SANTA CLAUS VALUATION                
 
     
   
   
   
Dont forget that this is not serious valuation, although the methods used are real and can be used in other financial models  
 
Asset base  
  Quantity Cost Total cost Average useful life Comment
Sleigh 1 $5 000 000 $5 000 000 25 It is the cost of pimped Santa's sleigh. They are really cool
Flying deers 6 $30 001 035 $180 006 210 15 The average price per kilo of venison in New Zealand is about $4.5 per kilo. The average weight of a deer is about 230 kg. At the same time the deer must fly really fast, otherwise Santa will not distribute all the presents on time. So we assume that Santa's deers has special flying option. The cost of option equals the value of one F-16 jet fighter aircraft, i.e. $30mn (based on the latest contract with Turkey for 30 planes)
Fance Santa's costume 1 $10 000 $10 000 5 Perhaps from Dolce&Gabbana
     
Assumptions
 
  DESCRIPTION  
    NAME   SANTA CLAUS  
Revenue generation     Bloomberg ticker SANC NP  
Playing a toy = joy = 1 table of vicodin (drug)     Incorporated North Pole  
1 toy is played 20 times     Industry   Gifts making  
Cost of 1 table of vicodin $11   Fair value   $162bn  
Playing a toy 20 times = 20 tables of vicodin $220    
       
Kids parameters      
Average cost of 1 present $200    
World population (as of 1 July, 2008), mn 6 707    
Population 2005-2008 CAGR 1.10%    
Share of kids from 0 to 14 (2009 data) 26.7%    
Share of kids who behaved good 50.0%    
     
Earth parameters      
Equatorial circumference, km 40 075  
Land area, km2 148 940 000  
Average global population dencity, per km2 44.7  
     
F-16 parameters    
Fuel fraction (weight of fuel/weight of plane) 0.31  
Plane weight, kg 12 000  
Fuel weight, kg 3 720  
1 liter of jet fuel = 0.81kg    
Fuel volume, lt 4 593  
Jet fuel cost, $/lt 0.54  
Full tanks fuel cost, $ 2 466  
Fuel burn rate, lt/min 200  
Fuel burn rate, lt/h 12 000  
Fuel burn rate, kg/min 247  
Fuel burn rate, kg/h 14 815  
Avrage speed,km/h 1470  
Average fuel consumption lt per km 8.2  
 
Assumprions 2010E 2011E 2012E 2013E 2014E 2015E  
World population 6 818 6 894 6 970 7 047 7 125 7 203  
Number of kids (number of presents) who behaved good, mn 910 920 930 940 950 961  
Distance to fly during the New Year , km 20 348 053 20 348 053 20 348 053 20 348 053 20 348 053 20 348 053  
Jet fuel consumption, lt 166 106 553 166 106 553 166 106 553 166 106 553 166 106 553 166 106 553  
Vicodin price 11 12 12 13 13 14  
Jet fuel price, $/lt 0.59 0.65 0.71 0.79 0.86 0.95    
Average cost of toy, $ 200 210 221 232 243 255  
     
FINANCIALS    
     
P&L, $mn 2010E 2011E 2012E 2013E 2014E 2015E  
Revenue 200 103 212 429 225 514 239 406 254 153 269 809    
Costs    
Fuel costs (deer food) -98 -108 -119 -131 -144 -158  
Toys cost -181 912 -193 117 -205 013 -217 642 -231 048 -245 281  
DD&A -13 -13 -14 -15 -16 -16  
Operating income 18 080 19 190 20 368 21 619 22 946 24 354  
Other gains/loss[1] -1 000 -1 050 -1 103 -1 158 -1 216 -1 276 Just an assumtion that Santa has some other additional expences
Profit before tax 17 080 18 140 19 266 20 461 21 730 23 077  
Tax Santa does not pay taxes    
Net income 17 080 18 140 19 266 20 461 21 730 23 077  
       
Balance sheet, $mn 2010E 2011E 2012E 2013E 2014E 2015E  
Assets    
PP&E 172 182 193 204 215 227  
Cash 18 071 37 251 57 609 79 217 102 151 126 492  
Total assets 18 243 37 433 57 802 79 420 102 366 126 719  
Liabilities      
Accounts payable[2] 20 21 23 24 25 27  
Total liabilities 20 21 23 24 25 27  
Equity 18 223 37 412 57 779 79 396 102 340 126 692  
 
Cash flow statement 2010E 2011E 2012E 2013E 2014E 2015E  
CFO              
EBIT 18 080 19 190 20 368 21 619 22 946 24 354  
DD&A 13 13 14 15 16 16  
Cash flows from operations 18 093 19 204 20 383 21 634 22 961 24 370  
CFI              
Maintenance capex -13 -13 -14 -15 -16 -16  
Deers and sleigh pimping capex -10 -10 -10 -11 -12 -12  
Cash flows from investing -22 -23 -25 -26 -27 -29  
CFF              
Santa does not need your money    
Cash flows for the year 18 071 19 180 20 358 21 608 22 934 24 341  
Cash at the beginning of the year 0 18 071 37 251 57 609 79 217 102 151  
Cash at the end of the year 18 071 37 251 57 609 79 217 102 151 126 492  
     
VALUATION        
     
$mn 2010E 2011E 2012E 2013E 2014E 2015E  
EBIT 18 080 19 190 20 368 21 619 22 946 24 354  
DD&A 13 13 14 15 16 16  
Unleveraged cash flows 18 093 19 204 20 383 21 634 22 961 24 370  
Net investing -22 -23 -25 -26 -27 -29  
Movements in working capital 20 -1 -1 -1 -1 -2  
Unleveraged free cash flows 18 091 19 179 20 357 21 606 22 932 24 340 197 576  
Terminal value           197 576  
WACC calculation              
Santa doesn't use leverage    
We assume that he has the same cost of equity as ExxonMobil (the largest company in the world) but with 5% liquitidy premium    
WACC 13.56%    
Long-term nominal growth rate 1.1%            
       
NPV unleveraged free cash flows, $mn 185 806    
       
Santa Claus's fair value is estimated at $185.8bn at the beginning of 2010. For comparison, ExxonModil's market capitalization at the end of 2009 was $326bn  
       
Bottom line      
Santa is priceless    
It is impossible to invest in Santa because he is not public corporation, he is a person    
     
Merry Christmas and happy New Year!!!    
 
 
 
 
 
 
 
 
 
DD&A calculation    
     
  Cost Useful life    
Sleigh $5 000 000 25    
Flying deers $180 006 210 15    
Fance Santa's costume $10 000 5    
Average weighted life   15    
     
  2010E 2011E 2012E 2013E 2014E 2015E  
DD&A (old assets), $mn 12 202 414 12 202 414 12 202 414 12 202 414 12 202 414 12 202 414  
DD&A (new assets) 622 233 1 275 577 1 961 589 2 681 901 3 438 228 4 232 373  
2010 622 233 622 233 622 233 622 233 622 233 622 233  
2011   653 344 653 344 653 344 653 344 653 344  
2012   686 012 686 012 686 012 686 012  
2013   720 312 720 312 720 312  
2014   756 328 756 328  
2015           794 144  
     
     
Maintenance CAPEX 12 824 647 13 477 991 14 164 003 14 884 315 15 640 642 16 434 787  
New CAPEX (for deers and sleigh modification) 9 501 311 9 976 376 10 475 195 10 998 955 11 548 902 12 126 347  
Total CAPEX, $mn 22 325 957 23 454 367 24 639 197 25 883 269 27 189 545 28 561 134  
     
Total DD&A, $mn 12 824 647 13 477 991 14 164 003 14 884 315 15 640 642 16 434 787  
     
PP&E (cost) 185 016 210 208 470 577 233 109 774 258 993 044 286 182 589 314 743 723  
Accumulated DD&A 12 824 647 26 302 638 40 466 640 55 350 955 70 991 598 87 426 384  
PP&E 172 191 563 182 167 939 192 643 134 203 642 089 215 190 991 227 317 338  
   
 
 
 
 
 
 
 
 
 
 
 

[1]
analyst:
Let's imagine that Santa plays poker and loose a lot of money on a regular basis
[2]
analyst:
Somebody didn't get the present