Download MRK 09-10

MERCK AND CO, INC.
Ticker: MRK
Sector:
Drugs
Industry: Healthcare
Recommendation: SELL
Pricing
Closing Price
52-wk High
52-wk Low
$49.57 (9/7/2007)
$55.14
$49.30
Stop-Loss
N/A
Market Data
Market Cap
Total assets
Trading vol
$109,473 (millions)
$44,569 (millions)
11.23 (millions)
Valuation
EPS
P/E
PEG
Div Yield
$2.12 (ttm)
22.9 (ttm)
1.54 (ttm)
3% (ttm)
Profitability & Effectiveness
ROA
12.16% (ttm)
ROE
24.74% (ttm)
Profit Margin 20.55% (ttm)
Oper Margin 24.48% (ttm)
Gross Margin 73.00% (ttm)
Analyst:
Email:
Date:
Jeremy Hollingshead
[email protected]
September 8, 2007
DESCRIPTION
Merck and Company, Inc. is a multi-national
pharmaceutical
company
that
"discovers,
develops,
manufactures and markets a broad range" of human and
veterinary drugs.1 Merck markets its products to hospitals, drug
wholesalers and retailers, clinics and governments through an
extensive network of pharmaceutical sales representatives.
Merck takes pride in its innovative research approaches,
expansive research pipeline and strong commitment to its
patients' needs.
RESEARCH PIPELINE
Entering 2007, Merck had three drugs either awaiting
FDA approval or recently approved: Januvia (diabetes), Emend
(CINV) and Arcoxia (COX-2 Inhibiter). On October 17, 2006,
the FDA issued approved Januvia for the treatment of Type II
Diabetes.2 On April 27, 2007, the FDA issued a non-approval
letter for the COX-2 Inhibiter Arcoxia, citing similar concerns to
the withdrawn drug Vioxx.3 On May 11, 2007, Merck received
an approvable letter for its chemotherapy induced nausea and
vomiting drug Emend.4 Prior to final approval, however, the
FDA has required Merck to provide additional manufacturing
1
Merck and Co, Inc. 2006 Annual Report
U.S. Food and Drug Administration, "FDA News." http://www.fda.gov/bbs/topics/NEWS/2006/NEW01492.html
(October 17, 2006).
3
Merck and Co., Inc., "Research and Development News."
http://www.merck.com/newsroom/press_releases/research_and_development/2007_0427.html (April 27, 2007).
4
Merck and Co., Inc., "Research and Development News."
http://www.merck.com/newsroom/press_releases/research_and_development/2007_0511.html (May 11, 2007).
2
1 of 11
Jeremy Hollingshead
[email protected]
and stability data on the drug.5 In May, Merck anticipated it could meet the FDA's demands
"within a few months" and expected final approval within six additional months per FDA
policy.6 As of September 8, 2007, Merck has not received final approval for Emend.
Merck currently has received acceptance of several new drug applications (NDAs).
Merck's NDA for antiviral HIV drug, Isentress, was granted priority review. 7 Under FDA
guidelines, the FDA is expected to review and issue a decision on the drug within six months of
submission.8 Merck expects an FDA decision by Mid-October.9 On August 28, 2007, the NDA
for the Merck/Shering-Plough drug loratadine/montelukast was accepted by the FDA. 10 Merck
is asking the FDA to approve loratadine/montelukast for the "treatment of allergic rhinitis
symptoms in patients who want relief from nasal congestion."11 Since the drug's NDA was
accepted under standard FDA review, it is unknown when the drugs application may or may not
be approved. Finally, on August 29, 2007, Merck announced FDA acceptance of a NDA for an
investigational lipid-modifier named Cordaptive.12
Finally, Table 1 below illustrates Merck's research pipeline from 2003 until 2006. Since
2003, the number of drugs in Phase I trials have increased 107%, Phase II trials have increased
233%, Phase III trials increased from 0 to 5 between 2003 and 2004 then remained steady
through 2006 and drugs awaiting FDA action have increased 400% since 2003.
RESEARCH PIPELINE
Phase I
2006
2005
2004
2003
Table 1
Phase II
29
28
20
14
Phase III
20
18
18
6
FDA Action Required
5
6
5
0
8
7
3
2
FINANCIAL ANALYSIS
COST REDUCTION AND RESEARCH STRATEGY
5
Id.
Id.
7
Merck and Co., Inc., "Research and Development News."
http://www.merck.com/newsroom/press_releases/research_and_development/2007_0627.html (June 27, 2007).
8
Id.
9
Id.
10
Merck and Co., Inc., "Research and Development News."
http://www.merck.com/newsroom/press_releases/research_and_development/2007_0828.html (August 28, 2007).
11
Id.
12
Merck and Co., Inc., "Research and Development News."
http://www.merck.com/newsroom/press_releases/research_and_development/2007_0829.html (August 29, 2007).
6
2 of 11
On September 30, 2004, Merck announced the voluntary withdrawal of its COX-2
inhibitor Vioxx.13 The Vioxx withdrawal cost Merck an estimated $700-750 million in 2004
fourth quarter sales.14 Worse, Merck lost billions in annual sales between September 2004 and
present and set aside $750 million for Vioxx related litigation.15 As early as February 2005, then
CEO Raymond Gilmartin outlined a comprehensive cost savings program aimed at offsetting the
legal expenses and lost sales from the Vioxx withdrawal.16 The expense reduction program
called for the elimination of thousands of employees, inventory reduction, procurement changes
and improvements in manufacturing processes.17 Simultaneously, Gilmartin hoped to increase
sales through reducing the amount of drugs each pharmaceutical representative sells as well as
increasing research and development on innovative drugs.18
When Dick Clark was appointed CEO in 2005, he continued Gilmartin's cost reduction
strategy and hoped to reinvest the cost savings into product growth, presumably through
increased research and development.19 The results of Merck's efforts to reduce expenses are
highlighted by Table 2 below. Since the 2004 Annual Report, Merck's total expenses have
9.66%, materials and production expenses have increased 20.99%, marketing and administrative
expenses have increased 11.15% and R&D expenses have increased 19.27%. During the same
time period, sales declined 1.32% and net income has decreased by 23.73% (See Table 3).
Because sales and net income have decreased while expenses have increased, it appears Merck is
failing to achieve its cost reduction objectives. In 2006, total expenses increased 12%, marketing
and administrative increased 58.56% and material/production costs increased 16.54%.
Equally troubling, Merck has failed to meet its inventory reduction and production
efficiency goals. Between 2004 and 2006, Merck's inventory increased 15.11% possibly the
result of decreased sales. Second, as previously stated, materials and production expenses
increased by over 20% despite a 1.32% decrease in sales. Merck's problems extend farther back
than 2004. Since 2001, Merck's material and production expense has increased nearly 21% with
total expenses increasing 10%. During the same time period, sales have only increased 6.78%
and net income has dropped 39% (See Table 3).
On the positive side, Merck has decreased its number of employees by 4.15% (See Table
3). Therefore, unless Merck has significantly increased its employees' salaries, any increase in
marketing and administration costs should be attributed to an increased marketing budget which
is not necessarily problematic. Also positive, Merck's 19.27% increase in research and
development is consistent with its stated objective of increasing growth through product
innovation. Unfortunately, at least for now, Merck's increase in research expenditures has not
translated into additional sales or net income. Typically, though, it can take up to a decade for
new research to result in a new, FDA approved drug.
13
Merck and Co, Inc. 2004 Annual Report
Id.
15
Merck and Co., Inc. 2005 Annual Report; see also Merck and Co., Inc. 2004 Annual Report
16
Merck and Co, Inc. 2004 Annual Report
17
Id.
18
Id.
19
Merck and Co., Inc. 2005 Annual Report
14
3 of 11
In conclusion, although Merck has reduced its workforce and increased its research and
development budget, it has failed to make significant progress towards its cost reduction goal.
Moreover, despite a nearly 20% increase in research and development, Merck has seen a steady
decline in its net income and marginal, at best, growth.
SUMMARY OF EXPENSES
2006
Total Expenses
$ 16,416.60
% Change
Materials and Production
12.07%
$
% Change
Marketing and Administrative
$
$
$ 5,149.60
4,782.90
$ (2,294.40)
$ (1,717.10)
% Change
(382.70)
247.28%
Restructuring Costs
$
Acquired Research
$
142.30
-
$ 4,010.20
(110.20)
$ (1,008.20)
$
(344.00)
$
322.20
$
107.60
-
$
-
(474.20)
$
(81.60)
$
$
101.80
5,652.20
2,677.20
$
(644.70)
$
5,700.60
$
2,456.40
NA
NA
$
(865.90)
$
155.00
-25.55%
$
202.30
3,624.80
NA
8.99%
-140.34%
$
NA
$
-0.85%
-26.45%
321.57%
$
$
22.51%
112.61%
-67.97%
$
$ 3,279.90
3,907.10
7.79%
13.14%
22.27%
70.31%
$
$ 6,394.90
2001
$ 11,250.90
4.83%
$
10.45%
14.88%
-4.04%
33.62%
$
$ 7,346.30
2002
$ 11,794.10
13.91%
$ 4,315.30
14.94%
-29.90%
$ 3,848.00
2003
$ 13,434.30
11.43%
$ 4,959.80
3.83%
24.30%
% Change
Other Expense (Income)
8,165.40
2004
$14,970.00
-2.15%
$ 5,149.60
58.56%
% Change
Equity Income from Affiliates
6,001.10
16.54%
% Change
R&D Expenses
2005
$ 14,648.00
NA
30.52%
NA
$
-
$
-
$
-
$
-
Table 2
FINANCIAL HIGHLIGHTS
In 2006, Merck increased sales by 2.84%, but net income dropped 4.26% marking a
continued decline in net income that began in 2002. Merck has made significant progress in
restoring its earnings per share in the aftermath of Merck's Vioxx withdrawal. One of Merck's
major financial goals for the upcoming years is to attain double digit growth in earnings per
share.20 It remains unclear whether Merck will be able to attain its goal in light of both its failure
to achieve significant cost reduction and the problems it has faced with FDA approval on its
recent NDAs. Table 3 below identifies Merck's most relevant financial data.
Prior to 2006, Merck was able to increase its dividends per share by 26%. In 2006, its
dividends per share remained unchanged from 2005 at $1.52/share. Since 2003, Merck has seen
a steady decline in the ratio of its net income to total assets. In 2006, Merck's net income to total
assets dropped below 10% for the first time in more than five years. The 2006 decline in the
ratio resulted from a .62% decline in total assets coupled with a 4.26% decline in net income.
For years prior to 2006, the ratio's decline resulted from asset growth that outpaced net income.
20
Merck and Co., Inc. 2006 Annual Report
4 of 11
SIGNIFICANT FINANCIALS
2006
Sales
$ 22,636.00
% Change
Net Income
$ 4,433.80
$ 4,631.30
$
1.52
0.00%
$ 44,569.80
% Change
NI/TA
$22,938.60
2.10
1.52
$ 5,813.40
$ 6,830.90
-14.90%
$
2.61
$
1.49
$ 21,445.80
3.03
$
1.45
2.84%
$ 40,587.50
2001
$ 21,199.00
1.16%
$ 7,149.50
$
-1.82%
$
-3.50%
2.76%
$42,572.80
2002
-4.46%
$
-13.86%
2.01%
$44,845.80
$ 22,485.90
4.85%
-19.54%
$
2003
2.01%
-20.33%
$
-3.33%
% Change
Tot. Assets
2.03
2004
-4.04%
-4.26%
$
% Change
Div/Share
$ 22,011.90
2.84%
% Change
EPS (diluted)
2005
3.14
6.74%
$
0.00%
$
1.41
2.92%
$ 47,561.20
7,281.80
3.14
8.28%
$
1.37
13.22%
$ 44,021.20
-0.62%
5.34%
4.89%
-14.66%
8.04%
9.63%
9.95%
10.33%
13.66%
16.83%
15.03%
16.54%
78,100
# Employees
60,000
61,500
62,600
63,200
77,300
% Change
-2.44%
-1.76%
-0.95%
-18.24%
-1.02%
2,187.70
2,200.40
2,226.40
2,253.10
2,277.00
2,322.30
-0.58%
-1.17%
-1.19%
-1.05%
-1.95%
-21.76%
2,185.50
$ 2,411.90
$ 1,898.70
$ 2,554.70
-9.39%
27.03%
-25.68%
-13.82%
Avg Shares Outstanding
% Change
Inventory
% Change
$
$ 2,964.30
Table 3
DEBT ANALYSIS
Since 2001, Merck's total current liabilities have increased 10.21%, long term debt has
increased 15.68% and long term debt to equity has increased 5.73%. On the positive,
shareholders' equity has increased 9.41%, and the current ratio has improved 6.62%. On the
whole, Merck's historical financing strategy has been solid. Its long term debt to equity ratios
have remained consistent with most of Merck's growth being funded without the use of long term
debt. Additionally, Merck's current ratio suggests its current assets have historically well
covered its current liabilities.
For 2006, Merck's debt outlook was somewhat more troubling than its outlook from
2001-2006. Although its debt to equity ratio is comparable to previous years, it is increasingly
turning to long term debt to finance its operations while simultaneously reducing stockholders'
equity and shares outstanding (See Tables 3 and 4). Still, Merck has decreased its current
liabilities by 4.37% and maintained a safe current ratio.
In conclusion, some aspects of Merck's debt usage strategy could lead an investor to
wonder if Merck's is making the best decisions regarding its ongoing financing. Long term debt
and debt to equity have increased since 2004. Unfortunately, presently, Merck's increase in debt
5 of 11
has not translated to increased sales or net income. Also of concern, Merck's current ratio of 1.2
is well below the industry average of 1.9 and even further below the sector average of 2.8.21
DEBT ASSESSMENT
2006
Total Current Liabilities
$ 12,722.70
% Change
2005
$ 13,303.50
-4.37%
Long Term Debt
$ 5,551.00
% Change
$ 6,330.30
% Change
$
5,125.60
$
6,092.90
$ 17,559.70
% Change
Long term Debt/Equity
% Change
Current Ratio
22.72%
$
4,691.50
$
6,442.10
9.25%
3.90%
Stockholders' Equity
$ 11,744.10
13.28%
8.30%
Deferred Income Taxes
2004
-7.94%
-5.42%
$ 17,916.60
0.18%
$ 17,288.20
2003
$ 9,569.60
2002
$ 12,375.20
-22.67%
$ 5,096.00
-10.42%
$ 15,576.40
$ 11,544.20
7.20%
$
4,879.00
$
7,178.20
4.45%
$ 6,430.30
2001
$ 4,798.60
1.68%
$ 6,790.80
5.70%
$ 18,200.50
-1.99%
3.63%
10.99%
-14.42%
13.40%
0.32
0.29
0.27
0.33
0.27
10.50%
5.42%
-17.05%
22.04%
-10.34%
1.20
1.58
1.15
1.20
1.20
$ 16,050.10
0.30
1.12
Table 4
CASH FLOW ANALYSIS
In 2006, Merck's net cash flow decreased 154%, its cash flows used by investing
increased 315%, cash flows used by financing increased 84% and cash flows from operations
declined 11%. Merck's 2006 cash flow situation indicates a company having problems fully
achieving its cash flow objectives. Since 2002, Merck has had difficulty achieving significant
net cash flow increases (See Table 5). Historically, Merck's situation improved for 2004 and was
remarkable in 2005, but substantially declined again in 2006.
STATEMENT OF CASH FLOWS SUMMARY
2006
Cash Flows from Operations
$ 6,765.20
% Change
-11.08%
Cash Flows Used by Investing
$ (4,883.70)
% Change
-315.41%
Cash Flows Used by Financing
$ (5,604.20)
% Change
-84.32%
Net Cash Flow Increase/Decrease
$ (3,670.60)
2005
$ 7,608.50
-13.53%
$ 2,267.20
238.47%
$ (3,040.40)
45.62%
$ 6,706.50
2004
$ 8,799.10
4.42%
$ (1,638.10)
138.71%
$ (5,591.40)
18.11%
$ 1,677.80
2003
$ 8,426.50
2002
$ 8,710.60
-3.26%
$ (4,232.20)
-4.07%
$ (3,768.00)
-12.00%
$ (6,827.90)
13.00%
$ (5,531.90)
-23.43%
$ (1,042.00)
-9.08%
$
99.00
Table 5
COMPETITOR ANALYSIS
21
Reuters Online. http://stocks.us.reuters.com/stocks/ratios.asp?rpc=66&symbol=MRK (Accessed September 9,
2007).
6 of 11
Merck's largest competitors in the drug sector are Phizer and Johnson and Johnson.
Phizer has nearly twice Merck's net income, but its return on equity is only 13.81% and its return
on assets is 8.09%.22 Phizer's earnings per share are over 20% higher than Merck's. Phizer also
seems to manage its debt better than Merck.23 Its debt to equity ratio is .12, significantly lower
than Merck's. Phizer also has a current ratio of 2.75 compared to Merck's current ratio of 1.2. 24
Overall, Phizer seems to properly manage its debt, but it is failing to justify its conservatism with
return to shareholders.
Johnson and Johnson's return on assets is 10% higher than Merck's and its return on
equity is marginally better than Merck's.25 Johnson and Johnson's beta of .31 is remarkably
better within this portfolio than Merck's.26 Johnson and Johnson has a debt to equity of .15.
Overall, Johnson and Johnson appears to be a well managed drug manufacturer with excellent
management of its resources.
VALUATION
STOCK PRICE
Over the previous 12 months, Merck's stock price climbed to its yearly high of $55.14 per
share in May and subsequently declined to its current price of $49.57 per share. Its trading
volume spiked in April around the time it received non-approval from the FDA for Arcoxia.
Other than a small spike in July, Merck's trading volume has remained constant between 11
million and 23 million shares (See Graph 1).
22
Yahoo Finance. http://finance.yahoo.com/q/ks?s=PFE (September 9, 2007).
Id.
24
Id.
25
Yahoo Finance, http://finance.yahoo.com/q/ks?s=JNJ (September 9, 2007).
26
Id.
23
7 of 11
Graph 127
Merck's price relative to sales and PEG ratios are comparable to both the sector and
industry averages (See Table 6). Its price to book average is over half the sector and industry
averages indicating that investors have been willing to pay more relative to book value for both
the sector and industry than Merck. The ratio may also indicate the possibility that Merck's stock
is currently selling at a discount. Merck's PE ratio is 30.5% higher than the sector average, but
lower than the industry average. Merck's high PE ratio most likely relates to its low earnings.
As was seen above, the sector as a whole is outperforming Merck's earnings resulting in a lower
PE ratio for the sector. Finally, Merck has a beta of .92.28 Although Merck's beta remains below
the S&P 500, it is much more volatile than the sector and industry. The stock volatility comes as
no surprise given Merck's inconsistent sales results and steadily declining net income.
Nevertheless, Merck's beta is still safely within the portfolio's standards.
STOCK RATIOS
P/S
PEG
P/Book
Beta
PE
Table 6
27
28
Merck
4.69
1.54
5.62
0.92
22.58
Morningstar.com
Yahoo Finance
8 of 11
Sector
5.06
1.61
11.43
0.72
17.3
Industry
3.57
16.21
0.69
27.05
INTRINSIC VALUE
GORDON GROWTH MODEL
Since Merck has a long history of issuing strong dividends and a relatively predictable
growth rate, the Gordon Growth Model is particularly applicable in evaluating Merck's stock.
Moreover, as recently as 2006, Merck has indicated a strong desire to continue to increase
dividends per share into the foreseeable future.29 Table 7 below summarizes the assumptions
made in evaluating Merck's intrinsic value under the Gordon Growth Model. Earnings per share
and dividends per share were taken from Merck's 2006 Annual Report. The dividend payout rate
was calculated using the earnings per share and dividends per share provided in the 2006 Annual
Report. The risk free rate is the 90 day U.S. Treasury Bill as of September 7, 2007.30 As
indicated above, Merck's beta was taken from Yahoo Finance's beta calculation. The cost of
capital was calculated using the 5 year effective annual yield of the S&P 500 which calculated to
10%, Merck's beta of .92 and the risk free rate of 3.9%. Growth was estimated between 1
percent and 5 percent per annum based upon the trailing seven year analysis of Merck's Annual
Reports. Table 8 below shows the change in intrinsic value based upon changes in growth rates.
The arithmetic average of Merck's net income since 2000 is -6.5%. The arithmetic
average of Merck's earnings per share is a similar -5.33%. The arithmetic average of Merck's
dividends since 2000 is 4%. Even giving Merck the benefit of its dividend growth rate, its
intrinsic value is only $28.69. A more realistic growth rate of 2% shows a value of $20.65.
Under any assumption, Merck's stock is currently substantially overvalued.
GORDON ASSUMPTIONS
Assumption
EPS
Payout Rate
Beta
Rf Rate
Cost Capital
Growth
Div/Share
Cost Equity
Table 7
Value
$
$
2.03
74.88%
0.92
3.90%
9.81%
1-5%
1.52
6.66%
GROWTH ASSUMPTIONS
Growth Rate
5%
4%
3.50%
3%
2.50%
2.00%
1.50%
1.00%
Table 8
Intrinsic Value
$
$
$
$
$
$
$
$
BUFFETT OWNERS' EARNING MODEL
29
30
Merck and Co., Inc. 2006 Annual Report
Yahoo Finance, http://finance.yahoo.com/bonds (September 9, 2007).
9 of 11
35.39
28.69
26.18
24.05
22.23
20.65
19.26
18.04
Under the Buffett Owners' Earning Model, Merck is also significantly overvalued. The
discount rate used in the Buffett model is the same as seen in Table 7 above. It was assumed that
Merck would achieve similar growth for the next ten years. Although this assumption is
significant, as will be seen below, the effect on the valuation for the portfolio's purposes is
negligible. The growth rate was placed at a liberal 4% for the first stage and 3% for the residual
value (See Appendix 1 below). Based upon these assumptions, the intrinsic value is $23.08.
Even changing the first state growth rate to 10% with a residual growth rate of 6%, Merck's
intrinsic value only increases to $53.41 which is not a sufficiently large margin of safety to
justify purchasing the stock.
RECOMMENDATIONS
Two questions must be answered in determining the recommendation for a stock: 1) Is
the company a good company? and 2) Is the company's stock trading at a discount? For Merck,
both of those questions can be answered "no." Merck's earnings per share and net income have
steadily declined since 2000, its sales' growth is insignificant, and it is failing to achieve its cost
cutting objectives. To make matters worse, Merck continues to face litigation risks as the result
of Vioxx, and it is taking on more debt without translating the debt into meaningful results.
Finally, Merck is not competing well against its two main competitors, Johnson and Johnson and
Phizer. Both companies are better utilizing debt while returning superior results to their
shareholders.
Second, under both the Gordon Growth Model and Warren Buffet Owners' Earnings
Discount Model, Merck is currently significantly overpriced. Even under the most liberal
assumptions, Merck's intrinsic value is either far below its current price or marginally higher,
such that no margin of safety exists for the stock. In conclusion, it is recommended that Merck's
stock be sold.
10 of 11
APPENDIX 1
Warren Buffett Owners' Earnings Discount Model
Assuming discount rate (k) of
9.81%
Owner Earnings in 2004:
Net Income
$
4,433,800,000.00
Depreciation and Amortization
$
2,268,400,000.00
Capital Expenditures
$
(980,200,000.00)
Owner Earnings
$
5,722,000,000.00
Year:
2007
Prior Year Owner Earnings
$
5,722,000,000.0
Owner Earnings
$
5,950,880,000.0
Discounted Value per annum
$ 5,950,880,000.00
First Stage Growth Rate (add)
2008
$ 5,950,880,000.0
$
6,436,471,808.0
$ 6,693,930,680.3
$
6,961,687,907.5
$ 5,636,021,491.67
$
5,337,822,011.96
$ 5,055,400,138.82
$
4,787,921,085.85
$
7,529,761,640.8
$
8,144,190,190.7
4.0%
$
6,961,687,907.5
7,240,155,423.8
4.0%
Residual Value
Owner Earnings in year 10
$
$
Second Stage Growth Rate (g)
Owner Earnings in year 11
$
$
7,529,761,640.8
$ 4,294,670,798.87
8,724,056,532.3
6.81%
$
128,106,557,008.10
Present Value of Residual
$50,251,895,017.22
Intrinsic Value of Company
$97,417,296,321.88
Shares outstanding (diluted)
Intrinsic Value per share
7,240,155,423.8
$ 4,534,594,234.85
4,220,000,000.00
$
23.08
11 of 11
7,830,952,106.4
$ 4,067,441,608.99
4.0%
2015
$ 7,830,952,106.4
4.0%
$
$ 6,693,930,680.3
4.0%
2014
4.0%
3.00%
Capitalization rate (k-g)
Value at end of year 10
8,469,957,798.3
4.0%
2013
$
$ 6,436,471,808.0
2011
6,188,915,200.0
$
2012
$47,165,401,304.7
2010
6,188,915,200.0
4.0%
Sum of present value of owner
earnings
2009
$
2016
4.0%
$
8,144,190,190.7
$ 3,852,235,018.07
4.0%
$
8,469,957,798.3
$
3,648,414,915.58