EX-99.(C)(2) 2 dex99c2.htm PRESENTATION OF MOELIS & COMPANY Presentation of Moelis & Company
Presentation to the Special Committee
Project Gorilla
November 3, 2009
STRICTLY CONFIDENTIAL
Exhibit (c)(2)


[
1
]
Disclaimer
Moelis & Company (“Moelis”) prepared this presentation for the Special Committee of the Board of Directors of Lion (the
“Company”) based on publicly available information and non-public information that the Company’s management
supplied to us.  Moelis has not and does not intend to verify independently any of such information, all of which Moelis
assumes is accurate and complete in all material respects.  If this presentation contains projections, forecasts or other
forward-looking
statements,
Moelis
assumes
that
they
were
prepared
based
on
the
best
available
estimates
of
the
future
events underlying such statements.  This presentation speaks only as of its date and Moelis assumes no duty to update it or
to advise any person that its conclusions or advice has changed.
This
presentation
is
solely
for
your
information
purposes
only.
Consider
it
along
with
all
other
facts,
advice
and
its
own
insights before making your own independent decisions.  Do not provide a copy of this presentation to any person without
Moelis’
prior consent.  No other person should rely on it for any purpose.
This presentation is not an offer to sell or a solicitation of an indication of interest to purchase any security, option,
commodity, future, loan or currency.  It is not a commitment to underwrite any security, to loan any funds or to make any
investment.  Moelis does not offer tax, accounting or legal advice.
Moelis & Company provides mergers and acquisitions, restructuring and other advisory services to clients and its affiliates
manage private investment partnerships.  Its personnel may make statements or provide advice that is contrary to
information contained in this material.  Our proprietary interests may conflict with your interests.  Moelis may from time to
time have positions in or effect transactions in securities described in this presentation.  Moelis & Company may have
advised, may seek to advise and may in the future advise or invest in companies mentioned in this presentation.


[
2
]
I.
Transaction Background
II.
Valuation Analyses
Appendix
A.
Additional Information
Table of Contents


I.
Transaction Background


[
4
]
Transaction Background
The Special Committee held numerous calls and meetings with its advisors to review Toucan’s initial proposal and strategic
alternatives in the subsequent weeks
Conducted a comprehensive review of strategic alternatives available to Lion
Authorized
Moelis
to
conduct
a
market
check
Moelis
has contacted 70 potential buyers to date, with 13 CIMs
delivered and an initial bid date in mid-November
Determined that the consideration provided to Lion minority shareholders per Toucan’s initial proposal will not be
adequate based on Toucan’s assumptions
Special Committee
Initial Review
On September 15, the Special Committee received additional detail from Toucan and Jefferies (his financial advisor)
regarding his proposal
Toucan’s initial offer contemplated the following:
Spin-out of Sabre to all Lion shareholders
Minority shareholders would receive 66.1% and Toucan would receive 33.9% of Sabre (vs. current Lion ownership of
44.9% and 55.1%, respectively)
The proposal offered an implied $15.61 per share consideration to Lion minority shareholders in the form of new Sabre
stock premised on the following assumptions: (i) approximately $30 million of standalone EBITDA and $10 million of
standalone net income; (ii) a 15.5x 2010E P/E trading multiple and (iii) $92 million of funded Sabre debt
Toucan Initial Offer
On August 14, Lion’s Board of Directors appointed a special committee comprised solely of independent directors of the
Company
and
authorized
the
Special
Committee
to
review
strategic
alternatives
for
the
Company,
including
a
possible
sale
of
the Company
The Special Committee retained independent legal counsel and engaged Moelis & Company as its financial advisor
on September 9
On September 9, Lion issued a press release stating the following:
A
Special
Committee
of
independent
directors
was
formed
on
August
14
On September 4, the Special Committee received a letter from Toucan, Chairman, President and CEO of Lion,
expressing his desire to enter into formal discussions with the Special Committee regarding a going-private
transaction and a related tax-free spin-off of the Company’s wholly-owned subsidiary, Sabre 
The Special Committee informed Toucan that it will not be prepared to make a recommendation regarding any
transaction
with
him,
if
at
all,
unless
and
until
such
time
that
it
has
had
the
opportunity
to
explore
other
alternatives
As
part
of
the
Committee’s
review
of
strategic
alternatives,
the
Committee
instructed
Moelis
to
solicit
third-party
indications of interest for a potential acquisition of or a transaction involving Lion
Toucan filed a Schedule 13D on September 9 disclosing his proposal
Lion Press Release and
Toucan 13D Filing
TRANSACTION BACKGROUND
Set
forth
below
is
a
transaction timeline since the formation of the Special Committee for the
Committee’s reference


[
5
]
Transaction Background (cont.)
The Special Committee met with its advisors in New York on October 27 to review Toucan’s revised $13.00 per share cash proposal
Special Committee
Review of Toucan
Revised Proposal
The Special Committee, Moelis and Cadwalader, Wickersham & Taft LLP (the Committee’s legal counsel, “CWT”) met with Toucan
and his advisors on October 27
Presented preliminary valuation views which highlighted that an appropriate valuation would be above the $13.00 revised
proposal
Toucan and his advisors provided revised assumptions and an updated capitalization table for the transaction on October 28
After discussions with its advisors, the Special Committee determined that Toucan’s proposal was inadequate
The Special Committee, Moelis and CWT met with Toucan and his advisors on October 28 to review revised draft valuation
materials considering revised assumptions
At this meeting, the Special Committee formally rejected Toucan’s proposal as inadequate
At this time, Toucan submitted a revised proposal of either $13.75 cash consideration or a revised Sabre proposal with lower debt
($80mm vs. $92mm) and lower Toucan ownership (27.5% vs. 33.9%)
On October 28, the Special Committee, Toucan and their advisors engaged in negotiations throughout the day
The Special Committee rejected the $13.75 per share cash proposal as inadequate
Toucan
later
submitted
an
increased
proposal
of
$14.00
per
share
in
cash,
which
the
Committee
again
rejected
as
inadequate
Toucan then submitted another increased proposal of $14.25 per share in cash, which was again rejected by the Committee as
inadequate
Toucan submitted a best and final offer of $14.75 per share in cash
Negotiation and
Agreement with
Toucan
A Lion board meeting is scheduled for Tuesday, November 3 to consider the transaction
Current Status
Toucan submitted a revised proposal as an alternative to the Sabre proposal to the Special Committee on October 22
The revised proposal offered the following:
$13.00 per share in cash consideration as an alternative to the Sabre proposal
The Special Committee received a highly confident letter from Jefferies on October 23 for up to $600 million of debt financing in
connection with Toucan’s revised proposal
Subject to market, diligence and approval conditions
Toucan Revised
Proposal
The Special Committee determined that, as offered, the value of Toucan’s initial proposal would be below the stated $15.61 per
share due to a number of economic and non-economic issues related to Toucan’s valuation assumptions
The
Special
Committee
formally
rejected
the
initial
proposal
and
offered
Toucan
the
opportunity
to
submit
a
revised
proposal
on
October 21
Response to Toucan
TRANSACTION BACKGROUND


[
6
]
Summary of Toucan Proposal
SUMMARY OF TOUCAN PROPOSAL
Notes: Adj. EBITDA is adjusted for one-time items including discontinued operations
1
Unaffected references one-day prior to announcement price on September 8, 2009
2
Debt as of December 31, 2009.  Adjusted for required working capital payments of approximately $15mm for the Restaurant Group
3
Cash as of December 31, 2009 of $27.6mm is shown net of minimum cash for Lion of $13mm (includes $10mm of Goose cage cash) and $13mm of required Goose working capital / construction payments
4
Based on financials provided by management on October 28, 2009
Cash
Unaffected
¹
Current
Proposal
At
($ in millions, except per share data)
9/8/2009
10/30/2009
10/22/09
Offer
Implied Premiums At Offer
Lion Share Price
$10.86
$10.90
$13.00
$14.75
Premium to:
Statistic
Premium
Fully Diluted Shares Outstanding
16.240
16.241
16.288
16.317
Current (10/30/09)
$10.90
35.3%
Fully Diluted Equity Value
$176
$177
$212
$241
1-Day Prior to 10/22/09 Proposal
10.50
40.5%
Plus
: Debt ²
981
981
981
981
1-Day Prior -
Unaffected Price (9/8/09)
$10.86
35.8%
Less: Excess Cash
³
(2)
(2)
(2)
(2)
1-Week Prior to Unaffected Avg. Price
10.27
43.6%
Total Enterprise Value
$1,155
$1,156
$1,191
$1,220
30-Day Prior to Unaffected Avg. Price
9.54
54.6%
60-Day Prior to Unaffected Avg. Price
9.32
58.2%
Implied Valuation Multiples
1-Week Prior to Current Avg. Price
$11.35
30.0%
30-Day Prior to Current Avg. Price
10.96
34.6%
Statistic
Multiples
60-Day Prior to Current Avg. Price
10.89
35.4%
Public Filings and IBES Estimates:
LTM Prior to Current Avg. Price
9.22
60.0%
TEV / LTM 6/30/09 Revenues
$1,082
1.1x
1.1x
1.1x
1.1x
LTM Prior to Current High Price
12.87
14.6%
TEV / 2009E Revenues
1,038
1.1x
1.1x
1.1x
1.2x
LTM Prior to Current Low Price
3.60
309.7%
TEV / 2010E Revenues
1,052
1.1x
1.1x
1.1x
1.2x
TEV / LTM 6/30/09 Adj. EBITDA
$187
6.2x
6.2x
6.4x
6.5x
TEV / 2009E Adj. EBITDA
180
6.4x
6.4x
6.6x
6.8x
TEV / 2010E Adj. EBITDA
180
6.4x
6.4x
6.6x
6.8x
LTM 6/30/09 P / E
$0.77
14.2x
14.2x
17.0x
19.3x
2009E P / E
(0.35)
nm
nm
nm
nm
2010E P / E
nm
nm
nm
nm
nm
Management Projections:
4
TEV / 2009E Revenues
$1,067
1.1x
1.1x
1.1x
1.1x
TEV / 2010E Revenues
1,084
1.1x
1.1x
1.1x
1.1x
TEV / 2009E Adj. EBITDA
$174
6.7x
6.7x
6.9x
7.0x
TEV / 2010E Adj. EBITDA
183
6.3x
6.3x
6.5x
6.7x
2009E P / E
($0.60)
nm
nm
nm
nm
2010E P / E
(1.08)
nm
nm
nm
nm


[
7
]
The go-shop period will end the later of December 17, 2009 or the consummation of the debt financing
Go-Shop / Solicitation
Break-up fees include the following:
Lion pays (a) for Toucan’s expenses up to $3.5mm if the Company breaches or if the Company does not hold the
Special Meeting by May 31, 2010; (b) a $4.8mm termination/break-up fee for a deal identified after the go-shop
period and a $2.4mm termination fee for an alternative deal identified during the go-shop period
Toucan pays a reverse break-up fee of $20mm if Toucan breaches, if Toucan’s equity commitment is breached or if
debt financing is not completed, but not if failure of debt financing due to an act of God or specified adverse and
material change in market conditions
Break-Up Fees
$14.75 per share in cash
Total consideration to minority shareholders of approximately $108 million
Implies a Total Enterprise Value (“TEV”) of $1,220 million and an Equity Value of $241 million
Purchase Price and
Consideration
TEV / LTM EBITDA: 6.5x
TEV / 2009E EBITDA: 7.0x
TEV / 2010E EBITDA: 6.7x
LTM P/E: 19.3x; negative projected EPS for 2009E and 2010E periods
Implied Purchase
Multiples ¹
Debt and equity financing is a condition to closing
Equity commitment letter requires Toucan to rollover his equity and provide a cash equity commitment of $40mm
(enforceable by Lion)
No committed debt financing
Highly Confident debt financing letter and term sheets received from Jefferies and Wells Fargo Foothill
Jefferies was Co-Lead Arranger and Wells Fargo Foothill is Administrative Agent on Lion’s current credit facility
Letter
and
term
sheets
cover
debt
financing
up
to
$625mm
and
the
debt
financing
is
subject
to
certain
conditions
including satisfactory market conditions, due diligence, Jefferies engagement letter and Jefferies underwriting
committee approval
Expect to amend existing $210mm credit facility as follows: increase to $235mm ($75mm revolver, increased from
$50mm,
and
$160mm
term
loan);
L+600
bps
(unchanged)
with
a
2.00%
LIBOR
floor
(reduced
from
3.50%)
and
75bps commitment fee (increased from 50bps); extend maturity to 4 years.  Rate must not exceed L+750bps or the
agreement can be terminated by Toucan
$390mm
of
new
Senior
Secured
Notes
rate
must
not
exceed
13.5%
or
the
agreement
can
be
terminated
by
Toucan
Financing
Must be approved by a majority of minority of shareholders
HSR
Approvals
Outside date of May 31, 2010
Key Dates
DRAFT MERGER AGREEMENT SUMMARY
Draft Merger Agreement Summary
The following summarizes transaction provisions of the draft merger agreement
Note:
1
Projections per management


[
8
]
Transaction Sources and Uses
Set forth below are sources and uses of funds for the transaction as provided by Toucan
SOURCES
($ in millions)
Amount
%
New Revolver ¹
$37
2.9%
New Term Loan
160
12.7%
New Senior Secured Notes
390
31.0%
Existing 7.5% / 9.5% Notes
2
0.1%
Rollover Holiday Inn Debt
10
0.8%
Rollover Goose Debt
488
38.8%
Rollover Equity
131
10.4%
Toucan New Equity
40
3.2%
Total Sources ²
$1,258
100.0%
USES
($ in millions)
Amount
%
Accrued Interest
$16
1.2%
Refinance Existing Revolver ³
27
2.1%
Refinance Existing Term Loan
158
12.6%
Refinance Existing Senior Secured Notes
296
23.5%
Existing 7.5% / 9.5% Notes
2
0.1%
Rollover Holiday Inn Debt
10
0.8%
Rollover Goose Debt
488
38.8%
Rollover Equity
131
10.4%
Purchase of Common Equity
107
8.5%
Options
3
0.2%
Fees & Expenses
21
1.7%
Total Uses ²
$1,258
100.0%
Notes:
1
Revolver capacity of $75 million
2
Corresponds to transaction value shown previously; difference is
accrued interest, fees and expenses and excess cash
3
Adjusted for required working capital payments of approximately $15mm
RECONCILIATION TO TOTAL DEBT
Amount
Existing Revolver ³
$27
Existing Term Loan
158
Existing Senior Secured Notes
296
Existing 7.5% / 9.5% Notes
2
Holiday Inn Debt
10
Goose Debt
488
Reconciliation to Total Debt
$981
Based on information provided by Toucan on October 30 assuming a $14.75 per share purchase price


[
9
]
Lion Pro Forma Capitalization
Set forth below is a pro forma capitalization for the transaction
12/31/09E PRO FORMA CAPITALIZATION
Notes:
1
$27.6mm cash balance net of $13mm of required Goose working capital / construction payments
2
Existing restaurant revolver capacity of $50 million
3
New revolver capacity of $75 million
Adjustments
PF
($ in millions)
12/31/09E
Debits
Credits
12/31/09E
Cash ¹
$15
$15
Restaurant Group
Existing Restaurant Revolver  ²
$27
$27
$0
Existing WFF Term Loan
158
158
0
Existing Senior Secured Notes
296
296
0
New Revolver ³
0
37
37
New Term Loan
0
160
160
New Senior Secured Notes
0
390
390
7.50% Senior Notes
1
1
9.50% Senior Notes
1
1
Holiday Inn
10
10
Total Restaurant Group Debt
$492
$598
Restaurant Group Debt / 2009E EBITDA
3.6x
4.3x
Adj. Restaurant Group Debt / 2009E EBITDAR
4.7x
5.3x
Goose
Revolver
$27
$27
First Lien Term Loan
209
209
Delayed Draw Term Loan
117
117
Second Lien Term Loan
132
132
LGE / Kronberg
Land Note
4
4
Total Goose Debt
$488
$488
Goose Debt / 2009E EBITDA
13.8x
13.8x
Total Debt
$981
$1,087
Toucan Equity
$131
37
40
$135
Minority Equity
107
107
0
Options
3
3
0
Total Equity
$241
$135
Total Debt / 2009E EBITDA
5.6x
6.3x


[
10
]
At the direction of the Special Committee, Moelis has contacted 70 parties to date as part of the
strategic alternatives process
Third-Party Process Summary
THIRD-PARTY PROCESS SUMMARY
This
week,
Moelis
will
reach
out
to
parties
that
have
signed
CAs
to
inform
them
of
the
“go-shop”
process
Initial indications will be due in mid-November
54
24
13
16
4
70
28
13
0
10
20
30
40
50
60
70
80
Contacted
CAs Delivered
CAs Signed / CIMs Delivered
Financial Parties
Strategic Parties


[
11
]
Recent Share Price Performance
Share price performance over the last two years
SHARE PRICE PERFORMANCE—LAST TWO YEARS
Source: Capital IQ
9/9/09
Announces Toucan’s
intention to negotiate a transaction
9/4/09
Toucan submits letter
regarding go-private transaction
(undisclosed)
8/14/09
Special Committee is
formed to explore strategic
alternatives (undisclosed)
2/13/09
Closes on $296 million of
senior secured notes and a $216
million senior secured credit facility
1/12/09
Terminates previously
announced go-private transaction
with Toucan
10/18/08
Board approves
amendment to merger agreement to
be acquired for $13.50 / share
8/8/08
“Go-shop”
period ends
6/18/08
Enters into definitive
agreement to be acquired by Toucan
for $21.00 / share
4/4/08
Board receives letter from
Toucan with offer to acquire the
Company for $21.00 / share
1/28/08
Board
receives letter from
Toucan with offer
to acquire
Company for
$23.50 / share
Lion’s share price has declined ~60% over the past two years
Offer:  $14.75
$0
$5
$10
$15
$20
$25
$30
$35
10/30/2007
2/29/2008
6/30/2008
10/30/2008
2/28/2009
6/30/2009
10/30/2009
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Volume
Price
Offer ($14.75)


[
12
]
Indexed Share Price Performance
Relative share price performance over the last two years
RELATIVE SHARE PRICE PERFORMANCE—LAST TWO YEARS
Source: Capital IQ
Notes:
1
Gaming index includes Ameristar Casinos, Boyd Gaming, Isle of Capri, Monarch Casino & Resort, Penn National Gaming and Pinnacle Entertainment
2
Restaurants index includes Brinker International, Darden Restaurants, O’Charley’s, Red Robin Gourmet Burgers, Ruby Tuesday, Texas Roadhouse, BJ’s Restaurants, California Pizza Kitchen, Cheesecake
Factory, PF Chang’s China Bistro, McCormick & Schmick’s, Morton’s Restaurant Group and Ruth’s Hospitality Group
0
20
40
60
80
100
120
10/30/07
2/29/08
6/30/08
10/30/08
2/28/09
6/30/09
10/30/09
Lion
Gaming ¹
Restaurants ²
S&P 500
Lion: (61%)
Gaming:  (66%)
Restaurants: (34%)
S&P 500: (32%) 
Lion
traded
approximately
in
line
with
the
restaurant
peer
group
until
2008,
when
it
began
to
track
the
gaming
index more closely


[
13
]
Long-Term Share Price Performance
Share price performance since Initial Public Offering
SHARE PRICE PERFORMANCE—SINCE IPO
Source: Capital IQ
Offer:  $14.75
$0
$5
$10
$15
$20
$25
$30
$35
$40
1993
1995
1997
1999
2001
2003
2005
2007
2009
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Volume
Price
Offer ($14.75)


[
14
]
Trailing Total Enterprise Value / EBITDA Multiple
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
TEV / LTM EBITDA MULTIPLE ¹—SINCE 2000
Source: Capital IQ
Note:
1
LTM EBITDA is not adjusted for discontinued operations that became discontinued after the respective periods shown; therefore figures shown do not tie to other multiples shown
Current:
5.4x
Offer:
6.3x
1-Year Average:
5.2x
3-Year Average:
6.5x
5-Year Average:
6.9x
10-Year Average:
6.6x
Offer:  6.3x


II.
Valuation Analyses


[
16
]
Valuation Framework
Key Metrics
Methodology
Comparable
public
trading
multiples
establish
baseline
valuation
parameters
TEV / EBITDA, P/E and PEG multiples are relevant metrics for restaurant companies based on
2010E EBITDA and EPS
2010E TEV / EBITDA multiples are most relevant for the Restaurant Group given Lion’s
negative / nominal projected EPS
TEV
/
EBITDA
multiples
are
relevant
metrics
for
gaming
companies
based
on
2010E
EBITDA
Need to assess both restaurant and gaming multiples separately
Comparable Public
Trading Multiples
Leveraged Buyout
Analysis
Traditional Discounted
Cash Flow Analysis
Precedent Transaction
Multiples
Based on capital structure and purchase value combination that produces a 25%+ IRR to investors
Financial sponsor returns expectations are increasing given the changes in the capital markets and
economic outlook
Based on management’s financial projections through 2014 (five year projections)
Highly sensitive to assumptions on terminal cash flow, growth and discount rates
Need to assess both restaurant and gaming operations separately
TEV / LTM EBITDA multiples were considered for restaurant precedent transactions
TEV / Forward EBITDA multiples were considered for gaming precedent transactions
Standard valuation practices for each industry
Financial
projections
provided
by
management
on
September
29
and
updated
on
October
28
th
form
the
basis
for
Moelis’
valuation
analysis
Moelis employed four principal methodologies in its valuation analysis for Lion
th


[
17
]
Summary of Historical and Projected Financials
Fiscal Year Ended December 31,
($ in millions)
2006A
2007A
2008A
2009E
2010E
2011E
2012E
2013E
2014E
Units
164
173
174
174
174
177
180
183
186
Same Store Sales
4.6%
0.6%
(2.3%)
(7.4%)
1.0%
1.0%
1.0%
1.0%
1.0%
Revenues
$1,102
$1,160
$1,144
$1,067
$1,084
$1,115
$1,152
$1,180
$1,208
Revenue Growth %
5.3%
(1.4%)
(6.7%)
1.6%
2.8%
3.3%
2.5%
2.4%
COGS
250
256
245
217
220
225
231
236
240
Gross Profit
$852
$904
$899
$850
$864
$889
$921
$944
$967
Gross Margin
77.4%
77.9%
78.5%
79.6%
79.7%
79.8%
80.0%
80.0%
80.1%
Labor
358
375
366
346
352
362
373
382
391
Other Operating Expenses
278
292
288
269
282
286
292
297
301
Unit Level Profit
$216
$237
$244
$235
$230
$241
$256
$266
$276
Unit Level Profit Margin
19.6%
20.4%
21.3%
22.0%
21.2%
21.6%
22.2%
22.5%
22.8%
Adj. EBITDA ¹
$158
$182
$192
$174
$183
$194
$208
$218
$228
EBITDA Margin
14.4%
15.7%
16.8%
16.3%
16.9%
17.4%
18.1%
18.5%
18.9%
EBITDA Growth %
14.7%
5.7%
(9.6%)
5.2%
5.9%
7.7%
4.7%
4.6%
Depreciation & Amortization
56
65
70
73
83
85
86
88
89
Adj. EBIT ¹
$103
$116
$122
$101
$100
$109
$122
$131
$139
EBIT Margin
9.3%
10.0%
10.7%
9.4%
9.2%
9.8%
10.6%
11.1%
11.5%
EBIT Growth %
13.6%
4.6%
(17.4%)
(0.8%)
9.1%
12.3%
6.9%
6.3%
Adj. Net Income ²
$36
$29
$26
($10)
($17)
$1
$26
$34
$41
Net Income Margin
3.3%
2.5%
2.3%
nm
nm
0.1%
2.2%
2.9%
3.4%
Net Income Growth %
(19.3%)
(9.9%)
nm
nm
nm
3932.1%
32.5%
21.2%
Maintenance Capital Expenditures
20
29
25
25
21
21
21
21
21
Growth Capital Expenditures ³
160
91
79
102
9
9
9
9
9
Total Capital Expenditures
$180
$120
$104
$127
$30
$30
$30
$30
$30
The following
sets
forth
historical
and
projected
financials
for
the
consolidated
company
received
from
management
on
October
28
th
SUMMARY OF HISTORICAL AND PROJECTED FINANCIALS
Notes:
1
2009E Adjusted EBITDA is adjusted for the following one-time items: transaction costs of $1.7mm (related to historical transactions), debt retirement expenses of $4.0mm, non-recurring gains of $32.7mm
and swap adjustment income of $4.9mm.  The $32.7mm of non-recurring gains include the following: lease termination of $7.5mm, excess insurance proceeds of $4.5mm, gain on asset sales of $1.3mm
and gain on Goose debt buyback of $19.4mm
2
2006-2009E adjusted net income per Moelis estimates using a tax rate of 32.0% (per management)
3
Significant growth capex in 2009E is related to the new Goose tower


[
18
]
th
Summary of Historical and Projected FinancialsRestaurant Group
Fiscal Year Ended December 31,
($ in millions)
2006A
2007A
2008A
2009E
2010E
2011E
2012E
2013E
2014E
Units
164
173
174
174
174
177
180
183
186
Same Store Sales
4.6%
0.6%
(2.3%)
(7.4%)
1.0%
1.0%
1.0%
1.0%
1.0%
Revenues
$871
$894
$891
$841
$852
$869
$887
$905
$923
Revenue Growth %
2.7%
(0.4%)
(5.5%)
1.2%
2.1%
2.0%
2.0%
2.0%
COGS
237
242
231
204
206
210
215
219
223
Gross Profit
$634
$653
$660
$637
$646
$659
$672
$686
$699
Gross Margin
72.8%
73.0%
74.1%
75.8%
75.8%
75.8%
75.8%
75.8%
75.8%
Labor
256
259
258
244
249
255
260
265
270
Other Restaurant Operating Expenses
209
220
220
201
210
213
217
220
224
Restaurant Level Profit
$168
$173
$181
$192
$186
$191
$196
$201
$206
Restaurant Level Profit Margin
19.3%
19.3%
20.3%
22.8%
21.9%
22.0%
22.1%
22.2%
22.3%
Adj. EBITDA ¹
$110
$119
$130
$138
$140
$144
$149
$154
$159
EBITDA Margin
12.7%
13.3%
14.6%
16.4%
16.4%
16.6%
16.8%
17.0%
17.2%
EBITDA Growth %
7.4%
9.7%
6.2%
1.0%
3.4%
3.3%
3.3%
3.2%
Depreciation & Amortization
44
47
49
50
50
51
51
52
52
Adj. EBIT ¹
$67
$71
$81
$88
$90
$94
$98
$103
$107
EBIT Margin
7.7%
8.0%
9.1%
10.5%
10.5%
10.8%
11.1%
11.3%
11.6%
EBIT Growth %
6.8%
13.6%
9.0%
1.5%
4.7%
4.6%
4.4%
4.3%
Adj. Net Income ²
$22
$16
$22
$9
$4
$18
$36
$41
$45
Adj. Net Income Margin
2.5%
1.8%
2.5%
1.0%
0.4%
2.1%
4.1%
4.6%
4.9%
Adj. Net Income Growth %
(28.5%)
39.5%
(60.2%)
(57.5%)
386.5%
102.3%
13.4%
8.7%
Maintenance Capital Expenditures
10
12
14
15
13
13
13
13
13
Growth Capital Expenditures
77
43
29
5
9
9
9
9
9
Total Capital Expenditures
$87
$56
$43
$20
$22
$22
$22
$22
$22
SUMMARY OF RESTAURANT GROUP FINANCIALS
The following
sets
forth
histori
cal
and
projected
financials
for
the
Restaurant
Group
received
from management on October 28
Notes:
1
2009E Adjusted EBITDA is adjusted for the following one-time items: transaction costs of $1.7mm, debt retirement expenses of $4.0mm and non-recurring gains of $32.7mm. The $32.7mm of non-
recurring gains include the following: lease termination of $7.5mm, excess insurance proceeds of $4.5mm, gain on asset sales of $1.3mm and gain on Goose debt buyback of $19.4mm
2
2006-2009E adjusted net income per Moelis estimates using a tax rate of 32.0% (per management)


[
19
]
SUMMARY OF GOOSE FINANCIALS
Summary of Historical and Projected FinancialsGoose
Fiscal Year Ended December 31,
($ in millions)
2006A
2007A
2008A
2009E
2010E
2011E
2012E
2013E
2014E
Revenues
$231
$266
$253
$225
$233
$246
$265
$275
$285
Revenue Growth %
3.1%
5.6%
7.9%
3.9%
3.6%
Adj. EBITDA ¹
$48
$63
$62
$35
$43
$49
$59
$64
$69
EBITDA Margin
20.7%
23.7%
24.5%
15.7%
18.5%
20.0%
22.3%
23.3%
24.2%
EBITDA Growth %
31.7%
(1.9%)
(42.8%)
21.8%
13.9%
20.4%
8.5%
7.8%
Depreciation & Amortization
12
18
21
23
33
34
35
36
37
Adj. EBIT ¹
$36
$45
$41
$12
$10
$15
$24
$28
$32
EBIT Margin
15.4%
17.0%
16.1%
5.5%
4.4%
6.1%
9.1%
10.2%
11.2%
EBIT Growth %
26.3%
(9.6%)
(69.8%)
(17.6%)
47.9%
60.8%
16.7%
13.6%
Adj. Net Income ²
$14
$14
$4
($18)
($21)
($17)
($11)
($7)
($3)
Adj. Net Income Margin
6.2%
5.1%
1.8%
nm
nm
nm
nm
nm
nm
Adj. Net Income Growth %
(5.0%)
(67.1%)
nm
nm
nm
nm
nm
nm
Maintenance Capital Expenditures
$10
$17
$11
$10
$8
$8
$8
$8
$8
Growth Capital Expenditures
83
48
50
97
0
0
0
0
0
Total Capital Expenditures
$93
$64
$61
$106
$8
$8
$8
$8
$8
Las Vegas Operating Statistics
ADR
$72.24
$73.92
$77.43
$83.67
$88.65
$93.61
Occupancy %
89.6%
79.8%
81.8%
85.8%
86.8%
88.7%
RevPAR
$64.74
$59.01
$63.35
$71.77
$76.91
$83.05
Laughlin Operating Statistics
ADR
$40.74
$42.00
$43.00
$43.74
$43.74
$43.74
Occupancy %
87.0%
87.0%
88.0%
88.9%
88.9%
88.9%
RevPAR
$35.44
$36.53
$37.83
$38.91
$38.91
$38.91
The
following
sets
forth
historical
and
projected
financials
for
Goose
received
from
management
on October 28
th
Notes:
1
2009E Adjusted EBITDA is adjusted for the following one-time item: swap adjustment income of $4.9mm
2
2006-2009E adjusted net income per Moelis estimates using a tax rate of 32.0% (per management)


[
20
]
Key Projections Assumptions
The following are management’s key assumptions for the financial projections
KEY PROJECTIONS ASSUMPTIONS
Construction of the Las Vegas new tower is completed in Q4 2009
EBITDA is projected to be $35mm in 2009 (15.7% margin), increasing to $43mm in 2010 (18.5% margin) and $69mm
by 2014 (24.2% margin)
The property’s room rates have been under pressure due to the recession and new supply coming to the Las Vegas
market (CityCenter)
Goose Financials
For presentation purposes, Adjusted EBITDA is shown which excludes certain non-recurring items and represents
the continuing operations of the business
Projections exclude
discontinued
/
closed
restaurant
operations;
assumed
to
be
sold
by 12/31/09 with no net cash
proceeds
Year-end cash is projected to be $27.6mm
Management estimates minimum cash for the Company to be $13mm ($3mm for the Restaurant Group and
$10mm Goose cage cash)
Cash and debt are pro forma for certain one-time payments (totaling $28mm) that are expected to be made in the
next
two quarters
Other
Restaurant Group:
2010-2014: Total capex of $22mm per year consisting of maintenance capex of $13mm and growth capex of
$9mm ($3mm per new unit)
Pre-opening expense of approximately $250,000 per new unit
Steady state capex for calculating the discounted cash flow terminal value: $31mm total, consisting of $12mm
maintenance, $9mm replacement for normal course store closings, $1-$2mm corporate / general and $8-$9mm
growth consistent with a 2% perpetuity cash flow growth rate
Goose:
Maintenance capex of $7.5mm through 2014, with an additional $6.0mm of growth capex projected into
perpetuity per management
Capital Expenditures
2010-2014 projections based on positive 1% same-store sales at existing restaurants and restaurant level profit
(“RLP”)
flow-through on incremental sales of 40% (2009 baseline)
Two new units in 2009 including one Rabbit and one Sabre
Three new units per year from 2010 to 2014 (all Sabre)
New units generate approximately $3.0 million of revenue and $450,000 of restaurant level profit per year (mid-year
convention used)
2009 financials include actuals through September; October-December '09 -5% SSS and Flat RLP for Sabre, -7% SSS
and
-15%
RLP
“flow-through”
all
other
concepts
Restaurant Group
Financials


[
21
]
Summary Valuation Analysis
SUMMARY
VALUATION
ANALYSIS—TOTAL
ENTERPRISE
VALUE
RESTAURANT GROUP
GOOSE
COMBINED
(6.5x)
(8.0x)
(6.5x)
(9.0x)
(6.0x)
(9.5x)
(4.5x)
(6.5x)
(6.0x)
(7.5x)
(5.0x)
(7.0x)
Implied TEV /
2010E EBITDA
Implied Share Price
TEV
(5.5x)
(6.0x)
(6.9x)
(5.0x)
(5.7x)
(5.3x)
(7.6x)
(7.5x)
-
1.6x
3.3x
4.9x
6.6x
8.2x
-
-
-
-
$14.37
$32.03
One-Day Prior to Announcement of Toucan’s Intention to
Negotiate a Transaction (9/8/09):  $10.86 (6.3x)
Offer:
$14.75 (6.7x)
Note: Multiple of 2010E EBITDA shown in parentheses except restaurant precedent transactions which are LTM
Precedent transactions shown net of estimated $45mm of change of
control payments to Toucan
Total Enterprise Value
(5.7x)
(6.5x)
($ in millions, except per share data)
Relevant Metrics
2010E
EBITDA:
$140mm
LTM
Adj.
EBITDA:
$136mm
0.0%-3.0% Free Cash Flow
Perpetuity Growth Rate
11.0%-12.0% WACC
2010E
EBITDA:
$43mm
2010E
EBITDA:
$43mm
0.0%-3.0% Free Cash Flow
Perpetuity Growth Rate
11.0%-13.5% WACC
Implied Multiples of 2010E 
EBITDA: $183mm
$960
$1,050
$910
$1,005
$1,035
$260
$280
$280
$700
$815
$630
$1,390
$1,365
$1,255
$1,095
$1,185
$410
$390
$345
$980
$1,020
$910
$0
$300
$600
$900
$1,200
$1,500
Discounted Cash Flow Analysis
Precedent Transactions ¹
Comparable Companies
Leveraged Buyout Analysis
Last Twelve Months
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies


[
22
]
Goose Separation Considerations
Goose debt is non-recourse to the Restaurant Group
However,
management
noted
the
following
negative
consequences
to
the
Restaurant
Group
if
the
Restaurant
Group
does
not
honor
the
debt
at
Goose,
including
but
not
limited
to
the
following:
Vendors withdrawing / cancelling services
Employee retention and ability to hire going forward
Negative
media
impact
particularly
in
Texas
where
the
media
would
focus
on
Lion,
not
Goose, and where Lion has a significant portion of its restaurant locations
Reduction of Restaurant Group revenue and EBITDA
Challenges in accessing the capital markets
Higher cost of debt and equity expected due to credibility issues
Lender overlap across the Restaurant Group and Goose
Impact on ability to sign new leases
Disruption to the business and management distraction
Legal costs and litigation risk
Management
noted
that
each
of
these
consequences
would
be
severe
in
the
short-term,
less
dramatic
in the long-term, but both were to difficult to quantify
GOOSE SEPARATION CONSIDERATIONS


[
23
]
Summary Valuation Analysis (cont.)
SUMMARY
VALUATION
ANALYSIS—EQUITY
VALUE
RESTAURANT GROUP
GOOSE
COMBINED
Equity Value
Equity
Value
assumes
Goose
debt
is
treated
as
consolidated
debt
for
equity
valuation
purposes
Price Per Share
-
-
-
-
$6.19
$12.29
$18.32
$24.22
$30.05
$35.80
$41.55
-
($ in millions, except per share data)
One-Day Prior to Announcement of Toucan’s Intention to
Negotiate a Transaction (9/8/09):  $10.86
Offer:
$14.75
Note:
Implied share prices shown next to equity value for the combined
company.  Comparable companies and precedent transactions are shown net of $28mm of required working capital
payments ($15mm allocated to the Restaurant Group and $13mm to Goose)
1  Precedent transactions shown net of estimated $45mm of
change
of control payments to Toucan
1
$235
$335
$150
$515
$430
($155)
($115)
($80)
$60 / $3.60
$25 / $1.50
($70) / ($4.75)
$70 / $4.25
$5 / $0.25
($230)
($220)
($220)
$540
$210 / $12.87
$120 / $7.50
$275 / $16.75
$380 / $23.00
$435 / $26.25
($400)
($300)
($200)
($100)
$0
$100
$200
$300
$400
$500
$600
$700
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Leveraged Buyout Analysis
Last Twelve Months
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies


[
24
]
Summary Valuation Analysis (cont.)
SUMMARY
VALUATION
ANALYSIS—EQUITY
VALUE
RESTAURANT GROUP
GOOSE
Equity Value
COMBINED
($ in millions, except per share data)
One-Day Prior to Announcement of Toucan’s Intention to
Negotiate a Transaction (9/8/09):  $10.86
Offer:
$14.75
Price Per Share
-
-
-
-
$6.19
$12.29
$18.32
$24.22
$30.05
$35.80
$41.55
-
Moelis has not deducted any breakage costs, penalties or other negative financial impacts to the Restaurant Group if Goose debt is
not honored.  Though management has indicated that Lion would incur such costs, they have not been able to quantify them
1
$0
$235
$335
$150
$515
$430
$235 / $14.50
$290 / $17.75
$150 / $9.25
$25 / $1.50
$60 / $3.60
$0
$0
$515 / $31.00
$495 / $29.75
$430 / $26.00
$120 / $7.50
$210 / $12.87
$540
($400)
($300)
($200)
($100)
$0
$100
$200
$300
$400
$500
$600
$700
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Leveraged Buyout Analysis
Last Twelve Months
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Discounted Cash Flow Analysis
Precedent Transactions
Comparable Companies
Note: 
Implied share prices shown next to equity value for the combined company.  Comparable companies and precedent transactions are shown net of $28mm of required working capital
payments ($15mm allocated to the Restaurant Group and $13mm to Goose)
1  Precedent transactions shown net of estimated $45mm of change of control payments to Toucan
Equity Value – assumes Goose debt is non-recourse to the Company


[
25
]
Market Data on Selected Restaurant Companies
Trading statistics as of October 30, 2009
SELECTED RESTAURANT TRADING COMPARABLES
Source: Capital IQ, Public filings. Management estimates
Notes:
1
Market value of equity plus net debt
2
Represents Adj. EV / EBITDAR. EV + (8*LTM Rent Expense) / EBITDAR
3
Forward multiples based on management projections
Lion’s restaurant operations comprise bar & grill, casual dining and upscale and fine dining concepts
The selected comparable companies below capture each of these sub-sectors within the restaurant industry as
well as multi-concept operators
Share Price
52 Week
Equity
Enterprise
Enterprise Value/LTM
Forward EV/EBITDA
Forward P/E
PEG Ratio
Growth
Adj. Debt /
Debt /
($ in millions, except per share data)
10/30/2009
High
Low
Value
Value
1
EBITDAR ²
EBITDA
EBIT
2009E
2010E
2009E
2010E
2009E
2010E
Rate
LTM EBITDAR
LTM EBITDA
Casual Dining
Brinker International Inc.
$12.64
$20.09
$3.88
$1,291.1
$1,925.8
5.7x
5.0x
8.4x
5.0x
5.1x
9.3x
9.2x
92.2%
91.4%
10.1%
3.4x
1.9x
Darden Restaurants, Inc.
30.31
41.21
13.21
4,234.5
5,960.6
6.6x
6.4x
9.2x
6.5x
6.2x
11.6x
10.5x
94.1%
84.9%
12.3%
2.7x
1.9x
O'Charley's
Inc.
7.01
11.41
1.19
145.6
260.3
5.2x
3.9x
14.8x
3.5x
3.5x
21.9x
21.7x
175.3%
173.6%
12.5%
3.9x
2.0x
Red Robin Gourmet Burgers Inc.
16.71
26.44
7.49
259.9
458.4
5.8x
4.8x
11.8x
4.7x
4.6x
10.5x
10.0x
75.0%
71.2%
14.0%
3.9x
2.2x
Ruby Tuesday, Inc.
6.66
9.38
0.85
429.5
810.1
6.4x
5.8x
12.1x
6.1x
6.1x
10.0x
9.7x
95.4%
92.5%
10.5%
4.0x
2.8x
Texas Roadhouse Inc.
9.47
12.75
4.09
664.4
768.6
6.9x
6.9x
11.1x
6.8x
6.3x
15.6x
14.4x
92.1%
85.0%
16.9%
2.1x
1.1x
Mean
$1,170.9
$1,697.3
6.1x
5.5x
11.2x
5.4x
5.3x
13.2x
12.6x
104.0%
99.8%
12.7%
3.3x
2.0x
Median
547.0
789.3
6.1x
5.4x
11.4x
5.5x
5.6x
11.0x
10.2x
93.1%
88.2%
12.4%
3.7x
2.0x
Upscale Casual Dining
BJ's Restaurants Inc.
$15.96
$18.14
$6.63
$428.9
$423.2
9.3x
9.9x
21.5x
9.6x
8.2x
31.1x
26.0x
126.0%
105.1%
24.7%
2.5x
0.2x
California Pizza Kitchen Inc.
12.99
17.44
5.24
313.7
350.0
6.5x
5.6x
13.8x
5.3x
5.0x
16.4x
15.2x
109.3%
101.3%
15.0%
3.5x
0.8x
The Cheesecake Factory Incorporated
18.18
21.01
4.96
1,093.6
1,161.3
7.4x
7.0x
13.8x
6.8x
6.7x
18.4x
16.6x
128.5%
116.2%
14.3%
3.6x
0.9x
PF Chang's China Bistro Inc.
29.19
36.98
14.51
683.0
820.5
6.7x
6.3x
14.4x
6.0x
5.9x
16.8x
15.5x
115.2%
106.5%
14.5%
2.9x
1.2x
Mean
$629.8
$688.8
7.5x
7.2x
15.9x
6.9x
6.4x
20.7x
18.3x
119.8%
107.3%
17.1%
3.1x
0.8x
Median
555.9
621.8
7.0x
6.6x
14.1x
6.4x
6.3x
17.6x
16.1x
120.6%
105.8%
14.8%
3.2x
0.8x
Fine Dining
McCormick & Schmick'sSeafood Restaurants, Inc.
$6.02
$9.45
$1.46
$89.3
$106.6
6.6x
4.8x
17.6x
4.6x
4.3x
22.2x
16.6x
153.2%
114.4%
14.5%
5.0x
1.1x
Morton's Restaurant Group Inc.
3.74
4.97
1.42
62.0
138.2
8.6x
9.7x
nm
7.6x
6.5x
24.9x
14.6x
178.1%
103.9%
14.0%
7.1x
5.4x
Ruth's Hospitality Group Inc.
3.11
4.74
0.70
75.2
221.0
7.0x
6.3x
12.4x
6.2x
6.3x
8.9x
8.8x
72.5%
71.6%
12.3%
5.8x
4.3x
Mean
$75.5
$155.2
7.4x
6.9x
15.0x
6.1x
5.7x
18.7x
13.3x
134.6%
96.7%
13.6%
6.0x
3.6x
Median
75.2
138.2
7.0x
6.3x
15.0x
6.2x
6.3x
22.2x
14.6x
153.2%
103.9%
14.0%
5.8x
4.3x
Overall Mean
$751.6
$1,031.1
6.8x
6.3x
13.4x
6.0x
5.7x
16.7x
14.5x
115.9%
101.4%
14.3%
3.9x
2.0x
Overall Median
428.9
458.4
6.6x
6.3x
13.1x
6.1x
6.1x
16.4x
14.6x
109.3%
101.3%
14.0%
3.6x
1.9x
Lion ³
$10.90
$12.87
$3.60
$177.0
$1,156.0
6.5x
6.2x
9.2x
6.7x
6.3x
na
na
na
na
12.0%
5.7x
5.2x
Lion at Offer ³
14.75
12.87
3.60
240.7
1,219.7
6.8x
6.5x
9.7x
7.0x
6.7x
na
na
na
na
12.0%
na
na


[
26
]
Selected Restaurant Precedent Transactions
SELECTED RESTAURANT PRECEDENT TRANSACTIONS
Source: Company Filings, Capital IQ, Wall Street Research
Note: Statistics are based on publicly disclosed information
Date
TEV
TEV /
Announced
Target
Acquirer
($mm)
LTM EBITDA
8/16/07
RARE Hospitality
Darden
$1,368
11.5x
7/16/07
Applebee's
IHOP Corp.
2,040
9.9x
6/17/07
Friendly’s
Sun Capital
339
8.1x
5/7/07
Smith & Wollensky
Bunker Hill Capital
99
10.4x
11/6/06
Outback
Bain & Catterton
3,430
10.3x
10/30/06
Logan's
BRS, Black Canyon
461
9.5x
10/9/06
Joe’s Crab Shack
JH Whitney
192
na
8/28/06
Cheddar’s
Oak & Catterton
na
na
8/18/06
Lone Star
Lone Star Funds
565
11.4x
8/10/06
Real Mex
Sun Capital
359
6.3x
7/25/06
Ryan's
Buffets
861
8.8x
6/5/06
Bravo
BRS & Castle Harlan
na
na
1/10/06
Uno Restaurant
Centre Partners
na
na
12/12/05
Fox & Hound
Newcastle Partners
171
7.7x
12/9/05
Dave & Buster's
Wellspring Capital
375
6.2x
9/16/05
Claim Jumper
Leonard Green
na
na
1/20/05
Charlie Brown’s
Trimaran
140
na
6/14/04
Mimi's Cafe
Bob Evan's
182
9.9x
Overall Mean
$756
9.2x
Overall Median
367
9.7x
Most Comparable Mean
$274
6.7x
Most Comparable Median
276
6.3x
Lion @ Offer ($14.75)
Toucan
$1,220
6.5x
For Reference:
9/30/02
Saltgrass Steak House
Landry's Restaurants
$75
5.6x
2/19/02
C.A. Muer
Landry's Restaurants
28
na
9/26/00
Rainforest Cafe
Landry's Restaurants
58
2.4x
Moelis considered the following in determining the most comparable restaurant transactions
Focus on casual dining transaction over the past five years
Dismissed transactions with significant real estate holdings
Highlighted regional casual diners or mixed entertainment/restaurant businesses


[
27
]
Market Data on Selected Gaming Companies
Net Debt /
Share¹
52 Week
Equity
Enterprise
TEV / EBITDA
Price / Earnings
LT Growth
2009E
($US millions, except per share data)
Price
High
Low
Value
Value
CY09E
CY10E
CY11E
CY09E
CY10E
CY11E
Rate
EBITDA
Mid-Cap (Major Markets²)
Boyd Gaming Corp
$7.36
$12.86
$2.81
$635
$3,313
8.4x
8.2x
8.0x
17.8x
14.5x
12.1x
16.0%
6.8x
Mean
8.4x
8.2x
8.0x
17.8x
14.5x
12.1x
16.0%
6.8x
Mid-Cap (Other Markets)
Penn National Gaming
$25.13
$35.18
$13.68
$1,992
$4,274
7.4x
6.7x
6.5x
20.9x
17.7x
15.9x
na
2.8x
Ameristar Casinos Inc.
14.72
23.00
4.64
862
2,440
7.1x
6.7x
6.7x
11.7x
12.5x
10.8x
10.0%
4.6x
Isle of Capri Casinos Inc.
7.75
14.48
2.04
246
1,436
7.3x
7.2x
7.0x
42.6x
14.4x
16.0x
na
6.1x
Pinnacle Entertainment Inc.
8.45
13.99
2.74
508
1,379
7.2x
6.4x
5.6x
nm
nm
22.2x
na
4.5x
Mean
7.3x
6.7x
6.5x
25.1x
14.9x
16.2x
10.0%
4.5x
Median
7.3x
6.7x
6.6x
20.9x
14.4x
15.9x
10.0%
4.6x
Single Asset
Monarch Casino & Resort Inc.
$6.94
$12.20
$3.80
$112
$153
6.8x
6.4x
5.7x
20.2x
15.8x
11.1x
na
1.8x
Mean
6.8x
6.4x
5.7x
20.2x
15.8x
11.1x
na
1.8x
Overall Mean
7.4x
6.9x
6.6x
22.6x
15.0x
14.7x
13.0%
4.4x
Overall Median
7.3x
6.7x
6.6x
20.2x
14.5x
14.0x
13.0%
4.6x
Lion ³
$10.90
$12.87
$3.60
$177
$1,156
6.7x
6.3x
na
na
na
na
12.0%
5.4x
Lion at Offer ³
14.75
12.87
3.60
241
1,220
7.0x
6.7x
na
na
na
na
12.0%
na
Trading statistics as of October 30, 2009
SELECTED GAMING TRADING COMPARABLES
Source: Capital IQ, Public filings, Management estimates
Notes:
1
Share prices as of October 30, 2009
2
Major markets defined as companies receiving a majority of property EBITDA in Atlantic City, NJ and Las Vegas, NV
3
Forward multiples based on management projections
Goose
consists
of
two
assets
both
in
Nevada
one
in
Downtown
Las
Vegas
and
the
other
in
Laughlin
As such, Moelis considered small / mid cap publicly traded operators as well as Monarch Casino & Resort, which is a
single asset property (in Reno, Nevada)


[
28
]
Selected Gaming Precedent Transactions
SELECTED GAMING PRECEDENT TRANSACTIONS
Source: Company Filings, Capital IQ, Wall Street Research, Management estimates
Notes:  Mean and medians exclude withdrawn transactions
1
Forward EBITDA estimate for year of transaction if deal took place in first half of year; forward EBITDA for next calendar year if deal took place in second half of the year.  Based on public information
2
Offer withdrawn in July 2008; multiple based on 2009E EBITDA; excluded from mean and median
3
Full acquisition offer withdrawn in March 2009; instead Crown acquired a 24.5% stake in Cannery
4
Multiple based on 2006E EBITDA
5
Multiple based on management estimates
Moelis focused on recent gaming
operator transactions with an
emphasis on the following:
Golden Nugget purchase
multiples
Assets in or around the Las
Vegas Strip and/or locals
markets
Small / mid cap gaming
operators
Moelis focused less on transactions
completed during 2006-July 2007
Inflated asset values due to
financing and real estate
environment
Recent Treasure Island transaction is
a useful recent benchmark
Las Vegas Strip asset (vs.
downtown location for Goose)
Multiple may be inflated due to
tax attributes of the transaction
Date
TEV
TEV /
Announced
Target
Acquirer
($mm)
EBITDA ¹
August
2007
-
Present
12/15/08
Treasure Island
Ruffin Acquisition
$775
8.2x
9/23/08
Tropicana Atlantic City
Icahn
200
na
12/11/07
Cannery Casino Resorts ²
Crown Limited
1,752
10.2x
Mean
8.2x
2006 -
July 2007
6/15/07
Penn National Gaming ³
Fortress / Centerbridge
$8,894
13.0x
4/23/07
American Casino & Ent. Prop.
Whitehall Street Fund
1,487
na
4/4/07
Gateway Casinos
PBL Ltd. / Macquarie
785
15.1x
4/3/07
Resorts East Chicago
Ameristar
675
10.5x
12/19/06
Harrah’s
Apollo / TPG
27,812
10.1x
12/4/06
Station Casinos
Fertitta
Colony Partners
8,676
13.5x
5/19/06
Aztar Corp.
Columbia Ent.
2,707
11.8x
3/20/06
Kerzner
International Ltd.
Investor Group
3,800
15.8x
Mean
12.8x
Prior to 2006
2/4/05
Golden
Nugget
Landry’s Restaurants
$318
9.1x
11/3/04
Argosy Gaming
Penn National Gaming
2,150
7.7x
9/27/04
Harrah’s / Caesars Assets
Colony Capital
1,240
8.1x
7/15/04
Caesars
Harrah’s
10,224
8.0x
6/4/04
Mandalay Resort
MGM MIRAGE
7,692
10.0x
2/9/04
Coast Casinos
Boyd Gaming
1,253
7.4x
9/11/03
Horseshoe Gaming
Harrah’s
1,388
7.2x
6/26/03
Golden Nugget
Poster Financial Group
215
6.7x
2/22/00
Mirage Resorts
MGM Grand
6,354
9.9x
Mean
8.2x
Overall Mean
9.9x
Overall Median
9.5x
Lion
@
Offer
($14.75)
Toucan
6.7x
5
4


[
29
]
Discounted
Cash
Flow
AnalysisAssumptions
Moelis valued the Lion Restaurant Group and Goose separately
Separate discount rates were used for each
Given the significant leverage on Goose, two methods to calculate the discount rate were employed to derive the discounted cash flow
valuation for consolidated Lion:
Low Discount Rate:
Reflects a target capital structure derived from the comparable
companies
11.0% discount rate for the Restaurant Group
11.0% discount rate for Goose
High Discount Rate:
Reflects Lion’s current capital structure
12.0% discount rate for the Restaurant Group
13.5% discount rate for Goose
The discount rates are higher because the presumed debt to cap and cost of debt is higher than comparable companies
Please see Appendix A for additional discount rate detail
Due to Goose’s leverage, Goose is estimated to have a negative equity value
Though Goose debt is non-recourse to Lion, Goose is perceived to have an overhang on the stock as the entity continues to receive
cash infusions from Lion
Lion’s consolidated valuation is shown two ways: (i) assuming Goose debt is consolidated and (ii) assuming Goose debt is not
consolidated
If Goose’s equity value is negative but is included as zero in the combined valuation, the debt has been adjusted to match the
total enterprise value
The discounted cash flow analysis also assumes the following:
Valuation date as of 12/31/09
2.0% perpetuity growth rate for the Restaurant Group and Goose
Assumes
depreciation
and
steady
state
capital
expenditures
are
equal
in
perpetuity
steady
state
capital
expenditures
were
provided by management
39.0% effective tax rate (35.0% Federal + 4.0% State)
NOLs and special tax credits / benefits have not been separately
valued due to the Company’s projected lack of positive net income in
the next several years ($49mm of NOLs and $36mm of tax credits as of 9/30/09)
The
following
sets
forth
assumptions
used
in
the
discounted
cash
flow
analysis
for
Lion
DISCOUNTED
CASH
FLOW
ANALYSIS—ASSUMPTIONS


[
30
]
Assumes Goose Debt is Consolidated
Assumes Goose Debt is Not Consolidated
Discount Rate Based on
Avg. of
Discount Rate Based on
Avg. of
($ in millions, except per share data)
Statistic
Comparables
Company
High / Low
Comparables
Company
High / Low
Restaurant Group
11.0%
12.0%
11.0%
12.0%
Total Enterprise Value
$912
$827
$870
$912
$827
$870
Less: Debt
(477)
(477)
(477)
(477)
(477)
(477)
Plus: Cash
15
15
15
15
15
15
Total Equity Value
$450
$364
$407
$450
$364
$407
TEV / 2009E Adj. EBITDA
$138
6.6x
6.0x
6.3x
6.6x
6.0x
6.3x
TEV / 2010E Adj. EBITDA
140
6.5x
5.9x
6.2x
6.5x
5.9x
6.2x
Goose
11.0%
13.5%
11.0%
13.5%
Total Enterprise Value
$381
$298
$339
$381
$298
$339
Less: Debt
(488)
(488)
(488)
(381)
(298)
(339)
Plus: Cash
0
0
0
0
0
0
Total Equity Value
($108)
($190)
($149)
$0
$0
$0
TEV / 2009E Adj. EBITDA
$35
10.8x
8.4x
9.6x
10.8x
8.4x
9.6x
TEV / 2010E Adj. EBITDA
43
8.8x
6.9x
7.9x
8.8x
6.9x
7.9x
Total Enterprise Value - Consolidated
$1,293
$1,125
$1,209
$1,293
$1,125
$1,209
Less: Debt
(966)
(966)
(966)
(858)
(775)
(817)
Plus: Cash
15
15
15
15
15
15
Total Equity Value
$342
$174
$258
$450
$364
$407
Implied Value Per Diluted Share
$20.80
$10.73
$15.80
$27.15
$22.11
$24.63
TEV / 2009E Adj. EBITDA
$174
7.4x
6.5x
7.0x
7.4x
6.5x
7.0x
TEV / 2010E Adj. EBITDA
183
7.1x
6.2x
6.6x
7.1x
6.2x
6.6x
Discounted
Cash
Flow
AnalysisSummary
The following sets forth a summary of the discounted cash flow analysis for Lion
DISCOUNTED CASH FLOW ANALYSIS—SUMMARY
Note: 
$28mm of required working capital payments are projected to be paid in Q1 2010.  Excludes potential additional value from corporate and non-strategic real estate –
additional real estate analysis is shown in the Appendix


[
31
]
Discounted
Cash
Flow
AnalysisConsolidated
The following sets forth discounted cash flow sensitivity analysis for Lion
TOTAL ENTERPRISE VALUE
IMPLIED TEV / 2010E EBITDA MULTIPLE
Rest.
Goose
Perpetuity Growth Rate
WACC
WACC
0.0%
1.0%
2.0%
3.0%
4.0%
10.5%
10.5%
$1,186
$1,266
$1,365
$1,491
$1,655
11.0%
11.5%
1,120
1,189
1,273
1,378
1,512
11.5%
12.5%
1,061
1,121
1,194
1,283
1,395
12.0%
13.5%
1,009
1,062
1,125
1,202
1,297
12.5%
14.5%
962
1,009
1,065
1,131
1,213
11.0%
11.0%
$1,134
$1,206
$1,293
$1,402
$1,542
12.0%
13.5%
1,009
1,062
1,125
1,202
1,297
Rest.
Goose
Perpetuity Growth Rate
WACC
WACC
0.0%
1.0%
2.0%
3.0%
4.0%
10.5%
10.5%
6.5x
6.9x
7.5x
8.2x
9.1x
11.0%
11.5%
6.1x
6.5x
7.0x
7.5x
8.3x
11.5%
12.5%
5.8x
6.1x
6.5x
7.0x
7.6x
12.0%
13.5%
5.5x
5.8x
6.2x
6.6x
7.1x
12.5%
14.5%
5.3x
5.5x
5.8x
6.2x
6.6x
11.0%
11.0%
6.2x
6.6x
7.1x
7.7x
8.4x
12.0%
13.5%
5.5x
5.8x
6.2x
6.6x
7.1x
($ in millions, except per share data)
($ in millions, except per share data)
PRICE PER SHARE —
GOOSE DEBT IS CONSOLIDATED
Rest.
Goose
Perpetuity Growth Rate
WACC
WACC
0.0%
1.0%
2.0%
3.0%
4.0%
10.5%
10.5%
$14.43
$19.23
$25.06
$32.33
$41.76
11.0%
11.5%
10.41
14.58
19.62
25.80
33.57
11.5%
12.5%
6.83
10.50
14.89
20.21
26.82
12.0%
13.5%
3.61
6.88
10.73
15.36
21.02
12.5%
14.5%
0.71
3.61
7.04
11.09
16.02
11.0%
11.0%
$11.29
$15.60
$20.80
$27.22
$35.28
12.0%
13.5%
3.61
6.88
10.73
15.36
21.02
PRICE PER SHARE —
GOOSE DEBT IS NOT CONSOLIDATED
Rest.
Goose
Perpetuity Growth Rate
WACC
WACC
0.0%
1.0%
2.0%
3.0%
4.0%
10.5%
10.5%
$22.76
$26.05
$30.05
$35.07
$41.76
11.0%
11.5%
20.64
23.57
27.15
31.53
37.15
11.5%
12.5%
18.70
21.33
24.50
28.40
33.25
12.0%
13.5%
16.91
19.29
22.11
25.57
29.83
12.5%
14.5%
15.24
17.41
19.95
23.02
26.80
11.0%
11.0%
$20.64
$23.57
$27.15
$31.53
$37.15
12.0%
13.5%
16.91
19.29
22.11
25.57
29.83
($ in millions, except per share data)
($ in millions, except per share data)
IMPLIED TERMINAL VALUE EBITDA MULTIPLE
Rest.
Goose
Perpetuity Growth Rate
WACC
WACC
0.0%
1.0%
2.0%
3.0%
4.0%
10.5%
10.5%
4.9x
5.4x
6.1x
7.0x
8.2x
11.0%
11.5%
4.6x
5.1x
5.7x
6.5x
7.4x
11.5%
12.5%
4.3x
4.8x
5.3x
6.0x
6.8x
12.0%
13.5%
4.1x
4.5x
5.0x
5.6x
6.3x
12.5%
14.5%
3.9x
4.3x
4.7x
5.3x
5.9x
11.0%
11.0%
4.7x
5.2x
5.8x
6.6x
7.6x
12.0%
13.5%
4.1x
4.5x
5.0x
5.6x
6.3x
($ in millions, except per share data)


[
32
]
Discounted
Cash
Flow
AnalysisConsolidated
(cont.)
TOTAL ENTERPRISE VALUE
Rest.
Goose WACC
WACC
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
10.5%
$1,365
$1,343
$1,323
$1,305
$1,289
$1,274
$1,261
$1,248
$1,237
11.0%
1,315
1,293
1,273
1,255
1,239
1,224
1,211
1,198
1,187
11.5%
1,270
1,248
1,228
1,210
1,194
1,179
1,166
1,153
1,142
12.0%
1,230
1,207
1,188
1,170
1,153
1,139
1,125
1,113
1,101
12.5%
1,193
1,171
1,151
1,133
1,117
1,102
1,088
1,076
1,065
13.0%
1,160
1,138
1,118
1,100
1,083
1,069
1,055
1,043
1,031
13.5%
1,129
1,107
1,087
1,069
1,053
1,038
1,025
1,012
1,001
14.0%
1,101
1,079
1,059
1,041
1,025
1,010
997
984
973
14.5%
1,076
1,053
1,034
1,016
999
985
971
959
947
Assumes 2.0% free cash flow perpetuity growth rate
IMPLIED TEV / 2010E EBITDA MULTIPLE
Rest.
Goose WACC
WACC
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
10.5%
7.5x
7.3x
7.2x
7.1x
7.1x
7.0x
6.9x
6.8x
6.8x
11.0%
7.2x
7.1x
7.0x
6.9x
6.8x
6.7x
6.6x
6.6x
6.5x
11.5%
6.9x
6.8x
6.7x
6.6x
6.5x
6.5x
6.4x
6.3x
6.2x
12.0%
6.7x
6.6x
6.5x
6.4x
6.3x
6.2x
6.2x
6.1x
6.0x
12.5%
6.5x
6.4x
6.3x
6.2x
6.1x
6.0x
6.0x
5.9x
5.8x
13.0%
6.3x
6.2x
6.1x
6.0x
5.9x
5.8x
5.8x
5.7x
5.6x
13.5%
6.2x
6.1x
5.9x
5.8x
5.8x
5.7x
5.6x
5.5x
5.5x
14.0%
6.0x
5.9x
5.8x
5.7x
5.6x
5.5x
5.5x
5.4x
5.3x
14.5%
5.9x
5.8x
5.7x
5.6x
5.5x
5.4x
5.3x
5.2x
5.2x
The following sets forth discounted cash flow sensitivity analysis for Lion
($ in millions, except per share data)
($ in millions, except per share data)


[
33
]
Discounted
Cash
Flow
AnalysisConsolidated
(cont.)
PRICE PER SHARE —
GOOSE DEBT IS NOT CONSOLIDATED
PRICE PER SHARE —
GOOSE DEBT IS CONSOLIDATED
Rest.
Goose WACC
WACC
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
10.5%
$25.06
$23.76
$22.58
$21.53
$20.57
$19.70
$18.90
$18.17
$17.48
11.0%
22.10
20.80
19.62
18.57
17.60
16.71
15.89
15.14
14.45
11.5%
19.45
18.14
16.95
15.87
14.89
13.99
13.17
12.42
11.73
12.0%
17.04
15.71
14.50
13.42
12.44
11.54
10.73
9.97
9.28
12.5%
14.83
13.49
12.29
11.20
10.22
9.33
8.51
7.74
7.04
13.0%
12.82
11.48
10.27
9.19
8.20
7.29
6.45
5.68
4.97
13.5%
10.98
9.63
8.43
7.33
6.32
5.41
4.57
3.80
3.09
14.0%
9.29
7.93
6.71
5.60
4.59
3.68
2.84
2.07
1.36
14.5%
7.72
6.35
5.12
4.01
3.00
2.08
1.25
0.48
(0.23)
Rest.
Goose WACC
WACC
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
10.5%
$30.05
$30.05
$30.05
$30.05
$30.05
$30.05
$30.05
$30.05
$30.05
11.0%
27.15
27.15
27.15
27.15
27.15
27.15
27.15
27.15
27.15
11.5%
24.50
24.50
24.50
24.50
24.50
24.50
24.50
24.50
24.50
12.0%
22.11
22.11
22.11
22.11
22.11
22.11
22.11
22.11
22.11
12.5%
19.95
19.95
19.95
19.95
19.95
19.95
19.95
19.95
19.95
13.0%
17.99
17.99
17.99
17.99
17.99
17.99
17.99
17.99
17.99
13.5%
16.15
16.15
16.15
16.15
16.15
16.15
16.15
16.15
16.15
14.0%
14.47
14.47
14.47
14.47
14.47
14.47
14.47
14.47
14.47
14.5%
12.91
12.91
12.91
12.91
12.91
12.91
12.91
12.91
12.91
Assumes 2.0% free cash flow perpetuity growth rate
The following sets forth discounted cash flow sensitivity analysis for Lion
($ in millions, except per share data)
($ in millions, except per share data)


[
34
]
Discounted
Cash
Flow
AnalysisConsolidated
(cont.)
IMPLIED TERMINAL VALUE EBITDA MULTIPLE
Rest.
Goose WACC
WACC
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
10.5%
6.1x
6.0x
5.9x
5.9x
5.8x
5.7x
5.7x
5.6x
5.5x
11.0%
5.9x
5.8x
5.7x
5.6x
5.5x
5.5x
5.4x
5.4x
5.3x
11.5%
5.7x
5.6x
5.5x
5.4x
5.3x
5.3x
5.2x
5.1x
5.1x
12.0%
5.5x
5.4x
5.3x
5.2x
5.1x
5.1x
5.0x
5.0x
4.9x
12.5%
5.3x
5.2x
5.1x
5.0x
5.0x
4.9x
4.8x
4.8x
4.7x
13.0%
5.2x
5.1x
5.0x
4.9x
4.8x
4.7x
4.7x
4.6x
4.6x
13.5%
5.0x
4.9x
4.8x
4.7x
4.7x
4.6x
4.5x
4.5x
4.4x
14.0%
4.9x
4.8x
4.7x
4.6x
4.5x
4.5x
4.4x
4.3x
4.3x
14.5%
4.8x
4.7x
4.6x
4.5x
4.4x
4.3x
4.3x
4.2x
4.2x
Assumes 2.0% free cash flow perpetuity growth rate
The following sets forth discounted cash flow sensitivity analysis for Lion
($ in millions, except per share data)


[
35
]
Target Capital Structure (Low Discount Rate):
Discounted
Cash
Flow
AnalysisRestaurant
Group
Fiscal Year Ended December 31,
Terminal
($ in millions, except per share data)
2010E
2011E
2012E
2013E
2014E
FCF ¹
Unlevered Free Cash Flow
EBITDA
$140
$144
$149
$154
$159
$159
Less: Depreciation & Amortization
(50)
(51)
(51)
(52)
(52)
(31)
EBIT
$90
$94
$98
$103
$107
$128
Less: Cash Taxes
(35)
(37)
(38)
(40)
(42)
(50)
EBIAT
$55
$57
$60
$63
$65
$78
Plus: Depreciation & Amortization
50
51
51
52
52
31
Plus: Stock Based Compensation
4
4
4
4
4
4
Less: Change in Net Working Capital
(6)
0
1
1
1
1
Maintenance Capital Expenditures
(13)
(13)
(13)
(13)
(13)
(22)
Growth Capital Expenditures
(9)
(9)
(9)
(9)
(9)
(9)
Unlevered Free Cash Flow
$80
$90
$94
$97
$100
$83
Terminal Value (11.0% Discount Rate / 2.0% Perpetuity Growth Rate)
$941
Discounted Unlevered Free Cash Flow and Terminal Value
$75
$77
$72
$67
$63
$558
Total Enterprise Value
$912
Less: Debt
(477)
Plus: Excess Cash
15
Equity Value
$450
Statistic
Multiple
Total Enterprise Value / 2009E EBITDA
$138
6.6x
Total Enterprise Value / 2010E EBITDA
140
6.5x
DISCOUNTED CASH FLOW ANALYSIS—RESTAURANT GROUP
The following sets forth discounted cash flow analysis for the Restaurant Group
Note:
1
Terminal free cash flow assumes depreciation and steady state capital expenditures are equal in perpetuity; steady state capital
expenditures were provided by management


[
36
]
Current Capital Structure (High Discount Rate):
Discounted
Cash
Flow
AnalysisRestaurant
Group
Fiscal Year Ended December 31,
Terminal
($ in millions, except per share data)
2010E
2011E
2012E
2013E
2014E
FCF ¹
Unlevered Free Cash Flow
EBITDA
$140
$144
$149
$154
$159
$159
Less: Depreciation & Amortization
(50)
(51)
(51)
(52)
(52)
(31)
EBIT
$90
$94
$98
$103
$107
$128
Less: Cash Taxes
(35)
(37)
(38)
(40)
(42)
(50)
EBIAT
$55
$57
$60
$63
$65
$78
Plus: Depreciation & Amortization
50
51
51
52
52
31
Plus: Stock Based Compensation
4
4
4
4
4
4
Less: Change in Net Working Capital
(6)
0
1
1
1
1
Maintenance Capital Expenditures
(13)
(13)
(13)
(13)
(13)
(22)
Growth Capital Expenditures
(9)
(9)
(9)
(9)
(9)
(9)
Unlevered Free Cash Flow
$80
$90
$94
$97
$100
$83
Terminal Value (12.0% Discount Rate / 2.0% Perpetuity Growth Rate)
$847
Discounted Unlevered Free Cash Flow and Terminal Value
$75
$76
$71
$65
$60
$480
Total Enterprise Value
$827
Less: Debt
(477)
Plus: Excess Cash
15
Equity Value
$364
Statistic
Multiple
Total Enterprise Value / 2009E EBITDA
$138
6.0x
Total Enterprise Value / 2010E EBITDA
140
5.9x
DISCOUNTED CASH FLOW ANALYSIS—RESTAURANT GROUP
The following sets forth discounted cash flow analysis for the Restaurant Group
Note:
1
Terminal free cash flow assumes depreciation and steady state capital expenditures are equal in perpetuity; steady state capital
expenditures were provided by management


[
37
]
Discounted
Cash
Flow
AnalysisRestaurant
Group
The following sets forth discounted cash flow sensitivity analysis for the Restaurant Group
TOTAL ENTERPRISE VALUE
IMPLIED TEV / 2010E EBITDA MULTIPLE
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
$838
$894
$963
$1,050
$1,164
$1,320
11.0%
802
852
912
988
1,086
1,216
11.5%
769
814
867
934
1,018
1,128
12.0%
739
779
827
886
959
1,053
12.5%
711
747
790
842
906
988
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
6.0x
6.4x
6.9x
7.5x
8.3x
9.4x
11.0%
5.7x
6.1x
6.5x
7.1x
7.8x
8.7x
11.5%
5.5x
5.8x
6.2x
6.7x
7.3x
8.1x
12.0%
5.3x
5.6x
5.9x
6.3x
6.9x
7.5x
12.5%
5.1x
5.4x
5.7x
6.0x
6.5x
7.1x
($ in millions, except per share data)
($ in millions, except per share data)
IMPLIED TERMINAL VALUE EBITDA MULTIPLE
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
4.9x
5.4x
6.1x
7.0x
8.2x
9.8x
11.0%
4.7x
5.2x
5.8x
6.6x
7.6x
9.0x
11.5%
4.4x
4.9x
5.5x
6.2x
7.1x
8.3x
12.0%
4.3x
4.7x
5.2x
5.9x
6.7x
7.7x
12.5%
4.1x
4.5x
5.0x
5.5x
6.3x
7.2x
($ in millions, except per share data)


[
38
]
Target Capital Structure (Low Discount Rate):
Discounted
Cash
Flow
AnalysisGoose
DISCOUNTED CASH FLOW ANALYSIS—GOOSE
Fiscal Year Ended December 31,
Terminal
($ in millions, except per share data)
2010E
2011E
2012E
2013E
2014E
FCF ¹
Unlevered Free Cash Flow
EBITDA
$43
$49
$59
$64
$69
$69
Less: Depreciation & Amortization
(33)
(34)
(35)
(36)
(37)
(14)
EBIT
$10
$15
$24
$28
$32
$56
Less: Cash Taxes
(4)
(6)
(9)
(11)
(12)
(22)
EBIAT
$6
$9
$15
$17
$19
$34
Plus: Depreciation & Amortization
33
34
35
36
37
14
Less: Changes in Net Working Capital
(16)
(0)
3
2
2
2
Maintenance Capital Expenditures
(8)
(8)
(8)
(8)
(8)
(8)
Growth Capital Expenditures
0
0
0
0
0
(6)
Unlevered Free Cash Flow
$16
$35
$45
$48
$51
$36
Terminal Value (11.0% Discount Rate / 2.0% Perpetuity Growth Rate)
$409
Discounted Unlevered Free Cash Flow and Terminal Value
$14
$29
$33
$32
$30
$243
Total Enterprise Value
$381
Less: Debt
(488)
Plus: Cash
0
Implied Equity Value
($108)
Statistic
Multiple
Total Enterprise Value / 2009E EBITDA
$35
10.8x
Total Enterprise Value / 2010E EBITDA
43
8.8x
The following sets forth discounted cash flow analysis for Goose
Note:
1
Terminal free cash flow assumes depreciation and steady state capital expenditures are equal in perpetuity; steady state capital
expenditures were provided by management


[
39
]
Current Capital Structure (High Discount Rate):
Discounted
Cash
Flow
AnalysisGoose
DISCOUNTED CASH FLOW ANALYSIS—GOOSE
Fiscal Year Ended December 31,
Terminal
($ in millions, except per share data)
2010E
2011E
2012E
2013E
2014E
FCF ¹
Unlevered Free Cash Flow
EBITDA
$43
$49
$59
$64
$69
$69
Less: Depreciation & Amortization
(33)
(34)
(35)
(36)
(37)
(14)
EBIT
$10
$15
$24
$28
$32
$56
Less: Cash Taxes
(4)
(6)
(9)
(11)
(12)
(22)
EBIAT
$6
$9
$15
$17
$19
$34
Plus: Depreciation & Amortization
33
34
35
36
37
14
Less: Changes in Net Working Capital
(16)
(0)
3
2
2
2
Maintenance Capital Expenditures
(8)
(8)
(8)
(8)
(8)
(8)
Growth Capital Expenditures
0
0
0
0
0
(6)
Unlevered Free Cash Flow
$16
$35
$45
$48
$51
$36
Terminal Value (13.5% Discount Rate / 2.0% Perpetuity Growth Rate)
$320
Discounted Unlevered Free Cash Flow and Terminal Value
$14
$27
$31
$29
$27
$170
Total Enterprise Value
$298
Less: Debt
(488)
Plus: Cash
0
Implied Equity Value
($190)
Statistic
Multiple
Total Enterprise Value / 2009E EBITDA
$35
8.4x
Total Enterprise Value / 2010E EBITDA
43
6.9x
The following sets forth discounted cash flow analysis for Goose
Note:
1
Terminal free cash flow assumes depreciation and steady state capital expenditures are equal in perpetuity; steady state capital
expenditures were provided by management


[
40
]
Discounted
Cash
Flow
AnalysisGoose
The following sets forth discounted cash flow sensitivity analysis for Goose
TOTAL ENTERPRISE VALUE
IMPLIED TEV / 2010E EBITDA MULTIPLE
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
$348
$373
$403
$441
$490
$558
11.5%
318
337
361
390
426
474
12.5%
292
308
326
349
377
412
13.5%
270
283
298
316
338
365
14.5%
251
262
274
289
306
327
11.0%
332
354
381
414
456
513
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
8.1x
8.6x
9.3x
10.2x
11.4x
12.9x
11.5%
7.4x
7.8x
8.4x
9.0x
9.9x
11.0x
12.5%
6.8x
7.1x
7.6x
8.1x
8.7x
9.6x
13.5%
6.3x
6.6x
6.9x
7.3x
7.8x
8.5x
14.5%
5.8x
6.1x
6.4x
6.7x
7.1x
7.6x
11.0%
7.7x
8.2x
8.8x
9.6x
10.6x
11.9x
($ in millions, except per share data)
($ in millions, except per share data)
IMPLIED TERMINAL VALUE EBITDA MULTIPLE
Discount
Perpetuity Growth Rate
Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
10.5%
4.9x
5.4x
6.1x
7.0x
8.2x
9.8x
11.5%
4.5x
4.9x
5.5x
6.2x
7.1x
8.3x
12.5%
4.1x
4.5x
5.0x
5.5x
6.3x
7.2x
13.5%
3.8x
4.1x
4.5x
5.0x
5.6x
6.3x
14.5%
3.5x
3.8x
4.2x
4.6x
5.1x
5.7x
11.0%
4.7x
5.2x
5.8x
6.6x
7.6x
9.0x
($ in millions, except per share data)


[
41
]
Illustrative Leveraged Buyout Analysis
Transaction Summary
VALUATION
PRO FORMA CAPITALIZATION
SOURCES
USES
Notes
1
Debt as of December 31, 2009.  Adjusted for required working capital payments of approximately $15mm for the Restaurant Group
2
Cash as of December 31, 2009 of $27.6mm is shown net of minimum cash for Lion of $13mm (includes $10mm of Goose cage cash) and $13mm of required Goose working capital /
construction payments
3
Assumes 2.0% LIBOR floor on new revolver and new term loan
Financing assumptions based on Moelis estimates
($ in millions, except per share data)
Share Price 1-Day Prior to Announcement (9/8/09)
$10.86
Purchase Premium
0.0%
Purchase Price Per Share
$10.86
Fully Diluted Shares Outstanding
16.240
Purchase Price of Equity
$176
Plus: Existing Debt ¹
981
Less: Excess Cash ²
(2)
Purchase Total Enterprise Value
$1,155
Statistic
Multiple
Purchase TEV / 2009E Adj. EBITDA
$174
6.7x
Purchase TEV / 2010E Adj. EBITDA
183
6.3x
Current
Pro Forma
($ in millions)
Amount
Leverage
Adj.
Amount
Leverage
Cash
$28
(2)
$26
Restaurant Debt
$477
2.7x
(477)
$0
0.0x
Goose Debt
488
5.6x
(488)
0
0.0x
Total Existing Debt
$966
5.6x
$0
0.0x
New Revolver
0
5.6x
0
0
0.0x
New Term Loan
0
5.6x
285
285
1.6x