Creating LongTerm WealthValue in a ShortTerm World

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Creating Long-Term Wealth/Value in a Short-Term
World

• Patricia Cochran, CFO
• VSP
• www.vsp.com

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VSP Overview

• U.S. largest provider of eyecare benefits
• Founded in 1955
• Over 51 million members (1 in 6 Americans)
• 2,050 employees
• Eight years in a row

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VSP Overview

• 2006 Revenue 2.4 billion
• 28,000 clients
• 24,000 doctors
• Cover 224 of the Fortune 500 companies
• Cover 41 of the Fortune 100 Best Places to Work
  companies

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Fortune 500 Clients
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Circle of Success

• Companies that purchase our plan
• Employees and dependents in our plan
• Doctors who provide service to our members
• Employees who serve our customers

Happy Employees Happy Customers
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VSP Revenue Growth
2083 increase
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VSP Milestones

• Dream by small group of CA eye doctors to provide
  insurance for vision care
• Developed strong partnership with doctor network
  doctors financed operations through withholding
• Other states start vision plans using CA plan as
  model

1955 1960s
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VSP Milestones

• VSP opens an optical lab to influence cost
  control over supply chain.
• National expansion to provide consistent service
  delivery begins with acquisition of east coast
  vision plans

1970s 1980s
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VSP Milestones

• Growth accelerates as employers recognize the
  competitive advantages of vision care
• VSP starts a frame distribution company, Altair
  Eyewear, to influence more cost control over
  supply chain
• Sight for Students is launched to deliver free
  eyecare to needy children

1990s
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VSP Milestones

• VSP starts a doctor practice management company,
  Eyefinity, to provide e-commerce solutions to eye
  doctors in independent practice
• Fortune Magazine recognizes VSP as one of the top
  25 employers in the U.S. for seven consecutive
  years

2000s
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Long-Term FocusLong-Term InvestmentsLong-Term
Strategy
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Mechanism for Long-Term Focus

• Private Company vs. Public Company
• Not-for-Profit

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Benefits of Long-Term Focus

• National expansion organically without long-term
  debt
• How? Partnership with doctor network
• Development of vertical integration to control
  costs of supply chain
• How? Establishment of VSP Optical Labs and Altair
  Eyewear and organic growth over long term

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Benefits of Long-Term Focus

• Investment in doctor network of independent
  practitioners
• How? Establishment of Eyefinity, and organic
  growth over long term
• Investment in employees
• How? Top 100 Training Company by Training Magazine

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Benefits of Long-Term Focus

• Build quality reputation with communities served
• How? Satisfied employees will provide excellent
  service to the communities of your business VSP
  client retention rate is 99

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Questions