Estate of James J. Renier, Deceased, Kent L. Renier and Dubuque Bank & Trust Company, Co-Executors - Page 13

                                       - 13 -                                         
          Mr. Kramer’s value estimates for Renier’s operating and                     
          nonoperating assets produced a total value of $921,029 on the               
          valuation date.                                                             
               We shall consider their differences.                                   
                    1.  Computation of Normalized Income                              
               The experts agreed that the starting point for computing               
          normalized income should be the average of Renier’s reported net            
          income7 for the 69.33-month period preceding the valuation date,            
          July 1, 1988,8 through April 10, 1994 (base period9).  Further,             
          to avoid “unwarranted controversy”, Mr. Kramer adopted several of           
          Mr. Sliwoski’s normalizing adjustments.  Prior to normalizing,              

          number is corrected to account for the double counting of a                 
          $137,038 liability in Mr. Kramer’s original report.                         
               7 Mr. Sliwoski started with pretax net income and, after               
          making his normalizing adjustments, subtracted Federal and State            
          income taxes at an estimated combined rate of approximately 38              
          percent.  Mr. Kramer started with after-tax net income and, when            
          making normalizing adjustments, also accounted for the income tax           
          impact of the normalizing adjustments, at an estimated income tax           
          rate of 34 percent.  Except for the difference in assumed income            
          tax rates, their respective methodologies to account for taxes              
          would produce the same result.                                              
               8 Although Mr. Kramer’s report states that he used the                 
          period from July 1, 1989, through the valuation date, an                    
          examination of the data in the exhibits to his report shows that            
          the period used included the fiscal year starting July 1, 1988,             
          as well.                                                                    
               9 Although Mr. Sliwoski treats the period from July 1, 1988,           
          through the valuation date as consisting of 5.778 years, and Mr.            
          Kramer uses at various times 69.33 and 69.333 months to describe            
          this period, for the sake of consistency, we have adopted (and              
          treat the experts as having adopted) a base period of 69.33                 

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011