Choice Hotels International Hyatt Hotels Corporation (NASDAQ: MAR) Market Cap: $41.6B (NYSE: CHH) Market Cap: $4.5B (NYSE: H) Market Cap: $7.5 B

Home , Best Western, Hyatt, Marriott International

Choice Hotel International InvestmentNYSE: CHH Research Presentation MonthSector: Day, Consumer 20XX Discretionary Senior Analysts: Austin Hsu & Matthew Smith Junior Analysts: Anna Watson, Camryn Difiore, Javier De Urdanibia, Sikta Samal

Spring 2018

1 Valuation Summary

Recommendation Summary REIT’s

Choice Hotel International, Inc. CHH Current Trading Price (4/9/18) $ 79.15

Recommendation HOLD Target Price $ 85.97 Upside Potential 8.6%

Recommendation HOLD

2 Agenda

Industry Definition & Breakdown

Company Overview

Revenue Generation Model

Industry & Company Trends

Risk Analysis

Comparable & DCF Valuation

Summary/Recommendation

3 Industry Definition Hotels & Motels Operators provide temporary lodging in hotels, motels, and resorts. Establishments may also offer services including food and beverage, conference room, laundry, parking, etc.. The industry excludes any hotels that have casinos attached to them.

Companies Within this Industry:

Marriott International Choice Hotels International Hyatt Hotels Corporation (NASDAQ: MAR) Market Cap: $41.6B (NYSE: CHH) Market Cap: $4.5B (NYSE: H) Market Cap: $7.5 B

Hilton Worldwide Holdings Wynn Resorts, Limited Intercontinental Hotels Group (NYSE: HLT) Market Cap: $22.3B (NASDAQ: WYNN) Market Cap: $19.9B (NYSE: IHG) Market Cap: $10.1B

Sources: IBIS World, CapIQ 4 Industry Breakdown

Hotel Industry Overview Market Share Breakdown

Marriott Number of Countries 20% Hotels Hotels Rooms Represented Brands

Wyndham 8,145 708,545 78 19

Choice 6,557 500,000 40 12

Marriott 6,200 1,200,000 125 30 Other Hilton 53% 13% InterContinental 5,272 785,544 100 12

Hilton 5,100 837,692 103 14 InterContinental 6.9% Best Western 3,651 295,878 101 12 Wyndham Choice 3.8% 3.1%

Source: IBIS World, The Points Guy 5 Company Overview

§ Founded and based in Rockville, Maryland CHOICE HOTELS Market § CEO: Patrick Pacious, CFO: Dominic Dragisich Capitalization $4.505 Billion § Offers value to consumers across diverse markets including economy, mid-scale and upscale segments 2017 Revenue $1,007.4 Million

§ Global holdings in over 40 countries and territories Property Count 6,866 Properties (Domestic & (5,740 Domestic, International) 1,126 International) § Operates on a franchise model which is less capital intensive than outright property ownership ADR $84.02

§ Develops cloud-based technology products to the Occupancy Rate 62.2% hotel industry, including inventory management, pricing, and connectivity to third party channels and RevPAR $52.25 hoteliers

Source: 10K, Choice Hotel, Reuters 6 Revenue Generation Model

Revenue Streams

Royalty Fees Fees calculated as a percentage of gross sales or number of rooms in franchised hotels depending on agreement Initial franchise relicensing fees Initial Franchise & Fees are collected during initial franchise agreement as well Relicensing Fees as relicensing fees from expired contracts

Procurement Fees from business transactions with vendors and strategic Services alliance partners

Marketing & Fees are recollected to be reinvestedMarketing for system & Reservation wide Reservations support activities (Advertising, Maintenance, PMS upgrades)

Others Fees from SkyTouch TechnologyOther

Source: 10K, Choice Hotel 77 Industry Trends

REIT’s Shrinking Loyalty Independent Programs Hotels

8 Industry Trend #1: Loyalty Programs

Membership as Membership as Membership § Ranked No.1 in USA Today’s Choice Awards and No.3 in Programs of 2015 of 2014 Percent Change the Best Hotel Rewards Programs by U.S. News IHG Rewards Club 92M 84M 10% § Includes more than 6,500 participating hotels throughout Marriott Rewards + the United States, Europe, Mexico and the Caribbean Ritz Carlton Rewards 54M 49M 10.20%

§ Program is divided into four tiers: Member, Gold, Hilton Platinum and Diamond HHonors 51M 44M 15.90% Wyndham § Members can earn points at Choice brand hotels that can Rewards 45M 32.3M 39.7% be used towards future stays at Choice Hotels properties, Choice select Preferred Hotels and Resorts brand properties, Privileges 25M 21M 19% airline miles, cruise vacations and gift cards Hyatt Gold Passport 20M 18M 11% § Cornell School of Hotel Administration Study – Rewards members: $2400 annual revenue per guest La Quinta 11M 10M 10% – Non-members: $1600 annual revenue per guest – Frequency of stays booked by a guest at hotels rose on average by 49% Hotel Loyalty Program = – 50% increase in revenue compared to those who did More recurring revenue, Increase stay not join the program frequency, Guests Spending

Source: Cornell School of Hotel Administration, Deloitte, US World News, USA Today 9 Industry Trend #1: Loyalty Programs

Hotel Group A: Hotel group with an average ADR of $73 Budget Economy à Midscale Hotel Group B : hotel with significantly higher ADR of $261. Upscale à Luxury

Spending habits of eventual Stash members vs Non-members prior to the enrollment period Hotel A Hotel B

Non-members Stash Members Non-members Stash Members Average Revenue Per Night $70.19 $97.65 $269.02 $262.41 Total Nights per year 2.84 8.69 4.46 5.77 Total Stays per year 1.15 3.26 1.79 2.21 Total Revenue per year $190.75 $712.59 $1,296.05 $1,591.25 Changes in guest spending due to enrollment in Stash Hotel Rewards program Hotel A Hotel B Numerical Change Percentage Change Numerical Change Percentage Change Average Revenue Per Night $3.62 4% $2.41 1% Total Nights Per year 3.9 45% 2.83 49% Total Stays per year 1.46 45% 1.15 52% Total Revenue per year $404.94 57% $780.65 49%

Increased Revenue Per Night Increased Nights per Year Increased Stays Per Year Increased Total Revenue

Source: Cornell School of Hotel Administration 10 Industry Trend #2: Decreasing Amount of Unbranded Hotels

§ Due to high fixed costs of hotel industry, becoming a franchise of a CHH: Growth from Franchises (2012-2017) larger brand often improves $56.00 independent hotel financial $54.00 y = 0.029x - 106.09 performance R² = 0.8299 $52.00 2017 2016

Due to Online Travel Agencies $50.00 (OTAs) fees: 15% for brands, 25% 2015 for independent hotels $48.00

RevPAR 2014 $46.00 20% of branded hotels’ bookings use OTAs $44.00 $42.00 2013 50% of independent hotels’ bookings use OTAs $40.00 5150 5200 5250 5300 5350 5400 5450 5500 5550 § Branded hotels occupancy rate 66.8% Number of Domestic Franchises while unbranded at 62.3%

Shifting independent hotels to a brand’s umbrella will continue to the disrupt the current system of hotel and brand effectiveness

Source: 10K, Hotel Management 11 Company Trends

REIT’s

Expansion of Growth of IT Brand Portfolio

12 Company Trend #1: Expansion of Brand Portfolio

Company-Wide Overview Hotel Number of Segment § Diversified Target Market: Economy à Upscale Properties § Owns 12 Brands, 6866 Properties, 413,015 Rooms Cambria 36 Upscale § International: Operates in over 40 Countries Ascend 162 Upscale Comfort Inn 1,083 Upper-Mid Scale Recent M&A Activity Comfort Suites 567 Upper-Mid Scale Quality Inn 1,542 Mid Scale § Vacation Rental: Acquisition of Maxxton (2015) Clarion 166 Mid Scale – SaaS solution for vacation rental companies Sleep Inn 384 Mid Scale – Partnered with Vacation-Rental Companies Mainstay Suites 60 Extended Stay – Combat Airbnb and Homeaway (Expedia) WoodSpring 239 Extended Stay Suburban Extended Stay 61 Extended Stay § Economy Extended Stay Segment: Acquisition of Econo Lodge 840 Economy WoodSpring Suites (2018) Rodeway Inn 600 Economy – Adding 240 hotels to portfolio in 35 states International 1,126 Combination – Industry: Economy Extended-Stay Segment led the Total 6866 hospitality industry in annual RevPAR growth in 2017 – WoodSpring: 25% unit growth, 21% RevPAR growth, and 48% gross room revenue growth in last 3 years

Diversity in the lodging industry offers conversion opportunities during both industry contraction and growth cycles

Source: 10K, Choice Hotel, Maxxton, USA Today, PhocusWire 13 Company Trend #1: Expansion of Brand Portfolio

Advantages of a Diverse Portfolio Effect of Number of Franchisee on Average Royalty § Diversity offers conversion opportunities Rate during both industry contraction and 4.65% growth cycles 4.60% 4.55% y = 9E-06x - 0.0065 R² = 0.859 4.50% § Different Price points for both franchises 4.45% 4.40% as well as lodging customers 4.35% 4.30% Average Royalty Rate Royalty Average 4.25% § Average Royalty Rate: CAGR 1.52% 4.20% 5150 5200 5250 5300 5350 5400 5450 5500 5550 Number of Domestic Franchisee § Number of Franchisee : CAGR: 1.51%

§ What happened from 2013-2015? Number of Domestic Franchisee vs Average Royalty Rate (2013 – 2022) – Operating Statistics from Cambria 6000 5.20% Hotel and Suites were not included 5800 5.00% as a result of recent acquisition 5600 4.80% 4.60% 5400 4.40% 5200 4.20% The increase in number of franchisee 5000 4.00%

agreements has led to an increase in the 4800 3.80% Rate Royalty Average 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E average royalty rate

Number of Domestic Franchisees Domestic of Number Year

Number of Domestic Properties Royalty Rate

Source: 10K, Choice Hotel 14 Company Trend #2: Growth of Information Technology

Customer Reservation System (CRS) “Optimizes rate, inventory, availability, Slight variation due to Advantage shopping, booking, and reservations” redesign

Property Management System (PMS) The increased awareness allows Choice to “Helps franchises maximize profitability decrease marketing and reservation fee and and compete more effectively” increase royalty fees.

Source: 10K, Choice Hotel 15 Company Trend #2: Growth of Information Technology

Development of SkyTouch Technology

§ Launched in May 2013 SkyTouch is a division that develops and markets cloud- based technology to hotel industry

§ Sells this technology to those hotels SkyTouch Technology Since 2014 NOT under franchise agreements 25000 Final round of sales and marketing investments

20000 § Designed to help achieve growth and

improve operating performance/guest 15000 Major investments experience no longer needed 10000 First full year of operations § Competes with similar products through 5000

functionality, service capabilities, and 0 geography ($) Thousands in Revenue/Expense 2014 2015 2016 2017 2018 Year

SkyTouch Technology will be an Revenues Expenses increased and important source of income for Choice moving forward.

Source: 10K, Choice Hotel 16 Risk Analysis

Technology Risks § Choice Hotels and their franchisees depend heavily on technology and a technological disruption or malfunction could hinder their business operations § Reservation platform competition § Cyber attacks/ threats

Operating Risks § Franchise Structure § Change in domestic and foreign economic - Deterioration of franchisees’ conditions financial condition § Change in government regulations - Failure to make proper § Consumer desires and employment investments - Franchise government policies

Competitive Risks § Competitors’ potential to offer better price, room, and location options § Competition among franchise lodging brands to attract franchisees

Source: 10K, Choice Hotel 17 Risk Resilience

Maintains distinct Upgrades technology reservation platforms continuously to Technology with SkyTouch support increased technology and volume and boost interactive browsing security

Fee and cost Franchisors have structure eliminates significant operating Franchise many franchise leverage associated risks

Maintains a Offers variety from Competitors competitive edge hotel rooms to through expansion vacation rentals

Source: 10K, Choice Hotel 18 Comparable Analysis

Comparable Company Analysis

LTM data (4/9/2018)

Company Ticker EV Market Cap Revenue EBITDA P/E EV/EBITDA EV/Revenue PEG ADR Occupancy Rate RevPAR

Choice Hotel CHH 4,924.5 4,505.8 1,007.4 28.95% 39.2x 16.9x 4.9x 1.0x $84.02 62.20% $52.25

La Quinta Inn & LQ 3,781.5 2,230.7 953.1 28.08% 14.7x 14.1x 4.0x Suites 4.8x $90.55 67.10% $60.55 Extended Stay STAY 6,187.0 3,764.9 1,282.7 47.20% 21.9x 10.2x 4.8x 2.0x $67.19 74.50% $50.05 America REIT’s Red Lion Hotels RLH 351.2 244.9 168.0 12.62% 408.2x 16.6x 2.1x 11.2x $96.19 62.20% $59.80

InterContinental IHG 13,377.4 8,099.7 1,261.9 45.34% 19.3x 23.4x 10.6x Hotels Group 1.7x $138.68 66.80% $95.41

High 408.2x 23.4x 10.6x 11.2x $138.68 74.5% $95.41 Mean 116.0x 16.1x 5.4x 4.1x $95.33 66.6% $63.61 Median 20.6x 15.3x 4.4x 2.0x $90.55 66.8% $59.80 Low 14.7x 10.2x 2.1x 1.0x $67.19 62.2% $50.05

P/E EV/EBITDA EV/Revenue

LTM EPS $2.02 LTM EBITDA $291.67 LTM Revenue $1,007.40

Implied Price Target $41.61 Implied Price Target $71.28 Implied Price Target $70.43

Upside (Downside) % -0.47% Upside (Downside) % -0.10% Upside (Downside) % -0.11%

*ADR: Average Daily Rate *RevPAR: Revenue Per Available Room = ADR x Occupancy Rate

19 DCF Valuation

Forecasted 2018 2019 2020 2021 2022

EBIT $ 347.05 $ 371.83 $ 407.23 $ 441.40 $ 473.27 - Taxes -114.1143516 -122.2603033 -133.9026117 -145.13574 -155.61547 $ 232.94 $ 249.57 $ 273.33 $ 296.26 $ 317.65 + D&A 14.11 15.12 16.05 16.87 17.56 - CAPEX (35.44) (22.59) (22.92) (22.98) (22.68) - Δ in NWC 49.52 12.60 9.95 8.49 6.70 Unlevered FCF $ 261.14 $ 254.70 $ 276.41 $ 298.64 $ 319.23 Net Present Value $ 1,114.91 Perpetuity Growth Method Growth Rate 2.50% Key Assumptions Undiscounted TEV $5,898.99 Discounted TEV $4,006.06 DCF Value $5,120.97 Equity Value $4702.22 § Cost of Debt: 3.93% Share Price $82.60 § Cost of Equity: 8.64% Implied Exit Multiple 12.0x § WACC: 8.05% Exit Multiple Method § Terminal Growth Rate: 2.20% EBITDA Multiple 16.90x Undiscounted TEV $8,295.00 § Exit Multiple: 16.90x Discounted TEV $5,633.22 § Assumed decrease in COGS due to DCF Value $6,748.13 Equity Value $6,329.37 “Market and Reservation Share Price $111.18 Implied Growth Rate 4.04% Improvements”

20 Recommendation Summary Recommendation Summary

Choice Hotel International, Inc. CHH Current Trading Price (4/9/18) $ 79.15 Recommendation HOLD Recommendation HOLD Target Price $ 85.97 Upside Potential 8.6% Desired Changes to Become a Buy Valuation Summary Method Price Weight SkyTouch Technology becomes Discounted Cash Flow significant revenue stream. Perpetuity Growth Method $ 82.60 60% Exit Multiple Method $ 111.18 20% RevPAR increases to industry Comparable Company Analysis wide averages. P/E $ 41.61 0% EV/EBITDA $ 71.28 10% COGS able to significantly decrease EV/Sales $ 70.43 10% as technology improves. Target Price $ 85.97

21 Thank You

22 Appendix: Income Statement Historical Forecasted 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Revenue 724.7 758.0 859.9 924.6 1,007.4 1,109.3 1,188.5 1,261.4 1,326.1 1,380.4 % growth 4.6% 13.4% 7.5% 8.9% 10.1% 7.1% 6.1% 5.1% 4.1%

COGS (excl. D&A) 407.6) (412.6) (488.8) (525.7) (567.1) (576.8) (618.0) (643.3) (663.0) (676.4) % of Revenue 56.25% 54.44% 56.84% 56.86% 56.29% 52.00% 52.00% 51.00% 50.00% 49.00% Gross Profit 317.0 345.4 371.1 398.9 440.3 532.5 570.5 618.1 663.0 704.0 % Margin 43.7% 45.6% 43.2% 43.1% 43.7% 48.0% 48.0% 49.0% 50.0% 51.0%

SG&A (111.7) (121.4) (134.3) (142.5) (148.6) (171.30) (183.5) (194.8) (204.8) (213.2) % of Revenue 15.41% 16.02% 15.62% 15.41% 14.75% 15.44% 15.44% 15.44% 15.44% 15.44% EBITDA 205.3 224.0 236.8 256.4 291.7 361.2 386.9 423.3 458.3 490.8 % Margin 28.3% 29.5% 27.5% 27.7% 29.0% 32.6% 32.6% 33.6% 34.6% 35.6%

Depreciation (9.1) (9.4) (11.5) (11.7) (12.4) (14.1) (15.1) (16.0) (16.9) (17.6) Amort. of Intangibles ------Total D&A (9.1) (9.4) (11.5) (11.7) (12.4) (14.1) (15.1) (16.0) (16.9) (17.6) Other Operating Expenses ------Total Operating Expenses (120.8) (130.8) (145.8) (154.2) (161.0) (185.4) (198.7) (210.8) (221.7) (230.7) Operating Income (EBIT) 196.2 214.6 225.3 244.7 279.3 347.1 371.8 407.2 441.4 473.3 % Margin 27.1% 28.3% 26.2% 26.5% 27.7% 31.3% 31.3% 32.3% 33.3% 34.3%

Interest Expense (42.5) (41.5) (42.8) (44.4) (45.0) (39.6) (39.6) (39.6) (39.6) (39.6) Interest Income 2.5 1.8 1.6 3.5 5.9 3.0 3.0 3.0 3.0 3.0 Net Interest Inc. (Exp) (40.0) (39.7) (41.2) (40.9) (39.1) (36.6) (36.6) (36.6) (36.6) (36.6)

Other Non-Operating Income 2.4 (1.1) (1.4) 2.0 (1.3) - - - - - EBT Excl. Unusual Items 158.7 173.7 182.7 205.9 238.9 310.5 335.2 370.6 404.8 436.7 % Margin 21.9% 22.9% 21.2% 22.3% 23.7% 28.0% 28.2% 29.4% 30.5% 31.6%

Unusual Items 1.3 (5.8) (14.8) - - - - - EBT Incl. Unusual Items 158.7 173.7 184.0 200.1 224.1 310.5 335.2 370.6 404.8 436.7

Income Tax Expense (45.3) (52.3) (56.0) (60.6) (109.1) -102.08238 (110.2) (121.9) (133.1) (143.6) Earnings from Cont. Ops 113.3 121.4 128.0 139.4 115.0 208.4 225.0 248.8 271.7 293.1

Earnings from Discounted Ops. 0.4 1.7 ------Extraord Item & Acct. Change ------Net Income to Company 113.7 123.1 128.0 139.4 115.0 208.4 225.0 248.8 271.7 293.1

Minority Int. in Earnings - - - - - 0 0 0 0 0 Net Income 113.7 123.1 128.0 139.4 115.0 208.4 225.0 248.8 271.7 293.1 % Margin 15.7% 16.2% 14.9% 15.1% 11.4% 18.8% 18.9% 19.7% 20.5% 21.2%

EPS $ 2.00 $ 2.16 $ 2.25 $ 2.45 $ 2.02 $ 3.66 $ 3.95 $ 4.37 $ 4.77 $ 5.15

23 Appendix: Balance Sheet

Historical Forecasted 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cash And Equivalents 167.8 214.9 193.4 202.5 235.3 428.6 615.5 824.1 1,054.9 1,306.2 Accounts Receivable 82.4 91.7 89.4 107.3 125.5 128.5 137.7 146.1 153.6 159.9 Other Recievables 12.8 5.5 10.6 8.2 13.9 (6.9) (7.4) (7.7) (7.9) (8.1) Total Receivables 95.2 97.2 100.0 115.5 139.4 121.6 130.3 138.4 145.7 151.8 Inventory ------Prepaid Exp. 13.7 12.3 14.1 22.2 16.5 18.9 20.2 21.0 21.7 22.1 Other Current Assets 3.1 1.2 3.4 4.7 11.8 5.4 5.8 6.1 6.3 6.4 Total Current Assets 279.8 325.6 310.9 344.9 403.0 574.5 771.8 989.6 1,228.5 1,486.5

Gross Property, Plant & Equipment 150.3 170.0 201.1 214.5 236.7 272.2 294.8 317.7 340.7 363.3 Accumulated Depreciation (82.4) (92.7) (113.0) (130.5) (153.4) (167.5) (182.6) (198.7) (215.6) (233.1) Net Property, Plant & Equipment 67.9 77.3 88.1 84.0 83.3 104.7 112.1 119.0 125.1 130.2

Long-term Investments 48.2 68.1 84.7 111.8 155.1 155.1 155.1 155.1 155.1 155.1 Goodwill 65.8 65.8 79.3 78.9 80.8 80.8 80.8 80.8 80.8 80.8 Other Intangibles 10.0 8.9 11.9 15.7 14.7 14.7 14.7 14.7 14.7 14.7 Deferred Tax Assets, Current & LT 26.7 44.4 42.4 52.8 13.3 13.3 13.3 13.3 13.3 13.3 Deferred Charges, LT 9.0 ------Other Long-Term Assets 48.7 47.9 99.5 164.3 177.5 177.5 177.5 177.5 177.5 177.5 Total Assets 555.9 638.0 717.0 852.5 927.6 1,120.5 1,325.2 1,549.9 1,794.9 2,058.1

Accounts Payable 41.7 57.1 64.4 48.1 63.5 66.4 71.2 74.1 76.4 77.9 Accrued Exp. 48.3 47.4 51.3 59.3 57.3 68.7 73.7 78.2 82.2 85.5 Curr. Income Taxes Payable 2.3 0.1 0.2 0.8 2.8 1.9 2.1 2.3 2.5 2.7 Unearned Revenue, Current 61.2 66.4 71.6 133.2 141.1 155.3 166.4 176.6 185.7 193.3 Other Current Liabilities 20.9 29.1 20.5 22.3 29.7 29.8 32.0 33.3 34.3 35.0 Total Current Liabilities 174.3 200.1 208.0 263.7 294.5 322.2 345.3 364.4 381.0 394.4

Long Term Debt 783.5 772.7 812.9 839.4 725.3 725.3 725.3 725.3 725.3 725.3 Capital Leases & Current Portion ------Unearned Revenue, Non-Current 1.6 4.3 13.1 15.2 18.3 18.3 18.3 18.3 18.3 18.3 Def. Tax Liability, Non-Curr. 5.1 - 0.5 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Other Non-Current Liabilities 44.7 89.6 78.4 45.3 101.5 101.5 101.5 101.5 101.5 101.5 Total Liabilities 1,009.3 1,066.7 1,112.9 1,163.8 1,139.7 1,167.5 1,190.5 1,209.6 1,226.2 1,239.6

Common Stock 0.6 0.6 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Additional Paid In Capital 117.8 127.7 149.9 159.0 182.4 182.4 182.4 182.4 182.4 182.4 Retained Earnings 353.0 432.4 514.9 607.6 673.8 838.9 1,020.6 1,226.1 1,454.5 1,704.3 Treasury Stock (918.0) (982.5) (1,052.9) (1,070.4) (1,064.6) (1,064.6) (1,064.6) (1,064.6) (1,064.6) (1,064.6) Comprehensive Inc. and Other (6.2) (7.0) (8.8) (8.5) (4.7) (4.7) (4.7) (4.7) (4.7) (4.7) Total Common Equity (452.8) (428.9) (396.0) (311.3) (212.1) (47.0) 134.7 340.2 568.6 818.4

Minority Interest ------Total Equity (452.8) (428.9) (396.0) (311.3) (212.1) (47.0) 134.7 340.2 568.6 818.4

Total Liabilities and Equity 556.5 637.9 716.9 852.5 927.5 1,120.4 1,325.2 1,549.8 1,794.8 2,058.0

Balance Check OK OK OK OK OK OK OK OK OK OK

24 Appendix: Sensibility Tables

DCF - Perpetuity Growth Sensitivity WACC $82.60 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 3.5% $ 150.96 $ 128.64 $ 111.91 $ 98.92 $ 88.55 $ 80.09 $ 73.07 $ 67.16 3.0% $ 130.83 $ 113.77 $ 100.52 $ 89.95 $ 81.33 $ 74.18 $ 68.15 $ 63.01 2.5% $ 115.67 $ 102.16 $ 91.39 $ 82.60 $ 75.31 $ 69.17 $ 63.93 $ 59.42

Rate 2.00% $ 103.84 $ 92.86 $ 83.90 $ 76.47 $ 70.21 $ 64.87 $ 60.27 $ 56.27 1.50% $ 94.36 $ 85.23 $ 77.65 $ 71.27 $ 65.83 $ 61.14 $ 57.06 $ 53.49 Terminal Growth 1.000% $ 86.59 $ 78.86 $ 72.36 $ 66.81 $ 62.03 $ 57.88 $ 54.23 $ 51.02

DCF - EV/EBITDA Exit Multiple Sensitivity WACC $111.18 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 18.9 x $ 130.91 $ 128.16 $ 125.49 $ 122.89 $ 120.37 $ 117.91 $ 115.52 $ 113.20 17.9 x $ 124.63 $ 122.03 $ 119.50 $ 117.04 $ 114.65 $ 112.32 $ 110.06 $ 107.86 16.9 x $ 118.35 $ 115.89 $ 113.51 $ 111.18 $ 108.93 $ 106.73 $ 104.59 $ 102.51 15.9 x $ 112.07 $ 109.76 $ 107.51 $ 105.33 $ 103.20 $ 101.14 $ 99.13 $ 97.17 Multiple 14.9 x $ 105.79 $ 103.63 $ 101.52 $ 99.47 $ 97.48 $ 95.55 $ 93.66 $ 91.83 Terminal EBITDA 13.9 x $ 99.51 $ 97.49 $ 95.53 $ 93.62 $ 91.76 $ 89.95 $ 88.20 $ 86.49

CompCo - Price/Earnings Sensitivity CompCo - EV/EBITDA Sensitivity CompCo - EV/Revenue Sensitivity Implied Share Price Implied Share Price Implied Share Price $71.28 $ 71.28 22.6 x $ 45.65 17.3 x $ 81.53 6.4 x $ 105.82 21.6 x $ 43.63 16.3 x $ 76.41 5.4 x $ 88.12 20.6 x $ 41.61 15.3 x $ 71.28 4.4 x $ 70.43 19.6 x $ 39.59 14.3 x $ 66.16 3.4 x $ 52.73 Multiple Multiple 18.6 x $ 37.57 Multiple 13.3 x $ 61.04 2.4 x $ 35.04 EV/EBITDA EV/Revenue

Price/Earnings 17.6 x $ 35.55 12.3 x $ 55.91 1.4 x $ 17.34