Financials

$ and shares in millions, except per share data

Actual Forecast
Fiscal year ended September 30, 2019 2020 2021 2022

Revenue 260,174 280,988 306,277 324,653

% Revenue growth 8.0% 9.0% 6.0%
EBITDA 76,477 81,486 88,820 92,526
% margin 29.0% 29.0% 28.5%
EBIT 63,930 69,123 76,569 81,163
% margin 24.6% 25.0% 25.0%

Tax rate 15.8% 16.6% 16.7%

Capex as % of revenue – 3.9% 3.8%

Net working capital (WC Assets - WC liabilities) (27,216)

as % of revenue (10.5%) (10.5%) (10.5%) (10.5%)
Forecast
2023 2024

344,133 364,781
6.0% 6.0%
98,078 102,139
28.5% 28.0%
87,754 91,195
25.5% 25.0%

17.3% 17.3%
3.7% 3.6%

(10.5%) (10.5%)
Discounted Cash Flow Valuation
$ and shares in millions, except per share data
Most recent fiscal year end 9/28/2019
End of first fiscal year
Most recent quarter end date 12/28/2019
Valuation date 2/28/2020
Portion of year 1 cash flows in forecast

Unlevered Free Cash Flows

Actual
Fiscal year ended 9/28/19

Revenue 260,174
% growth
EBITDA 76,477
% margin 29.4%
EBIT 63,930
% margin 24.6%

Tax on EBIT 10,165

Tax rate 15.9%
NOPAT (aka EBIAT) 53,765

Depreciation & amortization 12,547

Changes in net working capital (2,927)
Capital expenditures (10,495)
as % of revenue 4.0%

Unlevered free cash flows (UFCF)

Net working capital (WC Assets - WC liabilities) (30,143) (27,216)

as % of revenue (10.5%)

Present value of UFCF on Feb 28, 2020 valuation date

Val date
Date for discounting cash flows Stub % 2/28/2020
Unlevered free cash flows (UFCF) stub adjusted
Present value of of unlevered free cash flows

Terminal value - growth in perpetuity approach

Long term growth rate 3.0%
2024 FCF x (1+g)
Terminal value in 2024
Present value of terminal value
Present value of stage 1 cash flows
Total enterprise value (TEV)

Terminal value as % of TEV

Stage 1 cash flows as % of TEV
Implied TV exit EBITDA multiple

Net debt
Source doc Q1 2020 10Q
Source date 12/28/2019
Gross debt and equivalents
Debt
Convertible debt
Preferred stock
Noncontrolling (minority) interests
Nonoperating assets
Cash
Equity investments

Net debt

Valuation
Perpetuity EBITDA
Enterprise value
Net debt
Equity value
Shares outstanding
Equity value per share

Year 1 Multiples Perpetuity EBITDA

EV / Revenue
EV / EBITDA
EV / EBIT

Outputs

Equ

0.00
10.0%
9.5%
WACC: 9.0%
8.5%
Data 8.0%
Tables
Equ
 $0.00
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Equity value range

DCF Equity Valuation Range

400.00

350.00
327.85

300.00

250.00

200.00

169.50
150.00

100.00
DCF Value at 11.5x-13.5x Exit DCF Value at 2.0%-4.0% Perpetuity 52 Week Market High/Low
EBITDA Range at 9.0% WACC Range at 9.0% WACC

Low Diff.
DCF Value at 11.5x-13.5x Exit EBITDA Range at 9.0% WACC 0.00 0.00
DCF Value at 2.0%-4.0% Perpetuity Range at 9.0% WACC 0.00 0.00
52 Week Market High/Low 169.50 158.35
 Discount rate (WACC) 9.0%
Share price (Public Co) $273.52
Share price date 2/27/2020
Midyear adjustment? 0

Forecasts
9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

8.0% 9.0% 6.0% 6.0% 6.0%

29.0% 29.0% 28.5% 28.5% 28.0%

24.6% 25.0% 25.0% 25.5% 25.0%

15.8% 16.6% 16.7% 17.3% 17.3%

4.0% 3.9% 3.8% 3.7% 3.6%

(10.5%) (10.5%) (10.5%) (10.5%) (10.5%)

Yr 1 - Stub Year 2 Year 3 Year 4 Year 5

9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024

Terminal value - EBITDA multiple approach

Terminal year EBITDA
EBITDA multiple 12.5x
Terminal value in 2024
Present value of terminal value
Present value of stage 1 cash flows
Enterprise value (stage 1 + 2)

Terminal value as % of TEV

Stage 1 cash flows as % of TEV
Implied terminal growth rate #DIV/0!

Shares outstanding

Source doc Date Shares

Basic shares Q1 2020 10Q 1/17/2020
Restricted stock / RSUs Q1 2020 10Q 12/28/2019
Options / warrants
Convertible debt
Convertible preferred stock
Net diluted shares outstanding 0.000

Equity value per share

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0%

Equity value per share

Exit EBITDA Multiple
 11.5x 12.0x 12.5x 13.0x 13.5x

Football field

LTM EBITDA Multiple Range

20.0x
19.0x
327.85 18.0x
17.0x
16.0x
15.0x
14.0x
13.0x

169.50 12.0x
11.0x
10.0x
k Market High/Low LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpe- LTM EBITDA Purchase Multiple at 0
tuity Growth at 9.0% WACC EBITDA Multiple at 9.0% W

High
0.00 LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpetuity Growth at 9.0% WACC
0.00 LTM EBITDA Purchase Multiple at 0.0x-0.0x Exit EBITDA Multiple at 9.0% WACC
327.85 LTM EBITDA Purchase Multiple at 8.0%-10.0% WACC at 12.5x Exit EBITDA
Last period * (1+% growth)

EBITDA % margin assumption x Revenue

EBIT % margin assumption x Revenue

Tax rate * EBIT

EBIT - Taxes

EBITDA - EBIT
Last period WC - Current period WC
Capex as % of revenue * Revenue

NOPAT + D&A + Changes in NWC - Capex

Revenue * NWC as % of revenue

<-Stub year counts first year cash flows starting at the valuation date
 Year 1 EBITDA multiple
Long term growth rate (g):
0.0x 2.0% 2.5% 3.0% 3.5%
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Year 1 EBITDA multiple

Exit EBITDA Multiple
 0.0x 11.5x 12.0x 12.5x 13.0x
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

LTM EBITDA Multiple Range

le at 2.0%-4.0% Perpe- LTM EBITDA Purchase Multiple at 0.0x-0.0x Exit LTM EBITDA Purchase Multiple at 8.0%-10.0% WACC
.0% WACC EBITDA Multiple at 9.0% WACC at 12.5x Exit EBITDA

Low Diff.
%-4.0% Perpetuity Growth at 9.0% WACC 0.00 0.00
x-0.0x Exit EBITDA Multiple at 9.0% WACC 0.00 0.00
%-10.0% WACC at 12.5x Exit EBITDA 0.00 0.00
ate (g):
4.0%

tiple
13.5x

High
0.00
0.00
0.00
Discounted Cash Flow Valuation
$ and shares in millions, except per share data
Most recent fiscal year end 9/28/2019
End of first fiscal year 9/30/2020
Most recent quarter end date 12/28/2019
Valuation date 2/28/2020
Portion of year 1 cash flows in forecast 58.9%

Unlevered Free Cash Flows

Actual
Fiscal year ended 9/28/19

Revenue 260,174
% growth
EBITDA 76,477
% margin 29.4%
EBIT 63,930
% margin 24.6%

Tax on EBIT 10,165

Tax rate 15.9%
NOPAT (aka EBIAT) 53,765

Depreciation & amortization 12,547

Changes in net working capital (2,927)
Capital expenditures (10,495)
as % of revenue 4.0%

Unlevered free cash flows (UFCF)

Net working capital (WC Assets - WC liabilities) (30,143) (27,216)

as % of revenue (10.5%)

Present value of UFCF on Feb 28, 2020 valuation date

Val date
Date for discounting cash flows 2/28/2020
Unlevered free cash flows (UFCF) stub adjusted 58.9%
Present value of of unlevered free cash flows

Terminal value - growth in perpetuity approach

Long term growth rate 3.0%
2024 FCF x (1+g) 77,651
Terminal value in 2024 1,294,189
Present value of terminal value 871,251
Present value of stage 1 cash flows 251,226
Total enterprise value (TEV) 1,122,477

Terminal value as % of TEV 77.6%

Stage 1 cash flows as % of TEV 22.4%
Implied TV exit EBITDA multiple 12.7x

Net debt
Source doc Q1 2020 10Q
Source date 12/28/2019
Gross debt and equivalents
Debt 108,292
Convertible debt 0
Preferred stock 0
Noncontrolling (minority) interests 0
Nonoperating assets
Cash 207,061
Equity investments 0

Net debt (98,769)

Valuation
Perpetuity EBITDA
Enterprise value 1,122,477 1,110,725
Net debt (98,769) (98,769)
Equity value 1,221,246 1,209,494
Shares outstanding 4,472 4,472
Equity value per share $273.12 $270.49

Year 1 Multiples Perpetuity EBITDA

EV / Revenue 4.0x 4.0x
EV / EBITDA 13.8 13.6
EV / EBIT 16.2 16.1

Outputs

Equ

273.12
10.0%
9.5%
WACC: 9.0%
8.5%
Data 8.0%
Tables
Equ
 $270.49
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Equity value range

DCF Equity Valuation Range

400.00

350.00
327.85
314.36
300.00 285.87

250.00 255.11
243.66

200.00

169.50
150.00

100.00
DCF Value at 11.5x-13.5x Exit DCF Value at 2.0%-4.0% Perpetuity 52 Week Market High/Low
EBITDA Range at 9.0% WACC Range at 9.0% WACC

Low Diff.
DCF Value at 11.5x-13.5x Exit EBITDA Range at 9.0% WACC 255.11 30.75
DCF Value at 2.0%-4.0% Perpetuity Range at 9.0% WACC 243.66 70.70
52 Week Market High/Low 169.50 158.35
 Discount rate (WACC) 9.0% <-This will change if you reference WACC from
Share price (Public Co) $273.52
Share price date 2/27/2020
Midyear adjustment? 0

Forecasts
9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

280,988 306,277 324,653 344,133 364,781

8.0% 9.0% 6.0% 6.0% 6.0%
81,486 88,820 92,526 98,078 102,139
29.0% 29.0% 28.5% 28.5% 28.0%
69,123 76,569 81,163 87,754 91,195
24.6% 25.0% 25.0% 25.5% 25.0%

10,921 12,710 13,554 15,181 15,777

15.8% 16.6% 16.7% 17.3% 17.3%
58,202 63,859 67,609 72,572 75,418

12,363 12,251 11,363 10,324 10,943

2,177 2,645 1,922 2,038 2,160
(11,335) (11,945) (12,337) (12,733) (13,132)
4.0% 3.9% 3.8% 3.7% 3.6%

61,408 66,810 68,557 72,201 75,390

(29,393) (32,039) (33,961) (35,999) (38,159)

(10.5%) (10.5%) (10.5%) (10.5%) (10.5%)

Yr 1 - Stub Year 2 Year 3 Year 4 Year 5

9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024
36,162 66,810 68,557 72,201 75,390 <-Stub year counts first year cash flows starti
34,372 58,260 54,847 52,993 50,752

Terminal value - EBITDA multiple approach

Terminal year EBITDA 102,139
EBITDA multiple 12.5x
Terminal value in 2024 1,276,732
Present value of terminal value 859,499
Present value of stage 1 cash flows 251,226
Enterprise value (stage 1 + 2) 1,110,725

Terminal value as % of TEV 77.4%

Stage 1 cash flows as % of TEV 22.6%
Implied terminal growth rate 2.9%

Shares outstanding

Source doc Date Shares

Basic shares Q1 2020 10Q 1/17/2020 4,375.480
Restricted stock / RSUs Q1 2020 10Q 12/28/2019 96.020
Options / warrants 0.000 <-This will change if you reference illustrative
Convertible debt 0.000 <-This will change if you reference illustrative
Convertible preferred stock 0.000 <-This will change if you reference illustrative
Net diluted shares outstanding 4,471.500

Equity value per share Year 1

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0% 13.8x
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Equity value per share Year 1

Exit EBITDA Multiple
 11.5x 12.0x 12.5x 13.0x 13.5x 13.6x
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Football field

LTM EBITDA Multiple Range

20.0x
19.0x

327.85 18.0x
17.0x
16.0x
16.0x
15.0x 14.5x
14.0x
13.0x
12.8x
12.0x 12.2x
169.50
11.0x
10.0x
LTM EBITDA Purchase Multiple at 2.0%- LTM EBITDA Purchase Multiple at LTM EBITDA
k Market High/Low 4.0% Perpetuity Growth at 9.0% WACC 12.8x-14.5x Exit EBITDA Multiple at 10.0% W
9.0% WACC

High
285.87 LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpetuity Growth at 9.0% WACC
314.36 LTM EBITDA Purchase Multiple at 12.8x-14.5x Exit EBITDA Multiple at 9.0% WACC
327.85 LTM EBITDA Purchase Multiple at 8.0%-10.0% WACC at 12.5x Exit EBITDA
nge if you reference WACC from the WACC worksheet

unts first year cash flows starting at the valuation date

nge if you reference illustrative options from Shares worksheet
nge if you reference illustrative convertible debt from Shares worksheet
nge if you reference illustrative convertible stock from Shares worksheet

Year 1 EBITDA multiple

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0%

Year 1 EBITDA multiple

Exit EBITDA Multiple
 11.5x 12.0x 12.5x 13.0x 13.5x

nge

4.5x
14.2x

13.1x
2.8x

chase Multiple at LTM EBITDA Purchase Multiple at 8.0%-

EBITDA Multiple at 10.0% WACC at 12.5x Exit EBITDA
WACC

Low Diff. High

at 9.0% WACC 12.16 3.88 16.04
ple at 9.0% WACC 12.79 1.69 14.47
13.12 1.04 14.16
WACC Buildup
$ and shares in millions, except per share data
Cost of capital assumptions
Source
Cost of debt Bloomberg - YTM on 2.2% 9/
Tax rate From terminal year of UFCF f
Cost of debt (after tax) Cost of debt x (1 - tax rate)

Risk free rate WSJ: 10 Year US Treasury Yie

Beta Bloomberg 2 year weekly adj
Market risk premium Market risk premium from D&
Cost of equity RfR + Beta x MRP

Capital weights (capital structure)

Target
Current (override) % of total
Equity
Debt

Cost of capital (WACC)

omberg - YTM on 2.2% 9/29 Bond
m terminal year of UFCF forecast
t of debt x (1 - tax rate)

: 10 Year US Treasury Yield

omberg 2 year weekly adjusted beta
ket risk premium from D&P May 1, 2019
+ Beta x MRP
WACC Buildup
$ and shares in millions, except per share data
Cost of capital assumptions
Source
Cost of debt 1.75% Bloomberg - YTM on 2.2% 9/
Tax rate 17.30% From terminal year of UFCF f
Cost of debt (after tax) 1.45% Cost of debt x (1 - tax rate)

Risk free rate 1.23% WSJ: 10 Year US Treasury Yie

Beta 1.099 Bloomberg 2 year weekly adj
Market risk premium 5.50% Market risk premium from D&
Cost of equity 7.3% RfR + Beta x MRP

Capital weights (capital structure)

Target
Current (override) % of total
Equity 1,223,044.7 108.8%
Debt (98,769.0) 100% (8.8%)

Cost of capital (WACC) 7.8%

WACC sensitivity to MRP and Beta

Beta
7.8% 0.999 1.099
4.50%
Market 5.00%
Risk 5.50%
Premium 6.00%
6.50%

Select Beta for model Observed

Observed 1.099 Bloomberg 2 year weekly adjusted beta

Industry beta 1.178 From schedule below

Industry beta

Observed b Share price Dil. shares

Microsoft MSFT 1.210 136.96 7,663
Alphabet (GOOG) 0.960 1,116.79 694
Amazon (AMZN) 1.580 1,952.32 492
Apple (AAPL) 1.099

Industry average delevered beta 1.262

Apple (AAPL) beta 1.178
omberg - YTM on 2.2% 9/29 Bond
m terminal year of UFCF forecast
t of debt x (1 - tax rate)

: 10 Year US Treasury Yield

omberg 2 year weekly adjusted beta
ket risk premium from D&P May 1, 2019
+ Beta x MRP

Beta
1.199

weekly adjusted beta

Market cap Net Debt Tax rate Delev. b

1,049,497 (45,193) 16.4% 1.255
775,276 (101,216) 13.9% 1.082
961,127 31,985 12.7% 1.535
1,223,045 (98,769) 17.3% 1.178
Shares - Options and Convertibles
$ and shares in millions, except per share data
Current share price

Stock options - Treasury stock method

Outstanding Exercise
options price
Tranche 1 10.000 $67.45
Tranche 2 50.000 $112.63
Tranche 3 10.000 $146.29
Tranche 4 42.000 $218.91
Tranche 5 20.000 $265.13
Tranche 6 28.000 $302.61
Tranche 7 45.000 $309.74
Total 205.000

Total proceeds ($mm)

Total shares repurchased (mm)
Net dilutive impact of stock options

Convertible securities "if-converted" test

Convertible Debt
Principal Outstanding
Each $1,000 in principal convertible into (Conversion ratio)
Conversion price
Common shares convertible into

Dilutive impact of convertible securities

Elimination of liability from net debt

Convertible Preferred Stock

Convertible Preferred Par Value
Preferred shares outstanding
Conversion ratio
Common shares convertible into
Conversion price

Dilutive impact of convertible securities

Elimination of liability from net debt
 $273.52

In-the-$
options
Shares - Options and Convertibles
$ and shares in millions, except per share data
Current share price

Stock options - Treasury stock method

Outstanding Exercise
options price
Tranche 1 10.000 $67.45
Tranche 2 50.000 $112.63
Tranche 3 10.000 $146.29
Tranche 4 42.000 $218.91
Tranche 5 20.000 $265.13
Tranche 6 28.000 $302.61
Tranche 7 45.000 $309.74
Total 205.000

Total proceeds ($mm)

Total shares repurchased (mm)
Net dilutive impact of stock options

Convertible securities "if-converted" test

Convertible Debt
Principal Outstanding
Each $1,000 in principal convertible into (Conversion ratio)
Conversion price
Common shares convertible into

Dilutive impact of convertible securities

Elimination of liability from net debt

Convertible Preferred Stock

Convertible Preferred Par Value
Preferred shares outstanding
Conversion ratio
Common shares convertible into
Conversion price

Dilutive impact of convertible securities

Elimination of liability from net debt
 $273.52

In-the-$
options
10.000
50.000
10.000
42.000
20.000
0.000
0.000
132.000

22,265.720
(81.404)
50.596

14,543
4.00
$ 250.00
58.17

58.172
(14,543)

34,654
45.500
4.30
195.650
$177.12

195.650
(34,654)
Discounted Cash Flow Valuation
$ and shares in millions, except per share data
Most recent fiscal year end 9/28/2019
End of first fiscal year 9/30/2020
Most recent quarter end date 12/28/2019
Valuation date 2/28/2020
Portion of year 1 cash flows in forecast 58.9%

Unlevered Free Cash Flows

Actual
Fiscal year ended 9/28/19

Revenue 260,174
% growth
EBITDA 76,477
% margin 29.4%
EBIT 63,930
% margin 24.6%

Tax on EBIT 10,165

Tax rate 15.9%
NOPAT (aka EBIAT) 53,765

Depreciation & amortization 12,547

Changes in net working capital (2,927)
Capital expenditures (10,495)
as % of revenue 4.0%

Unlevered free cash flows (UFCF)

Net working capital (WC Assets - WC liabilities) (30,143) (27,216)

as % of revenue (10.5%)

Present value of UFCF on Feb 28, 2020 valuation date

Val date
Date for discounting cash flows 2/28/2020
Unlevered free cash flows (UFCF) stub adjusted 58.9%
Present value of of unlevered free cash flows

Terminal value - growth in perpetuity approach

Long term growth rate 3.0%
2024 FCF x (1+g) 77,651
Terminal value in 2024 1,622,322
Present value of terminal value 1,149,767
Present value of stage 1 cash flows 258,962
Total enterprise value (TEV) 1,408,729

Terminal value as % of TEV 81.6%

Stage 1 cash flows as % of TEV 18.4%
Implied TV exit EBITDA multiple 15.9x

Net debt
Source doc Q1 2020 10Q
Source date 12/28/2019
Gross debt and equivalents
Debt 108,292
Convertible debt 0
Preferred stock 0
Noncontrolling (minority) interests 0
Nonoperating assets
Cash 207,061
Equity investments 0

Net debt (98,769)

Valuation
Perpetuity EBITDA
Enterprise value 1,408,729 1,163,804
Net debt (98,769) (98,769)
Equity value 1,507,498 1,262,573
Shares outstanding 4,776 4,776
Equity value per share $315.65 $264.36

Year 1 Multiples Perpetuity EBITDA

EV / Revenue 5.0x 4.1x
EV / EBITDA 17.3 14.3
EV / EBIT 20.4 16.8

Outputs

Equ

315.65
10.0%
9.5%
WACC: 9.0%
8.5%
Data 8.0%
Tables
Equ
 $264.36
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Equity value range

DCF Equity Valuation Range

400.00

350.00
327.85

300.00 294.32
267.65
250.00
238.85
228.13
200.00

169.50
150.00

100.00
DCF Value at 11.5x-13.5x Exit DCF Value at 2.0%-4.0% Perpetuity 52 Week Market High/Low
EBITDA Range at 9.0% WACC Range at 9.0% WACC

Low Diff.
DCF Value at 11.5x-13.5x Exit EBITDA Range at 9.0% WACC 238.85 28.79
DCF Value at 2.0%-4.0% Perpetuity Range at 9.0% WACC 228.13 66.19
52 Week Market High/Low 169.50 158.35
 Discount rate (WACC) 7.8%
Share price (Public Co) $273.52
Share price date 2/27/2020
Midyear adjustment? 0

Forecasts
9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

280,988 306,277 324,653 344,133 364,781

8.0% 9.0% 6.0% 6.0% 6.0%
81,486 88,820 92,526 98,078 102,139
29.0% 29.0% 28.5% 28.5% 28.0%
69,123 76,569 81,163 87,754 91,195
24.6% 25.0% 25.0% 25.5% 25.0%

10,921 12,710 13,554 15,181 15,777

15.8% 16.6% 16.7% 17.3% 17.3%
58,202 63,859 67,609 72,572 75,418

12,363 12,251 11,363 10,324 10,943

2,177 2,645 1,922 2,038 2,160
(11,335) (11,945) (12,337) (12,733) (13,132)
4.0% 3.9% 3.8% 3.7% 3.6%

61,408 66,810 68,557 72,201 75,390

(29,393) (32,039) (33,961) (35,999) (38,159)

(10.5%) (10.5%) (10.5%) (10.5%) (10.5%)

Yr 1 - Stub Year 2 Year 3 Year 4 Year 5

9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024
36,162 66,810 68,557 72,201 75,390 <-Stub year counts first year cash flows starti
34,600 59,306 56,461 55,166 53,430

Terminal value - EBITDA multiple approach

Terminal year EBITDA 102,139
EBITDA multiple 12.5x
Terminal value in 2024 1,276,732
Present value of terminal value 904,842
Present value of stage 1 cash flows 258,962
Enterprise value (stage 1 + 2) 1,163,804

Terminal value as % of TEV 77.7%

Stage 1 cash flows as % of TEV 22.3%
Implied terminal growth rate 1.8%

Shares outstanding

Source doc Date Shares

Basic shares Q1 2020 10Q 1/17/2020 4,375.480
Restricted stock / RSUs Q1 2020 10Q 12/28/2019 96.020
Options / warrants 50.596 <-Illustrative only - Apple doesn't have option
Convertible debt 58.172 <-Illustrative only - Apple doesn't have conve
Convertible preferred stock 195.650 <-Illustrative only - Apple doesn't have conve
Net diluted shares outstanding 4,775.918

Equity value per share Year 1

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0% 17.3x
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Equity value per share Year 1

Exit EBITDA Multiple
 11.5x 12.0x 12.5x 13.0x 13.5x 14.3x
10.0%
9.5%
WACC: 9.0%
8.5%
8.0%

Football field

LTM EBITDA Multiple Range

20.0x
19.0x

327.85 18.0x
17.0x
16.0x
16.0x
15.0x 14.5x
14.0x
13.0x
12.8x
12.0x 12.2x
169.50
11.0x
10.0x
LTM EBITDA Purchase Multiple at 2.0%- LTM EBITDA Purchase Multiple at LTM EBITDA
k Market High/Low 4.0% Perpetuity Growth at 9.0% WACC 12.8x-14.5x Exit EBITDA Multiple at 10.0% W
9.0% WACC

High
267.65 LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpetuity Growth at 9.0% WACC
294.32 LTM EBITDA Purchase Multiple at 12.8x-14.5x Exit EBITDA Multiple at 9.0% WACC
327.85 LTM EBITDA Purchase Multiple at 8.0%-10.0% WACC at 12.5x Exit EBITDA
unts first year cash flows starting at the valuation date
nly - Apple doesn't have options
nly - Apple doesn't have convertible debt
nly - Apple doesn't have convertible preferred stock

Year 1 EBITDA multiple

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0%

Year 1 EBITDA multiple

Exit EBITDA Multiple
 11.5x 12.0x 12.5x 13.0x 13.5x

nge

4.5x
14.2x

13.1x
2.8x

chase Multiple at LTM EBITDA Purchase Multiple at 8.0%-

EBITDA Multiple at 10.0% WACC at 12.5x Exit EBITDA
WACC

Low Diff. High

at 9.0% WACC 12.16 3.88 16.04
ple at 9.0% WACC 12.79 1.69 14.47
13.12 1.04 14.16
Financial Statement Model for Apple
$ and shares in millions, except per share data

Company name Apple Select an operating scenario: Base case

Ticker AAPL
Circ break 1=off, 0=on 1
Latest closing share price $293.65
Latest closing share price date 12/31/2019
Latest fiscal year end date 9/29/19
Shares outstanding (millions) 4,443.265

INCOME STATEMENT
Fiscal year 2016A 2017A 2018A 2019A 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/16 9/30/17 9/29/18 9/29/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24 WSP Comments

Revenue 215,639 229,234 265,595 260,174 275,784 294,814 315,156 336,901 360,148 Previous year's revenues x (1+revenue growth rate)
Cost of sales (enter as -) (131,376) (141,048) (163,756) (161,782) (171,538) (183,374) (196,027) (209,553) (224,012) Plug = Revenue - Gross Profit
Gross Profit 84,263 88,186 101,839 98,392 104,247 111,440 119,129 127,349 136,136 Revenue x Gross Profit Margin forecast
Research & development (enter as -) (10,045) (11,581) (14,236) (16,217) (17,099) (18,278) (19,540) (20,888) (22,329) Revenue x R&D % of sales forecast
Selling, general & administrative (enter as -) (14,194) (15,261) (16,705) (18,245) (19,305) (20,637) (22,061) (23,583) (25,210) Revenue x SG&A % of sales forecast
Operating profit (EBIT) 60,024 61,344 70,898 63,930 67,843 72,524 77,528 82,878 88,596 Gross Profit - R&D - SG&A
Interest income 3,999 5,201 5,686 4,961 4,387 4,119 3,871 3,710 3,643 Reference from interest on cash schedule
Interest expense (enter as -) (1,456) (2,323) (3,240) (3,576) (3,569) (3,636) (3,636) (3,636) (3,636) Reference from interest expense schedule
Other expense, net (enter as -) (1,195) (133) (441) 422 422 422 422 422 422 Straight-line
Pretax profit 61,372 64,089 72,903 65,737 69,083 73,429 78,185 83,373 89,025 EBIT + interest income less interest expense less other expense
Taxes (enter expense as -) (15,685) (15,738) (13,372) (10,481) (11,014) (11,707) (12,466) (13,293) (14,194) Pre-tax Profit x Tax Rate forecast
Net income 45,687 48,351 59,531 55,256 58,068 61,722 65,719 70,080 74,831 Pre-tax Profit less taxes

Depreciation & amortization 10,505 10,157 10,903 12,547 11,808 12,418 13,558 14,796 16,141 Reference from D&A schedule
EBITDA 70,529 71,501 81,801 76,477 79,651 84,942 91,086 97,674 104,737 EBIT + D&A
Stock based compensation 4,210 4,840 5,340 6,068 6,432 6,876 7,350 7,858 8,400 WSP assumption: grow SBC in-line with revenue growth
Adjusted EBITDA 74,739 76,341 87,141 82,545 86,083 91,818 98,437 105,532 113,137 EBITDA + Stock-based compensation

Growth rates & margins

Revenue growth 6.3% 15.9% (2.0%) 6.0% 6.9% 6.9% 6.9% 6.9% Consensus estimates through 2021; straight-line growth rate thereafter
Gross profit margin 39.1% 38.5% 38.3% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8% Straight line last historical year
R&D % of sales 4.7% 5.1% 5.4% 6.2% 6.2% 6.2% 6.2% 6.2% 6.2% Straight line last historical year
SG&A % of sales 6.6% 6.7% 6.3% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% Straight line last historical year
Tax rate 25.6% 24.6% 18.3% 15.9% 15.9% 15.9% 15.9% 15.9% 15.9% Straight line last historical year

BALANCE SHEET
Fiscal year 2017A 2018A 2019A 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/17 9/29/18 9/29/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24
Cash & equivalents, ST and LT marketable securities 268,895 237,100 205,898 194,727 181,481 172,040 166,750 165,986 Reference from 'net change in cash' line on the cash flow statement
Accounts receivable 17,874 23,186 22,926 24,302 25,978 27,771 29,687 31,735 Grow in-line with revenue growth
Inventories 4,855 3,956 4,106 4,354 4,654 4,975 5,318 5,685 Grow in-line with cost of sales growth
Other current assets 31,735 37,896 35,230 37,344 39,921 42,675 45,620 48,767 Grow in-line with revenue growth
Property, plant & equipment 33,783 41,304 37,378 39,817 42,051 44,156 46,103 47,861 Reference from PP&E schedule
Other non current assets 18,177 22,283 32,978 34,957 37,369 39,947 42,703 45,650 Grow in-line with revenue growth
Total assets 375,319 365,725 338,516 335,500 331,454 331,564 336,182 345,686

Accounts payable 44,242 55,888 46,236 49,024 52,407 56,023 59,888 64,021 Grow in-line with cost of sales growth
Other current liabilities 30,551 33,327 37,720 39,983 42,742 45,691 48,844 52,214 Grow in-line with revenue growth
Deferred revenue (current) 10,384 5,966 5,522 5,853 6,257 6,689 7,150 7,644 Grow in-line with revenue growth
Commercial paper / revolver 11,977 11,964 5,980 12,000 12,000 12,000 12,000 12,000 Reference EOP balance from CP/revolver schedule
Long term debt (includes current portion) 103,703 102,519 102,067 102,067 102,067 102,067 102,067 102,067 WSP assumption: straight-line
Other non current liabilities 40,415 48,914 50,503 53,533 57,227 61,176 65,397 69,909 Grow in-line with revenue growth
Total liabilities 241,272 258,578 248,028 262,461 272,700 283,646 295,347 307,855

Common stock 35,867 40,201 45,174 51,606 58,482 65,832 73,690 82,089 Increase by stock-based compensation forecasted in the I/S section
Retained earnings 98,330 70,400 45,898 22,017 856 (17,330) (32,271) (43,675) Reference from Retained Earnings schedule
Other comprehensive income (150) (3,454) (584) (584) (584) (584) (584) (584) WSP assumption: straight-line
Total equity 134,047 107,147 90,488 73,039 58,754 47,918 40,835 37,831

Balance check 0 0 0 0 0 0 0 0

CASH FLOW STATEMENT

Fiscal year 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

Net income 58,068 61,722 65,719 70,080 74,831

Depreciation and amortization 11,808 12,418 13,558 14,796 16,141 Reference from the I/S
Stock based compensation 6,432 6,876 7,350 7,858 8,400
Decreases / (Increases) in working capital assets (3,737) (4,554) (4,868) (5,204) (5,563)
Increases / (Decreases) in working capital liabilities 5,383 6,545 6,997 7,480 7,996
Other non current assets (3,301) (3,825) (4,089) (4,371) (4,673) Reference from schedule NOT the B/S: Only include 'Additions' (as outflow)
Other non current liabilities 3,030 3,694 3,949 4,221 4,512
Cash from operating activities 77,684 82,876 88,616 94,860 101,644

Capital expenditures (12,926) (13,239) (14,152) (15,129) (16,173) Reference from PP&E schedule
Cash from investing activities (12,926) (13,239) (14,152) (15,129) (16,173)

Long term debt 0 0 0 0 0

Commercial paper/ Revolver 6,020 0 0 0 0 Reference from B/S
Share repurchases (67,101) (67,101) (67,101) (67,101) (67,101) Reference from Retained Earnings schedule
Common dividends (14,848) (15,782) (16,804) (17,920) (19,134) Reference from Retained Earnings schedule
Cash from financing activities (75,929) (82,883) (83,905) (85,021) (86,235)

Net change in cash during period (11,171) (13,246) (9,441) (5,290) (764)

PROPERTY, PLANT & EQUIPMENT

Fiscal year 2017A 2018A 2019A 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/17 9/29/18 9/29/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24
Forecast
Beginning of period 37,378 39,817 42,051 44,156 46,103 BOP = Previous year EOP
Plus: Capital expenditures 12,734 12,451 13,313 10,495 12,926 13,239 14,152 15,129 16,173 First two years - consensus estimates, then grow with revenue
Less: Depreciation (8,300) (8,200) (9,300) (11,300) (10,487) (11,005) (12,048) (13,181) (14,414) Capex x 'D&A related to PP&E as a % of capex' ratio (below)
End of period 0 33,783 41,304 37,378 39,817 42,051 44,156 46,103 47,861 BOP + Capex - Depreciation
Step
D&A related to PP&E as a % of capex 65.9% 69.9% 107.7% 81.1% 83.1% 85.1% 87.1% 89.1% 2.0%

IMPUTING TOTAL DEPRECIATION & AMORTIZATION

D&A not related to PP&E 2,205 1,957 1,603 1,247 1,322 1,413 1,511 1,615 1,726 Revenue x 'as % of revenue' assumption
as % of revenue 1.0% 0.9% 0.6% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Straight line last historical % of revenue - WSP assumption
Depreciation & Amortization - Total 10,505 10,157 10,903 12,547 11,808 12,418 13,558 14,796 16,141 D&A from PP&E + D&A not from PP&E

OTHER NON-CURRENT ASSETS

Beginning of period 32,978 34,957 37,369 39,947 42,703 BOP = Previous year EOP
Less: Amortization of intangible assets (1,322) (1,413) (1,511) (1,615) (1,726) Assume all D&A not from PP&E is in non-current assets
Plus: Additions 3,301 3,825 4,089 4,371 4,673 Because we already know the EOP balance, this is a plug: EOP - D&A not from PP&E - BOP
End of period 18,177 22,283 32,978 34,957 37,369 39,947 42,703 45,650 Referenced from balance sheet

RETAINED EARNINGS
Beginning of period 45,898 22,017 856 (17,330) (32,271) BOP = Previous year EOP
Plus: Net income 45,687 48,351 59,531 55,256 58,068 61,722 65,719 70,080 74,831 Reference from income statement
Less: Dividends (12,188) (12,803) (13,735) (14,129) (14,848) (15,782) (16,804) (17,920) (19,134) WSP assumption: Hold last historical year's dividend payout ratio constant
Less: Repurchases (29,000) (33,001) (73,056) (67,101) (67,101) (67,101) (67,101) (67,101) (67,101) WSP assumption: Straight-line last historical year repurchases
End of period 0 98,330 70,400 45,898 22,017 856 (17,330) (32,271) (43,675) BOP + net income - dividends - repurchases

REVOLVER (MODEL PLUG)

Fiscal year 2017A 2018A 2019A 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/17 9/29/18 9/29/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

Revolver needs analysis

Cash at beginning of period (BOP) 205,898 194,727 181,481 172,040 166,750 Reference prior period EOP from B/S
Less: Minimum cash balance (50,000) (50,000) (50,000) (50,000) (50,000) WSP assumption
Plus: Free cash flows generated during period (17,191) (13,246) (9,441) (5,290) (764) CFO + CFI + CFF except revolver
Equals: Cash available (needed) to pay down (draw from) revolver 138,707 131,481 122,040 116,750 115,986

Commercial paper / Revolver

Beginning of period 5,980 12,000 12,000 12,000 12,000 BOP = Previous year EOP
Draw / (paydown) (5,980) (12,000) (12,000) (12,000) (12,000) Cash (paydown) / additional borrowing from revolver. Paydown not to exceed BOP balance.
Discretionary borrowing / (paydown) 12,000 12,000 12,000 12,000 12,000 WSP assumption
End of period 11,977 11,964 5,980 12,000 12,000 12,000 12,000 12,000
Debt balance: OK OK OK OK OK

INTEREST EXPENSE AND INTEREST INCOME

Fiscal year 2017A 2018A 2019A 2020P 2021P 2022P 2023P 2024P
Fiscal year end date 9/30/17 9/29/18 9/29/19 9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

Total interest expense (from I/S) 1,456 2,323 3,240 3,576 3,569 3,636 3,636 3,636 3,636 Interest expense from revolver/CP + interest expense from long term debt

Commercial Paper / Revolver

Weighted average interest rate 1.20% 2.18% 2.24% 2.24% 2.24% 2.24% 2.24% 2.24% WSP assumption: Straight-line
End of period balance (from B/S) 11,977 11,964 5,980 12,000 12,000 12,000 12,000 12,000 Reference from revolver / CP schedule above
Interest expense 144 261 201 201 269 269 269 269 Interest rate x average of BOP & EOP revolver balances (circularity)

Long term debt

End of period balance (from B/S) 103,703 102,519 102,067 102,067 102,067 102,067 102,067 102,067 Reference from B/S
Weighted average interest rate 2.1% 2.9% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% WSP assumption: Straight-line
Interest expense 2,179 2,979 3,375 3,368 3,368 3,368 3,368 3,368 Interest rate x average of BOP & EOP LTD balances

Interest rate on cash

Weighted average interest rate on cash 1.73% 1.99% 2.16% 2.19% 2.19% 2.19% 2.19% 2.19% 2.19% WSP assumption: Straight-line
Interest income 3,999 5,201 5,686 4,961 4,387 4,119 3,871 3,710 3,643 Interest rate x average of BOP & EOP cash balances (circularity)
Discounted Cash Flow Valuation
$ and shares in millions, except per share data
Most recent fiscal year end 9/28/2019
End of first fiscal year 9/30/2020
Most recent quarter end date 12/28/2019
Valuation date 2/28/2020
Portion of First Year Cash Flows 58.9%

Unlevered Free Cash Flows

LTM Actual
Fiscal year ended 2/28/2020 9/28/19

Revenue
% growth
EBITDA
% margin
EBIT
% margin

Tax on EBIT
Tax rate
NOPAT (aka EBIAT)

Depreciation & amortization

Changes in net working capital
Capital expenditures
as % of revenue

Unlevered free cash flows (UFCF)

Net working capital (WC Assets - WC liabilities)

as % of revenue

Present value of UFCF on Feb 28, 2020 valuation date

Val date
Date for discounting cash flows 2/28/2020
Unlevered free cash flows (UFCF) stub adjusted 58.9%
Present value of of unlevered free cash flows

Terminal value - growth in perpetuity approach

Long term growth rate 3.0%
2024 FCF x (1+g) 0
Terminal value in 2024 0
Present value of terminal value 0
Present value of stage 1 cash flows 0
Total enterprise value (TEV) 0

Terminal value as % of TEV #DIV/0!

Stage 1 cash flows as % of TEV #DIV/0!
Implied TV exit EBITDA multiple #DIV/0!

Net debt
Source doc Q1 2020 10Q
Source date 12/28/2019
Gross debt and equivalents
Debt 108,292
Convertible debt 0
Preferred stock 0
Noncontrolling (minority) interests 0
Nonoperating assets
Cash 207,061
Equity investments 0

Net debt (98,769)

Valuation
Perpetuity EBITDA
Enterprise value 0 0
Net debt (98,769) (98,769)
Equity value 98,769 98,769
Shares outstanding 4,776 4,776
Equity value per share $20.68 $20.68

Last twelve months (LTM)

Perpetuity EBITDA
EV / Revenue #DIV/0! #DIV/0!
EV / EBITDA #DIV/0! #DIV/0!
EV / EBIT #DIV/0! #DIV/0!
Year 1
Perpetuity EBITDA
EV / Revenue #DIV/0! #DIV/0!
EV / EBITDA #DIV/0! #DIV/0!
EV / EBIT #DIV/0! #DIV/0!

Outputs

Equ

$20.68
11.0%
10.0%
 WACC: 9.0%
8.0%
Data 7.0%
Tables
Equ

$20.68
11.0%
10.0%
WACC: 9.0%
8.0%
7.0%

Equity value range

DCF Equity Valuation Range

400.00

350.00
327.85

300.00

250.00

200.00

169.50
150.00

100.00
DCF Value at 11.0x-15.0x Exit DCF Value at 2.0%-4.0% Perpetuity 52 Week Market High/Low
EBITDA Range at 9.0% WACC Range at 9.0% WACC

Low Diff.
DCF Value at 11.0x-15.0x Exit EBITDA Range at 9.0% WACC 20.68 0.00
DCF Value at 2.0%-4.0% Perpetuity Range at 9.0% WACC 20.68 0.00
52 Week Market High/Low 169.50 158.35
 Discount rate (WACC) 7.8% Link from WACC
Share price (Public Co) $273.52 Source: CIQ
Share price date 2/27/2020
Midyear adjustment? 0

Case active: Base case

Forecasts
9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

Yr 1 - Stub Year 2 Year 3 Year 4 Year 5

9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024
0 0 0 0 0 <-Stub year counts first year cash flows starti
0 0 0 0 0

Terminal value - EBITDA multiple approach

Terminal year EBITDA 0
EBITDA multiple 12.5x
Terminal value in 2024 0
Present value of terminal value 0
Present value of stage 1 cash flows 0
Enterprise value (stage 1 + 2) 0

Terminal value as % of TEV #DIV/0!

Cash flows as % of TEV #DIV/0!
Implied terminal growth rate #DIV/0!

Shares outstanding

Source doc Date Shares

Basic shares Q1 2020 10Q 1/17/2020 4,375.480
Restricted stock / RSUs Q1 2020 10Q 12/28/2019 96.020
Options / warrants 50.596 <-These are for illustrative purposes, Apple d
Convertible debt 58.172 <-These are for illustrative purposes, Apple d
Convertible preferred stock 195.650 <-These are for illustrative purposes, Apple d
Net diluted shares outstanding 4,775.918

Equity value per share LTM E

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0% #DIV/0!
11.0%
10.0%
 WACC: 9.0%
8.0%
7.0%

Equity value per share LTM E

Exit EBITDA Multiple
11.0x 12.0x 13.0x 14.0x 15.0x #DIV/0!
11.0%
10.0%
WACC: 9.0%
8.0%
7.0%

Football field

LTM EBITDA Multiple Range

20.0x
19.0x

327.85 18.0x
17.0x
16.0x
15.0x
14.0x
13.0x

169.50 12.0x
11.0x
10.0x
k Market High/Low LTM EBITDA Purchase Multiple at 2.0%- #DIV/0! LTM EBITDA
4.0% Perpetuity Growth at 9.0% WACC 11.0% W

High
20.68 LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpetuity Growth at 9.0% WACC
20.68 #DIV/0!
327.85 LTM EBITDA Purchase Multiple at 7.0%-11.0% WACC at 13.0x Exit EBITDA
unts first year cash flows starting at the valuation date
illustrative purposes, Apple doesn't have options
illustrative purposes, Apple doesn't have convertible debt
illustrative purposes, Apple doesn't have convertible preferred stock

LTM EBITDA multiple

2.0% 2.5% 3.0% 3.5% 4.0%

#DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

LTM EBITDA multiple

Exit EBITDA Multiple
11.0x 12.0x 13.0x 14.0x 15.0x
#DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

nge

V/0! LTM EBITDA Purchase Multiple at 7.0%-

11.0% WACC at 13.0x Exit EBITDA

Low Diff. High

at 9.0% WACC #DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
Discounted Cash Flow Valuation
$ and shares in millions, except per share data
Most recent fiscal year end 9/28/2019
End of first fiscal year 9/30/2020
Most recent quarter end date 12/28/2019
Valuation date 2/28/2020
Portion of First Year Cash Flows 58.9%

Unlevered Free Cash Flows

LTM Actual
Fiscal year ended 2/28/2020 9/28/19

Revenue 266,592 260,174

% growth
EBITDA 77,782 76,477
% margin 29.4%
EBIT 65,539 63,930
% margin 24.6%

Tax on EBIT 10,193

Tax rate 15.9%
NOPAT (aka EBIAT) 53,737

Depreciation & amortization 12,547

Changes in net working capital
Capital expenditures
as % of revenue

Unlevered free cash flows (UFCF)

Net working capital (WC Assets - WC liabilities) (27,216)

as % of revenue (10.5%)

Present value of UFCF on Feb 28, 2020 valuation date

Val date
Date for discounting cash flows 2/28/2020
Unlevered free cash flows (UFCF) stub adjusted 58.9%
Present value of of unlevered free cash flows

Terminal value - growth in perpetuity approach

Long term growth rate 3.0%
2024 FCF x (1+g) 79,178
Terminal value in 2024 1,654,208
Present value of terminal value 1,172,365
Present value of stage 1 cash flows 251,706
Total enterprise value (TEV) 1,424,071
Terminal value as % of TEV 82.3%
Stage 1 cash flows as % of TEV 17.7%
Implied TV exit EBITDA multiple 15.8x

Net debt
Source doc Q1 2020 10Q
Source date 12/28/2019
Gross debt and equivalents
Debt 108,292
Convertible debt 0
Preferred stock 0
Noncontrolling (minority) interests 0
Nonoperating assets
Cash 207,061
Equity investments 0

Net debt (98,769)

Valuation
Perpetuity EBITDA
Enterprise value 1,424,071 1,180,713
Net debt (98,769) (98,769)
Equity value 1,522,840 1,279,482
Shares outstanding 4,776 4,776
Equity value per share $318.86 $267.90

Last twelve months (LTM)

Perpetuity EBITDA
EV / Revenue 5.3x 4.4x
EV / EBITDA 18.3 15.2
EV / EBIT 21.7 18.0
Year 1
Perpetuity EBITDA
EV / Revenue 5.2x 4.3x
EV / EBITDA 17.9 14.8
EV / EBIT 21.0 17.4

Outputs

Equ

$318.86
11.0%
10.0%
WACC: 9.0%
 8.0%
Data 7.0%
Tables
Equ

$267.90
11.0%
10.0%
WACC: 9.0%
8.0%
7.0%

Equity value range

DCF Equity Valuation Range

400.00

350.00
327.85

293.24 297.16
300.00

250.00
234.18 229.67
200.00

169.50
150.00

100.00
DCF Value at 11.0x-15.0x Exit DCF Value at 2.0%-4.0% Perpetuity 52 Week Market High/Low
EBITDA Range at 9.0% WACC Range at 9.0% WACC

Low Diff.
DCF Value at 11.0x-15.0x Exit EBITDA Range at 9.0% WACC 234.18 59.05
DCF Value at 2.0%-4.0% Perpetuity Range at 9.0% WACC 229.67 67.49
52 Week Market High/Low 169.50 158.35
 Discount rate (WACC) 7.8% Link from WACC
Share price (Public Co) $273.52 Source: CIQ
Share price date 2/27/2020
Midyear adjustment? 0

Case active: Base case

Forecasts
9/30/20 9/30/21 9/30/22 9/30/23 9/30/24

275,784 294,814 315,156 336,901 360,148

6.0% 6.9% 6.9% 6.9% 6.9%
79,651 84,942 91,086 97,674 104,737
28.9% 28.8% 28.9% 29.0% 29.1%
67,843 72,524 77,528 82,878 88,596
24.6% 24.6% 24.6% 24.6% 24.6%

10,817 11,563 12,361 13,214 14,126

15.9% 15.9% 15.9% 15.9% 15.9%
57,026 60,961 65,167 69,664 74,471

11,808 12,418 13,558 14,796 16,141

1,646 1,991 2,129 2,276 2,433
(12,926) (13,239) (14,152) (15,129) (16,173)
(4.7%) (4.5%) (4.5%) (4.5%) (4.5%)

57,554 62,132 66,702 71,607 76,871

(28,862) (30,853) (32,982) (35,258) (37,691)

(10.5%) (10.5%) (10.5%) (10.5%) (10.5%)

Yr 1 - Stub Year 2 Year 3 Year 4 Year 5

9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024
33,893 62,132 66,702 71,607 76,871 <-Stub year counts first year cash flows starti
32,429 55,153 54,932 54,712 54,480

Terminal value - EBITDA multiple approach

Terminal year EBITDA 104,737
EBITDA multiple 12.5x
Terminal value in 2024 1,310,829
Present value of terminal value 929,007
Present value of stage 1 cash flows 251,706
Enterprise value (stage 1 + 2) 1,180,713
Terminal value as % of TEV 78.7%
Cash flows as % of TEV 21.3%
Implied terminal growth rate 1.8%

Shares outstanding

Source doc Date Shares

Basic shares Q1 2020 10Q 1/17/2020 4,375.480
Restricted stock / RSUs Q1 2020 10Q 12/28/2019 96.020
Options / warrants 50.596 <-These are for illustrative purposes, Apple d
Convertible debt 58.172 <-These are for illustrative purposes, Apple d
Convertible preferred stock 195.650 <-These are for illustrative purposes, Apple d
Net diluted shares outstanding 4,775.918

Equity value per share LTM E

Long term growth rate (g):
2.0% 2.5% 3.0% 3.5% 4.0% 18.3x
182.28 189.51 197.65 206.87 217.40 11.0%
203.00 212.53 223.41 235.97 250.63 10.0%
229.67 242.65 257.80 275.69 297.16 WACC: 9.0%
 265.27 283.76 305.96 333.09 367.00 8.0%
315.13 343.18 378.25 423.33 483.44 7.0%

Equity value per share LTM E

Exit EBITDA Multiple
11.0x 12.0x 13.0x 14.0x 15.0x 15.2x
218.70 232.28 245.86 259.45 273.03 11.0%
226.25 240.41 254.57 268.72 282.88 10.0%
234.18 248.95 263.71 278.47 293.24 WACC: 9.0%
242.52 257.92 273.32 288.72 304.12 8.0%
251.28 267.35 283.42 299.50 315.57 7.0%

Football field

LTM EBITDA Multiple Range

20.0x
19.0x

327.85 18.0x
17.0x 16.7x
17.0x
16.0x
15.0x
14.0x
13.0x
13.1x
12.8x
12.0x
169.50
11.0x
10.0x
LTM EBITDA Purchase Multiple at 2.0%- LTM EBITDA Purchase Multiple at LTM EBITDA
k Market High/Low 4.0% Perpetuity Growth at 9.0% WACC 13.1x-16.7x Exit EBITDA Multiple at 11.0% W
9.0% WACC

High
293.24 LTM EBITDA Purchase Multiple at 2.0%-4.0% Perpetuity Growth at 9.0% WACC
297.16 LTM EBITDA Purchase Multiple at 13.1x-16.7x Exit EBITDA Multiple at 9.0% WACC
327.85 LTM EBITDA Purchase Multiple at 7.0%-11.0% WACC at 13.0x Exit EBITDA
unts first year cash flows starting at the valuation date
illustrative purposes, Apple doesn't have options
illustrative purposes, Apple doesn't have convertible debt
illustrative purposes, Apple doesn't have convertible preferred stock

LTM EBITDA multiple

2.0% 2.5% 3.0% 3.5% 4.0%

9.9x 10.4x 10.9x 11.4x 12.1x
11.2x 11.8x 12.4x 13.2x 14.1x
12.8x 13.6x 14.6x 15.7x 17.0x
 15.0x 16.2x 17.5x 19.2x 21.3x
18.1x 19.8x 22.0x 24.7x 28.4x

LTM EBITDA multiple

Exit EBITDA Multiple
11.0x 12.0x 13.0x 14.0x 15.0x
12.2x 13.0x 13.8x 14.7x 15.5x
12.6x 13.5x 14.4x 15.2x 16.1x
13.1x 14.0x 14.9x 15.8x 16.7x
13.6x 14.6x 15.5x 16.5x 17.4x
14.2x 15.1x 16.1x 17.1x 18.1x

nge

6.7x
16.1x

13.8x
3.1x

chase Multiple at LTM EBITDA Purchase Multiple at 7.0%-

EBITDA Multiple at 11.0% WACC at 13.0x Exit EBITDA
WACC

Low Diff. High

at 9.0% WACC 12.83 4.14 16.98
ple at 9.0% WACC 13.11 3.63 16.74
13.83 2.31 16.13