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
INDUSTRY NEWS
Industry Buzz
Company Overview
LBO Rationale
Financials
10
Industry Comparables
11
Financial Statements Projections Assumptions
21
Transaction Analysis
23
Return Analysis
32
Exit Strategies
36
TABLE OF CONTENTS
Executive Summary
EXECUTIVE SUMMARY
Price Performance
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
Key Financials
Purchase Price
Offer Price per Share
$15.31
Fully Diluted Shares
1,037.0
Equity Purchase Price

Plus: Existing Net Debt
Enterprise Value
$15,877.2
531.0
$16,408.2
Return
Exit Year
Entry Multiple
Exit Multiple
IRR
Cash Return
5
Stock Price: $11.52

52 Week High: $11.95
52 Week Low: $6.36
Stock Beta: 1.75
2016
4.6x
4.6x
28.4%
3.5x
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+
EXECUTIVE SUMMARY
Target Overview
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
Products and Services

DRAM
SDRAM
DDR SDRAM
DDR2 SDRAM
DDR3 SDRAM
RLDRAM Memory
Mobile LPDRAM
Operations in Europe, Asia Pacific and the US

Brands: Micron, Numonyx, Lexar, Crucial
Industry Comparables
Customers
COMPANY OVERVIEW
Company Overview
LBO RATIONALE
Strong Financials
Strong management team

Potential for expense reduction
Growth potential in emerging markets
Potential to enter new market segment with
partnership with leading industry players
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
Industry Positioning
Viable Exit Strategy
Strong defensible market position

Product differentiation through R&D
Economy of Scale and Scope
Known brand name with key customers
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
LBO RATIONALE
Value Creation
FINANCIALS
10
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
8,482.0
4,803.0
5,841.0
5,688.0
5,272.0
5,768.0
4,639.0
5,896.0
4,610.0
4,072.0
COGS excluding D&A
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
SG&A Expense
1,152.0
1,001.0
1,135.0
1,415.0
1,116.0
0.0
0.0
0.0
0.0
0.0
1,562.0
-837.0
-1,190.0
-337.0
84.0
89.0
-101.0
157.0
228.0
374.0
178.0
135.0
82.0
40.0
25.0
-447.0
731.0
496.0
19.0
0.0
1,920.0
-1,804.0
-1,611.0
-168.0
433.0
Income Taxes
-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
1,850.0
-1,835.0
-1,619.0
-320.0
408.0
Sales/Revenue
Cost of Goods Sold (COGS) incl. D&A
Other Operating Expense

EBIT (Operating Income)
Nonoperating Income (Expense) - Net
Interest Expense
Unusual Expense (Income) - Net
Pretax Income
Net Income
11
FINANCIALS
Five Year Income Statement
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
119.0
74.0
94.0
92.0
103.0
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
Intangible Assets
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
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
51.0
32.0
27.0
15.0
20.0
1,140.0
910.0
601.0
598.0
498.0
2,702.0
1,892.0
1,598.0
2,026.0
1,661.0
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
0.0
0.0
0.0
0.0
0.0
8,020.0
4,654.0
6,178.0
7,752.0
8,114.0
8,020.0
4,654.0
6,178.0
7,752.0
8,114.0
1,796.0
1,986.0
2,865.0
2,607.0
1,568.0
9,816.0
6,640.0
9,043.0
10,359.0
9,682.0
14,548.0
11,348.0
13,356.0
14,753.0
12,172.0
Other Current Assets

Total Current Assets
Liabilities & Shareholders' Equity
Income Tax Payable

Other Current Liabilities
Total Current Liabilities
Long-Term Debt
Preferred Stock (Carrying Value)

Common Equity
Total Shareholders' Equity
Accumulated Minority Interest
Total Equity
12
Liabilities & Shareholders' Equity
FINANCIALS
Five Year Balance Sheet
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
-260.0
1,007.0
773.0
141.0
26.0
3,595.0
1,311.0
1,214.0
1,528.0
1,691.0
-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
616.0
488.0
2,529.0
3,603.0
1,365.0
0.0
0.0
0.0
-73.0
--
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
-448.0
-674.0
-2,092.0
-2,391.0
-1,756.0
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
-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
Other Funds
Funds from Operations
Changes in Working Capital
Investing Activities
Capital Expenditures
Net Assets from Acquisitions
Sale of Fixed Assets & Businesses
Net Investing Cash Flow

Financing Activities
Change in Capital Stock
Net Financing Cash Flow
13
FINANCIALS
Five Year Cash Flow Statement
5 Yr AVG 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06

Valuation
Price/Book Value
1.1x
Enterprise Value/EBIT
0.8x
1.3x
0.5x
1.1x
1.6x
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
Gross Margin
15.2%
32.0%
3.4%
-0.9%
19.0%
22.8%
Operating Margin
-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%
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
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
0.2x
-0.2x
1.2x
1.7x
-0.1x
-1.7x
Profitability
Efficiency
Liquidity
Credit Analysis
Net Debt/EBITDA
Net Debt/(EBITDA-Capex)
-0.2x
2.0x
-0.9x
0.0x
--
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
36.6%
29.4%
66.6%
45.7%
32.8%
8.6%
Total Debt/EBITDA
14
Total Debt/Total Equity
FINANCIALS
Five Year Key Annual Ratios
INDUSTRY COMPARABLES
15
16
Key Industry Comparables
All values in millions of U.S. Dollar, except per share items.

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

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

Ticker
Company Name
MU
Mean
Median
19
TXN
INTC
STM
IFX
NXPI
BRCM
XLNX
MXIM
NSM
ALTR
ADI
NVDA
LLTC
Gross Margin %
FY-1
FY0 LTM
32.0 27.9
47.9
55.6
30.9
21.8
22.4
50.4
63.0
51.2
62.7
66.8
55.8
35.4
75.4
49.2
51.2
53.6
65.2
38.8
37.5
25.2
51.4
63.2
60.0
65.9
71.0
65.2
44.9
77.0
55.3
60.0
53.6
65.2
38.8
53.2
51.4
65.3
62.0
72.7
71.0
67.3
44.9
78.3
60.3
63.6
EBIT Margin %
FY-1
FY0
LTM
18.4
13.50
21.13
16.92
(11.08)
(8.23)
(28.33)
4.47
24.74
6.11
22.41
26.31
17.36
(2.97)
42.95
10.1
16.9
31.5
35.6
4.6
12.5
(21.3)
16.9
25.2
14.2
24.3
44.4
33.3
11.1
48.2
21.6
24.3
31.53
35.55
4.55
15.29
0.50
16.92
33.65
25.85
36.53
44.43
35.08
11.08
52.00
26.4
31.5
EBITDA Margin %
FY-1
FY0
LTM
42.1
35.4
30.0
31.3
5.0
9.3
(5.0)
6.8
28.7
18.6
30.6
28.7
24.3
2.9
47.9
19.9
24.3
38.1
46.2
16.5
24.2
1.2
18.9
28.8
22.6
31.0
45.8
37.7
16.4
52.0
29.2
28.8
38.1
46.2
16.5
26.4
15.5
18.9
36.2
32.5
41.9
45.8
38.2
16.4
55.2
32.9
36.2
Net Margin %
FY-1
FY0
21.8
14.10
12.44
(13.29)
(7.43)
(66.14)
1.45
20.58
0.64
5.02
21.00
12.28
(2.04)
29.86
2.2
5.0
23.1
26.3
8.0
9.4
(4.6)
15.9
19.5
6.3
14.7
40.1
25.8
7.1
30.9
17.1
15.9
LTM
16.2
23.1
26.3
8.0
15.5
(14.3)
15.9
27.3
10.9
20.1
40.1
28.0
7.1
34.9
18.7
20.1
Margin Comparison

Ticker
Company Name
MU
52 Week
High
Low
11.95
6.36
Beta
1.75
1 Week
7.25
1 Month
13.11
3 Months
18.65

Mean
Median
36.71
24.25
13.55
11.40
34.80
47.39
35.42
28.44
24.16
45.68
41.66
26.17
36.14
31.2
34.8
0.94
0.96
0.83
1.54
2.78
0.95
0.99
1.11
0.80
1.27
0.98
1.39
1.03
1.2
1.0
2.30
8.24
1.15
8.15
6.40
3.73
1.73
2.90
0.00
6.76
2.99
4.56
6.05
4.2
3.7
5.31
7.43
(1.19)
6.32
21.81
(0.33)
(0.16)
5.79
72.84
14.65
3.07
5.39
6.38
11.3
5.8
3.60
2.20
2.65
9.41
54.87
(12.13)
1.47
(0.04)
67.43
21.16
0.13
(17.21)
(1.00)
10.2
2.2
20
TXN
INTC
STM
IFX
NXPI
BRCM
XLNX
MXIM
NSM
ALTR
ADI
NVDA
LLTC
22.65
17.60
6.56
5.05
10.23
29.05
22.75
15.67
11.84
21.97
26.28
8.65
26.25
17.3
17.6
Price Change %
6 Months
9 Months
48.11
34.79
25.06
9.01
50.85
36.78
175.08
6.26
21.95
33.14
85.51
57.62
23.59
64.48
12.81
46.3
33.1
41.82
(1.11)
42.26
70.65
7.10
11.49
42.80
67.20
61.18
29.72
73.23
9.97
38.0
42.0
1 Year
5.95
2 Years
148.15
3 Years
53.92
5 Years
(32.20)
31.82
(11.24)
13.44
49.41
11.01
14.84
22.97
53.05
70.58
26.76
8.98
10.07
25.1
18.9
102.83
42.73
87.86
473.92
81.46
54.21
83.31
106.17
162.54
88.49
68.05
58.76
117.5
85.6
18.68
(5.06)
8.97
51.66
71.39
28.79
26.20
17.08
112.63
23.12
(2.37)
3.29
29.5
20.9
(1.21)
10.08
(37.39)
5.85
(13.61)
16.96
(31.71)
(19.83)
110.86
(0.26)
(4.34)
(3.66)
2.6
(2.4)
Stock Performance Comparison
FINANCIAL STATEMENTS PROJECTIONS ASSUMPTIONS
21
Income Statement
Sales (% growth)
Cost of Goods Sold (% sales)
SG&A (% sales)
Other Expense / (Income) (% of sales)
Depreciation & Amortization (% sales)
Amortization (% sales)
Interest Income
Projection Period
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
8.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
7.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
6.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
5.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
Cash Flow Statement
Capital Expenditures (% sales)
Projection Period
Balance Sheet Assumptions

Balance Sheet
Days Sales Outstanding (DSO)

Days Inventory Held (DIH)
Prepaids and Other Current Assets (% sales)
Days Payable Outstanding (DPO)
Accrued Liabilities (% sales)
Other Current Liabilities (% sales)
22
Projection Period
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
61.0
88.0
1.0%
48.0
4.0%
16.0%
FINANCIAL STATEMENTS PROJECTIONS ASSUMPTIONS
Income Statement and Cash Flow Statement Assumptions
TRANSACTION ANALYSIS
23
Calculation of Fully Diluted Shares Outstanding
Purchase Price
Public (1) / Private (2)
Entry EBITDA Multiple
LTM 1/1/2011 EBITDA
Enterprise Value
Less: Total Debt
Less: Preferred Securities
Less: Noncontrolling Interest
Plus: Cash and Cash Equivalents
Premium Calculation (If Public)
Stock Trading at (If Public)
Implied Premium Paid (If Public)
Implied Offer Price per Share

Stock Trading at (If Public)
4.6x Basic Shares Outstanding
3,567.0 Plus: Shares from In-the-Money Options
$16,408.2 Less: Shares Repurchased
Net New Shares from Options
Plus:
Shares from Convertible Securities
(1,648.0)
Fully Diluted Shares Outstanding
(1,796.0)
2,913.0 Options/Warrants
$15,877.2
$15.31
$11.00
1,037.0
1,037.000
Number of
Shares
Exercise
Price
$11.00 Tranche 1
39% Tranche 2
Tranche 3
Tranche 4
Tranche 5
Total
Tranche
In-the-Money
Shares
Proceeds
Convertible Securities
Conversion
Price
Amount
Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total
24
Conversion
Ratio
-
New
Shares
-
Fully Diluted Shares and Purchase Price Calculation
Sources of Funds
% of Total
Equity %
Amount
Multiple of EBITDA
Sources
1/1/2011
Pricing
Revolving Credit
Term Loan A
6,000.0
-%
30.3%
-x
1.7x
-x
1.7x
L+325 bps
L+300 bps
Term Loan B
2,000.0
1,000.0
Senior Subordinated Notes

Sponsor Equity
Rollover Equity
Management Equity
Cash on Hand
7,904.5
2,913.0
0.6x
-x
-x
0.3x
-x
2.2x
-x
-x
0.8x
5.6x
2.2x
2.2x
2.2x
2.5x
2.5x
4.7x
4.7x
4.7x
5.6x
5.6x
L+350 bps
Term Loan C
2nd Lien
Senior Notes
10.1%
-%
-%
5.0%
-%
39.9%
-%
-%
14.7%
100.0%
100%
0%
0%
Total Sources
$19,817.5
Uses of Funds
Purchase Target Equity

Repay Existing Debt
$15,877.2
1,648.0
Noncontrolling Interest
1,796.0
Financing Fees
Investment Banking Fees
Legal Fees
Other Fees and Expenses
Miscellaneous Expenses 1
10.000%
177.8
158.8
158.8
1.0
-
% of Total
Offer Price per Share
$15.31
Uses
Fully Diluted Shares
1,037.0
80.1%
8.3% Plus: Existing Net Debt
9.1%
Enterprise Value
0.9%
0.8%
Return
0.8%
Exit Year
0.0%
Entry Multiple
-%
- % Exit Multiple
IRR
Cash Return
Total Uses
L+350 bps
L+350 bps
3.000%
Purchase Price
Amount
25
Cumulative
$19,817.5
100.0%
$15,877.2
531.0
$16,408.2
2016
4.6x
4.6x
28.4%
3.5x
Sources and Uses of Funds
Financing Fees Amortization

Financing Fees
Fees
Structure 3
Size
Revolving Credit Size

Term Loan A
Term Loan B
(%)
$300.0
6,000.0
2,000.0
Term Loan C
2nd Lien
$5.3
105.0
35.0
Senior Notes
Senior Bridge Facility
Senior Subordinated Bridge Facility
Other Financing Fees & Expenses
($)
1.750%
1.750%
1.750%
1,000.0
1,000.0
-
2.250%
2.250%
1.000%
1.000%
Total Financing Fees
22.5
10.0
$177.8
Amortization of Financing Fees

Term
Term Loan A
Term Loan B
Term Loan C
2nd Lien
Senior Notes
Senior Bridge Facility
Senior Subordinated Bridge Facility
Other Financing Fees & Expenses
Annual Amortization
Administrative Agent Fee
26
6
5
7
7
10
10
10
10
10
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
$0.9
21.0
5.0
2.3
1.0
-
$0.9
21.0
5.0
2.3
1.0
-
$0.9
21.0
5.0
2.3
1.0
-
$0.9
21.0
5.0
2.3
1.0
-
$0.9
21.0
5.0
2.3
1.0
-
$0.9
5.0
2.3
1.0
-
5.0
2.3
1.0
-
2.3
1.0
-
2.3
1.0
-
2.3
1.0
-
$30.1
$30.1
$30.1
$30.1
$30.1
$9.1
$8.3
$3.3
$3.3
$3.3
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
$ in Millions
Income Statement
Historical Period
2009
2008
Sales
% growth
Cost of Goods Sold
Gross Profit
% margin
Selling, General & Administrative
% sales
$5,841.0
NA
Projection Period
2010
$4,803.0
(17.8%)
$8,482.0
76.6%
LTM
1/1/2011
Pro forma
2011
$8,482.0
NA
$8,500.0
0.2%
Year 1
2012
Year 2
2013
$9,180.0
8.0%
$9,822.6
7.0%
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
$10,412.0
6.0%
$10,932.6
5.0%
$11,260.5
3.0%
$11,598.3
3.0%
$11,946.3
3.0%
$12,304.7
3.0%
$12,673.8
3.0%
$13,054.0
3.0%
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
$2,005.0
34.3%
$2,303.0
47.9%
$4,719.0
55.6%
$4,719.0
55.6%
$4,675.0
55.0%
$5,049.0
55.0%
$5,402.4
55.0%
$5,726.6
55.0%
$6,012.9
55.0%
$6,193.3
55.0%
$6,379.1
55.0%
$6,570.5
55.0%
$6,767.6
55.0%
$6,970.6
55.0%
$7,179.7
55.0%
1,135.0
19.4%
1,001.0
20.8%
1,152.0
13.6%
1,152.0
13.6%
1,190.0
14.0%
1,377.0
15.0%
1,473.4
15.0%
1,561.8
15.0%
1,639.9
15.0%
1,689.1
15.0%
1,739.8
15.0%
1,791.9
15.0%
1,845.7
15.0%
1,901.1
15.0%
1,958.1
15.0%
Other Expense / (Income)
EBITDA
% margin
$870.0
14.9%
$1,302.0
27.1%
$3,567.0
42.1%
$3,567.0
42.1%
$3,485.0
41.0%
$3,672.0
40.0%
$3,929.0
40.0%
$4,164.8
40.0%
$4,373.0
40.0%
$4,504.2
40.0%
$4,639.3
40.0%
$4,778.5
40.0%
$4,921.9
40.0%
$5,069.5
40.0%
$5,221.6
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
% margin
($1,190.0)
(20.4%)
($837.0)
(17.4%)
$1,562.0
18.4%
$1,562.0
18.4%
$935.0
11.0%
$918.0
10.0%
$982.3
10.0%
$1,041.2
10.0%
$1,093.3
10.0%
$1,126.1
10.0%
$1,159.8
10.0%
$1,194.6
10.0%
$1,230.5
10.0%
$1,267.4
10.0%
$1,305.4
10.0%
360.0
130.0
30.0
1.5
0.2
268.1
129.4
30.0
1.5
0.2
91.9
131.0
30.0
1.5
0.2
1.7
66.6
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
30.0
1.5
0.2
Cash Interest Expense

Amortization of Deferred Financing Fees
$521.7
30.1
$429.1
30.1
$254.6
30.1
$100.0
30.1
$31.7
30.1
$31.7
30.1
$31.7
9.1
$31.7
8.3
$31.7
3.3
$31.7
3.3
$31.7
3.3
Total Interest Expense

Interest Income
$551.8
$459.2
-
$284.7
-
$130.1
(5.9)
$61.8
(28.8)
$61.8
(63.5)
$40.8
(99.4)
$39.9
(136.6)
$34.9
(175.2)
$34.9
(215.1)
$34.9
(256.4)
Net Interest Expense
$459.2
$284.7
$124.2
$33.0
($58.6)
($96.7)
($140.3)
($180.2)
($221.5)
Earnings Before Taxes

Income Tax Expense
458.8
174.4
697.6
265.1
916.9
348.4
1,060.2
402.9
1,127.7
428.5
1,218.5
463.0
1,291.4
490.7
1,370.7
520.9
1,447.5
550.1
1,526.9
580.2
$284.5
$432.5
$568.5
$657.3
$699.2
$755.5
$800.6
$849.9
$897.5
$946.7
3.1%
4.4%
5.5%
6.0%
6.2%
6.5%
6.7%
6.9%
7.1%
7.3%
Pro forma
2011
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
0.2%
45.0%
14.0%
-%
30.0%
-%
1.0%
8.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
7.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
6.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
5.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
3.0%
45.0%
15.0%
-%
30.0%
-%
1.0%
38.0%
Interest Expense
Revolving Credit Facility
Term Loan A
Term Loan B
Term Loan C
Existing Term Loan
2nd Lien
Senior Notes
Commitment Fee on Unused Revolver
Administrative Agent Fee
Net Income
% margin
Income Statement Assumptions

Sales (% YoY growth)
Cost of Goods Sold (% margin)
SG&A (% sales)
Other Expense / (Income) (% of sales)
Depreciation & Amortization (% of sales)
Amortization (% of sales)
Interest Income
Tax Rate
27
2008
NA
65.7%
19.4%
-%
35.3%
-%
2009
(17.8%)
52.1%
20.8%
-%
44.5%
-%
2010
76.6%
44.4%
13.6%
-%
23.6%
-%
LTM
1/1/2011
NA
44.4%
13.6%
-%
23.6%
-%
($1.7)
Income Statement Projection
$ in Millions
Balance Sheet
Projection Period
Opening
2011
Cash and Cash Equivalents
Accounts Receivable
Inventories
Prepaids and Other Current Assets
Total Current Assets
Property, Plant and Equipment, net
Goodwill and Intangible Assets
Other Assets
Deferred Financing Fees
Total Assets
Accounts Payable
Accrued Liabilities
Other Current Liabilities
Total Current Liabilities
Term Loan A
Term Loan B
Term Loan C
Existing Term Loan
2nd Lien
Senior Notes
Other Debt
Other Long-Term Liabilities
Total Liabilities
All Shareholders' Equity
Adjustments
(+)
(-)
$2,913.0
1,531.0
1,770.0
119.0
(2,913.0)
Pro Forma
2011
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
1,531.0
1,770.0
119.0
1,534.2
996.0
91.8
1,641.6
1,065.7
98.2
$1,172.2
1,740.1
1,129.6
104.1
$4,579.1
1,827.1
1,186.1
109.3
$8,114.8
1,881.9
1,221.7
112.6
$11,770.1
1,938.4
1,258.3
116.0
$15,556.4
1,996.5
1,296.1
119.5
$19,476.2
2,056.4
1,335.0
123.0
$23,535.6
2,118.1
1,375.0
126.7
$27,738.9
2,181.6
1,416.3
130.5
$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
6,601.0
323.0
1,291.0
-
6,601.0
8,180.2
1,291.0
177.8
4,306.0
8,180.2
1,291.0
147.6
1,850.4
8,180.2
1,291.0
117.5
$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
799.0
346.0
1,557.0
799.0
346.0
1,557.0
543.3
367.2
1,468.8
581.3
392.9
1,571.6
616.2
416.5
1,665.9
647.0
437.3
1,749.2
666.4
450.4
1,801.7
686.4
463.9
1,855.7
707.0
477.9
1,911.4
728.2
492.2
1,968.7
750.0
507.0
2,027.8
772.5
522.2
2,088.6
$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
7,857.2
177.8
$2,702.0
1,648.0
(129.0)
511.0
6,000.0
2,000.0
(1,648.0)
1,000.0
-
$4,732.0
1,796.0
8,020.0
7,586.0
(1,796.0)
(8,020.0)
6,000.0
2,000.0
1,000.0
(129.0)
511.0
2,935.1
1,980.0
1,000.0
(129.0)
511.0
53.8
1,960.0
1,000.0
(129.0)
511.0
(752.6)
8,180.2
1,291.0
87.4
1,000.0
(129.0)
511.0
(3,485.8)
8,180.2
1,291.0
57.3
1,000.0
(129.0)
511.0
(6,300.9)
8,180.2
1,291.0
27.1
1,000.0
(129.0)
511.0
(9,200.5)
8,180.2
1,291.0
18.0
1,000.0
(129.0)
511.0
(12,187.1)
8,180.2
1,291.0
9.8
1,000.0
(129.0)
511.0
(15,263.2)
8,180.2
1,291.0
6.5
1,000.0
(129.0)
511.0
(18,431.7)
8,180.2
1,291.0
3.3
1,000.0
(129.0)
511.0
(21,695.2)
8,180.2
1,291.0
(0.0)
1,000.0
(129.0)
511.0
$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
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

(Increase) / Decrease in Net Working Capital
718.0
718.0
242.7
475.3
259.7
(17.0)
275.3
(15.6)
289.0
(13.8)
297.7
(8.7)
306.6
(8.9)
315.8
(9.2)
325.3
(9.5)
335.1
(9.8)
345.1
(10.1)
Balance Sheet Assumptions

Current Assets
Days Sales Outstanding (DSO)
Days Inventory Held (DIH)
Prepaid and Other Current Assets (% of sales)
Current Liabilities
Days Payable Outstanding (DPO)
Accrued Liabilities (% of sales)
Other Current Liabilities (% of sales)
28
Opening
2011
Pro forma
2011
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
65.7
168.9
1.4%
65.7
168.9
1.4%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
61.0
88.0
1.0%
76.2
4.1%
18.3%
76.2
4.1%
18.3%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
48.0
4.0%
16.0%
Balance Sheet Projection and Adjustments
$ in Millions
Cash Flow Statement
Projection Period
Year 1
2012
Operating Activities
Net Income
Plus: Depreciation & Amortization
Plus: Amortization
Plus: Amortization of Financing Fees
Changes in Working Capital Items
(Inc.) / Dec. in Accounts Receivable
(Inc.) / Dec. in Inventories
(Inc.) / Dec. in Prepaid and Other Current Assets
Inc. / (Dec.) in Accounts Payable
Inc. / (Dec.) in Accrued Liabilities
Inc. / (Dec.) in Other Current Liabilities
(Inc.) / Dec. in Net Working Capital
Cash Flow from Operating Activities
Investing Activities
Other Investing Activities
Cash Flow from Investing Activities
Financing Activities
Term Loan A
Term Loan B
Term Loan C
Existing Term Loan
2nd Lien
Senior Notes
Other Debt
Dividends
Equity Issuance / (Repurchase)
Cash Flow from Financing Activities
Year 2
2013
$284.5
2,754.0
30.1
Year 3
2014
$432.5
2,946.8
30.1
$568.5
3,123.6
30.1
Year 4
2015
Year 5
2016
$657.3
3,279.8
30.1
Year 6
2017
$699.2
3,378.2
30.1
Year 7
2018
$755.5
3,479.5
9.1
Year 8
2019
$800.6
3,583.9
8.3
Year 9
2020
$849.9
3,691.4
3.3
Year 10
2021
$897.5
3,802.1
3.3
$946.7
3,916.2
3.3
(3.2)
774.0
27.2
(107.4)
(69.7)
(6.4)
(98.5)
(63.9)
(5.9)
(87.0)
(56.5)
(5.2)
(54.8)
(35.6)
(3.3)
(56.5)
(36.7)
(3.4)
(58.2)
(37.8)
(3.5)
(59.9)
(38.9)
(3.6)
(61.7)
(40.0)
(3.7)
(63.5)
(41.3)
(3.8)
(255.7)
21.2
(88.2)
38.0
25.7
102.8
34.9
23.6
94.3
30.8
20.8
83.3
19.4
13.1
52.5
20.0
13.5
54.1
20.6
13.9
55.7
21.2
14.3
57.3
21.8
14.8
59.1
22.5
15.2
60.8
475.3
$3,543.9
(17.0)
$3,392.4
(15.6)
$3,706.6
(13.8)
$3,953.5
(8.7)
$4,098.8
(8.9)
$4,235.2
(9.2)
$4,383.6
(9.5)
$4,535.0
(9.8)
$4,693.1
(10.1)
$4,856.1
(459.0)
-
(491.1)
-
(520.6)
-
(546.6)
-
(563.0)
-
(579.9)
-
(597.3)
-
(615.2)
-
(633.7)
-
(652.7)
-
($459.0)
($491.1)
($520.6)
($546.6)
($563.0)
($579.9)
($597.3)
($615.2)
($633.7)
($652.7)
(3,064.9)
(20.0)
-
(2,881.3)
(20.0)
-
(53.8)
(1,960.0)
-
($3,084.9)
($2,901.3)
($2,013.8)
Excess Cash for the Period

Beginning Cash Balance
$1,172.2
-
$3,406.8
1,172.2
$3,535.8
4,579.1
$3,655.2
8,114.8
$3,786.3
11,770.1
$3,919.8
15,556.4
$4,059.4
19,476.2
$4,203.4
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
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
Cash Flow Statement Assumptions

Capital Expenditures (% of sales)
29
Cash Flow Statement Projections
$ in Millions
Debt Schedule
Projection Period
Pro forma
2011
Forward LIBOR Curve
3.00%
Cash Flow from Operating Activities

Cash Flow from Investing Activities
Cash Available for Debt Repayment
Total Mandatory Repayments
Cash From Balance Sheet
MinCash
-
Cash Available for Optional Debt Repayment

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

Projection Period
Historical Period
2008
2009
2010
LTM
1/1/2011
Pro forma
2011
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
Sales
% growth
$5,841.0
NA
$4,803.0
(17.8%)
$8,482.0
76.6%
$8,482.0
NA
$8,500.0
0.2%
$9,180.0
8.0%
$9,822.6
7.0%
$10,412.0
6.0%
$10,932.6
5.0%
$11,260.5
3.0%
$11,598.3
3.0%
$11,946.3
3.0%
$12,304.7
3.0%
$12,673.8
3.0%
$13,054.0
3.0%
Gross Profit
% margin
$2,005.0
34.3%
$2,303.0
47.9%
$4,719.0
55.6%
$4,719.0
55.6%
$4,675.0
55.0%
$5,049.0
55.0%
$5,402.4
55.0%
$5,726.6
55.0%
$6,012.9
55.0%
$6,193.3
55.0%
$6,379.1
55.0%
$6,570.5
55.0%
$6,767.6
55.0%
$6,970.6
55.0%
$7,179.7
55.0%
EBITDA
% margin
$870.0
14.9%
$1,302.0
27.1%
$3,567.0
42.1%
$3,567.0
42.1%
$3,485.0
41.0%
$3,672.0
40.0%
$3,929.0
40.0%
$4,164.8
40.0%
$4,373.0
40.0%
$4,504.2
40.0%
$4,639.3
40.0%
$4,778.5
40.0%
$4,921.9
40.0%
$5,069.5
40.0%
$5,221.6
40.0%
% sales
2,529.0
43.3%
488.0
10.2%
616.0
7.3%
616.0
7.3%
616.0
7.2%
459.0
5.0%
491.1
5.0%
520.6
5.0%
546.6
5.0%
563.0
5.0%
579.9
5.0%
597.3
5.0%
615.2
5.0%
633.7
5.0%
652.7
5.0%
521.7
551.8
429.1
459.2
254.6
284.7
100.0
130.1
31.7
61.8
31.7
61.8
31.7
40.8
31.7
39.9
31.7
34.9
31.7
34.9
31.7
34.9
Cash Interest Expense

Total Interest Expense
Free Cash Flow
EBITDA
Less: Cash Interest Expense
Plus: Interest Income
Less: Income Taxes
Less: Capital Expenditures
Less: Increase in Net Working Capital
Free Cash Flow
Cumulative Free Cash Flow
$3,672.0
(429.1)
(174.4)
(459.0)
475.3
$3,929.0
(254.6)
(265.1)
(491.1)
(17.0)
$4,164.8
(100.0)
5.9
(348.4)
(520.6)
(15.6)
$4,373.0
(31.7)
28.8
(402.9)
(546.6)
(13.8)
$4,504.2
(31.7)
63.5
(428.5)
(563.0)
(8.7)
$4,639.3
(31.7)
99.4
(463.0)
(579.9)
(8.9)
$4,778.5
(31.7)
136.6
(490.7)
(597.3)
(9.2)
$4,921.9
(31.7)
175.2
(520.9)
(615.2)
(9.5)
$5,069.5
(31.7)
215.1
(550.1)
(633.7)
(9.8)
$5,221.6
(31.7)
256.4
(580.2)
(652.7)
(10.1)
$3,084.9
3,084.9
$2,901.3
5,986.2
$3,186.0
9,172.2
$3,406.8
12,579.1
$3,535.8
16,114.8
$3,655.2
19,770.1
$3,786.3
23,556.4
$3,919.8
27,476.2
$4,059.4
31,535.6
$4,203.4
35,738.9
$1,172.2
$4,579.1
$8,114.8
$11,770.1
$15,556.4
$19,476.2
$23,535.6
$27,738.9
Capitalization
Cash
Term Loan A
Term Loan B
Term Loan C
Existing Term Loan
2nd Lien
Other Debt
Total Senior Secured Debt
Senior Notes
Total Senior Debt
Total Debt
Shareholders' Equity
Total Capitalization
% of Bank Debt Repaid
6,000.0
2,000.0
(129.0)
2,935.1
1,980.0
(129.0)
53.8
1,960.0
(129.0)
(129.0)
(129.0)
(129.0)
(129.0)
(129.0)
(129.0)
(129.0)
(129.0)
$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)
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
$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
$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
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
$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
38.6%
74.8%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Credit Statistics
% 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

(EBITDA - Capex) / Cash Interest Expense
6.7x
5.5x
8.6x
7.5x
15.4x
13.5x
41.7x
36.4x
138.2x
120.9x
142.3x
124.5x
146.6x
128.3x
151.0x
132.1x
155.5x
136.1x
160.2x
140.2x
165.0x
144.4x
EBITDA / Total Interest Expense

(EBITDA - Capex) / Total Interest Expense
6.3x
5.2x
8.0x
7.0x
13.8x
12.1x
32.0x
28.0x
70.8x
61.9x
72.9x
63.8x
113.8x
99.6x
119.8x
104.8x
141.0x
123.4x
145.3x
127.1x
149.6x
130.9x
Senior Secured Debt / EBITDA

Senior Debt / EBITDA
Total Debt / EBITDA
Net Debt / EBITDA
2.3x
2.5x
2.5x
2.5x
1.3x
1.6x
1.6x
1.6x
0.5x
0.7x
0.7x
0.7x
(0.0x)
0.2x
0.2x
(0.1x)
(0.0x)
0.2x
0.2x
(0.8x)
(0.0x)
0.2x
0.2x
(1.6x)
(0.0x)
0.2x
0.2x
(2.3x)
(0.0x)
0.2x
0.2x
(3.1x)
(0.0x)
0.2x
0.2x
(3.8x)
(0.0x)
0.2x
0.2x
(4.5x)
(0.0x)
0.2x
0.2x
(5.1x)
31
Free Cash Flow , Capitalization and Credit Statistics Summary
RETURN ANALYSIS
32
$ in Millions
Returns Analysis
Initial Sponsor Equity
Initial Rollover Equity
Initial Management Equity
Total Initial Equity
$7,904.5
$7,904.5
100%
0%
0%
100%
Projection Period
Pro forma
2011
Entry EBITDA Multiple
4.6x
EBITDA
Exit EBITDA Multiple
4.6x
Enterprise Value at Exit

Less: Net Debt
Revolving Credit
Term Loan A
Term Loan B
Term Loan C
Existing Term Loan
2nd Lien
Senior Notes
Other Debt
Year 1
2012
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
$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
$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
2,935.1
1,980.0
1,000.0
(129.0)
Total Debt
Less: Cash and Cash Equivalents
Year 2
2013
53.8
1,960.0
1,000.0
(129.0)
1,000.0
(129.0)
1,000.0
(129.0)
1,000.0
(129.0)
$871.0
4,579.1
$871.0
8,114.8
1,000.0
(129.0)
$5,786.1
$2,884.8
($301.2)
Less: Fees and Expenses

Investment Banking Fees (1% of Transcation Value)
Legal Fees (1% of Transaction Value)
Other Fees and Expenses ($1MM)
168.9
168.9
1.0
180.7
180.7
1.0
191.6
191.6
1.0
201.2
201.2
1.0
207.2
207.2
1.0
213.4
213.4
1.0
219.8
219.8
1.0
226.4
226.4
1.0
233.2
233.2
1.0
240.2
240.2
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
$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
All Equity Value at Exit

Cash Return
Sponsor IRR
Sponsor Equity %
Initial Equity Investment
Equity Proceeds
IRR
33
100%
($10,899.1)
($14,685.4)
($18,605.2)
$871.0
23,535.6
1,000.0
(129.0)
$871.0
1,172.2
($7,243.8)
$871.0
19,476.2
1,000.0
(129.0)
$2,884.8
-
($3,708.1)
$871.0
15,556.4
1,000.0
(129.0)
$5,786.1
-
Net Debt
$871.0
11,770.1
1,000.0
(129.0)
($22,664.6)
$871.0
27,738.9
($26,867.9)
1.4x
1.9x
2.4x
3.0x
3.5x
4.0x
4.6x
5.2x
5.8x
6.4x
Year 1
2012
Year 2
2013
Year 3
2014
Year 4
2015
Year 5
2016
Year 6
2017
Year 7
2018
Year 8
2019
Year 9
2020
Year 10
2021
($7,904.5)
$10,766.3
($7,904.5)
$14,826.3
($7,904.5)
$19,075.0
($7,904.5)
$23,420.6
($7,904.5)
$27,547.8
($7,904.5)
$31,812.2
($7,904.5)
$36,225.9
($7,904.5)
$40,792.0
($7,904.5)
$45,517.0
($7,904.5)
$50,406.0
20.4%
36.2%
37.0%
34.1%
31.2%
28.4%
26.1%
24.3%
22.8%
21.5%
RETURN ANALYSIS
Return Analysis
IRR - Assuming Exit in 2016E
Entry
Multiple
28.4%
3.1x
3.6x
4.1x
4.6x
5.1x
5.6x
3.6x
56.7%
40.2%
30.6%
24.0%
18.9%
14.9%
4.1x
59.6%
42.8%
33.0%
26.2%
21.1%
17.0%
Exit Multiple
4.6x
62.3%
45.2%
35.3%
28.4%
23.2%
19.0%
5.1x
64.8%
47.5%
37.4%
30.4%
25.1%
20.9%
5.6x
67.2%
49.6%
39.3%
32.2%
26.9%
22.6%
IRR Sensitivity Analysis w.r.t Exit Multiple and Exit Year Assuming 4.6x Entry Multiple
IRR - Assuming 4.6x Entry Multiple
Exit
Multiple
34
3.6x
4.1x
4.6x
5.1x
5.6x
2016
28.4%
24.0%
26.2%
28.4%
30.4%
32.2%
2017
26.1%
22.9%
24.6%
26.1%
27.6%
29.0%
Exit Year
2018
24.3%
21.9%
23.1%
24.3%
25.4%
26.5%
2019
22.8%
20.9%
21.8%
22.8%
23.7%
24.5%
2020
21.5%
19.9%
20.7%
21.5%
22.2%
22.9%
RETURN ANALYSIS
IRR Sensitivity Analysis w.r.t Entry Multiple and Exit Multiple Assuming Exit in 2016
Financing Structures
Structure
1
Base
Sources of Funds
2
Structure 1
3
Structure 2
4
Structure 3
5
Structure 4
$300.0
$300.0
$300.0
$300.0
$300.0
Revolving Credit Draw

Term Loan A
Term Loan B
Term Loan C
2nd Lien
Senior Notes
5,000.0
1,000.0
500.0
5,000.0
2,000.0
500.0
6,000.0
2,000.0
500.0
6,000.0
2,000.0
1,000.0
5,000.0
2,000.0
1,000.0

Sponsor Equity
100%
10,404.5
9,404.5
8,404.5
7,904.5
8,904.5
0%
0%
2,913.0
-
2,913.0
-
2,913.0
-
2,913.0
-
2,913.0
-
$19,817.5
$19,817.5
$19,817.5
$19,817.5
$19,817.5
$15,877.2
1,648.0
$15,877.2
1,648.0
$15,877.2
1,648.0
$15,877.2
1,648.0
$15,877.2
1,648.0
1,796.0
177.8
1,796.0
177.8
1,796.0
177.8
1,796.0
177.8
1,796.0
177.8
Investment Banking Fees
158.8
158.8
158.8
158.8
158.8
Legal Fees
Other Fees and Expenses
158.8
1.0
158.8
1.0
158.8
1.0
158.8
1.0
158.8
1.0
Rollover Equity
Management Equity
Cash on Hand
Other Source
Total Sources of Funds
Uses of Funds
Target Equity Purchase Price
Repay Existing Bank Debt
Financing Fees
Total Uses of Funds
$19,817.5
5 Year IRR
35
24.0%
$19,817.5
$19,817.5
$19,817.5
$19,817.5
25.5%
27.3%
28.4%
26.4%
RETURN ANALYSIS
Alternative Financing Structures and Corresponding IRRs
EXIT STRATEGIES
36
Company
37
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 Microns 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
EXIT STRATEGIES
Potential Strategic Buyers
Private Equity Firm
38
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 technologyenabled industries
Among its most notable
investments are Avaya, Sabre
Holdings, UGS Corp., Skype,
Seagate Technology
EXIT STRATEGIES
Potential Financial Buyers
Prepared
by
Deb Sahoo
MBA, Ross School of Business
University of Michigan, Ann Arbor
39

LBO of Micron Technologies (Deb Sahoo)

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LBO of Micron Technologies (Deb Sahoo)

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LEVERAGED BUYOUT OF MICRON TECHNOLOGIES

Financial Statements Projections Assumptions

Company: Micron Technology

Offer Price per Share

Fully Diluted Shares

Equity Purchase Price

Stock Price: $11.52

Manufacturer and marketer of semiconductor devices,

Products and Services

Operations in Europe, Asia Pacific and the US

Strong management team

Large amount of cash in hand

Viable Exit Strategy

Strong defensible market position

Adequate strategic buyers such as AMD, INTEL for

All figures in millions of U.S. Dollar, except per share items

COGS excluding D&A

Depreciation & Amortization Expense

Equity in Earnings of Affiliates

Consolidated Net Income

Minority Interest Expense

Other Operating Expense

Five Year Income Statement

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

Total Accounts Receivable

Net Property, Plant & Equipment

Total Investments and Advances

ST Debt & Curr. Portion LT Debt

Other Current Assets

Liabilities & Shareholders' Equity

Income Tax Payable

Preferred Stock (Carrying Value)

Liabilities & Shareholders' Equity

Five Year Balance Sheet

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

Depreciation, Depletion & Amortization

Deferred Taxes & Investment Tax Credit

Net Operating Cash Flow

Issuance/Reduction of Debt, Net

Net Change in Cash

Net Investing Cash Flow

Net Financing Cash Flow

Five Year Cash Flow Statement

5 Yr AVG 31-Aug-10 31-Aug-09 29-Aug-08 31-Aug-07 31-Aug-06

Days of Sales Outstanding

Days of Inventory on Hand

Days of Payables Outstanding

EBIT/Interest Expense (Int. Coverage)

Fixed-charge Coverage Ratio

Total Debt/Total Equity

Five Year Key Annual Ratios

Key Industry Comparables

All values in millions of U.S. Dollar, except per share items.

All values in millions of U.S. Dollar, except per share items.

All values in millions of U.S. Dollar, except per share items.

All values in millions of U.S. Dollar, except per share items.

Texas Instruments, Incorporated. (TXN-US)

Stock Performance Comparison

FINANCIAL STATEMENTS PROJECTIONS ASSUMPTIONS

Cash Flow Statement

Capital Expenditures (% sales)

Balance Sheet Assumptions

Days Sales Outstanding (DSO)

FINANCIAL STATEMENTS PROJECTIONS ASSUMPTIONS

Income Statement and Cash Flow Statement Assumptions