Exhibit 4 Industry Information for Frozen Novelties

Industry Units Advertising

Revenues Sold % Change Average Spending
Year (millions) (millions) in Sales Price (millions)

1980 $590 N/A N.A N/A $2

1981 680 N/A 15.3% N/A 4
1982 770 457 13.2 $1.69 17
1983 940 525 22.1 1.79 23
1984 1,100 577 17.0 1.90 32
1985 1,300 643 18.2 2.02 44
1986 1,400 681 7.7 2.06 77
1987 1,500 717 7.1 2.09 38
1988 1,355 637 -9.7 2.13 26
1989 1,332 623 -1.7 2.19 40
1990 1,321 590 -0.8 2.24 21
Exhibit 7 Hypothetical Proceeds from an Initial Public Offering

Total for firm:

Offer Price $ 14.00 $ 16.00
Special dividend 4.52 4.52
Total per share $ 18.52 $ 20.52

Shares outstandinga 3,316 3,316

Total Proceedsa $ 61,412 $ 68,044

1991 Net Incomea $ 3,749 $ 3,749

Implied P/E Multiple 12.38 14.15

Reynolds' proceeds:
Shares owneda 2,789 2,789
Per share proceeds:
Stock price 14.00 16.00
Special dividend 4.52 4.52
Total per share 18.52 20.52
Total for holdingsa 51, 645 57,222

a
Units are in thousands.
`
Table B 1991 Leading Frozen Novelty Brands

Brand Company Unit Share

Popsicle Unilever 7.6%

Klondike Empire of Carolina 5.4%
Eskimo Pie Eskimo Pie 5.3%
Snickers Mars 4.8%
Weight Watchers H.J. Heinz 4.3%
Exhibit 3 Distribution and Market Share of Eskimo Pie, Heath, and Welch's Frozen Novelties

1987 1988 1989 1990 1991

Distribution of at least one Eskimo
product at U.S. Grocery Stores 76.3% 78.1% 91.2% 95.6% 97.9%

Unit Market Share of Eskimo

products 3.3 3.9 5.7 6.8 7.5
Exhibit 8b Information about Comparable Companies

Operating Book Value

Company Sales Cash Flowab Incomeb Net Incomeb of Equity
Ben & Jerry's 97.0 6.7 10.2 3.7 26.3
Dreyer's Grand Ice Cream 354.9 24.1 37.0 15.9 113.1
Empire of Carolina, Inc. 243.1 16.8 37.4 8.8 45.1
Steve's Homemade Ice Cream 35.1 2.7 3.9 1.8 11.1
Hershey Foods Corp. 2,899.2 292.3 463.0 219.5 1,335.3
Tootsie Roll Inds. 207.9 32.5 47.2 25.5 152.8

a
Cash flow is defined as earnings before interest after tax (EBIAT) plus depreciation.
b
Before extraordinary items.
Market Value
of Equity Total Debt
110.1 2.8
534.0 44.3
51.4 89.8
37.4 3.1
4,002.5 282.9
728.8 0.0
Exhibit 9 Selected Financial Market Data, November 1991

I. Treasury Yields
90 day 4.56%
Six months 4.61%
One year 4.64%
Five years 6.62%
Ten years 7.42%
Thirty years 7.92%

II. Corporate Borrowing Rates

Long-term Bond Yields
AA 8.74%
A 9.27%
BBB 9.56%
BB 11.44%
B 14.68%
Floating Rates
Prime rate 7.50%
Prime commercial paper (6 months 4.76%
Exhibit 8c Monthly Stock Returns for the S&P500 Composite and for Comparable Companies
EMPIRE OF
BEN & CAROLINA STEVE'S HERSHEY
JERRY'S DREYER'S INC ICE CREAM FOODS TOOTSIE ROLL S&P 500
Jan-88 -0.0517 0.1509 0.0677 0.9000 0.0561 0.0122 0.0404
Feb-88 0.0909 -0.0492 0.1212 -0.1842 0.0301 -0.0763 0.0418
Mar-88 0.1500 0.0259 0.0541 0.0323 -0.0660 0.0141 -0.0333
Apr-88 -0.0580 0.1513 0.0282 -0.0625 -0.0303 0.0443 0.0094
May-88 -0.0462 0.0073 -0.0750 0.1000 -0.0248 0.0509 0.0032
Jun-88 0.0484 0.1304 0.0541 0.1818 0.0591 -0.0183 0.0433
Jul-88 0.0000 -0.0256 0.0282 0.0256 0.0000 0.0370 -0.0054
Aug-88 -0.0308 -0.0658 0.1750 -0.0250 -0.0284 -0.0357 -0.0386
Sep-88 0.0318 0.0845 -0.1277 -0.1026 0.0526 0.0101 0.0397
Oct-88 0.1462 0.1299 -0.0707 -0.0571 0.0950 0.0408 0.0260
Nov-88 -0.1544 0.0115 0.0000 -0.0909 -0.0804 -0.0863 -0.0189
Dec-88 -0.0635 0.0682 0.3421 0.1000 0.0400 0.0320 0.0147
Jan-89 0.0848 -0.0426 0.0220 0.3939 -0.0144 -0.0750 0.0711
Feb-89 -0.0781 -0.1000 0.1923 0.0761 -0.0029 -0.0721 -0.0289
Mar-89 -0.0678 -0.0864 -0.0161 -0.0505 0.0443 0.0372 0.0208
Apr-89 0.1636 0.0811 -0.1784 0.0000 0.0708 0.0628 0.0501
May-89 -0.0156 0.2125 0.0600 -0.1277 0.0150 0.0546 0.0351
Jun-89 -0.0476 0.0103 0.1132 0.0976 0.1572 0.0666 -0.0079
Jul-89 0.1167 0.0918 0.3241 0.0444 0.0566 0.0931 0.0884
Aug-89 -0.0149 0.2056 0.0577 0.0000 -0.0516 0.0444 0.0155
Sep-89 0.0152 -0.0698 0.1273 -0.0426 0.0000 0.0229 -0.0065
Oct-89 -0.1194 -0.1583 0.1629 -0.1000 0.0379 -0.0451 -0.0252
Nov-89 0.0339 0.1584 -0.0694 0.0741 0.0130 0.0727 0.0165
Dec-89 0.0328 -0.0513 -0.2836 -0.0460 0.0399 -0.0086 0.0214
Jan-90 -0.1587 -0.0811 -0.1875 -0.1566 -0.1115 -0.0719 -0.0688
Feb-90 0.0189 0.1765 -0.2051 0.3000 -0.0841 0.0590 0.0085
Mar-90 0.0370 0.0833 0.1613 -0.0769 0.0948 0.0244 0.0243
Apr-90 -0.0714 0.0154 0.3056 -0.2619 0.0158 0.0386 -0.0269
May-90 0.3077 0.1591 -0.2979 0.0645 0.0913 0.1689 0.0920
Jun-90 0.0147 0.0654 0.1212 -0.3636 0.0750 0.0129 -0.0089
Jul-90 0.0870 -0.0245 -0.1892 0.0714 0.0266 -0.0114 -0.0052
Aug-90 -0.2267 -0.1006 -0.1500 -0.1778 -0.0065 -0.2052 -0.0943
Sep-90 -0.0948 -0.0140 -0.0196 -0.4324 -0.0493 0.0235 -0.0512
Oct-90 -0.0095 0.0213 0.0000 -0.0476 -0.0450 -0.0036 -0.0067
Nov-90 0.0577 0.2569 0.0000 0.7000 0.0210 0.1000 0.0599
Dec-90 0.0727 -0.0422 -0.1200 -0.2647 0.0714 0.0599 0.0248
Jan-91 0.0848 0.1047 0.2046 -0.0800 0.0600 0.0215 0.0415
Feb-91 0.0938 0.1368 -0.0566 0.1304 0.0088 0.0991 0.0673
Mar-91 0.1000 0.0944 -0.0800 0.1154 0.0251 0.0875 0.0222
Apr-91 -0.0260 -0.1017 0.2174 0.3103 -0.0184 0.0363 0.0004
May-91 0.0667 0.0094 0.2143 -0.1974 0.0991 0.0225 0.0386
Jun-91 -0.0375 0.0766 -0.0441 -0.0492 -0.0712 -0.0110 -0.0479
Jul-91 0.2857 0.0000 -0.0154 -0.0345 0.0276 0.1114 0.0449
Aug-91 0.1515 -0.0174 0.1875 0.9643 0.0059 0.0178 0.0197
Sep-91 0.1491 -0.0425 0.1053 -0.1273 -0.0716 0.0208 -0.0191
Oct-91 0.0458 0.0093 0.2143 0.6250 0.0611 0.0622 0.0119
Nov-91 0.0146 0.0734 0.0392 -0.2821 -0.0729 0.0364 -0.0439
Dec-91 0.0648 0.1897 -0.2642 0.8214 0.1678 0.1453 0.1116
Exhibit 2 Cash Flow Summary

Year Ended December 31,

1989 1990

Operating activities:
Net income $ 2,422 $ 2,526
Depreciation 1,006 1,352
Amortization 175 118
Deferred income taxes 250 (58)
Pension liability and other (154) (156)
Decrease (increase) in receivables 1,212 (734)
Decrease (increase) in inventories and
prepaid expenses (524) (51)
Increase (decrease) in payables to parent 2,054 (621)
Increase (decrease) in accounts payable and
accrued expenses 143 3,006
Net cash provided by operating activities 6,595 5,382

Investing activities
Capital expendituresa (2,358) (1,311)
Other (121) (101)
Net cash used in investing activities (2,479) (1,412)

Financing activities
Cash dividends (1,327) (1,327)
Principal payments on long-term debt (175) (175)
Net cash used in financing activities (1,502) (1,502)
Increase (decrease) in cash and cash equivalents 2,614 2,468
Cash and cash equivalents at beginning of year 8,109 10,723
Cash and cash equivalents at end of year $ 10,723 $ 13,191

a
Capital expenditures in 1989 are principally related to equipment acquired for use by licensees and, in 1990, an expansion of an ingredients manufacturing fac
ansion of an ingredients manufacturing facility.
Exhibit 1 Historical Financial Information

Year Ended December 31,

1987 1988 1989 1990

Income Statement Data (in thousands):

Net salesa $ 30,769 $ 36,695 $ 46,709 $ 47,198
Cost of goods sold 21,650 25,635 31,957 31,780
Gross profita 9,119 11,060 14,752 15,418
Advertising and sales promotions 4,742 4,241 5,030 5,130
General and administrative 6,068 5,403 6,394 7,063
Operating income (loss) (1,691) 1,416 3,328 3,225
Interest income 308 550 801 1,004
Interest expense (88) (107) (88) (67)
Other income (expense)-netb 1,738 (77) (108) (20)
Income taxes 96 729 1,511 1,616
Net income $ 171 $ 1,053 $ 2,422 $ 2,526

Balance Sheet Data (in thousands):

Cash $ 5,550 $ 8,109 $ 10,723 $ 13,191
Working capital 9,342 11,107 10,830 11,735
Total assets 20,857 23,006 26,159 29,518
Long-term debt 1,269 1,094 919 744
Stockholders' equity 16,162 17,215 18,215 19,496

Per Share Data:

Weighted average number
of common shares outstanding 3,316 3,316 3,316 3,316
Net income per share $ 0.05 $ 0.32 $ 0.73 $ 0.76
Cash dividend per share - - $ 0.40 $ 0.40
a
Beginning in 1991 the Company increased prices for products and assumed responsibility for advertising and sales
promotion costs previously shared with licensees. This change in business practice accounts for approximately one-half of
the increase in net sales for 1991 with a similar impact on 1991 gross profit.
b
Includes the gain on sale of building of approximately $1,700,000 in 1987.
ROE 12.96%
Dividend Payout Ratio 0.526315789473684

3,792 2,998 107

(794) (2,891)

Principal Payments on the loanPrincipal Payments on the loanPrincipal Payments on the loan
175 175 175
 (1,456)
(1,563)

s on the loan
Exhibit 6 Projected Income Statements for Eskimo Pie by Goldman Sachsa

Year Ended December 31,

1991 1992 1993

Net Sales $56,655 $59,228 $59,961

Operating expenses 52,610 54,755 55,337
Operating income 4,045 4,473 4,624
Interest income 828 890 1,058
Interest expense 52.5 38.5 24.5
Pretax income 4,821 5,324 5,657
Income taxes 1,928 2,130 2,263
Tax rate 40.00% 40.00% 40.00%
Net income $2,893 $3,195 $3,394
Margin 5.10% 5.40% 5.70%
Earning per share $0.87 $0.96 $1.03
Average shares outstanding 3,316.00 3,316.00 3,316.00

a
Adjusted for 2.5 to 1.0 stock split in March 1992
Estimated Growth Therafter
6.23%
Exhibit 8b Information about Comparable Companies

Company Sales Cash Flowab

Ben & Jerry's 97.0 6.7
Dreyer's Grand Ice Cream 354.9 24.1
Empire of Carolina, Inc. 243.1 16.8
Steve's Homemade Ice Cream 35.1 2.7
Hershey Foods Corp. 2,899.2 292.3
Tootsie Roll Inds. 207.9 32.5

Tax Rate 40%

Beta unlevered of Eskimo Pie 0.96

Beta levered of Eskimo Pie 0.98

Krf 7.92%
Km 13.99%
Km-Krf 6.07%

Ke 13.9%
Kd 9.56%

Debt 744
Equity 19,496
Total 20,240

WACC 13.6%

Sustainable growth rate(Long-Term) 8%

 Operating Incomeb Net Incomeb
10.2 3.7
37.0 15.9
37.4 8.8
3.9 1.8
463.0 219.5
47.2 25.5

Net Income
ITS
Depreciation and amortization
Capex & NOWC
FCF

NPV $23,832.47
Long Term Debt 744
Cash $ 13,191
Equity Value $36,279.47
Number of Shares 3,316
Share Value at the beginning of the year $10.94

Based on the Goldman Sachs estimates Equi

Nestle was paying 61 million dollars when Eq

Net Income
ITS
Depreciation and amortization
Capex & NOWC
FCF
NPV $56,490.00
Long Term Debt 744
Cash $ 13,191
Equity Value $68,937.00
Number of Shares 3,316
Share Value at the beginning of the year $20.79

Based on the recent events(Expected Income 4000 in 1991-) Equity

Nestle was paying 61 million dollars when Equity Value is 68,937.00
 Market Value
Book Value of Equity of Equity Total Debt Beta
26.3 110.1 2.8 1.2
113.1 534.0 44.3 1.4
45.1 51.4 89.8 0.3
11.1 37.4 3.1 2.5
1,335.3 4,002.5 282.9 1
152.8 728.8 0.0 1.0

Year Ended December 31

1991 1992 1993 1994 1995
$2,893 $3,195 $3,394
31.5 23.1 14.7
1326 1326 1326
2740 2740 2740
$1,511 $1,804 $1,995 $2,118.94 $2,250.92
$28,908.70
$1,511 $1,804 $30,903

dman Sachs estimates Equity was overvalued.

g 61 million dollars when Equity Value was 36279.47$

Our Estimates
Year Ended December 31
1991 1992 1993 1994 1995
4000 4320 4665.6
31.5 23.1 14.7
1326 922 922
2740 1,905 1,905
2618 3360 3697 3992.791677
71835.471075754
2618 3360 75533
ome 4000 in 1991-) Equity was undervalued by Nestle.
n Equity Value is 68,937.00$ (At the start of the year)
I. Treasury Yields
90 day 4.56%

Six months 4.61%

One year 4.64%
Five years 6.62%
Ten years 7.42%
Thirty years 7.92%

II. Corporate Borrowing Rates

Long-term Bond Yields
AA 8.74%
A 9.27%
BBB 9.56%
BB 11.44%
B 14.68%
Floating Rates
Prime rate 7.50%
Prime commercial paper (6 months) 4.76%

Sustainable Growth Rate(Long-Term) 6.23%

Long term Debt at the end of 1990 744
Cash at the end of 1990 ###
Number of shares 3,316
Equity/ Net income Ratio

Company Net Income Equity (Market Value)

Ben & Jerry's 3.7 110.1
Dreyer's Grand Ice Cream 15.9 534
Empire of Carolina, Inc. 8.8 51.4
Steve's Homemade Ice Cream 1.8 37.4
Hershey Foods Corp. 219.5 4002.5
Tootsie Roll Inds. 25.5 728.8
Average

P/E Ratio

Company Net Income Equity (Market Value)

Ben & Jerry's 3.7 110.1
Dreyer's Grand Ice Cream 15.9 534
Empire of Carolina, Inc. 8.8 51.4
Steve's Homemade Ice Cream 1.8 37.4
Hershey Foods Corp. 219.5 4002.5
Tootsie Roll Inds. 25.5 728.8
Average
Equity/ Net income ratio Eskimo Pie
29.7567567567568 Equity/ Net income ratio
33.5849056603774 Net Income (Exhibit6, millions)
5.84090909090909 Cash and cash equivalents at beginning of year (Exhibit2)
20.7777777777778 Equity (Market Value) (millions)
18.2346241457859
28.5803921568627
22.7958942647449

P/E Ratio Eskimo Pie

29.76 P/E Ratio
33.58 Earning per share (Exhibit6, 1991)
5.84 Market Price per share (P/E * EPS)
20.78 Shares outstanding (Exhibit1, millions)
18.23 Total Proceeds (thousands)
28.58
22.7958942647449
22.795894264745
$2.89
$ 13.19
$79.14

22.80
$0.87
19.83
3.32
65.764331282248