Comments on: Henry Kravis might be wrong http://www.wellingtonfund.com/blog/2007/06/06/henry-kravis-might-be-wrong/ News, Views & Purviews Fri, 03 Feb 2012 02:44:40 +0000 http://wordpress.org/?v= hourly 1 By: T http://www.wellingtonfund.com/blog/2007/06/06/henry-kravis-might-be-wrong/comment-page-1/#comment-463 T Fri, 08 Jun 2007 15:35:56 +0000 http://www.wellingtonfund.com/blog/2007/06/06/henry-kravis-might-be-wrong/#comment-463 Ya, but the 2007 deal is less levered on 3 other credit metrics... 2007 EBITDA 200,000,000 EBITDA Multiple 9 Purchase Price 1,800,000,000 Debt % 70% Equity % 30% Debt 1,260,000,000 Equity 540,000,000 Interest Rate 5.40% Annual Interest 68,040,000 Capex 25,000,000 FCF 106,960,000 Recession 4 yrs later 2007 + 4 yrs Outstanding Debt 832,000,000 Debt Retired 428,000,000 Debt Retired % 34.0% Recession EBITDA 100,000,000 Annual Interest 44,928,000 FCF 30,072,000 Leverage Metrics 2007 + 4 yrs Debt to FCF 27.67x Debt to Equity 1.54x EBITDA to Interest 2.23x Debt to EBITDA less Capex 11.09x 1980s EBITDA 200,000,000 EBITDA Multiple 6 Purchase Price 1,200,000,000 Debt % 87% Equity % 13% Debt 1,044,000,000 Equity 156,000,000 Interest Rate 8.40% Annual Interest 87,696,000 Capex 25,000,000 FCF 87,304,000 Recession 4 yrs later 1980s + 4 yrs Outstanding Debt 695,000,000 Debt Retired 349,000,000 Debt Retired % 33.4% Recession EBITDA 100,000,000 Annual Interest 58,380,000 FCF 16,620,000 Leverage Metrics 1980s + 4 yrs Debt to FCF 41.82x Debt to Equity 4.46x EBITDA to Interest 1.71x Debt to EBITDA less Capex 9.27x Ya, but the 2007 deal is less levered on 3 other credit metrics…

2007
EBITDA 200,000,000
EBITDA Multiple 9
Purchase Price 1,800,000,000
Debt % 70%
Equity % 30%

Debt 1,260,000,000
Equity 540,000,000
Interest Rate 5.40%
Annual Interest 68,040,000
Capex 25,000,000
FCF 106,960,000

Recession 4 yrs later 2007 + 4 yrs
Outstanding Debt 832,000,000
Debt Retired 428,000,000
Debt Retired % 34.0%
Recession EBITDA 100,000,000
Annual Interest 44,928,000
FCF 30,072,000

Leverage Metrics 2007 + 4 yrs
Debt to FCF 27.67x
Debt to Equity 1.54x
EBITDA to Interest 2.23x
Debt to EBITDA less Capex 11.09x

1980s
EBITDA 200,000,000
EBITDA Multiple 6
Purchase Price 1,200,000,000
Debt % 87%
Equity % 13%

Debt 1,044,000,000
Equity 156,000,000
Interest Rate 8.40%
Annual Interest 87,696,000
Capex 25,000,000
FCF 87,304,000

Recession 4 yrs later 1980s + 4 yrs
Outstanding Debt 695,000,000
Debt Retired 349,000,000
Debt Retired % 33.4%
Recession EBITDA 100,000,000
Annual Interest 58,380,000
FCF 16,620,000

Leverage Metrics 1980s + 4 yrs
Debt to FCF 41.82x
Debt to Equity 4.46x
EBITDA to Interest 1.71x
Debt to EBITDA less Capex 9.27x

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