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EXPERT VALUATION REPORT - Jefferies and Company

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EXPERT VALUATION REPORT - Jefferies and Company Powered By Docstoc
					EXPERT VALUATION REPORT

Updated as of October 22, 2004

Co-Authors
Bill Derrough, Managing Director and Co-Head of the Recapitalization and Restructuring Group
Michael Henkin, Senior Vice President, Recapitalization and Restructuring Group
EXPERT REPORT


  The following pages contain a valuation analysis of Federal-Mogul Corporation (“Federal-Mogul” or the “Company”) prepared by Jefferies & Company, Inc.
  (“Jefferies”).
  The information contained in this presentation was based upon publicly available information obtained by Jefferies or information furnished by the Company.
  Jefferies has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information, and the
  conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fair in all respects.
  All budgets, projections, financial analyses, reports and other information with respect to Federal-Mogul and its respective subsidiaries’ operations contained
  herein have been prepared by the management of Federal-Mogul or are derived from such budgets, projections, financial analyses, reports and other
  information of Federal-Mogul which involves numerous and significant subjective determinations made by the management of Federal-Mogul. The
  estimates, budgets and projections contained herein may or may not be achieved and differences between projected results and those actually achieved
  may be material. With respect to Federal-Mogul’s financial projections examined by Jefferies, Jefferies assumed that they were reasonably prepared on
  bases reflecting the best currently available estimates and good faith judgments of the management of Federal-Mogul as to the future performance of
  Federal-Mogul. Jefferies’ valuation analysis assumes that operating results projected by the Company will be achieved in all material respects. To the
  extent that the valuation is dependent upon the Company’s achievement of its projections, the valuation must be considered speculative. It should be
  understood that, although subsequent developments may affect Jefferies’ conclusions, Jefferies does not have any obligation to update, revise or reaffirm its
  estimates. Neither Jefferies nor any of its advisors or accountants take any responsibility for the accuracy or completeness of any of the accompanying
  material. Jefferies has not been requested to, and did not make an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise),
  solvency or financial condition of Federal-Mogul or any of its respective subsidiaries or affiliates, nor has Jefferies been furnished with any such evaluations
  or appraisals.
  The preparation of the material contained herein involves various determinations as to the most appropriate and relevant methods of financial analyses and
  the application of those methods to particular circumstances and, therefore, such an opinion is not readily susceptible to summary description. Furthermore,
  Jefferies did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and
  relevance of each analysis and factor. Accordingly, Jefferies’ analyses must be considered as a whole. Considering any portion of such analyses and of the
  factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the conclusions
  expressed herein. In its analyses, Jefferies made many assumptions with respect to industry performance, general business and economic conditions and
  other matters, many of which are beyond the control of Federal-Mogul. Any estimates contained in these analyses are not necessarily indicative of actual
  values or predictive of future results or values, which may be significantly more or less favorable than as set forth herein. Based on Jefferies' work in this
  case and the accuracy of Federal-Mogul management's recent projections, Jefferies believes there is no valid reason to question the reasonableness of
  Federal-Mogul's budgets, projections and other financial analyses relied upon herein.



                                                                             i
TABLE OF CONTENTS


                                                                                                                                                          TAB

        Jefferies Qualifications....................................................................................................................... 1

        Executive Summary ........................................................................................................................... 2

        Valuation Analysis.............................................................................................................................. 3

        Appendix ............................................................................................................................................ 4

                Comparable Company Valuation Analysis ................................................................................A

                Comparable M&A Transaction Valuation Analysis....................................................................B

                Discounted Cash Flow Valuation Analysis ................................................................................C

                Restructured Debt Discount Analysis ........................................................................................D




                                                                                  ii
JEFFERIES QUALIFICATIONS
JEFFERIES QUALIFICATIONS
Background

          Jefferies is optimally positioned to opine on Federal-Mogul’s value due to the depth and breadth of its
          knowledge of securities valuation, restructuring and the public markets
                                                                 SECURITIES AND VALUATION CREDENTIALS

               Jefferies is one of the leading traders / market makers of equities in the United States
               − #1 volume trader of NASDAQ stocks(1)
               − Trader of 13% of NYSE(1)

               Jefferies has led or co-managed over $5.1 billion in 39 separate IPOs and secondary equity offerings YTD 2004

               #10 in mergers and acquisitions (“M&A”) transactions under $500 million(2)

               #1 ranked underwriter in 2002 to first half 2004 domestic single B new issues under $150 million

                                                             POST-RESTRUCTURING EQUITIES CREDENTIALS

               #1 trader of post restructuring equities

               One of the only firms to have dedicated equity research analysts for post-restructuring sector

               One of the only firms to have dedicated, integrated end-to-end post-restructured equities trading and market making capabilities

(1)   Source: Autex. For the period July 1, 2003 –June 30, 2004.
(2)   Source: Mergerstat. All announced U.S. based deals with transaction value of less than $500 million for 2003. Excludes certain transactions such as privatizations, buybacks, open market
      purchases, joint ventures, litigations, alliances and collars; full credit to each advisor.

                                                                                                 2
JEFFERIES QUALIFICATIONS


   Jefferies is an industry expert at trading and valuing post-reorganization equity securities

     Jefferies’ powerful sales and trading platform and distribution are key to its capabilities
     − 125 account execs cover over 2,000 institutional accounts, among largest on the Street
     − Ranked #1 in the trading and execution of small cap stocks according to 2001 Reuters Survey
     − Jefferies Execution Services handles approximately 13% of the reported trading volume on the NYSE
     − Makes markets in nearly 3,000 stocks
     − Top 5 trader in over 2,000 Nasdaq stocks (AutEx®, LTM June 30, 2004)
     − Over 100 research professionals follow more than 750 companies, including Federal-Mogul’s sector

     Jefferies is an industry expert at trading and valuing post-reorganization equity securities
     − The firm has strong standing in special situations and Bulletin Board trading
     − A leading trader of distressed and post Chapter 11 debt and equity securities
     − Farukh Z. Farooqi, Post-Reorganization Equity Analyst, and Joseph Von Meister, Senior Analyst of Distressed and Special
       Situations, specialize in sector




                                                                    3
JEFFERIES QUALIFICATIONS

          Jefferies dominates the trading of post-Chapter 11 equity securities

                                                                                                                        Jefferies Trading Rank
                                                                                        Jefferies Trading Rank
              Company                                  Ticker   Date of First Trade                                   (Date of First Trade through
                                                                                      (First year from first trade)
                                                                                                                         September 30, 2004)
Alderwoods Group                                        AWGI         01/03/02                       1                              2
Anacomp                                                ANCPA         02/05/02                  No trades(1)                        1
Arch Wireless                                           AWIN          5/30/02                       1                              1
Assisted Living                                         ASLC         01/09/02                       2                              2
Carmike Cinemas                                         CKEC         02/01/02                       3                              2
Chiquita Brands                                          CQB         03/20/02                       1                              4
Dade Behring                                            DADE         10/17/02                       1                              1
Factory Card Outlet                                     FCPO         05/07/02                  No trades(1)                        3
Genesis Health                                          GHVI         10/15/01                       2                              1
Joy Global                                              JOYG         06/08/01                       1                              1
Kindred Health                                          KIND         04/26/01                       6                              3
Kmart Holding Corp                                      KMRT         04/30/03                       1                              1
McLeodUSA                                               MCLD         04/18/02                       4                              6
Motient Corp.                                           MNCP         05/15/02                       2                              1
Pathmark Stores                                         PTMK         09/28/00                       4                              1
Pillowtex Corp.                                        PWTXQ         06/07/02                       1                              2
Sun Healthcare                                          SUNH         03/08/02                       1                              4
Washington Grp.                                         WGII         04/10/02                       1                              2




(1)   Only two brokers made a trade in these securities.
      Source: AutEx.

                                                                         4
JEFFERIES QUALIFICATIONS
Bill Derrough – Biography

       William Q. Derrough is Managing Director, Co-head of Jefferies’ Recapitalization and Restructuring Group and Head of the firm’s
       New York investment banking office where he oversees all investment banking activities. At Jefferies, Mr. Derrough works with a
       diverse group of clients and investors in a wide range of industries. Since joining Jefferies in early 1998, Mr. Derrough has been
       actively involved in over 40 restructurings, recapitalizations, financings, M&A and other transactions

       Prior Professional Experience
       − Doyle & Boissiere, Principal (1997 – 1998)
       − Chanin and Company, Senior Vice President (1991 – 1997)
       − Salomon Brothers, Financial Analyst (1988 – 1991)

       Education and Affiliations
       − BA from University of California, Berkeley
       − Co-Chair, American Bankruptcy Institute’s Investment Banker Program

       Securities Licenses and Memberships
       − NASD
         • Series 7 – General Securities Representative
         • Series 63 – State Agent
         • Series 24 – General Securities Principal
       − Philadelphia Stock Exchange, Pacific Stock Exchange – General Securities Representative



                                                                   5
JEFFERIES QUALIFICATIONS
Bill Derrough – Biography (Cont’d)

            Mr. Derrough has served as investment banker in a number of restructurings, financings and M&A transactions, including:

                                                                Jefferies & Company, Inc. (1998 – present)
  AmeriServe Food Distribution Co. (food distributor)           Formica Corporation (building materials)                   MobileMedia Corporation (wireless messaging)
  Anacomp, Inc. (data management)                               Ft. Worth Tower (communications tower manufacturing)       Net2000 (CLEC)
  CHS Electronics (computer distributor)                        Globalstar (satellite telecommunications)                  NextWave Communications (PCS wireless telephony)
  Cone Mills Corporation (textile manufacturing) pending        Golden Books Family Entertainment (children’s publishing   Orbital Sciences Corporation (satellite manufacturer and
                                                                and media)                                                 services provider)
  CyberCash (online bill payment)                               Golden Ocean Group, LTD. (oil tankers)                     Orius Corp. (telecom infrastructure)
  Decora Industries, Inc. (consumer products)                   Heartland Wireless Communications (broadband wireless      Pliant Systems (telecom equipment manufacturer)
                                                                TV and internet)
  Einstein/Noah’s Bagel Corp. (restaurants)                     Hvide Marine (maritime)                                    Russell-Stanley (plastic and steel containers)
  Electronic Retailing Solutions, Inc. (wireless retail shelf   ICO Global Communications Ltd. (satellite                  Specialty Foods Corporation (bakery and meat products)
  labeling; self-checkout)                                      communications)
  Enterprises Shipholding Corporation (refrigerated and         ICO – Teledesic Global Ltd. (satellite communications)     Startec Communications (international long-distance
  container ships)                                                                                                         telecom provider)
  Envirosource Corp. (steel services and waste                  International Wireless Communications (developing          Sunterra (timeshare/real estate)
  management)                                                   country wireless telephony)
  Ermis Maritime Holdings (shipping)                            Kellstrom Industries (aviation parts)                      Trans Texas Corporation (oil & gas exploration, gas
                                                                                                                           distribution and oil refining)
  Farrell Lines, Inc. (U.S. flag container shipping)            LLS Corporation (injection molded closures and             TSR Wireless Communications (paging and wireless
                                                                containers)                                                telephony)
  Federal-Mogul Corporation (automotive parts                   Long Distance International (international long distance   Vlasic Foods (branded food manufacturer)
  manufacturer) pending                                         network)
  Fitzgeralds Gaming Corporation (casino hotels)                Loral Space & Communications, Ltd. (satellite              XO Communications (CLEC)
                                                                manufacturer and service provider) pending




                                                                                           6
JEFFERIES QUALIFICATIONS
Bill Derrough – Biography (Cont’d)

                                                             Chanin and Company (1991 – 1997)
  Ames Department Stores (retailer)                      C&R Clothiers (men’s apparel)                   Northern Automotive Corporation (auto parts retailer)
  Anacomp (data storage and imaging)                     Cherokee (casual apparel manufacturer)          Orange County, California (municipality)
  Angeles Corp. (real estate)                            Evergreen International Aviation (air cargo)    Resorts International (casino-hotels)
  Angeles Participating Mortgage Trust (mortgage REIT)   International Paging Corporation (paging)       Scott Cable Communications (rural cable television
                                                                                                         systems)
  Angeles Mortgage Investment Trust (mortgage REIT)      KDI Corporation (manufacturing)                 Sea Life Park (marine mammal amusement park)
  Burlington Motor Holding (trucking)                    Kerr Group (plastic closure manufacturing)      Strategic Partners (medical uniforms)
  Carter Hawley Hale Stores (department stores)          Morrison Knudsen Corporation (engineering and
                                                         construction)


                                                               Salomon Brothers (1988 – 1991)
  Almacs Supermarkets (supermarkets)                     First Capital Holdings (life insurance)         Pacific Enterprises (holding company)
  ARCO (integrated oil)                                  Mirage Resorts (casino-hotel)                   Unocal Corporation (integrated oil)
  Avalon Marketing (consumer products)                   Occidental Petroleum (integrated oil)           Unocal Exploration Partners (oil & gas exploration and
                                                                                                         production)
  Circus Circus Enterprises (casino-hotels)              Ralphs (supermarkets)                           Vons Companies (supermarkets)




                                                                                    7
JEFFERIES QUALIFICATIONS
Bill Derrough – Expert Testimony

         Cases in which Mr. Derrough testified as an expert at trial:

    Company                                   Filing Date   Case Number             Judge                                         Court
    Cherokee, Inc.                              4/23/93     93-00467-HSB        Helen S. Balick    U.S. Bankruptcy Court - Delaware
    MobileMedia Corporation                     1/30/97     97-00175-PJW        Peter J. Walsh     U.S. Bankruptcy Court - Delaware
    Heartland Wireless Communications, Inc.     12/4/98     98-02692-PJW        Peter J. Walsh     U.S. Bankruptcy Court - Delaware
    VF Brands, Inc. (Vlasic Foods)              1/29/01     01-00285-MFW       Mary F. Walrath     U.S. Bankruptcy Court - Delaware
    Cych, Inc., et al. (Cybercash)               3/2/01     01-00622-MFW       Mary F. Walrath     U.S. Bankruptcy Court - Delaware
    Pliant Systems, Inc.                         5/1/01        01-01264        A. Thomas Small     U.S. Bankruptcy Court - Eastern District of North Carolina
    Golden Books Family Entertainment, Inc.      6/4/01     01-01920-MFW       Mary F. Walrath     U.S. Bankruptcy Court - Delaware
    Globalstar L.P.                             2/15/02     02-10504-PJW        Peter J. Walsh     U.S. Bankruptcy Court - Delaware
    Formica Corporation                          3/5/02     02-10969-BRL       Burton R. Lifland   U.S. Bankruptcy Court - Southern District of New York (Manhattan)
    Exide Technologies                          4/15/02     02-11125-KJC        Kevin J. Carey     U.S. Bankruptcy Court - Delaware




                                                                           8
JEFFERIES QUALIFICATIONS
Michael Henkin – Biography

       Michael Henkin is Senior Vice President of Jefferies’ Investment Banking Department with over 12 years of investment banking
       and operational experience. Mr. Henkin has significant expertise in restructuring advisory with distressed companies, representing
       both debtors and creditors in a wide range of industries, including communications, technology, manufacturing, services and
       consumer. Mr. Henkin has been with Jefferies for over six years (1991 – 1994, 2001 – present) and has executed and closed over
       30 transactions, including more than ten Chapter 11 cases (and foreign equivalents) and numerous public / private financings,
       M&A and other corporate finance assignments

       Prior Professional Experience
       − NextEngine, President and Chief Operating Officer (1999 – 2001)
       − Loral Space & Communications, Senior Vice President, Business Development and Director, Operations Planning
         (1998 – 1999)
       − News Corporation, Vice President, Business Development (1995 – 1998)

       Education
       − Stanford Graduate School of Business, MBA and Global Management Certificate (1996)
       − University of California, Los Angeles, BA in Economics / Business, Summa Cum Laude, Phi Beta Kappa (1990)
       − Musicians Institute, Guitar Institute of Technology (1991)

       Securities Licenses
       − NASD
         • Series 7 – General Securities Representative
         • Series 63 – State Agent


                                                                  9
JEFFERIES QUALIFICATIONS
Michael Henkin – Biography (Cont’d)

         Mr. Henkin has served as investment banker in a number of restructurings, financings and M&A transactions, including:

                                             Jefferies & Company, Inc. (1991 – 1994, 2001 – Present)

  Bally’s Park Place, Inc. (casino / lodging operator)                       Microcell Telecommunications, Inc. (wireless services provider)
  BTI Telecom Corporation (telecommunications services company)              Mpower Holding Corp. (telecommunications service provider)
  CHC Helicopter Corporation (commercial helicopter operator)                Orbital Sciences Corp. / Orbital Imaging Corp. (satellite
  Cherokee, Inc. (apparel marketer and licenser)                             manufacturer and service provider)

  DDI Corp. (electronics developer and manufacturer)                         Orchard Supply Hardware Stores Corporation (retailer)

  Earthlink, Inc. / OmniSky Corp. (internet and wireless services)           Philip Services Corp. (environmental and metal services)

  Exide Technologies (battery manufacturer)                                  Rhythms NetConnections, Inc. (telecommunications service
                                                                             provider)
  Federal-Mogul Corporation (automotive parts manufacturer)
  pending                                                                    Seattle Lighting (lighting distributor and retailer)

  Jordon Industries, Inc. (multiple-industry holding company)                Terex Corporation (heavy equipment manufacturer)

  Kash ‘n Karry Food Stores, Inc. (supermarket operator)                     Transeastern Properties, Inc. (homebuilder)

  Liggett Group Inc. (tobacco distributor)                                   Trans-Resources, Inc. (agricultural and industrial chemicals
                                                                             manufacturer)
  Loral Space & Communications Ltd. (satellite manufacturer and
  service provider) pending                                                  Wilrig AS (offshore oil rig operator)




                                                                       10
JEFFERIES QUALIFICATIONS
Michael Henkin – Expert Testimony

        Cases in which Mr. Henkin testified as an expert at trial:

    Company                             Filing Date    Case Number          Judge                                       Court
    Philip Services Corp.                 6/2/2003    03-37718-H2-11    Wesley W. Steen U.S. Bankruptcy Court - Southern District of Texas, Houston Division
    Loral Space & Communications Ltd.    7/15/2003       03-41710       Robert D. Drain U.S. Bankruptcy Court - Southern District of New York




                                                                       11
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Introduction

       This presentation, among other things, analyzes various valuation and comparison methodologies using public data including:
       − Comparable Company Analysis
       − Comparable M&A Transaction Analysis
       − Discounted Cash Flow Analysis

       Jefferies used methodologies in each analysis substantially similar in approach to those used throughout Jefferies’ Investment
       Banking Department for pricing equity transactions, valuing transactions for fairness opinions, advising in mergers and acquisitions
       and other similar transactions

       The valuation analysis in this presentation is based upon the Company’s business plan and other financial information provided by
       the Company and its financial advisor

       By using supporting data from various analyses, we conclude that there is substantial value for unsecured claims as of December
       31, 2004, the projected bankruptcy exit date (the “Effective Date”)

       Yields and securities pricing presented herein are as of September 30, 2004, unless otherwise indicated

       The valuation analysis and conclusions contained herein have been presented to the Jefferies’ Restructuring Valuation Committee
       (the “Jefferies Committee”) and reflects the unanimous consent of the Jefferies Committee




                                                                  13
EXECUTIVE SUMMARY
Objective and Scope

       Jefferies prepared a valuation analysis of the business enterprise of Federal-Mogul and its operating subsidiaries assuming an exit
       from bankruptcy as of the Effective Date

       In determining its opinion as to the estimated range of value for Federal-Mogul, Jefferies performed the following due diligence:
       − Review of the operations of Federal-Mogul’s key business units
       − Review of management’s financial forecast for fiscal years 2004E to 2007P including various supporting schedules and
         information
       − Review of the assumptions underlying management’s four-year plan, as well as risk factors and opportunities that could impact
         expected performance
       − Discussions with various senior managers with respect to the business operations and the four-year plan
       − Analysis of the industry, the Company’s key competitors, and trends in the environment in which Federal-Mogul operates
       − Analysis of financial information of key competitors and/or similar publicly-traded companies to determine appropriate valuation
         multiples
       − Analysis of the performance and market position of the Company relative to its key competitors and/or similar publicly-traded
         companies
       − Analysis of precedent transactions in the industry to determine prices paid for assets, business lines and/or companies similar
         to Federal-Mogul to determine appropriate valuation multiples; and
       − Preparation of such other analyses as Jefferies deemed appropriate




                                                                   14
EXECUTIVE SUMMARY
Valuation Conclusions as of the Effective Date

        Based on Jefferies' valuation analysis, we have concluded that the range of Enterprise Value is $4.1 billion to $4.3 billion, as set
        forth herein

        Based on Jefferies' valuation analysis, we have concluded that the range of Equity Value to Noteholders is $0.9 billion to $1.0
        billion, as set forth herein




     Jefferies & Company, Inc.




     Michael Henkin, Senior Vice President, Recapitalization and Restructuring Group




                                                                     15
EXECUTIVE SUMMARY
Summary Enterprise Valuation Analysis as of the Effective Date
($ in Millions)




       Comparable Company Analysis
                                        $3,121   $3,320
          Comparable M&A Transaction
                   Analysis
                                                                         $4,183        $4,449

        Discounted Cash Flow Analysis
                                                                                           $4,624      $4,962

         Concluded Range of Valuation
                                                                   $4,054         $4,336
                                  $3,000           $3,500       $4,000              $4,500          $5,000       $5,500




                           Based on Jefferies’ weighting of 55% for the Discounted Cash Flow Analysis, 35% for
                            the Comparable Company Analysis and 10% for the Comparable M&A Analysis, we
                               believe the range of Enterprise Value for Federal-Mogul is $4.1 to $4.3 billion




                                                                   16
EXECUTIVE SUMMARY
Conclusion of Value as of the Effective Date
($ in Millions)

               Jefferies’ analyses produced enterprise values ranging from $4.1 billion to $4.3 billion
               Pro forma capitalization is based on current estimates from Federal-Mogul and other Plan Proponents(1)

                                                                                                                        Estimated as of December 31, 2004

                                                                                                                                Low                     High

                         Estimated Enterprise Value                                                                     $     4,054              $      4,336

                         Pro Forma Capitalization
                         New Exit Revolver                                                                              $         --             $          --
                         New Exit Term Loan                                                                                     828                       828
                         New Tranche A Senior Secured Term Loans, net of discount                                             1,263                     1,263
                         New Junior Secured PIK Notes, net of discount                                                          224                       224
                         Reduction in Equity Value Arising from Proposed UK Settlement(2)                                       200                       200
                         Vendor Note                                                                                             60                        60
                         Foreign Debt                                                                                            24                        24
                             Total Debt                                                                                       2,599                     2,599
                         Plus: Excess Cash(3)                                                                                   382                       382
                           RESIDUAL EQUITY VALUE                                                                        $     1,837              $      2,119

(1)   The Plan Proponents consist of the Company, the Official Committee of Unsecured Creditors, the Asbestos Claimants Committee, JP Morgan Chase Bank as the administrative agent for the
      holders of pre-petition bank claims, the Future Claimants Representative and the Official Committee of Equity Security Holders.
(2)   Pursuant to the terms of the recently proposed UK settlement, the T&N Pension Scheme would be assumed by the Company and conditions would apply related to the funding of the T&N
      Pension Scheme (the "Proposed UK Settlement"). For purposes of this valuation, we have assumed the Proposed UK Settlement is implemented, and we estimate an equity valuation impact of
      the Proposed UK Settlement as it relates to the T&N Pension Scheme to be approximately $200 million.
(3)   Net of $160 million minimum operational cash balance and includes approximately $40 million note receivable from the Trust.

                                                                                              17
EXECUTIVE SUMMARY
Equity Value to Noteholders as of the Effective Date
($ in Millions)


                                                                  Estimated as of December 31, 2004
                                                                      Low                 High

                  Residual Equity Value                       $       1,837         $     2,119

                  Black Scholes Warrant Valuation                         21                  30

                    Equity Value, net of Warrant Value                1,816               2,089

                  Equity Value to Noteholders (49.9%)         $         906         $     1,042




                                                         18
EXECUTIVE SUMMARY
Valuation of Warrants for Pre-Petition Equity Holders
($ in Millions, Except Per Share Data)



                                                            Black Scholes Warrant Valuation

                                                                                     Low              High

                                  Concluded Equity Value                       $      1,837     $      2,119
                                  Aggregate Common Stock Value                         1,816            2,089
                                  Stock Price                                  $      18.16     $      20.89
                                  Shares Outstanding                           100,000,000      100,000,000
                                  Warrant Strike Price                         $     45.815     $     45.815
                                  Risk-Free Rate (Seven-year Treasury)                3.79%            3.79%
                                  Volatility per Annum                                 35%              35%
                                  Term of Warrants                                   7 years          7 years
                                  Price of a Call                              $        3.08    $        4.26
                                  Number of Warrants                               6,951,872        6,951,872
                                  Total Value of Warrants                      $           21   $            30




                                                                          19
EXECUTIVE SUMMARY
Recovery to Non-Noteholder U.S. Unsecured Claims
($ in Millions)




                                        Cap on Non-Noteholder U.S. Unsecured Claims          $      258.0
                                        Recovery                                                      35%
                                           Maximum Cash Payout                               $        90.3



             Assuming the maximum amount of allowed claims, the Non-Noteholder U.S. Unsecured claim holders will receive $30.1 million on
             the Effective Date, $30.1 million one year after the Effective Date and the remaining $30.1 million two years after the Effective Date




                                                                         20
EXECUTIVE SUMMARY
Selected Historical and Projected Financial Data(1)(2)
($ in Millions)



                                                                   2002A                2003A                2004E                 2005P                2006P                2007P

       Sales                                                  $      5,184          $     5,546          $      5,886         $      5,935         $      6,089          $     6,230
       % Growth of Sales                                               1.8%                 7.0%                  6.1%                 0.8%                 2.6%                 2.3%
       Gross Margin                                                 1,048                1,175                1,214                 1,246                1,404                1,450
             % of Sales                                              20.2%                21.2%                 20.6%                21.0%                23.1%                23.3%
       Selling, General and Admin. Expenses                           817                  872                   903                  898                  879                  859
             % of Sales                                              15.8%                15.7%                 15.3%                15.1%                14.4%                13.8%
       Other Expenses / (Income)                                       (21)                 (44)                 (41)                 (40)                  (42)                 (43)
       Amortization                                                    14                    17                   17                   17                    17                   17
        EBIT(3)                                                       238                  329                   335                  372                  550                  617
             % of Sales                                                4.6%                 5.9%                 5.7%                 6.3%                  9.0%                 9.9%
       EBITDA(4)                                                      512                 637                    664                  683                  860                  929
             % of Sales                                                9.9%               11.5%                 11.3%                11.5%                14.1%                14.9%
       Capital Expenditures                                           339                  301                   298                  297                  299                  292
       (1)    Financial projections assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries.
       (2)    2002A-2004E results are presented pro forma for certain “fresh start” accounting adjustments relating to pension expense. Excluding these adjustments, EBITDA for 2002A,
              2003A and 2004E would be $485 million, $549 million and $585 million, respectively. 2005P-2007P results are presented with “fresh start” accounting adjustments relating to
              pension expense, inventory and health insurance (FAS 106) and assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain
              of its subsidiaries.
       (3)    EBIT is defined as earnings before interest, income taxes, extraordinary items and certain nonrecurring items such as restructuring and impairment charges, Chapter 11 and
              Administration related reorganization expenses and gains or losses on the sales of businesses.
       (4)    EBITDA is defined as EBIT plus depreciation and amortization.




                                                                                                  21
VALUATION ANALYSIS
VALUATION ANALYSIS
Valuation Methodology

      While several generally accepted valuation techniques for estimating enterprise value were considered, Jefferies primarily
      considered three methodologies: Comparable Company Analysis, Comparable M&A Transaction Analysis and Discounted Cash
      Flow Analysis
      − Comparable Company Analysis
        • Evaluates the current multiples of comparable public companies and applies those multiples to the operating results of the
          subject company
      − Comparable M&A Transaction Analysis
        • Evaluates the trading multiples of comparable public company merger and acquisition transactions and applies those
          multiples to the operating results of the subject company
      − Discounted Cash Flow Analysis
        • Evaluates the projected operating results of the subject company and discounts its future cash flows to present value at a
           required rate of return

      Jefferies believes the EBITDA multiple is the most appropriate measure in determining the multiple-based valuation analyses
      because EBITDA is used as an approximation of unlevered operating cash flow and is an operating metric commonly used by the
      market to value companies in this industry sector

      Jefferies used adjusted operating data for 2004E-2007P to:
      − Account for the impact of certain “fresh start” adjustments related to inventory, pension expense and health insurance (FAS
        106); and
      − Reflect the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries




                                                                23
VALUATION ANALYSIS
Weighting Methodology

      Jefferies believes weighting the Discounted Cash Flow Analysis at 55% of the concluded valuation range is appropriate because
      this analysis reflects the Company's expected improvement in future performance after realizing further benefits of the restructuring
      initiatives implemented during the Company’s Chapter 11 proceedings


      Jefferies believes the Company's current financial performance is impacted by the reorganization. Since the Comparable
      Company Analysis values Federal-Mogul based upon current financial performance, Jefferies believes a 35% weighting of the
      Comparable Company Analysis in the concluded valuation range appropriately takes into consideration the effects of the
      Company’s restructuring initiatives


      Jefferies believes weighting the Comparable M&A Transaction Analysis at 10% is appropriate because of the limited number of
      recent comparable M&A transactions and the inclusion of older transactions since 1998




                                                                  24
VALUATION ANALYSIS
Comparable Company Valuation Analysis
($ in Millions)
              Comparable companies’ operating data have been adjusted to exclude unusual or non-recurring charges and actuarial gain/loss
              and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul’s “fresh start” adjusted
              operating data
              The following multiples were chosen for comparison on a latest twelve month period (“LTM”) ended June 30, 2004 basis
              Enterprise values are calculated using mean and median multiples applied to Federal-Mogul’s estimated 2004 results
              Jefferies attributes a 35% weighting for the Comparable Company Analysis in the Concluded Range of Valuation
                                                                                                                                     Enterprise Value / LTM
                                                                                                   Revenue                       EBITDA                         EBIT                Free Cash Flow(1)
        High                                                                                             1.3x                        9.5x                         15.7x                        14.2x
        Low                                                                                              0.1x                        2.9x                          4.9x                         5.8x
        Trimmed Mean(2)                                                                                  0.4x                        4.8x                          9.0x                         8.8x
        Mean                                                                                             0.5x                        5.0x                          9.2x                         9.0x
        Median                                                                                           0.4x                        4.7x                          8.5x                         7.7x
        Projected Bankruptcy Exit Date – As of 12/31/04
        2004E Operating Data                                                                 $        5,886               $         664                 $         335                $         366
        Implied Enterprise Value – Mean(3)                                                   $        2,943               $       3,320                 $       3,082                $       3,294
        Implied Enterprise Value – Median(3)                                                 $        2,354               $       3,121                 $       2,848                $       2,818
        (1)   Free cash flow is defined as EBITDA minus capital expenditures.
        (2)   Trimmed mean is defined as the average of the values, excluding the highest and lowest values.
        (3)   If enterprise value was calculated using an estimate of excess cash for the comparable companies, the Enterprise Value / LTM EBITDA median and mean multiples would be 4.9x and 5.2x,
              respectively. Implied enterprise value based upon the Enterprise Value / LTM EBITDA median and mean multiples assuming an adjustment for excess cash would be $3.3 billion and $3.5
              billion, respectively. These calculations use a definition of excess cash as book value cash less minimum required cash. Minimum required cash equals the lessor of: book value cash as of prior
              year end, current book value cash or 1.5% of sales.

                            Applying EBITDA multiples as of the Projected Bankruptcy Exit Date, the Comparable Company
                                         Analysis suggests an Enterprise Value range of $3.1 to $3.3 billion

                                                                                                         25
VALUATION ANALYSIS
Comparable M&A Transaction Valuation Analysis
($ in Millions)

                The following multiples were chosen for comparison based on the LTM period prior to the announcement of each of the selected
                transactions
                Enterprise values are calculated using mean and median multiples applied to Federal-Mogul’s estimated 2004 results
                Jefferies attributes a 10% weighting for the Comparable M&A Transaction Analysis in the Concluded Range of Valuation

                                                                                                                      Enterprise Value / LTM
                                                                                                    Revenue          EBITDA             EBIT      Free Cash Flow(1)
          High                                                                                            1.2x          7.8x              13.6x          23.1x
          Low                                                                                             0.3x          3.7x               6.0x           6.8x
          Trimmed Mean(2)                                                                                 0.7x          6.5x               9.9x          11.0x
          Mean                                                                                            0.7x          6.3x               9.9x          12.0x
          Median                                                                                          0.7x          6.7x               9.3x           9.7x
          Projected Bankruptcy Exit Date – As of 12/31/04
          2004E Operating Data                                                                $       5,886      $      664        $       335    $       366
          Implied Enterprise Value – Mean                                                     $       4,120      $    4,183        $     3,317    $     4,392
          Implied Enterprise Value – Median                                                   $       4,120      $    4,449        $     3,116    $     3,550
          (1)   Free cash flow is defined as EBITDA minus capital expenditures.
          (2)   Trimmed mean is defined as the average of the values, excluding the highest and lowest values.


                      Applying EBITDA multiples as of the Projected Bankruptcy Exit Date, the Comparable M&A Transaction
                                      Analysis suggests an Enterprise Value range of $4.2 to $4.4 billion



                                                                                                        26
VALUATION ANALYSIS
Discounted Cash Flow Valuation Analysis – Overview of Calculation

       Enterprise Value was estimated by adding the following:
       − The discounted value of the Company’s annual projected distributable cash flows (cash flows available to all investors), and
       − The discounted terminal value for the Company (the value of the Company beyond the definitive time period)

       Distributable Cash Flows
       − Calculated using projected annual operating income plus depreciation and amortization plus net changes in working capital less
         projected capital expenditures less restructuring payments plus the net impact of pensions and other assets/liabilities

       Terminal Value
       − The terminal value was calculated by using EBITDA multiples ranging from 6.0x to 6.5x
       − Jefferies utilized this EBITDA multiple range after taking into consideration the results of both the Comparable Company
         Analysis and the Comparable M&A Transaction Analysis

       Discount Rate
       − The Company’s cash flows and terminal value were discounted to present values at a weighted average cost of capital
         (“WACC”) of 11.0 % to determine enterprise value




                                                                 27
VALUATION ANALYSIS
Discounted Cash Flow Valuation Analysis

       The following enterprise values were determined based on a Discounted Cash Flow Analysis

       Jefferies attributes a 55% weighting for the Discounted Cash Flow Analysis in the Concluded Range of Valuation


                                                                  Terminal EBITDA Multiple
                                                                Projected Bankruptcy Exit Date
                                                                          12/31/2004
                                    Weighted Average
                                     Cost of Capital             6.0x                   6.5x

                                          10.0%            $     4,747          $      5,094

                                          11.0%            $     4,624          $      4,962

                                          12.0%            $     4,506          $      4,835


             Applying a discount rate range of 11.0% and a terminal multiple range of 6.0x to 6.5x, the Discounted
                        Cash Flow Analysis suggests an Enterprise Value range of $4.6 to $5.0 billion




                                                                28
APPENDIX
COMPARABLE COMPANY VALUATION ANALYSIS
COMPARABLE COMPANY VALUATION ANALYSIS
Selection of Comparable Companies

      The following table summarizes the criteria Jefferies used in selecting comparable companies:


                                                                                                                     Resulting
                                                                  Criteria                                          Companies(1)

                                Relevant Industry Sector(2)                                                                 74
                                Sales Greater Than Or Equal to $1.0 Billion                                                 28
                                Relevant Product Focus                                                                      20
                                Excludes Bankruptcy / No Operations                                                         18
                                Relevant Customer Concentration / Mix(3)                                                    16
                                Public Companies                                                                            14
                                (1)   Reflects cumulative number of companies that satisfy criteria including criteria on previous lines.
                                (2)   Reflects companies within the following SIC codes:
                                      •    3465: Automotive Stampings
                                      •    2396: Automotive Trimmings, Apparel Findings and Related Parties
                                      •    3594: Fluid Power Pumps and Motors
                                      •    3714: Motor Vehicle Parts and Accessories
                                      •    5013: Motor Vehicle Supplies and New Parts
                                (3)   Excludes companies with major customers outside automotive industry.




                                                                                   31
COMPARABLE COMPANY VALUATION ANALYSIS
Comparable Company Descriptions
         Comparable Companies                                                                        Description

 American Axle & Manufacturing   American Axle & Manufacturing Holdings, Inc. is a global Tier I supplier to the automotive industry. The Company manufactures, engineers,
 Holdings, Inc.                  designs and validates driveline systems and related powertrain components and modules for light trucks, sport utility vehicles (“SUVs”) and
                                 passenger cars. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. The
                                 Company's driveline and related powertrain products include axles, modules, driveshafts, chassis and steering components, driving heads,
                                 crankshafts, transmission parts and forged products. The Company is the principal supplier of driveline components to General Motors
                                 Corporation (“GM”) for its rear-wheel drive light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and
                                 front four-wheel-drive/all-wheel-drive axle requirements for these vehicle platforms in 2003.
 ArvinMeritor, Inc.              ArvinMeritor, Inc. is a global supplier of a range of integrated systems, modules and components serving light vehicle, commercial truck, trailer
                                 and specialty original equipment manufacturers (“OEMs”) and certain aftermarkets. The Company also provides coil-coating applications to the
                                 transportation, appliance, construction, heating, ventilation and air conditioning, and doors industries. ArvinMeritor serves OEM customers
                                 worldwide, including truck OEMs, light vehicle OEMs, trailer producers and specialty vehicle manufacturers and certain aftermarkets.
 BorgWarner, Inc.                BorgWarner, Inc. is a global Tier I supplier of highly engineered systems and components, primarily for vehicle powertrain applications. The
                                 Company's products fall into five operating segments: Morse TEC, Air/Fluid Systems, Cooling Systems, TorqTransfer Systems and Transmission
                                 Systems. These products are manufactured and sold worldwide, primarily to OEMs of passenger cars, sport utility vehicles, trucks and
                                 commercial transportation products. The Company operates manufacturing and technical facilities in 43 locations in 14 countries serving
                                 customers in North America, South America, Europe and Asia, and is an original equipment supplier to major automotive OEMs worldwide.
 Collins & Aikman Corporation    Collins & Aikman Corporation is engaged in the design, engineering and manufacturing of automotive interior components, including instrument
                                 panels, fully assembled cockpit modules, floor and acoustic systems, automotive fabric, interior trim and convertible top systems. Sales are
                                 diversified among all North American OEMs, transplants such as Toyota, Honda and Nissan and major Tier I integrators. The Company has more
                                 than 115 plants and facilities worldwide and conducts all of its operating activities through its wholly owned subsidiary, Collins & Aikman Products
                                 Co. The Company markets the majority of its products to customers through a single global commercial operations group that supplies products
                                 from four primary categories: plastic components and cockpits, carpet and acoustics, automotive fabrics and convertible top systems.
 Dana Corporation                Dana Corporation is an independent supplier of modules, systems and components for light, commercial and off-highway vehicle OEMs globally
                                 and for related OEM service customers. Its products are used in passenger cars and vans, sport-utility vehicles, light, medium and heavy trucks
                                 and a wide range of off-highway vehicles. In addition, Dana is an aftermarket supplier in the North American market. Nearly all of its aftermarket
                                 operations have been conducted through the Automotive Aftermarket Group (“AAG”). In December 2003, the Company announced its intention to
                                 sell substantially all of the AAG. The remaining portion of the AAG, which distributes engine hard parts, has become a part of Dana's engine and
                                 fluid management operations. The Company's continuing operations are organized into three market-focused strategic business units: Automotive
                                 Systems Group, Engine and Fluid Management Group and Heavy Vehicle Technologies and Systems Group. On July 9, 2004, Cypress Group
                                 agreed to purchase the AAG from the Company for approximately $1.1 billion. The transaction is currently pending. Operating results present
                                 the AAG as a discontinued operation.




                                                                                  32
COMPARABLE COMPANY VALUATION ANALYSIS
Comparable Company Descriptions (Cont’d)
        Comparable Companies                                                                          Description

 Delphi Corporation              Delphi Corporation is a global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic
                                 technology to vehicle manufacturers. During 2003, the Company operated its business along three segments: the Dynamics, Propulsion and
                                 Thermal Sector; the Electrical, Electronics, Safety and Interior Sector; and the Automotive Holdings Group. The Dynamics, Propulsion and
                                 Thermal Sector include selected businesses from Delphi's energy and engine management systems, chassis, steering and thermal systems
                                 product lines. The Electrical, Electronics, Safety and Interior Sector include selected businesses from the Company's automotive electronics,
                                 audio, consumer and aftermarket products, communication systems, safety and power, and signal distribution systems product lines. The
                                 Automotive Holdings Group is responsible for the production of halfshafts, condensers, batteries, filters, spark plugs, generators and
                                 compressors.
 Dura Automotive Systems, Inc.   Dura Automotive Systems, Inc., incorporated in 1994, is an independent designer and manufacturer of driver control systems for the global
                                 automotive industry. Dura is also a global supplier of seating control systems, engineered assemblies, structural door modules and integrated
                                 glass systems. Although a portion of Dura's products are sold directly to OEMs as finished components, Dura uses most of its products to
                                 produce “systems” or “subsystems,” which are groups of component parts located throughout the vehicle that operate together to provide a
                                 specific vehicle function. Systems produced by Dura include glass, door, pedal, parking brake, transmission shift, seat adjusting and latch. Dura's
                                 principal product categories are driver control systems, seating control systems, engineered assemblies, structural door modules, exterior trim
                                 systems and mobile products.
 Eaton Corporation               Eaton Corporation is a global diversified industrial manufacturer of fluid power systems; electrical power quality, distribution and control systems;
                                 automotive engine air management and fuel economy systems, and intelligent drivetrain systems for fuel economy and safety in trucks. Eaton’s
                                 principal markets for its fluid power, automotive and truck products are OEMs and aftermarket customers of aerospace products and systems, off-
                                 highway agricultural and construction vehicles, industrial equipment, passenger cars and heavy-, medium- and light-duty trucks. The principal
                                 markets for Eaton's industrial and commercial controls products are industrial, construction, commercial, automotive and government customers.
 Lear Corporation, Inc.          Lear Corporation is an automotive interior systems supplier. It has capabilities in all five principal segments of the automotive interior market: seat
                                 systems, flooring and acoustic systems, door panels, instrument panels and cockpit systems, and overhead systems. The Company is also a
                                 global supplier of automotive electronic and electrical distribution systems. As a result of these capabilities, Lear can offer its customers fully
                                 integrated automotive interiors, including electronic and electrical distribution systems. As a total interior integrator, the Company works closely
                                 with the customer on the design and is responsible for the engineering, component/module sourcing, manufacturing and delivery of automotive
                                 interiors. The Company's customers include automotive manufacturers such as General Motors, Ford, DaimlerChrysler, BMW, Fiat, PSA,
                                 Volkswagen, Renault/Nissan, Toyota and Subaru.
 Magna International, Inc.       Magna International, Inc. designs, engineers and manufactures a complete range of automotive components, assemblies, modules and systems,
                                 and engineers and assembles complete vehicles. Its products and services are sold primarily to manufacturers of cars and light trucks in North
                                 America, Europe, South America and Asia. The Company's automotive operations are conducted through six automotive systems groups, further
                                 segmented between public and wholly owned automotive systems groups. In addition to its automotive operations, Magna conducts certain non-
                                 automotive operations through its subsidiary, Magna Entertainment Corp., which owns and operates thoroughbred racetracks, and supplies, via
                                 simulcasting, live racing content to the growing inter-track, off-track and account wagering markets.


                                                                                   33
COMPARABLE COMPANY VALUATION ANALYSIS
Comparable Company Descriptions (Cont’d)
       Comparable Companies                                                                     Description

 Tenneco Automotive, Inc.     Tenneco Automotive, Inc. is primarily engaged in the manufacture of automotive emissions control and ride control products and systems for both
                              the original equipment market and the replacement market or aftermarket. As an automotive parts supplier, the Company designs, markets and
                              sells individual component parts for vehicles, as well as groups of components that are combined as modules or systems within vehicles. These
                              parts, modules and systems are sold globally to the vast majority of vehicle manufacturers and throughout all aftermarket distribution channels.
                              Monroe ride control products and Walker exhaust products are two of Tenneco's brand names. It also offers other brands such as Monroe Sensa-
                              Trac and Reflex (shock absorbers and struts), Quiet-Flow (mufflers), DynoMax (performance exhaust products), Rancho (ride control products for
                              the high-performance, light-truck market) and Clevite (elastomeric vibration control components).
 Tower Automotive, Inc.       Tower Automotive, Inc. is engaged in the design and production of structural components and assemblies used by automotive OEMs. The
                              Company's current products include automotive body structural stampings and assemblies, including exposed sheet metal (Class A) components,
                              lower vehicle structural stampings and assemblies, suspension components, modules and systems. The Company's products generally can be
                              classified into four categories: body structures and assemblies, lower vehicle structures, suspension and powertrain modules and suspension
                              components.
 TRW Automotive, Inc.         TRW Automotive Holdings Corp. is a United States-based international business providing advanced technology products and services for the
                              automotive markets. The Company designs, manufactures and sells a range of steering, suspension and braking products, seat belts, airbags,
                              steering wheels, safety electronics, engine valves, engineered fastening body control systems and other components and systems. These
                              products are primarily used in the manufacture of light vehicles, consisting of passenger cars and light trucks. The principal customers for the
                              Company's automotive products are the North and South American, European and Asian vehicle manufacturers (VMs). Among its largest
                              customers are Ford Motor Company, DaimlerChrysler AG, Volkswagen AG, General Motors Corporation and Renault-Nissan BV. TRW conducts
                              substantially all of its operations through its subsidiaries and along three operating segments: Chassis Systems, Occupant Safety Systems and
                              Automotive Components.
 Visteon Corporation          Visteon Corporation is a global supplier of automotive systems, modules and components to vehicle manufacturers and the automotive
                              aftermarket. The Company operates in two business segments: Automotive Operations and Glass Operations. The Automotive Operations
                              segment provides automotive systems, modules and components in the following product areas: climate control, interior, exterior, powertrain,
                              chassis and electronics. Its products are featured on vehicles built by many automotive manufacturers, including Ford Motor Company, General
                              Motors, Toyota, DaimlerChrysler, Volkswagen, Honda, Renault, Nissan, Hyundai, Peugeot, Mazda and BMW. The Automotive Operations
                              segment accounted for 97% of the Company's 2003 total sales. The Glass Operations segment designs, produces and distributes automotive
                              glass products for Ford and aftermarket customers, and float glass for commercial architectural and automotive applications. Glass Operations
                              accounted for 3% of 2003 total sales.




                                                                              34
COMPARABLE COMPANY VALUATION ANALYSIS
Enterprise Value
($ in Millions, Except Per Share Data)


                                                                                      Share Price                  Market                      Total                  Preferred                                      Enterprise
                                                                                                                                                                                                      (1)
                                                                                         9/30/04               Capitalization                  Debt                     Stock                  Cash                   Value(2)
  American Axle & Manufacturing Holdings, Inc.                                   $                 29.26 $               1,519.2 $                      502.2 $                   -      $                   6.6 $           2,014.7
  Arvinmeritor, Inc.                                                                               18.75                 1,300.9                       1,590.0                    -                    122.0                 2,768.9
  BorgWarner, Inc.                                                                                 43.29                 2,416.2                        582.9                     -                    144.0                 2,855.1
  Collins & Aikman Corp.                                                                            4.18                    349.6                      1,350.2                 182.1                        11.0             1,870.9
  Dana Corporation                                                                                 17.69                 2,641.5                       2,263.0                    -                    498.0                 4,406.5
  Delphi Corporation                                                                                9.29                 5,213.5                       2,952.5                    -                    666.0                 7,499.9
  Dura Automotive Systems, Inc.                                                                     7.10                    131.8                      1,084.7                    -                    134.4                 1,082.1
  Eaton Corporation                                                                                63.41                 9,606.6                       1,861.9                    -                    289.0               11,179.6
  Lear Corporation, Inc.                                                                           54.45                 3,736.1                       1,909.5                    -                    148.8                 5,496.8
  Magna International, Inc.                                                                        74.08                 7,181.4                        595.0                     -                  1,958.0                 5,818.3
  Tenneco Automotive, Inc.                                                                         13.10                    550.3                      1,419.0                    -                    166.0                 1,803.3
  Tower Automotive, Inc.                                                                            2.09                    121.6                      1,189.8                    -                    192.9                 1,118.4
  TRW Automotive, Inc.                                                                             18.85                 1,864.6                       3,178.0                    -                    534.0                 4,508.6
  Visteon Corporation                                                                               7.99                 1,035.3                       1,908.1                    -                  1,010.0                 1,933.4

  (1) Represents book value of cash. If an assumption for estimating the amount of excess cash on hand for the comparable companies were made, enterprise values would be higher by the amount of the implied minimum required cash.
  See page 25, footnote 3.
  (2) Enterprise Value is defined as market capitalization plus total debt plus preferred stock less book value cash. Where available, market values of debt (if less than par) and equity securities have been used.




                                                                                                                  35
COMPARABLE COMPANY VALUATION ANALYSIS
LTM Operating Data(1)
($ in Millions)


                                                                                                                                                                        LTM
                                                                                        Revenue                     EBITDA                       EBIT                      FCF(2)            EBITDA Margin              EBIT Margin         FCF Margin
American Axle & Manufacturing Holdings, Inc.                                     $               3,676.2 $                   487.4 $                      322.7 $                  273.0                   13.3%                    8.8%            7.4%
Arvinmeritor, Inc.                                                                               8,799.0                     542.0                        325.0                    360.0                     6.2%                   3.7%            4.1%
BorgWarner, Inc.                                                                                 3,320.2                     475.2                        302.6                    241.4                   14.3%                    9.1%            7.3%
Collins & Aikman Corp.                                                                           4,017.8                     335.8                        189.7                    153.7                     8.4%                   4.7%            3.8%
Dana Corporation                                                                                 8,572.0                     612.0                        281.0                    311.0                     7.1%                   3.3%            3.6%
Delphi Corporation                                                                              28,780.0                   1,941.0                        845.0                    995.0                     6.7%                   2.9%            3.5%
Dura Automotive Systems, Inc.                                                                    2,474.9                     218.3                        134.9                    141.2                     8.8%                   5.4%            5.7%
Eaton Corporation                                                                                8,750.0                   1,182.0                        791.0                    889.0                   13.5%                    9.0%           10.2%
Lear Corporation, Inc.                                                                          16,522.9                   1,137.6                        797.8                    706.7                     6.9%                   4.8%            4.3%
Magna International, Inc.                                                                       18,405.0                   1,731.0                      1,189.0                    921.0                     9.4%                   6.5%            5.0%
Tenneco Automotive, Inc.                                                                         3,995.0                     390.0                        218.0                    260.0                     9.8%                   5.5%            6.5%
Tower Automotive, Inc.                                                                           2,904.4                     241.2                          87.3                    (21.2)                   8.3%                   3.0%            -0.7%
TRW Automotive, Inc.                                                                            11,518.0                   1,228.0                        736.0                    781.0                   10.7%                    6.4%            6.8%
Visteon Corporation                                                                             18,185.0                     658.9                         (17.1)                 (187.1)                    3.6%                   -0.1%           -1.0%


                                                                                                                                                                    Mean                                     9.1%                   5.2%            4.7%
                                                                                                                                                                    Median                                   8.6%                   5.1%            4.6%
                                                                                                                                                                    Trimmed Mean (3)                         9.1%                   5.3%            4.8%
                                                                                                                                                                    High                                   14.3%                    9.1%           10.2%
                                                                                                                                                                    Low                                      3.6%                   -0.1%           -1.0%


(1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure
consistency with Federal-Mogul's "fresh start" adjusted operating data.
(2) Free cash flow is defined as EBITDA minus capital expenditures.
(3) Trimmed mean is defined as the average of the values, excluding the high and low values.




                                                                                                                                  36
COMPARABLE COMPANY VALUATION ANALYSIS
LTM Trading Multiples(1)
($ in Millions)


                                                                                                                                       Enterprise Value / LTM(2)
                                                                                                          Revenue                     EBITDA                       EBIT                      FCF(3)
                  American Axle & Manufacturing Holdings, Inc.                                                          0.5x                      4.1x                         6.2x                    7.4x
                  Arvinmeritor, Inc.                                                                                    0.3x                      5.1x                         8.5x                    7.7x
                  BorgWarner, Inc.                                                                                      0.9x                      6.0x                         9.4x                   11.8x
                  Collins & Aikman Corp.                                                                                0.5x                      5.6x                         9.9x                   12.2x
                  Dana Corporation                                                                                      0.5x                      7.2x                       15.7x                    14.2x
                  Delphi Corporation                                                                                    0.3x                      3.9x                         8.9x                    7.5x
                  Dura Automotive Systems, Inc.                                                                         0.4x                      5.0x                         8.0x                    7.7x
                  Eaton Corporation                                                                                     1.3x                      9.5x                       14.1x                    12.6x
                  Lear Corporation, Inc.                                                                                0.3x                      4.8x                         6.9x                    7.8x
                  Magna International, Inc.                                                                             0.3x                      3.4x                         4.9x                    6.3x
                  Tenneco Automotive, Inc.                                                                              0.5x                      4.6x                         8.3x                    6.9x
                  Tower Automotive, Inc.                                                                                0.4x                      4.6x                       12.8x                      NM
                  TRW Automotive, Inc.                                                                                  0.4x                      3.7x                         6.1x                    5.8x
                  Visteon Corporation                                                                                   0.1x                      2.9x                          NM                      NM

                  Mean                                                                                                  0.5x                      5.0x                         9.2x                    9.0x
                  Median                                                                                                0.4x                      4.7x                         8.5x                    7.7x
                  Trimmed Mean (4)                                                                                      0.4x                      4.8x                        9.0x                     8.8x
                  High                                                                                                  1.3x                      9.5x                       15.7x                    14.2x
                  Low                                                                                                   0.1x                      2.9x                        4.9x                     5.8x

                  (1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost
                  relating to pension expense to ensure consistency with Federal-Mogul's "fresh start" adjusted operating data.
                  (2) Free cash flow is defined as EBITDA minus capital expenditures.
                  (3) Trimmed mean is defined as the average of the values, excluding the high and low values.




                                                                                                             37
COMPARABLE M&A TRANSACTION VALUATION ANALYSIS
COMPARABLE M&A TRANSACTION VALUATION ANALYSIS
LTM Operating Data(1)
($ in Millions)

                   Criteria for selecting transactions include:
                   − Relevant industry sector: SIC codes 2396, 5013, 3465, 3594 and 3714
                   − Announced on or after June 30, 1998
                   − Domestic transactions
                   − Target company sales greater than or equal to $1 billion
                   − Majority stake acquired

                                                                                                                                                  LTM at Time of Acquisition
                                                                                                                                                            (2)
                                                                                        Revenue               EBITDA               EBIT               FCF                 EBITDA Margin      EBIT Margin       FCF Margin
     Cooper Automotive                                                            $          1,850.2      $         290.7   $             206.7   $               227.3              15.7%             11.2%             12.3%
     Aeroquip-Vickers                                                                        2,149.5                271.0                 191.4                   128.8              12.6%              8.9%              6.0%
     United Technologies Automotive                                                          2,962.0                295.0                 169.0                   100.0              10.0%              5.7%              3.4%
     Arvin Industries, Inc.                                                                  3,220.3                301.5                 186.0                   163.6               9.4%              5.8%              5.1%
     MascoTech, Inc.                                                                         1,696.2                304.8                 221.5                   187.4              18.0%             13.1%             11.0%
     Textron Automotive Trim                                                                 1,622.8                174.4                 102.9                    78.9              10.7%              6.3%              4.9%
     The Torrington Company                                                                  1,196.3                147.9                  98.9                   107.1              12.4%              8.3%              8.9%
     TRW, Inc. - Automotive Parts                                                           10,433.0                989.0                 511.0                   576.0               9.5%              4.9%              5.5%
                                                     (4)
     Dana Corporation (Automotive Aftermarket Group)                                         2,070.0                145.1                  96.7                     NA                7.0%              4.7%               NA


                                                                                                                            Mean                                                    11.7%              7.6%              7.1%
                                                                                                                            Median                                                  10.7%              6.3%              5.8%
                                                                                                                                         (3)
                                                                                                                            Trimmed Mean                                            11.5%              7.3%              6.9%
                                                                                                                            High                                                    18.0%             13.1%             12.3%
                                                                                                                            Low                                                      7.0%              4.7%              3.4%



     (1) Reflects LTM data available at time of acquisition. Excludes unusual or non-recurring charges.
     (2) Free cash flow is defined as EBITDA minus capital expenditures.
     (3) Trimmed mean is defined as the average of the values, excluding the high and low values.
     (4) Transaction is still pending.




                                                                                                                            39
COMPARABLE M&A TRANSACTION VALUATION ANALYSIS
Transaction Value Multiples
($ in Millions)

                   Criteria for selecting transactions include:
                   − Relevant industry sector: SIC codes 2396, 5013, 3465, 3594 and 3714
                   − Announced on or after June 30, 1998
                   − Domestic transactions
                   − Target company sales greater than or equal to $1 billion
                   − Majority stake acquired
           Date                                                                                                                                     Transaction                        Transaction Value /
      Announced                                             Target                                                     Acquiror                       Value         Revenues       EBITDA(2)            EBIT           FCF(3)
           8/17/98         Cooper Automotive                                                            Federal-Mogul Corp.                     $         1,900.0           1.0x               6.5x             9.2x             8.4x
            2/1/99         Aeroquip-Vickers                                                             Eaton Corp.                                       1,986.0           0.9x               7.3x            10.4x            15.4x
           3/16/99         United Technologies Automotive                                               Lear Corp.                                        2,305.4           0.8x               7.8x            13.6x            23.1x
            4/6/00         Arvin Industries, Inc.                                                       Meritor Automotive, Inc.                          1,116.6           0.3x               3.7x             6.0x             6.8x
            8/2/00         MascoTech, Inc.                                                              Heartland Industrial Partners LP                  2,053.0           1.2x               6.7x             9.3x            11.0x
            8/7/01         Textron Automotive Trim                                                      Collins & Aikman Corp.                            1,208.4           0.7x               6.9x            11.7x            15.3x
          10/16/02         The Torrington Company                                                       Timken Co.                                          829.3           0.7x               5.6x             8.4x             7.7x
          11/17/02         TRW, Inc. - Automotive Parts                                                 Blackstone Group                                  4,725.0           0.5x               4.8x             9.2x             8.2x
            7/9/04         Dana Corporation (Automotive Aftermarket Group)(4)                           Cypress Group                                     1,100.0           0.5x               7.6x            11.4x              NA


                                                                                                        Mean                                                                0.7x               6.3x             9.9x            12.0x
                                                                                                        Median                                                              0.7x               6.7x             9.3x             9.7x
                                                                                                        Trimmed Mean(1)                                                     0.7x               6.5x             9.9x            11.0x
                                                                                                        High                                                                1.2x               7.8x            13.6x            23.1x
                                                                                                        Low                                                                 0.3x               3.7x             6.0x             6.8x


   (1) Trimmed mean is defined as the average of the values, excluding the high and low values.
   (2) Reflects LTM data available at time of acquisition. Excludes unusual or non-recurring charges.
   (3) Free cash flow is defined as EBITDA minus capital expenditures.
   (4) Transaction is still pending.




                                                                                                                                           40
DISCOUNTED CASH FLOW VALUATION ANALYSIS
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Summary of Cash Flows – 6.0x Terminal Value EBITDA Multiple
($ in Millions)

             DCF analysis using a 6.0x terminal value EBITDA multiple
                                                                                                                         Projected                                                             Terminal
                                                                                                                           2004               2005             2006              2007           Period
                   EBITDA Growth %                                                                                                                 2.9%            25.9%            8.0%
                   Distributable Cash Flow Growth %                                                                                                  NA            38.3%           49.7%

                   EBITDA                                                                                                       $664              $683             $860             $929               $924(2)
                   Less: Depreciation and Amortization                                                                          (329)             (312)            (310)            (312)
                     EBIT                                                                                                        335               372              550              617
                   Income Taxes(1)                                                                                                                (148)            (195)            (248)
                     Net Income                                                                                                                    223              355              369
                   Plus: Depreciation and Amortization                                                                                             312              310              312
                   (Less): Capital Expenditures                                                                                                   (297)            (299)            (292)
                   Plus/(Less): Restructuring Payments                                                                                             (52)             (30)              (7)
                   Plus/(Less): Changes in Working Capital                                                                                          66               14                8
                   Plus/(Less): Net Pension Impact                                                                                                (119)             (95)             (25)
                   Plus/(Less): Other Assets/Liabilities(3)                                                                                        (22)             (28)             (27)
                   Plus/(Less): "Fresh Start" Adjustments (Inventory and FAS 106)                                                                   50               (5)              (5)
                   Distributable Cash Flow                                                                                                        $161             $222             $333

                   Discount Period Convention                                                                                                       1.0              2.0             3.0                 3.0
                   Discount Rate / Factor                                                                      11.0%                            0.9009           0.8116           0.7312             0.7312
                   Terminal Value EBITDA Multiple                                                                6.0x                                                                                 5,546
                    Present Values                                                                                                                $145             $181             $243             $4,056


                     Sum of Discrete Present Values                                                             $569
                     Present Value of Terminal Value                                                           4,056
                       Implied Enterprise Value                                                                4,624

                   (1) Excludes tax shield resulting from interest expense, assuming 35% tax rate.
                   (2) Reflects adjusted EBITDA which excludes the impact of “fresh start” adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of
                   the T&N Pension Scheme by T&N and certain of its subsidiaries.
                   (3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.



                                                                                                                42
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Summary of Cash Flows – 6.5x Terminal Value EBITDA Multiple
($ in Millions)

             DCF analysis using a 6.5x terminal value EBITDA multiple
                                                                                                                        Projected                                                             Terminal
                                                                                                                          2004               2005             2006              2007           Period
                  EBITDA Growth %                                                                                                                 2.9%            25.9%            8.0%
                  Distributable Cash Flow Growth %                                                                                                  NA            38.3%           49.7%

                  EBITDA                                                                                                       $664              $683             $860             $929               $924(2)
                  Less: Depreciation and Amortization                                                                          (329)             (312)            (310)            (312)
                    EBIT                                                                                                        335               372              550              617
                  Income Taxes(1)                                                                                                                (148)            (195)            (248)
                    Net Income                                                                                                                    223              355              369
                  Plus: Depreciation and Amortization                                                                                             312              310              312
                  (Less): Capital Expenditures                                                                                                   (297)            (299)            (292)
                  Plus/(Less): Restructuring Payments                                                                                             (52)             (30)              (7)
                  Plus/(Less): Changes in Working Capital                                                                                          66               14                8
                  Plus/(Less): Net Pension Impact                                                                                                (119)             (95)             (25)
                  Plus/(Less): Other Assets/Liabilities(3)                                                                                        (22)             (28)             (27)
                  Plus/(Less): "Fresh Start" Adjustments (Inventory and FAS 106)                                                                   50               (5)              (5)
                  Distributable Cash Flow                                                                                                        $161             $222             $333

                  Discount Period Convention                                                                                                       1.0              2.0             3.0                 3.0
                  Discount Rate / Factor                                                                      11.0%                            0.9009           0.8116           0.7312             0.7312
                  Terminal Value EBITDA Multiple                                                                6.5x                                                                                 6,009
                   Present Values                                                                                                                $145             $181             $243             $4,393


                    Sum of Discrete Present Values                                                             $569
                    Present Value of Terminal Value                                                           4,393
                      Implied Enterprise Value                                                                4,962

                  (1) Excludes tax shield resulting from interest expense, assuming 35% tax rate.
                  (2) Reflects adjusted EBITDA which excludes the impact of “fresh start” adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of
                  the T&N Pension Scheme by T&N and certain of its subsidiaries.
                  (3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.


                                                                                                               43
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Discount Rate Derivation

                                                                                                                               Company Risk Premium
                                                 Inputs                                                                           1.0%                2.0%
              Risk-free Interest Rate (20-year long-term treasury yield)                                        Rf                    4.9%                4.9%
              Market Risk Premium(1)                                                                            Rm                    7.0%                7.0%
              Unlevered Asset Beta of Comparables(2)                                                            Ba                    0.78                0.78
              Comparables Tax Rate                                                                               t                   35.0%               35.0%
              Weight of Total Equity of Comparables(2)                                                          We                   57.3%               57.3%
              Weight of Net Debt of Comparables(2)                                                              Wd                   42.7%               42.7%
              Levered Equity Beta of Comparables (Ba*(1+(Wd/We*(1-t)))                                          Be                    1.15                1.15

              Cost of Equity:
              Levered Equity Beta of Comparables                                                                Be                     1.15                  1.15
              Multiply: Market Risk Premium(1)                                                                  Rm                     7.0%                  7.0%
              Industry Risk Premium                                                                                                    8.1%                  8.1%
              Plus: Company Risk Premium                                                                        Rc                     1.0%                  2.0%
              Plus: Risk-Free Interest Rate                                                                     Rf                     4.9%                  4.9%
              Cost of Equity (Rc+Rf+Be*(Rm))                                                                    Ke                    13.9%                 14.9%

              Pre-tax Cost of Debt(3)                                                                           kd                     8.0%                  8.0%
              Multiply: Federal-Mogul Tax Rate(4)                                                                t                    35.0%                 35.0%
              Cost of Debt (kd*(1-t))                                                                           Kd                     5.2%                  5.2%

              Calculation of WACC:
              Rounded WACC ((Ke*We)+(Kd*Wd))                                                                                          10.0%                 11.0%
              (1) Long-horizon expected equity risk premium. Per Ibbotson Associates. Stocks, Bonds, Bills and Inflation Valuation Edition 2003 Yearbook.
              (2) Excludes peer companies with an average trading volume over the past six months of less than 100,000.
              (3) For pre-tax cost of debt detail, see page 46.
              (4) Assumed Federal-Mogul tax rate per Federal-Mogul management.



                                                                                      44
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Beta Derivation(1)

                                                                                                                          Calculation of Unlevered Beta
                                                                                                                Marginal Tax
                       Company                                         Ticker             Beta Levered (2)         Rate            Net Debt %         Equity %     Beta Unlevered
    American Axle & Manufacturing Holdings, Inc.                        AXL                          1.08                35.0%             18.3%             81.7%           0.94
    Arvinmeritor, Inc.                                                  ARM                          1.08                35.0%             49.5%             50.5%           0.66
    BorgWarner, Inc.                                                    BWA                          1.14                35.0%             22.5%             77.5%           0.96
    Collins & Aikman Corp.                                              CKC                          1.11                35.0%             67.8%             32.2%           0.47
    Delphi Corporation                                                  DPH                          1.14                35.0%             29.2%             70.8%           0.90
    Dana Corporation                                                    DCN                          1.60                35.0%             33.1%             66.9%           1.21
    Dura Automotive Systems, Inc.                                      DRRA                          1.42                35.0%             85.2%             14.8%           0.30
    Eaton Corporation                                                   ETN                          1.13                35.0%             13.0%             87.0%           1.03
    Lear Corporation, Inc.                                              LEA                          1.11                35.0%             31.7%             68.3%           0.85
    Magna International, Inc.                                           MGA                          0.87                35.0%               0.0%           100.0%           0.87
    Tenneco Automotive, Inc.                                            TEN                          2.13                35.0%             69.4%             30.6%           0.86
    Tower Automotive, Inc.                                              TWR                          1.61                35.0%             94.0%              6.0%           0.14
    Visteon Corporation                                                  VC                          1.29                35.0%             41.7%             58.3%           0.88

                                                               Mean                                      1.29           35.0%            42.7%(4)         57.3%(4)           0.78 (4)
                                                                                                                                                               (4)
                                                               Median                                    1.14           35.0%            33.1%(4)         66.9%              0.87(4)
                                                               Trimmed Mean(3)                           1.25           35.0%            41.9%(4)         58.1%(4)           0.79(4)
                                                                                                                                               (4)             (4)
                                                               High                                      2.13           35.0%            94.0%             6.0%              1.21 (4)
                                                                                                                                              (4)              (4)
                                                               Low                                       0.87           35.0%             0.0%           100.0%              0.14 (4)
    (1) Excludes TRW Automotive due to lack of trading history and available data.
    (2) Two-year adjusted beta per Bloomberg, Inc.
    (3) Trimmed mean is defined as the average of the values, excluding the high and low values.
    (4) Excludes peer companies with an average trading volume over the past six months of less than 100,000.




                                                                                                          45
DISCOUNTED CASH FLOW VALUATION ANALYSIS
Pre-Tax Cost of Debt Detail
($ in Millions)

             The pre-tax cost of debt analysis derives the implied cost of debt for Federal-Mogul based upon its pro forma capital structure and
             its debt-to-equity ratio over time
             − This table calculates the Company’s implied pre-tax cost of debt as of its Effective Date

                                                                                                                                           Blended
                                                                                 Total Debt                   Rate                         Average
                      New Exit Revolver                                          $       -               6.216% (1)                            0.000%
                      New Exit Term Loan                                              828.0              6.466% (1)                            2.288%
                      New Tranche A Term Loans, net of discount                     1,263.3              9.000% (2)                            4.860%
                      New Junior Secured PIK Notes, net of discount                    224.2            12.000% (2)                            1.150%
                      Foreign Debt                                                      24.0             8.000%                                0.082%
                                                                                                (3)
                                                                                   $2,339.5                                                    8.380%
                      (1) Reflects average forward LIBOR yields to interpolate fixed rate equivalent for Exit Facilities assuming LIBOR + 225 bps for the
                      ABL Facility and L+250 bps for the Term Loan.
                      (2) Based upon an implied market rate of return derived from a comparable yield analysis.
                      (3) Represents principal amount of total debt, net of discount and excludes approximately $60.2 million vendor note which will be
                      non-interest bearing.



             Based upon the Company’s projections to repay indebtedness with excess cash over time and the associated implied debt-to-
             equity ratio over time, Jefferies has estimated the appropriate pre-tax cost of debt for Federal-Mogul to be 8.0%




                                                                                      46
RESTRUCTURED DEBT DISCOUNT ANALYSIS
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Summary

     Although the Pre-Petition Bank Lenders will receive no reduction in principal with respect to the New Tranche A Senior Secured
     Term Loans (“New Tranche A Loans”) and the New Junior Secured PIK Notes (“New PIK Notes”) they are receiving upon exit from
     bankruptcy, Jefferies believes that the terms the Company received are below market

     Jefferies has accordingly performed a discount analysis which reflects the estimated current market value of the New Tranche A
     Loans and the New PIK Notes (collectively, the “Restructured Debt”)

     Jefferies believes the yields implied by the Restructured Debt are most comparable to yields on high yield debt securities for
     several reasons including:
     − The principal terms of the Restructured Debt
     − Approximately $1.4 billion in debt facilities senior to the Restructured Debt
     − Pro forma for the exit from bankruptcy, Federal-Mogul’s credit statistics are similar to the credit profile of high yield issuers

     The comparable yield on the New Tranche A Loans is based on the following average yields since September 30, 2003:
     − (i) Leveraged automotive industry issues – 9.073% mean yield-to-maturity
     − (ii) New single B rated issues – 8.844% mean yield-to-maturity
     − Comparable yield on New Tranche A Loans is assumed to be 9.000%

     In examining the yield differential between the New Tranche A Loans and the New PIK Notes, Jefferies examined the following:
     − (i) Yield differential between senior notes and subordinated notes for leveraged automotive industry issues – 233 bps mean
         yield differential
     − (ii) Yield differential between holding company and operating company debt issues – 327 bps mean yield differential
     − Comparable yield on New PIK Notes is assumed to be 12.000%, based on 300 bps yield differential


                                                                  48
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Summary (Cont’d)
($ in Millions)

             The following table summarizes the implied discount for the New Tranche A Loans and the New PIK Notes:


                                                                                                                                                Total New Tranche A
                                                                                                                                                Loans and New PIK
                                                                         New Tranche A Loans                     New PIK Notes                         Notes(1)

                  Principal Amount                                              $1,329.8                             $305.6                           $1,635.4
                  Comparable Yield                                                  9.000%                           12.000%                                NA
                  Implied Discount (%)                                              4.998%(2)                        26.630%                              9.041%
                  Implied Discount ($)                                              $66.5(2)                           $81.4                            $147.9
                  Principal Amount, Net of Discount                             $1,263.3                             $224.2                           $1,487.6
                  (1)   Includes $1,605.4 million in Restructured Pre-Petition Bank Debt, $5.3 million New Surety PIK Notes and $24.7 million in New Surety Tranche A Loans.
                  (2)   Implied discount calculated using average forward LIBOR yields to interpolate fixed rate equivalent for New Tranche A Loans.




                                                                                              49
RESTRUCTURED DEBT DISCOUNT ANALYSIS
High Yield Market Overview
                         In selecting appropriate yields at which to discount the Restructured Debt, Jefferies examined the recent condition of the high yield
                         market
                         The high yield market in 2003 was one of the strongest markets in the history of high yield debt
                         − 508 deals were priced for $138.7 billion
                         − Mutual fund net inflows totaled $20.1 billion – 12 weeks with over $1 billion in high yield inflows
                         Despite strong 2003 performance, the high yield market performance has been mixed
                         − Net outflows of cash from high yield mutual funds
                         In determining comparable yields for the Restructured Debt, Jefferies examined average yields since September 30, 2003
                                                         US Treasury Yields                                                                                                                   US Treasury Yield Curves
          % Yield
                                                                                                                                                       %
          10.0%                                                                                                                                            6.0%


           8.0%                                                                                                                                            5.0%

                                                                                                                                                           4.0%
           6.0%
                                                                                                                                                           3.0%
           4.0%
                                                                                                                                                           2.0%

           2.0%                                                                                                                                            1.0%

                                                                                                                                                           0.0%
           0.0%
                                                                                                                                                                      1 2 3       5     7               10                                                        30
                  1987    1988   1989   1991    1992   1993      1994   1995   1996   1997   1998   1999   2000   2001   2002   2004

                                               5-Year Treasury            10-Year Treasury          30-Year Treasury                                           3        6                     10/01/04                04/01/04            10/01/03
                                                                                                                                                             Month    Month


                                                                                                                                                    Date          3-Month     6-Month       1-Year(1)        2-Year     3-Year   5-Year        7-Year   10-Year   30-Year(2)
                                                                                                                                                  10/01/04           1.69%     1.98%         2.20%           2.62%      2.88%    3.42%         3.73%     4.19%         4.94%
                                                                                                                                                  04/01/04           0.94%     1.02%         1.30%           1.85%      2.27%    3.13%         3.53%     4.14%         4.97%
                                                                                                                                                  10/01/03           0.93%     1.01%         1.22%           1.63%      2.11%    3.09%         3.53%     4.19%         5.09%

Source:      Bloomberg, L.P.                                                                                                                Source:    Bloomberg, L.P.
                                                                                                                                            (1)  The yield on the 1-year treasury is interpolated from the applicable yield curve.
                                                                                                                                            (2)  On October 31, 2001, the U.S. Government announced its plans to stop issuing 30-year treasury bonds. The yield
                                                                                                                                                 on the 30-year treasury is based on the last issued 30-year from February 15, 2001 which matures in 2031.




                                                                                                                                       50
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Debt Issues of Leveraged Automotive Suppliers(1)
($ in Millions)
                                                                                                                                                Current Data - 9/30/2004                           Average from 9/30/03 - 9/30/04
  Issuer                                         Type of Security               Coupon         Current Amount      Maturity Date        Price     Yield To Maturity     Yield To Worst     Price        Yield To Maturity Yield To Worst   Moody's   Standard & Poor's
  Dana Corp.                                       Senior Notes                   6.500        $         150.0        3/15/08         105.880           4.640                4.640       103.900              5.370                5.370    Ba3             BB
  Dana Corp.                                       Senior Notes                   6.500                  350.0         3/1/09         105.750           5.030                5.030       103.920              5.570                5.570    Ba3             BB
  Dana Corp.                                       Senior Notes                  10.125                  250.0        3/15/10         113.500           7.100                3.920       114.260              7.140                4.800    Ba3             BB
  Dana Corp.                                       Senior Notes                   9.000                  575.0        8/15/11         120.750           5.350                5.350       117.270              6.060                6.060    Ba3             BB
  Dana Corp.                                       Senior Notes                   7.000                  197.0        3/15/28         100.500           6.960                6.960        96.230              7.350                7.350    Ba3             BB
  Dana Corp.                                       Senior Notes                   7.000                  375.0         3/1/29         100.500           6.960                6.960        96.340              7.330                7.330    Ba3             BB
  Delco Remy Intl Inc.                             Senior Notes                   8.625                  145.0       12/15/07         102.000           7.900                5.670       101.710              8.060                7.200     B2           CCC+
  Delco Remy Intl Inc.                      Senior Subordinated Notes            11.000                  165.0         5/1/09         105.000           9.620                9.320       103.630             10.060                9.690     B3           CCC+
  Delco Remy Intl Inc.                      Senior Subordinated Notes             9.375                  150.0        4/15/12          98.000           9.750                9.750        98.180              9.710                9.700     B3           CCC+
  Dura Oper Corp                                   Senior Notes                   8.625                  450.0        4/15/12          99.000           8.810                8.810       103.540              8.030                7.880     B1             B+
  Dura Oper Corp                            Senior Subordinated Notes             9.000                  458.5         5/1/09          89.000          12.200               12.200        97.630              9.620                9.550     B2              B
  Metaldyne Corp                                   Senior Notes                  10.000                  150.0        11/1/13          93.000          11.250               11.250        88.140             10.110               10.080     B3              B
  Metaldyne Corp                            Senior Subordinated Notes            11.000                  250.0        6/15/12          79.500          15.660               15.660        99.430             13.480               13.480    Caa1             B
  Tenneco Automotive Inc.                     Senior Secured Notes               10.250                  475.0        7/15/13         114.000           8.000                7.160       114.070              8.060                7.370     B2             B-
  Tenneco Automotive Inc.                   Senior Subordinated Notes            11.625                  500.0       10/15/09         105.500          10.200                9.480       107.010              9.940               6.840      B3             B-
  TRW Automotive Acq. Corp.                        Senior Notes                   9.375                  925.0        2/15/13         114.250           7.090 (3)            7.090 (3)   113.970              7.200                7.200     B1            BB-
  TRW Automotive Int Holdings                Subordinated PIK Notes               8.000                  600.0          2018             NA            12.000               12.000          NA               12.000               12.000     NA             NA
  TRW Automotive Acq. Corp.                 Senior Subordinated Notes            11.000                  300.0       2/15/13          119.000           7.860                7.860       118.480              8.020               8.020      B2            BB-
  TRW Automotive Acq. Corp.                     Senior Notes (Euro)              10.125             200.0 Euro       2/15/13             NA              NA                   NA            NA                 NA                   NA       B1            BB-
  TRW Automotive Acq. Corp.              Senior Subordinated Notes (Euro)       11.750              125.0 Euro        2/15/13            NA              NA                   NA            NA                 NA                   NA       B2            BB-

                                                                                                                 Mean(2)                               9.523                9.164                            9.073             8.603
                                                                                                                 Median(2)                             9.095                8.652                            9.037             8.789
                                                                                                                 Trimmed Mean(2)(3)                    9.420                9.014                            9.044             8.439
                                                                                                                 High(2)                               13.455              13.455                           11.795            11.780
                                                                                                                 Low(2)                                6.007                5.477                            6.470             6.080
                                                                      (5)
  Yield Differential Between Senior Notes and Subordinated Notes
  Delco Remy Intl Inc.                                                                                                                                  1.850               4.080                            2.000            2.500
  Dura Oper Corp                                                                                                                                        3.390               3.390                            1.590            1.670
  Metaldyne Corp                                                                                                                                        4.410               4.410                            3.370            3.400
  Tenneco Automotive Inc.                                                                                                                               2.200               2.320                            1.880             NM
  TRW Automotive                                                                                                                                        2.840               2.840                            2.810            2.810
                                                                                                                 Mean(2)                                2.938               3.408                            2.330            2.595
                                                                                                                 Median(2)                              2.840               3.390                            2.000            2.655
                                                                                                                 Trimmed Mean(2)(3)                     2.810               3.437                            2.230            2.655
                                                                                                                 High(2)                                4.410               4.410                            3.370            3.400
                                                                                                                 Low(2)                                 1.850               2.320                            1.590            1.670

  (1) Per Factset Research Systems as of September 30, 2004.
  (2) Based upon average yield of each issuer.
  (3) Trimmed Mean excludes high and low values.
  (4) Based on 12% discount rate used to estimate the fair value of the note for accounting purposes.
  (5) Reflects average for each type of issue when more than one senior or subordinated note issue exists.




                                                                                                                                          51
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003
                           Issuer                     Issue Date                  Type of Security             Face Amount   Cpn/Div      Price   Moody's   S&P    Maturity   YTM        Spread   Industry
 Koppers Industries, Inc.                               9/30/03    144a Senior Secured Notes                      320.0         9.875   100.000     B2        B    10/15/13      9.875      593   Chemicals and Allied Products
 Power Receivable Finance                               9/30/03    144a Senior Subordinated Notes                  22.2        10.750    99.716     B1       BB+    2/1/12     11.000        -    Electric & Gas Utilities and Sanitary Services
 Dynegy Holdings Inc                                    9/30/03    144a Second Priority Senior Secured Notes      100.0         9.875   104.250     B3        B-    7/15/10      8.917      556   Mining
 Dynegy Holdings Inc                                    9/30/03    144a Second Priority Senior Secured Notes      200.0        10.125   105.250     B3        B-    7/15/13      9.165      524   Mining
 Dynegy Holdings Inc.                                   9/30/03    144a Second Priority Senior Secured Notes      200.0        10.125   105.250     B3        B-    7/15/13      9.165      524   Mining
 HM Publishing Co.                                      9/30/03    144a Senior Discount Notes                     150.9            -     56.960    CAA1       B    10/15/13    11.500       745   Printing & Publishing
 Scotts Co. (The)                                       10/1/03    144a Senior Subordinated Notes                 200.0         6.625   100.000    BA3       B+    11/15/13      6.625      268   Chemicals and Allied Products
 Le Groupe Videotron Ltee                               10/2/03    Senior Notes                                   335.0         6.875    99.081    BA3        B+    1/15/14      7.000      295   Communications
 B/E Aerospace Inc.                                     10/2/03    144a Senior Notes                              175.0         8.500   100.000     B3        B+    10/1/10      8.500      507   Manufacturing - Furniture & Fixtures
 IMCO Recycling Inc.                                    10/2/03    144a Senior Secured Notes                      210.0        10.375    99.383     B3        B-   10/15/10    10.500       704   Metals & Related Products
 LBI Media Inc.                                         10/3/03    144a Senior Discount Notes                      68.4            -     58.456     B3        B-   10/15/13    11.000       681   Communications
 Parker Drilling Co.                                    10/3/03    144a Senior Notes                              175.0         9.625   100.000     B2        B-    10/1/13      9.625      545   Mining
 Von Hoffman Corp.                                      10/7/03    144a Senior Notes                               60.0        10.250   104.750     B2        B     3/15/09      8.916      603   Printing & Publishing
 Mobile TeleSystems Finance SA                          10/8/03    144a Senior Unsecured Notes                    400.0         8.375   100.000     Ba3       B+   10/14/10      8.375      527   Communications
 Universal Hospital Services, Inc.                      10/8/03    144a Senior Notes                              260.0        10.125   100.000     B3        B-    11/1/11    10.125       588   Other Services
 Phibro Animal Health Corp.                            10/10/03    144a Senior Secured Notes                      105.0        13.000   100.000     B2        B-    10/1/07    13.000        -    Chemicals and Allied Products
 Norcraft Cos LP/ Norcraft Finance Corp                10/10/03    144a Senior Subordinated Notes                 150.0         9.000   100.000     B3        B-    8/15/11      9.000      506
 LNR Property Corp.                                    10/15/03    144a Senior Subordinated Notes                 300.0         7.250   100.000    BA3       B+    10/15/13      7.250      284   Financial Services
 Vicap S.A. de C.V. (Vitro S.A.)                       10/15/03    144a Senior Unsecured Notes                    225.0        11.750    98.556     B2        B-    11/1/13    12.000       759   Stone, Clay, Glass & Concrete Products
 Nationsrent, Inc.                                     10/16/03    144a Senior Secured Notes                      250.0         9.500   100.000     B2       BB-   10/15/10      9.500      557   Business Services and Software
 Nextel Communications, Inc.                           10/16/03    Senior Notes                                   500.0         6.875   100.000     B2        B+   10/31/13      6.875      240   Communications
 DRS Technologies, Inc                                 10/16/03    144a Senior Subordinated Notes                 350.0         6.875   100.000     B2        B     11/1/13      6.875      251   Metals & Related Products
 National Nephrology Associates Inc                    10/16/03    144a Senior Subordinated Notes                 160.0         9.000   100.000     B3        B-    11/1/11      9.000      487   Other Services
 Metaldyne Corp.                                       10/20/03    144a Senior Notes                              150.0        10.000   100.000     B3        B     11/1/13    10.000       565   Transportation Equipment
 Inn of the Mountain Gods Resort & Casino              10/21/03    144a Senior Notes                              200.0        12.000   100.000    CAA1       B    11/15/10    12.000       823   Hotels
 Fisher Scientific International, Inc.                 10/21/03    144a Senior Subordinated Notes                 150.0         8.000   107.500     B2        B+     9/1/13      6.747      286   Wholesale Trade - Durable Goods
 Paramount Resources Ltd                               10/22/03    Senior Notes                                   175.0         7.875   100.000     B2        B     11/1/10      7.875      416   Drilling and Exploration
 Genesis Healthcare Corp.                              10/23/03    144a Senior Subordinated Notes                 225.0         8.000   100.000     B3        B-   10/15/13      8.000      367   Other Services
 Keystone Automotive Operations Inc                    10/23/03    144a Senior Subordinated Notes                 175.0         9.750   100.000     B3        B-    11/1/13      9.750      542   Retail Trade
 Oxford Automotive, Inc.                               10/24/03    144a Senior Secured Second Lien Notes          167.0        12.000    85.000     B3      CCC+   10/15/10     15.600       -    Metals & Related Products
 Host Marriott LP                                      10/27/03    144a Senior Notes (series J)                   750.0         7.250   100.000    BA3        B+    11/1/13      7.250      286   Hotels
 Gaylord Entertainment Co                              10/28/03    144a Senior Notes                              350.0         8.000   100.000     B3        B-   11/15/13        -        380   Hotels
 Neighborcare Inc (Genesis Health Ventures)            10/29/03    144a Senior Subordinated Notes                 250.0         6.875   100.000    BA3       B+    11/15/13      6.875      262   Chemicals and Allied Products
 Nalco Co                                              10/29/03    144a Senior Notes                              200.0         7.750   100.000     B2        B    11/15/11      7.750       -    Electric & Gas Utilities and Sanitary Services
 Nalco Co                                              10/29/03    144a Senior Subordinated Notes                 465.0         8.875   100.000    CAA1       B    11/15/13      8.875       -    Electric & Gas Utilities and Sanitary Services
 Nalco Co                                              10/29/03    144a Senior Notes                              665.0         7.750   100.000     B2        B    11/15/11      7.750       -    Electric & Gas Utilities and Sanitary Services
 Nalco Co                                              10/29/03    144a Senior Subordinated Notes                 200.0         9.000   100.000    CAA1       B    11/15/13      9.000       -    Electric & Gas Utilities and Sanitary Services
 Dura Operating Corp. (Dura Automotive Systems)        10/29/03    144a Senior Notes                               50.0         8.625   100.000     B1        B+    4/15/12      8.625      433   Transportation Equipment
 Silgan Holdings, Inc.                                 10/30/03    144a Senior Subordinated Notes                 200.0         6.750   100.000     B1        B+   11/15/13      6.750      242   Metals & Related Products
 O'Charley's Inc                                       10/30/03    144a Senior Subordinated Notes                 125.0         9.000   100.000    BA3        B     11/1/13      9.000      466   Retail Trade
 Telex Communicatios Inc.                              10/31/03    144a Senior Secured Notes                      125.0        11.500   100.000     B3        B    10/15/08    11.500       824   Communications
 Cincinnati Bell Inc.                                  10/31/03    144a Senior Subordinated Notes                 540.0         8.975   100.000     B3        B-    1/15/14      8.975      405   Communications
 American Towers Inc.                                   11/3/03    144a Senior Subordinated Notes                 400.0         7.250   100.000     B3      CCC     12/1/11      7.250      321   Communications
 Dex Media Inc                                          11/3/03    144a Senior Notes                              500.0         8.000   100.000    CAA1       B    11/15/13      8.000      365   Communications
 Dex Media Inc                                          11/3/03    144a Senior Notes                              250.0            -     64.393    CAA1       B    11/15/13      9.000      465   Communications
 Manitowoc Co.                                          11/3/03    Senior Notes                                   150.0         7.125   100.000     B1        B+    11/1/13      7.125      276   Electronic Equipment
 River Rock Entertainment Authority                     11/4/03    144a Senior Notes                              200.0         9.750    98.651     B2        B+    11/1/11     10.000      599   Agriculture, Forestry and Fishing
 Charter Communications Holdings LLC/ Capital Corp.     11/4/03    144a Senior Notes                              500.0         8.750   100.000     B3      CCC    11/15/13      8.750      446   Communications
 Premcor Refining Group Inc.                            11/5/03    144a Senior Notes                              175.0         7.750   100.000     B2        B      2/1/12      7.750      360   Petroleum Refining
 PPC Escrow Corp. (Pilgrim's Pride)                     11/6/03    Senior Subordinated Notes                      100.0         9.250   100.000     B2        B+   11/15/13      9.250      485   Agriculture, Forestry and Fishing
 Stratus Technologies                                   11/6/03    144a Senior Notes                              170.0        10.375   100.000     B3        B     12/1/08     10.375      696   Business Services and Software
 Michael Foods Inc.                                     11/6/03    144a Senior Subordinated Notes                 150.0         8.000   100.000     B3        B-   11/15/13      8.000      359   Manufacturing - Food & Kindred Products
 Triad Hospitals Inc                                    11/6/03    144a Senior Subordinated Notes                 600.0         7.000   100.000     B3        B    11/15/13      7.000      260   Other Services




                                                                                                                             52
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                                Issuer                      Issue Date                   Type of Security           Face Amount        Cpn/Div     Price    Moody's   S&P    Maturity   YTM          Spread     Industry
Quality Distribution LLC/ QD Capital Corp                     11/6/03    144a Senior Subordinated Notes                125.0              9.000   100.000     B3       B-    11/15/10      9.000         509    Transportation Equipment
Tabletop Holdings, Inc.                                       11/6/03    144a Senior Secured Discount Notes             75.0                 -    55.131     CAA1      B-    5/15/14     12.250          785
Calpine Corp                                                  11/6/03    144a 2nd Priority Senior Secured Notes        400.0              9.875   98.000      NR        B    11/15/11     10.243         -
Dollar Financial Group, Inc.                                  11/7/03    144a Senior Notes                             220.0              9.750   100.000     B3       B+    11/15/11      9.750         558    Financial Services
Terex Corp.                                                  11/10/03    144a Senior Subordinated Notes                300.0              7.375   99.110      B3        B     1/14/13      7.500         305    Industrial & Commercial Machinery
Berry Plastics Corp.                                         11/10/03    144a Senior Subordinated Notes                 95.2             10.750   112.000     B3       B-     7/15/12      8.169         519    Rubber & Plastic Products
Sonic Automotive, Inc.                                       11/12/03    144a Senior Subordinated Notes                75.0               8.625   105.000     B2       B+     8/15/13      7.750         335    Other Services
Tekni-Plex, Inc.                                             11/12/03    144a Senior Secured Notes (2nd Priority)      275.0              8.750   100.000     B2       B-    11/15/13      8.750         435    Rubber & Plastic Products
Steel Dynamics Inc.                                          11/14/03    144a Senior Notes                             100.0              9.500   109.000     B2       B+     3/15/09      7.034         386    Metals & Related Products
Concentra Operating Corp.                                    11/17/03    144a Senior Subordinated Notes                 30.0              9.500   106.500     B3       B-     8/15/10      8.057         427    Other Services
Crown Castle International Corp.                             11/17/03    144a Senior Notes                             300.0              7.500   96.603      B3      CCC     12/1/13      8.000         381    Communications
LNR Property Corp.                                           11/17/03    144a Senior Subordinated Notes                550.0              7.250   100.500    BA3       B+    10/15/13      7.166         341    Financial Services
Equistar Chemicals, L.P.                                     11/18/03    144a Senior Notes                             250.0             10.625   104.685     B2       BB-    5/1/11       9.500         -      Mining
General Cable Corp                                           11/18/03    144a Senior Notes                             285.0              9.500   100.000     B2        B    11/15/10      9.500         595    Communications
Poster Financial Group Inc (Golden Nugget)                   11/18/03    144a Senior Secured Notes (2nd Lien)          155.0              8.750   100.000     B2        B     12/1/11      8.750         490    Financial Services
Nortek Holdings                                              11/19/03    144a Senior Discount Notes                    515.0                 -    67.849     CAA1       B-     5/1/11     10.000         633    Metals & Related Products
Georgia Gulf Corp.                                           11/19/03    144a Senior Notes                             100.0              7.125   100.000     B1       BB-   12/15/13      7.125         289    Chemicals and Allied Products
Imax Corp.                                                   11/19/03    144a Senior Notes                             160.0              9.625   100.000     B3       B-     12/1/10      9.625         607    Electronic Equipment
Millicom International Cellular S.A.                         11/19/03    144a Senior Notes                             550.0             10.000   100.000     B3       B-     12/1/13     10.000         586    Communications
MediaNews Group Inc                                          11/20/03    144a Senior Subordinated Notes                300.0              6.875   99.133      B2       B+     10/1/13      7.000         276    Printing & Publishing
Millar Western Forest Products, Ltd.                         11/20/03    144a Senior Notes                             190.0              7.750   100.000     B3       B+    11/15/13      7.750         356    Manufacturing - Paper & Allied Products
Pinnacle Foods Holding Corp                                  11/20/03    144a Senior Subordinated Notes                200.0              8.250   100.000     B3        B     12/1/13      8.250         407    Manufacturing - Food & Kindred Products
J Ray McDermott S.A.                                         11/21/03    144a Senior Secured Notes                     200.0             11.000   97.064      B3       B-    12/15/13     11.500         737    Mining
North American Energy Partners                               11/21/03    144a Senior Notes                             200.0              8.750   100.000     B2       B+     12/1/11      8.750         469    Mining
OMI Corp.                                                    11/21/03    144a Senior Notes                             200.0              7.625   100.000     B1       B+     12/1/13      7.625         349    Transportation
Penn National Gaming, Inc.                                   11/24/03    144a Senior Subordinated Notes                200.0              6.875   98.496      B3        B     12/1/11      7.125         325    Other Services
Empresa Brasileira de Telecomunicacoes (Embratel)            11/24/03    144a Senior Notes                             200.0             11.000   99.049      B2       NR    12/15/08     11.250         -      Electric & Gas Utilities and Sanitary Services
General Nutrition Centers                                    11/25/03    144a Senior Subordinated Notes                215.0              8.500   100.000     B3       B-     12/1/10      8.500         474    Manufacturing - Food & Kindred Products
Jostens Holding Corp                                         11/25/03    144a Senior Discount Notes                    247.2                 -    60.682     CAA2       B-    12/1/13     10.250         606    Miscellaneous Manufacturing
Hanover Compressor Co.                                        12/2/03    Subordinated Notes                            262.6                 -    69.307     CAA1      B-    3/31/07     11.375          -      Business Services and Software
Six Flags, Inc.                                               12/2/03    144a Senior Notes                             325.0              9.625   100.000     B2       B-     6/1/14       9.625         525    Other Services
Huntsman LLC                                                  12/3/03    144a Senior Secured Notes                      75.4             11.625   99.500      B2        B    10/15/10     11.720         783    Rubber & Plastic Products
Atrium Cos., Inc.                                             12/3/03    144a Senior Subordinated Notes                 50.0             10.500   106.875     B3        B     5/1/09       5.880   +480 (WST)   Stone, Clay, Glass & Concrete Products
Insight Midwest L.P.                                          12/4/03    144a Senior Notes                             130.0             10.500   108.750     B2       B+     11/1/10      8.039         421    Communications
Crown Castle International Corp.                              12/4/03    144a Senior Notes                             300.0              7.500   98.750      B3      CCC     12/1/13      7.681         330    Communications
Iron Mountain Inc.                                            12/4/03    144a Senior Subordinated Notes                170.0              6.625   96.500      B2        B     1/1/16       7.060         240    Business Services and Software
Tenneco Automotive, Inc.                                      12/8/03    144a Senior Secured Notes (2nd Lien)          125.0             10.250   113.000     B2      CCC+    7/15/13      7.775         351    Transportation Equipment
Granite Broadcasting Corp.                                    12/8/03    144a First Lien Notes                         405.0              9.750   98.782      B3      CCC     12/1/10     10.000         617    Communications
SBA Communications Corp.                                      12/8/03    144a Senior Discount Notes                    404.0                 -    68.404      NR       NR    12/15/11      9.750         572    Construction
Equinox Holdings Inc                                          12/9/03    Senior Notes                                  160.0              9.000   100.000     B3       B-    12/15/09      9.000         534    Other Services
Hanover Compressor Co.                                        12/9/03    Senior Notes                                  200.0              8.625   100.000     B3        B    12/15/10      8.625         471    Business Services and Software
Valeant Pharmaceuticals International                         12/9/03    144a Senior Notes                             300.0              7.000   100.000     B1       BB-   12/15/11      7.000         307    Chemicals and Allied Products
Blue Ridge Paper Pdts Inc                                    12/10/03    144a Senior Secured Notes                     125.0              9.500   100.000     B2       B-    12/15/08      9.500         622    Manufacturing - Paper & Allied Products
THL Bedding Co./ Simmons Co.                                 12/10/03    144a Senior Subordinated Notes                200.0              7.875   100.000    CAA1       B-    1/15/14      7.875         355    Manufacturing - Textiles
Bombardier Recreational Pdts                                 12/11/03    144a Senior Subordinated Notes                200.0              8.375   100.000     B3       B-    12/15/13      8.375         415    Financial Services
WMC Finance Co.                                              12/11/03    144a Senior Notes                             200.0             11.750   100.000     B2       B-    12/15/18     11.750         855    Financial Services
Couche-Tard Financing Corp (Alimentation Couche-Tard Inc)    12/11/03    144a Senior Subordinated Notes (gtd)          350.0              7.500   100.000    BA3        B    12/15/13      7.500         317    Manufacturing - Food & Kindred Products
KRATON Polymers LLC/ Capital Corp                            12/11/03    144a Senior Subordinated Notes                200.0              8.125   100.000     B3        B     1/15/14      8.125         380    Chemicals and Allied Products
Sensus Metering Systems Inc                                  12/11/03    144a Senior Subordinated Notes                275.0              8.626   100.000    CAA1       B-   12/15/13      8.626         428    Miscellaneous Manufacturing
Ship Finance International Ltd (Frontline Ltd)               12/11/03    144a Senior Notes                             580.0              8.500   100.000     B2        B    12/15/13      8.500         417    Transportation
United Agri Products Inc                                     12/11/03    144a Senior Notes                             225.0              8.250   100.000     B3        B    12/15/11      8.250         425    Chemicals and Allied Products
Great Lakes Dredge and Dock Corp.                            12/12/03    144a Senior Subordinated Notes                175.0              7.750   100.000     B3       B-    12/15/13      7.750         354    Construction
Land O'Lakes Inc                                             12/12/03    144a Senior Secured Notes (2nd Lien)          175.0              9.000   100.000     B2        B    12/15/10      9.000         538    Manufacturing - Food & Kindred Products




                                                                                                                                  53
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                                       Issuer                                     Issue Date                  Type of Security                 Face Amount   Cpn/Div     Price    Moody's   S&P    Maturity   YTM        Spread   Industry
Mariner Health Care Inc.                                                           12/12/03    144a Senior Subordinated Notes                     175.0         8.250   100.000     B3       B-    12/15/13      8.250      405   Other Services
Pathmark Stores Inc.                                                               12/12/03    144a Senior Subordinated Notes                      50.0         8.750   103.000     B2        B     2/1/12       8.115      468   Retail Trade
Young Broadcasting Inc.                                                            12/12/03    144a Senior Notes                                   90.0         8.500   106.910     B2        B    12/15/08      6.500      376   Communications
El Pollo Loco Inc                                                                  12/16/03    144a Senior Secured Notes                          110.0         9.250   100.000     B2        B    12/15/09      9.250      575   Retail Trade
NRG Energy Inc.                                                                    12/17/03    144a Senior Secured Notes (2nd Lien)              1,250.0        8.000   100.000     B2       B+    12/15/13      8.000      382   Electric & Gas Utilities and Sanitary Services
Resolution Performance Products LLC                                                12/17/03    144a Senior Secured Notes                          140.0         8.000   100.000     NR       B+    12/15/09      8.000      467   Chemicals and Allied Products
Asbury Automotive Group Inc.                                                       12/18/03    144a Senior Subordinated Notes                     200.0         8.000   100.000     B3        B     3/15/14      8.000      384   Retail Trade
Nexstar Finance LLC/ Finance Inc (Nexstar Broadcasting)                            12/18/03    144a Senior Subordinated Notes                     125.0         7.000   100.000     B3       B-     1/15/14      7.000      285   Communications
Suburban Propane Partners LP/ Suburban Energy Finance Corp                         12/18/03    144a Senior Notes                                  175.0         6.875   100.000     B1        B    12/15/13      6.875      274   Retail Trade
CSN Islands VII Corp.                                                                1/8/04    144a Senior Unsecured Notes                        200.0         9.750   104.875     B1       B+    12/23/13      8.996      474   Metals & Related Products
Elizabeth Arden Inc                                                                  1/8/04    144a Senior Subordinated Notes                     200.0         7.750   100.000     B3       B-     1/15/14      7.750      350   Chemicals and Allied Products
CSK Auto, Inc.                                                                       1/9/04    144a Senior Subordinated Notes                     225.0         7.000   100.000     B2       B-     1/15/14      7.000      290   Retail Trade
Telecomunicacoes de Minas Gerais (Telemig Celular S.A.)/Amazonia Celelular S.A.     1/12/04    144a Bonds                                         120.0         8.750   99.504      B2       B+     1/20/09      8.875      583   Electric & Gas Utilities and Sanitary Services
Primus Telecommunications Group, Inc.                                               1/13/04    144a Senior Notes                                  240.0         8.000   100.000     B3      CCC     1/15/14      8.000      397   Communications
Star Gas Propane, L.P. / /Star Gas Finance Co.                                      1/13/04    144a Senior Notes                                  350.0        10.250   110.500     B3        B     2/15/13      8.230      528   Retail Trade
Nalco Finance Holdings LLC                                                          1/15/04    144a Senior Discount Notes                         694.0            -    64.235     CAA2      B-     2/1/14       9.000      502   Electric & Gas Utilities and Sanitary Services
American Casino & Entertainment Properties LLC                                      1/15/04    144a Senior Secured Notes                          215.0         7.850   100.000     B2        B     2/1/12       7.850      385   Hotels
Communications and Power Industries, Inc.                                           1/15/04    144a Senior Subordinated Notes                     125.0         8.000   100.000     B3       B-     2/1/12       8.000      427   Electronic Equipment
Seminis Vegetable Seeds Inc                                                         1/15/04    144a Senior Subordinated Notes                     140.0        10.250   109.000     B3       B-     10/1/13      8.844      463   Agriculture, Forestry and Fishing
Station Casinos, Inc.                                                               1/15/04    144a Senior Subordinated Notes                     400.0         6.500   100.000     B2       B+     2/1/14       6.500      253   Hotels
Vail Resorts Inc.                                                                   1/15/04    144a Senior Subordinated Notes                     390.0         6.750   100.000     B2        B     2/15/14      6.750      278   Other Services
New ASAT (Finance) Ltd                                                              1/16/04    144a Senior Notes                                  150.0         9.250   100.000     B3        B     2/1/11       9.250      573   Electronic Equipment
Votorantim Overseas III                                                             1/16/04    144a Notes                                         300.0         7.875   99.489      B1       B+     1/23/14      7.950      395   Financial Services
UAP Holding Corp                                                                    1/20/04    144a Senior Discount Notes                         125.0            -    65.992     CAA2      B-    7/15/12      10.750      695   Construction
Portola Packaging, Inc.                                                             1/20/04    144a Senior Notes                                  180.0         8.250   100.000     B2       B-     2/1/12       8.250      448   Rubber & Plastic Products
NRG Energy Inc.                                                                     1/21/04    144a Senior Secured Notes (2nd Lien)               475.0         8.000   106.000     B2       B+    12/15/13      7.142      312   Electric & Gas Utilities and Sanitary Services
Mail-Well Inc.                                                                      1/21/04    144a Senior Subordinated Notes                     320.0         7.875   100.000     B3        B     12/1/13      7.875      386   Business Services and Software
Casella Waste Systems Inc.                                                          1/22/04    144a Senior Subordinated Notes                      45.0         9.750   113.500     B3        B     2/1/13       6.914      431   Electric & Gas Utilities and Sanitary Services
Companhia Siderurgica Paulista (Cosipa)                                             1/23/04    144a Senior Notes                                  175.0         8.250   99.198      B2       B+     1/30/09      8.450      533   Metals & Related Products
United Rentals, Inc.                                                                1/23/04    144a Senior Notes                                 1,000.0        6.500   100.000     B1       BB-    2/15/12      6.500      272   Business Services and Software
United Rentals, Inc.                                                                1/23/04    144a Senior Subordinated Notes                     375.0         7.000   100.000     B2       B+     2/15/14      7.000      297   Business Services and Software
Northwest Airlines, Inc.                                                            1/26/04    Senior Notes                                       300.0        10.000   96.227     CAA1      B-     2/1/09      11.000      789   Transportation
Inmarsat Finance Plc                                                                1/27/04    144a Senior Notes                                  375.0         7.625   100.000     B2        B     6/30/12      7.625      367   Communications
Freeport-McMoRan Copper & Gold Inc.                                                 1/28/04    144a Senior Notes                                  350.0         6.875   100.000     B2       B-     2/1/14       6.875      269   Construction
Dex Media Inc                                                                       1/28/04    144a Senior Discount Notes                         361.0            -    69.384     CAA1       B    11/15/13      8.250      451   Communications
William Lyon Homes Inc.                                                             1/28/04    144a Senior Notes                                  150.0         7.500   100.000     B3       B-     2/15/14      7.500      330   Construction
Thermadyne Holdings Corp.                                                           1/29/04    144a Senior Subordinated Notes                     175.0         9.250   100.000    CAA1      B-     2/1/14       9.250      503   Industrial & Commercial Machinery
Nectar Merger Corp / FTD Inc                                                        1/30/04    144a Senior Subordinated Notes                     175.0         7.750   100.000     B3       B-     2/15/14      7.750      360   Wholesale Trade - Nondurable Goods
Petro Stopping Centers LP / Petro Financial Corp                                    1/30/04    144a Senior Secured Notes                          225.0         9.000   100.000     B3       B-     2/15/12      9.000      508   Other Services
Qwest Communications International, Inc.                                            1/30/04    144a Senior Notes                                  525.0         7.250   99.321      B3      CCC+    2/25/11      7.375      369   Communications
Qwest Communications International, Inc.                                            1/30/04    144a Senior Notes                                  500.0         7.500   98.273      B3      CCC+    2/15/14      7.750      362   Communications
AmeriPath Inc.                                                                       2/4/04    144a Senior Subordinated Notes                      75.0        10.500   107.125     B3       B-     4/1/13       9.116      544   Other Services
Dunlop Standard Aerospace Plc                                                        2/4/04    144a Senior Notes                                  120.0        11.875   105.125     B3      CCC+    5/15/09      9.983      756   Transportation Equipment
Playtex Products, Inc.                                                               2/4/04    144a Senior Secured Notes                          460.0         8.000   100.000     B2        B     3/1/11       8.000      433   Manufacturing - Paper & Allied Products
GCI, Inc.                                                                            2/5/04    144a Senior Notes                                  230.0         7.250   98.264      B2       B+     2/15/14      7.500      332   Communications
Ply Gem Industries Inc                                                               2/5/04    144a Senior Subordinated Notes                     225.0         9.000   100.000     B3       B-     2/15/12      9.000      506   Metals & Related Products
Argosy Gaming Co.                                                                    2/5/04    144a Senior Subordinated Notes                     350.0         7.000   100.000     B3       B+     1/15/14      7.000      282   Hotels
Inverness Medical Innovations                                                        2/5/04    144a Senior Subordinated Notes                     150.0         8.750   100.000    CAA1      B-    2/15/12       8.750      487   Measuring, Photographic, Optical Goods
Pinnacle Foods Holding Corp                                                          2/5/04    144a Senior Subordinated Notes                     194.0         8.250   103.596     B3        B     12/1/13      7.625      394   Manufacturing - Food & Kindred Products
Affinity Group Holdings, Inc.                                                        2/6/04    144a Senior Subordinated Notes                     200.0         9.000   100.000     B3       B-     2/15/12      9.000      515   Other Services
Pliant Corp.                                                                         2/6/04    144a Senior Secured Discount Notes (1st Lien)      306.0            -    73.627      B3        B     6/15/09     11.125      809   Rubber & Plastic Products
AES Corp.                                                                           2/10/04    144a Senior Notes                                  500.0         7.750   98.288      B3       B-     3/1/14       8.000      390   Electric & Gas Utilities and Sanitary Services
B.F. Saul Real Estate Investment Trust                                              2/10/04    144a Senior Secured Notes                          250.0         7.500   100.000     B3       B+     3/1/14       7.500      344   Financial Services




                                                                                                                                                  54
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                                          Issuer                          Issue Date                  Type of Security           Face Amount   Cpn/Div      Price   Moody's    S&P   Maturity   YTM       Spread   Industry
 Time Warner Telecom Holding Inc.                                           2/10/04    Senior Notes                                 200.0         9.250   100.000     B2      CCC+    2/15/14     9.250      516   Other Services
 GCI, Inc.                                                                  2/11/04    144a Senior Notes                             20.0         7.250    98.500     B2        B+    2/15/14     7.466      345   Communications
 North Atlantic Trading Co., Inc.                                           2/11/04    144a Senior Notes                            200.0         9.250   100.000     B2        B+     3/1/12     9.250      539   Manufacturing - Tobacco Products
 Erico International Corp                                                   2/12/04    144a Senior Subordinated Notes               141.0         8.875   100.000     B3        B-     3/1/12     8.875      520   Metals & Related Products
 Phillips - Van Heusen Corp.                                                2/12/04    144a Notes                                   150.0         7.250   100.000     B2       BB-    2/15/11     7.250      370   Manufacturing - Apparel
 Solo Cup Company                                                           2/12/04    144a Senior Subordinated Notes               325.0         8.500   100.000     B3        B-    2/15/14     8.500      445   Manufacturing - Paper & Allied Products
 WII Components Inc (Woodcraft Industries)                                  2/12/04    144a Senior Subordinated Notes               120.0        10.000   100.000     B2        B-    2/15/12    10.000      622   Manufacturing - Furniture & Fixtures
 Pantry, Inc. (The)                                                         2/13/04    144a Senior Subordinated Notes               250.0         7.750   100.000     B3        B-    2/15/14     7.750      374   Retail Trade
 Riverside Forest Products, Ltd.                                            2/17/04    144a Senior Notes                            150.0         7.875   100.000     B2        B+     3/1/14     7.875      385   Manufacturing - Paper & Allied Products
 Comstock Resources Inc.                                                    2/18/04    Senior Notes                                 175.0         6.875   100.000     B2        B-     3/1/12     6.875      310   Mining
 Odebrecht Overseas Ltd.                                                    2/18/04    144a Notes                                   150.0        11.500    99.075     NR        B+    2/25/09    11.750      880   Chemicals and Allied Products
 AMF Bowling Worldwide Inc.                                                 2/19/04    144a Senior Subordinated Notes               150.0        10.000   100.000     B3      CCC+     3/1/10    10.000      663   Miscellaneous Manufacturing
 Chattem, Inc.                                                              2/19/04    144a Senior Subordinated Notes               125.0         7.000   100.000     B2        B-     3/1/14     7.000      296   Chemicals and Allied Products
 Isle of Capri Casinos Inc.                                                 2/19/04    144a Senior Subordinated Notes               500.0         7.000   100.000     B2        B      3/1/14     7.000      296   Other Services
 Jo-Ann Stores Inc.                                                         2/19/04    Senior Subordinated Notes                    100.0         7.500   100.000     B2        B-     3/1/12     7.500      375   Retail Trade
 Station Casinos, Inc.                                                      2/24/04    144a Senior Subordinated Notes               350.0         6.875   100.000     B1        B+     3/1/16     6.875      261   Hotels
 Insight Health Services Corp.                                              2/26/04    144a Senior Subordinated Notes                25.0         9.875   101.000     B3        B-    11/1/11     9.682      588   Other Services
 Invensys Plc                                                               2/27/04    144a Senior Unsecured Notes                  550.0         9.875    98.147     B3        B-    2/15/11    10.250      675   Industrial & Commercial Machinery
 Ainsworth Lumber Co Ltd                                                    2/27/04    144a Senior Notes                            210.0         6.750   100.000     B1        B+    3/15/14     6.750      272   Agriculture, Forestry and Fishing
 AMH Holdings Inc. (Associated Materials)                                   2/27/04    144a Senior Discount Notes                   446.0            -     57.907    CAA1       B-     3/1/14    11.250      726   Metals & Related Products
 Goodyear Tire & Rubber Co.                                                 2/27/04    144a Senior Secured Notes (Junior Lien)      450.0        11.000    99.413     B3        B      3/1/11    11.125      764   Rubber & Plastic Products
 Station Casinos, Inc.                                                       3/1/04    144a Senior Subordinated Notes                50.0         6.500   100.500     B1        B+     2/1/14     6.417      243   Hotels
 WH Holdings/WH Capital Corp (Herbalife)                                     3/3/04    144a Senior Notes                            275.0         9.500   100.000     B3        B      4/1/11     9.500      593   Chemicals and Allied Products
 Airgas, Inc.                                                                3/3/04    144a Senior Subordinated Notes               150.0         6.250   100.000    BA2        B+     1/0/00     6.250      216   Wholesale Trade - Nondurable Goods
 Friendly Ice Cream Corp.                                                    3/3/04    144a Senior Subordinated Notes               175.0         8.375   100.000     B2        B-    6/15/12     8.375      478   Retail Trade
 True Temper Sports, Inc.                                                    3/3/04    144a Senior Subordinated Notes               125.0         8.375   100.000     B3        B-    9/15/11     8.375      468   Miscellaneous Manufacturing
 Global Cash Access, LLC                                                     3/4/04    144a Senior Subordinated Notes               235.0         8.750   100.000    CAA1       B-    3/15/12     8.750      495   Other Services
 J.B. Poindexter & Co.                                                       3/4/04    144a Senior Notes                            125.0         8.750   100.000     B1        B-    3/15/14     8.750      473   Transportation Equipment
 The Newark Group Inc.                                                       3/5/04    144a Senior Subordinated Notes               175.0         9.750   100.000    CAA1       B-     1/0/00     9.750      591   Manufacturing - Paper & Allied Products
 Gold Kist Inc.                                                              3/5/04    144a Senior Notes                            200.0        10.250    98.470     B2        B-    3/15/14    10.500      667   Manufacturing - Food & Kindred Products
 American Rock Salt Co.                                                      3/5/04    144a Senior Secured Notes                    100.0         9.500   100.000     B3        B-    3/15/14     9.500      565   Mining
 Cellu Tissue Holdings                                                       3/5/04    144a Senior Secured Notes                    162.0         9.750    98.892     B2        B     3/15/10    10.000      697   Manufacturing - Paper & Allied Products
 Mrs. Fields Famous Brands LLC/ Mrs Fields Financing Co Inc                  3/9/04    144a Senior Secured Notes                    115.0        11.500   100.000     B3      CCC+    3/15/11    11.500       -    Manufacturing - Food & Kindred Products
 Amkor Technology Inc.                                                       3/9/04    144a Senior Notes                            250.0         7.125    99.321     B1        B     3/15/11     7.250       -    Miscellaneous Manufacturing
 Technical Olympic USA Inc.                                                 3/10/04    144a Senior Subordinated Notes               125.0         7.500   100.000     B2        B-    3/15/11     7.500      432   Construction
 Pharma Services Intermediate Holding Corp.                                 3/11/04    144a Senior Discount Notes                   219.0            -     56.943    CAA1       B      4/1/14    11.500      774   Chemicals and Allied Products
 Calpine Generating Company LLC                                             3/12/04    144a Secured Notes (3rd Lien)                150.0        11.500   100.000     NR        B-     4/1/11    11.500      828   Electric & Gas Utilities and Sanitary Services
 Team Health, Inc.                                                          3/12/04    144a Senior Subordinated Notes               180.0         9.000   100.000     B3        B-     4/1/12     9.000      558   Business Services and Software
 Omega Healthcare Investors, Inc.                                           3/15/04    144a Senior Notes                            200.0         7.000   100.000     B1       BB-     4/1/14     7.000      325   Financial Services
 Rural Cellular Corp.                                                       3/15/04    144a Senior Secured Notes                    350.0         8.250   100.000     B2        B-    3/15/12     8.250      482   Communications
 Nextel Communications, Inc.                                                3/16/04    144a Senior Notes                            500.0         5.950    97.795     B2        B+    3/15/14     6.250      249   Communications
 Sierra Pacific Resources                                                   3/16/04    144a Senior Notes                            335.0         8.625   100.000     B2        B-    3/15/14     8.625      493   Electric & Gas Utilities and Sanitary Services
 Nextel Communications, Inc.                                                3/16/04    144a Senior Notes                            500.0         5.950    97.795     B2        B+    3/15/14     6.250      249   Communications
 American Achievement Corp. (AAC)                                           3/17/04    144a Senior Subordinated Notes               150.0         8.250   100.000     B3        B-     4/1/12     8.250      487   Printing & Publishing
 Ispat Inland ULC                                                           3/18/04    144a Senior Secured Notes                    650.0         9.750    99.212    CAA1       B-     4/1/14     9.875      613   Metals & Related Products
 Interactive Health LLC                                                     3/19/04    144a Senior Notes                            100.0         7.250    80.424     B3        B-     4/1/11    11.375       -    Miscellaneous Manufacturing
 Real Mex Restaurants Inc.                                                  3/24/04    144a Senior Secured Notes                    105.0        10.000   100.000     B2        B-     4/1/10    10.000      711   Retail Trade
 Hercules, Inc.                                                             3/25/04    144a Senior Subordinated Notes               250.0         6.750   100.000    BA3        B+   10/15/29     6.750      302   Chemicals and Allied Products
 KCS Energy, Inc.                                                           3/25/04    144a Senior Notes                            175.0         7.125   100.000     B3        B-     4/1/12     7.125      370   Mining
 U.S. Concrete Inc.                                                         3/26/04    144a Senior Subordinated Notes               200.0         8.375   100.000     B3        B-     4/1/14     8.375      462   Stone, Clay, Glass & Concrete Products
 Diamond Jo LLC (FKA Peninisula Gaming Co LLC)/Old Evangeline Downs LLC     3/26/04    144a Senior Secured Notes                    230.0         8.750    98.596     B2        B-    4/15/12     9.000      528   Other Services
 Sealy Mattress Co.                                                         3/30/04    144a Senior Subordinated Notes               390.0         8.250   100.000    CAA1       B-    6/15/14     8.250      438   Manufacturing - Furniture & Fixtures
 Service Corporation International                                          3/30/04    144a Senior Notes                            250.0         6.750    99.500     B1       BB-     4/1/16     6.812      294   Personal Services




                                                                                                                                 55
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                               Issuer                           Issue Date                  Type of Security                    Face Amount    Cpn/Div      Price   Moody's   S&P    Maturity   YTM        Spread   Industry
Cablevision Systems Corp. (CSC Holdings, Inc.)                    3/30/04    144a Senior Notes (CSC Holdings, Oppco)               500.0          6.750   100.000     B1       BB-   4/15/12       6.750       -    Communications
Encore Acquisition Co.                                            3/30/04    144a Senior Subordinated Notes                        150.0          6.250   100.000      B2       B    4/15/14       6.250      236   Mining
Cablevision Systems Corp. (CSC Holdings, Inc.)                    3/30/04    144a Senior Notes (Cablevision Systems, Holdcoo)     1,000.0         8.000   100.000      B3      B+    4/15/12       8.000       -    Communications
Boyd Gaming Corp.                                                 3/31/04    144a Senior Subordinated Notes                        350.0          6.750   100.000      B1      B+    4/15/14       6.750      289   Hotels
Warner Music Group                                                 4/1/04    144a Senior Subordinated Notes                        465.0          7.375   100.000      B3      B-    4/15/14       7.375      353   Other Services
Aearo Corp.                                                        4/1/04    144a Senior Subordinated Notes                        175.0          8.250   100.000      B3      B-    4/15/12       8.250      473   Miscellaneous Manufacturing
EXCO Resources                                                     4/1/04    144a Senior Notes                                     100.0          7.250   103.250      B2       B    1/15/11       6.644      334   Electric & Gas Utilities and Sanitary Services
Consolidated Communications Texas Holdings/ Illinois Holdings      4/2/04    144a Senior Notes                                     200.0          9.750   100.000      B3      B-     4/1/14       9.750      594   Communications
Port Townsend Paper Corp.                                          4/2/04    144a Senior Secured Notes                             125.0         11.000    95.348      B3       B    4/15/11      12.000      836   Manufacturing - Paper & Allied Products
NTL Cable Plc (NTL Communications Corp.)                           4/2/04    144a Senior Notes                                     425.0          8.750   100.000      B3      B-     1/0/00       8.750       -    Communications
OAO Severstal                                                      4/6/04    144a Senior Unsecured Notes                           375.0          9.250   100.000      B2      B+    4/19/14       9.250      507   Agriculture, Forestry and Fishing
Vicorp Restaurants, Inc.                                           4/6/04    144a Senior Notes                                     126.5         10.500    98.791      B3       B    4/15/11      10.750      469   Retail Trade
Allied Waste North America Inc.                                    4/7/04    Senior Unsecured Notes                                400.0          7.375   100.000      B2      B+    4/15/14       7.375      321   Electric & Gas Utilities and Sanitary Services
MemberWorks Inc.                                                   4/7/04    144a Senior Notes                                     150.0          9.250    98.418      B2       B     4/1/14       9.500      534   Other Services
VWR International                                                  4/7/04    144a Senior Notes                                     200.0          6.875   100.000      B2       B    4/15/12       6.875      310   Measuring, Photographic, Optical Goods
VWR International                                                  4/7/04    144a Senior Subordinated Notes                        320.0          8.000   100.000      B3      B-    4/15/14       8.000      384   Measuring, Photographic, Optical Goods
Delco Remy International, Inc.                                    4/8/04     144a Senior Subordinated Notes                        150.0          9.375   100.000     B3      CCC+   4/15/12       9.375      548   Industrial & Commercial Machinery
Mueller Group Inc.                                                4/8/04     144a Senior Subordinated Notes                        315.0         10.000   100.000    CAA1      B-     5/1/12      10.000      603   Metals & Related Products
Superior Essex Communications LLC/ Essex Group Inc.                4/8/04    144a Senior Notes                                     275.0          9.000    91.240      B3       B    4/15/12       9.500      562   Wholesale Trade - Durable Goods
Primus International Inc.                                         4/13/04    144a Senior Secured Notes (2nd Lien)                   65.0         10.500   100.000      B2      B+    4/15/09      10.500      712   Communications
Extendicare Health Services, Inc.                                 4/15/04    144a Senior Subordinated Notes                        125.0          6.875    97.500      B2      B-     5/1/14       7.229      285   Other Services
Midwest Finance Corp. (Midwest Generation LLC)                    4/15/04    144a Senior Secured Notes (2nd Priority)             1,000.0         8.750   100.000      B1      B-     5/1/34       8.750      440   Electric & Gas Utilities and Sanitary Services
Atlantic Express Transportation Corp.                             4/16/04    144a Senior Secured Notes                             105.0         12.000   100.000      B3       B    4/15/08      12.000      908   Transportation Services
Charter Communications Operating LLC/ Capital Corp.               4/20/04    144a Senior Secured Notes (2nd Lien)                  400.0          8.375   100.000      B2      B-    4/30/14       8.375      399   Communications
Charter Communications Operating LLC/ Capital Corp.               4/20/04    144a Senior Secured Notes (2nd Lien)                 1,100.0         8.000   100.000      B2      B-    4/30/12       8.000      387   Communications
Curative Health Services Inc.                                     4/20/04    144a Senior Notes                                     185.0         10.750   100.000      B3      B-     5/1/11      10.750      661   Other Services
CHC Helicopter Corp                                               4/21/04    144a Senior Notes                                     250.0          7.375    99.455      B2       B     5/1/14       7.453      300   Transportation
AmeriGas Partners LP/ AP Eagle Finance Corp.                      4/22/04    Senior Unsecured Notes                                 28.0          8.875   109.375     B2       BB-   5/20/11       7.150      381   Retail Trade
iPCS Escrow / iPCS Inc.                                           4/22/04    144a Senior Secured Notes                             165.0         11.500   100.000      B3     CCC     5/1/12      11.500      737   Communications
Inmarsat Finance Plc                                              4/23/04    144a Senior Notes                                     102.5          7.625   102.500      B2       B    6/30/12       7.151      324   Communications
INVISTA / Arteva Specialties Sarl (Luxembourg)                    4/23/04    144a Senior Unsecured Notes                           675.0          9.250   100.000      B1      B+     5/1/12       9.250      505   Chemicals and Allied Products
Waste Services Inc.                                               4/26/04    144a Senior Subordinated Notes                        160.0          9.500   100.000    CAA1      B-    4/15/14       9.500      507   Electric & Gas Utilities and Sanitary Services
Amscan Holdings                                                   4/27/04    144a Senior Subordinated Notes                        175.0          8.750   100.000      B3      B-     5/1/14       8.750      431   Miscellaneous Manufacturing
Emmis Operating Co.                                               4/27/04    144a Senior Subordinated Notes                        375.0          6.875   100.000      B2      B-    5/15/12       6.875      271   Communications
Giant Industries, Inc.                                            4/28/04    Senior Subordinated Notes                             150.0          8.000    99.311      B3      NR    5/15/14       8.250      384   Mining
Sea Containers, Ltd.                                              4/28/04    Senior Notes                                          103.0         10.500    97.369      B3       B    5/15/14      11.000      677   Transportation
Seneca Gaming Corp.                                               4/29/04    144a Senior Notes                                     300.0          7.250   100.000     B2       BB-    5/1/12       7.250      287   Hotels
Triad Hospitals Inc                                               4/29/04    Senior Notes                                          600.0          7.000   100.000      B2      B+    5/15/12       7.000      270   Other Services
Valmont Industries Inc.                                           4/29/04    144a Senior Subordinated Notes                        150.0          6.875   100.000     BA3      B+     5/1/14       6.875      240   Industrial & Commercial Machinery
Wise Metals Group LLC / Wise Alloys Finance Corp.                 4/30/04    144a Senior Secured Notes                             150.0         10.250   100.000      B2       B    5/15/12      10.250      608   Metals & Related Products
Itron Inc                                                         5/5/04     144a Senior Subordinated Notes                        125.0          7.750    99.265      B2       B    5/15/12       7.875      350   Electric & Gas Utilities and Sanitary Services
Whiting Petroleum Corp.                                            5/5/04    144a Senior Subordinated Notes                        150.0          7.250    99.260      B2      B-     5/1/12       7.375      296   Mining
Polypore Inc.                                                      5/6/04    144a Senior Subordinated Notes                        225.0          8.750   100.000    CAA1      B-    5/15/12       8.750      440   Chemicals and Allied Products
J.B. Poindexter & Co.                                              5/7/04    144a Senior Notes                                      30.0          8.750   100.000      B1      B-    3/15/14       8.750      415   Transportation Equipment
Ainsworth Lumber Co Ltd                                           5/11/04    144a Senior Notes                                     110.0          6.750    90.043      B1      B+    3/15/14       8.250      348   Agriculture, Forestry and Fishing
Buffets Holdings Inc.                                             5/11/04    144a Senior Discount Notes                            132.0             -     56.926    CAA1       B    12/15/10     13.875      965   Retail Trade
Consolidated Container Company LLC                                5/11/04    144a Senior Secured Discount Notes (2nd Lien)         207.0             -     72.513      B3       B    6/15/09      10.750      662   Rubber & Plastic Products
Lazydays R.V. Center Inc.                                         5/12/04    144a Senior Notes                                     155.0         11.750    98.735      B3      B-    5/15/12      12.000      739   Transportation Equipment
Alpha Natural Resources                                           5/13/04    144a Senior Notes                                     175.0         10.000   100.000      B3     CCC+    6/1/12      10.000      533   Electric & Gas Utilities and Sanitary Services
Da-Lite Screen Company, Inc.                                      5/13/04    144a Senior Notes                                     160.0          9.500   100.000      B2      B-    5/15/11       9.500       -    Miscellaneous Manufacturing
Gundle / SLT Environmental Inc.                                   5/13/04    144a Senior Notes                                     150.0         11.000   100.000    CAA1      B-    5/15/12      11.000      632   Electric & Gas Utilities and Sanitary Services
Nextel Partners, Inc.                                             5/14/04    144a Senior Notes                                      25.0          8.125    98.260    CAA1      B-     7/1/11       8.458      394   Communications
Sheridan Group Inc.                                               5/19/04    144a Senior Secured Notes                              60.0         10.250   102.000      B1       B    8/15/11       9.745       -    Printing & Publishing




                                                                                                                                          56
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                              Issuer                        Issue Date                  Type of Security        Face Amount        Cpn/Div     Price    Moody's   S&P    Maturity   YTM        Spread   Industry
UGS Corp. / UGS PLM Solutions Inc.                            5/19/04    144a Senior Subordinated Notes            550.0             10.000   100.000     B3        B-    6/1/12      10.000      547   Industrial & Commercial Machinery
Leiner Health Products Group, Inc.                            5/24/04    144a Senior Subordinated Notes            150.0             11.000   100.000     B3      CCC+    6/1/12      11.000      640   Chemicals and Allied Products
Concentra Operating Corp.                                     5/25/04    144a Senior Subordinated Notes            155.0              9.125   98.613      B3       B-     6/1/12       9.375      482   Other Services
Hanover Compressor Co.                                        5/25/04    Senior Notes                              200.0              9.000   100.000      B3       B     6/1/14       9.000      427   Business Services and Software
Samsonite Corporation                                         5/25/04    144a Senior Subordinated Notes            205.0              8.875   100.000      B3       B-    6/1/11       8.875      448   Miscellaneous Manufacturing
Autocam Corporation                                           5/26/04    144a Senior Subordinated Notes            140.0             10.875   97.777      B3       B-    6/15/14      11.250      656   Metals & Related Products
Aztar Corp.                                                   5/26/04    144a Senior Subordinated Notes            300.0              7.825   100.000     BA3      B+    6/15/14       7.825      318   Other Services
Finlay Fine Jewelry Corp.                                     5/27/04    144a Senior Notes                         200.0              8.375   100.000      B1      B+     6/1/12       8.375      392   Retail Trade
Herbst Gaming, Inc.                                           5/27/04    144a Senior Subordinated Notes            160.0              8.125   99.284      B3       B-     6/1/12       8.250      380   Hotels
MAAX Corp.                                                    5/27/04    144a Senior Subordinated Notes            150.0              9.750   100.000     B3        B-   6/15/12       9.750      529   Manufacturing - Furniture & Fixtures
Terphane Holding Corp.                                        5/27/04    144a Senior Secured Notes                  46.5             12.500   94.719      B3      CCC+   6/15/09     14.000        -    Manufacturing - Textiles
Appleton Papers Inc.                                           6/3/04    144a Senior Notes                         185.0              8.125   100.000      B2      BB-   6/15/11       8.125      373   Manufacturing - Paper & Allied Products
Appleton Papers Inc.                                           6/3/04    144a Senior Subordinated Notes            150.0              9.750   100.000     B3       B+    6/15/14       9.750      501   Manufacturing - Paper & Allied Products
BCP Caylux Holdings Luxembourg S.C.A. (Celanese AG)            6/3/04    144a Senior Subordinated Notes           1,000.0             9.625   100.000     B2        B-   6/15/14       9.625      492   Chemicals and Allied Products
Ferrellgas Partners, L.P.                                      6/4/04    144a Senior Notes                          50.0              8.750   103.250      B2       B    6/15/12       8.057      384   Retail Trade
Cadmus Communications Corp.                                    6/9/04    144a Senior Subordinated Notes            125.0              8.375   100.000      B2       B    6/15/14       8.375      357   Printing & Publishing
OJSC Vimpel Communications (VimpelCom)                         6/9/04    144a Notes                                250.0             10.000   100.000     B1       BB-   6/16/09      10.000      601   Communications
Stater Brothers Holdings Inc.                                  6/9/04    144a Senior Notes                         525.0              8.125   99.500      B1       BB-   6/15/12       8.211      356   Retail Trade
Swift Energy Co.                                               6/9/04    Senior Notes                              150.0              7.625   100.000      B1      BB-   7/15/11       7.625      314   Mining
Celestica Inc.                                                6/10/04    Senior Subordinated Notes                 500.0              7.875   100.000     BA3      B+     7/1/11       7.875      347   Business Services and Software
IASIS Healthcare LLC/Capital Corp.                            6/10/04    144a Senior Subordinated Notes            475.0              8.750   100.000     B3        B-   6/15/14       8.750      393   Other Services
Huntsman LLC                                                  6/15/04    144a Senior Notes                         300.0             11.500   100.000     B3      CCC+   7/15/12      11.500      699   Rubber & Plastic Products
Tenet Healthcare Corp.                                        6/15/04    144a Senior Notes                        1,000.0             9.875   97.674      B3       B-     7/1/14      10.250      556   Other Services
ADESA Inc.                                                    6/16/04    Senior Subordinated Notes                 125.0              7.625   100.000     B1       B+    6/15/12       7.625      308   Retail Trade
Argo-Tech Corporation                                         6/17/04    144a Senior Notes                         250.0              9.250   100.000      B3       B     7/1/11       9.250       -    Industrial & Commercial Machinery
Clean Harbors Inc.                                            6/17/04    144a Senior Secured Notes                 150.0             11.250   98.697     CAA1       B    7/15/12      11.500      693   Electric & Gas Utilities and Sanitary Services
Cornell Cos                                                   6/17/04    144a Senior Notes                         112.0             10.750   98.685      B3       B-     7/1/12      11.000      646   Other Services
Viskase Cos Inc.                                              6/17/04    144a Senior Secured Notes                  90.0             11.500   100.000     B2        B-   6/15/11      11.500       -    Rubber & Plastic Products
Beverly Enterprises, Inc.                                     6/18/04    144a Senior Subordinated Notes            215.0              7.875   98.318      B2        B    6/15/14       8.125      343   Other Services
Range Resources Corp.                                         6/22/04    144a Senior Subordinated Notes            100.0              7.375   98.125      B3        B    7/15/13       7.667      300   Mining
Medical Device Manufacturing Inc. (UTI)                       6/23/04    144a Senior Subordinated Notes            175.0             10.000   100.000    CAA1       B-   7/15/12      10.000      548   Measuring, Photographic, Optical Goods
Kabel Deutschland GmbH (KDG)                                  6/24/04    144a Senior Notes                         610.0             10.625   100.000     B3       NR     7/1/14      10.625      600   Communications
Paramount Resources Inc.                                      6/24/04    Senior Notes                              125.0              8.875   100.000     B2        B    7/15/14       8.875      423   Mining
Pierre Foods Inc.                                             6/24/04    144a Senior Subordinated Notes            125.0              9.875   100.000     B3        B    7/15/12       9.875      540   Manufacturing - Food & Kindred Products
The Wornick Co.                                               6/24/04    Senior Secured Notes                      125.0             10.875   100.000     B2       B+    7/15/11      10.875      657   Manufacturing - Food & Kindred Products
BCP Caylux Holdings Luxembourg S.C.A. (Celanese AG)           6/28/04    144a Senior Subordinated Notes            225.0              9.625   103.375     B3        B-   6/15/14       9.019      447   Chemicals and Allied Products
Buhrmann US Inc.                                              6/28/04    144a Senior Subordinated Notes            150.0              8.250   99.164      B2        B    7/1/14        8.375      367   Wholesale Trade - Durable Goods
Seitel Inc.                                                   6/28/04    144a Senior Notes                         193.0             11.750   97.675      B3       B-    7/15/11      12.250      787   Mining
MedCath Holdings Corp.                                        6/29/04    144a Senior Notes                         150.0              9.875   100.000    CAA1       B-   7/15/12       9.875      534   Other Services
Speedway Motorsports Inc.                                     6/29/04    144a Senior Subordinated Notes            100.0              6.750   100.000     BA2      B+     6/1/13       6.748      252   Other Services
Horizon Lines LLC / Horizon Lines Holding Corp.               6/30/04    144a Senior Notes                         250.0              9.000   100.000     B3        B-   11/1/12       9.000      456   Transportation
Allied Security                                                7/1/04    144a Senior Subordinated Notes            180.0             11.375   98.823     CAA1       B-   7/15/11      11.625      737   Business Services and Software
Belden & Blake Corp.                                           7/1/04    144a Senior Secured Notes (2nd Lien)      192.5              8.750   100.000     B3        B-   7/15/12       8.750      431   Mining
Horizon PCS Escrow Co.                                         7/8/04    144a Senior Notes                         125.0             11.375   100.000     B3      CCC    7/15/12      11.375      709   Communications
Star Gas Partners, L.P.                                        7/8/04    144a Senior Notes                          30.0             10.250   106.250     B3        B-   2/12/13       8.970      505   Retail Trade
NCL Corporation Ltd.                                           7/9/04    144a Senior Notes                         250.0             10.625   100.000     B2       B+    7/15/14      10.625      616   Transportation
Intertape Polymer US Inc.                                     7/14/04    144a Senior Subordinated Notes            125.0              8.500   100.000      B3       B-    8/1/14       8.500      401   Manufacturing - Paper & Allied Products
Vitro Envases Norteamerica SA (VENA / Vitro S.A. de C.V.)     7/16/04    144a Senior Secured Notes                 170.0             10.750   95.316      B2       B-    7/23/11      11.750      772   Stone, Clay, Glass & Concrete Products
The Jean Coutu Group Inc.                                     7/20/04    144a Senior Subordinated Notes            850.0              8.500   100.000     B3        B     8/1/14       8.500      411   Retail Trade
The Jean Coutu Group Inc.                                     7/20/04    144a Senior Subordinated Notes            350.0              7.625   100.000     B2        B     8/1/12       7.625      343   Retail Trade
Building Materials Corp. of America                           7/21/04    144a Senior Secured Notes (2nd Lien)      200.0              7.750   100.000      B2      B+     8/1/14       7.750      327   Wholesale Trade - Durable Goods
Foundation PA Coal Company                                    7/21/04    144a Senior Notes                         300.0              7.250   100.000     B1        B     8/1/14       7.250      276   Mining
Loews Cineplex Entertainment Corp.                            7/22/04    144a Senior Subordinated Notes            315.0              9.000   100.000      B3     CCC+    8/1/14       9.000      454   Other Services




                                                                                                                              57
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Recent Single B Rated Issues Since September 30, 2003 (Cont’d)
                                              Issuer                                 Issue Date                  Type of Security              Face Amount     Cpn/Div      Price   Moody's   S&P    Maturity   YTM        Spread   Industry
  Duane Reade, Inc.                                                                    7/23/04    144a Senior Subordinated Notes                  195.0           9.750   100.000     B3      CCC+     8/1/11      9.750      563   Retail Trade
  PanAmSat Corp.                                                                       7/30/04    144a Senior Notes                              1,010.0          9.000   100.000     B1        B+    8/15/14      9.000      451   Communications
  Stanadyne Corp.                                                                       8/2/04    144a Senior Subordinated Notes                  160.0          10.000   100.000    CAA1       B     8/15/14     10.000      555   Transportation Equipment
  Crompton Corp.                                                                        8/3/04    144a Senior Notes                               375.0           9.875    99.333     B1        B      8/1/12    10.000       576   Chemicals and Allied Products
  Innophos Inc.                                                                         8/3/04    144a Senior Subordinated Notes                  190.0           8.875   100.000     B3        B-    8/15/14      8.875      446   Chemicals and Allied Products
  United Refining Co.                                                                   8/3/04    144a Senior Notes                               200.0          10.500    98.671     B3        B-    8/15/12     10.750      651   Electric & Gas Utilities and Sanitary Services
  Blount, Inc.                                                                          8/4/04    Senior Subordinated Notes                       175.0           8.875   100.000    CAA1       B-    8/1/12       8.875      464   Industrial & Commercial Machinery
  Borden U.S. Finance Corp / Borden Nova Scotia Finance ULC (Borden Chemical Inc.)      8/4/04    Senior Secured Notes (2nd Priority)             325.0           9.000   100.000     B3        B-    7/15/14      9.000      458   Chemicals and Allied Products
  US Oncology Inc.                                                                      8/4/04    144a Senior Notes                               300.0           9.000   100.000     B2        B-    8/15/12      9.000      478   Other Services
  US Oncology Inc.                                                                      8/4/04    144a Senior Subordinated Notes                  275.0          10.750   100.000     B3        B-    8/15/14     10.750      634   Other Services
  Alderwoods Group Inc.                                                                 8/5/04    144a Senior Notes                               200.0           7.750   100.000     B2        B     9/15/12      7.750      355   Personal Services
  Sheffield Steel Corp.                                                                 8/5/04    144a Senior Secured Notes                       80.0           11.375   100.000     B3        B-    8/15/11     11.375      733   Metals & Related Products
  Xerox Corp.                                                                           8/5/04    Senior Notes                                    500.0           6.875   100.000     B1        B+    8/15/11      6.875      284   Industrial & Commercial Machinery
  AMC Entertainment, Inc. / Marquee Inc. (Opco)                                         8/6/04    144a Senior Notes                               250.0           8.625   100.000     B2        B-    8/15/12      8.625      459   Other Services
  Century Aluminum Co.                                                                 8/10/04    144a Senior Notes                               250.0           7.500   100.000     B1       BB-    8/15/14      7.500      326   Mining
  Collins & Aikman Products Co.                                                        8/12/04    144a Senior Subordinated Notes                  415.0          12.875    96.416     B3        B-    8/24/12     13.625      953   Industrial & Commercial Machinery
  Norcraft Holdings LP / Norcraft Capital Corp                                         8/12/04    144a Senior Discount Notes                      118.0              -     68.080    CAA1       B-    9/1/12       9.750      569   Wholesale Trade - Durable Goods
  THL Buildco Inc. / Nortek Inc.                                                       8/12/04    144a Senior Subordinated Notes                  625.0           8.500   100.000     B3        B-    9/12/14      8.500      425   Metals & Related Products
  Blockbuster Inc.                                                                     8/13/04    144a Senior Subordinated Notes                  300.0           9.000   100.000     B1        B+     9/1/12      9.000      498   Retail Trade
  Rainbow National Services LLC / RNS Co-Issuer Corp.                                  8/13/04    144a Senior Notes                               300.0           8.750    99.279     B3      CCC+     9/1/12      8.875      486   Communications
  Solectron Corp.                                                                      8/16/04    Subordinated Notes                              64.3            7.970   101.980     B2       BB+   11/15/06      7.007      444   Electronic Equipment
  Standard Aero Holdings                                                               8/17/04    144a Senior Subordinated Notes                  200.0           8.250   100.000    CAA1       B-    9/1/14       8.250      403   Transportation Equipment
  Ply Gem Industries Inc                                                               8/18/04    144a Senior Subordinated Notes                  135.0           9.000   100.250     B3        B-    2/15/12      8.940      493   Metals & Related Products
  Securus Technologies Inc.                                                            8/18/04    144a Senior Secured Notes (2nd Lien)            154.0          11.000    97.651     B2        B+     9/1/11     11.500      787   Business Services and Software
  MQ Associates Inc (MedQuest Holdco)                                                  8/19/04    144a Senior Discount Notes                      136.0              -    62.337     CAA1       B-    8/15/12    12.250       823   Other Services
  Ainsworth Lumber Co Ltd                                                              9/17/04    144a Senior Notes                               275.0           7.250   100.000     B2        B+    10/1/12      7.250      345   Agriculture, Forestry and Fishing
  M-Foods Holdings Inc. (Michael Foods)                                                9/17/04    144a Senior Discount Notes                      154.1              -    64.910     CAA1       B-    10/1/13      9.750      515   Manufacturing - Food & Kindred Products
  Xerox Corp.                                                                          9/20/04    Senior Notes                                    250.0           6.875   104.250    BA2        B+    8/15/11      6.108      246   Industrial & Commercial Machinery
  Chiquita Brands International, Inc.                                                  9/21/04    144a Senior Notes                               250.0           7.500   100.000     B2        B-    11/1/14      7.500      346   Wholesale Trade - Nondurable Goods
  Coleman Cable Inc.                                                                   9/21/04    144a Senior Notes                               120.0           9.875   100.000     B3        B-    10/1/12      9.875      605   Metals & Related Products
  Crystal US Holdings 3 LLC (Celanese AG)                                              9/21/04    Senior Discount Notes (Series A)                163.0              -    61.275     CAA2       B-    10/1/14     10.000      592   Chemicals and Allied Products
  Crystal US Holdings 3 LLC (Celanese AG)                                              9/21/04    Senior Discount Notes (Series B)                690.0              -    59.829     CAA2       B-    10/1/14     10.500      642   Chemicals and Allied Products
  Frontier Oil Corp.                                                                   9/21/04    144a Senior Notes                               150.0           6.625   100.000     B2        B+    10/1/11      6.625      294   Petroleum Refining
  Chiquita Brands International, Inc.                                                  9/21/04    144a Senior Notes                               250.0           7.500   100.000     B2        B-    11/1/14      7.500      346   Wholesale Trade - Nondurable Goods
  Coleman Cable Inc.                                                                   9/21/04    144a Senior Notes                               120.0           9.875   100.000     B3        B-    10/1/12      9.875      605   Metals & Related Products
  Crystal US Holdings 3 LLC (Celanese AG)                                              9/21/04    Senior Discount Notes (Series A)                163.0              -    61.275     CAA2       B-    10/1/14     10.000      592   Chemicals and Allied Products
  Crystal US Holdings 3 LLC (Celanese AG)                                              9/21/04    Senior Discount Notes (Series B)                690.0              -    59.829     CAA2       B-    10/1/14     10.500      642   Chemicals and Allied Products
  Jostens Intermediate Holding (IH) Corp.                                              9/23/04    144a Senior Subordinated Notes                  500.0           7.625   100.000     B3        B-    10/1/12      7.625      384   Miscellaneous Manufacturing
  Riddell Bell Holdings Inc. (Riddell Sports, Inc.)                                    9/23/04    144a Senior Subordinated Notes                  140.0           8.375   100.000     B3        B-    10/1/12      8.375      460   Miscellaneous Manufacturing
  PanAmSat Holding Corp. (Holdco)                                                      9/27/04    144a Senior Discount Notes                      416.0              -    59.460     CAA1      B+    11/15/14    10.500       651   Communications
  Calpine Corp.                                                                        9/28/04    144a Senior Secured Notes (1st Priority)        785.0           9.625    99.212     NR        B+    10/1/14      9.750      573   Electric & Gas Utilities and Sanitary Services
  Loehmann Capital Corp.                                                               9/30/04    144a Senior Secured Notes                       55.0           12.000   100.000     B2      CCC+    10/1/11     12.000       -    Retail Trade


                                                                                                                                             Mean                 8.204                                            8.844
                                                                                                                                             Median               8.500                                            8.750
                                                                                                                                             Trimmed Mean(2)      8.453                                            8.791
  (1) Includes single B rated notes issued on or after September 30, 2003.
  (2) Trimmed Mean excludes top and bottom 10% of the range.




                                                                                                                                                58
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Holding Company Trading Spread Analysis
($ in Millions)

                                                                                                                               Most Recent (9/30/2004)       YTW Spread    YTM Spread
                    Level                     Issuer                                    Issue                  Principal   Price       YTW           YTM       to Opco       to Opco

                  OpCo      Advanced Accessory Systems LLC         10.750% Sr. Notes due 2011                     $150.0     94.00      12.07%      12.07%
                  HoldCo    Advanced Accessory Holdings, Inc.      13.250% Sr. Discount Notes due 2011             $88.0     40.00      20.50%      20.50%        843 bp        843 bp


                  OpCo      AMC Entertainment Inc.                 9.500% Sr. Sub. Notes due 2011                 $297.9    102.75      8.170%      8.920%
                            AMC Entertainment Inc.                 9.875% Sr. Sub. Notes due 2012                 $175.0    103.50      9.030%      9.200%
                            AMC Entertainment Inc.                 8.625% Sr. Notes due 2012                      $250.0    106.00      7.346%      7.596%
                            AMC Entertainment Inc.                 8.000% Sr. Notes due 2014                      $300.0     94.00      8.954%      8.954%
                  HoldCo    Marquee Holdings                       12.000% Sr. Discount Notes due 2014            $170.0     59.25     11.368%     11.461%        402 bp        386 bp


                  OpCo      Associated Material Inc.               9.750% Sr. Sub. Notes 2012                     $165.0    114.75      5.287%      7.182%
                  HoldCo    AMH Holdings                           11.250% Sr. Discount Notes due 2014            $446.0     72.75      8.617%      9.178%        333 bp        200 bp


                  OpCo      CSC Holdings, Inc.                     7.250% Sr. Notes due 2008                     $500.0     104.00      6.050%      6.050%
                            CSC Holdings, Inc.                     8.125% Sr. Notes due 2009                     $500.0     106.25      6.580%      6.580%
                            CSC Holdings, Inc.                     8.125% Sr. Debentures due 2009                $400.0     106.25      6.600%      6.600%
                            CSC Holdings, Inc.                     7.625% Sr. Notes due 2011                    $1,000.0    105.38      6.600%      6.600%
                            CSC Holdings, Inc.                     6.750% Sr. Notes due 2012                     $500.0     100.25      6.710%      6.710%
                            CSC Holdings, Inc.                     10.500% Sr. Sub. Debentures due 2016           $250.0    113.50      4.890%      8.630%
                            CSC Holdings, Inc.                     7.875% Sr. Debentures due 2018                $300.0     103.25      7.480%      7.480%
                            CSC Holdings, Inc.                     7.625% Sr. Debentures due 2018                $500.0     102.00      7.390%      7.390%
                  Holdco    Cablevision System Corp.               7.875% Sr. Notes due 2007                     $500.0     106.13      5.750%      5.750%
                            Cablevision System Corp.               8.000% Sr. Notes due 2012                    $1,000.0    104.50      7.210%      7.210%        232 bp        116 bp


                  OpCo      Compass Minerals                       10.000% Sr. Sub. Notes due 2011                $325.0    112.00       5.72%       7.71%
                  HoldCo    Salt Holding Corp                      12.750% Sr. Discount Notes due 2012            $120.0     84.00       7.50%       9.52%
                            Compass Minerals International, Inc.   12.000% Sr. Sub. Discount Notes due 2013       $179.6     79.00       8.21%       9.36%        249 bp        180 bp


                  OpCo      Dex Media East                         9.875% Sr. Notes due 2009                      $450.0    115.00       4.62%       6.39%
                            Dex Media West                         8.500% Sr. Notes due 2010                      $385.0    113.50       4.81%       5.76%
                            Dex Media East                         12.125% Sr. Sub. Notes due 2012                $525.0    124.50       5.32%       7.97%
                            Dex Media West                         9.875% Sr. Sub. Notes due 2013                 $780.0    117.50       5.91%       7.17%
                  HoldCo    Dex Media, Inc.                        8.000% Sr. Notes due 2013                      $500.0    105.00       7.09%       7.24%
                                                                   9.000% Sr. Discount Notes due 2013             $361.0     73.25       8.21%       8.35%        359 bp        259 bp




                                                                                                          59
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Holding Company Trading Spread Analysis (Cont’d)
($ in Millions)

                                                                                                                           Most Recent (9/30/2004)       YTW Spread    YTM Spread
                    Level                     Issuer                                Issue                  Principal   Price       YTW           YTM       to Opco       to Opco

                  OpCo      El Pollo Loco                     9.250% Sr. Secured Notes due 2009               $110.0    103.00      8.383%      8.519%
                  HoldCo    EPL Intermediate, Inc.            12.550% Sr. Discount Notes due 2010              $70.0     59.50     11.991%     12.082%        361 bp        356 bp


                  OpCo      Haights Cross Operating Co.       11.750% Sr. Discount Notes 2011                 $140.0    110.00      9.485%      9.717%
                  HoldCo    Haights Cross Communications      12.500% Sr. Discount Notes 2011                 $135.0     61.00     11.782%     11.918%        230 bp        220 bp


                  OpCo      Johnson Diversey, Inc.            9.625% Sr. Sub. Notes due 2012                 $300.0     112.00       6.30%       7.53%
                            Johnson Diversey, Inc.            9.625% Sr. Sub. Notes due 2012 (Euro)        Eur 225.0
                  HoldCo    Johnson Diversey Holdings, Inc.   10.670% Sr. Discount Notes due 2013             $406.3     82.50       9.07%       9.50%        277 bp        197 bp


                  OpCo      Language Line                     11.125% Sr. Sub. Notes Due 2012                 $165.0    102.50     10.523%     10.635%
                  HoldCo    Language Line Holdings            14.125% Sr. Discount Notes Due 2013              $55.0     53.50     13.893%     13.893%        337 bp        326 bp


                  OpCo      LBI Media, Inc.                   10.125% Sr. Sub. Notes due 2012                 $150.0    112.00       6.98%       8.02%
                  HoldCo    LBI Media Holdings, Inc.          11.000% Sr. Discount Notes due 2013              $68.4     72.13       9.33%       9.61%        235 bp        159 bp


                  OpCo      Liberty Group Operating, Inc.     9.375% Sr. Notes due 2008                       $180.0    100.75       8.75%       9.10%
                  HoldCo    Liberty Group Publishing, Inc.    11.625% Sr. Discount Notes due 2009              $89.0     99.00      11.92%      11.92%        317 bp        281 bp


                  OpCo      Medquest                          11.875% Sr. Sub. Notes 2012                     $180.0    114.00      8.177%      9.322%
                  HoldCo    MQ Associates                     12.250% Sr. Discount Notes due 2012              $87.8     84.80     12.270%     12.270%        409 bp        295 bp


                  OpCo      Merisant Company                  9.500% Sr. Sub. Notes due 2013                  $225.0     95.00      10.38%      10.38%
                  HoldCo    Tabletop Holdings, Inc.           12.250% Sr. Sub. Discount Notes due 2014        $136.0     52.00      13.55%      13.55%        318 bp        318 bp


                  OpCo      Mueller Group, Inc                10.000% Sr. Sub. Notes due 2012                 $315.0    108.00      8.184%      8.543%
                  HoldCo    The Mueller Group, Inc.           14.750% Sr. Discount Notes due 2014             $223.0     64.25     11.612%     12.121%        343 bp        358 bp




                                                                                                      60
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Holding Company Trading Spread Analysis (Cont’d)
($ in Millions)

                                                                                                                           Most Recent (9/30/2004)       YTW Spread    YTM Spread
                    Level                   Issuer                                      Issue              Principal   Price       YTW           YTM       to Opco       to Opco

                  OpCo      Nalco Co                              7.750% Sr. Notes 2011                       $665.0    106.00      6.357%      6.676%
                            Nalco Co                              7.750% Euro Sr. Sub. Notes 2011             $200.0
                            Nalco Co                              8.875% Sr. Notes 2013                       $465.0    107.50      7.495%      7.713%
                            Nalco Co                              9.000% Euro Sr. Sub. Notes 2013             $200.0
                  HoldCo    Nalco Finance Holdings                9.000% Sr. Discount Notes due 2014          $694.0     71.00      8.418%      8.517%        206 bp        184 bp


                  OpCo      Nebraska Book Co.                     8.625% Sr. Sub. Due 2012                    $175.0     99.50      8.716%      8.716%
                  HoldCo    NBC Acquisition Corp.                 11.000% Sr. Discount Notes due 2013          $77.0     68.00     11.218%     11.218%        250 bp        250 bp


                  OpCo      Nexstar Finance LLC                   12.000% Sr. Sub. Notes due 2008             $160.0    110.00       3.68%       8.63%
                            Nexstar Finance LLC                   7.000% Sr. Sub. Notes due 2014              $125.0     98.50       7.22%       7.22%
                  HoldCo    Nexstar Finance Holdings LLC          11.375% Sr. Discount Notes due 2013          $74.7     76.63       9.29%       9.67%        561 bp        245 bp


                  OpCo      Norcraft Companies LP                 9.000% Sr. Sub. Notes due 2011              $150.0    109.00      6.871%      7.346%
                  HoldCo    Norcraft Holdings LP                  9.875 Sr. Discount Notes due 2014            $80.3     72.50      8.818%      9.014%        195 bp        167 bp




                  OpCo      North Atlantic Trading Company        9.250% Sr. Notes due 2012                   $200.0     96.00     10.024%     10.024%
                  HoldCo    North Atlantic Holding Company        12.250% Sr. Discount Notes due 2014          $97.0     51.00     15.925%     15.925%        590 bp        590 bp


                  OpCo      PanAmSat Corp                         6.375% Notes due 2008                       $150.0    101.50      5.860%      5.860%
                            PanAmSat Corp                         8.500% Sr. Notes due 2012                     $8.0    116.00      3.110%      5.790%
                            PanAmSat Corp                         6.875% Debentures due 2028                  $125.0     84.50      8.400%      8.400%
                            PanAmSat Corp                         9.000% Sr. Notes due 2014                 $1,010.0    104.00      8.295%      8.394%
                  HoldCo    PanAmSat Holding                      10.375% Sr. Discount Notes due 2014         $416.0     58.38     10.716%     10.716%        761 bp        493 bp


                  OpCo      Pharma Services Acquisition Corp.     10.000% Sr. Sub. Notes Due 2013             $450.0    106.00      8.833%      9.013%
                  HoldCo    Pharma Services Intermediate Holdings 11.500% Sr. Discount Notes due 2014         $219.0     63.00     10.886%     10.982%        205 bp        197 bp




                                                                                                      61
RESTRUCTURED DEBT DISCOUNT ANALYSIS
Holding Company Trading Spread Analysis (Cont’d)
($ in Millions)

                                                                                                                            Most Recent (9/30/2004)           YTW Spread    YTM Spread
                    Level                      Issuer                                      Issue            Principal   Price       YTW           YTM           to Opco       to Opco

                  OpCo       Smurfit Capital                        6.750% Sr. Notes due 2005                  $250.0    103.00        4.02%          4.02%
                             Smurfit Capital                        7.500% Sr. Notes due 2025                  $350.0     99.50        7.55%          7.55%
                  HoldCo     MDP Acquisitions PLC                   9.625% Sr. Notes due 2012                  $750.0    113.00        6.29%          7.44%
                             MDP Acquisitions PLC                   15.500% Sub. PIK Notes due 2013            $161.8    116.00       12.51%         12.51%        849 bp        849 bp

                  OpCo       Town Sports International, Inc.        9.625% Sr. Notes due 2011                  $250.0    101.50        9.21%          9.31%
                  HoldCo     Town Sports International Holdings, Inc. 11.000% Sr. Discount Notes due 2014      $213.0     51.00       13.68%         13.68%        447 bp        437 bp


                  OpCo       United Agri Products Inc               8.250% Sr. Notes due 2011                  $225.0    108.00       6.478%         6.824%
                  HoldCo     UAP Holding Corp                       10.750% Sr. Discount Notes due 2012        $125.0     76.50       9.183%         9.595%        271 bp        277 bp




                                                                                                                                  Mean                             383 bp        327 bp
                                                                                                                                  Median                           333 bp        277 bp
                                                                                                                                  Trimmed Mean (1)                 371 bp        314 bp
                                                                                                                                  High                             849 bp        849 bp
                                                                                                                                  Low                              195 bp        116 bp

                  (1) Trimmed Mean excludes high and low values.




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posted:3/6/2011
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