1. Business Case Summary June, 1993

2. 5/26/2016 - 2 - Confidential Approach & Assumptions Financial information was gathered from XXXX historical results (1Q93) and published projections Numbers used in estimated benefits calculations were validated with numerous XXXCI financial work-withs Estimated benefits were assessed within the context of the findings Opportunities identified were quantified and validated with the appropriate XXXX individuals Estimated benefits are quantified conservatively by design and effort was made to ensure double-counting did not occur 1350 employees are involved in the product development process 1 Calculations involving employee costs per year (220) use the following numbers 2 –Low: $ 65,000 per year (salary) –Medium:$ 87,000 per year (salary + benefits + RE) –High:$156,000 per year (fully loaded employee cost) 1 Gemini Activity Map; validated by Margaret Burke 2 SRCI 1Q93 Financial Reports; validated by Paul Douglas, Margaret Burke and Mike Lowe

3. 5/26/2016 - 3 - Confidential Current State of Business Raises Concerns With XXXX’s Ability to Support These Owner Company Challenges A $36M gap between funding and project expense still exists Additional over-runs in excess of $25M were identified Underspending on key programs is a key issue Measures and key performance indicators are unclear The budget process is disconnected There is a lack of competitive focus and strategic direction

4. 5/26/2016 - 4 - Confidential Findings From the A&D Identify Opportunities to Meet These Challenges

5. 5/26/2016 - 5 - Confidential How As Is To Be IntangibleIntangible Protecting Share & Growing New Business Will Require Significant Change Slow - to - market with product introductions World class product development cycle time CPPD process re-engineering Unfocused development efforts Mobilization against critical deliverables Portfolio Governance Re-engineering Activity duplicationClear, efficient roles and responsibilities Organization effectiveness/process re- engineering implementation Lack of decision support systems Best In Class project management/KSI systems Competitively reactiveVisionary market leader Leadership developmentUnder-leveraged leadership Dynamic leadership, actively displayed and acknowledged throughout organization Leadership development Management support system development Invigorated, empowered workforce Cultural change through project role modeling; Organizational effectiveness implementation TangibleTangible Low morale

6. 5/26/2016 - 6 - Confidential New Product #1 New Product #3 New Product #2 Specifically, XXXXX Must Address the Following Areas Portfolio Prioritization Procurement Management Cycle Time Reduction Resource Optimization Duplication Increased Efficiency Increased Effectiveness Leveraged Resources New Product #1

7. 5/26/2016 - 7 - Confidential Sample Screening Uncovers Potential Redeployment of $2.3- 5.7M Worth of Employee Resources Additional analysis must be undertaken to determine which products out of the entire portfolio represent redeployment opportunities Sample projects screened LowMediumHigh Projects failing screening process888 Product development employees dedicated to sample projects353535 Employee cost$65K$87K$156K Financial impact$2.3M$3.0M$5.7M Opportunity range $2.3M - $5.7M LowMediumHigh Total Product Development employees135013501350 Estimated percent of sample projects failing screen*5%5%5% Employee cost$65K$87K$156K Financial impact$4.4M$5.8M$10.5M Sample Portfolio Screening Results Potential opportunity after screening entire portfolio * Results in past Gemini projects have shown prioritization opportunities ranging from 5-75%

8. 5/26/2016 - 8 - Confidential Diagnostics Uncovered Product Development Delays Relating to... Opportunities for cycle time reduction were found in all segments of the value chain Project Delays Gating Process Technical Misalignments Governance Process Ineffective Product Management Capital Funding Vendor Commitments Misalignment with ODA Non-Value Added Time

9. 5/26/2016 - 9 - Confidential Aggregate Findings Indicate A 12-18 Month Reduction in Cycle Time Is Possible Average Cycle Reduction Opportunity: 2.8 - 5.1 mos. 1 - 1.5mos. gating 1mos. technical misalign 3mos. non-value time 6 - 15mos. Enhanced Card Services 5.4 - 9.4 mos. 1 - 1.5mos. gating 1mos. technical misalign 3mos. non-value time 3 - 9mos. AIN 12 - 24mos. Frame Relay 12 - 18mos. Access Node 2.7 - 3.0 mos. 1 - 1.5mos. gating 1mos. technical misalign 3mos. non-value time 6mos. AIMS.911 1.9 - 2.7 mos. 1 - 1.5mos. gating 1mos. technical misalign 2mos. ineffective project management 3 - 8mos. vendor commitments Centrex low end display terminal Vantage 48 Key systems Universal terminal Sources: All A&D diagnostics Specific Areas of Cycle Delays:

10. 5/26/2016 - 10 - Confidential Diagnostics Uncovered a Less Than Optimal Usage of Resources Throughout the Product Development Value Chain Ineffective projects - lack of market focus Product management inefficiency Duplication of work among PMGs Technology push inefficiency Inefficiency from continuous portfolio rationalization Project management inefficiency Rework Duplication of ODA/SRCI work Inadequate screening process/procedures Duplication of planning

11. 5/26/2016 - 11 - Confidential Optimizing Resources Could Yield More Than $5M Duplication of planning, projects and other efforts among PMGs 12-13 Project management inefficiency/churn 13-22 Ineffective screening of projects 9-18 Duplication of ODA/SRCI work 26-29 Prioritization of ODA/SRCI work Source: White papers, Focus Interviews; PD&I Interviews; Probes Non-optimized resources mapped against PD&I value chain PeopleImpact ($M) $1.0M-$1.2M $1.2M-$1.9M $0.8M-$1.5M $2.3M-$2.5M 61.3-81.8$5.3M-$7.1M Overall Impact –

12. 5/26/2016 - 12 - Confidential 1993 XXXX External Supplier Expense Totaled $173M Source: SRCI PMG Expense breakdown Nancy Berthiaume (4/27/93), Dave Glenville External R&D $55M Other $23M ODA $63M Thus, 33% of XXXXX’s total budget ($528M) is spent on external suppliers Telecom $20M RE $12M

13. 5/26/2016 - 13 - Confidential XXXX Can Capture Significant Benefits by Putting Procurement Processes In Place to Effectively Manage These Costs Purchasing department has limited resources –Only one person in the purchasing department –No apparent comprehensive procurement strategy exists »We only attempt to manage non-Bell costs Heavy reliance on related suppliers often sub-optimizes procurement processes –Gemini experience reveals that 5% overpayment is common in such situations Reducing procurement costs by 5% would yield $9.0M

14. 5/26/2016 - 14 - Confidential Intangible Benefits - Building the Base for Success A stable organization with motivation and movement in one clear strategic direction Effective and consistent decision making Improved customer and product focus A new XXXX culture Motivated, forward looking workforce with improved employee morale Effective and appropriate key performance indicators and performance measurements Improved product quality in the marketplace and increased credibility with customers Defined and understood interfaces Set roles, responsibilities and accountabilities Appropriate organization changes

15. 5/26/2016 - 15 - Confidential Implementing A Performance Enhancing Culture Can Provide Significant Financial Benefit Average for firms with performance enhancing cultures Average for firms with low performance cultures *Source: Kotter, Heskett (1992) The Economic and Social Costs of Low Performance Cultures* (1977 - 1988) Revenue Growth Employment Growth Stock Price Growth Net Income Growth 682% 282% 901% 756% 166% 36% 74% 1%

16. 5/26/2016 - 16 - Confidential Benefits Summary Expense Reduction & Avoidance and Employee Redeployment will meet or exceed total cost of Gemini fees and expenses by year end 1994 Portfolio Prioritization $5MM+ Duplication $5MM+ Procurement Cost Reduction $9MM+ $50MM+ Cycle Time Reduction 12-18 months (Revenue and cost benefits of $30M+)