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									                                          Americas Morning Summary
                                          August 22, 2011



The Goldman Sachs Group, Inc.
                                           Focus Items
This document contains comments
related to the following stocks:           Embraer (ERJ): Takeaways from meeting with the segment that can triple in 5
                                                                                                                                                                                  1
                                           years
Acme Packet, Inc. (APKT)                   Toll Brothers, Inc. (TOL): Highlighting Toll's strengths ahead of 3Q11 earnings                                                        2
ADTRAN, Inc. (ADTN)
Amylin Pharmaceuticals, Inc.
(AMLN)
                                           Key Data Changes
ANN Inc. (ANN)                             Rating and price target changes
Applied Materials, Inc. (AMAT)                                               Rating/
Aruba Networks, Inc. (ARUN)                                                                             Price Target                                 Estimates
                                                                          Coverage view
Blue Nile, Inc. (NILE)                     Company          Ticker        New      Old         New            Old       % chg      Current Year        Next Year        Fiscal y/e
Broadsoft, Inc. (BSFT)                     ANN Inc.          ANN          N/N      unch      ↓ $25.00       $27.00      (7.4%)           $1.87           $2.02            Jan
Brocade Communications Systems
(BRCD)                                     Cielo          CIEL3.SA        N/A      unch      ↑ R$46.80     R$46.60       0.4%            R$3.19         R$3.09            Dec
Calix, Inc. (CALX)                         Redecard      RDCD3.SA         N/A      unch      ↑ R$29.40     R$28.80       2.1%            R$1.95         R$1.90            Dec
Cielo (CIEL3.SA)
Cisco Systems, Inc. (CSCO)                 Estimate changes
Corning Inc. (GLW)                                                                                                Current Year                      Next Year
                                                                                             Rating/                                                                     Fiscal y/e
Embraer (ERJ)                              Company                              Ticker    Coverage view     New         Old      % chg      New         Old     % chg
ExamWorks Group, Inc. (EXAM)
Exelixis, Inc. (EXEL)                      ANN Inc.                             ANN           N/N          ↑ $1.87     $1.68     11.2%     ↑ $2.02     $1.93     4.7%       Jan
F5 Networks, Inc. (FFIV)                   Cielo                             CIEL3.SA         N/A         ↑ R$3.19 R$3.03        5.6%     ↑ R$3.09 R$2.95 4.8%             Dec
Garmin Ltd. (GRMN)
                                           Group 1 Automotive, Inc.             GPI           B/A          ↑ $3.74     $3.71     1.0%      ↑ $4.58     $4.49     2.1%      Dec
Great Plains Energy Inc. (GXP)
Group 1 Automotive, Inc. (GPI)             Redecard                          RDCD3.SA         N/A         ↑ R$1.95 R$1.76        11.1%    ↑ R$1.90 R$1.74 8.8%             Dec
Hewlett-Packard Co. (HPQ)                  United Therapeutics Corporation      UTHR          B/N          ↑ $3.10     $3.05     1.8%       $3.74      unch       --       Dec
Infinera Corp. (INFN)
InterMune, Inc. (ITMN)                     Vertex Pharmaceuticals, Inc.         VRTX          B/N         ↓ ($1.19) ($1.07) (11.5%)        ↑ $5.31     $5.22     1.7%      Dec
Juniper Networks, Inc. (JNPR)
Lexmark International Group (LXK)
Micron Technology Inc. (MU)                Other Headlines
Motorola Mobility Holdings Inc.
(MMI)                                      Portfolio Strategy Research
Netgear, Inc. (NTGR)                       Hedge Fund Trend Monitor: Hedge funds outperform during correction after lagging in 1H 2011                                            3
QUALCOMM, Inc. (QCOM)
Redecard (RDCD3.SA)                        US Weekly Kickstart: Strategies for an uncertainty-based downturn                                                                      4
Research In Motion Ltd. (RIMM)             S&P 500 Beige Book: Three key themes from 2Q 2011 earnings conference calls                                                            5
Riverbed Technology, Inc. (RVBD)
salesforce.com, Inc. (CRM)                 Credit Strategy Research
Semtech Corporation (SMTC)
Tellabs, Inc. (TLAB)                       The Credit Line: Growth down, risk off [corrected]                                                                                     6
The TJX Companies, Inc. (TJX)
Toll Brothers, Inc. (TOL)                  Consumer Cyclicals
United Therapeutics Corporation
                                           Americas: Retail: Broadlines: 2Q QIP takeaways: Strong 2Q but 2H likely to weaken                                                      7
(UTHR)
Vertex Pharmaceuticals, Inc.               Group 1 Automotive, Inc. (GPI): Adjusting estimates on the back of higher buyback and dividends                                        8
For further product information,
contact:

New York Investment Research
(212) 902-1000

Analysts employed by non-US                Goldman Sachs does and seeks to do business with companies covered in its research reports. As a
affiliates are not registered/qualified    result, investors should be aware that the firm may have a conflict of interest that could affect the
as research analysts with FINRA in         objectivity of this report. Investors should consider this report as only a single factor in making their
the U.S.                                   investment decision. For Reg AC see the end of the text. For other important disclosures, see the
                                           Disclosure Appendix, or go to www.gs.com/research/hedge.html.
Global Investment Research
(VRTX)
                          ANN Inc. (ANN): LOFT turns the corner, more than offsetting tougher 2Q for Ann                   9
Westar Energy Inc. (WR)
                          Americas: Retail: dotCommerce: Strong growth continues into 2Q; 1H11 outpaces 2010              10

                          Financial Services
                          Brazil: Specialty Finance: Diversified: Solid results encouraging for Redecard and Cielo, but
                                                                                                                          11
                          valuation not compelling

                          Healthcare
                          Amylin Pharmaceuticals, Inc. (AMLN): Adjusting AMLN model                                       12
                          Exelixis, Inc. (EXEL): Adjusting EXEL model                                                     13
                          InterMune, Inc. (ITMN): Adjusting ITMN model                                                    14
                          United Therapeutics Corporation (UTHR): Adjusting UTHR model                                    15
                          Vertex Pharmaceuticals, Inc. (VRTX): Adjusting VRTX model                                       16
                          ExamWorks Group, Inc. (EXAM): Reviewing post-2Q issues: a conference call with management       17

                          Technology
                          GS US Semi & SPE Weekly: AMAT, SMTC earnings previews; MU analyst day preview                   18
                          GS CommTech Weekly: GS CommTech Weekly: ARUN preview; 2Q market update for Routing
                                                                                                                          19
                          and SBC segments
                          The hardware download: HP's IPG performance highlights risks to Sell-rated Lexmark              20
                          salesforce.com, Inc. (CRM): Server transactions update                                          21

                          Utilities
                          Americas: Utilities: Cost recovery rider denied for La Cygne plant; Sell WR, Buy GXP            22

                          Reports Published
Americas Morning Summary                                                                                                                          August 22, 2011




Focus Items

Embraer (ERJ): Takeaways from meeting with the segment that can triple in 5 years                                                                              1

ERJ, $22.46                                 Noah Poponak, CFA (New York): noah.poponak@gs.com, (212) 357-0954
Market cap                   $4,068 mn
                                            Goldman Sachs & Co.
Target price                      $42.00
                                            What's changed
Fiscal y/e Dec            2011E   2012E
                                            We recently met with Ernest Edwards, President of Executive Jets, who was an impressive manager in our
EPS ($)                    2.40     2.95    view. We highlight key takeaways from the meeting in this report.
P/E                        9.3X     7.6X    Implications
EPS Quarter/Interim
                      *
                           0.56     0.70    We believe Embraer’s Executive Aviation segment will see significant growth in coming years that is very
                                            much underappreciated by the market. We expect the segment will benefit from a combination of (1) recovery
Investment Lists
                                            in the broad bizjet market following a deep downturn, (2) new product cycles that alone could double current
                      Americas Buy List     Executive Aviation operating income, and (3) share gain from weakened competitors via superior product.
Coverage view                 Attractive    We highlight the following key takeaways from the meeting.
                                            (1) Comments on the current business jet order environment were more positive than we were expecting.
*Current and a year ago
                                            (2) ERJ says it is very confident in 2011 business jet unit guidance (we think the market doubts it) and it is
                                            very likely 2012 is higher than 2011. (3) We think ERJ’s business jet segment can double in three years and
                                            triple in five given the combination of a market recovery, new product introductions, and share gain. (4) ERJ
                                            is offering significantly superior product than the competition in its key market segments, at a lower price.
                                            (5) ERJ is very focused on tackling the service offering challenge.
                                            Valuation
                                            ERJ trades at 7.5X CY12E P/E and 3.5X CY12E EV/EBITDA, 25% and 35% discounts to the Aerospace
                                            group average, and despite our expectation for 30% average EPS growth over the next three years, net-cash
                                            on the balance sheet and a 5% dividend yield.
                                            Key risks
                                            (1) RJ/bizjet demand, (2) Brazil macro drivers and cost inflation, (3) FX.



Toll Brothers, Inc. (TOL): Highlighting Toll's strengths ahead of 3Q11 earnings                                                                                2

TOL, $14.98                                 Joshua Pollard (New York): joshua.pollard@gs.com, (212) 902-6716
Market cap                   $2,500 mn
                                            Goldman Sachs & Co.
                                            Anto Savarirajan (New York): anto.savarirajan@gs.com, (646) 446-1758
Target price                      $25.00
                                            Goldman Sachs & Co.
Fiscal y/e Oct            2011E   2012E

EPS ($)                    0.05     0.74    What's changed
P/E                          --    20.3X    Toll reports 3Q11 earning on August 24, 2011 and we believe the risk/reward of owning shares is favorable
                      *                     ahead of results.
EPS Quarter/Interim        0.09     0.16
                                            Implications
Investment Lists
                                            We upgraded Toll to Buy on July 14 following our June field visit and our recent consumer survey, which
                      Americas Buy List     highlighted the relative strength of the high end consumer. We believe recent weakness reflects rising global
Coverage view                     Neutral   growth, but we expect positive results based on a number of key differences for Toll versus our other
                                            builders:
*Current and a year ago
                                            (1) High-end outperformance should be evident. In our 2Q11 housing survey we found that consumers in
                                            higher income brackets are more constructive on home prices (33% in the $120K or above income category
                                            expect home price appreciation vs. 21% for the broad survey) and have a higher desire to purchase a new
                                            home (38% vs. 20% for the broad survey).
                                            (2) Toll is the first builder to report orders that are not hurt by the tough comparisons of last year’s tax credit.
                                            Our expectation for 16% order growth for the May-July quarter is above consensus of 11%
                                            (3) “Other issues” should highlight Toll’s strong management. Mortgage putbacks are a de-minimis issue for
                                            Toll as they have only had 2-3 dozen loans putback to them since 2006. Mortgage availability is strong for
                                            Toll’s customers. Risk of increased inventory writedowns is low.
                                            Valuation
                                            Our 3Q11 EPS estimate of $0.09 is unchanged. We maintain our six-month $25 target (based on normalized
                                            P/E and distressed book value).




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                        August 22, 2011



                                 Key risks
                                 Investors will be searching for evidence of a new slowdown in home sales on the company’s conference call,
                                 which we are not expecting. Our recent channel checks suggest that demand remains sticky/ frictional.


Other Headlines
Portfolio Strategy Research

Hedge Fund Trend Monitor: Hedge funds outperform during correction after lagging in 1H 2011                                                  3

                                 David J. Kostin (New York): david.kostin@gs.com, (212) 902-6781
                                 Goldman Sachs & Co.
                                 Stuart Kaiser, CFA (New York): stuart.kaiser@gs.com, (212) 357-6308
                                 Goldman Sachs & Co.
                                 Amanda Sneider, CFA (New York): amanda.sneider@gs.com, (212) 357-9860
                                 Goldman Sachs & Co.
                                 Ben Snider (New York): ben.snider@gs.com, (212) 357-1744
                                 Goldman Sachs & Co.

                                 Hedge Fund VIP List sector tilt favors Consumer Discretionary
                                 Our Hedge Fund Very Important Position (VIP) List (Bloomberg ticker: <GSTHHVIP>) consists of the 50
                                 stocks appearing most frequently among the top ten holdings of long/short hedge funds. Consumer
                                 Discretionary, Information Technology, and Energy stocks account for 68% of the basket. Our VIP list reflects
                                 long holdings only and has outpaced the S&P 500 during 66% of the quarters over the past ten years.
                                 However, it fell 4.6% YTD through August 16th compared with a 4.0% drop for the S&P 500.
                                 Hedge funds use ETFs more for hedging than as directional vehicle
                                 We estimate hedge funds hold $132 billion in gross exposure to ETFs compared with $1.2 trillion of gross
                                 exposure to single-stocks. We estimate 19% of aggregate short positions are via ETFs with 14% at the index
                                 level.



US Weekly Kickstart: Strategies for an uncertainty-based downturn                                                                            4

                                 David J. Kostin (New York): david.kostin@gs.com, (212) 902-6781
                                 Goldman Sachs & Co.
                                 Stuart Kaiser, CFA (New York): stuart.kaiser@gs.com, (212) 357-6308
                                 Goldman Sachs & Co.
                                 Amanda Sneider, CFA (New York): amanda.sneider@gs.com, (212) 357-9860
                                 Goldman Sachs & Co.
                                 Ben Snider (New York): ben.snider@gs.com, (212) 357-1744
                                 Goldman Sachs & Co.

                                 Performance
                                 The S&P 500 fell 2.7% this week. Utilities was the best-performing sector (2.1%) while Materials was the
                                 worst-performing sector (-4.9%). We expect the S&P 500 to rise to 1400 by year-end (+23%) and 1450 in 12
                                 months (+27%).
                                 S&P 500 Earnings
                                 Our top-down EPS forecasts of $96 and $102 for 2011 and 2012 reflect +15% and +6% growth, respectively.
                                 Bottom-up consensus forecasts an 18% increase in 2011 to $99, and a 14% increase in 2012 to $113.
                                 Valuation
                                 Top-down, S&P 500 trades at an NTM P/E of 11.4. Bottom-up, it trades at an NTM P/E of 10.7 and an LTM
                                 P/B of 1.9X.
                                 Sector views and performance
                                 Our recommended sector weightings were flat this week, and have generated -28 bp of alpha YTD.
                                 US Portfolio Strategy Baskets




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                             August 22, 2011



                                 Our recommended trades vs. the SPX: Dividend Growth <GSTHDIVG> was up 0.1%, BRICs Sales
                                 <GSTHBRIC> was down 1.0%, ROE Growth <GSTHGROE> was down 1.6%, High Sharpe Ratio
                                 <GSTHSHRP> was down 1.0%.
                                 S&P 500 stock performance this week
                                 Leaders: MMI, S, TGT, HD, and LO
                                 Laggards: DV, NTAP, CTXS, CRM, and TDC
                                 GIR iPad App for Research reports
                                 GIR provides clients access to research through GIR iPad app. The app is available in the iTunes store by
                                 searching “Goldman Sachs Research.”



S&P 500 Beige Book: Three key themes from 2Q 2011 earnings conference calls                                                                       5

                                 David J. Kostin (New York): david.kostin@gs.com, (212) 902-6781
                                 Goldman Sachs & Co.
                                 Stuart Kaiser, CFA (New York): stuart.kaiser@gs.com, (212) 357-6308
                                 Goldman Sachs & Co.
                                 Amanda Sneider, CFA (New York): amanda.sneider@gs.com, (212) 357-9860
                                 Goldman Sachs & Co.
                                 Ben Snider (New York): ben.snider@gs.com, (212) 357-1744
                                 Goldman Sachs & Co.

                                 Uncertain economic outlook
                                 Uncertainty surrounding politics in DC, sovereign debt in Europe, and the possibility of a recession led to
                                 hesitant consumers and unsure guidance.
                                 Deceleration in China, but emerging markets still drive growth
                                 Growth markets continue to drive expectations for future sales and earnings, but managements noted a
                                 slowdown relative to past quarters.
                                 Pricing to protect margins
                                 Companies raised prices in an attempt to offset pressure from input cost inflation and protect margins, with
                                 differing results.



Credit Strategy Research

The Credit Line: Growth down, risk off [corrected]                                                                                                6

                                 Charles P. Himmelberg (New York): charles.himmelberg@gs.com, (917) 343-3218
                                 Goldman Sachs & Co.
                                 Lotfi Karoui (New York): lotfi.karoui@gs.com, (917) 343-1548
                                 Goldman Sachs & Co.
                                 Annie Chu (New York): annie.chu@gs.com, (212) 357-5522
                                 Goldman Sachs & Co.

                                 Risks continue rising
                                 The recent widening in credit spreads makes the current premium enough to compensate the risks from a
                                 mild recession scenario. But the negative interaction between slower growth and rising European sovereign
                                 and financial sector risks continues to increase, and this greatly limits the potential for near-term upside in our
                                 view. We are therefore turning from “borderline” to outright bearish on credit. As we weigh the risk of negative
                                 interaction between slowing growth and rising sovereign risk against the scope for policy response from the
                                 monetary and fiscal authorities in the US and Europe, we continue to see credit risk and spread risk skewed
                                 to the downside. Solid credit quality and "search for yield" motives will likely remain overwhelmed by rising
                                 recession risk and risk aversion. A meaningful near-term reversal of these risks seems unlikely.
                                 Funding stress is elevated, but less visible in prices than in 2008
                                 Virtually all of the funding stress indicators that spiked in the fourth quarter of 2008 have moved only
                                 modestly during the escalation of the sovereign crisis in Europe. This reflects at least two differences with the




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                         August 22, 2011



                                 post-Lehman episode. First, banks rely much less on short-term funding and hold significantly more cash.
                                 Second, the various facilities that were put in place by global central banks have effectively dampened price
                                 signals in short-term money markets. This does not imply that balance sheet pressures have been
                                 eliminated. Rather, it means the fuse is longer. It also suggests the value of putting more focus on longer-
                                 term funding spreads and quantity measures of credit to monitor bank funding strains.
                                 Two trade ideas to position for rising downside risks
                                 To position for the rising risk of recession and sovereign pressures, we recommend the following trade ideas:
                                 1) A decompression trade: long CDX IG/short CDX HY at a 3 to 1 notional ratio; 2) A short basket of CCC
                                 names vs. CDX HY at a 1 to 1 notional ratio.



Consumer Cyclicals

Americas: Retail: Broadlines: 2Q QIP takeaways: Strong 2Q but 2H likely to weaken                                                             7

                                 Adrianne Shapira (New York): adrianne.shapira@gs.com, (212) 357-4174
                                 Goldman Sachs & Co.
                                 Stephen Grambling, CFA (New York): stephen.grambling@gs.com, (212) 902-7832
                                 Goldman Sachs & Co.
                                 Scott Kaufman-Ross (New York): scott.kaufman-ross@gs.com, (212) 934-4206
                                 Goldman Sachs & Co.

                                 Broadlines 2Q11 Quarter in Pictures: Uncertainty aplenty
                                 2Q earnings delivered: (1) stronger than expected sales - on average, our companies under coverage posted
                                 SSS 2% ahead of initial 1Q guidance, (2) EBIT margin expansion - gross margins rose 50 bp on average,
                                 helped by stronger full-price selling and (3) accelerated share repurchases – rising 34% yoy – significantly
                                 contributing to beats from KSS & TGT.
                                 Given recent market volatility, managements espoused a more guarded 2H outlook despite strong 1H
                                 performance. Importantly, no one sounded alarm bells that recent market gyrations were significantly
                                 impacting current trends. However, we believe this year is likely to be a tale of two halves with potential
                                 deceleration on the horizon. As a result, despite average 2Q beats of nearly 9% versus consensus, the
                                 midpoint of company guidance for FY11 increased a mere 0.9%.
                                 Key takeaways
                                 EPS beats: After four consecutive quarters of expense leverage driving beats, 2Q beats were attributed
                                 evenly to both gross margins and expenses.
                                 Comps: Moderate and high-end retailers exhibited continued acceleration while WMT lagged. Deceleration
                                 anticipated across coverage due to volatile macroeconomic backdrop.
                                 Inventory: Better sales helped sales-to-inventory gap turn positive. We expect a reversal in the back-half due
                                 to both cost inflation and our expectation for decelerating comps.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                  August 22, 2011




Group 1 Automotive, Inc. (GPI): Adjusting estimates on the back of higher buyback and dividends                                                        8

GPI, $37.47                                 Patrick Archambault, CFA (New York): patrick.archambault@gs.com, (212) 902-2817
Market cap                   $900.1 mn
                                            Goldman Sachs & Co.
                                            Aditya Oberoi (New York): aditya.oberoi@gs.com, (212) 357-7617
Target price                      $57.00
                                            Goldman Sachs & Co.
Fiscal y/e Dec            2011E   2012E

EPS ($)                    3.74     4.58    What's changed
P/E                       10.0X     8.2X    On Aug 17, 2011, GPI declared a cash dividend of $0.13 per share for 2Q11, up from $0.11 in 1Q11. GPI
                      *                     also announced that the board of directors doubled the stock buyback authorization from $25mn to $50mn.
EPS Quarter/Interim        1.05     0.84
                                            We are making minor changes to our EPS and cash flow estimates to reflect this. Our new 2011/12/13 EPS
Investment Lists                            estimates go to $3.74/$4.58/$5.10 from $3.71/$4.49/$5.06. Our six-month price target remains unchanged at
                      Americas Buy List     $57.
Coverage view                 Attractive    Implications
                                            We see the announcement as positive as it reflects management’s confidence in GPI’s operational outlook
*Current and a year ago
                                            and in its ability to service all liquidity needs, even in an uncertain economic growth environment.
                                            We continue to believe that the company will be able to post solid earnings in the back half of 2011 as
                                            inventories at Japanese OEMs like Toyota (36% of GPI’s sales) and Honda (12% of GPI’s sales) improve
                                            post the Japan earthquake in March. We reiterate our Buy rating on GPI shares.
                                            Valuation
                                            Our unchanged 6-month price target of $57 is based on our 2011 and 2012 EBITDA and EPS estimates. GPI
                                            remains our favorite name within our dealer coverage group with best-in-class revenue and EBITDA growth,
                                            still-low earnings expectations, and an attractive valuation.
                                            Key risks
                                            Primarily the pace of new vehicle sales and pricing at the dealer level.



ANN Inc. (ANN): LOFT turns the corner, more than offsetting tougher 2Q for Ann                                                                         9

ANN, $21.70                                 Michelle Tan, CFA (New York): michelle.tan@gs.com, (212) 902-3099
Market cap                   $1,281 mn
                                            Goldman Sachs & Co.
                                            Nicole Shevins (New York): nicole.shevins@gs.com, (212) 902-9884
Target price                      $25.00
                                            Goldman Sachs & Co.
Fiscal y/e Jan            2012E   2013E     Tiffany Hagge (New York): tiffany.k.hagge@gs.com, (212) 902-9862
EPS ($)                    1.87     2.02    Goldman Sachs & Co.
                                            Nitin Jindal (Bangalore): nitin.jindal@gs.com, (212) 934-1263
P/E                       11.6X    10.8X
                                            Goldman Sachs India SPL
                      *
EPS Quarter/Interim        0.47     0.32

Investment Lists
                                            What's changed
                                  Neutral   2Q11 EPS of $0.47 beat GS/consensus of $0.44/$0.45. Less discounting at LOFT offset deeper promo at
Coverage view                     Neutral   Ann Taylor; flat gross margin vs. GS 50 bp drove the beat. SGA leveraged ~120 bp on a total comp of +9%.
                                            By brand, comps were +5% at Ann Taylor (GS +9%) and +11% at LOFT (GS +6%). Management guided 3Q
*Current and a year ago
                                            line items (including 12% sales growth, mid-single-digit comps, slight gross margin expansion) implying EPS
                                            of $0.58, essentially in-line with consensus. Management raised its 2011 revenue guidance to $2.225 bn
                                            (from $2.2 bn) on mid-single-digit comps, lowered gross margin guidance by ~30 bp (to 55.5% from 55.8%),
                                            and expect about 150 bp of SGA leverage (vs. 100 bp prior), implying EBIT of $170 mn (consensus $160
                                            mn).
                                            Implications
                                            With the Ann Taylor division’s turnaround in the later stages, investors have questioned what will sustain
                                            ANN’s momentum as gross profit growth at Ann Taylor fades - after a tough 12 months, LOFT appears to be
                                            stepping up. Starting last summer, the balance in the LOFT assortment began to skew too dramatically to
                                            fashion and lost its balance. As a result, as Ann Taylor’s strength and key process changes to sourcing and
                                            merchandise flow were driving margins higher, LOFT was still a meaningful drag. With LOFT’s strong 2Q
                                            momentum and nine months of easy compares ahead, LOFT has a decent runway for yoy improvement,
                                            which can help support results even if trends at the Ann Taylor division do not improve.
                                            Valuation




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                          August 22, 2011



                                 Based on 2Q upside and potential for LOFT strength to continue through 2011, we raise our 2011-2013E
                                 EPS to $1.87/$2.02/$2.19 from $1.68/$1.93/$2.09. To reflect the recent decline in market multiples, we are
                                 lowering our 6-month price target to $25 from $27 based on 12X PE/4X EV/EBITDA (vs.14X PE/4.5X
                                 EV/EBITDA used prior).
                                 Key risks
                                 Upside: accelerating comps at LOFT; downside: slowing at Ann Taylor



Americas: Retail: dotCommerce: Strong growth continues into 2Q; 1H11 outpaces 2010                                                           10

                                 Adrianne Shapira (New York): adrianne.shapira@gs.com, (212) 357-4174
                                 Goldman Sachs & Co.
                                 Matthew J. Fassler (New York): matt.fassler@gs.com, (212) 902-6740
                                 Goldman Sachs & Co.
                                 Michelle Tan, CFA (New York): michelle.tan@gs.com, (212) 902-3099
                                 Goldman Sachs & Co.
                                 Scott Kaufman-Ross (New York): scott.kaufman-ross@gs.com, (212) 934-4206
                                 Goldman Sachs & Co.
                                 Stephen Grambling, CFA (New York): stephen.grambling@gs.com, (212) 902-7832
                                 Goldman Sachs & Co.

                                 Torrid growth continues into 2Q
                                 E-commerce sales grew 17.6% to $834mn in 2Q, continuing the torrid pace from 1Q. Online sales
                                 represented 5.7% of total retail sales in 2Q (ex auto and gas), an increase of 60 bps over last year, in line
                                 with 1Q. Despite a bigger base, 1H11 sales growth outpaced 2010, as growth of 17.7% was 250 bps higher
                                 than 2010 growth of 15.2%, and penetration growth of 60 bp exceeded the 50 bp of penetration growth in
                                 2010.

                                 Softlines categories growing fastest
                                 Apparel and jewelry sales were the fastest growers as reported by comScore. In 2Q, apparel and jewelry
                                 sales grew 14%, amongst the fastest across retail and above 2010 and 1Q run rates. Both categories
                                 currently sit at 10% penetration, and the rapid growth is driving penetration towards the mid-teens. This
                                 growth is key as these discretionary categories could see potential slowing in 2H. Therefore, we will be keen
                                 to see if channel shift continues in the face of a potential back half slowdown.
                                 NILE could see sales rebound in 3Q
                                 comScore also reported their July sales growth, with e-Commerce growing at 14%, in line with comScore’s
                                 reported 2Q sales growth of 14%. The strongest category within this report was jewelry, which rose 19% yoy.
                                 This was a significant acceleration from June, in which jewelry rose just 7%. We see this as a potential
                                 positive read-across to Blue Nile given its 77% historical correlation with comScore jewelry sales, which could
                                 imply a sales pickup after a weak 2Q.



Financial Services

Brazil: Specialty Finance: Diversified: Solid results encouraging for Redecard and Cielo, but valuation not                                  11
compelling

                                 Carlos G. Macedo (Sao Paulo): carlos.macedo@gs.com, +55(11)3371-0887
                                 Goldman Sachs Brasil Bco Múlt S.A.
                                 Jason B. Mollin (Sao Paulo): jason.mollin@gs.com, +55(11)3371-0871
                                 Goldman Sachs Brasil Bco Múlt S.A.
                                 Wesley Okada (Sao Paulo): wesley.okada@gs.com, +55(11)3371-0875
                                 Goldman Sachs Brasil Bco Múlt S.A.
                                 Mariana Barros (Sao Paulo): mariana.barros@gs.com, +55(11)3372-0105
                                 Goldman Sachs Brasil Bco Múlt S.A.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                  August 22, 2011



                                          2Q2011 results highlighted positive aspects
                                          2Q results for Brazilian acquirers Redecard and Cielo showcased the bull case for the companies:
                                          Top-line growth. Transaction value continued to grow at a fast rate as the companies took market share from
                                          smaller players.
                                          Pricing. Net MDRs for Redecard, which for accounting reasons are more indicative of marginal net MDRs,
                                          increased qoq, reversing a trend that had run for 18 months. This was driven both by a more rational
                                          competitive environment and by seasonal aspects.
                                          Rental revenues. Even though rental revenues had a slightly mixed performance, the decline that we
                                          expected is taking longer to materialize, partially as a result of a more rational competitive environment.
                                          Receivables discounting. A decline in the relative amount of receivables discounted was offset by a
                                          significant increase in spreads. While we are not convinced the increase in spreads is permanent, it should
                                          help support receivables discounting revenues in 2011.
                                          Updating estimates to reflect outlook
                                          We update our forecasts to reflect new macro assumptions (which include a more dovish rate forecast that
                                          lowers expected receivables discounting revenues), higher net MDR and rental revenue forecasts and a
                                          slightly weaker outlook for top line growth (based on a more conservative multiple of PCE growth for
                                          transaction value). Overall, we revise 2011-13E EPS by +11.1%, +8.8%, and +4.5%, respectively, for
                                          Redecard, and +5.6%, +4.8%, and -3.4% for Cielo.
                                          Visibility priced in, defensive nature not enough
                                          We adjust our 12-month discounted flows to equity driven target prices slightly to reflect the changes to our
                                          estimates and risk metrics. Our price targets increase by 2.1% for Redecard and 0.4% for Cielo. High
                                          dividend yields give both stocks appeal in an uncertain scenario, and share prices have remained resilient.
                                          However, we see more adjusted upside in other shares under coverage (such as large-cap Brazilian banks),
                                          and maintain our Neutral rating for both companies.



Healthcare

Amylin Pharmaceuticals, Inc. (AMLN): Adjusting AMLN model                                                                                            12

AMLN, $10.05                              Terence Flynn (New York): terence.flynn@gs.com, (212) 357-5057
Market cap                 $1,444 mn
                                          Goldman Sachs & Co.
                                          Vishaal Turakhia (New York): vishaal.turakhia@gs.com, (212) 902-0127
Target price                     $9.00
                                          Goldman Sachs & Co.
Fiscal y/e Dec         2011E    2012E

EPS ($)                (0.93)    (0.96)   Changes and Implications
P/E                        --        --   We are introducing quarterly revenue and EPS estimates for 2012 and revising our estimates for 2011 to
                                          2013. We do not view these changes as material, and there is no change to our investment thesis, rating or
EPS Quarter/Interim*   (0.17)    (0.35)
                                          price target.
Investment Lists
                   Americas Sell List

Coverage view                   Neutral

*Current and a year ago




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                    August 22, 2011




Exelixis, Inc. (EXEL): Adjusting EXEL model                                                                                                            13

EXEL, $6.15                                  Terence Flynn (New York): terence.flynn@gs.com, (212) 357-5057
Market cap                    $788.7 mn
                                             Goldman Sachs & Co.
                                             Vishaal Turakhia (New York): vishaal.turakhia@gs.com, (212) 902-0127
Target price                        $8.00
                                             Goldman Sachs & Co.
Fiscal y/e Dec            2011E    2012E

EPS ($)                   (0.03)    (0.69)   Changes and Implications
P/E                           --        --   We are introducing quarterly revenue and EPS estimates for 2012 and revising our estimates for 2011 to
                      *                      2013. We do not view these changes as material, and there is no change to our investment thesis, rating or
EPS Quarter/Interim        0.56     (0.08)
                                             price target.
Investment Lists
                                   Neutral

Coverage view                      Neutral

*Current and a year ago




InterMune, Inc. (ITMN): Adjusting ITMN model                                                                                                           14

ITMN, $22.61                                 Terence Flynn (New York): terence.flynn@gs.com, (212) 357-5057
Market cap                    $1,243 mn
                                             Goldman Sachs & Co.
                                             Vishaal Turakhia (New York): vishaal.turakhia@gs.com, (212) 902-0127
Target price                       $29.00
                                             Goldman Sachs & Co.
Fiscal y/e Dec            2011E    2012E

EPS ($)                   (2.72)    (1.60)   Changes and Implications
P/E                           --        --   We are introducing quarterly revenue and EPS estimates for 2012 and revising our estimates for 2011 to
                                             2013. We do not view these changes as material, and there is no change to our investment thesis, rating or
EPS Quarter/Interim*      (0.72)    (0.44)
                                             price target.
Investment Lists
                                   Neutral

Coverage view                      Neutral

*Current and a year ago




United Therapeutics Corporation (UTHR): Adjusting UTHR model                                                                                           15

UTHR, $48.77                                 Terence Flynn (New York): terence.flynn@gs.com, (212) 357-5057
Market cap                    $2,757 mn
                                             Goldman Sachs & Co.
                                             Vishaal Turakhia (New York): vishaal.turakhia@gs.com, (212) 902-0127
Target price                       $82.00
                                             Goldman Sachs & Co.
Fiscal y/e Dec            2011E    2012E

EPS ($)                    3.10      3.74    Changes and Implications
P/E                       15.7X     13.0X    We are introducing revenue and EPS estimates for 2012 and revising our estimates for 2011 to 2013. We do
                      *                      not view these changes as material, and there is no change to our investment thesis, rating or price target.
EPS Quarter/Interim        0.79      0.66

Investment Lists
                      Americas Buy List

Coverage view                      Neutral

*Current and a year ago




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                      August 22, 2011




Vertex Pharmaceuticals, Inc. (VRTX): Adjusting VRTX model                                                                                                16

VRTX, $46.49                                 Terence Flynn (New York): terence.flynn@gs.com, (212) 357-5057
Market cap                    $9,339 mn
                                             Goldman Sachs & Co.
                                             Vishaal Turakhia (New York): vishaal.turakhia@gs.com, (212) 902-0127
Target price                       $59.00
                                             Goldman Sachs & Co.
Fiscal y/e Dec            2011E    2012E

EPS ($)                   (1.19)     5.31    Changes and Implications
P/E                           --     8.8X    We are introducing quarterly revenue and EPS estimates for 2012 and revising our estimates for 2011 to
                      *                      2013. We do not view these changes as material, and there is no change to our investment thesis, rating or
EPS Quarter/Interim       (0.15)    (1.04)
                                             price target.
Investment Lists
                      Americas Buy List

Coverage view                      Neutral

*Current and a year ago




ExamWorks Group, Inc. (EXAM): Reviewing post-2Q issues: a conference call with management                                                                17

EXAM, $14.02                                 Matthew Borsch, CFA (New York): matthew.borsch@gs.com, (212) 902-6784
Market cap                    $479.8 mn
                                             Goldman Sachs & Co.
                                             Sumeet Jain (New York): sumeet.x.jain@gs.com, (212) 934-8377
Target price                       $17.00
                                             Goldman Sachs & Co.
Fiscal y/e Dec            2011E    2012E

EPS ($)                   (0.04)     0.29    What's changed
P/E                           --    48.9X    We hosted a conference call with ExamWorks management to address recent issues and topics of investor
                                             interest following 2Q earnings. This report includes the transcript from the call.
EPS Quarter/Interim*      (0.03)     0.00
                                             We are not making any changes to our 2011-2013 EPS.
Investment Lists
                                             Implications
                                   Neutral   So far this month, shares of EXAM are down more than 35% versus a 12% decline for the S&P 500. The
Coverage view                      Neutral   stock move, which seems overdone, appears to reflect investor concerns on the following topics that we
                                             addressed during our conference call: (1) acquisition valuations and synergies, (2) acquisition integration and
*Current and a year ago
                                             service execution, and (3) organic growth.
                                             The conference call provided incremental additional information on these topics and bolstered our view that
                                             2H2011 will be a period when EXAM will focus more on integration of the acquisitions it has done and slow
                                             down the pace a bit, in light of the pace of M&A activity the company has completed (EXAM has tripled in
                                             size over the past year).
                                             Valuation
                                             We maintain our 6 month price target of $17 computed via 9X EV/EBITDA (34%), 19X cash P/E (34%), DCF
                                             (17%), and an M&A component (15%).
                                             Key risks
                                             Acquisition integration and lower organic growth represent downside risks. Higher M&A activity represents
                                             the key upside risk.



Technology

GS US Semi & SPE Weekly: AMAT, SMTC earnings previews; MU analyst day preview                                                                            18

                                             James Covello (New York): james.covello@gs.com, (212) 902-1918
                                             Goldman Sachs & Co.
                                             James Schneider, Ph.D. (New York): james.schneider@gs.com, (917) 343-3149
                                             Goldman Sachs & Co.
                                             Mark Delaney (New York): mark.delaney@gs.com, (212) 357-0535




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                        August 22, 2011



                                 Goldman Sachs & Co.
                                 Gabriela Borges (New York): gabriela.borges@gs.com, (212) 357-2692
                                 Goldman Sachs & Co.

                                 AMAT: Expect in-line quarter but very weak guidance. We remain Cautious on Semi Equipment
                                 We expect Applied Materials to report in-line 2QCY11 (July) results, consistent with the company’s update at
                                 SEMICON on July 12. Peer reports to date suggest that the company guided conservatively enough to make
                                 its quarter. However, we believe that management could guide 3QCY11 sales down by 10%-15% qoq driven
                                 by weakness in SPE, crystalline solar, and display. We remain Cautious on the Semi Equipment industry,
                                 and we note that our CY2012 EPS estimate for AMAT is 29% below the Street.
                                 Micron analyst event unlikely to be stock moving; DRAM supply cuts needed for us to be more
                                 positive
                                 We will be attending Micron’s Analyst Day in Sun Valley, Idaho on August 23 and 24. We believe that the
                                 company will focus on its DRAM and Flash product portfolio, expectations for industry supply growth, and
                                 plans for capex and M&A. We expect commentary on the current business environment to be limited, which
                                 is typical as Micron does not provide P&L guidance. Management noted on its June earnings call that DRAM
                                 inventory was 1 to 2 weeks above average, and we believe that there continues to be excess supply given
                                 relatively stable production rates and declining demand. We maintain our Sell rating. We expect Micron to
                                 generate losses in 2HCY11, and our CY12 EPS estimate is more than 50% below the Street. We would need
                                 to see reductions in DRAM supply and more reasonable Street estimates in order to be more positive on the
                                 stock.
                                 SMTC: Expect product drivers to partly offset weak analog sales
                                 We expect an in-line July quarter from Semtech, and we think October quarter sales will be guided up slightly
                                 qoq. Analog peers have seen a marked deceleration in industrial growth and muted demand in computing
                                 and consumer, which we expect from Semtech as well. However, we think Semtech’s exposure to 1) secular
                                 growth in smartphones and tablets with its port protection business, and 2) 40G/100G optical network
                                 deployments will partly offset broad-based analog weakness. Valuation has become more compelling at
                                 current levels as the stock is trading at a less than 10% premium to the group on 2011E and 2012E P/E (vs.
                                 a 15% - 20% premium typically). However, we remain Neutral rated on stock for now, as we believe Street
                                 estimates for analog stocks will need to come down further before the stock can begin to outperform the
                                 group significantly.



GS CommTech Weekly: GS CommTech Weekly: ARUN preview; 2Q market update for Routing and SBC                                                 19
segments

                                 Simona Jankowski, CFA (San Francisco): simona.jankowski@gs.com, (415) 249-7437
                                 Goldman Sachs & Co.
                                 Kent Schofield (San Francisco): kent.schofield@gs.com, (415) 249-7489
                                 Goldman Sachs & Co.
                                 Amanda O'Brien (San Francisco): amanda.obrien@gs.com, (415) 249-7467
                                 Goldman Sachs & Co.

                                 Weekly stock performance
                                 Our median stock was -9% this week, underperforming the S&P500 -3%, and the Nasdaq, -5%. Our
                                 strongest performer was MMI, up 57%, while our weakest was ARUN, down 23%.
                                 Aruba (ARUN, Buy): Expect a 4QFY11 beat and at least in-line guidance for 1QFY12
                                 We expect that Aruba will exceed consensus and guidance for the July quarter and we believe the company
                                 can exceed consensus expectations for the October quarter, but may only guide to the Street given the
                                 macro environment. We believe both guides would be viewed positively as the stock has traded very similarly
                                 to other secular winners who have already missed expectations and given in line guidance would still
                                 represent nearly 40% yoy product revenue growth. For 4QFY11our total revenue estimate of $110 mn
                                 compares to the Street’s $109 mn and our non-GAAP EPS of $0.18 is $0.01 ahead of the Street’s $0.17. For
                                 1QFY12 (October), we estimate revenue of $115 mn versus consensus of $114 mn and non-GAAP EPS of
                                 $0.15 versus the Street’s $0.14.
                                 Routing market was up 21% yoy in 2Q11, but Cisco and Juniper lost incremental share
                                 The total routing market was up 11% qoq and up 21% yoy in 2Q, led by strength in the Service Provider
                                 segment. Juniper and Cisco lost incremental share to Alcatel-Lucent and Huawei, though Cisco’s




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                  August 22, 2011



                                           accelerating order growth in the segment reported last quarter and design wins vs. Huawei suggest that it
                                           may regain share in 2H.
                                           SBC market growth decelerated to 15% yoy in 2Q11, an incremental negative for APKT
                                           Session Border Controller market growth decelerated to 15% yoy in 2Q, down from 24% yoy in 1Q and 45%
                                           in 2010, driven primarily by weakness in EMEA. Acme Packet lost share qoq, but is still up a lot yoy, though
                                           both Sonus and Alcatel-Lucent are gaining incremental traction.
                                           Valuation
                                           The median CommTech forward P/E was 14.3X this week, suggesting a 20% discount to its 1-year average
                                           of 17.8X. Relative valuation was at 1.3X the S&P, in line with the 1-year average of 1.3X.



The hardware download: HP's IPG performance highlights risks to Sell-rated Lexmark                                                                   20

HPQ, $23.60                                Bill Shope, CFA (New York): bill.shope@gs.com, (212) 902-6834
Market cap                 $48,474 mn
                                           Goldman Sachs & Co.
                                           Elizabeth Borbolla (New York): elizabeth.borbolla@gs.com, (212) 357-4977
Target price                     $30.00
                                           Goldman Sachs & Co.
Fiscal y/e Oct         2011E     2012E     Cristina Colon, CMA (New York): cristina.colon@gs.com, (212) 902-9913
EPS ($)                   4.86     4.30    Goldman Sachs & Co.
                                           Stephen Oshman (New York): stephen.oshman@gs.com, (917) 343-3128
P/E                       4.9X     5.5X
                                           Goldman Sachs & Co.
EPS Quarter/Interim*      1.15     1.33

Investment Lists
                                           The hardware download provides an overview of the week
                                 Neutral   The publication is split into five key sections: This week’s performance, Sentiment and musings, Our take on
Coverage view                    Neutral   key news events, Weekly tech trivia, and Calendar of events.
*Current and a year ago                    Weekly tech trivia
                                           HP has decided to shut down its webOS device business and explore other options, such as licensing, to
                                           monetize the underlying software platform. In earlier days, Apple itself failed to license out a multimedia
LXK, $28.46                                platform. Which platform was it? Answer in the back.
Market cap                  $2,277 mn      Sentiment and musings: HP’s Imaging and Printing Group results highlight risks to Sell-rated
Target price                     $25.00    Lexmark
                                           We downgraded Lexmark to Sell a week ago, on August 14, 2011, and we believe HP’s commentary on
Fiscal y/e Dec         2011E     2012E
                                           slowing supplies sell-through in July suggests our caution on supplies demand is warranted. As a reminder,
EPS ($)                   4.52     3.53    Lexmark’s margins and earnings are highly sensitive to supplies growth, and we believe any shortfall in this
P/E                       6.3X     8.1X
                                           respect could add tremendous pressure to the stock price.
                                           News focus
EPS Quarter/Interim*      0.98     1.09
                                           Our take on key news for the week:
Investment Lists                           HP’s PSG shift seen as a boost to rivals. Computerworld notes that if HP spins off its PC division, other PC
                   Americas Sell List      OEMs could benefit from share gains amid the ensuing market uncertainty. The actual result for Dell may not
Coverage view                    Neutral
                                           be so clear. Indeed, similar views became consensus in 2005 as IBM was selling its PC business to Lenovo,
                                           yet Dell’s stock declined by 29% in 2005 versus a 3% rise in the S&P 500 over the same year. Indeed,
*Current and a year ago                    incrementally aggressive pricing could counter any share gains Dell may experience.
                                           Apple increases iPhone orders. According to DigiTimes, Apple has increased its total orders for iPhones in
                                           the back half of 2011 by 12-13%, from 50 million units to more than 56 million units.
                                           Weekly performance
                                           The IT hardware group severely underperformed the S&P 500 and the GS TMT Index this week. Our
                                           coverage universe declined 13.4%, versus a decrease of 4.7% in the S&P 500 and a 7.6% decline in the
                                           TMT group.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                     August 22, 2011




salesforce.com, Inc. (CRM): Server transactions update                                                                                                  21

CRM, $111.00                                 Heather Bellini, CFA (New York): heather.bellini@gs.com, (212) 357-7710
Market cap                  $15,534 mn
                                             Goldman Sachs & Co.
                                             Perry Huang (New York): perry.huang@gs.com, +2(212)902-6785
Target price                       $150.00
                                             Goldman Sachs & Co.
Fiscal y/e Jan            2012E     2013E    Brian Baytosh (New York): brian.baytosh@gs.com, (917) 343-4120
EPS ($)                   (0.06)      0.23   Goldman Sachs & Co.
                                             Tariq Chaudhri (New York): tariq.chaudhri@gs.com, (212) 357-4322
P/E                           --        --
                                             Goldman Sachs & Co.
                      *
EPS Quarter/Interim       (0.04)      0.32

Investment Lists
                                             What's changed
                      Americas Buy List      Server transactions decelerate slightly as the pipeline rebuilds – Three weeks into the October quarter,
Coverage view                      Neutral   Salesforce.com server transactions were up 13.9% compared to the same period last quarter. Assuming
                                             perfect linearity throughout the quarter, this implies F3Q2012 transaction growth of 61.4% yoy and 13.9%
*Current and a year ago
                                             qoq. This compares to last quarter at +67.5% yoy, or 13.4% qoq for the period, and to F3Q2011 at +53.3%
                                             yoy and +17.0 qoq.
                                             Implications
                                             Solid start to another quarter – While still early in the period, the quarter-to-date server transactions data
                                             suggest continued strong growth in Salesforce.com’s business. We note recognized revenue has a 97% R-
                                             squared against transactions and bookings have roughly a 50% R-squared. Salesforce.com posted solid
                                             F2Q12 results last week with revenues and deferreds coming in better than expected and cash flow and non-
                                             GAAP EPS beating consensus after adjusting for one-time items. While the current macro environment likely
                                             will have some impact on deal size and sales cycles, we still see the company as in a secular sweet spot. As
                                             such, despite our view that deferreds seasonality will be below normal in the next few quarters, we see
                                             Salesforce.com as likely to hold up better than it did in the last downturn. We would also expect the upcoming
                                             Dreamforce user group conference to serve as a positive catalyst for the shares.
                                             Valuation
                                             Our 12-month price target of $150 for Salesforce.com is based on an equal weighting of our DCF,
                                             EV/bookings and P/CFO analysis. At $111, Salesforce.com is trading at 30X and 25X our FY2012E
                                             (CY2011E) and FY2013E (CY2012E) CFO per share of $3.73 and $4.41, respectively.
                                             Key risks
                                             Macroeconomic slowdown resulting in slower bookings and higher attrition, materially higher expense growth,
                                             and lower-than-anticipated sales execution.



Utilities

Americas: Utilities: Cost recovery rider denied for La Cygne plant; Sell WR, Buy GXP                                                                    22

                                             Michael Lapides (New York): michael.lapides@gs.com, (212) 357-6307
                                             Goldman Sachs & Co.
                                             Neil Mehta (New York): neil.mehta@gs.com, (212) 357-4042
                                             Goldman Sachs & Co.
                                             Vinay Nayak (Salt Lake City): vinay.nayak@gs.com, (801) 741-5454
                                             Goldman Sachs & Co.
                                             Jaideep Malik (New York): jaideep.malik@gs.com, (917) 343-0717
                                             Goldman Sachs & Co.

                                             Kansas commission denies environmental rider for WR, GXP
                                             This past week, at an open meeting, the Kansas Corporation Commission (KCC) indicated its intent (1) to
                                             approve predetermination of major environmental work – up to $1.2-$1.3 bn – on the LaCygne coal plant co-
                                             owned by GXP and WR, and (2) to deny WR's application for cash cost recovery for the LaCygne project via
                                             its environmental cost recovery rider (ECRR). The companies expect to install the pollution controls over the
                                             next three to five years.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                         August 22, 2011



                                    Order as expected for GXP, but raises financing risk for WR
                                    Today’s announcement appears consistent with our base case for GXP, as we did not expect the company to
                                    receive an environmental cost recovery rider. For WR, today’s announcement presents downside risk to our
                                    already-below-consensus estimates, as it may increase equity financing requirements due to regulatory lag.
                                    We await a final written order, likely coming next week.
                                    Reiterating Buy rating on GXP, Sell rating on WR
                                    We reiterate our Buy rating on GXP ($21, 12-month price target, 19% total return), as shares trade below
                                    book value, historically an attractive entry point for Regulated Utilities. GXP currently trades at 12.7X/11.0X
                                    versus peers at 13.4X/12.4X.
                                    We also reaffirm our Sell rating (in the context of our Neutral coverage view) on WR ($24, 12-month price
                                    target, 0% total return) as (1) our current estimates remain 7%/4% below 2012/2013 consensus, and (2)
                                    shares currently at 13.8X/12.6X versus peers 13.4X/12.4X. Given downside risk to consensus estimates, we
                                    believe WR should trade at a discount to small and mid cap Regulated Utilities.
                                    Key risks to our price targets for WR and GXP relate to demand, financing, project construction and general
                                    regulation.




Reports Published

                                  US Economics Analyst: 11/33 - Watch Out for Bears in Jackson Hole


Analyst Certification Disclaimer

Each equity and strategy research report excerpted herein was certified under Reg AC by the analyst primarily responsible for such report as follows: I, Name
of Analyst, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or
their securities. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views
expressed in this report.




Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                               August 22, 2011




Investment Profile
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The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites of several
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Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various
return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF,
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Disclosure Appendix
Coverage group(s) of stocks by primary analyst(s)
Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium
can be found in the latest relevant published research.

Company-specific regulatory disclosures
Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium
can be found in the latest relevant published research.

Distribution of ratings/investment banking relationships
Goldman Sachs Investment Research global coverage universe
                                   Rating Distribution                                      Investment Banking Relationships
                          Buy             Hold                Sell                        Buy             Hold               Sell
Global                    32%             54%                 14%                         52%             41%               37%
As of July 1, 2011, Goldman Sachs Global Investment Research had investment ratings on 3,167 equity securities. Goldman Sachs assigns stocks as Buys
and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes
of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.

Price target and rating history chart(s)
Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium
can be found in the latest relevant published research.

Regulatory disclosures

Disclosures required by United States laws and regulations
See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-
manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public
offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes a market in fixed income
securities of issuers discussed in this report and usually deals as a principal in these securities.
The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals
reporting to analysts and members of their households from owning securities of any company in the analyst's area of coverage. Analyst
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Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                            August 22, 2011



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Goldman Sachs Global Investment Research
Americas Morning Summary                                                                                                                                  August 22, 2011




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