1

US Equities: Emerging From The Abyss

Richard M. Bernstein, CFA

2

BROWN ADVISORY

4 $16.5 billion in client assets

4 $1 billion in European client assets

4 200 partners and employees

4 Employee owned

4 Headquarters in Baltimore

4 Offices in Washington D.C., New York and London

4 In-house strategies: US Equities and US Fixed Income

Brown Advisory was created in 1993 as a separate, focused group within Alex. Brown & Sons, America’s oldest investment banking firm. In 1998, Brown Advisory separated from Alex. Brown in the belief that its clients’ interests would best be served by independent ownership.

Mr. Bernstein has over twenty years of investment industry experience. Prior to joining Brown Advisory, he was Director of Research at Mercantile. He received his B.A. (1979) and his M.A. (1983) from Johns Hopkins University.

Richard Bernstein, CFA (full bio in appendix)

3

US EQUITY RESEARCH TEAM & STRATEGIES

US Equity Value Fund

MANEESH BAJAJ, CFAFinancial Services

CHRISTOPHER A. BERRIERBusiness Services (PM)

JOHN B. BISSON, CFAQuantitative

ERIC CHA, CFAConsumer Discretionary

RICHARD M. BERNSTEIN, CFAIndustrials (PM)

DARRYL R. OLIVER, CFA Consumer Staples

SUNG W. PARKGeneralist

MICHAEL W. POGGI, CFAIndustrials

DAVID B. POWELL, CFAIndustrials & Energy

CHARLES A. REIDHealth Care

J. DAVID SCHUSTERFinancial Services

KENNETH M. STUZIN, CFAMedia & Entertainment (PM)

PAUL J. CHEW, CFA Director of ResearchIT, Software

NICHOLAS P. COUTROSTechnology

DORON S. EISENBERG, CFAIT, Semi & Hardware

TIMOTHY HATHAWAY, CFAEnergy (PM)

PAUL LI, Ph.D., CFAHealth Care

US Equity Growth Fund US Smaller Companies Fund

"Our success is driven by being able to perform deep investment research on a broad universe of stocks, while maintaining a process that is highly collaborative."

—Paul Chew, Director of Research

4

US EQUITY VALUE STRATEGY: (Dublin UCITS III Fund)

8 A diversified portfolio of mid/large-cap companies

The strategy invests primarily in medium to large-cap US companies (generally no less than US $2 billion). We use a bottom-up, research intensive process with a rigorous valuation discipline to build a portfolio with attractive valuations and strong underlying fundamentals.

8 Targeting materially undervalued stocks of fundamentally strong companies

8 Deep fundamental research process

8 35-45 diverse holdings

8 Low portfolio turnover

8Market Cap >$2 billion

5

BROWN ADVISORY FUNDS AVAILABLE UNDER DUBLIN UCITS III UMBRELLA

US Equity Value Fund

US Equity Growth Fund

US Smaller Companies Fund

• A diversified portfolio of mid/large-cap companies

• Targeting materially undervalued stocks of fundamentally strong companies

• 35-45 diverse holdings

• Market Cap > $2 billion

• A diversified portfolio of small-cap companies

• Targeting emerging companies with large market opportunity and a unique competitive position

• 40-60 holdings

• Market Cap < $5 billion

The American Fund

• A diversified portfolio of mid/large-cap companies

• Targeting companies with superior business models and above average growth potential

• 35-45 diverse holdings

• Market Cap > $2 billion

• A core strategy that combines our 3 in-house equity funds: 40% Equity Value, 40% Equity Growth and 20% Smaller Companies

• Provides investors with access to ‘best in breed’ American companies regardless of their size or style

• 110-150 holdings

6

EMERGING FROM THE ABYSS – Overview

4 The current environment is as challenging as it has ever been.

4 Even pessimists have been surprised by the global nature and size of the financial systems’ problems. At this point a global slowdown in 2009 is virtually unavoidable.

4 However, the equity valuations of a host of proven US companies are at, or near, record lows, especially compared to the interest rate climate.

4What is an investor to do?

4 A whole host of uncertainties make navigating this crisis extremely complicated: the scale, the unexpected connectedness, the duration, the unprecedented volatility…

4 Although we anticipate a long and volatile recovery period, we believe there are a large number of high quality US businesses that will be able to successfully emerge from this crisis and currently offer exceptional value to long-term investors.

7

1) WHAT WE KNOW NOW

8

WHAT WE KNOW NOW

The financial crisis of a lifetime: A witch’s brew of contributing factors

4 Poor federal reserve policy, ridiculously easy money/credit

4 GSE’s on steroids, prescribed by our government

4 Bad accounting FASB “mark to market” (right idea but horrendous timing)

4 Repeal of the uptick rule, naked shorting, bear raids

4 Hedge fund structure as amplifier (no oversight and lots of leverage)

9

WHAT WE KNOW NOW

A postwar debt cycle has reached a crescendo

4 Crisis was underestimated, so government responses have been largely reactionary and iterative

4 Government policies are aimed at stabilizing asset values through rebuilding the credit system

4 Prior periods benefited materially from debt creation

4 Deleveraging makes future economic growth more challenging

10

DEBT CONTINUES TO CLIMB

11

WHAT WE KNOW NOW

The damage to Main Street has already been done…growth is slowing materially

4 Consumer confidence, ability to borrow, and willingness to continue pace of spending have all been impaired

4 Unemployment growth could worsen consumer intentions over the next year

4 Secular consumer spending growth may become more of a discussion point over the next several years as the baby boom generation approaches retirement age

4 Probably the most important recovery factor will be the time sufficient for households to rebuild savings, asset quality and system confidence; in our view, this is measured in years, not months

12

CONSUMER CONFIDENCE HITS ALL-TIME LOW – A BOTTOM?

13

UNEMPLOYMENT RISING

14

HAVE EXISTING HOME SALES BOTTOMED?

15

WHAT WE KNOW NOW

Corporate profit cycle was extended

4 Record share of profits for capital versus labor

4 Post 9/11 fiscal and monetary stimulus

4 Bush and McTeer, keep spending, buy an SUV

4 Emerging markets growth

4 Record pretax margin

16

RECORD PRETAX MARGIN

17

DRY BULK SHIPPING RATES FALL OFF A CLIFF

18

INDUSTRIAL PRODUCTION SLOWS – A BOTTOM?

19

2) WHAT WE DON’T KNOW

20

How deep?

4 Market appears to be discounting a 40-50% decline in corporate profits; almost unprecedented

4 Will government stimulus packages mitigate the depth?

WHAT WE DON’T KNOW

21

FINANCIAL CRISIS HAVE LEAD TO DEEP RECESSIONS…

Cumulat ive Loss in Out put Dur in g Recess ion s 1

Depen din g on t he Fin an cial S t at e of Af f air s

As a P er cen t of GDP

19 8 0 T hr ough 2 0 0 6

( 5 )

( 4 )

( 3 )

( 2 )

( 1)

0

P r eceded by Fin an cial Cr is is Not P r eceded by Fin an cial Cr is is

S our ce: Lall, S . , Car dar elli, R. an d S elim E lekdag, 2 0 0 8 . "Fin an cial S t r ess an d E con omic Down t ur n s , " I MF Wor ld E con omic Out look ( Oct ober ) ; E mpir ical Resear ch P ar t n er s An alys is .

1 Median Loss ; coun t r ies in cluded in t his s t udy ar e Aus t r alia, Aus t r ia, Belgium, Can ada, Den mar k, Fin lan d, Fr an ce, Ger man y, I t aly, Japan , Net her lan ds , Nor way, S pain , S weden , S wit zer lan d, Un it

%

Cumulative Loss in Output during Recessions depending on the Financial

State of Affairs

As a Percent of GDP, 1980 through 2006

Preceded by Financial Crisis

Not Preceded by Financial Crisis

%

0

-1

-2

-3

-4

-5

Source: Lall S., Cardarelli R. and Elekdag S. 2008. “Financial Stress and Economic Downturns” IMF World Economic Outlook (October); Empirical Research Partners Analysis.

22

S&P 500 Stocks Excluding Financials 1

Aggregate Declines in Earnings Per Share From Peak-to-Trough in Earnings

1950 Through 2009E

(50)

(45)

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

Mar. 1956 - Dec. 1958 Sept. 1959 - June 1961 Sept. 1969 - Dec. 1970 Sept. 1974 - Dec. 1975 Dec. 1981 - Mar. 1983 June 1989 - Dec. 1991 Sept. 2000 - Dec. 2001 Implied Decline ThisCycle

%

Source: Empirical Research Partners Analysis.1 Using trailing four-quarter earnings.

MARKET IS DISCOUNTING A (40)% DECLINE IN NON-FINANCIAL EARNINGS

%

0

-5

-10

-15

-20

-25

-30

-35

-40

-45

-50

S&P 500 Stocks Excluding Financials¹

Aggregate Declines in Earnings Per Share from Peak-to-Trough in Earnings

1950 through 2009E

Mar. 1956-Dec. 1958

Sept. 1959-June 1961

Sept. 1969-Dec. 1970

Sept. 1974-Dec. 1975

Dec. 1981-Mar. 1983

June 1989-Dec. 1991

Sept. 2000-Dec. 2001

Implied Decline this Cycle

Source: Empirical Research Partners Analysis

¹Using trailing four-quarter earnings

23

WHAT WE DON’T KNOW

How long?

4 Tough question as many previous economic and stock market declines were not the result of a credit cycle/asset value bust

4 Solutions are complicated as problems are global

4 Very few periods in stock market history where 10 year rolling returns have been this poor

4 History suggests that when consumer spending is this poor, subsequent stock market returns have been positive

4 Investor sentiment is already very depressed

24

THE LOST DECADES

8 The stock market is currently trading well below where it was nine years ago (chart below through February 2008)

8 The extended US-stock underperformance puts the current stock market in very bad company, the 1930’s, with its terrible unemployment, and the 1970’s with its double-digit inflation

Source: Morningstar; Note: The S&P 500 Index, which started in 1957, has been extrapolated back in time

25

3) LIVING THROUGH THE CRISIS

26

LIVING THROUGH THE CRISIS

Investor Psychology…

4 In contrast to 1999 where what could possibly go wrong, today’s attitude is, what can possibly go right

4 Our election, in part, was a reflection of this frustration

4 Flight to safety, T-bills versus everything else

4 Unprecedented media awareness and access drives short term thinking

4 A decade of scandals and lackluster equity returns has given investors new role models – Buffett and Peter Lynch are out, David Einhorn and SAC are in

4 Focus is not on what do I like about this company, but what can I find that I don’t like about this company

27

0.00

0.50

1.00

1.50

2.00

2.50

1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Mth 1 Yr

11/07/2008 T-Bills

10/01/2008 T-Bills

09/01/2008 T-Bills

TREASURY BILLS – FLIGHT TO QUALITY PUSHING RATES LOWER

28

CREDIT SPREADS WIDEN

0

200

400

600

800

1000

1200

1400

1600

1800

May

-97

Nov

-97

May

-98

Nov

-98

May

-99

Nov

-99

May

-00

Nov

-00

May

-01

Nov

-01

May

-02

Nov

-02

May

-03

Nov

-03

May

-04

Nov

-04

May

-05

Nov

-05

May

-06

Nov

-06

May

-07

Nov

-07

May

-08

Nov

-08

Current (bps) 594 Current (bps) 1619Wides (bps) 618 Wides (bps) 1681

10/29/08 10/27/08Average (bps) 146 Average (bps) 551% of Wide 96% % of Wide 96%% of Average 408% % of Average 294%

Investment Grade High Yield

29

REMARKABLE VOLATILITY – ETFs represent one-third of the U.S. market trading volume

Source: Allan M Newman’s Stock Market Crosscurrents

Source: IndexUniverse

30

4) EMERGING FROM THE ABYSS

31

EMERGING FROM THE ABYSS

4 Valuations are attractive

4 Huge / diverse economy

4 Technology base remains substantial

4 Innovative / entrepreneurial culture

4 Favorable demographics

4 Quality, technology, innovation, and global reach are on sale

4 Fresh political start

4 First in, first out?

Why the U.S.?

32

U.S. VALUATIONS ARE ATTRACTIVE

33

FCF YIELDS OF NEARLY 8%

Large-Capitalization Stocks 1

Free Cash Flow Yields1952 Through Late-O ctober 2008

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

%

Source: Corporate Reports, Empirical Research Partners Analysis.1 Capitalization-weighted data.

Large-Capitalization Stocks¹

Free Cash Flow Yields

1952 through Late-October 2008

%

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

052 55 60 65 70 75 80 85 90 95 00 05 08

Source: Corporate Reports, Empirical Research Partners Analysis

¹Capitalization-weighted data

34

EMERGING FROM THE ABYSS

4 Assume that 2009, perhaps even 2010 will be tough, and model companies accordingly

4 Financial strength and flexibility

4 Diversity of markets

4 Proven culture and history of innovation

4 Experienced management and history of mastering adversity

4 Positioned to benefit from secular trends coming out of this crisis

4 Depressed valuations that offer minimal downside risk and lots of long term upside

What are we doing?

35

PORTFOLIO… heavily skewed towards high quality, innovative, global businesses

Security % Equity Security % Equity1 MERCK & CO. INC. 6.7 20 CHEVRON CORP. 2.42 3M COMPANY 4.5 21 DELL INC. 2.23 DOVER CORP. 4.2 22 BJ SERVICES COMPANY 2.04 DIAGEO PLC. 4.1 23 CAPITAL ONE FINANCIAL CORP. 2.05 GENERAL ELECTRIC CO. 3.9 24 PARAMETRIC TECHNOLOGY CORP 2.06 ILLINOIS TOOL WORKS 3.9 25 MOLEX INC. 2.07 E I DU PONT DE NEMOURS & CO 3.8 26 CISCO SYSTEMS INC. 1.98 JOHNSON & JOHNSON 3.8 27 TALISMAN ENERGY INC. 1.99 UNILEVER 3.6 28 BB&T CORP. 1.9

10 CASH 3.4 29 M&T BANK CORP. 1.911 BANK OF NEW YORK MELLON CORP 3.3 30 VERIZON COMMUNICATIONS, INC. 1.912 MICROSOFT CORP. 3.1 31 PRUDENTIAL FINANCIAL INC. 1.813 INTEL CORP. 3.0 32 WATERS CORP 1.614 PROCTER & GAMBLE CO. 2.9 33 LINCOLN NATIONAL CORP. 1.615 FRANKLIN RESOURCES INC. 2.9 34 WALGREEN CO. 1.516 NOKIA CORP. 2.8 35 SYMANTEC CORP 1.517 BANK OF AMERICA CORP. 2.7 36 CONOCOPHILLIPS 0.918 CLOROX CO. 2.6 37 CITIGROUP INC. 0.719 STAPLES INC. 2.5 38 SEAGATE TECHNOLOGY 0.7

As of October 31, 2008

36

S to c kVa l®L C V 1 0 /3 1 /0 8 S -W td (L C V 1 0 3 1 0 8 ) P r ic e 2 3 .8 58 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1

P R IC E / YE A R -F O R W A R D E A R N IN G S6

12

18

24

30H I 2 7 .7 L O 9 .3 M E 1 7 .1 C U 9 .5

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

P R IC E / B O O K V A L U E0

2

4

6

8H I 7 .2 L O 1 .7 M E 3 .3 C U 1 .7

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

D IV ID E N D YIE L D %1

2

3

4H I 3 .7 L O 1 .0 M E 2 .1 C U 3 .6

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

D IV ID E N D YIE L D / 1 0 -YE A R T-B O N D YIE L D0.0

0 .3

0 .6

0 .9

1 .2H I 0 .9 7 L O 0 .1 6 M E 0 .3 5 C U 0 .8 9

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

U.S. Equity Value Portfolio — Absolute Valuation

Source: Brown Advisory

• The portfolio is trading at historic absolute lows

INEXPENSIVE

INEXPENSIVE

37

S to c kVa l®L C V 1 0 /3 1 /0 8 S -W td (L C V 1 0 3 1 0 8 ) P r ic e 2 3 .8 58 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1

E A R N IN G S -P E R -S H A R E0.3

0 .4

0 .6

0 .9

1 .3

1 .8

2 .6

H I 2 .5 9 L O 0 .3 9 M E 1 .1 1 C U 2 .5 5 G R 9 .3 %

1 2 -3 1 -1 9 8 80 9 -3 0 -2 0 0 8

R E TU R N O N E Q U ITY %12

15

18

21

24

27

H I 2 4 .1 L O 1 2 .7 M E 1 9 .2 C U 1 8 .0

1 2 -3 1 -1 9 8 80 9 -3 0 -2 0 0 8

G R O W TH R A TE E S TIM A TE10

12

14

16

18

20

22

H I 2 0 .1 8 •L O 1 0 .1 8 M E 1 6 .0 4 C U 1 0 .1 8

0 1 -1 8 -1 9 9 11 1 -0 6 -2 0 0 8

U.S. Equity Value Portfolio — Absolute Growth

Source: Brown Advisory

• A record of relatively reliable growth with solid profitability – now at low expectations

STEADY GROWTH

STABLE PROFITABILITY

ESTIMATES DOWN: more realistic levels

38

U.S. Equity Value Portfolio — Relative Growth

Source: Brown Advisory

• Eight years of underperformance - relative earnings growth recovering – expectations low

S to c kVa l®L C V 1 0 /3 1 /0 8 S -W td (L C V 1 0 3 1 0 8 ) P r ic e 2 3 .8 58 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1

P R IC E R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .8

1 .0

1 .4

1 .82 .2

H I 2 .0 4 L O 0 .9 8 M E 1 .3 3 C U 1 .2 5

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

E A R N IN G S R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .8

1 .01 .2

1 .6

2 .0 H I 1 .8 1 L O 0 .9 9 M E 1 .5 9 C U 1 .6 2 F Y1 1 .5 8 F Y2 1 .5 2

1 2 -3 1 -1 9 8 80 9 -3 0 -2 0 0 8

R E TU R N O N E Q U ITY R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .8

1 .0

1 .2

1 .4

1 .6H I 1 .5 5 L O 0 .9 8 M E 1 .2 9 C U 1 .1 6

1 2 -3 1 -1 9 8 80 9 -3 0 -2 0 0 8

G R O W TH R A TE E S TIM A TE R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D JU S TE D (S P 5 E ) E -W td0 .8

1 .0

1 .2

1 .4

1 .6H I 1 .4 9 •L O 0 .8 5 M E 1 .1 0 C U 0 .8 6

0 2 -0 1 -1 9 9 11 1 -0 6 -2 0 0 8

39

S to c kVa l®L C V 1 0 /3 1 /0 8 S -W td (L C V 1 0 3 1 0 8 ) P r ic e 2 3 .8 58 7 8 8 8 9 9 0 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1

P R IC E R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .8

1 .0

1 .4

1 .82 .2

H I 2 .0 4 L O 0 .9 8 M E 1 .3 3 C U 1 .2 5

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

P R IC E / YE A R -F O R W A R D E A R N IN G S R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .8

1 .0

1 .2

1 .4H I 1 .2 9 L O 0 .8 4 M E 0 .9 9 C U 0 .8 9

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

P R IC E / B O O K V A L U E R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .9

1 .2

1 .5

1 .8

2 .1H I 1 .9 9 L O 0 .9 3 M E 1 .2 8 C U 0 .9 3

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

D IV ID E N D YIE L D R E L A TIV E TO S & P 5 0 0 C O M P O S ITE A D J U S TE D (S P 5 E ) E -W td0 .6

0 .9

1 .2

1 .5

1 .8H I 1 .5 3 L O 0 .7 0 M E 0 .9 6 C U 1 .4 0

1 0 -2 8 -1 9 8 81 1 -0 6 -2 0 0 8

U.S. Equity Value Portfolio — Relative Valuation

Source: Brown Advisory

INEXPENSIVE

INEXPENSIVE

• The current portfolio’s relative valuation is near record lows

40

U.S. Equity Value Portfolio dividend yield vs. the 10-Year Treasury Bond

StockVal®BROW N ADVISORY LCV 10/31/08 S-W td (LCV103108) Price 23.4077 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

D IV ID END YIELD / 10-YEAR T-BOND YIELD0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.01

HI 0.96 LO 0.16 ME 0.35 C U 0.94

11-03-197811-11-2008

41

4 Established technology leader serving growing markets4 Inventories much lower than prior downturns, downside risk more manageable4 Strong finances and solid long-term prospects4 Near record low valuation with high free cash flow

EMERGING FROM THE ABYSS – Cisco

42

4 High-quality industrial serving diverse end markets with proprietary products4 Long record of fundamental success4 Strong finances and high free cash flow4 Record low valuation

EMERGING FROM THE ABYSS – Dover

43

4 Well respected industrial manufacturer serving numerous niche markets with highly engineered solutions4 Strong balance sheet and high free cash flow4 Consistent earnings growth record4 Record low valuation

EMERGING FROM THE ABYSS – Illinois Tool Works

44

4 Operates in a duopoly with substantial competitive advantages4 Secular growth through new product cycles and emerging markets4 Strong balance sheet on top of high free cash flow4 Near record low valuation

EMERGING FROM THE ABYSS – Intel

45

4 Arguably one of the best pharmaceutical R&D organizations in the world4 Upside through restructuring and product pipeline4 High-quality balance sheet with high free cash flow4 Record low valuation

EMERGING FROM THE ABYSS – Merck

46

4 Leading office supply retailer with ample opportunities to leverage its franchise both domestically and overseas4 Proven management team and business process4 Solid finances & attractive valuation

EMERGING FROM THE ABYSS – Staples

47

CONCLUSION

4 As credit continues to contract, economic activity next year is going to be very slow

4 Profit expectations for many companies will prove to be too optimistic

4 However, investor concerns have already reduced stock valuations to very depressed levels

4 Sentiment is awful

4 Quality, technology, innovation, and global reach are on sale

4 Buying good business franchises during such times has been very rewarding for the patient investor because such conditions do not remain static

48

Q & A

150 Brompton Road London

49

The The aftermathaftermath of the of the financialfinancial crisiscrisis21 November, 200821 November, 2008

ChiefChief economisteconomist Marie GiertzMarie Giertz

50

A historic fall…

51

How could it happen?

52

Systematic failure

53

Recession is a fact! The question is for how long?

54

Can Obama fix it?

55

Outlook

4 What is needed?– Stabilising interbank and money market – Stabilising mortgage and credit markets– Monetary stimuli– Fiscal stimuli– Bottoming of profits, business and consumer sentiment, housing market

4 When will we see a bottom?– Mid-year 2009– But below trend growth for many years

4 Risks– Geopolitical issues (Protectionism)– Inflation

56

Is the bull dead?

57

• Strategic Market & FTAs(Population of U.S. and FTAs is 560 million; U.S. 42% of Global Consumer Goods Market)

1

• Center for Global Innovation and Entrepreneurship(U.S. Responsible for 45% of Total World R&D Expenditures in 2006; 11.5% of Americans are Entrepreneurs)

2

• Strong Intellectual Property Right Protections(48% of the Patents Granted in 2006 by the U.S. Patent Office Originated from a Foreign Country)

3

• A Leader in Higher Education(Six of the Top Ten Universities in the World are in the U.S.)

4

• Highly Skilled Workforce(37% of the U.S. population 25 years and over has received at least an Associates Degree)

5

• Open to Cultures and Ideas(U.S. has more Irish than Ireland, Filipinos than Manila, Chinese than Hangzhou* and Poles than Warsaw)

6

1. Credit Suisse survey; 2 OECD, Main Science and Technology Indicators, May 2007, Florida International University/University of Michigan study, 2005; 3. U.S. Patent and Trademark Office; 4. The Times Higher Education Supplement 2006 (U.K.); 5. U.S. Census Bureau – Educational Attainment 2006; 6. U.S> Census Bureau, *Hangzhoucity proper

Investment Climate

58

FDI Trends

At $3 Trillion, the Estimated Combined Assets of Sovereign Wealth Funds will have a Major Impact on Global FDI Flows

Source: DB Research; Financial Times, May 25, 2007

59

Image of America

“Is this a bad time to talk about global warming?”

60

A Different Image

2.65 MW Prescott Airport Solar Power Plant, Arizona; 2.65 MW Prescott Airport Solar Power Plant, Arizona; 150 MW wind farm in Sweetwater, Texas150 MW wind farm in Sweetwater, Texas

61

Sweden’s Good Ideas

GREEN CERTIFICATIONS

E85 AVAILABILITY

CONGESTION TAX

ENVIRONMENTAL CAR REBATE

09 EU AGENDA

GEOTHERMAL

SUSTAINABLE CITIES

WASTE TO FUEL

62

OneBig ThingU.S. Embassy Stockholm

Cleaner Energy

Partners for

63

Sweden/U.S. AgreementJune 28, 2007

64

How Big is One How Big is One GigatonGigaton of COof CO22

65

66

67

Venture Capital RoundtableApril 19, 2007

68

Business Focus

Business Idea:

Own and Operate biogas plants.

Operate and Optimize biogas plants withprofit sharing.

Project manage and Examine establishmentand optimization of biogas plants.

We Secure the Investment in:

Biogas from Waste Water Treatment Plants.

Biogas from Industrial Organic Wastes(Slaughter house, food waste, etc)

Biogas from clean organic substrate(Ethanol stillage, crops, etc)

6969

Multi-stakeholder, 4-year pilot project to use Chemrec syngas to:•prove each step of the DME value chain•demo improved DME synthesis, Chemrec IP application rights

Multi-stakeholder, 4-year pilot project to use Chemrec syngas to:•prove each step of the DME value chain•demo improved DME synthesis, Chemrec IP application rights

DME Synthesi

s

Distribution

Vehicles Testing

Vehicle Equipment

IndustrialUse

CHEMREC gasifier

Syngas

Grant funding:€8,2M EU€12,5M Sweden

Black Liquor-DME Pilot Project

70

U.S. Ethanol Refineries

71

Renewables Portfolio Standards

*WA:*WA: 15% by 202015% by 2020ME: ME: 30% by 200030% by 200010% by 2017 10% by 2017 -- new REnew RE

MN: MN: 25% by 202525% by 2025(Xcel: 30% by 2020)(Xcel: 30% by 2020) VT: RE meets load VT: RE meets load

growth by 2012growth by 2012

WI: WI: requirement varies by requirement varies by utility; 10% by 2015 goalutility; 10% by 2015 goal

☼☼ NH: NH: 23.8% in 202523.8% in 2025

MA: MA: 4% by 2009 +4% by 2009 +1% annual increase1% annual increase

RI: RI: 16% by 202016% by 2020

CT: CT: 23% by 202023% by 2020

☼☼ NY: NY: 24% by 201324% by 2013

☼☼ NJ: NJ: 22.5% by 202122.5% by 2021

☼☼ PA: PA: 18%18%¹¹ by 2020by 2020

☼☼ MD: MD: 9.5%9.5% in 2022in 2022

☼☼ *DE: *DE: 20% by 201920% by 2019

☼☼ DC: DC: 11% by 202211% by 2022**VA: 12% by 2022VA: 12% by 2022

☼ NC: 12.5% by 2021NC: 12.5% by 2021(IOUs)(IOUs)

10% by 2018 (co10% by 2018 (co--ops & ops & munismunis))

MO: 11% by MO: 11% by 20202020

IL: 8% by 2013IL: 8% by 2013

IA: 105 MWIA: 105 MW

ND: 10% by 2015ND: 10% by 2015

MT: MT: 15% by 201515% by 2015

☼ CO: 20% by 2020 CO: 20% by 2020 (IOUs)(IOUs)*10% by 2020 (co*10% by 2020 (co--ops & large ops & large

munismunis))

TX: TX: 5,880 MW by 20155,880 MW by 2015

☼☼ NM: NM: 20% by 202020% by 2020 (IOUs)(IOUs)10% by 2020 (co10% by 2020 (co--ops)ops)

☼☼ AZ: AZ: 15% by 202515% by 2025

CA:CA: 20% by 201020% by 2010

☼☼ **NV: 20% by 2015NV: 20% by 2015

OR: 25% by 2025OR: 25% by 2025 (large utilities(large utilities))5% 5% -- 10% by 2025 (smaller utilities)10% by 2025 (smaller utilities)

HI: HI: 20% by 202020% by 2020

☼☼ Minimum solar or customerMinimum solar or customer--sited RE requirementsited RE requirement* Increased credit for solar or customer* Increased credit for solar or customer--sited REsited RE

¹¹PA: 8% Tier I / 10% Tier II (includes nonPA: 8% Tier I / 10% Tier II (includes non--renewablesrenewables); SWH is a Tier II resource); SWH is a Tier II resource

State RPSState RPS

State GoalState Goal

Solar water heating Solar water heating (SWH) eligible(SWH) eligible

Source: DSIRE: Source: DSIRE: www.dsireusa.orgwww.dsireusa.org August August

72

73

Opportunities Identified

• Ethanol and biogas• Gasification from biofuels• Waste to fuel• Biomass collection infrastructure• Converting boilers to biomass boilers• District heating• Pellets and pellets heating• Low energy housing

74

75

76

77