02. lbo of micron technologies (deb sahoo)

LEVERAGED BUYOUT OF MICRON TECHNOLOGIES
DEB SAHOO, MBA, ROSS SCHOOL OF BUSINESS, UNIVERSITY OF MICHIGAN, ANN ARBOR
April 25, 2011

I
NDUSTRY
N
EWS
Industry Buzz
2

T
ABLE
OF
CONTENTS
Executive Summary
LBO Rationale
Financials
Industry Comparables
Financial Statements Projections Assumptions
Transaction Analysis
Return Analysis
4
8
10
11
21
23
32
3
Company Overview 6
Exit Strategies 36

E
XECUTIVE
S
UMMARY
Price Performance
Target Overview
•Ticker: MU
•Market Cap: $11.5B
•Number of Shares: 1001.5MM
•2011 EBITDA: $3,567.0MM
•LTM P/EPS: 7.91
•Total Enterprise Value: $16,408.0MM
•5 Year Sales Growth: 15.5%
•5 Year EBITDA Growth: 36.3%
•5 Year Avg. ROE: 5.2%
•Leverage: 0.17x
•Price to Book Value: 1.3x
•Price to Sales: 1.27x
•S&P Rating: B+
Key Financials
•Company: Micron Technology
•Headquarter: Boise, ID
•CEO: Steven R. Appleton
•Number of Employees: 25,900
•Manufacturer and marketer of semiconductor devices,
principally DRAM, NAND Flash, NOR flash memory and
CMOS image sensors
•Key industry player in semiconductor memory market
•Established customer base
Valuation
5
•Stock Price: $11.52
•52 Week High: $11.95
•52 Week Low: $6.36
•Stock Beta: 1.75
Offer Price per Share $15.31
Fully Diluted Shares 1,037.0
Equity Purchase Price $15,877.2
Plus: Existing Net Debt 531.0
Enterprise Value $16,408.2
Purchase Price
Exit Year 2016
Entry Multiple 4.6x
Exit Multiple 4.6x
IRR 28.4%
Cash Return 3.5x
Return

C
OMPANY
OVERVIEW
Products and Services
Company Overview
Manufacturer and marketer of semiconductor devices,
principally DRAM, NAND Flash, NOR flash memory and
CMOS image sensors
Products are used in electronic applications, including
personal computers, workstations, network servers, mobile
phones and other consumer applications including flash
memory cards, USB storage devices, digital still cameras,
MP3/4 players and in automotive applications
Operations in Europe, Asia Pacific and the US
Brands: Micron, Numonyx, Lexar, Crucial
Customers
Industry Comparables
7
•DRAM
•SDRAM
•DDR SDRAM
•DDR2 SDRAM
•DDR3 SDRAM
•RLDRAM Memory
•Mobile LPDRAM

L
BO
RATIONALE
Strong Financials
Value Creation
9
•Strong management team
•Potential for expense reduction
•Growth potential in emerging markets
•Potential to enter new market segment with
partnership with leading industry players
•Adequate strategic buyers such as AMD, INTEL for
exit strategy
•Increased dominant position and expanded
geographical presence will increase visibility in
investor community for IPO
•Adequate number of PE firms with matching
investment criteria
Viable Exit Strategy
•Strong defensible market position
•Product differentiation through RD
•Economy of Scale and Scope
•Known brand name with key customers
Industry Positioning
•Large amount of cash in hand
•Heavy Asset Base for loan collateral
•Clean balance sheet with low Leverage
•Predictable and steady cash flow in the past
•Limited working capital requirements
•Minimal future capital

F
INANCIALS
Five Year Income Statement
11
All figures in millions of U.S.Dollar,except per share items 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06
Sales/Revenue 8,482.0 4,803.0 5,841.0 5,688.0 5,272.0
Cost of Goods Sold (COGS) incl. DA 5,768.0 4,639.0 5,896.0 4,610.0 4,072.0
COGS excludingDA 3,763.0 2,500.0 3,836.0 2,892.0 2,791.0
Depreciation Amortization Expense 2,005.0 2,139.0 2,060.0 1,718.0 1,281.0
Gross Income 2,714.0 164.0 -55.0 1,078.0 1,200.0
SGA Expense 1,152.0 1,001.0 1,135.0 1,415.0 1,116.0
Other OperatingExpense 0.0 0.0 0.0 0.0 0.0
EBIT (Operating Income) 1,562.0 -837.0 -1,190.0 -337.0 84.0
NonoperatingIncome(Expense) - Net 89.0 -101.0 157.0 228.0 374.0
Interest Expense 178.0 135.0 82.0 40.0 25.0
Unusual Expense(Income) - Net -447.0 731.0 496.0 19.0 0.0
Pretax Income 1,920.0 -1,804.0 -1,611.0 -168.0 433.0
IncomeTaxes -19.0 2.0 18.0 30.0 18.0
Equity in Earnings of Affiliates -39.0 -140.0 0.0 0.0 0.0
Consolidated Net Income 1,900.0 -1,946.0 -1,629.0 -198.0 415.0
Minority Interest Expense 50.0 -111.0 -10.0 122.0 7.0
Net Income 1,850.0 -1,835.0 -1,619.0 -320.0 408.0

F
INANCIALS
Five Year Balance Sheet
12
All figures in millions of U.S. Dollar, except per shareitems 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06
Assets
Cash ST Investments 2,913.0 1,485.0 1,362.0 2,616.0 3,079.0
Total Accounts Receivable 1,531.0 798.0 1,032.0 994.0 956.0
Inventories 1,770.0 987.0 1,291.0 1,532.0 963.0
Other Current Assets 119.0 74.0 94.0 92.0 103.0
Total Current Assets 6,333.0 3,344.0 3,779.0 5,234.0 5,101.0
Net Property, Plant Equipment 6,601.0 7,081.0 8,811.0 8,279.0 5,888.0
Total Investments and Advances 936.0 360.0 26.0 27.0 21.0
IntangibleAssets 323.0 344.0 422.0 916.0 890.0
Other Assets 355.0 219.0 318.0 297.0 272.0
Total Assets 14,548.0 11,348.0 13,356.0 14,753.0 12,172.0
Liabilities Shareholders' Equity
ST Debt Curr. Portion LT Debt 712.0 424.0 373.0 557.0 289.0
Accounts Payable 799.0 526.0 597.0 856.0 854.0
Income TaxPayable 51.0 32.0 27.0 15.0 20.0
Other Current Liabilities 1,140.0 910.0 601.0 598.0 498.0
Total Current Liabilities 2,702.0 1,892.0 1,598.0 2,026.0 1,661.0
Long-Term Debt 1,648.0 2,674.0 2,451.0 1,987.0 405.0
Deferred Taxes -129.0 -103.0 -65.0 -40.0 -21.0
Other Liabilities 511.0 245.0 329.0 421.0 445.0
Total Liabilities 4,732.0 4,708.0 4,313.0 4,394.0 2,490.0
Preferred Stock (CarryingValue) 0.0 0.0 0.0 0.0 0.0
Common Equity 8,020.0 4,654.0 6,178.0 7,752.0 8,114.0
Total Shareholders' Equity 8,020.0 4,654.0 6,178.0 7,752.0 8,114.0
Accumulated Minority Interest 1,796.0 1,986.0 2,865.0 2,607.0 1,568.0
Total Equity 9,816.0 6,640.0 9,043.0 10,359.0 9,682.0
Liabilities Shareholders' Equity 14,548.0 11,348.0 13,356.0 14,753.0 12,172.0

F
INANCIALS
Five Year Cash Flow Statement
13
All figures in millions of U.S. Dollar,except per share items 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06
Operating Activities
Net Income before Extraordinaries 1,850.0 -1,835.0 -1,619.0 -320.0 408.0
Depreciation,Depletion Amortization 2,005.0 2,139.0 2,060.0 1,718.0 1,281.0
Deferred Taxes Investment Tax Credit 0.0 0.0 0.0 -11.0 -24.0
Other Funds -260.0 1,007.0 773.0 141.0 26.0
Funds from Operations 3,595.0 1,311.0 1,214.0 1,528.0 1,691.0
Changes in WorkingCapital -499.0 -105.0 -196.0 -591.0 328.0
Receivables -516.0 126.0 -26.0 5.0 -62.0
Inventories -121.0 -356.0 -40.0 -591.0 -12.0
Accounts Payable 54.0 107.0 -92.0 -1.0 130.0
Other Assets/Liabilities 84.0 18.0 -38.0 -4.0 272.0
Net Operating Cash Flow 3,096.0 1,206.0 1,018.0 937.0 2,019.0
Investing Activities
Capital Expenditures 616.0 488.0 2,529.0 3,603.0 1,365.0
Net Assets from Acquisitions 0.0 0.0 0.0 -73.0 --
Saleof Fixed Assets Businesses 612.0 26.0 187.0 94.0 152.0
Purchase/Sale of Investments -168.0 -243.0 204.0 1,230.0 -858.0
Other Funds -276.0 31.0 46.0 -39.0 315.0
Net Investing Cash Flow -448.0 -674.0 -2,092.0 -2,391.0 -1,756.0
Financing Activities
Change in Capital Stock 8.0 276.0 4.0 69.0 284.0
Issuance/Reduction of Debt,Net -970.0 143.0 -248.0 620.0 -624.0
Other Funds -258.0 -709.0 369.0 1,526.0 984.0
Net Financing Cash Flow -1,220.0 -290.0 125.0 2,215.0 644.0
Miscellaneous Funds 0.0 0.0 0.0 0.0 0.0
Net Change in Cash 1,428.0 242.0 -949.0 761.0 907.0

F
INANCIALS
Five Year Key Annual Ratios
14
5 YrAVG 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06
Valuation
Price/Book Value 1.1x 0.8x 1.3x 0.5x 1.1x 1.6x
Enterprise Value/EBIT 4.9x -- -- -- 144.4x
Enterprise Value/EBITDA 7.1x 2.1x 7.6x 8.7x 8.1x 8.9x
Enterprise Value/Sales 1.7x 0.9x 2.1x 1.3x 2.0x 2.3x
Profitability
Gross Margin 15.2% 32.0% 3.4% -0.9% 19.0% 22.8%
OperatingMargin -4.7% 18.4% -17.4% -20.4% -5.9% 1.6%
Net Margin -8.4% 21.8% -38.2% -27.7% -5.6% 7.7%
Return on Equity -5.2% 29.2% -33.9% -23.2% -4.0% 5.8%
Efficiency
Receivables Turnover 6.0x 7.3x 5.2x 5.8x 5.8x 6.0x
Days of Sales Outstanding 61.2 50.1 69.5 63.3 62.6 60.6
Inventory Turnover 4.2x 4.2x 4.1x 4.2x 3.7x 4.7x
Days of Inventory on Hand 88.1 87.2 89.6 87.4 98.8 77.7
Payables Turnover 7.7x 9.9x 7.7x 7.8x 6.1x 6.8x
Days of Payables Outstanding 48.9 36.9 47.3 46.9 60.3 53.4
Liquidity
Current Ratio 2.43 2.34 1.77 2.36 2.58 3.07
Quick Ratio 1.76 1.69 1.25 1.56 1.83 2.49
Cash Ratio 1.17 1.08 0.78 0.85 1.29 1.85
Credit Analysis
Net Debt/EBITDA 0.2x -0.2x 1.2x 1.7x -0.1x -1.7x
Net Debt/(EBITDA-Capex) -0.2x 2.0x -0.9x 0.0x --
Total Debt/EBITDA 1.7x 0.7x 2.4x 3.2x 1.8x 0.5x
EBITDA/Interest Expense 20.3x 20.0x 9.4x 9.2x 23.8x 39.0x
EBIT/Interest Expense (Int. Coverage) -2.6x 8.8x -6.1x -12.5x -5.8x 2.4x
Fixed-charge Coverage Ratio -2.6x 8.8x -6.1x -12.5x -5.8x 2.4x
Total Debt/Total Equity 36.6% 29.4% 66.6% 45.7% 32.8% 8.6%

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NDUSTRY
COMPARABLES
Key Industry Comparables
16

I
NDUSTRY
COMPARABLES
Capitalization Comparison
17
All values in millions ofU.S. Dollar, except per shareitems. Shares Long
LTM as of 20-Apr-2011 Ticker Price Shares Out Equity Enterprise Total Total Term D /
Company Name 20-Apr-11 Outstndg Diluted Value Value Debt Assets Debt D+E
Micron Technology, Inc. (MU-US) MU 11.39 1,001.5 1,037.3 11,814.8 12,462.8 1,740.0 14,398.0 1,320.0 0.17x
Texas Instruments, Incorporated. (TXN-US) TXN 35.13 1,169.0 1,213.0 42,612.7 37,995.0 0.0 12,474.0 0.0 0.00x
Intel Corp. (INTC-US) INTC 21.41 5,385.2 5,696.0 121,951.4 95,526.2 2,115.0 62,897.0 2,077.0 0.04x
STMicroelectronics NV (STM-FR) STM 12.02 910.4 911.1 10,952.2 10,605.1 1,770.0 13,020.0 1,050.0 0.19x
Infineon Technologies AG (IFX-DE) IFX 10.81 1,086.7 1,167.0 12,610.0 10,008.1 504.4 6,434.1 331.4 0.12x
NXPSemiconductors NV (NXPI-US) NXPI 33.56 250.8 238.7 8,011.9 12,328.2 4,649.0 7,911.0 4,140.0 0.81x
Broadcom Corp. (BRCM-US) BRCM 39.54 485.7 544.6 21,534.0 17,242.6 697.0 7,944.3 697.0 0.11x
Xilinx, Inc. (XLNX-US) XLNX 31.72 261.1 263.6 8,361.8 7,403.3 887.2 3,858.4 887.2 0.29x
Maxim Integrated Products, Inc. (MXIM-US) MXIM 25.59 296.5 303.3 7,760.4 7,088.5 300.0 3,365.7 300.0 0.11x
National Semiconductor Corp. (NSM-US) NSM 24.06 244.8 247.0 5,942.8 6,031.7 1,042.6 1,933.0 1,042.6 0.62x
AlteraCorp. (ALTR-US) ALTR 45.63 322.0 313.9 14,323.8 12,354.8 500.0 3,722.5 500.0 0.18x
AnalogDevices, Inc. (ADI-US) ADI 38.98 299.6 308.8 12,038.9 9,255.2 537.5 4,542.3 523.0 0.14x
nVIDIA Corp. (NVDA-US) NVDA 18.57 595.1 588.7 10,931.9 8,586.0 25.1 4,495.2 23.4 0.01x
Linear Technology Corp. (LLTC-US) LLTC 34.53 226.9 232.2 8,017.9 7,861.5 776.2 1,446.2 776.2 0.74x
Mean 887.2 925.2 21,926.9 18,637.4 1,061.8 10,311.1 949.8 0.26x
Median 322.0 313.9 10,952.2 10,008.1 697.0 4,542.3 697.0 0.14x

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NDUSTRY
COMPARABLES
Valuation Comparison
18
All values in millions of U.S. Dollar, except per shareitems. Price to Price
LTM as of 20-Apr-2011 Ticker Book to
Company Name Sales EBITDA LTM FY1 FY2 Sales EBIT EBITDA Value Sales
Micron Technology, Inc.(MU-US) MU 9,290.0 3,285.0 7.91 18.57 9.22 1.34x 9.9x 3.8x 1.3x 1.27x
Texas Instruments,Incorporated. (TXN-US) TXN 13,966.0 5,316.0 13.21 13.96 12.50 2.72x 8.6x 7.1x 3.9x 3.05x
Intel Corp. (INTC-US) INTC 43,623.0 20,148.0 10.65 9.52 8.89 2.19x 6.2x 4.7x 2.4x 2.80x
STMicroelectronics NV (STM-FR) STM 10,346.0 1,711.0 11.63 12.23 10.90 0.93x 20.4x 5.6x 1.3x 0.93x
Infineon Technologies AG (IFX-DE) IFX 4,444.5 1,173.5 9.76 13.56 12.70 2.07x 13.5x 7.8x 2.9x 2.46x
NXPSemiconductors NV (NXPI-US) NXPI 4,618.6 717.2 (13.08) 14.20 11.10 2.67x 531.8x 17.2x 7.8x 1.82x
Broadcom Corp. (BRCM-US) BRCM 6,818.3 1,291.0 19.87 14.16 12.93 2.53x 14.9x 13.4x 3.7x 3.16x
Xilinx, Inc. (XLNX-US) XLNX 2,310.6 835.9 13.50 13.63 15.31 3.20x 9.5x 8.9x 3.8x 3.62x
Maxim Integrated Products, Inc. (MXIM-US) MXIM 2,313.9 752.5 30.83 15.77 13.98 3.06x 11.9x 9.4x 3.2x -
National Semiconductor Corp.(NSM-US) NSM 1,544.8 647.0 18.94 19.86 19.05 3.90x 10.7x 9.3x 9.0x 3.85x
AlteraCorp. (ALTR-US) ALTR 1,954.4 895.9 18.33 18.42 17.15 6.32x 14.2x 13.8x 6.3x 7.33x
AnalogDevices, Inc. (ADI-US) ADI 2,887.0 1,103.2 14.82 14.05 13.38 3.21x 9.1x 8.4x 3.5x 4.17x
nVIDIA Corp.(NVDA-US) NVDA 3,543.3 579.6 43.19 18.19 14.87 2.42x 21.9x 14.8x 3.4x 3.09x
Linear Technology Corp. (LLTC-US) LLTC 1,449.7 800.3 15.77 14.43 14.48 5.42x 10.4x 9.8x 28.0x -
Mean 7,678.5 2,767.0 16.0 14.8 13.6 3.1 52.6 10.0 6.1 3.3
Median 3,543.3 895.9 14.8 14.2 13.4 2.7 11.9 9.3 3.7 3.1
Price/EPS Enterprise Value /

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NDUSTRY
COMPARABLES
Margin Comparison
19
All values in millions of U.S.Dollar,except per share items.
LTM as of20-Apr-2011 Ticker Gross Margin % EBIT Margin % EBITDA Margin % Net Margin %
Company Name FY-1 FY0 LTM FY-1 FY0 LTM FY-1 FY0 LTM FY-1 FY0 LTM
Micron Technology,Inc. (MU-US) MU - 32.0 27.9 - 18.4 13.50 - 42.1 35.4 - 21.8 16.2
Texas Instruments, Incorporated.(TXN-US) TXN 47.9 53.6 53.6 21.13 31.5 31.53 30.0 38.1 38.1 14.10 23.1 23.1
Intel Corp. (INTC-US) INTC 55.6 65.2 65.2 16.92 35.6 35.55 31.3 46.2 46.2 12.44 26.3 26.3
STMicroelectronics NV (STM-FR) STM 30.9 38.8 38.8 (11.08) 4.6 4.55 5.0 16.5 16.5 (13.29) 8.0 8.0
Infineon Technologies AG (IFX-DE) IFX 21.8 37.5 - (8.23) 12.5 15.29 9.3 24.2 26.4 (7.43) 9.4 15.5
NXP Semiconductors NV (NXPI-US) NXPI 22.4 25.2 53.2 (28.33) (21.3) 0.50 (5.0) 1.2 15.5 (66.14) (4.6) (14.3)
Broadcom Corp.(BRCM-US) BRCM 50.4 51.4 51.4 4.47 16.9 16.92 6.8 18.9 18.9 1.45 15.9 15.9
Xilinx,Inc. (XLNX-US) XLNX 63.0 63.2 65.3 24.74 25.2 33.65 28.7 28.8 36.2 20.58 19.5 27.3
Maxim Integrated Products, Inc.(MXIM-US) MXIM 51.2 60.0 62.0 6.11 14.2 25.85 18.6 22.6 32.5 0.64 6.3 10.9
National Semiconductor Corp. (NSM-US) NSM 62.7 65.9 72.7 22.41 24.3 36.53 30.6 31.0 41.9 5.02 14.7 20.1
Altera Corp. (ALTR-US) ALTR 66.8 71.0 71.0 26.31 44.4 44.43 28.7 45.8 45.8 21.00 40.1 40.1
AnalogDevices, Inc. (ADI-US) ADI 55.8 65.2 67.3 17.36 33.3 35.08 24.3 37.7 38.2 12.28 25.8 28.0
nVIDIA Corp.(NVDA-US) NVDA 35.4 44.9 44.9 (2.97) 11.1 11.08 2.9 16.4 16.4 (2.04) 7.1 7.1
Linear Technology Corp. (LLTC-US) LLTC 75.4 77.0 78.3 42.95 48.2 52.00 47.9 52.0 55.2 29.86 30.9 34.9
Mean 49.2 55.3 60.3 10.1 21.6 26.4 19.9 29.2 32.9 2.2 17.1 18.7
Median 51.2 60.0 63.6 16.9 24.3 31.5 24.3 28.8 36.2 5.0 15.9 20.1

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COMPARABLES
Stock Performance Comparison
20
All values in millions ofU.S. Dollar, except per share items.
LTM as of20-Apr-2011 Ticker
Company Name High Low Beta 1 Week 1 Month 3 Months 6 Months 9 Months 1 Year 2 Years 3 Years 5 Years
Micron Technology, Inc. (MU-US) MU 11.95 6.36 1.75 7.25 13.11 18.65 48.11 34.79 5.95 148.15 53.92 (32.20)
Texas Instruments, Incorporated. (TXN-US) TXN 36.71 22.65 0.94 2.30 5.31 3.60 25.06 41.82 31.82 102.83 18.68 (1.21)
Intel Corp. (INTC-US) INTC 24.25 17.60 0.96 8.24 7.43 2.20 9.01 (1.11) (11.24) 42.73 (5.06) 10.08
STMicroelectronics NV (STM-FR) STM 13.55 6.56 0.83 1.15 (1.19) 2.65 50.85 42.26 13.44 87.86 8.97 (37.39)
Infineon Technologies AG (IFX-DE) IFX 11.40 5.05 1.54 8.15 6.32 9.41 36.78 70.65 49.41 473.92 51.66 5.85
NXPSemiconductors NV (NXPI-US) NXPI 34.80 10.23 2.78 6.40 21.81 54.87 175.08 - - - - -
Broadcom Corp. (BRCM-US) BRCM 47.39 29.05 0.95 3.73 (0.33) (12.13) 6.26 7.10 11.01 81.46 71.39 (13.61)
Xilinx, Inc. (XLNX-US) XLNX 35.42 22.75 0.99 1.73 (0.16) 1.47 21.95 11.49 14.84 54.21 28.79 16.96
Maxim Integrated Products, Inc. (MXIM-US) MXIM 28.44 15.67 1.11 2.90 5.79 (0.04) 33.14 42.80 22.97 83.31 26.20 (31.71)
National Semiconductor Corp. (NSM-US) NSM 24.16 11.84 0.80 0.00 72.84 67.43 85.51 67.20 53.05 106.17 17.08 (19.83)
AlteraCorp. (ALTR-US) ALTR 45.68 21.97 1.27 6.76 14.65 21.16 57.62 61.18 70.58 162.54 112.63 110.86
AnalogDevices, Inc. (ADI-US) ADI 41.66 26.28 0.98 2.99 3.07 0.13 23.59 29.72 26.76 88.49 23.12 (0.26)
nVIDIA Corp. (NVDA-US) NVDA 26.17 8.65 1.39 4.56 5.39 (17.21) 64.48 73.23 8.98 68.05 (2.37) (4.34)
Linear Technology Corp. (LLTC-US) LLTC 36.14 26.25 1.03 6.05 6.38 (1.00) 12.81 9.97 10.07 58.76 3.29 (3.66)
Mean 31.2 17.3 1.2 4.2 11.3 10.2 46.3 38.0 25.1 117.5 29.5 2.6
Median 34.8 17.6 1.0 3.7 5.8 2.2 33.1 42.0 18.9 85.6 20.9 (2.4)
52 Week Price Change %

FINANCIAL STATEMENTS PROJECTIONS ASSUMPTIONS
21

F
INANCIAL
STATEMENTS
PROJECTIONS
ASSUMPTIONS
Income Statement and Cash Flow Statement Assumptions
22
Income Statement Projection Period
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sales (% growth) 8.0% 7.0% 6.0% 5.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Cost of Goods Sold (% sales) 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0%
SGA (% sales) 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Other Expense / (Income) (% of sales) - % - % - % - % - % - % - % - % - % - %
Depreciation Amortization (% sales) 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%
Amortization (% sales) - % - % - % - % - % - % - % - % - % - %
Interest Income 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Cash Flow Statement Projection Period
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Capital Expenditures (% sales) 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Balance Sheet Assumptions
Balance Sheet Projection Period
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Days Sales Outstanding (DSO) 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0
Days Inventory Held (DIH) 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0
Prepaids and Other Current Assets (% sales) 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Days Payable Outstanding (DPO) 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0
Accrued Liabilities (% sales) 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Other Current Liabilities (% sales) 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

T
RANSACTION
ANALYSIS
Fully Diluted Shares and Purchase Price Calculation
24
Public (1) / Private (2) 2
Entry EBITDA Multiple 4.6x
LTM 1/1/2011 EBITDA 3,567.0
Less: Total Debt (1,648.0)
Less: Preferred Securities -
Less: Noncontrolling Interest (1,796.0)
Plus: Cash and Cash Equivalents 2,913.0
Premium Calculation (If Public)
Stock Trading at (If Public) $11.00
Implied Premium Paid (If Public) 39%
Purchase Price
Implied Offer Price per Share $15.31
Stock Trading at (If Public) $11.00
Basic Shares Outstanding 1,037.0
Plus: Shares from In-the-Money Options -
Less: Shares Repurchased -
Net New Shares from Options -
Plus: Shares from Convertible Securities -
Fully Diluted Shares Outstanding 1,037.000
Number of Exercise In-the-Money
Tranche Shares Price Shares Proceeds
Tranche 1 - - - -
Tranche 2 - - - -
Tranche 3 - - - -
Tranche 4 - - - -
Tranche 5 - - - -
Total - - -
Conversion Conversion New
Amount Price Ratio Shares
Issue 1 - - - -
Issue 2 - - - -
Issue 3 - - - -
Issue 4 - - - -
Issue 5 - - - -
Total -
Options/Warrants
Calculation of Fully Diluted Shares Outstanding
Convertible Securities

T
RANSACTION
ANALYSIS
Sources and Uses of Funds
25
% of Total
Equity % Amount Sources 1/1/2011 Cumulative Pricing
Revolving Credit - - % - x - x L+325 bps
Term Loan A 6,000.0 30.3% 1.7x 1.7x L+300 bps
Term Loan B 2,000.0 10.1% 0.6x 2.2x L+350 bps
Term Loan C - - % - x 2.2x L+350 bps
2nd Lien - - % - x 2.2x L+350 bps
Senior Notes 1,000.0 5.0% 0.3x 2.5x 3.000%
Senior Subordinated Notes - - % - x 2.5x 10.000%
Sponsor Equity 100% 7,904.5 39.9% 2.2x 4.7x
Rollover Equity 0% - - % - x 4.7x
Management Equity 0% - - % - x 4.7x
Cash on Hand 2,913.0 14.7% 0.8x 5.6x
Total Sources $19,817.5 100.0% 5.6x 5.6x
Multiple of EBITDA
Sources of Funds
% of Total
Amount Uses
Purchase Target Equity $15,877.2 80.1%
Repay Existing Debt 1,648.0 8.3%
Noncontrolling Interest 1,796.0 9.1%
Financing Fees 177.8 0.9%
Investment Banking Fees 158.8 0.8%
Legal Fees 158.8 0.8%
Other Fees and Expenses 1.0 0.0%
Miscellaneous Expenses 1 - - %
Miscellaneous Expenses 2 - - %
Total Uses $19,817.5 100.0%
Uses of Funds
Offer Price per Share $15.31
Fully Diluted Shares 1,037.0
Plus: Existing Net Debt 531.0
Purchase Price
Exit Year 2016
Entry Multiple 4.6x
Exit Multiple 4.6x
IRR 28.4%
Cash Return 3.5x
Return

T
RANSACTION
ANALYSIS
Financing Fees Amortization
26
Structure 3 Size (%) ($)
Revolving Credit Size $300.0 1.750% $5.3
Term Loan A 6,000.0 1.750% 105.0
Term Loan B 2,000.0 1.750% 35.0
Term Loan C - - -
2nd Lien - - -
Senior Notes 1,000.0 2.250% 22.5
Senior Subordinated Notes - 2.250% -
Senior Bridge Facility 1,000.0 1.000% 10.0
Senior Subordinated Bridge Facility - 1.000% -
Other Financing Fees Expenses -
Total Financing Fees $177.8
Financing Fees
Fees
Term 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revolving Credit Size 6 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 - - - -
Term Loan A 5 21.0 21.0 21.0 21.0 21.0 - - - - -
Term Loan B 7 5.0 5.0 5.0 5.0 5.0 5.0 5.0 - - -
Term Loan C 7 - - - - - - - - - -
2nd Lien - - - - - - - - - - -
Senior Notes 10 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3
Senior Subordinated Notes 10 - - - - - - - - - -
Senior Bridge Facility 10 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Senior Subordinated Bridge Facility 10 - - - - - - - - - -
Other Financing Fees Expenses 10 - - - - - - - - - -
Annual Amortization $30.1 $30.1 $30.1 $30.1 $30.1 $9.1 $8.3 $3.3 $3.3 $3.3
Administrative Agent Fee 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Amortization of Financing Fees

T
RANSACTION
ANALYSIS
Income Statement Projection
27
$ in Millions
Historical Period Projection Period
LTM Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2008 2009 2010 1/1/2011 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sales $5,841.0 $4,803.0 $8,482.0 $8,482.0 $8,500.0 $9,180.0 $9,822.6 $10,412.0 $10,932.6 $11,260.5 $11,598.3 $11,946.3 $12,304.7 $12,673.8 $13,054.0
% growth NA (17.8%) 76.6% NA 0.2% 8.0% 7.0% 6.0% 5.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Cost of Goods Sold 3,836.0 2,500.0 3,763.0 3,763.0 3,825.0 4,131.0 4,420.2 4,685.4 4,919.6 5,067.2 5,219.3 5,375.8 5,537.1 5,703.2 5,874.3
Gross Profit $2,005.0 $2,303.0 $4,719.0 $4,719.0 $4,675.0 $5,049.0 $5,402.4 $5,726.6 $6,012.9 $6,193.3 $6,379.1 $6,570.5 $6,767.6 $6,970.6 $7,179.7
% margin 34.3% 47.9% 55.6% 55.6% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0%
Selling, General Administrative 1,135.0 1,001.0 1,152.0 1,152.0 1,190.0 1,377.0 1,473.4 1,561.8 1,639.9 1,689.1 1,739.8 1,791.9 1,845.7 1,901.1 1,958.1
% sales 19.4% 20.8% 13.6% 13.6% 14.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Other Expense / (Income) - - - - - - - - - - - - - - -
EBITDA $870.0 $1,302.0 $3,567.0 $3,567.0 $3,485.0 $3,672.0 $3,929.0 $4,164.8 $4,373.0 $4,504.2 $4,639.3 $4,778.5 $4,921.9 $5,069.5 $5,221.6
% margin 14.9% 27.1% 42.1% 42.1% 41.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
Depreciation Amortization 2,060.0 2,139.0 2,005.0 2,005.0 2,550.0 2,754.0 2,946.8 3,123.6 3,279.8 3,378.2 3,479.5 3,583.9 3,691.4 3,802.1 3,916.2
Amortization - - - - - - - - - - - - - - -
EBIT ($1,190.0) ($837.0) $1,562.0 $1,562.0 $935.0 $918.0 $982.3 $1,041.2 $1,093.3 $1,126.1 $1,159.8 $1,194.6 $1,230.5 $1,267.4 $1,305.4
% margin (20.4%) (17.4%) 18.4% 18.4% 11.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Interest Expense
Revolving Credit Facility - - - - - - - - - - -
Term Loan A 360.0 268.1 91.9 1.7 - - - - - - -
Term Loan B 130.0 129.4 131.0 66.6 - - - - - - -
Term Loan C - - - - - - - - - - -
Existing Term Loan - - - - - - - - - - -
2nd Lien - - - - - - - - - - -
Senior Notes 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
Senior Subordinated Notes - - - - - - - - - - -
Commitment Fee on Unused Revolver 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5
Administrative Agent Fee 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Cash Interest Expense $521.7 $429.1 $254.6 $100.0 $31.7 $31.7 $31.7 $31.7 $31.7 $31.7 $31.7
Amortization of Deferred Financing Fees 30.1 30.1 30.1 30.1 30.1 30.1 9.1 8.3 3.3 3.3 3.3
Total Interest Expense $551.8 $459.2 $284.7 $130.1 $61.8 $61.8 $40.8 $39.9 $34.9 $34.9 $34.9
Interest Income - - (5.9) (28.8) (63.5) (99.4) (136.6) (175.2) (215.1) (256.4)
Net Interest Expense $459.2 $284.7 $124.2 $33.0 ($1.7) ($58.6) ($96.7) ($140.3) ($180.2) ($221.5)
Earnings Before Taxes 458.8 697.6 916.9 1,060.2 1,127.7 1,218.5 1,291.4 1,370.7 1,447.5 1,526.9
Income Tax Expense 174.4 265.1 348.4 402.9 428.5 463.0 490.7 520.9 550.1 580.2
Net Income $284.5 $432.5 $568.5 $657.3 $699.2 $755.5 $800.6 $849.9 $897.5 $946.7
% margin 3.1% 4.4% 5.5% 6.0% 6.2% 6.5% 6.7% 6.9% 7.1% 7.3%
Income Statement Assumptions 2008 2009 2010 1/1/2011 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sales (% YoY growth) NA (17.8%) 76.6% NA 0.2% 8.0% 7.0% 6.0% 5.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Cost of Goods Sold (% margin) 65.7% 52.1% 44.4% 44.4% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0%
SGA (% sales) 19.4% 20.8% 13.6% 13.6% 14.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Other Expense / (Income) (% of sales) - % - % - % - % - % - % - % - % - % - % - % - % - % - % - %
Depreciation Amortization (% of sales) 35.3% 44.5% 23.6% 23.6% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%
Amortization (% of sales) - % - % - % - % - % - % - % - % - % - % - % - % - % - % - %
Interest Income 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Tax Rate 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0%
Income Statement

T
RANSACTION
ANALYSIS
Balance Sheet Projection and Adjustments
28
$ in Millions
Projection Period
Opening Pro Forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2011 (+) (-) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Cash and Cash Equivalents $2,913.0 (2,913.0) - - - $1,172.2 $4,579.1 $8,114.8 $11,770.1 $15,556.4 $19,476.2 $23,535.6 $27,738.9
Accounts Receivable 1,531.0 1,531.0 1,534.2 1,641.6 1,740.1 1,827.1 1,881.9 1,938.4 1,996.5 2,056.4 2,118.1 2,181.6
Inventories 1,770.0 1,770.0 996.0 1,065.7 1,129.6 1,186.1 1,221.7 1,258.3 1,296.1 1,335.0 1,375.0 1,416.3
Prepaids and Other Current Assets 119.0 119.0 91.8 98.2 104.1 109.3 112.6 116.0 119.5 123.0 126.7 130.5
Total Current Assets $6,333.0 $3,420.0 $2,622.0 $2,805.5 $4,146.0 $7,701.6 $11,331.0 $15,082.8 $18,968.4 $22,990.6 $27,155.4 $31,467.4
Property, Plant and Equipment, net 6,601.0 6,601.0 4,306.0 1,850.4 (752.6) (3,485.8) (6,300.9) (9,200.5) (12,187.1) (15,263.2) (18,431.7) (21,695.2)
Goodwill and Intangible Assets 323.0 7,857.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2 8,180.2
Other Assets 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0 1,291.0
Deferred Financing Fees - 177.8 177.8 147.6 117.5 87.4 57.3 27.1 18.0 9.8 6.5 3.3 (0.0)
Total Assets $14,548.0 $19,670.0 $16,546.8 $14,244.5 $12,952.0 $13,744.2 $14,528.5 $15,371.5 $16,262.3 $17,205.0 $18,198.2 $19,243.4
Accounts Payable 799.0 799.0 543.3 581.3 616.2 647.0 666.4 686.4 707.0 728.2 750.0 772.5
Accrued Liabilities 346.0 346.0 367.2 392.9 416.5 437.3 450.4 463.9 477.9 492.2 507.0 522.2
Other Current Liabilities 1,557.0 1,557.0 1,468.8 1,571.6 1,665.9 1,749.2 1,801.7 1,855.7 1,911.4 1,968.7 2,027.8 2,088.6
Total Current Liabilities $2,702.0 $2,702.0 $2,379.3 $2,545.8 $2,698.6 $2,833.5 $2,918.5 $3,006.0 $3,096.2 $3,189.1 $3,284.8 $3,383.3
Revolving Credit Facility - - - - - - - - - - - - -
Term Loan A - 6,000.0 6,000.0 2,935.1 53.8 - - - - - - - -
Term Loan B - 2,000.0 2,000.0 1,980.0 1,960.0 - - - - - - - -
Term Loan C - - - - - - - - - - - - -
Existing Term Loan 1,648.0 (1,648.0) - - - - - - - - - - -
2nd Lien - - - - - - - - - - - - -
Senior Notes - 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0
Senior Subordinated Notes - - - - - - - - - - - - -
Other Debt (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0)
Other Long-Term Liabilities 511.0 511.0 511.0 511.0 511.0 511.0 511.0 511.0 511.0 511.0 511.0 511.0
Total Liabilities $4,732.0 $12,084.0 $8,676.4 $5,941.6 $4,080.6 $4,215.5 $4,300.5 $4,388.0 $4,478.2 $4,571.1 $4,666.8 $4,765.3
Noncontrolling Interest 1,796.0 (1,796.0) - - - - - - - - - - -
All Shareholders' Equity 8,020.0 7,586.0 (8,020.0) 7,586.0 7,870.4 8,302.9 8,871.4 9,528.8 10,228.0 10,983.4 11,784.1 12,633.9 13,531.4 14,478.1
Total Shareholders' Equity $9,816.0 $7,586.0 $7,870.4 $8,302.9 $8,871.4 $9,528.8 $10,228.0 $10,983.4 $11,784.1 $12,633.9 $13,531.4 $14,478.1
Total Liabilities and Equity $14,548.0 $19,670.0 $16,546.8 $14,244.5 $12,952.0 $13,744.2 $14,528.5 $15,371.5 $16,262.3 $17,205.0 $18,198.2 $19,243.4
Balance Check 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Net Working Capital 718.0 718.0 242.7 259.7 275.3 289.0 297.7 306.6 315.8 325.3 335.1 345.1
(Increase) / Decrease in Net Working Capital 475.3 (17.0) (15.6) (13.8) (8.7) (8.9) (9.2) (9.5) (9.8) (10.1)
Opening Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Balance Sheet Assumptions 2011 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Days Sales Outstanding (DSO) 65.7 65.7 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0 61.0
Days Inventory Held (DIH) 168.9 168.9 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0
Prepaid and Other Current Assets (% of sales) 1.4% 1.4% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Days Payable Outstanding (DPO) 76.2 76.2 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0 48.0
Accrued Liabilities (% of sales) 4.1% 4.1% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Other Current Liabilities (% of sales) 18.3% 18.3% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%
Balance Sheet
Current Assets
Current Liabilities
Adjustments

T
RANSACTION
ANALYSIS
Cash Flow Statement Projections
29
$ in Millions
Projection Period
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Operating Activities
Net Income $284.5 $432.5 $568.5 $657.3 $699.2 $755.5 $800.6 $849.9 $897.5 $946.7
Plus: Depreciation Amortization 2,754.0 2,946.8 3,123.6 3,279.8 3,378.2 3,479.5 3,583.9 3,691.4 3,802.1 3,916.2
Plus: Amortization - - - - - - - - - -
Plus: Amortization of Financing Fees 30.1 30.1 30.1 30.1 30.1 9.1 8.3 3.3 3.3 3.3
Changes in Working Capital Items
(Inc.) / Dec. in Accounts Receivable (3.2) (107.4) (98.5) (87.0) (54.8) (56.5) (58.2) (59.9) (61.7) (63.5)
(Inc.) / Dec. in Inventories 774.0 (69.7) (63.9) (56.5) (35.6) (36.7) (37.8) (38.9) (40.0) (41.3)
(Inc.) / Dec. in Prepaid and Other Current Assets 27.2 (6.4) (5.9) (5.2) (3.3) (3.4) (3.5) (3.6) (3.7) (3.8)
Inc. / (Dec.) in Accounts Payable (255.7) 38.0 34.9 30.8 19.4 20.0 20.6 21.2 21.8 22.5
Inc. / (Dec.) in Accrued Liabilities 21.2 25.7 23.6 20.8 13.1 13.5 13.9 14.3 14.8 15.2
Inc. / (Dec.) in Other Current Liabilities (88.2) 102.8 94.3 83.3 52.5 54.1 55.7 57.3 59.1 60.8
(Inc.) / Dec. in Net Working Capital 475.3 (17.0) (15.6) (13.8) (8.7) (8.9) (9.2) (9.5) (9.8) (10.1)
Cash Flow from Operating Activities $3,543.9 $3,392.4 $3,706.6 $3,953.5 $4,098.8 $4,235.2 $4,383.6 $4,535.0 $4,693.1 $4,856.1
Investing Activities
Capital Expenditures (459.0) (491.1) (520.6) (546.6) (563.0) (579.9) (597.3) (615.2) (633.7) (652.7)
Other Investing Activities - - - - - - - - - -
Cash Flow from Investing Activities ($459.0) ($491.1) ($520.6) ($546.6) ($563.0) ($579.9) ($597.3) ($615.2) ($633.7) ($652.7)
Financing Activities
Revolving Credit Facility - - - - - - - - - -
Term Loan A (3,064.9) (2,881.3) (53.8) - - - - - - -
Term Loan B (20.0) (20.0) (1,960.0) - - - - - - -
Term Loan C - - - - - - - - - -
Existing Term Loan - - - - - - - - - -
2nd Lien - - - - - - - - - -
Senior Notes - - - - - - - - - -
Senior Subordinated Notes - - - - - - - - - -
Other Debt - - - - - - - - - -
Dividends - - - - - - - - - -
Equity Issuance / (Repurchase) - - - - - - - - - -
Cash Flow from Financing Activities ($3,084.9) ($2,901.3) ($2,013.8) - - - - - - -
Excess Cash for the Period - - $1,172.2 $3,406.8 $3,535.8 $3,655.2 $3,786.3 $3,919.8 $4,059.4 $4,203.4
Beginning Cash Balance - - - 1,172.2 4,579.1 8,114.8 11,770.1 15,556.4 19,476.2 23,535.6
Ending Cash Balance - - $1,172.2 $4,579.1 $8,114.8 $11,770.1 $15,556.4 $19,476.2 $23,535.6 $27,738.9
Cash Flow Statement Assumptions 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Capital Expenditures (% of sales) 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Cash Flow Statement

T
RANSACTION
ANALYSIS
Debt Schedule
30
$ in Millions
Projection Period
Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Forward LIBOR Curve 3.00% 3.00% 3.15% 3.30% 3.60% 4.00% 4.35% 4.80% 4.85% 5.10% 5.25%
Cash Flow from Operating Activities $3,543.9 $3,392.4 $3,706.6 $3,953.5 $4,098.8 $4,235.2 $4,383.6 $4,535.0 $4,693.1 $4,856.1
Cash Flow from Investing Activities (459.0) (491.1) (520.6) (546.6) (563.0) (579.9) (597.3) (615.2) (633.7) (652.7)
Cash Available for Debt Repayment $3,084.9 $2,901.3 $3,186.0 $3,406.8 $3,535.8 $3,655.2 $3,786.3 $3,919.8 $4,059.4 $4,203.4
Total Mandatory Repayments MinCash (20.0) (20.0) (20.0) - - - - - - -
Cash From Balance Sheet - - - - 1,172.2 4,579.1 8,114.8 11,770.1 15,556.4 19,476.2 23,535.6
Cash Available for Optional Debt Repayment $3,064.9 $2,881.3 $3,166.0 $4,579.1 $8,114.8 $11,770.1 $15,556.4 $19,476.2 $23,535.6 $27,738.9
Debt Schedule
Term Loan A
Size $6,000.0
Spread 3.000%
Term 5 years
Repayment Schedule - % - % - % - % - % 100.0%
Beginning Balance $6,000.0 $2,935.1 $53.8 - - - - - - -
Mandatory Repayments - - - - - - - - - -
Optional Repayments (3,064.9) (2,881.3) (53.8) - - - - - - -
Ending Balance $2,935.1 $53.8 - - - - - - - -
Interest Rate 6.00% 6.15% 6.30% 6.60% 7.00% 7.35% 7.80% 7.85% 8.10% 8.25%
Interest Expense 268.1 91.9 1.7 - - - - - - -
Term Loan B
Size $2,000.0
Spread 3.500%
Term 7 years
Repayment Schedule 1.0% Per Annum, Bullet at Maturity
Beginning Balance $2,000.0 $1,980.0 $1,960.0 - - - - - - -
Mandatory Repayments (20.0) (20.0) (20.0) - - - - - - -
Optional Repayments - - (1,940.0) - - - - - - -
Ending Balance $1,980.0 $1,960.0 - - - - - - - -
Interest Rate 6.50% 6.65% 6.80% 7.10% 7.50% 7.85% 8.30% 8.35% 8.60% 8.75%
Interest Expense 129.4 131.0 66.6 - - - - - - -
Senior Notes
Size $1,000.0
Coupon 3.000%
Term 10 years
Beginning Balance $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0
Repayment - - - - - - - - - -
Ending Balance $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0 $1,000.0
Interest Expense 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0

T
RANSACTION
ANALYSIS
Free Cash Flow , Capitalization and Credit Statistics Summary
31
Projection Period
2008 2009 2010 1/1/2011 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sales $5,841.0 $4,803.0 $8,482.0 $8,482.0 $8,500.0 $9,180.0 $9,822.6 $10,412.0 $10,932.6 $11,260.5 $11,598.3 $11,946.3 $12,304.7 $12,673.8 $13,054.0
% growth NA (17.8%) 76.6% NA 0.2% 8.0% 7.0% 6.0% 5.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Gross Profit $2,005.0 $2,303.0 $4,719.0 $4,719.0 $4,675.0 $5,049.0 $5,402.4 $5,726.6 $6,012.9 $6,193.3 $6,379.1 $6,570.5 $6,767.6 $6,970.6 $7,179.7
% margin 34.3% 47.9% 55.6% 55.6% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0%
EBITDA $870.0 $1,302.0 $3,567.0 $3,567.0 $3,485.0 $3,672.0 $3,929.0 $4,164.8 $4,373.0 $4,504.2 $4,639.3 $4,778.5 $4,921.9 $5,069.5 $5,221.6
% margin 14.9% 27.1% 42.1% 42.1% 41.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
Capital Expenditures 2,529.0 488.0 616.0 616.0 616.0 459.0 491.1 520.6 546.6 563.0 579.9 597.3 615.2 633.7 652.7
% sales 43.3% 10.2% 7.3% 7.3% 7.2% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Cash Interest Expense 521.7 429.1 254.6 100.0 31.7 31.7 31.7 31.7 31.7 31.7 31.7
Total Interest Expense 551.8 459.2 284.7 130.1 61.8 61.8 40.8 39.9 34.9 34.9 34.9
Free Cash Flow
EBITDA $3,672.0 $3,929.0 $4,164.8 $4,373.0 $4,504.2 $4,639.3 $4,778.5 $4,921.9 $5,069.5 $5,221.6
Less: Cash Interest Expense (429.1) (254.6) (100.0) (31.7) (31.7) (31.7) (31.7) (31.7) (31.7) (31.7)
Plus: Interest Income - - 5.9 28.8 63.5 99.4 136.6 175.2 215.1 256.4
Less: Income Taxes (174.4) (265.1) (348.4) (402.9) (428.5) (463.0) (490.7) (520.9) (550.1) (580.2)
Less: Capital Expenditures (459.0) (491.1) (520.6) (546.6) (563.0) (579.9) (597.3) (615.2) (633.7) (652.7)
Less: Increase in Net Working Capital 475.3 (17.0) (15.6) (13.8) (8.7) (8.9) (9.2) (9.5) (9.8) (10.1)
Free Cash Flow $3,084.9 $2,901.3 $3,186.0 $3,406.8 $3,535.8 $3,655.2 $3,786.3 $3,919.8 $4,059.4 $4,203.4
Cumulative Free Cash Flow 3,084.9 5,986.2 9,172.2 12,579.1 16,114.8 19,770.1 23,556.4 27,476.2 31,535.6 35,738.9
Cash - - - $1,172.2 $4,579.1 $8,114.8 $11,770.1 $15,556.4 $19,476.2 $23,535.6 $27,738.9
Revolving Credit Facility - - - - - - - - - - -
Term Loan A 6,000.0 2,935.1 53.8 - - - - - - - -
Term Loan B 2,000.0 1,980.0 1,960.0 - - - - - - - -
Term Loan C - - - - - - - - - - -
Existing Term Loan - - - - - - - - - - -
2nd Lien - - - - - - - - - - -
Other Debt (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0)
Total Senior Secured Debt $7,871.0 $4,786.1 $1,884.8 ($129.0) ($129.0) ($129.0) ($129.0) ($129.0) ($129.0) ($129.0) ($129.0)
Senior Notes 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0
Total Senior Debt $8,871.0 $5,786.1 $2,884.8 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0
Senior Subordinated Notes - - - - - - - - - - -
Total Debt $8,871.0 $5,786.1 $2,884.8 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0
Shareholders' Equity 7,586.0 7,870.4 8,302.9 8,871.4 9,528.8 10,228.0 10,983.4 11,784.1 12,633.9 13,531.4 14,478.1
Total Capitalization $16,457.0 $13,656.5 $11,187.7 $9,742.4 $10,399.8 $11,099.0 $11,854.4 $12,655.1 $13,504.9 $14,402.4 $15,349.1
% of Bank Debt Repaid - 38.6% 74.8% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
% Debt / Total Capitalization 53.9% 42.4% 25.8% 8.9% 8.4% 7.8% 7.3% 6.9% 6.4% 6.0% 5.7%
EBITDA / Cash Interest Expense 6.7x 8.6x 15.4x 41.7x 138.2x 142.3x 146.6x 151.0x 155.5x 160.2x 165.0x
(EBITDA - Capex) / Cash Interest Expense 5.5x 7.5x 13.5x 36.4x 120.9x 124.5x 128.3x 132.1x 136.1x 140.2x 144.4x
EBITDA / Total Interest Expense 6.3x 8.0x 13.8x 32.0x 70.8x 72.9x 113.8x 119.8x 141.0x 145.3x 149.6x
(EBITDA - Capex) / Total Interest Expense 5.2x 7.0x 12.1x 28.0x 61.9x 63.8x 99.6x 104.8x 123.4x 127.1x 130.9x
Senior Secured Debt / EBITDA 2.3x 1.3x 0.5x (0.0x) (0.0x) (0.0x) (0.0x) (0.0x) (0.0x) (0.0x) (0.0x)
Senior Debt / EBITDA 2.5x 1.6x 0.7x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x
Total Debt / EBITDA 2.5x 1.6x 0.7x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x
Net Debt / EBITDA 2.5x 1.6x 0.7x (0.1x) (0.8x) (1.6x) (2.3x) (3.1x) (3.8x) (4.5x) (5.1x)
Historical Period
Capitalization
Credit Statistics
Free Cash Flow

R
ETURN
ANALYSIS
Return Analysis
33
$ in Millions
Initial Sponsor Equity $7,904.5 100%
Initial Rollover Equity - 0%
Initial Management Equity - 0%
Total Initial Equity $7,904.5 100%
Projection Period
Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Entry EBITDA Multiple 4.6x
EBITDA $3,672.0 $3,929.0 $4,164.8 $4,373.0 $4,504.2 $4,639.3 $4,778.5 $4,921.9 $5,069.5 $5,221.6
Exit EBITDA Multiple 4.6x
Enterprise Value at Exit $16,891.2 $18,073.6 $19,158.0 $20,115.9 $20,719.4 $21,341.0 $21,981.2 $22,640.6 $23,319.8 $24,019.4
Less: Net Debt
Revolving Credit - - - - - - - - - -
Term Loan A 2,935.1 53.8 - - - - - - - -
Term Loan B 1,980.0 1,960.0 - - - - - - - -
Term Loan C - - - - - - - - - -
Existing Term Loan - - - - - - - - - -
2nd Lien - - - - - - - - - -
Senior Notes 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0
Senior Subordinated Notes - - - - - - - - - -
Other Debt (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0) (129.0)
Total Debt $5,786.1 $2,884.8 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0 $871.0
Less: Cash and Cash Equivalents - - 1,172.2 4,579.1 8,114.8 11,770.1 15,556.4 19,476.2 23,535.6 27,738.9
Net Debt $5,786.1 $2,884.8 ($301.2) ($3,708.1) ($7,243.8) ($10,899.1) ($14,685.4) ($18,605.2) ($22,664.6) ($26,867.9)
Less: Fees and Expenses
Investment Banking Fees (1% of Transcation Value) 168.9 180.7 191.6 201.2 207.2 213.4 219.8 226.4 233.2 240.2
Legal Fees (1% of Transaction Value) 168.9 180.7 191.6 201.2 207.2 213.4 219.8 226.4 233.2 240.2
Other Fees and Expenses ($1MM) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Toal Fees and Expenses 338.8 362.5 384.2 403.3 415.4 427.8 440.6 453.8 467.4 481.4
All Equity Value at Exit $10,766.3 $14,826.3 $19,075.0 $23,420.6 $27,547.8 $31,812.2 $36,225.9 $40,792.0 $45,517.0 $50,406.0
Cash Return 1.4x 1.9x 2.4x 3.0x 3.5x 4.0x 4.6x 5.2x 5.8x 6.4x
Sponsor IRR Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Sponsor Equity % 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Initial Equity Investment ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5) ($7,904.5)
Equity Proceeds $10,766.3 - - - - - - - - -
$14,826.3 - - - - - - - -
$19,075.0 - - - - - - -
$23,420.6 - - - - - -
$27,547.8 - - - - -
$31,812.2 - - - -
$36,225.9 - - -
$40,792.0 - -
$45,517.0 -
$50,406.0
IRR 36.2% 37.0% 34.1% 31.2% 28.4% 26.1% 24.3% 22.8% 21.5% 20.4%
Returns Analysis

R
ETURN
ANALYSIS
IRR Sensitivity Analysis w.r.t Entry Multiple and Exit Multiple Assuming Exit in 2016
34
IRR Sensitivity Analysis w.r.t Exit Multiple and Exit Year Assuming 4.6x Entry Multiple
IRR - Assuming Exit in 2016E
Exit Multiple
28.4% 3.6x 4.1x 4.6x 5.1x 5.6x
3.1x 56.7% 59.6% 62.3% 64.8% 67.2%
3.6x 40.2% 42.8% 45.2% 47.5% 49.6%
Entry 4.1x 30.6% 33.0% 35.3% 37.4% 39.3%
Multiple 4.6x 24.0% 26.2% 28.4% 30.4% 32.2%
5.1x 18.9% 21.1% 23.2% 25.1% 26.9%
5.6x 14.9% 17.0% 19.0% 20.9% 22.6%
IRR - Assuming 4.6x Entry Multiple
Exit Year
2016 2017 2018 2019 2020
28.4% 26.1% 24.3% 22.8% 21.5%
3.6x 24.0% 22.9% 21.9% 20.9% 19.9%
Exit 4.1x 26.2% 24.6% 23.1% 21.8% 20.7%
Multiple 4.6x 28.4% 26.1% 24.3% 22.8% 21.5%
5.1x 30.4% 27.6% 25.4% 23.7% 22.2%
5.6x 32.2% 29.0% 26.5% 24.5% 22.9%

R
ETURN
ANALYSIS
Alternative Financing Structures and Corresponding IRRs
24.0%
35
5 Year IRR 25.5% 27.3% 28.4% 26.4%
Structure
1 2 3 4 5
Base Structure 1 Structure 2 Structure 3 Structure 4
Revolving Credit Size $300.0 $300.0 $300.0 $300.0 $300.0
Revolving Credit Draw - - - - -
Term Loan A 5,000.0 5,000.0 6,000.0 6,000.0 5,000.0
Term Loan B 1,000.0 2,000.0 2,000.0 2,000.0 2,000.0
Term Loan C - - - - -
2nd Lien - - - - -
Senior Notes 500.0 500.0 500.0 1,000.0 1,000.0
Senior Subordinated Notes - - - - -
Sponsor Equity 100% 10,404.5 9,404.5 8,404.5 7,904.5 8,904.5
Rollover Equity 0% - - - - -
Management Equity 0% - - - - -
Cash on Hand 2,913.0 2,913.0 2,913.0 2,913.0 2,913.0
Other Source - - - - -
Total Sources of Funds $19,817.5 $19,817.5 $19,817.5 $19,817.5 $19,817.5
Target Equity Purchase Price $15,877.2 $15,877.2 $15,877.2 $15,877.2 $15,877.2
Repay Existing Bank Debt 1,648.0 1,648.0 1,648.0 1,648.0 1,648.0
Noncontrolling Interest 1,796.0 1,796.0 1,796.0 1,796.0 1,796.0
Financing Fees 177.8 177.8 177.8 177.8 177.8
Investment Banking Fees 158.8 158.8 158.8 158.8 158.8
Legal Fees 158.8 158.8 158.8 158.8 158.8
Other Fees and Expenses 1.0 1.0 1.0 1.0 1.0
Miscellaneous Expenses 1 - - - - -
Miscellaneous Expenses 2 - - - - -
Total Uses of Funds $19,817.5 $19,817.5 $19,817.5 $19,817.5 $19,817.5
Sources of Funds
Uses of Funds
Financing Structures

E
XIT
STRATEGIES
Potential Strategic Buyers
37
Company Business Description Acquisition Rationale
•World's second-largest memory
semiconductor supplier of
dynamic random access memory
('DRAM') chips and flash memory
chips
•Will increase its scale that is
crucial to profitability
• Will give access to US market
•Largest manufacturer of memory
chips
•Will reduce industry overcapacity
and give better pricing power
•Will access Micron’s technology
know how in fast memory chips
for video game applications
•Best known for its processors,
although it also designs, licenses
and sells software development
tools
• Will get better competitive
advantage by combining its low
priced processors and memory
chips for system solutions
•Gain access to a wider and fast
growing market

E
XIT
STRATEGIES
Potential Financial Buyers
38
Private Equity Firm Industry Focus Comments
•Consumer Retail
•Media and telecommunications
•Industrials
•Technology
•Travel/leisure
•Health care
•Investment in On Semiconductor
Inc
• Invested to carve out Conexant
from Rockwell Automation
•Chemicals
•Consumer products
•Energy natural resources
•Financial services
•Health care
•Industrial
•Media and communications
•Technology
•Purchased Agilent Technologies
for $2.7 billion
•Sold two chip business lines for a
combined price of $665 million.
•Digital Media
•Telecom
•Social Commerce
•Software
•Semiconductor
•Clean Technology
•Social Network and Gaming
• Leader in private investments in
technology and technology-
enabled industries
•Among its most notable
investments are Avaya, Sabre
Holdings, UGS Corp., Skype,
Seagate Technology

39
Prepared
by
Deb Sahoo
MBA, Ross School of Business
University of Michigan, Ann Arbor

02. lbo of micron technologies (deb sahoo)

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