Exhibits - Tom Ridge, Former Secretary of Homeland Security

EXHIBIT 1
Page 1
5 of 109 DOCUMENTS
The Advocate (Baton Rouge, Louisiana)
January 23, 2003, Thursday METRO EDITION
Ridge confirmed in Senate vote

SECTION: News; Pg. 2-A Dateline WASHINGTON Credit AP Keywords George Bush
Congress Filename homelan-ridge Story Lead Ridge confirmed in Senate vote By The
Associated Press WASHINGTON - The Senate confirmed Tom Ridge a Editor kay Art
Photo;Graphic
LENGTH: 394 words
DATELINE: homelan-ridge
WASHINGTON - The Senate confirmed Tom Ridge as homeland security chief

Wednesday with a unanimous vote - and a strong message that it would be watching
carefully as he molds a makeshift operation into one of government's largest
agencies.
"With today's historic vote, the Senate has demonstrated our shared
commitment to doing everything we can to secure our homeland," President Bush
said after the 94-0 vote to make Ridge, former Pennsylvania governor and the
president's top adviser on domestic terrorism, the first secretary of the new
Homeland Security Department.
Ridge, 57, will head a department that originated in legislation signed by

Bush last November and won't formally come into being until Friday, when the
president plans to swear Ridge into office.
It eventually will be composed of 170,000 civil servants now working at 22

separate agencies with security-related functions, including the Customs
Service, Immigration and Naturalization Service, Secret Service, Coast Guard,
Transportation Security Administration and the Federal Emergency Management
Agency.
The Department of Homeland Security's headquarters will be at a secure office

complex in northwest Washington that is run by the Navy, spokesman Gordon
Johndroe said Wednesday. The department will take over a four-story building
that will initially house Ridge and his senior staff, but is expected to grow as
Homeland Security takes on more of its duties.
The site, the Naval District of Washington's Nebraska Avenue Complex, is near
the American University campus and a few blocks from Vice President Dick
Cheney's residence at the U.S. Naval Observatory. It has an operations center
where officials will monitor potential terrorist targets and manage crises.
Tom Ridge
Secretary of the Homeland Security Department, a new Cabinet post

Page 2
Ridge confirmed in Senate vote The Advocate (Baton Rouge, Louisiana) January 23,
2003, Thursday
Born: Aug. 26, 1945, in Munhall, Pa., a Pittsburgh suburb
Education
1967 Bachelor's degree with honors, Harvard University
1972 Law degree, Dickinson Law School
Military
1968-70 Army infantry staff sergeant in Vietnam;
awarded Bronze Star for Valor
Government
1979-82 Assistant district attorney, Eric County, Pa.
1983-95 Six terms in U.S. House of Representatives
1995-2001 Governor of Pennsylvania
2001-03 Head, Office of Homeland Security
@2003 KRT
Source: Pennsylvania Governor's Office AP
SUBJECT: NATIONAL SECURITY (92%); SPECIAL INVESTIGATIVE FORCES (91%); US FEDERAL

GOVERNMENT (91%); LEGISLATIVE BODIES (90%); GOVERNORS (89%); LAW
SCHOOLS (86%); NAVIES (78%); TERRORISM (78%); US STATE
GOVERNMENT (78%); LEGISLATION (78%); DISASTER & EMERGENCY AGENCIES (77%); LAW
ENFORCEMENT (73%); ARMIES (73%); LAWYERS (73%); JUSTICE DEPARTMENTS (72%); ARMED
FORCES (72%); US PRESIDENTS (71%); EDUCATION (69%); EXCISE &
CUSTOMS (68%); IMMIGRATION (68%); COLLEGES & UNIVERSITIES (64%); OBSERVATORIES &
TELESCOPES (64%);
LOAD-DATE: January 23, 2003
LANGUAGE: ENGLISH
GRAPHIC: Biographical box with an enclosed mug of Tom Ridge (Source:

Pennsylvania Governor's Office (AP)
Copyright 2003 Capital City Press

EXHIBIT 2
Page 1
21 of 68 DOCUMENTS
The Weekly of Business Aviation
February 21, 2005
CHERTOFF TAKES REINS OF DHS

BYLINE: Staff
SECTION: News; Pg. 85 Vol. 80 No. 8
LENGTH: 127 words
CHERTOFF TAKES REINS OF DHS - General aviation groups last week were lining
up to get on Michael Chertoff's schedule after he was officially sworn in
Tuesday as the second secretary of the Department of Homeland Security. The
Senate confirmed the nomination of Chertoff Tuesday to succeed Tom Ridge, who
stepped down Feb. 1.
Aircraft Owners and Pilots Association President Phil Boyer said AOPA plans
"to ask for a meeting [with Chertoff] as soon as possible to make sure he
understands the important role GA plays in American day-to-day life." National
Business Aviation Association President Ed Bolen praised the confirmation,
saying, "We look forward to having an opportunity to familiarize Mr. Chertoff
with the priorities of the business aviation community."
LOAD-DATE: February 24, 2005
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Magazine
JOURNAL-CODE: BA
Copyright 2005 The McGraw-Hill Companies, Inc. http://www.mcgrawhill.com

All Rights Reserved
EXHIBIT 3
Former Antiterror Officials Find Industry Pays Better - New York Times Page 1 of 6
June 18, 2006
Former Antiterror Officials Find Industry Pays Better

By ERIC LIPTON
Correction Appended
WASHINGTON, June 17 — Dozens of members of the Bush administration's domestic security team,
assembled after the 2001 terrorist attacks, are now collecting bigger paychecks in different roles: working on
behalf of companies that sell domestic security products, many directly to the federal agencies the officials
once helped run.
At least 90 officials at the Department of Homeland Security or the White House Office of Homeland Security
— including the department's former secretary, Tom Ridge; the former deputy secretary, Adm. James M.
Loy; and the former under secretary, Asa Hutchinson — are executives, consultants or lobbyists for
companies that collectively do billions of dollars' worth of domestic security business.
More than two-thirds of the department's most senior executives in its first years have moved through the
revolving door. That pattern raises questions for some former officials.
"People have a right to make a living," said Clark Kent Ervin, the former inspector general of the department,
who now works at the Aspen Institute, a nonpartisan public policy research center. "But working virtually
immediately for a company that is bidding for work in an area where you were just setting the policy — that is
too close. It is almost incestuous."
Federal law prohibits senior executive branch officials from lobbying former government colleagues or
subordinates for at least a year after leaving public service. But by exploiting loopholes in the law — including
one provision drawn up by department executives to facilitate their entry into the business world — it is often
easy for former officials to do just that.
Michael J. Petrucelli, for example, who was once acting director of citizenship and immigration services,
moved within months of leaving his post in July 2005 to a job in which he lobbied the Coast Guard, another
unit of the department, to test a power-supply device made by his new employer, GridPoint.
Victor X. Cerda, within a few months of his 2005 departure as acting director of the agency that handles the
detention of illegal immigrants, was hired by a company that is a top contractor for that agency. With Mr.
Cerda's help, the company is now seeking millions of dollars in new agency business.
In their new roles, former department officials often command salaries that dwarf their government
paychecks. Carol A. DiBattiste, who made $155,000 in 2004 as deputy administrator at the Transportation
Security Administration, earned more than $934,000 last year from ChoicePoint, a Homeland Security
Department contractor she joined in April 2005, the same month she left the agency.
http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

Mr. Ridge, the former secretary, stands to profit handsomely now that Savi Technology, a maker of radio
frequency identification equipment that the department pushed while he was secretary, is being bought by
Lockheed Martin. He was appointed to the Savi board three months after resigning from the department and
has been compensated with an undisclosed number of stock options that Lockheed will presumably need to
buy back. In the coming weeks, Mr. Ridge says he plans to open his own domestic security and crisis
management consulting firm.
The shift to the private sector is hardly without precedent in Washington, where generations of former
administration officials have sought higher-paying jobs in industries they once regulated. But veteran
Washington lobbyists and watchdog groups say the exodus of such a sizable share of an agency's senior
management before the end of an administration has few modern parallels.
"It is almost like an initial public offering in the stock market," Scott Amey, general counsel at the Project on
Government Oversight, based in Washington, said of the booming domestic security market. "Everyone
wants a piece of it."
Anatomy of a Transition
For two years, Mr. Hutchinson, a onetime United States congressman and a current candidate for Arkansas
governor, served as under secretary for border and transportation security, supervising the 110,000
employees charged with guarding the nation's borders, ports and airports. His transition from public service
to the for-profit world could serve as a primer for others.
Mr. Hutchinson began his negotiations to enter private industry months before he resigned. On March 2,
2005, the day after he officially left the department, he began work at Venable LLP, a Washington law and
lobbying firm that represents major domestic security contractors like Lockheed Martin.
Federal law prohibits executive branch officials from negotiating for a future job with companies they
oversee. Mr. Hutchinson complied with this provision by signing a waiver in December 2004, vowing to be
"disqualified from participating personally in any particular matter that would have a direct and predictable
effect on Venable."
Benjamin R. Civiletti, the chairman of Venable, made clear why Mr. Hutchinson was attractive to the firm.
"Asa was not only present at the creation of this vast new security infrastructure," Mr. Civiletti said when
announcing Mr. Hutchinson's appointment as director of the firm's domestic security practice. "He was one
of the chief architects and implementers."
Mr. Hutchinson was soon representing clients including Intelligenxia, a data-mining software company
seeking domestic security business; ImmuneRegen BioSciences, a pharmaceutical company that sells anti-
radiation drugs; and Global Computer Enterprises, which wants to expand its computer software and
systems sales to the department.
Working with Mr. Hutchinson at Venable was Alison R. Williams, his special assistant at the Homeland
Security Department, who was not senior enough at the agency to be subject to the one-year lobbying ban.

Ms. Williams set up and attended a meeting between Global and Andrew B. Maner, then the department's
chief financial officer, which Mr. Hutchinson did not attend. Mr. Maner was overseeing the introduction of a
financial management system, and Global wanted a bigger piece of the job.
"We wanted to educate Homeland Security officials," said David Lucas, director of government relations at
Global. "We wanted our view heard."
Mr. Hutchinson opened a second for-profit venture in Arkansas, his home state, starting a firm he called
Hutchinson Security Strategies. Again, he enlisted a former department aide, Betty Anderson Guhman, who,
like Ms. Williams, was not subject to the one-year lobbying ban.
Ms. Guhman says she interacts regularly with Homeland Security Department officials on visits to
Washington, as she did recently, meeting with W. Ralph Basham after his nomination as commissioner of
customs and border protection.
Mr. Hutchinson said the presence of his business partners at these meetings was not meant to circumvent the
lobbying ban. "When I am not at a meeting," he said, "I am not at the meeting."
Nine months after leaving the department, Mr. Hutchinson moderated a private briefing and reception in
Washington for senior domestic security officials and industry representatives given by Saflink, a Bellevue,
Wash., manufacturer of fingerprint and other identification technology. The event focused on two
transportation security programs that Saflink intended to bid on and that Mr. Hutchinson, who had been
named to Saflink's board, helped create at the department.
Thanks to the participation by Mr. Hutchinson and others, the briefing achieved its goal of "solidifying
Saflink's position as a leader in this area in the minds of key government decision makers," Glenn
Argenbright, Saflink's chief executive, said in describing the event to industry analysts.
Mr. Hutchinson said he was convinced that the session did not violate the lobbying ban. "A panel discussion
forum is not lobbying by any standard whatsoever," he said.
The biggest potential for profit among Mr. Hutchinson's ventures appears to come from his role as an
investor in Fortress America Acquisition, a domestic security investment firm for which he also acts as an
adviser. The company raised $42 million last year by selling stock through an initial public offering. Mr.
Hutchinson, before the stock was sold publicly, bought 200,000 shares for $25,000. At Friday's trading price
the stock was worth more than $1.2 million. (He cannot sell those shares for at least two years.)
Given the demands of running for office, Mr. Hutchinson chose not to renew a one-year contract with
Venable in March. Calculating how much he earned through all these endeavors over the last year is difficult.
His financial disclosure form filed in Arkansas in May as part of the governor's race says only that in 2005 he
made more than $12,500 — the maximum amount available to check off on the state disclosure form — from
at least four different domestic-security-related ventures, not including the department itself.
Mr. Hutchinson acknowledges that in one year he earned more than he ever did in one year as under
secretary at the Homeland Security Department, but he declined to give an estimate of his earnings.

What troubles Mr. Amey of the Project on Government Oversight are not the lucrative paychecks earned by
former officials like Mr. Hutchinson, but what he sees as an effort to disregard the spirit of the lobbying ban
in pursuit of those rewards.
"It is a dirty way to get around the conflict-of-interest and ethics rules," Mr. Amey said. "It is legal. But is it
appropriate? I don't think so."
Laws and Loopholes
The law that governs the so-called post-employment life for federal officials was enacted in 1962. It prohibits
senior officials from "any communication to or appearance" before their former government department or
agency on behalf of another for one year from the date they leave their job. There is also a lifetime ban on
communicating with anyone at the department in connection with "a particular matter" in which the former
official "participated personally and substantially."
A separate law prohibits certain former federal employees, like program managers or contracting officers,
from accepting a job with a company they supervised for a year afterward if a contract involved exceeded $10
million.
Robert E. Coyle, the designated ethics official for the Homeland Security Department, said he believed that
former department executives were almost universally honoring the rules. "We can argue about what the law
should be," Mr. Coyle said, "but let's not tar people with misconduct because they are doing something that is
permissible under the law."
Some former officials said the motivation to leave was not to cash in on their expertise but the sheer
exhaustion they felt after setting up a new and often maligned agency. Others said they had unnecessarily
arranged to work, for at least their first year outside government, on projects unrelated to department
business.
"That was a precondition to the job," said Greg Rothwell, who stepped down this year as the agency's chief
contracting officer and now works for Booz Allen Hamilton, which recently won a $250 million, five-year
technology consulting contract from the department.
But the experience in the short life of the agency shows that the law often does little to prevent former
officials from moving quickly to lobby the government on domestic security matters on behalf of their new
bosses or clients.
Perhaps the biggest loophole was created in late 2004 at the request of senior department officials, when the
first big wave of departures began. The Office of Government Ethics approved a request by the department to
split it into seven components for the purposes of the ethics rules. Once in the private sector, most former
department officials were prohibited for one year from lobbying the same component where they once
worked.
That meant that Mr. Petrucelli technically complied with the ethics rules even though he left the Homeland
Security Department and within months started pitching GridPoint products to the Coast Guard. The reason:

the Coast Guard is not part of the component that contained Mr. Petrucelli's former agency, Citizenship and
Immigration Services.
Within Bounds
Tom Blank's swift move into the private sector was made possible by a different loophole. Mr. Blank became
vice chairman of the lobbying firm Wexler & Walker Public Policy Associates just two weeks after leaving the
Transportation Security Administration in September 2005, where he had been the No. 2 official.
Mr. Blank set up a new practice within the lobbying firm representing an association of contractors including
Lockheed Martin and General Electric that planned to bid on an airport checkpoint security program he had
helped create while with the agency. In his new role, Mr. Blank also helped draft proposed technical
standards for the checkpoint program that were submitted to his former subordinates at the security
administration.
Mr. Blank pointed out that ethics rules allowed former officials to work behind the scenes in many areas
where they were previously involved. He said he honored the one-year lobbying prohibition by having
another partner at Wexler & Walker sign the document turned in to the Homeland Security Department.
For Mr. Cerda, the former acting director of immigrant detention operations, the saving grace was his
relatively modest salary at the department. He left his government post in July 2005 to join a law firm
specializing in immigration. One of his first lobbying clients was the Geo Group, which sells detention center
bed space to his former agency. One Geo Group subsidiary had won a contract to operate a 1,000-bed
detention complex in Texas while Mr. Cerda helped run the agency.
In his new role, he is helping Geo prepare to bid on more contracts, and he has directly represented Geo
before the department, attending a meeting with Geo executives at his old agency, even though he has been
gone less than a year. He can do this without violating the lobbying rules because he did not earn enough at
the Homeland Security Department to be covered by the ban. According to federal records, Mr. Cerda earned
$135,000 at the department in 2005, about $5,000 below the cutoff salary.
Steve Parsons's quick transition into the private sector appears to be possible because of another financial
exemption. As a deputy program manager for the Transportation Security Administration, Mr. Parsons
helped run an office that created identification cards for port workers. He quit last year to work as a sales
manager for Senture, a small Kentucky subcontractor of the program.
Under ethics law, someone with Mr. Parsons's title cannot work for a subcontractor until after a year. But
there is a loophole: Senture's subcontract was under the law's $10 million cap.
Correction: June 21, 2006
A front-page article on Sunday about members of the Bush administration who are now working for companies that sell domestic
security products misstated the elected office once held by Asa Hutchinson, a former undersecretary of Homeland Security, in
some copies. He was a congressman from Arkansas. (It was his older brother Tim who served as a senator for one term.)
Copyright 2006 The New York Times Company

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EXHIBIT 4
Tom Ridge joins Home Depot board - MarketWatch http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B0BD5D...
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Ridge to join Home Depot board

By Jennifer Waters, MarketWatch
Last update: 4:18 p.m. EST Feb. 24, 2005
CHICAGO (MarketWatch) -- Former Homeland Security Secretary Tom Ridge will

join the board of Home Depot Inc., replacing Roger Penske, the company said E-mail
Thursday. Print
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Ridge, the former governor of Pennsylvania, was the first director of Homeland
Security -- a federal department formed hastily in the wake of the terrorist attacks Recommend this story
on Sept. 11, 2001. He left that post in late November, saying he wanted to pursue After the Bell E-newsletter
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Ridge is quite familiar with home-improvement projects. He was instrumental in a READ E-MAILED EDITOR'S PICK
short-lived run on duct tape in early 2003, when he encouraged Americans to turn
to the sticky substance and plastic sheeting as protection against terrorists using 1. Circuit City to shut 155 U.S. stores to preserve
chemical and/or biological agents. cash
2. U.S. stock futures nudge lower after strong week
The move, which drew criticism from many corners, motivated many across the 3. Citi say credit card losses may hit record levels
country to stock up -- to the extent that some retailers reported widespread in 2009
shortages. 4. U.S. crisis effort may have further roiled markets:
Lacker
Both Home Depot and rival Lowe's Cos. (LOW: , , ) were among 5. Dumping stocks now could be hazardous to your
the big beneficiaries of the buying binge. Home Depot, in fact, went so far as to wealth
set up special Homeland Security displays nears it entrances to tout sales of duct 6. Monday's biggest gaining and declining stocks
tape, plastic sheeting, batteries and bottled water, among other safe-room 7. Circuit City to shut 155 U.S. stores to preserve
supplies. cash
8. The 'greed is good' anthem needs an
At the time, Ridge had just upped the color-coded security threat advisory to amendment
orange, the second highest level. That was lowered in November 2004 to yellow, 9. Factory output weakest in 26 years, ISM survey
in the middle of the five-level alert range. says
10. U.S. ISM factory index plunges again in October
Penske, chairman of United Auto Group Inc. (UAG: 18.20, 0.00, 0.0%) , is set to
retire at the company's annual shareholders meeting in May.
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EXHIBIT 5
Mozilo, Ridge to leave Home Depot board - Los Angeles Times http://articles.latimes.com/2007/mar/20/business/fi-briefs20.1
Business
You are here: LAT Home > Articles > 2007 > March > 20 > Business
Archive for Tuesday, March 20, 2007
Mozilo, Ridge to leave Home Depot board

March 20, 2007 in print edition C-5
Home Depot Inc. said directors Angelo Mozilo and Tom Ridge would step down after the company’s annual meeting
in May.
Ridge’s and Mozilo’s decisions aren’t tied to “any disagreement on the company’s operations, policies or
practices,” Atlanta-based Home Depot said in a filing with the Securities and Exchange Commission.
Home Depot ousted former Chief Executive Robert Nardelli in January after criticism of his pay. Nardelli was the
only board member to appear at last year’s annual meeting and refused to answer questions, raising investor ire
over the company’s lack of responsiveness. New CEO Frank Blake said Wednesday that the full board would
attend this year.
Related Articles
Home Depot tightens pay approval process Jan 09, 2007
Home Depot to Alter Vote Rule Aug 30, 2006
Home Depot Director Reelected May 28, 2004
$210 million to step aside Jan 04, 2007
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EXHIBIT 6
Clerk of the House of Representatives Secretary of the Senate
Legislative Resource Center Office of Public Records
B-106 Cannon Building 232 Hart Building
Washington, DC 20515 Washington, DC 20510
http://lobbyingdisclosure.house.gov http://www.senate.gov/lobby
LOBBYING REPORT
Lobbying Disclosure Act of 1995 (Section 5) - All Filers Are Required to Complete This Page
1. Registrant Name ✔ Organization/Lobbying Firm Self Employed Individual

2. Address Check if different than previously reported
Address1

Address2
City
State Zip Code - Country
3. Principal place of business (if different than line 2)
City State Zip Code - Country
4a. Contact Name b. Telephone Number c. E-mail 5. Senate ID#

International Number

7. Client Name Self Check if client is a state or local government or instrumentality 6. House ID#

TYPE OF REPORT 8. Year Q1 (1/1 - 3/31) Q2 (4/1 - 6/30) Q3 (7/1-9/30) ✔

Q4 (10/1 - 12/31)
9. Check if this filing amends a previously filed version of this report
10. Check if this is a Termination Report Termination Date 11. No Lobbying Issue Activity
INCOME OR EXPENSES - YOU MUST complete either Line 12 or Line 13

12. Lobbying 13. Organizations
INCOME relating to lobbying activities for this reporting period EXPENSE relating to lobbying activities for this reporting period
was: were:
Less than $5,000 Less than $5,000
$5,000 or more ✔
$ $5,000 or more $
Provide a good faith estimate, rounded to the nearest $10,000, 14. REPORTING Check box to indicate expense
of all lobbying related income from the client (including all accounting method. See instructions for description of options.
payments to the registrant by any other entity for lobbying
Method A. Reporting amounts using LDA definitions only
activities on behalf of the client).
Method B. Reporting amounts under section 6033(b)(8) of the
Internal Revenue Code
Method C. Reporting amounts under section 162(e) of the Internal
Revenue Code
Signature

Date
Printed Name and Title

v6.0.1f 1
Page ______ 4
of ______
Registrant
Client Name
LOBBYING ACTIVITY. Select as many codes as necessary to reflect the general issue areas in which the registrant
engaged in lobbying on behalf of the client during the reporting period. Using a separate page for each code, provide
information as requested. Add additional page(s) as needed.
15. General issue area code

(one per page)
16. Specific lobbying issues

!""#$%&%''

'((($'&%''
'(((%')'%*+
!! ,
17. House(s) of Congress and Federal agencies Check if None

18. Name of each individual who acted as a lobbyist in this issue area
First Name Last Name Suffix Covered Official Position (if applicable) New

19. Interest of each foreign entity in the specific issues listed on line 16 above ✔ Check if None

v6.0.1f 2
Page ______ 4
of ______
Registrant
Client Name

(one per page)




v6.0.1f 3
Page ______ 4
of ______
Registrant
Client Name

(one per page)




v6.0.1f 4
Page ______ 4
of ______
EXHIBIT 7
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EXHIBIT 8
Page 1
53 of 111 DOCUMENTS
Salon.com
April 7, 2005 Thursday
Passport to pry
BYLINE: By Katharine Mieszkowski
SECTION: Feature
LENGTH: 1128 words
HIGHLIGHT: Civil libertarians are up in arms over government plans to embed new
I.D. chips in visas and passports. And isn't it convenient that Tom Ridge is now
the I.D. technology's biggest salesman?
One day, Tom Ridge is running the Department of Homeland Security. The next
day, he's working for a company that supplies high-security technology to the
Department of Defense. No surprise there. The revolving door between the Bush
administration and private companies that profit from the government seems to be
a trademark of this White House.
On Tuesday, Ridge was named to the board of directors of Savi Technology, a

privately held Sunnyvale, Calif., multinational. The company supplies RFID
(radio frequency identification technology) to the U.S. military. It's used to
track and manage shipments of supplies and equipment to American forces in Iraq
and elsewhere around the world.
In his new role, Ridge will be the latest and most high-profile RFID
evangelist. "It's clear his experience and expertise in government and Homeland
Security ... will be a great contribution to our strategies and developments,"
says Mark Nelson, a Savi spokesperson.
It was certainly savvy to sign up Ridge to endorse RFID, as the technology

has many controversial applications. The Bush administration is in the process
of adopting RFID technology as a way to keep track of not just things but also
people.
The storm over the technology erupted when libraries adopted it to track
books. Privacy advocates argued that it could be abused to monitor patrons and
what they read, spawning any number of suspicions about them.
Today, civil libertarians are up in arms over the State Department's

intention to use RFID in U.S. passports, beginning this year. "It is the
government and the private sector joining together as usual to create and deploy
surveillance technologies," says Lee Tien, an attorney for the Electronic
Frontier Foundation, which, along with the American Civil Liberties Union, sent
copious comments to the State Department critiquing the plan to use the
technology for passports. "It's all one big happy family as far as they're
concerned. Unfortunately for everyone else concerned, it is just one great big
Page 2
Passport to pry Salon.com April 7, 2005 Thursday
surveillance industrial complex."
"It's mildly entertaining that just as we're seeing a massive push for RFID
and tracking chips in everything, the first Bush appointee to Homeland Security
just happens to be involved," says Bill Scannell, a privacy activist who put up
the site RFID Kills.com last week to oppose the use of the technology in
passports. "It all goes to the heart of what happens when people get treated
like bottles of shampoo getting shunted around the supply chain from warehouse
to warehouse. This is the Bush administration's approach to security. And it
doesn't work. It's great for shampoo. It's bad for people."
The new "electronic passports" will be equipped with a chip capable of

transmitting personal information -- such as your name, nationality and address
-- found on standard passports. The State Department contends that the chips
will bring a new level of security to American passports, making them easier to
process at border crossings and harder to forge. But privacy advocates and civil
libertarians argue that it will achieve exactly the opposite result: exposing
American citizens to having their personal information read or stolen without
their passport ever leaving their hands.
Beth Givens, director of the Privacy Rights Clearinghouse, a privacy rights

group, says: "The reason that I am so concerned about the passport RFID issue is
that individuals have no choice in the matter. If they want to travel beyond the
borders of the United States they must carry a passport. So, they are going to
be forced to carry a tracking technology with them whenever they go."
The reason RFID is more controversial than, say, a bar code is that the data
on the chip is read by a remote reader. The State Department asserts that the
tags it will use can be read from only 4 inches away. But privacy advocates say
there's no way the State Department can guarantee that.
As security expert Bruce Schneier writes on his blog: "Unfortunately, RFID

chips can be read by any reader, not just the ones at passport control. The
upshot of this is that travelers carrying around RFID passports are broadcasting
their identity. Think about what that means for a minute. It means that passport
holders are continuously broadcasting their name, nationality, age, address and
whatever else is on the RFID chip. It means that anyone with a reader can learn
that information, without the passport holder's knowledge or consent. It means
that pickpockets, kidnappers and terrorists can easily -- and surreptitiously --
pick Americans or nationals of other participating countries out of a crowd."
There are no plans to encrypt the data on the tags in passports. "This is a
dangerous, inappropriate device to be installing in U.S. passports," says
Scannell, who imagines terrorists overseas identifying Americans by their
passports when picking targets to bomb. "Which cafe do we lob the grenade into?
Ping, ping, ping. There are 21 Americans in there." The tags could also be used
to identify people who walk into an abortion clinic, a mosque or a political
meeting.
Tags are being tested in other areas that concern civil liberties advocates.
The Department of Homeland Security is experimenting with them as a way to
monitor foreign visitors at U.S. border crossings. Electronic tags placed in
visas and passports may speed up customs lines and identify suspects on
government watch lists. But they could also expose travelers to invasions of
privacy. Meanwhile, the Texas Legislature is considering allowing RFID to be
placed in cars to ensure that drivers have valid insurance.
Page 3
Passport to pry Salon.com April 7, 2005 Thursday
RFID has long been used for supply-chain management, both by business and the
government. The Department of Defense uses Savi's technology to manage equipment
and supplies in 40-foot-long shipping containers. "Picture hundreds if not
thousands of containers in the desert," explains Savi spokesperson Nelson. "And
workers need to find milk or boots or bullets. Rather than opening up each
container, they can take a handheld device and scan those mountains of
containers and find it." He adds that the company has had a relationship with
the Department of Defense for nearly a decade, though he refuses to disclose
what percentage of its business stems from Pentagon.
Savi is not among the companies competing to supply the RFID technology for
U.S. passports. Besides, proponents of the technology stress that the
implementation of RFID used in the desert to track military equipment has more
in common with an EZ-Pass automatic toll crossing than what would be used in
passports. Perhaps new hire Ridge, with all of his homeland experience, can help
Savi bridge the gap between the battlefield and the border crossing.
LOAD-DATE: April 8, 2005
LANGUAGE: ENGLISH
Copyright 2005 Salon.com, Inc.

EXHIBIT 9
RFID adoption could boost homeland security http://www.washingtontechnology.com/cgi-bin/udt/im.display.printable?c...
RFID adoption could boost homeland security

04/01/04 -- 03:00 PM
By Brad Grimes,
Sponsored By
Widespread use of radio frequency identification technology
throughout commercial industry could help the Homeland
Security Department do its job better, a department official said
today.
When companies use RFID to improve their supply chains,

Homeland Security gains greater confidence in those supply
chains, “thereby lessening the need for us to come in with some
kind of one-size-fits-all regulatory structure,” said Stewart
Verdery, assistant secretary for border and transportation
security policy and planning.
Verdery was speaking on an RFID panel in Washington,

sponsored by the Commerce Department. He also described
some of the department’s plans to use RFID tags in its own systems.
As part of its Free and Secure Trade initiative, the Customs and Border Protection Bureau within Homeland
Security has already begun using RFID tags to identify freight trucks as they cross the border with Canada.
By the end of the year, the Homeland Security Department expects to extend the U.S. Visitor and Immigration
Status Indication Technology system to cover land entries along the nation’s borders.
The U.S. Visit system is currently in use at 115 airports and 14 seaports. People entering the country on a visa are
fingerprinted and photographed and their information is stored in a centralized system for tracking purposes.
At the Mexican border, Verdery said, the current U.S. Visit process of collecting biometric information would be
untenable due to the sheer volume of people crossing the border. Verdery said Homeland Security will employ
RFID in border crossing cards and other documents that visitors carry when they enter the country.
The department is also pushing the adoption of RFID for cargo containers. By using so-called “smart boxes,”
Homeland Security agents would be able to tell if a container had been tampered with.
Robert Poor, chief technology officer of Boston-based Ember Corp., said his company is working with firms that
make carbon dioxide sensors that could be used inside large containers. The sensors could determine whether
people were hiding inside by detecting their breathing.
In the short term, however, cost and radio spectrum issues are critical impediments to mass RFID deployment,
panel experts said.
“The RFID tag is the tip of the iceberg,” said Lyle Ginsburg, managing partner for technology innovation at
Accenture Ltd.’s Global Products Group. Ginsburg said when you factor in the cost of tags, antennae, receivers,
networking infrastructure, middleware and backend systems integration, RFID tags can cost up to a dollar
apiece—a far cry from the nickel-per-tag that the industry aims for.
1 of 2 12/18/2008 3:42 PM
RFID adoption could boost homeland security http://www.washingtontechnology.com/cgi-bin/udt/im.display.printable?c...
In addition, RFID adoption will be determined, in part, but the technology’s performance, measured by speed and
coverage. And performance is currently limited by Federal Communications Commission restrictions on wireless
spectrums, said Piyush Sodha, chief executive officer of Matrics Inc., a Columbia, Md.-based maker of RFID
equipment.
“Creating clean, healthy spectrum for this technology will help tremendously,” Sodha said.
But issues of spectrum usage and other RFID standards must be considered in a global frame of reference, said
Jon Brendsel, director of EPC network services at Mountain View, Calif.-based VeriSign Inc.
“If RFID is to help improve supply chains, it must be used globally,” Brendsel said. Companies are sourcing
products from all over the world, therefore standards and spectrum policy must be worked out by groups
worldwide.
Still, the panelists agreed that RFID technology has moved beyond the pilot stage to become a full-fledged market
opportunity. Accenture’s Ginsburg estimated there were several hundred participants in the RFID market, with
smaller companies leading the innovation charge and larger companies figuring out who to partner with.
“We’re in a classic disruptive technology phase,” Ginsburg said.
© 1996-2008 1105 Media, Inc. All Rights Reserved.
2 of 2 12/18/2008 3:42 PM
EXHIBIT 10
Federal Contracts to Contactor(s) matching "Savi", FY 2003-2004, summary http://www.fedspending.org/fpds/fpds.php?reptype=l&database=fpds&fis...
PRINTER-FRIENDLY
Search Criteria Used (More)
SUPER SEARCH Contracts to Federal Fiscal Year ALL GO
Advanced search for contracts Contractor(s) Level of Detail Summary GO
BY CONTRACTOR
"Savi" (MAP IT) Output HTML GO
Search by name: (FY

Top 100 Contractors (2008) 2003-2004)
Awards by contractor state
Awards by cong. district of contractor Summary
BY PLACE OF PERFORMANCE Total dollars: $51,686,105,057

Total number of contractors: 2 Top 5 Products or Services Sold
Overview congressional districts Total number of transactions:
Overview by state 24,190 Aircraft, Fixed Wing $9,972,805,219
Get list of contractors Operation of Government-Owned
Get list of transactions Facilities -- Government-Owned
BY CONTRACTING AGENCY $5,133,073,769
Contractor-Operated (GOCO) R&D
Overview by major agency Facilities
Extent of Competition Defense Aircraft -- Operational
$5,005,619,504
BY COMPETITION TYPE Systems Development (R&D)
Defense Missile and Space
By competition type Systems -- Advanced $2,903,721,135
Development (R&D)
BY PRODUCT OR SERVICE Defense Aircraft -- Engineering
$1,807,358,380
By product or service provided Development (R&D)
Competition and service, 2008 Expand summary to all products/services
The contracts database is compiled

from government data last released on Contracting Agencies Purchasing from
05/06/2008 Full and open
$13,748,023,873
Contractor(s)
competition
Full and open AIR FORCE, Department of the
$22,616,575,602
competition, (Headquarters, USAF)
$2,146,481,848
but only one NAVY, Department of the $13,154,861,526
bid ARMY, Department of the
Competition (except Corps of Engineers Civil $5,791,626,297
after Program Financing)
$8,751,771,644
exclusion of ENERGY, Department of $5,216,656,574
sources NATIONAL AERONAUTICS AND
Follow-on $1,491,899,556
$8,823,270,018 SPACE ADMINISTRATION
contract Federal Technology Service $840,550,219
Not available EDUCATION, Department of $215,976,962
for $3,140,545,953
Transportation Security
competition $207,938,823
Administration
Not
$14,955,398,133 National Institutes of Health $180,450,529
competed
SOCIAL SECURITY
Unknown $120,613,588 $171,825,662
ADMINISTRATION
HOUSING AND URBAN
$148,612,394
DEVELOPMENT, Department of
Defense Logistics Agency $135,998,599
Top 5 Known Congressional
Federal Bureau of Investigation $111,778,354
Districts where Work is
Centers for Medicare & Medicaid
Performed $110,570,589
Services
Internal Revenue Service $92,774,696
District of Columbia
nonvoting (Eleanor $701,470,581 Defense Information Systems
$90,511,105
Holmes Norton) Agency
Texas 22 (Tom DeLay) $470,584,685 National Geospatial-Intelligence
$88,483,876
Agency
Unknown districts
(probably outside $379,470,245 Missile Defense Agency $82,132,527
U.S.) ENVIRONMENTAL PROTECTION
$76,594,633
Maryland 7 (Elijah E. AGENCY
$107,630,378
Cummings) Minerals Management Service $73,595,204
New Jersey 3 (Jim Offices, Boards and Divisions
$85,402,829 $64,631,022
Saxton) (includes Attorney General, etc.)
Expand summary to all districts
1 of 4 12/18/2008 4:07 PM
Dept. of Transportation --
$53,637,064
unknown (invalid code)
Office of Justice Programs $52,112,217
Defense Finance and Accounting
$47,504,376
Service
STATE, Department of $40,529,260
Defense Microelectronics Activity $40,311,259
Immediate Office of the
$38,751,623
Secretary of Transportation
U.S. Coast Guard $38,260,855
Office of Policy, Management and
$31,753,380
Budget/Chief Financial Officer
U.S. Customs Service $29,646,224
Department of Defense
$28,646,147
Education Activity
Defense Advanced Research
$27,267,061
Projects Agency
U.S. Special Operations
$26,700,475
Command
Pentagon Renovation Program
$24,800,456
Office
Patent and Trademark
Office/Under Secretary for $23,196,892
Intellectual Property
Bureau of Immigration and
$20,591,327
Customs Enforcement
Centers for Disease Control and
$17,777,192
Prevention
Office of Asst. Sec. for Health
except national centers (disused $15,191,942
code)
Federal Supply Service $14,627,973
Bureau of Citizenship and
$14,239,155
Immigration
Office of the Secretary,
Department of Homeland $13,717,297
Security
Virginia Contracting Activity $12,139,557
Nuclear Regulatory Commission $10,552,566
NATIONAL ARCHIVES AND
$9,512,833
RECORDS ADMINISTRATION
VETERANS AFFAIRS,
$8,759,104
Department of
Employment and Training
$7,104,846
Administration
Defense Contract Management
$6,675,811
Agency
Forest Service $5,546,100
Employment Standards
$5,405,000
Administration
Natl. Oceanic and Atmospheric
Admin. / Under Sec. Oceans and $4,798,166
Atmosphere
Washington Headquarters
$4,780,858
Services
Office of the Assistant Secretary
for Administration and $4,639,905
Management
Federal Trade Commission $4,550,000
Indian Affairs (Assistant
$3,978,059
Secretary)
U.S. Secret Service $3,756,587
Research and Innovative
$3,309,928
Technology Administration
Defense Threat Reduction
$3,294,930
Agency
Bureau of Labor Statistics $3,279,837
Office of the Secretary $2,805,438
Commodity Futures Trading
$2,700,000
Commission
Broadcasting Board of Governors $2,435,588
2 of 4 12/18/2008 4:07 PM
Corporation for National and

$2,343,177
Community Service
Office of the Chief Financial
$1,655,211
Officer
Assistant Secretary for
$1,613,803
Administration
Federal Energy Regulatory
$910,175
Commission (disused code)
Financial Crimes Enforcement
$886,664
Network
Pension Benefit Guaranty
$733,848
Corporation
Food and Drug Administration $665,922
EXECUTIVE OFFICE OF THE
$629,716
PRESIDENT
Federal Law Enforcement
$585,624
Training Center
Geological Survey $581,962
Animal and Plant Health
$518,003
Inspection Service
Bureau of Reclamation $419,150
NATIONAL SCIENCE
$306,573
FOUNDATION
Civilian Health and Medical
Program of the Uniformed $212,043
Services
Bureau of the Census $165,000
Mine Safety and Health
$141,631
Administration
Office of Disability Employment
$97,850
Policy
Committee for Purchase from
People who are Blind or Severely $97,383
Disabled
Bureau of Prisoners/Federal
$55,695
Prison System
National Institute of Standards
$50,581
and Technology
Public Buildings Service $40,668
Peace Corps $32,500
National Park Service $16,270
Federal Election Commission $10,794
Drug Enforcement
$2,776
Administration
Substance Abuse and Mental
$0
Health Services Administration
Shrink summary to only top 5 agencies
Top 10 Contractors
LOCKHEED MARTIN CORP $51,686,024,979
SAVI, L.L.C. $80,078
Trend
3 of 4 12/18/2008 4:07 PM
2000 $0
2001 $0
2002 $0
2003 $25,478,347,472
2004 $26,207,757,585
2005 $0
2006 $0
2007 $0
2008 1Q * $0
*Note: FY 2008 only includes up through first and

part of second quarter.
Expand all summaries or Shrink all summaries
*END OF REPORT* Search Criteria Used

Federal Fiscal Year ALL GO
This search was Parent or Contractor Name Savi
done on December
18, 2008. Sort By No sort (summary only)
Fiscal Year Range 2003-2004
The contracts (MAP IT) Level of Detail Summary GO
database is Output HTML GO
compiled from
government data
last released on 05/06/2008
This search result was produced as a project of OMB Watch. The data was obtained from
the Federal Procurement Data System (FPDS) - Next Generation and other federal
government sources through Eagle Eye Publishers, Inc. Eagle Eye also provided
identification of parent companies and other data improvements.
ABOUT OMB WATCH | ABOUT THIS SITE | SITE MAP | CONTACT US
4 of 4 12/18/2008 4:07 PM
EXHIBIT 11
PRINTER-FRIENDLY
Search Criteria Used (More)
SUPER SEARCH Contracts to Federal Fiscal Year ALL GO
Advanced search for contracts Contractor(s) Level of Detail Summary GO
BY CONTRACTOR
"Savi" (MAP IT) Output HTML GO
Search by name: (FY

Top 100 Contractors (2008) 2006-2008)
Awards by contractor state
Awards by cong. district of contractor Summary
BY PLACE OF PERFORMANCE Total dollars: $67,134,488,472

Total number of contractors: 2 Top 5 Products or Services Sold
Overview congressional districts Total number of transactions:
Overview by state 35,960 Aircraft, Fixed Wing $15,195,174,585
Get list of contractors Defense Aircraft -- Operational
$8,366,360,937
Get list of transactions Systems Development (R&D)
BY CONTRACTING AGENCY
Operation of Government-Owned
Overview by major agency Facilities -- Government-Owned
Extent of Competition $6,490,413,960
Contractor-Operated (GOCO)
BY COMPETITION TYPE R&D Facilities
Space Vehicles $2,793,224,381
By competition type
Defense Missile and Space
Systems -- Operational Systems $1,888,822,141
BY PRODUCT OR SERVICE Development (R&D)
By product or service provided
Expand summary to all products/services
Competition and service, 2008
The contracts database is compiled Contracting Agencies Purchasing from

from government data last released on Contractor(s)
05/06/2008 Full and open
$15,880,159,130
competition AIR FORCE, Department of the
$27,258,831,258
Full and open (Headquarters, USAF)
competition, NAVY, Department of the $19,586,585,120
$2,257,971,270
but only one ARMY, Department of the
bid (except Corps of Engineers Civil $7,101,139,116
Competition Program Financing)
after ENERGY, Department of $6,512,513,552
$14,467,228,255
exclusion of NATIONAL AERONAUTICS AND
sources $1,666,910,097
SPACE ADMINISTRATION
Follow-on Missile Defense Agency $1,354,988,754
$9,825,198,597
contract
Defense Logistics Agency $353,723,700
Not available
SOCIAL SECURITY
for $2,291,647,348 $336,001,913
ADMINISTRATION
competition
Federal Technology Service $323,976,033
Not
$21,805,686,409 STATE, Department of $233,842,507
competed
Unknown $606,597,463 Federal Bureau of Investigation $198,915,602
Centers for Medicare & Medicaid
$186,250,611
Services
Transportation Security
$179,163,864
Administration
Top 5 Known Congressional
National Institutes of Health $177,873,202
Districts where Work is
Defense Information Systems
Performed Agency
$174,161,580
Texas 12 (Kay ENVIRONMENTAL PROTECTION

$11,302,547,817 $171,116,635
Granger) AGENCY
California 14 (Anna Internal Revenue Service $150,773,187
$5,453,719,236
G. Eshoo) HOUSING AND URBAN
$124,191,332
New Jersey 3 (Jim DEVELOPMENT, Department of
$1,938,715,120
Saxton) Defense Finance and Accounting
$103,079,751
Georgia 11 (John Service
Linder / Phil $1,668,135,108 Offices, Boards and Divisions
$87,932,193
Gingrey) (includes Attorney General, etc.)
Colorado 6 U.S. Customs Service $68,216,114
(Thomas G. $1,327,361,646 Centers for Disease Control and
Tancredo) $65,264,843
Prevention
1 of 4 12/18/2008 4:18 PM
Expand summary to all districts National Geospatial-Intelligence

$63,722,465
Agency
Defense Microelectronics Activity $62,524,899
NATIONAL ARCHIVES AND
$58,472,802
RECORDS ADMINISTRATION
Bureau of the Census $56,418,458
Office of Justice Programs $51,372,548
EDUCATION, Department of $41,296,708
Federal Aviation Administration $40,974,787
Office of Policy, Management and
$33,626,951
Budget/Chief Financial Officer
Natl. Oceanic and Atmospheric
Admin. / Under Sec. Oceans and $33,604,263
Atmosphere
Office of the Secretary,
Department of Homeland $30,646,914
Security
Defense Advanced Research
$27,746,897
Projects Agency
Bureau of Citizenship and
$27,337,566
Immigration
Department of Defense
$24,640,153
Education Activity
Forest Service $17,051,430
Federal Emergency Management
$15,209,742
Agency
Defense Intelligence Agency $12,098,247
Office of Governmentwide Policy $11,081,000
U.S. Coast Guard $9,703,026
Nuclear Regulatory Commission $9,662,039
Office of the Assistant Secretary
for Administration and $9,608,212
Management
VETERANS AFFAIRS,
$7,458,626
Department of
Virginia Contracting Activity $6,838,344
Federal Trade Commission $6,599,262
Bureau of Labor Statistics $6,504,136
Washington Headquarters
$6,191,126
Services
Office of Asst. Sec. for Health
except national centers (disused $5,708,904
code)
U.S. Secret Service $5,169,035
Indian Affairs (Assistant
$4,627,156
Secretary)
National Park Service $4,562,731
U.S. Special Operations
$3,899,909
Command
Defense Contract Management
$3,182,841
Agency
Drug Enforcement
$3,139,571
Administration
Commodity Futures Trading
$2,519,489
Commission
Broadcasting Board of Governors $2,305,786
Office of the Chief Financial
$2,081,018
Officer
Research and Innovative
$1,991,755
Technology Administration
Corporation for National and
$1,858,804
Community Service
TRICARE Management Activity $1,805,196
Bureau of Immigration and
$1,549,934
Customs Enforcement
Food and Drug Administration $891,666
National Institute of Standards
$768,134
and Technology
Bureau of the Public Debt $641,366
Federal Supply Service $433,719
2 of 4 12/18/2008 4:18 PM
Pension Benefit Guaranty

$335,172
Corporation
EXECUTIVE OFFICE OF THE
$324,518
PRESIDENT
NATIONAL SCIENCE
$295,360
FOUNDATION
Federal Energy Regulatory
$178,600
Commission (disused code)
U.S. Marshals Service $108,851
Bureau of Alcohol, Tobacco,
$75,457
Firearms and Explosives
U.S. Agency for International
$64,500
Development
Animal and Plant Health
$41,280
Inspection Service
Bureau of Land Management $34,676
Geological Survey $34,074
Smithsonian Institution, except
units under separate Board of $18,523
Trustees
Bureau of Prisoners/Federal
$11,839
Prison System
Agricultural Research Service $6,440
Public Buildings Service $4,785
OFFICE OF PERSONNEL
$300
MANAGEMENT
Bureau of Reclamation $-2,024 **
Federal Highway Administration $-22,460
Shrink summary to only top 5 agencies
Top 10 Contractors
LOCKHEED MARTIN CORP $67,134,487,422
SAVI RANCH-SPC, LLC $1,050
Trend
2000 $0
2001 $0
2002 $0
2003 $0
2004 $0
2005 $0
2006 $31,652,526,962
2007 $33,069,645,681
2008 1Q * $2,412,315,828
*Note: FY 2008 only includes up through first and

part of second quarter.
** Note: negative numbers represent
deallocations.
3 of 4 12/18/2008 4:18 PM
Expand all summaries or Shrink all summaries
*END OF REPORT* Search Criteria Used

Federal Fiscal Year ALL GO
This search was Parent or Contractor Name Savi
done on December
18, 2008. Sort By No sort (summary only)
Fiscal Year Range 2006-2008
The contracts (MAP IT) Level of Detail Summary GO
database is Output HTML GO
compiled from
government data
last released on 05/06/2008
This search result was produced as a project of OMB Watch. The data was obtained from
the Federal Procurement Data System (FPDS) - Next Generation and other federal
government sources through Eagle Eye Publishers, Inc. Eagle Eye also provided
identification of parent companies and other data improvements.
ABOUT OMB WATCH | ABOUT THIS SITE | SITE MAP | CONTACT US
4 of 4 12/18/2008 4:18 PM
EXHIBIT 12
Coast Guard's Purchasing Raises Conflict-of-Interest Flags - washingtonpo... http://www.washingtonpost.com/wp-dyn/content/article/2007/03/24/AR...
CORRECTION TO THIS ARTICLE

A March 25 article about the Coast Guard's Deepwater program incorrectly said
that former homeland security secretary Tom Ridge declined to comment.
Ridge said that when he joined the board of a company later bought by
Lockheed Martin, the firm had no plans to sell and expected to grow as a
stand-alone company.
Coast Guard's Purchasing Raises

Conflict-of-Interest Flags
By Spencer S. Hsu and Renae Merle
Washington Post Staff Writers
Sunday, March 25, 2007; A09
Four of the seven top U.S. Coast Guard officers who retired
since 1998 took positions with private firms involved in the Ads by Pulse 360
Coast Guard's troubled $24 billion fleet replacement
1 Rule of a Flat Stomach
program, an effort that government investigators have Cut down 25 lbs of stomach fat in - 1 month by obeying
criticized for putting contractors' interests ahead of this 1 rule
KimsDietPlan.com
taxpayers'.
Oprah's Flat Stomach Rule: Obey
They weren't the only officials to oversee one of the federal Oprah Cut Down 2 lbs of Stomach Fat Per Week by
government's most complex experiments at privatization, Obeying this 1 Rule
MichellesWeightLoss.com
known as Deepwater, who had past or subsequent business
ties to the contract consortium led by industry giants Top Solar Stock Pick - SSLR
Northrop Grumman and Lockheed Martin. Solar Company Heating up Texas Investment Stocks
Trading News
www.SunriseSolarCorp.com
The secretary of transportation, Norman Y. Mineta, whose
Get listed here
department included the Coast Guard when the contract
was awarded in 2002, was a former Lockheed executive.
Two deputy secretaries of the Department of Homeland Security, which the Coast Guard became part of in
2003, were former Lockheed executives, and a third later served on its board.
Washington's revolving-door laws have long allowed officials from industry giants such as Lockheed, the
nation's largest defense contractor, to spend parts of their careers working for U.S. security agencies that
make huge purchases from those companies, though there are limits.
But Deepwater dramatizes a new concern, current and former U.S. officials said: how dwindling competition
in the private sector, mushrooming federal defense spending and the government's diminished contract
management skills raise the stakes for potential conflicts of interest.
Deepwater also illustrates how federal ethics rules carve out loopholes for senior policymakers to oversee
decisions that may benefit former or prospective employers. These include outsourcing strategies under which
taxpayers bear most of the risks for failure, analysts said.
There is no sign that any of the retired admirals or former Lockheed officials did anything illegal.
But the connections between the agencies and the contractors have drawn the attention of the DHS inspector
general, Richard L. Skinner. "That is on our radar screen," he said. "It's something we are very sensitive to."
1 of 3 1/8/2009 11:57 AM
Skinner told House members last month that the Coast Guard -- acting "under the dominant influence" of
haste and inadequate staffing -- signed a Deepwater contract in June 2002 that improperly turned over key
design and oversight decisions to contractors.
The Coast Guard failed to hold them accountable and left its own commanders "reluctant . . . to exercise a
sufficient degree of authority to influence the design and production" of its vessels, Skinner said.
So far, four major classes of ships planned or produced for Deepwater have design flaws that have limited
their performance, raised costs or delayed production. The tab for eight dry-docked 123-foot patrol boats
alone is $100 million and climbing, the Coast Guard commandant, Adm. Thad W. Allen, has said.
"The Treasury is being looted here. The taxpayer is being fleeced," Rep. Stephen F. Lynch (D-Mass.) said in a
House hearing into Deepwater earlier this year.
Led by the Pentagon and the DHS, spending on federal contracts has soared in recent years. The DHS staff
that oversees outside contracts is the most overwhelmed of any in government, officials said.
An expert panel appointed by the White House and Congress found this winter that increased reliance on
contractors threatens to "undermine the integrity of the government's decision making processes." Handing
off traditional governmental duties -- such as designing major systems and managing huge contracts --
coupled with defense industry consolidation, "increased the potential for organizational conflicts of interest,"
the panel found.
Even for those sympathetic to the purpose of allowing the revolving door, Deepwater is troubling. Steven L.
Schooner, procurement expert at George Washington University Law School, said "cross-fertilizing" defense
and homeland security experts generally makes the private sector a more responsive seller and government a
smarter buyer. But he warned that job-switching has expanded beyond mid-level experts to top U.S. decision
makers, and competition among a handful of defense giants is at an ebb.
"The most significant pathology we face today is the lack of a robust competitive marketplace" for large
weapons systems, Schooner said. "If I know there's really only one contractor that might want my experience
when I retire from the government," he said, "the remainder of my career might be reduced to positioning
myself to step in to that company in a certain way."
In dealings with former private-sector colleagues, senior U.S. officials may be too willing to yield "the benefit
of the doubt, rather than look . . . with skepticism or even with a watchful eye," added Melanie Sloan,
executive director of Citizens for Responsibility and Ethics in Washington, a watchdog group.
In interviews or through spokesmen, Mineta; Michael P. Jackson, Mineta's deputy in 2002 and now deputy
secretary at the DHS; Philip J. Perry, a former Lockheed Martin lobbyist who was the department's general
counsel until last month; and other officials said they had complied with all federal ethics requirements. All
said they had no involvement in procurement decisions, gave up Lockheed-related assets, recused themselves
from activities involving the firm or performed their duties more than one year after ending their Lockheed
roles.
Retired Coast Guard Adm. James M. Loy, who helped formulate Deepwater as the Coast Guard's
commandant, said that to his knowledge "that array of players, either in their political positions, or civilian
commercial positions, or in retired Coast Guard positions" has never been linked "to undue influence." Loy
served two years as DHS deputy secretary, then joined Lockheed's board of directors in August 2005.
Asked whether he ever faced improper influence on Deepwater decisions, Loy said: "The question is almost
insulting. I will pass on giving you any kind of answer."
2 of 3 1/8/2009 11:57 AM
Key leaders of the Coast Guard and its parent departments were among the biggest backers of the Deepwater
concept. When Jackson announced the Deepwater award at the Transportation Department in 2002, he called
it a model for tapping industry's best ideas by giving contractors free rein to decide how agencies complete
their missions.
As chief operating officer for the departments of Transportation and Homeland Security, Jackson has
championed some of the government's largest outsourcing efforts, including the creation of the Transportation
Security Administration. He has come under fire for some of its costliest missteps involving windfall contracts
to hire airport screeners as well as technically flawed efforts to improve border security.
Given the number of companies involved in Deepwater and Lockheed's giant presence in the national security
market, some amount of crossover is probably difficult to avoid, experts said.
For instance, Lockheed bought a firm last year whose board of directors included former DHS secretary Tom
Ridge. Ridge joined the company shortly after leaving office in 2005, so the purchase yielded him a stock
windfall. Ridge declined to comment, but he told the Philadelphia Inquirer in December that he and the
company had followed ethics guidelines. When DHS Undersecretary Asa Hutchinson stepped down in March
2005, he joined Washington law and lobbying firm Venable LLP, whose clients include Lockheed.
Private analysts said the government has balked at investing the years, money and legislative effort it would
take to strengthen contract management, or to expand the one-year "cooling-off" period that generally limits
activities by officials moving between the private and public sectors.
Nevertheless, government investigators said Deepwater went too far in empowering the Lockheed-Northrop
consortium to award business to subsidiaries, self-certify the planes and ships it produced, and disregard
Coast Guard experts.
© 2007 The Washington Post Company

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EXHIBIT 13
EXHIBIT 14
Page 1
6 of 6 DOCUMENTS
Associated Press Financial Wire
April 27, 2005 Wednesday 3:43 PM GMT
Exelon Names Tom Ridge to Board

SECTION: BUSINESS NEWS
LENGTH: 119 words
DATELINE: CHICAGO
Exelon Corp., the public utility holding company that operates Commonwealth
Edison Co., on Wednesday named former Secretary of Homeland Security Tom Ridge
and W.K. Kellogg Foundation President and Chief Executive William C. Richardson
to its board.
Ridge, a former Pennsylvania governor, will join the board on May 2.

Richardson, formerly president of John Hopkins University, became a member on
March 1 and participated in his first board meeting on Monday, the company said.
Exelon said Richardson is also a board member at Kellogg Co., CSX Corp. and
Bank of New York, and serves on the latter two companies' audit committees.
Shares of Exelon rose 26 cents to $47.26 in morning trading on the New York
Stock Exchange.
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Newswire
Copyright 2005 Associated Press

All Rights Reserved
Exelon Corporation - Investor Relations - Board of Directors http://phx.corporate-ir.net/phoenix.zhtml?c=124298&p=irol-govBio&ID...
Home Page > Investor Relations > Corporate Governance > Board of Directors
Investor Overview
Stock Information
Exelon Corporation - Investor
News, Events & Relations - Board of Directors
Presentations
Corporate Thomas J. Ridge

Governance Independent Director
Member of the Energy Delivery Oversight Committee

Board of Directors
Governor Ridge has been a director of Exelon since May 2, 2005. He is

Governance
President, Ridge Global LLC. He was the Secretary of the United States
Principles
Department of Homeland Security from January 2003 through January
2005, and the Assistant to the President for Homeland Security (an
Executive Office created by President Bush) from October 2001 through
Board Committees
December 2002. He served as Governor of the Commonwealth of
Pennsylvania from 1994 through October 2001. He is also a director of the
Code of Business Hershey Company and Vonage Holdings Corp and PECO Energy Company,
Conduct an Exelon subsidiary.
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1 of 1 1/8/2009 12:05 PM
EXHIBIT 15
EXHIBIT 16
Vonage http://www.vonage.com/corporate/index.php?lid=footer_corporate&refer...
About Us
Company Fact Sheet
Vonage is a leading provider of digital phone services with 2.6
million subscriber lines. Our award-winning technology enables Learn some fast facts about Vonage.
anyone to make and receive phone calls with a touch tone
telephone almost anywhere a broadband Internet connection is view
available. We offer feature-rich and cost effective communication
services that offer users an experience similar to traditional
Vonage Timeline
telephone services. Vonage's service is sold on the web and
through national retailers including Best Buy, Circuit City,
We take pride in our history and accomplishments. This
WalMart and Target and is available to customers in the U.S.,
Canada and the United Kingdom. Our Residential Premium is the Vonage story.
Unlimited and Small Business Unlimited calling plans offer view
consumers unlimited local and long distance calling, and popular
features like call waiting, call forwarding and voicemail - for one
low, flat monthly rate.
© 2001 - 2009 Vonage Holdings Corp., All Rights Reserved.

Legal
1 of 1 1/5/2009 8:12 PM
Vonage | Corporate Governance | Board of Directors http://www.vonage.com/corporate/corp_bod.php
Board of Directors
Jeffrey A. Citron Marc P. Lefar

Chairman, Director Chief Executive Officer,
Director
Peter Barris Morton David

Director Director
Michael Krupka J. Sanford (Sandy)

Director Miller
Director
Jeff Misner Tom Ridge

Director Director
Governor Thomas J. Ridge joined our board of

directors in August 2005. From January 2003 to
January 2005, Governor Ridge served as the
Secretary of the United States Department of
Homeland Security. From 2001 through 2002,
Governor Ridge served as the Special Assistant to
the President for Homeland Security, an Executive
Office created by President Bush in October 2001.
Governor Ridge served as Governor of the
Commonwealth of Pennsylvania for two terms from
1995 through 2001 and was a member of the U.S.
House of Representatives from 1983 through 1995.
Governor Ridge currently serves on the boards of
directors of The Home Depot, Inc. and Exelon
Corporation.
1 of 2 11/10/2008 2:23 PM
Vonage | Corporate Governance | Board of Directors http://www.vonage.com/corporate/corp_bod.php
John J. Roberts
Director
© 2001 - 2008 Vonage Holdings Corp., All Rights Reserved.

Legal
2 of 2 11/10/2008 2:23 PM
EXHIBIT 17
Your Search Results
You searched for:

Client Name: vonage Government Entity Contacted: Homeland Security, Dept of (DHS)
Disclosure Home
1 of 1 1/5/2009 8:14 PM
EXHIBIT 18
Page 1
21 of 150 DOCUMENTS
FD (Fair Disclosure) Wire
November 11, 2005 Friday
Lucent Technologies Financial Analyst Conference -

Final
LENGTH: 38122 words
JOHN DEBONO, VP, INVESTOR RELATIONS, LUCENT TECHNOLOGIES: Good morning. My

name is John DeBono, Vice President, Investor Relations, and we want to welcome
you all this morning to Lucent Technologies 2005 Financial Analysts Conference.
We're glad you're here with us whether you have joined us here in person or
on our live Web Cast. As you can see from the agenda we are beginning four
presentations today that will help you better understand how Lucent strategic
choices are paying off and positioning us well for 2006 and beyond.
In order to have sufficient time to answer your questions, we have scheduled

Q&A sessions after Cindy Christy, John Meyer and Frank D Amelio presentations.
As well, Pat Russo will come back at the end of the meeting to wrap up and take
your questions.
Now one small favor I'll ask of you is to please turn your cell phones to
vibrate mode so that we can avoid distractions during the meeting. We've also
scheduled a breakout around 10:15 in the lobby where breakfast was held.
Now in your binders you have copies of today's presentations as well as bios
for each of the speakers. For those of you on the Web cast a PDF version of the
presentations will be posted to our Web site at the conclusion of the
conference. Now in addition to today's presenters we also have with us other
members of the Lucent executive team from the corporate product and services
portfolio and our corporate functions. Now also in the binders is a feedback
form. You really can't miss it. It's right inside the cover which we need you to
complete and will really help us plan future meetings. You can drop them off on
the table right outside the theater as you leave.
Now today for those of you on the Web Cast a short feedback form will pop-up
as you exit the Web Cast. To ensure access to this form please hold the control
key as you exit the Web Cast to disable any popup blocking (inaudible). Before I
ask Pat to kick off the meeting let me remind you that today's presentations and
the comments made today include forward-looking statements that are expectations
for our future performance. Actual results could differ materially from those
suggested by our comments today. Official information about factors that could
affect future results are address in our SEC filings including our Forms 10-K,
10-Q and N-8F.
And with that I'd like to introduce Pat Russo, Chairman and CEO of Lucent
Technologies to kick our meeting off.
Page 2
Lucent Technologies Financial Analyst Conference - Final FD (Fair Disclosure)
Wire November 11, 2005 Friday
PAT RUSSO, CHAIRMAN AND CEO, LUCENT TECHNOLOGIES: Thanks John and good
morning everyone. Let me welcome you all and thank you for taking the time to be
with us this morning. We're going to spend some time talking about how we see
the industry evolving and I would tell you that from my perspective there really
is a significant transformation taking place whether we look at it from a
technology standpoint, from an ecosystems standpoint, from a - what are the new
services that are cost effective standpoint and even from a new business model
standpoint. So this is an industry that is going through some dramatic change.
Last year, we spent some time with you talking about our vision and hopefully
you will hear us talk about how we're executing on that vision.
I used this chart last year and let me just recap what I said at the time. We
talked about the fact that we believed that our markets and the industry would
grow and that, in fact, has been the case. We said that we saw some areas within
the industry that were growing more rapidly than others and we have obviously
seen that happen and we'll talk about those through the morning.
We described for you that we believed we have a unique vision of next

generation network in the role that IMS could play or we talked to you about our
commitment to that, the strategic relevance of that. We will talk more about
that today and obviously we've made a number of announcements and so we've
established ourselves as a clear leader in this space and we talked about our
portfolio and how it loaded itself QR&S all next generation architectures and
we've through the course of 2005 the customer proof point with respect to some
of the announcements that we've made.
So this is what we said last year and the real point if that whether we've
shared with you we believe its all true. We just completed our fiscal 2005,
couple of points to recap. The progress that we made. First of all we had a very
solid year in fiscal '05. We grew 4.4%. That's about $400 million. That was
despite a 300 million decline in our latest fee switching area - both service
switching and PHS. We had a very strong gross margin performance of 44% which
was two points better than the previous year and we reported a net income of
$1.19 billion or $0.24 a share. That was $0.15 a share if you netted significant
items.
At the same time in 2005 we made a number of significant changes that we have
been executing and are in the process of executing. All aimed at helping to
improve our cost structure and our efficiency. As well as our ability to better
serve our customers and improve our time to market.
Cindy will talk about the formation of NSG. More specifically, when she gets
up but the real message there was the changes that we made were really driven by
what we see happening in the markets and the importance of converged services
and convergence as a primary driver, in addition to the opportunity that we saw
to drive greater R&D efficiency.
Things like more standard platforms, more leverage with respect to global
engineering standards as well as the opportunity to improve our time to market.
Cindy will talk more about that.
We brought Jeong Kim back to head the laboratories. Jeong as you know is
someone who has a unique combination of tremendous technical depth as well as a
real entrepreneurial track record for commercializing technologies successfully
into the market. Jeong has made some significant change with respect to the
Page 3
model that we currently have in Bell Labs and he is very focused on accelerating
the commercialization of some innovative technologies that we have been working
in research.
I would add, we haven't talked about this much, but in addition to Jeong's
focus on accelerating commercialization of new technology, we have been
investing as you know in scenarios that we think will pay off over the longer
term. Nanotechnology, being one of them. At the same time we have been
increasing our investments, if you will in our patent portfolio. And in fact
this past year we have filed, we have increased our rate of patent filing that's
important not only from a support for intellectual property business. But it's
important for us to be able to create a competitive advantage in the
marketplace. So lots of change going on in the laboratories.
We've consolidated our EMS. Those are our outsourced manufacturing

partnerships. That is with an eye towards simplification and improving our cost
structure. We have talked with you about that. And we expect that will continue
to help us with respect to cost containment, margin and margin improvement.
And we talked about the work we have underway. And this is simplification
that spans a number of parallel initiatives inside the company that are all
aimed at continuing to improve our efficiency and our productivity. For example,
we've identified in our IT arena an opportunity for some significant savings
that we believe we will achieve over the coming 12 to 18 months as we drive more
standardization under SEC.
And the last point I would make is the change and the strategy and the
operating model for us around network operation software. We had married that to
our services business. We are finding that there is a great connection between
what's going on in the LSS side and the opportunity for integration services,
and talking services. And so we've made a change there. That will drive more
efficiency in that business and as well, we believe will create some upside,
upside opportunity.
So in addition to the financial performance, lots of things underway. Again

aimed at improving our time to market, customer response and simplifying the
business and therefore producing improved cost structure and better efficiency.
We have been working, as you know on diversifying our customer base. We

announced more than 87 customer awareness in 28 countries and they're
represented here. The real point is that this really represents a geographic, we
think a good geographic mix. And the value of the contracts that we announced
over the course of the year were about 2.5 billion.
We talked with you before about the strategic bids that we've been making in
the company. And I think in fact I've been talking about this for the last
couple of years. But the real message on the right hand side of this chart,
you'll see, these are the outside analyst estimates for the compounding growth
rate in the segments of the market over the coming years. And as you can see the
point here is there are a number of segments that are growing faster than the
overall market. If you look at the area of strategic choices that we've been
focused on, as a company we've trying to align the investments we're making in
the areas of priority for us, with the way we think the money is going to be
sent. Right?
And so as you can see, we've been very focused on leveraging our Sprint
Page 4
spectrum capability and our Sprint spectrum leadership. For leadership in 3G

we've been emphasizing and the data element with respect to optical
predominantly Ethernet, over optical and then natural area in particular. In
broadband access, we've been focused at the higher end, higher value aspect of
broadband access with a particular eye towards new services like IPTV.
In the services arena, we've focused our energies on the professional multi
vendor and managed services area. John will talk more about that. We've been
very committed to investment in the overall IMS architecture and the critical
elements of that portfolio. And over the course of the morning, hopefully you'll
get a better appreciation from our perspective as to why we think that's
strategically relevant. And how its tentacles play into so many of these, of the
other areas that we've noted here.
And as well we've been investing and you'll see us do more in the
applications space. Because if you think about next generation services, it's
really all about application.
We take a minute and just try to link the growth in the market, the
opportunity we see for these, in these growing areas to what's really driving
it, right? And if you start with the end user what this chart depicts is what do
we see end-users really want.
Because in the end it's what do they want and what are they willing to pay
for that translate into service and revenue opportunities for our customers. And
from all the work we've done, from all the interaction we have with our
customers including our own primary research, this chart really depicts what is
it that end users are looking for. You know they're looking for personal
utility. They're looking for improved productivity. They're looking for an
ability to blend in a much more efficient way that communications need, in a way
that's personal, affordable, secure and convenient.
And at the same time we've done a fair amount of work trying to understand
the segments of the market and what the willingness to pay is. And that varies.
And we do that work. We do it for ourselves. We share it with our customers as a
way to help us understand where we are to be making investments with respect to
network enabling capabilities.
So for example, you have a segment we call the Home Manager. You know that's
typically the experienced family mom who uses her cell phone for a basic
communication, convenience. And the willingness to pay there is well over if you
will than sort of the, what we call the single use. You know who plays a high
value on spontaneous communication. They want games. They want time content.
They want it to be spontaneous. And their willingness to pay probably 5 times
per month what the family mom is.
The point here is, these are what we believe are really driving the needs and
the wants of end users. And we believe we have an appreciation for what some of
the willingness to pay. And we validate that with our customers obviously. A
number of the services, a number of new devices obviously are available today.
You all know that. You are users of them. But we are seeing as these, as the
technology enables these new services, as the devices support them, obviously
we're seeing a deployment of new services. And we're seeing their effect with
respect to our customers' business in the market.
Verizon's third quarter '05 wireless data revenues increased a 103% from the
Page 5
third quarter of '04 to about 613 million. In June, Telefonica announced that
Telefonica had added its 40th IPTV subscriber to its broadband service in Spain.
That number has since grown to a 100,000. We obviously support that. Qwest
recently launched 3 billion voice over IP minutes per month across its backhaul.
And so you can see the effect that these new capabilities, new services have.
And so the opportunities are real.
A further point however is that as we look out we see that there is still
tremendous amount of opportunity ahead. And this chart really just takes a few
facts to try to illustrate what the projections are in certain areas.
So for example, in North America alone, and this is really about subscriber
growth. But we're interested in mobility subscribers, right? It's IPTV
subscribers and other subscribers of new services. In North America alone
industry analysts expect that residential and small office, home office
subscriber growth for something, for hosted voice over IP services will increase
six-fold between 2005 and 2009.
If you look at the estimates for 3G subscriber growth. This is 3G. The
expectation is that subscribers will jump from about 83 million today to almost
750 million by 2009. And if you look in the worldwide telco TV space there's an
expectation that there will be 10 times more subscribers that will sign up over
that same period. And I would just comment that that's actually new dollars into
the telecom industry.
So the real message here is that there is a lot of opportunity ahead with
demand for new services, the types of services we described that are going to
drive the demand for subscriber growth and capacity growth in networks. We think
that's good news because we believe that the choices that we have been making as
a company and our focus on IMS which we believe is the ultimate enabler, will in
fact condition us well to take advantage of this growth in the market.
Couple of comments and Cindy will go into this in more detail. But if you,
what I wanted to try to do is just link, well connect a few dots if you will,
between how we see the customer landscape and the role that IMS can play as
these next generation networks evolve.
And if you look at what's happening in the industry, I mentioned when I

started that you know there is tremendous transformation taking place. And what
this is really trying to very simply depict is the blurring that is occurring
between the telecom industry, the media industry and the IT or Internet related
industry.
And so those boundaries are getting very blurred. The bottom line though is
that users really don't care where a service comes from. What they care about is
getting what they want in a secure and reliable way. And each of these industry
segments, if you will bring something to that party.
And so for example on the more traditional telecom side, it's really been all
about quality of service, security and end-user experience. And obviously from
Web services, Web enabled services, that's the media companies with content,
these things are all coming together to create an end-user experience that we
believe is going to be a driver for new services, new revenue and obviously
supporting growth in the industry.
Page 6
What an IMS architecture does is it really enables that end-user experience.

And Cindy will talk more about that. But for us as we look at the strategic
relevance of what is happening in the industry, what has to be provided to the
end-user to truly create a valuable compelling experience. IMS is really the
ultimate enabler we believe. And has much more far reaching tentacles than just
looking at certain elements of that architecture. And as I said, Cindy will talk
more about that.
Looking at it from another dimension if you think about, from our customer
standpoint in that environment I just described what are they focused on.
Obviously they're focused on driving revenue and eliminating churn. In
particular they want to make sure that their relationship with the customer
maintains a level of stickiness that preserves the value in that relationship
with their operation as opposed to having that value move to another provider.
And so if you look at the role that IMS can play, there is no question that
the ability to generate blended services, which are very different from bundled
services. And new value creating services -- IMS plays a very important role
there. In fact, from a time to market standpoint some of the modeling that we
have done with the customer around the value of IMS suggests that time to market
can improve by 20% in just 1 year by utilizing an IMS architecture.
At the same time -- and I just talked about that time to market there. In
terms of revenue, when we go back up because I skipped over this. But if you
look at just possibilities for average revenue per user when you look at some of
the willingness to pay. Like in some cases, IMS can lead to an increased ARPU of
$40 to $70 a month based on some of the -- data that we have. So there's revenue
growth potential, time to market improvement and all of those things will help
to reduce churn.
At the same time, there's opportunities to OpEx saving. And again, in the
same modeling work that we've done, and again with the customer in a real
environment as much as 20 to 25% of their operating expense can in fact be
reduced over time.
So this is just attempting to map some of the value and benefits of what an
IMS architecture can provide to what are very real needs, and areas of priority
for our customers, OK?
This is a framework I just like to use to talk with you a little bit about
the punctuation points that both Cindy and John, I think will elaborate upon. So
talked a little bit about what we see happening in the market, talked a little
bit about what's driving demand, talked a little bit about how IMS and in fact,
address of the opportunities and the challenges that our customers feel.
You see here again a depiction of the steps we've been making. And what I
really want to do is give you a little bit of sense of how we think they're
starting to pay off. And then take this forward before I wrap up and turn it
over to Cindy.
Obviously we've been betting on 3G. We've maintained in fact enhanced a bit
our global leadership with respect to CDMA, if you will. We now have 16
commercial EV-DO customers obviously including Verizon Wireless and Sprint. But
we also have conducted, or in the process of conducting a number of additional
EV-DO trials. And so we continue to see that as an opportunity to support growth
in that arena. In UMTS as you know we announced Cingular and O2. We've announced
Page 7
trial with eAccess in Japan. We are very pleased with the progress that we've
made in demonstrating our capabilities to execute in those environments. And so
we continue to be very focused there, continue to drive from leadership,
technologically with respect to HSCPA. And as you know both customers we
announced Cingular and O2 have deployed HSDPA technology.
In the optical and data convergence space, our next generation platforms have
we think give us a good position to expand and grow. In broadband access, we
support IPTV on the Stinger platform. And that's paying dividends. We're finding
environments where we are an incumbent, maybe not the sole incumbent, but as
video becomes more important our customers are coming to us because of our video
capability. That's been very positive.
Telefonica we talked about, that they're using our Stinger platform to serve
the subscribers we have. And actually it's before the time. We think it
represents the largest IPTV subscriber base today that's actually deployed.
In services, we have done an awful lot to position ourselves to be the

network integrator choice. And we shared with you as we concluded our year that
the services' revenue increased if you exclude deployment, our services revenue
increased in 2005 about 20%.
LWS, the Listed Worldwide Services business had signed $1 billion in

announced and unannounced managed services agreements in the last 24 months. And
we are now providing managed services for 40 service providers and enterprise
customers around the world. So we feel very good about the traction that we're
getting with our strategic focus there and the practices that we are managing.
From an IMS standpoint, we think we've clearly established ourselves as a

leader both in terms of thought leadership and now in terms of contracts. We've
announced contracts with 7 customers for our IMS offerings. We think that's more
than others announced in the industry. We have 43 ongoing trials for IMS network
elements with 13 different customers around the world.
In the applications space, we have strong position in -- we have 57 million

subscribers worldwide. With our AnyPath messaging solutions. We have over 45
million subscribers with our SurePay solution, this is an area of focus for us.
And we intend to be doing more here as we see the business scenario where
there's real value in next generation services.
As we look ahead, what do we see going forward in terms of '06 and beyond?
From our perspective, we continue to see that subscriber growth and converged
services enabled by IMS will continue to drive traffic on 3G mobile networks. So
it's not just about adding subscribers. But as blended lifestyle services, more
video content, more accessibility, higher bandwidth with all drive, not just
added subscribers but more use on those network.
And we believe that we will see as we move through '06 and '07, a migration
to the technologies where they EVDO, RevA, HSCPA, UMTS and then HSUPA. We are,
we were the first in the industry to demonstrate live over the air RevA calls
with Verizon Wireless. And as I mentioned before, we're deploying the world's
first and second UMTS HSDPA network for Cingular and O2. So we think we're well
positioned to take advantage of that opportunity.
In the optical and data area, we see continued emphasis and support for
Ethernet. We think that's a significant demand driver, if you will. And so in a
Page 8
more traditional business for us we think we're going to see an increased use of
optical systems instead of ATMs and things like wireless backhaul. Our great
advanced applications drive more bandwidth and more traffic.
In broadband access, we believe that IPTV rollouts will accelerate worldwide.

And the operators will deploy those technologies that -- as you've already seen
the partnering with content providers. And then when you add IMS to the mix, we
think service providers are going to be focused over time on delivering what we
call a Grand Slam of fixed and mobile voice data and video services that really
can redefine the way we access entertainment, information and communicate
simultaneously.
In services, we're seeing increased demands for things like hosted services,
more managed services. There is clearly a increased level of willingness to have
others do for the operators what they have traditionally done for themselves.
John will talk more about that.
And so the interest in our hosted services, we announced the hosted

application center. As you think about the operator's objective it's how do I
get to market faster? How do I minimize my investments? Well hosted application
approach or a hosted model enables rapid time to market and operation quite
frankly on a transaction basis if they choose to. And John will talk more about
that.
In the IMS area, we think as we said earlier that we'll see a ramp starting
in 2006. But we think the real year for turnover here is starting in 2007. For
us, and Cindy will elaborate on this, and I've alluded to and talked about the
strategic importance of this -- we really do believe that if in fact you are the
IMS partner, you are in the heart and the brain of the customer's network. You
are in his architectural control point that is very important for enabling
across all of these areas that we talked about in some way, shape or form. And
so it has been strategically critical for us. We believe it is not only an
ultimate enabler of services for our customers. But we believe it's an ultimate
enabler of our portfolio across the breadth of what we do into our customers'
network.
And so it is just about the core investments in call control and subscriber
databases and those elements to the portfolio, it is about that. It is also
about feature servers and IMS application. And that's a fairly large space. It
is also about the consulting services and integration services, the connection
services that link various applications one to the other or product one to the
other. And it is also about what I call a bucket of associated opportunities
that you get because you're there. And you don't get when you're not there.
Because when you sit in the heart of your customers' network, you are party
to all of the conversations about how do I connect this service, with this new
thing I want to do into this network. And when you're at the table I regard you,
you have a lot better shot at participating in the next opportunity to come than
you do if you're not at the table. That's why it has been so important for us to
be at the table. That's why we are so pleased with the announcement that we've
been able to make with very large players. And that is why we intend to do that
all around the world so that we are strategically in place with the guys who
have the big bucks if you will. Because we think this is the architecture for
the coming 10 years or more. Who knows? I mean, in our industry the cycle is a
fairly long cycle.
Page 9
And then lastly, applications. This is a space where we see tremendous

opportunity. We are a player today. We intend to be more of a player. We may do
that organically. We may do that inorganically.
But certainly if you look at next generation networks, if you look at

converged services, if you look at the end-user experience it is a lot about
what is the application. And obviously how do you enable that application
technologically? How do you provide quality of service? How do assure the
end-user experience? But the application space is critically important for us.
We've been investing. We will continue to invest because we see it as not

only a very large space, but we see its one that's going to grow rapidly.
OK. Let me wrap up. And I will turn it over to Cindy. A couple of points in
terms of key takeaways. We believe that strategic choices that we have been
making over the last couple of years are starting to pay off. I've tried to
portray at a relatively high level some of the proof points in that regard.
The changes that we've made, we believe are having and will have a going
forward positive impact on our business. We intend to continue the progress we
made in '05 as we move through '06. And lastly, we think of IMS and we hope you
think of IMS as a real game changer in the industry. We think it's a game
changer for, and some of you have actually called it a game changer. But we
think it's a game changer. Because we think it is, it is about what the next
generation of networks will be about for the coming many years. And the days of
request by switch et cetera are really long gone. We've already absorbed most of
that. And we're really looking forward for leveraging the choices we have made,
the positions we've had, the capabilities we've had to really drive our growth.
Thanks. With that I'll turn it over to Cindy.
Cindy?
CINDY CHRISTY, PRESIDENT, NETWORK SOLUTIONS GROUP, LUCENT TECHNOLOGIES: Good

morning to all of you and welcome again. My name is Cindy Christy. And I head up
the Network Solutions Group for Lucent Technologies. I want to thank you all for
coming and let you know that I look forward to sharing with you our progress
this year.
Last year I set up for the group what our vision was for IMS. Janet Davidson
has been talked about our products and the portfolio and how we're going to
administer it. And then John Meyer talked about the services that surround. And
this year, I'll be talking about our execution towards that vision.
Before I make my formal comments though, John DeBono mentioned in your

feedback forms in your binder. As you can see I want to thank those of you from
last year who indicated that the room is way too hot during the presentation.
And we think we've caught your feedback very seriously. So make sure that you
follow that form this year.
Not cold in here? OK.
All right. I want to get started first with -- let me give you an update. We
really are the Network Solutions Group. Because I think it's a very pivotal move
we made in the middle of the year. And there were a couple key things about
executing in terms of doing what we said we're going to do. And that's very
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important to us as we move forward in terms of our division.
First of all, we did the move on the Network Solutions Group due to a couple
of key elements. One was the want of drivers. What were we saying in our
customer bases in terms of services and technology, the end-user in terms of
convergence and what did that mean in terms of our portfolio.
Secondly, we really wanted to improve our profitability and our

competitiveness. And thirdly we really want to drive a better service for our
customers. And Pat alluded some of those areas.
In terms of an update, there's really 4 elements I want to key in on this

slide so you know where we are, the progress we're making and how we want the
team to move forward in terms of again, doing what we said we're going to do.
You have to understand that when we brought these 2 groups together once the
number 1 priority I had above and beyond anything else we had was, how do we
integrate 2 large product units and without impacting any of our customer
commitments.
And I have to tell you whether we saw the proof points in terms of our UMTS
deliveries and HSDPA where we were the first vendor who has validated our IMS
trials, the execution of those, the commercial contracts, our EV-DO roll out or
our migration or our optical technologies, the fact of the matter is that we did
not that any single (inaudible) crack as we made this transition.
The second part it was we really wanted to enable a operating synergy. And as
you can see from the first bullet in our charts we have a lot of work to do.
Now I think it's important to understand though first that as we went into
this we already had integrated on a common core the softer portfolios. Janet and
I had already been some workings together in terms of how do we drive common
core across the group that we can leverage across the portfolio. We also had a
common applications group that was driving wireless and wireline applications.
What we saw the opportunity was how do we drive best best-in-class

prophecies? How do we integrate those across? What do we do in terms of our
quality metrics? What's the discipline and the governance structure around the
business that will put it in terms of the best-in-class competitive rates?
But also something that we can consider achieving through quality,

reliability, driving innovation while reducing our cost. What was about our
current cost structure in terms of hardware and software? What was it about our
current supply chain initiatives? And what we drove was a functional alignment,
the ability to leverage our resources, both hardware and software most
efficiently, as well as an integrating function that had not improved the
integrated. We now have 1 V&T organization. We have 1 CTO organization across
the group. We have 1 strategy and planning organization across the group. And we
also do offer management and we do different elements of the portfolio together
so that we not only drive the benefits of the individual vertical business but
also for value, add value across the entirely support portfolio in addition to
what we do with John Meyer services to deliver the end-to-end experience for our
customers.
What this did was as we now have a common hardware platform management. It's
important not just for a near term but also for evolution to APCA and for the
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long-term evolution of our platform as both our partnerships.
So all 4 elements are not common across where we can. And also I'm going to
talk in a minute about our element management system. That I believe that we're
implementing where the industry leading element needs this system across our
portfolio and our partner's portfolio over the next 18 months that I think will
help us in terms of operational efficiency as well.
Also the third area I really wanted to focus on in terms of keys, was how do
we improve the profitability and the competitive situation we're in on the
wireline side. And I would tell you that many of you had asked me several
questions about the wireline business and what do we want to do.
Now one of the key areas that I think you have to understand about the
wireline business is that it's fundamental to be in a converged world. When
you're dealing with the wireline operators you have to have the ability to
answer to what's their investment basis. You have to be able to answer to
mobility and portability. What you can do about video distribution and
applications. So it is very important that we took a look at our current
embedded base on optical and access and data of current partnerships.
And what were we going to do to add value but also tie that to the strengths
in our portfolio or on the IMS core, the wireless portfolio and our services
portfolio. We also knew that in terms of our competitiveness in the wireline
portfolio, we were behind some of our competitors in terms of the sheer numbers
of people that they had on the projects.
How were they going to be competitive and not get out features if you will,
in a situation where we have high volume, where we didn't have much volume as
some of my key competitors in some of the segments?
So what we did was we put an aggressive plan together to drive to the global
engineering centers. Largely, because we wanted to get more people on the
projects so that we can maintain the feature functionality to compete. We also
focused in our what is the largest thing that we wanted to focus on, what areas
were we going to compete in. We wanted to be in the high-end in terms of
broadband access and the IPTV area. We want to leverage our optical and
database. What were we going to do to turn that embedded base?
What do we do in the ATM arena to get more efficient in terms of our

resources and what does our partnership set look like on the back end of that so
that we can drive more competitiveness, more profitability for our business.
We also went to the consolidated platforms. In the access business, we're

going to as you know with our recent LMAP announcement from 2 platforms down to
1. That helps us not only in terms of cost structure. It's got innovation. I
think it's got the best capacity in the industry. And I'll talk to why I think
it's good from the product portfolio standpoint. But from an efficiency
standpoint, sign up on software lines, we have 1 hardware platform. We can drive
an evolution and I think get the most out of the resources that we invest in
that platform.
Optical's going to from one fixed platforms down to 3. But what we're trying
to drive to is a more competitive cost structure but also a more efficiency in
my R&D as well. And that will drive us in terms of the end-to-end solution when
I talk a little bit more about IMS as I go through.
Page 12
And finally we really wanted to improve and leverage the end-to-end

portfolio. And what was so critical about that was we had to do that in order to
deliver differentiating solutions to the customers. On a box-to-box basis, we
wanted to be able to be competitive on price. We wanted to have functionality.
But the true benefit of how I'm going to win competitively is how do I deliver
the value to the end-user and to my customers in terms of solutions where they
can do who's buying and why.
How do I drive the traffic for my customers? How do I help them go their
business miles and their business cases so they can generate profitability? As
you can see in terms of some of our recent announcements and there are 4
elements here that I'm just going to touch on that we deliver end-to-end
solutions across the portfolio. Whether it be IPTV migration. I don't know many
of you know this today, but our LMAP will be the flagship for the access
business going forward. But today we support video access on all of our current
and existing access platforms as well as the optical platforms today, which is
why we're able to deliver a video distribution as we speak.
We've leveraged the HDA installed base by addressing our OpEx and for this
purpose. And we also integrated Ethernet on all of those platforms in order to
allow our customers to roll that embedded base.
We have an end-to-end IPTV IMS solution that brings video, wireless,

wireline, broadband data and it utilizes locational presence to not only deliver
the triple-play by adding mobility to quadruple-play to differentiate.
And finally we're seeing success in our optical and transport solutions by
utilizing optical backhaul in order to drive efficiency. As more and more data
is added to mobile networks and we drive more if you will, converged solutions
where it uses the state any time anywhere communications, data can become more
and more important. And having this broad optical backhaul can be a key element
and we're also taking advantage of the fact that we have a huge embedded base
spectrum around the globe.
OK. Before I go into each of these 4 businesses and talk about how we're
driving differentiation and driving growth, I want to talk first about our
customers. Because I think we have to service our customers first to understand
what's driving them and how we can add value to our customers primarily. And
then I'll talk to you about the businesses.
The fact of the matter is Pat already talked about it, we're putting our
portfolio, our resources, our focus and our investment in the stack and storing
markets across in terms of telecom. But why, why does an end-user take us ? Why
does an end-user take us, and we're investing in those spaces. The fact of the
matter is we, as a technology company have to figure out how do we leverage the
technology so that we can drive the adoption of the services in third generation
and next generation networks and beyond.
The fact of the matter is this time we have to take the end-users with us and
we've got to drive more investment in telecom. And we fundamentally believed the
IMS architecture our portfolio and end-to-end are going to drive, end-users are
going to buy personalized access agnostic solutions and services instead of
network connectivity.
They don't walk into a store and say I'm here to buy IT. What they want to do
is they want to solve their business problems, their personal utility problem. I
Page 13
want to have video distribution. I want to be able to see my children remotely

when I'm out of town in California in a 30-second clip. I'm not out there buying
EV-DO. It enables me. But what I'm buying is the ability for me to see my
children.
The fact of the matter is, is that we've spoken first on the end-user
experience. That's why you hear so much about a simple, seamless personalized,
portable experience because it's a about driving the adoption of the technology.
Again, we have got to drive the adoption, drive the ARPU and make it
efficient for our OpEx or a CapEx perspective. And what we have done here is put
together an architecture and enabled our customers to determine, A, who they
really want to market to, what new system they are going to go after, how do I
use the technology to do that, and that's what IMS provides.
Let me first go down to the bottom end of the chart here, the enabling
platform. Because this is the foundation of which we have our historical
embedded base, but its also fundamental for our customers. When you look at
critical enablers, the transport and access platform, have to deliver the good
in terms of OpEx and CapEx, OK, savings. At the end of the day, they've got to
really be in this position to deliver the cost structure as well as the quality
service.
So, we have to have the lowest cost for bid, we have to have the lowest
latency, performance has got to be there, what's so fundamental in the delta
about where we are going is, the ability to deliver good quality of service to
get it under the way of the technology innovations to actually enable these
services, would any of those want to adopt them, and they want to use them on a
regular basis because its not difficult behind the firewall, you have the same
experience with regards to where you are it can be seen.
We've got to have the ability too to scale this. This is not just about
introducing and having a point-to-point video demonstration today, this is about
to make it scalable, carrier grade and reliable for real time communication. So,
the people put more money into telecom because they are dependent on the mission
critical activities that it provides. Anytime, anywhere communication or are
they going to be enabled, we've got a leverage embedded base which is what we
are doing today and then adding elements to the embedded base in order to evolve
to the next generation platform. And that is key both in terms of the access in
the technology to how we provide that but also to John Meyer and his team, the
deployment, the integration, the optimization of these mission critical elements
will be key in terms of time to deliver for our customers and efficiency.
Now, when you with the customers in addition to OpEx and CapEx, they want to
know 2 other things. What do you do about my ARPU and what are you going to do
to help me to differentiate? Because fundamentally I've got to be in the space
where I can drive the top lines but I want to be different than the other
competitors has right down the street.
Let me start in the middle of this, in IMS Control Plane. We believe the IMS
Control Plane, as Pat's already said, is the heart, is the soul, is the brain --
she calls it the open enabler. And it's the open enabler because it allows the
seamless operations and interactions of multiple applications. It really, truly
allows you to go through voice mail and go to on have multiple voicemail boxes
at home and at work and on your cell phone but only actually have one to the
user. It's really about pointing it quickly and having the ability to get on
Page 14
your Yahoo!, your DSL port and to be able to access your Local Area Network at
the office. It's the ability to really take advantage of what IMS talks about
and Pat's talked about it already, the end-user experience. Its about the
ability to treat the session with control, be able to blend across the different
services that are available out there today but also makes you deliver on the
quality of service and reliability that's expected.
In the application side, as we all see here , you have service delivery
platforms this is how in fact we are going to differentiate. What is about my
business model, who are my customers, am I a more regional play, am I going to
go after the local, am I going to be the best local provider I had because I
understand the region better than anyone else and I'll have the region specific
service, or am I going to be a nationwide provider and therefore I am going to
have different elements in terms of my business plan that I am going to position
out there. Am I going to be in the vertical enterprise frame or am I going to go
to be a horizontal consumer video play.
This platform enables all that and within our application business not only
do we have the enablers, but we also have as we saw in the previous slides that
Pat showed over 1,000 developers who are available to our customers to enable
them to build their own business models of plans.
Now, if we need to loosen the churns of our IMS and our applications and its
bases remember IMS is just an industry standard reference architecture, anybody
can do it, just like anybody can build the circuit switch but nobody built the
5G like we did, OK. We have got to back to our roots in terms of IMS and I
believe in terms of our platform in our portfolio we have the highest quality,
the highest reliability products that we are confident that we would deliver
across that platform. But again still, people can still deliver on that type of
reference architecture. We are using what I call Bell Labs special soft ,
typically being turned over by the technical people as a service layer in
Kansas.
But this, what we are going to do is we are going add software functionality
on top of the reference architecture to allow us to differentiate in end user
experience. Fundamentally, what we want to be able to do is allow Lucent, user
on Lucent service to have better end user experience than anyone else because we
knew that as we had to provide differentiation versus competitors, we had to be
in a position where we not only dealt with the cost and the quality issues, and
the erudition issues and how do we drive revenue for our customers? So we have
to drive differentiation and I'll talk a little bit more about some of these
services in a second.
And then finally, the value added area and services. And this is another area
for growth in terms of delivering blended lifestyle services. Joint traditional
businesses in terms of supporting our business as I said earlier, in terms of
deployment integration are traditionally down in the access and transport. We
have opportunities now in contracts that we have never seen before previously
outside the current or traditional reach.
In addition, to OSF, PSF listing opportunities for the integration because as

IMS is the open integration opportunities or open enabler, there are huge
integration opportunities across how do you actually deliver on the value of IMS
in terms of a personalized user experience that a customer has to deliver and
deal with, again quality of service, reception management, how they are going to
Page 15
actually utilize security and ultimately John has the opportunity across the
entire portfolio to truly drive and add services from the portfolio.
OK, I am going to take 4 slides right now and I am going to talk about the 4
businesses they have and I am going to talk about them in a couple of different
context. Then I am going to give you a lead on each one but I wanted to just
explain from the chart.
I am going to talk about the businesses then I am going to talk about it in 3

dimensions. The first dimension is what I call to delivering of blended
lifestyle services or from your perspective what's the Lucent value, why Lucent,
why would you buy Lucent, what do we do to differentiate?
Now I could go on to a litany of things here that I think are really

differentiating, I tried to highlight these areas and we'll go into -- we can
done some more details. But also then delivering the competitive profitable
growth, show me the money, where is it that you are seeing the money, the
opportunity in terms of the growth and then fundamentally some proof points,
areas that I think that we can demonstrate at least platforms, wins, trials,
things that are benefiting not only the validation of our strategy but also in
terms of what we trying to do drive and grow our business and differentiate.
Full Mobility. Mobility when we start first and foremost, it has an continues
to be the way Lucent spreads around the globe. And we are also driving -- we
have been on the common platform, the Mobility platform for over 3 years now and
that common platform allows us to integrate both CDMA and UMTS on the same
platform but also supplies us a lot of flexibility around its blended areas, or
really need to introduce WiMax potentially into that long term, to tie back into
the IMS service or delivery architecture.
So, it's fundamental that what we are trying to do is extend our strength in
RS in our knowledge of wireless network into other areas but also to continue to
add value. And as we integrate through wireline and wireless, and our wireline
counterparts are looking for how do they use portability, the ability to not
necessarily 3G for Mobility but the ability to move with a portable fashion
which is a demand of the wireline side or (inaudible) in that space to leverage.
So, where is the Lucent value from the Mobility perspective? Again, I think
that as we migrate beyond EV-DO Rev DO and to EV-DO RevA which is just a next
migration as well as HSDPA in enhanced upgrades, we are going to introduce
conversational voice into the equation. Mobile Networks will become voice
enabled. That's important for OpEx because voice is still king, it's driving a
lot of traffic on our customers' network. They're adding subscribers but they're
also adding minutes of use. OK, so they got to drive efficient task capacity in
terms of OpEx but also they are also going to look how this can enable new
services. The introduction of DO as DO RevA as well as HSDPA enhanced upgrades,
we'll make broader pipes, ability deliver more data, more efficiently and
introduce new services.
Our WiMax across our wireline and wireless platform is a part of our aromatic
reduction as well as our wireless platforms itself today are going to be enabled
with WiMax and ultimately IMS and we are going to be able to deliver across in
addition to the core, the mobility management element in terms of -- remember,
on the Mobility side location present is going to be key. And the ability to
deliver those types of services and utilized what spectrum and the ownership
spectrum means in terms of Quadruple Play is going to be fundamental.
Page 16
So, when do we see the opportunity for 2006, we continue to see satellite and
EV-DO uptake in terms of not only our tier 1 markets but also our tier 2
markets. We will introduce EV-DO RevA mid calendar year next year. We are going
to compete, or exceed on our cost production roadmap in terms of how do we
deliver solutions that are more cost effective but also that it might be more
niche oriented. That how do we drive into end a little , what's our solution
there, what are we doing in terms providing flexibility in our portfolio while
everything a common platform OK, for efficiency to deliver on that.
Our IMS leadership in terms of how do we drive the adoption of IMS from a
Mobile perspective? And again use locational presence to do that and increasing
our market share in new spectrum. What happens if the government goes to 700
MHz? Do we continue to drive 450 around the globe? What do we do around 2100?
It's not clear what port these are going to replace , but we also have flexible
bay stations and our ability to deliver across that value will drive
opportunities to go for us.
And as you can see here, and many of you have seen on the key points, but I
think that we had demonstrated a strong year not just in terms of some of our
traditional markets. Many of you know Sprint and Verizon service is a huge part
of our portfolio but also Cingular UMTS and their launch that will be coming in
this quarter as well as EV-DO is being deployed on the broad basis. And I think,
what our tier 2 customers in terms of MetroPCS leads, show that we made
significant progress. These are big and very important customers back to see
them make the portfolio and we can see them drive more international growth in
Mobility.
OK. Let me talk a little bit about multimedia network solution. We aligned
our access, our data and our optical businesses around how customers plan to
evolve their networks today and I talked earlier about the investment. When I
took over the wireline business back in the April timeframe, it was very
important for me especially with 10 years of Mobility experience, to make sure
that I fundamentally understood the drivers in the wireline side of the
business. I had switching experience but I wanted to make sure that I understood
today's environment what was the drivers.
And the question was, what was going to drive investment? Well, my question
was, if you have capital to stay , where would you spend it? OK? We are talking
about, maybe we are talking in the context of portable solutions, video
distribution and I view video distribution rather than just IPTV, because I
think TV is absolutely an element of video distribution. But there is also other
ways you can use video in terms of putting an information in terms to drive more
value on the wireline network as well application. And we are differentiating
winning today in both access and transport by integrating IMS and its broadband
access services such as Internet, VoIP and IPTV into our portfolio.
So, in terms of value and I talked -- again 3dimensions -- where's the

Lucent, why Lucent, show me the money and also the proof points. I believe that
from a differentiating perspective our converged ops on Ethernet infrastructure
allow the customers to involve their SDH SONET and it brings out a better total
cost of ownership as well as a reduced capital investment from our customers.
And also a need for enabling of our WDM or SONET SDH in our fiber-based networks
allows for a greater revenue stream for our customer. And we are doing that as
we speak. And as for areas of our portfolio where we don't have solutions for
partnering with folks right where we are selling to deliver native IP and
Page 17
end-to-end solutions for our customers and we are getting in and we're tying
that to what -- the portfolio we have today.
In addition, in terms of delivering in terms of where we see the growth we

are (inaudible) our embedded base. We have a huge embedded base. We grew it here
in optical as well as in access in terms of revenue. But we are also
accelerating the introduction of some of that more cost effective platforms that
I believe are truly differentiated. Part of our focus around the integration in
the more competitiveness wireline side was how do we accelerated delivery of our
next generation platform. And we did that, as I said earlier by combining our
platforms but also looking at when we get there how do we have the best
capacity, how do we have the most differentiations.
And I think we are going really drive the price tag to enable Ethernet and
Optical. And we, today, on our existing platform unlike our competition are able
to support VoIP or able to support video on the incumbency. And so therefore as
we deliver our platform in 2006 we'll be able to evolve our embedded base.
Again, the key here is end-to-end video, end-to-end Ethernet and also this
tied to the other businesses such as the Mobility backhaul is going to be key.
And again in terms of our LMAP -- and I apologize at the typo, this should be
the IMS-enabled NGN LMAP. This platform is going to support DSL, VoIP, POND, all
the same shelf, and it's going to be able to integrate IMS functions all the way
from the core to the end. And I believe its capacity is very dense that will
allow us to truly be able to differentiate in this space.
And just in terms of some proof points, Pat's already mentioned a 100,000
live IPTV subscribers, and the latency to add more every week. Bell Canada and
their FTTN access and broadband services in rolling out DSL for the Triple Play.
We also have T-Online and Sprint going after the Triple Play.
And in COLT, where we didn't have an embedded base we actually were able to
introduce an Ethernet that was complimentary to the installed embedded based.
This is not us about coming in and IMS and some of our different elements of
portfolio just swapping out. It's about how do we enable the legacy that you
have today and help you to start taking the first step towards the next
generation because this is a decade June in terms of IMS and the next generation
platforms.
OK, let me talk little about converged solutions. And again this review was
in here. This is our next-generation IMS platform, this will all go back to 5e .
Customers today have very different business models and growth strategies across
the board. As Pat said they are going through a transformation within how they
are looking at the business but they're also having to get more disciplined
about who's buying and why, how do I compete, who do I partner with today, who
becomes my enablers today, who do I potentially be in conflict with tomorrow?
But at the end of the day there really are 2 fundamental questions: how do I
drive traffic, OK, and then how do I add value? And we really believe that IP
and IMS can bring high-value bids. Not all bids were created equal, but
high-value bids by allowing service providers to deploy blended lifestyle
services. Yes, they did business because they have SMS, and, yes, they get
traffic because they have, again, video services but again if you remember, and
I use this as an example a lot of times in mobility. SMS, a lot of times,
becomes a voice substitute. And I know many of you who know me are thinking
about my children. But here is the bottom line, OK. If I'm going to sit here in
Page 18
the meeting and send a text message, I'm not going to pick up the phone and call
up my daughter, OK. I'm just not going to do it, because it's a substitute.
There is no incremental dollars going into the service provider.
But if in fact I'm able to get -- instead of getting SMS I go back to my room
and I get a video clip of my 4 kids eating breakfast saying, "Hey, we are good.
Sad you couldn't be with us today." And I spend $10 a month -- I pay and that's
worth 4.99 for me, that 5 bucks they didn't have, before. But I can easily text
and not call them. And it's likely when I see a video clip, I'll pick up the
phone, and say, "Hey, that was pretty funny" which is just go along.
I mean so, again, what we are trying to explain is that, our market research,
our primary market research -- this is not just something we thought, hey, this
is a good idea. We have done primary market research that indicates that people
who actually see more personal utility, more productivity whether you are in
consumer space or the enterprise space driving that see more value, they're
actually going to generate more traffic. And that's what Yahoo! and the folks in
Google are trying to do as well. So we enabled that as well as, frankly in
addition to services and the forum we can provide to our customers, we can
deliver the end-user experience, the security, the quality of service that the
people have known the telecom industry to deliver.
Lets talk little bit about blending lifestyle services and converged core
because I think this is going to be key. This is one area where I believe that
we differentiate relative to how do we add value. This software that we are
putting in on top of our reference architecture, again when we went out and
talked about mobile high-speed data, we talked about how do we deliver the value
in video in different areas.
If we can typically deliver on the bit speeds and the value proposition, the
question is how do you try the end-user adoption? It's got to be simple, it
can't be so complex someone can't understand it. It's got to be something that's
secure so that we can identify the adoption.
So, it was important that we looked at not in at least in terms of how do you
feel it will effect the resource management, how do your blend the sessions
across. We actually sometimes just deliver against the medium gateways and
controllers and leverage other people's software that are out there and put our
special control manager on top of that element in order to leverage the existing
embedded base to deliver the solution.
So, again it's very important that you know that we are able to not only
deliver on the value in terms of the end-user experience that makes it better
but also we deliver on end-to-end solution. So, when we go down to deliver for
example our announced SBC contracts on IMS, we deliver a pre-integrated
end-to-end consumer voice solution to them. OK, they don't have to come in and
have someone else integrated between myself and my R&D team, John Meyer's
services team, you hit the door you are ready to go. It's not just about
bringing in an individual element, it's a complete end-to-end solution that
includes access, transport, IMS 4, layer 2, layer 3. Doesn't have (inaudible) if
we lose the content, but we deliver the solution and I think that's a key
differentiator.
In terms of showing where the money is, I think that you have seen we have 7
commercial customers, we have 43 other trials, we have I mean I'll talk in a
about how IMS really drives this further the value chain but ultimately we are
Page 19
going to leverage that a fine contract. We have a huge embedded base in terms of
our existing embedded base. We are tying that to other elements or platform like
our IP lines and the Access lines and you can see -- and you've heard a lot
about these areas where we are seeing the benefits of all different elements.
And not all of these elements are the same. In certain areas, we're selling
accessory control managers, some areas we're trying to mediate gateway, some
areas we are trying our application on MiLife portfolio, but in the end we still
deliver the solutions.
OK, let me talk little about application, because I think helping customers
differentiate is all about the services, all right. And you got to deliver on
the blended lifestyle services. Why? Well, yes, so I'll expect it to drive
traffic capacity but new services create a stickiness, and we talk a lot about
stickiness, but as the subscriber penetration starts to level off in Mobility in
the next 5 years or so, we're going to see a real question of do you add the
value, how do you reduce the churn and how do you drive more ARPU in that same
space. And the key there is, its not just voice anymore guys, it's about
commerce, it's about gaming, it's about video on demand, its about
entertainment, content, OK, we got to have content.
And I think that we deliver in terms of enabling through not only our
platforms but also some of the market advantage programs. We fully transitioned
this company in terms of not just delivering what you would expect, highly
reliable quality services, doing what we say we're going to do in terms of
execution, innovation through Jeong Kim and the Bell Laboratories, but we've
also delivered on who's buying and what. How do we drive it? How do we help to
generate for users, which enterprises are you already embedded in today? How do
you drive more use into that? How do we drive for new enterprises? What do we do
to help to generate more market advantage in terms of delivering on the value
for the users. As well as the same time, we also help them, in terms of client
solutions. So between myself and John we can customize, we can make it, from an
applications perspective, so that they can deliver quick and rapid solutions
through our applications portfolio.
And you can see down here we've got several of our platforms and execution on
both sides to drive this -- this industry leading unified subscribers data
services -- the unified subscribers server which is our oldest DHLR. I think
it's a key differentiator for us, for data generation and our ability for us to
deliver against integrating multiple user databases. Our MiLife platform and our
SurePay platform, our very key EISA, our penetration. And again, I think we are
executing on a growth strategy here to deliver on the blended lifestyle services
as opposed to the portfolio.
OK, I'm going to put a quick transition to a couple of slides. And these
slides are about IMS. And the reason why they are so key, is that in terms of
executing on our vision, it's very important that I describe why IMS is so
essential to this vision. OK. Because it's a true end-to-end portfolio, and I
have 3 dimensions in terms of this chart.
This left hand side here is what I'm going to call the opportunity. This up
here I'm going to call the network in terms of end-to-end solutions, and then
I'm going to talk about this in terms of the customer. All right, so let me
first start with the opportunities.
When you are the control service delivery architect for your customers'
Page 20
networks, you become pivotal to every single decision they make end-to-end. How
they deliver it, how the end-users experience that happens. OK. You can see in
terms of different elements, IMS not only delivers in terms of blended lifestyle
services. But how does it do that? IMS transports and control, just don't -- you
can take a look at this in terms of how do you deliver the circuit control
managers and how do you deliver the service. VoIP in this voice market is very
big. There's a little bit off overlap between this voice and IMS transport. But
in the end how do you deliver the voice here. This is mobile high speed data,
CDMA and UMTS. Multi service broadband access to IPTV, and the opportunities to
talk about the access phonebook.
What's now key here is, is that the opportunity is with IMS, we can
accelerate traffic. OK. The more people see the ability to blend and I'm going
to show you a demonstration in a few minutes, how to deliver IPTV, caller ID,
SMS, e-mail, when people start utilizing so that they become comfortable and
utilize IMS where they can actually utilize the packet network blending of the
services, they're going to actually accelerate the adoption of the technology.
When you drive traffic, you drive access network. You need multimedia, you need
optical backhaul. You have to provide more services and more solutions,
integrations opportunities for John Meyer. Also this IMS, as Pat said earlier,
is the ultimate enabler, allow from the customer standpoint, the ability to
integrate and blend services, but from our perspective, we become the ultimate
integrator. The person we can now provide from the device, which is the
(inaudible) user, always is the application, is the ability to tie the portfolio
end-to-end.
I believe leaders in the IMS core will become the master integrators and
across wireline or wireless networks, voice and Internet applications, they will
be able to deliver the value. And not only in terms of complicated but also
prior to portfolio.
So what are we doing about that opportunity? And I'm going to show you in a
second how that actually -- we see already today what we're already
administering. But that means what do we have to do? We just can't show up at
the box. You can't show up at the box anymore. You can but actually the true
value is in terms of the end-to-end solutions. So we're talking about network
transformation, and we deliver the boxes end. We deliver highly high quality
cost structures boxes and we also deliver converged Ethernet transport
end-to-end. We also deliver transport from over networks end to end, starting
from our end in the base station all the way back in through.
In terms of customers what do they see? I dint just say, hey, show up and say
I'm here to buy my IPTV. No, what do we do to deliver on the value in terms of
multimedia, residential voice, Wi-Fi to cellular hand-offs. How do I extend
4-digit outside the enterprise? IMS will drive the solutions that will drive the
options to the end-user. So while this is on how do we pull through the entire
portfolio to the value of IMS, how do we actually deliver the solutions as we
put together integrated boxes of profit portfolio to make sure that we have OpEx
efficiency, CapEx efficiency, not only driving growth but driving
differentiation. And then one of the solutions is the service we can adopt to
the end-user to drive the adoption of it, but more importantly, how can our
customers build their business model in terms of how they're differentiate in
the marketplace based on their customers, their markets, their technology and
their legacy.
Page 21
Now let me show you how IMS as an open enabler is driving value through our
entire portfolio. OK. And as I've already said, as the key services control
point in the network, we are critical in terms of our role with our customers in
defining an overall reference architecture for them. But also how do they evolve
the next generation core. Which opened up opportunities for us. The fact of the
matter is that we're seeing more contracts today that we had seen historically
from these markets than from the opportunities we didn't even know existed
because we're in this element of this customers network.
So as Pat spoke earlier in terms of IMS being a game changer. And as she said
IMS aims at the end-user experience, the security bandwidth management and
services blending. But it also allows in terms of, one you drive the adoption,
we believe, from our market research data, as you keep blending these service
and not just push the talk, push the media, push the video, the ability to do
that you actually pull through a lot more access and also wireline and wireless
transport core application for services.
So, let me show you some examples of how we started today. You can see at the
top of this chart is some of our wireless current IMS activities, and the
wireless I talked about are our current wirelines IMS activity. And what this
says is that we started with some of customers, just providing a 3GMSC to enable
the access part of the business. So actually it wasn't even IMS when we started.
But then when we started talking about how do we actually leverage the
mobility management to deliver on the Wi-Fi portfolio integration, you started
talking about the different network elements of the different -- of the core,
what you need in terms of media gateway and media gateway control and what you
need in terms of the applications and the services there. And we see that that
long-term will allow us to pull through more opportunities in access because
just starting from 0ur initial deployment of 3G MSC in terms of multiple
markets.
We have another situation in the wireless side where we have the mobility
management. We had a customer who just wanted to have 4-digit dialing outside
the enterprise. They wanted to deliver on the ability to. That turned into a
national media gateway sale to enable the country in terms of to have, in terms
of IMS and a nationwide wireless, if you will. and ultimately John Meyer has now
been able to take a look at why we not only have this nationwide media gateway
deployment. So it started by this 4-digit dialing, how do we now offer to the
enterprises hosted services that they can pay for in a transaction basis, where
they can add value to their customers through the strengths they've already
purchased, which they incurred and further for -- in terms of penetration of
services.
Down here in terms of our wireline side, we have a sale a session manager,
media gateway, that it turns into a messaging, brokering, locational presence
for ability measuring. It turns back into from an IPTV -- how do you leverage
IPTV, into the quadruple play? And ultimately it would move on the access and
transport. So you can see it would have pulled through the entire portfolio.
I'm going to show you a demonstration, let me just set it up for you in 1
second. The IMS opportunity and IPTV is part of the IMS. And what this means is,
I'm going to show to you what I've been talking about in terms of the real
penetration, and how does IPTV on work.
I this chart, you can see here that the network and this is the only network
Page 22
chart that's you're going to see today, which is very disappointing from a Bell
Laboratories presentation I know, is that starting from all the way down to the
user, to open TV applications, there has to be -- there is an ability to deliver
on blended lifestyle services and multiple dimensions. You can have mobile
multimedia in terms of mobile TV, the ability to deliver messaging and data
while watching TV, a location and presence in terms of utilizing with IPTV, at
the same time an ability to locate one of your family members or friends in
terms of the context. And then finally the ability to utilize voice services
with IPTV, which you will see in a demonstration truly brings to light how do
you deliver blended lifestyle services and how does it port to the portfolio.
(Video clip playing)
CINDY CHRISTY: OK, I'm going to wrap up with just 2 slides. This is a key,
one slide I want to just talk to, what are some of the key levers and successes
moving forward. And you might imagine UMTS and our ability to leverage off our
successes in Cingular and Opportunities. Especially because we believe our
competitive differentiation for HSDPA is fundamental. We want to continue to
drive the momentum in wireless broadband both in terms of EV-DO, and its
migration to RevA and HSDPA, but also the optical backhaul that enables as part
of those networks. And also to truly continue to drive and expand our share of
wireline by moving everything to the IMS footprint that's out there today. But
also our large embedded base.
And we have the opportunity. We have added an Ethernet through our

applications for partnering in native Internet on or where appropriate. And
we're delivering end-to end solutions including IPTV and also Ethernet. And
VoIP. And again capitalizing on our 2005 success moving these contracts to
larger commercial deployments, becoming more of a impact for corporate customers
portfolio, as a trusted advisor, but also taking the other clients we have today
and also migrating them to commercial deployment.
And also on our applications business, we saw this success this year in terms
of growth. We want to continue to expand in that value because again, that will
ultimately how our customers will differentiate.
Just a few key takeaways related to the messaging. One is, is that I believe
that we have a strong operational plan, that's got the fundamentals around this
(inaudible) piece, best in class practices as well as the discipline and
execution, that will allow us to continue to improve and make better progress
for us, profitable growth and also being more competitive. We are aligned and
focused on both areas that are critical in terms of our customers, our focus
markets have not only come back to our markets but also -- and how low price to
our customers and add value to our customers.
We are all driving to a next generation solutions that will enable these
solutions that -- again, we want to drive the adoption of the technology by the
users. And again IMS is truly a game changer, as it will unlock opportunities
for our customers, northbound, but also southbound. It is the ultimate enabler,
as Pat says, in terms of delivering the value across the portfolio. And then
finally I think that we are going to be in a position I believe to continue to
drive this momentum and we will see the continued progress through this year
relative to these initiatives to continue to improve the competitive nature of
the profitability and the growth of our business. Thank you.
Let's start Q&A. And I'm getting blind. I'm sorry I can't see you in the
Page 23
back. Just having a hard time, sorry. OK.
UNIDENTIFIED AUDIENCE MEMBER: Hi, Cindy. Just a question on, you described a
lot growth opportunities here, and the kind of success you've had in some of the
IMS wins, Can you characterize where you are in terms of transforming the
portfolio, to go out of some of those high growth areas? As you see IMS
beginning to accelerate, obviously you see that as a big lever for the next
decade or so. Building a sense of incumbency in the next-gen networks.
Where would you put your sort of the set of portfolio products that you have
today, relative to where those growth opportunities are?
CINDY CHRISTY: I think that if you look at -- let me first start with
mobility, we have delivered -- our goal was to quote unquote, "simply"
outperform expectations relative to the customer. I think we have a strong
technical portfolio, as well as I think we have an ability to deliver on the
next-generation solutions as it relates to IP and UMTS. As well as, I think we
will lead in EV-DO/RevA and its delivery. We've done if you look at the
standards relative to who have been making the biggest impact package in terms
of submitting in to standards in terms of IT the delay, the issues around, the
technical issues as well as IP relative to the IMS portfolio and platform, I
think we'll be there.
I believe that if you look at our current imbedded base, we are supporting on
the MMS side, video and on optical and our access portfolio that you speak, I'm
sorry, the video on the optical and access portfolio since today, and we believe
that LMAP is going to be fundamental to introducing our ability to leverage
(inaudible) and other spaces.
And we have a new optical platform that will be out in the end of next year.
But it will be critical in terms of continuing the cost structure improvements
in that space. And in the applications business, I think that we are prime
relative to our partnerships and our enabler relative to our messaging and our
historical platforms, to actually now start taking a look at other contents of
growth.
Question that we have made the right our choices or focuses, we're trying to
manage it on the legacy businesses, as best we can. So you can see that the
customers that'll evolve them, and when we move customers to the new solutions
platform, and where we are not strong I think for example, in native Ethernet
areas, we've partnered where we have to.
JOHN DEBONO: We will take the next question over here.
CINDY CHRISTY: OK, go ahead.
JOHN DEBONO: Excuse me, before we get to our next question, could you please
just identify your name and your firm, before you ask your question, thank you.
BRANT THOMPSON, ANALYST, GOLDMAN SACHS: All right, Brant Thompson with
Goldman Sachs. A couple of questions. First up, on one of the slides when you
were looking at growth opportunities, applications is an area which should
essentially be a $20 billion adjustable market. Can you just talk a little bit
about that opportunity there? You had mentioned, I think Pat had mentioned that
you're essentially going to M&A there as well as organically and kind of what
were you watching for there. They seem to be not of the same size as you have a
Page 24
test market overall.
And then is there a way you can quantify how much of your revenues currently
come from the growth areas that you had outlined at the very beginning of the
presentation?
CINDY CHRISTY: I can't answer the second question. We don't really quantify
on the growth areas as far as -- if Frank wants to add his comments. But I can
answer your first question. And then Dave, you can also help me in terms of some
of the context.
That 20 million looks like the entire applications end-to-end. The enablers
that we've originally, actually are in, but also the mobile content account ,
the billing systems, all these solutions that drive end-to-end in terms of the
portfolio. So, today we, we can see -- we are actually a different market at
stage . Probably some areas we currently have today is somewhere about half of
that opportunity and then the other half of that is in the growth areas of our
content, billing and other areas.
DAVE GEARY, LUCENT TECHNOLOGIES: We -- just to simplify the way we think

about the applications business. We think about it in kind of 3 areas --
communications, and the other areas, I'll come back to these, what we look at is
enterprise, productivity improvement, applications, and personal convenience
apps, and a category which is a bit part of the growth, is in entertainment, and
the delivery of content. There is also a set of underlying technologies of
platforms that are important for the delivery of those applications. So
communications is traditional, voice telephony, voice VPN, call center types of
applications and we actually have products in those spaces, for all of those
video extensions to those that have been enabled.
That also could be in a variety of forms, whether its voice mail, extensions
to that as well with video, short message service, which obviously we have
solutions to those spaces.
In the personal convenience and enterprise productivity, we saw really good

example of that in the flash demo. The personal convenience application, you saw
a phone with an application on it, which we call our network base presence and
location-enabled directory, where your buddies, in your directory is shown. And
the ability to access those buddies is reflected on that device with their
presence and the type of device that actually will be able to communicate with
that, will be a simple text message, a voice conversation, a video conversation,
a variety of things on the network, enabling that network providing that
intelligence.
Entertainment is a growing area. We have a partnership that showed the power

of network-based presence and location enable gaming. The delivery of content is
big, just not ring tones, and wallpapers, using for phones but multimedia
content is a growing area, that's a big part of the growth.
Enabling technology is a very important. One, we have to be able to rate and

charge for, the use of those applications, by subscribers, as they move from
various types of applications as those described earlier from a voice
conversation, seamlessly into a video. Between their Enterprise and their home
and in-between, we have a powerful rating and charging engine, that provides
that kind of capability on a pre and postpaid basis. And by the way we see
examples in the industry where our companies can bill for their services becomes
Page 25
a real competitive advantage and we think operators capabilities to do that,

with our platform and provide flexibility and features is key.
The last thing I'll mentioned is subscriber data, in these networks is in a

lot of different places. And with some of the applications I described, it is
important to be able to access that data, in a quick and cost-effective way, and
our subscriber data management solutions, starting with our FDA Java solution,
for mobile networks, our HSF solution for IMS networks, and extensions of that
to allow access to data and legacy elements in our customer's networks are an
important part of that solution set. All that together, all those applications,
and the enabling technologies really represent the significant growth in the
market that we see.
PAT RUSSO: And Frank's going to just talk to the first question.
FRANK D AMELIO, EVP AND CFO, LUCENT TECHNOLOGIES: Yes. In terms of the mature
and non-mature, the way I'll do it I'll slice it. So if you look at voice
network as primarily immature, to be driven by circuit switching PHFL , it will
give mobility primarily non-mature. If you look at data and network management
and optical, they really kind of split, because you have got the next-gen, and
then you've got the more traditional. And so SONET and SDH for example, and
optical and all the next-gen optical products, and those are a kind of split.
Their service is much more biased towards non-mature. So you got to look at it
by slice to really get the number.
Yes?
UNIDENTIFIED AUDIENCE MEMBER: Hi, I'm Nuens here. That clearly is a nice
early splash with Cingular and with much, much (inaudible). Now a few questions
around that, and future opportunity.
First what we hear is that one of your rivals within Cingular had some
difficulties. Where do you see the opportunities for expanding your role within
Cingular, are you (inaudible) going forward?
Second of all, you have trials underway with China Netcom, and eAccess in
Japan, a couple of big potential, new opportunities in the next year or two. Can
you talk a little bit how those trials have gone and, sort of, how that's going
to give you the opportunity of timing and when you might expect the network
decisions from those customers?
And then finally, actually you have a long-term hat on and say 5 years from
now, what do you think the market structure here is? You, currently you have 1
big market leader, you have another company that's Number 2 and seemingly doing
OK. And then there is a lot of players that are struggling and yourselves are
going to cover up the bottom. How many competitors do you think stay in this
game? There's a lot of R&D associated with it. Five 5 years from now, kind of,
where does Lucent fit within the market structure and how many competitors you
got?
CINDY CHRISTY: Could you repeat the question (inaudible). I'm very
(inaudible) let me talk first, I can't really actually -- you really -- in terms
of Cingular, you really need to talk to Cingular to know their desired results
-- the vendors. So let me talk to this. We have been from day 1 as I said
driving to offer from expectations with Cingular. I feel confident in telling
you that I believe that we have delivered against our commitments in terms of
Page 26
product delivery, key performance indicators, and we will support them relative
to the launch. We have always intended to take advantage of any issues that they
may come up with in terms of any other venders or opportunities.
When we started, historically a lot of our markets, we may start with a

certain market share, our intent is to deliver through what we call Patent. We
want to Patent it out into other areas, in terms of other opportunities because
of what we are going to do because of our ability to deliver on our pieces. It
is in fact giving an opportunity to extend into some of these other areas. I
think we are well positioned. And I think that we will continue to perform to a
level where we can deliver the value. And I think that it's a choice they make,
we give them an opportunity to speak .
In terms of trials, eAccess was just awarded the licensed vendor this week,
from Korea that went up 7 . They are 1 of 2 vendors that received the license.
We had a very successful trial with them. We continue to work closely with them,
in terms of the context. They are currently in a bid situation. So it's quite
soon to assume at this point of time. But in terms of timing, their intent to
launch, in middle of next year, they'll begin commercial product deployment in
the first half of '06 and formal launch in the second half of '06. And so I
think they're trying to aggressively move there. And I'm looking forward to
continue to leverage on the opportunity to leverage on the success of any
access. And I think we demonstrated that value in multiple dimensions.
It's helping with Government relations, trying to influence -- to get the

license to bring the technology in. And then I also think, we got a lot of work
how do we actually deliver the guy , change the way the Japanese communications
to help him differentiate. They are coming in as a fourth provider. What do they
do to win in that space and drive enable partnerships across for the solutions.
So I feel well positioned for that and we see if we can compete there.
The trial in China Netcom was very well received. And we completed, did a
good job. And we also worked on trials in China in terms of integrating our UMTS
technology towards assisting (inaudible) in their interoperability. So I believe
that we are positioned for both CDMA and UMTS, when in fact the 3G licenses are
awarded.
And in terms of your question on the market structure, let me talk about out
structure in house. We have been able to continue to perform -- you would say,
how is it that id you don't have UMTS embedded base, how are you able to deliver
so well, and be leaders in HSDPA, if you don't have the resources and the people
and the know-how, because you don't have the cost structure. But we actually, as
you know, have the common platform across CDMA and UMTS. That enables not only a
synergy across our supply chain and the ability to deliver that piece, but we
share a common platform in terms of technology core, common platform in terms of
the base station. There are, yes, unique things that have been done for CDMA
versus the UMTS, but we leveraged the resources to the ultimate degree that we
can.
And so I think that our ability to deliver test (inaudible) in the game, our
tie there. We are still leaders of wide spectrum and CDMA around the globe. We
will continue to leverage that. That will allow us to compete in UMTS and
maintain a good cost structure and a good feature profile, if you will.
And I think that, yes, to your point. So I think the base will change in
terms of, there will be the ability to deliver and execute on a good technical
Page 27
plan, a frankly a quality and liability plan. And I think our clients at IMS is
going to be fundamental to delivering an end-to-end solution, to keep up in the
game, as consolidation continues, and customers look at who is adding value
because they are trying to simplify their operations, rather than making them
complex. And we are doing that on the technical side, but also on the market
side.
NIKOS THEODOSOPOULOS, ANALYST, UBS: Yes, its Nikos Theodosopoulos with UBS.
CINDY CHRISTY: Hi Nikos.
NIKOS THEODOSOPOULOS: Hi. My question on the transition from the current

circuit switching PHS revenue to the IMS revenue when I look at it from the core
aspect of it. Based on what you said it sounds like next year will be the year
of the early deployment in '07 is potentially when IMS quote unquote, "takes
off."
CINDY CHRISTY: Right.
NIKOS THEODOSOPOULOS: So, should we look at that and think that some time in
'07 the IMS revenue stream exceeds that of what you are currently you feel or
whatever the revenue stream is at that point, on circuit switching, and PHS. And
is that the transition year? And as the transition happens, what is it going to
mean for the margin structure quote unquote "voice networking." Does it get
better, does it get worse, is this IMS revenue stream going to be a higher
margin business or a lower margin business, when you are currently doing voice
networking?
CINDY CHRISTY: OK, we -- I'm going to say a few words about this transition.
And Frank can too. And let's see, Ole -- first of all, one of the things that
I'm going to ask is if you are going to look at our contracts that we won to
date, there is a percentage of it, that goes to the core, there is a percentage
of it that goes to applications and there is also a percentage of it that goes
to services. So when you take a look at IMS revenues, it's not -- you can't just
say, here's the classic voice switching, that's what IMS is, because that's not
-- it is (inaudible) portfolio as one. Frank, why don't you answer?
FRANK D AMELIO: Sure. On the margins piece, I just want to punctuate what
Cindy said. It's hard for me to say there's a specific gross margin because it
involves products, applications, services that would really be on a
deployment-by-deployment basis. So that's how we look at it. But what is
important is when I get up and talk later, we've got fiscal year '06 guidance
out there and the long-term profits to gross margins and we've tried to
incorporate this obviously in (inaudible) that's point 1.
In terms of the rhythm of the revenues on IMS, we expect the fiscal year '06,
for '06 we expect our revenues to be basically stabilizing, that is slightly
below the annual '05 level. And clearly part of that is what we expect the IMS
right? For IMS, for fiscal we don't expect any material impact based on the
reasons that you just said. But we do expect our IMS revenues to begin
increasing, as we are go into fiscal year '07. So that's kind of how we position
it relative to the rhythm of (inaudible) and that's what we see in the
marketplace.
CINDY CHRISTY: To Frank's earlier point, the first point, we still think to
the '06 model the assumption on our PHS profits and we also have built it into
Page 28
our longer term that I talked about, possibly going into the business that we
understand where that is going and we are driving so that we can update that.
JOHN DEBONO: Cindy, we have a question up here?
STEPHEN KAMMAN, ANALYST, CIBC: I'll try and keep it down to 2 distinct
questions. It's Stephen Kamman, CIBC. Number 1 on -- first on with nasty one
first and then the nicer one. IMS only it concerns, maybe it's not to do with
your customers but a lot of this seems to be trying to build for stuff that
Google and Yahoo! and Instant Messenger are going to give away for free. And I'm
really desperately struggling with whether or not -- maybe we can sell these
guys out in a year in sales. But do you really think that this is inevitably,
this is inherently a sustainable business plan, maybe you can answer that?
Same question, Ethernet, very encouraged to see that. How much of that is
enabling a single stand alone Ethernet service or how much of this is a rude and
planned rip out of the actual, sort of, core transfer if you can see, where I am
getting at. Are people putting us in, it is nice to have LAN, transparent LAN
service or are they really ripping out the metro area, because obviously the one
side of that market is a lot bigger than the other. So two questions.
CINDY CHRISTY: OK, let me do this. I'm going to -- Ken , why don't you answer
the Ethernet question first. OK. Then I'll take the second one, think about the
IMS question.
KEN WIRTH, LUCENT TECHNOLOGIES: So on the Ethernet piece, I think you saw
through Cindy's discussion, Ethernet becomes really a fundamental technology
that enables all these packets to flow around in the network, depending on the
service that is coming into the network. So we really are focused on Ethernet
capability and extending our Ethernet capability across our portfolio. And it
plays into a couple of different aspects. It's not only the business services
with Ethernet LAN services coming into the network, but it also plays into the
mobility backhaul.
If you think about the mobility aspects of the business today there is TS1 or
T1 coming out of the base station. As they go with 3G network, that's Ethernet.
So what we have done is built Ethernet capability into all our Edge optical
systems to enable our customers to add that incremental service capability,
regardless of whether it's a residential service, business service or a
fundamental backhaul service.
The other piece that plays in as we start to aggregate all these new Ethernet
service formats coming into the network, we need to be able to switch those,
right. So we've built layer switching capabilities in all optical systems to
enable that switching of packets within the Metro Access, within the Edge and
then the Metro core portion of the network. And then what we simply do is funnel
the traffic that needs to go to the core routers, the core routers.
So Ethernet is really a fundamental enabling technology, it's in everything

that we talk about from a service perspective and we are highly focused on
moving in that direction.
CINDY CHRISTY: OK, well, it compensates on the IMS questions. OK a couple of

things. One thing IMS question I think, it's the service first. First of all, if
we just sit down and talked about what IMS is, it's about IP. So a customer's
benefit in IMS for just sheer traffic over the network because just pushing bits
Page 29
over the network is going to be the opportunity to have capacity in traffic and
the ability to achieve that.
And I think one of the key things you have to look at it is, if you look at
some of the announcements this week, with Sprint and Sprint contest, it's not
about delivering the locations, engine or the portal, it's about truly
delivering the triple or the quadruple play, OK. It's a subtle piece of anytime
anywhere communications to be productive or have more (inaudible) on the phone.
I mean, Sprint, Sprint if you saw the press release, is going to charge 2.50 for
a full music downloads, when you can actually go to your laptop and get for
$0.99.
So that shows there's a market and the reaches where people are willing to
pay for that type of service. And I think when you look across -- there are
different people who want best efforts service -- have no problems with best
efforts phone service in the home. But that's why we have an MPLS port. Because
there is a whole scale or slew of different types of phones and applications.
And a 4-digit dialing, there's a willingness to pay for that. There's a
willingness to pay insurance of the ability to actually deliver on these rapid
services which somebody has again the ability to see personal utility. I'm going
to pay 5 bucks to see a video clip my kid in California when I'm away.
So I think that I don't believe that IMS is just a centerpiece. I don't think
you can give it away. I think the key here is the quadruple play. The ability to
deliver voice data, video and mobile content, it really do your locational
presence to add value. I think advertising is going to be a big piece of market
into. There are going to be some people who are going to be first in the pipe,
there is money there. And there is going to be some people who are going to add
value on top of that.
And then you are going to see all this different types of business models and
different types of approaches to the marketplace, and partnerships wireless and
cable folks, you are going to see the cable folks operating with the different
connections in terms of the different areas where you are going to see a
partnership. And I do think that there is going to be this model. I think it
will evolve, but it's all about how do you drive more traffic, how do you try to
drive more value to the user. There's Tivo in your home today, there's all kinds
of stuff. And when you start integrating those things, people who actually have
the ability to see the content, and get the information they want, when they
want it, willing to want to pay for it. John, do you want -- I'm sorry -- you
do?
JOHN GIERE, LUCENT TECHNOLOGIES: Yes, I actually think the question, as Cindy
noted is a terrific question. It's the center of what I talk with all customers
all the time. But there's fundamentally two other things I would add, that
clearly come up -- and by the way we have the same conversation with AOL and
Google and others, because indeed they understand -- the fundamental struggle
the battlefield between the various new generation operators, is around
subscriber management. How well do you know that subscriber how well can you
anticipate and preference those services adapting that where you can start
serving to those. Obviously, today the portal community does that very well. But
it's a destination. You have to go to it, access it, bring it down, and the
strength of the brand takes you there.
The opportunity for the service providers is they are already destination
Page 30
prevalent. They have persistent or discontinue communications in all manners. So

that there is constant nature there. The second part is fundamentally is
beginning to different the security. It's really a very, very important area.
Today's portal community and all brand research does suffer some concerns about
security. If I'm going to do mobile transaction is Google the place I do it? Now
they are improving and continuing to identify opportunities, but our service
providers have a tremendous opportunity around security to secure Internet
relationships with their end users.
The key connection to punctuate with what Cindy said is, we're evolving from
a connection based marketplace to a subscription based marketplace. Now the
advantages of connections persistent, when you look at our customers, and
especially converged customers but it's also very strong when you look at Google
and Yahoo!, or AOL. The key on that will be how well you take the subscription
side of that and embellish it drive it and that's the key fundamental aspect of
what an IMS architecture does.
And many of these elements by the way are very much of interest to folks like
Google and Yahoo!, who have a similar anticipation how they would evolve their
subscription services.
CINDY CHRISTY: Thanks, John. OK, we are going to take a break and then
reconvene when, John?
JOHN DEBONO: Everyone, it's 10:45. Wait in the lobby where you can have
breakfast. Thank you.
(BREAK AND RESUMPTION OF SESSION)
JOHN DEBONO: OK. Everyone can take their seats.
We're ready to get started again. Before we do, there's just two things. Just
to prove that we were listening to your feedback, we are working on (inaudible).
I know that it proves that we listen to your feedback. You told us you get
hungry after a day like this, so there will be box lunches available as you
leave the theater at the end of the conference that you can take with you.
They're right outside as you leave the theater.
If you want us to keep listening to you, please fill out those feedback
forms. They're in those binders and that would be really helpful.
And with that, let me introduce John Meyer who runs our services
organization.
JOHN MEYER, PRESIDENT, WORLDWIDE SERVICES, LUCENT TECHNOLOGIES: Thank you,

John. Thank you, everyone. I guess I thought that since this is the third year
that we've done this, the IR team says I should spend some time kind of
refreshing where we are in services.
You've seen both in Pat's conversation and Cindy's conversation how service
is kind of weaved through many of the conversations that we talked about in all
of those technology shifts and the solution shifts that we're recommending so
I'll start by giving an overview on what we've done in the services business and
then kind of drop them a little more depth as it relates to our customers and
their customers' end users and define some of the new markets that we're driving
into and the impact that that's had both on Lucent as an organization but also
Page 31
bringing our network integration expertise to markets where we're going to

generate new revenue, have generated new revenue and will continue to generate
new revenue and opportunities for us.
We represent about 10,000 people around the globe in almost 50 countries and
if you looked at the largest service providers in the world. All 30 of them are
our customers. And so both from a services side where we may have chosen not to
choose our hardware technology, we are doing things like optimizing their GSM
network and helping use our competitors' equipment more efficiently.
Now we look on that as a win-win for us because we get a chance to showcase

our intellectual property by putting our people out in front.
The second thing is as we optimize the network, they buy less of our
competitors' equipment and we think that's a positive thing for us also and so
we're really pushing the services first type strategy across the organization.
We think we probably have one of the most experienced network and knowledgeable
network services group around the globe and continue to push that through the
talent and the expertise that we have in Bell Labs.
In many ways, you can look at the services organization as the people that
commercialize the brainpower that we've got into Bell Labs. And in many cases,
when we have a couple of problems, the first thing we do is we turn to John's
organization, which says come on in, help us solve the problem because we
haven't solved this before.
But when that problem gets solved, that becomes the basis for us the create
an offering and Chip Shaw (ph), who runs our professional services business then
packages that up, kind of distills it so we don't have to have three PhDs to
deliver it and then we carry that to the market because traditionally, if one
customer has a problem, you find that that problem resides in many other
customers and so there's revenue opportunities associated with solving one
problem that we're able to carry through our multiple customer bases.
So there's really three things that we're pushing as an organization. The

first one is - and you've heard it multiple times, that we aspire to be the
network integrator. And I'm going to say that again, because you'll hear it
again. We aspire to be the network integrator.
There's many people out there that are saying they want to be a systems
integrator. But we don't aspire to get into the computer side. We understand
that plays a role in it but our expertise, our legacy and our capabilities are
really in the network space. We don't want to get into that crowded market
called systems integration. I would tell you a lot of people want to get into
our market because they see it as a sweet spot going forward. They just don't
have the technical expertise.
And so we're moving from that technical network expertise further upstream
into OSS-BSS and really trying to surround this area. And we're also teaming
with people - traditional system integrators, giving them this capability so
they're pulling us into situations where we normally wouldn't be there or maybe
we've chosen not to spend our sales and marketing dollars to try to pursue that.
The second message I want to leave you with today is multi-vendor. And I
think if you look across our industry, especially in the equipment and hardware
part, you would see that people have made the choice to get into the services
Page 32
business have not made the choice to get into multi-vendor.
And you're probably saying, well, you know, why would you get into this and
we have a very strong hardware base, strong capability of products that we have
inside Lucent. Why would you even talk to multi-vendors?
Well, by its very nature, networking is becoming more complex, and by its
very nature as we move into IT it's not 100% Lucent networks. And so although we
will continue - we're continuing to pull when given the opportunity, some
products to there (ph), we find ourselves in a situation where we can't always
do that.
And so our knowledge of other people's systems and other people's equipment
is going to be critical to success in IMS and I'll cover that in a little more
death later.
The third thing that I want you to remember out of today revolves around
managed services or hosted applications and I really combine those all in one
category. You'll see that the pressure that our customers are receiving around
op ex, CapEx reduction, the ability of getting revenue out of the network,
accessing resources quickly, is going to drive a mindset to give them the
opportunity and the expectation that managed services is a potential way to go
in giving it.
And that's the ability to match OpEx spend with revenue, as they get to the
end users, is going to be a big threat and cause them to adopt, to remodel
quicker and quicker.
So how are we doing relative to our strategy? I think if you look at this
marketplace, big subject (ph) market. There's $55 billion worth of potential
market that we're currently addressing and we're seeing continued revenue
growth, but the nature of this marketplace is actually very fragmented. It's
also very competitive, and, in fact, the biggest competitor when you look in
this market is traditionally the in-house people. Because the in-house people
are saying I can do that myself and we don't really need the help. Or we need
the help only as it relates to your particular equipment or whatever and so
we're spending a lot of time also on the technical side but on the business side
we say, how do we increase your speed to market so you can get more revenue
quicker?
How do we help the OpEx, Mr. Finance Person, so that we can actually take the
cost out of the structure whether (ph) or how do we make sure that you get a
maximum return for your CapEx? And so the market is going fast, but we're
actually going faster than the market and so you can see that we've got a 10%
growth. I'll show you a little bit of a different cut if we pulled out some of
our deployment business, I think Pat talked about it already but we think if you
were to pull out our deployment business, we're probably growing at least three
times, maybe four times as fast as the market is in this space.
And so where we're investing, we're getting the returns. You see that we, in
this growing presence in this marketplace, we're making traction in the managed
services space. We spend a billion dollars with the managed services business in
both announced contracts and unannounced contracts because in some cases
customers don't want to showcase that somebody else is operating a voice network
or a voice solution for them and so we are in a position where we can't
necessarily announce, therefore telegraphing to you that we were making great
Page 33
traction.
But we have a billion dollars worth of business in this space over the past
24 months, and I expect that to continue to accelerate. If you look at the
multi-vendor maintenance space. It's an area where the customer looks at it and
says I've got all these different vendors on my network and it really plays off
our strength in the multi-vendor area and that strategic push by us.
It's because customers look at it and say as networks get more compressed, as
I had multiple equipment vendors in my network and I'm also being pressured by
the OpEx reduction to have to take technical people out, I don't have the
capability inside my organization to really sort through the complexity and
figure out who is causing the problem and what equipment or what software is
causing the problem in the network.
When we decided that what these service providers need, and we're getting
great traction in this, is a single point of contact. Somebody that they can
call the 1-88 - or 1-800-Lucent and we're in the position of providing the
maintenance capabilities resolving and assigning blame on where the network
problem is and then also giving them the associated cost savings of having one
place to turn and because we have the technical ability, we've already got this
infrastructure in place through our technical support structure, our repair and
fare structure, we're able to do that, we're able to leverage that fixed asset
base over a number of different customers, meaning a number of different
hardware suppliers and give it to them more cost effectively.
So that's another big building block and as you will see we have about 1,500
products that we're supporting. Obviously some are much bigger and if you scaled
it down and looked at it, probably there's 60 that we really support and make a
big impact on our revenue stream but because of that and the 260 vendors that we
support, it's 1,500 products if you want to see a big number.
We're also building the book of business and there's two things that are
unique to the services business. You can sell it once, you get multiple years of
revenue on it, so duration of contracts is very important and so it's one of the
directions we pushed the organization to say, one-time sale is good but a
one-time sale that last three years is better and that we recognize the
associated revenue and profit as we do that works that you only have to sell it
once.
So that means your sales resources are back on the street, trying to figure
out what the next thing they bring into the customer base and the next new idea
that builds your book of business. The other thing that is important is total
contract value. The size of contract. So it's duration and it's the size of the
contract that has a big impact and gives you that predictable slash reliable
revenue stream that you can carry across the business.
So how are we doing on that? Well, we start by focusing on what are our
customers' business challenges. So what are they trying to solve and it's the
things that you heard in Cindy and Pat's presentations but it's maximizing the
revenue, quickly. It is how do I operate more cost-effectively or efficiently.
How do I make sure, as I'm rolling this out, that I am executing flawlessly.
So I am getting this up, it is operational and I'm getting the revenues as

quick as possible, but I'm also making sure it's a positive customer experience
or end user experience and how do I - when I make this decision I am innovating
Page 34
for the future.
And so in the middle column here you can see all of the things we're doing to
help make that happen. But at the end of the day it's about how we help the
service providers or the government or the cable company or the enterprises
deliver end user benefits. So how do they maximize the value of their consumer
and their subscriber? How do they improve the performance without increasing the
cost for their other business units inside the enterprise?
Or creating a superior experience where the customer is in love with this and
it becomes something that creates some more stickiness to this end service
provider. Or the power of your capabilities. You know, how do you roll those
out? How do you make sure that as you put this new technology out in people's
hands, if the end user actually does perceive value and that it's not complex,
it's seamless, it's something that they can bring and that they gain value, they
know how to intuitively use as a gift the capability and the value for it which
then drives value to our service provider, drives more use of the network and
therefore drives more value for service providers and for Lucent.
Let me give you some specific examples of things that we're doing to help our
customers, the service providers, the government, the enterprise, the cable
companies on these imperatives but also to give you some examples to generating
how real revenue today. The first one is maximizing revenue. And it's about
faster ramp-up to revenue streams.
One example of what we're doing to help maximize revenues is with our Lucent
communications application, Pat had introduced a bit of this earlier, but what
this is is a business model where we - and to kind of simplify it, we're
creating a vending machine for applications.
So we're creating a platform within our own network operations center that
gives our customers the capability to get value from these applications and pay
for it on per transaction basis as we get the revenue.
So if you think about it, what's the hindrance for customers to bring new
applications into the market? And we did some analysis on this where we looked
at it and said what stopped them from ever bringing things in quickly and why
don't they bring more in?
What you will find is the biggest impact is how do I integrate with your OSS
system, how do I integrate with your BSS system so that I can make sure that I
can properly manage it and that I can properly get the revenue for it.
Well, the real trick behind the communications applications or vending

machine is that you only have to build one set of pipes for the OSS and BSS and
then you can drop in a number of different applications that customers can
choose or not choose, but moves through the same pipe into their infrastructure,
and so that's utilizing our NOC services, our NOC capability so that they can
bring that value on a hosted basis quickly.
We've also offered the capability that at a certain time if you become a
substantial enough business for them, they're taking forklift (ph) it back out,
run it into their own infrastructure when they're ready to do that and so I have
created a network of third party application suppliers that will write their
APIs, their interface to fit with our NOC services or drop through the BSS/OSS
pipe straight into our service providers.
Page 35
Marketing people are loving it because they're saying you want to bring this
capability to market quickly? You mean I can get revenue before I incur a whole
bunch of CapEx. You mean I don't have to wait eight months to get this done and
I can do it instantaneously? And we're saying, to each one of those, yes, yes,
yes with this solution.
The other thing you need to understand in this is space is what we see is a
very tight linkage to Cindy's business and Dave Gehry's (ph) business around the
application because in some cases our customers are not going to be wanting to
be in a position to just buy it in a vending machine basis.
Many of them instantaneously see the value and instantaneously would prefer
to bring it into their existing networks. When you bring it into your existing
networks that's what you need. You need OSS and you need BSS help to make it
happen. So that's why the focus on being the network integrator is very closely
tied to the applications business because you bring that application in you need
to connect it to all those pipes and when you connect it to all those pipes,
that drives services revenue.
So the five pushers (ph) of cities (ph) in the application space is going to
drive a bunch of business for us also.
The second imperative the customers live with is how do they - with the
increasing pressure that they have and the multiple competitors that are coming
in the market is how do they lower their OpEx to remain competitive. And we're
working with carriers through variations of business models to help them do that
and so the graphic over on the far side is really to illustrate that we can go
from soup to nuts giving them ways to solve their OpEx depending on what they
choose.
The first one being optimization solutions. We have the capability to assess
the network, to design their network, implement their network that can drive
optimization. And that's not only limited to our equipment because unfortunately
many people have chosen multiple equipment sources or providers so we can
actually do that across multiple peoples' networks and so in addition to
optimizing our hardware, we can do the same thing for other people's hardware so
we can be a one-stop shop and put them in that position of optimizing so they
can grow their value for the investments they made in the network.
Or in the multi-vendor space we can do that single point of contact in the

maintenance area. It gives them, on the average, between 10% and 30% OpEx and
CapEx savings or if they choose to move further down the line we have a more
flexible business model as it relates to hosted and managed services.
What you see inside the boxes are examples of people that have actually
chosen that and one I'd like to single out is this Capgemini/TXU. In this case,
I've teamed up with a systems integrator. We've had a very large relationship
with Texas Utility. We are taking over the network, full responsibility for the
network and we've integrated that into our NOC services, our network operations
center and then are migrating them to voice over IP.
And with their interface back to the service provider, so we're in the
position of saying - talking to service providers, yes, we would like to buy
transport from you and we want it to be in this fashion. We're taking this
customer into voice over IP. This is the help we need from you and it really
creates a partnership relationship with the service providers where they
Page 36
traditionally looked at us as vendors, not looking at us as partners as they

bring us into a customer's armic (ph), that they traditionally wouldn't
necessarily react (ph).
We've got a number of different examples, first one being one where our first
posted messages in the United States. And that was an area where we put that up
on a transaction model and they're utilizing this unified messaging solution as
a way to provide services to their customers without making the major capital
investment up front.
The third key customer challenger is around complexity. And as networks are
migrating, the complexity is going increase and there will be a need for network
integration so LWS is in a position to understand where the next generation
network's going. And help with both migration and integration services.
Now I talked a lot about integration already but I haven't talked about
migration services but it still falls in the category of being the network
integrator. Migration is - you've got a legacy infrastructure today. It's got a
whole bunch of information that's relating to your customers. Databases,
multiple customer databases.
How do you migrate that information flawlessly to the next generation network
so that your customers - so that the value you gain in collecting this
information in your legacy network can also reside inside the next generation
network?
If you look at the size of this particular opportunity, you can see that on
an average service provider in North America it's in the hundreds of millions of
dollars to go through this process to do.
And so in each one of the people that are going through this analysis has
been, how do I go from legacy to IM or IT are saying, and I've got to do all
this too. And by the way, Lucent Worldwide Services can help you get there.
So what are our differentiators. One is John talked about, John Gehry talked
about how important security is going to be going forward in IMS (ph). Two years
ago I talked to you about how security was going to be very important for LWS
and we started on trading a package. We had - if you looked at the organization
we probably had five people that were focused on doing security consulting.
Now that business represents about 180 people and it has grown 240%. So the
expertise that we got in Bell Labs and understand people's networks has been
translated into the capabilities that we have in our security consultants where
the customers are actually seeing value from that and we are helping them do
security assessment for financial institutions.
Security assessments for TXU but also security assessments for our service
providers where they are looking to say how do I add more value to - how do I
become more than just cheap pipe? How do I add more value to my enterprise
clients?
Well, one of the ways they do that is to pull LWS, our consulting services
practice in there. We have a great reputation for quality service and know we
can help them in the network migration space and they know we're willing to
accept the responsibility of being that single point of contact.
Page 37
Now, I talked a little bit earlier on this but if you were to exclude what is
our traditional deployment business, you would see that we're getting
substantial traction in our professional services, managed services and
maintenance business. What the maintenance business means, you're probably
saying, well, how can you get traction in the maintenance business? Well,
multi-vending. When we go into a client and say we want to be in a position of
doing all your maintenance, that's - we're seeing great traction and people
saying, I want a single point of contact to make that happen.
In 2005 the business grew 20% outside of our more traditional deployment
business. The final customer challenge that they're living with is how do they
innovate for the future? What's their path to make sure that they don't make the
wrong technology decisions and have the builder (ph) to continue to move
forward?
What Cindy and Pat really discussed, what we believe is one of our most
promising innovations going forward that will impact the end users, that being
IMS. Our transition to IMS is going to be a very promising example for all this
integration, for migration services at IWS and once again, it's got a lot of
complexity associated with it.
So what are the three important dimensions that we bring to bear? The first
one is multi-vendor. I told you early on this was going to be important. IMS is
where it comes home and this is where you're going to see the value of us saying
we need to be in multi-vendor, we can stand there for a long time. We've built
the expertise with the people. We've developed the capabilities. This where it
has paid dividends for us.
Because IMS, even though it's defined as a standard, is a lot of areas were
still not defined. Things like deniability of service. Overload protection.
Lawful intercept. Are all things that are yet defined in the IMS standard and we
have the opportunity to define that standard through our services to be a de
facto service capability that falls into those various categories.
The second important dimension is around applications and management. IMS is

going to drive a whole bunch of applications into the network, so when you think
about our communications applications vending machine, that's going to give us a
whole cadre - ecosystem of third party providers in addition to our own
solutions, we will have relationships with, they will develop the ATIs (ph) or
the interfaces that make sure that it works very closely and seamlessly with our
IMS capability.
Historically, when you look at the IT business, you would see that for every
dollar of software that is purchased, there is at least four dollars of services
around the integration fees (ph). And in some cases with SAT (ph), that's turned
into $10 so that's where we se the fantastic opportunity as it relates to
serves, LWS as we move into IMS.
The third area is the third dimension of capability around IMS as we see
value around life cycle because we have the capability in LWS to support the
full lifecycle from implementing the application for the client to front end
entry planning, helping them with the marketing side, to implementation, to
operations, to hosting.
And you saw this hosted applications center, that's the tail end of it, so
we've created a number of different proof points to put us in the position both
Page 38
in support of our products but also in support of the full solutions that the
products are going to need.
And we've got some - I showed you the examples that fall into this category
that we're doing today that are reflective of revenue that we receive today.
Now I'd like to switch a bit from what our customer challenges to user - for
those of you that remember last year, we talked about a services first strategy
and usually services as an entry strategy where Lucent traditionally didn't have
traction.
Well, here are some new customers that when we got pushed into, they're
getting us a range of capabilities, a significant revenue stream and then I'll
show you some two other lines where you can expect that we'll be pushing into
and then next year when we sit down and report to you you'll see that it will
become a significant revenue base for us.
The first two of those traditional marketplaces are government and cable and
with government we started about three years ago significantly, cable we started
much later so therefore we don't have as large a revenue stream, although it's
picking up traction quickly. If you look at the TAM in these two markets, the
government TAM represents almost $20 billion and the cable is about 2.3 billion
but all of you know and have heard and seen the press releases that cable
companies are trying to get their lease to triple play, potentially the
quadruple play in getting into how do they build off their video base, they get
into broadband and make that a greater and more significant part of the
business, very successful getting there. And how do they build voice and then
how do they move into mobility?
Well what they're finding is operating a broadband network is a little more

difficult than operating a voice network. So when I move into - and talking
about the cable space, you'll see that that has been one of our strengths as ND
(ph) pulls into the cable market space.
Let's talk off of this slide about the enterprise market space and then also
some of the more non-traditional things we're doing in the service provider
space. The enterprise market space is a big tale (ph) but it's not a traditional
TAM for us and it's not an area that we traditionally had access points into but
we're pushing into them.
I talked a little bit about - but we're doing this selectively because we
don't have acres of sales and marketing dollars that we want to throw out so we
want to target areas very specifically that are very network intensive
organizations, that would have a need for our capabilities and our services and
that we can deal with, on success on top of another success.
One of those is utilities. I talked about TXU but in Latin America, for
example, we stuck a relationship around operations and maintenance with a very
large utility company who have an optical network and found that they really
didn't have the capability to manage it and that we are in the position to take
responsibility for that. Or with an insurance company or financial services
company.
We went out - one of our leaders that we had recently hired into Lucent in
the services business had a relationship with AIG went to AIG and said wouldn't
it make sense to you and wouldn't it minimize the risk for you if you went into
Page 39
a financial institution and found that they had done a security audit, took the
risk for security and security violations inside a financial institution or an
insurance organization was minimized, because of this audit, wouldn't you be
able to get them a discount in insurance?
And they said yeah. So what we've done is armed the AIG salespeople so they
go in and sell security audit services, our security audit services, into
financial institutions and insurance companies and AIG at the back end will give
them an insurance discount after they've done that and prove that we cured the
problem. So they see that as a value proposition, being able to differentiate
themselves in the insurance marketplace, same side, they're bringing us is and I
don't incur the sales and marketing dollars to get an access to a customer base.
The other area that we haven't exploited, in my opinion, effectively enough

is around VitalSuite. We have odd-hundred enterprise clients who have bought our
network software solutions. And so we have inside 500 clients and they represent
about 60% of the Fortune 500 companies have access and utilize our VitalSuite
product. So we have a reason to go in and to talk to them about avoid (ph)
discussion (ph). About security systems. About operating their network and
granted we're going to do this selectively because we can't do all things to all
people but this gives us an excuse to talk to them, it gives us an excuse to
deliver this capability and it gives us a broader range of customer bases that
we can insert these things into.
Quickly around the service provider, we pushed in what I would consider some
two or three nontraditional type businesses. One is in the security area around
lawful intercept. Outside the United States we're running a hosted lawful
intercept concept where they're able to access this so that most of those police
and government entities would access us and we would access multiple service
providers to provide lawful intercept that is now becoming a requirement in many
countries outside the United States.
Or around power. I think those of you that have been around for a while
realize we exited the power business a period ago and sold it to Tyco. Well, as
that sale - or I guess I guess the non-compete associated with that sale expired
in December and we want to get back into power actually doing it and building
our own product, what we want to do is get into power as the services point
because we have to go in all the COs (ph) already to our deployment needs and to
our maintenance needs. Why not, while we're there, check out the batteries and
see if there's a need for additional batteries and we can carry somebody else's
product in there.
Where we solved the problem, most of the existing power suppliers look at
this and say, this is fantastic and we know you're there already and you can
become our services arm and pull us into these situations.
Or around site acquisition where we found that this was something the market
needed and there was a great growth opportunity associated with that.
Let me drop more specifically into the government space. You've heard that
we've talked about it a couple of times and you've seen the press releases
associated with it but you might not have realized the government business grew
50% in fiscal year '05 and in '04 it grew over 100% and that put us in a
position and a recognition that Frost & Sullivan gave us the Competitive
Strategy Leadership Award with the work that we did in supporting the federal
government.
Page 40
We've targeted specific areas. Once again, focus. Department of Defense.

Department of Homeland Security and our civil and intelligence agencies. So what
are we leveraging? We're leveraging the capability that we have in Bell Labs
with works that we're doing with DARPA.
We're leveraging off the great relationships and the great reputations that
Bell Labs did (ph), hired government-specific individuals that are actually
focused both on selling and delivering those capabilities in the government
market space. We've created an advisory board and so we have an advisory board
that represents almost 200 years of government service.
We've got a three-star and a four-star general on the advisory board and most
recently announced that Tom Ridge, previously of Homeland Security, previously
the governor of Pennsylvania is joining our advisory board and he is giving us
capabilities and access points into customers and supporting us in our efforts
to grow our government business.
And by recent wins you've seen some of them I've listed here already but
things like with the Navy at spars (ph) where we're doing a wi-fi connection
ship to shore so they don't have to drag phone lines off the ship to connect in,
so once people are in dock they have the capability to access this.
This is a unique solutions that we were able to pull from Cindy's team and
Cindy's capability to bring to the Navy market space.
The second area I wanted to highlight is cable and we're winning in the cable
space and you've seen a number of announcements where cable companies are
pushing voice services, pushing broadband services. But what they found is the
customer service in support of a cable company and the customer service in
support of a broadband connection is not at the level that customers expect then
they want to provide voice services.
And for the caliber of customer service, the caliber of reliability is what
is needed to provide voice services they don't have and they don't have the
experience at it so we started with some of our more consistent things, voice
integration - VOIP integration services, multi-vendor maintenance type services
and we've grown them. As we've provoked the relationship on things that we think
is in our core competency that we always would argue that Lucent and Lucent
Worldwide Services has capability to provide, we get into that as an access
point and then we use that to upscope into other capabilities, giving them all
the other things we can do for them.
And as they learn more about us they find we want to do this because if you
think about the cable companies and as they push into VOIP, they've got
broadband and they've got access to the customers and they've got video, they've
really got a giant installed base. So we don't have a real legacy of mindset
around video - around VOIP that we have to sell again.
So they realize they don't have those capabilities. You look at it and you
see their willingness to look at new models because they know they're playing
catch-up with the VOIP and so what you're going to see from us this year is
hosted voice over IP opportunities coming out of this space. You're going to see
voice quality and service and voice integration capabilities as we build in that
marketplace and you're going to see network integration.
So the key takeaways that I leave at the end of services organization is that
Page 41
it's a giant opportunity for us and we're doubling the rate of growth - we're
growing twice the market space, we also have doubled our rate of growth year on
year from '04 to '05.
That we expect to be the network integrator of choice and we're growing the
professional services and managed services and the maintenance business at 20%
year over year but that as the maturing market space in managed services
continues to occur, we're already a leader in there. We've done $1 billion worth
of business in the past two years and we'll continue to grow in that and we'll
get bigger and we'll continue to build on our multi-vendor focus that we had
previously.
It's an important differentiator in IMS and it will be critical in any

network going forward. And you look at us growing in new growth areas.
Government, cable, enterprise. And as Frank told you, I think in your last
earnings call, we expect to grow comparable in '06 as we did in '05 and maybe
slightly better.
So I'd open this up to question and answer and I guess we've got a little
time left, don't we?
JOHN DEBONO: Before John answers your question I'd just like to remind
everyone please identify themselves when they talk.
SIMON LEOPOLD, ANALYST, MORGAN KEEGAN: Thank you. Simon Leopold with Morgan
Keegan.
Considering your role in rolling out these IMS opportunities, one of the
things I'm struggling with is it looks to me that these are really solutions
that are drawing from really across the company. Perhaps services is the front
piece leading in. How has this been changed in rewards and incentives programs
to really kind of get the incentives you need to measure your results yet get
the employees to get credit for their good work?
JOHN MEYER: IMS actually isn't services, so I'll correct you on that term
first of all. We're really the glue that's connecting our IMS solutions to the
rest of the company. So the rest of the service providers. So in that case - I
don't think we need to change our associated rewards because we're all incented
to grow revenue and do it profitably and we're also incented to make sure that
the returns - if you look at how one of the things that I measure our
organization on is revenue per employee which is a traditional services measure,
not necessarily a Lucent measure, but it's - I've created this revenue for
employee direction where people are looking at us saying how do I leverage the
capabilities I have and if I don't have those capabilities, how do I turn
outside to a third party to gain this and so if you look at that space, we've
had substantial growth in our revenue per employee area.
Some of that's been our revenues - our employees have gone down. As I've
looked at some of the lover value services that we provide like deployment and
said if that's not growing, I need to take that down but on the same side I've
been hiring in our professional services business like crazy so it's really
changing the dynamic and the mix that we have inside our business.
Frank, did you have anything else you wanted to add?
FRANK D AMELIO: Just quickly. And Simon, delivering solutions today that
Page 42
involves a suite of our product services and software, if we do that today and I
think the compensation system looks fine today. So in terms of IMS, bringing
those bundled offers to the market, from our perspective it's continuation.
Different area, but continuation of what we do today.
PAT RUSSO: Vertis (ph) really manifests itself as a customer interface so it

looks to the incentive and what we've done is married a focused swelling (ph)
effort on these kinds of offers, because it does take a different - not
necessarily a different but a lot of training, a lot of development around how
do you go in and sell a professional service in a consulting service.
So we have a very focused sales capability. Identify the people who know how
to sell the offers John has, but the incentive system is such that the customer
teams are incented to drive services revenue because they're rewarded for that.
So while we don't make distinctions between product solutions or services, there
really is an incentive to sell as much of this into the customers as possible,
even if you're not selling it directly to a specialized selling capability.
JOHN MEYER: And one of the things, I'm typically (ph) jump in. We do have two
other measures that I hold my team accountably on that are not traditional and I
talked about them in the presentation, that are not traditional, for equipment.
There's total contract value where they have incentives on total contract value.
They also have incentives around duration.
So those are more necessarily around the sales organization specifically.
JOHN DEBONO: John, we have a question here in the middle.
RICHARD WINDSOR, ANALYST, NOMURA: Hi. I'm Richard Windsor from Nomura. Two
really quick things, actually. You mentioned contract life and contract value as
key metrics. Any chance you can give us an idea of what the average contract
life is, what the average contract value is and give us an idea how good your
visibility is. Thanks.
JOHN MEYER: Was that three questions or just one? I only have one answer, by
the way. No. We do record it. I do award people on it but I'm not ready to share
it because once I do that you're going to be asking for it every quarter. And so
we'll get there but we're not ready right now on that.
JOHN DEBONO: John, we have a question here.
HUNDER REBULUGGIN, ANALYST, DEUTSCHE BANK: Hi. Hunder Rebuluggin (ph),

Deutsche Bank (ph). How do you come from the IT outsourcing world and EDS? Could
you kind of compare and contrast how your services are different as it relates
to the IT outsourcing world. You've seen a lot of use of the balance sheet and
where you kind of - there's a lot of cancel (ph) employees personally (ph)
intensity (ph) and so on. So how is this different from that business?
JOHN MEYER: That's a good question and it's different and similar in many
different ways. The first thing that I would attribute and I would say this is
probably in a similar area is the maturity of the market. I would compare the
managed services business and the network integration business that is currently
- that we're pushing in Lucent is probably in the late '80s, early '90s, where
it was a business model that people traditionally didn't accept, that they
looked at it and said we went and talked to them and said let me take over your
network, let me run this for you, we kind of got laughed out of the office.
Page 43
So we're seeing now that people are taking it seriously. We bang on the door
enough times, the customers are looking to get these guys. One of the other
drivers associated with that is that many financial buyers are coming into the
industry and so where people previous had looked at it and said operating
network is my core competency, our financial buyer looks at this and says how do
I get the return as quick as possible?
And so when you look outside the United States you see a lot of these
subsidiaries getting acquired by the Carlyle Group, the Blackstone Group, so
those are people that we in the services area in our sales force are driving
relationships with because we know we can save them money on operating a
network. They like that. They like the idea of having a predictable cost
structure. They like the idea of having a big brother like Lucent associated
with it that can help drive revenue growth.
So it's time and I think the market is getting there, we're seeing some
positive responses. We will transition people. I am fighting the idea of using
capital. I actually thing that was the downfall of the IT industry. Where people
didn't compete on their strengths, didn't compete on their capability, really
competed on how much money they wanted to throw out and it really accelerated
the commoditization of the marketplace, I would attribute that to, so I am
fighting it.
Will we eventually get there? I hope not. I am trying to delay that. I have
seen our competition use that in a couple spaces. If you look at our
competition, meaning specifically the services arms of the other equipment
providers, I've seen them use that to get a managed services deal on multiple
fronts and I think one of the things we do have an advantage to use is our
equipment base and maybe turning our equipment base from a one time purchase
into a transaction purchase mode.
Now whether you call that capital or not, I would call that matching expense
to revenue. OK.
JOHN DEBONO: John, you have a question in the back.
PAUL SILVERSTEIN, ANALYST, CREDIT SUISSE: Paul Silverstein, Credit Suisse.
Just from front side (ph) historically you've given us a demonstration of the
size of the different components of your services business. I know you mentioned
that that - professional management growing at 20%. I'm hoping to get an update
in terms of what the contributions are.
JOHN MEYER: I don't think I (inaudible)
PAUL SILVERSTEIN: You pull out professional services.
JOHN MEYER: We break out by revenue we get percentage on professional

services, maintenance, deployment. I believe for us we - maintenance I think was
40%. Professional services was up 35% and deployment was give or take 25%. And
we'll break that out again - we filed a K this year and we'll do the same thing.
PAUL SILVERSTEIN: Thank you.
JOHN MEYER: You're welcome.

Page 44
JOHN DEBONO: Question over here?
ALEX HENDERSON, ANALYST, CITIGROUP: Hi. Alex Henderson, Citigroup.
The question that I seem to be getting from most people and goes to the heart
of the strategy of the company is to what extent IMS pulls through hardware
sales and component sales of the rest of the company. You've talked about
bundles over and over again and yet when I talk to service providers they're
focused on getting away from closed architecture systems, getting away from
single vendor systems, getting toward open modular and IT by nature is more
along the data networking side or the traditional computer side where it's open
system.
So how do we get a gauge at this early point in the IMS deployment of how
important IMS is in fact pulling this bundling portion of your business? You're
saying you're multi-vendor. Do you get a lot of pushback that I'd like to be
more modular or would like to see integration of more people's equipment in
here? How do you think about this aspect of the business model?
JOHN MEYER: How would you do that? I would think you need to actually look at
the IT industry and you take an example out of staff (ph) where you see, and
then the associated growth of Accenture or the associated growth of the DNT on
what they've done off the back of staff. So if you're looking for some
comparisons of what I think is going to happen to my end next into the service
provider market space, I'd go so look at staffers and suppliers and look at the
people who did the consulting work on that because we have the staff in IMS and
we've got the services arm that's going to drive the revenue associated with
that.
And if you're looking for a comparison, I'd say go to that.
We are - in many cases the customers want this to work and tend to think less
about technology and more about how do I get the value out of the equipment and
so are they interested in saying what pieces go in where? Yes they are. And are
they interested in saying I already made the investment here, I hear where the
IMS story is fully packaged but this piece I don't want and this piece I do
want. And we're getting a lot of that and guess what that drives? Integration.
We can say, yes we can do that. You get this whole piece, but by the way, you
need to pay extra to get this piece integrated.
And you've chosen another voice mail system, well, that voice mail system we
don't have direct interfaces to but we can do that and that's services and so we
really - where they have made investments previously get within our overall IMS
package, that's services business.
And so we're finding in many cases they're saying - define that path, define
those things that make that connection.
PAT RUSSO: Al, can I just ask a clarification? Were you asking only about IMS
and its relationship to services or more broadly.
ALEX HENDERSON: (inaudible - microphone inaccessible)
PAT RUSSO: Let me just make a couple of points here because I think it's a
fair question what role does IMS or your presence in IMS play in affecting - you
used the term, pulling through. I would ask you to think about it as influencing
Page 45
in the following sense. There is no question based upon the voices of the
customers with whom we have interacting allowing the IMS architecture and their
decisions to buy that there is a big impact on the LWS business with respect to
integration services and migration services and all the things John has
described.
No question, it is very clear to us. We see that as a big opportunity.
With respect other aspects of the portfolio, I think it's important to be

clear about the necessity we have as a company as we focus on the end solution
to have a compelling value proposition in and of itself, OK, so when we go out
and we talk about ITTV we need to have a value creating offer independent of
IMS. What we've done, though, is we have focused on that so beyond that our new
access platform, etc, the work we're doing with a number of customers we've
mentioned that there's an added value when you can describe to the customer how
ITTV in IMS compliant environment can create an even enhanced capability around
how you bundle services.
So it's an and not necessarily - I'm not going to stand here and tell you IMS
will pull through ITTV. IMS' position can influence our ITTV solution because of
the IMS connectivity, the things that we're doing, the special skills we talk
about but make no mistake, we have to have a competitive offer and end and one
that wastes (ph) IMS and that's how we see the relationship between being in the
core to many of the other next generations offers that play into that so whether
you're talking about ITTV, whether you're talking about Internet and Ethernet
services, whether you're talking about something in services space, the point
we've been trying to make is when you think about the importance of IMS over the
longer term, it's got lots of tentacles.
I don't know if that helps you or not but I'm not trying to represent you
pull through a lot of things, you influence - you have the opportunity to
influence ...
JOHN MEYER: You're in a good position to influence but you don't necessarily,
they're not required to buy it. I think we have time for one more question.
JOHN DEBONO: John. Right here.
ERIC BUCK, ANALYST, JANCO PARTNERS: Eric Buck with Janco Partners. Two
questions first on the area where you had the multi-vendor support total about
1,500 products, 250 vendors. Is that with the full cooperation of those vendors
or is that then independently of their help and particularly as you look at some
of your competitors like Nortel product line for example.
And secondly in the cable space I noticed on the one slide you didn't list
any customer names and I was wondering if you're unwilling to do that at least
identify geographies or the cure level of the cable operators that your
providing those services to.
JOHN MEYER: Actually, I have David Dow (ph) here who runs our cable and
services business so I'll throw it to him after that but the answer to your
first question around the multi-vendor solution is it's with full cooperation of
our customers but it's not necessarily full cooperation of our competitors and
the good news is it's focused on customer business value and they're the ones
that want a single point of contact. They're the ones that have a complexity in
the network and they are the ones that are saying Lucent is going to take this
Page 46
responsibility. I am going to tell Nortel, I'm going to tell Alcatel this is how
I want to run it. If they chose not to be here they don't have to be in our
network.
And that hard conversation has happened multiple times as we proposed it.
Dave you want to talk about the cable systems.
UNIDENTIFIED COMPANY REPRESENTATIVE: Regarding cable specifically, the one

transaction where we mentioned the customers name was Hot Telecom (ph) out of
Israel and in that situation we were the network integrator that did the end to
end systems design, the implementation, the integration and the support and the
key there being end to end with multi-vendor content.
There were some Lucent products in there but the majority of the solution was
multi-vendor, including the switches as well as the gateways and some of the
back office systems. So in that case what we did was we did the integration of
the network layer, we did the switches and the gateways and the PFCN (ph)
connectivity. We designed and integrated the back office system an we also did
the design and integration of the billing system. So we did the horizontal
integration and then we dropped it vertically, integrating the three together,
put it on top of the HFC infrastructure and then provided the multi-vendor
support.
So in one place many of the things that we talked about here today in an IT
environment we put together our value proposition. The other customers that we
didn't list are the unannounced flavor of what we mentioned a few times and one
is in Europe and it's a very large cable operator in Europe with multiple
properties in many different countries and what we did there is a number of
professional services, turned things around, local member portability, legal
intercept, doing the billing integration and things like that.
From there we built a plan for the systems integration as they role VOIP into
their markets but I think where we're adding tremendous value to them is helping
them understand what their challenges are in the back office environment to
manage voice in a cable environment so we're making substantial progress there
and then in North America, so we've got some professional services, we've got
some multi-vendor support but what we're also doing is we're starting to enter
the world as the cable operators look at new market segments to enter and the
challenges associated with enterprise markets and what this mobility means to
them.
We've had a number of opportunities that we're currently working and we have
a lot of momentum there and that brings into the equation both the professional
services, the integration skills, but also the hosting capability that we talked
about this morning.
JOHN DEBONO: It's my pleasure now to introduce Frank D Amelio, our CFO.
FRANK D AMELIO: Thanks, John. Appreciate it.
Good morning everybody. So Pat and Cindy and John have really spoke about the
strategy of the business and the operations of the business. I'm now going to
translate that into financials and I'll do that using some key financial metrics
and I'll also do that by talking about where we were, where we are and where
we're going.
Page 47
And in the where we're going, I'll talk about fiscal year '06 guidance and
I'll also talk about long term targets.
So first on revenues if you look at the chart, basically you see fiscal year
'02, 3, 4 and 5. Just a few or four of the numbers. In fiscal year '02 our
revenues were 12.3 billion. In '03, 8.5, 8470, in '04, 9.045 billion. We were up
seven percent that year and then this past year, $9.441 billion, up 4.4%. So for
the last two years we've grown the business and as Todd (ph) mentioned, despite
the continuing decline of some of our legacy products, particularly switching
and DHF.
We've also said in terms of guidance that we expect our annual revenues to
increase on a percentage basis in the mid single digits and this year we
provided the guidance for '06, we also peeled it down that major segment. So if
you look for '06, mobility revenue will grow again. It will grow at a more
moderate annual growth rate in the fiscal year 2005, 12%. And wireline as we
said before, we said the revenues for the wireline business were expected to be
stabilizing at or slightly below the fiscal 2005 annual revenue which was 2.5
billion and that reflects the transfer of the network operations software group
into services.
And for services, and John alluded to this in his comments, he said services
would grow at a rate comparable or slightly above the fiscal 2005 annual growth
rate, which was 10%.
And then finally, in terms of the long term target operating model, and we
continue to want to grow the business at or above the overall market growth
rate. In terms of just the bullet on the chart, obviously we will continue to
focus on profitably growing the business.
If you look at gross margin once again, same format relative to the chart.
We'll go back to '02. Bring it up to fiscal year '05 and then talk about where
do we go going forward. In '02 gross margins were 13% and we had a lot of
restructuring going on back then. In fiscal year '03, the gross margin was 31%.
In '04, 42% and in this taxes (ph) fiscal year, 44%.
We are generating a gross margin that begins with a four for nine consecutive
quarters. The first one was actually the fourth fiscal quarter of fiscal '03. We
generated a gross margin of 43. To go back two years to fiscal year '04, in our
last fiscal year, gross margin was by quarter, 41, 43, 43, 41. If you look at
fiscal year '05, gross margins were 42, 42, 45, 46. So 44% overall for the year.
Now, for fiscal year '06 we expect our gross margin rate to be 41% to 43% and
one of the questions is, well, Frank, is it 44% fiscal year '05, why 41 to 43 in
fiscal year '06, there's a couple of things going on there and I'll get to them
on one of my later charts but we've got a significant decline in the pension
credit this year. We've pulled out in fiscal year '06 the pension correction
will decline versus '05 by about $300 million.
Now remember, a third of that goes to COGS (ph) and two thirds goes to
expenses so that's $100 million in expense that's a hit to gross margins. That
all by itself is about a point of gross margins and then there's some trending
in the business. Services growing at a rate where it's comparable to a slightly
- this year's rate means there's more services revenues in the mix. Services has
lower gross margins but not lower operating margins.
Page 48
So you have to factor in some of the trending in the business as well which
is why we provided the guidance that we did for fiscal year '06 and once again
in terms of long term targets, you've got the long term targets at the same 41
to 43. You look at that and compare it to last year. This year 41-43 versus last
year, low 40s.
Same chart now for operating expenses. Once again you can see the big, big
expense to revenue in fiscal year '02 when we're doing significant restructuring
and '02 is 69%, '03 44% and fiscal year '04 was 28, fiscal year '05 was 30 so
obviously, the question is, what's going on here, Frank?
If you look at significant items, significant items had a favorable impact in

fiscal year '04 was about three percentage points. In '05 were one. So
normalized kind of flat on E to R (ph) basis year to year and remember, once
again, in fiscal year '05 the pension credit was down about 150 million by
fiscal year '04.
About 868, it's around 718 and once again, two-thirds of that goes to
expenses which works to that on E to R perspective.
If you look at fiscal year '06, we said we expect the annual expenses as a
percentage of revenue to be about 30% and once again on the long term target we
said now high 20s where last year we said high 20s to 30.
And that gross margin guidance for fiscal year '06 and the E to R guidance
takes into account the pension credit decline that I just alluded to and then
additional items that I'll get to on a future chart but really charging or
accounting for stock compensation are the two major items impacting margins and
expenses and there's also some tax items as well.
This chart here touches on it so just let's just work our way through this. I
just said this on the earnings call. The visual I'm using here is a scale in
terms of the things working against us in fiscal year '06 and then the things
we're working on to mitigate those things in fiscal year '06.
If you look here in terms of the charges, non-cash items, I mentioned before
that the net pension and postretirement credit is going to down about $300
million. Now we had estimated that number up until a couple of months ago at 200
million. So it's only going to be down 200 million year over year and why are we
declining 300 million?
What really changed that additional reduction of 100 million was a change in
our mortality rates and really based on an increase in life expectancy
assumptions. And I'll hit this a little bit more when I get to the chart, I have
a specific chart on pensions, but actuarial assumptions can swing the numbers
significantly one way or the other.
So that number is down year over year at 300 million, stock compensation is
about 100 million. Eighty five million of which is expenses. But most of that
number is in the expense line items. And then U.S. income tax, we ballpark that
number on the earnings call at give or take 125 million. It's settled in now,
it's more like about 100 million and we actually issued a release on this
relative to really discovery of an error we had in our actuarial, preliminary
actuarial information on pension life release.
So that number now is more like give or take about 100 million and that's
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incremental. So if you read the juice box (ph), it's 300, 100 and 100.
The question is what are we doing about that? So what are we doing to
continue to improve the operations of the business? These are the items that I
called out and some of my colleagues have mentioned some of these in our
previous presentations.
Cindy talked about the formation of the network solutions group. Clearly
we're leveraging platforms, we're leveraging initiatives. Where there's
commonality in functions like offer management and bidding proposal, we're
working to make sure we maximize the opportunities there for efficiencies and
synergies so that continues to go on as we implement that.
We talked about the services led operations support software strategy. Once
again, taking these two businesses, merging them into one, taking the
initiative, combining them into one, improving our alignments, our focus, our
efficiency and obviously driving to make that a better financial.
We continue to optimize our supply chain network and we've discussed that we
are consolidating our EMS vendors from four to two. We talked about the business
process simplification, just being schematical about being more and more
efficient at what we do, simpler in what we do and getting the benefits of that
in our spending and then when you put all of that together, in terms of what we
see right now, we look at a 1,000 headcount net reduction, 2,000 gross. I'm
going to come back to that in a minute.
And really, when you get into the difference between net and gross, what's
really going on there is we're taking out for, I'll call it a more expensive
carriers and then replacing them to a degree by utilizing engineering centers
outside the U.S. to do a couple of things one is they're lower cost, but two is
they're allowing us to put resources closer to our growing number of global
customers.
We've got a couple of things going on in terms of utilization in terms of

engineering centers. And we'll just bounce back now a little bit and try to put
some numbers around some of it.
So 1,000 net if you assume an average rate per employee with some load of
125k, you take 1,000 people times 125k, you've got $125 million on a pre-year
effect.
Then if you assume the other 1,000 is basically going to be lower cost areas
and you assume the cost is about 25%. That is lower cost areas you can higher
four people for the cost of one in the entire cost area.
If you multiply that 125 by 75%, right, the reciprocal of before and you'll
get, give or take, about another $100 million on a full year effect.
Then when you look at the other areas we're working on, we spend lots of
money with our EMS partners. We're clearly working with them on how to improve
the spend. Create win-wins for the two of us where we can save additional money
from there. We're working on simplification, but by the way, most importantly,
we're continuing to work to grow the capital line profitably and have that
favorably impact the company as well.
So it gives you a feel for some of the things that we've got to deal with in
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fiscal year '06 and the actions that were taken to continue to improve the
ongoing business.
You can see here in the bullet, fiscal year '06 guidance, and I alluded to
this, includes the absorption of about $500 million related to the pension
credit, stock compensation, and the U.S. income taxes.
A little bit on the balance sheet. You look at the balance sheet you can see
our cash and marketable securities that we ended the fiscal year at 4.9 billion.
Some comments on the balance sheet - in Q4, we collected 900 million, 902
million, in cash from a tax refund. We've done a lot of recapitalization of the
balance sheet. We initiated the program coming out of the fourth quarter of
2002. We've repurchased, recapitalized, almost 3 billion of our paper, 2.995
billion. We've done that using equity and cash - 643 million shares, a bunch of
cash as we've done that. The key there now though, is if you look over the past
fiscal year, for example, we bought back 536 million of our paper using 547
million in cash. We used cash only in fiscal year '05, and the annual interest
savings from those actions is now approaching $200 million.
And when you look at our current ratings, we were upgraded by Moody's in May
of '05, and we actually got a double upgrade by Fitch in October of '05, and you
can see what the ratings are, basically a B, a B1 and a BB minus by S&P, Moody's
and Fitch, respectively. If you look at the composition of our debt, basically I
call it it's long, and you can see our net debt, which I'll get to here, but if
you look at the composition of our debt, it's long. Basically, 80% of our debt
matures in or after 2010, assuming that the interest then converts, is put back
to us before 2010. So without the puts, that number would actually be even
bigger relative to the overall composition, and then once again, as you can see,
we've been making progress on our net debt. In '02, it was almost 2.5 billion.
At the end of last quarter, it was 0.5 billion. Obviously, the tax refund
significantly helped us with respect to the net debt calculations, but
significant improvement here.
In terms of cash flow from operations, red is bad, green is good, obviously.
So if you look at kind of from fiscal year '02 to fiscal year' 05, and '02 is a
negative, give or take, three-quarters of $1 billion, we also had a big tax
refund that year when the NOL lies (ph) got extended back a couple of years, and
we got a big benefit from that, as did a bunch of other companies, so that
number would have been significantly worse if it wasn't for that tax refund.
In fiscal year '03, you can see we used cash again, give or take at about $1
billion. Last year, we generated tax from operations of about 634 million, and
then this past year, 717 million. And if you look at the components of '04 and
'05, the '04 was really driven by ad debt and customer financing recoveries. We
had a lot of recoveries in those areas in fiscal year '04, and then in fiscal
year '05, we had the big tax refund that I alluded to, and we had a stub that we
had to pay off on the shareholder settlement that was about 215 million.
So if you kind of net those items out, the cash from operations was pretty
much, I'll call it, a push. And our job going forward now is to continue to
improve on the cash flow from operations and the operations of the business, and
clearly what we're focusing on. The quick two by two on pension and retiree
healthcare, people ask lots of question about this in every forum that I'm in.
So we'll break this out between management and non-management and then pension
and retiree healthcare. And this is really focusing on cash, so cash flow.
Page 51
We do not expect to make any cash contributions to our U.S. pension plan
through fiscal 2007. That's for both management and non-management. In terms of
retiree healthcare, we expect to fund out of operating cash about 250 million in
fiscal year '06, and that's for management retiree healthcare. We do not expect
to fund anything on non-management until some time in fiscal '07, at which point
our Viva (ph) will have depleted, and then we'll have to use operating cash
there as well. You peel it down a layer, you just look at some of these other
points. As of January the 1st, as of basically last year, when we did our last
calculation on this, we had about 1.6 billion of excess pension assets that were
eligible for transfer on the 420 code in, as you can see, relative to the
internal revenue code. And that's based on an over calculation under ARISA (ph).
There's multiple calculations like ARISA, basically, and then the RPA
calculations really get into, I'll call this funding levels and OBA (ph) really
gets into I'll call it excess funding. I'm getting into a layer of detail I
probably shouldn't get into.
But just know, there's multiple calculations. This one is really the
calculation that's based on - or gives you the answer for excess funds, and
what's done is you're really staggering different discount rates. As you all
know, you stagger the rate, the higher the rate, the lower the resulting the
liability, the lower the rate, the higher the resulting liability. It gives you
a reciprocal relationship between the discount rate and the reliability. And one
other key point here is as of September 30th, or as of the end of our last
fiscal year, so from a FASB perspective now, or GAAP, our marketing related
value and fair value of our pension and post-retirement plan assets are closely
aligned. This is a key point, so I want to make sure I spend a minute or so on
this.
Think of the market-related value as really the difference between the

planned returns and the actual returns of our pension assets, because we make
assumptions every year, right, in terms of what our assets are going to return?
So our assumption last year was 8.5%? We said for fiscal year '06 we're going to
leave it at 8.5%. The fair value was really a snapshot of what the value of
those assets are as of the end of the fiscal year. The key to this is, once the
market-related value and the fair value become closely aligned, what that says
is if all actuarial assumptions remain unchanged, and that's a big statement,
but if you were to assume all other actuarial assumptions remain unchanged, that
would suggest that the pension credit going forward would start to be fairly
flat, it would move fairly flatly. Do you all follow?
So if you look at the pension credit, right? And you go back to, like, 2002,
this moved around a lot. There's a credit at 972, and then it went down to 669,
then it went up to 868, then it went down to 718. This is this year. And then we
said the next year we expect it to be down about another 300 million, which is
the 300 million I alluded to before. So, if you do math, 718 less 300 is about
418. Once this says now is with these two items being closely aligned, if you
assume no change in actuarial assumptions that number should be fairly stable
going forward. Now, obviously, actuarial assumptions can change, and they can
change and move the number up or down, but I just want to make sure that's kind
of a key relationship in the numbers.
OK, we commented a little bit on recording structure. I used this number on

the earnings call. I thought I would do it again just to make sure I showed you
what we'd be doing starting this quarter. So, if you look at our previous
segment reporting, so segment reporting through fiscal year '05, we had four
Page 52
segments - mobility, IMS and greater network solutions, services and other. If
you go down to fiscal year '06, we're going from four reportable segments to
five reportable segments. Mobility will become mobility access solutions. That
will include CDMA, UMTS, WiMax and our applications units. We're taking IMS,
we're really breaking that out into two different reportable segments,
multimedia network solutions, which think of as data, access and optical, and
then converge core, which is really legacy switching and then our IMS and voice
switching products. Services remain services and the piece parts that have been
in services will continue to be in services, and we're moving, as I mentioned
before, to network operations support software. Inter-services (ph), so that
will be reported there in fiscal year '06, and other remainders of (ph).
So, clearly, we're expanding our reportable segments from four to five. We'll
show revenue and segment income to each of those reportable segments, as we have
done in the past, and just clearly we have been and we'll continue to be very
focused on the transparency of the company and committed to robust disclosure.
In fact, we're committed to improving our disclosures. Hopefully our actions
have demonstrated that.
So, if you just go to some key takeaways, hopefully, I've covered these in
all my comments, but clearly we'll continue to be focused on profitably growing
the company. We have been improving our balance sheet, we want to continue to do
that. We believe we have sufficient liquidity and we're focused on generating
positive cash flow from operations and we have and we'll continue to be diligent
and disciplined in reporting and in our control environment. And we're committed
to maximizing the long-term shareholder value of the company. With that, why
don't I take some questions?
UNIDENTIFIED AUDIENCE MEMBER: Thanks (inaudible - heavily accented speech).
FRANK D AMELIO: Yes?
UNIDENTIFIED AUDIENCE MEMBER: Frank, in your long-term outlook (ph), it looks

like you have gross margins at 41 to 43% and OpEx at the high 20s, so if I do
the math, it looks like operating margin is in the low teens. I was just
wondering, you also mentioned that the pension credit my stabilize going
forward. So, I was wondering, embedded in that long-term operating model how
much you are modeling for the pension credit.
FRANK D AMELIO: So, I always get asked this question, and it's a difficult
question because in order for me to model a pension credit going out multiple
years, I've got to make assumptions on returns in domestic equity launches,
foreign equity launches, broad cap, mid cap, small cap. The way we look at this
is, regardless of what the size of the pension credit is, we will deliver on
those numbers. So those long-term targets, when I got in front of you all last
year, I got asked the same question. One of the things I said is, we expected
them to decline somewhat from the current levels, right? And when we did this
last year, the number was 868 million, down to now 718, down to 418. That number
is down 450 million in two years. Given that, and given what I talked about in
terms of close alignment, if we don't make any major changes to the actuarial
assumptions, we think it would be fairly stable, but my point being is,
regardless of what we do with the pension credits, we're committed to delivering
those long-term talks (ph), point one.
Point two is, to use the number that I want to come back to as kind of the
initial part of your question, which is you said, Frank, if we do the math, low
Page 53
teens. I'd like to revisit that, too, if I may. Which is, if you run the
numbers, right, we said for gross margin 41 to 43, and then high 20s, 27 to 29.
So, dependent on how you do the math, you can get a number that's more than the
low teens, but if you were to use the high end of the range on margin and the
low end of the range on expenses, you'd get a number that was 15, 16%. Remember,
what we want to do as a management team is we want to work into the high end of
the range, right? That's what we want to do. We want to work at the high end of
the range.
So your number's right, but I just want to bound it with, that's the low end
of the range, because the different of the range - and our job is to work up
into the higher end of the range, OK? But regardless of the pension credits, our
job is to deliver on those numbers.
Yes, sure.
UNIDENTIFIED AUDIENCE MEMBER: (inaudible - microphone unavailable).
FRANK D AMELIO: Couple of years out. I mean, clearly, we gave specific

guidance for fiscal year '06, we talk about targets, not guidance. And in terms
of how I think about targets, I think about not in terms of 10 years out, just a
couple years out.
JOHN DEBONO: We have a question over here, Frank.
KEN MUTH, ANALYST, ROBERT W. BAIRD: Thanks. Ken Muth at Robert Baird. With
the changing of the product portfolio you have or the changes of the services
and how all this mix is going into the equation here, where do you kind of look
at some of these opportunities coming up at major carriers, the Cingulars, the
BellSouths. Is there a threshold that you walk away from the business, or what
is kind of your low threshold for a gross margin at a major customer?
FRANK D AMELIO: Interesting question. So, I guess, one, we, the leadership
team and me, we look at them on a deal-by-deal basis. That would be number one.
Number two is, I look at them in the context of value creation. So what do I
mean? When we're looking at an individual deal, and let's say the deal is
strategic. So sometimes you're in a room and things can be strategic. The way we
try to look at them when they are strategic is OK, if it isn't financial now,
when will it be financial? Because even if it's strategic, it has to either be
financial now or financial later. Because if it's never financial, it's hard to
make the case that it's strategic. So it's either financial now or financial
later, and then the only difference in my mind is one of price (ph), and that's
how we look at them.
So, is it possible that we'll do a deal where the gross margins are low? The
answer is, of course it's possible, but it's in the context of what do we think
the business case is with that account, in that marketplace, and what do we
think the overall value proposition is that we can get from that initial
transaction. Now, you just need to know, Ken, we've walked away from business
where the pricing is just, I'll call it, unacceptable, where if you were to win
business, particularly in certain emerging markets, the problem is when we run
the numbers at those price points, and you look at, I'll call it, some of the
potential hits you'd have to take in earnings, we can't figure out how to get a
return on investment.
So, in those situations, we've not bit. So that's how I would handle it.
Page 54
PAT RUSSO: We do put ourselves in situations strategically where we go after

opportunities and business that might be broader across the portfolio but have a
lower gross margin. We then put together a competitive attack team right away to
talk about what can we do to improve that, what do we have to do about our cost
structure? We bring our (inaudible) in terms of the demand, as well as we put
together, OK, what other things can we expand into to make the return in the
business on an aggregate level better? So it immediately becomes something from
day one that start to take a look at in terms of improving the business.
FRANK D AMELIO: And then the only other point I'd make, and clearly, as we
give statements around guidance, as we give statements around long-term targets,
we're clearly making assumptions on what's the mix of business going to be, for
example, what's domestic versus international? Within international, where's the
business, where's the growth? And then we try to put that together, and then
obviously, based on lots of factors, and lots of work and lots of time, be able
to take that and make the statements that we're making relative to the
consolidated company. But does that help in terms of how we look at it?
Remember, a lot of times in these kinds of discussions, pricing can become
strategic. And I think there's an element of that that's true, but you have to
eventually be financial. I don't believe (ph) there's anything other than
intertwining things, it's just a matter of time.
MARK SUE, ANALYST, RBC CAPITAL MARKETS: Hi Frank, it's Mark Sue from RBC
Capital Markets.
FRANK D AMELIO: Yes, hi.
MARK SUE: Just on your revenue outlook, we have declining exposure to legacy,
increasing exposure to higher growth, better customer diversification and also
stronger growth in services, but the growth rate is still the same in '06 as it
is in '05, and you're also not taking into consideration improving execution and
also share gains, which you would be seeing at Canada, Telefonica, and also
there's quite a bit of opportunity at Cingular to displace Siemens. The question
is, one, why is the growth not higher, and can you maybe give us the backlog
numbers?
FRANK D AMELIO: So, in terms of the growth, let me take a shot at why we have
given the guidance that we've given, right? We've said, once again, mid single
digits, again, to your point. That's basically the same guidance as we provided
for fiscal year '05, and that's what we did. We actually grew the business in
the mid single digits? There's a couple of things going on there, I think. One
is, if you look at our business in tax (ph), you'll see in our 10-K that
revenues is - count of (ph) as a percentage of the overall business in fiscal
year '05 - this will be the K that we're filing - declined versus the fiscal
year '04. And really that's being driven by two things, declining DHS sales, and
then just the uncertainty in terms of the timing of the new IPCs (ph). We expect
that trend to continue in fiscal year '06.
We continue to expect DHS sales to decline, and we still need some clarity
relative to the new licenses there in that marketplace. We still view that
market, by the way, as a big opportunity. It hasn't been a big opportunity.
We're working real hard to be well positioned when those new licenses are
issued, but in terms of the rhythm of the numbers, one of the things that we
need to absorb in fiscal year '06 versus fiscal year '05, is an assumption
around the trending of the business in the China market, so that would be point
Page 55
one.
Second point is, in '06 versus '05, once again in terms of trending, we
continue to expect EV-DO deployment to continue, but at a more moderate rate
than we saw in fiscal year '05. So those two things basically are part of what
we capture in our revenue guidance. Pat?
PAT RUSSO: It really won't hit until the latter part ...
FRANK D AMELIO: Of the year. There's a lot of things that will hit n in the
latter part of the year. So it's those kinds of things. We're trying to factor
those various elements into the revenue guidance that we provide.
PAT RUSSO: As we as the timing of our two new platforms around optical and
access as well in terms of really ramping to GA.
MARK SUE: If I could follow up, does that mean because of your EV-DO customer
cycle and what's going on in China, maybe your March quarter is your trough
revenue quarter and it looks like it's onward and forward from the June quarter?
FRANK D AMELIO: So we don't do quarterly guidance, and quite frankly we

stopped doing that a while ago, and I think that was as good thing to get away
from. Here's what we said relative to the year, this is for year '06. I said it
on the earnings call.
What we said was we expected revenues in the second half of the year to be
slightly higher than the first half of the year. We specifically said that. I
said that. And if you looked at revenues over the last couple of years, for the
last two years, that's what's happened. If you look at fiscal year '05, revenues
in the second half of the year were slightly higher than the first half, about
100 million. And if you look at fiscal year '04, revenues in the second half of
the year were slightly higher than the first half, about 150 million.
So in terms of rank by quarter, what I would say is we said we expected

revenues in the second half to be slightly higher than the first, and that's
what we've seen the last two fiscal years. In terms of calling it by quarter, we
don't go there anymore. I think that's actually good practice.
JOHN DEBONO: Frank, over here.
UNIDENTIFIED AUDIENCE MEMBER: Hi, I've got a question - two quick questions.
In the services business, given that deployment is now becoming smaller and
smaller every year, and professional and managed services is becoming bigger,
shouldn't we see a big improvement in margin in that business going forward? And
it seems like the higher-margin business are the ones that now dominate the
sales and are growing faster. So that's the first question, and then on the
second question, back to the pension and so forth, when you make these
assumptions, like you said, the 8.5% rate of return, you're going to keep that
the same ...
FRANK D AMELIO: Yes.
UNIDENTIFIED AUDIENCE MEMBER: For example, interest rates are going up. Are
you going to revisit the discount rate? How do you decide? Do you use an outside
party to come up with these assumptions, or do you make them yourself? How do
you decide on those assumptions?
Page 56
FRANK D AMELIO: Why don't I answer the second question first and then I'll
come back to the services one. Is that OK? So in terms of how we make
determinations on what return on asset assumptions to use, what discount rate to
use, we do everything you can imagine. We use external, outside firms to give us
opinions on what they think the numbers should be. On the pension, we look at
how the pension's performing. We look at what are the last 10 years of actuals
for the pension, what is that composite number on an average basis. Then we look
at projections and the various asset allocation categories relative to how we
can go (ph) perform. We use an actuary to help us with that kind of information.
But ultimately, from my perspective, the decision is mine and I share it with
Pat. She helps me with it, and we obviously share it with the finance committee
and the board.
But we go to external sources, we get external analysis. I have a group, a

wholly owned subsidiary, that basically manages, that runs the pensions, and we
get all kinds of input, all kinds of analytics, and based on that, we come up
with what we think the right numbers are. You need to know, in my opinion, and
you can push me on this, I think we're conservative in our assumptions. The
return on asset number is 8.5%. That number is less than what our actual returns
have been over the last 10 years.
The discount rate I left flat. Our year over year is 5.5%. On the discount
rate, we literally looked at what are maturities for the liabilities? Then go
out into the capital markets, we look at indexes to see what those interest
rates are. A lot of the - Frank, rates are going up, should you be increasing
the discount rate, which would reduce the liability and actually make things
better? But the problem is, if you look at a yield curve right now, it's almost
inversed, right, in terms of when you go out long, there isn't a whole lot of
spread versus short-term rates. So we take all those things into consideration
to arrive at the numbers that we've arrived at.
But I think when you look at our return on asset number, if you look at our
discount rate, and we obviously benchmark, by the way, against lots of other
companies. Part of what my group does is we benchmark against 50 companies, some
in our space, some in other space. We never want to be, I call it, high on the
return on asset number, and we never want to be high on the discount rate. I
think our numbers are fine, and naturally I think they're conservative, my
opinion. You can push me on that.
In terms of beyond the services business, let's talk a little bit about that,
because that services business has some healthy gross margins, and if you look
at that business now, for the last three years - so we'll go back to '03 - gross
margin in '03 was 19%, in '04 it was 25%, and then in '05 it was 27%. And then
if you take '05 and break it down by quarter, it was 25, 24, 30 and 29, healthy
margins. You heard Pat and me talk about the services the services business on
numerous occasions, and when you mix the cocktail - because there's a lot going
on in that business, right? There's installation. It's got acquisition and
construction. There's professional services, there's maintenance, there's
managed services. There's a lot going on there.
When you put it together, what we said publicly is we believe that that's a
business that can throw off consistently margins in I'll call it the mid 20s.
It's the 27, kind of the high end of the mid 20s, but remember, that's a
business with a low expense to revenue number. It doesn't mean a lot of expense,
right? It's not R&D intensive as the product businesses are, so that when you
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get down bottom line, our objective there is an operating return on sales in the
10, 15 - back to the initial question - we want to get into the high end of that
range on the operating return on sales there. So I hear you in terms of the
trending, but there's a lot going on there, we're breaking into new accounts. In
my mind, if you think about what's the run rate for that business, mid 20s.
If we can get it up a little like we did this year, great. But the real key
there is the bottom line. We want the operating return on sales in that 10 to
15% range, and in the higher end of the range. That's what we're committing to.
JOHN DEBONO: Frank, we have a question over here.
FRANK D AMELIO: Yes.
VIJAY DORADLA, ANALYST, DEUTSCHE BANK: Vijay Doradla, Deutsche Bank. I have
three quick questions. The first is about your guidance for the back half of
'06. Just trying to understand a little more, given that Verizon is - their
targets of 110 cities by the end of the year to probably two-thirds or a little
more than two-thirds done. Sprint is around 50% done with their DO deployment,
so after the first half of '06, EO (ph) in the U.S. may not be as big, as you
mentioned earlier, may not be as big as '05. I'm just trying to understand what
you think is going to be the biggest driver in the back half of '06, given your
guidance that back half of '06 revenues are going to be slightly higher than the
first half. That's my first question.
The second is, could you quantify the Rev A, the value of contracts on Rev A,
is it going to be smaller than Rev 0 in terms of wholesale? And, finally, in
terms of IMS, our discussions with carrier contacts suggest that many of the
carriers are very interested in getting the Accentures and the IBMs involved in
the services part, because of their incumbent experience with services at the
carriers. So how do you guys see breaking into that market, given that compared
to Accentures and IBMs you may not have as much experience with carriers.
FRANK D AMELIO: So I'll answer the first two questions, and then maybe John
Meyer, maybe you can help me with - John's gone. I'll take a shot at the last
question. Maybe Pat or someone will help me.
Yes, so in terms of the first part of the question, one, just to make sure
we're clear on this, I said the second half of the year would be slightly higher
than the first half, no major - I talked about 100 million for this year, 150
for next year, and you asked me the question in the context of EV-DO. On
mobility EV-DO aside, though that will continue to be the push, we still sell
lots of other products in mobility. So we're winning lots of business still in
mobility. We've announced a bunch of new contracts. Last quarter, we announced
wins with SKYLINK in Moscow. We announced a three-year, $125 million EV-DO
contract with Leap (ph) Wireless, and we announced another win with Vivo in
Brazil. So we have a lot going on relative to the mobility business. So I want
to make sure you don't walk away thinking, because EV-DO deployment is, I called
it, going to be deployed at a more moderate rate, that somehow that business
isn't going to grow. As I said, we expect the overall mobility business to grow
in fiscal year '06, just not at the same level as fiscal year '05.
Then have some other things, I'll call them in fiscal year '06, that we
didn't have in fiscal year '05. So what do I mean? We really didn't have any
material revenues from UMTS in fiscal year '05. We expect UMTS revenues in
fiscal year '06 to increase, and that's clearly one of the things where we're
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expecting to see some uptick year over year out of our UMTS business. We talked
about growth in the services business. I continue to see and I expect that to
continue to grow. The wireline business. We expect the optical business - our
next-gen optical products have been dong extremely well. If you look at the
optical business year over year, optical grew last year. It grew form about 755
million to about 815 million. All of the growth was in next-gen optical
products, Metro Optical, Unite, Extreme, so that's what, 7%, 8%, if you do the
math. So it's all those things that we continue to expect going forward. And
there are so many new entries like UMTS, for example, where didn't have
incentives for that in our fiscal year '05 results, so it's a bunch of different
odds and ends.
Now, on the second question, on Rev A, I think it's too early, quite frankly,
to answer that question. We've announced, by the way, on the earnings call a
couple of weeks ago, that we have completed our first live, over the air, Rev A
call with Verizon Wireless. Clearly, in terms of the cadence, the progress we're
making, I think is very good, but in terms of quantifying what revenues are
going to be versus Rev 0, I don't even know how to answer that question at this
point in time.
And then on the third question on services, is there anyone who can help me
with that one? Cindy? Yes.
CINDY CHRISTY: I think what you've seen here in terms of IMS and the services
side is that we actually partner today, as you know, with Accenture and also IBM
in multiple dimensions. But the fact of the matter is, if you look at John's
slide, we're talking about being a network integrator, and IMS is fundamental to
that is the connections between the gateways, the session (ph) controls, that
kind of thing. We already have experience, frankly, in our customer networks for
their having current experiences with IBM and Accenture that we're going in now
and providing network integration and complementary to them to make sure that in
terms of the capacity, the traffic, the proxy management, the user experience,
the reliability is maintained. So I think that there will be a combination. It
will depend on a bi-customer basis and a bi-application basis. I think that we
will partner in some dimensions, and I think then we will also be the network
end-to-end integrator and I also think there will spaces like OSS, DSS and other
areas that John can expand into that would be traditionally more IT, integration
related, that he will have opportunistic chances to get in and provide services,
because he's already in on the network side.
And just one more piece in terms of the DO Rev A. I just want to add one
thing on the mobility side of DO Rev A. The key effect of DO Rev A is the fact
that it ushers in an all IP framework for CDMA and what's key there is it's
another catalyst in terms of driving the data traffic, as well as the VOIP.
Remember that our customers are driven by voice, minutes of use and capacity
skill. They've got to be as efficient as they can, from a competitive
perspective, on an OpEx standpoint.
So if you remember the 3G 1X play initially - that was voice efficiency and
then the introduction data. You're going to get a whole another run (ph) on the
OpEx on voice efficiency for DO Rev A, which will be increase that piece, and
then there will be a whole bunch of services that will be enabled, push to talk
and other areas. The other thing that I wanted to just mention about the
mobility before I let Mike (inaudible) jump in because he's the leader of the
business is the fact that on the Sprint area, you have to remember that Nextel
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and the migration of that network from iDEN to CDMA also provides us
opportunities as well, OK?
So I think that, again, that's based there. Mike, do you want to add
anything?
UNIDENTIFIED COMPANY REPRESENTATIVE: Just a couple of points. I want to go

back to the first comment about the growth in '06. While it is true the terms of
what's happening with DO, you can't just look at what's happening with Verizon
and Sprint as a bellwether of what's happening with CDMA. And, in fact, if you
look at the percent spend of their CapEx, the DO portion is relatively small.
The thing you should be looking at is what's happening with a lot of these
carriers, and I would argue that every singe one of my customers is growing
significantly. So it's a lot of spend going on just for normal earline (ph)
growth, voice and data growth in all of these networks over the next 18 months.
We are in a nice position, no matter which customer it is, whether it's here in
the U.S. or in China, South America, they're all growing very well. So we're
going to be benefiting from that as well.
And then the only other comment I want to make on DO Rev A is Cindy's point.
DO Rev A is so compelling that at lot of the operators are going to need this to
enable everything you saw today, and in '06 we're going to start introducing DO
Rev A hardware for DO that will allow the operators to start seeding the market
with the hardware so that when the software comes in at the end of '06 and the
rest of the ecosystem comes in '06, they'll be ready to go with DO Rev A. So
those are a lot of the other things that are happening below the waves that
really affect the revenue for CDMA in '06.
We're going to take one last question and then Pat's going to come up and Pat
and I and the rest of the field any other remaining questions.
Paul.
PAUL SAGAWA, ANALYST, SANFORD BERNSTEIN: OK, hi, Frank, Paul Sagawa from
Bernstein. So, you called out $500 million in non-cash elements that are
different in '06 than in '05. If you go through all the puts and takes, my
calculation would suggest that you were talking apples to apples, that you are
actually guiding towards an increase in the base underlying profitability of
these businesses by about 150 to 350 basis points. I wanted to make sure that my
calculations were large and clear in the way that you're thinking about it.
The second thing is, within that context, there are a lot of other sort of
non-cash items that flow through, such as your depreciation and amortization
relative to your CapEx, and you've had $50 million or so of random, non-cash
expenses on a quarterly basis. Now, do those things roughly stay the same in
2006? What happens to depreciation and amortization? What are your CapEx plans,
if it grows sharply in the second half of the year in 2005?
FRANK D AMELIO: Let me do the CapEx depreciation piece first, and then I'll
come back to the earnings piece. If you look at our depreciation last year,
depreciation was about 600 million, 599 million. The year before it was almost
700 million, 693 million. We expect that deprecation number of course to decline
a little bit year over year, so we went from 693 to 599. It will still trend
down a little bit in fiscal year '06, but not in any material way, 0.1.
If you look at our CapEx, if you go back a couple years on CapEx, we'll go
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back to '02 and then we'll work our way to '05. In '02, it was 449 million, in
'03, it was 291 million, in '04, it was 157 million. The reason I gave you the
history is this past year we increased CapEx spending to 221. We actually put a
little more CapEx juice into the business to certain areas where we thought we
had pulled back a little too hard. In fiscal year '06, we expect that CapEx
number to be around the fiscal year '05 number. It may inch up a little bit, but
give or take around that fiscal year '05 number.
So when you're doing the deprecation amortization, CapEx number, deprecation

will exceed CapEx by a lot in fiscal year '06. In terms of some of these other -
I'll call it incidentals - I don't expect any major material changes in any of
the incidentals that you always get on the cash flow statement. But that spread
between depreciation, amortization and CapEx, I expect that to continue.
The other thing to remember on deprecation ad CapEx is, when I gave you that
deprecation number, it was depreciation and amortization. We also do software
caps, and we've been doing that in that 55 to 60 million a quarter. So if you
want to do apples to apples, you've got to put in the software cap, plus CapEx,
and then compare that to the deprecation number, and there will still be a
spread when you finish doing that. OK.
Now, in terms of the earnings, I don't get into profitability guidance,

because there's so much that can go on, quite frankly, when you get into other
income and some of the below-the-line stuff, so what we do is we stick with the
revenue, the gross margin and the expense to revenue, and when I do that,
because I try to give you all of the information you need to do your modeling.
So, clearly, the guidance we gave, including each of the line items, takes into
account that 500 million, to your point, and what w want to do is, despite that,
take the actions I alluded to on that chart. And, once again, first and
foremost, growing the business and growing it profitably, continuing to grow
profitably, so that we can continue to improve in the operations of the company.
In terms of the translation of that to EPS, I think you gave you what you need
to do that, the revenue, the gross margin and the expenses. I think that's where
I'll leave it.
Pat, do you want to join me?
PAT RUSSO: OK, we're just going to wrap up here with any additional Q&A. Let
me just kick it off by making a couple of comments in terms of what we tried to
accomplish. Tried to take you back to what are the strategic bets that we've
been making and the investments we've been making, the priorities we've been
focusing on, and how are we doing against those bets? How do they align with
where think the growth is going to be in the market, and what are some of the
proof points around success in those areas that we think are going to help fuel
growth as we go forward, and so we shared that with you.
We've tried to talk about where we see the growth opportunities in the
context of IMS. And again, just to reiterate, we see IMS as a game changer. We
see it as influencing lots of areas beyond the specific session controls and
gateways, and we tried to articulate that with real examples in the discussion
that you had with Cindy and that you had with John, and so we feel good about
the progress that we're making in that regard, and we feel good about our
opportunity to leverage that not just in the short term. But, again, we're in
this game for the long term, over the long term. So we tried to give you a
perspective about that in more real terms with respect to its linkage to really
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grow these opportunities as we go forward.
As Frank said, we are very committed to the long-term goals that we've talked
about. We're committed to doing everything we can to drive profitable top-line
growth and so the question that was asked earlier, that means sometimes we will
walk away from business, and I think we've been pretty good at that in terms of
figuring out where, when we decide to make a strategic bet on a deal, we know
that it's going to turn into a - be financially positive over the long term. So
we're committed to driving top-line growth profitably and we're committed to
doing all the things that we need to do to continue to improve the operating
performance in the business and drive leverage to the bottom line.
So let me stop there, and then, Frank, come on back up, and we can just open
it up for any other questions for me, for Frank, for any of my colleagues that
are on your minds before we close the session. Got lots of questions.
JOHN DEBONO: Question here.
LUKE SZYMCZAK, ANALYST, J.P. MORGAN: Hi, it's Luke Szymczak at J.P. Morgan
Assets.
PAT RUSSO: Hi, Luke.
LUKE SZYMCZAK: Hi, can you talk about - I know John isn't here, but you
mentioned about two changes possibly in the business model, and I assume it's
not major right now, but just longer term, if more capital is required in the
services business, how will you approach that? And then also, you're talking
about charging for your equipment on a transaction basis. That would also change
the cash flow characteristics of your business and sort of back loading the
payments. Just how you're thinking about those things.
PAT RUSSO: OK, I'll actually ask Frank to comment on that from an overall
capital utilization standpoint, but I think, if I remember what John said, what
John was trying to point out is that we are, as we go after managed services
opportunities, we are willing and I think have demonstrated in some cases, our
willingness to take over operations. What he said is that we've stayed away from
those opportunities that require putting capital in, if you will, in some shape
or form for whatever, and that can vary, as we've observed some others to do.
And we've been very careful about that, because as Frank will tell you, we're
very scrutinous with respect to what we do with our capital, how we deploy it
and what kind of returns we get. Having said that, we do see an opportunity over
the long term in the managed services area, and we're trying to be very
selective and focused about what do we go after and how do we win without
necessarily having to put up a lot of capital do that.
FRANK D AMELIO: Yes, all I would add to that, Luke, is philosophically our
objective is to use other people's money. Nothing's changed relative to
philosophically what do we want to do when we're working these kinds of deals.
If at all possible, we want to use other people's money. In terms of you see
more comments back to Ken's question about price (ph) margins. In my mind,
whether it's margins, or whether it's asset purchases or whatever, what we need
to do is evaluate the transaction, look at the value proposition and determine
if it's a good use of our capital relative to how we choose to deploy capital,
always knowing that the underpinning for something like that is our strong
desire, our strong objective, is to always use other people's money wherever we
can. So that's how I would answer the question.
Page 62
PAT RUSSO: And I think the only other thing I'd say is in a host of
applications models, to the extent that you're leveraging enough (ph) for
multiple application services, you can develop a pretty efficient model with
respect to being able to host the service for multiple customers without
necessarily duplicating anything. And so we see an opportunity there with some
obvious upfront investment, but there's a real opportunity to leverage that if
we can capture multiple opportunities.
FRANK D AMELIO: I guess the only other thing - I'm sorry. Our job is to
create such compelling value propositions that it operationally works. You heard
John's comments about the computer industry and how that became more of our
cause from a financial value proposition. We want an operational value
proposition that can sell something (ph). That's what we want. That's what we're
working on delivering.
PAT RUSSO: Yes, that's a great way to put it.
JOHN DEBONO: We have a question up here.
UNIDENTIFIED AUDIENCE MEMBER: It's (inaudible) again. Actually, one, an

observation, which is thank you guys very much for phenomenally good
disclosures. I really want to thank you and recognize you for it. You're head
and shoulders above the rest of the rest of the industry and it's a nice thing
to read your Ks and your Qs.
FRANK D AMELIO: You want to repeat that?
UNIDENTIFIED AUDIENCE MEMBER: We could you compare you to some of your peers,
but I'm going to try not to do that.
PAT RUSSO: Thank you for acknowledging us.
UNIDENTIFIED AUDIENCE MEMBER: I have a clue where the money comes from. Let
me put it that way. One other question, because the last couple quarters, you've
had some improvements in the margin because of less-than-expected losses on some
of these contracts or some of these longer-term services contracts, per the last
question. I think that's a good thing. That's you're conservative to start with
and then they're turning out to be more profitable than you thought. Can you
talk through both financially, Frank, and then from a business perspective, how
are these things flowing through? I know you don't want to give contract lives.
What are these? How long are they running for? Why the improvement, and how many
other contracts have you been conservative on, where do you feel you are just on
that process?
FRANK D AMELIO: So what's really driving this, and use my words, and then
I'll answer the question specifically, it's really been revised estimates, the
favorable impact of revised estimates on certain long-term contracts. What we're
really getting into is percentage of completion accounting. It's really what's
driving it, and what you get into is every quarter you've got to go through your
inventory with POC contracts and do what we call an estimated completion. And
when you do an estimated completion, what happens with POC contracts, if you
have an increase in the margins, to your point, Steve, you not only - you don't
correct that thing going forward, you literally do a retroactive adjustment and
catch up in period. You go back kind of since inception, catch up, and then
going forward, you put the new gross margin in. So we've had some favorable
adjustments over the last couple of quarters and we've called those out.
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We have not - please don't think that we're conservative. We try to do our
best estimates of what we believe those EACs are on every one of our POC
contracts. We always try to do the best we can relative to what we think the
margin is. But Cindy said something before, which I want to connect back to,
which is when we sign one of these long-term contracts, right at the get-go,
we're fanatical about how do we improve the cost structure and how do we make
the contract more financially improved? And it's really the operational - doing
better than what we planned for operationally on the cost saving that we have to
occasionally true up for relative to our accounting.
We do the best job that we can, we do it as accurately as we can, but

sometimes, quite frankly, the cost reductions are even better than we had
planned for, and that's what could result in an EAC adjustment where you get the
list, not only kind of going forward, but in the quarter and because they're
retroactive adjustments it could have a fairly significant impact on the gross
margin.
PAT RUSSO: I would just add from a business standpoint, what we try to do -
there's a lot of variables, all right? One is how important is the footprint,
where is it? What do we believe about what we'll be able to do in terms of cost?
What do we believe about the opportunity and size of the growth potential? I
mean, we spend, I think, a lot of time looking at deals through lots of
different lenses with respect to the financial attractiveness of the deal, and
in the end, quite frankly, I mean, I feel good about the various impacts we've
had. In the end, it's judgment, and I would say there are categories. Some are
very clear, we're never going to make this back, no matter what, and therefore
there's really no reason to do it, and we're willing to forgo the top line for
no bottom line, in fact, potentially a loss. Others are it's pretty clear it's
going to be positive, and then sometimes you end up making judgments. As I look
back on some of the things we've done, I feel pretty good about the judgments
we've made in terms of our ability to improve on those things that we weren't
quite so obvious at the time that turned out to be the right thing to do.
FRANK D AMELIO: And then, Steve, on the how much part of your question, I
think the way I'll answer that is we disclosed give or take about a quarter of
our revenue is POC accounts, so that gives you a feel for how much revenue we're
running through the books on a quarterly basis that's POC accounting.
JOHN DEBONO: We have a question over here.
INDER SINGH, ANALYST, PRUDENTIAL: Yes, thanks, Inderbir Singh with

Prudential. Just wanted to follow up on something we heard from one of your
competition yesterday and some of the actions they've taken over the last couple
of months. I guess two years ago, Pat, you started going into the services
business and really pushing that as a growth opportunity. Here we are, for next
year, you're guiding for 10% growth of that business potentially, so it's
starting to materialize. About a year ago, I think you started talking about
IMS, we're starting to see you see some wins there now. It looks like to me your
competitors are doing some acquisitions to maybe catch up in some areas around
conversions. Do you think that you have a sustainable head start here on the IMS
side? Do you think that you still need to do some acquisitions to maybe beef
your opportunities in IMS. And then a question for you, Frank, on that. As the
business shifts toward what looks like on the wireless side more
software-centric line card sentencing (ph), potentially, as you go into Rev A
and beyond, you see the margins improving and the mixes moving on top of the
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revenue growth you talked about.
PAT RUSSO: I'll start on do I think we have a lead, a sustainable lead. I

think without question, and let me tell you why. These announcements we just
named have been in the making for two years. I mean, when you start thinking
about the architectural discussions, the portfolio discussions, the new services
to be created, the agreements around the trial, the features needed, the trials
done and executed, the integrations done, yes. And so I can't comment on where
everybody else is with respect to conversations going on with some of the large
customers, but I think there's no question that we have a lead in mind share, in
the technology, the enablement of the IMS capabilities and in the contracts. So,
what's our job? To extend that lead, right? Our job is to make sure at a minimum
that gap doesn't get closed and we say as these next-generation services will
lap. And, further, to move the 43 trials we have into more contracts and into
more revenue. But I really do believe we have a distinct lead in the market and
our job is to take advantage of it.
FRANK D AMELIO: On the gross margin piece of the question, Nikos a similar
question during Cindy's presentation, so I think I'll answer it similarly, which
is it's hard to call out what the gross margin is for IMS, simply because of I
what I call the cocktail index. When you do an IMS deployment, it's not just
products, it's products an applications and services and it will very much vary
from the point of the deployment. So to try to say therefore the margins will be
there, so that they'll be up and down, it's hard to do.
So, from my perspective, what we're trying to do is, as best we can, capture
that in our guidance statement for '06, although I said, there won't be material
revenues for fiscal year '06, and beyond '06, make reasonable assumptions and
capture that in our long-term process, and that's what we're trying to do at
this point. To the extent that that gets clearer and there's more clarity, then
we'll revisit our assumptions and see what we need to do, but for the time
being, we've done the best job we can of that to try to capture that in our
forward statements.
JOHN DEBONO: I have your next question here.
USMAN QURESHI, ANALYST, HSBC: Yes, this is Usman Qureshi over at HSBC. I have
two quick questions. The first one is in the infraction (ph) space, which is
generally guys with lower gross margins, and then when it comes a time where
Lucent has to say no to a deal because it doesn't meet the financial message
that you would want, what is the result of the competitive analysis that you
would make, what is it with - is it because of the parted (ph) cost, higher
parted cost in the international deals that you will say, OK, that you would
want to lose that deal or you're not going to go ahead of that deal?
FRANK D AMELIO: I'm sorry, what state? I didn't hear the ...
PAT RUSSO: In any space?
USMAN QURESHI: I meant, yes - I'm talking about emerging markets license
deals where it's generally characterized as lower gross margin, and where you
have to say no to a particular deal because it doesn't meet your financial
metrics, what does it come down to in terms of a competitive analysis that you
make? Is it because of higher spot (ph) cost and dilutions (ph) that you have to
say no to a deal, or what is it, where is it? That is question number one. And
question number two that I have is in my discussions with other vendors, I have
Page 65
found that the deployments in the wireless VOIP space is growing faster as
compared to wireline voice, and Cindy said that there are some OpEx savings to
be had, so I'm wondering why there is the differential. Is that what you're
experiencing yourself in terms of the growth potential between the wireless VOIP
and the wireless?
PAT RUSSO: OK, I'm not sure I can answer the second question. Cindy, did you
hear that? We'll come back to the first one. In terms of wireless voices going
faster than wireline voice.
CINDY CHRISTY: I would say definitely because there's no such thing as

wireless VOIP space.
USMAN QURESHI: In terms of wireless players picking up VOIP faster than the
wireline players.
CINDY CHRISTY: But again - today, there's wireline VOIP that's available
today. You ill not have wireless VOIP until you have HSDPA and the enhanced
uplink 306 (ph) and DO Rev A for CDMA. Now, in terms of what I didn't think you
were referring to, is the IP-enabled services. We have always said that IMS has
been largely driven by the mobile carriers and the mobile customers in terms of
the integration, the data, the high-speed data that peaks, which is why on the
wireline side, they're looking at the three dimensions I talked about earlier in
terms of the investment piece that's around the portability, the application
space, and the video distribution to differentiate. But again, I think that it's
a couple of things. I'll answer the first question, too.
In terms of the markets, it depends on a by market basis where it will grow.

We're not necessarily always in trouble in terms of cost structure in our
portfolio. That's not always the case. Take a look at where do we have people
embedded? What would it take for us to be in that country? What's our current
structure of people that we have there? Does John have services there today, or
do we have to deploy? What would we have to do for localization of talent? What
is the growth trajectory. Has this customer said this is a million-line deal and
I'm going to renegotiate the next million lines so they've taken all the growth
out for me in terms of the long-term potential, and so it really depends on what
the Ts and Cs are of the contract, what would be the forward (ph) structure that
we'd have to put in place that we don't have today, or cost structure, and then
strategically is this a place we want to be.
I hate to be so nebulous, but it depends on regions. The other thing you need
to understand is that we have a full portfolio that there's certain areas that
we have built products specifically for countries to be - they don't need the
redundancies. They don't have the same quality requirements that the U.S. has.
They don't have the same SEC (ph) type testing, and so we have different types
of products that we put into different markets in order to be able to be
competitive and maintain cost structures. So we don't just take the same product
and cookie-cutter it in. It really depends on that as well, too.
So unfortunately there's no one key answer, there's no silver bullet, but I

will tell you that we take a look at that in aggregate end to end, and when we
walk, we typically walk away because we haven't been able to make either the
strategic requirement, the financial requirement, the technical requirement and
the market requirement, and we've said that this is not part of our fundamental
top five that we have to go after, and therefore we would rather reinvest that
effort into other areas than go after this deal, because of the long-term
Page 66
things. On your second question, in terms of the mobility piece, I do think that
IMS, IT services will be led in mobility because of the need for anytime,
anywhere, communications, but I do think you're going to start seeing the
conversion of the two, and I think that with the advent of Ethernets that I
talked about earlier today, the IP TV and the broadband television, the wireless
piece in terms of DO Rev A and enhanced uplink. You're going to see now the
underpinnings of the enabling technologies there, for our customers to days, OK,
what's my business model, where do I want to target and how am I going to
differentiate to win, and we're going to surround that with our services and our
market advantage program to help this drive the business model, and I think
that's where the value can come.
FRANK D AMELIO: The only other thing I want to add to Cindy's comment is one
characteristic in terms of when are there times when we're walking away from
business is when price has no correlation to cost.
SIMON LEOPOLD: Thanks, Simon Leopold from Morgan Keegan. Like to see if you
could comment on competitive trends, in light of, as Frank alluded to just now,
pricing and operating efficiency, considering one of your competitors recently
reported a gross margin quite a bit below yours. Another one recently took down
its forecast for operating margins, a high single digit kind of number. What are
you seeing and how are you thinking when you compare yourself for benchmarking
as for what are the pressures, where you want to be and why you're different
from those peers?
PAT RUSSO: Well, depending on who you're talking about, some of it may have
to do with choices about contract opportunities, but I think what we're trying
to do, as you look at our portfolio, is participate in markets that offer growth
opportunities, and in value-creating opportunities, in part because of our focus
on margins. So when we talk about access, you don't hear us talking about
competing at the low end, sort of commoditized segment of that market. You hear
us focused on the high-value, triple, quadruple play, linking to IMS, next gen
platforms for WiMax, GPON, et cetera, where we believe there is value-creating
potential and margin potential. So I think as you look at companies, one of the
things to look at, of course, is what is the portfolio? Is it diversified, is it
not diversified? Is it heavily weighted into lower margin or higher-pressured
areas, if you will. Access happens to be one.
I think you have to look at what is our reputation with respect to deals that
we do, right, and I think we've been pretty clear about our focus on profitable
top-line growth and making, we hope, well judged decisions about where we will
go after business and where we won't go after business, and you have to be
willing to forego the top line impact of that, right? You have to be willing to
forego that and then explain why maybe you don't' have a half a point of growth,
because you decided you really can't ever make money at it. So I think in our
case, we're working hard on portfolio diversity. We're working hard on our cost
structure and we're working hard on value creation because we're all about
margins in the area that Frank has described. Do you want to add anything?
FRANK D AMELIO: No, I mean, I think that answered the point. One last
question, please.
UNIDENTIFIED AUDIENCE MEMBER: (inaudible) from Lehman Brothers, again. I have

a question on IMS and the circuit switching world. It seems in the circuit
switching world, the (inaudible) regionalized. They are big players in North
Page 67
America, they have big players in Europe, and in the IMS world do you think it's
going to be similarly regionalized, and what's the barrier to entry for new
suppliers against incumbent, and could you comment on that, and also most of the
contracts that you are now in IMS, they are the North American service
providers. What's the timing for us to expect announcement with, for example, a
leading European PGT (ph)?
PAT RUSSO: First of all, I'll give you my view, and then Cindy or John, any
of you guys jump in here. I think the relationship between incumbency and
circuit switching and IMS is much less tight than technologically is much less
tight that anybody would think. And the reason is because most of the embedded
customers are looking to get out of their legacy equipment and get into the next
generation architecture. And so the leveraging of the base is about
relationships, confidence and trust, to some degree, and less about I've got
this real hook technically that is going to make a big difference.
Now, we're doing some things with IP log and our access vehicle, because
there's opportunities, but I wouldn't expect that you're going to see as much
regional IMS linkage as we saw in the circuit base. Do you agree with that guys?
John?
JOHN GIERE: Yes, I think you've hit every part, and then I would only add one
more point. In IMS the fundamental element of it is the service orchestration.
So as you go into - as we try to demonstrate, these blended services, you're
doing fundamental transformation of your business model, fundamental
transformation of your operational model. So, to look at it as, well, the world
started out in circuit for many decades at these percentage market shares,
that's not how it's going to be moving forward. It's going to be a market that's
more open, provides more flexibility in the network, and everyone's going to
compete. And as Pat alluded to, there are certainly some incumbent advantages in
certain elements of the line access, gateway, and elsewhere. But if you're going
to achieve the service creation environment you ant to do, you've got to go from
timeframes of 10,11, 12, 13 months for preparation down to one, two, three
months of preparation, and there are lot of other types of things that are
fundamentally transforming the model, which gets less regional and really more
about market users.
PAT RUSSO: Yes, and the only other thing I'll say is remember, we also have a
large base for circuit switching outside the U.S., in Europe, in Asia, in China.
And the other thing I would point out is, I think I said we announced seven IMS
contracts. Four of those are outside the U.S.
FRANK D AMELIO: Three are outside the U.S., four in the U.S.
PAT RUSSO: OK, sorry.
FRANK D AMELIO: In Europe, we announced Metia in '02, we announced a sub of

China Unicom, and then the four in the U.S. is Sprint, SBC, Cingular and
BellSouth.
PAT RUSSO: And our trials are globally spread as well.
FRANK D AMELIO: Just one other point, just to follow up and punctuate what
Pat and John said. Footprint is always good. Forget about whether it's regional
or not. Footprint is always good. Incumbency is a wonderful thing, because
usually you've got to screw up t get booted out, and on our IMS structure, to
Page 68
the extent we control the hearts and the brains of the network, which is what
Cindy talked about before, we should be able to parlay that into lots of value
for our customers and lots of value for our company.
OK, Pat, do you want to wrap up?
PAT RUSSO: Listen, let me just close by thanking you for your time, for your
attention, for your good questions, and we'll follow up on any other questions
you have through the IR team. We'd be happy to do that, but thanks for spending
time with us today.
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EXHIBIT 19
FOXNews.com - Alcatel, Lucent Announce $13.4B Merger - Business A... http://www.foxnews.com/printer_friendly_story/0,3566,190222,00.html
Alcatel, Lucent Announce $13.4B Merger

Monday , April 03, 2006
PARIS —
ADVERTISEMENT
France's Alcatel SA (ALA) will acquire rival telecom
equipment maker Lucent Technologies Inc. (LU) in a
$13.4 billion (11.1 billion euro) stock swap that would
form an industry powerhouse with a product line broad
enough to entice customers in a consolidating telecom
industry.
Company leaders said Sunday they plan to shed 10

percent of the combined work force — about 8,800
jobs — after the deal closes.
The combined business, to be based in Paris, will

work to capitalize on fast-growing converged offerings
such as "triple-play" Internet, phone and TV packages
that have become popular in the telecom field, the
companies said.
The new company will have annual sales of $25 billion

(21 billion euros) — ahead of LM Ericsson's $19.9 billion (16.4 billion euros) — and an 18 percent share of the
fiercely competitive market for telecom gear.
The tie-up will generate annualized pretax savings of $1.7 billion (1.4 billion euros) within three years, the
companies said. Just over half the savings will come from job eliminations, with the rest by consolidating
purchasing, research and development and support services such as sales and marketing.
The combination should add to per-share earnings in the first year, excluding restructuring charges expected to
total about $1.7 billion (1.4 billion euros) and asset writedowns.
"Lucent was sooner or later going to have to do something to address the scale of their operations" to stay
competitive, said George Calhoun, a business and technology professor at Stevens Institute of Technology. He
said Alcatel needed "to become an A-list infrastructure company in the U.S. market."
The new Alcatel-Lucent — whose new name is to be announced later — should be better equipped to weather
both intense competition in the telecom equipment market and pricing pressures from larger telecom service
providers emerging from a new wave of consolidation.
The deal comes as the industry's major U.S. customers have been rapidly consolidating the telecom field. In the
past year, the former SBC Communications Inc. bought AT&T Corp., while Verizon Communications Inc. acquired
MCI Inc. Last month, AT&T Inc. — the name SBC chose after buying AT&T — proposed a $67 billion deal for
BellSouth Corp.
"The newly formed company will be a key player in several key telecom markets," including services and wireless
network equipment, Prudential Equity Group analyst Inder Singh wrote in a research note.
With about one-third of revenues coming each from North America, Europe and Asia, he wrote, the new company
will have a geographic reach few competitors could match, likely forcing other mergers.
The companies said the deal's goal is significant growth in revenues and earnings based on "market
opportunities for next-generation networks, services and applications."
Lucent CEO Patricia Russo, who will head the combined company from Paris, told analysts during a conference
call that in product and service areas where growth is expected, "the combined company will be either No. 1 or
No. 2."
1 of 3 12/28/2008 2:14 PM
Alcatel Chairman and CEO Serge Tchuruk will become non-executive chairman.
Alcatel and Murray Hill, N.J.-based Lucent had tried to merge once before, but talks ended without a deal in
2001.
This time, Tchuruk told the analysts, it was "the right time, the right solution, the right companies."
The 14-member board of directors will include Russo, Tchuruk, five of the current directors from each company
and two new independent European directors to be mutually agreed upon.
Though Lucent and Alcatel sought to depict the deal as a "merger of equals," Alcatel shareholders will hold about
60 percent of the new company and Lucent shareholders 40 percent under the terms of the transaction.
Lucent shareholders won't see a premium over the current Lucent share price, which peaked at $84 before the
telecom bubble burst. However, according to Singh, they will benefit from Alcatel assuming Lucent's pension and
health-care obligations, which cover about 235,000 retirees and spouses.
Lucent shareholders will receive 0.1952 of an Alcatel American Depositary Share for each common share they
own — worth $3.01 (2.48 euros) at Alcatel's Friday closing price of $15.40 (12.71 euros).
Lucent closed at $3.05 (2.52 euros) per share Friday, slightly above the offer value, but Chief Financial Officer
John Kritzmacher said Lucent shares had risen recently on expectations of a deal.
"This is a very fair and equitable deal for Lucent shareholders and Alcatel shareholders," he said during the
conference call.
Calhoun noted shares of both companies have risen since word of the deal leaked, an unusual outcome
indicating Wall Street likes the combination.
Paris-based Alcatel has more revenues and employees, but Lucent is slightly more profitable. No details were
given about where the job cuts would be, but Russo pledged to "take a fair and balanced approach."
The deal, which is set to be completed in six to 12 months, has been approved by the boards of each company
and requires regulatory and governmental reviews in the United States, Europe and elsewhere, plus approval of
both companies' shareholders.
To address U.S. security concerns about Bell Labs, the Lucent research arm that does sensitive work for the
Pentagon, Alcatel and Lucent announced plans to form a separate, independent American subsidiary managed
by a board of three American citizens vetted by the U.S. government.
Because of the recent Dubai ports controversy, Singh wrote, "we may see some lingering issues in Washington
in regards to foreign investments."
He expects an extended review by the U.S. Committee on Foreign Investment, but no major antitrust issues.
The companies appear to have resolved a standoff over Alcatel's satellite activities, which Alcatel had planned to
transfer to Thales SA in return for increasing its stake in the French defense electronics company.
The Thales deal, designed to answer French government concerns over sensitive military technologies, hit a
snag when European Aeronautic Defence and Space Co. demanded its own Astrium satellite unit be included in
the operation — with the reported backing of French President Jacques Chirac.
But the Alcatel-Thales satellite deal is now poised to go ahead without EADS, a person familiar with the talks
said. Thales said it had called a board meeting Tuesday to examine "a project aimed at developing Thales and
strengthening the existing partnership between Thales and Alcatel."
The person asked not be identified because the negotiations are confidential; a government spokesman declined
to comment.
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EXHIBIT 20
EXHIBIT 21
Page 1
1 of 1 DOCUMENT
The Associated Press
June 29, 2006 Thursday 9:57 PM GMT
Tom Ridge joins Iridium Satellite's board as a

director
BYLINE: By ELLEN SHENG, Dow Jones Newswires
SECTION: BUSINESS NEWS
LENGTH: 483 words
DATELINE: NEW YORK
Tom Ridge, former secretary of the U.S. Department of Homeland Security, this
week joined the board of directors at Iridium Satellite LLC.
The Bethesda, Md., firm supplies satellite communications to corporations and

government agencies.
Ridge "brings a unique set of skills," said Dan Colussy, Iridium's chief
executive, in an interview. Ridge's knowledge of homeland security, from
national as well as state and local levels, "could be important to us as we move
forward, grow the company and move into new strategic areas," Colussy said.
Ridge held the post of secretary of the newly created Department of Homeland
Security soon after Sept. 11, 2001, until he left the post in early 2005. Prior
to that, he was governor of Pennsylvania from 1995 to 2001 and a Congressman
before that.
With Ridge, Iridium will now have eight members on its board of directors. He
is the company's first independent board member.
Iridium's technical capabilities "has impressed upon me the key role this
service can play in our nation and in the world," Ridge said in a statement.
In addition to his involvement with Iridium, Ridge is also a director on the

boards of Exelon Corp., Home Depot Inc. and Savi Technology, which was just
acquired by Lockheed Martin Corp. He is also on the government advisery board at
Lucent Technologies Inc.
Privately held Iridium has a fleet of 77 satellites around the world.

Formerly a unit of Motorola Inc., the company sought bankruptcy court protection
in 1999 after it failed to sign up the millions of subscribers it had hoped for.
Since emerging from bankruptcy protection in 2000, Iridium has become

profitable. In May, the company reported first-quarter earnings before interest,
taxes, depreciation and amortization of $12.6 million, a 73.2 percent increase
Page 2
Tom Ridge joins Iridium Satellite's board as a director The Associated Press
June 29, 2006 Thursday 9:57 PM GMT
from the same period a year ago. Revenue rose 8.2 percent to $50.9 million.
Colussy said the company is planning to refinance its debt later this year
and is still considering an initial public offering, but not anytime soon.
Also Thursday, Iridium Satellite, establishing a strategic relationship to

help the U.S. government monitor ocean conditions, announced it will provide
satellite data links needed to create and potentially expand a new tsunami
warning system.
The initial contract covers only portions of the Pacific, but the company
said the National Oceanic and Atmospheric Administration hopes to expand the
system with the assistance of some Asian countries and eventually, the goal is
to replicate it in other parts of the world.
Also cooperating in the project is Science Applications International Corp.
The Government Accountability Office earlier this year issued a report that
was critical of U.S. tsunami-warning efforts and urged steps to eliminate
various deficiencies.
The GAO said, among other things, that better coordination is needed with
state agencies and fixes are necessary to reduce false warnings.
LOAD-DATE: June 30, 2006
LANGUAGE: ENGLISH

All Rights Reserved
EXHIBIT 22
Your Search Results
To view the filing details, please click on a row in the search results. The filing details will open in a new browser
window.
You may also refine your search or perform a new search. For a description of the search results grid
functionality, click here.
You searched for:

Client Name: Iridium Government Entity Contacted: Homeland Security, Dept of (DHS)
Disclosure Home
1 of 1 1/8/2009 12:30 PM
EXHIBIT 23
Page 1
22 of 62 DOCUMENTS
Washington Technology
November 2, 2006 Thursday
Deloitte recruits Ridge for state government

practice
BYLINE: Ethan Butterfield, Staff Writer
SECTION: DAILY NEWS Vol. 1 No. 1
LENGTH: 205 words
In a move to enhance its state government practice, Deloitte and Touche USA
LLP has hired Tom Ridge, former two-term Pennsylvania governor and first
secretary of the Homeland Security Department, as a consultant.
As a senior adviser to Deloitte's U.S. State Government Practice, Ridge will

counsel clients on major issues and other challenges facing governors and state
governments.
Ridge will advise states on ways to deploy IT to improve government services,

enhance education and boost states' abilities to serve those in need.
Ridge, a Vietnam veteran, began his public service career as assistant

district attorney in Erie County, Pa. from 1980 to 1982. He then was elected to
the U.S. House of Representatives, where he served six terms.
Ridge was elected governor of Pennsylvania in 1994 and served two terms. He
left his position in 2001 to become an assistant to the president at the new
Office of Homeland Security. When the Homeland Security Department was formally
launched in 2003, Ridge became its first secretary.
Deloitte and Touche USA is a subsidiary of Deloitte Touche Tohmatsu, New

York. Deloitte Touche Tohmatsu. The parent company has about 121,283 employees
and had annual revenue of $18.2 billion in fiscal 2005.
LANGUAGE: ENGLISH
Copyright 2006 Post-Newsweek Media, Inc.

All Rights Reserved
EXHIBIT 24
About Deloitte - Deloitte LLP http://www.deloitte.com/dtt/section_home/0,1041,sid%253D2250,00.html
About Issues Services Industries Insights Centers Events Press Alumni Careers Contact
Global > United States > About Deloitte
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Awards & Recognition Serving our clients
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Deloitte Foundation financial advisory, risk management, and tax services to selected clients. These
Deloitte Life firms are members of Deloitte Touche Tohmatsu (“DTT”), a Swiss Verein. Each
member firm provides services in a particular geographic area and is subject to
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which it operates. DTT helps coordinate the activities of the member firms but
Growth Through Acquisition does not itself provide services to clients. DTT and the member firms are
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and may secure the provision of professional services in their territories through
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In the United States, Deloitte LLP is the member firm of DTT. Like DTT, Deloitte
LLP does not provide services to clients. Instead, services are primarily provided
by the subsidiaries of Deloitte LLP, including:
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Deloitte Consulting LLP
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Deloitte LLP helps coordinate the activities of these subsidiaries. Deloitte LLP and
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EXHIBIT 25
EXHIBIT 26
Judy Sarasohn - Discover America Partnership Lands Ridge - washington... http://www.washingtonpost.com/wp-dyn/content/article/2006/12/20/AR...
Discover America Partnership Lands Ridge

By Judy Sarasohn
Thursday, December 21, 2006; A27
If a travel industry group wanted a big name with big credentials to speak up for opening U.S. borders to let in
more business and recreational travelers, it couldn't have done much better than former homeland security
secretary Tom Ridge.
And that's just who the Discover America Partnership got.
"It's a huge coup for us. There's no more credible source," Geoff Freeman, executive director of the Discover
America Partnership, said yesterday.
The group wants Ridge to evaluate the entry process -- difficulties real and perceived with getting visas and
going through airports -- and to propose strategies for a better balance between security and open doors.
Freeman declined to say how much the group is paying Ridge.
The coalition and its multimillion-dollar advocacy campaign were launched in September to help boost the
number of visitors by 10 million a year. Since Sept. 11, 2001, there has been a 17 percent decline in overseas
travel to the United States, the group said.
Ridge said that he doesn't do lobbying, but that he will help devise "a tactical plan of which lobbying may be a
part."
"Our borders are where our security and future prosperity intersect. The borders are getting more secure, but
the doors are not opened enough," Ridge said. "We're not viewed as easily accessible because we're not."
Some of the coalition members are Steve Porter, president of the InterContinental Hotels Group, the
Americas; Joseph A. McInerney, chief executive of the American Hotel and Lodging Association; Roger
1 of 3 1/6/2009 11:21 AM
Dow, chief executive of the Travel Industry Association; and Jay Rasulo, chairman of Walt Disney Parks and
Resorts.
McCurdy Is Making a Move
Dave McCurdy, a Democratic survivor of the Republican K Street Project, is moving from the Electronic
Industries Alliance to become president of the Alliance of Automobile Manufacturers.
McCurdy, a former Democratic House member from Oklahoma, will take his post Feb. 12, succeeding
Frederick L. Webber, who is retiring.
In 1998, Republicans tried to pressure the EIA into hiring a fellow Republican instead. Some GOP lawmakers
told their staffs not to meet with EIA officials, and they delayed passage of legislation that the EIA supported.
Republicans were unsuccessful then -- McCurdy became chief executive of the EIA -- and the House ethics
committee privately chastised then-Majority Whip Tom DeLay (R-Tex.) for threatening retaliation.
McCurdy was unavailable to comment on his new appointment, a spokeswoman for the auto group said. Nels
Olson of Korn-Ferry International helped with the executive search.
Among the alliance's issues: The industry wants to avoid what it considers congressional meddling in
government regulation of safety standards.
The alliance represents the BMW Group, DaimlerChrysler, Ford Motor Co., General Motors Corp., Mazda,
Mitsubishi Motors, Porsche, Toyota and Volkswagen.
Shepherd Heading to Venable
Not to be outdone by other law firms snagging Hill investigator types for the much-anticipated oversight
investigations in the Democratic-controlled Congress, Venable has signed one up, too.
Raymond Shepherd III, chief counsel of the Senate Permanent Subcommittee on Investigations, is moving to
Venable next month to be head of the law firm's new congressional investigation group.
Before going to work for Sen. Norm Coleman (R-Minn.) at the subcommittee, Shepherd was oversight
counsel at the House Energy and Commerce Committee.
Shepherd was involved with the panel's 25 hearings on such topics as abusive tax shelters, the United Nations
oil-for-food program and the USA Patriot Act.
"I've seen a lot of companies prejudiced by counsel not knowing what Congress wants" and not realizing there
are few rules that govern congressional investigations, he said.
Shepherd, who also will do some lobbying, will be covered by the one-year ethics ban from contacting former
Senate colleagues.
Karl Racine of Venable said that Shepherd is a "special catch," particularly because the Coleman panel was
known for its bipartisan approach.
Lobby Shop Takes a Left Turn
Johnson, Madigan, Peck, Boland & Stewart has had strong Democratic -- and Republican -- credentials
for years, and now it's getting a little more Democratic.
2 of 3 1/6/2009 11:21 AM
Jonathon Jones, a longtime aide to Sen. Thomas R. Carper (D-Del.), most recently as chief of staff, joined the
lobby shop Monday. Jones also helped create the Third Way, a centrist think tank, or "strategy center," for
Senate Democrats.
David Johnson, a former executive director of the Senate Democratic Campaign Committee, said of Jones's
work with Carper and Third Way: "In the Senate you have to have enough in the middle to get anything
done."
Jones is covered by a one-year ban on lobbying Carper or his staff.
Here and There
Also moving about town . . . Howard Waltzman, chief counsel for the House Energy and Commerce
Committee, is leaving the Hill for Mayer, Brown, Rowe & Maw as a partner in the law firm.
Scott Gottlieb, deputy commissioner for medical and scientific affairs at the Food and Drug Administration, is
leaving Jan. 16 to rejoin the American Enterprise Institute.

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3 of 3 1/6/2009 11:21 AM
EXHIBIT 27
Page 1
5 of 23 DOCUMENTS
PR Week (US)
February 5, 2007
US travel execs unite to boost foreign visitation

BYLINE: Ted McKenna
SECTION: Pg. 2
LENGTH: 333 words
WASHINGTON: A coalition of US travel and tourism executives recently unveiled

a campaign to promote legislation that would better attract foreign visitors.
The Discover America Partnership (DAP), as the coalition is called, announced

its 'Blueprint to Discover America' at a January 31 morning press conference.
Among the group's objectives are making the application for visas overseas
faster and simpler, speeding up the processing of international travelers
entering the US, and creating a plan to improve the image of the US in certain
countries.
The press conference was followed by a related hearing later in the day by
the US Senate Committee on Commerce, Science, and Transportation, where
Discovery America members served as witnesses.
'It's not very often that the wheels of Congress move that quickly; that you
release something at 11am and then you've got a commerce committee hearing at
2:30pm,' said Geoff Freeman, DAP executive director.
Freeman said efforts to promote the proposed travel reform would involve
traditional grassroots outreach to the various associations allied with his
group, including the National Restaurant Association, the Travel Industry
Association, and the Destination Marketing Association International.
Fleishman-Hillard is assisting with media relations for the effort, while

Monument Policy Group (MPG) is providing strategic counsel and lobbying. Former
Department of Homeland Security (DHS) director Tom Ridge is also a consultant
and will help promote DAP's aims publicly.
'The people who care about this are not just the tourism crowd,' said MPG
partner C. Stewart Verdery Jr., a former DHS assistant secretary for policy and
planning who led deployment of the US-VISIT entry-exit program for foreign
visitors.
'It's (also) companies trying to bring people in for business relationships,

to sell things, or hold conventions,' he added. 'Anyone who is an American
should care about the public diplomacy value of bringing people in to experience
the country.'
Page 2
US travel execs unite to boost foreign visitation PR Week (US) February 5, 2007
LOAD-DATE: February 5, 2007
LANGUAGE: ENGLISH
JOURNAL-CODE: PRWUS
Copyright 2007 Haymarket Publishing Services Ltd.

All Rights Reserved
EXHIBIT 28
Fleishman-Hillard - International Advisory Board http://www.fleishmanhillard.com/client-solutions/international-advisory-...
International Advisory Board Guest Appearances
Thought Leadership From Around the Globe

Fleishman-Hillard offers access to
Fleishman-Hillard's International Advisory Board is a powerful client members of our International
resource that brings together an array of distinguished thought leaders Advisory Board (IAB) for client
from the private and public sectors. counsel. The IAB's industry
specializations and backgrounds
In addition to providing strategic counsel to our staff and clients, these provide information, counsel and
resources at the most senior levels of
Fleishman-Hillard ambassadors: business and government.
Author Op-Ed pieces.

Serve as guest speakers at client events.
Participate in meetings with clients and prospects. For More Information
Provide counsel to clients — in person, via video, or through
calls to decision-makers.
Our roster of global advisers includes: North America

Paul Johnson
David Byrne Gen. Barry McCaffrey Washington, D.C.
Former European commissioner for Health National Security and Terrorism Analyst for 202-828-8818
and Consumer Protection, NBC News Contact Me
Special Envoy to the World Health
Organization Sir Christopher Meyer
Former British ambassador to the United Print page
Andrew Card States
Former White House Chief of Staff
John Onoda
Anna Chennault Former Senior Communications Executive
Chairman of CIC, Inc. of Charles Schwab, Visa USA, General
Motors, and Levi Strauss & Co.
Admiral Vernon Clark
Former Chief of U.S. naval operations Leon Panetta
Former White House Chief of Staff
Keki B. Dadiseth
Former Chairman of Hindustan Unilever and Tom Ridge
former Director of Unilever’s Home & Former Pennsylvania Governor and
Personal Care operations worldwide Homeland Security Secretary
Newt Gingrich Christine Shipley

Former Speaker of the U.S. House of Editor and Publisher of the DEMOletter
Representatives
Dr. Louis W. Sullivan
Shoichiro Irimajiri Former U.S. Surgeon General, President of
Consultant and Adviser, Former Senior Morehouse School of Medicine
Executive of Honda Motor Co.
Pete Wilson
Mickey Kantor Former U.S. Senator and California
Former U.S. Secretary of Commerce and Governor
U.S. Trade Representative
1 of 2 11/5/2008 1:13 PM
Fleishman-Hillard - International Advisory Board http://www.fleishmanhillard.com/client-solutions/international-advisory-...
Dr. David Kessler Home | Who We Are | Client Solutions | Careers |

Former Commissioner of the U.S. Food and Global Reach | Point of View | Site Map
Drug Administration © 2008 Fleishman-Hillard Inc.
Tom Ridge, an adviser to President George W. Bush,

served as the first secretary of the Department of
Homeland Security from 2003 until 2005. Before his
role in the federal government, Mr. Ridge was a
six-time member of the U.S. House of Representatives
and a twice-elected governor of Pennsylvania.
Among his gubernatorial accomplishments are the

Education Empowerment Act, which has helped more
than 250 million children in Pennsylvania’s lowest-
performing schools, and the statewide Land Recycling Program, known
as "Growing Greener."
In 2005, following 22 consecutive years of public service, Mr. Ridge

began work in the private sector as president and CEO of Ridge Global,
a Washington, D.C.-based advisory firm. He also serves as a senior
adviser for Deloitte & Touche and TechRadium and was named to board
positions for The Home Depot and The Hershey Company.
2 of 2 11/5/2008 1:13 PM
EXHIBIT 29
Your Search Results
You searched for:

Client Name: Discover America Government Entity Contacted: Homeland Security, Dept of (DHS)
Disclosure Home
1 of 1 1/6/2009 11:38 AM
EXHIBIT 30
Page 1
2 of 2 DOCUMENTS
U.S. Newswire
March 27, 2007 Tuesday 4:01 PM EST
Abraxas Corporation Announces Tom Ridge, Former

Secretary of Homeland Security, Joins Advisory
Board
SECTION: POLITICAL EDITORS
LENGTH: 626 words
DATELINE: MCLEAN, Va., March 27
Abraxas Corporation, a risk mitigation technology company based in Northern

Virginia, today announced that Tom Ridge, the former Secretary of Homeland
Security and Governor of Pennsylvania, has joined its Board of Advisors.
Richard "Hollis" Helms, CEO of Abraxas Corporation, said, "We are very
excited that Governor Ridge has joined our Advisory Board. Although we are just
making the announcement today, Mr. Ridge has been working behind the scenes with
our TrapWire(R) team since July of 2006 (prior to full product release) to help
refine key product functionality to even better address critical infrastructure
owner responsibilities and needs. His leadership in public service at the state
and federal levels, and deep understanding of Homeland Security needs, has been
of immeasurable value in helping us produce appropriate solutions for business
owners, state and local governments and federal agencies involved in vitally
important homeland security issues."
TrapWire is a unique counterterrorism software application that has been

under development for two years and is focused on one primary objective:
predicting and preventing terrorist attacks.
"In TrapWire, Abraxas has leveraged decades of counterterrorism field

experience to develop a unique and effective tool for law enforcement and
private sector security professionals to protect our citizens and our public and
private facilities against terrorist attacks," said Governor Ridge. "I have been
impressed by the company's sharp focus on developing risk mitigation
technologies and am looking forward to further helping the company reach its
full potential to serve public and private sector customers here and abroad."
Page 2
Abraxas Corporation Announces Tom Ridge, Former Secretary of Homeland Security,
Joins Advisory Board U.S. Newswire March 27, 2007 Tuesday 4:01 PM EST
Mr. Ridge's distinguished career includes serving as a member of the United

States House of Representatives (1983-1995), Governor of Pennsylvania
(1995-2001), Assistant to the President for Homeland Security (2001-2003), and
the first United States Secretary of Homeland Security (2003-2005).
"We are truly privileged to have such a distinguished individual join our
Board of Advisors. Governor Ridge's leadership as the first Secretary of the
Department of Homeland Security (DHS) was instrumental in leading our country
after 9/11. He effectively developed and coordinated a comprehensive national
strategy to strengthen the United States against terrorist threats and attacks.
His keen knowledge and understanding of infrastructure protection requirements
at the state and local level has been of extraordinary value to us," Helms
added.
In joining the Board of Advisors, Mr. Ridge is reunited with General John A.
Gordon (USAF, retired). General Gordon has had a distinguished career. Among
other key posts he was President Bush's first Homeland Security Advisor. In that
capacity he was responsible for developing interagency Homeland Security Policy
and advising the President during domestic incidents involving terrorism and
natural disasters.
In addition to Governor Ridge and General Gordon, the Abraxas Board of

Advisors includes James Roth (retired President and CEO of GRC International,
Inc.), and the Honorable Eugene R. Sullivan, a retired Federal Judge and Air
Force and NRO General Counsel.
About Abraxas Corporation
Abraxas Corporation is a leading risk mitigation technology company serving

global customers in the public and private sectors. It offers a variety of
technical products and consulting solutions to customers seeking to reduce their
risk and understand the environment. Abraxas was recently ranked 17th on
Deloitte's 2006 Technology Fast 500. The company's global headquarters are in
McLean, Virginia. For more information please visit http://www.abraxascorp.com.
SOURCE Abraxas Corporation
Contact: Abraxas Corporation, +1-703-821-8930 ext. 182
LOAD-DATE: March 28, 2007
LANGUAGE: ENGLISH
Copyright 2007 PR Newswire Association LLC

All Rights Reserved
EXHIBIT 31
Page 1
9 of 10 DOCUMENTS
PR Newswire
September 10, 2007 Monday 1:30 PM GMT
The Honorable Tom Ridge Teams with IDO Security;

Former Homeland Security Secretary New Key Advisor
for MagShoe(TM) Program
LENGTH: 766 words
DATELINE: NEW YORK Sept. 10
NEW YORK, Sept. 10 /PRNewswire-FirstCall/ -- IDO Security(OTC:IDOI)(BULLETIN

BOARD: IDOI) , a provider of innovative solutions for the homeland security
market, today announced that The Honorable Tom Ridge, the first Secretary of the
Department of Homeland Security, will provide special consulting services for
the company. Governor Ridge will work with the company to accelerate U.S.
implementation of the MagShoe high speed shoes-on portable footwear weapons
detection system.
"Governor Ridge's experience as our country's first Secretary of the

Department of Homeland Security will provide us with invaluable assistance as we
bring the benefits of the MagShoe shoes-on security screening technology to
markets in the United States and throughout the world," said Michael Goldberg,
President of IDO Security. John Mitola, Chairman of the Illinois Toll Highway
Authority and member of the IDO Board of Directors added, "Governor Ridge
understands how to balance the need for increased security with the
responsibility to keep life and commerce proceeding with minimal inconvenience.
We believe his insights will be invaluable to IDO."
The MagShoe is a security screening device that detects metallic objects

concealed on or in footwear, ankles and feet through the use of electro-
magnetic fields, allowing citizens to be screened without shoe removal. The
MagShoe is currently approved for use by the United Kingdom's Department for
Transport.
"IDO Security has created a security solution that can provide increased
security for airports, schools and businesses while making the screening process
quick, convenient and comfortable for citizens," said Governor Ridge. "I'm
impressed by the MagShoe's advanced technology and look forward to working with
IDO to help accelerate its implementation."
Soon after the attacks of 9/11, Tom Ridge became the first Assistant to the
President for Homeland Security and, in 2003, the nation's first Secretary of
the Department of Homeland Security. During his tenure, he created a
border-centric agency that facilitated the flow of people and goods; instituted
layered security at air, land and seaports; developed a unified national
response and recovery plan; improved the sharing of information nationwide;
Page 2
The Honorable Tom Ridge Teams with IDO Security; Former Homeland Security
Secretary New Key Advisor for MagShoe(TM) Program PR Newswire September 10, 2007
Monday 1:30 PM GMT
protected critical infrastructure; and developed and integrated technology that

further secured the country. A two-term governor of Pennsylvania (1995-2001),
Ridge is also a former Member of the U.S. House of Representatives (1983-1995)
and a decorated Vietnam combat veteran.
After more than 25 years in public service, Ridge now consults on a variety
of domestic and international issues. Among his many nonprofit activities, he
currently serves as chairman of the National Organization on Disability and
honorary co-chair of the Flight 93 National Memorial.
About IDO Security
IDO is engaged in the design, development and marketing of devices for the
homeland security and loss prevention markets for use in security screening to
detect metallic objects concealed on or in footwear, ankles and feet through the
use of electro-magnetic fields. These devices were designed specifically for
applications in the security screening to complement the current methods for the
detection of metallic items during security screenings and at security
checkpoints in venues such as airports, prisons, schools, stadiums and other
public locations and other venues requiring individual security screening. For
more information please visit us at http://www.idosecurityinc.com/
Forward Looking Statements:
A number of statements contained in this press release are forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as
amended. A safe-harbor provision may not be applicable to the forward-looking
statements made in this press release because of certain exclusions under
Section 27A (b). These forward-looking statements involve a number of risks and
uncertainties, including the sufficiency of existing capital resources,
uncertainties related to the development of IDO's business plan, and the ability
to secure additional sources of financing. The actual results that IDO may
achieve could differ materially from any forward-looking statements due to such
risks and uncertainties. IDO encourages the public to read the information
provided here in conjunction with its most recent filings on Form 10-KSB and
Form 10-QSB.
Contact: Michael Goldberg, 646-214-1234, mg@idosecurityinc.com
CONTACT: Michael Goldberg, IDO Security, +1-646-214-1234,

mg@idosecurityinc.com
Web site: http://www.idosecurityinc.com/
SOURCE IDO Security
URL: http://www.prnewswire.com
LOAD-DATE: September 11, 2007
LANGUAGE: ENGLISH
Copyright 2007 PR Newswire Association LLC.

Page 3
The Honorable Tom Ridge Teams with IDO Security; Former Homeland Security
Secretary New Key Advisor for MagShoe(TM) Program PR Newswire September 10, 2007
Monday 1:30 PM GMT

EXHIBIT 32
Page 1
1 of 24 DOCUMENTS
The Washington Post
October 2, 2007 Tuesday

Met 2 Edition
Ridge Launches Security Consulting Firm;

Nations, Industry Targeted as Clients
BYLINE: Thomas Heath; Washington Post Staff Writer
SECTION: FINANCIAL; Pg. D04
LENGTH: 307 words
Former homeland security secretary Tom Ridge yesterday officially launched a

District-based international consulting firm that aims to address security and
economic development needs of companies and countries.
Ridge Global has already signed such clients as the Albanian government and
accounting giant Deloitte & Touche USA.
Ridge, 62, a former governor of Pennsylvania, said he has about a dozen

people on staff along with an extensive list of friends and associates who can
be used to provide consulting for clients.
The firm's advisory committee includes international security and terrorism

analyst Barry McCaffrey, former homeland security adviser John Gordon, former
Coast Guard commandant Thomas Collins and former White House cyber security
adviser Howard Schmidt.
"I've got a mix of several people in my office, and I'm working with a couple
of members of my advisory board," Ridge said. "What I am able to do is access
individuals and relationships or subject-matter experts with international
expertise in a variety of areas because of my work as governor and at Homeland
Security."
Ridge will not be lobbying the U.S. government directly, but rather will be
involved in helping clients build public-private sector relationships,
spokeswoman Michele Nix said.
The company's main focus will be on global trade security, special event
security, risk assessment and crisis management. The firm's Web site said Ridge
Page 2
Ridge Launches Security Consulting Firm; Nations, Industry Targeted as Clients
The Washington Post October 2, 2007 Tuesday
Global also will consult on regional development, technology and management

issues.
Currently, Ridge Global is consulting with the Albanian government to help it

qualify for NATO membership and develop its economic, law enforcement and
educational infrastructure.
After serving as governor of Pennsylvania from 1995 to 2001, Ridge became the
first homeland security secretary in January 2003 and served until February
2005.
LOAD-DATE: October 2, 2007
LANGUAGE: ENGLISH
DISTRIBUTION: Maryland
GRAPHIC: IMAGE; By Andrea Bruce -- The Washington Post; Tom Ridge has brought
former government security experts onto the advisory committee of his new
consulting firm.
PUBLICATION-TYPE: Newspaper
Copyright 2007 The Washington Post

All Rights Reserved
EXHIBIT 33
Ridge Files Very Late for Albania - Roll Call http://www.rollcall.com/issues/53_157/news/26197-1.html?type=printer_...
PRINTER-FRIENDLY FORMAT
SPONSORED BY
Ridge Files Very Late for Albania

June 24, 2008
By Anna Palmer
Roll Call Staff
For almost two years former Homeland Security Secretary Tom Ridge failed to register a nearly half-million-dollar
lobbying contract that he had with the government of Albania.
Ridge filed a registration statement on behalf of the country earlier this month after being contacted by the
Department of Justice.
“It was brought to my attention after the contract expired and my lawyer said under the circumstances I probably
should have filed,” said Ridge, who is a national co-chairman of Sen. John McCain’s (R-Ariz.) presidential campaign
and has been mentioned as a potential vice presidential running mate. “I didn’t think it was [necessary] to register.”
The Foreign Agents Registration Act requires agents to register with the DOJ within 10 days of signing a contract with
a foreign government and before performing any duties for the client.
Additionally, “foreign agents” must file biannual reports detailing any agreements, income received and expenditures
on behalf of foreign countries or corporations owned by countries.
Ridge, the former Pennsylvania governor, represented Albania from October 2006 through the end of August 2007 on
issues ranging from homeland security to NATO membership.
On May 7, 2007, Ridge and Albanian Prime Minister Sali Berisha met with Sens. Joe Lieberman (ID-Conn.) and Chuck
Hagel (R-Neb.) to discuss “various reforms undertaken by the government of Albania to comply with NATO and EU
requirements,” according to the FARA supplemental statement. Ridge and Berisha met with Rep. Jim Costa (D-Calif.)
to discuss the same issues on May 8.
The time stamp on Ridge’s registration statement with the Justice Department is dated June 12, 2008.
Ridge, who is not a registered lobbyist, said he is no longer working on behalf of any foreign governments, including
Albania.
He opened Ridge Global — a strategic consulting firm “led by one of today’s most forward-thinking international
leaders,” according to its Web site — after leaving the Bush administration in late 2004.
Several senior members of McCain’s presidential election team are former lobbyists and have represented foreign
countries, some of which, like Equatorial Guinea, Nigeria and Zaire, have proved controversial.
McCain’s former national finance chairman, former Texas Rep. Tom Loeffler (R) of the Loeffler Group, left the
campaign in May, apparently because of work he did on behalf of foreign governments. Since then, the campaign has
implemented stringent rules of disclosure of foreign country representation.
“Sen. McCain is not aware of the exact circumstances of Gov. Ridge’s work as a lobbyist for Albania, an important
European ally to this country, in 2006 and 2007,” McCain spokesman Tucker Bounds said in a statement.
“However, the governor is in full compliance with the McCain campaign’s lobbying policy, which requires that
part-time volunteers disclose current lobbying work and agree not to lobby John McCain or his staff on those issues
or participate in campaign policy making on that subject,” Bounds said.
1 of 2 11/3/2008 1:08 PM
Ridge Files Very Late for Albania - Roll Call http://www.rollcall.com/issues/53_157/news/26197-1.html?type=printer_...
Ridge’s registration was spurred by a DOJ inquiry after press accounts surfaced noting Ridge’s connection to the
country.
Ridge’s work on behalf of Albania was well-documented, starting on Dec. 31, 2006, when the Pittsburgh Post-Gazette
reported that Ridge “landed an unusual first client in the prime minister of Albania” for his new consulting firm.
The New York Times reported on June 9, 2007, when President Bush visited Albania that Ridge worked “on a range of
issues, including the implementation of a national identity card” for the country.
After a meeting with Justice and his counsel at Blank Rome, Ridge decided to file his FARA registration.
“Once we were made aware of certain contacts by Gov. Ridge, we advised him to register, which he did,” said Topper
Ray, a spokesman for Blank Rome.
FARA prosecutions, or even, as in Ridge’s case, contact by the Justice Department to encourage registration, are
unusual, ethics lawyers said.
“The enforcement of FARA is uneven,” said Kenneth Gross, an ethics expert at Skadden, Arps, Slate, Meagher & Flom.
“I think only in high-profile situations where there are press accounts would something like this happen. My
impression is this is few and far between.”
Ridge first made contact with Berisha and his cabinet members in March 2006. After that meeting, Ridge came up
with a strategic plan for the country, according to the registration.
His “Proposed Scope of Work for Albania” included creating a “comprehensive homeland security strategy” that would
focus on terrorism and defense while also encouraging the country to become “an economic force” in the Balkans and
Eastern Europe.
Additionally, Ridge wanted to help Albania obtain NATO membership, implement “good governance” practices and
hold two one-day “expert advice seminars” in Washington, D.C.
Ridge declined to discuss the details of his work on behalf of Albany, although he noted that the seminar sessions
never occurred.
The contract, signed by Ridge on Sept. 4, 2006, paid Ridge’s firm $40,000 a month for one year, amounting to
$480,000.
In addition, the contract specified that Blank Rome be paid a $10,000 monthly retainer for its role in supporting Ridge
Global. The contract further specified that Blank Rome would make “any direct contact with the United States
government” on behalf of Albania.
The firm did not register with the Department of Justice for its work.
“All the work that we did for Albania was actually in Albania and not representing Albania before the U.S.
government,” Blank Rome’s spokesman said in a statement.
2008 © Roll Call Inc. All rights reserved.
2 of 2 11/3/2008 1:08 PM
EXHIBIT 34
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2 of 670 DOCUMENTS
Investopedia Advisor
November 16, 2007 Friday 10:27 AM EST
Hershey's New Board Looks Secure (HSY)

BYLINE: Glenn Curtis
LENGTH: 637 words
Nov. 16, 2007 (Investopedia Advisor delivered by Newstex) -- When candy

company Hershey ( HSY ) shook up its board of directors on November 11, it
certainly didn't opt for no-name rookies. Among the eight new faces are Tom
Ridge, former secretary of Homeland Security, and Edward Kelly, a managing di-
rector of the Carlyle
According to Kenneth Wolfe, Hershey's non-executive chairman, the new recruits
were brought in to "recharge growth and take advantage of all opportunities we
see in the marketplace." In short, the fact that Hershey is rejigging its board
is a great sign for the common shareholder. (To learn more on the value of a
strong board, see Evaluating A Company's Management Friends in High The Hershey
Charitable Trust (which owns almost 78% of the company) had requested that six
of the board members resign. And when they did, two others resigned as well.
Again, the reason behind the shuffle is the company wanted new blood who could
deliver growth and therefore enhance shareholder value. Among the new directors
hired was Tom Ridge, who you might remember as the first Secretary of Homeland
Security. Ridge is also currently president of Ridge Global, a global strategic
consulting company. One other new hire that stood out to me was Edward Kelly, a
managing director of The Carlyle Group. For those unaware, The Carlyle Group is
a big name private equity firm , which leads me to believe that perhaps the
company may be considering some sort of business combination or perhaps even
putting itself up for sale. Earlier this year there was speculation on Wall
Street that the company might combine forces with Cadbury Schweppes ( CSG Compe-
tition Heating I think Hershey is getting serious about driving its top and
bottom line right now, because the company is seeing increased competition from
the likes of Nestle and other players in the snack food business. Another poten-
tial factor is that it's also seeing the cost of ingredients such as milk rise
dramatically. In short, I believe that Hershey needs to act now in order to re-
main competitive, and of course profitable.
>At the moment, Wall Street expects Hershey to earn $2.09 a share this year and
$2.18 a share next year. However, I'm skeptical this is possible, especially
when it comes to the 2008 estimates. Over the last 90 days the analyst community
has reduced its estimate to $2.18 a share from $2.44 a share. This is a fairly
dramatic cut. To me it signifies that the analysts who follow the company, and
arguably know much more than the general investment public about it, are having
a tough time getting a bead on the future direction of earnings. Another concern
is the price of certain foodstuffs has risen over the past year and I see no re-
lief in sight. The same holds true for labor costs.
>
Time To Drop The Small-Town Although it is known throughout the world, Hershey
is still essentially a small-town company and I view this as a bit of a nega-
tive. For earnings and the stock to really take off, the company needs to expand
its distribution network, and perhaps source more overseas labor to trim costs.
I am hopeful that the new board members will begin doing this.
>Bottom Line
Hershey has hired a new board of directors that is expected to grow the company
and enhance shareholder value. I think that this is terrific news for the com-
Page 2
Hershey's New Board Looks Secure (HSY) Investopedia Advisor November 16, 2007
Friday 10:27 AM EST
pany, and believe it's just a matter of time until the stock starts to react to
this good
To continue reading on this subject, try Putting Management Under The Micro-
scope
>Looking to cook up a market-stomping stock portfolio? Check out our FREE report
"7 Ingredients to Market Beating Stocks" and get started right At the time of
writing Glenn Curtis did not own shares in any of the companies mentioned in
this article. Click here to read the Investopedia Advisor's full disclosure
LANGUAGE: ENGLISH
NOTES: The views expressed on blogs distributed by Newstex and its re-
distributors ("Blogs via Newstex") are solely the author's and not necessarily
the views of Newstex or its re-distributors. Posts from such authors are pro-
vided "AS IS", with no warranties, and confer no rights. The material and infor-
mation provided in Blogs via Newstex are for general information only and should
not, in any respect, be relied on as professional advice. No content on such
Blogs via Newstex is "read and approved" before it is posted. Accordingly, nei-
ther Newstex nor its re-distributors make any claims, promises or guarantees
about the accuracy, completeness, or adequacy of the information contained
therein or linked to from such blogs, nor take responsibility for any aspect of
such blog content. All content on Blogs via Newstex shall be construed as au-
thor-based content and commentary. Accordingly, no warranties or other guaran-
tees will be offered as to the quality of the opinions, commentary or anything
else offered on such Blogs via Newstex. Reader's comments reflect their individ-
ual opinion and their publication within Blogs via Newstex shall not infer or
connote an endorsement by Newstex or its re-distributors of such reader's com-
ments or views. Newstex and its re-distributors expressly reserve the right to
delete posts and comments at its and their sole discretion.
PUBLICATION-TYPE: Web Blog
Copyright 2007 Newstex LLC
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Newstex Web Blogs
Copyright 2007 Investopedia Advisor
EXHIBIT 35
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First Homeland Security Secretary and Ridge Global CEO to Serve as Senior
Advisor A Cost Effective Way to Communicate
While Traveling Overseas
WASHINGTON, Jan. 9 /PRNewswire-USNewswire/ -- Tom Ridge, the nation's first
Secretary of Homeland Security and chief executive officer of Ridge Global
LLC, will serve as a senior advisor to TechRadium, Inc., a leading Texas-based
security technology company that provides its patented alert and notification Working Moms Can Win a $10,000
system IRIS (Immediate Response Information System) to a wide range of users Scholarship
from public schools and universities to military programs.
(Photo: here) An 800-number for Just $10 a Month
"TechRadium is at the cutting edge of new technologies necessary for

protection and information in today's world," said Ridge. "I look forward to
assisting the company as it expands the use and opportunities of IRIS, a
promising and exciting new technology."
Tom Ridge, former member of the U.S. House of Representatives and twice
MOST POPULAR ON REUTERS
governor of Pennsylvania, was called to the White House after the attacks of
September 11, 2001, to become the first Assistant to the President for Articles Video Recommended
Homeland Security and in 2003 became the first Secretary of the new Department
of Homeland Security. 1. Obama leads McCain
in 6 of 8 key
As Secretary, Ridge spearheaded the rapid deployment of new security measures states | Video
while leading the historic creation of the nation's 15th cabinet department, 2. Study links teen pregnancy to
the largest reorganization of government since the Truman Administration. sexy TV shows
President George W. Bush praised Ridge's service, saying: "In the fight 3. Clues to election result could come
against terrorism, he has played a vital role in protecting the American early | Video
people from a real and ongoing threat...America is safer and our government is 4. Obama lead over McCain narrows to 8 points:
better able to protect our people because of his hard work." poll
5. Recession rears ugly head, global auto sales
TechRadium, Inc., is headquartered in Sugar Land, Texas, near Houston, where shrink
Ryan Rodkey, chief executive officer, announced the appointment of Ridge as
senior advisor. 6. Rare flash of anger from Obama on Halloween
night
"We are excited about Governor Ridge's participation, and he will play a very 7. In Bush's end-game, lots of changes on
important role in the further development of TechRadium," Rodkey said. "There environment
is no one in the United States today -- I don't think there is any other 8. Gold investors disheartened as volatility spikes
person in the world -- who has more respect and more knowledge in the area of
homeland security than Tom Ridge. We are pleased and honored to have him join 9. Obama leads McCain by 6 points
us." 10. U.S. rap label boss dies suddenly
About TechRadium Most Popular Articles RSS Feed

TechRadium's IRIS is a high-speed notification and response service that sends
emergency, priority and routine messages electronically. It is widely used in
educational institutions from public school systems to university campuses;
for utility companies, banks and other businesses; and for governments at
federal, state and local levels. (For more information, please visit
www.useiris.com .)
About Ridge Global LLC

Headquartered in Washington, D.C., Ridge Global LLC provides strategic and
operational consulting services that advance the security and economic
interests of businesses and governments worldwide. (For more information,
please visit www.ridgeglobal.com.)
SOURCE TechRadium, Inc.
John Rodkey, of TechRadium Inc., +1-281-263-6300, Jrodkey@techradium.com
© Thomson Reuters 2008 All rights reserved
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EXHIBIT 37
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51 of 556 DOCUMENTS
Washington Technology
January 10, 2008 Thursday
Ridge gets emergency alert consulting gig

BYLINE: Alice Lipowicz, Washington Technology
SECTION: DAILY NEWS Vol. 1 No. 1
LENGTH: 198 words
Former Homeland Security Secretary Tom Ridge has been hired to advise a Texas
company that is selling a patented high-speed public alert and notification
system to schools and other facilities.
Ridge will serve as senior adviser to TechRadium Inc., of Sugar Land, Texas,
which is marketing its Immediate Response Information System (IRIS) for
emergency notification. The system allows designated personnel to send
emergency e-mail or voice mail messages to a large number of recipients during
an emergency.
"TechRadium is at the cutting edge of new technologies necessary for
protection and information in today's world," Ridge said. "I look forward to
assisting the company as it expands the use and opportunities of IRIS, a
promising and exciting new technology."
Ridge served as President Bush's homeland security adviser and became

secretary of the new department when it opened its doors in March 2003. Ridge
resigned in December 2004 and is now the principal at Ridge Global LLC, a
strategic consulting firm.
"We are excited about Gov. Ridge's participation, and he will play a very
important role in the further development of TechRadium," said Ryan Rodkey,

chief executive at TechRadium.
LOAD-DATE: January 11, 2008
LANGUAGE: ENGLISH
Copyright 2008 1105 Media, Inc.

All Rights Reserved
EXHIBIT 38
EXHIBIT 39
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38 of 556 DOCUMENTS
Business Wire
April 28, 2008 Monday 11:00 AM GMT
Carbon Motors Announces Tom Ridge, Lee Hamilton to

Serve on Board of Advisors;
Homeland Security Leaders to Help Guide
Development of World's First "Purpose-Built" Law
Enforcement Vehicle;
Automaker Launches New Web Site for Direct Law
Enforcement Input on Vehicle Design
LENGTH: 935 words
DATELINE: ATLANTA
Carbon Motors Corporation announced today that former Secretary Tom Ridge,
the nation's first secretary of the U.S. Department of Homeland Security and
two-term governor of Pennsylvania, and former U.S. Rep. Lee Hamilton, retired
member of Congress from Indiana and vice-chair of the 9/11 Commission, have
joined the company's board of advisors to help guide the development of the
world's first purpose-built vehicle for law enforcement.
Led by former senior executives of Ford Motor Company, Carbon Motors is a new
American automaker with a focused and singular mission: to design, develop,
produce, distribute and service the Carbon E7, a vehicle designed specifically
for law enforcement operations.
"Our goal is to significantly improve the safety, efficiency and

effectiveness of our law enforcement first responders by giving them the tools
they have long needed - and now, in a post-9/11 environment, need more than
ever," said William Santana Li, chairman and chief executive officer of Carbon
Motors Corporation. "Throughout the development process, we have sought to draw
upon the expertise of active and retired law enforcement officers across the
nation, and their advice has been critical to ensuring that the E7 meets the
uniquely challenging needs of today's law enforcement officers.
"With the addition of Secretary Ridge and Congressman Hamilton to our Board
of Advisors, Carbon Motors is fortunate to be able to draw upon the experience
and expertise of two of the nation's most respected authorities on homeland
security," said Li.
While criminal threats and law enforcement tactics have evolved to become
more sophisticated over the years, the resource most critical to the majority of
officers-the patrol car-has not. Most officers are still driving a vehicle
designed three decades ago, one meant for Sunday drives rather than the extreme
Page 2
Carbon Motors Announces Tom Ridge, Lee Hamilton to Serve on Board of Advisors;
Homeland Security Leaders to Help Guide Development of World's First
"Purpose-Built" Law Enforcement Vehicle; Automaker Launches New Web Site for
Direct Law Enforcement Input on Vehicle Design Business Wire April 28, 2008
conditions encountered during regular law enforcement operations.
"At the local, state and federal level, law enforcement is up against
entirely new challenges that didn't exist 30 years ago," said Secretary Ridge.
"That's why we need to arm the men and women who protect our communities with
the most up-to-date equipment. The E7 has the potential to meet that need, which
would lead to safer and more effective patrol and policing operations and safer
neighborhoods across America."
Carbon Motors was founded to develop a more reliable, durable,

high-performance and cost-efficient vehicle. Instead of taking an off-the-line
passenger vehicle and inefficiently retrofitting it with tens of thousands of
dollars worth of equipment, the E7 is engineered from bumper-to-bumper and from
the ground up to serve the unique demands of law enforcement. For example, the
E7 will include:
• Fuel efficient 300 horsepower, 420 lb-ft of torque clean diesel engine
• Ergonomically designed cockpit with 17" touch-screen display
• Vehicle life durability specification of 250,000 miles
• 360 degree exterior surveillance audio and video capability
• 180 degree interior rear compartment audio and video capability
• Available automatic license plate recognition system
• Optional integrated ballistic protection
• Additional features listed atwww.carbonmotors.com.
"One thing that has become clear since 2001 is that an effective homeland
security strategy demands new solutions to old problems, and Carbon Motors is
taking up that challenge," said Hamilton. "The E7 not only provides greater
officer safety and efficiency, it also saves taxpayer money. By improving fuel
economy by over 40 percent the more police departments that adopt the E7, the
more money we can put directly into critical new law enforcement resources."
Li noted that the nation's 425,000 law enforcement patrol vehicles burn
through over 1.5 billions gallons of gasoline a year and emit over 7,000 tons of
CO2. The E7 has been designed to reduce emissions by an estimated 40 percent.
Enhanced Carbon Motors Web Site Includes "Carbon Council" for Law Enforcement
In addition to naming Ridge and Hamilton to the Carbon Motors Advisory Board,
Li announced the launch of Carbon Motors' newly redesigned Web site
atwww.carbonmotors.com. The new site includes more detailed specifications on
the vehicle, additional photos of the E7 and enhanced descriptions of the tools
and resources the car makes available to law enforcement.
Most importantly, the Web site serves as the online home of the Carbon
Council, a voluntary advisory team comprised of active and retired law
enforcement professionals and public servants who provide feedback and
suggestions on the E7's design and features. All law enforcement and associated
personnel, active and retired, are welcome to join the council to offer feedback
and suggestions on the design and needs of a purpose-built law enforcement
vehicle, and to discuss and interact with other law enforcement personnel as the
car takes shape. To date, the Carbon Council has over 1,200 members nationwide.
(For information on joining the Carbon Council, visitwww.carbonmotors.com).
"The new, enhanced Web site will provide law enforcement, policymakers and
the general public with a comprehensive overview of the Carbon E7 and its
3
Monday 11:00 AM GMT
capabilities," Li said. "This vehicle is the next generation of law enforcement

tools, and we believe that people are going to be impressed by what they see.
The collaborative design process has translated into a vehicle that will offer
unique benefits to the law enforcement officials who purchase the E7."
For additional information and to view pictures of the E7, please

visitwww.carbonmotors.com.
CONTACT: Adfero Group

Kate Kennedy, 202-333-4444
kkennedy@adfero.com
URL: http://www.businesswire.com
LANGUAGE: ENGLISH
DISTRIBUTION: Business Editors; Automotive Writers
Copyright 2008 Business Wire, Inc.

EXHIBIT 40
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23 of 555 DOCUMENTS
Wireless News
August 5, 2008 Tuesday
Cernium Names Tom Ridge to Its Board

LENGTH: 348 words
Cernium, a developer of video analytics-enabled products, announced the appointment of The Honorable Tom
Ridge, the nation's first Secretary of the Department of Homeland Security and former Governor of Pennsylvania, to the
company's board of directors.
"Cernium is honored to welcome Secretary Ridge to our board as a key strategic advisor," said Craig Chambers,
president and chief executive officer of Cernium. "His unique experience as an internationally recognized leader on
matters of business and government will bring an invaluable perspective to Cernium as we expand our product offerings
both in the US and overseas. We are delighted that he has chosen to take a role in shaping our future."
"In my work in both government and the private sector, I have appreciated the difference made by innovative firms
such as Cernium," said Ridge. "I believe in the potential of Cernium's technology and their vision for its deployment,
and I'm pleased to work with them to bring this vision to fruition."
Secretary Ridge was the first U.S. Secretary of Homeland Security, a federal department President George W. Bush
formed and appointed him to lead shortly after the tragic events of September 11, 2001. Secretary Ridge's role at that
critical time was to develop and implement a comprehensive strategy to strengthen the protections against terrorist
threats to the nation. A former Vietnam combat veteran, Secretary Ridge was twice elected Governor of Pennsylvania,
serving from 1995 to 2001, and served six terms as a Member of Congress. He retired from the public sector on
February 1, 2005, and currently serves as president and CEO of Ridge Global LLC, a Washington, DC-based strategic
and operational consulting firm. Additionally, he is a board member of several private sector companies, including
Vonage Holdings Corp. and The Hershey Company. He also currently serves as the chairman of the National
Organization on Disability and as co-chair of the Flight 93 National Memorial. In 2007, he served on a state-appointed
incident review panel investigating the tragedy at Virginia Tech.
LOAD-DATE: August 6, 2008
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Wire
Page 2
Cernium Names Tom Ridge to Its Board Wireless News August 5, 2008 Tuesday
JOURNAL-CODE: M2
Copyright 2008 M2 Communications Ltd.

All Rights Reserved
EXHIBIT 41
Cernium - Leading the Way in Video Analytics http://www.cernium.com/index.asp
Video understanding… Cernium develops and delivers products that extract useful
information from video for applications ranging from business intelligence to homeland
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View news coverage on Perceptrak

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Security Systems News editorial highlights
Archerfish by Cernium
11/18/2008
ExitSentry by Cernium Achieves Product
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11/12/2008
Archerfish by Cernium Selected as CES
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Cernium White Paper: The Economics of
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of the Year 2008
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EXHIBIT 42
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AFTEREFFECTS: DOMESTIC SECURITY; Former Domestic Security ... http://query.nytimes.com/gst/fullpage.html?res=9506E5D9103DF93AA1...
April 29, 2003
AFTEREFFECTS: DOMESTIC SECURITY; Former Domestic

Security Aides Make a Quick Switch to Lobbying
By PHILIP SHENON
When Tom Ridge arrived here after the Sept. 11 attacks and opened the White House Office of Homeland Security, the former
Pennsylvania governor quickly surrounded himself with a group of trusted deputies, many of them drawn from the staff he assembled
as governor.
But when Mr. Ridge was sworn in this year as the first secretary of homeland security, some of his inner circle did not follow. Instead,
they emerged as lobbyists whose corporate clients want contracts from Mr. Ridge's multibillion-dollar agency.
Lobbying disclosure forms filed in Congress show that at least four of Mr. Ridge's senior deputies at the White House are now working
as ''homeland security'' lobbyists, as is a chief of staff from his days as Pennsylvania governor.
They are a small part of a booming new lobbying business in Washington that is focused on helping large corporations get a share of the
the billions of dollars that will be spent by the vast domestic security bureaucracy that Mr. Ridge oversees.
The Homeland Security Department, with a budget of about $40 billion this year, and Mr. Ridge are obvious targets for an array of
industries and their lobbyists in the capital.
''My one year is up, so I can lobby him and lobby the White House and lobby the Hill,'' said Rebecca L. Halkias, who was Mr. Ridge's
legislative affairs director in the White House, referring to her former boss and to the one-year ban on contacts between former senior
government officials and their colleagues.
Ms. Halkias, who also managed Mr. Ridge's Washington office when he was governor, is now a partner in a lobbying company, C2
Group, and Congressional filings show that her clients include Tyco Electronics, which would like to sell its wireless communications
systems to government emergency response agencies.
''I'm not really comfortable talking about homeland security lobbying,'' Ms. Halkias said in a brief telephone interview, refusing to
answer most questions. Asked if she was concerned about any conflict of interest in lobbying Mr. Ridge, she said, ''This conversation is
over,'' and hung up.
There is nothing unusual about former government workers lobbying their old colleagues. The surprising thing about Mr. Ridge's former
aides is how quickly they chose to take up new careers as domestic security lobbyists.
Mr. Ridge's spokesman at the Homeland Security Department said that he was giving no special attention to products that were being
promoted by lobbyists who had worked for him at the White House or in Pennsylvania. And there is no evidence that he is.
Brian Roehrkasse, a department spokesman, said that ''all of the organizations that the Department of Homeland Security chooses to do
business with will be judged upon the merits of their work, not on their relations with officials in the department.''
Because lobbyists face few requirements to publicly disclosure their activities, it is difficult to determine exactly how large or how
lucrative the domestic security niche of the business has become. But it is clearly growing fast.
PoliticalMoneyLine.com, a campaign finance research group, said that an analysis of lobbyist registrations filed in Congress showed a
large increase in the number of companies lobbying the government on issues involving domestic security or counterterrorism.
The analysis showed that as of last week, 569 companies and organizations had used the words ''homeland,'' ''security'' or ''terror'' on the
registration forms in describing their lobbying activities, up from 457 at the beginning of this year, and 157 at the beginning of 2002.
The boom in domestic security lobbying is viewed skeptically by government watchdog groups, which say they intend to monitor
closely how the department spends its money and how Congress appropriates money to Mr. Ridge.
''Homeland Security appears to be viewed by the lobbying firms as a huge honey pot,'' said Fred Wertheimer, president of Democracy
21, a group that advocates restrictions on corporate lobbying.
1 of 3 1/5/2009 6:03 PM
''When you see lobbying firms starting to create whole new departments for the sole purpose of lobbying for homeland security
contracts,'' Mr. Wertheimer said, ''I think the signal for the American people is to watch out, to be vigilant that their taxpayer dollars for
homeland security get the best possible results, as opposed to going to the best Washington lobbyists.''
No lobbying firm is better connected to Mr. Ridge and the new department than Blank Rome Government Relations, the lobbying arm
of a large Philadelphia law firm with the same name.
Three of Mr. Ridge's former aides, including Mark A. Holman, who was Mr. Ridge's chief of staff when he was governor of
Pennsylvania and who joined him at the White House as deputy assistant to the president for homeland security, work for Blank Rome.
Lobbying records show that Blank Rome's domestic security clients include the Business Software Alliance, a trade association, and
SAP Public Services, a division of Europe's largest software maker.
Blank Rome's Web site invites clients to a seminar next month at the Four Seasons Hotel in Philadelphia for the first in a series of
''executive briefings on homeland security'' featuring Mr. Holman and Carl M. Buchholz, who also worked in Mr. Ridge's White House
office and is now executive partner at the law firm.
The two men will offer ''their unique views of the decision-making process and the decision makers within the Department of
Homeland Security.'' A spokesman for Mr. Buchholz said that he was not personally lobbying the department or Congress but was
instead overseeing the work of other lobbyists.
Ashley Davis, a special assistant to Mr. Ridge in the White House who had also worked on his gubernatorial campaigns, joined Blank
Rome as a lobbyist in February, with responsibility for domestic security issues. ''When we left the White House, it was done very
ethically and correctly,'' Ms. Davis said. ''It was just a career decision on my part.''
She said that she believed she had a responsibility to be selective about her lobbying clients. ''We would never want to present anything
that we felt wasn't of the highest caliber,'' Ms. Davis said, adding that she saw Mr. Ridge and others at the Homeland Security
Department ''quite a bit -- all of us are very close friends with the governor and see him on many different occasions, not just
professionally.''
Mark Campbell, who succeeded Mr. Holman as Mr. Ridge's chief of staff in the governor's office but did not accompany Mr. Ridge to
Washington, registered here last month as a ''homeland security'' lobbyist for Safeguards Technology, a New Jersey company that sells
perimeter security systems.
A spokesman for Mr. Campbell's lobbying firm, Greenlee Partners of Harrisburg, Pa., said that Mr. Campbell expected to travel to
Washington regularly from his home in Pennsylvania and had already met with former colleagues who now work at the Department of
Homeland Security. The spokesman said he did not know if that included Mr. Ridge.
A number of public relations firms have a lobbying component to their work, but the domestic security team at Fleishman-Hillard may
be the most star-studded.
The firm established a domestic security practice last December that includes Barry R. McCaffrey, the retired Army general who was
the White House drug adviser in the Clinton administration, and Howard Safir, a former New York City police commissioner.
Fleishman-Hillard says its domestic security division is receiving ''strategic counsel'' from, among others, William S. Cohen, the former
defense secretary; Newt Gingrich, the former House speaker; and Dr. Louis W. Sullivan, the former secretary of health and human
services, all of whom are members of the firm's ''International Advisory Board.''
Similarly, several of the major law firms in Washington that specialize in lobbying have established large domestic security practices.
McKenna Long & Aldridge, one of the largest and oldest lobbying firms in Washington, has established an 18-lawyer domestic security
team.
The domestic security practice at the Washington law firm of Powell, Goldstein, Frazer & Murphy is led by Walter B. Shirk, a lawyer
whose online résumé notes that he is the author of a recent newsletter article titled ''Opportunity and Risk: Securing Your Piece of the
Homeland Security Pie.''
At Venable LLP, the law firm's 28-member domestic security practice includes James H. Burnley IV. a former transportation secretary;
Daniel E. Lungren, a former Republican House member from California; and William P. Cook, a former general counsel of the
Immigration and Naturalization Service.
''We're trying to help our clients avoid the land mines and find the gold mines in homeland security,'' said John J. Pavlick Jr., a partner
who has helped organize the practice, which represents Lockheed Martin, Raytheon and other large government contractors. ''The
major defense contractors want to move into the homeland security arena in a big way. I'm very bullish on this.''
2 of 3 1/5/2009 6:03 PM
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Advertising The Nation's First Secretary of Homeland Security and CEO, Ridge Global LLC
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Rear Admiral David Stone (USN-Ret.)
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Get the HSTV Guide President and CEO, The Alacrity Homeland Group.
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Former Asst. Secretary of Homeland Security and Managing Director, CIVITAS Group LLC
STRATEGIC PARTNERS Carlos Solari

Former White House CIO and V.P. of Security Solutions, Alcatel-Lucent
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Principal, Good Harbor Consulting
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Former Deputy Homeland Security Advisor to the President, and President of Homeland Security at ICx
Technologies Inc.
Col. Randall Larsen (USAF-Ret)

Director, The Institute For Homeland Security
Barbara Nadel
Principal, Barbara Nadel Architect and Senior Consultant to Good Harbor Consulting
Dr. David McIntyre

Director, Homeland Security Integration Center, Texas A&M Unviversity
Dave Drab
Former FBI Special Agent and Principal, Security & Compliance, Xerox Global Services
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Deputy Coordinator, Public-Private Partnerships, Arlington County Office of Emergency Management
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The HOMELAND SECURITY TELEVISION CHANNEL (HSTV) is the world's first online, on-demand
television network dedicated to homeland security and global development. HSTV is a 24/7 interactive
television channel dedicated to producing broadcast-quality video programs on all aspects of homeland
security and the role of global development in fighting terrorism.
HSTV is also dedicated to facilitating rapid awareness of new technologies and services, and assisting
in the transfer of those technology solutions to the government and critical infrastructure marketplace.
In addition to its online content, HSTV Channel offers its content for distribution to broadcast satellite
and cable networks. The online and on-demand television programs will contain an interactive
component that features a powerful blogging and social networking platform to enable community
discussions of security challenges on a global scale, particularly among people interested in security
related current events and college students who are entering public service or the security industry.
HSTV was founded by Neal Award-winning journalist and renowned security author, Dan Verton, and is
dedicated to bringing the highest traditional reporting and production standards to its online video
programming.
Since its founding in 2005, Homeland Security Television has become the Web site of choice for
broadcast quality videos on all aspects of homeland and cyber security. The network streams hundreds
of hours of programming to viewers every month and has presented interviews with some of the highest
profile personalities in homeland and global security today including Tom Ridge; Somalia's Abdinur
Darman, former FEMA Director Michael Brown; and legendary FBI agent Joseph Pistone (Donnie
Brasco).
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EXHIBIT 47
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6 of 18 DOCUMENTS
The New York Times
May 14, 2006 Sunday

Late Edition - Final
In Kentucky Hills, a Homeland Security Bonanza

BYLINE: By ERIC LIPTON
SECTION: Section 1; Column 2; National Desk; Pg. 1
LENGTH: 2399 words
DATELINE: WASHINGTON, May 13
The Department of Homeland Security has invested tens of millions of dollars and countless hours of labor over the last four
years on a seemingly simple task: creating a tamperproof identification card for airport, rail and maritime workers.
Yet nearly two years past a planned deadline, production of the card, known as the Transportation Worker Identification
Credential, has yet to begin.
Instead, the road to delivering this critical antiterrorism tool has taken detours to locations, companies and groups often linked
to Representative Harold Rogers, a Kentucky Republican who is the powerful chairman of the House subcommittee that controls the
Homeland Security budget.
It is a route that has benefited Mr. Rogers, creating jobs in his home district and profits for companies that are donors to his
political causes. The congressman has also taken 11 trips -- including six to Hawaii -- on the tab of an organization that until this
week was to profit from a no-bid contract Mr. Rogers helped arrange. Work has even been set aside for a tiny start-up company in
Kentucky that employs John Rogers, the congressman's son.
''Something stinks in Corbin,'' said Jay M. Meier, senior securities analyst at MJSK Equity Research in Minneapolis, which
follows the identification card industry, referring to the Kentucky community of 8,000 that has perhaps benefited the most from Mr.
Rogers's interventions. ''And it is the sickest example of what is wrong with our homeland security agenda that I can find.''
Mr. Rogers said that any mandates imposed on the TWIC program, as it is commonly called, have been motivated by a desire to
end the delays.
''I have been extremely frustrated with the slow, wandering pace of the program,'' he said in a statement. He declined to
comment beyond the statement, which was issued Thursday.
Asked about the legislative mandates and the delays in starting up the program, Darrin Kayser, a Homeland Security spokesman,
said, ''We are not going to get into finger-pointing back and forth.'' He added, quoting the department secretary, Michael Chertoff,
''This is an initiative which languished for too long.''
Mr. Rogers, 68, whom The Lexington Herald-Leader last year called the Prince of Pork, has never been shy about using clout
gained over 13 House terms to steer federal dollars to his sparsely populated, poor corner of southeastern Kentucky.
''We see Hal pretty often,'' Mayor Amos Miller of Corbin, a Republican, said in an interview. ''And he always brings good
news.''
Corbin was settled as a railroad depot for nearby coal mines, and its first claim to fame came with Col. Harland Sanders, who
began serving up dishes of fried chicken there in the 1930's. Mr. Rogers has made it a mission to create a new growth industry:
domestic security.
1 of 4 1/5/2009 9:07 PM
''Our people will be on the front lines in the war against terrorism worldwide,'' Mr. Rogers told Corbin leaders in 2003, as he
announced plans to build a plant for NucSafe, a radiation detection equipment company.
Mr. Rogers began his push even before the 2001 terrorist attacks, when he was elevated, in 1995, just after Republicans took
control of Congress, to the so-called College of Cardinals, the elite body of chairmen of House appropriations subcommittees that
help control the federal budget.
The Clinton administration needed Congressional backing -- and money -- to fix problems it was having in printing a new fraud-
resistant green card for permanent legal immigrants. To win Mr. Rogers's endorsement, administration officials offered to set up the
centralized card production plant in Corbin.
''It clearly was a convergence of interests,'' said Doris Meissner, then commissioner of the Immigration and Naturalization
Service, which has since been renamed and merged into Homeland Security. The $5.2 million plant, run by contract employees,
opened in 1998.
The transportation worker identification card, first proposed in 2002, would be an identity card equivalent of a maximum
security prison. Not only would it be tamperproof, it would eventually allow transportation workers to be positively identified by a
fingerprint in less than half a second. To ensure security, the card and the automated reader at the port entrance gate would have to
communicate, like two small computers.
But within months after the plans for the card were announced, Mr. Rogers started to intervene. He inserted language into
appropriations bills that effectively pushed the government to use the same patented green card technology and to produce this new
card in Corbin.
''The committee does not want T.S.A. to develop new technologies if existing ones, already developed by other federal
agencies, are good enough,'' a 2002 Appropriations Committee report, signed by Mr. Rogers, said, referring to the Transportation
Security Administration.
Language added in 2003, again in a report submitted in Mr. Rogers's name, urged the agency to use ''existing government card
issuance centers'' to make the card, which Homeland Security officials said, in their view, referred to Corbin. The law blocked
spending until the department bowed to the mandates.
Two former Homeland Security officials said they were confounded. They had already identified a more flexible and secure
technology known as a smart card, which relies on tiny computer chips embedded into the identification card. Most other federal
agencies were moving toward this approach rather than the technology used for the green card, in which data are recorded on a
reflective optical stripe affixed to the card.
''It would be like saying it would be quicker to take a bicycle instead of a Toyota Corolla,'' said one former Homeland Security
official, granted anonymity because he now works for an organization that does not permit him to speak about the matter.
Officials there said they had no choice but to follow the orders. So in 2003, at a cost of $4 million, the department hired a
contractor to study both alternatives. The study concluded that the smart card approach was far superior.
The delay while the study was conducted benefited Corbin somewhat. Maximus, the Virginia-based company hired to do the
test, shared its business with three companies with operations in Corbin. (These companies helped test the optical stripe approach
used for the green card.)
''It was stupid and a pain to coordinate,'' said one former Maximus official, who was granted anonymity because his current job
did not permit him to speak about a previous employer. ''But it was a prudent thing to do for the purpose of trying to capture the
business.''
Kentucky companies turned up in each phase of the early tests of the identification cards.
One of the companies, Senture, which sells call-center services, had a particularly close relationship with Mr. Rogers. Senture
had just opened its doors in May 2003, with a ribbon-cutting ceremony that Mr. Rogers attended. In 2004, Mr. Rogers arranged the
financing for a $4 million Homeland Security contract for Senture to field calls from truckers.
Now, Senture would land even more department work, as BearingPoint, a Virginia company hired in 2004 to test prototype
transportation worker cards, selected Senture to set up a call center for the test. About the time that contract was first advertised, but
before it was awarded, John Rogers, the congressman's son, was hired by Senture as a computer systems administrator.
2 of 4 1/5/2009 9:07 PM
''It has nothing to do with who my father is,'' John Rogers said in a telephone interview. ''It has everything to do with my
qualifications.'' He said he had worked in data management and technology for 13 years.
Officials at Senture did not respond to requests for comment. Since 2004, they have contributed at least $12,000 to Mr. Rogers
and his political action committee.
Executives at LaserCard Systems, Maximus, Shenandoah Electronic Intelligence and a lobbying firm that represents
BearingPoint have also since contributed at least $30,000, with their spouses, to Mr. Rogers's political causes, federal records show.
All four companies either sold services through Homeland Security for work done at the identity card plant in Corbin or won
contracts to test the identification card.
In all, about $100,000 in contributions have come to Mr. Rogers from parties with at least some ties to the identification card
effort, records show.
When tests on a smart card prototype identification card finally got under way in November 2004, the program again ran into an
obstacle.
To try to speed up the work, contractors decided initially to produce the prototype cards in Pennsylvania. But Homeland
Security required that the work be moved, because to comply with the Congressional mandate, it had been written into BearingPoint's
contract that the card production take place in Corbin, Mr. Kayser, the Homeland Security spokesman, said.
One former Homeland Security official said that the demand, given that the card production had already started, made little
sense: only about 5,000 cards would be printed as part of the test. But still, the smart card printing equipment was picked up and sent
to Corbin, adding to the expense and causing another delay.
Interventions by Mr. Rogers were far from the only reason for delays. Homeland Security repeatedly revised plans for the
identification card, related to matters like the method for collecting and storing personal information.
Yet while the debate over card technology and printing dragged on, a separate fight involving Mr. Rogers was playing out.
Starting in 2004, his staff repeatedly pressed the Transportation Security Administration to hire a nonprofit Virginia-based trade
association, the American Association of Airport Executives, to help handle background checks that transportation workers had to
undergo to get identification cards. The trade association had no connection to Corbin, but it had longstanding ties to Mr. Rogers.
Since 2000, it has paid for trips by Mr. Rogers and his wife worth more than $75,000, including the six visits to Hawaii, four to
California and one to Ireland, financial disclosure records show. Last year alone, Mr. Rogers spent a total of two weeks traveling on
the association's tab.
Mr. Rogers was one of many members of Congress to take these airport association financed trips, which coincided with
industry conferences. But they earned him a ranking as seventh of the 535 members of Congress in terms of travel gifts accepted, in a
tally examining the past five years by Political Money Line.
The aviation group also was a longstanding campaign donor, having contributed, through its executives and political action
committee, at least $18,000 to Mr. Rogers over the last four years. In 2002, it gave Mr. Rogers its Congressional Leadership Award.
Mr. Rogers, after his staff was unable to persuade Homeland Security officials to hire the trade association voluntarily for the
identification card program, inserted language last May into the 2006 appropriations bill that mandated such a move. It was
necessary, Mr. Rogers said at the time, because the airport group also helped handle background checks for airport workers. It made
no sense, he said, to hire yet another contractor.
''Doing so increases both the cost to the federal government and the time it takes to begin conducting background checks,'' Mr.
Rogers's staff wrote in a House committee report explaining the insertion of the mandate.
Late last year, while Congress was considering the specific allocation for the airport group, the trade association's executives
went shopping for investors willing to put up as much as $25 million to share in the new for-profit venture they decided to create to
capitalize on the deal.
Government oversight groups questioned the effort to sell benefits gained from the special treatment by Congress. ''This is really
a perversion of every part of the contracting process,'' said Danielle Brian, executive director for the Project on Government
Oversight, a contract watchdog group.
Charles M. Barclay, the executive director of the airport group, and two other senior executives did not respond to e-mail and
3 of 4 1/5/2009 9:07 PM
phone messages requesting comment.
The company ultimately selected to serve as that investor and as a partner, Daon, was also familiar to Mr. Rogers. It had
sponsored, along with the airport executives group, a July 2005 conference and golf outing that the congressman attended in Dublin,
where Daon is based.
Daon, a biometrics software company with offices in Reston, Va., is well connected in Washington; Tom Ridge, the former
homeland security secretary, serves on its board. Tom Grissen, Daon's chief executive, would not say in an interview how much Daon
invested in the airport trade group partnership. He said that Mr. Ridge played no role in the effort.
The airport executives and Daon, as planned, set up their for-profit venture, incorporating it in March to prepare for the
promised work. But the provision that Mr. Rogers inserted into the legislation ultimately backfired.
After Homeland Security moved this spring to comply with Mr. Rogers's legislative mandate and hire the airport trade group,
executives in the intensely competitive biometrics industry protested. ''It is a sleazy arrangement,'' said Walter Hamilton, chairman of
the International Biometric Industry Association.
Finally, last Thursday evening, as lobbyists for Daon's rivals pressed Congress to rescind the deal, Homeland Security, and Mr.
Rogers, issued separate statements, reversing course. The no-bid contract for the airport executives would be killed. This would
mean another delay, because the advertisement for the bidding would have to start over again.
Mr. Rogers, in his statement, did not admit defeat and instead praised a contracting approach he had tried for the past year to
block.
''One contractor will ultimately have responsibility for the entire process, and one contractor alone will be answering to
Congress on their progress or lack thereof,'' he said.
No one has moved to reverse the Congressional directive mandating where the cards are produced. So when the identification
cards do start to roll off the production line -- which Homeland Security officials say they hope will happen by early next year -- the
plan still calls for them to be made in the town that Kentucky Fried Chicken first made famous.
URL: http://www.nytimes.com
LOAD-DATE: May 14, 2006
LANGUAGE: ENGLISH
GRAPHIC: Photos: Harold Rogers (pg. 1)

A prototype of the Transportation Worker Identification Credential.
Representative Harold Rogers listening to a member of his staff Thursday at a hearing on Capitol Hill. (Photo by Doug Mills/The
New York Times)(pg. 18)
Copyright 2006 The New York Times Company
4 of 4 1/5/2009 9:07 PM
EXHIBIT 48
1 of 1 DOCUMENT
MSNBC.com
January 20, 2004 Tuesday
Homeland security seen spurring biometrics

BYLINE: Roland Jones, MSNBC
LENGTH: 1251 words
HIGHLIGHT: A new government policy requiring the fingerprinting of foreign visitors has ignited howls of outrage in many parts of
the world, but for the U.S. biometrics industry, it represents a multi-billion-dollar opportunity. By Roland Jones.
A new government policy requiring the fingerprinting of foreign visitors has ignited howls of outrage in many parts of the world,
but for the U.S. biometrics industry, it represents a multi-billion-dollar opportunity. Later this month, technology companies are
expected to bid for a huge contract to build a biometricsidentification system for America's embassies and consulates abroad so that
travelers can be screened before they reach the U.S. borders.
Biometrics-identification companies aftertoiling for years in relative obscurity are reporting a growing interest in their products,
which typically use details of an individual's unique physical features facial,eye or fingerprint patterns to substantiate their identity.
The catalyst, executives say, isgovernment spending on homeland security in the wake of the Sept. 11, 2001,attacks. The latest
project is the U.S.-Visitor and Immigrant Status Indicator Technology, or U.S.-VISIT, which went into effect on Jan. 5.
At present, U.S.-VISIT, which is currently in place at 115 airports and 14 shipterminals,requires U.S. customs officials to
digitally photograph and fingerprint visa-carrying foreign nationals. These data are then compared against a government database of
possible terrorists and people with criminal histories.
A handful of consortiums, which include firms like IBM, Raytheon and Unisys, are competing for a chance to build the
technology for U.S.-VISIT. The winner's directive: Expand the current border control system and install biometrics measuring
systems at U.S. embassies and consulates abroad so travelers can be screened overseas.
The U.S.-VISIT program is a very big deal for this industry, said Alf Andreassen, a principal at Paladin Capital Group, a
private equity investment firm that runs the Homeland Security Fund, which invests in businesses address homeland-security issues
and needs.
The U.S.-Visit program is expected to cost between $7-$10 billion though 2014, according to the Department of Homeland
Security.
Up to now, most of what the Homeland Security has done has involved getting airports up and running with their baggage
screening, but now we're at the point where we are seeing serious money come into this industry, added Andreassen.
The International Biometric Group, an industry consulting and research firm, predicts that industry revenues from biometrics
technologies will grow from $600 million last year to more than $4 billion by 2007, the biggest chunk about 75 percent of the demand
coming from government-related investments.
U.S.-VISIT is one of the government's most expensive technology contracts, and it is likely to be the first of many.
To date, biometrics has been seen as something more befitting of a James Bond movie than daily life. Businesses have seen the
technology as either too complex or too expensive to be taken seriously, but this appears to be changing thanks to government
programs like U.S.-VISIT that are pushing for adoption of the technology.
1 of 3 1/5/2009 4:54 PM
While government spending is expected to give the industry a boost, biometrics is not confined to U.S. border control.
Governments outside the United States are looking into updating passports, ID cards, driving licenses and other secure documents
with biometrics data to thwart counterfeiters.
Cows eyed?And in response to the mad-cowdisease that recently surfaced in rural Washington State, officials are reportedly
considering ways to track beef cattle, possibly using retinal, or iris scanning, a biometrics process that uses the uniqueness of eye
patterns for identification.
But while analysts agree that the industry is indeed poised for growth, they also say individual investors should be cautious
when it comes to investing in the sector. Like any new industry, stocks in the sector are volatile and prone to wild swings.
Identix, a Minneapolis company and recognized industry leader that makes identification systems that use fingerprints and other
biological data, has seen its stock price jump 30 percent since late December in response to news of the U.S.-VISIT program.
Other biometrics firms have seen substantial growth in their stock prices noted Jack Mallon, managing director of Mallon
Associates, an investment firm focusing on the security and anti-terrorism industries and a division of C.E. Unterberg Towbin.
The Mallon Global Security Index, comprising 175 security companies traded on stock exchanges around the world, rose 56
percent in 2003, outpacing the closely-tracked Standard & Poor's 500-stock index, which rose 26.4 percent, he said.
The sophisticated investor has perceived [U.S.-VISIT] as good news for the industry, he said. The question is will the homeland
security move take this industry to the next level?
Mallon has his reservations. It's a big plus, but it won't change the industry overnight. What will drive this business is a
reduction in the price of technology and developments that make it more accurate and cheaper. As those two trends further develop,
we can expect to see a proliferation of biometrics technology in many facets of our society.
While much of the biometrics industry is still maturing, one area poised for explosive growth is fingerprint scanning, according
to Paladin'sAndreassen. Fingerprint analysis has existed for over 100 years and is well understood, he noted, and agencies are
switching their databases away from traditional paper and ink fingerprinting systems.
From a biometrics point of view, the technology for this is getting better and better, Andreassen said. It will be the standard by
which every other technology is judged.
One company he likes is Florida-based Cross Match, a private firm that produces a fingerprint reader that is used by the U.S.
military in Iraq and in Afghanistan, by the U.S. government in its U.S.-VISIT program and to fingerprint prisoners and suspected
terrorists.
Other applications are less reliable according to Johnathan Tal, publisher of Homeland Security Research, a company in San
Jose, Calif., that follows the industry.
Facial-recognition technology, which maps the features of one face and compares it to those in a database of faces, have yet to
show they can operate outside a controlled environment, according to Tal. If it is used to try to identify an individual's face in a
crowded airport, for example, the technology often is not accurate enough, he said.
There is a tremendous investment opportunity in homeland security; the need is real and long-lasting and it will be with us for
some time. Biometrics is part of it, but we don't think the time is quite right for the technology, said Tal, adding that those companies
that have developed technologies are working to make them faster and more accurate.
Still, company executives remain sanguine about the industry's potential.
Seth Horn, chief financial officer of IQ Biometrix, reckons U.S.-VISIT has already led to a significant rise in orders from
law-enforcement agencies to which IQ Biometrix sells its widely used software program to create composite sketches of crime
suspects that can be quickly distributed to other policing agencies within the law-enforcement community. The biggest problem we've
had as a company is that police departments lack funding -- they need to buy patrol cars and guns before they can buy PCs and
software, Horn explained. But now, with the new homeland-security spending, they are getting bigger budgets for these sorts of things
and we have seen our revenue increase accordingly.
The Associated Press contributed to this report
2 of 3 1/5/2009 4:54 PM
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Web Publication
Copyright 2004 MSNBC.com

All Rights Reserved
3 of 3 1/5/2009 4:54 PM
EXHIBIT 49
Tom Ridge, Washington Speakers Bureau http://www.washingtonspeakers.com/speakers/speaker.cfm?speakerid=3894
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Tom Ridge
First Secretary of Homeland Security and
Distinguished Statesman Ridge Global LLC
Travels from: Washington, D.C.
Fees vary based on event location. Contact WSB.
Speech Topics
A Current Perspective of Global Events

The Honorable Tom Ridge has grown from a young sergeant in the
battlefields of Vietnam to one of the world’s pre-eminent statesman.
Experience marks a presentation that offers a perspective only this
respected and trusted leader can bring from his days as soldier,
congressman, governor and Cabinet secretary. As a participant on the
world stage, Ridge describes the new role that all democracies bring to
the international table and the increasing importance of collective
leadership in the world. In Ridge’s view, understanding the context of
current international influences on America and its allies is critical to
sustaining a vital and robust global economy and strong security. In this
presentation, Ridge opens the door to a commanding discussion of
current events, diplomacy, global engagement and international coalition
building as the world confronts critical foreign policy issues in the 21st
Century.
International Terrorism and the Future

As the first U.S. secretary of homeland security and the world’s first
terrorism czar, no one knows more about the state and scope of
international terrorism than Tom Ridge. An engaging and informative
speaker, the former secretary and two-term governor of Pennsylvania
addresses where the threat is now – and where it could come from
tomorrow. In this timely and compelling presentation, Ridge outlines
how countries, governments, organizations and businesses in the United
States and around the world are threatened by international terrorism,
and how they can best meet those threats. As well, Ridge shares what
he learned about leading a merger, acquisition and start-up within a
blitzing 100-day time frame. Ridge also shows how he set about
integrating business practices into a government organization and
“branding” the new security department so that its message became
part of the culture at large. Additionally, this astute international figure
discusses how leadership, communication and new advances in
technology can lead to a better and safer world.
Leadership Principles: Defined and Delivered

One of the world’s most visible leaders, Tom Ridge understands that
leadership, both individual and collective, requires that we think
differently about its meaning and methods. Leadership, he believes,
occurs at all levels, and requires more than position or title to drive
1 of 3 1/5/2009 6:16 PM
people and organizations closer toward their goals. Drawing from a

remarkable career, Ridge pulls from his varied experiences in Vietnam,
the U.S. Congress, the Pennsylvania statehouse, the U.S Cabinet and as
CEO of his own consultancy, Ridge Global LLC. In a substantive,
good-humored discussion, this consummate leader describes how to
create teams that communicate clearly and quickly, and appropriately
serve missions that will undoubtedly confront change, crisis and growth.
He presents an inspiring perspective that can benefit any individual or
team and propel both toward a more accomplished, strategic and
focused future.
Risk Intelligence: Manage Risk Before It Manages You

Tom Ridge, the nation's first secretary of the Department of Homeland
Security, offers a candid view of America’s national readiness and
response capabilities and compares that to the business challenge of
managing today’s sometime volatile economic and business climate.
Ensuring continuity, remaining operational and communicating
transparently are vital to managing an unforeseen event. Having led the
Unites States’ readiness and response efforts for nearly four years
following the aftermath of 9/11, Ridge details the primary strategies for
managing risk as well as responding in the event of a corporate or
organizational crisis.
And More . . .
On special request, Secretary Tom Ridge is available to speak on other
issues pertinent to his experience, including: intergovernmental
relationships, innovation in education, the value of public service,
restoring civil discourse to the political arena, and the safeguarding of
civil liberties and Constitutional principles in a new security
environment.
About Tom Ridge
With an extraordinary record and breadth of public service, success and

experience, Tom Ridge has become one of the most respected and
admired leaders in the world.
Trusted, Effective Leader: Tom Ridge was tapped by President George

W. Bush to become the United States’ first assistant to the president for
homeland security and later the country’s first secretary of a newly
created Department of Homeland Security, as well as the primary U.S.
liaison in the international fight against terror. A much-decorated
Vietnam veteran, Ridge understands what and where the threat is today
– and how this will affect the United States and its allies in the future.
Strategist and Visionary: Ridge draws from a lifetime of goal-setting

successes. As the 43rd governor of Pennsylvania, Ridge left a record of
rapid advances in economic development, technology, education, health
care and the environment. As the U.S.’s first homeland security chief, he
drove the biggest change management challenge of all time – quickly
integrating 180,000 people from nearly two-dozen agencies, creating a
culture of change within the new department and leading a national
effort to make America more secure. From the professional to the
personal, Ridge offers organizations and individuals the key strategies
for mission success and how to establish the vision to get there.
International Statesman: Ridge’s leadership following the tragic

events of 9/11 has generated sought-after world attention of his
perspective of the enemy, the battle and the outcome. In conversations
with audiences, he asserts that democratic societies must continue to
subscribe to foundational principles – engagement, economic viability
and the smart power of diplomacy. Yet this same foundation must
include collectively addressed security for the worlds’ citizens. The road
to this outcome is abundant with challenge. Ridge’s foreign policy
2 of 3 1/5/2009 6:16 PM
credentials yield a unique insight into this challenge and in addressing

the inextricable link between security and prosperity, and its positive
effect in stabilizing regions around the world.
1663 Prince Street, Alexandria, VA 22314 USA Info@WashingtonSpeakers.com 703.684.0555
3 of 3 1/5/2009 6:16 PM
EXHIBIT 50
Tom Ridge Speaker at Speakers.com for Corporate Events http://www.speakers.com/listing.asp?sid=2034
ABOUT SPEAKERS.COM SEARCH NEWS RESOURCES CONTACT US HOME
TOM RIDGE
Travels From State: DC
Travels From Country: United States
Keynote Fee Range: $$$$$
Tom Ridge became the nation’s first secretary of the Department of Homeland
Security on January 24, 2003. The creation of the country’s 15th Cabinet
department marked the largest reorganization of government since the Truman
administration, and another call to service for the former soldier, congressman and
governor of Pennsylvania.
During his tenure, Secretary Ridge worked with more than 180,000 employees
from a combined 22 agencies to create an agency that facilitated the flow of
people and goods, instituted layered security at air, land and seaports, developed
a unified national response and recovery plan, protected critical infrastructure,
integrated new technology and improved information sharing worldwide. He served
as secretary of this historic and critical endeavor until February 1, 2005.
On October 8, 2001, prior to being secretary of Homeland Security, he served as
the first assistant to the president for Homeland Security. Following the tragic
events of September 11, President Bush asked then-Governor Ridge to come to
Washington to develop and coordinate a comprehensive national strategy to
strengthen protections against terrorist threats and attacks in the United
States. His first duties included starting up the Office of Homeland Security and the
Homeland Security Council.
In recognizing Secretary Ridge for his service as the nation’s first Homeland
Security advisor and first secretary of Homeland Security, President Bush said of
Secretary Ridge: “In the fight against terrorism, he has played a vital role in
protecting the American people from a real and ongoing threat… He is a longtime
friend, and I thank him for his leadership and dedicated service to our country.
America is safer and our government is better able to protect our people because
of his hard work.”
Before the events of September 11, Secretary Ridge was twice elected governor
of Pennsylvania. He served as the state’s 43rd governor from 1995 to 2001.
Known for his commitment to high standards and results, Governor Ridge
delivered on his promise to make Pennsylvania "a leader among states and a
competitor among nations." His aggressive technology strategy helped fuel the
state's advances in economic development, education, health care and the
environment.
Secretary Ridge cut taxes every year he was in office. He created industry-led
greenhouse initiatives in advanced computing technologies and the life sciences
and signed into law the Education Empowerment Act, to help more than a quarter-
million children in Pennsylvania's lowest-performing schools. His education
technology initiatives brought anytime, anywhere learning to Pennsylvanians from
preschool to adult education.
During his years in the governor's office, the number of children receiving free or
low-cost health care through Pennsylvania's nationally recognized Children's Health
Insurance Program rose by 145 percent. Additionally, his Land Recycling Program
1 of 3 1/5/2009 6:18 PM
became a national model. He won passage of "Growing Greener," to make

Pennsylvania's largest environmental investment ever, nearly $650 million.
Born August 26, 1945, in Pittsburgh's Steel Valley, Secretary Ridge was raised in
a working-class family in veterans' public housing in Erie. He earned a scholarship
to Harvard, graduating with honors in 1967. After his first year at The Dickinson
School of Law, he was drafted into the U.S. Army, where he served as an infantry
staff sergeant in Vietnam, earning the Bronze Star for Valor, the Combat Infantry
Badge and the Vietnamese Cross of Gallantry.
After returning to Pennsylvania, he earned his law degree and was in private
practice before becoming assistant district attorney in Erie County. He was elected
to Congress in 1982. He was the first enlisted Vietnam combat veteran elected to
the U.S. House of Representatives and was overwhelmingly reelected by
Pennsylvania voters five times. Throughout his political career, he has never lost an
election.
After more than 25 years in public service, Secretary Ridge now consults on
security, economic development, technology, institution building, education and
other issues. He also is serving on public and private boards and is currently the
chairman of the National Organization on Disability; his nonprofit work also includes
service with the Council for Competitiveness and the Center for Excellence in
Government. He continues to contribute to matters concerning our nation’s
veterans and, along with Gen. Tommy Franks, serves as national cochairman of
the Flight 93 Memorial.
Throughout his public and private sector career, he has received numerous
awards, including the American Bar Association’s John Marshall Award, the
National Guard’s Harry S. Truman Award, the Pennsylvania Wildlife Federation’s
Conservationist of the Year Award, U.S.-Mexico Chamber of Commerce’s Good
Neighbor Award, the American Cancer Society’s prestigious National Medal of
Honor, the Champion of Public Television Award, the Intrepid Freedom Award, the
Esperanza Leadership Award, the Veterans of Foreign Wars’ Dwight D.
Eisenhower Award, the John F. Kennedy National Award and the Ellis Island
Medal of Honor. He also has been awarded honorary degrees and awards from
Carnegie-Mellon University, Bucknell University, Lafayette College, Elizabethtown
College, The University of Utah and other academic institutions.
Program Topics
Current Perspective of Global Events - The Honorable Tom Ridge has grown from a
young sergeant in the battlefields of Vietnam to one of the world’s pre-eminent statesman.
Experience marks a presentation that offers a perspective only this respected and trusted
leader can bring from his days as soldier, congressman, governor and Cabinet secretary. As
a participant on the world stage, Ridge describes the new role that all democracies bring to
the international table and the increasing importance of collective leadership in the world. In
Ridge’s view, understanding the context of current international influences on America and its
allies is critical to sustaining a vital and robust global economy and strong security. In this
presentation, Ridge opens the door to a commanding discussion of current events,
diplomacy, global engagement and international coalition building as the world confronts
critical foreign policy issues in the 21st Century.
Leadership Principles: Defined and Delivered - One of the world’s most visible leaders,
Tom Ridge understands that leadership, both individual and collective, requires that we think
differently about its meaning and methods. Leadership, he believes, occurs at all levels, and
requires more than position or title to drive people and organizations closer toward their
goals. Drawing from a remarkable career, Ridge pulls from his varied experiences in Vietnam,
the U.S. Congress, the Pennsylvania statehouse, the U.S Cabinet and as CEO of his own
consultancy, Ridge Global LLC. In a substantive, good-humored discussion, this consummate
leader describes how to create teams that communicate clearly and quickly, and
appropriately serve missions that will undoubtedly confront change, crisis and growth. He
presents an inspiring perspective that can benefit any individual or team and propel both
toward a more accomplished, strategic and focused future.
Risk Intelligence: Manage Risk Before It Manages You - Tom Ridge, the nation's first
secretary of the Department of Homeland Security, offers a candid view of America’s national
readiness and response capabilities and compares that to the business challenge of
managing today’s sometime volatile economic and business climate. Ensuring continuity,
remaining operational and communicating transparently are vital to managing an unforeseen
event. Having led the Unites States’ readiness and response efforts for nearly four years
2 of 3 1/5/2009 6:18 PM
following the aftermath of 9/11, Ridge details the primary strategies for managing risk as well
as responding in the event of a corporate or organizational crisis.
International Terrorism and the Future - As the first U.S. secretary of homeland security
and the world’s first terrorism czar, no one knows more about the state and scope of
international terrorism than Tom Ridge. An engaging and informative speaker, the former
secretary and two-term governor of Pennsylvania addresses where the threat is now – and
where it could come from tomorrow. In this timely and compelling presentation, Ridge outlines
how countries, governments, organizations and businesses in the United States and around
the world are threatened by international terrorism, and how they can best meet those
threats. As well, Ridge shares what he learned about leading a merger, acquisition and
start-up within a blitzing 100-day time frame. Ridge also shows how he set about integrating
business practices into a government organization and “branding” the new security
department so that its message became part of the culture at large. Additionally, this astute
international figure discusses how leadership, communication and new advances in
technology can lead to a better and safer world.
© COPYRIGHT 2009 SPEAKERS.COM, ALL RIGHTS RESERVED | TERMS OF USE | PRIVACY POLICY
3 of 3 1/5/2009 6:18 PM
EXHIBIT 51
EXHIBIT 52
Page 1
28 of 286 DOCUMENTS
The Associated Press State & Local Wire
May 26, 2006 Friday 4:03 AM GMT
Tom Ridge center opens in Erie after decade of

planning
BYLINE: By MICHAEL COWDEN, Associated Press Writer
SECTION: STATE AND REGIONAL
LENGTH: 499 words
DATELINE: ERIE Pa.
After nearly a decade of planning and construction, the $31 million Tom Ridge
Environmental Center at Presque Isle State Park opens to the public Friday.
The sprawling 65,000-foot complex a combination museum, research laboratory

and movie theater offers visitors a chance to learn about the nature of the
scenic peninsula before they hit the sand to soak up the sun at the popular
beach spot.
Located just outside the entrance to the park, the environmentally friendly
building also sports a 75-foot observation tower that provides stunning views of
Lake Erie and the wooded dunes of Presque Isle.
"It's the gateway to Presque Isle," said Ann Ditullio, a spokesman for the
Department of Conservation and Natural Resources. "Most people think it's just
seven miles of beautiful beach and don't know what else we have to offer."
Interactive exhibits detail the flora, fauna and geology of the park, with
particular emphasis on the native and migratory birds that inhabit it.
Park and tourism officials hope the center will promote Presque Isle as a
destination for eco-tourism, said Susan Smith, a spokeswoman for Erie-Allegheny
chapter of Earth Force, a national education and conservation group.
The peninsula is a major stopover for migrating birds, said Smith, who is
also a board member of the Presque Isle Audubon Society. During peak spring and
fall migration seasons, some birds stop on the peninsula from as far away as the
Arctic Circle and the rain forests of South America.
"On a good day, it looks like the trees are hanging with ornaments, but it's
really these migratory birds," Smith said. "And it's such a cacophony of bird
calls. It's an orchestra as well as a feast for the eyes."
Ditullio said the purple martin migration is particularly stunning.

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Tom Ridge center opens in Erie after decade of planning The Associated Press
State & Local Wire May 26, 2006 Friday 4:03 AM GMT
"You see thousands and thousands," she said. "They block out the sky when
they come out at night."
Besides the exhibits, the center includes a cafe, nature-themed art from
craftsmen like origami artist Michael LaFosse and the "Big Green Screen," a
four-story, 33-foot-wide movie screen that primarily shows nature films.
The center also features research laboratories used by scientists from U.S.
and Canadian universities. Tours of the labs are available daily, and visitors
can see Lake Erie marine life in the labs' swimming pool-sized aquariums.
Ridge, the former Pennsylvania governor and an Erie native, once called
Presque Isle the "jewel of the park system."
Ridge gave $25 million in state money for the center the largest sum allotted
to a state park during his administration on his final day as governor before
leaving for Washington to serve as the U.S. director of homeland security. The
remaining $6 million was released the administrations of Gov. Ed Rendell and
former Gov. Mark Schweiker.
"It's been a cooperative effort between three administrations," said Michael

DiBerardinis, DCNR's secretary.
On the Net:
Tom Ridge Environmental Center: http://www.trecpi.org/
Presque Isle Audubon Society: http://www.presqueisle.org/audubon/
LANGUAGE: ENGLISH

All Rights Reserved
EXHIBIT 53
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Erie Times-News (Pennsylvania)
Distributed by McClatchy-Tribune News Service
August 10, 2006 Thursday
College unveils public safety program

BYLINE: Scott Waldman, Erie Times-News, Pa.
SECTION: STATE AND REGIONAL NEWS
LENGTH: 485 words
Aug. 10--A police officer getting pinned between his cruiser and a vehicle he
has pulled over.
An airbag exploding in the face of a police officer whose cruiser was backed
into by a suspect vehicle.
A firefighter struggling with an oxygen tank as smoke fills a burning

building.
Those are some of the scenarios the newly created Mercyhurst College Center
for Public Safety will help prevent, said Thomas Ford, the school's director of
law enforcement education and training.
School and public safety officials on Wednesday morning announced the

creation of the center at a brief ceremony at the Michele and Tom Ridge Health
and Safety Building on the Mercyhurst North East campus.
The center, which will be at the Health and Safety Building, will consolidate
the school's existing public safety programs and will offer a two-year associate
degree in corrections and in fire science starting in fall 2007.
"You can't get enough training in those fields," Ford said.
Ford said that the training for public-safety officials is constantly

evolving. He said classroom education and practical training teach public-safety
officials how to stay safe.
The center will offer classes to a student base that includes

first-responders, police cadets, constables, corrections officers, probation and
parole agents, firefighters, public-safety executives and criminal-justice
associate degree students.
Public-safety programs already offered at the academy include the municipal

police academy, the corrections academy, constable training and criminal-justice
associate degree programs.
Page 2
College unveils public safety program Erie Times-News (Pennsylvania) August 10,
2006 Thursday
Mercyhurst recently earned state approval to establish a fire academy as part

of the fire-science degree. It will offer training at the Erie County fire
grounds off Route 98.
The center is being funded by tuition, partnerships with government agencies

and grant money, including a $350,000 federal grant secured through the Erie
County Public Safety Department.
Tuition for the program will cost $11,988 annually.
Mercyhurst President Tom Gamble said the move helps the college "put our
money where our mouth is" when it comes to integrating itself into the
community. He said that the college teaches social responsibility to its
students and that it will now better apply that philosophy to the community by
educating more of its public-safety officials.
Gamble said the program will also increase Erie's appeal by making it a more
safe place to live.
"If a community is not safe, then who wants to develop there, who wants to
move there?" Gamble said.
To see more of the Erie Times-News, or to subscribe to the newspaper, go to

http://www.GoErie.com. Copyright (c) 2006, Erie Times-News, Pa. Distributed by
McClatchy-Tribune Business News. For reprints, email
tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax
to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave.,
Suite 303, Glenview, IL 60025, USA.
LANGUAGE: ENGLISH
ACC-NO: 20060810-EI-COLLEGE-SAFETY-20060810
JOURNAL-CODE: EI
Copyright 2006 Erie Times-News

EXHIBIT 54
EXHIBIT 55
EXHIBIT 56
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U.S. Newswire
May 27, 2005 Friday 7:43 AM EST
Tom Ridge Joins Board of Center for the Study of

the Presidency
SECTION: NATIONAL DESK
LENGTH: 397 words
Former Homeland Security Secretary Tom Ridge has joined the Center for the
Study of the Presidency, a non-partisan Washington think tank, as a member of
the Center's Board of Trustees. The Center is headed by former presidential
counselor and NATO ambassador David Abshire.
A former two-term Governor of Pennsylvania and seven-term member of Congress,

Ridge was appointed director of the White House Office of Homeland Security in
October 2001 and the first Secretary of Homeland Security in November 2002.
"Tom Ridge has earned the nation's respect for his remarkable leadership,
dedication and achievements in a lifetime of public service," Abshire said. "In
a very short period, he greatly strengthened our country's ability to defend
itself against the threat of terrorism."
Abshire cited as an example Ridge's participation (and that of senior DHS

deputies) in a series of roundtables organized by the Center to facilitate an
exchange of ideas among the new agency and experts from leading think tanks, the
private sector, Departments of State and Defense, White House, national
academies, national labs and research universities. Abshire also commended
Ridge's suggestion that CSP create an interactive policy website on homeland
security. Oracle Corporation helped the Center do develop this website.
"Tom Ridge's extensive experience and unique insights on some of the most
critical issues facing our nation -- including the importance of finding ways
for the Administration and Congress to work together more effectively -- will
complement and enhance the Center's ongoing efforts to provide timely and
relevant analyses and counsel at the highest levels of government."
The Center today released its preliminary recommendations on how the

Page 2
Tom Ridge Joins Board of Center for the Study of the Presidency U.S. Newswire
May 27, 2005 Friday 7:43 AM EST
President can enhance cooperation with NATO allies in the war on terror (see
Maximizing NATO for the War on Terror at http://www.thePresidency.org.) It is
also working with government officials, business executives and scientists at
the nation's national laboratories on methods to reduce the possible threat of
nuclear weapons being smuggled into this country. Congress recently asked the
Center to develop a plan to improve global diplomacy. For a full list of Center
trustees, go to "About the Center" at http://www.thePresidency.org.
http://www.usnewswire.com/
Contact: Tom Kirlin of the Center for the Study of the Presidency, 202-872-9800
LANGUAGE: ENGLISH

All Rights Reserved
EXHIBIT 57
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12 of 111 DOCUMENTS
U.S. Newswire
May 17, 2005 Tuesday 1:47 PM EST
Tom Ridge Joins National Organization on

Disability Board; Former Homeland Security
Secretary Led Effort for Disability Preparedness
SECTION: NATIONAL DESK
LENGTH: 514 words
Less than a month after the Sept. 11, 2001 terrorist attacks, President Bush
appointed Tom Ridge as Homeland Security Advisor. Soon after assuming his White
House position, Governor Ridge met with N.O.D. leadership and gave his key
support to issues pertaining to the disability community. He continued his
regular dialogue with N.O.D. and as Secretary of the new Department of Homeland
Security, partnered with N.O.D.'s Emergency Preparedness Initiative last
September for the first ever conference on Emergency Preparedness for
Individuals with Disabilities. Under his leadership, the Department of Homeland
Security also implemented an aggressive program to hire people with
disabilities. "While all Americans face difficulties during emergencies, people
with disabilities and their families face a number of unique and difficult
challenges," the Secretary of Homeland Security said during his remarks at that
event. "The energy and determination and skills that people with disabilities
bring to these issues are a huge asset to our nation's broader emergency
preparedness effort."
"Gov. Ridge's staunch support for our efforts and his partnership were
critical to launching the program to ensure that Americans with disabilities
will be included in the planning process and protected during future
emergencies," said N.O.D. President Michael R. Deland. "His history of business
leadership and public service make Tom Ridge a superb ally and friend in
steering the course of N.O.D.'s work."
Commented Ridge, "N.O.D. has been a leader on emergency preparedness, but

also on many other efforts that I have seen benefit people with disabilities
throughout my career in government. I look forward to working with N.O.D. on
behalf of the more than 54 million Americans who have disabilities."
Page 2
Tom Ridge Joins National Organization on Disability Board; Former Homeland
Security Secretary Led Effort for Disability Preparedness U.S. Newswire May 17,
2005 Tuesday 1:47 PM EST
Prior to his appointment as Homeland Security Advisor, Tom Ridge was twice
elected Governor of Pennsylvania and served from 1995 to 2001. Gov. Ridge, 59,
is a 1967 honors graduate of Harvard and holds a law degree from the Dickinson
School of Law. He was drafted into the army during law school and served as an
infantry staff sergeant in Vietnam, where he earned a Bronze Star for Valor. He
has tinnitus and a hearing loss as a result of his military service and wears a
hearing aid. He was the first enlisted Vietnam combat veteran elected to the
U.S. Congress when he won that office in 1982, having previously been assistant
district attorney for Erie County.
"Tom Ridge's work throughout his career has benefited millions of citizens
with disabilities," said Dick Thornburgh, a founding Board Member of N.O.D. and
Ridge's fellow former Pennsylvania governor.
For further information, please contact N.O.D. at 202-293-5960.
---
The National Organization on Disability, founded in 1982, promotes the full

and equal participation and contribution of America's 54 million men, women and
children with disabilities in all aspects of life. For more information about
N.O.D.'s programs please visit http://www.nod.org.
http://www.usnewswire.com/
Contact: National Organization on Disability, 202-293-5960
LANGUAGE: ENGLISH

All Rights Reserved
EXHIBIT 58
http://www.nod.org/index.cfm?fuseaction=feature.showFeature&Feature...
January 2006 (To print, click the print icon on your browser
or choose print from the menu)
Tom Ridge to Chair National Organization on Disability Board

Former Governor and Homeland Security Secretary to Lead Prestigious Non-Profit Organization
WASHINGTON, D.C.— Tom Ridge, the former Governor of Pennsylvania who served
as the first U.S. Secretary of Homeland Security, will succeed Michael R. Deland as
Chair of the National Organization on Disability (N.O.D.)’s Board of Directors, the
nonprofit advocacy group announced today. Deland resigned as Board Chair, a position
he has held since 1995, to accept the role of N.O.D. President.
"Governor Tom Ridge's career-long support of disability issues and his close working
relationship with N.O.D., which commenced right after the tragedy of September 11th,
make him a natural to lead the N.O.D. Board in shaping the organization's future," said
N.O.D. president Michael R. Deland. "Governor Ridge is a dedicated public servant, proven leader and
good friend. All at N.O.D. look forward to the infusion of new energy and talent that he brings to this key
position."
Prior to his appointment as Homeland Security Advisor, Tom Ridge was twice elected Governor of
Pennsylvania and served from 1995 to 2001. Governor Ridge, 60, is a 1967 honors graduate of Harvard
and holds a law degree from the Dickinson School of Law. He was drafted into the army during law school
and served as an infantry staff sergeant in Vietnam, where he earned a Bronze Star for Valor. He has
tinnitus and a hearing loss as a result of his military service and wears a hearing aid. He was the first
enlisted Vietnam combat veteran elected to the U.S. Congress when he won that office in 1982, having
previously been assistant district attorney for Erie County.
Tom Ridge began working with N.O.D. soon after his appointment by President George W. Bush as
Homeland Security Advisor. Ridge met with N.O.D. leadership and continued his regular dialogue after
becoming Secretary of the Department of Homeland Security. He partnered with N.O.D.’s Emergency
Preparedness Initiative for the first ever conference on Emergency Preparedness for Individuals with
Disabilities. Under his leadership, the Department of Homeland Security also implemented an aggressive
program to hire people with disabilities.
Commented Ridge, “N.O.D. has been a leader on emergency preparedness, and also on many other efforts
that I have seen benefit people with disabilities throughout my career in government. I look forward to
working with N.O.D. on behalf of the more than 54 million Americans who have disabilities.”
For further information, please contact N.O.D. at 202/293-5960.
The National Organization on Disability, founded in 1982, promotes the full and equal participation and
contribution of America’s 54 million men, women and children with disabilities in all aspects of life. For
more information about N.O.D.’s programs please visit www.nod.org.
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USNEWS.com
August 28, 2008 Thursday
10 Things You Didn't Know About Tom Ridge

BYLINE: Stephanie Salmon
SECTION: NATION & WORLD; Campaign 2008 Vol. No.
LENGTH: 363 words
1. Thomas Joseph Ridge was born on Aug. 26, 1945, in Munhall, Pa. The son of a meat salesman who also sold
shoes on the weekend, Ridge grew up in a veterans' housing project in Erie, Pa.
2. Ridge was president of his high school class and played the lead in the school production of Arsenic and Old
Lace. He attended Harvard University on an academic scholarship and graduated with a degree in government in 1967.
During his years at Harvard, he returned to Erie each summer to work in construction. He received his J.D. from
Dickinson School of Law in 1972.
3. In 1968, Ridge was drafted into the Army. He served in Vietnam as a noncommissioned officer and was awarded
the Bronze Star. His service in Vietnam was curtailed when his appendix ruptured.
4. Hearing-impaired from birth, Ridge had the condition worsen as a result of his military service. He wears a
hearing aid. Ridge serves as chairman of the National Organization on Disability.
5. He married librarian Michele Moore in 1979. They have two children, Lesley and Tommy.
6. In 1980, Ridge was a Republican campaign organizer in Erie for George H. W. Bush's failed presidential bid.
The Bush family supported Ridge's successful 1982 candidacy for a House seat in a traditionally Democratic
Pennsylvania district--he won the election by only 729 votes. He was the first enlisted Vietnam combat veteran to be
elected to the House of Representatives.
7. Ridge served six terms in the House before being elected governor of Pennsylvania in 1994.
8. CNN anchor Lou Dobbs was a Harvard classmate and they often stayed up late playing Monopoly.
9. After the September 11 attacks, President George W. Bush asked Ridge to become the first Office of Homeland
Security adviser, overseeing the creation of what would become the Department of Homeland Security. During his
tenure at DHS, the color-coded terrorism alerts system was launched.
10. Since leaving government service, Ridge has served on several corporate boards, including those of Home
Depot, Exelon Corp., and Hershey.
Sources:
Biography Resource Center Online
New York Times
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10 Things You Didn't Know About Tom Ridge USNEWS.com August 28, 2008 Thursday
Washington Post
Chicago Tribune
St. Petersburg Times
Baltimore Sun
Financial Times
Almanac of American Politics
LANGUAGE: ENGLISH
PUBLICATION-TYPE: Web Publication
Copyright 2008 U.S. News & World Report

All Rights Reserved
EXHIBIT 60
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The Associated Press State & Local Wire
August 17, 2005, Wednesday, BC cycle
Ex-governor Ridge joins Flight 93 memorial

fundraising team
SECTION: State and Regional
LENGTH: 165 words
DATELINE: SHANKSVILLE, Pa.
Former Pennsylvania Gov. Tom Ridge is joining the effort to raise money for
the Flight 93 National Memorial.
Ridge has been named honorary co-chairman of an effort by the Families of

Flight 93 to raise $30 million dollars for the memorial, which the National Park
Service will build near Shanksville. United Airlines Flight 93, one of four jets
hijacked by terrorists on September 11, 2001, crashed near Shanksville, killing
40 passengers and crew.
Ridge was governor at the time of the attacks and later became President
Bush's first director of homeland security.
The Flight 93 Advisory Commission, which is conducting a national design

competition for the memorial, will announce the winning design on Sept. 7 in
Washington. A separate ceremony to mark the winning design will be held in
Shanksville on the fourth anniversary of the attacks.
Retired Army Gen. Tommy Franks is the other co-chair of the fundraising
effort. His involvement was announced two months ago.
LANGUAGE: ENGLISH

All Rights Reserved
The Honorable Thomas J. Ridge - Biography - Flight 93 National Memorial http://www.honorflight93.org/tom-ridge.cfm
Home Home > The Honorable Thomas J. Ridge - Biography
The Honorable Thomas J. Ridge - Biography
The Honorable Thomas J. Ridge

Honorary Co-Chair
Tom Ridge became the nation's first Secretary of the

Stay Connected to Department of Homeland Security on January 24, 2003.
the Campaign The creation of the country's 15th Cabinet Department
marked the largest reorganization of government since
Name the Truman administration and another call to service
for the former soldier, Congressman and Governor of
Pennsylvania.
Email
During his tenure, Secretary Ridge worked with more than 180,000-plus
Your information will
employees from a combined 22 agencies to create a border-centric agency that
remain confidential. facilitated the flow of people and goods, institute layered security at air, land
and seaports, developed a unified national response and recovery plan,
improved the sharing of information nationwide, protected critical
infrastructure and developed and integrated technology to further secure the
country. Tom Ridge served as Secretary of this historic and critical endeavor
until February 1, 2005.
On October 8, 2001, prior to being Secretary of Homeland Security, Tom Ridge

served as the first Assistant to the President for Homeland Security. Following
the tragic events of September 11th, President Bush asked then-Governor
Ridge to come to Washington to develop and coordinate a comprehensive
national strategy to strengthen protections against terrorist threats and attacks
in the United States. His first duties included standing up the Office of
Homeland Security and the Homeland Security Council.
In recognizing Secretary Ridge for his service as the nation's first Homeland
Security Advisor and first Secretary of Homeland Security, President Bush said
of Tom Ridge: "In the fight against terrorism, he has played a vital role in
protecting the American people from a real and ongoing threat. …He is a
long-time friend, and I thank him for his leadership and dedicated service to
our country. America is safer and our government is better able to protect our
people because of his hard work."
Before the events of September 11th, Tom Ridge was twice elected Governor of
Pennsylvania. He served as the state's 43rd governor from 1995 to 2001.
Known for his commitment to high standards and results, Governor Ridge
delivered on his promise to make Pennsylvania "a leader among states and a
competitor among nations." Governor Ridge's aggressive technology strategy
helped fuel the state's advances in economic development, education, health
care and the environment.
Governor Ridge cut taxes every year he was in office. He created industry-led
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The Honorable Thomas J. Ridge - Biography - Flight 93 National Memorial http://www.honorflight93.org/tom-ridge.cfm
Greenhouse initiatives in advanced computing technologies and the life

sciences and signed into law the Education Empowerment Act, to help more
than a quarter-million children in Pennsylvania's lowest-performing schools. His
education technology initiatives brought anytime, anywhere learning to
Pennsylvanians from pre-school to adult education.
During his years in the Governor's office the number of children receiving free
or low-cost health care through Pennsylvania's nationally recognized Children's
Health Insurance Program rose by 145 percent. Additionally, Governor Ridge's
Land Recycling Program became a national model. He won passage of "Growing
Greener," to make Pennsylvania's largest environmental investment ever,
nearly $650 million.
Born August 26, 1945, in Pittsburgh's Steel Valley, Governor Ridge was raised
in a working-class family in veterans' public housing in Erie. He earned a
scholarship to Harvard, graduating with honors in 1967. After his first year at
The Dickinson School of Law, he was drafted into the U.S. Army, where he
served as an infantry staff sergeant in Vietnam, earning the Bronze Star for
Valor, the Combat Infantry Badge and the Vietnamese Cross of Gallantry.
After returning to Pennsylvania, he earned his law degree and was in private
practice before becoming assistant district attorney in Erie County.
Tom Ridge was elected to Congress in 1982. He was the first enlisted Vietnam
combat veteran elected to the U.S. House of Representatives and was
overwhelmingly re-elected by Pennsylvania voters five times. Throughout his
political career, Tom Ridge has never lost an election.
After more than 25 years in public service, the Governor is now consulting on
security and risk-related matters, exploring business opportunities and serving
on several public and private boards. His work in the nonprofit area includes
the Council for Competitiveness, the Center for Excellence in Government and
the National Organization on Disability. He has maintained his interests in
matters concerning veterans and, along with Gen. Tommy Franks, serves as
national co-chairman of the Flight 93 Memorial.
Throughout his public and private sector career, Governor Ridge has received
numerous awards, including the American Bar Association's John Marshall
Award, the National Guard's Harry S. Truman Award, the Pennsylvania Wildlife
Federation's Conservationist of the Year Award, U.S.-Mexico Chamber of
Commerce's Good Neighbor Award, the American Cancer Society's prestigious
National Medal of Honor, the Champion of Public Television Award, the Intrepid
Freedom Award, the Esperanza Leadership Award and the Dwight D.
Eisenhower Award, the highest honor given by the Veterans of Foreign Wars.
Governor Ridge has also been awarded honorary degrees and other awards
from Carnegie-Mellon University, Bucknell University, Lafayette College,
Elizabethtown College, The University of Utah and other universities and
colleges.
Governor Ridge and his wife, Michele, the former executive director of the Erie
County Library system, reside in Washington, D.C., and have two children,
Lesley and Tommy.
© Copyright 2006–2008. Flight 93 Memorial Project. All Rights Reserved.

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Clinton Pollster Takes Helm of Global Firm http://www.washingtonpost.com/wp-dyn/content/article/2005/12/07/AR...
Clinton Pollster Takes Helm of

Global Firm
By Judy Sarasohn
Thursday, December 8, 2005; A31
M ark Penn , pollster extraordinaire to President Bill

Clinton, is crunching some new numbers. He has been
named the new worldwide chief executive of Burson-
Marsteller , a major global public relations company.
Penn is a founding partner of the opinion research firm

Penn, Schoen & Berland Associates (PSB), which
was acquired by WPP Group PLC , Burson's parent
company, four years ago. Burson, which earns more than
$200 million in revenue, announced yesterday that Penn succeeds Thomas R. Nides , who left to be Morgan
Stanley's chief administrative officer.
Although Penn, 51, is best known in Washington for his political work, he and Howard Paster , WPP
executive vice president for public relations, note that the vast bulk of Penn's work is corporate, for clients
such as Microsoft, Verizon, BP and Ford.
But Penn said in an interview that he will continue to work for Sen. Hillary Rodham Clinton (D-N.Y.), as well
as do corporate work for other clients. PSB will be a division of Burson, and Penn will remain its president;
partner Mike Berland becomes chief executive of PSB.
"I won't be giving up politics. . . . To put me just in administration would be a loss," Penn said.
Paster says the global company is in good shape and Penn's job is to provide innovative, strategic thinking to
move it even further forward. Or, as Paster said, "knock it into orbit."
Chemistry Council's Realignment Underway
Five months after taking the helm of the American Chemistry Council -- and four years after the group
merged with the American Plastics Council -- Jack N. Gerard has unveiled his plan (mostly) to make the
trade group into a lobbying power.
The realignment of the ACC, which has been in turmoil for most of the time since the merger, is not without
pain. Late last week, 41 employees were wished well on their retirement or new opportunities, or otherwise
shown the door. In-house, people were transferred to make better use of their skills or to emphasize certain
issues.
The ACC, which has about 212 remaining staff members, has dropped from 13 to five vice presidents, and
there will be only one senior vice president for advocacy -- Gerard is looking for "a heavy hitter" for that job.
Two ACC lobbyists remain: Martin Durbin and Robert Flagg .
Among those leaving ACC, Charles W. Van Vlack , executive vice president, is retiring after 25 years,
effective March 4. Rodney Lowman , executive vice president, left Friday to become president of the
Abundant Forest Alliance, a new trade association for paper and forest products. Clifford T. "Kip" Howlett ,
a vice president and executive director of the Chlorine Chemistry Council, retired Friday. Lobbyists Mary
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Clinton Pollster Takes Helm of Global Firm http://www.washingtonpost.com/wp-dyn/content/article/2005/12/07/AR...
Bernhard and Claude Boudrias are among the 41 leaving.
Gerard, who plans to review the group's use of outside lobby shops, said the realignment will bolster ACC's
advocacy mission. In an interview in October, Gerard said the ACC needs to become more political and to
mobilize its rank and file. "It's been clear to me that the American Chemistry Council has been punching
below its weight," he said then.
Ridge Says He's Not Lobbying
Active on the speaking tour circuit and looking into some business opportunities, former homeland security
secretary Tom Ridge has joined the Council on Competitiveness as a "distinguished fellow." What that means
is he will be explaining to U.S. executives that "increased security creates market opportunities . . . and
preserves competitiveness," according to the council.
Although the council says that Ridge will be carrying its message of homeland security as a competitiveness
issue to industry and policymakers, Ridge says he will not be lobbying the Hill or the administration. "There's
nothing wrong with the lobbying business. . . . But it's not something that I'm a part of," Ridge said.
Financial Dynamics Acquires Dittus
Financial Dynamics , a business communications firm with offices around the world, has acquired
homegrown Dittus Communications .
Dittus Communications, led by Gloria Dittus , will remain a separate entity under the FD umbrella. A
12-year-old PR shop with more than 50 professional staffers, Dittus specializes in public affairs, issue
advocacy and grass-roots campaigns. Its clients have included Home Depot, Qwest and Tyco.
"I never did start my company to sell it. I love this business," Dittus said. But she was persuaded to sell to FD
because "they sounded a lot like us. . . . I can focus on clients."
FD's Washington office, opened nearly two years ago, is led by Stanley Collender , a veteran of the House
and Senate budget committee staffs.
Career Moves
Grass-roots specialist Les Francis , vice president for communications and public affairs at the Educational
Testing Service, is joining Goddard Claussen Strategic Advocacy as executive vice president, effective Jan.
1. Earlier, Francis was chief of staff to then-House member Norman Y. Mineta (D-Calif.), deputy chief of
staff to President Jimmy Carter and executive director of the Democratic National Committee.
Jean M. Bunton will leave Policy Impact Communications Inc. for the Securities Industry Association, where
she'll be vice president for strategic communications. Bunton earlier was an aide to President George H.W.
Bush.

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2 of 2 12/28/2008 3:15 PM
EXHIBIT 63
Official Site of the Governor of Virginia http://www.governor.virginia.gov/MediaRelations/NewsReleases/viewR...
For Immediate Release Contact
April 19, 2007 Gordon Hickey

804.225.4260
804.291.8977 (cell)
Governor Kaine Announces Panel Will Independently Review Virginia Tech Tragedy
– Retired State Police Superintendent Massengill will lead panel –
RICHMOND – Governor Timothy M. Kaine today provided additional information on the scope and timeline of the independent review of the circumstances surrounding Monday’s tragedy at Virginia Tech.
The review panel, which will be led by retired Virginia State Police Superintendent Col. Gerald Massengill, also will include former U.S. Secretary of Homeland Security Tom Ridge; nationally-recognized
experts in higher education and mental health also have agreed to serve.
“I appreciate the willingness of these individuals to lend their time and expertise to this critically important review of the recent terrible events at Tech,” Governor Kaine said. “This panel will provide a
thoughtful, objective analysis of the circumstances leading up to, during, and immediately after Monday’s horrible events. What we learn could result in fresh ideas that will help bolster the safety of our
young people on campuses in communities across the country.”
Governor Kaine said the panel would begin its work as soon as possible, and it is anticipated a preliminary review could be completed by this fall.
The Governor announced these panel members today. Additional members could be announced later:
Retired Virginia State Police Superintendent Col. Gerald Massengill will chair the panel. He led the state's law-enforcement response to the September 11, 2001 attack on the Pentagon in Northern
Virginia and the 2002 sniper attacks. Massengill retired in 2003 after 37 years in the Virginia State Police, and came out of retirement in 2005 to serve as interim director of the Department of Game and
Inland Fisheries for 18 months.
Tom Ridge served as the first U.S. Secretary of Homeland Security (2003-2005). He previously served as Governor of Pennsylvania (1995-2001) and a member of the U.S. House of Representatives
(1983-1995). He currently consults on a variety of national and international issues.
Gordon Davies served as Director for the State Council of Higher Education for Virginia for 20 years (1977-1997). He previously served as President of the Kentucky Council on Postsecondary
Education (1998-2002), and recently directed a project to improve state higher education policy making.
Roger L. Depue, Ph. D., has over 20 years experience at the FBI, most recently as Administrator at the FBI National Center for the Analysis of Violent Crime. Depue is the founder, past president and
CEO of The Academy Group, Inc., a forensic behavioral sciences services business for consultation, research, training, and investigation of aberrant and violent behavioral problems.
Aradhana A. “Bela” Sood, M.D., FAACAP is Chair of Child and Adolescent Psychiatry and Medical Director of the Virginia Treatment Center for Children at VCU Medical Center.
Dr. Marcus L. Martin is the Assistant Dean for the School of Medicine at the University of Virginia. He is also a professor in the Department of Emergency Medicine. Martin previously served as the
Chairman for the Health System at the University of Virginia, Department of Emergency Medicine.
###
Office of the Governor Timothy M. Kaine

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EXHIBIT 64
Board of Advisors http://www.nationalinfantryfoundation.org/advisors.shtml
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About the Foundation | Foundation Goals | Legacy | Board of Directors | Board of Advisors
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National Advisory Board

Gen. Edwin Burba (Ret), LTG Jared L. Bates (Ret)
Chairman United States Army
United States Army
Howard "Bo" Callaway Gen. John Abizaid

Ida Cason Callaway Foundation United States Army
Judge Aaron Cohn MG Carl F. Ernst (Ret)

Chattahoochee Judicial Circuit United States Army
LTG Harold T. Fields (Ret) Gen. John W. Foss (Ret)

United States Army United States Army
LTG David E. Grange (Ret) Gen. Alexander Haig (Ret)

Mrs. Richard Hallock Gen. William Hartzog

United States Army
MG Lincoln Jones (Ret) SMA Richard A. Kidd (Ret)

MG Willard Latham (Ret) LTG John LeMoyne (Ret)

MG Kenneth C. Leuer (Ret) Gen. James J. Lindsay (Ret)

United States Army
United States Army
Read Bio
Ms. Alicia Laramy Gen. Bill Livsey (Ret)

Wachovia Bank United States Army
Gen. Barry McCaffrey (Ret) Robert S. Poydasheff

United States Army United States Army (Ret)
Mayor, Columbus, Georgia
Read Bio
Col. Ralph Puckett (Ret) LTG Ben Register (Ret)

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Tom Rabaut Gen. William R. Richardson

United Defense (Ret)
United States Army
Dr. Carl Savory Gov. Tom Ridge

Hughston Orthopedic Hospital Ridge Global, LLC
Gen. Norman Schwarzkopf

(Ret) Col. Mike Sierra (Ret)
LTG Michael F. Spigelmire LTG Mike Steele

(Ret) United States Army
United States Army
LTG Orwin C. Talbott (Ret) LTG Robert L. Wetzel (Ret)

Mr. William Turner (Ret) Mr. Jim Weaver (Ret)

W.C. Bradley Company The Gordon and Mary Cain Foundation
MG Jerry White (Ret) LTG John Wright (Ret)

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EXHIBIT 65
About the Foundation http://www.nationalinfantryfoundation.org/about_foundation.shtml
Home About the Foundation Search | Site Map | Feedback
About the Foundation | Foundation Goals | Legacy | Board of Directors | Board of Advisors
About the Foundation
The National Infantry Foundation is a not-for-profit 501(c)(3) charitable corporation,

formed in 1998 to plan, build and operate a new National Infantry Museum.
Work on this project began when

community leaders sought ways to
recognize Fort Benning’s role as The
Home of the Infantry. A passionate
few went to work right away,
conducting business from their cars.
The project soon became a full-time
effort, requiring the help of others.
Organizers hired world renowned World War II era 48-star flag.
museum consultant Lord Cultural
Resources to put the vision on paper. Lord met with all the players before drafting a
Master Plan.
The plan calls for building the new museum on a 200-acre site just inside the main
gate to Fort Benning. It will be easily accessible to the post and public alike.
Admission to the galleries and most of the park’s features will be free.
The National Infantry Museum and Heritage Park will reflect the values that are the
hallmark of the U.S. Army Infantry: loyalty, duty, respect, selfless service, honor,
integrity, and personal courage.
The Foundation's goals are to educate, honor and preserve. The museum will teach
our children and generations to come of the Infantry's legacy of valor and sacrifice.
It will honor the soldiers themselves for their selfless service to our country. And it
will preserve for all time the artifacts that so poignantly tell their stories.
The National Infantry Foundation is grateful for the support from our partners in this
project: the National Infantry Museum, the National Infantry Association, the Center
of Military History, the Command Group at Fort Benning, and representatives from
the City of Columbus, the Chamber of Commerce and the private sector. Special
thanks go to our Boards of Directors and Advisors for their dedication and support in
making this project come to life.
© 2007 National Infantry Foundation. All rights reserved. Search | Site Map | Feedback
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Board of Trustees
Honorary Co-Chairs
George H. W. Bush
Jimmy Carter
William Jefferson Clinton
Chair
John D. Macomber
JDM Investment Group
Vice Chairs
Patrick W. Gross
The Lovell Group
Maxine Isaacs
John F. Kennedy School of Government
Treasurer
Joseph E. Kasputys
Global Insight, Inc
Secretary
J. T. Smith II
President and CEO
Patricia McGinnis
Trustees
Dennis W. Bakke Suzanne Nora Johnson

Imagine Schools Goldman, Sachs & Co
Colin C. Blaydon Gwendolyn S. King

Dartmouth College Podium Prose
Amos Tuck School of Business
Richard E. Cavanagh Susan R. King

The Conference Board Carnegie Corporation of New York
William F. Clinger, Jr. Robert G. Liberatore

Johns Hopkins University Chrysler Corporation
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Abby Joseph Cohen Kenneth Lipper

Goldman, Sachs & Co Lipper & Company, Inc
Robert H. Craft, Jr. Norman Mineta

Sullivan & Cromwell Hill & Knowlton
Thomas Dohrmann Edward Montgomery

McKinsey & Company University of Maryland
William H. Donaldson Susan Neely

Former SEC Chairman American Beverage Association
Leslie C. Francis Sandra Day O'Connor

ETS Former Supreme Court Justice
William Galston Tom Ridge

The Brookings Institution Former U.S. Secretary of Homeland Security
Dan Glickman Charles O. Rossotti

Motion Picture Association of America The Carlyle Group
Lee H. Hamilton George P. Shultz

Woodrow Wilson International Hoover Institution
Center for Scholars Stanford University
Edwin L. Harper Rodney E. Slater

Fortis, Inc. Patton Boggs LLP
James F. Hinchman John C. Whitehead

National Research Council Lower Manhattan Development Corporation
Arthur H. House James Lee Witt

Webster Bank James Lee Witt Associates
Past Chairs and Vice Chairs

Alan K. Campbell William A. Morrill
Caliber Associates
Louis J. Gambaccini Paul H. O'Neill

Alan M. Voorhees Transportation Center, Rutgers Retired Chairman and CEO, Alcoa
University
David O. Maxwell Frank A. Weil

Abacus & Associates, Inc
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EXHIBIT 68
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About the Council

Founded in 1983, the Council for Excellence in Government is a non-profit, non-partisan organization that works
to improve the performance of government at all levels; and government's place in the lives and esteem of
American citizens. With its experienced staff, network of experts and members, and diverse partners, the Council
helps to create stronger public sector leadership and management, driven by innovation and focused on results;
and increased citizen confidence and participation in government, through better understanding of government
and its role. More Information
Program Highlight How Can I Join?

Excellence in Government Fellows Program If you are a former government leader, you may
More Information join the Council as a Principal. To become a
Principal, an individual is nominated by a
colleague. Individuals who qualify are business,
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Our Corporate Members play a critical role

in--and benefit from--our work to promote
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Exhibits - Tom Ridge, Former Secretary of Homeland Security

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Exhibits - Tom Ridge, Former Secretary of Homeland Security

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The Advocate (Baton Rouge, Louisiana)

January 23, 2003, Thursday METRO EDITION

Ridge confirmed in Senate vote

LENGTH: 394 words

WASHINGTON - The Senate confirmed Tom Ridge as homeland security chief

Ridge, 57, will head a department that originated in legislation signed by

It eventually will be composed of 170,000 civil servants now working at 22

The Department of Homeland Security's headquarters will be at a secure office

Secretary of the Homeland Security Department, a new Cabinet post

Born: Aug. 26, 1945, in Munhall, Pa., a Pittsburgh suburb

1967 Bachelor's degree with honors, Harvard University

1972 Law degree, Dickinson Law School

1968-70 Army infantry staff sergeant in Vietnam;

awarded Bronze Star for Valor

1979-82 Assistant district attorney, Eric County, Pa.

1983-95 Six terms in U.S. House of Representatives

1995-2001 Governor of Pennsylvania

2001-03 Head, Office of Homeland Security

Source: Pennsylvania Governor's Office AP

SUBJECT: NATIONAL SECURITY (92%); SPECIAL INVESTIGATIVE FORCES (91%); US FEDERAL

LOAD-DATE: January 23, 2003

GRAPHIC: Biographical box with an enclosed mug of Tom Ridge (Source:

Copyright 2003 Capital City Press

The Weekly of Business Aviation

February 21, 2005

CHERTOFF TAKES REINS OF DHS

SECTION: News; Pg. 85 Vol. 80 No. 8

LENGTH: 127 words

LOAD-DATE: February 24, 2005

Copyright 2005 The McGraw-Hill Companies, Inc. http://www.mcgrawhill.com

June 18, 2006

Former Antiterror Officials Find Industry Pays Better

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

Laws and Loopholes

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

Correction: June 21, 2006

Copyright 2006 The New York Times Company

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

http://www.nytimes.com/2006/06/18/washington/18lobby.html?_r=1&sq=eric lipton, june ... 6/16/2008

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