Page 31 - Bankruptcy and Reorganization Services

Exhibit 1

The valuation method employed, as well as the manner in which the valuation method is employed, will
dictate the resultant level of value. If the level of value estimate derived from the valuation method em-
ployed is different from the level of value applicable to the subject shares or interest, premiums or dis-
counts or both may need to be applied to adjust value estimates up or down to calculate a value estimate
that is aligned with the applicable level of value.

These value adjustments are typically presented in valuation reports as percentage changes (up and
down) to an unadjusted value to arrive at the appropriate adjusted level of value. These adjustments can
also be presented as part of an intermediate step in the valuation analysis as adjustments to the discount
rate (income approach) or market multiples (market approach). Alternatively, some of the premiums and
discounts may be reflected directly though adjustments to the historical and future cash flows to the
business. Depending on the context of the valuation assignment, the analyst may choose to present these
adjustments in a fashion that the users (investors, courts, banks, and the like) may be more accustomed
to seeing.

The following is a brief discussion of the primary adjustments that may be required.

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