Goldman Stanley, Inc.

Project Aardvark

Presentation to the Board of Directors

January 29, 2010

Confidential Draft
Goldman Stanley
Table Of Contents

Executive Summary 3

Aardvark Valuation 5

Potential Acquisitions 11

Process Recommendations 16

Appendix 19

2
Goldman Stanley
 Executive Summary

3
Goldman Stanley
Executive Summary
As of January 29, 2010, Aardvarks share price and valuation are at all-time highs,
having more than doubled since early 2009

As Aardvarks stock price has soared in value, it has also generated over $35B in
cash & cash-equivalents

As Aardvarks cash balance grows, it is likely to face shareholder pressure to re-

invest the cash in its business and to make significant acquisitions

Given Aardvarks strong currency and cash balance, it could easily make several
tuck-in acquisitions or larger-scale acquisitions to acquire customers

Such a strategy would allow Aardvark to capture more of the smartphone, laptop, and
desktop markets, and significantly improve its software offerings

Given Aardvarks cash position, such acquisitions could be made with 100% cash
or in the case of a larger deal, stock could also be used

4
Goldman Stanley
 Aardvark Valuation

5
Goldman Stanley
Valuation Summary
Aardvarks current share price of $192.61 far exceeds the value implied by
comparable public companies

Recent comparable transactions show higher implied valuation ranges due to flurry of
consolidation and hardware M&A activity over 2009

Discounted Cash Flow Analysis under base-case assumptions shows implied

valuation on-par with Aardvarks current share price, implying that share price is
justified

All valuation analysis is based on base-case financial projections in line with Wall
Street analyst expectations

Given Aardvarks cash balance and high valuation multiples vs. similar public
companies, few competitors are well-positioned to make substantial acquisitions

6
Goldman Stanley
Aardvark Valuation Summary
($ in Millions Except Per Share Data)

Public Company Comparables(1)(2)

2009 EV / Revenue:

2010E EV / Revenue:

2009 EV / EBITDA:

2010E EV / EBITDA:

2009 P / E:

2010E P / E:
Min to 25th
Precedent Transactions(1) 25th to Median

Trailing EV / Revenue: Median to 75th

75th to Max
Forward EV / Revenue:

Trailing EV / EBITDA:

Forward EV / EBITDA:

Discounted Cash Flow Analysis

11-15% Discount Rate, 5-9x Terminal Multiple:

$0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00

(1) EBITDA excludes stock-based compensation and non-recurring charges. 7

Goldman Stanley (2) Financial data as of January 29, 2010.
Aardvark Comparable Public Companies
US-Based Hardware & Networking Companies with Over $20 Billion Revenue

($ in Millions Except Per Share Data)

Comparable Public Companies Operating Metrics(1)

45.0% 39%
40.0%
35.0% 29% 31%
30.0% 25%
25.0% 22%
18% 2010E Revenue Growth
20.0% 14%
15.0% 8% 2009A EBITDA Margin
8% 7% 4%
10.0%
(6%)
5.0%
0.0%
(5.0%)
(10.0%)

Comparable Public Companies Valuation Multiples(1)(2)

14.0 x
11.5 x
12.0 x 10.6 x 10.7 x
10.0 x 8.6 x
8.4 x
7.6 x 7.3 x
8.0 x 6.8 x
5.5 x 2009 EBITDA Multiple
6.0 x 5.1 x
4.4 x
3.7 x 2010E EBITDA Multiple
4.0 x

2.0 x

0.0 x

(1) EBITDA excludes stock-based compensation and non-recurring charges. 8

Goldman Stanley (2) Financial data as of January 29, 2010.
Aardvark Precedent Transactions
Networking & Hardware M&A Transactions Over $1 Billion with US-Based Sellers Since January 1, 2008

($ in Millions Except Per Share Data)

Aardvark - Comparable M&A Transactions Operating Metrics Valuation Multiples
EV / EV / EV / EV /
Equity Enterprise Trailing Forward Trailing Forward Trailing Forward Trailing Forward
Acquirer Name Target Name Date Value Value Revenue Revenue EBITDA(1) EBITDA(1) Revenue Revenue EBITDA(1) EBITDA(1)
Hewlett-Packard Company 3Com 11/11/2009 $ 3,180 $ 2,714 $ 1,265 $ 1,223 $ 152 $ 110 2.1 x 2.2 x 17.8 x 24.6 x
Cisco Systems, Inc. Starent Networks 10/13/2009 2,777 2,386 288 320 154 110 8.3 x 7.5 x 15.5 x 21.6 x
Emerson Electric Co. Avocent 10/6/2009 1,114 1,147 611 542 105 93 1.9 x 2.1 x 10.9 x 12.3 x
EMC Corporation Data Domain 7/8/2009 2,362 2,085 301 375 53 64 6.9 x 5.6 x 39.7 x 32.8 x
Oracle Corporation Sun Microsystems 4/20/2009 7,075 5,392 13,256 12,462 623 559 0.4 x 0.4 x 8.7 x 9.6 x
Brocade Communication Systems, Inc. Foundry Networks 7/21/2008 2,899 2,063 621 633 156 125 3.3 x 3.3 x 13.2 x 16.5 x

Maximum $ 7,075 $ 5,392 $ 13,256 $ 12,462 $ 623 $ 559 8.3 x 7.5 x 39.7 x 32.8 x
75th Percentile 3,110 2,632 1,104 1,075 155 121 6.0 x 5.0 x 17.3 x 23.9 x
Median $ 2,838 $ 2,235 $ 616 $ 587 $ 153 $ 110 2.7 x 2.7 x 14.4 x 19.1 x
25th Percentile 2,466 2,068 378 417 117 97 1.9 x 2.1 x 11.5 x 13.4 x
Minimum 1,114 1,147 288 320 53 64 0.4 x 0.4 x 8.7 x 9.6 x

9
Goldman Stanley (1) Excludes stock-based compensation and non-recurring charges.
Aardvark Discounted Cash Flow Analysis
($ in Millions Except Per Share Data)
Aardvark - Cash Flow Projections DCF Assumptions:
FY 2010E FY 2011E FY 2012E FY 2013E FY 2014E
Discount Rate: 12.5%
Revenue: $53,631 $ 62,749 $ 69,651 $ 75,919 $ 81,234
EBITDA: $16,480 $ 19,282 $ 21,403 $ 23,329 $ 24,962 Terminal EBITDA Multiple: 7.0 x
Operating Income: $14,635 $ 17,133 $ 19,030 $ 20,761 $ 22,218
Model Uses Base Case Financial
Less: Taxes ($4,391) ($5,140) ($5,709) ($6,228) ($6,665) Projections

Plus: Depreciation $918 $1,073 $1,192 $1,299 $1,390 Mid-Year Convention Used For PV
Plus: Amortization $40 $37 $28 $13 $10 Of Cash Flows
Plus: Stock-Based Compensation $888 $1,038 $1,153 $1,256 $1,344

Less: Increase in Working Capital: $2,136 $1,815 $1,374 $1,248 $1,058

Less: Capital Expenditures ($1,430) ($1,673) ($1,857) ($2,024) ($2,166)

Unlevered Free Cash Flow $12,795 $ 14,284 $ 15,211 $ 16,324 $ 17,189

Present Value of Free Cash Flow $12,064 $ 11,971 $ 11,332 $ 10,811 $ 10,119

Aardvark - Net Present Value Sensitivity - Terminal EBITDA Multiples

Discount Rate
$ 204.96 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0%
4.0 x $ 170.39 $ 165.99 $ 161.81 $ 157.83 $ 154.03 $ 150.40 $ 146.95
Terminal EBITDA

5.0 x $ 187.23 $ 182.09 $ 177.20 $ 172.54 $ 168.11 $ 163.88 $ 159.86

Multiple

6.0 x $ 204.06 $ 198.18 $ 192.59 $ 187.26 $ 182.19 $ 177.37 $ 172.77

7.0 x $ 220.90 $ 214.27 $ 207.97 $ 201.98 $ 196.28 $ 190.85 $ 185.68
8.0 x $ 237.74 $ 230.37 $ 223.36 $ 216.70 $ 210.36 $ 204.33 $ 198.59
9.0 x $ 254.58 $ 246.46 $ 238.75 $ 231.42 $ 224.44 $ 217.81 $ 211.50

10
Goldman Stanley
 Potential Acquisitions

11
Goldman Stanley
Potential Acquisitions

Given Aardvarks large cash balance, it could make a wide variety of acquisitions
ranging from small tuck-in deals to acquire technology and IP to larger deals driven
by customer or market share acquisition
Tier 1 Potential Acquisitions
Tier 1 acquisition candidates are worth over $1 billion and would significantly
boost Aardvarks market share or result in substantial revenue or cost synergies
Leading candidates include ARM, for its chipset technology and integration with
Aardvarks existing products, and Research in Motion to capture additional
share in the corporate smartphone market
Tier 2 Potential Acquisitions
Tier 2 acquisition candidates are worth less than $1 billion and would enhance
Aardvarks core technology and fill in gaps in existing products
Potential acquisitions include specialized chipset and semiconductor companies
as well as Web 2.0, social media, and mobile software companies

12
Goldman Stanley
Potential Acquisition Candidates

Tier 1 Acquisition Candidates

Tier 2 Acquisition Candidates

13
Goldman Stanley
Company Profile: ARM
ARM Holdings is a supplier of semiconductor Management Team:
intellectual property and components of digital
electronic products. It designs and licenses Warren East CEO
intellectual property rather than manufacturing and Tudor Brown President
ARM Holdings selling semiconductor chips, and it licenses its IP to Graham Budd COO
a wide network of hardware, mobile, and Mike Muller CTO
Headquarters: Cambridge, UK Tim Score CFO
Employees: 1700
networking companies. It also provides tools to
Founded: 1990 optimize system-on-chip designs. John Cornish EVP, Systems
Ian Drew EVP, Marketing
Antonio Viana EVP, Sales

Financial Information(1): Products: Key Partners:

Market Cap: $2.5B Processors ARM provides 32-bit embedded Electronic Arts, LSI Logic,
Cash: $204M
2009 Revenue: $490M
microprocessors based on a common Microsoft, National Semiconductor,
2009 EPS: $7.85 architecture that delivers high-performance, Nokia, NVIDIA, Rambus, Real
2010E Revenue: $531M power efficiency, and reduced system cost. Networks, Samsung, and Toshiba.
2010E EPS: $10.97 System IP Serves as the connection between
processors, memory, and peripherals to ensure
$250.00 20.0
18.0 optimum performance.
Multimedia ARM provides graphics processors
$200.00 16.0
14.0
Volume (MM)
Share Price

$150.00 12.0
10.0 that enable embedded graphics, audio, and video
$100.00 8.0

$50.00
6.0
4.0
applications.
$0.00
2.0
0.0
Physical IP Provides SoC integrated circuits
and logic, embedded memory, and interface IP.
Tools ARM subsidiaries provide compilers,
debuggers, simulators, and other optimization
tools for a wide variety of chip and processor
families.
14
Goldman Stanley (1) Financial data as of January 29, 2010.
Company Profile: Research In Motion
Research In Motion designs the BlackBerry Management Team:
smartphone and creates solutions for the worldwide
mobile communications market, including a variety Jim Balsillie Co-CEO
of software for the BlackBerry device. In addition to Mike Lazaridis Co-CEO
Research In Motion
its line of BlackBerry devices, the company also Don Morrison COO
Headquarters: Waterloo, ON provides enterprise server software to support Robin Bienfait CIO
Employees: 12,000 businesses using the device. Brian Bidulka CFO
Founded: 1984 David Yach CTO

Financial Information(1): Products: Key Partners:

Market Cap: $36B BlackBerry Pearl 3G Provides Trackpad and AT&T, Brightstar, Digital China,
Cash: $2.5B
2009 Revenue: $13B
dedicated media keys as well as SureType GPXS, Hewlett-Packard, IBM,
2009 EPS: $3.70 technology and 3G network support. Skype, Sprint, Tata Indicom, T-
2010E Revenue: $17B BlackBerry Bold Provides extended battery life Mobile, Verizon, Virgin, and
2010E EPS: $5.03 as well as GPS, Wi-Fi, and 3G network support. Vodafone,
BlackBerry Curve 8500 Includes Trackpad and
$100.00 100.0
$90.00 90.0 dedicated media keys, easy media sharing, and
$80.00 80.0
$70.00 70.0 2.0 MP camera.
Volume (MM)
Share Price

$60.00 60.0
$50.00
$40.00
50.0
40.0
BlackBerry Tour 9630 Provides GPS,
$30.00
$20.00
30.0
20.0
worldwide compatibility, and 3.2 MP camera.
$10.00
$0.00
10.0
0.0
BlackBerry Storm Features Wi-Fi, SurePress
technology, and 3G network support.
BlackBerry Curve 8900 Features thin,
lightweight design as well as GPS and Wi-Fi
support and 3.2 MP camera.

15
Goldman Stanley (1) Financial data as of January 29, 2010.
 Process Recommendations

16
Goldman Stanley
Key Recommendations
We recommend engaging in targeted discussions with the Tier 1 acquisition
candidates and assessing their receptiveness to M&A discussions

At the same time, Goldman Stanley will reach out to Tier 2 candidates and introduce
Aardvark as a potential acquirer

M&A process with Tier 1 candidates will take significantly longer due to the scale of
the companies, so we recommend conducting both processes simultaneously

Depending on responses from Tier 1 and Tier 2 candidates, Goldman Stanley and
Aardvark may do additional research to determine other potential acquisitions and
then approach them

Targeted Buy-Side M&A Broad Buy-Side M&A

< 5 parties 10 100 companies

6 months to 1 year Time required is highly variable

Close-ended Iterative process

Higher success probability Lower success probability

17
Goldman Stanley
Process Recommendation

Targeted
Specialized Negotiations Highly Targeted
Discussions + Broad M&A Process
With One Party Process
Broader Search
Broad
Marketing

RECOMMENDED
Combination of targeted
discussions plus broader
search conducted in
background maximizes
success probability and
minimizes disruption to
Aardvark

Additional parties
contacted depend on
responsiveness of Tier 1
and Tier 2 companies

Interested parties would

sign NDAs and then
proceed into due diligence
and valuation discussions
with Aardvark
18
Goldman Stanley
 Appendix

19
Goldman Stanley
Aardvark Projected Income Statement
($ in Millions Except Per Share Data)
Income Statement
FY 2007 FY 2008 FY 2009 FY 2010E FY 2011E FY 2012E FY 2013E FY 2014E

Revenue: $24,578 $37,491 $42,905 $53,631 $62,749 $69,651 $75,919 $81,234

Cost of Goods Sold: $16,282 $24,049 $25,324 $31,655 $37,037 $41,111 $44,811 $47,948
Gross Profit: $8,296 $13,442 $17,581 $21,976 $25,712 $28,540 $31,109 $33,286
Operating Expenses:
Research & Development: $596 $759 $830 $1,038 $1,214 $1,348 $1,469 $1,572
Selling, General & Administrative: $2,724 $3,345 $3,566 $4,458 $5,216 $5,789 $6,311 $6,752
Total Operating Expenses: $3,320 $4,103 $4,397 $5,496 $6,430 $7,137 $7,780 $8,324

Depreciation & Amortization of PP&E: $327 $496 $734 $918 $1,073 $1,192 $1,299 $1,390
Amortization of Intangibles: $0 $0 $0 $40 $37 $28 $13 $10
Stock-Based Compensation: $242 $516 $710 $888 $1,038 $1,153 $1,256 $1,344

Operating Income: $4,407 $8,327 $11,740 $14,635 $17,133 $19,030 $20,761 $22,218
Interest Income: $647 $653 $407 $424 $568 $1,443 $1,780 $3,223
Interest Expense: $0 $0 $0 ($45) ($90) ($90) ($90) ($90)
Other Income & Expense: ($48) ($33) ($81) $0 $0 $0 $0 $0
Pre-Tax Income: $5,006 $8,947 $12,066 $15,014 $17,610 $20,383 $22,450 $25,351
Income Tax Provision: $1,511 $2,828 $3,831 $4,504 $5,283 $6,115 $6,735 $7,605

Net Income: $3,495 $6,119 $8,235 $10,510 $12,327 $14,268 $15,715 $17,746

Earnings Per Share (EPS): $3.93 $6.78 $9.08 $11.59 $13.59 $15.73 $17.33 $19.56
Diluted Shares Outstanding: 889,292 902,139 907,005 907,005 907,005 907,005 907,005 907,005

EBIT(1): $4,649 $8,843 $12,450 $15,523 $18,171 $20,183 $22,017 $23,562

(1)
EBITDA : $4,976 $9,339 $13,184 $16,480 $19,282 $21,403 $23,329 $24,962
Levered Free Cash Flow: $4,735 $8,505 $10,311 $13,061 $14,618 $16,158 $17,507 $19,382
Book Value Per Share (BV): $24.17 $34.56 $47.17 $61.94 $78.98 $97.70 $118.76

20
Goldman Stanley (1) Excludes stock-based compensation and non-recurring charges.
Aardvark Comparable Public Companies
US-Based Hardware & Networking Companies with Over $20 Billion Revenue

($ in Millions Except Per Share Data)

Operating Statistics Capitalization Projected
(2)
Share Equity Enterprise Revenue EBITDA EPS Revenue EBITDA Margin(2)
(1) (3)
Company Name Price Value Value 2009 2010E 2009 2010E 2009 2010E Growth 2009 2010E
Hewlett-Packard Company $ 47.07 $ 114,779 $ 124,430 $ 114,552 $ 124,179 $ 16,433 $ 18,186 $ 3.14 $ 3.87 8.4% 14.3% 14.6%
Dell Inc. 12.90 25,241 15,080 51,430 55,380 3,426 4,129 0.79 1.18 7.7% 6.7% 7.5%
Cisco Systems, Inc. 22.47 131,739 106,671 34,807 41,163 10,076 12,774 0.97 1.38 18.3% 28.9% 31.0%
Intel Corporation 19.40 107,224 92,786 32,784 39,941 12,708 18,332 0.41 1.17 21.8% 38.8% 45.9%
Motorola, Inc. 6.15 14,239 10,665 23,457 22,056 926 1,927 (1.70) 0.14 (6.0%) 3.9% 8.7%

Maximum $ 47.07 $ 131,739 $ 124,430 $ 114,552 $ 124,179 $ 16,433 $ 18,332 $ 3.14 $ 3.87 21.8% 38.8% 45.9%
75th Percentile 22.47 114,779 106,671 51,430 55,380 12,708 18,186 0.97 1.38 18.3% 28.9% 31.0%
Median $ 19.40 $ 107,224 $ 92,786 $ 34,807 $ 41,163 $ 10,076 $ 12,774 $ 0.79 $ 1.18 8.4% 14.3% 14.6%
25th Percentile 12.90 25,241 15,080 32,784 39,941 3,426 4,129 0.41 1.17 7.7% 6.7% 8.7%
Minimum 6.15 14,239 10,665 23,457 22,056 926 1,927 (1.70) 0.14 (6.0%) 3.9% 7.5%

Aardvark $ 192.06 $ 176,796 $ 141,401 $42,905 $ 53,631 $13,184 $16,480 $9.08 $ 11.59 25.0% 30.7% 30.7%
Valuation Statistics Capitalization Enterprise Value / Enterprise Value /
Share Equity Enterprise Revenue EBITDA(2) P / E Multiple
(1)
Company Name Price Value Value 2009 2010E 2009 2010E 2009 2010E
Hewlett-Packard Company $ 47.07 $ 114,779 $ 124,430 1.1 x 1.0 x 7.6 x 6.8 x 15.0 x 12.2 x
Dell Inc. 12.90 25,241 15,080 0.3 x 0.3 x 4.4 x 3.7 x 16.4 x 10.9 x
Cisco Systems, Inc. 22.47 131,739 106,671 3.1 x 2.6 x 10.6 x 8.4 x 23.1 x 16.3 x
Intel Corporation 19.40 107,224 92,786 2.8 x 2.3 x 7.3 x 5.1 x 47.2 x 16.6 x
Motorola, Inc. 6.15 14,239 10,665 0.5 x 0.5 x 11.5 x 5.5 x NM 44.6 x

Maximum $ 47.07 $ 131,739 $ 124,430 3.1 x 2.6 x 11.5 x 8.4 x 47.2 x 44.6 x
75th Percentile 22.47 114,779 106,671 2.8 x 2.3 x 10.6 x 6.8 x 29.1 x 16.6 x
Median $ 19.40 $ 107,224 $ 92,786 1.1 x 1.0 x 7.6 x 5.5 x 19.7 x 16.3 x
25th Percentile 12.90 25,241 15,080 0.5 x 0.5 x 7.3 x 5.1 x 16.1 x 12.2 x
Minimum 6.15 14,239 10,665 0.3 x 0.3 x 4.4 x 3.7 x 15.0 x 10.9 x

Aardvark $ 192.06 $ 176,796 $ 141,401 3.3 x 2.6 x 10.7 x 8.6 x 21.2 x 16.6 x

(1) Share prices as of January 29, 2010.

(2) Excludes stock-based compensation and non-recurring charges. 21
Goldman Stanley (3) Revenue growth from Apples FY2009 through FY2010E.
Aardvark DCF Analysis WACC Calculation
($ in Millions Except Per Share Data)
Discount Rate Calculation - Assumptions
Risk-Free Rate: 4.38%
Equity Risk Premium: 7.00%
Interest Rate on Debt: 9.00%

Comparable Companies - Unlevered Beta Calculation

Levered Equity Unlevered
(1) (1) (1)
Name Beta Debt Value Tax Rate Beta
Hewlett-Packard Company 1.04 $ 15,830 $ 114,779 20.0% 0.94
Dell Inc. 1.31 3,793 25,241 27.0% 1.18
Cisco Systems, Inc. 1.23 10,273 131,739 22.0% 1.16
Intel Corporation 1.17 2,224 107,224 33.0% 1.15
Motorola, Inc. 1.87 3,925 14,239 34.0% 1.58

Median 1.23 1.16

Aardvark 1.57

Aardvark - Levered Beta & WACC Calculation

Unlevered Equity Levered
(1) (1)
Beta Debt Value Tax Rate Beta

Aardvark 1.16 $0 $ 176,796 30% 1.16

Cost of Equity Based on Comparables: 12.50%

Cost of Equity Based on Historical Beta: 15.37%

WACC 12.50%

22
Goldman Stanley (1) Financial data as of January 29, 2010.