1. Stock Or Cash -- A Financial Perspective All Stock Deal A Plans to Acquire T in a Stock-for- Stock Deal With T Receiving $84.30 for Each Share of Its Common Stock. A Expects No Change to Its P/E Multiple Post-closing and Assumes No Earnings Growth Due to Synergy.

2. Company ACompany T Net Earnings Available For Common $281,500$62,500 # of Shares Outstanding 112,00018,750 Market Price Per Share $56.25$62.50 Pre Deal Facts

3. Accretion/Dilution Analysis Purchase Price Premium is 35% = $84.30 (A’s offer price)/$62.50 (T’s pre deal market price.

4. Accretion/Dilution Analysis Purchase Price Premium is 35% = $84.30 (A’s offer price)/$62.50 (T’s pre deal market price. Exchange Ratio is 1.5 = $84.30 (A’s offer price)/$56.25(A’s pre deal market price).

5. Accretion/Dilution Analysis Purchase Price Premium is 35% = $84.30 (A’s offer price)/$62.50 (T’s pre deal market price. Exchange Ratio is 1.5 = $84.30 (A’s offer price)/$56.25(A’s pre deal market price). A will issue 28,125 new shares = I.5 x 18,750 T shares outstanding.

6. Accretion/Dilution Analysis Purchase Price Premium is 35% = $84.30 (A’s offer price)/$62.50 (T’s pre deal market price. Exchange Ratio is 1.5 = $84.30 (A’s offer price)/$56.25(A’s pre deal market price). A will issue 28,125 new shares =I.5 x 18,750 T shares outstanding. Total shares of “NEWCO” = 140,125 consisting of 112,000 (A’s pre deal shares outstanding) + 28,125 new shares issued.

7. Accretion/Dilution Analysis Purchase Price Premium is 35% = $84.30 (A’s offer price)/$62.50 (T’s pre deal market price. Exchange Ratio is 1.5 = $84.30 (A’s offer price)/$56.25(A’s pre deal market price). A will issue 28,125 new shares =I.5 x 18,750 T shares outstanding. Total shares of “NEWCO” = 140,125 consisting of 112,000 (A’s pre deal shares outstanding) + 28,125 new shares issued. NEWCO’s expected EPS is $2.46 consisting of $281,500 (A) + $62,500 (B) = $344,000/140,125 NEWCO shares outstanding.

8. Accretion/Dilution Analysis A’s pre merger EPS of $2.51 resulted in a pre merger P/E of 22.4 ($56.25 market price)/$2.51 EPS).

9. Accretion/Dilution Analysis A’s pre merger EPS of $2.51 resulted in a pre merger P/E of 22.4 ($56.25 market price)/$2.51 EPS). NEWCO’s expected share price of $55.10 is calculated from its expected EPS of $2.46 x its P/E multiple of 22.4.

10. Accretion/Dilution Analysis A’s pre merger EPS of $2.51 resulted in a pre merger P/E of 22.4 ($56.25 market price)/$2.51 EPS). NEWCO’s expected share price of $55.10 is calculated from its expected EPS of $2.46 x its P/E multiple of 22.4. This deal likely will result in dilution of $1.15 per share and A’s shareholders owing 79.9% of NEWCO with T’s shareholders owning 20.1%.

11. All Cash Deal T Agrees to an All Cash Purchase of 100% of Its Outstanding Common Stock for $84.30/share With the Deal Financed by Excess Cash Balances on Hand.

12. Accretion/Dilution Analysis NEWCO’s EPS = $281,500 (A) + $62,500 (B) = $344,000/112,000 AT shares outstanding = $3.07.

13. Accretion/Dilution Analysis NEWCO’s EPS = $281,500 (A) + $62,500 (B) = $344,000/112,000 AT shares outstanding = $3.07. NEWCO’s expected share price of $68.77 is calculated from its expected EPS of $3.07 x its P/E multiple of 22.4.

14. Accretion/Dilution Analysis AT’s EPS = $281,500 (A) + $62,500 (B) = $344,000/112,000 AT shares outstanding = $3.07. AT’s expected share price of $68.77 is calculated from its expected EPS of $3.07 x its P/E multiple of 22.4. This deal likely will result in accretion of $12.52 per share and A’s shareholders own 100% of NEWCO. Source: Mergers, Acquisitions, and other Restructuring Activities by Donald DePamphlis, Academic Press, 2001.