Estate of Josephine T. Thompson, Deceased, Carl T. Holst-Knudsen and the Bank of New York, Executors - Page 44

                                       - 44 -                                         
          separate risk factor for what the estate’s experts refer to as              
          management risk.                                                            
               Respondent asserts that the estate’s $25 million valuation             
          for TPC as an entity (and $1.7 million for the estate’s 20-                 
          percent interest therein) is absurd in light of TPC’s 1997 fiscal           
          yearend book value in the range of $148 million.  Respondent also           
          asserts that if we utilize the capitalization of income method to           
          value TPC (as did the estate’s experts and as we do), we should             
          take the cash and short-term liquid assets from TPC’s balance               
          sheet, treat them as nonoperating assets, and add them to any               
          calculation of the capitalized income of TPC that we make.                  
               From the end of its 1993 fiscal year through the end of its            
          1997 fiscal year, TPC’s cash and outside short-term (more than 3-           
          month) investments reported on its yearend balance sheets                   
          increased from $42.3 million to $73.6 million.  Throughout the              
          1990s, TPC increased its short-term liquid investments and still            
          paid significant cash dividends to its stockholders.  Not until             
          its 2000 fiscal year does TPC’s yearend balance sheet reflect any           
          significant reduction in outside short-term investments.                    
               On each of TPC’s 1997 and 1998 fiscal yearend balance                  
          sheets, approximately $68 million is shown as outside short-term            
          investments with an investment term of more than 3 months.  We              
          treat these $68 million in short-term liquid investments as                 
          nonoperating assets to be added to the valuation of TPC under a             






Page:  Previous  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  Next

Last modified: May 25, 2011