1. Sector Presentation Sector: Materials Brian Mandel Minh Le Ellis Krienik

2. INTRODUCTION & BUSINESS ANALYSIS

3. S&P 500 Index Table DescGICS®NCMKTCAPLevelDailyMTDQTDYTD S&P 500500 9,124,1671036.19-2.81%-1.98% 14.72% TR 1700.66-2.81%-1.86% 17.05% Net TR 1605.28-2.81%-1.89% 16.34% Energy1040 1,127,143422.21-3.49%3.15% 9.28% Materials1530 309,561176.96-3.82%-5.33% 28.62% Industrials2059 920,442221.11-2.99%-4.66% 6.71% Consumer Discretionary2578 830,996211.1-2.70%-2.48% 24.61% Consumer Staples3041 1,089,057265.93-1.75%1.04% 7.82% Health Care3553 1,153,936326.05-1.49%-2.31% 5.38% Financials4079 1,337,608189.03-4.76%-6.04% 11.99% Information Technology4576 1,737,657334.36-2.41%-0.38% 44.24% Telecommunications Services509 281,594103.04-2.06%-4.84% -7.75% Utilities5535 336,174144.14-1.92%-3.22% -2.56%

4. Materials Companies in the S&P 500 Chemical Chemical Metal & Mining Metal & Mining Paper Paper Construction Material Construction Material

5. SIM Portfolio

6. Phase of Life Cycle Mature – Chemical, Plastics Mature – Chemical, Plastics Declining – Glass, Metals Declining – Glass, Metals –Plastic increasingly used as substitute for glass –Increase in demand for metals being met by importers

7. End Market - Construction Sept. 2008 to Sept. 2009: -16.7% Growth Sept. 2008 to Sept. 2009: -16.7% Growth Construction consumes synthetic materials Construction consumes synthetic materials Stimulates demand for appliances, paint, carpet, windows Stimulates demand for appliances, paint, carpet, windows

8. End Market – Motor Vehicle Sept. 2008 to Sept. 2009: -11.5% Growth Sept. 2008 to Sept. 2009: -11.5% Growth Production for 1 st half of 2009 50% lower than 2008 1 st half production Production for 1 st half of 2009 50% lower than 2008 1 st half production Demand boosted by “Cash for Clunkers” Demand boosted by “Cash for Clunkers”

9. End Market – Consumer Goods Sept. 2008 to Sept. 2009: -1.7% Growth Sept. 2008 to Sept. 2009: -1.7% Growth Important market for containers and chemicals Important market for containers and chemicals

10. Key Factors Raw Material Prices Raw Material Prices Electricity Prices Electricity Prices Globalization Globalization Consolidation Consolidation

11. Profitability & Pricing Long-term sales contracts help maintain profit stability Long-term sales contracts help maintain profit stability Production and sale of value added products give firms competitive advantage and premium pricing Production and sale of value added products give firms competitive advantage and premium pricing Supply contracts for key inputs Supply contracts for key inputs

12. ECONOMIC ANALYSIS

13. Commodity prices and Sector

14. Exchange Rate & Sector

15. CPI and Materials Sector

16. GDP and Material Sector

17. FINANCIAL ANALYSIS

18. S&P 500 vs. SPBMS Index – YTD

19. S&P 500 vs. SPBMS Index – ROE Currently below 10-yr average ROE steadily declining with recent market downturn.

20. Revenue Growth – Sector Performance 5 year Growth Rate: 7% 5 year Growth Rate: 6% Materials S&P 500

21. Revenue Growth – Industry Performance Metal/Glass Containers Diversified Chemicals Agricultural Chemicals 5 year Growth Rate: 10% 5 year Growth Rate: 7% 5 year Growth Rate: 23%

22. Margins – Historically lower EBITDA Margin Net Profit Margin Currently at the 10-YR average. Profit margins falling.

23. Margins – Cyclical EBITDA Margin Currently below 10-yr average

24. Earnings Growth – Industry Performance Metal/Glass Containers Diversified Chemicals Agricultural Chemicals Materials Index 4 Quarter Moving Average Growth Rate 5 YR Historic LT Future Materials5%10% Metal/glass containers 11%8% Diversified Chemicals -3%7% Agricultural Chemicals 59%13%

25. VALUATION ANALYSIS

27. P/E RELATIVE TO S&P 500

28. Aluminum Industry vs. Sector

29. Gold Industry vs. Sector

30. Chemical-Diverse Industry vs. Sector

31. P/B ABSOLUTE

32. P/B RELATIVE TO S&P 500

33. RECOMMENDATIONS

34. Recommendation Sector returns Sector returns –Positive for long term –Uncertain for short term Sector vs. S&P Sector vs. S&P –Magnified gains/losses compared to S&P Positive forces Positive forces –Weak dollar –Strong emerging markets –Domestic economy starting to improve Risks Risks –Unemployment –Weak demand (lack of stimulus programs)

35. Recommendation Remain overweight in sector Remain overweight in sector Underweight commodity companies, overweight specialty companies Underweight commodity companies, overweight specialty companies $400K in DOW – 15,444 shares $400K in DOW – 15,444 shares $300K in MON – 4,466 shares $300K in MON – 4,466 shares $200K in ATI – 6,481 shares $200K in ATI – 6,481 shares