NewYorkChicagoLosAngelesLondonParisMilanMunichTokyoSaoPauloSingaporeSydneyJohannesburgShanghaiIntroductiontoEVAManagementSystemNewYorkChicagoLosA1ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?2ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?3EVA?isEarningsAftertheCostofCapital Revenues- OperatingCosts- Depreciation-/+Adjustments- Taxes= OperatingIncomeAfterTax(NOPAT)Capital

xc%

CapitalCharge= EVA?Objective:ContinuousImprovementinEVAP/LB/SEVA?isEarningsAftertheCos4TheintrinsicvalueisthedeterminantofthemarketvalueinefficientcapitalmarketIntrinsicvalueFinancialmeasuresOperatingmetrics

MVA,StockpriceEVA

ROI,Capitalturnover,margin

Marketshare,Unitcost,scraprate,deliverytimeCompetitivestrategyBusinessmodelManagementsystemOperatingefficiencyMarketvalueTheintrinsicvalueisthedet5USasexample50%40%30%20%10%CorrelationwithstockpriceEVAROE

CashFlowEPS

RevenueAsameasureofbusinessintrinsicvalue,EVAcorrelateswithstockpricebetterthanothermeasures

USasexample50%40%30%20%10%Co6EVAmeasuregivesmoreinsightsintothebusinessFromEnron’s2000AnnualReport(LettertoShareholders):Enron’sperformancein2000wasasuccessbyanymeasure…Thecompany’snetincomereachedarecordin2000.Enronislaser-focusedonearningspershare,andweexpecttocontinuestrongearningsperformance.(inmil)NetIncEPSEVA(inmil)EVAmeasuregivesmoreinsight7ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?8Fromthetraditionalaccountingmodel

totheeconomicmodelofthefirmAccountingFrameworkEVAFrameworkAdjustmentsP&LBalanceSheetCashFlowStatementNOPATCapitalEVASeparatefinancingeffectsfromoperatingperformanceExtendmatchingofcostswithrevenuetoeconomicbasisSeparateoperatingfromnon-operatingEliminatebookkeepingentries/reservesthatdistortcashflowandreduceobjectivitySoastoTobetterreflectvaluecreationTomotivatetherightvalue-creatingbehaviorFromthetraditionalaccountinOptimizingtheEVAMeasureMaterialityDifferenceinEVAwithorwithoutadjustment–Isitmaterial?SetaruleofthumbandusecommonsenseMotivationAdjustmentmustmotivatemanagerstodotherightthingStartwithdysfunctionalbehaviorsinstandardoperatingproceduresDataAvailabilityCostofcollectinginformationmustbereasonableSimplicityEVAisforoperatingpeople–keepitsimpleAfullyadjustedEVAistoocomplicatedtouseandcommunicateOptimizingtheEVAMeasureMateTheEVACalculationPrecisionVariesBasicEVATailoredEVATrueEVADisclosedEVATheEVACalculationPrecisionADJUSTMENTSCashtoEconomicNon-operatingItemsNon-recurringEventsAccrualtoCashAccountingconservatismtreatsmanyinvestmentsascurrentexpenses(R&D,significantMarketing/Training-onlythosespecificallyrelatingtoa“strategic”purpose)EVAviewsthemasinvestmentsinthefuture

Accountingmisstatescashflow

(Reserves)EVAseekstoemphasizeactualcasheventsAccountingdistortsongoingoperatingperformance

(RestructuringandAssetsales)EVAtreatmentavoidsprofitpeaksandtroughsItemsnotincludedinthenormalcourseofbusiness,ornotusuallymanagedatunitlevel(InterestExpensefromDebt;OtherFinancing)IntheEVAframework,wemustturntheaccountingmodelintoaneconomicmodelACashtoNon-operatingNon-recurCostofDebtCostofCapital?%+CostofEquity?%?%Thecostofcapitalcomprisesbothdebt&equitycostsRiskFreeRateEquityRiskPremiumDebtPremium(Creditspread)CostofCapital+CostofECostofEquityCapital

(requiredreturnby

equityholders)Risk(?)Risk-FreeRate

RfMarketRiskPremium

MRP

(Rm-Rf)}RelationshipbetweenRiskandReturnMarketRisk=1

CostofEquity=Rf+(BetaxMRP)ABetavalueisrequiredtodeterminecostofequityCostofRisk(?)Risk-FreeMarketIngeneral,ahigherbusinessriskimplieshigherbetavalue,hencehighercostofequityIngeneral,ahigherbusinessTocalculateBeta,alistofpeersneedtobeidentifiedfor{Client}Apeercompanyisnotnecessarilyacompetitor,butratheracompanyengagedinprincipallysimilarbusinesssubjecttothesameunderlyingeconomicforces.Theymaybecompetitorsorcompaniesinsimilarindustriesandbusinessenvironments.Peercomparisonsareusedto:DeriveBetasfortherespectivebusinessunitsandthecorporationtofacilitatecostofcapital(COC)calculations.Non-listedcompanies,wholly-ownedsubsidiariesandbusinessunitsdonothavepubliclytradedsharesfromwhichtomeasuretheleveredBetas.Wherepossible,apure-playanalysisofpubliclytradedpeercompaniesisusedtoestimatetheunleveredBeta,orBRI.ThisisthentranslatedintotheleveredBetaforthatcompany,usingthecapitalstructureandthecostofdebt.BenchmarkEVAperformanceandidentifyvaluedrivers.TocalculateBeta,alistofpContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?17StrategyFormationGoalSettingPlanning&BudgetingExecutionEvaluationMotivationEVAEVAEVAEVAEVAMotivationStrategyGoalSettingPlanningExecutionEvaluationValueBasedManagementEVAprovidesacomprehensivevaluemanagementframeworktotranslatestrategyintoactionStrategyGoalSettingPlanning&FromEVAGoalSettingtoExecutionEPSConsensusEstimatesIndustryDataBenchmarkingInternalforecastsSimulationsofpasthistory{Client}StrategicGoals

ConsolidatedEVAGrowthGoalBusinessUnitEVAGrowthGoalsOperatingPlansCapitalPlansResults/OutlookReportingEVAPlansReasonablenessCheckMarketExpectationsInternalForecastsAccuracyCheckGoalsettingisnotanissueoftherightnumber,butoneofalignmentALIGNMENTFromEVAGoalSettingtoExecuGoalsettingandbenchmarkingGoalsettingandbenchmarkingIntheEVAframework,MarketValuecanbebrokendownintoFutureGrowthValueandCurrentOperationsValueCapitalPVofcurrentEVAinperpetuityPVofEVAImprovementMVA=PresentValueofCurrentEVA+PresentValueofExpectedImprovementstoCurrentEVAFutureGrowthValue(FGV)CurrentOperationsValue(COV)MarketValueMarketValueAdded(MVA)CapitalIntheEVAframework,MarketVFuturegrowthvaluerepresents

anexpectationofincreaseinEVAMarketValueCurrentOperationsValue(COV)FutureGrowthValue(FGV)ExpectedImprovementsinEVAFutureGrowthValuerepresentsthepremiumonthevalueofcurrentoperations(Capital+EVA/c*).ThepresenceofaFutureGrowthValue,whichequalsPVofallfutureEVAimprovements,signalsthemanagersthatowners/investorsexpectincreasesinEVA.IncreasesinEVAwillalsodriveincreasesinMVA.AsaresultInvestorWealthwillgoupaswell.FuturegrowthvaluerepresentsApplying“industryaveragegrowthexpectations”to{Client’s}1999EVA,weestimateanFGVof$691mFGV39%COV61%1999{Client}EVA1999COV1,069mFGV?Ifweknow{Client’s}1999COVis$1060m(COV=1999capital+1999EVA/WACC)thenwecancalculateFGVbasedontheindustryaverageCOV:FGVratioof69:311999EVAcouldbeconsideredanabnormallygoodyearfor{Client},soapplyinganaverageEVAfrom97-00(alowerEVA),theFGVfor{Client}wouldcomeoutto$319MEstimatedFGV(using1999EVA)FGV691mConservative{Client’s}IndustryRatio1999COV1,069mCAPITAL526mEVA/C544mEstimatedFGV(usingavg.97-00EVA)FGV319m97-00COV493mApplying“industryaveragegroTaking{Client’s}FGVof$691m,weconvertitintoimpliedannualExpectedImprovementsinEVA(EI)2000COV$(18m)FGV$691m20012003200220042005...2010ExpectedImprovement(EI)$26millionMarketValue$673MAssuming{Client}weretoachievethisEVAgrowthovera10yearperiod,annualEVAimprovementswouldhavetobe$26millionayear.

FGV

EI(for10Years)Aggressive $691m $26mperyearConservative $319m $12mperyearTaking{Client’s}FGVof$691mToachieveEIs,managementshouldfirstunderstandthecurrentEVAbyfocusingonreturnoncapital

Margin x Turnover = ROCScenarioA 20% x 0.75 = 15% ScenarioB 5% x 3.0 = 15% NOPATCapitalProfitMarginCapitalTurnoverXReturnonCapitalNOPATSalesSalesCapitalXorDissectingtherateofreturnbringstolightthetrade-offsbetweenprofitmarginandcapitalefficiency.=Acompanycouldachievea15%returnbyeither:ToachieveEIs,managementshoAcompanycanuseROCcurvestounderstandandmapoutitsstrategytoimprovereturnsAcompanycanuseROCcurvest{Client1999}{Client2000}{Client}peersusefundamentallydifferentbusinessstrategiestocreatevalueintheindustry{Client1999}{Client2000}{CliTotalOperationExpenseMargin0%20%40%60%80%100%120%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesNOPATMargin-5%0%5%10%15%20%25%30%35%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesVariableExpensesMargin0%10%20%30%40%50%60%70%80%EGLExped.{Client}1999{Client}2000AirborneAtlasFedexUPSAverage%ofSalesFixedExpensesMargin0%10%20%30%40%50%60%70%80%90%EGLExped.{Client}1999{Client}2000AirborneAtlasFedexUPSAverage%ofSalesBenchmarkingNOPATmarginsgive{Client}asenseofhowitfallsintermsofoperatingefficiencyNote:BaltransandCNFremovedfromVariableandFixedExpensedriversanalysisduetoinsufficientdataTotalOperationExpenseMarginCapitalChargeMargin0%5%10%15%20%25%30%35%40%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesNWCCapitalChargeMargin0%1%2%3%4%5%6%7%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesFixedAssetsChargeMargin0%5%10%15%20%25%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesOtherCapitalChargeMargin-2%0%2%4%6%8%10%12%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesCapitalbenchmarkingpointstoworkingcapitalandfixedassetsasanopportunityfor{Client}todriveEVAupwardsCapitalChargeMargin0%5%10%15SummaryofBenchmarkingstudy1999DataInThousandsofUSD

Company/ItemsBaltransEGLExped.Client1999Client2000AirborneAtlasCNFFedexUPSAverageBestinClassSales100%100%100%100%100%100%100%100%100%100%100%100%Var.Exp/Sales97%62%69%34%54%34%11%N/A14%8%17%8%FixedExp/SalesN/A16%23%45%45%58%59%94%79%78%74%16%Selling/SalesN/A15%1%1%1%2%0%N/A0%0%1%0%-OperationExpenses/Sales97%92%94%80%101%95%71%94%93%85%88%23%-Tax/Sales0%3%1%1%0%2%12%2%5%4%5%0%+OtherIncome/Sales2%1%0%0%0%1%15%1%4%-6%3%15%=NOPATMargin5%5%5%20%-1%4%32%5%7%5%7%NWCCharge/Sales1%1%1%6%6%0%5%0%0%1%1%0%FixedAssetsCharge/Sales1%0%1%2%3%3%21%2%4%5%7%2%OtherAssetsCharge/Sales0%1%0%-1%3%1%10%2%5%0%4%0%-CapitalCharge/Sales3%3%2%8%12%5%36%4%9%6%12%=NetMargin2%2%3%11%-13%-1%-4%1%-2%-1%-5%xSales172,127595,1731,444,57519,53413,4183,140,226637,0815,592,81016,773,47027,052,000=EVA3,25912,63845,4452,240(1,726)(24,340)(22,405)68,874(361,190)(261,400)SummaryofBenchmarkingstudyLookingatbestinclassMarginandTurnover,wecancharttheEVAof{Client}underdifferentscenarios(B)AchieveBestinClassTurns(D)AchieveBestinClassROC(A)AchieveBestinClassNOPATMargin(C)AlsoBestinClassTurnsHistoryPeerBenchmark{Client}Forecast{Client}97-99BestInClass97-99Company{Client},Inc.2000-2005NOPATMargin15.0%25.6%AtlasAir7.5%CapitalTurnover313.6%505.0%Expeditors266.1%ReturnonCapital45.2%45.2%{Client},Inc.23.0%LookingatbestinclassMargi{Client}BestInClassAnalysis(86,325)138,666146,19056,438146,190(100,000)(50,000)050,000100,000150,000200,000CurrentEVAAchieveNOPATmarginof25.6%AchieveCap.T/Oof5xAchieveROC=45%EVAUSD'000sEVAimproveby$224,991EVAimproveby$142,763IsthereTradeoffbetweencapitalT/OandNopatMargin?EVAimprovebyafurther$7,524Using{Client’s}2000EVAasanillustration,thelargestEVAopportunityisfromNOPATmarginimprovement(A)(B)(C)(D){Client}BestInClassAnalysis,inThousandDollarsCurrentEVAAchieveNOPATMarginAchieveCapitalTurnsAchieveNOPATMargin&CapitalTurnsAchieveReturnonCapitalSales670,895670,895670,895670,895670,895NOPAT(4,080)171,829(4,080)171,82998,516AvgCapital426,138426,138132,846132,846218,018WACC19.3%19.3%19.3%19.3%19.3%EVA(86,325)138,666(29,720)146,19056,438{Client}BestInClassAnalysTheindustryvalue-basedstrategymapindicatesthemarket’sapprovalofcertainbusinessstrategiesTheindustryvalue-basedstratNewYorkChicagoLosAngelesLondonParisMilanMunichTokyoSaoPauloSingaporeSydneyJohannesburgShanghaiIntroductiontoEVAManagementSystemNewYorkChicagoLosA34ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?35ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?36EVA?isEarningsAftertheCostofCapital Revenues- OperatingCosts- Depreciation-/+Adjustments- Taxes= OperatingIncomeAfterTax(NOPAT)Capital

xc%

CapitalCharge= EVA?Objective:ContinuousImprovementinEVAP/LB/SEVA?isEarningsAftertheCos37TheintrinsicvalueisthedeterminantofthemarketvalueinefficientcapitalmarketIntrinsicvalueFinancialmeasuresOperatingmetrics

MVA,StockpriceEVA

ROI,Capitalturnover,margin

Marketshare,Unitcost,scraprate,deliverytimeCompetitivestrategyBusinessmodelManagementsystemOperatingefficiencyMarketvalueTheintrinsicvalueisthedet38USasexample50%40%30%20%10%CorrelationwithstockpriceEVAROE

CashFlowEPS

RevenueAsameasureofbusinessintrinsicvalue,EVAcorrelateswithstockpricebetterthanothermeasures

USasexample50%40%30%20%10%Co39EVAmeasuregivesmoreinsightsintothebusinessFromEnron’s2000AnnualReport(LettertoShareholders):Enron’sperformancein2000wasasuccessbyanymeasure…Thecompany’snetincomereachedarecordin2000.Enronislaser-focusedonearningspershare,andweexpecttocontinuestrongearningsperformance.(inmil)NetIncEPSEVA(inmil)EVAmeasuregivesmoreinsight40ContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?41Fromthetraditionalaccountingmodel

totheeconomicmodelofthefirmAccountingFrameworkEVAFrameworkAdjustmentsP&LBalanceSheetCashFlowStatementNOPATCapitalEVASeparatefinancingeffectsfromoperatingperformanceExtendmatchingofcostswithrevenuetoeconomicbasisSeparateoperatingfromnon-operatingEliminatebookkeepingentries/reservesthatdistortcashflowandreduceobjectivitySoastoTobetterreflectvaluecreationTomotivatetherightvalue-creatingbehaviorFromthetraditionalaccountinOptimizingtheEVAMeasureMaterialityDifferenceinEVAwithorwithoutadjustment–Isitmaterial?SetaruleofthumbandusecommonsenseMotivationAdjustmentmustmotivatemanagerstodotherightthingStartwithdysfunctionalbehaviorsinstandardoperatingproceduresDataAvailabilityCostofcollectinginformationmustbereasonableSimplicityEVAisforoperatingpeople–keepitsimpleAfullyadjustedEVAistoocomplicatedtouseandcommunicateOptimizingtheEVAMeasureMateTheEVACalculationPrecisionVariesBasicEVATailoredEVATrueEVADisclosedEVATheEVACalculationPrecisionADJUSTMENTSCashtoEconomicNon-operatingItemsNon-recurringEventsAccrualtoCashAccountingconservatismtreatsmanyinvestmentsascurrentexpenses(R&D,significantMarketing/Training-onlythosespecificallyrelatingtoa“strategic”purpose)EVAviewsthemasinvestmentsinthefuture

Accountingmisstatescashflow

(Reserves)EVAseekstoemphasizeactualcasheventsAccountingdistortsongoingoperatingperformance

(RestructuringandAssetsales)EVAtreatmentavoidsprofitpeaksandtroughsItemsnotincludedinthenormalcourseofbusiness,ornotusuallymanagedatunitlevel(InterestExpensefromDebt;OtherFinancing)IntheEVAframework,wemustturntheaccountingmodelintoaneconomicmodelACashtoNon-operatingNon-recurCostofDebtCostofCapital?%+CostofEquity?%?%Thecostofcapitalcomprisesbothdebt&equitycostsRiskFreeRateEquityRiskPremiumDebtPremium(Creditspread)CostofCapital+CostofECostofEquityCapital

(requiredreturnby

equityholders)Risk(?)Risk-FreeRate

RfMarketRiskPremium

MRP

(Rm-Rf)}RelationshipbetweenRiskandReturnMarketRisk=1

CostofEquity=Rf+(BetaxMRP)ABetavalueisrequiredtodeterminecostofequityCostofRisk(?)Risk-FreeMarketIngeneral,ahigherbusinessriskimplieshigherbetavalue,hencehighercostofequityIngeneral,ahigherbusinessTocalculateBeta,alistofpeersneedtobeidentifiedfor{Client}Apeercompanyisnotnecessarilyacompetitor,butratheracompanyengagedinprincipallysimilarbusinesssubjecttothesameunderlyingeconomicforces.Theymaybecompetitorsorcompaniesinsimilarindustriesandbusinessenvironments.Peercomparisonsareusedto:DeriveBetasfortherespectivebusinessunitsandthecorporationtofacilitatecostofcapital(COC)calculations.Non-listedcompanies,wholly-ownedsubsidiariesandbusinessunitsdonothavepubliclytradedsharesfromwhichtomeasuretheleveredBetas.Wherepossible,apure-playanalysisofpubliclytradedpeercompaniesisusedtoestimatetheunleveredBeta,orBRI.ThisisthentranslatedintotheleveredBetaforthatcompany,usingthecapitalstructureandthecostofdebt.BenchmarkEVAperformanceandidentifyvaluedrivers.TocalculateBeta,alistofpContentsWhatisEVA?ThecalculationofEVATheEVAmanagementsystemContentsWhatisEVA?50StrategyFormationGoalSettingPlanning&BudgetingExecutionEvaluationMotivationEVAEVAEVAEVAEVAMotivationStrategyGoalSettingPlanningExecutionEvaluationValueBasedManagementEVAprovidesacomprehensivevaluemanagementframeworktotranslatestrategyintoactionStrategyGoalSettingPlanning&FromEVAGoalSettingtoExecutionEPSConsensusEstimatesIndustryDataBenchmarkingInternalforecastsSimulationsofpasthistory{Client}StrategicGoals

ConsolidatedEVAGrowthGoalBusinessUnitEVAGrowthGoalsOperatingPlansCapitalPlansResults/OutlookReportingEVAPlansReasonablenessCheckMarketExpectationsInternalForecastsAccuracyCheckGoalsettingisnotanissueoftherightnumber,butoneofalignmentALIGNMENTFromEVAGoalSettingtoExecuGoalsettingandbenchmarkingGoalsettingandbenchmarkingIntheEVAframework,MarketValuecanbebrokendownintoFutureGrowthValueandCurrentOperationsValueCapitalPVofcurrentEVAinperpetuityPVofEVAImprovementMVA=PresentValueofCurrentEVA+PresentValueofExpectedImprovementstoCurrentEVAFutureGrowthValue(FGV)CurrentOperationsValue(COV)MarketValueMarketValueAdded(MVA)CapitalIntheEVAframework,MarketVFuturegrowthvaluerepresents

anexpectationofincreaseinEVAMarketValueCurrentOperationsValue(COV)FutureGrowthValue(FGV)ExpectedImprovementsinEVAFutureGrowthValuerepresentsthepremiumonthevalueofcurrentoperations(Capital+EVA/c*).ThepresenceofaFutureGrowthValue,whichequalsPVofallfutureEVAimprovements,signalsthemanagersthatowners/investorsexpectincreasesinEVA.IncreasesinEVAwillalsodriveincreasesinMVA.AsaresultInvestorWealthwillgoupaswell.FuturegrowthvaluerepresentsApplying“industryaveragegrowthexpectations”to{Client’s}1999EVA,weestimateanFGVof$691mFGV39%COV61%1999{Client}EVA1999COV1,069mFGV?Ifweknow{Client’s}1999COVis$1060m(COV=1999capital+1999EVA/WACC)thenwecancalculateFGVbasedontheindustryaverageCOV:FGVratioof69:311999EVAcouldbeconsideredanabnormallygoodyearfor{Client},soapplyinganaverageEVAfrom97-00(alowerEVA),theFGVfor{Client}wouldcomeoutto$319MEstimatedFGV(using1999EVA)FGV691mConservative{Client’s}IndustryRatio1999COV1,069mCAPITAL526mEVA/C544mEstimatedFGV(usingavg.97-00EVA)FGV319m97-00COV493mApplying“industryaveragegroTaking{Client’s}FGVof$691m,weconvertitintoimpliedannualExpectedImprovementsinEVA(EI)2000COV$(18m)FGV$691m20012003200220042005...2010ExpectedImprovement(EI)$26millionMarketValue$673MAssuming{Client}weretoachievethisEVAgrowthovera10yearperiod,annualEVAimprovementswouldhavetobe$26millionayear.

FGV

EI(for10Years)Aggressive $691m $26mperyearConservative $319m $12mperyearTaking{Client’s}FGVof$691mToachieveEIs,managementshouldfirstunderstandthecurrentEVAbyfocusingonreturnoncapital

Margin x Turnover = ROCScenarioA 20% x 0.75 = 15% ScenarioB 5% x 3.0 = 15% NOPATCapitalProfitMarginCapitalTurnoverXReturnonCapitalNOPATSalesSalesCapitalXorDissectingtherateofreturnbringstolightthetrade-offsbetweenprofitmarginandcapitalefficiency.=Acompanycouldachievea15%returnbyeither:ToachieveEIs,managementshoAcompanycanuseROCcurvestounderstandandmapoutitsstrategytoimprovereturnsAcompanycanuseROCcurvest{Client1999}{Client2000}{Client}peersusefundamentallydifferentbusinessstrategiestocreatevalueintheindustry{Client1999}{Client2000}{CliTotalOperationExpenseMargin0%20%40%60%80%100%120%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesNOPATMargin-5%0%5%10%15%20%25%30%35%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesVariableExpensesMargin0%10%20%30%40%50%60%70%80%EGLExped.{Client}1999{Client}2000AirborneAtlasFedexUPSAverage%ofSalesFixedExpensesMargin0%10%20%30%40%50%60%70%80%90%EGLExped.{Client}1999{Client}2000AirborneAtlasFedexUPSAverage%ofSalesBenchmarkingNOPATmarginsgive{Client}asenseofhowitfallsintermsofoperatingefficiencyNote:BaltransandCNFremovedfromVariableandFixedExpensedriversanalysisduetoinsufficientdataTotalOperationExpenseMarginCapitalChargeMargin0%5%10%15%20%25%30%35%40%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesNWCCapitalChargeMargin0%1%2%3%4%5%6%7%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesFixedAssetsChargeMargin0%5%10%15%20%25%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesOtherCapitalChargeMargin-2%0%2%4%6%8%10%12%BaltransEGLExped.{Client}1999{Client}2000AirborneAtlasCNFFedexUPSAverage%ofSalesCapitalbenchmarkingpointstoworkingcapitalandfixedassetsasanopportunityfor{Client}todriveEVAupwardsCapitalChargeMargin0%5%10%15SummaryofBenchmarkingstudy1999DataInThousand