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Consumer Staples _SP-30_

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Consumer Staples _SP-30_ Powered By Docstoc
					Consumer Staples (SP-30)

        Ryan Chestnut
        Brian Cully
        Sabina Curovac
        Orla Costello
Agenda

■ Sector Overview
■ Business Analysis
■ Economic Forecasts
■ Financial Analysis
■ Sector Valuation
■ Recommendation




                       Consumer Staples
Market Capitalization
■ Consumer Staples Sector = $924,124 million
■ S&P 500 = $7,192,455 million
■ Consumer Staples accounts for 12.85% of the S&P 500
■ Consumer Staples accounts for 14.22% of the assets in SIM
  Portfolio.
               Desc                           GICS®    NC   MKTCAP        QTD       YTD
               S&P 500                                 500   7192455    -8.57%    -8.57%
               Energy                            10     39   1014055    -3.16%    -3.16%
               Materials                         15     29    218994    -7.24%    -7.24%
               Industrials                       20     59    763552   -12.66%   -12.66%
               Consumer Discretionary            25     80    589017   -10.64%   -10.64%
               Consumer Staples                  30     40    924124    -7.67%    -7.67%
               Health Care                       35     54   1146392    -1.30%    -1.30%
               Financials                        40     81    770678   -26.55%   -26.55%
               Information Technology            45     75   1166403    -3.08%    -3.08%
               Telecommunications Services       50      9    267760   -11.06%   -11.06%
               Utilities                         55     34    331480    -0.83%    -0.83%
               Source: standardandpoors.com


                                                                                      Consumer Staples
Consumer Staples vs. S&P 500 YTD




                               Consumer Staples
Industries Within Consumer Staples Sector

Industry                         Index Value   % of Sector    Jan.   3 Mos.     YTD    2008 5-yr Beta    5-yr Std. Dev.
Agricultural Products                473.25            1.9      -5      32.1      -5   -37.9      0.05             35.3
Brewers                              465.41           0.65   -17.7         4   -17.7     40        0.4             18.3
Distillers & Vintners                130.26           0.79   -10.3       5.6   -10.3   -21.9       1.1             22.9
Drug Retail                          385.97           7.11     0.1        -5     0.1   -30.7       0.7             17.2
Food Distributors                    267.33           1.45    -2.8     -14.9    -2.8   -26.5       0.9             20.1
Food Retail                            87.57          3.14    -8.9        -8    -8.9   -30.2       0.8             17.6
Household Products                   322.16          24.22     -10     -13.3     -10   -16.1       0.5             13.6
HyperMarkets & Super Centers           86.62          13.5   -15.7     -16.5   -15.7     8.7       0.4             15.8
Packaged Foods & Meats               217.66          13.61     1.8      -8.2     1.8   -15.1       0.5             12.1
Personal Products                    224.88           1.27     -15     -20.3     -15   -36.9       1.3             25.9
Soft Drinks                          194.81          18.76    -6.9        -8    -6.9   -28.7       0.6             14.9
Tobacco                              346.87           13.6    -7.2     -13.8    -7.2   -22.1       0.6              17
  Source: standardandpoors.com




                                                                                           Consumer Staples
   Companies With Consumer Staples Sector
Symbol       Company                       Country   Price   Symbol   Company                        Country   Price
MO           Altria Group Inc.             USA       16.54   KFT      Kraft Foods Inc-A              USA       28.05
ADM          Archer-Daniels-Midland        USA       27.38   KR       Kroger Co.                     USA       22.5
AVP          Avon Products                 USA       20.45   LO       Lorillard Inc.                 USA       59.46
BF.B         Brown-Forman Corp.            USA       45.41   MKC      McCormick & Co.                USA       32.04
CPB          Campbell Soup                 USA       30.37   TAP      Molson Coors Brewing Company   USA       40.27
CLX          Clorox Co.                    USA       50.15   PBG      Pepsi Bottling Group           USA       19.29
KO           Coca Cola Co.                 USA       42.72   PEP      PepsiCo Inc.                   USA       50.23
CCE          Coca-Cola Enterprises         USA       11.23   PM       Philip Morris Intl.            USA       37.15
CL           Colgate-Palmolive             USA       65.04   PG       Procter & Gamble               USA       54.5
CAG          ConAgra Foods Inc.            USA       17.1    RAI      Reynolds American Inc.         USA       38.18
STZ          Constellation Brands          USA       14.52   SWY      Safeway Inc.                   USA       21.43
COST         Costco Co.                    USA       45.03   SLE      Sara Lee Corp.                 USA       10.03
CVS          CVS Caremark Corp.            USA       26.88   SJM      Smucker (J.M.) (New)           USA       45.15
DF           Dean Foods                    USA       19.34   SVU      Supervalu Inc.                 USA       17.54
DPS          Dr Pepper Snapple Group Inc   USA       16.45   SYY      Sysco Corp.                    USA       22.29
EL           Estee Lauder Cos.             USA       26.25   HSY      The Hershey Company            USA       37.28
GIS          General Mills                 USA       59.15   TSN      Tyson Foods                    USA       8.85
HNZ          Heinz (H.J.)                  USA       36.5    WMT      Wal-Mart Stores                USA       47.12
K            Kellogg Co.                   USA       43.69   WAG      Walgreen Co.                   USA       27.41
KMB          Kimberly-Clark                USA       51.47   WFMI     Whole Foods Market             USA       10.25
Source: standardandpoors.com




                                                                                            Consumer Staples
Sector Overview

■ In theory, demand for consumer staples is
  steady or increases during economic
  downturn
■ Defensive sector of mature companies
     Historical correlation with S&P is 0.64
     Stock price stability in downturns, but slow and
      steady growth in upswings
■ Low price elasticity of demand
     Importance of differentiation
                                             Consumer Staples
Industry Characteristics

■ High Barriers to Entry
     Very high capital requirements
     Mature companies
        Strong brands put downward pressure on margins
        Threat of substitution

     International presence
          Remaining growth opportunities




                                               Consumer Staples
Business Opportunities

■ Reduce (commodity) costs
     Hedge costs, merge or partner, create economies
      of scale
■ Reduce finished good prices to wholesalers
     Price differentiation important in slowdowns
■ Differentiate products
     “Superior” products can control prices
     Importance of branding
     Significant substitution threat
                                               Consumer Staples
External Factors

■ Regulatory and legal issues
■ Foreign exchange prices
     Implications of weakness in the dollar
■ Aging domestic population, but global growth
■ Commodity prices
■ State of the economy
■ Environmental Factors


                                               Consumer Staples
Economic Analysis – Main Economic Indicators

                   Change in Real GDP (source: Bloomberg Composite)

                       4
                       3
                       2
                       1
 Percent




                       0
                                                                                 Change in Real GDP
                      -1
                      -2
                      -3
                      -4
                      -5
                           Q4    Q1    Q2    Q3   Q4     Q1   Q2     Q3    Q4
                           07    08    08    08   08     09   09     09    09
           Change in Real -0.2   0.9   2.8   -0.5 -3.8   -3   -0.8   1.1   2
           GDP



                                                                                Consumer Staples
Economic Analysis (cont.)

                                         Unemployment (%)
               10

                8

                6
                                                                               Unemployment (%)
                4

                2

                0
                     Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
  Unemployment (%)   4.8   4.93   5.37   6.07   6.87   7.5   8   8.25   8.4


 •Source: Bloomberg Composite
                                                                          Consumer Staples
Economic Analysis (cont.)

                                CPI (yoy %)

           6

           4

           2
                                                               CPI (yoy %)
           0

           -2

           -4
                Q4   Q1   Q2    Q3   Q4   Q1   Q2   Q3   Q4
                07   08   08    08   08   09   09   09   09
   CPI (yoy %) 3.97 4.1 4.37 5.3 1.63 -0.3 -1.2 -1.7 1.25



 •Source: Bloomberg Composite
                                                              Consumer Staples
Economic Analysis (cont.)




                                      Consumer Staples
  •Source: Bespoke Investment Group
Foreign Currency Exchange




                            Consumer Staples
Foreign Currency Exchange (cont.)




                                Consumer Staples
Sector Sales Analysis
■ Sales Growth
    Current growth below 10-year average
          Current growth close to low of 5.8% experienced in early 2002
     Downward trend since end of 2006, continues out
      to 12/31/2008
■ Largest Companies in Sector
    Proctor & Gamble
          Currently at 5.5%, below 10 yr. average of 8.1%
          Downward trend since mid-2006
     Wal-Mart
          Currently at 9%, below 10-yr. average of 11.7%
          Downward trend since beginning of 2007, with low (8.6%)
           occurring 1/31/08

                                                             Consumer Staples
Sector Earnings Analysis
■ Earnings Growth
    Very low relative to 10-year average
           EPS growth currently at 10 year low
      Large drop in EPS growth since 9/30/2007
■ Largest Companies in Sector
    Proctor & Gamble
           Current growth at 12.1%, above 10-yr. average of 11.1%
           Growth falling since mid-2008; Lowest EPS growth (-1%) occurred
            in 2001
      Wal-Mart
           Current growth at 11.4%, just under 10-yr. average of 12.5%
           EPS growth from mid-2007 to mid-2008, slight drop since

                                                             Consumer Staples
Sector Sales and Earnings Growth
S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30) Price 37.01 StockVal®
     1999
     1999   2000
            2000   2001
                    2001      2002
                            2002        2003
                                     2003      2004                      2007
                                                   2004 2005 20052006 2006        2008
                                                                                2007     2008
                                                                                          2009    2010
                                                                                                 2009    2010
                                                                                                         2011
14

13

12

11                                                                                                 HI    13.6
                                                                                                   LO     5.8
10                                                                                                 ME     7.2
                                                                                                   CU     5.9
 9

 8

 7

 6                                                                                                 03-31-1999
                                                                                                   12-31-2008
 5
                                REVENUES YTY % CHANGE
18

16

14

12                                                                                                 HI    16.9
                                                                                                   LO     1.1
10                                                                                                 ME     9.6
                                                                                                   CU     1.1
 8

 6

 4

 2                                                                                                 03-31-1999
                                                                                                   12-31-2008
 0
                           EARNINGS-PER-SHARE YTY % CHANGE


                                                                                         Consumer Staples
Index Sales and Earnings Growth
■ Sales Growth
    Current growth right below 10-year average

           7.6% compared to mean of 8%
      Downward trend since 9/30/2008
■ Earnings Growth
    Current EPS growth negative, extremely low

         -16.7% compared to mean of 13.4%
         Currently near 10-year low of -17.3%, which occurred
          in the beginning of 2002
      EPS growth plummeting since end of 2006

                                                  Consumer Staples
Index Sales and Earnings Growth
S&P 500 COMPOSITE ADJUSTED M-Wtd (SP5A) Price 26.41                               StockVal®
      1999   2000   2001     2002    2003    2004    2005    2006   2007   2008    2009    2010
14

12

10

 8                                                                                   HI    12.7
                                                                                     LO    -3.4
 6                                                                                   ME     8.0
                                                                                     CU     7.6
 4

 2

 0

-2                                                                                   03-31-1999
                                                                                     12-31-2008
-4
                               REVENUES YTY % CHANGE
25

20

15

10                                                                                   HI    24.3
                                                                                     LO   -17.3
 5                                                                                   ME    13.4
                                                                                     CU   -16.7
 0

 -5

-10

-15                                                                                  03-31-1999
                                                                                     12-31-2008
-20
                           EARNINGS-PER-SHARE YTY % CHANGE



                                                                           Consumer Staples
Comparison of Sales and Earnings
  S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30)                                     Price 37.01 StockVal®
        1999
        1999   2000
               2000   2001
                       2001      2002
                               2002         2003
                                         2003      20042004 2005 20052006      2007
                                                                            2006        2008
                                                                                      2007     2008
                                                                                                2009     2010
                                                                                                        2009     2010
                                                                                                                 2011
  14

  13

  12

  11                                                                                                      HI    13.6
                                                                                                          LO     5.8
  10                                                                                                      ME     7.2
                                                                                                          CU     5.9
   9

   8

   7

   6                                                                                                      03-31-1999
                                                                                                          12-31-2008
   5
                                      REVENUES     YTY % CHANGE
  18

  16

  14

  12                                                                                                      HI    16.9
                                                                                                          LO     1.1
  10                                                                                                      ME     9.6
                                                                                                          CU     1.1
   8

   6

   4

   2                                                                                                      03-31-1999
                                                                                                          12-31-2008
   0
                              EARNINGS-PER-SHARE          YTY % CHANGE



  S&P 500 COMPOSITE ADJUSTED M-Wtd (SP5A)                             Price 26.41                      StockVal®
        1999   2000   2001     2002      2003      2004      2005   2006       2007     2008    2009    2010     2011
  14

  12

  10

   8                                                                                                      HI    12.7
                                                                                                          LO    -3.4
   6                                                                                                      ME     8.0
                                                                                                          CU     7.6
   4

   2

   0

  -2                                                                                                      03-31-1999
                                                                                                          12-31-2008
  -4
                                      REVENUES     YTY % CHANGE
  25

  20

  15

  10                                                                                                      HI     24.3
                                                                                                          LO    -17.3
   5                                                                                                      ME     13.4
                                                                                                          CU    -16.7
   0

   -5

  -10

  -15                                                                                                     03-31-1999
                                                                                                          12-31-2008
  -20
                              EARNINGS-PER-SHARE          YTY % CHANGE




                                                                                                 Consumer Staples
Margin Growth Analysis

■ YTY net profit margin growth for both at
  10-year low
     Consumer Staples: -5%
     S&P 500: -22.8%
■ Downward trend in Consumer Staples starting
  in early 2006
■ S&P 500 plummeting roughly one year later



                                      Consumer Staples
Comparative Margin Growth
S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30)                          Price 37.01   StockVal®
         1999   2000   2001   2002    2003    2004      2005      2006   2007   2008    2009    2010
7


6


5


4


3


2
                                                                                          HI     6.4
                                                                                          LO    -5.0
1                                                                                         ME     0.4
                                                                                          CU    -5.0
0


-1


-2


-3


-4


-5
                                                                                          03-31-1999
                                                                                          12-31-2008
-6
                       NET PROFIT MARGIN ADJUSTED %   YTY % CHANGE


S&P 500 COMPOSITE ADJUSTED M-Wtd (SP5A)                        Price 26.41             StockVal®
         1999   2000   2001   2002    2003    2004      2005      2006   2007   2008    2009    2010
12

10

     8

     6

     4

     2

     0
                                                                                          HI    11.5
 -2                                                                                       LO   -22.8
                                                                                          ME     2.7
 -4                                                                                       CU   -22.8

 -6

 -8

-10

-12

-14

-16

-18                                                                                       03-31-1999
                                                                                          12-31-2008
-20
                       NET PROFIT MARGIN ADJUSTED %   YTY % CHANGE




                                                                                Consumer Staples
 Comparative Income Statement Ratios
                                    Income Statement Ratios
                                        As Reported Financials
S&P CONS. STAPLES SECTOR COMP ADJ (SP-30) M-Wtd                                                                  StockVal ®
FYE Dec                                    Company Filings

                                         2007       2006       2005       2004       2003    2002    2001    2000

Gross Profit Margin (%)                 29.03      29.63      29.47      29.54       29.57   29.54   29.38   29.46
Operating Profit Margin EBITDA (%)      11.45      11.29      11.63      11.04       10.59   11.48   11.63   11.54
Operating Profit Margin EBIT (%)         9.25       9.03       9.41       8.71        8.20    9.08    8.78    8.82
Pre-Tax Profit Margin (%)               11.81      11.80      12.22      11.92       11.29   11.79   10.99   10.47
Tax Rate (%)                            30.46      31.07      31.67      34.62       35.55   34.95   34.88   35.24
Net Profit Margin Adjusted (%)           5.74       5.74       5.87       5.42        5.53    5.54    5.58    5.60


Return on Avg Common Equity (%)         61.88      24.87      27.80      29.58       47.02   32.79   32.53   39.95
Return on Average Total Equity (%)      20.65      21.47      23.14      22.34       23.73   24.06   25.18   28.56
Return on Average Capital (%)           13.51      13.89      14.61      13.59       13.57   13.38   14.29   16.16
Return on Average Assets (%)             8.20       8.26       8.61       8.25        8.41    8.34    8.64    9.40
•Consumer Staples has seen relatively constant margins but decreasing ROE from 2000-2007
Times Interest Earned                    8.96       8.71       9.49       9.12        7.79    7.65    5.95    6.40


                                     Income Statement Ratios
S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd  As Reported Financials                                                  StockVal ®
FYE Dec                                     Company Filings

                                         2007       2006       2005       2004       2003    2002    2001    2000

Gross Profit Margin (%)                 33.44      33.61      33.00      32.63       31.96   31.90   31.34   32.55
Operating Profit Margin EBITDA (%)      21.39      22.28      20.43      19.34       18.54   16.55   18.75   23.54
Operating Profit Margin EBIT (%)        16.94      17.98      16.13      14.44       13.10   10.86   12.18   17.73
Pre-Tax Profit Margin (%)               15.14      16.54      17.05      -18.23      11.00    6.94    8.78   18.15
Tax Rate (%)                            28.29      28.59      29.59      29.62       29.76   27.79   32.25   35.72
Net Profit Margin Adjusted (%)            8.80       9.19       8.74          8.43    7.52    7.16    7.82    8.66


Return on Avg Common Equity (%)         23.68      19.96      25.16      19.49       19.46   17.91   20.34   24.69
Return on Average Total Equity (%)      17.44      17.74      16.90      16.59       15.19   14.04   15.78   19.91
Return on Average Capital (%)             9.27       9.72       9.13          8.72    7.78    7.29    8.45   10.68
Return on Average Assets (%)              3.39       3.54       3.32          3.22    2.88    2.71    3.12    3.78

•S&P 500 has more volatile margins throughout the period and increasing ROE
Times Interest Earned                     2.96       3.45       3.94          4.39    3.88    2.73    2.25    2.95
       •EBITDA range from 16.55% to 23.5%; EBIT range from 10.86% to 17.98%



                                                                                              Consumer Staples
Free Cash Flow & Dividends
                                        Cash Flow Analysis
                                         As Reported
 S&P CONS. STAPLES SECTOR COMP ADJ (SP-30) M-Wtd Financials                                                                           StockVal ®
 FYE Dec                                    Company Filings

                                           2007    % Chg      2006    % Chg        2005    % Chg          2004     % Chg          2003

 FREE CASH FLOW
 Net Cash From Operations                6502.8        4    6241.3       16      5398.6        6      5072.3              2      4983.2
   Capital Expenditures                  2975.0        6    2818.5       20      2353.6        6      2225.6              7      2073.8
 Free Cash Flow                          3527.8        3    3422.8       12      3045.0        7      2846.7              -2     2909.4
   Dividends Common ($ Mil)              2133.5       13    1896.1       17      1618.3       38      1172.4             17       998.8
 Free Cash Flow After Dividends          1394.3       -9    1526.7        7      1426.8      -15      1674.3             -12     1910.6


 ADJUSTED CASH FLOW
 Net Income Reported ($ Mil)             4837.9        8    4464.5       12      3993.7       20      3325.9             19      2797.4

 ■ Free cash flow increasing from 2004-2007
   Accounting Adjustment
 Net Income Adjusted
                                           32.4
                                         4870.3       11
                                                              -67.4
                                                            4397.1
                                                                         14
                                                                         12
                                                                                   -78.1
                                                                                 3915.6       16
                                                                                                           61.4
                                                                                                      3387.2
                                                                                                                         -85
                                                                                                                          5
                                                                                                                                  414.2
                                                                                                                                 3211.6


 ■ Dividends increasing
   Depreciation & Amortization           1862.6        7    1732.7       17      1484.4        2      1456.0              5      1386.0
 Cash Flow Adjusted                      6733.0       10    6129.8       14      5400.0       11      4843.3              5      4597.6
   Capital Expenditures                  2975.0        6    2818.5       20      2353.6        6      2225.6              7      2073.8
                 Free cash flow after dividends decreasing most years
 Free Cash Flow Adjusted                 3758.0       13    3311.3        9      3046.4       16      2617.7              4      2523.8
   Dividends Common ($ Mil)              2133.5       13    1896.1       17      1618.3       38      1172.4             17       998.8

                 Dividend yield increasing, currently at 10-year high
 Free Cash Flow Adjusted After Divs      1624.5       15    1415.2       -1      1428.1       -1      1445.3              -5     1525.0


 CASH FLOW STATEMENT SUMMARY
  S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30) Price 37.012 StockVal®
                     6502.8
 Net Cash From Operations   4 6241.3 16 5398.6  6   5072.3        4983.2
          1999         2000       2001    2002       2003      2004       2005        2006         2007           2008         2009        2010
 Net Cash From Investing
 3.3                                     -4014.1     -30    -3095.2     -18      -2613.8      15      -3057.5            -54    -1990.9
 Net Cash From Financing                 -2564.7      21    -3239.4     -20      -2693.8     -40      -1922.2            21     -2420.5
 3.0
 Other Cash Flows                          89.8      -15     106.1      195        35.9      -61           92.0          -12      104.3
 2.7
 Change In Cash & Equiv                    13.9        9      12.8      -90       126.9      -31          184.6          -73      676.2
                                                                                                                                 HI        3.2
 2.4                                                                                                                             LO        1.0
                                                                                                                                 ME        1.6
 2.1                                                                                                                             CU        3.2
 1.8

 1.5

 1.2
                                                                                                                                 02-05-1999
                                                                                                                                 02-06-2009
 0.9
                                                   DIVIDEND YIELD %
 154
 144

 134                                                                                                                             Consumer Staples
 124                                                                                                                             HI        52.4
                                                                                                                                 LO       -19.4
 116
Sector Valuation




                   Consumer Staples
Sector Valuation (cont.)




                           Consumer Staples
Sector Valuation (cont.)
•Historical Correlation with the S&P 500 is 0.64




                                                   Consumer Staples
Sector Valuation (cont.)




                           Consumer Staples
Recommendation
■ Keep current allocation, sector overweight relative to the S&P
    500 by 175 basis points
■   Possibility of another market downturn followed by low
    volatility around the 8000 point mark
■   Higher return for the sector vs. the market in the next 3-4
    months
■   We see the market having flat returns, and the consumer
    stables sector outperforming by 200-300 basis points
■   Attractive industries: Tobacco, Brewers




                                                     Consumer Staples
References
■ Bloomberg
■ Hoovers
■ Investopedia
■ Standard &Poor’s (www.standardandpoors.com)
■ StockVal
■ Value Line
■ Yahoo Finance (finance. yahoo.com)
■ Bespoke Investment Group (http://bespokeinvest.com)




                                                    Consumer Staples
Supplemental Information

■ Commodity Prices
                                                                                   StockVal®
       1999   2000   2001   2002    2003    2004       2005   2006   2007   2008    2009      2010
790
620                                                                                   HI   787.00
                                                                                      LO   187.25
480                                                                                   ME   232.50
380                                                                                   CU   377.25
                                                                                      GR    5.6%
290
230                                                                                   02-05-1999
180                                                                                   02-06-2009
                              CORN (CENTS PER BU) NF
84
                                                                                      HI   82.11
68
                                                                                      LO   28.86
60
                                                                                      ME   53.87
48                                                                                    CU   49.86
                                                                                      GR   -1.7%
40

32                                                                                    02-05-1999
28                                                                                    02-06-2009
                             COTTON (CENTS PER LB) NF
1200
 900                                                                                  HI 1191.50
                                                                                      LO 235.75
 700
                                                                                      ME 330.50
 500                                                                                  CU 557.00
 400                                                                                  GR   7.5%

 300
                                                                                      02-05-1999
 200                                                                                  02-06-2009
                              WHEAT (CENTS PER BU) NF




                                                                            Consumer Staples
Supplemental Information
 S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30) Price 37.01 StockVal®
       1999   2000   2001   2002     2003   2004   2005   2006   2007   2008   2009   2010    2011
 30
 28                                                                                    HI     28.6
 26                                                                                    LO     19.5
                                                                                       ME     23.2
 24                                                                                    CU     22.1
 22
 20                                                                                     03-31-1999
 18                                                                                     12-31-2008
                                    RETURN ON EQUITY %
 160

 140                                                                                   HI     52.4
 130                                                                                   LO    -19.4
                                                                                       CU     14.8
 110                                                                                   GR    1.4%
 100
  90                                                                                    02-05-1999
  80                                                                                    02-06-2009
                                      TOTAL RETURN %
 14

 13                                                                                    HI    13.76
                                                                                       LO     9.79
 12                                                                                    ME    10.87
                                                                                       CU     9.79
 11

 10
                                                                                        02-05-1999
  9                                                                                     02-06-2009
                                   GROWTH RATE ESTIMATE



                                                                               Consumer Staples
Supplemental Information
■ Future Earnings Estimates
  EPS                                    2009                  2010              2011
 Mean                                     2.84                  2.98              3.28
 High                                     2.97                  3.19              3.49
 Low                                      2.75                  2.79              3.09
 Number of Est                              13                    14                 6
 Number Up                                   1                     1                 1
 Number Down                                 7                     8                 3

                                  First Call FY1 & FY2 Revision Trend                             StockVal®
     S&P CONS. STAPLES SECTOR COMP ADJ M-Wtd (SP-30)
                                                 FY1 DEC 2009
                                  CURRENT EST 2.84 DOWN 9.84% FROM FEB 2008

   4%

         3.15    3.16
   0%


   -4%

                        2.95   2.95    2.95             2.96      2.96   2.94
   -8%                                           2.93                            2.92    2.91
                                                                                                 2.88
                                                                                                        2.84
  -12%

         2/08    3/08   4/08   5/08    6/08      7/08   8/08      9/08   10/08   11/08   12/08   1/09   LAST


                                                FY2 DEC 2010
                                 CURRENT EST 2.98 DOWN 15.34% FROM FEB 2008
         3.52    3.52
   -0%


   -4%


   -8%                  3.27   3.28    3.27      3.25   3.25      3.24
                                                                         3.19
  -12%                                                                           3.12
                                                                                         3.09
                                                                                                 3.05
  -16%                                                                                                  2.98

         2/08    3/08   4/08   5/08    6/08      7/08   8/08      9/08   10/08   11/08   12/08   1/09   LAST


                                                                                                               Consumer Staples

				
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