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This spreadsheet supports STUDENT analysis of the case Roche Holding AG: Funding the

Genentech Acquisition (Case 14).

This spreadsheet was prepared by Michael J. Schill, Robert F. Vandell Research Associate Professor of Business Administration. Copyright
2011 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. For customer service inquiries,
send an e-mail to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced, stored in a retrieval system, posted
to the Internet, or transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or otherwisewithout the
permission of the Darden School Foundation.
Rev. Oct. 5, 2012

Exhibit 1
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
2008 Revenue Breakdown
(sales in millions of Swiss francs)
By Geography
North America
Western Europe
CEMAI1
Japan
Latin America
Asia-Pacific
Others

Share
41%
29%
9%
9%
6%
5%
1%

By Therapeutic Category
Oncology

Share
55%
9%

Inflammation and autoimmune


diseases, transplantation
Central nervous system
Respiratory
Metabolic diseases, bone diseases
Infectious diseases
Cardiovascular diseases
Virology
Renal anemia
Ophthalmology
Others

3%
3%
8%
1%
3%
9%
4%
3%
2%

Data source: Roche 2008 annual report.

Product (Indication)
MabThera/Rituxin (lymphoma, leukemia, rheumatoid
arthritis)
Avastin (colorectal, breast, lung, and kidney cancer)
Herceptin (breast cancer)
CellCept (transplantation)
NeoRecormon/Epogin (anemia)
Peasys (hepatitis)
Tarceva (lung cancer, pancreatic cancer)
Lucentis (macular degeneration)
Tamiflu (influenza)
Xolair (asthma)
Valcyte/Cymevene (herpes)
Xenical (weight loss and control)
Pulmozyme (cystic fibrosis)
Nutropin (growth hormone deficiency)
Neutrogin (neutropenia associated with chemotherapy)
Rocephin (bacterial infections)
Activase, TNKase (heart attack)
Madopar (Parkinsons disease)

ION

Sales
5,923
5,207
5,092
2,099
1,774
1,635
1,215
960
609
560
553
502
496
413
404
344
342
311

Exhibit 2
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Financial Statements for Roche Holdings, Financial Years Ended December 31 (in millions of Swiss
francs)

Income Statement

2004

2005

2006

2007

2008

Revenue
COGS
Gross margin

31,092
7,718
23,374

36,958
9,270
27,688

43,432
13,096
30,336

48,376
13,738
34,638

47,904
13,605
34,299

Operating expense
Sales and marketing
Research and development
Other operating
Operating income

10,423
5,154
1,572
6,225

11,816
5,672
1,011
9,189

11,588
7,286
0
11,462

11,576
8,327
0
14,735

11,317
8,720
0
14,262

311

(742)

(443)

(791)

(488)

Other nonoperating expenses (income)

(677)

769

(682)

222

589

Income tax
Minority interest
Net income

1,865
-457
6,606

2,284
-943
5,923

3,436
-1,291
7,880

3,867
-1,676
9,761

3,317
-1,875
8,969

Balance sheet
Total cash and ST investments
Total other current assets
Net PP&E
Other noncurrent assets
Total assets

12,999
16,680
12,408
16,359
58,446

20,885
14,741
15,097
18,472
69,195

24,996
15,899
16,417
17,102
74,414

24,802
18,032
17,832
17,699
78,365

21,438
17,166
18,190
19,295
76,089

Total current liabilities


Long-term debt
Unearned revenue
Other noncurrent liabilities
Total liabilities

10,134
7,077
0
13,237
30,448

9,492
9,322
183
16,864
35,861

12,692
6,191
163
15,924
34,970

14,454
3,831
243
14,354
32,882

12,104
2,971
174
16,361
31,610

Common stock
Retained earnings
Treasury stock
Comprehensive inc. and other
Total shareholder equity

160
35,960
-4,326
-3,796
27,998

160
38,624
-3,485
-1,965
33,334

160
44,251
-2,102
-2,865
39,444

160
50,922
-1,017
-4,582
45,483

160
52,081
-7,762
44,479

Net interest expense (income)

Total liabilities and SE


Data source: Capital IQ.

58,446

69,195

74,414

78,365

76,089

Exhibit 3
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Financial Statements for Genentech, Financial Years Ended December 31 (in millions of U.S. dollars)

Income statement

2004

2005

2006

Revenue
COGS
Gross margin

4,621
805
3,816

6,633
1,155
5,478

9,284 11,724 13,418


1,366 1,767 1,971
7,918 9,957 11,447

Operating expense
Sales and marketing
Research and development
Other operating
Operating income

1,088
816
739
1,173

1,435
1,118
946
1,979

2,014
1,588
1,110
3,206

2,256
2,250
1,212
4,239

2,405
2,573
1,400
5,069

(83)

(93)

(156)

(224)

(75)

Other nonoperating
expenses (income)

36

59

(35)

38

(286)

Income tax
Minority interest
Net income

435
0
785

734
0
1,279

1,290
0
2,107

1,657
0
2,768

2,004
0
3,426

Net interest expense (income)

2007

2008

Balance sheet
Total cash and ST investments
Total other current assets
Net PP&E
Other noncurrent assets
Total assets

1,665 2,365 2,493 3,975 6,198


1,760 2,021 3,211 4,778 3,875
2,091 3,349 4,173 4,986 5,404
3,887 4,412 4,965 5,201 6,310
9,403 12,147 14,842 18,940 21,787

Total current liabilities


Long-term debt
Unearned revenue
Other noncurrent liabilities
Total liabilities

1,238
412
268
703
2,621

Common stock
Additional paid in capital
Retained earnings
Comprehensive inc. and other

1,660
2,083
220
714
4,677

2,010
2,204
199
951
5,364

3,918
2,402
418
297
7,035

3,095
2,329
444
248
6,116

21
21
21
21
21
8,003 9,263 10,091 10,695 12,044
(1,533) (2,067)
(838)
992 3,482
291
253
204
197
124

Total shareholder equity


Total liabilities and SE
Data source: Capital IQ.

6,782

7,470

9,478 11,905 15,671

9,403 12,147 14,842 18,940 21,787

Exhibit 4
ROCHE HOLDINGS LTD.: FUNDING THE GENENTECH ACQUISITION
Stock Price Performance of Roche and Genentech, February 2007 to February 2009
(in Swiss francs and U.S. dollars, respectively)1

Roche Holding AG (SWX:ROG)

Genentech, Inc. (NYSE:DNA)

Source: Capital .
Correspondence of values between axes is approximate, based on exchange rates on February 28, 2007. The average rate for
the period was USD1.13/CHF1.00.
1

Roche HGenentech, Inc. (NYSE:DNA)


2/20/2007

230.6

86.94

2/21/2007

228.1

87.74

2/22/2007
2/23/2007
2/26/2007
2/27/2007
2/28/2007
3/1/2007
3/2/2007
3/5/2007
3/6/2007
3/7/2007
3/8/2007
3/9/2007
3/12/2007
3/13/2007
3/14/2007
3/15/2007
3/16/2007
3/19/2007
3/20/2007
3/21/2007
3/22/2007
3/23/2007
3/26/2007
3/27/2007
3/28/2007
3/29/2007
3/30/2007
4/2/2007
4/3/2007
4/4/2007
4/5/2007
4/6/2007

224.3
224.4
222.5
218
217.4
217.2
217.3
214.1
216
218.2
216.2
215.6
214.5
213
208.5
210.2
211.6
213.7
215.8
218
222.2
219.3
219
217.8
214.2
217.1
215
215.4
218.5
218.1
220.8
220.8

85.51
85.49
85.75
84.2
84.41
83.59
82.79
81.66
82.28
81.79
81.14
81.58
81.5
81.3
80.92
80.75
81.48
82.78
83.91
84.9
85.28
82.56
83.07
82.55
82.05
81.59
82.12
82.6
83.02
83
83.4
83.4

4/9/2007
4/10/2007
4/11/2007
4/12/2007
4/13/2007
4/16/2007
4/17/2007
4/18/2007
4/19/2007
4/20/2007
4/23/2007
4/24/2007
4/25/2007
4/26/2007
4/27/2007
4/30/2007
5/1/2007

220.8
222.9
222.6
221
221
221
223
229.1
231.5
234.4
234.9
231.5
233.4
232.3
229.5
228.2
228.2

82.64
82.56
82.69
81.63
81.33
81.17
82.37
82.09
82.37
82.4
82
81.6
81.4
81.02
81.32
79.99
82.31

5/2/2007
5/3/2007
5/4/2007
5/7/2007
5/8/2007
5/9/2007
5/10/2007
5/11/2007
5/14/2007
5/15/2007
5/16/2007
5/17/2007
5/18/2007
5/21/2007
5/22/2007
5/23/2007
5/24/2007
5/25/2007
5/28/2007
5/29/2007
5/30/2007
5/31/2007
6/1/2007
6/4/2007
6/5/2007
6/6/2007
6/7/2007
6/8/2007
6/11/2007
6/12/2007
6/13/2007
6/14/2007
6/15/2007
6/18/2007
6/19/2007
6/20/2007
6/21/2007
6/22/2007
6/25/2007
6/26/2007
6/27/2007
6/28/2007
6/29/2007
7/2/2007
7/3/2007
7/4/2007
7/5/2007
7/6/2007
7/9/2007
7/10/2007
7/11/2007
7/12/2007
7/13/2007

229.2
228.7
233
232
230.5
229.8
228.4
228.2
226.8
228.8
227
227
227.6
227.3
226.7
226.8
225.3
227.2
227.2
226.4
225.5
224.8
227.5
225.1
222.6
220.7
217.2
217.4
218
217.2
216.3
218.3
220
218.6
217.5
216.4
213.5
212.1
211.9
211.3
211.8
214.7
217.4
216.8
217.7
219.7
217.3
218.9
219.3
218.3
216.5
216.2
216.6

82.13
81.55
81.42
80.51
80.6
80.57
79.56
80.14
80
78.16
78.53
77.46
77.28
77.17
78.37
77.66
77.64
77.54
77.54
79.06
78.74
79.77
79.5
77.95
77.49
75.9
74.901
76.97
76.89
76.24
76.38
76.25
77
76.83
76.45
75.4
75.97
74.83
73.95
72.6
74.34
75.63
75.66
76.32
76.79
76.79
76.7
75.1
75.76
74.85
75.93
75.26
75.5

7/16/2007
7/17/2007
7/18/2007
7/19/2007
7/20/2007
7/23/2007
7/24/2007
7/25/2007
7/26/2007
7/27/2007
7/30/2007
7/31/2007
8/1/2007
8/2/2007
8/3/2007
8/6/2007
8/7/2007
8/8/2007
8/9/2007
8/10/2007
8/13/2007
8/14/2007
8/15/2007
8/16/2007
8/17/2007
8/20/2007
8/21/2007
8/22/2007
8/23/2007
8/24/2007
8/27/2007
8/28/2007
8/29/2007
8/30/2007
8/31/2007
9/3/2007
9/4/2007
9/5/2007
9/6/2007
9/7/2007
9/10/2007
9/11/2007
9/12/2007
9/13/2007
9/14/2007
9/17/2007
9/18/2007
9/19/2007
9/20/2007
9/21/2007
9/24/2007
9/25/2007
9/26/2007

217
215.7
214.4
220.5
218.8
217.8
216.8
215.4
210.5
210
211
214.6
214.6
213.2
209.1
208.8
210.1
215
212
207.4
209.7
208
208.7
205.2
206.3
208.9
208.6
211
211.8
211.2
212.1
209.6
208.2
208.1
210
209.9
212.3
210.7
211.4
210.1
208.5
209.1
210
211.1
207.5
206.1
206.6
210.5
210.2
211.9
214
212.5
211.7

75.19
74.74
75.27
75.17
75.15
74.91
75.3
75.81
76.39
75.47
76.25
74.38
74.4
74.29
73.42
74.16
73.92
74.58
73.46
71.67
71.95
73.37
72.96
73.22
72.62
72.4
72.4
73.09
73.32
73.51
72.99
72.98
73.56
73.53
74.81
74.81
76.88
77.96
79
79.09
79.15
78.3
78.93
78.58
78.99
77.56
79.2
80.1
79.55
79.38
79.3
79.22
79.19

9/27/2007
9/28/2007
10/1/2007
10/2/2007
10/3/2007
10/4/2007
10/5/2007
10/8/2007
10/9/2007
10/10/2007
10/11/2007
10/12/2007
10/15/2007
10/16/2007
10/17/2007
10/18/2007
10/19/2007
10/22/2007
10/23/2007
10/24/2007
10/25/2007
10/26/2007
10/29/2007
10/30/2007
10/31/2007
11/1/2007
11/2/2007
11/5/2007
11/6/2007
11/7/2007
11/8/2007
11/9/2007
11/12/2007
11/13/2007
11/14/2007
11/15/2007
11/16/2007
11/19/2007
11/20/2007
11/21/2007
11/22/2007
11/23/2007
11/26/2007
11/27/2007
11/28/2007
11/29/2007
11/30/2007
12/3/2007
12/4/2007
12/5/2007
12/6/2007
12/7/2007
12/10/2007

211.1
211.1
212.7
213
212.4
211.8
211.8
212
213.1
215.9
218.3
217.3
216.7
210.5
208.5
207.8
204.2
202.5
201.6
202.6
201.6
200
198.1
196.5
197.6
195.8
194.4
194.1
195.3
195
193.1
190.3
191.7
195.2
200.2
200.3
198.4
195.1
199.9
201.8
213.4
214.2
209.5
212
212.5
214.1
215.5
209
209.3
211.3
204.5
203.7
205

79.07
78.02
78.12
76.82
77.85
78
78.28
77.9
76.73
76.1
76.32
77.25
77.5
75.04
74.53
73.47
75
75
75.26
74.88
74.68
74.14
74.35
73.76
74.13
73.11
74.83
74.6
75.31
74.29
75.35
75.09
74.33
73.78
74.21
74.53
74.99
75.14
75.12
74.16
74.16
74.82
74.55
76.01
76.32
76.24
76.25
73.5
72.78
66.64
66.57
68.49
69.53

12/11/2007
12/12/2007
12/13/2007
12/14/2007
12/17/2007
12/18/2007
12/19/2007
12/20/2007
12/21/2007
12/24/2007
12/25/2007
12/26/2007
12/27/2007
12/28/2007
12/31/2007
1/2/2008
1/3/2008
1/4/2008
1/7/2008
1/8/2008
1/9/2008
1/10/2008
1/11/2008
1/14/2008
1/15/2008
1/16/2008
1/17/2008
1/18/2008
1/21/2008
1/22/2008
1/23/2008
1/24/2008
1/25/2008
1/28/2008
1/29/2008
1/30/2008
1/31/2008
2/1/2008
2/4/2008
2/5/2008
2/6/2008
2/7/2008
2/8/2008
2/11/2008
2/12/2008
2/13/2008
2/14/2008
2/15/2008
2/18/2008
2/19/2008
2/20/2008
2/21/2008
2/22/2008

204.8
205.3
200.1
201
198.7
197.9
196.6
196.4
195.5
195.5
195.5
195.5
195.6
195.6
195.6
195.6
192
190
192.1
203.5
207.7
208.6
205.9
203.3
198.1
197.7
201.6
203.5
193.8
195.5
190.7
194.6
194
192.2
189.4
193.5
195.8
199.4
198.8
194
196.1
193.1
191.6
190.7
193
197.3
196.7
192
194
194.2
192.2
194.2
196.1

69.89
70.58
69.74
68.43
67.57
67.29
67.33
67.96
67.9
68.12
68.12
68.06
67.13
67.51
67.07
67.4
67.11
66.38
66.27
68.29
70.11
70.88
71.5
70.64
69.62
69.94
69.75
68.77
68.77
68.35
67.66
68.43
67.79
68.84
69.53
69.56
70.16
70.81
71.49
70.78
70.52
69.92
69.79
69.48
69.92
70.85
72.12
72.67
72.67
72.84
72.37
71.75
71.599

2/25/2008
2/26/2008
2/27/2008
2/28/2008
2/29/2008
3/3/2008
3/4/2008
3/5/2008
3/6/2008
3/7/2008
3/10/2008
3/11/2008
3/12/2008
3/13/2008
3/14/2008
3/17/2008
3/18/2008
3/19/2008
3/20/2008
3/24/2008
3/25/2008
3/26/2008
3/27/2008
3/28/2008
3/31/2008
4/1/2008
4/2/2008
4/3/2008
4/4/2008
4/7/2008
4/8/2008
4/9/2008
4/10/2008
4/11/2008
4/14/2008
4/15/2008
4/16/2008
4/17/2008
4/18/2008
4/21/2008
4/22/2008
4/23/2008
4/24/2008
4/25/2008
4/28/2008
4/29/2008
4/30/2008
5/1/2008
5/2/2008
5/5/2008
5/6/2008
5/7/2008
5/8/2008

205
206.4
208.6
206
204.9
204.1
200
199.1
198.2
193.9
191.1
191.4
190.7
188.8
187.3
182.1
186
184.6
186.5
186.5
189.5
187.3
189.6
188.4
186.9
191.1
192.5
190.2
190
190.2
188.3
182.5
180.7
178.4
173
167
170.6
164.6
170.6
171.4
171
170.6
174.5
175.5
177
173.2
172.8
172.8
174
173.2
169.1
171.1
168.8

77.96
77.5
76.66
75.86
75.75
79.18
80.6
80.76
79.49
79.39
78.21
79.28
80.15
81.43
78.83
77.27
78.44
78.05
79.26
78.84
80.37
82.01
80.13
80
81.18
81.04
79.8
79.42
79.73
78.65
79.04
77.71
78
76.79
74.69
74.06
74.18
73.31
72.72
71.91
74.09
73.69
72.92
71.97
73.16
67.93
68.2
68.35
67.24
67.79
68.17
67.65
68.32

5/9/2008
5/12/2008
5/13/2008
5/14/2008
5/15/2008
5/16/2008
5/19/2008
5/20/2008
5/21/2008
5/22/2008
5/23/2008
5/26/2008
5/27/2008
5/28/2008
5/29/2008
5/30/2008
6/2/2008
6/3/2008
6/4/2008
6/5/2008
6/6/2008
6/9/2008
6/10/2008
6/11/2008
6/12/2008
6/13/2008
6/16/2008
6/17/2008
6/18/2008
6/19/2008
6/20/2008
6/23/2008
6/24/2008
6/25/2008
6/26/2008
6/27/2008
6/30/2008
7/1/2008
7/2/2008
7/3/2008
7/4/2008
7/7/2008
7/8/2008
7/9/2008
7/10/2008
7/11/2008
7/14/2008
7/15/2008
7/16/2008
7/17/2008
7/18/2008
7/21/2008
7/22/2008

167
167
171.5
173.6
177.9
177.9
181.3
179.3
178.5
178.6
174.9
172.7
176
177.5
180.2
179.7
188
187
183.5
184.8
180.8
180.4
177.9
176.8
177.9
179
176.2
175.8
174.6
175.8
171.5
173.3
175.2
176.3
175.8
175.1
184
181.8
183.6
182.8
180
179.1
180.7
183.7
185.8
180.3
182
184
180.5
176.8
179.6
171
177.2

68.53
68.37
68.55
69.26
68.83
70.19
70.2
69.46
68.22
68.89
68.53
68.53
67.56
68.06
71.01
70.87
73.95
72.7
72.47
73.11
73.69
74.09
74.35
73.91
73.8
73.77
74.65
75.17
74.36
75.06
74.76
74.18
73.45
73.78
72.44
72.72
75.9
78.56
78.14
77.94
77.94
75.93
77.91
78.09
77.91
77.75
75.39
79.25
78.77
81.16
81.82
93.88
93.55

7/23/2008
7/24/2008
7/25/2008
7/28/2008
7/29/2008
7/30/2008
7/31/2008
8/1/2008
8/4/2008
8/5/2008
8/6/2008
8/7/2008
8/8/2008
8/11/2008
8/12/2008
8/13/2008
8/14/2008
8/15/2008
8/18/2008
8/19/2008
8/20/2008
8/21/2008
8/22/2008
8/25/2008
8/26/2008
8/27/2008
8/28/2008
8/29/2008
9/1/2008
9/2/2008
9/3/2008
9/4/2008
9/5/2008
9/8/2008
9/9/2008
9/10/2008
9/11/2008
9/12/2008
9/15/2008
9/16/2008
9/17/2008
9/18/2008
9/19/2008
9/22/2008
9/23/2008
9/24/2008
9/25/2008
9/26/2008
9/29/2008
9/30/2008
10/1/2008
10/2/2008
10/3/2008

179.4
182.5
188.9
186.8
186.3
189.2
194.3
194.3
193.9
195.5
191
186.4
189.6
186.4
185.4
187.4
187.8
189
187.3
187
185.6
182
183.1
181.7
183.8
183.3
185.6
186
185
188.1
186.8
184
183.4
186
185.2
189.2
188.5
190.8
186.8
181
182
183
180.1
176
176.4
174.5
178.4
176
169.6
174.5
178.4
179.5
181.1

93.73
94.65
96
95.32
94.58
95
95.25
95.35
95.72
96
96.05
96.89
96.95
97.83
97.85
98.37
98.81
98.23
98.63
98.57
97.99
97.43
98.06
97.38
98.11
97.9
98.45
98.75
98.75
98.29
97.68
96.5
96.64
94.91
94.25
95.69
97.1
96.56
93.83
93.39
89.6
90.7
92.27
92.3
91.49
90.4
91.75
91.19
85.3
88.68
86.5
86.51
87.53

10/6/2008
10/7/2008
10/8/2008
10/9/2008
10/10/2008
10/13/2008
10/14/2008
10/15/2008
10/16/2008
10/17/2008
10/20/2008
10/21/2008
10/22/2008
10/23/2008
10/24/2008
10/27/2008
10/28/2008
10/29/2008
10/30/2008
10/31/2008
11/3/2008
11/4/2008
11/5/2008
11/6/2008
11/7/2008
11/10/2008
11/11/2008
11/12/2008
11/13/2008
11/14/2008
11/17/2008
11/18/2008
11/19/2008
11/20/2008
11/21/2008
11/24/2008
11/25/2008
11/26/2008
11/27/2008
11/28/2008
12/1/2008
12/2/2008
12/3/2008
12/4/2008
12/5/2008
12/8/2008
12/9/2008
12/10/2008
12/11/2008
12/12/2008
12/15/2008
12/16/2008
12/17/2008

171.9
175
167.1
154.4
148.2
162.4
162.8
160.3
159
175.5
180.3
170.3
168.6
170.3
168
164.1
161.2
168.5
161.3
176.8
177.2
178.1
167.8
165.3
170.3
170
167.7
166.5
170.3
176.2
168
171
166
156.2
150.5
162.1
163
163.8
162.7
170
163.8
163.5
169.1
165.9
164.7
169.6
169.8
168.1
167.2
168.2
161.9
163.8
160.2

80.62
78.19
80.56
78.75
73
81.18
79.12
81.5
81.93
83.53
84.26
85.68
82.55
81.9
79.84
78.46
78.55
80.36
82.75
82.94
83.64
83.31
83.91
81.8
83.46
83.8
80.9
80.36
82.32
81.59
80.43
80.63
78.07
73.03
72.74
76.66
76.25
75.3
75.3
76.6
71.8
71.77
75.4
73.65
74.38
77.6
77.18
77.4
77.79
77.74
77.08
77.59
78.75

12/18/2008
12/19/2008
12/22/2008
12/23/2008
12/24/2008
12/26/2008
12/29/2008
12/30/2008
12/31/2008
1/2/2009
1/5/2009
1/6/2009
1/7/2009
1/8/2009
1/9/2009
1/12/2009
1/13/2009
1/14/2009
1/15/2009
1/16/2009
1/19/2009
1/20/2009
1/21/2009
1/22/2009
1/23/2009
1/26/2009
1/27/2009
1/28/2009
1/29/2009
1/30/2009
2/2/2009
2/3/2009
2/4/2009
2/5/2009
2/6/2009
2/9/2009
2/10/2009
2/11/2009
2/12/2009
2/13/2009
2/16/2009
2/17/2009
2/18/2009
2/19/2009
2/20/2009
2/23/2009

159.4
160
163
160.5
160.5
160.5
162.5
162.5
162.5
162.5
168.7
170.5
169.9
172.5
171.9
166.1
168.6
169.2
170.4
167.2
170
170.3
170
168.9
169.4
170.6
166.5
165.6
160.3
163.4
163.5
162.6
147.8
145.4
145.2
148.6
147
147.7
148.7
148.7
148
145.3
147.2
144.4
141.4
143.3

80.3
83.75
82.55
83
82.8
82.21
81.97
82.28
82.91
82.6
83
84
84.53
84.4
86.34
87.47
86.74
85.57
85.08
85.1
85.1
82.1
83.14
81.7
84.3
81.59
83.14
83.44
84.09
81.24
82.1
82.97
82.45
82.4
83
82.7
82.69
83
84
83.25
83.25
83
84.7
84.76
85.02
84.55

Exhibit 5
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Annual Yield Rate to Maturity (U.S. Dollar, Euro, British Pound), February 2009
(in percent)
U.S.
Euro
UK
1
Treasuries
Benchmark
Sovereign
6-mo
0.34
n.a.
0.48
1
0.48
2.09
0.56
2
0.93
2.26
0.88
3
1.35
2.55
1.39
4
1.50
2.81
1.85
5
1.87
3.01
2.29
6
n.a.
3.19
2.79
7
2.18
3.35
3.06
8
2.67
3.48
3.25
9
2.80
3.60
3.50
10
2.85
3.70
3.66
12
n.a.
3.87
n.a.
15
3.45
3.99
4.13
20
3.91
3.99
4.29
25
3.90
3.83
4.34
30
3.59
3.69
4.35
Source: Bloomberg.
1

The euro benchmark is obtained from the midrate of the euro versus the EURIBOR midinterest rate swap.

Exhibit 6
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
U.S. Treasuries for S&P's Bond-Rating Categories for
February 2009
(in basis points)
Years to maturity
Rating

10

30

AAA

90

82

77

90

136

114

170

AA

210

201

198

202

224

204

242

A+

211

201

217

226

243

226

242

279

261

278

277

290

275

263

289

271

287

286

303

284

273

BBB +

406

387

409

406

412

406

394

BBB

417

398

422

424

435

418

411

BBB

493

497

510

520

527

509

506

Compiled from averages of bonds by Standard & Poor's.


A basis point is 0.01% or 0.0001; 100 basis points equal 1.0%.
Source: Bloomberg

Exhibit 7
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
History of U.S. Bond Yields for 30-Year Maturities, February 2006 to February 2009 (in percent)

Mergent Corporate Bond Yield Average - Baa Rating


Mergent Corporate Bond Yield Average - Aa Rating
U.S. Treasuries 30-Year Yield

Source: Datastream, Mergent Bond Record.

U.S. Treasuries 30-Mergent Corporate Mergent Corporate Bond Yield Average - Baa Rating
Feb-06
4.51
5.51
6.27
Mar-06
4.83
5.67
6.41
Apr-06
5.15
6.00
6.68
May-06
5.15
6.13
6.75
Jun-06
5.25
6.11
6.78
Jul-06
5.10
6.08
6.76
Aug-06
4.95
5.91
6.59
Sep-06
4.73
5.75
6.43
Oct-06
4.89
5.74
6.42
Nov-06
4.66
5.57
6.20
Dec-06
4.78
5.58
6.22
Jan-07
4.92
5.75
6.34
Feb-07
4.80
5.72
6.28
Mar-07
4.82
5.66
6.27
Apr-07
4.84
5.83
6.39
May-07
4.99
5.85
6.39
Jun-07
5.19
6.17
6.70
Jul-07
5.01
6.09
6.65
Aug-07
4.85
6.06
6.65
Sep-07
4.87
6.02
6.59
Oct-07
4.67
5.94
6.48
Nov-07
4.36
5.78
6.40
Dec-07
4.61
5.91
6.65
Jan-08
4.28
5.78
6.54
Feb-08
4.59
5.97
6.82
Mar-08
4.33
5.90
6.89
Apr-08
4.52
5.93
6.97
May-08
4.71
6.00
6.92
Jun-08
4.63
6.11
7.07
Jul-08
4.66
6.05
7.16
Aug-08
4.40
6.01
7.15
Sep-08
4.40
6.03
7.31
Oct-08
4.24
6.79
8.88
Nov-08
3.60
6.73
9.21
Dec-08
2.62
5.81
8.45
Jan-09
3.45
5.84
8.14
Feb-09
3.60
6.02
8.08

rage - Baa Rating

Exhibit 8
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
S&P Credit Ratings Overview
S&Ps global bond rating scale provides a benchmark for evaluating the relative credit
risk of issuers and issues worldwide.
Investment grade
AA
Extremely strong capacity to meet financial commitments. Highest
A
rating
AA
Very strong capacity to meet financial commitments
A
BB
B

Strong capacity to meet financial commitments, but somewhat


susceptible to adverse economic conditions and changes in
circumstances
Adequate capacity to meet financial commitments, but more
subject to adverse economic conditions

Speculative grade
BB
Less vulnerable in the near-term but faces major ongoing
uncertainties to adverse business, financial and economic
conditions
B
More vulnerable to adverse business, financial and economic
conditions but currently has the capacity to meet financial
commitments
CC
Currently
vulnerable and dependent on favorable business,
C
financial and economic conditions to meet financial commitments
CC
Currently highly vulnerable
C
D

A bankruptcy petition has been filed or similar action taken, but


payments of financial commitments are continued
Payment default on financial commitments

Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign
to show relative standing within the major rating categories.

Data source: Guide to Credit Rating Essentials, Standard and Poors, http://www2.standardandpoors.com/sp

ON

andardandpoors.com/spf/pdf /fixedincome/SP_CreditRatingsGuide.pdf (accessed February 16, 2011).

Exhibit 9
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Median Financial Ratio Values for all U.S. Rated Industrial Companies (2007 and 2008)

Number of
Debt/
EBITDA/
EBIT/
companies (Debt+BookEq) Int Expense Int Expense

Debt/
EBITDA

2007
AAA
AA
A
BBB
BB
B

26
189
539
924
470
335

0.51
0.30
0.41
0.50
0.52
0.71

95.47
35.92
12.45
8.20
6.59
3.71

74.06
31.05
9.86
6.11
4.63
2.30

2.26
0.85
1.63
2.66
2.82
4.66

AAA
AA
A
BBB
BB
B

18
182
559
924
417
321

0.51
0.26
0.43
0.50
0.52
0.75

113.97
43.97
12.78
8.23
6.40
3.41

81.62
31.21
9.89
6.42
4.51
2.10

3.25
0.81
1.81
2.47
2.82
4.92

2008

Source: Case writer analysis of Compustat data.

Exhibit 10
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Plan for Currency and Maturity of Bond Offering Tranches1
U.S. dollar-denominated
Maturity Amount (in billions of U.S. dollars) Coupon
1 year
2 years
3 years
5 years
10 years
30 years

3.00
1.25
2.50
2.75
4.50
2.50

Euro-denominated
Maturity
Amount (in billions of euros)
1 year
1.50
4 years
5.25
7 years
2.75
12 years
1.75
Sterling-denominated
Amount (in billions of British
Maturity
pounds)
6 years
1.25

Floating rate
Floating rate
Fixed rate
Fixed rate
Fixed rate
Fixed rate

Coupon
Floating rate
Fixed rate
Fixed rate
Fixed rate

Coupon
Fixed rate

Prevailing exchange rates at the time were CHF1.67/GBP1.00, CHF1.18/USD1.00, and CHF1.48/EUR1.00

D1.00, and CHF1.48/EUR1.00.

Exhibit 11
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Prevailing Prices of Sample of Recently Rated Corporate Bonds (Mid-February 2009)

Issue date

U.S. dollar-denominated
Altria
Altria
Altria
AT&T
AT&T
AT&T
Johnson & Johnson
McKesson
McKesson
Novartis
Novartis
Pfizer
Schering-Plough
Schering-Plough
Verizon
Verizon
Warner Chilcott

Years
Amount
remaining S&P
Maturity
issued Coupon
to
rating
(millions)
maturity

2/3/2009
2/3/2009
2/3/2009
1/29/2009
1/29/2009
1/29/2009
6/23/2008
2/9/2009
2/9/2009
2/10/2009
2/10/2009
2/3/2004
11/26/2003
9/17/2007
11/4/2008
11/4/2008
2/1/2006

2/6/2014
2/6/2019
2/6/2039
2/15/2014
2/15/2019
2/15/2039
7/15/2038
2/15/2014
2/15/2019
2/10/2014
2/10/2019
2/15/2014
12/1/2013
9/15/2037
11/1/2018
3/31/2039
2/1/2015

5
10
30
5
10
30
29
5
10
5
10
5
5
29
10
30
6

BBB
BBB
BBB
A
A
A
AAA
BBB+
BBB+
AA
AA
AA
AA
AA
A
A
BB

525
2,200
1,500
1,000
2,250
2,250
700
350
350
2,000
3,000
750
1,250
1,000
2,000
1,250
600

7.75
9.25
10.2
4.85
5.8
6.55
5.85
6.5
7.5
4.125
5.125
4.5
5.3
6.55
8.75
8.95
8.75

Euro-denominated
Anheuser-Busch InBev
Imperial Tobacco
John Deere
Schering-Plough
Volkswagen
Volkswagen

2/9/2009
2/10/2009
1/19/2009
10/1/2007
1/30/2009
1/30/2009

2/27/2014
2/17/2016
1/24/2014
10/1/2014
2/9/2012
2/9/2016

5
7
5
6
3
7

BBB+
BBB
A
AA
A
A

750
1,500
600
1,500
2,500
1,000

6.57
8.375
7.5
5.375
5.625
7

Pound sterling-denominated
Bayer AG
5/23/2006 5/23/2018
Imperial Tobacco
2/10/2009 2/17/2022
Tesco
2/17/2009 2/24/2014

9
13
5

A
BBB
A

350
1,000
600

Company

Source: Bloomberg and case writer analysis.

2/15/2009

5.625
9
5

UISITION
bruary 2009)

Price

105.835
104.612
105.079
99.790
98.877
96.626
111.000
103.372
106.156
101.778
100.746
105.660
103.820
101.332
118.582
124.467
95.000

100.558
101.048
105.801
99.710
100.332
100.238

100.817
107.062
100.284

Exhibit 12
ROCHE HOLDINGS AG: FUNDING THE GENENTECH ACQUISITION
Selected Comparable Companies Data for 2008
(in millions of U.S. dollars)1
Shareholder equity Total debt

Cash and
equivalents

EBITDA

Bayer AG
Schering-Plough
Johnson & Johnson
Pfizer
Wyeth
GlaxoSmithKline
Merck & Co.
AstraZeneca
Warner Chilcott
Roche Holding

21,381
10,529
46,100
57,556
19,174
15,900
21,080
15,912
1,350
41,569

21,779
8,176
11,852
17,290
11,739
25,211
6,240
11,848
963
4,051

2,740
3,373
10,768
2,122
10,016
8,758
4,368
4,286
36
4,870

8,183
2,917
19,001
20,929
7,954
15,388
7,854
12,553
508
16,751

Roche +
Genentech (Pro
Forma)

41,569

46,051

4,870

16,751

Because the Genentech financial figures are already consolidated in the Roche financial statements, only the debt and interest expense is

The pro-forma interest expense is based on an arbitrary 5% interest rate.


Source: Capital IQ and case writer analysis.

CH ACQUISITION

2008
Interest
expense
1,626
536
435
516
492
1,291
251
714
94
213

Current rating
AAAAAA
AA
A+
A+
AAAA
BBAA-

2,303

ements, only the debt and interest expense is expected to vary.