393.4
7.4
%
$495.9
8.8
%
$567.4
9.5
%
$664.8
10.5
%
$704.7
10.5
%
($38.7
)
12.1
%
($42.8
)
10.9
%
($109.1
)
22.0
%
($192.9
)
34.0
%
($226.0
)
34.0
%
($239.6
)
34.0
%
$282.0
$350.6
$386.8
$374.5
$438.8
$465.1
$294.7
(49.1
)
(155.2
)
3.4
$266.1
(65.2
)
(172.7
)
9.6
$273.3
(26.0
)
(171.6
)
(11.4
)
$280.5
(25.5
)
(173.5
)
(9.0
)
$288.0
(23.8
)
(175.4
)
(9.8
)
$451.1
$447.1
$517.7
Unlevered
Free Cash Flow
$375.8
$388.4
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: Discounted back to May 01, 2005.
(1) Assumes $855.0 million cash, $80.4 million option proceeds, $188.0 million debt and 500.710 gross diluted shares.
% Growth
NA
3
%
16
%
(1
%)
16
%
Stock Price
05/09/05
Equity
Value
Enterprise
Value
P/E
CY 2005E
CY 2006E
Aviator
$9.08
$4,185.6
$ 3,518.6
0.70
x
5.6
x
10.4x
0.65
x
5.1
x
8.4
x
15.7
x
12.7
x
Enterprise Communications
Alcatel
10.95
15,286.5
14,812.2
6.8x
9.6x
Aspect
Cisco
Inter-Tel
InterVoice
Nortel
Polycom
9.02
18.21
19.23
11.00
2.62
15.66
575.3
117,893.7
588.3
434.9
9,330.1
1,562.4
415.5
101,368.7
373.4
394.7
10,079.1
1,347.5
0.88
x
1.12
3.93
0.83
2.35
1.14
2.33
4.9
11.1
5.8
11.7
12.6
10.1
6.6
12.6
6.4
15.1
19.9
13.9
0.85
x
1.06
3.53
0.77
2.11
1.08
2.10
6.4
x
4.3
9.9
5.1
9.2
9.1
8.5
9.0
x
5.4
11.2
5.8
11.4
12.5
11.5
14.5
x
15.8
19.3
13.8
18.4
29.7
20.3
12.0
x
13.5
17.0
12.0
16.9
18.6
17.2
1.80
x
1.14
9.0
x
10.1
12.0x
1.64
x
1.08
7.5
x
8.5
9.6
x
11.2
18.8
x
18.4
15.3
x
16.9
1.14
x
0.81
0.82
0.39
0.46
8.3
x
5.6
5.4
6.1
5.6
9.6x
0.95
x
0.76
0.75
0.36
0.44
6.7
x
5.1
4.8
5.1
4.3
8.0
x
8.2
6.8
6.7
10.0
14.8
x
13.7
12.5
11.5
NM
12.5
x
12.1
10.8
9.0
19.7
0.72
x
0.81
6.2
x
5.6
12.8x
0.65
x
0.75
5.2
x
5.1
7.9
x
8.0
13.1
x
13.1
12.8
x
12.1
$10.35
12.69
40.95
9.78
25.07
12.94
24.90
$10.02
7.59
15.35
8.80
16.10
17.31
14.18
$7.99
5.94
10.03
5.85
11.75
14.96
10.93
$10.63
12.87
39.51
9.78
24.28
13.12
24.17
$10.35
7.35
15.19
8.49
14.20
14.06
13.16
$9.06
6.01
10.89
6.40
11.05
12.01
11.14
$10.08
10.86
12.91
9.68
12.38
19.09
13.53
$10.33
11.37
13.98
10.32
13.89
15.12
14.12
12.98
9.62
9.73
5.38
6.14
11.90
8.51
8.30
9.15
8.55
7.98
7.64
6.95
8.09
20.02
11.74
9.68
9.58
5.42
6.28
10.66
8.55
8.11
8.56
7.36
8.17
8.38
7.21
7.13
9.88
10.26
9.62
8.89
8.27
NA
10.65
10.36
9.40
8.10
15.92
Mean
Median
Enterprise / Telecom Services
Black Box
34.21
607.6
637.4
Convergys
CGI Group
Getronics
Unisys
13.04
5.61
1.62
6.88
1,862.9
2,506.0
1,372.2
2,320.6
2,163.4
2,684.5
1,335.0
2,711.2
Mean
Median
AviatorImplied Enterprise Value
Enterprise Communications
Alcatel
Aspect
Cisco
Inter-Tel
InterVoice
Nortel
Polycom
Enterprise/Telecom Services
Black Box
Convergys
CGI Group
Getronics
Unisys
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
12.6
9.1
8.1
9.7
27.3
9.6
Transaction
Date
Equity
Value
Enterprise
Value
Nuance
05/09/2005
$212.5
$113.8
Avaya
Tenovis
11/18/2004
370.5
635.5
1.49
x
1.00
Polycom
Alcatel
Nortel
InterVoice
PictureTel
Genesys
Periphonics
Brite Voice
05/22/2001
09/28/1999
08/23/1999
04/26/1999
357.7
1,526.8
419.6
172.0
358.4
1,465.3
392.0
159.5
0.92
7.25
2.27
0.97
6.5
x
6.7
26.1
14.7
10.5
Enterprise/Telecom Services
Nortel
PEC Solutions
04/26/2005
471.1
448.0
IBM
Warburg-Providence
Cisco
Avaya
CGI
GTCR
Corio
Telcordia
NetSolve
Expanets
AMS
Syniverse
01/25/2005
11/18/2004
09/09/2004
11/26/2003
03/09/2004
02/14/2002
182.0
1,350.0
128.0
152.0
858.0
770.0
174.1
1,350.0
89.0
152.0
795.7
770.0
1.65
x
2.94
1.53
2.21
0.36
0.78
2.45
AviatorImplied Valuation
Acquiror
Target
Enterprise Communications
ScanSoft
Nuance
Avaya
Tenovis
Polycom
PictureTel
Alcatel
Genesys
Nortel
Periphonics
InterVoice
Brite Voice
Enterprise/Telecom Services
Nortel
PEC Solutions
IBM
Corio
Warburg-Providence
Telcordia
Cisco
NetSolve
Avaya
Expanets
CGI
AMS
GTCR
Syniverse
Revenue
Enterprise Value/Forward
EBITDA
Acquiror
Enterprise Communications
ScanSoft
NA
EBIT
Forward
P/E
49.5
x
NA
42.1
x
NA
15.7
33.8
19.9
16.8
20.7
53.0
31.1
27.4
11.9
x
NA
7.7
NA
NA
8.9
6.3
13.2
x
NM
8.9
NM
NM
17.3
7.4
22.5
x
NM
NA
NM
NA
31.3
NA
$16.21
11.35
10.56
72.93
23.86
11.05
NA
9.48
9.73
33.57
19.56
14.40
NM
NA
11.55
23.14
14.24
12.25
NM
NA
11.58
29.39
17.31
15.27
$17.77
30.46
16.57
23.27
5.02
9.21
25.64
$16.12
NA
10.96
NA
NA
12.37
9.24
$9.95
NA
7.19
NA
NA
12.57
6.23
$12.57
NA
NA
NA
NA
17.42
NA
Note: Based on Aviators Forward Revenue of $4934.0 million, Forward EBITDA of $615.4 million, Forward EBIT of $320.7 million, and Forward Net Income of $276.2 million.
Note: Based on Aviators Cash of $855.0 million, Debt of $188.0 million, and Option Proceeds of $80.4 million.
(1)
4.39 %
7.20
12.0
Comparable Company
Enterprise Communications
Alcatel
Aspect
Cisco
Inter-Tel
InterVoice
Nortel
Polycom
Mean
Enterprise/Telecom Services
Black Box
Convergys Corporation
CGI Group
Getronics
Unisys
Mean
Consolidated Mean
Aviator
Barra Beta
Debt/Equity(3)
Unlevered Beta(4)
1.62
1.64
1.45
1.32
1.41
2.21
1.61
1.61
39.1%
0.1
0.0
0.0
2.4
40.1
0.0
11.7%
1.20
1.64
1.45
1.32
1.38
1.63
1.61
1.46
1.24
1.14
1.00
1.99
1.75
1.43
1.53
2.44
6.7%
18.1
14.7
15.1
45.3
20.0%
15.1%
4.5
1.17
0.98
0.89
1.76
1.25
1.21
1.36
2.35
Debt/
Capitalization
9.1%
16.7
23.1
28.6
33.3
Levered
Beta(5)
2.56
2.76
2.97
3.18
3.38
Cost of
Equity(6)
22.8%
24.3
25.8
27.3
28.7
6.00%
21.2%
7.00%
21.3%
21.1
21.0
21.0
20.9
21.3
21.2
21.2
21.2
9.00%
21.4%
21.6
21.7
21.7
21.8
10.00%
21.5%
21.7
21.9
22.0
22.1
Debt/
Capitalization
9.1%
16.7
23.1
28.6
33.3
Levered
Beta(6)
1.53
1.66
1.78
1.90
2.03
Cost of
Equity(7)
15.4%
16.3
17.2
18.1
19.0
6.00%
14.5%
7.00%
14.6%
14.5
14.5
14.4
14.4
14.6
14.7
14.7
14.7
9.00%
14.7%
14.9
15.1
15.2
15.3
Note: Based on Aviators Forward Revenue of $4934.0 million, Forward EBITDA of $615.4 million, Forward EBIT of $320.7 million, and Forward Net Income of $276.2 million.
Note: Based on Aviators Cash of $855.0 million, Debt of $188.0 million, and Option Proceeds of $80.4 million.
10.00%
14.8%
15.1
15.3
15.4
15.6
Section 2-B
Aviator Sum-of-the-Parts
Valuation
Note: Barra Beta as of May 9, 2005.
WACC = Kd * D/(D+E) + Ke * E/(D+E) .
(1) Yield on 20-year Treasury Bond as of March 9, 2005.
(2) Long-term horizon expected equity risk premium. Source: Ibbotson Associates.
(3) Total debt divided by market value of equity.
(4) Unlevered Beta = Predicted Beta / (1+ (1-tax)*D/E).
(5) Levered Beta = Unlevered Beta * (1+(1-tax)*D/E)).
(6) Cost of Equity = Risk-free Rate + (Levered Beta * Market Risk Premium) + Market Capitalization Premium.
Sum-of-the-Parts Valuation
($ in millions)
Value Range as a Multiple of CY 2006E/2005E
Valuation Method
$2,000
$2,500
Global Services
$2,500
$3,750
$4,500
$6,250
Revenues
EBITDA
EBIT
0.80
x
1.01
x
7.8
x
9.8
x
12.7
15.9
x
0.86
1.08
9.1
11.3
16.7
0.86
0.92
1.29
1.38
5.8
6.1
8.7
9.2
9.5
11.4
9.1
x
10.7
x
0.83
x
0.89
x
1.16
x
6.5
x
1.24
7.18
9.97
13.3
CY 2006E/2005E
Unlevered Net
Income
14.5
Unlevered
Net Income
Revenues
EBITDA
EBIT
$156.9
$138.0
18.1
$2,486.8
$256.3
20.9
x
19.0
x
23.8
2,319.0
220.4
119.5
105.1
14.2
17.1
10.8
12.9
16.2
19.4
2,908.9
2,710.5
433.0
406.7
263.4
219.8
231.8
193.4
14.9
x
12.2
x
16.9
$5,395.8
$689.3
$420.2
$369.8
18.4
15.1
x
20.9
5,029.5
627.1
339.3
298.6
Section 2-C
Enterprise Communications
Group Valuation
Enterprise
Value Range
$2,000
$2,000
$2,200
$2,000
$2,600
$2,500
$2,600
$2,500
Revenues
0.80
x
0.86
0.80
x
0.86
0.88
x
0.95
0.80
x
0.86
EBITDA
1.05
x
1.12
7.8
x
9.1
1.01
x
1.08
1.05
x
1.12
1.01
x
1.08
EBIT
12.7
x
16.7
10.1
x
11.8
7.8
9.8
9.1
8.6
CY 2006E/2005E
16.6
x
21.8
12.7
15.9
11.3
16.7
10.1
14.0
10.1
11.8
7.8
9.1
Revenues
EBITDA
EBIT
Unlevered
Net Income
$2,486.8
$256.3
$156.9
$138.0
18.8
x
24.7
2,319.0
220.4
119.5
105.1
14.5
18.1
$2,486.8
$256.3
$156.9
$138.0
20.9
19.0
23.8
2,319.0
220.4
119.5
105.1
16.6
15.9
18.8
$2,486.8
$256.3
$156.9
$138.0
18.4
21.8
20.9
24.7
2,319.0
220.4
119.5
105.1
9.8
12.7
15.9
14.5
18.1
$2,486.8
$256.3
$156.9
$138.0
11.3
16.7
20.9
19.0
23.8
2,319.0
220.4
119.5
105.1
$2,000.0
$2,100.0
$2,400.0
$2,500.0
$172.6
138.0
105.1
11.6 x
14.5
19.0
12.2 x
15.2
20.0
12.7 x
15.9
20.9
13.3 x
16.7
21.9
13.9 x
17.4
22.8
14.5 x
18.1
23.8
CY 2007E Revenue
CY 2006E Revenue
CY 2005E Revenue
$2,636.0
2,486.8
2,319.0
0.76 x
0.80
0.86
0.80 x
0.84
0.91
0.83 x
0.88
0.95
0.87 x
0.92
0.99
0.91 x
0.97
1.03
0.95 x
1.01
1.08
CY 2007E EBITDA
CY 2006E EBITDA
CY 2005E EBITDA
$298.3
256.3
220.4
6.7 x
7.8
9.1
7.0 x
8.2
9.5
7.4 x
8.6
10.0
7.7 x
9.0
10.4
8.0 x
9.4
10.9
8.4 x
9.8
11.3
CY 2007E EBIT
CY 2006E EBIT
CY 2005E EBIT
$196.2
156.9
119.5
10.2 x
12.7
16.7
10.7 x
13.4
17.6
11.2 x
14.0
18.4
11.7 x
14.7
19.2
12.2 x
15.3
20.1
12.7 x
15.9
20.9 x
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: EBITDA, EBIT, and Unlevered Net Income are all adjusted for allocation of corporate overhead.
14.50%
15.00%
$502.9
1,667.7
$2,170.7
9.4%
15.50%
$508.7
1,700.2
$2,208.8
8.9%
$497.3
1,636.1
$2,133.3
9.9%
16.00%
$491.7
1,605.1
$2,096.8
10.4%
$508.7
1,870.2
$2,378.9
9.4%
$502.9
1,834.5
$2,337.4
9.9%
$497.3
1,799.7
$2,296.9
10.4%
$491.7
1,765.6
$2,257.3
10.9%
$508.7
2,040.2
$2,548.9
9.8%
$502.9
2,001.3
$2,504.2
10.3%
$497.3
1,963.3
$2,460.5
10.8%
$491.7
1,926.1
$2,417.9
11.3%
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: EBITDA, EBIT, and Unlevered Net Income are all adjusted for allocation of corporate overhead.
$508.7
2,009.3
$2,518.0
9.8%
$502.9
1,971.0
$2,473.9
10.2%
$497.3
1,933.6
$2,430.8
10.7%
$491.7
1,897.0
$2,388.7
11.2%
$508.7
2,232.6
$2,741.3
10.2%
$502.9
2,190.0
$2,692.9
10.7%
$497.3
2,148.4
$2,645.7
11.2%
$491.7
2,107.8
$2,599.5
11.7%
$508.7
1,690.3
$2,198.9
8.9%
$502.9
1,658.0
$2,160.9
9.4%
$497.3
1,626.5
$2,123.8
9.9%
$491.7
1,595.8
$2,087.5
10.3%
$508.7
1,851.2
$2,359.9
9.4%
$502.9
1,815.9
$2,318.8
9.8%
$497.3
1,781.4
$2,278.7
10.3%
$491.7
1,747.7
$2,239.5
10.8%
2005
2006
Revenue
$2,275.3
$2,450.1
$2,597.1
EBITDA
$212.3
$244.8
(101.7
)
EBIT
EBIT Margin
Taxes
Tax Rate
Unlevered Net Income
Depreciation & Amortization
Deferred Taxes
(Increase)/Decrease in Working Capital
Capital Expenditures
Other Cash Flows
Unlevered Free Cash Flow
2009
2010
$2,752.9
$2,918.1
$3,093.2
$290.9
$320.4
$359.7
$406.2
(98.8
)
(101.4
)
(104.1
)
(106.9
)
(113.3
)
$110.6
4.9
%
$146.0
6.0
%
$189.4
7.3
%
$216.3
7.9
%
$252.8
8.7
%
$292.9
9.5
%
($13.3
)
12.1
%
($15.9
)
10.9
%
($41.7
)
22.0
%
($73.5
)
34.0
%
($86.0
)
34.0
%
($99.6
)
34.0
%
$97.3
$130.1
$147.8
$142.8
$166.8
$193.3
$101.7
(16.9
)
(53.5
)
1.2
$98.8
(24.2
)
(64.1
)
3.6
$101.4
(9.6
)
(63.7
)
(4.2
)
$104.1
(9.4
)
(64.4
)
(3.3
)
$106.9
(8.8
)
(65.1
)
(3.6
)
$129.6
$144.2
$171.6
$169.7
$196.2
Stock
Price
05/09/05
Equity
Value
Enterprise
Value
P/E
CY 2005E
CY 2006E
$9.08
$4,185.6
$3,518.6
0.70
x
5.6
10.4
x
0.65
5.1
x
8.4
x
15.7
x
12.7 x
10.95
15,286.5
14,812.2
0.88
x
6.8
9.6
x
0.85
6.4
x
9.0
x
14.5
x
12.0 x
Enterprise Communications
Alcatel
Aspect
9.02
575.3
415.5
1.12
4.9
6.6
1.06
4.3
5.4
15.8
13.5
Cisco
18.21
117,893.7
101,368.7
3.93
11.1
12.6
3.53
9.9
11.2
19.3
17.0
Inter-Tel
19.23
588.3
373.4
0.83
5.8
6.4
0.77
5.1
5.8
13.8
12.0
InterVoice
11.00
434.9
394.7
2.35
11.7
15.1
2.11
9.2
11.4
18.4
16.9
2.62
9,330.1
10,079.1
1.14
12.6
19.9
1.08
9.1
12.5
29.7
18.6
15.66
1,562.4
1,347.5
2.33
10.1
13.9
2.10
8.5
11.5
20.3
17.2
1.80
x
1.14
9.0
1.64x
1.08
7.5
x
8.5
9.6
x
11.2
18.8
x
18.4
15.3 x
10.1
12.0
x
12.6
Alcatel
$2,045.3
$1,501.5
$1,145.4
$2,108.1
$1,649.2
$1,414.7
$1,525.8
$1,662.8
Aspect
2,585.7
1,072.9
783.4
2,626.5
1,091.5
844.6
1,663.9
1,858.5
Cisco
9,108.5
2,438.6
1,505.0
8,773.4
2,549.4
1,757.1
2,027.0
2,348.5
Inter-Tel
1,913.5
1,286.1
768.6
1,912.3
1,302.3
917.0
1,454.6
1,659.1
InterVoice
5,443.4
2,570.3
1,809.1
5,257.9
2,366.2
1,785.7
1,934.1
2,331.9
Nortel
2,643.3
2,784.2
2,375.0
2,682.5
2,339.8
1,965.8
3,125.2
2,562.3
Polycom
5,402.9
2,233.3
1,664.8
5,234.1
2,172.2
1,802.9
2,138.4
2,375.6
Nortel
Polycom
Mean
Median
16.9
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Target
Nuance
Tenovis
Commworks (3Com)
Latitude
Concerto
PictureTel
Active Voice
Genesys
Periphonics
Brite Voice
Geotel
Bay Networks
Octel
Transaction
Date
Target
Equity
Value
Enterprise
Value
Revenue
05/09/2005
11/18/2004
04/23/2004
11/12/2003
10/06/2003
05/22/2001
11/10/2000
09/28/1999
08/23/1999
04/26/1999
04/12/1999
06/15/1998
07/17/1997
$212.5
370.5
100.0
92.5
141.9
357.7
295.3
1,526.8
419.6
172.0
1,914.1
8,520.3
1,755.8
$113.8
635.5
100.0
69.9
113.8
358.4
275.8
1,465.3
392.0
159.5
1,854.4
7,912.7
1,665.5
1.49x
1.00x
0.91x
2.20x
1.07x
0.92x
3.21x
7.25x
2.27x
0.97x
25.73x
2.70x
2.74x
NA
6.5x
NA
NA
18.0x
6.7x
47.6x
26.1x
14.7x
10.5x
85.7x
NA
14.4x
49.5x
NA
NA
NA
23.0x
15.7x
96.3x
33.8x
19.9x
16.8x
92.3x
NA
22.8x
42.1x
NA
NA
NA
38.1x
20.7x
122.1x
53.0x
31.1x
27.4x
132.5x
NA
34.7x
$3,463.3
2,319.0
2,110.3
NA
1,432.8
NA
NM
NA
NA
NM
NA
NA
5,101.8
2,481.3
2,133.5
7,443.9
NM
NM
2,249.4
NM
6,261.2
6,354.0
NA
3,967.6
1,476.8
NM
NM
3,240.2
2,314.5
NM
NA
3,174.1
NA
2,748.1
1,875.9
NM
NM
2,377.7
2,007.3
NM
NA
2,724.2
NA
4,006.0
2,176.5
NM
NM
3,270.0
2,881.0
NM
NA
3,648.5
Enterprise Value/Forward
EBITDA
EBIT
Forward
P/E
Nuance
Tenovis
Commworks (3Com)
Cisco
Melita
Polycom
Cisco
Alcatel
Nortel
InterVoice
Cisco
Nortel
Lucent
Latitude
Concerto
PictureTel
Active Voice
Genesys
Periphonics
Brite Voice
Geotel
Bay Networks
Octel
Risk-free Rate(1)
4.39 %
7.20
12.0
Comparable Company
Barra
Beta
Debt/
Equity(3)
Unlevered
Beta(4)
1.62
1.64
1.45
1.32
1.41
2.21
1.61
1.61
39.1
0.1
0.0
0.0
2.4
40.1
0.0
11.7
1.20
1.64
1.45
1.32
1.38
1.63
1.61
1.46
Aviator
2.44
4.5
2.35
Debt/
Capitalization
10.0 %
20.0
30.0
40.0
50.0
9.1 %
16.7
23.1
28.6
33.3
Levered
Beta(5)
1.59
1.72
1.85
1.98
2.11
Cost of
Equity(6)
6.00%
7.00%
9.00%
10.00%
15.9 %
16.8
17.7
18.6
19.6
14.9 %
14.9
14.8
14.8
14.8
15.0 %
15.0
15.0
15.1
15.1
15.1 %
15.2
15.3
15.3
15.4
15.1 %
15.3
15.5
15.6
15.7
15.2 %
15.5
15.7
15.8
16.0
Section 2-D
CONFIDENTIAL
Enterprise
Value Range
$2,500
$2,500
$2,750
$2,500
$3,500
$3,500
$4,000
$3,750
Revenues
0.80
x
0.86
0.86
x
0.92
0.95
x
1.01
0.86
x
0.92
EBITDA
1.05
x
1.12
7.8
x
6.1
1.20
x
1.29
EBIT
CY 2006E/2005E
Revenues
10.8
x
12.9
15.1
x
18.1
Unlevered
Net Income
EBITDA
EBIT
$2,908.9
$433.0
$263.4
$231.8
2,710.5
406.7
219.8
193.4
9.5
x
11.4
8.1
x
8.6
13.3
x
15.9
5.8
8.1
9.5
13.3
10.8
15.1
$2,908.9
$433.0
$263.4
$231.8
6.1
8.6
11.4
15.9
12.9
18.1
2,710.5
406.7
219.8
193.4
1.38
x
1.48
6.4
9.2
10.4
15.2
11.9
17.3
$2,908.9
$433.0
$263.4
$231.8
6.8
9.8
12.5
18.2
14.2
20.7
2,710.5
406.7
219.8
193.4
1.29
x
1.38
5.8
8.7
9.5
14.2
10.8
16.2
$2,908.9
$433.0
$263.4
$231.8
6.1
9.2
11.4
17.1
12.9
19.4
2,710.5
406.7
219.8
193.4
53
$2,500.0
$2,750.0
$3,500.0
$3,750.0
$279.5
231.8
193.4
8.9 x
10.8
12.9
9.8 x
11.9
14.2
10.7 x
12.9
15.5
11.6 x
14.0
16.8
12.5 x
15.1
18.1
13.4 x
16.2
19.4
CY 2007E Revenue
CY 2006E Revenue
CY 2005E Revenue
$3,083.5
2,908.9
2,710.5
0.81 x
0.86
0.92
0.89 x
0.95
1.01
0.97 x
1.03
1.11
1.05 x
1.12
1.20
1.14 x
1.20
1.29
1.22 x
1.29
1.38
CY 2007E EBITDA
CY 2006E EBITDA
CY 2005E EBITDA
$491.8
433.0
406.7
5.1 x
5.8
6.1
5.6 x
6.4
6.8
6.1 x
6.9
7.4
6.6 x
7.5
8.0
7.1 x
8.1
8.6
7.6 x
8.7
9.2
CY 2007E EBIT
CY 2006E EBIT
CY 2005E EBIT
$317.6
263.4
219.8
7.9 x
9.5
11.4
8.7 x
10.4
12.5
9.4 x
11.4
13.6
10.2 x
12.3
14.8
11.0 x
13.3
15.9
11.8 x
14.2
17.1
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: EBITDA, EBIT, and Unlevered Net Income are all adjusted for allocation of corporate overhead.
CONFIDENTIAL
53
13.50%
14.00%
$863.5
1,622.1
$2,485.6
4.7%
14.50%
$873.3
1,653.9
$2,527.2
4.3%
$853.8
1,591.0
$2,444.8
5.2%
15.00%
$844.3
1,560.7
$2,405.0
5.6%
$873.3
1,964.0
$2,837.4
5.6%
$863.5
1,926.2
$2,789.7
6.1%
$853.8
1,889.3
$2,743.1
6.5%
$844.3
1,853.3
$2,697.6
7.0%
$873.3
2,274.1
$3,147.5
6.6%
$863.5
2,230.4
$3,093.8
7.1%
$853.8
2,187.6
$3,041.4
7.6%
$844.3
2,145.9
$2,990.2
8.0%
$873.3
2,304.3
$3,177.7
6.7%
$863.5
2,260.0
$3,123.5
7.2%
$853.8
2,216.7
$3,070.5
7.6%
$844.3
2,174.4
$3,018.7
8.1%
$873.3
2,688.4
$3,561.7
7.6%
$863.5
2,636.7
$3,500.1
8.1%
$853.8
2,586.2
$3,439.9
8.6%
$844.3
2,536.8
$3,381.1
9.0%
$873.3
2,326.0
$3,199.3
6.8%
$863.5
2,281.2
$3,144.7
7.2%
$853.8
2,237.5
$3,091.3
7.7%
$844.3
2,194.8
$3,039.1
8.2%
$873.3
2,599.6
$3,472.9
7.4%
$863.5
2,549.6
$3,413.1
7.9%
$853.8
2,500.7
$3,354.5
8.4%
$844.3
2,453.0
$3,297.3
8.9%
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: EBITDA, EBIT, and Unlevered Net Income are all adjusted for allocation of corporate overhead.
CONFIDENTIAL
53
2005
2006
Revenue
$2,658.7
$2,865.9
$3,037.9
EBITDA
$403.1
$417.5
(193.0
)
EBIT
EBIT Margin
Taxes
Tax Rate
Unlevered Net Income
Depreciation & Amortization
Deferred Taxes
(Increase)/Decrease in Working Capital
Capital Expenditures
Other Cash Flows
Unlevered Free Cash Flow
2009
2010
$3,220.2
$3,413.5
$3,618.3
$479.5
$528.7
$594.3
$672.2
(168.4
)
(173.0
)
(177.6
)
(182.3
)
(193.2
)
$210.1
7.9
%
$249.0
8.7
%
$306.5
10.1
%
$351.1
10.9
%
$412.0
12.1
%
$478.9
13.2
%
($25.3
)
12.1
%
($27.1
)
10.9
%
($67.4
)
22.0
%
($119.4
)
34.0
%
($140.1
)
34.0
%
($162.8
)
34.0
%
$184.7
$221.9
$239.1
$231.7
$271.9
$316.1
$193.0
(32.2
)
(101.7
)
2.2
$168.4
(41.3
)
(109.3
)
6.1
$173.0
(16.4
)
(108.6
)
(7.2
)
$177.6
(16.1
)
(109.8
)
(5.7
)
$182.3
(15.1
)
(111.0
)
(6.2
)
$246.2
$245.9
$279.8
$277.7
$321.9
CONFIDENTIAL
53
Stock Price
05/09/05
Equity
Value
Enterprise
Value
$9.08
$4,185.6
$3,518.6
0.70
x
5.6
x
10.4
x
0.65
x
5.1
x
$34.21
$607.6
$637.4
13.04
5.61
1.62
6.88
1,862.9
2,506.0
1,372.2
2,320.6
2,163.4
2,684.5
1,335.0
2,711.2
1.14
x
0.81
0.82
0.39
0.46
0.72
x
0.81
8.3
x
5.6
5.4
6.1
5.6
6.2
x
5.6
9.6
x
9.1
8.1
9.7
27.3
12.8
x
9.6
0.95
x
0.76
0.75
0.36
0.44
0.65
x
0.75
$3,098.5
2,192.2
2,221.5
1,048.3
1,255.1
$3,379.4
2,280.0
2,211.0
2,487.2
2,290.1
$2,102.8
1,994.9
1,769.5
2,140.8
6,008.5
$2,767.3
2,209.1
2,183.4
1,058.8
1,292.4
P/E
CY 2005E
CY 2006E
8.4
x
15.7
x
12.7
x
6.7
x
5.1
4.8
5.1
4.3
5.2
x
5.1
8.0
x
8.2
6.8
6.7
10.0
7.9
x
8.0
14.8
x
13.7
12.5
11.5
NM
13.1
x
13.1
12.5
x
12.1
10.8
9.0
19.7
12.8
x
12.1
$2,884.3
2,218.4
2,081.2
2,224.2
1,845.8
$2,095.5
2,161.6
1,793.4
1,770.4
2,630.5
$2,864.5
2,655.0
2,417.9
2,215.6
NA
$2,891.1
2,798.4
2,496.6
2,086.0
4,556.0
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
CONFIDENTIAL
53
Acquiror
Target
Transaction Date
Equity Value
4/26/2005
$471.1
Target
Enterprise Value
Revenue
Enterprise Value/Forward
EBITDA
EBIT
Forward P/E
$448.0
1.65
x
11.9
x
13.2
x
22.5
x
NM
Nortel
PEC Solutions
IBM
Corio
1/25/2005
182.0
174.1
2.94
NA
NM
Warburg-Providence
Telcordia
11/18/2004
1,350.0
1,350.0
1.53
7.7
8.9
NA
Cisco
NetSolve
9/9/2004
128.0
89.0
2.21
NA
NM
NM
Avaya
Expanets
11/26/2003
152.0
152.0
0.36
NA
NM
NA
CGI
AMS
3/9/2004
858.0
795.7
0.78
8.9
17.3
31.3
GTCR
Syniverse
2/14/2002
770.0
770.0
2.45
6.3
7.4
NA
ServicesImplied Valuation
Acquiror
Target
Nortel
PEC Solutions
$3,830.6
$2,623.1
$1,577.2
$2,365.8
IBM
Corio
6,817.8
NA
NA
NA
Warburg-Providence
Telcordia
3,548.0
1,697.3
1,063.4
NA
Cisco
NetSolve
5,124.9
NA
NA
NA
Avaya
Expanets
829.4
NA
NA
NA
CGI
AMS
1,815.9
1,950.9
2,067.0
3,291.0
GTCR
Syniverse
5,681.5
1,388.7
884.2
NA
CONFIDENTIAL
53
Risk-free Rate(1)
4.39 %
7.20
12.0
Comparable Company
Global Services
Black Box
Convergys Corporation
CGI Group
Getronics
Unisys
Consolidated Mean
Aviator
Barra
Beta
Debt/
Equity(3)
Unlevered
Beta(4)
1.24
1.14
1.00
1.99
1.75
1.43
2.44
6.7%
18.1
14.7
15.1
45.3
20.0
4.5
1.17
0.98
0.89
1.76
1.25
1.21
2.35
Debt/
Capitalization
9.1 %
16.7
23.1
28.6
33.3
Levered
Beta(5)
Cost of
Equity(6)
6.00%
7.00%
1.32
1.42
1.53
1.64
1.74
13.9%
14.6
15.4
16.2
16.9
13.1%
13.1
13.1
13.1
13.1
13.2%
13.2
13.3
13.3
13.4
9.00%
10.00%
13.3%
13.5
13.7
13.8
13.9
13.4%
13.7
13.9
14.1
14.2
CONFIDENTIAL
53
Section 3
Section 3-A
Transaction Considerations
Dominant Legacy
PBX Vendor
Globally
Nortel/Aviator will be the #1 vendor in the North American enterprise voice market, with a
56%, 54% and 75% in North America, Europe and Asia respectively
Could potentially have the scale and the R&D capabilities to take on Cisco in the enterprise PBX
Different Channel
and Portfolio
Strategies Create
Opportunities for
Cross Selling
networking equipment; Aviator currently generates no revenue from sale of data networking
equipment
Aviator could potentially cross-sell its service offerings into Nortels customer base; Nortel could
Similar Geographic
Footprint Creates
Potential for Cost
Synergies
Significant opportunities for cost synergies exist through reductions in cost of sales, overlapping
synergies.
Nortel + Aviator
Nortel
Lucent
Siemens
Alcatel
Cisco
Aviator
Juniper
Nortel+
Aviator
Growth Businesses
Carrier IP Routing
Enterprise Convergence
3G Wireless
Broadband Access
Mature Businesses
Optical Networking
ATM Switching
2.02.5G Wireless
Declining Businesses
Legacy PBX
Leadership/Strong Position
Source: Wall Street Research and Bear Stearns Investment Banking estimates.
Note: Fiscal year ending December 31.
Weak Position
Aviator Shareholders
Position
118.712
98.550
79.074
78.334
67.884
65.775
62.288
53.573
52.422
51.264
48.026
42.805
37.682
36.825
36.346
33.866
31.418
29.419
24.508
23.038
21.856
18.811
16.524
15.758
15.302
15.174
14.037
13.760
13.554
12.867
12.146
11.685
11.517
11.495
11.425
11.193
9.921
9.736
8.994
8.972
% Ownership
2.8 %
2.3
1.9
1.8
1.6
1.5
1.5
1.3
1.2
1.2
1.1
1.0
0.9
0.9
0.9
0.8
0.7
0.7
0.6
0.5
0.5
0.4
0.4
0.4
0.4
0.4
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.2
Warburg Pincus
Dodge & Cox
Fidelity Management & Research
Lord, Abbett & Co.
Barclays Global Investors
Friess Associates
SSgA Funds Management
Vanguard Group
Wellington Management
AIM Management Group
Calamos Advisors
Artisan Partners
Franklin Advisers
Trusco Capital Management
Victory Capital Management
Northern Trust Global Investments
Bessemer Investment Management
Pioneer Global Asset Management
TIAA-CREF Investment Management
BNP Paribas Asset Management
Fifth Third Asset Management
Dreyfus Investment Advisors
AXA Rosenberg Investment Management
Mellon Bank Asset Management
JPMorgan Investment Management
Northern Capital Management
Perkins, Wolf, McDonnell & Co.
US Bancorp Asset Management
Merrill Lynch Investment Managers, Inc.
American Century Global Investment Management
California Public Employees Retirement System
Deutsche Bank Investment Management
Northwestern Investment Management
PDR Services
Akanthos Capital Management
Citadel Investment Group
Fred Alger Management
Teacher Retirement System of Texas
HSBC Asset Management
Geode Capital Management
Position
47.955
24.812
16.979
16.215
15.083
12.913
11.961
11.883
11.104
10.080
7.283
7.013
6.717
5.952
5.751
4.736
4.645
4.537
3.838
3.617
3.207
2.944
2.720
2.695
2.339
2.153
2.132
2.100
2.056
2.050
1.998
1.971
1.931
1.874
1.872
1.752
1.744
1.699
1.696
1.668
% Ownership
10.0
%
5.2
3.5
3.4
3.1
2.7
2.6
2.5
2.3
2.1
1.5
1.5
1.4
1.2
1.2
1.0
1.0
0.9
0.8
0.8
0.7
0.6
0.6
0.6
0.5
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.3
Section 3-B
$
Aviator
Total
%
Nortel
Aviator
Revenues
FY 2008E
FY 2007E
FY 2006E
$13,305.9
12,672.3
12,061.7
$6,062.8
5,719.5
5,395.8
$19,368.7
18,391.9
17,457.4
68.7%
68.9
69.1
31.3%
31.1
30.9
EBITDA
FY 2008E
FY 2007E
FY 2006E
$1,481.0
1,429.4
1,130.1
$874.2
788.9
686.9
$2,355.2
2,218.3
1,817.0
62.9%
64.4
62.2
37.1%
35.6
37.8
EBIT
FY 2008E
FY 2007E
FY 2006E
$1,075.3
1,023.9
738.8
$591.8
513.8
419.0
$1,667.1
1,537.6
1,157.8
64.5%
66.6
63.8
35.5%
33.4
36.2
Net Income
FY 2008E
FY 2007E
FY 2006E
$933.5
867.2
571.6
$406.7
396.2
367.3
$1,340.1
1,263.4
938.9
69.7%
68.6
60.9
30.3%
31.4
39.1
$3,386.4
3,870.0
630.0
3,766.7
$1,040.1
20.5
0.0
1,535.3
$4,426.5
3,890.5
630.0
5,302.0
76.5%
99.5
100.0
71.0
23.5%
0.5
0.0
29.0
Equity Value(2)
Enterprise Value
$11,315.9
12,361.9
$4,663.0
3,996.7
$15,978.9
16,358.6
70.8%
75.6
29.2%
24.4
$11,315.9
11,315.9
11,315.9
$4,896.9
5,892.4
6,902.4
$16,212.9
17,208.4
18,218.3
69.8%
65.8
62.1
30.2%
34.2
37.9
Cash(1)
Total Debt(1)
Minority Interest(1)
Shareholders Equity(1)
100% Stock
3.779 x
4.9 %
$0.01
(0.01 )
(0.01 )
7.7 %
50% Stock/
50% Cash
1.889 x
4.9 %
$0.02
0.01
0.01
$0.02
0.01
0.01
13.6 %
11.9 %
100% Stock
4.534 x
25.9 %
($0.00 )
(0.02 )
(0.02 )
50% Stock/
50% Cash
2.267 x
25.9 %
$0.00
(0.00 )
(0.00 )
0.5 %
100% Stock
5.290 x
46.9 %
50% Stock/
50% Cash
2.645 x
46.9 %
($0.01 )
(0.03 )
(0.04 )
($0.01 )
(0.02 )
(0.03 )
($0.01 )
(0.02 )
(0.02 )
(5.5
%)
(11.6 )
(11.9 )
(10.4
%)
(8.0 )
(7.7 )
(2.7 )
(3.7 )
3.4
2.4
7.0
6.5
(0.6
%)
(9.6 )
(10.5 )
(3.6 )
(4.3 )
(0.4 )
(0.6 )
(8.1
%)
(15.9 )
(16.6 )
NA
38.3
60.2
NA
NA
NA
NA
NA
NA
$5.4
145.9
178.8
NA
49.7
66.9
NA
5.6
8.0
$81.8
255.0
299.1
$50.2
168.5
194.6
$85.5
104.6
113.1
$4,306.0
692.3
3,870.0
8,663.6
$3,081.7
692.3
3,870.0
7,439.4
$3,001.2
692.3
5,030.0
6,215.1
$4,306.0
891.4
3,870.0
9,659.1
$3,000.0
891.4
4,038.7
8,186.0
$3,011.6
891.4
5,545.0
6,712.9
$4,306.0
1,093.4
3,870.0
10,669.1
$3,021.4
1,093.4
4,320.0
8,943.5
$3,023.3
1,093.4
6,070.0
7,217.9
41.5 %
50.5
52.7
41.0 %
50.0
52.2
33.6 %
41.9
43.9
41.6 %
50.6
52.8
40.1 %
49.2
51.4
31.2 %
39.4
41.3
41.6 %
50.6
52.9
35.9 %
44.1
46.1
28.4 %
36.1
37.9
29.4 %
27.6
25.4
23.4
32.4 %
30.2
27.7
25.4
42.4 %
37.0
33.9
31.0
27.3 %
25.8
23.9
22.1
31.4 %
28.9
26.6
24.5
43.0 %
36.9
34.0
31.4
25.5 %
24.2
22.5
21.0
31.1 %
29.4
27.3
25.4
43.6 %
37.3
34.7
32.2
2.9 x
2.1
1.7
1.6
30.2 %
2.9 x
2.1
1.7
1.6
24.5 %
3.8 x
2.5
2.0
1.9
17.8 %
2.9 x
2.1
1.7
1.6
34.2 %
3.1 x
2.2
1.8
1.7
28.1 %
4.2 x
2.6
2.1
2.0
20.7 %
2.9 x
2.1
1.7
1.6
37.9 %
3.3 x
2.4
1.9
1.8
31.4 %
4.6 x
2.8
2.3
2.2
23.4 %
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment Banking estimates.
Note: Fiscal year ending December 31.
(1) As of December 31, 2005.
(2) As of May 27, 2005.
$300
$350
$400
$450
$500
$0.06
0.06
0.06
$0.07
0.07
0.06
$0.08
0.07
0.07
$0.09
0.08
0.08
$0.09
0.09
0.09
$0.10
0.10
0.10
44.5
%
28.0
10.0
51.1
%
32.2
13.5
57.6
%
36.4
17.0
64.1
%
40.6
20.6
70.7
%
44.8
24.1
77.2
%
49.0
27.7
$0.04
0.04
0.04
$0.05
0.05
0.05
$0.06
0.06
0.05
$0.07
0.06
0.06
$0.08
0.07
0.07
$0.09
0.08
0.08
32.1
%
19.8
17.7
38.4
%
23.9
21.4
44.7
%
27.9
25.1
51.0
%
32.0
28.7
57.3
%
36.0
32.4
63.6
%
40.1
36.1
$0.04
0.04
0.04
$0.05
0.05
0.04
$0.06
0.06
0.05
$0.07
0.06
0.06
$10/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
FY 2007E
FY 2008E
Earnings (Dilution)/Accretion Per Share (%)
FY 2006E
FY 2007E
FY 2008E
$12/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
FY 2007E
FY 2008E
Earnings (Dilution)/Accretion Per Share (%)
FY 2006E
FY 2007E
FY 2008E
$14/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
$0.03
$0.03
FY 2007E
0.02
0.03
FY
2008E
0.02
Note: Financial projections based on Wall Street equity research and Bear Stearns Investment 0.03
Banking estimates.
Assumes
31, 2005 closingPer
date.Share (%)
EarningsDecember
(Dilution)/Accretion
Assumes Nortel stock price of $2.65 and Aviator stock price of $9.53 (as of May 27, 2005).
FY
2006E
26.1 Intangible Assets and
32.2is amortized (straight-line)
38.3 over 10 years for44.4
50.5
Assumes
20% of Excess of Purchase Price over Book Value is allocated20.0
to Incremental Identifiable
book purposes.
%excess, if any, funded%
% debt at L+350 and%
% 50/50
Assumes purchase funded with balance sheet cash subject to a $3.0 billion%minimum cash balance;
with a combination of bank
senior notes at 8.19% for
and 2007E
25/75 scenarios.
FY
11.5
15.4
19.4
23.3
27.2
31.1
FY 2008E
10.0
13.5
17.0
20.6
24.1
27.7
$300
$350
$400
$450
$500
$0.05
0.03
0.03
$0.05
0.04
0.03
$0.06
0.05
0.04
$0.07
0.05
0.05
$0.08
0.06
0.06
$0.08
0.07
0.06
35.5
%
15.1
(2.2
)
41.0
%
18.7
0.6
46.6
%
22.3
3.5
52.1
%
25.8
6.4
57.7
%
29.4
9.2
63.2
%
33.0
12.1
$0.03
0.01
0.01
$0.04
0.02
0.02
$0.05
0.03
0.02
$0.06
0.03
0.03
$0.06
0.04
0.04
$0.07
0.05
0.04
25.6
%
7.2
4.7
30.8
%
10.5
7.7
36.0
%
13.9
10.8
41.3
%
17.2
13.8
46.5
%
20.6
16.8
51.7
%
24.0
19.9
$0.02
(0.00
)
(0.00
)
$0.03
0.01
$0.04
0.01
$0.04
0.02
$0.05
0.03
$0.06
0.03
0.00
0.01
0.01
0.02
0.03
$10/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
FY 2007E
FY 2008E
Earnings (Dilution)/Accretion Per Share (%)
FY 2006E
FY 2007E
FY 2008E
$12/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
FY 2007E
FY 2008E
Earnings (Dilution)/Accretion Per Share (%)
FY 2006E
FY 2007E
FY 2008E
$14/share
Earnings (Dilution)/Accretion Per Share ($)
FY 2006E
FY 2007E
FY 2008E
Earnings (Dilution)/Accretion Per Share (%)
FY 2006E
FY 2007E
FY 2008E
16.6
%
(0.0
)
(2.2
)
21.6
%
3.1
26.5
%
6.3
31.4
%
9.5
36.4
%
12.7
41.3
%
15.8
0.6
3.5
6.4
9.2
12.1