PPG, FINANCIAL MODEL, 2001-2005Profit and loss assumptions2001 2002 2003 2004Sales growth 11% 8% -2% 4%COGS/Sales 61.39%SG&A/Sales 18.38%Depreciation/Gross fixed assets 6.31%Interest rate 6.70%Minority interest as % of PAT 4.32%Growth rate of total dividends 4.13%Tax rate 36.28%Balance sheet assumptionsAssetsCash and short-term investments constantReceivables/Sales 18.28%Inventories/Sales 12.24%Other Current Assets/Sales 3.21%Property, Plant, Equipment, Net/Sales 34.08%Investments and advances constantOther Assets/Sales 7.93%LiabilitiesAccounts Payable/Sales 8.50%Accrued Expense/Sales 7.25%Other Current Liabilities/Sales constantDebt/Assets 32.00%Deferred Taxes growth at sales growthMinority Interest assumed constantOther liabilities, annual growth 12.53%Treasury stock plugPROFIT AND LOSS 2000 2001 2002 2003 2004Sales 8,629 9,578 10,344 10,138 10,543Cost of Goods Sold 5,334 5,880 6,351 6,224 6,472Selling, General, and AdministrativeExpense 1,646 1,761 1,902 1,863 1,938Operating Income Before Depreciation 1,649 1,937 2,092 2,051 2,133Depreciation and Amortization 447 472 522 562 601Interest Expense 193 204 216 222 226Nonoperating Income (Expense) andSpecial Items 8 8 8 8 8Pretax Income 1,017 1,253 1,346 1,258 1,298Income Taxes - Total 369 455 488 456 471Minority Interest 28 20 21 20 20Net Income 620 779 837 782 806Dividend 276 287 299 312 324Accrued 344 491 537 470 482A B C D E F123456789101112131415161718192021222324252627282930313233343536373839404142434445464748ASSETS 2000 2001 2002 2003 2004Cash and Short-Term Investments 111 111 111 111 111Receivables 1,563 1,751 1,891 1,853 1,927Inventories - Total 1,121 1,172 1,266 1,241 1,290Other Current Assets 298 307 332 325 338Total Current Assets 3,093 3,341 3,600 3,530 3,667Property, Plant, and Equipment, Gross 7,089 7,885 8,668 9,159 9,898Depreciation, Depletion, and Amortization(Accumulated) 4,148 4,620 5,142 5,704 6,305Property, Plant, and Equipment, Net 2,941 3,265 3,526 3,455 3,593Investments and Advances 320 320 320 320 320Intangibles 1,700 1,700 1,700 1,700 1,700Other Assets 1,071 1,156 1,248 1,347 1,454TOTAL ASSETS 9,125 9,782 10,393 10,352 10,734LIABILITIES 2000 2001 2002 2003 2004Accounts Payable 764 814 879 861 896Accrued Expense 606 694 750 735 764Other Current Liabilities 12 12 12 12 12Debt 2,971 3,130 3,326 3,313 3,435Deferred Taxes 543 603 651 638 663Minority Interest 128 128 128 128 128Other Liabilities 1,004 1,130 1,271 1,431 1,610EQUITYCommon Stock 484 484 484 484 484Capital Surplus 102 102 102 102 102Retained Earnings 6,019 6,510 7,048 7,518 8,000Less: Treasury Stock 3,508 3,825 4,257 4,869 5,360Total stockholders equity 3,097 3,271 3,377 3,235 3,226TOTAL LIABILITIES AND EQUITY 9,125 9,782 10,393 10,352 10,734FREE CASH FLOW (FCF) 2001 2002 2003 2004Profit after tax 779 837 782 806Add back depreciation 472 522 562 601Change in net working capitalIncrease in operating current assets -248 -258 70 -137Add increase in operating current liabilities 138 121 -33 64Subtract capital expenditures -796 -783 -492 -739Subtract increase in other assets -85 -92 -99 -107Add back after-tax interest 130 138 142 144FCF 390 484 932 633Valuing PPGWACC 7.47%A B C D E F49505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697Long-term free cash flow growth rate 4%Year 2001 2002 2003 2004FCF 390 484 932 633TerminalTotal 390 484 932 633Discounted value 16,405 B114*1.1,undervalued,IF(B112 8% 26.71 43.29 57.79 81.969% 20.14 31.84 41.21 55.2510% 15.03 23.66 30.14 39.2111% 10.93 17.52 22.23 28.5012% 7.58 12.74 16.28 20.8413% 4.78 8.91 11.66 15.1014% 2.41 5.77 7.95 10.62= I F ( B 9 6 B 9 7 , B 1 1 1 , n m f )A B C D E F989910010110210310410510610710810911011111211311411511611711811912012112212312412512612712820054%200510,9656,7312,0162,21864923481,32648121824338486PPG, FINANCIAL MODEL, 2001-2005G H I J12345678910111213141516171819202122232425262728293031323334353637383940414243444546474820051112,0041,3423523,80910,6916,9543,7373201,7001,56911,1352005931794123,5636901281,8124841028,4865,8683,20411,1352005824649-14266-793-115149639G H I J49505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697200563919,167 B114*1.1,undervalued,IF(B112B114*1.1,低估,IF(B112 加权平均资本成本- “ 8% 26.71 43.29 57.79 81.969% 20.14 31.84 41.21 55.2510% 15.03 23.66 30.14 39.2111% 10.93 17.52 22.23 28.5012% 7.58 12.74 16.28 20.8413% 4.78 8.91 11.66 15.1014% 2.41 5.77 7.95 10.62= I F ( B 9 6 B 9 7 , B 1 1 1 , n m f )A B C D E F9910010110210310410510610710810911011111211311411511611711811912012112212312412512612712820054%200510,9656,7312,0162,21864923481,326481218243384862005PPG公司，财务模型，2001-2005G H I J123456789101112131415161718192021222324252627282930313233343536373839404142434445464748491112,0041,3423523,80910,6916,9543,7373201,7001,56911,1352005931794123,5636901281,8124841028,4865,8683,20411,1352005824649-14266-793-115149639G H I J50515253545556575859606162636465666768697071727374757677787980818283848586878889909192939495969798200563919,167 B114*1.1,低估,IF(B112B114*1.1,undervalued,IF(B112B114*1.1,undervalued,IF(B112B114*1.1,低估,IF(B112B114*1.1,低估,IF(B112B114*1.1,undervalued,IF(B112B114*1.1,undervalued,IF(B112B114*1.1,undervalued,IF(B112B114*1.1,undervalued,IF(B112B114/1.1,overvalued,ok)G H I J99100101102103104105106107108109110111112113114115