University of Oregon Investment Group April 18, 2013 Appendix 4 – Working Capital Model Working Capital Model Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ($ in thousands) 2009A 2010A 2011A 2012A 03/31/2013E 06/30/2013E 09/30/2013E 12/31/2013E 2013E 03/31/2014E 06/30/2014E 09/30/2014E 12/31/2014E 2014E 2015E 2016E 2017E 2018E Total Revenue 111,943.00 116,744.00 204,242.00 413,256.00 413,537.50 435,650.00 524,100.00 634,662.50 2,007,950.00 505,884.41 533,022.48 641,574.76 777,265.10 2,457,746.75 3,219,464.21 3,662,495.85 3,929,358.20 4,125,826.11 Current Assets Accounts Receivable 3,488.00 6,710.00 9,539.00 26,842.00 104,668.24 110,265.02 132,652.12 160,636.00 160,636.00 131,969.39 139,048.86 167,366.75 202,764.11 202,764.11 273,654.46 320,468.39 353,642.24 381,638.91 Days Sales Outstanding A/R 11.37 20.98 17.05 23.77 22.78 23.03 23.29 23.29 29.20 23.48 23.74 24.00 24.00 30.11 31.11 31.94 32.85 33.76 % of Revenue 3.12% 5.75% 4.67% 6.50% 25.31% 25.31% 25.31% 25.31% 8.00% 26.09% 26.09% 26.09% 26.09% 8.25% 8.50% 8.75% 9.00% 9.25% Inventory 23,222.00 45,182.00 50,082.00 268,504.00 588,758.88 620,240.74 746,168.19 903,577.50 903,577.50 759,823.77 800,584.36 963,626.74 1,167,429.71 1,167,429.71 1,448,758.90 1,538,248.26 1,532,449.70 1,485,297.40 Days Inventory Outstanding 82.77 191.73 128.15 256.46 150.75 161.95 174.64 175.81 210.61 181.45 183.46 185.48 185.48 232.72 218.15 204.40 188.54 176.38 % of Revenue 20.74% 38.70% 24.52% 64.97% 142.37% 142.37% 142.37% 142.37% 45.00% 150.20% 150.20% 150.20% 150.20% 47.50% 45.00% 42.00% 39.00% 36.00% Prepaid Expenses 4,222.00 10,839.00 9,414.00 8,438.00 26,167.06 27,566.26 33,163.03 40,159.00 40,159.00 31,992.58 33,708.82 40,573.76 49,154.94 49,154.94 64,389.28 73,249.92 78,587.16 82,516.52 % of Revenue 3.77% 9.28% 4.61% 2.04% 6.33% 6.33% 6.33% 6.33% 2.00% 6.32% 6.32% 6.32% 6.32% 2.00% 2.00% 2.00% 2.00% 2.00% Total Current Assets 30,932.00 62,731.00 69,035.00 303,784.00 719,594.18 758,072.01 911,983.34 1,104,372.50 1,104,372.50 923,785.74 973,342.04 1,171,567.24 1,419,348.75 1,419,348.75 1,786,802.64 1,931,966.56 1,964,679.10 1,949,452.83 % of Revenue 27.63% 53.73% 33.80% 73.51% 174.01% 174.01% 174.01% 174.01% 55.00% 182.61% 182.61% 182.61% 182.61% 57.75% 55.50% 52.75% 50.00% 47.25% Long Term Assets Net PP&E Beginning 4,711.00 23,535.00 114,636.00 298,414.00 552,229.00 586,162.97 621,763.62 665,554.15 552,229.00 719,607.60 770,142.10 823,133.64 888,189.09 719,607.60 968,361.48 1,191,227.99 1,437,486.11 1,839,395.35 Capital Expenditures 11,884.00 40,203.00 184,226.00 239,228.00 41,353.75 43,565.00 52,410.00 63,466.25 200,795.00 60,706.13 63,962.70 76,988.97 93,271.81 294,929.61 289,751.78 329,624.63 510,816.57 371,324.35 Acquisitions 0.00 65,210.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Depreciation and Amortization -6,940.00 -10,623.00 -16,919.00 -28,825.00 -7,419.78 -7,964.35 -8,619.47 -9,412.80 -33,416.40 -10,171.63 -10,971.16 -11,933.52 -13,099.42 -46,175.73 -66,885.27 -83,366.50 -108,907.33 -127,473.55 Net PP&E Ending 23,535.00 114,636.00 298,414.00 552,229.00 586,162.97 621,763.62 665,554.15 719,607.60 719,607.60 770,142.10 823,133.64 888,189.09 968,361.48 968,361.48 1,191,227.99 1,437,486.11 1,839,395.35 2,083,246.15 Total Current Assets & Net PP&E 54,467.00 177,367.00 367,449.00 856,013.00 1,305,757.15 1,379,835.63 1,577,537.49 1,823,980.10 1,823,980.10 1,693,927.84 1,796,475.68 2,059,756.33 2,387,710.23 2,387,710.23 2,978,030.62 3,369,452.67 3,804,074.45 4,032,698.99 % of Revenue 21% 98% 146% 134% 142% 143% 127% 113% 36% 152% 154% 138% 125% 39% 37% 39% 47% 50% Current Liabilities Accounts Payable 15,086.00 28,951.00 56,141.00 303,382.00 392,505.92 413,493.83 497,445.46 602,385.00 602,385.00 463,892.41 488,777.82 588,319.48 712,746.56 712,746.56 901,449.98 988,873.88 1,021,633.13 1,031,456.53 Days Payable Outstanding 53.77 122.85 143.65 289.77 100.50 107.96 116.43 117.21 140.41 110.78 112.01 113.24 113.24 142.08 135.74 131.40 125.70 122.48 % of Revenue 13.48% 24.80% 27.49% 73.41% 94.91% 94.91% 94.91% 94.91% 30.00% 91.70% 91.70% 91.70% 91.70% 29.00% 28.00% 27.00% 26.00% 25.00% Accrued Liabilities 14,532.00 20,945.00 32,109.00 39,798.00 118,106.21 124,421.54 149,682.84 180,715.50 180,715.50 127,970.32 134,835.26 162,295.03 196,619.74 196,619.74 241,459.82 274,687.19 284,878.47 299,122.39 % of Revenue 12.98% 17.94% 15.72% 9.63% 28.56% 28.56% 28.56% 28.47% 9.00% 25.30% 25.30% 25.30% 25.30% 8.00% 7.50% 7.50% 7.25% 7.25% Current Portion of Residual Value Commitment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 579,004.50 685,494.52 869,641.19 954,064.36 % of Revenue 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 17.98% 18.72% 22.13% 23.12% Deferred Revenue 1,377.00 4,635.00 2,345.00 1,905.00 143,418.59 259,604.70 400,365.84 567,651.93 567,651.93 635,648.94 751,065.23 923,202.93 1,100,632.33 1,100,632.33 1,615,658.23 2,110,056.04 2,460,732.88 2,702,263.60 % of Revenue 1.23% 3.97% 1.15% 0.46% 34.68% 59.59% 76.39% 89.44% 28.27% 125.65% 140.91% 143.90% 141.60% 44.78% 50.18% 57.61% 62.62% 65.50% Reservation payments 26,048.00 30,755.00 91,761.00 138,817.00 392,505.92 413,493.83 497,445.46 602,385.00 602,385.00 447,896.12 471,923.41 568,032.60 688,169.09 688,169.09 837,060.70 915,623.96 982,339.55 1,031,456.53 % of Revenue 23.27% 26.34% 44.93% 33.59% 94.91% 94.91% 94.91% 94.91% 30.00% 88.54% 88.54% 88.54% 88.54% 28.00% 26.00% 25.00% 25.00% 25.00% Total Current Liabilities 57,043.00 85,286.00 182,356.00 483,902.00 1,046,536.64 1,211,013.89 1,544,939.60 1,953,137.43 1,953,137.43 1,675,407.78 1,846,601.72 2,241,850.04 2,698,167.72 2,698,167.72 4,174,633.22 4,974,735.60 5,619,225.22 6,018,363.41 % of Revenue 50.96% 73.05% 89.28% 117.09% 253.07% 277.98% 294.78% 307.74% 97.27% 331.18% 346.44% 349.43% 347.14% 109.78% 129.67% 135.83% 143.01% 145.87% UOIG 26
University of Oregon Investment Group Appendix 5 – Discounted Cash Flows Analysis Assumptions April 18, 2013 Discounted Free Cash Flow Assumptions (Terminal) Tax Rate 16.24% Terminal Growth Rate 3.00% Risk Free Rate 2.92% Terminal Value 7,805,007 Beta 1.54 PV of Terminal Value 2,473,071 Market Risk Premium 5.79% Sum of PV Free Cash Flows 3,524,603 % Equity 90.96% Firm Value 5,997,674 % Debt 9.04% Total Debt 466,666 Cost of Debt 3.26% Cash & Cash Equivalents 220,984 CAPM 11.84% Market Capitalization 5,531,008 WACC 11.01% Fully Diluted Shares 107,349 Implied Price 51.52 Current Price 43.75 Undervalued 17.77% Considerations Beta Risk Free Rate MRP CAPM % Equity % Debt Cost of Debt Tax Rate WACC 2013 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 1.00% 1.04% 9.77% 2014 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 1.00% 5.00% 9.76% 2015 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 1.45% 10.00% 9.79% 2016 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 1.90% 10.00% 9.83% 2017 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 2.36% 15.00% 9.86% 2018-2023 1.54 1.72% 5.79% 10.64% 90.96% 9.04% 2.81% 15.00% 9.89% Terminal 1.54 2.92% 5.79% 11.84% 90.96% 9.04% 3.26% 16.24% 11.01% Growth Beta Beta SD Weighting 5 Year Monthly 0.53 0.81 0.00% 3 Year Weekly 1.22 0.10 30.00% 1 Year Weekly 1.19 0.46 3.33% Vasicek Beta 5 Year Monthly 1.22 0.81 0.00% Vasicek Beta 3 Year Weekly 1.20 0.07 30.00% Vasicek Beta 1 Year Weekly 1.31 0.55 3.33% Hamada Beta 5 Year Monthly 4.02 0.32 0.00% Hamada Beta 3 Year Weekly 2.32 0.10 30.00% Hamada Beta 1 Year Weekly 3.67 0.37 3.33% <strong>Tesla</strong> Beta 1.63 Industry Beta Beta SD Weighting 3 Year Weekly 1.22 0.10 20.00% 1 Year Weekly 1.19 0.46 0.00% Vasicek Beta 3 Year Weekly 1.35 0.01 50.00% Vasicek Beta 1 Year Weekly 0.99 0.25 0.00% Hamada Beta 3 Year Weekly 1.03 0.10 20.00% Hamada Beta 1 Year Weekly 1.59 0.17 10.00% <strong>Tesla</strong> Beta 1.28 Final Beta Beta Weighting <strong>Tesla</strong> Growth Beta 1.63 75.00% <strong>Tesla</strong> Industry Beta 1.28 25.00% <strong>Tesla</strong> Beta 1.54 UOIG 27
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