A Stable Platform?

Conglomerate Boom 2.0:
A Stable Platform?
October 20, 2015
The opinions set forth in this Presentation are solely
observations of JHL Capital Group LLC, and do not
constitute investment advice or recommendations.
Strictly confidential. Not for public distribution.
© 2015 JHL Capital Group LLC. All rights reserved.

Disclaimer
• This Presentation includes certain economic observations of JHL Capital Group LLC (“JHL”), and does not purport to give any form of investment advice.
• There can be no assurance that the observations of JHL included in this Presentation are accurate, much less in any respect predictive of the value or
future stock prices of any of the issuers with respect to which such observations are made.
• JHL, in compiling this Presentation, has relied on information (including anecdotal information) obtained from third parties which JHL believes to be
accurate but has no ability independently to verify.
• JHL may hold certain positions which create a conflict of interest on the part of JHL in making the observations in this Presentation.
• No one should rely on any of the observations made in this Presentation in making any investment decision; these observations are presented solely for
the information of the recipient.
• This is not an offering or the solicitation of an offer to purchase an interest. Any such offer or solicitation will be made to qualified investors only by means
of a final offering memorandum and only in those jurisdictions where permitted by law.
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Boom Cycles and Easy Money
Easy access to capital fueled housing investment in the 2000s and energy investment in the post-financial crisis era.
Global E&P Spending and US Private Fixed Residential Investment
1985 – 2017E vs. 1977 – 2013
1000
Global E&P Spending (1985=100)
2013 Forecasts
2015 Forecasts
US Private Fixed Residential Investment (1977=100)
900
800
700
600
500
400
300
200
100
0
0 5 10 15 20 25 30 35
Source: Bloomberg, Evercore ISI, JHL research.
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The 1960s Conglomerate Boom
A major boom in conglomerate formation occurred in the 1960s driven by low interest rates, muted economic growth and investors’
focus on earnings growth.
LOW AND STABLE
INFLATION AND
INTEREST RATES
MUTED ECONOMIC
GROWTH
INVESTORS’
APPETITE FOR
EARNINGS GROWTH
Low interest rates depressed the
cost of capital and encouraged
investors to move into riskier
assets
A slowdown in growth in 1967
fueled M&A activity and inflated
the conglomerate bubble
“Go-Go” fund managers or
“gunslingers” focused on
earnings growth independent of
how it was generated, and
developed an affinity for
conglomerate stocks
With a low cost of equity capital, high perceived corporate synergies and limited growth opportunities,
investors paid ever-increasing multiples for acquisition-led growth.
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The 1960s Conglomerate Boom Index Companies
Company Industries Leader
Gulf & Western Industries Inc. Auto-parts, movie production, machinery, cigars, sugar production Charles Bluhdorn
International Telephone & Telegraph Corp. (ITT) Telecommunications, hotels, education, baked goods, rental cars Harold Geneen
Leasco Data Processing Equipment Corp. Computer leasing, insurance Saul Steinberg
Ling-Temco-Vought Inc. (LTV) Electronics, missiles, golf equipment, meat packing, pharmaceuticals Jimmy Ling
Litton Industries Inc. Military electronics, submarines, typewriters, frozen foods, publishing Tex Thornton
Monogram Industries Inc. Manufacturing, airplane toilets, electrical insulation Martin Stone
Ogden Corp. Scrap metal, shipbuilding, cargo handling, food service Charlie Allen
Teledyne Inc. Electronics, aerospace, microwaves, hydraulics, optics, steel Henry Singleton
Textron Inc. Textiles, gas meters, golf carts, helicopters, radar antennas, watchbands Roy Little
United States Industries, Inc. Automation machinery, robotics, steel, concrete pipe, textiles John Snyder
Source: “The Rise and Fall of the Conglomerate Kings” by Robert Sobel, New York Times, company websites, academic journals.
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The 1960s Conglomerate Boom
An index of 10 conglomerates appreciated 608% from August 1962 to July 1968, outperforming the S&P 500 Index by 531%.
Conglomerate Index vs. S&P 500 Index
AUGUST 9, 1962 – JULY 8, 1968
800
Conglomerate Index
S&P 500 Index
700
600
500
400
300
200
100
0
1963 1964 1965 1966 1967 1968
Source: Chicago Booth Center for Research in Security Prices, JHL research.
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The 1960s Conglomerate Bust
Earnings growth failed to keep up with inflated expectations. Rising interest rates and a stalling economy resulted in lower stock prices. The
conglomerates then crashed swiftly.
• Acquisitions grew in size to
maintain the momentum
• The top of the market was a failed
attempt by Saul Steinberg to
acquire Chemical Bank in 1969
Reality Failed to
Meet Inflated
Expectations
Interest Rates
Rose and Stock
Prices Declined
• 10 year interest rates rose from 4%
in 1963 to 8% in 1969
• Earnings disappointments drove
stock prices lower
• Lower stock prices and higher
interest rates forced management
teams to shed assets in the 1970s
and 1980s
Conglomerates
Restructured
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The 1960s Conglomerate Boom – Bust Cycle
From its peak in July 1968, the Conglomerate Index declined by 79% over the next two years.
Conglomerate Index vs. S&P 500 Index
AUGUST 9, 1962 – DECEMBER 31, 1970
800
Conglomerate Index
S&P 500 Index
700
600
500
400
300
200
100
0
1963 1964 1965 1966 1967 1968 1969 1970
Source: Chicago Booth Center for Research in Security Prices, JHL research.
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The 1960s Conglomerate Boom – Bust Case Study: Leasco
Leasco, with $236 million in equity capital, attempted to take over Chemical Bank, the sixth largest US bank, with $9 billion in assets. The
financial establishment united against Saul Steinberg.
Leasco Data Processing Equipment Corporation Stock Price
SEPTEMBER 27, 1966 – AUGUST 14, 1970
$300
$250
$200
$150
$100
$50
$0
+5,495% in
4 years
Aug 1, 1968:
Reliance accepts
Leasco’s tender
offer
Nov 1968:
Leasco
begins
secretly
buying
Chemical
Bank stock
Mar 1968:
Leasco begins secretly
buying Reliance Insurance
stock
IPO (1)
Jan 31, 1969: Leasco’s takeover plans
for Chemical Bank are disclosed
(25%) over two weeks:
Abrupt selling of large
trading blocks... bear raid
led by Chemical Bank?
Feb 20, 1969:
Steinberg ends
Chemical Bank
takeover attempt
(87%)
in 17
months
1966 1967 1968 1969 1970 1971
(1) Leasco filed for IPO in June 1965, but traded OTC until September 27, 1966.
Source: Bloomberg, Chicago Booth Center for Research in Security Prices, “The Power of Collective Purse Strings” by Davita Glasberg, “The Go-Go Years: The Drama and Crashing Finale of Wall Street's Bullish 60s” by
John Brooks, JHL research.
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The Paired-Share REIT Boom – Bust Cycle
An index of the four REITs with special tax privileges appreciated 290% over three years. The index plummeted 70% over the next year as
President Clinton proposed regulations curbing their loopholes.
Paired-Share REITs: Starwood Hotels, Patriot American Hospitality, Meditrust, First Union
JANUARY 3, 1995 – DECEMBER 31, 1998
400
350
Paired-Share REIT Index
S&P 500 Index
Jan 30, 1998:
NYT article “Stocks of Four
REIT’s Sag on Report of
Threat to Status”
300
250
200
150
Jul 22, 1998:
Congress
signs IRS law
reforming
REITs
100
1995 1996 1997 1998 1999
Even in a bull market, Paired-Share REITs had a devastating boom-bust cycle
once the arbitrage peaked and became “front page news.”
Source: Bloomberg, New York Times, US Government Publishing Office, JHL research.
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The Paired-Share REIT Boom – Bust Case Study: Starwood
Starwood was much smaller by market cap, but its high-priced stock provided Barry Sternlicht the currency to go after ITT Sheraton Corp –
itself a remnant of Harold Geneen’s 1960s conglomerate.
Starwood Hotels & Resorts Stock Price
JANUARY 2, 1992 – JANUARY 2, 2000
$35
$30
$25
Oct 20, 1997:
Stock peaks at $31.69 the week Starwood
announces ITT acquisition for $14.3bn
Sep 9, 1997:
Starwood buys Westin Hotels
for $1.5bn
(66%)
in 1 year
$20
$15
$10
$5
Jan 1995:
Sternlicht buys a
paired-share REIT,
Hotel Investors
Trust
+2,900% in
5 years
Jul 22, 1998:
Congress
signs IRS law
reforming REITs
Aug 26, 1998:
Starwood plans
to become a tax
paying
corporation
Jan 7, 1999:
Starwood
restructures into
a corporation
$0
1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: Bloomberg, company press releases, Fortune Magazine, Associated Press, PR Newswire, US Government Publishing Office, JHL research.
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The Conglomerate Boom 2.0: The Platform Boom
A new conglomerate boom developed in the aftermath of the 2008 economic crisis, driven by many of the same variables as in the 1960s.
This new boom has been enhanced with tax arbitrage similar to the Paired-Share REIT boom.
LOW AND STABLE
INFLATION AND
INTEREST RATES
MUTED ECONOMIC
GROWTH
INVESTORS’
APPETITE FOR
EARNINGS GROWTH
Low interest rates and financial
repression depressed the cost of
capital and encouraged investors
to move into riskier assets
Post 2008 crisis growth rates
have repeatedly disappointed
Hedge funds focused on
earnings growth independent of
how it was generated, and
developed an affinity for platform
stocks
With a low cost of debt capital, high perceived corporate and/or tax synergies and limited growth
opportunities, investors paid ever-increasing multiples for acquisition-led growth.
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The Platform Boom Index Companies
Company Ticker Industry Stock Price (1) MCap (bn) TEV (bn) TBV (bn) TBV/Share EV/EBITDA P/E Ratio
Allergan plc AGN Health Care $274.08 $114.3 $156.7 $(52.4) $(125.55) 18.4x 38.8x
Altice ATC NA Consumer Discretionary 22.68 24.8 61.5 (23.6) (21.58) 9.5 10.8
AMAG Pharmaceuticals Inc. AMAG Health Care 38.85 1.6 2.0 (0.4) (8.42) 8.7 11.1
Anheuser-Busch InBev BUD Consumer Staples 115.13 188.4 237.1 (50.5) (30.86) 13.6 21.7
Avago Technologies AVGO Information Technology 121.87 36.3 38.9 (0.9) (3.08) 10.6 25.2
Concordia Healthcare Corp. CXR CN Health Care 31.64 1.4 2.0 (1.1) (26.10) 8.3 2.3
Danaher Corp. DHR Industrials 89.06 59.9 73.7 (12.8) (19.01) 15.4 23.0
Endo International plc ENDP Health Care 66.60 15.3 25.6 (1.8) (7.87) 17.9 35.8
Hain Celestial Group HAIN Consumer Staples 51.94 5.5 6.2 (0.0) (0.12) 14.5 23.7
Horizon Pharma Inc. HZNP Health Care 18.55 3.1 3.7 (0.7) (4.18) 13.9 265.0
Jarden Corp. JAH Consumer Discretionary 49.85 11.9 16.5 (2.9) (12.03) 13.4 18.0
Jazz Pharmaceuticals JAZZ Health Care 136.65 8.9 9.4 (0.5) (7.71) 11.7 25.1
The Kraft Heinz Company KHC Consumer Staples 75.22 91.9 120.3 (9.7) (7.91) 17.4 28.4
Liberty Global plc LBTYA Consumer Discretionary 45.80 40.9 81.3 (23.7) (25.71) 9.7 (60.1)
Mallinckrodt Pharmaceuticals MNK Health Care 66.90 8.1 14.6 (6.6) (54.67) 10.5 24.6
Medtronic MDT Health Care 73.43 106.2 123.5 (15.5) (10.75) 12.3 22.4
Mylan N.V. MYL Health Care 42.73 22.1 28.0 (2.5) (4.77) 9.4 20.0
Perrigo Company plc PRGO Health Care 162.62 23.9 28.4 (4.7) (31.79) 18.3 78.9
Platform Specialty Products PAH Materials 12.59 2.7 6.2 (3.2) (14.83) 11.0 139.9
Post Holdings Inc. POST Consumer Staples 60.49 4.1 8.6 (3.5) (50.98) 13.4 (103.0)
Spectrum Brands Holdings SPB Consumer Staples 92.71 5.6 9.9 (3.4) (56.33) 12.3 26.8
Thermo Fisher Scientific TMO Health Care 125.47 50.8 64.4 (11.5) (28.43) 15.4 25.4
TransDigm Group Inc. TDG Industrials 215.06 12.3 20.1 (6.4) (112.81) 16.4 28.6
Valeant Pharmaceuticals VRX Health Care 168.87 59.3 91.5 (33.9) (96.67) 16.3 61.5
(1) As of October 15, 2015. Source: Bloomberg and Thomson consensus estimates, company filings and guidance, JHL research. Multiples based on forward earnings estimates.
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The Platform Boom Cycle
From March 2009, to its peak on July 20, 2015, the Platform Boom Index surged almost 1,000% during a period when the S&P 500 Index rose
215%.
Platform Boom Index vs. S&P 500 Index
MARCH 9, 2009 – JULY 20, 2015
1100
1000
Platform Boom Index
S&P 500 Index
900
800
700
600
500
400
300
200
100
0
2010 2011 2012 2013 2014 2015
Source: Bloomberg, JHL research.
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The Platform Company Model
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success
“They disdained dividends, made disciplined (occasionally large) acquisitions,
used leverage selectively, bought back a lot of stock, minimized taxes, ran
decentralized organizations, and focused on cash flow over reported net income.”
- William N. Thorndike
Bill Anders (General Dynamics)
Warren Buffett (Berkshire Hathaway)
Katharine Graham (The Washington Post)
John Malone (TCI)
Tom Murphy (Capital Cities)
Henry Singleton (Teledyne)
Dick Smith (General Cinema)
Bill Stiritz (Ralston Purina)
The new buzzword is Zero-Based Budgeting.
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Platform Tactics: Creative Accounting by Healthcare Companies (1)
Branded pharmaceuticals typically have a maximum patent life of 20 years. Historically, generic drugs have had annual price declines.
GAAP vs. Non-GAAP Earnings Per Share ($)
2015E
Equity Value vs. Tangible Book Value ($ in billions)
OCTOBER 15, 2015
Non-GAAP EPS
GAAP EPS
Equity Value
TBV
$100
$500
$400
$75
$300
$50
$200
$100
$25
$0
($100)
$0
($200)
GAAP earnings are lower for a reason. The amortization is real.
(1) Healthcare companies in Platform Boom Index.
Source: Bloomberg consensus, midpoint of company guidance when available, company filings, JHL research.
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Platform Tactics: Aggressive Pricing
Aggressive price inflation may not be sustainable in healthcare or other sectors as cyclical and regulatory pressures surface.
$880
Q3 2015
Valeant
$215
Q4 2013
Marathon
$48
Q1 2013
Hospira
Nitropress (VRX)
+310%
+348%
Per vial
$1,473
Q1 2015
Valeant
$180
Q4 2013
Marathon
$40
Q1 2013
Hospira
Isuprel (VRX)
+720%
+350%
Per vial
$3,391
Q1 2015
$1,945
Q3 2012
$800
Q2 2010
$315
Q1 2008
Jazz
Xyrem (JAZZ)
+977%
Per vial
Q1 2015
Mayne Pharma
$1,849
Q1 2014
Actavis
$20
Q4 2013
Warner Chilcott
Doryx (AGN)
+9,145%
Per 500 tablets
Single Serve Desserts (KHC) Powdered Tea (KHC) Frozen Dinners (KHC) Ketchup (KHC)
+21%
yoy
+22%
yoy
+25-78%
yoy
+11%
yoy
Source: IMS, Wall Street Journal, Pixabay, Citibank, PriceRX, Wolters Kluwer, US House Committee on Oversight and Government Reform, IRI, The Nielsen Company, JHL research.
Strictly confidential. Not for public distribution. © 2015 JHL Capital Group LLC. All rights reserved. 17

Platform Tactics: Creative Tax Structures
Tax arbitrage has been a critical value driver for many platform companies.
Tax Rate Before and After Inversion Deals
YEAR WHEN TAX INVERSION DEAL CLOSED
45%
Tax Rate Prior to Inversion
2015E Non-GAAP Tax Rate
30%
15%
0%
VRX
(2010)
JAZZ
(2012)
AGN
(2013)
PRGO
(2013)
ENDP
(2014)
HZNP
(2014)
MYL
(2015)
Source: Company filings, JHL research.
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Platform Tactics: Acquisitions Financed with Low Cost Leverage
Leverage for the Platform Boom Index companies has increased dramatically over time.
Total Acquisitions ($ in billions) (1)
2009 – 2015 YTD
$450
Total Debt Issuance ($ in billions) (1)
2009 – 2015 YTD
$300
$300
$200
$150
$100
$0
2009 2010 2011 2012 2013 2014 2015
YTD
$0
2009 2010 2011 2012 2013 2014 2015
YTD
Platform companies have accessed low cost debt financing for an accelerating volume of acquisitions.
Will deals still prove accretive in a more normalized interest rate environment?
(1) Includes deals announced but not closed. Debt issuance expected as stated by company press releases.
Source: Company filings, Capital IQ, Bloomberg, JHL research.
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Regulatory Response to Platform Tactics – Federal
“In recent months, there have been reports of a number of corporate inversion transactions designed to
change the tax domicile of a U.S.-based multinational firm with minimal change in its business operations…
we should prevent companies from effectively renouncing their citizenship to get out of paying taxes.”
– Jacob Lew, U.S. Secretary of the Treasury, July 15, 2014
“Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”
– Hillary Clinton, Sep 21, 2015
“Exclusive: U.S. probes allegations AB InBev seeking to curb craft beer distribution”
– Reuters, Oct 12, 2015
“Valeant subpoenaed by U.S. prosecutors over U.S. drug pricing”
– Reuters, Oct 15, 2015
The Federal political pressure has begun. It’s “front page news.”
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Regulatory Response to Platform Tactics – State
“Massachusetts bill seeks to rein in prices of some drugs… Similar ‘transparency’ legislation has been filed
in New York, California, Pennsylvania, Texas, North Carolina, and Oregon, though the specifics of each deal
vary”
– Boston Globe, Aug 10, 2015
“Turing Drug Distribution Probed by N.Y. After Price Hike”
– Bloomberg, Oct 13, 2015
“AB InBev Holds Talks With Regulators About California Deals”
– Bloomberg, Oct 13, 2015
The State political pressure has begun. It’s “front page news.”
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The Platform Bust
The prevailing wisdom of “lower for longer” will not last forever. A rising interest rate environment, global macroeconomic weakness and/or
stock market volatility may further pressure today’s conglomerates.
• Acquisitions have grown in size
making integration difficult
• Regulators questioning
aggressive pricing, tax practices
and anti-competitive behavior
Reality Fails to
Meet Inflated
Expectations
Interest Rates
and Stock Market
Volatility Rising
• Fed ended asset purchases in
October 2014
• Equity market volatility has
increased in the second half of 2015
• Rising debt costs and deflated
share prices will slow down pace of
acquisitions
• Cost discipline cannot indefinitely
offset volume and/or intangible
asset value declines
• Break in psychology
• When will investors become more
focused on earnings quality?
Conglomerates
will Experience
Pressure
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The Platform Boom – Bust Cycle
Since March 2009, the Platform Boom Index surged almost 1,000% during a period when the S&P 500 Index rose 215%. Since July 20, 2015,
the Platform Boom Index has plummeted 24%.
Platform Boom Index vs. S&P 500 Index
MARCH 9, 2009 – OCTOBER 15, 2015
1100
1000
Platform Boom Index
S&P 500 Index
900
800
700
600
[24%]
?
500
400
300
200
100
0
2010 2011 2012 2013 2014 2015 2016
Source: Bloomberg, JHL research.
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The Platform Boom – Bust Case Study: Valeant
Michael Pearson led Valeant through a series of acquisitions, including a tax inversion, that fueled strong stock performance. The shares
have started to rerate on regulatory scrutiny over aggressive pricing policy.
Valeant Pharmaceuticals International Stock Price
JANUARY 2, 2008 – OCTOBER 15, 2015
$300
Sep 21, 2015: Hillary Clinton tweets
about pharma price gouging
$250
$200
$150
$100
$50
+3,452%
in 7 years
Feb 4, 2008: Michael
Pearson becomes
Valeant CEO
Jun 21, 2010: Valeant
merges with Biovail and
relocates to Canada
Apr 22, 2014: Valeant
announces proposal
to acquire Allergan
May 28, 2013:
Valeant acquires
Bausch & Lomb
Feb 22, 2015: Valeant
acquires Salix Pharma
Nov 17, 2014:
Actavis acquires Allergan
Sep 28, 2015:
US House Democrats
launch investigation
into drug pricing and
request to subpoena
Valeant
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016
[40%]
?
Oct 15, 2015:
Valeant under
investigation by
Federal prosecutors
Source: Bloomberg, Wall Street Journal, Valeant and Actavis press releases, Twitter, JHL research.
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Valeant Valuation
The market has granted Valeant $48.4 billion of “Platform Value” to its Outsider CEO improvements, cost of capital advantage and tax
arbitrage. Arguably, this platform premium is even greater because most of Valeant’s assets have a finite shelf life.
VRX at Cost (2008-Today)
VRX at Market (Today)
Total Enterprise
Value
$91.5bn
“Platform Value”
$48.4bn
Equity Value
$59.3bn
Pearson and M&A
$43.1bn
Net Debt and
Minority Interest
$32.2bn
Regardless of one’s view of this “Platform Value,” it now makes little sense for a creditor to want to be
long this risk. Valeant’s five-year spreads have widened 160 bps in the last month.
*Market data as of October 15, 2015. Pro forma for announced deals.
Source: Company filings, JHL research.
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If Valeant = Leasco…
Leasco reached too far and was killed politically. This process has begun for Valeant.
Leasco Data Processing Equipment Corporation Stock Price
SEPTEMBER 27, 1966 – AUGUST 14, 1970
Valeant Pharmaceuticals International Stock Price
JANUARY 2, 2008 – OCTOBER 15, 2015
$300
$300
$250
$200
$150
$100
$50
$0
(87%)
in 17
months
+5,495%
in 4 years
IPO (1)
1966 1967 1968 1969 1970
$250
$200
$150
$100
$50
+3,452%
in 7 years
[40%]
?
$0
2008 2009 2010 2011 2012 2013 2014 2015 2016
(1) Leasco filed for IPO in June 1965, but traded OTC until September 27, 1966.
Source: Bloomberg, Chicago Booth Center for Research in Security Prices, JHL research.
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Conglomerate Boom – Bust Comparisons
The platform boom was larger and more prolonged than the 1960s bubble, exacerbated by financial repression, low cost debt and tax
arbitrage.
Conglomerate Indices vs. S&P 500 Indices
MARCH 9, 2009 – OCTOBER 15, 2015 vs. AUGUST 9, 1962 – DECEMBER 31, 1970
1100
Platform Boom Index Current S&P 500 Index 1960s Conglomerate Index 1960s S&P 500 Index
1000
900
800
700
600
[24%]
?
500
400
300
200
100
0
0 1 2 3 4 5 6 7 8
Source: Bloomberg, Chicago Booth Center for Research in Security Prices, JHL research.
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Outsiders and Cycles
“We did set an aspirational target to be a top five pharma company by the end of 2016. A couple years ago,
about the same time we set the aspiration of being a top 15 pharma company by the end of 2013, which a
lot of people were highly skeptical of, but fortunately we were able to do that and so we figured that would be
about $150 billion market cap roughly…”
– Michael Pearson, CEO of Valeant Pharmaceuticals
“We’d love to take a look at Coca-Cola… We could run it with 200 people.”
- Jorge Lemann, Co-founder of 3G Capital
“We’ll buy a second, a third and one day we’ll be able to say: ‘Hello Mr. Comcast!’ or ‘Hello, Mr. Charter!”
- Patrick Drahi, Founder of Altice
When an Outsider meets a cycle, it is likely the cycle whose reputation will remain intact.
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Bust Comparison
All platform companies will be affected now that the feedback loop has gone into reverse.
v1.0 v2.0
1960s
PLATFORMS
Company Leasco Teledyne Valeant
Kraft Heinz
AB InBev
CEO / Leader Saul Steinberg Henry Singleton Michael Pearson
3G Capital
Jorge Lemann
Perception Bad Good Bad? Good?
Peak-to-Trough Decline (87%) (89%) [40%]?
KHC [14%]?
ABI BB [23%]?
Source: Bloomberg, JHL research.
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The Platform Boom – Bust Case Study: AB InBev
Serial acquirer Anheuser-Busch InBev’s stock price is faltering as the company announces the largest consumer acquisition ever.
Anheuser-Busch InBev Stock Price
JANUARY 2, 2008 – OCTOBER 15, 2015
€ 120
€ 100
€ 80
€ 60
€ 40
+1,052%
in 7 years
Jan 23, 2015:
AB InBev
acquires Elysian
Brewing
Nov 5, 2014:
AB InBev acquires
10 Barrel Brewing
Feb 5, 2014:
AB InBev acquires
Blue Point Brewing
[23%]
?
Oct 13, 2015:
AB InBev announces
SABMiller acquisition
for $106bn
€ 20
Mar 28, 2011:
AB InBev acquires
Goose Island Brewery
Nov 18, 2008:
Merger of Anheuser-Busch and InBev is completed
€ 0
2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Bloomberg, Wall Street Journal, AB InBev press releases, JHL research.
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Looming Debt Maturities are Larger than in 2009
Companies will very likely have to refinance their debts at higher interest rates.
US High-Yield and Leveraged Loan Maturities ($ in billions)
2009 – 2017 vs. 2015 - 2023
HY & LL 12/31/2008 HY & LL 9/30/2015
$500
$400
$300
$200
$100
$0
2009 2015 2010 2016 2011 2017 2012 2018 2013 2019 2014 2020 2015 2021 2016 2022 2017 2023
Source: Credit Suisse, JHL research.
Strictly confidential. Not for public distribution. © 2015 JHL Capital Group LLC. All rights reserved. 31

This Bull Market
This cycle has been the largest bull market in history, relative to nominal GDP growth.
S&P 500 Index return is greater than GDP growth
Difference between Annualized S&P 500 Index Return and Nominal GDP Growth
14%
1982-1987
5%
1957-1962
3%
2%
1962-1966
2002-2008
0%
1970-1973
(2%)
1966-1970
GDP growth is greater than S&P 500 Index return
14%
2009-2015
(2%)
1974-1982
7%
8%
1949-1957 1987-2001
Increasing Duration of Bull Market
Source: Bloomberg, JHL research.
Strictly confidential. Not for public distribution. © 2015 JHL Capital Group LLC. All rights reserved. 32

DEATH, TAXES & CYCLES
Strictly confidential. Not for public distribution. © 2015 JHL Capital Group LLC. All rights reserved. 33

Conglomerate Boom 2.0:
A Stable Platform?
October 20, 2015
The opinions set forth in this Presentation are solely
observations of JHL Capital Group LLC, and do not
constitute investment advice or recommendations.
Strictly confidential. Not for public distribution.
© 2015 JHL Capital Group LLC. All rights reserved.