Oracle Corporation et al v. SAP AG et al

Filing 1058

Declaration of Lisa Chin in Support of 1057 Opposition/Response to Motion for JMOL or New Trial filed byOracle International Corporation. (Attachments: # 1 Exhibit A part 1, # 2 Exhibit A part 2, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K, # 13 Exhibit L, # 14 Exhibit M, # 15 Exhibit N, # 16 Exhibit O, # 17 Exhibit P, # 18 Exhibit Q, # 19 Exhibit R, # 20 Exhibit S, # 21 Exhibit T, # 22 Exhibit U, # 23 Exhibit V, # 24 Exhibit W, # 25 Exhibit X, # 26 Exhibit Y, # 27 Exhibit Z, # 28 Exhibit AA, # 29 Exhibit BB, # 30 Exhibit CC, # 31 Exhibit DD, # 32 Exhibit EE, # 33 Exhibit FF, # 34 Exhibit GG, # 35 Exhibit HH, # 36 Exhibit II, # 37 Exhibit JJ, # 38 Exhibit KK, # 39 Exhibit LL, # 40 Exhibit MM, # 41 Exhibit NN, # 42 Exhibit OO, # 43 Exhibit PP, # 44 Exhibit QQ, # 45 Exhibit RR, # 46 Exhibit SS, # 47 Exhibit TT, # 48 Exhibit UU, # 49 Exhibit VV)(Related document(s) 1057 ) (Howard, Geoffrey) (Filed on 4/8/2011)

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Oracle Corporation et al v. SAP AG et al Doc. 1058 Att. 18 EXHIBIT Q ORACLE CORPORATION ESTIMATION OF THE FAIR VALUE OF CERTAIN ASSETS AND LIABILITIES OF PEOPLESOFT, INC. AS OF DECEMBER 28, 2004 Highly Confidential Information - Attorneys' Eyes Only UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case #: 07-cv-01658-PJH PLNTF EXHIBIT Date tted: J Z j By: I Nic ole Heuerman, Deputy Clerk ORCL00313160 N 0lfJJt.3 Mr. Tom Olinger Letter Report June 23, 2005 WACC where: Kd * (d%) + Kp * (p%) + Ke * (e%) l<d d% Kp p% Ke e% After-tax rate of return on debt capital; Debt capital as a percentage ofthe sum of the debt. preferred and common equity capital ("Total Invested Capital"); Rate ofrewm on preferred equity capital; Percentage of preferred equity capital to the Total Invested Capital; Rate of rewm on common equity capital; and Common equity capital as a percentage of the Total Invested Capital. We estimated the WACC using a Capital Asset Pricing Model ("CAPM"). This method is discussed in detail in Appendix 1. Conclusion Based on our analysis, we estimated typical investors would require a WACC of lUf/O for an investment in the Company's indusny. We also considered the internal rate of return ("IRR") that returns the allocable purchase consideration using the forecasts in Exhibit 10.0 and a net income exit multiple of 30.Ox in 2014. The IRR was approximately 12.()%. Therefore, we used 12.0% as the overall discount rate for the Company. In detennining the appropriate discount rates 10 use in valuing each of the individual intangible assets, we adjusted the discount rate of 12.0% giving consideration to specific risk factors of each asset. For the purposes of our analysis, we applied a discount rate of lO'(flo to the Existing Technology to reflect the lack oftectmological risk and market risk associated with achieving the forecasted sales attributable to the technology as PeopleSoft applications were commercially available and deployed as ofthe Valuation Date. Consistent with guidance in the AICPA IPR&D Practice Aid, we applied discount rates higher than the WACC to the In-Process Technology (see Table I) based upon the additional risk related to the product's development and success as well as the product's stage of completion as ofthe Valuation Date. A discount rate of 10.0% was applied to the Patents / Core Technology to reflect the risk ofthe asset revenues derived from the Existing and In..Process Technology and Maintenance Agreements and Related Customer Relationships. We applied a discount rate of 8.0% to Consulting Contracts as the forecast reflects existing contract revenue with no expected renewals over a relatively short forecast horizon. A discount rate of 10.0% was also applied to the Maintenance Agreements and Related Customer Relationships, Customer Relationships, and Trade Names'Trademarks to reflect the lower risk of the assets as they were existing as of the Valuation Date. 14

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