See Appendix A-1 for Strategist Certification and Important Disclosures
Thematic Investing
November 2008
Edward M. Kerschner, CFA
Chief Investment Strategist
Citi Global Wealth Management
+1.212.559.2323
edward.kerschner@citi.com
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Published 11/06/08

Table of Contents
Page
Postmodern Populism – The 2008 election and the impact of the likely
3
trend towards “Big Government.”
Climatic Consequences – Investment implications of the behavioral,
12
regulatory, and physical impact of climate change.
Water Worries – Precipitation patterns changing, drought increasing,
18
snow cover decreasing, and pollution rising.
Build & Rebuild – Infrastructure development creates opportunities for
24
builders, owners, and operators of infrastructure assets.
The Big Fix – The experiences of the US in the 1830s and 1930s, and
27
Japan in the 1990s, reveal 3 separate steps necessary for recovery.
2

And the Winner is…
The Obama Edge
• Quantitative models developed by well-regarded presidential historians suggested that Obama had a
high likelihood of achieving a victory. The Republican Party was dealing with the dreaded “triple
whammy” in 2008: an unpopular president, a weak economy and a second term election.
Professor Allan Lichtman’s “Thirteen Keys to the Presidency”
Key 1 (Party Mandate): After the midterm elections, the incumbent party holds more seats in the US House of Representatives than it did after the prev ious midterm elections. FALSE
Key 2 (Contest): There is no serious contest for the incumbent party nomination. TRUE
Key 3 (Incumbency): The incumbent party candidate is the sitting president. FALSE
Key 4 (Third Party): There is no significant third-party or independent campaign. TRUE
Key 5 (Short-Term Economy): The economy is not in recession during the election campaign. UNCERTAIN
Key 6 (Long-Term Economy): Real per-capita economic growth during the term equals or exceeds mean growth during the previous two terms. FALSE
Key 7 (Policy Change): The incumbent administration effects major changes in national policy. FALSE
Key 8 (Social Unrest): There is no sustained social unrest during the term. TRUE
Key 9 (Scandal): The incumbent administration is untainted by major scandal. TRUE
Key 10 (Foreign/Military Failure): The incumbent administration suffers no major failure in foreign or military affairs. FALSE
Key 11 (Foreign/Military Success): The incumbent administration achieves a major success in foreign or military affairs. FALSE
Key 12 (Incumbent Charisma): The incumbent-party candidate is charismatic or a national hero. FALSE
Key 13 (Challenger Charisma): The challenging-party candidate is not charismatic or a national hero. UNCERTAIN
Electoral Barometer* and Popular Vote Margin
30%
Incumbent Party Won
25%
1972 1964
20%
1984
Popular Vote Margin
1956
15%
10%
1996
1988
5% 1948
2004
1960 2000
0% 1968
1976
-5% 1992
2008
(Reagan Landslide) * Abramowitz Electoral Barometer =
1980
-10%
President’s net approval rating in Gallup
1952
Poll + ( 5 x Real GDP growth) - 25
(Eisenhower trounces Stevenson)
-15%
Incumbent Party Lost
-20%
-100 -80 -60 -40 -20 0 20 40 60 80 100
Barometer Reading
Source: Professor Allan Lichtman, American University; Professor Alan Abramowitz, Emory University; Citi Investment Research 3

Election ‘08: Back to the Future?
The Record
• On average, neither Democrats nor Republicans have been “bad” for the stock market; likewise following
turnover of Democratic and Republican administrations.
• The combination of a Democrat president and Republican-controlled Congress has proved most
favorable for stocks, while an “all blue” combination of a Democrat president and a Democrat-controlled
congress (i.e., the Obama scenario) has been least favorable.
Average Change by Presidential Political Party Since 1829
3.0
3.0%
50%
Interest Rates (10 Yr Bond)
Inflation (CPI)
Stock Market (DJIA) 2.0
2.0%
40%
1.0
1.0%
29% 0.34
30%
0%
24% 0.0
0.0%
-0.33
20%
-1.0
-1.0%
-1%
10%
-2.0
-2.0%
-3.0
0% -3.0%
Democrat Republican
Democrat Republican Democrat Republican
Average Change when Incumbent Political Party Changes Since 1829
3.0% 3.0
60%
Inflation (CPI) Interest Rates (10 Yr Bond)
Stock Market (DJIA) 2.0% 2.0
1%
42%
41% 1.0% 1.0
0.53
40%
0%
0.0
0.0%
-0.23
-1.0% -1.0
20%
-2.0% -2.0
-3.0
-3.0%
0%
Democrat Republican Democrat Republican
Democrat Republican
Average Change by Political Party in Executive and Legislative Branches Since 1829
30% 3.0% 3.0
Interest Rates (10 Yr Bond)
Inflation (CPI)
Stock Market (DJIA) 2.0% 2.0
1%
20% 1.0% 0% 1% 1.0
17% 0.30
0.07
13% 0.0% 0.0
12%
-0.11 -0.12
8% -1.0% -1.0
10%
-2.0% -2.0
-
-3.0% -3.0
0%
-7% Dem. Pres Rep. Pres Rep. Pres Dem. Pres
Dem. Pres Rep. Pres Rep. Pres Dem. Pres Dem. Pres Rep. Pres Rep. Pres Dem. Pres
Rep. Congress Rep. Congress Dem. Congress Dem. Congress
Rep. Congress Rep. Congress Dem. Congress Dem. Congress
Rep. Congress Rep. Congress Dem. Congress Dem. Congress
Source: Citi Investment Research 4

Big Government
A Secular Shift in Opinion
• The downsizing of the Federal Government may be ending.
• In 2008 the candidates were tapping into a secular shift in opinion about the desired level of
government involvement in the economy. In recent years, there has been a trend towards an increase
in the percentage of Americans saying “government should do more.”
• About half of the US economy could be at risk of government oversight and regulation.
Federal Government Expenditures Value Added by Industry
Desired Level of
(% of GDP) (2007 – % of GDP)
Government in the Economy
20%
47%
80%
Government should do more
Government is doing too many things Agriculture
Construction
Linear (Government is doing too many things) 0% Government
4% 13%
Linear (Government should do more) Information
5%
60%
Manufacturing
15%
12%
Finance,
Insurance,
Real Estate
40%
21%
Wholesale &
Retail Trade
10% 12%
20% Healthcare
7%
Transportation
Services 3%
Utilities
19% Mining
2%
2%
5% 0%
1950 1960 1970 1980 1990 2000 2010 Dec- Dec- Jan- Mar- Sep- Jul- Sep- Oct-
1995 1997 2002 2007 2007 2008 2008 2008
Source: The Wall Street Journal / NBC News Poll; Bureau of Economic Analysis 5

Populist Record
• pop•u•list
§ Pronunciation: 'pä-py&-list
Function: noun
Etymology: Latin populus the people
§ A member of a political party claiming to represent the common people.
• Early American Populism
Teddy Roosevelt’s “Trust-Busting” Andrew Jackson Kills the Bank of the US
The Great Merger Wave of 1898–1903 was brought to Jackson effectively destroyed the bank by vetoing its
an end by effective federal intervention, most notably 1832 re-charter by Congress, halting the deposit of
President Theodore Roosevelt’ s celebrated trust- U.S. funds in 1833, and letting it slowly decline until the
busting, which began with a 1904 Supreme Court case. expiration of its charter in 1836.
In addition to the end of the merger wave, a recession Jackson’s actions effectively ended all monetary
that lasted throughout 1903 and until the third quarter of restraint in the U.S. The resulting “Panic of 1837”
1904 also took its toll on stocks. Public commentary at caused a collapse of the banking system, a multi-year
the time blamed Roosevelt’ s ‘trust- busting’ for the depression, and a prolonged bear market.
Panic of 1907.
Dow Jones Industrial Average: Dow Jones Industrial Average:
1895-1910 1830-1850
25
80
“Panic of 1837”
20
60
15
40
10
“Panic of 1907”
5
20
1830 1835 1840 1845 1850
1895 1900 1905 1910
Source: Merriam-Webster; Historical Statistics of the United States 6

Populist Record
• Modern American Populism
Carter’s Stagflation
LBJ’s Nixon:
JFK
The “Misery Index”
“Great Society” The Silent Populist
vs. Big Steel
(Inflation + Unemployment)
America was in a “golden age” of “Great Society ” promised to stamp Nixon was preoccupied with foreign 25%
low inflation and rapid growth, with out poverty in both rural and urban affairs. Nixon was often quoted as
few excesses in the financial settings. LBJ pursued Medicare, saying: “You don’t really need a 20%
system, which was still heavily Medicaid, aid to education, and a President for domestic policy.”
regulated. major “War on Poverty.”
15%
But domestically, it was a very
But, JFK’s victory over Big Steel Unfortunately, the decision to fight active regulatory period: EPA,
10%
undercut business confidence, both the War on Poverty and the Consumer Product Safety
provoking fears that the President War in Vietnam led to inflation, Commission, OSHA and for a time,
intended to initiate de facto controls rising interest rates and the end of wage and price controls. 5%
on prices and profits. a bull market.
0%
1950 1960 1970 1980 1990 2000 2010
Dow Jones Industrial Average:1960-1980
1200
DJIA Real DJIA
1000
800
Adjusted for
inflation,
600
DJIA falls 47%
400
200
1960 1965 1970 1975 1980
Source: Bureau of Labor Statistics; Historical Statistics of the United States; Citi Investment Research 7

Populist Pause
• The 28 year pause began with the “Reagan Revolution.”
President Clinton’s Tenure
Top Marginal Income Tax Rate Populist Pause
1980-2008
100%
Clinton signed into law welfare reform, so people
1981 – Ronald Reagan had to look for a job before being eligible for
welfare; ended the “retirement test” for Social
80%
Security benefits; pushed NAFTA; signed the
1989 – George H.W. Bush
largest capital gains tax cut ever and reduced
government spending as a share of GDP by 3
60% 1993 – Bill Clinton
percentage points.
By reacting to the political environment and posing
2001 – George W. Bush
40%
as “a New Democrat, an Old Democrat, and
ultimately, in effect, a moderate Republican,” (as
The Economist pointed out), Clinton created a
20%
very favorable environment for investors
1950 1960 1970 1980 1990 2000 2010
Dow Jones Industrial Average:1980-2008
16,000
DJIA Real DJIA
12,000
Adjusted for
8,000
inflation,
DJIA gains 340%
4,000
0
1980 1985 1990 1995 2000 2005 2010
Source: Tax Policy Center; Citi Investment Research; The Economist, Which Bill Clinton?, August 24, 1996; FactSet 8

Populist Platforms
Taxes
• On the last three occasions when there has been incumbent party change, in the post-election year
Congress has passed a major fiscal package that has included significant changes to tax rates.
• Obama offers large tax breaks to low- and middle-income taxpayers.
• A number of key tax provisions expire in 2010, and revert to their previous levels.
Election Year Post-Election Year Winning Party Winning President Fiscal Reform
1976 Democrat Carter
1980 Republican Reagan
1981 Economic Recovery Tax Act of 1981
1984 Republican Reagan
1988 Republican G.H.W. Bush
1992 Democrat Clinton
1993 Omnibus Budget Reconciliation Act of 1993
1996 Democrat Clinton
2000 Republican Bush
2001 Economic Growth and Tax Relief Reconciliation Act of 2001
2004 Republican Bush
2008 Democrat Obama
2009 ?????
Top Federal Tax Rate: Select Tax Rates:
Today and Under Obama Plan Currently and Post 2010
60%
Currently Post-2010
Itemized Deduction Phaseout
Top Federal Tax Rate Income Tax Brackets 35.0% 39.6%
48.65%
50% Social Security Payroll Tax
(High to Low) 33.0% 36.0%
Medicare Payroll Tax
28.0% 31.0%
40% 36.45%
25.0% 28.0%
15.0% 15.0%
30%
10.0% 15.0%
20% Stock Dividends: Taxed as
15.0% ordinary
Rate for taxpayers
10% income
above the 15% bracket
Capital Gains:
0%
15.0% 20.0%
Rate for taxpayers
Today Obama?
above the 15% bracket
Source: Citi Investment Research; Tax Policy Center 9

Postmodern Populism
• President-elect Obama’s electoral platform suggests that more sectors are at risk than stand to benefit.
At Risk Sector Sub-Sector Comment
Energy Big Oil Companies Obama has proposed windfall profit taxes when a barrel of oil is over $80
Coal Miners A carbon cap and trade regime would favor natural gas and nuclear power
Finance Alternative Investments Obama supports taxing carried interest as regular income
Brokers & Asset Managers A higher tax on capital gains would be a negative
Credit Card Companies Obama has proposed to ban universal defaults, and interest on fees
Multi-line Insurance Companies Obama has proposed preventing insurers from overcharging for malpractice insurance
Tax Preparation Companies Obama has proposed simplifying tax filings for middle class Americans
Healthcare Biotech “Biogenerics” (i.e., generic biotech drugs) a negative
Managed Care Government intervention poses risks
Pharmaceuticals Greater government role in Medicare drug prices
Retail Upscale Retailers Higher taxes on upper-income groups would be a negative for luxury goods
Utilities Coal-burning Utilities Potentially at risk from a carbon cap and trade regime
High Payout Utilities A higher tax on dividends would be a negative for high payout stocks
Relatively Well-Positioned Sector Sub-Sector Comment
Energy Ethanol Producers Obama supports subsidies and tariffs for ethanol
Nuclear-powered Utilities Well-positioned under a carbon cap and trade regime
Solar Industry Obama favors renewable power sources
Wind Power Industry Obama favors renewable power sources
Healthcare Drugstores What they lose from brand name pricing pressure, they make up on movement to generics
Generic Drug Makers Generics would help the government save money under a universal healthcare system
Retail Low -end Retailers Obama’s tax cuts would primarily benefit those with very low incomes
Source: Citi Investment Research 10

Postmodern Populism
• Party does not dictate stock market direction. Fundamentals, such as growth and inflation, have much
more significance. The DJIA rallied in the period following the election victories of populist Democrats
Carter, LBJ, and JFK, and then performed poorly following Carter’s inauguration (reflecting stagflation),
but continued to do well early during the administrations of LBJ and JFK (reflecting economic stimulus).
• But the record of modern populism (1960 – 1980) was a stock market that zigged and zagged, and rose
modestly in nominal terms, but declined 47% in real terms.
• Will Obama emulate Clinton, who “posed as a New Democrat, an Old Democrat, and ultimately, in
effect, a moderate Republican,” or modern populists JFK and LBJ, big government social activists?
DJIA Performance following the Election of First Term Populists
Inauguration thru 1 st Year
Election thru Inauguration Inauguration thru First 100 Days Inauguration thru First Term
Average of Populist Presidents 3% -1% -2% 12%
J. Carter (1976) 4% -8% -17% -4%
R. Nixon (1968) -2% 2% -14% 10%
L. Johnson (1964) 2% 3% 8% 5%
J. Kennedy (1960) 6% 7% 15% 18%
T. Roosevelt (1901) - -9% -9% 0%
A. Jackson (1828) 2% 0% 6% 42%
DJIA Performance DJIA Performance DJIA Performance
(Avg. 1 st Term Presidents since 1829) (Avg. when Dem. replaces Rep. since 1829) (Avg. Select Populists since 1829)
80%
80%
80%
69%
60%
60% 60%
33%
40%
40%
40%
20%
20%
20% 12%
11%
7%
2% 3%
2% 1%
0%
0%
0%
-1% -2%
-2%
-20%
-20% -20%
Election thru Inauguration Inauguration Inauguration
Election thru Inauguration Inauguration Inauguration
Election thru Inauguration Inauguration Inauguration
Inauguration thru first 100 thru first year thru first term
Inauguration thru first 100 thru first year thru first term
Inauguration thru first 100 thru first year thru first term
days
days
days
Source: Citi Investment Research 11

Climatic Consequences
• For investors, the issue is not whether climate change is occurring. Governments, regulators, corporations,
and individuals are reacting to the perceived threat of climate change.
• In the past 420,000 years, there have been four transitions from glacial to warm periods. All of the four
transitions were accompanied by increases in atmospheric carbon dioxide.
• GHG abatement is not necessarily “Green.”
• Climate change initiatives are part of a much broader agenda
Variation with Time of Temperature “Mammoth with the Eye”
and Carbon Dioxide (CO2) Levels (18,000-13,500 B.C.)
390 15
CO2 levels today are 25%
Carbon Dioxide (LHS)
Degrees Variation (RHS)
360
above prior peak levels
Carbon Dioxide (PPMV)
10
330
5
300
270
0
240
-5
210
180 -10
400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
Years Before Present
Multiple Agendas
Climate Friendly vs. Green
$100 oil
Environmental Economic
CLIMATE FRIENDLY “GREEN”
Climate Change Energy Efficiency
Nuclear Power Plants Radioactive Waste
Coal Gasification Noxious CO2
Hydroelectric Power Environmental Damage
Wind Farms Deaths of Birds & Bats
Finland Developing
Nuclear Power vs
Diesel Fueled Cars Air Pollutants
Markets
Energy Security “Fuel Poverty ”
Russian Gas Source
Biofuel Production Threat to Rare Species
Political Social
Source: J.R. Petit, et al., Climate and atmospheric history of the past 420,000 years from the Vostok ice core, Antarctica, Nature 399 (1999); Grotte de Rouffignac, France; Citi Investment Research 12

Climate: Regulatory Response
• Two tracks of negotiations will continue: (i) Kyoto-track (excludes US); (ii) Bali track (includes US), and
which are expected to converge in Copenhagen in December 2009.
• 44-76% of global GDP has committed to reducing GHG emissions under Kyoto.
• Despite the US not signing Kyoto, 26 states (59% of GSP) will curb GHG emissions by 2012.
Kyoto Timeline
The United Nations Framework Convention on Climate Change (UNFCCC) began to negotiate a global treaty to reduce the emissions ofsix GHGs.
1992
Kyoto Protocol was adopted at the Convention’s third meeting in Kyoto, Japan.
1997
Industrialized and transition economies assumed binding emission caps to be achieved during the five-year period from 2008 to 2012.
2008
§ Kyoto-Track: Kyoto parties; Finalize second round of targets.
§ Bali-Track: All Countries; Develop initial commitments for many developing nations and US.
15th Conference of the Parties in Copenhagen
2009
GHG Emissions by Country (2002) Percentage of Global GDP US Gross State Product
(E.U. 25, 16%) Accounted for by Kyoto “Annex 1 ” Countries likely Covered by
GHG Emissions Schemes by 2012
Other - Non- US 100%
RGGI - Total
23%
Annex 1 10 States,
76%
25% 80% 19%
60% Other, 41%
47% 46%
44%
40%
Other -
WCI - Total 7
Annex 1 China
States, 20%
20%
11% 15%
France
2% Italy 0%
Russia
Total Ex. US and Ex. US, Ex. US and
6%
2% U.K. India MGGA - Total
Australia Australia and Canada Separate
6 States, 13%
Canada 2% 4% Japan Canada Initiatives, 8%
Germany 5%
2%
RGGI: CT, DE, MA, ME, MD, NH, NJ, NY, RI, VT
3%
WCI: AZ, CA, MT, NM, OR, UT, WA
MGGA: IL, IA, KS, MI, MN, WI
Source: United Nations Framework Convention on Climate Change (UNFCC); Citi Investment Research Separate Initiatives: CO, FL, HI, 13

Climate: Regulatory Implications
Power Generation
• Nuclear power plants are completely carbon-free sources of electricity, but the electricity generated by a
nuclear power plant costs more than electricity generated by fossil fuels.
• Nuclear power is increasing, mainly in China, India and Russia, as a response to strong power demand,
greenhouse gas emission concerns, and energy security fears; a 65% increase in capacity by 2015.
• Coal is the most abundant hydrocarbon. Clean, climate-friendly coal will need to be big part of solution.
Carbon Content of Fuels US Electricity Generation Costs
(Tons of carbon/terajoule of energy) (Cents/kWh)
30 8
6.7
6
20 3.8 - 5.6
4.2
4
10
2
0
0 0
Coal Oil Gas Nuclear Nuclear Natural Gas Oil* Coal
Global Nuclear Electricity Generation Carbon Capture Technologies Cost
(Gigawatts) (Cents/kWh)
800 10
Operating/Building Planned Proposed
7.7
8
7.0
600 6.5
6
4.8
400
4
200 2
0
0 No Capture Gasification Oxy Post
Source: World Resources Institute; Citi Investment Research; World Nuclear Organization; US Consulting; Bloomberg 14
Combustion Combustion

Climate: Regulatory Implications
Renewable Energy Technologies
Mature Hydroelectric, Geothermal, Landfill Gas, Onshore Wind
§
Maturing Offshore Wind
§
Viable Photovoltaic Solar
§
Global Renewable Energy Wind Turbine Wind Capacity Installed New Wind Capacity Installed
Existing Capacity Cum. Installed Capacity (gW) (by Country) (2007 – Megawatts)
200
(2006 - excl. Hydro) Rest of
Canada,
Rest of World World, 1723
386
Rest of World,
Ocean Asia
Solar PV 14%
(tidal) UK, 427
Americas
Geo- 160
6% Portugal,
Germany, 23%
0% U.S., 5244
Europe
thermal 434
Portugal, 2%
8%
Italy, 603
UK, 3%
120
10 yr CAGR = 25%
France, 3% France, 888
Italy, 3%
Germany,
80 Denmark, 3%
1667
Wind
China, 6%
Biomass U.S., 18%
54%
and 40
India, 1730 Spain, 3522
Waste
India, 9%
33%
China, 3449
0 Spain, 16%
2000 2002 2004 2006 2008E 2010E
Global Polysilicon Supply-Demand
Levelized Cost by Source
US Wind Power Classification
(Metric Tons)
in Global Electricity Supply (US$/kWh)
200
$0.50
Polysilicon Demand Polysilicon Supply
$0.40
150
$0.30
100
$0.20
Texas
$0.10 50
$0.00
0
Solar Hydro Geo Wind (1- Nuclear Coal Gas
(~1%) (20%) (<1%) 2%) (25%) (40%) (15%)
2006 2007 2008 2009 2010
Renewable Traditional
Source: Renewable Energy Policy Network for the 21 st Century; Global Wind Energy Council; US Department of Energy; Citi Investment Research 15

Climate: Regulatory Implications
Transportation
• Increased Fuel Efficiency
• Alternative Fuels
§ Corn ethanol can only ever be a fuel additive; there’s just not enough corn to replace motor fuels.
§ Cellulosic technology may offer a way for ethanol to become a major source of motor fuel.
• The Climate Backlash: “Food versus Fuel”
CO2 Emissions Relative to Conventional Engine Automobile
(“Well-to-Wheel” carbon emissions) GHG Emission Reduction Technologies
Advanced Gasoline Engine
Conventional engine Advanced Diesel Engine
BorgWarner
BorgWarner Honda, Peugeot, Tenneco
Advanced gasoline engine
Biofuels
Advanced diesel Honda, Peugeot, Tenneco
Hybrid Technology
Fuel cell (gasoline)
Toyota Motor
Gasoline hybrid Toyota Motor
Fuel cell (Hydrogen from nat gas)
Diesel hybrid
Fuel Cell (Hydrogen from renewables) 0
Vehicle Load Reduction
0% 20% 40% 60% 80% 100%
Magna International
US Corn Yields (Bushels/Acre) US Corn Prices (Cents/Bushel)
§ Increased biofuels production accounts for only 2-3%
900
165
of overall increase in global food prices.
Despite a 20% increase
§ The “food versus fuel” debate ignores the inevitability
. . . prices have been rising
in corn yields . . .
700
155
of technological progress, and echoes Malthus’s
argument in 1798 that the starvation of Great Britain
500
145
was inevitable and imminent.
§ Converting forest and grassland to crop, corn-based
300
135 ethanol nearly doubles greenhouse emissions over 30
years and increases greenhouse gases for 167 years.
100 § Corn ethanol requires 3-4x more water than
125
1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008
conventional crude refining.
Source: World Resources Institute, US Department of Agriculture; Citi Investment Research; Global Financial Data 16

Climate: Physical Implications
• In recent years there have been a number of climatic trends:
§ Temperature — a warming of the global climate, but not every year, everywhere.
§ Wind — an increase in the frequency of intense hurricanes.
§ Water Worries — climate change is having a significant impact.
Global Annual Temperature Anomalies
1.0
0.6
0.2
-0.2
-0.6
1850 1875 1900 1925 1950 1975 2000 2025
Factors in the Water Supply-Demand Balance
Category 4 and 5 Hurricanes (% of total)
(41%) Supply Demand
West Pacific
(25%)
(34%)
Precipitation
South Indian (18%)
Patterns Changing
(35%)
East Pacific
Drought Emerging market
(25%)
(25%)
North Atlantic Increasing consumer sector
(20%)
(28%)
Southwest Pacific Snow Cover Developed economy
(12%)
Decreasing industrial sector
(25%) 1975-1989 1990-2004
North Indian
(8%)
Pollution Rising
0 20 40 60 80 100 120 140
Source: University of East Anglia, Norwich, UK; Changes in Tropical Cyclone Number, Duration, and Intensity in a Warming Environment, PJ Webster, et. Al, Science, September 2005; Citi Investment Research 17

Water Worries: Precipitation
Precipitation Patterns Changing
Heavier
§
Briefer
§
Less Frequent
§
Changing locations
§
• Australia has had wetter conditions in the past 30 years, but the distribution of rainfall has changed.
• Spain’s severe drought continues; in late 2007, water levels in reservoirs resumed downward trend.
Percentage of Total Global Land Area in Very Dry Conditions Trend in Australian Annual Rainfall
(Land areas within 600S – 750N) (1970-2007, Millimeters)
40%
Global very dry areas have more
than doubled since the 1970s
30%
20%
10%
0%
1960 1970 1980 1990 2000 2010
Rainfall Distribution Water Levels of Spanish Reservoirs
Over India (Percent of Capacity – 12 mo. MA)
During 2007 80%
Monsoon Season
In India 50% of
Atlantic Mediterranean
annual precipitation 60%
takes place in 15
days 40%
20%
2005 2006 2007 2008 2009 2010
Source: IPCC; Australian Bureau of Meteorology; Indian Ministry of Power; Ministerio de Ambiento 18

Water Worries: Droughts/Snow Cover
Snow Cover Decreasing
• From the South American Andes to the Asian Indus River basin the area covered by glaciers is shrinking.
• In southwest US a reduction in water availability below current consumption is projected within 20 years.
Drought Increasing
• Drought increases, as precipitation over land has marginally decreased while evaporation has increased.
Anomaly of Northern Hemisphere
Snow Cover Extent
3
1
-1
-3
1960 1970 1980 1990 2000 2010
Palmer Drought Severity Index
Colorado River: Flow at Lees Ferry (U.S.)
Cumulative deficit relative to local mean in surface land moisture
minus 108 Yr Avg. (Million Acre Feet)
2
12
8
1
4
0
0
-4
-8
-1
-12
1960 1970 1980 1990 2000 2010
1900 1920 1940 1960 1980 2000
Source: National Center for Atmospheric Research; Rutgers University Global Snow Lab; Upper Colorado River Commission 19

Water Worries: Desalination
• Desalination has become a viable option.
• Globally there are currently over 200 desalination plants in planning or up for consideration.
Global Water Desalination Capacity Current Desalination Projects
(Millions of Cubic Meters/Day) (by Country - % of Global Total)
Spain
120
Others 18%
29%
80
U.S.
13%
40
India
UAE
5%
9%
Libya
5% China
0 Saudi
6% Australia Arabia
1988 1992 1996 2000 2004 2008 2012 2016 7% 8%
Cost of Water Proposed Desalination Plants in California
(US$/m 3)
France
Germany
UK
Australia
US
Japan
US (Tampa Bay)
Algeria
Israel
Russia
Africa Groundwater
China
Desalination
India
$0.00 $1.00 $2.00 $3.00 $4.00
Source: Global Water Intelligence; United Nations Educational Scientific and Cultural Organization; Citi Investment Research; Pacific Institute 20

Water Worries: Pollution & Demand
Pollution Rising
• The water in most of the length of China's five major rivers is unsafe for direct human contact, about half of
all lakes are polluted and nearly two-thirds of large cities are experiencing serious wastewater pollution.
Emerging Market Thirst
• Urbanization causes demand for water to increase 5x beyond the “basic water requirement.” It is
estimated that by 2010, there will be 21 urban agglomerations with populations of 10+ million, up from just
10 in 1990. 17 will be in developing economies.
China’s Municipal Wastewater Daily Water Requirements
Discharge of Wastewater in China
Treatment Rates (Liters Per Person)
(Billions of Tons)
60 100%
300
Non-Industrial Industrial Services
Big Cities = >80%
250 Household Needs
80%
National
Hygiene, Sanitation, Cooking
40 Treatment Rate = National target = 70% 200 Drinking Water
52%
60%
150
Small & Medium Cities =
40% 60-70%
20 100
20%
50
0
0
0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2005 2010 Basic Urban
1990 & 2010 Urban Agglomerations with Inhabitants of Ten Million or more
2010
1990
Rank Urban Area Country Pop. (000s) Rank Urban Area Country Pop. (000s) Rank Urban Area Country Pop. (000s)
1 Tokyo Japan 32,530 1 Tokyo Japan 35,467 12 Karachi Pakistan 13,252
2 New York U.S. 16,086 2 Mexico City Mexico 20,688 13 Buenos Aires Argentina 13,067
3 Mexico City Mexico 15,311 3 Mumbai India 20,036 14 Los Angeles U.S. 12,738
4 Sao Paulo Brazil 14,776 4 Sao Paulo Brazil 19,582 15 Rio de Janeiro Brazil 12,170
5 Mumbai India 12,308 5 New York U.S. 19,388 16 Cairo Egypt 12,041
6 Osaka Japan 11,035 6 Delhi India 16,983 17 Manila Philippines 11,799
7 Kolkata India 10,890 7 Shanghai China 15,790 18 Beijing China 11,741
8 Los Angeles U.S. 10,883 8 Kolkata India 15,548 19 Osaka Japan 11,305
9 Seoul Korea 10,554 9 Jakarta Indonesia 15,206 20 Moscow Russia 10,967
10 Buenos Aires Argentina 10,513 10 Dhaka Bangladesh 14,625 21 Istanbul Turkey 10,546
11 Lagos Nigeria 13,717
Source: Citi Investment Research; State Statistical Bureau; Alex ander Zehnder et al., Water issues: The need for action at different levels, Aquatic Sciences, 2003; United Nations 21

Water Demand
Developed Economy
• Industrial processes are water intensive.
• Drinking water pipes can be expected to last between 50 and 100 years.
• Europe wastes at least 20% of its water due to inefficiency.
• A key issue is financing given that many municipalities have charged only nominal amounts for water.
One response to the key financing issue has been private sector involvement.
Water Required Per Ton Produced U.S. Drinking Water Pipe Estimated Losses from
(Thousands of Liters) by Classification Urban Water Networks
16 million liters
400 100% Bulgaria
Slovenia
Hungary
80% Ireland
300
Czech Rep.
Romania
60% France
200 Italy
Slovak Rep.
40% Spain
U.K.
100 Sweden
20% Finland
Denmark
Germany
0%
0
0% 20% 40% 60%
1980 2000 2020e
Sugar Steel Paper Microchips Excellent Good Fair Poor Very Poor Life Elapsed
People Served
Global Water Tariffs
by Private Water (%)
(per Cubic Meter)
$4 Western Europe
Oceania
$3 Latin America
North America
South East Asia
$2
C&E Europe
ME & Africa
$1
South Asia
Central Asia 0%
$0
0% 10% 20% 30% 40% 50%
ia
S.
n
ia
.
ina
U.K
NA
m
ia
ica
ia
e
pa
Ind
y
ss
U.
e
nc
As
As
an
tA
pe
Ch
Afr
ME
rop
Ja
Ru
Fra
rm
uro
La
S.
E.
Eu
Ge
.E
E.
W
Source: Citi Investment Research; US Environmental Protection Agency; European Environment Agency; Global Water Intelligence; Global Water Intelligence/OECD Global Water Tariff Survey 2007 22

Climatic Consequences Companies
• We have identified 126 companies (across 25 industries, 7 sectors, and based in 28 countries) that seem
well-positioned to benefit from these trends.
ACCIONA SA (ANA.MC – 1M); DANAHER CORP (DHR – 2M); IOI CORP (IOIB.KL – 1L); RWE AG (RWEG.DE – 1M);
ACE LTD (ACE – 1M); GROUPE DANONE (DANO.PA – 2M); ISRAEL CHEMICALS (ICL.TA – 1M); SCHNEIDER ELECTRIC (SCHN.PA – 1H);
AGRIUM (AGU.N – 1S); DEERE & CO (DE – NR); ITRON INC (ITRI – NR); SHARP CORP (6753.T – 3H);
AGUAS DE BARCELONA (AGS.MC – 1M); DOOSAN HEAVY IND (034020.KS – 1M); ITT CORP (ITT – 2M); SHAW GROUP INC (SGR – 3S);
ALLEGHENY TECHNOLOGIES INC (ATI – NR); KONINKLIJKE DSM NV (DSM.AS – 2M); JAIPRAKASH ASSOCIA (JAIA.BO – 1L); SHOWA DENKO (4004.T – 1M);
ALSTOM (ALSO.PA – 2H); DU PONT (E I) DE NEMOURS (DD – 2M); JOHNSON CONTROLS INC (JCI – 2M); SIEMENS AG (SIEGn.DE – 1H);
AMERICAN INTERNATIONAL GROUP (AIG – 2S); EBRO PULEVA SA (EVA.MC – 1M); JOHNSON MATTHEY (JMAT.L – 1L); SIG (SHI.L – 2H);
APPLIED MATERIALS (AMAT.O – 2M); EMERSON ELECTRIC CO (EMR – 1M); KUALA LUMPUR KEPG (KLKK.KL – 1L); SOLARWORLD AG (SWVG.DE – 1H);
ARCH CAPITAL GROUP LTD (ACGL – 1M); EMPRESAS ICA SAB (ICA.MX – 2S); KURITA WATER INDS (6370.T – 2M); SOUTHWESTERN ENERGY CO (SWN – 2H);
ARCHER -DANIELS-MIDLAND CO (ADM – 2H); ENCE (ENC.MC – 3M); L'AIR LIQUIDE (AIRP.PA – 1L); SPX CORP (SPW.N – 1M)
BABCOCK & BROWN WI (BBW.AX – 1S); ENERGY DEVELOPMENT (ENE.AX – NR); LEIGHTON HOLDINGS (LEI.AX – 2H); STANLEY ELECTRIC (6923.T – 1M);
BAJAJ HINDUSTHAN (BJHN.BO – NR); ENERGY RES. OF AU (ERA.AX – 1H); MAGNA INTERNATIONAL (MGA – 1M); SUNPOWER CORP (SPWR – 3S);
BALRAMPUR CHINI (BACH.BO – NR); ENTERGY CORP (ETR – 1M); MAKHTESHIM AGAN IND (MAIN.TA – 1H); SUNTECH POWER HOLDINGS (STP – NR);
BG GROUP (BG.L – 1M); EPURE INTERNATIONA (EPIL.SI – 1M); MONSANTO CO (MON – 1M); SUZLON (SUZL.BO – 3M);
BIOFUEL ENERGY CORP (BIOF – 2S); ERG SPA (ERG.MI – 2H); MOSAIC (MOS.N – 1H); SWISS REINSURANCE (RUKN.VX – 1H);
BORGWARNER INC (BWA – 1M); ESCO TECHNOLOGIES INC (ESE – NR); MOTECH INDUSTRIES (6244.TWO – 3M); SYNGENTA (SYNN.VX – 1L);
BRASIL ECODIESEL (ECOD3.SA – 2S); EVERGREEN SOLAR INC (ESLR – 2S); NALCO HOLDING CO (NLC – 1H); TENNECO INC (TEN – 2S);
BUNGE LTD (BG – 2S); FIRST SOLAR (FSLR.O – 1S); NESTE OIL OYJ (NES1V.HE – 2H); TERRA INDUSTRIES INC (TRA – 1S);
CF INDUSTRIES (CF.N – 1S); FLUOR CORP (FLR – 2H); NESTLE SA (NESN.VX – 1L); THERMAX (THMX.BO – 1L);
CHESAPEAKE ENERGY CORP (CHK – 2H); FORTUM OYJ (FUM1V.HE – 1M); NOBLE GROUP (NOBG.SI – 1H); TOYOTA MOTOR CORP (7203.T – 3M);
CME GROUP INC (CME – 1M); FPL GROUP INC (FPL – 2M); ORMAT TECHNOLOGIES INC (ORA – 2S); UMICORE (UMI.BR – 1M);
CHINA EVER INTL (0257.HK – 3L); GAMESA CORP (GAM.MC – NR); PALADIN ENERGY (PDN.AX – 1H); UNITED GROUP LTD (UGL.AX – 2H);
CITIZEN HOLDINGS (7762.T – 1M); GAMMON INDIA (GAMM.BO – 1M); PEUGEOT SA (PEUP.PA – 2H); URALKALI (URKAQ.L – 1M);
CLIPPER WINDPOWER (CWP.L – NR); GAZ DE FRANCE (GSZ.PA – 1M); PHILIPS ELEC(KON) (PHG.AS – 2M); VEOLIA ENVIRONNEMENT (VIE.PA – 2H);
CIE DE ST-GOBAIN (SGOB.PA – 1M); GAZPROM (GAZP.RTS – 1L); POTASH CORP SASK INC (POT – 1H); VERASUN ENERGY CORP (VSE – 2S);
CONERGY AG (CGYG.DE – NR); GENERAL ELECTRIC CO (GE – 2M); PROMOTORA AMBIENTA (PASAB.MX – 2S); VERBUND AG (VERB.VI – 2M);
CONSTELLATION ENERGY GRP INC (CEG – 2S); GFI GROUP INC (GFIG – 2S); Q-CELLS (QCEG.DE – 1M); VESTAS WIND SYSTEM (VWS.CO – 2H);
CONTACT ENERGY (CEN.NZ – 1M); HALMA (HLMA.L – NR); RHODIA (RHP.PA – NR); WACKER CHEMIE AG (WCHG.DE – 1H);
COSAN SA INDUSTRIA (CSAN3.SA – 1S); HONDA MOTOR CO (7267.T – 1M); ROPER INDUSTRIES INC/DE (ROP – 1M); XTO ENERGY INC (XTO – 2H);
CRANE GROUP (CRG.AX – 2H); IBERDROLA SA (IBE.MC – 1M); ROTORK (ROR.L – NR); YARA INTERNATIONAL (YAR.OL – 1H);
CROPENERGIES AG (CE2G.DE – NR); IJM PLANTATIONS (IJMP.KL – 1L); RPS GROUP (RPS.L – 3M);
Source: Citi Investment Research 23

Infrastructure: Developed & Developing
Rebuilding Aging Infrastructure, Expanding Inadequate Assets, and Responding to
Demands (e.g., climate change factors) Requires a Range of Infrastructure Expenditures
• Within the OECD area, government spending on gross fixed capital formation and Public Capita-GDP
ratios have fallen steadily since the 1970s
• In many developed countries, an aging infrastructure is manifesting itself in the form of losses that occur
between the service provider and the end user.
• In emerging markets there is great need for improved quality and reliability.
OECD Gov’t Fixed Capital Formation US Electricity Reserve Margins Electric Power Transmission
(% of GDP) on Summer Peak Loads and Distribution Losses (% of Output)
10%
5% 30%
2000 2002 2004
8%
4% 20%
6%
4%
10%
3%
2%
0%
2%
0%
1980 1985 1990 1995 2000 2005 2010E 2015 Portugal Greece Norway U.S. Switzerland Germany Belgium Japan Iceland
1960 1970 1980 1990 2000 2010
Access to Basic Infrastructure Electrical Outages/Year China Expressways The Road from Kunming, China
(% of population) Average Number of Days (‘000 km) to Bangkok, Thailand
100
100% 80
Electricity Roads
Sanitation Water
80
80%
60
60
60%
40
40
40%
20
20
20%
0
0
0%
1980 1990 2000 2010e 2020e
Africa South Asia Latin America South Asia Africa Latin America
Source: OECD; IMF; World Bank; Citi Investment Research; Edison Electrical Institute; China Statistical Yearbook; The Economist; The New York Times 24

Build & Rebuild: Global Infrastructure
• In many emerging economies, large current account surpluses mean that there is an ample supply of
savings that the public sector can tap for infrastructure development.
• In developed countries, growing private investment in infrastructure assets (e.g., specialized infrastructure
funds, public-private partnerships) mean reduced vulnerability to a public sector spending slowdown.
• Global infrastructure spending is estimated to average $2 trillion annually through 2015, with more than
half forecast to occur in emerging economies, where gov’t. policies are driving infrastructure development.
Current Account Balance Global Infrastructure Investment
Private Infrastructure
($ Billions) (Funds Raised, $ Billions)
Market Maturity
0
$800 $150
Australia
Developing Advanced United Kingdom
2
Canada
Nordic
4
$400 South Europe
Privatization Ranking
United States
6 $100
France
Benelux
8
Germany
$0 Japan
10
Other Asia
CE4
12 $50
Mexico
-$400 China
14
Latin America
16
10 20 30 40 50 60 70 80 90
-$800 System Maturity
$0
Emerging Maturing Mature
1980 1990 2000 2010 2020 2005 2006 2007* 2008 2009 2010
* H1 2007 level annualized
Infrastructure Expenditures Expected Global Infrastructure Investment
OECD and Global ($ Billions) by Region and Type of Investment
$2,500
Developed:
OECD Global
New
Developed:
16%
$2,000
Maintenance
30%
$1,500
$1,000
Developing:
$500 Maintenance
27%
Developing:
New
$0
27%
1970 1975 1980 1985 1990 1995 2000 2005 2010E 2015E
Source: IMF; RREEF; Stanford University; Probitas Partners; Citi Investment Research; OECD; World Bank 25

Builders, Owners and Operators Benefit
• Infrastructure development creates opportunities for more than just the “builders” – engineering and
construction firms, etc. “Owners” – private ownership, which has been embraced by many cash-strapped
governments in developed economies, enables profit-oriented firms to reap “economies of skill” by
leveraging their experience (technical, operational, and financing insights) in the operation of infrastructure
assets. “Operators” – in many developing economies private ownership is not feasible, so public-private
partnerships offer a viable way of ensuring that adequate infrastructure capacity is available.
Company Symbol CIR Rating Home Country Industry Role Comment
Abertis ABE.MC 1L Spain Motorways Operator Operates motorways across Spain
Aeroporto di Venezia (SAVE) SAVE.MI 1H Italy Airports Owner Operates the Venice airport system, Italy ’s third largest
Aeroports de Paris ADP.PA 1M France Airports Owner Operates the major airports in the Paris region
Allegheny Tech ATI.N NR US Precious Metals & Minerals Builder Building “clean” power infrastructure
Alstom ALSO.PA 2H France Industrial Conglomerates Builder Building “clean” power infrastructure
Asciano Group AIO.AX 1H Australia Freight Owner Owns ports and rail assets across Australia
Babcock& Brown Wind Partners BBW.AX 1S Australia Alternative Power Generation Owner Investment portfolio has an interest in 76 wind farms
Cintra CCIT.MC 1M Spain Motorways Operator Toll road portfolio concentrated in Spain, Canada, US
Compagnie de Saint Gobain SGOB.PA 1M France Building Products Builder Worldwide or European leader in all of its businesses
Doosan Heavy Inds & Construction 034020.KS 1M S. Korea Engineering & Construction Builder #1 desalination company globally
Empresas ICA SAB de CV ICA.MX 2S Mexico Engineering & Construction Builder Big Mexican engineering & construction company
Fluor Corp FLR.N 2H US Engineering & Construction Builder Building “clean” power infrastructure
Ferrovial FER.MC 1M Spain Engineering & Construction B/O/O With a legacy in construction, also an owner-operator
Fraport FRAG.DE 1H Germany Airports Owner Operates Frankfurt/Main airport, Europe’s #1 for cargo
Gamesa GAM.MC NR Spain Alternative Power generation Builder World’s second-largest wind turbine manufacturer
General Electric GE.N 2M US Industrial Conglomerates Builder Building “clean” power infrastructure
Holcim HOLN.VX 1M Switzerland Construction Materials Builder Global leader in cement volumes
Lafarge LAFP.PA 1H France Construction Materials Builder Global leader in aggregates
Macquarie Airports MAP.AX 1H Australia Airports Owner Operates, Sydney, Copenhagen, Brussels, Bristol airports
Macquarie Communications Infrastructure MCG.AX 2H Australia Broadcasting Owner Portfolio of communications infrastructure assets
Macquarie Infrastructure Company Trust MIC.N 1H US Diversified Owner Diversified fund owns US airport assets, among others
Macquarie Infrastructure Group MIG.AX 1H Australia Motorways Operator One of the world’s largest operators of toll roads
Nokia NOK1V.HE 1H Finland Communications Equipment Builder Telecommunications network equipment
Philips Electronics PHG.AS 2M Netherlands Industrial Conglomerates Builder #1 lighting co. benefits from electricity proliferation
Promotora Ambiental SAB de CV PASAB.MX 2S Mexico Environmental Services Operator Beneficiary of Mexican water infrastructure upgrade
Q-Cells QCEG.DE 1M Germany Electrical Products Builder World’s second-largest solar cell manufacturer
Roper ROP.N 1M US Industrial Conglomerates Builder Tolling provides solutions to road infrastructure funding
Rotork ROR.L NR UK Industrial Machinery Builder Global leader in heavy duty actuators for water industry
Schneider Electric SCHN.PA 1H France Electrical Products Builder Global #1 in low- and medium -voltage distribution
Sharp 6753.T 3H Japan Alternative Power Generation Builder World’s biggest maker of solar cells
Shaw Group SGR.N 3S US Engineering & Construction Builder Building “clean” power infrastructure
Siemens SIEGN.DE 1H Germany Industrial Conglomerates Builder Building “clean” power infrastructure
SPX Corp SPW.N 1M US Industrial Machinery Builder Benefiting from strong global demand for power
Transurban Group TCL.AX 2M Australia Motorways Operator Australian toll road operator expanding in the US
Unique Zurich AG UZAN.S 1M Switzerland Airports Owner Operates Zurich airport, the largest in Switzerland
Veolia Environnement VIE.PA 2H France Environmental Services Operator Global leader in water services benefits from PPPs
Vestas Wind Systems VWS.CO 2H Denmark Alternative Power Generation Builder Global leader in the production of wind turbines
Vienna Airport VIEV.VI 2S Austria Airports Owner Operates the busiest and biggest airport in Austria
Source: Citi Investment Research 26

The Big Fix: Necessary and Sufficient
“The Great Moderation”
• “One of the most striking features of the economic landscape over the past 20 years or so has been a
substantial decline in macroeconomic volatility,” Fed Chairman Bernanke observed in 2004; only 2
recessions have been declared by the NBER in the last 26 years.
• As the S&P rose to a record high, stock market volatility levels declined well-below the LT trend.
• Complacency led financial innovators to rapidly expand a set of relatively new & untested instruments.
VIX and S&P 500 Daily Price Change
10 Yr Rolling Standard Deviation
(Absolute Value-200 Day Moving Average)
of US GDP Growth
80 1.6%
8%
Absolute Value-200 Day Moving
Average
60 1.2%
6%
with Trendline (RHS)
40 0.8%
4%
20 0.4%
2%
VIX
0% 0 0.0%
(LHS)
1950 1960 1970 1980 1990 2000 2010 1950 1960 1970 1980 1990 2000 2010
Quarterly US Real GDP Growth Bank Loans as a % of Credit Market Instruments
(Annualized - Recessions Shaded) (Nonfarm Nonfinancial Corporate Business)
45%
20%
15%
40%
10%
5%
35%
0%
-5%
30%
-10%
-15% 25%
1950 1960 1970 1980 1990 2000 2010 1950 1960 1970 1980 1990 2000 2010
Source: Bureau of Economic Analysis; National Bureau of Economic Research; Citi Investment Research; Federal Reserve 27

The Big Fix: Necessary and Sufficient
Learning from Financial Crises
• US 1830s – The end of US monetary restraint resulted in the banking collapse in 1837.
• US 1930s – The Great Depression made infrastructure an instrument of social policy.
• Japan 1990s – Despite monetary and fiscal stimulus, failure to fix the banking system.
• US 2008 – ?????
Dow Jones Industrial Average: Dow Jones Industrial Average:
1833-1858 1920-1945
400
25
300
20
200
15
100
10
0
5
1920 1925 1930 1935 1940 1945
1833 1838 1843 1848 1853 1858
Dow Jones Industrial Average:
Nikkei 225 Stock Average:
1985-2010
1980-2005
15,000
45,000
12,000
35,000
9,000
25,000
6,000
15,000
3,000
5,000 0
1985 1990 1995 2000 2005 2010
1980 1985 1990 1995 2000 2005
Source: Historical Statistics of the United States; Global Financial Data; FactSet 28

The Big Fix: Necessary and Sufficient
Three Implications of a Systemic Financial Crisis
• All or a large part of a country’s banking system’s capital is destroyed.
• The crisis has weighed on the broader economy.
• The fiscal cost of the bail-out is significant.
Non-Performing Loans at Peak Indonesia 1997-2002
S. Korea 1997-2002
of Previous Financial Crisis Japan 1991-2002
Thailand 1997-2002
Malaysia 1997-2001
Philippines 1998-2002
Chile 1981–83
Mexico 1994–2000
Finland 1991-1994
Sweden 1991-1994
Argentina 1980–82
0% 20% 40% 60% 80%
Output Loss (% of GDP) Japan 1991–2002
Chile 1981–83
Thailand 1997–2002
Indonesia 1997–2002
Malaysia 1997–2001
Finland 1991–94
S. Korea 1997–2002
Argentina 1980–82
Sweden 1991–94
Philippines 1998–2002
Mexico 1994–2000
0% 20% 40% 60% 80%
Fiscal Cost of Banking Crisis
Argentina 1980–82
(% of GDP) Indonesia 1997–2002
Chile 1981–83
Thailand 1997–2002
S. Korea 1997–2002
Japan 1991–2002
Mexico 1994–2000
Malaysia 1997–2001
Philippines 1998–2002
Finland 1991–94
Sweden 1991–94
Source: World Bank 29
0% 20% 40% 60% 80%

The Big Fix: Necessary and Sufficient
The Crash of ‘08: Three Steps to Recovery
1. Rebuild a functioning banking system. T-bill yields need to rise, LIBOR to fall.
2. Appropriate monetary policy. Innovations in Fed liquidity supply have occurred more rapidly a nd in
greater degree than at any time since the Great Depression, but ECB has lagged.
3. Fiscal stimulus. The appeal of infrastructure investment.
US 3 Mo. T-Bill Yield US 3 Mo. LIBOR Spread over T-Bill
8% 8%
6% 6%
4%
4%
2%
2%
0%
0%
1990 1995 2000 2005 2010
1990 1995 2000 2005 2010
Real ECB Interest Rate
Real Effective US Fed Funds Rate
10%
10%
5%
5%
0% 0%
-5% -5%
1980 1985 1990 1995 2000 2005 2010
1980 1985 1990 1995 2000 2005 2010
Jobs Created by Transportation Investment
(per billion dollars spent)
• The Great Depression made infrastructure an
1,000,000
instrument of social policy.
800,000
600,000
• Economic stimulus, such as infrastructure spending,
400,000
affects demand directly because the government is
200,000
actually purchasing goods and services from the
private sector.
0
0 5 10 15 20
Source: FactSet; Citi investment Research 30

ABERTIS INFRAESTR (ABE.MC -€14.45; 1L); ACCIONA SA (ANA.MC -€81.7; 1M); ACE LTD (ACE.N-$55.34; 1M); ADP (ADP.PA-€53.29; 1M); AEROPORTO VENEZIA (SAVE.MI -€4.59; 1H); AGRIUM INC (AGU.N-
$40.22; 1S); AGUAS DE BARCELONA (AGS.MC -€16.45; 1M); AIR LIQUIDE(L') (AIRP.PA-€71.79; 1L); ALLEGHENY TECHNOLOGIES INC (ATI.N-$28.28; NR); ALSTOM (ALSO.PA- €43.68; 2H); AMERICAN
INTERNATIONAL GROUP (AIG.N-$2.41; 2S); APPLIED MATERIALS INC (AMAT.Q-$13.31; 2M); ARCH CAPITAL GROUP LTD (ACGL.O-$68.35; 1M); ARCHER -DANIELS-MIDLAND CO (ADM.N-$24.33; 2H);
ASCIANO GROUP (AIO.AX-A$2.11; 1H); BABCOCK & BROWN WI (BBW.AX-A$0.93; 1S); BAJAJ HINDUSTHAN (BJHN.BO-Rs104.8; NR); BALRAMPUR CHINI MI (BACH.BO-Rs93.9; NR); BG GROUP (BG.L-£9.8;
1M); BIOFUEL ENERGY CORP (BIOF.O-$0.57; 2S); BORGWARNER INC (BWA.N-$24.48; 1M); BRASIL ECODIESEL I (ECOD3.SA-R$0.93; 2S); BUNGE LTD (BG.N-$45.31; 2S); CF INDUSTRIES HOLDINGS INC
(CF.N-$64.89; 1S); CHESAPEAKE ENERGY CORP (CHK.N -$22.95; 2H); CHINA EVER INTL (0257.HK-HK$0.67; 3L); CIE DE ST-GOBAIN (SGOB.PA -€33; 1M); CINTRA CONCES INFR (CCIT.MC -€7.34; 1M); CITIZEN
HOLDINGS (7762.T-¥2060; 1M); CLIPPER WINDPOWER (CWPR.L-£4.925; NR); CME GROUP INC (CME.O-$319.37; 1M); CONERGY AG (CGYG.DE-€9.15; NR); CONSTELLATION ENERGY GRP INC (CEG.N-
$24.14; 2S); CONTACT ENERGY (CEN.NZ-NZ$7.35; 1M); COSAN SA INDUSTRIA (CSAN3.SA-R$11.26; 1S); CRANE GROUP LTD (CRG.AX-A$9; 2H); CROPENERGIES AG (CE2G.DE-€3; NR); DANAHER CORP
(DHR.N -$62.28; 2M); DEERE & CO (DE.N -$66.04; NR); DOOSAN HEAVY IND (034020.KS-KRW57500; 1M); DU PONT (E I) DE NEMOURS (DD.N-$33.23; 2M); EBRO PULEVA SA (EVA.MC -€10.66; 1M); EMERSON
ELECTRIC CO (EMR.N-$35.86; 1M); EMPRESAS ICA SAB (ICA.MX -P$20.1; 2S); ENERGY DEVELOPMENT (ENE.AX A$3.03; NR); ENERGY RES OF AUST (ERA.AX-A$15; 1H); ENTERGY CORP (ETR.N-$82.29;
-
1M); EPURE INTERNATIONA (EPIL.SI -S$0.31; 1M); ERG SPA (ERG.MI -€10.27; 2H); ESCO TECHNOLOGIES INC (ESE.N-$23.4; NR); EVERGREEN SOLAR INC (ESLR.O-$5.29; 2S); FIRST SOLAR INC (FSLR.Q-
$177.52; 1S); FLUGHAFEN WIEN AG (VIEV.VI -€37.32; 2S); FLUGHAFEN ZURICH A (UZAN.S-SFr322.5; 1M); FLUOR CORP (FLR.N-$42.58; 2H); FORTUM OYJ (FUM1V.HE-€20.92; 1M); FPL GROUP INC (FPL.N-
$47.33; 2M); FRAPORT AG (FRAG.DE-€29.1; 1H); GAMESA CORP TECNO (GAM.MC -€23.96; NR); GAMMON INDIA (GAMM.BO-Rs82.05; 1M); GAZPROM (GAZP.RTS-$5.14; 1L); GDF SUEZ (GSZ.PA-€35.92; 1M);
GENERAL ELECTRIC CO (GE.N-$20.77; 2M); GFI GROUP INC (GFIG.O-$3.57; 2S); GROUPE DANONE (DANO.PA-€45.53; 2M); GRUPO EMPRES ENCE (ENC.M-€3.78; 3M); GRUPO FERROVIAL SA (FER.MC -
€25.79; 1M); HALMA (HLMA.L-£2.005; NR); HOLCIM (HOLN.VX-SFr65.7; 1M); HONDA MOTOR CO (7267.T- ¥2420; 1M); IBERDROLA SA (IBE.MC -€6.19; 1M); ICL-ISRAEL CHEM (ICL.TA-NIS36.59; 1M); IJM CORP
BERHAD (IJMP.KL-RM1.79; 1L); IOI CORP (IOIB.KL-RM3.12; 1L); ITRON INC (ITRI.O-$103.24; NR); ITT CORP (ITT.N-$46.24; 2M); JAIPRAKASH ASSOCIA (JAIA.BO-Rs89.45; 1L); JOHNSON CONTROLS INC
(JCI.N -$19.46; 2M); JOHNSON MATTHEY (JMAT.L-£9.86; 1L); KONINKLIJKE DSM NV (DSMN.AS-€22.36; 2M); KUALA LUMPUR KEPG (KLKK.KL-RM8.2; 1L); KURITA WATER INDS (6370.T-¥2570; 2M); LAFARGE
(LAFP.PA-€54.24; 1H); LEIGHTON HOLDINGS (LEI.AX-A$27.23; 2H); MACQUARIE AIRPORTS (MAP.AX-A$2.2; 1H); MACQUARIE COMM INF (MCG.AX-A$1.5; 2H); MACQUARIE INFRAS G (MIG.AX-A$1.97; 1H);
MACQUARIE INFRASTRUCT CO LLC (MIC.N-$12.48; 1H); MAGNA INTERNATIONAL -CL A (MGA.N-$33.99; 1M); MAKHTESHIM AGAN IN (MAIN.TA-NIS17; 1H); MONSANTO CO (MON.N-$93.74; 1M); MOSAIC CO
(MOS.N-NKr41.74; 1H); MOTECH INDUSTRIES (6244.TWO-NT$101; 3M); NALCO HOLDING CO (NLC.N-$14.93; 1H); NESTE OIL OYJ (NES1V.HE-€13.37; 2H); NESTLE SA (NESN.VX-SFr47.38; 1L); NOBLE
GROUP (NOBG.SI -S$1.01; 1H); NOKIA OYJ (NOK1V.HE-€13.05; 1H); OEST ELEKTRIZITATS (VERB.VI -€41; 2M); ORMAT TECHNOLOGIES INC (ORA.N-$27.5; 2S); PALADIN ENERGY LTD (PDN.AX-A$2.47; 1H);
PEUGEOT SA (PEUP.PA-€22.15; 2H); PHILIPS ELEC(KON) (PHG.AS-€16.02; 2M); POTASH CORP SASK INC (POT.N-$94.07; 1H); PROMOTORA AMBIENTA (PASAB.MX P$11.25; 2S); Q-CELLS AG (QCEG.DE-
-
€40.72; 1M); RHODIA (RHA.PA-€12.86; NR); ROPER INDUSTRIES INC/DE (ROP.N-$46.31; 1M); ROTORK (ROR.L-£10.82; NR); RPS GROUP (RPS.L-£1.73; 3M); RWE AG (NEU) (RWEG.DE-€69.8; 1M);
SCHNEIDER ELECTRIC (SCHN.PA-€50.25; 1H); SHARP CORP (6753.T-¥744; 3H); SHAW GROUP INC (SGR.N-$20.61; 3S); SHOWA DENKO KK (4004.T-¥161; 1M); SIEMENS AG (SIEGn.DE-€50.38; 1H); SIG
(SHI.L-£2.78; 2H); SOLARWORLD AG (SWVG.DE-€24.11; 1H); SOUTHWESTERN ENERGY CO (SWN.N -$37.22; 2H); SPX CORP (SPW.N-$42.1; 1M); STANLEY ELECTRIC (6923.T-¥1345; 1M); SUNPOWER CORP
(SPWRA.O-$50.5; 3S); SUNTECH POWER HOLDINGS -ADR (STP.N-$45.97; NR); SUZLON ENERGY LIMI (SUZL.BO-55.4NKr; 3M); SWISS REINSURANCE (RUKN.VX-SFr56.45; 1H); SYNGENTA (SYNN.VX-
SFr223.9; 1L); TENNECO INC (TEN.N-$4.71; 2S); TERRA INDUSTRIES INC (TRA.N-$22.99; 1S); THERMAX (THMX.BO-Rs330.8; 1L); TOYOTA MOTOR CORP (7203.T-¥3850; 3M); TRANSURBAN GROUP (TCL.AX-
A$5.55; 2M); UMICORE (UMI.BR -€15.3; 1M); URALKALI (URKAq.L-£23; 1M); UTD GROUP LTD (UGL.AX-A$10.4; 2H); VEOLIA ENVIRONNEME (VIE.PA-€20.59; 2H); VERASUN ENERGY CORP (VSE.N-$28.54; 2S);
VESTAS WIND SYSTEM (VWS.CO-DKr311; 2H); WACKER CHEMIE AG (WCHG.DE-€96.74; 1H); XTO ENERGY INC (XTO.N-$37.25; 2H); YARA INTERNATIONAL (YAR.OL-NKr150; 1H);
Prices as of November 4th, 2008
Citi Private Bank Disclosures:
In the United Kingdom, this document is approved by Citibank, N.A. Citibank N.A., London, and Citibank International plc, Citigroup Centre, Canada Square, Canary Wharf, London, E14 5LB are aut horized and
regulated by the Financial Services Authority. If you have any doubt about the suitability of this investment, you should contact Citi Private Bank for advice.
Morgan Stanley Capital International Inc.’s (“MSCI”) MSCI Standard Index Series section of the MSCI Web Site contains documents regarding the MSCI Standard Index Series (collectiv ely, along with any other
information on this MSCI Standard Index Series section of the MSCI Web Site, “MSCI Standard Index Series Materials”). The MSCI Standard Index Series Materials have been prepared solely for informational
purposes. None of the MSCI Standard Index Series Materials are a recommendation to participate in any particular trading strategy and none may be relied on as such. The user of the information contained in the
MSCI Standard Index Series Materials assumes the entire risk of any use made of the information provided therein.
Neither MSCI, its affiliates, nor any other party involved in making or compiling any of MSCI’s indices, makes any express or implied warranties or representations with respect to the information contained in the MSCI
Standard Index Series Materials (or the results to be obtained b the use thereof), and MSCI, its affiliates, and any other party involved in making or compiling any of MSCI’s indices, hereby expressly disclaims all
y
warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no ev ent shall MSCI, its affiliates, or
any other party involved in making or compiling any of MSCI’s indices, have any liability relating to the MSCI Standard Index Series Materials for any direct, indirect, special, punitive, consequential or any other
damages (including lost profits) even if notified of the possibility of such damages.
The MSCI Standard Index Series Materials may not be reproduced or redisseminated in any form without prior written permission from MSCI. You may not use or permit use of any information in the MSCI Standard
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the writing, trading, marketing or promotion of any financial instruments or products or to create any indices (custom or otherwise).
31

Appendix A-1
ANALYST CERTIFICATION
Each research analyst(s) principally responsible for the preparation and content of all or any identified portion of this research report hereby certifies that, with respect to each issuer or security
or any identified portion of the report with respect to an issuer or security that the research analyst covers in this research report, all of the views expressed in this research report accurately
reflect their personal views about those issuer(s) or securities. Each research analyst(s) also certify that no part of their c ompensation was, is, or will be, directly or indirectly, related to the
specific recommendation(s) or view(s) expressed by that research analyst in this research report.
IMPORTANT DISCLOSURES
Customers of the Firm in the United States can receive independent third-party research on the company or companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research at
http://www.smithbarney.com (for retail clients) or http://www.citigroupgeo.com (for institutional clients) or can call (866) 836-9542 to request a copy of this research.
A director of Citi is a director of E. I. DuPont Nemours & Co.
A director of Lafarge S.A. serves as a director on Citi's International Advisory Board.
A seat on the board of directors of Empresas Ica SA is held by one or more members of the board of directors of Citigroup Global Markets Inc. or its affilliates.
An employee of Citigroup Global Markets is on the Advisory Board of Fraport AG
CItigroup Global Markets (Australia) Pty Ltd acted as Joint Bookrunner and Joint Lead Manager on Paladin Energy Ltd's (PDN.AX) unsecured convertible bond offering.
Citi is acting as exclusive financial advisor to Owens Corning in its acquisition of Saint Gobain's Reinforcement and Composites Business
Citigroup Global Markets Inc. is acting as a financial advisor to Saudi Basic Industries Corp. An employee of Citigroup Global Markets is a member of the Advisory Board of General Electric Europe.
Citigroup Global Markets Inc. is acting as financial advisor to EDO Corporation in its proposed purchase by ITT Corporation.
Citigroup Global Markets Inc. is serving as financial advisor to Entergy Corporation in its proposed spin-off and joint venture transactions concerning Entergy•fs non- utility nuclear business.
Citigroup Global Markets Korea Securities Limited (CGMK) performs the role of liquidity provider on the warrants of which the underlying asset is Doosan Heavy. As at 06 Nov 08, CGMK holds 2,986,700 Citi ELW 8051, 1,840,950 Citi ELW 8106, 2,999,690 Citi ELW
8122, 2,999,980 Citi ELW 8159, 2,961,030 Citi ELW 8195, 3,000,000 Citi ELW 8236 Call warrants & 7,319 shares of Doosan Heavy.
Citigroup Global Markets Limited is acting as advisor to Yara International ASA on the acquisition of Saskferco Products Inc.
Citigroup Global Markets Limited is acting as advisor to the French State regarding the disposal of minority stakes in listed airport operator Aeroports de Paris
Citigroup Global Markets is acting as adviser to Koninklijke Numico NV in relation to the offer by Groupe Danone
Citigroup Global Markets is advising Groupe Danone SA in relation to the potential sale of its biscuit unit to Kraft Foods Inc
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Allegheny Technologies Inc, American International Group, Archer Daniels Midland Company, Bajaj Hindustan Ltd, Bunge Limited, CF Indust ries
Holdings Inc, Chesapeake Energy Corporation, Deere & Co, First Solar, Inc., Itron Inc, Johnson Controls Inc., Monsanto, Paladin Energy Ltd, Rhodia SA, RWE, Showa Denko, Siemens, SolarWorld and VeraSun Energy. This position reflects information available as
of the prior business day.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of ACE Limited, American In ternational Group, Archer Daniels Midland Company, Aéroports de Paris, Brasil Ecodiesel S.A.,
Chesapeake Energy Corporation, Constellation Energy Group Inc, Danone, Deere & Co, E I du Pont de Nemours and Co, Entergy Corporation, Fortum, Fraport, Gammon India, Gazprom, General Electric, Honda Motor, IBERDROLA, IOI, Israel Chemicals,
Monsanto, Mosaic Co, Noble Group, Paladin Energy Ltd, Philips, Potash Corp of Saskatchewan Inc, SPX Corporation, Suzlon Energy, Toyota Motor, Uralkali OAO, Verbund AG and XTO Energy.
Citigroup Global Markets Inc. or its affiliates has received com pensation for investment banking services provided within the past 12 months from Abertis, Acciona, Aguas de Barcelona, Air Liquide, American International Group, Applied Materials Inc., Archer Daniels
Midland Company, Aéroports de Paris, Brasil Ecodiesel S.A., Bunge Limited, CF Industries Holdings Inc, Chesapeake Energy Corporation, Cintra, Constellation Energy Group Inc, Danaher Corp., Danone, Deere & Co, Doosan Heavy Industries & Construction,
DSM, E I du Pont de Nemours and Co, Empresas Ica SAB de CV, Energy Resources of Australia Ltd, Entergy Corporation, ERG, Ferrovial, Fluor, Fortum, FPL Group, Gamesa , Gammon India, Gazprom , GDF Suez, General Electric, Holcim, Honda Motor,
IBERDROLA, IOI, ITT Corp., Lafarge, Leighton Holdings Ltd, Macqu arie Infrastructure Company Trust, Macquarie Infrastructure Group, Magna International Inc, Monsanto, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia Corporation, Paladin Energy Ltd,
Philips, RWE, Schneider Electric, Siemens, SPX Corporation, Suez, Suzlon Energy, Swiss Re, Syngenta, Tenneco Inc, Terra Industries Inc, Toyota Motor, Uralkali OAO, Verbund AG, XTO Energy and Yara International.
Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Acciona, Air Liquide, Allegheny Technologies Inc, American International Group, Archer Daniels
Midland Company, Aéroports de Paris, BorgWarner, Inc., Bunge Limited, Chesapeake Energy Co rporation, Cintra, Danone, Deere & Co, DSM, Empresas Ica SAB de CV, Entergy Corporation, Ferrovial, Fortum , Gazprom , GDF Suez, General Electric, ITT Corp.,
-
Macquarie Infrastructure Company Trust, Macquarie Infrastructure Group, Neste Oil, Nokia Corporation, Q Cells, RWE, Toyota Motor, Verbund AG and Yara International.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking serv ices from Abertis, Acciona, Agrium Inc, Aguas de Barcelona, Air Liquide, Allegheny Technologies Inc, Alstom, American International
Group, Applied Materials Inc., Arch Capital Group Ltd., Archer D aniels Midland Company, Asciano Group, Aéroports de Paris, Bajaj Hindustan Ltd, Balrampur Chini Mills Ltd, BG Group, BorgWarner, Inc., Brasil Ecodiesel S.A., Bunge Limited, CF Industries Holdings
Inc, Chesapeake Energy Corporation, Cintra, Citizen Watch, CME Group Inc, Constellation Energy Group Inc, Contact Energy Ltd, Danaher Corp., Danone , Deere & Co, Doosan Heavy Industries & Construction, DSM, E I du Pont de Nemours and Co, Ebro Puleva,
Emerson, Empresas Ica SAB de CV, Energy Resources of Australia Ltd, Entergy Corpo ration, ERG, Ferrovial, First Solar, Inc., Fluor, Fortum, FPL Group, Fraport, Gamesa , Gammon India, Gazprom , GDF Suez, General Electric, GFI Group Inc, Holcim, Honda
Motor, IBERDROLA, IOI, Israel Chemicals, Itron Inc, ITT Corp., Jaiprakash, Johnson Controls Inc., Johnson Matthey, KL Kepong, Lafarge, Leighton Holdings Ltd, Macquarie Communications Infrastructure, Macquarie Infrastructure Company Trust, Macquarie
Infrastructure Group, Magna International Inc, Makhteshim, Monsanto, Mosaic Co, Motech Industries, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia Corporation, Ormat Technologies Inc, Paladin Energy Ltd, Philips, Potash Corp of Saskatchewan Inc,
Promotora Ambiental SAB de CV, PSA Peugeot Citroën, Q- Cells, Rhodia SA, Roper Industries Inc, RWE, Saint Gobain , Schneider Electric, Sharp, Showa Denko, Siemens, SIG Plc, SPX Corporation, Stanley Electric, Suez, SunPower Corporation, Suzlon Energy,
Swiss Re, Syngenta, Tenneco Inc, Terra Industries Inc, Thermax , Toyota Motor, Umicore, Veolia Environnement, Verbund AG, XTO Energy and Yara International in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the p ast 12 months, the following company(ies ) as investment banking client(s ): Abertis, Acciona, Aguas de Barcelona, Air Liquide, Allegheny Technologies Inc, American International Group, Applied
Materials Inc., Archer Daniels Midland Company, A éroports de Paris, BioFuel Energy Corp, BorgWarner, Inc., Brasil Ecodiesel S.A., Bunge Limited, CF Industries Holdings Inc, Chesapeake Ene rgy Corporation, Cintra , CME Group Inc, Constellation Energy Group
Inc, Danaher Corp., Danone, Deere & Co, Doosan Heavy Industries & Construction, DSM, E I du Pont de Nemours and Co, Empresas Ica SAB de CV, Energy Resources of Australia Ltd, Entergy Corpo ration, ERG, Ferrovial, Fluor, Fortum, FPL Group, Gamesa,
Gammon India, Gazprom, GDF Suez, General Electric, GFI Group Inc, Holcim, Honda Motor, IBERDROLA, IOI, ITT Corp., Jaiprakash, Lafarge, Leighton Holdings Ltd, Macquarie Infrastructure Company Trust, Macquarie Infrastructure Group, Magna International
Inc, Monsanto, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia Corporation, Paladin Energy Ltd, Philips, Q-Cells, RWE, Schneider Electric, Siemens, SPX Corporation, Suez, Suzlon Energy, Swiss Re, Syngenta, Tenneco Inc, Terra Industries Inc, Toyota
Motor, Uralkali OAO, Verbund AG, XTO Energy and Yara International.
32

IMPORTANT DISCLOSURES
Citigroup Global Markets Inc. currently has, or had within the p ast 12 months, the following company(ies ) as clients, and the services provided were non-investment- banking, securities-related: Abertis, Acciona, Agrium Inc, Air Liquide, Allegheny Technologies Inc,
Alstom, American International Group, Applied Materials Inc., Arch Capital Group Ltd., Archer Daniels Midland Company, Aéroports de Paris, Balrampur Chini Mills Ltd, BG Group, BorgWarner, Inc., Brasil Ecodiesel S.A., Bunge Limited, CF Industries Holdings Inc,
Chesapeake Energy Corporation, Cintra , Citizen Watch, CME Group Inc, Constellation Energy Group Inc, Contact Energy Ltd, Danaher Corp., Danone, Deere & Co, Doosan Heavy Industries & Construction, DSM, E I du Pont de Nemours and Co, Ebro Puleva,
Emerson, Empresas Ica SAB de CV, Energy Resources of Australia Ltd, Entergy Corpo ration, ERG, Ferrovial, First Solar, Inc., Fluor, Fortum, FPL Group, Fraport, Gamesa , Gammon India, Gazprom , GDF Suez, General Electric, GFI Group Inc, Holcim, Honda
Motor, IBERDROLA, IOI, Israel Chemicals, Itron Inc, ITT Corp., Jaiprakash, Johnson Controls Inc., Johnson Matthey, KL Kepong, Kurita Wate r Industries, Lafarge, Leighton Holdings Ltd, Macquarie Communications Infrastructure, Macquarie Infrastructure Company
Trust, Macquarie Infrastructure Group, Magna International Inc, Makhteshim, Monsanto, Motech Industries, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia Corporation, Ormat Technologies Inc, Paladin Energy Ltd, Philips, Potash Corp of Saskatchewan
Inc, Promotora Ambiental SAB de CV, PSA Peugeot Citroën, Rhodia SA, Roper Industries Inc, RWE, Saint Gobain, Schneider Electric, Sharp, Siemens, SIG Plc, SPX Corporation, Stanley Electric, Suez, SunPower Corporation, Suzlon Energy, Swiss Re, Syngenta ,
Tenneco Inc, Terra Industries Inc, Thermax , Toyota Motor, Umicore, Veolia Environnement, Verbund AG, XTO Energy and Yara International.
Citigroup Global Markets Inc. currently has, or had within the p ast 12 months, the following company(ies ) as clients, and the services provided were non-investment- banking, non-securities-related: Abertis, Acciona , Agrium Inc, Aguas de Barcelona, Air Liquide,
Allegheny Technologies Inc, Alstom , American International Group, Applied Materials Inc., Arch Capital Group Ltd., Archer Daniels Midland Company, Asciano Group, A éroports de Paris, Bajaj Hindustan Ltd, Balrampur Chini Mills Ltd, BG Group, BorgWarner, Inc.,
Brasil Ecodiesel S.A., Bunge Limited, CF Industries Holdings Inc, Chesapeake Ene rgy Corporation, Cintra, Citizen Watch, CME Group Inc, Constellation Energy Group Inc, Contact Energy Ltd, Danaher Corp., Danone , Deere & Co, Doosan Heavy Industries &
Construction, DSM, E I du Pont de Nemours and Co, Ebro Puleva, Emerson, Empresas Ica SAB de CV, Energy Resources of Australia Ltd, Entergy Corpo ration, ERG, Ferrovial, First Solar, Inc., Fluor, Fortum, FPL Group, Fraport, Gamesa, Gammon India,
Gazprom, GDF Suez, General Electric, GFI Group Inc, Holcim, Honda Motor, IBERDROLA, IOI, Israel Chemicals, Itron Inc, ITT Corp., Jaiprakash, Johnson Controls Inc., Johnson Matthey, KL Kepong, Lafarge, Leighton Holdings Ltd, Macquarie Communications
Infrastructure, Macquarie Infrastructure Company Trust, Macquari e Infrastructure Group, Magna International Inc, Makhteshim, Monsanto, Mosaic Co, Motech Industries, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia Corporation, Ormat Technologies Inc,
Paladin Energy Ltd, Philips, Potash Corp of Saskatchewan Inc, Promotora Ambiental SAB de CV, PSA Peugeot Citroën, Q- Cells, Rhodia SA, Roper Industries Inc, RWE, Saint Gobain, Schneider Electric, Sharp, Showa Denko, Siemens, SIG Plc, SPX Corporation,
Stanley Electric, Suez, Suzlon Energy, Swiss Re, Syngenta, Tenneco Inc, Terra Industries Inc, Thermax , Toyota Motor, Umicore , Veolia Environnement , Verbund AG, XTO Energy and Yara International.
Citigroup Global Markets Inc. or an affiliate received compensation in the past 12 months from American International Group, Brasil Ecodiesel S.A., CME Group Inc, Constellation Energy Group Inc, E I du Pont de Nemours and Co, Empresas Ica SAB de CV,
-Cells and Terra Industries Inc.
Entergy Corporation, GFI Group Inc, Jaiprakash, Macquarie Infrastructure Company Trust, Macquarie Infrastructu re Group, Monsanto, Nalco Holding, Noble Group, Q
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates (\"the Firm\"). Like all Firm employees, analysts receive compensation that is impacted by overall firm
profitability, which includes revenues from, among other business units, the Private Client Division, Institutional Sales and Trading, and Investment Banking.
The Firm is a market maker in the publicly traded equity securities of , Air Liquide, Applied Materials Inc., Arch Capital Group Ltd., BG Group, BioFuel Energy Corp, CME Group Inc, Danone, DSM, Evergreen Solar Inc., First Solar, Inc., Gazprom, GFI Group Inc,
IBERDROLA, Itron Inc, Lafarge, Nestle SA, PSA Peugeot Citro ën, Q-Cells, RWE, Sharp, SunPower Corporation, Swiss Re, VeraSun Energy, Vestas Wind Systems and Yara International.
For important disclosures (including copies of historical disclosures) regarding the companies that are the subject of this Citi Investment Research product (\"the Product\"), please contact Citi Investment Research, 388 Greenwich Street, 29th Floor, New York, NY,
10013, Attention: Legal/Compliance. In addition, the same important disclosures, with the exception of the Valuation and Risk assessments and historical disclosures, are contained on the Firm's disclosure website at www.citigroupgeo.com. Private Client Division
clients should refer to www.smithbarney.com/research. Valuation and Risk assessments can be found in the text of the most recent research note/report regarding the subject company. Historical disclosures (for up to the past three yea rs) will be provided upon
request.
Citi Investment Research Ratings Distribution
Data current as of 30 September 2008 Buy Hold Sell
Citi Investment Research Global Fundamental Coverage (3133) 47% 37% 16%
48% 48% 40%
% of companies in each rating category that are investment banking clients
Guide to Fundamental Research Investment Ratings:
Citi Investment Research's stock recommendations include a risk rating and an investment rating.
Risk ratings, which take into account both price volatility and fundamental criteria, are: Low (L), Medium (M), High (H), and Speculative (S).
Investment ratings are a function of Citi Investment Research's expectation of tot al return (forecast price appreciation and dividend yield within the next 12 months) and risk rating.
For securities in developed markets (US, UK, Europe, Japan, and Australia/New Zealand), investment ratings are: Buy (1) (expected total return of 10% or more for Low - Risk stocks, 15% or more for Medium- Risk stocks, 20% or more for High-Risk stocks, and 35%
or more for Speculative stocks); Hold (2) (0% -10% for Low - Risk stocks, 0% -15% for Medium-Risk stocks, 0% -20% for High- Risk stocks, and 0% -35% for Speculative stocks); and Sell (3) (negative total return ).
For securities in emerging markets (Asia Pacific, Emerging Europe/Middle East/Africa, and Latin America), investment ratings are: Buy (1) (expected total return of 15% or more for Low - Risk stocks, 20% or more for Medium- Risk stocks, 30% or more for High-Risk
stocks, and 40% or more for Speculative stocks); Hold (2) (5% -15% for Low - Risk stocks, 10% -20% for Medium- Risk stocks, 15% -30% for High-Risk stocks, and 20% -40% for Speculative stocks); and Sell (3) (5% or less for Low -Risk stocks, 10% or less for
Medium- Risk stocks, 15% or less for High- Risk stocks, and 20% or less for Speculative stocks).
Investment ratings are determined by the ranges described above at the time of initiation of coverage, a change in investment an d/or risk rating, or a change in target price (subject to limited management discretion). At other times, the expected total returns may fall
outside of these ranges because of market price movements and/or other short-term volatility or trading patterns. Such interim deviations from specified ranges will be permitted but will become subject to review by Research Management. Your decision to buy or
sell a security should be based upon your personal investment objectives and should be made only after evaluating the stock's ex pected performance and risk.
Guide to Corporate Bond Research Credit Opinions and Investment Ratings: Citi Investment Research's corporate bond research issuer publications include a fundamental credit opinion of Improving, Stable or Deteriorating and a complementary risk rating of Low
(L), Medium (M), High (H) or Speculative (S) regarding the credit risk of the company featured in the report. The fundamental credit opinion reflects the CIR analyst's opinion of the direction of credit fundamentals of the issuer without respect to securi ties market
vagaries. The fundamental credit opinion is not geared to, but should be viewed in the context of, debt ratings issued by major public debt ratings companies such as Moody's Investors Service, Standard and Poor's, and Fitch Ratings. CBR risk ratings are
approximately equivalent to the following matrix: Low Risk -- Triple A to Low Double A; Low to Medium Risk -- High Single A through High Triple B; Medium to High Risk -- Mid Triple B through High Double B; High to Speculative Risk -- Mid Double B and Below.
The risk rating element illustrates the analyst's opinion of the relative likelihood of loss of principal when a fixed income security issued by a company is held to maturity, based upon both fundamental and market risk factors. Certain reports published by Citi
Investment Research will also include investment ratings on specific issues of companies under coverage which have been assigned fundamental credit opinions and risk ratings. Investment ratings are a function of Citi Investment Research's expectations for total
return, relative return (relative to the performance of relevant Citi bond indices), and risk rating. These investment ratings are: Buy/Overweight -- the bond is expected to outperform the relevant Citigroup bond market sector index (Broad Investment Grade, High
Yield Market or Emerging Market); Hold/Neutral Weight -- the bond is expected to perform in line with the relevant Citigroup bond market sector index; or Sell/Underweight -- the bond is expected to underperform the relevant Citigroup bond market sector index.
Performance data for Citi bond indices are updated monthly, are available upon request and can also be viewed at http://sd.ny.ssmb.com/ using the \"Indexes\" tab.
33

OTHER DISCLOSURES
Citigroup Global Markets Inc. and/or its affiliates has a significant financial interest in relation to Abertis, ACE Limited, Air Liquide, Allegheny Technologies Inc, Alstom, American International Group, Applied Materials Inc., Arch Capital Group Ltd., Archer Daniels
Midland Company, Balrampur Chini Mills Ltd, BorgWarner, Inc., CME Group Inc, Constellation Energy Group Inc, Contact Energy Ltd, Danaher Corp., Danone, Deere & Co, DSM, Emerson, Entergy Corporation, Ferrovial, Fortum, FPL Group, Gazprom, GDF Suez,
General Electric, Holcim, Honda Motor, IBERDROLA, ITT Corp., Johnson Controls Inc., Johnson Matthey, Lafarge, Leighton Holdings Ltd, Macquarie Infrastructure Company Trust, Magna International Inc, Nalco Holding, Neste Oil, Nestle SA, Noble Group, Nokia
Corporation, Philips, Potash Corp of Saskatchewan Inc, PSA Peugeot Citroën, Q-Cells, Rhodia SA, Roper Industries Inc, RWE, Saint Gobain, Schneider Electric, Siemens, SPX Corporation, Suez, Swiss Re, Syngenta, Terra Industries Inc, Veolia Environnement ,
XTO Energy and Yara International. (For an explanation of the determination of significant financial interest, please refer to the policy for managing conflicts of interest which can be found at www.citigroupgeo.com.)
Citigroup Global Markets Inc. or its affiliates beneficially owns 2% or more of any class of common equity securities of Archer Daniels Midland Company, Rhodia SA, RWE and Showa Denko.
Citigroup Global Markets Inc. or its affiliates beneficially owns 5% or more of any class of common equity securities of Bajaj Hindustan Ltd and Paladin Energy Ltd.
For securities recommended in the Product in which the Firm is not a market maker, the Firm is a liquidity provider in the issue rs' financial instruments and may act as principal in connection with such transactions. The Firm is a regular issuer of traded financial
instruments linked to securities that may have been recommended in the Product. The Firm regularly trades in the securities of t he subject company(ies) discussed in the Product. The Firm may engage in securities transactions in a manner inconsistent with the
Product and, with respect to securities covered by the Product, will buy or sell from customers on a principal basis.
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