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.$71,896
 B.   Estimated liabilities of the seller to be paid by the seller out of the gross selling price.(2,155)
 
 
 C.   Estimated intrinsic value of the seller's common equity at end of first forecast year.$69,741
 D.   Estimated fully diluted shares outstanding of seller at the end of first forecast year.5865
 
 
 E.   Estimated intrinsic value per fully diluted share of seller at the end of first forecast year.$11.89
 
 
2.   The Deal:
 
  A.   Gross selling price of seller's assets at the end of the first forecast year   $71,896
 
  Seller's forecast of year one operating earnings   $4,075
  Seller's forecast of year one EBITDA   $4,351
 
  Gross selling price, divided by forecasted year one operating earnings   17.64
  Gross selling price, divided by forecasted year one EBITDA   16.52
 
  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   $71,896
  Transaction expenses   $1,258
 
  Total selling price of the seller's assets at the end of the first forecast year   $73,154
 
  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   $73,154
  Fair market value of the seller's assets at the end of the first forecast year   $11,262
 
  Intangible assets recorded by the buyer at the end of the first forecast year   $61,892
 
  Buyer's annual intangible asset amortization   $4,126
 
 
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   $71,896
  Liabilities of the seller to be paid by the seller from the gross selling price   (2,155)
 
  Net pretax sales proceeds to the seller   $69,741
 
  Net worth of the seller's business at the end of the first forecast year   $9,107
 
    Net pretax sales proceeds to the seller, minus the net worth of the seller's business   $60,634
  Net pretax sales proceeds to the seller, divided by the net worth of the seller's business   7.66
 
 
4.   Buyer's Outcome:
 
  A.   Gross selling price of the buyer's assets at the end of four years of ownership   $101,692
 
  Buyer's forecast of year four operating earnings   $5,535
  Buyer's forecast of year four EBITDA   $5,811
 
  Gross selling price, divided by forecasted year four operating earnings   18.37
  Gross selling price, divided by forecasted year four EBITDA   17.50
 
  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   $101,692
  Liabilities of the buyer to be paid by the buyer from the gross selling price   $49,793
 
  Net pretax sales proceeds available to buyer's equity and subordinated debt investors   $51,899
 
  C.   Buyer's subordinated debt investors return on investment after four years of ownership
 
  Net sales proceeds to subordinated debt investors for equity warrants   $26,350
  Subordinated debt investors' original subordinated debt investment   $55,690
  Subordinated debt investors' fully diluted ownership interest in the buyer's sales proceeds   50.8%
  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   $25,549
  Equity investors' original equity investment   $14,631
  Equity investors' pretax annual rate of return   15.0%
  Equity investors' pretax annual rate of return target   15.0%