GEARS

1. GEARS Global Equity Analytics & Research Service, L.L.C.

2. Share Price is highly correlated with ComparableFundamentals

3. Share Price is 75% correlated with sales growth.

4. Share Price is 74% correlated with the operating margin. (EBITDA)

5. Acquisitions cause frequent distortions in the as-reported accounting record.

6. $3262 1999 Q2 1999 Q3 1999 Q4 2000 Q1 2000 Q2 As report ed Revenue: $3779 $3992 $4051 $4315 $7041 Comparable Revenue (for prior period): $525 $2737 $3312 $3330 $3386 $3927 $6516 How to distinguish Fundamentals Change from Structural Change in Corporate Financial Statements Measures change in the total company including M&A Measures change in fundamentals - produces comparable delta for each period Measures change in the structure of the company $ in thousands

7. Building the Strictly Comparable Dynamic DuPont Model 2001 Q2–comparable delta for 2001 Q1=annual comparable DuPont Model for trailing year 2001 Q1 2001 Q3–comparable delta for 2001 Q2=annual comparable DuPont Model for trailing year 2001Q2 2001 Q4–comparable delta for 2001 Q3=annual comparable DuPont Model for trailing year 2001 Q3 2001 Q4DuPont Model from most Recent Annual Financial Statement 2001 Q4+comparable delta for 2002 Q1 =annual comparable DuPont Model for trailing year 2002 Q1 2002 Q1+comparable delta for 2002 Q2=annual comparable DuPont Model for trailing year 2002 Q2

8. GEARS GEARS comparable data produces an accurate measure of changing fundamentals and higher correlation with share price.

9. Accounting Data - Comparable Accounting Data – As Reported 385 375 366 346 273 226 218 196 188 168 105 93 88 77 Taxes Receivables Gross Margin EBITD Margin Free Cash Flow Inventory Turns Revenue Growth Number of Russell 1000 Companies with Long-Term Share Price Correlation of 60% or Greater In every fundamental metric, correlation improves with comparable data.

10. Number of Russell 1000 Companies With Long-term Share Price Correlation of _____________ With at Least One DuPont Model Variable GEARS 60%or Greater 1000 900 765 800 700 600 477 500 400 300 200 100 0 Accounting Data-As Reported Accounting Data-Comparable Like the new lens on the Hubble Telescope, the picture becomes clearer.

11. GEARS Like the new lens on the Hubble Telescope, the picture becomes clearer. Number of Russell 1000 Companies With Long-term Share Price Correlation of _____________ With at Least One DuPont Model Variable 80%or Greater 1000 900 800 700 531 600 500 400 300 173 200 100 0 Accounting Data-As Reported Accounting Data-Comparable

12. Pfizer Fundamentals Peak • Gross Margin high • Lower Sales Growth • Higher Receivables • SG&A Expenses low & up • EBITDA Margin down • Free Cash Flow Margin down

13. Fundamentals Trough Pfizer First evidence of: • Gross Margin up • Inventories down • Sales Growth low & up • Receivables down • SG&A Expenses high

14. Current Fundamentals Peak Pfizer • Gross Margin high • Lower Sales Growth • Higher Receivables • SG&A Expenses low & up • EBITDA Margin down • Free Cash Flow Margin down

15. Intel Intel Fundamentals Trough First evidence of: • Gross Margin low & up • Inventories down • Sales Growth low & up • Receivables down • SG&A Expenses high • EBITDA Margin low & up

16. Fundamentals Peak Intel First evidence of: • Gross Margin high & down • Inventories up • Sales Growth high & down • SG&A Expenses low • EBITDA Margin high & down

17. Current Fundamentals Trough Intel • Gross margin up • Higher sales growth • High SG&A expenses • EBITDA margin up • Free cash flow margin up

18. Intel Investing Cycle Peak • Strong top line • SG&A expenses down • Net CapX down

19. Investing Cycle Peak Intel • Strong top line • SG&A expenses high • Net CapX down

20. Worldcom Investing Cycle Peak • Strong top line • SG&A expenses down • Net CapX down

21. Investing Cycle Peak Worldcom • Sales growth low & down • Receivables up • SG&A expenses low & up • EBITDA margin down Investing cycle peak

22. Schering Deteriorating earnings quality • sales growth down • Receivables up • Gross margin falling • Lower SG&A producing stronger bottom line

23. Current Falling Earnings Growth Schering • Gross margin down • Low Sales growth • Higher receivables • SG&A expenses low & up • EBITDA Margin down • Free cash flow margin down

24. Microsoft Current Deteriorating earnings quality • Sales growth low and down • Falling gross margin • Lower SG&A producing stronger bottom line

25. Dow Jones Index Reliable and comparable micro data allows for reliable and comparable macro data.

26. Sales growth tells a timing story. Dow Jones Index

27. Dow Jones Index Margins tell a direction story.

28. Last twenty years-as reported Last twenty years-comparable since first quarter 1999 100 86 90 78 80 70 62 55 54 60 50 40 26 30 20 10 0 Gross Margin EBITD Margin Revenue Growth Index Share Price Correlation With Macro Fundamental Factors Dow Jones US Total Market Index Using comparable data makes the macro picture clearer.

29. GEARS Products in Development Consistently Defined, strictly comparable, time-series composite variables are customized to power: • The DuPont Model • Earnings Quality Models • Discounted Cash Flow Models • Investment Valued Added Models • Financial Condition Models Data-to-Text document creation software Macro Corporate accounting data and associated analysis in text

30. GEARS Analyst’s Forecasting Spreadsheet 5 years of consistently defined, strictly comparable, quarterly data points For DuPont Model Variables • Revenue Growth • Gross Margin • SG&A Expenses • Interest Expense • Taxes • Asset Turnover • Assets/Equity • Return On Common Equity • Earnings per share • Receivables • Inventories • Correlations with share price • Inter variable correlations • Summary Statistics • Pattern based Forecast

31. GEARS Forecasting Macro • Allows an analyst to make two-point estimates for revenue growth and EBITDA margins. • The macro interpolates the intervening quarters and calculates quarterly ROE, EPS and long term growth rates.

32. GEARS Global Equity Analytics & Research Service, L.L.C.