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Strategies & Market Trends : Classic TA Workplace

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To: Paul Shread who wrote (37850)	5/3/2002 11:09:53 AM
From: reaper	Read Replies (2) of 209892

Paul -- ORCL is a heck of a cash generator. $6 billion cash on the balance sheet right now, small amount of debt (I think less than $500mm). Cash from operations (so including working cap changes) during the bubble years (May 99 - May 01 fiscal years) was about $2 billion a year -- $1.8 billion in 1999, $2.9 billion in 2000 and $2.2 billion in 2001. They'll also generate over $2 billion this year (May 02) as they work down working capital balances. Pre-bubble cash flow (1996-1998) was about $1 billion a year. Capex is about $300mm annually. Which leaves all the rest as "free" cash flow to either buy back stock (which they unfortunately did a LOT of, at much higher prices) or just pile up on the balance sheet. In a post-bubble world my best guesstimate is that ORCL could do about $1 billion a year of FREE cash; in a weak moment you might get me to pay 30x that number (so $30 billion market cap, or about another third lower from here) but that's about it. Cheers

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