EX-99.A5C 2 tm2010783d6_ex99a5c.htm EXHIBIT (A)(5)(C)

Exhibit (a)(5)(C)

 

Project Jet PRELIMINARY DISCUSSION MATERIALS FOR THE SPECIAL COMMITTEE FEBRUARY 15, 2020 PRELIMINARY AND CONFIDENTIAL | SUBJECT TO FURTHER REVIEW AND REV ISION

 
 

Preliminary and Confidential | Subject to Further Review and Revision Table of Contents 2 Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 Jiedian Preliminary Financial Analysis 10 Other Businesses Preliminary Liquidation Analysis 14 3. Appendices 19 Selected Public Market Observations 20 Glossary 27 4. Disclaimer 29

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 3. Appendices 19 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision (dollars, RMB and ADS in millions, except per ADS values) Source: Public filings, Capital IQ, Company management. Note: Jumei International Holding Limited is referred to herein as the “Company” or “Jumei”. 1. Represents the net dilutive impact of an equivalent of ~0.1 million ADS options outstanding based on the treasury method and an equivalent of ~0.0 million ADS RSUs outstanding, per Company management. Per public filings and Company management, one ADS is equivalent to ten Class A ordinary shares . 2. Per Capital IQ . 3. Per Company management in RMB as of 12/31/2019. 4. Represents cash received but not yet withdrawn from third - party payment platforms as of 12/31/2019, per Company management. 5. Represent net book value of long – term investments as of 12/31/2019. 6. Represents balance of refundable customer deposits collected by Jiedian as of 12/31/2019. Company management has indicated th at the Company has not reserved any portion of its cash or short - term investments against this balance. 7. All closing ADS prices have been adjusted to reflect the impact of the reverse stock split that became effective on January 1 0, 2020, per Capital IQ. Preliminary Implied Premiums to Historical Unaffected ADS Trading Prices Preliminary Summary of Proposal Value Executive Summary Preliminary Proposal Overview (dollars per ADS in actuals) 4 Preliminary Implied Premium of Per ADS Proposal Unaffected Average Closing / Consideration over Trading Period Closing Average Closing / As of 1/10/20 ADS Price [7] Closing ADS Price 1-Day Closing $17.43 14.7% 5-Day Average Closing $18.97 5.5% 10-Day Average Closing $19.54 2.3% 1-Month Average Closing $19.29 3.7% 3-Month Average Closing $19.68 1.6% 6-Month Average Closing $20.38 (1.9%) 1-Year Average Closing $22.33 (10.4%) 52-Week High Closing $27.80 (28.1%) 52-Week Low Closing $17.00 17.6% Preliminary Selected Proposal Information Per ADS Proposal Consideration $20.00 Basic ADSs Outstanding 11.4 Dilutive ADSs [1] 0.1 Fully Diluted Shares Outstanding 11.5 Implied Equity Value (USD) $229.3 USD to RMB Exchange Rate as of 2/12/20 [2] 6.97 Implied Equity Value (RMB) ¥1,598.6 Cash and Cash Equivalents [3] (455.6) Short-Term Investments [3] (814.1) Third-Party Platform Funds Receivable [3][4] (53.0) Long-Term Investments [3][5] (232.1) Customer Deposits [3][6] 819.3 Redeemable Non-Controlling Interests [3] 8.4 Implied Enterprise Value (RMB) ¥871.5 Implied Enterprise Value (USD) $125.0

 
 

Preliminary and Confidential | Subject to Further Review and Revision Executive Summary Company and Industry Considerations Source : Company management, public filings, Analysys. 1. Represents ADS and closing ADS prices adjusted for the reverse stock split in January 10, 2020. 2. Converted to USD with exchange rate as of 2/12/2020. 3. Per Company management’s projections, Jiedian’s Adjusted EBITDA less capital expenditures in CY 2020E is expected to be ~(RMB 30) million. 4. Represents the purchase of Jiedian equity interests from other existing shareholders. 5. Converted to USD using the average RMB to USD exchange rate in each respective month . 5 Jumei □ Since its IPO in 2014 at $220 per ADS 1 , the Company’s ADS price has decreased from its peak closing ADS price of ~$380 per ADS 1 in 2014. The Company has made numerous investments in non - core businesses with mixed results, is delayed in reporting its June 2019 financials and has lost several key management personnel. Jiedian (Power Bank Sharing) □ Jumei’s initial investment in Jiedian was in 2017 and Jumei has since purchased shares from existing shareholders in several tra nsactions, most recently in mid - 2019 at implied equity values of up to $120 million. Jiedian has incurred capital expenditures in excess o f RMB300 million (~$40 million 2 ) over the past two years and is expected to have expenditures in excess of RMB100 million (~$15 million 2 ) over the next several years. Additionally, the Company is not expected to be profitable ( - 4.1% Adjusted EBIT margin in CY 2020E) or cash flow positive 3 in the near term. In 2019 t he Company held discussions with five investment banks and contacted 26 potential investors, per Company management, and was unsuccessful in finding third party financing to support the business or position the business fo r a stand alone listing. Shuabao (Mobile Application) □ Shuabao effectively began operating in the beginning of 2019 and since has gradually been able to grow its user base to ~16.6 mi llion DAU at the end of 2019, mainly through the offering of cash incentives and user acquisition expenditures . During 2019, Shuabao incurred $462 million of expenses to generate $134 million of revenue and is expected to require similar spending in order to maintain its use r base. Company management indicated that it was also unsuccessful in its efforts to raise third party financing, both on a standalone basis and in connection with Jiedian’s financing efforts. E - Commerce (Beauty Products Online Platform) □ The E - Commerce platform launched in 2010 and held a market share of 22.1% in 2013 which has since decreased to 0.1% as of 2019 d ue to, among other reasons, competition from large platforms in China, such as Tmall, JD and Taobao, counterfeit issues starting in 2014 and cross - border e - commerce tax policies enacted in 2016. Given such, Company management plans to wind down its E - Commerce business within two years. Date of Jumei Investment in the Equity of Jiedian % Acquired by Jumei Implied Equity Value of Jiedian 5 May 2017 60.0% $73 million December 2017 4 22.1% $64 million May 2019 4 2.8% $120 million June 2019 4 7.9% $116 million Q1 2019 Q2 2019 Q3 2019 Q4 2019 Revenue (in millions) $0.3 $5.1 $34.7 $94.2 Expense (in millions) $52.3 $132.6 $98.4 $178.7

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 Jiedian Preliminary Financial Analysis 10 Other Businesses Preliminary Liquidation Analysis 14 3. Appendices 19 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision Other Businesses Source: Company management. Preliminary Financial Analyses Approaches Jumei (NYSE: JMEI) Jiedian Selected Companies Analysis on Going Concern Basis Shuabao Liquidation Analysis Jumei.com (E - Commerce) Liquidation Analysis  Due to, among other considerations, the capital intensiveness of certain of Jumei’s businesses, the inability of Jumei to secure third party financing and the recent difficulties facing the E - Commerce segment, the financial projections provided by Company management assume the winding down of Shuabao and the E - Commerce segment by 2022 and 2021, respectively.  Furthermore, Company management has indicated that Shuabao is still in early stages (launched in late 2018) and is currently generating cash outflows of approximately 3x revenue .  As such, given the current conditions of the Company, t he highest and best use of the Company’s assets is likely to cease operations and liquidate Shuabao and the E - Commerce business.  Therefore, a liquidation analysis has been performed on a combined basis for Shuabao and the E - Commerce segment (“Other Businesses”) in which Company management provided (i) a balance sheet for the Other Businesses as of 12/31/2019, (ii) estimates of the recoverability percentage of all of the Other Businesses’ assets and liabilities, and (iii) estimated wind - down costs for the Other Businesses. 7 The distinct businesses of Jumei are analyzed utilizing the approaches detailed below following a review of the company and i ndu stry considerations impacting each business, including, but not limited to, capital intensiveness, lack of available third party f ina ncing and competitive pressure. Selected multiples for Jiedian based on a review of, among other considerations:  Implied trading multiples of public companies deemed similar to Jiedian,  Recent transactions in the equity of Jiedian,  Recent financing efforts as provided by Company management ,  Forecast provided by Company management, and  Other company specific and industry conditions.

 
 

Preliminary and Confidential | Subject to Further Review and Revision Preliminary Jiedian Selected Companies Analysis Other Businesses CY 2019 Jiedian Revenue 0.90x – 1.20x Preliminary Implied Liquidation Value CY 2020E Jiedian Revenue 0.80x – 1.10x Preliminary Implied Liquidation Value Preliminary Financial Analyses Summary Source: Company management, Capital IQ, Bloomberg, public filings. Note : Based on (i) an equivalent of ~11.4 million ADS outstanding, (ii ) the net dilutive impact of an equivalent of ~0.1 million ADS options outstanding based on the treasury method and (iii) an equivalent of ~0.0 million ADS RSUs outstanding, per Company management. Per public filings and Company management, one ADS is equivalent to ten Class A or dinary shares . (dollars per ADS in actuals) 8 Preliminary Implied Per ADS Value Reference Range $13.98 $13.78 $24.84 $24.02 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00 $22.00 $24.00 $26.00 $28.00 $30.00

 
 

Preliminary and Confidential | Subject to Further Review and Revision Preliminary Financial Analyses Summary Preliminary Implied Per ADS Value Reference Range Source: Company management. 1. Represents cash received but not yet withdrawn from third - party payment platforms as of 12/31/2019, per Company management. 2. Represents balance of refundable customer deposits collected by Jiedian as of 12/31/2019. Company management has indicated th at the Company has not reserved any portion of its cash or short - term investments against this balance . 3. Per Capital IQ. 4. Represents Jumei’s current ownership in Jiedian, per Company management . 5. Refer to page 16 for derivation of the Preliminary Other Businesses Implied Liquidation Value Reference Range. 6. Based on (i) an equivalent of ~11.4 million ADS outstanding, (ii) the net dilutive impact of an equivalent of ~0.1 million ADS options outstanding based on the t rea sury method and (iii) an equivalent of ~0.0 million ADS RSUs outstanding, per Company management. Per public filings and Company management, one ADS is equivalent to ten Class A or dinary shares. 9 (dollars and ADS in millions, except per ADS values) Preliminary Jiedian Preliminary Jiedian Selected Companies Selected Companies Analysis Analysis CY 2019 CY 2020E Jiedian Revenue Jiedian Revenue Corresponding Base Amount ¥1,364.2 ¥1,559.7 Selected Multiples Range 0.90x -- 1.20x 0.80x -- 1.10x Preliminary Jiedian Implied Enterprise Value Reference Range ¥1,227.8 -- ¥1,637.1 ¥1,247.7 -- ¥1,715.6 Jiedian Cash and Cash Equivalents as of 12/31/2019 66.4 -- 66.4 66.4 -- 66.4 Jiedian Short-Term Investments 12/31/2019 488.1 -- 488.1 488.1 -- 488.1 Jiedian Third-Party Platform Funds Receivable 12/31/2019 [1] 40.1 -- 40.1 40.1 -- 40.1 Preliminary Jiedian Implied Total Enterprise Value Reference Range ¥1,822.5 -- ¥2,231.7 ¥1,842.4 -- ¥2,310.3 Jiedian Customer Deposits 12/31/2019 [2] (819.3) -- (819.3) (819.3) -- (819.3) Preliminary Jiedian Implied Total Equity Value Reference Range (RMB) ¥1,003.2 -- ¥1,412.5 ¥1,023.1 -- ¥1,491.0 RMB to USD Exchange Rate as of 2/12/2020 [3] 0.14 -- 0.14 0.14 -- 0.14 Preliminary Jiedian Implied Total Equity Value Reference Range (USD) $143.9 -- $202.6 $146.8 -- $213.9 Jumei Ownership % in Jiedian [4] 83.7% -- 83.7% 83.7% -- 83.7% Preliminary Jiedian Implied Proportionate Total Equity Value Reference Range (USD) $120.4 -- $169.5 $122.8 -- $178.9 Jumei Consolidated = Jiedian + Other Businesses Preliminary Jiedian Implied Proportionate Total Equity Value Reference Range (USD) $120.4 -- $169.5 $122.8 -- $178.9 Preliminary Other Businesses Implied Liquidation Value Reference Range (USD) [5] $37.5 -- $106.0 $37.5 -- $106.0 Preliminary Implied Total Equity Value Reference Range (USD) $157.8 -- $275.5 $160.2 -- $284.9 ADSs Outstanding [6] 11.5 -- 11.5 11.5 -- 11.5 Preliminary Implied Per ADS Value Reference Range $13.78 -- $24.02 $13.98 -- $24.84

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 Jiedian Preliminary Financial Analysis 10 Other Businesses Preliminary Liquidation Analysis 14 3. Appendices 19 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision Jiedian Preliminary Financial Analysis Selected Historical and Projected Financial Information Source: Company management. 1. Represents revenue generated by internal business managers who negotiate with merchants and deploy power banks . 2. Represents revenue generated by the Company contracting third parties to negotiate with merchants and deploy power banks . 3. Represents revenue generated by selling power banks directly to users if they do not return those to the power bank cabinets. 4. Represents advertising revenue generated by displaying advertisements on the Company’s power bank cabinets. 11 P rojections do not assume the Company can raise sufficient financing to support Jiedian’s required capital expenditures, increased revenue sharing costs and sales & marketing expenses, that are necessary to compete with other major players in the industry. ( RMB in millions ) CAGR CAGR 2018 2019 2020E 2021E 2022E 2023E 2024E 2019 to 2021E 2019 to 2024E Self-Operated Leasing [1] ¥228.0 ¥619.0 ¥674.8 ¥747.7 ¥878.9 ¥860.6 ¥842.3 Outsourced Leasing [2] 346.7 605.9 742.2 671.4 524.9 512.7 500.5 Power Bank Sales [3] 117.2 139.0 141.7 141.9 140.4 137.3 134.3 Other [4] 5.2 7.6 8.8 10.1 11.6 13.3 15.4 Business Tax and Surcharges 0.0 (7.3) (7.8) (7.9) (7.8) (7.6) (7.5) Revenues, Net ¥697.0 ¥1,364.2 ¥1,559.7 ¥1,563.2 ¥1,548.0 ¥1,516.3 ¥1,484.9 7.0% 1.7% Growth % 95.7% 14.3% 0.2% -1.0% -2.0% -2.1% Cost of Goods Sold (407.2) (947.8) (986.2) (1,051.5) (1,097.2) (1,005.0) (955.4) Gross Profit ¥289.8 ¥416.4 ¥573.5 ¥511.7 ¥450.8 ¥511.4 ¥529.5 Margin % 41.6% 30.5% 36.8% 32.7% 29.1% 33.7% 35.7% General & Administrative Expense (16.7) (19.8) (23.5) (23.6) (23.3) (22.9) (22.4) Stock Based Compensation Expense 0.0 (61.9) (17.5) (11.4) (5.5) (2.5) 0.0 Sales & Marketing Expense (185.3) (357.0) (548.6) (549.9) (544.5) (533.4) (522.3) Product Development Expense (41.2) (44.2) (47.0) (47.1) (46.7) (45.7) (44.8) Depreciation & Amortization 149.5 236.9 178.5 171.6 156.7 84.9 55.8 Adjusted EBITDA ¥196.0 ¥170.4 ¥115.3 ¥51.4 (¥12.5) (¥8.3) (¥4.2) -45.1% NMF Margin % 28.1% 12.5% 7.4% 3.3% -0.8% -0.5% -0.3% Growth % -13.1% -32.3% -55.4% NMF NMF NMF Depreciation & Amortization (149.5) (236.9) (178.5) (171.6) (156.7) (84.9) (55.8) Adjusted EBIT ¥46.5 (¥66.5) (¥63.2) (¥120.2) (¥169.2) (¥93.1) (¥60.0) NMF NMF Margin % 6.7% -4.9% -4.1% -7.7% -10.9% -6.1% -4.0% Additional Financial Information Capital Expenditures (¥305.7) (¥330.9) (¥145.2) (¥130.4) (¥113.2) (¥111.0) (¥107.8) Fiscal Year Ending December 31, Fiscal Year Ended December 31,

 
 

Preliminary and Confidential | Subject to Further Review and Revision Jiedian Preliminary Financial Analysis Preliminary Selected Companies Analysis (dollars in millions, except per share values) Source: Bloomberg, public filings, Capital IQ, Wall Street equity research. Note : No company used in this analysis for comparative purposes is identical to the Company. 1. Enterprise value equals equity market value + debt outstanding + preferred stock + minority interests – cash and cash equivalent s. 2. Based on closing prices as of 2/12/2020 . 3. Based on diluted shares . 4. Multiples based on forward looking financial information may have been calendarized to the Company’s fiscal year end of Decem ber 31 st . 12 Share Equity Market Enterprise Enterprise Value [1] to Revenue Rent-to-Own Companies Country Exchange Price [2] Value [2,3] Value [2,3] LTM CY 2019E [4] CY 2020E [4] Aaron's, Inc. United States NYSE $57.87 $3,960.0 $4,624.6 1.17x # 1.17x # 1.03x FlexShopper, Inc. United States NasdaqCM 3.06 92.5 115.2 1.07x # 1.29x # 1.01x Rent-A-Center, Inc. United States NasdaqGS 28.35 1,627.1 1,804.4 0.68x # 0.68x # 0.66x Low 0.68x 0.68x 0.66x High 1.17x 1.29x 1.03x Median 1.07x 1.17x 1.01x Mean 0.97x 1.05x 0.90x Car Rental Companies AMERCO United States NasdaqGS $343.73 $6,739.8 $10,179.7 2.62x # 2.62x # NA Avis Budget Group, Inc. United States NasdaqGS 40.88 3,021.7 17,481.7 1.93x # 1.92x # 1.87x CAR Inc. China SEHK 0.66 1,421.8 2,930.9 2.79x # 2.37x # 2.11x Europcar Mobility Group S.A. France ENXTPA 4.65 730.3 5,657.2 1.76x # 1.76x # 1.65x Hertz Global Holdings, Inc. United States NYSE 18.74 2,713.8 20,404.8 2.09x # 2.08x # 2.02x Localiza Rent a Car S.A. Brazil BOVESPA 12.77 9,693.9 10,978.1 4.89x # 4.59x # 3.61x Low 1.76x 1.76x 1.65x High 4.89x 4.59x 3.61x Median 2.36x 2.23x 2.02x Mean 2.68x 2.56x 2.26x All Selected Companies Low 0.68x 0.68x 0.66x High 4.89x 4.59x 3.61x Median 1.93x 1.92x 1.76x Mean 2.11x 2.05x 1.75x

 
 

Preliminary and Confidential | Subject to Further Review and Revision Jiedian Preliminary Financial Analysis Selected Benchmarking Information Source: Company management, public filings, Capital IQ, Bloomberg, Wall Street equity research. Note: No company used in this analysis for comparative purposes is identical to the Company . Note: 2019 represents actual performance for Jiedian and AMERCO and expected performance for all other selected companies. 1. Based on public trading prices of common stock. 13 Size Size [1] Leverage Liquidity (LTM Revenue, millions) (Enterprise Value as of 2/12/20, millions) (Debt to LTM Adjusted EBITDA) (Current Ratio as of 2/12/20) Name Value Name Value Name Value Name Value Rent-to-Own Companies Rent-to-Own Companies Rent-to-Own Companies Rent-to-Own Companies Aaron's, Inc. $3,937.2 Aaron's, Inc. $4,624.6 Jiedian 0.0x FlexShopper, Inc. 7.3 Rent-A-Center, Inc. $2,663.7 Rent-A-Center, Inc. $1,804.4 Rent-A-Center, Inc. 0.3x Rent-A-Center, Inc. 2.2 Jiedian $195.7 FlexShopper, Inc. $115.2 Aaron's, Inc. 0.4x Jiedian 0.6 FlexShopper, Inc. $107.6 FlexShopper, Inc. 0.4x Aaron's, Inc. 0.6 Car Rental Companies Car Rental Companies Car Rental Companies Car Rental Companies Hertz Global Holdings, Inc. $9,749.0 Hertz Global Holdings, Inc. $20,404.8 Jiedian 0.0x AMERCO 5.2 Avis Budget Group, Inc. $9,060.0 Avis Budget Group, Inc. $17,481.7 Localiza Rent a Car S.A. 1.0x Hertz Global Holdings, Inc. 1.5 AMERCO $3,882.9 Localiza Rent a Car S.A. $10,978.1 AMERCO 3.8x Europcar Mobility Group S.A. 1.1 Europcar Mobility Group S.A. $3,223.3 AMERCO $10,179.7 CAR Inc. 4.2x Localiza Rent a Car S.A. 1.1 Localiza Rent a Car S.A. $2,246.2 Europcar Mobility Group S.A. $5,657.2 Avis Budget Group, Inc. 4.3x CAR Inc. 1.0 CAR Inc. $1,049.0 CAR Inc. $2,930.9 Europcar Mobility Group S.A. 4.6x Avis Budget Group, Inc. 0.9 Jiedian $195.7 Hertz Global Holdings, Inc. 5.9x Jiedian 0.6 Historical Growth Projected Growth Historical Growth Projected Growth (CY 2018 to CY 2019 Revenue) (CY 2019 to CY 2020E Revenue) (CY 2018 to CY 2019 Adjusted EBIT) (CY 2019 to CY 2020E Adjusted EBIT) Name Value Name Value Name Value Name Value Rent-to-Own Companies Rent-to-Own Companies Rent-to-Own Companies Rent-to-Own Companies Jiedian 95.7% FlexShopper, Inc. 27.4% Rent-A-Center, Inc. 102.2% FlexShopper, Inc. 114.7% FlexShopper, Inc. 5.2% Jiedian 14.3% Aaron's, Inc. 15.4% Aaron's, Inc. 19.3% Aaron's, Inc. 3.2% Aaron's, Inc. 13.5% FlexShopper, Inc. NMF Rent-A-Center, Inc. -5.1% Rent-A-Center, Inc. 0.0% Rent-A-Center, Inc. 2.8% Jiedian NMF Jiedian NMF Car Rental Companies Car Rental Companies Car Rental Companies Car Rental Companies Jiedian 95.7% Localiza Rent a Car S.A. 27.2% Localiza Rent a Car S.A. 20.1% Hertz Global Holdings, Inc. 35.6% CAR Inc. 33.9% Jiedian 14.3% Avis Budget Group, Inc. 13.9% Localiza Rent a Car S.A. 29.3% Localiza Rent a Car S.A. 31.5% CAR Inc. 12.1% Europcar Mobility Group S.A. -14.4% Avis Budget Group, Inc. 5.7% AMERCO 4.2% Europcar Mobility Group S.A. 6.4% CAR Inc. NA Europcar Mobility Group S.A. 3.5% Hertz Global Holdings, Inc. 3.1% Hertz Global Holdings, Inc. 3.0% AMERCO NMF AMERCO NA Europcar Mobility Group S.A. 0.7% Avis Budget Group, Inc. 2.6% Hertz Global Holdings, Inc. NMF CAR Inc. NA Avis Budget Group, Inc. -0.3% AMERCO NA Jiedian NMF Jiedian NMF Profitability Profitability Internal Investment (CY 2019E Adjusted EBIT to 2019E Revenue) (CY 2020E Adjusted EBIT to CY 2020E Revenue) (LTM Capital Expenditures to LTM Revenue) Name Value Name Value Name Value Rent-to-Own Companies Rent-to-Own Companies Rent-to-Own Companies Rent-A-Center, Inc. 8.8% Aaron's, Inc. 8.9% Jiedian 24.3% Aaron's, Inc. 8.5% Rent-A-Center, Inc. 8.1% Aaron's, Inc. 2.4% FlexShopper, Inc. 4.8% FlexShopper, Inc. 8.1% FlexShopper, Inc. 2.0% Jiedian -4.9% Jiedian -4.1% Rent-A-Center, Inc. 0.7% Car Rental Companies Car Rental Companies Car Rental Companies Localiza Rent a Car S.A. 14.5% Localiza Rent a Car S.A. 14.8% Hertz Global Holdings, Inc. 145.5% AMERCO 14.3% Europcar Mobility Group S.A. 9.8% AMERCO 63.4% Europcar Mobility Group S.A. 10.1% Avis Budget Group, Inc. 6.7% Jiedian 24.3% Avis Budget Group, Inc. 6.5% Hertz Global Holdings, Inc. 6.3% Europcar Mobility Group S.A. 2.9% Hertz Global Holdings, Inc. 4.8% Jiedian -4.1% Avis Budget Group, Inc. 2.8% Jiedian -4.9% AMERCO NA CAR Inc. 2.3% CAR Inc. NA CAR Inc. NA Localiza Rent a Car S.A. 0.4%

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 Jiedian Preliminary Financial Analysis 10 Other Businesses Preliminary Liquidation Analysis 14 3. Appendices 19 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision Balance Sheet Preliminary as of 12/31/2019 Recoverability Estimate Preliminary Liquidation Value Amount Low High Low High Current Assets: Cash and Cash Equivalents ¥389.3 100% 100% ¥389.3 - ¥389.3 Short-Term Investments 326.0 100% 100% 326.0 - 326.0 Cash & Bank Balances 715.2 715.2 - 715.2 Within 30 days 71.8 95% 100% 68.2 - 71.8 Over 90 days 0.0 0.0 - 0.0 91 - 180 Days 0.0 0.0 - 0.0 Over 180 days 0.0 0.0 - 0.0 Accounts Receivable 71.8 68.2 - 71.8 Third-Party Platform Funds Receivable 12.9 100% 100% 12.9 - 12.9 VAT Prepayments 96.2 0% 20% 0.0 - 19.2 Supplier Rebates Receivables 14.6 50% 70% 7.3 - 10.2 Receivable From Disposal of Long-Term Investment 64.4 0% 10% 0.0 - 6.4 Prepaid Taxes Related to Overseas Purchase 35.0 0% 40% 0.0 - 14.0 Prepaid Vendors Deposits 5.0 80% 100% 4.0 - 5.0 Prepaid Advertising and Marketing Fees 14.2 0% 30% 0.0 - 4.3 Prepaid Rental Fees 3.5 0% 20% 0.0 - 0.7 Other Receivables 5.3 50% 70% 2.7 - 3.7 Prepayments and Other Current Assets 251.1 26.8 - 76.5 Inventory 23.0 50% 70% 11.5 - 16.1 Advances to Suppliers 13.5 80% 100% 10.8 - 13.5 Current Assets ¥1,074.6 ¥832.6 - ¥893.1 Non-Current Assets: Construction in Process 294.4 145% 182% 428.0 - 535.0 Project 1 104.6 0% 30% 0.0 - 31.4 Project 2 22.0 40% 80% 8.8 - 17.6 Project 3 10.4 0% 0% 0.0 - 0.0 Project 4 15.0 0% 0% 0.0 - 0.0 Project 5 79.9 50% 100% 40.0 - 79.9 Long-Term Investments 232.1 48.8 - 129.0 Property, Plant and Equipment, net 120.5 10% 30% 12.1 - 36.2 Goodwill 105.2 0% 0% 0.0 - 0.0 Operating Lease Right-of-Use Assets 171.6 113% 141% 193.6 - 242.0 Intangible Assets, net 7.3 0% 0% 0.0 - 0.0 Deferred Tax Assets (8.3) 0% 0% 0.0 - 0.0 Other Non-Current Assets 7.3 30% 60% 2.2 - 4.4 Total Assets ¥2,004.7 ¥1,517.2 - ¥1,839.6 Other Businesses Preliminary Liquidation Analysis Other Businesses Assets (RMB in millions) 15 A B C E D Source: Company management . Note : Other Businesses Preliminary Liquidation Analysis prepared by Company management.

 
 

Preliminary and Confidential | Subject to Further Review and Revision Balance Sheet Preliminary as of 12/31/2019 Recoverability Estimate Preliminary Liquidation Value Amount Low High Low High Current Liabilities: Accounts Payable 336.2 100% 90% 336.2 - 302.6 Advances From Customers 52.5 100% 100% 52.5 - 52.5 Tax Payable 95.3 100% 100% 95.3 - 95.3 Deposits From Service Providers 48.4 100% 50% 48.4 - 24.2 Payroll and Welfare Benefits Accruals 18.2 100% 100% 18.2 - 18.2 Server Custody and Bandwidth Fee Accruals 54.1 100% 100% 54.1 - 54.1 Accrual for Purchases of Property and Equipment 45.0 100% 80% 45.0 - 36.0 Unwithdrawn Cash Incentive Balance From Shuabao 559.4 80% 60% 447.5 - 335.6 Others 10.8 100% 50% 10.8 - 5.4 Accrued Expenses and Other Current Liabilities 735.9 624.0 - 473.5 Operating Lease Liabilities, Current Portion 25.4 100% 100% 25.4 - 25.4 Current Liabilities ¥1,245.2 ¥1,133.4 - ¥949.3 Non-Current Liabilities: Operating Lease Liabilities 20.7 100% 100% 20.7 - 20.7 Other Non-Current Liabilities 6.9 100% 100% 6.9 - 6.9 Total Liabilities ¥1,272.8 ¥1,160.9 - ¥976.8 Preliminary Liquidation Value Low High Preliminary Residual Value (Total Assets less Total Liabilities) ¥356.3 - ¥862.8 Wind Down Costs: Operating Costs During Wind-Down ¥30.0 - ¥30.0 Severance Fee 57.0 - 57.0 Liquidation Committee's Fee 3.0 - 3.0 Other Legal Charges (Litigation, Tax Clearance, Authority Approval, Deregistration) 5.0 - 5.0 Total Wind Down Charges ¥95.0 - ¥95.0 Dividend Tax [1] 0.0 - 28.6 Preliminary Other Businesses Implied Liquidation Value Reference Range (RMB) ¥261.3 - ¥739.2 RMB to USD Exchange Rate as of 2/12/2020 [2] 0.143 - 0.143 Preliminary Other Businesses Implied Liquidation Value Reference Range (USD) $37.5 - $106.0 Other Businesses Preliminary Liquidation Analysis Other Businesses Liabilities and Preliminary Liquidation Value Reference Range 16 (RMB in millions) F H G Preliminary Other Businesses Implied Liquidation Value Reference Range Source: Company management . Note : Other Businesses Preliminary Liquidation Analysis prepared by Company management. 1. Per Company management, the Company would be required to pay a tax of 10% on amounts distributed in an orderly liquidation in ex cess of the offshore cash balance of ~RMB482 million. 2. Per Capital IQ. ( dollars and RMB in millions)

 
 

Preliminary and Confidential | Subject to Further Review and Revision Other Businesses Preliminary Liquidation Analysis Selected Commentary  Cash & Bank Balances: According to Company management, cash & bank balances is comprised of cash and cash equivalents and short - term investments, and it is assumed to be fully recoverable in an orderly liquidation.  Accounts Receivable: All accounts receivable is aged fewer than 30 days. Company management indicated that they are confident in the ability to co lle ct over 95% of outstanding accounts receivable in an orderly liquidation .  Prepayments and Other Current Assets:  Third - party Platforms Funds Receivable: Company management indicated that this line item represents cash received but not yet withdrawn from third - party payment platforms such as Alipay and WeChat. It is effectively cash and it is assumed to be fully recoverable in an orderly liquidation.  VAT Prepayments: Represents VAT prepayments used to offset the Company’s VAT payable balance, or the difference between the VAT on the increme nta l price charged to customers and the VAT placed on the purchase of raw materials. As the Company will cease the purchase of raw ma terials i n the event of liquidation, the Company’s prepayments are unlikely to be utilized, therefore the Company indicated a recovery probability be twe en 0% to 20%.  Suppliers Rebates Receivable: Represents rebates from the E - Commerce business from Jumei’s previous merchandise sales business model. The Company estimated a recovery probability between 50% to 70%.  Receivable F rom D isposal of a Long - Term I nvestment: Company management indicated that it represents the remaining payment to be received in connection with the disposal of BabyTree. However, given the final payment is subject to the Company paying withholding tax a t a rate of 10%, which approximates the remaining payment amount, the net recovery amount for this line item is between 0% to 10%.  Prepaid Taxes Related to O verseas Purchase: Represents prepaid VAT and tariffs to customs, and the Company believes it will be difficult to recover. Therefore, the Company indicated a recovery probability between 0% to 40%.  Prepaid Advertising and Marketing Fees: The Company pays marketing expenses in advance. The Company believes these prepayments are unlikely to be recovered and indicated a 0% to 30 % recovery probability .  Prepaid Rental Fees: Given there are penalties associated with breaching contracts, the Company believes these prepayments are unlikely to be recovered and indicated a recovery probability of 0% to 20%.  Construction In Process / Operating Lease Right - of - use Assets: According to Company management, a real estate investment fund submitted a term sheet to the Company, which values the Tianjin warehouse at approximately RMB550 million and the Suzhou warehouse at approximately RMB 250 million. Accounting for the tax expense associated with the potential transaction, the Company estimated there is a 80% probability for the sale to c omp lete. As a result, the company indicated a recovery probability of between 145% to 182% for construction in process, and a recovery probability of between 1 13% to 141% for operating lease right - of - use assets.  The Tianjin warehouse is currently under construction  The Suzhou warehouse is used in operations to store power banks and lease space to logistics companies 17 A B C D Source: Company management . Note : Other Businesses Preliminary Liquidation Analysis prepared by Company management.

 
 

Preliminary and Confidential | Subject to Further Review and Revision Other Businesses Preliminary Liquidation Analysis Selected Commentary (cont.)  Long - Term Investments: The Company indicated that only two investments can be sold for certain cash recovery, namely:  Project 1: 16.7% in Voyage One, an E - Commerce platform specializing in sportswear. Voyage One has incurred losses for three cons ecutive years and the Company is planning on writing off this investment. As such, the Company believes the recovery rate will be 0%.  Project 2: A minority stake investment in an internet loan company in China. Given the portfolio company is currently generat ing profit, the Company indicated a recovery rate of 40% to 80%.  Project 3: 3.1% stake in Toget U, a short - video startup. Toget U is facing liquidity issues and is currently going through liqui dation. As such, the Company believes the recovery rate will be 0%.  Project 4: 5% stake in a media startup in China, who is facing liquidity issues and litigation at the moment . As such, the Company believes the recovery rate will be 0 %.  Project 5: A 45.0% LP interest in a TMT focused equity investment fund called Yingtan Yujiang District Huayao Investment Limi ted . Given the investment is still in a lock - up period, the Company indicated a recovery rate of 50% to 100%.  Advances From Customers: Represents prepaid advertising revenue that Shuabao generates from its customers. The Company believes that it will have to repay its customers in full in an event of liquidation.  Accrued Expenses and Other Current Liabilities:  Deposits from Service Providers: Represents legacy deposits Jumei collected from its merchant partners who are selling cosmetic goods at Jumei’s E - Commerce platform. The Company estimated that between 50% to 100% of the balance needs to be repaid.  Accrual for Purchase of Property and Equipment: Represents unpaid construction expenses associated with the Tianjin warehouse. The Company believes that between 80% to 100% of the balance will be paid.  Unwithdrawn Cash Incentives Balance from Shuabao: Represents the balance of Shuabao’s incentive program to be redeemed by customers. There is uncertainty as to whether users will be able to cash out in the event of liquidation, so Company management estimates that 60 % t o 80% of the unwithdrawn balance will be paid.  Operating Costs During Wind Down: Company management indicated that it would take approximately one month to wind down the business and that o ver this month, the Company would incur RMB30 million in expenses, RMB19 million of which relate to employee salaries and benefits and th e rest relating to rent, utility, and other fixed costs.  Severance Fees: Company management indicated that it would incur approximately RMB57 million in employee - related severance expenses in the event of liquidation, calculated based on the average employee tenure (three years per the PRC’s Labor Law calculation method) multiplied by the mo nth ly salary cost of RMB19 million, as stipulated by the Labor Law of PRC.  Liquidation Committee’s Fee: According to Company management, it will incur approximately RMB3 million in the liquidation - related expense .  Other Legal Charges : Company indicated that it would incur about RMB5 million in other legal - related expenses in the event of liquidation . 18 F H G E Source: Company management . Note : Other Businesses Preliminary Liquidation Analysis prepared by Company management.

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 3. Appendices 19 Selected Public Market Observations 20 Glossary 27 4. Disclaimer 29

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 3. Appendices 19 Selected Public Market Observations 20 Glossary 27 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision (100.0%) (50.0%) 0.0% 50.0% 100.0% Jan-17 Jumei Index Rent-to-Own Companies Index Car Rental Companies Index S&P 500 Index Selected Public Market Observations Relative Total Shareholder Return Source: Public information, Bloomberg as of 2/12/2020. Note: Rent - to - Own Companies Index is equally weighted and includes Aaron’s, Inc., FlexShopper, Inc., and Rent - A - Center, Inc. Note: Car Rental Companies Index is equally weighted and includes AMERCO, Avis Budget Group, Inc., CAR Inc., Europcar Mobilit y G roup S.A., Hertz Global Holdings, Inc., and Localiza Rent a Car S.A. Since Proposal (1/10/20 – 2/12/20) 5.9% 3.6% (6.9)% 21 Relative Total Shareholder Return Since Unaffected Date (1/10/20) 1-Year 2-Year 3-Year Total Return Total Return Total Return 1/10/19 - 1/10/20 1/10/18 - 1/10/20 1/10/17 - 1/10/20 Jumei Index (14.1%) (52.1%) (62.6%) Rent-to-Own Companies Index 103.3% 56.9% 67.8% Car Rental Companies Index 12.9% 1.5% 42.0% S&P 500 Index 28.3% 23.6% 52.8% 7.1%

 
 

Preliminary and Confidential | Subject to Further Review and Revision Selected Public Market Observations Selected History Trading Activity Source : Bloomberg. Note: Trading activity represented by daily volume - weighted average price (VWAP) amounts and volumes per Bloomberg 1. Based on VWAP over specified period (three months, six months, nine months, or twelve months). Reference to “Month” is based on calendar months . Twelve Months Ended (1/10/2020) 1 Nine Months Ended (1/10/2020) 1 Six Months Ended (1/10/2020) 1 Three Months Ended (1/10/2020) 1 Volume : 9.2 million VWAP 1 : $23.38 Volume: 5.6 million VWAP 1 : $22.89 Volume: 2.6 million VWAP 1 : $20.42 Volume: 1.3 million VWAP 1 : $19.49 22 1.6% 10.5% 18.5% 19.4% 39.7% 10.3% $16.00- $17.99 $18.00- $19.99 $20.00- $21.99 $22.00- $23.99 $24.00- $25.99 $26.00- $28.00 2.7% 17.3% 18.1% 13.4% 37.9% 10.6% $16.00- $17.99 $18.00- $19.99 $20.00- $21.99 $22.00- $23.99 $24.00- $25.99 $26.00- $28.00 5.7% 36.8% 38.5% 13.9% 5.1% 0.0% $16.00- $17.99 $18.00- $19.99 $20.00- $21.99 $22.00- $23.99 $24.00- $25.99 $26.00- $28.00 11.4% 44.4% 44.2% 0.0% 0.0% 0.0% $16.00- $17.99 $18.00- $19.99 $20.00- $21.99 $22.00- $23.99 $24.00- $25.99 $26.00- $28.00

 
 

Preliminary and Confidential | Subject to Further Review and Revision 0.0 0.5 1.0 1.5 2.0 2.5 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 Jan-16 Daily Trading Volume Trading Price Selected Events A D E F G H I J K L M N Selected Public Market Observations Timeline and ADS Trading History Source: Capital IQ, public information. 1. Jumei announced the going private proposal following the close of the market on 1/10/2020. Event Date Comment A 2/17/2016 Jumei received a preliminary non - binding proposal from CEO Mr. Chen, Co - Founder Yusen Dai and Sequoia funds to acquire all of the outstanding ordinary shares of Jumei for $70.00 per ADS. B 4/29/2016 Jumei announced resignation of Co - CFOs. C 12/23/2016 Jumei announced 1H2016 results and earnings decreased by 29.8% year - over year to approximately $21.3 million. D 5/1/2017 Jumei announced FY 2016 results and earnings increased by 11.4% from the prior period to approximately $21.6 million. E 5/4/2017 Jumei announced that it acquired 60% stake in Jiedian for cash consideration of approximately $45.5 million. F 6/21/2017 Jumei announced that it invested an aggregate of RMB84 million in the production of a television drama series titled “Here to Heart.” G 11/27/2018 The Previous Buyer Group withdrew the Previous Proposal with immediate effect. Event Date Comment H 4/30/2018 Jumei announced FY 2017 results and earnings decreased by 124.6% from the prior period to approximately - $5.7 million. I 5/28/2018 Jumei sold about 4% stake in Babytree for a total consideration of approximately $87 million. J 7/23/2018 Jumei announced that it repurchased 10,269,983 ADS for approximately $28 million. K 4/30/2019 Jumei announced FY2018 results and earnings increased by 217.8% from the prior period to approximately $17.1 million. L 12/31/2019 Jumei announced that it changed the ratio of its ADS to Class A ordinary shares from the current ADS ratio of one ADS to one Class A ordinary shares to a new ADS ratio of one ADS to ten Class A ordinary shares. M 1/1/2020 Jumei announced that it will delay the release of its financial results for the six months ended June 30, 2019 because certain operational results associated with its new businesses cannot be provided on a U.S. GAAP basis without significant effort or expense. N 1/13/2020 Jumei announced receipt of a preliminary non - binding proposal from the Chairman to acquire the Company at $20.00 per ADS. ADS Price (USD) Volume (mm) B C 23 Unaffected ADS Price as of 1/10/2020 1 = $17.43

 
 

Preliminary and Confidential | Subject to Further Review and Revision (shares and ADSs in millions) Selected Public Market Observations Ownership Summary Source: Capital IQ, public filings, Company management. 1. Mr . Leo Ou Chen owns the entirety of the outstanding Class B shares. Each Class B share is convertible into one Class A share, and is entitled to 10 votes compared to one vote per share for Class A shares. 2. ADS equivalent is calculated as total shares divided by 10, per Company management. 3. Class B shares are convertible 1:1 to Class A shares; as such, economic ownership % is calculated based on total shares held by each party. 4. Class B shares are entitled to 10 votes and Class A shares are entitled to one vote . 5. Yusen Dai (Co - Founder) left the company on July 27, 2017. 6. Based on recent ordinary share count provided by Company management. Economic Ownership % Voting Ownership % 24 Mr. Leo Ou Chen (CEO) , 88.9% Others , 11.1% Mr. Leo Ou Chen (Chairman, CEO) , 44.6% Renaissance Technologies , 3.2% BlackRock, Inc. (NYSE:BLK) , 1.6% Morgan Stanley , 1.4% Yusen Dai (Co - Founder), 0.7% Other Shareholders, 48.5% ` 5 Class A Class B Total ADS Ownership % Shares + Shares [1] = Shares Equiv [2] Economic [3] Voting [4] Unaffiliated Insider Holdings Mr. Leo Ou Chen (Chairman, CEO) -- 50.9 50.9 5.1 44.6% 88.9% Other Inside Holders 0.1 -- 0.1 0.0 0.1% 0.0% Public Holdings Renaissance Technologies 3.6 -- 3.6 0.4 3.2% 0.6% 5.8% BlackRock, Inc. (NYSE:BLK) 1.9 -- 1.9 0.2 1.6% 0.3% 2.9% Morgan Stanley 1.6 -- 1.6 0.2 1.4% 0.3% 2.6% Yusen Dai (Co-Founder) [5] 0.8 -- 0.8 0.1 0.7% 0.1% 1.2% Other Public Holders 55.3 -- 55.3 5.5 48.4% 9.7% 87.5% Total Ordinary Shares/ADS [6] 63.3 50.9 114.1 11.4 100.0% 100.0% 100.0%

 
 

Preliminary and Confidential | Subject to Further Review and Revision Selected Public Market Observations Float and Trading Observations Public Float / Shares Outstanding 90 - Day Average Daily Volume / Public Float Source: Capital IQ as of 2/12/2020 . 25 98.8% 53.0% 81.9% 45.3% 71.4% 31.2% 64.8% 59.3% 78.4% 60.7% 62.1% 55.3% Aaron's, Inc. FlexShopper, Inc. Rent-A- Center, Inc. AMERCO Avis Budget Group, Inc. CAR Inc. Europcar Mobility Group S.A. Hertz Global Holdings, Inc. Localiza Rent a Car S.A. Mean Median Jumei International Holding Limited 1.06% 1.83% 1.27% 0.52% 1.85% 0.17% 1.05% 2.42% 0.74% 1.23% 1.16% 0.72% Aaron's, Inc. FlexShopper, Inc. Rent-A-Center, Inc. AMERCO Avis Budget Group, Inc. CAR Inc. Europcar Mobility Group S.A. Hertz Global Holdings, Inc. Localiza Rent a Car S.A. Mean Median Jumei International Holding Limited Rent - to - Own Companies Car Rental Companies Rent - to - Own Companies Car Rental Companies

 
 

Preliminary and Confidential | Subject to Further Review and Revision (dollars in millions) Selected Public Market Observations Float and Trading Observations ( cont.) A verage Daily Volume / Shares Outstanding 90 - Day Average Daily Trading Value Source: Capital IQ as of 2/12/2020 . 26 1.05% 0.96% 1.04% 0.23% 1.32% 0.05% 0.68% 1.44% 0.58% 0.79% 0.82% 0.41% Aaron's, Inc. FlexShopper, Inc. Rent-A-Center, Inc. AMERCO Avis Budget Group, Inc. CAR Inc. Europcar Mobility Group S.A. Hertz Global Holdings, Inc. Localiza Rent a Car S.A. Mean Median Jumei International Holding Limited $41.5 $0.4 $15.9 $16.9 $32.2 $0.8 $4.7 $33.0 $50.0 $19.2 $16.4 $0.9 Aaron's, Inc. FlexShopper, Inc. Rent-A-Center, Inc. AMERCO Avis Budget Group, Inc. CAR Inc. Europcar Mobility Group S.A. Hertz Global Holdings, Inc. Localiza Rent a Car S.A. Mean Median Jumei International Holding Limited Rent - to - Own Companies Car Rental Companies Rent - to - Own Companies Car Rental Companies

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 3. Appendices 19 Selected Public Market Observations 20 Glossary 27 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision Glossary of Terms Definition Description Adjusted EBIT Earnings Before Interest and Taxes, adjusted for certain other non - recurring items Adjusted EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization, adjusted for certain other non - recurring items ADS American Depository Shares CAGR Compound Annual Growth Rate CY Calendar Year DAU Daily Active Users E Estimated FY Fiscal Year IPO Initial Public Offering IRR Internal Rate of Return LP Limited Partner LTM Latest Twelve Months or the Most Recently Completed 12 - Month Period for which Financial Information has been Made Public in the case of the selected companies NA Not Available NMF Not Meaningful Figure PRC People's Republic of China Q Quarter RMB Chines Yuan (Renminbi) RSU Restricted Stock Unit TMT Technology, Media, Telecom US GAAP United States General Accepted Accounting Principles USD United States Dollar VAT Value Added Tax VWAP Volume - Weighted Average Price 28

 
 

Page 1. Executive Summary 3 2. Preliminary Financial Analyses 6 3. Appendices 19 4. Disclaimer 29

 
 

Preliminary and Confidential | Subject to Further Review and Revision This presentation, and any supplemental information (written or oral) or other documents provided in connection therewith (co lle ctively, the “materials”), are provided solely for the information of the Special Committee (the “Committee”) of the Board of Directors (the “Board”) of Jumei International Holding Limited (the “Company”) by Houlihan Lokey in connection with the Committee’s consideration of a potential transaction (the “Transaction”) involving the Company. This presentation is incomplete without reference to, and should be co nsi dered in conjunction with, any supplemental information provided by and discussions with Houlihan Lokey in connection therewith. Any defined terms used herein shall have the meanings set forth here in, even if such defined terms have been given different meanings elsewhere in the materials. The materials are for discussion purposes only. Houlihan Lokey expressly disclaims any and all liability, whether direct or i ndi rect, in contract or tort or otherwise, to any person in connection with the materials. The materials were prepared for specific persons familiar with the business and affairs of the Company for use in a s pecific context and were not prepared with a view to public disclosure or to conform with any disclosure standards under any state, federal or international securities laws or other laws, rules or regul ati ons, and none of the Committee, the Company or Houlihan Lokey takes any responsibility for the use of the materials by persons other than the Committee. The materials are provided on a confidential ba sis solely for the information of the Committee and may not be disclosed, summarized, reproduced, disseminated or quoted or otherwise referred to, in whole or in part, without Houlihan Lokey’s expres s p rior written consent. Notwithstanding any other provision herein, the Company (and each employee, representative or other agent of the Company) may di sclose to any and all persons without limitation of any kind, the tax treatment and tax structure of any transaction and all materials of any kind (including opinions or other tax analyses, if an y) that are provided to the Company relating to such tax treatment and structure. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentenc e s hall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, the tax treatment of a transaction is the purported or claimed U.S. income or franchise ta x t reatment of the transaction and the tax structure of a transaction is any fact that may be relevant to understanding the purported or claimed U.S. income or franchise tax treatment of the transaction. If the C omp any plans to disclose information pursuant to the first sentence of this paragraph, the Company shall inform those to whom it discloses any such information that they may not rely upon such informat ion for any purpose without Houlihan Lokey’s prior written consent. Houlihan Lokey is not an expert on, and nothing contained in the materials should be construed as advice with regard to, legal, accoun tin g, regulatory, insurance, tax or other specialist matters. Houlihan Lokey’s role in reviewing any information was limited solely to performing such a review as it deemed necessary to support its own advice and analysis and was not on behalf of the Committee. The materials necessarily are based on financial, economic, market and other conditions as in effect on, and the information ava ilable to Houlihan Lokey as of, the date of the materials. Although subsequent developments may affect the contents of the materials, Houlihan Lokey has not undertaken, and is under no obligation, to upda te, revise or reaffirm the materials, except as may be expressly contemplated by Houlihan Lokey’s engagement letter. The materials are not intended to provide the sole basis for evaluation of the Transac tio n and do not purport to contain all information that may be required. The materials do not address the underlying business decision of the Company or any other party to proceed with or effect the Tra nsa ction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available for the Company or any other party. The materials do not constitu te any opinion, nor do the materials constitute a recommendation to the Board, the Committee, the Company, any security holder of the Company or any other party as to how to vote or act with respect to an y m atter relating to the Transaction or otherwise or whether to buy or sell any assets or securities of any company. Houlihan Lokey’s only opinion is the opinion, if any, that is actually delivered to the Com mittee. In preparing the materials Houlihan Lokey has acted as an independent contractor and nothing in the materials is intended to create or shall be construed as creating a fiduciary or other relation shi p between Houlihan Lokey and any party. The materials may not reflect information known to other professionals in other business areas of Houlihan Lokey and its affiliates. The preparation of the materials was a complex process involving quantitative and qualitative judgments and determinations wi th respect to the financial, comparative and other analytic methods employed and the adaption and application of these methods to the unique facts and circumstances presented and, therefore, is not read ily susceptible to partial analysis or summary description. Furthermore, Houlihan Lokey did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitativ e j udgments as to the significance and relevance of each analysis and factor. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect th e v alue of particular techniques. Accordingly, the analyses contained in the materials must be considered as a whole. Selecting portions of the analyses, analytic methods and factors without considering all analyses and factors could create a misleading or incomplete view. The materials reflect judgments and assumptions with regard to industry performance, general business, economic, regulatory, mark et and financial conditions and other matters, many of which are beyond the control of the participants in the Transaction. Any estimates of value contained in the materials are not necessarily indicat ive of actual value or predictive of future results or values, which may be significantly more or less favorable. Any analyses relating to the value of assets, businesses or securities do not purport to be appraisal s o r to reflect the prices at which any assets, businesses or securities may actually be sold. The materials do not constitute a valuation opinion or credit rating. The materials do not address the fairness of a ny portion or aspect of the Transaction to any party. In preparing the materials, Houlihan Lokey has not conducted any physical inspection or independent appraisal or evaluation of any of the assets, propert ies or liabilities (contingent or otherwise) of the Company or any other party and has no obligation to evaluate the solvency of the Company or any other party under any law. Disclaimer 30

 
 

Preliminary and Confidential | Subject to Further Review and Revision All budgets, projections, estimates, financial analyses, reports and other information with respect to operations (including est imates of potential cost savings and expenses) reflected in the materials have been prepared by management of the relevant party or are derived from such budgets, projections, estimates, financial analyse s, reports and other information or from other sources, which involve numerous and significant subjective determinations made by management of the relevant party and/or which such management has reviewed and found reasonable. The budgets, projections and estimates (including, without limitation, estimates of potential cost savings and synergies) contained in the materials may or may not be achieved and differences between projected results and those actually achieved may be material. Houlihan Lokey has relied upon representations made by management of the Company and other participants in the Tran sac tion that such budgets, projections and estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management (or, with res pect to information obtained from public sources, represent reasonable estimates), and Houlihan Lokey expresses no opinion with respect to such budgets, projections or estimates or the assumptions on which they are based. The scope of the financial analysis contained herein is based on discussions with the Company (including, without limitation, regarding the methodologies to be utilized), and Hou lih an Lokey does not make any representation, express or implied, as to the sufficiency or adequacy of such financial analysis or the scope thereof for any particular purpose. Houlihan Lokey has assumed and relied upon the accuracy and completeness of the financial and other information provided to, dis cussed with or reviewed by it without (and without assuming responsibility for) independent verification of such information, makes no representation or warranty (express or implied) in respect of the ac curacy or completeness of such information and has further relied upon the assurances of the Company and other participants in the Transaction that they are not aware of any facts or circumstances tha t w ould make such information inaccurate or misleading. In addition, Houlihan Lokey has relied upon and assumed, without independent verification, that there has been no change in the business, assets, lia bilities, financial condition, results of operations, cash flows or prospects of the Company or any other participant in the Transaction since the respective dates of the most recent financial statements an d o ther information, financial or otherwise, provided to, discussed with or reviewed by Houlihan Lokey that would be material to its analyses, and that the final forms of any draft documents reviewed b y H oulihan Lokey will not differ in any material respect from such draft documents. The materials are not an offer to sell or a solicitation of an indication of interest to purchase any security, option, commo dit y, future, loan or currency. The materials do not constitute a commitment by Houlihan Lokey or any of its affiliates to underwrite, subscribe for or place any securities, to extend or arrange credit, or to provide any other services. In the ordinary course of business, certain of Houlihan Lokey’s affiliates and employees, as well as investment funds in which they may have financial interests or with which they m ay co - invest, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obl iga tions) of, or investments in, the Company, any Transaction counterparty, any other Transaction participant, any other financially interested party with respect to any transaction, other entities or part ies that are mentioned in the materials, or any of the foregoing entities’ or parties’ respective affiliates, subsidiaries, investment funds, portfolio companies and representatives (collectively, the “Interested Pa rties”), or any currency or commodity that may be involved in the Transaction. Houlihan Lokey provides mergers and acquisitions, restructuring and other advisory and consulting services to clients, which may have in the past included, or may currently or in the future include, one or more Interested Parties, for which services Houlihan Lokey has received, and may receive, compensation. Although Houlihan Lok ey in the course of such activities and relationships or otherwise may have acquired, or may in the future acquire, information about one or more Interested Parties or the Transaction, or that otherwis e m ay be of interest to the Board, the Committee, or the Company, Houlihan Lokey shall have no obligation to, and may not be contractually permitted to, disclose such information, or the fact that Houlihan Lok ey is in possession of such information, to the Board, the Committee, or the Company or to use such information on behalf of the Board, the Committee, or the Company. Houlihan Lokey’s personnel may make st atements or provide advice that is contrary to information contained in the materials. Disclaimer (cont.) 31

 
 

32 CORPORAT E FINANCE FINANCI A L ADVISOR Y SERVICES FINANCIA L RESTRUCTURING HL .com