In this lesson, you’ll learn how to calculate the allowable NOL usage each year, and how to reconcile book amortization and depreciation with tax amortization and depreciation to determine the difference between cash taxes and book taxes, and the deferred tax liability change each year.
Sample Merger Model – Book vs. Cash Taxes & Section 382 NOLs Transcript
In this video we’re going to get started with the next part of our merger model, which is to look at the tax calculation in more detail, and take into account the fact that book taxes, and cash taxes may be different.
We have net operating losses that we need to take into account, as well. And so we want to look at all these items, properly take them into account in our tax calculation, and then figure out finally at the end, how our deferred tax liability is going to change, as a result.
And so, the basic concept here, I kind of just touched on it, but basically all we’re doing here is we’re calculating what the company should be paying out in taxes, based on its book (i.e. GAAP) taxable income and its tax rate, the buyer’s tax rate, here.
And then we’re calculating what it actually pays in taxes and cash taxes (i.e. for IRS or tax books), based on these items; the amortization of intangibles, goodwill, depreciation of the new asset writeup and such; and then also taking into account the NOL usage to figure out the final cash taxes, payable.
[01:00]
And the way it works here is that the differential, between the cash taxes payable, right here, and the actual book income tax expense, the difference between those two is going to impact our deferred tax liability line item.
And the way it works is that if your cash taxes payable, exceed the book income tax expense, then you reduce your deferred tax liability, because what you owe in future years will go down, because you’re paying out more in cash taxes, than you owe based on the book amount. If you owe less in cash taxes, then your deferred tax liability is going to increase.
So, that is how our schedule’s going to be set up. Some of the items here do get a bit confusing, but we’ve been over a lot of these concepts before, in the purchase price allocation, and in our acquisition effects, when we combined the income statements.
So, it is more advanced. This is one of the more complex topics that you’ll see in this advanced merger model. But it’s good to have an understanding of this, because you’ll run into this, and see schedules like this all of the time, with real merger models.
[02:00]
So, to start with let’s just fill in some of our information here at the top, equity purchase price. And we’re going to link in directly from our NOL schedule that we looked at before for Yahoo’s valuation for some of these.
For the equity purchase price though, I’m going to go to the merger model, right here. And remember, the reason we need this is because the equity purchase price is going to tell us how much we can actually use of our NOL balance each year.
So, we’re going to link in directly from there. Now, for the adjusted longterm rate, I’m going to link to the NOL schedule, because we want to be using the same longterm rate that we had on there. So, I have the adjusted longterm rate of 4.48%, right here.
And remember we can get this from the website that has the adjusted longterm rates, and what we want to do is take the highest rate of the past three months, when we get this. We’re also going to take the federal NOL’s from our NOL schedule, right over here. So, we’ll take the federal NOL’s from here, and then the state NOL’s, as well.
[03:00]
I’ll just add these up to get to our total. Then, for the allowed NOL usage per year, remember again, the formula is we multiply the highest adjusted longterm rate of the past three months, by our equity purchase price.
So, in this case we just take the 4.48%, we know this is already the highest, because we’ve selected it previously, on the NOL schedule and we multiply it by the equity purchase price. Now, interestingly in this case we see that the actual, allowed NOL uses per year, exceeds the total number of NOL’s we have, which is not an unusual situation.
Basically, all this is saying is that in this case, assuming that we have enough pretax income to actually apply to these NOL’s, then we’re actually going to use up our entire NOL balance, in one year here, to offset the taxable income. So, this is again not an unusual scenario, especially when you have a much bigger company acquiring a much smaller company, as is the case here.
[04:00]
Sometimes, when you have two relatively equalsized companies acquiring each other, then it’s rare to see this. In that case, you normally see an allowed NOL usage per year that is less than the total NOL balance.
But for a situation like this, where you have a company that’s five or six times the size of the other one acquiring it, then it’s not unusual to have this scenario. Now, the other piece of information that we need here, that we skipped over before is the expiration period for these NOL’s.
The reason we need this is because we need to take it into account when we figure out what our writedown, for our deferred tax asset will be, in this case. Deferred tax assets refer primarily to NOL’s, and so we need to take this into account in our calculation, to determine the appropriate amount to writedown our deferred tax assets by. So, for the NOL expiration period I’m going to go to Yahoo’s 10K here, and I’m going to search for net operating losses.
[05:00]
I’m going to go to Note 10; income taxes, right here; to see if we have any additional information. So, they’re giving us the deferred income taxes right here, but that’s not exactly what we want.
Okay, so here we have the income taxes, and they’re listing out Yahoo’s, US and foreign income taxes. So, they’re giving us the deferred income tax amounts here, but what we want is the expiration period, for these.
So, they have the deferred income tax assets, and you see here that the major part of this is the net operating loss, and tax credit carryforwards.
So, let’s just read this part. As of December 31st, 2007 the company’s federal and state NOL carryforwards were $808 million and $354 million. We have those numbers, that’s what we’re using.
[06:00]
And, it looks like right here. If not utilized the federal net operating loss carryfowards will begin to expire in 2019, and the state net loss, net operating loss carryforwards, will begin to expire in 2008.
So, unfortunately, they’re not giving us an exact period here, but we can sort of just look at this, and tell that the state net operating loss carryforwards will begin expiring very soon, whereas the federal ones will begin expiring in 2019.
So, we could take some kind of average here, based on the weighted average of the amounts of these carryforwards, and when they begin expiring. But in this case, we’re just going to do something simpler and we’re just going to look at our schedule here, and make an assumption of 10 years, for the NOL expiration period.
So, basically we’re saying that if not used, so in other words if the company cannot use them, or if they continue to have negative pretax income, then they’ll begin to expire, in 10 years. Again, not exactly correct, but the filings don’t really give us a choice. This is the best we can do to make an estimate like this.
[07:00]
We’ll say “Estimate per Yahoo – 2007 10K.” So, we have that. And now, for the NOL writedown here, so this is another item that’s similar to some of what we saw on our purchase price allocation in our merger model, where we had a lot of these tax items that differ, depending on whether it was a stock purchase or an asset purchase.
Similar to that, it’s going to be the same kind of treatment here, and the NOL writedown in this case. So, the formula for this one will be that, if our transaction type equals zero, then we’re going to write down the entire NOL amount. So, in an asset purchase or a 338(h)10 election, then we’re going to write down the entire NOL amount here, and then nothing will be available for us to use after the transaction. And so, our NOL schedules, below will essentially be blank, once we’ve taken into account the other tax items, here.
[08:00]
By contrast, in a stock purchase it’s going to work a bit differently. So, in this case we’re going to take the minimum of zero, or the total NOL’s minus the allowed NOL usage per year times the NOL expiration period.
And this formula may seem a bit confusing to you. Basically, what this is saying is that for a stock purchase, if the total NOL balance right now exceeds the allowed usage, times the number of years that we can actually use it, then we want to write this balance down, by the difference between those two amounts.
So, the difference between the total balance, versus how much we’re actually going to be applying over these five or ten years, or whatever the period is, ten years in this case. On the other hand, if our total NOL balance is going to be used up in a shorter amount of time than that.
So, if our NOL balance is going to be used up in a year or in two years or in three years or something like that, versus an expiration period of 10 years here, then we’re not going to write down anything, and it’s going to be zero in this case.
In this case you can tell just by glancing at this that our total NOL’s are less than the allowed usage per year, so in this case we’re not going to write down anything.
[09:00]
And so, in a stock purchase you could potentially write down everything, or close to everything, but actually in, I would say 90% of cases in a stock purchase when you’re looking at the NOL writedown, it actually comes out to zero. Because usually the total NOL’s will be smaller than the allowed NOL usage per year times the number of years, so most of the time in a stock purchase, this number will actually come out to zero, here.
But that’s basically the rationale for this formula. We’re comparing the total NOL’s available to the allowed usage per year times how many years we can actually use them. I should actually change this. I typed MIN; I should be typing MAX, so that’s a mistake.
The reason it’s a mistake is that the way the MIN function works, it’s going to take negative, instead of the zero as I just had there, so be careful of the signs, and whether you’re using MIN or MAX when you’re doing this, but that’s basically the rationale.
Again, we want to take either zero, or we want to take the positive number where the positive number is the difference between the NOL balance, and the allowed NOL usage per year times the number of years that we can actually use it. So, in this case it comes out to zero.
[10:00]
And then, we want to have this number, the posttransaction total NOL. So, this is going to be the total NOL balance minus our NOL writedown here. So, in a stock deal, with the numbers that we have here, this comes out to $1.1 or $1.2 billion, the same exact number as our total NOL balance, right here.
If we had an asset deal, I’m just going to go back, and change this to test everything. So, then you see that the writedown here is equal to the total NOL amount, and it comes out to zero, for our posttransaction NOL’s. I’m going to change it back to a stock purchase, for now.
So, that’s our rationale for how we use this. Now, I’m going to get into the GAAP and the pro forma tax calculations, right here. So, first I’m just going to fix this border on the side. Now, for the book taxable income, I’m going to link in directly from our merger model, the combined income statements, right here.
[11:00]
So, this is the GAAP number, we’re going to be linking to the pretax income, right there. Then for the pro forma numbers, I’m going to go for the merger model once again, and this time I’m going to be looking to the pro forma pretax income.
For the book income tax expense, this is just a standard expense that you’d expect, based on the buyer’s tax rate. So, I’m going to multiply this by the buyer tax rate, right here. And I will just copy and paste this formula, for the pro forma one, as well. So, basically the difference is that for the pro forma one, we’re paying out more in income taxes, because our pretax income here, our taxable income, is higher.
So, this is what kind of income expense we’re going to be recording in the books. And, actually the way it works in our merger model is I’m going to change the formula for our income tax calculation right here, and it’s still actually going to be the same amount, but this time I’m going to be linking it to what’s on our tax schedule, right here.
[12:00]
So, this is a really important point to make, that in a merger model like this, and in an LBO model and other types of transactional models, even when we have NOL’s and other items that affect our tax rate, the book taxes actually stay the same. So, we’re actually listing the same number on here.
Where they affect us is on the cash taxes, and so what happens is it’s going to affect the cash flow statement and balance sheet, but these items do not affect the book taxes that are on the income statement.
They’re only going to affect the deferred tax liabilities on the balance sheet, and they will, of course, affect our cash flow because we’re going to have to take those into account, as well, because our cash taxes are different.
But for book purposes, for GAAP accounting purposes, we’re actually going to record the standard tax rate, and the standard tax amount on our income statement, right here. I’ll change the color here to reflect the fact that we’re linking this in, now.
[13:00]
I’ll remove this comment, as well. Okay, so we have that in place. And now what we need to do is figure out what the cash taxes and the preNOL taxable income here is actually going to be.
And basically, the way this works is that we’re going to look at what we’ve already taken into account by looking at the book amortization of intangibles, goodwill and the asset writeup, the depreciation of the asset writeup, and then we’re going to subtract the tax amortization of intangibles, the tax amortization of goodwill, and the tax depreciation of the asset writeup.
And basically, the rationale for this, the way I would think about it, is basically the book taxable income here, already includes the effect of these items, so intangibles, goodwill, the asset writeup.
And so we’re essentially adding them back, here. We’re adding them back to see what our taxable income looked like, before these items. And then what we do is we see which of these items, we can actually deduct for tax purposes.
[14:00]
So this area up here, you can think of this as adding this back to normalize our book taxable income. And then this part here, the deductions for these taxes, these are the tax deductions. So, we’re essentially trying to normalize our book taxable income here, and then we’re trying to actually figure out our tax deduction, right here.
So, that’s how I would think about these items. It may be a bit confusing if you’re looking at this for the first time, but that’s how I would think about it, that we’re essentially trying to normalize it here, and figure out what our real taxable income might be, and then we’re trying to figure out what kind of deductions we can take, by seeing which of these are actually tax deductible, depending on the transaction structure, and the dollar amounts for each of these items.
So, what I’m going to do here is similar to what we had on our acquisition impacts on the merger model. It’s going to work very similarly to what we have here. Remember, for the new amortization expense, we link in the initial item at first, then we check to see whether we’ve used up the entire thing, and then we link across like that, and the formulas going to be almost exactly the same here.
[15:00]
So, for the book amortization of intangibles writeup, I’m going to go to the merger model and the purchase price allocation. So, I’m going to link in the book expense, right here. The book amortization of goodwill, this is always going to be zero, because goodwill’s not amortized, but still, to be complete I’m going to link in right here, then the book depreciation of the asset writeup. So, I’m going to link in right here to the $23 million number.
So, we have all those amounts. Now, we want to take into account the tax amounts for these. I’m actually going to change the sign on these to be positive. This is just to make it easier and more straightforward, when we’re actually calculating the preNOL taxable income.
[16:00]
Now, for these numbers, the tax amortization and depreciation, once again I’m going to link to the numbers that we have on our purchase price allocation. So, if the tax amortization’s going to be zero, right here, the tax amortization of goodwill is also going to be zero for a stock purchase. The tax depreciation of the asset writeup, I’m going to link in, right here.
Now, what we’re going to do is modify these formulas so that in Years 2 and 3 they work correctly, and if we’ve written off something completely, or we’ve amortized something completely, we’re no longer factoring these in. So again, this is going to be very, very similar to the formula that we’ve looked at before, for the acquisition effects under the combined Income Statement.
So, for amortization of goodwill’s, I’m going to take the minimum of – going back to this schedule – I’ll take the minimum of the book number right here, and then our total amortization, the total intangibles writeup amount, the total amount that we’re amortizing, right here, minus the sum of what we’ve already amortized. So, on this tax schedule, I’m going to take G20 through G20, right here.
[17:00]
And I’m just going to anchor this G20, so it works correctly. So, in this case we see that it’s not all being amortized in one year or two years, so it’s carried across for all three years, here. So, we have this in place, and we’ve copied this across now, and now we’re just going to repeat basically the same exact formula, for the other items on here.
So, for goodwill, we’re going to take the minimum of the goodwill book expense, and then the total goodwill created, minus the sum of what has already been amortized. And I’m going to anchor this column, once again.
[18:00]
And the same goes for the depreciation on the asset writeup, here. I’m going to link back, and we’re going to say the minimum of the book number here, and then the total writeup amount, minus the sum of what has already been depreciated. So, we have that and we’ve copied this across.
Then, for these tax items it’s basically exactly the same, except we’re going to be using the tax numbers, the yearly tax numbers, instead of the book numbers, here. And one note to make here is that, although we have tax numbers here, we can actually just still link in directly.
We don’t need to check whether it’s an asset purchase or a stock purchase, because our calculations on our merger model here have already checked for that. We’ve already set this to zero for tax purposes if it’s a stock purchase, and we’ve set it to something else, if it’s an asset or 338(h)10 purchase. So, let’s just use the same formulas here.
[19:00]
So, for the intangible asset writeup amount for tax purposes, we’re going to take the tax amount, and take the minimum of that, and then the total writeup amount minus the sum of what we had so far, and then anchor that column once again.
Now, for the tax amortization of goodwill, once again, we’re going to take the minimum of our goodwill tax expense, and then take the total amount minus the sum of what we have here, so far. We see these are all zero here, because it’s a stock purchase.
Then finally, for the asset writeup, we’re going to take the minimum of the tax number, and then our total amount minus the sum of what we have depreciated, so far. Okay, I entered the wrong formula in there, so I’m going to fix that.
[20:00]
It should be L66, instead. And now, we’ll just copy this one across. So, we have that in place. And just doing a quick spot check here, we see that these are all zero as expected, because this is a stock purchase. One thing we can do to quickly check our work here is to change this to an asset purchase toggle, and just see if everything works correctly, there.
Okay, so now we have the book amortization. Goodwill is never amortized for book purposes, so this is still zero. And then we have the tax amortization of intangibles, goodwill, and then the asset writeup. So, it looks like this is working correctly for both the stock deal, and the asset deal scenarios. I’m going to change it back to a stock transaction, for now.
[21:00]
Now what I want to do, to get to our preNOL taxable income, I’m going to take the book taxable income plus the book amortization of intangibles, plus goodwill, plus the book depreciation, minus the tax numbers.
So, we see in this case that our preNOL taxable income is slightly higher actually, for a stock purchase here, and that’s because we can’t deduct any of these items for tax purposes. So that’s why the preNOL taxable income is higher here.
For an asset purchase this would actually be lower because we can deduct all of these for tax purposes. So, that’s what creates this difference in tax treatment for a stock deal versus an asset deal here, and you can see it illustrated directly with this schedule.
Now, for the pro forma column here, to be honest we don’t really need to do this, but I’m just going to go through it anyway just to compare and contrast, and show you how this one works.
The reason we don’t need it is because our cash flow statement and balance sheet are all based on GAAP numbers, not the pro forma numbers, so this is not going to flow into anything. Nevertheless, it’s still good to show you exactly how this works, and how the tax schedule would work for the pro forma scenario here.
[22:00]
So, for intangibles and goodwill, I’m just going to enter zero for all these. And the reason is because we’re excluding them from our calculation already, for the pro forma numbers. So, I’m just entering zero for all these. And the same for the tax numbers for goodwill and intangibles. These are all zero, because we’re taking them out of our calculation, to begin with.
But, for the depreciation of the asset writeup, this is actually going to be the same as the formula that we have over here. So, I’m just going to copy this one, paste it right here. This is fine. This one we want to change it, so that it starts at cell K22 instead, and the same for this one. We want it to start at cell K22, instead.
Change this, so there’s a border here, now. And I’ll also copy in this tax depreciation of the asset writeup, as well. And, I’m going to change this to cell K25.
[23:00]
In this case there’s a minimal difference, and really the only difference here occurs because in this case, we have this book depreciation of the asset writeup, and no matching tax depreciation, here. So, in this case, our preNOL taxable income is slightly higher on a pro forma basis, but again, much smaller than the difference here for our GAAP numbers, because here we have the amortization of intangibles, that’s being included.
I’m also just going to fix the formatting here to make it consistent with everything else. So, let’s just look at the number format, right here. It’s currency. So, I’m just going to make sure that all the number formats right here are consistent. Set the decimal places to zero, and make sure there’s a symbol here that’s a dollar sign.
[24:00]
Okay, so now we have our schedules for the GAAP books, and on a pro forma basis and for figuring out what our cash taxes are. The last thing we need to do here is take into account the NOL’s, the potential NOL usage, and then the allowed NOL usage, to get to our NOL adjusted pretax income, and then to finally figure out what the cash taxes payable here are, and to figure out what our increase or decrease in deferred tax liability will be.
So, for this first line item here for potential NOL usage the formula, again is we want to look at the total NOL balance, the posttransaction total NOL’s here, and if this is greater than our preNOL taxable income right here, then what we want to do in this case is actually, use our entire preNOL taxable income, and say that that’s our potential NOL usage, here.
Remember, we don’t want to go below zero for this, so that’s why we’re setting this as our minimum. Otherwise, we want to say our posttransaction NOL’s is the total amount that we’re potentially going to be able to use in this year.
And then for future years, this formula will be similar, so I’m just going to copy it right here. The difference is that it’s going to be based on the remaining NOL balance, instead.
[25:00]
So, I’m going to link it down here, and say this is G31, instead. Now the other thing that we need to do here is check how much of this we can actually use, how much is allowed to be used in one year. And remember that IRC section 382 rules state that the allowable NOL use per year is equal to the purchase price; the equity purchase price times the highest of the adjusted long term rates.
So, we need to check our potential number against that. So, if our potential number is greater than our allowed NOL usage per year, then we want to simply take our allowed NOL usage per year number instead. Otherwise we’re going to use our potential number right here.
So we have that. Now let’s copy this one across. Now, for the NOL adjusted pretax income, we’re going to say that if our allowed NOL usage exceeds our preNOL taxable income, then we simply want to take this to zero. Otherwise we want to actually take our preNOL taxable income and then subtract the NOL usage, right here.
[26:00]
Again, this is just a check to make sure that we don’t go below zero and get into a negative taxable income. Otherwise, weird things will happen with our math here. And we can just copy this one across. Now, for the remaining NOL’s formula we’re going to look at the posttransaction total NOL’s, so their total balance available here, and check whether or not it’s greater than the allowed NOL usage.
If it is, then we want to take this number and subtract the allowed NOL usage. Otherwise, we want to say zero, again just to make sure that for certain, nothing falls below zero here. We don’t want to have negative NOL balance or negative pretax income or anything like that.
And we can copy this formula but again, we want to change the F12 here, to actually point to G31 instead, because now the remaining NOL’s is how much we actually have left at this point. So, now this schedule works correctly.
[27:00]
And so what we’re going to do now is calculate the cash taxes payable based on our NOL adjusted pretax income. And you see the effect of the NOLs here. In the first year here it’s dropping the taxable income by over a billion, the exact amount of total NOL’s.
And then, in the future years it stays the same, because again, the NOLs have been used up completely in this first year. So, in this case the pretax income stays the same as the preNOL taxable income, right here. So, for the cash taxes payable, we’re just going to multiply the NOL adjusted pretax income times the buyer tax rate.
And remember what happens here. That if our cash taxes payable exceed how much we are actually paying out on our books then what’s going to happen is that, our deferred income tax liability will decrease. It decreases, because if we’re paying out more in cash taxes, then that means we will owe the government less, at some point in the future, because we’re paying them more than what we should be, according to our GAAP books.
[28:00]
So, what we’re going to do here is take our book income tax expense, and subtract the cash taxes payable. Copy this across. And we see here that we have a fairly sizable difference, and we have our deferred tax liability, actually decreasing here. The reason is again, if you look at the book income tax expenses, they are lower than what the actual cash taxes, payable are.
The reason this happens here is because we have this hit to our pretax income from the amortization of intangibles. However, this is not tax deductible, because it’s not newly created in the acquisition, and it’s a stock purchase.
Since it’s not tax deductible then that means that we have to pay the government back, and actually pay taxes on that amount at some point in the future. We pay those in cash, and so our cash taxes payable here are going to be higher. So, our increase/decrease in deferred tax liability here is negative, which means it’s decreasing over time. By contrast, let’s go back and change this to an asset purchase.
[29:00]
In this case, it’s actually increasing. And it’s increasing, because according to our book income taxes here we’re paying one amount, but actually we’re deducting all these items here; amortization of intangibles, goodwill, and the depreciation of the asset writeup; which means that our deferred tax liability is actually increasing over time, here. And so, that’s really the difference between how a stock purchase here works, and an asset purchase.
In an asset purchase, the deferred tax liability is generally going to be increasing over time, whereas in a stock purchase it’s usually going to be decreasing, because most of the items are not tax deductible. I’m going to go back and change this to a stock purchase, for now.
And we could also go in and fill out our pro forma numbers, here. It’s kind of pointless, because we’re not using these for anything really, but we still want to look at them, and just compare and contrast. So, I’m going to copy this whole area over here, and just change what actually needs changing. So, let’s just look at these formulas. This one is fine. This one’s fine. This one’s fine.
[30:00]
The allowed NOL usage, this one’s fine. It’s linking to the correct items. I’m pressing ‘F2’ here just to go through them. You’ll be using ‘F2’ a lot in investment banking, just to go through and check the formulas, like I’m doing right here. Cash taxes payable, this formula’s correct. And it looks like everything here is actually correct.
So, we see that for the pro forma ones, if we were to actually look at this, then in the first year here, we’d actually have an increase in our deferred tax liability. Because in this case we’re simply excluding amortization of intangibles, goodwill altogether, so it’s going to be increasing, here, because we’re taking it out, which means we’re going to have to pay additional taxes on those.
And then in future years, it’s almost the same. The difference here comes from the book depreciation of the asset writeup, and the fact that we’re taking it out for book purposes, but from the fact that it’s not actually deductible for tax purposes, here.
[31:00]
So, that’s how we create our tax schedule, our cash tax schedule versus book tax schedule, and take into account the net operating losses, for a merger model like this. Now, one final thing we could do here is actually link in our deferred tax liability, but we haven’t completed our balance sheet yet, so when we actually get around to filling our projections for our balance sheet and linking that to our cash flow statement, we’re going to be coming back to this item and linking it in at that point to our balance sheet.
But these are the basics, the fundamentals for how you set up a cash and book tax schedule, like this. I know that you may be confused by some of this, so you may want to watch this again, or go over it, or try to rationalize some of it yourself.
The concepts are actually not that complicated, but some of the formulas here do get very tricky, because of the way that you have to take into account everything, and look at what has been completely amortized, what has been completely depreciated, so I realize it does get tricky.
The good news is that this is actually the most complicated part of the merger model, in my opinion, simply because this tax treatment gets very complex. A lot of investment bankers don’t actually know all the ins and outs, of everything we just did here.
[32:00]
So, keep this in mind that if you can understand this, then you will be in very, very good shape for when you start working fulltime. And when you see a model like this, because it’s very similar and you’ll actually know all these rules, and all the tricky accounting here, that we just went over.
So, coming up next we’re going to be moving onto something easier and we’ll be looking at how to calculate accretion/dilution in our merger model. How to look at breakeven synergies, and some of these metrics, and what our model so far can tell us about, whether or not this acquisition is going to be accretive or dilutive, to Microsoft’s earnings.
For more tutorials on Advanced Financial Modeling click here.
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Files & Resources
 Merger Model Cheat Sheet  Common Formulas
 Section 382 and NOL Summary
 Adjusted LongTerm Rates
 Yahoo! 2007 10K (Used for NOL Expiration Period)
 Stock vs. Asset vs. 338(h)(10) Purchases
 Lesson Transcript
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