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					                                                                                          Industry Report
                                                                                          August 26, 2012



  Energy and Industrials Weekly - Looking To and Past
  Wyoming...                                                                              Energy & Industrials
  Our Call                                                                                Peter Arment
  Ahead of the annual Jackson Hole retreat, commodities have been quietly basing          (646) 376-5336
  and trending higher. While prepared speeches may be nuanced, fundamentals               parment@sterneagee.com
  suggest further monetary policy accommodation among most every developed                Michael S. Dudas, CFA
  and developing government. In this edition of E&I Weekly, we focus on equity            (646) 376-5329
  implications from this week's Jackson Hole conference.                                  mdudas@sterneagee.com

  ■ While not placing too much emphasis on the musings and data flow out of the           Stephen D. Gengaro
    Jackson Hole policy fest, markets appear to be discounting more of the same           (646) 376-5331
                                                                                          sgengaro@sterneagee.com
    as central bankers and governments attack expansive debt metrics. Recent job,
    economic and headline inflation data should not drive any major reversal in           Jeffrey A. Kauffman
    policies, which should be more supportive of commodity prices. Federal Reserve        (212) 338-4765
                                                                                          jkauffman@sterneagee.com
    Chairman Bernanke most likely will indicate that Fed policy makers stand ready
    to consider further steps, even if not acting immediately.                            Michael Ward, CFA
                                                                                          (646) 376-5375
  ■ The release of the minutes from Fed's July 31-August 1 meeting indicates that         mward@sterneagee.com
    the Fed is leaning towards launching another round of quantitative easing. The
    minutes showed that apart from spillover effects from European financial crisis,      Tim Rezvan, CFA
                                                                                          (212) 338-4736
    Fed officials remain concerned about the possible fiscal cliff and the impact on      trezvan@sterneagee.com
    household and business spending from the uncertainty surrounding U.S. fiscal
    policy. It seems to us that QE3 would include large-scale asset purchases.            Todd Vencil, CFA
                                                                                          (804) 282-7385
  ■ Though we have seen an uptick in economic data in the past couple of weeks,           tvencil@sterneagee.com
    most economists believe the recent uptick is not substantial enough to persuade
                                                                                          Kevin Bennett, CFA
    the Fed to hold off on quantitative easing. However, we do note that there are        (804) 282-4506
    some economists, including Federal Reserve Bank of St. Louis President James          kbennett@sterneagee.com
    Bullard, who believe the recent improvement in economy should prompt the Fed
                                                                                          Grant Fox
    to hold off on additional monetary stimuli.
                                                                                          (212) 338-4723
  ■ Sterne Agee Chief Fixed Income Strategist Sharon Lee Stark continues to               gfox@sterneagee.com
    anticipate some action from the Fed this fall, perhaps as early as the September      Satyadeep Jain
    12-13 FOMC meeting. Stark does not expect the Fed to stay on the sidelines and        (646) 376-5357
    say the central bank has done all it can do, when there are clearly more tools that   sjain@sterneagee.com
    can be employed to stimulate the economy. Stark believes the Fed's role is even       Ryan Mueller
    more critical given the political infighting in Washington that would threaten        (212) 338-4732
    what minimal momentum exists in a sluggish economy.                                   rmueller@sterneagee.com
  ■ In Exhibits 1 and 2 on next page, we present our analysis on indices’ performance     Josh W. Sullivan
    during and after quantitative easing. Broad stock market as well specific sub-        (646) 376-5337
    sectors such as industrials, energy and commodities recorded sizable gains            jwsullivan@sterneagee.com
    during both rounds of quantitative easing. QE1 turned out be longer and more          Patrick Uotila, CPA
    effective and led to higher gains for indices than QE2. Since Operation Twist         (646) 376-5358
    has not resulted in an expansion of the Fed's balance sheet, the program has not      puotila@sterneagee.com
    been as effective (in terms of an increase in indices) as earlier rounds of easing.   Sal Vitale
  ■ Energy sector underperformed S&P500, industrials and commodities sectors              (212) 338-4766
                                                                                          svitale@sterneagee.com
    during QE1, but more than made up through solid out-performance during QE2.
    S&P500, Industrials and Energy on average saw a 10% decline from the end of
    QE1 to the beginning to QE2 and saw an even higher drop from the end of QE2
    to the beginning of Operation Twist. Commodities have traded more or less in
    line with industrials and energy sectors through these rounds of monetary easing.
    Gold has had a good run, with or without QE, but price gains during QE have
    been higher than those post QE. However, we note that gold prices have declined
    somewhat during Operation Twist.
   Important Disclosures regarding Price Target Risks, Valuation Methodology, Regulation Analyst Certification,
Investment Banking, Ratings Definitions, and potential conflicts of interest begin on Page I of the Appendix Section.
                    800 Shades Creek ParkwaySuite 700Birmingham, AL 35209205-949-3500
                                  Sterne, Agee & Leach Inc. is Member NYSE, FINRA, SIPC
                                                                                                                                  August 26, 2012



Figure 1: Performance of Various Indices during Quantitative Easing

 240

                                                                                                                          Operation Twist
 220

                                                                                      QE2
 200


                              QE1
 180



 160



 140



 120



 100



  80



  60
       Jun-09




       Jun-10
       Jun-10




       Jun-11




       Jun-12
       Apr-09
       May-09




       Apr-10
       May-10




       Apr-11
       May-11




       Apr-12
       May-12
         Jul-09
         Jul-09




         Jul-10




         Jul-11




         Jul-12
       Oct-09




       Oct-10
       Nov-08




       Nov-09




       Oct-11
       Aug-09




       Aug-10


       Nov-10




       Aug-11


       Nov-11
       Nov-11




       Aug-12
       Dec-08
        Jan-09




       Dec-09
        Jan-10




       Dec-10
        Jan-11




       Dec-11
        Jan-12
       Feb-09




       Sep-09




       Feb-10




       Sep-10




       Feb-11




       Sep-11




       Feb-12
       Mar-09




       Mar-10




       Mar-11
       Mar-11




       Mar-12
                   S&P 500           S&P Industrials Index            S&P Energy Index            CRB-All Commodities              Gold


Source: Bloomberg, Standard & Poors, Commodity Research Bureau, Sterne Agee

Note: Although QE2 officially started on November 3, 2010, most indices started moving higher when Fed Chairman Ben Bernanke hinted at QE2 at
Jackson Hole symposium on August 27, 2010. Therefore, for our analysis, we have used August 27, 2010 as start date for QE2.



                                           Figure 2: Analysis of Indices’ Performance during and after Quantitative Easing

                                                                                                                                         During
                                                                                 During         After         During         After     Operation
                                                                                  QE1            QE1           QE2            QE2         Twist
                                            S&P500                                36%            -9%           24%           -12%          20%
                                            S&P Industrials                       38%            -9%           27%           -10%          20%
                                            S&P Energy                            20%           -10%           45%           -17%          13%
                                            CRB-All Commodities                   36%             6%           21%            -4%          -6%
                                            Gold                                  36%            11%           21%            19%          -6%

                                            Source: Bloomberg, Standard & Poors, Commodity Research Bureau, Sterne Agee




                                                                                                                                                Page 2
                                                   August 26, 2012



Table of Contents

Summary                                                      Page 4


Aerospace & Defense                                          Page 5


Auto, Auto Parts and Auto Retailers                          Page 6


Coal                                                         Page 7


Engineering & Construction                                   Page 8


Construction Materials & Diversified Industrials             Page 9


Oil & Gas                                                    Page 10


Precious Metals                                              Page 11


Transportation                                               Page 12




                                                          Page 3
                                                                                                                                                                                                                   August 26, 2012



Energy and Industrials Weekly

Indicator                                             Latest        Previous    Date                      Year over Year Change %                             Low          52-Week Range ● Latest                              High     Status

Aerospace & Defense

Intl Revenue Passenger Traffic Total (y/y%)                 7.4%    5.6%            Jun                                   n/a                                                                  n/a                                       ##

Intl Available Seat Kilometers Total (y/y%)                 5.0%    4.1%           Jun                                    n/a                                                                  n/a                                       ##

Intl Freight Tonne kilometers (y/y%)                        1.1%    -2.2%          Jun                                    n/a                                                                  n/a                                       ##

Intl Passenger Load Factor Total                            81.0    77.0            Jul                                        ||||||            6.9%         74.4                                             l               83.1      ##

Auto & Auto Parts

Total Vehicle Sales - BRIC (mil.)                           2.28    2.49            Jul                                        ||||||||||        10.3%        2.07                 l                                           2.79

Total Vehicle Sales - Brazil                          364,157       353,190         Jul                                        ||||||||||||||||||| 19.1%    249382                                                         l   364157

Total Vehicle Sales - Russia                          532,100       567,982         Jul                                        ||||||||||||      12.6%      323472                                                 l           567982

Total Vehicle Sales - India                           269,977       273,932         Jul                                        ||||||||          8.9%       246412         l                                                   384413

Total Vehicle Sales - China (mil.)                          1.38    1.58            Jul                                        ||||||||          8.1%         1.28         l                                                   1.84

Coal

Total U.S. Coal Exports (1000 tons)                    12,916       12,354         Jun                                         |||||||||||||||||||| 40.8%    7928                                                          l   12916     ##

U.S. Weekly Coal Production (1000 tons)                20,452       19,791      Aug 17         -3.7%                       |                                17737                                  l                           22106

API2 (Delivered to Europe) Coal (USD/tonne)            $94.20       $94.90      Aug 24       -24.5%             ||||||||||||                                 86.20             l                                               128.75

Construction Materials & Diversified Industrials

U.S. Housing Starts (thous.)                                 746    754             Jul                                        ||||||||||        21.3%        551                                                      l       754       ##

U.S. Housing Prices - S&P Case-Shiller Index (SA)           139.9   138.7          May         -0.9%                                                         136.4                                         l                   141.2     ##

Highway Contract Awards - 3 mo avg (mil.)              $3,949       $3,668          Jul                                                          0.4%        2193                                              l               4359      ##

Architecture Billings Index                                  48.7   45.9            Jul                                   n/a                    4.1%         45.8                             l                               51.3      ##

Engineering & Construction

WTI Crude Oil Spot                                     $95.82       $95.97      Aug 24                                         ||||||||||||      12.4%       75.67                                 l                           109.49    ##

Brent Crude Oil Front Month                           $113.12       $115.01     Aug 24                                         ||                2.7%         89.2                                     l                       126.2     ##

Henry Hub Natural Gas Spot                                  $2.81   $2.81       Aug 24       -30.0%           ||||||||||||||                                  1.82                         l                                   4.18      ##

World Hot Rolled                                      $670.00       $660.00     Aug 21                                         |||               3.5%         590                              l                               735       ##

Copper (US/mt)                                         $7,677       $7,599      Aug 23       -13.1%                   ||||||                                 6722                          l                                   9258

Oil & Gas

Henry Hub Natural Gas Front Month                           $2.70   $2.80       Aug 24       -35.7%              |||||||||||                                  1.91                         l                                   4.05      ##

Henry Hub Natural Gas 12mo Strip                            $3.23   $3.31       Aug 24       -17.5%                    |||||                                  2.56                         l                                   4.43      ##

WTI Crude Oil Front Month                              $95.75       $96.27      Aug 24                                         ||||              12.4%       75.67                                     l                       109.77    ##

WTI Crude Oil 12mo Strip                               $96.56       $97.25      Aug 24                                         |||               10.4%       77.00                                     l                       110.03    ##

Brent Crude Oil Front Month                           $113.01       $115.01     Aug 24                                                           2.6%        89.23                                     l                       126.22    ##

Brent Crude Oil 12mo Strip                            $110.24       $111.98     Aug 24                                                           1.2%        90.59                                     l                       122.98    ##

Ethane - Mont Belvieu                                  $13.23       $14.28      Aug 24       -55.5%       ||||||||||||||||||                                 11.55 l                                                           40.43

Baker Hughes US Rig Count                                   1,898   1,914       Aug 24         -3.9%                       |                                 1898 l                                                            2026

Precious Metals

Gold (USD/oz.)                                      $1,669.60       $1,670.60   Aug 23         -8.7%                ||||||||                                 1540                      l                                       1900      ##

US Dollar Index                                             81.60   81.36       Aug 24                                         ||||||||||        10.7%       73.72                                             l               84.01

Comex Net Positions in Gold (contracts)              143,940        146,418       ||||||||||||||||||||||||||||||||||||||||||
                                                                                Aug 14 -42.2%                                                               130709     l                                                       287634

Transportation

U.S. ISM Manufacturing Index                                 49.8   49.7             Jul       -3.1%                       |                                  49.7 l                                                           55.8      ##

U.S. Industrial Production                                   98.0   97.4             Jul                                       ||                4.4%         93.1                                                         l   98.0      ##

Gulf Coast Jet Fuel Prices (cents/gal.)                294.05       278.12           Jul       -6.8%                     |||                                  275                          l                                   326       ##

U.S. Trade - Exports (mil.)                          $134,314       $133,086        Jun                                        |||               8.0%       119585                                     l                       141256    ##

U.S. Trade - Imports (mil.)                          $193,855       $200,251        Jun        -0.3%                                                        173664                                             l               200251

On-Highway Diesel Fuel Prices (cents/gal.)                  402.6   396.5       Aug 18          0.0%                           ||                5.7%         365                                              l               415       ##

Source: Bloomberg, Company Reports, Sterne Agee Estimates




                                                                                                                                                                                                                                 Page 4
                                                                                                                                                                            August 26, 2012


                                                                                                 Peter Arment                (646) 376-5336                                    parment@sterneagee.com
Aerospace & Defense                                                                              Josh W. Sullivan            (646) 376-5337                                  jwsullivan@sterneagee.com



Indicator                                         Latest     Previous   Date              Year over Year Change %                Low              52-Week Range ● Latest              High       Status

Macro Indicators

US Real GDP (y/y%)                                 2.10%     2.20%         Jul   -27.6%      |||||||||||||                       2.05 l                                               3.10

BRICS Real GDP (y/y%)                              6.31%     6.43%        Jun     -2.8%                  |                       6.31 l                                               6.49

ISM Manufacturing PMI                                 49.8   49.7         Jun    -10.8%              |||||                       49.7 l                                               55.8

Aerospace Metrics

Intl Revenue Passenger Traffic Total (y/y%)          7.4%    5.6%         Jun                           n/a                                                   n/a

Intl Available Seat Kilometers Total (y/y%)          5.0%    4.1%         Jun                           n/a                                                   n/a

Intl Freight Tonne kilometers (y/y%)               1.10%     -2.20%       Jun                           n/a                                                   n/a

Premium (Business Class) Air Traffic (y/y%)          1.7%    5.8%        May                            n/a                                                   n/a

Intl Passenger Load Factor Total                     81.0    77.0         Jun                                ||||||   6.9%       74.4                                   l             83.1

US CPI Airline Fares                              $297.83    $306.18      Jul     -0.8%                                        297.83 l                                               314.11

Business Jet Activity (Takeoff & Landings)        327,450    342,968      Jun     -0.8%                                       311346                      l                           349422

Commodity Pricing

Jet Fuel Spot Market Price (USD/gal)              $298.42    $281.85      Jul     -1.1%                                        281.37                 l                               329.84

Brent Blend Crude Oil Spot Price (USD/bbl)        $116.01    $116.81    Aug 24    -1.3%                                         88.99                               l                 128.10

WTI Cushing Crude Oil Spot Px (USD/bbl)            $95.82    $95.97     Aug 24    -1.6%                                         75.67                         l                       109.49

LME Nickel Cash (USD/MT)                          $16,424    $16,023    Aug 23   -32.6%   ||||||||||||||||                     15190          l                                       24954

LME Molybdenum Cash (USD/MT)                      $26,000    $24,500    Aug 23   -21.2%         ||||||||||                     24000              l                                   33500

LME Aluminum Alloy Cash (USD/MT)                   $1,779    $1,771     Aug 23   -25.8%       ||||||||||||                      1720      l                                           2405.50

Source: Bloomberg, Company Reports, Sterne Agee Estimates

 This past week Qantas (QAN, $1.19, NR) announced its first annual operating loss since 1995, primarily on higher fuel costs and weak
 international performance. Qantas also disclosed its plans to retain 15 787-8 orders for 2013, cancel 35 787-9 orders for 2014/15 with option
 rights intact for 50 787-9 to commence in 2016. The Qantas aircraft cancellation hurts sentiment for BA and suppliers in the short term. While
 there is evidence of weakness in demand within Europe, the primary factor driving this cancellation stems from the specific unprofitable cost
 structure Qantas set-up within its international operations- too many new routes in pursuit of market share versus profitable expansion. We see
 this has more of a one-off versus a trend to impact BA's backlog, especially with deferral rates running at below historical averages.

 The BA Backlog Debate: The Qantas cancellation is part airline specific reflecting poorly planned international expansion routes coupled with
 some underlining weakness in air travel demand mainly tied to Europe. So far, ytd air traffic globally remains healthy at 6.5% with capacity
 growth at 4.7% and load factors at a robust 78%. While further weakness in Europe could further curb some air traffic in 2H12, so far the data
 remains favorable to support higher OEM delivery rates. BA's backlog totaling 4,139 aircraft by region are: 1,514 from N.A., 674 from Europe,
 461 South East Asia, 454 from East Asia, 326 from Middle East and 710 from rest of world.

 BA Backlog Aircraft Deferrals Running Below Average: According to our analysis, BA’s deferrals within its backlog are running at near
 trough levels compared to the range of the last 10 years. During the past 10 years, deferral rates in BA’s backlog have ranged from as low as 1%
 to as high as almost 10% on an annual basis. The most recent peak was 2009 with aircraft deferrals topping 9% versus today’s rate at under 3%.




 Source: Boeing, Sterne Agee estimates

                                                                                                                                                                                       Page 5
                                                                                                                                                                                                       August 26, 2012



Auto, Auto Parts and Auto Retailers                                                                   Michael Ward, CFA                                (646) 376-5375                                      mward@sterneagee.com



Indicator                                            Latest        Previous   Date              Year over Year Change %                                     Low             52-Week Range ● Latest                     High     Status

Latest Industry Data

NA Vehicle Production (mil.)                             1.03      1.40          Jul                              |||||||||||||||||||||||
                                                                                                                                       23.9%               0.83                     l                                  1.46

European Vehicle Registrations (mil.)                    1.46      1.77          Jul    -1.9%                 |                                            1.20                 l                                      2.02

U.S. Light Vehicle Dealer Inventory (days supply)             55   59            Jul                              ||||||||||||||       14.3%                  48                    l                                  67

Consumer's Ability & Willingness to Buy

U.S. Real per Capita Disposable Income               $32,871       $32,783       Jul                                                   1.0%              32286                                                     l   32871

U.S. Unemployment Rate                                  8.3%       8.2%          Jul    -8.8%          ||||||||                                              8.1            l                                          9.1

Consumer Confidence - Conference Board                   65.9      62.7          Jul                              ||||||||||||||       14.4%               40.9                                        l               71.6

Consumer Confidence - University of Michigan             72.3      73.2          Jul                              |                    1.1%                55.7                                    l                   79.3

U.S. Housing Prices - NAR (thous.)                      $237       $239          Jul                              ||||                 4.4%                 201                                                l       239

U.S. Housing Prices - S&P Case-Shiller Index           139.0       135.9        May                                                    0.4%               134.1                             l                          143.0

MBA Mortgage Refinance Index                          $4,610       $5,077     Aug 17                              ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
                                                                                                                                       78.8%               2579                                    l                   5453

AAA National Gas Price - Regular                       $3.52       $3.33         Jul    -0.8%                                                              3.28                         l                              3.93

New & Used Vehicle Pricing

Used Vehicle Prices - Manheim Index                    121.2       123.4         Jul    -4.9%              ||||                                           121.2 l                                                      127.8

Used Vehicle Prices - Adesa                           $9,893       $10,271      Jun     -3.6%               |||                                            9750         l                                              10625

CPI - Used Vehicle Prices                             153.18       153.90        Jul                              |                    1.8%             148.05                                             l           153.90

CPI - New Vehicle Prices                              144.62       144.78        Jul                                                   0.8%             142.41                                             l           144.78

Average Industry Incentives                           $2,482       $2,548        Jul    -4.1%              ||||                                            2428             l                                          2676

Vehicle Financing / Retail vs. Fleet

ABS New Issuance (bil.)                                  $9.2      $8.9          Jul                              ||||||||||||||||||||||||||||||||||||||||||||||||||
                                                                                                                                       50.8%                 0.1                                   l                   12.4

Average Interest Rate - New Vehicles                  5.07%        5.40%        Feb    -13.3%     |||||||||||||                                            5.07 l                                                      5.94

Consumer Percent of U.S. Light Vehicle Sales          81.3%        81.2%        May     -1.0%                                                              0.81         l                                              0.83

Consumer Lease - Percent of Receivables               20.2%        20.1%        May                               |||||                5.9%                0.19                                                    l   0.20

U.S. Vehicle Miles Driven (bil.)                       258.4       247.2        May                               ||                   2.3%               216.0                                                l       259.4

U.S. Retail SAAR (mil.)                                  12.3      11.8          Jul                              |||||||||||||||      15.2%               10.4                                                    l   12.3

U.S. Fleet SAAR (mil.)                                      1.8    2.5           Jul                              |                    1.9%                  1.7 l                                                     2.7

Source: Bloomberg, Company Reports, Sterne Agee Estimates

 One of the variables that contributed to the weakness in the auto stocks in the first half was a slowdown in the BRIC countries. Specifically,
 lower demand in China and Brazil contributed to the market concerns in Europe – both countries are important markets for European exports
 and both countries are important markets for GM and Ford. GM is the market leader in the BRIC countries – GM sells about four times as
 many vehicles in the BRIC countries as it does in Europe and about 20% more than it sells in North America. Ford’s South American
 operations have been its most consistent profit contributor over the last five years. The region has contributed about $5 billion in pretax profit
 compared with about $2 billion from Europe since 2007. The rebound in the BRIC countries is good news for the industry, helping support
 European production - about 20% of the exports from Germany go to the BRIC countries.




                                                                                                                                                                                                                       Page 6
                                                                                                                                                                                                               August 26, 2012


                                                                                                                  Michael S. Dudas, CFA                     (646) 376-5329                                             mdudas@sterneagee.com
Coal                                                                                                              Satyadeep Jain                            (646) 376-5357                                               sjain@sterneagee.com



Indicator                                                    Latest        Previous     Date              Year over Year Change %                                Low              52-Week Range ● Latest                     High        Status

Export Data

North Queensland (AUS) Coal Exports (1000 tonnes)               6,027      6,932          Jun     -3.6%                  |                                       5916 l                                                      8058

Richards Bay (S. Africa) Coal Exports (1000 tonnes)             6,279      5,454           Jul                               |||||||||||||||||||||43.9%          3572                              l                         8084

Total U.S. Coal Exports (1000 tons)                           12,916       12,354         Jun                                ||||||||||||||||||||   40.8%        7928                                                   l    12916

U.S. Coal Data

U.S. Weekly Coal Production (1000 tons)                       20,452       19,791       Aug 17    -3.7%                  |                                      17737                              l                         22106

AAR Weekly Coal Carloads                                     123,604       121,764      Aug 17    -8.5%               ||||                                      97914                              l                         142058

Cooling Degree Days                                                   74   92           Aug 16                               |||                    7.2%         1.00                                  l                     101

Coal Consumption (1000 tons)                                  71,698       62,958         Jun    -14.7%            |||||||                                      51574                      l                                 94294

Coal Stockpiles - Utilities (1000 tons)                      198,422       202,815        Jun                                |||||||||              19.7%      139224                                              l         203395

China

Qinhaungdao - Newcastle Price Diff. (USD/tonne)               $34.30       $40.54         Jul                                |||||||                14.9%       17.18                          l                             50.42

Qinhuangdao - Richards Bay Price Diff. (USD/tonne)            $31.93       $39.61         Jul                                                       1.0%        15.68                      l                                 52.50

Thermal Coal Stockpiles - Qinhuangdao (10K tonnes)             673.0       725.1        Aug 17    -7.2%            |||||||                                      448.7                      l                                 945.5

Chinese Total Coal Imports (1000 tonnes)                20,215,444         22,526,977     Jul                                |||||||                15.3%    11098118                                      l                 22526977

Chinese Coking Coal Imports (1000 tonnes)                   3,925,528      6,490,220      Jul     -3.2%                |||                                    2130196                  l                                     6490220

Prices

Central Appalachia Coal (UDS/ton)                             $57.38       $57.88       Aug 23   -24.4%       ||||||||||||                                      54.00         l                                              77.08

Power River Basin Coal (USD/ton)                              $10.00       $9.75        Aug 23   -28.8%     ||||||||||||||                                       6.50                  l                                     14.60

API2 (Delivered to Europe) Coal (USD/tonne)                   $94.20       $94.90       Aug 24   -24.5%       ||||||||||||                                      86.20             l                                          128.75

API4 (Richards Bay - S. Africa) Coal (USD/tonne)              $88.80       $89.25       Aug 23   -25.5%       ||||||||||||                                      86.00     l                                                  119.50

Newcastle Coal (USD/tonne)                                    $91.35       $91.45       Aug 24   -26.9%      |||||||||||||                                       85.1         l                                              127.4

Natural Gas (USD/MMBtu)                                         $2.81      $2.81        Aug 24   -29.1%     ||||||||||||||                                       1.82                  l                                     4.18

Freight Rates

Freight: NewsouthWales - ARA (USD/tonne)                      $18.80       $18.65       Aug 10   -17.7%           ||||||||                                       16.7             l                                          26.6

Freight: Hampton Roads - ARA (USD/tonne)                      $11.20       $11.20       Aug 10   -29.6%     ||||||||||||||                                       11.0 l                                                      17.2

Freight: Richards Bay - ARA (USD/tonne)                       $12.20       $11.90       Aug 10   -26.5%      |||||||||||||                                       11.6     l                                                  17.0

Steel

World Steel Production (1000 tonnes)                         129,738       127,596        Jul                                                       1.9%       115368                                          l             132608

World Steel Capacity Utilization                               78.7%       80.4%          Jul     -1.3%                                                          70.7                                  l                     81.9

HRC Prices (USD/tonne)                                       $631.64       $633.15      Aug 21   -19.4%          |||||||||                                     630.45 l                                                      794.73

US Steel Inventories (1000 tons)                                8,933      9,020          Jul                                |||                    6.2%         7937                                          l             9144

China Steel Inventories (1000 tonnes)                         15,857       15,779         Jul                                |||||||                15.7%       13344                      l                                 18999

China Steel Production (1000 tonnes)                          61,693       60,213         Jul                                ||                     4.0%        49883                                                   l    61693

Source: Bloomberg, Company Reports, Sterne Agee Estimates

 Key highlights from the week:
 Coal had a good run this week, mainly driven by a court ruling on CSAPR. Companies with Appalachian and Illinois Basin thermal coal exposure had a
 good run in the first half of the week, but gave away some of the gains later in the week on disappointing global data (US jobless claims, China
 manufacturing data) and larger than expected build in natural gas inventories.
 • EIA Electricity Monthly Update - Coal consumption of 71.7 mm tons during June was slightly higher than our 70.0 m tons estimate. However, stockpile
 drawdown during June was only 4.5m tons vs. our 8.5m tons estimate. Coal’s share in electricity generation hit a low of 32.5% in April (at par with nat gas).
 However, coal’s share has been inching up since then – 34% in May and 36% in June.
 • Court Ruling on CSAPR – The US Court of Appeals Court vacated CSPAR as the EPA rule would have violated the Clean Air Act (CAA). This ruling
 represents the second time in the past few weeks that a Court has decided the EPA has exceeded its statutory authority granted by Congress. We believe the
 Court's mildly surprising decision supports incremental positive news.
 • BHP Billiton (BHP-ASX, $32.20, NR) moth-balled its big uranium and copper project, Olympic Dam. The company also chose to delay the 2.5
 million tonnes per annum (100 per cent basis) expansion of Peak Downs that is associated with the Caval Ridge mine development. Management expects
 volatility in commodity markets to persist in the short term but remains bullish on medium term demand, given supportive policy and broad growth bias,
 particularly in China.
 • China July coal imports – Another strong 20+ million tonnes import month for China. China imported 20.21 million tonnes of coal in July, up 15% y/y
 but down 10.3% sequentially. China has imported 133.12 million tonnes of coal YTD, up 51.75% compared with the same period last year.
 • June Crude Steel Production - World crude steel production was 130 million tonnes (Mt) in July 2012, up 2.0% y/y and 1.5% sequentially. China’s crude
 steel production for July 2012 was 61.7 Mt, up 4.2% y/y and 2.5% sequentially.
 • This Week - Joy Global (JOY, $55.59, NR) releases Q3 results–We believe JOYG has a good read on the economy and mining. We believe it will be
 interesting to see what management thinks about the near and medium term outlook for Chinese demand, commodity pricing.




                                                                                                                                                                                                                                    Page 7
                                                                                                                                                                                          August 26, 2012


                                                                                                       Michael S. Dudas, CFA             (646) 376-5329                                   mdudas@sterneagee.com
Engineering & Construction                                                                             Patrick Uotila, CPA               (646) 376-5358                                    puotila@sterneagee.com



Indicator                                          Latest     Previous   Date                 Year over Year Change %                       Low         52-Week Range ● Latest                     High          Status

U.S. Macro

Architecture Billings Index                            48.7   45.9         Jun                               n/a                 6.1%      45.8                       l                            51.3

Consumer Confidence - University of Michigan           72.3   73.2          Jul                                   ||||||         13.5%     55.7                                   l                79.3

Core CPI Inflation                                    0.1%    0.2%          Jul       |||||||||||||||||||||||||
                                                                                  -50.0%                                                    0.1 l                                                  0.2

ISM Manufacturing Index                                49.8   49.7          Jul    -3.1%                      |                            49.7 l                                                  55.8

U.S. Housing Starts (thous.)                           746    754           Jul                                   ||||||||||     21.5%      581                                            l       754

U.S. Private Res Construction (mil.)              265,602     262,120      Jun                                    ||||||         12.1%   222417                                                l   265602

U.S. Private Non-Res Construction (mil.)          302,253     302,058      Jun                                    ||||||         14.0%   252261                                                l   302253

U.S. Construction Spending Comm. (mil.)             46,801    47,727       Jun                                    ||             4.5%     43671                                       l            47727

U.S. Construction Spending Man. (mil.)              53,194    51,310       Jun                                    |||||||||      19.3%    38949                                                l   53194

World Macro

China Manufacturing Index                           $50.10    $50.20       Jul     -1.2%                                                   49.0           l                                        53.3

Eurozone Manufacturing Index                        $44.00    $45.10       Jul    -12.7%                 ||||||                            44.0 l                                                  52.0

Oil & Gas

Brent Crude Oil Front Month                       $113.12     $115.01    Aug 24                                   ||             2.7%      89.2                               l                    126.2

Ethane Spot                                         $31.50    $34.00     Aug 24     |||||||||||||||||||||||||||
                                                                                  -55.6%                                                  27.50 l                                                  96.25

Henry Hub Natural Gas Spot                           $2.81    $2.81      Aug 24   -30.0%         ||||||||||||||                            1.82                   l                                4.18

WTI Crude Oil Spot                                  $95.82    $95.97     Aug 24                                   ||||||||||||   12.4%    75.67                           l                        109.49

WTI 321 Crack Spread                                $28.90    $30.26     Aug 24   -15.6%                |||||||                           12.99                               l                    37.96

WTI Crude Oil 12mo Strip                            $97.03    $98.13     Aug 24                                   ||||||||||     10.8%    77.00                           l                        110.03

World Hot Rolled                                  $670.00     $660.00    Aug 21                                   |||            3.5%       590                       l                            735

Commodities

Aluminum (USD/mt)                                   $1,905    $1,875     Aug 23   -19.8%              |||||||||                            1836     l                                              2469

Copper (US/mt)                                      $7,677    $7,599     Aug 23   -13.1%                 ||||||                            6722                   l                                9258

Gold (USD/oz.)                                      $1,670    $1,671     Aug 24    -5.1%                     ||                            1540               l                                    1900

Silver (USD/oz.)                                    $30.64    $30.58     Aug 24   -22.9%            |||||||||||                           26.38           l                                        43.26

Indexes

S&P Construction & Engineering Index              $211.81     $212.63    Aug 24                                   ||||||||||     10.1%      170                               l                            236

Source: Bloomberg, Company Reports, Sterne Agee Estimates


 E&C names continue to recover outperforming broader markets on stronger investor confidence. While in some markets (Australia, Canadian
 Oil Sands) sponsors continue to review project economics, other markets (U.S. Shale derivatives) continue to ramp up. In our view, E&C
 equities remain underpriced. Retracted commodity prices continue to overshadow the opportunities that well positioned global E&C firms have
 to pursue. Many commodity prices remain at investible levels and development should continue based on the longer term investment profiles.
 Lower natural gas prices create multiple derivative opportunities in the U.S. which should help to offset weaker housing and public markets.
 Robust opportunities remain present in the Canadian Oil Sands and international petrochemicals and hydrocarbons. We have buy ratings on
 Chicago Bridge & Iron (CBI) (sustainable EPS growth), Fluor (FLR) (cyclical energy/mining), Jacobs Engineering (JEC) (broad-based
 recovery), North American Energy Partners (NOA) (oil sands activity) and URS Corporation (URS) (strong cash flow). We have neutral
 ratings on KBR, Inc. (KBR) (LogCap and award timing uncertainty) and Foster Wheeler (FWLT) (short-term limited booking visibility). We
 have an underperform rating on Granite Construction (GVA) (budget uncertainty/competitive markets).




                                                                                                                                                                                                         Page 8
                                                                                                                                                                                                       August 26, 2012


Construction Materials &                                                                                 Todd Vencil, CFA                               (804) 282-7385                                       tvencil@sterneagee.com
                                                                                                         Kevin Bennett, CFA                             (804) 282-4506                                     kbennett@sterneagee.com
Diversified Industrials

Indicator                                              Latest        Previous   Date              Year over Year Change %                                    Low            52-Week Range ● Latest                     High     Status

Construction / Materials

U.S. Const. Put in Place - Total (thous.)            $842,082        $838,327     Jun                               ||||||||             8.5%            755420                                                    l   842082

U.S. Aggregates Railcar Ship. - 4 wk avg                20,137       19,721     Aug 18                              |||||||              7.7%               9702                                               l       20798

U.S. Gypsum Industry Ship. (thous.)                         4,280    4,477       1Q12                               ||                   2.2%               4187                  l                                    4477

U.S. Cement Industry Ship. (thous.) - 3 mo avg              7,118    6,584        Jun                               ||||||||||||         12.5%              4620                                               l       7277

Producer Price Index (PPI) - Heavy Const.                   243.5    243.3        Jun                               ||||                 4.4%              231.8                                                   l   243.5

U.S. Const. Employment (thous.)                             5,780    5,718        Jun                               |                    1.3%               5133                                               l       5806

Housing

U.S. Const. Put in Place - Private Res. (thous.)     $265,602        $262,120     Jun                               ||||                 9.3%            222417                                                    l   265602

U.S. Housing Starts (thous.)                                 746     754          Jul                               ||||||||||           21.3%                551                                              l       754

U.S. Building Permits (thous.)                               811     760          Jul                               ||||||||||||||       28.1%                616                                                  l   811

U.S. Housing Prices - S&P Case-Shiller Index (SA)           139.9    138.7       May      -0.9%                                                            136.4                                   l                   141.2

U.S. New Home Sales (thous.)                                 372     359          Jul                               |||||||||||          22.4%                292                                                  l   372

U.S. Pending Home Sales (thous.)                             99.3    100.7        Jun                               ||||                 9.5%                86.9                                          l           101.1

U.S. Existing Home Sales (mil.)                              4.47    4.37         Jul                               |||                  6.9%                4.05                                  l                   4.63

U.S. New Home Inventory (thous.)                             142     143          Jul    -13.9%            ||||||                                             142 l                                                    169

U.S. Existing Home Inventory (mil.)                          2.40    2.37         Jul    -24.1%      ||||||||||||                                            2.32      l                                               3.16

U.S. Total Home Inventory (mil.)                             2.54    2.51         Jul    -23.5%       |||||||||||                                            2.47      l                                               3.33

NAHB/Wells Fargo Housing Market Index                           35   29           Jul                               ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
                                                                                                                                         169.2%                 13                                                 l   35

NAHB Remodeling Market Index (RMI)                              46   49           Mar     -2.1%                 |                                              45            l                                         50

MBA Weekly Applications Survey                              821.3    886.8      Aug 17                              |||||||||||||||||||||||||||
                                                                                                                                         55.5%             528.0                                   l                   949.4

Non-Residential

Architecture Billings Index                                  48.7    45.9         Jul                          n/a                       4.1%                45.8                          l                           51.3

U.S. Const. Put in Place - Priv. Non-Res (thous.)    $302,253        $302,058     Jun                               |||||||||            19.8%           239268                                                    l   302253

U.S. Const. Put in Place - Coml. (thous.)             $46,801        $47,727      Jun                               ||||||||||           20.2%            42153                                            l           47727

U.S. Const. Put in Place - Mfg. (thous.)              $53,194        $51,310      Jun                               ||||||               13.7%            33885                                                    l   53194

Public

U.S. Const. Put in Place - Total Public (thous.)     $274,228        $274,149     Jun     -2.2%                ||                                        272805        l                                               286058

U.S. Const. Put in Place - Hwy & Sts (thous.)         $80,430        $79,261      Jun                               ||||                 4.8%             75046                                    l                   82802

Highway Contract Awards - 3 mo avg (mil.)               $3,949       $3,668       Jul                                                    0.4%               2193                                       l               4359

Source: Bloomberg, Company Reports, Sterne Agee Estimates

 This week was was a good week for Construction Mateirals stocks, driven by an upbeat earnings report from Toll Brothers (TOL - $32.59- Not
 Rated) as well as decent reports on new and existing home sales. Additionally, CEMEX (CX) reported that it was looking to sell a minority stake in
 its Latin American assets in a move to address near-term liquidity concerns. This was certainly a positive development (and the stock rallied), but we
 don't think it solves all of CX's problems as the company remains highly levered and faces serious headwinds from some of its major markets (e.g.
 Spain).

 In separate news, both USG Corp. (USG) and Eagle Materials (EXP) outperformed this week when National Gypsum (private), the #2 U.S.
 wallboard producer, announced a 30% price increase for January 1, 2013. USG caught several competitor upgrades on the news, but we remain
 skeptical that the industry will be able to realize another 30% increase next year. We hope to learn more about the planned price increase, and
 whether USG will follow it, when we have management on the road on September 4th.




                                                                                                                                                                                                                       Page 9
                                                                                                                                                             August 26, 2012


                                                                                                   Stephen Gengaro            (646) 376-5331                sgengaro@sterneagee.com
Oil & Gas                                                                                          Tim Rezvan, CFA            (212) 338-4736                  trezvan@sterneagee.com
                                                                                                   Grant Fox                  (212) 338-4723                     gfox@sterneagee.com


Indicator                                          Latest    Previous   Date              Year over Year Change %                Low       52-Week Range ● Latest    High      Status

Henry Hub Natural Gas Front Month                    $2.70   $2.80      Aug 24   -35.7%          |||||||||||                    1.91            l                    4.05

Henry Hub Natural Gas 12mo Strip                     $3.23   $3.31      Aug 24   -17.5%                |||||                    2.56            l                    4.43

WTI Crude Oil Front Month                           $95.75   $96.27     Aug 24                                 ||||   12.4%    75.67                   l             109.77

WTI Crude Oil 12mo Strip                            $96.56   $97.25     Aug 24                                 |||    10.4%    77.00                   l             110.03

Brent Crude Oil Front Month                       $113.01    $115.01    Aug 24                                        2.6%     89.23                   l             126.22

Brent Crude Oil 12mo Strip                        $110.24    $111.98    Aug 24                                        1.2%     90.59                   l             122.98

Ethane - Mont Belvieu                               $13.23   $14.28     Aug 24   -55.5%   ||||||||||||||||||                   11.55 l                               40.43

Baker Hughes US Rig Count                            1,898   1,914      Aug 24    -3.9%                    |                    1898 l                               2026

Source: Bloomberg, Company Reports, Sterne Agee Estimates

Exploration & Production

This week we downgraded Ultra Petroleum (UPL) to underperform based on expectations of continued low natural gas prices through 2014.
Compared to our coverage group, the company is richly valued and has outperformed since mid June. QEP Resources (QEP) announced after
the close on Thursday it was acquiring a 27.6K net acre position in the Williston Basin for $1.38 billion. An oil acquisition was widely expected
and reflects QEP’s goal of diversifying its production stream to liquids (projected to be 26% of total production in 4Q12). QEP provided
aggressive estimated ultimate recoverable (EUR) assumptions of 1,160 mboe for Middle Bakken wells and 990 mboe for Three Forks wells.

Oilfield Services & Equipment

The international/deepwater offshore theme continues as three significant announcements for offshore service and equipment awards were
revealed last week, lending credence to the international offshore build-out story we have been highlighting. The following awards, two of which
were in the North Sea, were announced the week of 8/20.

Baker Hughes Inc. (BHI, Buy, PT $47) was awarded a 25-field drilling service contract from Statoil (STO, $25.16, Not Rated) for NOK3 billion
(approximately $504 million). The contract is for two years with an option to extend twice for two years apiece. The contract is for providing
directional drilling, MWD/LWD, mud logging and onshore support in STO's Norwegian Continental Shelf (NCS).

Schlumberger Ltd. (SLB, Buy, PT $89) announced a deal with Statoil worth more than NOK2 billion (app. $342 million plus) to provide
wireline logging service for all of STO's E&P licenses offshore Norway for four years. The contract has options for "several" extensions.

Dril-Quip Inc. (DRQ, Neutral) announced a $650 million valued contract with Petrobras (PBR, $21.73, Not Rated) for the supply of subsea
wellhead systems and associated equipment. The four-year contract is for the drilling of Brazilian offshore wells and expected delivery will
commence in the beginning of 2H13.




                                                                                                                                                                      Page 10
                                                                                                                                                                                                    August 26, 2012



                                                                                                           Michael S. Dudas, CFA                            (646) 376-5329                                  mdudas@sterneagee.com
Precious Metals                                                                                            Satyadeep Jain                                   (646) 376-5357                                    sjain@sterneagee.com



Indicator                                         Latest     Previous    Date                     Year over Year Change %                                        Low              52-Week Range ● Latest            High      Status

Commodities

Gold (USD/oz.)                                  $1,669.60    $1,670.60   Aug 23       -8.7%                ||||||||                                             1540                   l                            1900

Silver (USD/oz.)                                   $30.64    $30.58                  |||||||||||||||||||||||||
                                                                         Aug 24 -25.9%                                                                         26.38               l                                43.26

Oil - Brent Crude (USD/bbl)                       $113.12    $115.01     Aug 24                                        |||                  3.8%               89.79                            l                   122.73

Copper (USD/mt)                                 $7,676.50    $7,599.00   Aug 24 -15.3%               |||||||||||||||                                        6721.50                        l                        9257.50

Currencies

US Dollar Index                                     81.60    81.36       Aug 24                                        ||||||||||           10.7%              73.72                                l               84.01

Euro                                                  1.25   1.26        Aug 24 -13.7%                 |||||||||||||                                             1.21         l                                     1.45

Indian Rupee                                        55.50    55.26       Aug 24 -20.5%          ||||||||||||||||||||                                           45.79                                    l           57.16

Japanese Yen                                        78.71    78.49       Aug 24                                                             -2.2%              75.82                   l                            83.73

Swiss Franc                                           0.96   0.96        Aug 24                                        |||||||||||||||||    17.6%                0.79                                   l           1.00

Monetary Indicators

Fed Balance Sheet (bil.)                           $2,828    $2,835      Aug 22       -1.2%                       |                                             2817      l                                         2940

ECB Balance Sheet (bil.)                          3,086 €    3,087 €     Aug 17                                        ||||||||||||||||||||||||||||||||||||||||||||||||
                                                                                                                                             48.6%               1920                                        l      3102

China Monthly New Loans (bil.)                      540.1    919.8           Jul                                       |||||||||            9.6%               470.0          l                                     1011.4

TIPS                                               120.34    120.40      Aug 24                                        |||||                5.4%              113.62                                    l           121.49

3 month LIBOR                                      0.42%     0.43%       Aug 24                                        |||||||||||||||||||||||||||||||
                                                                                                                                             31.6%               0.31                      l                        0.58

Physical Indicators

Comex Net Positions in Gold (contracts)           143,940    146,418      ||||||||||||||||||||||||||||||||||||||||||
                                                                         Aug 14 -42.2%                                                                       130709       l                                         287634

Comex Net Positions in Silver (contracts)          23,402    21,852       ||||||||||||||||||||||||||||||||||||||||||
                                                                         Aug 14 -42.5%                                                                        12011                    l                            47306

Silver Inventories at Comex (1000 oz.)            139,218    145,933         Jul                                       |||||||||||||||||||||||||||||||||
                                                                                                                                             33.6%            99450                                     l           145933

Precious Metals Equities

XAU (PSE Gold & Silver Index)                      168.33    168.41      Aug 24 -22.0%||||||||||||||||||||||                                                  141.60                   l                            227.03

HUI (NYSE ARCA Gold BUGS Index)                    455.97    454.77      Aug 24 -23.6%|||||||||||||||||||||||                                                  375.8               l                                635.0

Source: Bloomberg, Company Reports, Sterne Agee Estimates

Key highlights from the week:
A good week for gold and silver prices and equities. Silver outperformed gold on the upside during the week. Prices increased on release of Fed
minutes which suggests Fed is leaning strongly toward launching a new round of quantitative easing.
• Fed minutes - Minutes of the Fed's July 31-Aug. 1 meeting, released last week, suggest Fed is leaning strongly toward launching a new round
of quantitative easing. Sterne Agee Chief Fixed Income Strategist Sharon Lee Stark continues to anticipate some action from the Fed this fall,
perhaps as early as the September 12-13th FOMC meeting.
• SPDR gold inflows – GLD ETF saw inflows of almost 12 tonnes this week. Investors bought SPDR gold fund ahead of release of Fed
minutes.
• Republicans eye return to gold standard
• All eyes on Jackson Hole this week




                                                                                                                                                                                                                   Page 11
                                                                                                                                                                         August 26, 2012


                                                                                                  Jeffrey A. Kauffman          (212) 338-4765                            jkauffman@sterneagee.com
Transportation                                                                                    Sal Vitale                   (212) 338 4765                                svitale@sterneagee.com
                                                                                                  Ryan Mueller                 (212) 338-4732                              rmueller@sterneagee.com


Indicator                                          Latest     Previous   Date              Year over Year Change %                Low       52-Week Range ● Latest                 High       Status

U.S. Macro

U.S. ISM Manufacturing Index                           49.8   49.7          Jul    -3.1%                  |                      49.7 l                                            55.8

U.S. Industrial Production                             98.0   97.4          Jul                               ||        4.4%     93.1                                         l    98.0

Gulf Coast Jet Fuel Prices (cents/gal.)             294.05    278.12        Jul    -6.8%                |||                    274.82            l                                 325.92

On-Highway Diesel Fuel Prices (cents/gal.)          402.60    396.50     Aug 18                               ||        5.7%   364.80                                l             414.80

U.S. Trade - Exports (mil.)                      $134,314     $133,086     Jun                                |||       8.0%   119585                        l                     141256

U.S. Trade - Imports (mil.)                      $193,855     $200,251     Jun     -0.3%                                       173664                                l             200251

Airlines

U.S. Revenue Passenger Miles                           71.2   67.8        May                                           0.6%     57.5                    l                         80.4

U.S. Available Seat Miles                              85.2   82.1        May                                           0.6%     75.0                    l                         92.5

Air Transport Associate Cargo Tonnage                9,856    10,476       Apr     -0.9%                                         8633                l                             11202

Trucking & Truck Equipment

ATA Truck Tonnage Index                              118.8    118.8        Jul                                ||        4.1%    114.1                l                             124.4

ACT Class 8 Truck Net Orders                        12,545    16,353       Jul    -32.1%   ||||||||||||||||                     12545 l                                            29974

ACT Trailer Net Orders                              14,373    14,014       Jul     -3.6%                  |                     13710 l                                            29536

Ceridien-UCLA Pulse of Commerce Index                97.24    92.44       May                                           1.5%    91.03                        l                     100.69

Cass Corp Freight Index - Shipments                    1.14   1.15         Jul                                          1.8%     1.05                    l                         1.20

Cass Corp Freight Index - Expenditures                 2.39   2.44         Jul                                          0.9%     2.27                            l                 2.45

Rails

Rail Carloads - Ex Grain, Coal, Intermodal        152,254     148,503    Aug 18                               |         3.4%   118263                                    l         157643

Source: Bloomberg, Company Reports, Sterne Agee Estimates


 Railroads: Positive outlook due to elevated automotive and housing-related shipments, with a moderate recovery in coal. Intermodal will
 slow on moderate peak shipping season. Risk to agricultural sector due to extreme summer drought.
 Airlines: Opportunistic outlook as conservative capacity management, positive cost performance and improving pricing offset higher fuel
 costs and weak August optics on difficult comps. Entering bullish trade in September.
 Trucking: Neutral outlook with capacity constraints due to EPA engine regulations and availability of drivers. Favor companies growing via
 acquisition.
 Logistics: Neutral outlook overall – positive for intermodal (although pricing weakening), neutral for international forwarding (although yields
 improving), and negative for domestic truck brokerage, with the global economy facing strong headwinds in Europe and slowing in Asia.




                                                                                                                                                                                    Page 12
                                                                                                                                                                                                  August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Energy: Exploration & Production
                                                                          Price      Price    Upside   Shares   Mkt Cap   Assets            Fiscal Yr. EPS                           P/E
Company Name                                Symbol            Rating    8/25/2012   Target    to PT     Out.     (mm)      (mm)     2011A   2012E   2013E    2014E   2011A   2012E     2013E       2014E

Approach Resources Inc.                     AREX              Neutral    $27.61       NA       NA       33.5     $930      $608     $0.69   $0.37    $0.87    --     40.0x   74.6x     31.7x        --
Berry Petroleum Co.                          BRY               Buy       $38.05     $53.00    39.29%    52.4    $1,978    $2,735    $2.71   $3.41    $4.21    --     14.0x   11.2x         9.0x     --
Chesapeake Energy Corp.                      CHK              Neutral    $19.39       NA       NA      665.4    $12,842   $41,835   $2.85   $0.48    $1.39    --     6.8x    40.4x     13.9x        --
Denbury Resources Inc.                       DNR              Neutral    $15.56       NA       NA      391.2    $6,013    $10,350   $1.43   $1.29    $1.23    --     10.9x   12.1x     12.7x        --
Energen Corp.                                EGN               Buy       $51.59     $60.00    16.30%    72.1    $3,694    $5,237    $3.91   $3.91    $5.36    --     13.2x   13.2x         9.6x     --
GeoResources Inc.                           GEOI              Neutral    $33.20     $37.00    11.45%    25.6     $851      $488     $1.36   $1.95    $2.27    --     24.4x   17.0x     14.6x        --
Gulfport Energy Corp.                       GPOR               Buy       $25.10     $38.00    51.39%    55.7    $1,386     $691     $2.22   $1.97    $2.54    --     11.3x   12.7x         9.9x     --
Noble Energy Inc.                            NBL               Buy       $87.27     $117.00   34.07%   177.8    $15,400   $16,444   $5.24   $4.81    $6.44    --     16.7x   18.1x     13.6x        --
Oasis Petroleum Inc.                         OAS               Buy       $29.41     $45.00    53.01%    93.3    $2,696    $1,727    $0.83   $1.33    $2.29    --     35.4x   22.1x     12.8x        --
Occidental Petroleum Corp.                   OXY               Buy       $87.90     $112.00   27.42%   809.9    $70,676   $61,704   $8.40   $6.51    $6.42    --     10.5x   13.5x     13.7x        --
PetroQuest Energy Inc.                        PQ               Buy       $6.34      $10.00    57.73%    64.1     $407      $516     $0.26   $0.10    $0.53    --     24.4x   63.4x     12.0x        --
Pioneer Natural Resources Co.                PXD               Buy       $98.65     $131.00   32.79%   123.0    $11,828   $11,524   $3.77   $3.91    $5.64    --     26.2x   25.2x     17.5x        --
QEP Resources Inc.                           QEP        Underperform     $28.80     $28.00    -2.78%   177.8    $4,832    $7,718    $1.78   $1.33    $1.85    --     16.2x   21.7x     15.6x        --
Resolute Energy Corp.                        REN              Neutral    $8.61        NA       NA       61.9     $526      $948     $0.45   $0.15    $0.14    --     19.1x   57.4x     61.5x        --
Southwestern Energy Co.                      SWN              Neutral    $31.55       NA       NA      349.1    $10,805   $7,903    $1.82   $1.22    $1.49    --     17.3x   25.9x     21.2x        --
Ultra Petroleum Corp.                        UPL        Underperform     $21.42     $20.00    -6.63%   152.9    $3,297    $4,870    $2.52   $1.45    $0.66    --     8.5x    14.8x     32.5x        --
Whiting Petroleum Corp.                      WLL              Neutral    $44.77       NA       NA      117.6    $5,146    $6,046    $3.86   $3.56    $3.87    --     11.6x   12.6x     11.6x        --

Source: Company reports, FactSet, and Sterne Agee estimates


Tim Rezvan, CFA - trezvan@sterneagee.com - (212) 338-4736




                                                                                                                                                                                                           Page 13
                                                                                                                                                                                         August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Energy: Oilfield Services & Equipment
                                                                 Price      Price    Upside   Shares   Mkt Cap   Assets            Fiscal Yr. EPS                           P/E
Company Name                           Symbol        Rating    8/25/2012   Target    to PT     Out.     (mm)      (mm)     2011A   2012E   2013E    2014E   2011A   2012E     2013E       2014E

Baker Hughes, Inc.                      BHI           Buy       $47.51     $50.00    5.24%    438.5    $20,762   $24,847   $4.20   $3.70    $4.80    --     11.3x   12.8x         9.9x     --
Cameron International Corp.             CAM           Buy       $53.71     $62.00    15.43%   246.3    $13,289   $9,362    $2.66   $3.25    $4.30    --     20.2x   16.5x     12.5x        --
Core Laboratories N.V.                  CLB          Neutral   $121.79       NA       NA       47.3    $5,718     $605     $3.74   $4.70    $5.25    --     32.6x   25.9x     23.2x        --
Dril-Quip Inc.                          DRQ          Neutral    $71.35       NA       NA       40.4    $2,954    $1,086    $2.36   $2.95    $3.75    --     30.2x   24.2x     19.0x        --
FMC Technologies                        FTI          Neutral    $47.21       NA       NA      238.4    $11,321   $4,271    $1.62   $2.10    $2.65    --     29.1x   22.5x     17.8x        --
Halliburton Company                     HAL           Buy       $34.27     $46.00    34.23%   923.0    $31,522   $23,677   $3.36   $3.35    $3.75    --     10.2x   10.2x         9.1x     --
National Oilwell Varco                  NOV           Buy       $77.03     $89.00    15.54%   426.4    $32,971   $25,515   $4.75   $5.95    $6.75    --     16.2x   12.9x     11.4x        --
NewPark Resources Inc.                  NR           Neutral    $7.13        NA       NA       88.1     $633      $887     $0.79   $0.70    $0.95    --     9.0x    10.2x         7.5x     --
Oceaneering International Inc.          OII          Neutral    $54.87       NA       NA      107.9    $5,958    $2,400    $2.05   $2.60    $3.05    --     26.8x   21.1x     18.0x        --
Oil States International Inc.           OIS           Buy       $78.91     $100.00   26.73%    54.7    $4,246    $3,704    $5.86   $8.15    $8.80    --     13.5x   9.7x          9.0x     --
Schlumberger Ltd.                       SLB           Buy       $74.59     $89.00    19.32%   1327.0   $98,452   $55,201   $3.66   $4.35    $5.35    --     20.4x   17.1x     13.9x        --
Superior Energy Services                SPN           Buy       $22.14     $25.00    12.92%   157.5    $3,460    $4,184    $2.18   $2.75    $2.75    --     10.2x   8.1x          8.1x     --
Tenaris S.S. ADS                         TS          Neutral    $41.47       NA       NA      590.3    $24,366   $15,098   $2.19   $3.15    $3.75    --     18.9x   13.2x     11.1x        --
Tetra Technologies Inc.                 TTI          Neutral    $6.83        NA       NA       78.0     $531     $1,203    $0.58   $0.60    $0.90    --     11.8x   11.4x         7.6x     --
Weatherford International Ltd.          WFT           Buy       $12.76     $18.00    41.07%   759.6    $9,662    $21,185   $0.82   $1.10    $1.50    --     15.6x   11.6x         8.5x     --

Source: Company reports, FactSet, and Sterne Agee estimates


Stephen D. Gengaro - sgengaro@sterneagee.com - (646) 376-5331
Grant Fox - gfox@sterneagee.com - (212) 338-4723




                                                                                                                                                                                                  Page 14
                                                                                                                                                                                                    August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Industrials: Aerospace & Defense
                                                                          Price      Price    Upside    Shares   Mkt Cap   Assets            Fiscal Yr. EPS                            P/E
Company Name                                Symbol            Rating    8/25/2012   Target     to PT     Out.     (mm)      (mm)     2011A   2012E   2013E    2014E    2011A   2012E     2013E       2014E

AeroViroment Inc.                           AVAV        Underperform     $23.74     $20.00    -15.75%    22.3     $520      $369     $1.17   $1.36    $1.35   $1.25    20.3x   17.5x     17.6x       19.0x
BE Aerospace Inc.                           BEAV               Buy       $39.03     $58.00    48.60%    104.0    $4,055    $3,837    $2.24   $2.80    $3.35   $4.05    17.4x   13.9x     11.7x       9.6x
Bombardier Inc.                           BBD/B CN            Neutral    $3.67        NA        NA      1780.9   $6,362              $0.47   $0.45    $0.50   $0.55    7.8x    8.2x          7.3x    6.7x
FLIR Systems Inc.                            FLIR             Neutral    $19.86       NA        NA      151.1    $3,004    $2,147    $1.38   $1.40    $1.60   $1.85    14.4x   14.2x     12.4x       10.7x
General Dynamics Corp.                        GD               Buy       $66.09     $82.00    24.07%    352.8    $23,146   $34,883   $6.94   $7.05    $7.65   $8.15    9.5x    9.4x          8.6x    8.1x
Honeywell International                      HON               Buy       $58.36     $69.00    18.23%    780.6    $45,648   $39,808   $4.07   $4.60    $5.35   $6.30    14.3x   12.7x     10.9x       9.3x
Lockheed Martin Corp.                        LMT              Neutral    $92.45       NA        NA      324.4    $29,911   $37,908   $7.82   $8.10    $8.35   $9.45    11.8x   11.4x     11.1x       9.8x
Mercury Computer Systems Inc.               MRCY               Buy       $9.43      $14.00    48.46%     31.0     $294      $386     $0.71   $0.75    $0.50   $1.05    13.3x   12.6x     18.9x       9.0x
Precision Castparts Corp.                    PCP               Buy      $164.85     $190.00   15.26%    145.3    $23,497   $10,559   $7.02   $8.44   $10.15   $11.85   23.5x   19.5x     16.2x       13.9x
Raytheon Co.                                 RTN              Neutral    $55.80       NA        NA      332.0    $18,487   $25,854   $5.29   $5.45    $5.70   $5.90    10.5x   10.2x         9.8x    9.5x
Rockwell Collins Inc.                        COL              Neutral    $49.41       NA        NA      142.2    $7,020    $5,389    $3.95   $4.40    $4.60   $4.80    12.5x   11.2x     10.7x       10.3x
Spirit AeroSystems Holdings Inc.             SPR               Buy       $25.35     $34.00    34.12%    119.5    $2,976    $5,042    $1.36   $1.90    $2.70   $3.10    18.6x   13.3x         9.4x    8.2x
The Boeing Company                            BA               Buy       $71.09     $87.00    22.38%    751.8    $52,896   $79,986   $5.32   $4.80    $5.50   $7.45    13.4x   14.8x     12.9x       9.5x
Triumph Group Inc.                           TGI               Buy       $59.41     $77.00    29.61%     49.9    $2,970    $4,555    $3.85   $4.97    $5.75   $6.75    15.4x   12.0x     10.3x       8.8x
United Technologies Corp.                    UTX               Buy       $80.08     $99.00    23.63%    911.8    $72,214   $61,452   $5.30   $5.35    $6.75   $7.85    15.1x   15.0x     11.9x       10.2x

Source: Company reports, FactSet, and Sterne Agee estimates


Peter Arment - parment@sterneagee.com - (646) 376-5336
Josh W. Sullivan - jwsullivan@sterneagee.com - (646) 376-5337




Industrials: Aerospace & Defense
                                                                          Price      Price    Upside    Shares   Mkt Cap   Assets            Fiscal Yr. EPS                            P/E
Company Name                                Symbol            Rating    8/25/2012   Target     to PT     Out.     (mm)      (mm)     2011A   2012E   2013E    2014E    2011A   2012E     2013E       2014E

Carpenter Technology Corp.                   CRS               Buy       $49.05     $75.00    52.91%     52.6    $2,605    $2,628    $1.52   $2.88    $3.40   $5.00    32.3x   17.0x     14.4x       9.8x
Harris Corp.                                 HRS              Neutral    $46.53       NA        NA      113.8    $5,307    $5,593    $4.97   $5.20    $5.27   $5.30    9.4x    8.9x          8.8x    8.8x
KEYW Holding Corp.                          KEYW               Buy       $10.85     $14.00    29.03%     25.5     $281      $268     $0.02   $0.06    $0.27     --      --      --       40.2x        --

Source: Company reports, FactSet, and Sterne Agee estimates


Josh W. Sullivan - jwsullivan@sterneagee.com - (646) 376-5337
Peter Arment - parment@sterneagee.com - (646) 376-5336


                                                                                                                                                                                                             Page 15
                                                                                                                                                                                                  August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Industrials: Auto, Auto Parts And Auto Retailers
                                                                          Price     Price    Upside   Shares   Mkt Cap    Assets            Fiscal Yr. EPS                           P/E
Company Name                                Symbol            Rating    8/25/2012   Target   to PT     Out.     (mm)      (mm)      2011A   2012E   2013E    2014E   2011A   2012E     2013E       2014E

AutoNation Inc.                               AN              Neutral    $40.52     $38.00   -6.22%   120.7    $4,806     $6,199    $1.93   $2.50    $2.75   $3.00   21.0x   16.2x     14.7x       13.5x
BorgWarner Inc.                              BWA               Buy       $68.43     $82.00   19.83%   114.4    $7,901     $5,959    $4.47   $5.15    $5.80   $6.55   15.3x   13.3x     11.8x       10.4x
Delphi Automotive PLC                       DLPH              Neutral    $29.18     $30.00   2.81%    328.2    $9,562     $9,128    $2.78   $3.65    $3.90    --     10.5x   8.0x          7.5x     --
Ford Motor Co.                                 F               Buy       $9.49      $15.00   58.06%   3743.1   $35,373   $178,348   $1.51   $1.35    $1.75   $1.90   6.3x    7.0x          5.4x    5.0x
General Motors Co.                            GM               Buy       $21.18     $30.00   41.64%   1566.0   $33,418   $144,603   $3.86   $3.45    $3.85   $4.50   5.5x    6.1x          5.5x    4.7x
Group 1 Automotive Inc.                      GPI               Buy       $52.63     $69.00   31.10%    22.8    $1,184     $2,476    $3.62   $4.60    $5.10   $5.60   14.5x   11.4x     10.3x       9.4x
Johnson Controls Inc.                         JCI             Neutral    $26.98     $28.00   3.78%    683.9    $18,404   $29,676    $2.41   $2.50    $2.70   $3.00   11.2x   10.8x     10.0x       9.0x
Lear Corp.                                   LEA              Neutral    $39.78     $44.00   10.61%    98.0    $3,944     $7,011    $5.34   $5.10    $5.30   $5.75   7.4x    7.8x          7.5x    6.9x
Penske Automotive Group                      PAG               Buy       $25.75     $32.00   24.27%    90.3    $2,315     $4,502    $1.80   $2.15    $2.35   $2.50   14.3x   12.0x     11.0x       10.3x
TRW Automotive Holdings Corp.                TRW               Buy       $41.82     $57.00   36.30%   122.0    $5,108    $10,262    $6.11   $5.85    $6.60   $7.40   6.8x    7.1x          6.3x    5.7x

Source: Company reports, FactSet, and Sterne Agee estimates


Michael Ward, CFA - mward@sterneagee.com - (646) 376-5375




                                                                                                                                                                                                           Page 16
                                                                                                                                                                                               August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Industrials: Coal, Metals & Mining, Engineering &
Construction

                                                                   Price     Price    Upside   Shares   Mkt Cap   Assets               Fiscal Yr. EPS                             P/E
Company Name                           Symbol        Rating      8/25/2012   Target   to PT     Out.     (mm)      (mm)     2011A     2012E     2013E     2014E   2011A   2012E     2013E       2014E

Agnico Eagle Mines                      AEM          Neutral      $47.39      NA       NA      171.2    $8,095    $5,034    $1.94     $2.00     $2.15      --     24.4x   23.7x     22.0x        --
Alpha Natural Resources                 ANR           Buy         $6.40      $16.00    1.50    220.4    $1,452    $16,511   $1.88     ($1.35)   ($1.25)    --     3.4x     --           --       --

Arch Coal                               ACI           Buy         $6.58      $15.00    1.28    212.3    $1,435    $10,214   $1.19     ($0.35)   ($0.25)    --     5.5x     --           --       --
Barrick Gold                            ABX          Neutral      $37.78      NA       NA      1000.6   $38,062   $48,884   $4.66     $4.00     $4.75      --     8.1x    9.4x          8.0x     --
Chicago Bridge and Iron Company         CBI           Buy         $37.50     $56.00    0.49     96.7    $3,619    $3,292    $2.55     $3.05     $3.50      --     14.7x   12.3x     10.7x        --
Coeur d'Alene Mines                     CDE           Buy         $22.23     $24.00    0.08     89.9    $1,975    $3,264    $2.60     $1.95     $2.85      --     8.6x    11.4x         7.8x     --
Consol Energy                           CNX           Buy         $32.88     $60.00    0.82    227.6    $7,510    $12,526   $3.04     $1.50     $2.50      --     10.8x   21.9x     13.2x        --
Fluor Corporation                       FLR           Buy         $53.07     $75.00    0.41    167.0    $8,884    $8,270    $3.44     $3.75     $4.20     $4.65   15.4x   14.2x     12.6x       11.4x
Foster Wheeler AG                      FWLT          Neutral      $21.00      NA       NA      107.9    $2,276    $2,607    $1.43     $1.60     $2.00     $2.35   14.7x   13.1x     10.5x       8.9x
Gold Resource Corporation              GORO           Buy         $18.47     $32.00    0.73     52.8     $959      $120     $1.06     $0.85     $1.50      --     17.4x   21.7x     12.3x        --
Granite Construction, Inc.              GVA       Underperform    $27.77     $25.00   (0.10)    38.7    $1,064    $1,548    $1.33     $1.15     $1.85     $2.20   20.9x   24.1x     15.0x       12.6x
Hecla Mining                             HL          Neutral      $5.37       NA       NA      285.5    $1,539    $1,396    $0.47     $0.22     $0.50      --     11.4x   24.4x     10.7x        --
Jacobs Engineering Group, Inc.          JEC           Buy         $40.40     $55.00    0.36    129.7    $5,258    $6,049    $2.65     $2.90     $3.40     $3.75   15.2x   13.9x     11.9x       10.8x

James River Coal                       JRCC           Buy         $2.83      $8.00     1.83     35.9     $106     $1,405    $0.06     ($3.00)   ($3.35)    --     47.2x    --           --       --
KBR, Inc.                               KBR          Neutral      $27.05      NA       NA      147.3    $4,019    $5,673    $2.67     $2.70     $3.05      --     10.1x   10.0x         8.9x     --
Newmont Mining                          NEM           Buy         $49.23     $65.00    0.32    491.2    $24,091   $27,474   $4.34     $4.00     $5.00      --     11.3x   12.3x         9.8x     --
North American Energy Partners          NOA           Buy         $2.70      $5.00     0.85     36.3     $99       $750     ($0.32)   ($0.58)   ($0.16)   $0.30    --      --           --      9.0x
Pan American Silver                    PAAS          Neutral      $17.27      NA       NA      153.9    $2,658    $1,952    $2.63     $1.35     $1.85      --     6.6x    12.8x         9.3x     --
Peabody Energy                          BTU           Buy         $23.37     $45.00    0.93    268.3    $6,153    $16,733   $3.70     $2.00     $3.25      --     6.3x    11.7x         7.2x     --
URS Corporation                         URS           Buy         $37.66     $56.00    0.49     76.9    $2,849    $6,863    $3.53     $4.20     $4.80     $5.25   10.7x   9.0x          7.8x    7.2x
Walter Energy                           WLT          Neutral      $35.49      NA       NA       62.5    $2,236    $6,812    $6.64     $3.15     $6.00      --     5.3x    11.3x         5.9x     --

Source: Company reports, FactSet, and Sterne Agee estimates


Michael S. Dudas, CFA - mdudas@sterneagee.com - (646) 376-5329
Patrick Uotila, CPA - puotila@sterneagee.com - (646) 376-5358
Satyadeep Jain - sjain@sterneagee.com - (646) 376-5357




                                                                                                                                                                                                        Page 17
                                                                                                                                                                                               August 26, 2012



Sterne Agee Energy and Industrials Coverage Universe
Industrials: Construction Materials & Diversified
Industrials

                                                                   Price     Price    Upside   Shares   Mkt Cap   Assets               Fiscal Yr. EPS                               P/E
Company Name                           Symbol        Rating      8/25/2012   Target   to PT     Out.     (mm)      (mm)     2011A     2012E     2013E     2014E     2011A   2012E     2013E     2014E

A.O. Smith Corp.                        AOS          Neutral      $53.65      NA       NA       39.6    $2,115    $2,349    $2.09     $2.85     $3.31     $3.85     25.7x   18.8x     16.2x     13.9x
Albemarle Corp.                         ALB           Buy         $56.40     $70.00    0.24     89.5    $5,074    $3,204    $4.77     $4.76     $5.51     $6.08     11.8x   11.8x     10.2x     9.3x
AMCOL International Corp.               ACO           Buy         $30.38     $36.00    0.19     31.9     $970      $843     $1.87     $2.15     $2.26     $2.57     16.2x   14.1x     13.4x     11.8x
Astec Industries, Inc.                 ASTE           Buy         $29.98     $35.00    0.17     22.8     $686      $717     $1.95     $1.93     $2.50     $2.71     15.4x   15.5x     12.0x     11.1x
CEMEX S.A. B de C.V.                    CX           Neutral      $8.09       NA       NA      1059.8   $8,447    $39,291   ($1.47)   ($0.39)   ($0.11)   $0.16      --      --           --    50.6x
Eagle Materials, Inc.                   EXP          Neutral      $42.82      NA       NA       45.4    $1,910     $985     $0.50     $0.61     $1.66     $2.04     85.6x   70.2x     25.8x     21.0x
EnPro Industries, Inc.                  NPO           Buy         $37.18     $45.00    0.21     20.7     $770     $1,252    $2.07     $2.07     $2.79     $3.52     18.0x   18.0x     13.3x     10.6x
Martin Marietta Materials, Inc.         MLM           Buy         $78.77     $90.00    0.14     45.8    $3,514    $3,148    $1.88     $2.43     $3.51     $4.74     41.9x   32.4x     22.4x     16.6x
Mueller Water Products, Inc.           MWA           Neutral      $3.96       NA       NA      156.8     $621     $1,569    ($0.17)   $0.02     $0.16     $0.26      --      --       24.8x     15.2x
NewMarket Corp.                         NEU          Neutral     $246.67      NA       NA       13.4    $3,284    $1,192    $14.14    $18.07    $18.43    $20.37    17.4x   13.7x     13.4x     12.1x
Prospect Global Resources              PGRX           Buy         $2.69      $5.00     0.86     55.3     $149      $26         --     ($2.24)   ($0.20)   ($0.25)    --      --           --     --
Texas Industries, Inc.                  TXI       Underperform    $41.32     $32.00   (0.23)    28.0    $1,150    $1,577    ($1.93)   ($1.69)   ($0.71)   ($1.44)    --      --           --     --
USG Corp.                               USG          Neutral      $20.61      NA       NA      107.3    $2,137    $3,719    ($3.03)   ($0.92)   ($0.44)   $0.62      --      --           --    33.2x
Vulcan Materials Co.                    VMC          Neutral      $41.07      NA       NA      129.4    $5,123    $8,229    ($0.87)   ($0.29)   $0.39     $0.98      --      --           --    41.9x
Watts Water Technologies.              WTS           Neutral      $37.32      NA       NA       27.8    $1,038    $1,698    $2.18     $2.02     $2.44     $2.91     17.1x   18.5x     15.3x     12.8x

Source: Company reports, FactSet, and Sterne Agee estimates


Todd Vencil, CFA - tvencil@sterneagee.com - (804) 282-7385
Kevin Bennett, CFA - kbennett@sterneagee.com - (804) 282-4506




                                                                                                                                                                                                        Page 18
                                                                                                                         August 26, 2012


                                                      APPENDIX SECTION
IMPORTANT DISCLOSURES:
Regulation Analyst Certification:
I, Peter Arment, Michael S. Dudas, Stephen D. Gengaro, Jeffrey A. Kauffman, Michael Ward, Tim Rezvan, Todd Vencil, Kevin Bennett,
Grant Fox, Satyadeep Jain, Ryan Mueller, Josh W. Sullivan, Patrick Uotila and Sal Vitale, hereby certify the views expressed in this
research report accurately reflect my personal views about the subject security(ies) or issuer(s). I further certify that no part of my
compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this report.

Research Disclosures:
Sterne, Agee & Leach, Inc. makes a market in the following subject companies The Boeing Company, Baker Hughes, Inc., Chicago
Bridge and Iron Company, CEMEX S.A. B de C.V., Dril-Quip Inc., Eagle Materials, Inc., Ford Motor Co., Fluor Corporation, Foster
Wheeler AG, General Motors Co., Granite Construction, Inc., Jacobs Engineering Group, Inc., KBR, Inc., North American Energy
Partners, QEP Resources Inc., Schlumberger Ltd., Ultra Petroleum Corp., URS Corporation and USG Corp..
Sterne, Agee & Leach, Inc.'s research analysts receive compensation that is based upon various factors, including Sterne, Agee & Leach,
Inc.'s total revenues, a portion of which is generated by investment banking activities.
Sterne Agee & Leach, Inc. expects to receive or intends to seek compensation for investment banking services from the subject company
and/or companies in the next three months.

Price Target Risks & Related Risk Factors:
Investment risks associated with the achievement of the price target include, but are not limited to, a company's failure to achieve
Sterne, Agee & Leach, Inc., earnings and revenue estimates; unforeseen macroeconomic and/or industry events that adversely affect
demand for a company's products or services; product obsolescence; changes in investor sentiment regarding the specific company or
industry; intense and rapidly changing competitive pressures; the continuing development of industry standards; the company's ability
to recruit and retain competent personnel; and adverse market conditions. For a complete discussion of the risk factors that could
affect the market price of a company's shares, refer to the most recent Form 10-Q or 10-K that a company has filed with the Securities
Exchange Commission.
Valuation Methodology:
Methodology for assigning ratings and target prices includes qualitative and quantitative factors including an assessment of industry
size, structure, business trends and overall attractiveness; management effectiveness; competition; visibility; financial condition; and
expected total return, among other factors. These factors are subject to change depending on overall economic conditions or industry
or company-specific occurrences. Sterne, Agee & Leach, Inc., analysts base valuations on a combination of forward looking earnings
multiples, price-to-revenue multiples, and enterprise-value-to-revenue ratios. Sterne, Agee & Leach, Inc., believes this accurately reflects
the strong absolute value of earnings, the strong earnings growth rate, the inherent profitability, and adjusted balance sheet factors.
Additional company-specific valuation methodology is available through Sterne, Agee & Leach, Inc.

Definition of Investment Ratings:
BUY: We expect this stock to outperform the industry over the next 12 months.
NEUTRAL: We expect this stock to perform in line with the industry over the next 12 months.
UNDERPERFORM: We expect this stock to underperform the industry over the next 12 months.
RESTRICTED: Restricted list requirements preclude comment.

Ratings Distribution:
                                                                                                         IB Serv./ Past 12Mos.
Rating Category                        Count                     Percent                  Count                     Percent
Buy                                    228                       48.72%                   14                        6.14%
Neutral                                217                       46.37%                   9                         4.15%
Underperform                           23                        4.91%                    0                         0.00%

ADDITIONAL INFORMATION AVAILABLE UPON REQUEST: Contact Robert Hoehn at 1-212-338-4731.
Other Disclosures:




                                                                                                            Appendix Section, Page I
                                                                                                                       August 26, 2012

Opinions expressed are our present opinions only. This material is based upon information that we consider reliable, but we do not
represent that it is accurate or complete, and it should not be relied upon as such. Sterne, Agee & Leach, Inc., its affiliates, or one or
more of its officers, employees, or consultants may, at times, have long or short or options positions in the securities mentioned herein
and may act as principal or agent to buy or sell such securities.
Copyright © 2012 Sterne, Agee & Leach, Inc. All Rights Reserved.
To receive price charts or other disclosures on the companies mentioned in this report, please visit our website at https://
sterneagee.bluematrix.com/sellside/Disclosures.action or contact Sterne, Agee & Leach, Inc. toll-free at (800) 240-1438 or
(205) 949-3689.




                                                                                                         Appendix Section, Page II
                       Founded in 1901, Sterne Agee has been providing investors like you with high-quality investment opportunities for over a century. During the
                       early years, our founders prominently established themselves in the financial securities industry in the southeastern United States. Today, we
                       have expanded to serve all regions of the country. Sterne, Agee is headquartered in Birmingham, Alabama with offices in 22 states. Sterne
                       Agee is one of the largest independent firms in the country. Sterne, Agee & Leach, Inc. is a division of Sterne Agee Group, Inc., which also
                       includes The Trust Company of Sterne, Agee & Leach, Inc.; Sterne Agee Asset Management, Inc.; Sterne Agee Clearing, Inc.; and Sterne Agee
                       Financial Services, Inc.—www.sterneagee.com

                                                              EQUITY CAPITAL MARKETS
                                         Ryan Medo             Managing Dir., Eq. Cap. Mkts.              (205) 949-3623


                      INSTITUTIONAL SALES                                                                     INSTITUTIONAL TRADING
William Jump       Director of Institutional Sales            (404) 814-3960           JT Cacciabaudo        Head of Trading                           (212) 763-8288
Jon Schenk         Assoc. Director of Inst. Sales             (212) 763-8221

                                                                    EQUITY RESEARCH
                                         Robert Hoehn           Director of Research                      (212) 338-4731
CONSUMER                                                                                  FINANCIAL SERVICES (CONT.)
 Apparel Retailing & Toys                                                                 Property/Casualty Insurance
  Margaret Whitfield                   SVP, Sr. Analyst       (973) 519-1019              Dan Farrell                          Mng. Dir.               (212) 338-4782
  Tom Nikic, CFA                       Analyst                (212) 338-4784              Nitin Chhabra, FCAS                  Analyst                 (212) 338-4779

  Interactive Entertainment / Internet                                                 INDUSTRIALS
  Arvind Bhatia, CFA                   Mng. Dir.              (214) 702-4001             Aerospace & Defense
  Brett Strauser                       VP, Analyst            (214) 702-4009              Peter Arment                         Mng. Dir.               (646) 376-5336
  Footwear & Apparel                                                                      Josh W. Sullivan                     Sr. Analyst             (646) 376-5337
  Sam Poser                            Mng. Dir.              (212) 763-8226
  Ben Shamsian                         Analyst                (212) 338-4721              Auto, Auto Parts and Auto Retailers
                                                                                          Michael P. Ward, CFA                 Mng. Dir.               (646) 376-5375
  Leisure & Entertainment
  David Bain                           Mng. Dir.              (949) 721-6651              Coal, Metals & Mining, Engineering & Construction
                                                                                          Michael S. Dudas, CFA                Mng. Dir.               (646) 376-5329
  Restaurants                                                                             Satyadeep Jain                       Analyst                 (646) 376-5357
  Lynne Collier                        Mng. Dir.              (214) 702-4045              Patrick Uotila, CPA                  Analyst                 (646) 376-5358
ENERGY                                                                                    Construction Materials & Diversified Industrials
  Exploration & Production                                                                Todd Vencil, CFA                     SVP, Sr. Analyst       (804) 282-7385
  Tim Rezvan, CFA                      Sr. Analyst            (212) 338-4736              Kevin Bennett, CFA                   Analyst                (804) 282-4506

  Oilfield Services & Equipment                                                        HEALTHCARE
  Stephen D. Gengaro                   Mng. Dir.              (646) 376-5331              Pharmaceutical Services
  Grant Fox                            Analyst                (212) 338-4723
                                                                                          Greg T. Bolan                        Mng. Dir.              (615) 760-1469
FINANCIAL SERVICES                                                                        Himanshu Rastogi, PhD, CFA           VP, Analyst            (615) 760-1478
  Asset Management                                                                     TECHNOLOGY
  Jason Weyeneth, CFA                  SVP, Sr. Analyst       (212) 763-8293
  Charles Warren                       VP, Analyst            (646) 376-5309
                                                                                         Data Networking and Storage
                                                                                          Alex Kurtz                           Mng. Dir                (415) 402-6015
                                                                                          Amelia Harris                        Analyst                 (415) 402-6018
  Banks & Thrifts
  Matthew Kelley                       Mng. Dir.              (207) 699-5800              Financial Technology
  Matthew Breese                       Analyst                (207) 699-5800              Greg Smith                           Mng. Dir                (818) 615-2029
  Brett Rabatin, CFA                   Mng. Dir.              (877) 457-8625              Jennifer Dugan                       Analyst                 (415) 402-6051
  Kenneth James                        VP, Sr. Analyst        (615) 760-1474
  Peyton Green                         Mng. Dir.              (877) 492-2663              Hardware, Mobile Devices, IT Supply Chain
  Zachary Wollam                       VP, Analyst            (615) 760-1468              Shaw Wu                               SVP, Sr. Analyst       (415) 362-7431
  Todd L. Hagerman                     Mng. Dir.              (212) 338-4744
  Robert Greene                        VP, Analyst            (212) 763-8296              LED Supply Chain
                                                                                          Andrew Huang                          Mng. Dir.              (415) 362-6143
  Life Insurance
  John M. Nadel                        Mng. Dir.              (212) 338-4717              Semiconductors
  Alex Levine                          Analyst                (212) 338-4748              Vijay Rakesh                         Mng. Dir.               (312) 525-8431

  Mortgage Finance & Specialty Finance                                                 TRANSPORTATION, SERVICES & EQUIPMENT
  Henry J. Coffey, Jr., CFA            Mng. Dir.              (615) 760-1472
                                                                                          Jeffrey A. Kauffman                  Mng. Dir.               (212) 338-4765
  Jason Weaver                         VP, Sr. Analyst        (615) 760-1475
                                                                                          Sal Vitale                           VP, Sr. Analyst         (212) 338-4766
  Calvin Hotrum                        Analyst                (615) 760-1476
                                                                                          Ryan Mueller                         Analyst                 (212) 338-4732




Email Address for Sterne Agee Employees: first initial + last name@sterneagee.com (e.g., jsmith@sterneagee.com)

				
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