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					Energy and Utilities
          ConocoPhillips

              Analysis of:
   Business, Financials and Valuation



Recommended action: Maintain current weight
in SIM Portfolio – 0.74%.
         ConocoPhillips (COP)
          Business Analysis


ConocoPhillips is an integrated, global energy company.
The Company is the result of the merger between Conoco
Inc. (Conoco) and Phillips Petroleum Company (Phillips),
which was consumated on August 30, 2002, at which time
Conoco and Phillips combined their businesses by merging
with separate acquisition subsidiaries of ConocoPhillips. As
a result of the merger, Conoco and Phillips each became
wholly owned subsidiaries of ConocoPhillips. The
Company's business is organized into five operating
segments: exploration and production, midstream, refining
and marketing, chemicals and emerging businesses.
August 31, 2001 (fiscal 2001).
             ConocoPhillips (COP)
              Business Analysis

• Petroleum exploration   • 30.3% interest in
  and production            Duke Energy Field
• Petroleum refining,       Services - Natural gas
  marketing, supply,        gathering, processing,
  and transportation        and marketing
• Emerging                • 50% interest in
  technologies              Chevron Phillips
                            Chemical Company –
                            chemicals and
                            plastics distribution
                            and production
                         ConocoPhillips (COP)
                          Business Analysis
                    Factors Impacting Valuation

     Positive Factors                   Negative Factors



• Innovative company             • Economic cycles and demand volatility
• Improving credit rating        • Threat of lower oil prices (Current
•Tight inventories and           valuations reflect a forecast of $20/BBL)
capacity in industry
                         ConocoPhillips (COP)
                          Business Analysis
                               Catalysts




Major shifts in supply        Revolutionary               Revolutionary
and demand                    Technologies                energy sources


Increases energy price      Reduces cost of               Force a major
volatility                  exploration, production,      restructuring of the
                            distribution, etc.            industry

      Forecast:
      • Lower energy prices are “baked” into valuations ($20/BBL)
      • Economic recovery could drive prices higher than expectations
                                                   Cash Flow Analysis
 CONOCOPHILLIPS (COP)                                                                                            StockVal ®
 FYE Dec
                                   2002    % Chg       2001    % Chg      2000    % Chg     1999    % Chg     1998    % Chg

Net Income Reported ($ Mil)       -295.0              1661.0     -11    1862.0      206    609.0      157    237.0      -75
  Accounting Adjustment          1787.0     9999        16.0     -60      40.0              -66.0            129.0
Net Income Adjusted              1492.0      -11      1677.0     -12    1902.0      250    543.0       48    366.0      -59
  Depreciation & Amort           2223.0       65      1344.0      15    1169.0       30    902.0       52    594.0      -31
Cash Flow Adjusted               3715.0       23      3021.0      -2    3071.0      113   1445.0       51    960.0      -45
  Capital Expenditures           4388.0       45      3016.0      50    2017.0       19   1690.0      -18   2052.0        0
Free Cash Flow Adjusted           -673.0                 5.0    -100    1054.0             -245.0      78   -1092.0    -282
  Dividends Common ($ Mil)        718.5       74       413.0      18     348.6        1    346.0       -2    353.8       -1
Free Cash Flow After Dividends   -1391.5    -241      -408.0             705.4             -591.0      59   -1445.8    -125


Net Cash From Operations         4767.0       35      3529.0     -11    3984.0      105   1941.0       19   1630.0      -27
Net Cash From Investing          -2485.0       8     -2702.0      53    -5757.0    -288   -1482.0      25   -1984.0       4
Net Cash From Financing          -2220.0    -178      -799.0            1759.0             -418.0            288.0
Other Cash Flows                  103.0                -35.0              25.0                0.0               0.0
Change In Cash & Equiv            165.0                 -7.0              11.0      -73     41.0              -66.0      85




                                            SUMMARY OF 2002

         a. Continued benefit from merger, cost cutting
         b. CAPEX up (negative factor for valuation)
         c. Negative financing cash flow (positive factor for valuation)
                                                    DuPont Analytics
CONOCOPHILLIPS (COP)                                                                                StockVal ®
Price 54.660 08/15/03 FYE Dec
                            INT          TAX           ASSET
          MARGIN%        BURDEN       BURDEN%           TURN       LEVERAGE


              EBIT         EBT                T         Sales          Assets
               -------      -------      1 - ----        -------        -------   ROE      Acct     ROE
              Sales        EBIT           EBT           Assets         Equity     Rpt%     Adj%     Adj%


 2002           5.22         0.73         32.99           1.01           2.55      -1.35    8.15     6.80
 2001          15.36         0.85         49.49           0.89           2.73      16.26    0.15    16.41
 2000          19.37         0.87         49.31           1.24           3.36      34.99    0.76    35.75
 1999          10.09         0.78         51.39           1.02           3.36      13.89    -1.50   12.39
 1998           5.21         0.63         56.29           0.92           3.11       5.25    2.85     8.10


 1997          12.96         0.89         50.47           1.21           3.02      21.16    -1.44   19.72
 1996          15.38         0.90         59.99           1.23           3.43      35.03    -9.97   25.06
 1995          10.17         0.78         44.08           1.14           3.82      15.27    3.52    18.79
 1994           9.15         0.76         56.81           1.09           3.99      17.16    -2.16   15.00
 1993           6.72         0.65         45.54           1.09           4.18       9.02    0.71     9.73


 1992           7.57         0.57         52.84           1.04           4.21       6.60    2.71     9.31
 1991           7.38         0.48         21.73           1.07           4.31       9.42    -0.40    9.02
 1990          13.34         0.65         45.58           1.16           4.82      32.12    -3.75   28.37
 1989           9.57         0.45         40.86           1.07           5.47      10.32   13.19    23.51
 1988          16.23         0.61         58.30           0.94           6.46      34.85    -1.06   33.79


 1987           9.83         0.25         13.16           0.87           7.34       2.10    1.55     3.65
 1986          14.46         0.48         33.83           0.74           7.81      13.46    -8.09    5.37
     CONOCOPHILLIPS (COP)                                                                                   118
     PRICE 54.7 DATE 08-15-2003                                                                             104
     StockVal®                                                                                               91
80                                                                                                           80
70                                                                                                           70
61                                                                                                           61
54                                                                                                           54
47                                                                                                           47
42                                                                                                           42

36                                                                                                           36
32                                                                                                           32
28                                                                                                           28
25                                                                                                           25
22                                                                                                           22
                                                                               The Ohio State University
19                                                                             Fisher College of Business    19
  1993   1994     1995    1996     1997     1998   1999    2000   2001    2002    2003     2004    2005
Price Change     %     Diff SP5    First Call Data   2003   2004   2005                Data Page # 1
1-Week         1.22        -0.12   Mean Estimate     5.64  4.65  4.32      Revenues ($Mil)          90,575
4-Weeks        1.79         2.05   Change          +110% -18%       -7%       Market Value ($Mil)      37,398
QTD           -0.26        -1.91   High              6.63    6.20  4.80       Shares Out (Mil)           684.2
YTD           12.96         0.36   Low               3.30    2.30  3.99       Daily Volume (Thou)        1,981
2002         -19.70         3.67   Total              23      21      6       Daily Volume ($Mil)        108.3
2001           5.95       18.99    # Up               19      11      1       Dividend Estimate           1.60
2000          21.01       31.15    # Down               3       5     3       Payout Ratio                28%
1999          10.26        -9.26   House Estimate                             Retention Rate              72%
   FYE Dec 2002 EPS 2.69           PE Ratio            9.7   11.8  12.7       Dividend Yield            2.93%
CONOCOPHILLIPS (COP) Price 54.7                                                             StockVal®
      1993   1994    1995    1996    1997    1998    1999    2000   2001      2002   2003    2004    2005
1.4

1.0                                                                                           HI    1.11
                                                                                              LO    0.36
0.7                                                                                           ME    0.71
                                                                                              CU    0.72
0.5

                                                                                               08-13-1993
0.3                                                                                            08-15-2003
                 PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
2.1
1.8                                                                                           HI    1.83
1.5                                                                                           LO    0.38
                                                                                              ME    0.80
1.2                                                                                           CU    0.64
0.9
0.6                                                                                            08-13-1993
0.3                                                                                            08-15-2003
      PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
3.5
                                                                                              HI    2.58
2.3
                                                                                              LO    0.23
1.5                                                                                           ME    1.06
1.0                                                                                           CU    1.60
                                                                                              FY1   1.59
0.6                                                                                           FY2   1.16
0.4
                                                                                               09-30-1993
0.2                                                                                            06-30-2003
               EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
CONOCOPHILLIPS (COP) Price 54.7                                                               StockVal®
      1993      1994    1995    1996    1997    1998    1999    2000    2001    2002   2003    2004    2005
0.8
0.7                                                                                             HI    0.78
0.6                                                                                             LO    0.26
                                                                                                ME    0.44
0.5                                                                                             CU    0.28
0.4
0.3                                                                                              08-13-1993
0.2                                                                                              08-15-2003
                PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.8
1.5                                                                                             HI    1.65
                                                                                                LO    0.71
1.2
                                                                                                ME    0.96
1.0                                                                                             CU    1.65

0.8
                                                                                                 09-30-1993
0.6                                                                                              06-30-2003
             REVENUE-PER-SHARE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.5

1.2                                                                                             HI    1.34
                                                                                                LO    0.17
0.9                                                                                             ME    0.60
                                                                                                CU    0.52
0.6

0.3
                                                                                                 09-30-1993
0.0                                                                                              06-30-2003
      NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
CONOCOPHILLIPS (COP) Price 54.7                                                             StockVal®
  1993   1994    1995     1996     1997    1998     1999     2000    2001     2002   2003       2004
1.4

1.2


1.0                                                                                           HI    1.30
                                                                                              LO    0.27
                                                                                              ME    0.62
0.8                                                                                           CU    0.40

0.6


0.4
                                                                                               08-13-1993
0.2                                                                                            08-15-2003
          PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
2.4

2.1

1.8
                                                                                              HI    2.18
1.5                                                                                           LO    0.21
                                                                                              ME    0.94
1.2                                                                                           CU    0.73
0.9

0.6

0.3
                                                                                               09-30-1993
0.0                                                                                            06-30-2003
          RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
                                                      Quarterly Summary
CONOCOPHILLIPS (COP)                                                                                                       StockVal ®
Price 54.660 08/15/03 FYE Dec                                                                      Expected Report Date: 10/30/03
 Qtr   Data    2004        %chg   2003        %chg   2002       %chg   2001          %chg   2000       %chg    1999           %chg

Mar    Revs                       27,077.0     221    8,431.0     63       5,160.0      2    5,049.0     82      2,775.0          -19

       Earn                       1,269.90    NMN       -7.65   NMN        506.61      89    267.41    NMN         2.53           -99

       EPS         1.10E    -41      1.86     NMN       -0.02   NMN          1.97      88      1.05    NMN         0.01           -99

       Divs                         0.400       11     0.360       6        0.340       0     0.340       0       0.340              0

Jun    Revs                       25,595.0     146   10,414.0    101       5,179.0     -9    5,672.0     61      3,526.0             7

       Earn                       1,081.02     229    328.70     -45       595.25      36    437.72     309      106.95           -25

       EPS         1.31E    -17      1.58       86      0.85     -63         2.31      35      1.71     307        0.42           -22

       Divs                         0.400       11     0.360       6        0.340       0     0.340       0       0.340              0

Sep    Revs                         133.8E    NMN    14,557.0    151       5,808.0      6    5,455.0     33      4,093.0          27

       Earn                                           441.15      21       363.70     -28    501.91     128      219.68          215

       EPS                           1.23E      35      0.91     -30         1.30     -33      1.95     127        0.86          219

       Divs                                            0.400      11        0.360       6     0.340       0       0.340              0

Dec    Revs                         129.7E    NMN    23,346.0    167       8,745.0     46    5,979.0     30      4,594.0          57

       Earn                                           647.45     206       211.32     -70    704.06     233      211.56         NMN

       EPS                           1.06E      12      0.95      73         0.55     -80      2.71     227        0.83         NMN

       Divs                                            0.400      11        0.360       6     0.340       0       0.340              0

Year   Revs                       52,935.5E     -7   56,748.0    128      24,892.0     12   22,155.0     48     14,988.0          17

       Earn                                          1,409.65    -16      1,676.87    -12   1,911.10    253      540.72           44

       EPS                           5.73E     113      2.69     -56         6.13     -17      7.42     250        2.12           48

       Divs                                            1.520       9        1.400       3     1.360       0       1.360              0
       ConocoPhillips (COP)
           Conclusions


Recommended action:
    NONE
            ExxonMobil

              Analysis of:
   Business, Financials and Valuation



Recommended action: Increase the number of
shares in the portfolio by 10%
                              ExxonMobil (XOM)
                              Business Analysis

             XOM is a global integrated energy company

                             Major Business Segments

                 Upstream             Downstream            Chemicals


             • Production        • Refining & Supply   • Specialties
             • Exploration       • Fuels Marketing


% Earnings        83%                   10%                     7%

% Capital         51%                   32%                    17%

                  22%                    5%                     6%
ROCE
                         ExxonMobil (XOM)
                         Business Analysis
              Competitor Analysis: ROCE 1985-2002

  16
  14
                                                             ExxonMobil
  12
  10                                                         Royal Dutch
                                                             Shell
    8                                                        BP
    6
                                                             ChevronTexaco
    4
    2
    0
        $10-15       $15-20      $20-25          $25-30
                 Brent Price in $’s per barrel

XOM has outperformed its competition at all price levels during this period.
                       ExxonMobil (XOM)
                       Business Analysis
              Sources of Competitive Advantage


Low cost producer                    XOM cost/barrel oil
(Economies of scale)
                                     Last 5 yrs. Avg. cost $4.39
                                     Current cost $3.50 to $3.75




                                     • Hydrocarbon detection
Technology
                                     • Optimal drilling location
(Future low cost leadership)
                                     • Long-distance pipelines
                                     • Liquefy natural gas
                                     • Greenhouse-gas emissions
                           ExxonMobil (XOM)
                           Business Analysis
                   Factors Impacting Valuation

     Positive Factors                      Negative Factors

• Dividend up 21 consecutive yrs.   • Economic cycles and demand volatility

• AAA debt rating 84 years          • Threat of lower oil prices (Current
                                    valuations reflect a forecast of $20/BBL)
• Share repurchase program
                                    • Declining net reserve base
• Stronger emphasis on
natural gas (Qatar deal)            • Disruptive innovations creating
                                    substitute products (e.g. hydrogen)
• Reserve additions in 2003
should outpace declining
base
• Tight inventories and
capacity in industry
                         ExxonMobil (XOM)
                         Business Analysis
                               Catalysts




Major shifts in supply        Revolutionary               Revolutionary
and demand                    Technologies                energy sources


Increases energy price      Reduces cost of               Force a major
volatility                  exploration, production,      restructuring of the
                            distribution, etc.            industry

      Forecast:
      • Lower energy prices are “baked” into valuations ($20/BBL)
      • Economic recovery could drive prices higher than expectations
                                                      Cash Flow Analysis
 EXXON MOBIL CORPORATION (XOM)                                                                                        StockVal ®
 FYE Dec

                                    2002    % Chg          2001    % Chg      2000    % Chg      1999    % Chg      1998    % Chg

Net Incom e Reported ($ Mil)     11460.0    a   -25     15320.0      -14   17720.0      124    7910.0       -2    8074.0      -31
  Accounting Adjustm ent             41.0       -80       208.0              -994.0             405.0      -49     789.0
Net Incom e Adjusted             11501.0        -26     15528.0       -7   16726.0      101    8315.0       -6    8863.0      -23
  Depreciation & Am ort           8310.0         6       7848.0       -2    8001.0       -4    8304.0       -1    8355.0        2
Cash Flow Adjusted               19811.0        -15     23376.0       -5   24727.0       49   16619.0       -3   17218.0      -13
  Capital Expenditures           11347.0        14       9989.0       18    8446.0      -22   10849.0      -15   12730.0        9
Free Cash Flow Adjusted           8464.0        -37     13387.0      -18   16281.0      182    5770.0       29    4488.0      -45
  Dividends Com m on ($ Mil)      6258.8         -1      6316.3        2    6189.9        4    5945.4        1    5900.1        2
Free Cash Flow After Dividends    2205.2        -69      7070.7      -30   10091.1              -175.4      88    -1412.1


Net Cash From Operations         21268.0    a    -7     22889.0        0   22937.0       53   15013.0       -9   16436.0      -23
Net Cash From Investing           -9758.0   b   -19      -8211.0    -149    -3298.0      70   -10985.0       8   -11982.0     -11
Net Cash From Financing          -11353.0   c   25      -15041.0      -6   -14165.0    -196    -4779.0      33    -7136.0      26
Other Cash Flow s                  525.0                  -170.0    -107      -82.0               53.0     130       23.0
Change In Cash & Equiv             682.0                  -533.0            5392.0              -698.0      74    -2659.0

                                            Summary of 2002
    a. Weak economy, lower natural gas prices, poor downstream margins
    b. CAPEX up (negative factor for valuation)
    c. Negative financing cash flow (positive factor for valuation)
                                              DuPont Analytics
EXXON MOBIL CORPORATION (XOM)                                                               StockVal ®
Price 35.330 08/01/03 FYE Dec
                       INT         TAX           ASSET
        MARGIN%      BURDEN      BURDEN%          TURN      LEVERAGE


           EBIT        EBT              T         Sales       Assets
           -------     -------     1 - ----       -------        -------   ROE     Acct     ROE
          Sales        EBIT           EBT        Assets          Equity    Rpt%    Adj%     Adj%


 2002        8.91        0.98        62.88          1.36           2.00    15.51    0.06    15.57
 2001       11.62        0.99        62.59          1.43           2.03    21.29    0.29    21.58
 2000       12.07        0.98        58.80          1.55           2.19    26.40    -1.48   24.92
 1999        6.52        0.94        70.94          1.28           2.26    12.60    0.64    13.24
 1998        7.67        0.96        67.40          1.16           2.26    12.89    1.26    14.15


 1997       10.22        0.96        60.67          1.36           2.31    18.66    -0.23   18.43
 1996        9.08        0.95        57.73          1.47           2.36    17.31    -0.59   16.72
 1995        8.09        0.94        59.64          1.45           2.38    15.66    0.65    16.31
 1994        7.06        0.91        59.74          1.41           2.38    11.59    1.27    12.86
 1993        7.53        0.92        61.03          1.39           2.45    14.39    -1.53   12.86


 1992        6.42        0.88        60.20          1.41           2.48    10.96    1.22    12.18
 1991        7.89        0.89        59.95          1.38           2.53    14.66    -0.05   14.61
 1990        8.04        0.86        55.47          1.43           2.60    14.36    -0.02   14.34
 1989        7.09        0.81        54.94          1.29           2.51    11.32    2.34    13.66
 1988        9.59        0.86        61.99          1.25           2.37    15.29    -0.19   15.10


 1987        8.84        0.87        58.72          1.21           2.36    13.16    -0.18   12.98
 1986       10.86        0.86        65.93          1.10           2.45    11.30    5.24    16.54
 1985                                               1.37           2.50    13.80    2.90    16.70
 1984                                               1.48           2.35    15.83    0.13    15.96
                                                                                                                   62
     EXXON MOBIL CORPORATION (XOM)
     PRICE 35.3 DATE 08-01-2003                                                                                    54
     StockVal®                                                                                                     48
42                                                                                                                 42
37                                                                                                                 37
32                                                                                                                 32
28                                                                                                                 28
25                                                                                                                 25
22                                                                                                                 22
19                                                                                                                 19
17                                                                                                                 17
15                                                                                                                 15
13                                                                                                                 13

11                                                                                    The Ohio State University    11
10                                                                                    Fisher College of Business   10
  1993   1994    1995    1996     1997      1998   1999      2000      2001    2002     2003    2004    2005
Price Change      %  Diff SP5    First Call Data    2003     2004      2005                Data Page # 1
1-Week        -1.20       0.65   Mean Estimate      2.24     2.00    1.93       Revenues ($Mil)          229,330
4-Weeks       -2.02     -1.46    Change            +33%      -11%       -4%       Market Value ($Mil)      215,054
QTD           -1.62     -2.19    High               2.50      2.35     2.23       Shares Out (Mil)          6,087.0
YTD            1.12   -10.29     Low                1.76      1.50     1.50       Daily Volume (Thou)        11,731
2002         -11.09    12.27     Total               26        24         8       Daily Volume ($Mil)         414.5
2001          -9.59       3.45   # Up                17        10         1       Dividend Estimate            1.00
2000           7.91    18.05     # Down                5         7        1       Payout Ratio                 45%
1999          10.17     -9.36    House Estimate                                   Retention Rate               55%
    FYE Dec 2002 EPS 1.69        PE Ratio           15.8      17.7      18.3      Dividend Yield               2.83%



          • EPS 1.69 in 2002
          • Lower oil prices projected 2004 - 2005                                         Attractive dividend
EXXON MOBIL CORPORATION (XOM) Price 35.3                                                      StockVal®
      1993   1994    1995    1996    1997    1998    1999    2000   2001      2002     2003    2004    2005
1.2

                                                                                                HI    1.04
1.0
                                                                                                LO    0.63
0.9                                                                                             ME    0.88
                                                                                                CU    0.89
0.8
                                                                                Neutral
0.7
                                                                                                 07-30-1993
0.6                                                                                              08-01-2003
                 PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.4
                                                                                     Good
1.3                                                                                             HI    1.31
1.2                                                                                             LO    0.81
                                                                                                ME    1.07
1.1                                                                                             CU    0.99
1.0
0.9                                                                                              07-30-1993
0.8                                                                                              08-01-2003
      PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.4
                                                                                                HI    1.23
1.2
                                                                                                LO    0.58
1.0                                                                                             ME    0.92
                                                                                                CU    1.11
0.8                                                                                             FY1   1.00
0.7                                                                           Good              FY2   0.80
0.6                                                                                              09-30-1993
                                                                                                 06-30-2003
0.5                                                                                  Bad
               EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
EXXON MOBIL CORPORATION (XOM) Price 35.3                                                          StockVal®
       1993      1994    1995    1996    1997    1998    1999    2000    2001    2002      2003    2004    2005
1.0

0.9                                                                                                 HI    0.97
                                                                                                    LO    0.56
0.8                                                                                                 ME    0.65
                                                                                                    CU    0.73
0.7
                                                                                     Bad
0.6
                                                                                                     07-30-1993
0.5                                                                                                  08-01-2003
                 PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.00
0.93                                                                             Neutral            HI    1.00
0.86                                                                                                LO    0.65
                                                                                                    ME    0.78
0.80
                                                                                                    CU    0.78
0.74

0.68                                                                                                 09-30-1993
0.63                                                                                                 06-30-2003
              REVENUE-PER-SHARE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.1
1.0                                                                                                 HI    1.05
0.9                                                                                                 LO    0.56
                                                                                                    ME    0.70
0.8                                                                                                 CU    0.93
0.7                                                                                  Good
0.6                                                                                                  09-30-1993
0.5                                                                                                  06-30-2003
       NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
EXXON MOBIL CORPORATION (XOM) Price 35.3                                                 StockVal®
  1993   1994    1995    1996     1997     1998    1999     2000     2001    2002     2003     2004
1.3

1.2

1.1                                                                                          HI   1.26
                                                                                             LO   0.69
1.0                                                                                          ME   0.85
                                                                                             CU   0.87
0.9

0.8                                                                         Neutral
0.7
                                                                                             07-30-1993
0.6                                                                                          08-01-2003
         PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.68

1.56

1.44

1.32                                                                                         HI   1.57
                                                                                             LO   0.65
1.20                                                                                         ME   0.90
                                                                                             CU   1.27
1.08

0.96

0.84
                                                                             Good

0.72                                                                                         09-30-1993
0.60                                                                                         06-30-2003
          RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
                                                    Quarterly Summary
EXXON MOBIL CORPORATION (XOM)                                                                                             StockVal ®
Price 35.330 08/01/03 FYE Dec                                                                     Expected Report Date: 10/31/03
 Qtr   Data   2004       %chg   2003        %chg   2002        %chg   2001         %chg   2000        %chg    1999           %chg

Mar    Revs                     63,780.0      50    42,592.0    -24     55,878.0      5    53,062.0     40     37,789.0          -10

       Earn                     4,766.94     124    2,125.98    -58     5,032.80     54    3,275.46    103     1,617.36          -38

       EPS       0.54E    -24      0.71      129        0.31    -57        0.72      55        0.47    102        0.23           -37

       Divs                       0.230        0      0.230       5       0.220       0      0.220       7       0.205              0

Jun    Revs                     57,165.0      14    49,972.0     -9     54,931.0      0    54,725.0     29     42,265.0             3

       Earn                     3,773.94      41    2,674.62    -40     4,456.32      3    4,335.14    132     1,866.66          -19

       EPS       0.52E    -16      0.62       59        0.39    -39        0.64       4        0.62    132        0.26           -18

       Divs                       0.250        9      0.230       5       0.220       0      0.220       7       0.205              0

Sep    Revs                     50,000.0E     -6    53,194.0      4     50,947.0    -11    57,286.0     19     48,223.0          21

       Earn                                         3,017.52     -9     3,323.52    -23    4,296.23     97     2,183.02          17

       EPS                         0.50E      14        0.44     -8        0.48     -21        0.61     97        0.31           17

       Divs                                           0.230       0       0.230       5      0.220       7       0.205              0

Dec    Revs                     53,000.0E     -4    55,191.0     18     46,959.0    -25    62,523.0     17     53,482.0          28

       Earn                                         3,771.90     30     2,893.38    -42    4,989.17     84     2,710.40          33

       EPS                         0.50E      -9        0.55     31        0.42     -41        0.71     84        0.38           33

       Divs                                           0.230       0       0.230       5      0.220       0       0.220              7

Year   Revs                     223,945E      11    200,949      -4     208,715      -8    227,596      25     181,759           10

       Earn                                        11,590.02    -26   15,706.02      -7   16,896.00    102     8,377.44           -5

       EPS                         2.33E      38        1.69    -25        2.26      -6        2.40    102        1.19            -4

       Divs                                           0.920       2       0.900       2      0.880       5       0.835              2
                    ExxonMobil (XOM)
                       Conclusions

Recommended action:
• Increase the number of shares in the portfolio by 10%


Positive Factors:
• Economic recovery is driving higher earnings in 2003
• Current valuations seem reasonable
• Current valuations reflect expectations of lower oil prices
    • Risk of lower than expected oil prices seems low
    • Low inventories, low refining capacity, and a strong
    economic recovery bode well for higher prices
               Entergy



Continue to hold weight at 1.09% of SIM
         Entergy - Business Analysis
• ETR is in electric production, retail distribution operations,
  energy marketing and trading and gas transportation.
• Major business segments


Business segment                Sales %                 Profits %

US Utility                       81.5%                   97.4%

Non-Utility Nuclear              14.4%                   32.2%

Energy Commodity                 3.5%                    -23.4%

Other                            0.5%                     -6.2%

Total                            100%                     100%
      Entergy- Business Analysis
    Sources of competitive advantage
• Asset based revenues with generating plants of about
  30000 MW.
• Second largest nuclear power generator in US
• Regulated utility business in mainly Arkansas, Louisiana,
  Mississippi (Retail competition only in Texas)
• Trading contracts of short duration unlike competitors
        Entergy – Business Analysis
        Factors Impacting Valuation

• Positive factors
  Strong credit rating
  Tight capacity in industry
  Leader in nuclear energy (low cost and safe producer)
• Negative factors
  Economic cycles and weather dependency
  Uncertainty in utility regulation
  Likely consolidation in the industry with repeal of PUHCA
         Entergy – Business Analysis
                  Catalysts
• Major shifts in supply and demand (resulting in energy
  price volatility)
• Shifts in utility regulatory policies (retail and wholesale
  markets, FERC and EPA)
• Revolutionary technologies
                                                                                                                      66
     ENTERGY CORPORATION (ETR)
     PRICE 51.8 DATE 08-15-2003                                                                                       60
     StockVal®                                                                                                        54
49                                                                                                                    49
45                                                                                                                    45
41                                                                                                                    41
37                                                                                                                    37
33                                                                                                                    33
30                                                                                                                    30
28                                                                                                                    28
25                                                                                                                    25
23                                                                                                                    23
21                                                                                                                    21
19                                                                                                                    19
                                                                                         The Ohio State University
17                                                                                       Fisher College of Business 17
  1993   1994      1995    1996     1997       1998   1999      2000      2001    2002    2003    2004    2005
Price Change        %   Diff SP5    First Call Data    2003      2004      2005               Data Page # 1
1-Week           0.64      -0.70    Mean Estimate      4.16     4.19     4.51      Revenues ($Mil)              8,739
4-Weeks          4.54        4.81   Change             +9%       +1%       +8%       Market Value ($Mil)         11,996
QTD             -1.86      -3.52    High               4.25      4.22      4.60      Shares Out (Mil)             231.6
YTD             13.62        1.02   Low                4.10      4.15      4.41      Daily Volume (Thou)          1,094
2002            16.57     39.93     Total               14        14          2      Daily Volume ($Mil)           56.7
2001            -7.57        5.48   # Up                14        11          0      Dividend Estimate             1.80
2000            64.32     74.46     # Down                0         0         0      Payout Ratio                  43%
1999           -17.27    -36.80     House Estimate                                   Retention Rate                57%
    FYE Dec    2002 EPS 3.81        PE Ratio            12.5     12.4      11.5      Dividend Yield              3.47%
ENTERGY CORPORATION (ETR) Price 51.8                                                        StockVal®
      1993   1994    1995    1996    1997    1998    1999    2000   2001      2002   2003    2004    2005
1.5
1.0
                                                                                              HI    1.02
0.6                                                                                           LO    0.14
                                                                                              ME    0.39
0.4
                                                                                              CU    0.56

0.2
                                                                                               08-13-1993
0.1                                                                                            08-15-2003
                 PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.0

                                                                                              HI    0.94
0.8
                                                                                              LO    0.31
                                                                                              ME    0.64
0.6                                                                                           CU    0.73

0.4
                                                                                               08-13-1993
0.2                                                                                            08-15-2003
      PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.0
                                                                                              HI    1.00
0.8                                                                                           LO    0.37
                                                                                              ME    0.58
0.6                                                                                           CU    0.67
0.5                                                                                           FY1   0.64
                                                                                              FY2   0.57
0.4
                                                                                               09-30-1993
0.3                                                                                            06-30-2003
               EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
ENTERGY CORPORATION (ETR) Price 51.8                                                           StockVal®
       1993      1994    1995    1996    1997    1998    1999    2000    2001    2002   2003    2004    2005
1.8
1.5                                                                                              HI    1.56
1.2                                                                                              LO    0.21
                                                                                                 ME    0.58
0.9                                                                                              CU    0.96
0.6
0.3                                                                                               08-13-1993
0.0                                                                                               08-15-2003
                 PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.42
1.30                                                                                             HI    1.39
1.19                                                                                             LO    0.84
                                                                                                 ME    1.00
1.09
                                                                                                 CU    0.85
1.00
0.91                                                                                              09-30-1993
0.83                                                                                              06-30-2003
              REVENUE-PER-SHARE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
2.1

1.8                                                                                              HI    1.88
                                                                                                 LO    0.63
1.5                                                                                              ME    1.09
                                                                                                 CU    1.49
1.2

0.9
                                                                                                  09-30-1993
0.6                                                                                               06-30-2003
       NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
ENTERGY CORPORATION (ETR) Price 51.8                                                        StockVal®
  1993   1994    1995     1996     1997    1998     1999     2000    2001     2002   2003       2004
0.55

0.50

0.45

0.40                                                                                          HI    0.52
                                                                                              LO    0.11
0.35                                                                                          ME    0.31
                                                                                              CU    0.48
0.30

0.25

0.20

0.15                                                                                           08-13-1993
0.10                                                                                           08-15-2003
          PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
0.80

0.75

0.70

0.65                                                                                          HI    0.77
                                                                                              LO    0.38
0.60                                                                                          ME    0.48
                                                                                              CU    0.76
0.55

0.50

0.45

0.40                                                                                           09-30-1993
0.35                                                                                           06-30-2003
          RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
                Conclusions
  Though there is higher expected dividend, it is
  recommended to continue to hold at 1.09% of
  portfolio because of the following reasons:
• Already overweight against S&P 500 of 0.13%
• Uncertainty in utility regulation
             Sempra Energy

                 Analysis of:
      Business, Financials and Valuation



Recommended action: Hold weight at 1.08% of SIM
       Sempra Energy (SRE)
         Business Analysis
SRE is a gas and electric utility also engaged
in unregulated power, natural gas, and
international energy products
                      Sempra Energy


Sempra Energy Utilities      Sempra Energy Global Enterprises


  Southern California Gas             Sempra Energy Resources

  San Diego Gas & Electric              Sempra Energy Trading

                                      Sempra Energy International

                                       Sempra Energy Solutions

                                       Sempra Energy Financial
Sempra Energy (SRE)
  Business Analysis
                         Sempra Energy (SRE)
                           Business Analysis
                    Factors Impacting Valuation

     Positive Factors                   Negative Factors



• Strong emphasis on LNG         • Economic cycles and demand volatility
• Strong credit rating           • Heavily regulated
•Tight inventories and           • Geographic concentration (California)
capacity in industry
                         Sempra Energy (SRE)
                           Business Analysis
                               Catalysts




Major shifts in supply        Revolutionary              Revolutionary
and demand                    Technologies               energy sources


Increases energy price      Reduces cost of               Force a major
volatility                  exploration, production,      restructuring of the
                            distribution, etc.            industry

      Forecast:
      • Increased consumption of gas as well as low US reserves
      • Natural Gas importing is becoming increasingly important
   Natural Gas Reserves




•United States 5%
•Middle East 35%
•Former Soviet Union 38%
Natural Gas Consumption




•United States 22.9% of world production
•United States 27.2% of total consumption
           Liquefied Natural Gas

• Sempra Energy has taken an aggressive
     approach towards LNG
  •Regasification facilities
     •Baja, CA will begin operations in 2006
     •Hackberry, LA will begin operations in 2007

       is to position Sempra as the leading
  • Goal
     North American LNG developer
                                                    Cash Flow Analysis
 SEMPRA ENERGY (SRE)                                                                                            StockVal ®
 FYE Dec
                                   2002    % Chg        2001    % Chg     2000    % Chg    1999    % Chg     1998    % Chg

Net Income Reported ($ Mil)       591.0     a 14        518.0      21     429.0       9    394.0      34    294.0      -32
  Accounting Adjustment            -16.0                 20.0     -61      51.2     294     13.0     -84     83.0      538
Net Income Adjusted               575.0        7        538.0      12     480.2      18    407.0       8    377.0      -15
  Depreciation & Amort            596.0        3        579.0       3     563.0     -36    879.0      -5    929.0       54
Cash Flow Adjusted               1171.0        5       1117.0       7    1043.2     -19   1286.0      -2   1306.0       24
  Capital Expenditures           1214.0       14       1068.0      41     759.0      29    589.0      34    438.0       10
Free Cash Flow Adjusted            -43.0                 49.0     -83     284.2     -59    697.0     -20    868.0       33
  Dividends Common ($ Mil)        206.1        0        205.3      -1     208.3     -44    370.6       0    369.9       23
Free Cash Flow After Dividends    -249.1      -59      -156.3              75.9     -77    326.4     -34    498.1       42


Net Cash From Operations         1371.0     a 87        732.0     -17     882.0     -26   1188.0     -10   1323.0       44
Net Cash From Investing          -1659.0
                                            b-60      -1039.0     -12    -924.0     -17   -789.0     -16    -679.0     -13
Net Cash From Financing           138.0
                                            c -50       275.0      43     192.0           -336.0      68   -1034.0
Other Cash Flows                     0.0                  0.0               0.0              0.0               0.0
Change In Cash & Equiv            -150.0     -369       -32.0             150.0     138     63.0            -390.0


                                           Summary of 2002
    a. Weak economy, lower natural gas prices
    b. CAPEX up (negative factor for valuation)
    c. Positive financing cash flow (negative factor for valuation)
• 2002 marked large year for investing activities
• Investing expected to increase while earnings increase
                                                    DuPont Analytics
SEMPRA ENERGY (SRE)                                                                                 StockVal ®
Price 28.560 08/15/03 FYE Dec
                            INT          TAX           ASSET
          MARGIN%        BURDEN       BURDEN%           TURN       LEVERAGE


              EBIT         EBT                T         Sales          Assets
               -------      -------      1 - ----        -------        -------   ROE      Acct     ROE
              Sales        EBIT           EBT           Assets         Equity     Rpt%     Adj%     Adj%


 2002          16.86         0.71         79.75           0.37           5.95      21.42    -0.58   20.84
 2001          13.64         0.69         70.86           0.50           5.90      19.98    0.77    20.75
 2000          14.57         0.71         61.37           0.51           4.87      15.66    1.87    17.53
 1999          14.96         0.71         68.76           0.50           3.66      13.36    0.44    13.80
 1998          12.63         0.69         68.06           0.47           3.61      10.01    2.83    12.84


 1997          18.29         0.79         58.94           0.49           3.48      14.67    0.44    15.11
 1996          20.51         0.78         58.73           0.46           3.41      14.87    0.00    14.87
 1995                                                     0.43           3.59      14.58    0.22    14.80
 1994                                                                                                0.14
       SEMPRA ENERGY (SRE)                                                                                 32.4
       PRICE 28.6 DATE 08-15-2003                                                                          30.8
       StockVal®                                                                                           29.2
27.6                                                                                                       27.6
26.4                                                                                                       26.4

24.8
                                     a                                                                     24.8
23.6                                                                                                       23.6
22.4                                                                                                       22.4
21.2                                                                                                       21.2
20.4                                                                                                       20.4
19.2                                                                                                       19.2
18.4                                                                                                       18.4

17.2                                                                                                       17.2
16.4                                                                           The Ohio State University 16.4
                                                                               Fisher College of Business 15.6
15.6
  1993   1994     1995    1996
                                     a
                                   1997     1998   1999    2000   2001    2002    2003     2004    2005
Price Change     %     Diff SP5      b
                                   First Call Data  2003    2004   2005                Data Page # 1
1-Week         2.29         0.95     c
                                   Mean Estimate     2.66  2.74  3.01      Revenues ($Mil)            6,835
4-Weeks        1.17         1.44   Change            -5%     +3% +10%         Market Value ($Mil)        6,002
QTD            0.11        -1.55   High              2.78    3.02  3.23       Shares Out (Mil)           210.2
YTD           20.76         8.16   Low               2.30    2.30  2.80       Daily Volume (Thou)          799
2002          -3.67       19.70    Total              14      14      3       Daily Volume ($Mil)         22.8
2001           5.59       18.63
                                    Summary of 2002
                                   # Up                 5       3     1       Dividend Estimate           1.00
2000          33.81       43.95    # Down               6       3     0       Payout Ratio                38%
1999         -31.53     -51.05     House Estimate                             Retention Rate              62%
    FYE Dec 2002 EPS 2.79          PE Ratio          10.7    10.4   9.5       Dividend Yield            3.50%



          • Large Dividend Yield
          • Estimate EPS increasing
SEMPRA ENERGY (SRE) Price 28.6                                                               StockVal®
        1993   1994    1995   1996    1997    1998   1999    2000    2001      2002   2003    2004   2005
1.00
0.74                                                                                           HI    1.00
0.55                                                                                           LO    0.17
                                                                                               ME    0.42
0.41
                                                                                               CU    0.44
0.30
0.22                                                                                           08-13-1993
                                                                                                            Neutral
0.16                                                                                           08-15-2003
                  PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.0

                                                                                               HI    0.99
0.8
                                                                                               LO    0.35
                                                                                               ME    0.63
0.6                                                                                            CU    0.62

0.4                                                                                                         Neutral
                                                                                               08-13-1993
0.2                                                                                            08-15-2003
       PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.00
                                                                                               HI    1.00
0.87                                                                                           LO    0.44
0.75                                                                                           ME    0.62
                                                                                               CU    0.60
0.65
                                                                                               FY1   0.60
0.56                                                                                           FY2   0.55   Neutral
0.48                                                                                           09-30-1993
0.41                                                                                           06-30-2003
                EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
SEMPRA ENERGY (SRE) Price 28.6                                                            StockVal®
      1993    1994    1995   1996    1997    1998    1999   2000    2001    2002   2003    2004   2005
1.8
1.5                                                                                         HI    1.61
1.2                                                                                         LO    0.28
                                                                                            ME    0.65
0.9                                                                                         CU    0.62
0.6
0.3                                                                                         08-13-1993   Good
0.0                                                                                         08-15-2003
             PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.8
1.6
                                                                                            HI    1.60
1.4                                                                                         LO    0.90
                                                                                            ME    0.99
1.2                                                                                         CU    1.14

1.0
0.9                                                                                         09-30-1993
0.8                                                                                         06-30-2003   Good
          REVENUE-PER-SHARE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
2.1

1.8                                                                                         HI    1.98
                                                                                            LO    0.74
1.5                                                                                         ME    1.19
                                                                                            CU    1.05
1.2

0.9
                                                                                            09-30-1993   Bad
0.6                                                                                         06-30-2003
      NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
SEMPRA ENERGY (SRE) Price 28.6                                                               StockVal®
      1993      1994    1995    1996    1997   1998    1999    2000    2001   2002    2003    2004   2005
0.8

0.7

                                                                                               HI    0.77   
0.6
                                                                                               LO    0.24
                                                                                               ME    0.53
0.5                                                                                            CU    0.66

0.4
                                                                                                                Bad
0.3
                                                                                               04-01-1994
0.2                                                                                            08-15-2003
             PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.5

1.4

1.3
                                                                                               HI    1.42   
1.2                                                                                            LO    0.71
                                                                                               ME    0.81
1.1                                                                                            CU    1.16
1.0

0.9                                                                                                             Good
0.8
                                                                                               12-31-1994
0.7                                                                                            06-30-2003
             RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
              Ratio Comparison
Valuation Ratios                Sempra    Industry   Sector   S&P 500

P/E Ratio (TTM)                   11.23      14.70   14.38      23.13

P/E High - Last 5 Yrs.            18.31      29.33   29.52      48.38

P/E Low - Last 5 Yrs.              8.18      10.43    9.24      16.10


                                                                        Good


Price to Sales (TTM)               0.85       1.51    1.16       3.10
                                                                        Good
Price to Book (MRQ)                1.92       1.73    1.64       4.34   Bad
Price to Tangible Book (MRQ)       1.92       2.39    2.35       7.53   Good
Price to Cash Flow (TTM)           5.22       9.81    7.83      17.20
                                                                        Good
Price to Free Cash Flow (TTM)
              Sempra Energy (SRE)
                 Conclusions

Recommended action:
• Hold weight at current 1.08% of SIM


Positive Factors:
• Current valuations seem reasonable
• Low inventories high demand of electricity and natural gas
• Future growth into LNP market
FPL Analysis

  Matt Leeth
           FPL Business Analysis
• FPL Group, Inc. is a public utility holding company that, through its
  wholly owned subsidiary, Florida Power & Light Company (FPL) and
  its wholly owned indirect subsidiary FPL Energy, LLC, is engaged in
  the generation, transmission, distribution and sale of electric energy.
  FPL supplies electric service to approximately four million customers
  throughout most of the east and lower west coasts of Florida
• New projects expected to be completed in the year 2003 will
  increase FPL’s total generating capability by 6.2% from its year end
  amount of nearly 21,000 mega-watts
• FPL has made considerable improvements in reliability and
  customer service
    – The average time customers annually go without power has decreased
      from 137 minutes to 69 minutes over the past five years
    – During service interruptions FPL will call its customers to fill them in on
      what is happening and what is being done to solve the problem
                FPL Financial Analysis
• EPS, profit margin, and growth rate are all relatively
  stable                                                                                                              StockVal ®
                                       Prospective Grow th & Margin Check
 FPL GROUP INCORPORATED (FPL)
 Price 62.170 08/15/03
                                    Percent Change                    Actual      Year       Profit                Momentum %
 Quarter     Revenue     REV        RPS        EARN        EPS         EPS        Ago       Margin %      SF       REV       EPS
  Sep 01       2,490.0         20         21          6           8     1.99         1.85        13.5          0    +20       +12
  Dec 01      1,804.0         -3         -3      11             11     0.71         0.64           6.7        0      -2       +6
  Mar 02       1,771.0         -7         -7          4           4     0.80         0.77           7.6        0      -6       +3
   Jun 02      2,128.0          0         -1      13             11     1.46         1.31        11.7      +1         0       +12
  Sep 02       2,353.0         -6         -9          -5         -9     1.81         1.99        13.5          0      -7      -15
  Dec 02      2,059.0         14          9          8           3     0.73         0.71           6.3        0    +13        +2
  Mar 03       2,173.0         23         17      27             21     0.97         0.80           7.9    +1       +19       +14
   Jun 03      2,459.0         16         11          -4         -8     1.35         1.46           9.8        0    +15        -9
     T4Q       9,044.0         10          6          2          -2     4.86                        9.5
Sep 03 E       2,569.3          9          8          4           3     1.86         1.81        12.9               +10        +4
Dec 03 E      2,119.3          3          2          -1         -1     0.72         0.73           6.0              +3        -1
 Mar 04 E      2,206.0          2          1          -3         -3     0.94         0.97           7.6              +1        -2
 Jun 04 E      2,607.0          6          6          9           9     1.47         1.35        10.0                +6       +10
   F4Q E       9,501.6          5          4          3           3     4.99                        9.3
                           Point-to-Point Growth Rates (%)                   Long-T erm Growth Rate Estimates (%)
              Years      REV        RPS        EARN        EPS                 Median Estimate                      6.0%
                1              10          6          2          -2            Number of Estimates                    16
                3              11         10          6           5            Standard Deviation                        2
                5               7          7          6           6            Default GRE Estimate                 4.0%
               10               5          6          6           6            Analyst GRE Estimate                 4.0%
               15               4          2          6           3
               20               5          2          6           3            Expected Report Date            10/23/03
                             FPL Financial Analysis
    • Operating Profit Margin has fallen the past couple years
      but has otherwise been relatively stable and ROE has
      been consistent
                                              Income Statement Ratios
 FPL GROUP INCORPORATED (FPL)                                                                      StockVal ®
 FYE Dec
                                      2002    2001     2000     1999    1998    1997    1996    1995

Gross Profit Margin (% )
Operating Profit Margin EBITDA (% )   25.97   29.63   33.28     35.45   38.27   35.70   34.79   37.38
Operating Profit Margin EBIT (% )     15.04   17.82   18.66     19.29   18.99   19.05   18.88   20.97
Pre-Tax Profit Margin (% )            11.30   13.93   14.73     15.84   14.16   14.48   14.47   15.77
Tax Rate (% )                         25.99   32.67   32.31     31.67   29.59   32.97   33.65   37.26
Net Profit Margin Adjusted (% )       10.01    9.68   10.63     10.58    9.97    9.70    9.60    9.89


Return on Avg Common Equity (% )      13.41   13.89   13.70     12.98   13.32   13.10   12.90   12.88
Return on Average Total Equity (% )   12.94   13.37   13.16     12.44   12.74   12.42   12.12   11.86
Return on Average Capital (% )         7.08    7.72    7.96      8.12    8.45    7.60    7.01    6.48
Return on Average Assets (% )          4.47    4.92    5.23      5.35    5.43    5.01    4.70    4.41


Times Interest Earned                  4.02    4.58    4.74      5.59    3.93    4.17    4.28    4.03
                               FPL Financial Analysis
      • Asset Turnover has been extremely consistent and D/E
        has been relatively stable
                                                Balance Sheet Ratios
 FPL GROUP INCORPORATED (FPL)                                                                      StockVal ®
 FYE Dec
                                    2002     2001      2000      1999   1998    1997    1996    1995

Cash Items/Total Capital (% )        2.14     0.74      1.32     3.98    2.43    0.67    2.37    0.56
Quick Ratio                          0.23     0.20      0.28     0.45    0.45    0.37    0.52    0.35
Current Ratio                        0.49     0.44      0.64     0.73    0.77    0.73    0.92    0.66
Net Working Capital ($000)         -2003    -2037       -982     -497    -375    -398    -101    -519
Long-Term Debt/Equity (% )          87.52    77.84     68.33    62.15   43.85   58.15   69.00   77.01
Long-Term Debt / Capital (% )       46.67    43.77     40.59    38.33   30.48   36.77   40.83   43.51
Total Debt/Common Equity (% )      126.64   114.25     92.96    73.41   54.94   67.72   76.72   90.98
Total Debt/Capital (% )             65.23    61.92     53.08    43.44   36.58   40.91   42.70   48.22
Total Debt/Total Assets (% )        40.89    39.35     33.98    29.33   23.41   26.36   28.83   32.07


Days Inventory
Days Receivable                     28.20    27.88     32.92    27.33   30.63   28.71   27.90   31.48
Days Payable


Asset Turnover                       0.45     0.51      0.49     0.51    0.54    0.52    0.49    0.45
Plant & Equipment Turnover           0.64     0.77      0.74     0.72    0.74    0.68    0.63    0.56
                 FPL Financial Analysis
                                                  DuPont Analytics
FPL GROUP INCORPORATED (FPL)                                                                      StockVal ®
Price 62.170 08/15/03 FYE Dec
                          INT          TAX           ASSET
         MARGIN%       BURDEN       BURDEN%           TURN       LEVERAGE


            EBIT         EBT                T         Sales          Assets
             -------      -------      1 - ----        -------        -------   ROE      Acct     ROE
            Sales        EBIT           EBT           Assets         Equity     Rpt%     Adj%     Adj%


 2002        15.04         0.75         74.01           0.45           3.00       7.63    5.78    13.41
 2001        17.82         0.78         67.33           0.51           2.82      13.46    0.43    13.89
 2000        18.66         0.79         67.69           0.49           2.62      12.84    0.86    13.70
 1999        19.29         0.82         68.33           0.51           2.43      13.28    -0.30   12.98
 1998        18.99         0.75         70.41           0.54           2.45      13.32    0.00    13.32


 1997        19.05         0.76         67.03           0.52           2.61      13.10    0.00    13.10
 1996        18.88         0.77         66.35           0.49           2.75      12.90    0.00    12.90
 1995        20.97         0.75         62.74           0.45           2.92      12.88    0.00    12.88
 1994        21.11         0.72         62.80           0.42           3.10      12.50    0.00    12.50
 1993        19.70         0.65         63.12           0.42           3.20      10.80    2.15    12.95


 1992        21.08         0.67         64.11           0.44           3.28      12.99    0.00    12.99
 1991        17.47         0.60         68.71           0.48           3.39       7.39    5.88    13.27
 1990        15.13         0.55         70.98           0.48           3.23     -11.82   22.74    10.92
 1989        18.27         0.63         67.95           0.49           3.08      12.22    -0.49   11.73
 1988                                                   0.47           3.15      14.07    -1.22   12.85


 1987                                                   0.46           3.18      13.24    -1.75   11.49
 1986                                                                            13.10    0.27    13.37
                           FPL Valuation
• EPS and Price have steadily increased while P/B and
  P/S have been stable
FPL GROUP INCORPORATED (FPL) Price 62.2                                                 StockVal ®
      1993   1994   1995   1996    1997     1998     1999   2000   2001   2002   2003    2004    2005
80
                                                                                           HI      72
60                                                                                         LO      29
                                                                                           ME      51
40                                                                                         CU      62
                                                                                           GR   4.6%
30
                                                                                           08-13-1993
20                                                                                         08-15-2003
                                          PRICE
2.1
                                                                                           HI   1.89
1.8                                                                                        LO   0.98
                                                                                           ME   1.30
1.5                                                                                        CU   1.22
1.2
                                                                                           08-13-1993
0.9                                                                                        08-15-2003
                                     PRICE / SALES
3.0
                                                                                           HI    2.4
2.4                                                                                        LO    1.2
                                                                                           ME    1.7
1.8                                                                                        CU    1.7
1.2
                                                                                           08-13-1993
0.6                                                                                        08-15-2003
                                  PRICE / BOOK VALUE
5
                                                                                           HI    4.97
4                                                                                          LO    2.75
                                                                                           ME    3.76
                                                                                           CU    4.86
3                                                                                          GR   5.6%
                                                                                           09-30-1993
2                                                                                          06-30-2003
                                  EARNINGS-PER-SHARE
                                       Valuation
• Relative to the S&P 500, FPL is undervalued. Price and
  P/E are below 1. EPS is also below 1 but has been
  rising.
   FPL GROUP INCORPORATED (FPL) Price 62.2                                                    StockVal ®
         1993    1994    1995   1996    1997    1998   1999    2000    2001     2002   2003    2004    2005
  1.60
                                                                                                 HI   1.01
  1.00                                                                                           LO   0.29
                                                                                                 ME   0.64
  0.65                                                                                           CU   0.65
  0.42
                                                                                                 08-13-1993
  0.27                                                                                           08-15-2003
                    PRICE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
  1.0
                                                                                                 HI   1.00
  0.8                                                                                            LO   0.38
                                                                                                 ME   0.74
  0.6                                                                                            CU   0.73
  0.4
                                                                                                 08-13-1993
  0.2                                                                                            08-15-2003
         PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
  8
                                                                                                 HI   7.37
  6                                                                                              LO   1.07
                                                                                                 ME   2.21
  4                                                                                              CU   1.45
  2
                                                                                                 08-13-1993
  0                                                                                              08-15-2003
     PRICE / YR-FORWARD EPS ESTS / GRE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
  1.00                                                                                           HI    1.00
                                                                                                 LO    0.62
  0.88                                                                                           ME    0.75
                                                                                                 CU    0.76
  0.78                                                                                           FY1   0.72
                                                                                                 FY2   0.66
  0.69
                                                                                                 09-30-1993
  0.61                                                                                           06-30-2003
                  EARNINGS RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
                                       Valuation
• P/B and P/S are undervalued relative to the S&P 500.
  ROE and Net Profit Margin are valued closer to the S&P.
 FPL GROUP INCORPORATED (FPL) Price 62.2                                                     StockVal ®
      1993      1994    1995    1996   1997    1998    1999    2000   2001    2002    2003    2004    2005
1.5
                                                                                                HI   1.32
1.2                                                                                             LO   0.44
                                                                                                ME   0.89
0.9                                                                                             CU   0.87
0.6
                                                                                                08-13-1993
0.3                                                                                             08-15-2003
               PRICE / SALES RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
0.8
                                                                                                HI   0.68
                                                                                                LO   0.23
0.6
                                                                                                ME   0.50
                                                                                                CU   0.56
0.4
                                                                                                08-13-1993
0.2                                                                                             08-15-2003
             PRICE / BOOK VALUE RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.0
                                                                                                HI   0.98
0.9                                                                                             LO   0.66
                                                                                                ME   0.72
0.8                                                                                             CU   0.86
0.7
                                                                                                09-30-1993
0.6                                                                                             06-30-2003
             RETURN ON EQUITY RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
1.8
                                                                                                HI   1.71
                                                                                                LO   1.22
1.6
                                                                                                ME   1.35
                                                                                                CU   1.33
1.4
                                                                                                09-30-1993
1.2                                                                                             06-30-2003
      NET PROFIT MARGIN ADJUSTED RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
                                     Valuation
• Dividend Yield is currently more than twice the S&P and
  Dividends have grown steadily since 1995.
 FPL GROUP INCORPORATED (FPL) Price 62.2                                                  StockVal ®
      1993    1994    1995    1996     1997   1998   1999    2000    2001   2002   2003    2004     2005
5.2
4.8
4.4
                                                                                             HI    4.90
4.0
                                                                                             LO    1.67
3.6                                                                                          ME    2.26
                                                                                             CU    2.19
3.2
2.8
2.4
2.0                                                                                          08-13-1993
1.6                                                                                          08-15-2003
             DIVIDEND YIELD RELATIVE TO S&P 500 COMPOSITE ADJUSTED (SP5A) M-Wtd
2.5
2.4
2.3
2.2                                                                                          HI     2.48
                                                                                             LO     1.70
2.1                                                                                          ME     2.07
2.0                                                                                          CU     2.36
                                                                                             GR   -0.4%
1.9

1.8

1.7
                                                                                             09-30-1993
1.6                                                                                          06-30-2003
                                     DIVIDENDS-PER-SHARE
                                      Valuation
• Higher P/S, P/B, and EPS than the industry
FPL GROUP INCORPORATED (FPL) Price 62.2                                                       StockVal ®
      1993    1994     1995    1996    1997    1998    1999    2000    2001     2002   2003    2004    2005
2.1
                                                                                                 HI   1.87
1.7                                                                                              LO   0.95
                                                                                                 ME   1.28
1.3                                                                                              CU   1.72
1.0
                                                                                                 08-13-1993
0.8                                                                                              08-15-2003
                     PRICE RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
1.8
                                                                                                 HI   1.79
1.5                                                                                              LO   0.90
                                                                                                 ME   1.19
1.2                                                                                              CU   1.57
0.9
                                                                                                 08-13-1993
0.6                                                                                              08-15-2003
               PRICE / SALES RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
1.6
                                                                                                 HI   1.43
1.4                                                                                              LO   0.89
                                                                                                 ME   1.09
1.2                                                                                              CU   1.19
1.0
                                                                                                 08-13-1993
0.8                                                                                              08-15-2003
             PRICE / BOOK VALUE RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
1.7                                                                                              HI    1.53
                                                                                                 LO    0.94
1.4                                                                                              ME    1.18
1.2                                                                                              CU    1.53
                                                                                                 FY1 1.57
1.0                                                                                              FY2 1.55
                                                                                                 09-30-1993
0.8                                                                                              06-30-2003
                 EARNINGS RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
                                      Valuation
• ROE and Net Profit Margin are higher relative to the
  industry. P/C is currently above the industry average but
  in the long run P/C has been below the industry.
FPL GROUP INCORPORATED (FPL) Price 62.2                                                       StockVal ®
       1993    1994   1995    1996    1997    1998    1999    2000    2001    2002     2003    2004    2005
1.3
                                                                                                 HI   1.26
1.2                                                                                              LO   0.99
                                                                                                 ME   1.12
1.1                                                                                              CU   1.26
1.0
                                                                                                 09-30-1993
0.9                                                                                              06-30-2003
              RETURN ON EQUITY RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
1.8
                                                                                                 HI   1.77
                                                                                                 LO   0.96
1.5
                                                                                                 ME   1.21
                                                                                                 CU   1.58
1.2
                                                                                                 09-30-1993
0.9                                                                                              06-30-2003
        NET PROFIT MARGIN ADJUSTED RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
1.4
                                                                                                 HI   1.36
1.2                                                                                              LO   0.69
                                                                                                 ME   0.92
1.0                                                                                              CU   1.22
0.8
                                                                                                 08-13-1993
0.6                                                                                              08-15-2003
         PRICE / CASH FLOW ADJUSTED RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
3
                                                                                                 HI   2.59
                                                                                                 LO   0.87
2
                                                                                                 ME   1.14
                                                                                                 CU   0.92
1
                                                                                                 08-13-1993
0                                                                                                08-15-2003
      PRICE / YR-FORWARD EPS ESTS / GRE RELATIVE TO UTILITY: ELECTRIC POWER (153A) E-Wtd
            Recommendation
• Relative to the S&P 500, FPL is undervalued
  and could be a good buy
  – FPL has strong financial statements relative to its
    industry and sector which makes it positioned well
    given it is a top-tier utility business
  – Growing dividend yield plus the tax reform are
    positives
  – New projects which will increase the company’s total
    generating capacity should help insure future revenue
    and earnings growth

				
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