BAYEREN BRAUREI (UVA-F- )

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Revised: January 2, 1998Copyright (C) 1998 by the Trustees of the University of Virginia Darden School Foundation.

AssumptionsExhibit 1Bayern BrauereiForecast Assumptions

AssumptionsYears(Actual)(Actual)(Proj'd)(Proj'd)

Sales Growth: Eastern Germany312.00%47.20%45.00%30.00%Sales Growth: Western Germany2.50%3.11%3.00%3.00%Operating Margin: East6.20%6.10%7.00%7.00%Operating Margin: West6.20%6.10%7.00%7.00%Capital Expenditures/Sales0.057Depreciation to Gross PPE0.10Dividend Payout0.75Melded Interest Rate0.11Average Tax Rate0.35Cash to Sales0.12Days Sales Outstanding: Eastern Germany90 Western Germany41Allowance for Doubtful Accounts as a % of Accts. Rec.0.02Payables to Sales0.05Inventories to Sales0.14Other Current Assets to Sales0.1Other Current Liabs. to Sales0.11

Exhibit 1Exhibit 1DEUTSCHE BRAUEREIHistorical and Projected Income StatementsFiscal Year Ended December 31

199719981999200020012002(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)

1Sales: Germany62,03262,65364,21966,21668,20370,2492Sales: Ukraine-4,26217,55925,84737,47948,7223Net Sales62,03266,91581,77992,063105,682118,971Operating Expenses:7.87%22.21%12.58%14.79%12.57%5-15%4 Production Costs and Expenses32,25835,36644,27149,82761,39371,6095 Admin. and Selling Expenses12,48113,01416,27418,50518,50018,5006 Depreciation3,6094,3145,8446,0686,7667,4487 Excise duties9,1439,10810,48611,55711,62513,0878 Total Operating Expenses(57,491)(61,802)(76,875)(85,957)(98,284)(110,644)9 Operating Profit4,5415,1134,9046,1067398832710 Allowance for Doubtful Accounts(5)(7)(38)(24)(201)(60)11 Interest Expense(1,185)(1,064)(1,046)(1,304)(1,468)(1,634)12Earnings Before Taxes3,3514,0423,8204,7785,7296,63313Income Taxes(1,132)(1,396)(1,510)(1,864)(2,005)(2,322)14Net Earnings2,2192,6462,3102,9153,7244,312

Dividends on :15Dividends to All Common Shares1,6691,9881,7342,1862,7933,23416Retentions of Earnings5506585777299311,078

Exhibit 1 -contd-DEUTSCHE BRAUEREIHistorical and Projected Balance SheetsCondensed Balance Sheet 1(fiscal year ended December 31; all figures in EUR thousands)198919901991199219931994(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)199719981999200020012002Assets(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)Cash5,3668,1839,81311,04812,68214,277AssetsWCR2,0222,7753,91711,51814,45117,1271,1427,6011Cash5,3668,1839,81311,04812,68214,277FA38,13333,90530,53624,57224,76624,1398%8%2Accounts ReceivableTotal Assets45,52144,86344,26747,13851,89955,54391.358868608.045521632Germany6,9337,1427,2227,5177,6617,89138,219Ukraine04242,0906,1689,24112,014Liabilities41.1%194.0%25.5%18.5% Allowance for Doubtful Accounts(69)(76)(113)(137)(338)(398)Debt19,09417,78018,60518,74722,57725,1443Inventories6,1336,4017,81712,88914,79516,656Equity26,42727,08527,66128,39029,32130,3994 Total Current Assets18,36322,07528,82937,48544,04250,439Total Liabilities45,52144,86546,26647,13751,89855,5435Investments & Other Assets3,1023,1893,4163,5203,5003,5006Gross Property Plant & Equipt.58,43558,43560,68260,68267,63374,4857Accumulated Depreciation(23,404)(27,719)(33,662)(39,631)(46,397)(53,845)Condensed Balance Sheet 28Net Property Plant & Equipt.35,03130,71627,12021,05221,26620,6391989199019911992199319949Total Assets56,49655,98059,36562,05768,80874,578(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)

Liabilities and Stockholders' Equity:NWC4,4017243,7269,4769,27010,03210Bank Borrowings (Short Term)2,98710,23612,00413,08917,86221,372WCR2,0222,7753,91711,51814,45117,12711Accounts Payable3,5783,7554,1034,7925,2845,949Net liquid balance2,379(2,051)(191)(2,042)(5,181)(7,095)12Other Current Liabilities7,3977,3618,99610,12711,62513,08713Total Current Liabilities13,96221,35225,10328,00834,77140,40714Long Term Debt: Bank Borrowings16,1077,5446,6015,6584,7153,77215Shareholders' Equity26,42727,08527,66128,39029,32130,39916Total Liabs. & Stkhldrs' Eq.56,49655,98159,36562,05668,80774,578

Ratio Analysis198919901991199219931994(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)

ROE8.40%9.77%8.35%10.27%12.70%14.18%Profit Margin3.58%3.95%2.82%3.17%3.52%3.62%AT1.101.201.381.481.541.60L2.142.072.152.192.352.45

ROA3.93%4.73%3.89%4.70%5.41%5.78%

EBIT4,5415,1134,9046,1067,3988,327r6.21%5.98%5.62%6.96%6.50%6.50%tc33.78%34.54%39.53%39.00%35.00%35.00%Total Capital45,52144,86344,26747,13851,89955,543

ROIC6.61%7.46%6.70%7.90%9.27%9.75%(ROIC-r*(1-tc))0.02496111840.03543216980.03298988630.03659303680.05038794840.0552110414Leverage0.72251863620.65645191070.67260764250.66034088340.76999729130.82713567228.41%9.79%8.92%10.32%13.15%14.31%ROE8.40%9.77%8.35%10.27%12.70%14.18%Profit Margin3.58%3.95%2.82%3.17%3.52%3.62%Retention ratio24.79%24.87%24.98%0.25005549920.2500218180.25002316441+D/E1.72251863621.65645191071.67260764251.66034088341.76999729131.8271356722a00.2762053760.13011207810.6310742650.6332731154w0.15428015560.07683018740.73901488110.21536574630.20138779810.15428015560.35303556330.86912695920.84644001130.8346609136Sustainable growth (1)10.56%3.34%1.51%1.84%1.98%Sustainable growth (2)2.43%2.09%2.57%3.18%3.55%

Exhibit 2Exhibit 2DEUTSCHE BRAUEREISources and Uses of Funds(fiscal year ending December 31; all figures in EUR thousands)

199719981999200020012002Statement of Cash Flows(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)198919901991199219931994Sources of Funds(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)1Net Income2,6462,3112,9153,7244,3112Increases in Allowance for Doubtful Accts.7382420160Net Income2,6462,3112,9153,7244,3113Depreciation4,3145,8446,0686,7667,448+Depreciation4,3145,8446,0686,7667,4484Increases in Short Term Debt7,2491,7681,0854,7733,510- D WCR7531,1427,6012,9332,6765Increases in Accounts Payable177348690492664+ D Allowance6Increases in Other Current Liabilities(36)1,6351,1311,4981,462Cash Flows OPERATIONS6,2077,0131,3827,5579,0837 Total Sources of Cash14,35711,94411,91317,45417,455

Uses of FundsCash Flows INVESTMENTS(86)(2,475)(104)(6,960)(6,821)8Dividend Payments1,9881,7342,1862,7933,2349Increases in Cash Balance2,8171,6301,2341,6341,595D LT Debt(8,563)(943)(943)(943)(943)10Increases in Accts. Receivable (Germany)20979296144230D ST Debt7,2491,7681,0854,7733,51011Increases in Accts Receivable (Ukraine)4243,6652,0783,0742,772Dividends(1,988)(1,734)(2,186)(2,793)(3,234)12Increases in Inventories2671,4175,0721,9061,861Cash Flows FINANCING(3,302)(909)(2,044)1,037(667)13Increases in Other Assets87227104(20)014Reductions in Long Term Debt8,563943943943943CASH VARIATION2,8193,629(766)1,6341,59515Capital Expenditures02,24706,9806,822Difference Cash2,8171,6301,2341,6341,59516 Total Uses of Cash14,35711,94211,91317,45417,457

Exhibit 3Exhibit 3DEUTSCHE BRAUEREIRatio Analyses of Historical and Projected Financial Statements(fiscal year ended December 31; all figures in EUR thousands)

199719981999200020012002(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)Profitability1Operating Profit Margin (%)7.3%7.6%6.0%6.6%7.0%7.0%2Average Tax Rate (%)33.8%34.5%39.5%39.0%35.0%35.0%3Return on Sales (%)3.6%4.0%2.8%3.2%3.5%3.6%4Return on Equity (%)8.4%9.8%8.4%10.3%12.7%14.2%5Return on Net Assets (%)6.5%7.4%6.9%8.4%9.3%9.7%6Return on Assets (%)3.9%4.7%3.9%4.7%5.4%5.8%

Leverage7Debt/Equity Ratio (%)72.3%65.6%67.3%66.0%77.0%82.7%8Debt/Total Capital (%)41.9%39.6%40.2%39.8%43.5%45.3%9EBIT/Interest (x)3.84.84.74.75.05.1

Asset Utilization10Sales/Assets1.101.201.381.481.541.6011Sales Growth Rate (%)4.0%7.9%22.2%12.6%14.8%12.6%12Assets Growth Rate (%)6.0%-0.9%6.0%4.5%10.9%8.4%13Receivables Growth Rate (%):4.0%9.1%49.5%21.0%23.5%17.8%14Receivables Growth Rate: Germany4.0%3.0%1.1%4.1%1.9%3.0%15Receivables Growth Rate: Ukraine0.0%NMF863.5%50.8%49.8%30.0%16Days in Receivables:40.841.350.554.358.461.117Days in Receivables: Germany40.841.641.041.441.041.018Days in Receivables: UkraineNMF36.385.087.190.090.019Payables to Sales5.8%5.6%5.0%5.2%5.0%5.0%20Inventories to Sales9.9%9.6%9.6%14.0%14.0%14.0%

Liquidity21Current Ratio1.321.031.151.341.271.2522Quick Ratio0.880.730.840.880.840.84

Exhibit 4

Data for Profit Break-even Analysis GraphBreakeven AnalysisVolumeRevenuesVar. CostFixed CostTot. CostFixed costs24,5730002525Rev/Unit138.0350752529VC/Unit91.991001492534BreakevenFC/Contrib533,8221502114253820028182543Change in WC/Unit53.752503523254830041282552VolumeEBIT350483225571Base667,0006,130,496400553725612101% Volume673,6706,437,531450624125663Change6,670307,035500694625714% Change1.00%5.01%5507651257560083552580Operating Leverage =5.0650906025847009764258975010469259480011074259885011778251039001248325107950131872511210001389225117

Exhibit 5Exhibit 5Max Leiter's Analysis of the Return on Investment fromInvestment in Accounts Receivable in UkraineAssumptionsRevenue per HL (EUR)78.49Variable Costs per HL (EUR)52.31Contribution Percentage33%Tax Rate35%

199719981999200020012002(Actual)(Actual)(Actual)(Actual)(Proj'd)(Proj'd)Sales in Eastern Lander (EUR, thousands)0.04,26217,55925,84737,47948,722Change in Sales (EUR, thousands)0.04,26213,2978,28811,63111,243Variable Costs on the Marginal Sales0.0(2,840)(8,862)(5,524)(7,752)(7,493)Contribution on the Marginal Sales0.01,4224,4352,7643,8803,750Taxes on the Marginal Contribution0.0(498)(1,552)(968)(1,358)(1,313)Marginal After-tax Profits (EUR thousands)0.09242,8831,7972,5222,438Variable Costs/Sales0.067%67%67%67%67%Change in Accounts Receivable, Ukraine (EUR thousands)0.04243,6652,0783,0732,772Investment in Accts. Receivable (EUR thousands)0.02832,4431,3852,0481,848Return on Marginal Investment in Receivables0%327%118%130%123%132%