Global_Infra by iBCAxiom

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									November 13, 2009
Industry Report


Nicholas P. Heymann (212) 338-4703

• We remain constructive on mining equipment manufacturers Bucyrus International (BUCY - $53.13 – Buy) and Joy Global (JOYG - $56.88 – Buy) as both companies are benefiting from robust aftermarket sales, the impending resurgence of original equipment orders, cleaner backlogs scrubbed for cancellations, and early and pro-active restructuring actions that will sustain higher operating margins while production lowers in accordance with weaker order inflow from early 2009. Both companies have strong balance sheets and have focused on high Free Cash Flow Conversion. • Commodity prices have stabilized, and are rising on lower inventory, higher long-term demand, future supply constraints, and a weaker US dollar. • Mining companies have maintained price discipline over the last 12 months, cutting production, and not price. Shareholder friendly managements have managed for cash and positioned companies for long term growth. Positive Operating Cash Flow and higher than expected FCF is leading to higher CapEx budgets. • Since November 2008, production rates at mines have risen, leading to better aftermarket revenues, and comments on 3Q09 conference calls as well as the general confidence exhibited by mining companies is now resulting in a restart of exploration and expansion projects, which will likely lead to better original equipment orders. • Oil is trading above $65, compared to below $35 last year. BUCY and JOYG have a greater than 0.9 correlation with the price of oil. • Coal will continue to be the dominant source of electricity generation, despite near term worries centered around a US carbon tax, or investment in green technologies. Wind and solar are unlikely to be go-to technologies for base load generation, while nuclear may be handicapped by cost, fuel supply, and non-proliferation uncertainty. • Reiterate Buy ratings on Bucyrus International and Joy Global.

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.

Global Industrial Infrastructure While Mining Equipment Revenues Peaked Considerably Later than the General Market, the Recovery May Not Suffer As Much of a Lag A year ago this week, we published a note titled “Lower Operating Earnings and Reduced Cash Flows at Mining Companies Warrants Backlog Discount for Mining Equipment Manufacturers”. We believed at the time that Bucyrus International and Joy Global faced the risk of falling commodity prices, weak coal and mined commodity demand, and that declining cash flows for mining companies could materially impact equipment orders. High Debt/Equity ratios for the coal mining companies were also a cause of concern given the weak commodity price outlook at the time. Mining companies had begun to idle draglines and shovels, and order cancellations started to become a reality. Between November 2008 and March of 2009, commodity prices and the equity market declined drastically as the credit crisis exposed the fragility of the global economy and the pervasive lack of confidence in global economic growth. Inventories for copper, steel, iron-ore, and coal were approaching record levels as the developed world ceased importing finished goods, and the emerging economies halted manufacturing. Long-term demand scenarios, whether for electricity demand or non-discretionary durable goods were cast aside in favor of near-term uncertainty and caution. Mining companies acted decisively in early FY2009 to adjust equipment orders, thus resulting in order-slot cancellations. Atlas Copco (ATCOA SS – €99.85 – NR), an early cycle and short cycle manufacturer of mining equipment, was the first company to bear the brunt of the hesitation and uncertainty with regards to the outlook for hard-rock mined commodities. Cancellations resulted in a 26% order decline in 4Q08, and a 9% decline in 1Q09. By the middle of 3Q09, Atlas Copco commented that they had not experienced any order cancellations since 1Q09. Today, although order rates are significantly below peak, they have stabilized and Bucyrus and Joy Global appear to have cycled through the trough. Joy Global reported abysmally weak orders in 1Q09, with $151M in cancellations reported in the surface segment. Net orders of $554M were the lowest reported since 2Q06. A more conservative approach to backlog accounting is also resulting in a lower reported backlog for Joy Global, who has decided to only count contracted orders for which a deposit had been received, rather than include orders accompanied by LOI’s. Bucyrus International reported a strong uptick in orders in 3Q09 of $676M. This is a lumpy business, and even if we account for the beneficial timing of orders, we notice a sequential trend improvement in aftermarket orders after 4Q08 (after which production rates increased), while original equipment orders continued to decline into 2Q09 ($56M). A conservative extension of order trends will result in a book-to-bill > 1 by 2Q10 and backlog rebuilding. Mining Companies Emerging from “the Great Recession” with Rising Confidence Twelve months ago the question was not whether production and CapEx would be cut, but how often and how deep they would be cut on an on-going basis. In October 2008, 30% of Freeport McMoran’s (FCX - $82.89 – NR) copper operations were loss making at $1.80/ lb copper. Copper is trading close to $3.00 /lb and Freeport is restarting activity at some of its higher cost North-American mines as well as continuing drilling at Tenke Fungurume. The company raised CapEx guidance for FY2010 from $1.0B to $1.4B, inline with FY2009 and FY2006. The company has also re-instated their cash dividend of $0.60 a share. Sustained higher demand for copper and the likelihood of insufficient supply has encouraged the company to restart expansion and exploration activities. BHP Billiton (BHP - $72.61 – NR) was upbeat after 3Q09, reporting that China’s restocking of commodities was complete and that there was no evidence of higher than normal stockpiles across the supply chain. Shipments for met coal continued to increase in response to stronger demand conditions. CapEx for FY2010 is expected to be close to $10B, a modest decrease from the $10.9B spent in FY2009, but still the second highest budget amount, and $1B above FY2008. The multi-year Olympic Dam expansion will

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Global Industrial Infrastructure result in sustained equipment orders, especially for ultra-class Draglines and Electric Mining Shovels. Rio Tinto (RIO-LON - $31.18 – NR) has doubled its planned CapEx spend to $5B, on par with FY2009, after reducing debt by 42% and seeing signs of a global economic recovery. Rio will continue with its iron-ore expansion plans in Pilbara. Vale (VALEUS – $28.05 – NR) will double their 3Q09 CapEx runrate in 4Q09 to hit their $9B planned CapEx spend for FY2009. The company will continue to invest in production and announced a FY2010 CapEx program of $12.9B, largely due to the faster growing emerging market economies. Newmont Mining has steadily raised CapEx estimates for FY2009 and is now forecasting $1.6B - $1.7B vs. $1.4B - $1.6B at the start of the year. While it may be too early to establish whether FY2010 consolidated CapEx for the diversified mining companies will be materially higher than FY2009, recent 3Q09 commentary indicates that spending on equipment will likely fall in between FY2007 and FY2008, which did lead to some of the strongest sales for both Bucyrus International and Joy Global. Diversified Mining CapEx ($ millions, post 3Q09)
Anglo American 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E $1,492 $1,807 $2,282 $3,303 $3,267 $3,130 $3,950 $3,898 $4,017 $4,500 NA Antofagasta $315 $124 $71 $100 $84 $223 $507 $482 $1,135 $1,200 NA Barrick Gold $657 $534 $289 $412 $889 $1,141 $1,056 $1,126 $1,529 $1,500 $1,500 BHP Billiton Ltd $921 $1,325 $2,749 $2,919 $3,072 $4,364 $5,984 $7,177 $8,908 $10,876 $10,000 FreeportMcMoran Copper $574 $430 $318 $290 $445 $829 $1,442 $1,755 $2,700 $1,400 $1,400 Newmont Mining $370 $402 $300 $501 $718 $1,226 $1,551 $1,670 $1,875 $1,650 NA Rio Tinto PLC Teck Resources $406 $848 $1,020 $1,649 $2,067 $3,856 $4,667 $6,839 $10,405 $5,000 $5,000 $141 $217 $118 $125 $180 $279 $273 $579 $761 $575 NA S outhern Copper Peru $132 $161 $77 $50 $172 $471 $456 $316 $517 $450 $600

November 13, 2009

Vale $406 $849 $1,020 $1,649 $2,067 $3,856 $4,667 $6,839 $10,405 $9,000 $12,900

Xstrata NA $136 $175 $337 $532 $813 $1,548 $2,824 $3,743 $3,600 NA

Source: Company Data, Sterne Agee estimates Legislative Uncertainty Around Coal Dwarfed by Intact Long-Term Coal Fired Electricity Demand for Base Load Capacity At present, approximately 52% of global electricity is derived from coal. An escalation in construction costs, lower industrial production, and utilities cautious to invest in new generational capacity began to erode the outlook for coal. Added to these factors of global uncertainty is the US government’s desire to begin to tax carbon emitting generation in order to support renewable energy technology. We remain constructive with regards to the long-term demand for coal. The incumbent party’s struggle to enact highly contentious healthcare reform has resulted in a tremendous loss of political capital. We believe any subsequent efforts at energy and environmental reform will likely be more conciliatory in nature. The US economy is struggling to emerge from “the great recession” and we ponder whether the President would risk even more political capital to hobble the recovery with a tax on US manufacturing through carbon-tax or cap-and-trade legislation. The proposed energy policy to reduce the US’s reliance on fossil fuel and thus reshape foreign policy appears to be based largely on energy efficiency, conservation, and investment in green energy; wind and solar. We estimate that energy efficiency through advance meter infrastructure and demand response could potentially save individual

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Global Industrial Infrastructure consumers between 7% – 10% of current levels of consumption. However, this does rely on significant shifts in consumer behavior from enforcing sufficiently higher peak rates for electricity consumption (2x or 3x), and a successful countrywide installation of metering technology. However, over 60% of electricity consumption is for industrial or commercial use, so efficiency and conservation may not achieve dramatic results. According to the NEI, electricity demand in the US will increase by 30% over the next 20 years, with global electricity demand doubling in that same period. Globally, coal fired capacity is expected to increase to 58% - 60% by 2030, from 52% currently. Even with the dedicated build-out of 30 – 50 new nuclear power plants over the next 15 years, nuclear’s contribution will decline from 19% to 17%, largely due to nuclear power plants built in the early 1960’s reaching end of life status and faster growth of the fossil and green build-out. The tangible hurdles around green infrastructure may limit aggressive installation plans. Wind and solar require considerably greater ancillary investment in distribution, as well as 3x to 5x more copper and electrical steel. A wind farm would require 235 square miles to produce the same amount of electricity as a 1,000MW nuclear power plant, which would require just 2 square miles. After the landmark Kelo vs. New London eminent domain case went to the Supreme Court in 2005, 43 states moved to protect private-property rights. Thus, any wind installation of consequence, even off-shore, will face significant opposition. China, the US, Russia and India possess the largest known coal reserves. China and India are rapidly industrializing and urbanizing and do not share the US view on aggressive carbon reduction targets, especially as they produce significantly lower carbon per capita. Carbon free energy according to the China and India is turning out to be a rich country’s luxury, but a poor country’s burden. Europe, which has traditionally steered away from fossil fuels is once again re-investing in coal fired generation, and granting nuclear power plants life extensions. Germany committed €450M to a new coal fired plant at Mannheim. Alstom (ALO FP – €48.33 – Neutral) has noted a surge in tendering activity for new power plants across Europe, the Middle-East, and China. Interestingly, the company also notes that the gradual recovery in the global economy has resulted in higher electricity consumption, especially in the emerging markets. Alstom is a turnkey builder of power infrastructure and is largely agnostic on the type of fuel, commented that Warren Buffet’s purchase of Burlington Northern (BNI - $97.99 – Neutral) is a smart bet on the resurgence of coal. Peabody Energy Corp. (BTU – $43.39 – NR) recently noted that China and India face limited supplies of met coal products and that both countries may turn to the seaborne markets for substantial volumes. The company estimates that global demand for seaborne coal could grow at a 7% to 8% CAGR, or 300M to 400M tons per year. Peabody plans to double Australia exports over the next 5 years to meet this demand and several expansion projects are underway to deliver this growth. Peabody is also investing to shore up thermal supply. Global steel production increased in each month in 3Q09, and the World Steel Association now expects steel production (excluding China) to rise 13% in FY2010. China accounts for approximately 35% - 40% of world steel production. According to Arch Coal (ACI – $22.70 – NR) the Chinese are utilizing larger blast furnaces that require greater coke strength that cannot be obtained locally. The focus on safety in China has led to mine closures and mine costs have roughly doubled over the last several years. China was a net exporter of met coal 3 years ago and is now on pace to import over 30M tons in 2009. Thermal coal demand is expected to increase by more than 5% as the global economy restarts, fuel switching to natural gas may moderate or reverse, and 9,000 MW of new coal fired generation currently under construction may come online by late 2010. Private produces in Central Appalachia have taken more than 10M tons of production offline and some of the public and private company production cuts in the region may in fact be permanent. Delays in issuance of mining permits in Central Appalachia in 2008 and 2009 will likely impact surface mining production in 2010.

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Global Industrial Infrastructure Thus, thermal coal demand, especially from Central Appalachia could exceed supply by late 2010. Coal Mining CapEx ($ millions, post 3Q09)
Arch Coal Inc. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E $115 $123 $137 $132 $293 $357 $623 $488 $497 $320 Alpha Naturral Resources Inc. NA NA $22 NA $72 $122 $132 $126 $138 $400 Alliance Resource Partners $46 $54 $52 $43 $55 $111 $189 $120 $177 $375 Peabody Energy Corp. $179 $194 $209 $156 $267 $644 $656 $649 $445 $350 CONSOL Energy Inc. $143 $163 $295 $291 $411 $523 $659 $743 $1,062 $1,000 James River Coal Co. NA $44 $23 $10 $26 $85 $63 $49 $75 $60 M assey Energy Co. $205 $248 $135 $164 $347 $347 $298 $270 $737 $275

November 13, 2009

Patriot Coal NA NA NA NA $37 $75 $80 $56 $121 $100

Walter Industries Inc. $45 $75 $70 $71 $43 $147 $101 $156 $102 $85

Source: Company Data, Sterne Agee estimates

Oil and Global Growth Bucyrus International and Joy Global are doubly blessed, or cursed with high correlations. Revenues for both companies have above 0.9 correlations with Mining CapEx, and with the price of oil. Oil is trading above $75, thereby incentivizing further expansion in the Canadian oil sands. We noted in June that the price of oil bears a strong relationship to the health of emerging market economies. Korea, China, and India account for the incremental demand in oil. OPEC has raised its 2010 global oil demand growth forecast three months in a row as economic growth is leading to higher expectations of oil demand. Consumption in China is expected to grow 3.7% in FY2010. Korea, China, and India account for the incremental demand in oil. Although the world has adequate near-term reserves and inventory, oil faces significant long-term supply constraints that ultimately are determinants to price, and not simply just near-term demand disruptions or inventory levels. Thus, the price of oil is not so much the intersection of near-term demand and supply, but rather the long-term incentivizing price to fund future investment. The KOSPI (capitalization-weighted index of all common shares on the Korean Stock Exchanges) has long been viewed as a trend indicator for movements in the price of oil. The Index has a 0.87 correlation in real time, while the price of oil lagged by 90 days has a 0.6 correlation. The run up in the KOSPI indicates a high likelihood that the price of oil maintains current levels and that a fall to the $40 range is an unlikely scenario. The Hang Seng has risen 104%, the KOSPI has rallied 54%, and the SENSEX has grown 108% since early March this year. Contract pricing on coal, which also has a 0.9 correlation with oil is also improving largely due to global cuts in production. Peabody noted that their US revenues per ton increased 11% over 3Q08 due to higher realized prices. Pacific markets led by China and India are strengthening with met and thermal coal spot prices now above the April 1

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Global Industrial Infrastructure benchmarks. Spot prices for high-quality coking coal exceed $160/ton, compared with the April 1 benchmark of $129/ton. YOY Change: KOSPI vs. Crude Lagged by 90 Days
250% CRUDE 200% KOSPI

November 13, 2009


















Source: Sterne Agee & Leach, Bloomberg

Reiterate Buy Ratings on Bucyrus International and Joy Global Given the improving economic outlook, resiliency in the customer base, and able financial stewardship at Bucyrus International and Joy Global, we reiterate our Buy ratings. Both companies have endured severe order compression over the last 9 months, which we feel will no doubt manifest itself in shipments over the next 9 months. However, we believe the improving fundamental outlook for mined commodities due to global urbanization and industrialization will result in stable demand for mining equipment. Both companies derive approximately 50% - 60% of revenues from aftermarket spare parts and services, a segment which grows incrementally each year as the total installed base of equipment is 3x what it was 10 years ago.


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Global Industrial Infrastructure

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IMPORTANT DISCLOSURES: 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, or contact Mr. Robert Hoehn, Director of Research at Sterne, Agee & Leach, Inc., at 1-212-338-4731.

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-torevenue 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., by contacting Mr. Robert Hoehn, Director of Research, at Sterne, Agee & Leach, Inc., at 1-212-338-4731.

Regulation Analyst Certification:
I, Ben Elias, CFA, 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.

Sterne, Agee & Leach, Inc. Disclosure Legend as of November 13, 2009:
Company Alstom SA (ALO.FR - ENXT): Bucyrus International, Inc. (BUCY - NNM): Burlington Northern Santa Fe Corp. (BNI - NYSE): Joy Global, Inc. (JOYG - NNM): Applicable Disclosure None None None None

Disclosure Legend 1. Sterne, Agee & Leach, Inc. makes a market in the shares of the subject company. 2. Sterne, Agee & Leach, Inc. has, over the past 12 months, managed or co-managed a public securities offering or provided other investment banking services for the subject company. 3. Sterne, Agee & Leach, Inc. has various security accounts open for the subject company. 4. Sterne, Agee & Leach, Inc. provides administration for 401(k) plans for the subject company. 5. Sterne Agee Financial Services, Inc. has clearing agreements with the subject company. 6. The Sterne Agee analyst who has active coverage on this company owns a position in the subject company.

Appendix Section, Page I

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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.

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

Ratings Distribution:
Of the securities rated by Sterne, Agee & Leach, Inc., as of September 30, 2009, 36.7% had a BUY rating, 57.4% had a NEUTRAL rating, 5.9% had a SELL rating, and 0% was RESTRICTED. Within those ratings categories, 2.04% of the securities rated BUY, 1.94% rated NEUTRAL, 0% rated SELL, and 0% rated RESTRICTED received investment banking services from Sterne, Agee & Leach, Inc., within the 12 months preceding September 30, 2009.

ADDITIONAL INFORMATION AVAILABLE UPON REQUEST: Contact Robert Hoehn at 1-212-338-4731. Other Disclosures: 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 © 2009 Sterne, Agee & Leach, Inc. All Rights Reserved. Sterne, Agee & Leach, Inc. disclosure price charts are updated within the first fifteen days of each new calendar quarter per FINRA regulations. Price charts for companies initiated upon in the current quarter, and rating and target price changes occurring in the current quarter, will not be displayed until the following quarter.

Price Chart(s):

Appendix Section, Page II

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Appendix Section, Page III

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 including Alabama, Arkansas, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Pennsylvania South Carolina, Tennessee, Texas, Virginia, and Wisconsin. 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.—

Ryan Medo Robert Lake Managing Dir., Eq. Cap. Mkts. Vice President (205) 949-3623 (205) 949-3624 David Lee Yan Chao Chuck Carlisle Director, Equity Products Associate Sr. Portfolio Analyst (205) 949-3689 (205) 949-3622 (205) 949-3571

Robert Hoehn Director of Research (212) 338-4731

Mark Connelly Ashish Gupta Jason Marcus Mng. Dir. Analyst Associate (212) 338-4712 (212) 338-4721 (212) 338-4746

Matthew Kelley Mike I. Shafir Matthew Breese Edward D. Timmons Brett Rabatin, CFA Kenneth James Peyton Green Michael Lipman Mng. Dir. VP, Sr. Analyst Analyst SVP, Sr. Analyst SVP, Sr. Analyst Analyst Mng. Dir. Analyst (207) 699-5800 (212) 763-8239 (207) 699-5800 (800) 203-5332 (877) 457-8625 (615) 760-1474 (877) 492-2663 (615) 269-7323

CONSUMER Apparel Retailing & Toys
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Lawrence T. De Maria, CFA Ben Elias, CFA SVP, Sr. Analyst VP, Sr. Analyst (212) 338-4704 (212) 338-4706

Lynne Collier Philip May Mng. Dir. Analyst (214) 702-4045 (214) 702-4004

Building, Power & Water Infrastructure
Michael J. Coleman, CFA VP, Sr. Analyst (212) 338-4718

ENERGY Oilfield Services & Equipment
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Engineering and Construction
Chase Jacobson VP, Sr. Analyst (212) 338-4753

Nicholas P. Heymann Samuel H. Eisner Jordan Calabrese Mng. Dir. Analyst Associate (212) 338-4703 (212) 338-4705 (212) 338-4729

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James M. Schutz John Schutz Adam Barkstrom, CFA Blair Brantley, CFA Dir. of Fin. Ser. Associate Mng. Dir. Analyst (864) 241-3384 (502) 420-4015 (800) 906-0577 (800) 621-8635 Jeffrey A. Kauffman Sal Vitale Mng. Dir. Analyst (212) 338-4765 (212) 338-4766

Carlo Francisco Marianne Pence Nathan Mitchell Elizabeth Koch Supervisory Analyst Mgr., Res. Admin. Editor Editor (914) 434-3451 (205) 949-3618 (205) 949-3635 (615) 289-4122

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NEW YORK (cont.)
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Justin Brennan Tom Cervantez Chris Larson Naghmeh Rabii (415) 362-6140 (415) 362-7430 (415) 362-6142 (415) 362-6141

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Michael J. O’Boyle, Mng. Dir. Michael Perry, Mng. Dir. Robert P. Hutchinson, Mng. Dir. Jeffrey W. Prochnow, CFA, SVP D. Timothy Speegle, SVP John McCrory, SVP Robert Toma, VP Horacio Barakat, VP Andrew Stager, Associate Nathan Strall, Associate Jung Lee, Associate Michael Stern, Analyst (205) 949-3592 (212) 338-4736 (617) 478-5011 (402) 778-5054 (205) 380-1720 (205) 949-3664 (617) 478-5005 (212) 338-4768 (617) 478-5009 (617) 478-5010 (212) 338-4769 (212) 338-4756

John Bolebruch, Mng. Dir. – Industrials Richard Cunniffe, SVP – Industrials Everett Titus III, Mng. Dir – Energy Will Brooke, Analyst - Industrials (212) 338-4716 (212) 338-4713 (908) 730-7882 (212) 763-8278

Craig B. Jampol, Mng. Dir. (212) 338-4708

Email Address for Sterne Agee Employees: first initial + last (e.g.,

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706 E. Washington Street Greenville, SC 29601 (864) 233-6630 (864) 233-6630 fax

2 Union Street Suite 403 Portland, ME 04101 (207) 699-5800 (207) 699-5888 fax

8400 Normandale Lake Boulevard Suite 920 Bloomington, MN 55437 (952) 841-6410 (800) 949-4102

3100 West End Avenue Suite 930 Nashville, TN 37203 (615) 269-7323 (615) 269-9223

5609 Patterson Avenue Suite B Richmond, VA 23226 (804) 521-3224 (804) 521-3199 fax

265 Franklin Street Suite 310 Boston, MA 02110 (617) 478-5000 (800) 836-4616 (617) 443-0310 fax

639 Loyola Ave Suite 200 New Orleans, LA 70113 (504) 299-1021 (888) 978-3763 (504) 299-0956 fax

1001 Craig Road Suite 330 St. Louis, MO 63146 (314) 872-2125 (314) 872-2126 fax

123 N. Wacker Drive Suite 1250 Chicago, IL 60606 (312) 525-8440 (800) 966-0815 (312) 525-8438 fax

2 Grand Central Tower 140 East 45th Street 18th Floor New York, NY 10017 (212) 763-8224 (800) 966-0814 (212) 763-8201 fax

One Maritime Plaza Suite 1940 San Francisco, CA 94111 (415) 362-7430 (415) 362-7436 fax

Email Address for Sterne Agee Employees: first initial + last (e.g.,

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