1. Green & Gold Fund Recommendation: HOLD Xylem, Inc.

2. Purchased 300 shares on February 23, 2012 @ 27.56 per share. ($8,268) Currently @ 27.98 per share. ($8,394) $126 gain Xylem Position in Fund High @ 28.73 on March 15 Low @ 23.16 on July 16

3. Water Industry Overview Global Water SectorGrowth Drivers  Population Growth  Supply Shrinking due to Pollution  Industrial Expansion  Urbanization  Infrastructure Replacement/Upgrade  $425 Billion  4% to 6% defensive long-term growth  Movement towards Global Water Oligopoly

5. Technology

6. Spun off from ITT in 2011 Xylem (XYL) is a leading global water technology provider. Transport Treat Test Public Utility Industrial Agricultural Operates in 150 countries 12,500 employees worldwide Xylem Company Profile

7. Xylem Inc.

9. How does Xylem contribute to solving the water crisis? Challenges: XYL Solution: Growing scarcity and populations. Reuse and Recycle water. Using less energy to transport water. Modernize the water system. Develop more water treatment systems. Making water from multiple sources safe to drink.

10. Financial Highlights (in millions)2009201020112012E2013E Revenue2,8493,2023,8033,8063,911 Net Income202286358303366 Free Cash Flow308301388276345 XYL has continued to increase revenue over the past few years through strategic acquisitions, even with slower revenue growth in Europe. Strong free cash flow opens the door for future acquisitions or an increase in the dividend payout.

11. XYLPNRFLSWTRAVG Market Cap5.80 B12.26B8.34B5.37B7.94B Forward PE14.0115.7214.6122.0016.585 FCF (2013E)344.70335.9621.39-5.01324.25M FCF (2012E)276.10249.59475.96-20.81245.21 Debt to Equity0.590.28.461.260.65 Div Yield (2013E)1.60%1.82%0.99%2.71%1.78% Comparables Analysis XYL & PNR are strong compared to peer group.

12. XYL Investment Information

13. XYL stock has been fairly stationary since we bought the stock and is currently $0.42 above where we bought it. Why? Revenue did not increase at the expected rate in developed markets, especially Europe. Losses in foreign exchange conversions. However, acquisitions, which did better than planned, are expected to continue throughout 2013. Xylem highlights from February 2012 to January 2013

14. Strengths  Broad Portfolio  Water is >90% of total revenues  Partnerships- GE, Zenon, Toro, Mono  Established Brand Names (38)  BBB Rating Weaknesses  Lack of Available Information  Ability to hedge foreign currency transaction risks Opportunities  Acquisitions  Growth into Emerging Markets  Mergers  Aging Water Infrastructure Threats  Decelerated growth of global economies  Increased costs of raw materials  Regulatory Compliance SWOT Analysis

15. In order to maintain exposure in the growing water sector, we should hold Xylem Inc. due to their use of technology and more than 90% of their revenues coming from water. The global recession has prevented the takeoff we originally expected. However, as economies recover and more nations require infrastructure upgrades, we expect XYL’s stock price to increase. Investment Thesis

16. Sector : Industrials and Materials Industry Group: Water Current Holdings: XLI, XME, GE, UPS, SAND, XYL Target Sector Allocation: 8.23%, $44,491 Current Sector Allocation: 10.98%, $59,357 Remaining Allocation: (2.75)%, $(14,866) HOLD 300 shares of XYL. ($8,388, 1.49% of portfolio, 13.59% of sector) year end target price: $32.00 Portfolio Placement

17. One Year Stock Chart