1. ©2004 InfoNetrix LLC All Rights Reserved Worldwide 2-1 PART TWO Marketplace Characteristics Market Horizons™ Report Geospatial & Field Automation Solutions (GFAS) in the North American Utilities Marketplace (2003-2007)

2. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-2 About This Report InfoNetrix LLC, an independent technical research and consulting firm specialized in utility automation and information technology (Utility Automation/IT) markets conducted the research for this report. InfoNetrix reports are available for subscription by any and all interested parties, foreign and domestic (except as prohibited by law), in accordance with the pricing and terms set forth in the prospectus, provided separately. This report addresses Geospatial & Field Automation Solutions (GFAS) in the North American Utilities Marketplace. Other reports in the Market Horizons™ Series provide similar analyses of Real-time Automation & Controls (RTAC) in the North American Electric Utilities Marketplace and Real-time Automation & Controls (RTAC) in the North American Water/Wastewater Utilities Marketplace. Please visit www.InfoNetrix.com for more information about these and other InfoNetrix Advisory Services.www.InfoNetrix.com InfoNetrix LLC, an independent technical research and consulting firm specialized in utility automation and information technology (Utility Automation/IT) markets conducted the research for this report. InfoNetrix reports are available for subscription by any and all interested parties, foreign and domestic (except as prohibited by law), in accordance with the pricing and terms set forth in the prospectus, provided separately. This report addresses Geospatial & Field Automation Solutions (GFAS) in the North American Utilities Marketplace. Other reports in the Market Horizons™ Series provide similar analyses of Real-time Automation & Controls (RTAC) in the North American Electric Utilities Marketplace and Real-time Automation & Controls (RTAC) in the North American Water/Wastewater Utilities Marketplace. Please visit www.InfoNetrix.com for more information about these and other InfoNetrix Advisory Services.www.InfoNetrix.com

3. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-3 General Information & Notifications PURPOSE The information contained in this document is for the sole use of InfoNetrix clients and is not to be distributed outside client organizations. No part of this publication may be reproduced, transcribed, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any electronic storage and retrieval system, without permission in writing from the copyright owner. DISCLAIMER This publication has been prepared with care, however, no guarantee of accuracy, completeness, or warranty of any kind is expressed or implied, nor shall InfoNetrix be liable to any user of the publication or any portion(s) hereof for any direct or indirect damages, expenses, costs or losses of any kind resulting from its use. COUNTRY OF ORIGIN United States of America PURPOSE The information contained in this document is for the sole use of InfoNetrix clients and is not to be distributed outside client organizations. No part of this publication may be reproduced, transcribed, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any electronic storage and retrieval system, without permission in writing from the copyright owner. DISCLAIMER This publication has been prepared with care, however, no guarantee of accuracy, completeness, or warranty of any kind is expressed or implied, nor shall InfoNetrix be liable to any user of the publication or any portion(s) hereof for any direct or indirect damages, expenses, costs or losses of any kind resulting from its use. COUNTRY OF ORIGIN United States of America

4. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-4 Research Standards & Methodology The preparation of this report follows generally accepted standards of market research practice and is based on principles of truthfulness and professionalism. A reasonable and prudent effort has been made to ensure that factors and circumstances having a material impact on any decision-making process derived from, or impacted by, this report are included in the analyses and recommendations. The representations of industry and market data and portrayals of the business environment are based on market research conducted by experienced professionals with broad knowledge and experience in the markets addressed. The information upon which the findings and analyses contained in this report are based was obtained through a combination of telephone interviews with key suppliers and consultants and other individuals with extensive market knowledge and experience, augmented by survey with a cross section of utility managers and ongoing interactive research with over 1,000 utilities annually. Each telephone interview/survey was guided by a specially designed questionnaire to obtain pertinent data, insights and market perspectives. These interviews were augmented by secondary research across a wide range of reliable public and proprietary information sources pertinent to the study. The preparation of this report follows generally accepted standards of market research practice and is based on principles of truthfulness and professionalism. A reasonable and prudent effort has been made to ensure that factors and circumstances having a material impact on any decision-making process derived from, or impacted by, this report are included in the analyses and recommendations. The representations of industry and market data and portrayals of the business environment are based on market research conducted by experienced professionals with broad knowledge and experience in the markets addressed. The information upon which the findings and analyses contained in this report are based was obtained through a combination of telephone interviews with key suppliers and consultants and other individuals with extensive market knowledge and experience, augmented by survey with a cross section of utility managers and ongoing interactive research with over 1,000 utilities annually. Each telephone interview/survey was guided by a specially designed questionnaire to obtain pertinent data, insights and market perspectives. These interviews were augmented by secondary research across a wide range of reliable public and proprietary information sources pertinent to the study.

5. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-5 Research Reliability & Acceptance The information presented in this report was gathered, recorded and analyzed with care and precision. However, there will undoubtedly be differences between the findings presented and actual results for various reasons and, because future events and circumstances frequently do not occur as expected, those differences may be material. For these and other reasons (including, but not necessarily limited to human error, misinterpretations, misunderstandings and information sensitivities among respondents), the resulting data will most likely not be completely accurate in all respects. Moreover, the forecasts presented herein reflect judgments made as of the period during which this report was prepared. As such, some aspects can be expected to change as a result of numerous direct and indirect factors, which are beyond the scope of this report to accurately predict. For example, it assumes that current events will continue to have the same effect on the marketplace in the future and that the conventional wisdom of today will continue to be completely applicable to future market conditions, which is at best, unlikely. By accepting and using the information contained in this report, the user assumes all responsibility for its use for any and all purposes as user may deem appropriate and agrees to hold InfoNetrix, its principals and its staff harmless from any direct, indirect or consequential damages resulting from, or in any way related to, such use(s). However, InfoNetrix actively solicits and welcomes inquiries or other input regarding any errors, omissions or inconsistencies discovered during the course of using this report. Please direct any such correspondence to InfoNetrix Client Services. (Detailed company contact information is provided on the web at: www.InfoNetrix.com.) The information presented in this report was gathered, recorded and analyzed with care and precision. However, there will undoubtedly be differences between the findings presented and actual results for various reasons and, because future events and circumstances frequently do not occur as expected, those differences may be material. For these and other reasons (including, but not necessarily limited to human error, misinterpretations, misunderstandings and information sensitivities among respondents), the resulting data will most likely not be completely accurate in all respects. Moreover, the forecasts presented herein reflect judgments made as of the period during which this report was prepared. As such, some aspects can be expected to change as a result of numerous direct and indirect factors, which are beyond the scope of this report to accurately predict. For example, it assumes that current events will continue to have the same effect on the marketplace in the future and that the conventional wisdom of today will continue to be completely applicable to future market conditions, which is at best, unlikely. By accepting and using the information contained in this report, the user assumes all responsibility for its use for any and all purposes as user may deem appropriate and agrees to hold InfoNetrix, its principals and its staff harmless from any direct, indirect or consequential damages resulting from, or in any way related to, such use(s). However, InfoNetrix actively solicits and welcomes inquiries or other input regarding any errors, omissions or inconsistencies discovered during the course of using this report. Please direct any such correspondence to InfoNetrix Client Services. (Detailed company contact information is provided on the web at: www.InfoNetrix.com.)

6. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-6 Market Horizons™ Report Contents 1.Executive Market Summary 2.Marketplace Characteristics 3.Market Drivers, Issues & Trends 4.Market Analysis & Future Outlook 5.Supplier Environment

7. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-7 2. Marketplace Characteristics Marketplace Overview Marketplace Structure & Composition Segments/Applications/Configurations Geographical Market Distribution

8. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-8 Marketplace Overview GFAS Market Organization & Forecasting Model Geospatial & Field Automation Systems (GFAS) Market Organization Technical & Integration Services (TIS) Geospatial & Field Automation Systems (GFAS) Geospatial & Field Automation Systems (GFAS) Engineering Conversion System Integration Automated Mapping Facilities Management System Integration Geospatial (AM/FM/GIS) Systems Field Automation Solutions (FAS) Outage Management Work/Workforce Management Mobile Computing

9. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-9 Marketplace Overview North American Utilities Marketplace Electric Utilities Gas Utilities Water/Wastewater Utilities Principal Components of the North American Utilities Marketplace

10. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-10 Marketplace Overview Electric Utility Marketplace Pre-2003Pre-2003: Period of frenzied utility excursions into non- regulated businesses; energy trading desks; merchant power plants & distributed generation projects; international M&A activity; and various other non- core ventures causing…  Loss of investor/stakeholder confidence  Downgraded stock values leading to liquidity crisis  Lack of focus on core business values  Distracted management and dilution of resources  Cash drain from core operations

11. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-11 Marketplace Overview Electric Utility Marketplace (Cont’d) 2003-20072003-2007: Gradual return to traditional utility focus, operations and values as utilities…  Divest and/or redirect resources away from non-core activities  Refocus time, money and resources on traditional priorities  Respond to the effects of the 8-14-03 blackout, which… Clearly framed the need for investments in Power Delivery Underlined grid security and other vulnerability issues Made power reliability a national/regional priority Elevated customer service improvement as a utility priority Brought the critical role of automation to a public forum  Accept and adopt these new realities: Restructuring IS happening and will continue T&D investments are necessary; more generation won’t fix it! FERC ISO/RTO plans are going forward Market stability is returning; prudent investments will be recouped

12. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-12 Marketplace Overview Gas Utility Marketplace Pre-2003Pre-2003: Deregulated in the mid- 1980s, the gas industry has had time to adjust to what was a far less complicated deregulation process.  Physical properties of gas transmission and distribution are more forgiving than those for electricity… Gas movements are mainly in one direction and measured in cubic-feet- per-day as contrasted with electricity, often moving bi- directionally at the speed of light Gas can be compressed and stored easily whereas there are no viable options for storage of electricity

13. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-13 Marketplace Overview Gas Utility Marketplace (Cont’d) 2003-20072003-2007: Except for isolated acquisitions/mergers by/with electric utilities, most gas enterprises and gas infrastructure have remained relatively stable and remain focused primarily on the gas business  Gas companies expected to continue investment in TD&S (transmission, distribution & storage) operations & infrastructure  Time, money and resources remain focused on traditional gas TD&S priorities  Ongoing but significantly diminished development of new capacity and infrastructure to support declining levels of merchant power plant siting, construction and commissioning  Continued volatility of natural gas pricing could have an adverse impact on future spending outlook

14. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-14 Marketplace Overview Water/Wastewater Utility Marketplace Pre-2003Pre-2003: Recent reductions in municipal tax base caused by the economic downturn have constrained automation project planning and budgets…  Municipal liquidity crisis ensued  Unpopular to spend money for automation when basic services were in economic jeopardy  Un-funded mandates (e.g., NERC- 1200, Sarbanes-Oxley, GASB-34, etc.) created new financial burdens  Security vulnerability audits paid for with EPA funding created new funding & implementation questions; funding now depleted

15. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-15 Marketplace Overview W/WW Utility Marketplace (Cont’d) 2003-20072003-2007: Economic recovery will gradually replenish municipal coffers, allowing a return to capital spending projects amid rising consumer awareness of the need and value of automation…  Security vulnerability assessments funded by the US EPA were to have been completed by mid-2004, but funding has been depleted; also, no funds available for implementation of mitigation measures  Widespread acquisitions of small public and private water companies will continue but at a somewhat slower pace than in prior years  Privatization initiatives have been stalled due to absence of promised benefits; some privatization contracts being reversed/rescinded

16. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-16 Over 3,500 Electric Utilities in US & Canada Less than 10% account for over 75% of all automation spending No major composition changes expected 2003-07  A few IOU mergers per year  Some REC consolidation  General trend toward fewer Regulatory policy is set at federal level in US; mainly at provincial level in Canada Marketplace Structure & Composition Electric Utilities (by Ownership Class)

17. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-17 There are more than 70,000 T&D substations in North America with approximately 500-600 (net) added each year, after decommissioned stations are taken into account. The total includes another 5,000 that are owned/operated by non-utility enterprises, mainly large commercial and industrial power users. SOURCE: US DOE-EIA Marketplace Structure & Composition Electric T&D Substation Infrastructure

18. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-18 Investor-owned utilities currently hold the majority of the high-voltage transmission line capacity in the United States. (Only limited new transmission capacity has been added since restructuring began in 1994.) However, the control and operation of transmission will likely be transferred to Independent Transmission Companies (ITCs) as restructuring continues and the ISO/RTO model is fully implemented over the next several years. It remains unclear exactly when this transition will be completed, mainly due to the failure of the US Congress to pass the an Energy Bill with a specific timetable before the end of the 2003 session. SOURCE: US DOE-EIA (1994) Marketplace Structure & Composition Power Transmission Infrastructure

19. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-19 Marketplace Structure & Composition Gas Utilities by Ownership Class 6,800 U.S. Oil & Gas Companies 21 Major Energy Companies 90 Intrastate Pipelines 70 Interstate Pipelines 1,400 Local Gas Utilities 300 Gas Marketers 120 Underground Gas Storage Operators (415 Fields)

20. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-20 Gas Market Centers Serve As Major Trading and Trans-shipment Points Marketplace Structure & Composition Gas Market Centers Source: Energy Information Administration, Office of Oil & Gas, EIAGIS-NG Geographic Information System

21. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-21 There are Over 400 Storage Facilities in the U.S. Working Gas 3.9 Tcf Deliverability 78 Bcf per day Marketplace Structure & Composition Principal Gas Storage Facilities

22. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-22 ~160,000 Public Water Systems ~16,000 Publicly-owned wastewater treatment facilities ~ 21,000 wastewater collection systems Large utilities (those serving populations of 100,000 or more) represent the majority of automation investments Smaller utilities are now rapidly entering the digital marketplace and represent increasing numbers of projects going forward Marketplace Structure & Composition Water/Wastewater Market Universe

23. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-23 About 55,000 Community Water Systems (CWS)  Are year-round operations  Serve well over 90% of the US population  Represent about 1/3 of all water systems in the US About 17,000 Non-transient, Non-CWS (NTNCWS):  Serve buildings, factories, etc.  Operate ≤ 6 months per year  Represent about 12% of all water systems; serve ~ 2% of population Almost 90,000 Transient, Non-CWS (TNCWS):  Serve campgrounds, gas stations, etc.  Operate only for short durations  Represent ~50% of all water systems; serve ~ 5% of population Marketplace Structure & Composition Water/Wastewater Market Composition There are over 160,000 public water systems in the U.S. alone

24. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-24 Populations Served by CWS Large Community Water System Utilities (by Population Served) SOURCE: US EPA There are over 54,000 CWS, but only about 3,300 of them serve populations above 10,000 Marketplace Structure & Composition CWS Market Composition Detail

25. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-25 Water Treatment Plant Booster Pumps Sewage Treatment Post Treatment Storage Water Pipes Sewer Pipes Reservoir Ground Water Wells River Source Treatment Distribution Sewer/Treatment Discharge SOURCE: Sandia National Laboratories, Albuquerque, NM Marketplace Structure & Composition General Water/Wastewater Market Structure

26. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-26 Geospatial (AM/FM/GIS) Segment  AMFM/GIS Systems refers to spatially defined automated mapping, facilities management and geographical information system software that (typically) runs on a server and/or offers user access from a desktop computer or workstation. Technical & Integration Services (TIS) Segment  TIS comprises 3 formerly separate professional services areas: Engineering Services includes a broad range of technical engineering consulting, services associated with the analysis, planning, design, programming, implementation and integration of GIS and Mobile Computing Solutions. Conversion Services includes the conversion of paper base maps and facility maps into a digital form suitable for electronic access and manipulation. This segment also includes field data capture, maintenance of existing digital base maps and migration to digital maps and facilities databases from older AM/FM software platforms to a new or different platform. System Integration Services includes platform and application integration, training, documentation and other contract support services. Segment Applications & Configurations Principal GFAS Market Segments

27. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-27 Field Automation Solutions (FAS) Segment  Field Automation Solutions refers to applications that are predominantly or exclusively field-centric and are designed to address needs that cannot be accommodated without some type of remote data acquisition, control, communications or combinations.  Specific FAS application segments addressed by this report include: Outage Management Systems - Systems designed to detect service outages and, in most cases, respond by mitigating outage frequency and/or duration. Many OMS solutions also provide outage restoration notification as well as other tools designed to minimize outage detection, notification and service restoration times. Work Management Systems (incorporating Workforce Management) - Systems designed to automate the work flow process including work order creation, tracking and distribution; crew allocation, dispatch & tracking; and other work process & operations management tasks. Mobile Computing Solutions - The use of field-based computers to obtain, manipulate or distribute data from and/or to usually centrally located I/T platforms (e.g., GIS, OMS, WFMS, WMS, CIS, etc.) Segment Applications & Configurations Principal GFAS Market Segments (Cont’d)

28. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-28 Segment Applications & Configurations Field Automation Devices Laptops & Tablet PCs PDAs & Handheld Devices

29. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-29 PDA & hand-held device usage is declining in most applications for any, some or all of several reasons:  Too fragile for normal or harsh field environments  Easily dropped or otherwise physically abused in normal usage; even worse when used in harsh conditions  Misplaced stolen (very popular for home use!)  Screen is too small Physical size of type is too small Can’t see enough onscreen at one time Contrast often inadequate for small type size  Still too expensive for requirements (price:performance)  Some compatibility issues still remain Communications protocols Operating systems Segment Applications & Configurations FAS: PDAs & Other Hand-held Devices

30. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-30 Usage is increasing because:  Ruggedized versions available for many devices/models Multiple brands & models to choose from Field-proven capabilities  High-performance is standard or optional for most  Laptops now in widespread use with good results  Tablet PCs gaining popularity because: High visibility screen size Maps, etc. can be seen easier than on PDAs, hand-held units Excellent contrast, color, graphics Portable yet substantial (Optimally sized for field usage) Run standard software & applications (MS-Windows, etc.) Familiar look and feel to desktop PCs; no learning curve  BUT… still deemed too expensive for some applications Prices expected to fall slowly as consumer market adoption rises Mass market product; good support available from vendors Segment Applications & Configurations FAS: Laptops & Tablet PCs

31. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-31 Diagram courtesy of ValuTech Solutions; Pittsburgh, PA Mobile Computing (Staking) Geographic Information System Network Design OUTAGE ANALYSIS Detection Diagnosis Decision Support Prediction Restoration Monitoring OUTAGE ANALYSIS Detection Diagnosis Decision Support Prediction Restoration Monitoring Network Status Customer Status Predictive Status Restoration Results SCADA System Distribution Automation Call Center Call Center AMR Outage Detection Outside Contractors Troubleshooters Line Crews Network Response Network Design Workforce Management Segment Applications & Configurations Interactive Outage Management System

32. ©2004 InfoNetrix LLC All Rights Reserved Worldwide PART 2: Marketplace Characteristics 2-32 Geographical Market Distribution US-Canada GFAS Spending Ratio US-Canada Annual GFAS Expenditures Ratio (2003-2007) GFAS expenditure ratios have remained between 90/10 & 85/15 for several decades 2003-2007 ratio expected to remain at 90/10 (i.e., after currency normalization); no strong change agents are apparent at this time Prior to deregulation, Canadian electric utilities tended to be early adopters of advanced technologies; post- deregulation environment has significantly slowed adoption rates due to new budgetary limitations