Income Statement March-18 June-18 September-18 December-18

(Dollars in millions) 1Q2018 2Q2018 3Q2018 4Q2018E

Revenue 500 750 200 150
Cost of Goods Sold 200 260 90 75
Gross margin 300 490 110 75
Operating Expenses 100 125 90 30
Operating margin 200 365 20 45
Income Tax 50 91 5 11
Net Income 150 274 15 34

Model Assumptions March-18 June-18 September-18 December-18

1Q2018 2Q2018 3Q2018 4Q2018E
Graphic card units sold 2,000,000 3,000,000 888,889 750,000
Average Selling Price (ASP) per unit $250 $250 $225 $200
Gross margin 60% 65% 55% 50%
Operating expenses to revenue 20% 17% 45% 20%
Operating margin 40% 49% 10% 30%
Effective tax rate 25% 25% 25% 25%
Income Statement Mar-17 June-17 Sept-17 Dec-17 Mar-18 June-18 Sept-18 Dec-18 Mar-19 June-19 Sept-19 Dec-19
(Dollars in millions, except share data) 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019E 2Q2019E 3Q2019E 4Q2019E
Revenue 950 975 1,000 1,200 1,150 1,200 1,250 1,400 1,496 1,539 1,589 1,870
Operating Expenses 350 360 380 400 375 365 400 450 524 523 524 598
Operating Margin 600 615 620 800 775 835 850 950 972 1,016 1,065 1,272
Income Tax 120 123 124 160 155 167 170 190 194 203 213 254
Net Income 480 492 496 640 620 668 680 760 778 813 852 1,017
Diluted shares outstanding 100 99 98 97 96 95 94 93 92 91 90 89
Diluted Earnings Per Share 4.80 4.97 5.06 6.60 6.46 7.03 7.23 8.17 8.46 8.93 9.46 11.43

Model Assumptions Mar-17 June-17 Sept-17 Dec-17 Mar-18 June-18 Sept-18 Dec-18 Mar-19 June-19 Sept-19 Dec-19
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019E 2Q2019E 3Q2019E 4Q2019E
Monthly Average Users (MAU, in $M) 150 152 153 160 158 160 161 165 160 162 163 170
MAU growth (QoQ) 1.3% 0.7% 4.6% -1.3% 1.3% 0.6% 2.5% -1.5% 1.0% 0.5% 3.0%
MAU growth (YoY) 5.3% 5.3% 5.2% 3.1% 1.3% 1.3% 1.2% 3.0%
Revenue per MAU user (in $) $6.33 $6.41 $6.54 $7.50 $7.28 $7.50 $7.76 $8.48 $9.35 $9.50 $9.75 $11.00
Revenue/MAU growth (QoQ) 1.3% 1.9% 14.8% -3.0% 3.0% 3.5% 9.3% 10.2% 1.6% 2.6% 12.8%
Revenue/MAU growth (YoY) 14.9% 16.9% 18.8% 13.1% 28.5% 26.7% 25.6% 29.6%
Operating expenses to revenue 37% 37% 38% 33% 33% 30% 32% 32% 35% 34% 33% 32%
Operating margin 63% 63% 62% 67% 67% 70% 68% 68% 65% 66% 67% 68%
Effective tax rate 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
 2.0%
2.4%
2.8%
3.2%
3.6%
4.0%
Over
night

3-mo

6-mo

1-yr

2-yr

3-yr
Yield Curve

5-yr

7-yr

10-yr

20-yr

30-yr
 Regression Statistics
Multiple R 0.5008
R Square 0.2508
Adjusted R Square 0.2408
Standard Error 0.0088
Observations 101
ANOVA
df SS MS F Significance F
Regression 1 0.0026 0.0026 33.4739 0.0000
Residual 100 0.0077 0.0001
Total 101 0.0103

Coefficients Standard Error t Stat P-value

S&P500 % Chg 1.12 0.19 5.79 0.00
Income Statement December-18 December-19 December-20 December-21 December-2022 December-23
($ in millions) FY2018 FY2019E FY2020E FY2021E FY2022E FY2023E
Revenue 750 800 825 900 1,200 1,400
Operating Expenses (including Depreciation) 600 656 652 729 960 1,148
Operating Margin 150 144 173 171 240 252
Interest expense 15.0 14.8 9.5 14.4 14.3 14.1
Pre-tax income 135 129 164 157 226 238
Income Tax 27 26 33 31 45 48
Net Income 123 118 141 140 195 204
Diluted shares outstanding 350 348 346 344 342 340
Diluted Earnings Per Share 0.35 0.34 0.41 0.41 0.57 0.60

Balance Sheet December-18 December-19 December-20 December-21 December-2022 December-23

($ in millions) FY2018 FY2019E FY2020E FY2021E FY2022E FY2023E
Cash and equivalents 610 694 740 1,018 1,211 1,408
Accounts receivable 250 280 275 300 325 350
Property, Plant & Equipment (PP&E) 738 732 722 713 710 713
All other Assets 50 75 100 125 150 175
Total Assets 1,648 1,781 1,837 2,156 2,396 2,646
Accounts payable 125 120 150 175 200 225
Long-term debt 395 390 250 380 375 370
All other liabilities 45 50 55 60 65 70
Total Liabilities 565 560 455 615 640 665
Common equity and APIC 860 880 900 920 940 960
Retained earnings 223 341 482 621 816 1,021
Total Shareholders' Equity 1,083 1,221 1,382 1,541 1,756 1,981
- - - - - -

Cash Flow Statement December-18 December-19 December-20 December-21 December-2022 December-23

(Dollars in millions) FY2018 FY2019E FY2020E FY2021E FY2022E FY2023E
Net Income 123 118 141 140 195 204
Depreciation expense 37 36 35 34 33 32
Changes in operating Assets & liabilities
Accounts receivable (25) (30) 5 (25) (25) (25)
Accounts payable 5 (5) 30 25 25 25
Net Cash provided by operations 140 119 211 174 228 236
Capital expenditures (25) (30) (25) (25) (30) (35)
Net Cash provided by investing activities (25) (30) (25) (25) (30) (35)
Proceeds from debt issuance/(principle paydown) (5) (5) (140) 130 (5) (5)
Net Cash provided by financing activities (5) (5) (140) 130 (5) (5)
Net increase in cash and equivalents 110 84 46 279 193 196
Cash and equivalents at beginning of period 500 610 694 740 1,018 1,211
Cash and equivalents at end of period 610 694 740 1,018 1,211 1,408

Ratios and Assumptions December-18 December-19 December-20 December-21 December-2022 December-23

FY2018 FY2019E FY2020E FY2021E FY2022E FY2023E
Tickets sold (in millions) 25 26 27 29 36 39
Average Selling Price per ticket (in $) $30.00 $30.77 $30.56 $31.03 $33.33 $35.90
Operating margin 20.0% 18.0% 21.0% 19.0% 20.0% 18.0%
Average debt balance ($ in millions) 397.5 392.5 320.0 315.0 377.5 372.5
Interest expense to average debt 3.8% 3.8% 3.0% 4.6% 3.8% 3.8%
Capex to revenue 3.3% 3.8% 3.0% 2.8% 2.5% 2.5%
Effective tax rate 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Free Cash Flow to Firm (FCFF) 103 77 178 137 186 190
Number of years to discount 0 1 2 3 4 5
Discounted FCFF 71 150 107 133 125
Sensitivity Analysis 1Q2019E EPS Sensitivity to Cone Growth and Gross Margin
F1Q2019E Cone Growth year-over-year
0.29 -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
49.0%
49.5%
50.0%
1Q2019E Gross
Margin 50.5%
51.0%
51.5%
52.0%
 Regression Statistics
Multiple R 0.9276
R Square 0.8605
Adjusted R Square 0.8568
Standard Error 0.0182
Observations 40
ANOVA
df SS MS F Significance F
Regression 1 0.0775 0.0775 234.3899 0.0000
Residual 38 0.0126 0.0003
Total 39 0.0900

Coefficients Standard Error t Stat P-value

Intercept 0.0091 0.0029 3.1096 0.0035
Gold Price (%, chg) 0.6988 0.0456 15.3098 0.0000