netscape ipo excel

8/13/2019 Netscape IPO Excel

1/7

Proforma Income Statement and Free Cash Flows FormActual

1995** 1996 1997 1998 1999 2000 2001 2002

Revenues 33,251 51,845 80,838 126,044 196,531 306,434 477,798 744,992

Costs 3,471 5,413 8,439 13,159 20,518 31,992 49,882 77,777

R&D 12,236 19,079 29,748 46,384 72,323 112,768 175,830 274,157

Other Operating Expenses 26,900 36,758 49,230 64,157 80,381 94,688 99,860 155,703

Operating Income (9,357) (9,405) (6,580) 2,344 23,309 66,987 152,226 237,354

Net Interest Income 0 0 0 0 0 0 0 0

EBT (9,357) (9,405) (6,580) 2,344 23,309 66,987 152,226 237,354

Tax Loss (12,779) (22,183) (28,764) (26,419) (3,111) 0 0 0

Taxable Income 0 0 0 0 0 63,876 152,226 237,354

Taxes 0 0 0 0 0 21,718 51,757 80,701

Net Income (9,357) (9,405) (6,580) 2,344 23,309 45,269 100,469 156,654

Capital Expenditures 15,229 20,721 27,593 35,671 44,154 50,970 51,602 80,459

Depreciation 1,829 2,851 4,446 6,932 10,809 16,854 26,279 40,975

Change in NWC 0 0 0 0 0 0 0 0

Net Interest Income 0 0 0 0 0 0 0 0

FCFF (22,757) (27,274) (29,727) (26,394) (10,036) 11,152 75,146 117,169

TV of FCF

PV of Cash Flows 201,141PV of TV 2,012,403

Total PV 2,213,544

Total Shares 38,000.75

Price per share $58.25

** 1995 Not included in PV

Estimates


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Question 3: Growth %

Assumptions given 44.95%

Question 4:

Beta equals .5 39.79%


Question 5:

Tax Rate is 40% 46.94%

Question 6:

COGS equals 8% 43.40%

Question 7:

R&D equal 30% 40.99%

Question 8:

Risk-free Rate 8% 49.01%

Question 9:

Closing Price $58.25* 55.92%

*Source: http://en.wikipedia.org/wiki/Netscape


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Givens and Scenarios Table

Growth (1996-2004) 55.92%

Cost of Revenues 10.44%

R&D 36.80%

Other OE (after 2001) 20.90%

Capital Expenditures (after

2001) 10.80%

Depreciation 5.50%

LT FCF Growth Rate 4%

Risk-free Rate 6.50%

Netscape Beta 0.73

Market Risk-premium 7.50%

Tax Rate 34%

1995 1996 1997 1998 1999 2000 2001

Other Operating Expenses 80.90% 80.90% 80.90% 80.90% 80.90% 80.90% 20.90%

Capital Expenditures 45.80% 45.80% 45.80% 45.80% 45.80% 45.80% 10.80%

Total Share Outstanding 38,000.751

Required Rate of Return 11.98%

Question 3: Growth %

Assumptions given 44.95%

Question 4:Beta equals .5 39.79%


Question 5:

Tax Rate is 40% 46.94%

Question 6:

COGS equals 8% 43.40%

Question 7:

R&D equal 30% 40.99%

Question 8:

Risk-free Rate 8% 49.01%

Question 9:

Closing Price $58.25* 55.92%

*Source: http://en.wikipedia.org/wiki/Netscape

Givens

Appendix


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Actual

1995** 1996 1997 1998 1999

Revenues 33,251 48,198 69,866 101,273 146,800

Costs 3,471 5,032 7,294 10,573 15,326

R&D 12,236 17,737 25,711 37,269 54,022

Other Operating Expenses 26,900 34,173 42,548 51,548 60,041

Operating Income (9,357) (8,743) (5,687) 1,884 17,411

Net Interest Income 0 0 0 0 0

EBT (9,357) (8,743) (5,687) 1,884 17,411

Tax Loss (12,778) (21,521) (27,208) (25,324) (7,914)

Taxable Income 0 0 0 0 0

Taxes 0 0 0 0 0

Net Income (9,357) (8,743) (5,687) 1,884 17,411

Capital Expenditures 15,229 19,263 23,848 28,660 32,981

Depreciation 1,829 2,651 3,843 5,570 8,074

Change in NWC 0 0 0 0 0

Net Interest Income 0 0 0 0 0

FCFF (22,757) (25,356) (25,692) (21,207) (7,497)

TV of FCF

PV of Cash Flows 93,605

PV of TV 970,412

Total PV 1,064,017

Total Shares 38,000.75

Price per share $28.00

** 1995 Not included in PV


5/7

2000 2001 2002 2003 2004 2005

212,793 308,453 447,116 648,114 939,470 1,361,802

22,216 32,203 46,679 67,663 98,081 142,172

78,308 113,511 164,539 238,506 345,725 501,143

65,753 64,467 93,447 135,456 196,349 284,617

46,517 98,273 142,451 206,489 299,315 433,870

0 0 0 0 0 0

46,517 98,273 142,451 206,489 299,315 433,870

0 0 0 0 0 0

38,603 98,273 142,451 206,489 299,315 433,870

13,125 33,413 48,433 70,206 101,767 147,516

33,392 64,860 94,018 136,283 197,548 286,354

35,395 33,313 48,289 69,996 101,463 147,075

11,704 16,965 24,591 35,646 51,671 74,899

0 0 0 0 0 0

0 0 0 0 0 0

9,701 48,512 70,321 101,933 147,756 214,179

2,685,627

Estimates


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Growth (1996-2004) 44.95%

Cost of Revenues 10.44%

R&D 36.80%

Other OE (after 2001) 20.90%Capital Expenditures (after

2001) 10.80%

Depreciation 5.50%

LT FCF Growth Rate 4%

Risk-free Rate 6.50%

Netscape Beta 0.73

Market Risk-premium 7.50%

Tax Rate 34%

1995 1996 1997 1998 1999

Other Operating Expenses 80.90% 70.900% 60.900% 50.900% 40.900%

Capital Expenditures 45.80% 39.967% 34.133% 28.300% 22.467%

Total Share Outstanding 38,000.751

Required Rate of Return 11.98%

Givens


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2000 2001

30.900% 20.90%

16.633% 10.80%

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