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Business Valuation Issues Succession Planning and & Estate Tax Planning 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. Smith All rights reserved. PrintedGraham in the U.S.A. Brian / Reggie Gift 1 Notice The following information is not intended to be written advice concerning one or more Federal tax matters subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 2

Agenda Overview of Valuation Role of the Appraiser Valuation Approaches Applicable Discounts Appendices Typical Interests Valued DLOC and DLOM Court Decisions Valuation Report Requirements 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 3 Overview of Valuation 4 Standard of Value: Fair Market Value (FMV) Defined in Reg. 25.2512-1. Valuation of property; in general: The price at which such property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts. Definition also in Revenue Ruling 59-60 for closely-held businesses. Reg. 25.2512-2 through Reg. 25.2512-6 contain special rules for the valuation of specific items of property (i.e., stocks and bonds,

real estate, etc.) Willing buyer and willing seller are hypothetical, not actual, parties Assume that subject property is being purchased by a unrelated third-party 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 5 Valuation Date Valuation date determines date as of which available information should be considered in the appraisal Gift tax valuation date: Date of gift Estate tax: Date of death (DOD) or alternative valuation date, if elected (6 months after DOD) Known or knowable appraisers to assess probabilities and incorporate potential risks or benefits Subsequent

events Subsequent events are usually admissible to show the reasonableness of expecting them Admissible, but probably not too probative Hindsight generally used in setting estate tax deduction for claims against the estate 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 6 Valuation Considerations Revenue Ruling 59-60 from the Internal Revenue Code (used for tax valuations), provides a solid foundation for the considerations underlying a valuation: Nature of the business, its risks, historical patterns of growth General economic and industry outlook Book value and financial condition Dividend-paying capacity Earnings history and capacity Assessment of future growth and performance Existence of undervalued tangible and intangible assets Recent sales of the companys stock Market price of similar companies Other facts and circumstances 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A.

7 Valuation Considerations Carefully define the bundle of rights that you are valuing In summary, you should understand: The companys historical performance Current operations Expectations for the future (most important) In the context of: Global economy Target economy Target industry and related industries 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 8 Role of the Appraiser 9 Role of Appraiser

A qualified appraisal can help with adequate disclosure requirements and avoid penalties Benefits of involving a Qualified Appraiser Independent and objective Knowledge of court decisions and prevalent practice National resources with experience defending value conclusions Ability to value a diverse range of assets and liabilities Historical court rulings have highlighted the importance of hiring a Qualified Appraiser 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 10 Role of Appraiser - Adequate Disclosure Disclosure for closure rules under gift & estate tax Gift tax return value can be made conclusive for future purposes IRC 6501(c)(9) [i.e. you may be held to it later!] Return must include detailed valuation statement or copy of appraisal meeting specified requirements Qualified Appraiser:

Appraiser must hold self out as appraiser or regularly perform appraisals Earned a recognized appraisal designation or has met certain minimum education and experience requirements Qualified Appraisal: Made, signed and dated by a qualified appraiser Report contents: Reg. 301.6501(c)-1(f)(3)(i) 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Role of Appraiser - Penalties Penalties and discipline Taxpayers: valuation misstatement penalty (IRC 6662(b)(5), -(g), -(h)(2)(C)); 20%-40% of underpaid tax Reasonable cause exception Hiring of valuation professional not an automatic excuse from penalty Appraisers: Aiding and abetting understatement of tax liability (IRC 6701); potential suspension or disbarment from practice before IRS; criminal liability 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Valuation Approaches

13 Approaches to Value Generally accepted valuation approaches: Income approach Market approach 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Cost approach 14 Income Approach Income approach Predicated upon the value of the future cash flows that an asset will generate over its remaining useful life Step one involves a projection of the cash flows that the asset is expected to generate

Step two involves converting these cash flows into a present value equivalent through discounting 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 15 Income Approach: Basic Concepts Premise: value depends on future cash returns Perspective: forward-looking MechanicsFour steps Set a horizon period (e.g., five years) Forecast free cash flows (e.g., debt-free basis or equity) Calculate a terminal (residual) value Calculate and apply a discount rate appropriate to cash flows 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 16 Income Approach: Summary PROS Clear logical link to the underlying fundamentals/ assumptions

Lends itself to a wide variety of decision-making applications Allows sensitivity analysis Not dependent on accounting methods Reflects business outlook CONS May be complex Requires forecast assumptions Developing projections may be difficult, depending on maturity of business Discount ratesubjective assessment 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 17 Market Approach Market approach The fair value of the asset reflects the price at which comparable assets are purchased under similar circumstances

Requires that comparable transactions be available. Most commonly found when the acquired asset is widely marketed to third parties 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 18 Market Approach: Two Primary Methods Guideline Company Method Based upon valuation multiples of comparable companies whose stocks are publicly-traded on an exchange or over the counter The indication of value under this method is on a noncontrolling interest, freely-traded basis (as if publicly-traded value) Guideline Transaction Method Based upon valuation multiples of comparable companies in which entire or significant business interests were sold The indication of value under this method is on a controllinginterest basis (often reflects perceived synergistic benefits) 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 19 Market Approach: Mechanics Select

comparables (publicly traded or recently announced deals) - based on industry / similar operations or functions Analyze the fundamentals (e.g., financials, operations, marketing, competition) Recast Select / Adjust financials and weight multiples (e.g., revenue or EBITDA) Apply multiples to subject company financials Generally done on a debt free basis 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 20 Market Approach: Summary Pros Ability to view multiples of companies similar to the subject as of the valuation date IPO pricing is often done based on comparables

Large pool of data Cons Imprecise (e.g., adj. to multiples, weight) Comparables are not actually comparable Greater fool theory 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 21 Cost Approach Cost approach The fair value of an asset is estimated as a function of the current cost to purchase or replace the asset Based upon the principle of substitution, which states that a prudent investor would pay no more for an asset than the amount necessary to replace the asset 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 22 Cost Approach: Basic Concepts Premise:

cost to reproduce/replace as-is Perspective: backward-looking Asset values are key Mechanics Appraise assets/liabilities Restate balance sheet to FV Consideration/quantification of intangibles Select going concern or liquidation value 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 23 Cost Approach: Summary PROS Investment or Real Estate holding companies Capital intensive industries (e.g., mining properties) Poor Earnings or Losses Useful if a company is to be liquidated Cons

Asset value may be dwarfed by cash flow Difficult to measure the going concern aspects of the business Depends on the freshness of the balance sheets Difficult to value intangible assets 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 24 Reconciliation of Methods Once indications have been calculated under the various approaches, the indications should be weighted to arrive at a conclusion The weightings are based on many factors, such as the quality and reliability of available data used in the different approaches 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with

KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 25 Applicable Discounts 26 Level of Value Discounted value of interest Consideration of discounts Less: Discount for Lack of Control Less: Discount for Lack of Marketability 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 27 Discount for Lack of Control (DLOC) Rationale Discount for co-ownership of property in undivided interests Nonvoting shares discounted below minority voting share values (Google) No attribution of ownership within family Revenue Ruling 93-12 Rise of family limited partnerships and similar entities Swing vote?

2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 28 Discount for Lack of Control (DLOC) Quantifying the discount Operating companies: Control premium studies Asset holding companies: Net asset value, data from mutual funds or closed-end funds / holding companies Discounts have ranged from 6% to 35% based on facts and circumstances Appendix A provides a summary of prior court rulings on the DLOC Discounts should not simply be based on average / median of studies and instead should be developed through a comprehensive analysis of the facts and circumstances of each case 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 29 Discount for Lack of Control (DLOC) Qualitative Factors Listed below are some key factors considered in developing the DLOC: 1. Ability to Grant Dividends 2. Ability to Drive Investment Policy / Decisions 3. Ability to Hire / Fire Management

4. Setting Board of Directors 5. Setting General Business Direction 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount for Lack of Control (DLOC) Voting Rights Matter Voting vs. Non-Voting The U.S. Tax Court recognizes the differential between voting and non-voting stock values. Listed below is a summary of select court cases relating to voting and nonvoting blocks VOTING RIGHTS DISCOUNTS - TAX COURT CASES Study Estate of Simplot vs. Commissioner Barnes vs. Commissioner Kosman vs. Commissioner Estate of Newhouse vs. Commissioner Estate of Joyce C. Hall vs. Commissioner Estate of Clara Roeder Winkler vs. Commissioner The Northern Trust Company vs. Commissioner Ahmanson Foundation vs. United States Wallace vs. United States The Northern Trust Company vs. Commissioner Publication Date 2001 / 1999

1998 1996 1990 1989 1989 1986 1981 1981 1977 Indicated Discount 0.0% 3.7% 4.0% 0.0% 5.2% 9.1% 0.0% 3.0% 4.8% 4.4% The results indicate discounts ranging widely from 0% to 9%, depending on the unique circumstances of each case 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 31 Discount for Lack of Marketability (DLOM) Reflects

difficulty of selling interest in private company Applicable when public company data being used Also applied in cases when interest is first assigned pro rata portion of overall equity in entity No discount if base value not determined as if freely marketable No discount if history of buyouts by issuer 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 32 Discount for Lack of Marketability (DLOM) Qualitative Factors Listed below are some key factors considered in developing the DLOC: 1. Liquidation Horizon (i.e. Time until liquid funds are available) 2. Asset Mix, Liquidity and Quality 3. Distribution Policy on Earnings 4. Management Depth 5. Size and Market Position 6. Growth / Income Potential 7. Prior Transaction History 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount for Lack of Marketability (DLOM)

Methodologies Benchmark approach: Restricted stock studies, IPO studies, Other studies Adjustments for various factors: Mandelbaum (TC 1995), Contrast Estate of Richmond (TC 2014) Option pricing approach Has not caught on in Tax Court Discounts have ranged from 3% to 50% (Refer to Appendix B) Discounts should not simply be based on average/median of studies and instead should be developed through a comprehensive analysis of the facts and circumstances of each case 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 34 What Questions Do You Have? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A.

35 Contact Us Brian J. Smith Reggie S. Graham, ASA Managing Director Senior Manager (404) 222-7336 (404) 979-2091 [email protected] [email protected] 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. 36 Appendices 37 Appendix A: Typical Interests, Assets and Liabilities Valued by KPMG

Business and Business Interests Partnership interests LLC interests Common stock Preferred stock Debt securities Stock options and warrants Portfolio investments Subsidiaries

Tangible Assets Machinery and equipment Furniture and fixtures Computer equipment Office equipment Real property Inventory Intangible Assets and Intellectual Property Patents Customer-based intangible assets Trade names, trademarks

and brands Computer software and systems Databases License and franchise agreements Non-compete agreements 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Financial Instruments Loans and loan pools Leases High-yield bonds Commercial mortgage-backed

and other real estate securities Preferred securities Forwards, swaps, and options (e.g., put or call options, caps, floors, collars, swaptions) Private equity, hedge funds and fund of fund investments Appendix B: DLOC - Court Decisions Case Name Estate of Irene de Guebriant H.O. Canfield Co. Paula Du Pont Dean Seas Shipping Partnership, Inc. Moore-McCormack Lines, Inc. George P. Collins, Jr. J.K. Downer Estate of Gregg Maxey Estate of J. Macfie Anderson Case No 50-1 50-6 60-2 65-10 65-11

66-4 67-6 69-4 72-2 Estate of Ethel C. Dooly Estate of Joseph E. Salsbury Joseph E. Lagrew Estate of Goldie C. Brown Estate of Bruno Bichoff 72-3 75-12 76-13 77-9 77-19 Estate of T. John Folks, Jr. 82-5 Jack D. Carr Roy 0. Martin, Jr. Charles W. Ward The Northern Trust Partnership 85-1 85-14 86-11 86-14 Type of Business

Real estate holding company Mfr. Mechanical rubber products Personal holding company Steamship operating company Steamship operating company Mfr. glass bottles Aircraft manufacture Citrus fruit, cattle raising, restaurant Hardware, tools and housewares retailer/wholesaler Ranching Mfr. drug products for poultry Real estate development Ranch for future development Pork products wholesaler, plus investment and real estate holding Real estate investment and lumber yards Real estate development Timberland Cattle ranch Asphalt paving Discount 25.0% 8.3% 20.0% 24.0% 24.0% 30.4% 84.0% 25.0%

16.7% 33.0% 27.5% 25.0% 10.0% 15.0% 50.0% 25.0% 5.0% 33.3% 20.0% Source: Federal Tax Valuation Digest 2012/2013, additional cases added by KPMG along with docket numbers. 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Appendix B: DLOC - Court Decisions (continued) Case Name Estate of Stirton Oman Estate of Milton Feldmar Estate of Edgar A. Berg Karl and Jacqueline Easton John R. and Viola K. Moore Estate of Luton v. Commissioner Estate of Helen M. Trenchard Estate of Anthony J. Frank Estate of Lucile McCormick Wheeler v. United States Rosman v. Commissioner Krapf v. United States Estate of William J. Desmond May T. Rakow

Estate of Mary D. Maggos Estate of Albert Strangi Knight v. Commissioner Janda v. Commissioner Wall v. Commissioner Case No 87-4 88-8 91-1 91-2 91-6 94-3 95-1 95-3 95-5 95-6 96-4 96-5 99-3 99-8 00-4 00-10 00-11 01-01 01-03 Type of Business Heavy construction Holding company (insurance) Real estate holding company Rehab community residence for

mentally disabled Farming and ranching Duck hunting preserve Farming Motels Real property development and sales Not stated Bank holding company Railroad car refurbishing Chemical Manufacturer General contractor Pepsi-Cola bottling company Family Limited Partnership Family Limited Partnership Holding Partnership of a Bank Direct mail distributor and manufacturer of office supplies, furniture, and accessories. 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount 16.7% 13.0% 20.0% 33.3% 35.0% 20.0% 28,6% 20.0% 18% to 32%

10.0% 4.0% 33.3% 20.0% 31.0% 20.0% 8.0% 15.0% 40.0% 17.0% Appendix B: DLOC - Court Decisions (continued) Case Name Estate of Marcia P. Hoffman Succession of Betty Felix Helis Estate of H.A. True, Jr. Estate of Elma Middleton Dailey Estate of Richie C. Heck Estate of Lewis A. Bailey Okerlund v. United States McCord, Jr. v. Commissioner Estate of Helen A. Deputy Hess v. Commissioner Case No 01-04 01-05 01-06 01-07 02-01 02-05 02-06

03-03 03-04 03-05 Lappo V. Commissioner Estate of Mildred Green Estate of Lea K. Hillgren Estate of Josephine T. Thompson 03-06 03-07 04-01 04-04 Estate of Helen M. Noble Estate of Frazier Jelke III 05-01 05-02 Estate of Webster E. Kelly W.G. Anderson v. United States Koblick c. Commissioner 05-03 05-04 06-01 Type of Business Residential real estate development Oil and gas properties Oil and gas, cattle ranches

Family Limited Partnership Producer of premium champagne Motels Food wholesaler and distributor Family Limited Partnership Manufacturer of aluminum boats Manufactured machines for the auto industry Family Limited Partnership Bank ReaL Estate Partnership Production and sale of business directories Commercial Bank Holding company of marketable securities Limited Liability Partnership Oil and gas company Undersea hotel 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount 18.0% NA 10% to 15% 40.0% 10.0% 20.0% NA 15.0%

30.0% 16.0% 15.0% 17.0% 35 50% 15.0% 15.0% 10.0% 12.0% 10.0% 10.0% Appendix B: DLOC - Court Decisions (continued) Case Name Estate of Charlotte Dean Temple Astleford v. Commissioner Holman v. Commissioner Estate of Majorie Degreeff Litchfield v. Commissioner Estate of Majorie Degreeff Litchfield v. Commissioner Estate of Charles H. Murphy, Jr. Pierre v. Commissioner Estate of Gallagher v. Commissioner Estate of Tanenblatt v. Commissioner Richmond v. Commissioner Case No 06-03 08-01 08-02 09-01

Type of Business Land, livestock, vineyard, and partnerships to hold publicly traded stock Family Limited Partnership Family Limited Partnership Family Limited Partnership 09-01 Family Limited Partnership 11.9% 09-03 10-01 11-148 13-273 14-26 Family Limited Partnership Single member LLC Newspaper Publishing and Media Real Estate Holding LLC Family Investment Holding Company 12.5% 8.0% 23.0% 10.0% 7.8%

2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount 10% - 38% 16.17% - 17.47% 4.63% - 14.34% 14.8% Appendix C: DLOM - Court Decisions Case Name Thomas D. Conroy Estate of Orville E. Littick North American Phillips Co. Jack 1. LeVant Daniel H. Deutsch Estate of Donald M. Hayes Bernard Miller Harold F. Stroupe Carl N. Pehlke Estate of Bernard Kessler Estate of William T. Piper, Sr. 72 Rudolph M. Maris Campbell, Jr. v. United States Louis B. Gresham Estate of Sophia P. Brownell Estate of Frederick P. Stratton Estate of Robert M. Hall Case No

58-1 58-9 62-7 65-13 67-7 73-5 75-14 78-4 78-14 78-26 79-22 80-17 81-11 82-19 82-30 82-33 83-9 Type of Business Electrical Components Publisher Electromechanical equipment Soaps, detergents and cleansers Biochemicals Soft drink bottler, leasing fairground Manufacturing - not stated Supermarkets Electronic equipment Merchandising chain Investment co., light aircraft Beer distributor Electronics services

Not staled Forest products Engines and locks Pharmaceuticals Discount 30.0% 22.5% 68.7% 12.0% 87.5% 25.0% 50.0% 40% and 44% 31.4% 48.2% 12.0% 30.0% 43.0% 33-1/3% 3.6% 25.0% 80.0% Source: Federal Tax Valuation Digest 2012/2013, additional cases added by KPMG along with docket numbers. 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Appendix C: DLOM - Court Decisions (continued) Case Name

Steinberg v. Commissioner McDonald v. Commissioner Estate of Mark S. Gallo The Northern Trust Co. Estate of Saul R. Gilford William 0. Adair Case No 85-4 85-6 85-8 86-14 87-2 87-12 Reilly v. Commissioner Estate of Clara S. Roeder Winkler 88-10 89-4 Estate of Edwin Wallace Neff Estate of Elizabeth B. Murphy Estate of Bessie I. Mueller Estate of Ray A. Ford 89-5 90-10 92-3 93-10 Bernard Mandelbaum

Estate of Ross H. Freeman Estate of Ann H. Brookshire Estate of Richard R. Simplot 95-4 96-10 98-7 99-5 Type of Business Not stated Not stated Winery holding company Asphalt paving Scientific instruments Not stated Chemical products Oil and gas production and distribution Publishing Broadcasting and publishing Flow control products/systems Transfer & storage, lease real estate & transportation equipment Women's retail apparel stores Semiconductors Regional grocery store chain Frozen food processing 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A.

Discount 33-1/3% 30.0% 36.0% 25.0% 33.0% 0.0% 15.0% 30.0% 30.0% 25.0% 10.0% 20.0% 7.5% 10.0% 30.0% 10.0% 40.0% 35.0% 40.0% Appendix C: DLOM - Court Decisions (continued) Case Name Estate of Sam Homer Marmaduke Estate of W.W. Jones ii Wall v. Commissioner Case No 99-11 01-02

01-03 Estate of Marcia P. Hoffman Succession of Betty Felix Hells Estate of H.A. True, Jr. Estate of Richie C. Heck Estate of Lewis A. Bailey Okerlund v. United States Estate of Helen A. Deputy Hess v. Commissioner 01-04 01-05 01-06 02-01 02-05 02-06 03-04 03-05 Estate of Mildred Green Estate of Josephine T. 03-07 04-04 Estate of Helen M. Noble T.C. W.G. Anderson v. United States Michael W. and Caroline P. Huber v. Commissioner Estate of Georgia T. Gimbel Litman vs. United States and

Hotels.com vs. United States 05-01 05-04 06-04 Type of Business Retailer of books, videos and music Cattle ranches Direct mail distributor and manufacturer of office supplies, furniture, and accessories. Residential real estate development Oil and gas properties Oil and gas. Cattle ranches Producer of premium champagne Motels Food wholesaler and distributor Manufacturer of aluminum boats Manufactured machines for the auto industry Bank Production and sale of business directories Commercial Bank Oil and gas company Diversified business 06-06 07-01 Metal Service Center

Internet 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount 30.0% 51.0% 40.0% 35.0% NA 10% to 30% 25.0% 30.0% 30.0% 30.0% 25.0% 35.0% 30.0% 30% - 43% 40.0% 50.0% 14.4% 22% - 50% Appendix C: DLOM - Court Decisions (continued) Case Name Astleford v. Commissioner Holman v. Commissioner Estate of Miller v. Commissioner

Estate of Litchfield v. Commissioner Estate of Litchfield v. Commissioner Murphy v. United States Pierre v. Commissioner Estate of Foster v. Commissioner Estate of Giustina v. Commissioner Case No 08-01 08-02 09-119 09-01 09-01 09-03 10-01 11-95 11-141 Estate of Gallagher v. Commissioner Estate of Tanenblatt v. Commissioner Richmond v. Commissioner 11-148 13-273 14-26 Type of Business Family Limited Partnership Family Limited Partnership Family Limited Partnership Family Limited Partnership Family Limited Partnership

Family Limited Partnership Single Member LLC Mail-Order Horticulture Business Family Limited Partnership Holding Timberland Newspaper Publishing and Media Real Estate Holding LLC Family Investment Holding Company 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Discount 22.0% 12.5% 35.0% 20.0% 25.0% 32.5% 30.0% 39.5% 25.0% 31.0% 26.0% 32.1% Appendix D: Valuation Report Requirements A. The date of the transfer, the date on which the transferred property was appraised, and the purpose of the appraisal. B. A description of the property. C. A description of the appraisal process employed. D. A description of the assumptions, hypothetical conditions, and any limiting conditions

and restrictions on the transferred property that affect the analyses, opinions, and conclusions. E. The information considered in determining the appraised value, including in the case of an ownership interest in a business, all financial data that was used in determining the value of the interest that is sufficiently detailed so that another person can replicate the process and arrive at the appraised value. F. The appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions. G. The valuation method utilized, the rationale for the valuation method, and the procedure used in determining the fair market value of the asset transferred. H. The specific basis for the valuation, such as specific comparable sales or transactions, sales of similar interests, asset-based approaches, merger-acquisition transactions, etc. 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. Printed in the U.S.A. Thank you 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member 48

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