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
 2
I/P
 Engine,
 Inc.
 v.
 Google
 Inc.,
 et
 al.
Weighted
 Average
 Cost
 Of
 Capital
 (WACC)
 for
 Google,
 Inc.
Average
(a)
(b)
(c)
(d)

Risk
 Free
Beta
Market
 Premium
Cost
 of
 equity

(e)
(f)
(g)
(h)

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

(i) Weighted
 Average
 Cost
 of
 Capital

3Q12

2Q12

1Q12

4Q11

2.59%
1.08
6.62%
9.74%

2.42%
1.08
6.62%
9.57%

2.38%
1.08
6.62%
9.53%

3.00%
1.08
6.62%
10.15%

2.57%
1.08
6.62%
9.72%

214,094
5,518
20.30%
2.33%

247,892
6,206
22.30%
2.33%

189,650
6,205
19.40%
2.33%

208,984
5,455
18.50%
2.33%

209,850
4,204
21.00%
2.33%

9.54%

9.38%

9.29%

9.94%

9.56%

Notes:
(a)
 Risk
 free
 rates:
 Daily
 Treasury
 Yield
 Curve
 Rates
 (last
 day
 of
 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
 Google
 Inc.
 as
 of
 12/04/2012;

 ThompsonOne.
(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)
 Calculated
 as
 (a)
 +
 (b)*(c)
(e)
 Equity:
 Market
 Cap
 of
 Google
 Inc.
 -­‐
 shares
 outstanding
 *
 stock
 price
 of
 last
 day
 of
 period;
 ThompsonOne.
(f)
 Debt:
 Long
 term
 debt,
 short
 term
 debt
 and
 current
 portion
 of
 long
 term
 debt
 for
 Google
 Inc.
 for
 the
 correspondent
 period;
 ThompsonOne.
(g)
 Tax
 rate:
 Expected
 effective
 tax
 rate
 for
 Google
 Inc;
 10K
 and
 10Q
 filings
 for
 the
 correspondent
 period.
(h)
 Cost
 of
 debt:
 calculated
 based
 on
 the
 interest
 rates
 for
 various
 long
 term
 debt
 instruments;
 10K
 and
 10Q
 filings
 for
 the
 correspondent

period.
(i)
 Calculated
 as
 (d)*(e)/[(e)+(f)]
 +
 [1-­‐(g)]*(h)*(f)/[(e)+(f)]