Assumptions:
Trips/Member/Month 4
Miles/trip 22
Hours/trip 4
Attrition Rate 15%
Utilization rate 40%
Year 1 Year 2 Year 3 Year 4 Year 5
New members 440 482 180.4 408.2 193
Revenue assumptions:
Application fee / new member 25
Annual fees (per avg member) 75
Per mile charge 0.4
Per hour charge 5.5
Security deposit / member 300
Interest rate on sec. deposit 4%
Output:
Year 1 Year 2 Year 3 Year 4 Year 5
Net income before tax $ 70,253 $ 498,417 $ 725,917 $ 904,643 $ 1,053,688
May '00 Sept Actual
Attrition rate 15.0% 28.7%
Avg customer life (yrs) 6.67 3.48
LTV $4,377.01 $812.36
CAC $22.73 $29.44
LTV/CAC 192.58847732 27.597960349
Cost assumptions:
Variable cost (per car per year):
Lease cost 4400
Access equipment 500
Fuel 1080
Insurance 1700
Maintenance 400
Parking 600
Fixed costs - corporate level (per year): Year 1 Year 2 Year 3
Corporate insurance 800
Reservation system 2895 3160 12000
Administration 100000
Benefits 20000
Office space (starting Year 3) 5000
Office equip. & supplies 1000
Phone 1200 1800 1800
Fixed costs - Boston office
Billing (member/year) 24
Administration (local) 24000
Benefits 4800 24780 24780
Office space (starting Year 3) 5000
Office equipment & supply 1000
Marketing 10000 12000 12000
Background checks (per new member) 20
Year 4 Year 5
6000 7000
1800 2500
24780 24780
12000 12000
Year 1 Year 2 Year 3 Year 4
Membership:
Beginning members 0 440 856 908
Attrition 0 66 128.4 136.2
New members 440 482 180.4 408.2
Ending members 440 856 908 1180
Avg # of members 220 648 882 1044
Avg security balance $ 66,000 $ 194,400 $ 264,600 $ 313,200
Cars:
Beginning cars 0 24 48 50
Ending cars 24 48 50 66
Avg # of cars 12 36 49 58
Revenues:
Application fees $ 11,000 $ 12,050 $ 4,510 $ 10,205
Annual fees 16,500 48,600 66,150 78,300
Mileage charges 92,928 273,715 372,557 440,986
Hourly charges 232,320 684,288 931,392 1,102,464
Interest income 2,640 7,776 10,584 12,528
Total revenue $ 355,388 $ 1,026,429 $ 1,385,193 $ 1,644,483
Variable costs
Lease cost $ 52,800 $ 158,400 $ 215,600 $ 255,200
Access equipment 6,000 18,000 24,500 29,000
Fuel 12,960 38,880 52,920 62,640
Insurance 20,400 61,200 83,300 98,600
Maintenance 4,800 14,400 19,600 23,200
Parking 7,200 21,600 29,400 34,800
Total variable cost $ 104,160 $ 312,480 $ 425,320 $ 503,440
Fixed costs - corporate level
Corporate insurance $ 800 $ 800 $ 800 $ 800
Reservation system 2,895 3,160 12,000 6,000
Administration 100,000 100,000 100,000 100,000
Benefits 20,000 20,000 20,000 20,000
Office space (starting Year 3) - - 5,000 5,000
Office equip. & supplies 1,000 1,000 1,000 1,000
Phone 1,200 1,800 1,800 1,800
Total corporate overhead $ 125,895 $ 126,760 $ 140,600 $ 134,600
Fixed costs - Boston office
Billing (member/year) $ 5,280 $ 15,552 $ 21,168 $ 25,056
Administration (local) 24,000 24,000 24,000 24,000
Benefits 4,800 24,780 24,780 24,780
Office space - - 5,000 5,000
Office equipment & supply 1,000 1,000 1,000 1,000
Telephone and Datalines 1,200 1,800 1,800 1,800
Marketing 10,000 12,000 12,000 12,000
Background checks 8,800 9,640 3,608 8,164
Total Boston overhead $ 55,080 $ 88,772 $ 93,356 $ 101,800
Total overhead costs $ 180,975 $ 215,532 $ 233,956 $ 236,400
Net income before tax $ 70,253 $ 498,417 $ 725,917 $ 904,643
Year 5
1180
177
193
1196
1188
$ 356,400
66
66
66 Have enough cars to target the utilization rate given the avg number of members (note that a car has 30 days *
$ 4,825
89,100
501,811
1,254,528
14,256
$ 1,864,520
$ 290,400
33,000
71,280
112,200
26,400
39,600
$ 572,880
$ 800
7,000
100,000
20,000
5,000
1,000
2,500
$ 136,300
$ 28,512
24,000
24,780
5,000
1,000
2,500
12,000
3,860
$ 101,652
$ 237,952
$ 1,053,688
rs (note that a car has 30 days * 24 hrs of total available hours)
Car Cost / Member (Monthly)
May '00 Actual
Car Cost/ Month $723.33 $778.17
Members / Car 18.0 11.6
Car Cost / Member $40.19 $67.14
Contribution margin / Member (Monthly)
May '00 Actual
$90.26 $26.37
Contribution margin / Member (Annual)
May '00 Actual
$1,083.18 $316.44
Revenues / Member (Monthly)
May '00 Actual
Monthly Fee $6.25 $6.25
Usage
#uses 4 1.98
Hours/use 4 9.62
$/hour $5.50 $3.84
Miles/use 22 48.77
$/miles $0.40 $0.14
Total usage $123.20 $86.35
Interest $1.00 $0.91
Revenues / member $130.45 $93.51
Cost Per Car
May '00 Actual September Data
Annual Monthly Annual Monthly
Lease $4,400.0 $366.67 $4,800.0 $400.00 Actual data from p.11.
Access $500.0 $41.67 $500.0 $41.67 Assumed no difference betw
Insurance $1,700.0 $141.67 $1,700.0 $141.67
Parking $600.0 $50.00 $750.0 $62.50 Actual data from p.11.
Maintenance $400.0 $33.33 $400.0 $33.33
Fuel $1,080.0 $90.00 $1,188.0 $99.00 Actual data from p.11.
Total $8,680.0 $723.33 $9,338.0 $778.17
Members per Car
May '00 Actual
Trips/Member/Month 4
Hours/Trip 4
Hours/Member/Month 16.00 19.00 All actuals from Exhibit 8b
Utilization 40.0% 30.6%
Hours Used/Car/Month 288 220.3 220.250569476
Members/Car 18.0 11.6
All actuals from Exhibit 8b 169.6
Actual data from p.11.
Assumed no difference between actual and forecast if not mentioned.
Actual data from p.11.
Actual data from p.11.
Daily use breakdown (Sept actuals, Exhibit 8b)
Margin / Daily Use
-$11.06
Daily Use Margin / Member
(Monthly)
Daily Uses / Member /
-$7.63 Month
0.69
Hourly use breakdown (Sept actuals, Exhibit 8b)
Margin / Hourly Use
$20.90
Hourly Use Margin /
Member (Monthly)
Hourly Uses / Member /
$26.86 Month
1.29
NB: The margins here are purely on usage (i.e., excludes revenue from membership fees and interest)
Revenues / Daily Use
$45.45
Car cost / Daily Use Monthly Car Cost
$56.51 778
Daily Uses / Month / Car Hours / Daily Use
13.77 16
Capacity hours of car
utilization / Month
220.32
Revenues / Hourly Use
$42.78
Car cost / Hourly Use Monthly Car Cost
$21.89 778
Hourly Uses / Month / Car Hours / Hourly Use
35.55 6.2
Capacity hours of car
utilization / Month
220.32
Valuation Multiples
$/share EPS P/E
Ryder $19.75 $1.49 13.26
Dollar $15.38 $3.18 4.84
Avis $27.44 $3.19 8.60
Average 8.90
Top-down Valuation
CITY-BASED Dec 99 May 00
Boston Revenue Year 5 1,216,486 1,864,520
14 x Boston Revenue 17,030,804 26,103,280 14 cities (bottom p.10), all assumed to be like Boston.
Valuation: 2x Revenue multiple NB: 2x revenue is typical M&A multiple
Boston 2,432,972 3,729,040
14 x Boston 34,061,608 52,206,560
Boston Net income before tax 616,914 1,189,988
14 x Boston NIBT 8,636,796 16,659,832
Valuation: NIBT x (1-35%) x Average P/E
Boston 3,567,964 6,882,377
14 x Boston 49,951,500 96,353,277
PEOPLE- European Boston Estimate
BASED Estimates (10k/2.9M)
Penetration 0.010% 0.040% 0.034%
Population 65,900,000 6,590 26,360 22,724
Revenue / Person (Dec 99) 1,024 6,748,016 26,992,063 23,269,020
Revenue / Person (May 00) 1,569 10,342,750 41,370,999 35,664,655
NIBT / Person (Dec 99) 519 3,422,107 13,688,428 11,800,369
NIBT / Person (May 00) 1,002 6,601,028 26,404,111 22,762,165
NIBT x (1-35%) x Average P/E
Valuation (Dec 99) 19,791,990 79,167,962 68,248,243
Valuation (May 00) 38,177,495 152,709,980 131,646,534
all assumed to be like Boston.
l M&A multiple
European penetration on bottom p3 (0.01%) and top p.4 (0.04%), Boston on bottom of p.10 and Exhibit 2
Total population from top 20 US markets in Exhibit 2
Calculated at end of year 5
idem
Calculated at end of year 5
idem
