© 2009 Northern Trust Corporation northerntrust.com

FALL FOCUS

2009

INVESTMENT CONFERENCE

Michael DruckerSenior Equity Analyst

Healthcare SectorHealthcare Services, Medical Devices & Hospital Supplies

2 2009 Fall FOCUS Investment Conference

HealthcarePerformance

Currency headwind

Concerns on sustainability of pricing

Hospital capital freeze

Obamacare

Performance Review – Healthcare Equipment

-50.0%

-45.0%

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb

-09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Ind

ex

ed

To

tal R

etu

rn

S&P 500 Healthcare Equipment

3 2009 Fall FOCUS Investment Conference

HealthcarePreferred Stocks

Covidien (COV, 1/B)

McKesson (MCK, 1/B)

Healthcare Services, Medical Devices & Hospital Supplies

4 2009 Fall FOCUS Investment Conference

HealthcarePreferred Stocks

Spin-off From Tyco

Incentivized Management

Portfolio Restructuring

Sell slower growth, low ROIC businesses to add faster growth, high ROIC businesses

Prefer tuck-in acquisitions, but will return excess capital to shareholders

Leverage Infrastructure Investments

Capital Deployment Opportunity

Covidien (COV, 1/B)

5 2009 Fall FOCUS Investment Conference

HealthcarePreferred Stocks

Leader in Pharmaceutical Distribution and Healthcare IT (HCIT)

Pharmaceutical Distribution stable with re-signing of CVS contract (15% of revenue)

HCIT upside from stimulus

Undervalued asset within McKesson

20% of operating income

$21 billion will be paid to doctors / hospitals to upgrade to electronic medical records (EMR)

McKesson (MCK, 1/B)

© 2009 Northern Trust Corporation northerntrust.com

FALL FOCUS

2009

INVESTMENT CONFERENCE

Questions for Healthcare?

© 2009 Northern Trust Corporation northerntrust.com

FALL FOCUS

2009

INVESTMENT CONFERENCE

Michael DruckerSenior Equity Analyst

Thank you.