1. Fisher College of Business – Student Investment Management Materials Sector Analysis Kyle Shaner Josh Carter

2. Fisher College of Business – Student Investment Management Agenda Sector Analysis Business Analysis Economic Conditions Financial Analysis Valuation Recommendation

3. Fisher College of Business – Student Investment Management Sector Analysis – Materials Sector Companies that are involved in the discovery, development and processing of raw materials Includes companies that are involved with mining and refining metals, chemical production and oil and gas infrastructure development

4. Fisher College of Business – Student Investment Management Sector Analysis – Industries Chemicals – Producers of commodity, diversified, fertilizers, agricultural, and specialty chemicals – Producers of industrial gases Construction Materials – Manufacturers of construction materials including sand, clay, gypsum, lime, aggregates, cement, concrete and bricks Containers and Packaging – Manufacturers of metal, glass, plastic, paper and cardboard containers

5. Fisher College of Business – Student Investment Management Sector Analysis - Industries Metals and Mining – Producers of aluminum and related products – Companies engaged in diversified metals and mining production or extraction of gold, precious metals, minerals and related products – Producers of iron, steel and related products Paper & Forest Products – Manufacturers of timber, related wood products and all grades of paper. – Manufacturers of lumber for the building industry but excludes companies specializing in paper packaging

6. Fisher College of Business – Student Investment Management Sector Analysis-Industry Performance

7. Fisher College of Business – Student Investment Management Sector Analysis-Industry Performance

8. Fisher College of Business – Student Investment Management Sector Analysis-Industry Performance

9. Fisher College of Business – Student Investment Management Sector Analysis - Major Companies SymbolCompanyPrice (1) Market Cap (Billions) (1) MONMonsanto Co.$79.41$43.46 PXPraxair Inc.$67.46$20.75 DDDu Pont (E.I.)$22.40$20.21 NEMNewmont Mining Corp. (Hldg. Co.) $41.58$18.89 NUENucor Corp.$43.83$13.77 (1) Price and market cap as of 2/13/2008

10. Fisher College of Business – Student Investment Management Sector Analysis - SIM Weights Current SIM Weight = 1.79% Current S&P Weight = 3.04% Underweight by 1.25%

11. Fisher College of Business – Student Investment Management Sector Analysis - Current Holdings Posco ADR (PKX) – Manufactures and sells various steel products primarily in Korea Unit Cost Total Cost Market Price (1) Market Value (1) Unrealized Gain/(Loss) Loss 117.06$468,225.6066.16$254,080.00($214,146)-45.74% (1) Price and market cap as of 2/13/2008

12. Fisher College of Business – Student Investment Management Business Analysis Mature Sector Cyclical Growth through acquisition International Exposure Increased Environmental Regulation

13. Fisher College of Business – Student Investment Management Business Analysis – M&A Activity Trend towards industry consolidation Notable transactions – Failed BHP acquisition of Rio Tinto-$120 billion – Chinalco minority investment in Rio - $20 billion – Proposed DOW acquisition of Rohm & Haas - $15 billion M&A activity trends In 2007, M&A volume reached all time high of $4.7 trillion Led by unprecedented financial sponsor activity - $870 billion Materials represented ~$650 billion in announced deals Q4 2008 M&A volume decreased dramatically – down 73% Data provided by Thompson Reuters

14. Fisher College of Business – Student Investment Management Business Analysis – M&A Activity Data provided by Thompson Reuters

15. Fisher College of Business – Student Investment Management Economic Analysis – Global Demand `GDP Y-o-Y Growth 20082009 Brazil4.80%4.00% Russia6.80%5.70% India7.90%7.10% China9.30%6.70% Euro zone GDP fell 5.6% annualized in Q4 2008 Japan fell 12.7% annualized

16. Fisher College of Business – Student Investment Management Economic Analysis - Performance 200720082009 S&P 5003.53%-38.49%-8.57% Materials19.98%-47.05%-7.24%

17. Fisher College of Business – Student Investment Management Economic Analysis – Metal Prices

18. Fisher College of Business – Student Investment Management Economic Analysis – Metal Prices

19. Fisher College of Business – Student Investment Management Economic Analysis - Regression Analysis

20. Fisher College of Business – Student Investment Management Economic Analysis - Stimulus Package US passes $789 billion Economic Stimulus Package ~65% spending and ~35% tax cuts Obama administration has focus on infrastructure spending to spark economy ~$62 billion in highway construction – spending may have 19 month lag time In November, China announced $586 billion stimulus package China faces growth issues as global trade declines Exports down 17% in January 2009 Package focuses on upgrading infrastructure, particularly railways, roads, and aiports

21. Fisher College of Business – Student Investment Management Financial Analysis - Financials

22. Fisher College of Business – Student Investment Management Financial Analysis - Financials

23. Fisher College of Business – Student Investment Management Financial Analysis Continued…

24. Fisher College of Business – Student Investment Management Financial Analysis Continued…

25. Fisher College of Business – Student Investment Management Financial Analysis Continued…

26. Fisher College of Business – Student Investment Management Financial Analysis Continued…

27. Fisher College of Business – Student Investment Management Financial Analysis-Relative Valuation HighLowMeanCurrent P/Forward E 1.430.590.941.34 P/S 1.140.360.780.85 P/B 1.160.360.891.11 P/EBITDA 1.180.460.850.80 P/CF 1.080.390.82 P/E/G ratio 1.570.641.141.24 ROE ratio 1.150.570.801.05

28. Fisher College of Business – Student Investment Management Recommendation Sector will struggle until economy rebounds Continue to underweight at 1.25% Bright spot – Chemicals