EXPERT VALUATION REPORT

Updated as of October 22, 2004 Co-Authors Bill Derrough, Managing Director and Co-Head of the Recapitalization and Restructuring Group Michael Henkin, Senior Vice President, Recapitalization and Restructuring Group

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EXPERT REPORT

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

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TABLE OF CONTENTS

TAB

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

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

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

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

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

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

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

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

JEFFERIES QUALIFICATIONS

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JEFFERIES QUALIFICATIONS Background

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

SECURITIES AND VALUATION CREDENTIALS

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

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

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

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

POST-RESTRUCTURING EQUITIES CREDENTIALS

#1 trader of post restructuring equities

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

One of the only firms to have dedicated, integrated end-to-end post-restructured equities trading and market making capabilities (1) Source: Autex. For the period July 1, 2003 –June 30, 2004. (2) Source: Mergerstat. All announced U.S. based deals with transaction value of less than $500 million for 2003. Excludes certain transactions such as privatizations, buybacks, open market

purchases, joint ventures, litigations, alliances and collars; full credit to each advisor.

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JEFFERIES QUALIFICATIONS

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

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

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

Situations, specialize in sector

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JEFFERIES QUALIFICATIONS

Jefferies dominates the trading of post-Chapter 11 equity securities

Company Ticker Date of First Trade Jefferies Trading Rank (First year from first trade)

Jefferies Trading Rank (Date of First Trade through

September 30, 2004)

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

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

Source: AutEx.

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JEFFERIES QUALIFICATIONS

Bill Derrough – Biography

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

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

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

Securities Licenses and Memberships − NASD

• Series 7 – General Securities Representative • Series 63 – State Agent • Series 24 – General Securities Principal

− Philadelphia Stock Exchange, Pacific Stock Exchange – General Securities Representative

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JEFFERIES QUALIFICATIONS

Bill Derrough – Biography (Cont’d)

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

Jefferies & Company, Inc. (1998 – present)

AmeriServe Food Distribution Co. (food distributor) Formica Corporation (building materials) MobileMedia Corporation (wireless messaging) Anacomp, Inc. (data management) Ft. Worth Tower (communications tower manufacturing) Net2000 (CLEC) CHS Electronics (computer distributor) Globalstar (satellite telecommunications) NextWave Communications (PCS wireless telephony) Cone Mills Corporation (textile manufacturing) pending Golden Books Family Entertainment (children’s publishing

and media) Orbital Sciences Corporation (satellite manufacturer and

services provider) CyberCash (online bill payment) Golden Ocean Group, LTD. (oil tankers) Orius Corp. (telecom infrastructure) Decora Industries, Inc. (consumer products) Heartland Wireless Communications (broadband wireless

TV and internet) Pliant Systems (telecom equipment manufacturer)

Einstein/Noah’s Bagel Corp. (restaurants) Hvide Marine (maritime) Russell-Stanley (plastic and steel containers) Electronic Retailing Solutions, Inc. (wireless retail shelf

labeling; self-checkout) ICO Global Communications Ltd. (satellite

communications) Specialty Foods Corporation (bakery and meat products)

Enterprises Shipholding Corporation (refrigerated and container ships)

ICO – Teledesic Global Ltd. (satellite communications) Startec Communications (international long-distance telecom provider)

Envirosource Corp. (steel services and waste management)

International Wireless Communications (developing country wireless telephony)

Sunterra (timeshare/real estate)

Ermis Maritime Holdings (shipping) Kellstrom Industries (aviation parts) Trans Texas Corporation (oil & gas exploration, gas distribution and oil refining)

Farrell Lines, Inc. (U.S. flag container shipping) LLS Corporation (injection molded closures and containers)

TSR Wireless Communications (paging and wireless telephony)

Federal-Mogul Corporation (automotive parts manufacturer) pending

Long Distance International (international long distance network)

Vlasic Foods (branded food manufacturer)

Fitzgeralds Gaming Corporation (casino hotels) Loral Space & Communications, Ltd. (satellite manufacturer and service provider) pending

XO Communications (CLEC)

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JEFFERIES QUALIFICATIONS

Bill Derrough – Biography (Cont’d)

Chanin and Company (1991 – 1997) Ames Department Stores (retailer) C&R Clothiers (men’s apparel) Northern Automotive Corporation (auto parts retailer) Anacomp (data storage and imaging) Cherokee (casual apparel manufacturer) Orange County, California (municipality) Angeles Corp. (real estate) Evergreen International Aviation (air cargo) Resorts International (casino-hotels) Angeles Participating Mortgage Trust (mortgage REIT) International Paging Corporation (paging) Scott Cable Communications (rural cable television

systems) Angeles Mortgage Investment Trust (mortgage REIT) KDI Corporation (manufacturing) Sea Life Park (marine mammal amusement park) Burlington Motor Holding (trucking) Kerr Group (plastic closure manufacturing) Strategic Partners (medical uniforms) Carter Hawley Hale Stores (department stores) Morrison Knudsen Corporation (engineering and

construction)

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

production) Circus Circus Enterprises (casino-hotels) Ralphs (supermarkets) Vons Companies (supermarkets)

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JEFFERIES QUALIFICATIONS Bill Derrough – Expert Testimony

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

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

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JEFFERIES QUALIFICATIONS Michael Henkin – Biography

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

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

(1998 – 1999) − News Corporation, Vice President, Business Development (1995 – 1998)

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

Securities Licenses − NASD

• Series 7 – General Securities Representative • Series 63 – State Agent

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JEFFERIES QUALIFICATIONS

Michael Henkin – Biography (Cont’d)

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

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

Bally’s Park Place, Inc. (casino / lodging operator) BTI Telecom Corporation (telecommunications services company) CHC Helicopter Corporation (commercial helicopter operator) Cherokee, Inc. (apparel marketer and licenser) DDI Corp. (electronics developer and manufacturer) Earthlink, Inc. / OmniSky Corp. (internet and wireless services) Exide Technologies (battery manufacturer) Federal-Mogul Corporation (automotive parts manufacturer)

pending Jordon Industries, Inc. (multiple-industry holding company) Kash ‘n Karry Food Stores, Inc. (supermarket operator) Liggett Group Inc. (tobacco distributor) Loral Space & Communications Ltd. (satellite manufacturer and

service provider) pending

Microcell Telecommunications, Inc. (wireless services provider) Mpower Holding Corp. (telecommunications service provider) Orbital Sciences Corp. / Orbital Imaging Corp. (satellite

manufacturer and service provider) Orchard Supply Hardware Stores Corporation (retailer) Philip Services Corp. (environmental and metal services) Rhythms NetConnections, Inc. (telecommunications service

provider) Seattle Lighting (lighting distributor and retailer) Terex Corporation (heavy equipment manufacturer) Transeastern Properties, Inc. (homebuilder) Trans-Resources, Inc. (agricultural and industrial chemicals

manufacturer) Wilrig AS (offshore oil rig operator)

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JEFFERIES QUALIFICATIONS Michael Henkin – Expert Testimony

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

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

EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY Introduction

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

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

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

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

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

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

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EXECUTIVE SUMMARY Objective and Scope

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

In determining its opinion as to the estimated range of value for Federal-Mogul, Jefferies performed the following due diligence: − Review of the operations of Federal-Mogul’s key business units − Review of management’s financial forecast for fiscal years 2004E to 2007P including various supporting schedules and

information − Review of the assumptions underlying management’s four-year plan, as well as risk factors and opportunities that could impact

expected performance − Discussions with various senior managers with respect to the business operations and the four-year plan − Analysis of the industry, the Company’s key competitors, and trends in the environment in which Federal-Mogul operates − Analysis of financial information of key competitors and/or similar publicly-traded companies to determine appropriate valuation

multiples − Analysis of the performance and market position of the Company relative to its key competitors and/or similar publicly-traded

companies − Analysis of precedent transactions in the industry to determine prices paid for assets, business lines and/or companies similar

to Federal-Mogul to determine appropriate valuation multiples; and − Preparation of such other analyses as Jefferies deemed appropriate

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EXECUTIVE SUMMARY Valuation Conclusions as of the Effective Date

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

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

Jefferies & Company, Inc.

Michael Henkin, Senior Vice President, Recapitalization and Restructuring Group

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

$4,054 $4,336

$4,624 $4,962

$4,183 $4,449

$3,121 $3,320

$3,000 $3,500 $4,000 $4,500 $5,000 $5,500

Concluded Range of Valuation

Discounted Cash Flow Analysis

Comparable M&A TransactionAnalysis

Comparable Company Analysis

Based on Jefferies’ weighting of 55% for the Discounted Cash Flow Analysis, 35% for the Comparable Company Analysis and 10% for the Comparable M&A Analysis, we

believe the range of Enterprise Value for Federal-Mogul is $4.1 to $4.3 billion

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

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

Estimated as of December 31, 2004

Low High

Estimated Enterprise Value $ 4,054 $ 4,336

Pro Forma Capitalization New Exit Revolver $ -- $ -- New Exit Term Loan 828 828 New Tranche A Senior Secured Term Loans, net of discount 1,263 1,263 New Junior Secured PIK Notes, net of discount 224 224 Reduction in Equity Value Arising from Proposed UK Settlement(2) 200 200 Vendor Note 60 60 Foreign Debt 24 24

Total Debt 2,599 2,599 Plus: Excess Cash(3) 382 382

RESIDUAL EQUITY VALUE $ 1,837 $ 2,119

(1) The Plan Proponents consist of the Company, the Official Committee of Unsecured Creditors, the Asbestos Claimants Committee, JP Morgan Chase Bank as the administrative agent for the

holders of pre-petition bank claims, the Future Claimants Representative and the Official Committee of Equity Security Holders. (2) Pursuant to the terms of the recently proposed UK settlement, the T&N Pension Scheme would be assumed by the Company and conditions would apply related to the funding of the T&N

Pension Scheme (the "Proposed UK Settlement"). For purposes of this valuation, we have assumed the Proposed UK Settlement is implemented, and we estimate an equity valuation impact of the Proposed UK Settlement as it relates to the T&N Pension Scheme to be approximately $200 million.

(3) Net of $160 million minimum operational cash balance and includes approximately $40 million note receivable from the Trust.

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

Estimated as of December 31, 2004 Low High

Residual Equity Value $ 1,837 $ 2,119

Black Scholes Warrant Valuation 21 30

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

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

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

Black Scholes Warrant Valuation

Low High

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

Total Value of Warrants $ 21 $ 30

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

Cap on Non-Noteholder U.S. Unsecured Claims $ 258.0 Recovery 35%

Maximum Cash Payout $ 90.3

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

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

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

Sales $ 5,184 $ 5,546 $ 5,886 $ 5,935 $ 6,089 $ 6,230 % Growth of Sales 1.8% 7.0% 6.1% 0.8% 2.6% 2.3% Gross Margin 1,048 1,175 1,214 1,246 1,404 1,450

% of Sales 20.2% 21.2% 20.6% 21.0% 23.1% 23.3% Selling, General and Admin. Expenses 817 872 903 898 879 859

% of Sales 15.8% 15.7% 15.3% 15.1% 14.4% 13.8% Other Expenses / (Income) (21) (44) (41) (40) (42) (43) Amortization 14 17 17 17 17 17 EBIT(3) 238 329 335 372 550 617

% of Sales 4.6% 5.9% 5.7% 6.3% 9.0% 9.9% EBITDA(4) 512 637 664 683 860 929

% of Sales 9.9% 11.5% 11.3% 11.5% 14.1% 14.9% Capital Expenditures 339 301 298 297 299 292 (1) Financial projections assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries. (2) 2002A-2004E results are presented pro forma for certain “fresh start” accounting adjustments relating to pension expense. Excluding these adjustments, EBITDA for 2002A,

2003A and 2004E would be $485 million, $549 million and $585 million, respectively. 2005P-2007P results are presented with “fresh start” accounting adjustments relating to pension expense, inventory and health insurance (FAS 106) and assume the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries.

(3) EBIT is defined as earnings before interest, income taxes, extraordinary items and certain nonrecurring items such as restructuring and impairment charges, Chapter 11 and Administration related reorganization expenses and gains or losses on the sales of businesses.

(4) EBITDA is defined as EBIT plus depreciation and amortization.

VALUATION ANALYSIS

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VALUATION ANALYSIS Valuation Methodology

While several generally accepted valuation techniques for estimating enterprise value were considered, Jefferies primarily considered three methodologies: Comparable Company Analysis, Comparable M&A Transaction Analysis and Discounted Cash Flow Analysis − Comparable Company Analysis

• Evaluates the current multiples of comparable public companies and applies those multiples to the operating results of the subject company

− Comparable M&A Transaction Analysis • Evaluates the trading multiples of comparable public company merger and acquisition transactions and applies those

multiples to the operating results of the subject company − Discounted Cash Flow Analysis

• Evaluates the projected operating results of the subject company and discounts its future cash flows to present value at a required rate of return

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

Jefferies used adjusted operating data for 2004E-2007P to: − Account for the impact of certain “fresh start” adjustments related to inventory, pension expense and health insurance (FAS

106); and − Reflect the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries

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VALUATION ANALYSIS Weighting Methodology

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

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

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

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VALUATION ANALYSIS Comparable Company Valuation Analysis ($ in Millions)

Comparable companies’ operating data have been adjusted to exclude unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul’s “fresh start” adjusted operating data The following multiples were chosen for comparison on a latest twelve month period (“LTM”) ended June 30, 2004 basis Enterprise values are calculated using mean and median multiples applied to Federal-Mogul’s estimated 2004 results Jefferies attributes a 35% weighting for the Comparable Company Analysis in the Concluded Range of Valuation

Enterprise Value / LTM Revenue EBITDA EBIT Free Cash Flow(1)

High 1.3x 9.5x 15.7x 14.2x Low 0.1x 2.9x 4.9x 5.8x Trimmed Mean(2) 0.4x 4.8x 9.0x 8.8x Mean 0.5x 5.0x 9.2x 9.0x Median 0.4x 4.7x 8.5x 7.7x Projected Bankruptcy Exit Date – As of 12/31/04 2004E Operating Data $ 5,886 $ 664 $ 335 $ 366 Implied Enterprise Value – Mean(3) $ 2,943 $ 3,320 $ 3,082 $ 3,294 Implied Enterprise Value – Median(3) $ 2,354 $ 3,121 $ 2,848 $ 2,818 (1) Free cash flow is defined as EBITDA minus capital expenditures. (2) Trimmed mean is defined as the average of the values, excluding the highest and lowest values. (3) If enterprise value was calculated using an estimate of excess cash for the comparable companies, the Enterprise Value / LTM EBITDA median and mean multiples would be 4.9x and 5.2x,

respectively. Implied enterprise value based upon the Enterprise Value / LTM EBITDA median and mean multiples assuming an adjustment for excess cash would be $3.3 billion and $3.5 billion, respectively. These calculations use a definition of excess cash as book value cash less minimum required cash. Minimum required cash equals the lessor of: book value cash as of prior year end, current book value cash or 1.5% of sales.

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

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

The following multiples were chosen for comparison based on the LTM period prior to the announcement of each of the selected transactions

Enterprise values are calculated using mean and median multiples applied to Federal-Mogul’s estimated 2004 results

Jefferies attributes a 10% weighting for the Comparable M&A Transaction Analysis in the Concluded Range of Valuation

Enterprise Value / LTM Revenue EBITDA EBIT Free Cash Flow(1)

High 1.2x 7.8x 13.6x 23.1x Low 0.3x 3.7x 6.0x 6.8x Trimmed Mean(2) 0.7x 6.5x 9.9x 11.0x Mean 0.7x 6.3x 9.9x 12.0x Median 0.7x 6.7x 9.3x 9.7x

Projected Bankruptcy Exit Date – As of 12/31/04 2004E Operating Data $ 5,886 $ 664 $ 335 $ 366 Implied Enterprise Value – Mean $ 4,120 $ 4,183 $ 3,317 $ 4,392 Implied Enterprise Value – Median $ 4,120 $ 4,449 $ 3,116 $ 3,550 (1) Free cash flow is defined as EBITDA minus capital expenditures. (2) Trimmed mean is defined as the average of the values, excluding the highest and lowest values.

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

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VALUATION ANALYSIS

Discounted Cash Flow Valuation Analysis – Overview of Calculation

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

Distributable Cash Flows − Calculated using projected annual operating income plus depreciation and amortization plus net changes in working capital less

projected capital expenditures less restructuring payments plus the net impact of pensions and other assets/liabilities

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

Analysis and the Comparable M&A Transaction Analysis

Discount Rate − The Company’s cash flows and terminal value were discounted to present values at a weighted average cost of capital

(“WACC”) of 11.0 % to determine enterprise value

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VALUATION ANALYSIS Discounted Cash Flow Valuation Analysis

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

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

Terminal EBITDA Multiple Projected Bankruptcy Exit Date

12/31/2004 Weighted Average Cost of Capital 6.0x 6.5x

10.0% $ 4,747 $ 5,094

11.0% $ 4,624 $ 4,962

12.0% $ 4,506 $ 4,835

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

APPENDIX

COMPARABLE COMPANY VALUATION ANALYSIS

31

COMPARABLE COMPANY VALUATION ANALYSIS Selection of Comparable Companies

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

Criteria Resulting

Companies(1)

Relevant Industry Sector(2) 74 Sales Greater Than Or Equal to $1.0 Billion 28 Relevant Product Focus 20 Excludes Bankruptcy / No Operations 18 Relevant Customer Concentration / Mix(3) 16 Public Companies 14 (1) Reflects cumulative number of companies that satisfy criteria including criteria on previous lines. (2) Reflects companies within the following SIC codes:

• 3465: Automotive Stampings • 2396: Automotive Trimmings, Apparel Findings and Related Parties • 3594: Fluid Power Pumps and Motors • 3714: Motor Vehicle Parts and Accessories • 5013: Motor Vehicle Supplies and New Parts

(3) Excludes companies with major customers outside automotive industry.

32

COMPARABLE COMPANY VALUATION ANALYSIS Comparable Company Descriptions

Comparable Companies Description

American Axle & Manufacturing Holdings, Inc.

American Axle & Manufacturing Holdings, Inc. is a global Tier I supplier to the automotive industry. The Company manufactures, engineers, designs and validates driveline systems and related powertrain components and modules for light trucks, sport utility vehicles (“SUVs”) and passenger cars. Driveline systems include components that transfer power from the transmission and deliver it to the drive wheels. The Company's driveline and related powertrain products include axles, modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and forged products. The Company is the principal supplier of driveline components to General Motors Corporation (“GM”) for its rear-wheel drive light trucks and SUVs manufactured in North America, supplying substantially all of GM's rear axle and front four-wheel-drive/all-wheel-drive axle requirements for these vehicle platforms in 2003.

ArvinMeritor, Inc. ArvinMeritor, Inc. is a global supplier of a range of integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers (“OEMs”) and certain aftermarkets. The Company also provides coil-coating applications to the transportation, appliance, construction, heating, ventilation and air conditioning, and doors industries. ArvinMeritor serves OEM customers worldwide, including truck OEMs, light vehicle OEMs, trailer producers and specialty vehicle manufacturers and certain aftermarkets.

BorgWarner, Inc. BorgWarner, Inc. is a global Tier I supplier of highly engineered systems and components, primarily for vehicle powertrain applications. The Company's products fall into five operating segments: Morse TEC, Air/Fluid Systems, Cooling Systems, TorqTransfer Systems and Transmission Systems. These products are manufactured and sold worldwide, primarily to OEMs of passenger cars, sport utility vehicles, trucks and commercial transportation products. The Company operates manufacturing and technical facilities in 43 locations in 14 countries serving customers in North America, South America, Europe and Asia, and is an original equipment supplier to major automotive OEMs worldwide.

Collins & Aikman Corporation Collins & Aikman Corporation is engaged in the design, engineering and manufacturing of automotive interior components, including instrument panels, fully assembled cockpit modules, floor and acoustic systems, automotive fabric, interior trim and convertible top systems. Sales are diversified among all North American OEMs, transplants such as Toyota, Honda and Nissan and major Tier I integrators. The Company has more than 115 plants and facilities worldwide and conducts all of its operating activities through its wholly owned subsidiary, Collins & Aikman Products Co. The Company markets the majority of its products to customers through a single global commercial operations group that supplies products from four primary categories: plastic components and cockpits, carpet and acoustics, automotive fabrics and convertible top systems.

Dana Corporation Dana Corporation is an independent supplier of modules, systems and components for light, commercial and off-highway vehicle OEMs globally and for related OEM service customers. Its products are used in passenger cars and vans, sport-utility vehicles, light, medium and heavy trucks and a wide range of off-highway vehicles. In addition, Dana is an aftermarket supplier in the North American market. Nearly all of its aftermarket operations have been conducted through the Automotive Aftermarket Group (“AAG”). In December 2003, the Company announced its intention to sell substantially all of the AAG. The remaining portion of the AAG, which distributes engine hard parts, has become a part of Dana's engine and fluid management operations. The Company's continuing operations are organized into three market-focused strategic business units: Automotive Systems Group, Engine and Fluid Management Group and Heavy Vehicle Technologies and Systems Group. On July 9, 2004, Cypress Group agreed to purchase the AAG from the Company for approximately $1.1 billion. The transaction is currently pending. Operating results present the AAG as a discontinued operation.

33

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

Comparable Companies Description

Delphi Corporation Delphi Corporation is a global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers. During 2003, the Company operated its business along three segments: the Dynamics, Propulsion and Thermal Sector; the Electrical, Electronics, Safety and Interior Sector; and the Automotive Holdings Group. The Dynamics, Propulsion and Thermal Sector include selected businesses from Delphi's energy and engine management systems, chassis, steering and thermal systems product lines. The Electrical, Electronics, Safety and Interior Sector include selected businesses from the Company's automotive electronics, audio, consumer and aftermarket products, communication systems, safety and power, and signal distribution systems product lines. The Automotive Holdings Group is responsible for the production of halfshafts, condensers, batteries, filters, spark plugs, generators and compressors.

Dura Automotive Systems, Inc. Dura Automotive Systems, Inc., incorporated in 1994, is an independent designer and manufacturer of driver control systems for the global automotive industry. Dura is also a global supplier of seating control systems, engineered assemblies, structural door modules and integrated glass systems. Although a portion of Dura's products are sold directly to OEMs as finished components, Dura uses most of its products to produce “systems” or “subsystems,” which are groups of component parts located throughout the vehicle that operate together to provide a specific vehicle function. Systems produced by Dura include glass, door, pedal, parking brake, transmission shift, seat adjusting and latch. Dura's principal product categories are driver control systems, seating control systems, engineered assemblies, structural door modules, exterior trim systems and mobile products.

Eaton Corporation Eaton Corporation is a global diversified industrial manufacturer of fluid power systems; electrical power quality, distribution and control systems; automotive engine air management and fuel economy systems, and intelligent drivetrain systems for fuel economy and safety in trucks. Eaton’s principal markets for its fluid power, automotive and truck products are OEMs and aftermarket customers of aerospace products and systems, off-highway agricultural and construction vehicles, industrial equipment, passenger cars and heavy-, medium- and light-duty trucks. The principal markets for Eaton's industrial and commercial controls products are industrial, construction, commercial, automotive and government customers.

Lear Corporation, Inc. Lear Corporation is an automotive interior systems supplier. It has capabilities in all five principal segments of the automotive interior market: seat systems, flooring and acoustic systems, door panels, instrument panels and cockpit systems, and overhead systems. The Company is also a global supplier of automotive electronic and electrical distribution systems. As a result of these capabilities, Lear can offer its customers fully integrated automotive interiors, including electronic and electrical distribution systems. As a total interior integrator, the Company works closely with the customer on the design and is responsible for the engineering, component/module sourcing, manufacturing and delivery of automotive interiors. The Company's customers include automotive manufacturers such as General Motors, Ford, DaimlerChrysler, BMW, Fiat, PSA, Volkswagen, Renault/Nissan, Toyota and Subaru.

Magna International, Inc. Magna International, Inc. designs, engineers and manufactures a complete range of automotive components, assemblies, modules and systems, and engineers and assembles complete vehicles. Its products and services are sold primarily to manufacturers of cars and light trucks in North America, Europe, South America and Asia. The Company's automotive operations are conducted through six automotive systems groups, further segmented between public and wholly owned automotive systems groups. In addition to its automotive operations, Magna conducts certain non-automotive operations through its subsidiary, Magna Entertainment Corp., which owns and operates thoroughbred racetracks, and supplies, via simulcasting, live racing content to the growing inter-track, off-track and account wagering markets.

34

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

Comparable Companies Description

Tenneco Automotive, Inc. Tenneco Automotive, Inc. is primarily engaged in the manufacture of automotive emissions control and ride control products and systems for both the original equipment market and the replacement market or aftermarket. As an automotive parts supplier, the Company designs, markets and sells individual component parts for vehicles, as well as groups of components that are combined as modules or systems within vehicles. These parts, modules and systems are sold globally to the vast majority of vehicle manufacturers and throughout all aftermarket distribution channels. Monroe ride control products and Walker exhaust products are two of Tenneco's brand names. It also offers other brands such as Monroe Sensa-Trac and Reflex (shock absorbers and struts), Quiet-Flow (mufflers), DynoMax (performance exhaust products), Rancho (ride control products for the high-performance, light-truck market) and Clevite (elastomeric vibration control components).

Tower Automotive, Inc. Tower Automotive, Inc. is engaged in the design and production of structural components and assemblies used by automotive OEMs. The Company's current products include automotive body structural stampings and assemblies, including exposed sheet metal (Class A) components, lower vehicle structural stampings and assemblies, suspension components, modules and systems. The Company's products generally can be classified into four categories: body structures and assemblies, lower vehicle structures, suspension and powertrain modules and suspension components.

TRW Automotive, Inc. TRW Automotive Holdings Corp. is a United States-based international business providing advanced technology products and services for the automotive markets. The Company designs, manufactures and sells a range of steering, suspension and braking products, seat belts, airbags, steering wheels, safety electronics, engine valves, engineered fastening body control systems and other components and systems. These products are primarily used in the manufacture of light vehicles, consisting of passenger cars and light trucks. The principal customers for the Company's automotive products are the North and South American, European and Asian vehicle manufacturers (VMs). Among its largest customers are Ford Motor Company, DaimlerChrysler AG, Volkswagen AG, General Motors Corporation and Renault-Nissan BV. TRW conducts substantially all of its operations through its subsidiaries and along three operating segments: Chassis Systems, Occupant Safety Systems and Automotive Components.

Visteon Corporation Visteon Corporation is a global supplier of automotive systems, modules and components to vehicle manufacturers and the automotive aftermarket. The Company operates in two business segments: Automotive Operations and Glass Operations. The Automotive Operations segment provides automotive systems, modules and components in the following product areas: climate control, interior, exterior, powertrain, chassis and electronics. Its products are featured on vehicles built by many automotive manufacturers, including Ford Motor Company, General Motors, Toyota, DaimlerChrysler, Volkswagen, Honda, Renault, Nissan, Hyundai, Peugeot, Mazda and BMW. The Automotive Operations segment accounted for 97% of the Company's 2003 total sales. The Glass Operations segment designs, produces and distributes automotive glass products for Ford and aftermarket customers, and float glass for commercial architectural and automotive applications. Glass Operations accounted for 3% of 2003 total sales.

35

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

Share Price Market Total Preferred Enterprise9/30/04 Capitalization Debt Stock Cash(1) Value(2)

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

(2) Enterprise Value is defined as market capitalization plus total debt plus preferred stock less book value cash. Where available, market values of debt (if less than par) and equity securities have been used.

(1) Represents book value of cash. If an assumption for estimating the amount of excess cash on hand for the comparable companies were made, enterprise values would be higher by the amount of the implied minimum required cash. See page 25, footnote 3.

36

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

LTM

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

Mean 9.1% 5.2% 4.7%Median 8.6% 5.1% 4.6%

Trimmed Mean (3) 9.1% 5.3% 4.8%High 14.3% 9.1% 10.2%Low 3.6% -0.1% -1.0%

(2) Free cash flow is defined as EBITDA minus capital expenditures.(3) Trimmed mean is defined as the average of the values, excluding the high and low values.

(1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul's "fresh start" adjusted operating data.

37

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

Enterprise Value / LTM(2)

Revenue EBITDA EBIT FCF(3)

American Axle & Manufacturing Holdings, Inc. 0.5x 4.1x 6.2x 7.4xArvinmeritor, Inc. 0.3x 5.1x 8.5x 7.7xBorgWarner, Inc. 0.9x 6.0x 9.4x 11.8xCollins & Aikman Corp. 0.5x 5.6x 9.9x 12.2xDana Corporation 0.5x 7.2x 15.7x 14.2xDelphi Corporation 0.3x 3.9x 8.9x 7.5xDura Automotive Systems, Inc. 0.4x 5.0x 8.0x 7.7xEaton Corporation 1.3x 9.5x 14.1x 12.6xLear Corporation, Inc. 0.3x 4.8x 6.9x 7.8xMagna International, Inc. 0.3x 3.4x 4.9x 6.3xTenneco Automotive, Inc. 0.5x 4.6x 8.3x 6.9xTower Automotive, Inc. 0.4x 4.6x 12.8x NMTRW Automotive, Inc. 0.4x 3.7x 6.1x 5.8xVisteon Corporation 0.1x 2.9x NM NM

Mean 0.5x 5.0x 9.2x 9.0xMedian 0.4x 4.7x 8.5x 7.7xTrimmed Mean (4) 0.4x 4.8x 9.0x 8.8xHigh 1.3x 9.5x 15.7x 14.2xLow 0.1x 2.9x 4.9x 5.8x

(2) Free cash flow is defined as EBITDA minus capital expenditures.(3) Trimmed mean is defined as the average of the values, excluding the high and low values.

(1) LTM is defined as the latest twelve months ended June 30, 2004. Operating data excludes unusual or non-recurring charges and actuarial gain/loss and amortization of prior service cost relating to pension expense to ensure consistency with Federal-Mogul's "fresh start" adjusted operating data.

COMPARABLE M&A TRANSACTION VALUATION ANALYSIS

39

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

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

LTM at Time of AcquisitionRevenue EBITDA EBIT FCF(2) EBITDA Margin EBIT Margin FCF Margin

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

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

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

40

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

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

Date Transaction Transaction Value /

Announced Target Acquiror Value Revenues EBITDA(2) EBIT FCF(3)

8/17/98 Cooper Automotive Federal-Mogul Corp. 1,900.0$ 1.0x 6.5x 9.2x 8.4x2/1/99 Aeroquip-Vickers Eaton Corp. 1,986.0 0.9x 7.3x 10.4x 15.4x

3/16/99 United Technologies Automotive Lear Corp. 2,305.4 0.8x 7.8x 13.6x 23.1x4/6/00 Arvin Industries, Inc. Meritor Automotive, Inc. 1,116.6 0.3x 3.7x 6.0x 6.8x8/2/00 MascoTech, Inc. Heartland Industrial Partners LP 2,053.0 1.2x 6.7x 9.3x 11.0x8/7/01 Textron Automotive Trim Collins & Aikman Corp. 1,208.4 0.7x 6.9x 11.7x 15.3x

10/16/02 The Torrington Company Timken Co. 829.3 0.7x 5.6x 8.4x 7.7x11/17/02 TRW, Inc. - Automotive Parts Blackstone Group 4,725.0 0.5x 4.8x 9.2x 8.2x

7/9/04 Dana Corporation (Automotive Aftermarket Group)(4) Cypress Group 1,100.0 0.5x 7.6x 11.4x NA

Mean 0.7x 6.3x 9.9x 12.0xMedian 0.7x 6.7x 9.3x 9.7xTrimmed Mean(1) 0.7x 6.5x 9.9x 11.0xHigh 1.2x 7.8x 13.6x 23.1xLow 0.3x 3.7x 6.0x 6.8x

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

DISCOUNTED CASH FLOW VALUATION ANALYSIS

42

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

DCF analysis using a 6.0x terminal value EBITDA multiple

Projected Terminal 2004 2005 2006 2007 Period

EBITDA Growth % 2.9% 25.9% 8.0%Distributable Cash Flow Growth % NA 38.3% 49.7%

EBITDA $664 $683 $860 $929 $924Less: Depreciation and Amortization (329) (312) (310) (312)

EBIT 335 372 550 617Income Taxes(1) (148) (195) (248)

Net Income 223 355 369

Plus: Depreciation and Amortization 312 310 312(Less): Capital Expenditures (297) (299) (292)Plus/(Less): Restructuring Payments (52) (30) (7)Plus/(Less): Changes in Working Capital 66 14 8Plus/(Less): Net Pension Impact (119) (95) (25) Plus/(Less): Other Assets/Liabilities(3) (22) (28) (27) Plus/(Less): "Fresh Start" Adjustments (Inventory and FAS 106) 50 (5) (5) Distributable Cash Flow $161 $222 $333

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

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

(1) Excludes tax shield resulting from interest expense, assuming 35% tax rate.

(3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.

(2) Reflects adjusted EBITDA which excludes the impact of “fresh start” adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries.

(2)

43

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

DCF analysis using a 6.5x terminal value EBITDA multiple

Projected Terminal 2004 2005 2006 2007 Period

EBITDA Growth % 2.9% 25.9% 8.0%Distributable Cash Flow Growth % NA 38.3% 49.7%

EBITDA $664 $683 $860 $929 $924Less: Depreciation and Amortization (329) (312) (310) (312)

EBIT 335 372 550 617Income Taxes(1) (148) (195) (248)

Net Income 223 355 369

Plus: Depreciation and Amortization 312 310 312(Less): Capital Expenditures (297) (299) (292)Plus/(Less): Restructuring Payments (52) (30) (7)Plus/(Less): Changes in Working Capital 66 14 8Plus/(Less): Net Pension Impact (119) (95) (25) Plus/(Less): Other Assets/Liabilities(3) (22) (28) (27) Plus/(Less): "Fresh Start" Adjustments (Inventory and FAS 106) 50 (5) (5) Distributable Cash Flow $161 $222 $333

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

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

(1) Excludes tax shield resulting from interest expense, assuming 35% tax rate.

(3) Includes primarily minority JV EBITDA reinvested for capital expenditures and working capital and other miscellaneous expenses.

(2) Reflects adjusted EBITDA which excludes the impact of “fresh start” adjustments relating to health insurance (FAS 106) and assumes the Proposed UK Settlement and related assumption of the T&N Pension Scheme by T&N and certain of its subsidiaries.

(2)

44

DISCOUNTED CASH FLOW VALUATION ANALYSIS Discount Rate Derivation

Company Risk Premium

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

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

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

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

45

DISCOUNTED CASH FLOW VALUATION ANALYSIS Beta Derivation(1)

Calculation of Unlevered Beta

Company Ticker Beta Levered (2)Marginal Tax

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

Mean 1.29 35.0% 42.7% 57.3% 0.78 Median 1.14 35.0% 33.1% 66.9% 0.87 Trimmed Mean(3) 1.25 35.0% 41.9% 58.1% 0.79 High 2.13 35.0% 94.0% 6.0% 1.21 Low 0.87 35.0% 0.0% 100.0% 0.14

(1) Excludes TRW Automotive due to lack of trading history and available data.(2) Two-year adjusted beta per Bloomberg, Inc.(3) Trimmed mean is defined as the average of the values, excluding the high and low values.(4) Excludes peer companies with an average trading volume over the past six months of less than 100,000.

(4)

(4)

(4)

(4)

(4)

(4)(4)

(4)(4)(4)

(4)

(4)

(4)

(4)

(4)

46

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

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

BlendedTotal Debt Rate Average

New Exit Revolver -$ 6.216% (1) 0.000%New Exit Term Loan 828.0 6.466% (1) 2.288%New Tranche A Term Loans, net of discount 1,263.3 9.000% (2) 4.860%New Junior Secured PIK Notes, net of discount 224.2 12.000% (2) 1.150%Foreign Debt 24.0 8.000% 0.082%

$2,339.5 (3) 8.380%

(2) Based upon an implied market rate of return derived from a comparable yield analysis.

(1) Reflects average forward LIBOR yields to interpolate fixed rate equivalent for Exit Facilities assuming LIBOR + 225 bps for the ABL Facility and L+250 bps for the Term Loan.

(3) Represents principal amount of total debt, net of discount and excludes approximately $60.2 million vendor note which will be non-interest bearing.

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

RESTRUCTURED DEBT DISCOUNT ANALYSIS

48

RESTRUCTURED DEBT DISCOUNT ANALYSIS

Summary

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

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

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

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

In examining the yield differential between the New Tranche A Loans and the New PIK Notes, Jefferies examined the following: − (i) Yield differential between senior notes and subordinated notes for leveraged automotive industry issues – 233 bps mean

yield differential − (ii) Yield differential between holding company and operating company debt issues – 327 bps mean yield differential − Comparable yield on New PIK Notes is assumed to be 12.000%, based on 300 bps yield differential

49

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

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

New Tranche A Loans New PIK Notes

Total New Tranche A Loans and New PIK

Notes(1)

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

50

RESTRUCTURED DEBT DISCOUNT ANALYSIS High Yield Market Overview

In selecting appropriate yields at which to discount the Restructured Debt, Jefferies examined the recent condition of the high yield market The high yield market in 2003 was one of the strongest markets in the history of high yield debt

− 508 deals were priced for $138.7 billion − Mutual fund net inflows totaled $20.1 billion – 12 weeks with over $1 billion in high yield inflows Despite strong 2003 performance, the high yield market performance has been mixed

− Net outflows of cash from high yield mutual funds In determining comparable yields for the Restructured Debt, Jefferies examined average yields since September 30, 2003

US Treasury Yields US Treasury Yield Curves

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

1987 1988 1989 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2004

5-Year Treasury 10-Year Treasury 30-Year Treasury

% Yield

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1 2 3 5 7 10 30

10/01/04 04/01/04 10/01/03

%

6 Month

3Month

6 Month

6 Month

3Month

3Month

Date 3-Month 6-Month 1-Year(1) 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year(2)

10/01/04 1.69% 1.98% 2.20% 2.62% 2.88% 3.42% 3.73% 4.19% 4.94% 04/01/04 0.94% 1.02% 1.30% 1.85% 2.27% 3.13% 3.53% 4.14% 4.97% 10/01/03 0.93% 1.01% 1.22% 1.63% 2.11% 3.09% 3.53% 4.19% 5.09%

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

on the 30-year treasury is based on the last issued 30-year from February 15, 2001 which matures in 2031.

51

RESTRUCTURED DEBT DISCOUNT ANALYSIS Debt Issues of Leveraged Automotive Suppliers(1) ($ in Millions)

Issuer Type of Security Coupon Current AmountDana Corp. Senior Notes 6.500 150.0$ Dana Corp. Senior Notes 6.500 350.0 Dana Corp. Senior Notes 10.125 250.0 Dana Corp. Senior Notes 9.000 575.0 Dana Corp. Senior Notes 7.000 197.0 Dana Corp. Senior Notes 7.000 375.0 Delco Remy Intl Inc. Senior Notes 8.625 145.0 Delco Remy Intl Inc. Senior Subordinated Notes 11.000 165.0 Delco Remy Intl Inc. Senior Subordinated Notes 9.375 150.0 Dura Oper Corp Senior Notes 8.625 450.0 Dura Oper Corp Senior Subordinated Notes 9.000 458.5 Metaldyne Corp Senior Notes 10.000 150.0 Metaldyne Corp Senior Subordinated Notes 11.000 250.0 Tenneco Automotive Inc. Senior Secured Notes 10.250 475.0 Tenneco Automotive Inc. Senior Subordinated Notes 11.625 500.0 TRW Automotive Acq. Corp. Senior Notes 9.375 925.0 TRW Automotive Int Holdings Subordinated PIK Notes 8.000 600.0 TRW Automotive Acq. Corp. Senior Subordinated Notes 11.000 300.0 TRW Automotive Acq. Corp. Senior Notes (Euro) 10.125 200.0 EuroTRW Automotive Acq. Corp. Senior Subordinated Notes (Euro) 11.750 125.0 Euro

Yield Differential Between Senior Notes and Subordinated Notes(5)

Delco Remy Intl Inc.Dura Oper CorpMetaldyne CorpTenneco Automotive Inc.TRW Automotive

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

Current Data - 9/30/2004 Average from 9/30/03 - 9/30/04Maturity Date Price Yield To Maturity Yield To Worst Price Yield To Maturity Yield To Worst Moody's Standard & Poor's

3/15/08 105.880 4.640 4.640 103.900 5.370 5.370 Ba3 BB3/1/09 105.750 5.030 5.030 103.920 5.570 5.570 Ba3 BB

3/15/10 113.500 7.100 3.920 114.260 7.140 4.800 Ba3 BB8/15/11 120.750 5.350 5.350 117.270 6.060 6.060 Ba3 BB3/15/28 100.500 6.960 6.960 96.230 7.350 7.350 Ba3 BB3/1/29 100.500 6.960 6.960 96.340 7.330 7.330 Ba3 BB

12/15/07 102.000 7.900 5.670 101.710 8.060 7.200 B2 CCC+5/1/09 105.000 9.620 9.320 103.630 10.060 9.690 B3 CCC+

4/15/12 98.000 9.750 9.750 98.180 9.710 9.700 B3 CCC+4/15/12 99.000 8.810 8.810 103.540 8.030 7.880 B1 B+5/1/09 89.000 12.200 12.200 97.630 9.620 9.550 B2 B

11/1/13 93.000 11.250 11.250 88.140 10.110 10.080 B3 B6/15/12 79.500 15.660 15.660 99.430 13.480 13.480 Caa1 B7/15/13 114.000 8.000 7.160 114.070 8.060 7.370 B2 B-

10/15/09 105.500 10.200 9.480 107.010 9.940 6.840 B3 B-2/15/13 114.250 7.090 7.090 113.970 7.200 7.200 B1 BB-

2018 NA 12.000 12.000 NA 12.000 12.000 NA NA2/15/13 119.000 7.860 7.860 118.480 8.020 8.020 B2 BB-2/15/13 NA NA NA NA NA NA B1 BB-2/15/13 NA NA NA NA NA NA B2 BB-

Mean(2) 9.523 9.164 9.073 8.603Median(2) 9.095 8.652 9.037 8.789Trimmed Mean(2)(3) 9.420 9.014 9.044 8.439High(2) 13.455 13.455 11.795 11.780Low(2) 6.007 5.477 6.470 6.080

1.850 4.080 2.000 2.5003.390 3.390 1.590 1.6704.410 4.410 3.370 3.4002.200 2.320 1.880 NM2.840 2.840 2.810 2.810

Mean(2) 2.938 3.408 2.330 2.595Median(2) 2.840 3.390 2.000 2.655Trimmed Mean(2)(3) 2.810 3.437 2.230 2.655High(2) 4.410 4.410 3.370 3.400Low(2) 1.850 2.320 1.590 1.670

(3) (3)

52

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003

Issuer Issue Date Type of SecurityKoppers Industries, Inc. 9/30/03 144a Senior Secured NotesPower Receivable Finance 9/30/03 144a Senior Subordinated NotesDynegy Holdings Inc 9/30/03 144a Second Priority Senior Secured NotesDynegy Holdings Inc 9/30/03 144a Second Priority Senior Secured NotesDynegy Holdings Inc. 9/30/03 144a Second Priority Senior Secured NotesHM Publishing Co. 9/30/03 144a Senior Discount NotesScotts Co. (The) 10/1/03 144a Senior Subordinated NotesLe Groupe Videotron Ltee 10/2/03 Senior NotesB/E Aerospace Inc. 10/2/03 144a Senior NotesIMCO Recycling Inc. 10/2/03 144a Senior Secured NotesLBI Media Inc. 10/3/03 144a Senior Discount NotesParker Drilling Co. 10/3/03 144a Senior NotesVon Hoffman Corp. 10/7/03 144a Senior NotesMobile TeleSystems Finance SA 10/8/03 144a Senior Unsecured NotesUniversal Hospital Services, Inc. 10/8/03 144a Senior NotesPhibro Animal Health Corp. 10/10/03 144a Senior Secured NotesNorcraft Cos LP/ Norcraft Finance Corp 10/10/03 144a Senior Subordinated NotesLNR Property Corp. 10/15/03 144a Senior Subordinated NotesVicap S.A. de C.V. (Vitro S.A.) 10/15/03 144a Senior Unsecured NotesNationsrent, Inc. 10/16/03 144a Senior Secured NotesNextel Communications, Inc. 10/16/03 Senior NotesDRS Technologies, Inc 10/16/03 144a Senior Subordinated NotesNational Nephrology Associates Inc 10/16/03 144a Senior Subordinated NotesMetaldyne Corp. 10/20/03 144a Senior NotesInn of the Mountain Gods Resort & Casino 10/21/03 144a Senior NotesFisher Scientific International, Inc. 10/21/03 144a Senior Subordinated NotesParamount Resources Ltd 10/22/03 Senior NotesGenesis Healthcare Corp. 10/23/03 144a Senior Subordinated NotesKeystone Automotive Operations Inc 10/23/03 144a Senior Subordinated NotesOxford Automotive, Inc. 10/24/03 144a Senior Secured Second Lien NotesHost Marriott LP 10/27/03 144a Senior Notes (series J)Gaylord Entertainment Co 10/28/03 144a Senior NotesNeighborcare Inc (Genesis Health Ventures) 10/29/03 144a Senior Subordinated NotesNalco Co 10/29/03 144a Senior NotesNalco Co 10/29/03 144a Senior Subordinated NotesNalco Co 10/29/03 144a Senior NotesNalco Co 10/29/03 144a Senior Subordinated NotesDura Operating Corp. (Dura Automotive Systems) 10/29/03 144a Senior NotesSilgan Holdings, Inc. 10/30/03 144a Senior Subordinated NotesO'Charley's Inc 10/30/03 144a Senior Subordinated NotesTelex Communicatios Inc. 10/31/03 144a Senior Secured NotesCincinnati Bell Inc. 10/31/03 144a Senior Subordinated NotesAmerican Towers Inc. 11/3/03 144a Senior Subordinated NotesDex Media Inc 11/3/03 144a Senior NotesDex Media Inc 11/3/03 144a Senior NotesManitowoc Co. 11/3/03 Senior NotesRiver Rock Entertainment Authority 11/4/03 144a Senior NotesCharter Communications Holdings LLC/ Capital Corp. 11/4/03 144a Senior NotesPremcor Refining Group Inc. 11/5/03 144a Senior NotesPPC Escrow Corp. (Pilgrim's Pride) 11/6/03 Senior Subordinated NotesStratus Technologies 11/6/03 144a Senior NotesMichael Foods Inc. 11/6/03 144a Senior Subordinated NotesTriad Hospitals Inc 11/6/03 144a Senior Subordinated Notes

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry320.0 9.875 100.000 B2 B 10/15/13 9.875 593 Chemicals and Allied Products22.2 10.750 99.716 B1 BB+ 2/1/12 11.000 - Electric & Gas Utilities and Sanitary Services

100.0 9.875 104.250 B3 B- 7/15/10 8.917 556 Mining200.0 10.125 105.250 B3 B- 7/15/13 9.165 524 Mining200.0 10.125 105.250 B3 B- 7/15/13 9.165 524 Mining150.9 - 56.960 CAA1 B 10/15/13 11.500 745 Printing & Publishing200.0 6.625 100.000 BA3 B+ 11/15/13 6.625 268 Chemicals and Allied Products335.0 6.875 99.081 BA3 B+ 1/15/14 7.000 295 Communications175.0 8.500 100.000 B3 B+ 10/1/10 8.500 507 Manufacturing - Furniture & Fixtures210.0 10.375 99.383 B3 B- 10/15/10 10.500 704 Metals & Related Products68.4 - 58.456 B3 B- 10/15/13 11.000 681 Communications

175.0 9.625 100.000 B2 B- 10/1/13 9.625 545 Mining60.0 10.250 104.750 B2 B 3/15/09 8.916 603 Printing & Publishing

400.0 8.375 100.000 Ba3 B+ 10/14/10 8.375 527 Communications260.0 10.125 100.000 B3 B- 11/1/11 10.125 588 Other Services105.0 13.000 100.000 B2 B- 10/1/07 13.000 - Chemicals and Allied Products150.0 9.000 100.000 B3 B- 8/15/11 9.000 506 300.0 7.250 100.000 BA3 B+ 10/15/13 7.250 284 Financial Services225.0 11.750 98.556 B2 B- 11/1/13 12.000 759 Stone, Clay, Glass & Concrete Products250.0 9.500 100.000 B2 BB- 10/15/10 9.500 557 Business Services and Software500.0 6.875 100.000 B2 B+ 10/31/13 6.875 240 Communications350.0 6.875 100.000 B2 B 11/1/13 6.875 251 Metals & Related Products160.0 9.000 100.000 B3 B- 11/1/11 9.000 487 Other Services150.0 10.000 100.000 B3 B 11/1/13 10.000 565 Transportation Equipment200.0 12.000 100.000 CAA1 B 11/15/10 12.000 823 Hotels150.0 8.000 107.500 B2 B+ 9/1/13 6.747 286 Wholesale Trade - Durable Goods175.0 7.875 100.000 B2 B 11/1/10 7.875 416 Drilling and Exploration225.0 8.000 100.000 B3 B- 10/15/13 8.000 367 Other Services175.0 9.750 100.000 B3 B- 11/1/13 9.750 542 Retail Trade167.0 12.000 85.000 B3 CCC+ 10/15/10 15.600 - Metals & Related Products750.0 7.250 100.000 BA3 B+ 11/1/13 7.250 286 Hotels350.0 8.000 100.000 B3 B- 11/15/13 - 380 Hotels250.0 6.875 100.000 BA3 B+ 11/15/13 6.875 262 Chemicals and Allied Products200.0 7.750 100.000 B2 B 11/15/11 7.750 - Electric & Gas Utilities and Sanitary Services465.0 8.875 100.000 CAA1 B 11/15/13 8.875 - Electric & Gas Utilities and Sanitary Services665.0 7.750 100.000 B2 B 11/15/11 7.750 - Electric & Gas Utilities and Sanitary Services200.0 9.000 100.000 CAA1 B 11/15/13 9.000 - Electric & Gas Utilities and Sanitary Services50.0 8.625 100.000 B1 B+ 4/15/12 8.625 433 Transportation Equipment

200.0 6.750 100.000 B1 B+ 11/15/13 6.750 242 Metals & Related Products125.0 9.000 100.000 BA3 B 11/1/13 9.000 466 Retail Trade125.0 11.500 100.000 B3 B 10/15/08 11.500 824 Communications540.0 8.975 100.000 B3 B- 1/15/14 8.975 405 Communications400.0 7.250 100.000 B3 CCC 12/1/11 7.250 321 Communications500.0 8.000 100.000 CAA1 B 11/15/13 8.000 365 Communications250.0 - 64.393 CAA1 B 11/15/13 9.000 465 Communications150.0 7.125 100.000 B1 B+ 11/1/13 7.125 276 Electronic Equipment200.0 9.750 98.651 B2 B+ 11/1/11 10.000 599 Agriculture, Forestry and Fishing500.0 8.750 100.000 B3 CCC 11/15/13 8.750 446 Communications175.0 7.750 100.000 B2 B 2/1/12 7.750 360 Petroleum Refining100.0 9.250 100.000 B2 B+ 11/15/13 9.250 485 Agriculture, Forestry and Fishing170.0 10.375 100.000 B3 B 12/1/08 10.375 696 Business Services and Software150.0 8.000 100.000 B3 B- 11/15/13 8.000 359 Manufacturing - Food & Kindred Products600.0 7.000 100.000 B3 B 11/15/13 7.000 260 Other Services

53

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of Security Face AmountQuality Distribution LLC/ QD Capital Corp 11/6/03 144a Senior Subordinated Notes 125.0Tabletop Holdings, Inc. 11/6/03 144a Senior Secured Discount Notes 75.0Calpine Corp 11/6/03 144a 2nd Priority Senior Secured Notes 400.0Dollar Financial Group, Inc. 11/7/03 144a Senior Notes 220.0Terex Corp. 11/10/03 144a Senior Subordinated Notes 300.0Berry Plastics Corp. 11/10/03 144a Senior Subordinated Notes 95.2Sonic Automotive, Inc. 11/12/03 144a Senior Subordinated Notes 75.0Tekni-Plex, Inc. 11/12/03 144a Senior Secured Notes (2nd Priority) 275.0Steel Dynamics Inc. 11/14/03 144a Senior Notes 100.0Concentra Operating Corp. 11/17/03 144a Senior Subordinated Notes 30.0Crown Castle International Corp. 11/17/03 144a Senior Notes 300.0LNR Property Corp. 11/17/03 144a Senior Subordinated Notes 550.0Equistar Chemicals, L.P. 11/18/03 144a Senior Notes 250.0General Cable Corp 11/18/03 144a Senior Notes 285.0Poster Financial Group Inc (Golden Nugget) 11/18/03 144a Senior Secured Notes (2nd Lien) 155.0Nortek Holdings 11/19/03 144a Senior Discount Notes 515.0Georgia Gulf Corp. 11/19/03 144a Senior Notes 100.0Imax Corp. 11/19/03 144a Senior Notes 160.0Millicom International Cellular S.A. 11/19/03 144a Senior Notes 550.0MediaNews Group Inc 11/20/03 144a Senior Subordinated Notes 300.0Millar Western Forest Products, Ltd. 11/20/03 144a Senior Notes 190.0Pinnacle Foods Holding Corp 11/20/03 144a Senior Subordinated Notes 200.0J Ray McDermott S.A. 11/21/03 144a Senior Secured Notes 200.0North American Energy Partners 11/21/03 144a Senior Notes 200.0OMI Corp. 11/21/03 144a Senior Notes 200.0Penn National Gaming, Inc. 11/24/03 144a Senior Subordinated Notes 200.0Empresa Brasileira de Telecomunicacoes (Embratel) 11/24/03 144a Senior Notes 200.0General Nutrition Centers 11/25/03 144a Senior Subordinated Notes 215.0Jostens Holding Corp 11/25/03 144a Senior Discount Notes 247.2Hanover Compressor Co. 12/2/03 Subordinated Notes 262.6Six Flags, Inc. 12/2/03 144a Senior Notes 325.0Huntsman LLC 12/3/03 144a Senior Secured Notes 75.4Atrium Cos., Inc. 12/3/03 144a Senior Subordinated Notes 50.0Insight Midwest L.P. 12/4/03 144a Senior Notes 130.0Crown Castle International Corp. 12/4/03 144a Senior Notes 300.0Iron Mountain Inc. 12/4/03 144a Senior Subordinated Notes 170.0Tenneco Automotive, Inc. 12/8/03 144a Senior Secured Notes (2nd Lien) 125.0Granite Broadcasting Corp. 12/8/03 144a First Lien Notes 405.0SBA Communications Corp. 12/8/03 144a Senior Discount Notes 404.0Equinox Holdings Inc 12/9/03 Senior Notes 160.0Hanover Compressor Co. 12/9/03 Senior Notes 200.0Valeant Pharmaceuticals International 12/9/03 144a Senior Notes 300.0Blue Ridge Paper Pdts Inc 12/10/03 144a Senior Secured Notes 125.0THL Bedding Co./ Simmons Co. 12/10/03 144a Senior Subordinated Notes 200.0Bombardier Recreational Pdts 12/11/03 144a Senior Subordinated Notes 200.0WMC Finance Co. 12/11/03 144a Senior Notes 200.0Couche-Tard Financing Corp (Alimentation Couche-Tard Inc) 12/11/03 144a Senior Subordinated Notes (gtd) 350.0KRATON Polymers LLC/ Capital Corp 12/11/03 144a Senior Subordinated Notes 200.0Sensus Metering Systems Inc 12/11/03 144a Senior Subordinated Notes 275.0Ship Finance International Ltd (Frontline Ltd) 12/11/03 144a Senior Notes 580.0United Agri Products Inc 12/11/03 144a Senior Notes 225.0Great Lakes Dredge and Dock Corp. 12/12/03 144a Senior Subordinated Notes 175.0Land O'Lakes Inc 12/12/03 144a Senior Secured Notes (2nd Lien) 175.0

Cpn/Div Price Moody's S&P Maturity YTM Spread Industry9.000 100.000 B3 B- 11/15/10 9.000 509 Transportation Equipment

- 55.131 CAA1 B- 5/15/14 12.250 785 9.875 98.000 NR B 11/15/11 10.243 - 9.750 100.000 B3 B+ 11/15/11 9.750 558 Financial Services7.375 99.110 B3 B 1/14/13 7.500 305 Industrial & Commercial Machinery

10.750 112.000 B3 B- 7/15/12 8.169 519 Rubber & Plastic Products8.625 105.000 B2 B+ 8/15/13 7.750 335 Other Services8.750 100.000 B2 B- 11/15/13 8.750 435 Rubber & Plastic Products9.500 109.000 B2 B+ 3/15/09 7.034 386 Metals & Related Products9.500 106.500 B3 B- 8/15/10 8.057 427 Other Services7.500 96.603 B3 CCC 12/1/13 8.000 381 Communications7.250 100.500 BA3 B+ 10/15/13 7.166 341 Financial Services

10.625 104.685 B2 BB- 5/1/11 9.500 - Mining9.500 100.000 B2 B 11/15/10 9.500 595 Communications8.750 100.000 B2 B 12/1/11 8.750 490 Financial Services

- 67.849 CAA1 B- 5/1/11 10.000 633 Metals & Related Products7.125 100.000 B1 BB- 12/15/13 7.125 289 Chemicals and Allied Products9.625 100.000 B3 B- 12/1/10 9.625 607 Electronic Equipment

10.000 100.000 B3 B- 12/1/13 10.000 586 Communications6.875 99.133 B2 B+ 10/1/13 7.000 276 Printing & Publishing7.750 100.000 B3 B+ 11/15/13 7.750 356 Manufacturing - Paper & Allied Products8.250 100.000 B3 B 12/1/13 8.250 407 Manufacturing - Food & Kindred Products

11.000 97.064 B3 B- 12/15/13 11.500 737 Mining8.750 100.000 B2 B+ 12/1/11 8.750 469 Mining7.625 100.000 B1 B+ 12/1/13 7.625 349 Transportation6.875 98.496 B3 B 12/1/11 7.125 325 Other Services

11.000 99.049 B2 NR 12/15/08 11.250 - Electric & Gas Utilities and Sanitary Services8.500 100.000 B3 B- 12/1/10 8.500 474 Manufacturing - Food & Kindred Products

- 60.682 CAA2 B- 12/1/13 10.250 606 Miscellaneous Manufacturing- 69.307 CAA1 B- 3/31/07 11.375 - Business Services and Software

9.625 100.000 B2 B- 6/1/14 9.625 525 Other Services11.625 99.500 B2 B 10/15/10 11.720 783 Rubber & Plastic Products10.500 106.875 B3 B 5/1/09 5.880 +480 (WST) Stone, Clay, Glass & Concrete Products10.500 108.750 B2 B+ 11/1/10 8.039 421 Communications

7.500 98.750 B3 CCC 12/1/13 7.681 330 Communications6.625 96.500 B2 B 1/1/16 7.060 240 Business Services and Software

10.250 113.000 B2 CCC+ 7/15/13 7.775 351 Transportation Equipment9.750 98.782 B3 CCC 12/1/10 10.000 617 Communications

- 68.404 NR NR 12/15/11 9.750 572 Construction9.000 100.000 B3 B- 12/15/09 9.000 534 Other Services8.625 100.000 B3 B 12/15/10 8.625 471 Business Services and Software7.000 100.000 B1 BB- 12/15/11 7.000 307 Chemicals and Allied Products9.500 100.000 B2 B- 12/15/08 9.500 622 Manufacturing - Paper & Allied Products7.875 100.000 CAA1 B- 1/15/14 7.875 355 Manufacturing - Textiles8.375 100.000 B3 B- 12/15/13 8.375 415 Financial Services

11.750 100.000 B2 B- 12/15/18 11.750 855 Financial Services7.500 100.000 BA3 B 12/15/13 7.500 317 Manufacturing - Food & Kindred Products8.125 100.000 B3 B 1/15/14 8.125 380 Chemicals and Allied Products8.626 100.000 CAA1 B- 12/15/13 8.626 428 Miscellaneous Manufacturing8.500 100.000 B2 B 12/15/13 8.500 417 Transportation8.250 100.000 B3 B 12/15/11 8.250 425 Chemicals and Allied Products7.750 100.000 B3 B- 12/15/13 7.750 354 Construction9.000 100.000 B2 B 12/15/10 9.000 538 Manufacturing - Food & Kindred Products

54

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of SecurityMariner Health Care Inc. 12/12/03 144a Senior Subordinated NotesPathmark Stores Inc. 12/12/03 144a Senior Subordinated NotesYoung Broadcasting Inc. 12/12/03 144a Senior NotesEl Pollo Loco Inc 12/16/03 144a Senior Secured NotesNRG Energy Inc. 12/17/03 144a Senior Secured Notes (2nd Lien)Resolution Performance Products LLC 12/17/03 144a Senior Secured NotesAsbury Automotive Group Inc. 12/18/03 144a Senior Subordinated NotesNexstar Finance LLC/ Finance Inc (Nexstar Broadcasting) 12/18/03 144a Senior Subordinated NotesSuburban Propane Partners LP/ Suburban Energy Finance Corp 12/18/03 144a Senior NotesCSN Islands VII Corp. 1/8/04 144a Senior Unsecured NotesElizabeth Arden Inc 1/8/04 144a Senior Subordinated NotesCSK Auto, Inc. 1/9/04 144a Senior Subordinated NotesTelecomunicacoes de Minas Gerais (Telemig Celular S.A.)/Amazonia Celelular S.A. 1/12/04 144a BondsPrimus Telecommunications Group, Inc. 1/13/04 144a Senior NotesStar Gas Propane, L.P. / /Star Gas Finance Co. 1/13/04 144a Senior NotesNalco Finance Holdings LLC 1/15/04 144a Senior Discount NotesAmerican Casino & Entertainment Properties LLC 1/15/04 144a Senior Secured NotesCommunications and Power Industries, Inc. 1/15/04 144a Senior Subordinated NotesSeminis Vegetable Seeds Inc 1/15/04 144a Senior Subordinated NotesStation Casinos, Inc. 1/15/04 144a Senior Subordinated NotesVail Resorts Inc. 1/15/04 144a Senior Subordinated NotesNew ASAT (Finance) Ltd 1/16/04 144a Senior NotesVotorantim Overseas III 1/16/04 144a NotesUAP Holding Corp 1/20/04 144a Senior Discount NotesPortola Packaging, Inc. 1/20/04 144a Senior NotesNRG Energy Inc. 1/21/04 144a Senior Secured Notes (2nd Lien)Mail-Well Inc. 1/21/04 144a Senior Subordinated NotesCasella Waste Systems Inc. 1/22/04 144a Senior Subordinated NotesCompanhia Siderurgica Paulista (Cosipa) 1/23/04 144a Senior NotesUnited Rentals, Inc. 1/23/04 144a Senior NotesUnited Rentals, Inc. 1/23/04 144a Senior Subordinated NotesNorthwest Airlines, Inc. 1/26/04 Senior NotesInmarsat Finance Plc 1/27/04 144a Senior NotesFreeport-McMoRan Copper & Gold Inc. 1/28/04 144a Senior NotesDex Media Inc 1/28/04 144a Senior Discount NotesWilliam Lyon Homes Inc. 1/28/04 144a Senior NotesThermadyne Holdings Corp. 1/29/04 144a Senior Subordinated NotesNectar Merger Corp / FTD Inc 1/30/04 144a Senior Subordinated NotesPetro Stopping Centers LP / Petro Financial Corp 1/30/04 144a Senior Secured NotesQwest Communications International, Inc. 1/30/04 144a Senior NotesQwest Communications International, Inc. 1/30/04 144a Senior NotesAmeriPath Inc. 2/4/04 144a Senior Subordinated NotesDunlop Standard Aerospace Plc 2/4/04 144a Senior NotesPlaytex Products, Inc. 2/4/04 144a Senior Secured NotesGCI, Inc. 2/5/04 144a Senior NotesPly Gem Industries Inc 2/5/04 144a Senior Subordinated NotesArgosy Gaming Co. 2/5/04 144a Senior Subordinated NotesInverness Medical Innovations 2/5/04 144a Senior Subordinated NotesPinnacle Foods Holding Corp 2/5/04 144a Senior Subordinated NotesAffinity Group Holdings, Inc. 2/6/04 144a Senior Subordinated NotesPliant Corp. 2/6/04 144a Senior Secured Discount Notes (1st Lien)AES Corp. 2/10/04 144a Senior NotesB.F. Saul Real Estate Investment Trust 2/10/04 144a Senior Secured Notes

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry175.0 8.250 100.000 B3 B- 12/15/13 8.250 405 Other Services50.0 8.750 103.000 B2 B 2/1/12 8.115 468 Retail Trade90.0 8.500 106.910 B2 B 12/15/08 6.500 376 Communications

110.0 9.250 100.000 B2 B 12/15/09 9.250 575 Retail Trade1,250.0 8.000 100.000 B2 B+ 12/15/13 8.000 382 Electric & Gas Utilities and Sanitary Services140.0 8.000 100.000 NR B+ 12/15/09 8.000 467 Chemicals and Allied Products200.0 8.000 100.000 B3 B 3/15/14 8.000 384 Retail Trade125.0 7.000 100.000 B3 B- 1/15/14 7.000 285 Communications175.0 6.875 100.000 B1 B 12/15/13 6.875 274 Retail Trade200.0 9.750 104.875 B1 B+ 12/23/13 8.996 474 Metals & Related Products200.0 7.750 100.000 B3 B- 1/15/14 7.750 350 Chemicals and Allied Products225.0 7.000 100.000 B2 B- 1/15/14 7.000 290 Retail Trade120.0 8.750 99.504 B2 B+ 1/20/09 8.875 583 Electric & Gas Utilities and Sanitary Services240.0 8.000 100.000 B3 CCC 1/15/14 8.000 397 Communications350.0 10.250 110.500 B3 B 2/15/13 8.230 528 Retail Trade694.0 - 64.235 CAA2 B- 2/1/14 9.000 502 Electric & Gas Utilities and Sanitary Services215.0 7.850 100.000 B2 B 2/1/12 7.850 385 Hotels125.0 8.000 100.000 B3 B- 2/1/12 8.000 427 Electronic Equipment140.0 10.250 109.000 B3 B- 10/1/13 8.844 463 Agriculture, Forestry and Fishing400.0 6.500 100.000 B2 B+ 2/1/14 6.500 253 Hotels390.0 6.750 100.000 B2 B 2/15/14 6.750 278 Other Services150.0 9.250 100.000 B3 B 2/1/11 9.250 573 Electronic Equipment300.0 7.875 99.489 B1 B+ 1/23/14 7.950 395 Financial Services125.0 - 65.992 CAA2 B- 7/15/12 10.750 695 Construction180.0 8.250 100.000 B2 B- 2/1/12 8.250 448 Rubber & Plastic Products475.0 8.000 106.000 B2 B+ 12/15/13 7.142 312 Electric & Gas Utilities and Sanitary Services320.0 7.875 100.000 B3 B 12/1/13 7.875 386 Business Services and Software45.0 9.750 113.500 B3 B 2/1/13 6.914 431 Electric & Gas Utilities and Sanitary Services

175.0 8.250 99.198 B2 B+ 1/30/09 8.450 533 Metals & Related Products1,000.0 6.500 100.000 B1 BB- 2/15/12 6.500 272 Business Services and Software375.0 7.000 100.000 B2 B+ 2/15/14 7.000 297 Business Services and Software300.0 10.000 96.227 CAA1 B- 2/1/09 11.000 789 Transportation375.0 7.625 100.000 B2 B 6/30/12 7.625 367 Communications350.0 6.875 100.000 B2 B- 2/1/14 6.875 269 Construction361.0 - 69.384 CAA1 B 11/15/13 8.250 451 Communications150.0 7.500 100.000 B3 B- 2/15/14 7.500 330 Construction175.0 9.250 100.000 CAA1 B- 2/1/14 9.250 503 Industrial & Commercial Machinery175.0 7.750 100.000 B3 B- 2/15/14 7.750 360 Wholesale Trade - Nondurable Goods225.0 9.000 100.000 B3 B- 2/15/12 9.000 508 Other Services525.0 7.250 99.321 B3 CCC+ 2/25/11 7.375 369 Communications500.0 7.500 98.273 B3 CCC+ 2/15/14 7.750 362 Communications75.0 10.500 107.125 B3 B- 4/1/13 9.116 544 Other Services

120.0 11.875 105.125 B3 CCC+ 5/15/09 9.983 756 Transportation Equipment460.0 8.000 100.000 B2 B 3/1/11 8.000 433 Manufacturing - Paper & Allied Products230.0 7.250 98.264 B2 B+ 2/15/14 7.500 332 Communications225.0 9.000 100.000 B3 B- 2/15/12 9.000 506 Metals & Related Products350.0 7.000 100.000 B3 B+ 1/15/14 7.000 282 Hotels150.0 8.750 100.000 CAA1 B- 2/15/12 8.750 487 Measuring, Photographic, Optical Goods194.0 8.250 103.596 B3 B 12/1/13 7.625 394 Manufacturing - Food & Kindred Products200.0 9.000 100.000 B3 B- 2/15/12 9.000 515 Other Services306.0 - 73.627 B3 B 6/15/09 11.125 809 Rubber & Plastic Products500.0 7.750 98.288 B3 B- 3/1/14 8.000 390 Electric & Gas Utilities and Sanitary Services250.0 7.500 100.000 B3 B+ 3/1/14 7.500 344 Financial Services

55

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of SecurityTime Warner Telecom Holding Inc. 2/10/04 Senior NotesGCI, Inc. 2/11/04 144a Senior NotesNorth Atlantic Trading Co., Inc. 2/11/04 144a Senior NotesErico International Corp 2/12/04 144a Senior Subordinated NotesPhillips - Van Heusen Corp. 2/12/04 144a NotesSolo Cup Company 2/12/04 144a Senior Subordinated NotesWII Components Inc (Woodcraft Industries) 2/12/04 144a Senior Subordinated NotesPantry, Inc. (The) 2/13/04 144a Senior Subordinated NotesRiverside Forest Products, Ltd. 2/17/04 144a Senior NotesComstock Resources Inc. 2/18/04 Senior NotesOdebrecht Overseas Ltd. 2/18/04 144a NotesAMF Bowling Worldwide Inc. 2/19/04 144a Senior Subordinated NotesChattem, Inc. 2/19/04 144a Senior Subordinated NotesIsle of Capri Casinos Inc. 2/19/04 144a Senior Subordinated NotesJo-Ann Stores Inc. 2/19/04 Senior Subordinated NotesStation Casinos, Inc. 2/24/04 144a Senior Subordinated NotesInsight Health Services Corp. 2/26/04 144a Senior Subordinated NotesInvensys Plc 2/27/04 144a Senior Unsecured NotesAinsworth Lumber Co Ltd 2/27/04 144a Senior NotesAMH Holdings Inc. (Associated Materials) 2/27/04 144a Senior Discount NotesGoodyear Tire & Rubber Co. 2/27/04 144a Senior Secured Notes (Junior Lien)Station Casinos, Inc. 3/1/04 144a Senior Subordinated NotesWH Holdings/WH Capital Corp (Herbalife) 3/3/04 144a Senior NotesAirgas, Inc. 3/3/04 144a Senior Subordinated NotesFriendly Ice Cream Corp. 3/3/04 144a Senior Subordinated NotesTrue Temper Sports, Inc. 3/3/04 144a Senior Subordinated NotesGlobal Cash Access, LLC 3/4/04 144a Senior Subordinated NotesJ.B. Poindexter & Co. 3/4/04 144a Senior NotesThe Newark Group Inc. 3/5/04 144a Senior Subordinated NotesGold Kist Inc. 3/5/04 144a Senior NotesAmerican Rock Salt Co. 3/5/04 144a Senior Secured NotesCellu Tissue Holdings 3/5/04 144a Senior Secured NotesMrs. Fields Famous Brands LLC/ Mrs Fields Financing Co Inc 3/9/04 144a Senior Secured NotesAmkor Technology Inc. 3/9/04 144a Senior NotesTechnical Olympic USA Inc. 3/10/04 144a Senior Subordinated NotesPharma Services Intermediate Holding Corp. 3/11/04 144a Senior Discount NotesCalpine Generating Company LLC 3/12/04 144a Secured Notes (3rd Lien)Team Health, Inc. 3/12/04 144a Senior Subordinated NotesOmega Healthcare Investors, Inc. 3/15/04 144a Senior NotesRural Cellular Corp. 3/15/04 144a Senior Secured NotesNextel Communications, Inc. 3/16/04 144a Senior NotesSierra Pacific Resources 3/16/04 144a Senior NotesNextel Communications, Inc. 3/16/04 144a Senior NotesAmerican Achievement Corp. (AAC) 3/17/04 144a Senior Subordinated NotesIspat Inland ULC 3/18/04 144a Senior Secured NotesInteractive Health LLC 3/19/04 144a Senior NotesReal Mex Restaurants Inc. 3/24/04 144a Senior Secured NotesHercules, Inc. 3/25/04 144a Senior Subordinated NotesKCS Energy, Inc. 3/25/04 144a Senior NotesU.S. Concrete Inc. 3/26/04 144a Senior Subordinated NotesDiamond Jo LLC (FKA Peninisula Gaming Co LLC)/Old Evangeline Downs LLC 3/26/04 144a Senior Secured NotesSealy Mattress Co. 3/30/04 144a Senior Subordinated NotesService Corporation International 3/30/04 144a Senior Notes

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry200.0 9.250 100.000 B2 CCC+ 2/15/14 9.250 516 Other Services20.0 7.250 98.500 B2 B+ 2/15/14 7.466 345 Communications

200.0 9.250 100.000 B2 B+ 3/1/12 9.250 539 Manufacturing - Tobacco Products141.0 8.875 100.000 B3 B- 3/1/12 8.875 520 Metals & Related Products150.0 7.250 100.000 B2 BB- 2/15/11 7.250 370 Manufacturing - Apparel325.0 8.500 100.000 B3 B- 2/15/14 8.500 445 Manufacturing - Paper & Allied Products120.0 10.000 100.000 B2 B- 2/15/12 10.000 622 Manufacturing - Furniture & Fixtures250.0 7.750 100.000 B3 B- 2/15/14 7.750 374 Retail Trade150.0 7.875 100.000 B2 B+ 3/1/14 7.875 385 Manufacturing - Paper & Allied Products175.0 6.875 100.000 B2 B- 3/1/12 6.875 310 Mining150.0 11.500 99.075 NR B+ 2/25/09 11.750 880 Chemicals and Allied Products150.0 10.000 100.000 B3 CCC+ 3/1/10 10.000 663 Miscellaneous Manufacturing125.0 7.000 100.000 B2 B- 3/1/14 7.000 296 Chemicals and Allied Products500.0 7.000 100.000 B2 B 3/1/14 7.000 296 Other Services100.0 7.500 100.000 B2 B- 3/1/12 7.500 375 Retail Trade350.0 6.875 100.000 B1 B+ 3/1/16 6.875 261 Hotels25.0 9.875 101.000 B3 B- 11/1/11 9.682 588 Other Services

550.0 9.875 98.147 B3 B- 2/15/11 10.250 675 Industrial & Commercial Machinery210.0 6.750 100.000 B1 B+ 3/15/14 6.750 272 Agriculture, Forestry and Fishing446.0 - 57.907 CAA1 B- 3/1/14 11.250 726 Metals & Related Products450.0 11.000 99.413 B3 B 3/1/11 11.125 764 Rubber & Plastic Products50.0 6.500 100.500 B1 B+ 2/1/14 6.417 243 Hotels

275.0 9.500 100.000 B3 B 4/1/11 9.500 593 Chemicals and Allied Products150.0 6.250 100.000 BA2 B+ 1/0/00 6.250 216 Wholesale Trade - Nondurable Goods175.0 8.375 100.000 B2 B- 6/15/12 8.375 478 Retail Trade125.0 8.375 100.000 B3 B- 9/15/11 8.375 468 Miscellaneous Manufacturing235.0 8.750 100.000 CAA1 B- 3/15/12 8.750 495 Other Services125.0 8.750 100.000 B1 B- 3/15/14 8.750 473 Transportation Equipment175.0 9.750 100.000 CAA1 B- 1/0/00 9.750 591 Manufacturing - Paper & Allied Products200.0 10.250 98.470 B2 B- 3/15/14 10.500 667 Manufacturing - Food & Kindred Products100.0 9.500 100.000 B3 B- 3/15/14 9.500 565 Mining162.0 9.750 98.892 B2 B 3/15/10 10.000 697 Manufacturing - Paper & Allied Products115.0 11.500 100.000 B3 CCC+ 3/15/11 11.500 - Manufacturing - Food & Kindred Products250.0 7.125 99.321 B1 B 3/15/11 7.250 - Miscellaneous Manufacturing125.0 7.500 100.000 B2 B- 3/15/11 7.500 432 Construction219.0 - 56.943 CAA1 B 4/1/14 11.500 774 Chemicals and Allied Products150.0 11.500 100.000 NR B- 4/1/11 11.500 828 Electric & Gas Utilities and Sanitary Services180.0 9.000 100.000 B3 B- 4/1/12 9.000 558 Business Services and Software200.0 7.000 100.000 B1 BB- 4/1/14 7.000 325 Financial Services350.0 8.250 100.000 B2 B- 3/15/12 8.250 482 Communications500.0 5.950 97.795 B2 B+ 3/15/14 6.250 249 Communications335.0 8.625 100.000 B2 B- 3/15/14 8.625 493 Electric & Gas Utilities and Sanitary Services500.0 5.950 97.795 B2 B+ 3/15/14 6.250 249 Communications150.0 8.250 100.000 B3 B- 4/1/12 8.250 487 Printing & Publishing650.0 9.750 99.212 CAA1 B- 4/1/14 9.875 613 Metals & Related Products100.0 7.250 80.424 B3 B- 4/1/11 11.375 - Miscellaneous Manufacturing105.0 10.000 100.000 B2 B- 4/1/10 10.000 711 Retail Trade250.0 6.750 100.000 BA3 B+ 10/15/29 6.750 302 Chemicals and Allied Products175.0 7.125 100.000 B3 B- 4/1/12 7.125 370 Mining200.0 8.375 100.000 B3 B- 4/1/14 8.375 462 Stone, Clay, Glass & Concrete Products230.0 8.750 98.596 B2 B- 4/15/12 9.000 528 Other Services390.0 8.250 100.000 CAA1 B- 6/15/14 8.250 438 Manufacturing - Furniture & Fixtures250.0 6.750 99.500 B1 BB- 4/1/16 6.812 294 Personal Services

56

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of SecurityCablevision Systems Corp. (CSC Holdings, Inc.) 3/30/04 144a Senior Notes (CSC Holdings, Oppco)Encore Acquisition Co. 3/30/04 144a Senior Subordinated NotesCablevision Systems Corp. (CSC Holdings, Inc.) 3/30/04 144a Senior Notes (Cablevision Systems, HoldcoBoyd Gaming Corp. 3/31/04 144a Senior Subordinated NotesWarner Music Group 4/1/04 144a Senior Subordinated NotesAearo Corp. 4/1/04 144a Senior Subordinated NotesEXCO Resources 4/1/04 144a Senior NotesConsolidated Communications Texas Holdings/ Illinois Holdings 4/2/04 144a Senior NotesPort Townsend Paper Corp. 4/2/04 144a Senior Secured NotesNTL Cable Plc (NTL Communications Corp.) 4/2/04 144a Senior NotesOAO Severstal 4/6/04 144a Senior Unsecured NotesVicorp Restaurants, Inc. 4/6/04 144a Senior NotesAllied Waste North America Inc. 4/7/04 Senior Unsecured NotesMemberWorks Inc. 4/7/04 144a Senior NotesVWR International 4/7/04 144a Senior NotesVWR International 4/7/04 144a Senior Subordinated NotesDelco Remy International, Inc. 4/8/04 144a Senior Subordinated NotesMueller Group Inc. 4/8/04 144a Senior Subordinated NotesSuperior Essex Communications LLC/ Essex Group Inc. 4/8/04 144a Senior NotesPrimus International Inc. 4/13/04 144a Senior Secured Notes (2nd Lien)Extendicare Health Services, Inc. 4/15/04 144a Senior Subordinated NotesMidwest Finance Corp. (Midwest Generation LLC) 4/15/04 144a Senior Secured Notes (2nd Priority)Atlantic Express Transportation Corp. 4/16/04 144a Senior Secured NotesCharter Communications Operating LLC/ Capital Corp. 4/20/04 144a Senior Secured Notes (2nd Lien)Charter Communications Operating LLC/ Capital Corp. 4/20/04 144a Senior Secured Notes (2nd Lien)Curative Health Services Inc. 4/20/04 144a Senior NotesCHC Helicopter Corp 4/21/04 144a Senior NotesAmeriGas Partners LP/ AP Eagle Finance Corp. 4/22/04 Senior Unsecured NotesiPCS Escrow / iPCS Inc. 4/22/04 144a Senior Secured NotesInmarsat Finance Plc 4/23/04 144a Senior NotesINVISTA / Arteva Specialties Sarl (Luxembourg) 4/23/04 144a Senior Unsecured NotesWaste Services Inc. 4/26/04 144a Senior Subordinated NotesAmscan Holdings 4/27/04 144a Senior Subordinated NotesEmmis Operating Co. 4/27/04 144a Senior Subordinated NotesGiant Industries, Inc. 4/28/04 Senior Subordinated NotesSea Containers, Ltd. 4/28/04 Senior NotesSeneca Gaming Corp. 4/29/04 144a Senior NotesTriad Hospitals Inc 4/29/04 Senior NotesValmont Industries Inc. 4/29/04 144a Senior Subordinated NotesWise Metals Group LLC / Wise Alloys Finance Corp. 4/30/04 144a Senior Secured NotesItron Inc 5/5/04 144a Senior Subordinated NotesWhiting Petroleum Corp. 5/5/04 144a Senior Subordinated NotesPolypore Inc. 5/6/04 144a Senior Subordinated NotesJ.B. Poindexter & Co. 5/7/04 144a Senior NotesAinsworth Lumber Co Ltd 5/11/04 144a Senior NotesBuffets Holdings Inc. 5/11/04 144a Senior Discount NotesConsolidated Container Company LLC 5/11/04 144a Senior Secured Discount Notes (2nd Lien)Lazydays R.V. Center Inc. 5/12/04 144a Senior NotesAlpha Natural Resources 5/13/04 144a Senior NotesDa-Lite Screen Company, Inc. 5/13/04 144a Senior NotesGundle / SLT Environmental Inc. 5/13/04 144a Senior NotesNextel Partners, Inc. 5/14/04 144a Senior NotesSheridan Group Inc. 5/19/04 144a Senior Secured Notes

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry500.0 6.750 100.000 B1 BB- 4/15/12 6.750 - Communications150.0 6.250 100.000 B2 B 4/15/14 6.250 236 Mining

o) 1,000.0 8.000 100.000 B3 B+ 4/15/12 8.000 - Communications350.0 6.750 100.000 B1 B+ 4/15/14 6.750 289 Hotels465.0 7.375 100.000 B3 B- 4/15/14 7.375 353 Other Services175.0 8.250 100.000 B3 B- 4/15/12 8.250 473 Miscellaneous Manufacturing100.0 7.250 103.250 B2 B 1/15/11 6.644 334 Electric & Gas Utilities and Sanitary Services200.0 9.750 100.000 B3 B- 4/1/14 9.750 594 Communications125.0 11.000 95.348 B3 B 4/15/11 12.000 836 Manufacturing - Paper & Allied Products425.0 8.750 100.000 B3 B- 1/0/00 8.750 - Communications375.0 9.250 100.000 B2 B+ 4/19/14 9.250 507 Agriculture, Forestry and Fishing126.5 10.500 98.791 B3 B 4/15/11 10.750 469 Retail Trade400.0 7.375 100.000 B2 B+ 4/15/14 7.375 321 Electric & Gas Utilities and Sanitary Services150.0 9.250 98.418 B2 B 4/1/14 9.500 534 Other Services200.0 6.875 100.000 B2 B 4/15/12 6.875 310 Measuring, Photographic, Optical Goods320.0 8.000 100.000 B3 B- 4/15/14 8.000 384 Measuring, Photographic, Optical Goods150.0 9.375 100.000 B3 CCC+ 4/15/12 9.375 548 Industrial & Commercial Machinery315.0 10.000 100.000 CAA1 B- 5/1/12 10.000 603 Metals & Related Products275.0 9.000 91.240 B3 B 4/15/12 9.500 562 Wholesale Trade - Durable Goods65.0 10.500 100.000 B2 B+ 4/15/09 10.500 712 Communications

125.0 6.875 97.500 B2 B- 5/1/14 7.229 285 Other Services1,000.0 8.750 100.000 B1 B- 5/1/34 8.750 440 Electric & Gas Utilities and Sanitary Services105.0 12.000 100.000 B3 B 4/15/08 12.000 908 Transportation Services400.0 8.375 100.000 B2 B- 4/30/14 8.375 399 Communications

1,100.0 8.000 100.000 B2 B- 4/30/12 8.000 387 Communications185.0 10.750 100.000 B3 B- 5/1/11 10.750 661 Other Services250.0 7.375 99.455 B2 B 5/1/14 7.453 300 Transportation28.0 8.875 109.375 B2 BB- 5/20/11 7.150 381 Retail Trade

165.0 11.500 100.000 B3 CCC 5/1/12 11.500 737 Communications102.5 7.625 102.500 B2 B 6/30/12 7.151 324 Communications675.0 9.250 100.000 B1 B+ 5/1/12 9.250 505 Chemicals and Allied Products160.0 9.500 100.000 CAA1 B- 4/15/14 9.500 507 Electric & Gas Utilities and Sanitary Services175.0 8.750 100.000 B3 B- 5/1/14 8.750 431 Miscellaneous Manufacturing375.0 6.875 100.000 B2 B- 5/15/12 6.875 271 Communications150.0 8.000 99.311 B3 NR 5/15/14 8.250 384 Mining103.0 10.500 97.369 B3 B 5/15/14 11.000 677 Transportation300.0 7.250 100.000 B2 BB- 5/1/12 7.250 287 Hotels600.0 7.000 100.000 B2 B+ 5/15/12 7.000 270 Other Services150.0 6.875 100.000 BA3 B+ 5/1/14 6.875 240 Industrial & Commercial Machinery150.0 10.250 100.000 B2 B 5/15/12 10.250 608 Metals & Related Products125.0 7.750 99.265 B2 B 5/15/12 7.875 350 Electric & Gas Utilities and Sanitary Services150.0 7.250 99.260 B2 B- 5/1/12 7.375 296 Mining225.0 8.750 100.000 CAA1 B- 5/15/12 8.750 440 Chemicals and Allied Products30.0 8.750 100.000 B1 B- 3/15/14 8.750 415 Transportation Equipment

110.0 6.750 90.043 B1 B+ 3/15/14 8.250 348 Agriculture, Forestry and Fishing132.0 - 56.926 CAA1 B 12/15/10 13.875 965 Retail Trade207.0 - 72.513 B3 B 6/15/09 10.750 662 Rubber & Plastic Products155.0 11.750 98.735 B3 B- 5/15/12 12.000 739 Transportation Equipment175.0 10.000 100.000 B3 CCC+ 6/1/12 10.000 533 Electric & Gas Utilities and Sanitary Services160.0 9.500 100.000 B2 B- 5/15/11 9.500 - Miscellaneous Manufacturing150.0 11.000 100.000 CAA1 B- 5/15/12 11.000 632 Electric & Gas Utilities and Sanitary Services25.0 8.125 98.260 CAA1 B- 7/1/11 8.458 394 Communications60.0 10.250 102.000 B1 B 8/15/11 9.745 - Printing & Publishing

57

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of SecurityUGS Corp. / UGS PLM Solutions Inc. 5/19/04 144a Senior Subordinated NotesLeiner Health Products Group, Inc. 5/24/04 144a Senior Subordinated NotesConcentra Operating Corp. 5/25/04 144a Senior Subordinated NotesHanover Compressor Co. 5/25/04 Senior NotesSamsonite Corporation 5/25/04 144a Senior Subordinated NotesAutocam Corporation 5/26/04 144a Senior Subordinated NotesAztar Corp. 5/26/04 144a Senior Subordinated NotesFinlay Fine Jewelry Corp. 5/27/04 144a Senior NotesHerbst Gaming, Inc. 5/27/04 144a Senior Subordinated NotesMAAX Corp. 5/27/04 144a Senior Subordinated NotesTerphane Holding Corp. 5/27/04 144a Senior Secured NotesAppleton Papers Inc. 6/3/04 144a Senior NotesAppleton Papers Inc. 6/3/04 144a Senior Subordinated NotesBCP Caylux Holdings Luxembourg S.C.A. (Celanese AG) 6/3/04 144a Senior Subordinated NotesFerrellgas Partners, L.P. 6/4/04 144a Senior NotesCadmus Communications Corp. 6/9/04 144a Senior Subordinated NotesOJSC Vimpel Communications (VimpelCom) 6/9/04 144a NotesStater Brothers Holdings Inc. 6/9/04 144a Senior NotesSwift Energy Co. 6/9/04 Senior NotesCelestica Inc. 6/10/04 Senior Subordinated NotesIASIS Healthcare LLC/Capital Corp. 6/10/04 144a Senior Subordinated NotesHuntsman LLC 6/15/04 144a Senior NotesTenet Healthcare Corp. 6/15/04 144a Senior NotesADESA Inc. 6/16/04 Senior Subordinated NotesArgo-Tech Corporation 6/17/04 144a Senior NotesClean Harbors Inc. 6/17/04 144a Senior Secured NotesCornell Cos 6/17/04 144a Senior NotesViskase Cos Inc. 6/17/04 144a Senior Secured NotesBeverly Enterprises, Inc. 6/18/04 144a Senior Subordinated NotesRange Resources Corp. 6/22/04 144a Senior Subordinated NotesMedical Device Manufacturing Inc. (UTI) 6/23/04 144a Senior Subordinated NotesKabel Deutschland GmbH (KDG) 6/24/04 144a Senior NotesParamount Resources Inc. 6/24/04 Senior NotesPierre Foods Inc. 6/24/04 144a Senior Subordinated NotesThe Wornick Co. 6/24/04 Senior Secured NotesBCP Caylux Holdings Luxembourg S.C.A. (Celanese AG) 6/28/04 144a Senior Subordinated NotesBuhrmann US Inc. 6/28/04 144a Senior Subordinated NotesSeitel Inc. 6/28/04 144a Senior NotesMedCath Holdings Corp. 6/29/04 144a Senior NotesSpeedway Motorsports Inc. 6/29/04 144a Senior Subordinated NotesHorizon Lines LLC / Horizon Lines Holding Corp. 6/30/04 144a Senior NotesAllied Security 7/1/04 144a Senior Subordinated NotesBelden & Blake Corp. 7/1/04 144a Senior Secured Notes (2nd Lien)Horizon PCS Escrow Co. 7/8/04 144a Senior NotesStar Gas Partners, L.P. 7/8/04 144a Senior NotesNCL Corporation Ltd. 7/9/04 144a Senior NotesIntertape Polymer US Inc. 7/14/04 144a Senior Subordinated NotesVitro Envases Norteamerica SA (VENA / Vitro S.A. de C.V.) 7/16/04 144a Senior Secured NotesThe Jean Coutu Group Inc. 7/20/04 144a Senior Subordinated NotesThe Jean Coutu Group Inc. 7/20/04 144a Senior Subordinated NotesBuilding Materials Corp. of America 7/21/04 144a Senior Secured Notes (2nd Lien)Foundation PA Coal Company 7/21/04 144a Senior NotesLoews Cineplex Entertainment Corp. 7/22/04 144a Senior Subordinated Notes

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry550.0 10.000 100.000 B3 B- 6/1/12 10.000 547 Industrial & Commercial Machinery150.0 11.000 100.000 B3 CCC+ 6/1/12 11.000 640 Chemicals and Allied Products155.0 9.125 98.613 B3 B- 6/1/12 9.375 482 Other Services200.0 9.000 100.000 B3 B 6/1/14 9.000 427 Business Services and Software205.0 8.875 100.000 B3 B- 6/1/11 8.875 448 Miscellaneous Manufacturing140.0 10.875 97.777 B3 B- 6/15/14 11.250 656 Metals & Related Products300.0 7.825 100.000 BA3 B+ 6/15/14 7.825 318 Other Services200.0 8.375 100.000 B1 B+ 6/1/12 8.375 392 Retail Trade160.0 8.125 99.284 B3 B- 6/1/12 8.250 380 Hotels150.0 9.750 100.000 B3 B- 6/15/12 9.750 529 Manufacturing - Furniture & Fixtures46.5 12.500 94.719 B3 CCC+ 6/15/09 14.000 - Manufacturing - Textiles

185.0 8.125 100.000 B2 BB- 6/15/11 8.125 373 Manufacturing - Paper & Allied Products150.0 9.750 100.000 B3 B+ 6/15/14 9.750 501 Manufacturing - Paper & Allied Products

1,000.0 9.625 100.000 B2 B- 6/15/14 9.625 492 Chemicals and Allied Products50.0 8.750 103.250 B2 B 6/15/12 8.057 384 Retail Trade

125.0 8.375 100.000 B2 B 6/15/14 8.375 357 Printing & Publishing250.0 10.000 100.000 B1 BB- 6/16/09 10.000 601 Communications525.0 8.125 99.500 B1 BB- 6/15/12 8.211 356 Retail Trade150.0 7.625 100.000 B1 BB- 7/15/11 7.625 314 Mining500.0 7.875 100.000 BA3 B+ 7/1/11 7.875 347 Business Services and Software475.0 8.750 100.000 B3 B- 6/15/14 8.750 393 Other Services300.0 11.500 100.000 B3 CCC+ 7/15/12 11.500 699 Rubber & Plastic Products

1,000.0 9.875 97.674 B3 B- 7/1/14 10.250 556 Other Services125.0 7.625 100.000 B1 B+ 6/15/12 7.625 308 Retail Trade250.0 9.250 100.000 B3 B 7/1/11 9.250 - Industrial & Commercial Machinery150.0 11.250 98.697 CAA1 B 7/15/12 11.500 693 Electric & Gas Utilities and Sanitary Services112.0 10.750 98.685 B3 B- 7/1/12 11.000 646 Other Services90.0 11.500 100.000 B2 B- 6/15/11 11.500 - Rubber & Plastic Products

215.0 7.875 98.318 B2 B 6/15/14 8.125 343 Other Services100.0 7.375 98.125 B3 B 7/15/13 7.667 300 Mining175.0 10.000 100.000 CAA1 B- 7/15/12 10.000 548 Measuring, Photographic, Optical Goods610.0 10.625 100.000 B3 NR 7/1/14 10.625 600 Communications125.0 8.875 100.000 B2 B 7/15/14 8.875 423 Mining125.0 9.875 100.000 B3 B 7/15/12 9.875 540 Manufacturing - Food & Kindred Products125.0 10.875 100.000 B2 B+ 7/15/11 10.875 657 Manufacturing - Food & Kindred Products225.0 9.625 103.375 B3 B- 6/15/14 9.019 447 Chemicals and Allied Products150.0 8.250 99.164 B2 B 7/1/14 8.375 367 Wholesale Trade - Durable Goods193.0 11.750 97.675 B3 B- 7/15/11 12.250 787 Mining150.0 9.875 100.000 CAA1 B- 7/15/12 9.875 534 Other Services100.0 6.750 100.000 BA2 B+ 6/1/13 6.748 252 Other Services250.0 9.000 100.000 B3 B- 11/1/12 9.000 456 Transportation180.0 11.375 98.823 CAA1 B- 7/15/11 11.625 737 Business Services and Software192.5 8.750 100.000 B3 B- 7/15/12 8.750 431 Mining125.0 11.375 100.000 B3 CCC 7/15/12 11.375 709 Communications30.0 10.250 106.250 B3 B- 2/12/13 8.970 505 Retail Trade

250.0 10.625 100.000 B2 B+ 7/15/14 10.625 616 Transportation125.0 8.500 100.000 B3 B- 8/1/14 8.500 401 Manufacturing - Paper & Allied Products170.0 10.750 95.316 B2 B- 7/23/11 11.750 772 Stone, Clay, Glass & Concrete Products850.0 8.500 100.000 B3 B 8/1/14 8.500 411 Retail Trade350.0 7.625 100.000 B2 B 8/1/12 7.625 343 Retail Trade200.0 7.750 100.000 B2 B+ 8/1/14 7.750 327 Wholesale Trade - Durable Goods300.0 7.250 100.000 B1 B 8/1/14 7.250 276 Mining315.0 9.000 100.000 B3 CCC+ 8/1/14 9.000 454 Other Services

58

RESTRUCTURED DEBT DISCOUNT ANALYSIS Recent Single B Rated Issues Since September 30, 2003 (Cont’d)

Issuer Issue Date Type of SecurityDuane Reade, Inc. 7/23/04 144a Senior Subordinated NotesPanAmSat Corp. 7/30/04 144a Senior NotesStanadyne Corp. 8/2/04 144a Senior Subordinated NotesCrompton Corp. 8/3/04 144a Senior NotesInnophos Inc. 8/3/04 144a Senior Subordinated NotesUnited Refining Co. 8/3/04 144a Senior NotesBlount, Inc. 8/4/04 Senior Subordinated NotesBorden U.S. Finance Corp / Borden Nova Scotia Finance ULC (Borden Chemical Inc.) 8/4/04 Senior Secured Notes (2nd Priority)US Oncology Inc. 8/4/04 144a Senior NotesUS Oncology Inc. 8/4/04 144a Senior Subordinated NotesAlderwoods Group Inc. 8/5/04 144a Senior NotesSheffield Steel Corp. 8/5/04 144a Senior Secured NotesXerox Corp. 8/5/04 Senior NotesAMC Entertainment, Inc. / Marquee Inc. (Opco) 8/6/04 144a Senior NotesCentury Aluminum Co. 8/10/04 144a Senior NotesCollins & Aikman Products Co. 8/12/04 144a Senior Subordinated NotesNorcraft Holdings LP / Norcraft Capital Corp 8/12/04 144a Senior Discount NotesTHL Buildco Inc. / Nortek Inc. 8/12/04 144a Senior Subordinated NotesBlockbuster Inc. 8/13/04 144a Senior Subordinated NotesRainbow National Services LLC / RNS Co-Issuer Corp. 8/13/04 144a Senior NotesSolectron Corp. 8/16/04 Subordinated NotesStandard Aero Holdings 8/17/04 144a Senior Subordinated NotesPly Gem Industries Inc 8/18/04 144a Senior Subordinated NotesSecurus Technologies Inc. 8/18/04 144a Senior Secured Notes (2nd Lien)MQ Associates Inc (MedQuest Holdco) 8/19/04 144a Senior Discount NotesAinsworth Lumber Co Ltd 9/17/04 144a Senior NotesM-Foods Holdings Inc. (Michael Foods) 9/17/04 144a Senior Discount NotesXerox Corp. 9/20/04 Senior NotesChiquita Brands International, Inc. 9/21/04 144a Senior NotesColeman Cable Inc. 9/21/04 144a Senior NotesCrystal US Holdings 3 LLC (Celanese AG) 9/21/04 Senior Discount Notes (Series A)Crystal US Holdings 3 LLC (Celanese AG) 9/21/04 Senior Discount Notes (Series B)Frontier Oil Corp. 9/21/04 144a Senior NotesChiquita Brands International, Inc. 9/21/04 144a Senior NotesColeman Cable Inc. 9/21/04 144a Senior NotesCrystal US Holdings 3 LLC (Celanese AG) 9/21/04 Senior Discount Notes (Series A)Crystal US Holdings 3 LLC (Celanese AG) 9/21/04 Senior Discount Notes (Series B)Jostens Intermediate Holding (IH) Corp. 9/23/04 144a Senior Subordinated NotesRiddell Bell Holdings Inc. (Riddell Sports, Inc.) 9/23/04 144a Senior Subordinated NotesPanAmSat Holding Corp. (Holdco) 9/27/04 144a Senior Discount NotesCalpine Corp. 9/28/04 144a Senior Secured Notes (1st Priority)Loehmann Capital Corp. 9/30/04 144a Senior Secured Notes

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

Face Amount Cpn/Div Price Moody's S&P Maturity YTM Spread Industry195.0 9.750 100.000 B3 CCC+ 8/1/11 9.750 563 Retail Trade

1,010.0 9.000 100.000 B1 B+ 8/15/14 9.000 451 Communications160.0 10.000 100.000 CAA1 B 8/15/14 10.000 555 Transportation Equipment375.0 9.875 99.333 B1 B 8/1/12 10.000 576 Chemicals and Allied Products190.0 8.875 100.000 B3 B- 8/15/14 8.875 446 Chemicals and Allied Products200.0 10.500 98.671 B3 B- 8/15/12 10.750 651 Electric & Gas Utilities and Sanitary Services175.0 8.875 100.000 CAA1 B- 8/1/12 8.875 464 Industrial & Commercial Machinery325.0 9.000 100.000 B3 B- 7/15/14 9.000 458 Chemicals and Allied Products300.0 9.000 100.000 B2 B- 8/15/12 9.000 478 Other Services275.0 10.750 100.000 B3 B- 8/15/14 10.750 634 Other Services200.0 7.750 100.000 B2 B 9/15/12 7.750 355 Personal Services80.0 11.375 100.000 B3 B- 8/15/11 11.375 733 Metals & Related Products500.0 6.875 100.000 B1 B+ 8/15/11 6.875 284 Industrial & Commercial Machinery250.0 8.625 100.000 B2 B- 8/15/12 8.625 459 Other Services250.0 7.500 100.000 B1 BB- 8/15/14 7.500 326 Mining415.0 12.875 96.416 B3 B- 8/24/12 13.625 953 Industrial & Commercial Machinery118.0 - 68.080 CAA1 B- 9/1/12 9.750 569 Wholesale Trade - Durable Goods625.0 8.500 100.000 B3 B- 9/12/14 8.500 425 Metals & Related Products300.0 9.000 100.000 B1 B+ 9/1/12 9.000 498 Retail Trade300.0 8.750 99.279 B3 CCC+ 9/1/12 8.875 486 Communications64.3 7.970 101.980 B2 BB+ 11/15/06 7.007 444 Electronic Equipment200.0 8.250 100.000 CAA1 B- 9/1/14 8.250 403 Transportation Equipment135.0 9.000 100.250 B3 B- 2/15/12 8.940 493 Metals & Related Products154.0 11.000 97.651 B2 B+ 9/1/11 11.500 787 Business Services and Software136.0 - 62.337 CAA1 B- 8/15/12 12.250 823 Other Services275.0 7.250 100.000 B2 B+ 10/1/12 7.250 345 Agriculture, Forestry and Fishing154.1 - 64.910 CAA1 B- 10/1/13 9.750 515 Manufacturing - Food & Kindred Products250.0 6.875 104.250 BA2 B+ 8/15/11 6.108 246 Industrial & Commercial Machinery250.0 7.500 100.000 B2 B- 11/1/14 7.500 346 Wholesale Trade - Nondurable Goods120.0 9.875 100.000 B3 B- 10/1/12 9.875 605 Metals & Related Products163.0 - 61.275 CAA2 B- 10/1/14 10.000 592 Chemicals and Allied Products690.0 - 59.829 CAA2 B- 10/1/14 10.500 642 Chemicals and Allied Products150.0 6.625 100.000 B2 B+ 10/1/11 6.625 294 Petroleum Refining250.0 7.500 100.000 B2 B- 11/1/14 7.500 346 Wholesale Trade - Nondurable Goods120.0 9.875 100.000 B3 B- 10/1/12 9.875 605 Metals & Related Products163.0 - 61.275 CAA2 B- 10/1/14 10.000 592 Chemicals and Allied Products690.0 - 59.829 CAA2 B- 10/1/14 10.500 642 Chemicals and Allied Products500.0 7.625 100.000 B3 B- 10/1/12 7.625 384 Miscellaneous Manufacturing140.0 8.375 100.000 B3 B- 10/1/12 8.375 460 Miscellaneous Manufacturing416.0 - 59.460 CAA1 B+ 11/15/14 10.500 651 Communications785.0 9.625 99.212 NR B+ 10/1/14 9.750 573 Electric & Gas Utilities and Sanitary Services55.0 12.000 100.000 B2 CCC+ 10/1/11 12.000 - Retail Trade

Mean 8.204 8.844 Median 8.500 8.750 Trimmed Mean(2) 8.453 8.791

59

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

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

OpCo Advanced Accessory Systems LLC 10.750% Sr. Notes due 2011 $150.0 94.00 12.07% 12.07%

HoldCo Advanced Accessory Holdings, Inc. 13.250% Sr. Discount Notes due 2011 $88.0 40.00 20.50% 20.50% 843 bp 843 bp

OpCo AMC Entertainment Inc. 9.500% Sr. Sub. Notes due 2011 $297.9 102.75 8.170% 8.920%AMC Entertainment Inc. 9.875% Sr. Sub. Notes due 2012 $175.0 103.50 9.030% 9.200%AMC Entertainment Inc. 8.625% Sr. Notes due 2012 $250.0 106.00 7.346% 7.596%AMC Entertainment Inc. 8.000% Sr. Notes due 2014 $300.0 94.00 8.954% 8.954%

HoldCo Marquee Holdings 12.000% Sr. Discount Notes due 2014 $170.0 59.25 11.368% 11.461% 402 bp 386 bp

OpCo Associated Material Inc. 9.750% Sr. Sub. Notes 2012 $165.0 114.75 5.287% 7.182%

HoldCo AMH Holdings 11.250% Sr. Discount Notes due 2014 $446.0 72.75 8.617% 9.178% 333 bp 200 bp

OpCo CSC Holdings, Inc. 7.250% Sr. Notes due 2008 $500.0 104.00 6.050% 6.050%CSC Holdings, Inc. 8.125% Sr. Notes due 2009 $500.0 106.25 6.580% 6.580%CSC Holdings, Inc. 8.125% Sr. Debentures due 2009 $400.0 106.25 6.600% 6.600%CSC Holdings, Inc. 7.625% Sr. Notes due 2011 $1,000.0 105.38 6.600% 6.600%CSC Holdings, Inc. 6.750% Sr. Notes due 2012 $500.0 100.25 6.710% 6.710%CSC Holdings, Inc. 10.500% Sr. Sub. Debentures due 2016 $250.0 113.50 4.890% 8.630%CSC Holdings, Inc. 7.875% Sr. Debentures due 2018 $300.0 103.25 7.480% 7.480%CSC Holdings, Inc. 7.625% Sr. Debentures due 2018 $500.0 102.00 7.390% 7.390%

Holdco Cablevision System Corp. 7.875% Sr. Notes due 2007 $500.0 106.13 5.750% 5.750%Cablevision System Corp. 8.000% Sr. Notes due 2012 $1,000.0 104.50 7.210% 7.210% 232 bp 116 bp

OpCo Compass Minerals 10.000% Sr. Sub. Notes due 2011 $325.0 112.00 5.72% 7.71%

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

OpCo Dex Media East 9.875% Sr. Notes due 2009 $450.0 115.00 4.62% 6.39%Dex Media West 8.500% Sr. Notes due 2010 $385.0 113.50 4.81% 5.76%Dex Media East 12.125% Sr. Sub. Notes due 2012 $525.0 124.50 5.32% 7.97%Dex Media West 9.875% Sr. Sub. Notes due 2013 $780.0 117.50 5.91% 7.17%

HoldCo Dex Media, Inc. 8.000% Sr. Notes due 2013 $500.0 105.00 7.09% 7.24%9.000% Sr. Discount Notes due 2013 $361.0 73.25 8.21% 8.35% 359 bp 259 bp

60

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

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

OpCo El Pollo Loco 9.250% Sr. Secured Notes due 2009 $110.0 103.00 8.383% 8.519%

HoldCo EPL Intermediate, Inc. 12.550% Sr. Discount Notes due 2010 $70.0 59.50 11.991% 12.082% 361 bp 356 bp

OpCo Haights Cross Operating Co. 11.750% Sr. Discount Notes 2011 $140.0 110.00 9.485% 9.717%

HoldCo Haights Cross Communications 12.500% Sr. Discount Notes 2011 $135.0 61.00 11.782% 11.918% 230 bp 220 bp

OpCo Johnson Diversey, Inc. 9.625% Sr. Sub. Notes due 2012 $300.0 112.00 6.30% 7.53%Johnson Diversey, Inc. 9.625% Sr. Sub. Notes due 2012 (Euro) Eur 225.0

HoldCo Johnson Diversey Holdings, Inc. 10.670% Sr. Discount Notes due 2013 $406.3 82.50 9.07% 9.50% 277 bp 197 bp

OpCo Language Line 11.125% Sr. Sub. Notes Due 2012 $165.0 102.50 10.523% 10.635%

HoldCo Language Line Holdings 14.125% Sr. Discount Notes Due 2013 $55.0 53.50 13.893% 13.893% 337 bp 326 bp

OpCo LBI Media, Inc. 10.125% Sr. Sub. Notes due 2012 $150.0 112.00 6.98% 8.02%

HoldCo LBI Media Holdings, Inc. 11.000% Sr. Discount Notes due 2013 $68.4 72.13 9.33% 9.61% 235 bp 159 bp

OpCo Liberty Group Operating, Inc. 9.375% Sr. Notes due 2008 $180.0 100.75 8.75% 9.10%

HoldCo Liberty Group Publishing, Inc. 11.625% Sr. Discount Notes due 2009 $89.0 99.00 11.92% 11.92% 317 bp 281 bp

OpCo Medquest 11.875% Sr. Sub. Notes 2012 $180.0 114.00 8.177% 9.322%

HoldCo MQ Associates 12.250% Sr. Discount Notes due 2012 $87.8 84.80 12.270% 12.270% 409 bp 295 bp

OpCo Merisant Company 9.500% Sr. Sub. Notes due 2013 $225.0 95.00 10.38% 10.38%

HoldCo Tabletop Holdings, Inc. 12.250% Sr. Sub. Discount Notes due 2014 $136.0 52.00 13.55% 13.55% 318 bp 318 bp

OpCo Mueller Group, Inc 10.000% Sr. Sub. Notes due 2012 $315.0 108.00 8.184% 8.543%

HoldCo The Mueller Group, Inc. 14.750% Sr. Discount Notes due 2014 $223.0 64.25 11.612% 12.121% 343 bp 358 bp

61

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

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

OpCo Nalco Co 7.750% Sr. Notes 2011 $665.0 106.00 6.357% 6.676%Nalco Co 7.750% Euro Sr. Sub. Notes 2011 $200.0Nalco Co 8.875% Sr. Notes 2013 $465.0 107.50 7.495% 7.713%Nalco Co 9.000% Euro Sr. Sub. Notes 2013 $200.0

HoldCo Nalco Finance Holdings 9.000% Sr. Discount Notes due 2014 $694.0 71.00 8.418% 8.517% 206 bp 184 bp

OpCo Nebraska Book Co. 8.625% Sr. Sub. Due 2012 $175.0 99.50 8.716% 8.716%

HoldCo NBC Acquisition Corp. 11.000% Sr. Discount Notes due 2013 $77.0 68.00 11.218% 11.218% 250 bp 250 bp

OpCo Nexstar Finance LLC 12.000% Sr. Sub. Notes due 2008 $160.0 110.00 3.68% 8.63%Nexstar Finance LLC 7.000% Sr. Sub. Notes due 2014 $125.0 98.50 7.22% 7.22%

HoldCo Nexstar Finance Holdings LLC 11.375% Sr. Discount Notes due 2013 $74.7 76.63 9.29% 9.67% 561 bp 245 bp

OpCo Norcraft Companies LP 9.000% Sr. Sub. Notes due 2011 $150.0 109.00 6.871% 7.346%

HoldCo Norcraft Holdings LP 9.875 Sr. Discount Notes due 2014 $80.3 72.50 8.818% 9.014% 195 bp 167 bp

OpCo North Atlantic Trading Company 9.250% Sr. Notes due 2012 $200.0 96.00 10.024% 10.024%

HoldCo North Atlantic Holding Company 12.250% Sr. Discount Notes due 2014 $97.0 51.00 15.925% 15.925% 590 bp 590 bp

OpCo PanAmSat Corp 6.375% Notes due 2008 $150.0 101.50 5.860% 5.860%PanAmSat Corp 8.500% Sr. Notes due 2012 $8.0 116.00 3.110% 5.790%PanAmSat Corp 6.875% Debentures due 2028 $125.0 84.50 8.400% 8.400%PanAmSat Corp 9.000% Sr. Notes due 2014 $1,010.0 104.00 8.295% 8.394%

HoldCo PanAmSat Holding 10.375% Sr. Discount Notes due 2014 $416.0 58.38 10.716% 10.716% 761 bp 493 bp

OpCo Pharma Services Acquisition Corp. 10.000% Sr. Sub. Notes Due 2013 $450.0 106.00 8.833% 9.013%

HoldCo Pharma Services Intermediate Holdings 11.500% Sr. Discount Notes due 2014 $219.0 63.00 10.886% 10.982% 205 bp 197 bp

62

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

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

OpCo Smurfit Capital 6.750% Sr. Notes due 2005 $250.0 103.00 4.02% 4.02%Smurfit Capital 7.500% Sr. Notes due 2025 $350.0 99.50 7.55% 7.55%

HoldCo MDP Acquisitions PLC 9.625% Sr. Notes due 2012 $750.0 113.00 6.29% 7.44%MDP Acquisitions PLC 15.500% Sub. PIK Notes due 2013 $161.8 116.00 12.51% 12.51% 849 bp 849 bp

OpCo Town Sports International, Inc. 9.625% Sr. Notes due 2011 $250.0 101.50 9.21% 9.31%

HoldCo Town Sports International Holdings, Inc. 11.000% Sr. Discount Notes due 2014 $213.0 51.00 13.68% 13.68% 447 bp 437 bp

OpCo United Agri Products Inc 8.250% Sr. Notes due 2011 $225.0 108.00 6.478% 6.824%

HoldCo UAP Holding Corp 10.750% Sr. Discount Notes due 2012 $125.0 76.50 9.183% 9.595% 271 bp 277 bp

Mean 383 bp 327 bpMedian 333 bp 277 bpTrimmed Mean (1) 371 bp 314 bpHigh 849 bp 849 bpLow 195 bp 116 bp

(1) Trimmed Mean excludes high and low values.