Sponsoring Organization's Proposal - SPONSORING ORGANIZATION STRUCTURE

C.12.7.3. 10% Confidence Level (best case)

In our 10% Confidence scenario, our annual net income is $ - 3.4 million in 2001, $ 8.5 million in 2002, $15.4 million in 2003, and $32.0 million in 2004.

Please see section D13.2.12 of the Registry Operator’s proposal for a discussion or revenues. Costs are detailed previously in this section.

Pro-Forma Income Statement for the Sponsoring Organization at 10% Confidence (in $000's)
	2001				2002				2003				2004
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Domain Name Units (000's)	0	226	453	679	867	1,050	1,222	1,433	1,550	1,875	2,184	2,560	2,846	3,443	4,010	4,701
Revenue	$0	$1,132	$2,264	$3,396	$4,337	$5,248	$6,111	$7,164	$7,750	$9,377	$10,920	$12,802	$14,229	$17,217	$20,050	$23,504
Revenue Growth		#DIV/0!	100%	50%	28%	21%	16%	17%	8%	21%	16%	17%	11%	21%	16%	17%
Less Operating Costs and Expenses
Cost of Goods Sold
ICANN Cost Recovery	41	42	43	44	137	141	145	149	245	252	258	266	450	463	474	488
Allocation to Registry Operator	533	533	533	533	605	605	605	605	775	938	1,092	1,280	1,423	1,722	2,005	2,350
Sales and Marketing
Advertising	900	900	900	900	900	900	900	900	1,200	1,200	1,200	1,200	1,500	1,500	1,500	1,500
PR	600	600	600	600	600	600	600	600	800	800	800	800	1,000	1,000	1,000	1,000
General and Administrative
Senior Mgmt	75	75	75	75	83	83	83	83	91	91	91	91	100	100	100	100
Mgmt of Registry Operations	19	19	19	19	21	21	21	21	23	23	23	23	25	25	25	25
Legal	50	50	50	50	55	55	55	55	61	61	61	61	67	67	67	67
Advisory Board Meeting Expense	50	50	50	50	52	52	52	52	53	53	53	53	55	55	55	55
Accounting Labor	15	15	15	15	17	17	17	17	18	18	18	18	40	40	40	40
Administrative Labor	20	20	20	20	22	22	22	22	36	36	36	36	53	53	53	53
Rent	15	15	15	15	15	15	15	15	16	16	16	16	16	16	16	16
Equipment	13	13	13	13	13	13	13	13	13	13	13	13	14	14	14	14
Insurance	20	20	20	20	21	21	21	21	21	21	21	21	22	22	22	22
Escrow	16	16	16	16	16	16	16	16	17	17	17	17	17	17	17	17
Professional Services	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Total Operating Cost and Expenses	2,416	2,417	2,418	2,419	2,606	2,610	2,614	2,618	3,419	3,589	3,749	3,944	4,831	5,143	5,438	5,796
Operating Expense Growth		0%	0%	0%	8%	0%	0%	0%	31%	5%	4%	5%	22%	6%	6%	7%
EBITDA	($2,416)	($1,285)	($154)	$977	$1,731	$2,638	$3,498	$4,547	$4,331	$5,788	$7,171	$8,857	$9,398	$12,073	$14,612	$17,708
EBITDA Growth		-47%	-88%	N/C	77%	52%	33%	30%	-5%	34%	24%	24%	6%	28%	21%	21%
less Depreciation	131	131	131	131	131	131	131	131	131	131	131	131	131	131	131	131
EBIT	(2,547)	(1,416)	(285)	846	1,600	2,506	3,366	4,415	4,200	5,657	7,040	8,726	9,266	11,942	14,481	17,577
less Interest	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Tax Base	(2,547)	(3,963)	(4,248)	(3,402)	(1,802)	704	4,070	8,486	12,686	18,343	25,382	34,108	43,375	55,317	69,798	87,374
Cumulative Taxes	0	0	0	0	0	282	1,628	3,394	5,074	7,337	10,153	13,643	17,350	22,127	27,919	34,950
less Taxes	0	0	0	0	0	282	1,347	1,766	1,680	2,263	2,816	3,490	3,707	4,777	5,792	7,031
Net Income	($2,547)	($1,416)	($285)	$846	$1,600	$2,225	$2,020	$2,649	$2,520	$3,394	$4,224	$5,236	$5,560	$7,165	$8,688	$10,546
Dividend for Internet Development	0	0	0	0	0	0	0	5	126	170	223	524	607	1,075	1,647	2,480
Available Dividend to Owners	(2,547)	(1,416)	(285)	846	1,600	2,225	2,020	2,645	2,394	3,225	4,001	4,712	4,953	6,090	7,041	8,066
Cumulative Dividend for Internet Development	0	0	0	0	0	0	0	5	131	300	523	1,047	1,654	2,729	4,376	6,856
Cumulative Dividend to Owners	(2,547)	(3,963)	(4,248)	(3,402)	(1,802)	422	2,442	5,087	7,481	10,705	14,706	19,419	24,371	30,462	37,503	45,568
Cumulative Net Income	($2,547)	($3,963)	($4,248)	($3,402)	($1,802)	$422	$2,442	$5,091	$7,611	$11,006	$15,229	$20,465	$26,025	$33,190	$41,879	$52,425