SNOLL8313S n>IS 3NOHd

WHY DO WE HAVE THE SKUs WE HAVE?

• We want to have appealing offerings to our customers

• We have input from our channel partners (Sam's, Radio Shack)

• We have input from our carriers, sometimes with $ support (varies)

• We see "the market" going in certain directions (more camera phones, etc.)

I

PHONE COST & MARGINS

• We have seen a trend of higher average cost of phones, from around $90.00 two years ago, to $125.00 per activation now.

• With the pressure on cash, reordering cycles must be tighter and better

• The more expensive phones put more pressure on procurement accuracy when allocating scarce capital dollars

2-

A HYPOTHETICAL STUDY

• What if we did 100,000 activations per month, and ALL of our phones cost double, or $240 each?

• What if we did 100,000 activations per month, and ALL of our phones cost·half, or $60 each?

• What about all the price points in between?

3

PHONE COST MARGIN TESTING I Phone Cost I $6o.oo I $7o.oo I $8o.oo I $9o.oo I $1oo.oo I $11o.oo I $12o.oo I $13o.oo I $14o.oo I $16o.oo I $18o.oo I $2oo.oo I $22o.oo I $24o.oo I

3 Gross Activations (000) . 1.200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 4 less: Returns/Chargebacks (168) (172) (175} (179) (185) Will (197) (203) (209) (215) (221) (227) (233) (239) 5 Net Activations ·~ 1.028 ~ 1.Q21 ~ 1.009 i&Q.a. ~ illli ~ ~ lli. Ml ~

7 Retail Price • $75.00 $87.50 $100.00 $112.50 $125.00 $137.50 $150.00 $162.50 $175.00 $200.00 $225.00 $250.00 $275.00 $300.00 8 Markup/Discount .... · $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 $32.50 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 9 Invoice Cost (>$60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120~90 $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 10 Max Subsidy .. ~60.00} (~70.00} (~80.00} (~90.00} (~100.00) (~110.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) 11 Consumer Price ._.· •••. i.Q..QQ.• ~ ~ ~ WQ lQ.QQ ·-~ llO.&Q mQQ ~ ~ ~ llQQ..QQ lliQ..Q.Q

Gross Carrier Commission Returns/Chargeback Pet.

16 Gross Commission Revenue $~4.0,809. $340,800 $340,800 $340,800 $340,800 $340,800 $34Q,800· $340,800 $340,800 $340,800 $340,800 $340,800 $340,800 $340,800 17 less: Returns/Chargebacks !m47;712l (~48,734) (~49,757) (~50,779) (~52,483) (~54,187) !m55,891l (~57,595) (~59,299) (~61,003) (~62,707) (§64,411) !m66,115l (~67,819)

18 Net Commission Revenue $g93,088 $292,066 $291,043 $290,021 $288,317 $286,613 $284,909 $283,205 $281,501 $279,797 $278,093 $276,389 $274,685 ~72J)81_

20 Phone Sales Revenue .·· .... $0 $0 $0 $0 $0 $0 ·. $0 $12,000 $24,000 $48,000 $72,000 $96,000 $120,000 $144,000 21 less: Returns/Chargebacks '. ,;<.$.Q, lQ lQ lQ lQ lQ m ($2,028) (§4,176) !m8,592l (~13,248) (~18,144) (~23,280) (~28,656)

22 Net Phone Sales Revenue ~. ,> _$~ $0 - $0_ - _jO __$_Q_ $0 -----'- Jc$Q,_ L $9,972 $19,824 $39,408 $58,752 $77,856 $96,720 $115,344 --- - -

24 Net Revenue/Net Activation I··_$2MAO $284.00 $284.00 $284.00 $284.00 $284.00 $284.00 $294.00 $304.00 $324.00 $344.00 $364.00 $384.00 $404.00 25 Cost of Goods Sold / .$60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00

* 26 Gross Profit 1- $224,90 $214.00 $204.00 $194.00 $184.00 $174.00 $164.09 $174.00 $184.00 $204.00 $224.00 $244.00 $264.00 $284.00

28 Total Net Revenue $293;0,88 $292,066 $291,043 $290,021 $288,317 $286,613 $284,~09 $293,177 $301,325 $319,205 $336,845 $354,245 $371,405 $388,325 29 Cost of Goods Sold (Subsidy) i611920 $71,988 $81,984 $91,908 m1o1,520 ~111,012 ~120,.384 m119,664 m118,944 m118,224 m111,5o4 m116,784 m116,o64 m115,344

c.JQ_ Gross Profit $2~1,168 $220,078 $209,059 $198,113 $186,797 $175,601 $164;525 $173,513 $182,381 $200,981 $219,3~1 _!&_237 ,46_1_ $255,341 $272,981

32 !Gross ProfitPctofRevenue j,."]8:~%1 75.4%1 71.8%1 68.3%1 64.8%1 61.3%1 57.7o/ol 59.2%1 60.5%1 63.0%1 65.1%1 67.0%1 68.8%1 70.3%1

34 Inventory Pet of Sales (Units) • ..• 1.90,% 150% 150% 150% 150% 150% .. 150% 150% 150% 150% 150% 150% 150% 150% 35 Inventory on Hand at One Time ..•. •··1;80P 1,800 1,800 1,800 1,800 1,800 1,800; 1,800 1,800 1,800 1,800 1,800 1,800 1,800 36 Cost on Inventory on Hand ·• $~.000 $10,500 $12,000 $13,500 $15,000 $16,500 $18,000: $19,500 $21,000 $24,000 $27,000 $30,000 $33,000 $36,000

3/5/2004 CONFIDENTIAL AND PROPRIETARY INFORMATION -""•• ' "'... +

--------------------------- -··-------~----·------- ----------------- - - --------·------ . ---·------- --- -- ----,

GROSS PROFIT PER ACTIVATION $300 r- --------

$275

$250

$225

$200 +----~-----~~ -

$175

$150 ~- ---- ---

$125 -·-

$1 00 -r-, ----r---,--......,---,----,----r------r----r----r----r----r-----r--...,.-----!

$60 $70 $80 $90 $100 $110 $120 $130 $140 $160 $180 $200 $220 $240 PHONE COST

[ ___ -------------- -- ------------- ------ ------- ------------- ----------------------------------

.5

GROSS PROFIT PER ACTIVATION $300

$27 5 -+---------·-

$250

$225

WRI TREND 2001·2003 $200 --+---~-- ~ ~~~~~-------------------------

$175

$150 -l--

$125 --11----

I WRI $1 00 .LI ---,-----.,----,---r----r------"1-::±::::-r--,--,-----,-----r--,----r------J

$60 $70 $80 $90 $100 $110 $140 $160 $180 $200 $220 $240 PHONE COST

----- ----------- ----------------

b

IS THAT THE TOTAL PICTURE?

We know we have issues with the following areas:

• CASH SHRINKAGE • WAIVED SUBSIDIES • INVENTORY SHRINKAGE • REVERSE LOGISTICS • INVENTORY OBSOLESCENCE • WORKING CAPITAL CONSUMED

But they're hard to measure ..... .

7

A CLOSER LOOK AT THESE "HIDDEN COSTS"- ESTIMATES

• CASH SHRINKAGE: 2°/o- 5o/o

• WAIVED SUBSIDIES: 1%- 2.4%

• INVENTORY SHRINKAGE: 3o/o- 7%

• LOSS OF NET REALIZABLE VALUE (NRV) ON RETURNS: 14°/o- 20°/o OF UNITS RETURNED, EACH LOSING 33°/o- 46% OF NRV PER UNIT

• OBSOLETE INVENTORY: 4°/0 - 6% OF UNITS GO OBSOLETE, EACH LOSING 33°/o - 40% OF NRV PER UNIT

g

HIDDEN COSTS

• Each of the hidden costs have a greater financial impact as the cost of the phone increases (linear cost).

• However, the loss in NOT JUST linear; the rate of loss with higher priced phones grows (people are more likely to "steal" or "lose" a $250 phone than a $75 phone)

• When you double the cost of the phone, you basically triple the hidden costs

~

PHONE COST MARGIN TESTING 1 Phone Cost ··'$60,90 $70.00 $80.00 $90.00 $100.00 $110.00 $120.09 $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00

HIDDEN COSTS 44 Cash Shrinkage •. • $0 $0 $0 $0 $0 $0 .·. ?~$0 $240 $600 $1,440 $2,520 $3,840 $5,400 $7,200 45 Subsidies Waived ./ $6J9' $720 $820 $919 $1,015 $1,110 .·.· $1;204,; $1,436 $1,665 $1,892 $2,115 $2,336 $2,553 $2,768 46 Inventory Shrinkage · .;$3,24Q $4,284 $5,328 $6,480 $7,740 $9,108 .. $10;584;' $12,168 $13,860 $16,704 $19,764 $23,040 $26,532 $30,240 47 Inventory Returns NRV Loss J$3,326 $4,084 $4,906 $5,793 $6,838 $7,975 •$9,219. $10,546 $11,985 $14,435 $17,090 $19,958 $23,047 $26,364 48 Inventory Obsolescence • : $f.426. $1.773 $2,154 $2,571 $3,024 $3,515 ·.··$4,044· $4.612 $5,221 $6,264 $7,387 $8,593 $9,884 $11,262 49 Total P/L Hidden Costs [·~.61J $10,861 $13,208 $15,763 $18,617 $21,708

- ----$25,942 $29,002 $33,332 $40,734 $48,876 $57,767 $67,417 $77,834

51 Gross Profit w/o Hidden Costs i • $224,;09. $214.00 $204.00 $194.00 $184.00 $174.00 $164.Q.Q. $174.00 $184.00 $204.00 $224.00 $244.00 $264.00 $284.00 52 Hidden Costs Per Net Activ {t'$8.34' $10.56 $12.89 $15.44 $18.34 $21.51 • $24:96. $29.08 $33.63 $41.35 $49.91 $59.36 $69.70 $80.98 53 Gross Profit after Hidden Costs >$21§;66' $203.44 $191.11 $178.56 $165.66 $152.49 •$.139:.Q4 $144.92 $150.37 $162.65 $174.09 $184.64 $194.30 $203.02

55 Gross Profit Pet of Revenue :;fi:r;78.9o/o 75.4% 71:8% 68.3% 64.8% 61.3% ··. > 57~7% 59.2% 60.5% 63.0% 65.1% 67.0% 68.8% 70.3% 56 Hidden Costs Pet of Revenue ;r z~2.9% 3.7% 4.5% 5.4% 6.5% 7.6% ··.'.8.8% 9.9% 11.1% 12.8% 14.5% 16.3% 18.2% 20.0% 57 Gross Profit after Hidden Costs .... ~.·.;7;5:~% 71.6% 67.3% 62.9% 58.3% 53.7% • 49,0% 49.3% 49.5% 50.2% 50.6% 50.7% 50.6% 50.3%

59 !Hidden Cost!GP w/o Hidden 1; .. ;~~t~_3:7o;ol 4.9%{ 6.3%{ 8.0%1 10.0%1 12.4%1 15.4%1 16.7%1 18.3%1 20.3%j 22.3%1 24.3%j 26.4%1 28.5%1

Cash Shrinkage Cash Loss$

Subsidies Waived Pet. Subsidies Waived $

Inventory Shrinkage Pet. Inventory Shrinkage $

70 Inventory Units Returned 't·.: . 168. 172 175 179 185 191 . 197 .. 203 209 215 221 227 233 239 71 Cost of Inventory Per Unit . $60~00 $70.00 $80.00 $90.00 $100.00 $110.00 ; .$120.00 $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 72 Value of Inventory Returned : $10,080 $12,012 $14,016 $16,092 $18,480 $20,988 $23,616 $26,364 $29,232 $34;368 $39,744 $45,360 $51,216 $57,312 73 Pet NRV Loss •;/ 33:Q% 34.0% 35.0% 36.0% 37.0% 38.0% . ;39.0% 40.0% 41.0% 42.0% 43.0% 44.0% 45.0% 46.0% 74 Loss on Inventory Per Unit . t$1~/80 $23.80 $28.00 $32.40 $37.00 $41.80 •. $46,80 $52.00 $57.40 $67.20 $77.40 $88.00 $99.00 $110.40 75 Inventory Returns NRV Loss $ 1 ,••·$q,32€i. $4,084 $4,906 $5,793 L._ $6,83! $7,975 . ..... $Q,6j0 $10,546 $11,985 $14,435 $17,090 $19,958 $23,047 $26,364

77 Pet of Inventory going Obsolete • 4.0% 4.2% 4.4% 4.6% 4.8% 5.0% .. 5.2% 5.4%. 5.6% 5.8% 6.0% 6.2% 6.4% 6.6% 78 Obsolete Inventory Units ···•·•·· 72 76 79 83 86 90 .Q4 97 101 104 108 112 115 119 ! 79 Cost of Inventory Per Unit .$60,00 $70.00 $80.00 $90.00 $100.00 $110.00 $120~00 $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 I

80 Pet NRV Loss . 33.0% 33.5% 34.0% 34.5% 35.0% 35.5% 36.0% 36.5% 37.0% 37.5% 38.0% 38.5% 39.0% 39.5%! 81 Loss on Inventory Per Unit ,$19.80 $23.45 $27.20 $31.05 $35.00 $39.05 $43.20 $47.45 $51.80 $60.00 $68.40 $77.00 $85.80 $94.80. 82 Inventory Obsolescence Lo~s $. $1,4~ $1,773 $2,154 $2,571 $3,024 $3,515 $4,044 $4,612 $5,221 $6,264 $7,387 $8,593 $9,884 $11,262J

--- -

3/5/2004 CONFIDENTIAL AND PROPRIETARY INFORMATION Peae 2 of5-/ 0

---------~ --~---~----------~------ ·- -~---~------·-·· ----~~~--------,

GROSS PROFIT PER ACTIVATION $300 ~-------------------------~

$275 -!--------~- ~-- -----~---

$250

----

$225 -~~------.=, ==BE:=F::::=O=:RE:=;H~ID~D:=;:;EN~C~O~ST<Ts~j

$200

$175

$150 -~---~---~--------------------------- ~ ~-

$125 ~--·--------- -------

I TMS I I WRI I

~

-.....

AFTER HIDDEN COSTS

$1 00 --1--t-..,---.,------:-------..----r---r--l------r-----r----,----,----.,.-------,----,------J

~ $70 $80 $90 $100 $110 ~ $130 $140 $160 $180 $200 $220 $240 PkONE COST

----·--~-----------·---~------ ------- -----------~-

II

PHONE COST MARGIN TESTING 1 I Phone Cost .•• ·· $6o.oo 1 $7o.oo I $8o.oo I $9o.oo I $1 oo.oo I $11 o.oo I $12o~oo I $13o.oo I $14o.oo I $16o.oo I $18o.oo I $2oo.oo I $22o.oo I $24o.oo I

Pro Forma P/L BEFORE HIDDEN COSTS

110 Doors 111 Activations/Door/Me

113 Gross Activations (000) . <1,650 1,575 1,500 1,425 1,350 1,275 1,200 1,125 1,050 975 900 825 750 675 114 less: Returns/Chargebacks : (231} (225) (219) (212) (208) (203) . (197) (190) (183) (175) (166) (156) (146) (134) 115 Net Activations .y• ··:·:1J.12. 1Jilll 1,281 1.lli 1,142 .1...Qll . . .hQQ.a ~ §§I aQQ 1M ~ ~ §i1

117 Retail Price ., .• $75.pO $87.50 $100.00 $112.50 $125.00 $137.50 $11~0.00 $162.50 $175.00 $200.00 $225.00 $250.00 $275.00 $300.00 118 Markup/Discount •. $15,00 $17.50 $20.00 $22.50 $25.00 $27.50 ·· .. $30.00 $32.50 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 119 Invoice Cost \ $6Q.OQ $70.00 $80.00 $90.00 $100.00 $110.00 . $120.00 $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 120 Max Subsidy ·J~60.00) (FO.OO) (~80.00) (~90.00) (~100.00) (~11 0.00) (~120;00} (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00) (~120.00)

121 Consumer Price ··· ...••• IQ]Q. WQ WQ WQ WQ WQ ::.&QQ .. liQ,QQ 1ZQ.QQ ~ W1.QQ 1e.Q.QQ llQQ.Q.Q W.Q.QQ

Gross Carrier Commission Returns/Chargeback Pet.

126 Gross Commission Revenue $468,600. $447,300 $426,000 $404,700 $383,400 $362,100 $340,800 $319,500 $298,200 $276,900 $255,600 $234,300 $213,000 $191,700 127 less: Returns/Chargebacks (~65,604) (~63,964) (~62,196) (~60,300) (~59,044) (~57,574) (~55,891} (~53,996) (~51,887) (~49,565} (~47,030) (~44,283) (~41,322) (~38,148)

cJ28_ Net Commission Revenue $~Q~.~96 $383,336 $363,804 $~4,400_ J324,35§_ $304,526 _1~84"9Q9'--- $265,505 $246,l13 J22_l,335 $208,570_ J190,01l__ $171,678 _1153,5~

130 Phone Sales Revenue l·fi . $0• $0 $0 $0 $0 $0 •.. $0 $11,250 $21,000 $39,000 $54,000 $66,000 $75,000 $81,000 131 less: Returns/Chargebacks {~.?;; tQ ~ ~ ~ ~ ~ .... · ... ~ (~1,901) ($3,654) (~6,981) (~9,936) (~12,474) (~14,550) (~16, 119) 132 Net Phone Sales Revenue " ~ .. $0 $0 $0 $0 $0 $0 ... :$0 $9,349 $17,346 $32,019 $44,064 $53,526 $60,450 $64,881

134 Net Revenue/Net Activation ·$284,00 $284.00 $284.00 $284.00 $284.00 $284.00 $284.00 $294.00 $304.00 $324.00 $344.00 $364.00 $384.00 $404.00 135 Cost of Goods Sold /•i]60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00

~ Gross Profit :· $~4.QQ. $214.00 L_ $ 204.()()_ _j194.0Q_ _$184.00 $174.00 ~$164.Q1_ $174.00 $184.00 L_ $2_Q_4.0Q_ $224.00 L_$244.00_ $264.00 $284.00 -- -- --- --

138 Total Net Revenue .$40?,99.§ $383,336 $363,804 $344,400 $324,356 $304,526 $284,909 .. $274,853 $263,659 $259,354 $252,634 $243,543 $232,128 $218,433 139 Cost of Goods Sold (Subsidy) ! ... $85,140 $94,484 ~102,480 ~109,141 ~114,210 ~117,950 ~120,384 ~112,185 ~104,076 $96,057 $88,128 $80,289 $72,540 $64,881

~ J40 Gross Profit $317;856 $288,852 $261,324 $235,259 $210,146 $186,576 $164,52q· $162,668 $159,583 $163,297 $164,506 $163,254 $159,588 $153,552

3/5/2004 CONFIDENTIAL AND PROPRIETARY INFORMATION ~A~~tH (J-

PHONE COST MARGIN TESTING 1 lPhone Cost 1.· .$6o.oo 1 $7o.oo I $8o.oo 1 $9o.oo 1 $1oo.oo 1 $11o.oo 1 $12o.oo. 1 $13o.oo 1 $14o.oo 1 $16o.oo I $18o.oo I $2oo.oo I $22o.oo I $24o.oo 1

Pro Forma P/L AFTER HIDDEN COSTS

150 Doors 151 Activations/Door/Mo

------- -

153 Gross Activations (000) 1,650 1,575 1,500 1,425 1,350 1,275 1,200. 1,125 1,050 975 900 825 750 675 154 less: Returns/Chargebacks . ·< ;.(231) (225) (219) (212) (208) (203) ;. {197) (190) (183) f1l.§l (166) (156) (146) (134) 155 Net Activations . ,' .• -~·. ~ . ·w ,..:: . . ~ 1..m 1.lli 1.142

--1.072 ,W. ~ ~ .aQQ Ui ~ ~ ~

157 Retail Price ; ~?5.00. $87.50 $100.00 $112.50 $125.00 $137.50 J~fiQ.OO $162.50 $175.00 $200.00 $225.00 $250.00 $275.00 $300.00 158 Markup/Discount ,; $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 ·'$30.00: $32.50 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 159 Invoice Cost ; : $60.0Q $70.00 $80.00 $90.00 $100.00 $110.00 ... $12p:oo $130.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 160 Max Subsidy 1_5 -,mao.oo) {§70.00) {~80.00) (~90.00) (~100.00) {~110.00) {~120.00) {~120.00) {~120.00) (~120.00) (~120.00) (~120.00) {~120.00) {~120.00) 161 Consumer Price jL·$o.oo_ _$0.0Q_ - $0.00 _ §Q.OO - $_Q.O_Q - $0.0_Q ''lQ]Q' - llQ.Q,Q L_ _$20.2_0 _ $40.QO ~ _j§O.QQ_ _j_1QI600_ j12Q.OQ_ :>- • i

-- ~--~------- - -- ==-

Gross Carrier Commission Returns/Chargeback Pet.

166 Gross Commission Revenue $468;§oo $447,300 $426,000 $404,700 $383,400 $362,100 $340,800 $319,500 $298,200 $276,900 $255,600 $234,300 $213,000 $191,700 167 less: Returns/Chargebacks .(~651604} (~63,964) (~62,196) {~60,300) {~59,044) {~57,574) . {~55.891} {~53,996) {~51,887) (~49,565) (~47,030) (~44,283) (~41,322) (~38,148) 168 Net Commission Revenue $402,996, $383,336 $363,804 $344,400 $324,356 $304,526 $284,9Q~ $265,505 $246,313 $227,335 $208,570 $190,017 $171,678 $153,552

170 Phone Sales Revenue -~}· . ;! . $0_ $0 $0 $0 $0 $0 j .;v$.Q. $11,250 $21,000 $39,000 $54,000 $66,000 $75,000 $81,000 171 less: Returns/Chargebacks >-;;;;§Q §Q §Q §Q iQ iQ . ,_\;ciQ' (~1,901) (~3,654) ~ ($9,936) (~12,474) (~14,550) (~16,119) 172 Net Phone Sales Revenue ~/· . ..c··lQ: $0 $0 $0 $0 $0 ;·:~$9~ $9,349 $17,346 $32,019 $44,064 $53,526 $60,450 $64,881

-- ---- -----

174 Net Revenue/Net Activation 1:$284;QQ $284.00 $284.00 $284.00 $284.00 $284.00 $284.QO. $294.00 $304.00 $324.00 $344.00 $364.00 $384.00 $404.00 175 Cost of Goods Sold ~s:, .. $60:PQ $70.00 $80.00 $90.00 $100.00 $110.00 _$120.00; $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 176 Hidden Costs ; .$8 34' .. \CCo:. • ;,· $10.56 $12.89 $15.44 $18.34 $21.51 . $24.96, $29.08 $33.63 $41.35 $49.91 $59.36 $69.70 $80.98 177 Gross Profit '$21q;66 $203.44 $191.11 $178.56 $165.§§__ _j152.49 L.Jt39,..04'. $144.92 $150.37 - $1_62.~5 $174.09 $184.64 $194.30 $203.02

------ ------ ··--

179 Total Net Revenue ~-~02:9.96; $383,336 $363,804 $344,400 $324,356 $304,526 '$f84,909 $274,853 $263,659 $259,354 $252,634 $243,543 $232,128 $218,433 180 Cost of Goods Sold (Subsidy) ·:·$.85 •. 1.~0 .. $94,484 $102,480 $109,141 $114,210 $117,950 $120)38~ $112,185 $104,076 $96,057 $88,128 $80,289 $72,540 $64,881 181 Hidden Costs ,$11;840 $14,255 $16,510 $18,719 $20,944 $23,065 $25,042 $27,189 $29,165 $33,096 $36,657 $39,715 $42,135 $43,782

~ 182 Gross Profit $396;01.6' $274,597 $244,814 $216,540 $189,203 $163,511 $139,483 $135,479 $130,418 $130,200 $1p.f!_4~ $123,~39 $1_17,453 $109,770

3/5/2004 CONFIDENTIAL AND PROPRIETARY INFORMATION PFlfiL S off!-; 3