EFTA01447285.pdf

Converting accounting data into real economic data Economic P/E correlations are much higher than for accounting PIE Accounting inputs Economic inputs Price-to-book value (P/BV) Enterprise value / net capital invested (EV/NCI) Return on equity (E/BV) Cash Return On Capital Invested (CROCI) 0 Accounting P/E: P/BV vs. ROE, Economic PIE: EV/NCI vs. CROCI, 40 R2 = 0.3295) 25 R' = 0.7517 35 • 20 30 • 25 15 • 20 15 10 10 • 5 5 •• 0 0 -200% -100% 0% 100% 200% 300% -40% -20% 0%o 20% 40% 60% 80% 100% 120% 'P/BV vs. ROE and EV/NCI vs. CROCI is for CROCI global universe during 2012, using average share price where necessary. Companies with negative P/BVs have been removed from both, along with three extreme outliers in the accounting chart. Source: Deutsche Bank Deutsche Asset For institultonal use only I Not for public viewing or distribution & Wealth Management Investment products: No bank guarantee I Not FDIC Insured I May lose value 4 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0101875 CONFIDENTIAL SDNY_GM_00248059 EFTA01447285