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C O M P L E T E V A L U A T I O N

January 2011

[Company XYZ]

New York - London – Miami - Madrid

This document is an extract of the full report

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INDEX

Page

1. Aim of the report and Executive Summary 4

2. Financial Hypothesis 6

3. Valuation Methodology 14

4. Trading Valuation 16

5. Private Transactions Valuation 19

6. DCF Valuation 22

7. Conclusion: Valuation Range 25

Enclosures

I. e-Valuation Company Presentation 28

II. Financial Forecasts 29

III. Information Provided by Company XYZ 33

IV. Difference between Value and Price 34

V. Glossary 35

VI. e-Valuation’s References 36

VII. Contact Details 37

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2. Financial Hypothesis

XYZ is a catholic school founded in 1990 and specialized in preschool, primary and secondary education. Most

of its clients are located in the city of Panama in the Republic of Panama and belong to the middle-upper and

upper social class.

XYZ’s business model belongs to the retail sector. According to XYZ’s knowledge and experience, it is a sector

with low entry barriers that has experienced slight positive trends in the last years.

As stated by the Client, XYZ counts with strong brand awareness within its market segment and the company is

not very sensitive to economic cycles.

Introduction – Company Description

XYZ

Note: Information provided by Company XYZ. 6

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2. Financial Hypothesis

Earnings before interest, taxes, depreciation and amortization (EBITDA) is one of the most significant

operating magnitudes. It is defined as the result obtained when subtracting from sales the sum of

direct and indirect costs (excluding amortizations, financial and extraordinary expenses and taxes).

XYZ’s EBITDA slightly falls in 2009, but it increases in the following years, reaching the levels of 2008.

EBITDA’s margin over sales follows a similar trend, going from 23.3% in 2008 to 18.8% in 2013.

e-Valora has based its analysis on the estimates provided by XYZ in order to calculate the future fixed

assets’ amortization. Between 2008 and 2012 included, the amortization increases a 35.2%.

For the estimated period, XYZ’s Earnings before interest and taxes (EBIT) experience a similar

evolution to the one of its EBITDA (9.2% of CAGR3), since both magnitudes decrease in 2009, and go

increase in the following years in spite of rising depreciation and amortization. Consequently, EBIT’s

Margin over sales goes from 16.2% in 2008 to 11.6% in 2009, and then rises up to 12.6% in 2013.

242,033

200,214

238,482249,351

259,344270,771

258,204

0

50,000

100,000

150,000

200,000

250,000

300,000

2007 2008 2009e 2010e 2011e 2012e 2013e

0%

2%

4%

6%

8%

10%

12%

Amortization % Sales

Main EBITDA1 and EBIT2 Hypothesis

Note 1: EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization.

Note 2: EBIT = Earnings Before Interest and Taxes.

Note 3: CAGR = Compound Annual Growth Rate

Amortization Trend

EBITDA and EBIT Trend

509,985

657,948604,175

634,649

721,283776,433 779,037

267,952

457,734

365,693 385,298

461,940505,662

520,833

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2007 2008 2009e 2010e 2011e 2012e 2013e

0%

5%

10%

15%

20%

25%

EBITDA EBIT EBITDA Margin EBIT Margin

EBITDA & EBIT

CAGR (2009 – 2013)

EBITDA

6.6%

EBIT

9.2%7

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3. Valuation Methodology

In order to carry out XYZ’s valuation, e-Valuation has used contrasted, generally accepted valuation

methodologies: the Discounted Cash Flows methodology (DCF), the Multiples of Trading Comparable

Companies methodology and the Multiples of Private Transactions methodology. The application of each of

these methodologies, results in a specific valuation range for XYZ. In order to establish an estimated valuation

range for the company, e-Valuation calculates a weighted average of the results of the different

methodologies, where the different weights are estimated using its own criteria and experience. We believe

that the use of all of these methodologies improves the reliability of the valuation obtained given that they

are complementary. Furthermore, it allows us to contrast the results of one and other (including the basic

assumptions made).

In the case of the DCF methodology, the assumptions that are considered are based on e-Valuation’s

estimates. Such information allows a qualitative and quantitative analysis of the current and expected future

situation of XYZ.

If the strategy carried out by the Company in the future is different from the one that has been considered

according to the information provided by the Client, or if such information differs from reality, our view about

the value of XYZ would vary accordingly.

Each of the methodologies mentioned take into account the information of XYZ in a different way, providing a

complementary view of the company’s value.

Introduction

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Company XYZ – COMPLETE VALUATIONJANUARY 2011Str

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7. Conclusion: Valuation Range

Conclusion: Final Valuation Range

Taking into account the results obtained using the different methodologies described, and considering that our reference

methodology is the DCF (with a weight of 80%, compared to 10% for both the multiples of Trading Comparable Companies

methodology and the multiples of Private Transactions methodology), we obtain an average value, to which we apply a

reliability range of +/- 10%.

Taking into account such assumptions, we conclude that the final valuation range of XYZ is the following: between

3,036,332 euros and 3,711,072 euros. Considering the adjustment that corresponds due to the ownership of property

(ies), the valuation of the company range rises up to 7,381,838 euros and 8,056,579 euros.

To calculate the market value of XYZ’s shares (Equity Value), the company’s net debt (it shows a company's overall debt

situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets) at the

moment of the valuation has to be subtracted from the enterprise value previously calculated.

Based on the historical data provided by the company, and considering the company’s net debt as of December of 2008

(1,669,850 Euros), the valuation range of the its Equity would be of between 1,366,482 Euros and 2,041,223 Euros. If

the company’s property is considered at its market value, such range would increase to between 5,711,989 Euros and

6,386,729 Euros.

2,914

4,117

3,131

3,561

4,784

3,639

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

DCF Transactions Comparables

Thousand euros

VALUE RANGE

25

Market Equity Value

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e-Valuation Financial Services Northern Europe One Canada Square, 29th Floor, Canary Wharf London E14 5DY United Kingdom

e-Valuation Financial Services Southern Europe c/ José Ortega y Gasset, 42 Madrid, Madrid 28006 Spain

28

e-Valora offers financial consulting services to the private as well as to the public sector, and is specialized in

company valuations. Among other services provided, we must highlight advisory services towards mergers and

acquisitions, the elaboration of economic and financial studies, business and viability plans, and financial and

business consulting services.

Since its foundation in November of 2000 by a team of experts coming from international investment banks, e-

Valora has carried out more than 1,000 valuations of Spanish and foreign companies, from companies with less than

1 million Euros of turnover to companies with more than 500 million Euros of turnover, from start-ups to companies

with more than 80 years of history, including services and industrial companies.

At the end of 2008, e-Valora increased its professional team with members that have a wide experience in

investment banking, coming from entities such as Bank of America or Rothschild, that have worked in projects

belonging to every economic sector.

e-Valora has got ISO 9001 Certification in Business Valuation Services, Corporate Finance Advisory Services and

Elaboration of Valuation Multiples.

Its offices locations and contact details are the following :

e-Valuation Financial Services North America14 Wall Street, 20th FloorNew York City, New York 10005 United States of America

e-Valuation Financial Services Central and South AmericaBrickell Avenue, 11th FloorMiami, 33131

United States of America

Appendix I. e-Valora Company Presentation

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Appendix III. Information Provided by Company XYZ

Information provided to e-Valora by XYZ

PROFIT AND LOSS ACCOUNT FINANCIAL FORECASTS

Forecasts according to e-Valora

Figures in Balboas 2003 2004 2005 2006 2007

Revenues 1.512.514 1.724.870 1.885.247 2.241.237 2.303.914

Revenues in terms of tuitions and monthly fee 1.494.232 1.715.569 1.882.204 2.233.825 2.296.749

Other revenues 18.282 9.301 3.043 7.412 7.165

Estimated growth 14,0% 9,3% 18,9% 2,8%

Operating Expenses 1.092.308 1.246.530 1.392.984 1.642.015 1.793.929

Salaries and Social Charges 676.354 768.036 843.781 1.058.482 1.036.826

% Growth 13,6% 9,9% 25,4% -2,0%

% over sales 44,7% 44,5% 44,8% 47,2% 45,0%

Wages and salaries 598.909 679.494 746.195 943.045 958.423

% Growth 13,5% 9,8% 26,4% 1,6%

Social charges 77.445 88.542 97.586 115.437 78.403

% Growth 14,3% 10,2% 18,3% -32,1%

% sobre sueldos y salarios 12,9% 13,0% 13,1% 12,2% 8,2%

Average number of employee level 1 70 79 80 85 90

% Growth 12,9% 1,3% 6,3% 5,9%

Real average salary 8.556 8.601 9.327 11.095 10.649

% Growth 0,5% 8,4% 18,9% -4,0%

Productivity ratio 21.607 21.834 23.566 26.367 25.599

Other Operating Expenses 415.954 478.494 549.203 583.533 757.103

% Growth 15,0% 14,8% 6,3% 29,7%

% over sales 27,5% 27,7% 29,1% 26,0% 32,9%

Leasing and canon 7.989 3.193 4.355 3.559 1.778

% Growth -60,0% 36,4% -18,3% -50,0%

% over sales 0,5% 0,2% 0,2% 0,2% 0,1%

Recovering and maintenance 68.699 63.118 81.157 71.391 96.797

% Growth -8,1% 28,6% -12,0% 35,6%

% over sales 4,5% 3,7% 4,3% 3,2% 4,2%

Insurances 25.543 34.229 37.922 41.554 42.381

% Growth 34,0% 10,8% 9,6% 2,0%

% over sales 1,7% 2,0% 2,0% 1,9% 1,8%

Electricity, water, telephone 47.524 65.650 79.165 82.428 103.527

% Growth 38,1% 20,6% 4,1% 25,6%

% over sales 3,1% 3,8% 4,2% 3,7% 4,5%

Representation 21.434 21.697 23.195 23.712 35.472

% Growth 1,2% 6,9% 2,2% 49,6%

% over sales 1,4% 1,3% 1,2% 1,1% 1,5%

Fees 77.001 51.995 47.769 39.464 61.385

% Growth -32,5% -8,1% -17,4% 55,5%

% over sales 5,1% 3,0% 2,5% 1,8% 2,7%

Diets 18.500 21.400 24.000 30.000 37.800

% Growth 15,7% 12,1% 25,0% 26,0%

% over sales 1,2% 1,2% 1,3% 1,3% 1,6%

Other expenses 149.264 217.212 251.640 291.425 377.962

% Growth 45,5% 15,8% 15,8% 29,7%

% over sales 9,9% 12,6% 13,3% 13,0% 16,4%

EBITDA 420.206 478.340 492.263 599.222 509.985

EBITDA Margin 27,8% 27,7% 26,1% 26,7% 22,1%

Depreciations and amortizations 121.303 161.508 199.654 199.034 242.033

Estimated growth 33,1% 23,6% -0,3% 21,6%

EBIT 298.903 316.832 292.609 400.188 267.952

EBIT Margin 19,8% 18,4% 15,5% 17,9% 11,6%

Net financial income -167.689 -218.630 -230.372 -235.560 -233.186

% over sales -11,1% -12,7% -12,2% -10,5% -10,1%

Financial revenues 4.391 4.512 5.463 10.274 14.194

% over sales 0,3% 0,3% 0,3% 0,5% 0,6%

Financial expenses 172.080 223.142 235.835 245.834 247.380

% over sales 11,4% 12,9% 12,5% 11,0% 10,7%

EARNINGS BEFORE TAXES 131.214 98.202 62.237 164.628 34.766

Income tax 35.104 21.199 34.239 23.238

Deferred income tax 3.642 5.268 18.184 15.639

Efective rate (%) 29,5% 27,0% 29,2% 30,3% 66,8%

FISCAL YEAR SURPLUS 92.468 71.735 44.053 114.750 11.527

Net Margin 6,1% 4,2% 2,3% 5,1% 0,5%33

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Appendix V. Glossary

Intangible Assets or Intangible Fixed Asset: Non-physical assets such as franchises, trademarks, patents, copyrights, goodwill,

shares, securities and contracts (as distinguished from physical assets) that grant rights and privileges.

Tangible Assets or Tangible Fixed Asset: Physical assets (such as machinery, property, etc).

Amortization: Accounting procedure that gradually reduces the cost of value of an asset, tangible or intangible, (e.g.

investments in research & development), through periodic charges to the profit and loss account in order to fix the costs during

its estimated useful life.

Trading Comparable Companies: Those enterprises whose business value is obtained through methods that compare the

company to be valued to similar enterprises. It is calculated dividing the market value of the last ones by a financial magnitude

of the companies’ profit and loss account (such as net income, net sales, etc). When multiplying by the same enterprise’s

magnitude of the company to be valued, we will obtain its approximate value.

EBITDA: EBITDA refers to operating profit before amortizations.

EBIT: Earnings Before Interest and Taxes.

Balance Sheet: Statement of a company’s financial position at a given point in time. Lists the assets of a company and how

they have been financed. Total assets is equivalent to liabilities plus shareholders’ equity.

Cost of Supplies: Cost related to the production, supply, transport and storage of raw materials and the materials used in the

production process. In this section can also be included the cost of outsourcing services to provide the customer.

Profit and Loss Account: Financial statement that shows the expenses and revenues generated during a period of time.

Weighted Average Cost of Capital: Calculated as the cost of equity * (equity value / firm value) + cost of debt * (net debt /

firm value) * (1- corporate tax). It is a discount rate typically used to discount future free cash flows to the moment of

valuation.

Discounted Cash Flows (DCF): Company’s valuation method based on the idea that the value of a company is related to what it

is able to generate in the future. It is calculated as the future cash flows of a company, discounted back to present value using

an appropriate discount rate.

Net Debt: Total debt of the company minus any cash or liquid funds that the company has but does not require for its operating

activity.

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Appendix VI. e-Valuation’s References

2008 - 2009

Logistics

Media

Metallurgy

Quality Consulting

New Techonlogies

Other Building Specilialists

Outsourcing Services

Production and Distribution

Public Administration

Rail

Recreation

Advertising

Automotive

Aviation

Biotechnology

Brokerage and Financial Services

Building Materials Manufacturer

Business Services

Construction and Contracts

Construction and Materials

Construction Related Services

Consulting, Audit and Advisory

Ecological and Recycling

Editorial

Education and Training

Electronics

Engineering and Machinery

Entertainment and Leisure

Forestry

Healthcare

Insurance

Internet

Local TV

Renewable Energies

Restaurant

Retail

Software and Data Security

Sports

Steel

Technology

Telecommunicaciones

Textiles

Transportation and Logistics

Quemical Industry

36NOTE: For confidentiality reasons our clients´ names are not revealed.

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Appendix VII. Contact Details

www.evaluation.us

e-Valuation Financial Services North America e-Valuation Financial Services Northern Europe

14 Wall Street, 20th Floor One Canada Square, 29th Floor, Canary Wharf

New York City, New York 10005 London E14 5DY

United States of America United Kingdom

e-Valuation Financial Services Central and South America e-Valuation Financial Services Southern Europe

111 Brickell Avenue, 11th Floor c/ José Ortega y Gasset, 42

Miami, 33131 Madrid, Madrid 28006

United States of America Spain

37