Merger Model - Builders FirstSource, Inc.

and BMC Stock Holdings

($ in Millions Except Per Share and Per Unit Data)

Transaction Assumptions: Units: Units:

Transaction Close Date: Date # 1

Valuation/Analysis Date: Date

Exchange Ratio: x # 1
Implied Offer Price for Seller: $ as Stated # 1

Target Share Price: $ as Stated

Premium Paid: % % 100.0%

Target - Diluted Shares @ Offer Price: Millions Pre-Tax After-Tax

Purchase Equity Value: $M Amount: Cost: Cost:
Purchase Enterprise Value: $M $ 377.0 2.0% 1.6%
1,195.2 8.7% 6.8%
Target - LTM Revenue: $M 947.9 9.1%
Target - LTM EBITDA: $M 33.963
6.9%
LTM Purchase TEV / Revenue: x 6.4%
LTM Purchase TEV / EBITDA: x
1.0%
Post-Transaction Minimum Cash Balance: $M 2.0%
Post-Transaction Combined Cash Balance: $M
Maximum Cash Available for Deal: $M $ 10.0

Maximum Combined Debt / EBITDA: x

Maximum New Debt Available for Deal: $M
New Debt - Annual Amortization: %
New Debt - Maturity: # Years

Sources & Uses of Funds:

Sources: Uses:
Cash Used to Purchase Equity: $ 2,520.1
Debt Issued to Purchase Equity: 336.4
Stock Issued to Purchase Equity: 35.2
Assume/Replace Target's Debt: 23.9
Cash for Transaction Fees: $ 2,915.6
Total Sources:
OK!

Purchase Price Allocation:

Goodwill Calculation:
Equity Purchase Price: 10.0%
(-) Seller Book Value: $ 41.1
(+) Write-Off of Existing Goodwill: 8
Total Allocable Purchase Premium:

(-) Write-Up of PP&E: $ 1,701.1

(-) Write-Up of Intangibles: 40.0%
(-) Write-Down of Deferred Tax Liabilities: 680.5
(+) New Deferred Tax Liability:
Total Goodwill Created: 20.0%
340.2
5

$ 233.6
 Projected - Combined Period:
Combined Income Statement: Units: FY20 FY21 FY22 FY23 FY24
Revenue:
(+) Lumber & Lumber Sheet Goods: $M $ 3,948.6 $ 4,227.8 $ 4,498.0 $ 4,754.3
(+) Manufactured Products: $M 1,753.4 1,893.6 2,026.2 2,147.8
(+) Windows, Doors & Millwork: $M 3,041.7 3,205.6 3,360.0 3,502.0
(+) Structural Components: $M 748.6 786.1 825.4 866.6
(+) Gypsum, Roofing & Insulation: $M 588.2 611.7 633.1 652.1
(+) Siding, Metal & Concrete Products: $M 793.0 824.8 853.6 879.2
(+) Other Building Products & Services: $M 1,851.7 1,916.1 1,978.2 2,037.5
(+) Revenue Synergies: $M 245.1 445.4 660.2 890.3
Total Revenue: $M 12,970.3 13,911.1 14,834.7 15,729.9

(-) Cost of Sales: $M (9,276.5) (9,820.3) (10,341.6) (10,831.4)

(-) Cost of Revenue Synergies: $M (179.2) (326.1) (483.9) (653.5)
Total Cost of Sales: $M (9,455.6) (10,146.4) (10,825.5) (11,484.8)

Gross Profit: $M 3,514.7 3,764.7 4,009.2 4,245.1

Operating Expenses:
(-) Selling, General & Administrative: $M (2,542.4) (2,598.7) (2,732.8) (2,877.5)
(-) Operating Expenses on Revenue Synergies: $M (48.2) (87.0) (128.4) (172.3)
(+) OpEx Synergies: $M 80.1 114.8 140.6 143.4
(-) Amortization of New Intangibles: $M (68.0) (68.0) (68.0) (68.0)
(-) Depreciation of PP&E Write-Up: $M (5.1) (5.1) (5.1) (5.1)
(-) Depreciation: $M (156.6) (152.0) (150.1) (152.3)
(-) Amortization of Existing Intangibles: $M (46.5) (49.1) (51.5) (49.2)
(-) Merger and Integration Costs: $M (2.9) (2.8) (2.7) (2.6)
(-) New Merger and Integration Costs: $M (93.7) (46.9) - -
(-) Impairment of Assets: $M - - - -
Total Operating Expenses: $M (2,883.5) (2,894.8) (2,998.0) (3,183.7)

Operating Income: 631.2 869.9 1,011.2 1,061.5

(-) Interest Expense: $M (128.3) (107.4) (88.3) (74.6)
(+) Interest Income: $M 12.5 11.9 12.7 17.3
(-) Foregone Interest on Cash: $M (8.7) (8.7) (8.7) (8.7)
(-) Interest Paid on New Debt Issued: $M (104.5) (103.5) (102.5) (101.4)
(-) Amortization of New Debt Issuance Fees: $M (4.8) (4.8) (4.8) (4.8)
(+) Other Income, Net: $M 8.4 8.4 8.4 8.4
(-) Goodwill Impairment: $M - - - -
Pre-Tax Income: $M 405.8 665.8 828.0 897.7
(-) Income Tax Provision: $M (89.3) (146.5) (182.2) (197.5)
Net Income: $M $ 316.6 $ 519.3 $ 645.8 $ 700.2

(+) Acquirer - Diluted Shares: M Shares 117.0 117.0 117.0 117.0

(+) Shares Issued in Transaction: M Shares 34.0 34.0 34.0 34.0
Total Diluted Shares: M Shares 151.0 151.0 151.0 151.0

Acquirer - Standalone EPS: $ / Share $ 2.57 $ 3.55 $ 3.95 $ 4.13

Earnings Per Share (EPS): $ / Share $ 2.10 $ 3.44 $ 4.28 $ 4.64

Accretion / (Dilution) - $: $ / Share $ (0.48) $ (0.11) $ 0.33 $ 0.51
Accretion / (Dilution) - %: % (18.5%) (3.0%) 8.3% 12.4%

Pro-Forma Earnings Per Share (EPS): $ / Share $ 2.96 $ 4.06 $ 4.66 $ 5.02
Pro-Forma Accretion / (Dilution) - $: $ / Share $ 0.39 $ 0.51 $ 0.71 $ 0.89
Pro-Forma Accretion / (Dilution) - %: % 15.0% 14.4% 17.9% 21.6%
 Projected - Combined Period:
Cash Flow and Debt Repayment: Units: FY20 FY21 FY22 FY23 FY24

Net Income: $M
(+) Depreciation: $M
(+) Amortization of Existing Intangibles: $M
(+) Amortization of Debt Discounts & Issuance Fees: $M
(+) Amortization of New Intangibles: $M
(+) Depreciation of PP&E Write-Up: $M
(+) Amortization of New Debt Issuance Fees: $M
(+) Goodwill Impairment: $M
(+) Stock-Based Compensation: $M
(+) Existing Deferred Income Taxes: $M
(+) New Deferred Income Taxes: $M
(+/-) Other Items: $M
(+/-) Change in Working Capital: $M
Cash Flow from Operations: $M

(-) Capital Expenditures: $M

(+) Proceeds from Sale of PP&E: $M
(-) Acquisitions: $M
Cash Flow from Investing: $M

(+) Debt Issuances: $M

(-) Debt Repayments: $M
(+) Issuances of Common Stock: $M
(-) Stock Repurchases: $M
(-) Common Dividends: $M
(+) Issuance Fees and Other Items: $M
(-) New Debt Principal Repayments: $M (12.0) (12.0) (12.0) (12.0)
Cash Flow from Financing: $M

Net Change in Cash: $M

New Debt Balance - Face Value: $M 1,195.2 1,183.2 1,171.3 1,159.3 1,147.4
Total Debt Balance - Face Value: $M 2,905.2 2,563.3 2,321.3 2,135.4
Total Cash Balance: $M
 Projected - Combined Period:
Combined Company - Key Metrics and Ratios: Units: FY20 FY21 FY22 FY23 FY24

Operating Income: $M
(+) Depreciation: $M
(+) Amortization of Existing Intangible Assets: $M
(+) Amortization of New Intangibles: $M
(+) Depreciation of PP&E Write-Up: $M
(+) Impairment Charges: $M
EBITDA: $M

Beginning Shareholders' Equity: $M

(+) Net Income: $M
(+) Issuances of Common Stock: $M
(-) Stock Repurchases: $M
(-) Common Dividends: $M
Ending Shareholders' Equity: $M

Revenue Growth: %
Operating Margin: %
EBITDA Margin: %
Net Margin: %

Effective Tax Rate: %

Depreciation % Revenue: %
CapEx % Revenue: %

Total Debt / EBITDA: x

Net Debt / EBITDA: x
EBITDA / Net Interest Expense: x

Total Debt / Equity: x

Total Debt / Capital: %
Net Debt / Equity: x
Net Debt / Net Capital: %

Sensitivity Tables:

Sensitivity - Year 1 Pro-Forma EPS Accretion/Dilution vs. Exchange Ratio and Expense Synergy Realization %:

Exchange Ratio:

Expense Synergy Realization %:

Sensitivity - Year 2 Pro-Forma EPS Accretion/Dilution vs. Exchange Ratio and Expense Synergy Realization %:

Exchange Ratio:

Expense Synergy Realization %:

Merger Model - Financial Projections of the Acquirer (Builders FirstSource, Inc.)
($ in Millions Except Per Share and Per Unit Data)

Acquirer - Financial Profile: Units:

Acquirer Name: Name Builders FirstSource, Inc. Options - Treasury Stock Method:
Acquirer Ticker: Name BLDR
Last Fiscal Year: Date 2019-12-31 Number Exercise
Name: (Millions): Price: Dilution:
Share Price: $ as Stated $ 27.91 Options A: 0.396 $ 6.43 0.305
Effective Tax Rate: % 22.0% Total: 0.396 0.305

Conversion Units: # 1,000,000

Basic Shares Outstanding: Millions 116.70 Restricted Stock Units and Other Sources:
Diluted Shares Outstanding: Millions 119.08
Number Exercise
Current Equity Value: $M $ 3,323.6 Name: (Millions): Price: Dilution:
(-) Cash & Cash-Equivalents: $M (385.5) Restricted Stock Units: 2.076 N/A 2.076
(-) Financial Investments: $M - Total: 2.076 2.076
(-) Equity Investments: $M -
(-) Other Non-Core Assets, Net: $M -
(-) Net Operating Losses: $M (13.6)
(+) Total Debt & Finance Leases: $M 1,634.5
(+) Preferred Stock: $M -
(+) Operating Leases: $M -
(+) Noncontrolling Interests: $M -
(+) Unfunded Pensions: $M -
Current Enterprise Value: $M $ 4,559.1

Historical: Projected:
Acquirer - Key Drivers: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Income Statement Drivers:
Revenue Growth Rates by Segment:
Lumber & Lumber Sheet Goods: % 15.6% (22.4%) 12.0% 8.0% 8.0% 7.0% 6.0%
Manufactured Products: % 15.2% 4.1% 12.0% 8.0% 8.0% 7.0% 6.0%
Windows, Doors & Millwork: % 6.3% 6.7% 10.0% 7.0% 7.0% 6.0% 5.0%
Gypsum, Roofing & Insulation: % (1.8%) 0.0% 7.0% 4.0% 4.0% 3.5% 3.0%
Siding, Metal & Concrete Products: % 6.4% 2.1% 7.0% 4.0% 4.0% 3.5% 3.0%
Other Building Products & Services: % (0.2%) 4.8% 7.0% 4.0% 4.0% 3.5% 3.0%

Cost of Sales % Revenue: % 75.4% 75.1% 72.8% 72.8% 72.8% 72.8% 72.8% 72.8%

# Employees: # People 15,000 15,000 15,800 17,067 17,291 17,236 17,912 18,640
Revenue per Employee: $ as Stated $ 468,947 $ 514,985 $ 460,787 $ 470,000 $ 495,000 $ 530,000 $ 540,000 $ 545,000

SG&A Spending per Employee: $ as Stated $ 89,953 $ 97,071 $ 93,955 $ 96,773 $ 99,677 $ 101,670 $ 103,704 $ 105,778
Growth Rate: % 7.9% (3.2%) 3.0% 3.0% 2.0% 2.0% 2.0%

Depreciation % Revenue: % 1.0% 1.0% 1.2% 1.2% 1.1% 1.0% 0.9% 0.9%
Amortization of Intangibles % Revenue: % 0.3% 0.3% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3%

Goodwill Impairment: $M - - - - - - - -
Balance Sheet and Cash Flow Statement Drivers:
Accounts Receivable % Revenue: % 10.0% 9.4% 9.5% 9.6% 9.6% 9.6% 9.6% 9.6%
Inventory & Other Current Assets % COGS: % 12.0% 11.0% 11.3% 11.4% 11.4% 11.4% 11.4% 11.4%

Operating Lease Assets % SG&A: % 0.0% 0.0% 19.7% 19.7% 19.7% 19.7% 19.7% 19.7%

Accounts Payable % COGS: % 9.7% 7.3% 8.2% 8.4% 8.4% 8.4% 8.4% 8.4%
Accrued Liabilities % SG&A: % 16.7% 20.1% 20.8% 21.0% 21.5% 22.0% 22.5% 23.0%

Stock-Based Compensation % Revenue: % 0.2% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Items: $M 63.6 (4.6) 7.2 1.3 1.3 1.3 1.3 1.3
Deferred Taxes % Book Taxes: % 92.4% 93.3% 83.7% 10.0% 10.0% 10.0% 10.0% 10.0%

CapEx % Revenue: % 0.9% 1.3% 1.6% 1.6% 1.5% 1.4% 1.3% 1.3%
Proceeds from Sale of PP&E: $M 3.0 4.8 6.5 4.8 4.8 4.8 4.8 4.8
Acquisitions % Revenue: % 0.0% 0.0% 1.3% 1.3% 1.2% 1.1% 1.0% 1.0%

Issuances of Common Stock: $M - - - - - - - -

Stock Repurchases: $M (2.6) (4.9) (10.4) - - - - -
Common Dividends: $M - - - - - - - -

Cash & Debt Schedule:

Debt Maturities & Repayments: $M 1,399.9 1,898.3 1,802.8 558.0 1,000.0 1,200.0 800.0 555.9
Issuances % Maturities & Repayments: % 97.9% 87.8% 84.2% 160.5% 75.0% 75.0% 75.0% 75.0%
Debt Issuances: $M 1,370.0 1,665.8 1,518.4 895.6 750.0 900.0 600.0 416.9

Cash Interest Payments: $M 144.7 107.6 98.1 100.0 103.0 84.4 67.6 56.1
Face Value of Total Debt Balance: $M 1,815.9 1,592.7 1,313.9 1,651.5 1,401.5 1,101.5 901.5 762.5
Weighted Average Interest Rate: % 7.8% 6.3% 6.7% 6.7% 6.7% 6.7% 6.7% 6.7%

Amortization of Debt Discounts & Issuance Fees: $M 6.1 4.6 3.9 4.6 4.1 3.5 3.1 2.8
Issuance Fees: $M 17.9 15.0 18.0 12.0 8.3
Issuance Fee %: % 2.0%
Average Tenor of Debt Issuances: # Years 10

Interest Income % Beginning Cash Balance: % 0.0% 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0%
 Historical: Projected:
Acquirer - Income Statement: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Revenue:
(+) Lumber & Lumber Sheet Goods: $M $ 2,510.9 $ 2,902.2 $ 2,251.6 $ 2,521.8 $ 2,723.5 $ 2,941.4 $ 3,147.3 $ 3,336.1
(+) Manufactured Products: $M 1,208.6 1,392.0 1,449.6 1,623.5 1,753.4 1,893.6 2,026.2 2,147.8
(+) Windows, Doors & Millwork: $M 1,360.6 1,445.9 1,542.9 1,697.2 1,816.0 1,943.1 2,059.7 2,162.7
(+) Gypsum, Roofing & Insulation: $M 538.4 528.4 528.6 565.6 588.2 611.7 633.1 652.1
(+) Siding, Metal & Concrete Products: $M 655.9 697.7 712.6 762.5 793.0 824.8 853.6 879.2
(+) Other Building Products & Services: $M 759.9 758.5 795.2 850.8 884.9 920.3 952.5 981.0
Total Revenue: $M 7,034.2 7,724.8 7,280.4 8,021.4 8,559.0 9,134.9 9,672.4 10,159.0
(-) Cost of Sales: $M (5,306.8) (5,801.8) (5,303.6) (5,839.6) (6,230.9) (6,650.2) (7,041.5) (7,395.8)
Gross Profit: $M 1,727.4 1,922.9 1,976.8 2,181.8 2,328.0 2,484.7 2,630.9 2,763.2

Operating Expenses:
(-) Selling, General & Administrative: $M (1,349.3) (1,456.1) (1,484.5) (1,651.6) (1,723.5) (1,752.4) (1,857.5) (1,971.7)
(-) Depreciation: $M (71.1) (74.4) (83.9) (96.3) (94.1) (91.3) (87.1) (91.4)
(-) Amortization of Intangibles: $M (21.9) (23.5) (16.1) (24.1) (25.7) (27.4) (29.0) (30.5)
Total Operating Expenses: $M (1,442.3) (1,554.0) (1,584.5) (1,771.9) (1,843.3) (1,871.1) (1,973.6) (2,093.6)

Operating Income: $M 285.1 369.0 392.3 409.9 484.7 613.6 657.3 669.6
(-) Interest Expense: $M (193.2) (108.2) (109.6) (104.6) (107.1) (87.9) (70.6) (58.9)
(+) Interest Income: $M - - - 0.3 8.4 6.5 5.6 8.3
(-) Goodwill Impairment: $M - - - - - - - -
Pre-Tax Income: $M 91.9 260.8 282.8 305.6 386.1 532.2 592.3 619.0
(-) Income Tax Provision: $M (53.1) (55.6) (60.9) (67.2) (84.9) (117.1) (130.3) (136.2)
Net Income: $M 38.8 205.2 221.8 238.3 301.2 415.1 462.0 482.8

Earnings Per Share (EPS): $ / Share $ 0.34 $ 1.76 $ 1.90 $ 2.04 $ 2.57 $ 3.55 $ 3.95 $ 4.13
Average Diluted Shares: M Shares 115.6 116.6 117.0 117.0 117.0 117.0 117.0 117.0
 Historical: Projected:
Acquirer - Balance Sheet: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
ASSETS:
Current Assets:
Cash & Cash Equivalents: $M $ 57.5 $ 10.1 $ 14.1 $ 422.0 $ 325.6 $ 281.2 $ 415.8 $ 640.0
Accounts Receivable: $M 703.2 722.8 692.4 771.8 823.5 878.9 930.6 977.4
Inventory & Other Current Assets: $M 635.1 640.8 600.4 668.3 713.1 761.1 805.9 846.4
Total Current Assets: $M 1,395.9 1,373.8 1,306.9 1,862.0 1,862.2 1,921.2 2,152.3 2,463.9

Long-Term Assets:
Net Plants, Property & Equipment: $M 639.3 670.1 721.9 853.5 985.7 1,117.9 1,248.6 1,386.1
Operating Lease Assets: $M - - 292.7 325.6 339.8 345.5 366.2 388.8
Goodwill: $M 740.4 740.4 769.0 769.0 769.0 769.0 769.0 769.0
Other Intangible Assets: $M 132.6 103.2 128.4 104.3 78.6 51.2 22.2 (8.3)
Other Long-Term Assets: $M 22.9 22.2 22.2 22.2 22.2 22.2 22.2 22.2
Total Long-Term Assets: $M 1,535.2 1,535.8 1,934.2 2,074.7 2,195.4 2,305.9 2,428.3 2,557.8

TOTAL ASSETS: $M $ 2,931.0 $ 2,909.5 $ 3,241.1 $ 3,936.7 $ 4,057.6 $ 4,227.1 $ 4,580.6 $ 5,021.7

LIABILITIES & EQUITY:

Current Liabilities:
Accounts Payable: $M $ 514.3 $ 423.2 $ 436.8 $ 490.9 $ 523.8 $ 559.1 $ 592.0 $ 621.8
Accrued Liabilities: $M 224.7 292.5 309.0 346.8 370.6 385.5 417.9 453.5
Total Current Liabilities: $M 739.0 715.7 745.8 837.8 894.4 944.6 1,009.9 1,075.3

Long-Term Liabilities:
Total Debt: $M 1,784.4 1,561.3 1,291.3 1,615.6 1,354.6 1,040.1 831.1 686.6
Operating Lease Liabilities: $M - - 298.6 331.6 345.7 351.4 372.2 394.7
Net Deferred Tax Liability (Net DTL): $M (75.1) (22.8) 28.2 35.0 43.4 55.2 68.2 81.8
Other Long-Term Liabilities: $M 106.5 59.0 52.2 52.2 52.2 52.2 52.2 52.2
Total Long-Term Liabilities: $M 1,815.8 1,597.5 1,670.3 2,034.3 1,796.0 1,498.9 1,323.7 1,215.3

Total Liabilities: $M $ 2,554.8 $ 2,313.2 $ 2,416.1 $ 2,872.1 $ 2,690.4 $ 2,443.5 $ 2,333.6 $ 2,290.6

Common Shareholders' Equity: $M $ 376.2 $ 596.3 $ 825.0 $ 1,064.6 $ 1,367.1 $ 1,783.6 $ 2,246.9 $ 2,731.1

TOTAL LIABILITIES & EQUITY: $M $ 2,931.0 $ 2,909.5 $ 3,241.1 $ 3,936.7 $ 4,057.6 $ 4,227.1 $ 4,580.6 $ 5,021.7

Balance Sheet Check: OK! OK! OK! OK! OK! OK! OK! OK!
 Historical: Projected:
Acquirer - Cash Flow Statement: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Net Income: $M $ 38.8 $ 205.2 $ 221.8 $ 238.3 $ 301.2 $ 415.1 $ 462.0 $ 482.8
(+) Depreciation: $M 71.1 74.4 83.9 96.3 94.1 91.3 87.1 91.4
(+) Amortization of Intangibles: $M 21.9 23.5 16.1 24.1 25.7 27.4 29.0 30.5
(+) Amortization of Debt Discounts & Issuance Fees: $M 6.1 4.6 3.9 4.6 4.1 3.5 3.1 2.8
(+) Goodwill Impairment: $M - - - - - - - -
(+) Stock-Based Compensation: $M 13.5 14.4 12.2 - - - - -
(+) Deferred Income Taxes: $M 49.1 51.8 51.0 6.7 8.5 11.7 13.0 13.6
(+/-) Other Items: $M 63.6 (4.6) 7.2 1.3 1.3 1.3 1.3 1.3
Changes in Working Capital:
(+/-) Change in Accounts Receivable: $M (75.7) (9.2) 42.8 (79.4) (51.7) (55.4) (51.7) (46.8)
(+/-) Change in Inventory & Other Current Assets: $M (60.6) (15.8) 48.9 (67.9) (44.8) (48.0) (44.8) (40.5)
(+/-) Change in Operating Lease Assets: $M - - - (33.0) (14.2) (5.7) (20.7) (22.5)
(+/-) Changes in Other Assets and Liabilities: $M 8.3 5.6 1.6 - - - - -
(+/-) Change in Accounts Payable: $M 65.8 (89.4) 4.1 54.1 32.9 35.2 32.9 29.8
(+/-) Change in Accrued Liabilities: $M (23.3) 22.2 10.5 37.9 23.7 15.0 32.4 35.6
(+/-) Change in Operating Lease Liabilities: $M - - - 33.0 14.2 5.7 20.7 22.5
Cash Flow from Operations: $M 178.5 282.8 504.0 316.0 395.0 497.2 564.3 600.4

(-) Capital Expenditures: $M (62.4) (101.4) (112.9) (128.3) (128.4) (127.9) (125.7) (132.1)
(+) Proceeds from Sale of PP&E: $M 3.0 4.8 6.5 4.8 4.8 4.8 4.8 4.8
(-) Acquisitions: $M - - (92.9) (104.3) (102.7) (100.5) (96.7) (101.6)
Cash Flow from Investing: $M (59.4) (96.7) (199.2) (227.9) (226.3) (223.6) (217.7) (228.9)

(+) Debt Issuances: $M 1,370.0 1,665.8 1,518.4 895.6 750.0 900.0 600.0 416.9
(-) Debt Repayments: $M (1,399.9) (1,898.3) (1,802.8) (558.0) (1,000.0) (1,200.0) (800.0) (555.9)
(+) Issuances of Common Stock: $M - - - - - - - -
(-) Stock Repurchases: $M (2.6) (4.9) (10.4) - - - - -
(-) Common Dividends: $M - - - - - - - -
(+) Issuance Fees and Other Items: $M (43.4) 3.8 (6.0) (17.9) (15.0) (18.0) (12.0) (8.3)
Cash Flow from Financing: $M (76.0) (233.6) (300.9) 319.7 (265.0) (318.0) (212.0) (147.3)

Net Change in Cash: $M 43.1 (47.4) 4.0 407.9 (96.4) (44.4) 134.6 224.2

Beginning Cash: $M 14.4 57.5 10.1 14.1 422.0 325.6 281.2 415.8
Ending Cash: $M 57.5 10.1 14.1 422.0 325.6 281.2 415.8 640.0

Historical: Projected:
Acquirer - Key Metrics and Ratios: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Operating Income: $M $ 285.1 $ 369.0 $ 392.3 $ 409.9 $ 484.7 $ 613.6 $ 657.3 $ 669.6
(+) Depreciation: $M 71.1 74.4 83.9 96.3 94.1 91.3 87.1 91.4
(+) Amortization of Intangible Assets: $M 21.9 23.5 16.1 24.1 25.7 27.4 29.0 30.5
EBITDA: $M 378.1 466.9 492.3 530.2 604.5 732.3 773.4 791.5

Revenue Growth: % N/A 9.8% (5.8%) 10.2% 6.7% 6.7% 5.9% 5.0%
Operating Margin: % 4.1% 4.8% 5.4% 5.1% 5.7% 6.7% 6.8% 6.6%
EBITDA Margin: % 5.4% 6.0% 6.8% 6.6% 7.1% 8.0% 8.0% 7.8%
Net Margin: % 0.6% 2.7% 3.0% 3.0% 3.5% 4.5% 4.8% 4.8%

Effective Tax Rate: % 57.8% 21.3% 21.6% 22.0% 22.0% 22.0% 22.0% 22.0%

Depreciation % Revenue: % 1.0% 1.0% 1.2% 1.2% 1.1% 1.0% 0.9% 0.9%
CapEx % Revenue: % 0.9% 1.3% 1.6% 1.6% 1.5% 1.4% 1.3% 1.3%
Merger Model - Financial Projections of the Target (BMC Stock Holdings)
($ in Millions Except Per Share and Per Unit Data)

Target - Financial Profile: Units:

Acquirer Name: Name BMC Stock Holdings Options @ Current Share Price - Treasury Stock Method:
Acquirer Ticker: Name BMCH
Last Fiscal Year: Date 2019-12-31 Number Exercise
Name: (Millions): Price: Dilution:
Share Price: $ as Stated $ 32.22 Options A: 0.392 $ 16.93 0.186
Effective Tax Rate: % 22.0% Total: 0.392 0.186

Basic Shares Outstanding: Millions 66.81 Options @ Offer Price per Share - Treasury Stock Method:
Diluted Shares Outstanding: Millions 68.77
Number Exercise
Current Equity Value: $M $ 2,215.8 Name: (Millions): Price: Dilution:
(-) Cash & Cash-Equivalents: $M (253.4) Options A: 0.392 $ 16.93 0.211
(-) Financial Investments: $M - Total: 0.392 0.211
(-) Equity Investments: $M -
(-) Other Non-Core Assets, Net: $M - Restricted Stock Units and Other Sources:
(-) Net Operating Losses: $M (18.0)
(+) Total Debt & Finance Leases: $M 360.2 Number Exercise
(+) Preferred Stock: $M - Name: (Millions): Price: Dilution:
(+) Operating Leases: $M - Restricted Stock Units: 1.775 N/A 1.775
(+) Noncontrolling Interests: $M - Total: 1.775 1.775
(+) Unfunded Pensions: $M -
Current Enterprise Value: $M $ 2,304.6

Historical: Projected:
Target - Key Drivers: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Income Statement Drivers:
Revenue Growth Rates by Segment:
Structural Components: % 19.0% 2.2% 10.0% 7.0% 5.0% 5.0% 5.0%
Lumber & Lumber Sheet Goods: % 15.5% (19.1%) 10.0% 7.0% 5.0% 5.0% 5.0%
Windows, Doors & Millwork: % 6.3% 12.0% 8.0% 5.0% 3.0% 3.0% 3.0%
Other Building Products & Services: % (1.5%) 7.4% 7.0% 4.0% 3.0% 3.0% 3.0%

Cost of Sales % Revenue: % 76.1% 75.0% 73.4% 73.0% 73.1% 73.2% 73.3% 73.4%

# Employees: # People 9,100 9,500 10,200 10,799 10,821 10,964 11,116 11,279
Revenue per Employee: $ as Stated $ 369,887 $ 387,626 $ 355,548 $ 365,000 $ 385,000 $ 395,000 $ 405,000 $ 415,000

SG&A Spending per Employee: $ as Stated $ 68,082 $ 71,608 $ 71,333 $ 73,473 $ 75,678 $ 77,191 $ 78,735 $ 80,310
Growth Rate: % 5.2% (0.4%) 3.0% 3.0% 2.0% 2.0% 2.0%

Depreciation % Revenue: % 1.6% 1.4% 1.5% 1.5% 1.5% 1.4% 1.4% 1.3%
Amortization of Intangibles % Revenue: % 0.5% 0.4% 0.5% 0.6% 0.5% 0.5% 0.5% 0.4%

Merger & Integration Costs % Acquisition Spending: % 39.9% 19.1% 5.2% 5.0% 5.0% 5.0% 5.0% 5.0%
Impairment of Assets: $M 0.4 - 1.9 - - - - -

Goodwill Impairment: $M - - - - - - - -

Other Income, Net: $M 5.7 9.9 9.6 8.4 8.4 8.4 8.4 8.4
Balance Sheet and Cash Flow Statement Drivers:
Accounts Receivable % Revenue: % 9.6% 8.1% 9.0% 8.9% 8.9% 8.9% 8.9% 8.9%
Inventory & Other Current Assets % COGS: % 15.6% 14.4% 16.5% 15.5% 15.5% 15.5% 15.5% 15.5%

Operating Lease Assets % SG&A: % 0.0% 0.0% 19.2% 19.2% 19.2% 19.2% 19.2% 19.2%

Accounts Payable % COGS: % 6.8% 4.5% 7.1% 6.1% 6.1% 6.1% 6.1% 6.1%
Accrued Liabilities % SG&A: % 19.3% 22.2% 21.1% 20.9% 20.9% 20.9% 20.9% 20.9%

Stock-Based Compensation % Revenue: % 0.2% 0.3% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Items: $M (2.7) (2.7) 1.7 (1.2) (1.2) (1.2) (1.2) (1.2)
Deferred Taxes % Book Taxes: % 9.5% 3.4% 33.2% 6.5% 6.5% 6.5% 6.5% 6.5%

CapEx % Revenue: % 1.9% 1.5% 2.5% 2.0% 1.9% 1.8% 1.7% 1.6%
Proceeds from Sale of PP&E: $M 13.4 21.2 5.0 13.2 13.2 13.2 13.2 13.2
Acquisitions % Revenue: % 1.1% 0.6% 3.4% 1.5% 1.4% 1.3% 1.2% 1.1%

Issuances of Common Stock: $M - - - - - - - -

Stock Repurchases: $M (1.0) (4.9) (18.2) - - - - -
Common Dividends: $M - - - - - - - -

Cash & Debt Schedule:

Debt Maturities & Repayments: $M 1,003.4 867.5 117.7 200.0 250.0 300.0 300.0 350.0
Issuances % Maturities & Repayments: % 99.5% 98.6% 96.4% 90.0% 90.0% 90.0% 90.0% 90.0%
Debt Issuances: $M 998.2 855.4 113.4 180.0 225.0 270.0 270.0 315.0

Cash Interest Payments: $M 24.2 22.4 21.7 21.2 19.9 18.2 16.4 14.5
Face Value of Total Debt Balance: $M 377.4 362.5 365.5 345.5 320.5 290.5 260.5 225.5
Weighted Average Interest Rate: % 6.4% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%

Amortization of Debt Discounts & Issuance Fees: $M 1.7 1.7 1.4 1.4 1.4 1.3 1.2 1.2
Issuance Fees: $M 3.6 4.5 5.4 5.4 6.3
Issuance Fee %: % 2.0%
Average Tenor of Debt Issuances: # Years 10

Interest Income % Beginning Cash Balance: % 0.0% 6.5% 2.6% 2.0% 2.0% 2.0% 2.0% 2.0%
 Historical: Projected:
Target - Income Statement: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Revenue:
(+) Structural Components: $M $ 522.6 $ 622.1 $ 636.0 $ 699.6 $ 748.6 $ 786.1 $ 825.4 $ 866.6
(+) Lumber & Lumber Sheet Goods: $M 1,114.2 1,286.5 1,040.9 1,145.0 1,225.1 1,286.4 1,350.7 1,418.2
(+) Windows, Doors & Millwork: $M 907.4 964.7 1,080.8 1,167.3 1,225.7 1,262.4 1,300.3 1,339.3
(+) Other Building Products & Services: $M 821.8 809.2 868.8 929.7 966.8 995.9 1,025.7 1,056.5
Total Revenue: $M 3,366.0 3,682.4 3,626.6 3,941.6 4,166.2 4,330.7 4,502.1 4,680.7
(-) Cost of Sales: $M (2,560.3) (2,762.5) (2,662.4) (2,877.3) (3,045.5) (3,170.1) (3,300.0) (3,435.6)
Gross Profit: $M 805.7 920.0 964.2 1,064.2 1,120.7 1,160.6 1,202.1 1,245.1

Operating Expenses:
(-) Selling, General & Administrative: $M (619.5) (680.3) (727.6) (793.4) (818.9) (846.3) (875.2) (905.8)
(-) Depreciation: $M (53.2) (50.4) (54.1) (59.1) (62.5) (60.6) (63.0) (60.8)
(-) Amortization of Intangibles: $M (16.0) (15.0) (18.0) (23.6) (20.8) (21.7) (22.5) (18.7)
(-) Merger and Integration Costs: $M (15.3) (4.0) (6.5) (3.0) (2.9) (2.8) (2.7) (2.6)
(-) Impairment of Assets: $M (0.4) - (1.9) - - - - -
Total Operating Expenses: $M (704.5) (749.7) (808.1) (879.2) (905.2) (931.4) (963.5) (987.9)

Operating Income: $M 101.2 170.3 156.1 185.1 215.5 229.2 238.6 257.1
(-) Interest Expense: $M (25.0) (24.0) (23.2) (22.6) (21.2) (19.5) (17.7) (15.7)
(+) Interest Income: $M - 0.8 4.0 3.3 4.1 5.4 7.0 9.0
(+) Other Income, Net: $M 5.7 9.9 9.6 8.4 8.4 8.4 8.4 8.4
(-) Goodwill Impairment: $M - - - - - - - -
Pre-Tax Income: $M 81.8 156.9 146.5 174.2 206.8 223.5 236.3 258.9
(-) Income Tax Provision: $M (24.4) (37.2) (36.6) (38.3) (45.5) (49.2) (52.0) (56.9)
Net Income: $M 57.4 119.7 109.8 135.8 161.3 174.3 184.3 201.9

Earnings Per Share (EPS): $ / Share $ 0.85 $ 1.77 $ 1.63 $ 2.02 $ 2.40 $ 2.59 $ 2.74 $ 3.00
Average Diluted Shares: M Shares 67.4 67.7 67.3 67.3 67.3 67.3 67.3 67.3
 Historical: Projected:
Target - Balance Sheet: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
ASSETS:
Current Assets:
Cash & Cash Equivalents: $M $ 11.8 $ 150.7 $ 165.5 $ 205.1 $ 268.6 $ 351.4 $ 450.5 $ 558.9
Accounts Receivable: $M 322.9 298.4 325.7 350.5 370.5 385.1 400.4 416.3
Inventory & Other Current Assets: $M 399.5 397.9 438.4 445.7 471.8 491.1 511.2 532.2
Total Current Assets: $M 734.1 847.0 929.7 1,001.3 1,110.9 1,227.6 1,362.1 1,507.4

Long-Term Assets:
Net Plants, Property & Equipment: $M 295.8 294.3 345.5 411.1 472.9 533.3 587.6 639.9
Operating Lease Assets: $M - - 139.9 152.6 157.5 162.7 168.3 174.2
Goodwill: $M 261.8 263.0 297.1 297.1 297.1 297.1 297.1 297.1
Other Intangible Assets: $M 167.6 158.9 185.6 162.0 141.1 119.5 97.0 78.3
Other Long-Term Assets: $M 14.0 12.9 8.3 8.3 8.3 8.3 8.3 8.3
Total Long-Term Assets: $M 739.2 729.1 976.4 1,031.1 1,076.9 1,121.0 1,158.3 1,197.8

TOTAL ASSETS: $M $ 1,473.4 $ 1,576.1 $ 1,906.1 $ 2,032.4 $ 2,187.8 $ 2,348.6 $ 2,520.4 $ 2,705.2

LIABILITIES & EQUITY:

Current Liabilities:
Accounts Payable: $M $ 174.6 $ 123.5 $ 189.6 $ 176.6 $ 186.9 $ 194.6 $ 202.5 $ 210.9
Accrued Liabilities: $M 119.5 150.8 153.7 165.5 170.8 176.5 182.6 188.9
Total Current Liabilities: $M 294.0 274.3 343.3 342.1 357.7 371.1 385.1 399.8

Long-Term Liabilities:
Total Debt: $M 371.6 360.7 358.6 336.4 308.2 274.1 239.9 199.8
Operating Lease Liabilities: $M - - 147.0 159.6 164.5 169.8 175.4 181.2
Net Deferred Tax Liability (Net DTL): $M 1.8 3.0 15.2 17.7 20.6 23.8 27.1 30.8
Other Long-Term Liabilities: $M 59.0 63.4 60.5 60.5 60.5 60.5 60.5 60.5
Total Long-Term Liabilities: $M 432.4 427.1 581.3 574.2 553.9 528.2 503.0 472.4

Total Liabilities: $M $ 726.5 $ 701.5 $ 924.6 $ 916.3 $ 911.6 $ 899.3 $ 888.1 $ 872.2

Common Shareholders' Equity: $M $ 746.9 $ 874.7 $ 981.5 $ 1,116.1 $ 1,276.2 $ 1,449.3 $ 1,632.4 $ 1,833.0

TOTAL LIABILITIES & EQUITY: $M $ 1,473.4 $ 1,576.1 $ 1,906.1 $ 2,032.4 $ 2,187.8 $ 2,348.6 $ 2,520.4 $ 2,705.2

Balance Sheet Check: OK! OK! OK! OK! OK! OK! OK! OK!
 Historical: Projected:
Target - Cash Flow Statement: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Net Income: $M $ 57.4 $ 119.7 $ 109.8 $ 135.8 $ 161.3 $ 174.3 $ 184.3 $ 201.9
(+) Depreciation: $M 53.2 50.4 54.1 59.1 62.5 60.6 63.0 60.8
(+) Amortization of Intangibles: $M 16.0 15.0 18.0 23.6 20.8 21.7 22.5 18.7
(+) Amortization of Debt Discounts & Issuance Fees: $M 1.7 1.7 1.4 1.4 1.4 1.3 1.2 1.2
(+) Goodwill Impairment: $M - - - - - - - -
(+) Stock-Based Compensation: $M 6.8 11.3 12.5 - - - - -
(+) Deferred Income Taxes: $M 2.3 1.3 12.2 2.5 2.9 3.2 3.4 3.7
(+/-) Other Items: $M (2.7) (2.7) 1.7 (1.2) (1.2) (1.2) (1.2) (1.2)
Changes in Working Capital:
(+/-) Change in Accounts Receivable: $M (3.3) 16.1 0.8 (24.8) (20.0) (14.6) (15.2) (15.9)
(+/-) Change in Inventory & Other Current Assets: $M (32.3) 3.3 0.1 (7.3) (26.1) (19.3) (20.1) (21.0)
(+/-) Change in Operating Lease Assets: $M - - - (12.7) (4.9) (5.3) (5.6) (5.9)
(+/-) Changes in Other Assets and Liabilities: $M (8.7) 45.4 (17.2) - - - - -
(+/-) Change in Accounts Payable: $M 3.5 (51.3) 52.4 (13.0) 10.3 7.6 8.0 8.3
(+/-) Change in Accrued Liabilities: $M - - - 11.8 5.3 5.7 6.0 6.4
(+/-) Change in Operating Lease Liabilities: $M - - - 12.7 4.9 5.3 5.6 5.9
Cash Flow from Operations: $M 93.9 210.0 245.9 187.9 217.3 239.2 251.9 262.9

(-) Capital Expenditures: $M (63.3) (55.2) (89.4) (78.8) (79.2) (78.0) (76.5) (74.9)
(+) Proceeds from Sale of PP&E: $M 13.4 21.2 5.0 13.2 13.2 13.2 13.2 13.2
(-) Acquisitions: $M (38.4) (21.0) (124.4) (59.1) (58.3) (56.3) (54.0) (51.5)
Cash Flow from Investing: $M (88.3) (54.9) (208.8) (124.7) (124.3) (121.0) (117.4) (113.2)

(+) Debt Issuances: $M 998.2 855.4 113.4 180.0 225.0 270.0 270.0 315.0
(-) Debt Repayments: $M (1,003.4) (867.5) (117.7) (200.0) (250.0) (300.0) (300.0) (350.0)
(+) Issuances of Common Stock: $M - - - - - - - -
(-) Stock Repurchases: $M (1.0) (4.9) (18.2) - - - - -
(-) Common Dividends: $M - - - - - - - -
(+) Issuance Fees and Other Items: $M 3.4 1.0 0.1 (3.6) (4.5) (5.4) (5.4) (6.3)
Cash Flow from Financing: $M (2.8) (16.1) (22.3) (23.6) (29.5) (35.4) (35.4) (41.3)

Net Change in Cash: $M 2.8 139.0 14.8 39.6 63.5 82.8 99.1 108.4

Beginning Cash: $M 8.9 11.8 150.7 165.5 205.1 268.6 351.4 450.5
Ending Cash: $M 11.8 150.7 165.5 205.1 268.6 351.4 450.5 558.9

Historical: Projected:
Target - Key Metrics and Ratios: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

Operating Income: $M $ 101.2 $ 170.3 $ 156.1 $ 185.1 $ 215.5 $ 229.2 $ 238.6 $ 257.1
(+) Depreciation: $M 53.2 50.4 54.1 59.1 62.5 60.6 63.0 60.8
(+) Amortization of Intangible Assets: $M 16.0 15.0 18.0 23.6 20.8 21.7 22.5 18.7
(+) Impairment of Assets: $M 0.4 - 1.9 - - - - -
EBITDA: $M 170.8 235.7 230.1 267.8 298.9 311.5 324.1 336.7

Revenue Growth: % 8.8% 9.4% (1.5%) 8.7% 5.7% 3.9% 4.0% 4.0%
Operating Margin: % 3.0% 4.6% 4.3% 4.7% 5.2% 5.3% 5.3% 5.5%
EBITDA Margin: % 5.1% 6.4% 6.3% 6.8% 7.2% 7.2% 7.2% 7.2%
Net Margin: % 1.7% 3.3% 3.0% 3.4% 3.9% 4.0% 4.1% 4.3%

Effective Tax Rate: % 29.8% 23.7% 25.0% 22.0% 22.0% 22.0% 22.0% 22.0%

Depreciation % Revenue: % 1.6% 1.4% 1.5% 1.5% 1.5% 1.4% 1.4% 1.3%
CapEx % Revenue: % 1.9% 1.5% 2.5% 2.0% 1.9% 1.8% 1.7% 1.6%

Amortization % Revenue: % 0.5% 0.4% 0.5% 0.6% 0.5% 0.5% 0.5% 0.4%
Acquisitions % Revenue: % 1.1% 0.6% 3.4% 1.5% 1.4% 1.3% 1.2% 1.1%
Merger Model - Builders FirstSource, Inc. and BMC Stock Holdings - Synergy Estimates
($ in Millions Except Per Share and Per Unit Data)

Projected:
Synergy Assumptions: Units: FY20 FY21 FY22 FY23 FY24 FY25

Integration Costs % Year 3 Cost Synergies: % 100.0%

Total Merger & Integration Costs: $M 140.6
Annual Recognition % % 66.7% 33.3% 0.0% 0.0%

Risk-Free Rate: % 0.74%

Equity Risk Premium: % 5.00%
Historical Levered Beta: # 2.63

Acquirer - Cost of Equity: % 13.9%

Acquirer - Pre-Tax Cost of Debt: % 6.7%

Acquirer - % Equity: % 67.0%
Acquirer - % Debt: % 33.0%

Acquirer's WACC: % 11.0%

After-Tax Synergy Long-Term Growth: % 1.0%

Target - Revenue Synergies Based on % Increases: FY20 FY21 FY22 FY23 FY24 FY25

Lumber & Lumber Sheet Goods: % 10.0% 15.0% 20.0% 25.0%

(+) Additional Revenue: $M 122.5 193.0 270.1 354.6

(-) Additional Cost of Sales: $M (89.6) (141.2) (198.0) (260.2)
(-) Additional Operating Expenses: $M (24.1) (37.7) (52.5) (68.6)
Additional Operating Income: $M 8.9 14.0 19.6 25.7

Windows, Doors & Millwork: % 10.0% 20.0% 30.0% 40.0%

(+) Additional Revenue: $M 122.6 252.5 390.1 535.7

(-) Additional Cost of Sales: $M (89.6) (184.8) (285.9) (393.2)
(-) Additional Operating Expenses: $M (24.1) (49.3) (75.8) (103.7)
Additional Operating Income: $M 8.9 18.3 28.3 38.8

Total Revenue Synergies: $M 245.1 445.4 660.2 890.3

Cost of Revenue Synergies: $M (179.2) (326.1) (483.9) (653.5)
Operating Expenses on Revenue Synergies: $M (48.2) (87.0) (128.4) (172.3)

Target - Cost Synergies and Merger & Integration Costs: FY20 FY21 FY22 FY23 FY24 FY25

Target - Reduction in Force: # People 400 500 600 600

SG&A Spending per Employee: $ as Stated 75,678 77,191 78,735 80,310
Target - Cost Savings: $M 30.3 38.6 47.2 48.2

Acquirer - Reduction in Force: # People 500 750 900 900

SG&A Spending per Employee: $ as Stated 99,677 101,670 103,704 105,778
Acquirer - Cost Savings: $M 49.8 76.3 93.3 95.2

Total SG&A Cost Savings: $M 80.1 114.8 140.6 143.4

Merger & Integration Costs: $M 93.7 46.9 - -

Value of Synergies to Acquirer: FY20 FY21 FY22 FY23 FY24 FY25

After-Tax Cash Flow from Synergies: $M - 3.2 78.2 147.0 162.2 163.8
Terminal Value of Synergies: $M 1,646.8

Present Value of Synergies: $M 1,218.1

Equity Purchase Premium: $M 304.3
Merger Model - Builders FirstSource, Inc. and BMC Stock Holdings - Balance Sheet Combination
($ in Millions Except Per Share and Per Unit Data)

Acquirer Target Pro-Forma Adjustments: Projected

Balance Sheet Combination: Units: FY20 FY20 Debit Credit FY20
ASSETS:
Current Assets:
Cash & Cash Equivalents: $M $ 422.0 $ 205.1 $ - $ (436.1) $ 190.9
Accounts Receivable: $M 771.8 350.5 - - 1,122.3
Inventory & Other Current Assets: $M 668.3 445.7 - - 1,114.0
Total Current Assets: $M 1,862.0 1,001.3 2,427.2

Long-Term Assets:
Net Plants, Property & Equipment: $M 853.5 411.1 41.1 - 1,305.7
Operating Lease Assets: $M 325.6 152.6 - - 478.2
Goodwill: $M 769.0 297.1 855.3 (297.1) 1,624.3
Other Intangible Assets: $M 104.3 162.0 1,020.7 - 1,287.0
Other Long-Term Assets: $M 22.2 8.3 - - 30.5
Total Long-Term Assets: $M 2,074.7 1,031.1 4,725.7

TOTAL ASSETS: $M $ 3,936.7 $ 2,032.4 $ 7,152.9

LIABILITIES & EQUITY:

Current Liabilities:
Accounts Payable: $M $ 490.9 $ 176.6 - - 667.5
Accrued Expenses & Other: $M 346.8 165.5 - - 512.3
Total Current Liabilities: $M 837.8 342.1 1,179.9

Long-Term Liabilities:
Existing Debt: $M 1,615.6 336.4 (336.4) 336.4 1,951.9
New Transaction Debt: $M - - (23.9) 1,195.2 1,171.3
Operating Lease Liabilities: $M 331.6 159.6 - - 491.2
Net Deferred Tax Liability (DTL): $M 35.0 17.7 (17.7) 233.6 268.5
Other Long-Term Liabilities: $M 52.2 60.5 - - 112.8
Total Long-Term Liabilities: $M 2,034.3 574.2 3,995.7

Total Liabilities: $M $ 2,872.1 $ 916.3 $ 5,175.6

Common Shareholders' Equity: $M $ 1,064.6 $ 1,116.1 (1,151.3) 947.9 1,977.3

TOTAL LIABILITIES & EQUITY: $M $ 3,936.7 $ 2,032.4 $ 7,152.9

Balance Sheet Check: OK! OK! OK!

Relative Contribution Analysis - Builders FirstSource, Inc. and BMC Stock Holdings
($ in Millions Except Per Share and Per Unit Data)

Target - Equity Value and Enterprise Value: Acquirer - Equity Value and Enterprise Value:

Purchase Equity Value: Current Equity Value:

(-) Cash & Cash-Equivalents: (-) Cash & Cash-Equivalents:
(-) Equity Investments & Non-Core Assets: (-) Equity Investments & Non-Core Assets:
(+) Total Debt & Finance Leases: (+) Total Debt & Finance Leases:
(+) Preferred Stock: (+) Preferred Stock:
(+) Noncontrolling Interests & Other: (+) Noncontrolling Interests & Other:
Purchase Enterprise Value: Current Enterprise Value:

Combined Implied
Relative Contribution Analysis: Contribution ($): Contribution (%): Pro-Forma Value: Target Value: Implied Figures in 100% Stock Deal:
Enterprise Equity Enterprise Equity Exchange Purchase Variance to
Equity Value: Acquirer: Target: Pro-Forma: Acquirer: Target: Value: Value: Value: Value: Ratio: Price: Offer Price:
Undisturbed Equity Value:
Pro-Forma Ownership @ 13.7% Premium:

Revenue:
Combined Year 1 - 2021-12-31:
Combined Year 2 - 2022-12-31:

EBIT:
Combined Year 1 - 2021-12-31:
Combined Year 2 - 2022-12-31:

EBITDA:
Combined Year 1 - 2021-12-31:
Combined Year 2 - 2022-12-31:

Net Income:
Combined Year 1 - 2021-12-31:
Combined Year 2 - 2022-12-31:

Balance Sheet Items as of Transaction Close Date (Ignores Acquisition Effects):

Total Assets:
Common Shareholders' Equity:

Data for Use in Charts: Acquirer: Target: Offer Price: Implied Price:
Common Shareholders' Equity:
Total Assets:
Net Income - Combined Year 2 - 2022-12-31:
Net Income - Combined Year 1 - 2021-12-31:
EBITDA - Combined Year 2 - 2022-12-31:
EBITDA - Combined Year 1 - 2021-12-31:
EBIT - Combined Year 2 - 2022-12-31:
EBIT - Combined Year 1 - 2021-12-31:
Revenue - Combined Year 2 - 2022-12-31:
Revenue - Combined Year 1 - 2021-12-31:

Current Deal Terms

Relative Contribution Analysis:

Revenue - Combined Year 1 - 2021-12-31:

Revenue - Combined Year 2 - 2022-12-31:

EBIT - Combined Year 1 - 2021-12-31:

EBIT - Combined Year 2 - 2022-12-31:

EBITDA - Combined Year 1 - 2021-12-31:

EBITDA - Combined Year 2 - 2022-12-31:

Net Income - Combined Year 1 - 2021-12-31:

Net Income - Combined Year 2 - 2022-12-31:

Total Assets:

Common Shareholders' Equity:

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Acquirer Target
 Relative Contribution Analysis:

Revenue - Combined Year 1 - 2021-12-31:

Revenue - Combined Year 2 - 2022-12-31:

EBIT - Combined Year 1 - 2021-12-31:

EBIT - Combined Year 2 - 2022-12-31:

EBITDA - Combined Year 1 - 2021-12-31:

EBITDA - Combined Year 2 - 2022-12-31:

Net Income - Combined Year 1 - 2021-12-31:

Net Income - Combined Year 2 - 2022-12-31:

Total Assets:

Common Shareholders' Equity:

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Acquirer Target

Offer Price vs. Implied Price per Share Based on Relative Contribution:
$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$0.00
Common Shareholders' Total Assets: Net Income - Combined Year Net Income - Combined Year EBITDA - Combined Year 2 - EBITDA - Combined Year 1 - EBIT - Combined Year 2 - EBIT - Combined Year 1 - Revenue - Combined Year 2 - Revenue - Combined Year 1 -
Equity: 2 - 2022-12-31: 1 - 2021-12-31: 2022-12-31: 2021-12-31: 2022-12-31: 2021-12-31: 2022-12-31: 2021-12-31:

Offer Price Implied Share Price

Value Creation Analysis - Builders FirstSource, Inc. and BMC Stock Holdings
($ in Millions Except Per Share and Per Unit Data)

Operating Statistics: Debt / Projected Projected

Share Diluted Equity Enterprise Total LTM Revenue EBITDA Revenue EBITDA
Company Name Ticker Price Shares Value Value Assets EBITDA LTM FY20 FY21 LTM FY20 FY21 Growth Growth
Standalone Entities:
Builders FirstSource, Inc. BLDR 3,764.7
BMC Stock Holdings BMCH 2,030.4

Closest Comparable Public Companies for Combined Entity:

Carrier Global Corporation CARR 31.03 866.2 26,878.2 36,541.2 24,176.0 4.7 x 17,183.0 16,305.6 17,405.9 2,550.0 2,348.3 2,740.9 6.7% 16.7%
W.W. Grainger, Inc. GWW 361.49 53.6 19,375.9 21,332.9 7,194.0 2.3 x 11,632.0 11,720.3 12,172.7 1,425.0 1,512.3 1,649.9 3.9% 9.1%

Adjustment for Synergies, Net of Merger & Integration Costs: -

Combined Entity - Post-Transaction and Acquisition Effects:

Valuation Statistics: Debt /

Equity Enterprise LTM TEV / Revenue TEV / EBITDA
Company Name Value Value EBITDA LTM FY20 FY21 LTM FY20 FY21
Standalone Entities: Metric BLDR CARR GWW BLDR + BMCH
Builders FirstSource, Inc. BLDR Projected Revenue Growth
BMC Stock Holdings BMCH Projected EBITDA Growth

Closest Comparable Public Companies for Combined Entity: Metric BLDR CARR GWW BLDR + BMCH
Carrier Global Corporation CARR Year 1 EBITDA
W.W. Grainger, Inc. GWW Year 2 EBITDA

Combined Entity - Post-Transaction and Acquisition Effects: Metric BLDR BLDR + BMCH
LTM TEV / EBITDA
Combined Entity - Implied Enterprise Value: FY 20 TEV / EBITDA
(+) Cash & Cash-Equivalents: FY 21 TEV / EBITDA
(+) Equity Investments & Non-Core Assets:
(-) Total Debt:
(-) Preferred Stock:
Combined Entity - Implied Equity Value:

Combined Entity - Diluted Share Count:

Combined Entity - Implied Share Price:

Buyer - Share Price Prior to Transaction:

Per-Share Value Created:

Per-Share Value of Equity Purchase Premium:

Sensitivity Analyses - Per-Share Value Created in Transaction:

Combined Entity - FY 21 TEV / EBITDA Multiple:

Year 1 Synergy Adjustment, Net of

Merger and Integration Costs

Combined Entity - FY 21 TEV / EBITDA Multiple:

Exchange Ratio:
 Value Creation Analysis - EBITDA of Buyer vs. Closest Peer Companies
vs. Combined Entity
$12

$10

$8

$6

$4

$2

$0
Year 1 EBITDA Year 2 EBITDA

Column R BLDR CARR GWW BLDR + BMCH

Value Creation Analysis - Buyer Standalone Share Price vs. Combined Entity Share Price Implied by Multiples of Closest
Peer Companies
$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$0.00
LTM TEV / EBITDA FY 20 TEV / EBITDA FY 21 TEV / EBITDA

Column R BLDR BLDR + BMCH

Comparable Companies - U.S.-Based Residential Building Material Suppliers and Distributors with LTM Revenue Between $1 Billion and $10 Billion USD
($ in Millions Except Per Share and Per Unit Data)

Operating Statistics: Capitalization Projected Projected

Equity Enterprise Revenue EBITDA Revenue EBITDA EBITDA Margin
Company Name Value Value LTM FY20 FY21 LTM FY20 FY21 Growth Growth LTM FY20 FY21
Beacon Roofing Supply, Inc. $ 2,239.9 $ 4,993.5 $ 6,956.0 $ 6,944.3 $ 7,147.0 $ 419.6 $ 442.3 $ 472.6 2.9% 6.8% 6.0% 6.4% 6.6%
BMC Stock Holdings, Inc. 2,215.8 2,304.6 3,755.6 3,941.6 4,166.2 252.8 267.8 298.9 5.7% 11.6% 6.7% 6.8% 7.2%
Builders FirstSource, Inc. 3,323.6 4,559.1 7,477.3 8,021.4 8,559.0 505.5 530.2 604.5 6.7% 14.0% 6.8% 6.6% 7.1%
Cornerstone Building Brands, Inc. 1,025.8 4,231.4 4,728.2 4,552.4 4,697.4 582.1 570.5 567.0 3.2% (0.6%) 12.3% 12.5% 12.1%
Fortune Brands Home & Security, Inc. 11,831.0 13,679.8 5,708.0 5,798.7 6,110.6 916.6 949.7 1,027.9 5.4% 8.2% 16.1% 16.4% 16.8%
Foundation Building Materials, Inc. 690.3 1,148.3 2,090.1 2,046.5 2,126.6 162.7 162.6 169.0 3.9% 3.9% 7.8% 7.9% 7.9%
Griffon Corporation 1,320.6 2,366.6 2,321.0 2,347.2 2,500.6 227.2 233.0 249.4 6.5% 7.0% 9.8% 9.9% 10.0%
JELD-WEN Holding, Inc. 2,155.9 3,351.8 4,132.0 4,118.6 4,301.9 325.8 429.1 472.5 4.5% 10.1% 7.9% 10.4% 11.0%
Masco Corporation 15,454.7 17,310.7 6,700.0 6,885.4 7,133.7 1,243.0 1,307.4 1,361.1 3.6% 4.1% 18.6% 19.0% 19.1%
Masonite International Corporation 2,277.0 2,881.5 2,134.3 2,173.8 2,298.1 285.2 352.4 382.7 5.7% 8.6% 13.4% 16.2% 16.7%
Owens Corning 7,553.5 10,420.5 6,801.0 6,677.7 7,076.2 1,180.0 1,153.7 1,300.1 6.0% 12.7% 17.4% 17.3% 18.4%
UFP Industries, Inc. 3,730.1 3,689.2 4,435.1 4,572.9 4,669.1 343.9 348.2 375.2 2.1% 7.7% 7.8% 7.6% 8.0%

Maximum $ 15,454.7 $ 17,310.7 $ 7,477.3 $ 8,021.4 $ 8,559.0 $ 1,243.0 $ 1,307.4 $ 1,361.1 6.7% 14.0% 18.6% 19.0% 19.1%
75th Percentile 4,686.0 6,350.2 6,725.3 6,729.6 7,090.6 665.7 665.3 710.4 5.8% 10.5% 14.0% 16.3% 16.7%
Median 2,258.5 3,960.3 4,581.7 4,562.7 4,683.2 381.8 435.7 472.5 4.9% 8.0% 8.8% 10.2% 10.5%
25th Percentile 1,947.0 2,752.8 3,396.9 3,543.0 3,749.8 277.1 328.1 356.1 3.5% 6.2% 7.5% 7.4% 7.8%
Minimum 690.3 1,148.3 2,090.1 2,046.5 2,126.6 162.7 162.6 169.0 2.1% (0.6%) 6.0% 6.4% 6.6%

Valuation Statistics: Capitalization Enterprise Value / Enterprise Value /

Equity Enterprise Revenue EBITDA
Company Name Value Value LTM FY20 FY21 LTM FY20 FY21
Beacon Roofing Supply, Inc. $ 2,239.9 $ 4,993.5 0.7 x 0.7 x 0.7 x 11.9 x 11.3 x 10.6 x
BMC Stock Holdings, Inc. 2,215.8 2,304.6 0.6 x 0.6 x 0.6 x 9.1 x 8.6 x 7.7 x
Builders FirstSource, Inc. 3,323.6 4,559.1 0.6 x 0.6 x 0.5 x 9.0 x 8.6 x 7.5 x
Cornerstone Building Brands, Inc. 1,025.8 4,231.4 0.9 x 0.9 x 0.9 x 7.3 x 7.4 x 7.5 x
Fortune Brands Home & Security, Inc. 11,831.0 13,679.8 2.4 x 2.4 x 2.2 x 14.9 x 14.4 x 13.3 x
Foundation Building Materials, Inc. 690.3 1,148.3 0.5 x 0.6 x 0.5 x 7.1 x 7.1 x 6.8 x
Griffon Corporation 1,320.6 2,366.6 1.0 x 1.0 x 0.9 x 10.4 x 10.2 x 9.5 x
JELD-WEN Holding, Inc. 2,155.9 3,351.8 0.8 x 0.8 x 0.8 x 10.3 x 7.8 x 7.1 x
Masco Corporation 15,454.7 17,310.7 2.6 x 2.5 x 2.4 x 13.9 x 13.2 x 12.7 x
Masonite International Corporation 2,277.0 2,881.5 1.4 x 1.3 x 1.3 x 10.1 x 8.2 x 7.5 x
Owens Corning 7,553.5 10,420.5 1.5 x 1.6 x 1.5 x 8.8 x 9.0 x 8.0 x
UFP Industries, Inc. 3,730.1 3,689.2 0.8 x 0.8 x 0.8 x 10.7 x 10.6 x 9.8 x

Maximum $ 15,454.7 $ 17,310.7 2.6 x 2.5 x 2.4 x 14.9 x 14.4 x 13.3 x

75th Percentile 4,686.0 6,350.2 1.4 x 1.4 x 1.3 x 11.0 x 10.8 x 10.0 x
Median 2,258.5 3,960.3 0.9 x 0.9 x 0.8 x 10.2 x 8.8 x 7.9 x
25th Percentile 1,947.0 2,752.8 0.7 x 0.7 x 0.7 x 9.0 x 8.1 x 7.5 x
Minimum 690.3 1,148.3 0.5 x 0.6 x 0.5 x 7.1 x 7.1 x 6.8 x
Precedent Transactions - U.S.-Based Building Material Suppliers and Distributors with Transaction Enterprise Values Above $1 Billion USD
Announced Between January 1st, 2014 and August 26th, 2020
($ in Millions Except Per Share and Per Unit Data)

BMC Stock Holdings - Comparable M&A Transactions: Valuation Multiples

Transaction EV / EV / Premium - Premium -
Announcement Enterprise LTM LTM LTM LTM 1 Day 1 Month
Acquirer Name Target Name Date Value Revenue EBITDA Revenue EBITDA Prior Prior
CertainTeed Gypsum & Ceiling USA, Inc. Continental Building Products, Inc. 2019-11-12 $ 1,437.8 $ 514.4 $ 132.0 2.8 x 10.9 x 15.6% 32.7%
Cornerstone Building Brands, Inc. Ply Gem Parent, LLC 2018-07-17 3,606.5 2,651.0 554.0 1.4 x 6.5 x N/A N/A
Reece Limited MORSCO Inc. 2018-05-07 1,440.0 1,715.9 100.2 0.8 x 14.4 x N/A N/A
Gebr. Knauf KG USG Corporation 2018-03-26 6,937.3 3,223.0 528.0 2.2 x 13.1 x 29.8% 26.7%
Clayton, Dubilier & Rice, LLC Ply Gem Midco, Inc. 2018-01-31 2,260.6 2,056.3 227.5 1.1 x 9.9 x 19.6% 17.0%
Melrose Industries PLC Nortek Inc. 2016-07-06 2,732.0 2,548.5 277.1 1.1 x 9.9 x 37.6% 74.1%
Builders FirstSource, Inc. ProBuild Holdings, Inc. 2015-04-13 1,820.0 4,400.0 190.0 0.4 x 9.6 x N/A N/A
Oak Hill Capital Partners; CCMP Capital Advisors, LP The Hillman Companies, Inc. 2014-05-19 1,475.0 712.5 115.4 2.1 x 12.8 x N/A N/A

Maximum $ 6,937.3 $ 4,400.0 $ 554.0 2.8 x 14.4 x 37.6% 74.1%

75th Percentile 2,950.6 2,794.0 339.8 2.1 x 12.9 x 31.8% 43.1%
Median 2,040.3 2,302.4 208.8 1.2 x 10.4 x 24.7% 29.7%
25th Percentile 1,466.3 1,465.1 127.8 1.0 x 9.8 x 18.6% 24.3%
Minimum 1,437.8 514.4 100.2 0.4 x 6.5 x 15.6% 17.0%
BMC Stock Holdings - Discounted Cash Flow Analysis and IRR vs. Discount Rate
($ in Millions Except Per Share and Per Unit Data)

DCF Assumptions & Output:

Discount Rate (WACC): Terminal Value - Multiples Method: Terminal Value - Perpetuity Growth Method:

Median Forward EV / EBITDA of Comps: Expected Long-Term GDP Growth:

Current Equity Value:
(-) Cash & Cash-Equivalents: Baseline Terminal EBITDA Multiple: Baseline Terminal FCF Growth Rate:
(-) Financial Investments:
(-) Equity Investments: Baseline Terminal Value: Baseline Terminal Value:
(-) Other Non-Core Assets, Net: Implied Terminal FCF Growth Rate: Implied Terminal EBITDA Multiple:
(-) Net Operating Losses:
(+) Total Debt & Finance Leases: (+) PV of Terminal Value: (+) PV of Terminal Value:
(+) Preferred Stock: (+) Sum of PV of Free Cash Flows: (+) Sum of PV of Free Cash Flows:
(+) Operating Leases: Implied Enterprise Value: Implied Enterprise Value:
(+) Noncontrolling Interests:
(+) Unfunded Pensions: % of Implied TEV from Terminal Value: % of Implied TEV from Terminal Value:
Current Enterprise Value:
(+) Cash & Cash-Equivalents: (+) Cash & Cash-Equivalents:
(+) Financial Investments: (+) Equity Investments:
(+) Equity Investments: (+) Other Non-Core Assets, Net:
(+) Other Non-Core Assets, Net: (+) Net Operating Losses:
(+) Net Operating Losses: (-) Total Debt:
(-) Total Debt & Finance Leases: (-) Preferred Stock:
(-) Preferred Stock:
(-) Operating Leases: (-) Noncontrolling Interests:
(-) Noncontrolling Interests: (-) Unfunded Pension Obligations:
(-) Unfunded Pensions: (-) Restructuring & Other Liabilities:
Implied Equity Value: Implied Equity Value:

Diluted Shares Outstanding: Diluted Shares Outstanding:

Implied Share Price from DCF: Implied Share Price from DCF:
Premium / (Discount) to Current: Premium / (Discount) to Current:
 Historical: Projected:
Unlevered Free Cash Flow Projections: Units: FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

Total Revenue: $M
Growth Rate: %

Earnings Before Interest & Taxes (EBIT): $M

EBIT Margin: %

(-) Taxes, Excluding Effect of Interest: $M

Net Operating Profit After Tax (NOPAT): $M

Adjustments for Non-Cash Charges:

(+) Depreciation & Amortization: $M
% Revenue: %

(+/-) Deferred Income Taxes: $M

% Book Taxes: %

Net Change in Working Capital:

(+/-) Change in Accounts Receivable: $M
(+/-) Change in Inventory & Other Current Assets: $M
(+/-) Change in Operating Lease Assets: $M
(+/-) Changes in Other Assets and Liabilities: $M
(+/-) Change in Accounts Payable: $M
(+/-) Change in Accrued Liabilities: $M
(+/-) Change in Operating Lease Liabilities: $M
(+/-) Net Change in Working Capital: $M
% Change in Revenue: %

(-) Capital Expenditures & Acquisitions: $M

% Revenue: %

Annual Unlevered Free Cash Flow: $M

Growth Rate: %

PV of Unlevered FCF: $M

EBITDA: $M
Growth Rate: %
Sensitivity Tables:

Sensitivity - Terminal FCF Growth Rate vs. Discount Rate and Implied Share Price from DCF Analysis:

Terminal FCF Growth Rate:

Discount Rate (WACC):

Sensitivity - Terminal EBITDA Multiple vs. Discount Rate and Implied Share Price from DCF Analysis:

Terminal EBITDA Multiple:

Discount Rate (WACC):

IRR vs. Discount Rate: Units: FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

Purchase Enterprise Value: $M

Acquirer's WACC: %
Long-Term Growth Rate of Synergies: %

Unlevered Free Cash Flow of Target: $M

After-Tax Cash Flow from Synergies: $M
Terminal Value of Target UFCF: $M
Terminal Value of Synergies: $M
Total Unlevered FCF from Deal: $M

Internal Rate of Return (IRR): %

Sensitivity - Internal Rate of Return (IRR) on Acquisition vs. Purchase Enterprise Value and Acquirer's WACC:

Purchase Enterprise Value:

Acquirer's WACC:
WACC Analysis - BMC Stock Holdings
($ in Millions Except Per Share and Per Unit Data)

Discount Rate Calculations - Assumptions:

Risk-Free Rate: 0.74%
Equity Risk Premium: 5.00%
Pre-Tax Cost of Debt: 5.97%
Cost of Preferred Stock: –

Comparable Companies - Unlevered Beta Calculation:

Levered Preferred Equity Unlevered
Name Beta Debt % Debt Stock % Preferred Value % Equity Tax Rate Beta
Beacon Roofing Supply, Inc. 1.94 $ 3,373 56.1% $ 399 6.6% $ 2,240 37.3% 24.1% 0.84
Cornerstone Building Brands, Inc. 2.21 3,689 78.2% - – 1,026 21.8% 23.4% 0.59
Fortune Brands Home & Security, Inc. 1.78 2,246 16.0% - – 11,831 84.0% 25.0% 1.56
Foundation Building Materials, Inc. 1.64 489 41.5% - – 690 58.5% 23.8% 1.07
Griffon Corporation 2.24 1,121 45.9% - – 1,321 54.1% 32.6% 1.42
JELD-WEN Holding, Inc. 2.82 1,654 43.4% - – 2,156 56.6% 23.6% 1.78
Masco Corporation 1.51 2,772 15.2% - – 15,455 84.8% 25.2% 1.33
Masonite International Corporation 1.78 792 25.8% - – 2,277 74.2% 26.1% 1.42
Owens Corning 1.59 3,410 31.1% - – 7,554 68.9% 31.5% 1.21
UFP Industries, Inc. 1.58 164 4.2% - – 3,730 95.8% 24.2% 1.53

Median: 1.78 $ 1,950 36.3% $ - – $ 2,258 63.7% 24.6% 1.37

BMC Stock Holdings 1.86

BMC Stock Holdings - Levered Beta & WACC Calculation:

Unlevered Preferred Equity Levered
Beta Debt % Debt Stock % Preferred Value % Equity Tax Rate Beta
Current Capital Structure: 1.37 $ 360 14.0% $ - – $ 2,216 86.0% 22.0% 1.55
"Optimal" Capital Structure: 1.37 935 36.3% - – 1,641 63.7% 22.0% 1.98

Cost of Equity Based on Comparables, Current Capital Structure: 8.48%

Cost of Equity Based on Comparables, "Optimal" Capital Structure: 10.66%
Cost of Equity Based on Historical Beta: 10.04%

WACC = Cost of Equity * % Equity + Cost of Debt * % Debt * (1 - Tax Rate) + Cost of Preferred Stock * % Preferred Stock

WACC, Current Capital Structure: 7.94%

WACC, Current Capital Structure and Historical Cost of Equity: 9.29%
WACC, "Optimal" Capital Structure: 8.48%

Average WACC Produced by All Methods: 8.57%