DHL Corporation and Subsidiaries - Page 27

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          critical question is to which intangible the excess is                      
          attributable.                                                               
               Next, using a relief-from-royalty methodology, respondent’s            
          expert opines that $287 million should be attributed to the DHL             
          trademark for 1990.  He surveyed a wide range of businesses and             
          found a broad range of royalties for trademark use of .7 to 10              
          percent.  He settled on a 1-percent royalty rate and also assumed           
          a 30-percent income tax rate and 6-percent growth rate.  A 12.5-            
          percent discount rate was applied in order to reach his result.             
               Respondent’s other expert, after discussing several methods,           
          chose an income approach he called “other anticipated value                 
          approach”, in which he quantified the value of increased benefits           
          in conjunction with the relief-from-royalty method (discounted              
          cash-flow model).  He described the “other anticipated value                
          approach” as one that quantifies economic benefits accruing to an           
          asset that may not be reflected in other income approaches,                 
          including marketing cost savings, operating synergies, lower                
          costs of funds, etc.  This benefit is supposedly measured in the            
          form of incremental cash-flows that the expert believes are “not            
          necessarily the result of excess earnings or avoided royalties.”            
          He then proceeded to explain that the quantification occurs by a            
          cash-flow analysis reduced to a present value by means of a                 
          discounted cash-flow technique.  Finally, it was pointed out that           
          the “other anticipated value approach” is used in conjunction               






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Last modified: May 25, 2011