I/P Engine, Inc. v. AOL, Inc. et al

Filing 814

Declaration re 813 Reply to Response to Motion of Stephen L. Becker, Ph.D. In Further Support Of Plaintiff I/P Engine, Inc.S Motion For An Award Of Prejudgment Interest, Post-Judgment Interest And Damages For Defendants Continuing Infringement by I/P Engine, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Sherwood, Jeffrey)

Exhibit
 1
I/P
 Engine,
 Inc.
 v.
 Google
 Inc.,
 et
 al.
Weighted
 Average
 Cost
 Of
 Capital
 (WACC)
 for
 Vringo,
 Inc.
Average

3Q12

2Q12

1Q12

4Q11

(a)
(b)
(c)
(d)
(e)

Risk
 Free
Beta
Market
 Premium
Size
 Premium
Cost
 of
 Equity

2.59%
2.21
6.62%
3.89%
21.11%

2.42%
2.21
6.62%
3.89%
20.94%

2.38%
2.21
6.62%
3.89%
20.90%

3.00%
2.21
6.62%
3.89%
21.52%

2.57%
2.21
6.62%
3.89%
21.09%

(f)
(g)
(h)
(i)

Equity
 ($
 Millions)
Debt
 ($
 Millions)
Tax
 Rate
Cost
 of
 Debt

68
1
0.0%
18.0%

194
0.0
0.0%
18.0%

35
0.2
0.0%
18.0%

21
0.2
0.0%
18.0%

22
3.2
0.0%
18.0%

21.1%

20.9%

20.9%

21.5%

20.7%

(j) Weighted
 Average
 Cost
 of
 Capital

Notes:
(a)
 Risk
 free
 rates:
 Daily
 Treasury
 Yield
 Curve
 Rates
 (last
 day
 of
 the
 period),
 Resource
 Center,
 US
 Department
 of
 the
 Treasury,
 at

http://www.treasury.gov/resource-­‐center/data-­‐chart-­‐center/interest-­‐rates/Pages/TextView.aspx?data=yield;
 accessed
 on

12/4/2012.
(b)
 Beta
 of
 Vringo,
 Inc.
 as
 of
 12/04/2012;

 YahooFinance.
(c)
 Market
 premium
 rates:
 Long-­‐horizon
 expected
 equity
 risk
 premium
 (historical)
 -­‐
 large
 company
 stock
 total
 returns
 minus

long-­‐term
 government
 bond
 income
 returns;
 Ibbotson
 SBBI
 2012
 Valuation
 Yearbook
 (Morningstar).
(d)
 Size
 premium:
 Micro-­‐Cap
 (Market
 Cap
 from
 $1
 to
 $422
 Millions);
 Ibbotson
 SBBI
 2012
 Valuation
 Yearbook
 (Morningstar).
(e)
 Calculated
 as(a)+(b)*(c)
 +
 (d)
(f)
 Equity:
 Market
 Cap
 of
 Vringo,
 Inc.
 -­‐
 shares
 outstanding
 *
 stock
 price
 of
 last
 day
 of
 period;
 ThompsonOne.
(g)
 Debt:
 Long
 term
 debt,
 short
 term
 debt
 and
 current
 portion
 of
 long
 term
 debt
 for
 Vringo,
 Inc.
 for
 the
 correspondent
 period;

ThompsonOne.
(h)
 Tax
 rate:
 Expected
 effective
 tax
 rate
 for
 Vringo,
 Inc.;
 10K
 and
 10Q
 filings
 for
 the
 correspondent
 period.
(i)
 Cost
 of
 debt:
 Effective
 interest
 rate
 for
 Loan
 Modification
 Agreement
 as
 of
 December
 2009
 (Vringo
 10-­‐K,
 2011).
(j)
 Calculated
 as
 (e)*(f)/[(f)+(g)]
 +
 [1-­‐(h)]*(i)*(g)/[(f)+(g)]