Estate of H.A. True, Jr. - Page 139




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              B. Belle Fourche                                                        
                  1. Value of Total Equity on a Marketable Basis                      
                      a. Kimball Report                                               
              Mr. Kimball applied the guideline company method to value               
          the subject interests in Belle Fourche as of June 4 and June 30,            
          1994.  He rejected the discounted cash-flow method, reasoning               
          that the cash-flow projections and discount rate determinations             
          required would be too difficult to compute and would not reflect            
          investors’ attitudes toward these types of companies.                       
              First, Mr. Kimball identified four guideline companies from             
          the crude petroleum pipeline and refined petroleum pipeline                 
          industries, which are similar but not identical to Belle                    
          Fourche’s line of business.  Mr. Kimball could not identify any             
          publicly traded companies that were engaged in crude oil                    
          gathering.                                                                  
              Mr. Kimball then analyzed six market multiples:  EBIT,                  
          EBDIT,  debt-free net income (DFNI), debt-free cash-flow (DFCF),            
          revenues, and TBVIC.  As with True Oil, he used data from the               
          latest year and an average of the 5 preceding years to calculate            
          the multiples.  Mr. Kimball weighted the EBDIT and DFCF multiples           
          at 30 percent each and the rest at 10 percent each.  Mr. Kimball            
          explained that he chose low multiples to apply to Belle Fourche’s           
          financial fundamentals because the guideline companies were                 
          larger and more successful than Belle Fourche.                              







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