Page 1

North America

Research 28 April 2011 39 pages

Contents Companies in this issue: Allegheny Technologies Incorporated (ATI) Baker Hughes Inc (BHI) Boeing Co. (BA) Citrix Systems, Inc. (CTXS) Constellation Energy Group, Inc. (CEG) Corning Incorporated (GLW) eBay Inc (EBAY) Fiserv, Inc. (FISV) FMC Technologies (FTI) General Dynamics Corp. (GD) Guess? Inc. (GES) Nabors Industries (NBR) National Oilwell Varco Inc (NOV) Norfolk Southern Corp. (NSC) Northrop Grumman Corp. (NOC) Parker Hannifin Corp (PH) PPL Corp (PPL) Praxair Inc (PX) Range Resources Corp (RRC) Waddell & Reed Financial, Inc (WDR) WellPoint (WLP) Xilinx Inc (XLNX)

Top Calls pg 9 11 10 12 7 17 13 14 15 16 8 18 5 20 19 21 22 23 24 6 25 26

National Oilwell Varco Inc (NOV) -- Upgrading to Buy on Rig Order Ramp, PS&S Profit Rebound Upgrading to Buy -- We are substantially more constructive on NOV due to the strong outlook for offshore rigs, land rigs, production/fracturing equipment, FPSOs, drill pipe, coiled tubing, and oilfield consumables. As a result, we have upgraded NOV to Buy (1H) from Hold (1M). We have raised our price target to $92 from $78 on our upwardly revised earnings forecast. NOV shares fell over 4% yesterday. p5 Robin Shoemaker

Waddell & Reed Financial, Inc (WDR) -- The DistributionManufacturing Nexus (Why Margins Can Move Higher) Top U.S. retail pick -- No change to Buy & $48 12-month price target. As we expected, WDR is emerging from 1Q earnings season with among best in class flow outlooks, which typically acts as a valuation catalyst. We also remain 4% & 7% above 2011/2012 consensus due, we suspect, to higher margin assumptions. p6 William R Katz

Other topics: CIRA Conference Call Recap Coal MLPs: Thermal Fundamentals Still Challenged, Limited Upside from Exports Large Cap Banks: Updating Our Most & Least Preferred Ideas Large-Cap/Small-Cap Rotation Model: We Continue to Favor Small-Caps Russell Reconstitution 2011 SMID "Value Creators" List Tobacco U.S. Macro Flash 29 27 28 33 32 31 30 34

Data Summary Ticker ATI BA BHI CTXS EBAY FISV FTI GD GES GLW NBR NOC NOV Rating Old New 3H 3H 1H 1H 2H 2H 2M 2M 2H 2H 1M 1M 1M 1M 1H 1H 2M 1M 2H 2H 1H 1H 1H 1H 2H 1H Target Price Old New US$44.00 US$49.00 US$84.00 US$90.00 US$69.00 US$80.00 US$67.00 US$79.00 US$33.00 US$36.00 US$70.00 US$75.00 US$55.00 US$57.00 US$88.00 US$91.00 US$46.00 US$50.00 US$22.50 US$24.50 US$36.00 US$37.00 US$76.00 US$79.00 US$78.00 US$92.00 Current Year Earnings Estimates Old New US$2.60 US$2.65 US$4.07 US$4.13 US$4.10 US$4.10 US$2.23 US$2.39 US$1.93 US$1.95 US$4.49 US$4.47 US$1.70 US$1.70 US$6.91 US$6.98 US$3.10 US$3.10 US$1.87 US$2.01 US$1.80 US$1.80 US$6.66 US$6.70 US$3.75 US$4.35 Next Year Earnings Estimates Old New US$3.40 US$3.40 US$5.42 US$5.50 US$4.90 US$5.15 US$2.48 US$2.71 US$2.19 US$2.24 US$5.03 US$5.03 US$2.07 US$2.20 US$7.70 US$7.75 US$3.56 US$3.56 US$2.06 US$2.20 US$2.50 US$2.50 US$7.20 US$7.36 US$3.65 US$5.35

See Appendix A-1 for Analyst Certification, Important Disclosures and non-US research analyst disclosures. Citi Investment Research & Analysis is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Not for distribution in the People's Republic of China, excluding the Hong Kong Special Administrative Region.

Citigroup Global Markets


Research 28 April 2011

Data Summary (continued) Ticker NSC PH PPL PX RRC WDR WLP XLNX Rating Old New 1M 1M 1M 1M 2M 2M 1M 1M 3H 3H 1M 1M 2L 2L 2H 2H Target Price Old New US$76.00 US$80.00 US$110.00 US$112.00 US$25.00 US$28.00 US$112.00 US$120.00 US$44.00 US$48.00 US$48.00 US$48.00 US$70.00 US$82.00 US$35.00 US$36.00 Current Year Earnings Estimates Old New US$4.75 US$4.85 US$6.20 US$6.35 US$2.47 US$2.51 US$5.35 US$5.43 US$0.93 US$1.15 US$2.49 US$2.49 US$6.65 US$7.40 US$2.16 US$2.25 Next Year Earnings Estimates Old New US$5.55 US$5.75 US$7.40 US$7.70 US$2.16 US$2.51 US$6.19 US$6.34 US$1.84 US$2.05 US$3.02 US$3.02 US$7.10 US$7.85 US$2.62 US$2.76

2

Citigroup Global Markets


Research 28 April 2011

Speaking on Today's Morning Call Robin Shoemaker -- National Oilwell Varco Inc (NOV) William R Katz -- Waddell & Reed Financial, Inc (WDR) Brian Chin -- Constellation Energy Group, Inc. (CEG) Jeff Black -- Guess? Inc. (GES)

3

Citigroup Global Markets


Research -- 28 April 2011

Global Market Data S&P 500 Sector Performance YTD (%) Telecom Utilities Financial IT Health care Cons. Staples Cons. Disc. Industrials Materials Energy 0.0 5.0 10.0 15.0 20.0 70.0 60.0 50.0 04/10 06/10 Russell 1000 100.0 90.0 80.0 120.0 110.0 Russell 1000 Relative to FTSE 100 and Nikkei 225

08/10 10/10 Nikkei 225

12/10 02/11 FTSE 100

04/11

Price 27-Apr WORLD INDICES Dow Jones Industrial NASDAQ 100 Russell 1000 Russell 1000 Growth Russell 1000 Value S&P 500 S&P Mid Cap Russell 2000 Russell 2000 Growth Russell 2000 Value Bank Index Global - MSCI World Australia - All Ordinaries Brazil - Bovespa Canada - TSE 300 China - Shanghai Composite France - CAC 40 Germany - DAX 30 Hong Kong - Hang Seng Japan - Nikkei 225 Mexico - IPC Singapore - Straits Times UK - FTSE 100 12,691.0 2,413.6 754.1 624.8 688.5 1,355.7 1,011.0 858.3 493.5 1,131.7 51.4 1,371.4 4,954.0 66,264.5 16,095.6 2,925.4 4,067.7 7,405.0 23,892.8 9,691.8 36,826.9 3,182.7 6,068.2 0.8 0.7 0.6 0.6 0.7 0.6 0.6 0.6 0.8 0.4 1.0 0.3 (0.8) (1.3) (0.1) (0.5) 0.6 0.7 (0.5) 1.4 (0.2) 0.3 (0.0) 1.9 2.4 1.9 2.0 1.9 1.9 2.2 2.2 2.2 2.2 2.3 1.6 0.3 (1.2) (0.0) (2.7) 1.6 2.1 (0.0) 0.9 0.0 0.5 0.8 1 day week

Absolute Performance (%) 1 mth 3 mth 6 mth 12 mth YTD

12 month Price Levels High Low Score

3.8 4.2 3.4 4.0 2.7 3.2 4.2 4.2 5.5 2.8 (0.8) 3.4 2.3 (2.2) (1.0) (1.8) 2.4 6.6 3.2 1.6 0.1 3.6 2.8

5.8 3.6 4.7 4.8 4.6 4.3 8.1 7.9 10.9 4.8 (3.5) 3.8 1.0 (2.6) 3.6 6.4 0.2 3.5 0.5 (7.5) (1.7) (1.2) 1.7

14.1 13.5 15.5 15.8 15.3 14.6 22.2 21.9 25.5 18.2 12.5 13.0 4.9 (6.1) 10.5 (2.4) 6.6 12.7 3.1 3.2 4.4 1.9 7.5

15.5 20.3 15.4 18.4 12.4 14.5 22.5 19.0 27.4 11.0 (5.5) 14.0 0.8 (0.4) 14.4 0.6 5.8 20.2 12.4 (13.6) 12.7 6.4 8.3

9.6 8.8 8.2 8.7 7.7 7.8 11.4 9.5 12.0 7.0 (1.6) 7.1 2.2 (4.4) 3.3 4.2 6.9 7.1 3.7 (5.3) (4.5) (0.2) 2.9

12,708.4 2,415.9 755.0 625.4 689.5 1,357.4 1,011.0 859.1 493.5 1,141.1 56.9 1,378.0 5,069.5 73,103.3 16,601.7 3,186.7 4,169.9 7,441.8 24,988.6 11,213.5 38,876.8 3,313.6 6,105.8

9,614.3 1,700.0 556.0 450.1 519.6 1,011.5 692.8 587.7 322.7 812.9 42.7 1,026.2 4,194.4 57,633.9 12,820.2 2,319.7 3,287.6 5,607.7 18,971.5 8,227.6 30,074.1 2,648.2 4,790.0

99 100 100 100 99 99 100 100 100 97 61 98 87 56 87 70 88 98 82 49 77 80 97

USD EXCHANGE RATES USD/EUR USD/GBP USD/JPY USD/CAD USD/AUD 0.677 0.601 82.220 0.950 0.920 (0.9) (0.9) 0.9 (0.1) (0.9) (1.8) (1.3) (0.3) (0.3) (1.5) (4.7) (3.5) 1.1 (3.1) (5.6) (7.1) (4.2) (0.8) (4.3) (8.8) (6.8) (5.1) 0.6 (7.6) (10.6) (10.9) (8.3) (11.7) (6.6) (15.8) (9.5) (6.2) 1.3 (4.7) (6.0) 0.842 0.703 94.980 1.085 1.240 0.676 0.601 77.160 0.945 0.919 0 0 28 4 0

COMMODITIES Aluminium (US�/lb) {4} Copper (US�/lb) {4} Lead (US�/lb) {4} Nickel (US�/lb) {4} Tin (US�/lb) {4} Zinc (US�/lb) {4} Gold ($/oz) {5} Platinum ($/oz) {6} Oil ($/bbl) {7} 124.1 421.7 114.3 1,207.0 1,449.8 100.9 1,516.6 1,825.2 112.8 (0.0) (2.3) (2.9) (0.1) (2.2) (0.9) 0.9 0.7 0.5 0.7 (2.7) (4.8) 0.9 (2.0) (4.8) 1.2 0.5 1.2 4.8 (3.9) (6.8) (1.6) 0.5 (5.7) 6.3 4.6 7.0 13.6 (1.6) 1.6 0.6 9.7 (0.9) 15.0 1.4 31.7 19.3 12.1 0.1 17.0 22.9 (10.4) 14.7 8.9 37.6 29.2 24.8 10.9 2.9 72.9 (4.4) 30.6 6.2 36.8 11.2 (3.7) (1.7) 7.7 18.7 (9.0) 6.7 2.9 23.4 124.5 460.3 133.3 1,316.7 1,508.3 116.0 1,529.5 1,865.5 113.5 82.4 273.9 69.4 811.9 711.7 71.2 1,146.5 1,433.2 64.2 99 79 70 78 93 66 97 91 99

Notes: Screen powered by dataCentral. Score represents how close an index, exchange rate or commodity price is trading relative to its 12 month high. A score of 100 indicates that the current level is the 12 month high. Score = (Current price - 12 month low) / (12 month high - 12 month low) * 100.

4

Citigroup Global Markets


Research -- 28 April 2011

National Oilwell Varco Inc (NOV) Upgrading to Buy on Rig Order Ramp, PS&S Profit Rebound Buy/High Risk from Hold/High Risk Price (27 Apr 11) Target price from US$78.00 Expected share price return Expected dividend yield Expected total return Market Cap 1H US$76.88 US$92.00 19.7% 0.5% 20.2% US$32,495M

Robin Shoemaker +1-212-816-3258 robin.shoemaker@citi.com

Upgrading to Buy -- We are substantially more constructive on NOV due to the

strong outlook for offshore rigs, land rigs, production/fracturing equipment, FPSOs, drill pipe, coiled tubing, and oilfield consumables. As a result, we have upgraded NOV to Buy (1H) from Hold (1M). We have raised our price target to $92 from $78 on our upwardly revised earnings forecast. NOV shares fell over 4% yesterday. Quarter Had Two Notable Positives -- NOV reported a 1Q11 EPS of $1.00,

slightly beating our $0.97 estimate and in line with the $1.00 consensus. More relevant to its forward projections, however, orders increased by 62% sequentially to $2,277M in 1Q11 from $1,408M in 4Q10. Additionally, PS&S operating margins increased by 450 bps sequentially on 11% higher revenues, and this significantly beat our forecast. Increasing Estimates -- We have raised our EPS estimates substantially in 2011,

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 4.09 4.09 3.6 18.8 10.2 na

2011E 4.35 3.75 6.5 17.7 8.8 4.17

2012E 5.35 3.65 23.0 14.4 6.9 5.10

2012, and 2013 (see table below). The recent order growth combined with the flurry of rig-rebuilding activity over the last six months strongly suggests that a ramp in capital equipment orders is forthcoming. Further, the surge in PS&S revenues and margins in 1Q11 sends a strong signal that the growth in shorter-cycle businesses is sustainable. Order Ramp Is Key to Stock -- We believe the stock is primarily driven by the

Price Performance (RIC: NOV.N, BB: NOV US)

order trend, so robust indicators of future bookings cannot be overstated. Only a handful of rig equipment packages have hit NOV's order book despite the surge in new rig announcements. For example, industry sources count 31 fixed floater orders (with 18 options) since October 2010, but NOV has included only eight drillships in its bookings over the past two quarters, suggesting a surge of new orders from 2Q11 to 4Q11. Conservative Valuation -- The stock trades at a lower multiple than the average

of its oilfield manufacturing peers (27% discount on 2012 P/E, 31% discount on 2012 EV/EBITDA) and appears inexpensive on the basis of current forward multiples (17.7x P/E, 9.2x EV/EBITDA) vs. historical medians (19.5x P/E, 9.6x EV/EBITDA).

5

Citigroup Global Markets


Research -- 28 April 2011

Waddell & Reed Financial, Inc (WDR) The Distribution-Manufacturing Nexus (Why Margins Can Move Higher) Buy/Medium Risk Price (27 Apr 11) Target price Expected share price return Expected dividend yield Expected total return Market Cap 1M US$39.62 US$48.00 21.2% 2.8% 23.9% US$3,404M

William R Katz +1-212-816-5394 william.katz@citi.com

Top U.S. retail pick -- No change to Buy & $48 12-month price target. As we

expected, WDR is emerging from 1Q earnings season with among best in class flow outlooks, which typically acts as a valuation catalyst. We also remain 4% & 7% above 2011/2012 consensus due, we suspect, to higher margin assumptions. Margins have room to run -- We see two key factors fueling further margin

widening: 1) the wholesale channel has scaled to the point that recurring investment management revenue are increasingly offsetting elevated POS costs; and, 2) strong non-distribution cost leverage. Favorable decomposition work -- In response to market skepticism around profit

EPS new(US$) EPS Old(US$) EPS Growth P/E Consensus Data

2010 1.86 1.86 53.2 21.3 na

2011E 2.49 2.49 33.6 15.9 2.38

2012E 3.02 3.02 21.1 13.1 2.83

Price Performance (RIC: WDR.N, BB: WDR US)

margin lift (in light of still booming volumes), we update our "decomposition" work we did in mid-February following then CIRA-sponsored investor meetings with investors (see also our 2/18 note, Constructive Updates � Raise Ests/Target; Top U.S. Retail Play). Here, we bifurcate (and isolate) distribution impact from manufacturing and further parse distribution margin drivers by channel between advisors and wholesale segments. In turn, we are encouraged by two key observations: 1) segment operating margin was stable Q/Q despite 30% jump in wholesale gross sales and 14% sequential rise in advisor gross sales (both pressuring upfront costs), and despite two fewer revenue days and only partial benefit from robust markets; and, 2) wholesale business is now scaled that incremental revenue dollars are large enough to help drive overall profits.

6

Citigroup Global Markets


Research -- 28 April 2011

Constellation Energy Group, Inc. (CEG) Alert: Quick Thoughts On Possible Exelon Merger

Brian Chin +1-212-816-2861 brian.chin@citi.com

Widespread media reports (Reuters, Bloomberg, WSJ) indicate Hold-rated Exelon (EXC.N; US$41.49; 2M) and Buy-rated Constellation are in final stage M&A talks. While details are scant as of this writing, we hold the following views: We believe an Exelon/Constellation merger makes sense. Several reasons: a) A deal would free up working capital from Constellation's underlevered balance sheet. Constellation currently has $2B in cash (versus $4.4B in debt), which we view as contingent capital to support Constellation's asset-lite retail business. This capital should be partially freed if merged with an entity with excess physical generation assets, like Exelon's. b) Since both entities are predominantly merchant, overhead synergies would likely largely be captured by shareholders. Both the MIR/RRI and FE/AYE mergers promised ~$100-150 million of annual corporate overhead synergies. This might be a relevant starting point to consider although we would probably reduce this figure to take into account regulated approval/clawback risk as noted below. c) Nuclear operating synergies might be harvested. Our data indicates Constellation's nuclear non-fuel O&M $/MWH is $1.40 more than Exelon's. Applying this to CEG's 16.1 nuclear TWH, this could equate to an additional ~$22 million in operating efficiencies. d) Strictly on consolidated consensus P/E valuation alone, a deal would be accretive as EXC trades at 14.2x 2013 consensus P/E and CEG trades at 11.8x. Risks to a deal: Maryland will likely have influence, since it involves a change in ownership for Baltimore Gas & Electric. For state approval, our understanding is that the state's three approval conditions are that the transaction 1) is in the public interest, 2) regulated customers will receive "certain and direct benefits", and 3) will cause no harm to distribution customers. Given i) these restrictions are openended, ii) Maryland has a relatively long maximum 360 day (180 days + 180 day extension) statutory time limit of review, and iii) a historically hostile relationship between Maryland regulators and merchant generators, we believe Maryland approval will be a large risk factor for any proposed transaction. Maryland's delayed approval process played a role in the eventual demise of a proposed FPL/CEG merger in 2006. Lateral Impacts: Could another competitor make a similar bid? Possibly. Constellation's retail business could match well with any physical power portfolio, particularly in areas like PJM, the Midwest or Texas. Could this spur other deals? We believe a deal may highlight that other PJM East generators look relatively undervalued & underlevered as well in our view, particularly GenOn (GEN.N; US$3.90; 1H).

7

Citigroup Global Markets


Research -- 28 April 2011

Guess? Inc. (GES) Upgrading to Buy, Risk/Reward Favorable; $50 Target Buy/Medium Risk from Hold/Medium Risk Price (27 Apr 11) Target price from US$46.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$41.78 US$50.00 19.7% 1.9% 21.6% US$3,857M

Jeff Black +1-212-816-5257 jeff.black@citi.com

Our Take -- GES is addressing challenges in the US business with a fresh look at

stores from a merchandising perspective via the addition of Nancy Shachtman, a long-time GES veteran. Inventory, which had been high across most of 2010, is expected to move closer to the rate of sales in North America, in our view. Europe appears to be stable and FX could be a tailwind. While we continue to view fullyear guidance as optimistic, we think a guidedown is in the stock here. We view current valuation as attractive and view the risk/reward as favorable. NA Inventory Leaner; New Merchandising Initiatives Planned -- In the US,

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2011 3.14 3.14 39.8 13.3 7.0 na

2012E 3.10 3.10 -1.5 13.5 7.0 3.40

2013E 3.56 3.56 14.9 11.7 6.0 3.87

much will depend on the influence of Ms. Shachtman, a wholesale exec who was named to head the NA division in March 2011. Stores will be merchandised into "destinations" and separated into areas for casual, weekend, and denim versus the existing good, better, best assortment. That, coupled with leaner inventories, should drive improved conversion, faster turns and lower markdown rates. We assume a 1% comp for the year as many of the merchandising initiatives are in the infancy stages. Our Below Consensus Estimate Could Be Conservative -- We view our $3.10,

Price Performance (RIC: GES.N, BB: GES US)

below consensus estimate as conservative. If we assume segment margins move to their respective long-term averages and apply the averages to our 2011 sales assumptions � that would result in a consolidated margin of 13.6%, below our 14.3% assumption for 2011. To hit the long-term average margin, Asia and Licensing margins would need to take a sharp hit, which we don't foresee. Sum of the Parts Implies 6x Multiple for US Retail Business -- If we apply a

12x multiple to the NA Wholesale business; 15x to Europe; 20x to Asia; and 15x to the Licensing business we find that investors are paying 6x 2011E EPS for the NA retail segment, or about $2.80 per share. We think that represents an attractive opportunity.

8

Citigroup Global Markets


Research -- 28 April 2011

Allegheny Technologies Incorporated (ATI) 2011 Less Back-Half Loaded than Previously Believed, Reconciling Quantitative vs Qualitative Guidance Sell/High Risk Price (27 Apr 11) Target price from US$44.00 Expected share price return Expected dividend yield Expected total return Market Cap 3H US$72.74 US$49.00 -32.6% 1.0% -31.6% US$7,196M

Brian Yu, CFA +1-415-951-1830 brian.yu@citi.com

What's New -- We are raising our 2011 estimate to $2.65 from $2.60 after

incorporating standout 1Q results, although we did lower our 2H earnings outlook based on a slower than expected revenue growth. While we see ATI shares fundamentally expensive on our valuation framework, reflecting the sector wide multiple expansion, we are raising our target price to $49/sh from $44/sh after lifting our target P/E multiple to 15x on 2012 estimates of $3.40. Qualitative vs Quantitative � Management reiterated the strong positive demand

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 0.77 0.77 84.1 94.3 25.1 na

2011E 2.65 2.60 243.0 27.5 11.9 3.06

2012E 3.40 3.40 28.5 21.4 9.8 4.34

outlook for their various end markets, base price increases in the pipeline, improving mix as the year progresses, and raw materials cost escalation that favors ATI's internal sponge production. Yet +20% revenue growth for 2011 implies sequentially flat quarterly revenues for the remainder of the year. Nickel - The only major input cost that ATI sees declining in the coming quarters is

Price Performance (RIC: ATI.N, BB: ATI US)

nickel, which the company used 95 mln lbs in 2010. Assuming $12/lb, this translates to cost of $1,140 mln or 26% of our 2011 COGS estimate of $4.3 bln. Assuming nickel prices averaged $2/lb lower, this would translate to costs and offsetting revenue surcharges of $190 mln or 5% of 2010 revenues. Thus we can see a scenario where reported revenues are stable as margin neutral surcharges fall, fully offset by margin enhancing base price increases, volume growth and mix. But if nickel prices do not decline as expected, then it is possible for us to see a repeat of 2010, where the company reported strong 1H Flat-Rolled results that were later impacted by catch-up LIFO inventory charges.

9

Citigroup Global Markets


Research -- 28 April 2011

Boeing Co. (BA) Momentum is Building Across the Skies Buy/High Risk Price (27 Apr 11) Target price from US$84.00 Expected share price return Expected dividend yield Expected total return Market Cap 1H US$76.12 US$90.00 18.2% 2.2% 20.4% US$56,106M

Jason Gursky +1-415-951-1672 jason.gursky@citi.com

Stock Call � We maintain our Buy rating and increase our target price to $90.

Positive momentum over the next several years is likely to be driven by: production rate increases on existing models, imminent first deliveries of development planes, a resilient defense business outlook, declining R&D costs, and accelerating cash generation. Execution is now key, but the risk / reward appears compelling at current share levels. Details on the Quarter and Outlook � The company reported revenues/EPS of

$14.9b/$0.78 vs. Citi at $15.4b/$0.72 and the Street at $15.1b/$0.70. Upside was driven by better than expected margins in BA's Commercial business and lower unallocated expense. The company maintained its $68 - 71b / $3.80 - 4.00 outlook. Key Positives � 1) 787 and 747 development programs progressing well with 90%

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 4.45 4.45 137.7 17.1 10.6 na

2011E 4.13 4.07 -7.2 18.4 11.4 4.08

2012E 5.50 5.42 33.2 13.9 9.0 5.22

Price Performance (RIC: BA.N, BB: BA US)

and 75% of flight testing now complete, respectively. No change to first delivery schedules; 2) Bias appears positive for further production rate increases of the 737, and particularly the 777, where the company is likely to pursue share gains in the face of delays in Airbus' A350 development; 3) The Airbus A320NEO does not appear to be making any material impact on orders for the 737; 4) Defense outlook remains resilient for both margins and revenues; 5) Declines in R&D costs confirmed once again with management suggesting these costs not likely to return to historic highs; 6) No impact to the company's supply chain from events in Japan. Key Negative � The company did not raise its full-year guidance despite handily

beating 1Q11 expectations (management guided that 15% of annual EPS would fall in the quarter vs. the 20% it actually posted). This suggests conservatism given the need to complete two major commercial development projects, but likely leads to a guidance raise later in the year. Valuation � We assign a $90 price target to shares using a 15.5x multiple applied

against our FTM EPS estimate one year from now of $5.80.

10

Citigroup Global Markets


Research -- 28 April 2011

Baker Hughes Inc (BHI)

Robin Shoemaker +1-212-816-3258

Solid First Quarter Beat Leads to Upwardly Revised Earnings robin.shoemaker@citi.com Hold/High Risk Price (27 Apr 11) Target price from US$69.00 Expected share price return Expected dividend yield Expected total return Market Cap 2H US$77.28 US$80.00 3.5% 0.8% 4.3% US$33,560M

BHI Bucks the Downward Trend in International Margins -- In the current

round of earnings reports BHI stands out from the other three major oil service companies for delivering both sequential and year-on-year improvement in international operating margins. Like its competitors, BHI struggled in 2009 and 2010 with steadily eroding profit margins due to falling rig activity and pressure from customers to lower prices on a wide range of oilfield services. BHI is ahead of its competitors in bouncing back. Stronger Earnings Outlook for 2012 and 2013 -- We maintain our above-

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 2.28 2.28 19.2 33.9 13.3 na

2011E 4.10 4.10 79.9 18.8 8.3 3.85

2012E 5.15 4.90 25.6 15.0 7.0 4.97

consensus estimate for 2011 at $4.10 per share and we increase our 2012 and 2013 estimates to $5.15 and $6.10 respectively. We increase our price target on BHI shares to $80 from $69 but we maintain our Hold-High Risk rating based on the stock's recent strong performance. We prefer HAL and WFT among the oil service majors. Restructuring of Operations and Acquisition Synergies Yield Results -- The

Price Performance (RIC: BHI.N, BB: BHI US)

strong earnings that BHI has posted in the past few quarters are the end result of a multi-year shift toward a geomarket focus and a targeting of markets and customers where the company felt it was underrepresented and could gain share without undercutting competitors on pricing. On top of this achievement the acquisition of BJ Services was well timed and, after a long delay in getting government consent for the combination, the integration of the two companies has been swift and successful. The merger benefits are highly visible in the company's booming North America business but already results are tangible in the international markets for integrated services. Making Good Headway with NOC Customers -- In the most recent quarter BHI

had some impressive contract wins with National Oil Company customers. For many years BHI struggled to get traction with these companies and to carve out a niche in countries where NOC's are the predominant or the only customer. Recent contract wins in Russia, China, India, and Saudi Arabia are path-breaking in many important respects. We expect BHI to make more headway in this arena in the years ahead.

11

Citigroup Global Markets


Research -- 28 April 2011

Citrix Systems, Inc. (CTXS) Every Little Bit Helps to Drive Strong Q1 Results; Core XenDesktop License Largely Inline Hold/Medium Risk Price (27 Apr 11) Target price from US$67.00 Expected share price return Expected dividend yield Expected total return Market Cap 2M US$77.83 US$79.00 1.5% 0.0% 1.5% US$14,621M

Walter H Pritchard, CFA +1-415-951-1770 walter.h.pritchard@citi.com

Revenue upside (+3%) driven by desktop solutions -- Total revenue of $491M

was ahead of our $478M estimate (cons. $475M) driven by the desktop business. The two unexpected drivers of upside versus our estimates in Desktop were legacy XenApp revenue, where declines flattened out and consulting revenue, which accelerated. Core XenDesktop license was roughly inline ($43M vs. our estimate of $41M), although management commentary suggested that growth rate could accelerate from Q1 levels as the year progresses. In all, the diversified Citrix revenue base continues to drive the results. Upside drops to the bottom line -- The company showed strong operating

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 2.08 2.08 15.2 37.4 28.7 na

2011E 2.39 2.23 15.1 32.5 22.8 2.32

2012E 2.71 2.48 13.0 28.8 19.5 2.65

leverage (after slowing rapid hiring from 2H10), dropping the majority of the $13M in revenue upside to the bottom line. EPS of $0.50 was ahead of our $0.42, with $0.02 from lower tax rate and an FX gain. Recall that the company had set up an easy Q1 from an EPS perspective with a significant cut to Q1 EPS vs. street back in January. Estimates come up � Stronger consulting and a flatter trajectory of XenApp flows

through our model. Our XenDesktop estimates are relatively unchanged. Our EPS estimates move up with higher revenue and controlled costs. View of the shares -- Commentary around XenDesktop remains positive and

Price Performance (RIC: CTXS.O, BB: CTXS US)

continues to drive investor excitement in shares although financial performance appears driven by other factors this quarter. The breadth of revenue strength is impressive but we believe the XenDesktop opportunity drives the valuation premium here. We look to gain more comfort in acceleration of XenDesktop trends after promotion-induced 2010 and mixed field inputs. We are raising our price target to $79, driven by higher EPS and a +10% move in the software median multiple over the last several months.

12

Citigroup Global Markets


Research -- 28 April 2011

eBay Inc (EBAY) Very Solid Q1 Results � Some Twin City Sparkle � PT To $36 Hold/High Risk Price (27 Apr 11) Target price from US$33.00 Expected share price return Expected dividend yield Expected total return Market Cap 2H US$34.03 US$36.00 5.8% 0.0% 5.8% US$44,156M

Mark S. Mahaney +1-415-951-1744 mark.mahaney@citi.com

Modest Beat & In-Lineish Q1 -- $2.55B Revenue & Non-GAAP EPS of $0.47

came in ahead vs. Citi/Street at $2.49B/$2.48B & $0.46. eBay raised Q2 Midpoint Revenue Guide vs. Street but maintained EPS guidance at Street, and also provided 2011 guide modestly above the Street, `tho acquisitions and more favorable FX were key factors. A bit surprising the 2011 outlook wasn't more robust... Mixed Fundamental Trends -- Organic revenue growth of 14% Y/Y an

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 1.73 1.73 9.6 19.6 10.8 na

2011E 1.95 1.93 12.2 17.5 9.2 1.94

2012E 2.24 2.19 15.2 15.2 7.6 2.18

improvement vs. Q4's 12% Y/Y growth, `tho the comp was 1-point easier. NonGAAP operating margin decreased 120 bps Y/Y to 29.4%, due in part to acquisition/integration costs. The resulting 11% Y/Y Operating Income is Solid, tho not spectacular. PayPal City Continues To Gleam; Marketplace City Showing Some Sparkle �

The PayPal City: 1) 37% ex-FX Y/Y growth for Merchant Services � more traction as the leading Alternative Payments solution; 2) 23% ex-FX Y/Y overall Payments Revenue growth; & 3) 21% Y/Y Segment Profit growth (on a tough comp). The Marketplace City: 1) U.S. GMV (ex-Vehicles) grew 10% Y/Y � very positive surprise; 2) Intl. GMV (ex-Vehicles) grew 6% ex-FX � negative surprise due to Korea/China challenges; & 3) 8% Segment Profit growth � not great, not bad... Modestly Raising Ests & PT � `11 EPS from $1.93 to $1.95. PT increased from

Price Performance (RIC: EBAY.O, BB: EBAY US)

$33 to $36 -- 16X '12 EPS of $2.24. EBAY presents as a Steady-Eddie 12%-14% EPS grower � would seem to warrant an S&P 500-average multiple. Reiterate Hold � On the Positive Side: PayPal is a great growth business; the

eBay U.S. Marketplace is (finally!) improving; and eBay has tons of shareholdertargeted cash (18% of its market cap). On the Negative Side: PayPal faces longterm competitive uncertainty; Structural & Competitive factors are likely to limit eBay Marketplace's long-term growth; and Cash isn't yielding much these days. Risk-Reward @ $34 looks pretty even to us. FD � we said same thing @ $30...

13

Citigroup Global Markets


Research -- 28 April 2011

Fiserv, Inc. (FISV) Mostly Good � Better Growth & Cost-Cutting; Buy FISV Buy/Medium Risk Price (27 Apr 11) Target price from US$70.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$64.39 US$75.00 16.5% 0.0% 16.5% US$9,264M

Ashwin Shirvaikar, CFA +1-212-816-0822 ashwin.shirvaikar@citi.com

Key Takeaway(s) -- The primary message from FISV's earnings was that they

have a great ability to deliver on the full-year EPS estimate range. Revenue growth was better than expectations and reflects a steady improvement in end-market demand. FISV also downsized its workforce by ~4% in non-core areas which, net of re-investment in the business, should contribute to margin performance going forward. However, ongoing investments hurt margins in the quarter leading to a $0.02 EPS miss vs. consensus. Overall, if we take a forward-looking perspective, FISV is headed in the right direction and the performance supports our thesis. Buy FISV. 1Q11 Results -- Total revs were higher, but unit margins were weaker than we

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 4.22 4.22 15.3 15.3 9.1 na

2011E 4.47 4.49 6.0 14.4 8.6 4.49

2012E 5.03 5.03 12.5 12.8 7.7 5.03

were modeling driving the $0.03 miss versus our estimate. Adj. revenues of $982 mil (+3% y/y) were modestly ahead of our $979 mil. Adj. operating margin was 28.4%, vs. our 29.2% est. Adj. non-GAAP EPS were $1.02 vs. our $1.05 and consensus $1.04. FCF generation was strong at $244 mil (+8% y/y) and FISV stepped up its share repurchase activity buying back 4.3 mil shares for $261 mil. FISV also kept its 2011 guidance. Metrics were Solid -- Bill pay transactions were up 8% y/y (vs. 6% in 1Q10), e-Bill

Price Performance (RIC: FISV.O, BB: FISV US)

transactions grew 3% and Debit/EFT transactions grew 21%. Good metrics combined with recent client wins/expansions and a solid pipeline bode well for 2011 top-line growth, particularly in the back half. Reducing 2011 EPS Slightly; Raising Target Price -- We are lowering our 2011

non-GAAP EPS estimate to $4.47 from $4.49, as shown in the table below. We estimate higher 2011 top-line growth (partly helped by acquisitions) to be offset by lower margins (partly hurt by growth investments). Our 2012 estimate of $5.03 remains unchanged, and our 2013 estimate is raised by a penny. We raised our target price on FISV to $75 from $70, reflecting the push out of our P/E derived target price basis year to 2012.

14

Citigroup Global Markets


Research -- 28 April 2011

FMC Technologies (FTI) Raising Price Target on Solid Long-Term Outlook Buy/Medium Risk Price (27 Apr 11) Target price from US$55.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$46.48 US$57.00 22.6% 0.0% 22.6% US$11,168M

Robin Shoemaker +1-212-816-3258 robin.shoemaker@citi.com

Lower-Than-Expected EPS and Revenue -- FTI reported lower-than-expected

1Q11 EPS ($0.32 vs. our $0.38 estimate and the $0.37 consensus estimates) and revenues ($1,082M vs. our $1,130M estimate and the $1,145M consensus estimate). Lower revenues and declining margins in Energy Production Systems were the main drivers of the earnings miss despite a solid performance in Energy Processing Systems. Subsea Order Rate Fairly Strong -- The subsea order rate of $940M came in

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 1.53 1.53 6.6 30.3 17.0 na

2011E 1.70 1.70 11.0 27.3 15.3 1.70

2012E 2.20 2.07 29.3 21.1 11.2 2.10

lower than our $1,250M estimate, but given that no major projects were awarded in the quarter, the nearly $1B in bookings comprised of only small orders and aftermarket sales represented a fairly strong number, in our opinion. The projects came from a diverse set of customers for work in Brazil, Indonesia, Canada, and Norway. Energy Production Systems Disappointed -- Energy Production Systems

Price Performance (RIC: FTI.N, BB: FTI US)

revenues were down 2% sequentially. Operating margins declined from 12.1% in 4Q10 to 9.6% in 1Q11. A higher mix of early-stage projects in which a significant amount of the work consists of design engineering contributed to the declines. Percentage-of-completion accounting only recognizes 10%-15% of the total project revenues and costs in the initial labor-intensive phase, but segment margins should begin to recover in 2H11. Energy Processing Systems Outlook Improving -- Energy Processing Systems

revenues were $226M, up 1% sequentially, with operating margins of 19.3% vs. our 18.0% estimate. FTI remains optimistic on the business, and the 10 named subsea processing projects over the next two years is double the number from last year. Raising Estimates and Price Target -- We have raised our EPS estimates

slightly in 2012 and 2013 to reflect strengthening deepwater economics that we believe will continue to support a subsea order rate of more than $1B a quarter in 2011 and contribute to meaningful revenue growth in 2012 and 2013. We reiterate our Buy rating and raise our target price to $57 from $55 on the upwardly revised earnings.

15

Citigroup Global Markets


Research -- 28 April 2011

General Dynamics Corp. (GD) 1Q11 Beats on Margins; G650 Still the Wild Card for 2011 Buy/High Risk Price (27 Apr 11) Target price from US$88.00 Expected share price return Expected dividend yield Expected total return Market Cap 1H US$72.72 US$91.00 25.1% 2.6% 27.7% US$27,151M

Jason Gursky +1-415-951-1672 jason.gursky@citi.com

Stock Call � We remain buyers of GD despite the headwinds from the tragic G650

test plane crash in early April (for more see Implications of the G650 Test Flight Crash). GD isn't adjusting guidance while the NTSB investigation continues, but we estimate a 6 month delay from planned 2H11 deliveries. Still, we maintain our conviction in the large-cabin bizjet market's health and our view that shares are likely to re-rate higher as the company's aerospace segment comprises a greater portion of earnings. Key Positives -- 1) Held segment guidance despite budget pressures in 1Q;

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 6.82 6.82 10.2 10.7 6.3 na

2011E 6.98 6.91 2.4 10.4 6.1 7.14

2012E 7.75 7.70 11.0 9.4 5.5 7.65

creates more conviction around 2011 targets; 2) Large/mid bizjet market improving, with orders and backlog up sequentially, especially in Asia-Pac including China (70% of 1Q11 orders were intl.); 3) Bizjet services demand up (posting strongest service revenues ever) with Gulfstream flight hours approaching 2008 levels. Positive market dynamics create potential upside to guidance of 78 450/550 deliveries in 2011; 4) FY11 budget resolution removes overhang from Marine's submarine ramp; we now see a flat 2011 in line with guidance vs. our previous estimate of down 1.5% y/y. Key Negatives -- 1) Held 2011 EPS guidance of $7.00 � 7.10 assuming G650

Price Performance (RIC: GD.N, BB: GD US)

stays on schedule despite the test plane crash (12 deliveries in 2H11); our estimates still assume a 6-month delay; 2) Combat still seeing weakness (down 2% y/y vs. Citi est. of flat y/y); GD says it's timing but we see some downside to guidance of $9b sales for 2011 (Citi est. $8.86b vs. $8.94 previous). Growing reliance on international (28% in 1Q11 vs. ~24% in 1Q10) exposes GD to weak Euro budgets and Middle East instability; 3) Record Aero margins of 17% (highest since 4Q08, beating Citi est. by 170 bps) partly driven by liquidated damages (~100 bps); 4) Through-put issues at Jet Aviation's completions business requires rightsizing given reduced OEM demand. Valuation & Raised Price Target -- We apply a blended defense/commercial

multiple of 11.4x (vs. 10-yr avg. of 14x) to our FTM EPS estimate of $7.98 twelve months from now to arrive at our $91 price target. The mild PT raise to $91 (from $88) is from rolling our estimates forward one quarter.

16

Citigroup Global Markets


Research -- 28 April 2011

Corning Incorporated (GLW)

Jim Suva, CPA +1-415-951-1703

Solid Print & Guide Across All Segments; Q2 Glass Inventory jim.suva@citi.com Build in the Works Keeps Us at a Hold Rating Hold/High Risk Price (27 Apr 11) Target price from US$22.50 Expected share price return Expected dividend yield Expected total return Market Cap 2H US$20.68 US$24.50 18.5% 1.0% 19.4% US$32,381M

Solid Print & Guidance -- 1Q Results of $1.92bln/$0.47 (with a $0.01 benefit

from lower than guided tax rate) were better than consensus $1.83bln/$0.44, driven primarily by upside in Display (volumes increased in the upper single digit percent range vs. mgt's mid single digit guide, w/more moderate ASP declines vs. Dec qtr), but we note that other segment results were strong across the board. Outlook generally positive for glass in historically difficult 2Q, but mix of production changing with low- to mid- teen sequential declines in GLW wholly-owned glass volumes, offset by comparable increases at SCP. Guidance for non-Display businesses also strong. Inventory Build a Risk -- Although GLW wholly-owned glass volume sales are

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 2.07 2.07 53.7 10.0 10.9 na

2011E 2.01 1.87 -3.0 10.3 8.7 2.01

2012E 2.20 2.06 9.6 9.4 7.5 2.19

expected to be down q/q in June, mgt will maintain production at current levels & build inventory (as well as help bolster gross margins). While this strategy allows GLW to build inventory (which GLW has been unable to do) & potentially gain back some lost market share, we nonetheless see this as somewhat risky given lack of visibility regarding 2H demand. Our concern is that if demand doesn't materialize, industry could be thrown into over-supply with risk of production shut-downs & pricing pressure. Gorilla LCD TV Adoption Unclear -- LCD TV cover glass is expected to account

Price Performance (RIC: GLW.N, BB: GLW US)

for "several million" out of $1bln goal. In our view, Gorilla LCD TV adoption hinges on consumer willingness to pay premium for LCD TV that doesn't deliver better picture but is almost entirely about aesthetics. Given industry experience w/LED TV (slow uptake despite offering materially better picture due to price premium) we are cautious. Stock Call -- Raise target to $24.50, maintain Hold/High Risk. Glass market

seems healthy overall, but results/guide don't change our longer term view of LCD glass deceleration over next couple of years as sell-in penetration rates approach 100%. Glass market could see acceleration from: 1) LCD TV replacement cycle, but we don't see that until 2013/14; 2) large new application for glass (architectural, solar), but no tangible signs of this currently. We're encouraged by strong performance of non-Display segments, but enthusiasm for material contribution from these segments is tempered by fact that glass (Display + SCP) accounts for 85% of net income/EPS.

17

Citigroup Global Markets


Research -- 28 April 2011

Nabors Industries (NBR) Maintaining EPS Estimate of $1.80 for 2011 despite 1Q Miss Buy/High Risk Price (27 Apr 11) Target price from US$36.00 Expected share price return Expected dividend yield Expected total return Market Cap 1H US$30.65 US$37.00 20.7% 0.0% 20.7% US$8,770M

Robin Shoemaker +1-212-816-3258 robin.shoemaker@citi.com

Adverse Weather and Taxes Lead to Slight EPS Miss -- Revenue growth was

strong. We expected total company revenues to be down from 4Q10 to 1Q11, but instead they rose 6%. EBITDA of $421 million was in line with our expectation but EPS of $0.29 in 1Q11 was below our expectation of $0.35. Depreciation was slightly higher than our estimate and the tax rate was 31% versus our expectation of 20%. NBR might have met or beat expectations without the effect of adverse weather in the U.S. Challenges in Pressure Pumping Offset Well Servicing Strength -- Canada

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 1.13 1.13 -23.8 27.0 8.3 na

2011E 1.80 1.80 58.5 17.0 6.5 1.77

2012E 2.50 2.50 39.0 12.3 5.3 2.42

and U.S. land well servicing had stronger revenues than we were expecting and both of these businesses appear likely to strengthen through the year (excluding the seasonal Canadian decline that occurs in 2Q). Pressure pumping revenues were flat compared with 4Q10 and margins were down. The pressure pumping business was impacted by weather delays and cost increases during the first quarter. Nabors is not deploying new fracturing spreads in 2011 as fast as their business plan called for but it still expects to grow fracturing capacity in 2011 from 14 spreads at the start of the year to 23. Expect a Robust Second Half of 2011 -- After a sluggish second quarter, in

Price Performance (RIC: NBR.N, BB: NBR US)

which weak international operations and the seasonal downturn in Canada will take their toll on revenues and margins, Nabors should deliver stronger performance in the second half of 2011. Increases in margins are expected in U.S. land drilling, U.S. pressure pumping, and U.S. land well servicing. Also, the beginnings of a turnaround in international land drilling should be evident late in the year. Reiterate Buy -- We have raised our price target to $37/share on valuation period

roll forward. We would buy Nabors on any weakness related to the belowconsensus earnings report for the first quarter. The company is extremely well positioned in the highest growth markets for oil services worldwide. The drilling contractors typically lag the major service companies in the early stages of an upturn, but they can and probably will catch up by the second half of this year. We maintain our Buy-High Risk rating.

18

Citigroup Global Markets


Research -- 28 April 2011

Northrop Grumman Corp. (NOC) Putting its Money Where its Mouth is, NOC Readies to Rev Repos Buy/High Risk Price (27 Apr 11) Target price from US$76.00 Expected share price return Expected dividend yield Expected total return Market Cap 1H US$62.90 US$79.00 25.6% 3.2% 28.8% US$18,401M

Jason Gursky +1-415-951-1672 jason.gursky@citi.com

Stock Call -- We are buyers of NOC after the company beat 1Q11 consensus

EPS of $1.56 by $0.11 driven by margins and assorted below the line items (a clean beat of ~$0.06). More importantly, NOC raised its share repo authorization, boosted its dividend, and raised 2011 EPS guidance based on lower share count and better margins. Our PT increases to $79 based on rolling our estimates forward a quarter. Key Positives � 1) NOC announced its 8 consecutive annual dividend raise (to th

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 6.77 6.77 39.1 9.3 6.3 na

2011E 6.70 6.66 -1.0 9.4 6.1 6.68

2012E 7.36 7.20 9.9 8.5 5.5 7.10

$0.50) and an increase to its repurchase authorization (to $4b including the $1.4b contribution from the shipbuilding spin). In our view, these moves reflect confidence in the portfolio even after 19% of the company (by sales) was spun off in March. We now see $1b in buybacks in both 2012 and 2013 given these dynamics (vs. previous estimates of ~$500m per year); 2) 2011 EPS guidance up $0.10 on each end to $6.50 - 6.70 on improved share count assumption and better program performance; 3) Segment margins up 50 bps y/y ex. ships, reflecting continued improvements in program performance which is still the company's primary focus (vs. the top line); 4) Aero backlog down 3% q/q, but still expect large awards (JSF LRIP 4 and F-18). Key Negatives � 1) Continued portfolio shaping creates sales headwind, with 2011

Price Performance (RIC: NOC.N, BB: NOC US)

sales still expected to fall 2%; 2) Performance improvements have their limits with management indicating that 2011 margin guidance is a good indicator for sustainable levels, although company will work to exceed those goals; 3) Sales flat y/y even excluding the hole created by the reclassification of the Nevada Test Site (NSTec) despite other primes being able to generate y/y growth in 1Q; 4) Disappointing to see JSF LRIP 4 contract still not signed, even though LMT signed theirs with DoD last fall, signaling increased scrutiny on affordability across the defense value chain. Valuation -- Shares now trade at ~9x FTM EPS. We believe NOC should trade in

line with the defense industry's historical avg. of 10.5x (75% discount to S&P500 multiple of 14x), yielding a PT of $79 when applied to our FTM EPS est. of $7.54 a year from now.

19

Citigroup Global Markets


Research -- 28 April 2011

Norfolk Southern Corp. (NSC) Tops our Street High Estimate, Raise Estimates and Price Target Buy/Medium Risk Price (27 Apr 11) Target price from US$76.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$68.41 US$80.00 16.9% 2.3% 19.3% US$25,633M

Christian Wetherbee +1-212-816-9051 christian.wetherbee@citi.com

Our Take -- Norfolk Southern reported adjusted 1Q11 results that were a penny

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 3.98 3.98 44.4 17.2 8.4 na

2011E 4.85 4.75 21.9 14.1 7.4 4.66

2012E 5.75 5.55 18.5 11.9 6.7 5.37

above our high on the Street EPS estimate of $0.99 (consensus was $0.90). NS posted industry best volume growth, as the freight the company highlighted it was preparing for in 4Q is clearly hitting the network. Yields were much better than expected with the implied core pricing level in 1Q11 accelerating from weakness in 2H10. Expenses were still a bit heavy due to fuel and the continued hiring of conductor trainees, but a modest amount of operating leverage was realized, particularly considering weather caused NS to miss $25-$30 million in revenues (half should be made up in 2Q) and its fuel surcharge lag cost $40 million. We reiterate our Buy. With Norfolk's resource ramp-up approaching a steadier trend line coupled with improving core pricing, we are becoming incrementally more positive with our estimates and price target. Raising EPS Estimates and Price Target to $80 -- We are increasing our 2011,

Price Performance (RIC: NSC.N, BB: NSC US)

2012, and 2013 EPS estimates to $4.85, $5.75, and $6.50, from $4.75, $5.55, and $6.25, respectively. Our estimate changes are primarily driven by our increased target for core pricing in 2011, which rises to +4% from +3%, but could be conservative as the company posted a level greater than 4% in 1Q and expects transportation capacity tightness to drive incremental pricing opportunity on the 32% of its revenues still open for repricing this year. In addition, we expect cost per employee to decline sequentially as new (and cheaper) trainees enter the workforce, replacing more expensive existing employee overtime hours. We are increasing our price target to $80 from $76, as we are maintaining our 16x target multiple on our increased 2011 EPS estimate. Adjusted 1Q11 EPS of $1.00 -- NS posted adjusted 1Q11 EPS of $1.00, up 37%

YOY and a penny above our $0.99 target, with both our target and adjusted EPS excluding $58 million in pre-tax charges ($0.10/share) related to an unfavorable insurance arbitration ruling. Revenues were $149 million above our target with volumes up 8.1% (vs. our +7.3) and yields up 8.3% (vs. our +2.9% target), but were offset by higher than expected operating expense. As a result, operating income was $13 million below our target ($0.02/share), with the operating shortfall made up below the line, primarily by higher other income ($0.02/share) and fewer shares outstanding ($0.01/share).

20

Citigroup Global Markets


Research -- 28 April 2011

Parker Hannifin Corp (PH) Leverage To Cap Spend Cycle + B/S Firepower + Valuation; Buy Buy/Medium Risk Price (27 Apr 11) Target price from US$110.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$93.48 US$112.00 19.8% 1.8% 21.6% US$15,133M

Timothy Thein, CFA +1-212-816-6706 timothy.thein@citi.com

D�j� vu From January -- Similar to last quarter, high expectations plus strong

stock outperformance in to results is met with swift sell-off as concerns (we think over-blown) around incremental margin profile cloud a solid underlying story / outlook. Once again, we recommend using today's weakness to add to/ build positions in PH with the stock trading at 11.6x our new calendar `12 EPS est (6.4x EBITDA) with upside as capital deployment levers grow (our model shows net cash balance by YE 12). Tgt to $112. Raising Estimates -- Our full-year FY11 EPS estimate rises by $0.15 to $6.35

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 3.40 3.40 1.7 27.5 13.6 na

2011E 6.35 6.20 87.0 14.7 8.6 6.18

2012E 7.70 7.40 21.1 12.1 6.9 7.16

Price Performance (RIC: PH.N, BB: PH US)

entirely to reflect higher 3Q operating results. Despite higher levels exiting 3Q, our 4Q est is essentially unchanged as we incorporate ~$0.03/share impact from Japan-related disruptions (which we assume carries in to FY12), $0.05/share in restructuring charges pushed-out from 3Q, and lower Aero margin assumptions (similar to ETN, we see program delays / cost issues stalling recovery in profitability, not altering longer-term margin upside). We raise our out-year ests to reflect the higher overall operating base in FY11, faster assumed Int'l growth, and our view that price/cost parity is gradually reached. Our FY12 est. of $7.70 incorporates 21% incremental margins, and assumes excess cash builds on the balance sheet (earning next to nothing). Mgmt commentary around growing M&A pipeline / eagerness to do the right deals (even suggesting +$1BB in total), plus Fed's signaling of continued low rates, suggests acquisitions could play larger role near-term. 5th consecutive qtrly dividend boost also a positive signal. Third Quarter Results Reflect Strength in Global Capex Cycle -- 3Q operating

EPS of $1.68 topped our estimate by $0.18, with $0.12/share coming from the combined operating segments (Industrial Int'l the stand-out positive on 24% organic growth), and the balance from higher "other" income. Orders up 24% yr/yr (and up sequentially). PH Rated Buy -- We see PH as ideally- positioned to leverage growth in global

capital and investment spending, which we think continues to strengthen in to calendar `12. Structural ROIC imprvmt (margin growth + improved asset efficiency via capacity re-alignment) should help to drive higher normalized valuation and further share upside.

21

Citigroup Global Markets


Research -- 28 April 2011

PPL Corp (PPL) Adjusting Outlook Post Central Networks Close; Target Up To $28 Hold/Medium Risk Price (26 Apr 11) Target price from US$25.00 Expected share price return Expected dividend yield Expected total return Market Cap 2M US$27.13 US$28.00 3.2% 5.2% 8.4% US$15,331M

Brian Chin +1-212-816-2861 brian.chin@citi.com

We are lifting our target to $28 from $25. We have adjusted our financial

forecast to reflect 1) PPL Corp's recently closed acquisition of UK electric distributor Central Networks, 2) marking to market for a recent upturn in forward commodity prices since our prior PPL forecast update, and 3) reduction to our long term capacity price and climate change legislation assumptions for net present value. Our revised estimates continue to include expected synergies from the acquisition. In addition, we have fine tuned minor adjustments to our modeling and quarterly allocation assumptions. The net effect of these adjustments has improved our EPS forecast, resulting in an uplift to our target. The business mix is becoming more stable. Based on our pro forma model, we

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 2.57 2.57 34.7 10.6 9.4 na

2011E 2.51 2.47 -2.4 10.8 7.8 2.62

2012E 2.51 2.16 0.2 10.8 8.0 2.43

see approximately 75% of the company's earnings coming from relatively stable regulated earnings in the US and UK by 2013. The management team has, through acquisitions, continued to bolster the regulated business mix of the company. This in turn should start to improve the effective consolidated multiple applied to the entity (all else being equal) and should also serve to continue to incrementally derisk volatility in the shares going forward. Upcoming events: PJM's capacity auction results will be released on 5/13/11, and

Price Performance (RIC: PPL.N, BB: PPL US)

we generally expect more positive surprise in PJM East than in PJM West; please see our last commentary at https://www.citigroupgeo.com/pdf/SNA77057.pdf for more details. In short, we expect higher prices due to possible coal plant shutdowns stemming from EPA's newly proposed regulations covering power plants. As we noted in that report, entities such as GEN, CEG, PEG, CPN and PPL should benefit if PJM East prices surprise to the upside.

22

Citigroup Global Markets


Research -- 28 April 2011

Praxair Inc (PX) Pullback Provides Entry Point; Rising Backlog Proves New Project Activity is Picking Up; Buy Buy/Medium Risk Price (27 Apr 11) Target price from US$112.00 Expected share price return Expected dividend yield Expected total return Market Cap 1M US$106.10 US$120.00 13.1% 2.1% 15.2% US$32,212M

P.J. Juvekar +1-212-816-3097 pj.juvekar@citi.com

Buy the Dip -- PX reported a strong operational beat in 1Q and the increase in the

company's large project backlog (to $2.5B) is incrementally positive as it demonstrates the pickup in new project awards. Encouragingly, capacity utilization rose to 82% in North America and should drive incremental profits due to PX's strong operating leverage as well as higher pricing. PX shares have been weak around quarterly earnings over the past several quarters, but each dip has proved to be a good buying opportunity. We believe today's 2% pullback provides such an opportunity. Rising Backlog Supportive of EPS Growth -- PX added an impressive $500mm

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 4.74 4.74 18.7 22.4 12.2 na

2011E 5.43 5.35 14.4 19.5 11.2 5.41

2012E 6.34 6.19 16.7 16.7 10.0 6.14

of on-site business to its backlog in 1Q, bringing the project backlog to $2.5B compared to $2.2B last quarter. This is further evidence that new project signings are on the rise and is supportive of EPS growth in 2012 and 2013 given the 18-24 month lag to build a new gas plant. We think industrial gas companies are good later cycle plays as project startups should accelerate over the next 2-3 years. Besides numerous contract wins in metals and electronics over the past 6 months, PX recently signed a contract to supply gases to a large integrated chemical complex in China for startup in 2014. Emerging Market Growth Remains Strong -- Volumes rose 10% Y/Y in South

Price Performance (RIC: PX.N, BB: PX US)

America, the fifth consecutive quarter of at/near double-digit volume growth for the region. Growth was also strong in Asia (+14%), augmented by over 20% volume growth in the merchant business. In addition to strong volume growth, pricing continues to be a tailwind in Asia on continued momentum in argon pricing due to tight supply. Elevated argon prices are also incrementally positive for the North American merchant business. We expect prices to gradually rise as operating rates improve. TP to $120, Reiterate Buy -- We have raised EPS estimates for 2011-13 due to

higher expected profits in North and South America. We continue to like PX due to its strong management team, disciplined approach to growth in emerging markets, and its participation in the resurgence of new project opportunities.

23

Citigroup Global Markets


Research -- 28 April 2011

Range Resources Corp (RRC) Q1'11 Wrap-Up: Looking Past Barnett Sale; Focus on Marcellus Sell/High Risk Price (27 Apr 11) Target price from US$44.00 Expected share price return Expected dividend yield Expected total return Market Cap 3H US$53.90 US$48.00 -10.9% 0.2% -10.7% US$8,658M

Robert S Morris +1-212-816-3139 robert.s.morris@citi.com th

Q1'11 Bottom Line � After last week reporting Q1'11 production (see our April 19

note: Range Resources Corp (RRC) - Q1'11 Ops Update � Output In Line; Although Liquids Disappoint), Range yesterday reported bottom line results for the period (see our April 26th note: Range Resources Corp (RRC) - Q1 Results Slightly Better Than Expected on Lower Costs), which were slightly ahead of expectations due primarily to lower expenses. Production Still Expected to Increase 10% This Year � Despite the Barnett

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 0.56 0.56 -45.9 96.0 15.6 na

2011E 1.15 0.93 105.5 46.7 15.4 1.00

2012E 2.05 1.84 77.3 26.3 9.5 1.51

shale disposition, which accounted for ~20%, or ~110 MMcfe/d, of the company's total production in the first quarter. This 10% increase should entail a ~5% rise in natural gas output along with a ~29% increase in oil/liquids volumes. On an organic basis, or pro forma excluding the Barnett shale, production is set to post 35% growth this year. Marcellus Is Growth Engine � Marcellus shale production is set to account for

Price Performance (RIC: RRC.N, BB: RRC US)

essentially all of RRC's growth this year and should roughly double from the 2010 exit rate of 200 MMcfe/d to 400 MMcfe/d. Excluding the Marcellus and Barnett, we expect production to remain roughly flat this year vs. 2010. Of the company's total current 20-rig drilling program, 13 rigs are operating in the Marcellus and the play is expected to capture 86% of the 2011 capital budget. Nine of the rigs are drilling in the liquids-rich southwestern part of the play and the remaining four in the northeast. Range plans to drill a total of 195 wells here in 2011, 23 of which will be drilled in the northeast area. Upper Devonian; Midcontinent � Range's first two Upper Devonian wells in the

Marcellus posted encouraging results, with an average IP rate of 3.8 MMcfe/d. Also, with a four-rig program, Range continues to assess various Midcontinent plays. Funded through 2013 � The closing of the sale of the company's Barnett shale

assets for ~$900 million remains on track for later this week and should essentially bridge Range's funding gap between now and 2013, when the company should become cash flow positive. Fine Tuning Estimates � We have adjusted our estimates to include the effects of

new hedges, and updated production and cost guidance. Our 2011 EPS/CFPS estimates go to $1.15/$4.65 from $0.93/$4.08, for 2012 to $2.05/$6.82 from $1.84/$6.24, and for 2013 to $2.21/$7.45 from $2.21/$7.21. Our price target increases to $48 from $44.

24

Citigroup Global Markets


Research -- 28 April 2011

WellPoint (WLP)

Carl McDonald, CFA +1-617-247-6312

Hold/Low Risk Price (27 Apr 11) Target price from US$70.00 Expected share price return Expected dividend yield Expected total return Market Cap

Those Who Win A War Rarely Make Good Peace, And Those carl.mcdonald@citi.com That Make Good Peace Would Never Have Won The War 1Q11 EPS WellPoint didn't have much to support its view that utilization will rise over 2L US$74.85 US$82.00

9.6% 0.0% 9.6% US$27,746M

the rest of the year -- The company talked a little bit about bad weather in the first quarter (without any quantification), and some about higher drug trend (the smallest contributor to medical expense), but there wasn't a lot of concrete evidence offered. This suggests WellPoint's loss ratio guidance for the year is too high, and that meaningful EPS upside is likely, as every 50 basis point change in the MLR impacts earnings by almost $0.50 per share. The focus for the next few months will likely be on lower volumes and the

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2010 6.71 6.71 10.2 11.2 3.4 na

2011E 7.40 6.65 10.3 10.1 2.5 6.62

2012E 7.85 7.10 6.0 9.5 0.2 7.34

potential for additional EPS upside -- However, the longer-term question is the sustainability of current margins. Plans make a big deal about pricing to cost trend, but for the last two years, consumers have paid premium rate increases well above cost trends. Historically, the competitive environment has corrected these imbalances, but to date, there hasn't been a lot of interest by plans (either public or non-profit) in factoring the lower trend experience into pricing. The improvement in utilization has occurred across the board, so both more and

Price Performance (RIC: WLP.N, BB: WLP US)

less profitable markets have been impacted similarly -- In the more profitable markets, the upside translates to minimum MLR rebates, but there are enough markets above the MLR threshold where WellPoint can still realize significant margin expansion. Of course, if the cycle ever turns, this quarter illustrates why minimum MLRs don't provide much margin protection, since there are so many markets unaffected by minimum MLRs. Raising earnings projections and target price -- We're now estimating 2011

earnings of $7.40 per share, compared with $6.65 previously, and company guidance of at least $6.60 per share, and our target price rises from $70 to $82.

25

Citigroup Global Markets


Research -- 28 April 2011

Xilinx Inc (XLNX) Showcasing Good PLD Industry; We're Not Yet Buyers of 28nm Story Hold/High Risk Price (27 Apr 11) Target price from US$35.00 Expected share price return Expected dividend yield Expected total return Market Cap 2H US$32.86 US$36.00 9.6% 2.3% 11.9% US$8,578M

Glen Yeung +1-415-951-1885 glen.yeung@citi.com

Reports Slightly Ahead. -- Xilinx reported 4Q11 (Mar) revenues above

consensus ($588M vs. $580M) and in the upper-half of their guidance; recall Xilinx left their guidance unchanged on their 3/14 update. Gross margin was similarly above consensus (65.3% vs. 64.9%), albeit the benefit was offset by above consensus operating expenses. Ultimately helped by substantially lower taxes (a one-time benefit from a change in geographic investment profile), EPS beat consensus ($0.59 vs. $0.52). Xilinx guided 1Q12 (Jun) sales above consensus (0%-4% growth q/q) and with the benefit of lower taxes (16% for 2012 vs. 21%), we anticipate consensus estimates will rise; ours do. Commentary Mirrors Supply Chain/Competition. -- In general, Xilinx's

EPS new(US$) EPS Old(US$) EPS Growth P/E EV/EBITDA Consensus Data

2011 2.39 2.32 85.5 13.7 7.5 2.39

2012E 2.25 2.16 -5.7 14.6 7.3 2.08

2013E 2.76 2.62 22.4 11.9 5.4 2.37

commentary was much like that of Altera. Growth is anticipated in wireless infrastructure (led by China Mobile's Phase 5 & ongoing LTE deployments), although details of other segments differ from Altera. Meanwhile, outlooks from distributors (Avnet and Arrow) lend comfort to Xilinx's optimistic view. As have other chip companies, Xilinx indicated the Japan earthquake is not expected to have a material impact on their business. Continued Focus on 28nm. -- Xilinx continued to highlight its opportunity at

Price Performance (RIC: XLNX.O, BB: XLNX US)

28nm. As we have written in the past, there are 2 main differences in Xilinx's approach: 1) Xilinx has chosen to work with TSMC for the first time on their 28HPL (high performance, low power) process technology, in contrast to Altera's choice of TSMC's 28HP process (Altera has a 17-year relationship with TSMC); and, 2) Xilinx, in an effort to beat Altera to market and regain share, is taking a "unified" approach by using the same architecture across all their products, while Altera uses distinct architectures for each. Xilinx is also implementing Stacked Silicon Interconnect (SSI) technology in their high-end Virtex 7. While we do not wish to discount Xilinx's assertions, we believe it is too early to determine 28nm winners, noting that meaningful revenue is not until 2013. (Continued below...)

26

Citigroup Global Markets


Research -- 28 April 2011

Coal MLPs: Thermal Fundamentals Still Challenged, Limited Upside from Exports Hold ARLP, AHGP, & OXF; Sell NRP

John K Tysseland +1-212-816-1442 john.tysseland@citi.com

Our View -- In the last six months, Bloomberg's C-Corp Coal index is up more

than 45% and coal MLP's have followed this trend, outperforming the CITIMLP index by ~17%. As a result, forward multiples have expanded as investors appear to be counting on a more bullish view of future cash flows. While international markets for both met and thermal coal remain a bright spot for some domestic producers, the domestic thermal market is likely to remain constrained by low natural gas prices and natural gas generation capacity that continues to gain market share over coal fired generation capacity. As a result, domestic coal producers are unlikely to have a significant amount of pricing power on future contract negotiations with generators, which means overall margins are likely to remain under pressure. Shifting Production Likely to Continue -- In the current environment, shifting

domestic production is likely to continue as rising costs push some producers out of the market. The most at risk in our view include thermal coal producers in Central Appalachia (CAPP) that face structural production declines due to lower grades and stricter regulation, while lower cost producers in the Illinois basin (IB) and Northern Appalachia (NAPP) are likely to gain market share. Positioning Coal MLPs -- Among the coal MLPs that we cover, we view ARLP

and its general partner AHGP as the best positioned to gain market share and grow production in a margin constrained environment. Management is targeting top tier distribution growth and has been successful in growing the distribution by nearly 13% over the last 12-months. Longer term, OXF appears well positioned due its low cost surface mining operations in the NAPP and IB regions, but has been impacted by operational disruptions that management expects to subside in the first half of 2011. NRP has benefitted the most from the recent strength in the international met and thermal coal markets, yet we still are forecasting the partnership to barely cover distributions in 2011. As a result, we believe the risk/reward for investors at current levels remains to the downside. Ratings & Target Prices -- We are maintaining our ratings for all the four coal

MLPs as shown below, while moving up the target prices to reflect the recent strength in equities primarily due to the higher relative valuations of coal c-corps.

27

Citigroup Global Markets


Research -- 28 April 2011

Large Cap Banks: Updating Our Most & Least Preferred Ideas Keith Horowitz, CFA Continue to Favor GS over MS; Introducing Overweight USB/Underweight KEY +1-212-816-3033 keith.horowitz@citi.com

We continue to favor GS over MS -- We extend our relative call for GS as a Most

Preferred stock and MS as a Least Preferred stock relative to our fundamental analyst coverage for the next 3 Months. Our original call was made on 20 Jan 2011. Adding USB as a Most Preferred Call vs Key as Least Preferred --

Furthermore, we name USB as a Most Preferred stock and KEY as a Least Preferred stock relative to our fundamental analyst coverage for the next 3 Months, replacing PNC as a Most Preferred stock and CMA as a Least Preferred stock, both of which we selected on 20 Jan 2011. Goldman Sachs Catalyst and Thesis -- GS is a strong franchise trading at

lower-than-deserved P/TBV multiple � our $200 target implies 1.5x our 4Q11 est TBV vs a 5-year avg of 2.8x. We expect GS to outperform as regulatory and capital uncertainties lift, and the firm begins to redeploy significant excess capital. MS Catalyst and Thesis -- Despite strong M&A and equities businesses, MS

significantly lags peers in FICC trading and we see ROTEs in the 10% area over the next 2 yrs, driving its ~1x TBV multiple. Despite improved capital from pending MUFG conversion, we see MS as range-bound given we see downside to '11 & '12 EPS est's. USB Catalyst and Thesis -- USB's growth outlook (given recent investments) is

the best in our sector & we see the stock as cheap given a best-in-class 20% ROTE & the potential to hit 25% in next 3 yrs. Capital redeployment (divs, buybacks or acquisitions) will also exceed peers given $8-10B of excess capital generated thru 2013. KEY Catalyst and Thesis -- KEY is fundamentally challenged given limited

options to overcome its low earnings growth profile (driven by a weaker footprint and lack of CRE/construction lending as a loan growth avenue). Despite strong excess capital, we see minimal returns to shareowners near-term, and see an expensive acquisition as a risk.

28

Citigroup Global Markets


Research -- 28 April 2011

CIRA Conference Call Recap A Deep Dive into Automotive Aftermarket Supply Chain DynamicsTake-Aways From Citi's Proprietary Industry Call

Kate McShane, CFA +1-212-816-3537 kate.mcshane@citi.com

Call with John Giangrande, Senior Account Executive at Fortna � We hosted a

call today with John Giangrande focusing on supply chain issues & opportunities for the automotive aftermarket retailers. The replay can be accessed by dialing (800) 642 1687. The pass code is 62242230. Parts Proliferation & Global Sourcing Challenges � Parts proliferation has been

a mounting challenge for aftermarket retailers, both 1) from a breadth of inventory standpoint and 2) a sourcing perspective. The advent of hybrid and electric vehicles is likely to increase the challenges associated with carrying increasingly broad SKU arrays. As manufacturers and retailers are looking overseas for additional sources of product, a major consideration has been in significant increase in transit times. Although the product is less expensive (vs. domestically produced inventory), direct sourcing typically adds +30 days to transport times and impacts responsiveness. Furthermore, given rising inflationary pressures we believe that tiered good, better, best pricing strategies (which require logistical support) will allow retailers to mitigate COGS pressure and facilitate passing on vendor cost increases. Supply Chain Critical to Successful DIFM Rollout � Given that the big three

aftermarket retailers are striving to increase market share and top line growth through expansion in the DIFM channel, effective supply chain management is increasingly critical. DIFM is characterized by a broader required range of SKUs, and highly differentiated geographic markets, requiring more specialized inventory mix and supply chain support that can effectively service the broader SKU breadth. Professional installers typically require a higher level of parts coverage (50k to 60K in DIY vs. 100K to 120K in DIFM), as their model depends heavily on high service bay turns (quick turnaround on repair jobs). Furthermore, effective deployment into the DIFM space requires significant investments in labor models & sales force support/management (hands on the ground in the areas that can actually field calls and questions from professional installers to provide technical support). Impact of Japan � During the call we addressed the impact of potential supply

disruptions stemming from recent tragic events in Japan. The current impact will more heavily felt by OEMS given that 1) the aftermarket supplier parts coming from the Pacific Rim are typically sourced from China (not Japan), 2) In the aftermarket, unlike OEM's there are usually multiple manufacturers that make parts for the same application. Given that in-transit time is ~4 weeks, many of the parts that shipped at the time of the earthquake just landed a couple of weeks ago and we may start to see more of an impact as we move forward in the next few weeks.

29

Citigroup Global Markets


Research -- 28 April 2011

Tobacco 1Q11 Conference Call Quotables

Vivien Azer +1-212-816-9630 vivien.azer@citi.com

Earnings Season Takeaways -- Herein, we provide notable quotes from our

companies' recent conference calls, consolidated by topic, in an effort to compare and contrast our companies' views on category growth, competitive dynamics and other industry topics. Cigarette Industry Update -- Competitive activity remained intense in 1Q11.

Consumers continued to trade down to value-priced brands, resulting in significant shipment increases for RAI's Pall Mall brand and LO's Maverick and Old Gold brands. In addition, new product introductions and promotional support for recent launches continued in the quarter, as each manufacturer believes that they are well-positioned to gain market share in the current year. Volume trends in 1Q11 were in-line with historical figures, but legislative action may increase state excise taxes, which would pressure industry sales growth for the remainder of the year. MST Industry Update -- With the category expected to deliver another year of 6-

7% volume growth, both MO and RAI are optimistic about their brands' growth prospects in the MST category. The FDA Review of Menthol -- The tobacco manufacturers continue to believe

that a ban of menthol is unlikely, though the timing of any formal decision continues to be uncertain. Returning Cash to Shareholders -- With each of MO and RAI having raised their

dividend payout ratios over the last eighteen months, and MO and LO both having open buyback programs, returning cash to shareholders remains a key focus for the U.S. tobacco companies.

30

Citigroup Global Markets


Research -- 28 April 2011

SMID "Value Creators" List Week of April 27, 2011

Scott T Chronert +1-415-951-1771 scott.t.chronert@citi.com

Below we present the SMID "Value Creators" List.

31

Citigroup Global Markets


Research -- 28 April 2011

Russell Reconstitution 2011 Preliminary Properties Using April 20 Price/Share Info

Keith L Miller +1-212-816-2285 keith.l.miller@citi.com

About this report -- This is the first of several reports leading up to the Russell

Index Reconstitution 2011. Using price and share data as of April 20, we attempt to provide an overview of properties based upon our projections. Russell will release their preliminary lists on June 10 and changes will take effect on June 24. Methodology Changes -- Methodology changes for 2011 include: 1) For

determination of growth/value, the long-term growth variable will be retired and replaced with two variables: IBES medium-term (2 yr) growth and historical sales per share growth (5 yr). Book-to-price will continue to be the variable used in the value side of the equation; 2) Russell will incorporate banding for growth and value indices; 3) Russell has adjusted its guidance for determining country assignment. Turnover -- We expect to experience higher turnover rates for the growth and

value indices using the new methodology. However, our analysis suggests these rates aren't dramatically higher. Russell 1000 -- We estimate 43 new members this year. Of those 43, 11 are

projected to be entering from outside into the Russell universe, some due to the methodology changes. For the Russell 1000 Index, the Materials and Financials sectors are projected to be the biggest movers in sector weight. For the Growth and Value Indices, sector weight changes seem to be slightly higher as adjustments due to the new methodology occur. In our study, we estimate the sector weight for Consumer Staples to increase in the Growth Index and decrease in the Value Index. Russell 2000 -- 174 new members are projected to enter the Russell 2000 this

year. And 125 are expected to exit. The Industrials sector is estimated to experience the largest sector weight gain while the Tech sector is expected to experience the largest loss. Sector weight changes for the Russell 2000 Growth and Value indices are also slightly elevated using this year's methodology. For the Russell 2000 Growth Index, the Financials and Tech are expected to experience the largest changes in sector weight. And for the Russell 2000 Value Index, the Consumer Discretionary and Energy sector top the list of sector weight changes. Russell Midcap -- Our study suggests the biggest sector weight changes for the

Midcap Composite Index are found in the Health Care & Telecom sectors. In addition, the Energy sector is expected to experience the largest change in sector weight for the Midcap Growth and Value Indices.

32

Citigroup Global Markets


Research -- 28 April 2011

Large-Cap/Small-Cap Rotation Model: We Continue to Favor Small-Caps .

Keith L Miller +1-212-816-2285 keith.l.miller@citi.com

Last quarter our model favored small-caps over large-caps. And for the second

quarter of 2011, our model continues to favor small-caps over large-caps. Two out of five model factors favor small-caps this quarter, including the factor with

the most predictive significance.

33

Citigroup Global Markets


Research -- 28 April 2011

U.S. Macro Flash Mar. Durable Goods Climb +2.5% on Transportation Orders; Core Capex +3.7%; Solid Feb. Revisions; Points to Better 2Q

Steven C Wieting +1-212-816-7148 steven.wieting@citi.com

Durable orders were better than expected, rising 2.5% in March on a 5.9% gain in

transportation orders. Excluding transportation, orders climbed 1.3%. There were also strong revisions to February orders, which were revised up to 0.7% from an initially reported drop of 0.6%. Core capital goods orders jumped 3.7% following an upwardly revised 0.5% gain in

February. While the 1Q11 level of core capital goods was an annualized 3.3% below 4Q10, the March reading was 7.3% annualized above the 4Q10 average. Core capital goods shipments, which factor directly into GDP calculations, climbed

by 2.2% in March. This end of quarter momentum suggests that while inclement weather and other

one-off factors caused apparent weakness in business investment during 1Q that we should see stronger measurements heading into 2Q. We look for real GDP growth of 1.8% in tomorrow's release.

34

Citigroup Global Markets


Research 28 April 2011

Appendix A-1 Analyst Certification The research analyst(s) primarily responsible for the preparation and content of this research report are named in bold text in the author block at the front of the product except for those sections where an analyst's name appears in bold alongside content which is attributable to that analyst. Each of these analyst(s) certify, with respect to the section(s) of the report for which they are responsible, that the views expressed therein accurately reflect their personal views about each issuer and security referenced and were prepared in an independent manner, including with respect to Citigroup Global Markets Inc and its affiliates. No part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed by that research analyst in this report.

IMPORTANT DISCLOSURES A director of Citi serves on the board of Nabors Industries. For full disclosures please see original research reports. Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Constellation Energy Group, Inc., Citrix Systems, Inc., eBay Inc, Nabors Industries. This position reflects information available as of the prior business day. Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Allegheny Technologies Incorporated, Baker Hughes Inc, Constellation Energy Group, Inc., eBay Inc, Fiserv, Inc., Corning Incorporated, Nabors Industries, Northrop Grumman Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, WellPoint. Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Alliance Resource Partners LP, Allegheny Technologies Incorporated, Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., eBay Inc, Fiserv, Inc., FMC Technologies, Corning Incorporated, Nabors Industries, Northrop Grumman Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, Waddell & Reed Financial, Inc, WellPoint. Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Nabors Industries. Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Alliance Resource Partners LP, Allegheny Technologies Incorporated, Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., Citrix Systems, Inc., eBay Inc, Fiserv, Inc., FMC Technologies, General Dynamics Corp., Corning Incorporated, Nabors Industries, Northrop Grumman Corp., National Oilwell Varco Inc, Norfolk Southern Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, Waddell & Reed Financial, Inc, WellPoint, Xilinx Inc in the past 12 months. Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Alliance Resource Partners LP, Allegheny Technologies Incorporated, Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., eBay Inc, Fiserv, Inc., FMC Technologies, Corning Incorporated, Nabors Industries, Northrop Grumman Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, Waddell & Reed Financial, Inc, WellPoint. Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investmentbanking, securities-related: Alliance Resource Partners LP, Allegheny Technologies Incorporated, Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., eBay Inc, Fiserv, Inc., FMC Technologies, General Dynamics Corp., Corning Incorporated, Nabors Industries, Northrop Grumman Corp., National Oilwell Varco Inc, Norfolk Southern Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, Waddell & Reed Financial, Inc, WellPoint, Xilinx Inc. Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investmentbanking, non-securities-related: Alliance Resource Partners LP, Allegheny Technologies Incorporated, Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., Citrix Systems, Inc., eBay Inc, Fiserv, Inc., FMC Technologies, General Dynamics Corp., Corning Incorporated, Nabors Industries, Northrop Grumman Corp., National Oilwell Varco Inc, Norfolk Southern Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, WellPoint, Xilinx Inc. Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues. The Firm is a market maker in the publicly traded equity securities of Alliance Resource Partners LP, Citrix Systems, Inc., eBay Inc, Fiserv, Inc., Xilinx Inc. For important disclosures (including copies of historical disclosures) regarding the companies that are the subject of this Citi Investment Research & Analysis product ("the Product"), please contact Citi Investment Research & Analysis, 388 Greenwich Street, 28th Floor, New York, NY, 10013, Attention: Legal/Compliance. In addition, the same important disclosures, with the exception of the Valuation and Risk assessments and historical disclosures, are contained on the Firm's disclosure website at www.citigroupgeo.com. Valuation and Risk assessments can be found in the text of the most recent research note/report regarding the subject company. Historical disclosures (for up to the past three years) will be provided upon request. Citi Investment Research & Analysis Ratings Distribution Data current as of 31 Mar 2011 Citi Investment Research & Analysis Global Fundamental Coverage % of companies in each rating category that are investment banking clients 35 12 Month Rating Buy Hold Sell 37% 11% 52% 43% 41% 41% Relative Rating Buy Hold Sell 9% 82% 9% 51% 41% 45%

Citigroup Global Markets


Research 28 April 2011

Guide to Citi Investment Research & Analysis (CIRA) Fundamental Research Investment Ratings: CIRA's stock recommendations include a risk rating and an investment rating. Risk ratings, which take into account both price volatility and fundamental criteria, are: Low (L), Medium (M), High (H), and Speculative (S). Investment ratings are a function of CIRA's expectation of total return (forecast price appreciation and dividend yield within the next 12 months) and risk rating. Analysts may place covered stocks "Under Review" in response to exceptional circumstances (e.g. lack of information critical to the analyst's thesis) affecting the company and/or trading in the company's securities (e.g. trading suspension). Stocks placed "Under Review" will be monitored daily by management. As soon as practically possible, the analyst will publish a note re-establishing a rating and investment thesis. To satisfy regulatory requirements, we correspond Under Review to Hold in our ratings distribution table for our 12-month fundamental rating system. However, we reiterate that we do not consider Under Review to be a recommendation. Relative three-month ratings: CIRA may also assign a three-month relative call (or rating) to a stock to highlight expected out-performance (most preferred) or under-performance (least preferred) versus the analyst's coverage universe over a 3 month period. The relative call may highlight a specific near-term catalyst or event impacting the company or the market that is anticipated to have a short-term price impact on the equity securities of the company. Absent any specific catalyst the analyst(s) will indicate the most and least preferred stocks in his coverage universe, explaining the basis for this short-term view. This three-month view may be different from and does not affect a stock's fundamental equity rating, which reflects a longer-term total absolute return expectation. For purposes of NASD/NYSE ratings-distribution-disclosure rules, most preferred calls correspond to a buy recommendation and least preferred calls correspond to a sell recommendation. Any stock not assigned to a most preferred or least preferred call is considered non-relativerated (NRR). For purposes of NASD/NYSE ratings-distribution-disclosure rules we correspond NRR to Hold in our ratings distribution table for our 3-month relative rating system. However, we reiterate that we do not consider NRR to be a recommendation. For securities in developed markets (US, UK, Europe, Japan, and Australia/New Zealand), investment ratings are:Buy (1) (expected total return of 10% or more for Low-Risk stocks, 15% or more for Medium-Risk stocks, 20% or more for High-Risk stocks, and 35% or more for Speculative stocks); Hold (2) (0%10% for Low-Risk stocks, 0%-15% for Medium-Risk stocks, 0%-20% for High-Risk stocks, and 0%-35% for Speculative stocks); and Sell (3) (negative total return). Investment ratings are determined by the ranges described above at the time of initiation of coverage, a change in investment and/or risk rating, or a change in target price (subject to limited management discretion). At other times, the expected total returns may fall outside of these ranges because of market price movements and/or other short-term volatility or trading patterns. Such interim deviations from specified ranges will be permitted but will become subject to review by Research Management. Your decision to buy or sell a security should be based upon your personal investment objectives and should be made only after evaluating the stock's expected performance and risk.

OTHER DISCLOSURES Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to Boeing Co., Baker Hughes Inc, Constellation Energy Group, Inc., eBay Inc, Fiserv, Inc., General Dynamics Corp., Corning Incorporated, Nabors Industries, Northrop Grumman Corp., National Oilwell Varco Inc, Norfolk Southern Corp., Parker Hannifin Corp, PPL Corp, Praxair Inc, Range Resources Corp, WellPoint. (For an explanation of the determination of significant financial interest, please refer to the policy for managing conflicts of interest which can be found at www.citigroupgeo.com.) Citigroup Global Markets Inc. or its affiliates beneficially owns 10% or more of any class of common equity securities of Nabors Industries. For securities recommended in the Product in which the Firm is not a market maker, the Firm is a liquidity provider in the issuers' financial instruments and may act as principal in connection with such transactions. The Firm is a regular issuer of traded financial instruments linked to securities that may have been recommended in the Product. The Firm regularly trades in the securities of the issuer(s) discussed in the Product. The Firm may engage in securities transactions in a manner inconsistent with the Product and, with respect to securities covered by the Product, will buy or sell from customers on a principal basis. Securities recommended, offered, or sold by the Firm: (i) are not insured by the Federal Deposit Insurance Corporation; (ii) are not deposits or other obligations of any insured depository institution (including Citibank); and (iii) are subject to investment risks, including the possible loss of the principal amount invested. Although information has been obtained from and is based upon sources that the Firm believes to be reliable, we do not guarantee its accuracy and it may be incomplete and condensed. Note, however, that the Firm has taken all reasonable steps to determine the accuracy and completeness of the disclosures made in the Important Disclosures section of the Product. The Firm's research department has received assistance from the subject company(ies) referred to in this Product including, but not limited to, discussions with management of the subject company(ies). Firm policy prohibits research analysts from sending draft research to subject companies. However, it should be presumed that the author of the Product has had discussions with the subject company to ensure factual accuracy prior to publication. All opinions, projections and estimates constitute the judgment of the author as of the date of the Product and these, plus any other information contained in the Product, are subject to change without notice. Prices and availability of financial instruments also are subject to change without notice. Notwithstanding other departments within the Firm advising the companies discussed in this Product, information obtained in such role is not used in the preparation of the Product. Although Citi Investment Research & Analysis (CIRA) does not set a predetermined frequency for publication, if the Product is a fundamental research report, it is the intention of CIRA to provide research coverage of the/those issuer(s) mentioned therein, including in response to news affecting this issuer, subject to applicable quiet periods and capacity constraints. The Product is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in the Product must take into account existing public information on such security or any registered prospectus. Investing in non-U.S. securities, including ADRs, may entail certain risks. The securities of non-U.S. issuers may not be registered with, nor be subject to the reporting requirements of the U.S. Securities and Exchange Commission. There may be limited information available on foreign securities. Foreign companies are generally not subject to uniform audit and reporting standards, practices and requirements comparable to those in the U.S. Securities of some foreign companies may be less liquid and their prices more volatile than securities of comparable U.S. companies. In addition, exchange rate movements may have an adverse effect on the value of an investment in a foreign stock and its corresponding dividend payment for U.S. investors. Net dividends to ADR investors are estimated, using withholding tax rates conventions, deemed accurate, but investors are urged to consult their tax advisor for 36

Citigroup Global Markets


Research 28 April 2011

exact dividend computations. Investors who have received the Product from the Firm may be prohibited in certain states or other jurisdictions from purchasing securities mentioned in the Product from the Firm. Please ask your Financial Consultant for additional details. Citigroup Global Markets Inc. takes responsibility for the Product in the United States. Any orders by US investors resulting from the information contained in the Product may be placed only through Citigroup Global Markets Inc. Important Disclosures for Morgan Stanley Smith Barney LLC Customers: Morgan Stanley & Co. Incorporated (Morgan Stanley) research reports may be available about the companies that are the subject of this Citi Investment Research & Analysis (CIRA) research report. Ask your Financial Advisor or use smithbarney.com to view any available Morgan Stanley research reports in addition to CIRA research reports. Important disclosure regarding the relationship between the companies that are the subject of this CIRA research report and Morgan Stanley Smith Barney LLC and its affiliates are available at the Morgan Stanley Smith Barney disclosure website at www.morganstanleysmithbarney.com/researchdisclosures. The required disclosures provided by Morgan Stanley and Citigroup Global Markets, Inc. on Morgan Stanley and CIRA research relate in part to the separate businesses of Citigroup Global Markets, Inc. and Morgan Stanley that now form Morgan Stanley Smith Barney LLC, rather than to Morgan Stanley Smith Barney LLC in its entirety. For Morgan Stanley and Citigroup Global Markets, Inc. specific disclosures, you may refer to www.morganstanley.com/researchdisclosures and https://www.citigroupgeo.com/geopublic/Disclosures/index_a.html. This CIRA research report has been reviewed and approved on behalf of Morgan Stanley Smith Barney LLC. This review and approval was conducted by the same person who reviewed this research report on behalf of CIRA. This could create a conflict of interest. The Citigroup legal entity that takes responsibility for the production of the Product is the legal entity which the first named author is employed by. The Product is made available in Australia through Citigroup Global Markets Australia Pty Ltd. (ABN 64 003 114 832 and AFSL No. 240992), participant of the ASX Group and regulated by the Australian Securities & Investments Commission. Citigroup Centre, 2 Park Street, Sydney, NSW 2000. The Product is made available in Australia to Private Banking wholesale clients through Citigroup Pty Limited (ABN 88 004 325 080 and AFSL 238098). Citigroup Pty Limited provides all financial product advice to Australian Private Banking wholesale clients through bankers and relationship managers. If there is any doubt about the suitability of investments held in Citigroup Private Bank accounts, investors should contact the Citigroup Private Bank in Australia. Citigroup companies may compensate affiliates and their representatives for providing products and services to clients. The Product is made available in Brazil by Citigroup Global Markets Brasil - CCTVM SA, which is regulated by CVM - Comiss�o de Valores Mobili�rios, BACEN - Brazilian Central Bank, APIMEC Associa��o dos Analistas e Profissionais de Investimento do Mercado de Capitais and ANBID - Associa��o Nacional dos Bancos de Investimento. Av. Paulista, 1111 - 11� andar - CEP. 01311920 - S�o Paulo - SP. If the Product is being made available in certain provinces of Canada by Citigroup Global Markets (Canada) Inc. ("CGM Canada"), CGM Canada has approved the Product. Citigroup Place, 123 Front Street West, Suite 1100, Toronto, Ontario M5J 2M3. This product is available in Chile through Banchile Corredores de Bolsa S.A., an indirect subsidiary of Citigroup Inc., which is regulated by the Superintendencia de Valores y Seguros. Agustinas 975, piso 2, Santiago, Chile. The Product is made available in France by Citigroup Global Markets Limited, which is authorised and regulated by Financial Services Authority. 1-5 Rue Paul C�zanne, 8�me, Paris, France. If the Product is made available in Hong Kong by, or on behalf of, Citigroup Global Markets Asia Ltd., it is attributable to Citigroup Global Markets Asia Ltd., Citibank Tower, Citibank Plaza, 3 Garden Road, Hong Kong. Citigroup Global Markets Asia Ltd. is regulated by Hong Kong Securities and Futures Commission. If the Product is made available in Hong Kong by The Citigroup Private Bank to its clients, it is attributable to Citibank N.A., Citibank Tower, Citibank Plaza, 3 Garden Road, Hong Kong. The Citigroup Private Bank and Citibank N.A. is regulated by the Hong Kong Monetary Authority. The Product is made available in India by Citigroup Global Markets India Private Limited, which is regulated by Securities and Exchange Board of India. Bakhtawar, Nariman Point, Mumbai 400-021. The Product is made available in Indonesia through PT Citigroup Securities Indonesia. 5/F, Citibank Tower, Bapindo Plaza, Jl. Jend. Sudirman Kav. 54-55, Jakarta 12190. Neither this Product nor any copy hereof may be distributed in Indonesia or to any Indonesian citizens wherever they are domiciled or to Indonesian residents except in compliance with applicable capital market laws and regulations. This Product is not an offer of securities in Indonesia. The securities referred to in this Product have not been registered with the Capital Market and Financial Institutions Supervisory Agency (BAPEPAM-LK) pursuant to relevant capital market laws and regulations, and may not be offered or sold within the territory of the Republic of Indonesia or to Indonesian citizens through a public offering or in circumstances which constitute an offer within the meaning of the Indonesian capital market laws and regulations. The Product is made available in Israel through Citibank NA, regulated by the Bank of Israel and the Israeli Securities Authority. Citibank, N.A, Platinum Building, 21 Ha'arba'ah St, Tel Aviv, Israel. The Product is made available in Italy by Citigroup Global Markets Limited, which is authorised and regulated by Financial Services Authority. Foro Buonaparte 16, Milan, 20121, Italy. The Product is made available in Japan by Citigroup Global Markets Japan Inc. ("CGMJ"), which is regulated by Financial Services Agency, Securities and Exchange Surveillance Commission, Japan Securities Dealers Association, Tokyo Stock Exchange and Osaka Securities Exchange. Shin-Marunouchi Building, 1-5-1 Marunouchi, Chiyoda-ku, Tokyo 100-6520 Japan. If the Product was distributed by Nikko Cordial Securities Inc. it is being so distributed under license. In the event that an error is found in an CGMJ research report, a revised version will be posted on the Firm's Global Equities Online (GEO) website. If you have questions regarding GEO, please call (81 3) 62703019 for help. The Product is made available in Korea by Citigroup Global Markets Korea Securities Ltd., which is regulated by the Financial Services Commission, the Financial Supervisory Service and the Korea Financial Investment Association (KOFIA). Citibank Building, 39 Da-dong, Jung-gu, Seoul 110-180, Korea. KOFIA makes available registration information of research analysts on its website. Please visit the following website if you wish to find KOFIA registration information on research analysts of Citigroup Global Markets Korea Securities Ltd. http://dis.kofia.or.kr/fs/dis2/fundMgr/DISFundMgrAnalystPop.jsp?companyCd2=A03030&pageDiv=02. The Product is made available in Malaysia by Citigroup Global Markets Malaysia Sdn Bhd, which is regulated by Malaysia Securities Commission. Menara Citibank, 165 Jalan Ampang, Kuala Lumpur, 50450. The Product is made available in Mexico by Acciones y Valores Banamex, S.A. De C. V., Casa de Bolsa, Integrante del Grupo Financiero Banamex ("Accival") which is a wholly owned subsidiary of Citigroup Inc. and is regulated by Comision Nacional Bancaria y de Valores. Reforma 398, Col. Juarez, 06600 Mexico, D.F. In New Zealand the Product is made available through Citigroup Global Markets New Zealand Ltd. (Company Number 604457), a Participant of the New Zealand Exchange Limited and regulated by the New Zealand Securities Commission. Level 19, Mobile on the Park, 157 Lambton Quay, Wellington. The Product is made available in Pakistan by Citibank N.A. Pakistan branch, which is regulated by the State Bank of Pakistan and Securities Exchange Commission, Pakistan. AWT Plaza, 1.1. Chundrigar Road, P.O. Box 4889, Karachi-74200. The Product is made available in the Philippines through Citicorp Financial Services and Insurance Brokerage Philippines, Inc., which is regulated by the Philippines Securities and Exchange Commission. 20th Floor Citibank Square Bldg. The Product is made available in Poland by Dom Maklerski Banku Handlowego SA an indirect subsidiary of Citigroup Inc., which is regulated by Komisja Nadzoru Finansowego. Dom Maklerski Banku Handlowego S.A. ul.Senatorska 16, 00-923 Warszawa. The Product is made available in the Russian Federation through ZAO Citibank, which is licensed to carry out banking activities in the Russian Federation in 37

Citigroup Global Markets


Research 28 April 2011

accordance with the general banking license issued by the Central Bank of the Russian Federation and brokerage activities in accordance with the license issued by the Federal Service for Financial Markets. Neither the Product nor any information contained in the Product shall be considered as advertising the securities mentioned in this report within the territory of the Russian Federation or outside the Russian Federation. The Product does not constitute an appraisal within the meaning of the Federal Law of the Russian Federation of 29 July 1998 No. 135-FZ (as amended) On Appraisal Activities in the Russian Federation. 8-10 Gasheka Street, 125047 Moscow. The Product is made available in Singapore through Citigroup Global Markets Singapore Pte. Ltd., a Capital Markets Services Licence holder, and regulated by Monetary Authority of Singapore. 1 Temasek Avenue, #39-02 Millenia Tower, Singapore 039192. The Product is made available by The Citigroup Private Bank in Singapore through Citibank, N.A., Singapore branch, a licensed bank in Singapore that is regulated by Monetary Authority of Singapore. This report is distributed in Singapore by Citibank Singapore Ltd ("CSL") to selected Citigold/Citigold Private Clients. CSL provides no independent research or analysis of the substance or in preparation of this report. Please contact your Citigold//Citigold Private Client Relationship Manager in CSL if you have any queries on or any matters arising from or in connection with this report. Citigroup Global Markets (Pty) Ltd. is incorporated in the Republic of South Africa (company registration number 2000/025866/07) and its registered office is at 145 West Street, Sandton, 2196, Saxonwold. Citigroup Global Markets (Pty) Ltd. is regulated by JSE Securities Exchange South Africa, South African Reserve Bank and the Financial Services Board. The investments and services contained herein are not available to private customers in South Africa. The Product is made available in Spain by Citigroup Global Markets Limited, which is authorised and regulated by Financial Services Authority. 29 Jose Ortega Y Gassef, 4th Floor, Madrid, 28006, Spain. The Product is made available in Taiwan through Citigroup Global Markets Taiwan Securities Company Ltd., which is regulated by Securities & Futures Bureau. No portion of the report may be reproduced or quoted in Taiwan by the press or any other person. 14 and 15F, No. 1, Songzhi Road, Taipei 110, Taiwan. If the Product is related to non-Taiwan listed securities, neither the Product nor any information contained in the Product shall be considered as advertising the securities or making recommendation of the securities. The Product is made available in Thailand through Citicorp Securities (Thailand) Ltd., which is regulated by the Securities and Exchange Commission of Thailand. 18/F, 22/F and 29/F, 82 North Sathorn Road, Silom, Bangrak, Bangkok 10500, Thailand. The Product is made available in Turkey through Citibank AS which is regulated by Capital Markets Board. Tekfen Tower, Eski Buyukdere Caddesi # 209 Kat 2B, 23294 Levent, Istanbul, Turkey. In the U.A.E, these materials (the "Materials") are communicated by Citigroup Global Markets Limited, DIFC branch ("CGML"), an entity registered in the Dubai International Financial Center ("DIFC") and licensed and regulated by the Dubai Financial Services Authority ("DFSA" to Professional Clients and Market Counterparties only and should not be relied upon or distributed to Retail Clients. A distribution of the different CIRA ratings distribution, in percentage terms for Investments in each sector covered is made available on request. Financial products and/or services to which the Materials relate will only be made available to Professional Clients and Market Counterparties. The Product is made available in United Kingdom by Citigroup Global Markets Limited, which is authorised and regulated by Financial Services Authority. This material may relate to investments or services of a person outside of the UK or to other matters which are not regulated by the FSA and further details as to where this may be the case are available upon request in respect of this material. Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB. The Product is made available in United States by Citigroup Global Markets Inc, which is a member of FINRA and registered with the US Securities and Exchange Commission. 388 Greenwich Street, New York, NY 10013. Unless specified to the contrary, within EU Member States, the Product is made available by Citigroup Global Markets Limited, which is regulated by Financial Services Authority. Pursuant to Comiss�o de Valores Mobili�rios Rule 483, Citi is required to disclose whether a Citi related company or business has a commercial relationship with the subject company. Considering that Citi operates multiple businesses in more than 100 countries around the world, it is likely that Citi has a commercial relationship with the subject company. Many European regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as a result of publication or distribution of investment research. The policy applicable to CIRA's Products can be found at www.citigroupgeo.com. Compensation of equity research analysts is determined by equity research management and Citigroup's senior management and is not linked to specific transactions or recommendations. The Product may have been distributed simultaneously, in multiple formats, to the Firm's worldwide institutional and retail customers. The Product is not to be construed as providing investment services in any jurisdiction where the provision of such services would not be permitted. Subject to the nature and contents of the Product, the investments described therein are subject to fluctuations in price and/or value and investors may get back less than originally invested. Certain high-volatility investments can be subject to sudden and large falls in value that could equal or exceed the amount invested. Certain investments contained in the Product may have tax implications for private customers whereby levels and basis of taxation may be subject to change. If in doubt, investors should seek advice from a tax adviser. The Product does not purport to identify the nature of the specific market or other risks associated with a particular transaction. Advice in the Product is general and should not be construed as personal advice given it has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to their objectives, financial situation and needs. Prior to acquiring any financial product, it is the client's responsibility to obtain the relevant offer document for the product and consider it before making a decision as to whether to purchase the product. CIRA concurrently disseminates its research via proprietary and non-proprietary electronic distribution platforms. Periodically, individual analysts may also opt to circulate research to one or more clients by email. Such email distribution is discretionary and is done only after the research has been disseminated via the aforementioned distribution channels. � 2011 Citigroup Global Markets Inc. Citi Investment Research & Analysis is a division of Citigroup Global Markets Inc. Citi and Citi with Arc Design are trademarks and service marks of Citigroup Inc. and its affiliates and are used and registered throughout the world. All rights reserved. Any unauthorized use, duplication, redistribution or disclosure of this report (the "Product"), including, but not limited to, redistribution of the Product by electronic mail, posting of the Product on a website or page, and/or providing to a third party a link to the Product, is prohibited by law and will result in prosecution. The information contained in the Product is intended solely for the recipient and may not be further distributed by the recipient to any third party. Where included in this report, MSCI sourced information is the exclusive property of Morgan Stanley Capital International Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, redisseminated or used to create any financial products, including any indices. This information is provided on an "as is" basis. The user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI, Morgan Stanley Capital International and the MSCI indexes are services marks of MSCI and its affiliates. The Firm accepts no liability whatsoever for the actions of 38

Citigroup Global Markets


Research 28 April 2011

third parties. The Product may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the Product refers to website material of the Firm, the Firm has not reviewed the linked site. Equally, except to the extent to which the Product refers to website material of the Firm, the Firm takes no responsibility for, and makes no representations or warranties whatsoever as to, the data and information contained therein. Such address or hyperlink (including addresses or hyperlinks to website material of the Firm) is provided solely for your convenience and information and the content of the linked site does not in anyway form part of this document. Accessing such website or following such link through the Product or the website of the Firm shall be at your own risk and the Firm shall have no liability arising out of, or in connection with, any such referenced website. ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST

39

Citigroup Global Markets


 
Read more
Read more
Similar to
Popular now
Just for you