Stifel Nicolaus Equity Research Hugo J. Warns, III, CFA, Director of Research Keith Gay, Associate Director of Research January 2013 Stifel Nicolaus 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. All relevant disclosures and certifications appear on pages 20-22 of this report.
Stifel Research Highlights Market leader following significant investment over the past eight years 86 analysts covering 1,242 stocks Ranked 3 rd in 2012 FT/StarMine Survey 2nd largest provider of U.S. equity research Second largest provider of U.S. small cap equity coverage Top 3 largest provider of U.S. equity coverage in: Source: StarMine 12/31/12 2
Stifel Award Highlights Proven, Consistent Qualitative Ranked 3 rd in the FT/Starmine 2012 Survey Most #1 awards in 2012 FT/StarMine Earnings Estimates category Most top 10 rankings in 2012 FT/StarMine Earnings Estimates, with 3 of the top 10 rated analysts awarded to Stifel Ranked in the FT/StarMine top 5 for the last 7 years and top 10 for the last 9 consecutive years Ranked 5 th overall in total FT/StarMine awards since 2004 (includes Legg Mason Capital Markets, Ryan Beck and Thomas Weisel Partners, which were acquired by Stifel Financial Corp.) Only firm ranked in the top 12 each year for the past 9 years in The Wall Street Journal Best on the Street (includes Legg Mason Capital Markets acquired by Stifel Financial Corp. on December 1, 2005) Ranked in Top 10 for Estimates in 5 of 10 sectors in StarMine, 1st out of 20 overall Source: The Wall Street Journal and StarMine, as of 12/31/12 3
Longstanding Quality 20 15 Ranked #1, 19 Awards Ranked #3, 14 Awards Ranked #4, 15 Awards Ranked #4, 19 Awards Ranked #5, 16 Awards Ranked #2, 18 Awards Ranked #2, 15 Awards Ranked #3, 14 Awards 10 Ranked #7, 9 Awards 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: StarMine, as of 9/30/12 4
Coverage Overview Sector Analysts Associates Coverage Top 10 Starmine Coverage Rank Percent Financial Institutions 16 14 237 4 19.1% Technology 13 15 196 1 15.8% Consumer & Retail 9 12 148 1 11.9% Energy & Power 9 9 140 5 11.3% Healthcare 8 9 107 8.6% Real Estate 5 6 92 1 7.4% Internet, Media & Telecom 6 7 89 1 7.2% Diversified Industrials 5 5 66 6 5.3% Metals & Mining 5 3 64 5.2% Transportation 3 2 43 2 3.5% Aerospace & Defense 2 3 33 7 2.7% Education 2 1 14 2 1.1% Business Services 1 1 13 1.0% Market Strategy 2 1 0 0.0% Total 86 88 1242 100% Source: Company StarMine Data as of 12/31/12; Ranking based upon U.S. and CDN sector coverage; 5
Companies Under Coverage Sr. Publishing Analysts Strong & Steady Investment Significant investment in Research staff and coverage since 2004 Staff from 34 to 86, up 153%; coverage from 419 to 1,242, up 196% Stifel Nicolaus Research 1,250 1200 1202 1242 100 1,000 750 500 250 419 34 516 42 601 47 700 58 763 846 61 61 84 84 86 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 # of Companies # of Analysts Source: Stifel Nicolaus, as of 12/31/12 6
U.S. Research Coverage by Firm Overall Region Coverage Mid Cap Region Coverage Small Cap Region Coverage Competitor Stocks Competitor Stocks Competitor Stocks JPMorgan 1111 JPMorgan 427 Sidoti & Company LLC 687 Stifel Nicolaus & Company 1063 BofA Merrill Lynch 426 Raymond James 360 BofA Merrill Lynch 1042 Stifel Nicolaus & Company 385 Stifel Nicolaus & Company 360 Raymond James 972 Barclays 384 Robert W. Baird & Co., Inc. 204 Barclays 961 Wells Fargo Securities, Llc 359 JPMorgan 203 Goldman Sachs 921 Raymond James 354 Piper Jaffray 194 Citi 918 Goldman Sachs 351 BofA Merrill Lynch 188 Wells Fargo Securities, Llc 894 Citi 333 Jefferies & Co. 184 Sidoti & Company LLC 888 UBS 302 Keefe, Bruyette & Woods 181 Morgan Stanley 857 Morgan Stanley 300 Wells Fargo Securities, Llc 176 Credit Suisse 840 Credit Suisse 299 Needham & Company 173 Deutsche Bank Securities 832 Deutsche Bank Securities 287 RBC Capital Markets 172 UBS 820 RBC Capital Markets 287 William Blair & Company, L.L.C. 169 RBC Capital Markets 815 Jefferies & Co. 279 Stephens Inc. 166 Jefferies & Co. 786 Morningstar, Inc. 252 Sandler O'Neill & Partners L.P. 163 Morningstar, Inc. 742 Keybanc Capital Markets 239 Credit Suisse 162 Robert W. Baird & Co., Inc. 650 Robert W. Baird & Co., Inc. 238 Deutsche Bank Securities 160 BMO Capital Markets 537 BMO Capital Markets 196 Roth Capital Partners LLC 155 William Blair & Company, L.L.C. 531 Sidoti & Company LLC 194 Oppenheimer & Co. 146 Piper Jaffray 503 Macquarie Research Equities 191 Janney Capital Markets 142 Macquarie Research Equities 499 William Blair & Company, L.L.C. 185 JMP Securities 142 Keybanc Capital Markets 499 Sterne, Agee & Leach 181 Keybanc Capital Markets 141 Oppenheimer & Co. 496 Stephens Inc. 166 Canaccord Genuity 139 Sterne, Agee & Leach 437 Oppenheimer & Co. 164 Citi 138 Notes: U.S. only stocks Excludes ADRs Janney Capital Markets 420 Piper Jaffray 163 Craig-Hallum Capital 134 Large Cap: > $5bn Mid Cap: $1bn- $5bn Small Cap: < $1bn Source: StarMine through 12/31/12; Overall coverage includes only companies with a rating 7
Consistent Growth Steady growth of coverage and staff over time 10.0% 9.3% Top 10 Firms - CAGR 2005-2012 8.0% 7.0% 6.0% 4.0% 3.4% 2.0% 0.0% 1.4% 0.9% 1.5% 1.0% 0.8% 0.8% 0.5% 0.2% 2.0% -2.0% -1.0% -0.5% -2.0% -0.3% -0.8% -0.8% -4.0% Stifel Nicolaus Goldman Sachs Deutsche Bank Morgan Stanley BofA Merrill Lynch Credit Suisse Citi UBS JPMorgan Companies Under Coverage # of Analysts Source: Company Data, as of 8/31/12, StarMine 2005-2012 8
Financial Institutions Technology Consumer & Retail Energy & Power Healthcare Real Estate Internet, Media & Telecom Diversified Industrials Metals & Mining Transportation Aerospace & Defense Education Business Services # of Companies Under Coverage Breadth & Depth in Both Coverage & Staff Coverage of 13 sectors, 85 subsectors, covering 49% of the S&P 210 Professionals in Equity Research: 86 analysts, 89 associates 250 200 237 196 Largest Provider of Research in: 150 148 140 100 107 92 89 66 64 50 43 33 14 13 0 Source: Data as of 12/31/12; Includes US & CDN coverage 9
Coverage Balanced Across All Market Caps Large Cap, 29% Small Cap, 36% Median: $379 Median: $13,870 Median: $2,158 Mid Cap, 35% Large Cap: > $5bn Mid Cap: $1bn - $5bn Small Cap: <$1bn Source: Company Data as of 12/31/12 10
Aerospace, Defense & Govt't Svcs Consumer & Retail Diversified Industrials Education Energy & Power Financial Institutions Healthcare Internet, Media & Telecom Metals & Mining Real Estate Technology Transportation Breadth & Depth in Our Awards Awards by Sector 211 Awards Over the Last 9 Years 35 30 25 20 15 10 5 0 7 6 20 11 10 8 3 5 1 3 16 9 6 8 24 13 29 3 3 4 4 9 8 WSJ Best on the Street Starmine Source: WSJ & StarMine Survey Awards 2004-2012; U.S. only; includes Legg Mason, Ryan Beck & Thomas Weisel Partners 11
Outperforming S&P Consistently Over Time 24 Months Jan. 2010 Dec. 2012 12 Months Jan. 2012 Dec. 2012 20% 10% 0% -10% 13.9% 12.4% 12.4% 13.4% Buy Hold Sell Coverage S & P 500 20% 15% 10% 16.3% 14.9% 10.3% 15.5% 13.4% -20% 5% -30% -40% -36.3% 0% Buy Hold Sell Coverage S & P 500 Trailing 6 months July 2012 Dec. 2012 8% 7% 6% 5.8% 6.9% 6.3% 5% 4.7% 4% 3% 2% 1% 0.9% Source: StarMine 12/31/12 0% Buy Hold Sell Coverage S & P 500 12
Total Return Stifel Select List Performance Outperforming S&P 500 for trailing 6, 36 & 60 months 60% 50% 49.1% 43.3% 40% 38.8% 30% 26.4% 20% 16.0% 17.7% 11.8% 10% 8.9% 0% T6 Months T12 Months T36 Months T60 Months Stifel Select List S&P 500 Source: FT/ StarMine, Bloomberg for 2007 data only *Trailing month data through 12/31/12 13
Stifel Readership For the month of November Source: FT/ StarMine, Readership Report 11/30/12; The popularity of any one given piece of readership relative to all other documents in its region as a percentile rank on a scale from 1-100. 14
Hire industry experts Quality Based on Expertise & Experience >50% of analysts worked in industry they cover Internally develop, train, and retain talent 46% of analysts started with firm as associates More CFAs on staff in U.S. research than any other firm Over 40% of the analysts have the CFA designation 22% associates with CFA 29% associates are CFA candidates Average analyst has 10 years of experience Solid retention drives continuity, experience, and better research Source: Company Data as of 9/6/12 15
There Is No Substitute for Industry Expertise Our Research thought leaders cross all sectors: Consumer Energy & Power Financial Institutions Financial Institutions Healthcare Healthcare Healthcare Internet, Media & Telecom Metals & Mining Metals & Mining Real Estate Technology Technology Transportation Softlines retail senior executive - Dress Barn Founder of an oil & gas exploration company - Lightning Energy Federal Bank Regulator - Office of the Comptroller P&C insurance actuary - Zurich Medical resident, licensed and board certified in internal medicine Senior healthcare benefits consultant - KPMG Research Scientist - Imclone, Mt. Sinai School of Medicine Film distributor and Internet company - Workin' Man Films, Theatre.com Geologist/Environmental consultant - Energy & Environmental Analysis Production Supervisor, Project Evaluation/Mine Planning - Gencor, Gold Fields of S. Africa CIO of a publicly traded REIT - Duke Realty Engineer - Raytheon, ASE Sales- Texas Instruments, Advanced Micro Devices CEO of railroad services company - RailWorks, CSX 16
Differentiated Products & Events Stifel conference calls connect investors with key decision-makers Leading Experts Internationally recognized expert in prostate cancer Washington DC Senior Fellow Leading industry experts and advocates in international and domestic logistics Director of Maryland Lottery Leading investment sales broker specializing in industrial assets nationally Across a wide range of topics E-Commerce trends Trends in paid search spending across verticals State budget conditions Panama Canal expansion and resulting impact Role of private fleets in supply chain management Regulatory update for the logistics industry Shifting treatment dynamics in dialysis Market impact and DOJ/FCC reviews 17
Differentiated Products & Events Conferences and Management Access 10 sector-specific conferences with more than 7,000 one-on-one meetings with management Over 100 site visits, HQ tours, management dinners 18
Differentiated Products Whitepapers: thought pieces, often collaborative across sectors 19
Important Certifications and Disclosures We, Hugh Warns and Keith Gay, certify that our respective views expressed in this research report accurately reflect our respective personal views about the subject securities or issuers; and we, Hugh Warns and Keith Gay, certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. For our European Conflicts Management Policy go to the research page at www.stifel.com. Stifel, Nicolaus & Company, Incorporated s research analysts receive compensation that is based upon (among other factors) Stifel Nicolaus overall investment banking revenues. Our investment rating system is three tiered, defined as follows: BUY -For U.S. securities we expect the stock to outperform the S&P 500 by more than 10% over the next 12 months. For Canadian securities we expect the stock to outperform the S&P/TSX Composite Index by more than 10% over the next 12 months. For other non-u.s. securities we expect the stock to outperform the MSCI World Index by more than 10% over the next 12 months. For yield-sensitive securities, we expect a total return in excess of 12% over the next 12 months for U.S. securities as compared to the S&P 500, for Canadian securities as compared to the S&P/TSX Composite Index, and for other non-u.s. securities as compared to the MSCI World Index. HOLD -For U.S. securities we expect the stock to perform within 10% (plus or minus) of the S&P 500 over the next 12 months. For Canadian securities we expect the stock to perform within 10% (plus or minus) of the S&P/TSX Composite Index. For other non-u.s. securities we expect the stock to perform within 10% (plus or minus) of the MSCI World Index. A Hold rating is also used for yield-sensitive securities where we are comfortable with the safety of the dividend, but believe that upside in the share price is limited. SELL -For U.S. securities we expect the stock to underperform the S&P 500 by more than 10% over the next 12 months and believe the stock could decline in value. For Canadian securities we expect the stock to underperform the S&P/TSX Composite Index by more than 10% over the next 12 months and believe the stock could decline in value. For other non- U.S. securities we expect the stock to underperform the MSCI World Index by more than 10% over the next 12 months and believe the stock could decline in value. 20
Important Certifications and Disclosures Of the securities we rate, 48% are rated Buy, 49% are rated Hold, and 3% are rated Sell. Within the last 12 months, Stifel, Nicolaus & Company, Incorporated or an affiliate has provided investment banking services for 23%, 15%, and 3% of the companies whose shares are rated Buy, Hold, and Sell, respectively. Additional Disclosures Please visit the Research Page at www.stifel.com for the current research disclosures and respective target price methodology applicable to the companies mentioned in this publication that are within Stifel Nicolaus' coverage universe. For a discussion of risks to target price please see our stand-alone company reports and notes for all Buy-rated stocks. The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Stifel, Nicolaus & Company, Inc. or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. Past performance should not and cannot be viewed as an indicator of future performance. Stifel, Nicolaus & Company, Inc. is a multi-disciplined financial services firm that regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions. Moreover, Stifel Nicolaus and its affiliates and their respective shareholders, directors, officers and/or employees, may from time to time have long or short positions in such securities or in options or other derivative instruments based thereon. 21
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