2009 Fra Conference

8/9/2019 2009 Fra Conference

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Aqua Terra Asset Management, LLC


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Disclosure

This document provides only impersonal advice and/or statistical data and is not intended to meet objectives or suitability

requirements of any specific individual or account. The document should not be construed as a recommendation to buy or

sell any security.

All investments involve risk, including the loss of principal. Past results do not guarantee future performance. Further, the

investment return and principal value of an investment will fluctuate; thus an investors equity, when liquidated, may be

worth more or less than the original cost.

Investments that are concentrated in one or a few industries are subject to greater risk and volatility than more diversified

investments. Portfolios that invest in fixed income securities are subject to several general risks, including interest rate

risk, credit risk, and market risk, which could reduce the yield that an investor receives from his or her portfolio. Theserisks may occur from fluctuations in interest rates, a change to an issuer's individual situation orindustry, or events in the

financial markets. Subject to applicable investment guidelines, Aqua Terra may invest portions of Client accounts in

illiquid security investments. Investing in relatively illiquid (difficult to trade) securities may restrict Aqua Terra's ability

to dispose of investments in a timely fashion or at an advantageous pr ice, which may limit the ability to take full

advantage of market opportunities. Investments in small and mid-cap securities may involve a greater degree of risk that

investments in large-cap securities. Options involve risks and are not suitable for everyone. Option trading can be

speculative in nature and carry substantial risk of loss, including the loss of principal. Investments in foreign securities are

subject to greater volatility due to such factors as changes in currency rates, foreign taxation, differences in auditing andother financial standards, etc.

Danger!!!


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About Aqua Terra Asset Management LLC

y Aqua Terra Asset Management (Aqua Terra) is an institutional investment firm that manages equity portfolios of

companies with exposure to water, natural resources and other ancillary environmental companies.

y Founded in 2006, Aqua Terras investment approach utilizes both qualitative and quantitative methods to manage

portfolios.

y Aqua Terra manages assets for high net worth individuals, family offices and institutions.

y Aqua Terra utilizes substantial operational resources provided by its parent Boenning & Scattergood Inc., a 190

person firm that was founded in 1914 and currently has more than $2 billion in assets under advisement.


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Executive Summary Key Issues

y Supply & Demand

A quantity and quality issue

Supply of clean wateris declining; demand is accelerating

y Importance of Water

Wateris key to living standards, economic & socio-economic growth, energy and agriculture

y Industry Drivers

Regulation, infrastructure, climate change, economic, socio-economic, population

y Global Issue ~ Local Solutions

Wateris a global problem, but all waterissues are experienced and managed on a local level

y Multiple Solutions

A myriad of techniques and technologies to manage the issue; no silver bullet

y Multi - Dimensional

Many companies, industries in all geographies


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Not Just a Water Story

Water

Energy Agriculture

Foreign & Domestic Policy

Population Growth

Climate Change

Socio-Economic

Industrialization

Global Trade


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Hydrological Cycle

Closed Loop System

Amount of wateris constant.

Wateris held in various forms as it is

cycled through the hydrological system.

Climate change has a significant impact on

the hydrological cycle.


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Water Availability

Water Must:

Feed the World

Feed Industry

Feed Energy


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Energy Water Agriculture

Hydrocarbon Mining

Energy Production

Hydro Electric

Industrials Manufacturing

Consumption

Socio-Economic

Fertilizer

Bio Fuels

Irrigation

Water Impact

Impact andD

ependence on Water

Critical CriticalAbsolute

70% of PA water withdrawals are

for energy production.

On an annual basis CA uses 30% of

its natural gas, 19% electricity & 88

BILLION gallons of diesel fuel to

move & clean water.

Water is used in almost all

industrial and manufacturing

applications steel, paper,

semiconductor, biotechnology.

Agriculture is the largest user of water on a

global basis. Irrigation is essential for

water use reduction.

Fertilizer & seed companies help increase

crop yields while reducing water usage.

Source: PA Department ofEnergy

CA Department ofEnergy


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Supply & Demand

Supply Drivers

Pollution

Climate change

Unequal geographic allocation

Over use


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Cross Section of Global Water Companies

Aqua Terra breaks down its waterimpact universe of 400+ companies into seven broader sectors which

outline the diversity of companies from an industry standpoint as well as geographical positioning.

Aqua America

American Water

Veolia

Pennon Group

Severn Trent

Manila Water

Cheung Kong

Hyflux

Jacobs

Tetra Tech

Abengoa S.A.

Alfa Laval

Coffey Intl.Voltas

United Envirotech

Watts

Muller Water

Pentair

Weir

Gebereit

Future PipeDoosan Heavy

SinoPipe

Arch

Hawkins

Dow

Ciba Holding

Kemira Oyj

KuritaSinoChem

Badger Meter

Itron

Rtork PLC

Real AG

Horiba

China Water Affairs

Americas

Europe

Asia &Middle East

Water

Utilities

Engineering&

Consulting

Equipment

& Infrastructure TreatmentInstrument, Test

& Tech.

Asset &

Agriculture

Monsanto

Agrium

Tejon Ranch

Yara Intl.

Timbercorp

Chaoda Modern

Distribute & treat

water for

communities

typically through a

regulated rate of

return model.

Companies which

provide engineering

& consulting

services

Provide pumps,

valves, motors,

pipes for the

transportation of

water and waste

water

Chemicals,

filtration,

membranes and

other products

that treat water

Meters, testing

equipment,

technology used

to measure flow

and contaminant

levels

Fertilizer, seed &

irrigation cos.

Asset holding cos.

timber & water

rights.

This information is not intended to be a recommendation to buy or sell any security. Aqua Terra may or may not be invested in these securities as of the

date of this report.

Energy &

Cleantech

Energy areas

impacted by

water; technology

which reduce

environmental

damage

Calgon Carbon

Energy Conversion

Vestas

Gamesa

Suntech Hldgs.

Suzlon


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Drivers of Global Investments

Drivers ofGlobal Water

Investments

Regulation

EPA Clean Water Act requires testing

for over 90 contaminants; up from 22in 1976.

Global regulation is growing as the

realization that water standards affect

GDP and health care costs.

Infrastructure

Developed world faces a serious repair /

replacement cycle; U.S. estimates range

upwards towards $1 trillion of

investment

The developing world lacks complete

infrastructure; Chinas facilities clean

only 50% of its waste water

Population GrowthMigration

Industrialization

Dietary Habits

Pollution&

Climate Change

DemandSupply

Impacted Industries

Energy Water is the key input into energy generation; conversely water

transportation is energy intense.

Agriculture Agriculture is the single largest user of water resources on a

global basis; companies with exposure to fertilizer, irrigation, seed and

equipment will benefit.

Environmental Technology Clean technologies help reduce emissions and

other pollutants which can reduce water quality; help redesign processes to

lower water consumption.


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Climate Change

Presentation By Paul Walsh

Climate Change and Water Cycle


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Water Thesis

y Growing supply & demand imbalance

y Multiple solutions, markets and geographies

y Fragmented markets

y Monopolies

y Early stages of awareness

y Large asset bases requiring continuous repair & replacement

Aqua Terra Water Thesis


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Past Performance of Water

Aqua America

Goldman Sachs

Exxon Mobil

Artesian Resources

Source: StockVal

Disclosure: The above referenced chart shows total geometric average return of listed securities in percentage terms.

Performance assumes reinvestment of dividends and income. Past performance is not a guarantee of future results. This report shouldnot be construed as an offer to buy or sell any security. Advisor may or may not hold any of the aforementioned securities in its portfolio.

Performance ofHigh Profile

Companies Versus Water

StockVal

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

60

80

100

120

150

180

220

270

330

400

480 12/31/99 - 07/31/09

WTR

XOM

GSARTNA

TOTAL RETURN WITH REINVESTMENT COMPARISON

DEC 1999 = 100 ANNUAL RATE CUMULATIVE

AQUA AMERICA INCORPORATED (WTR) +11.2% +174.8%EXXON MOBIL CORPORATION (XOM) +8.0% +109.1%

GOLDMAN SACHS GROUP INC (GS) +6.3% +79.3%

ARTESIAN RESOURCES CORPORATION (ARTNA) +6.0% +73.7%


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Looking Forward

Rise of the EPA & Sustainability

Repair & Replacement of Infrastructure

Stimulus

Opportunity Time Line

Increased Privatization

July 2009

Tetra Tech (TTEK)

American Water (AWK)

Cascal (HOO)

Nalco (NLC)

2015 2020+

Disclosure: This report should not be construed as an offer to buy or sell any security. Advisor may or may not hold any of theaforementioned securities in its portfolio.


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Conclusion

Why is it different this time?

What has changed?

y Population growth

y Emerging middle class

y Climate change

y Water Energy Agriculture nexus

y Finite resources

y Global trade

Wateris the Centerpiece to

Sustainability


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Contact Information

Gerry Sweeney

Direct: 610.832.5295

Mobile: 267.980.9028

Email: [email protected]

www.Aquaterraam.com

Aqua Terra Asset Management

C/O Boenning & Scattergood

4 Tower Bridge

200 Barr Harbor Drive, Suite 300

Conshohocken, PA 19406

Documents

2009 Fra Conference