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					Betas
Prof. H. Pirotte - SBS/ULB
 Nov 2003

Data

           Pre-tax cost of debt
                             tc
          Market value of debt
                   Share price
            Number of shares
                              rf
                         Rm-rf

Calculations
                          Beta
                    MV Equity
                   Total Value
                           D/V
                           E/V
                      kd(1-tc)
                            ke
                       WACC




                                   C



                                   D




                                   E

                                       ke



                                       kd
                                       D/V
                                       E/V
WACC
    Simple

                             Case 1             Case 2        Case 2
           Rm-rf              5.40%              5.40%         5.40%
                rf            8.82%              8.82%         8.82%
            Beta                1.79               1.79          0.81
              ke             18.49%             18.49%        13.19%
              kd              9.73%              9.31%         9.73%
               tc               34%                34%           34%
               E                96%                96%           98%
               D                 4%                 4%            2%
          WACC               18.00%             17.99%        13.07%


    Commercial Beta

                     tc                           34%

A                    Beta equity          D/E             Beta assets
    Boeing                         0.81          0.018          0.80

    Grumman                         0.8          1.756          0.37
    Northtrop                      0.74          1.288          0.40
    Lockheed                       0.87          1.182          0.49
    Average                                                     0.42

B Weigths of Commercial for Boeing
               ALL             Comm aircraft              %
  Revenues              20623                    14305          69%
  Profit                   922                    1165         126%
  Assets                13278                     6675          50%

C Revenues                    0.9686
  Profit                      0.7211
  Assets                      1.1771

D Back to Equity Beta
  Revenues                    0.9802
  Profit                      0.7296
  Assets                      1.1911

E rf                  8.82%
  market premium      5.40%
  ke          Revenues      14.11%
              Profit        12.76%
              Assets        15.25%

    kd                        9.31%
    D/V                          2%
    E/V                         98%
WACC   Revenues   13.95%
       Profit     12.63%
       Assets     15.07%
NPVs
Prof. H. Pirotte - SBS/ULB
 Nov 2003
                                         12%
                                    3483.272
        1990               -93.72      -93.72
        1991               -957.3   -854.732
        1992             -1451.76   -1157.33
        1993             -1078.82   -767.883
        1994              -711.98   -452.476
        1995              -229.97   -130.491
        1996              -681.74   -345.391
        1997              1806.97   817.3815
        1998              1914.06   773.0567
        1999              1676.05   604.4004
        2000              1821.34   586.4227
        2001              1716.79   493.5361
        2002              1717.27   440.7804
        2003                1590     364.387
        2004              1798.97   368.1049
        2005               616.79   112.6852
        2006              1484.73   242.1916
        2007              2173.59   316.5711
        2008              1641.97   213.5211
        2009               677.92   78.71111
        2010              1886.97   195.6161
        2011              2331.34   215.7879
        2012              2576.47   212.9259
        2013              2213.18    163.306
        2014              2104.74   138.6647
        2015              2285.77   134.4565
        2016              2353.81    123.624
        2017              2423.88   113.6644
        2018              2496.06   104.5082
        2019               2568.6   96.02268
        2020              2641.01   88.15143
        2021              2717.53   80.98706
        2022              2798.77   74.47157
        2023              2882.44   68.48028
        2024              2964.44   62.88251
THE BOEING 777 CASE


Historic Boeing Sales Trends
Calculation of Pattern of Yearly Unit Sales over First 20 Years
                               Years of Deliveries
        Aircraft Model:                       1               2           3               4
                           707                8              77          91              80
                           727                6              95         111             135
                           737                4             105         114              37
                           747                4              92          69              30
                           757                2              25          18              36
                           767               20              55          29              25

Average                                     7              75           72              57
% of 10 year                            1.42%          14.50%       13.95%          11.08%

                                         Exhibit 6
                                  Boeing 777 - Cash Flows

Assumptions
Price per Plane                            130
WCR as % of sales                        9.8%
GS&A exp (% of sales)                    4.0%
R&D exp (% of sales)                     3.0% (excluding 1990-1995)
Cap Ex (% of sales)                      0.1% (excluding 1990-1994 and years before introduction of derivativ
Depreciation                  double digit accelerated method
Total # of Planes yrs 1-10               1000
Total # of Planes yrs 11-20              1000
WACC                                   20.0%
Inflation                                3.0%
Marginal Effective Tax Rate            34.0%

                                                                                      1990
Revenues
Planes Delivered
Price per Plane
Total Revenues

Cost of Goods Sold
Gross Profit

Depreciation                                                                          0.00
GS&A Expense
Operating Profit                                                                      0.00
R&D Expense                                                                         142.00

Pre-tax Profit                                                                     (142.00)
Taxes (or Tax Credit)                                                               (48.28)
After-tax Profit                                                                    (93.72)
Capital Expenditure                                                                  0.00
Depreciation Add-back
Change in Wkg. Capital
Annual Free Cash Flow                                                              (93.72)
PV(FCF)                                                                             -93.72
                                 TOTAL VALUE           -267.38
                                 IRR                     18.9%




Boeing 777 - Depreciation
1991 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
1992 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
1993 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
1994 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
2003 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
2004 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp
2008 Cap Ex (net, beg. year)
Yearly Depreciation Expense
Cumulative Depreciation Exp

Total Annual Depreciation Expense


Sensitivity Analysis: IRR
                                                Unit Price ($millions)

                                      -267.38             100              110         120
                                          700       -1,363.21        -1,207.69   -1,052.16
                                          800       -1,201.87        -1,030.21     -858.55
   Unit Volume (first 10 yrs.)            900       -1,040.52          -852.72     -664.93
                                         1000         -879.17          -675.24     -471.31
                                         1100         -717.82          -497.76     -277.69
                                         1200         -556.47          -320.27      -84.07

                                                R&D Exp./Sales

                                      -267.38             1.0%           2.0%        3.0%
             1.0%    929.32    692.92    456.52
             2.0%    688.02    451.62    215.22
GS&A/Sales   3.0%    446.72    210.32    -26.08
             4.0%    205.42    -30.98   -267.38
             5.0%    -35.88   -272.28   -508.68
             6.0%   -277.18   -513.58   -749.98
             7.0%   -518.48   -754.88   -991.28
                 5                  6             7                 8           9           10
                68                 34            38                61          83           18
               155                160           115                54          33           41
                29                 22            23                55          51           41
                30                 22            21                27          20           32
                35                 40            48                51          77           81
                27                 37            40                37          60           62
                                     Sum of avg of yrs 1-10                                516
               57                 53            48                48          54           46
           11.11%             10.17%         9.21%             9.21%      10.47%        8.88%




roduction of derivatives)




              1991               1992          1993              1994        1995         1996

                                                                               14          145
                                                                          $130.00      $133.90
                                                                         1,847.55    19,418.96

                                                                         1,662.79    16,506.12
                                                                           184.75     2,912.84

             40.00             96.00        116.40            124.76      112.28        101.06
                                                                           73.90        776.76
           (40.00)            (96.00)      (116.40)           (124.76)     (1.43)     2,035.03
           865.00           1,340.00      1,240.00             840.00     240.00        582.57

           (905.00)         (1,436.00)    (1,356.40)          (964.76)    (241.43)    1,452.46
           (307.70)           (488.24)      (461.18)          (328.02)     (82.09)      493.84
           (597.30)           (947.76)      (895.22)          (636.74)    (159.34)      958.62
400.00        600.00        300.00         200.00            1.85           19.42
 40.00         96.00        116.40         124.76          112.28          101.06
                                                           181.06        1,722.00
(957.30)    (1,451.76)   (1,078.82)        (711.98)       (229.97)        (681.74)
 -797.75 -1008.166667 -624.3194444    -343.3553241    -92.4188312    -228.3125476




  1991          1992          1993           1994           1995            1996
400.00        360.00        324.00         291.60         262.44          236.20
 40.00         36.00         32.40          29.16          26.24           23.62
 40.00         76.00        108.40         137.56         163.80          187.42
              600.00        540.00         486.00         437.40          393.66
               60.00         54.00          48.60          43.74           39.37
               60.00        114.00         162.60         206.34          245.71
                            300.00         270.00         243.00          218.70
                             30.00          27.00          24.30           21.87
                             30.00          57.00          81.30          103.17
                                           200.00         180.00          162.00
                                            20.00          18.00           16.20
                                            20.00          38.00           54.20




 40.00         96.00        116.40         124.76         112.28          101.06




    130
-896.64
-686.89
-477.13
-267.38
 -57.63
 152.13




  4.0%          5.0%
   220.12      -16.28
   -21.18     -257.58
  -262.48     -498.88
  -503.78     -740.18
  -745.08     -981.48
  -986.38   -1,222.78
-1,227.68   -1,464.08
       11          12          13          14          15          16
       11          59          19          10           4          11
       92          91          91          67         118         136
       25          40          77          92         108          95
       67          73          53          25          23          16
       90          90          90
       60          48          36

      58          67          61          49          63          65
  11.14%      12.95%      11.82%       9.40%      12.26%      12.50%




     1997        1998        1999        2000        2001        2002

      140         111         111         102          92          92
  $137.92     $142.05     $146.32     $150.71     $155.23     $159.88
19,244.23   15,737.95   16,257.35   15,333.42   14,289.29   14,717.97

15,202.94   12,275.60   12,518.16   11,653.40   10,859.86   11,038.48
 4,041.29    3,462.35    3,739.19    3,680.02    3,429.43    3,679.49

    90.95       82.72       77.75       75.63       75.00       75.00
   769.77      629.52      650.29      613.34      571.57      588.72
 3,180.57    2,750.11    3,011.14    2,991.06    2,782.86    3,015.77
   577.33      472.14      487.72      460.00      428.68      441.54

 2,603.24    2,277.97    2,523.42    2,531.05    2,354.18    2,574.23
   885.10      774.51      857.96      860.56      800.42      875.24
 1,718.14    1,503.46    1,665.46    1,670.49    1,553.76    1,698.99
      19.24          15.74          16.26         15.33          14.29          14.72
      90.95          82.72          77.75         75.63          75.00          75.00
     (17.12)       (343.62)         50.90        (90.54)       (102.33)         42.01
   1,806.97       1,914.06       1,676.05      1,821.34       1,716.79       1,717.27
504.2919279    445.1493361    324.8304464   294.1558052    231.0598368    192.6028142




       1997           1998          1999           2000           2001          2002
     212.58         191.32        171.32         151.32         131.32        111.32
      21.26          20.00         20.00          20.00          20.00         20.00
     208.68         228.68        248.68         268.68         288.68        308.68
     354.29         318.86        286.98         256.98         226.98        196.98
      35.43          31.89         30.00          30.00          30.00         30.00
     281.14         313.02        343.02         373.02         403.02        433.02
     196.83         177.15        159.43         143.49         128.49        113.49
      19.68          17.71         15.94          15.00          15.00         15.00
     122.85         140.57        156.51         171.51         186.51        201.51
     145.80         131.22        118.10         106.29          95.66         85.66
      14.58          13.12         11.81          10.63          10.00         10.00
      68.78          81.90         93.71         104.34         114.34        124.34




      90.95          82.72         77.75          75.63          75.00         75.00
             17                 18          19          20
             21                  7           9           8
            131                 94          26          11
             82                 67         115         141
             24                 35          23          24


sum of avg of yrs 11-20                               566
            65                 51          43          46
        12.50%              9.84%       8.38%       8.91%




          2003                2004        2005        2006        2007        2008

           105              89             111         130         118          94
       $164.68         $169.62         $174.71     $179.95     $185.35     $190.91
     17,233.97       15,066.42       19,468.56   23,307.53   21,911.40   17,944.00

     12,925.47       11,299.82       16,548.27   18,879.10   17,310.01   13,996.32
      4,308.49        3,766.61        2,920.28    4,428.43    4,601.39    3,947.68

         99.46              121.48      116.83      112.65      100.20      129.20
        689.36              602.66      778.74      932.30      876.46      717.76
      3,519.67            3,042.47    2,024.71    3,383.48    3,624.73    3,100.72
        517.02              451.99      584.06      699.23      657.34      538.32

      3,002.65            2,590.47    1,440.65    2,684.25    2,967.39    2,562.40
      1,020.90              880.76      489.82      912.65    1,008.91      871.22
      1,981.75            1,709.71      950.83    1,771.61    1,958.48    1,691.19
     244.64       244.64          19.47         23.31         21.91         567.22
      99.46       121.48         116.83        112.65        100.20         129.20
     246.57      (212.42)        431.41        376.22       (136.82)       (388.81)
   1,590.00     1,798.97         616.79      1,484.73      2,173.59       1,641.97
148.6075885   140.115536    40.03276579   80.30595524   97.97085118    61.67400016




      2003         2004           2005          2006           2007           2008
     91.32        71.32          51.32         31.32          11.32            0.00
     20.00        20.00          20.00         20.00          11.32            0.00
    328.68       348.68         368.68        388.68         400.00         400.00
    166.98       136.98         106.98         76.98          46.98          16.98
     30.00        30.00          30.00         30.00          30.00          16.98
    463.02       493.02         523.02        553.02         583.02         600.00
     98.49        83.49          68.49         53.49          38.49          23.49
     15.00        15.00          15.00         15.00          15.00          15.00
    216.51       231.51         246.51        261.51         276.51         291.51
     75.66        65.66          55.66         45.66          35.66          25.66
     10.00        10.00          10.00         10.00          10.00          10.00
    134.34       144.34         154.34        164.34         174.34         184.34
    244.64       220.18         198.16        178.35         160.51         144.46
     24.46        22.02          19.82         17.83          16.05          14.45
     24.46        46.48          66.30         84.13         100.18         114.63
                 244.64         220.18        198.16         178.35         160.51
                  24.46          22.02         19.82          17.83          16.05
                  24.46          46.48         66.30          84.13         100.18
                                                                            567.22
                                                                             56.72
                                                                             56.72

     99.46       121.48         116.83        112.65         100.20         129.20
     2009        2010        2011        2012        2013        2014

      123         125         125          98          84          89
  $196.64     $202.54     $208.61     $214.87     $221.32     $227.96
24,103.23   25,316.97   26,076.48   21,133.07   18,550.25   20,321.64

20,487.75   20,506.75   20,600.42   16,483.79   14,283.69   15,444.45
 3,615.49    4,810.22    5,476.06    4,649.27    4,266.56    4,877.19

    96.99       76.84       65.81       61.68       57.96       54.61
   964.13    1,012.68    1,043.06      845.32      742.01      812.87
 2,554.37    3,720.71    4,367.19    3,742.27    3,466.59    4,009.72
   723.10      759.51      782.29      633.99      556.51      609.65

 1,831.27    2,961.20    3,584.89    3,108.28    2,910.08    3,400.07
   622.63    1,006.81    1,218.86    1,056.82      989.43    1,156.02
 1,208.64    1,954.39    2,366.03    2,051.46    1,920.65    2,244.05
      24.10         25.32         26.08         21.13          18.55          20.32
      96.99         76.84         65.81         61.68          57.96          54.61
     603.60        118.95         74.43       (484.45)       (253.12)        173.60
     677.92      1,886.97      2,331.34      2,576.47       2,213.18       2,104.74
21.21942412   49.21971858   50.67556442   46.66991716    33.40778529    26.47573374




      2009          2010          2011           2012           2013          2014
       0.00          0.00         0.00            0.00          0.00           0.00
       0.00          0.00         0.00            0.00          0.00           0.00
    400.00        400.00        400.00         400.00         400.00        400.00
       0.00          0.00         0.00            0.00          0.00           0.00
       0.00          0.00         0.00            0.00          0.00           0.00
    600.00        600.00        600.00         600.00         600.00        600.00
       8.49          0.00         0.00            0.00          0.00           0.00
       8.49          0.00         0.00            0.00          0.00           0.00
    300.00        300.00        300.00         300.00         300.00        300.00
     15.66           5.66         0.00            0.00          0.00           0.00
     10.00           5.66         0.00            0.00          0.00           0.00
    194.34        200.00        200.00         200.00         200.00        200.00
    130.01        117.01        104.78          92.55          80.32         68.08
     13.00         12.23         12.23          12.23          12.23         12.23
    127.63        139.86        152.10         164.33         176.56        188.79
    144.46        130.01        117.01         104.78          92.55         80.32
     14.45         13.00         12.23          12.23          12.23         12.23
    114.63        127.63        139.86         152.10         164.33        176.56
    510.50        459.45        413.50         372.15         334.94        301.44
     51.05         45.94         41.35          37.22          33.49         30.14
    107.77        153.72        195.07         232.28         265.78        295.92

     96.99         76.84         65.81          61.68          57.96         54.61
     2015        2016        2017        2018        2019        2020

       89          89          89          89          89          89
  $234.79     $241.84     $249.09     $256.57     $264.26     $272.19
20,931.29   21,559.23   22,206.00   22,872.18   23,558.35   24,265.10

15,907.78   16,385.01   16,876.56   17,382.86   17,904.35   18,441.48
 5,023.51    5,174.21    5,329.44    5,489.32    5,654.00    5,823.62

    52.83       52.83       52.83       52.83       47.52       35.28
   837.25      862.37      888.24      914.89      942.33      970.60
 4,133.43    4,259.02    4,388.38    4,521.61    4,664.15    4,817.74
   627.94      646.78      666.18      686.17      706.75      727.95

 3,505.49    3,612.24    3,722.20    3,835.45    3,957.40    4,089.78
 1,191.87    1,228.16    1,265.55    1,304.05    1,345.52    1,390.53
 2,313.63    2,384.08    2,456.65    2,531.39    2,611.89    2,699.26
      20.93        21.56         22.21         22.87         23.56         24.27
      52.83        52.83         52.83         52.83         47.52         35.28
      59.75        61.54         63.38         65.29         67.24         69.26
   2,285.77     2,353.81      2,423.88      2,496.06      2,568.60      2,641.01
23.96084978   20.5616892   17.64486084   15.14190356   12.98495067   11.12585369




      2015         2016          2017          2018          2019          2020
       0.00         0.00         0.00           0.00         0.00           0.00
       0.00         0.00         0.00           0.00         0.00           0.00
    400.00       400.00        400.00        400.00        400.00        400.00
       0.00         0.00         0.00           0.00         0.00           0.00
       0.00         0.00         0.00           0.00         0.00           0.00
    600.00       600.00        600.00        600.00        600.00        600.00
       0.00         0.00         0.00           0.00         0.00           0.00
       0.00         0.00         0.00           0.00         0.00           0.00
    300.00       300.00        300.00        300.00        300.00        300.00
       0.00         0.00         0.00           0.00         0.00           0.00
       0.00         0.00         0.00           0.00         0.00           0.00
    200.00       200.00        200.00        200.00        200.00        200.00
     55.85        43.62         31.39         19.15          6.92           0.00
     12.23        12.23         12.23         12.23          6.92           0.00
    201.03       213.26        225.49        237.72        244.64        244.64
     68.08        55.85         43.62         31.39         19.15           6.92
     12.23        12.23         12.23         12.23         12.23           6.92
    188.79       201.03        213.26        225.49        237.72        244.64
    271.30       242.94        214.58        186.22        157.86        129.49
     28.36        28.36         28.36         28.36         28.36         28.36
    324.28       352.64        381.00        409.37        437.73        466.09

     52.83        52.83         52.83         52.83         47.52         35.28
     2021        2022        2023        2024

       89          89          89          89
  $280.36     $288.77     $297.43     $306.35
24,993.05   25,742.85   26,515.13   27,310.58

18,994.72   19,564.56   20,151.50   20,756.04
 5,998.33    6,178.28    6,363.63    6,554.54

    28.36       28.36       28.36       16.05
   999.72    1,029.71    1,060.61    1,092.42
 4,970.25    5,120.21    5,274.67    5,446.07
   749.79      772.29      795.45      819.32

 4,220.46    4,347.92    4,479.21    4,626.75
 1,434.96    1,478.29    1,522.93    1,573.09
 2,785.50    2,869.63    2,956.28    3,053.65
     24.99         25.74         26.52        27.31
     28.36         28.36         28.36        16.05
     71.34         73.48         75.68        77.95
  2,717.53      2,798.77      2,882.44     2,964.44
9.54016468   8.187795054   7.027152174   6.02254788




     2021          2022          2023         2024
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   400.00        400.00        400.00       400.00
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   600.00        600.00        600.00       600.00
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   300.00        300.00        300.00       300.00
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   200.00        200.00        200.00       200.00
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   244.64        244.64        244.64       244.64
      0.00          0.00         0.00          0.00
      0.00          0.00         0.00          0.00
   244.64        244.64        244.64       244.64
   101.13         72.77         44.41        16.05
    28.36         28.36         28.36        16.05
   494.45        522.81        551.17       567.22

    28.36         28.36         28.36        16.05
                                                                                             Graph



                                                                                 Cumulative Project Cash Flows
                                                                                 Undiscounted and Discounted


                           6,000.00




                           4,000.00




                           2,000.00
Billions of U.S. Dollars




                                0.00




                           (2,000.00)




                           (4,000.00)




                           (6,000.00)
                                        1   2   3   4   5   6   7   8   9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
                                                                                                 Year of Project Life

                                Undiscounted        Discounted, K=10%        Discounted, K=12%         Discounted, K=15%   Discounted, K=18%   Discounted, K=20%




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