Exide Tech supplemental valuation (2 Dec 2014)

EXIDE TECHNOLOGIES VALUATION UPDATE
Methodology
We downloaded and read Exide’s Disclosure Statement (D.I. 2361) to take in and evaluate the Company’s strategy
going forward. The document summarized the treatment of existing claims and interests in the Debtor and laid out
the capital structure of the reorganized Company at emergence from Chapter 11, most notably of which indicated all
current equity interests will be deemed cancelled, released, and extinguished. More importantly, this document
provided us with management’s financial statement projections over the next five fiscal years and cursory
information pertaining to strategic initiatives they plan on implementing going forward.
We tabulated the Company’s projections for their four operating segments (Transportations North America and
Europe / Rest of the World; Industrials North America and Europe / Rest of the World) and collated the numbers
into two geographic regions, North America and Europe / Rest of the World. The segment data only went down as
far as EBITDA and did not delineate the line items as thoroughly as the consolidated income statement. As an
example, the difference between EBITDA and Gross Profits for any of the segments were not itemized into “selling
& marketing”, “general & administrative”, and so on.
Afterwards, we proceeded to the projected income statement (prepared on a consolidated basis by the Company), as
we needed to audit any discrepancies between the sums derived from the segment data and to draw out assumptions
for the line items below EBITDA. Consequently, we disaggregated some of the subtotals in the income statement. In
other words, we expanded interest expenses to present all three line items comprising it. We also merged EBITDA
into the Company’s projections instead of keeping it separated. We noted some discrepancies between the sum
derived from the segment and the figures reported on the projected income statement, but out of conservatism we
decided to leave them be.
To estimate future free cash flows, we also tabulated the Company’s projections for Accounts Receivable,
Inventory, Trade Payables (Accounts Payables plus Other Accrued Liabilities), and Capital Expenditures
(“CAPEX”), as well as noncash interest expenses, which were required under “Operating Activities” according to
US GAAP.
After tabulation, we merged the income statement and the Operating and Investing sections of the cash flow
statement to create a “free cash flow statement”, effectively converting the Company’s five-year projections into a
base for a DCF model. This had to be done because the Company did not submit any valuation analyses in page 238
of D.I. 2361.
Since our original DCF model relies on 8 years of financial data, to maintain comparability we made no changes to
the discount rate of 12.7861%, we made no changes to the additional value factors previously identified, we used the
same figures for annual sales revenues on the industry level, and we extrapolated the Company’s projections for
another three years before applying the terminal year. We presumed that fiscal year 2019 represents the year
extensive business development concludes and we zeroed restructuring expenses and kept capital spending at a low
2% of sales as we presumed conditions to normalize in FY2020 and beyond.
When we compare the results of the extrapolated model against our original DCF model, the resulting Enterprise
Value of $1,750 million is approximately $90 million lower than our original Enterprise Value of $1,840 million.
However, if we were to revise our original DCF model by combining the Company’s projected CAPEX and
Restructuring Expenses into one total, applying the same depreciation and amortization expenses used in the
extrapolated model, and maintaining the low rate of capital spending for the years after FY2019, the original DCF
model’s Enterprise Value would fall to $1,805 million. The impact is small and more importantly, both sums are still
above the hurdle rates as enumerated.
The Company’s five-year projections forecast operating incomes of $8.31 million, $64.79 million, $105.50 million,
and $141.25 million, and $166.28 million for fiscal years 2015 through 2019, respectively, prior to restructuring and
Page 1 of 22

other items, as well as other add backs. (These can be calculated by subtracting depreciation and amortization from
reported EBITDA projections.) These imply consolidated operating margins of 0.30%, 2.21%, 3.41%, 4.34%, and
4.93% for those respective years. Our original model, by comparison, estimates implied consolidated margins of
0.35%, 2.16%, 3.53%, 4.43%, and 4.89% in the same order. In other words, they are not so different.
The original DCF model, as initially submitted and subsequently revised, are both presented at the very end of this
document. Note that these model will not have costs of sales, SG&A, Marketing, and R&D expenses, Management
Fees, and “other add backs” itemized because our original DCF model was constructed from the bottom up, i.e. the
segment level, using historical values derived from past SEC filings. In these documents, the Company ceased
reporting segment gross profits in FY 2011 and onward and while segment depreciation was readily available on an
annual basis, this was not consistent on a quarterly basis until the 1st
quarter of FY 2013, ending in June 2012.
We did not itemize interest expenses in the original DCF model due to estimation difficulties after the year of
maturity for the Senior Secured Notes and the two facilities under the DIP Credit Agreement. The fact the Company
projected cash interest expenses at values significantly below what it had historically paid out year-on-year (which
ranged between $61 million and $115 million in FY2006 through FY2014) suggests a long-term shift in the capital
structure (rather than a one-time deleveraging), and we were not certain as to how much the Company will
subsequently deleverage in that scenario.
Page 2 of 22

Model Results
1. Exide’s Enterprise Value is $1,750 million.1
This value is greater than…
a. The $1.10 billion in debt as depicted in the balance sheet as reported in the SEC 10-K filing for fiscal year 2014,
including debt subject to compromise.2
b. The $1.26 billion in total debt as depicted in the balance sheet as reported in the SEC 10-Q filing for the second
quarter of FY2015.3
c. The $1.40 billion hurdle derived from figures in certain court filings, consisting of $1,270 million of outstanding
funded debt4
, $6 million of all pre-petition employee obligations5
, $94 million pre-petition trade claims6
,
approximately $6 million in pre-petition taxes7
, and about $24 million in environmental liabilities8
.
2. The Enterprise Value includes the value of Net Operating Loss Carryforwards (“NOLs”), which we
estimated to be $326 million based on the total combined value of US and foreign NOLs9
, our weighted
average cost of capital, and a reduction in the net present value to account for years of non-use. This also
includes the value of Exide’s trademarks, trade names, and technology, which was valued at $72.75 million
based on its net book value10
.
3. Our model results have been generated directly from the Company’s financial projections for fiscal years 2015
through 2019, followed by extrapolations for fiscal years 2020 through 2022 and the terminal period.
4. These results presumably do not include the impact of:
a. The potential recoveries related to the ongoing regarding lead price fixing investigation.
b. The value of Exide’s brand identity, which we consider as distinct from the intellectual property portfolio and
estimate to be anywhere from $142 million and up.
c. The impact of any strategic expansion into other alternative chemical configurations, e.g. Lithium-Ion (Li-ion).
d. The value of Exide Technologies’ non-debtor, privately-held, majority-controlled entities.11
. (Together with
Exide, hereinafter referred to as “the Company”.)
5. The charts and tables in the next two pages provide a brief summary of our results:
1
Enterprise Value is defined as the present value of the future free cash flows to the Company.
2
See Exide Technologies, Inc. Form 10-K (filed July 31, 2014 ) via Edgar Online, pp. 79 and 84.
3
See Exide Technologies, Inc. Form 10-Q (filed November 7, 2014) via Edgar Online, pp. 5 and 9.
4
The Company currently has approximately $1.27 billion of outstanding funded debt consisting of (a) a first out
superpriority, secured, asset-based revolving facility in the principle amount of $200 million provided by JP Morgan
Chase & Co. (the “DIP ABL Facility”); (b) a second out superpriority, multiple-draw secured term loan in the
aggregate principal amount of $347 million provided by a group of lenders, over 80% of which are also members of
the Unofficial Committee of Noteholders (the “DIP Term Facility” and together with the DIP ABL Facility, the
“DIP Facility”); (c) $675 million in secured debt outstanding under the Senior Secured Notes, and (c) $51.9 million
in unsecured debt under the Convertible Notes.
5
In addition to the Company’s funded debt, the Company also has debt in the nature of, among others, prepetition
employee obligations and benefit programs, prepetition trade payables and reclamation claims, prepetition taxes,
prepetition environmental claims and prepetition tort claims. Specifically, the Company has represented that it owes
an estimated “$16,900,000.00 on account of all of the Prepetition Employee Obligations.” D.I. 5 at ¶ 16. Upon the
Ad Hoc Committee’s information and belief, approximately $10,800,000.00 of said Prepetition Employee
Obligations have since been paid by the Company. See Id.
6
The Company has represented that “it has outstanding prepetition trade claims totaling approximately $104
million, which represents actual trade accounts payable as of the Petition Date.” D.I. 6 at ¶ 22. Upon the Ad Hoc
Committee’ information and belief, approximately $10,000,000.00 of said prepetition trade claims have since been
paid by the Company as critical trade debt. Id. at ¶ 14.
7
The Company has represented that it owes “approximately $5.68 million in prepetition Taxes[.]” D.I. 11 at ¶ 15.
Upon the Ad Hoc Committee’s information and belief, said taxes have since been paid by the Company. Id.
8
The Company has established liabilities for on-site and off-site environmental remediation costs where such costs
are probable and reasonably estimable and believes that such liabilities are adequate. It has estimated these liabilities
at an amount of $24,100,000 on September 30, 2014. See Exide Technologies, Inc. Form 10-Q (filed November 7,
2014) via Edgar Online, p. 21.
9
See Exide Technologies, Inc. Form 10-K (filed July 31, 2014) via Edgar Online, p. 101.
10
See Exide Technologies, Inc. Form 10-Q (filed November 7, 2014) via Edgar Online, p. 13.
11
See D.I. 2219.
Page 3 of 22

Unadjusted Net Present Value $1,351.56 million
Adjustments for incremental sources of value:
60% of PV of Net Operating Loss Carryforwards $325.55 million
Reported net book value of trademarks, trade names, and technology $72.75 million
Adjusted Net Present Value (Enterprise Value) $1,749.86 million
PV of Terminal Value as a % of Adjusted Net Present Value 82.77%
Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F
Net Sales (USD Millions)N
2,816 2,943 3,706 3,304 2,682 2,887 3,086 2,970 2,853 2,729 2,938 3,093 3,258 3,374 3,544 3,691 3,838
Y/Y Change 4.5% 25.9% (10.8%) (18.8%) 7.6% 6.9% (3.7%) (3.9%) (4.4%) 7.7% 5.3% 5.3% 3.6% 5.0% 4.2% 4.0%
‡ The colored area indicates FY 2020 to FY 2022, when we extrapolated the Company’s projections for the five
prior forecast years (FY2015 to FY2019).
N
Actual net sales were computed by adding back the accrual for sales returns and allowances to reported net sales
and then subtracting settlements made and currency translation, which reflect the actual values experienced by the
Company.
Page 4 of 22

DCF VALUATION: EXTRAPOLATED
In USD Millions unless otherwise indicated FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
FY2023 and Beyond
(Terminal Period)
Global Battery Sales 113,429.54 122,316.63 131,438.06 140,802.85 150,420.40 160,300.58 170,453.69 180,890.49 4,126,782.28
Lead-acid Batteries (LAB), % of global market 37.40% 36.20% 35.10% 34.09% 33.15% 32.28% 31.46% 30.69% 29.97%
Global LAB Sales 42,426.42 44,276.53 46,132.37 47,994.31 49,863.17 51,740.07 53,626.31 55,523.31 1,236,869,39
Exide’s Market Share (Net) 6.43% 6.64% 6.70% 6.79% 6.77% 6.85% 6.88% 6.91% 7.65%
Consolidated Net Sales 2,728.73 2,938.06 3,092.72 3,257.96 3,374.40 3,543.88 3,691.30 3,838.22 94,478.93
Allocated to…
North America 1,037.37 1,124.52 1,187.20 1,257.39 1,316.97 1,362.98 1,419.68 1,476.19 36,336.77
Europe / Rest of the World 1,691.35 1,813.54 1,905.52 2,000.57 2,057.42 2,180.89 2,271.62 2,362.04 58,142.16
Gross Profits
North America 118.71 183.34 207.49 227.91 246.35 254.95 265.56 276.13 5,963.23
Europe / Rest of the World 228.10 228.17 251.49 274.35 285.80 302.96 315.56 328.12 7,775.99
‡Balancing Error (1.20)
Consolidated 345.61 411.51 458.98 502.26 532.15 557.91 581.12 604.25 13,739.22
SG&A, Marketing, R&D, Mgt Fee
North America (114.77) (118.27) (124.36) (130.71) (135.98) (140.73) (146.59) (152.42) (3,163.80)
Europe / Rest of the World (142.61) (136.87) (136.02) (136.29) (135.25) (143.36) (149.33) (155.27) (3,845.92)
Balancing Error (0.30) (7.31) (11.38) (18.77) (19.22)
Consolidated (257.68) (262.44) (271.76) (285.77) (290.45) (284.10) (295.92) (307.69) (7,009.72)
EBITDA
North America 3.93 65.07 83.13 97.20 110.36 114.22 118.97 123.71 2,799.43
‡Balancing Error (1.50) (7.31) (11.38) (18.77) (19.22)
Consolidated 87.93 149.06 187.22 216.49 241.70 273.81 285.20 296.55 6,729.50
Depreciation and Amortization and “Other Add Backs”
Depreciation and Amortization (D&A) (81.12) (91.59) (93.10) (94.01) (94.64) (102.78) (107.05) (111.31)
“Other Add Backs” (26.41) (21.10) (12.69) (5.73) (5.73) (8.93) (9.30) (9.67)
Total (107.53) (112.69) (105.78) (99.74) (100.37) (111.71) (116.35) (120.98) (1,881.60)
Operating Income before Restructuring,
Gains, Losses, and Impairments
(19.60) 36.37 81.43 116.75 141.33 162.10 168.85 175.57 4,847.90
Restructuring Expenses (12.80) (16.64) (9.96) (3.00) (3.00)
Gain (Loss) on Asset Sales / (Impairments) (13.27)
Operating Income (EBIT) (45.67) 19.74 71.48 113.75 138.33 162.10 168.85 175.57 4,847.90
Consolidated Operating Margins as Implied (1.67%) 0.67% 2.31% 3.49% 4.10% 4.57% 4.57% 4.57% 5.13%
Interest Expense
Page 5 of 22

Cash Interest Expense (43.76) (21.16) (22.67) (24.80) (26.09) (26.78) (27.89) (29.01) (713.97)
Paid-in-Kind (PIK) Interest Expense (62.11) (39.04) (41.82) (44.80) (47.99) (49.01) (51.05) (53.09) (1,306.72)
Deferred Financing Costs (18.82) (3.84) (3.84) (3.84) (3.84) (4.21) (4.38) (4.56) (112.17)
Total Interest Expense (124.69) (64.04) (68.33) (73.44) (77.92) (80.00) (83.33) (86.65) (2,132.86)
Consolidated Pre-tax Income (170.36) (44.30) 3.15 40.32 60.42 82.10 85.52 88.92 2,715.04
Other / Income Taxes (112.46) (2.72) (0.38) (0.94) (2.75) (5.75) (8.10) (10.62) (950.26)
Consolidated Net Income (282.82) (47.02) 2.77 39.38 57.67 76.35 77.41 78.30 1,764.77
Add back: D&A 107.53 112.69 105.78 99.74 100.37 111.71 116.35 120.98 1,881.60
Add back (Deduct): Gain (Loss) on Asset Sales
/ Impairments
13.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Add back: PIK interest expense 62.11 39.04 41.82 44.80 47.99 49.01 51.05 53.09 1,306.72
Add back: Deferred financing costs 18.82 3.84 3.84 3.84 3.84 4.21 4.38 4.56 112.17
Operating Cash Flow before changes in
working capital
(81.10) 108.55 154.22 187.76 209.87 241.27 249.20 256.93 5,065.26
Changes in Working Capital
Accounts Receivable 30.04 (12.09) (17.08) (20.19) (13.45) (17.94) (21.45) (21.38)
Inventory 8.97 (1.51) 5.05 (16.08) (9.60) (18.86) (20.45) (20.38)
Accounts Payable 8.72 80.06 71.57 31.93 12.03 24.38 31.52 31.42
Other 16.52 (9.09) (32.39) (17.25) (37.52)
Net 64.25 57.37 27.15 (21.59) (48.54) (12.41) (10.38) (10.34) (254.56)
Net Operating Cash Flow (16.85) 165.92 181.37 166.17 161.33 228.86 238.83 246.59 4,810.70
Capital Expenditures (110.27) (162.80) (112.21) (117.12) (67.20) (70.58) (73.51) (76.44) (1,881.60)
Free Cash Flows (127.11) 3.13 69.15 49.05 94.13 158.28 165.31 170.15 2,929.10
Present Value of Free Cash Flows (112.70) 2.46 48.20 30.31 51.58 76.89 71.21 64.98 1,118.64
1
The terminal growth rate of the Global Battery industry is 8.04%, a value 10% less than the 20-year compounded growth rate from $35.4 billion in 2002 to the Freedonia Group’s 2022 estimate of $196 billion. Exide’s sales
figures for the terminal period (2023 and Beyond) are computed by estimating the present value of sales at the industry level at FY2022 using the terminal growth rates and then applying the market shares of the LAB market
(relative to global batteries) and the Company (relative to the LAB market).
2
Balancing errors represent the divergence of values between summations of financial data from the business segments and what were provided in Exide’s projections in Page 231 of D.I. 2632. As an example, for FY2019,
the Company estimated operating expenses of $393.82 million, a total which included $94.64 million in D&A, $3.00 million in restructuring expenses, and $5.73 million in “other add backs”. Given that the Company
estimated an operating income of $138.33 million for FY2019, operating income prior to restructuring expenses, “other add backs” and D&A should amount to $241.70 million. However, in pages 4 through 7, the Company
estimated FY2019 segment EBITDA of $43.09 million (Transportation NA), $69.31 million (Transportation EROW), $67.27 million (Industrial NA), and $81.25 million (Industrial EROW), for a corporate total of $260.92
million. The resulting $19.2 million discrepancy is considered a balancing error, but we do not add it back as it could reflect expenses allocated for the corporate office. We do not expect any more balancing errors after
FY2019.
3
We added back PIK interest expense and the deferred financing costs in the computation of operating cash flows because these are non-cash items. Under the indirect method of calculating operating cash flows, US GAAP
requires interest receipts and interest payments to be classified under operating activities.
Page 6 of 22

Model Assumptions
1. Discount Rate
The Weighted Average Cost of Capital (“WACC”) used to discount Obsido’s projected future free cash flows was
12.7861%, which can be computed as follows:
Cost of Debt:
• 4.1782% cost of total liabilities (long-term average)
• 35.00% tax rate (statutory tax rate)
• 81.2148% weight of total liabilities (long-term median)
• 2.00× multiplier reflecting high credit risks, derived from Obsido’s scorecard
• Cost of Debt = Financial Cost × (1 – Tax Rate) × Risk Multiplier
o 4.1782% × (1 – 35%) × 2 = 5.4316%
Cost of Equity:
• 2.0604% risk-free rate (US7Y T-Bond rate as of Nov 12, 2014)
• 21.4147% market return (median annual return of Thomson Reuters Global Machinery Equipment and Components
Index from 2005 through 2014)
• 18.7852% weight of total equity (based on long-term median liabilities-to-assets ratio)
• 2.20× multiplier reflecting moderate efficiency risks, high profitability risks, moderate-to-high competitiveness risks,
and moderate risks in future prospects, derived from Obsido’s scorecard.
• Cost of Equity = Risk-free rate + (Market Return – Risk-free Rate) × Risk Multiplier
o 2.0604% + (21.4147% – 2.0604%) × 2.2 = 2.0604% + 19.3543% × 2.2 = 44.5820%
WACC
• WACC = Cost of Debt × Weight of Debt + Cost of Equity × Weight of Equity
o 5.4316% × 81.2148% + 44.5820% × 18.7852% = 4.4113% + 8.3748% = 12.7861%
Our risk multipliers for the costs of equity and debt were derived from our risk ratings on the “Five Elements” of a
business, which we consider to be Creditworthiness, Efficiency, Profitability, Inherent Stability, and Future
Prospects.
We typically place a risk multiplier in the computation of the cost of debt to account for a company’s solvency and
liquidity. We do this because the predominantly low interest-rate environment that has persisted for several years to
date distorts equity valuations for leveraged businesses, inadvertently understating credit risks.
As for the cost of equity, our risk multiplier incorporates our evaluations of a company’s business operations,
historical profitability, competitive advantages, and the future of both the company and its underlying industry. In
contrast, the beta coefficient that is normally used within the analyst profession is derived from price movements
and their correlation to a specified benchmark. We believe price volatility misestimates “risk” as it encapsulates both
long-term fundamentals and short-term “noise” from the financial markets. To establish our point, our multiplier of
2.2 is 22% greater than Exide’s beta coefficient of 1.8, as calculated from the monthly prices over the past five
years. To establish an even stronger point, the beta coefficient computed using daily prices over the past three
months amounts to -1.4; a number that can be interpreted to mean the company is “safer” than the market to an
extreme degree.
We chose to use the Thomson Reuters Global Machinery, Equipment, and Components index for the computation of
the cost of equity because the Company operates on a global level and the index also offered a significantly higher
median return compared to other alternatives, such as:
• NASDAQ index –16.82% median return
• S&P 500 index –11.31% median return
• Dow Jones US Industrials Index – 12.00% median return
• NYSE Composite Index – 10.84% median return
• Thomson Reuters North America Machinery, Equipment, and Components index – 15.80% median return
Page 7 of 22

In every alternative, the median return was higher than the arithmetic or geometric mean return, making the use of
the median conservative.
We also used the US 7Y T-Bond as a proxy of the risk-free rate as it is the closest available maturity for our forecast
period of 8 years.
2. Industry Sales Projections
We needed to project sales on the industry level for the years after FY2019, when we extrapolated the Company’s
projections up to FY2022, because we derived consolidated net sales for those years using the historical market
shares as implied by the Company’s projections for FY2015 through FY2019.
We first projected the sales of the global battery industry, because Exide’s operations span the entire world. To
account for the fact Exide’s business has been and is currently a “pure-play”12
on lead-acid batteries (“LABs”), we
then narrowed battery sales down to the portion attributable to LABs and other related technologies such as lead-
carbon.
However, the Freedonia Group does not provide year-on-year forecasts up to calendar year 2022, and we deemed it
to be more prudent to run a regression of Global Battery Sales on certain socioeconomic metrics.
Two regressions were used to estimate Global Battery Sales in USD millions. Global Battery Sales were regressed
against Global Vehicles in Use and Energy Intensity, which were in turn estimated with regressions based on World
Population, Global Vehicle Production, and Global Lead Usage. These figures were sourced from the World Bank
databank13
, the Enerdata Yearbook14
, the Freedonia Report on the Global Battery Industry15
, the International
Organization of Motor Vehicle Manufacturers16
, and the International Lead and Zinc Study Group17
.
Descriptive statistics for the three regressions can be found in the table below:
Dependent Variable
Global Battery Sales
(USD millions)
Vehicles in Use (millions)
Energy Intensity (kg of oil equivalent
in inflation-adjusted USD)
Independent
Variables
(U) Vehicles in Use
(I) Energy Intensity
(P) World Population
(V) Vehicle Production
(P) World Population
(L) Global Lead Usage
Formulas
239.09×U + 595870.91×I –
287830.11
0.44×P + 0.97×V – 2015.23 0.008022×L – 0.000071×P + 0.600457
R2
(Adjusted R2
) 99.82% (99.77%) 99.71% (99.63%) 96.35% (95.31%)
Significance F 0.00 0.00 0.00
p-values
Vehicles in Use: 0.00%
Energy Intensity: 1.61%
Intercept: 0.05%
World Population: 0.00%
Vehicle Production: 8.29%
Intercept: 0.00%
World Population: 0.19%
Global Lead Usage: 1.63%
Intercept: 0.01%
Mean Absolute
Deviation
$733 million 4.7 million units 0.001 koe/$05p
These regressions ultimately result in an implied 5.66% 8-year compounded annual growth rate (“CAGR”) for the
global battery industry, going forward from FY2015 through FY2022. The growth rates of the independent variables
were taken from the 9-year CAGR for World Population and the midpoint between 5-year CAGR and 9-year CAGR
for both Vehicle Production and Lead Usage. The terminal value of Global Battery Sales were estimated using an
12
“Pure-play” means a focus on only one industry or product. See Investopedia, “Definition of Pure Play”,
available on http://www.investopedia.com/terms/p/pureplay.asp.
13
http://databank.worldbank.org/data/home.aspx
14
https://yearbook.enerdata.net/
15
http://www.freedoniagroup.com/DocumentDetails.aspx?ReferrerId=FG-01&studyid=2939
16
http://www.oica.net/category/production-statistics/
17
http://www.ilzsg.org/static/statistics.aspx?from=1
Page 8 of 22

8.04% growth rate over the terminal period, which was calculated by deducting 10% from the long-term 20-year
CAGR from 2002 to 2022, using Freedonia’s numbers18
.
As for the sales of the Global Battery industry during the terminal period, we assumed that the industry will grow at
a rate of 8.04% per year in perpetuity. We derived this long-term growth rate from the estimates provided by the
Freedonia Group, as follows:
Source: Freedonia Group 2002 2007 2012 2017F 2022F
World Battery Demand (USD Billions)
World 35.4 56.7 95.5 138.5 196.0
USA 8.7 11.8 13.9 17.1 20.7
China 3.6 10.4 26.5 46.6 75.9
Japan 3.7 5.9 9.2 11.7 13.5
Other Asia-Pacific 4.2 7.4 14.1 21.6 32.6
Western Europe 8.6 11.2 15.6 19.0 22.9
Rest of the World 6.6 10.0 16.2 22.5 30.4
Given the forecast of $196 billion for calendar year 2022 and the historical value of $35.4 billion for calendar year
2002, the compounded annual growth rate over a 20 year period is 8.9338% per year. We think reducing this
growth rate by approximately 90 basis points (or 10%) makes our industry sales estimates more conservative.
Freedonia’s projections are justified by several factors, including exceptional growth from grid-scale energy storage,
the use of batteries to supply electricity, expanding production of hybrid/electric vehicles, and anticipated major
downshifts in cost for alternative chemical configurations. To support this view, we noted that the Silicon Valley
Bank expects the electric vehicle battery market to grow to $33 billion by 202019
, batteries used for consumer
devices to reach $55 billion by 201720
, and large-scale grid storage to have a market size of $150 billion by 201521
,
all propelled by strong demand for electronic devices (particularly tablets and smartphones), fast economic growth
in geographies beyond the United States, greater environmental awareness, and expanded regional electrification22
.
With the Global Battery Sales figures in hand, we then narrow this down to LABs. Historical figures and forward
estimates obtained from the Industrial Technology Research Institute23
were combined with the historical sales
figures of the global battery industry, thus illustrating a declining market share of LABs relative to all batteries.
18
“Overview – Batteries to 2017”, Freedonia Group (November 2013), available on
http://www.freedoniagroup.com/DocumentDetails.aspx?ReferrerId=FG-01&studyid=3075.
19
“Energy Storage Overview”, Silicon Valley Bank, February 2013, p. 22, available at
http://www.svb.com/pdfs/energy_storage_industry_02262013.pdf.
20
Id., p. 18.
21
Id., p. 28.
22
Id., pp. 18, 23, 28.
23
http://investtaiwan.nat.gov.tw/news/ind_news_eng_display.jsp?newsid=64
Page 9 of 22

The LAB market shares above were used to generate a logarithmic regression with a high R2
value of 96%,
indicating that the regression explains 96% of the movements in the actual market share. We chose a logarithmic
regression, as our research on the LAB market indicates significant growth from the emergence of advanced lead-
acid and lead-carbon technologies, which tie the higher technical performance requirements typically met by other
alternative chemical configurations to the low manufacturing costs and great durability that characterize LABs.24
As a matter of fact, the 2013 Electricity Storage Handbook of the Department of Energy and Electric Power
Research Institute describes lead-acid carbon technology as capable of “exhibit[ing] a high rate characteristic in both
charge and discharge with no apparent detrimental effects as are typically experienced in traditional vented lead-acid
(VLA) and VRLA [valve-regulated lead-acid] batteries. This characteristic allows the lead-acid carbon batteries to
deliver and accept high current rates only available with current higher-cost nickel metal-hydride (Ni-MH) and Li-
ion batteries.”25
Other factors also include the development of “hybrid” technologies that merge a lead-based battery with another
chemical configuration to augment technical performance26
and as well as the sustained cost advantages of LABs
with respect to large sizes.27
These factors ensure that LABs do not decline quickly into irrelevance and allow the
technology to compete on par with other alternative chemical configurations. Consequently, we think the market
share held by LABs will bottom out at 30% and stay there.
3. Exide’s Market Share
Our assumptions for the Company’s market share for FY2020 to FY2022 in the extrapolated model were derived
from the market shares implied by the Company’s own projected consolidated sales, when compared to our
24
Navigant Research, “Executive Summary: Advanced Lead-Acid Batteries”, 1 – 3.
25
A. A. Akhil, D. T. Bradshaw, A. B. Currier, S. B. Chen, A. L. Cotter, W. D. Gauntlett, G. Huff… D. M. Rastler,
“DOE/EPRI 2013 Electricity Storage Handbook in Collaboration with NRECA”, Sandia National Laboratories
(July 2013), 75.
26
Eurobat, ACEA, JAMA, KAMA, and ILA, A Review of Battery Technologies for Automotive Applications (2014),
8.
27
Advanced Lead-Acid Battery Consortium, “Has the Obvious been Overlooked? The Unique Value of Lead-
Carbon Technology”, 3 – 10.
Page 10 of 22

estimates of sales attributable to the LAB industry year-on-year. We used a logarithmic regression with a 95.22% R2
to forecast these market shares, the result of which is presented in the table below:
The Company’s market share for the terminal period relied on the same assumption as our original valuation model,
7.65% (which is 5% less than the long-term median market share of 8.06%).
4. Regional Allocations
We based the division of consolidated sales among North America and Europe / Rest of the World on the five-year
average of the Company’s allocations over the forecast period, which are 38.46% and 61.54% respectively. The
following describe the Company’s projections:
Source: Exide Technologies, D.I. 2361 2015F 2016F 2017F 2018F 2019F
Segment Sales (USD Thousands)
Transportation North America 677,829.00 730,554.00 774,897.00 824,596.00 860,519.00
Transportation Europe / Rest of the World (EROW) 921,422.00 1,005,358.00 1,051,362.00 1,103,225.00 1,140,126.00
Industrials North America 359,545.00 393,970.00 412,301.00 432,797.00 456,454.00
Industrials EROW 769,930.00 808,181.00 854,156.00 897,342.00 917,298.00
Consolidated Sales 2,728,726.00 2,938,063.00 3,092,716.00 3,257,960.00 3,374,397.00
North America 1,037,374.00 1,124,524.00 1,187,198.00 1,257,393.00 1,316,973.00
% of consolidated 38.02% 38.27% 38.39% 38.59% 39.03%
Europe / Rest of the World 1,691,352.00 1,813,539.00 1,905,518.00 2,000,567.00 2,057,424.00
% of consolidated 61.98% 61.73% 61.61% 61.41% 60.97%
5. Gross Profits
We based the computation of gross profits (and thus, cost of sales) by calculating Gross Margins on a geographic
segment basis, before utilizing the forward five-year average to extrapolate segment gross profits for FY2020
through FY2022, which are 16.41% for North America and 13.37% for EROW. Using the forward 5Y average is
more conservative than the three-year average from FY2017 to FY2019 as it accounts for underperforming periods.
The table below presents the raw data from which these gross margins were computed:
Segment Gross Profits
Transportation North America 50,264.00 101,834.00 115,092.00 127,699.00 137,040.00
Page 11 of 22

Transportation Europe / Rest of the World
(EROW)
108,694.00 104,179.00 113,838.00 119,887.00 124,442.00
Consolidated 346,808.00 411,505.00 458,980.00 502,260.00 532,149.00
North America 118,705.00 183,339.00 207,494.00 227,909.00 246,345.00
Gross Margin (%) 11.44% 16.30% 17.48% 18.13% 18.71%
Europe / Rest of the World 228,103.00 228,166.00 251,486.00 274,351.00 285,804.00
Gross Margin (%) 13.49% 12.58% 13.20% 13.71% 13.89%
Take note that 2015F consolidated gross profits are $1.2 million greater than what was reported on the consolidated
income statement in D.I. 2361, due to a “balancing error”.
6. EBITDA
We based the computation of EBITDA by calculating EBITDA margins on a geographic segment basis, utilizing the
3-year average to retain the impact of extensive business development. These were determined to be 7.7% for North
America and 6.76% for EROW.
The table below presents the raw data from which these EBITDA margins were computed:
Segment EBITDA
Transportation North America (29,339.00) 21,926.00 30,085.00 37,405.00 43,092.00
Transportation Europe / Rest of the World (EROW) 46,996.00 45,289.00 56,427.00 63,032.00 69,310.00
Consolidated 89,424.00 156,372.00 198,595.00 235,258.00 260,919.00
North America 3,933.00 65,074.00 83,130.00 97,198.00 110,363.00
EBITDA Margin (%) 0.38% 5.79% 7.00% 7.73% 8.38%
Europe / Rest of the World 85,491.00 91,298.00 115,465.00 138,060.00 150,556.00
EBITDA Margin (%) 5.05% 5.03% 6.06% 6.90% 7.32%
We also noted that the Company’s reported EBITDA calculations on the projected income statement in D.I. 2361
are lower than the resulting EBITDA when all four segments are added up together. As a key point, estimated
EBITDA for FY2015 was reported to be $61.86 million and estimated EBITDA for FY2019 was reported at
$238.70 million.
These figures did not add up to what can be summed up from the segment information and we believed the
discrepancy was partially a result of the Company’s inclusion of the restructuring expenses in their EBITDA
projections. However, no other information had been given.
We assumed that the difference between Gross Profits and EBITDA contained the line items “Selling & Marketing”,
“General & Administrative”, “Engineering and Research & Development”, and “Management Fees”. We could not
determine how D&A was accounted for due to insufficient transparency on part of the Company regarding D&A’s
allocation.
7. D&A and “Other Add Backs”
D&A and “Other Add Backs” were compared to Net Sales on a year-on-year basis. Our projections for these items
depended on a 3-year average of the aforementioned ratios, to account for the lower CAPEX requirements in the
years after FY2019 (which translate to slower growth in D&A expenses).
Page 12 of 22

We do not know what comprises “Other Add Backs” as the company did not provide any information regarding its
components.
For the terminal period, we normalized D&A and CAPEX by equating the two to each other. As stated in our
original valuation report, D&A represents annualized expensing of all CAPEX made in the past. This characteristic
means it is impossible for D&A to exceed CAPEX in the super long run.
The following table contains D&A and “Other Add Backs” relative to net sales, as projected by the Company:
D&A as % of Net Sales 2.97% 3.12% 3.01% 2.89% 2.80%
Other Add Backs as % of Net Sales 0.97% 0.72% 0.41% 0.18% 0.17%
8. Restructuring Expenses
Restructuring expenses are shown to be declining rapidly over a period of time. We believe this will zero out in
fiscal years 2020 and beyond as the structural changes put in place by executive management are expected to persist
over the long run.
The chart above was taken from the Projected Income Statement.
9. Interest Expenses
Interest expenses were computed as a percentage of sales. The three-year average (2.26%) was used for fiscal years
2020 and beyond to account for the normalization after FY2015. We also calculated the composition of interest
expenses in order to determine the value with which to add back to net income when calculating operating cash
flows, as the interest costs are comprised of both cash and non-cash items.
The non-cash percentages used for estimating operating cash flows beyond FY2019 also relied on the three-year
averages, to account for normalization. The relevant figures are 33.47% (cash), 61.27% (PIK), and 5.26% (Deferred
Financing Costs). We believe adding them back for computing operating cash flows is appropriate as these are non-
cash expenses and US GAAP requires their inclusion under operating activities.
Interest Expenses
Consolidated – Percentage of Sales 4.57% 2.18% 2.21% 2.25% 2.31%
Page 13 of 22

Composition – Percentage of Consolidated
Interest Expenses
Cash 35.10% 33.04% 33.18% 33.77% 33.48%
PIK (non-cash) 49.81% 60.96% 61.20% 61.00% 61.59%
Deferred Financing Costs (non-cash) 15.09% 6.00% 5.62% 5.23% 4.93%
10. Income Taxes
Income Taxes
Pre-tax Income (170.36) (44.30) 3.15 40.32 60.42
Taxes (112.46) (2.72) (0.38) (0.94) (2.75)
Net Income (282.82) (47.02) 2.77 39.38 57.67
Effective Tax Rate (66.01%) (6.13%) 11.94% 2.33% 4.54%
As presented in the table above, the Company’s projected income statement as reported made it difficult for us to
project taxes going forward. To keep things simple, we decided to steadily raise the tax rates back to 11.94% by
2022F and then use the statutory tax rate of 35% for the terminal value.
11. Changes in Working Capital
Changes in working capital were based on projected values of Accounts Receivable, Inventories, and Trade
Payables (which consisted of Accounts Payable and Other Accrued Liabilities). To project the changes in working
capital for FY2020 to FY2022, we forecast these balance sheet items first by using a three-year average of the DSO
(Days Sales Outstanding), DSI (Days Sales in Inventory), and DPO (Days Payable Outstanding) productivity ratios
on a consolidated level. The three-year forward average was used to account for improving productivity over time.
Using the average DSO, DSI, and DPO ratios (53.11, 60.08, and 84.58 days respectively), we estimated the
Accounts Receivable, Inventories, and Trade Payables needed to support business operations as forecast and
compared them against prior year’s balances. An increase in Receivables and Inventory reduces operating cash
flows while an increase in Trade Payables increases them, and vice-versa.
The following table contains the Company’s projected working capital and implied productivity ratios for FY2015
through FY2019, as well as our historical estimates of the former:
Source: Exide Technologies, D.I.
2361
2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F
Working Capital Accounts
Accounts Receivable 434.93 447.01 464.09 484.28 497.73 515.67 537.12 558.50
Inventory 450.53 452.04 446.98 463.06 472.66 491.52 511.96 532.34
Trade Payables 543.23 611.30 683.17 718.46 733.36 757.74 789.26 820.68
Productivity Ratios
DSO 62.22 54.78 53.76 53.12 53.11
DSI 71.51 65.19 62.30 60.27 60.08
DPO 74.36 75.55 81.31 84.10 84.58
Changes in Working Capital
Value 64.25 57.37 27.15 (21.59) (48.54) (12.41) (10.38) (10.34)
Percentage of Sales 2.35% 1.95% 0.88% (0.66%) (1.44%) (0.35%) (0.28%) (0.27%)
For the terminal period, we set changes in working capital to a negative 0.27% of sales, which was the figure
derived from the FY2022 projection.
12. Capital Expenditures
Page 14 of 22

The Company’s capital expenditures for FY2015 through FY2019 were compared against net sales for those
forecast years. We used the CAPEX-to-Sales ratio for FY2019 to project capital expenditures for FY2020 and
thereafter to account for reduced capital spending after spending the next five years on extensive business
development.
Capital Expenditures
Value (110.27) (162.80) (112.21) (117.12) (67.20)
As a Percentage of Sales 4.04% 5.54% 3.63% 3.59% 1.99%
For the terminal period, we assumed CAPEX remains at the same percentage of sales as FY2022 in order for the
Company to maintain its recovered competitiveness over the long run.
13. Additional Sources of Value
a. Net Operating Loss Carryforwards
The NOLs reported on the balance sheet for Exide in the SEC 10-K report for fiscal year 2014 was $315
million. However, we observed that the actual amount for US and foreign NOLs were $476 million and
$970 million, respectively.28
We believe the Company used an internal discount rate or their own internal
timeline of usage to arrive at a value of $315 million. But since these were not disclosed by the Company in
its SEC 10-K filings and Exide does not delve into the Net Operating Loss Carryforwards in their quarterly
reports, we made an assumption on the timeline of usage and used the same discount rate as our DCF
valuation to maintain consistency.
The table below contains our assumed timeline of NOL use, extending up to 2034 for US NOLs and 2032
for foreign NOLs, as stated in the SEC 10-K reports:
Value of NOLs
US / NA Foreign Consolidated Present Value
2015 23.79 53.91 77.70 68.89
2016 23.79 53.91 77.70 61.08
2017 23.79 53.91 77.70 54.16
2018 23.79 53.91 77.70 48.02
2019 23.79 53.91 77.70 42.57
2020 23.79 53.91 77.70 37.75
2021 23.79 53.91 77.70 33.47
2022 23.79 53.91 77.70 29.67
2023 23.79 53.91 77.70 26.31
2024 23.79 53.91 77.70 23.33
2025 23.79 53.91 77.70 20.68
2026 23.79 53.91 77.70 18.34
2027 23.79 53.91 77.70 16.26
2028 23.79 53.91 77.70 14.42
2029 23.79 53.91 77.70 12.78
2030 23.79 53.91 77.70 11.33
2031 23.79 53.91 77.70 10.05
2032 23.79 53.91 77.70 8.91
2033 23.79 23.79 2.42
2034 23.79 23.79 2.14
Total 475.8 970.4 1,446.20 542.59
28
Page 15 of 22

Due to Exide’s current situation, we thought it prudent to reduce the present value we computed in order to
account for the strong possibility Exide will not have any taxable income to use its NOLs on for the next
few years as well as the fact Exide did not disclose how it intends to use its NOLs going forward.
We considered a 40% reduction in our computed value as sufficient, since it is consistent with the reported
balance sheet figure of $315 million.29
b. Trademarks, Trade names, and Technology
Court Dockets #1526 and #1646, filed in March and April of 2014, show that the Company has retained
and employed M-CAM as an Intellectual Property Consultant and Broker to analyze Exide’s patent
portfolio and provide assistance in its marketing and potential monetization.
As of the second quarter of FY2015, Exide Technologies possessed a net book value of $72.75 million in
trademarks, trade names, and technology.30
Considering Exide’s notable market share in the LAB industry,
a history spanning more than 125 years, and global operations spanning at least 80 countries, we believe
any monetization of these intangible assets can incrementally add to the Exide’s enterprise value.
However, we do not have any information to make any reasonable assessments of Exide’s IP portfolio on
an individual basis and we do not consider ourselves experts in IP valuation to begin with. For these
reasons, we limited the incremental value to what has been reported on the balance sheet. As of the most
recent 10-Q filed in November 2014, trademarks and trade names and technology were respectively worth
$60.77 million and $11.97 million after accumulated amortization.31
c. Exide’s brand identity
Although an internationally agreed legal definition for brands delineates it as “sign or set of signs certifying
the origin of a product or service and differentiating it from the competition”, this definition is not the
foundation of brand management. In The New Strategic Brand Management: Creating and Sustaining
Brand Equity Long Term, author Jean-Noël Kapferer explains (italics in original):
“Contrary to what the legal definition asserts, a brand is not born but made. It takes time to create
a brand, even though we talk about launching brands. In fact this means launching a product or
service. Eventually it may become a brand, and it can also cease to be one. What makes a brand
recognizable? When do we know if a name has reached the status of a brand? For us, in essence, a
brand is a name that influences buyers, becoming a purchase criterion.
This definition captures the essence of a brand: a name with power to influence buyers. Of course,
it is not a question of the choice of the name itself. Certainly a good name helps: that is, one that is
easily pronounceable around the world and spontaneously evokes desirable associations. But what
really makes a name become a brand are the saliency, differentiability, intensity and trust attached
to these associations.
[….] When talking of brands we are sometimes referring to a single aspect such as the name or
logo, as do intellectual property lawyers. In brand management, however, we speak of the whole
system, relating a concept with inherent value to products and services that are identified by a
name and set of proprietary signs (that is, the logo and other symbols). This system reminds us of
the conditional nature of the brand asset: it only exists if products and services also exist.
Differentiation is summarized by the brand concept, a unique set of attributes (both tangible and
intangible) that constitute the value proposition of the brand.
29
See Id.
30
See Exide Technologies, Inc. Form 10-Q (filed November 7, 2014) via Edgar Online, p. 13.
31
See Id.
Page 16 of 22

To gain market share and leadership, the brand must be:
 able to conjure up a big idea, and attractive;
 experienced by people at contact points;
 activated by deeds and behaviors;
 communicated;[ and,]
 distributed.”32
Because a company’s brand is an experiential asset generated by the convergence of business operations,
management of customer relationships, and marketing activities, we consider Exide’s brand identity as
distinct from its registered trademarks and trade names.
To support this belief, we looked at the brands of other market leaders. For example, the brand of Apple is
considered by Forbes in its list of “The World’s Most Valuable Brands” to be worth $124 billion in
November 2014.33
Yet according to Apple’s FY2014 balance sheet, all of its intangible assets were
reported at $4.1 billion net of accumulated amortization. In another example, Exide’s competitor Johnson
Controls, Inc. was valued by Brand Finance at $5.1 billion in 2014.34
However, Johnson Controls’
trademarks and trade names and patented technology had carrying values of $532 million and $32 million
as reported in Johnson Controls’ SEC 10-Q report filed on June 30, 2014.35
Clearly these two examples confirm that brand identity is distinct from intangible assets.
We scrutinized Forbes’ list of 100 brands to ascertain the relationship between the brand value and the
revenues generated by the branded company. We discovered that, among all 100 companies, the mean ratio
of brand revenues-to-brand value was 4.78×; and among the 13 automotive brands reported in this list, the
mean was 7.07×. If either of these had been applied to Exide’s fiscal year 2014 revenues of approximately
$2.9 billion, then its brand identity would be worth $607 million or $410 million. Both figures are
staggering and denote value in addition to Exide’s earnings power, NOLs and IP portfolio.
However, we find this mean ratio to be unreliable for four reasons.
First, regardless of the fact that all 100 companies in Forbes’ list are market leaders in their own areas of
expertise, much like Exide and Johnson Controls are in the battery industry, not a single one was in Electric
Power, Electrical Components & Equipment, or Auto, Truck & Motorcycle Parts. Even the 13 automotive
brands referred to auto manufacturers. Comparability becomes an issue and thus limits the usefulness of the
average ratio.
Second, when plotted into a histogram, the brand revenue-to-brand value ratios of the 100 companies on
the list depict an extremely positive skewed distribution, with 86% of the data falling between ratios of 0.32
and 8.36. Other descriptive statistics of the distribution are a 1.77× median ratio, a standard deviation of
8.33×, a skew level of 4.75, and excess kurtosis of 26.61.
32
Jean-Noël Kapferer, The New Strategic Brand Management: Creating and Sustaining Brand Equity Long-Term
(2008), 4th
ed., 10 – 12.
33
http://www.forbes.com/powerful-brands/list/
34
http://brandirectory.com/profile/johnson-controls
35
See Johnson Controls, Inc. Form 10-Q (filed August 1, 2014) via Edgar Online, p. 16.
Page 17 of 22

The highly positive skew indicates most values are concentrated to the left of the average, with the outliers
to the right. The extreme leptokurtic nature (positive excess kurtosis) of the distribution can be statistically
interpreted to mean high probabilities for extreme values. These characteristics make the average ratio
unreliable.
Third, revenues attributable to the brand are not necessarily what the Company records as revenues. Coca-
Cola, for example, was reported on the Forbes’ list of 100 brands to have a brand value worth $23.8 billion,
yet its consolidated revenues, based on Coca-Cola’s FY2013 10-K, was reported at $46.9 billion.36
Exide
owns 243 trademarks worldwide, according to its SEC 10-K filing for fiscal year 2014.37
Its public filings
do not break down sales revenues according to each individual trademark, making it difficult to determine
how much of the Company’s brand identity comes from the “Exide” name.
Fourth, in Brand Finance’s Global 500 brands for 201438
, one of Exide’s competitors, Johnson Controls,
made the list. Its brand was valued at $5.1 billion for 2014.39
Given Johnson Controls’ FY2014 revenues of
$42.83 billion40
, this equates to an 8.33× ratio of revenue-to-value. However, Johnson Controls also
controls a larger market share of the LAB industry than does Exide and it is also involved in other
businesses (such as ventilation and interior electronics for automotive applications). Consequently, making
adjustments for Exide’s market share or its dependence on the LAB industry becomes very difficult as a
result.
While we think Exide has a brand identity that can be valued at $142 million (a ratio of 20.41×) or higher,
we are not certain about our estimates for the four reasons stated above. In addition, we do not consider
ourselves experts in brand valuation. Consequently, we did not include this figure in our total enterprise
value.
d. Strategic Expansion into Lithium-Ion
Since filing for Chapter 11 in June 2013, Exide has made substantial progress in improving its operations.
The new chief executives have also prepared a comprehensive five-year business plan aimed at turning
36
See The Coca-Cola Company, Inc. Form 10-K (filed February 27, 2014) via Edgar Online, p. 74.
37
38
http://brandirectory.com/league_tables/table/global-500-2014
39
http://brandirectory.com/profile/johnson-controls
40
See Johnson Controls, Inc. Form 10-K (filed November 21, 2013) via Edgar Online, p. 54.
Page 18 of 22

Exide around. In both the annual report for FY2014 and the most recent quarterly report released on the 7th
of November 2014, it was stated that one of the key elements in its business plans and continued strategies
is the continued research and development and engineering investments designed to develop enhanced
lead-acid products as well as products utilizing alternative chemistries, particularly Lithium-Ion for Motor
Power applications in Europe.
Our research sources for the Lithium-Ion battery market indicate it is a fast-growing area of the global
battery industry. In one example, a presentation made by a leading research firm during the 2012
International Energy & Power Supply Conference and Exhibition projected the Lithium-Ion battery market
to exceed 10 billion cells by 2024, over 2.5× the estimated sales volume of 4 billion cells in 2011, without
including automotive applications.41
The same study recognized that electric vehicles alone were
recognized to have an enormous impact in the Li-ion market.42
At the time, hybrid vehicles, plug-in
hybrids, and pure electric vehicles required 1 kWh, 10 kWh, and 25 kWh per unit43
and the Li-Ion batteries
exceeded retail prices of $600/kWh on average.44
Exide has been a “pure-play” on LABs and to our knowledge has not directed investments into the Li-ion
market. Because including any potential business results in Exide’s potential entry into automotive Li-ion
batteries is tantamount to guesswork at this point, we did not include it in our DCF valuation.
e. Potential payout from Lead Price Fixing Investigation
Exide has pending investigations into a potential lead-price fixing scheme that could have significantly
increased the prices it has and continues to pay for lead.45
The incremental value that can be probably gleamed from this endeavor is unknown and we think it is
speculative to even try. Consequently, we did not include this in our DCF valuation.
f. Valuation estimates of non-debtor entities
In Exide’s Notice of Filing of Periodic Report of Debtor Pursuant to Bankruptcy Rule 2015.3 for the
Period Ending June 30, 201446
, Exide’s estate reported multiple legal entities in which it holds substantial
or controlling interests. These are non-debtor, privately-held entities that are inactive, non-operating, or
intended for holding or distribution. In this filing, Exide represents a total net book value of $955.54
million.47
Legal Entity
Interest of
Estate
Operating Description
Net Book Value (USD thousands)
as of June 30, 2014
Exide Manx Limited 100% Holds interest in Exide Al Dobowi ---
Exide Technologies Do Brasil Ltda 100% Distribution entity 721
Exide de Mexico, S. de C.V 99.97% Distribution entity 261
RBD Liquidation LLC 100%
Inactive entity with no operations or
financial results
---
Dixie Metals Co. 100% Closed entity (703)
Exide Delaware, LLC 100% Non-operating entity (32,382)
Exide Illinois, Inc. 100% Non-operating entity ---
Refined Metals Corporation 100% Closed entity (8,831)
41
Christopher Pillot, “The worldwide battery market 2011-2025”, Avicenne Energy (October 24-26, 2012), 23.
42
See Id, 30.
43
See Id.
44
See Id, 28.
45
Tiffany Kary and Steven Church, “Exide Creditors Cite Aluminum in Bid for Lead-Price Probe”, Bloomberg, 28
Jan 2014, available at http://www.bloomberg.com/news/2014-01-28/exide-creditors-cite-aluminum-in-bid-for-lead-
price-probe.html.
46
See D.I. 2219.
47
See Id at 6.
Page 19 of 22

Exide Technologies (Shanghai) Company
Limited
100% Distribution entity 12,757
GNB Battery Tech Japan Inc, Tokyo
Branch
100% Closed entity (1,006)
Exide International Inc. 100% Holding company, non-operating entity 740
Exide Global Holding Netherlands C.V. 100% Holding company, non-operating entity 983,979
Total Book Value 955,536
We think this could build value in Exide Technologies, but we did not include it in the total in order to
highlight the incredibly large amount and corroborate intrinsic value independent of this item.
Original DCF Models
In the following pages we summarize the original DCF models used to assess the Enterprise Value of the Company.
As we wrote earlier, we present both the model we initially submitted and the model containing revisions for
CAPEX and D&A. In the latter, the restructuring items noted by the Company were combined with capital
expenditures as these costs represent material investments into the Company’s operational and organizational
infrastructure, and at this point the purpose of both CAPEX and Restructuring are aligned together towards
extensive business development.
Once again, in our original model, the expenses between sales and operating income are not itemized due to the way
the Company reported business segment data in its SEC filings. Segment gross profits ceased reporting in the fiscal
years and quarters after FY 2011 and segment depreciation was not consistent on a quarterly basis until Q1 FY
2013. Both quarterly and annual figures were used to estimate a starting point for segment profitability to begin a
gradual climb up to levels comparable to the Company’s good years as management pursues the strategic initiatives
outlined in the SEC filings as well as D.I. 2361.
Interest expenses were also not itemized due to uncertainties in possible changes to the Company’s capital structure
after FY2018. Moreover, this decision was further justified by the implication of using the Company’s interest
expense projections, which would have suggested the creditors would allow the debt restructuring outlined in D.I.
2361 without any negative consequences to the existing equity holders.
The table below compares all three models’ results:
Extrapolated Model
Original Model
(As Submitted)
Original Model
(As Revised)
Unadjusted Net Present Value $1,351.56 million $1,441.44 million $1,406.86 million
Adjustments for incremental sources of value:
60% of PV of Net Operating Loss Carryforwards $325.55 million $325.55 million $325.55 million
Reported net book value of trademarks, trade names, and technology $72.75 million $72.75 million $72.75 million
Adjusted Net Present Value (Enterprise Value) $1,749.86 million $1,839.74 million $1,805.16 million
PV of Terminal Value as a % of Adjusted Net Present Value 82.77% 61.41% 57.20%
The tables in the next two pages depict the original model as submitted and as revised.
Page 20 of 22

DCF VALUATION: ORIGINAL – AS SUBMITTED
FY2023 and Beyond
(Terminal Period)
Global LAB Sales 42,426.42 44,276.53 46,132.37 47,994.31 49,863.17 51,740.07 53,626.31 55,523.31 1,236,869,39
Exide’s Market Share 6.75% 6.56% 6.37% 6.18% 6.00% 5.82% 6.43% 7.04% 7.65%
Exide Gross Sales 2,865.90 2,903.29 2,936.40 2,965.46 2,990.72 3,012.42 3,449.78 3,910.94 94,676.89
Sales Returns and Allowances (41.96) (42.50) (42.99) (43.42) (43.78) (44.10) (50.51) (57.26) (1,386.09)
Net Sales 2,823.94 2,860.79 2,893.41 2,922.05 2,946.93 2,968.32 3,399.27 3,853.68 93,290.80
Allocated to…
North America 1,168.40 1,183.64 1,197.14 1,208.99 1,219.29 1,228.13 1,406.44 1,594.45 38,598.84
Operating Margins (%)
North America (2.00%) 1.56% 4.22% 6.00% 6.89% 6.89% 6.89% 6.89% 6.89%
Europe / Rest of the World 2.00% 2.59% 3.03% 3.33% 3.48% 3.48% 3.48% 3.48% 3.48%
Operating Income (Loss)
North America (23.37) 18.42 50.57 72.56 84.02 84.63 96.92 109.88 2,654.34
Consolidated Operating Income (Loss) 9.74 61.87 102.01 129.58 144.07 145.12 166.19 188.40 4,551.39
Consolidated Operating Margins as Implied 0.35% 2.16% 3.53% 4.43% 4.89% 4.89% 4.89% 4.89% 4.89%
Restructuring and Reorganization Items
As % of Sales 3.50%
Projected value (86.13)
Earnings before Interest and Taxes (76.39) 61.87 102.01 129.58 144.07 145.12 166.19 188.40 4,551.39
Income Taxes 26.74 (21.65) (35.71) (45.35) (50.43) (50.79) (58.17) (65.94) (1,592.99)
Net Operating Profits after Taxes (49.65) 40.21 66.31 84.23 93.65 94.33 108.02 122.46 2,958.40
Add back: D&A expense 96.70 97.97 99.08 100.06 100.92 101.65 116.41 131.97 2,602.55
Less: Capital Expenditures (120.00) (95.97) (88.98) (84.41) (82.38) (82.98) (95.03) (107.73) (2,602.55)
Free Cash Flows (72.95) 42.21 76.42 99.88 112.18 113.00 129.40 146.70 2,958.40
Present Value of Free Cash Flows (64.68) 33.18 53.26 61.72 61.47 54.89 55.74 56.02 1,129.83
† The implied forward 8Y CAGR of the Global Battery industry is 5.66%, ¼ less than the growth rate projected by the Freedonia Group (“Freedonia”). The terminal growth rate of the Global Battery industry is 8.04%, a
value 10% less than the 20-year compounded growth rate from $35.4 billion in 2002 to Freedonia’s 2022 estimate of $196 billion. Exide’s sales figures for the terminal period (2023 and Beyond) are computed by estimating
the present value of sales at the industry level at FY2022 using the terminal growth rates and then applying the market shares of the LAB market (relative to global batteries) and the Company (relative to the LAB market).
Other Profit Metrics
Earnings Before Interest, Taxes, Depreciation,
Amortization, Restructuring, and
Reorganization
$106.45 $159.83 $201.10 $229.64 $244.99 $246.77 $282.60 $320.37 $7,153.94
and Amortization
$20.32 $159.83 $201.10 $229.64 $244.99 $246.77 $282.60 $320.37 $7,153.94
Page 21 of 22

DCF VALUATION: ORIGINAL – AS REVISED
FY2023 and Beyond
(Terminal Period)
Global LAB Sales 42,426.42 44,276.53 46,132.37 47,994.31 49,863.17 51,740.07 53,626.31 55,523.31 1,236,869,39
Exide’s Market Share 6.75% 6.56% 6.37% 6.18% 6.00% 5.82% 6.43% 7.04% 7.65%
Exide Gross Sales 2,865.90 2,903.29 2,936.40 2,965.46 2,990.72 3,012.42 3,449.78 3,910.94 94,676.89
Sales Returns and Allowances (41.96) (42.50) (42.99) (43.42) (43.78) (44.10) (50.51) (57.26) (1,386.09)
Net Sales 2,823.94 2,860.79 2,893.41 2,922.05 2,946.93 2,968.32 3,399.27 3,853.68 93,290.80
Allocated to…
North America 1,168.40 1,183.64 1,197.14 1,208.99 1,219.29 1,228.13 1,406.44 1,594.45 38,598.84
Operating Margins (%)
North America (2.00%) 1.56% 4.22% 6.00% 6.89% 6.89% 6.89% 6.89% 6.89%
Europe / Rest of the World 2.00% 2.59% 3.03% 3.33% 3.48% 3.48% 3.48% 3.48% 3.48%
Operating Income (Loss)
North America (23.37) 18.42 50.57 72.56 84.02 84.63 96.92 109.88 2,654.34
Consolidated Operating Income (Loss) 9.74 61.87 102.01 129.58 144.07 145.12 166.19 188.40 4,551.39
Consolidated Operating Margins as Implied 0.35% 2.16% 3.53% 4.43% 4.89% 4.89% 4.89% 4.89% 4.89%
Earnings before Interest and Taxes 9.74 61.87 102.01 129.58 144.07 145.12 166.19 188.40 4,551.39
Income Taxes (3.41) (21.65) (35.71) (45.35) (50.43) (50.79) (58.17) (65.94) (1,592.99)
Net Operating Profits after Taxes 6.33 40.21 66.31 84.23 93.65 94.33 108.02 122.46 2,958.40
Add back: D&A expense 107.53 112.69 105.78 99.74 100.37 111.71 116.35 120.98 1,881.60
Add: Decrease (Increase) in Net Working
Capital
64.25 57.37 27.15 (21.59) (48.54) (12.41) (10.38) (10.34) (254.56)
Less: Capital Expenditures (123.07) (179.43) (122.17) (120.12) (70.20) (70.58) (73.51) (76.44) (1,881.60)
Free Cash Flows 55.04 30.84 77.08 42.26 75.28 123.04 140.48 156.66 2,703.84
Present Value of Free Cash Flows 48.80 24.25 53.72 26.12 41.25 59.77 60.51 59.83 1,032.61
† The implied forward 8Y CAGR of the Global Battery industry is 5.66%, ¼ less than the growth rate projected by the Freedonia Group (“Freedonia”). The terminal growth rate of the Global Battery industry is 8.04%, a
value 10% less than the 20-year compounded growth rate from $35.4 billion in 2002 to Freedonia’s 2022 estimate of $196 billion. Exide’s sales figures for the terminal period (2023 and Beyond) are computed by estimating
the present value of sales at the industry level at FY2022 using the terminal growth rates and then applying the market shares of the LAB market (relative to global batteries) and the Company (relative to the LAB market).
Other Profit Metrics
and Amortization
$117.27 $174.56 $207.80 $229.32 $244.44 $256.83 $282.54 $309.39 $6,432.99
Page 22 of 22

Exide Tech supplemental valuation (2 Dec 2014)

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