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7/27/2019 Operating Model Build v31
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Step 1
Fractional years per period 0.50 1.00 1.00 1.00 1.00 1.00
x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8COGS 234.4
Gross profit 206.4
SG&A 79.6
EBITDA 126.8
Depreciation 14.0
Amortization 11.6
Stock-based comp 10.8
EBIT 90.4
EBITA 112.8
Interest (income) / expenseCash NA
Revolver interest NA
Revolver undrawn commitment fee NA
Senior credit facility NA
Subordinated note NA
Convertible bond NA
Interest (income) / expense 19.0
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4Provision for tax 28.4
GAAP net income 43.0
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0
Capital expenditures $15.2
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1
Accounts receivable 136.4
Inventory
Deferred tax asset, current 8.8
Other current assets 8.2
Total current assets 310.6
PP&E, gross 44.0
( ) Accumulated depreciation (6.0)
PP&E, net 38.0
Goodwill 61.1
Other intangible assets 37.5
Equity investments
Other assets 14.3
Total assets $461.4
Liabilities & Shareholders' Equity
Accounts payable $20.7
A d 15 4
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Step 2
x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6
COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 11.6 11.6
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 112.4 118.6
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expense
Cash NA
Revolver interest NA
Revolver undrawn commitment fee NASenior credit facility NA
Subordinated note NA
Convertible bond NA
Interest (income) / expense 19.0
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 95.5 100.9 106.5 112.4 118.6
Provision for tax 28.4 38.2 40.3 42.6 45.0 47.4
GAAP net income 43.0 57.3 60.5 63.9 67.4 71.1
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $57.3 $60.5 $63.9 $67.4 $71.1
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%
Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 2.2% 2.1%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
x Balance Sheet Page 2 of 20
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Step 3
x Income Statement
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1
Accounts receivable 136.4
Inventory
Deferred tax asset, current 8.8
Other current assets 8.2
Total current assets 310.6
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)
PP&E, net 38.0 39.2 40.6 41.9 43.4 44.9
Goodwill 61.1 61.1 61.1 61.1 61.1 61.1
Other intangible assets 37.5 25.9 14.3 2.7 Equity investments
Other assets 14.3 14.3 14.3 14.3 14.3 14.3
Total assets $461.4 $140.5 $130.2 $120.0 $118.8 $120.3
Liabilities & Shareholders' Equity
Accounts payable $20.7
Accrued expenses 15.4
Client deposits
Income taxes payable 2.9Deferred revenue 20.0
Other current liabilities 36.2
Current portion of long-term debt
Total current liabilities 95.2
Revolver 15.0
Senior credit facility
Subordinated note 45.5
Convertible bond 190.0
Total debt 250.5
Net deferred tax liability / (asset) (15.4)Other long-term liabilities 17.9 17.9 17.9 17.9 17.9 17.9
Total liabilities 348.2 17.9 17.9 17.9 17.9 17.9
Noncontrolling interests
Preferred stock
Common equity 113.3 181.9 254.3 330.7 416.6 508.5
Total liabilities & shareholders' equity $461.4 $199.8 $272.2 $348.6 $434.5 $526.4
Check (59.305) (142.002) (228.602) (315.736) (406.097)Page 3 of 20
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Step 4
x Income Statement
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1
Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Total current assets 310.6 161.2 169.2 177.7 186.6 195.9
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)
PP&E, net 38.0 39.2 40.6 41.9 43.4 44.9
Goodwill 61.1 61.1 61.1 61.1 61.1 61.1
Other intangible assets 37.5 25.9 14.3 2.7
Equity investments
Other assets 14.3 14.3 14.3 14.3 14.3 14.3
Total assets $461.4 $301.7 $299.5 $297.7 $305.4 $316.2
Liabilities & Shareholders' Equity
Accounts payable $20.7 $21.7 $22.8 $23.9 $25.1 $26.4
Accrued expenses 15.4 16.1 17.0 17.8 18.7 19.6
Client deposits
Income taxes payable 2.9 3.1 3.2 3.4 3.6 3.7
Deferred revenue 20.0 21.0 22.1 23.2 24.3 25.5
Other current liabilities 36.2 38.0 39.9 41.9 44.0 46.2
Current portion of long-term debt
Total current liabilities 95.2 99.9 104.9 110.2 115.7 121.5
Revolver 15.0
Senior credit facility
Subordinated note 45.5
Convertible bond 190.0
Total debt 250.5 Net deferred tax liability / (asset) (15.4)
Other long-term liabilities 17.9 17.9 17.9 17.9 17.9 17.9
Total liabilities 348.2 117.9 122.8 128.1 133.6 139.4
Noncontrolling interests
Preferred stock
Common equity 113.3 181.9 254.3 330.7 416.6 508.5
Total liabilities & shareholders' equity $461.4 $299.7 $377.2 $458.8 $550.2 $647.9
Check 1.930 (77.705) (161.090) (244.849) (331.665)
x Working Capital
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Net Working Capital
Accounts receivable $136.4 $143.3 $150.4 $157.9 $165.8 $174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Non-cash current assets 153.5 161.2 169.2 177.7 186.6 195.9
Accounts payable 20.7 21.7 22.8 23.9 25.1 26.4
Accrued expenses 15 4 16 1 17 0 17 8 18 7 19 6
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Step 5
x Income Statement
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1 $248.6 $328.2 $411.6 $495.3 $582.2
Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Total current assets 310.6 409.7 497.4 589.3 681.9 778.1
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)
PP&E, net 38.0 39.2 40.6 41.9 43.4 44.9
Goodwill 61.1 61.1 61.1 61.1 61.1 61.1Other intangible assets 37.5 25.9 14.3 2.7
Equity investments
Other assets 14.3 14.3 14.3 14.3 14.3 14.3
Total assets $461.4 $550.2 $627.7 $709.3 $800.7 $898.4
Liabilities & Shareholders' Equity
Accounts payable $20.7 $21.7 $22.8 $23.9 $25.1 $26.4
Accrued expenses 15.4 16.1 17.0 17.8 18.7 19.6
Client deposits Income taxes payable 2.9 3.1 3.2 3.4 3.6 3.7
Deferred revenue 20.0 21.0 22.1 23.2 24.3 25.5
Other current liabilities 36.2 38.0 39.9 41.9 44.0 46.2
Current portion of long-term debt
Total current liabilities 95.2 99.9 104.9 110.2 115.7 121.5
Revolver 15.0
Senior credit facility
Subordinated note 45.5
Convertible bond 190.0
Total debt 250.5
Net deferred tax liability / (asset) (15.4)
Other long-term liabilities 17.9 17.9 17.9 17.9 17.9 17.9
Total liabilities 348.2 117.9 122.8 128.1 133.6 139.4
Noncontrolling interests
Preferred stock
Common equity 113.3 181.9 254.3 330.7 416.6 508.5
Total liabilities & shareholders' equity $461.4 $299.7 $377.2 $458.8 $550.2 $647.9
Check 250.500 250.500 250.500 250.500 250.500
x Cash Flow Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Operating Activities
Net income $57.3 $60.5 $63.9 $72.8 $78.1
Depreciation 14.7 15.4 16.2 17.0 17.9
Amortization of intangibles 11.6 11.6 11.6 2.7
Stock-based compensation 11.3 11.9 12.5 13.1 13.8
Equity income in affiliates
Cash dividends from equity investments
Non-cash noncontrolling (minority) interest
Income statement adjustments 37 6 38 9 40 3 32 8 31 7
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Step 6
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
MRY Fiscal Years Ending December 31,($ in millions) 2012 2013 2014 2015 2016 2017
Scheduled Debt Amortization (%)
Senior credit facility
Subordinated note
Debt Triggers
Average interest? No
Fixed Rate / Spread to Senior Preferred Convertible Conversion Cash
Coupon LIBOR Debt? Security? Security? Price Sweep
Revolver 4.25% Yes No No 100.0%
Senior credit facility 4.75% Yes No No 100.0%
Subordinated note 8.25% No No No
Convertible bond 9.50% No No Yes $26.77
Preferred stock 10.25% No Yes No
Page 6 of 20
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Step 7
x Income Statement
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1 $248.6 $328.2 $411.6 $495.3 $582.2
Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Total current assets 310.6 409.7 497.4 589.3 681.9 778.1
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)
PP&E, net 38.0 39.2 40.6 41.9 43.4 44.9Goodwill 61.1 61.1 61.1 61.1 61.1 61.1
Other intangible assets 37.5 25.9 14.3 2.7
Equity investments
Other assets 14.3 14.3 14.3 14.3 14.3 14.3
Total assets $461.4 $550.2 $627.7 $709.3 $800.7 $898.4
Liabilities & Shareholders' Equity
Accounts payable $20.7 $21.7 $22.8 $23.9 $25.1 $26.4
Accrued expenses 15.4 16.1 17.0 17.8 18.7 19.6Client deposits
Income taxes payable 2.9 3.1 3.2 3.4 3.6 3.7
Deferred revenue 20.0 21.0 22.1 23.2 24.3 25.5
Other current liabilities 36.2 38.0 39.9 41.9 44.0 46.2
Current portion of long-term debt
Total current liabilities 95.2 99.9 104.9 110.2 115.7 121.5
Revolver 15.0 15.0 15.0 15.0 15.0 15.0
Senior credit facility
Subordinated note 45.5 45.5 45.5 45.5 45.5 45.5
Convertible bond 190.0 190.0 190.0 190.0 190.0 190.0Total debt 250.5 250.5 250.5 250.5 250.5 250.5
Net deferred tax liability / (asset) (15.4)
Other long-term liabilities 17.9 17.9 17.9 17.9 17.9 17.9
Total liabilities 348.2 368.4 373.3 378.6 384.1 389.9
Noncontrolling interests
Preferred stock
Common equity 113.3 181.9 254.3 330.7 416.6 508.5
Total liabilities & shareholders' equity $461.4 $550.2 $627.7 $709.3 $800.7 $898.4
Check
x Cash Flow Statement
x Working Capital
x Debt Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Debt Schedule
Revolver
Beginning balance $15.0 $15.0 $15.0 $15.0 $15.0
( ) R l d d
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Step 8
x Income Statement
x Balance Sheet
x Cash Flow Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Operating Activities
Net income $57.3 $60.5 $63.9 $72.8 $78.1
Depreciation 14.7 15.4 16.2 17.0 17.9
Amortization of intangibles 11.6 11.6 11.6 2.7
Stock-based compensation 11.3 11.9 12.5 13.1 13.8
Equity income in affiliates
Cash dividends from equity investments
Non-cash noncontrolling (minority) interest
Income statement adjustments 37.6 38.9 40.3 32.8 31.7(Increase) / decrease in working capital (2.9) (3.1) (3.2) (3.4) (3.5)
Increase / (decrease) in net DTL 15.4
(Increase) / decrease in other assets
Increase / (decrease) in other liabilities
Balance sheet adjustments 12.5 (3.1) (3.2) (3.4) (3.5)
Cash flow from operating activities $107.4 $96.4 $101.0 $102.2 $106.2
Investing Activities
Cash flow from investing activities ($16.0) ($16.8) ($17.6) ($18.5) ($19.4)
Financing Activities
Revolver ($15.0)
Senior credit facility
Subordinated note
Convertible bond
Preferred stock
Cash flow from financing activities ($15.0)
Change in cash $76.5 $79.6 $83.4 $83.8 $86.8
x Working Capital
x Debt Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Beginning cash balance $157.1 $233.6 $313.2 $396.6 $480.3
( ) Minimum cash balance (100.0) (100.0) (100.0) (100.0) (100.0)Excess cash / (cash deficit) 57.1 133.6 213.2 296.6 380.3
( + ) Cash flow available for debt service 91.5 79.6 83.4 83.8 86.8
Total cash available for debt service 148.6 213.2 296.6 380.3 467.2
Senior credit facility
Subordinated note
Convertible bond
( ) Scheduled debt repayment
Cash available for sweep / (revolver draw-down) $148.6 $213.2 $296.6 $380.3 $467.2
Optional debt repaymentRevolver ($15.0)
Senior credit facility
Subordinated note
Total optional debt repayment ($15.0)
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x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6
EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 2.7
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 121.3 130.2
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expenseCash NA (0.4) (0.5) (0.7) (0.9) (1.1)
Revolver interest NA 1.2
Revolver undrawn commitment fee NA 0.4 0.5 0.5 0.5 0.5
Senior credit facility NA
Subordinated note NA 3.8 3.8 3.8 3.8 3.8
Convertible bond NA 18.1 18.1 18.1 18.1 18.1
Interest (income) / expense 19.0 23.0 21.8 21.6 21.4 21.2
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 72.5 79.1 84.9 99.9 108.9Provision for tax 28.4 29.0 31.6 34.0 40.0 43.6
GAAP net income 43.0 43.5 47.5 50.9 59.9 65.4
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $43.5 $47.5 $50.9 $59.9 $65.4
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%
Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 0.5%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
MRY Fiscal Years Ending December 31,($ in millions) 2012 2013 2014 2015 2016 2017
Beginning cash balance $157.1 $219.7 $286.3 $356.8 $427.7
( ) Minimum cash balance (100.0) (100.0) (100.0) (100.0) (100.0)
h / ( h d f )
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x Income Statement
x Balance Sheet
x Cash Flow Statement
MRY sca ears n ng ecem er ,($ in millions) 2012 2013 2014 2015 2016 2017
Operating Activities
Net income $43.5 $47.0 $49.9 $58.3 $63.8
Depreciation 14.7 15.4 16.2 17.0 17.9
Amortization of intangibles 11.6 11.6 11.6 2.7
Stock-based compensation 11.3 11.9 12.5 13.1 13.8
Equity income in affiliates
Cash dividends from equity investments
Non-cash noncontrolling (minority) interest PIK accrual Convertible bond 9.0 9.5 9.9
PIK accrual Preferred stock
Income statement adjustments 46.7 48.4 50.2 32.8 31.7
(Increase) / decrease in working capital (2.9) (3.1) (3.2) (3.4) (3.5)
Increase / (decrease) in net DTL 15.4
(Increase) / decrease in other assets
Increase / (decrease) in other liabilities
Balance sheet adjustments 12.5 (3.1) (3.2) (3.4) (3.5)
Cash flow from operating activities $102.6 $92.3 $96.9 $87.8 $91.9
Investing Activities
Cash flow from investing activities ($16.0) ($16.8) ($17.6) ($18.5) ($19.4)
Financing Activities
Revolver ($15.0)
Senior credit facility
Subordinated note
Convertible bond
Preferred stock Cash flow from financing activities ($15.0)
Change in cash $71.7 $75.5 $79.3 $69.3 $72.5
x Working Capital
x Debt Schedule
MRY F scal Years End ng December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Beginning cash balance $157.1 $228.8 $304.3 $383.6 $453.0
( ) Minimum cash balance (100.0) (100.0) (100.0) (100.0) (100.0)
Excess cash / (cash deficit) 57.1 128.8 204.3 283.6 353.0
( + ) Cash flow available for debt service 86.7 75.5 79.3 69.3 72.5
Total cash available for debt service 143.8 204.3 283.6 353.0 425.4
Senior credit facility
Subordinated note
Convertible bond
( ) Scheduled debt repayment
Cash available for sweep / (revolver draw-down) $143.8 $204.3 $283.6 $353.0 $425.4
Optional debt repayment
Revolver ($15.0)
Senior credit facility
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x Income Statement
MRY F scal Years End ng December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6
COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6
EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 2.7
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 121.3 130.2
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expense
Cash NA (0.4) (0.6) (0.8) (1.0) (1.1)Revolver interest NA 1.2
Revolver undrawn commitment fee NA 0.4 0.5 0.5 0.5 0.5
Senior credit facility NA
Subordinated note NA 3.8 3.8 3.8 3.8 3.8
Convertible bond NA 18.1 18.9 19.8 20.7 20.7
Interest (income) / expense 19.0 23.0 22.6 23.3 24.0 23.9
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 72.5 78.3 83.2 97.2 106.3
Provision for tax 28.4 29.0 31.3 33.3 38.9 42.5
GAAP net income 43.0 43.5 47.0 49.9 58.3 63.8
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $43.5 $47.0 $49.9 $58.3 $63.8
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%
Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 0.5%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
x Balance Sheet
MRY sca ears n ng ecem er ,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1 $228.8 $304.3 $383.6 $453.0 $525.4
Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Total current assets 310.6 389.9 473.5 561.3 639.5 721.3
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)
PP&E net 38 0 39 2 40 6 41 9 43 4 44 9
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Step 12
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investments
x Depreciation Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Capital expenditures $16.0 $16.8 $17.6 $18.5 $19.4
Book Depreciation (straight-line)
Useful life (yrs) 10.0Midpoint convention Yes
2013 $16.0 $0.8 $1.6 $1.6 $1.6 $1.6
2014 $16.8 0.8 1.7 1.7 1.7
2015 $17.6 0.9 1.8 1.8
2016 $18.5 0.9 1.8
2017 $19.4 1.0
Book depreciation of capex 0.8 2.4 4.2 6.0 7.8
( + ) Book depreciation of existing fixed assets 13.9 13.0 12.1 11.1 10.0
Total book depreciation expense $14.7 $15.4 $16.2 $17.0 $17.9
Modified Accelerated Cost Recovery System (MACRS) Depreciation
MACRS Property Class
Year 3 5 7 10 15 20
1 33.33% 20.00% 14.29% 10.00% 5.00% 3.75%
2 44.45% 32.00% 24.49% 18.00% 9.50% 7.22%
3 14.81% 19.20% 17.49% 14.40% 8.55% 6.68%
4 7.41% 11.52% 12.49% 11.52% 7.70% 6.18%
5 11.52% 8.93% 9.22% 6.93% 5.71%6 5.76% 8.92% 7.37% 6.23% 5.29%
7 8.93% 6.55% 5.90% 4.89%
8 4.46% 6.55% 5.90% 4.52%
9 6.56% 5.91% 4.46%
10 6.55% 5.90% 4.46%
11 3.28% 5.91% 4.46%
12 5.90% 4.46%
13 5.91% 4.46%
14 5.90% 4.46%
15 5.91% 4.46%
16 2.95% 4.46%
17 4.46%
18 4.46%
19 4.46%
20 4.46%
21 2.23%
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Source: IRS Publication 946, Table A-1.
Property class (yrs) 10.0
2013 $16.0 $1.6 $2.9 $2.3 $1.8 $1.5
2014 $16.8 1.7 3.0 2.4 1.9
2015 $17.6 1.8 3.2 2.5
2016 $18.5 1.8 3.3
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Step 13
x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6
COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 2.7
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 121.3 130.2
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expense
Cash NA (0.4) (0.6) (0.8) (1.0) (1.1)
Revolver interest NA 1.2
Revolver undrawn commitment fee NA 0.4 0.5 0.5 0.5 0.5Senior credit facility NA
Subordinated note NA 3.8 3.8 3.8 3.8 3.8
Convertible bond NA 18.1 18.9 19.8 20.7 20.7
Interest (income) / expense 19.0 23.0 22.6 23.3 24.0 23.9
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 72.5 78.3 83.2 97.2 106.3
Provision for tax 28.4 29.0 31.3 33.3 38.9 42.5
GAAP net income 43.0 43.5 47.0 49.9 58.3 63.8
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $43.5 $47.0 $49.9 $58.3 $63.8
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 0.5%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investments
x Depreciation Schedule
x Tax Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Federal tax rate 38.1% 38.1% 38.1% 38.1% 38.1%
State and local tax rate 3.0% 3.0% 3.0% 3.0% 3.0%
Blended tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
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Step 14
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investments
x Depreciation Schedule
x Tax Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Federal tax rate 38.1% 38.1% 38.1% 38.1% 38.1%
State and local tax rate 3.0% 3.0% 3.0% 3.0% 3.0%
Blended tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
Cash Taxes & Net DTL
EBITDA $133.1 $139.8 $146.8 $154.1 $161.8
( ) Tax depreciation (14.7) (15.4) (16.2) (17.0) (17.9)
( ) Tax amortization of intangible assets (11.6) (11.6) (11.6) (2.7)
( ) Tax amortization of tax-deductible goodwill
( ) Stock-based compensation (11.3) (11.9) (12.5) (13.1) (13.8)
( + ) Interest income / (expense) (23.0) (22.6) (23.3) (24.0) (23.9)
( + ) Distributed equity income in affiliates
( + ) Other income / (expense)
Total taxable income 72.5 78.3 83.2 97.2 106.3
( ) NOL used (64.2)
State and local taxable income 8.3 78.3 83.2 97.2 106.3
( ) State and local cash taxes (0.2) (2.3) (2.5) (2.9) (3.2)
Federal taxable income $8.0 $75.9 $80.7 $94.3 $103.1
Acquired NOL Subject to Section 382
Annual Sec. 382 NOL deduction limit
Remaining NOL life (yrs)
Acquired NOL subject to Sec. 382
Beginning balance
( ) NOL used
( ) NOL expired
Ending balance
Unused limitation carryforward
Beginning balance
( + ) Carryforward created
( ) Carryforward used Ending balance
Unencumbered NOL
Remaining NOL life (yrs) 15.00 14.00 13.00 12.00 11.00 10.00
Beginning balance $64.2
( + ) NOL created
( ) NOL used (64.2)
( ) NOL expired
Ending balance $64.2
DTA attributable to NOL
Beginning balance $25 7
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Step 15
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedulex Equity Investments
x Depreciation Schedule
x Tax Schedule
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Federal tax rate 38.1% 38.1% 38.1% 38.1% 38.1%
State and local tax rate 3.0% 3.0% 3.0% 3.0% 3.0%
Blended tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
Cash Taxes & Net DTL
EBITDA $133.1 $139.8 $146.8 $154.1 $161.8
( ) Tax depreciation (14.7) (15.4) (16.2) (17.0) (17.9)
( ) Tax amortization of intangible assets (11.6) (11.6) (11.6) (2.7)
( ) Tax amortization of tax-deductible goodwill
( ) Stock-based compensation (11.3) (11.9) (12.5) (13.1) (13.8)
( + ) Interest income / (expense) (23.0) (22.6) (23.3) (24.0) (23.9)
( + ) Distributed equity income in affiliates ( + ) Other income / (expense)
Total taxable income 72.5 78.3 83.2 97.2 106.3
( ) NOL used (64.2)
State and local taxable income 8.3 78.3 83.2 97.2 106.3
( ) State and local cash taxes (0.2) (2.3) (2.5) (2.9) (3.2)
Federal taxable income $8.0 $75.9 $80.7 $94.3 $103.1
Federal cash taxes $3.1 $29.0 $30.8 $36.0 $39.3
( + ) State and local cash taxes 0.2 2.3 2.5 2.9 3.2
Total cash taxes payable 3.3 31.3 33.3 38.9 42.5
Acquired NOL Subject to Section 382
Annual Sec. 382 NOL deduction limit
Remaining NOL life (yrs)
Acquired NOL subject to Sec. 382
Beginning balance
( ) NOL used
( ) NOL expired
Ending balance
Unused limitation carryforward
Beginning balance
( + ) Carryforward created
( ) Carryforward used
Ending balance
Unencumbered NOL
Remaining NOL life (yrs) 15.00 14.00 13.00 12.00 11.00 10.00
Beginning balance $64.2
( + ) NOL created
( ) NOL used (64 2)
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x Income Statement
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1 $239.1 $314.6 $393.9 $463.3 $535.8
Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Total current assets 310.6 400.2 483.8 571.6 649.9 731.7
PP&E, gross 44.0 60.0 76.7 94.3 112.8 132.2
( ) Accumulated depreciation (6.0) (20.7) (36.2) (52.4) (69.4) (87.3)PP&E, net 38.0 39.2 40.6 41.9 43.4 44.9
Goodwill 61.1 61.1 61.1 61.1 61.1 61.1
Other intangible assets 37.5 25.9 14.3 2.7
Equity investments
Other assets 14.3 14.3 14.3 14.3 14.3 14.3
Total assets $461.4 $540.7 $614.1 $691.6 $768.6 $852.0
Liabilities & Shareholders' Equity
Accounts payable $20.7 $21.7 $22.8 $23.9 $25.1 $26.4Accrued expenses 15.4 16.1 17.0 17.8 18.7 19.6
Client deposits
Income taxes payable 2.9 3.1 3.2 3.4 3.6 3.7
Deferred revenue 20.0 21.0 22.1 23.2 24.3 25.5
Other current liabilities 36.2 38.0 39.9 41.9 44.0 46.2
Current portion of long-term debt
Total current liabilities 95.2 99.9 104.9 110.2 115.7 121.5
Revolver 15.0
Senior credit facility
Subordinated note 45.5 45.5 45.5 45.5 45.5 45.5Convertible bond 190.0 199.0 208.5 218.4 218.4 218.4
Total debt 250.5 244.5 254.0 263.9 263.9 263.9
Net deferred tax liability / (asset) (15.4) 10.3 10.3 10.3 10.3 10.3
Other long-term liabilities 17.9 17.9 17.9 17.9 17.9 17.9
Total liabilities 348.2 372.7 387.1 402.3 407.8 413.5
Noncontrolling interests
Preferred stock
Common equity 113.3 168.1 227.0 289.4 360.9 438.5
Total liabilities & shareholders' equity $461.4 $540.7 $614.1 $691.6 $768.6 $852.0
Check
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investments
x Depreciation Schedulex Tax Schedule
MRY Fiscal Years Ending December 31,
Step 17
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Step 17
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investmentsx Depreciation Schedule
x Tax Schedule
x Shares Outstanding
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Stock Options
Current share price $9.16
Options Outstanding Options Exercisable
Number of Average Number of Average Treasury
Options Strike Options Strike Method
Tranche 1 0.402 $9.13 0.209 $9.04 0.003
Tranche 2 0.120 9.93 0.059 10.03
Tranche 3 0.466 11.60 0.221 11.53
Tranche 4 0.300 12.64 0.300 12.69
Tranche 5 0.520 19.48 0.269 19.54 Tranche 6 0.422 27.03 0.211 27.06
Tranche 7 0.375 45.78 0.187 45.75
Tranche 8
Tranche 9
Tranche 10
Total Treasury Method shares 0.003
Convertible Securities
Face value
Convertible bond $190.0 $199.0 $208.5 $218.4 $218.4 $218.4Preferred stock
Conversion price
Convertible bond $26.77 $26.77 $26.77 $26.77 $26.77 $26.77
Preferred stock
Convertible shares
Convertible bond 7.097 7.435 7.788 8.158 8.158 8.158
Preferred stock
EPS if converted
Convertible bond $1.27 $1.27 $1.35 $1.42 $1.63 $1.75
Preferred stock $1.22 $1.23 $1.33 $1.41 $1.65 $1.81
Basic EPS $1.22 $1.23 $1.33 $1.41 $1.65 $1.81
Is conversion dilutive?
Convertible bond No No No No Yes Yes
Preferred stock No No No No No No
Fully Diluted Shares Outstanding
Basic shares outstanding (BSO) 35.340 35.340 35.340 35.340 35.340 35.340
( + ) In-the-money Treasury Method option shares 0.003 0.003 0.003 0.003 0.003 0.003
( + ) Shares from Convertible bond 8 158 8 158
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x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6
COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6
EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 2.7
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 121.3 130.2
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expense
Cash NA (0.4) (0.6) (0.8) (1.0) (1.2)
Revolver interest NA 1.2
Revolver undrawn commitment fee NA 0.4 0.5 0.5 0.5 0.5
Senior credit facility NA
Subordinated note NA 3.8 3.8 3.8 3.8 3.8
Convertible bond NA 18.1 18.9 19.8 20.7 20.7
Interest (income) / expense 19.0 23.0 22.6 23.3 24.0 23.8
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 72.5 78.3 83.2 97.3 106.3
Provision for tax 28.4 29.0 31.3 33.3 38.9 42.5
GAAP net income 43.0 43.5 47.0 49.9 58.4 63.8
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $43.5 $47.0 $49.9 $58.4 $63.8
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Common dividend per share $0.01 $0.01 $0.01 $0.01 $0.01 $0.01
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%
Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 0.5%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Tax rate 39.8% 40.0% 40.0% 40.0% 40.0% 40.0%
x Balance Sheet
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Assets
Cash and equivalents $157.1 $238.7 $313.9 $392.9 $461.9 $534.0Accounts receivable 136.4 143.3 150.4 157.9 165.8 174.1
Inventory
Deferred tax asset, current 8.8 9.3 9.7 10.2 10.7 11.3
Other current assets 8.2 8.6 9.1 9.5 10.0 10.5
Step 19
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Step 19
x Income Statement
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Total revenue $440.8 $462.8 $486.0 $510.3 $535.8 $562.6
COGS 234.4 246.1 258.4 271.3 284.9 299.2
Gross profit 206.4 216.7 227.6 238.9 250.9 263.4
SG&A 79.6 83.6 87.8 92.1 96.8 101.6EBITDA 126.8 133.1 139.8 146.8 154.1 161.8
Depreciation 14.0 14.7 15.4 16.2 17.0 17.9
Amortization 11.6 11.6 11.6 11.6 2.7
Stock-based comp 10.8 11.3 11.9 12.5 13.1 13.8
EBIT 90.4 95.5 100.9 106.5 121.3 130.2
EBITA 112.8 118.4 124.4 130.6 137.1 144.0
Interest (income) / expense
Cash NA (0.4) (0.6) (0.8) (1.0) (1.2)
Revolver interest NA 1.2
Revolver undrawn commitment fee NA 0.4 0.5 0.5 0.5 0.5Senior credit facility NA
Subordinated note NA 3.8 3.8 3.8 3.8 3.8
Convertible bond NA 18.1 18.9 19.8 20.7 20.7
Interest (income) / expense 19.0 23.0 22.6 23.3 24.0 23.8
Equity income in affiliates
Other (income) / expense
Income before taxes 71.4 72.5 78.3 83.2 97.3 106.3
Provision for tax 28.4 29.0 31.3 33.3 38.9 42.5
GAAP net income 43.0 43.5 47.0 49.9 58.4 63.8
Net income attributable to noncontrolling interests
Preferred dividends
GAAP net income available to common $43.0 $43.5 $47.0 $49.9 $58.4 $63.8
GAAP to cash reconciliation
Amortization $7.0 $7.0 $7.0 $7.0 $1.6
Stock-based comp 6.5 6.8 7.1 7.5 7.9 8.3
One-time charges
Cash net income available to common $56.5 $57.2 $61.1 $64.4 $67.9 $72.1
GAAP diluted EPS $1.22 $1.23 $1.33 $1.41 $1.34 $1.47
Cash diluted EPS $1.60 $1.62 $1.73 $1.82 $1.56 $1.66
Capital expenditures $15.2 $16.0 $16.8 $17.6 $18.5 $19.4
Common dividend per share $0.01 $0.01 $0.01 $0.01 $0.01 $0.01
Key Performance Metrics & Drivers
Sales growth 4.9% 5.0% 5.0% 5.0% 5.0% 5.0%
GAAP earnings growth NA 1.1% 8.0% 6.3% 16.9% 9.3%
Cash earnings growth NA 1.3% 6.7% 5.4% 5.4% 6.2%
COGS / sales 53.2% 53.2% 53.2% 53.2% 53.2% 53.2%
SG&A / sales 18.1% 18.1% 18.1% 18.1% 18.1% 18.1%
Depreciation / sales 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
Amortization / sales 2.6% 2.5% 2.4% 2.3% 0.5%
Stock-based comp / sales 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Capex / sales 3.4% 3.4% 3.4% 3.4% 3.4% 3.4%
Gross margin 46.8% 46.8% 46.8% 46.8% 46.8% 46.8%
EBITDA margin 28.8% 28.8% 28.8% 28.8% 28.8% 28.8%
EBIT margin 20.5% 20.6% 20.8% 20.9% 22.6% 23.1%
EBITA margin 25.6% 25.6% 25.6% 25.6% 25.6% 25.6%
GAAP net margin 9.8% 9.4% 9.7% 9.8% 10.9% 11.3%
Cash net margin 12.8% 12.4% 12.6% 12.6% 12.7% 12.8%
% % % % % %
Step 20
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x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Debt Schedule
x Equity Investmentsx Depreciation Schedule
x Tax Schedule
x Shares Outstanding
x Summary Credit Metrics
MRY Fiscal Years Ending December 31,
($ in millions) 2012 2013 2014 2015 2016 2017
Capitalization
Total debt 244.5 254.0 263.9 263.9 263.9
Net debt 5.8 (59.9) (129.0) (198.0) (270.1)
Senior debt
Preferred stock
Total capitalization 412.2 480.2 552.2 623.3 700.6
Interest Expense
Senior interest expense $1.6 $0.5 $0.5 $0.5 $0.5
Cash interest expense 14.4 13.7 14.2 25.0 25.0Total interest expense 23.4 23.2 24.1 25.0 25.0
Fixed charges (total interest & preferred dividends) 23.4 23.2 24.1 25.0 25.0
Coverage
EBITDA $133.1 $139.8 $146.8 $154.1 $161.8
EBITDA / senior interest expense 82.0x 279.6x 293.6x 308.3x 323.7x
EBITDA / cash interest expense 9.2x 10.2x 10.4x 6.2x 6.5x
EBITDA / total interest expense 5.7x 6.0x 6.1x 6.2x 6.5x
EBITDA / fixed charges 5.7x 6.0x 6.1x 6.2x 6.5x
EBITDA capex $117.2 $123.0 $129.2 $135.7 $142.4
(EBITDA capex) / senior interest expense 72.2x 246.1x 258.4x 271.3x 284.9x
(EBITDA capex) / cash interest expense 8.1x 9.0x 9.1x 5.4x 5.7x
(EBITDA capex) / total interest expense 5.0x 5.3x 5.4x 5.4x 5.7x
(EBITDA capex) / fixed charges 5.0x 5.3x 5.4x 5.4x 5.7x
EBITDA capex WC $114.3 $120.0 $126.0 $132.3 $138.9
(EBITDA capex WC) / senior interest expense 70.4x 240.0x 252.0x 264.5x 277.8x
(EBITDA capex WC) / cash interest expense 7.9x 8.8x 8.9x 5.3x 5.6x
(EBITDA capex WC) / total interest expense 4.9x 5.2x 5.2x 5.3x 5.6x
(EBITDA capex WC) / fixed charges 4.9x 5.2x 5.2x 5.3x 5.6x
Leverage
Senior debt / total capitalization
Net debt / total capitalization 1.41% NM NM NM NM
Senior debt / EBITDA
Total debt / EBITDA 1.84x 1.82x 1.80x 1.71x 1.63x
Net debt / EBITDA 0.04x NM NM NM NM
Net debt + preferred / EBITDA 0.04x NM NM NM NMPage 20 of 20