INDUSTRIALS

Will AmerinePiyush DubeyInanc GencerMatthew Hankey

INDUSTRIALS

S&P 500 Sector Allocation

Financials 21.60%

Health Care 11.90%

Industrials 10.90%

Info Tech 14.90%

Telecom Services 3.70%

Materials 3.10%

Utilities 3.70%

Consumer Discretionary

10.50%

Consumer Staples 10.50%

Energy 10.10%

S&P 500 Sector AllocationCURRENT SIM HOLDINGS

SIM Allocation

Financials 21.54%

Health Care 18.26%

Industrials 10.57%

Info Tech 15.61%

Telecom Services 7.06%

Materials 2.97%Utilities 1.28%

Consumer Discretionary

7.98%

Consumer Staples 7.94%

Energy 6.80%

INDUSTRIALS Industries included in Industrials Sector

Price Change% of industrials 3MO YTD 2006 5-Year

Aerospace and Defense 22.63% 3.6 7.7 23.1 10.5Air Freight and Logistics 8.04% (2.6) (4.7) 1.6 3.3Airlines .78% (5.0) (6.3) (6.8) (11.4)Building Products 1.40% (4.2) 2.8 4.7 5.4Commercial Printing .60% 8.4 13.1 3.9 4.7Construction and Engineering .58% 15.8 17.1 5.7 14.1Construction and Farm Mach. 7.59% 17.7 22.3 20.6 22.5Diversified Commercial Serv .69% (6.6) (3.9) 2.4 2.1Electrical Components and Eqp. 3.89% 3.6 5.1 17.3 14.1Environmental and Facility Serv 1.61% (0.7) 2.7 23.2 6.2Human Resource and Empl Serv .76% (16.6) (10.1) 5.1 9.2Industrial Conglomerates 35.61% 3.4 1.0 5.7 4.7Industrial Machinery 7.04% 4.1 10.1 12.7 11.1Office Services and Supplies 1.12% (3.2) (0.8) 14.3 1.4Railroads 7.05% 11.3 18.4 13.5 19.8Trading Companies .41% 6.4 18.1 (1.6) 7.9Trucking .22% (3.5) 3.1 N/A N/AINDUSTRIALS 4.0 5.3 11.0 7.5

INDUSTRIALS

LARGEST COMPANIES

1. General Electric 19.08%

2. United Parcel Service 5.40%

3. Boeing 5.20%

4. United Technologies 4.77%

5. Tyco International 4.57%

6. 3M 4.08%

7. Caterpillar 3.27%

8. Honeywell International 2.76%

9. Lockheed Martin 2.59%

10. Emerson Electric 2.58%

INDUSTRIALS

S&P 500 Sector PerformanceSector MTD QTD YTD

S&P 500 1.57% 5.97% 6.16%

Energy 1.99% 7.30% 9.14%

Materials 1.78% 3.75% 12.44%

Industrials 1.68% 6.48% 7.09%

Consumer Discretionary 1.20% 3.73% 2.70%

Consumer Staples 0.02% 3.19% 4.83%

Health Care 1.57% 8.77% 9.45%

Financials 1.60% 5.64% 2.01%

Information Technology 1.94% 7.45% 6.26%

Telecommunications 3.41% 3.49% 10.07%

Service Utilities 1.43% 5.62% 14.53%

INDUSTRIALS Business Cycle

INDUSTRIALS

Product Life Cycle

MATURE AND STEADY INDUSTRY

PROFIT MARGINS LOWERED

SALES FOLLOW ECONOMIC GROWTH

FIGHT TO KEEP MARKET SHARE

INDUSTRIALS

RIVALRY

HIGHLY COMPETITIVE INDUSTRY

COMPETITION DRIVES PRICES DOWN

SUBSTITUTES

LOW

NO ISSUE

SUPPLIER POWERS

LOW DUE TO HIGH COMPETITION

CUSTOMER POWERS

LOW/MODERATE

ENTRANTS

LOW RISK OF NEW ENTRANTS, ESTABLISHED BRAND NAMES

PROFITABILITY AND

PRICING

Economic Analysis

Cyclical Sector correlated with GDP, Unemployment and Fed Rates

INDUSTRIALS

Industrials Price Snapshot

INDUSTRIALS

Performance Relative to S&P500

INDUSTRIALS

Financial Analysis – Sales and EPS

Current Revenues and EPS trend is positive

INDUSTRIALS

Financial Analysis - Income Statement Ratios

Current Net Profit Margin and ROE trend is positive

INDUSTRIALS

INDUSTRIALS

Valuation over 10 YearsStockVal®S&P INDUSTRIALS SECTOR COMP ADJ (SP-20) Price 52.13

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PRICE / YR-FORWARD EPS ESTS12

15

18

21

24

HI 23.5 LO 14.3 ME 18.4 CU 16.0

05-02-199705-04-2007

PRICE / EBITDA6

8

10

12

14

HI 12.4 LO 7.5 ME 10.0 CU 8.7

05-02-199705-04-2007

PRICE / BOOK VALUE2

3

4

5

6

HI 5.3 LO 2.7 ME 3.6 CU 3.5

05-02-199705-04-2007

PRICE / SALES0.9

1.2

1.5

1.8

2.1

HI 2.02 LO 1.20 ME 1.60 CU 1.55

05-02-199705-04-2007

INDUSTRIALS

Valuation vs. S&P 500 10 YearStockVal®S&P INDUSTRIALS SECTOR COMP ADJ (SP-20) Price 50.60

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.6

0.8

1.0

1.2

HI 1.02 LO 0.63 ME 0.87 CU 0.89

04-18-199704-23-2007

PRICE / EBITDA RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

1.0

1.2

1.4

HI 1.37 LO 0.99 ME 1.15 CU 1.00

04-18-199704-23-2007

PRICE / BOOK VALUE RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

1.0

1.2

1.4

HI 1.31 LO 0.91 ME 1.12 CU 1.06

04-18-199704-23-2007

PRICE / SALES RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

0.9

1.0

1.1

1.2

HI 1.16 LO 0.80 ME 1.02 CU 0.91

04-18-199704-23-2007

INDUSTRIALS Valuation Analysis 10 YearsRelative to SP500 High Low Mean Current P/Forward E 1.02 .63 .87 .89 P/S 1.16 .80 1.02 .91 P/B 1.31 .91 1.12 1.06 P/EBITDA 1.37 .99 1.15 .99 P/CF 1.15 .74 1.01 1.04

•Trend shows cheap sector

•Distinguishing trends in Price to Share/Book/EBITDA

•Cyclical Sector and Measurements of Valuation

INDUSTRIALS

Valuation vs. S&P 500 5 YearsStockVal®S&P INDUSTRIALS SECTOR COMP ADJ (SP-20) Price 52.13

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PRICE / YR-FORWARD EPS ESTS RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.6

0.8

1.0

1.2

HI 1.02 LO 0.63 ME 0.87 CU 0.89

05-02-199705-04-2007

PRICE / EBITDA RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

1.0

1.2

1.4

HI 1.37 LO 0.99 ME 1.15 CU 1.02

05-02-199705-04-2007

PRICE / BOOK VALUE RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

1.0

1.2

1.4

HI 1.31 LO 0.91 ME 1.12 CU 1.07

05-02-199705-04-2007

PRICE / SALES RELATIVE TO S&P 500 INDEX WITH REPORTED EPS (SP5)0.8

0.9

1.0

1.1

1.2

HI 1.16 LO 0.80 ME 1.02 CU 0.90

05-02-199705-04-2007

INDUSTRIALS

Positive Trends

-- Valuations are on a downward slope = more undervalue

-- Low points of P/EBITDA, P/Sales and P/Book

-- Valuation Expansion and need for more weight in portfolio

INDUSTRIALS

Recommendations Currently .43% Underweight Increase Investment by 50 Basis Point

This brings us in line with S&P500 Equal Weight

Switch Weights within Portfolio Aerospace and

Defense/Railroads/Machinery