Using the information provided in this question, ANSWER THE FOLLOWING QUESTIONS USING EXXONMOBIL AS THE COMPARABLE FIRM. BE SURE TO SHOW YOUR WORK BY TYPING SOME OF THE NUMBERS USED IN YOUR CALCULATIONS! PART A: KINDER MORGAN ANNOUNCED THEY ARE PURCHASING EL PASO. WHAT IS THE EQUITY VALUE OF EL PASO USING THE EBITDA MULTIPLE METHOD OF VALUATION? SHOW YOUR WORK TO RECEIVE CREDIT! Use EXXONMOBIL as the comparable. PART B: WHAT IS THE EQUITY VALUE OF EL PASO USING THE P/E MULTIPLE METHOD? SHOW YOUR WORK TO RECEIVE CREDIT. Again, use EXXONMOBIL as the comparable. PART C: KINDER MORGAN ANNOUNCED THEY ARE PAYING $25.00 PER SHARE FOR EL PASO. BASED ON YOUR CALCULATIONS, IS THIS A GOOD DEAL FOR THE SHAREHOLDERS OF EL PASO? The information on this page is to be used in the problem on relative valuation. Financial Information for El Paso and comparable firms (Values in Thousands) Company El Paso Corporation Noble Energy EOG Resources EconMobil Income Statement Total Revenue $ 4,860,000 $ 3.763,000 $ 10.126,1155 458,429,000 Operating Expenses Selling General, & Administrative $ $ 1341,000) $ (304,811) $ (14,983,000 Depreciation, Depletion, and Amortization $ 11,116,000) 1965,000 $ 12,516,381) $ 125,583,000) Others $ 12.612.000) (1.717.000) 5.191.614) $ (354 359,000) Total Operating Expenses $ B.728,000) 03.033.000) 18.012806) $ 394,925,000) Operating Income/Loss $ 1,132.000 S 7:40,000 5 2.113,3095 73,504,000 Income from Continuing Operations Total other income/expenses $ 193,000 $ 40,000 $ 6,8535 Earnings Before Interest and Taxes $ 1,325,000 $ 780,000 $ 2,120,1625 73,504,000 Interest Expense $ (948,000) 165,000 $ (210.363) $ (247.000) Income before Tax S 377.000 $ 715.000 1.909,7995 73.257,000 Income Tax Benefit (Expense) $ 50.000 $ 262.000) 1818,676) 5 31,055,000 Net Income from Continuing Operations $ 4270005 453.000.000 5 1,091,123 $ 42.206,000 Net Income $ 427,000 $ 453.000 5 1,091,1235 $2,206,000 13.068,000 Balance Sheet Current Assets Cash & Cash Equivalents Short-term Investments Net receivables Inventory Other Current Assets Total Current Assets Long-Term Investments Property. Plant, & Equipment Goodwill & Other Intangible Assets Other Assets Total Assets $ $ $ 5 $ $ $ $ $ $ S 194,000 5 85,000 $ 559.000 175,000 $ 564,000 1,577,000 S 2,739,000 $ 19,170,000 $ $ 828,000 $ 24,314,000 $ 1455.000 $ $ 783.0005 $ 180.000 $ 248.000 $ $ 12,782,000 $ 696,000 5 548.000 $ 16,444,000 $ 615,726 S $ 1.451,227 $ 590,594 5 596,391 $ 3,253,938 $ 5 21,288,824 5 $ 296,0355 26.838,7975 38,542,000 15,024,000 5.229,000 72,963,000 34,333,000 214,664,000 9,092,000 331,052,000 S $ $ s $ $ 5 836,000 5 362,000 $ 950.000 5 2,148.000 $ 12,605,000 $ 2.426000 $ 17,179,000 $ 1.300,000 5 S 925,000 $ 2.268.000 $ 4.100,000 $ 2811.000 $ 94179,000 $ 2,033,615 5 $ 488.704 $ 2,522,319 5 5.009.1665 4,566,408 $ 12.1978935 57,067,000 7,711,000 12.727,000 77,505,000 9,322.000 83.481,000 170308,000 Liabilities & Stockholder's Equity Current Liabilities Accounts Payable Short/Current long-term debt Other current abilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Stockholder's Equity Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder's Equity Noncontrolling interests Total Stockholder's Equity Total Liabilities and Stockholder's Equity 9,512,000 (176 $32,000) $ $ $ $ $ S 5 $ 2,362,000 $ $ (283,000 $ 5,364,000 5 (2,089.000) $ 2,781.000 $ 43540005 24,314,000 $ 656,000 5 4.850.000 $ 1638,000) 5 5 2.397.000 $ S 7,265,000 $ 16,464,000 5 202.6935 9,789.3455 (24,932) $ S 2.673,798 $ $ 12.540,000 $ 24338,7975 321,816,000 6.348.000 160744.000 331,052.000 Other Financial Data Exploration Expenses (thousands) Shares Outstanding thousands of shares) Year-end 2011 closing price (S/share) Market Capitalitation (thousands) $ $ $ $ 1,867,000 $ 772,850 $ 26.56 $ 20,527.1025 279.000 $ 1769595 94.95 36,667,7605 171.658S 209.0805 9.19 $ 26.620.965 $ 2.081.000 4,713,221 8430 397 324 530 Using the information provided in this question, ANSWER THE FOLLOWING QUESTIONS USING EXXONMOBIL AS THE COMPARABLE FIRM. BE SURE TO SHOW YOUR WORK BY TYPING SOME OF THE NUMBERS USED IN YOUR CALCULATIONS! PART A: KINDER MORGAN ANNOUNCED THEY ARE PURCHASING EL PASO. WHAT IS THE EQUITY VALUE OF EL PASO USING THE EBITDA MULTIPLE METHOD OF VALUATION? SHOW YOUR WORK TO RECEIVE CREDIT! Use EXXONMOBIL as the comparable. PART B: WHAT IS THE EQUITY VALUE OF EL PASO USING THE P/E MULTIPLE METHOD? SHOW YOUR WORK TO RECEIVE CREDIT. Again, use EXXONMOBIL as the comparable. PART C: KINDER MORGAN ANNOUNCED THEY ARE PAYING $25.00 PER SHARE FOR EL PASO. BASED ON YOUR CALCULATIONS, IS THIS A GOOD DEAL FOR THE SHAREHOLDERS OF EL PASO? The information on this page is to be used in the problem on relative valuation. Financial Information for El Paso and comparable firms (Values in Thousands) Company El Paso Corporation Noble Energy EOG Resources EconMobil Income Statement Total Revenue $ 4,860,000 $ 3.763,000 $ 10.126,1155 458,429,000 Operating Expenses Selling General, & Administrative $ $ 1341,000) $ (304,811) $ (14,983,000 Depreciation, Depletion, and Amortization $ 11,116,000) 1965,000 $ 12,516,381) $ 125,583,000) Others $ 12.612.000) (1.717.000) 5.191.614) $ (354 359,000) Total Operating Expenses $ B.728,000) 03.033.000) 18.012806) $ 394,925,000) Operating Income/Loss $ 1,132.000 S 7:40,000 5 2.113,3095 73,504,000 Income from Continuing Operations Total other income/expenses $ 193,000 $ 40,000 $ 6,8535 Earnings Before Interest and Taxes $ 1,325,000 $ 780,000 $ 2,120,1625 73,504,000 Interest Expense $ (948,000) 165,000 $ (210.363) $ (247.000) Income before Tax S 377.000 $ 715.000 1.909,7995 73.257,000 Income Tax Benefit (Expense) $ 50.000 $ 262.000) 1818,676) 5 31,055,000 Net Income from Continuing Operations $ 4270005 453.000.000 5 1,091,123 $ 42.206,000 Net Income $ 427,000 $ 453.000 5 1,091,1235 $2,206,000 13.068,000 Balance Sheet Current Assets Cash & Cash Equivalents Short-term Investments Net receivables Inventory Other Current Assets Total Current Assets Long-Term Investments Property. Plant, & Equipment Goodwill & Other Intangible Assets Other Assets Total Assets $ $ $ 5 $ $ $ $ $ $ S 194,000 5 85,000 $ 559.000 175,000 $ 564,000 1,577,000 S 2,739,000 $ 19,170,000 $ $ 828,000 $ 24,314,000 $ 1455.000 $ $ 783.0005 $ 180.000 $ 248.000 $ $ 12,782,000 $ 696,000 5 548.000 $ 16,444,000 $ 615,726 S $ 1.451,227 $ 590,594 5 596,391 $ 3,253,938 $ 5 21,288,824 5 $ 296,0355 26.838,7975 38,542,000 15,024,000 5.229,000 72,963,000 34,333,000 214,664,000 9,092,000 331,052,000 S $ $ s $ $ 5 836,000 5 362,000 $ 950.000 5 2,148.000 $ 12,605,000 $ 2.426000 $ 17,179,000 $ 1.300,000 5 S 925,000 $ 2.268.000 $ 4.100,000 $ 2811.000 $ 94179,000 $ 2,033,615 5 $ 488.704 $ 2,522,319 5 5.009.1665 4,566,408 $ 12.1978935 57,067,000 7,711,000 12.727,000 77,505,000 9,322.000 83.481,000 170308,000 Liabilities & Stockholder's Equity Current Liabilities Accounts Payable Short/Current long-term debt Other current abilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Stockholder's Equity Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder's Equity Noncontrolling interests Total Stockholder's Equity Total Liabilities and Stockholder's Equity 9,512,000 (176 $32,000) $ $ $ $ $ S 5 $ 2,362,000 $ $ (283,000 $ 5,364,000 5 (2,089.000) $ 2,781.000 $ 43540005 24,314,000 $ 656,000 5 4.850.000 $ 1638,000) 5 5 2.397.000 $ S 7,265,000 $ 16,464,000 5 202.6935 9,789.3455 (24,932) $ S 2.673,798 $ $ 12.540,000 $ 24338,7975 321,816,000 6.348.000 160744.000 331,052.000 Other Financial Data Exploration Expenses (thousands) Shares Outstanding thousands of shares) Year-end 2011 closing price (S/share) Market Capitalitation (thousands) $ $ $ $ 1,867,000 $ 772,850 $ 26.56 $ 20,527.1025 279.000 $ 1769595 94.95 36,667,7605 171.658S 209.0805 9.19 $ 26.620.965 $ 2.081.000 4,713,221 8430 397 324 530