1. RealD The new 3D

2. About RealD The company licenses 3D technologies to various clients Largest 3D theater company Makes the projectors and glasses Founded in 2003 Market Cap: $1 Billion NYSE

3. IPO Went Public July 16 th 2010 Issued stock to pay off some debt Raised more money then expected Shares priced at $16/share Opened at $19.55/share Quarterly release due today Nov. 2 nd

4. 3D Industry “3D theatrical releases have been the single largest driver for theaters who have installed digital screens over the past year, with 80% growth rate” (Galas) “3D is the future of movies” (Time Magazine) Attendance in 3D movies is up and 2D movies is down More theaters switching to 3D Avatar earned over $2.7 billion Avatar 2 and 3 are in the making Jackass 3D earned $50 million opening weekend

5. http://www.filmofilia.com/wp-content/uploads/2010/03/international-3d.jpg

6. Market Saturation RealD has 1,972 theaters in U.S. Roughly 3,000 theaters in U.S. Only a few screens at each theater Only 219 theaters in Asia A lot of room for growth

7. Product Segments CinemaProjectors Exclusive agreement with Sony GlassesProfessionalNASA Helped pilot the Mars Rover Design/ArchitectureGovernment/Defense Movie making tools Residential Coming 2012

9. Predicted Growth of 3D TVs 3D-Display-Info.com

10. Competitors IMAX (IMAX) 3D equipment is more expensive 3D screens are generally larger and do not fit into more theater screens Dolby (DLB) Company focuses on sound technology not 3D Does not have the history or experience that RealD does

11. As Reported Annual Income Statement Report Date03/26/201003/27/200903/31/2008 ScaleThousands Total revenue149,84639,67523,378 Total cost of revenue140,60327,10713,500 Gross margin9,24312,5689,878 Total operating expenses43,47027,86426,483 Operating income (loss)(34,227)(15,296)(16,605) Interest expense1,7309491,257 Other income (loss)(1,112)100(7) Income (loss) before income taxes - domestic(41,405)(15,795)(17,869) Income (loss) before income taxes - foreign4,336(350)- Loss from continuing operations before income taxes(37,069)(16,145)(17,869) Current state income taxes785020 Current foreign income taxes2,538143- Total current income taxes2,61619320 Deferred federal income taxes-26- Deferred foreign income taxes64-- Income tax expense2,68021920 Income (loss) from continuing operations(39,749)(16,364)(17,889) Loss from operations, net of tax--(508) Loss on sale of discontinued operations, net of tax--(11,288) Discontinued operations, net of tax--(11,796) Net income (loss)(39,749)(16,364)(29,685)

12. As Reported Quarterly Income Statement Report Date06/25/201006/26/2009 1st Quarter CurrencyUSD ScaleThousands Total revenue64,52025,564 Total cost of revenue46,61822,701 Gross margin17,9022,863 Total operating expenses13,3149,033 Operating income (loss)4,588(6,170) Interest expense519282 Other income (loss)6,610(10) Loss from continuing operations before income taxes10,679(6,462) Income tax expense827527 Net income (loss)9,852(6,989)

13. Valuation June 30th, 2010June 30th, 2009 EBIT$4,588-$6,170 Growth Rate174% Stock Price$22.09 Stock Price*Growth Rate$38.44 WACC20% Growth Rate Discounted 8 Months$33.67

14. Conclusion We own no stocks like this A lot of room for growth in RealD Home Televisions Asian Theaters U.S. Theaters Stock is undervalued Suggestion= 225 shares @ Market Roughly $4,700