Estate of H.A. True, Jr. - Page 184




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              Turning to the Kimball report, we doubt the reliability of              
          the guideline company method values.  First, we question whether            
          the relationship between revenues, TBVIC, and market value of the           
          selected public companies has any bearing on the market value of            
          Black Hills Trucking.  The guideline companies were all                     
          profitable over the 5-year period, whereas Black Hills Trucking             
          sustained losses every year.  Also, most of the guideline                   
          companies had significantly higher average revenues over the                
          analyzed period than Black Hills Trucking.  As a result, Mr.                
          Kimball applied multiples to Black Hills Trucking’s revenues that           
          were lower than the lowest industry multiples.  These facts                 
          suggest a lack of comparability between the selected companies              
          and Black Hills Trucking.                                                   
              Second, Mr. Kimball did not adjust the TBVIC multiple to                
          reflect differences in accounting methods between Black Hills               
          Trucking and the public companies.  TBVIC is a debt-free measure            
          of a company’s book value.  Black Hills Trucking’s book value was           
          computed on a tax basis, which allowed more accelerated                     
          depreciation deductions than GAAP basis financials.  Annually,              
          the company deducted approximately $2.1 million in depreciation             
          expense.  There is no evidence in the record indicating that Mr.            
          Kimball adjusted the TBVIC multiples of either the guideline                
          companies or Black Hills Trucking to reconcile any discrepancies            
          in accumulated depreciation.                                                







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