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Westport innovations inc.

Westport innovations inc. Presented by: Simon Fraser University March 5, 2011. Content. Overview.……………………………………………… Positive Drivers.....…………………………………. Negative Drivers…….…………..………………….. Valuation………….……………………………………. Section 1 2 3 4. Recommendation. TSE: WPT. Westport Innovations.

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Westport innovations inc.

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  1. Westport innovations inc. Presented by: Simon Fraser University March 5, 2011

  2. Content Overview.……………………………………………… Positive Drivers.....…………………………………. Negative Drivers…….…………..………………….. Valuation………….…………………………………… Section 1 2 3 4 Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  3. Recommendation TSE: WPT Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  4. Westport Innovations • Formed in 1995, headquartered in Vancouver, Canada • Over 400 patent applications worldwide with over 200 issued patents • 186 employees with 7 partners across the globe Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  5. Natural Gas Engine Technology Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  6. Joint Ventures & Partnerships Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  7. Equity Financing Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  8. Strong Foundation Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  9. Forecasted Fuel Prices Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  10. Government Incentives Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  11. Strategic Partnerships Global Engine Producers Global Truck Producers • Weichai • Volvo • Daimler • Cummins • CNHTC • Daimler • Volvo • Dongfeng • Tata • FAW Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  12. Weichai Westport Inc. Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  13. Adapting Business Model Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  14. Management Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  15. Sound Balance Sheet Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  16. High Uncertainty Is there a market? Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  17. Market Resistance Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  18. Technical Complexity Natural Gas Engine Diesel Engine • Double the price • Less power and torque • Requires special parts • Requires more maintenance Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  19. Infrastructure Limits Source: DOE as of September 16, 2010 Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  20. R&D Costs and IP Risk Source: Westport Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  21. Valuations Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  22. Comparable Companies Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  23. Value Driver – Revenue Growth • CWI accounted for 92% of Westport’s total revenues in 2010 • Wildcard projects include Weichai-Westport, Volvo Powertrain CAGR 16% CAGR 32% Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  24. Product Revenue • Forecasted 20% annual growth in units shipped from 2011 – 2015 • Unit price growth driven by refocus on HD segment Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  25. Cash Flow • Operating cash flow to break-even by 2013 Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  26. FCFF Valuation Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  27. Sensitivity Analysis Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  28. Summary Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  29. Catalysts • Conclusion to NAT GAS Act • Broader Market Adoption of Natural Gas Vehicles • Climbing price of oil • Growth in Asia/ Weichai JV Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  30. Contact Information Simon Fraser University Beedie School of Business 500 Granville Street Vancouver, Canada Tel +1 (778) 782-5209 Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  31. Index of Slides Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  32. Investment Summary Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  33. Revenue Forecast Source: Team B Student Research Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  34. Parts Revenue Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  35. Rolling 12 Month Basis Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  36. Discount Rate Calculation Source: Team B Student Research Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  37. DCF Assumptions • Commodity Price Risk • Development Risk • development cost overruns • procurement delays • permitting issues • Operational Risk • Weather related • Unexpected changes in mineralogy • Currency Risks Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  38. Discounted FCFF Source: Team B Student Research Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  39. Schedule of Working Capital Source: Team B Student Research Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  40. Schedule of Net Investment Source: Team B Student Research Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  41. Key Financial Ratios Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  42. Cash Burn Rate Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  43. R&D Expense Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  44. Segment Analysis Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  45. Investment Risks Figure 8.4. Natural Gas Station in Each State Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  46. Income Statement Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  47. Balance Sheet Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  48. Balance Sheet Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  49. Statement of Cash Flows Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

  50. Statement of Cash Flows Disclaimer: This information is provided to you for informational purposes only and is intended for use only by the Global Investment Research Challenge.

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