Morgan-Stanley-对analyst的培训材料2

TabIPotentialImpactofNewAccountingRulesProjectTrainingMORGANSTANLEYDEANWITTERNYIBDF13\162526\A2\11JUL2001\6:53AM\104MergerAccounting/AnalysisEstimatedEarningsImpact–S&P500LastFiscalYearReportedEarnings•Overall,approximatelyone-thirdofS&P500companieswillbeonlynominallyimpacted(lessthana1%impact)•Theimpactiscalculatedasgoodwillamortizationdividedbynetincomebeforeextraordinaryitems•Thepastmaynotrepresentthefuture:–Nopooling–IdentifiableintangibleassetsMORGANSTANLEYDEANWITTERSourceMorganStanleyEquityResearch17098897271040801201602000–1%1–5%5–10%10–20%above20%ThePercentImpactonS&P500CompaniesNumberofFirmsNote1.Adjustedmeanexcludesthe5largestpercentageadjustments85ProjectTraining3.13.56.36.57.110.511.313.813.115.116.510.24.211.04.33.97.99.93.94.13.805101520TransportationUtilitiesFinancialsBasicMaterialsEnergyConsumerCyclicalsCapitalGoodsHealthCareTechnologyConsumerStaplesCommunicationServicesTotalIndexAdj.Mean(1)MedianTheImpactofNoGoodwillAmortizationonS&P500Companies’LFYReportedEarnings%ChangeSourceMSDWEquityResearchNo.ofFirms1038724425775038795512500NYIBDF13\162526\A2\11JUL2001\6:53AM\105MergerAccounting/AnalysisPossibleMarketReactionMORGANSTANLEYDEANWITTER86ProjectTraining•Intheshortrun,somepriceadjustmentsareexpectedbecauseofanincreasedisclosureeventhoughthereisnorealeconomicchange•Inthelongrun,itisdifficulttoknowhowthemarketwillvaluethenewinformation•Mergersandacquisitionswillbecomemoretransparent(i.e.,improvedvaluediscovery)–StrongermarketreactionstoM&Aactivities–Morefocusonsubsequentdealperformance(performancemeasuresmaybelinkedtogoodwillimpairment)•Capitalizationofgoodwillandotherintangiblesisexpectedtoincreasethecompany’sassetbase,causingkeyratiossuchasreturnonoperatingassetstodrop,therebyfocusingattentiononprofitabilityratios(e.g.,ROIC)especiallyforthemoreacquisitiveplayersinanindustry•Goodwillandintangibleassetswillreceivemoreattentionandtheiranalysiswillbelinkedtovaluation(i.e.,value-addedinvestments)NYIBDF13\162526\A2\11JUL2001\6:53AM\106MergerAccounting/AnalysisPossibleMarketReaction(cont’d)MORGANSTANLEYDEANWITTERProjectTraining•Impairmentchargeswillbecomeasignalingvehicleandwillprobablybeassociatedwithrestructuring(i.e.,taking‘abigbath’)•Comparability–thenon-amortizationshouldhelptopromotecomparabilitybyreturningfocustonetincomeasareportingmetric,insteadof“cashEPS”•RecordingacquiredassetsatfairvaluewilllikelyincreaseamortizationchargesonPPEandintangibleswithprescribedlives•Issuesthatmaybedifficulttoimplementandtoauditandinturnmayweakeninformationcredibility:–Estimatingthefairvalueofareportingunitanditsrecognizednetassets–Implementingtheimpairmenttest–Identifyingotherintangibleassets–Estimatingamortizationperiodforotherintangibleassets87NYIBDF13\162526\A2\11JUL2001\6:53AM\107MergerAccounting/AnalysisPossibleImplicationsforM&AActivitiesMORGANSTANLEYDEANWITTER88ProjectTraining•Theeliminationofpoolingenablesmoreflexibilityinstructuringdeals:–Disposeofnon-coreassetsacquiredaspartofthedeal–Compensateemployeeswithequityawards(prohibitedbypooling)–Acquisitionofbusinessunitsratherthanentirecompaniesislikelytobecomemoreattractive–Repurchasestocktorealignthecapitalstructure–Utilizeearnoutstoholdthesellersaccountableforadequateperformance–Otherpost-transactionactivitiesthatareprohibitedbypooling•MoreattentiontoROICasM&Avaluationtool•Buyingtargetcompanieswhichdeveloptechnologymaybecomemoreattractivethandeveloping“inhouse”technologysincegoodwillwillnotbeamortizedwhereasresearchanddevelopmentexpensesarechargedintoearnings(notethatresearchanddevelopmentassetsacquiredinabusinesscombinationarewrittenofftoearnings)•TheincreaseM&Atransactiontransparencywillincreasescrutinyandaccountabilityofmanagement(worksbothways)NYIBDF13\162526\A2\11JUL2001\6:53AM\108MergerAccounting/AnalysisPossibleImplicationsforM&AActivities(cont’d)MORGANSTANLEYDEANWITTERProjectTraining•Morefocusonallocationofpurchaseprice:–Acquirerswillwanttominimizethestep-upinPPE,anddownplayintangibleswithdefinedlives(e.g.,patents),asallaredepreciated/amortizedandthuscauseongoingearningsdrag–Agoodwillclassificationmayevenbepreferredtoindefinitelifeintangibles.Althoughbothwillbesubjectedtoimpairment,goodwillisexaminedatthereportingunitlevel,whereasintangiblesarecalculatedonastand-alonebasis.Hence,goodwillwillbebetterpositionedtowithstandthereview,giventhebroadcollectionofassetsthatindirectlycontributetoitsvalue•ThenewaccountingtreatmentmayaffectM&Aanalysis:–BenchmarkAssessment–Priceallocation(mayhavevaluationimplications)–Identifyotherintangibles–Impairmentlikelihood(relevantwhensellingordisposinganasset)–Moreflexibilityallowscreativethinkingwhenstructuringdeals89NYIBDF13\162526\A2\11JUL2001\6:53AM\109TabJOverviewofFormerAccountingPracticesProjectTrainingMORGANSTANLEYDEANWITTERNYIBDF13\162526\A2\11JUL2001\6:53AM\110ProjectTrainingMergerAccounting/AnalysisComparisonofFormerAccountingMethodsforMergersU.S.GAAPMORGANSTANLEYDEANWITTERPoolingofInterestsMethod•BookValueorHistoricalCostConcept–Theoriginalconceptwasthat:(i)thetwocorporationswouldexchangevotingstockandt