AAPL-3-StatementsApple Inc. - Financial Statements($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Assumptions & Valuation OverviewValuation Date:1/29/10Last Historical Year:2009Days in Year:360Company Name:Apple Inc.Debt Issue Date:2010Debt Amount:$1,000Share Price:$192.06Share Units:1000Tax Rate:30%Basic Shares Outstanding:900,678Options Calculations (in Thousands Except Exercise Price):Basic Equity Value:$172,984Diluted Shares Outstanding:920,526ExerciseDiluted Equity Value:$176,796NameNumberPriceDilutionLess: Cash & Investments$35,395Tranche A34,375$81.1719,847Plus: Debt$0Tranche BPlus: Minority Interest$0Tranche CPlus: Preferred Stock$0Tranche DPlus: Other Liabilities$0Tranche EEnterprise Value:$141,401Total19,847HistoricalProjections20072008200920102011201220132014FY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EEV / Revenue:5.8 x3.8 x3.3 x2.6 x2.3 x2.0 x1.9 x1.7 xEV / EBIT:30.4 x16.0 x11.4 x9.1 x7.8 x7.0 x6.4 x6.0 xEV / EBITDA:28.4 x15.1 x10.7 x8.6 x7.3 x6.6 x6.1 x5.7 xEquity Value / FCF:37.3 x20.8 x17.1 x13.5 x12.1 x10.9 x10.1 x9.1 xP / E:48.9 x28.3 x21.2 x16.6 x14.1 x12.2 x11.1 x9.8 xP / BV:7.9 x5.6 x4.1 x3.1 x2.4 x2.0 x1.6 xOperating AssumptionsHistoricalProjectionsFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014ERevenue Growth %:27.2%52.5%14.4%25.0%17.0%11.0%9.0%7.0%COGS % Revenue:66.2%64.1%59.0%59.0%59.0%59.0%59.0%59.0%R&D % Revenue:2.4%2.0%1.9%1.9%1.9%1.9%1.9%1.9%SG&A % Revenue:11.1%8.9%8.3%8.3%8.3%8.3%8.3%8.3%Stock-Based Compensation % Revenue:1.0%1.4%1.7%1.7%1.7%1.7%1.7%1.7%Depreciation & Amortization % Revenue:1.3%1.3%1.7%1.7%1.7%1.7%1.7%1.7%Effective Cash Interest Rate:5.3%3.4%1.4%1.0%1.0%2.0%2.0%3.0%Debt Interest Rate:0.0%0.0%0.0%9.0%9.0%9.0%9.0%9.0%Effective Tax Rate:30.2%31.6%31.8%30.0%30.0%30.0%30.0%30.0%Accounts Receivable % Revenue:6.5%7.8%7.8%7.8%7.8%7.8%7.8%Accounts Receivable Days:23.328.228.228.228.228.228.2Inventory % COGS:2.1%1.8%1.8%1.8%1.8%1.8%1.8%Amortization of Intangibles:$40$37$28$13$10Accounts Payable % COGS:23.0%22.1%22.1%22.1%22.1%22.1%22.1%Accounts Payable Days:82.679.679.679.679.679.679.6Accrued Expenses % Operating Expenses:102.9%87.6%87.6%87.6%87.6%87.6%87.6%Short-Term Deferred Revenue % Revenue:4.3%4.8%4.8%4.8%4.8%4.8%4.8%Long-Term Deferred Revenue % Revenue:2.0%2.0%2.0%2.0%2.0%2.0%2.0%CapEx % Revenue:3.0%2.9%2.7%2.7%2.7%2.7%2.7%2.7%Income StatementFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014ERevenue:$24,578$37,491$42,905$53,631$62,749$69,651$75,919$81,234Cost of Goods Sold:$16,282$24,049$25,324$31,655$37,037$41,111$44,811$47,948Gross Profit:$8,296$13,442$17,581$21,976$25,712$28,540$31,109$33,286Operating Expenses:Research & Development:$596$759$830$1,038$1,214$1,348$1,469$1,572Selling, General & Administrative:$2,724$3,345$3,566$4,458$5,216$5,789$6,311$6,752Total Operating Expenses:$3,320$4,103$4,397$5,496$6,430$7,137$7,780$8,324Depreciation & Amortization of PP&E:$327$496$734$918$1,073$1,192$1,299$1,390Amortization of Intangibles:$0$0$0$40$37$28$13$10Stock-Based Compensation:$242$516$710$888$1,038$1,153$1,256$1,344Operating Income:$4,407$8,327$11,740$14,635$17,133$19,030$20,761$22,218Interest Income:$647$653$407$424$568$1,443$1,780$3,223Interest Expense:$0$0$0($45)($90)($90)($90)($90)Other Income & Expense:($48)($33)($81)$0$0$0$0$0Pre-Tax Income:$5,006$8,947$12,066$15,014$17,610$20,383$22,450$25,351Income Tax Provision:$1,511$2,828$3,831$4,504$5,283$6,115$6,735$7,605Net Income:$3,495$6,119$8,235$10,510$12,327$14,268$15,715$17,746Earnings Per Share (EPS):$3.93$6.78$9.08$11.59$13.59$15.73$17.33$19.56Diluted Shares Outstanding:889,292902,139907,005907,005907,005907,005907,005907,005EBIT:$4,649$8,843$12,450$15,523$18,171$20,183$22,017$23,562EBITDA:$4,976$9,339$13,184$16,480$19,282$21,403$23,329$24,962Levered Free Cash Flow:$4,735$8,505$10,311$13,061$14,618$16,158$17,507$19,382Book Value Per Share (BV):$24.17$34.56$47.17$61.94$78.98$97.70$118.76Balance SheetFY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EAssets:Current Assets:Cash & Cash-Equivalents:$11,875$6,559$20,620$35,238$51,396$68,903$88,285Short-Term Securities:$10,236$26,282$26,282$26,282$26,282$26,282$26,282Accounts Receivable:$2,422$3,361$4,201$4,915$5,456$5,947$6,364Inventory:$509$455$569$665$739$805$861Deferred Tax Assets:$1,044$4$4$4$4$4$4Other Current Assets:$3,920$3,140$3,140$3,140$3,140$3,140$3,140Total Current Assets:$30,006$39,801$54,816$70,245$87,017$105,082$124,936Long-Term Assets:Long-Term Securities:$2,379$2,554$2,554$2,554$2,554$2,554$2,554Plants, Property & Equipment:$2,455$2,839$3,352$3,951$4,617$5,342$6,118Goodwill:$207$207$207$207$207$207$207Other Intangible Assets:$285$354$314$277$249$236$226Other Assets:$839$2,011$2,011$2,011$2,011$2,011$2,011Total Assets:$36,171$47,766$63,253$79,245$96,654$115,432$136,052Liabilities & Shareholders' Equity:Current Liabilities:Accounts Payable:$5,520$5,601$7,001$8,191$9,093$9,911$10,605Accrued Expenses:$4,224$3,852$4,815$5,634$6,253$6,816$7,293Deferred Revenue:$1,617$2,053$2,566$3,003$3,333$3,633$3,887Total Current Liabilities:$11,361$11,506$14,383$16,828$18,679$20,360$21,785Long-Term Liabilities:Deferred Revenue:$768$853$1,066$1,248$1,385$1,509$1,615Long-Term Debt:$0$0$1,000$1,000$1,000$1,000$1,000Other Long-Term Liabilities:$1,745$3,502$3,502$3,502$3,502$3,502$3,502Total Liabilities:$13,874$15,861$19,951$22,577$24,565$26,371$27,902Shareholders' Equity:Common Stock:$7,177$7,177$7,177$7,177$7,177$7,177$7,177Additional Paid-In Capital:$0$1,185$2,073$3,111$4,263$5,520$6,864Treasury Stock:$0$0$0$0$0$0$0Retained Earnings:$15,129$23,364$33,874$46,201$60,470$76,185$93,930Accumulated Other Comprehensive Income:($9)$179$179$179$179$179$179Total Shareholders' Equity:$22,297$31,905$43,302$56,668$72,089$89,061$108,151Total Liabilities & SE:$36,171$47,766$63,253$79,245$96,654$115,432$136,052BALANCE CHECK:$0.000$0.000$0.000$0.000$0.000$0.000$0.000Cash Flow StatementFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EOperating Activities:Net Income:$3,495$6,119$8,235$10,510$12,327$14,268$15,715$17,746Depreciation & Amortization of PP&E:$327$496$734$918$1,073$1,192$1,299$1,390Amortization of Intangibles:$0$0$0$40$37$28$13$10Stock-Based Compensation:$242$516$710$888$1,038$1,153$1,256$1,344Deferred Income Tax Expense:$73$398$1,040$0$0$0$0$0Loss on PP&E:$12$22$26$0$0$0$0$0Changes in Operating Assets & Liabilities:Accounts Receivable:($385)($785)($939)($840)($714)($541)($491)($416)Inventory:($76)($163)$54($114)($97)($73)($66)($56)Other Current Assets:($1,279)($274)$780$0$0$0$0$0Other Assets:$285$289($1,172)$0$0$0$0$0Accounts Payable:$1,494$596$81$1,400$1,190$901$818$694Deferred Revenue:$566$718$521$727$618$468$425$360Other Liabilities:$716$1,664$1,385$963$819$620$563$477Cash Flow from Operations:$5,470$9,596$11,455$14,491$16,292$18,015$19,532$21,548Investing Activities:Purchases of Securities:($11,719)($22,965)($46,724)$0$0$0$0$0Proceeds from Maturities & Sales:$9,424$16,243$30,678$0$0$0$0$0Purchases of LT Investments:($17)($38)($101)$0$0$0$0$0Capital Expenditures:($735)($1,091)($1,144)($1,430)($1,673)($1,857)($2,024)($2,166)Acquisition of Intangibles:($251)($108)($69)$0$0$0$0$0Other:$49($230)($74)$0$0$0$0$0Cash Flow from Investing:($3,249)($8,189)($17,434)($1,430)($1,673)($1,857)($2,024)($2,166)Financing Activities:Proceeds from Common Stock:$365$483$475$0$0$0$0$0Common Stock Repurchased:$0$0$0$0$0$0$0$0Dividends Issued:$0$0$0$0$0$0$0$0Tax Benefits from Stock-Based Comp:$377$757$270$0$0$0$0$0Raise / (Pay Off) Long-Term Debt$0$0$0$1,000$0$0$0$0Cash Used for Equity Awards:($3)($124)($82)$0$0$0$0$0Cash Flow from Financing:$739$1,116$663$1,000$0$0$0$0Increase / Decrease in Cash:$2,960$2,523($5,316)$14,061$14,618$16,158$17,507$19,382Cash & Cash Equivalents:$9,352$11,875$6,559$20,620$35,238$51,396$68,903$88,285

ValSumValuation Summary - Apple Inc.($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Valuation Statistics - Apple Inc.Apple Inc. - Range of Valuation Multiples / PremiumsApple Inc. - Implied Per Share Value Range25th75thApplicable25th75thMinimumPecentileMedianPecentileMaximumApple Inc.MinimumPecentileMedianPecentileMaximumMethodology NameMultipleMultipleMultipleMultipleMultipleFigureMultipleMultipleMultipleMultipleMultiplePublic Company Comparables:2009 EV / Revenue:0.3 x0.5 x1.1 x2.8 x3.1 x$42,905$52.12$59.64$89.08$170.37$181.29Balance Sheet Adjustment:$35,3952010E EV / Revenue:0.3 x0.5 x1.0 x2.3 x2.6 x$53,63154.3266.6296.83173.80189.432009 EV / EBITDA:4.4 x7.3 x7.6 x10.6 x11.5 x$13,184101.49143.02146.90190.08203.412010E EV / EBITDA:3.7 x5.1 x5.5 x6.8 x8.4 x$16,480103.84129.06137.54160.94187.952009 P / E:15.0 x16.1 x19.7 x29.1 x47.2 x$9.08136.10145.77179.19264.11428.242010E P / E:10.9 x12.2 x16.3 x16.6 x44.6 x$11.59126.68140.94188.68192.55516.50Precedent Transactions:Trailing EV / Revenue:0.4 x1.9 x2.7 x6.0 x8.3 x$42,905$57.41$129.08$165.82$319.62$424.32Forward EV / Revenue:0.4 x2.1 x2.7 x5.0 x7.5 x$53,63163.66163.31198.04328.66472.85Trailing EV / EBITDA:8.7 x11.5 x14.4 x17.3 x39.7 x$13,184162.40202.99244.29285.53606.40Forward EV / EBITDA:9.6 x13.4 x19.1 x23.9 x32.8 x$16,480211.19277.70379.76465.76625.62Discounted Cash Flow Analysis:11-15% Discount Rate, 5-9x Terminal Multiple:$163.88$182.19$201.98$223.36$246.46

Valuation GraphMin.25thMedian75thMaxMin Point25 PointMed Point75 PointMax Point11-15% Discount Rate, 5-9x Terminal Multiple:$163.88$182.19$201.98$223.36$246.46$163.88$18.31$19.79$21.38$23.10Forward EV / EBITDA:$211.19$277.70$379.76$465.76$625.62$211.19$66.51$102.06$86.00$159.85Trailing EV / EBITDA:$162.40$202.99$244.29$285.53$606.40$162.40$40.59$41.30$41.24$320.86Forward EV / Revenue:$63.66$163.31$198.04$328.66$472.85$63.66$99.65$34.73$130.62$144.19Trailing EV / Revenue:$57.41$129.08$165.82$319.62$424.32$57.41$71.67$36.74$153.80$104.702010E P / E:$126.68$140.94$188.68$192.55$516.50$126.68$14.26$47.74$3.87$323.952009 P / E:$136.10$145.77$179.19$264.11$428.24$136.10$9.67$33.43$84.92$164.132010E EV / EBITDA:$103.84$129.06$137.54$160.94$187.95$103.84$25.23$8.47$23.41$27.012009 EV / EBITDA:$101.49$143.02$146.90$190.08$203.41$101.49$41.53$3.87$43.18$13.332010E EV / Revenue:$54.32$66.62$96.83$173.80$189.43$54.32$12.31$30.21$76.97$15.632009 EV / Revenue:$52.12$59.64$89.08$170.37$181.29$52.12$7.53$29.44$81.29$10.93

Valuation Graph

Public Company ComparablesPrecedent TransactionsDiscounted Cash Flow AnalysisMin to 25th25th to MedianMedian to 75th75th to Max

Public CompsComparable Companies - US-Based Hardware & Networking Companies with Over $20 Billion Revenue($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Operating StatisticsCapitalizationProjectedShareDilutedEquityPreferredMinorityOtherEnterpriseRevenueEBITDAEPSRevenueEBITDA MarginCompany NamePriceSharesValueCashDebtStockInterestLiabilitiesValue20092010E20092010E20092010EGrowth20092010EHewlett-Packard Company$47.072,438,478114,77913,33415,8300.00.07,155$124,430$114,552$124,179$16,433$18,186$3.14$3.878.4%14.3%14.6%Dell Inc.12.901,956,656$25,241$13,954$3,7930.00.00.015,08051,43055,3803,4264,1290.791.187.7%6.7%7.5%Cisco Systems, Inc.22.475,862,886$131,739$35,365$10,2730.0$240.0106,67134,80741,16310,07612,7740.971.3818.3%28.9%31.0%Intel Corporation19.405,527,030$107,224$17,307$2,2240.00.0$64592,78632,78439,94112,70818,3320.411.1721.8%38.8%45.9%Motorola, Inc.6.152,315,349$14,239$7,606$3,9250.0$1070.010,66523,45722,0569261,927(1.70)0.14(6.0%)3.9%8.7%Maximum$47.07131,73935,36515,8300.01077,155124,430114,552124,17916,43318,332$3.14$3.8721.8%38.8%45.9%75th Percentile22.47$114,779$17,307$10,2730.0$24$645$106,671$51,430$55,380$12,708$18,1860.971.3818.3%28.9%31.0%Median$19.40107,22413,9543,9250.00.00.092,78634,80741,16310,07612,774$0.79$1.188.4%14.3%14.6%25th Percentile12.90$25,241$13,334$3,7930.00.00.0$15,080$32,784$39,941$3,426$4,1290.411.177.7%6.7%8.7%Minimum6.15$14,239$7,606$2,2240.00.00.0$10,665$23,457$22,056$926$1,927(1.70)0.14(6.0%)3.9%7.5%Apple Inc.$192.06920,526176,796$35,395$0$0$0$0141,401$42,90553,631$13,184$16,480$9.08$11.5925.0%30.7%30.7%Valuation StatisticsCapitalizationEnterprise Value /Enterprise Value /ShareEquityEnterpriseRevenueEBITDAP / E MultipleCompany NamePriceValueValue20092010E20092010E20092010EHewlett-Packard Company$47.07114,779124,4301.1 x1.0 x7.6 x6.8 x15.0 x12.2 xDell Inc.12.90$25,241$15,0800.3 x0.3 x4.4 x3.7 x16.4 x10.9 xCisco Systems, Inc.22.47$131,739$106,6713.1 x2.6 x10.6 x8.4 x23.1 x16.3 xIntel Corporation19.40$107,224$92,7862.8 x2.3 x7.3 x5.1 x47.2 x16.6 xMotorola, Inc.6.15$14,239$10,6650.5 x0.5 x11.5 x5.5 xNM44.6 xMaximum$47.07131,7390.00.00.00.00.0124,4303.1 x2.6 x11.5 x8.4 x47.2 x44.6 x75th Percentile22.47$114,7790.00.00.00.00.0$106,6712.8 x2.3 x10.6 x6.8 x29.1 x16.6 xMedian$19.40107,2240.00.00.00.00.092,7861.1 x1.0 x7.6 x5.5 x19.7 x16.3 x25th Percentile12.90$25,2410.00.00.00.00.0$15,0800.5 x0.5 x7.3 x5.1 x16.1 x12.2 xMinimum6.15$14,2390.00.00.00.00.0$10,6650.3 x0.3 x4.4 x3.7 x15.0 x10.9 xApple Inc.$192.06176,796141,4013.3 x2.6 x10.7 x8.6 x21.2 x16.6 x

M&A-CompsNetworking & Hardware M&A Transactions Over $1 Billion with US-Based Sellers Since 1/1/2008($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Apple Inc. - Comparable M&A TransactionsOperating MetricsValuation MultiplesEV /EV /EV /EV /EquityEnterpriseTrailingForwardTrailingForwardTrailingForwardTrailingForwardAcquirer NameTarget NameDateValueValueRevenueRevenueEBITDAEBITDARevenueRevenueEBITDAEBITDAHewlett-Packard Company3Com11/11/20093,1802,7141,2651,2231521102.1 x2.2 x17.8 x24.6 xCisco Systems, Inc.Starent Networks10/13/20092,7772,3862883201541108.3 x7.5 x15.5 x21.6 xEmerson Electric Co.Avocent10/6/20091,1141,147611542105931.9 x2.1 x10.9 x12.3 xEMC CorporationData Domain7/8/20092,3622,08530137553646.9 x5.6 x39.7 x32.8 xOracle CorporationSun Microsystems4/20/20097,0755,39213,25612,4626235590.4 x0.4 x8.7 x9.6 xBrocade Communication Systems, Inc.Foundry Networks7/21/20082,8992,0636216331561253.3 x3.3 x13.2 x16.5 xMaximum7,0755,39213,25612,4626235598.3 x7.5 x39.7 x32.8 x75th Percentile$3,110$2,632$1,104$1,075$155$1216.0 x5.0 x17.3 x23.9 xMedian2,8382,2356165871531102.7 x2.7 x14.4 x19.1 x25th Percentile$2,466$2,068$378$417$117$971.9 x2.1 x11.5 x13.4 xMinimum$1,114$1,147$288$320$53$640.4 x0.4 x8.7 x9.6 x

DCFDiscounted Cash Flow Analysis - Apple Inc.($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Apple Inc. - Cash Flow ProjectionsApple Inc. - DCF Assumptions & OutputFY 2010EFY 2011EFY 2012EFY 2013EFY 2014ERevenue:$53,63162,74969,65175,91981,234Use Multiples Method?1.0EBITDA:$16,48019,28221,40323,32924,962Discount Rate:12.5%Operating Income:$14,63517,13319,03020,76122,218Terminal EBITDA Multiple:7.0 xLess: Taxes($4,391)($5,140)($5,709)($6,228)($6,665)Terminal Growth Rate:3.0%Terminal Value:174,733Plus: Depreciation$918$1,073$1,192$1,299$1,390Plus: Amortization$40$37$28$13$10PV of Terminal Value:$96,980Plus: Stock-Based Compensation$888$1,038$1,153$1,256$1,344Sum of PV of Cash Flows:$56,296Enterprise Value:$153,276Less: Increase in Working Capital:$2,136$1,815$1,374$1,248$1,058Less: Capital Expenditures($1,430)($1,673)($1,857)($2,024)($2,166)Terminal Value % EV:63.3%Unlevered Free Cash Flow$12,79514,28415,21116,32417,189Enterprise Value:$153,276Present Value of Free Cash Flow$12,06411,97111,33210,81110,119Balance Sheet Adjustment:$35,395Implied Equity Value:$188,671Normal Discount Period:1.0002.0003.0004.0005.000Mid-Year Discount:0.5001.5002.5003.5004.500Implied Price Per Share:$204.96Free Cash Flow Growth Rate:11.6%6.5%7.3%5.3%Apple Inc. - Net Present Value Sensitivity - Terminal Growth RatesDiscount Rate$204.9610.0%11.0%12.0%13.0%14.0%15.0%16.0%Terminal Growth Rate0.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.681.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.682.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.683.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.684.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.685.0%$220.90$214.27$207.97$201.98$196.28$190.85$185.68Apple Inc. - Net Present Value Sensitivity - Terminal EBITDA MultiplesDiscount Rate$204.9610.0%11.0%12.0%13.0%14.0%15.0%16.0%Terminal EBITDA Multiple4.0 x$170.39$165.99$161.81$157.83$154.03$150.40$146.955.0 x$187.23$182.09$177.20$172.54$168.11$163.88$159.866.0 x$204.06$198.18$192.59$187.26$182.19$177.37$172.777.0 x$220.90$214.27$207.97$201.98$196.28$190.85$185.688.0 x$237.74$230.37$223.36$216.70$210.36$204.33$198.599.0 x$254.58$246.46$238.75$231.42$224.44$217.81$211.50

WACCWACC Analysis - Apple Inc.($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Discount Rate Calculation - AssumptionsRisk-Free Rate:4.38%Equity Risk Premium:7.00%Interest Rate on Debt:9.00%Comparable Companies - Unlevered Beta CalculationLeveredEquityUnleveredNameBetaDebtValueTax RateBetaHewlett-Packard Company1.0415,830114,77920.0%0.94Dell Inc.1.31$3,793$25,24127.0%1.18Cisco Systems, Inc.1.23$10,273$131,73922.0%1.16Intel Corporation1.17$2,224$107,22433.0%1.15Motorola, Inc.1.87$3,925$14,23934.0%1.58Median1.231.16Apple Inc.1.57Apple Inc. - Levered Beta & WACC CalculationUnleveredEquityLeveredBetaDebtValueTax RateBetaApple Inc.1.16$0176,79630%1.16Cost of Equity Based on Comparables:12.50%Cost of Equity Based on Historical Beta:15.37%WACC = Cost of Equity * % Equity + Cost of Debt * % Debt * (1 - Tax Rate) + Cost of Preferred Stock * % Preferred StockWACC12.50%

BIWS:Daily 20-year Treasury rate from http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/ltcompositeindex_historical.shtmlBIWS:Picked from middle of standard range of 3% - 10%.

Merger-ModelMerger Model - Apple Inc. and Research in Motion Limited($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Transaction AssumptionsPer Share Purchase Price:$75.00Equity Purchase Price:$43,049% Cash:33.3%Cash Used:$14,350% Debt:33.3%Debt Issued:$14,350% Stock:33.3%New Shares Issued:74,714Foregone Cash Interest Rate:1.0%Debt Interest Rate:9.0%Revenue Synergy %:10.0%Revenue Synergy COGS %:50.0%Cost Synergies % OpEx:10.0%Goodwill Creation & Balance Sheet AdjustmentsGoodwill Calculation:Fixed Asset Write-Up:Equity Purchase Price:$43,049PP&E Write-Up %:10.0%Less: Seller Book Value:($6,987)PP&E Write-Up Amount:$174Plus: Write-Off of Existing Goodwill:$147Depreciation Period (Years):$8Total Allocable Purchase Premium:$36,209Intangible Asset Write-Up:Less: Write-Up of PP&E:($174)Purchase Price to Allocate:$36,209Less: Write-Up of Intangibles:($7,242)% Allocated to Intangibles:20.0%Less: Write-Down of DTL:($43)Intangibles Write-Up Amount:$7,242Plus: New Deferred Tax Liability:$2,225Amortization Period (Years):$5Total Goodwill Created:$30,975New Deferred Tax Liability:$2,225Buyer - Financial ProfileSeller - Financial ProfileBuyer Name:Apple Inc.Seller Name:Research in Motion LimitedShare Price:$192.06Share Price:$62.91Diluted Shares Outstanding:920,526Diluted Shares Outstanding:572,951Diluted Equity Value:$176,796Diluted Equity Value:$36,044Enterprise Value:$141,401Enterprise Value:$33,547Tax Rate:30%Tax Rate:28%Buyer - Income StatementSeller - Income StatementFY 2010EFY 2011EFY 2010EFY 2011ERevenue:$53,631$62,749Revenue:$17,231$20,868Cost of Goods Sold:$31,655$37,037Cost of Goods Sold:$9,755$11,869Gross Profit:$21,976$25,712Gross Profit:$7,476$9,000Operating Expenses:$5,496$6,430Operating Expenses:$2,698$3,259Depreciation of PP&E:$918$1,073Depreciation of PP&E:$431$563Amortization of Intangibles:$40$37Amortization of Intangibles:$359$433Stock-Based Compensation:$888$1,038Stock-Based Compensation:$52$63Operating Income:$14,635$17,133Operating Income:$3,937$4,682Interest Income / (Expense):$379$478Interest Income / (Expense):$25$33Pre-Tax Income:$15,014$17,610Pre-Tax Income:$3,962$4,714Income Tax Provision:$4,504$5,283Income Tax Provision:$1,148$1,343Net Income:$10,510$12,327Net Income:$2,814$3,371Earnings Per Share (EPS):$11.59$13.59Earnings Per Share (EPS):$5.03$6.02Diluted Shares Outstanding:907,005907,005Diluted Shares Outstanding:560,000560,000Combined Income StatementFY 2010EFY 2011ECombined Revenue:$70,862$83,617Revenue Synergies:$1,723$2,087Cost of Goods Sold:$41,410$48,905Revenue Synergy COGS:$862$1,043Gross Profit:$30,313$35,755Operating Expenses:$8,193$9,689OpEx Synergies:$270$326Depreciation of PP&E:$1,348$1,637Depr. of PP&E Write-Up:$22$22Amortization of Intangibles:$399$470Amort. of New Intangibles:$1,448$1,448Stock-Based Compensation:$939$1,101Operating Income:$18,233$21,713Interest Income / (Expense):$404$510Foregone Interest on Cash:($143)($143)Interest Paid on New Debt:($1,291)($1,291)Pre-Tax Income:$17,203$20,789Income Tax Provision:$5,161$6,237Net Income:$12,042$14,552Earnings Per Share (EPS):$12.27$14.82Diluted Shares Outstanding:981,719981,719Accretion / Dilution:$0.68$1.23Accretion / Dilution %:5.9%9.1%Sensitivity Analysis - Year 1 EPS Accretion/Dilution and Purchase Price vs. Operating Expense Synergies:Expense Synergies % Seller OpEx:5.9%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%Per Share Purchase Price$110.00(8.2%)(7.9%)(7.6%)(7.3%)(7.0%)(6.6%)(6.3%)(6.0%)(5.7%)$105.00(6.5%)(6.2%)(5.9%)(5.6%)(5.2%)(4.9%)(4.6%)(4.3%)(3.9%)$100.00(4.8%)(4.5%)(4.1%)(3.8%)(3.5%)(3.2%)(2.8%)(2.5%)(2.2%)$95.00(3.0%)(2.7%)(2.4%)(2.0%)(1.7%)(1.4%)(1.1%)(0.7%)(0.4%)$90.00(1.2%)(0.9%)(0.6%)(0.3%)0.1%0.4%0.7%1.0%1.4%$85.000.6%0.9%1.2%1.5%1.9%2.2%2.5%2.9%3.2%$80.002.4%2.7%3.0%3.4%3.7%4.0%4.3%4.7%5.0%$75.004.2%4.5%4.9%5.2%5.5%5.9%6.2%6.5%6.9%$70.006.0%6.4%6.7%7.0%7.4%7.7%8.0%8.4%8.7%$65.007.9%8.3%8.6%8.9%9.3%9.6%9.9%10.3%10.6%Sensitivity Analysis - Year 1 EPS Accretion/Dilution and Purchase Price vs. Revenue Synergies:Revenue Synergies % Seller Revenue:5.9%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%Per Share Purchase Price$110.00(11.8%)(10.7%)(9.7%)(8.7%)(7.7%)(6.6%)(5.6%)(4.6%)(3.6%)$105.00(10.1%)(9.0%)(8.0%)(7.0%)(5.9%)(4.9%)(3.9%)(2.9%)(1.8%)$100.00(8.3%)(7.3%)(6.3%)(5.2%)(4.2%)(3.2%)(2.1%)(1.1%)(0.1%)$95.00(6.6%)(5.6%)(4.5%)(3.5%)(2.4%)(1.4%)(0.4%)0.7%1.7%$90.00(4.8%)(3.8%)(2.7%)(1.7%)(0.7%)0.4%1.4%2.5%3.5%$85.00(3.1%)(2.0%)(1.0%)0.1%1.1%2.2%3.2%4.3%5.3%$80.00(1.3%)(0.2%)0.9%1.9%3.0%4.0%5.1%6.1%7.2%$75.000.6%1.6%2.7%3.7%4.8%5.9%6.9%8.0%9.0%$70.002.4%3.5%4.5%5.6%6.6%7.7%8.8%9.8%10.9%$65.004.2%5.3%6.4%7.4%8.5%9.6%10.7%11.7%12.8%

Merger-Shares-BSMerger Model - Seller Diluted Share Count & Combined Balance Sheets($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Diluted Share & Enterprise Value Calculations - SellerCompany Name:Research in Motion LimitedOptions Calculations - Current Price:Share Price:$62.91Offer Price Per Share:$75.00Tax Rate:28%ExerciseNameNumberPriceDilutionCurrent Share Price:Purchase Price:Tranche A10,470$38.574,051Basic Shares Outstanding:568,900Basic Shares Outstanding:568,900Tranche BBasic Equity Value:$35,789Basic Equity Value:$42,668Total4,051Diluted Shares Outstanding:572,951Diluted Shares Outstanding:573,986Diluted Equity Value:$36,044Diluted Equity Value:$43,049Options Calculations - Purchase Price:Less: Cash & Investments$2,498Less: Cash & Investments$2,498Plus: Debt$0Plus: Debt$0ExercisePlus: Minority Interest$0Plus: Minority Interest$0NameNumberPriceDilutionPlus: Preferred Stock$0Plus: Preferred Stock$0Tranche A10,470$38.575,086Plus: Other Liabilities$0Plus: Other Liabilities$0Tranche BEnterprise Value:$33,547Enterprise Value:$40,551Total5,086Balance Sheets - Buyer, Seller & CombinedAssets:BuyerSellerAdjustmentsCombinedCurrent Assets:Cash & Short-Term Securities:$32,841$1,664($14,350)$20,156Accounts Receivable:$3,361$2,613$0$5,974Inventory:$455$573$0$1,028Deferred Tax Assets:$4$176$0$180Other Current Assets:$3,140$190$0$3,330Total Current Assets:$39,801$5,215($14,350)$30,667Long-Term Assets:Long-Term Securities:$2,554$834$0$3,388Plants, Property & Equipment:$2,839$1,737$174$4,750Goodwill:$207$147$30,828$31,182Other Intangible Assets:$354$1,291$7,242$8,887Other Assets:$2,011$0$0$2,011Total Assets:$47,766$9,224$23,894$80,884Liabilities & Shareholders' Equity:Current Liabilities:Accounts Payable:$5,601$496$0$6,097Accrued Expenses:$3,852$1,604$0$5,456Deferred Revenue:$2,053$67$0$2,120Total Current Liabilities:$11,506$2,167$0$13,673Long-Term Liabilities:Deferred Revenue:$853$0$0$853Long-Term Debt:$0$0$14,350$14,350Deferred Income Tax Liability:$0$43$2,181$2,225Other Long-Term Liabilities:$3,502$28$0$3,530Total Liabilities:$15,861$2,238$16,531$34,630Shareholders' Equity:Common Stock:$7,177$2,236($2,236)$7,177Additional Paid-In Capital:$1,185$139$14,211$15,535Treasury Stock:$0($45)$45$0Retained Earnings:$23,364$4,664($4,664)$23,364Accumulated Other Comprehensive Income:$179($8)$8$179Total Shareholders' Equity:$31,905$6,987$7,363$46,255Total Liabilities & SE:$47,766$9,224$23,894$80,884

Basic-LBOApple Inc. - Basic LBO Model($ in Millions, Except Per Share Amounts in Dollars and Share Counts in Thousands)Transaction AssumptionsCurrent Share Price:$192.06Equity Purchase Price:$212,713Offer Premium:20.0%Enterprise Value:$177,318Offer Price Per Share:$230.47EBITDA Purchase Multiple:13.4 x% Debt:50.0%Debt Required:$106,357% Equity:50.0%Equity Used:$106,357EBITDA Exit Multiple:10.0 xPurchase Price Calculations:Basic Shares Outstanding:900,678Advisory Fee %:0.02%Basic Equity Value:$207,581Financing Fee %:0.06%Diluted Shares Outstanding:922,947Diluted Equity Value:$212,713Options Calculations - Purchase Price:Less: Cash & Investments$35,395Plus: Debt$0ExercisePlus: Minority Interest$0NameNumberPriceDilutionPlus: Preferred Stock$0Tranche A34,375$81.1722,268Plus: Other Liabilities$0Tranche BEnterprise Value:$177,318Total22,268Debt AssumptionsDebt %:50.0%Debt Required:$106,357Bank Debt %:75.0%Bank Debt:$79,768High-Yield Debt %:25.0%High-Yield Debt:$26,589Bank Debt Interest Rate:8.0%Bank Debt Principal Repayment %:10.0%High-Yield Debt Interest Rate:11.0%High-Yield Debt Principal Repayment %:0.0%Sources & UsesSources:Uses:Bank Debt:$79,768Equity Value of Company:$212,713High-Yield Debt:$26,589Advisory Fees:$43Investor Equity:$106,463Financing Fees:$64Total Sources:$212,820Total Uses:$212,820Operating AssumptionsInitial Cash Balance:$6,559Minimum Cash Balance:$5,000HistoricalProjectionsFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014ERevenue Growth %:27.2%52.5%14.4%25.0%17.0%11.0%9.0%7.0%COGS % Revenue:66.2%64.1%59.0%59.0%59.0%59.0%59.0%59.0%R&D % Revenue:2.4%2.0%1.9%1.9%1.9%1.9%1.9%1.9%SG&A % Revenue:11.1%8.9%8.3%8.3%8.3%8.3%8.3%8.3%Stock-Based Compensation % Revenue:1.0%1.4%1.7%1.7%1.7%1.7%1.7%1.7%Depreciation & Amortization % Revenue:1.3%1.3%1.7%1.7%1.7%1.7%1.7%1.7%Effective Cash Interest Rate:5.3%3.4%1.4%1.0%1.0%2.0%2.0%3.0%Effective Tax Rate:30.2%31.6%31.8%30.0%30.0%30.0%30.0%30.0%Amortization of Intangibles:$40$37$28$13$10Change in Working Capital % Revenue:5.4%5.5%1.7%4.0%2.9%2.0%1.6%1.3%CapEx % Revenue:3.0%2.9%2.7%2.7%2.7%2.7%2.7%2.7%Income StatementFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014ERevenue:$24,578$37,491$42,905$53,631$62,749$69,651$75,919$81,234Cost of Goods Sold:$16,282$24,049$25,324$31,655$37,037$41,111$44,811$47,948Gross Profit:$8,296$13,442$17,581$21,976$25,712$28,540$31,109$33,286Operating Expenses:Research & Development:$596$759$830$1,038$1,214$1,348$1,469$1,572Selling, General & Administrative:$2,724$3,345$3,566$4,458$5,216$5,789$6,311$6,752Total Operating Expenses:$3,320$4,103$4,397$5,496$6,430$7,137$7,780$8,324Depreciation & Amortization of PP&E:$327$496$734$918$1,073$1,192$1,299$1,390Amortization of Intangibles:$0$0$0$40$37$28$13$10Stock-Based Compensation:$242$516$710$888$1,038$1,153$1,256$1,344Operating Income:$4,407$8,327$11,740$14,635$17,133$19,030$20,761$22,218Interest Income / (Expense):$599$620$326($8,627)($7,954)($6,850)($5,947)($4,563)Pre-Tax Income:$5,006$8,947$12,066$6,008$9,179$12,180$14,813$17,655Income Tax Provision:$1,511$2,828$3,831$1,802$2,754$3,654$4,444$5,297Net Income:$3,495$6,119$8,235$4,205$6,425$8,526$10,369$12,359EBITDA:$4,976$9,339$13,184$16,480$19,282$21,403$23,329$24,962Cash Flow StatementFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EOperating Activities:Net Income:$4,205$6,425$8,526$10,369$12,359Depreciation & Amortization of PP&E:$918$1,073$1,192$1,299$1,390Amortization of Intangibles:$40$37$28$13$10Stock-Based Compensation:$888$1,038$1,153$1,256$1,344Decrease (Increase) in Working Capital:$2,136$1,815$1,374$1,248$1,058Cash Flow from Operations:$8,186$10,389$12,273$14,186$16,161Capital Expenditures:($1,430)($1,673)($1,857)($2,024)($2,166)Free Cash Flow:$6,756$8,716$10,415$12,161$13,995Beginning Cash Balance:$6,559$5,000$5,000$5,000$5,000Plus: Free Cash Flow:$6,756$8,716$10,415$12,161$13,995Less: Minimum Cash Balance:($5,000)($5,000)($5,000)($5,000)($5,000)Cash Available for Debt Repayment:$8,315$8,716$10,415$12,161$13,995Cash Used for Debt Repayment:($8,315)($8,716)($10,415)($12,161)($13,995)Beginning Cash Balance:$6,559$5,000$5,000$5,000$5,000Net Change in Cash:($1,559)$0$0$0$0Ending Cash Balance:$5,000$5,000$5,000$5,000$5,000Debt & Interest SchedulesFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EBeginning Bank Debt:$79,768$71,453$62,736$52,321$40,159Mandatory Repayment:($7,977)($7,977)($7,977)($7,977)($7,977)Optional Repayment:($338)($740)($2,439)($4,185)($6,018)Ending Bank Debt:$71,453$62,736$52,321$40,159$26,165Beginning High-Yield Debt:$26,589$26,589$26,589$26,589$26,589Mandatory Repayment:$0$0$0$0$0Optional Repayment:$0$0$0$0$0Ending High-Yield Debt:$26,589$26,589$26,589$26,589$26,589Interest Paid on Debt:($8,974)($8,292)($7,527)($6,624)($5,578)Interest Earned on Cash:$346$338$677$677$1,015Net Interest Income / (Expense):($8,627)($7,954)($6,850)($5,947)($4,563)Investor ReturnsFY 2007FY 2008FY 2009FY 2010EFY 2011EFY 2012EFY 2013EFY 2014EEBITDA:$13,184$24,962EBITDA Multiple:13.4 x10.0 xEnterprise Value:$177,318$249,618Investor Equity:($106,463)$0$0$0$0$230,700IRR:16.7%Sensitivity Analysis - 5-Year IRR and Purchase Premium vs. Exit MultipleExit Multiple:16.7%6.0 x7.0 x8.0 x9.0 x10.0 x11.0 x12.0 x13.0 x14.0 xPurchase Premium / Per-Share Price$278.4945.0%(4.9%)(0.5%)3.1%6.3%9.2%11.8%14.2%16.4%18.4%$268.8840.0%(3.1%)1.1%4.7%7.8%10.6%13.2%15.5%17.7%19.7%$259.2835.0%(1.3%)2.8%6.3%9.3%12.1%14.6%16.9%19.1%21.1%$249.6830.0%0.6%4.5%7.9%10.9%13.6%16.1%18.4%20.5%22.5%$240.0825.0%2.4%6.2%9.5%12.5%15.1%17.6%19.9%22.0%23.9%$230.4720.0%4.2%7.9%11.2%14.1%16.7%19.1%21.4%23.5%25.4%$220.8715.0%6.1%9.7%12.9%15.7%18.4%20.7%23.0%25.0%27.0%$211.2710.0%8.0%11.5%14.6%17.5%20.0%22.4%24.6%26.7%28.6%$201.665.0%9.9%13.4%16.4%19.2%21.8%24.1%26.3%28.3%30.3%$192.060.0%11.9%15.3%18.3%21.1%23.6%25.9%28.1%30.1%32.0%Sensitivity Analysis - 5-Year IRR and Purchase Premium vs. % Debt:% Debt:16.7%30.0%35.0%40.0%45.0%50.0%55.0%60.0%65.0%70.0%Purchase Premium / Per-Share Price$278.4945.0%8.4%8.6%8.7%9.0%9.2%9.5%9.9%10.4%11.0%$268.8840.0%9.5%9.7%10.0%10.3%10.6%11.1%11.6%12.3%13.2%$259.2835.0%10.5%10.9%11.2%11.6%12.1%12.7%13.4%14.3%15.4%$249.6830.0%11.7%12.1%12.5%13.0%13.6%14.3%15.2%16.3%17.6%$240.0825.0%12.9%13.3%13.9%14.4%15.1%16.0%17.0%18.2%19.8%$230.4720.0%14.1%14.6%15.2%15.9%16.7%17.7%18.8%20.3%22.0%$220.8715.0%15.3%16.0%16.7%17.4%18.4%19.4%20.7%22.3%24.3%$211.2710.0%16.7%17.4%18.1%19.0%20.0%21.2%22.6%24.4%26.6%$201.665.0%18.0%18.8%19.7%20.7%21.8%23.1%24.6%26.5%28.9%$192.060.0%19.5%20.3%21.3%22.4%23.6%25.0%26.7%28.7%31.3%