Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 22

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          accredited senior appraiser with the American Society of                    
          Appraisers.  He has 22 years of valuation experience and has                
          taught courses and written several articles on business                     
               Mr. Hitchner also relied on a blend of income- and asset-              
          based approaches to value BCC.  Like Mr. Fodor, Mr. Hitchner used           
          a capitalization of earnings model to derive his income-based               
          value.  Mr. Hitchner projected BCC’s net free cashflow capacity             
          for the year immediately following the valuation date based on              
          BCC’s historical earnings over four different periods,11                    
          adjusted for taxes, depreciation, capital investment, and                   
          retained working capital.  He increased the historical net after-           
          tax earnings by an estimated 5-percent growth rate.12                       
               Mr. Hitchner then calculated a capitalization rate of 20               
          percent, from which he subtracted his estimated 5-percent growth            
          rate, to yield a net capitalization rate of 15 percent.  By                 

               11 Mr. Hitchner removed from earnings certain interest                 
          income generated by the company’s “excess cash”; i.e., cash that            
          he considered in excess of operating, or working capital, needs.            
          He considered this “excess cash” to be a nonoperating asset to be           
          accounted for separately in his income-based approach.  Insofar             
          as nonoperating assets were to be taken into account separately             
          under his approach, he removed the income from those assets,                
          including the interest generated by “excess cash”, from BCC’s               
               12 Mr. Fodor did not adjust for any projected earnings                 

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