Pharmaceutical Case Competition 2007

Paul Di Capua, MD, MBA candidateRobert Stavert, MD, MBA candidate

Adrian Garcia, MBA candidate

November 30, 2007

1. Sucessful biotech with proven track record

2. Growth of MS market3. Potential synergies4. So competition doesn’t acquire Biogen

“When we look back, this will seem a very expensive time.” – Tony Robinson, Head of Business Development and Licensing at Novartis

Figure from: Compston A, Coles, A. Multiple Sclerosis. Lancet 2002; 359: 1221-31.

Multiple Sclerosis: Pathogenesis and mechanisms of therapy

Current MS therapies

Drug name molecule & mechanism firm patent

expiration route Notable features cost for 1 month of treatment

interferon β 1a 2011 IM Most used of DMT's $1,395.00

Natalizumab (monoclonal

antibody)2015 IV

• Touch process --> PML• reduces frequency of exacerbations for relapsing forms of MS

$2,225.00

Betaseron inteferon β 1b Bayer - Berlex off patent SC contraindicated in pregnancy $1,489.00

glatrimer acetate (mimics myelin

sheath)Teva 2014 SC

safest of main disease modifying drugs

(ABCR's)$1,370.00

interferon β 1a Pfizer-Serono 2011 SC risk of neutropenia and pancytopenia $1,470.00

mitoxantrone (intercalates DNA,

causing DNA damage)

Emd Serono / OSI Pharma 2010 IV

• Unique mechanism of intercalating DNA• risk of cardiotoxicity $1,453.00

Prospective MS therapiesDrug name Firm Phase Mechanism Route Strategic competitive advantage

Fingolimod Novartis III sphingosine 1-phosphate receptor (S1P-R) modulators oral

• Oral administration• Novel mechanism of action • May reverse effects of MS

NeuroVax Immune Response II T Cell Receptor (TCR) peptide

vaccinemonthly

injectionsVaccine, complete remission after 1

year

BG-12 III

fumeric acid ester (FAE) immunomodulator with a

combination of cytoprotective and anti-inflammatory

properties

oral oral administration, novel mechanism of immunomodulation

Fampridine-SR

Acorda Therapeutics III

Blocks channels from damaged neurons facilitating electrical

signal transferoral Oral, offers improvement of symptoms

Rituxan II Anti-CD20 monoclonal antibody IV Already approved for other indications

Zenapax (daclizumab)

Biogen with PDL

BioPharmaII Monoclonal antibody that

targets IL-2 receptor antibodies IV Possible synergistic activity with interferons

Biogen Idec Valuation

Traditional DCF Method:Actual

2006 2007 2008 2009 2010 2011

$2,683.00 $3,353.80 $4,192.30 $5,240.30 $6,550.40 $8,188.00 815.9 911 1,072.60 1,280.90 1,547.10 1,885.80

$420.00 $404.20 $401.80 $445.60 $507.00 $590.50 Unlevered Free Cash

ProjectedFiscal Years ending

Net SalesEBITDA

Discount Rate (3) 13.0%Assumed EBITDA Exit Multiple 10.0x 20.0x 30.0x

PV of Terminal Value $ 10,235.2 $ 20,470.5 $ 30,705.7

PV of Free Cash Flows 1,612.7 1,612.7 1,612.7

Implied Enterprise Value $ 11,847.9 $ 22,083.1 $ 32,318.4

Discount Rate (3) 13.0%Assumed Perpetual Growth Rate 10.0% 11.0% 12.0%

Terminal Year + 1 Free Cash Flow $ 649.6 $ 655.5 $ 661.4 Terminal Value 21,653.2 32,775.0 66,140.6

PV of Terminal Value $ 11,752.5 $ 17,789.0 $ 35,898.4 PV of Free Cash Flows 1,612.7 1,612.7 1,612.7

Implied Enterprise Value $ 13,365.2 $ 19,401.7 $ 37,511.1

Valuation by industry multiples and recent acquisitions:

    Current   Market Value ($mn)   LTM Multiples

    Price  Enterprise

Value  Market Cap.   Sales   EBITDA   EBIT   P / E

                             

Bio Gen   69.75   18,195.39   19,098.07   6.78   6.53   7.55   42.27

                             

Amgen   54.02   57,333.94   61,476.94   4.x   4.6x   4.7x   12.7x

Genentech 76.01   81,868.48   82,157.48   8.8x   9.6x   10.1x   29.8x

Genzyme   73.53   15698.939   16303.039   4.9x   5.6x   6.4x   167.1x

Gilead   44.49   37015.251   37860.251   12.2x   14.x   14.3x   -80.9x

                             

    Mean           7.5   8.47   8.87   32.18

    Median           6.87   7.63   8.25   21.24

 Industry Multiples   Sales   EBITDA   EBIT   Income

FY 2007E   3,354   911   671   438

Multiples   7.5   8.47   8.87   32.18

Ent. Value   $25,149   $7,711   $5,952   $14,081

Acquisition Multiples    Sales   EBITDA   EBIT   Income

FY 2007E   3,354   911   671   438

Multiples   11.7   149   NM   NM

Ent. Value   $39,240   $135,733   NM   NM

DCF Valuation by drug

2006 2007 2008 2009 2010 2011Market Size 175,000 195,000 215,000 235,000 257,000 281,000Pentetration Rate 37% 38% 39% 40% 41% 42%

Patients on AVONEX 64,750 74,100 83,850 94,000 105,370 118,020Sales Price per patient 1,395 1,430 1,430 1,430 1,430 1,430Annual Revenue per patient 16,740 17,159 17,159 17,159 17,159 17,159Total Annual Revnue 1,084 1,271 1,439 1,613 1,808 2,025

Costs 759 890 1,007 1,129 1,266 1,418

Gross Profit     325 381 432 484 542 608

Present Value $1,769

Value of BIOGEN’s MS line of drugs:

Avonex $1,769 M

Rituxan $551 M

Tysabri $339 M

BG12 $5,908 M

Total value (U.S) $8,566 M

Total (Worldwide): $14,277 M

Multiple valuations of BIOGEN-IDEC:

APPENDICES

The MS Pipeline: Phase III drugsDrug name Firm Mechanism Route strategic competitive advantage

BG-12 Biogen IDEC

fumeric acid ester (FAE) immunomodulator with a novel

mechanism of action with a combination of cytoprotective and anti-inflammatory

properties

oral Qday oral administration, novel mechanism of immunomodulation

CampathGenzyme and Bayer Schering

anti-CD52 monoclonal antibody Interim results compared Campath very favorably with Rebif

Fampridine-SRAcorda

Therapeutics

Blocks channels from damaged neurons facilitating electrical signal transfer Oral, offers improvement of symptoms

RevimmuneAccentia

Biopharmaceuticals

Using a ultra-high intensity cyclophosphamide, Revimmune is

intended to "reboot" a patient's immune system, thereby eliminating

autoimmunity

IV infusion for 4hours over for 4

days

improvement of symptoms and possibly complete remission via high-intesity IV

cyclophosphamide-mediated "reboot" of immune system

FTY720 (Fingolimod) Novartis sphingosine 1-phosphate receptor (S1P-R)

modulators - may repair damage oralNew mechanism of action with potential reversible effects; impact on CNS in addition to well established action on immune cells.

laquinimod Teva immunomodulatory effects oral would be first oral therapy for MS

MBP8298 BioMS Medical

Re-introduce a state of "tolerance" to a critical portion of the nerve's Myelin Basic

ProteinIV 1/6 mos

novel mechanism of action: restores "tolerance" to myelin basic protein; would

be one of few therapies targetted at secondary MS;

Drug name Firm mechanism strategic competitive advantage

RTL-1000 Artielle ImmunoTherapeutics

Inactivates pathogenic T cells through binding to them Novel mechanism, damage reversal

ATX-MS-1467 Apitope (UK) Vaccination with myelin basic protein (MBP) peptides to sensitize T cells Novel Mechanism, vaccination

CHR-1103 Chromos Molecular Systems monoclonal antibody directed against VLA-2

reduce the severity of a relapse; stem the residual neurological damage that often accompanies relapse

RPI-78M Nutra Pharma Corp Induces gamma-interferon and IL-27 to suppress auto-inflammatory processes Novel mechanism

Cyclophosphamide Generic intercalating agent Already approved for other indications

Ibidulast (MN-166) MediciNova Inhibits leukotrienes, phosphodiesterases, nitric oxide Novel mechanism, neuroprotection, oral administration

NeuroVax Immune response, Corp

an investigational T Cell Receptor (TCR) peptide vaccine for the treatment of relapsing-

remitting multiple sclerosis (MS).vaccine via T cell receptor mechanism

Rituxan Biogen Anti-CD20 monoclonal antibody Already approved for other indications

Zenapax (daclizumab)

Biogen with PDL BioPharma

Monoclonal antibody that targets IL-2 receptor antibodies Possible synergistic activity with interferons

Cladribine Merck Serono Nucleoside analogue that disrupts production of WBCs

oral medication, novel mechanism of action, potential to be first first-line oral approved drug for MS

BHT-3009 Bayhill Therapeutics Inc.

Autoimmune DNA vaccine that encodes MBP. It is designed to reprogram the immune

systemvaccine encoding human myelin basic protein

Tovaxin Opexa TherapeuticsThe induction of anti-idiotypic cytotoxic CD8+

effector T-cells and anti-ergotypic CD4+CD25+FoxP3 positive Tregs.

vaccine via T cell receptor mechanism

The MS Pipeline: Phase I & II drugs

Important features of licensing agreement:

2006 MS market share by firmPost acquisition MS market share by firmPost acquisition MS market share with synergies

THE FOLLOWING SLIDES DESCRIBE THE DETAILS OF THE DCF VALUATION

- DRAFT - Bio Gen

Income Statement ($ in millions, except per share amounts)                

Historical FYE Dec. 31, Projected Fiscal Years Ending Dec. 31,2005A 2006A 2007E 2008E 2009E 2010E 2011E

Product $1,617.0 $1,781.3 $2,226.6 $2,783.3 $3,479.1 $4,348.9 $5,436.1 Unconsolidated Joint Business $708.9 $810.9 $1,013.6 $1,267.0 $1,583.7 $1,979.6 $2,474.6 Other Revenue $96.6 $90.9 $113.6 $142.0 $177.5 $221.9 $277.3 Net Sales $2,422.5 $2,683.0 $3,353.8 $4,192.3 $5,240.3 $6,550.4 $8,188.0 Cost of Goods Sales (373.6) (274.4) (335.4) (419.2) (524.0) (655.0) (818.8)Gross Profit 2,048.9 2,408.7 0 3,018.4 0 3,773.0 0 4,716.3 0 5,895.4 0 7,369.2

Margin 84.6% 89.8% 90.0% 90.0% 90.0% 90.0% 90.0% SG&A and Other (1,812.8) (1,968.6) (2,347.7) (2,934.6) (3,668.2) (4,585.3) (5,731.6)Total Costs and Expenses (1,812.8) (1,968.6) (2,347.7) (2,934.6) (3,668.2) (4,585.3) (5,731.6)Depreciation 402.2 375.9 240.2 # 234.1 # 232.8 # 237.1 # 248.2 EBITDA 638.2 815.9 911.0 1,072.6 1,280.9 1,547.1 1,885.8

EBITDA Margin 26.3% 30.4% 27.2% 25.6% 24.4% 23.6% 23.0%

Operating Income 236.0 440.0 670.8 838.5 1,048.1 1,310.1 1,637.6 Operating Income Margin 9.7% 16.4% 20.0% 20.0% 20.0% 20.0% 20.0%

Interest (Expense) 0.0 0.0 (3.4) (0.7) 0.0 0.0 0.0 Interest Income 20.2 52.1 0.0 0.0 0.0 0.0 0.0 Other Income (Expenses) 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBT 256.2 492.2 667.4 837.8 1,048.1 1,310.1 1,637.6 Income Tax Expense (95.5) (278.4) (233.6) (293.2) (366.8) (458.5) (573.2)Income from Continued Operations 160.7 213.7 433.8 544.5 681.2 851.6 1,064.4 Effect on Acct Change (net of taxes) 0.0 3.8 3.8 3.8 3.8 3.8 3.8 Net Income $160.7 $217.5 $437.6 $548.3 $685.0 $855.3 $1,068.2 Diluted Shares Outstanding 344.1 342.4 342.4 342.4 342.4 342.4 342.4 Diluted EPS (1) $0.47 $0.62 $1.27 $1.59 $1.99 $2.49 $3.11

First Call $3.36 $3.38 $3.66 $3.93

Dividends Per Share               $0.00   $0.00   $0.00   $0.00   $0.00   $0.00   $0.00 Payout Ratio                   0.0%  0.0%  -   -   -   -   -

Assumed P/E 42.0x 107.3x 107.3x 107.3x 107.3x 107.3xImplied Share Price for Repurchase $26.21 $135.99 $170.70 $213.55 $266.94 $333.68 Shares to Repurchase 0MM Shares 0MM Shares 0MM Shares 0MM Shares 0MM Shares

One-Year Average Share Price $67.00 Implied '03 P/E 107.3x

       (1)Based on Income from Continued Operations.

- DRAFT - Bio Gen

Balance Sheet ($ in millions)                            

Historical FYE Dec. 31, Projected Fiscal Years Ending Dec. 31,2005A 2006A 2007E 2008E 2009E 2010E 2011E

Cash and Cash Equivalents $850.8 $902.7 $1,128.4 $1,508.1 $1,957.5 $1,820.0 $2,754.8 Accounts Receivable (net) 280.5 317.4 387.5 472.9 576.8 703.0 856.3 Inventories 182.8 169.1 205.8 256.1 318.7 396.5 493.4 Due from unconsolidated business 141.1 168.7 210.9 263.6 329.5 411.9 514.9 Other current assets 177.7 154.7 193.4 241.7 302.2 377.7 472.1 Total Current Assets 1,632.9 1,712.6 2,125.9 2,742.4 3,484.6 3,709.1 5,091.5

Gross PP&E 1,389.6 1,589.0 Accumulated Depreciation (214.8) (308.6)          Net PP&E 1,174.8 1,280.4 1,173.8 1,467.3 1,834.1 2,292.6 2,865.8

Marketable securities 1,204.4 1,412.2 1,765.3 2,206.6 2,758.3 3,447.8 4,309.8 Intangibles 2,975.6 2,747.2 2,747.2 2,747.2 2,747.2 2,747.2 2,747.2 Goodwill 1,130.4 1,154.8 1,154.8 1,154.8 1,154.8 1,154.8 1,154.8 Investments and other assets 264.1 245.6 307.0 383.8 479.7 599.7 749.6 Total Assets $8,382.1 $8,552.8 $7,508.8 $8,495.5 $9,700.5 $10,503.4 $12,608.9

Accounts Payable $99.8 $100.5 $122.8 $153.5 $191.9 $239.8 $299.8 Taxes Payable 200.2 145.5 181.9 227.4 284.2 355.3 444.1 Accrued Expenses 297.8 336.9 307.0 383.8 479.7 599.7 749.6 Total Current Liabilities 597.8 582.9 611.7 764.7 955.8 1,194.8 1,493.5

Notes Payable 43.4 96.7 25.4 0.0 0.0 0.0 340.5 Long Term deferred tax liablility 762.3 643.6 643.6 618.3 618.3 618.3 958.7 Other Long Term Liabilities 72.3 79.8          Total Long Term Liabilities 878.0 820.2 643.6 618.3 618.3 618.3 958.7

Common Stock 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Additional Paid-in Capital 8,206.9 8,308.2 8,308.2 8,308.2 8,308.2 8,308.2 8,308.2 Other SE Items, incl. Treasury Stock (222.8) (319.7) (319.7) (319.7) (319.7) (319.7) (319.7)Deferred Stock Compensation (42.9)Accum. Other Comprehensive Income (13.9) 21.9 21.9 21.9 21.9 21.9 21.9 Retained Earnings (1,021.6) (860.8) (423.2) 125.1 810.1 1,665.4 2,733.7 Total Equity 6,905.9 7,149.8 7,587.4 8,135.7 8,820.7 9,676.0 10,744.3 Total Liabilities & SE $8,381.7 $8,552.8 $8,842.7 $9,518.6 $10,394.8 $11,489.1 $13,196.5 Assets-(Liabilities + SE) 0.395 0.000 (1,333.965) (1,023.110) (694.335) (985.667) (587.581)

- DRAFT - Bio Gen

Cash Flow Statement ($ in millions)                          

Projected Fiscal Years Ending Dec. 31,2007E 2008E 2009E 2010E 2011E

Net Income $437.6 $548.3 $685.0 $855.3 $1,068.2 Depreciation 240.2 234.1 232.8 237.1 248.2 Amortization 0.0 0.0 0.0 0.0 0.0 (Increase)/Decrease in Intangibles 0.0 0.0 0.0 0.0 0.0 (Increase)/Decrease in Investments and other assets (61.4) (76.8) (95.9) (119.9) (149.9)

Changes in Working Capital Accounts:(Increase)/Decrease in Accounts Receivable (net) (36.8) (70.1) (85.4) (103.9) (126.2) (153.3)(Increase)/Decrease in Inventories 13.7 (36.7) (50.3) (62.6) (77.9) (96.9)(Increase)/Decrease in Due from unconsolidated business (27.6) (42.2) (52.7) (65.9) (82.4) (103.0)(Increase)/Decrease in Other current assets 23.0 (38.7) (48.3) (60.4) (75.5) (94.4)Increase/(Decrease) in Accounts Payable 0.7 22.3 30.7 38.4 48.0 60.0 Increase/(Decrease) in Taxes Payable (54.7) 36.4 45.5 56.8 71.1 88.8 Increase/(Decrease) in Accrued Expenses 39.0 (29.8) 76.8 95.9 119.9 149.9 Total Changes in Working Capital (42.7) (158.8) (83.8) (101.6) (123.1) (148.9)Change in NWC as % of Sales 1.6% 2.0% 2.0% 2.0% 2.0% 2.0%Cash Provided / (Used) by Operating Activities (42.7) 519.0 698.6 816.2 969.3 1,167.5

Net Capital Spending (222.0) (293.5) (366.8) (458.5) (573.2)Other 0.0 0.0 0.0 0.0 0.0 Cash (Used) / Provided by Investing Activities (222.0) (293.5) (366.8) (458.5) (573.2)

Increase/(Decrease) in Common Equity 0.0 0.0 0.0 0.0 0.0 Dividends $0.0 $0.0 $0.0 $0.0 $0.0 Preferred Dividends 0.0 0.0 0.0 0.0 0.0 Cash (Used) / Provided by Financing Activities 0.0 0.0 0.0 0.0 0.0

Net Increase / (Decrease) in Cash Balance 297.0 405.1 449.4 510.8 594.3 Plus: Cash at Beginning of Period 902.7 1,128.4 1,508.1 1,957.5 1,820.0 Cash Available / (Deficit) to Reduce Revolver 1,199.7 1,533.5 1,957.5 2,468.3 2,414.3 Minimum Cash Balance 1,128.4 1,410.5 1,763.1 2,203.8 2,754.8 Cash (Used) / Drawn to Reduce Revolver (71.3) (25.4) 0.0 0.0 340.5 Cash at End of Period $1,128.4 $1,508.1 $1,957.5 $2,468.3 $2,754.8

- DRAFT - Bio Gen

Projections Assumptions ($ in millions)                        

Historical FYE Dec. 31, Projected Fiscal Years Ending Dec. 31,2005A 2006A 2007E 2008E 2009E 2010E 2011E

Income Statement

Net Sales Growth 10.8% 25.0% 25.0% 25.0% 25.0% 25.0% Cost of Goods Sales % of Net Sales 15.4% 10.2% 10.0% 10.0% 10.0% 10.0% 10.0%

SG&A and Other % of Net Sales 74.8% 73.4% 70.0% 70.0% 70.0% 70.0% 70.0%Interest on Cash Balance 6.1% 5.9% 4.0% 4.0% 4.0% 4.0% 4.0%

Effective Interest on Total Debt 0.0% 5.5% 5.5% 5.5% 5.5% 5.5%Effective Tax Rate 37.3% 56.6% 35.0% 35.0% 35.0% 35.0% 35.0%

Balance SheetMinimum Cash Balance $850.8 $902.7 $1,128.4 $1,410.5 $1,763.1 $2,203.8 $2,754.8

Min Cash Balance as % of Sales 35.1% 33.6% 33.6% 33.6% 33.6% 33.6% 33.6%Accounts Receivable Days 42.3 43.2 42.2 41.2 40.2 39.2 38.2

Inventory Days 178.6 224.9 223.9 222.9 221.9 220.9 219.9 Inventory Turns 2.0 1.6 1.6 1.6 1.6 1.7 1.7 Accounts Payable Days 97.5 133.6 133.6 133.6 133.6 133.6 133.6

Due from unconsolidated business % of Net Sales 5.8% 6.3% 6.3% 6.3% 6.3% 6.3% 6.3%Other current assets % of Net Sales 7.3% 5.8% 5.8% 5.8% 5.8% 5.8% 5.8%Total Current Assets % of Net Sales 67.4% 63.8% 63.8% 63.8% 63.8% 63.8% 63.8%Net PP&E % of Net Sales 48.5% 47.7% 47.7% 47.7% 47.7% 47.7% 47.7%Marketable securities % of Net Sales 49.7% 52.6% 52.6% 52.6% 52.6% 52.6% 52.6%Intangibles % of Net Sales 122.8% 102.4% 102.4% 102.4% 102.4% 102.4% 102.4%Goodwill % of Net Sales 46.7% 43.0% 43.0% 43.0% 43.0% 43.0% 43.0%

Investments and other assets % of Net Sales 10.9% 9.2% 9.2% 9.2% 9.2% 9.2% 9.2%

Taxes Payable % of Net Sales 8.3% 5.4% 5.4% 5.4% 5.4% 5.4% 5.4%Accrued Expenses % of Net Sales 10.9% 9.2% 9.2% 9.2% 9.2% 9.2% 9.2%

Total Current Liabilities % of Net Sales

Notes Payable % of Net Sales 0.0% # 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Long Term deferred tax liablility % of Net Sales 4.1% # 3.7% 3.7% 3.7% 3.7% 3.7% 3.7%

Other Long Term Liabilities % of Net Sales 8.3% # 5.4% 5.4% 5.4% 5.4% 5.4% 5.4%

Total Long Term Liabilities % of Net Sales 12.3% # 12.6% 12.6% 12.6% 12.6% 12.6% 12.6%

Cash Flow StatementCapital Spending (1) ($318.4) ($198.3) ($222.0) ($293.5) ($366.8) ($458.5) ($573.2)Sale of PP&E 408.1 74.2 0.0 0.0 0.0 0.0 0.0 Net Capital Spending $89.8 ($124.1) ($222.0) ($293.5) ($366.8) ($458.5) ($573.2)

% of Sales 13.1% 7.4% 6.6% 7.0% 7.0% 7.0% 7.0%

PPE 1,174.8 1,280.4 1,173.8 1,467.3 1,834.1 2,292.6 2,865.8% of Sales 48.5% 47.7% 35.0% 35.0% 35.0% 35.0% 35.0%

Depreciation/Tax/Interest Rate Schedules ($ in millions)                

GAAP Depreciation                                        

Average Remaining Life of Existing PP&E 10.0 Existing Net PP&E $1,280

Annual 1st Year Projected Fiscal Years Ending Dec. 31,Year $ CapEx Life Depreciation Convention 2007E 2008E 2009E 2010E 2011E

1 2 3 4 5

CapEx Schedule

  2007E $222.0 15 $14.8 0.5 $7.40 $14.8 $14.8 $14.8 $14.8   2008E $293.5 15 $19.6 0.5 $9.8 $19.6 $19.6 $19.6   2009E $366.8 15 $24.5 0.5 $12.2 $24.5 $24.5   2010E $458.5 15 $30.6 0.5 $15.3 $30.6   2011E $573.2 15 $38.2 0.5 $19.1

         Depreciation of New PP&E 7.4 24.6 46.6 74.1 108.5

Plus: Depreciation of Existing PP&E 232.8 209.5 186.2 163.0 139.7

Total Book Depreciation $240.2 $234.1 $232.8 $237.1 $248.2

Calculation of Interest on Debt                                    

2006A Weighted Average Interest Rate

Rate Amount Weight5.5% 0 #DIV/0!

   0 5.5%

       (1) Effective tax rate based on published

research.- 1 -

Summary Financials ($ in millions, except per share amounts)                

Historical FYE Dec. 31, Projected Fiscal Years Ending Dec. 31, CAGR2005A 2006A 2007E 2008E 2009E 2010E 2011E 2003-2008E

Operating Statistics 1 2 3 4 5 6 7 Net Sales $2,422.5 $2,683.0 $3,353.8 $4,192.3 $5,240.3 $6,550.4 $8,188.0 25.0%Gross Profit 2,048.9 2,408.7 3,018.4 3,773.0 4,716.3 5,895.4 7,369.2 25.1%Operating Income 236.0 440.0 670.8 838.5 1,048.1 1,310.1 1,637.6 30.1%Income from Continued Operations 160.7 213.7 433.8 544.5 681.2 851.6 1,064.4 37.9%Diluted EPS (1) 0.47 0.62 1.27 1.59 1.99 2.49 3.11 37.9%

EBITDA 638.2 815.9 911.0 1,072.6 1,280.9 1,547.1 1,885.8 18.2%Capital Spending 318.4 198.3 222.0 293.5 366.8 458.5 573.2 23.6%Free Cash Flow (EBITDA - Capital Spending) 319.9 617.6 689.0 779.1 914.1 1,088.6 1,312.6 16.3%

Growth RatesNet Sales 10.8% 25.0% 25.0% 25.0% 25.0% 25.0%Gross Profit 17.6% 25.3% 25.0% 25.0% 25.0% 25.0%Operating Income 86.4% 52.4% 25.0% 25.0% 25.0% 25.0%

EBITDA 27.8% 11.7% 17.7% 19.4% 20.8% 21.9%Free Cash Flow (EBITDA - Capital Spending) 93.1% 11.6% 13.1% 17.3% 19.1% 20.6%

MarginsGross Profit 89.8% 90.0% 90.0% 90.0% 90.0% 90.0%Operating Income 16.4% 20.0% 20.0% 20.0% 20.0% 20.0%Income from Continued Operations 8.0% 12.9% 13.0% 13.0% 13.0% 13.0%

EBITDA 30.4% 27.2% 25.6% 24.4% 23.6% 23.0%Free Cash Flow (EBITDA - Capital Spending) 23.0% 20.5% 18.6% 17.4% 16.6% 16.0%

Leverage / Credit StatisticsEBITDA / Total Interest Expense #DIV/0! #DIV/0! 271.3x 1,536.4x #DIV/0! #DIV/0! #DIV/0!FCF / Total Interest Expense #DIV/0! #DIV/0! 205.2x 1,116.0x #DIV/0! #DIV/0! #DIV/0!Average Total Debt / EBITDA -- 1.0x 0.8x 0.6x 0.5x 0.4x 0.4xDebt / Total Capital (Book) 10.5% 9.6% 8.6% 7.3% 6.4% 5.9% 7.6%Net Debt / Total Capital (Book) 0.3% -1.0% -6.5% -10.5% -13.8% -11.4% -14.2%

Operating ReturnsNet Sales / Assets (Average) -- 31.7% 41.8% 52.4% 57.6% 64.8% 70.9%Operating Income Return on Assets (Average) -- 5.2% 8.4% 10.5% 11.5% 13.0% 14.2%Return on Equity (Average) (1) -- 3.0% 5.9% 6.9% 8.0% 9.2% 10.4%

       (1)Based on Income from Continued Operations

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