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Scenario B — Projections Including Interest Expense and Excluding NOLs



                                                                              Year
                                                            1        2         3        4          5

                    Earnings Before Interest & Taxes        $200     $250      $300     $350        $400
                    Interest Expense                        $100     $100      $100     $100        $100
                    Earnings Before Taxes                   $100     $150      $200     $250        $300
                    Tax Rate                                 40%      40%      40%       40%         40%
                    Beginning NOL                            $ —      $ —      $ —      $ —          $ —

                    NOL Used                                 $ —      $ —      $ —      $ —          $ —
                    Taxes With NOL Utilization               $40      $60       $80     $100        $120
                    Cumulative Taxes                         $40     $100      $180     $280        $400



                    Tax Benefit of Interest                  $40      $40       $40      $40         $40
                    Cumulative Tax Benefit of Interest       $40      $80      $120     $160        $200



                    Tax Benefit of NOL                       $ —      $ —      $ —      $ —          $ —
                    Cumulative Tax Benefit of NOL            $ —      $ —      $ —      $ —          $ —




               Note that the cumulative tax benefit of interest expense is $200 in Scenario B.


                             Scenario C — Projections Including Interest Expense and NOLs



                                                                              Year

                                                              1        2        3        4         5
                      Earnings Before Interest & Taxes        $200     $250     $300     $350      $400
                      Interest Expense                        $100     $100     $100     $100      $100
                      Earnings Before Taxes                   $100     $150     $200     $250      $300
                      Tax Rate                                 40%      40%      40%      40%      40%

                      Beginning NOL                           $500     $400     $250      $50      $ —
                      NOL Used                                $100     $150     $200      $50      $ —
                      Taxes With NOL Utilization              $ —      $ —       $ —      $80      $120
                      Cumulative Taxes                        $ —      $ —       $ —      $80      $200



                      Tax Benefit of Interest                  $40      $40      $40      $40       $40



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