KKR- Consolidated Research Reports

60
KKR Company-Wise Research Report

Transcript of KKR- Consolidated Research Reports

Page 1: KKR- Consolidated Research Reports

KKR Company-WiseResearch Report

Page 2: KKR- Consolidated Research Reports

Energy Future Holdings Corp.

Energy Future Holdings Corp., [formerly TXU Corp.], is a Dallas-based, privately held energy company with a portfolio of competitive and regulated energy subsidiaries. TXU Energy, Luminant and Oncor, EFH's primary businesses, serve the high-growth Texas electricity market, which is one of world's largest and among the nation's most successful competitive markets. The company owns and operates 18 electricity generation plants including one nuclear, five lignite/coal-fueled, and 12 natural gas-fueled plants with a total generation capacity of 18,319 MW. The company is headquartered at Dallas in Texas, the US.

Technology landscape•IBM DB2: Development Center•Microsoft SQL Server 2000•Oracle Database 8i, 9i, 10g: Automatic Storage Management (ASM)•Oracle Real Application Clusters (RAC) 10g•SAS 9.1.3: Base SAS, SAS/ACCESS, SAS/CONNECT•Exchange (DDE), Enterprise Guide, SAS/GRAPH, SAS/IML, Output Delivery System (ODS), SAS/STAT

IT SnapshotTotal IT spend for 2011 – $78.87 (mil)Predicted IT spent for 2012 – $79.66 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) 1,077 1,711 1,505 1,843

OPERATING MARGIN 10.21% 37.65% -49.32% 3.86%

ASSET TURNOVER RATIO 16% 16% 22% 42%

Quarter Ending

01-Jul-2011

Quarter EndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

1,679 -15.76% 8,235 -13.73% -6.39%

Capital Expenditures

387 -39.25% 944 -62.91% -33.60%

Financial Analysis

The Operating income has significantly reduced to a more manageable figure of USD 1077 Mill in FY 2010, this show a prominent reduction in operating margin which indicates reduction in operating efficiency.

The asset turnover ration remains same for last two consecutive years with a decrease of 6% from 2008.

In 2010 operating results from the competitive business improved $34 million as compared to 2009. The increase reflected a $97 million improvement in contribution margin driven by the output from the new generation units, higher retail volumes from colder winter weather and an improvement in the economy, favorable results from asset management and the retail business and lower amortization of intangible assets arising from purchase accounting, partially offset by higher fuel expense at the legacy coal-fueled generation facilities primarily due to increased transportation costs. Other improvements included a $10 million decrease in costs primarily related to the information technology outsourcing transition and the new customer care system and a $9 million increase in other income.

Page 3: KKR- Consolidated Research Reports

HCL Technologies Northgate Information Solutions Capgemini

Contracts Details

Active Contracts Service Details

Technology InitiativesDevelopment of a modernized grid through the replacement of existing meters with advanced digital metering equipment and development of advanced digital communication, data management, real-time monitoring and outage detection capabilities. This modernized grid is expected to produce electricity service reliability improvements and provide the potential for additional products and services from REPs that will enable businesses and consumers to better manage their electricity usage and costs. Oncor's plans provide for the full deployment of over three million advanced meters to all residential and most nonresidential retail electricity customers in Oncor's service area. The advanced meters can be read remotely, rather than by a meter reader physically visiting the location of each meter. Advanced meters facilitate automated demand side management, which allows consumers to monitor the amount of electricity they are consuming and adjust their electricity consumption habits. As of December 31, 2010, Oncor has installed approximately 1,514,000 advanced digital meters, including approximately 854,000 during the year ended December 31, 2010. As the new meters are integrated, Oncor reports 15-minute interval, billing-quality electricity consumption data to ERCOT for market settlement purposes. The data makes it possible for REPs to support new programs and pricing options. Cumulative capital expenditures for the deployment of the advanced meter system totaled $360 million as of December 31, 2010. Oncor expects to complete installations of the remaining approximately 1.5 million advanced meters by the end of 2012.

CONCLUSION:The operating margin has decreased and the asset turnover ratio has remained constant, whereas there is a decrease in capital expenditure and total revenue is also seen, as the company is planning to expand and implement the smart grid technology in all the service regions. Thus indicating huge requirement for data storage and network management.The company is planning to leverage process improvements and IT to reduce cost as the estimated IT spend for 2011 is $ 78.87 Mil.

Note: The E&U sector has a mandate of keeping a record of meter readings data for a minimum period of 10 years. Thus this sector requires a large storage capacity, managed services.

Page 4: KKR- Consolidated Research Reports

First Data Corporation

First Data Corporation (First Data or "the company") is engaged in providing electronic commerce and payment solutions and services. The company's service portfolio includes merchant transaction processing and acquiring services, card issuing and processing services, official check issuance, check verification, and settlement and guarantee services. The company primarily operates in the US. It is headquartered in Georgia and employs about 24,500 people. The company operates in 35 countries, serving about 6.2 million merchant locations.

Technology landscape•FICO Blaze Advisor•IBM DB2•Microsoft SQL Server 2005, 2008,•Oracle Database 8i, 9i, 10g•Sybase Server 12.5•Tandem Enscribe databases•Tandem NonStop SQL databases Ab Initio 1.14.x•Cisco 2610, 7206VXR, 6500 Catalyst Series routers•Hitachi Storage Are Network (SAN)•IBM AIX•IBM AS/400•IBM pSeries RS6000•IBM RISC system, IBM zSeries processors•Microsoft Transpoint servers and networks•Novell Servers

IT SnapshotTotal IT spend for 2011 – $689 (mil)Predicted IT spent for 2012 – $696 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) (846.9) (1,014.6) (3,608.0) 990.0

OPERATING MARGIN -8% -10.8% -40.9% 14%

ASSET TURNOVER RATIO 27% 23% 23% 20%

2010 2009 2008 2007

Total Revenue 10,380.4 9,313.8 8,811.3 7,076.4

Capital Expenditures - - 126.8 -

Financial Analysis The Operating income has significantly reduced to a more manageable figure of USD -846.9 Mill in FY 2010, this show a prominent reduction in operating margin which indicates reduction in operating efficiency.

The asset turnover ration remains same for two consecutive years with a increase of 4% from 2010.

The company recorded revenues of $10,380.4 million during the financial year ended December 2010 (FY2010), an increase of 11.5% over 2009. The growth in revenues was attributed to the incremental impact of the BAMS alliance, new sales, growth from existing clients and a card association fee increase that only benefited the third quarter of 2010. The operating profit of the company was $516.7 million in FY2010, compared to $154.8 in2009. Its net loss was $846.9 million in FY2010, compared to a net loss of $1,014.6 million in 2009.

Capital expenditures in 2010 and 2009 decreased from 2008 as a result of the Company managing its discretionary capital spending.

Page 5: KKR- Consolidated Research Reports

Opportunities company looking for in the future The mobile banking has witnessed significant growth over the past couple of years. According to industry estimates, the value of global mobile transactions will grow from approximately $240 billion in 2011 to more than $1 trillion by 2015, growing at a CAGR of 42.7% for the same period. Also, the number of users of mobile banking and related services worldwide is expected to grow from around 50 million users in 2009 to approximately 890 million by 2015, growing at a CAGR of 61.6% for the 2009-15 periods.

The company offers the Mobile Commerce and the Trusted Service Manager (TSM) solutions, which enables secure payment transactions using mobile devices. The company also provides the technology behind mobile wallets, including Google Wallet. The company can capitalize its experience in the mobile banking space to capture the potential of growing global mobile banking sector and boost its top line performance.

Potential growth in healthcare payment processing to boost revenues.

The payment processing in the US healthcare sector is providing positive growth opportunities for the company. The transactions between payers and providers are moving from paper based to transactions using electronic channels. According to the industry estimates, the total US healthcare expenditures were $2.6 trillion in 2009 and are expected to double to $4.5 trillion in 2019. Healthcare related spending in the US is about 17.3% of GDP in 2009, and is expected to grow to about 19.3% of GDP by 2019. This growth also drives the adoption of electronic payment processing.

The company's portfolio for healthcare includes healthcare spending card, benefit payment cards, electronic benefits disbursement and the STAR biller-direct payments. Growth in the healthcare payment processing will provide revenue growth for the company.

CONCLUSION:High rate of inefficient operation is clearly indicated from the financials as a negative growth in the operating income and operating margin.Also if we look at the current IT use in the organization, the company is planning for a high investment in IT, as the predicted ICT budget for the year 2011 is $ 689 Mil and this is expected to increase in year 2012 to $ 696 Mil.Increasing the operating efficiency is the main concern indicated in the future looking statement above.

Page 6: KKR- Consolidated Research Reports

Harman International Industries, Inc.

Harman International Industries, Incorporated designs, manufactures and markets a wide range of audio and infotainment products for the automotive, consumer and professional markets. Harman International maintains a strong presence in the Americas, Europe and Asia, and employs more than 11,000 people worldwide. The Harman International family of brands include AKG, Audioaccess, Becker, BSS, Crown, dbx, DigiTech, Harman Kardon, Infinity, JBL, Lexicon Mark Levinson, Revel, QNX, Soundcraft, and Studer. Harman International's stock is traded on the New York Stock Exchange under the symbol.

IT SnapshotTotal IT spend for 2011 – $109.23 (mil)Predicted IT spent for 2012 – $110.33 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) 85,555 (503,812 ) 132,167 385,756

OPERATING MARGIN 2.5% -12% 3.2% 11%

ASSET TURNOVER RATIO 76% 86.6% 68.8% 71%

Financial Analysis

The Operating income has significantly increased to a more manageable figure of USD 85555 Mill in FY 2010, this show a drastic shift in operating margin from negative to a positive of 2.5% but still the operating efficiency is not fine due to acquisition of Selenium in 2010.

The asset turnover ration reduced from last years with a decrease of 10%.

In December 2009, Harman International entered into a three-year agreement for engineering and software development services with Neusoft Corporation (“Neusoft”), a Shanghai exchange listed technology solutions provider.

(In USD Thousands) 2010 2009 2008 2007

Total Revenue 3,364,428 2,854,895 4,072,359 3,519,089

Capital Expenditures (60,033 ) (79,122 ) - -

In December 2009, we entered into a three-year agreement for engineering and software development services with Neusoft Corporation (“Neusoft”), a Shanghai exchange listed technology solutions provider.

Contracts Details

Page 7: KKR- Consolidated Research Reports

CONCLUSION:As the company is planning to invest a sum of 109.23 mil as ICT spend for 2011, and 110.33 mil is the predicted ICT spend for 2012, thus going by the financials the company’s operating efficiency is slightly affected as the company is expanding.

As the contract with Wipro Technologies has come to an end therefore we can look forward to fill in the requirements of application development, desktop management, infrastructure management, maintenance support etc.

Page 8: KKR- Consolidated Research Reports

HCA Inc. HCA Holdings, Inc (HCA), incorporated in October 2010, is a non-governmental hospital operator in the United States and an integrated provider of health care and related services. The Company has three business segments: Western Group, Central Group and Eastern Group. The Company provides services through a network of acute care hospitals, outpatient facilities, clinics and other patient care delivery settings. As of September 30, 2010, it operated a diversified portfolio of 162 hospitals (with approximately 41,000 beds) and 104 freestanding surgery centers across 20 states throughout the United States and in England. Its Medicare and ancillary services include Medicare, managed medicine, Medicaid, managed medicad, managed care and other insurance and uninsured.

Technology landscape•Citrix Presentation Server, MetaFrame•EMC CLARiiON•EMC SAN•Hitachi Backend storage•IBM AIXIBM AS/400•IBM Virtual Storage Access Method (VSAM)•Microsoft Windows Server 2003•IBM DB2•Microsoft SQL Server 2000, 2005, Reporting Services (SSRS)• Oracle Database 9i• Oracle Hyperion Essbase• Teradata Enterprise Data Warehouse

IT SnapshotTotal IT spend for 2011 – $197.56 (mil)Predicted IT spent for 2012 – $199.54 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) 3,085 2,747 1,990 1,564

OPERATING MARGIN 7.27% 6.66% 4.12% 5.21%

ASSET TURNOVER RATIO 1.28% 1.24% 1.17% 1.13%

Quarter Ending

01-Jul-2011

Quarter EndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

8,063 3.96% 30,683 2.10% 4.54%

Capital expenditure

776 44.78% 1,325 0.61% -2.83%

Financial AnalysisThe Operating income has significantly increased to a more manageable figure of USD 3085 mil in FY 2010, this show a prominent increase in operating margin and operating efficiency over the period of time.

The asset turnover ration has increased by 0.04% for last two consecutive years with a increase of 0.07% from 2008.

Contracts Details

DocuData Solutions Syntel Inc.

Page 9: KKR- Consolidated Research Reports

CONCLUSION:1. Since there is an increase in all the Operating margin, asset turnover ratio and operating

income there is a possibility of the company is moving towards operational inefficiency. With increase in operating income the asset turnover ratio should decrease to attain an ideal condition.

2. The company is planning to leverage process improvements and information technology to reduce costs, as the estimated IT spend for FY2011 is close to $ 197.56 Mil and an increase by $ 2 Mil is expected in the coming year.

Page 10: KKR- Consolidated Research Reports

Jazz Pharmaceuticals, Inc. Jazz Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the identification, development and commercialization of pharmaceutical products. The Company markets two products: Xyrem (sodium oxybate), which is a product approved by the United States Food and Drug Administration (FDA), for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy, and Luvox CR (fluvoxamine maleate) marketed for the treatment of obsessive compulsive disorder. Its product candidates are JZP-6 (sodium oxybate) for the treatment of fibromyalgia, JZP-8 (intranasal clonazepam) for the treatment of acute repetitive seizures in epilepsy, and solid oral dosage forms of sodium oxybate. For the three months ended 31 March 2011, Jazz Pharmaceuticals, Inc.'s revenues increased 45% to $50.9M. Net income totaled $21.8M up from $1.5M. Revenues reflect an increase in income from United States segment. Net income reflects a decrease in intangible assets amortization & decrease in research & development expenses due to a credit resulting from the government therapeutic discovery and lower interest expense.

Technology landscape•IBM DB2: Development Center•Microsoft SQL Server 2000•Oracle Database 8i, 9i, 10g: Automatic Storage Management (ASM)•Oracle Real Application Clusters (RAC) 10g•Exchange (DDE), Enterprise Guide.

IT SnapshotTotal IT spend for 2011 – $3.71 (mil)Predicted IT spent for 2012 – $3.74 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) 58.9 -15.9 -130.2 -81.1

OPERATING MARGIN 26.18% 12.40% -252.34% -212.51%

ASSET TURNOVER RATIO 1.43 1.14 0.42 0.31

Quarter Ending

01-Jul-2011

Quarter EndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

64.6 59.48% 173.8 35.29% 38.58%

Capital Expenditures

0.2 -46.69% 0.7 1,279.25% -38.54%

Financial Analysis

The Operating income has significantly increased to a more manageable figure of USD 58.9 Mill in FY 2010, this show a prominent increase in operating margin resulting to improvement in operating efficiency.

A slight increase in asset turnover ratio can be seen for last two consecutive years with a increase of around 1% from 2008.

Pain points/Challenges•Shortening development cycles for lower costs of development and shorter development timelines

• Ability to complete clinical development and obtain regulatory approvals for their product candidates

•Improve their supply chain/sales force for better market penetration • Ability to recruit and retain skilled employees • Ability to expand and grow their speciality sales force.• Ability to supply commercial quantities of a product to the market

•Improvement of operational efficiencies (In the first nine months of 2008, Jazz Pharmaceuticals had net product sales of $45.8 million and an operating loss of $118.6 million. In the first nine months of 2009, they were able to achieve net product sales of $77.8 million and operating income of $4.5 million)

Page 11: KKR- Consolidated Research Reports

Jazz Pharmaceuticals Selects Service-now.com for On-Demand IT Service Management

• Jazz Pharmaceuticals IT service management history– Used an email-based ticketing system supplemented with Spiceworks.– Significant use of and experience with on-demand and SaaS-based technologies.– Ticketing system provided base-level Sarbanes-Oxley compliance but lacked efficiency and scalability.

• Jazz Pharmaceuticals IT service management highlights

– Goal to transform IT from a simple help desk to evolved IT service management.– Mirroring the company's outsourcing philosophies, IT prefers SaaS.– Selected Service-now.com native, Web-based SaaS IT service management for its ease of use.– Jazz Pharmaceuticals ITIL-based processes easily supported by Service-now.com including incident, change, and asset management and

service catalog.– Jazz Pharmaceuticals plans to use Service-now.com for facilities management and billable items.

• Pharmaceutical industry compliance efforts– Service-now.com used to streamline tracking and reporting of incidents for Sarbanes-Oxley compliance.– Change management efforts to focus on clinical-trial applications that require compliance with FDA guidelines (21 CFR Part 11) for change

requests.

CONCLUSION:1. Since there is an increase in all the Operating margin, asset turnover ratio and operating income

there is a possibility of the company is moving towards operational inefficiency. With increase in operating income the asset turnover ratio should decrease to attain an ideal condition.

2. The company is focusing upon improving their operating efficiency.3. The company is planning to invest in IT as the estimated IT spend for FY2011 is $ 3.71 Mil and

for the FY2012 is $ 3.74 Mil.

Page 12: KKR- Consolidated Research Reports

Rockwood Holdings, Inc. (Rockwood) is a developer, manufacturer and marketer of specialty chemicals and advanced materials used for industrial and commercial purposes. Rockwood’s products consist of inorganic chemicals and solutions and engineered materials. The Company operates manufacturing its products in 81 facilities in 23 countries and selling its products and providing its services to more than 60,000 customers. Rockwood operates its business through four business segments: Specialty Chemicals, Performance Additives, Titanium Dioxide Pigments and Advanced Ceramics.

Technology landscape•IBM DB2: Development Center•Microsoft SQL Server 2000•Oracle Database 8i, 9i, 10g: Automatic Storage Management (ASM)•Oracle Real Application Clusters (RAC) 10g•SAS 9.1.3: Base SAS, SAS/ACCESS, SAS/CONNECT•Exchange (DDE), Enterprise Guide, SAS/GRAPH, SAS/IML, Output Delivery System (ODS), SAS/STAT

IT SnapshotTotal IT spend for 2011 – $83.30 (mil)Predicted IT spent for 2012 – $84.14 (mil)

2010 2009 2008 2007

OPERATING INCOME (USD Mil) 482.4 369.6 296.6 366.9

OPERATING MARGIN 11.16% 6.20% -13.18% 11.50%

ASSET TURNOVER RATIO 0.67 0.56 0.59 0.57

Quarter Ending

01-Jul-2011

Quarter EndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

1,000 22.90% 3,191.6 15.26% 1.36%

Capital Expenditures

116.9 64.42% 180.3 19.01% -2.28%

Financial Analysis

On January 7, 2011, the Company completed the sale of its plastic compounding business, which manufactured specialty plastic compounds for the wire and cable business, as well as medical applications and other uses. Effective January 7, 2011, the Company completed the sale of the AlphaGary plastic compounding business to MEXICHEM S.A.B de C.V. For the three months ended 31 March 2011, Rockwood Holdings, Inc.'s revenues increased 17% to $914M. Net income increased 96% to $63.3M. Revenues reflect an increase in income from performance additives segment and increase in adjusted earnings before interest & tax over the prior. Net income was benefited from a decrease in Asset write-down and other ,lower early extinguishment/modification of debt and decrease in Other expenses, net.

Rockwood Holdings, Inc.

The Operating income has significantly increased to a more manageable figure of USD 482.4 Mill in FY 2010, this show a prominent increase in operating margin resulting to improvement in operating efficiency.

An increase in asset turnover ratio can be seen for last two consecutive years with a increase of around 0.11% .

Page 13: KKR- Consolidated Research Reports

CONCLUSION:Since there is an increase in all the Operating margin, asset turnover ratio and operating income there is a possibility of the company is moving towards operational inefficiency. With increase in operating income the asset turnover ratio should decrease to attain an ideal condition.Also if we look at the current IT use in the organization, the use of legacy systems is evident. Thus it shows the company is planning for an IT investment, as the predicted ICT budget for the year 2011 is $ 83.30 Mil and this is expected to increase in year 2012 to $ 84.14 Mil. Increasing the operating efficiency is a major concern.

Page 14: KKR- Consolidated Research Reports

Academy Sports + Outdoors

• KKR has struck a deal to buy Academy Sports + Outdoors, the Katy-based retailer that has 131 stores in 11 states.

• This transaction with KKR will help accelerate Academy’s continued growth and provide even greater flexibility to achieve our strategic goals.

Academy Sports + Outdoors Raises $450 Million in Private Placement (07/26/2011)Academy, Ltd. has sold an additional $450 million worth of senior notes in the 144a private placement market. The notes carrying a coupon of 9.25%, will mature on August 1, 2019 and were priced at 100% of their principle amount to yield 9.25%. Interest on the non-callable three year notes will be paid semi annually starting from February 1, 2012.

Academy, Ltd. Enters the Atlanta Market (03/29/2011)Academy, Ltd. announced that it will debut its first store in the Atlanta area on April 1, 2011. The store is nearly 70,000 square feet and is located at 198 South Point Boulevard in McDonough. It brings 150 new jobs to the area, and is the fourth Academy Sports + Outdoors store in the state of Georgia

Business Updates

OverviewAcademy Sports + Outdoors is one of the largest sporting goods retailers in the United States. The company operates more than 100 stores that offer a variety of sports equipment, apparel and footwear. It has a staff of over 10,000 employees. Academy Sports + Outdoors provides a range of athletic, casual and work footwear and apparel; bikes and scooters; and fitness, team sports, golf, fishing, marine, water sports, hunting, camping and grilling equipment and outdoor furniture. The company offers products from the adidas, Nike, Russell, Soffe and Levi's. It has stores in the states of Texas, South Carolina and Alabama.

Page 15: KKR- Consolidated Research Reports

Del Monte

BusinessOn March 8, 2011 KKR, Vestar and Centerview Enter into Agreement to Acquire Del Monte Foods for $5.3 billion Transaction Valued at $5.3 billion On March 8, 2011, Del Monte Foods announced the completion of the acquisition of the Company by an investor group led by funds affiliated with Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners and Centerview Partners. Under the terms of the merger agreement, Del Monte shareholders are entitled to receive $19.00 in cash for each share of Del Monte common stock held. Trading in the Del Monte stock on the New York Stock Exchange was suspended on March 9, 2011.

OverviewDel Monte Foods and its subsidiaries (Del Monte or 'the company') is one of the country’s largest producers, distributors and marketers of packaged fruits and vegetables. The company is also engaged in the production of a range of specialty items such as pet food and snacks for the U.S. retail market, generating approximately $3.7 billion in net sales in fiscal 2010.The company operates 17 production facilities and 10 distribution centers in the US. Additionally, Del Monte also operates production facilities in Mexico and Venezuela. Its portfolio of brands includes Del Monte, S&W, Contadina, College Inn, Meow Mix, Kibbles 'n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Sausages and Pounce.

2010 2008 2007 2006

OPERATING INCOME (USD Mil) 77.5 170.6 193.0 -117.5

OPERATING MARGIN 2.18% 4.83% 5.73% -3.66%

ASSET TURNOVER RATIO 1.39% 1.46% 1.57% 1.53%

Financial Ratio Analysis

Quarter Ending01-Jul-2011

Quarter EndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

1,039.7 10.24% 3,552.9 1.62% 1.82%

Capital Expenditures

42.4 - 70.8 -16.21% -4.54%

The operating income has significantly reduced to a more manageable figure of USD 77.5 Mil in FY 2010, this show a prominent reduction in cost.

The asset turnover ration has decreased, this shows that the sale has gone up with respect to assets, in other words, the amount of sales has gone up with each dollar of asset.

According to Gartner reports, a company spends approx 2% of the total capital expenditure on IT initiatives.

Hardware Used: DataWarehouse(Infra Relevant)

Hertzler Systems GainSeeker Suite Microsoft SQL Server 2000 Open Text Fax Server 9.4 Oracle Databases 9i Cisco hardware EMC Documentum platform HP ProLiant DL580 Servers IBM AS/400

For fiscal 2011, the Company now expects net sales growth of 1% to 3% over fiscal 2010 net sales of $3,739.8 million, compared to previous expectations of 2% to 4%. The Company continues to expect fiscal 2011 diluted EPS from continuing operations target of $1.38 to $1.42 consistent with the Company's long-term EPS annual growth target of 7% to 9%. Reduced cost inflation expectations net of productivity savings are anticipated to offset the reduction in net sales growth expectations.

Page 16: KKR- Consolidated Research Reports

Del Monte and IBMDel Monte Philippines, Inc. has tapped IBM’s technology expertise to boost Information Technology (IT) efficiency while bringing down operational costs through smart IT and Data Center outsourcing solutions.The move to IBM, likewise addresses business demands of greater availability and higher service performance as Del Monte is now able to swing their Capital Expenditure (CAPEX) to purely Operational Expenditure (OPEX) with their SAP migration infrastructure particularly on the Infrastructure.Contract Details: The two contracts worth approximately $3.1 US million covering a 5-year period, were signed in 2009.The first is a total IT infrastructure services outsourcing contract. Under the Service Level Agreement, IBM provides management for the food giant’s Data Center, Servers/Storage, Network, DMS, Helpdesk, IT Asset & Vendor Management.The second contract covers management of an outsourced SAP Infrastructure (servers, storage, data center facility & disaster recovery site) for Del Monte’s migration to SAP ECC 6.0 while maintaining the asset ownership of the said Infrastructure.Del Monte’s chief information officer, Cesar Canlas, said IBM liberated funding for direct savings and increased the company’s IT efficiency in its day-to-day operations. The company’s productivity and business growth are expected to be enhanced.

Del Monte identified four key issues existing in its current IT infrastructure that needed to be resolvedFirst, IT staff was spending too much time provisioning new accounts for users, resetting passwords, recovering lost documents, forwarding approval requests and doing other administrative or manual tasksSecond, IT lacked a holistic view of the complex infrastructure it needed to monitor, making system management a challenge for administrators. Third, IT staff and business users were losing valuable hours by searching multiple systems and databases for necessary informationFinally, as Del Monte continued to expand, its employees needed greater communication flexibility to meet the demands of the fast-paced business worldSolutionDel Monte decided to upgrade to the 2007 Microsoft Office system, with a focus on Microsoft Office SharePoint® Server 2007 and Exchange Server 2007. In addition, Del Monte chose to deploy Microsoft Forefront Security for Exchange and Forefront® Security for SharePoint, as well as Microsoft System Center for its management and security solution. Del Monte worked with K2, a Microsoft Gold Certified Partner based in Redmond, Washington, to implement a new workflow solution.

DiCentral offers Del Monte Foods compliant EDI solutionsEDI process enables you to send your documents to Del Monte Foods easily and effectively, with the confidence that your Del Monte Foods compliant EDI transactions are processed with the proper data and unique EDI guidelines that Del Monte Foods requireslist of Del Monte Foods compliant EDI transactions: PURCHASE ORDER, INVOICE, PURCHASE ORDER ACKNOWLEDGEMENT, SHIP NOTICE/MANIFEST.

Hewlett-Packard and Del Monte10 years back EDS won the 10-yr contract with the Del Monte Foods Company that extends the companies’ 12-year relationship. EDS continued to provide applications development, manage midrange servers and networks and provide managed workspace services including support for the company’s 1,500 desktops across the United States.

Contract Details Signing Date 18th July 2002 End Date 18th July 2012Contract Length (months) 120Contract Status Active Total Value of contract $US 100.00 millionGeographic scope of contract USIT Service Type Application management, Network management and Server Management

Page 17: KKR- Consolidated Research Reports

2011 spending pattern by sub-segment (% of external ICT budget)

HARDWARE

Servers and Storage 11.9%

Networks and Equipment 10.5%

End User Computing & Peripherals 3.9%

SOFTWARESoftware Licenses 17.3%

Support and Maintenance 6.8%

SERVICESApplication Development and

Integration 5.6%

Infrastructure support and management 7.9%

Helpdesk and User support 8.0%

COMMUNICATIONS

Voice Servers 3.8%Data Servers 3.8%

Converged Services 2.7%

CONSULTINGSystems planning and Design

consulting 4.5%

Disaster Recovery and Business Continuity Planning 3.8%

Training, Education and other consulting 3.4%

OTHERS 6.2%Total 100%

Overall ICT Spend 2011 ($m)

Overall ICT Spend 2012 ($m)

99.25 100.25

ICT SPEND

CONCLUSION1. Operational inefficiency is clearly indicated in their financials, as their operating income has reduced drastically by approx 93%

over two consecutive years, thus affecting the operating margin and asset turnover ratio with a constant decrease over the years.

2. Del Monte is planning to swing their Operational Expenditure (OPEX) with their SAP migration infrastructure. As the overal Ict spend is 99.25 for FY 2011 and is expected to increase in 2012 by $ 1 Mil.

Page 18: KKR- Consolidated Research Reports

OverviewDollar General Corporation is a discount retailer. As of February 25, 2011, the Company operated 9,414 stores located in 35 states, primarily in the southern, southwestern, Midwestern and eastern United States. The Company offers a selection of merchandise, including consumables, seasonal, home products and apparel. Its merchandise includes national brands from manufacturers, such as Procter & Gamble, Kimberly Clark, Unilever, Kellogg's, General Mills, Nabisco, Coca-Cola and PepsiCo, as well as private brand selections. The Company offers its merchandise at everyday low prices through its convenient small-box (approximately 7,200 square feet) locations. The Company is majority owned by Buck Holdings, L.P., a limited partnership controlled by Kohlberg Kravis Roberts & Co. L.P. (KKR), which owns approximately 71% of the Company's interest.

Dollar General Corporation

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

824.7 672.8 575.2 441.6

Operating Margin 9.77% 8.08% 5.55% 2.69%

Asset Turnover Ratio (USD Mil) 1.42 1.33 1.19 1.62

Financial Ratio Analysis

QuarterEnding

29-Apr-2011

QuarterEndingYr Ago

AnnualYear End28-Jan-2011

1 YearGrowth

3 YearGrowth

Total Revenue

3,451.7 10.94% 13,035.0 10.50% 11.14%

Capital Expenditures

92.0 1.05% 420.4 67.66% 44.34%

The operating income has significantly increased to a more manageable figure of USD 824.7 Mil in FY 2010, this show a prominent increase in cost.

The asset turnover ration has increased, this shows that the sales has gone down with respect to assets, in other words, the amount of sales has decreased with each dollar of asset.

According to Gartner reports, a company spends approx 2% of the total capital expenditure on IT initiatives.

Business Strategy:Dollar General defined four operating priorities, on which they remain keenly focused on executing. These priorities are: 1. Drive productive sales growth2. Increase our gross margins,3. Leverage process improvements and information

technology to reduce costs, and4. Strengthen and expand Dollar General’s culture of serving

others.

With regards to leveraging information technology and process improvements to reduce costs, we will continue to focus on making improvements that benefit our merchandising and operations efforts, including item profitability analysis, merchandise selection and allocation and labor scheduling. In 2009, we completed the installation of back office computers in all of our stores, which we will utilize to improve reporting and communications with the stores and, consequently, we believe will assist in improving store productivity. We also will complete the rollout of a new voice pick system in our distribution centers, allowing our distribution associates to communicate with warehouse software systems using speech recognition, which we expect to further improve our efficiencies in 2010.

Page 19: KKR- Consolidated Research Reports

InstaKey® Security System and Dollar General Corp.Dollar General have reduced their annual key costs after converting numerous locations to the InstaKey® system. The system paid for itself and increased store security in the process. The return on investment has been very good. The annual keying costs after converting 6,500 locations to the InstaKey® system compared to what they had been averaging before the conversion resulted in excess of $1 million.The motive of achieving operational efficiency was hence accomplished.

Dollar General Compliant EDI Solutions The web-based EDI process enables you to send the documents to Dollar General Corporation easily and effectively, with the confidence that the Dollar General Corporation compliant EDI transactions are processed with the proper data and unique EDI guidelines that Dollar General Corporation requires. Following is a list of Dollar General Corporation compliant EDI transactions: INVOICE, PURCHASE ORDER

Dollar General Corporation Adopts Interface Secure Managed Cloud ServicesInterface, a secure managed cloud services provider, has signed a multi-year contract with Dollar General to provide secure managed cloud services that will improve operations, and increase the security of customer and employee data, while providing significant reductions in operating expenses. Interface’s secure managed cloud services for Dollar General includes wide-area network management, PCI compliance, wireless access management, IP alarm system monitoring, IP video surveillance, and interface digital voice. This first-to-market suite of secure cloud based applications and management is delivered via Interface secure managed broadband, a wide-area network design featuring redundant, high-speed network connections for failover and business continuity. Under the agreement, Dollar General will use Interface managed cloud services for its entire retail store network, which includes more than 9,500 store locations.“Our secure managed cloud bundle provides Dollar General with a cost-saving and scalable technology template,” said Robert Aranda, IP division president of Interface. “Dollar General is one of the first major retailers to embrace bundling these critical in-store services. We are honored to be a part of Dollar General’s business strategy.”

Overall ICT Spend 2011 ($m)

Overall ICT Spend 2012 ($m)

119 120.19

2011 spending pattern by sub-segment (% of external ICT budget)

HARDWARE

Servers and Storage 12.0%

Networks and Equipment 10.5%

End User Computing & Peripherals 1.9%

SOFTWARESoftware Licenses 14.8%

Support and Maintenance 4.5%

SERVICESApplication Development and

Integration 7.3%

Infrastructure support and management 8.3%

Helpdesk and User support 7.1%

COMMUNICATIONS

Voice Servers 5.5%Data Servers 6.0%

Converged Services 4.4%

CONSULTINGSystems planning and Design

consulting 4.6%

Disaster Recovery and Business Continuity Planning 4.1%

Training, Education and other consulting 4.8%

OTHERS 4.2%Total 100%

CONCLUSION1. Since there is an increase in all the Operating margin, asset turnover ratio and operating income there

is a possibility of the company is moving towards operational inefficiency. With increase in operating income the asset turnover ratio should decrease to attain an ideal condition.

2. The company is planning to leverage process improvements and information technology to reduce costs, as the estimated IT spend for FY2011 is close to $ 119 Mil and an increase by $ 1 Mil is expected in the coming year.

Page 20: KKR- Consolidated Research Reports

OverviewEastman Kodak Company (Kodak) is engaged in the sale of imaging products, technology, solutions and services to consumers, businesses and professionals. Kodak operates in three segments: Consumer Digital Imaging Group (CDG), Graphic Communications Group (GCG) and Film, Photofinishing and Entertainment Group (FPEG). The Company’s products span digital still and video cameras and related accessories; consumer inkjet printers and media; digital picture frames; retail printing kiosks, APEX drylab systems and related media and services, and KODAK Gallery online imaging services. Kodak’s products also include prepress equipment and consumables; imaging sensors; workflow software and services; electro-photographic printing equipment, consumables and service; commercial inkjet printing equipment, consumables and service, and document scanners.

Eastman Kodak

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

-219.0 -136.0 168.0 328.0

Operating Margin -6.09% -0.12% -8.72% -2.23%

Asset Turnover Ratio (USD Mil) 1.03 0.90 0.82 0.74

Financial Ratio Analysis

QuarterEnding

29-Apr-2011

QuarterEndingYr Ago

AnnualYear End31-Dec-

2010

1 YearGrowth

3 YearGrowth

Total Revenue

1,485.0 -4.50% 7,187.0 -5.51% -11.31%

Capital Expenditures

56.0 -3.45% 149.0 -1.97% -16.83%

A negative growth is prominent in the operating income., whereas the operating margin flows to -6.09%.

The asset turnover ratio has increased to 1.03 , this indicates that the operating efficiency has drastically reduced.According to Gartner reports, a company spends approx 2% of the total capital expenditure on IT initiatives.

Kodak provides a high level of service and expertise while dramatically reducing costs. They’ve been supporting storage systems since 1990 and expanded their vision during the 90s to include multi-vendor services, recognizing the need for data storage services at reasonable rates. Kodak has leveraged our technical and business expertise to become a premier storage and server maintenance provider.

Kodak Service & Support:Greater control of your capital expensesTo put off hardware refreshes and upgradesTruly cost-effective, post-warranty supportHighly responsive multi-vendor support for all your data center componentsExpert service, including customized options, all delivered by FEs you know and trust

Page 21: KKR- Consolidated Research Reports

Eastman Kodak Company has selected Sun to be the preferred provider for its global Enterprise Resource Planning (ERP) environment and infoimaging business needs. The five-year opportunity was opened to the industry's major storage providers; the challenge was to implement a storage environment that could provide Eastman Kodak's infrastructure with the maximum scalability, uptime and reliability needed to match the capabilities of Sun's servers running the Solaris(TM) 8 Operating Environment. Sun's proven technology, performance and service were the deciding factors for Kodak. Building on Kodak's existing 100 terabytes (TB) of Sun StorEdge(TM) arrays, the additional implementations have the potential to exceed 500 TBs over the duration of the contract.This architecture is expected to meet and exceed Kodak's performance and availability requirements in the rapidly growing info imaging business.

Sun helped Kodak implement one of the largest SAP systems in the world and acted as an integral part of our infrastructure team since we began planning our ERP implementation. They provided scalable and flexible hardware that helped Kodak meet challenging performance goals, while providing significant expertise to assist with sizing, tuning, high availability and capacity planning.Currently, Kodak's ERP implementation is based on more than 100 TBs of Sun StorEdge(TM) arrays and 120 Sun Enterprise(TM) servers-numbers expected to grow significantly in the coming years.Moving forward, Kodak will deploy Sun StorEdge T3 enterprise arrays with predictable linear scalability of capacity, performance and reliability. Currently, two 38-way Sun Enterprise 10000 servers, also known as Starfire(TM) servers, are configured in a highly available cluster and act as the database server.Sun Enterprise 3000, 3500 and 4500 servers support the SAP solutions.

The recently announced Kodak info imaging implementation will also rely on Sun's end-to-end solutions with high scalability, reliability, availability and serviceability characteristics. Sun Professional Services will continue to play a key role in architecting and maintaining both the ERP and info imaging environments. Through a SunSpectrum(SM) Platinum support agreement, Sun Support Services will also help Kodak maintain high availability and reliability in its infrastructure.

Overall ICT Spend 2011 ($m)

Overall ICT Spend 2012 ($m)

244.22 246.67

2011 spending pattern by sub-segment (% of external ICT budget)

HARDWARE

Servers and Storage 11.9%

Networks and Equipment 10.5%

End User Computing & Peripherals 3.9%

SOFTWARESoftware Licenses 17.3%

Support and Maintenance 6.8%

SERVICESApplication Development and

Integration 5.6%

Infrastructure support and management 7.9%

Helpdesk and User support 8.0%

COMMUNICATIONS

Voice Servers 3.8%Data Servers 3.8%

Converged Services 2.7%

CONSULTINGSystems planning and Design

consulting 4.5%

Disaster Recovery and Business Continuity Planning 3.8%

Training, Education and other consulting 3.4%

OTHERS 6.2%Total 100%

CONCLUSION1. High rate of inefficient operation is clearly indicated from the financials.2. Also if we look at the current It use in the organization, the use of legacy systems is evident from the above mentioned contract. Thus

it shows the company is planning for a high investment in IT, as the predicted ICT budget for the year 2011 is $ 244.22 Mil and this is expected to increase in year 2012 to $ 246.67 Mil.

3. Increasing the operating efficiency is the CIO’s main concern., and so is IT transformation.

Page 22: KKR- Consolidated Research Reports

Aricent Inc (Competitor)Aricent is a global technology and services company that focuses on communication applications. It is one of the leading, privately held application, infrastructure and service providers in the world. With operations in more than 15 countries, the company employs a work force of over 8,000 people and manages nearly 33 offices worldwide. It features a portfolio of approximately 125 licensed products. Aricent is involved in the user experience design and consulting, research, development and testing for devices and infrastructure, as well as operational and billing systems. Its product line includes intelligent Ethernet switching, DSLAM controller software, multiservice business gateway, and online charging and control system. The company also offers network consulting, radio network planning, sustaining engineering, systems integration and hardware design services. It serves various device and network equipment manufacturers and communications services providers. Aricent's investors include Kohlberg Kravis Roberts & Company, SEQUOIA CAPITAL, and Flextronics International.

Aricent and Cavium Networks collaborate to provide LTE EPC solutionsAricent, a technology and services company focused on communications, has announced a long-term evolution evolved packet core development collaboration with Cavium Networks, a provider of semiconductor products for networking, wireless and video applications.Through this collaboration, the companies will offer pre-optimized, performance-enhanced and highly-scalable evolved packet core (EPC) serving gateway (SGW), PDN gateway (PGW) and mobility management entity (MME) ready-to-use software frameworks for Cavium's OCTEON Multi-core MIPS64 processor family.

Cavium Networks has said that the joint effort creates technology synergies, offering long-term evolution (LTE) equipment manufacturers a high-capacity solution for its EPC platforms, while simultaneously reducing time to market, risk and cost.

MicrosoftProblem: Aricent was using Lotus Domino Server and Lotus Notes 6.5 for enterprise messaging. The environment provided basic capabilities such as e-mail, calendaring, and scheduling. However, there were endless problems—including stability and capacity, performance, and search with the existing environment. As employee requirements grew, the users demanded a more robust, feature-rich e-mail system. To overcome these limitations from a messaging aspect and prepare for future competitive environment, Aricent looked for an alternative infrastructure to accommodate communication and collaboration.Solution: After looking at several different vendors and messaging environments, Aricent chose to upgrade its messaging infrastructure to Microsoft Exchange Server 2007 and also deployed Microsoft Office Communications Server 2007.As part of the new solution, Aricent will deploy the Mailbox Server role, the Client Access Server role and the Hub Transport Server role of the Exchange Server 2007.The solution has not only improved collaboration and communication across the organization, but has also helped the company reduce server hardware.

“We decided to become an early adopter of Exchange Server 2007 in order to take advantage of several new and enhanced features, including anytime anywhere access and operational efficiency,” says Charles Padmakumar, Director IT, Aricent.

Page 23: KKR- Consolidated Research Reports

Biomet IncBiomet, Inc. (Biomet) is an orthopedic medical device company in the United States with operations in more than 50 locations worldwide and distribution in approximately 90 countries. Biomet designs, manufactures and markets a range of both surgical and non-surgical products used primarily by orthopedic surgeons and other musculoskeletal medical specialists. The Company operates in one business segment, musculoskeletal products, which includes the design, manufacture and marketing of products in four categories: Reconstructive Products, Fixation Devices, Spinal Products and Other Products. It has three geographic markets: United States, Europe and International. Its subsidiaries include Biomet Orthopedics, LLC, Biomet Manufacturing Corp., Biomet Europe BV, EBI, LLC, Biomet 3i, LLC, Biomet International Ltd., Biomet Microfixation, LLC, Biomet Sports Medicine, LLC and Biomet Biologics, LLC.

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

321.5 243.8 248.3 439.8

Operating Margin 13.22% -13.91% -31.49% 23.23%

Asset Turnover Ratio 0.22 0.19 0.29 0.89

2010 2009 2008 2007

Total Revenue 2,698.0 2,504.1 2,383.3 2,107.4

Capital Expenditures

-186.4 -185.0 -189.9 -142.5

For the nine months ended 28 February 2011, Biomet, Inc.'s revenues remained flat at $2.02B. Net loss increased 12% to $37M. Revenues reflect an increase in income from United States segment and a rise in income from reconstructive segment. Net loss reflects an increase in research & development expenses and decrease in interest income.

Financial Ratio Analysis

Strategic Acquisitions and CollaborationsIn order to maintain the company's existing position it successfully implemented inorganic growth strategy. Acquisition provides a potential opportunity to the company to expand its horizons. In July 2010, the company completed the acquisition of all the assets of Cytosol Laboratories, Inc., which is principally engaged in the production of small volume anticoagulants. This acquisition will strengthen its Platelet Separation System and Platelet Concentration System portfolio. In November 2009, the company purchased the business of Foster City, California based company Cartilix, which mainly develops cartilage repair and regeneration solutions. This acquisition will enrich the company's solutions for knee disorders. In July 2010, the company's subsidiary Biomet 3i entered into a collaboration with US based in-lab dental scanning systems manufacturer Renishaw plc, to design comprehensive digital solutions for dental professionals and patients worldwide.

Market Growth in Emerging EconomiesEmerging markets offer a strong growth opportunity for the company, which can leverage its strong brand and product portfolio to take advantage of rapid growth in these markets. The demand in the core markets is falling; hence, in order to sustain their top-line, companies are looking at tapping new markets, especially the emerging economies. According to our in-house forecasts, medical equipment market in emerging economies (China, India and Brazil) has grown at a CAGR of 6.5% over the last eight years to reach USD 20.8 billion in 2009, driven by positive demographics, increased awareness of medical conditions, the availability of treatment options, and an increase in income levels. It is forecast to grow at a CAGR of 7.3% to reach USD 31.8 billion in 2015. The company envisages considerable opportunity to grow as healthcare systems are modernized and expanded in these economies.

Overall ICT Spend 2011 ($m)

Overall ICT Spend 2012 ($m)

69.44 70.14

2011 spending pattern by sub-segment (% of external ICT budget)

HARDWARE

Servers and Storage 12.8%

Networks and Equipment 11.8%

End User Computing & Peripherals 3.5%

SOFTWARESoftware Licenses 14.4%

Support and Maintenance 5.4%

SERVICESApplication Development and

Integration 6.6%

Infrastructure support and management 7.3%

Helpdesk and User support 6.6%

COMMUNICATIONS

Voice Servers 5.3%Data Servers 6.2%

Converged Services 3.4%

CONSULTINGSystems planning and Design

consulting 4.6%

Disaster Recovery and Business Continuity Planning 4.0%

Training, Education and other consulting 3.4%

OTHERS 4.5%Total 100%

Page 24: KKR- Consolidated Research Reports

SAP and Biomet EuropeSAP IT service management helps companies streamline their IT operations. SAP ITSM is made to help companies stay compliant with ITIL best practices for such IT processes as incident management, problem management, change and service asset management, knowledge management and financial management.SAP ITSM Key Features that help Biomet:IT Service Desk ManagementIncident and Problem ManagementIT Infrastructure Change ManagementService Asset and Configuration ManagementIT Financial ManagementService Level Management

Biomet and WNS Global Services – Contract details

Primary Vendor WNS Global ServicesClient Name Biomet

Deal ID CWOD32348Contract Length (M) 60.00

Contract Type New businessTotal Value of Contract ($m) 20.00

Announcement Date 15-Sep-08Signing Date 15-Sep-08

Start Date 15-Sep-08End Date 15-Sep-13

Signing Region USKey Territories Asia Pacific; North America

Geographic Scope of Contract Asia-Pacific; India; North America; United StatesClient Contact Jim Bechtold

Client Contact Job Title senior vice president reimbursement and government affairsBidding Process Type Competitive

Pricing Method Fixed price

Description of ComponentsWNS has been awarded a five-year contract from EBI, a subsidiary of Biomet d/b/a Biomet Trauma and Biomet Spine, to

provide healthcare revenue cycle management services.Under the contract, WNS will provide service level improvements utilizing high-end analytics to optimize collections and

order processes. Value of the contract is estimated.

IT Service Type BPO financial process management; Business process outsourcing; Consulting; Offshore contracting; Processing servicesIT Solution Area Healthcare applications

Industry Consolidation Challenges (conclusion)The company may be forced to lower its prices due to industry consolidation in the healthcare market. Consolidation in the medical device industry is leading to intense competition in providing goods and services to patients and individuals. In the first three quarters of 2009, 275 deals worth USD 22.9 billion were consummated in the medical devices space. This consolidation poses a potential threat as the resultant players, larger in size, might use their influence to negotiate price concessions. This may result in decreasing revenues for the company.

Page 25: KKR- Consolidated Research Reports

TDC A/STDC A/S is a Denmark-based provider of telecommunications solutions. Its activities comprise six business segments. The Nordic segment provides landline telephony, mobile telephony, Internet, and network and system integration services in the Nordic region. The Private segment offers mobile and landline services to private customers in Denmark. The Business segment provides telecommunications solutions for small, medium and large business customers, as well as public institutions. The YouSee segment is a Danish cable operator, offering television (TV), landline and mobile broadband, as well as landline telephony to individual households, and to antenna- and housing-associations in Denmark. The Operations & Wholesale segment is responsible for a number of support functions and offers access to the Company’s network for external partners. The Headquarters (HQ) segment is responsible for corporate functions at TDC A/S, such as Human Resources (HR) and communications, among others.

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

1,554.6 1,983.3 1,405.2 1,813.3

Operating Margin 15.55% 18.24% 8.53% 13.11%

Asset Turnover Ratio 0.35 0.28 0.30 0.46

Total Revenue 4,653.4 4,870.7 5,280.6 6,756.2

For the six months ended 30 June 2011, TDC A/S's revenue decreased 28% to DKR13.15B. Net income from continuing operations increased 28% to DKR1.26B. Revenue reflects improved sales from the TDC Nordic- and YouSee business segments. Net income from continuing operations benefited from decreased external expenses and wages, salaries and pension costs as well as positive result from both operating and gross profit margins.

TDC Nordic's strategy is to leverage on its challenger positions in Sweden, Norway and Finland and TDC's leading position in Denmark to offer competitive products and services on its pan-Nordic infrastructure. Further, the strategy is to leverage and share common product development, product know-how and best practices across the countries where it is present.An important element in TDC Nordic's strategy is to leverage its network infrastructure, which is upgraded on an ongoing basis and includes fibre-based backbone (fibre cable and a pan-Nordic SDH network delivering landline point-to-point capacity), PSTN/ISDN and IP/Ethernet networks, to raise sales productivity and utilise cross-selling opportunities.

Financial Ratio Analysis

Page 26: KKR- Consolidated Research Reports

ATEA ASA HEWLETT-PACKARD CO CAPGEMINIClient Name TDC TDC TDCContract Length (M) 24.00 36.00 24.00 Contract Type New business New business Add-onTotal Value of Contract ($m) 14.90 5.00 20.00 Announcement Date 18-Sep-07 2-Jun-06 1-Jun-06Signing Date 18-Sep-07 2-Jun-06 1-Jun-06Start Date 18-Sep-07 2-Jun-06 1-Jun-06End Date 18-Sep-09 2-Jun-06 1-Jun-08Signing Region Denmark Denmark DenmarkKey Territories EMEA EMEA EMEAGeographic Scope of Contract Europe; Denmark Europe; Denmark Europe; Denmark

Desciption of Components

Norwegian IT group Ementor ASA agreed to deliver home PCs for the employees of Danish telecoms group TDC A/S in a deal, valued between 60m Danish crowns ($11.2m) and 80m crowns ($14.9 m). TDC will offer the home PCs to its 12,000 employees. Ementor signed the deal via its Danish arm Topnordic A/S. Moreover, the partners consider the option of Topnordic handling all TDC's upcoming home PC projects. (Source: Norwegian News Digests).

TDC Mobil A/S, the mobile arm of Danish telecommunications group TDC A/S has outsourced the operation and monitoring of its MobilTid and FlexConnect services to HP Danmark, a unit of U.S. computer group Hewlett Packard (HP). HP will be responsible for the technical equipment, operating systems and applications. The outsourcing followed the resignations of employees, responsible for the services, which are based on a Tandem hardware platform. The contract will strengthen HP position on the Danish telecoms outsourcing market. HP has similar contracts with telecommunications companies Nokia and Ericsson in Finland and Sweden. HP Danmark's competence centre has specialised within telecoms solutions and currently provides development and implementation services in Denmark and abroad. Contract value estimated at $5m over three years.

Danish telecoms group TDC A/S has expanded its existing outsourcing contract for IT development with Capgemini Danmark. As a result, 77 IT employees at TDC will be transferred to Capgemini Danmark over the coming two years. Capgemini Danmark will manage TDC's customer, billing and order systems within the mobile communications business. Under the original contract, signed a year earlier, Capgemini Danmark designed projects and solutions for TDC, further developed and tested at Capgemini's IT centre in India. Contract value estimated at $20m over two years.

IT Service Type Hardware integration; Maintenance/support

Application management; Infrastructure management; Maintenance/support; Network management

Application management; Infrastructure management; Maintenance/support; Processing services

IT Solution Area Integration services; Office applications Communications applications Billing; Communications applications

Primary IT Service Type IT Outsourcing

IT Contract Details

TDC and Hitachi Contract details

http://www.hds.com/customers/?tab=cus_Solution&subTab=cus_sol_file&WT.ac=us_mg_cus_fcs&_p=v#hds_049716

CONCLUSION1. The company financial and the industry

trend clearly indicate the inefficiency in their operations as the turnover ratio and the operating income have significantly decreased. Whereas a decrease of 3% is shown in operating margin.

2. They are also planning to expand and increase their geographic presence. Thus the company is look forward for a total IT outsourcing and hardware indication / support as their future primary initiative.

Page 27: KKR- Consolidated Research Reports

PagesJaunes Groupe S.A.PagesJaunes Groupe SA is a France-based company specialized in the publication and distribution of printed directories, including the PagesJaunes directory, L'Annuaire and online directories for the general public and businesses. It also provides Website creation, hosting, publication of the PagesPro BtoB directories and publication of the QuiDonc reverse directory, complementary services such as the geographic services of Mappy and, in the field of direct marketing, the sale of data files and the processing of marketing databases by PagesJaunes Marketing Services. The Company publishes directories in Spain, Luxembourg, Belgium and Morocco. It operates through its various subsidiaries, including PagesJaunes SA, PagesJaunes Marketing Services, 123people, QDQ Media, Edicom, Eurodirectory and Mappy, among others. As of December 31, 2010, the Company was 54.7%-owned by Mediannuaire.

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

386.4 394.5 468.4 390.0

Operating Margin 42.69% 41.69% 36.80% 41.82%

Asset Turnover Ratio 1.34 1.39 1.33 1.30

Total Revenue 1,494.4 1,624.5 1,762.0 1,599.2

For the six months ended 30 June 2011, PagesJaunes Groupe SA's total revenue decreased 2% to EUR535.8M. Net income for the period decreased 14% to EUR105.5M. Total revenue reflects decreased demand for the company's products and services in all of the company's business segments as well as unfavorable market conditions. Net income for the period suffered from increased depreciation expenses as well as from higher financial costs.

Financial Ratio Analysis

CONCLUSION:1. For the last 2 years the company has spread its

horizon and has engaged in heavy M&A. Thus increase in the operational activity is seen in other words increase in operations is the primary objective of the company to integrate the whole system.

2. The Balance sheet it is clearly showing a decrease in the asset turnover ratio and operating income, resulting in lowering down of revenues and operational activity.

Details of recent M&A

Page 28: KKR- Consolidated Research Reports

ProSiebenSat.1 Media AGProSiebenSat.1 Media AG is a Germany-based broadcasting company. It owns commercial television stations, pay television (TV) channels and radio networks in numerous European countries. The Company operates in three business segments, including Free TV German-speaking, Free TV International and Diversification. Free TV German-speaking segment includes the stations SAT.1, ProSieben, kabel eins and sixx, as well as the sales companies SevenOneMedia and SevenOne AdFactory. Free TV International constitute of commercial TV stations in the Benelux countries and the CEE region. The Diversification segment includes all activities not directly dependent on the TV advertising market, such as call TV, music, commerce or Pay TV. As of December 31, 2010, the Company had 190 subsidiaries in Germany, Austria, Belgium, Bulgaria, Denmark, Finland, Greece, Hungary, Luxemburg, The Netherlands, Norway, Republic of Moldavia, Romania, Sweden and the United States, among others.

2010 2009 2008 2007

Cash from Operating Activities (USD Mil)

2,128.7 2,054.8 1,987.4 2,190.4

Operating Margin 22.24% 17.15% 8.55% 14.13%

Asset Turnover Ratio 0.48 0.46 0.52 0.69

Total Revenue 3,987.5 3,856.8 4,559.8 3,732.6

For the six months ended 30 June 2011, ProSiebenSat.1 Media AG's total revenue increased 5% to EUR1.29B. Net profit from continuing operations increased 70% to EUR115.6M. Total revenue reflects increased demand for the Company's products and services in the Free TV (German-Speaking) and Free TV(International) business segments. Net profit from continuing operations benefited from improved operating margins.

After a holistic examination of IT domain and incorporation of the telecommunications domain, the network facility management C6000 from FNT was selected as an IT service management system.The core of the NFM C6000 system is formed by the central database. This is referred to within the ITIL concept as CMDB(Configuration Management Database). All processes in the area of IT access the data of the CMDB and according to the role and function the different users receive various views and the entitlements based on their tasking. The target solution offered the required investment protection for the future and was at the same time very flexible with regard to modifications and interfaces to other systems such as SAP or active network management.

Financial Ratio Analysis

CONCLUSION:It seems that the company is moving towards flexible view towards active network management and SAP system integration.Whereas the financials indicate that the company is performing well. The area of concern is the slight increase in the asset turnover ration, which is not a good indicator from the point of view of operating efficiency.

Page 29: KKR- Consolidated Research Reports

Sealy Corporation (Sealy) manufactures and markets a range of bedding products, including mattresses and mattress foundations. The Company’s bedding products are manufactured and marketed in the Americas under its Sealy, Sealy Posturepedic, Stearns & Foster and Bassett brand names. Sealy Corporation's revenues decreased 2% to $305.5M. Net income from continuing operations decreased 98% to $130K. Revenue reflects a decrease in sales from operations.

Sealy Corporation

2006 2007 2008 2009 2010

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

-7.36% -8.09%

-36.69%

-7.83%

21.83%

Operating Income

Financial Analysis

Year Operating Margin%

2006 12.08

2007 10.33

2008 8.28

2009 8.73

2010 10.24

To Aggressively manage the cost structure to improve operating margin

Over the past few years, they have implemented actions designed to reduce their fixed operating, selling, logistics and infrastructure costs, as well as product launch costs. They will also continue to leverage their scale and purchasing power to source technology and materials globally, acquire best-in-class equipment and buy in quantities sufficient to obtain the best pricing possible. Their lean approach to manufacturing also emphasizes productivity improvements that do not require intensive capital investments.

Business Issues

For more than 125 years, Sealy has been synonymous with continuous business improvement. So, the company planned to aggressively pursue a lean manufacturing initiative intended to reduce costs without sacrificing customer satisfaction. When disparate data and sources threatened the success of their initiative Sealy turned to Oracle and Global Analytics for a solution.

Page 30: KKR- Consolidated Research Reports

SolutionGlobal Analytics engaged Essbase, EIS and Hyperion Financial Reporting to deliver clean, consolidated sales and supply chain reports for Sealy that provided a single, accurate view of demand. In-depth customer ranking and a single, national, daily sales report gave Sealy new visibility into their business. Sealy is now more able to support their lean manufacturing initiative with their sales reporting processes.“Global Analytics helped us achieve our goal of Business Performance Management. Their quality, technical infrastructure, data integration and analytic resources provided exactly what we needed.” - David Twine, CIO, Sealy Corporation

Key StrategyThey expect to deliver sales growth from three sources: U.S. innerspring products, U.S. specialty products and their International markets. To accomplish this, they intend to leverage their intellectual property, scale & vertical integration to grow profitable market share, develop and launch innovative products. They believe these actions will allow them to retain their leading position in the industry.

IT Vendors Category

Microsoft Corporation/Oracle corporation

Application Development

3i Infotech Business Intelligence

Microsoft Corporation DBMS

Citrix systems, HP, IBM MiddlewareIT Budget :- $29.27Mn (31st July 2011)

Page 31: KKR- Consolidated Research Reports

Conclusion • Financials of sealy gives a clear picture that their operating income has increased rapidly in 2010 because of their initiative to manage their cost structure inorder to increase their operating margin• They have also implemented lean manufacturing initiative to reduce costs

Page 32: KKR- Consolidated Research Reports

SunGard Data Systems, Inc.

SunGard is a multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. The company has more than 25,000 customers in more than 70 countries. For the fiscal year ended 31 December 2010, SunGard Data Systems Inc.'s revenues decreased 6% to $4.99B. Net loss from continuing operations decreased 65% to $390M. Revenues reflect a decrease in professional services income and lower reimbursed expenses.

2006 2007 2008 2009 20100

100

200

300

400

500

600

700

520

634 632581

268

Operating Income (USD Mn)

Financial Analysis

Year Operating Margin %

2006 12.31

2007 12.87

2008 11.70

2009 -10.90

2010 -4.21

Key Strategy The company under its strategic growth initiatives has focused operations to develop competitive position in industry through enhancing its products and expansion of technology services, automation of transaction and information flows in financial service industry, extending relationship with existing customers, and expansion of operations in emerging markets. The company has strategic plans to upgrade and enhance its products to incorporate new technologies through continuous investments in product development activities to increased operational efficiency and comply with new industry regulations and requirements.

Data center solutions SunGard Data Center Solutions offer a comprehensive, cost-efficient way to achieve higher availability, security, efficiency and compliance within a company’s infrastructure. For more than 30 years, SunGard has been a leader in Information Availability and infrastructure resilience. This expertise is at the core of their approach to data center consulting, allowing them to provide more holistic, comprehensive solutions. Their recommendations are based on ROI and are vendor and tech nology neutral.

Page 33: KKR- Consolidated Research Reports

Bodhtree Solutions Partners with SunGard Availability Services (16th August, 2011)Bodhtree’s domains of expertise include infrastructure optimization and management consulting, premium software development and support, and discipline in producing solutions that conform to stringent standards for quality control. The company offers a compelling value proposition for clients needing cloud and on-premise infrastructure and availability services. Bodhtree will expand the SunGard ecosystem of providers, adding service and solutions to support immediate client needs. CEO of Bodhtree Solutions said “SunGard’s reputation, team, and high-value partner program led us to choose them as our partner for private and public cloud solutions for our clients with complex infrastructure needs.”

SunGard selects Nimsoft (11th Dec, 2010)SunGard has selected the Nimsoft Monitoring System (NMS) as the underlying platform for its new cloud services offering, giving its clients high availability and rapid elasticity, while providing true automation that simplifies service management.

IT ContractVendor - Ciber Inc.Start Date - 12th November 2007End Date - 12th November 2012Contract value - $US 10 millionIT service type - IT outsourcing, Application Management, IT consulting & System integrationIT solution Area - Integration services & Middleware/Applications IntegrationThe project marks one of the first implementations of Oracle SOA Suite at a higher education institution. The PeopleSoft Enterprise Campus Solutions application will replace CU's mainframe-based information data management system (IDMS) by one of the SunGard business segment - “Sungard Higher Education”. The student information systems will also integrate with CU's existing PeopleSoft Enterprise Human Capital Management and PeopleSoft Enterprise Financial Management applications, delivering even greater operational efficiency.

Page 34: KKR- Consolidated Research Reports

ConclusionInefficient operation is clearly indicated from the financials as a negative growth in the operating income and operating margin. Also SunGard Data Center Solutions offer a comprehensive, cost-efficient way to achieve higher availability, security, efficiency and compliance within a company’s infrastructure

Page 35: KKR- Consolidated Research Reports

The Nielsen Company B.V

The Nielsen Company is a leading global information and measurement company that provides clients with a thorough understanding of consumers and consumer behavior. Drawing from an extensive and long-standing foundation of consumer measurement, they deliver their clients with critical media and marketing information, analytics and industry expertise about what consumers watch (consumer interaction with media) and what consumers buy on a global and local basis. Their information and insights are designed to help their clients maintain and strengthen their market positions and identify opportunities for profitable growth. They have a presence in approximately 100 countries and hold leading market positions in many of their businesses and locations.

2007 2008 20090

50100150200250300350400450

376421

116

Operating Income (USD Mn)

Financial Analysis

Nielsen Co partners with TCS in 10yr, $1.2 Billion pact:- (October 2007)Tata Consultancy Services (TCS) has entering into an agreement for outsourcing a portion of Nielsen’s Information Technology (IT) and Operations functions worldwide. Under the ten-year agreement, valued at $US1.2 billion, TCS will assume responsibility for important IT and Operational processes and help Nielsen integrate and centralize multiple systems, technologies and processes on a global scale. TCS will provide this service to Nielsen through its full-service model, leveraging consulting, IT, infrastructure and Business Processing Outsourcing (BPO) services delivered through its Network Delivery Model (GNDMTM). The global model will help Nielsen align complex global IT and operational processes, deliver high quality services to its clients and create cost efficiencies.

Key StrategyOver the last three years, Nielsen has focused on innovation to deepen their capabilities, expand in new and emerging forms of measurement, enhance their analytical offerings and capitalize on industry trends. Their innovation strategy has enabled major advancements in data integration, emerging audience measurement and information delivery.

Page 36: KKR- Consolidated Research Reports

IT ContractVendor – TCSStart Date – 18th Oct 2007End Date – 18th Oct 2017IT Service type – Application Management, BPO finance & accounting, consulting, Infrastructure Management, Maintenance/support, offshore contractingWinning Factors – Nielsen Company has said this deal with TCS would help them streamline their IT infrastructure and application platforms and operational practices, support the development of integrated solutions and give them much greater flexibility to respond to market changes.

Page 37: KKR- Consolidated Research Reports

ConclusionThe company’s financial analysis shows that the operating income has been decreasing year over year.Their contract with TCS is helping them to streamline their IT infrastructure and application platforms and operational practices.

Page 38: KKR- Consolidated Research Reports

Zhone Technologies, Inc. designs, develops and manufactures communications network equipment for telecommunications, wireless and cable operators worldwide. Its products and solutions allow network service providers to migrate from traditional circuit-based networks to packet-based networks. In addition to its product offerings, Zhone launched the flagship MXK IP Multi-service Terabit Access Concentrator (MXK) and multiple new Optical Line Terminal (OLT) and outdoor units. The company’s revenues increased 2% to $129M. Net loss decreased 52% to $4.8M.

Zhone Technologies Inc.

Year Operating Margin(%)

2006 -73.17

2007 -6.47

2008 -62.55

2009 -6.87

2010 -3.02

Financial Analysis

Key StrategyThe key element of Zhone’s strategy is to “Expand their infrastructure to meet service provider needs”. By combining advanced, computer-aided design, test and manufacturing systems with experienced, customer-focused management and technical staff, they believe that they have established the critical mass required to fully support global service provider requirements. They with continue to expand their infrastructure through ongoing development and strategic relationships, continuously improving quality, reducing costs and accelerating delivery of advanced solutions.

Page 39: KKR- Consolidated Research Reports

Technology Front

They believe their future success is built upon their investment in the development of advanced technologies. SLMS is based on a number of technologies that provide sustainable advantages, including the following:

Services-Centric Architecture: SLMS has been designed from inception for the delivery of multiple classes of subscriber services (such as voice, data or video distribution), rather than being based on a particular protocol or media. Their SLMS products are built to interoperate in networks supporting packet, cell and circuit technologies. This independence between services and the underlying transportation is designed to position their products to be able to adapt to future transportation technologies within established architectures and to allow their customers to focus on service delivery

Network Management and Operations: Their ZMS product provides management capabilities that enable rapid, cost-effective, and secure control of the network; standards-based interfaces for seamless integration with supporting systems

Page 40: KKR- Consolidated Research Reports

ConclusionFinancial Analysis shows continuos negative growth in operation margin. But their strategy is to expand their infrastructure to meet service provider needs through ongoing development and strategic relationships, continuously improving quality & reducing costs. Their ZMS product helps them to reduce costs

Page 41: KKR- Consolidated Research Reports

Toys "R" Us, Inc.

They are the leading global specialty retailer of toys and juvenile products, and the only specialty toy and juvenile products retailer that operates on a national scale in the United States. They sell a variety of products through their retail locations and the Internet. Their brand names are highly recognized in North America, Europe and Asia, their broad range of product offerings, geographic footprint and strong vendor relationships account for their market-leading position and distinguish them from the competition. Operations in 49 states in the United States and 717 retail stores in 33 countries outside the United States. During the fiscal year ended January 30, 2010, they generated Net sales of $13.6 billion & revenue turnover is 13,724 Million.

Technology Front

Toys “R” Us chose Telecity group to provide fully managed hosting, security & back-up. Toys “R” Us worked with Telecity group to design and implement an infrastructure to suit its capacity needs, including fully managed Linux servers, connectivity, load balancing & managed back-up for business continuity. Managed Firewall & intrusion detection prevention was also included to help them protect the website & customer information.

Accenture helps Toys “R” Us improve store labor and inventory management efficiency, significantly improving operating costs and top line performance

Accenture has aided Toys “R” Us in meeting it’s operational and customer demand needs, Accenture gathered a team of 15 retail and technical professionals skilled in store operations, business analysis, project management, customer relations, supply chain, employee productivity and training. Together, with more than 60 Toys “R” Us in-house experts, the team created a solutions and implementation approach to improve store efficiency in the areas of labor and inventory management that significantly impacted operating costs and top line performance.

Page 42: KKR- Consolidated Research Reports
Page 43: KKR- Consolidated Research Reports

Conclusion

• Telicity group is providing them with security & back up, also helped toys to design & implement an infrastructure.

• The contract with Accenture also helped them to improve their operational efficiencies

Page 44: KKR- Consolidated Research Reports

Legg Mason, Inc. is a holding company. Acting through its subsidiaries, the Company provides investment management and related services to institutional and individual clients, company-sponsored mutual funds and other pooled investment vehicles. Legg Mason offers these products and services directly and through various financial intermediaries. Legg Mason operates its business as two divisions: Americas and International. Within each division, Legg Mason provides services through a number of asset managers, each of which generally markets its products and services under its own brand name. For the fiscal year ended 31 March 2011, Legg Mason, Inc.'s revenues increased 6% to $2.78B. Net income increased 24% to $253.9M.

Legg Mason, Inc.

Year Operating Margin (%)

2006 25.7

2007 23.67

2008 22.66

2009 -19.93

2010 12.19

2006 2007 2008 2009

-200

-150

-100

-50

0

50

100

38.97 51.28

2.13

-163.72

Operating Income (%)

Financial Analysis

Christopher Arndt-Kohlway is the Vice President, Technology Research and Development, Legg Mason & Co., LLC. He was one among the speakers of cloud symposium held at New York on May 17th, 2011. Since joining Legg Mason, Mr. Arndt-Kohlway has been focused on infrastructure initiatives to support its transition from regional brokerage to global asset manager. He is currently working on evaluating strategies to reduce infrastructure costs including migration of applications to cloud computing platforms.

Page 45: KKR- Consolidated Research Reports
Page 46: KKR- Consolidated Research Reports

Conclusion

Legg Mason’s financial analysis shows that their operating efficiencies has been fluctuating over years

Page 47: KKR- Consolidated Research Reports

Yageo Corporation specializes in the research, development, manufacture and sale of passive component solutions and related equipment. The Company provides multi-layer chip capacitors, chip resistors, high-frequency antenna, electrolytic capacitors, inductors, conductor resistance and magnetic substances, as well as related equipment, materials and half finished products. It distributes its products primarily in Asia, Europe and the Americas. For the fiscal year ended 31 Dec 2010, Yageo Corporation's total revenues increased 43% to NT$27.31B. The Company's net income totaled NT$4.15B.

Yageo Corporation

Year Operating Margin (%)

2006 11.06

2007 10.56

2008 6.01

2009 6.53

2010 17.89

2006 2007 2008 2009 201002468

101214161820

14.212.5

8.17.1

17.9

Operating Income (%)

Financial Analysis

Page 48: KKR- Consolidated Research Reports
Page 49: KKR- Consolidated Research Reports

Conclusion

Yageo Corporation financial analysis shows their operating efficiencies has been increased in the year 2010

Page 50: KKR- Consolidated Research Reports

Dalmia Cement (Bharat) Limited is an India-based company. The Company operates through four business segments: own manufactured cements, own manufactured sugar, power and others. The own manufactured cement and sugar segment includes manufacture and marketing of cement and sugar. The power segment includes generation and sale of power. Power is also used for captive consumption by the Company. The others segment includes magnesite, distillery, travel, electronics and refractory activities of the Company. For the fiscal year ended 31 March 2010, Dalmia Cement (Bharat) Limited's revenues increased 29% to RS22.03B. Net income increased 26% to RS1.77B.

Dalmia Cement

Year Operating Margin(%)

2006 16.83

2007 25.94

2008 26.66

2009 12.82

2010 9.112006 2007 2008 2009 2010

-100

-50

0

50

100

150

200

250203.82

170.17

48.13

-50.35

-8.02

Operating Income(%)

Financial Analysis

Key StrategyVice President of Dalmia says, with players in the industry investing more for building up brand equity, it is necessary for small players to work out strategies to sustain competition in the market. "In our company we are following a four-pronged strategy giving more weightage to areas like marketing, information technology, people and research and development". By introducing innovative marketing methods such as linking various players in the business like dealers, influencers and consumers and also by implementing direct marketing approach it will be easy for any manufacturer to focus more on the customers. The other major area of focus for the company is on the vibrant information technology (IT) industry. The company has been making substantial investments in this segment for creating web-based business processes and also in the use of the technology in supply chain management and for managing databases. The company is presently experimenting with e-commerce models to be in line with the developments in the industry.

Page 51: KKR- Consolidated Research Reports
Page 52: KKR- Consolidated Research Reports

Conclusion

•The financial Analysis shows that the operating income has shown a decline.

•The major strategy & focus of the company is on the vibrant information technology (IT) industry. So the company is making investments in supply chain management, e-commerce, web based business

Page 53: KKR- Consolidated Research Reports

Magma Fincorp offers secured finance for new and used cars, as well as multi-utility vehicles in the rural, semi-urban and urban markets. The Company provides construction equipment finance across the retail and customer segments. It provides loans on used commercial vehicles and construction equipment. The services provided by the Company include commercial vehicle finance, construction equipment finance, car and utility vehicle finance, small and medium enterprise (SME) loans and insurance. The subsidiary of the Company is Magma ITL Finance Limited. For the nine months ended 31 December 2010, Magma Fincorp Ltd.'s revenues increased 19% to RS6.04B. Net income increased 72% to RS757.5M.

Magma Fincorp

Financial analysis

Magma’s business runs on an Oracle-based centralized database and application system (three-tier architecture), extensive VPN connectivity across key branches and CITRIX solution, along with NetScaler, making it possible for remote branches to access realtime information. Information Technology (IT) has facilitated retail financing business processes across their vast branch network. The company has invested significantly in maintaining and updating its technological platform over the years.

IT Initiatives

Application•Magma implemented an Oracle-based software, which replicated the data from the main server to the DR server in real time so that all reports are generated from the DR server, ensuring smooth and seamless operations 24x7 and distributed users load•Extended the IT network for facilitating credit and operations to 18 new branches, improving the turnaround time for processing leads

Infrastructure•Increased server capacity for managing increased business volumes•Took initiative to benchmark the existing IT infrastructure, security framework and processes with the best in the world. The project will include a gap analysis and provide relevant solutions•To extend its IT infrastructure to 19 new branches

Page 54: KKR- Consolidated Research Reports

Way Ahead

Going forward, they are planning to implement new technologies & applications to automate various processes of the organization

Create an IT backbone for Magma HDI General Insurance business Upgrade the existing ERP Application System

Cost Management

Magma invested in technology, systems and processes to rationalize costs.

Conclusion

The company’s major initiative is to extend its infrastructure to 19 New branches

Page 55: KKR- Consolidated Research Reports

Unisteel Technology is a solution provider and fabricator of precision components and assemblies. The company offers a range of products in the areas of precision fasteners, stamped components, springs, engineering plastics, polymer optics and surface engineering. The company's products include plastics, coil spring, fasteners, stamping and machining products. The company primarily operates in Singapore.

Unisteel Technology Limited

Page 56: KKR- Consolidated Research Reports

Conclusion

The key risks of Unisteel's business are price cuts and raw material cost pressure. Unisteel's main advantage is the low material content

Page 57: KKR- Consolidated Research Reports

TASC

TASC is a leading provider of advanced systems engineering, integration and decision support services to the intelligence, defense, homeland security and other federal domains. Their proven services and solutions help solve real - world security challenges and threats. They are sophisticated problem solvers specialized in designing lasting solutions to some of their nation's most difficult challenges. They provide mission focused end-to-end systems engineering and analytic expertise to enhance operationally deployed systems, guide the acquisition of complex systems under development, architect systems and technologies of the future.

TASC Acquires Texeltek - cloud solutions provider:- (June 2011)

TASC Inc. has made a cloud solutions provider its first acquisition since being spun out of Northrop Grumman Corp. in 2009. The deal for TexelTek expands TASC’s capabilities in cloud computing, network consolidation and virtualization, data analytics, and cyber security. TexelTek will strengthen TASC’s ability to deliver high demand capabilities and sophisticated thinking to its U.S. government customers across the country. The acquisition brings some new skills to TASC, particularly in the cloud computing areas, and also bolsters its portfolio in areas it is already working such as information assurance and converged networks.

TASC Selects Deltek’s Costpoint:- (July 2010)

TASC has selected Deltek, a provider of enterprise applications software and solutions, to support its core contract and billing management, financial management and employee management operations.

Conclusion

Acquisition of telextel has helped TASC to expand its capabilities in cloud computing, network consolidation and virtualization, data analytics, and cyber security.

Page 58: KKR- Consolidated Research Reports

Visant Corporation

Visant Corporation is a wholly owned subsidiary of Visant holding corp. They are a leading marketing & publishing services enterprise servicing the school affinity, direct marketing, fragrance & cosmetics, and educational & trade mark segments. Visant was formed to create a platform of businesses with leading positions in attractive end market segments and to establish a highly experienced management team that could leverage a shared services infrastructure and capitalize on margin and growth opportunities.

2006 2007 2008 2009 2010185

190

195

200

205

210

215

220

203.4

218.1

210.8

202.2

197.8

Operating Income (USD Mn)

Financial Analysis

Key StrategyAs part of their business strategy, they may continue to pursue strategic acquisitions and dispositions to leverage their existing infrastructure, expand their geographic reach, broaden their product and service offerings and focus on their higher growth businesses. But Acquisitions and dispositions equally involve a number of risks with present financial, managerial and also operational challenges.

Conclusion

Financial Analysis clearly shows the decline in its operating income

Page 59: KKR- Consolidated Research Reports

Bharti Infratel Limited

Bharti Infratel Limited provides passive telecom infrastructure services. The company owns, deploys, and manages telecom towers and communication structures for telecom operators and wireless service providers. It currently has operations in 18 Indian states. The company was founded in 2006 and is based in Gurgaon, India. Bharti Infratel Limited operates as a subsidiary of Bharti Airtel Ltd. Bharti Infratel and Indus Towers are the largest passive infrastructure service providers for telecom services in India.

IBM to provide tech solution to Bharti Infratel:- (11th February, 2011)Bharti Infratel, the passive infrastructure arm of Bharti Airtel, said it has selected IBM to provide a technological solution that will enable the tower company to monitor infrastructure across 11 telecom circles. IBM will combine its sensors, data tracking and analytics solutions to offer real-time visibility, and centrally monitor and manage the distributed tower infrastructure of Bharti Infratel Ltd. IBM will provide 'intelligent site operations' at more than 32,000 Bharti Infratel tower-sites spread across 11 telecom circles in India. IBM already handles the technology side of telecom operator Bharti Airtel's operations in India and Africa. This solution will help Bharti Infratel monitor and manage its large and distributed tower infrastructure, as well as centrally orchestrate and track its operations.

Green Telecom : Bharti Infratel plans 2,000 renewable energy sites:- (August 2010)In an endeavor towards energy efficiency and cost reduction, Bharti Infratel has set an initial target of deploying 2000 renewable energy sites. In the first phase, 500 sites were completed by March 2010 and balance of 1500 sites will be installed during next financial year 2010-11. This initiative, which is the first of its scale for an Indian Passive Telecom Infrastructure provider, would result in estimated savings of US$16.67 million per year. The project would also result in an estimated reduction of 58,170 tonnes of CO2 emissions per year.

Conclusion

IBM helps Bharti Infratel in providing various technological solutions

Page 60: KKR- Consolidated Research Reports

U.S. Foodservice is one of America’s leading foodservice distributors and food safety advocates, offering more than 350,000 national brand products and its own high-quality private label items, ranging from meats to produce to frozen foods. The company proudly employs approximately 25,000 associates in more than 60 locations nationwide. U.S. Foodservice provides the finest quality food and related products to more than 250,000 customers, including independent restaurants, government operations, healthcare and hospitality entities, educational institutions and prominent multi-unit restaurant companies. With approximately $19 billion in annualized revenue, the company is headquartered in Rosemont.

U.S. Foodservice, Inc.