Mike New man Mike New man Mike New man Mike New man Mike New man - PowerPoint PPT Presentation

Mike New man Mike New man Mike New man Mike New man Mike New man Mike New man Mike New man Mike New man SVP & Chief Financial Officer SVP & Chief Financial Officer

4Q 2002 Sales 4Q 2002 Sales • Comparable Store Sales +2% • Comparable Store Sales +2% • Total Sales (-1%) • Total Sales (-1%) • Areas of Strength • Areas of Strength • Portable Computing • Portable Computing • Computer Accessories • Computer Accessories • Photography • Photography • DVD Players • DVD Players • Select Toys & Giftables (e.g. Zip Zap Micro RC Cars, Environizer) • Select Toys & Giftables (e.g. Zip Zap Micro RC Cars, Environizer) • Areas of Weakness • Areas of Weakness • Sprint PCS Handset Unit Sales • Sprint PCS Handset Unit Sales • Most Radio Control Toys • Most Radio Control Toys • Direct-to-Home Satellite TV • Direct-to-Home Satellite TV • Desktop Computers • Desktop Computers

Long-Term Financial Model 2003 – 2005 Long-Term Financial Model 2003 – 2005 Base Case Base Case Sales 2% to 3% Sales 2% to 3% GM Rate 70 to 80 bps/yr GM Rate 70 to 80 bps/yr SG&A Growth 1% to 2% SG&A Growth 1% to 2% Operating Income Growth 10% to 12% Operating Income Growth 10% to 12% EPS Growth 13% to 15% EPS Growth 13% to 15%

2003 E.P.S. Goal Predicated In Part Upon Vendor 2003 E.P.S. Goal Predicated In Part Upon Vendor Initiatives and Stock Buyback Initiatives and Stock Buyback $1.68 $1.68 0.08 0.07 $1.64 $1.64 (0.07) $1.60 $1.60 0.03 $1.56 $1.56 0.10 $1.52 $1.52 13% - 15% $1.48 13% - 15% $1.48 E.P.S. E.P.S. $1.44 Growth $1.44 Growth $1.40 $1.40 2002 EPS 2003 EPS 2002 EPS 2003 EPS Base Sales +2% Price/Mkdwns Vendor Inflation Buyback Base Sales +2% Price/Mkdwns Vendor Inflation Buyback

Long-Term Financial Model 2003 - 2005 Long-Term Financial Model 2003 - 2005 Stretch Case Stretch Case Sales 2% to 3% 4% to 5% Sales 2% to 3% 4% to 5% GM Rate 70 to 80 bps/yr 90 to 100 bps/yr GM Rate 70 to 80 bps/yr 90 to 100 bps/yr SG&A Growth 1% to 2% 2% to 3% SG&A Growth 1% to 2% 2% to 3% Operating Income Growth 10% to 12% 22% to 24% Operating Income Growth 10% to 12% 22% to 24% EPS Growth 13% to 15% 25% to 30% EPS Growth 13% to 15% 25% to 30%

2003 E.P.S. Stretch Goal Predicated In Larger Part 2003 E.P.S. Stretch Goal Predicated In Larger Part Upon Initiatives Other Than Sales Upon Initiatives Other Than Sales $1.80 $1.80 0.10 0.12 $1.75 $1.75 (0.07) 0.03 $1.70 $1.70 $1.65 $1.65 0.05 $1.60 $1.60 0.15 $1.55 $1.55 25% E.P.S. 25% E.P.S. $1.50 $1.50 Growth Growth $1.45 $1.45 $1.40 $1.40 2002 2003 2002 2003 EPS EPS EPS EPS Base Sales +4% Price/Markdowns Vendor Inflation SG&A Lev. Buyback Base Sales +4% Price/Markdowns Vendor Inflation SG&A Lev. Buyback

How We Define Our Business How We Define Our Business

RadioShack Retail Sales Composition RadioShack Retail Sales Composition Service Plans, Repair 1% High 80s Wireless P/E, Seasonal, Communications Portable Audio 9% 33% Low 50s Mid-High 40s Accessories, High 60s – Low 70s Batteries, Tech 17% Mid-High 40s Wired Comm 9% Low-Mid 40s High 20s Radio Comm 3% Home Entertainment 18% Mid-High 40s Computer 10% Based on 3Q02 YTD Sales Red Type = Gross Margin %

Credible 2003 Sales Case: Credible Improvements, Credible 2003 Sales Case: Credible Improvements, Favorable Anniversaries in H/E and Computer Favorable Anniversaries in H/E and Computer Nov YTD Base Case Nov YTD Base Case Dept ’02 Sales ’03-’05 Dept ’02 Sales ’03-’05 Wireless 11% 3% – 4% Wireless 11% 3% – 4% Wired (-2%) (-2%) – 0% Wired (-2%) (-2%) – 0% Radio (-11%) (-3%) – 0% Radio (-11%) (-3%) – 0% Computer (-8%) 10% – 12% Computer (-8%) 10% – 12% Home Ent. (-26%) 0% – 2% Home Ent. (-26%) 0% – 2% Accs/Bat/Tech 4% 3% Accs/Bat/Tech 4% 3% Toys/Port Aud/P-E (-10%) 1% – 2% Toys/Port Aud/P-E (-10%) 1% – 2% TOTAL (-5%) 2% TOTAL (-5%) 2%

RadioShack Retail Sales Composition RadioShack Retail Sales Composition Service Plans, Repair 1% Wireless P/E, Seasonal, Communications Portable Audio 9% 33% Accessories, Batteries, Tech 17% Wired Comm 9% Radio Comm 3% Home Entertainment 18% Computer 10% Based on 3Q02 YTD Sales

Breakdown of Wireless Communication Breakdown of Wireless Communication Handsets Handsets Wireless Access Wireless Access Airtime, Services Airtime, Services Wireless Comm Wireless Comm 33% 33% Based on 3Q02 YTD Sales

Healthy Wireless Dept Sales Growth Healthy Wireless Dept Sales Growth Less Reliant on Handsets Less Reliant on Handsets Airtime, 2001 Services • Assumes Handset Growth • Assumes Handset Growth Accessories Low-Mid Singles Low-Mid Singles Handsets • Assumes 10% Growth in • Assumes 10% Growth in Accessories Accessories 2004 Airtime, Services Accessories Handsets 3-Year CAGR of Dept Low to Mid-Single %

RadioShack Retail Sales Composition RadioShack Retail Sales Composition Service Plans, Repair 1% Wireless P/E, Seasonal, Communications Portable Audio 9% 33% Accessories, Batteries, Tech 17% Wired Comm 9% Radio Comm 3% Home Entertainment 18% Computer 10% Based on 3Q02 YTD Sales

Breakdown of Home Entertainment Breakdown of Home Entertainment Home Home Entertainment Entertainment 18% 18% Other Other Home Home Home Home DTH DTH Video Video Entertainment Entertainment Accessories Accessories Based on 3Q02 YTD Sales

Mixing Up Home Entertainment to Drive Profit Mixing Up Home Entertainment to Drive Profit Strong Accessory Growth; Less Dependent on DTH Strong Accessory Growth; Less Dependent on DTH 2001 • Material Mix Shift in Favor of • Material Mix Shift in Favor of Other Accessories, Up Mid-Single % Accessories, Up Mid-Single % Direct to Home • Home Video Share Gain to Smaller Home Video • Home Video Share Gain to Smaller Extent Extent Accessories • DTH Down Single-Digit %, Due to • DTH Down Single-Digit %, Due to DISH Lower Sales Ring DISH Lower Sales Ring 2004 Other Direct to Home Home Video Accessories 3-Year CAGR of Dept Flat to Low-Single %

RadioShack Retail Sales Composition RadioShack Retail Sales Composition Service Plans, Repair 1% Wireless P/E, Seasonal, Communications Portable Audio 9% 33% Accessories, Batteries, Tech 17% Wired Comm 9% Radio Comm 3% Home Entertainment 18% Computer 10% Based on 3Q02 YTD Sales

Breakdown of Computer Department Breakdown of Computer Department Computer 10% Computer 10% Desktop Desktop Computers, Computers, Printers, Monitors Printers, Monitors Other Accessories Other Accessories Home Networking, Home Networking, Portable Computers, Portable Computers, Photography Photography Based on 3Q02 YTD Sales

Computer Dept To Look Vastly Different Computer Dept To Look Vastly Different 2001 Netw, Port Other Comp, Photo • Continuing Strong Double Digit % Growth • Continuing Strong Double Digit % Growth of Home Networking, Portable of Home Networking, Portable Accessories Computing, and Digital Photography Computing, and Digital Photography Desktop Computers, • Double-Digit Growth of • Double-Digit Growth of Printers, Monitors Other Accessories Other Accessories • Continued Deceleration of • Continued Deceleration of Desktops, 20% - 30% Desktops, 20% - 30% 2004 Other Networking, Accessories Portable l Computing, a t e s Digital Photography p o t k s e D 3-Year CAGR of Dept Double Digit %

Leaning Into RadioShack’s Strength: Servicing Leaning Into RadioShack’s Strength: Servicing Customers’ Routine Electronics Needs Customers’ Routine Electronics Needs ‘02 Sales ‘02 Sales ’02 Sales (mil) Growth CAGR ’03-’05 ’02 Sales (mil) Growth CAGR ’03-’05 Computer Accessories $150 40% Strong Dbl Digit % Computer Accessories $150 40% Strong Dbl Digit % Home Ent Accessories $350 6% Mid-Single % Home Ent Accessories $350 6% Mid-Single % Wireless Accessories $200 17% 10% Wireless Accessories $200 17% 10% Batteries $250 10% High-Single % Batteries $250 10% High-Single % $950 13% 8% - 10% $950 13% 8% - 10% Activities to Drive Sales, Profit Activities to Drive Sales, Profit Activities to Drive Sales, Profit • In In- -Store Space Allocation Store Space Allocation • • In-Store Space Allocation • Assortment Assortment • • Assortment • Training Training • • Training • Compensation Compensation • • Compensation

Operating Efficiency Operating Efficiency • Pricing • Pricing • Supply Chain – Vendors & Purchasing • Supply Chain – Vendors & Purchasing • SG&A Management • SG&A Management • ROIC • ROIC • Cash Flow • Cash Flow

Pricing Initiatives Pricing Initiatives • 2003 Targeted Benefits • 2003 Targeted Benefits • $10 Million (In 13% - 15% Base Case) • $10 Million (In 13% - 15% Base Case) • $15 Million (In 25% Stretch Case) • $15 Million (In 25% Stretch Case) • Markdowns • Markdowns • $200 Million Annually • $200 Million Annually • Improved Management • Improved Management • New Tools for Buyers • New Tools for Buyers • DemandTec, Price Optimization Software • DemandTec, Price Optimization Software