- 39 -                                         
          EBITDA (earnings before interest, taxes, depreciation and                   
          amortization).  However, they fail to explain how consideration             
          of those measures would have influenced or changed Mr. Engstrom’s           
          conclusions.36  Mr. Engstrom’s explanations were thorough and               
          complete, and it was his opinion that those measures would not              
          have affected his analysis.  He agreed that significant                     
          differences in interest, taxes, level of debt, etc., might                  
          necessitate adjustments to make the companies more comparable.              
          However, imposing those adjustments where the differences are not           
          significant runs the risk of imposing “your judgment over the               
          actual data that’s in there” and the risk “that your subjective             
          determination is wrong.”                                                    
               The P/E ratios for the guideline companies that Mr. Engstrom           
          selected were based on those companies’ earnings for the two most           
          recent quarterly filings and the forecasts of the earnings for              
          the next two cycles.37  The P/E ratio for HII, however, was based           
          on that company’s financial information for the fiscal year                 
               36Mr. Heebink’s testimony in rebuttal regarding the use of             
          P/E ratios was somewhat confusing.  He could not explain why                
          these other items are necessarily important or how they might               
          have influenced or changed Mr. Engstrom’s conclusions.  Mr.                 
          Heebink testified in the context of what an “acquirer” would                
          consider in a “typical mergers-and-acquisitions situation”,                 
          wherein he claims P/E ratios would seldom be used.                          
               37This information was derived from Value Line Investment              
          Survey, which uses the most recent 6-month period reported to the           
          Securities & Exchange Commission and an estimate of the next 6-             
          month period.                                                               
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