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ICANN Registry Proposal

Registry Operator's Proposal - BUSINESS CAPABILITIES AND PLAN

D13.3. Pro-forma financial projections. Please provide detailed pro-forma financial projections, consistent with your business plan, for the demand scenarios that you estimate under item D13.2.5. The pro-formas should show revenue and expense estimates broken down by detailed categories and should be broken down into periods no longer than quarterly.

D13.3.1. 90% Confidence Scenario (worst case)

Pro-Forma Income Statement for the Registry Operator at 90% 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 82 165 247 334 404 471 552 588 711 828 971 1,063 1,286 1,497 1,755  
Revenue $533 $533 $533 $533 $605 $605 $605 $605 $712 $712 $712 $712 $836 $836 $836 $836    
                           
less Operating Costs and expenses                          
                           
Cost of Goods Sold                          
Bandwidth fees 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15    
Other Hosting Costs 75 75 75 75 77 77 77 77 80 80 80 80 82 82 82 82    
                           
Cust Service/Tech Support                          
Customer Support 40 40 40 40 55 55 55 55 61 61 61 61 67 67 67 67  
IT Department 75 75 75 75 103 103 103 103 113 113 113 113 125 125 125 125  
                           
General and Administrative                          
Senior Mgmt 38 38 38 38 41 41 41 41 45 45 45 45 50 50 50 50  
Liason to Sponsoring Organization 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  
Accounting Labor 15 15 15 15 17 17 17 17 18 18 18 18 20 20 20 20  
Administrative Labor 20 20 20 20 22 22 22 22 24 24 24 24 27 27 27 27  
Rent (office space) 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16  
Rent (data center) 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Equipment 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Insurance 40 40 40 40 41 41 41 41 42 42 42 42 44 44 44 44  
Professional Services 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50  
                           
Total Operating Cost and Expenses $476 $476 $476 $476 $538 $538 $538 $538 $574 $574 $574 $574 $614 $614 $614 $614    
                                   
EBITDA 56 56 56 56 67 67 67 67 138 138 138 138 223 223 223 223  
                     
less Depreciation 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56    
                                 
                           
less Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0    
less Taxes 0 0 0 0 4 4 4 4 33 33 33 33 67 67 67 67    
                                   
Net Income $0 $0 $0 $0 $7 $7 $7 $7 $49 $49 $49 $49 $100 $100 $100 $100    

The 90% Confidence financial projections combine the annual revenues and expenses from the revenue projections (D13.2.12) and the cost projections (D13.2.11) into quarterly projections. Based on the minimum monthly payment to the Registry Operator from the Sponsoring Organization of approximately $ 178,000, our anticipated costs will be covered. The potential for upside exists should the volume of registered names exceed approximately 7 million names.

D13.3.2. 50% Confidence Scenario (base case)

Pro-Forma Income Statement for the Registry Operator at 50% 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) 0 158 317 475 598 723 842 987 1,051 1,272 1,481 1,736 1,899 2,298 2,676 3,138  
Revenue $533 $533 $533 $533 $605 $605 $605 $605 $712 $712 $712 $712 $950 $1,149 $1,338 $1,569  
                           
less Operating Costs and expenses                          
                           
Cost of Goods Sold                          
Bandwidth fees 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15  
Other Hosting Costs 75 75 75 75 77 77 77 77 80 80 80 80 82 82 82 82  
                           
Cust Service/Tech Support                          
Customer Support 40 40 40 40 55 55 55 55 73 73 73 73 93 93 93 93  
IT Department 75 75 75 75 103 103 103 103 136 136 136 136 175 175 175 175  
                           
General and Administrative                          
Senior Mgmt 38 38 38 38 41 41 41 41 45 45 45 45 50 50 50 50  
Liason to Sponsoring Organization 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  
Accounting Labor 15 15 15 15 17 17 17 17 18 18 18 18 20 20 20 20  
Administrative Labor 20 20 20 20 33 33 33 33 36 36 36 36 40 40 40 40  
Rent (office space) 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16  
Rent (data center) 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Equipment 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Insurance 40 40 40 40 41 41 41 41 42 42 42 42 44 44 44 44  
Professional Services 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50  
                           
Total Operating Cost and Expenses $476 $476 $476 $476 $549 $549 $549 $549 $621 $621 $621 $621 $704 $704 $704 $704  
                                   
EBITDA 56 56 56 56 56 56 56 56 91 91 91 91 246 446 635 865  
                     
less Depreciation 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56  
                                 
                           
less Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0  
less Taxes 0 0 0 0 0 0 0 0 14 14 14 14 76 156 231 324  
                                   
Net Income $0 $0 $0 $0 $0 $0 $0 $0 $21 $21 $21 $21 $114 $234 $347 $485  

The 50% Confidence financial projections combine the annual revenues and expenses from the revenue projections (D13.2.12) and the cost projections (D13.2.11) into quarterly projections. This projection demonstrates that our operating and capital costs will be met by the minimum payment from the Sponsoring Organization, with net income increasing to $ 1.2 million in 2004.

The 50% Confidence level graph shows a rapid increase of the revenue line (at Q4 in 2003). The line increases when the sponsoring organization’s payment to the registry operator is no longer subject to the minimum payment and instead increases at $.50 per domain name in line with the increases in demand for domain names (Section D13.2.5).

D13.3.3. 10% Confidence Scenario (best case)

Pro-Forma Income Statement for the Registry Operator 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 $533 $533 $533 $533 $605 $605 $605 $605 $775 $938 $1,092 $1,280 $1,423 $1,722 $2,005 $2,350  
                           
less Operating Costs and expenses                          
                           
Cost of Goods Sold                          
Bandwidth fees 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15  
Other Hosting Costs 75 75 75 75 77 77 77 77 80 80 80 80 82 82 82 82  
                           
Cust Service/Tech Support                          
Customer Support 40 40 40 40 55 55 55 55 85 85 85 85 120 120 120 120  
IT Department 75 75 75 75 103 103 103 103 159 159 159 159 225 225 225 225  
                           
General and Administrative                          
Senior Mgmt 38 38 38 38 41 41 41 41 45 45 45 45 50 50 50 50  
Liason to Sponsoring Organization 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  
Accounting Labor 15 15 15 15 17 17 17 17 18 18 18 18 20 20 20 20  
Administrative Labor 20 20 20 20 33 33 33 33 36 36 36 36 40 40 40 40  
Rent (office space) 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16  
Rent (data center) 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Equipment 13 13 13 13 13 13 13 13 13 13 13 13 14 14 14 14  
Insurance 40 40 40 40 41 41 41 41 42 42 42 42 44 44 44 44  
Professional Services 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50  
                           
Total Operating Cost and Expenses $476 $476 $476 $476 $549 $549 $549 $549 $656 $656 $656 $656 $780 $780 $780 $780  
                                   
EBITDA 56 56 56 56 56 56 56 56 119 282 436 624 643 942 1,225 1,570  
                     
less Depreciation 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56  
                                 
                           
less Interest 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0  
less Taxes 0 0 0 0 0 0 0 0 25 90 152 227 235 354 467 606  
                                   
Net Income $0 $0 $0 $0 $0 $0 $0 $0 $38 $135 $228 $341 $352 $531 $701 $908  

The 10% Confidence financial projections combine the annual revenues and expenses from the revenue projections (D13.2.12) and the cost projections (D13.2.11) into quarterly projections. This projection demonstrates that our operating and capital costs will be initially met by the minimum payment from the Sponsoring Organization, with net income increasing to $ 2.5 million in 2004.

The 10% Confidence level graph shows a rapid increase of the revenue line (at Q4 in 2002). The line increases when the sponsoring organization’s payment to the registry operator is no longer subject to the minimum payment and instead increases at $.50 per domain name in line with the increases in demand for domain names (Section D13.2.5).

 
 

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