What rates of return do you expect for equity holders and each tranche of senior debt and subordinated debt for this investment given the forecasted financials and capital structure Is this rate of return sufficient from Butler Capital's perspective Are the rates of return fair for the risks being taken from the perspective of the markets You should consider the assumptions for margin improvements and growth in Exhibit 18 of the case in answering these questions Autodistribution Historical Consolidated P L Thousand of FFr 1994 1995 1996 1997 1998 Turnover (n 1 perimeter) n d 4,323,000 4,498,000 4,805,000 5,263,000 n 1 without acquired n 1 turnover n s n s 0 60 3 80 4 90 n 1 including acquired n 1 turnover n s n s 4 00 6 80 9 50 Turnover of purchased companies n d 200,243 129,372 211,576 137,532 Total net turnover 4,228,968 4,523,243 4,627,372 5,016,576 5,400,532 n 1 n s 7 00 2 30 8 40 7 70 2,617 188 424 Raw material and goods purchases 2,981,168 3,166,984 3,208,175 3,463,077 3,699,596 Gross margin 1,247,800 1,353,642 1,419,385 1,553,923 1,700,936 n 1 n s 8 50 4 90 9 50 9 50 Other variable costs 346,775 368,000 381,872 421,463 441,165 Value added 901,025 985,642 1,037,513 1,132,460 1,259,771 n 1 n s 9 40 5 30 9 20 11 20 Personnel and social charges 633,009 662,100 713,079 787,251 833,358 Employee profit sharing 6,436 8,739 7,830 8,638 11,627 Taxes 47,318 55,709 56,402 64,326 69,687 State fundings 941 1,912 1,675 Other products and expenses 17,301 20,772 11,262 17,730 24,710 EBITDA 231,563 280,807 250,852 291,651 369,809 n 1 n s 21 30 10 70 16 30 26 80 Depreciation allowance 44,404 46,130 51,196 58,784 64,889 Risk allowance 80,055 85,625 87,384 101,153 100,286 Resumptions transfers of ch 86,277 92,281 120,170 114,795 105,939 EBIT 193,381 241,332 232,442 246,509 310,573 n 1 n s 24 80 3 70 6 10 26 00 Operations in common 317 342 19 74 226 Cash discount on purchases n d n d 22,000 23,810 22,500 Other financial income 33,052 38,405 8,682 6,502 8,324 Financial charges 50,763 46,814 30,823 20,167 13,958 Financial depreciation 1,167 5,623 4,055 579 Financial result 17,394 6,900 5,463 14,126 17,671 EBIT after interest 175,987 234,432 237,905 260,635 328,244 n 1 n s 33 20 1 50 9 60 25 90 Extraordinary profits 21,027 27,575 41,366 15,725 27,814 Extraordinary expenses 34,894 27,442 35,053 21,949 19,904 Extraordinary allowance 24,495 25,186 620 520 Extraordinary result 13,867 24,362 18,873 6,844 8,430 Tax penalty 25000 Income tax 54,829 85,916 92,735 115,592 145,033 Net result before goodwill amort 107,291 124,154 126,297 138,199 166,641 n 1 n s 15 70 1 70 9 40 20 60 Goodwill amortization 3,334 4,761 5,810 15,121 13,624 Consolidated net result 103,957 119,393 120,487 123,078 153,017 n 1 n s 14 80 0 90 2 20 24 30 Minority interests 1,122 1,116 946 528 4 Group consolidated net result 102,835 118,277 121,433 123,606 153,013 n 1 n s 15 00 2 70 1 80 23 80 exhibit 18 Butler Capital Partners' Assumptions for AD 1999 2000 2001 2002 2003 2004 2005 2006 Growth Growth Organic Sales growth 2 00 3 90 3 70 3 50 3 00 2 50 2 50 2 50 Sales from acquisitions 378,457 582,407 676,137 762,195 778,440 871,750 701,900 706,600 Margins Gross profit 32 20 33 20 34 20 35 20 36 00 36 30 36 50 36 60 EBITDA 7 50 7 75 7 98 8 23 8 63 8 70 8 83 8 93 Depreciation 1 20 1 23 1 23 1 23 1 23 1 23 1 23 1 23 Financial income 3,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Interest Expense CapEx Debt 1 875 1 875 1 875 1 875 1 875 1 875 1 875 1 875 Other debts 0 75 0 75 0 75 0 75 0 75 0 75 0 75 0 75 Goodwill 16,000 20,000 25,000 29,000 34,000 40,000 45,000 50,000 Extraordinary expenses 5,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 Other Information Tax rate 40 00 36 70 36 70 36 70 36 70 36 70 36 70 36 70 Net working capital 55 days 55 days 55 days 55 days 55 days 55 days 55 days 55 days CapEx 60,000 68,000 77,000 88,000 99,000 110,000 121,000 132,000 Acquisitions multiple 0 275x 0 275x 0 300x 0 300x 0 350x 0 350x 0 350x 0 350x Debt levels CapEx debt 50,000 250,000 400,000 400,000 400,000 400,000 400,000 0 Other 215,000 255,000 355,000 445,000 625,000 820,000 890,000 910,000

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What rates of return do you expect for equity holders and each tranche of senior debt and subordinated debt for this investment given the forecasted

What rates of return do you expect for equity holders and each tranche of senior debt and subordinated debt for this investment given the forecasted financials and capital structure?
- Is this rate of return sufficient from Butler Capital's perspective?
- Are the rates of return fair for the risks being taken from the perspective of the markets?
- You should consider the assumptions for margin improvements and growth in Exhibit 18 of the case in answering these questions.

Autodistribution - Historical Consolidated P/L
Thousand of FFr	1994	1995	1996	1997	1998
Turnover (n-1 perimeter)	n.d.	4,323,000	4,498,000	4,805,000	5,263,000
% / n-1 without acquired n-1 turnover	n.s.	n.s.	-0.60%	3.80%	4.90%
% / n-1 including acquired n-1 turnover	n.s.	n.s.	4.00%	6.80%	9.50%
Turnover of purchased companies	n.d.	200,243	129,372	211,576	137,532
Total net turnover	4,228,968	4,523,243	4,627,372	5,016,576	5,400,532
% / n-1	n.s.	7.00%	2.30%	8.40%	7.70%
	-	-2,617	188	424	-
Raw material and goods purchases	-2,981,168	-3,166,984	-3,208,175	-3,463,077	-3,699,596
Gross margin	1,247,800	1,353,642	1,419,385	1,553,923	1,700,936
% / n-1	n.s.	8.50%	4.90%	9.50%	9.50%
Other variable costs	-346,775	-368,000	-381,872	-421,463	-441,165
Value added	901,025	985,642	1,037,513	1,132,460	1,259,771
% / n-1	n.s.	9.40%	5.30%	9.20%	11.20%
Personnel and social charges	-633,009	-662,100	-713,079	-787,251	-833,358
Employee profit sharing	-6,436	-8,739	-7,830	-8,638	-11,627
Taxes	-47,318	-55,709	-56,402	-64,326	-69,687
State fundings	-	941	1,912	1,675	-
Other products and expenses	17,301	20,772	-11,262	17,730	24,710
EBITDA	231,563	280,807	250,852	291,651	369,809
% / n-1	n.s.	21.30%	-10.70%	16.30%	26.80%
Depreciation allowance	-44,404	-46,130	-51,196	-58,784	-64,889
Risk allowance	-80,055	-85,625	-87,384	-101,153	-100,286
Resumptions & transfers of ch.	86,277	92,281	120,170	114,795	105,939
EBIT	193,381	241,332	232,442	246,509	310,573
% / n-1	n.s.	24.80%	-3.70%	6.10%	26.00%
Operations in common	317	342	-19	-74	226
Cash discount on purchases	n.d.	n.d.	22,000	23,810	22,500
Other financial income	33,052	38,405	8,682	6,502	8,324
Financial charges	-50,763	-46,814	-30,823	-20,167	-13,958
Financial depreciation	-	1,167	5,623	4,055	579
Financial result	-17,394	-6,900	5,463	14,126	17,671
EBIT after interest	175,987	234,432	237,905	260,635	328,244
% / n-1	n.s.	33.20%	1.50%	9.60%	25.90%
Extraordinary profits	21,027	27,575	41,366	15,725	27,814
Extraordinary expenses	-34,894	-27,442	-35,053	-21,949	-19,904
Extraordinary allowance	-	-24,495	-25,186	-620	520
Extraordinary result	-13,867	-24,362	-18,873	-6,844	8,430
Tax penalty					-25000
Income tax	-54,829	-85,916	-92,735	-115,592	-145,033
Net result before goodwill amort.	107,291	124,154	126,297	138,199	166,641
% / n-1	n.s.	15.70%	1.70%	9.40%	20.60%
Goodwill amortization	-3,334	-4,761	-5,810	-15,121	-13,624
Consolidated net result	103,957	119,393	120,487	123,078	153,017
% / n-1	n.s.	14.80%	0.90%	2.20%	24.30%
Minority interests	1,122	1,116	-946	-528	4
Group consolidated net result	102,835	118,277	121,433	123,606	153,013
% / n-1	n.s.	15.00%	2.70%	1.80%	23.80%

exhibit 18:

Butler Capital Partners' Assumptions for AD
	1999	2000	2001	2002	2003	2004	2005	2006
Growth
Growth Organic Sales growth	2.00%	3.90%	3.70%	3.50%	3.00%	2.50%	2.50%	2.50%
Sales from acquisitions	378,457	582,407	676,137	762,195	778,440	871,750	701,900	706,600

Margins
Gross profit	32.20%	33.20%	34.20%	35.20%	36.00%	36.30%	36.50%	36.60%
EBITDA	7.50%	7.75%	7.98%	8.23%	8.63%	8.70%	8.83%	8.93%
Depreciation	1.20%	1.23%	1.23%	1.23%	1.23%	1.23%	1.23%	1.23%
Financial income	3,000	2,000	2,000	2,000	2,000	2,000	2,000	2,000
Interest Expense
CapEx Debt	1.875%	1.875%	1.875%	1.875%	1.875%	1.875%	1.875%	1.875%
Other debts	0.75%	0.75%	0.75%	0.75%	0.75%	0.75%	0.75%	0.75%
Goodwill	16,000	20,000	25,000	29,000	34,000	40,000	45,000	50,000
Extraordinary expenses	5,000	8,000	9,000	10,000	11,000	12,000	13,000	14,000

Other Information
Tax rate	40.00%	36.70%	36.70%	36.70%	36.70%	36.70%	36.70%	36.70%
Net working capital	55 days	55 days	55 days	55 days	55 days	55 days	55 days	55 days
CapEx	60,000	68,000	77,000	88,000	99,000	110,000	121,000	132,000
Acquisitions multiple	0.275x	0.275x	0.300x	0.300x	0.350x	0.350x	0.350x	0.350x
Debt levels
CapEx debt	50,000	250,000	400,000	400,000	400,000	400,000	400,000	0
Other	215,000	255,000	355,000	445,000	625,000	820,000	890,000	910,000