february 2012 s&p capital iq market observations

MARKET Monthly compilation of high-level perspectives on M&A, public equity, private capital, and the capital markets.

OBSERVATIONS

Jan 2012 Feb

Mar Apr

May Jun

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Sept Oct

Nov Dec

WHAT’S INSIDE • Back from the Brink • A Lesson from Lehman • S&P 500 Companies Show Above-Average Credit Ratings Strength • Sector Snapshots and Performance Graphs • M&A and Private Capital Activity

S&P Capital IQ Market Observations – February 2012 | To learn more about S&P Capital IQ, please contact us at +1 212.438.8701 or [email protected]

EDITOR’S NOTE

- Editorial Team

CONTACT INFORMATION Kaitlin Carlin- Production Editor [email protected] Cara Kiewel- Communications Director [email protected] Subscriptions and General Inquiries [email protected]

S&P Capital IQ clients can access the M&A data contained in Market Observations, as well as export customizable versions of our charts from the S&P Capital IQ platform. Navigation Tip: S&P Capital IQ> Markets tab > Visualizations: Market Observations

With a new year unfolding and ‘past performance being no indicator of future success’, we welcome your continued input on content you would be interested in seeing in future issues of the MMO. This month, in addition to our regular content, two of our chief strategists offer contrasting perspectives for consideration. One, a rather convincing raft of wide-spread, positive indicators and an accompanying, nascent migration from capital preservation to growth strategies. The other, a cautionary tale of what we could expect if current market conditions turn out to be a red herring. You decide!

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TABLE OF CONTENTS

Back from the Brink (pg 4) S&P Capital IQ Global Equity Strategist Alec Young shows how the year-to-date global equity markets have shown a striking role reversal since 2011.

A Lesson from Lehman (pg 10) S&P Capital IQ’s Valuation Chief Equity Strategist Sam Stovall takes a look back at the tumultuous month of November.

S&P 500 Companies Show Above-Average Credit Ratings Strength (pg 12) Diane Vazza, Managing Director, and Evan Gunter, Associate, discuss companies in the S&P 500 that have strong credit profiles.

Sector Snapshots (pg 23) Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunication Services Utilities

M&A and Private Capital Activity (pg 35) M&A Activity by Quarter M&A Valuations by Quarter M&A Valuations by Sector and Deal Size M&A by Sector LBOs by Sector PE Investments by Sector PIPE deals by Sector VC deals by Sector


Global Equity Strategist, Alec Young Year-to-date global equity performance has been marked by a striking role reversal. Last year’s higher-beta, cyclical laggards have surged to the front of the pack as risk aversion has receded globally. Conversely, 2011’s defensive, counter-cyclical leaders have largely faded in the new-year. Specifically, after badly underperforming in 2011, developed international stocks are handily outperforming the S&P 500’s 5.4% gain with a 7.5% year-to-date advance (in USD). Even more surprising to most, Europe is beating the U.S., rising 7.5%, led by Germany’s 14.2% surge. Digging deeper, emerging market (EM) stocks have rebounded most, sporting an impressive 13.9% gain in the wake of last year’s 20.4% drubbing (see chart 1). Representing roughly 50% of the EM equity asset class, the BRIC nations are fueling the turnaround, rising 17% after last year’s 24.9% slide. Sector performance has been marked by a similar dynamic, with cyclical areas like Financials, Materials and Industrials surging to the front after trailing badly last year. Conversely, defensive sectors like Consumer Staples, Health Care and Telecom, last year’s stalwarts, have fallen to the wayside as risk aversion has dimmed in 2012 (see table 1). Not surprisingly, this stark performance shift has coincided with a dramatic decline in global equity volatility, as the bunker mentality that gripped investors in 2011 has receded. Trailing 60-day standard deviations for both developed and emerging market equities have declined to about 20 from readings in the mid 30s in early November. The standard deviations of both asset classes are now nearing their respective long-term averages in the high teens (see chart 2). Equity volatility has plunged in all major overseas markets, including Canada, Germany, the U.K., Japan, Australia, China, India, Brazil and Russia. Even France, Italy and Spain have gone along for the ride.

Chart 1.

Source: S&P Indices, MSCI (through 2/2 in USD)

BACK FROM THE BRINK

From Worst to First: Int'l. Equities Rebound YTD, Led By Emerging Mkts.

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Table 1

Source: S&P Capital IQ, Bloomberg (through 2/2 in USD)

BACK FROM THE BRINK

Sector YTD 2011 Sector YTD 2011Materials 13.2% -23.8% Energy 17.1% -20.9%Financials 11.4% -22.3% Materials 16.1% -28.5%Consumer Disc. 10.6% -14.7% Industrials 14.5% -30.3%Industrials 9.9% -17.0% Financials 14.3% -25.9%Info. Tech. 6.0% -16.8% Consumer Disc. 10.2% -14.4%Energy 5.1% -7.4% Info. Tech. 10.2% -17.8%Utilities 2.6% -20.7% Health Care 10.1% -21.1%Health Care 2.3% 1.8% Utilities 10.1% -19.8%Consumer Staples 1.4% 0.8% Consumer Staples 6.7% -4.5%Telecom -0.7% -6.7% Telecom 4.2% -8.8%INDEX 7.7% -14.9% INDEX 12.4% -22.9%

S&P Developed ex-U.S. S&P Emerging Market

From Worst to First - After Lagging in 2011, Cyclicals Take the Lead

International Volatility Plummets Amid Improving Global Macro-Economic Environment

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Source: S&P Indices, MSCI (through 2/1 in USD)


So what explains this across the board performance U-turn? We think several bullish factors are at work leading investors to once again favor “risk-on” assets at the expense of capital preservation strategies. Chief among them is a sharp decline in European sovereign stress thanks to aggressive ECB action to provide liquidity to European banks. Specifically, the ECB's Long Term Refinancing Operation (LTRO), which provides cheap, three-year bank loans, is allowing EU banks to meet a heavy first-half bond maturity burden, thereby buying time and reducing the odds of a Lehman-like shock, in our view. In addition, Spanish and Italian banks have exploited a carry trade - using cheap ECB funding to buy their nations' higher-yielding two-year bonds, pocketing the spread. As a result, short-term sovereign funding pressure has eased, with two-year Italian and Spanish bond yields tumbling to 3% and 2.5%, respectively, from north of 6% last fall (see chart 3). As such, risk assets like European and EM equities have rebounded sharply as investors' biggest worry - a global credit crunch emanating from Europe - has faded sharply, helping pull cautious money into cyclical assets, which have the most to gain from reduced credit stress. Adding fuel to the rebound in risk appetite - the stabilization in global manufacturing momentum, most notably in the U.S. (see chart 4) - has investors feeling more confident the world economy can weather a likely mild European recession.

BACK FROM THE BRINK

ECB Buys Time - Balance Sheet Expansion Lowers Sovereign Stress

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Source: IHS Global insight (as of 11/15)

BACK FROM THE BRINK

Global Manufacturing Stabilization Boosts Risk Appetite

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Emerging markets have clearly been the stars of the show year-to-date, outperforming the S&P 500 and developed international equities by 850 bps and 640 bps, respectively. Easing inflation (see chart 5) has been the spark, in our view, as several months of falling prices have led key central banks to signal a greater willingness to ease monetary policy to revive slowing economic growth.


BACK FROM THE BRINK

Fallling EM Inflation Sparks Easing, Boosting Equities

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Chart 5

Lastly, we think attractive valuations have helped set the stage for 2012’s strong start. While low valuations alone rarely make assets rise, they help create the foundation for alpha once bullish catalysts emerge. After last year’s swoon, overseas stocks were priced for extremely negative macro economic outcomes ranging from a global credit crunch to a Chinese hard landing, by our analysis. As these risks have receded we think low valuations have made it easier for foreign stocks to snap back impressively. Even after the year-to-date bounce, developed and emerging market equities are trading at only 11.1X and 10.2X 12-month forward consensus EPS, respectively, both discounts to their long-term averages (see chart 6), giving us confidence the gains are sustainable even as the pace of the advance likely slows.

Source: S&P Capital IQ, Bloomberg


Source: Bloomberg

BACK FROM THE BRINK

Low Valuations Boost Foreign Equities As Macro Catalysts Emerge

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Source: S&P Capital IQ, Bloomberg


Source: Bloomberg

A LESSON FROM LEHMAN

A Lesson from Lehman, Sam Stovall If you asked investors what would be the worst luck for the global markets today, they would probably answer “The European sovereign debt crisis triggering a Lehman-like financial meltdown.” This answer should come as no surprise to most investors, as it has been a topic of debate for more than a year. And while the time and type of eventual conclusion to this crisis remains elusive, in our opinion, the quantifiable fallout from a worst-case scenario does not. Just step back a few years and revisit the latter months of 2008 during the peak period of panic, just before and immediately following the September 15 bankruptcy filing of Lehman Brothers.

Broad Indices % Chg. S&P 500 Sector % Chg.S&P 500 High Beta (48.8) Materials (42.4)NAREIT-Equity Only (47.5) Financials (39.8)S&P GSCI (46.5) Info. Technology (36.3)MSCI-Emerging Markets (44.6) Industrials (33.7)S&P MidCap 400 (36.6) Cons. Discretionary (32.6)MSCI-EAFE (35.3) S&P 500 (29.6)S&P SmallCap 600 (34.2) Energy (27.2)S&P Preferred Stock (30.2) Health Care (22.9)S&P 500 (29.6) Utilities (19.4)S&P 500 Low Volatility (19.3) Telecom. Services (14.6)S&P 500 Aristocrats (17.9) Cons. Staples (13.7)Barclays Aggregate (7.6)Source: S&P Capital IQ, MSCI, Bloomberg.Past performance is no guarantee of future results.

Benchmark and Sector Total Returns 8/31/08-11/30/08

During the fourth quarter of 2008, the S&P declined 22.6% in price, which was the worst quarterly price performance since the 23.2% drop during the fourth quarter of 1987. In addition, the “500” sequentially sank 9.1%, 16.9%, and 7.5% in price in September, October and November of that year, as the market anticipated, and then responded to, the Lehman collapse. During that three-month stretch, there was but one place to hide among global assets. Other than U.S Treasury bonds – the iShares Barclays 20+Year U.S. Treasury Bond Fund (TLT 119, NR) gained nearly 13% during those three months – 12 other global asset classes declined more than 7.6% on a total return basis.


From a global equity perspective, the worst performer was the S&P 500 High Beta index, which fell 48.8% including dividends, followed by the MSCI-Emerging Markets Index (-44.6%), and the S&P MidCap 400 Index (-36.6%). Other S&P 500-related Indices held up better that the S&P 500 Index itself, which declined 29.6%. In particular, the S&P 500 Low Volatility Index dropped 19.3% while the S&P 500 Dividend Aristocrats slipped 17.9%. Other asset classes that took it on the chin in late 2008 included the NAREIT-Equity Only Index, which tumbled 47.5% including dividends, the S&P GSCI (a broad commodities benchmark), which slumped 46.5% and the S&P Preferred Stock Index that slid 30.2%. Only the Barclays Aggregate Bond Index declined less than 10%. At the risk of “piling on,” I remind you that all 10 sectors within the S&P 500 fell, even when including dividends. The worst performer was not Financials, which fell 39.8%, but Materials, which tumbled 42.4%. Financials started tumbling earlier in the year and, in our opinion, many probably thought that the demise of Lehman would trigger a global depression, thus undermining the demand for Materials by emerging market nations. The Technology (-36.3%), Industrials (-33.7%) and Consumer Discretionary (-32.6%) sectors were the other cyclical groups that fell more than the broad market. Not surprisingly, the defensive sectors held up better than the S&P 500, even though all five declined in total return. The Consumer Staples group fell the least (-13.7%), followed by Telecom Services (-14.6%), Utilities (-19.4%), Health Care (-22.9%) and Energy (-27.2%). Finally, since misery loves company, we see that 127 of the 130 sub-industries in the S&P 500 declined in price, from less than 10% for Distributors, Household Products, and HyperMarkets & Super Centers, to 80% or more for the Health Care Facilities, Industrial REITs, and Multi-line Insurance groups. The only sub-industries to rise in price from September through November 2008 were Brewers (+3.0%), Agricultural Products (+7.5%), and Education Services (+20.7%). I embarked on this little depressing look-back, not because we believe another Lehman-like event is likely, but because it can’t be dismissed. Indeed, we believe the overall picture in Europe has been improving, as encouraging demand for recent European sovereign debt auctions has buoyed investor optimism, while the low-cost ECB bank loans have lessened the risk of a credit crunch. The severity of the recession in Europe remains a wildcard. Our forecast is for a rough first half, followed by a slow uphill climb in the second half of this year. So there you have it. Should there be another Lehman-like meltdown, and you wish to use history as a guide (though it’s never gospel), I would suggest closing your eyes and preparing for a swift and severe sell-off in nearly all major asset classes, sectors and sub-industries, even with dividends added back. I would also venture to guess that you’ll probably be glad you didn’t sell your Treasuries.

A LESSON FROM LEHMAN


Companies Show Above Average Credit Ratings Strength, Diane Vazza and Evan Gunter Companies within the S&P 500 index have strong credit measures, as the high proportion of investment-grade-rated entities demonstrates. Standard & Poor's Ratings Services rates 75% of S&P 500 companies investment grade ('BBB-' and higher) and 12% speculative grade ('BB+' and lower). By comparison, 49% of all U.S. companies that Standard & Poor's rates are investment grade. Debt is an important source of funding for many of the companies within in the S&P 500, which have $6.9 trillion in total debt, compared with $12.5 trillion in market capitalization (as of Jan. 31, 2012).The relative credit strength of the S&P 500 is not surprising considering that these are the largest companies in the U.S., and they typically have the greatest capacity to raise equity financing. The investment-grade companies represent 87% of the total market capitalization of the S&P 500 and 94% of its total debt. The industrials and utilities sectors have the strongest credit profiles relative to other sectors. Standard & Poor's rates 94% of companies in these sectors investment grade. The utilities sector has the highest potential for upgrades, as six companies (or 18.2%) in the sector have positive outlooks or ratings on CreditWatch positive. The telecommunication services sector is at the greatest risk of downgrades, with two of the rated companies (28.6%) with negative outlooks or ratings on CreditWatch negative. The financials sector has the most companies at risk of downgrades, with 15 (or 19.7%) that have negative outlooks or ratings on CreditWatch negative (see tables 5 and 6).

S&P 500 COMPANIES SHOW ABOVE AVERAGE CREDIT RATINGS STRENGTH

Sector Total CountInvestment-Grade (Count)

Speculative-Grade (Count)

Positive Outlook or CreditWatch (% of Rated)

Negative Outlook or CreditWatch (% of Rated)

Consumer Discretionary 80 50 17 7.46 10.45Consumer Staples 42 37 4 9.76 9.76Energy 42 29 10 5.13 15.38Financials 81 70 6 9.21 19.74Healthcare 52 40 3 4.65 11.63Industrials 61 50 3 7.55 7.55Information Technology 72 41 5 10.87 2.17Materials 30 23 5 10.71 3.57Telecommunication Services 7 2 5 0.00 28.57Utilities 33 31 2 18.18 6.06Grand Total 500 373 60 8.78 10.85

Table 1 Global Industry Classification Standard (GICS) Sector Distribution

Data as of January 31, 2012. Source: Standard & Poor's Global Fixed Income Research and S&P Capital IQ.


Standard & Poor's credit ratings are opinions about credit risk, measured on a scale from 'AAA', for the strongest issuers, to 'D', which is reserved for issuers that have defaulted on financial commitments.



Upgrade And Downgrade Risks Are Roughly Equal Across the entire S&P 500, 9% of companies are at the greatest risk of downgrades, and 8% are at the greatest risk of upgrades. We assign positive or negative outlooks to issuer ratings when we believe that an event or trend has at least a one-in-three likelihood of resulting in a rating action over the intermediate term for investment-grade entities (generally up to two years) and over the shorter term for speculative-grade entities (generally up to one year). Standard & Poor's places a rating on CreditWatch if there is at least a one-in-two likelihood of a rating change within 90 days. Although these numbers suggest that credit quality may decline in the near to medium term, the outlook for S&P 500 companies is less negative than that of the U.S. corporate sector as a whole, which has a negative bias of 13.5%, compared with a positive bias of just 7.6% at the end of January. Corporate funding costs rise considerably when moving down the ratings scale to speculative grade from investment grade. A broader mix of investors and institutions can buy and hold investment-grade bonds, so companies rated 'BBB-' and higher typically borrow at lower rates than speculative-grade-rated companies. At the end of January, U.S. corporate bonds rated 'BBB' had yields 1.7%-3.4% lower than the yields of bonds rated 'BB' (see chart 2). A few companies on the S&P 500 have the potential to move to investment grade from speculative grade, and vice versa. Zions Bancorp (BBB-/Negative/A-3) is a potential fallen angel, meaning that it's at risk of being downgraded to speculative grade from investment grade. On the other hand, four companies on the S&P 500 are potential rising stars, meaning Standard & Poor's could upgrade them to investment grade from speculative grade, which would likely lead to lower credit costs. These four companies are rated 'BB+' with positive outlooks: Wynn Resorts Ltd, Starwood Hotels & Resorts Worldwide Inc., Jabil Circuit Inc., and Harman International Industries Inc.



Rating Count by RatingPositive Outlook or CreditWatch (count)

Negative Outlook or CreditWatch (count)

Market Capitalization ($ bln)

Total Debt ($ bln)

AAA 4 0 0 855.9 47.9AA 17 0 4 1852.1 732.0A 143 4 17 5251.5 4436.6BBB 207 27 13 2882.9 1286.6BB 50 6 9 428.0 319.9B and below 9 1 4 30.2 58.4NR 70 0 0 1157.3 58.8Grand Total 500 38 47 12,457.9 6,940.4

Table 2


Rated Companies On The S&P 500 Are Predominantly Investment Grade Although the majority of S&P 500 companies is investment grade, the ratings have declined since 2008, just as the ratings on most companies Standard & Poor's rates have declined. Within the S&P 500, the share of companies rated 'AA' or 'A' has declined to 32% from 37%, while the share of 'BBB' rated entities has increased to 41% from 36%. Despite this shift, the median rating has remained 'BBB+' for the S&P 500 companies--three notches higher than the median rating of 'BB+' for all rated U.S. companies.

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Distribution of S&P 500 Companies by Rating




As an alternative to looking at the distribution of ratings by number of companies, we also measured the distribution by market capitalization and total debt. Although 'BBB' rated companies outnumber any other rating category, companies rated 'A' dominate based on market capitalization and total debt. Companies rated in the 'A' category have a total market capitalization of $5.3 trillion and $4.4 trillion in total debt. Currently, 14% of the companies in the S&P 500 are unrated, up from 9% three years earlier. Because Standard & Poor's rated a higher proportion of the index three years ago, speculative-grade companies made up a larger percentage of the index (at 16%).

Chart 2

U.S. Financial and Nonfinancial Corporate Bond Yields by Rating Category

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Total Debt and Cash of the S&P 500

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Total debt of the S&P 500 companies declined to $6.9 trillion at the end of 2011 from $9.5 trillion in 2007. As the debt level has declined, firms' cash holdings increased to $1.3 trillion from $1.1 trillion (see chart 3). As net debt, or debt minus cash, has declined, the ratio of net debt has fallen to 1.13x EBITDA from 1.55x in 2010. As this ratio decreases, it indicates increased credit strength. Meanwhile, debt remained relatively stable as a proportion of assets, at 0.31 (see chart 4).



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Credit Ratios of the S&P 500

Data as of December 31, 2011. Source: Standard & Poor's Global Fixed Income Research and S&P Capital IQ.

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Data as of 12/31/2011. Excludes S&P 500 Companies from the financial sector, as well corporates with significant financial sector exposure. Note: Total Enterprise Value is not calculated for banks, brokers or financial services companies as most of the inputs used in a TEV calculation represent operating and not financial assets and liabilities for these companies. Source: Standard & Poor's Global Fixed Income Research & S&P Capital IQ.



Table 4


In terms of average credit measures and valuations for nonfinancial corporate entities, companies Standard & Poor's rates highly are larger, on average, both in terms of market capitalization and total enterprise value. Market capitalization to total enterprise values are closer together for higher-rated entities than they are for lower-rated ones. (Total enterprise value is the combined value of the firm's debt plus equity, minus cash and short-term investments.) Companies rated 'AAA' have higher market capitalization than total enterprise value, on average, because these entities tend to have a high levels of cash on the balance sheets or relatively low debt. In contrast, 'B' rated companies have an average total enterprise value that is more than double their average market capitalization. This shows these speculative-grade entities have higher proportions of debt relative to equity within their capital structures. Surprisingly, companies Standard & Poor's does not rate show many average credit measures comparable to those of 'AAA' rated entities. The companies that are not rated have debt to debt and equity and total debt to EBITDA that compare closely to the averages of 'AAA' companies. Partially, this is because of a selection bias. Some of the largest unrated companies within the S&P 500, such as Apple Inc, have strong equity financing, little to no debt, and strong cash reserves. Their credit measures are so strong because they have little need to raise debt financing, and they do not have bonds outstanding, so they may not have a credit rating from Standard & Poor's.

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Value ($ blns)Apple Inc. NR 425.6 General Electric Company AA+ 520.7

Exxon Mobil Corporation AAA 401.4 Exxon Mobil Corporation AAA 413.4Microsoft Corporation AAA 247.8 Apple Inc. NR 395.5International Business Machines Corp. A+ 223.4 Wal-Mart Stores Inc. AA 267.0

Wal-Mart Stores Inc. AA 210.1International Business Machines Corp. A+ 242.9

Chevron Corporation AA 205.4 AT&T, Inc. A- 236.1General Electric Company AA+ 197.5 Microsoft Corporation AAA 209.9Google Inc. AA- 188.6 Procter & Gamble Co. AA- 204.4Johnson & Johnson AAA 180.0 Verizon Communications Inc. A- 197.8AT&T, Inc. A- 174.3 Chevron Corporation AA 195.6

Top Ten Nonfinancial Companies Ranked by Market Capitalization and Total Enterprise Value

Data as of January 31, 2012. Note: Total Enterprise Value is not calculated for banks, brokers or financial services companies as most of the inputs used in a TEV calculation represent operating and not financial assets and liabilities for these companies. Source: Standard & Poor's Global Fixed Income Research & S&P Capital IQ.



There are many ways to gauge the size of a company. For nonfinancials, we used market capitalization to rank companies by the size of their equity, and we used total enterprise value to rank them by a measure that combines debt with equity (see table 4). The top ten companies ranked by market capitalization compared with the top 10 ranked by total enterprise value have a lot of overlap and a few differences. Two of the companies from the top 10 by market capitalization, Johnson & Johnson and Google Inc., did not make it onto the top total enterprise value list. Both of these firms have holdings of cash and cash equivalents in the top 4% of S&P 500. In turn, Verizon Communications and Procter & Gamble Co. made the list of the top 10 total enterprise values but not the top 10 by market capitalization. A note on the methodology: we have used financial measures from S&P Capital IQ for the charts and tables within this report. In some cases, these measures may diverge from those Standard & Poor's Ratings Services uses. Standard & Poor's Ratings Services makes adjustments to company-reported financials according to its criteria. The S&P 500 is a large-cap index that is the most widely-followed measure of U.S. equity market performance and corporate profitability. (See www.standardandpoors.com for details of the S&P 500 index construction).


http://www.standardandpoors.com/


Table 5

Company Sector Rating Outlook / CreditWatchAbbott Laboratories Healthcare AA CreditWatch NegativeConocoPhillips Energy A CreditWatch NegativeTyco International Ltd. Industrials A- CreditWatch NegativeComputer Sciences Corporation Information Technology BBB+ CreditWatch NegativeNews Corp. Consumer Discretionary BBB+ CreditWatch NegativeMurphy Oil Corporation Energy BBB CreditWatch NegativeSunoco, Inc. Energy BB+ CreditWatch NegativeBerkshire Hathaway Inc. Financials AA+ Negative OutlookCME Group Inc. Financials AA Negative OutlookMedtronic, Inc. Healthcare AA- Negative OutlookState Street Corp. Financials A+ Negative OutlookThe Bank of New York Mellon Corporation Financials A+ Negative OutlookWells Fargo & Company Financials A+ Negative OutlookHalliburton Company Energy A Negative OutlookUnited Technologies Corp. Industrials A Negative OutlookWalgreen Co. Consumer Staples A Negative OutlookAFLAC Inc. Financials A- Negative OutlookBank of America Corporation Financials A- Negative OutlookCitigroup, Inc. Financials A- Negative OutlookLowe's Companies Inc. Consumer Discretionary A- Negative OutlookMetLife, Inc. Financials A- Negative OutlookMorgan Stanley Financials A- Negative OutlookThe Allstate Corporation Financials A- Negative OutlookThe Goldman Sachs Group, Inc. Financials A- Negative OutlookV.F. Corporation Consumer Discretionary A- Negative OutlookAvon Products Inc. Consumer Staples BBB+ Negative OutlookDENTSPLY International Inc. Healthcare BBB+ Negative OutlookExpress Scripts Inc. Healthcare BBB+ Negative OutlookHospira Inc. Healthcare BBB+ Negative OutlookBig Lots Inc. Consumer Discretionary BBB Negative OutlookCapital One Financial Corp. Financials BBB Negative OutlookEntergy Corporation Utilities BBB Negative OutlookGenworth Financial Inc. Financials BBB Negative OutlookH&R Block, Inc. Consumer Discretionary BBB Negative OutlookZions Bancorp. Financials BBB- Negative OutlookOwens-Illinois, Inc. Materials BB+ Negative OutlookR.R. Donnelley & Sons Company Industrials BB+ Negative OutlookAlpha Natural Resources, Inc. Energy BB Negative OutlookFrontier Communications Corporation Telecommunication Services BB Negative OutlookIron Mountain Inc. Industrials BB- Negative OutlookNRG Energy, Inc. Utilities BB- Negative OutlookPulteGroup, Inc. Consumer Discretionary BB- Negative OutlookDean Foods Company Consumer Staples B+ Negative OutlookSprint Nextel Corp. Telecommunication Services B+ Negative OutlookSUPERVALU Inc. Consumer Staples B+ Negative OutlookSears Holdings Corporation Consumer Discretionary CCC+ Negative Outlook

Potential Downgrades of the S&P 500

Data as of January 31, 2012. Source: Standard & Poor's Global Fixed Income Research & S&P Capital IQ.



Table 6 Potential Upgrades of the S&P 500

Company Sector Rating Outlook / CreditWatchNYSE Euronext, Inc. Financials A+ CreditWatch PositiveOracle Corporation Information Technology A CreditWatch PositiveGoodrich Corp. Industrials BBB+ CreditWatch PositiveNortheast Utilities Utilities BBB+ CreditWatch PositiveProgress Energy Inc. Utilities BBB+ CreditWatch PositiveConstellation Energy Group, Inc. Utilities BBB- CreditWatch PositiveRoper Industries Inc. Industrials BBB- CreditWatch PositiveWilliams Companies, Inc. Energy BBB- CreditWatch PositiveVulcan Materials Company Materials BB CreditWatch PositiveAdvanced Micro Devices, Inc. Information Technology B+ CreditWatch PositiveThe Coca-Cola Company Consumer Staples A+ Positive OutlookUnitedhealth Group, Inc. Healthcare A- Positive OutlookKeyCorp Financials BBB+ Positive OutlookAssurant Inc. Financials BBB Positive OutlookAvery Dennison Corporation Industrials BBB Positive OutlookBemis Company, Inc. Materials BBB Positive OutlookFifth Third Bancorp Financials BBB Positive OutlookHCP, Inc. Financials BBB Positive OutlookLife Technologies Corporation Healthcare BBB Positive OutlookMead Johnson Nutrition Company Consumer Staples BBB Positive OutlookPall Corp. Industrials BBB Positive OutlookPinnacle West Capital Corporation Utilities BBB Positive OutlookPrincipal Financial Group Inc. Financials BBB Positive OutlookPublic Service Enterprise Group Inc. Utilities BBB Positive OutlookTE Connectivity Ltd. Information Technology BBB Positive OutlookAllegheny Technologies Inc. Materials BBB- PositiveAmeren Corporation Utilities BBB- Positive OutlookHealth Care REIT, Inc. Financials BBB- Positive OutlookMolson Coors Brewing Company Consumer Staples BBB- Positive Outlookpriceline.com Incorporated Consumer Discretionary BBB- Positive OutlookTyson Foods Inc. Consumer Staples BBB- Positive OutlookUnum Group Financials BBB- Positive OutlookYum! Brands, Inc. Consumer Discretionary BBB- Positive OutlookHarman International Industries Inc. Consumer Discretionary BB+ Positive OutlookJabil Circuit Inc. Information Technology BB+ Positive OutlookStarwood Hotels & Resorts Worldwide Inc. Consumer Discretionary BB+ Positive OutlookWynn Resorts Ltd. Consumer Discretionary BB+ Positive OutlookCONSOL Energy Inc. Energy BB Positive Outlook

Data as of January 31, 2012. Source: Standard & Poor's Global Fixed Income Research & S&P Capital IQ.



SECTOR SNAPSHOTS

Sector Snapshots S&P Capital IQ and S&P Indices collaborated to produce these monthly performance views for the top ten sectors of the S&P 500.

Market Observations Covering Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunications Utilities

Industry Specific Data S&P Capital IQ uses the Global Industry Classification Standard (GICS®) to categorize and tag all companies within our database. We also collect industry specific and supplemental data for 16 industries, including Airlines, Banks, Healthcare, Hotels and Gaming, Insurance, Metals and Mining, Oil and Gas, Retail, Semiconductors, and Telecom, Cable, and Wireless. To learn more about GICS® or our industry specific and supplemental data items please contact [email protected]



CONSUMER DISCRETIONARY SECTOR SNAPSHOT

Equities | U.S.


CONSUMER STAPLES SECTOR SNAPSHOT

Equities | U.S.


ENERGY SECTOR SNAPSHOT

Equities | U.S.


FINANCIALS SECTOR SNAPSHOT

Equities | U.S.


HEALTHCARE SECTOR SNAPSHOT

Equities | U.S.


INDUSTRIALS SECTOR SNAPSHOT

Equities | U.S.


INFORMATION TECHNOLOGY SECTOR SNAPSHOT

Equities | U.S.


MATERIALS SECTOR SNAPSHOT

Equities | U.S.


TELECOMMUNICATION SERVICES SECTOR SNAPSHOT

Equities | U.S.


UTILITIES SECTOR SNAPSHOT

Equities | U.S.


M&A MARKET

Our Transaction Data S&P Capital IQ covers 1,300,000+ transactions globally. All transaction information is seamlessly integrated in the S&P Capital IQ platform and S&P Capital IQ Excel Plug-In, and can be viewed alongside the most accurate company fundamentals. To learn more about our transaction coverage, history, and collection process contact [email protected].

M&A Market S&P Capital IQ provides detailed information on M&A and financing transactions covering the most active markets in the world. We track all publicly announced mergers, acquisitions, private placements, public offerings, shelf registrations, equity buybacks, and bankruptcies. Transaction data is updated daily from various sources such as regulatory filings, company websites, newsletters, trade publications, and press releases.

Market Observations Covering M&A Activity M&A Valuations Leveraged Buyouts Strategic M&A Private Equity Investments Pipes Venture Capital



Notes: Figures are based on announce dates and on a trailing three months basis through September 30, 2011. Includes both closed and pending transactions as well as those without transaction values.

Strategic vs. Financial Buyer M&A (North American Targets)

Strategic vs. Financial Buyer M&A (European Targets)

M&A ACTIVITY BY QUARTER

Transactions | North America and Europe

Source: S&P Capital IQ



Notes: Includes M&A transactions involving US and Canadian targets where relevant financials were available to calculate EBITDA and Net Income valuation multiples. Figures are based announce dates on a trailing three months basis through September 30, 2011. Includes both closed and pending transactions.

Median Enterprise Value / EBITDA

Median Enterprise Value / LTM Net Income

M&A ACTIVITY BY QUARTER (NORTH AMERICA)





Notes: Includes M&A transactions involving European targets where relevant financials were available to calculate EBITDA and Net Income valuation multiples. Figures are based on announce dates on a trailing three months basis through September 30, 2011. Includes both closed and pending transactions.

Median Enterprise Value / EBITDA

Median Equity Value / LTM Net Income

M&A ACTIVITY BY QUARTER (EUROPE)

Transactions | Europe




Notes: Figures are based on transaction announce dates. Includes both closed and pending transactions. N/A = Not available. N/M = Not made.

M&A VALUATION BY SECTOR AND DEAL SIZE-NORTH AMERICA

Transactions | North America



Median Implied Enterprise Value / EBITDA (North American Targets)

(As of 1/31/12) Last Twelve Months Ending January 31st of:2008 2009 2010 2011 2012

Target's Sector Less Than

$500M Greater

Than $500M Less Than

$500M Greater


$500M Greater


$500M Greater


$500M Greater

Than $500M Consumer Discretionary 9.3x 11.2x 10.7x 7.8x 7.3x 11.6x 12.1x 8.1x 10.6x 8.1xConsumer Staples 10.5x 10.9x 6.8x 10.1x 12.0x 9.5x 5.3x 8.3x 9.3x 4.6xEnergy 6.0x 11.4x 6.8x 9.8x 5.6x 9.5x 10.9x 14.2x 9.4x 12.0xFinancials 11.4x 15.1x 12.7x 10.6x 16.0x 9.4x 12.1x 14.7x 12.8x 13.4xHealthcare 15.0x 16.3x 14.0x 12.7x 7.9x 9.7x 12.0x 16.1x 11.8x 10.5xIndustrials 8.3x 12.0x 8.5x 12.9x 5.7x 9.0x 7.0x 9.4x 8.2x 10.9xInformation Technology 16.3x 15.0x 11.2x 12.7x 8.1x 12.9x 12.1x 14.5x 12.8x 14.9xMaterials 9.9x 9.0x 8.5x 11.3x 11.1x 7.2x 6.9x 12.3x 7.9x 9.6xTelecommunication Services 8.7x 9.6x 7.7x 6.7x 4.9x 7.3x 6.2x 6.5x 6.2x 7.6xUtilities 16.3x 8.9x 6.6x 11.0x 6.8x 30.3x 12.1x 8.9x 6.4x 11.4x

Median Implied Equity Value / LTM Net Income (North American Targets)



$500M Greater


$500M Greater


$500M Greater


$500M Greater


$500M Greater

Than $500M Consumer Discretionary 12.3x 24.8x 13.8x 20.7x 8.6x 26.3x 16.4x 17.4x 16.2x 20.5xConsumer Staples 14.9x 25.2x 7.5x 24.1x 28.1x 14.0x 11.0x 14.5x 21.1x 12.1xEnergy 16.9x 25.1x 16.7x 20.1x 10.6x 17.8x 20.3x 36.2x 11.7x 22.7xFinancials 24.2x 25.3x 19.2x 18.7x 18.1x 16.6x 15.8x 24.5x 15.5x 14.5xHealthcare 23.5x 41.9x 19.6x 29.2x 15.1x 18.1x 21.7x 33.1x 18.4x 21.9xIndustrials 16.7x 29.0x 10.7x 23.0x 16.8x 24.7x 15.8x 22.9x 14.6x 22.0xInformation Technology 22.9x 32.7x 19.2x 22.3x 15.0x 33.2x 21.7x 41.2x 17.5x 39.9xMaterials 12.2x 17.2x 14.8x 24.2x 12.6x 0.0x 12.7x 31.3x 12.7x 17.3xTelecommunication Services 21.0x 28.7x 15.3x N/A 0.0x 44.9x 75.6x 0.9x N/A 44.5xUtilities 87.2x 25.9x 14.7x 30.6x 15.2x N/A 20.6x 19.5x 14.6x 17.5x


Notes: Figures are based on transaction announce dates. Includes both closed and pending transactions. N/A = Not available. N/M = Not made.

M&A VALUATION BY SECTOR AND DEAL SIZE-EUROPE

Transactions | Europe



Median Implied Enterprise Value / EBITDA (European Targets)



$500M Greater


$500M Greater


$500M Greater


$500M Greater


$500M Greater

Than $500M

Consumer Discretionary 12.0x 13.2x 8.2x 12.2x 7.9x 9.6x 9.0x 9.6x 9.0x 9.1x

Consumer Staples 11.3x 14.3x 11.7x 11.4x 8.3x 14.2x 9.6x 9.4x 9.3x 11.6x

Energy 14.3x 11.7x 9.5x 13.1x 5.6x 6.6x 5.2x 9.5x 6.2x 8.6x

Financials 20.4x 14.8x 16.5x 18.7x 14.2x 15.5x 15.3x 25.8x 13.2x 19.9x

Healthcare 14.0x 15.6x 11.6x 20.5x 10.0x 16.8x 10.6x 11.4x 10.8x 12.6x

Industrials 8.5x 12.1x 7.1x 10.1x 7.8x 9.1x 7.4x 10.2x 7.8x 11.5x

Information Technology 11.7x 16.2x 8.8x 12.9x 8.7x 13.8x 8.7x 16.9x 10.3x 11.4x

Materials 8.0x 8.4x 7.0x 7.3x 6.6x 4.3x 9.3x 10.6x 6.5x 9.8x

Telecommunication Services 6.8x 11.0x 7.4x 8.6x 5.8x 5.8x 5.8x 4.4x 4.7x 7.2x

Utilities 9.7x 13.2x 10.8x 11.0x 10.0x 10.1x 7.5x 8.4x 11.3x 8.8x

Median Implied Equity Value / LTM Net Income (European Targets)



$500M Greater


$500M Greater


$500M Greater


$500M Greater


$500M Greater

Than $500M Consumer Discretionary 19.3x 19.8x 16.5x 22.7x 13.3x 23.5x 16.3x 68.9x 15.6x 18.6xConsumer Staples 17.4x 31.9x 14.5x 30.3x 15.7x 20.8x 12.6x 32.9x 15.2x 23.6xEnergy 19.6x 23.7x 16.5x 33.5x 13.9x 16.6x 13.5x 20.5x 10.9x 15.8xFinancials 15.8x 17.5x 12.0x 21.0x 14.1x 24.3x 16.1x 19.8x 14.4x 20.3xHealthcare 30.3x 30.1x 21.8x 46.3x 22.6x 0.0x 15.8x 25.2x 20.0x 21.5xIndustrials 17.0x 20.3x 12.0x 19.5x 13.4x 17.3x 11.6x 19.0x 14.5x 22.5xInformation Technology 19.9x 36.1x 16.8x 28.8x 18.6x 39.7x 14.3x 30.5x 21.2x 32.6xMaterials 18.2x 16.6x 14.1x 16.1x 10.1x 7.9x 15.8x 21.5x 9.3x 18.7xTelecommunication Services 16.5x 27.2x 11.2x 20.1x 20.8x 14.5x 15.3x 8.2x 14.5x 15.3xUtilities 20.8x 21.2x 19.2x 14.5x 14.5x 17.3x 14.3x 13.3x 12.4x 17.5x


Notes: Figures are based on transaction announce dates. Includes both closed and pending transactions as well as those without transaction values.

M&A ACTIVITY BY SECTOR



North American Target M&A


Sector # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil)

Consumer Discretionary 2,785 $ 219,019 2,095 $ 43,038 1,860 $ 150,265 2,279 $ 76,417 2,499 $ 68,886 Consumer Staples 480 $ 49,665 402 $ 115,974 344 $ 34,612 435 $ 47,101 446 $ 14,507 Energy 894 $ 144,606 733 $ 77,399 875 $ 134,512 1,117 $ 150,746 1,095 $ 191,259 Financials 1,871 $ 276,306 1,982 $ 221,420 2,423 $ 78,629 3,798 $ 172,913 4,478 $ 255,893 Healthcare 1,215 $ 143,600 1,050 $ 207,847 998 $ 114,444 1,352 $ 122,744 1,347 $ 178,372 Industrials 2,472 $ 119,083 2,130 $ 73,047 1,717 $ 60,060 2,181 $ 75,951 2,249 $ 83,730 Information Technology 2,380 $ 180,260 1,931 $ 69,081 1,716 $ 71,827 2,202 $ 111,932 2,214 $ 111,804 Materials 1,296 $ 179,303 979 $ 76,962 1,055 $ 24,398 1,314 $ 63,775 1,251 $ 88,732 Telecommunication Services 185 $ 47,292 127 $ 45,495 103 $ 18,400 130 $ 36,347 117 $ 10,605 Utilities 208 $ 73,791 153 $ 18,093 194 $ 11,611 222 $ 79,089 255 $ 39,626

Grand Total 13,786 $ 1,432,923 11,582 $ 948,355 11,285 $ 698,757 15,030 $ 937,015 15,951 $ 1,043,414

European Target M&A



Consumer Discretionary 4,302 $ 230,537 3,567 $ 102,487 2,917 $ 53,561 3,313 $ 58,276 3,495 $ 82,509 Consumer Staples 1,337 $ 104,131 1,059 $ 40,960 836 $ 37,141 1,026 $ 37,980 989 $ 30,703 Energy 470 $ 65,227 315 $ 38,578 311 $ 45,680 380 $ 47,151 390 $ 45,155 Financials 2,381 $ 454,567 2,220 $ 228,866 2,829 $ 129,071 3,770 $ 153,930 3,988 $ 176,801 Healthcare 860 $ 83,449 794 $ 36,591 652 $ 63,115 817 $ 28,018 740 $ 38,040 Industrials 4,547 $ 144,336 4,118 $ 128,972 2,856 $ 93,160 3,341 $ 133,128 3,524 $ 113,708 Information Technology 2,398 $ 68,661 1,982 $ 35,656 1,474 $ 19,545 1,744 $ 20,855 1,797 $ 42,744 Materials 1,387 $ 104,408 1,093 $ 51,801 721 $ 13,885 920 $ 62,665 919 $ 50,962 Telecommunication Services 312 $ 102,252 194 $ 19,089 198 $ 28,812 228 $ 66,571 203 $ 39,268 Utilities 491 $ 199,030 470 $ 88,901 469 $ 71,180 571 $ 51,901 560 $ 64,617

Grand Total 18,485 $ 1,556,599 15,812 $ 771,901 13,263 $ 555,149 16,110 $ 660,474 16,605 $ 684,507



LEVERAGE BUYOUTS BY SECTOR



North American Target Leveraged Buyouts


Sector

# of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil)

Consumer Discretionary 560 $ 110,235 370 $ 13,918 306 $ 9,054 313 $ 33,149 292 $ 12,022 Consumer Staples 95 $ 14,534 67 $ 1,255 56 $ 185 58 $ 11,048 55 $ 3,065 Energy 60 $ 11,424 40 $ 6,698 30 $ 1,794 52 $ 5,825 24 $ 8,021 Financials 142 $ 46,648 151 $ 23,073 200 $ 2,820 183 $ 3,692 148 $ 4,506 Healthcare 128 $ 20,578 88 $ 8,280 66 $ 7,033 118 $ 8,792 75 $ 23,323 Industrials 401 $ 41,469 276 $ 6,385 183 $ 2,343 200 $ 7,088 205 $ 12,072 Information Technology 164 $ 56,089 151 $ 9,644 121 $ 6,010 158 $ 21,190 138 $ 18,104 Materials 105 $ 10,883 101 $ 2,507 65 $ 1,475 94 $ 5,791 85 $ 2,187 Telecommunication Services 13 $ 28,924 11 $ 6 3 $ 1,534 12 $ 4,449 7 $ 1,001 Utilities 22 $ 43,712 8 $ 1,973 11 $ 580 13 $ 679 11 $ 1,255

Grand Total 1,690 $ 384,497 1,263 $ 73,738 1,041 $ 32,828 1,201 $ 101,703 1,040 $ 85,555

European Target Leveraged Buyouts


Sector

# of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil)

Consumer Discretionary 788 $ 54,945 653 $ 18,987 551 $ 9,065 604 $ 15,141 627 $ 23,844 Consumer Staples 175 $ 8,034 149 $ 4,115 116 $ 4,095 132 $ 3,084 116 $ 1,507 Energy 18 $ 3,496 19 $ 6,653 10 $ 1,798 20 $ 38 13 $ 8,904 Financials 176 $ 25,503 182 $ 11,714 224 $ 7,506 253 $ 10,799 190 $ 9,924 Healthcare 107 $ 37,786 80 $ 4,106 61 $ 2,279 105 $ 6,382 83 $ 434 Industrials 654 $ 42,593 614 $ 43,100 365 $ 44,100 461 $ 20,292 409 $ 19,332 Information Technology 211 $ 8,005 208 $ 5,707 137 $ 3,758 148 $ 3,342 162 $ 7,496 Materials 179 $ 12,079 164 $ 7,528 94 $ 2,232 131 $ 5,451 102 $ 7,996 Telecommunication Services 27 $ 24,141 8 $ - 12 $ 1,131 16 $ 4,455 19 $ 10,504 Utilities 20 $ 24,745 21 $ 1,123 28 $ 871 51 $ 3,901 56 $ 6,398

Grand Total 2,355 $ 241,327 2,098 $ 103,032 1,598 $ 76,835 1,921 $ 72,885 1,777 $ 96,340



STRATEGIC M&A BY SECTOR



North American Target Strategic M&A



Consumer Discretionary 2,225 $ 108,783 1,725 $ 29,120 1,554 $ 141,210 1,966 $ 43,268 2,207 $ 56,864 Consumer Staples 385 $ 35,131 335 $ 114,719 288 $ 34,427 377 $ 36,053 391 $ 11,442 Energy 834 $ 133,181 693 $ 70,701 845 $ 132,718 1,065 $ 144,921 1,071 $ 183,238 Financials 1,729 $ 229,657 1,831 $ 198,347 2,223 $ 75,809 3,615 $ 169,221 4,330 $ 251,387 Healthcare 1,087 $ 123,022 962 $ 199,568 932 $ 107,411 1,234 $ 113,952 1,272 $ 155,050 Industrials 2,071 $ 77,614 1,854 $ 66,662 1,534 $ 57,717 1,981 $ 68,863 2,044 $ 71,658 Information Technology 2,216 $ 124,170 1,780 $ 59,437 1,595 $ 65,817 2,044 $ 90,742 2,076 $ 93,700 Materials 1,191 $ 168,420 878 $ 74,456 990 $ 22,923 1,220 $ 57,984 1,166 $ 86,545 Telecommunication Services 172 $ 18,368 116 $ 45,488 100 $ 16,866 118 $ 31,897 110 $ 9,604 Utilities 186 $ 30,079 145 $ 16,120 183 $ 11,031 209 $ 78,410 244 $ 38,372

Grand Total 12,096 $ 1,048,426 10,319 $ 874,618 10,244 $ 665,929 13,829 $ 835,312 14,911 $ 957,859

European Target Strategic M&A



Consumer Discretionary 3,514 $ 175,592 2,914 $ 83,500 2,366 $ 44,496 2,709 $ 43,135 2,868 $ 58,665 Consumer Staples 1,162 $ 96,097 910 36,845 720 $ 33,047 894 $ 34,896 873 $ 29,196 Energy 452 $ 61,731 296 31,926 301 $ 43,882 360 $ 47,113 377 $ 36,251 Financials 2,205 $ 429,064 2,038 217,152 2,605 $ 121,564 3,517 $ 143,130 3,798 $ 166,878 Healthcare 753 $ 45,663 714 32,485 591 $ 60,835 712 $ 21,636 657 $ 37,605 Industrials 3,893 $ 101,743 3,504 85,872 2,491 $ 49,060 2,880 $ 112,836 3,115 $ 94,376 Information Technology 2,187 $ 60,656 1,774 29,950 1,337 $ 15,787 1,596 $ 17,513 1,635 $ 35,248 Materials 1,208 $ 92,329 929 44,273 627 $ 11,653 789 $ 57,214 817 $ 42,966 Telecommunication Services 285 $ 78,112 186 19,089 186 $ 27,681 212 $ 62,116 184 $ 28,764 Utilities 471 $ 174,285 449 87,778 441 $ 70,309 520 $ 48,000 504 $ 58,219

Grand Total 16,130 $ 1,315,272 13,714 668,869 11,665 $ 478,314 14,189 $ 587,589 14,828 $ 588,167



PRIVATE EQUITY INVESTMENTS BY SECTOR (NON-BUYOUTS)



North American Target Private Equity Investments


Sector # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) Consumer Discretionary 109 $ 7,263 88 $ 24,020 207 $ 7,241 324 $ 8,643 345 $ 7,110 Consumer Staples 24 $ 977 25 $ 433 72 $ 2,942 113 $ 2,506 109 $ 2,174 Energy 71 $ 5,245 40 $ 2,420 71 $ 4,704 129 $ 7,088 113 $ 8,081 Financials 120 $ 21,284 121 $ 17,183 483 $ 24,308 418 $ 18,888 490 $ 13,941 Healthcare 155 $ 3,310 191 $ 3,504 419 $ 4,200 750 $ 11,671 764 $ 8,484 Industrials 111 $ 4,932 82 $ 3,543 189 $ 3,564 349 $ 7,576 388 $ 6,949 Information Technology 307 $ 6,180 269 $ 3,759 571 $ 4,422 887 $ 12,176 954 $ 13,525 Materials 62 $ 1,012 69 $ 1,461 111 $ 3,712 182 $ 3,608 160 $ 4,670 Telecommunication Services 25 $ 1,047 18 $ 1,149 25 $ 375 29 $ 409 36 $ 838 Utilities 19 $ 1,622 28 $ 4,248 38 $ 4,652 64 $ 4,931 50 $ 5,942

Grand Total 1,003 $ 52,873 931 $ 61,719 2,186 $ 60,120 3,245 $ 77,496 3,409 $ 71,715

European Target Private Equity Investments


Sector # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) Consumer Discretionary 96 $ 15,670 114 $ 1,469 203 $ 6,637 231 $ 3,216 176 $ 3,999 Consumer Staples 33 2,025 31 $ 775 56 $ 1,136 67 $ 2,597 69 $ 576 Energy 23 1,761 8 $ 399 13 $ 1,411 38 $ 5,819 29 $ 5,970 Financials 68 9,331 99 $ 67,868 113 $ 56,586 230 $ 125,071 239 $ 52,029 Healthcare 51 395 71 $ 1,240 112 $ 1,026 138 $ 2,277 130 $ 1,848 Industrials 85 4,617 103 $ 4,122 188 $ 9,579 342 $ 22,643 306 $ 12,163 Information Technology 108 894 133 $ 1,033 175 $ 1,819 248 $ 5,436 243 $ 3,097 Materials 26 644 30 $ 550 57 $ 3,002 74 $ 4,066 73 $ 1,342 Telecommunication Services 8 248 13 $ 2,332 15 $ 1,073 15 $ 2,136 9 $ 153 Utilities 16 1,245 14 $ 2,110 18 $ 8,740 31 $ 3,484 28 $ 13,637

Grand Total 514 36,829 616 $ 81,898 950 $ 91,009 1,414 $ 176,745 1,302 $ 94,813



PRIVATE EQUITY INVESTMENTS IN PUBLIC ENTITIES BY SECTOR



North American Target PIPEs


Sector # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) Consumer Discretionary 249 $ 5,896 160 $ 3,385 209 $ 2,516 237 $ 1,394 223 $ 2,296 Consumer Staples 94 $ 548 66 $ 789 67 $ 1,566 70 $ 476 87 $ 1,117 Energy 679 $ 17,394 469 $ 5,437 557 $ 6,155 610 $ 7,755 493 $ 5,499 Financials 237 $ 45,091 479 $ 510,110 298 $ 40,898 272 $ 13,234 356 $ 10,686 Healthcare 451 $ 4,747 349 $ 2,475 382 $ 1,890 407 $ 2,407 354 $ 1,733 Industrials 301 $ 1,909 197 $ 4,512 219 $ 1,806 258 $ 1,236 225 $ 2,184 Information Technology 471 $ 5,528 327 $ 2,850 330 $ 1,290 384 $ 1,679 377 $ 1,694 Materials 1,719 $ 9,146 1,370 $ 10,792 1,908 $ 11,563 2,058 $ 9,367 1,548 $ 7,386 Telecommunication Services 57 $ 191 22 $ 3,727 28 $ 1,854 47 $ 501 29 $ 491 Utilities 39 $ 971 25 $ 2,251 44 $ 2,096 56 $ 447 41 $ 633

Grand Total 4,297 $ 91,420 3,464 $ 546,327 4,042 $ 71,636 4,399 $ 38,498 3,733 $ 33,720

European Target PIPEs


Sector # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil) # of Deals Value ($mil)Consumer Discretionary 45 $ 2,969 50 $ 868 42 $ 4,779 66 $ 6,122 61 $ 550 Consumer Staples 18 $ 212 16 $ 301 15 $ 1,107 23 $ 786 16 $ 544 Energy 43 $ 2,422 28 $ 663 57 $ 1,408 75 $ 2,895 49 $ 2,762 Financials 57 $ 14,233 79 $ 126,299 85 $ 81,611 105 $ 12,855 100 $ 34,134 Healthcare 47 $ 1,036 40 $ 1,140 49 $ 2,103 50 $ 408 42 $ 611 Industrials 69 $ 4,335 52 $ 2,277 58 $ 3,786 57 $ 3,944 57 $ 3,165 Information Technology 60 $ 854 68 $ 564 67 $ 2,760 82 $ 628 56 $ 950 Materials 54 $ 9,158 34 $ 717 50 $ 2,573 66 $ 1,820 43 $ 3,395 Telecommunication Services 5 $ 283 2 $ 27 6 $ 275 13 $ 573 7 $ 8

Utilities 19 $ 10,111 2 $ 646 14 $ 4,546 16 $ 1,298 16 $ 7,724 Grand Total 417 $ 45,614 371 $ 133,501 443 $ 104,947 553 $ 31,328 447 $ 53,844



VENTURE CAPITAL INVESTMENTS BY SECTOR



North American Target Venture Capital



Consumer Discretionary 314 $ 3,339 307 $ 2,976 414 $ 1,944 598 $ 2,882 690 $ 5,397 Consumer Staples 60 575$ 44 228$ 92 232$ 156 451$ 139 308$ Energy 125 5,115$ 110 4,956$ 84 908$ 124 3,463$ 121 4,910$ Financials 144 2,987$ 98 7,359$ 221 2,889$ 306 5,497$ 335 8,676$ Healthcare 756 9,873$ 697 6,680$ 958 6,882$ 1,079 6,484$ 1,053 8,672$ Industrials 221 2,843$ 260 2,442$ 346 3,347$ 384 3,596$ 440 9,123$ Information Technology 1,706 13,675$ 1,535 10,612$ 1,790 7,707$ 2,334 10,887$ 2,650 12,607$ Materials 126 702$ 97 739$ 128 522$ 170 923$ 151 2,454$ Telecommunication Services 53 1,030$ 26 337$ 37 409$ 27 1,804$ 19 89$ Utilities 34 485$ 42 1,386$ 60 138$ 90 1,182$ 76 2,241$

Grand Total 3,539 40,625$ 3,216 37,716$ 4,130 24,977$ 5,268 37,170$ 5,674 54,477$

European Target Venture Capital



Consumer Discretionary 314 $ 1,270 301 $ 2,150 268 $ 962 346 $ 2,905 327 $ 3,420 Consumer Staples 56 297$ 52 289$ 43 432$ 74 535$ 67 350$ Energy 40 1,715$ 36 1,113$ 22 374$ 38 3,943$ 32 1,644$ Financials 104 2,113$ 93 4,428$ 76 15,450$ 149 6,580$ 131 10,377$ Healthcare 370 2,200$ 351 1,750$ 282 1,445$ 304 1,482$ 309 1,408$ Industrials 260 1,904$ 245 2,540$ 195 1,999$ 309 6,341$ 274 16,607$ Information Technology 859 2,499$ 825 3,679$ 722 1,773$ 843 2,459$ 909 2,643$ Materials 69 559$ 87 461$ 67 995$ 96 1,646$ 90 1,843$ Telecommunication Services 33 269$ 31 266$ 14 110$ 22 302$ 13 23$ Utilities 40 488$ 38 526$ 53 5,379$ 64 2,650$ 50 5,083$

Grand Total 2,145 13,314$ 2,059 17,202$ 1,742 28,919$ 2,245 28,842$ 2,202 43,399$


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