Tom Lee JPM

North America Equity Research
11 October 2012
S&P 500 3Q EPS: Bad Does Not

Mean Broken
Domestic Getting Stronger; Int'l Potentially Troughing;
14 Ideas
Global PMIs are inching upwards, a signal supported by steepening yield

curves Global PMIs have begun to improve (US above 50) and J.P. Morgan
economics Nowcasting tool sees PMIs gaining in October (see Figure 2), in line
with their view that businesses continue to expand. A forward rise in the PMIs is
supported by the steepening of the 30yr vs 10yr curve which historically has
presaged further gains in PMIs (see Figure 6).
a positive for Industrial and Technology earnings, which account for 90% of
the Q/Q decline in 3QE EPS. This points to future improvements in Q/Q and Y/Y
growth for both Industrial and Technology earnings, both of which are closely
linked to movements in the PMI (see Figure 3 and Figure 4). Combined, Industrial
and Technology account for $0.56 of the Q/Q decline in EPS (3QE vs 2Q), or
90% of the decline (see Figure 1).
Domestically oriented companies are on balance lifting estimates, drag is global
(Figure 17). Those companies with lowest international exposure (lowest third) saw
3Q estimates gain 1% on average since June while those with the heaviest saw an
11% decline. While this is not entirely surprising (and our thesis for 2012), this
bolsters our view that investors should focus on US-centric Cyclicals in 2012.
Financials are likely to be one of the bright spots in 3Q, and recall that US
credit agencies purge foreclosures and bankruptcy filings after 7 years2005
was the peak year of filings at 2mm (see Figure 14). Financials are one of three
groups that saw estimates raised in 3Q (Figure 18) reflecting improving credit trends
and loan demand (along with US housing and employment, etc.). But a tailwind is
building in 2013, in our view, which is the resetting of the credit scores for millions
of Americans. The peak year of personal bankruptcies was 2005 and those records
are removed from credit reports after 2012. Thus, beginning in 2013, we should see
rapid improvements in the credit quality of millions of Americans.
Discretionary earnings (and domestic Cyclicals) should get a lift from the
record $5.3T wealth effect in 2012 (Figure 10), boosting 2013 GDP by 1.6%. The
combined $5.3T wealth effect in 2012 from the rise in equities ($3.6T) and
housing ($1.7T) is the largest such increase in the past 12 years (and exceeds 2003s
$5.1T). It also reverses about half of the cumulative losses since 2007 ($13T lost in
2008 alone). Our economists estimate that for each $100 in wealth, $5 is spent on
consumption in the following yearor $265b incrementally, representing 1.6% lift
to 2013 GDP. This should directly boost Consumer Discretionary earnings which
closely track US consumer confidence (Figure 13). And we would argue the
continued rise in confidence, despite corporate cautiousness, is a direct result of this
wealth effect.
Portfolio Strategy
Thomas J Lee, CFA
AC
(1-212) 622-6505
thomas.lee@jpmorgan.com
Katherine C Khor
(1-212) 622-0934
katherine.khor@jpmorgan.com
J.P. Morgan Securities LLC
S&P500 (LHS)
Cyclicals (RHS)
Defensives (RHS)
S&P500
(LHS)
10/11/12
1,433
Cyclicals
(RHS),
10/11/12,
113
Defensives
(RHS)
10/11/12
112
1,500
1,450
1,400
1,350
1,300
120
115
110
105
100=start of year
With 3Q12 results upon us, the critical issue is whether these weak results point to (i)
earnings having peaked in this cycle already and we are tipping into a global recession
(bad, obviously) or (ii) 3Q reflects a trough in the cycle and earnings should accelerate
(given strengthening in the US coupled with stabilization in Europe and China). We
subscribe to the latter view and highlight some perspectives below:
100
1,250
12/11
2/12
4/12
6/12
8/12
95
10/12 12/12
1Q12 2Q12 3Q12 QTD YTD

S&P500
12%
-3% 6% -1% 14%
Cycl (Mat, IT, Disc, Ind) 14%
-5% 5% -1% 13%
Near- Cycl(Ener, Fin)
12%
-7% 8% 1% 14%
Def (Stpl, HC, Tel, Util)
3%
5%
3% -0% 12%
2012E
1433
$105
13.6x
2.2%
2013E
$110
13.0x
2.4%
Valuation:
S&P500 Level
EPS
P/E (current)
Div Yield
Short-term Target (by election day):

S&P500
1495
P/E
13.6x
Year-End Target:
S&P500
P/E
1430
13.0x
Source: J.P. Morgan and Bloomberg.
See page 54 for analyst certification and important disclosures.

J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in
making their investment decision.
www.morganmarkets.com
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Thus, there are some reasons to expect rising S&P 500 estimates, something
suggested by the continued rise in economic momentum indicators (like the Citi
Eco Surprise Index, see Figure 15). The US CESI (CESIUSD Index GP <<GO>>)
has been rising since summer of 2012 and is currently at 43. Since 2007, whenever the
CESI has been above 40, EPS revisions have moved positively 4 of the 5 times (one
time revisions went flat) and we believe the arguments above point to reasons to see
estimates revised higher in coming months. More arguments are covered in this report.
Bottom-line: While equities have faltered in the past 4 weeks, the positive thesis
remains intact 14 ideas. Investors are understandably nervous given the heavy negative
pre-announcements (see Figure 21) and the overall weakness in markets. We do not
believe US earnings have peaked (S&P 500 EPS likely peaks around $145-$160 per share
(see US Equity Strategy FLASH: Weak 2H... dated 9/27/12). And, as a consequence,
we view recent weakness in stocks as an attractive entry point. We have identified 14
names that are domestically focused, beat EPS recently and have insider buying. The
tickers are: KR, WFC, CVS, M, UNP, FITB, STI, BBBY, CTAS, EQR, KEY, GPC,
NOC and NI (see Figure 20).

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
The problem in 3Q is 4 sectors: Energy

and Materials (Commodities) and
Industrials and Technology (China and
Europe)global bad, US-centric good
Take a look at Figure 1 below which highlights quarterly EPS contributions by sector
for 3QE (and other quarters as well). Specifically, we highlighted the 4 sectors that
are really driving the weak Y/Y and Q/Q results:
Commodity-related: Basic Materials is the largest driver of the Q/Q decline in
3Q12E EPS and that is a simple function of declining prices (more than
volumes). Similarly, Energy EPS is also following lower commodity prices.
Downturn in European and China demand: Technology and, to a lesser
extent, Industrials are weak Q/Q reflecting the downturn in demand seen in
Europe (where economies have been in recession) and China (where economy
has been decelerating).
In other words, 3Q is not telling us anything we dont already know.
Figure 1: Quarterly EPS Forecasts, 2010-2013E
$ per share; Q/Q >1% shaded green, Q/Q <1% shaded red
2010A
1Q11A 2Q11A 3Q11A 4Q11A 2011A
1Q12A 2Q12A 3Q12E 4Q12E 2012E
2013E
Cyclicals
$35.61
$9.63 $10.67 $10.44 $11.34 $42.08
$10.81 $11.33 $10.49 $12.50 $45.13
$52.10
Materials
$2.51
$0.93
$1.00
$0.83
$0.56
$3.32
$0.92
$0.90
$0.64
$0.71
$3.17
Industrials
$7.93
$2.13
$2.46
$2.50
$2.59
$9.68
$2.48
$2.79
$2.55
$2.67
$10.48
Discretionary
$8.12
$2.00
$2.35
$2.28
$2.41
$9.05
$2.13
$2.44
$2.41
$2.77
$9.74
Technology
$17.05
$4.57
$4.86
$4.83
$5.77 $20.03
$5.28
$5.21
$4.89
$6.35
$21.73
Near Cyclicals
$23.55
$7.15
$6.52
$7.85
$6.69 $28.21
$8.00
$7.44
$7.56
$7.83
$30.82
$33.76
Energy
$10.24
$3.24
$3.82
$3.82
$3.09
$13.97
$3.35
$3.24
$3.18
$3.13
$12.90
$13.40
Financials
$13.31
$3.91
$2.70
$4.03
$3.60
$14.24
$4.65
$4.19
$4.38
$4.69
$17.92
$20.35
Defensives
$26.33
$6.72
$6.96
$7.36
$6.52 $27.55
$6.79
$7.07
$7.17
$6.78
$27.81
$30.31
Staples
$9.42
$2.28
$2.54
$2.57
$2.60
$9.98
$2.38
$2.57
$2.55
$2.75
$10.24
$11.22
HealthCare
$11.54
$3.14
$3.12
$3.14
$2.94
$12.34
$3.15
$3.21
$3.04
$3.02
$12.41
$13.41
Telecom
$2.07
$0.53
$0.52
$0.56
$0.36
$1.98
$0.54
$0.55
$0.53
$0.39
$2.00
$2.42
Utilities
$3.31
$0.77
$0.77
$1.09
$0.62
$3.26
$0.73
$0.74
$1.05
$0.63
$3.16
$3.26
Total B/U EPS
$85.49
$23.50 $24.14 $25.65 $24.55 $97.84
JPM Strategy
Commodities
$4.00
$11.76
$11.33
China and
Europe
$25.00
$25.60 $25.84 $25.22 $27.10 $103.76
$116.16
$26.00 $27.56 $105.00
$110.00
Source: J.P. Morgan.

3
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
#1: Global growth poised to move higher,

boosting Industrial & Technology EPS
The improvement in September PMIs bolsters our economists expectations that
global growth is poised to move modestly higher. As shown in Figure 2 below, their
Nowcast (which is more real-time than September PMIs) shows this strength has
continued in recent weeks. There is data supporting this: new orders components
were promising, US Sept labor report was solid, and it now seems that the capital
goods declines in recent months were more an air pocket (Bruce Kasmans words).
Figure 2: J.P. Morgan Nowcast Shows Global Growth Strengthening
Rising
Source: J.P. Morgan, from Global Data Watchdated 10/5/12.
Industrial and Technology EPS should start improving

Notice how closely Technology (Figure 3) and Industrial EPS (Figure 4) have
followed changes in PMI. This suggests to us that the slump seen in both sectors
should soon recover. As highlighted by the arrows, the Global PMI is recovering (y/y
growth rates).
Figure 3: Technology EPS and Global PMI (% chg y/y)
Global PMI % chg y/y (left axis)
Figure 4: Industrials EPS and Global PMI (% chg y/y)

Global PMI % chg y/y (left axis)
Technology y/y chg
80%
1.0
80%
60%
0.8
60%
Industrials y/y chg
20%
0.2
0%
0.0
-20%
(0.2)
-40%
(0.4)
1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12 1/13
40%
0.3
EPS
0.4
Global PMI 1-yr % chg
0.6
40%
EPS
Global PMI 1-yr % chg
0.7
20%
0%
(0.1)
-20%
-40%
(0.5)
1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11 1/12 1/13

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
30Y vs 10Y yield curve steepening supports further gains in

PMIs...
Long-term yield curves have steepened recently (see Figure 5) in many regions. We
have highlighted US, Germany and Spain in the figure below. Note that Spains
long-end curve basically inverted earlier this year (a sign of recession, which indeed
is happening). We like to look at the longer-end of the curve as it is less subject to
actions by central banks.
Note how historically changes in the yield curve (long-end) have presaged gains
in the PMI. We have plotted the US data below in Figure 6 and, as shown, the
steepening of the curve is the steepest since mid-2011.
Recall that since mid-2011 US economic momentum has improved considerably.
We believe the recent steepening suggests a similar improvement in coming
months.
Figure 5: Yield Curves Are Steepening... 30Y vs 10Y Spreads
Figure 6: Does YC Lead ISMs? Chg in 30Y vs 10Y and Change in PMI
y/y delta
USA
1
Germany
Spain
0.5
-0.5
1/7/05
1/7/06
1/7/07
1/7/08
1/7/09
1/7/10
1/7/11
1/7/12
Chg in PMI 6m chg
0.8
20
15
0.6
10
0.4
0.2
0
0
-5
-0.2
-10
-0.4
-15
-0.6
-0.8
1/5/08
Chg in 30Y vs 10Y (y/y delta)
6-month change in ISM (Manufacturing, SA)
30Y vs 10Y spread
1.5
Delta in Yield Curve (1-yr change in 30Y less 10Y)
-20
4/5/09
7/5/10
10/5/11
1/5/13
1/7/13

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
#2: Industrial metals recovering, positive

for Energy & Basic Materials EPS
While headline commodity prices continue to show mixed results (see Figure 7), the
common factor, which measures underlying demand, continues to improve. We
believe this supports the improvements in PMI noted previously.
Figure 7: The Common Factor Among Commodity Prices Is Improving...
Source: J.P. Morgan, from Global Data Watch dated 10/5/12. Note: Oil is Brent while industrial metals and agriculture are the
J.P. Morgan commodity curve indexes. Common movements for each are given by the common factor scaled by each commoditys
individual loading weight. The idiosyncratic movement is the residual.
Energy and Basic Materials EPS closely track moves in

industrial metals indices implying improvements in
coming quarters for EPS
One of our favorite series to track industrial metal demand is the DJ-UBS Industrial
Metals index (DJUBSIN Index GP <<GO>>) and this index has been improving
since bottoming in August 2012.
This bodes well for improvements in Basic Materials and Industrials EPS in
coming quarters as shown in Figure 8 and Figure 9.
Figure 9: DJUBSIN vs Energy EPS
Materials
DJUBSIN (left axis)
100.0
1.0
6/12
6/11
6/10
6/09
6/08
0.0
6/07
50.0
6/06
6/12
6/11
6/10
6/09
6/08
6/07
6/06
6/05
6/04
6/03
6/02
6/01
0.0
6/00
50.0
2.0
6/05
0.2
3.0
150.0
6/04
100.0
4.0
200.0
6/03
0.4
5.0
250.0
6/02
0.6
150.0
6.0
6/00
0.8
200.0
DJUBSIN - Industrial Metals
1.0
250.0
Energy
300.0
Quarterly EPS
DJUBSIN - Industrial Metals
1.2
6/01
DJUBSIN (left axis)

300.0
Quarterly EPS
Figure 8: DJUBSIN vs Materials EPS
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
#3: 2012 US wealth effect $5T, largest

since before 2004 US consumers are
gaining confidence, which supports higher
Discretionary EPS
$5.3T wealth effect in 2012 (housing and stocks), largest in
past 12 years
The wealth effect is the improvement for households from change in the value of
assets. The most significant assets for US households are equities ($22T held) and
housing ($18T held). For equities, the wealth effect is the gain from stock
appreciation (we use the S&P 500 as the proxy) and housing (Case-Shiller gain).
The data is compiled in Figure 10 below. Note that in 2012 equity gains are
$3.6T and US housing gains are $1.7T, or $5.3T in total.
This is the largest increase in the past 12 years. The next largest increase was in
2003, which was $5.1T.
Historically, for every $100 rise in wealth, J.P. Morgan estimates that this results
in a $5 increase in consumption over the following year. This implies about
$265b increase in consumption in 2013, or 1.6% lift to GDP.
Figure 10: US Wealth Effect (2000 to 2012)

Wealth Effect from Stock Market
Prior yr ending
balance in HH
Wealth Effect from Housing
(Prior yr ending
% chg
balance in HH and
and NP
NP holding of
in stock
holdings of
corporate equities) x
market
corporate
(% chg in stock
equities ($bn)
market)
Total Wealth Effect
Prior
(Prior yr ending
% chg
year
housing value)
in Casehousing
x (% chg in
Shiller
value
Case-Shiller 2020-city
($bn)
city index)
Aggregate
Wealth Effect
($bn)
2000
17,203
-10%
(1,744)
16,446
12%
1,904
160
2001
2002
15,350
13,474
-13%
-23%
(2,002)
(3,148)
16,894
18,899
8%
12%
1,340
2,310
(662)
(838)
2003
2004
10,596
14,123
26%
9%
2,795
1,270
20,556
22,575
11%
16%
2,333
3,651
5,128
4,921
2005
15,985
3%
480
24,981
16%
3,878
4,358
2006
2007
17,396
20,361
14%
4%
2,369
719
28,033
28,260
1%
-9%
189
(2,552)
2,558
(1,833)
2008
20,947
-38%
(8,062)
26,575
-19%
(4,947)
(13,008)
2009
2010
12,463
15,967
23%
13%
2,923
2,041
22,889
22,301
-3%
-2%
(707)
(535)
2,216
1,506
2011
2012
18,505
18,029
0%
20%
(1)
3,582
22,343
21,540
-4%
8%
(909)
1,700
(909)
5,282
heavy
losses
Source: J.P. Morgan, Bloomberg and Federal Reserve. Note: 2012* reflects annualized data. Prior yr ending balance in HH and NP
holding of corporate equities reflects Federal Reserve Flow of Funds (Z1) "households and nonprofit organizations, directly and
indirectly held corporate equities; asset." % change in stock market reflects S&P 500 data.

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
First improvement in housing wealth effect since 2006

The combined positive wealth effect from equity markets and home equity for US
households in 2012 is $5T, comprising $3.6T from equities (Figure 11) and $1.7T
from US housing (Figure 12).
For the first time since 2005, US home prices have risen YTD and, as we have
written in several pieces (see US Housing Food Chain IV dated 8/29/12), we
see this recovery as not only sustainable but only 1 year into a 3- to 5-year cycle.
This $5T figure is the largest since before 2004 (or 8 years) and reverses the
massive drags on wealth effect from 2007 to 2011. Consider that in 2008 the
wealth effect was a staggering $13T in losses.
Figure 11: Stock Market Wealth 2012 $3.6T
Figure 12: Housing Wealth 2012 $1.7T
$ billions
$ billions
(Prior yr ending housing value) x (% chg in Case-Shiller 20-city index)
(Prior yr ending balance in HH and NP holding of corporate equities) x (% chg in

stock market)
5,000
4,000
6,000
USD (billions)
2,000
2,923
2,369
3,582
719
480
(1)
-2,000
-4,000
-6,000
Massive LOSS of WEALTH
3,000
2,041
USD (billions)
4,000
3,878
2,000
1,000
189
0
-1,000
-2,000
-3,000
-5,000
(8,062)
-10,000
2005
2006
2007
2008
2010
2011
2012*
Source: J.P. Morgan, Bloomberg, Federal Reserve Flow of Funds. Note: Reflects
Federal Funds Flow of Funds (Z1) data, "households and nonprofit organizations,
directly and indirectly held corporate equities; asset." While % change in stock market
reflects S&P 500 data.
(535)
2009
2010
(909)
(4,947)
-6,000
2009
(707)
(2,552)
-4,000
-8,000
1,700
2005
2006
2007
2008
2011
2012*
Source: J.P. Morgan and Bloomberg. Note: 2012* reflects annualized.
Impact on US consumption may be $250b in 2013...

According to our US economists, the impact on consumption from this wealth effect
is about 5%that is, about 5% of each $1 of higher wealth is spent over the next
year.
This implies a $250b tailwind from the $5T wealth effect. This works out to a
1.6% lift to US GDP in 2013 (on $15T economy).
We have not heard investors talk about the potential boost to 2013 growth (and
this is not in our base case) but this could arguably offset a portion of the US
fiscal cliff.

11 October 2012
and this argues for further improvements in Consumer

Discretionary EPS
Tailwinds remain strong for companies with US exposure. The wealth effect, in our
view, explains in part why US consumer confidence continues to strengthen even as
the global economy remains sluggish.
But given the $5T wealth effect noted above, we believe US consumer
confidence is poised to gain further in 2013.
Such gains in consumer confidence (see Figure 13) suggest we should see
Consumer Discretionary EPS continue to expand at a healthy pace. Since 2004,
the relationship between these factors has been significant.
Figure 13: Two-Year % in Consumer Confidence vs Discretionary Sector EPS

Two-year % change in consumer confidence and the level of Consumer Discretionary EPS
2-yr % in consumer confidence (left axis)
Discretionary
6.0%
3.0
4.0%
2.5
2.0%
0.0%
2.0
-2.0%
1.5
-4.0%
1.0
-6.0%
-8.0%
6/02 6/03 6/04

Quarterly EPS
2-yr % in consumer confidence
Thomas J Lee, CFA

(1-212) 622-6505
0.5
6/05
6/06
6/07
6/08
6/09
6/10
6/11
6/12
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
#4: Remember the number 7 peak 05

bankruptcies now being purged from credit
recordpositive for Financials
When an American files for bankruptcy, his/her credit record reflects this event for 7
years and is then purged. This is very important.
Why? Take a look at Figure 14 below. US personal bankruptcy filings peaked in
2005 at 2.039mm (in retrospect, this was a bad sign).
Using the 7-year guideline, this implies that after 2012, millions of Americans
should see their credit scores dramatically improve (the bankruptcy is purged).
This sets the stage for more Americans to meet the underwriting standards of
banks (which are currently only approving Americans with higher FICO scores)
and would further support a recovery in the US housing market.
Figure 14: Personal Bankruptcy Filings

Since 2000
Americans whose
bankruptcy is purged
2012
2,039,214
Personal Bankruptcies
2005
2,039,214
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Personal Bankruptcies
Americans whose bankruptcy is purged
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Source: J.P. Morgan and the American Bankruptcy Institute.
Separately, we believe that US Financials will have many

positive things to say about improving delinquencies, etc.,
thus, further setting stage for credit standards to ease
Financials will likely be one of the bright spots in 3Q. Delinquency trends have been
improving throughout the last 3 years but we believe in 3Q improvements gained at a
faster pace and moved to new cycle lows.
This suggests that bank staff may need to be reallocated, away from workout/
collections towards originations, and would be another step towards accelerating
credit expansion.
10

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
#5: CESI is turning up and associated with

positive S&P 500 EPS revisions
While we had highlighted the strong relationship between economic momentum (our
favorite is the Citi Economic Surprise Index, CESIUSD Index GP <<GO>>) and
EPS revisions, the relationship is apparent when looking at Figure 15 below:
Note how, in 5 instances since 2007, an upturn in the CESI was followed by an
improvement in the trend of EPS revisions.
The improvement in CESIUSD reflects all of the points in the discussion in
previous sections (Global PMIs bottoming, US demand strengthening, US
housing accelerating).
So far, EPS revisions have not moved upwards, and this lag has been seen in the
previously highlighted examples.
The key takeaway, however, is that we do not believe S&P 500 EPS is peaking.
Rather, we think it is reflecting the shift in momentum from global growth to US
domestic demand.
Figure 15: EPS Revisions vs. Economic Surprise Index Suggests Future Positive Revisions
EPS revisions are for forward 1 qtr as of each point; CESIUSD Index
10/11/12
45.7
55%
75.0
25.0
10/10/12
45%
45%
-25.0
35%
-75.0
25%
15%
-125.0
Up Revisions as % of Total Revisions

Citigroup Economic Surprise Index
5%
1/07
8/07
3/08
10/08
5/09
12/09
7/10
2/11
9/11
4/12
Citi Economic Surprise Index
Up Revisions as % of Total Revisions
65%
-175.0
11/12
Source: J.P. Morgan, Bloomberg, and FactSet.
11

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
#6: Domestic-oriented companies seeing

modest EPS revisions
EPS cuts more pronounced for companies with more nonUS exposure
It is important to keep in mind that US-oriented companies (those with heavier US
exposure) have seen modest EPS estimate revisions. That is, the bulk of negative
EPS estimate revisions has been attributable to those with greater share of sales
overseas. Take a look at Figure 16 and Figure 17 below.
The groups that saw positive EPS estimate revisions in the quarter are Financials
(particularly those US-oriented), Utilities, Telecom and Energy (US-oriented).
Those with heavy non-US exposure (red dots) saw greater overall EPS estimate
cuts since 6/30/12 for 3Q.
On the other hand, take a look at those with little international exposure. As one
can see in Figure 17 the reductions in EPS estimates for those with low
international exposure have been significantly more modest than for those with
high international exposure.
Figure 16: Sector Analysis % Change in 3Q12 Net Income Estimates Since 6/30/12 vs % of
Sales International
Between 6/30/12 and today
% Change in 3Q12 Net Income Estimates

since6/30/12
20%
High International Exposure
15%
Utilities
10%
Financials
5%
Utilities
Energy
Staples HealthCare
Discretionary
-5%
Telecom
Industrials
Telecom
StaplesHealthCare
Technology
Discretionary
Industrials
Materials
Energy
-15%
1%
Medium International Exposure

Low International Exposure
Financials
0%
-10%
HealthCare
Industrials
Discretionary
Technology
Energy Staples
Financials
-20%
-6%
Technology
Materials
-25%
-30%
Materials
-35%
0%
20%
40%
60%
% of Sales International
80%
Source: J.P. Morgan and FactSet.

Note: % of Sales International. Data is from Dubravko Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.
12
Figure 17: % Change in 3Q12 Net Income

Estimates Since 6/30/12 Based on % Sales
International
100%
-11%
High
International
Exposure
Medium
International
Exposure
Low
International
Exposure

Note: % of Sales International. Data is from Dubravko
Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Looking at this across sectors, Cyclicals see biggest EPS

reductions into 3Q
Looking at 3Q specifically by sector, we have made a simple waterfall chart below.
What one can see is that Technology and Energy account for 2/3 of the EPS cut since
the start of the quarter.
In other words, the reduction in 3QE EPS is heavily concentrated. So of the $1.30
cut in 3QE EPS since 6/30/12, Technology and Energy represented the majority.
Estimates were actually modestly increased overall for Telecom, Financials and
Utilities.
Figure 18: Sector Contribution Analysis S&P 500 3Q12 EPS Estimate Revision
Since 6/30/2012
Figure 19: % Contribution of Sectors to 3Q12E EPS

Revisions vs Earnings Weight

(10%)
$26.27 -$0.48
-$0.15
+$0.09 $24.97
Utilities
Financials
Telecom
-$0.01 +$0.01 +$0.03
HealthCare
-$0.10
Staples
Discretionary
-$0.11
Industrials
Materials
Energy
-$0.19
% Contribution to 3Q12 EPS Change
-$0.38
Technology
Utilities
(5%)
Financials
HealthCare
0%
5%
10%
S&P500 3Q12E Est as of Today
Staples
Discretionary
POSITIVE:
revisions are smaller
than earnings weight
15%
Industrials
Materials
20%
25%
Energy
30%
NEGATIVE:
revisions are larger
than earnings
35%
S&P500 3Q12E Est as of 6/30/12
Telecom
40%
40%
30%
Technology
20%
10%
% of S&P500 Total Net Income
0%

13

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
MARKET STRATEGY: 14 ideas with

domestic exposure
On balance, we think the S&P 500 will deliver earnings that will, on balance, be
better than expectations. So, what should investors consider? We have identified 14
names that are domestically focused, beat EPS recently and have insider buying. We
used the following criteria:
The stock is in the S&P 500;
It is in lowest quartile of exposure to international sales for its specific sector;
In the past 6 months, there has been insider buying; and
The company has exceeded Street forecasts on EPS beats for each of the last two
quarters (1Q12 and 2Q12).
On average, these 14 names have 12% upside to J.P. Morgan target prices (for those
that are covered) and a 2013E P/E of 11.3x.
Figure 20: 14 Domestically Oriented Stocks

Priced as of 10/10/12
JPM Coverage
Name
Sub-Industry
Ticker
Current
Price
1 Kroger Co.
Food Retail
KR
$23.30
2 Wells Fargo & Co.
Diversified Banks
Market JPM
Cap Rtg JPM Analyst
$12,293
Screen Metrics
Target Implied
Price Upside
EPS and Valuation
Insider Net
%
Shares 1Q12 2Q12
Sales Purchased EPS EPS 2013E P/E
Int'l
(last 6m) Beat Beat EPS ('13E)
Ken Goldman
$29.00
24%
0%
269,974
3%
3Q12
Reporting
Date
P/B
Date
2%
$2.56
9.1x 3.24x
11/29/12
$3.67
WFC
$35.23 $186,091
OW Vivek Juneja
$42.00
19%
0%
72,974
3%
5%
9.6x 1.35x
10/12/12
3 CVS Caremark Corp. Drug Retail
CVS
$48.06
$61,144
OW Lisa C. Gill
$57.00
19%
0%
5,995
5%
11%
$3.79 12.7x 1.61x
11/6/12
4 Macy's Inc.
Department Stores
$39.00
$15,698
OW Matthew R. Boss, $46.00

CPA
18%
0%
5,180 19%
3%
$3.80 10.3x 2.67x
11/7/12
5 Union Pacific Corp.
Railroads
UNP
$120.93
$57,273
OW Thomas R. Wadewitz
$140.00
16%
0%
117,634 15%
5%
$9.51 12.7x 3.00x
10/18/12
6 Fifth Third Bancorp
Regional Banks
FITB
$15.82
$14,537
7 SunTrust Banks Inc.
Regional Banks
STI
$29.66
$15,971
BBBY
$61.43
$14,080
9 Cintas Corp.
Diversified Support Services

CTAS
$41.97
$5,251
10 Equity Residential
Residential REITs
EQR
$56.34
$16,959
11 KeyCorp
Regional Banks
KEY
$8.59
$8,104
12 Genuine Parts Co.
Distributors
GPC
$61.32
$9,511
Christopher Horvers,
$66.00
CFA
13 Northrop Grumman Corp.

Aerospace & Defense NOC
$68.21
$16,862
Joseph B. Nadol III$52.00
14 NiSource Inc.
$25.55
$7,279
8 Bed Bath & Beyond Inc.H omefurnishing Retail
Multi-Utilities
NI
Vivek Juneja
$18.00
14%
0%
25,000 32%
18%
$1.59 10.0x 1.09x
10/18/12
OW Vivek Juneja
$33.50
13%
0%
16,354 39%
35%
$2.79 10.6x 0.79x
10/22/12
12%
0%
88,365 14%
9%
$5.15 11.9x 3.59x
12/18/12
12%
0%
91,929 21%
3%
$2.81 15.0x 2.44x
12/20/12
Anthony Paolone, CFA

$63.00
12%
0%
15,869 74%
6%
$1.22 46.0x 2.98x
10/24/12
OW Steven Alexopoulos,$9.50
CFA
11%
0%
6,672 11%
26%
$0.86 10.0x 0.82x
10/18/12
8%
1%
8%
1%
$4.38 14.0x 3.26x
10/18/12
-24%
6%
128,884 20%
15%
$7.03
9.7x 1.58x
10/24/12
0%
21%
$1.57 16.3x 1.43x
10/22/12
12%
1%
Christopher Horvers,
$69.00
CFA
OW Andrew C. Steinerman
$47.00
N
Average
% of Sales International Data is from Dubravko Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.
14
33,368
36,671
1%
19%
12%
11.3x 2.02x

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Appendix I:
Negative preannouncements are high at 73% of total,
consistent with past 3 quarters...
Negative preannouncements for the 3Q earnings season continue to be elevated,
reflecting the macro headwinds from the global economy. Negative
preannouncements persist at 73% of all preannouncements as of 10/10/2012, above
the prior three quarters relatively elevated readings.
Figure 21: Negative and Positive Preannouncements

% of Total Quarterly Preannouncements, as of 10/10/2012 Directors Report
Recession
Positive Preannouncements as % Total
Negative Preannouncements as % Total
N/P Ratio (right axis)
80%
10/10/12
73%
70%
# of Preannouncements
60%
50%
40%
10/10/12
4.09
30%
20%
10/10/12
18%
10%
0%
4/01
7/02
10/03
1/05
4/06
7/07
10/08
1/10
4/11
7/12
Source: J.P. Morgan and Thomson Reuters.
52% of companies have beaten 3Q12 results

Early results show 3Q12 EPS beats at around 52%, which is below recent quarters,
particularly 2Q12. 2Q12 started off stronger with 68% beating through the first few
weeks but by the end of the quarter 2Q12 proved to be in line with past quarters.
15

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 22: % of Companies Beating on Top Line and EPS

% of S&P 500 that has reported, beating on top line and EPS, 3Q12
Fewer top-line beats.

% cos beating
In-line beats
% cos beating (as of early in earnings season)
100%
% cos beating
80%
62%
60% 49%
42%
36%
40%
69%
61%
68%
61%
52%
47%
20%
0%
4Q11
1Q12
2Q12
3Q12
4Q11
1Q12
Revenues
2Q12
3Q12
EPS

3Q12 "% cos beating (as of early in earnings season) is based on 25 companies that have reported earnings as of 10/8/12.
2Q12 "% cos beating (as of early in earnings season) is based on 25 companies that have reported earnings as of 7/11/12.
S&P 500 3Q12 top-line growth expected to be down yoy

with earnings growth of 2% yoy
We continue to see the headwind effects of the Eurozone crisis, China slowdown and
now-weakening U.S. momentum, which are combining to generate weak revenue
growth in 3Q12.
As evidenced in Figure 23, growth has certainly slowed. YoY revenue growth for
the S&P 500 is expected to be down in 3Q12 following downward YoY trends
seen in 2Q12.
However, if we consider the S&P 500 ex-Energy (see Figure 23), YoY revenue
growth is expected to come in flat in 3Q12. While such is even below recent
trends of positive growth seen in S&P 500 ex-Energy since 2010, if we exclude
Energy in our calculations, most of the other sectors look less dim.
Figure 23: YoY % Change in Revenue Growth
S&P500
8.3%
10.9%10.5%
4.3%
16
Revenue YoY % Chg
3Q12E
2Q12
1Q12
4Q11
3Q11
2Q11
1Q11
0.0%
4Q10
-3.0%
3Q10
2Q12
1Q12
4Q11
3Q11
2Q11
1Q11
4Q10
3Q10
2Q10
1Q10
5.1% 4.4%
2.1%
-0.4%
Revenue YoY % Chg
7.8% 7.9%
6.3% 6.5% 7.1% 6.3%
2Q10
6.5%
1Q10
8.5% 7.6% 8.2% 8.9%
3Q12E
11.3%
S&P500 Ex-Energy

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Similarly, earnings growth in 3Q12 is expected to be weak, at 2.4% YoY. This is

a decrease from 4.5% just a quarter ago, and down from 17.9% in 3Q11.
However, when we consider earnings growth for the S&P 500 ex-Energy, 3Q12
earnings growth is expected to be 5.9% YoY, which is below YoY growth since
1Q10.
Figure 24: YoY % Change in Earnings Growth
S&P500 Ex-Energy
S&P500
53.1%
EPS YoY % Chg
3Q12E
8.1% 10.3% 9.1% 5.9%
2Q12
13.1%
1Q12
8.3%
4Q11
1Q11
4Q10
3Q10
2Q10
1Q10
3Q12E
4.5% 2.4%
2Q12
1Q12
4Q11
3Q11
2Q11
1Q11
4Q10
3Q10
2Q10
1Q10
19.2%
17.9%
12.4%
8.9% 8.9%
3Q11
29.1%32.7%33.5%
16.5%
34.0%32.9%34.2%
2Q11
53.6%
EPS YoY % Chg
17
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
US Macro Indicators
The macro environment remains relatively troubling as 4 of the 7 indicators detailed
in Figure 25 worsened in 3Q12 as compared to 2Q12. In particular, improvements
were seen in ISM Non-Manufacturing New Orders as well as ABI Residential
Billing.
Figure 25: MACRO Trends Indicate Mixed Momentum in 3Q12
Trend in macro indicators
3Q11
4Q11
1Q12
2Q12
3Q12
3Q112Q12 avg
Macro
Index of Leading Economic Indicators (yoy %)
trend
5.0
worse
3.9
worse
2.7
w orse
1.6
worse
1.8
better
3.3
worse
Index of Coincident Indicators (yoy %)

trend
2.2
stable
2.7
stable
2.4
w orse
2.9
worse
2.5
worse
2.5
stable
ISM Manufacturing (New Orders minus Inventory)

trend
-0.3
worse
8.2
better
6.0
w orse
9.2
better
-1.7
worse
5.8
worse
ISM Non-Manufacturing New Orders

trend
China Industrial Production (yoy %)
trend
ABI - Commercial Billing
trend
ABI - Residential Billing
trend
54.4
53.8
59.8
54.1
55.2
55.5
stable
stable
better
worse
better
stable
14.1
13.1
11.9
10.2
9.3
12.3
stable
slowing
w orse
worse
worse
better
50.0
53.7
54.4
50.5
46.6
52.2
stable
better
stable
worse
worse
worse
46.9
53.5
52.6
49.5
51.4
50.6
worse
better
stable
worse
better
better
Source: J.P. Morgan estimates and J.P. Morgan Economics.
Micro indicators
Figure 26 lays out several key micro indicators and their respective performance in
each quarter versus recent trend.
Following relative declines in 2Q12, micro indicators were once again relatively
weak in 3Q12. Of the micro indicators below, US Machine Tool Orders, the Case
Freight Index, Corrugated box shipments, Air Freight Traffic, Auto Sales and
Credit card charge volumes all slowed or worsened in 3Q12.
On the other hand, Housing Permits and Income Tax Withholdings improved in
3Q12 relative to 2Q12, highlighting the strengthening in the microeconomic
environment, particularly as housing continues to recover from historic lows (see
US Housing Food Chain IV dated 8/29/12).
Note the recent upwards curl of the YoY change in income tax withholdings
(trailing 120-day average). As seen in Figure 27 there has been a recent uptick in
income tax withholdings implying that average salaries and wages are higher
overall.
18
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 26: MICRO Stability in Trends

Trend in micro indicators
3Q11
4Q11
1Q12
2Q12
3Q12
3Q112Q12 avg
Micro
US Machine Tool Orders (yoy %)
trend
Cass Freight Index (yoy %)
trend
Corrugated box shipments (yoy %)
trend
Air Freight Traffic (yoy %)
80.1
24.8
14.7
5.8
-7.1
31.4
worse
worse
w orse
worse
worse
worse
7.6
0.0
1.9
0.4
-1.0
2.5
slowing
slowing
better
slowing
slowing
slowing
0.2
0.0
0.4
0.1
-2.4
0.2
better
stable
better
better
slowing
better
-2.4
-3.1
-1.0
-1.9
-2.3
-2.1
trend
worse
worse
better
worse
worse
worse
Housing Permits
trend
629
better
692
better
720
better
756
better
806
better
699
better
Consumer
Income Tax Withholdings (yoy %)
trend
Auto Sales (SAAR, millions )
trend
Credit card charge volumes (yoy %)
trend
1.7
1.0
1.0
2.0
4.0
1.4
worse
worse
stable
better
better
better
12.6
13.4
14.1
14.1
14.5
13.6
better
better
better
slowing
slowing
better
8.8
8.5
10.5
7.9
7.5*
8.9
stable
stable
better
worse
worse
stable
Source: J.P. Morgan estimates and J.P. Morgan Economics. Note: *Reflect estimates.
Figure 27: Income Tax Withholdings (trailing 120-day avg.)

yoy % change
yoy % chg of trailing 120day avg
20%
15%
10%
5%
0%
1/1/2007
1/1/2008
1/1/2009
1/1/2010
1/1/2011
1/1/2012
-5%
-10%
-15%
Source: J.P. Morgan estimates and J.P. Morgan Economics.
19

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Despite appearances, 3Q12 is expected to be a decent

quarter for Cyclicals
We have compiled bottom-up revenue and net income forecasts in Figure 28 below.
Notably, despite the numerous headwinds, there are several industries that still
should show solid growth.
Many key Industrials and Technology groups like Construction, Electrical
Equipment, IT Services and Computer & Peripherals are expected to post
solid y/y gains on fairly strong sales growth. Industrials as a sector is expected
to grow earnings by 0.8% YoY and top line by 2.4% YoY.
There are some signs of weakness is several sub-industries, mostly within the
Materials and Discretionary sectors. Particularly large drags are expected in
Metals & Mining, Paper & Forest Products, Automobiles and Diversified
Consumer Services.
Figure 28: 2Q12 and 3Q12E YoY Revenue and Earnings Growth Cyclicals
2Q12 and 3Q12E YoY Revenue and Earnings Growth Cyclicals
Revenue
2Q12 vs.
Net Income
3Q12E
2Q11 vs. 3Q11

YoY % YoY %
2Q12 vs.
Revenue
3Q12E
chg
chg
chg
chg
Cyclicals
5.5%
4.5%
7.8%
2.1%
Materials
Chemicals
12.3%
30.1%
11.1%
29.6%
-0.9%
30.2%
-7.9%
21.9%
Construction Materials
-1.1%
3.5%
-288.7%
Containers & Packaging

Metals & Mining
7.7%
-13.8%
8.9%
-14.7%
1.6%
-47.9%
-11.1%
-43.9%
Paper & Forest Products
3.6%
2.6%
-34.8%
-22.9%
Industrials
4.9%
2.4%
12.3%
0.8%
Aerospace & Defense

Building Products
0.5%
-0.9%
0.4%
0.9%
2.6%
100.0%
-14.2%
53.3%
Construction & Engineering
16.6%
16.8%
12.7%
22.4%
Electrical Equipment
Industrial Conglomerates
20.4%
3.3%
18.7%
3.2%
30.6%
9.0%
21.7%
10.9%
8.9%
2.8%
22.5%
10.0%
Machinery
Trading Companies & Distributors
12.9%
9.9%
13.5%
15.2%
Commercial Services & Supplies

Professional Services
4.5%
5.8%
-8.0%
4.2%
13.0%
19.5%
-18.9%
11.8%
Air Freight & Logistics
2.8%
2.4%
7.7%
-1.3%
11.6%
3.4%
1.3%
1.2%
125.6%
14.0%
6.2%
-0.1%
Airlines
Road & Rail
2Q12 vs.
2Q11 vs. 3Q11

YoY % YoY %
20
3Q12E
2Q11 vs. 3Q11

YoY % YoY %
2Q12 vs.
3Q12E
2Q11 vs. 3Q11

YoY % YoY %
chg
chg
chg
chg
Discretionary
Auto Components
0.2%
10.0%
1.3%
10.1%
3.8%
39.0%
4.8%
17.0%
Automobiles
-5.6%
-0.2%
-48.7%
-38.2%
Household Durables
Leisure Equipment & Products
1.8%
-4.8%
7.4%
2.5%
302.9%
9.7%
84.5%
5.7%
Tex tiles Apparel & Luxury Goods
18.0%
13.3%
5.8%
4.0%
Hotels Restaurants & Leisure

Div ersified Consumer Serv ices
5.4%
-40.1%
4.1%
-35.7%
1.5%
4.8%
4.1%
6.0%
3.5%
11.1%
Media
Distributors
1.2%
3.7%
-77.5% -159.5%
11.2%
14.9%
Internet & Catalog Retail
27.0%
24.9%
-13.6%
-4.6%
Multiline Retail
Specialty Retail
-17.7%
2.6%
-15.3%
-0.4%
8.2%
11.7%
64.9%
2.3%
Technology
10.3%
8.8%
9.2%
3.2%
Internet Software & Services

IT Services
27.4%
16.1%
37.9%
14.9%
18.0%
19.4%
9.0%
17.6%
3.0%
-2.7%
1.4%
-9.1%
4.9%
11.0%
3.3%
10.7%
12.9%
19.7%
4.0%
18.5%
Software
Communications Equipment
Computers & Peripherals
Electronic Equipment Instruments & Components

39.3%
39.2%
Office Electronics
-1.3%
Semiconductors & Semiconductor Equipment
0.2%
Net Income
-1.3%
-6.4%
5.6%
0.8%
-8.4%
-14.8%
-8.7%
-25.7%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Energy is expected to see large drags in 3Q12. The YoY growth in earnings for
3Q12 is expected to be -15.1%. Top line is also expected to be -2.0% YoY. This
makes sense considering how far oil prices have declined.
Figure 29: 2Q12 and 3Q12E YoY Revenue and Earnings Growth Near-Cyclicals
2Q12 and 3Q12E YoY Revenue and Earnings Growth Near-Cyclicals
Revenue
Net Income
2Q12 vs. 3Q12E

2Q11 vs. 3Q11
YoY % YoY %
2Q12 vs. 3Q12E

2Q11 vs. 3Q11
YoY % YoY %
Near-Cyclicals
Energy
Energy Equipment & Services
Oil Gas & Consumable Fuels
chg
3.9%
4.6%
23.0%
3.1%
chg
-5.2%
-2.0%
18.6%
-3.9%
chg
15.1%
-13.8%
24.7%
-18.1%
chg
-3.4%
-15.1%
6.0%
-17.9%
Financials
Commercial Banks
Thrifts & Mortgage Finance
3.0%
3.5%
-6.1%
-9.4%
9.3%
-6.6%
55.4%
13.3%
-6.9%
7.6%
27.5%
-3.3%
Diversified Financial Services

Consumer Finance
Capital Markets
Insurance
5.9%
10.0%
-4.5%
1.6%
-11.4%
13.8%
7.7%
-22.4%
3006.9%
-28.4%
29.9%
34.1%
-41.5%
8.7%
13.3%
83.0%
Real Estate Investment Trusts (REITs) 16.7%

Real Estate Management & Development12.6%
13.3%
9.8%
-20.8%
31.4%
25.0%
37.2%
21
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 30: 2Q12 and 3Q12E YoY Revenue and Earnings Growth Defensives
2Q12 and 3Q12E YoY Revenue and Earnings Growth Defensives
Net Income
2Q12 vs. 3Q12E

2Q11 vs. 3Q11
YoY % YoY %
chg
chg
2Q12 vs. 3Q12E

2Q11 vs. 3Q11
YoY % YoY %
chg
chg
Defensives
Staples
Food & Staples Retailing
Beverages
Food Products
Tobacco
0.9%
1.2%
0.4%
1.5%
5.9%
2.4%
2.1%
1.6%
2.1%
1.1%
3.5%
0.1%
1.2%
2.0%
4.3%
0.8%
9.5%
1.4%
-2.0%
1.1%
7.3%
-5.1%
11.3%
0.4%
Household Products
Personal Products
-1.6%
-1.5%
-3.6%
-2.5%
-2.1%
-40.8%
-4.3%
-11.0%
HealthCare
Health Care Equipment & Supplies
Health Care Providers & Services
2.5%
18.7%
2.7%
2.0%
17.7%
2.3%
3.2%
19.3%
0.1%
-3.4%
18.6%
-0.4%
Health Care Technology

Biotechnology
Pharmaceuticals
Life Sciences Tools & Services
21.6%
7.9%
-3.5%
4.6%
14.2%
13.4%
-4.4%
1.2%
35.5%
10.3%
-0.9%
9.7%
23.2%
-0.7%
-9.8%
-0.4%
Telecom
3.9%
3.5%
3.7%
-7.7%
Diversified Telecommunication Services 2.7%

Wireless Telecommunication Services 12.5%
2.3%
11.7%
9.3%
9.5%
Utilities
Electric Utilities
3.4%
10.9%
-11.3%
-6.4%
-2.4%
-5.0%
Gas Utilities
-8.5%
14.1%
Multi-Utilities
-8.6%
2.4%
Independent Power Producers & Energy-36.9%
Traders -31.2%
75.3%
1.5%
-67.0%
52.3%
-4.7%
171.2%
22
Revenue
-9.3%
-3.0%

11 October 2012
Appendix II:
3Q12 reporting statistics so far
Twenty-nine companies have reported 3Q12 earnings so far. As shown in Figure 31,
3Q12 EPS beats are around 52%, which is slightly lower compared to the level of
beats seen over the last 4 quarters. However, we are currently seeing stronger topline beats for 3Q12, with revenue beats at 47%.
Figure 31: % of Companies Beating on Top Line and EPS
% of S&P 500 that has reported, beating on top line and EPS, 3Q12 based on 29 company reports
% cos beating
Thomas J Lee, CFA

(1-212) 622-6505
80%
70%
60%
50%
40%
30%
20%
10%
0%
63%
62%
59%
49%
61%
69%
61%
47%
52%
36%
3Q11 4Q11 1Q12 2Q12 3Q12

Revenues
3Q11 4Q11 1Q12 2Q12 3Q12

EPS
Figure 32: 3Q12 Sales Statistics So Far

% Up-/Down-side
3Q12 Sales
% of cos beating estimates
So Far Reported
S&P 500
S&P 500 (ex Fin)
3Q11
0.9%
1.2%
4Q11
0.8%
1.3%
1Q12
1.4%
1.2%
2Q12
-1.4%
-1.3%
# of % Upside/
Cos Downside 3Q11 4Q11 1Q12 2Q12 3Q12
30
-0.2% 59% 49% 62% 36% 47%
28
-0.2% 59% 50% 62% 33% 46%
Cyclicals
0.7%
0.2%
1.2%
-1.7%
22
0.0%
61%
48%
68%
28%
50%
Materials
Industrials
Discretionary
Technology
0.8%
0.4%
1.1%
0.3%
-0.2%
-1.3%
-0.2%
2.4%
0.8%
0.6%
0.8%
2.4%
-3.7%
-1.5%
-1.9%
-1.0%
3
2
10
7
-6.2%
-0.9%
0.5%
-1.0%
50%
62%
66%
61%
53%
33%
50%
58%
60%
61%
74%
72%
13%
23%
21%
46%
33%
0%
70%
43%
Defensives
0.9%
-0.8%
-0.6%
-1.5%
-0.8%
53%
50%
52%
36%
33%
1.8% -0.1% 0.8%

1.4% 0.6% 1.3%
-0.4% 1.3% -0.1%
-3.7% -10.4% -12.9%
-1.2%
-0.2%
-0.3%
-8.8%
6
0
0
0
-0.8%
64%
67%
13%
26%
52%
61%
88%
19%
60%
73%
38%
13%
38%
41%
63%
16%
33%
NA
NA
NA
Staples
Healthcare
Telecom
Utilities
Near-Cyclicals
Energy
Financials
1.2%
3.7%
4.2%
-1.0%
1.2%
61%
48%
62%
52%
50%
2.9%
-1.5%
9.0%
-3.9%
5.2%
2.7%
0.5%
-2.9%
0
2
1.2%
64%
59%
62%
40%
63%
61%
50%
53%
NA
50%
Source: J.P. Morgan estimates and FactSet. Note: % beat for prior quarters is weighted. % beat for current quarter is median % beat.
23
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 33: 3Q12 EPS Statistics So Far
S&P 500
S&P 500 (ex Fin)
% Up-/Down-side
3Q12 EPS
Upside/Downside.
So Far Reported
3Q11
3%
3%
4Q11
0%
2%
1Q12
5%
4%
2Q12
1%
1%
% of cos beating estimates
# of % Upside/
Cos Downside 3Q11 4Q11 1Q12 2Q12 3Q12
29
1.9% 63% 61% 69% 61% 52%
27
1.9% 66% 63% 68% 62% 52%
Cyclicals
2%
6%
8%
2%
21
2.0%
66%
65%
74%
62%
43%
Materials
Industrials
-4%
4%
-12%
8%
7%
6%
-5%
4%
3
2
3.4%
-2.6%
38%
73%
43%
72%
69%
74%
52%
66%
33%
50%
Discretionary
Technology
2%
2%
2%
9%
7%
10%
6%
1%
9
7
1.2%
-0.9%
66%
72%
63%
69%
76%
75%
60%
67%
56%
29%
Defensives
3%
1%
2%
4%
2.4%
65%
64%
65%
68%
83%
Staples
1%
0%
3%
1%
5.7%
52%
68%
76%
64%
83%
Healthcare
Telecom
Utilities
4%
6%
5%
2%
-10%
8%
2%
14%
-11%
5%
3%
15%
0
0
0
76%
50%
68%
65%
50%
60%
71%
63%
37%
69%
75%
69%
NA
NA
NA
Near-Cyclicals
2%
-10%
5%
-3%
0.0%
56%
50%
62%
50%
50%
7%
-2%
-10%
-9%
-6%
15%
-7%
1%
0
2
15.6%
66%
51%
48%
52%
40%
74%
40%
55%
NA
50%
Energy
Financials
Source: J.P. Morgan and FactSet. Note: % beat for prior quarters is weighted. % beat for current quarter is median % beat.
24

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 34: 3Q12 Consensus Revenue and Earnings Forecasts for Industries (part 1 of 2)
$ millions
Revenue
3Q11
14,291
Internet Software & Services
12,027
Consumer Finance
14,272
572
87,389
Gas Utilities
3,890
10,012
6,725
Energy Equipment & Services
32,878
2,841
Textiles Apparel & Luxury Goods
11,786
Real Estate Management & Development 1,534
Insurance
127,696
Machinery
56,804
Distributors
3,286
Household Durables
11,227
Independent Power Producers & Energy Traders
7,055
Biotechnology
8,620
1,914
10,302
20,780
Electric Utilities
47,996
Real Estate Investment Trusts (REITs) 9,404
Aerospace & Defense
86,264
Wireless Telecommunication Services 10,052
8,271
Road & Rail
12,524
235,073
Chemicals
49,859
Media
71,543
Capital Markets
31,390
6,542
Commercial Banks
39,714
Multi-Utilities
29,385
Airlines
4,311
27,988
761
Auto Components
18,642
52,107
3,375
Net Income
2Q12
16,090
14,638
15,523
637
92,638
3,215
11,418
7,379
35,707
3,054
11,360
1,601
134,414
59,905
3,338
11,172
6,358
9,670
1,948
10,239
21,766
39,297
10,255
86,912
10,710
8,500
12,671
241,562
54,333
73,336
31,466
6,764
41,872
24,668
4,616
28,810
694
17,587
53,048
1,970
3Q12E
18,026
14,169
16,488
653
99,457
4,414
11,335
7,597
36,858
3,179
12,878
1,676
137,943
61,297
3,545
12,077
7,543
9,165
2,031
10,922
22,021
50,852
9,955
91,226
10,607
8,717
13,188
247,261
52,416
75,189
32,969
6,863
41,571
30,695
4,500
29,209
793
19,402
54,201
3,500
3Q12E
vs 3Q11
% chg
26.1%
17.8%
15.5%
14.2%
13.8%
13.5%
13.2%
13.0%
12.1%
11.9%
9.3%
9.2%
8.0%
7.9%
7.9%
7.6%
6.9%
6.3%
6.1%
6.0%
6.0%
6.0%
5.9%
5.8%
5.5%
5.4%
5.3%
5.2%
5.1%
5.1%
5.0%
4.9%
4.7%
4.5%
4.4%
4.4%
4.3%
4.1%
4.0%
3.7%
3Q11
856
4,233
2,863
83
11,640
62
282
416
4,222
276
1,414
78
6,569
4,886
152
337
(16)
2,939
194
1,207
4,321
6,588
1,182
6,672
(187)
523
1,978
6,045
4,139
6,632
4,926
1,031
7,671
3,335
122
1,727
(17)
856
5,431
472
2Q12
543
4,554
2,192
103
13,682
97
325
374
4,129
300
1,117
88
12,169
5,747
169
1,665
317
3,184
214
1,265
4,611
3,965
1,345
6,574
(1,108)
285
2,089
6,864
6,147
7,928
4,613
1,066
8,455
2,210
273
1,949
(17)
753
6,252
140
3Q12E
757
4,630
3,113
103
13,221
92
345
370
4,048
318
1,396
107
12,005
5,302
174
622
330
2,825
217
1,277
4,486
6,256
1,428
5,728
(1,174)
404
1,980
6,485
3,623
7,392
5,046
1,027
9,786
3,179
134
1,705
22
830
5,711
499
3Q12E vs
3Q11 %
chg
-11.5%
9.4%
8.7%
23.1%
13.6%
47.4%
22.4%
-11.1%
-4.1%
15.4%
-1.3%
37.2%
82.8%
8.5%
14.9%
84.5%
-2162.0%
-3.9%
11.8%
5.8%
3.8%
-5.0%
20.8%
-14.2%
526.8%
-22.8%
0.1%
7.3%
-12.5%
11.5%
2.4%
-0.4%
27.6%
-4.7%
10.0%
-1.3%
-226.6%
-3.1%
5.1%
5.7%
Net
Income %
minus
Rev %
-37.7%
-8.4%
-6.8%
8.8%
-0.2%
33.9%
9.2%
-24.0%
-16.2%
3.5%
-10.5%
28.0%
74.7%
0.6%
7.0%
76.9%
-2168.9%
-10.2%
5.7%
-0.2%
-2.1%
-11.0%
14.9%
-19.9%
521.3%
-28.2%
-5.2%
2.1%
-17.6%
6.4%
-2.6%
-5.3%
22.9%
-9.1%
5.6%
-5.6%
-230.9%
-7.2%
1.1%
2.0%
25

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 35: 3Q12 Consensus Revenue and Earnings Forecasts for Industries (part 2 of 2)
$ millions
Revenue
Net Income
3Q12E
vs 3Q11
3Q12E % chg
3Q12E vs
3Q11 %
3Q12E
chg
Net
Income %
minus
Rev %
3Q11
2Q12
3Q11
2Q12
41
42
43
44
Building Products
2,006
28,360
Diversified Telecommunication Services 66,301
181,237
2,004
27,001
67,536
184,660
2,074
29,249
68,136
186,214
3.4%
3.1%
2.8%
2.7%
27
4,242
5,559
5,519
34
3,008
6,278
5,501
41
4,332
6,105
5,473
53.3%
2.1%
9.8%
-0.8%
50.0%
-1.0%
7.1%
-3.6%
45
46
47
48
IT Serv ices
53,513
Food Products
71,164
32,199
Software
33,828
54,221
70,557
31,250
36,823
54,949
72,825
32,903
34,512
2.7%
2.3%
2.2%
2.0%
7,699
3,830
6,373
9,495
8,230
3,842
5,266
11,098
8,261
3,401
4,667
8,753
7.3%
-11.2%
-26.8%
-7.8%
4.6%
-13.5%
-29.0%
-9.8%
49
50
51
52
Specialty Retail
Automobiles
Beverages
78,485
32,333
22,820
36,732
81,761
32,897
23,234
36,479
80,047
32,940
23,221
37,222
2.0%
1.9%
1.8%
1.3%
3,800
2,045
3,874
5,493
4,464
1,450
4,059
5,531
3,920
1,263
3,917
5,108
3.1%
-38.2%
1.1%
-7.0%
1.2%
-40.1%
-0.7%
-8.3%
53
54
55
56
Multiline Retail
Tobacco
Office Electronics
Personal Products
47,434
16,003
5,583
5,239
47,883
16,081
5,541
4,846
47,923
16,126
5,606
5,239
1.0%
0.8%
0.4%
0.0%
804
4,234
374
450
1,473
4,244
360
158
923
4,250
341
401
14.8%
0.4%
-8.7%
-11.0%
13.8%
-0.4%
-9.1%
-11.0%
57
58
59
60

13,531
12,606
Household Products
32,987
Metals & Mining
28,449
13,101
11,916
31,289
26,053
13,452
12,429
32,455
27,482
-0.6%
-1.4%
-1.6%
-3.4%
984
1,575
4,293
2,848
894
1,197
3,688
1,701
886
1,203
4,108
1,552
-10.0%
-23.6%
-4.3%
-45.5%
-9.4%
-22.2%
-2.7%
-42.1%
61 Pharmaceuticals
62 Thrifts & Mortgage Finance
63 Diversified Consumer Services
73,387
569
1,770
70,904
536
1,733
70,697
538
1,626
-3.7%
-5.6%
-8.1%
16,453
137
82
16,266
137
68
14,870
133
(28)
-9.6%
-3.3%
-134.5%
-6.0%
2.3%
-126.4%
64 Diversified Financial Services

65 Oil Gas & Consumable Fuels
76,776
365,938
68,663
314,266
68,075
296,748
-11.3%
-18.9%
14,196
30,876
10,465
23,940
8,356
22,907
-41.1%
-25.8%
-29.8%
-6.9%
26
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Appendix III: Summary Tables

Figure 36 through Figure 41 show various metrics for the 3Q12 reporting season at industry, sector, and index levels for the
S&P 500.
The tables show the number of companies that belong to each industry and sector, as well as the market capitalization subtotals
and the percentages of companies and market caps that have already reported. In these tables, we also provide information by
industry and sector on the EPS growth achieved by those companies that have reported, the differential between actual and
estimated revenue and EPS growth, and the expected growth for those companies that have yet to report. Moreover, these tables
provide the percentage of companies that have beaten consensus estimates as well as the percentage that fell below expectations.
27
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 36: S&P 500 Capitalization & EPS Statistics for 3Q12E
S&P 500 Basic Statistics
# of
Cos
Mkt Cap Mkt Cap

($mil)
(% )
3Q12 Reported
P/E
% chg
(LTM) (NTM vs.
(a) LTM) (b)
3Q12 Earnings Analysis
(P/E) /
Growth
(a)/(b)
#
Cos
% of
Cos
% of
Mkt
Cap
EPS Reported
Actual %
EPS % chg less
chg yoy Est. chg
EPS %
chg yoy
-5%
-24%
-22%
-100%
-8%
Neg to Pos
100%
-33%
-12%
-42%
-22%
-21%
-11%
50%
22%
6%
14%
7%
7%
29%
11%
-1%
2%
-8%
15%
-28%
13%
-2%
3%
3%
0%
-7%
GICS Industry
Energy
101010 Energy Equipment & Services

10
12
$245,412
31 $1,196,494
43 $1,441,906
2%
9%
11%
0
0
0
151010 Chemicals
151020 Construction Materials
16
1
$321,286
$5,944
2%
0%
2
0
13%
20%
-52%
-17%
151030 Containers & Packaging

151040 Metals & Mining
151050 Paper & Forest Products
15
4
8
2
31
$15,905
$100,969
$21,230
$465,334
0%
1%
0%
4%
0
1
0
3
13%
10%
9%
16%
-82%
-61%
-6%
201010 Aerospace & Defense

201020 Building Products
11
1
$302,284
$5,114
2%
0%
0
0
201030
201040
201050
201060

Machinery
3
4
3
16
$19,536
$67,668
$339,795
$240,034
0%
1%
3%
2%
0
0
0
0
201070
202010
202020
203010

2
10
3
4
$27,139
$72,988
$13,091
$97,511
0%
1%
0%
1%
0
1
0
1
10%
25%
1
$6,517
4
$103,917
62 $1,295,593
0%
1%
10%
0
0
2
Materials
Materials
Industrials
Industrials
Discretionary
203020 Airlines
203040 Road & Rail
20
251010 Auto Components
251020 Automobiles
252010
252020
252030
253010
Household Durables
253020 Diversified Consumer Services

254010 Media
Estimate**
Up less
% Up % Down down %
Sector
Energy
Upside/ Downside*
3
2
$28,493
$46,905
0%
0%
0
0
7
2
5
11
$37,169
$16,854
$80,989
$244,430
0%
0%
1%
2%
1
0
1
4
14%
20%
36%
16%
42%
30%
309%
-9%
-1%
123%
11%
5%
2
16
$7,692
$416,405
0%
3%
0
0
0%
100%
100%
0%
33%
67%
100%
0%
0%
100%
100%
-100%
50%
0%
-15%
-1%
0%
-5%
-38%
100%
100%
100%
73%
7%
5%
6%
Pos to Neg
12%
50%
100%
0%
100%
100%
0%
0%
Source: FactSet and J.P. Morgan calculations. Note: The estimates may differ slightly from Thomson Financials Director Report's estimates due to methodology differences. Percentages correspond to those companies for which both a IBES Mean Estimate and
Reported EPS figures are available for 3Q12.
28
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 37: S&P 500 Capitalization & EPS Statistics for 3Q12E (continued)
Sector
Discretionary
Staples
GICS Industry
255010 Distributors
255020 Internet & Catalog Retail
255030 Multiline Retail
255040 Specialty Retail
25
301010 Food & Staples Retailing
302010 Beverages
302020
302030
303010
303020
Staples
30
HealthCare
351010
351020
351030
352010
Food Products
Tobacco
Household Products
Personal Products
3Q12 Reported

EPS Reported
Actual %
EPS % chg less
P/E
% chg
(LTM) (NTM vs.
(P/E) /
Growth
% of
% of
Mkt
(a)/(b)
Cos
0
0
Cos
Cap
chg yoy
Est. chg
Upside/ Downside*
Estimate**
# of
Mkt Cap Mkt Cap
Cos
1
5
($mil)
$9,511
$155,374
(% )
0%
1%
(a) LTM) (b)
Up less
EPS %
% Up % Down down %
chg yoy
15%
-13%
8
$105,452
18
$295,272
80 $1,444,546
1%
2%
11%
1
3
10
13%
17%
13%
8%
12%
11%
11%
2%
0%
0%
-2%
5%
0%
33%
70%
0%
67%
20%
0%
-33%
50%
-8%
5%
2%
8
9
$444,604
$338,501
3%
3%
2
1
25%
11%
17%
2%
9%
-20%
1%
19%
50%
100%
50%
0%
0%
100%
9%
-6%
15
4
4
2
$236,513
$259,925
$282,542
$22,237
2%
2%
2%
0%
3
0
0
0
20%
19%
13%
9%
100%
0%
100%
-3%
1%
-4%
-11%
42 $1,584,322
83%
17%
12%
14%
8%
8%
5%
67%
-1%
$228,009
$256,261
$12,881
$206,695
2%
2%
0%
2%
0
0
0
0
2%
11%
23%
-4%
HealthCare
352020 Pharmaceuticals
352030 Life Sciences Tools & Serv ices
35
12
$814,562
5
$53,306
52 $1,571,714
6%
0%
12%
0
0
0
-10%
0%
-4%
Financials
401010 Commercial Banks
13
$389,393
3%
29%
401020
402010
402020
402030
2
9
4
14
$8,604
$414,336
$127,278
$272,144
0%
3%
1%
2%
0
0
1
0
25%
16%
-3%
14%
100%
-3%
-48%
12%
2%
$452,216
$274,864
$6,056
3%
2%
0%
0
1
0
6%
4%
Neg
87%
19%
39%
81 $1,944,890
Health Care Equipment & Supplies 14

Health Care Providers & Services 15
1
Biotechnology
5

Consumer Finance
Capital Markets
403010 Insurance
22
404020 Real Estate Investment Trusts (REITs)16
404030 Real Estate Management & Development
1
Financials
40
Technology
451010 Internet Software & Services

451020 IT Services
100%
0%
0%
100%
-100%
50%
50%
0%
4%
11%
50%
9%
15%
2%
2%
-4%
12%
$288,228
2%
14
$522,546
4%
14%
11%
-4%
0%
50%
0%
29

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 38: S&P 500 Capitalization & EPS Statistics for 3Q12E (continued)
3Q12 Reported

EPS Reported
Sector
Technology
GICS
451030
452010
452020
452030
452040
453010
45
# of
Mkt Cap Mkt Cap
Industry
Cos
($mil)
(% )
Software
12
$510,960
4%
7
$237,763
2%
8
$740,176
6%
6
$51,719
0%
Office Electronics
1
$9,242
0%
17
$251,084
2%
70 $2,611,719
20%
Telecom
501010 Diversified Telecommunication Services5

501020 Wireless Telecommunication Services 3
$378,883
$38,514
Telecom
50
Utilities
551010 Electric Utilities

551020 Gas Utilities
13
2
P/E
% chg
(LTM) (NTM v s.
(a) LTM) (b)
(P/E) /
Growth
(a)/(b)
#
Cos
3
0
0
1
0
1
7
% of
Cos
25%
17%
6%
10%
% of
Mkt
Cap
34%
7%
2%
9%
Upside/ Downside*
Actual %
EPS % chg less
chg yoy Est. chg
6%
0%
-16%
-6%
Neg
0%
-1%
Estimate**
Up less
% Up % Down down %
0%
33%
-33%
0%
100%
-100%
0%
100%
-100%
14%
43%
-29%
EPS %
chg yoy
-15%
3%
14%
-25%
-8%
-24%
0%
3%
0%
0
0
7%
Neg
$417,398
3%
-11%
$267,045
$14,652
2%
0%
0
0
-6%
54%
551030 Multi-Utilities
14
$163,242
551050 Independent Power Producers & Energy
2 Traders
$13,214
55
31
$458,152
1%
0%
3%
0
0
0
-6%
14%
-5%
Total
500 $13,235,574
100%
30
6%
5%
-2%
2%
53%
33%
20%
-4%
Total ex-Financials
419 $11,290,684
85%
28
7%
6%
-2%
2%
54%
32%
21%
-6%
Total ex-Energy
457 $11,793,669
89%
30
7%
6%
-2%
2%
53%
33%
20%
-1%
Utilities
30

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 39: S&P 500 Top-Line and Net-Income Statistics for 3Q12E
Net Income
Sales
Quarterly Results
Sector
Energy
Energy
Materials
Materials
Industrials
Industrials
Discretionary
GICS Industry
101010 Energy Equipment & Services
10
Net
Income
Cont to Growth
# Cos
0
0
0
% chg
yoy
% of
ending
Quarterly Results
Net
NI /
Income Total NI
% of
growth
Sales
Cont to Growth
# Cos
0
0
0
% chg
yoy
% of
ending
Sales
Sales /
Total
Sales
% of
growth
151010
151020
151030
151040
151050
15
Chemicals
Metals & Mining
$194
$32
$226
2
0
0
1
0
3
-52%
-82%
-61%
2%
0%
2%
-$213
-$143
-$355
-92%
-61%
-153%
-2%
-1%
-3%
$4,615
$4,615
2
0
0
0
0
2
-13%
-13%
5%
5%
-$715
-$715
-162%
-162%
-1%
-1%
201010
201020
201030
201040
201050
201060
201070
202010
202020
203010
203020
203040
20
Aerospace & Defense

Building Products
Machinery
Airlines
Road & Rail
$76
$458
$534
0
0
0
0
0
0
0
1
0
1
0
0
2
11%
-1%
0%
1%
4%
5%
$8
-$6
$1
3%
-3%
1%
0%
0%
0%
$1,051
$10,792
$11,843
0
0
0
0
0
0
0
1
0
1
0
0
2
3%
3%
3%
1%
11%
12%
$34
$271
$305
8%
61%
69%
0%
0%
0%
251010
251020
252010
252020
252030
253010
253020
254010
Auto Components
Automobiles
Household Durables
Diversified Consumer Services
Media
$88
$586
$1,922
0
0
1
0
1
4
0
0
309%
-9%
-1%
1%
6%
19%
$66
-$59
-$23
29%
-25%
-10%
1%
-1%
0%
$1,100
$6,669
$9,448
0
0
1
0
1
3
0
0
34%
10%
-4%
1%
7%
10%
$280
$588
-$425
63%
133%
-96%
0%
1%
0%
Source: FactSet and J.P. Morgan calculations. Note: The estimates may differ slightly from Thomson Financial Director Report's estimates due to methodology differences. Percentages correspond to those companies for which both a IBES Mean Estimate and
31

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 40: S&P 500 Top-Line and Net-Income Statistics for 3Q12E (continued)
Net Income
Sales
Quarterly Results
Sector
Discretionary
Staples
Staples
HealthCare
HealthCare
Financials
Financials
Technology
Net
Income
$88
$660
$3,343
Cont to Growth
Quarterly Results
# Cos
0
0
1
3
10
% chg
yoy
11%
2%
0%
% of
ending
1%
6%
33%
Net
NI /
Income Total NI
$8
4%
$16
7%
$8
4%
$1,085
$131
$727
$1,943
2
1
3
0
0
0
6
9%
-20%
13%
8%
11%
1%
7%
19%
$87
-$33
$86
$139
% of
growth
0%
0%
0%
Sales
$2,364
$8,190
$27,771
37%
-14%
37%
60%
1%
0%
1%
1%
Cont to Growth
Sales
$230
$534
$1,206
Sales /
Total
Sales
52%
121%
273%
% of
growth
0%
1%
1%
18%
1%
9%
27%
-$894
$8
$467
-$418
-202%
2%
106%
-95%
-1%
0%
0%
0%
# Cos
0
0
1
3
9
% chg
yoy
11%
7%
5%
% of
ending
2%
8%
29%
$17,073
$699
$8,341
$26,112
1
1
3
0
0
0
5
-5%
1%
6%
-2%
GICS
255010
255020
255030
255040
25
Industry
Distributors
Multiline Retail
Specialty Retail
301010
302010
302020
302030
303010
303020
30

Beverages
Food Products
Tobacco
Household Products
Personal Products
351010
351020
351030
352010
352020
352030
35

Biotechnology
Pharmaceuticals
0
0
0
0
0
0
0
0
0
0
0
0
0
0
401010
401020
402010
402020
402030
403010
404020
404030
40
Commercial Banks
Consumer Finance
$622
Capital Markets
Insurance
Real Estate Investment Trusts (REITs) -$37

Real Estate Management & Development
$585
0
0
0
1
0
0
1
0
2
-3%
Neg
-4%
6%
0%
6%
-$21
-$1
-$23
-9%
-1%
-10%
0%
0%
0%
$2,289
$2,289
0
0
0
1
0
0
0
0
1
6%
6%
2%
2%
$138
$138
31%
31%
0%
0%
0
2
-4%
8%
-$36
-16%
0%
$7,866
0
2
2%
8%
$129
29%
0%
451010 Internet Software & Services

451020 IT Services
$784
32
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Figure 41: S&P 500 Top-Line and Net-Income Statistics for 3Q12E (continued)
Net Income
Sales
Quarterly Results
Sector
T echnology
T elecom
T elecom
Utilities
Utilities
T otal
T otal ex-Financials
T otal ex-Energy
GICS
451030
452010
452020
452030
452040
453010
45
Cont to Growth
Net
Industry
Income
# Cos
Software
$2,962
3
0
0
$114
1
Office Electronics
0
-$243
1
$3,618
7
% chg
yoy
6%
-16%
Neg
0%
% of
ending
29%
1%
-2%
35%
Quarterly Results
Net
NI /
Income Total NI
$159
69%
-$22
-10%
-$104
-45%
-$3
-1%
% of
growth
2%
0%
-1%
0%
Sales
$9,584
$4,338
$1,963
$23,752
Cont to Growth
# Cos
3
0
0
1
0
1
7
% chg
y oy
-1%
1%
-8%
0%
% of
ending
10%
5%
2%
25%
Sales
-$84
$58
-$177
-$74
Sales /
Total
Sales
-19%
13%
-40%
-17%
% of
growth
0%
0%
0%
0%
501010 Diversified Telecommunication Services

501020 Wireless Telecommunication Services
50
0
0
0
0
0
0
551010
551020
551030
551050
55
0
0
0
0
0
0
0
0
0
0
$10,248
30
-2%
100%
-$232
-100%
-2%
$96,382
26
0%
100%
$442
100%
0%
$9,663
28
-2%
94%
-$209
-90%
-2%
$94,093
25
0%
98%
$304
69%
0%
$10,248
30
-2%
100%
-$232
-100%
-2%
$96,382
26
0%
100%
$442
100%
0%
Electric Utilities
Gas Utilities
Multi-Utilities
Independent Power Producers & Energy

Traders
33
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
Appendix IV: Company Statistics

This section of the report provides key metrics for each company belonging to the S&P 500. The S&P 500 companies are listed
according to the industry in which they belong. For each company, we provide pricing information and market cap, the
J.P. Morgan rating if the company is covered, the year-to-date change in its consensus EPS estimate for 3Q12, and its history of
upside and downside surprises within the last 18 quarters.
In addition, for those companies that have not reported yet, the tables show their expected reporting date, their IBES consensus
EPS estimate, and the EPS reported in the previous years quarter. Similarly, for those companies that have reported, we show the
actual EPS figures and whether, and by how much, they beat expectations.
34

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 42: S&P 500 Company Statistics

Company Stats
Industry
Ticker
Energy Equipment & Services BHI
CAM
DO
ESV
FTI
HAL
HP
NBR
NOV
NE
RDC
SLB
Oil Gas & Consumable Fuels APC
APA
COG
CHK
CVX
COP
CNX
DNR
DVN
EOG
EQT
XOM
HES
KMI
MRO
MPC
MUR
NFX
Company Name
Baker Hughes Inc.
Cameron International Corp.
Diamond Offshore Drilling Inc.
Ensco PLC Cl A
FMC Technologies Inc.
Halliburton Co.
Helmerich & Payne Inc.
Nabors Industries Ltd.
National Oilwell Varco Inc.
Noble Corp.
Rowan Companies PLC
Schlumberger Ltd.
Anadarko Petroleum Corp.
Apache Corp.
Cabot Oil & Gas Corp.
Chesapeake Energy Corp.
Chevron Corp.
ConocoPhillips
Consol Energy Inc.
Denbury Resources Inc.
Devon Energy Corp.
EOG Resources Inc.
EQT Corp.
Exxon Mobil Corp.
Hess Corp.
Kinder Morgan Inc.
Marathon Oil Corp.
Marathon Petroleum Corp.
Murphy Oil Corp.
Newfield Exploration Co.
Reporting JPM
Date Rating
10/19/2012
N
10/31/2012 OW
10/18/2012
N
11/1/2012 OW
10/23/2012 OW
10/17/2012 OW
11/15/2012
10/23/2012
10/25/2012 OW
10/17/2012 OW
10/31/2012 UW
10/19/2012 OW
10/29/2012
N
11/1/2012 OW
10/25/2012 OW
11/1/2012 UW
11/2/2012
N
10/25/2012 OW
10/29/2012 OW
11/2/2012 OW
11/7/2012 OW
11/5/2012 OW
10/25/2012 OW
11/1/2012
N
10/31/2012
N
10/22/2012 OW
11/6/2012
N
11/1/2012
10/31/2012
N
10/23/2012 OW
Mkt. Cap.
(mm)
$19,363
$13,193
$9,083
$12,651
$10,310
$30,922
$5,037
$4,135
$33,385
$9,005
$4,002
$94,325
$34,123
$33,437
$9,233
$12,935
$220,643
$69,521
$7,478
$6,279
$24,464
$29,568
$8,929
$420,189
$17,972
$19,933
$20,853
$18,708
$11,094
$4,448
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Price Performance
Current 52-Week 52-Week

Price
High
Low
$44.16
$61.90
$37.08
$53.57
$60.00
$38.38
$65.33
$73.50
$52.98
$54.69
$61.48
$41.63
$43.25
$55.19
$36.89
$33.50
$40.43
$26.28
$47.66
$68.60
$38.71
$14.24
$22.73
$12.40
$78.29
$89.95
$59.07
$35.65
$41.71
$28.73
$32.22
$39.40
$28.62
$71.08
$80.78
$59.12
$68.29
$88.70
$56.42
$85.47 $112.09
$77.93
$43.97
$47.25
$28.84
$19.44
$29.87
$13.32
$112.45 $118.53
$92.29
$57.24
$59.68
$49.89
$32.85
$46.90
$26.41
$16.05
$21.37
$11.95
$60.48
$76.34
$54.01
$109.50 $119.97
$76.74
$59.69
$73.10
$43.69
$91.03
$93.36
$73.90
$52.61
$67.86
$39.67
$35.16
$40.25
$26.40
$29.56
$35.49
$22.99
$55.30
$60.04
$30.24
$57.11
$65.60
$43.29
$32.95
$47.40
$25.01
3Q12 EPS Analysis
YTD %
Change
-9%
9%
18%
17%
-17%
-3%
-18%
-18%
15%
18%
6%
4%
-11%
-6%
16%
-13%
6%
-21%
-10%
6%
-2%
11%
9%
7%
-7%
9%
1%
66%
2%
-13%
3Q11
EPS (a)
$1.18
$0.78
$1.85
$0.87
$0.50
$0.94
$1.09
$0.44
$1.26
$0.49
$0.25
$0.98
$0.66
$2.95
$0.17
$0.72
$3.67
$2.52
$0.72
$0.37
$1.40
$0.83
$0.45
$2.13
$1.11
$0.21
$0.91
$3.16
$1.73
$1.04
Actual EPS
3Q12
3Q12 Change Rep. vs
EPS Est. Actual in EPS Est. (c)(b) EPS (c ) (c)/(a)
(b)
$0.84
$0.88
$1.01
$1.30
$0.57
$0.68
$1.24
$0.37
$1.51
$0.51
$0.48
$1.07
$0.73
$2.21
$0.13
$0.09
$2.96
$1.17
$0.36
$0.32
$0.69
$1.02
$0.30
$1.94
$1.21
$0.26
$0.64
$3.05
$1.18
$0.49
Outlook
Results (Last 18 Qs)
YTD %
Change in
NTM
EPS Est
-28%
15%
8%
14%
11%
-20%
-8%
-24%
14%
5%
-9%
0%
18%
-16%
-35%
-52%
-3%
-32%
-58%
-5%
-36%
16%
-20%
-3%
-6%
-1%
-9%
50%
0%
-35%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
53%
47%
71%
12%
71%
29%
47%
47%
53%
35%
53%
24%
82%
18%
47%
41%
94%
0%
35%
65%
41%
59%
41%
53%
59%
41%
59%
41%
53%
35%
65%
35%
65%
35%
65%
35%
41%
53%
59%
41%
53%
47%
53%
41%
59%
41%
53%
47%
53%
47%
20%
80%
35%
59%
75%
25%
65%
29%
41%
59%
Source: FactSet and J.P. Morgan calculations. The estimated EPS are one month prior to the close of the quarter.
35

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
Figure 43: S&P 500 Company Statistics (continued)

Company Stats
Industry
Chemicals
Ticker
NBL
OXY
BTU
PSX
PXD
QEP
RRC
SWN
SE
TSO
VLO
WMB
WPX
APD
ARG
CF
DOW
DD
EMN
ECL
FMC
IFF
LYB
MON
MOS
PPG
PX
SHW
SIAL
VMC
Reporting JPM
Company Name
Date Rating
Noble Energy Inc.
10/25/2012 OW
Occidental Petroleum Corp.
10/25/2012 OW
Peabody Energy Corp.
10/22/2012 OW
Phillips 66
10/31/2012 OW
Pioneer Natural Resources Co. 10/31/2012 OW
QEP Resources Inc.
10/30/2012
N
Range Resources Corp.
10/24/2012 OW
Southwestern Energy Co.
10/22/2012 OW
Spectra Energy Corp.
11/1/2012
Tesoro Corp.
10/31/2012 OW
Valero Energy Corp.
10/30/2012
N
Williams Companies Inc
10/30/2012 OW
WPX Energy Inc.
11/1/2012
N
Air Products & Chemicals Inc.
10/19/2012
N
Airgas Inc.
10/23/2012
CF Industries Holdings Inc.
11/5/2012 OW
Dow Chemical Co.
10/25/2012
N
E.I. DuPont de Nemours & Co. 10/23/2012 OW
Eastman Chemical Co.
10/25/2012 OW
Ecolab Inc.
10/30/2012
N
FMC Corp.
10/29/2012
International Flavors & Fragrances Inc.
11/6/2012
N
Ly ondellBasell Industries N.V. Cl A10/26/2012 OW
Monsanto Co.
10/3/2012 OW
Mosaic Co.
10/2/2012 OW
PPG Industries Inc.
10/18/2012 OW
Praxair Inc.
10/24/2012
N
Sherwin-Williams Co.
10/25/2012
N
Sigma-Aldrich Corp.
10/23/2012
N
Vulcan Materials Co.
10/31/2012 NR
Mkt. Cap.
(mm)
$16,735
$66,594
$6,448
$28,306
$12,619
$5,657
$11,416
$12,247
$19,273
$5,410
$16,256
$22,271
$3,457
$17,364
$6,237
$13,395
$33,643
$45,700
$8,493
$18,613
$7,385
$4,925
$29,159
$47,592
$16,166
$17,614
$30,965
$15,439
$8,596
$5,944
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
3/29/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
8/30/13
5/31/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
36
Price Performance
Current 52-Week 52-Week YTD %

Price
High
Low Change
$94.11 $105.46
$76.83
0%
$82.22 $106.68
$76.59
-12%
$24.03
$47.81
$18.78
-27%
$45.15
$48.22
$28.75 #VALUE!
$102.56 $119.19
$67.76
15%
$31.82
$38.44
$24.35
9%
$70.26
$74.93
$52.34
13%
$35.08
$44.36
$25.63
10%
$29.52
$32.27
$25.60
-4%
$38.70
$44.73
$20.77
66%
$29.47
$34.36
$19.12
40%
$35.55
$37.56
$20.88
8%
$17.37
$23.42
$13.22
-4%
$82.02
$92.79
$76.11
-4%
$80.96
$93.05
$66.39
4%
$213.65 $227.99 $128.03
47%
$28.08
$36.08
$24.42
-2%
$49.12
$57.50
$42.53
7%
$55.54
$59.56
$35.08
42%
$63.63
$68.96
$50.79
10%
$53.78
$59.41
$36.19
25%
$60.45
$63.78
$51.20
15%
$50.70
$53.77
$26.10
56%
$89.30
$92.20
$67.09
27%
$54.45
$62.65
$44.43
8%
$115.36 $119.86
$74.96
38%
$103.85 $116.93
$93.46
-3%
$150.43 $156.50
$76.55
69%
$71.18
$74.94
$58.60
14%
$45.94
$49.99
$28.65
17%
3Q12 EPS Analysis
3Q11
EPS (a)
$1.24
$2.18
$0.87
$1.14
$0.47
$0.28
$0.50
$0.38
$2.39
$2.11
$0.40
$1.51
$1.03
$5.16
$0.62
$0.69
$1.19
$0.75
$0.70
$1.00
$1.53
-$0.22
$1.17
$1.96
$1.40
$1.71
$0.96
-$0.13
Outlook
Actual EPS
YTD %
3Q12
3Q12 Change Rep. vs Change in
EPS Est. Actual in EPS Est. (c)NTM
(b) EPS (c ) (c)/(a)
(b)
EPS Est
$1.07
-9%
$1.63
-11%
$0.34
-62%
$2.10
$0.93
9%
$0.34
2%
$0.17
-27%
$0.32
-28%
$0.31
-7%
$2.23
43%
$1.71
20%
$0.27
-23%
$0.00
$1.43
0%
$1.07
16%
$5.71
11%
$0.37
-12%
$0.47
1%
$1.42
32%
$0.86
13%
$0.78
19%
$1.07
4%
$1.41
26%
-$0.43 -$0.44
- -$0.01
22%
$1.16
$1.01
-14%
-$0.15
-12%
$2.20
8%
$1.40
5%
$2.21
36%
$0.94
3%
$0.17
Neg to Pos

% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
71%
29%
59%
41%
59%
35%
100%
0%
65%
29%
50%
38%
41%
53%
35%
53%
53%
41%
59%
41%
47%
53%
41%
53%
100%
0%
53%
29%
59%
24%
59%
41%
59%
41%
82%
18%
82%
18%
29%
29%
82%
12%
53%
24%
86%
14%
56%
28%
33%
67%
71%
29%
65%
24%
88%
12%
76%
12%
18%
82%

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505

Company Stats
Industry
Metals & Mining

Aerospace & Defense
Building Products
Ticker
BLL
BMS
OI
SEE
AA
ATI
CLF
FCX
NEM
NUE
TIE
X
IP
MWV
BA
GD
HON
LLL
LMT
NOC
PCP
RTN
COL
TXT
UTX
MAS
FLR
JEC
PWR
CBE
Reporting JPM
Company Name
Date Rating
Ball Corp.
10/25/2012
N
Bemis Co. Inc.
10/25/2012
N
Owens-Illinois Inc.
10/24/2012
N
Sealed Air Corp.
10/31/2012 OW
Alcoa Inc.
10/9/2012 OW
Allegheny Technologies Inc.
10/24/2012 OW
Cliffs Natural Resources Inc.
10/24/2012
N
Freeport-McMoRan Copper & Gold10/22/2012
Inc.
OW
Newmont Mining Corp.
11/1/2012 OW
Nucor Corp.
10/18/2012 OW
Titanium Metals Corp.
10/29/2012 OW
United States Steel Corp.
10/30/2012
N
International Paper Co.
10/25/2012
N
MeadWestvaco Corp.
10/23/2012 OW
Boeing Co.
10/24/2012 OW
General Dynamics Corp.
10/24/2012 OW
Honeywell International Inc.
10/19/2012 OW
L-3 Communications Holdings Inc. 10/30/2012
N
Lockheed Martin Corp.
10/24/2012
N
Northrop Grumman Corp.
10/24/2012
N
Precision Castparts Corp.
10/25/2012 OW
Raytheon Co.
10/25/2012 OW
Rockwell Collins Inc.
10/26/2012 OW
Textron Inc.
10/17/2012
N
United Technologies Corp.
10/23/2012 OW
Masco Corp.
10/29/2012 UW
Fluor Corp.
11/1/2012 OW
Jacobs Engineering Group Inc. 11/15/2012
N
Quanta Services Inc.
10/29/2012 OW
Cooper Industries PLC Cl A
10/19/2012
Mkt. Cap.
(mm)
$6,429
$3,249
$3,237
$2,990
$9,293
$3,314
$5,775
$38,179
$26,945
$12,336
$2,129
$2,998
$16,011
$5,219
$52,881
$22,987
$47,021
$6,965
$30,077
$16,862
$23,417
$18,198
$7,476
$7,085
$69,314
$5,114
$9,369
$5,161
$5,007
$11,863
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
3/29/13
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$41.55
$43.79
$32.81
$31.46
$33.48
$27.21
$19.61
$25.46
$15.60
$15.40
$21.50
$11.51
$8.71
$11.66
$7.97
$30.92
$53.00
$27.61
$40.53
$78.85
$32.25
$40.22
$48.96
$31.08
$54.85
$72.42
$42.95
$38.86
$45.75
$33.66
$12.16
$17.95
$10.42
$20.78
$32.52
$17.67
$36.61
$37.38
$24.62
$30.06
$31.34
$22.83
$70.34
$77.83
$61.33
$65.16
$74.54
$60.35
$60.24
$62.00
$46.34
$72.14
$73.94
$59.87
$92.71
$94.90
$72.37
$68.21
$70.20
$52.69
$161.11 $179.47 $150.53
$54.81
$58.68
$41.59
$52.59
$61.46
$46.37
$25.22
$29.18
$16.86
$76.02
$87.50
$70.41
$14.32
$16.48
$7.61
$56.11
$64.67
$44.99
$39.78
$48.17
$33.61
$23.93
$26.07
$18.15
$73.46
$76.55
$49.16
3Q12 EPS Analysis
YTD %
Change
16%
5%
1%
-11%
1%
-35%
-35%
9%
-9%
-2%
-19%
-21%
24%
0%
-4%
-2%
11%
8%
15%
17%
-2%
13%
-5%
36%
4%
37%
12%
-2%
11%
36%
3Q11
EPS (a)
$0.81
$0.56
$0.84
$0.48
$0.15
$0.63
$4.07
$1.10
$1.29
$0.57
$0.14
$0.72
$0.92
$0.70
$1.46
$1.83
$1.10
$2.24
$1.99
$1.86
$2.03
$1.43
$1.13
$0.45
$1.47
$0.08
$0.78
$0.74
$0.25
$0.98
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.88
$0.54
$0.68
$0.31
$0.00
$0.03
-80%
$0.03
$0.41
$1.14
$0.71
$0.98
$0.41
$0.17
$0.02
$0.77
$0.39
$1.12
$1.78
$1.14
$1.86
$1.84
$1.69
$2.35
$1.27
$1.16
$0.52
$1.17
$0.12
$0.97
$0.79
$0.36
$1.14
Outlook
YTD %
Change in
NTM
EPS Est
6%
2%
0%
-30%
-33%
-23%
-54%
-3%
-21%
-5%
0%
-18%
13%
-15%
10%
-3%
11%
-5%
6%
4%
11%
6%
-1%
38%
3%
67%
13%
7%
26%
14%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
53%
35%
65%
35%
65%
29%
35%
47%
33%
61%
35%
59%
47%
53%
59%
41%
41%
53%
29%
71%
35%
53%
41%
59%
82%
18%
71%
24%
65%
35%
82%
18%
76%
18%
71%
12%
88%
12%
76%
18%
29%
65%
82%
18%
41%
29%
82%
18%
88%
12%
41%
47%
59%
29%
41%
24%
47%
24%
82%
18%
37
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
EMR
ROK
ROP
MMM
DHR
GE
Machinery
CAT
CMI
DE
DOV
ETN
FLS
ITW
IR
JOY
PCAR
PLL
PH
PNR
SNA
SWK
XYL
FAST
GWW
Commercial Services & SuppliesADT
AVY
CTAS
RRD
IRM
PBI
Company Name
Emerson Electric Co.
Rockwell Automation Inc.
Roper Industries Inc.
3M Co.
Danaher Corp.
General Electric Co.
Caterpillar Inc.
Cummins Inc.
Deere & Co.
Dover Corp.
Eaton Corp.
Flowserve Corp.
Illinois Tool Works Inc.
Ingersoll-Rand Plc
Joy Global Inc.
Paccar Inc.
Pall Corp.
Parker-Hannifin Corp
Pentair Ltd.
Snap-On Inc.
Stanley Black & Decker Inc.
Xylem Inc.
Fastenal Co.
W.W. Grainger Inc.
ADT Corporation
Avery Dennison Corp.
Cintas Corp.
R.R. Donnelley & Sons Co.
Iron Mountain Inc.
Pitney Bowes Inc.
Reporting JPM
Date Rating
11/6/2012
N
11/5/2012
N
10/25/2012
N
10/23/2012
N
10/18/2012 OW
10/19/2012 OW
10/22/2012 OW
10/30/2012
N
11/21/2012 UW
10/17/2012
N
10/31/2012 OW
10/29/2012
10/23/2012
N
10/19/2012 NR
12/12/2012
N
10/25/2012
N
12/3/2012
N
10/19/2012
N
10/30/2012
10/18/2012
10/17/2012
N
11/1/2012
10/11/2012
10/16/2012
10/24/2012
9/20/2012
10/29/2012
10/23/2012
10/30/2012
NR
OW
NR
Mkt. Cap.
(mm)
$35,426
$9,765
$10,614
$64,486
$38,474
$236,835
$54,326
$16,716
$31,799
$10,095
$15,160
$6,583
$27,323
$13,760
$5,949
$14,133
$7,230
$11,825
$4,323
$4,164
$12,089
$4,558
$12,533
$14,606
$8,522
$3,097
$5,251
$1,941
$5,896
$2,689
Fiscal
Year
Ending
9/28/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
10/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
10/31/12
12/31/12
7/31/13
6/28/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
5/31/13
12/31/12
12/31/12
12/31/12
38
Price Performance

Price
High
Low Change
$48.29
$53.78
$43.59
4%
$69.18
$84.71
$60.57
-6%
$108.52 $111.52
$69.80
25%
$93.28
$95.46
$75.09
14%
$55.33
$57.15
$43.00
18%
$22.43
$23.18
$14.68
25%
$83.16 $116.95
$77.20
-8%
$87.79 $129.51
$82.20
0%
$81.19
$89.70
$67.52
5%
$55.22
$67.20
$50.14
-5%
$44.86
$53.06
$36.38
3%
$128.76 $135.57
$79.50
30%
$58.28
$62.09
$42.41
25%
$44.64
$47.71
$26.62
47%
$56.19
$96.00
$47.69
-25%
$39.98
$48.22
$35.21
7%
$63.18
$65.82
$46.33
11%
$79.24
$91.47
$67.51
4%
$43.58
$48.77
$32.50
31%
$71.59
$74.27
$46.33
41%
$71.90
$81.90
$54.83
6%
$24.56
$28.87
$22.43
-4%
$42.32
$55.05
$32.26
-3%
$209.57 $221.84 $152.31
12%
$37.06
$41.00
$34.68 #VALUE!
$29.88
$32.78
$23.98
4%
$41.97
$42.75
$27.62
21%
$10.77
$16.75
$9.95
-25%
$34.35
$35.09
$27.10
12%
$13.40
$21.20
$12.64
-28%
3Q12 EPS Analysis
3Q11
EPS (a)
$0.98
$1.39
$1.12
$1.52
$0.73
$0.31
$1.71
$2.35
$1.62
$1.21
$1.08
$1.92
$1.00
$0.81
$1.83
$0.77
$0.74
$1.91
$0.58
$1.16
$1.34
$0.55
$0.33
$2.51
$0.48
$0.52
$0.51
$0.37
$0.69
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$1.06
$1.33
$1.23
$1.65
$0.79
$0.36
$2.24
$1.94
$1.88
$1.28
$1.11
$2.06
$1.06
$0.99
$1.91
$0.66
$0.70
$1.73
$0.63
$1.23
$1.45
$0.43
$0.37
$2.89
$0.41
$0.45
$0.59
$0.60
15%
$0.01
$0.44
$0.36
$0.48
Outlook
YTD %
Change in
NTM
EPS Est
0%
1%
18%
8%
8%
8%
11%
-4%
5%
7%
5%
14%
7%
14%
-8%
3%
-2%
0%
16%
13%
5%
-1%
16%
16%
-14%
22%
-7%
9%
-10%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
41%
47%
71%
29%
65%
12%
71%
18%
82%
18%
59%
24%
76%
24%
65%
35%
71%
29%
88%
12%
71%
29%
59%
35%
53%
35%
53%
47%
82%
18%
59%
35%
63%
38%
71%
24%
65%
18%
76%
24%
65%
35%
0%
100%
47%
24%
94%
6%
59%
35%
56%
28%
59%
29%
65%
6%
59%
24%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
RSG
SRCL
TYC
WM
DNB
EFX
RHI
CHRW
EXPD
FDX
UPS
Airlines
LUV
Road & Rail
CSX
NSC
R
UNP
Auto Components
BWA
GT
JCI
Automobiles
F
HOG
Household Durables
DHI
HAR
LEG
LEN
NWL
PHM
WHR
Leisure Equipment & Products HAS
MAT
Reporting JPM
Company Name
Date Rating
Republic Services Inc.
11/1/2012
N
Stericycle Inc.
10/24/2012 OW
Ty co International Ltd.
11/12/2012
N
Waste Management Inc.
10/30/2012 UW
Dun & Bradstreet Corp.
10/23/2012 UW
Equifax Inc.
10/24/2012 OW
Robert Half International Inc.
10/22/2012 OW
C.H. Robinson Worldwide Inc.
10/23/2012
N
Expeditors International of Washington11/6/2012
Inc.
N
FedEx Corp.
9/18/2012 OW
United Parcel Service Inc. Cl B 10/23/2012 OW
Southwest Airlines Co.
10/18/2012
N
CSX Corp.
10/16/2012
N
Norfolk Southern Corp.
10/23/2012
N
Ryder System Inc.
10/23/2012
Union Pacific Corp.
10/18/2012 OW
BorgWarner Inc.
10/31/2012 OW
Goodyear Tire & Rubber Co.
10/22/2012
Johnson Controls Inc.
10/22/2012
N
Ford Motor Co.
10/26/2012 OW
Harley-Davidson Inc.
10/23/2012
N
D.R. Horton Inc.
11/12/2012
N
Harman International Industries Inc. 11/1/2012 OW
Leggett & Platt Inc.
10/29/2012
Lennar Corp. Cl A
9/24/2012 OW
Newell Rubbermaid Inc.
10/22/2012 OW
PulteGroup Inc.
10/25/2012 OW
Whirlpool Corp.
10/23/2012
N
Hasbro Inc.
10/22/2012
Mattel Inc.
10/16/2012
Mkt. Cap.
(mm)
$10,067
$7,705
$12,987
$14,834
$3,643
$5,851
$3,598
$9,527
$7,234
$28,265
$52,485
$6,517
$21,933
$22,565
$2,145
$57,273
$7,646
$3,018
$17,830
$37,356
$9,549
$6,619
$2,907
$3,497
$5,869
$5,658
$6,098
$6,522
$4,860
$11,994
Fiscal
Year
Ending
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
5/31/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
9/28/12
6/28/13
12/31/12
11/30/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$27.56
$31.32
$25.15
$89.96
$94.71
$75.75
$28.11
$29.26
$21.02
$32.00
$36.35
$29.77
$81.16
$86.52
$61.61
$48.81
$49.49
$31.63
$25.37
$32.32
$23.45
$59.00
$76.76
$50.81
$34.36
$47.73
$34.20
$89.99
$97.19
$72.01
$72.26
$81.79
$66.46
$8.77
$10.05
$7.37
$21.09
$23.71
$19.87
$66.40
$78.50
$62.82
$41.96
$57.63
$32.76
$120.93 $129.27
$88.83
$66.81
$87.45
$60.17
$12.33
$15.80
$9.24
$26.07
$35.95
$23.37
$9.98
$13.05
$8.82
$41.90
$54.32
$33.70
$20.73
$22.79
$9.34
$43.28
$52.75
$31.18
$24.87
$25.30
$19.26
$36.78
$38.27
$14.36
$19.59
$19.74
$12.31
$15.89
$17.47
$3.94
$84.10
$87.54
$45.22
$37.32
$39.98
$31.51
$35.18
$36.25
$26.28
3Q12 EPS Analysis
YTD %
Change
0%
15%
-40%
-2%
8%
26%
-11%
-15%
-16%
8%
-1%
2%
0%
-9%
-21%
14%
5%
-13%
-17%
-7%
8%
64%
14%
8%
87%
21%
152%
77%
17%
27%
3Q11
EPS (a)
$0.53
$0.71
$0.92
$0.63
$1.42
$0.65
$0.31
$0.70
$0.50
$1.46
$1.06
$0.15
$0.43
$1.59
$1.09
$1.85
$1.15
$0.72
$0.75
$0.46
$0.78
$0.11
$0.69
$0.31
$0.11
$0.45
-$0.34
$2.35
$1.27
$0.86
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.49
$0.82
$0.32
$0.61
$1.61
$0.73
$0.39
$0.73
$0.44
$1.57
$1.45
-1%
-$0.12
$1.07
$0.13
$0.43
$1.23
$1.18
$2.18
$1.19
$0.58
$0.75
$0.28
$0.59
$0.28
$0.79
$0.38
$0.28
$0.40 264%
$0.12
$0.44
$0.20
$1.60
$1.20
$0.99
Outlook
YTD %
Change in
NTM
EPS Est
0%
12%
-49%
0%
11%
15%
21%
2%
-8%
2%
6%
10%
3%
1%
5%
19%
8%
-6%
-6%
-10%
18%
81%
24%
12%
112%
6%
316%
26%
-9%
13%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
59%
29%
88%
0%
100%
0%
35%
53%
59%
18%
76%
0%
65%
29%
41%
47%
41%
53%
67%
33%
59%
29%
65%
35%
71%
24%
71%
29%
65%
24%
71%
24%
71%
29%
65%
35%
47%
41%
53%
41%
35%
59%
53%
47%
65%
35%
41%
53%
56%
39%
76%
12%
47%
53%
59%
41%
47%
53%
47%
41%
39
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
Textiles Apparel & Luxury GoodsC OH
FOSL
NKE
RL
VFC
Hotels Restaurants & Leisure CCL
CMG
DRI
IGT
MAR
MCD
SBUX
HOT
WYN
WYNN
YUM
Diversified Consumer Services APOL
HRB
Media
CVC
CBS
CMCSA
DTV
DISCA
DIS
GCI
IPG
MHP
NWSA
OMC
SNI
Reporting JPM
Company Name
Date Rating
Coach Inc.
10/22/2012 OW
Fossil Inc.
11/6/2012
N
Nike Inc. Cl B
9/27/2012
Ralph Lauren Corporation
10/31/2012
N
VF Corp.
10/22/2012 OW
Carnival Corp.
9/25/2012
N
Chipotle Mex ican Grill Inc.
10/18/2012
N
Darden Restaurants Inc.
9/21/2012
N
International Game Technology
11/12/2012
N
Marriott International Inc.
10/3/2012
N
McDonald's Corp.
10/19/2012 OW
Starbucks Corp.
11/1/2012 OW
Starwood Hotels & Resorts Worldwide
10/25/2012
Inc.
OW
Wyndham Worldwide Corp.
10/24/2012 OW
Wynn Resorts Ltd.
10/15/2012 OW
Yum! Brands Inc.
10/9/2012 OW
Apollo Group Inc. Cl A
10/16/2012 OW
H&R Block Inc.
11/26/2012
Cablevision Systems Corp.
10/22/2012 UW
CBS Corp (Cl B)
11/7/2012 OW
Comcast Corp. Cl A
10/26/2012 OW
DIRECTV
11/5/2012
N
Discov ery Communications Inc. Series
11/6/2012
A
N
Walt Disney Co.
11/8/2012 OW
Gannett Co. Inc.
10/15/2012
N
Interpublic Group Of Cos.
10/26/2012 OW
McGraw-Hill Cos.
10/31/2012
News Corp. Cl A
11/6/2012
Omnicom Group Inc.
10/16/2012 OW
Scripps Networks Interactive Inc. Cl10/29/2012
A
N
Mkt. Cap.
(mm)
$15,046
$5,014
$33,981
$9,409
$17,538
$21,776
$9,081
$7,032
$3,398
$12,110
$93,179
$35,682
$11,065
$7,586
$11,160
$32,361
$3,172
$4,519
$3,547
$20,656
$74,358
$33,215
$8,738
$91,885
$4,101
$4,931
$15,447
$38,108
$13,746
$7,237
Fiscal
Year
Ending
6/28/13
12/31/12
5/31/13
3/29/13
12/31/12
11/30/12
12/31/12
5/31/13
9/28/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
8/31/12
4/30/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
6/28/13
12/31/12
12/31/12
40
Price Performance

Price
High
Low
$53.00
$79.70
$48.24
$82.41 $139.20
$62.77
$94.22 $114.81
$85.10
$155.98 $182.48 $134.29
$159.58 $164.35 $125.55
$36.63
$39.00
$29.15
$286.62 $442.40 $277.26
$54.68
$57.93
$41.65
$12.72
$18.17
$10.92
$38.38
$41.84
$27.01
$92.40 $102.22
$85.92
$46.95
$62.00
$39.72
$56.32
$61.09
$41.93
$53.35
$55.34
$29.56
$111.02 $142.20
$90.11
$70.99
$74.44
$49.72
$28.10
$58.29
$25.77
$16.67
$18.04
$14.02
$16.71
$18.25
$10.76
$34.61
$38.32
$22.05
$35.16
$36.98
$20.90
$50.71
$55.17
$41.45
$59.91
$61.56
$38.56
$51.21
$53.40
$32.24
$17.72
$19.99
$9.82
$11.28
$12.17
$7.35
$55.13
$55.94
$40.50
$24.34
$25.45
$15.93
$51.75
$54.76
$39.50
$63.11
$64.38
$37.02
3Q12 EPS Analysis
YTD %
Change
-13%
4%
-2%
13%
26%
12%
-15%
20%
-26%
32%
-8%
2%
17%
41%
0%
20%
-48%
2%
18%
28%
48%
19%
46%
37%
33%
16%
23%
36%
16%
49%
3Q11
EPS (a)
$0.73
$1.09
$1.36
$2.46
$2.87
$1.69
$1.90
$0.78
$0.24
$0.29
$1.45
$0.37
$0.42
$0.94
$1.05
$0.83
$1.02
-$0.38
$0.14
$0.50
$0.33
$0.70
$0.59
$0.59
$0.44
$0.16
$1.21
$0.32
$0.72
$0.66
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.76
$1.16
$1.12
$1.27
-7%
$0.15
$2.14
$3.49
$1.44
$1.53
-9%
$0.09
$2.30
$0.84
$0.86
10%
$0.02
$0.32
$0.40
$0.44
52%
$0.04
$1.48
$0.45
$0.53
$1.10
$1.33
$0.97
$0.99
19%
$0.02
$0.49
-$0.40
$0.17
$0.61
$0.47
$0.93
$0.63
$0.69
$0.53
$0.17
$1.29
$0.38
$0.73
$0.75
Outlook
YTD %
Change in
NTM
EPS Est
9%
8%
1%
9%
13%
-15%
23%
6%
3%
23%
3%
13%
19%
23%
-1%
14%
-10%
5%
-27%
26%
16%
14%
15%
18%
1%
23%
17%
15%
9%
16%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
82%
6%
88%
6%
89%
11%
94%
6%
76%
24%
83%
6%
82%
18%
61%
28%
47%
47%
61%
17%
71%
18%
65%
24%
100%
0%
100%
0%
53%
47%
83%
11%
94%
6%
41%
59%
18%
76%
65%
35%
82%
18%
47%
53%
65%
29%
65%
35%
53%
35%
53%
41%
82%
18%
53%
41%
47%
24%
69%
6%

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505

Company Stats
Industry
Distributors
Multiline Retail
Specialty Retail
Ticker
TWC
TWX
VIAB
WPO
GPC
AMZN
EXPE
NFLX
PCLN
TRIP
BIG
DLTR
FDO
KSS
M
JWN
JCP
TGT
ANF
AN
AZO
BBBY
BBY
KMX
GME
GPS
HD
LTD
LOW
ORLY
Company Name
Time Warner Cable Inc.
Time Warner Inc.
Viacom Inc. Cl B
Washington Post Co. Cl B
Genuine Parts Co.
Amazon.com Inc.
Expedia Inc.
Netflix Inc.
priceline.com Inc.
TripAdv isor Inc.
Big Lots Inc.
Dollar Tree Inc.
Family Dollar Stores Inc.
Kohl's Corp.
Macy's Inc.
Nordstrom Inc.
J.C. Penney Co. Inc.
Target Corp.
Abercrombie & Fitch Co. Cl A
AutoNation Inc.
AutoZone Inc.
Bed Bath & Beyond Inc.
Best Buy Co. Inc.
CarMax Inc.
GameStop Corp. Cl A
Gap Inc.
Home Depot Inc.
Limited Brands Inc.
Lowe's Cos.
O'Reilly Automotive Inc.
Reporting JPM
Date Rating
10/31/2012
N
11/7/2012 OW
11/15/2012 OW
11/2/2012
10/18/2012
N
10/22/2012 OW
10/25/2012
N
10/23/2012
N
11/5/2012 OW
10/30/2012
N
11/26/2012 UW
11/15/2012 OW
10/3/2012 OW
11/8/2012
N
11/7/2012 OW
11/8/2012
N
11/7/2012 OW
11/15/2012
N
11/14/2012
N
10/25/2012
9/19/2012 OW
9/19/2012
N
11/20/2012 NR
9/20/2012
11/12/2012
11/15/2012
N
11/13/2012 OW
11/14/2012 OW
11/19/2012
N
10/24/2012
N
Mkt. Cap.
(mm)
$29,871
$43,024
$25,313
$2,229
$9,511
$110,751
$6,796
$3,637
$30,015
$4,174
$1,810
$10,805
$7,947
$11,758
$15,698
$11,109
$5,291
$41,035
$2,760
$5,620
$13,973
$14,080
$5,993
$7,171
$2,834
$17,612
$90,055
$13,994
$35,232
$10,066
Fiscal
Year
Ending
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
1/31/13
1/31/13
8/30/13
1/31/13
1/31/13
1/31/13
1/31/13
1/31/13
1/31/13
12/31/12
8/30/13
2/28/13
2/28/13
2/28/13
1/31/13
1/31/13
1/31/13
1/31/13
1/31/13
12/31/12
Price Performance

Price
High
Low
$97.50 $100.17
$57.15
$45.34
$46.59
$31.26
$54.62
$56.91
$39.86
$358.05 $405.00 $322.50
$61.32
$66.50
$52.71
$244.99 $264.11 $166.97
$55.28
$60.29
$23.93
$65.50 $133.43
$52.81
$602.41 $774.96 $438.76
$32.22
$47.81
$23.99
$30.38
$47.22
$29.08
$46.91
$56.82
$36.04
$68.00
$74.73
$53.03
$50.14
$56.66
$42.72
$39.00
$42.17
$27.08
$55.27
$58.44
$44.22
$24.15
$43.18
$19.06
$62.66
$65.80
$47.25
$33.43
$77.49
$28.64
$46.56
$48.12
$31.57
$377.35 $399.10 $313.11
$61.43
$75.84
$56.72
$17.80
$28.53
$16.25
$31.34
$35.17
$24.83
$22.96
$26.66
$15.32
$36.62
$37.85
$17.03
$59.74
$63.20
$34.05
$48.69
$52.20
$37.57
$30.89
$32.29
$20.24
$84.67 $107.13
$67.77
3Q12 EPS Analysis
YTD %
Change
53%
25%
20%
-5%
0%
42%
90%
-5%
29%
28%
-20%
13%
18%
2%
21%
11%
-31%
22%
-32%
26%
16%
6%
-24%
3%
-5%
97%
42%
21%
22%
6%
3Q11
EPS (a)
$1.08
$0.79
$1.06
$4.95
$0.97
$0.14
$1.54
$1.16
$9.95
$0.06
$0.44
$0.66
$0.80
$0.32
$0.59
$0.11
$0.82
$0.57
$0.48
$7.18
$0.93
$0.47
$0.49
$0.39
$0.38
$0.60
$0.25
$0.35
$1.10
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$1.49
$0.82
$1.17
$1.31
$1.12
-$0.08
$1.26
$0.04
$11.81
$0.42
-$0.24
$0.51
$0.75
$0.75
14%
$0.00
$0.86
$0.28
$0.71
-$0.05
$0.77
$0.61
$0.67
$8.42
$8.46
18%
$0.04
$1.02
$0.98
5%
-$0.04
$0.36
$0.51
$0.48
-2%
-$0.03
$0.33
$0.54
$0.70
$0.21
$0.35
$1.27
Outlook
YTD %
Change in
NTM
EPS Est
25%
13%
8%
4%
10%
4%
-22%
1405%
18%
5%
-6%
19%
14%
-3%
17%
9%
-42%
10%
-29%
29%
16%
16%
-18%
0%
7%
36%
21%
11%
10%
20%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
65%
35%
65%
29%
69%
31%
64%
36%
88%
6%
71%
24%
71%
29%
94%
6%
100%
0%
50%
0%
53%
47%
100%
0%
78%
11%
65%
24%
88%
12%
76%
24%
41%
53%
65%
35%
47%
53%
71%
24%
94%
6%
83%
11%
25%
69%
61%
39%
29%
65%
82%
18%
94%
0%
76%
18%
59%
24%
82%
12%
41

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505

Company Stats
Industry
Beverages
Food Products
Ticker
PETM
ROST
SPLS
TIF
TJX
URBN
COST
CVS
KR
SWY
SYY
WMT
WAG
WFM
BEAM
BF.B
KO
CCE
STZ
DPS
TAP
MNST
PEP
ADM
CPB
CAG
DF
GIS
HNZ
HSY
Company Name
PetSmart Inc.
Ross Stores Inc.
Staples Inc.
Tiffany & Co.
TJX Cos.
Urban Outfitters Inc.
Costco Wholesale Corp.
CVS Caremark Corp.
Kroger Co.
Safeway Inc.
Sysco Corp.
Wal-Mart Stores Inc.
Walgreen Co.
Whole Foods Market Inc.
Beam Inc
Brown-Forman Corp. Cl B
Coca-Cola Co.
Coca-Cola Enterprises Inc.
Constellation Brands Inc. Cl A
Dr Pepper Snapple Group Inc.
Molson Coors Brewing Co. Cl B
Monster Beverage Corp.
PepsiCo Inc.
Archer Daniels Midland Co.
Campbell Soup Co.
ConAgra Foods Inc.
Dean Foods Co.
General Mills Inc.
H.J. Heinz Co.
Hershey Co.
Reporting JPM
Date Rating
11/12/2012
N
11/15/2012
N
11/14/2012 OW
11/29/2012
N
11/13/2012
N
11/19/2012 OW
10/10/2012 OW
11/6/2012 OW
11/29/2012
N
10/11/2012
N
11/7/2012
N
11/15/2012 OW
9/28/2012
N
11/7/2012 OW
10/31/2012
N
12/5/2012
10/16/2012
N
10/25/2012
N
10/5/2012
N
10/24/2012
N
11/7/2012
N
11/5/2012
N
10/17/2012 OW
10/30/2012
11/20/2012 UW
9/20/2012 OW
11/5/2012 NR
9/19/2012
N
11/20/2012
N
10/25/2012 OW
Mkt. Cap.
(mm)
$7,591
$14,372
$7,820
$7,790
$32,948
$5,363
$43,908
$61,144
$12,293
$3,901
$18,292
$253,520
$33,558
$17,988
$9,076
$8,389
$171,478
$9,286
$5,420
$9,102
$6,898
$9,462
$109,391
$18,501
$10,974
$11,362
$2,769
$25,538
$18,093
$11,717
Fiscal
Year
Ending
1/31/13
1/31/13
1/31/13
1/31/13
1/31/13
1/31/13
8/30/13
12/31/12
1/31/13
12/31/12
6/28/13
1/31/13
8/30/13
9/28/12
12/31/12
4/30/13
12/31/12
12/31/12
2/28/13
12/31/12
12/31/12
12/31/12
12/31/12
6/28/13
7/31/13
5/31/13
12/31/12
5/31/13
4/30/13
12/31/12
42
Price Performance

Price
High
Low
$70.17
$72.75
$41.92
$64.18
$70.82
$41.18
$11.46
$16.93
$10.57
$61.51
$80.99
$49.72
$44.76
$46.67
$28.14
$36.85
$40.65
$22.27
$101.56 $104.43
$78.81
$48.06
$49.23
$34.05
$23.30
$24.83
$20.98
$16.29
$23.16
$14.73
$31.16
$31.90
$25.85
$75.42
$76.81
$54.19
$35.63
$37.35
$28.53
$97.41 $101.87
$62.77
$57.31
$64.00
$46.30
$65.10
$67.91
$47.91
$38.09
$40.67
$32.37
$31.53
$32.29
$24.20
$35.32
$36.50
$17.95
$43.23
$45.85
$34.65
$44.17
$46.35
$37.96
$53.63
$83.96
$40.88
$70.29
$73.66
$60.51
$28.09
$33.98
$25.02
$35.00
$36.28
$31.22
$27.88
$28.03
$23.64
$14.98
$17.50
$9.16
$39.58
$41.06
$36.75
$56.50
$58.31
$49.75
$70.71
$73.42
$55.32
3Q12 EPS Analysis
YTD %
Change
37%
35%
-17%
-7%
39%
34%
22%
18%
-4%
-23%
6%
26%
8%
40%
12%
21%
9%
22%
71%
9%
1%
16%
6%
-2%
5%
6%
34%
-2%
5%
14%
3Q11
EPS (a)
$0.50
$0.63
$0.47
$0.70
$0.53
$0.33
$1.08
$0.70
$0.33
$0.38
$0.51
$0.97
$0.57
$0.42
$0.53
$0.73
$0.52
$0.72
$0.77
$0.71
$1.14
$0.44
$1.31
$0.69
$0.82
$0.29
$0.18
$0.64
$0.81
$0.84
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.63
$0.72
$0.45
$0.63
$0.61
$0.41
$1.31
$1.39
29%
$0.08
$0.84
$0.43
$0.42
$0.50
$1.07
$0.56
$0.53
-7%
-$0.03
$0.60
$0.55
$0.77
$0.50
$0.68
$0.54
$0.71
-8%
$0.17
$0.77
$1.35
$0.56
$1.16
$0.43
$0.85
$0.36
$0.44
52%
$0.08
$0.28
$0.63
$0.66
3%
$0.03
$0.88
$0.86
Outlook
YTD %
Change in
NTM
EPS Est
25%
22%
-5%
-4%
22%
16%
13%
16%
15%
13%
0%
8%
19%
26%
12%
8%
4%
4%
16%
8%
11%
29%
-6%
6%
11%
45%
1%
3%
13%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
88%
6%
94%
0%
18%
53%
71%
29%
65%
18%
59%
41%
61%
28%
71%
6%
59%
18%
41%
35%
41%
35%
71%
12%
44%
56%
88%
12%
65%
35%
41%
53%
59%
24%
71%
24%
83%
11%
59%
24%
47%
53%
47%
47%
59%
18%
53%
47%
65%
35%
56%
33%
76%
24%
61%
22%
53%
47%
71%
6%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
HRL
K
KRFT
MKC
MJN
MDLZ
SJM
TSN
Tobacco
MO
LO
PM
RAI
Household Products
CLX
CL
KMB
PG
Personal Products
AVP
EL
BCR
BAX
BDX
BSX
CFN
COV
XRAY
EW
ISRG
MDT
STJ
SYK
Company Name
Hormel Foods Corp.
Kellogg Co.
Kraft Foods Group Inc.
McCormick & Co. Inc.
Mead Johnson Nutrition Co.
Mondelez International Inc. Cl A
J.M. Smucker Co.
Ty son Foods Inc. Cl A
Altria Group Inc.
Lorillard Inc.
Philip Morris International Inc.
Reynolds American Inc.
Clorox Co.
Colgate-Palmolive Co.
Kimberly-Clark Corp.
Procter & Gamble Co.
Avon Products Inc.
Estee Lauder Cos. Cl A
C.R. Bard Inc.
Baxter International Inc.
Becton Dickinson & Co.
Boston Scientific Corp.
CareFusion Corp.
Cov idien PLC
Dentsply International Inc.
Edwards Lifesciences Corp.
Intuitive Surgical Inc.
Medtronic Inc.
St. Jude Medical Inc.
Stryker Corp.
Reporting JPM
Date Rating
11/20/2012
11/1/2012
N
11/1/2012
N
9/27/2012
N
10/25/2012 OW
10/29/2012 OW
11/16/2012 OW
11/19/2012
N
10/25/2012 OW
10/24/2012
N
10/18/2012
N
10/23/2012 OW
10/31/2012
N
10/25/2012
N
10/24/2012
N
10/25/2012 OW
10/25/2012
11/1/2012
N
10/23/2012
N
10/18/2012 OW
11/7/2012 UW
10/18/2012
N
11/5/2012 OW
11/9/2012 OW
10/25/2012
10/19/2012
N
10/16/2012
N
11/20/2012
N
10/17/2012 OW
10/17/2012 OW
Mkt. Cap.
(mm)
$7,631
$18,398
$27,416
$7,432
$14,482
$48,359
$9,153
$4,688
$67,775
$15,004
$153,030
$24,116
$9,636
$51,063
$33,957
$187,886
$7,410
$14,827
$8,568
$33,299
$15,246
$7,904
$6,271
$27,634
$5,196
$10,161
$19,753
$43,407
$13,315
$19,867
Fiscal
Year
Ending
10/31/12
12/31/12
12/31/12
11/30/12
12/31/12
12/31/12
4/30/13
9/28/12
12/31/12
12/31/12
12/31/12
12/31/12
6/28/13
12/31/12
12/31/12
6/28/13
12/31/12
6/28/13
12/31/12
12/31/12
9/28/12
12/31/12
6/28/13
9/28/12
12/31/12
12/31/12
12/31/12
4/30/13
12/31/12
12/31/12
Price Performance

Price
High
Low Change
$29.03
$30.70
$27.28
-1%
$51.43
$55.30
$46.33
2%
$46.35
$48.00
$42.00 #VALUE!
$61.87
$63.91
$46.28
23%
$71.07
$88.72
$60.62
3%
$27.25
$28.48
$22.07
-27%
$83.62
$87.81
$70.50
7%
$16.06
$21.06
$14.07
-22%
$33.34
$36.29
$26.80
12%
$114.87 $141.07 $106.46
1%
$90.78
$94.13
$65.08
16%
$42.65
$46.93
$37.68
3%
$73.98
$74.97
$63.06
11%
$107.69 $109.84
$86.19
17%
$85.99
$88.25
$68.27
17%
$68.14
$69.97
$59.07
2%
$17.15
$23.94
$14.45
-2%
$62.38
$65.60
$46.26
11%
$102.21 $108.31
$80.80
20%
$60.85
$61.98
$47.55
23%
$76.40
$80.56
$70.05
2%
$5.57
$6.41
$4.79
4%
$27.90
$28.99
$22.55
10%
$57.56
$60.81
$41.69
28%
$36.65
$41.38
$31.57
5%
$87.81 $110.79
$61.59
24%
$494.63 $594.89 $369.28
7%
$42.55
$44.79
$32.26
11%
$42.41
$44.80
$32.13
24%
$52.22
$57.15
$45.45
5%
3Q12 EPS Analysis
3Q11
EPS (a)
$0.43
$0.80
$0.69
$0.78
$0.58
$1.36
$0.26
$0.56
$1.94
$1.37
$0.70
$0.98
$1.31
$1.26
$1.03
$0.38
$0.71
$1.62
$1.09
$1.39
$0.10
$0.33
$1.08
$0.46
$0.38
$3.05
$0.84
$0.78
$0.91
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.50
$0.80
$0.69
$0.76
$0.78
13%
$0.02
$0.72
$0.37
$1.44
$0.44
$0.58
$2.24
$1.39
$0.79
$0.95
$1.38
$1.32
$0.96
$0.22
$0.77
$1.63
$1.14
$1.40
$0.11
$0.43
$1.00
$0.50
$0.57
$3.50
$0.88
$0.81
$0.98
Outlook
YTD %
Change in
NTM
EPS Est
6%
0%
7%
7%
-36%
1%
-26%
7%
8%
8%
5%
4%
5%
5%
-8%
-47%
11%
1%
3%
-1%
-9%
13%
2%
5%
14%
20%
3%
1%
7%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
76%
12%
47%
41%
83%
11%
85%
8%
71%
18%
82%
18%
65%
35%
47%
12%
59%
35%
82%
12%
65%
29%
65%
29%
59%
12%
47%
47%
71%
18%
35%
53%
82%
12%
82%
6%
82%
0%
71%
18%
53%
29%
55%
27%
88%
12%
47%
41%
65%
12%
88%
12%
47%
47%
71%
12%
41%
24%
43
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
VAR
ZMH
A ET
ABC
CAH
CI
CVH
DVA
ESRX
HUM
LH
MCK
PDCO
DGX
THC
UNH
WLP
CERN
Biotechnology
ALXN
AMGN
BIIB
CELG
GILD
Pharmaceuticals
ABT
AGN
BMY
FRX
HSP
JNJ
LLY
Reporting JPM
Company Name
Date Rating
Varian Medical Systems Inc.
10/25/2012 OW
Zimmer Holdings Inc.
10/25/2012
N
Aetna Inc.
10/25/2012
N
AmerisourceBergen Corp.
11/1/2012
N
Cardinal Health Inc.
10/30/2012 OW
Cigna Corporation
11/1/2012 OW
Cov entry Health Care Inc.
10/26/2012
N
DaVita Inc.
10/30/2012
Express Scripts Holding Co
11/5/2012 OW
Humana Inc.
11/5/2012
N
Laboratory Corp. of America Holdings
10/18/2012
N
McKesson Corp.
10/29/2012 OW
Patterson Cos. Inc.
11/19/2012
N
Quest Diagnostics Inc.
10/17/2012
N
Tenet Healthcare Corp.
11/5/2012
UnitedHealth Group Inc.
10/16/2012 NR
WellPoint Inc.
11/7/2012
N
Cerner Corp.
10/25/2012
Alexion Pharmaceuticals Inc.
10/24/2012 OW
Amgen Inc.
10/23/2012
N
Biogen Idec Inc.
10/25/2012
N
Celgene Corp.
10/25/2012 OW
Gilead Sciences Inc.
10/22/2012 OW
Abbott Laboratories
10/17/2012
N
Allergan Inc.
10/30/2012
N
Bristol-Myers Squibb Co.
10/24/2012
N
Forest Laboratories Inc.
10/16/2012
N
Hospira Inc.
11/7/2012
N
Johnson & Johnson
10/16/2012 OW
Eli Lilly & Co.
10/24/2012
N
Mkt. Cap.
(mm)
$6,450
$10,938
$14,003
$9,912
$13,893
$14,063
$5,725
$10,364
$51,020
$12,056
$8,866
$21,014
$3,800
$10,066
$2,488
$58,978
$20,012
$12,881
$21,509
$65,833
$34,812
$33,375
$51,167
$110,434
$28,198
$55,844
$9,671
$5,374
$188,085
$58,288
Fiscal
Year
Ending
9/28/12
12/31/12
12/31/12
9/28/12
6/28/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
3/29/13
4/30/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
3/29/13
12/31/12
12/31/12
12/31/12
44
Price Performance

Price
High
Low
$58.26
$71.95
$52.90
$62.61
$69.00
$47.00
$41.89
$51.14
$34.58
$39.39
$42.32
$35.48
$40.80
$46.23
$36.91
$48.77
$49.89
$39.01
$42.77
$42.93
$27.50
$109.56 $110.38
$61.49
$62.93
$66.06
$38.10
$74.55
$96.46
$59.92
$92.45
$95.30
$78.00
$89.04
$97.23
$70.82
$34.44
$36.42
$27.48
$63.41
$64.87
$46.70
$23.88
$26.96
$16.20
$57.11
$60.75
$42.86
$61.54
$74.73
$52.52
$75.25
$88.32
$55.69
$111.41 $119.54
$62.02
$84.65
$87.45
$54.59
$147.29 $157.18
$98.11
$77.36
$81.24
$58.53
$67.63
$70.39
$34.45
$70.37
$71.91
$51.53
$91.69
$97.09
$78.42
$33.26
$36.34
$30.10
$36.40
$37.70
$28.47
$32.55
$39.30
$26.92
$68.22
$69.75
$61.05
$50.23
$53.55
$35.46
3Q12 EPS Analysis
YTD %
Change
-13%
17%
-1%
6%
0%
16%
41%
45%
41%
-15%
8%
14%
17%
9%
16%
13%
-7%
23%
56%
32%
34%
14%
65%
25%
5%
-6%
20%
7%
4%
21%
3Q11
EPS (a)
$0.95
$1.04
$1.40
$0.61
$0.73
$1.20
$0.82
$1.45
$0.79
$2.67
$1.61
$1.63
$0.43
$1.18
$0.08
$1.17
$1.77
$0.48
$0.37
$1.40
$1.61
$1.02
$1.02
$1.18
$0.92
$0.61
$0.91
$0.66
$1.24
$1.13
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$1.03
$1.13
$1.34
$0.68
$0.79
$1.36
$0.72
$1.56
$0.99
$2.05
$1.74
$1.78
$0.48
$1.18
$0.34
$1.31
$1.85
$0.59
$0.47
$1.47
$1.59
$1.26
$0.94
$1.28
$1.04
$0.42
$0.02
$0.45
$1.21
$0.82
Outlook
YTD %
Change in
NTM
EPS Est
1%
8%
9%
10%
6%
7%
-2%
8%
20%
-3%
6%
11%
8%
5%
31%
16%
2%
21%
44%
18%
14%
20%
3%
6%
10%
-7%
-34%
-7%
3%
3%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
76%
18%
76%
0%
71%
18%
88%
0%
88%
6%
65%
35%
76%
18%
82%
6%
47%
35%
76%
18%
65%
24%
82%
12%
24%
65%
71%
12%
53%
29%
82%
6%
82%
18%
65%
0%
100%
0%
76%
18%
76%
24%
59%
24%
65%
29%
82%
0%
65%
6%
71%
18%
76%
18%
76%
18%
88%
6%
88%
0%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
MRK
MYL
PRGO
PFE
WPI
Life Sciences Tools & Services A
LIFE
PKI
TMO
WAT
Commercial Banks
BBT
CMA
FITB
FHN
HBAN
KEY
MTB
PNC
RF
STI
USB
WFC
ZION
HCBK
PBCT
Diversified Financial Services BAC
C
CME
ICE
JPM
Reporting JPM
Company Name
Date Rating
Merck & Co Inc
10/26/2012 OW
Mylan Inc.
10/25/2012 OW
Perrigo Co.
11/7/2012
N
Pfizer Inc.
10/30/2012 OW
Watson Pharmaceuticals Inc.
10/29/2012 OW
Agilent Technologies Inc.
11/19/2012 OW
Life Technologies Corp.
10/29/2012
N
PerkinElmer Inc.
10/25/2012 OW
Thermo Fisher Scientific Inc.
10/24/2012
N
Waters Corp.
10/23/2012 OW
BB&T Corp.
10/18/2012
N
Comerica Inc.
10/17/2012 OW
Fifth Third Bancorp
10/18/2012
N
First Horizon National Corp.
10/19/2012 OW
Huntington Bancshares Inc.
10/18/2012
N
KeyCorp
10/18/2012 OW
M&T Bank Corp.
10/17/2012
PNC Financial Services Group Inc.10/16/2012 OW
Regions Financial Corp.
10/23/2012
N
SunTrust Banks Inc.
10/22/2012 OW
U.S. Bancorp
10/17/2012 OW
Wells Fargo & Co.
10/12/2012 OW
Zions Bancorporation
10/22/2012 OW
Hudson City Bancorp Inc.
10/22/2012
People's United Financial Inc.
10/18/2012
N
Bank of America Corp.
10/17/2012 OW
Citigroup Inc.
10/15/2012
N
CME Group Inc. Cl A
10/25/2012 UW
IntercontinentalExchange Inc.
11/5/2012 OW
JPMorgan Chase & Co.
10/12/2012
Mkt. Cap.
(mm)
$138,881
$9,717
$10,990
$187,932
$11,147
$13,035
$8,518
$3,353
$21,352
$7,048
$23,197
$6,047
$14,537
$2,416
$6,077
$8,104
$12,505
$34,173
$10,671
$15,971
$65,577
$186,091
$4,025
$4,325
$4,278
$99,206
$103,047
$18,927
$9,363
$158,674
Fiscal
Year
Ending
12/31/12
12/31/12
6/28/13
12/31/12
12/31/12
10/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$45.60
$46.54
$31.82
$23.94
$24.88
$17.02
$117.14 $120.78
$87.01
$25.16
$25.59
$18.15
$87.33
$88.33
$55.00
$37.41
$46.28
$31.89
$48.59
$50.99
$36.07
$29.39
$30.92
$17.45
$58.41
$61.72
$43.06
$80.39
$94.47
$70.88
$33.18
$34.37
$21.03
$31.25
$34.00
$22.69
$15.82
$16.16
$10.58
$9.71
$10.99
$6.20
$7.08
$7.25
$4.66
$8.59
$9.12
$6.21
$98.63
$98.99
$67.23
$64.55
$67.89
$48.80
$7.55
$7.73
$3.42
$29.66
$30.79
$15.79
$34.60
$35.46
$23.54
$35.23
$36.60
$23.19
$21.86
$22.81
$14.52
$8.19
$8.23
$5.09
$12.18
$13.79
$11.20
$9.21
$10.10
$4.92
$35.14
$38.40
$23.30
$56.92
$60.92
$44.94
$128.68 $142.75 $110.67
$41.77
$46.49
$28.28
3Q12 EPS Analysis
YTD %
Change
21%
12%
20%
16%
45%
7%
25%
47%
30%
9%
32%
21%
24%
21%
29%
12%
29%
12%
76%
68%
28%
28%
34%
31%
-5%
66%
34%
17%
7%
26%
3Q11
EPS (a)
$0.94
$0.55
$1.10
$0.62
$1.09
$0.84
$0.94
$0.41
$1.07
$1.14
$0.52
$0.51
$0.40
$0.14
$0.16
$0.22
$1.32
$1.55
$0.08
$0.39
$0.64
$0.72
$0.35
$0.17
$0.15
$0.56
$1.23
$0.95
$1.87
$1.02
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.92
$0.77
$1.24
$0.53
$1.29
$0.81
$0.89
$0.44
$1.16
$1.18
$0.71
$0.65
$0.38
$0.19
$0.17
$0.21
$1.85
$1.62
$0.21
$1.79
$0.74
$0.87
$0.33
$0.14
$0.19
-$0.07
$0.96
$0.70
$1.73
$1.21
Outlook
YTD %
Change in
NTM
EPS Est
-4%
14%
14%
0%
33%
6%
3%
17%
11%
1%
27%
22%
13%
12%
9%
13%
11%
7%
65%
50%
14%
12%
4%
-13%
-3%
-16%
2%
-10%
8%
6%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
76%
12%
82%
18%
82%
18%
94%
6%
94%
0%
59%
35%
82%
18%
94%
6%
82%
18%
76%
18%
65%
35%
59%
41%
65%
35%
35%
65%
47%
41%
59%
35%
59%
41%
71%
29%
47%
41%
71%
29%
65%
29%
76%
18%
41%
59%
47%
29%
12%
47%
41%
59%
41%
59%
53%
35%
71%
24%
65%
35%
45

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505

Company Stats
Industry
Consumer Finance
Capital Markets
Insurance
Ticker
LUK
MCO
NDAQ
NYX
AXP
COF
DFS
SLM
AMP
BK
BLK
ETFC
FII
BEN
GS
IVZ
LM
MS
NTRS
TROW
SCHW
STT
ACE
AFL
ALL
AIG
AON
AIZ
BRK.B
CB
Company Name
Leucadia National Corp.
Moody 's Corp.
NASDAQ OMX Group Inc.
NYSE Euronext
American Express Co.
Capital One Financial Corp.
Discov er Financial Services
SLM Corp.
Ameriprise Financial Inc.
Bank of New York Mellon Corp.
BlackRock Inc.
E*TRADE Financial Corp.
Federated Investors Inc.
Franklin Resources Inc.
Goldman Sachs Group Inc.
INVESCO Ltd.
Legg Mason Inc.
Morgan Stanley
Northern Trust Corp.
T. Rowe Price Group Inc.
Charles Schwab Corp.
State Street Corp.
ACE Ltd.
AFLAC Inc.
Allstate Corp.
American International Group Inc.
AON Plc
Assurant Inc.
Berkshire Hathaway Inc. Cl B
Chubb Corp.
Reporting JPM
Date Rating
11/5/2012
10/26/2012
10/24/2012
11/6/2012 NR
10/17/2012
N
10/18/2012 OW
9/27/2012 OW
10/17/2012
10/24/2012
10/17/2012
N
10/17/2012
10/18/2012
10/25/2012 UW
10/25/2012
N
10/16/2012 UW
11/1/2012 OW
10/22/2012
10/18/2012 OW
10/17/2012
N
10/24/2012
N
10/11/2012
N
10/16/2012 UW
10/23/2012 OW
10/23/2012 OW
10/31/2012 OW
11/1/2012
N
10/22/2012 OW
10/24/2012
N
11/7/2012
10/25/2012 UW
Mkt. Cap.
(mm)
$5,415
$9,781
$3,932
$5,990
$65,718
$33,832
$19,908
$7,820
$11,965
$27,359
$30,866
$2,591
$2,148
$27,017
$57,568
$11,117
$3,329
$34,374
$11,256
$16,164
$16,525
$19,864
$26,293
$22,294
$19,673
$57,853
$17,055
$3,174
$96,395
$20,627
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
11/30/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
9/28/12
12/31/12
12/31/12
3/29/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
46
Price Performance

Price
High
Low
$22.14
$29.79
$19.58
$44.00
$46.26
$30.73
$23.56
$27.34
$21.03
$24.35
$31.25
$23.31
$57.97
$61.42
$44.45
$58.23
$60.05
$39.14
$39.44
$40.81
$21.98
$16.66
$16.94
$11.97
$56.78
$60.47
$39.93
$23.16
$24.95
$17.67
$187.36 $209.37 $146.53
$9.07
$11.69
$7.08
$20.63
$23.89
$14.36
$127.32 $131.24
$91.22
$120.08 $128.72
$86.90
$24.97
$26.94
$16.66
$24.65
$29.56
$22.36
$17.40
$21.19
$12.26
$46.80
$49.68
$34.87
$63.68
$66.00
$49.35
$12.97
$15.53
$10.67
$41.46
$47.20
$32.30
$77.54
$78.59
$61.27
$47.61
$50.33
$37.40
$40.57
$41.55
$24.10
$35.49
$36.08
$19.96
$52.90
$54.29
$43.37
$39.14
$44.54
$32.41
$88.73
$90.76
$72.55
$77.59
$78.55
$60.67
3Q12 EPS Analysis
YTD %
Change
-3%
31%
-4%
-7%
23%
38%
64%
24%
14%
16%
5%
14%
36%
33%
33%
24%
2%
15%
18%
12%
15%
3%
11%
10%
48%
53%
13%
-5%
16%
12%
Actual EPS
3Q12
3Q12 Change Rep. vs
3Q11 EPS Est. Actual in EPS Est. (c)EPS (a)
(b) EPS (c ) (c)/(a)
(b)
$0.57
$0.62
$0.67
$0.60
$0.71
$0.46
$1.03
$1.08
$1.77
$1.68
$1.18
$1.03
$1.21
3%
$0.18
$0.36
$0.54
$1.04
$1.37
$0.53
$0.54
$2.83
$3.29
$0.16
$0.08
$0.37
$0.41
$1.88
$2.24
-$0.84
$2.14
$0.42
$0.44
$0.39
$0.51
$1.14
$0.24
$0.71
$0.74
$0.71
$0.83
$0.18
$0.17
$0.96
$0.96
$2.22
$1.79
$1.66
$1.66
$0.16
$1.03
-$1.60
$0.79
$0.69
$0.89
$0.79
$1.35
$1.54
$1.38
$0.88
$1.42
Outlook
YTD %
Change in
NTM
EPS Est
13%
-1%
-18%
13%
12%
33%
20%
8%
-1%
13%
-27%
8%
9%
-6%
13%
-4%
-14%
9%
19%
-1%
5%
4%
2%
20%
40%
26%
7%
6%
1%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
88%
12%
59%
24%
47%
53%
76%
24%
59%
41%
83%
17%
47%
53%
53%
47%
35%
53%
53%
41%
29%
71%
41%
59%
59%
35%
44%
56%
35%
41%
35%
65%
25%
75%
35%
47%
47%
47%
41%
53%
65%
24%
76%
18%
71%
18%
35%
65%
47%
53%
41%
41%
47%
53%
57%
43%
53%
41%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
CINF
GNW
HIG
LNC
L
MMC
MET
PFG
PGR
PRU
TMK
TRV
UNM
XL
Real Estate Investment Trusts (REITs)
AMT
AIV
AVB
BXP
EQR
HCP
HCN
HST
KIM
PCL
PLD
PSA
SPG
VTR
VNO
WY
Reporting JPM
Company Name
Date Rating
Cincinnati Financial Corp.
10/25/2012
Genworth Financial Inc. Cl A
10/30/2012
N
Hartford Financial Services Group Inc.
11/1/2012
N
Lincoln National Corp.
11/1/2012
N
Loews Corp.
10/29/2012
Marsh & McLennan Cos.
10/29/2012 UW
MetLife Inc.
10/31/2012 OW
Principal Financial Group Inc.
10/25/2012 NR
Progressive Corp.
11/2/2012
N
Prudential Financial Inc.
11/7/2012 OW
Torchmark Corp.
10/24/2012
N
Travelers Cos. Inc.
10/18/2012
N
Unum Group
10/31/2012 OW
XL Group PLC
11/5/2012
N
American Tower Corp
10/29/2012 OW
Apartment Investment & Management11/1/2012
Co.
UW
AvalonBay Communities Inc.
10/24/2012
N
Boston Properties Inc.
10/23/2012 OW
Equity Residential
10/24/2012
N
HCP Inc.
10/30/2012
N
Health Care REIT Inc.
11/6/2012 OW
Host Hotels & Resorts Inc.
10/10/2012
N
Kimco Realty Corp.
10/30/2012 OW
Plum Creek Timber Company Inc. 10/29/2012
Prologis Inc.
10/23/2012 OW
Public Storage
11/1/2012 OW
Simon Property Group Inc.
10/25/2012 OW
Ventas Inc.
10/26/2012
Vornado Realty Trust
11/2/2012
N
Weyerhaeuser Co.
10/26/2012
Mkt. Cap.
(mm)
$6,255
$2,689
$9,161
$6,709
$16,437
$18,666
$36,828
$7,995
$13,372
$26,007
$4,853
$26,744
$5,477
$7,658
$28,669
$3,756
$13,056
$16,509
$16,959
$19,543
$15,180
$11,323
$8,241
$6,834
$16,045
$23,779
$47,320
$18,883
$14,672
$14,095
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$38.49
$40.22
$25.69
$5.47
$9.68
$4.06
$21.02
$23.29
$14.95
$24.03
$27.54
$15.50
$41.55
$42.86
$35.29
$34.30
$34.99
$27.09
$34.67
$39.55
$27.60
$27.09
$29.96
$21.42
$22.11
$23.41
$17.49
$56.05
$65.17
$44.47
$50.87
$53.15
$36.52
$69.40
$70.00
$49.52
$19.55
$25.00
$18.28
$25.05
$25.11
$18.65
$72.55
$75.62
$53.02
$25.81
$28.30
$20.17
$134.72 $151.23 $116.25
$109.50 $117.00
$87.00
$56.34
$65.72
$52.10
$45.50
$47.75
$35.32
$59.50
$62.80
$46.50
$15.67
$17.57
$10.93
$20.25
$21.16
$14.51
$42.31
$44.99
$34.22
$34.83
$37.58
$24.02
$138.60 $152.68 $110.27
$153.04 $164.17 $111.50
$63.93
$68.15
$48.26
$78.96
$88.50
$70.00
$26.21
$28.06
$15.40
3Q12 EPS Analysis
YTD %
Change
26%
-16%
29%
24%
10%
8%
11%
10%
13%
12%
17%
17%
-7%
27%
21%
13%
3%
10%
-1%
10%
9%
6%
25%
16%
22%
3%
19%
16%
3%
40%
3Q11
EPS (a)
$0.12
$0.21
$0.05
$1.00
$0.44
$0.24
$1.11
$0.61
$0.29
$1.07
$1.22
$0.79
$0.74
$0.28
-$0.04
-$0.12
$0.49
$0.48
$0.35
$0.41
$0.21
-$0.05
$0.09
$0.31
$0.12
$0.69
$0.93
$0.35
$0.27
$0.12
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.37
$0.21
$0.78
$1.01
$0.72
$0.38
$1.27
$0.48
$0.26
$1.66
$1.30
$1.49
$0.77
$0.46
$0.38
-$0.09
$0.73
$0.34
$0.27
$0.47
$0.33
-$0.02 -$0.05
- -$0.03
$0.06
$0.36
$0.01
$1.07
$0.78
$0.31
$0.36
$0.17
Outlook
YTD %
Change in
NTM
EPS Est
10%
-11%
1%
12%
9%
11%
9%
3%
-11%
9%
6%
12%
3%
4%
38%
Neg
24%
21%
30%
8%
10%
135%
-7%
4%
15%
20%
-8%
-21%
83%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
35%
65%
12%
88%
41%
59%
53%
47%
35%
65%
53%
29%
59%
41%
29%
47%
53%
47%
53%
47%
53%
29%
41%
53%
53%
29%
47%
53%
53%
35%
100%
0%
53%
47%
59%
41%
82%
18%
47%
47%
29%
71%
28%
67%
35%
59%
53%
29%
41%
41%
47%
53%
65%
35%
59%
35%
43%
57%
71%
24%
47
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
Real Estate Management & Development
CBG
Internet Software & Services AKAM
EBAY
GOOG
VRSN
YHOO
IT Services
ACN
ADP
CTSH
CSC
FIS
FISV
IBM
MA
PAYX
SAI
TDC
TSS
V
WU
Software
ADBE
ADSK
BMC
CA
CTXS
EA
INTU
MSFT
ORCL
RHT
Reporting JPM
Company Name
Date Rating
CBRE Group Inc
10/29/2012 OW
Akamai Technologies Inc.
10/24/2012
N
eBay Inc.
10/17/2012 OW
Google Inc. Cl A
10/18/2012 OW
VeriSign Inc.
10/25/2012
N
Yahoo! Inc.
10/22/2012
N
Accenture PLC
9/27/2012 OW
Automatic Data Processing Inc. 10/30/2012
N
Cognizant Technology Solutions Corp.
11/7/2012 OW
Computer Sciences Corp.
11/6/2012 UW
Fidelity National Information Services11/5/2012
Inc.
N
Fiserv Inc.
10/30/2012 OW
International Business Machines Corp.
10/16/2012 OW
MasterCard Inc. Cl A
10/31/2012 OW
Paychex Inc.
9/24/2012 UW
SAIC Inc.
12/3/2012 OW
Teradata Corp.
10/29/2012
Total System Services Inc.
10/23/2012
Visa Inc.
10/31/2012 OW
Western Union Co.
10/30/2012
N
Adobe Systems Inc.
9/19/2012
Autodesk Inc.
11/14/2012
N
BMC Software Inc.
10/31/2012
N
CA Inc.
10/25/2012 OW
Citrix Systems Inc.
10/24/2012 UW
Electronic Arts Inc.
10/29/2012
Intuit Inc.
11/12/2012 OW
Microsoft Corp.
10/18/2012
N
Oracle Corp.
9/20/2012 OW
Red Hat Inc.
9/24/2012 UW
Mkt. Cap.
(mm)
$6,056
$6,707
$60,258
$195,054
$7,456
$18,753
$44,150
$28,188
$20,708
$4,868
$9,174
$9,882
$234,635
$55,305
$11,907
$3,777
$12,261
$4,380
$72,479
$10,831
$15,599
$7,041
$6,691
$11,674
$12,844
$4,104
$17,616
$244,328
$147,367
$10,412
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
8/30/13
6/28/13
12/31/12
3/29/13
12/31/12
12/31/12
12/31/12
12/31/12
5/31/13
1/31/13
12/31/12
12/31/12
9/28/12
12/31/12
11/30/12
1/31/13
3/29/13
3/29/13
12/31/12
3/29/13
7/31/13
6/28/13
5/31/13
2/28/13
48
Price Performance

Price
High
Low
$18.45
$21.16
$13.82
$37.83
$40.32
$22.45
$46.76
$50.65
$28.15
$744.56 $774.38 $523.20
$47.68
$50.15
$29.37
$15.83
$16.79
$14.35
$69.55
$71.79
$51.08
$58.20
$59.96
$47.60
$69.36
$78.00
$53.92
$31.33
$34.74
$22.19
$31.14
$34.85
$22.53
$72.84
$75.24
$53.91
$205.82 $211.79 $176.17
$462.09 $483.00 $315.53
$32.76
$34.70
$27.11
$11.05
$14.20
$10.31
$72.72
$80.97
$43.77
$23.29
$25.06
$18.11
$137.42 $141.59
$87.40
$17.98
$19.82
$15.79
$31.51
$34.78
$25.39
$31.03
$42.69
$27.70
$41.96
$45.70
$31.62
$24.89
$28.00
$19.54
$68.70
$87.99
$55.94
$12.89
$26.13
$10.77
$59.64
$62.33
$48.42
$28.98
$32.95
$24.30
$30.58
$33.81
$24.91
$53.86
$62.75
$39.19
3Q12 EPS Analysis
YTD %
Change
21%
17%
54%
15%
33%
-2%
31%
8%
8%
32%
17%
24%
12%
24%
9%
-10%
50%
19%
35%
-2%
11%
2%
28%
23%
13%
-37%
13%
12%
19%
30%
3Q11
EPS (a)
$0.24
$0.34
$0.48
$9.72
$0.39
$0.23
$0.91
$0.61
$0.73
$0.85
$0.62
$1.16
$3.28
$5.63
$0.41
-$0.27
$0.59
$0.30
$1.27
$0.40
$0.55
$0.44
$0.87
$0.51
$0.64
$0.05
-$0.10
$0.68
$0.48
$0.29
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.33
$0.41
$0.55
$10.57
$0.49
$0.26
$0.88
$0.88
-3%
$0.00
$0.62
$0.87
$0.47
$0.62
$1.27
$3.61
$5.91
$0.41
$0.42
2%
$0.01
$0.35
$0.67
$0.32
$1.49
$0.45
$0.58
$0.58
5%
$0.00
$0.44
$0.88
$0.59
$0.66
$0.10
-$0.06
$0.56
$0.53
$0.53
10%
$0.00
$0.29
$0.28
-3%
-$0.01
Outlook
YTD %
Change in
NTM
EPS Est
13%
14%
15%
10%
18%
28%
9%
5%
14%
-34%
8%
11%
11%
15%
4%
1%
21%
11%
19%
10%
-4%
6%
6%
13%
12%
2%
12%
7%
8%
16%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
47%
47%
65%
29%
94%
0%
65%
29%
47%
41%
65%
6%
83%
6%
53%
12%
82%
0%
65%
24%
59%
18%
53%
29%
100%
0%
94%
6%
50%
11%
59%
35%
100%
0%
41%
12%
100%
0%
71%
12%
89%
0%
71%
18%
65%
29%
82%
12%
88%
6%
65%
29%
59%
41%
59%
24%
78%
11%
83%
6%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
Company Name
CRM
salesforce.com inc.
SYMC Symantec Corp.
Communications Equipment CSCO Cisco Systems Inc.
FFIV
F5 Networks Inc.
HRS
Harris Corp.
JDSU
JDS Uniphase Corp.
JNPR
Juniper Networks Inc.
MSI
Motorola Solutions Inc.
QCOM QUALCOMM Inc.
AAPL
Apple Inc.
DELL
Dell Inc.
EMC
EMC Corp.
HPQ
Hewlett-Packard Co.
NTAP
NetApp Inc.
SNDK SanDisk Corp.
STX
Seagate Technology Inc.
WDC
Western Digital Corp.
Electronic Equipment Instruments
APH
& Components
Amphenol Corp. Cl A
GLW
Corning Inc.
FLIR
FLIR Systems Inc
JBL
Jabil Circuit Inc.
MOLX Molex Inc.
TEL
TE Connectivity Ltd.
Office Electronics
XRX
Xerox Corp.
Semiconductors & Semiconductor
AMD
Equipment
Advanced Micro Devices Inc.
ALTR
Altera Corp.
ADI
Analog Devices Inc.
AMAT Applied Materials Inc.
BRCM Broadcom Corp.
FSLR
First Solar Inc.
Reporting JPM
Date Rating
11/20/2012
N
10/24/2012 OW
11/13/2012 OW
10/24/2012
N
10/29/2012
N
11/1/2012
10/23/2012
N
10/24/2012
N
11/7/2012 OW
10/25/2012 OW
11/15/2012 OW
10/24/2012 OW
11/20/2012 UW
11/14/2012 OW
10/18/2012
N
10/30/2012
N
10/22/2012
N
10/17/2012
10/24/2012
N
10/25/2012 UW
9/25/2012
10/23/2012
11/5/2012
10/23/2012 UW
10/18/2012
N
10/23/2012
N
11/27/2012 OW
11/15/2012
N
10/23/2012 OW
10/29/2012 UW
Mkt. Cap.
(mm)
$20,872
$12,410
$97,088
$7,806
$5,729
$2,404
$8,610
$14,301
$101,826
$600,793
$16,357
$54,231
$27,880
$10,649
$10,280
$11,068
$8,918
$9,394
$19,283
$2,959
$3,493
$2,460
$14,131
$9,242
$2,229
$10,257
$11,412
$13,489
$16,690
$1,830
Fiscal
Year
Ending
1/31/13
3/29/13
7/31/13
9/28/12
6/28/13
6/28/13
12/31/12
12/31/12
9/28/12
9/28/12
1/31/13
12/31/12
10/31/12
4/30/13
12/31/12
6/28/13
6/28/13
12/31/12
12/31/12
12/31/12
8/30/13
6/28/13
9/28/12
12/31/12
12/31/12
12/31/12
10/31/12
10/31/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$150.16 $164.75
$94.09
$17.68
$19.54
$13.06
$18.31
$21.30
$14.96
$98.77 $139.46
$84.79
$50.86
$52.23
$33.24
$10.46
$15.17
$8.47
$16.35
$25.61
$14.01
$49.95
$52.78
$43.36
$59.78
$68.87
$49.78
$640.91 $705.07 $363.32
$9.43
$18.36
$9.34
$25.84
$30.00
$21.25
$14.18
$30.00
$14.02
$29.31
$46.80
$27.79
$42.56
$53.46
$30.99
$28.23
$35.71
$10.86
$36.37
$45.94
$22.64
$58.35
$63.70
$40.99
$12.95
$15.75
$10.62
$19.59
$27.92
$17.99
$17.00
$27.40
$16.89
$25.74
$28.46
$21.15
$33.03
$37.69
$29.39
$7.07
$8.84
$6.36
$3.15
$8.35
$3.09
$32.06
$41.63
$29.67
$38.18
$41.79
$32.18
$10.90
$13.94
$9.97
$32.92
$39.66
$27.59
$21.04
$61.68
$11.43
3Q12 EPS Analysis
YTD %
Change
48%
13%
1%
-7%
41%
0%
-20%
8%
9%
58%
-36%
20%
-45%
-19%
-14%
72%
18%
29%
0%
-22%
-14%
8%
7%
-11%
-42%
-14%
7%
2%
12%
-38%
3Q11
EPS (a)
$0.34
$0.39
$0.43
$1.06
$1.06
$0.18
$0.28
$0.65
$0.80
$7.05
$0.54
$0.37
$1.17
$0.63
$1.20
$0.34
$1.10
$0.81
$0.48
$0.40
$0.62
$0.47
$0.89
$0.26
$0.15
$0.57
$0.60
$0.21
$0.82
$2.25
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$0.32
$0.37
$0.46
$1.18
$1.12
$0.12
$0.17
$0.73
$0.82
$8.91
$0.40
$0.42
$1.15
$0.48
$0.33
$1.71
$2.31
$0.89
$0.32
$0.36
$0.58
$0.54
-13%
-$0.04
$0.40
$0.75
$0.25
$0.01
$0.46
$0.57
$0.03
$0.77
$1.02
Outlook
YTD %
Change in
NTM
EPS Est
16%
-2%
8%
14%
-2%
6%
-26%
19%
12%
51%
-12%
13%
-13%
-13%
-43%
110%
105%
17%
-18%
-8%
-3%
-6%
0%
-2%
-47%
0%
7%
-9%
13%
-43%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
76%
18%
76%
18%
100%
0%
88%
6%
82%
12%
71%
18%
59%
12%
94%
6%
82%
12%
94%
6%
53%
41%
71%
12%
65%
29%
71%
24%
76%
24%
65%
29%
82%
12%
88%
6%
53%
35%
59%
24%
67%
22%
53%
41%
76%
24%
65%
18%
65%
35%
65%
24%
65%
35%
53%
35%
94%
6%
76%
24%
49
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Industry
Ticker
INTC
KLAC
LRCX
LLTC
LSI
MCHP
MU
NVDA
TER
TXN
XLNX
Diversified Telecommunication Services
T
CTL
FTR
VZ
WIN
Wireless Telecommunication Services
CCI
PCS
S
Electric Utilities
AEP
DUK
EIX
ETR
EXC
FE
NEE
NU
POM
PNW
PPL
Company Name
Intel Corp.
KLA-Tencor Corp.
Lam Research Corp.
Linear Technology Corp.
LSI Corp.
Microchip Technology Inc.
Micron Technology Inc.
NVIDIA Corp.
Teradyne Inc.
Texas Instruments Incorporated
Xilinx Inc.
AT&T Inc.
CenturyLink Inc.
Frontier Communications Corp.
Verizon Communications Inc.
Windstream Corp.
Crown Castle International Corp.
MetroPCS Communications Inc.
Sprint Nex tel Corp.
American Electric Power Co. Inc.
Duke Energy Corp.
Edison International
Entergy Corp.
Exelon Corp.
FirstEnergy Corp.
Nex tEra Energy Inc
Northeast Utilities
Pepco Holdings Inc.
Pinnacle West Capital Corp.
PPL Corp.
Reporting JPM
Date Rating
10/16/2012
N
10/25/2012 UW
10/17/2012 UW
10/16/2012 UW
10/24/2012
N
11/8/2012
N
9/27/2012
N
11/8/2012
N
10/22/2012
10/22/2012 OW
10/17/2012 OW
10/24/2012 OW
11/7/2012 OW
11/6/2012
N
10/18/2012
N
11/8/2012
N
10/24/2012
N
10/30/2012 NR
10/25/2012 OW
10/22/2012
N
11/8/2012 NR
11/1/2012
10/30/2012 NR
10/31/2012
N
11/8/2012
10/24/2012 OW
10/29/2012
11/6/2012
N
11/1/2012
11/8/2012
Mkt. Cap.
(mm)
$108,865
$7,597
$5,655
$7,443
$3,697
$6,208
$5,861
$7,849
$2,531
$30,913
$8,560
$212,991
$24,644
$4,893
$130,422
$5,933
$18,968
$4,424
$15,122
$21,375
$45,601
$15,238
$12,464
$30,985
$18,665
$29,547
$12,252
$4,395
$5,793
$17,016
Fiscal
Year
Ending
12/31/12
6/28/13
6/28/13
6/28/13
12/31/12
3/29/13
8/30/13
1/31/13
12/31/12
12/31/12
3/29/13
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
50
Price Performance

Price
High
Low
$21.76
$29.27
$21.70
$45.55
$55.43
$41.57
$31.89
$45.48
$31.17
$31.61
$34.50
$28.28
$6.63
$9.20
$5.06
$32.05
$38.88
$30.23
$5.76
$9.16
$5.06
$12.67
$16.90
$11.63
$13.49
$18.01
$11.68
$27.17
$34.24
$26.06
$32.65
$37.74
$28.97
$36.92
$38.58
$27.41
$39.58
$43.43
$33.17
$4.90
$6.40
$3.06
$45.78
$48.77
$35.17
$10.09
$12.60
$9.00
$64.73
$67.61
$39.28
$12.04
$14.51
$5.53
$5.04
$5.76
$2.10
$44.08
$44.84
$36.97
$64.78
$71.13
$58.74
$46.77
$47.52
$37.48
$70.29
$74.50
$62.97
$36.30
$45.45
$34.54
$44.63
$51.14
$40.37
$69.89
$72.22
$52.32
$39.04
$40.86
$32.13
$19.20
$20.64
$18.14
$52.88
$54.66
$43.53
$29.30
$30.27
$26.68
3Q12 EPS Analysis
YTD %
Change
-10%
-6%
-14%
5%
11%
-13%
-8%
-9%
-1%
-7%
2%
22%
6%
-5%
14%
-14%
44%
39%
115%
7%
-2%
13%
-4%
-16%
1%
15%
8%
-5%
10%
0%
3Q11
EPS (a)
$0.65
$1.17
$0.63
$0.49
$0.14
$0.46
-$0.14
$0.29
$0.34
$0.61
$0.47
$0.61
$0.34
$0.05
$0.56
$0.19
$0.16
$0.19
-$0.10
$1.17
$1.50
$1.30
$3.53
$1.12
$1.34
$1.31
$0.51
$0.35
$2.24
$0.76
Outlook
Actual EPS
YTD %
3Q12
3Q12 Change Rep. vs Change in
EPS Est. Actual in EPS Est. (c)NTM
(b) EPS (c ) (c)/(a)
(b)
EPS Est
$0.50
-11%
$0.89
14%
$0.41
3%
$0.46
8%
$0.17
55%
$0.50
17%
-$0.22 -$0.24
- -$0.02 Pos to Neg
$0.30
-4%
$0.46
57%
$0.46
-6%
$0.41
1%
$0.61
3%
$0.59
-4%
$0.07
3%
$0.65
9%
$0.13
-31%
$0.16
37%
$0.26
-15%
-$0.43
Neg
$1.04
-2%
$1.44
3%
$1.08
-1%
$2.17
-9%
$0.72
-13%
$1.15
-6%
$1.38
7%
$0.67
3%
$0.42
1%
$2.29
5%
$0.69
-2%

% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
76%
24%
76%
24%
76%
24%
82%
12%
71%
6%
53%
18%
33%
67%
65%
29%
76%
24%
71%
24%
76%
18%
41%
41%
65%
29%
29%
65%
35%
47%
0%
82%
47%
41%
53%
47%
41%
53%
59%
41%
76%
24%
47%
41%
53%
47%
76%
18%
47%
47%
47%
35%
53%
47%
47%
53%
47%
53%
71%
29%
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012

Company Stats
Reporting JPM
Ticker
Company Name
Date Rating
SO
Southern Co.
10/31/2012
XEL
Xcel Energy Inc.
10/25/2012
N
Gas Utilities
GAS
AGL Resources Inc.
11/1/2012
OKE
ONEOK Inc.
10/30/2012 OW
Multi-Utilities
AEE
Ameren Corp.
11/9/2012
CNP
CenterPoint Energy Inc.
11/7/2012 OW
CMS
CMS Energy Corp.
10/25/2012
ED
Consolidated Edison Inc.
11/5/2012
D
Dominion Resources Inc. (Virginia)10/25/2012
N
DTE
DTE Energy Co.
10/24/2012
TEG
Integrys Energy Group Inc.
11/5/2012
NI
NiSource Inc.
10/22/2012
PCG
PG&E Corp.
11/6/2012
N
PEG
Public Service Enterprise Group Inc.11/1/2012
SCG
SCANA Corp.
10/31/2012
SRE
Sempra Energy
11/1/2012
N
TE
TECO Energy Inc.
10/29/2012
WEC
Wisconsin Energy Corp.
10/31/2012
Independent Power Producers &AES
Energy Traders
AES Corp.
11/7/2012
NRG
NRG Energy Inc.
10/29/2012
Industry
Mkt. Cap.
(mm)
$40,206
$13,510
$4,797
$9,855
$7,937
$9,099
$6,288
$17,594
$30,514
$10,407
$4,329
$7,279
$18,393
$16,431
$6,377
$15,992
$3,810
$8,792
$7,959
$5,255
Fiscal
Year
Ending
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
12/31/12
Price Performance

Price
High
Low
$45.96
$48.59
$42.11
$27.71
$29.92
$24.50
$40.82
$43.69
$36.59
$48.06
$49.79
$34.54
$32.71
$35.30
$29.44
$21.29
$21.71
$18.07
$23.73
$24.98
$19.57
$60.07
$65.98
$56.07
$53.22
$55.62
$48.87
$60.59
$62.56
$49.06
$55.29
$61.92
$48.19
$25.55
$26.15
$21.17
$43.13
$47.03
$36.84
$32.48
$34.96
$28.92
$48.57
$50.34
$40.33
$66.76
$72.32
$50.53
$17.59
$19.41
$16.90
$38.15
$41.48
$31.18
$10.64
$14.01
$10.14
$23.02
$23.50
$14.29
3Q12 EPS Analysis
YTD %
Change
-1%
0%
-3%
11%
-1%
6%
7%
-3%
0%
11%
2%
7%
5%
-2%
8%
21%
-8%
9%
-10%
27%
3Q11
EPS (a)
$1.07
$0.69
$0.02
$0.29
$1.57
$0.37
$0.53
$1.33
$0.95
$1.07
$0.43
$0.11
$1.08
$0.83
$0.81
$1.22
$0.42
$0.55
$0.27
$0.43
Actual EPS
3Q12
3Q12 Change Rep. vs
(b)
$1.14
$0.71
$0.22
$0.33
$1.36
$0.33
$0.60
$1.37
$0.98
$1.13
$0.36
$0.13
$0.86
$0.71
$0.89
$0.96
$0.38
$0.57
$0.34
$0.43
Outlook
YTD %
Change in
NTM
EPS Est
3%
3%
-6%
9%
-13%
4%
5%
3%
3%
6%
-5%
7%
-7%
-4%
4%
-4%
-15%
5%
-2%
-49%
% of
% of
Quarters Quarters
Beating Missing
Estimate Estimate
59%
24%
41%
47%
53%
41%
59%
41%
35%
65%
47%
53%
53%
47%
41%
59%
47%
47%
71%
29%
50%
50%
47%
47%
53%
41%
59%
29%
47%
47%
65%
35%
41%
53%
65%
24%
36%
57%
59%
35%
51
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
US Equity Strategy Recent Publications

US Strategy
Special Reports
Only 2 of 7 indicators at '07/10/11/early 12 peak triggered. Remain constructive and

favor high-beta Cyclicals. 10/4/12
MARKETING DECK: We See a Melt-Up Into Election Day: S&P 500 to EXCEED 1495
Short-TermMarkets Base Case is Obama Victory 9/20/12
Weak 2H September Leads to Positive October; Focus on High-Beta Cyclicals: 47 Ideas

9/27/12
SLIDES: Housing Food Chain IV: 10 Reasons We Are Early in Housing Up-Cycle, 18
ideas 8/29/12
2012 Beta chase expected to exceed 11%-15% seen 09, 10, 11. 47 ideas 9/19/12
MARKETING DECK: The Case for a Secular Bull Market: Why we see equities as best
relative value 4/13/12
Raising short-term target to 1495 (from 1475). Still cycle into Cyclicals. 27 ideas
9/13/12
Stay constructive on S&P 500 9/6/12
Global CC: Equity Markets Rally into Close Elections 9/4/12
Reasons to Say Constructive. HY and Positioning Data 8/31/12
Raising Short-Term S&P 500 Target to 1475 by Early Nov. Maintain YE @ 1430. Cycle
into Cyclicals Now. 12 Ideas 8/17/12
US Fiscal Cliff: Election Outcomes Affect Policy Outcomes. 15% Chance of Falling Off
the Cliff 8/7/12
SLIDES: Portfolio Strategy 2012 Update: Contrarian Optimism 1/18/12

SLIDES: Portfolio Strategy 2012 Outlook: Eight Reasons to Be Contrarian in 2012; YE
Target 1430 12/10/11
3PointsTV Video
(Click the links below for 3PointsTV and to view the required video, click on the
PLAYLIST option in the video screen.)
Weak ends to Sept favor positive Oct. Stick with Cyclicals 9/28/12
We see a beta chase into YE larger than '09, '10 or '11 9/21/12
Surprising Upturn in Eco Surprise Indices Positive for Cyclicals 8/3/12
Raising S/T target to 1495 (vs 1475). Stay Cyclical 9/14/12
Only 13% of Active Managers Outperforming, Worst YTD in 15 Years; Contrarian Buy
Signals from Mutual Fund and HF Beta 7/27/12
As S&P 500 makes new 2012 highs, stay constructive 9/7/12
Corporates AGAIN Are the Incremental Buyer of Equities. Buybacks Soared in June to
$67 Billion. 7/23/12
See Energy Gaining in 2H; 14 Ideas 7/20/12
2Q12 S&P 500 EPS: Poor Visibility + Pre-announce = NERVES: 2Q tracking to $26.
$105 EPS on tracklooks a lot like 4Q11 and 1Q12. Stay constructive and patient
7/13/12
6 reasons we would be buyers of the S&P at 1275-1325, despite weak June labor
report 7/9/2012
52
We see 3-5 yr upcycle in US housing/construction 8/30/12

Raising target on S&P 500 and focus on Cyclicals 8/17/12
Economic momentum is (surprise) improving 8/3/12
Case for a melt-up? 7/27/12
Stealth energy rally forecast to continue into YE 7/20/12
2Q12 EPS should help stocks, despite fears of disappointment 7/13/12
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
53

11 October 2012
Thomas J Lee, CFA

(1-212) 622-6505
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NiSource, Inc. (NI, NI US) Price Chart
40
N $14
N $17
30
UW
N $10N $11
N $16N $15
N $18
Price($)
20
10
0
Oct
06
Jul
07
Apr
08
Jan
09
Oct
09
Jul
10
Date
Rating Share Price

($)
Price Target
($)
06-Nov-06
UW
23.63
--
30-Jul-07
19.23
--
09-Feb-09
10.79
10.00
22-May-09 N
10.48
11.00
05-Aug-09
12.97
14.00
25-Jan-10
14.67
16.00
05-May-10 N
16.60
15.00
05-Aug-10
16.72
17.00
02-Feb-11
18.35
18.00
05-May-11 N
19.55
19.00
N $19
Apr
11
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Break in coverage Nov 06, 2006 - Jul 30, 2007.
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
54
Thomas J Lee, CFA

(1-212) 622-6505

11 October 2012
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IB clients*
JPMS Equity Research Coverage
IB clients*
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69%
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(1-212) 622-6505

11 October 2012
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North America Equity Research

S&P 500 3Q EPS: Bad Does Not

Global PMIs are inching upwards, a signal supported by steepening yield

1Q12 2Q12 3Q12 QTD YTD

-3% 6% -1% 14%

Cycl (Mat, IT, Disc, Ind) 14%

-5% 5% -1% 13%

Near- Cycl(Ener, Fin)

Def (Stpl, HC, Tel, Util)

Short-term Target (by election day):

Source: J.P. Morgan and Bloomberg.

See page 54 for analyst certification and important disclosures.

Thomas J Lee, CFA

North America Equity Research

North America Equity Research

Thomas J Lee, CFA

The problem in 3Q is 4 sectors: Energy

1Q11A 2Q11A 3Q11A 4Q11A 2011A

1Q12A 2Q12A 3Q12E 4Q12E 2012E

$9.63 $10.67 $10.44 $11.34 $42.08

$10.81 $11.33 $10.49 $12.50 $45.13

Total B/U EPS

$23.50 $24.14 $25.65 $24.55 $97.84

$25.60 $25.84 $25.22 $27.10 $103.76

$26.00 $27.56 $105.00

Source: J.P. Morgan.

Thomas J Lee, CFA

North America Equity Research

#1: Global growth poised to move higher,

Source: J.P. Morgan, from Global Data Watchdated 10/5/12.

Industrial and Technology EPS should start improving

Figure 4: Industrials EPS and Global PMI (% chg y/y)

Technology y/y chg

Industrials y/y chg

Source: J.P. Morgan and Bloomberg.

Global PMI 1-yr % chg

Global PMI 1-yr % chg

Source: J.P. Morgan and Bloomberg.

North America Equity Research

Thomas J Lee, CFA

30Y vs 10Y yield curve steepening supports further gains in

Figure 5: Yield Curves Are Steepening... 30Y vs 10Y Spreads

Chg in PMI 6m chg

Source: J.P. Morgan and Bloomberg.

Chg in 30Y vs 10Y (y/y delta)

6-month change in ISM (Manufacturing, SA)

30Y vs 10Y spread

Delta in Yield Curve (1-yr change in 30Y less 10Y)

Source: J.P. Morgan and Bloomberg.

North America Equity Research

Thomas J Lee, CFA

#2: Industrial metals recovering, positive

Energy and Basic Materials EPS closely track moves in

DJUBSIN (left axis)

Source: J.P. Morgan and Bloomberg.

Source: J.P. Morgan and Bloomberg.

DJUBSIN - Industrial Metals

DJUBSIN - Industrial Metals

DJUBSIN (left axis)

Figure 8: DJUBSIN vs Materials EPS

Thomas J Lee, CFA

North America Equity Research

#3: 2012 US wealth effect $5T, largest

Figure 10: US Wealth Effect (2000 to 2012)