Room 1802, 18/F, 1 Duddell Street, Central, Hong Kong

Tel: (852) 2521 2543 Fax: (852) 2869 4800 E-mail: info@hksfa.org URL: http://www.hksfa.org A MEMBER SOCIETY OF CFA INSTITUTE

The Hong Kong Society of Financial Analysts

Presents Workshops On

Advanced Financial Analysis Series

- Advanced Financial Modeling – Core Model - M&A Deal Structuring & Merger Modeling Techniques - Capital Structure, Leveraged Valuation & LBO Modeling

11th, 12th, 13th March 2015

HKSFA Office,

Room 1802, 18th Floor, 1 Duddell Street, Central, Hong Kong

HKSFA is recognized by The Securities and Futures Commission (SFC) as an institution for providing Continuous Professional Training (CPT) Program. Each full-day workshop is also qualified for 6.5 hours. As the recognized institution approved under the SFC’s CPT Program, each full-day workshop is qualified for 6.5 CPT hours respectively of each workshop are to receive due recognition from the Mandatory Provident Fund Scheme Authority (MPFA) as non-core CPD hours. Each full-day workshop is also qualified for 6.5 Continuing Professional Development (CPD) hours respectively for Registered Business Valuers (RBV) of Business Valuation Forum (BVF).

As a participant in the CFA Institute Approved-Provider of Continuing Education Program, the Hong Kong Society has determined that the above event qualifies for credit for the CFA Institute Continuing Education Program. Eligible for 6.5 CE credit hours.

Advanced Financial Analysis Series

HKSFA is proud to present our “Advanced Financial Analysis Series" held in conjunction with Wall St. Training. This series of workshops builds upon and expands our prior successful and popular Financial Analysis Series and will provide practical, Excel-based career-enhancing programs related to financial modeling, projection modeling, fundamental analysis, mergers & acquisitions and leveraged buyouts. This series of hands-on workshops will consist of the following full-day, extended programs:

- Integrated Financial Modeling – Core Model - M&A Deal Structuring & Merger Modeling Techniques - Capital Structure, Leveraged Valuation & LBO Modeling

The goal of these programs is to improve and elevate the skills sets of the financial analyst and the investment professional. Heavy emphasis is placed on being as effective and efficient as possible with Excel.

Wall St. Training (www.wallst-training.com) provides professional financial training solutions to Wall Street through hands-on classroom training and customized corporate training programs for financial analysis which take a hands-on, interactive, practical, non-theoretical approach. The instructor has trained numerous major financial services firms including Bank of America/Merrill Lynch, Credit Suisse, Citigroup, Deutsche Bank, FactSet, Fidelity, GE CFS & PE, Goldman Sachs, JPMorgan, Morgan Stanley and many others.

About the Instructor: Mr. Hamilton Lin, CFA

Hamilton Lin, CFA, is President of Wall St. Training (www.wallst-training.com), a corporate training firm that teaches the fundamentals of financial analysis, modeling and valuation. Clients include prestigious firms including some of the largest investment banks, many boutique investment banks, buy-side asset managers, research firms and commercial banks, such as Bank of America / Merrill Lynch Capital Group, CIT Group, Citigroup, Credit Suisse, Deutsche Bank, Dow Jones, FactSet, Fidelity, GE CFS & Private Equity, Greenhill, Goldman Sachs, JPMorganChase, Morgan Stanley, TD Securities, TIAA-CREF, World Bank (IFC) and many others. Hamilton has a broad background in investment banking and mergers & acquisitions in diverse industries ranging from oil & gas to insurance to asset management and related sectors. He has worked on over six dozen deals and closed over three dozen deals, ranging from plain vanilla deals, to squeeze-outs, LBOs and distressed situations ranging in deal value from $10 million to over $6 billion.

Prior to founding his firm, he worked at: Goldman Sachs Investment Banking, where he standardized his group's best practices; Banc of America's M&A department, where he customized many of the firm's models; various boutique middle-market investment banks, executing private transactions; and Ryan Labs, an asset-liability asset management firm. Hamilton teaches globally, from all major cities in the USA including NYC, San Francisco, Chicago, to Asia including Hong Kong, Singapore, Shanghai to Europe including London and most major financial hubs.

Hamilton has taught as an adjunct professor at Baruch College and Hunter College in New York City. He graduated from NYU Stern in Finance and International Business, is a Chartered Financial Analyst and has taught all levels and all study sessions of the CFA exam. He also teaches all of the financial modeling and valuation courses (dozens of classes a year) at the following CFA Institute member societies:

- New York Society of Securities Analysts - Chicago CFA Society - San Francisco CFA Society - Boston Security Analysts Society - The Hong Kong Society of Financial Analysts - Singapore CFA Society - CFA-China: Shanghai & Beijing - Toronto CFA Society - Stamford CFA Society

Highlights of the Workshops:

INTEGRATED FINANCIAL MODELING – CORE MODEL

11th March 2015, Wednesday 9:00am – 5:00pm

Build a fully integrated financial statement projection model with income statement projections, a self-balancing balance sheet, an automated cash flow statement, and the balancing cash flow sweep/debt schedule. While knowledge of advanced accounting concepts is not required for this course, you should possess knowledge of basic accounting ratios and a basic understanding of how the major financial statements are inter-related. Emphasis is placed on the integration of the major financial statements and becoming experts in Excel. Incorporate different methodologies to forecasting the different types of assets on the balance sheet and compare and contrast with projecting liabilities. Learn how to balance a model utilizing the debt sweep and the revolver and not using any “plugs”. Appreciate the danger of and properly control for circular references. Avoid messy nested “if” statements!! You will leave the classroom with a fully constructed model that can be customized and applied to other companies. The final model is a fully scalable model that can be added upon. Learning Objectives:

• Build an integrated set of financials, including IS, BS & CF statements • Learn how to balance a model utilizing debt sweep and no “plugs” • Become super-efficient in Excel through intensive use of keyboard shortcuts • Intensive focus on correct financial modeling approaches & best practices

Learning Goals: 5-Year Financial Statement Projection Model:

• How do you project an IS from revenues and expenses down to Net Income? • What are the different methodologies to forecasting the different types of assets on the balance sheet and

how do they compare and contrast with projecting liabilities? • How do you project the shareholders’ equity account? • What is the importance of financial ratios in building the balance sheet projections? • How do you approach building an integrated cash flow statement? • How do you build each component of the cash flow statement and why is cash the last item to project?

Integration and Balancing of Financial Model:

• Balance the model using the debt schedule and debt sweep logic – the most important analysis in terms of balancing the model!!

• How does the cash actually flow through the model? • Incorporate automatic debt payments and use cash generated to either pay down debt or build cash • How does the revolver facility actually balance the model? • Avoid messy nested “if” statements!! • How does the BS and financial statements balance without the use of “plugs”? • How are the financial statements integrated using the Interest schedule? • What are circular references, why should they be avoided and how to get around circular references

Prerequisite: Intermediate proficiency using Excel and a solid grasp of basic accounting fundamentals is required. This Financial Modeling class is a fast-paced, hands-on, technical workshop.

Rating* - Intermediate (Material presented will have technical elements requiring a working knowledge of the subject to make full use of the presentation.)

Rating* - Advanced (Highly focused technical presentations of interest to participants with a high level of technical knowledge in the subject area.)

M&A DEAL STRUCTURING & MERGER MODELING TECHNIQUES 12th March 2015, Thursday 9:00am – 5:00pm

Learn about mergers and acquisitions and how deals are structured. The first half of this course focuses on the mergers and acquisitions process and the basics of deal structures, presenting the main tools and analyses that M&A investment bankers and acquirers utilize. It covers the following modules: (i) in-depth analysis of the entire M&A process, including due diligence and legal issues; (ii) common structural issues including cash vs. stock, upfront payments vs. earn-outs, and stock vs. asset deals; (iii) crucial merger consequence analysis including detailed accretion/dilution and contribution analyses; and (iv) detailed analysis of transaction case studies to illustrate various deal structures and demonstrate detailed alternative earn-out structures and methodologies. The second half of this course builds on the first half and is hands-on, interactive, Excel-based and covers different ways to model out financial combinations. Different techniques are covered including the most basic and widely used back-of-the-envelope method, accretion / dilution and more robust analyses. Build dynamic models that account for different transaction structures, learn how to sensitize financial projections and the financial impact on a transaction and construct a pro forma merger model. Calculate estimated combined income statement for target and acquiror, key pro forma balance sheet items, cash flow for debt repayments and other relevant items in a merger and acquisition context. Learning Goals: M&A Deal Structuring:

• Review of various deal considerations and deal structuring options (cash vs. stock) • Common structural issues in a transaction (stock vs. asset) • Buyer and seller preferences for various deal structures and rationale • Tax implications of transactions based on deal structure and IFRS #3 goodwill amortization • Merger consequence analysis including accretion / dilution and financial implications of a deal • Analysis of breakeven PE for both 100% stock and 100% cash considerations

Accretion / Dilution Modeling:

• Build dynamic merger consequence analysis (accretion / dilution) incorporating the following: • Synergies switch, cash vs. stock sensitivity • Amortization of goodwill switch (depending on purchase price allocation) • Common structural issues: Stock vs asset deals • Tax implications of transactions based on deal structure and IFRS #3 goodwill amortization • Analysis of breakeven PE for both 100% stock and 100% cash considerations • Calculate pre-tax and after-tax synergies / cushion required to breakeven

Simple Merger Modeling:

• Construct a merger model, simple combination of Income Statement for target and acquiror • Project simple stand-alone Income Statement for both target and acquiror • Analyze selected balance sheet figures and ratios and multiples • Estimate target valuation and deal structure • Calculate selected Pro Forma balance sheet items • Combine target and acquiror’s Income Statement and estimated synergies • Calculate cash flow for debt repayments to estimate debt repayments and cash balances • Compute interest expense and interest income based on paydowns • Calculate accretion / dilution and credit ratios

Prerequisite: This course focuses specifically on structuring M&A transactions. To obtain the desired financial background and valuation concepts, WST’s ”Corporate Valuation Methodologies” class is highly recommended as a precursor. Intermediate proficiency using Excel and a solid grasp of basic accounting fundamentals is required. The “Integrated Financial Modeling – Core Model” class is recommended, but not required.

This course focuses on how to effectively and efficiently utilize Microsoft Excel for data

CAPITAL STRUCTURE, LEVERAGED VALUATION & LBO MODELING

13th March 2015, Friday 9:00am – 5:00pm

In the normal course of running a company, the CFO must balance capital requirements with capital sources of funds. Changes to the capital structure are not insignificant as each component of capital has an opportunity cost. In this course, we introduce the impact of changes in capital structure and the resulting impact on a company's decision to borrow vs. raise equity. We quantify the thought process and the logic that dictates one or the other by examining both extremes of capital structure changes: from a simple small share repurchase to the opposite spectrum, the leveraged buyout. This class examines and incorporates all the major inputs and value drivers of capital structure changes by building an intermediate level LBO analysis, providing an excellent overview and introduction to the finer points and nuances of LBO modeling. This course also builds upon our Quick & Dirty LBO modeling course concepts and basic model by: expanding upon the different components of the Sources & Uses analysis; projecting selected critical Balance Sheet items; constructing more detailed Cash Flow Statement estimates and robust Debt Sweep, as well as triangulating IRRs for dividends to equity sponsor.

Learning Objectives:

• Discussion on leveraged buyouts, including overview, rationale, ideal candidate and drivers of value • Construct and sensitize an intermediate level leveraged buyout model • Incorporate fundamental drivers including Sources & Uses, Pro Forma, post-LBO projections, available

cash flow, debt sweep, credit ratios and IRR • Sources of Funds: inclusion of rollover equity, detailed debt structure and maximizing debt capacity • Uses of Funds expansion: ability to toggle refinancing of existing debt, excess cash usage, proper treatment

of debt financing fees, tender costs and transaction costs • Selected Pro Forma Balance Sheet items, Debt and Shareholder Equity accounts • Debt Sweep: incorporate Term Loan mandatory amortization and integrating and sweeping additional

new and existing debt tranches

Learning Goals:

• Drivers of value from a financial point of view and changes in capital structure: • Comparison to share repurchases and the lack of value creation • Counter argument of cost of capital, funding costs and opportunity costs arbitrage • Counter-counter argument of weighted average cost of capital changes • Final assessment of source of returns of LBOs • We first introduce the obvious rationales, then prove why that is wrong, then disproof the proof and

disprove that and disprove that and finally agree on how corporate finance and the capital markets extract value from capital structure arbitrage

• In short, participants might be thoroughly confused at first, but will finally understand every aspect of the value proposition by the time we are done!

Create Leveraged Buyout (LBO) model to quantify:

• Sources of Funds: inclusion of rollover equity, detailed debt structure & maximizing debt capacity • Uses of Funds: ability to toggle refinancing of existing debt, excess cash usage, proper treatment of debt

financing fees, tender costs and transaction costs • Construct a Pro Forma, post-LBO Income Statement projection model incorporating LBO changes • Constructed simulated Cash Flow Statement, including CFO, CFI and CFF • Expanded Debt Sweep schedule to flow through various debt items • Incorporate Term Loan mandatory amortization and dynamic pre-payment • Integrate and sweep through additional new and existing debt tranches • Create condensed IRR (internal rate of return) analysis to evaluate financial sponsor returns • Comparison of IRR to multiple of capital as a return metric and benchmark • Identify true source of returns, from building of equity to time value of money • Compare and contrast returns trends based on exit multiple contraction or expansion • Discussion on why highly levered transactions must exit within 3 to 5 years

Prerequisite: Intermediate proficiency using Excel and a solid grasp of basic accounting fundamentals are required. The "Integrated Financial Modeling - Core Model" class is recommended, but not required.

Rating* - Advanced (Highly focused technical presentations of interest to participants with a high level of technical knowledge in the subject area.)

Details of workshops:

Date & Time: Name of Workshops

9:00am - 5:00pm Wed, 11th March 2015

Integrated Financial Modeling – Core Model

9:00am - 5:00pm Thurs, 12th March 2015

M&A Deal Structuring & Merger Modeling Techniques

9:00am - 5:00pm Fri, 13th March 2015

Capital Structure, Leveraged Valuation & LBO Modeling

Venue: HKSFA Office, Room 1802, 18th Floor, 1 Duddell Street, Central, Hong Kong (Classrooms are not equipped with computers, participants WILL HAVE to bring their own laptops. Please bring Excel for PC installed (any version). Macs will not be as effective as shortcut keys are different. Please make sure your laptop has a working USB port to copy files at the beginning of class.)

Fee: HKSFA Member(s) at HK$2,200 (full day) /person per workshop Guest (s) and Non-member(s) at HK$3,500 (full day) /person per workshop (The fee includes course materials.)

Special Discount: 10% off for those who register for two (or more) workshops.

Registration : 1. Interested parties are requested to register online at http://www.hksfa.org. 2. Registration is only confirmed upon receipt of payment. 3. For cheque payment, cheques should be crossed and made payable to “HKSFA” and posted to Room 1802, 18th Floor, 1 Duddell Street,

Central, Hong Kong. 4. A place will be reserved for registrant upon successful online registration with email notification of registration details.

5. After completing the online registration and payment process, registrants will receive email notifications with registration details. A reminder will also be sent before the event begins. If you have not received the email notification and reminder from HKSFA, it is the delegate’s responsibility to contact HKSFA to confirm their place.

Policy for Substitutions, Cancellations and No Show:

1. Registrations should be paid in full before the commencement of the event. Immediate payment is required upon email confirmation.

Should the registration fee remains outstanding, HKSFA reserves the right to disallow entrance to the event.

2. Full amount will still be charged for no show or enrolment made after Wednesday, 4th March 2015, this would include those whose payment

mode is “by cheque” but have not sent in the cheque to complete the payment process.

3. An administration fee HK$50 will be charged for any cancellation of confirmed enrollment made on or before Wednesday, 4th March 2015.

All cancellation requests must be made in writing and be confirmed by email from HKSFA.

4. Refund of the event fee (less an administration fee of HK$50 per person) will be given for cancellation received on/before Wednesday, 4th

March 2015.

- For payment made by credit card, refund will be handled through the bank, please allow 4 to 6 weeks for processing. The amount will

be refunded to the paid credit card account.

- For registrants whose payment mode is “by cheque”, even if the cheque has not been sent to HKSFA in full amount, the HK$50

administration fee is also applicable and must be settled by registrants.

- For payment made by cash, HKSFA will arrange the refund cheque sending to registrants by mail, the amount will be the event fee less

the administration fee HK$50.

5. No refund will be given for cancellation received after Wednesday, 4th March 2015. For registrant whose payment mode is “by cheque” but

have not sent in the cheque to complete the payment process, will still have to settle the event fee in full amount.

6. Substitutions are allowed. Please notify us prior to the event. Non-member rate applies if the substitute is not an HKSFA member.

7. The Society reserves the right to change the venue, date or speaker of the event due to unforeseen circumstances.

8. To be awarded CPT/CPD/CE credit hours, full attendance of all parts of the event is required. No pro-rata credit hours will be awarded.

* Special notes

1. General - Material presented will be basic and of interest to a general audience having no background in the area. 2. Intermediate - Material presented will have technical elements requiring a working knowledge of the subject to make full

use of the presentation. 3. Advanced - Highly focused technical presentations of interest to participants with a high level of technical knowledge in

the subject area. 4. Unrated - HKSFA has yet to receive sufficient information to grade the content of this event.