Main  /  Members  /  Oracle Corporation (ORCL)  /  Estimated Intrinsic Valuation - Summary

Estimated Intrinsic Valuation - Summary
Oracle Corporation (ORCL)
(Dollars and Shares in Millions, Except Per Share Amounts)

1.   Intrinsic Valuation Summary:
 
 A.   Estimated gross selling price of seller's assets at the end of first forecast year.$89,977
 B.   Estimated liabilities of the seller to be paid by the seller out of the gross selling price.(7,054)
 
 
 C.   Estimated intrinsic value of the seller's common equity at end of first forecast year.$82,923
 D.   Estimated fully diluted shares outstanding of seller at the end of first forecast year.5231
 
 
 E.   Estimated intrinsic value per fully diluted share of seller at the end of first forecast year.$15.85
 
 
2.   The Deal:
 
  A.   Gross selling price of seller's assets at the end of the first forecast year   $89,977
 
  Seller's forecast of year one operating earnings   $4,413
  Seller's forecast of year one EBITDA   $4,727
 
  Gross selling price, divided by forecasted year one operating earnings   20.39
  Gross selling price, divided by forecasted year one EBITDA   19.03
 
  B.   Total selling price of the seller's assets at the end of first forecast year
 
  Gross selling price of the seller's assets at the end of the first forecast year   $89,977
  Transaction expenses   $1,575
 
  Total selling price of the seller's assets at the end of the first forecast year   $91,552
 
  C.   Intangible assets recorded by the buyer at the end of the first forecast year
 
  Total selling price of the seller's assets at end of the first forecast year   $91,552
  Fair market value of the seller's assets at the end of the first forecast year   $10,651
 
  Intangible assets recorded by the buyer at the end of the first forecast year   $80,901
 
  Buyer's annual intangible asset amortization   $5,393
 
 
3.   Seller's Outcome:
 
  A.   Net pretax sales proceeds to the seller
 
  Gross selling price of the seller's assets at end of the first forecast year   $89,977
  Liabilities of the seller to be paid by the seller from the gross selling price   (7,054)
 
  Net pretax sales proceeds to the seller   $82,923
 
  Net worth of the seller's business at the end of the first forecast year   $13,973
 
    Net pretax sales proceeds to the seller, minus the net worth of the seller's business   $68,950
  Net pretax sales proceeds to the seller, divided by the net worth of the seller's business   5.93
 
 
4.   Buyer's Outcome:
 
  A.   Gross selling price of the buyer's assets at the end of four years of ownership   $132,220
 
  Buyer's forecast of year four operating earnings   $6,461
  Buyer's forecast of year four EBITDA   $6,611
 
  Gross selling price, divided by forecasted year four operating earnings   20.46
  Gross selling price, divided by forecasted year four EBITDA   20.00
 
  B.   Net pretax sales proceeds to the buyer's equity and subordinated debt investors
 
  Gross selling price of the buyer's assets at the end of four years of ownership   $132,220
  Liabilities of the buyer to be paid by the buyer from the gross selling price   $55,486
 
  Net pretax sales proceeds available to buyer's equity and subordinated debt investors   $76,734
 
  C.   Buyer's subordinated debt investors return on investment after four years of ownership
 
  Net sales proceeds to subordinated debt investors for equity warrants   $28,762
  Subordinated debt investors' original subordinated debt investment   $60,789
  Subordinated debt investors' fully diluted ownership interest in the buyer's sales proceeds   37.5%
  Subordinated debt investors' pretax annual rate of return   20.0%
  Subordinated debt investors' pretax annual rate of return target   20.0%
 
  D.   Buyer's equity investors' pretax return on investment after four years of ownership
 
  Net selling proceeds to equity investors   $47,972
  Equity investors' original equity investment   $27,466
  Equity investors' pretax annual rate of return   15.0%
  Equity investors' pretax annual rate of return target   15.0%