1. PREPARED BY: ASHLEY CLARK RICHARD GROSS JON HARMACEK OLGA ISENBERG BRYON JORDAN Industrial Sector Presentation

2. Agenda Sector Analysis Business Analysis Economic Analysis Financial Analysis Valuation Analysis Recommendation Q&A

3. Sector Analysis The Industrials Sector makes up 11.57% of the SIM Portfolio, 178 basis points above the S&P 500.

4. Sector Analysis – Top 10 companies General Electric Co14.7% United Parcel Service Inc6.1% United Technologies Corp5.9% 3M Co5.5% Union Pacific Corp3.6% Boeing Co3.5% Lockheed Martin3.4% Emerson Electric Co3.2% Burlington Northern Santa Fe Co3.1% Honeywell Intl Inc2.9% All Other48.1%

5. Sector Analysis – Returns by sector Industrial QTD Return – 3.65% Industrial YTD Return - -4.32%

6. Business Analysis – Economic cycle Source: http://personal.fidelity.com/products/funds/content/sector/cycle.shtml

7. Business Analysis – Industrials vs. S&P 500 Source: http://www.yahoo.com

9. Source: http://openlearn.open.ac.uk/mod/resource/view.php?id=281253 Business Analysis – Stages of Maturity

10. Economic Analysis Industrials are highly correlated to GDP, real interest rates, real private investments, federal government spending and housing market In June 2009, The Fed Beige Book report indicated that the expectations of several districts regarding the recession have improved, though they do not see the substantial increase in economic activity through the end of the year In Q2 2009, manufacturing activity declined or remained at a low level across most states

11. Economic Analysis – GDP vs. Industrial Equipment

12. Economic Analysis – GDP vs. Change in Real Investment

13. Economic Analysis – GDP vs. New Single Family Home Sales

14. Economic Analysis – Industrial Production Index vs. Recessions

15. Economic Analysis – Capacity Utilization vs. Recessions

16. Economic Analysis – Real Private Investment vs. Recessions

17. Financial Analysis - Net Profit Margin

18. Financial Analysis - ROE

19. Financial Analysis - ROE Key Operating Statistics 20052006200720082009 EBITDA Margin18.0%17.8%18.5%18.4% Stable Net Profit Margin7.7%8.2%8.4%7.8%7.3%Decreasing ROE17.3%17.8%19.5%20.7%21.3%Increasing *Red indicates consensus estimates

20. Financial Analysis - EPS YOY Growth

21. Financial Analysis - Earnings Per Share Next Expected EPS Date: Sep 2004200520062007200820092010 Mar2.913.484.064.525.053.123.09 Jun3.374.084.525.245.733.213.58 Sep3.344.074.725.225.43.363.88 Dec3.64.375.165.634.723.624.03 Year13.2216.0018.4620.6120.9013.8314.64 Year to Year21%15%12%1%-34%6% *Red indicates consensus estimates Expected Significant Decrease in 2009 Overall Expected Increase in 2010 Overall

22. Validation Analysis - Industrials Industrials Sector HighLowMedianCurrent P/E30.57.120.210.7 P/S1.60.61.40.8 P/B3.61.43.22.3 P/CS14.04.911.46.7 vs S&P 500 P/E1.20.661.10.69 P/S1.10.81.00.8 P/B1.31.01.1 P/CS1.20.71.10.8

23. Validation Analysis - P/E vs. S&P 500

24. Validation Analysis - P/S vs. S&P 500

25. Validation Analysis - P/B vs. S&P 500

26. Validation Analysis - P/CF vs. S&P 500

27. Recommendation Maintain the current overweight of 178 basis points (SIM 11.57% vs. S&P 500 9.79%) Positives:  During the recession most of industrial stocks are undervalued  Most of the stocks should have an upside when economy turns around  Increased government spending (i.e. OSK, GE, Shaw)  Low interest rates Risks:  Double-dip recession driving prices further down  Lag between GDP growth and Industrial growth  Companies have divested most of the assets due to the prolonged recession  Excess capacity in the housing market and commercial real estate

28. Q&A