Google - Investment Analysis & Mgmt 120213 10pm v4 final

1. NASDAQ: GOOG Richard Chan - richchan@scarletmail.rutgers.edu Stan Ivaciov - sivaciov@gmail.com Sarah Jeffers - sarahavisjeffers@gmail.com Haiyan Zhang - haiyanzhang@gmail.com 12/4/13

2. Agenda • Company Profile • Business Analysis • Valuation • Financial Analysis • Risks Analysis as of 11/11/13

3. Company Profile US Technology Company with a global presence  US comprises 46% of company’s total revenue Four Business Segments     Search Advertising Operating Systems and Platforms Enterprise Active Venture Capital Arm

4. Company Profile - Business Segments Search Advertising • Dominant Industry Player • Google Now, Google Knowledge Graph • 95% of company’s total revenue • Advertisers pay Google per click • AdWords, AdSense,YouTube Operating Systems and Platforms Enterprise • Free services that protect advertising revenue • Social media, Chrome, An droid • Geared toward end user collaboration • Google Docs, Google Earth, Google Calendar, Gmail, Google Groups

5. Company Profile - Venture Capital Google Glass Driverless Cars Anti-Aging Technology

6. Business Analysis - Industry and Market • Demand for Online Video • Google, led by YouTube, accounts for nearly 88% of the 189 million U.S. viewers registered by video sites in September 2013 • Smartphone and Tablet Market • Google CEO Larry Page: “6% of traffic for the Google-owned video service came from mobile devices in 2011, but the figure is now 41%”.

7. Business Analysis – Search Engine Sources: Netmarketshare, Market Watch, webpronews, clickz, OneStat, and Websidestory

8. Business Analysis – Products and Services

9. Business Analysis – R&D/Investments • Robust R&D capacity and high investment • Google spent 13.5% of its total revenue in research and development in 2012 Google made many mergers and acquisitions in the past several years •

10. Business Analysis – Brand Value Source: BrandZ 2013

11. Valuation - Summary Target Price $ 917.73 Google Yahoo! Microsoft Time Warner Baidu.com Oracle IBM Apple News Corp Nokia Potential Change -9.2% Last Price Riskiness $ 1,010.59 Medium Cash Flow Comparative Conclusion Analysis (rating, weight, potential) 75% 25% -2% -31% 100% -9% Important Statistics & Analysis WACC 9.6% Div Yield Cost of Debt 2.3% ROIC Cost of Equity 10.0% PEG Ratio Implied Debt Cost -4.9% Market Cap Risk Free Rate 2.6% Reinvest Interest Coverage n/a Beta $ 0.0% 3.5% 7.49 335,824 28% 1 Competitors GOOG YHOO MSFT TWX BIDU ORCL IBM AAPL NWSA NOK -9.2% -65.6% 14.0% 68.8% -45.3% 10.4% 1.4% 83.3% -2.8% -66.6% Financial Stats Revenue Growth EBITDA Margin EBIT Margin Cash Flow Margin Taxes Debt / Equity Return On Equity Competitors GOOG 13.5% 25.1% 29.9% 36.7% 22.4% 31.3% 21.0% 23.6% 25.0% 22.5% 12.8% 1.6% 4.5% 2.5% Multiple Stats Revenue (x) EBITDA (x) EBIT (x) Cash Flow (x) Book Value (x) PE Ratio (x) Competitors GOOG 4.74 5.85 14.65 19.85 14.86 22.98 15.66 30.20 0.99 0.87 130.34 39.49

12. Valuation – Multistage DCF Business P&L Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 21,796 $ 23,651 $ 29,321 $ 37,905 $ 50,175 31.3% 8.5% 24.0% 29.3% 32.4% $ 58,002 $ 64,789 $ 68,579 $ 72,008 $ 75,608 $ 79,388 $ 83,358 $ 87,526 $ 91,902 $ 96,497 15.6% 11.7% 5.9% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% - COGS % of revenue $ 8,622 $ 8,844 $ 10,417 $ 13,188 $ 20,634 39.6% 37.4% 35.5% 34.8% 41.1% $ 23,853 $ 26,644 $ 28,202 $ 29,612 $ 31,093 $ 32,648 $ 34,280 $ 35,994 $ 37,794 $ 39,684 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% Gross Profit % of revenue $ 13,174 $ 14,806 $ 18,904 $ 24,717 $ 29,541 60.4% 62.6% 64.5% 65.2% 58.9% $ 34,149 $ 38,145 $ 40,376 $ 42,395 $ 44,515 $ 46,741 $ 49,078 $ 51,532 $ 54,108 $ 56,814 58.9% 58.9% 58.9% 58.9% 58.9% 58.9% 58.9% 58.9% 58.9% 58.9% - Operating Exp % of revenue $ 6,816 $ 6,768 $ 8,523 $ 12,475 $ 16,781 31.3% 28.6% 29.1% 32.9% 33.4% $ 18,017 $ 20,125 $ 21,302 $ 22,367 $ 23,486 $ 24,660 $ 25,893 $ 27,188 $ 28,547 $ 29,974 31.1% 31.1% 31.1% 31.1% 31.1% 31.1% 31.1% 31.1% 31.1% 31.1% - SG&A (Op Ex) % of revenue $ 5,316 $ 5,244 $ 7,127 $ 10,464 $ 14,769 24.4% 22.2% 24.3% 27.6% 29.4% $ 14,593 $ 16,256 $ 17,159 $ 17,968 $ 18,814 $ 19,700 $ 20,628 $ 21,599 $ 22,615 $ 23,680 25.2% 25.1% 25.0% 25.0% 24.9% 24.8% 24.7% 24.7% 24.6% 24.5% EBITDA % of revenue $ 7,858 $ 9,563 $ 11,777 $ 14,253 $ 14,772 36.1% 40.4% 40.2% 37.6% 29.4% $ 19,557 $ 21,889 $ 23,217 $ 24,428 $ 25,701 $ 27,041 $ 28,450 $ 29,933 $ 31,493 $ 33,134 33.7% 33.8% 33.9% 33.9% 34.0% 34.1% 34.1% 34.2% 34.3% 34.3% - D & A (Op Ex) % of revenue $ 1,500 $ 1,524 $ 1,396 $ 1,851 $ 2,962 6.9% 6.4% 4.8% 4.9% 5.9% $ EBIT (oper profits) % of revenue $ 6,358 $ 8,038 $ 10,381 $ 12,242 $ 12,760 29.2% 34.0% 35.4% 32.3% 25.4% $ 16,133 $ 18,020 $ 19,074 $ 20,028 $ 21,029 $ 22,081 $ 23,185 $ 24,344 $ 25,561 $ 26,839 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% 27.8% - Taxes % of EBIT $ 1,627 $ 1,861 $ 2,291 $ 2,589 $ 2,598 25.6% 23.1% 22.1% 21.1% 20.4% $ NOPAT % of revenue $ 4,732 $ 6,178 $ 8,090 $ 9,653 $ 10,162 21.7% 26.1% 27.6% 25.5% 20.3% $ 12,509 $ 13,972 $ 14,790 $ 15,529 $ 16,306 $ 17,121 $ 17,977 $ 18,876 $ 19,820 $ 20,811 21.6% 21.6% 21.6% 21.6% 21.6% 21.6% 21.6% 21.6% 21.6% 21.6% 3,424 $ 3,869 $ 4,143 $ 4,400 $ 4,672 $ 4,960 $ 5,265 $ 5,589 $ 5,932 $ 6,295 5.9% 6.0% 6.0% 6.1% 6.2% 6.2% 6.3% 6.4% 6.5% 6.5% 3,624 $ 4,048 $ 4,284 $ 4,499 $ 4,724 $ 4,960 $ 5,208 $ 5,468 $ 5,742 $ 6,029 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5% 22.5%

13. Valuation – Multistage DCF Cash Flow Free Cash Flow to the Firm Analysis +D&A % of revenue 2008 2009 2010 2011 2012 $ 1,500 $ 1,524 $ 1,396 $ 1,851 $ 2,962 6.9% 6.4% 4.8% 4.9% 5.9% - CapEx % of revenue $ 2,358 $ 10.8% Working Capital % of revenue $ 2,030 $ 1,935 $ 9.3% 8.2% 810 $ 4,018 $ 3,438 $ 3,273 3.4% 13.7% 9.1% 6.5% $ $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 3,424 $ 3,869 $ 4,143 $ 4,400 $ 4,672 $ 4,960 $ 5,265 $ 5,589 $ 5,932 $ 6,295 5.9% 6.0% 6.0% 6.1% 6.2% 6.2% 6.3% 6.4% 6.5% 6.5% 3,784 $ 4,226 $ 4,474 $ 4,697 $ 4,932 $ 5,179 $ 5,438 $ 5,709 $ 5,995 $ 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 56 $ 0.2% 437 $ 1.2% 578 1.2% $ 668 $ 1.2% 746 $ 1.2% 790 $ 1.2% 830 $ 1.2% 871 $ 1.2% 915 $ 1.2% 960 $ 1,008 $ 1,059 1.2% 1.2% 1.2% - WC Investment % of revenue n/a $ (96) $ (1,879) $ n/a -0.4% -6.4% 381 $ 1.0% 141 0.3% $ 90 $ 0.2% 78 $ 0.1% 44 $ 0.1% 40 $ 0.1% 41 $ 0.1% 44 $ 0.1% 46 $ 0.1% FCF % of revenue n/a $ 6,988 $ 7,347 $ 7,685 $ 9,710 n/a 29.5% 25.1% 20.3% 19.4% 6,295 6.5% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 5.0% $ 992.77 91.2% $ 1,010.59 Fair Value/Share 83.2% 75.9% 69.3% 63.2% 57.6% Working Capital $ 329,903 Last Stock Price Divide: Shares Outstanding 53 0.1% 52.6% 48.0% 43.8% 43.8% $ 11,001 $ 11,266 $ 10,945 $ 10,523 $ 10,113 $ 9,718 $ 9,339 $ 8,975 $ 8,625 $ 196,846 Invested Capital (Equity and Debt) Value $ 287,352 + Excess Cash $ 48,088 - Interest Bearing Debt, Preferred and Minority Interest 5,537 $ Equity Value (Net Present Value) 50 $ 0.1% $ 12,059 $ 13,537 $ 14,415 $ 15,192 $ 16,004 $ 16,859 $ 17,759 $ 18,707 $ 19,706 $ 20,758 20.8% 20.9% 21.0% 21.1% 21.2% 21.2% 21.3% 21.4% 21.4% 21.5% Per Share Value Est. Price 48 $ 0.1% 2008 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ Interest Exp (net) Total Debt $ $ 20,178 15,846 2,302 2,030 9.3% 2009 $ $ $ $ $ 29,167 24,485 2,747 1,935 8.2% 2010 $ $ $ $ $ 41,562 34,975 9,996 3,465 56 0.2% 2011 $ $ $ $ $ 52,758 44,626 8,913 1,218 437 1.2% 2012 $ 60,454 $ 48,088 $ 14,337 $ 2,549 $ 578 1.2% 332 $ 992.77 390 $ 230 $ (579) $ (754) $ $ 1,392 $ 3,465 $ 4,204 $ 5,537

14. Valuation - Google WACC Industry Discount Rate WACC 9.6% WACC Assumptions Risk Free Rate (10yr) Cost of Debt (est.) Equity Risk Prem* Alpha Country Risk Premium 2.60% 2.33% 7.5% 0.0% 0.0% Industry WACC Beta (unlevered) Industry D/E Tax Rate (5 yrs) Beta (relevered) 0.95 5.3% 23.8% 0.99 Cost of Debt (after-tax) Debt / Capital WAC (debt) 1.78% 5.06% 0.09% Industry Average Estimates for the WACC Calculation (Millions USD) Company Cost of Equity (capm) Equity / Capital WAC (equity) 10.03% 94.94% 9.53% Industry Level WACC 9.6% Google Yahoo! Microsoft Time Warner Baidu.com Oracle IBM Apple News Corp Nokia Median Price $1,010.59 $ 33.81 $ 37.59 $ 67.50 $ 151.60 $ 34.37 $ 182.88 $ 519.05 $ 17.42 $ 7.74 Beta levered 1.000 0.920 0.790 1.440 2.110 1.260 0.650 0.610 0.703 1.690 Debt Shares Equity $ 5,537 $ 181 $ 5,939 $ 16,554 $ 13 $ 15,056 $ 28,750 $ $ 13,748 $ 10,160 332 1,203 8,470 976 3,498 4,844 1,155 945 2,633 3,745 $335,824 $ 40,670 $318,387 $ 65,900 $530,297 $166,488 $211,309 $490,689 $ 45,867 $ 28,986 0.960 $ 8,049 Capital $ $ $ $ $ $ $ $ $ $ Debt Equity Debt Capital Tax % Beta unlever 341,361 40,851 324,326 82,454 530,310 181,544 240,059 490,689 59,615 39,146 1.65% 0.45% 1.87% 25.12% 0.00% 9.04% 13.61% 0.00% 29.97% 35.05% 1.62% 0.44% 1.83% 20.08% 0.00% 8.29% 11.98% 0.00% 23.06% 25.95% 22.46% 38.28% 17.53% 25.20% 14.49% 20.25% 26.68% 27.43% 34.71% 20.00% 0.987 0.917 0.778 1.212 2.110 1.175 0.591 0.610 0.588 1.320 1,918 $188,898 $ 210,801 5.45% 5.06% 23.83% 0.952

15. Valuation - Comparative EV Multiples Stock Research Google Yahoo! Microsoft Time Warner Baidu.com Oracle IBM Apple News Corp Nokia Average Value Financial Analysis Revenue EBITDA EBIT FCFF $ $ $ $ $ $ $ $ $ $ 50,175 6,325 62,484 26,888 1,201 37,121 99,871 65,225 32,778 56,943 $ 14,772 $ 1,221 $ 24,730 $ 14,011 $ 12,332 $ 16,622 $ 25,119 $ 58,518 $ 3,391 $ 1,018 $ 12,760 $ 566 $ 21,763 $ 5,909 $ 11,051 $ 13,706 $ 20,443 $ 55,241 $ 2,212 $ (735) $ 9,710 $ (1,217) $ 19,921 $ 11,532 $ 6,323 $ 13,368 $ 16,591 $ 36,170 $ 734 $ 1,148 $ 43,901 $ 17,173 $ 14,292 $ 11,428 Enterprise Value Calculation Rev EBITDA EBIT FCF Current Financial Results Multiple x Multiple Calculation $ 50,175 $ 14,772 $ 12,760 $ 9,710 4.67 13.14 14.04 14.71 $ 234,400 $ 194,071 $ 179,113 $ 142,856 Enterprise Value Less: Total Debt Plus: Excess Cash = Stock Holder's Equity Capital $ 5,537 $ 5,537 $ 5,537 $ 5,537 $ 48,088 $ 48,088 $ 48,088 $ 48,088 $ 276,951 $ 236,622 $ 221,664 $ 185,407 Divide: Shares Outstanding = Fair Value per Share 332 332 332 332 $ 833.42 $ 712.06 $ 667.05 $ 557.94 Current Stock Price Potential Stock Increase $1,010.59 $1,010.59 $1,010.59 $1,010.59 -17.5% -29.5% -34.0% -44.8%

16. Valuation – Comparative EV Multiples Ent Value Current Multiples Potential -31.5% Potential Price $ Revenue Growth -1yr -5yr +5yr EBITDA Margin -1yr -5yr +5yr EBIT Margin -1yr -5yr +5yr Cash Flow Margin -1yr -5yr +5yr Google Yahoo! Microsoft Time Warner Baidu.com Oracle IBM Apple News Corp Nokia $293,273 $ 37,967 $287,538 $ 78,791 $529,066 $163,075 $228,408 $465,069 $ 50,906 $ 22,171 32.4% 0.1% 5.4% -0.8% 53.8% 4.2% -2.3% 44.6% 0.9% -20.5% 25.1% -6.0% 7.8% -6.9% 70.0% 16.1% 1.3% 47.4% 3.6% -11.5% 8.6% 5.0% 3.5% 0.0% 11.4% 2.4% 2.2% 9.0% 2.0% -5.0% 33.7% 29.1% 38.0% 48.0% 55.9% 46.7% 24.4% 41.1% 16.8% 7.7% 36.7% 22.9% 39.7% 42.0% 49.2% 41.7% 22.8% 28.7% 15.6% 6.0% 33.9% 26.4% 35.5% 48.0% 57.6% 43.3% 25.4% 39.4% 18.0% 6.4% 27.8% 16.3% 34.1% 19.7% 49.5% 39.5% 19.9% 38.6% 13.3% 3.7% 31.3% 11.0% 35.7% 13.7% 44.4% 36.4% 18.0% 27.0% 11.9% 3.7% 27.8% 14.2% 31.8% 19.7% 49.9% 37.5% 21.0% 36.2% 14.5% 3.0% 20.8% 12.5% 29.0% 40.6% 37.9% 36.9% 15.2% 31.7% 9.4% 4.8% 31.3% -1.8% 26.9% 43.6% 40.5% 33.2% 14.3% 20.7% 8.0% 3.9% 21.0% 10.6% 27.2% 40.6% 39.2% 33.4% 15.4% 25.8% 10.2% 3.7% Low Value High Value Average Value Median Value $ 22,171 $529,066 $206,999 $163,075 -20.5% 53.8% 9.5% 0.9% -11.5% 70.0% 13.5% 3.6% -5.0% 11.4% 3.4% 2.4% 7.7% 55.9% 34.2% 38.0% 6.0% 49.2% 29.9% 28.7% 6.4% 57.6% 33.3% 35.5% 3.7% 49.5% 26.1% 19.9% 3.7% 44.4% 22.4% 18.0% 3.0% 49.9% 25.3% 21.0% 4.8% 40.6% 24.2% 29.0% -1.8% 43.6% 21.0% 20.7% 3.7% 40.6% 22.9% 25.8% 692.62 Last Stock Price $ 1,010.59 Ent Value Low Value + High Value Average Value + Median Value + Advantages v. Competitors 75% Google vs. Competitors EBITDA Margin Revenue Growth + + + + + + + + + 75% = Average + EBIT Margin Cash Flow Margin + + + + + + 56% + + + + + + + + = Average 75% = Average + + + + + 50% = Average

17. Financial Analysis - Highlights • Increasing cash from operations • $56.52 billion of cash, cash equivalents, and marketable securities • High earnings quality: operating cash flow as a percentage of sales was 34%. Source: Google 2013 3Q earnings report

18. Financial Analysis – FY12 Sources of Revenue $5.1B $2.1B $1.0B $4.1B $50.2B $37.9B 2012 Motorola Mobile Other Revenues Google Network Members Google Websites 2011 -$3.5B

19. Financial Analysis – Ratios 2008-12 2009-12 2010-12 2011-12 2012-12 8.77 8.03 8.25 44.2 n/m n/m 10.62 10.07 8.13 44.9 n/m n/m 4.16 3.92 7.89 46.2 n/m n/m 5.92 5.62 7.83 46.6 n/m n/m 4.22 3.90 7.54 48.4 81.7 4.5 Liquidity Profit Margin Asset Turnover Return on Assets Return on Equity Earnings per share ($) Price Earnings Ratio Payout Ratio 19.4% 68.6% 13.3% 15.0% $ 13.46 75.08 n/m 27.6% 65.5% 18.0% 20.3% $ 20.62 49.01 n/m 29.0% 59.6% 17.3% 20.7% $ 26.69 37.86 n/m 25.7% 58.1% 14.9% 18.7% $ 30.17 33.50 n/m 21.4% 60.3% 12.9% 16.5% $ 32.81 30.80 n/m Profitability Debt to Assets Interest Coverage Ratio Free Cash Flow ($MM) 11.1% $ 2,024 11.1% 20.1% 19.9% 23.5% 0.00 0.01 $ (111) $ (106) $ (80) $ (404) Solvency Current Ratio Acid Test/Quick Ratio Receiveables Turnover Average Collection Period Inventory Turnover Days in Inventory

20. Financial Analysis – Stock Price Trend Google 2-year $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $- Larry Page becomes CEO Google Inc Buys Machine Learning Startup Apple buys startup Topsy; gets rich Twitter data Acquisition of beatthatquote Google buys Channel Intelligence (GOOG), (FB) Potential Players In TV Ad Working on mobile payments Acquires Social Ad Start-Up Wildfire Google Chrome The Most Popular Web Browser Verifone/Sprint partners on mobile pay Google Inc. Unveils First Tablet PC Google Inc (GOOG) Reveals Google Wallet Debit Card Google Labs winds down Buys Social Media Startup Meebo Google Inc Pitches Online TV Service To Media Cos. Acquisition of Zagat Google Inc. Acquires Quickoffice Google Inc Takes 7% Stake In Vevo Visa/Google Partnership Acquires Motorola Mobility Source: Reuters, Google Finance News Google Inc Seals Waze Acquisition

21. Financial Analysis – Insider Ownership Source: Morningstar

22. Risk Analysis • • Declining Operations Efficiency Dependence on Advertising Business

23. Risk Analysis • • Issues With Chinese Government and Other Litigations Invalid Clicks

24. Questions?

25. Appendix

26. Apple Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 32,479 $ 35.3% 36,537 $ 12.5% 65,225 $ 108,249 $ 156,508 78.5% 66.0% 44.6% $ 191,395 $ 212,726 $ 224,581 $ 230,839 $ 237,764 $ 244,897 $ 252,244 $ 259,811 $ 267,605 $ 275,633 22.3% 11.1% 5.6% 2.8% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% - COGS % of revenue $ 21,334 $ 65.7% 23,397 $ 64.0% 39,541 $ 60.6% 64,431 $ 59.5% 87,846 56.1% $ 107,428 $ 118,207 $ 123,546 $ 125,719 $ 128,195 $ 130,721 $ 133,296 $ 135,922 $ 138,599 $ 142,757 56.1% 55.6% 55.0% 54.5% 53.9% 53.4% 52.8% 52.3% 51.8% 51.8% Gross Profit % of revenue $ 11,145 $ 34.3% 13,140 $ 36.0% 25,684 $ 39.4% 43,818 $ 40.5% 68,662 43.9% $ 83,967 $ 43.9% 94,520 $ 101,035 $ 105,120 $ 109,569 $ 114,176 $ 118,948 $ 123,889 $ 129,006 $ 132,876 44.4% 45.0% 45.5% 46.1% 46.6% 47.2% 47.7% 48.2% 48.2% - Operating Exp % of revenue $ 4,870 $ 15.0% 5,482 $ 15.0% 7,299 $ 11.2% 10,028 $ 9.3% 13,421 8.6% $ 10,028 $ 9.7% 20,585 $ 9.7% 21,732 $ 9.7% 22,337 $ 9.7% 23,007 $ 9.7% 23,698 $ 9.7% 24,408 $ 9.7% 25,141 $ 9.7% 25,895 $ 9.7% 26,672 9.7% - SG&A (Op Ex) % of revenue $ 4,397 $ 13.5% 4,779 $ 13.1% 6,272 $ 9.6% 8,214 $ 7.6% 10,144 6.5% $ 5,321 $ 2.8% 14,576 $ 6.9% 14,568 $ 6.5% 14,131 $ 6.1% 13,687 $ 5.8% 13,203 $ 5.4% 12,678 $ 5.0% 12,109 $ 4.7% 11,495 $ 4.3% 11,840 4.3% EBITDA % of revenue $ 6,748 $ 20.8% 8,361 $ 22.9% 19,412 $ 29.8% 35,604 $ 32.9% 58,518 37.4% $ 78,646 $ 41.1% 79,943 $ 37.6% 86,467 $ 38.5% 90,989 $ 39.4% 95,882 $ 100,973 $ 106,270 $ 111,780 $ 117,511 $ 121,036 40.3% 41.2% 42.1% 43.0% 43.9% 43.9% - D & A (Op Ex) % of revenue $ 473 $ 1.5% 703 $ 1.9% 1,027 $ 1.6% 1,814 $ 1.7% 3,277 2.1% $ 4,707 $ 2.5% 6,008 $ 2.8% 7,163 $ 3.2% 8,206 $ 3.6% 9,321 $ 3.9% 10,495 $ 4.3% 11,731 $ 4.7% 13,032 $ 5.0% EBIT (oper profits) % of revenue $ 6,275 $ 19.3% 7,658 $ 21.0% 18,385 $ 28.2% 33,790 $ 31.2% 55,241 35.3% $ 73,939 $ 38.6% 73,935 $ 34.8% 79,303 $ 35.3% 82,783 $ 35.9% 86,561 $ 36.4% 90,478 $ 36.9% 94,539 $ 37.5% 98,748 $ 103,111 $ 106,204 38.0% 38.5% 38.5% - Taxes % of EBIT $ 2,061 $ 32.8% 2,280 $ 29.8% 4,527 $ 24.6% 8,283 $ 24.5% 14,030 25.4% $ 20,282 $ 27.4% 20,281 $ 27.4% 21,753 $ 27.4% 22,708 $ 27.4% 23,744 $ 27.4% 24,819 $ 27.4% 25,932 $ 27.4% 27,087 $ 27.4% 28,284 $ 27.4% 29,132 27.4% NOPAT % of revenue $ 4,214 $ 13.0% 5,378 $ 14.7% 13,858 $ 21.2% 25,507 $ 23.6% 41,211 26.3% $ 53,657 $ 28.0% 53,655 $ 25.2% 57,550 $ 25.6% 60,075 $ 26.0% 62,817 $ 26.4% 65,660 $ 26.8% 68,607 $ 27.2% 71,661 $ 27.6% 74,827 $ 28.0% 77,072 28.0% 14,400 $ 5.4% 14,832 5.4%

27. Apple Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 473 $ 703 $ 1,027 $ 1,814 $ 3,277 1.5% 1.9% 1.6% 1.7% 2.1% +D&A % of revenue $ - CapEx % of revenue $ 1,199 $ 3.7% 1,213 $ 3.3% 2,121 $ 3.3% Working Capital % of revenue $ (3,892) $ -12.0% (6,481) $ -17.7% (4,664) $ -7.2% - WC Investment % of revenue n/a $ n/a (2,589) $ -7.1% FCF % of revenue n/a $ n/a 7,457 $ 20.4% 7,452 $ 6.9% 9,402 6.0% $ $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 4,707 $ 6,008 $ 7,163 $ 8,206 $ 9,321 $ 10,495 $ 11,731 $ 13,032 $ 14,400 $ 14,832 2.5% 2.8% 3.2% 3.6% 3.9% 4.3% 4.7% 5.0% 5.4% 5.4% 7,452 $ 5.4% 13,981 $ 5.4% 14,400 $ 5.4% 14,832 5.4% $ (9,706) $ -5.1% (2,198) $ -1.0% (1,222) $ -0.5% (645) $ -0.3% (714) $ -0.3% (735) $ -0.3% (757) $ -0.3% (780) $ -0.3% (803) $ -0.3% (827) -0.3% 10,947 $ 16.8% 24,139 $ 22.3% 36,170 23.1% $ 60,618 $ 31.7% 50,414 $ 23.7% 53,850 $ 24.0% 56,504 $ 24.5% 60,057 $ 25.3% 63,712 $ 26.0% 67,521 $ 26.8% 71,492 $ 27.5% 75,630 $ 28.3% 77,899 28.3% 3.0% 91.2% $ 55,300 $ Conclusion: Per Share Value 83.2% 75.9% 41,957 $ 40,886 $ 69.3% 39,138 $ 63.2% 57.6% 37,950 $ Working Capital Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 870,256 $ 29,129 $ - Equity Value (Net Present Value) $ 899,385 Last Stock Price Divide: Shares Outstanding Fair Value/Share 13,573 $ 5.4% (1,084) -0.7% LTG (est) 519.05 13,178 $ 5.4% (4,270) $ -3.9% Present Value of FCF $ 12,794 $ 5.4% 1,817 $ 2.8% 9.6% 951.37 12,422 $ 5.4% $ (19,724) $ (21,922) $ (23,144) $ (23,788) $ (24,502) $ (25,237) $ (25,994) $ (26,774) $ (27,577) -10.3% -10.3% -10.3% -10.3% -10.3% -10.3% -10.3% -10.3% -10.3% Industry WACC $ 12,085 $ 5.4% (8,934) $ (10,018) -8.3% -6.4% Present Value factor Potential Price 11,447 $ 5.4% 52.6% 36,727 $ 2008 48.0% 35,509 $ 2009 43.8% 34,299 $ 2010 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ 34,690 24,490 14,092 (3,892) -12.0% $ $ $ $ $ 36,265 23,464 19,282 (6,481) -17.7% $ $ $ $ $ Interest Exp (net) Total Debt $ $ - $ $ - $ $ 41,678 25,620 20,722 (4,664) -7.2% 43.8% 33,102 $ 515,388 2011 $ $ $ $ $ 44,988 25,952 27,970 (8,934) -8.3% 2012 $ 57,653 $ 29,129 $ 38,542 $ $ (10,018) -6.4% 945 $ 951.37 (311) $ $ (519) $ $ 6 -

28. IBM Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 103,630 $ 4.9% 95,758 $ -7.6% 99,871 $ 106,916 $ 104,507 4.3% 7.1% -2.3% $ 107,642 $ 109,795 $ 111,991 $ 114,231 $ 116,515 $ 118,846 $ 121,223 $ 123,647 $ 126,120 $ 128,642 3.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% - COGS % of revenue $ 57,969 $ 55.9% 51,973 $ 54.3% 53,857 $ 53.9% 56,778 $ 53.1% 54,209 51.9% $ 55,835 $ 51.9% 56,382 $ 51.4% 56,935 $ 50.8% 57,493 $ 50.3% 58,056 $ 49.8% 58,625 $ 49.3% 59,200 $ 48.8% 59,780 $ 48.3% 60,366 $ 47.9% 61,573 47.9% Gross Profit % of revenue $ 45,661 $ 44.1% 43,785 $ 45.7% 46,014 $ 46.1% 50,138 $ 46.9% 50,298 48.1% $ 51,807 $ 48.1% 53,413 $ 48.6% 55,056 $ 49.2% 56,738 $ 49.7% 58,459 $ 50.2% 60,220 $ 50.7% 62,023 $ 51.2% 63,867 $ 51.7% 65,754 $ 52.1% 67,069 52.1% - Operating Exp % of revenue $ 29,723 $ 28.7% 26,772 $ 28.0% 27,863 $ 27.9% 29,852 $ 27.9% 29,855 28.6% $ 30,361 $ 28.2% 30,968 $ 28.2% 31,588 $ 28.2% 32,219 $ 28.2% 32,864 $ 28.2% 33,521 $ 28.2% 34,191 $ 28.2% 34,875 $ 28.2% 35,573 $ 28.2% 36,284 28.2% - SG&A (Op Ex) % of revenue $ 24,273 $ 23.4% 21,778 $ 22.7% 23,032 $ 23.1% 25,037 $ 23.4% 25,179 24.1% $ 25,540 $ 23.7% 26,046 $ 23.7% 26,562 $ 23.7% 27,088 $ 23.7% 27,625 $ 23.7% 28,172 $ 23.7% 28,730 $ 23.7% 29,300 $ 23.7% 29,880 $ 23.7% 30,478 23.7% EBITDA % of revenue $ 21,388 $ 20.6% 22,007 $ 23.0% 22,982 $ 23.0% 25,101 $ 23.5% 25,119 24.0% $ 26,267 $ 24.4% 27,367 $ 24.9% 28,494 $ 25.4% 29,649 $ 26.0% 30,834 $ 26.5% 32,048 $ 27.0% 33,292 $ 27.5% 34,567 $ 28.0% 35,874 $ 28.4% 36,591 28.4% - D & A (Op Ex) % of revenue $ 5,450 $ 5.3% 4,994 $ 5.2% 4,831 $ 4.8% 4,815 $ 4.5% 4,676 4.5% $ 4,821 $ 4.5% 4,922 $ 4.5% 5,026 $ 4.5% 5,131 $ 4.5% 5,239 $ 4.5% 5,349 $ 4.5% 5,461 $ 4.5% 5,576 $ 4.5% 5,693 $ 4.5% 5,806 4.5% EBIT (oper profits) % of revenue $ 15,938 $ 15.4% 17,013 $ 17.8% 18,151 $ 18.2% 20,286 $ 19.0% 20,443 19.6% $ 21,446 $ 19.9% 22,444 $ 20.4% 23,468 $ 21.0% 24,519 $ 21.5% 25,595 $ 22.0% 26,699 $ 22.5% 27,831 $ 23.0% 28,992 $ 23.4% 30,181 $ 23.9% 30,785 23.9% $ 4,381 $ 27.5% 4,713 $ 27.7% 4,890 $ 26.9% 5,148 $ 25.4% 5,297 25.9% $ 5,723 $ 26.7% 5,989 $ 26.7% 6,262 $ 26.7% 6,542 $ 26.7% 6,830 $ 26.7% 7,124 $ 26.7% 7,426 $ 26.7% 7,736 $ 26.7% 8,054 $ 26.7% 8,215 26.7% $ 11,557 $ 11.2% 12,300 $ 12.8% 13,261 $ 13.3% 15,138 $ 14.2% 15,146 14.5% $ 15,723 $ 14.6% 16,455 $ 15.0% 17,206 $ 15.4% 17,976 $ 15.7% 18,766 $ 16.1% 19,575 $ 16.5% 20,405 $ 16.8% 21,256 $ 17.2% 22,128 $ 17.5% 22,570 17.5% - Taxes % of EBIT NOPAT % of revenue adjustments to op income @ IBM

29. IBM Free Cash Flow to the Firm Analysis 2006 2007 2008 2009 2010 5,450 $ 4,994 $ 4,831 $ 4,815 $ 4,676 5.3% 5.2% 4.8% 4.5% 4.5% $ - CapEx % of revenue $ 4,887 $ 4.7% 4,077 $ 4.3% 4,754 $ 4.8% 4,667 $ 4.4% 4,717 4.5% $ 4,100 $ 4.5% 4,956 $ 4.5% 5,055 $ 4.5% 5,156 $ 4.5% 5,259 $ 4.5% 5,364 $ 4.5% 5,471 $ 4.5% 5,581 $ 4.5% 5,693 $ 4.5% Working Capital % of revenue $ 4,898 $ 4.7% 3,127 $ 3.3% 2,681 $ 2.7% 5,346 $ 5.0% 3,860 3.7% $ 3,976 $ 3.7% 4,055 $ 3.7% 4,136 $ 3.7% 4,219 $ 3.7% 4,304 $ 3.7% 4,390 $ 3.7% 4,477 $ 3.7% 4,567 $ 3.7% 4,658 3.7% - WC Investment % of revenue n/a $ n/a (1,771) $ -1.8% (446) $ -0.4% 2,665 $ 2.5% (1,486) -1.4% $ 116 $ 0.1% 80 $ 0.1% 81 $ 0.1% 83 $ 0.1% 84 $ 0.1% 86 $ 0.1% 88 $ 0.1% 90 $ 0.1% 91 $ 0.1% 93 0.1% FCF % of revenue n/a $ n/a 14,988 $ 15.7% 13,784 $ 13.8% 12,621 $ 11.8% 16,591 15.9% $ 16,329 $ 15.2% 16,342 $ 14.9% 17,096 $ 15.3% 17,868 $ 15.6% 18,661 $ 16.0% 19,473 $ 16.4% 20,307 $ 16.8% 21,161 $ 17.1% 22,037 $ 17.5% 22,477 17.5% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 2.0% $ 2011 2012 2013 2014 2015 2016 2017 2018 2019 Assump. 4,821 $ 4,922 $ 5,026 $ 5,131 $ 5,239 $ 5,349 $ 5,461 $ 5,576 $ 5,693 $ 5,806 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% +D&A % of revenue 91.2% $ 14,896 $ Conclusion: Per Share Value Potential Price Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 236,531 $ 11,129 $ 33,393 $ 214,267 Last Stock Price Divide: Shares Outstanding $ 182.88 Fair Value/Share 75.9% 13,601 $ 12,980 $ 69.3% 12,377 $ 63.2% 57.6% 11,792 $ Working Capital Equity Value (Net Present Value) $ 185.44 83.2% 52.6% 11,226 $ 2008 48.0% 10,679 $ 2009 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ 49,004 12,907 42,435 11,236 4,898 4.7% $ $ $ $ $ Interest Exp (net) Total Debt $ $ 673 $ 34,044 $ 48,935 13,974 36,002 4,168 3,127 3.3% 43.8% 10,152 $ 2010 $ $ $ $ $ 48,116 11,651 40,562 6,778 2,681 2.7% 43.8% 9,645 $ 129,183 2011 $ $ $ $ $ 5,806 4.5% 50,928 11,922 42,123 8,463 5,346 5.0% 2012 $ $ $ $ $ 49,433 11,129 43,625 9,181 3,860 3.7% 411 $ 31,418 $ 596 33,393 1,155 $ 185.44 402 $ 26,218 $ 368 $ 28,750 $

30. Oracle Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 22,430 $ 24.6% 23,252 $ 3.7% 26,820 $ 15.3% 35,622 $ 32.8% 37,121 4.2% $ 37,180 $ 0.2% 38,295 $ 3.0% 39,444 $ 3.0% 40,628 $ 3.0% 41,846 $ 3.0% 43,102 $ 3.0% 44,395 $ 3.0% 45,727 $ 3.0% 47,099 $ 3.0% 48,511 3.0% - COGS % of revenue $ 4,191 $ 18.7% 4,794 $ 20.6% 5,764 $ 21.5% 8,398 $ 23.6% 7,858 21.2% $ 7,113 $ 19.1% 7,957 $ 20.8% 8,196 $ 20.8% 8,442 $ 20.8% 8,695 $ 20.8% 8,956 $ 20.8% 9,224 $ 20.8% 9,501 $ 20.8% 9,786 $ 20.8% 10,080 20.8% Gross Profit % of revenue $ 18,239 $ 81.3% 18,458 $ 79.4% 21,056 $ 78.5% 27,224 $ 76.4% 29,263 78.8% $ 30,067 $ 80.9% 30,338 $ 79.2% 31,248 $ 79.2% 32,186 $ 79.2% 33,152 $ 79.2% 34,146 $ 79.2% 35,170 $ 79.2% 36,226 $ 79.2% 37,312 $ 79.2% 38,432 79.2% - Operating Exp % of revenue $ 9,605 $ 42.8% 10,137 $ 43.6% 11,218 $ 41.8% 14,983 $ 42.1% 15,557 41.9% $ 15,383 $ 41.4% 16,186 $ 42.3% 16,671 $ 42.3% 17,171 $ 42.3% 17,686 $ 42.3% 18,217 $ 42.3% 18,763 $ 42.3% 19,326 $ 42.3% 19,906 $ 42.3% 20,503 42.3% - SG&A (Op Ex) % of revenue $ 9,337 $ 41.6% 9,874 $ 42.5% 8,947 $ 33.4% 12,187 $ 34.2% 12,641 34.1% $ 12,715 $ 34.2% 13,697 $ 35.8% 14,376 $ 36.4% 15,083 $ 37.1% 15,820 $ 37.8% 16,587 $ 38.5% 17,386 $ 39.2% 18,218 $ 39.8% 19,084 $ 40.5% 19,657 40.5% EBITDA % of revenue $ 8,902 $ 39.7% 8,584 $ 36.9% 12,109 $ 45.1% 15,037 $ 42.2% 16,622 44.8% $ 17,352 $ 46.7% 16,641 $ 43.5% 16,873 $ 42.8% 17,103 $ 42.1% 17,332 $ 41.4% 17,559 $ 40.7% 17,785 $ 40.1% 18,008 $ 39.4% 18,228 $ 38.7% 18,775 38.7% - D & A (Op Ex) % of revenue $ 268 $ 1.2% 263 $ 1.1% 2,271 $ 8.5% 2,796 $ 7.8% 2,916 7.9% $ 2,668 $ 7.2% 2,488 $ 6.5% 2,295 $ 5.8% 2,088 $ 5.1% 1,867 $ 4.5% 1,630 $ 3.8% 1,378 $ 3.1% 1,109 $ 2.4% 822 $ 1.7% 847 1.7% EBIT (oper profits) % of revenue $ 8,634 $ 38.5% 8,321 $ 35.8% 9,838 $ 36.7% 12,241 $ 34.4% 13,706 36.9% $ 14,684 $ 39.5% 14,153 $ 37.0% 14,577 $ 37.0% 15,015 $ 37.0% 15,465 $ 37.0% 15,929 $ 37.0% 16,407 $ 37.0% 16,899 $ 37.0% 17,406 $ 37.0% 17,928 37.0% - Taxes % of EBIT $ 2,313 $ 26.8% 2,241 $ 26.9% 2,108 $ 21.4% 2,864 $ 23.4% 2,981 21.7% $ 2,973 $ 20.2% 3,220 $ 22.8% 3,316 $ 22.8% 3,416 $ 22.8% 3,518 $ 22.8% 3,624 $ 22.8% 3,733 $ 22.8% 3,845 $ 22.8% 3,960 $ 22.8% 4,079 22.8% NOPAT % of revenue $ 6,321 $ 28.2% 6,080 $ 26.1% 7,730 $ 28.8% 9,377 $ 26.3% 10,725 28.9% $ 11,711 $ 31.5% 10,933 $ 28.5% 11,261 $ 28.5% 11,599 $ 28.5% 11,947 $ 28.5% 12,305 $ 28.5% 12,674 $ 28.5% 13,055 $ 28.5% 13,446 $ 28.5% 13,850 28.5%

31. Oracle Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 268 $ 263 $ 2,271 $ 2,796 $ 2,916 1.2% 1.1% 8.5% 7.8% 7.9% $ - CapEx % of revenue $ 243 $ 1.1% 529 $ 2.3% 230 $ 0.9% 450 $ 1.3% 648 1.7% $ 650 $ 1.7% 669 $ 1.7% 689 $ 1.7% 709 $ 1.7% 730 $ 1.7% 752 $ 1.7% 775 $ 1.7% 798 $ 1.7% Working Capital % of revenue $ (2,166) $ -9.7% (2,191) $ -9.4% (3,011) $ -11.2% (2,716) $ -7.6% (3,091) -8.3% $ (3,096) $ -8.3% (3,189) $ -8.3% (3,284) $ -8.3% (3,383) $ -8.3% (3,484) $ -8.3% (3,589) $ -8.3% (3,697) $ -8.3% (3,808) $ -8.3% - WC Investment % of revenue n/a $ n/a (25) $ -0.1% (820) $ -3.1% 295 $ 0.8% (375) -1.0% $ (5) $ 0.0% (93) $ -0.2% (96) $ -0.2% (99) $ -0.2% (101) $ -0.2% (105) $ -0.2% (108) $ -0.2% (111) $ -0.2% (114) $ -0.2% (118) -0.2% FCF % of revenue n/a $ n/a 5,839 $ 25.1% 10,591 $ 39.5% 11,428 $ 32.1% 13,368 36.0% $ 13,734 $ 36.9% 12,846 $ 33.5% 12,963 $ 32.9% 13,076 $ 32.2% 13,185 $ 31.5% 13,287 $ 30.8% 13,385 $ 30.1% 13,476 $ 29.5% 13,560 $ 28.8% 13,967 28.8% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 3.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 2,668 $ 2,488 $ 2,295 $ 2,088 $ 1,867 $ 1,630 $ 1,378 $ 1,109 $ 822 $ 847 7.2% 6.5% 5.8% 5.1% 4.5% 3.8% 3.1% 2.4% 1.7% 1.7% +D&A % of revenue 91.2% $ 12,529 $ Conclusion: Per Share Value Potential Price Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 169,958 $ 30,676 $ 16,873 $ 183,761 Last Stock Price Divide: Shares Outstanding $ 34.37 Fair Value/Share 10,691 $ 69.3% 63.2% 57.6% 52.6% 48.0% 43.8% 9,842 $ 9,057 $ 8,331 $ 7,660 $ 7,039 $ 6,465 $ 5,935 $ 2008 2009 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ 12,883 7,020 9,387 1,358 (2,166) -9.7% $ $ $ $ $ Interest Exp (net) Total Debt $ $ 731 $ 11,236 $ 18,581 12,624 9,149 1,001 (2,191) -9.4% 2010 $ $ $ $ $ 27,004 18,469 14,691 3,145 (3,011) -11.2% 43.8% 2011 $ $ $ $ $ 847 1.7% (3,922) -8.3% 75.9% Working Capital Equity Value (Net Present Value) $ 37.94 83.2% 822 $ 1.7% 39,174 28,848 14,192 1,150 (2,716) -7.6% 92,408 2012 $ $ $ $ $ 40,023 30,676 15,388 2,950 (3,091) -8.3% 808 $ 16,391 $ 1 16,873 4,844 $ 37.94 630 $ 12,661 $ 754 $ 15,056 $

32. BAIDU Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 3,198 $ 96.0% 4,448 $ 39.1% 7,915 $ 77.9% 14,501 $ 83.2% 22,306 53.8% $ 28,309 $ 26.9% 32,118 $ 13.5% 34,279 $ 6.7% 35,993 $ 5.0% 37,793 $ 5.0% 39,682 $ 5.0% 41,667 $ 5.0% 43,750 $ 5.0% 45,937 $ 5.0% 48,234 5.0% - COGS % of revenue $ 1,155 $ 36.1% 1,616 $ 36.3% 2,149 $ 27.2% 3,897 $ 26.9% 4,519 20.3% $ 5,735 $ 20.3% 6,442 $ 20.1% 6,806 $ 19.9% 7,075 $ 19.7% 7,355 $ 19.5% 7,645 $ 19.3% 7,947 $ 19.1% 8,261 $ 18.9% 8,588 $ 18.7% 9,017 18.7% Gross Profit % of revenue $ 2,043 $ 63.9% 2,832 $ 63.7% 5,766 $ 72.8% 10,604 $ 73.1% 17,787 79.7% $ 22,574 $ 79.7% 25,676 $ 79.9% 27,473 $ 80.1% 28,918 $ 80.3% 30,438 $ 80.5% 32,037 $ 80.7% 33,719 $ 80.9% 35,489 $ 81.1% 37,350 $ 81.3% 39,217 81.3% - Operating Exp % of revenue $ 946 $ 29.6% 1,227 $ 27.6% 1,807 $ 22.8% 3,027 $ 20.9% 6,736 30.2% $ 8,549 $ 30.2% 9,699 $ 30.2% 10,352 $ 30.2% 10,869 $ 30.2% 11,413 $ 30.2% 11,983 $ 30.2% 12,583 $ 30.2% 13,212 $ 30.2% 13,872 $ 30.2% 14,566 30.2% - SG&A (Op Ex) % of revenue $ 775 $ 24.2% 958 $ 21.5% 1,501 $ 19.0% 2,596 $ 17.9% 5,455 24.5% $ 6,742 $ 23.8% 7,443 $ 23.2% 7,725 $ 22.5% 7,881 $ 21.9% 8,033 $ 21.3% 8,180 $ 20.6% 8,323 $ 20.0% 8,459 $ 19.3% 8,588 $ 18.7% 9,017 18.7% EBITDA % of revenue $ 1,268 $ 39.6% 1,874 $ 42.1% 4,265 $ 53.9% 8,008 $ 55.2% 12,332 55.3% $ 15,832 $ 55.9% 18,233 $ 56.8% 19,748 $ 57.6% 21,037 $ 58.4% 22,405 $ 59.3% 23,857 $ 60.1% 25,396 $ 61.0% 27,030 $ 61.8% 28,762 $ 62.6% 30,200 62.6% - D & A (Op Ex) % of revenue $ 171 $ 5.3% 269 $ 6.0% 306 $ 3.9% 431 $ 3.0% 1,281 5.7% $ 1,807 $ 6.4% 2,256 $ 7.0% 2,627 $ 7.7% 2,989 $ 8.3% 3,380 $ 8.9% 3,803 $ 9.6% 4,260 $ 10.2% 4,753 $ 10.9% 5,284 $ 11.5% 5,549 11.5% EBIT (oper profits) % of revenue $ 1,097 $ 34.3% 1,605 $ 36.1% 3,959 $ 50.0% 7,577 $ 52.3% 11,051 49.5% $ 14,025 $ 49.5% 15,977 $ 49.7% 17,121 $ 49.9% 18,049 $ 50.1% 19,025 $ 50.3% 20,054 $ 50.5% 21,137 $ 50.7% 22,277 $ 50.9% 23,478 $ 51.1% 24,651 51.1% - Taxes % of EBIT $ 116 $ 10.6% 198 $ 12.3% 536 $ 13.5% 1,189 $ 15.7% 1,574 14.2% $ 2,032 $ 14.5% 2,315 $ 14.5% 2,481 $ 14.5% 2,615 $ 14.5% 2,757 $ 14.5% 2,906 $ 14.5% 3,063 $ 14.5% 3,228 $ 14.5% 3,402 $ 14.5% 3,572 14.5% NOPAT % of revenue $ 981 $ 30.7% 1,407 $ 31.6% 3,423 $ 43.2% 6,388 $ 44.1% 9,477 42.5% $ 11,993 $ 42.4% 13,662 $ 42.5% 14,640 $ 42.7% 15,433 $ 42.9% 16,268 $ 43.0% 17,148 $ 43.2% 18,074 $ 43.4% 19,049 $ 43.5% 20,075 $ 43.7% 21,079 43.7%

33. BAIDU Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 171 $ 269 $ 306 $ 431 $ 1,281 5.3% 6.0% 3.9% 3.0% 5.7% $ - CapEx % of revenue $ 577 $ 18.0% 477 $ 10.7% 450 $ 5.7% 976 $ 6.7% 2,566 11.5% $ 3,257 $ 11.5% 3,695 $ 11.5% 3,943 $ 11.5% 4,141 $ 11.5% 4,348 $ 11.5% 4,565 $ 11.5% 4,793 $ 11.5% 5,033 $ 11.5% Working Capital % of revenue $ (660) $ -20.6% (1,119) $ -25.2% (1,928) $ -24.4% (2,548) $ -17.6% (679) -3.0% $ (862) $ -3.0% (978) $ -3.0% (1,044) $ -3.0% (1,096) $ -3.0% (1,151) $ -3.0% (1,208) $ -3.0% (1,269) $ -3.0% (1,332) $ -3.0% - WC Investment % of revenue n/a $ n/a (459) $ -10.3% (809) $ -10.2% (620) $ -4.3% 1,869 8.4% $ (183) $ -0.6% (116) $ -0.4% (66) $ -0.2% (52) $ -0.1% (55) $ -0.1% (58) $ -0.1% (60) $ -0.1% (63) $ -0.1% (67) $ -0.1% (70) -0.1% FCF % of revenue n/a $ n/a 1,658 $ 37.3% 4,088 $ 51.6% 6,463 $ 44.6% 6,323 28.3% $ 10,726 $ 37.9% 12,339 $ 38.4% 13,389 $ 39.1% 14,333 $ 39.8% 15,355 $ 40.6% 16,443 $ 41.4% 17,601 $ 42.2% 18,832 $ 43.0% 20,142 $ 43.8% 21,149 43.8% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 5.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 1,807 $ 2,256 $ 2,627 $ 2,989 $ 3,380 $ 3,803 $ 4,260 $ 4,753 $ 5,284 $ 5,549 6.4% 7.0% 7.7% 8.3% 8.9% 9.6% 10.2% 10.9% 11.5% 11.5% +D&A % of revenue 91.2% $ 9,785 $ Conclusion: Per Share Value Potential Price Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 286,994 $ 5,268 $ 1,933 $ 290,328 Last Stock Price Divide: Shares Outstanding $ 151.60 Fair Value/Share 75.9% 10,269 $ 10,166 $ 5,549 11.5% (1,399) -3.0% 69.3% 63.2% 57.6% 52.6% 48.0% 43.8% 9,928 $ 9,703 $ 9,479 $ 9,256 $ 9,035 $ 8,816 $ 200,557 Working Capital Equity Value (Net Present Value) $ 83.00 83.2% 5,284 $ 11.5% 2008 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ Interest Exp (net) Total Debt $ $ 2009 2,852 2,663 849 (660) -20.6% $ $ $ $ $ 2010 4,843 4,562 1,400 (1,119) -25.2% $ $ $ $ $ 8,782 8,158 2,552 (1,928) -24.4% 43.8% 2011 $ $ $ $ $ 15,848 14,179 4,407 190 (2,548) -17.6% 2012 $ $ $ $ $ 5,555 5,268 1,320 353 (679) -3.0% (10) $ 2,308 $ 2,414 1,933 3,498 $ 83.00 - 7 $ $ - 5 $ $ (10) $ 86 $

34. Nokia – pre-spin Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 70,761 $ -5.10% 58,801 $ -16.9% 56,943 $ -3.2% 50,185 $ -11.9% 39,908 -20.5% $ 37,913 $ -5.0% 36,017 $ -5.0% 34,216 $ -5.0% 32,505 $ -5.0% 30,880 $ -5.0% 29,336 $ -5.0% 27,869 $ -5.0% 26,476 $ -5.0% 25,152 $ -5.0% 23,894 -5.0% - COGS % of revenue $ 46,518 $ 65.7% 39,771 $ 67.6% 39,749 $ 69.8% 35,491 $ 70.7% 28,812 72.2% $ 26,243 $ 69.2% 25,055 $ 69.6% 23,922 $ 69.9% 22,839 $ 70.3% 21,806 $ 70.6% 20,819 $ 71.0% 19,877 $ 71.3% 18,977 $ 71.7% 18,119 $ 72.0% 17,213 72.0% Gross Profit % of revenue $ 24,243 $ 34.3% 19,030 $ 32.4% 17,195 $ 30.2% 14,694 $ 29.3% 11,096 27.8% $ 11,670 $ 30.8% 10,962 $ 30.4% 10,295 $ 30.1% 9,666 $ 29.7% 9,074 $ 29.4% 8,517 $ 29.0% 7,992 $ 28.7% 7,498 $ 28.3% 7,033 $ 28.0% 6,682 28.0% - Operating Exp % of revenue $ 16,436 $ 23.2% 15,968 $ 27.2% 14,562 $ 25.6% 15,077 $ 30.0% 11,831 29.6% $ 10,285 $ 27.1% 9,771 $ 27.1% 9,283 $ 27.1% 8,818 $ 27.1% 8,378 $ 27.1% 7,959 $ 27.1% 7,561 $ 27.1% 7,183 $ 27.1% 6,824 $ 27.1% 6,482 27.1% - SG&A (Op Ex) % of revenue $ 14,180 $ 20.0% 15,968 $ 27.2% 14,562 $ 25.6% 13,049 $ 26.0% 10,078 25.3% $ 8,737 $ 23.0% 8,411 $ 23.4% 8,097 $ 23.7% 7,792 $ 24.0% 7,498 $ 24.3% 7,214 $ 24.6% 6,940 $ 24.9% 6,675 $ 25.2% 6,419 $ 25.5% 6,098 25.5% EBITDA % of revenue $ 10,063 $ 14.2% 3,062 $ 5.2% 2,632 $ 4.6% 1,645 $ 3.3% 1,018 2.6% $ 2,933 $ 7.7% 2,550 $ 7.1% 2,198 $ 6.4% 1,874 $ 5.8% 1,576 $ 5.1% 1,303 $ 4.4% 1,052 $ 3.8% 824 $ 3.1% 614 $ 2.4% 584 2.4% - D & A (Op Ex) % of revenue $ 2,256 $ 3.2% $ 0.0% $ 0.0% 2,028 $ 4.0% 1,754 4.4% $ 1,549 $ 4.1% 1,360 $ 3.8% 1,186 $ 3.5% 1,026 $ 3.2% 879 $ 2.8% 744 $ 2.5% 621 $ 2.2% 508 $ 1.9% 405 $ 1.6% 384 1.6% EBIT (oper profits) % of revenue $ 7,807 $ 11.0% 3,062 $ 5.2% 2,632 $ 4.6% (383) $ -0.8% (735) -1.8% $ 1,384 $ 3.7% 1,190 $ 3.3% 1,012 $ 3.0% 848 $ 2.6% 697 $ 2.3% 558 $ 1.9% 432 $ 1.5% 316 $ 1.2% 210 $ 0.8% 199 0.8% - Taxes % of EBIT $ 1,508 $ 19.3% 1,007 $ 32.9% (594) $ -22.6% 376 $ 1,514 -98.2% -205.9% $ 277 $ 20.0% 238 $ 20.0% 202 $ 20.0% 170 $ 20.0% 139 $ 20.0% 112 $ 20.0% 86 $ 20.0% 63 $ 20.0% 42 $ 20.0% 40 20.0% NOPAT % of revenue $ 6,299 $ 8.9% 2,055 $ 3.5% 3,226 $ 5.7% $ 1,107 $ 2.9% 952 $ 2.6% 810 $ 2.4% 678 $ 2.1% 557 $ 1.8% 447 $ 1.5% 345 $ 1.2% 252 $ 1.0% 168 $ 0.7% 159 0.7% (759) $ -1.5% (2,250) -5.6%

35. Nokia – pre-spin Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 2,256 $ $ $ 2,028 $ 1,754 3.2% 0.0% 0.0% 4.0% 4.4% $ - CapEx % of revenue $ 1,423 $ 2.0% 801 $ 1.4% 911 $ 1.6% 775 $ 1.5% 610 1.5% $ 610 $ 1.6% 579 $ 1.6% 550 $ 1.6% 523 $ 1.6% 497 $ 1.6% 472 $ 1.6% 448 $ 1.6% 426 $ 1.6% Working Capital % of revenue $ 1,236 $ 1.7% 343 $ 0.6% (2,098) $ -3.7% (1,998) $ -4.0% (4,252) -10.7% $ (4,039) $ -10.7% (3,837) $ -10.7% (3,645) $ -10.7% (3,463) $ -10.7% (3,290) $ -10.7% (3,126) $ -10.7% (2,969) $ -10.7% (2,821) $ -10.7% - WC Investment % of revenue n/a $ n/a (893) $ -1.5% (2,441) $ -4.3% 100 $ 0.2% (2,254) -5.6% $ 213 $ 0.6% 202 $ 0.6% 192 $ 0.6% 182 $ 0.6% 173 $ 0.6% 165 $ 0.6% 156 $ 0.6% 148 $ 0.6% 141 $ 0.6% 134 0.6% FCF % of revenue n/a $ n/a 2,148 $ 3.7% 4,757 $ 8.4% 394 $ 0.8% 1,148 2.9% $ 1,834 $ 4.8% 1,531 $ 4.2% 1,253 $ 3.7% 999 $ 3.1% 767 $ 2.5% 555 $ 1.9% 362 $ 1.3% 186 $ 0.7% 27 $ 0.1% 25 0.1% 91.2% 83.2% 75.9% 1,673 $ 1,274 $ Present Value factor Industry WACC Present Value of FCF LTG (est) $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 1,549 $ 1,360 $ 1,186 $ 1,026 $ 879 $ 744 $ 621 $ 508 $ 405 $ 384 4.1% 3.8% 3.5% 3.2% 2.8% 2.5% 2.2% 1.9% 1.6% 1.6% +D&A % of revenue 9.6% -5.0% $ Conclusion: Per Share Value Potential Price 2.59 Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ $ $ 5,761 13,105 9,172 $ 9,694 Last Stock Price Divide: Shares Outstanding $ 7.74 Fair Value/Share 951 $ 692 $ 63.2% 57.6% 484 $ Working Capital Equity Value (Net Present Value) $ 69.3% 52.6% 320 $ 2008 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ Interest Exp (net) Total Debt $ $ 34,145 9,517 28,403 5,011 1,236 1.7% 48.0% 190 $ 2009 $ $ $ $ $ 33,879 13,202 21,791 1,458 343 0.6% 89 $ 36,416 16,975 23,531 1,991 (2,098) -3.7% 43.8% 12 $ 2011 $ $ $ $ $ 384 1.6% (2,680) -10.7% 43.8% 2010 $ $ $ $ $ 405 $ 1.6% 33,044 14,152 22,645 1,755 (1,998) -4.0% 76 2012 $ $ $ $ $ 27,611 13,105 19,369 611 (4,252) -10.7% 132 $ 9,560 $ 201 9,172 3,745 $ 2.59 751 $ 9,424 $ 380 $ 10,200 $ 382 $ 10,160 $

36. Microsoft Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 60,420 $ 18.2% 58,437 $ -3.3% 62,484 $ 6.9% 69,943 $ 11.9% 73,723 5.4% $ 77,849 $ 5.6% 80,184 $ 3.0% 82,590 $ 3.0% 85,068 $ 3.0% 87,620 $ 3.0% 90,248 $ 3.0% 92,956 $ 3.0% 95,744 $ 3.0% 98,617 $ 101,575 3.0% 3.0% - COGS % of revenue $ 11,598 $ 19.2% 12,155 $ 20.8% 12,395 $ 19.8% 15,577 $ 22.3% 17,530 23.8% $ 20,249 $ 26.0% 20,856 $ 26.0% 21,482 $ 26.0% 22,127 $ 26.0% 22,790 $ 26.0% 23,474 $ 26.0% 24,178 $ 26.0% 24,904 $ 26.0% 25,651 $ 26.0% 26,420 26.0% Gross Profit % of revenue $ 48,822 $ 80.8% 46,282 $ 79.2% 50,089 $ 80.2% 54,366 $ 77.7% 56,193 76.2% $ 57,600 $ 74.0% 59,328 $ 74.0% 61,108 $ 74.0% 62,941 $ 74.0% 64,829 $ 74.0% 66,774 $ 74.0% 68,777 $ 74.0% 70,841 $ 74.0% 72,966 $ 74.0% 75,155 74.0% - Operating Exp % of revenue $ 26,642 $ 44.1% 25,919 $ 44.4% 25,991 $ 41.6% 27,205 $ 38.9% 34,430 46.7% $ 31,044 $ 42.0% 34,252 $ 42.7% 35,279 $ 42.7% 36,337 $ 42.7% 37,428 $ 42.7% 38,550 $ 42.7% 39,707 $ 42.7% 40,898 $ 42.7% 42,125 $ 42.7% 43,389 42.7% - SG&A (Op Ex) % of revenue $ 24,586 $ 40.7% 23,357 $ 40.0% 23,318 $ 37.3% 24,439 $ 34.9% 31,463 42.7% $ 27,997 $ 36.0% 31,203 $ 38.9% 32,230 $ 39.0% 33,292 $ 39.1% 34,388 $ 39.2% 35,520 $ 39.4% 36,688 $ 39.5% 37,895 $ 39.6% 39,142 $ 39.7% 40,316 39.7% EBITDA % of revenue $ 24,236 $ 40.1% 22,925 $ 39.2% 26,771 $ 42.8% 29,927 $ 42.8% 24,730 33.5% $ 29,603 $ 38.0% 28,125 $ 35.1% 28,877 $ 35.0% 29,649 $ 34.9% 30,442 $ 34.7% 31,255 $ 34.6% 32,089 $ 34.5% 32,945 $ 34.4% 33,824 $ 34.3% 34,839 34.3% - D & A (Op Ex) % of revenue $ 2,056 $ 3.4% 2,562 $ 4.4% 2,673 $ 4.3% 2,766 $ 4.0% 2,967 4.0% $ 3,047 $ 3.9% 3,049 $ 3.8% 3,049 $ 3.7% 3,046 $ 3.6% 3,040 $ 3.5% 3,031 $ 3.4% 3,018 $ 3.2% 3,003 $ 3.1% 2,983 $ 3.0% 3,073 3.0% EBIT (oper profits) % of revenue $ 22,180 $ 36.7% 20,363 $ 34.8% 24,098 $ 38.6% 27,161 $ 38.8% 21,763 29.5% $ 26,556 $ 34.1% 25,076 $ 31.3% 25,829 $ 31.3% 26,604 $ 31.3% 27,402 $ 31.3% 28,224 $ 31.3% 29,071 $ 31.3% 29,943 $ 31.3% 30,841 $ 31.3% 31,766 31.3% - Taxes % of EBIT $ 6,133 $ 27.7% 5,252 $ 25.8% 6,253 $ 25.9% 4,921 $ 18.1% 5,289 24.3% $ 5,189 $ 17.5% 4,396 $ 17.5% 4,527 $ 17.5% 4,663 $ 17.5% 4,803 $ 17.5% 4,947 $ 17.5% 5,096 $ 17.5% 5,249 $ 17.5% 5,406 $ 17.5% 5,568 17.5% NOPAT % of revenue $ 16,047 $ 26.6% 15,111 $ 25.9% 17,845 $ 28.6% 22,240 $ 31.8% 16,474 22.3% $ 21,367 $ 27.4% 20,681 $ 25.8% 21,301 $ 25.8% 21,940 $ 25.8% 22,599 $ 25.8% 23,276 $ 25.8% 23,975 $ 25.8% 24,694 $ 25.8% 25,435 $ 25.8% 26,198 25.8%

37. Microsoft Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 2,056 $ 2,562 $ 2,673 $ 2,766 $ 2,967 3.4% 4.4% 4.3% 4.0% 4.0% $ - CapEx % of revenue $ 3,182 $ 5.3% 3,119 $ 5.3% 1,977 $ 3.2% 2,355 $ 3.4% 2,305 3.1% $ Working Capital % of revenue $ (10,306) $ -17.1% (7,201) $ -12.3% (6,259) $ -10.0% (6,628) $ -9.5% (9,413) -12.8% $ - WC Investment % of revenue n/a $ n/a 3,105 $ 5.3% 942 $ 1.5% (369) $ -0.5% (2,785) -3.8% $ (527) $ -0.7% (298) $ -0.4% (307) $ -0.4% (316) $ -0.4% (326) $ -0.4% (336) $ -0.4% (346) $ -0.4% (356) $ -0.4% (367) $ -0.4% (378) -0.4% FCF % of revenue n/a $ n/a 11,449 $ 19.6% 17,599 $ 28.2% 23,020 $ 32.9% 19,921 27.0% $ 22,585 $ 29.0% 21,602 $ 26.9% 22,159 $ 26.8% 22,729 $ 26.7% 23,314 $ 26.6% 23,913 $ 26.5% 24,527 $ 26.4% 25,156 $ 26.3% 25,802 $ 26.2% 26,576 26.2% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 3.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 3,047 $ 3,049 $ 3,049 $ 3,046 $ 3,040 $ 3,031 $ 3,018 $ 3,003 $ 2,983 $ 3,073 3.9% 3.8% 3.7% 3.6% 3.5% 3.4% 3.2% 3.1% 3.0% 3.0% +D&A % of revenue 2,355 $ 3.0% 20,604 $ Conclusion: Per Share Value Potential Price Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 311,754 $ 63,040 $ 11,944 $ 362,850 Last Stock Price Divide: Shares Outstanding $ 37.59 Fair Value/Share 2,573 $ 3.0% 2,651 $ 3.0% 83.2% 75.9% 17,979 $ 16,824 $ 69.3% 15,743 $ 63.2% 2,730 $ 3.0% 57.6% 14,732 $ Working Capital Equity Value (Net Present Value) $ 42.84 2,498 $ 3.0% 2,812 $ 3.0% 2,896 $ 3.0% 2,983 $ 3.0% 3,073 3.0% (9,940) $ (10,238) $ (10,545) $ (10,861) $ (11,187) $ (11,523) $ (11,869) $ (12,225) $ (12,591) -12.8% -12.8% -12.8% -12.8% -12.8% -12.8% -12.8% -12.8% -12.8% 91.2% $ 2,426 $ 3.0% 52.6% 13,785 $ 2008 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ 43,242 $ 23,662 $ 29,886 $ $ (10,306) -17.1% Interest Exp (net) Total Debt $ $ 48.0% 12,899 $ 2009 $ $ $ $ $ 49,280 31,447 27,034 2,000 (7,201) -12.3% 43.8% 12,069 $ 2010 $ $ $ $ $ 55,676 36,788 26,147 1,000 (6,259) -10.0% 43.8% 11,293 $ 175,826 2011 $ $ $ $ $ 74,918 52,772 28,774 (6,628) -9.5% 2012 $ $ $ $ $ 85,084 63,040 32,688 1,231 (9,413) -12.8% (605) $ 11,921 $ 11,944 8,470 $ 42.84 888 $ $ 706 $ 5,746 $ (692) $ 5,939 $

38. News Corp (pre-spin) Millions USD 2008 2009 Actuals 2010 Actuals 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 32,996 $ 15.1% 30,423 $ -7.8% 32,778 $ 7.7% 33,405 $ 1.9% 33,706 0.9% $ 34,380 $ 2.0% 35,068 $ 2.0% 35,769 $ 2.0% 36,484 $ 2.0% 37,214 $ 2.0% 37,958 $ 2.0% 38,718 $ 2.0% 39,492 $ 2.0% 40,282 $ 2.0% 41,087 2.0% - COGS % of revenue $ 20,531 $ 62.2% 19,563 $ 64.3% 21,015 $ 64.1% 21,058 $ 63.0% 20,785 61.7% $ 21,201 $ 61.7% 21,408 $ 61.0% 21,618 $ 60.4% 21,830 $ 59.8% 22,044 $ 59.2% 22,260 $ 58.6% 22,478 $ 58.1% 22,699 $ 57.5% 22,921 $ 56.9% 23,379 56.9% Gross Profit % of revenue $ 12,465 $ 37.8% 10,860 $ 35.7% 11,763 $ 35.9% 12,347 $ 37.0% 12,921 38.3% $ 13,179 $ 38.3% 13,659 $ 39.0% 14,151 $ 39.6% 14,654 $ 40.2% 15,170 $ 40.8% 15,698 $ 41.4% 16,239 $ 41.9% 16,793 $ 42.5% 17,361 $ 43.1% 17,708 43.1% - Operating Exp % of revenue $ 7,084 $ 21.5% 7,302 $ 24.0% 8,057 $ 24.6% 7,810 $ 23.4% 10,709 31.8% $ 8,609 $ 25.0% 8,781 $ 25.0% 8,957 $ 25.0% 9,136 $ 25.0% 9,319 $ 25.0% 9,505 $ 25.0% 9,695 $ 25.0% 9,889 $ 25.0% 10,087 $ 25.0% 10,289 25.0% - SG&A (Op Ex) % of revenue $ 6,075 $ 18.4% 6,076 $ 20.0% 6,788 $ 20.7% 6,527 $ 19.5% 9,530 28.3% $ 7,406 $ 21.5% 7,549 $ 21.5% 7,695 $ 21.5% 7,843 $ 21.5% 7,995 $ 21.5% 8,149 $ 21.5% 8,306 $ 21.5% 8,466 $ 21.4% 8,630 $ 21.4% 8,796 21.4% EBITDA % of revenue $ 6,390 $ 19.4% 4,784 $ 15.7% 4,975 $ 15.2% 5,820 $ 17.4% 3,391 10.1% $ 5,773 $ 16.8% 6,110 $ 17.4% 6,456 $ 18.0% 6,811 $ 18.7% 7,175 $ 19.3% 7,549 $ 19.9% 7,933 $ 20.5% 8,327 $ 21.1% 8,731 $ 21.7% 8,912 21.7% - D & A (Op Ex) % of revenue $ 1,009 $ 3.1% 1,226 $ 4.0% 1,269 $ 3.9% 1,283 $ 3.8% 1,179 3.5% $ 1,203 $ 3.5% 1,232 $ 3.5% 1,262 $ 3.5% 1,293 $ 3.5% 1,324 $ 3.6% 1,356 $ 3.6% 1,389 $ 3.6% 1,423 $ 3.6% 1,457 $ 3.6% 1,493 3.6% EBIT (oper profits) % of revenue $ 5,381 $ 16.3% 3,558 $ 11.7% 3,706 $ 11.3% 4,537 $ 13.6% 2,212 6.6% $ 4,570 $ 13.3% 4,878 $ 13.9% 5,194 $ 14.5% 5,518 $ 15.1% 5,851 $ 15.7% 6,193 $ 16.3% 6,544 $ 16.9% 6,904 $ 17.5% 7,274 $ 18.1% 7,420 18.1% - Taxes % of EBIT $ 1,803 $ 33.5% 2,229 $ 62.6% 679 $ 18.3% 1,029 $ 22.7% 805 36.4% $ 1,586 $ 34.7% 1,693 $ 34.7% 1,803 $ 34.7% 1,915 $ 34.7% 2,031 $ 34.7% 2,150 $ 34.7% 2,271 $ 34.7% 2,396 $ 34.7% 2,525 $ 34.7% 2,575 34.7% NOPAT % of revenue $ 3,578 $ 10.8% 1,329 $ 4.4% 3,027 $ 9.2% 3,508 $ 10.5% 1,407 4.2% $ 2,984 $ 8.7% 3,185 $ 9.1% 3,391 $ 9.5% 3,603 $ 9.9% 3,820 $ 10.3% 4,044 $ 10.7% 4,273 $ 11.0% 4,508 $ 11.4% 4,749 $ 11.8% 4,844 11.8%

39. News Corp (pre-spin) Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 1,009 $ 1,226 $ 1,269 $ 1,283 $ 1,179 3.1% 4.0% 3.9% 3.8% 3.5% $ - CapEx % of revenue $ 1,443 $ 4.4% 1,101 $ 3.6% 914 $ 2.8% 1,171 $ 3.5% 939 2.8% $ 958 $ 2.8% 977 $ 2.8% 996 $ 2.8% 1,016 $ 2.8% 1,037 $ 2.8% 1,057 $ 2.8% 1,079 $ 2.8% 1,100 $ 2.8% Working Capital % of revenue $ 799 $ 2.4% 742 $ 2.4% 582 $ 1.8% (435) $ -1.3% 478 1.4% $ 488 $ 1.4% 497 $ 1.4% 507 $ 1.4% 517 $ 1.4% 528 $ 1.4% 538 $ 1.4% 549 $ 1.4% 560 $ 1.4% 571 1.4% - WC Investment % of revenue n/a $ n/a (57) $ -0.2% (160) $ -0.5% (1,017) $ -3.0% 913 2.7% $ 10 $ 0.0% 10 $ 0.0% 10 $ 0.0% 10 $ 0.0% 10 $ 0.0% 11 $ 0.0% 11 $ 0.0% 11 $ 0.0% 11 $ 0.0% 11 0.0% FCF % of revenue n/a $ n/a 1,511 $ 5.0% 3,542 $ 10.8% 4,637 $ 13.9% 734 2.2% $ 3,219 $ 9.4% 3,430 $ 9.8% 3,647 $ 10.2% 3,869 $ 10.6% 4,097 $ 11.0% 4,332 $ 11.4% 4,572 $ 11.8% 4,820 $ 12.2% 5,073 $ 12.6% 4,922 12.0% 91.2% 83.2% 75.9% 69.3% 63.2% 57.6% 52.6% 48.0% 43.8% 43.8% 2,937 $ 2,855 $ 2,769 $ 2,680 $ 2,589 $ 2,497 $ 2,405 $ 2,312 $ 2,220 $ Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 2.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 1,203 $ 1,232 $ 1,262 $ 1,293 $ 1,324 $ 1,356 $ 1,389 $ 1,423 $ 1,457 $ 1,493 3.5% 3.5% 3.5% 3.5% 3.6% 3.6% 3.6% 3.6% 3.6% 3.6% +D&A % of revenue $ Conclusion: Per Share Value Potential Price Working Capital $ $ $ 51,554 9,626 16,597 Equity Value (Net Present Value) $ 16.93 Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ 44,583 Last Stock Price Divide: Shares Outstanding $ 17.42 Fair Value/Share 2008 2009 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ 14,362 4,662 9,182 281 799 2.4% $ $ $ $ $ Interest Exp (net) Total Debt $ $ 1,172 $ 14,505 $ 15,836 6,540 10,639 2,085 742 2.4% 2010 $ $ $ $ $ 18,024 8,709 8,862 129 582 1.8% 1,122 $ 2.8% 2011 $ $ $ $ $ 21,784 12,680 9,571 32 (435) -1.3% 1,403 3.4% 28,291 2012 $ $ $ $ $ 19,448 9,626 9,617 273 478 1.4% 840 $ 16,073 $ 1 16,597 2,633 $ 16.93 1,018 $ 15,040 $ 900 $ 13,748 $

40. Yahoo Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 7,209 $ 3.4% 6,460 $ -10.4% 6,325 $ -2.1% 4,984 $ -21.2% 4,987 0.1% $ 5,236 $ 5.0% 5,498 $ 5.0% 5,773 $ 5.0% 6,061 $ 5.0% 6,364 $ 5.0% 6,682 $ 5.0% 7,017 $ 5.0% 7,367 $ 5.0% 7,736 $ 5.0% 8,123 5.0% - COGS % of revenue $ 3,023 $ 41.9% 2,872 $ 44.5% 2,628 $ 41.5% 1,503 $ 30.2% 1,621 32.5% $ 1,503 $ 31.3% 1,722 $ 31.3% 1,808 $ 31.3% 1,899 $ 31.3% 1,994 $ 31.3% 2,093 $ 31.3% 2,198 $ 31.3% 2,308 $ 31.3% 2,423 $ 31.3% 2,545 31.3% Gross Profit % of revenue $ 4,185 $ 58.1% 3,589 $ 55.5% 3,697 $ 58.5% 3,481 $ 69.8% 3,366 67.5% $ 3,733 $ 71.3% 3,775 $ 68.7% 3,964 $ 68.7% 4,162 $ 68.7% 4,370 $ 68.7% 4,589 $ 68.7% 4,818 $ 68.7% 5,059 $ 68.7% 5,312 $ 68.7% 5,578 68.7% - Operating Exp % of revenue $ 3,613 $ 50.1% 3,158 $ 48.9% 2,867 $ 45.3% 2,681 $ 53.8% 2,800 56.1% $ 2,878 $ 55.0% 3,022 $ 55.0% 3,173 $ 55.0% 3,332 $ 55.0% 3,498 $ 55.0% 3,673 $ 55.0% 3,857 $ 55.0% 4,050 $ 55.0% 4,252 $ 55.0% 4,465 55.0% - SG&A (Op Ex) % of revenue $ 2,823 $ 39.2% 2,419 $ 37.4% 2,184 $ 34.5% 2,033 $ 40.8% 2,145 43.0% $ 2,207 $ 42.2% 2,335 $ 42.5% 2,470 $ 42.8% 2,612 $ 43.1% 2,763 $ 43.4% 2,922 $ 43.7% 3,090 $ 44.0% 3,268 $ 44.4% 3,456 $ 44.7% 3,629 44.7% EBITDA % of revenue $ 1,363 $ 18.9% 1,169 $ 18.1% 1,513 $ 23.9% 1,448 $ 29.1% 1,221 24.5% $ 1,526 $ 29.1% 1,441 $ 26.2% 1,494 $ 25.9% 1,550 $ 25.6% 1,607 $ 25.3% 1,667 $ 24.9% 1,728 $ 24.6% 1,791 $ 24.3% 1,856 $ 24.0% 1,949 24.0% - D & A (Op Ex) % of revenue $ 790 $ 11.0% 739 $ 11.4% 683 $ 10.8% 648 $ 13.0% 655 13.1% $ 671 $ 12.8% 687 $ 12.5% 703 $ 12.2% 719 $ 11.9% 735 $ 11.6% 751 $ 11.2% 766 $ 10.9% 782 $ 10.6% 796 $ 10.3% 836 10.3% EBIT (oper profits) % of revenue $ 573 $ 7.9% 430 $ 6.7% 830 $ 13.1% 800 $ 16.1% 566 11.4% $ 855 $ 16.3% 753 $ 13.7% 791 $ 13.7% 831 $ 13.7% 872 $ 13.7% 916 $ 13.7% 962 $ 13.7% 1,010 $ 13.7% 1,060 $ 13.7% 1,113 13.7% - Taxes % of EBIT $ 259 $ 45.2% 219 $ 51.0% 222 $ 26.7% 242 $ 30.3% 1,940 342.5% $ 327 $ 38.3% 288 $ 38.3% 303 $ 38.3% 318 $ 38.3% 334 $ 38.3% 351 $ 38.3% 368 $ 38.3% 387 $ 38.3% 406 $ 38.3% 426 38.3% NOPAT % of revenue $ 314 $ 4.4% 211 $ 3.3% 609 $ 9.6% 558 $ 11.2% (1,374) -27.5% $ 528 $ 10.1% 465 $ 8.5% 488 $ 8.5% 513 $ 8.5% 538 $ 8.5% 565 $ 8.5% 594 $ 8.5% 623 $ 8.5% 654 $ 8.5% 687 8.5%

41. Yahoo Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 790 $ 739 $ 683 $ 648 $ 655 11.0% 11.4% 10.8% 13.0% 13.1% $ - CapEx % of revenue $ 746 $ 10.4% 466 $ 7.2% 736 $ 11.6% 605 $ 12.1% 509 10.2% $ 535 $ 10.2% 562 $ 10.2% 591 $ 10.2% 621 $ 10.2% 652 $ 10.2% 685 $ 10.3% 720 $ 10.3% 757 $ 10.3% Working Capital % of revenue $ (412) $ -5.7% (414) $ -6.4% (164) $ -2.6% 190 $ 3.8% 179 3.6% $ 187 $ 3.6% 197 $ 3.6% 207 $ 3.6% 217 $ 3.6% 228 $ 3.6% 239 $ 3.6% 251 $ 3.6% 264 $ 3.6% 277 3.6% - WC Investment % of revenue n/a $ n/a (3) $ 0.0% 250 $ 3.9% 354 $ 7.1% (11) -0.2% $ 9 $ 0.2% 9 $ 0.2% 10 $ 0.2% 10 $ 0.2% 11 $ 0.2% 11 $ 0.2% 12 $ 0.2% 13 $ 0.2% 13 $ 0.2% 14 0.2% FCF % of revenue n/a $ n/a 486 $ 7.5% 306 $ 4.8% 247 $ 4.9% (1,217) -24.4% $ 655 $ 12.5% 581 $ 10.6% 591 $ 10.2% 601 $ 9.9% 610 $ 9.6% 619 $ 9.3% 628 $ 8.9% 635 $ 8.6% 642 $ 8.3% 673 8.3% 91.2% 83.2% 75.9% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 5.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 671 $ 687 $ 703 $ 719 $ 735 $ 751 $ 766 $ 782 $ 796 $ 836 12.8% 12.5% 12.2% 11.9% 11.6% 11.2% 10.9% 10.6% 10.3% 10.3% +D&A % of revenue $ 597 $ Conclusion: Per Share Value Potential Price Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest $ $ $ 9,988 4,184 170 $ 14,002 Last Stock Price Divide: Shares Outstanding $ 33.81 Fair Value/Share 449 $ 416 $ 63.2% 57.6% 386 $ Working Capital Equity Value (Net Present Value) $ 11.64 483 $ 69.3% 52.6% 357 $ 2008 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ Interest Exp (net) Total Debt $ $ 48.0% 330 $ 2009 4,746 3,452 1,705 (412) -5.7% $ $ $ $ $ 4,595 3,291 1,718 (414) -6.4% 43.8% 305 $ 2010 $ $ $ $ $ 4,346 2,884 1,626 (164) -2.6% 796 $ 10.3% 43.8% 281 $ 2011 $ $ $ $ $ 3,453 2,056 1,207 190 3.8% 836 10.3% 6,384 2012 $ $ $ $ $ 5,653 4,184 1,290 179 3.6% (19) $ 175 $ 170 1,203 $ 11.64 95 $ 95 $ 22 $ 108 $ (23) $ 181 $

42. Time Warner Millions USD 2008 2009 Actuals 2010 2011 2012 2013 2014 2015 2016 Best View Estimates 2017 2018 2019 2020 2021 Assump. Total Revenue % growth rate $ 26,516 $ -43.0% 25,785 $ -2.8% 26,888 $ 4.3% 28,974 $ 7.8% 28,729 -0.8% $ 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 28,729 $ 0.0% 29,016 1.0% - COGS % of revenue $ 14,911 $ 56.2% 14,235 $ 55.2% 15,023 $ 55.9% 16,311 $ 56.3% 15,934 55.5% $ 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,053 $ 55.9% 16,213 55.9% Gross Profit % of revenue $ 11,605 $ 43.8% 11,550 $ 44.8% 11,865 $ 44.1% 12,663 $ 43.7% 12,795 44.5% $ 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,676 $ 44.1% 12,803 44.1% - Operating Exp % of revenue $ 14,567 $ 54.9% 6,683 $ 25.9% 6,437 $ 23.9% 6,865 $ 23.7% 6,886 24.0% $ 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,004 $ 24.4% 7,074 24.4% - SG&A (Op Ex) % of revenue $ 7,650 $ 28.9% (938) $ -3.6% (1,164) $ -4.3% (1,725) $ -6.0% (1,216) -4.2% $ (1,103) $ -3.8% (1,107) $ -3.9% (1,112) $ -3.9% (1,117) $ -3.9% (1,122) $ -3.9% (1,127) $ -3.9% (1,131) $ -3.9% (1,136) $ -4.0% (1,141) $ -4.0% (1,152) -4.0% EBITDA % of revenue $ 3,955 $ 14.9% 12,488 $ 48.4% 13,029 $ 48.5% 14,388 $ 49.7% 14,011 48.8% $ 13,779 $ 48.0% 13,784 $ 48.0% 13,788 $ 48.0% 13,793 $ 48.0% 13,798 $ 48.0% 13,803 $ 48.0% 13,808 $ 48.1% 13,812 $ 48.1% 13,817 $ 48.1% 13,955 48.1% - D & A (Op Ex) % of revenue $ 6,917 $ 26.1% 7,621 $ 29.6% 7,601 $ 28.3% 8,590 $ 29.6% 8,102 28.2% $ 8,107 $ 28.2% 8,112 $ 28.2% 8,116 $ 28.3% 8,121 $ 28.3% 8,126 $ 28.3% 8,131 $ 28.3% 8,136 $ 28.3% 8,140 $ 28.3% 8,145 $ 28.4% 8,227 28.4% EBIT (oper profits) % of revenue $ (2,962) $ -11.2% 4,867 $ 18.9% 5,428 $ 20.2% 5,798 $ 20.0% 5,909 20.6% $ 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,672 $ 19.7% 5,729 19.7% - Taxes % of EBIT $ 692 $ -23.4% 1,194 $ 24.5% 1,348 $ 24.8% 1,484 $ 25.6% 1,526 25.8% $ 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,429 $ 25.2% 1,443 25.2% NOPAT % of revenue $ (3,654) $ -13.8% 3,673 $ 14.2% 4,080 $ 15.2% 4,314 $ 14.9% 4,383 15.3% $ 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,243 $ 14.8% 4,285 14.8%

43. Time Warner Free Cash Flow to the Firm Analysis 2008 2009 2010 2011 2012 6,917 $ 7,621 $ 7,601 $ 8,590 $ 8,102 26.1% 29.6% 28.3% 29.6% 28.2% $ - CapEx % of revenue $ 684 $ 2.6% 561 $ 2.2% 631 $ 2.3% 772 $ 2.7% 643 2.2% $ 677 $ 2.4% 682 $ 2.4% 687 $ 2.4% 693 $ 2.4% 698 $ 2.4% 703 $ 2.4% 708 $ 2.5% 713 $ 2.5% Working Capital % of revenue $ 3,425 $ 12.9% (499) $ -1.9% 858 $ 3.2% 1,057 $ 3.6% 1,367 4.8% $ 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% 1,367 $ 4.8% - WC Investment % of revenue n/a $ n/a (3,924) $ -15.2% 1,357 $ 5.0% 199 $ 0.7% 310 1.1% $ $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% $ 0.0% 0.0% FCF % of revenue n/a $ n/a 14,657 $ 56.8% 9,693 $ 36.0% 11,933 $ 41.2% 11,532 40.1% $ 11,673 $ 40.6% 11,672 $ 40.6% 11,672 $ 40.6% 11,671 $ 40.6% 11,671 $ 40.6% 11,671 $ 40.6% 11,670 $ 40.6% 11,670 $ 40.6% 11,670 $ 40.6% 11,815 40.7% Present Value factor Industry WACC 9.6% Present Value of FCF LTG (est) 1.0% $ 2013 2014 2015 2016 2017 2018 2019 2020 2021 Assump. 8,107 $ 8,112 $ 8,116 $ 8,121 $ 8,126 $ 8,131 $ 8,136 $ 8,140 $ 8,145 $ 8,227 28.2% 28.2% 28.3% 28.3% 28.3% 28.3% 28.3% 28.3% 28.4% 28.4% +D&A % of revenue 91.2% $ 10,649 $ Conclusion: Per Share Value Potential Price $ 128,279 $ 2,841 $ 19,872 Equity Value (Net Present Value) $ 113.95 $ 111,248 Last Stock Price Divide: Shares Outstanding $ 67.50 Fair Value/Share 75.9% 69.3% 63.2% 57.6% 52.6% 48.0% 43.8% 9,714 $ 8,862 $ 8,084 $ 7,375 $ 6,728 $ 6,137 $ 5,599 $ 5,108 $ 2008 2009 Current Assets - Excess Cash - Current Liabilities + Short Term Debt Working Capital % of revenue $ $ $ $ $ 16,622 1,099 14,139 2,041 3,425 12.9% $ $ $ $ $ Interest Exp (net) Total Debt $ $ 1,325 $ 25,278 $ 13,007 4,800 8,765 59 (499) -1.9% 2010 $ $ $ $ $ 13,138 3,663 8,643 26 858 3.2% 43.8% 2011 $ $ $ $ $ 697 2.4% 1,367 4.8% 83.2% Working Capital Invested Capital (Equity and Debt) Value + Excess Cash - Interest Bearing Debt, Preferred and Minority Interest 718 $ 2.5% 13,432 3,476 8,922 23 1,057 3.6% 60,024 2012 $ $ $ $ $ 13,288 2,841 9,829 749 1,367 4.8% 1,210 $ 19,521 $ 568 19,872 976 $ 113.95 1,155 $ 15,759 $ 1,178 $ 16,554 $

Google - Investment Analysis & Mgmt 120213 10pm v4 final

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