Oracle

Income Statement
Period End: May 31st
Values in this worksheet are in thousands, except where noted.

Data Input
Assumption
Output

1994

1995

1996

1997

1998

1999

2000

2,001,147.0
499,213.0
1,501,934.0
75.1%

2,966,878.0
779,012.0
2,187,866.0
73.7%

4,223,300.0
1,096,013.0
3,127,287.0
74.0%

5,684,336.0
1,550,466.0
4,133,870.0
72.7%

7,143,866.0
2,273,607.0
4,870,259.0
68.2%

8,827,252.0
3,064,148.0
5,763,104.0
65.3%

10,130,128.0
2,942,679.0
7,187,449.0
71.0%

749,796.0
197,086.0
135,099.0

1,103,345.0
260,597.0
174,203.0

1,549,231.0
389,093.0
233,141.0

1,970,394.0
555,476.0
308,215.0

2,371,306.0
719,143.0
368,556.0

2,622,379.0
841,406.0
426,438.0

2,616,749.0
1,009,882.0
480,658.0

1,081,981.0

1,538,145.0

2,171,465.0

2,834,085.0

3,459,005.0

3,890,223.0

4,107,289.0

419,953.0
21.0%

649,721.0
21.9%

955,822.0
22.6%

1,299,785.0
22.9%

1,411,254.0
19.8%

1,872,881.0
21.2%

3,080,160.0
30.4%

0.0
0.0
0.0

0.0
0.0
0.0

0.0
50,931.0
0.0

0.0
36,800.0
0.0

0.0
167,054.0
0.0

0.0
0.0
0.0

0.0
0.0
0.0

Investment income, net

Other income (expense)
Interest expense
Income (loss) before income taxes
Provision for income taxes

17,943.0
-7,562.0
6,871.0
423,463.0
139,743.0

21,095.0
-4,864.0
6,970.0
658,982.0
217,464.0

30,235.0
-8,984.0
6,632.0
919,510.0
316,231.0

47,381.0
-20,033.0
6,806.0
1,283,527.0
462,070.0

85,986.0
14,291.0
16,658.0
1,327,819.0
514,124.0

118,486.0
12,135.0
21,424.0
1,982,078.0
692,320.0

6,936,955.0
125,213.0
18,894.0
10,123,434.0
3,826,631.0

Net income (loss)

Adjusted net income
Net profit margins

283,720.0
283,720.0
14.2%

441,518.0
441,518.0
14.9%

603,279.0
654,210.0
15.5%

821,457.0
858,257.0
15.1%

813,695.0
980,749.0
13.7%

1,289,758.0
1,289,758.0
14.6%

6,296,803.0
6,296,803.0
62.2%

Reported net income

Add R&D
Add marketing expenses
Add tax paid on investment income
Add interest expense
Add change in deferred tax reserve
Add non-recurring costs
Add amortization of goodwill
Subtract R&D amortization
Subtract marketing amortization
Subtract investment income
Subtract tax shield from interest expense
Subtract change in deferred tax assets
NOPAT
Net Operating Margins

283,720.0
197,086.0
749,796.0
3,425.7
6,871.0
0.0
0.0
0.0
39,417.2
249,932.0
10,381.0
2,267.4
0.0
938,901.1
46.92%

NOPAT
441,518.0
603,279.0
260,597.0
440,024.0
1,103,345.0
1,549,231.0
5,356.2
7,308.5
6,970.0
6,632.0
(11,426.0)
(18,283.0)
0.0
0.0
0.0
0.0
91,536.6
179,541.4
617,713.7
1,134,124.0
16,231.0
21,251.0
2,300.1
2,280.8
0.0
0.0
1,078,578.9
1,250,994.3
36.35%
29.62%

821,457.0
592,276.0
1,970,394.0
9,845.3
6,806.0
(1,805.0)
0.0
0.0
297,996.6
1,540,990.0
27,348.0
2,450.2
0.0
1,530,188.5
26.92%

813,695.0
886,197.0
2,371,306.0
38,826.7
16,658.0
8,454.0
0.0
0.0
475,236.0
1,963,643.7
100,277.0
6,449.9
0.0
1,589,530.1
22.25%

1,289,758.0
841,406.0
2,622,379.0
45,624.6
21,424.0
120,031.0
0.0
0.0
604,100.0
2,321,359.7
130,621.0
7,483.2
0.0
1,877,058.8
21.26%

6,296,803.0
1,009,882.0
2,616,749.0
2,669,480.6
18,894.0
130,243.0
0.0
0.0
753,957.0
2,536,811.3
7,062,168.0
7,141.9
0.0
2,381,973.4
23.51%

1997
36.0%

1998
38.7%

1999
34.9%

2000
37.8%

Net revenues
Cost of revenues
Gross profit
Gross margins
Operating expenses:
Sales and marketing
R&D
General and administrative
Other
Total operating expenses
Income (loss) from operations
Operating margin
Non-recurring costs
Acquired in-process R&D
Amortization of goodwill

Effective tax rate

1994
33.0%

1995
33.0%

1996
34.4%

Oracle
Balance Sheet

Data Input

Period Ends: May 31

ASSETS

1994

1995

1996

1997

1998

1999

Current assets:
Cash and cash equivalents
Short-term investments in marketable securities
Accounts receivable
Prepaid and refundable income taxes
Prepaid expenses and other current assets
Total current assets

404,810.0
59,948.0
515,669.0
53,765.0
41,420.0
1,075,612.0

480,158.0
105,660.0
846,342.0
135,491.0
49,543.0
1,617,194.0

715,742.0
125,166.0
1,203,976.0
171,560.0
68,021.0
2,284,465.0

890,162.0
323,028.0
1,708,939.0
274,366.0
74,601.0
3,271,096.0

1,273,681.0
645,518.0
2,065,024.0
260,624.0
78,203.0
4,323,050.0

1,785,715.0
777,049.0
2,478,996.0
299,670.0
105,844.0
5,447,274.0

7,429,206.0
332,792.0
2,790,167.0
212,829.0
118,340.0
10,883,334.0

378,483.0
100,329.0
40,560.0
157,668.8
499,864.0

535,034.0
99,855.0
172,434.0
326,729.2
985,495.3

41,963.0
685,754.0
99,072.0
245,989.0
587,211.8
1,400,602.3

116,337.0
868,948.0
98,981.0
268,953.0
881,491.2
1,830,006.3

186,511.0
934,350.0
99,012.0
276,088.0
1,292,452.2
2,237,668.7

249,547.0
987,482.0
98,870.0
476,481.0
1,529,758.2
2,538,688.0

110,000.0
934,455.0
94,609.0
1,054,381.0
1,785,683.2
2,618,625.7

1,176,904.8
2,252,516.8

2,119,547.5
3,736,741.5

3,060,592.1
5,345,057.1

4,064,716.5
7,335,812.5

5,026,081.9
9,349,131.9

5,880,826.2
11,328,100.2

6,597,753.9
17,481,087.9

Current liabilities:
Notes payable and current maturities of long-term debt
Accounts payable
Income taxes payable
Accrued compensation and related benefits
Customer advances and unearned revenues
Value added tax and sales tax payable
Other accrued liabilities
Total current liabilities

6,898.0
95,799.0
62,591.0
136,488.0
227,118.0
44,781.0
108,426.0
682,101.0

9,599.0
124,773.0
134,121.0
211,643.0
316,273.0
67,449.0
191,291.0
1,055,149.0

5,623.0
169,895.0
181,999.0
295,048.0
434,435.0
99,409.0
268,555.0
1,454,964.0

3,361.0
185,444.0
203,646.0
394,153.0
602,862.0
121,914.0
410,759.0
1,922,139.0

2,924.0
239,698.0
181,354.0
541,809.0
877,087.0
119,600.0
521,693.0
2,484,165.0

3,638.0
283,896.0
277,700.0
693,525.0
1,007,149.0
128,774.0
651,741.0
3,046,423.0

2,691.0
287,495.0
2,821,776.0
725,860.0
1,133,482.0
165,304.0
725,630.0
5,862,238.0

Non-current liabilities
Long term debt
Other
Deferred income taxes
Total non-current liabilities
Total Liabilities

82,845.0
12,139.0
38,916.0
133,900.0
816,001.0

81,721.0
10,361.0
27,490.0
119,572.0
1,174,721.0

897.0
21,726.0
9,207.0
31,830.0
1,486,794.0

300,836.0
24,226.0
7,402.0
332,464.0
2,254,603.0

304,337.0
57,095.0
15,856.0
377,288.0
2,861,453.0

304,140.0
77,937.0
135,887.0
517,964.0
3,564,387.0

300,770.0
186,178.0
266,130.0
753,078.0
6,615,316.0

38,430.0

38,438.0

657,532.8

1,312,224.5

1,987,814.1

2,711,497.5

3,530,120.9

4,068,446.2

4,404,308.9

740,553.0
2,252,516.8

1,211,358.0
3,736,741.5

1,870,449.0
5,345,057.1

2,369,712.0
7,335,812.5

2,957,558.0
9,349,131.9

3,695,267.0
11,328,100.2

6,461,463.0
17,481,087.9

139,128.0
868,948.0
367,934.0
2,711,497.5
17,803.2
4,105,310.8
3,566,235.4
3,027,160.0
1,078,150.8

(77,390.0)
934,350.0
375,100.0
3,530,120.9
25,473.6
4,787,654.5
4,446,482.6
4,105,310.8
682,343.7

(158,275.0)
987,482.0
575,351.0
4,068,446.2
35,714.3
5,508,718.5
5,148,186.5
4,787,654.5
721,064.0

(2,738,211.0)
934,455.0
1,148,990.0
4,404,308.9
148,584.1
3,898,127.0
4,703,422.7
5,508,718.5
(1,610,591.5)

Fixed assets:
Long-term investments in marketable securities
Property and equipment, net
Computer software development costs, net
Intangibles and other assets
R&D expenditures, net
Marketing expenditures, net
Cumulative non-recurring costs
Total fixed assets
Total assets

2000

LIABILITIES AND SHAREHOLDERS' EQUITY

Put warrants
Postretirement and other postemployment benefits
Minority interest
Equity equivalents
Shareholders' equity:
Total shareholders' equity
Total liabilities and shareholders' equity

Invested Capital
Net working capital
Net property plant & equipment
Other assets
Equity equivalents
Operating cash (2% of cash and cash equivalents)
Total invested capital
Average capital
Beginning capital
Increase in capital

(64,349.0)
378,483.0
140,889.0
657,532.8
8,096.2
1,120,652.0

(14,174.0)
535,034.0
272,289.0
1,312,224.5
9,603.2
2,114,976.7
1,617,814.3
1,120,652.0
994,324.7

(5,784.0)
685,754.0
345,061.0
1,987,814.1
14,314.8
3,027,160.0
2,571,068.3
2,114,976.7
912,183.3

Amortization Schedule for Equity Equivalents

R&D Capitalization
New R&D Expenditures
Depreciation

1994

1995

1996

1997

1998

1999

2000

197,086.0
39,417.2

260,597.0
39,417.2
52,119.4

440,024.0
39,417.2
52,119.4
88,004.8

592,276.0
39,417.2
52,119.4
88,004.8
118,455.2

886,197.0
39,417.2
52,119.4
88,004.8
118,455.2
177,239.4

841,406.0

1,009,882.0

88,004.8
118,455.2
177,239.4
168,281.2
201,976.4

118,455.2
177,239.4
168,281.2
201,976.4

177,239.4
168,281.2
201,976.4

168,281.2
201,976.4

201,976.4

52,119.4
88,004.8
118,455.2
177,239.4
168,281.2

2001

2002

2003

2004

2005

2006

2007

* R&D amortized over 5 years

Depreciation
Net Cum. R&D Expenditures

Sales & Marketing Capitalization

New Sales & Mktg Inv.
Depreciation

39,417.2
157,668.8

91,536.6
326,729.2

179,541.4
587,211.8

297,996.6
881,491.2

475,236.0
1,292,452.2

604,100.0
1,529,758.2

753,957.0
1,785,683.2

665,952.2
1,119,731.0

547,497.0
572,234.0

370,257.6
201,976.4

201,976.4
-

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

749,796.0
249,932.0

1,103,345.0
249,932.0
367,781.7

1,549,231.0
249,932.0
367,781.7
516,410.3

1,970,394.0

2,371,306.0

2,622,379.0

2,616,749.0

790,435.3
874,126.3
872,249.7

874,126.3
872,249.7

872,249.7

367,781.7
516,410.3
656,798.0

516,410.3
656,798.0
790,435.3

656,798.0
790,435.3
874,126.3

2005

2006

2007

*Sales and marketing investments amortized over 3 years

Depreciation & Amortization
Net Cum. Sales & Mktg Inv.

Cumulative Goodwill Amortization

Goodwill Amortization
Cumulative Goodwill Amortization
Cumulative Non-Recurring Costs
Non-recurring costs
Cumulative non-recurring costs

249,932.0
499,864.0

617,713.7
985,495.3

1,134,124.0
1,400,602.3

1,540,990.0
1,830,006.3

1,963,643.7
2,237,668.7

2,321,359.7
2,538,688.0

2,536,811.3
2,618,625.7

1,746,376.0
872,249.7

872,249.7

872,249.7

872,249.7

872,249.7

872,249.7

872,249.7

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

50,931
50,931.0

36,800
87,731.0

167,054
254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

254,785.0

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1994
-

1995
-

Return On Invested Capital Analysis

AVG capital
NOPAT
ROIC
EVA

1998
1999
2000
4,446,482.6 5,148,186.5 4,703,422.7
1,589,530.1 1,877,058.8 2,381,973.4
35.7%
36.5%
50.6%
925,127.8 1,107,806.4 1,679,178.6
1999
701,703.9
287,528.6
41.0%

Incremental capital
Incremental NOPAT
Return on incremental capital

Beginning capital
NOPAT
ROIC
EVA

2000
-444,763.8
504,914.7
-113.5%

1998
1999
2000
4,105,310.8 4,787,654.5 5,508,718.5
1,589,530.1 1,877,058.8 2,381,973.4
38.7%
39.2%
43.2%
976,106.4 1,161,677.8 1,558,849.7
1999
682,343.7
287,528.6
42.1%

Incremental capital
Incremental NOPAT
Return on incremental capital
ROIC-WACC Spread
ROIC-to-WACC Ratio

35.70%
3.39

EV (minus cash)
IC
EV/IC Ratio

222,838,002 15-Aug-00
3,898,127
57.17

2000
721,064.0
504,914.7
70.0%

Balance Sheet Analysis

Inventory turnover
Days in inventory

1995
0.0
0.0

1996
0.0
0.0

1997
0.0
0.0

A/R turnover
Days in receivables

4.4
83.8

4.1
88.6

3.9
93.5

A/P turnover
Days in payables

7.1
51.7

7.4
49.1

8.7
41.8

CCC

32.1

39.5

51.7

Flow ratio

0.99

1.00

1.07

1998
1,416,227.0
198,352.0
-328,358.0
1,614,579.0
22.6%
1,286,221.0
18.0%

1999
1,737,674.0
69,425.0
-346,592.0
1,807,099.0
20.5%
1,460,507.0
16.5%

Cash Flow Analysis

Cash earnings
Cash from change in NWC
CAPEX
CFO
Operating CF margin
Free cash flow
Cash king margin

1997
1,215,665.0
-185,161.0
-390,741.0
1,030,504.0
18.1%
639,763.0
11.3%

Free Cash Flow using The Quest for Value Methodology

NOPAT
Increase (decrease) in invested capital
Free cash flow
Cash king margin

1,530,188.5 1,589,530.1 1,877,058.8

1,078,150.8 682,343.7 721,064.0
452,037.7
907,186.4 1,155,994.7
8.0%
12.7%
13.1%

1998
0.0
0.0

1999
0.0
0.0

2000
0.0
0.0

3.8
96.4

3.9
93.9

3.8
94.9

10.7
34.1

11.7
31.2

10.3
35.4

62.3

62.8

59.5

0.97

0.95

0.53

2000
-113,915.0
3,037,479.0
-263,443.0
2,923,564.0
28.9%
2,660,121.0
26.3%

2,381,973.4
-1,610,591.5
3,992,564.9
39.4%

Cost of Equity (CAPM)

Beta
L-T risk-free rate
Historical MRP
Cost of Equity

1.46
5.72%
6.32%
14.94%

Cost of Debt
Average interest rate
Effective tax rate
After-tax cost of debt
Capital Structure (Market Values)
Total debt-to-equity & debt
Total equity to (equity + debt)
WACC

6.90%
37.80%
4.29%

0.00
1.00
14.94%

(Source: Market Guide)

rket Guide)