I was also looking at lend lease. I tried to value it 2 ways

1.Buffetts Way (according to Halstrom's book)
owner earnings=net income +depreciation +amortisation - capital expenditure = EBITDA - capital expenditures = 292.8m - 29.3m = 264m

owner earnings divided by the bond rate (I made this figure 6% at present, though I know we get about 5% at the moment) = $4,400m

there are 428m shares on issue. which values each share at at $10.48 per share. [the above figures were taken from the financials ending dec 2000]

2. enterprise value/EBDIT

ENTERPRISE VALUE = market cap + borrowings-cash at bank - minority interests
mkt cap = 11.92 (price of shares) x 470 (number of shares)

borrowings = 87.9 9(current) +980.8 (non-current)
cash at bank= 852.4m

EBIT = 292.8

therefore EV/EBDIT = 25.7 -> 4% return

I also calculated return on equity= after tax profit/shareholders equity x 100 = 108.6/647.4 x 100= 2.9%

did I do this right? If I did then lend lease looks a bit too high at the moment.

Judy