ROIC FOR NONFINANCIAL COMPANIES Percent Annual ROIC without goodwill Average 15.3 9.0 5.0 Years Annual ROIC with goodwill 13.6 8.3 4.7 Years Source: Compustat, McKinsey & Company’s corporate performance database

ROIC DISTRIBUTION FOR NONFINANCIAL COMPANIES Annual ROIC without goodwill, 1963-2003 Approximately 50% of the sample within ROIC range of 5-15% Percent of sample ROIC <-10.0 -5.0 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 30.0 35.0 40.0 >40.0 Percent of observations below ROIC level 5 7 11 15 25 42 56 66 74 80 84 87 89 92 94 95 100 84% of the sample had ROIC below 20% Source: Compustat, McKinsey & Company’s corporate performance database

ROIC BY INDUSTRY GROUP* LAN-ZWB887-20050615-13686-ZWB ROIC BY INDUSTRY GROUP* Percent Annual ROIC without goodwill** 1963-2003 1994-2003 Pharmaceuticals and biotechnology Household and personal products Software and services Media Commercial services and supplies Semiconductors and semiconductor equipment Health care equipment and services Food, beverage, and tobacco Hotels, restaurants, and leisure Technology hardware, and equipment Automobiles and components Capital goods Food and staples retailing Consumer durables and apparel Retailing Total sample Materials Energy Transportation Telecommunication services Utilities * Based on S&P Global industry classification standard, excluding financial companies ** Average of annual medians Source: Compustat; McKinsey & Company’s corporate performance database

ROIC SEGMENTED BY SIZE AND GROWTH Annual ROIC without goodwill, 1963-2003 Percent Revenues 200-500 M 500-1,000 M 1,000-2,500 M <200 M >2,500 M 3.3 7.0 5.2 6.0 6.5 <0% 8.0 7.7 8.0 8.1 9.1 0-5% ROIC increases with higher growth rate 8.9 9.3 9.6 9.5 10.3 3-year real growth rate 5-10% 10.8 10.9 11.2 10.9 11.8 10-15% 11.9 11.1 11.7 11.5 11.9 15-20% 12.4 11.6 11.9 11.8 11.8 >20% No clear relation between size and performance Source: Compustat, McKinsey & Company’s corporate performance database

ROIC DECAY ANALYSIS: NONFINANCIAL COMPANIES LAN-ZWB887-20050615-13686-ZWB ROIC DECAY ANALYSIS: NONFINANCIAL COMPANIES Median ROIC of portfolio* Percent ROIC Percent >20 15-20 10-15 5-10 <5 Number of years following portfolio formation * At year 0, companies are grouped into one of 5 portfolios, based on ROIC Source: Compustat; McKinsey & Company’s corporate performance database

ROIC DECAY ANALYSIS: CONSUMER STAPLES LAN-ZWB887-20050615-13686-ZWB ROIC DECAY ANALYSIS: CONSUMER STAPLES Median ROIC of portfolio* Percent ROIC Percent >20 15-20 10-15 5-10 <5 Number of years following portfolio formation * At year 0, companies are grouped into one of 5 portfolios, based on ROIC Source: Compustat; McKinsey & Company’s corporate performance database

ROIC TRANSITION PROBABILITY, 1994-2003 LAN-ZWB887-20050615-13686-ZWB ROIC TRANSITION PROBABILITY, 1994-2003 Percent, 3-year average of ROIC without goodwill ROIC in 2003 Total ROIC in 1994 <5 5-10 10-15 15-20 >20 <5 100 5-10 100 10-15 100 15-20 100 >20 100 Source: Compustat; McKinsey & Company’s corporate performance database

REVENUE GROWTH FOR NONFINANCIAL COMPANIES LAN-ZWB887-20050615-13686-ZWB REVENUE GROWTH FOR NONFINANCIAL COMPANIES 3-year rolling average of real revenue growth Percent CAGR Percent 15.4 6.3 -0.2 Source: Compustat; McKinsey & Company’s corporate performance database

REVENUE GROWTH BY INDUSTRY GROUP* LAN-ZWB887-20050615-13686-ZWB REVENUE GROWTH BY INDUSTRY GROUP* Percent Annual real revenue growth** 1963-2003 1994-2003 Software and services Semiconductors and semiconductor equipment Health care equipment and services Technology hardware and equipment Pharmaceuticals and biotechnology Commercial services and supplies Telecommunication services Hotels, restaurants, and leisure Energy Media Retailing Transportation Food and staples retailing Total sample Automobiles and components Household and personal products Capital goods Consumer durables and apparel Utilities Food, beverage, and tobacco Materials * Based on S&P Global Industry Classification Standard ** Geometric mean of annual median Source: Compustat; McKinsey & Company’s corporate performance database

AGGREGATE EPS FORECASTS FOR S&P 500 CONSTITUENTS LAN-ZWB887-20050615-13686-ZWB EPS (US cents) Source: IBES; McKinsey analysis

REVENUE GROWTH DECAY ANALYSIS LAN-ZWB887-20050615-13686-ZWB REVENUE GROWTH DECAY ANALYSIS Revenue growth Percent Median growth of portfolio* Percent >20 15-20 10-15 5-10 <5 Number of years following portfolio formation * At year 0, companies are grouped into one of 5 portfolios, based on ROIC Source: Compustat; McKinsey & Company’s corporate performance database

Years from entrance into Fortune 50 REVENUE GROWTH RATE FALLS DRAMATICALLY FOR COMPANIES REACHING FORTUNE 50 LAN-ZWB887-20050615-13686-ZWB Before entrance to Fortune 50 After entrance to Fortune 50 Average annual real revenue growth rate Percent -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years from entrance into Fortune 50 Source: Corporate Executive Board, “Stall Points: Barriers to Growth for the Large Corporate Enterprise”, 1998

REVENUE GROWTH TRANSITION PROBABILITY 1994-2003 LAN-ZWB887-20050615-13686-ZWB REVENUE GROWTH TRANSITION PROBABILITY 1994-2003 Three-year rolling average of real revenue growth rate Percent Revenue growth in 2003 <5 5-10 10-15 15-20 >20 Total <5 100 5-10 100 Revenue growth in 1994 10-15 100 15-20 100 >20 100 Source: Compustat; McKinsey & Company’s corporate performance database