Exhibit 3

Summary Financial Information for UST Inc. (in millions, except per-share data and ratios)
1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

5-Yr CAGR

10-Yr CAGR

Summary Operating Dataa

Net Sales
Gross Profit
EBITDA
EBIT
Interest Expense (Income)
Pretax Earnings
Net Income

$611.9
437.3
277.9
260.2
(1.1)
261.3
162.2

$673.9
488.4
315.0
298.4
(3.2)
301.6
190.5

$756.4
564.6
368.6
349.0
(3.2)
352.2
223.3

$898.4
670.9
446.4
423.8
(2.3)
426.1
265.9

$1,032.2
775.4
525.2
500.8
(1.9)
502.6
312.6

$1,097.5
851.1
591.4
564.8
(2.0)
566.8
347.9

$1,204.0
952.0
668.9
640.7
0.1
640.6
387.5

$1,305.8
$1,043.6
736.9
707.8
3.2
704.6
429.8

$1,371.7
$1,098.9
779.2
750.9
6.4
744.5
464.0

$1,401.7
$1,109.8
749.8
719.3
7.5
703.9
443.9

$1,423.2
$1,139.7
785
753.3
(2.2)
755.5
467.9

5%

9%

6%
6%

11%
11%

6%

11%

Free Operating Cash Flow

$135.2

$195.1

$217.8

$247.3

$267.9

$340.7

$399.2

$521.2

$456.4

$287.4

$429.5

5%

12%

-$0.74
$0.71
$0.37
50%

-$0.87
$0.83
$0.46
53%

-$1.04
$0.99
$0.55
53%

-$1.26
$1.20
$0.66
52%

-$1.49
$1.43
$0.80
54%

$(35.0)
$1.67
$1.63
$0.96
58%

-$1.92
$1.88
$1.12
58%

-$2.21
$2.17
$1.30
59%

-$2.48
$2.44
$1.48
60%

$8.0
$2.41
$2.39
$1.62
67%

$21.0
$2.52
$2.50
$1.62
64%

9%
9%
11%

13%
13%
16%

$72.7
$598.0
$21.8
$30.8
$453.3
220.6
$221.1
$20.8
$81.7
$67.4

$54.6
$630.2
$6.8
$14.5
$482.3
219.8
$209.3
$23.7
$101.2
$97.5

$46.6
$622.6
$3.1
$4.8
$473.9
215.2
$197.2
$37.2
$118.3
$151.3

$41.5
$656.5
$1.3
$482.9
211.6
$210.0
$28.4
$139.7
$184.4

$36.4
$674.0
$516.6
209.8
$249.0
$30.1
$168.0
$212.6

$25.3
$706.2
$40.0
$40.0
$463.0
208.5
$228.4
$54.5
$199.7
$236.7

$50.7
$741.2
$125.0
$125.0
$361.7
202
$221.2
$23.7
$225.7
$298.8

$69.4
$784.0
$100.0
$200.0
$292.8
194.4
$144.8
$14.0
$252.4
$274.8

$54.5
$806.6
$100.0
$250.0
$281.2
187.4
$144.0
$36.7
$277.3
$237.8

$6.9
$826.4
$100.0
$110.0
$436.8
183.9
$275.3
$55.8
$298.1
$45.7

$33.2
$913.3
$100.0
$100.0
$468.3
185.5
$309.9
$35.5
$301.1
$151.6

$10.50
$15.38
$18.25
$6.00
$9.63
$12.38
$10.25
$15.31
$18.25
13.9x
17.6x
17.5x
$2,260.6 $3,366.0 $3,926.6

$33.88
$16.38
$32.75
26. 0x
$6,930.0

$35.38
$25.38
$32.00
21.5x
$6,713.7

$32.75
$24.38
$27.75
16.6x
$5,785.0

$31.50
$23.63
$27.88
14.5x
$5,630.6

$36.00
$26.63
$33.38
15.1x
$6,487.2

$35.88
$28.25
$32.38
13.1x
$6,066.6

$36.94
$25.50
$36.94
15.3x
$6,794.0

$36.88
$24.56
$34.88
13.8x
$6,470.8

5%

13%

5-Yr Avg

10-Yr Avg

79.7%
55.5%
53.3%
32.7%
122.8%
55.3%
22.7%
30.2%

77.3%
52.7%
50.4%
31.3%
89.1%
48.2%
12.4%
16.3%

Special Charges/Non-Recurring Items (Gains)b

Basic Earnings per Share
Diluted Earnings per Share
Dividend per Share
Dividend Payout Ratio
Balance Sheet and Cash Flow Data
Cash and Cash Equivalents
Total Assets
Long-Term Debt
Total Debt
Shareholders' Equity
Average Basic Shares Outstanding
Working Capital
Capital Expendituresc
Dividends Paid
Share Repurchases
Stock Price Data
High
Low
Year End
Price/Earnings Ratiod
Market Equitye
Selected Growth Rates and Ratios
Sales Growth
Net Income Growth
Dividend Growth
Gross Profit Margin
EBITDA Margin
EBIT Margin
Net Margin
Return on Average Equity
Return on Average Assets
Long-Term Debt/Capitalization
Total Debt/Capitalization

Source:

7.2%
23.9%
23.3%
71.5%
45.4%
42.5%
26.5%
38.0%
28.3%
4.6%
6.4%

10.1%
17.5%
24.3%
72.5%
46.7%
44.3%
28.3%
40.7%
31.0%
1.4%
2.9%

12.3%
17.2%
19.6%
74.6%
48.7%
46.1%
29.5%
46.7%
35.6%
0.6%
1.0%

18.8%
19.1%
20.0%
74.7%
49.7%
47.2%
29.6%
55.6%
41.6%
0.0%
0.3%

Company annual report for fiscal year ended December 31, 1998 and authors adjustments and calculations.

14.9%
17.5%
21.2%
75.1%
50.9%
48.5%
30.3%
62.5%
47.0%
0.0%
0.0%

6.3%
11.3%
20.0%
77.5%
53.9%
51.5%
31.7%
71.0%
50.4%
8.0%
8.0%

9.7%
11.4%
16.7%
79.1%
55.6%
53.2%
32.2%
94.0%
53.5%
25.7%
25.7%

8.5%
10.9%
16.1%
79.9%
56.4%
54.2%
32.9%
131.3%
56.4%
25.5%
40.6%

5.0%
8.0%
13.8%
80.1%
56.8%
54.7%
33.8%
161.7%
58.3%
26.2%
47.1%

2.2%
(4.3%)
9.5%
79.2%
53.5%
51.3%
31.7%
123.7%
54.4%
18.6%
20.1%

1.5%
5.4%
0.0%
80.1%
55.2%
52.9%
32.9%
103.4%
53.8%
17.6%
17.6%

Before the cumulative effect of accounting changes. Excludes settlement charges and other special charges or nonrecurring items. All net income adjustments apply a 40% tax rate.

Authors estimates of pretax settlement charges and other special charges or nonrecurring items. Does not include effect of accounting changes.

Additions for property, plant and equipment net of dispositions.

Based upon year-end stock price and basic earnings per share.

Based upon average basic shares outstanding and year-end stock price.

Exhibit 5

Summary Financial Information for UST Inc. (in millions, except per share data and

UST Inc.
Summary Operating Dataa
Fiscal Year End
Net Sales
Gross Profit
EBITDAb
EBITb
Interest Expense (Income)
Pretax Earnings
Net Income
Free Operating Cash Flow
Special Charges/Non-Recurring Items (Gains)c
Basic Earnings per Share
Diluted Earnings per Share
Dividend per Share (Common)
Dividend Payout Ratio

Tobacco Product Manufacturers

Philip
North Atlantic
Morris
Trading Co.

RJR Nabisco
Holdingsi

Tobacco Leaf Merchants

Standard
Universal
DiMon Inc.
Commercial
Corp

Dec 31, 1998

$1,423.2
1,139.7
785.0
753.3
(2.2)
755.5
467.9
$429.5
$21.0
$2.52
$2.50
$1.62
64%

Dec 31, 1998

$74,391.0
30,993.0
15,501.0
13,811.0
890.0
12,921.0
7,672.4
$6,076.4
$3,834.0
$3.16
$3.14
$1.68
53%

Dec 31, 1998

$93.1
60.9
36.3
29.1
24.9
4.2
1.0
$14.5
$(7.09)g
$(7.09)g
0%

Dec 31, 1998

$20,563.0
9,493.0
3,602.0
2,467.0
880.0
1,455.0
718.0
$2,016.0
$2,069.0
$2.22
$2.22
$2.05
92%

June 30, 1998

$2,171.8
266.9
200.2
156.7
83.8
72.9
52.0
$52.5
$16.9
$1.17
$1.16
$0.66
56%

March 31, 1998

$1,492.8
145.0
85.8
65.3
37.8
37.1
26.9
$(61.3)
$2.18
$2.05
0%

June 30, 1998

$4,287.2
613.6
329.5
278.4
64.0
231.3
130.4
$110.2
$(16.7)
$3.71
$3.68
$1.11
30%

$33.2
$913.3
$100.0
$100.0
$468.3
185.5
$309.9
$35.5

$4,081.0
$59,920.0
$12,615.0
$14,662.0
$16,197.0
2,429.0
$3,851.0
$1,804.0

$2.8
$260.0
$202.6
$215.6
$39.3
$(15.4)
528.2
$42.0
$0.5

$300.0
$28,892.0
$9,982.0
$10,467.0
$957.0
$7,809.0
323.9
$(259.0)
$576.0

$18.7
$1,797.5
$797.0
$1,079.5
$0.5
$421.9
44.5
$706.4
$36.6

$34.1
$839.5
$197.1
$469.9
$30.3
$149.6
12.4
$219.1
$9.7

$79.8
$2,056.7
$263.1
$849.6
$31.7
$547.9
35.2
$328.8
$90.0

Stock Price Data

Fiscal Year End
Price/Earnings Ratioe
Market Equityf

$34.88
13.8x
$6,470.8

$53.50
16.9x
$129,951.5

NAh
NAh
NAh

$29.69
13.4x
$9,614.4

$11.25
9.6x
$500.3

$15.94
7.3x
$197.3

$37.38
10.1x
$1,315.2

Selected Growth Rates and Ratios

Sales Growth
Gross Profit Margin
EBITDA Margin
EBIT Margin
Net Margin
Return on Average Equity
Return on Average Assets
Long-Term Debt/Capitalization
Total Debt/Capitalization

1.5%
80.1%
55.2%
52.9%
32.9%
103.4%
53.8%
17.6%
17.6%

3.2%
41.7%
20.8%
18.6%
10.3%
49.3%
13.2%
43.8%
47.5%

10.2%
65.4%
39.0%
31.3%
1.1%
NM
0.4%
89.4%
90.0%

(0.5%)
46.2%
17.5%
12.0%
3.5%
8.4%
2.4%
53.2%
54.4%

2.2%
12.3%
9.2%
7.2%
2.4%
12.5%
2.7%
65.4%
71.9%

10.2%
9.7%
5.7%
4.4%
1.8%
22.5%
3.4%
52.3%
72.3%

4.2%
14.3%
7.7%
6.5%
3.0%
25.6%
6.5%
31.2%
59.4%

Balance Sheet and Cash Flow Data

Cash and Cash Equivalents
Total Assets
Long-Term Debt
Total Debt
Preferred Stock & Minority Interest
Shareholders' Equity
Average Basic Shares Outstanding
Working Capital
Capital Expendituresd

Source:

Company financial statements and authors calculations and adjustments.

Before the cumulative effect of accounting changes and discontinued operations. Excludes settlement charges, special charges, and nonrecurring items. Net income adjustments generally apply a 40% tax rate.

Excludes Other Income and Expense.

Authors estimates of pretax settlement charges and other special charges or nonrecurring items. Does not include discontinued operations or effect of accounting changes.

Additions of property, plant and equipment net of dispositions.

Median
(excl. UST)

Mean
(excl. UST)

28.0%
13.4%
9.6%
2.7%
22.5%
3.1%
52.8%
65.7%

31.6%
16.7%
13.3%
3.7%
23.7%
4.8%
55.9%
65.9%

Based upon fiscal year-end stock price and basic earnings per share.

Based upon average basic shares outstanding and fiscal year-end stock price.

Includes impact of preferred stock dividends.

North Atlantic Trading Company is privately held

RJR Nabisco Holdings spun its tobacco business (RJ Reynolds Tobacco) off to shareholders in 1999.

Exhibit 6

Key Financial Ratios for Tobacco Companies

Three-years (1996-1998)
Corporate Credit Rating
Outlook
EBIT interest coverage (x)
EBITDA interest coverage (x)
Fund flow/total debt (%)
Free operating cash flow/total debt (%)
Return on capital (%)
Operating income/sales (%)
Total debt/capital (including ST debt) (%)

Tobacco Product Manufacturers

Tobacco Leaf Merchants
North
Tobacco
Atlantic
Companies
RJR Nabisco
Standard
a
Holdings
Medianb
Philip Morris Trading Co.
DiMon Inc. Commercial Universal Corp
A
Stable

B+
Stable

BBBStable

11.2
12.7
56.3
41.8
38.4
26.0
49.3

1.3
1.6
6.8
5.6
11.8
38.1
90.6

2.5
3.7
14.5
6.8
10.3
15.6
55.1

Source: Data provided by Standard & Poors to the casewriter.

a

Data for 1997-1998.

Excludes UST Inc.

BB+
Negative

BBPositive

2.6
3.3
12.3
10.1
13.4
16.4
67.8

3.3
5.4
6.7
(2.6)
6.6
3.6
77.5

UST Inc.

AStable
3.5
4.4
18.5
2.9
16.9
7.6
65.8

3.0
4.1
13.4
6.2
12.6
16.0
66.8

101.5
105.6
364.0
296.5
140.6
55.7
28.2

Exhibit 8

Key Financial Ratiosa

Adjusted Key Industrial Financial RatiosSenior Debt Ratings

Industrial Long-Term Debt
Three-Years (1996-1998) Medians

AAA

Investment Grade
AA
A

BBB

EBIT interest coverage (x)

EBITDA interest coverage (x)
Fund flow/total debt (%)
Free operating cash flow/total debt (%)
Return on capital (%)
Operating income/sales (%)
Long-term debt/capital (%)
Total debt/capital (including ST debt) (%)

12.9
18.7
89.7
40.5
30.6
30.9
21.4
31.8

9.2
14.0
67.0
21.6
25.1
25.2
29.3
37.0

7.2
10.0
49.5
17.4
19.6
17.9
33.3
39.2

4.1
6.3
32.2
6.3
15.4
15.8
40.8
46.4

U.S. Treasury

AAA

AA

4.70
5.45

5.60
6.47

5.84
6.76

6.12
7.05

Debt YieldsDecember 22, 1998

10-Year (%)
20-Year (%)

Noninvestment Grade/Speculative
BB
B
CCC
2.5
3.9
20.1
1.0
12.6
14.4
55.3
58.5

Corporate Bond Yields

BBB
BB+
6.84
7.82

7.70
--

1.2
2.3
10.5
(4.0)
9.2
11.2
68.8
71.4

(0.9)
0.2
7.4
(25.4)
(8.8)
5.0
71.5
79.4

BB/BB-

BB

8.72
--

11.19
--

Formulas for Adjusted Key Industrial Financial Ratios

EBIT Interest coverage =

Earnings from continuing operations before interest and taxes/

Gross interest incurred before subtracting capitalized interest and interest income

EBITDA interest coverage =

Earnings from continuing operations before interest, taxes, depreciation and amortization/
Gross interest incurred before subtracting capitalized interest and interest income

Funds from operations/Total debt =

Net income from continuing operations + depreciation, amortization, deferred income taxes, and other
noncash/
Long-term debt + current maturities, commercial paper, and other short-term borrowings

Free operating cash flow/Total debt =

Funds from operations capital expenditures (+) the increase (decrease) in working capital (excluding
changes in cash, marketable securities and ST debt/

Long-term debt + current maturities, commercial paper, and other short-term borrowings
Pretax return on capital =

EBIT + interest expense/

Average of beginning and ending year capital, including short-term debt, current maturities, long-term debt,
noncurrent deferred taxes and equity

Operating income/Sales =

Sales minus cost of goods manufactured (before depreciation and amortization), SG&A and R&D costs/ Sales

Long-term debt/Capitalization =

Long-term debt/
Long-term debt + shareholders equity (including preferred stock) + minority interest

Total debt/Capitalization =

Long-term debt + current maturities, commercial paper, and other short-term borrowings/
Long-term debt + current maturities, commercial paper and other short-term borrowings + shareholders
equity (including preferred stock) + minority interest

Source: Standard & Poors Credit Week , July 28, 1999 and Standard & Poors The Outlook , January 6, 1999.
a

Note:

Excludes discussion of operating lease equivalents ad defined by S&P for simplification purposes.

UST income statement projections

Actual
1998
Sales
EBIT
Interest
Pre-tax earnings
Taxes
Net Income
Net Debt
Interest Rate
Interest Coverage
Debt Rating

Pro-forma
1999

Pro-forma
1999

1423.20
753.30
-2.20
755.50
287.60
467.90
0.00

Status
Quo

$1 billion
Recap Plan

Actual
1998

Pro-forma
1999
No Debt

PV of tax shields
Value of UST
Net Debt
Shares Repurchased
Shares Outstanding
Stock Price
Market value Equity
Debt/Equity

Net Income
Shares Outstanding
Earnings per share
Dividend Payout
Dividends per share

Pro-forma
1999
Interest rate = 7.82%

Pro-forma
1999

Pro-forma
1999