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r <br />FINANCULL ANALYSIS OFPROPOSED CHANGE IN OWNERSIDPOF THE NORTH <br />CENTRAL CABLE CONMUNICATIONS CORPORATION SERVING SEVERAL. <br />h0qNESOTA COAEMUNrrrJ1ES <br />Summary of Conclusions <br />alia <br />Ile propiosed.. purchase price of' about 6 b <br />per subscn is c*nsistent vinth the <br />maritet range i`n the past few years.1 <br />W *fial debtw"uity ratio olf'l., 12 under, the proposed ownership i's les <br />leveraged than the, industry avlaage of 31009 <br />Because Meredith/New Heritage Strategic' Partners L.P. (the buyer) is recently <br />forme(L audited financial statmients are not, available for the Partnership, and, <br />therefore its historical financial condition cannot be assessed. <br />0 ---Pl - <br />The North, Central system currently periurms slightly below norins, for certain <br />selected, financial indicators, andi slightly better for otbers, <br />40 The buyeels financial projections, for the North Central system appear optimistij <br />4, <br />but achievable. <br />41 <br />Sensitivity analysis of the buyer's projections suggests that the buyer, can servic <br />1 011 01, 4, - 0 41 <br />the acquismon debt even if certain condi"tions maten'alize somewhat less <br />favorably than, assumed. I <br />4i <br />However, there are unlikely to be sufficient funds, for any sipificant plant rebuild <br />or upgrade before the, year 2000 unless, there is, a sigmcant amount of additional <br />borroNving, or an equity infmion; debt service and nornW capital expenditms <br />v *1 <br />n -1 msme moist of the oplaafing cash flow, <br />Although the rate-setting, marketing, and service approaches could be different <br />under the proposed, new manageMent, the, proposed financial transaction itself <br />ON 4 dw a <br />should not directly have a signi I ncant impact on these factors, <br />