Input cell

Operating Information
All dollar values in millions
Number of Prime Members
Prime Membership Charge
Incremental Revenue/ Member (Prime versus Regular)
Pre-tax Operating Margin (pre-shipping cost)
Do you expect this margin to change over time?
If yes, enter your target operating margin
Operating Margin used as steady state
Prime Membership Service (non-Shipping) Cost/Member
Prime Membership Shipping Costs (Total)
Effective tax rate (current)
Effective tax rate (steady state)
Allocated Costs
Technology and Content Costs
Percent of G&A/Technology Costs attributable to Prime
Existing User Data
Growth rate in Annual incremental revenues/Member (Yrs 1-5)
Lifetime of a Prime Member
Annual Renewal Probability
Growth rate in Membership Charge
Growth rate in Service Cost/Member (Yrs 1-5)
Will Shipping Costs grow with revenues?
If no, enter the growth rate in shipping costs (Yrs 1-5)
Growth rate in Shipping Costs used in valuation

New User Data

Cost of acquiring new user used in valuation
Growth rate in # Members (Years 1-5)
Growth rate in # Members (Years 6-10)

G&A Data
Growth rate approach for G&A
Growth rate in corporate expenses for next 10 years

Macroeconomic Data
Risk free Rate
Inflation Rate
Cost of capital for existing users (input choice)
Cost of capital (existing users)
Cost of capital for new users (input choice)
Cost of capital (new users)
 Computed Value

Most Recent Prior year

85.00 60.00
$95.78 $99.00
$600.00 $600.00
12.11%
Yes
13.00%
13.00%
$10.00
NA $7,191.00
20.00%
25.00%

$16,085.00
10.00%

10.00%
20.00
96%
2.00%
5.00%
No
3.00%
3.00% Do not input

$100.00 Do not input

15%
5%

A4. Direct Input

4.00% Do not input

2.25%
1.50%
B3. Median of US companies (8%)
8.00% Do not input
B3. Median of US companies (8%)
8.00%
 Notes/Comments

Number of users , with growth over last year

Prime Membership Annual Charge (Monthly is higher)
Annual Revenue/Prime Member - Revenue/Non-prime Customer
Operating Margin in most recent period, prior to shipping subsidy
If you say no, operating margin will be left at current level
If yes, enter target operating margin
Operating Margin used in the valuation
Annual Incremental Cost of Servicing Prime Members, not including shipping
Subsidized Shipping Cost (assumed to be entirely Prime related)
Effective tax rate in most recent year
Effective tax rate in steady state

This is the portion of cechnology & content costs that are attributable to Prime
Members.

Growth rate in Annual Incremental Revenue/ Prime Member Years 1-5).

A guess, but given renewal rates, it should be very high
Annual renewal probability (assumed to be constant over time)
Annual Growth Rate in Prime Membership Charge/ Member
Annual Growth Rate in Service Costs/ Member
If set to yes, this will grow at same rate as incremental revenues
If no on prior question, enter this number.
Number used as growth rate in shipping costs

Cost of acquiring a new Prime Member (assumed to be in Marketing costs)

Growth rate in number of members from years 1-5
Growth rate in number of members from years 6-10

Choice for growth rate in G&A/ Technology Costs

If yes, you have to input the cost in B29

Valuation Output Summary

Category
Existing Members
New Members
Corporate Expenses
Value of Amazon Prime
 Corporate Expense Growth
A1. Grow at same rate as total users 6.91%
A2. Grow at inflation rate 1.50%
A3. Grow at risk free rate 2.25%
A4. Direct Input 4.00%

Cost of Capital
B1. Lowest decile of US companies 7.00%
b2. 25th percentile of US companies (7.5%) 7.50%
B3. Median of US companies (8%) 8.00%
B4. 75th percentile of US companies (10%) 10.00%
B5. Ninth decile of US companies (12%) 12.00%
B6. Direct input 10.50%
Value per user Aggregate Value
$ 486.29 $41,335
$ 386.29 $52,793
$32,846
$61,282
Value of Existing Users
Base Year 1 2
Life Indicator 1 1
Membership Survival 1.0000 0.9600 0.9216
Growth rate in incremental revenue 10.00% 10.00%
Incremental Revenue/Member $ 600.00 $ 660.00 $ 726.00
Operating Margin (pre-shipping) 12.11% 12.29% 12.46%
Operating Income on Incremental Sales $ 72.65 $81.09 $90.49
Prime Membership Charge $ 95.78 $ 97.69 $ 99.65
Revenue/Prime Member $ 168.42 $ 178.78 $ 190.14
Service Cost/ Prime Member $ 10.00 $ 10.50 $ 11.03
Shipping Cost/ Prime Member $ 119.85 $123.45 $127.15
Operating Profit/Loss per Member $ 38.57 $ 44.83 $ 51.96
Tax rate 20.00% 20.500% 21.000%
After-tax Operating Income $30.86 $34.22 $37.83
Present Value (at Cost of Capital) $31.68 $32.44
Life of user = 20.00
Value per Prime Member = $486.29
Number of Prime Members = 85.00
Value of Prime Members = $ 41,334.69

Value of New Users

Cost of acquiring new Member = $ 100.00
Value per new user (in today's $) = $386.29

Base Year 1 2
Total Prime Members 85.00 94.35 106.64
New Members 0.00 12.75 16.07
Value per new Member $386.29 $392.08 $397.97
Value added by new Members $4,999.08 $6,393.32
Terminal Value (New Members)
Present Value $ 4,628.78 $ 5,481.25
Value Added by New Users $ 52,792.78

Value Drag of Corporate Expenses (Cost)

Total Media & Content Costs $ 16,085.00
Amazon Prime Share of Expenses 10.00%
Corporate Expenses $1,608.50 $1,785.44 $2,018.02
After-tax Corporate Expenses $ 1,419.42 $ 1,594.24
Terminal Value (Corporate Exp)
PV of Corporate Expenses $1,314.28 $1,366.80
Value Drag of Corporate Expenses $32,845.63
Valuing Amazon Prime
Value of Existing Members $41,334.69
Value of New Members $52,792.78
- PV of Corporate Expenses $32,845.63
Value of Prime Membership $61,281.83
 3 4 5 6 7 8
1 1 1 1 1 1
0.8847 0.8493 0.8154 0.7828 0.7514 0.7214
10.00% 10.00% 10.00% 10.00% 7.88% 5.75%
$ 798.60 $ 878.46 $ 966.31 $ 1,062.94 $ 1,146.64 $ 1,212.57
12.64% 12.82% 13.00% 13.00% 13.00% 13.00%
$100.97 $112.63 $125.62 $138.18 $149.06 $157.63
$ 101.64 $ 103.67 $ 105.74 $ 107.86 $ 110.02 $ 112.22
$ 202.61 $ 216.30 $ 231.36 $ 246.04 $ 259.08 $ 269.85
$ 11.58 $ 12.16 $ 12.76 $ 12.95 $ 13.15 $ 13.35
$130.96 $134.89 $138.94 $143.11 $145.25 $147.43
$ 60.07 $ 69.26 $ 79.66 $ 89.98 $ 100.68 $ 109.07
21.500% 22.000% 22.500% 23.000% 23.500% 24.000%
$41.72 $45.88 $50.34 $54.23 $57.88 $59.80
$33.12 $33.72 $34.26 $34.18 $33.77 $32.31

3 4 5 6 7 8
120.78 136.83 155.01 157.74 159.77 161.78
18.41 20.88 23.66 8.93 8.33 8.41
$403.94 $409.99 $416.14 $422.39 $428.72 $435.15
$7,434.80 $8,559.90 $9,844.28 $3,773.32 $3,572.91 $3,657.50

$ 5,901.98 $ 6,291.78 $ 6,699.85 $ 2,377.83 $ 2,084.76 $ 1,976.03

$2,285.61 $2,589.27 $2,933.35 $2,985.07 $3,023.37 $3,061.49

$ 1,794.20 $ 2,019.63 $ 2,273.35 $ 2,298.50 $ 2,312.88 $ 2,326.73

$1,424.30 $1,484.49 $1,547.20 $1,448.45 $1,349.54 $1,257.06

 9 10 11 12 13 14 15
1 1 1 1 1 1 1
0.6925 0.6648 0.6382 0.6127 0.5882 0.5647 0.5421
3.63% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
$ 1,256.53 $ 1,275.38 $ 1,294.51 $ 1,313.93 $ 1,333.64 $ 1,353.64 $ 1,373.94
13.00% 13.00% 13.00% 13.00% 13.00% 13.00% 13.00%
$163.35 $165.80 $168.29 $170.81 $173.37 $175.97 $178.61
$ 114.46 $ 116.75 $ 119.09 $ 121.47 $ 123.90 $ 126.37 $ 128.90
$ 277.81 $ 282.55 $ 287.37 $ 292.28 $ 297.27 $ 302.35 $ 307.51
$ 13.55 $ 13.75 $ 13.96 $ 14.16 $ 14.38 $ 14.59 $ 14.81
$149.64 $151.89 $154.17 $156.48 $158.83 $161.21 $163.63
$ 114.62 $ 116.91 $ 119.25 $ 121.63 $ 124.07 $ 126.55 $ 129.08
24.500% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
$59.93 $58.30 $57.08 $55.89 $54.73 $53.59 $52.48
$29.98 $27.00 $24.48 $22.20 $20.12 $18.25 $16.54

9 10
163.82 165.88
8.51 8.62
$441.68 $448.31
$3,758.42 $3,862.82
$29,536.54
$ 1,880.15 $ 15,470.37

$3,100.06 $3,139.11
$ 2,340.54 $ 2,354.33
$ 41,866.19
$1,170.86 $20,482.66
 16 17 18 19 20
1 1 1 1 1
0.5204 0.4996 0.4796 0.4604 0.4420
1.50% 1.50% 1.50% 1.50% 1.50%
$ 1,394.55 $ 1,415.47 $ 1,436.70 $ 1,458.26 $ 1,480.13
13.00% 13.00% 13.00% 13.00% 13.00%
$181.29 $184.01 $186.77 $189.57 $192.42
$ 131.48 $ 134.11 $ 136.79 $ 139.53 $ 142.32
$ 312.77 $ 318.12 $ 323.56 $ 329.10 $ 334.73
$ 15.03 $ 15.26 $ 15.49 $ 15.72 $ 15.96
$166.08 $168.57 $171.10 $173.67 $176.27
$ 131.66 $ 134.29 $ 136.97 $ 139.71 $ 142.51
25.00% 25.00% 25.00% 25.00% 25.00%
$51.39 $50.32 $49.27 $48.24 $47.24
$15.00 $13.60 $12.33 $11.18 $10.14
Yes or No Cost of capital
Yes Lowest decile of US companies (7%)
No 25th percentile of US companies (7.5%)
Median of US companies (8%)
75th percentile of US companies (10%)
Ninth decile of US companies (12%)
Direct input
 User Value Asset value Company Value Equity Value
Existing Users $ 41,334.69
New Users $ 52,792.78
User Value $ 94,127.47 $ 94,127.47
- Corporate Expense Drag $ 32,845.63
Uber Operating Assets $ 126,973.10 $ 126,973.10
+ Cash Err:509
+ Didi Cross Holding Err:509
Uber Firm Value Err:509 Err:509
- Debt Err:509
Uber's Equity Value Err:509