ACM Partnership, Southampton-Hamilton Company, Tax Matters Partner - Page 29

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                    Colgate's Financial Exposure to Partnership Portfolio             
                          (Based on Pohlschroeder's Projections)                      
                                     ( $ millions )                                   
                                   Base Level  200 Basis Pt.Change                    
                                  Decline                                            
          Long Bonds               (42.00)   (51.45)        (9.45)                    
          Met Note                (98.00       (104.66)       (6.66)                 
          Total liabilities        (140.00)  (156.11)      (16.11)                    
          Partnership interest(15%)21.00        23.42        2.42                     
          Net liabilities          (119.00)  (132.69)      (13.69)                    
          LIBOR Notes              60.00     48.99      (11.01)                       
          Partnership interest(15%)9.00         7.35       (1.65)                     
          Net position             (110.00)  (125.34)      (15.34)                    
                                             200 Basis Pt.  Change                    
                                            Rise                                     
          Long Bonds                         (34.88)        7.12                      
          Met Note                            (92.18)       5.82                      
          Total liabilities                  (127.06)       12.94                     
          Partnership interest (15%)           19.06        (1.94)                    
          Net liabilities                    (108.00)       11.00                     
          LIBOR Notes                        69.90          9.90                      
          Partnership interest (15%)           10.48        1.48                      
          Net position                       (97.52)        12.48                     
          The parentheses in the table reflect that the Long Bonds and Met            
          Note are liabilities for Colgate.  Changes in the value of these            
          liabilities are offset in part by changes in the value of                   
          Colgate's 15-percent interest in the partnership portfolio                  
          comprising these bonds and LIBOR Notes.  When interest rates                
          fall, Colgate's bonds appreciate, resulting in a $16.11 million             
          decrease in the market value of Colgate's net worth.  This loss             
          represents the opportunity cost to Colgate of being locked into a           
          fixed rate liability that now exceeds the prevailing cost of                
          capital in the market.  By virtue of its proposed 15-percent                
          ownership share in the partnership portfolio, Colgate realizes a            
          gain that offsets this loss in part:  The net effect on Colgate             







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Last modified: May 25, 2011