EX-99.(C)(7) 3 d518660dex99c7.htm EX-99.(C)(7) EX-99.(c)(7)
MARCH
27, 2013
Project Care
Board Discussion Materials
Exhibit (c)(7)
PRIVATE
AND
CONFIDENTIAL

1
PRIVATE
AND
CONFIDENTIAL
This presentation has been prepared for the Special Committee (the “Special Committee”) of the Board of Directors (the “Board of Directors”)
and the Board of Directors of American Greetings Corporation (the “Company”) by Peter J. Solomon Company, L.P. (“PJSC”) from materials
and
information
supplied
(whether
orally
or
in
writing)
by
or
on
behalf
of
the
Company
and
from
publicly
available
information.
We
have
relied
upon the accuracy and completeness of the foregoing information and have not assumed any responsibility for any independent verification of
such
information
or
any
independent
valuation
or
appraisal
of
any
of
the
assets
or
liabilities
of
the
Company.
This
presentation
is
for
discussion
purposes
only
and
is
incomplete
without
reference
to,
and
should
be
viewed
only
in
conjunction
with,
the
oral
briefing
provided
by
PJSC.
This presentation includes certain statements, estimates and projections provided by the Company with respect to anticipated future
performance of the Company.  We have assumed such statements, estimates and projections have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of management of the Company as to the future financial performance of the
Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the
Company's
management.
These
assumptions
and
judgments
may
or
may
not
be
correct,
and
there
can
be
no
assurance
that
any
projected
results are attainable or will be realized.  PJSC has not attempted to verify any such statements, estimates and projections, and as such PJSC
makes no representation or warranty as to, and assumes no responsibility for, their accuracy or completeness and for the effect which any
such inaccuracy or incompleteness may have on the results or judgments contained in this presentation.
Except where otherwise indicated, this analysis speaks only as of the date hereof.  Under no circumstances should the delivery of this
document
imply
that
the
analysis
would
be
the
same
if
made
as
of
any
other
date.
Actual
results
may
vary
from
the
estimates
and
projections
contained herein and such variations may be material.
THIS PRESENTATION HAS BEEN DELIVERED FOR THE INFORMATION AND ASSISTANCE OF THE SPECIAL COMMITTEE AND THE
BOARD OF DIRECTORS IN ITS CAPACITY AS SUCH.  IT IS NOT INTENDED TO BE USED OR RELIED UPON, AND SHOULD NOT BE
USED OR RELIED UPON, BY ANY OTHER PERSON.
THIS PRESENTATION IS CONFIDENTIAL AND SHOULD NOT, WITHOUT PRIOR WRITTEN CONSENT OF PJSC, BE COPIED OR MADE
AVAILABLE TO ANY PERSON OTHER THAN THE SPECIAL COMMITTEE OR THE BOARD OF DIRECTORS PRIOR TO SUCH TIME, IF
ANY, AS IT MAY BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
PJSC SHALL NOT HAVE LIABILITY, WHETHER DIRECT OR INDIRECT, IN CONTRACT OR TORT OR OTHERWISE, TO ANY PERSON
IN CONNECTION WITH THIS PRESENTATION.

2
PRIVATE
AND
CONFIDENTIAL
Table of Contents
Section
I
Summary Transaction Overview
3
II
Summary Financial Performance
6
III
Summary Stock Price Performance
16
IV
Summary Valuation Analysis
20
Appendix
A
Supplemental Information
35

3
PRIVATE
AND
CONFIDENTIAL
Summary Transaction Overview

4
PRIVATE
AND
CONFIDENTIAL
Summary Transaction Overview
(a)
Represents closing price as of 9/25/12, unaffected for announcement of offer of $17.18 per share, which was made after the market close.
(b)
Assumes
diluted
share
count
including
restricted
stock
units
and
performance
shares
and
treasury
stock
method
for
options
exercisable.
Includes
restricted
stock
units
anticipated
to
be
awarded
in
May 2013, per
Management guidance.
(c)
Source: Preliminary debt and cash for FY2013 (2/28/13), per Management on 3/25/13.
(d)
Source: Management Treasury Model dated 11/30/12, with certain adjustments based on Management guidance.
(e)
Source: Management Treasury Model dated 11/30/12.
The Weiss Family has offered to acquire the remaining shares of Care that it does not own for $[   ] per share; the Weiss
Family’s initial offer price was $17.18 (the “Initial Offer”), made on 9/25/12 and its revised offer price was $17.50 per share (the
“Revised Offer”) made on 1/17/13
The
Weiss
Family
has
stated
that
it
has
no
intention
to
sell
any
of
its
interest
in
the
Company,
for
which
it
has
discretion,
or
vote
in
favor
of
any
alternative
sale,
merger
or
similar
transaction
involving
the
Company
(Amounts in Millions, Except Per Share Data)
Cash Purchase
Price Per Share
Illustrative Share Prices
$17.50
$17.75
$18.00
$18.25
$18.50
$18.75
Premium / Discount to:
Price
Date
Closing Stock Price:
$16.24
(03/25/13)
7.8%
9.3%
10.8%
12.4%
13.9%
15.5%
Unaffected Share Price Prior to Initial Offer
(a)
:
14.34
(09/25/12)
22.0%
23.8%
25.5%
27.3%
29.0%
30.8%
30 Calendar Days Prior to Initial Offer:
14.25
(08/27/12)
22.8%
24.6%
26.3%
28.1%
29.8%
31.6%
52-Week Low Prior to Initial Offer:
12.50
(01/04/12)
40.0%
42.0%
44.0%
46.0%
48.0%
50.0%
52-Week High Prior to Initial Offer:
19.50
(09/27/11)
(10.3%)
(9.0%)
(7.7%)
(6.4%)
(5.1%)
(3.8%)
Diluted Share Count
(b)
34.2
34.2
34.2
34.2
34.2
34.2
Implied Equity Value
$598.0
$606.6
$615.2
$623.8
$632.5
$641.2
Plus: Debt
(c)
286.4
286.4
286.4
286.4
286.4
286.4
Less: Cash
(c)
(86.1)
(86.1)
(86.1)
(86.1)
(86.1)
(86.1)
Implied Enterprise Value
$798.3
$806.9
$815.5
$824.1
$832.8
$841.5
Implied Enterprise Value as a Multiple of:
Adjusted EBITDA
FY13E
(d)
$201.0
4.0
x
4.0
x
4.1
x
4.1
x
4.1
x
4.2
x
FY14E
(e)
208.5
3.8
3.9
3.9
4.0
4.0
4.0

5
PRIVATE
AND
CONFIDENTIAL
Form of Transaction
Structure &
Consideration
•
Merger of Merger Sub, a direct wholly owned subsidiary of Parent, with and into Care with Care surviving the Merger as a
wholly owned subsidiary of Parent
•
$[   ]
per share in cash
Weiss Family Rollover
•
Certain Weiss Family shareholders will contribute (or “rollover”) their shares in Care to Parent in connection with the Merger
Guaranty and Voting
Agreement
•
Certain members of the Weiss Family will enter into a guaranty and voting agreement in favor of Care
•
Guaranty capped at $[  ] million
Merger Agreement
•
Sullivan & Cromwell has provided a separate summary of the material terms of the Merger Agreement
Financing Sources (a)
•
$225mm rollover of existing Senior Notes
•
$14mm in cash from the balance sheet
•
Plus committed financing and available credit facilities
•
$200mm New Revolving Credit Facility (undrawn at close)
•
$400mm Term Loan B
•
$240mm New HoldCo Preferred Equity (potential to issue up to $255mm)
•
$40mm Weiss Family Rollover Equity
Summary of Selected Transaction Terms
(a) Source: Management. Preliminary sources of funds as of 3/26/13.

6
PRIVATE
AND
CONFIDENTIAL
Summary Financial Performance

7
PRIVATE
AND
CONFIDENTIAL
Historical Financials
Source: Company’s Forms 10-K for the fiscal years ended 2/28/09, 2/28/10, 2/28/11 and 2/29/12, and Form 10-Q for the period ended 11/23/12, with certain adjustments for FY2010-FY2012 and LTM for period
ended 11/23/12, including certain reclassifications of Depreciation and Amortization for FY2012 and LTM for period ended 11/23/12, based on Management guidance.
CAGR = Compounded Annual Growth Rate.
(a)
Defined as Cash Flow from Operations less Capital Expenditures.
Margins
(Amounts in Millions, Except Per Share Data)
Fiscal Year Ended February 28,
LTM
FY09-FY12
FY10-FY12
2009
2010
2011
2012
Nov-12
CAGR
CAGR
Total Revenue
$1,690.7
$1,640.9
$1,597.9
$1,695.1
$1,750.0
0.1%
1.6%
Cost of Goods Sold
810.0
713.1
682.4
741.6
775.6
Gross Profit
880.8
949.5
915.5
953.5
974.4
2.7%
0.2%
EBIT
(253.2)
139.1
174.7
149.6
48.7
Net Income
(227.8)
81.6
87.0
57.2
(7.9)
Diluted Earnings Per Share
($4.89)
$2.03
$2.11
$1.42
($0.23)
EBIT
($253.2)
$139.1
$174.7
$149.6
$48.7
Goodwill Impairment
290.2
--
0.3
27.2
27.2
Transaction Adjustments
--
24.0
9.6
2.4
34.4
SBT and Other
(0.2)
25.5
5.7
2.3
21.4
Adjusted EBIT
36.8
188.6
190.3
181.4
131.6
70.2%
(1.9%)
D&A
50.0
45.2
41.0
43.7
46.8
Adjusted EBITDA
$86.8
$233.8
$231.4
$225.1
$178.4
37.4%
(1.9%)
Gross Margin
52.1
%
57.9
%
57.3
%
56.2
%
55.7
%
Adjusted EBITDA
5.1
14.2
14.5
13.3
10.2
Adjusted EBIT
2.2
11.5
11.9
10.7
7.5
Growth Rates
Total Revenue
(4.8)%
(3.0)
%
(2.6)%
6.1
%
4.9
%
Adjusted EBIT
(75.7)
412.9
0.9
(4.7)
(18.1)
Adjusted EBITDA
(56.6)
169.4
(1.0)
(2.7)
(12.8)
Diluted Earnings Per Share
NM
NM
3.9
(32.7)
NM
Summary Balance Sheet and Cash Flow Data
Cash
$60.2
$137.9
$215.8
$132.4
$63.3
Total Debt
390.2
329.7
232.7
225.2
356.8
Net Debt
330.0
191.8
16.9
92.7
293.5
Depreciation and Amortization
50.0
45.2
41.0
43.7
46.8
Capital Expenditures
(55.7)
(26.6)
(36.3)
(70.9)
(109.4)
Free Cash Flow (a)
17.3
170.9
143.5
45.6
70.1
Summary Leverage Statistics
Total Debt / Adj. EBITDA
4.5
x
1.4
x
1.0
x
1.0
x
2.0
x
Net Debt / Adj. EBITDA
3.8
0.8
0.1
0.4
1.6
(Adj. EBITDA -
Cap Ex) / Int. Expense
1.6
8.4
7.9
7.2
4.0

8
PRIVATE
AND
CONFIDENTIAL
$1,174
$1,099
$1,156
$1,222
$1,180
$1,147
$1,264
$1,197
$1,229
$1,239
$1,190
$1,185
$1,177
$1,000
$1,050
$1,100
$1,150
$1,200
$1,250
$1,300
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013E
FY2014E
FY2015E
FY2016E
$308
$235
$317
$188
$201
$141
$241
$193
$171
$166
$175
$167
$159
26.2%
21.4%
27.4%
15.4%
17.0%
12.3%
19.0%
16.2%
13.9%
13.4%
14.7%
14.1%
13.5%
10%
15%
20%
25%
30%
35%
40%
$50
$100
$150
$200
$250
$300
$350
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013E
FY2014E
FY2015E
FY2016E
Operating Income $mm
Operating Margin %
NAGCD Historical Financial Trends
Historical and Projected NAGCD Revenue
Source: Care Management.
(a)
Adjusted
to
normalize
for
the
Company’s
North
American
goodwill
impairment
in
FY2009
($47.9mm
addback)
and
FY2012
($21.3mm
addback)
and
the
sale
of
Amscan
Party
Goods
in
FY2010
(net
reduction of $18.4mm).
(Amounts in Millions)
Historical and Projected NAGCD Operating Income and Margin (a)
Includes Acquisitions of Papyrus and RPG
2010 Papyrus and
RPG Revenue: $129
NAGCD comprised approximately 68% of Care’s total revenue in FY2009 and is estimated to comprise approximately 67% of
Care’s total projected revenue in FY2013

9
PRIVATE
AND
CONFIDENTIAL
Evolution of Selected Key Metrics
(a)
Source: Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBITDA based on Management guidance.
(b)
Source: Company’s Form 10-Q for the periods ended 8/24/12 and 11/23/12, with certain adjustments to EBITDA, including certain reclassifications of Depreciation and Amortization, based on Management
guidance for the 8/24/12 and 11/23/12 LTM periods.
(c)
Source: Debt and cash per Management’s December FY2013 balance sheet.
(d)
Source: Debt and cash per Management’s January FY2013 balance sheet.
(e)
Source: 3/25/13 cash and debt balances represent preliminary debt and cash for FY2013 (2/28/13), per Management on 3/25/13.
LTM
FY 2013E (a)
As of
Treasury Model (As Presented At Special Committee
Meetings on Dates Below)
Treasury
Model as of
8/24/12 (b)
11/23/12 (b)
12/28/12 (c)
1/31/13 (d)
10/26/12
11/19/12
12/07/12
01/27/13
3/25/13 (e)
Total Revenue
$1,708.2
$1,750.0
NA
NA
$1,830.2
$1,840.6
$1,840.6
$1,840.6
$1,840.6
EBITDA
192.4
178.4
NA
NA
182.8
183.5
196.1
195.6
201.0
Debt
$280.2
$356.8
$365.2
$300.2
$245.2
$245.2
$245.2
$245.2
$286.4
Cash
(61.7)
(63.3)
(61.6)
(97.8)
(62.1)
(61.9)
(39.3)
(39.3)
(86.1)
Net Debt
218.4
293.5
303.6
202.4
183.1
183.3
205.8
205.8
200.3

10
PRIVATE
AND
CONFIDENTIAL
Schedule of Adjustments
Source: Company’s Forms 10-K for the fiscal years ended 2/28/10, 2/28/11, and 2/29/12, and Company’s Form 10-Q for LTM period ended 11/23/12, with certain adjustments, including certain reclassifications of Depreciation
and Amortization for FY2012 and LTM for period ended 11/23/12, based on Management guidance; FY2013E based on Management Treasury Model dated 11/30/12, with certain adjustments based on Management guidance.
(Amounts in Millions)
Fiscal Year Ended February 28,
LTM
FYE 2/28,
2010
2011
2012
Nov-12
2013
Operating Income
$139.1
$174.7
$149.6
$48.7
$79.8
Depreciation & Amortization
45.2
41.0
43.7
46.8
45.5
Unadjusted EBITDA
$184.3
$215.8
$193.2
$95.4
$125.3
Charges Associated With Clinton Cards
--
--
--
34.5
35.2
Impairments, debt expense and fees
Party Goods Transaction
(18.4)
--
--
--
--
Gain on sale
Mexico Shutdown
18.2
--
--
--
--
Closing of Carlton Mexico
Retail Disposition
29.2
--
--
--
--
Sales of stores to Schurman
RPG Transaction Costs
--
10.3
--
--
--
Fees associated with purchase of RPG
Lawsuit
24.0
--
--
--
--
Settlement of a RPG lawsuit
Goodwill and Other Intangibles Impairment
--
0.3
27.2
27.2
--
Related to NAGCD, UK and Interactive
Gain from Sale of Intellectual Property
--
--
(4.5)
--
--
Sold certain minor character properties
Gain from Liquidation of Business in France
(3.3)
--
--
--
--
Currency translation adjustment from sale
Loss on Sale of WHQ
--
--
--
--
21.4
Estimated loss on sale of WHQ
One Time Legal Costs
--
--
--
10.5
6.0
Reversal of accrual for certain legal expenses
Voluntary Compliance Program
--
--
--
--
0.9
Related to prior years' underexpensing catch up
Webshots
(1.7)
(0.7)
2.4
(0.1)
(2.3)
Pro forma adjustment for sale of Webshots
Properties Licensing Termination Expense
--
--
--
2.1
2.1
Termination of Certain Agency Agreements
Proposed Going Private Transaction Costs
--
--
--
2.0
3.2
Current process costs
Scan-Based Trading
1.5
5.7
6.8
6.8
9.2
Impact of scan-based trading conversions
Total Adjustment
$49.5
$15.6
$31.9
$83.0
$75.7
Adjusted EBITDA
$233.8
$231.4
$225.1
$178.4
$201.0
Adjusted EBIT
188.6
190.3
181.4
131.6
155.5
Total Adjustments as a % of Unadjusted EBITDA
26.9%
7.2%
16.5%
86.9%
60.4%

11
PRIVATE
AND
CONFIDENTIAL
($203.2)
$184.3
$215.8
$188.8
$91.0
$125.3
$87.0
$227.6
$232.1
$217.2
$156.9
NA
$86.8
$233.8
$231.4
$225.1
$178.4
$201.0
($250)
($150)
($50)
$50
$150
$250
2009
2010
2011
2012
LTM Nov-12
Treasury Plan
2013E (c)
Unadjusted EBITDA
Public Adj. EBITDA (a)
Management Adj. EBITDA (b)
Historical Adjusted EBITDA as Publicly Reported vs. Management
Source: Company’s Forms 10-K for the fiscal years ended 2/28/09, 2/28/10, 2/28/11 and 2/29/12, and Company’s Form 10-Q for LTM period ended 11/23/12, including certain reclassifications of Depreciation and Amortization
for fiscal year ended 2/29/12 and LTM period ended 11/23/12 based on Management guidance.
(a)
Adjustment amounts per Company’s Forms 10-K and 8-K for the fiscal years ended 2/28/09, 2/28/10, 2/28/11 and 2/29/12, and Company’s Form 10-Q and 8-K for LTM period ended 11/23/12.
(b)
Source: Company’s Forms 10-K for the fiscal years ended 2/28/09, 2/28/10, 2/28/11 and 2/29/12, and Form 10-Q for the period ended 11/23/12, with certain adjustments for FY2010-FY2012 and LTM for period ended
11/23/12, including certain reclassifications of Depreciation and Amortization for FY2012 and LTM for period ended 11/23/12, based on Management guidance.
(c)
Source: Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBITDA based on Management guidance.
Unadjusted EBITDA /Adjusted EBITDA ($mm) as Publicly Reported and Management Adjusted EBITDA
Unadjusted
EBITDA
Adjusted
EBITDA (c)
Treasury
Growth Rates
2010
2011
2012
LTM Nov-12
Plan 2013E (c)
Unadjusted EBITDA
NM
17.1%
(12.5%)
(55.2%)
(33.6%)
Public Adj. EBITDA (a)
161.6%
2.0%
(6.4%)
(23.9%)
Management Adj. EBITDA (b)
169.4%
(1.0%)
(2.7%)
(12.4%)
(10.7%)

12
PRIVATE
AND
CONFIDENTIAL
$1,636
$1,695
$1,668
$1,794
$1,841
$1,693
$1,883
$1,665
$1,954
$1,701
$1,724
--
$500
$1,000
$1,500
$2,000
$2,500
FY11
Plan
FY12
Actual
FY11
Plan
FY12
Plan
Latest
Est.(a)
FY11
Plan
FY12
Plan
FY13
Plan
FY12
Plan
FY13
Plan
FY13
Plan
$184
$181
$196
$185
$155
$208
$160
$154
$204
$157
$169
$0
$50
$100
$150
$200
$250
FY11
Plan
FY12
Actual
FY11
Plan
FY12
Plan
Latest
Est.(a)
FY11
Plan
FY12
Plan
FY13
Plan
FY12
Plan
FY13
Plan
FY13
Plan
Evolution of Management Forecasts
Source: Company's Form 10-K for fiscal year ended 2/29/12 and Care Management Strategic Plans.
(a) Latest estimate based on Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBIT based on Management guidance.
Total Revenue
Total EBIT
FY2012
FY2013
FY2014
FY2015
FY2016
Clinton
Revenue
$233
FY2012
FY2013
FY2014
FY2015
FY2016

13
PRIVATE
AND
CONFIDENTIAL
Care Consolidated Financial Snapshot
Source: Company’s Forms 10-K for the fiscal years ended 2/29/08, 2/28/09, 2/28/10, 2/28/11 and 2/29/12, with certain adjustments, including certain reclassifications of Depreciation and Amortization for fiscal year ended
2/29/12, based on Management guidance. FY2013-FY2018 based on Management Treasury Model dated 11/30/12, with certain adjustments for FY2013E EBITDA based on Management guidance.
Total Revenue
Adjusted EBIT and EBITDA
11.3%
5.1%
14.2%
14.5%
13.3%
10.9%
10.8%
11.4%
11.9%
12.2%
12.5%
(76%)
413%
1%
(5%)
(14%)
(3%)
4%
4%
% Growth
4%
4%
8.5%
2.2%
11.5%
11.9%
10.7%
8.4%
7.8%
8.1%
8.4%
8.7%
9.0%
% Margin
$151
$37
$189
$190
$181
$155
$151
$157
$163
Adjusted EBIT
$170
$176
$1,776
$1,691
$1,641
$1,598
$1,695
$1,841
$1,935
$1,940
$1,945
$1,950
$1,955
$0
$500
$1,000
$1,500
$2,000
08A
09A
10A
11A
12A
13E
14E
15E
16E
17E
18E
% Margin
$200
$87
$234
$231
$225
$201
$208
$221
$231
$238
$244
$0
$50
$100
$150
$200
$250
08A
09A
10A
11A
12A
13E
14E
15E
16E
17E
18E
FY08 –
FY12 CAGR: 3.0%

14
PRIVATE
AND
CONFIDENTIAL
Care Consolidated Financial Snapshot
Source: Company’s Forms 10-K for the fiscal years ended 2/29/08, 2/28/09, 2/28/10, 2/28/11 and 2/29/12, and Management Treasury Model dated 11/30/12.
(a) Defined as Cash Flow from Operations less Capital Expenditures.
Capital Expenditures
Free Cash Flow (a)
3.2%
3.3%
1.6%
2.3%
4.2%
6.9%
8.7%
7.2%
2.4%
2.4%
2.4%
% of Revenue
$57
$56
$27
$36
$71
$128
$169
$139
$46
$46
$46
$0
$50
$100
$150
$200
08A
09A
10A
11A
12A
13E
14E
15E
16E
17E
18E
$187
$17
$171
$143
$46
$16
($9)
$35
$137
$138
$142
-$50
$0
$50
$100
$150
$200
08A
09A
10A
11A
12A
13E
14E
15E
16E
17E
18E

15
PRIVATE
AND
CONFIDENTIAL
Summary Projected Financials
Source: Management Treasury Model dated 11/30/12, with certain adjustments for FY2013E based on Management guidance.  FY2013 cash and debt balances are preliminary year end (2/28/13) amounts per Management on
3/25/13.
(a)
2013 net income and EPS unadjusted for non-recurring and extraordinary items; Management did not provide.
(b)
Defined as Cash Flow from Operations less Capital Expenditures.
(Amounts in Millions, Except Per Share Data)
Projected Fiscal Year Ended February 28,
FY13-FY18
2013E
2014E
2015E
2016E
2017P
2018P
CAGR
Total Revenue
$1,840.6
$1,935.1
$1,939.9
$1,944.8
$1,949.6
$1,954.5
1.2%
Gross Profit
1,028.9
1,083.6
1,088.3
1,093.0
1,097.6
1,102.3
1.4%
Adjusted EBITDA
201.0
208.5
221.4
230.5
238.0
244.2
4.0%
Adjusted EBIT
155.5
150.8
157.0
163.3
169.5
175.8
2.5%
Net Income (a)
37.3
83.4
87.8
91.4
95.4
99.4
21.7%
Diluted Earnings Per Share (a)
$1.10
$2.58
$2.67
$2.74
$2.81
$2.89
21.3%
Margins
Gross Profit
55.9
%
56.0
%
56.1
%
56.2
%
56.3
%
56.4
%
Adjusted EBITDA
10.9
10.8
11.4
11.9
12.2
12.5
Adjusted EBIT
8.4
7.8
8.1
8.4
8.7
9.0
Net Income as Reported
2.0
4.3
4.5
4.7
4.9
5.1
Growth Rates
Total Revenue
8.6
%
5.1
%
0.3
%
0.3
%
0.3
%
0.2
%
Adjusted EBITDA
(10.7)
3.7
6.2
4.1
3.2
2.6
Adjusted EBIT
(14.3)
(3.0)
4.2
4.0
3.8
3.7
Diluted Earnings Per Share
(22.4)
133.9
3.6
2.6
2.8
2.8
Summary Balance Sheet and Cash Flow Data
Cash
$86.1
$53.7
$82.0
$243.4
$361.3
$482.9
Total Debt
286.4
288.2
301.2
345.2
345.2
345.2
Net Debt
200.3
234.4
219.2
101.8
(16.1)
(137.7)
Depreciation and Amortization
45.5
57.7
64.4
67.2
68.4
68.4
Capital Expenditures
(127.8)
(169.2)
(139.1)
(46.0)
(46.0)
(46.0)
Free Cash Flow (b)
16.4
(9.5)
34.7
137.1
137.9
142.0
Leverage and Interest Coverage Ratios
Total Debt / Adj. EBITDA
1.4
x
1.4
x
1.4
x
1.5
x
1.5
x
1.4
x
Net Debt / Adj. EBITDA
1.0
1.1
1.0
0.4
NM
NM
(Adj. EBITDA -
CapEx) / Interest, Net
4.4
2.1
4.6
10.1
10.5
11.0

16
PRIVATE
AND
CONFIDENTIAL
Summary Stock Price Performance

17
PRIVATE
AND
CONFIDENTIAL
Summary Stock Price Performance
Five years prior to Initial Offer of $17.18
Source: Capital IQ as of 3/25/13.
Revised
Offer
$17.50
$16.24
Initial
Offer
$17.18
$17.50
1-Year Average
$15.06
2-Year Average
$18.49
3-Year Average
$19.39
5-Year Average
$17.38
4-Year Average
$16.88
Closing Stock Price Performance
Period Prior to
Initial Offer
Median
Mean
1-Year
$14.93
$15.06
2-Year
18.40
18.49
3-Year
20.25
19.39
4-Year
18.02
16.88
5-Year
18.49
17.38
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13

18
PRIVATE
AND
CONFIDENTIAL
$10.00
$15.00
$20.00
$25.00
$30.00
Sep-10
Dec-10
Feb-11
May-11
Jul-11
Oct-11
Dec-11
Feb-12
May-12
Jul-12
Oct-12
Dec-12
Mar-13
Revised
Offer
$17.50
Initial
Offer
$17.18
Summary Stock Price Performance
Two years prior to Initial Offer of $17.18
Source: Capital IQ as of 3/25/13. 
(a) Closing Price on 3/25/13.
(b) Represents closing price as of 9/25/12, unaffected for announcement of Initial Offer, which was made after the market close.
$16.24
$17.50
6-Month Average
$14.43
3-Month Average
$14.15
1-Year Average
$15.06
2-Year  Average
$18.49
Closing Stock Price History
$17.50 Revised Offer As
Price
Premium / (Discount)
Closing Stock Price (a)
$16.24
7.8%
Unaffected Share Price Prior to Initial Offer(b)
14.34
22.0%
30 Calendar Days Prior to Initial Offer
14.25
22.8%
52-Week Low Prior to Initial Offer
12.50
40.0%
52-Week High Prior to Initial Offer
19.50
(10.3%)

19
PRIVATE
AND
CONFIDENTIAL
19%
17%
25%
21%
15%
3%
0
5
10
15
20
25
30
35
40
Below
$13.50
$13.50 -
$14.49
$14.50 -
$15.49
$15.50 -
$16.49
$16.50 -
$17.49
$17.50 and
Above
Summary of Trading Ranges
Shares traded at various prices
Source: Capital IQ as of 3/25/13.
97% of shares that traded over the one-year period prior to the 9/25/12 Initial Offer traded below the $17.50 Revised Offer
2-Year
1-Year
(Period
ending
September
25,
2012,
except
for
“Since
9/25
Initial
Offer
of
$17.18”
chart)
180-Days
90-Days
30-Days
Since 9/25 Initial Offer (122 Days)
Avg. Daily Trading Vol. (000s)
535.8
Average Price:
$15.06
Avg. Daily Trading Vol. (000s)
361.5
Average Price:
$14.15
Avg. Daily Trading Vol. (000s)
328.0
Average Price:
$15.08
Avg. Daily Trading Vol. (000s)
409.3
Average Price:
$18.49
Avg. Daily Trading Vol. (000s)
475.3
Average Price:
$14.43
Avg. Daily Trading Vol. (000s)
340.1
Average Price:
$16.70
Total # of Shares Traded (mm)
41.5
% of Total Shares
122.4%
% of Public Float
136.4%
12%
11%
16%
14%
10%
36%
0
10
20
30
40
50
60
70
80
Below
$13.50
$13.50 -
$14.49
$14.50 -
$15.49
$15.50 -
$16.49
$16.50 -
$17.49
$17.50 and
Above
13%
29%
35%
23%
0%
0%
0
5
10
15
20
25
Below
$13.50
$13.50 -
$14.49
$14.50 -
$15.49
$15.50 -
$16.49
$16.50 -
$17.49
$17.50 and
Above
34%
35%
22%
9%
0%
0%
0
1
2
3
4
5
6
7
8
9
Below
$13.50
$13.50 -
$14.49
$14.50 -
$15.49
$15.50 -
$16.49
$16.50 -
$17.49
$17.50 and
Above
0%
28%
41%
30%
0%
0%
0
1
2
3
4
Below
$13.50
$13.50 -
$14.49
$14.50 -
$15.49
$15.50 -
$16.49
$16.50 -
$17.49
$17.50 and
Above
27%
21%
17%
16%
7%
11%
0%
0
2
4
6
8
10
12
14
Below
$16.70
$16.70-
$16.85
$16.86-
$17.00
$17.01-
$17.10
$17.11-
$17.17
$17.18-
$17.49
$17.50
and
Above

20
PRIVATE
AND
CONFIDENTIAL
Summary Valuation Analysis

21
PRIVATE
AND
CONFIDENTIAL
Unaffected Share
9/25/12
(a)
Includes
present
value
of
future
quarterly
dividend
payments
of
$0.15
per
share.
Summary Valuation Analysis
$14.34
$16.24
Revised Offer
1/17/13
Closing Stock Price
3/25/13
$12.50
$11.25
$14.06
$11.75
$12.50
$14.33
$16.01
$19.50
$19.00
$23.75
$20.50
$20.75
$20.47
$21.96
$10.00
$12.50
$15.00
$17.50
$20.00
$22.50
$25.00
52-Week Trading Range
Comparable Companies
25% Premium to Comparable
Companies
Precedent Transactions
Present Value of Future Share
Price (a)
Sum of the Parts
DCF

22
PRIVATE
AND
CONFIDENTIAL
Implied Share Price at Various Premia
Source:
Capital
IQ.
Note:
Historical
stock
prices
represent
market
close
values
based
on
calendar
days.
(a)
Represents
closing
price
as
of
9/25/12,
unaffected
for
announcement
of
Initial
Offer,
which
was
made
after
the
market
close.
Illustrative Premium Benchmarked to 9/25/12 -
Date of Initial Offer
30-Day Prior
1-Day Prior
30-Day Average
60-Day Average
90-Day Average
180-Day Average
1-Year Average
$14.25
$14.34 (a)
$15.08
$14.42
$14.15
$14.43
$15.06
$17.50
22.8%
22.0%
16.0%
21.4%
23.7%
21.3%
16.2%
17.75
24.6%
23.8%
17.7%
23.1%
25.4%
23.0%
17.9%
18.00
26.3%
25.5%
19.4%
24.8%
27.2%
24.7%
19.5%
18.25
28.1%
27.3%
21.0%
26.6%
29.0%
26.5%
21.2%
18.50
29.8%
29.0%
22.7%
28.3%
30.7%
28.2%
22.8%
18.75
31.6%
30.8%
24.3%
30.0%
32.5%
29.9%
24.5%
Illustrative Share Prices Benchmarked to 9/25/12 -
Date of Initial Offer
30-Day Prior
1-Day Prior
30-Day Average
60-Day Average
90-Day Average
180-Day Average
1-Year Average
$14.25
$14.34 (a)
$15.08
$14.42
$14.15
$14.43
$15.06
10%
$15.68
$15.77
$16.59
$15.86
$15.57
$15.87
$16.57
20%
17.10
17.21
18.10
17.30
16.98
17.32
18.07
30%
18.53
18.64
19.60
18.75
18.40
18.76
19.58
40%
19.95
20.08
21.11
20.19
19.81
20.20
21.08
50%
21.38
21.51
22.62
21.63
21.23
21.65
22.59

23
PRIVATE
AND
CONFIDENTIAL
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Care Historical EV / LTM EBITDA
From 2 years prior to offer
Source:
Capital
IQ.
Capital
IQ
calculation
of
enterprise
value
does
not
include
restricted
stock
units
or
performance
shares
and
may
have
different
adjustments
for
EBITDA
than
those
used
in
other
analyses
in this presentation.
Data as of 3/25/13.
(a)
Current
multiple
assumes
LTM
EBITDA
of
$178.4mm
and
net
debt
of
$293.5mm
for
the
period
ended
11/23/12
based
on
Company’s
Form
10-Q
dated
1/2/13,
with
certain
adjustments
to
LTM
EBITDA,
including
certain
reclassifications
of
Depreciation
and
Amortization
for
LTM
period
ended
11/23/12,
based
on
Management
guidance.
Current
multiple
calculated
using
diluted
share
count
including
restricted
stock units and
performance shares and treasury stock method of options exercisable. Includes restricted stock units anticipated to be awarded in May 2013, per Management guidance.
Initial
Offer
9/25/12
2-Year Average
3.5x
3 and 12-Month
Average
3.1x
6-Month Average
3.0x
Post-Offer
Average
4.5x
Revised
Offer
1/17/13
LTM EBITDA
decreased 7% from
Q2 to Q3
4.8x
(a)
1-Year Average
3.9x
Calendar Days
Prior to Initial Offer
Mean
Median
30 Days
3.2 x
3.2 x
60 Days
3.1 x
3.1 x
90 Days
3.1 x
3.1 x
6 Months
3.0 x
3.0 x
12 Months
3.1 x
3.1 x
18 Months
3.4 x
3.3 x
24 Months
3.5 x
3.5 x

24
PRIVATE
AND
CONFIDENTIAL
Valuation Matrix
(a)
Unaffected closing stock price on 9/25/12.
(b)
Closing stock price on 3/25/13.
(c)
Initial Offer on 9/25/12.
(d)
Revised Offer on 1/17/13.
(e)
Value communicated by Special Committee on 1/30/13.
(f)
Net
debt
of
$293.5mm
represents
total
debt
of
$356.8mm
less
cash
of
$63.3mm
as
of
11/23/12.
(g)
Net
debt
of
$200.3mm
represents
total
debt
of
$286.4mm
less
cash
of
$86.1mm
as
of
2/28/13.
Represents preliminary FY2013 year end cash and debt balances per Management on 3/25/13.
(h)
Assumes
diluted
share
count
including
restricted
stock
units
and
performance
shares
and treasury
stock method for options exercisable. Includes restricted stock units anticipated to be awarded in May
2013, per Management guidance.
(Amounts in Millions, except per share data)
LTM (11/23/12) Net Debt of $293.5M
(f)
FY2013 Net Debt of $200.3M
(g)
(i)   Source: Based on Company’s Form 10-Q dated 1/2/13 for period ended 11/23/12, with
adjustments for publicly disclosed extraordinary and non-recurring items included.
(j)   Source: Based on Company’s Form 10-Q dated 1/2/13 for period ended 11/23/12, with certain  
adjustments based on Management guidance.
(k)  Source: Based on Management Treasury Model dated 11/30/12, with certain adjustments for
FY2013E EBITDA based on Management guidance.
(l)   Source: Management preliminary sources of funds as of 3/26/13.
(m) Source: Management Treasury Model dated 11/30/12.
% Premium to
Unaffected
EV / LTM Adj. EBITDA
EV / FY2013E Adj. EBITDA
EV / FY2014E
Share
Stock Price
Market
Enterprise
"Public"
Management
Enterprise
Management
"Bank"
Adj. EBITDA
Price
on 9/25/12
Cap (h)
Value
$157
(i)
$178
(j)
Value
$201
(k)
$211
(l)
$208
(m)
$10.00
(30.3%)
$340
$634
4.0 x
3.6 x
$540
2.7 x
2.6 x
2.6 x
11.00
(23.3%)
375
668
4.3 x
3.7 x
575
2.9 x
2.7 x
2.8 x
12.00
(16.3%)
409
702
4.5 x
3.9 x
609
3.0 x
2.9 x
2.9 x
13.00
(9.3%)
443
737
4.7 x
4.1 x
644
3.2 x
3.1 x
3.1 x
14.34
(a)
--
489
783
5.0 x
4.4 x
690
3.4 x
3.3 x
3.3 x
15.00
4.6%
512
806
5.1 x
4.5 x
712
3.5 x
3.4 x
3.4 x
16.00
11.6%
546
840
5.4 x
4.7 x
747
3.7 x
3.5 x
3.6 x
16.24
(b)
13.2%
555
848
5.4 x
4.8 x
755
3.8 x
3.6 x
3.6 x
17.18
(c)
19.8%
587
881
5.6 x
4.9 x
787
3.9 x
3.7 x
3.8 x
17.50
(d)
22.0%
598
892
5.7 x
5.0 x
798
4.0 x
3.8 x
3.8 x
17.75
23.8%
607
900
5.7 x
5.0 x
807
4.0 x
3.8 x
3.9 x
18.00
25.5%
615
909
5.8 x
5.1 x
815
4.1 x
3.9 x
3.9 x
18.25
27.3%
624
917
5.8 x
5.1 x
824
4.1 x
3.9 x
4.0 x
18.50
29.0%
633
926
5.9 x
5.2 x
833
4.1 x
4.0 x
4.0 x
18.75
(e)
30.8%
641
935
6.0 x
5.2 x
842
4.2 x
4.0 x
4.0 x
19.00
32.5%
650
943
6.0 x
5.3 x
850
4.2 x
4.0 x
4.1 x
20.00
39.5%
685
978
6.2 x
5.5 x
885
4.4 x
4.2 x
4.2 x

25
PRIVATE
AND
CONFIDENTIAL
3.7 x
4.2 x
10.3 x
6.8 x
3.7 x
11.1 x
9.6 x
7.6 x
5.2 x
3.9 x
3.5 x
3.6 x
3.8 x
NA  
5.9 x
3.7 x
3.4 x
--
5.0 x
10.0 x
15.0 x
Unaffected
Multiple (a)
Current
Multiple (b)
Shutterfly
1-800
Flowers.com
CafePress
Iconix
Cherokee
Meredith
Barnes
& Noble (d)
hhgregg
Best Buy
GameStop
3.7 x
4.2 x
4.8 x
3.2 x
4.4 x
4.2 x
4.0 x
5.0 x
3.8 x
2.0 x
3.6 x
3.8 x
--
2.0 x
4.0 x
6.0 x
8.0 x
10.0 x
Unaffected
Multiple (a)
Current
Multiple (b)
CSS Industries
Blyth
Quad/Graphics
R.R. Donnelley &
Sons
Scholastic
PagesJaunes
Eniro AB
Yellow Media
Select Public Company Analysis
Enterprise Value / EBITDA
Source:
Companies’
stock
price
and
public
filings
as
of
3/25/13
for
companies
that
have
already
reported
for
LTM
and
CY12
(CSS
Industries,
Blyth,
Scholastic,
QuadGraphics,
R.R.
Donnelley
&
Sons,
PagesJaunes,
EniroAB,
Yellow
Media,
Shutterfly,
1-800
Flowers.com,
CafePress,
Iconix,
Meredith,
hhgregg,
Best
Buy).
Projected
CY12
EBITDA
for
companies
that
have
not
yet
reported
(Barnes
&
Noble,
GameStop) per ThomsonReuter's median estimate of Wall Street analysts as of 3/25/13.
Directories
Social Expression
Print Media
Care
Care
Selected E-Commerce (c)
Licensing
Selected Low-Growth Retail
Core Business Comps
Other Related Sector
Other Related Business Segments
EV / LTM EBITDA
EV / CY12 EBITDA
CY12 Median: 4.0x
LTM Median: 4.0x
CY12 Median: 4.2x
LTM Median: 4.2x
CY12 Median: 3.8x
LTM Median: 3.8x
CY12 Median: 6.8x
LTM Median: 6.8x
CY12 Median: 9.3x
LTM Median: 9.6x
CY12 Median: 3.7x
LTM Median: 3.8x
(a)
Unaffected
Multiple
calculated
using
Care’s
share
price
of
$14.34
as
of
9/25/12
and
net
debt
as
of
8/24/12
of
$218.4mm.
Pre-Initial
Offer
LTM
EBITDA
of
$192.4mm
as
of
8/24/12
based
on
Company’s
Form 10-
Q
dated
10/3/12
for
period
ended
8/24/12,
with
certain
adjustments
based
on
Management
guidance.
FY2013E
EBITDA
of
$201.0mm
based
on
Management
Treasury
Model
dated
11/30/12,
with
certain adjustments
based on Management guidance. Diluted share count as of 7/2/12.
(b)
Current Multiple calculated using Care’s share price of $16.24 as of 3/25/13 and preliminary net debt of $200.3mm for FY2013 (2/28/13), per Management on 3/25/13. LTM EBITDA of $178.4mm as of 11/23/12 based on
Form 10-Q dated 1/2/13, with certain adjustments based on Management guidance. FY2013E EBITDA of $201.0mm based on Management Treasury Model dated 11/30/12, with certain adjustments based on
Management guidance. Current Multiple calculated using diluted share count including restricted stock units and performance shares and treasury stock method of options exercisable. Includes restricted stock units
anticipated to be awarded in May 2013, per Management guidance.
(c)
LTM
and
CY12
EBITDA
for
Selected
E-Commerce
companies
excludes
stock-based
compensation
expense
as
guided
by
Wall
Street
research
and
public
filings.
(d)
Barnes & Noble multiple as of 2/22/13, prior to announcement of potential sale of Retail Business.

26
PRIVATE
AND
CONFIDENTIAL
Select Public Company Multiples
(a)
Source:
Company’s
Form
10-Q
for
period
ended
11/23/12,
with
certain
adjustments,
including
certain
reclassifications
of
Depreciation
and
Amortization
for
LTM
period
ended
11/23/12,
based
on Management guidance.
(b)
Source: Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBIT and EBITDA based on Management guidance.
(c)
Management did not provide LTM and FY2013E adjusted EPS.
(d)
Calculated using net debt of $200.3mm, as of 2/28/13. Source: Preliminary balances for debt and cash for FY2013 (2/28/13) per Management on 3/25/13.
(e)
Calculated
using
diluted
share
count
including
restricted
stock
units
and
performance
shares
and
treasury
stock
method
of
options
exercisable.
Includes
restricted
stock
units
anticipated
to
be
awarded
in May 2013, per
Management guidance.
(f)
Control Premium is based on the median of premiums paid in selected announced all-cash mergers and acquisitions transactions in the last 6 years for deals between $500mm and $1bn; excludes financial services,
insurance, real estate and healthcare companies. Source: Alacra.
(Amounts in Millions, Except Per Share Data)
Implied Per Share
Valuation
Implied
Implied
Implied Per
Value Including 25%
Multiples
Enterprise Value
Equity Value (d)
Per Share Value (e)
Control Premium (f)
Care LTM Revenue (a)
$1,750.0
20.0%
-
40.0%
$350.0
-
$700.0
$149.7
-
$499.7
$4.41
-
$14.64
$5.52
-
$18.30
Care FY2013E Revenue (b)
1,840.6
20.0%
-
40.0%
368.1
-
736.2
167.8
-
535.9
4.95
-
15.70
6.18
-
19.62
Care LTM EBITDA (a)
$178.4
3.3 x
-
4.3 x
$579.7
-
$758.1
$379.4
-
$557.8
$11.14
-
$16.33
$13.93
-
$20.41
Care FY2013E EBITDA (b)
201.0
3.3 x
-
4.3 x
653.2
-
854.2
452.9
-
653.9
13.28
-
19.12
16.60
-
23.89
Care LTM EBIT (a)
$131.6
4.0 x
-
7.0 x
$526.5
-
$921.3
$326.1
-
$721.0
$9.59
-
$21.04
$11.99
-
$26.30
Care FY2013E EBIT (b)
155.5
4.0 x
-
7.0 x
622.0
-
1,088.4
421.6
-
888.1
12.37
-
25.70
15.46
-
32.12
Care LTM EPS (a) (c)
NA
6.5 x
-
13.0 x
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
Care FY2013 EPS (c)
NA
8.0 x
-
12.0 x
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
#VALUE!
-
#VALUE!
Care FY2014 EPS (b)
$2.58
6.0 x
-
10.0 x
$728.1
-
$1,091.0
$527.8
-
$890.7
$15.46
-
$25.77
$19.32
-
$32.21

27
PRIVATE
AND
CONFIDENTIAL
Select Precedent Transactions
Source: Public filings and company press releases.
(Amounts in Millions)
Enterprise
Enterprise Value as a Multiple of LTM:
Announced
Acquirer
Target
Value
Revenue
EBITDA
EBIT
Aug-12
Dex One Corporation
SuperMedia (a)
$1,477.8
98.8
%
2.6
x
3.6
x
May-12
Berkshire Hathaway
MEG's Newspaper Operations (b)
151.5
46.8
3.8
NA
Mar-09
BCE, Inc.
The Source (c)
104.8
21.0
5.0
8.4
Mar-09
Barnes & Noble
Barnes & Noble College
514.0
28.6
4.5
NA
Jul-05
Berkshire Partners
National Vision
104.0
44.5
3.3
5.6
Jan-05
Movie Gallery
Hollywood Entertainment Corporation
1,026.1
57.6
4.2
7.0
Median
45.7
%
4.0
x
6.3
x
Mean
49.5
3.9
6.2
(a)
Pending.
(b)
All statistics are for MEG’s entire newspaper operations excluding EBITDA Multiple which does not include Tampa Group.
(c)
Amounts converted from CAD to USD at an exchange ratio of 1.289 CAD per USD at the announcement of the transaction on March 2, 2009. Source: Bloomberg.

28
PRIVATE
AND
CONFIDENTIAL
Select Precedent Transaction Multiples
(Amounts in Millions, Except Per Share Data)
Source: Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBIT and EBITDA based on Management guidance.
Valuation
Implied
Implied
Implied
Multiples
Enterprise Value
Equity Value (a)
Per Share Value (b)
Care FY2013 Revenue
$1,840.6
30.0%
-
60.0%
$552.2
-
$1,104.4
$351.9
-
$904.0
$10.34
-
$26.12
Care FY2013E EBITDA
$201.0
3.0 x
-
4.5 x
$603.0
-
$904.5
$402.7
-
$704.2
$11.82
-
$20.56
Care FY2013E EBIT
$155.5
4.5 x
-
6.5 x
$699.7
-
$1,010.7
$499.4
-
$810.4
$14.63
-
$23.57
(a)
Calculated using net debt of $200.3mm, as of 2/28/13. Source: Preliminary balances for debt and cash for FY2013 (2/28/13) per Management on 3/25/13.
(b)
Calculated using diluted share count including restricted stock units and performance shares and treasury stock method of options exercisable. Includes restricted stock units anticipated to
be awarded in May 2013, per Management guidance.

29
PRIVATE
AND
CONFIDENTIAL
Future Stock Price Analysis
(a)
Source: Management Treasury Model dated 11/30/12, with certain adjustments to FY2013E EBITDA based on Management guidance. Management Treasury Model dated 11/30/12 assumes quarterly dividend of $0.15
per share for the projected period.
(b)
FY2013 net debt of $200.3mm represents total debt of $286.4mm less cash of $86.1mm as of 2/28/13. Represents preliminary FY2013 year end cash and debt balances per Management on 3/25/13.
(c)
Share count based on diluted shares outstanding from Management Treasury Model dated 11/30/12.
(Amounts in Millions, Except Per Share Data)
Fiscal Year
2013E
2014E
2015E
2016E
2017E
2018E
Adjusted EBITDA (a)
$201.0
$208.5
$221.4
$230.5
$238.0
$244.2
% Growth
(10.7%)
3.7%
6.2%
4.1%
3.2%
2.6%
Net Debt (b)
200.3
234.4
219.2
101.8
(16.1)
(137.7)
Adj. EBITDA
Stock Price at End of Fiscal Year (c)
Multiple
2013E
2014E
2015E
2016E
2017E
2018E
Projected Stock Price at Illustrative EV/Adjusted EBITDA Multiples:
3.25
x
$13.37
$13.68
$15.22
$19.39
$23.30
$27.09
3.50
14.86
15.29
16.90
21.11
25.05
28.86
3.75
16.34
16.90
18.59
22.84
26.81
30.64
4.00
17.82
18.51
20.27
24.57
28.56
32.42
4.25
19.31
20.12
21.95
26.29
30.32
34.19
Present Value at February 28, 2013
Present Value of Stock Price Assuming 13.0% Cost of Equity:
3.25
x
$13.37
$12.11
$11.92
$13.44
$14.29
$14.70
3.50
14.86
13.53
13.24
14.63
15.36
15.67
3.75
16.34
14.96
14.55
15.83
16.44
16.63
4.00
17.82
16.38
15.87
17.03
17.52
17.59
4.25
19.31
17.80
17.19
18.22
18.59
18.56
Present Value at February 28, 2013
Total Shareholder Value Including Present Value of Stock Price and
3.25
x
$13.37
$12.66
$12.96
$14.91
$16.14
$16.88
$0.15 per Share Quarterly Dividend, Assuming 13.0% Cost of Equity:
3.50
14.86
14.09
14.28
16.10
17.21
17.85
3.75
16.34
15.51
15.60
17.30
18.29
18.81
4.00
17.82
16.93
16.92
18.50
19.37
19.77
4.25
19.31
18.36
18.23
19.69
20.44
20.74

30
PRIVATE
AND
CONFIDENTIAL
Sum of the Parts Analysis
(a)
Based
on
Management
guidance
of
segment
performance
provided
on
2/21/13,
other
than
for
In-store
and
Properties
which
are
based
on
Management
Treasury
Model
dated
11/30/12.
(b) Also includes effect of foreign exchange.
(c) Normalized.
(d) NAGCD includes Cardstore financials. All Depreciation and Amortization allocated to NAGCD, except for In-store and Properties.
(e) Assumes full year net EBIT contribution of $10.0mm, per Management guidance on 1/23/13.
(f) FY2013 net debt of $200.3mm represents total debt of $286.4mm less cash of $86.1mm as of 2/28/13. Represents preliminary FY2013 year end cash and debt balances per Management on 3/25/13.
(g) Calculated using diluted share count including restricted stock units and performance shares and treasury stock method for options exercisable. Includes restricted stock units anticipated to be awarded in May 2013, per
Management guidance.
(Amounts in Millions, Except Per Share Data)
FY13E
Multiple Range
Enterprise Value Range
Segment Performance (a)
EBITDA
Low
Mid
High
Low
Mid
High
NAGCD
$199.3
(d)
3.25 x
3.75 x
4.25 x
$647.8
$747.4
$847.1
International (b)
21.1
3.25 x
3.75 x
4.25 x
68.4
79.0
89.5
Retail Operations (Clinton)
~10.0
(e)
3.25 x
3.75 x
4.25 x
32.5
37.5
42.5
AG Interactive
12.0
6.00 x
7.00 x
8.00 x
72.0
84.0
96.0
In-Store
6.5
3.25 x
3.75 x
4.25 x
21.1
24.3
27.6
Properties (c)
4.5
8.00 x
9.00 x
10.00 x
36.0
40.5
45.0
Subtotal Pre-Unallocated Overhead
253.4
3.46 x
4.00 x
4.53 x
877.8
1,012.7
1,147.6
Unallocated Overhead
(55.4)
3.46 x
4.00 x
4.53 x
(191.9)
(221.4)
(250.9)
Sum of the Parts Total Value
$685.9
$791.4
$896.8
Implied EV / FY2013E EBITDA ($201.0mm) Multiple
3.4 x
3.9 x
4.5 x
Less FY2013 Net Debt (f)
(200.3)
(200.3)
(200.3)
Implied Equity Value
489.0
595.0
700.9
Share Price (g)
$14.33
$17.41
$20.47
Unaffected Share Price ($14.34) Premium
0.1%
(17.6%)
(29.9%)
9/25/12 Initial Offer ($17.18) Premium
19.9%
(1.3%)
(16.1%)
1/17/13 Revised Offer ($17.50) Premium
22.1%
0.5%
(14.5%)

31
PRIVATE
AND
CONFIDENTIAL
DCF Summary
Current Five-Year Treasury Model
(a) Calculated using diluted share count including restricted stock units and performance shares and treasury stock method of options exercisable. Includes restricted stock units anticipated to be awarded in May 2013, per
Management guidance.
(b) Assumes 11.50% discount rate and 3.5x terminal multiple.
(c) Versus baseline Adjusted EBIT margin.
Assumptions –
11/30/12 Management Treasury Model
Share Price (a)
Illustrative Sensitivity to DCF (a) (b)
Illustrative implied Revenue
CAGR FY2014-FY2018
Wtd. Avg. Cost of Capital
$21.96
10.50%
11.50%
12.50%
3.0 x
$17.70
$16.84
$16.01
3.5 x
19.84
18.89
17.98
4.0 x
21.96
20.92
19.93
5-Year
Incremental
Cumulative
Incremental Annual Revenue Growth in FY14 -
FY18
EBIT
Implied
(5.00%)
(2.50%)
(1.25%)
--
1.25%
2.50%
5.00%
Margin (c)
Cost Out
(4.75%)
(2.25%)
(1.00%)
0.25%
1.50%
2.75%
5.25%
(1.0%)
($97.2)
$12.98
$14.59
$15.46
$16.37
$17.32
$18.32
$20.44
(0.5%)
(48.6)
14.02
15.74
16.66
17.63
18.64
19.69
21.93
--
--
15.07
16.89
17.87
18.89
19.95
21.06
23.40
0.5%
48.6
16.12
18.04
19.07
20.14
21.25
22.42
24.86
1.0%
97.2
17.16
19.18
20.26
21.38
22.55
23.75
26.25
Five
year
projection
period
Discounted
to
2/28/13
(using
mid-year
convention)
Preliminary
FY2013
(2/28/13)
net
debt
of
$200.3mm
at
2/28/13,
consisting
of
total
debt
of
$286.4mm
less
cash
of
$86.1mm
per
Management
on
3/25/13

32
PRIVATE
AND
CONFIDENTIAL
Discounted Cash Flow Analysis
Source: Management Treasury Model dated 11/30/12.
Note: Values discounted to 2/28/13 (using mid-year convention).
(Amounts in Millions, Except Per Share Data)
2/13/2013
8/13/2013
8/13/2014
8/13/2015
8/12/2016
8/12/2017
Projected Fiscal Year
2014E
2015E
2016E
2017P
2018P
Total Revenue
$1,935.1
$1,939.9
$1,944.8
$1,949.6
$1,954.5
% Growth
5.1%
0.3%
0.3%
0.3%
0.2%
EBITDA
208.5
221.4
230.5
238.0
244.2
% of Total Revenue
10.8%
11.4%
11.9%
12.2%
12.5%
EBIT
150.8
157.0
163.3
169.5
175.8
% of Total Revenue
7.8%
8.1%
8.4%
8.7%
9.0%
Taxes @
37.0%
(55.8)
(58.1)
(60.4)
(62.7)
(65.1)
Tax-Adjusted EBIT
95.0
98.9
102.9
106.8
110.8
Depreciation & Amortization
57.7
64.4
67.2
68.4
68.4
Capital Expenditures
(169.2)
(139.1)
(46.0)
(46.0)
(46.0)
Change in Net Working Capital
18.6
21.7
24.5
20.2
20.1
Free Cash Flow
--
$2.1
$45.9
$148.6
$149.4
$153.3
Terminal Value / EBITDA Multiple
3.0 x
3.5 x
4.0 x
Discount Rate
10.5%
11.5%
12.5%
10.5%
11.5%
12.5%
10.5%
11.5%
12.5%
Present Value of Free Cash Flow
$360.6
$350.3
$340.4
$360.6
$350.3
$340.4
$360.6
$350.3
$340.4
Present Value of Terminal Value
444.8
425.2
406.6
518.9
496.0
474.4
593.0
566.9
542.1
Total Enterprise Value
$805.3
$775.5
$747.0
$879.4
$846.3
$814.8
$953.6
$917.2
$882.6
Less:  Net Debt (a)
(200.3)
(200.3)
(200.3)
(200.3)
(200.3)
(200.3)
(200.3)
(200.3)
(200.3)
Total Equity Value
605.0
575.1
546.7
679.1
646.0
614.5
753.2
716.9
682.2
Total Equity Value Per Share (b)
$17.70
$16.84
$16.01
$19.84
$18.89
$17.98
$21.96
$20.92
$19.93
(a)
Net debt represents preliminary FY2013 total debt less cash balances as of 2/28/13 per Management on 3/25/13.
(b)
Calculated using diluted share count including restricted stock units and performance shares and treasury stock method of options exercisable. Includes restricted stock units anticipated to
be awarded in May 2013, per Management guidance.

33
PRIVATE
AND
CONFIDENTIAL
Future Stock Price Analysis Based on Illustrative Levered Recap
Source: Share count based on diluted shares outstanding from Management Treasury Model dated 11/30/12.
(a)
Assumes $271mm of incremental leverage using Term Loan B at L + 450bps with 125bps floor (2.8x Total Debt / FY2013E EBITDA).
(b)
Does
not
factor
in
potential
consent
fees
or
changes
to
interest
rate.
(c)
Source: EBITDA from Management Treasury Model dated 11/30/12, with certain adjustments for FY2013E EBITDA based on Management guidance.
Assumes
a
$8.00
dividend
is
paid
on
2/28/13
(a)
,
an
incremental
borrowing
of
$271
million
dollars,
resulting
in
2.8x
Debt
/
2013E
EBITDA
At 3.1x total debt / FY2013 EBITDA leverage, the Company would be able to effect a $10 per share dividend
Assumes
no
make-whole
payment
on
existing
7.375%
Senior
Notes
(b)
Assumes suspension of regular $0.15 / quarter dividend
(Amounts in Millions, Except Per Share Data)
Fiscal Year
2013E
2014E
2015E
2016E
2017E
2018E
Adjusted EBITDA (c)
$201.0
$208.5
$221.4
$230.5
$238.0
$244.2
% Growth
(10.7%)
3.7%
6.2%
4.1%
3.2%
2.6%
Net Debt
471.3
495.4
470.2
340.0
204.4
61.7
Total Debt / EBITDA
2.8 x
2.7 x
2.4 x
1.7 x
1.1 x
0.9 x
Adj. EBITDA
Stock Price at End of Fiscal Year
Multiple
2013E
2014E
2015E
2016E
2017E
2018E
Projected Stock Price at Illustrative EV/Adjusted EBITDA Multiples:
3.25
x
$5.37
$5.62
$7.59
$12.25
$16.79
$21.29
3.50
6.86
7.23
9.27
13.98
18.54
23.07
3.75
8.34
8.84
10.95
15.71
20.30
24.84
4.00
9.82
10.45
12.64
17.43
22.06
26.62
4.25
11.31
12.06
14.32
19.16
23.81
28.39
Present Value at February 28, 2013
Present Value of Stock Price Assuming 13.0% Cost of Equity:
3.25
x
$5.37
$4.98
$5.94
$8.49
$10.30
$11.56
3.50
6.86
6.40
7.26
9.69
11.37
12.52
3.75
8.34
7.83
8.58
10.89
12.45
13.48
4.00
9.82
9.25
9.90
12.08
13.53
14.45
4.25
11.31
10.67
11.21
13.28
14.60
15.41
Present Value at February 28, 2013
Total Shareholder Value Including Present Value of Stock Price and
3.25
x
$13.37
$12.98
$13.94
$16.49
$18.30
$19.56
$8.00 Dividend, Assuming 13.0% Cost of Equity:
3.50
14.86
14.40
15.26
17.69
19.37
20.52
Assuming 100.0% Cost of Equity:
3.75
16.34
15.83
16.58
18.89
20.45
21.48
4.00
17.82
17.25
17.90
20.08
21.53
22.45
4.25
19.31
18.67
19.21
21.28
22.60
23.41

34
PRIVATE
AND
CONFIDENTIAL
Pro Forma Effect of Special Dividend
Source: Share count based on diluted shares outstanding from Management Treasury Model dated 11/30/12.
Note:
Market
capitalization
calculated
using
the
enterprise
value
based
on
2013E
EBITDA
of
$201.0mm
multiplied
by
the
adjusted
FY2013E
EBITDA
multiple,
less
preliminary
net
debt
of
$200.3mm
as
of
2/28/13,
per
Management on 3/25/13, less cash used to issue dividends.
(a)
Source: EBITDA from Management Treasury Model dated 11/30/12, with certain adjustments for FY2013E EBITDA based on Management guidance.
Mkt Cap Post Dividend
Stock Price Post Dividend
Proforma 2/28/13 Stock
Price Plus Dividend
(Amounts in Millions, Except Per Share Data)
Special
Dividend
Total $
Pro Forma
EV / Adj. 2013E Multiple (a)
Per Share
Distributed
Debt / EBITDA
3.25 x
3.50 x
3.75 x
4.00 x
4.25 x
$13.37
$14.86
$16.34
$17.82
$19.31
$2.00
$67.7
1.8 x
$385.2
$435.4
$485.7
$535.9
$586.2
$11.37
$12.86
$14.34
$15.82
$17.31
$4.00
135.5
2.1 x
$317.5
$367.7
$417.9
$468.2
$518.4
$9.37
$10.86
$12.34
$13.82
$15.31
$6.00
203.2
2.4 x
$249.7
$300.0
$350.2
$400.5
$450.7
$7.37
$8.86
$10.34
$11.82
$13.31
$8.00
270.9
2.8 x
$182.0
$232.2
$282.5
$332.7
$383.0
$5.37
$6.86
$8.34
$9.82
$11.31
$10.00
338.7
3.1 x
$114.2
$164.5
$214.7
$265.0
$315.2
$3.37
$4.86
$6.34
$7.82
$9.31

35
PRIVATE
AND
CONFIDENTIAL
Appendix A. Supplemental Information

36
PRIVATE
AND
CONFIDENTIAL
Premium Paid Analysis
Source: Alacra.
(a) Excludes certain industry sectors including financial services, insurance, real estate and healthcare companies.
Selected 100% cash transactions over the last 6 years with an enterprise value between $500M -
$1B (a)
Unaffacted Premium to /
Deal
Enterprise
One-Day
Five- Day
One-Month
Announced
Seller
Buyer
Value
Value
Prior
Prior
Prior
Feb-11
Silverleaf Resorts, Inc.
Cerberus Capital Management LP
$102.6
$507.4
72%
84%
145%
Aug-08
SI International, Inc.
Serco Group PLC
425.5
512.8
40%
43%
53%
Oct-10
Actel Corp.
Microsemi Corp.
551.9
516.3
30%
29%
50%
May-11
Volcom, Inc.
PPR SA
598.4
517.0
24%
32%
45%
Mar-07
SafeNet, Inc.
SafeNet, Inc. /Private Group/
605.8
520.4
2%
4%
21%
Dec-10
Applied Signal Technology, Inc.
Raytheon Co.
525.4
520.9
9%
9%
15%
Apr-11
SMART Modular Technologies (WWH), Inc.
Silver Lake Group LLC
603.1
523.7
13%
16%
40%
Dec-11
WCA Waste Corp.
Macquarie Group Ltd.
154.1
526.9
30%
31%
36%
Aug-07
Infocrossing, Inc.
Wipro Ltd.
416.2
530.1
5%
7%
11%
Dec-09
FGX International Holdings Ltd.
Essilor International SA
437.0
530.4
10%
24%
40%
Sep-09
GenTek, Inc.
American Securities LLC
386.7
538.9
41%
40%
41%
May-07
24/7 Real Media, Inc.
WPP Group PLC
603.6
556.0
4%
9%
39%
Mar-10
Bell Microproducts, Inc.
Avnet, Inc.
248.7
569.6
30%
33%
53%
Dec-07
Claymont Steel Holdings, Inc.
Evraz Group SA
412.8
575.3
7%
3%
15%
Sep-10
Internet Brands, Inc.
Hellman & Friedman LLC
617.9
580.6
47%
38%
29%
Jan-13
Zipcar, Inc.
Avis Budget Group, Inc.
490.8
590.0
49%
43%
76%
Jan-11
Pre-Paid Legal Services, Inc.
MidOcean Partners
651.0
601.3
10%
10%
6%
Dec-12
Intermec, Inc.
Honeywell International, Inc.
603.4
601.5
25%
31%
43%
Jun-09
Axsys Technologies, Inc.
General Dynamics Corp.
627.8
601.6
8%
9%
30%
Jun-10
SonicWALL, Inc.
Ontario Teachers' Pension Plan Board / Thoma Bravo
633.6
602.1
32%
29%
19%
Mar-07
Stratos Global Corp.
Communications Investment Partners Ltd.
276.9
604.3
21%
22%
48%
Nov-12
Teavana Holdings, Inc.
Starbucks Corp.
598.2
607.0
53%
48%
20%
Apr-12
X-Rite, Inc.
Danaher Corp.
477.9
617.4
39%
23%
21%
Jan-09
Interwoven, Inc.
Autonomy Corp. PLC
760.5
622.0
37%
25%
47%
May-12
Cost Plus, Inc.
Bed Bath & Beyond, Inc.
494.8
631.0
22%
16%
23%
Jul-11
Ameron International Corp.
National-Oilwell Varco, Inc.
770.9
633.6
28%
27%
31%
Oct-07
Oglebay Norton Co.
L.V.I. Holding NV
520.3
647.3
5%
8%
20%
Apr-07
Inter-Tel (Delaware), Inc.
Mitel Networks Corp.
699.1
664.2
7%
8%
10%
May-07
CT Communications, Inc.
Windstream Corp.
639.2
664.3
46%
48%
21%
Mar-07
Sunterra Corp.
Diamond Resorts LLC
322.3
667.2
7%
36%
33%
Mar-07
Eschelon Telecom, Inc.
Integra Telecom, Inc.
542.6
667.8
17%
20%
30%
Jun-11
Central Vermont Public Service Corp.
Gaz MTtro LP
472.3
668.7
2%
3%
54%
Mar-11
Rural/Metro Corp.
Warburg Pincus & Co.
437.8
674.1
37%
39%
10%
Jul-11
SFN Group, Inc.
Randstad Holding NV
686.4
682.5
53%
44%
52%
Jun-07
Color Kinetics, Inc.
Royal Philips Electronics NV
732.3
687.7
14%
25%
58%
Mar-08
BladeLogic, Inc.
BMC Software, Inc.
775.1
695.2
19%
26%
62%
May-12
Standard Microsystems Corp.
Microchip Technology, Inc.
856.6
709.5
41%
41%
46%
Jun-10
Argon ST, Inc.
The Boeing Co.
755.5
713.8
41%
34%
45%
Dec-12
Eloqua, Inc.
Oracle Corp.
809.8
724.4
31%
33%
15%
Oct-09
iPCS, Inc.
Sprint Nextel Corp.
402.6
730.5
34%
35%
43%
May-12
Interline Brands, Inc.
Interline Brands, Inc. /Private Group/
749.9
734.1
42%
41%
23%
Jul-09
SPSS, Inc.
International Business Machines Corp.
922.5
744.7
42%
47%
48%
Mar-12
Great Wolf Resorts, Inc.
Apollo Management LP
162.4
745.2
19%
19%
50%
Jul-08
EnergySouth, Inc.
Sempra Energy
498.9
747.8
23%
39%
19%
Jul-07
Keystone Automotive Industries, Inc.
LKQ Corp.
795.3
774.9
10%
14%
19%
Jul-07
Option Care, Inc. (Illinois)
Walgreen Co.
677.2
780.0
27%
28%
35%
May-12
Charming Shoppes, Inc.
Ascena Retail Group, Inc.
859.1
783.7
25%
25%
27%
Aug-07
Gateway, Inc.
Acer, Inc.
709.4
783.8
57%
45%
12%
Jul-12
BrightPoint, Inc.
Ingram Micro, Inc.
622.5
787.4
66%
97%
78%
Apr-10
Protection One, Inc.
GTCR Golder Rauner LLC
394.2
802.1
13%
24%
48%
Jun-09
Wind River Systems, Inc.
Intel Corp.
884.3
809.7
44%
49%
65%

37
PRIVATE
AND
CONFIDENTIAL
Premium Paid Analysis
Source: Alacra.
(a) Excludes certain industry sectors including financial services, insurance, real estate and healthcare companies.
Selected 100% cash transactions over the last 6 years with an enterprise value between $500M -
$1B (a)
Unaffacted Premium to /
Deal
Enterprise
One-Day
Five- Day
One-Month
Announced
Seller
Buyer
Value
Value
Prior
Prior
Prior
Dec-12
TNS, Inc.
SIRIS Capital Group LLC
$513.2
$828.5
44%
42%
45%
Mar-10
BWAY Holding Co.
Madison Dearborn Partners LLC
448.3
829.9
15%
15%
25%
May-07
Stride Rite Corp.
Payless ShoeSource, Inc.
753.3
831.9
35%
39%
35%
Aug-10
Superior Well Services, Inc.
Nabors Industries Ltd.
681.5
847.4
21%
14%
35%
Nov-10
Art Technology Group, Inc.
Oracle Corp.
948.7
889.8
46%
37%
54%
Aug-10
Cogent, Inc.
3M Co.
930.5
912.5
18%
20%
17%
Oct-12
Ceradyne, Inc.
3M Co.
860.6
916.5
43%
40%
44%
Aug-12
TPC Group, Inc.
First Reserve Corp. / SK Capital Management LLC
705.5
918.2
14%
12%
21%
Oct-07
United Industrial Corp.
Textron, Inc.
801.9
933.7
7%
6%
19%
Jul-12
Peet's Coffee & Tea, Inc.
Joh. A. Benckiser GmbH
967.7
935.3
29%
37%
22%
Apr-11
Epicor Software Corp.
Apax Partners LLP
801.9
945.3
11%
18%
20%
Apr-10
Palm, Inc.
Hewlett-Packard Co.
961.9
976.6
23%
17%
6%
Mean
27%
29%
36%
Median
25%
28%
35%

38
PRIVATE
AND
CONFIDENTIAL
WACC
(a) Care’s financials and market data as of 9/25/12 (unaffected date).
(b) Source: Bloomberg 5-year adjusted weekly beta as reported on March 25, 2013.
(c) Assumes book value of debt approximates market value.
(d) Unlevered Beta = Levered Beta / {1+(Net Debt/Market Equity)*(1-Tax Rate)}.
(e) 10-year Treasury Note yield as of March 25, 2013.
(f) Source: Ibbotson 2013 Yearbook.
(g) Size premium of 2.70% for companies with market capitalizations between $254.6mm and $514.2mm.
(h) Marginal U.S. Corporate Tax Rate.
(i) WACC = (Net Debt/Capital) * After-Tax Cost of Debt + (Equity/Capital) * Cost of Equity.
(j) Relevered Beta = Unlevered Beta * {1+(Net Debt/Equity)*(1-Tax Rate)}.
(k) Cost of Equity = Risk Free Rate + (Relevered Beta * Market Risk Premium) + Size Premium.
(l) Median Unlevered Beta of Comps.
Comparable Companies
Assumptions
Current
Net Debt/
Risk Free Rate of Return (e)
1.93%
Levered
Market
Unlevered
Market Risk Premium (f)
6.70%
Name
Beta (b)
Equity (c)
Beta (d)
Size Premium (f) (g)
2.70%
American Greetings Corp. (a)
1.265
46.6%
0.971
Marginal Tax Rate (h)
35.00%
CSS Industries Inc.
1.043
--
1.043
Blyth, Inc.
1.525
--
1.525
Shutterfly, Inc.
1.095
--
1.095
1-800-Flowers.com Inc.
1.502
--
1.502
CafePress Inc.
1.418
--
1.418
Iconix Brand Group, Inc.
1.410
40.2%
1.118
Cherokee Inc.
1.121
9.8%
1.054
Meredith Corporation
1.257
20.6%
1.108
Barnes & Noble, Inc.
0.961
--
0.961
hhgregg, Inc.
1.065
--
1.065
Best Buy Co., Inc.
1.186
6.0%
1.141
GameStop Corp.
1.005
--
1.005
Mean (Excluding American Greetings Corp. (a))
1.216
6.4%
1.170
Median (Excluding American Greetings Corp. (a))
1.154
0.0%
1.102
American Greetings Corp. (a) Observed Weighted Average Cost of Capital (i)
Capital Structure
Cost of Equity
Cost of Debt
Net Debt/
Net Debt/
Unlevered
Levered
Cost of
Before
After
Based on:
Capital
Equity
Beta
Beta (j)
Equity (k)
Tax
Tax
WACC
Company Beta and Company D/E
31.8%
46.6%
0.971
1.265
13.1%
7.38%
4.79%
10.5%
Median Beta of Comps and Company D/E
0.0%
0.0%
1.095
1.095
12.0%
5.45%
3.54%
12.0%
Median Beta of Comps and D/E of Comps
0.0%
0.0%
1.102
1.102
12.0%
5.45%
3.54%
12.0%
Sensitivity to Capital Structure and Rates
Cost of Equity
Weighted Average Cost of Capital
Net Debt/
Net Debt/
Unlevered
Levered
Cost of
Pre-Tax Cost of Debt
Capital
Equity
Beta (l)
Beta (j)
Equity (k)
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
0%
0.0%
1.102
1.102
12.0%
0%
12.0%
12.0%
12.0%
12.0%
12.0%
12.0%
12.0%
10%
11.1%
1.102
1.181
12.5%
10%
11.7%
11.7%
11.8%
11.9%
11.9%
12.0%
12.1%
20%
25.0%
1.102
1.281
13.2%
20%
11.3%
11.5%
11.6%
11.7%
11.9%
12.0%
12.1%
30%
42.9%
1.102
1.409
14.1%
30%
11.0%
11.2%
11.4%
11.6%
11.8%
12.0%
12.2%
40%
66.7%
1.102
1.579
15.2%
40%
10.7%
10.9%
11.2%
11.5%
11.7%
12.0%
12.2%
50%
100.0%
1.102
1.818
16.8%
50%
10.4%
10.7%
11.0%
11.3%
11.7%
12.0%
12.3%
60%
150.0%
1.102
2.176
19.2%
60%
10.0%
10.4%
10.8%
11.2%
11.6%
12.0%
12.4%
70%
233.3%
1.102
2.773
23.2%
70%
9.7%
10.1%
10.6%
11.1%
11.5%
12.0%
12.4%

39
PRIVATE
AND
CONFIDENTIAL
Select Public Company Analysis
Note:
All
operating
data
has
been
adjusted
to
exclude
unusual
and
extraordinary
items.
LTM
and
Calendar
Year
2012
(CY12)
EBITDA
for
Selected
E-Commerce
companies
excludes
stock-based
compensation
expense
as
guided by Wall Street research and public filings.
Note: For purposes of comparability, Care’s CY13E financials (fiscal year ended 2/28/13) are treated as CY12 (calendar year ending December 31, 2012).
(a)
Care
–
Unaffected
assumes
Care’s
share
price
of
$14.34
as
of
9/25/12
and
net
debt
as
of
8/24/12
of
$218.4mm.
Pre-Initial
Offer
LTM
EBITDA
of
$192.4mm
as
of
8/24/12
based
on
public
filings
and
with
certain
adjustments
based
on
Management
guidance.
FY2013E
EBITDA
of
$201.0mm
based
on
Management
Treasury
Model
dated
11/30/12,
with
certain
adjustments
based
on
Management
guidance. Diluted share count
as of 7/2/12.
(b)
Care
–
Current
assumes
Care’s
share
price
of
$16.24
as
of
3/25/13
and
preliminary
net
debt
of
$200.3mm
for
FY2013
(2/28/13),
per
Management
on
3/25/13.
LTM
EBITDA
of
$178.4mm
as
of
11/23/12
based
on
public
filings
and
with
certain
adjustments
based
on
Management
guidance.
FY2013E
EBITDA
of
$201.0mm
based
on
Management
Treasury
Model
dated
11/30/12,
with
certain
adjustments
based
on
Management
guidance.
Assumes
diluted
share
count
including
restricted
stock
units
and
performance
shares
and
treasury
stock
method
of
options
exercisable.
Includes
restricted
stock
units
anticipated
to
be awarded in
May 2013, per Management guidance.
(c)
Excludes Care.
(d)
Barnes & Noble multiple as of 2/22/13, prior to announcement of potential sale of Retail Business.
(e)
Enterprise
value
represents
equity
value
plus
book
values
of
total
debt,
including
preferred
stock
and
minority
interest
less
cash.
Care
–
Unaffected
enterprise
value
assumes
net
debt
of
$218.4
as
of
8/24/12.
(f)
Source
of
projected
EPS,
EBIT,
EBITDA
and
Revenue:
ThomsonReuter's
median
estimate
of
Wall
Street
analysts
as
of
3/25/13.
Care
–
Unaffected
EPS
based
on
research
estimates
as
of
6/29/12.
(Amounts in Millions, Except for Per Share Amounts)
MARKET DATA
Closing
Premium (Discount)
Enterprise Value as a Multiple of:
P/E Multiple:
Price on
to 52 Week
Equity
Enterpris
LTM
LTM
CY2012
LTM
CY2013
Selected Companies
3/25/13
High
Low
Value
Value (e)
Revenue
Revenue
EBIT
EBITDA
Revenue (f)
EBIT (f)
EBITDA (f)
EPS
EPS (f)
Care - Unaffected (a)
$14.34
(26.5)
%
14.7
%
$500.6
$719.0
$1,708.2
42.1
%
4.9
x
3.7
x
39.1
%
4.6
x
3.6
x
NA
5.6
x
Care - Current (b)
16.24
(6.6)
28.3
554.7
755.0
1,750.0
43.1
5.7
4.2
41.0
4.9
3.8
NA
6.3
CSS Industries Inc.
25.19
--
39.5
238.5
185.1
371.7
49.8
6.0
4.8
49.8
6.0
4.8
11.8
NA
Blyth, Inc.
16.91
(62.9)
25.7
280.0
343.8
1,179.5
29.1
3.6
3.2
29.1
3.6
3.2
6.7
x
NA
Social Expression Median (c)
(31.4)
%
32.6
%
39.5
%
4.8
x
4.0
x
39.5
%
4.8
x
4.0
x
9.2
x
NA
Social Expression Mean (c)
(31.4)
32.6
39.5
4.8
4.0
39.5
4.8
4.0
9.2
NA
Social Expression High (c)
-
39.5
49.8
6.0
4.8
49.8
6.0
4.8
11.8
NA
Social Expression Low (c)
(62.9)
25.7
29.1
3.6
3.2
29.1
3.6
3.2
6.7
NA
Quad/Graphics, Inc.
24.18
(1.0)
124.7
1,163.8
2,457.4
4,094.0
60.0
10.9
4.4
60.0
10.9
4.4
9.2
11.5
R.R. Donnelley & Sons Company
11.76
(11.3)
37.1
2,124.2
5,148.0
10,221.9
50.4
6.9
4.2
50.4
6.9
4.2
6.3
7.4
Scholastic Corporation
26.29
(29.3)
0.9
841.2
799.3
1,968.8
40.6
6.3
4.0
40.6
6.3
4.0
11.2
9.3
Print Media Median (c)
(11.3)
%
37.1
%
50.4
%
6.9
x
4.2
x
50.4
%
6.9
x
4.2
x
9.2
x
9.3
x
Print Media Mean (c)
(13.9)
54.2
50.3
8.0
4.2
50.3
8.0
4.2
8.9
9.4
Print Media High (c)
(1.0)
124.7
60.0
10.9
4.4
60.0
10.9
4.4
11.2
11.5
Print Media Low (c)
(29.3)
0.9
40.6
6.3
4.0
40.6
6.3
4.0
6.3
7.4
PagesJaunes Groupe
2.32
(37.1)
41.7
643.3
2,863.8
1,372.5
208.7
5.5
5.0
208.7
5.5
5.0
3.3
3.3
Eniro AB
1.74
(29.5)
54.4
174.5
599.2
613.6
97.7
7.3
3.8
97.7
7.3
3.8
4.4
3.8
Yellow Media Limited
9.89
(3.4)
75.8
276.4
1,041.5
1,083.5
96.1
2.3
2.0
96.1
2.3
2.0
NM
NM
Directories Median (c)
(29.5)
%
54.4
%
97.7
%
5.5
x
3.8
x
97.7
%
5.5
x
3.8
x
3.8
x
3.5
x
Directories Mean (c)
(23.3)
57.3
134.1
5.0
3.6
134.1
5.0
3.6
3.8
3.5
Directories High (c)
(3.4)
75.8
208.7
7.3
5.0
208.7
7.3
5.0
4.4
3.8
Directories Low (c)
(37.1)
41.7
96.1
2.3
2.0
96.1
2.3
2.0
3.3
3.3
Shutterfly, Inc.
43.39
(3.8)
82.7
1,624.7
1,379.6
640.6
215.3
29.8
10.3
215.3
29.8
10.3
62.0
NM
1-800-Flowers.com Inc.
5.05
(1.0)
79.1
326.9
321.7
733.1
43.9
14.5
6.8
43.9
14.5
6.8
19.2
18.7
CafePress Inc.
6.08
(68.3)
23.8
105.2
65.4
217.8
30.1
19.2
3.7
30.1
19.2
3.7
41.7
35.8
Selected E-Commerce Median (c)
(3.8)
%
79.1
%
43.9
%
19.2
x
6.8
x
43.9
%
19.2
x
6.8
x
41.7
x
27.2
x
Selected E-Commerce Mean (c)
(24.3)
61.9
96.4
21.2
7.0
96.4
21.2
7.0
41.0
27.2
Selected E-Commerce High (c)
(1.0)
82.7
215.3
29.8
10.3
215.3
29.8
10.3
62.0
35.8
Selected E-Commerce Low (c)
(68.3)
23.8
30.1
14.5
3.7
30.1
14.5
3.7
19.2
18.7
Iconix Brand Group, Inc.
25.80
--
77.6
1,702.7
2,473.0
353.8
699.0
11.5
11.1
699.0
11.5
11.1
15.2
12.2
Cherokee Inc.
14.03
(7.5)
26.9
117.8
128.8
26.5
485.2
10.9
9.6
NA
NA
NA
16.1
13.8
Meredith Corporation
37.22
(15.8)
36.8
1,651.3
1,991.6
1,434.8
138.8
9.1
7.6
138.8
9.1
7.6
13.3
14.4
Licensing Median (c)
(7.5)
%
36.8
%
485.2
%
10.9
x
9.6
x
418.9
%
10.3
x
9.3
x
15.2
x
13.8
x
Licensing Mean (c)
(7.8)
47.1
441.0
10.5
9.4
418.9
10.3
9.3
14.9
13.5
Licensing High (c)
-
77.6
699.0
11.5
11.1
699.0
11.5
11.1
16.1
14.4
Licensing Low (c)
(15.8)
26.9
138.8
9.1
7.6
138.8
9.1
7.6
13.3
12.2
Barnes & Noble, Inc. (d)
13.51
(34.9)
25.3
809.3
1,158.6
7,156.9
16.2
NM
5.2
16.4
NM
5.9
NM
NM
hhgregg, Inc.
11.06
(7.0)
86.2
369.0
353.5
2,490.9
14.2
6.9
3.9
14.2
6.9
3.9
8.6
14.4
Best Buy Co., Inc.
23.20
(15.2)
105.5
7,843.6
8,967.6
49,621.0
18.1
6.0
3.7
18.1
6.0
3.7
12.8
10.7
GameStop Corp.
25.38
(8.8)
61.3
3,104.3
2,737.9
8,903.8
30.7
4.5
3.5
31.2
4.4
3.4
27.2
7.4
Selected Low-Growth Retail Median (c)
(12.0)
%
73.8
%
17.1
%
6.0
x
3.8
x
17.2
%
6.0
x
3.8
x
12.8
x
10.7
x
Selected Low-Growth Retail Mean (c)
(16.5)
69.6
19.8
5.8
4.1
20.0
5.8
4.2
16.2
10.8
Selected Low-Growth Retail High (c)
(7.0)
105.5
30.7
6.9
5.2
31.2
6.9
5.9
27.2
14.4
Selected Low-Growth Retail Low (c)
(34.9)
25.3
14.2
4.5
3.5
14.2
4.4
3.4
8.6
7.4