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{"sheet":"Copyright","index":0,"n_rows":6,"n_cols":1,"rows_kept":6,"cut":false,"hidden":false,"merged":[[5,0,5,8]]}
["Canadian Pacific’s Bid for Norfolk Southern"]
["Harvard Business School Case #216-057"]
["HBS Courseware 9-216-712"]
[]
[]
["This courseware was prepared by Professors Ben Esty and Scott Mayfield solely as the basis for class discussion.  Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.  Copyright © 2016 President and Fellows of Harvard College.  This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School."]

{"sheet":"Questions - Session 2","index":1,"n_rows":56,"n_cols":6,"rows_kept":56,"cut":false,"hidden":false,"merged":[]}
[]
[null,"Go to the Premium Page and fill in the Red Items"]
[]
[null,"Question 1 - What is the effective price and the premium percent for offer 1"]
[]
[null,null,null,"Effective Price"]
[null,null,null,"Premium Percent"]
[null,null,null,"Closing Price"]
[]
[null,"Question 2 - What is the effective price and the premium percent for offer 2"]
[]
[null,null,null,"Effective Price"]
[null,null,null,"Premium Percent"]
[null,null,null,"Closing Price"]
[]
[null,"Question 3 - Why is the share price different than the offer price"]
[]
[null,null,"a. Because the market does not understand the value"]
[null,null,"b. Because the value of the transaction is less"]
[null,null,"c. Because synergies may not be realised"]
[null,null,"d. Because there is a probability that the transaction will not be completed"]
[]
[null,null,"Answer (lower case)",null,null,"d"]
[]
[]
[]
[null,null,"With respect to the pre-merger operational improvements, which is true:"]
[]
[null,null,"a. If the pre-operational improvements can be made without the merger, they should not be included in synergies"]
[null,null,"b. The pre-operational improvements are from the pressure of the merger and should be included as synergies"]
[null,null,"c. Some of the savings come from fuel efficiency and this is driven by the combination"]
[null,null,"d. Revenue increases would be driven by price increases and this is possible because of the merger"]
[]
[null,null,"Anwer (lower case)",null,null,"a"]
[]
[null,"Go to the Synergy Page"]
[null,null,null,"Compute the synergy estimate as percent of salaries"]
[]
[null,"Answer the following with data in the synergy page"]
[]
[null,null,null,"Compute the NPV of Synergies"]
[null,null,null,"Discount Rate"]
[null,null,null,"Probability "]
[null,null,null,"Tax Rate"]
[]
[null,null,null,"Compute the Value of Synergies versus Premium to CP Shareholders using 100%"]
[]
[null,"Question 5"]
[]
[null,null,null,"What is the NPV of Synergies pre tax"]
[]
[null,null,null,"What is the NPV of Synergies"]
[null,null,null,"What is the NPV of Synergies with probability"]
[]
[null,null,null,"What is the NPV versus Synergies without out probability"]
[null,null,null,"What is the NPV versus Synergies with probabilty"]

{"sheet":"Premium","index":2,"n_rows":60,"n_cols":14,"rows_kept":60,"cut":false,"hidden":false,"merged":[]}
[null,null,null,"Exhibit 9b     Selected Stock Prices for Norfolk Southern and Canadian Pacific (in U.S. dollars)"]
[]
[null,null,null,"Period",null,"Timeline",null,"                                  NS Stock Price",null,null,null,"                           CP Stock Price"]
[null,null,null,"     Beg             End",null,"Event",null,"Beg","End","Change",null,"Beg","End","Change"]
[]
[]
[null,null,null,"10/01/15 - 11/06/15",null,null,null,77.33,79.87,2.5400000000000063,null,146.36000000000001,134.31,-12.050000000000011]
[null,null,null,"11/06/15 - 11/09/15",null,"Merger Rumors",null,79.87,88.62,8.75,null,134.31,142.17999,7.8699900000000014]
[null,null,null,"11/09/15 - 11/17/15",null,null,null,88.62,86.97,-1.6500000000000057,null,142.17999,138.58000000000001,-3.5999899999999911]
[null,null,null,"11/17/15 - 11/18/15",null,"Initial CP Offer",null,86.97,92.49,5.519999999999996,null,138.58000000000001,146.64999,8.06998999999999]
[null,null,null,"11/18/15 - 12/03/15",null,null,null,92.49,93.11,0.62000000000000455,null,146.64999,140.91,-5.7399900000000059]
[null,null,null,"12/03/15 - 12/04/15",null,"NS Rejects Offer",null,93.11,92.06,-1.0499999999999972,null,140.91,134.49001000000001,-6.4199899999999843]
[null,null,null,"12/04/15 - 12/07/15",null,null,null,92.06,91.52,-0.54000000000000625,null,134.49001000000001,130.47999999999999,-4.0100100000000225]
[null,null,null,"12/07/15 - 12/08/15",null,"Revised CP Offer",null,91.52,86.32,-5.2000000000000028,null,130.47999999999999,126.13,-4.3499999999999943]
[null,null,null,"12/08/15 - 12/18/15",null,null,null,86.32,84.27,-2.0499999999999972,null,126.13,125.07,-1.0600000000000023]
[]
[]
[null,null,null,"Source: Casewriter analysis using data from the Center for Research in Security Prices, accessed April 2016."]
[]
[]
[null,null,null,"NS Before Merger",null,null,null,{"$f":"I7","v":79.87}]
[null,null,null,"CP Before Merger",null,null,null,{"$f":"M7","v":134.31}]
[null,null,null,"Ratio of Price Before Merger",null,null,null,null,null,null,null,0.59466904921450381]
[]
[null,"First Offer"]
[null,null,null,"Date",null,null,null,"2015-11-17"]
[null,null,null,"Cash Offer 1",null,null,null,46.72]
[null,null,null,"Exchange Offer",null,null,null,0.34799999999999998]
[null,null,null,"CP Price - End of Day",null,null,null,null,null,null,null,146.64999]
[null,null,null,"Exchange Offer",null,null,null,null,null,null,null,51.034196519999995]
[null,null,null,"Total Offer",null,null,null,null,null,null,null,97.754196519999994]
[]
[null,null,null,"Premium Percent",null,null,null,null,null,null,null,0.22391632052084631]
[]
[null,null,null,"NS Share Price - End of Day",null,null,null,{"$f":"I10","v":92.49}]
[]
[null,"Second Offer"]
[null,null,null,"Date",null,null,null,"2015-12-16"]
[null,null,null,"Cash Offer 2",null,null,null,32.86]
[null,null,null,"Exchange Offer",null,null,null,0.45100000000000001]
[null,null,null,"CP Price at End of Day",null,null,null,{"$f":"M15","v":125.07},null,null,null,125.07]
[null,null,null,"Exchange Offer",null,null,null,{"$f":"H41*H40","v":56.406569999999995},null,null,null,56.406569999999995]
[null,null,null,"Total Offer",null,null,null,{"$f":"H39+H42","v":89.266570000000002},null,null,null,89.266570000000002]
[]
[null,null,null,"Premium in Offer 2",null,null,null,{"$f":"H43/H21-1","v":0.11764830349317634},null,null,null,0.11764830349317634]
[]
[null,"Value of Premium"]
[null,null,null,"Share Price Before Announcement",null,null,null,{"$f":"H21","v":79.87}]
[null,null,null,"NS Shares - Millions",null,null,null,{"$f":"'NS Historic ROIC'!O94","v":301.39999999999998}]
[null,null,null,"Market Capital Before - Millions USD",null,null,null,{"$f":"H49*H21","v":24072.817999999999},null,null,null,24072.817999999999]
[]
[null,null,null,"Effective Price Realised in Offer 1",null,null,null,{"$f":"H31","v":0}]
[null,null,null,"Market Capital Using Offer Value",null,null,null,{"$f":"H49*H31","v":0},null,null,null,29463.114831127998]
[]
[null,null,null,"Premium - Millions USD",null,null,null,{"$f":"H53-H50","v":-24072.817999999999},null,null,null,5390.2968311279983]
[]
[null,null,null,"Fees",null,null,null,0.1]
[null,null,null,"Total Fees",null,null,null,{"$f":"H57*H50","v":2407.2818000000002}]
[]
[null,null,null,"Total Premium and Transaction Cost",null,null,null,{"$f":"H55+H58","v":-21665.536199999999},null,null,null,7797.578631127999]

{"sheet":"Synergies","index":3,"n_rows":105,"n_cols":11,"rows_kept":105,"cut":false,"hidden":false,"merged":[]}
[]
[]
[null,null,null,"Table A    Projected Merger Benefits ($ millions)"]
[]
[null,null,null,null,2016,2017,2018,2019,2020,2021]
[]
[]
[null,null,null,"Compensation and Benefits",{"$f":"'NS Historic ROIC'!O8","v":2923}]
[null,null,null,"Materials",{"$f":"'NS Historic ROIC'!O9","v":2713}]
[null,null,null,"Fuel",{"$f":"'NS Historic ROIC'!O10","v":1087}]
[null,null,null,"Total",{"$f":"SUM(E8:E10)","v":6723}]
[]
[null,null,null,"Net Operating Income",{"$f":"'NS Historic ROIC'!O14","v":3133}]
[]
[null,null,null,"Pre-Merger Operational Improvements"]
[null,null,null,"     Phase-in (%)",0.17,0.42,0.67,0.92,1,1]
[null,null,null,"     Increase in EBIT",214.20000000000002,529.19999999999993,844.2,1159.2,1260,1260]
[]
[null,null,null,"Post-Merger Combination Synergies"]
[null,null,null,"     Phase-in (%)",0,0,0.25,0.5,0.75,1]
[null,null,null,"     Increase in EBIT",0,0,123.75,247.5,371.25,495]
[]
[null,null,null,"Projected Total Increase in CP-NS EBIT",214.20000000000002,529.19999999999993,967.95,1406.7,1631.25,1755]
[]
[null,null,null,"Percent of Compensation"]
[]
[null,null,null,"From ROIC",{"$f":"'NS Projections'!H59","v":544.70400784442722},{"$f":"'NS Projections'!I59","v":-987.85651070793506},{"$f":"'NS Projections'!J59","v":-2273.3978658932815},{"$f":"'NS Projections'!K59","v":-3160.2612923076917},{"$f":"'NS Projections'!L59","v":-3249.560758974359},{"$f":"'NS Projections'!M59","v":-3141.7719697435896}]
[]
[]
[null,null,null,"Source: Candian Pacific Presentation, \"CP's Value Proposition,\" December 8, 2015, p.8."]
[null,null,null,"Note: The projections were on a pre-tax basis and were net of merger-related costs and other restructuring expenses."]
[]
[null,"Valuation of Synergies"]
[null,null,null,"Use Total",true]
[]
[null,null,null,null,"2015-11-01","2016-07-01",{"$f":"EDATE(F36,12)","v":"2017-07-01"},{"$f":"EDATE(G36,12)","v":"2018-07-01"},"2019-07-01","2020-07-01","2021-07-01"]
[null,null,null,"Total Savings",0,{"$f":"IF($E$34,E23,E21)","v":214.20000000000002},{"$f":"IF($E$34,F23,F21)","v":529.19999999999993},967.95,1406.7,1631.25,1755]
[]
[null,null,null,"Discount Rate",7.0000000000000007E-2]
[]
[null,null,null,"PV without Terminal Value (XNPV)",{"$f":"XNPV(E39,E37:K37,E36:K36)","v":4968.8763297428923},null,null,null,4968.8763297428923]
[]
[null,null,null,"Terminal Discount Rate",{"$f":"E39","v":7.0000000000000007E-2}]
[null,null,null,"Terminal Value",0,0,0,0,0,0,{"$f":"K37/E43","v":25071.428571428569}]
[]
[null,null,null,"PV with Terminal Value (XNPV)",{"$f":"XNPV(E43,E44:K44,E36:K36)","v":17085.092649215188},null,null,null,17085.092649215188]
[]
[null,null,null,"Total Value",{"$f":"E46+E41","v":22053.968978958081},null,null,null,22053.968978958081]
[]
[null,null,null,"Probability",1]
[]
[null,null,null,"Weighted",{"$f":"E50*E48","v":22053.968978958081}]
[]
[null,null,null,"Tax Rate",0.35]
[]
[null,null,null,"After Tax",{"$f":"E52*(1-E54)","v":14335.079836322753},null,null,null,14335.079836322753]
[]
[]
[]
[null,null,null,"Probability Weighted","Percent","Probability","After Tax Value"]
[null,null,null,null,1,0.1,{"$f":"$E$56*F61*E61","v":1433.5079836322755},null,null,null,1433.5079836322755]
[null,null,null,null,0.7,0.2,2006.9111770851855,null,null,null,2006.9111770851855]
[null,null,null,null,0.5,0.4,2867.0159672645509,null,null,null,2867.0159672645509]
[null,null,null,null,0.2,0.2,573.40319345291016,null,null,null,573.40319345291016]
[null,null,null,null,0,0.1,0,null,null,null,0]
[null,null,null,null,null,null,0,null,null,null,0]
[null,null,null,"ExpectedValue of Synergies",null,{"$f":"SUM(F61:F65)","v":1.0000000000000002},{"$f":"SUM(G61:G66)","v":6880.8383214349215},null,null,null,6880.8383214349215]
[]
[null,null,null,"Synergy Applied",null,null,{"$f":"E56","v":14335.079836322753}]
[]
[null,null,null,"Premium",null,null,{"$f":"Premium!H60","v":-21665.536199999999}]
[]
[null,null,null,"Net Value of Transation",null,null,{"$f":"G69-G71","v":36000.616036322754},null,null,null,6537.5012051947542]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[null,null,null,null,7.3280875812521393E-2,0.18104686965446457,0.33114950393431408,0.48125213821416357,0.55807389668149165,0.60041053711939785]
[null,null,null,null,7.3280875812521393E-2,0.18104686965446457,0.33114950393431408,0.48125213821416357,0.55807389668149165,0.60041053711939785]

{"sheet":"Exhibit 1","index":4,"n_rows":56,"n_cols":18,"rows_kept":56,"cut":false,"hidden":false,"merged":[]}
[null,null,"Exhibit 1   Class I Railroad Operating and Financial Performance Metrics ($ millions)"]
[]
[null,null,null,null,null,"BNSF Railway",null,"Canadian National Railway",null,"Canadian Pacific Railway",null,"CSX      Corp",null,"Kansas City Southern",null,"Norfolk Southern Corp",null,"Union Pacific Corp"]
[]
[null,null,"Operating Statistics (2014)"]
[null,null,null,"Miles of Track Operated (miles)",null,32643,null,19600,null,12559,null,20769,null,3339,null,19759,null,31974]
[null,null,null,"Number of Employees (number)",null,46240,null,24635,null,14698,null,28123,null,3038,null,29482,null,49652]
[null,null,null,"Carloads Originated (thousands)",null,9321.7739999999994,null,5625,null,2684,null,5190.3230000000003,null,442.83,null,5136.6419999999998,null,7771.3239999999996]
[null,null,null,"Revenue Ton Miles (RTM) (billions) [1]",null,771.32080599999995,null,232.1,null,149.84899999999999,null,245.21217999999999,null,33.826141999999997,null,205.019983,null,549.62943900000005]
[]
[]
[null,null,null,"Productivity Measures (2014)"]
[null,null,null,null,"2004 Revenue",23035.998,null,10477.777678439999,null,5716.4074691999995,null,12342.404,null,1359.384,null,11624.231,null,23975.236000000001]
[null,null,null,null,"Revenue per RTM (cents)",2.9865650998658526,null,4.5143376468935799,null,3.8147785231800007,null,5.0333568259129713,null,4.0187379335189926,null,5.6698039039443291,null,4.3620727528024572]
[null,null,null,null,"Revenue per Employee ($000)",498.18334775086504,null,425.32079068155059,null,388.92417126139605,null,438.87223980371937,null,447.4601711652403,null,394.28230784885693,null,482.86546362684282]
[null,null,null,null,"Carloads Origin. per Employee",201.59545847750863,null,228.33367160543941,null,182.60987889508777,null,184.55794189809055,null,145.7636603028308,null,174.22976731565024,null,156.51583017803915]
[null,null,null,null,"Employees per Billion RTM",59.9491153879233,null,106.13959500215425,null,98.085405975348522,null,114.68843024029231,null,89.812193184785897,null,143.80061674280793,null,90.337228097420009]
[null,null,null,null,"Million RTM per Mile of Track",23.628980363324448,null,11.841836734693878,null,11.931602834620591,null,11.806643555298763,null,10.130620545073375,null,10.376030315299358,null,17.189886751735784]
[]
[null,null,"Financial Statistics (9/30/15)"]
[null,null,null,"Operating Revenues",null,22452,null,10125.700000000001,null,5433.694740678,null,12222,null,2463,null,10863,null,22758]
[null,null,null,"Operating Expenses",null,14832,null,5996.6,null,3309.9,null,8482,null,1654.9,null,7730,null,14251]
[null,null,null,null,"Operating Income",7620,null,4129.1000000000004,null,2123.7947406779999,null,3740,null,808.4,null,3133,null,8507]
[null,null,null,null,"Operating Ratio (%)",0.66060929983965788,null,0.59221584680565298,null,0.60914353086883211,null,0.69399443626247748,null,0.67190418189200163,null,0.71158980023934459,null,0.62619738114069778]
[]
[null,null,null,"EBITDA",null,7620,null,5046.5,null,2586.4947406779997,null,4926,null,1086.4000000000001,null,4140,null,10491]
[null,null,null,"Net Income",null,6218,null,2746.6,null,1195.8638502919998,null,1993,null,485.2,null,1706,null,5086]
[null,null,null,"Return on Sales (ROS)",null,0.27694637448779619,null,0.27125038268959178,null,0.22008300196539629,null,0.16306660121093111,null,0.19699553390174585,null,0.15704685630120593,null,0.22348185253537217]
[null,null,null,"Return on Equity (ROE)",null,0.17818150557354501,null,0.25432423423089745,null,0.40129440235790581,null,0.17092624356775299,null,0.11595726883827641,null,0.1406546294006101,null,0.24690518957230934]
[]
[null,null,null,"Cash",null,3040,null,400.9,null,493.434558643,null,966,null,116.6,null,433,null,1078]
[null,null,null,"Assets",null,81503,null,26741.8,null,13758.687368153001,null,34015,null,8323,null,33527,null,53763]
[null,null,null,"Debt",null,21882,null,7827.8,null,6477.355015651,null,10106,null,2345,null,9496,null,13319]
[null,null,null,"Equity (book value)",null,34897,null,10799.6,null,2980.0162754960002,null,11660,null,4184.3,null,12129,null,20599]
[null,null,null,"Debt-to-Total Cap (book)",null,0.38538896422973284,null,0.42023041326218363,null,0.68490014997237358,null,0.46430212257649545,null,0.35915029176175084,null,0.43912138728323702,null,0.39268235155374726]
[]
[null,null,null,"Equity (market value)",null,"n/a",null,46323.703999999998,null,23114.77,null,26224.809999999998,null,9915.0079999999998,null,23026.959999999999,null,75652.437000000005]
[null,null,null,null,"Stock Price ($)","n/a",null,58.46,null,143.57,null,26.9,null,90.88,null,76.400000000000006,null,88.41]
[null,null,null,null,"Shares Outstanding (basic)","n/a",null,792.4,null,161,null,974.9,null,109.1,null,301.39999999999998,null,855.7]
[null,null,null,"Avg. Leverage (2 year, market)",null,"n/a",null,0.129,null,0.152,null,0.24099999999999999,null,0.16,null,0.24199999999999999,null,0.11600000000000001]
[null,null,null,"Avg. Leverage (5 year, market)",null,"n/a",null,0.154,null,0.224,null,0.27500000000000002,null,0.16600000000000001,null,0.26100000000000001,null,0.13300000000000001]
[]
[null,null,null,"Interest coverage",null,8.6921373200442975,null,12.512121212121212,null,7.7425983983886262,null,7.030075187969925,null,10.567320261437908,null,5.8890977443609023,null,14.202003338898164]
[null,null,null,"   EBIT",null,7849,null,4129,null,2123.7947406779999,null,3740,null,808.4,null,3133,null,8507]
[null,null,null,"   IntX",null,903,null,330,null,274.29999999999995,null,532,null,76.5,null,532,null,599]
[null,null,null,"S&P Credit Rating",null,"BBB+",null,"A",null,"BBB+",null,"BBB+",null,"BBB-",null,"BBB+",null,"A"]
[null,null,null,"Equity Beta (vs. S&P 500)"]
[null,null,null,null,"Two year weekly","n/a",null,1.1499999999999999,null,1.28,null,1.1399999999999999,null,1.3,null,1.1399999999999999,null,1.1499999999999999]
[null,null,null,null,"Five year monthly","n/a",null,1.04,null,1.31,null,1.29,null,1.24,null,1.1299999999999999,null,1.02]
[null,null,null,"Ticker",null,"private",null,"CNI",null,"CP",null,"CSX",null,"KSU",null,"NSC",null,"UNP"]
[]
[]
[null,null,"Source:  Adapted from data from Capital IQ, accessed April 2016; Association of American Railroads, Analysis of Class I"]
[null,null,"               Railroads 2014, Policy and Economics department; and casewriter estimates."]
[]
[null,null,"Note:  [1] Revenue ton miles (RTM) equals the number of tons of paid cargo times the distance hauled in miles."]

{"sheet":"Exhibit 2","index":5,"n_rows":22,"n_cols":8,"rows_kept":22,"cut":false,"hidden":false,"merged":[]}
[null,null,null,"Exhibit 2     Major Railroad Acquisitions and Transaction Multiples, 1995–2014"]
[]
[]
[null,null,null,null,null,null,null,"Total Enterprise Value"]
[null,null,null,"Acquirer","Target","Year",null,"EBITDA"]
[]
[]
[null,null,null,"Burlington Northern","Sante Fe Pacific",1995,null,"9x"]
[null,null,null,"Union Pacific","Chicago Northwestern",1995,null,"8x"]
[null,null,null,"Union Pacific","Southern Pacific",1996,null,"14x"]
[null,null,null,"Norfolk Southern & CSX","Conrail",1997,null,"14x"]
[null,null,null,"Canadian National","Illinois Central",1998,null,"10x"]
[null,null,null,"Canadian National","Wisconsin Central",2001,null,"10x"]
[null,null,null,"Canadian National","BC Rail",2004,null,"9x"]
[null,null,null,"Canadian Pacific","DM&E",2008,null,"13x"]
[null,null,null,"Berkshire Hathaway","BNSF",2010,null,"9x"]
[]
[null,null,null,"Average",null,null,null,"10.7x"]
[]
[]
[null,null,null,"Source: Thomas Wadewitz, Alex Johnson, and Michael Triano, UBS, Nov 10, 2015."]
[null,null,null,"Note:     The TEV/EBITDA multiple was based on last (trailing) twelve months (LTM) data."]

{"sheet":"NS Historic ROIC","index":6,"n_rows":140,"n_cols":15,"rows_kept":140,"cut":false,"hidden":false,"merged":[]}
[null,null,null,"Exhibit 3     Norfolk Southern Income Statements, 2011–2015 ($ millions)"]
[]
[null,null,null,null,null,null,null,null,null,null,"Years Ended December 31",null,null,null,"LTM [1]"]
[null,null,null,null,null,null,null,2010,null,null,2011,2012,2013,"2014","Sep 2015"]
[]
[null,null,null,"Operating Revenue",null,null,null,9516,null,null,11172,11040,11245,11624,10863]
[null,null,null,"Operating Expenses"]
[null,null,null,null,"Compensation & benefits",null,null,2708,null,null,2974,2960,3002,2897,2923]
[null,null,null,null,"Materials, services, and other",null,null,2234,null,null,2534,2463,2457,2627,2713]
[null,null,null,null,"Fuel",null,null,1079,null,null,1589,1577,1613,1574,1087]
[null,null,null,null,"Depreciation & amortization",null,null,819,null,null,862,916,916,951,1007]
[null,null,null,null,null,"Total Operating Expense",null,{"$f":"SUM(H8:H11)","v":6840},null,null,7959,7916,7988,8049,7730]
[]
[null,null,null,"Operating Income",null,null,null,{"$f":"H6-H12","v":2676},null,null,3213,3124,3257,3575,3133]
[null,null,null,null,"Interest expense",null,null,462,null,null,455,495,525,545,532]
[null,null,null,null,"Unusual items",null,null,153,null,null,160,129,233,104,107]
[null,null,null,null,null,"Profit before tax",null,{"$f":"H14-H15+H16","v":2367},null,null,2918,2758,2965,3134,2708]
[null,null,null,null,"Income tax expense",null,null,871,null,null,1002,1009,1055,1134,1002]
[null,null,null,null,null,"Net Income",null,{"$f":"H17-H18","v":1496},null,null,1916,1749,1910,2000,1706]
[]
[null,null,null,null,"Income tax Rate",null,null,null,null,null,{"$f":"K18/K17","v":0.34338588074023302},{"$f":"L18/L17","v":0.36584481508339378},0.35581787521079256,0.36183790682833439,0.37001477104874447]
[null,null,null,null,"NOPAT",null,null,null,null,null,{"$f":"K14*(1-K21)","v":2109.7011651816315},{"$f":"L14*(1-L21)","v":1981.1007976794781},2098.1011804384489,2281.4294830887047,1973.7437223042837]
[]
[null,null,null,"Per Share Items"]
[null,null,null,null,"Basic Earnings per share",null,null,4.0599999999999996,null,null,5.52,5.42,6.1,6.44,5.59]
[null,null,null,null,"Dividends per share",null,null,{"$error":"#REF!"},null,null,1.66,1.94,2.04,2.2200000000000002,2.34]
[]
[null,null,null,"Cash Flow Items"]
[null,null,null,null,"Capital Expenditures",null,null,1470,null,null,2160,2241,1971,2118,2516]
[null,null,null,null,"Cap Exp to Depreciation",null,null,null,null,null,{"$f":"K29/K11","v":2.5058004640371228},{"$f":"L29/L11","v":2.4465065502183405},2.1517467248908297,2.2271293375394321,2.4985104270109235]
[]
[null,null,null,"Financial Ratios and Information"]
[null,null,null,null,"Revenue Growth Rate [2]",null,null,"n/a",null,null,0.17402269861286254,-1.1815252416756176E-2,1.8568840579710144E-2,3.3703868385949312E-2,-6.6351525569402714E-2]
[null,null,null,null,"Operating Ratio",null,null,{"$f":"H12/H6","v":0.71878940731399743},null,null,0.71240601503759393,0.71702898550724636,0.71036016007114278,0.6924466620784584,0.71158980023934459]
[null,null,null,null,"Effective Tax Rate",null,null,{"$f":"H18/H17","v":0.36797634136037177},null,null,0.34338588074023302,0.36584481508339378,0.35581787521079256,0.36183790682833439,0.37001477104874447]
[null,null,null,null,"Return on Sales (ROS)",null,null,{"$f":"H19/H6","v":0.15720891130727196},null,null,0.17150017901897602,0.15842391304347825,0.16985326811916407,0.17205781142463869,0.15704685630120593]
[null,null,null,null,"Number of employees",null,null,null,null,null,30329,30943,30103,29482,30456]
[]
[]
[null,null,null,"Notes:"]
[null,null,null,"    [1] Last Twelve Months (LTM) ending September 2015."]
[null,null,null,"    [2] For 2015, growth rate is calculated from previous LTM ending September 2014."]
[]
[null,null,null,"Source:   Adapted from data from Capital IQ, accessed April 2016."]
[]
[null,null,null,"Exhibit 4     Norfolk Southern Balance Sheets, 2011–2015 ($ millions)"]
[]
[null,null,null,null,null,null,null,null,null,null,"Years Ended December 31",null,null,null,"Sept"]
[null,null,null,null,null,null,null,2010,null,null,2011,2012,2013,"2014","2015"]
[null,null,null,"Assets",null,null,null,null,"Direct","Financing"]
[null,null,null,null,"Cash and ST investments",null,null,1110,null,null,301,668,1561,973,433]
[]
[null,null,null,null,"Cash/Revenues",null,null,null,null,null,{"$f":"K51/K6","v":2.6942355889724309E-2},{"$f":"L51/L6","v":6.0507246376811596E-2},0.13881725211204979,8.3706125258086711E-2,3.9860075485593296E-2]
[null,null,null,null,"Minimum Cash Percent",null,null,null,null,null,0.04,0.04,0.04,0.04,0.04]
[null,null,null,null,"Operating Cash",null,null,null,1,null,{"$f":"K54*K6","v":446.88},{"$f":"L54*L6","v":441.6},449.8,464.96000000000004,434.52]
[null,null,null,null,"Surplus Cash",null,null,null,null,-1,{"$f":"K51-K55","v":-145.88},{"$f":"L51-L55","v":226.39999999999998},1111.2,508.03999999999996,-1.5199999999999818]
[]
[]
[null,null,null,null,"Accounts receiveable",null,null,807,1,null,1022,1109,1024,1055,1103]
[null,null,null,null,"Inventory",null,null,null,1,null,209,216,223,236,288]
[null,null,null,null,"Other current assets",null,null,554,1,null,219,249,267,514,178]
[null,null,null,null,null,"Total current assets",null,{"$f":"SUM(H51:H61)","v":2471},null,null,{"$f":"SUM(K56:K61)","v":1304.1199999999999},{"$f":"SUM(L56:L61)","v":1800.4},2625.2,2313.04,1567.48]
[null,null,null,null,"Net PP&E",null,null,23231,1,null,24469,25736,26645,27694,28682]
[null,null,null,null,"Investments",null,null,2193,1,null,2234,2300,2439,2679,2740]
[null,null,null,null,"Other LT Assets",null,null,304,1,null,84,64,324,49,103]
[null,null,null,null,null,"Total assets",null,{"$f":"SUM(H62:H65)","v":28199},null,null,{"$f":"SUM(K62:K65)","v":28091.119999999999},{"$f":"SUM(L62:L65)","v":29900.400000000001},32033.200000000001,32735.040000000001,{"$f":"SUM(O62:O65)","v":33092.479999999996}]
[]
[null,null,null,"Liabilities and stock holders' equity"]
[null,null,null,null,"Accounts payable",null,null,1181,-1,null,1092,1362,1265,1233,1160]
[null,null,null,null,"Short-term debt",null,null,100,null,1,100,200,100,100,100]
[null,null,null,null,"Current maturities of LT debt",null,null,358,null,1,50,50,445,2,500]
[null,null,null,null,"Other current liabilities",null,null,443,-1,null,459,469,495,445,607]
[null,null,null,null,null,"Total current liabilities",null,{"$f":"SUM(H69:H72)","v":2082},null,null,{"$f":"SUM(K69:K72)","v":1701},{"$f":"SUM(L69:L72)","v":2081},2305,1780,2367]
[null,null,null,null,"Long-term debt",null,null,6567,null,1,7390,8432,8903,8883,8896]
[null,null,null,null,"Other liabilities",null,null,1793,-1,null,2050,2237,1444,1312,1295]
[null,null,null,null,"Deferred income taxes",null,null,7088,-1,null,7486,7832,8542,8817,8840]
[null,null,null,null,null,"Total Liabilities",null,{"$f":"SUM(H73:H76)","v":17530},null,null,18627,18627,18627,18627,18627]
[null,null,null,null,"Sharholders equity",null,null,10669,null,1,9911,9760,11289,12408,12129]
[null,null,null,null,null,"Total liabilities & equity",null,{"$f":"H77+H78","v":28199},null,null,{"$f":"K77+K78","v":28538},{"$f":"L77+L78","v":28387},29916,31035,{"$f":"O77+O78","v":30756}]
[]
[null,null,null,"Invested Capital"]
[null,null,null,null,"Direct Method"]
[null,null,null,null,"Indirect Method"]
[null,null,null,null,null,null,null,null,null,null,{"$f":"K82-K83","v":0},{"$f":"L82-L83","v":0},0,0,0]
[null,null,null,null,"Average Invested Capital"]
[null,null,null,null,"ROIC"]
[]
[null,null,null,null,"Revenue Growth",null,null,null,null,null,null,{"$f":"L6/K6-1","v":-1.1815252416756183E-2},{"$f":"M6/L6-1","v":1.85688405797102E-2},3.3703868385949409E-2,-6.5467997247074972E-2]
[]
[null,null,null,"Financial Ratios & Other Information"]
[null,null,null,null,"Current Ratio",null,null,{"$f":"H62/H73","v":1.1868395773294909},null,null,1.0293944738389182,1.0773666506487265,1.3340563991323211,1.5606741573033709,0.84579636670891423]
[null,null,null,null,"Debt-to-Total Capital",null,null,{"$f":"(H70+H71+H74)/(H70+H71+H74+H78)","v":0.39702724087261221},null,null,0.43206693026187609,0.47077323500704915,0.45561074408062885,0.41999719534427149,0.43912138728323702]
[null,null,null,null,"S&P Long-term Debt Rating",null,null,null,null,null,"BBB+","BBB+","BBB+","BBB+","BBB+"]
[null,null,null,null,"Shares outstanding",null,null,null,null,null,330.1,314.5,309.7,307.39999999999998,301.39999999999998]
[null,null,null,null,"Stock price per share",null,null,null,null,null,72.86,61.84,92.83,109.61,76.400000000000006]
[]
[]
[null,null,null,"Source:   Adapted from data from Capital IQ, accessed April 2016."]
[null,null,null,"Note:      The September figure is for the last twelve months ending September 30, 2015."]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[null,null,null,null,null,null,null,null,null,null,2109.7011651816315,1981.1007976794781,2098.1011804384489,2281.4294830887047,1973.7437223042837]

{"sheet":"NS Projections","index":7,"n_rows":59,"n_cols":13,"rows_kept":59,"cut":false,"hidden":false,"merged":[]}
[null,null,null,"Exhibit 6    Norfolk Southern Projections on a Stand-alone Basis, October 2015 ($ millions)"]
[]
[null,null,null,null,null,null,"Est.","Projected (period ending 12/31)"]
[null,null,null,null,null,null,2015,2016,2017,2018,2019,2020,2021]
[]
[]
[null,null,null,"Income statement items"]
[null,null,null,"     Revenue",null,null,10649,10698,11175,11671,12191,12557,12870.924999999999]
[null,null,null,"          Growth rate (%)",null,null,null,4.6013710207530867E-3,4.4587773415591725E-2,4.438478747203578E-2,4.4554879616142573E-2,3.0022147485850192E-2,2.4999999999999911E-2]
[]
[null,null,null,"     Operating expenses",null,null,6548,6397,6570,6808,7049,7139.4666666666672,7440.3963333333322]
[null,null,null,"     Depreciation [1]",null,null,1049,1091,1135,1180,1227,1299.5333333333333,1312.5286666666666]
[null,null,null,"    EBIT",null,null,3052,3210,3470,3683,3915,4118,4118]
[]
[null,null,null,"     Operating ratio",null,null,0.71340031927880554,0.69994391475042061,0.68948545861297539,0.68443149687259019,0.67886145517184815,0.67205542725173206,0.68005407536754348]
[]
[null,null,null,"Balance sheet items"]
[null,null,null,"     Capital expenditures",null,null,2365,2070,1910,1930,1930,1949.3,1968.7929999999999]
[null,null,null,"     Net working capital [2]",null,null,-191.68199999999999,-128.376,-134.1,-140.05199999999999,-146.292,-150.684,-154.4511]
[]
[]
[null,null,null,"Invested Capital - Start",null,null,{"$f":"F26","v":0},{"$f":"G26","v":1124.3180000000002},{"$f":"H26","v":1974.942},2615.8420000000001,3225.7900000000009,3782.4980000000005,4281.5806666666667]
[null,null,null,"Add: Capital Expenditure",null,null,{"$f":"G18","v":2365},{"$f":"H18","v":2070},1910,1930,1930,1949.3,1968.7929999999999]
[null,null,null,"Add: Working Capital",null,null,{"$f":"G19","v":-191.68199999999999},{"$f":"H19","v":-128.376},-134.1,-140.05199999999999,-146.292,-150.684,-154.4511]
[null,null,null,"Less: Depreciation",null,null,{"$f":"-G12","v":-1049},{"$f":"-H12","v":-1091},-1135,-1180,-1227,-1299.5333333333333,-1312.5286666666666]
[null,null,null,"Invested Capital - End",null,{"$f":"'NS Historic ROIC'!O82","v":0},{"$f":"SUM(G22:G25)","v":1124.3180000000002},{"$f":"SUM(H22:H25)","v":1974.942},2615.8420000000001,3225.7900000000009,3782.4980000000005,4281.5806666666667,4783.3938999999991]
[null,null,null,"Average",null,null,{"$f":"AVERAGE(G26,G22)","v":562.15900000000011},{"$f":"AVERAGE(H26,H22)","v":1549.63},2295.3919999999998,2920.8160000000007,3504.1440000000007,4032.0393333333336,4532.4872833333329]
[]
[null,null,null,"Tax Rate",null,0.35,{"$f":"$F$29","v":0.35},{"$f":"$F$29","v":0.35},0.35,0.35,0.35,0.35,0.35]
[]
[null,null,null,"NOPAT",null,null,{"$f":"G13*(1-G29)","v":1983.8},{"$f":"H13*(1-H29)","v":2086.5},2255.5,2393.9500000000003,2544.75,2676.7000000000003,2676.7000000000003]
[null,null,null,"ROIC",null,null,{"$f":"G31/G27","v":3.5288948500335309},{"$f":"H31/H27","v":1.3464504430089763},0.98262083339142081,0.81961684679897662,0.7262115940440802,0.66385761117740416,0.59055874460864921]
[]
[null,null,null,"Cap Exp/Depreciation",null,null,{"$f":"G18/G12","v":2.2545281220209725},{"$f":"H18/H12","v":1.8973418881759854},1.6828193832599119,1.6355932203389831,1.5729421352893236,1.5,1.5]
[]
[]
[null,null,null,"Source: UBS Global Research, Norfolk Southern Corporation, 10/28/15; and casewriter estimates."]
[]
[null,null,null,"Notes:"]
[null,null,null,"     [1] Because the expected useful life of a railroad's fixed assets was very long (up to 40 years) and"]
[null,null,null,"            depreciation was based on historical cost, the ratio of Cap Ex to Depreciation was typically greater"]
[null,null,null,"            than one. Historically, the average ratio of Cap Ex to Depreciation for Norfolk Southern was about 1.5."]
[null,null,null,"            The historical ratio of Cap Ex to Depreciation of 1.5 was expected to hold during the period after 2021."]
[]
[null,null,null,"     [2]  The level of net working capital equals the sum of accounts receivable, inventory and other current assets"]
[null,null,null,"            minus the sum of accounts payable and other current liabilities."]
[]
[null,null,null,null,null,null,1,5]
[null,null,null,"Improved ROIC",null,null,{"$f":"G54","v":3.5288948500335309},0.14000000000000001]
[]
[]
[null,null,null,null,null,null,1,2,3,4,5,6,7]
[]
[null,null,null,"ROIC Projected",null,null,{"$f":"G32","v":3.5288948500335309},{"$f":"H32","v":1.3464504430089763},0.98262083339142081,0.81961684679897662,0.7262115940440802,0.66385761117740416,0.59055874460864921]
[null,null,null,"Improved ROIC",null,null,{"$f":"interpolate_look_up(G52,48:48,49:49)","v":3.5288948500335309},{"$f":"interpolate_look_up(H52,48:48,49:49)","v":1.5749292444640834},{"$f":"interpolate_look_up(I52,48:48,49:49)","v":0.7028835458343683},{"$f":"interpolate_look_up(J52,48:48,49:49)","v":0.31369363464503308},{"$f":"interpolate_look_up(K52,48:48,49:49)","v":0.14000000000000001},{"$f":"interpolate_look_up(L52,48:48,49:49)","v":0.14000000000000001},{"$f":"interpolate_look_up(M52,48:48,49:49)","v":0.14000000000000001}]
[]
[null,null,null,"Difference",null,null,{"$f":"G55-G54","v":0},{"$f":"H55-H54","v":0.22847880145510713},-0.27973728755705252,-0.50592321215394354,-0.58621159404408019,-0.52385761117740415,-0.4505587446086492]
[null,null,null,"Difference x Invested Capital",null,null,{"$f":"G57*G27","v":0},{"$f":"H57*H27","v":354.05760509887767},-642.10673196015784,-1477.708612830633,-2054.1698399999996,-2112.2144933333334,-2042.1517803333334]
[null,null,null,"Pre-tax",null,null,{"$f":"G58/(1-G29)","v":0},{"$f":"H58/(1-H29)","v":544.70400784442722},-987.85651070793506,-2273.3978658932815,-3160.2612923076917,-3249.560758974359,-3141.7719697435896]

{"sheet":"CP Historic ROIC","index":8,"n_rows":99,"n_cols":18,"rows_kept":99,"cut":false,"hidden":false,"merged":[]}
[null,null,null,"Exhibit 7  Canadian Pacific Railway Income Statements, 2011–2015 ($ millions)"]
[]
[null,null,null,null,null,null,null,null,null,null,"Years Ended December 31",null,null,null,"LTM [1]"]
[null,null,null,null,null,null,null,2010,null,null,2011,2012,2013,"2014","Sep 2015"]
[]
[null,null,null,"Operating Revenue",null,null,null,5008.0434329580003,null,null,5092.4650776199996,5713.5690999150002,5772.9959726329998,5716.4074692000004,5433.694740678]
[null,null,null,"Operating Expenses"]
[null,null,null,null,"Compensation & benefits",null,null,1438.8,null,null,1402.7,1478.8,1297.0999999999999,1164,1079.3,null,{"$f":"O8/L8","v":0.72984852583175552}]
[null,null,null,null,"Materials, services, and other",null,null,1223.5999999999999,null,null,1304.3,1420.6000000000001,1252.8,1151.0999999999999,1124.5000000000002]
[null,null,null,null,"Fuel",null,null,732,null,null,952.2,1002.3,945.1,905,643.4]
[null,null,null,null,"Depreciation & amortization",null,null,491.7,null,null,482,540.79999999999995,531.79999999999995,476.7,462.7]
[null,null,null,null,null,"Total Operating Expense",null,{"$f":"SUM(H8:H11)","v":3886.0999999999995},null,null,4141.2,4442.5,4026.7999999999993,3696.7999999999997,3309.9]
[]
[null,null,null,"Operating Income",null,null,null,{"$f":"H6-H12","v":1121.9434329580008},null,null,951.26507761999983,1271.0690999150002,1746.1959726330006,2019.6074692000007,2123.7947406779999]
[null,null,null,null,"Interest expense",null,null,258.39999999999998,null,null,247.9,276.89999999999998,261.7,243.5,274.29999999999995]
[null,null,null,null,"Unusual items",null,null,12.065151816,null,null,-17.7,-356.2,-425.5,-16.399999999999999,-141.33089038600002]
[null,null,null,null,null,"Profit before tax",null,{"$f":"H14-H15+H16","v":875.60858477400086},null,null,685.66507761999981,637.96909991500024,1058.9959726330005,1759.7074692000006,1708.163850292]
[null,null,null,null,"Income tax expense",null,null,221.2,null,null,124.9,152.5,235.3,485.3,512.30000000000007]
[null,null,null,null,null,"Net Income",null,{"$f":"H17-H18","v":654.40858477400093},null,null,560.76507761999983,485.46909991500024,823.69597263300057,1274.4074692000006,1195.8638502919998]
[]
[null,null,null,"Tax Rate",null,null,null,null,null,null,{"$f":"K18/K17","v":0.18215890538502885},{"$f":"L18/L17","v":0.23903979051699889},0.22219159097930224,0.27578447468920925,0.29991268104194196]
[null,null,null,"NOPAT",null,null,null,null,null,null,{"$f":"K14*(1-K21)","v":777.98367234973614},{"$f":"L14*(1-L21)","v":967.23300853868818},1358.2059113120242,1462.6310842282751,1486.8417660184853]
[]
[null,null,null,"Per Share Items"]
[null,null,null,null,"Basic Earnings per share",null,null,3.8809571674800001,null,null,3.3149714721999999,2.82919488354,4.7065025049999996,7.3743383364000001,7.2668545970500009]
[null,null,null,null,"Dividends per share",null,null,{"$error":"#REF!"},null,null,1.1499999999999999,1.35,1.32,1.21,1.1200000000000001]
[null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,null,"Earnings",{"$f":"K19*10000000","v":5607650776.1999979}]
[null,null,null,"Cash Flow Items",null,null,null,null,null,null,null,null,null,null,null,null,"Earnings/Share",{"$f":"K25","v":3.3149714721999999}]
[null,null,null,null,"Capital Expenditures",null,null,729.9,null,null,1086,1151.7,1163.4000000000001,1251.2,1210.4000000000001,null,null,{"$f":"R27/K25","v":1691613584.9816072}]
[null,null,null,null,"Cap Exp/Depreciation",null,null,null,null,null,{"$f":"K29/K11","v":2.2531120331950207},{"$f":"L29/L11","v":2.129622781065089},2.1876645355396769,2.6247115586322636,2.6159498595202075]
[]
[null,null,null,"Financial Ratios and Information"]
[null,null,null,null,"Revenue Growth Rate [2]",null,null,"n/a",null,null,1.6857210963151681E-2,0.12196529830407359,1.0401007090101312E-2,-9.8022766170734171E-3,-8.6999999999999994E-2]
[null,null,null,null,"Operating Ratio",null,null,{"$f":"H12/H6","v":0.77597170472315069},null,null,0.81320145290724699,0.77753500873317349,0.69752343827868979,0.64669987573810228,0.60914353086883211]
[null,null,null,null,"Effective Tax Rate",null,null,{"$f":"H18/H17","v":0.25262429337315467},null,null,0.18215890538502885,0.23903979051699889,0.22219159097930224,0.27578447468920925,0.29991268104194196]
[null,null,null,null,"Return on Sales (ROS)",null,null,{"$f":"H19/H6","v":0.13067150745285661},null,null,0.11011662703086762,8.4967748079256181E-2,0.14268085003657502,0.22293852844929393,0.22008300196539629]
[null,null,null,null,"Number of employees",null,null,13879,null,null,14169,14594,14977,14698,14698]
[]
[]
[null,null,null,"Notes:"]
[null,null,null,"    [1] Last Twelve Months (LTM) ending September 2015."]
[null,null,null,"    [2] For 2015, growth rate is calculated from previous LTM ending September 2014."]
[]
[null,null,null,"Source:   Adapted from data from Capital IQ, accessed April 2016."]
[]
[]
[]
[null,null,null,"Exhibit 8     Canadian Pacific Railway Balance Sheets, 2011–2015 ($ millions)"]
[]
[null,null,null,null,null,null,null,null,null,null,"Years Ended December 31",null,null,null,"Sept"]
[null,null,null,null,null,null,null,2010,"Direct","Financing",2011,2012,2013,"2014","2015"]
[null,null,null,"Assets"]
[null,null,null,null,"Cash and ST investments",null,null,362.959983798,null,null,46.23253982,334.085778801,448.05903847600001,195.15227916000001,493.434558643]
[null,null,null,null,"Percent of Revenues",null,null,null,null,null,{"$f":"K53/K6","v":9.0786169596291291E-3},{"$f":"L53/L6","v":5.8472344161545217E-2},7.7612913745312248E-2,3.413897280966767E-2,9.0810136047766041E-2]
[null,null,null,null,"Minimum Cash Percent",null,null,null,null,null,0.04,0.04,0.04,0.04,0.04]
[]
[null,null,null,null,"Operating Cash",null,null,null,1,null,{"$f":"K55*K6","v":203.69860310479999},{"$f":"L55*L6","v":228.5427639966},230.91983890532001,228.65629876800003,217.34778962711999]
[null,null,null,null,"Surplus Cash",null,null,null,null,-1,{"$f":"K53-K57","v":-157.46606328479999},{"$f":"L53-L57","v":105.5430148044},217.13919957068001,-33.504019608000021,276.08676901588001]
[]
[null,null,null,null,"Accounts receiveable",null,null,461.49205696199999,1,null,509.54160908,547.78028596199999,545.95429058000002,606.18097332000002,538.97087948599994]
[null,null,null,null,"Inventory",null,null,null,1,null,135.69999999999999,136.4,155.30000000000001,152.80000000000001,129.9]
[null,null,null,null,"Other current assets",null,null,386.08485811200001,1,null,150.54827846000006,315.06726864999996,760.58538747300008,100.20715837999998,110.472054286]
[null,null,null,null,null,"Total current assets",null,{"$f":"SUM(H53:H62)","v":1210.5368988720002},null,null,842.02242736000017,1333.3333334129998,1909.898716529,1054.34041086,1272.7774924150001]
[null,null,null,null,"Net PP&E",null,null,12062.135528045999,1,null,12543.773357120001,13055.430148760999,12544.711776827,12467.294719080001,11766.286707006]
[null,null,null,null,"Investments",null,null,145.78725111,1,null,164.27306702000001,83.270629550999999,86.599646092,96.712633920000002,107.495577072]
[null,null,null,null,"Other LT Assets",null,null,331.79167494000001,1,0,329.52980509999998,302.98470029399999,1482.548289075,672.67090914000005,612.12759166000001]
[null,null,null,null,null,"Total assets",null,{"$f":"SUM(H63:H66)","v":13750.251352967998},null,null,13879.598656599999,14775.018812019,16023.758428523,14291.018673000002,13758.687368153001]
[]
[null,null,null,"Liabilities and stock holders' equity",null,null,null,null,null,null,0,0,0,0,0]
[null,null,null,null,"Accounts payable",null,null,227,-1,null,381,322,337,351,270.97500000000002]
[null,null,null,null,"Short-term debt",null,null,0,null,1,26.55911862,0,0,0,0]
[null,null,null,null,"Current maturities of LT debt",null,null,283.53106767600002,null,1,49.183553000000003,54.176072238000003,177.905794689,115.70975844,21.648414827]
[null,null,null,null,"Other current liabilities",null,null,786.47275254399995,-1,null,733.49931098000002,857.83446207199995,782.20629568899994,751.69672781999998,913.71583898100005]
[null,null,null,null,null,"Total current liabilities",null,{"$f":"SUM(H70:H73)","v":1297.0038202199999},null,null,1190.2419826,1234.0105343099999,1297.1120903779999,1218.4064862599998,1206.3392538080002]
[null,null,null,null,"Long-term debt",null,null,4054.8964394939999,null,1,4618.3356266999999,4651.1161276920002,4377.0473296500004,4857.2193374999997,6455.7066008239999]
[null,null,null,null,"Other liabilities",null,null,1592.6000397120001,0,1,1708.63663122,1677.4517181840001,936.59399849499994,1024.98121842,825.62575167799992]
[null,null,null,null,"Deferred income taxes",null,null,1955.5600235100001,-1,null,1789.2976581400001,2098.8211689240002,2732.5953544029999,2346.14487822,2290.9994863470001]
[null,null,null,null,null,"Total Liabilities",null,{"$f":"SUM(H74:H77)","v":8900.0603229359986},null,null,9306.511898660001,9661.3995491099995,9343.3487729260014,9446.7519204,10778.671092657001]
[null,null,null,null,"Sharholders equity",null,null,4850.1910300319996,null,1,4573.0867579400001,5113.6192629090001,6680.409655597,4844.2667525999996,2980.0162754960002]
[null,null,null,null,null,"Total liabilities & equity",null,{"$f":"H78+H79","v":13750.251352967998},null,null,13879.598656600001,14775.018812019,16023.758428523,14291.018672999999,13758.687368153001]
[]
[null,null,null,null,"Direct",null,null,null,null,null,{"$f":"SUMPRODUCT(K57:K80*$I$57:$I$80)","v":11133.267750764802},{"$f":"SUMPRODUCT(L57:L80*$I$57:$I$80)","v":11390.8201662186},{"$f":"SUMPRODUCT(M57:M80*$I$57:$I$80)","v":11954.81757886032},{"$f":"SUMPRODUCT(N57:N80*$I$57:$I$80)","v":10875.681086568},{"$f":"SUMPRODUCT(O57:O80*$I$57:$I$80)","v":10006.910273809122}]
[null,null,null,null,"Financing",null,null,null,null,null,{"$f":"SUMPRODUCT(K57:K80*$J$57:$J$80)","v":11133.2677507648},{"$f":"SUMPRODUCT(L57:L80*$J$57:$J$80)","v":11390.8201662186},{"$f":"SUMPRODUCT(M57:M80*$J$57:$J$80)","v":11954.81757886032},{"$f":"SUMPRODUCT(N57:N80*$J$57:$J$80)","v":10875.681086567998},{"$f":"SUMPRODUCT(O57:O80*$J$57:$J$80)","v":10006.910273809121}]
[]
[null,null,null,null,"Average",null,null,null,null,null,{"$f":"AVERAGE(J83:K83)","v":11133.2677507648},{"$f":"AVERAGE(K83:L83)","v":11262.0439584917},11672.818872539461,11415.24933271416,10441.295680188559]
[null,null,null,null,"ROIC",null,null,null,null,null,{"$f":"K22/K85","v":6.9879184599354716E-2},{"$f":"L22/L85","v":8.5884321896060822E-2},0.11635629115322184,0.12812957839095318,0.14240012078574088]
[]
[null,null,null,"Financial Ratios & Other Information"]
[null,null,null,null,"Current Ratio",null,null,{"$f":"H63/H74","v":0.93333333333333357},null,null,0.70743801652892579,1.0804878048780486,1.4724238026124818,0.86534372785258695,1.0550742574257426]
[null,null,null,null,"Debt-to-Total Capital",null,null,{"$f":"(H71+H72+H75)/(H71+H72+H75+H79)","v":0.47215231425757742},null,null,0.50652796942999678,0.47920711147440481,0.4054121983914209,0.5065529070278828,0.68490014997237358]
[null,null,null,null,"S&P Long-term Debt Rating",null,null,"BBB",null,null,"BBB-","BBB-","BBB-","BBB+","BBB+"]
[null,null,null,null,"Shares outstanding",null,null,169.2,null,null,170.4,174.2,175.2,171,161]
[null,null,null,null,"Stock price per share",null,null,null,null,null,67.67,101.62,151.32,192.69,143.57]
[]
[]
[null,null,null,"Source:    Adapted from data from Capital IQ, accessed April 2016."]
[null,null,null,"Note:       The September figure is for the last twelve months ending September 30, 2015"]
[]
[null,null,null,"ROIC and Growth"]

{"sheet":"Exhibit 11","index":9,"n_rows":17,"n_cols":6,"rows_kept":17,"cut":false,"hidden":false,"merged":[[3,1,3,2],[3,4,3,5],[4,1,4,2],[4,4,4,5],[16,0,16,5]]}
["Exhibit 11     Current Market Rates as of December 18, 2015"]
[]
[]
[null,"US Treasury Yields",null,null,"Corporate Bond Yields"]
[null,"(constant maturity)",null,null,"(10-year maturity)"]
[null,"Maturity                ","Yield",null,"Credit Rating","Yield"]
[]
[null,"6 months",4.7000000000000002E-3,null,"AAA",2.93E-2]
[null,"1 year",6.7000000000000002E-3,null,"AA",3.27E-2]
[null,"2 years",9.7000000000000003E-3,null,"A",3.4299999999999997E-2]
[null,"3 years",1.2699999999999999E-2,null,"BBB",4.2799999999999998E-2]
[null,"5 years",1.67E-2,null,"BB",6.2100000000000002E-2]
[null,"10 years",2.1899999999999999E-2,null,"B",8.3099999999999993E-2]
[null,"30 years",2.9000000000000001E-2,null,"CCC",{"$f":"C13+0.1665","v":0.18840000000000001}]
[]
[]
["Source: Compiled from Federal Reserve, Selected Interest Rates (Daily)-H.15; Bonds."]

{"sheet":"Graph","index":10,"n_rows":54,"n_cols":16,"rows_kept":54,"cut":false,"hidden":false,"merged":[]}
[]
[null,null,null,"ROIC"]
[null,null,null,null,2011,2012,2013,"2014","Sep 2015",{"$f":"'NS Projections'!G4","v":2015},{"$f":"'NS Projections'!H4","v":2016},{"$f":"'NS Projections'!I4","v":2017},{"$f":"'NS Projections'!J4","v":2018},{"$f":"'NS Projections'!K4","v":2019},{"$f":"'NS Projections'!L4","v":2020},{"$f":"'NS Projections'!M4","v":2021}]
[null,null,null,"Historic",{"$f":"'NS Historic ROIC'!K86","v":0},{"$f":"'NS Historic ROIC'!L86","v":0},{"$f":"'NS Historic ROIC'!M86","v":0},{"$f":"'NS Historic ROIC'!N86","v":0},{"$f":"'NS Historic ROIC'!O86","v":0}]
[null,null,null,"Projected",null,null,null,null,null,{"$f":"'NS Projections'!G32","v":3.5288948500335309},{"$f":"'NS Projections'!H32","v":1.3464504430089763},{"$f":"'NS Projections'!I32","v":0.98262083339142081},{"$f":"'NS Projections'!J32","v":0.81961684679897662},{"$f":"'NS Projections'!K32","v":0.7262115940440802},{"$f":"'NS Projections'!L32","v":0.66385761117740416},{"$f":"'NS Projections'!M32","v":0.59055874460864921}]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[null,null,null,"Growth"]
[null,null,null,null,2011,2012,2013,"2014","Sep 2015",{"$f":"J$3","v":2015},{"$f":"K$3","v":2016},2017,2018,2019,2020,2021]
[null,null,null,"Historic",{"$f":"'NS Historic ROIC'!K88","v":0},{"$f":"'NS Historic ROIC'!L88","v":-1.1815252416756183E-2},{"$f":"'NS Historic ROIC'!M88","v":1.85688405797102E-2},{"$f":"'NS Historic ROIC'!N88","v":3.3703868385949409E-2},{"$f":"'NS Historic ROIC'!O88","v":-6.5467997247074972E-2}]
[null,null,null,"Projected",null,null,null,null,null,{"$f":"'NS Projections'!G9","v":0},{"$f":"'NS Projections'!H9","v":4.6013710207530867E-3},{"$f":"'NS Projections'!I9","v":4.4587773415591725E-2},{"$f":"'NS Projections'!J9","v":4.438478747203578E-2},{"$f":"'NS Projections'!K9","v":4.4554879616142573E-2},{"$f":"'NS Projections'!L9","v":3.0022147485850192E-2},{"$f":"'NS Projections'!M9","v":2.4999999999999911E-2}]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[null,null,null,"Cap Exp/Dep"]
[null,null,null,null,2011,2012,2013,"2014","Sep 2015",{"$f":"J$3","v":2015},{"$f":"K$3","v":2016},2017,2018,2019,2020,2021]
[null,null,null,"Historic",{"$f":"'NS Historic ROIC'!K30","v":2.5058004640371228},{"$f":"'NS Historic ROIC'!L30","v":2.4465065502183405},{"$f":"'NS Historic ROIC'!M30","v":2.1517467248908297},{"$f":"'NS Historic ROIC'!N30","v":2.2271293375394321},{"$f":"'NS Historic ROIC'!O30","v":2.4985104270109235}]
[null,null,null,"Projected",null,null,null,null,null,{"$f":"'NS Projections'!G34","v":2.2545281220209725},{"$f":"'NS Projections'!H34","v":1.8973418881759854},{"$f":"'NS Projections'!I34","v":1.6828193832599119},{"$f":"'NS Projections'!J34","v":1.6355932203389831},{"$f":"'NS Projections'!K34","v":1.5729421352893236},{"$f":"'NS Projections'!L34","v":1.5},{"$f":"'NS Projections'!M34","v":1.5}]

{"sheet":"Exchange Example","index":11,"n_rows":27,"n_cols":10,"rows_kept":27,"cut":false,"hidden":false,"merged":[]}
[]
[null,"Pre-Merger"]
[null,null,null,null,"Shares","Price","Market Cap","CoC","CF","Value"]
[null,null,null,"A Company",1000,{"$f":"J4/E4","v":200},{"$f":"E4*F4","v":200000},0.05,10000,{"$f":"I4/H4","v":200000}]
[null,null,null,"T Company",800,{"$f":"J5/E5","v":180},{"$f":"E5*F5","v":144000},0.05,7200,{"$f":"I5/H5","v":144000}]
[]
[null,null,null,"Pre-transaction Ratio",null,{"$f":"F5/F4","v":0.9}]
[]
[null,"Synergy and Premium"]
[null,null,null,"Synergy",null,null,100000]
[null,null,null,"Market Value",null,null,{"$f":"G4+G5+G10","v":444000}]
[null,null,null,"Premium",null,0.5,{"$f":"F12*G5","v":72000}]
[null,null,null,"Exchange Offer with Premium",null,{"$f":"F7*(1+F12)","v":1.35}]
[]
[null,"Share Distribution"]
[null,null,null,"T Company",null,{"$f":"F13*E5","v":1080},{"$f":"F16/F18","v":0.51923076923076927}]
[null,null,null,"A Company",null,{"$f":"E4","v":1000},{"$f":"F17/F18","v":0.48076923076923078}]
[null,null,null,"Total",null,{"$f":"F16+F17","v":2080}]
[]
[null,"Value of New Company"]
[null,null,null,"T Company Value",null,{"$f":"F16","v":1080},{"$f":"G11*G16","v":230538.46153846156}]
[null,null,null,"T Price Price",null,null,{"$f":"G21/E5","v":288.17307692307696}]
[null,null,null,"T Implied Premium",null,null,{"$f":"G22/F5-1","v":0.60096153846153877}]
[]
[null,null,null,"A Company Value",null,{"$f":"F17","v":1000},{"$f":"G11*G17","v":213461.53846153847}]
[null,null,null,"A Price",null,null,{"$f":"G25/E4","v":213.46153846153848}]
[null,null,null,"A Price Decline",null,null,{"$f":"G26/F4-1","v":6.7307692307692513E-2}]

{"sheet":"Exelon","index":12,"n_rows":27,"n_cols":13,"rows_kept":27,"cut":false,"hidden":false,"merged":[]}
[]
[null,null,null,"Low","High"]
[null,null,"Synergies",180,300,null,null,"Target Price",null,22]
[null,null,null,null,null,null,null,"Target Shares",null,264]
[null,null,"Premium without A price Decline",5800,null,null,null,"Market Cap",null,{"$f":"J3*J4","v":5808}]
[]
[null,null,"Premium with A price Decline",{"$f":"E7*D5","v":5800},1]
[]
[null,null,"Cost to Achieve",100]
[]
[null,null,"Probability of Achieving",1]
[]
[null,null,"Tax Rate",0]
[]
[null,null,null,1,10]
[null,null,"Applied",{"$f":"E3","v":300},{"$f":"E3","v":300}]
[]
[null,null,null,1,2,3,4,5,6,7,8,9,10]
[null,null,"Synergy",{"$f":"interpolate_look_up(D18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(E18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(F18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(G18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(H18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(I18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(J18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(K18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(L18,15:15,16:16)","v":300},{"$f":"interpolate_look_up(M18,15:15,16:16)","v":300}]
[]
[null,null,"After-Tax",{"$f":"D19*(1-$D$13)*$D$11","v":300},{"$f":"E19*(1-$D$13)*$D$11","v":300},300,300,300,300,300,300,300,300]
[]
[null,null,"Discount Rate",0.105]
[]
[null,null,"NPV",{"$f":"NPV(D23,D21:M21)","v":1804.4318221295059}]
[null,null,"Terminal",{"$f":"NPV(D23,E26:M26)","v":1163.2456936897536},0,0,0,0,0,0,0,0,{"$f":"M21/$D$23","v":2857.1428571428573}]
[null,null,"Total",{"$f":"SUM(D25:D26)","v":2967.6775158192595}]

{"sheet":"Download","index":13,"n_rows":0,"n_cols":0,"rows_kept":0,"cut":false,"hidden":false,"merged":[]}

{"sheet":"Session 3 Questions","index":14,"n_rows":19,"n_cols":2,"rows_kept":19,"cut":false,"hidden":false,"merged":[]}
[]
[]
[null,"Question 1"]
[]
[null,"Go to Summary Page"]
[null,"Compute the P/E ratio with the assumptions from the value driver formula"]
[]
[null,"Question 2"]
[]
[null,"Go to Simulation Model"]
[null,"Compute the ROIC with Interpoilation"]
[null,"Compute the Value of Dividends"]
[]
[null,"Question 3"]
[]
[null,"Retrieve Data on Companies"]
[]
[]
[null,"Queston 4"]

{"sheet":"Tickers","index":15,"n_rows":12,"n_cols":5,"rows_kept":12,"cut":false,"hidden":false,"merged":[]}
[]
[]
[null,null,null,"Yahoo","Market Watch"]
[null,null,"BNSF Railway"]
[null,null,"Canadian National Railway","CNR.TO","https://www.marketwatch.com/investing/stock/cnr/financials/balance-sheet?countrycode=ca"]
[null,null,"Canadian Pacific Railway","CP.TO","CP"]
[null,null,"CSX Corp","CSX","CSX"]
[null,null,"Norfolk Southern Corp","NSC","NSC"]
[null,null,"Union Pacific Corp","UNP","UNP"]
[null,null,"Nestle","NSRGY","NSRGY"]
[null,null,"Amazon","AMZN","AMZN"]
[null,null,"GE","GE","GE"]