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Exhibit 4: NOPAT Margin and Invested Capital Turns Analysis.
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Bookings in the qtr were only $3bn, quite weak (SSB $5.8bn), and we believe the last two weeks of the qtr had weak bkngs, as clients may have been concerned about EDS' pre-announcement and aftershocks.
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� We expect this to take a week of production out of Q3 and two weeks out of Q4 production and cost $0.20 earnings in 2008.
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Telecom Services/Wireline / Rated: Market Weight August 19, 2003.
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These factors are driving the semiconductor industry to firmer pricing which, in turn, is making it easier for the industry to justify higher capital spending.
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against a tough 14% prior year comparison and a negative 3% impact from a calendar shift.
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For the CPG biz, we forecast a 12.8% YoY growth (a slowdown from 27.9% YoY in C06E), as we believe that with a strong product refresh from INTC coming along in C06, the going will get tougher for AMD in C07.
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STRONG REVENUE GROWTH: Sales increased 48% over last year to $800.7 million, driven by robust demand for TITAN and CableSpan products.
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Adjusting for fourth quarter 1998 having 13 accounting weeks, compared with 14 in 1997, net premiums written grew 11%.
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Normalized operating cash flow was strong at $1.5 billion ($1.7 billion GAAP), well above our forecast of $1.0 billion, and equating to 1.6 times net income, suggesting good earnings quality.
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AmSouth Reports Q4 EPS of $0.49, up 10% and a penny ahead of estimate.
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opportunities that exist for the U.S. retirement market are present in many other international markets as aging populations and underfunded state pension plans provide opportunities for providers of private pensions products.
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$93 million of debt matures in 2009, $393 million (excluding a $500 million term loan that can be extended 2 years) matures in 2010, and $250 million is left to spend on the development pipeline at year end.
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The company's latest cost-saving initiative includes signing up more than 1 million customers via a paperless option.
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There are significant enhancements planned for the product over the next 12-18 months through several point releases including improved performance capabilities, new front end architecture and cross project functionality.
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The really concerning feature of this housing depression compared to the last is that the negative multiplier of a lack of MEW scarcely existed back in the 1990s..
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Other Aflac-Japan topics of interest from the meeting included an update on Japan's Financial Services Agency's ("FSA") potential decision to allow Japan banks to sell a complete range of insurance products likely in 2007 or 2008.
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Allocated capital to its international operations declined 59% from $1.0 billion at September 30, 1998, to $416 million at year end 1998.
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Revenue enhancements are estimated at $194 million pre-tax by 1999 primarily from additional opportunities in capital markets and capital management activities.
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Managing growth and profitability in the PC business.
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Lower capex at Time Warner Cable and the ISP division was offset by higher capital lease payments, composed of network equipment used by the ISP.
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Based on solid performance at Cingular, we are raising our 2005 EPS estimate to $1.75 from $1.68, our 2006 estimate to $1.95 from $1.93 and our price target to $27 from $26.
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The cash flow from this line--equal to $2.6 billion--was used to build other lines.
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In the second half of the 1990s the radio industry experienced tremendous advertising growth.
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Moreover, we believe the valuation no longer looks expensive.
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Yahoo! can also bolster revenue growth with share gains and price increases in its Yellow Pages business.
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We expect continued strength at the network, driven by high ratings for the CSI franchise, Survivor, and other programs that likely have several more seasons left.
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Foundry orders are expected to be up slightly in the first quarter, as are orders from flash and logic customers.
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FPL Group had invested approximately $2.3 billion in FPL Energy as of December 31, 1999.
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MCS is in the process of taking its business model to the next level with Build Logix.
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The editorial alleges that subpoenaed documents dated July 5, 2000 show that Merck failed to report three (3) myocardial infarctions that took place in patients taking Vioxx during the study.
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UPS' management indicated that they are seeing "steady growth in the economy" and are thinking GDP growth will be in a range of 2% to 3% for the next several quarters.
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Although net interest margin was roughly in line at 3.65% vs. 3.67% in 2Q, linked quarter annualized earning asset growth of only 2.7% caused the contribution from net interest income to fall $0.03 short of forecast.
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Noninterest expense The company's noninterest expenses increased 12.0% year over year to $309.0 million.
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Commissioner Powell went on to question the wisdom of states looking to break-up or restructure the RBOC and indicated that he does not have a "whole lot of sympathy for the idea".
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This target enterprise value represents a 12.7x multiple of 2004 estimated pro forma EBITDA of $7.33 billion, or $4,350 per basic subscriber.
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Verizon's DSL penetration has also lagged (along with Qwest's) well behind that of AT&T and BellSouth.
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The offset is that is also improves the financial health of other domestic insurers, and accordingly Aflac may not benefit from the flight to quality which aided its sales in prior years.
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Adhesives account for 28% of revenues and Graphic Arts represent 15% of sales.
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Although the current focus is on the North American market, we believe the longer-term future will be driven by international activity.
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US Airways Income Statement Comparisons 1997-99E.
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UST's 10K specifically refers to the possibility of a shift to weight-based tax in WA.
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This inventory adjustment cost the company an estimated $10 million in revenues.
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Company Description: SLM Corporation, also known as Sallie Mae, is the nation's largest private source of funding and servicing support for higher education loans for students and their parents.
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Included in ITW's revised outlook is a near consensus second quarter EPS range of $1.30-$1.36.
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SBC Offers Compelling Total Return We believe that there are three items that should drive returns for SBC shareholders: First, we believe there is 10% upside for SBC shares based on our estimate of value captured by SBC through the transaction.
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Miscellaneous expense declined to $5.0mm from $7.3mm.
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Description of Business Process Control (21% of Consolidated Sales, 18% of Segment Income) Emerson Process Management business (formerly known as the Fisher-Rosemount group and related businesses), is a leading provider of process management solutions, including control systems and automation software, measurement devices, analytical instrumentation, and valves.
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As the table illustrates, Lucent generated $669 million in net pension/post-retirement income and $615 million in operating losses in 2003.
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The tax rate of 25.2% was 20 basis points higher than expected and compares with 24.0% in the year ago quarter.
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The company benefited from manufacturing efficiencies related mainly to the ramp-up of volumes at recently expanded operations in Mexico, China and Romania.
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Given the board's silence on the issue, we believe greater activism from shareholders (existing or new) is the only way a change in the corporate structure would be successful..
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News Corporation - Increase in guidance on the back of continued strength in 2Q.
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Margin Commentary Gross margin expanded 42 basis points year-over-year due to continued reductions in inventory acquisition costs.
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We are reducing our target price to $141 from $143 due to lost cash.
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Specifically, churn increased 50bps from Q2 2003, to 2.7%, versus our expectation of 2.6%.
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� Limits On Margin Growth: With demand recovering, the sky appears the limit for unit and sales growth.
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The components of this total are as follows: Copays as a % of costs.
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DRAM and flash memory orders are expected to be strongest in Q3 with foundry orders also expected to be up from Q2.
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By targeting a different market with a different brand, we believe Avon will not significantly cannibalize its core brand or channel.
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Looking ahead to the fiscal third quarter, the company indicated that advertising revenues in the Publishing segment are currently tracking up in the low teens.
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The first indication to be submitted to the FDA will be for hepatitis C monotherapy since the Phase III trial began in July, 1997.
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Thus, using a mid-point between these two methodologies, puts us roughly in line with our $17.50 target price.
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Exhibit 7 Air Products and Praxair: Normalized Valuation.
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o D&O and E&O business declined by 0-10%, with the greatest pressure on rates in the U.K. and Europe, where rates were down by 10-20%.
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The current multiple on S&P 500 earnings is roughly 21x estimated 2002 earnings.
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AMD is apparently also running a huge marketing campaign in China with OEM wins.
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We are not counting on Stonecrest Medical Center being completed.
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Additionally, Bristol has yet to begin to study its pediatric use (contingent upon FDA discussion on carcinogenicity), which could ultimately become a meaningful contributor to sales growth potential.
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Low Invested Capital Base from Direct Selling Channel Generates Strong ROICs With streamlined, regional manufacturing and all sales generated through independent beauty advisors (eliminating the need for capital intensive distribution through retail stores), AVP can maintain both lean working capital levels and low overhead that drive healthy ROICs of 42% in 2004, well-above the company's estimated 11% WACC.
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business, some 80% has been returned to shareholders in the form of dividends and share repurchase..
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The tax rate in the quarter was 33.5%, slightly higher than the historical tax rate as a result of the sale of the company's Ireland facility to Arterial Vascular Engineering.
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Rafael Anchia): This bill supports the imposition of a 7.5% tax on coal (includes lignite) used, or purchased for use, in the state.
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Outside the US, comps were up 24% in Asia Pacific, ex Japan, and 30% in Europe.
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Figure 1 displays the recent trend in year over year revenue growth and order growth, with adjustments for the impact from Scientific Atlanta.
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This growth was in large part offset by competitor pricing and promotional activities outside of the U.S. International sales grew 7% to $273 million (3% FX neutral), in-line with our growth estimate.
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We continue to believe that Tellabs stock could trade in excess of a 40x multiple on our CY' EPS estimate of $2.35, so we continue to calculate a 1Zmonth 99 price target of $105 and rate the stock Buy.
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We reduced our F1999 (June) EPS estimate to $2.62 from $2.75, on forecast revenue of $3,873 million, because of limited visibility.
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In this transaction, GDT gained an advanced surgical cardiac ablation technology for the treatment of atrial fibrillation.
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It also benefited from a $5 million reversal of an environmental reserve.
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On September 10th, Macy's (M, $31.78, Neutral) will begin to advertise and promote its exclusive Martha Stewart (MSO, $13.07, Not Covered) line.
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Credit Suisse view: With 40% of Colgate's revenues coming from oral care we believe that the company remains well positioned for the current challenging economic environment in the U.S. (even its Hills pet food business should continue to benefit from favorable category dynamics).
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The oil price assumption is $60/bbl long-term and long-term refining margin assumption is $9/bbl.
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Overall, pretax income increased 37.7% in the quarter, to $220.5 million, $17�18 million above our estimate.
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We estimate pension expense was 60c in '03 vs. tax occurred during the fourth quarter of 2003.
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In addition, we expect Halliburton to generate free cash of approximately $1 billion in 2000.
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� Directory Business Spin-Off On Course: The previous announced directory spin-off (Idearc) will occur on November 17, 2006.
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The 3.3x multiple represents premiums of over 50% and about 15% to the 2.0x trough Price/Sales ratio the stock has traded at over the past three years and the 2.9x the stock is trading at currently based on our 2004 forecasts.
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We believe multiple expansion is justified by rising return on capital from already record levels.
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Both Government and Commercial contributed to sales growth with Commercial up an impressive 18%, driven by robust aftermarket activity and demand for new biz jets; and Government sales 13% higher than 2Q05, driven by military systems upgrades and modernization programs.
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The Canadian segment margin would have been 8.5%, after adjusting for this gain.
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The current political concern revolves around the government's consideration of privatizing Ginnie Mae and the potential that the organization run by the private sector could emerge as a competitor.
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At these levels TGT shares appear to be discounting a lot of negatives.
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PRODUCTS AND MARKETS While most of Oracle' software revenue is derived from sales of database software, this is "not your father's" database.
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However, we note that in addition to reaching agreement with the Commissioner on valuation, the transaction still has numerous hurdles.
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With the new power of distribution from its co-brand relationships with Citigroup and MBNA, American Express is poised potentially to double its U.S. card market share over the next three to four years.
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STI reported very weak 4Q EPS loss of $1.08 and operating EPS of $1.10 loss driven by higher credit costs in the forms of higher net chargeoffs, large loan loss reserve build, and credit related expenses such as mortgage fraud and mortgage reinsurance reserve builds.
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Good (meaning cheap) IPO pricing is important because negative institutional investor sentiment can quickly make institutional purchasers risk-averse, effectively cooling an equity underwriting cycle.
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Year to date, TriCor has fallen short of our expectations.
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3) Executing in the Equipment business and providing investors with a balanced assessment of progress will help investors judge through the cycle earnings power 4) The balance sheet is very inefficient.
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