FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

FINANCIAL SONAR FOR AET 3RD QUARTER 2012
N
RIS

OUR EVALUATION OF AET

AETNA INC is showing strong Earnings Quality, Operating Efficiency and Balance Sheet Quality, and Valuation suggests a lower amount of price risk, but Cash Flow Quality is weak. When combined, AET deserves a BUY rating. The Cash Flow Quality rating declined the most during the recent quarter. Though this dimension and all of the others were either down or unchanged at best, it was not sufficient to lower the overall rating.

UA AL

T IO

EARN
STR O

NG

ING SQ

UA

ES

LIT

LO

HISTORICAL RATINGS
B ALANC

EARNINGS QUALITY CASH FLOW QUALITY OPERATING EFFICIENCY BALANCE SHEET VALUATION

STRONGEST STRONGEST STRONG STRONG LOW RISK

STRONGEST STRONGEST STRONG STRONG LOW RISK

STRONGEST STRONG STRONGEST STRONG LOW RISK

STRONGEST WEAK STRONGEST STRONG LOW RISK

OPE

ST R ONGEST

R A TI N G E F FIC I EN

CY

PRICE TRENDS AND VALUATION

Price (AS OF 01/10/13) PRICE/EARNINGS PRICE/ADJUSTED EARNINGS $55 $45.80 8.6 7.8 MARKET CAP. PRICE/EARNINGS GROWTH PRICE/ADJUSTED EARNINGS GROWTH $15.3 BILLION 1.9 176.5 PRICE/SALES PRICE/CASH FLOW PRICE/ADJUSTED CASH FLOW 0.4 6.7 6.9 $55

52 Week High: $50.16 on 03/26/12 $50 $50

$45

CA
$45 $40 $35 $30 20 Million Nov Dec 2013 Report prepared on January 11, 2013 Page 1 of 11

$40

$35

52 Week Low: $36.67 on 07/23/12

$30

Average Weekly Volume

20 Million Jan 2012 Feb Mar Apr May Jun Jul Aug Sep Oct

2013 Jefferson Research & Management www.jeffersonresearch.com

SH

FLO

OVERALL RATING

BUY

BUY

BUY

BUY

WE

Q4 2011

Q1 2012

Q2 2012

Q3 2012

W Q U ALITY

AK

STRO

NG

E SH

EE

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

EARNINGS QUALITY: STRONGEST

Earnings quality has long been analyzed and used by investors as a measure of the fundamental quality of the company and its future prospects. Companies may be including certain items that increase reported earnings and often the amount of cash flow supporting the earnings may be weak. Jefferson adjusts for these kinds of items and other anomalies to produce an adjusted earnings number that more accurately reflects ongoing business fundamentals at AETNA INC. Reported earnings are compared to the Jefferson adjusted earnings as a means to gauge earnings quality. Also measured is the amount of cash flow that underpins earnings. The earnings quality for AET remains STRONGEST. With an adjusted net income of $530.0M in the last quarter that was greater than the reported number, AET's quality of net income earnings is extremely high. In addition, operating cash flow increased during the last quarter to $167.0M from $90.0M, and the ratio of operating cash flow to earnings has also improved.

NET INCOME VS. ADJUSTED NET INCOME

$ IN MILLIONS Adjusted Net Income 106.4%

EARNINGS VS. OPERATING CASH FLOW

Operating Cash Flow as a Percentage of Earnings 79.9% 126.3% 96.2%

$ IN MILLIONS Reported Operating Cash Flow 19.7% 33.5%

Adjusted Net Income as a Percentage of Net Income 98.4% 104.5% 101.7% 100.0%

3,000 2,000 2,074.1 1,872.1 2,364.0 1,738.3 2,000 530.0 457.0 457.0 499.0

1,332.0

1,840.0

1,840.0

1,985.0

1,985.0

1,766.0

1,766.0

457.0

499.0 9.2% Q3 2012 9.3%

1,000

1,592.0

1,000

0 Q2 2012 Q3 2012

Fiscal Year 2010

Fiscal Year 2011

Trailing 12 Months

Fiscal Year 2010

Fiscal Year 2011

Trailing 12 Months

Q2 2012

49.0

Q3 2012 % OF SALES

ACCRUALS
Actual Accruals 10.0% 8.0% Forcasted Accruals

6.0%

4.0%

2.0% 9.0% 9.0% 9.0% 8.4% 9.6% 8.6% 8.6% 8.8% 8.8% 8.8% 9.3% 8.3% 8.7% 9.1%

0.0%

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

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Report prepared on January 11, 2013 Page 2 of 11

93.0

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

CASH FLOW QUALITY: WEAK

Cash flow is considered by many investors to be the ultimate measure of company performance and more reliable than reported earnings. The Jefferson measurement eliminates items that are not part of recurring cash flow or the result of actual operations for AETNA INC. These adjustments to cash flow provide a truer measure of cash flow and the resultant cash flow quality rating. The cash flow quality rating for AET declined from STRONG to WEAK The annual operating cash flow quality declined with a reported number of $2,507M and an adjusted number that was 94.3% of reported. In addition, the quarterly operating cash flow quality weakened with a reported number of $167.0M and an adjusted number that was 55.7% of reported. Together these changes represent a deterioration from the previous period when the ratio of reported to adjusted cash flows was higher.

OPERATING CASH FLOW

$ IN MILLIONS Adjusted Operating Cash Flow

FREE CASH FLOW

$ IN MILLIONS Adjusted Free Cash Flow -955.7%

Adjusted Operating Cash Flow as a Percentage of Operating Cash Flow 94.4% 94.3% 89.9% 54.7% 55.8% 3,000 2,364.0 2,000 2,507.0 1,332.0 1,000 0

Adjusted Free Cash Flow as a Percentage of Free Cash Flow 92.8% 92.7% 84.3% 56.6% 2,000 1,000 1,825.0

1,968.0

1,107.0

1,139.0

1,027.0

960.0

-53.0

-94.0

1,592.0

1,412.0

1,771.0

167.0

0 93.0 -1,000

Fiscal Year 2010

Fiscal Year 2011

Trailing 12 Months

90.0

49.0

Q2 2012

Q3 2012

Fiscal Year 2010

Fiscal Year 2011

Trailing 12 Months

Q2 2012

Q3 2012

FLOW RATIO
0.40 0.30

CASH FLOW ROI

Adjusted Cash Flow ROI 30.0%

20.0% 0.20 10.0% 0.10

0.00 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

DEBT COVERAGE
Adjusted Debt Coverage 75

50

25

0 Q4 10
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Q1 11

Q2 11

Q3 11

Q4 11

Q1 12

Q2 12

Q3 12 Report prepared on January 11, 2013 Page 3 of 11

7.0

-66.0

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

OPERATING EFFICIENCY: STRONGEST

The ability of AETNA INC to earn a profit is in part the result of how rapidly it converts its collection of assets into revenues and the resulting earnings and cash flow margins available. Operating Efficiency is measured by a combination of factors including: return on invested capital (ROIC), gross margin, EBIT margin, asset turnover, equity turnover, and lastly Staff, General, and Administrative costs as a percentage of sales (SGA). The operating efficiency rating for AET remains STRONGEST as the EBIT margin, net margin, gross margin, and SGA costs strengthened over the last quarter, while at the same time the ROIC weakened. Even though the EBIT margin improved from 8.6% to 10.0%, the decline in ROIC offset this, deteriorating from 12.7%to 12.6%. The lower ROIC indicates that AET is producing less profit per dollar of capital invested in the business.

GROSS MARGIN
Change from previous quarter: UPL 32.0%

EBIT MARGIN
Adjusted EBIT Margin 15.0% 12.5% Change from previous quarter: UPL

30.0% 10.0% 28.0% 7.5%

26.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

5.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

NET MARGIN
Adjusted Net Margin 8.0% Change from previous quarter: UPL

SG&A AS A PERCENTAGE OF SALES

Change from previous quarter: DOWNM 21.0% 20.0%

6.0% 19.0% 4.0% 18.0%

2.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

17.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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Report prepared on January 11, 2013 Page 4 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

RETURN ON INCREMENTAL INVESTED CAPITAL

OPERATING EFFICIENCY: STRONGEST

ROIC
Adjusted ROIC 15.0% Change from previous quarter: DOWNM 50.0% 0.0% 14.0% -50.0% 13.0% -100.0% Change from previous quarter: DOWNM

12.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

-150.0% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

ASSET TURNOVER
1.00 0.95

EQUITY TURNOVER
2.70

0.90

2.65

0.85

0.80 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

2.60 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

CASH CONVERSION CYCLE Data not available for this chart.

IN DAYS

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Report prepared on January 11, 2013 Page 5 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

BALANCE SHEET QUALITY: STRONG

The balance sheet shows the ability of AETNA INC to pay its bills and fund future growth. It also provides clues to aggressive accounting since reported earnings that do not generate cash flow generally end up somewhere on the balance sheet. The following are analyzed in determining balance sheet quality: quick ratio, current ratio, cash position, accounts receivable days sales outstanding (AR DSOs), and number of days inventory is held prior to sale to customers (Inv Days). The balance sheet rating for AET remains STRONG as the debt/equity and debt/assets strengthened over the last quarter while the AR DSOs and cash position weakened. the decline in AR DSOs offset this by deteriorating from 20 to 22 days. The higher AR DSOs indicates that AET has lengthened the time it takes on average to receive payment from its customers, thereby decreasing liquidity.

RECEIVABLES DAYS OUT

Change from previous quarter: UPL 22

INVENTORY DAYS OUT Data not available for this chart.

21

20

19 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

CURRENT RATIO
0.80

QUICK RATIO
0.70

0.75

0.65

0.70 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

0.60 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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Report prepared on January 11, 2013 Page 6 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

DEBT/ASSETS

BALANCE SHEET QUALITY: STRONG

DEBT/EQUITY
Debt/Tangible Equity 150 Change from previous quarter: DOWNM 16 Debt/Tangible Assets Change from previous quarter: DOWNM

100

14

50

12

0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

CASH
4,000

$ IN MILLIONS Change from previous quarter: DOWNM

3,500

3,000

2,500 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

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Report prepared on January 11, 2013 Page 7 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

VALUATION: LOW RISK

A favorable valuation (a LEAST RISK or LOW RISK rating) implies lower potential downward price risk that is evidenced by a company price multiple that is lower than the corresponding sector average. The valuation rating is based on both absolute and relative levels at AETNA INC compared to its peers within its sector based on price to earnings (PE), price to earnings growth (PEG), price to sales (PS), and price to cash flow (PCF). The valuation rating for AET remains a LOW RISK as the price to sales ratio became more attractive over the last quarter while the PEG and price to cash flow ratios became less attractive. Even though AET's PS ratio relative to the sector average PS improved from 1.83X to 0.80X during the last quarter, the decline in the PCF ratio relative to the sector average PCF offset this by deteriorating from 0.42X to 0.63X.

PRICE/EARNINGS
RANGE LAST 2 YEARS Reported Price/Earnings Adjusted Price/Earnings Sector Price/Earnings LOW 7.00 6.30 13.00 HIGH 9.30 8.70 16.20 AVERAGE 15 8.49 7.78 14.35 10 5 0 Q4 2011 Q1 2012 Q2 2012 Q3 2012 16.0 0.5 Q3 2012 Page 8 of 11 0.0 10.7 0.0 8.4 7.0 8.8 0.6 8.6 6.7 1.9 6.3 7.8 0.4 Q4 2011 Q1 2012 Q2 2012 Report prepared on January 11, 2013 0.6 0.5 0.5 1.3 1.1 1.1 176.5 6.9 7.9 7.6 0.1 10.5 As Reported Adjusted Health Care Providers & Services Sector

PRICE/CASH FLOW
RANGE LAST 2 YEARS Reported Price/Cash Flow Adjusted Price/Cash Flow Sector Price/Cash Flow LOW 5.30 5.60 9.70 HIGH 7.00 7.30 12.60 AVERAGE 15 6.48 6.79 10.75 10 5 0 Q4 2011 Q1 2012 Q2 2012 12.6 10.1 6.9 6.5 5.6 6.7 5.3 7.1 Q3 2012 As Reported Adjusted Health Care Providers & Services Sector

PRICE/EARNINGS GROWTH
RANGE LAST 2 YEARS Reported Price/Earnings Growth Adjusted Price/Earnings Growth Sector Price/Earnings Growth LOW 0.20 0.20 0.00 HIGH 1.90 176.50 0.60 AVERAGE 0.51 22.29 0.13 As Reported 200 150 100 0.0 0.4 0.2 0.3 0.3 0 0.1 0.6 50 0.5 0.5 Adjusted Health Care Providers & Services Sector

Q4 2011

Q1 2012

Q2 2012

Q3 2012

PRICE/SALES
RANGE LAST 2 YEARS Reported Price/Sales Sector Price/Sales LOW 0.40 0.50 HIGH 1.40 0.60 AVERAGE 1.50 1.10 0.54 1.00 0.50 0.00 As Reported Health Care Providers & Services Sector

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FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY PEER VALUATION COMPARISON

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

PRICE ON PRICE/ 01/10/13 EARNINGS $32.60 $62.20 $55.60 $45.80 $33.20 $43.00 $69.20 0.0 8.1 10.1 8.6 4.7 13.4 9.1 16.0 PRICE/ SALES 1.5 0.3 0.6 0.4 0.4 0.1 0.3 0.5 PRICE/ CASH FLOW 11.3 6.7 7.6 6.7 2.7 9.7 7.0 10.7 PRICE/ EARNINGS GROWTH 0.0 3.1 0.7 1.9 0.1 0.9 NA 0.0 VALUATION RATING LEAST RISK LEAST RISK LEAST RISK LOW RISK LEAST RISK LEAST RISK LOW RISK

TICKER

COMPANY

MARKET CAP. $19.7 B $18.9 B $15.9 B $15.3 B $14.7 B $14.6 B $11.0 B $5.1 B

FMS FRESENIUS MED CARE AG -ADR WLP WELLPOINT INC CI CIGNA CORP AET AETNA INC HCA HCA HOLDINGS INC CAH CARDINAL HEALTH INC HUM HUMANA INC HEALTH CARE PROVIDERS & SERVICES SECTOR

PEER OPERATING COMPARISON

GROSS MARGIN (%) 38.3 21.7 13.7 28.6 18.9 4.7 22.7 EBIT MARGIN (%) 16.1 7.6 11.9 10.0 13.8 1.7 7.3 NET MARGIN (%) 7.7 4.5 6.3 5.6 4.5 1.1 4.4 CASH CONVERSION ROIC (%) CYCLE (DAYS) 8.5 7.6 11.3 12.6 17.5 13.2 12.4 96.0 0.0 0.0 0.0 38.0 8.0 0.0 OPERATING EFFICIENCY RATING LEAST RISK LOW RISK LOW RISK LEAST RISK LOW RISK LEAST RISK LOW RISK

TICKER FMS WLP CI AET HCA CAH HUM

COMPANY FRESENIUS MED CARE AG -ADR WELLPOINT INC CIGNA CORP AETNA INC HCA HOLDINGS INC CARDINAL HEALTH INC HUMANA INC

MARKET CAP. $19.7 B $18.9 B $15.9 B $15.3 B $14.7 B $14.6 B $11.0 B

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Report prepared on January 11, 2013 Page 9 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY DEFINITIONS

Adjusted Net Income: Adjusted Net Income is a companys reported net income less adjustments for one-time and non-operating items yielding a more realistic picture of a companys ongoing earnings. Accruals Forecasted and Actual: The comparison of forecasted and actual accruals identifies a discretionary build not attributable to a companys sales growth, and could be a sign of poor earnings quality. For our purposes, the forecasted accrual component is an aggregate measurement of total accruals (short-term balance sheet accounts) that distinguishes between normalized and extraordinary accruals. The normalized accruals are based on historical relationships between sales and accruals and are dynamically adjusted over time to account for changes in the ratio between these two variables. Normally, short term accruals will grow as sales grow i.e., the normalized measure. Discretionary accruals are the portion of accruals that are in excess of the base factor and therefore exceed the normal and are extraordinary. Adjusted Operating Cash Flow: Adjusted Operating Cash Flow is reported operating cash flow less adjustments for one-time and non-operating items yielding a more realistic picture of a companys ongoing cash flow from operations. Adjusted Free Cash Flow: Adjusted Free Cash Flow is reported operating cash flow less adjustments for one-time, non-operating items and capital expenditures. This provides a more realistic picture of a companys ongoing cash generation from operations after capital investments. Flow Ratio: The Flow Ratio is a measurement of managements effectiveness in managing its working capital to maximize the companys cash flows. The measure is a ratio of a companys non-cash current assets to its non-interest bearing short-term liabilities. These non-cash assets include items such as accounts receivable (which are essentially interest-free loans to customers) and inventory (which is subject to obsolescence or spoilage). The non-interest bearing liabilities are essentially interest-free loans to the company. A lower ratio implies tighter cash management for a company as it has less cash tied up in non-cash current assets and is able to utilize interest free loans from suppliers. Cash Flow Return on Investment: Cash Flow ROI is a measure of a companys ability to generate operating cash flow from its invested capital. Many analysts consider this measure preferable to an earnings return measure such as ROE since cash flow is considered a more reliable measure. Adjusted Cash Flow Return on Investment: Adjusted Cash Flow ROI is a measure of the ability to generate operating cash flow from its investment in capital calculated using a companys adjusted cash flow. Debt Coverage: Debt Coverage is a measure of a companys ability to cover its debt obligations with cash flow it generated from continuing operations.
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AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

Adjusted Debt Coverage: Adjusted Debt Coverage is a measure of a companys ability to cover its debt obligations with cash flow it generated from continuing operations, calculated using a companys adjusted cash flow. Adjusted Return on Invested Capital: Adjusted ROIC assesses a companys efficiency at allocating the capital to profitable investments using a companys adjusted net income (see above) yielding a measure of how well a company is using its capital to generate returns. Adjusted EBIT Margin: Adjusted EBIT Margin is a measure of a companys earnings before interest and income taxes less adjustments for one-time and non-operating items divided by a companys sales. Adjusted Net Margin: Adjusted Net Margin is a measure of a companys net income less adjustments for one-time and non-operating items divided by a companys sales. Return on Incremental Invested Capital: ROIIC measures the relationship between incremental investment and incremental net operating profit after tax. This provides a measure of the returns a company is earning on recent investments rather than all investments as measured by ROIC. Cash Conversion Cycle: The Cash Conversion Cycle measures the number of days working capital is tied up from the date of purchase of raw materials until the collection of cash from the sale of the product. Debt to Tangible Equity: Debt to Tangible Equity is a ratio of a companys debt to equity less adjustments for goodwill and other intangible assets yielding tangible equity. Debt to Tangible Assets: Debt to Tangible Assets is a ratio of a companys debt to total assets less adjustments for goodwill and other intangible assets. Price/Adjusted Earnings: Adjusted Price/Earnings is a relative valuation measure comparing a companys share price to its adjusted net income. Price/Adjusted Cash Flow: Adjusted Price/Cash Flow is a relative valuation measure comparing a companys share price to its adjusted cash flow. Price/Adjusted Earnings Growth: Adjusted Price/Earnings Growth is a relative valuation measure comparing a companys share price to its growth in adjusted earnings.

Report prepared on January 11, 2013 Page 10 of 11

FINANCIAL SONAR: REALITY RADAR ON COMPANY PERFORMANCE NYSE

AET

HEALTH CARE PROVIDERS & SERVICES INDUSTRY ABOUT THE FINANCIAL SONAR REPORT & METHODOLOGY

AETNA INC OVERALL RATING FOR 3RD QUARTER 2012 BUY

The Jefferson Financial Sonar ratings system classifies companies into three categories: Buy, Hold and Sell. The Financial Sonar rating is the result of a point scoring system derived from the five main criteria. The more negative the rating, the more likely the overall rating will be a Sell. More positive criteria will support an Overall Rating of Buy. Jefferson Research & Management has developed the Financial Sonar Rating System which is based upon five analytical criteria: Earnings Quality, Cash Flow, Operating Efficiency, Balance Sheet, and Valuation. The first four criteria are rated in one of four categories (best to worst): Strongest, Strong, Weak, Weakest. Valuation is also rated in one of four categories (best to worst): Least Risk, Low Risk, Medium Risk, Most Risk.

ABOUT JEFFERSON RESEARCH & MANAGEMENT

Jefferson Research & Management is an independent investment research and advisory firm founded in 1989 and based in Portland, Oregon. The firm has been providing fundamental research to institutional and individual clients for more than 20 years. Financial Sonar ratings are based on a proprietary rating system developed by Jefferson Research & Management that measures the changes in company fundamentals using information from financial statements.

DISCLAIMER
This report is for information purposes only for clients of Jefferson Research & Management and in no way should be interpreted as a complete investment recommendation. This report has been prepared exclusively by Jefferson Research & Management. Information contained in this report is obtained from sources believed to be reliable, but no guarantee is made to its accuracy and no representation is made that it is complete, or that errors, if discovered, will be corrected. 1) Jefferson Research & Management and its staff are not involved in investment banking activities for firms covered. 2) No employee of Jefferson Research & Management is on the board of any covered company and no outsiders are members of Jefferson Research & Managements board. 3) Jefferson Research & Management employees trading stock in rated companies are subject to trading restrictions prior to release (once identified) and for a one day period subsequent to rating changes but do not individually or collectively own more than 1 percent of the outstanding stock of a covered company. No part of this report can be reprinted or transmitted electronically without the prior written authorization of Jefferson Research & Management.

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