Exhibit 14

SUN MICROSYSTEMS
(in millions of U.S. dollars)
Fiscal Year-End June 3
2007 2008 2009E
Net Revenue 13,873 13,880 11,449
Cost of Sales 7,608 7,425 6,718
Gross Margin 6,265 6,455 4,731
Selling, General, & Administrative 3,851 3,955 3,461
Research & Development 2,008 1,834 1,648
Impairment of Goodwill - - 1,460
Other Operating Expense 97 294 398
Total Operating Expense 5,956 6,083 6,967
Operating Income 309 372 (2,236)
EBIT*(1-T) 201 242 (1,453)
NET PPE 1,504 1,611 1,616
Change in NET PPE 107 5
NWC 1,142 1,485 1,093
Growth of NWC 8.2% 10.7% 9.5%
Change in NET WC 343 (392)
Depreciation & Amortization 517 476 474
as % of Prior Year PP&E 34.4% 29.5% 29.3%
Net PP&E 1,504 1,611 1,616
as % of Sales 10.8% 11.6% 14.1%
Without Synergy
FCF (1,066)
Terminal Value
Enterprise Value 2,441

With Synergy
Net Revenue 13,873 13,880 11,449
Cost of Sales 7,608 7,425 6,718
Gross Margin 6,265 6,455 4,731
Selling, General, & Administrative 3,851 3,955 3,461
Research & Development 2,008 1,834 1,648
Impairment of Goodwill - - 1,460
Other Operating Expense 97 294 398
 Total Operating Expense 5,956 6,083 6,967
Customer Attrition
Integration Charges
Increase in Operating Income
Operating Income (2,236)
EBIT*(1-T) (1,453)
FCF (1,066)
Terminal Value
Enterprise value

Less Debt
Share Price

Using Multiple
Industry EBIT multiple
Industry EBITDA multiple 10021.8
Industry Sales Multiple 19940 The companies given in exhibit 9 are bigger than Sun Mic
xhibit 14 Tax Rate
CROSYSTEMS
s of U.S. dollars)
Fiscal Year-End June 30 Staff Expense
2010E 2011E 2012E 2013E 2014E 25%
12,665 13,047 13,526 13,885 14,243 20%
7,685 7,583 7,735 7,889 8,075 23%
4,980 5,464 5,791 5,996 6,168 4%

Sun MicroSystem
Debt (BV)
Shares
4,839 4,992 5,121 5,249 5,372 Share Price
141 472 670 747 796 Equity(MV)
92 307 436 486 517 Beta (Levered)
1,520 1,566 1,623 1,666 1,709 Rf
(96) 46 57 43 43 kd
1,203 1,239 1,285 1,319 1,353 Rp
10.6% 3.0% 3.7% 2.7% 2.6% ke
110 36 46 34 34 WACC
536 456 470 487 500
30.0% 30.0% 30.0% 30.0% 30.0%
1,520 1,566 1,623 1,666 1,709 Oracle
12.0% 12.0% 12.0% 12.0% 12.0% Debt (BV)
Shares
78 225 333 408 440 Share Price
4,783 Equity(MV)
Beta (Levered)
Rf
kd
Rp
ke
Unlevered Beta
New Beta Levered
WACC
12,665 13,047 13,526 13,885 14,243 Growth Rate
7,685 7,583 7,735 7,889 8,075
4,980 5,464 5,791 5,996 6,168
1,307 1,348 2,235 2,291 2,344
1,545 1,594 1,635 1,676 1,715

196 203 161 165 169

 4,839 4,992 5,121 5,249 5,372
45 Cannabilasation
750 350 Assumption is all integration expenses are exp
300 300 600 900 Spread out
(654) 422 970 1,347 1,696
(425) 274 631 876 1,102
(439) 192 528 798 1,025
14690
10,460.81 15,716
13,521.81
12,264.81
16.60

iven in exhibit 9 are bigger than Sun Microsystem and hence we may end up over valuing the firm.
 35%

SG&A R&D
32% -
22%
27% - Avg
60% 32%

2009
1257 Wd 20% Debt 703
739
6.69
4944 We 80% Equity 4944
1.73 Given Exhibit 9
2.82% 10 year Exhibit 10 most popular
11.42% Rating - Ba1 Exhibit 10
6% assumed
13.20%
12.03%

>2014
11238 Wd 10%
5046
19.06
96177 We 90%
1.27 Given Exhibit 9
2.82% 30 year bond Exhibit 10
6.35% Rating - A2 Exhibit 10
6% assumed
10.68%
1.22
1.31
10.00%
2.82% Average of last 4 years
integration expenses are expensed out in initial years