September 2011 Volume XV Issue 9 Spin-Off Research Joe Cornell, CFA Spin-Off Research September 2011 Table of Contents Spin-Off Announcement Calendar ...............................................................................................4 How Soon Post Spin Can an Acquisition Occur? ........................................................................6 Fresh Spin-Offs - DryShips (DRYS) to Partially Spin-Off Ocean Rig UDW (ORIG) .................................. 9 - Forest Oil Corp (FST) to Spin-Off Lone Pine Resources (LPR) on September 30 ........ 13 - Fortune Brands (FO) to Spin-Off Home & Security Business (FBHS) on October 3 .... 15 Focus Reports - El Paso (EP) to Spin-Off EP Energy (EPE) Tax-Free ..................................................... 19 - Expedia (EXPE) to Complete TripAdvisor Spin in Q4 ...................................................46 - Kraft (KFT) to Spin-Off North American Grocery ......................................................... 63 Announced Spin-Offs - AMR Corp (AMR) to Spin-Off AMR Eagle Holding Corp ............................................ 78 - ATS Automation Tooling Systems (ATA) to Spin-Off Photowatt Technologies .............93 - Western Copper Corp (WRN) to Split into Three Companies ...................................... 108 Potential Spin-Off - Hewlett-Packard (HPQ) Considering a Spin of its PC Business ...................................109 Spin-Off Update - Google to Acquire Motorola Mobility (MMI) ...............................................................110 Earnings Updates - Advantage Oil & Gas (AAV) 2Q11 Results .................................................................. 112 - Aker Solutions (AKSO) 2Q11 Results .......................................................................... 115 - AMC Networks (AMCX) Reports Q2 Earnings ............................................................118 - Box Ships (TEU) 2Q11 Results .....................................................................................120 - Carrefour (CA) 1H11 Results ........................................................................................122 - DIA (DIA) 1H11 Results ...............................................................................................126 - DryShips (DRYS) Announces Q2 Earnings ..................................................................129 - Echo Entertainment (EGP) FY11 Results ..................................................................... 132 - Enerfl ex (EFX) 2Q11 Results ........................................................................................135 - Essar Ports (ESSARPORTS) 1Q12 Results .................................................................. 137 - Foster’s (FGL) FY11 Results ........................................................................................ 139 1327 W. Washington Blvd, Suite 4-G, Chicago, Illinois 60607 | Phone: 312-939-8900 | Fax: 312-929-3503 | www.spinoffresearch.com 2 Spin-Off Research September 2011 - Golar LNG Limited (GLNG) 2Q11 Results ..................................................................142 - Golar LNG Partners (GMLP) 2Q11 Results ................................................................. 144 - Howard Hughes Corporation (HHC) 2Q11 Results ...................................................... 146 - Huntington Ingalls (HII) Reports Q2 Earnings ............................................................. 149 - Kvaerner (KVAER) 2Q11 Results .................................................................................151 - Liberty Media (LINTA, LSTZA, LCAPA) 2Q11 Results ............................................. 154 - Mpact (MPT) 1H11 Results ...........................................................................................158 - Paragon Shipping (PRGN) 2Q11 Results ......................................................................160 - Sara Lee (SLE) 4Q11 & Full Year Results ....................................................................162 - Sears Holdings (SHLD) 2Q11 Results .......................................................................... 165 - Tabcorp (TAH) Full Year Results .................................................................................. 168 - Toromont (TIH) 2Q11 Results .......................................................................................171 - Treasury Wine Estates (TWE) FY11 Results ................................................................ 174 Global Calendar ....................................................................................................................... 177 Spin Analysts’ Focus List ......................................................................................................... 189 Valuation Snapshots ................................................................................................................. 191 Implied Values.......................................................................................................................... 205 Foreign Implied Values ............................................................................................................ 206 Potential Spin-Off Watch List .................................................................................................. 207 Spin-Off by Date ...................................................................................................................... 208 Foreign Spin-Off by Date ........................................................................................................ 211 3 Spin-Off Research September 2011 ANNOUNCEMENT CALENDAR Announced Company Symbol Spin-Off Symbol Type Date ACCOR SA AC FP 2/24/2010 EDENRED NSH FP SP ACUITY BRANDS AYI 7/23/2007 ZEP INC ZEP SP ADVANTAGE AAV 3/7/2011 LONGVIEW LNV CO ALTRIA CORP MO 8/29/2007 PHILIP MORRIS INTERNATIONAL PM SP AMERICAN STANDARD CO ASD 2/1/2007 WABCO WBC SP AMR CORP AMR 8/11/2011 AMERICAN EAGLE SP ANADARKO PETROLEUM ADC 6/30/2007 WESTERN GAS PARTNERS LP WES CO APPLERA ABI 2/29/2008 CELERA CORP CRA SP ARCELORMITTAL MT 7/29/2010 APERAM APEMY SP ARVINMERITOR ARM 5/6/2008 ARVIN INNOVATION ARVI SP ATLAS AMERICA ATLS 2/27/2006 ATLAS PIPELINE HOLDINGS AHD CO ATS AUTOMATION TOOLING SYS. ATA CN 3/31/2011 PHOTOWATT SP AUTOMATIC DATA PROCESSING ADP 8/2/2007 BROADRIDGE FINANCIAL SOLUTIONS BR SP AWARE AWRE 9/24/2010 PATENT LICENSING OPERATIONS SP BARRICK GOLD ABX 2/18/2010 AFRICAN BARRICK GOLD ABG LN CO BELO CORP BELO 10/1/2007 A. H. BELO CORP AHC SP BENTLEY PHARMACEUTICALS BNT 7/31/2007 CPEX PHARMACEUTICALS CPEX SP BRISTOL-MYERS SQUIBB BMY 12/5/2007 MEAD JOHNSON NUTRITION MJN CO BRISTOL-MYERS SQUIBB BMY 11/15/2009 MEAD JOHNSON NUTRITION MJN SPLIT CABLE & WIRELESS COMM CWC LN 3/26/2010 CABLE & WIRELESS WORLDWIDE CWW LN SP CABLEVISION SYSTEMS CVC 11/18/2010 AMC NETWORKS INC. AMCX SP CABLEVISION SYSTEMS CVC 7/30/2009 MADISON SQUARE GARDEN MSG SP CAPITAL SHOPPING CENTRES CSCG LN 3/9/2010 CAPITAL & COUNTRY CAPC LN SP CADBURY SCHWEPPES CBRY LN 10/10/2007 DR. PEPPER SNAPPLE GROUP DPS SP CARROLS RESTAURANT GROUP TAST 2/24/2011 FIESTA RESTAURANT GROUP SP CARDINAL HEALTH CAH 9/29/2008 CAREFUSION CFN SP CARPHONE WAREHOUSE GROUP NCW LN 3/26/2010 TALKTALK TT LN SP CHENIERE ENERGY LNG 12/21/2006 CHENIERE ENERGY PARTNERS CQP CO CITIGROUP C 11/5/2009 PRIMERICA PRI CO CKX, INC CKXE 6/19/2007 FX LUXURY REALTY LLC FXRE SP CONOCOPHILLIPS COP 7/14/2011 DOWNSTREAM BUSINESS SP CYPRESS SEMICONDUCTOR CY 7/17/2008 SUNPOWER SPWRA SP DIANA SHIPPING DSX 12/23/2010 DIANA CONTAINERSHIPS INC. DCIX SP DIGIMARC DMRC 6/23/2008 DMRC CORP DMRCD SP DISCOVERY HOLDINGS DISCA 12/13/2007 DISCOVERY COMMUNICATIONS SP DISH NETWORK DISH 12/13/2007 ECHOSTAR HOLDINGS SATS SP DRYSHIPS INC. DRYS 12/23/2010 OCEAN RIG UDW ORIG SP E.W. SCRIPPS SSP 10/16/2007 SCRIPPS NETWORKS INTERACTIVE SNI SP eBAY EBAY 4/14/2009 SKYPE CXL EL PASO CORP EP 8/31/2007 EL PASO PIPELINE PARTNERS EPB CO EL PASO CORP EP 5/24/2011 EXPLORATION & PRODUCTION SP EMC EMC 2/8/2007 VMWARE VMW SP ENCANA CORP ECA 5/13/2008 CENOVUS ENERGY CVE SP ENZON PHARMACEUTICALS ENZN 5/8/2008 EVIVRUS, INC HOPE SP ESSAR PORTS ESRS IN 8/12/2010 ESSAR SHIPPING SP EXPEDIA EXPE 4/7/2011 TRIPADVISOR HOLDINGS SP FBR INC FBR 4/10/2007 FBR CAPITAL MARKET FBCM CO FIAT S.P.A. F 4/21/2010 FIAT INDUSTRIAL FI IM SP FIDELITY NATIONAL INFO FIS 10/25/2007 LENDER PROCESSING SERVICES LPS SP FIRST AMERICAN (CORELOGIC) CGLX 1/15/2008 FIRST AMERICAN FINANCIAL FAF SP FMC TECHNOLOGIES FTI 10/29/2007 JOHN BEAN TECHNOLOGIES JBT SP FOCUS MEDIA HOLDING FMCN 9/19/2008 ALLYES ONLINE MEDIA HOLDING CO FOREST OIL FST 12/13/2010 LONE PINE RESOURCES LPR CO FORTUNE BRANDS* FO 12/8/2010 HOME & SECURTIY SP FOSTER'S GROUP FGL AU 2/15/2011 TREASURY WINE ESTATES TWE SP GAIAM GAIA 2/7/2008 REAL GOODS SOLAR RSOL CO GENCO SHIPPING & TRADING GNK 10/14/2009 BALTIC TRADING LIMITED BALT CO GENERAL GROWTH PROPERTIES GGP 8/25/2010 HOWARD HUGHES HHC SP GENERAL GROWTH PROPERTIES GGP 8/2/2011 ROUSE PROPERTIES SP GENERAL ELECTRIC COMPANY GE 7/10/2008 CONSUMER & INDUSTRIAL BUSINESS SP GENWORTH FINANCIAL GNW 5/29/2009 GENWORTH MI CANADA MIC CN CO GOLAR LNG LTD. GLNG 3/30/2011 GOLAR LNG PARTNERS GMLP CO GRUPO CARSO GCARSOA1 8/25/2010 MINERA FRISCO MFRISCO SP GRUPO CARSO GCARSOA1 8/25/2010 INMUEBLES CARSO INCARSO SP HIL-ROM HOLDINGS HRC 5/10/2007 HILLENBRAND INC HI SP IDT CORP IDT 11/2/2010 GENIE ENERGY GNE SP IAC/INTERACTIVE IACI 11/5/2007 HSN HSNI SP IAC/INTERACTIVE IACI 11/5/2007 TICKETMASTER TKTM SP IAC/INTERACTIVE IACI 11/5/2007 INTERVAL LEISURE GROUP IILG SP IAC/INTERACTIVE IACI 11/5/2007 TREE.COM TREE SP ITT ITT 1/12/2011