**Exhibit 2.17 – Leverage indicators** _<u>Medians and means for 2003-07</u>_

||**Current to**<br>**Total**<br>**Liabilities,**<br>**(%)**|**Total debt to**<br>**Equity, (%)**|**Total**<br>**liabilities to**<br>**Equity, (%)**|**EBIT / Total**<br>**Interest**<br>**Expense Ratio**|**Short term**<br>**debt to tot.**<br>**liabilities(%)**|**Paid in capital**<br>**to total assets,**<br>**(%)**|
|---|---|---|---|---|---|---|
|**Second Tier**|||||||
|Median|86.1|19.4|63.5|3.3|25.4|34.3|
|Mean|76.0|35.2|73.5|381.6|29.1|36.7|
|**Top Tier**|||||||
|Median|78.4|34.1|87.9|3.9|19.1|24.6|
|Mean|74.1|43.6|94.3|59.1|24.0|26.8|
|**Peer group (WS)**|||||||
|Median|69.6|22.2|58.5|3.0|14.9|NA|
|Mean|65.1|36.4|64.7|279.4|21.4|NA|
|**LMI countries, excl. Egy**|**pt (WS)**||||||
|Median|69.6|19.9|55.3|2.4|16.0|NA|
|Mean|64.4|35.6|58.8|458.8|23.9|NA|

_Source: Coface Egypt;Worldscope; World Bank staff analysis Notes: Retained earnings to Equity from Coface also include Reserves. Whole peer group: Colombia, Chile, Hungary, Indonesia, Israel, Jordan, Mexico, Morocco, Pakistan, Philippines, and Turkey. LMI countries: Colombia, Indonesia, Jordan, Morocco, and Philippines._

# **Exhibit 2.18 – Leverage analysis by industry**

_<u>Medians by year and average median and compounded average growth rate of period 2003-2007</u>_

||**Trav**|**el and leisu**|**re, medians**||**Construc**|**tion and ma**|**terials, medi**|**ans**|
|---|---|---|---|---|---|---|---|---|
||**2003**|**2007**|**Average**|**CAGR**|**2003**|**2007**|**Average**|**CAGR**|
|**Current liabilities to total liabilities, %**|||||||||
|Egypt - Second tier (Coface)|49.1|79.0|58.7|10.0|75.2|88.2|84.3|3.2|
|Egypt - Top tier (Coface)|60.0|69.7|72.3|3.0|53.8|70.7|57.0|5.6|
|**Total debt to Equity, %**|||||||||
|Egypt - Second tier (Coface)|4.2|4.1|6.0|-0.6|26.1|24.6|31.2|-1.2|
|Egypt - Top tier (Coface)|119.4|32.6|57.8|-22.9|53.1|29.5|44.0|-11.1|
|**Total liabilities to Equity, %**|||||||||
|Egypt - Second tier (Coface)|19.2|26.9|29.8|6.9|87.6|65.7|84.8|-5.6|
|Egypt - Top tier (Coface)|181.9|72.2|111.2|-16.9|55.7|49.5|60.9|-2.3|
|**EBIT to interest expenses**|||||||||
|Egypt - Second tier (Coface)|4.0|18.3|8.6|35.3|1.1|3.6|2.9|25.8|
|Egypt - Top tier (Coface)|0.6|8.1|3.0|69.8|2.2|8.2|4.5|30.8|
|**Short term debt to tot. liabilities, %**|||||||||
|Egypt - Second tier (Coface)|9.6|8.8|8.6|-1.6|23.3|32.4|26.4|6.8|
|Egypt-Top tier (Coface)|26.1|0.1|7.9|-65.9|4.3|16.3|6.6|30.8|
||**Con**|**sumer stapl**|**es, medians**||**Indu**|**strial cyclica**|**l, medians**||
||**2003**|**2007**|**Average**|**CAGR**|**2003**|**2007**|**Average**|**CAGR**|
|**Current liabilities to total liabilities, %**|||||||||
|Egypt - Second tier (Coface)|89.2|90.0|86.2|0.2|85.9|88.7|86.7|0.6|
|Egypt - Top tier (Coface)|89.3|91.9|94.4|0.6|37.1|75.6|60.8|15.3|
|**Total debt to Equity, %**|||||||||
|Egypt - Second tier (Coface)|28.1|20.7|24.2|-6.0|21.1|19.8|18.0|-1.3|
|Egypt - Top tier (Coface)|28.9|16.2|22.9|-10.9|31.0|87.9|56.6|23.2|
|**Total liabilities to Equity, %**|||||||||
|Egypt - Second tier (Coface)|58.4|60.0|61.0|0.5|65.4|65.9|66.4|0.2|
|Egypt - Top tier (Coface)|138.7|84.1|104.0|-9.5|75.1|150.5|101.8|14.9|
|**EBIT to interest expenses**|||||||||
|<br>Egypt - Second tier (Coface)|2.5|2.9|3.3|2.4|1.9|4.2|3.7|17.7|
|<br>Egypt - Top tier (Coface)|3.1|3.8|4.2|4.6|1.3|4.3|3.3|26.9|
|**Short term debt to tot. liabilities, %**|||||||||
|Egypt - Second tier (Coface)|66.8|64.9|64.3|-0.6|28.8|22.2|26.5|-5.1|
|Egypt-Top tier (Coface)|12.2|24.1|18.1|14.6|15.5|35.6|25.0|18.1|

_Source: Coface Egypt; World Bank staff analysis_ Exhibit 2.19 shows that the difference in debt levels between the tiers is driven by size: after correcting for industry debt characteristics and the business cycle, the median Top Tier firms has over the period 2003-07 a 8.7 pp higher debt to equity level. However, after the size of firm is 16