Actionable trade ideas for stock market investors and traders seeking alpha by overlaying their portfolios with options, other derivatives, ETFs, and disciplined and applied Game Theory for hedge fund managers and other active fund managers worldwide. Ryan Renicker, CFA

1. April 4, 2006
Equity Volatility Snapshot
Ryan Renicker, CFA • Macro: Implied Volatility Trends By Style. Value stocks have continued to outperform growth
1.212.526.9425 stocks in 2006. We find that aggregate implied volatility for both styles have been on a similar
ryan.renicker@lehman.com downtrend and growth stocks’ implied volatilities tend to trade at a premium relative to value.
Devapriya Mallick However, the average implied vs realized spread has been tighter for growth than value.
1.212.526.5429
dmallik@lehman.com
• Sector Spotlight: Retailing. During the past year, the Retailing industry group has generally
performed in line with the S&P 500. However, average implied volatility for Retailing stocks
remains low relative to S&P 500 implied volatility. We believe investors should consider
expressing directional views or going long volatility among names within the Retailing industry
having particularly cheap options.
• Weekly Roadmap. We provide a filtered list of expected events for the upcoming week to
provide a roadmap for proactively constructing option trade ideas or preparing for events that
could impact certain stocks having liquid options trading on them.
• Volatility Screen. We update our Volatility Screen to identify stocks possibly having rich or cheap
options. Investors can use this screen as a starting point to quickly identify options for efficient
expression of directional views or long or short volatility positions. This interactive screen is
updated on a daily basis and has other user-friendly features, such as a customized “download
portfolio” capability.
• Earnings Watch. We also update our Earnings Watch. This tool incorporates implied volatility
information to estimate the expected stock price reaction the options market is pricing in for
upcoming earnings announcements.
Lehman Brothers does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report.
Customers of Lehman Brothers 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 www.lehmanlive.com or can call 1-800-2LEHMAN to request a copy of this research.
Investors should consider this report as only a single factor in making their investment decision.
PLEASE SEE ANALYST(S) CERTIFICATION AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 8.

2. Equity Derivatives Strategy | Equity Volatility Snapshot
Macro Overview: Value Outperforms Growth, yet Vols Trend Similarly
Value stocks have been Within the large-cap universe, value stocks have recently outperformed growth stocks. The S&P
outperforming growth 500/Citigroup Value index outperformed its growth counterpart by 1.03% in 2005 and 3.3% this
stocks in recent periods.
year alone. In addition, we observe a similar relationship between the S&P pure style indexes; these
indexes isolate stocks with more predominant growth and value characteristics. The S&P
500/Citigroup Pure Growth Index underperformed its value counterpart by 4.32% in 2005, and has
risen 2.76% thus far in 2006 versus a 4.71% rise in the value Index.
Growth stocks tend to Given these contrasting return patterns in the cash market, we compare aggregate implied volatilities
trade at higher implied for the two style indexes to identify potential style investing biases in the options market. After analyzing
vols than value stocks…
the average implied volatility (weighted by market capitalization) for pure value and growth stocks, we
found that there have been fewer relative value opportunities from an aggregate level volatility
perspective, as they have both had similar downward trends in implied volatility (Figure 1). In terms of
the absolute levels of volatility, we find that growth stocks tend to trade at an average premium of over
2 vol points relative to value stocks. This was observed on both an implied and realized basis.
…however, the implied However, it is interesting to note that options on growth stocks have, on average, tended to trade at a
vs realized spread is far tighter implied-realized spread relative to options on value stocks (Figure 2). For options on stocks in
lower.
the pure value index, implied volatility has traded at an average premium of about 1.4% over realized
volatility year to date. On the other hand, volatility sellers in growth names have had an average
premium of only 60 bps this year. In addition, there were even brief instances in March when implied
volatility dipped below realized volatility. We believe this indicates the value style category tends to
provide more opportunities for systematic volatility sellers owing to lower average realized volatility,
even though implied volatility for value stocks trades lower than that of growth stocks.
Figure 1: Growth Stocks Trade at Higher Average Implied Vols Figure 2: Options on Growth Stocks Trade at Tighter Spreads
24% 3.0%
Implied vs Realized (Growth)
2.5% Implied vs Realized (Value)
23%
2.0%
22%
1.5%
21%
1.0%
20%
0.5%
Wgt Avg Implied Vol (Growth Stocks)
19% 0.0%
Wgt Avg Implied Vol (Value Stocks)
18% -0.5%
ar
ar
ar
ar
ar
ar
ar
ar
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an
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n
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an
an
an
an
eb
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Ja
Ja
Fe
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a
a
M
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-M
-M
-M
-M
-M
-M
-J
-J
-J
-J
-J
-J
-J
-J
-F
-F
-F
-F
-F
-F
3-
7-
3-
7-
7-
7-
10
17
24
31
14
21
28
10
17
24
31
14
21
28
14
21
28
14
21
28
Source: Lehman Brothers, OptionMetrics, Bloomberg Source: Lehman Brothers, OptionMetrics, Bloomberg
April 4, 2006 2

3. Equity Derivatives Strategy | Equity Volatility Snapshot
Sector Spotlight: Retail Complacency?
During the past year, the Retailing industry group has generally performed in line with the S&P 500
Index (Figure 3). We believe this relatively strong correlation is likely driven by increasing investor
focus on macroeconomic conditions (such as rising short-term rates and consumers’ disposable income)
that are becoming more relevant performance and risk factors for both the SPX and industries having
particularly high exposure to macro factors. One such industry is Retailing (particularly the mid-to-low
end retail segment).
From a volatility perspective, we believe the options market is currently pricing in very low risk
expectations for retailers, which have declined since the beginning of this year. In fact, short-dated
implied volatility for the Retailing industry remains near its one year low relative to that of the S&P 5001
(Figure 4).
Given the relatively strong performance of the Retailing industry (particularly since calendar Q4), the
host of macro-related factors that could impact consumer spending, the historical tendency of the
industry to have a relatively high exposure to a flat/inverted yield curve scenario, and its cheap
implied volatility levels, we believe investors should consider expressing directional views or going
long volatility among names within the Retailing industry having particularly cheap options.
Figure 3: S&P 500 and Retailing Performance Similar Figure 4: Retailing Implied Volatility Cheap Relative to S&P 500
115 18%
S&P 500 Retailing Index
S&P 500 17%
110
Retailing 3M - 66D Realized Vol
16%
Performance (Scaled)
105 15%
14%
100
13%
12%
95
11% Retailing Implied Vol Relative to S&P 500
90
10%
5 5 05 5 05 05 5 5 5 06 06 6
r-0 -0 l-0 g- p- -0 -0 -0 -0
n- n- b- ar
5
05
05
06
ct
05
5
5
06
6
5
ay
05
05
ov ec
l-0
Ju
-0
-0
-0
-0
Ap Ju Au Se Ja Fe
p-
-
n-
n-
b-
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r-
O
ov
M ec
ay
ar
ct
M N D
Ju
Ju
Ja
Ap
Se
Fe
Au
O
M
N
D
M
Source: Lehman Brothers, Bloomberg Source: Lehman Brothers, OptionMetrics, Bloomberg
1
We calculate the implied volatility for the retailing industry group by using the market-cap weighted average 3-month at-
the-money implied volatility for the current constituents of the S&P 500 Retailing Industry Group.
April 4, 2006 3

4. Equity Derivatives Strategy | Equity Volatility Snapshot
Weekly Roadmap (4/5 – 4/11)
In this section, we provide a filtered list of expected events for the upcoming week to provide a
roadmap for constructing option trade ideas at the single-stock level. In a nutshell, our filter excludes
events involving stocks that either do not have listed options or names having options that lack a
reasonable level of liquidity. The current list of events we screen for include the following:
Earnings Reports and Times
Corporate Analyst Meetings
Corporate Calls & Presentations
Shareholder Meetings
Brokerage Analyst Meetings
Brokerage Analyst Calls
Our universe includes S&P 500 and/or Nasdaq 100 constituents, and excludes stocks having prices
below $5.
Figure 5: Weekly Roadmap
Closing
Expected
Ticker Company Event Price SPX? MID? NDX?
Time
(4/3/06)
Expected Event Date: April 5 (Wed.)
ADSK AUTODESK INC Analyst Meeting Before Open 37.25 Yes No Yes
BBBY BED BATH & BEYOND INC Earnings Before Open 37.95 Yes No Yes
MON MONSANTO CO Earnings Before Open 86.65 Yes No No
APOL APOLLO GROUP INC-CL A Analyst Meeting After Close 51.55 Yes No Yes
Expected Event Date: April 6 (Thurs.)
Retail Same Store Sales - Before Open
APOL APOLLO GROUP INC-CL A Analyst Meeting Intraday 51.55 Yes No Yes
STZ CONSTELLATION BRANCS INC Earnings After Close 25.25 Yes No n
RIMM RESEARCH IN MOTION Earnings After Close 85.45 No No Yes
Expected Event Date: April 7 (Friday)
Nonfarm Payrolls - Before Open
ESRX EXPRESS SCRIPTS INC Analyst Meeting Intraday 87.63 Yes No Yes
BHI BAKER HUGHES INC March '06 Intl. Rig Count Released Before Open 67.75 Yes No No
Expected Event Date: April 8 (Sat.)
None Expected
Expected Event Date: April 9 (Sunday)
None Expected
Expected Event Date: April 10 (Monday)
AA ALCOA INC Earnings N/A 30.90 Yes No No
Expected Event Date: April 11 (Tuesday)
RHAT RED HAT INC Analyst Meeting Before Open 27.91 No No Yes
Source: Lehman Brothers, Thomson
April 4, 2006 4

5. Equity Derivatives Strategy | Equity Volatility Snapshot
Volatility Screen
We update the list of stocks identified by the Lehman Brothers Volatility Screen as possibly having rich
or cheap options. This screen allows investors to identify potentially rich or cheap one or three month
options to efficiently express directional views on the underlying stock or identify attractive long or short
volatility candidates. In Figure 6, we present the current list of stocks having relatively rich options.
Figure 6: Stocks Displaying “Rich” Volatility Characteristics
Std Devs from Std Devs from Std Devs from
Lehman Expected 3-Month
Lehman Mean (3-Month Mean (3-Month Mean (3-Month
Ticker Name GICS Sector Company Price Earnings Implied Rich/Cheap
Sector View Implied vs Implied vs Implied vs S&P
Rating Date Volatility
Realized) Sector) 500)
AVP AVON PRODUCTS INC Consumer Staples 3-Underweight 2-Neutral 30.74 4/28/2006 27% 1.5 1.0 1.1 Rich
BOL BAUSCH & LOMB INC Health Care 3-Underweight 1-Positive 61.25 4/28/2006 33% 1.8 3.3 2.8 Rich
CELG CELGENE CORP Health Care 2-Equal weight 2-Neutral 42.85 4/28/2006 49% 1.2 1.4 1.3 Rich
DBD DIEBOLD INC Information Technology 0-Unrated 0-Unrated 41.05 4/20/2006 25% 1.3 1.1 1.1 Rich
EQR EQUITY RESIDENTIAL Financials 2-Equal weight 2-Neutral 46.25 5/3/2006 21% 1.6 1.4 1.2 Rich
GM GENERAL MOTORS CORP Consumer Discretionary 2-Equal weight 3-Negative 20.14 4/19/2006 66% 1.2 1.7 1.6 Rich
GVA GRANITE CONSTRUCTION INC Industrials 0-Unrated 0-Unrated 49.71 4/27/2006 33% 1.5 1.4 1.2 Rich
HSY HERSHEY CO/THE Consumer Staples 2-Equal weight 3-Negative 52.00 4/21/2006 19% 1.2 1.3 1.4 Rich
LEA LEAR CORP Consumer Discretionary 3-Underweight 3-Negative 17.61 4/21/2006 68% 1.2 3.1 2.9 Rich
MO ALTRIA GROUP INC Consumer Staples 2-Equal weight 1-Positive 71.31 4/20/2006 29% 1.7 2.0 2.0 Rich
PCH POTLATCH CORP Materials 0-Unrated 0-Unrated 41.65 4/19/2006 36% 2.4 3.0 3.4 Rich
POM PEPCO HOLDINGS INC Utilities 2-Equal weight 3-Negative 22.77 5/9/2006 20% 1.3 1.7 1.7 Rich
RE EVEREST RE GROUP LTD Financials 1-Overweight 1-Positive 93.80 4/18/2006 22% 1.8 1.6 1.4 Rich
SFG STANCORP FINANCIAL GROUP Financials 3-Underweight 2-Neutral 54.25 4/26/2006 23% 1.3 1.1 1.1 Rich
SMG SCOTTS MIRACLE-GRO CO-CL A Materials 0-Unrated 0-Unrated 45.64 4/28/2006 23% 1.1 1.4 1.8 Rich
SNV SYNOVUS FINANCIAL CORP Financials 3-Underweight 2-Neutral 27.13 4/26/2006 22% 1.4 2.5 2.6 Rich
STI SUNTRUST BANKS INC Financials 3-Underweight 1-Positive 72.74 4/18/2006 17% 1.3 2.5 2.2 Rich
WABC WESTAMERICA BANCORPORATIOFinancials 2-Equal weight 2-Neutral 51.69 4/19/2006 19% 1.7 2.0 1.8 Rich
WMI WASTE MANAGEMENT INC Industrials 1-Overweight 1-Positive 35.58 4/27/2006 18% 1.3 1.4 1.9 Rich
Source: Lehman Brothers, OptionMetrics, Bloomberg, FAME
Note: This screen does not exclude stocks with illiquid options. Investors should consider liquidity before entering into an options position. Stocks that appear as unrated are either
not covered by Lehman Brothers fundamental analysts or are currently subject to research restrictions. Our universe includes stocks included in either the S&P 500 or the NDX.
In Figure 7, we provide the current list of stocks having relatively cheap options.
Figure 7: Stocks Displaying “Cheap” Volatility Characteristics
Std Devs from Std Devs from Std Devs from
Lehman Expected 3-Month
Lehman Mean (3-Month Mean (3-Month Mean (3-Month
Ticker Name GICS Sector Company Price Earnings Implied Rich/Cheap
Sector View Implied vs Implied vs Implied vs S&P
Rating Date Volatility
Realized) Sector) 500)
AGE EDWARDS (A.G.) INC Financials 0-Unrated 0-Unrated 49.00 6/23/2006 19% -1.7 -1.3 -1.5 Cheap
AVT AVNET INC Information Technology 1-Overweight 2-Neutral 25.43 4/27/2006 28% -1.8 -1.6 -1.4 Cheap
BEAS BEA SYSTEMS INC Information Technology 1-Overweight 1-Positive 13.05 5/18/2006 32% -1.0 -1.4 -1.3 Cheap
COL ROCKWELL COLLINS INC. Industrials 1-Overweight 1-Positive 55.44 4/27/2006 19% -2.1 -1.1 -1.1 Cheap
CTSH COGNIZANT TECH SOLUTIONS-A Information Technology 0-Unrated 0-Unrated 59.58 4/27/2006 30% -1.0 -2.0 -2.0 Cheap
FCS FAIRCHILD SEMICON INTERNATIOInformation Technology 1-Overweight 1-Positive 19.35 4/13/2006 35% -1.6 -1.4 -1.3 Cheap
GE GENERAL ELECTRIC CO Industrials 1-Overweight 1-Positive 34.69 4/13/2006 13% -1.7 -1.0 -1.0 Cheap
GT GOODYEAR TIRE & RUBBER CO Consumer Discretionary 0-Unrated 0-Unrated 14.28 5/4/2006 34% -2.2 -1.0 -1.0 Cheap
IDTI INTEGRATED DEVICE TECH INC Information Technology 1-Overweight 1-Positive 15.24 5/3/2006 33% -1.0 -2.3 -2.0 Cheap
JBL JABIL CIRCUIT INC Information Technology 0-Unrated 0-Unrated 42.75 6/21/2006 25% -1.6 -1.2 -1.1 Cheap
KMX CARMAX INC Consumer Discretionary 2-Equal weight 2-Neutral 31.96 6/20/2006 32% -1.4 -1.1 -1.2 Cheap
MCRL MICREL INC Information Technology 3-Underweight 1-Positive 15.24 4/28/2006 39% -1.6 -1.1 -1.0 Cheap
MIK MICHAELS STORES INC Consumer Discretionary 1-Overweight 2-Neutral 37.60 5/25/2006 21% -2.6 -3.7 -2.1 Cheap
MRBK MERCANTILE BANKSHARES CORPFinancials 1-Overweight 2-Neutral 38.31 4/26/2006 12% -1.4 -1.6 -1.5 Cheap
MWV MEADWESTVACO CORP Materials 1-Overweight 1-Positive 27.86 4/20/2006 15% -1.3 -2.4 -1.8 Cheap
ORI OLD REPUBLIC INTL CORP Financials 0-Unrated 0-Unrated 22.00 4/28/2006 14% -1.3 -1.0 -1.0 Cheap
PLL PALL CORP Industrials 2-Equal weight 1-Positive 30.83 6/1/2006 19% -1.4 -2.2 -2.1 Cheap
PWR QUANTA SERVICES INC Industrials 0-Unrated 0-Unrated 16.03 5/5/2006 34% -1.3 -1.6 -1.7 Cheap
RIMM RESEARCH IN MOTION Information Technology 1-Overweight 2-Neutral 85.45 4/6/2006 41% -1.3 -1.6 -1.5 Cheap
TEK TEKTRONIX INC Information Technology 0-Unrated 0-Unrated 35.35 6/23/2006 24% -2.7 -1.1 -1.3 Cheap
UVN UNIVISION COMMUNICATIONS-A Consumer Discretionary 1-Overweight 3-Negative 34.54 5/4/2006 25% -1.3 -1.6 -1.6 Cheap
WIND WIND RIVER SYSTEMS INC Information Technology 0-Unrated 0-Unrated 12.22 5/25/2006 36% -2.0 -2.1 -1.9 Cheap
Source: Lehman Brothers, OptionMetrics, Bloomberg, FAME
Note: Acquisition targets with very low volatility have been removed from this list. Stocks that appear as unrated are either not covered by Lehman Brothers fundamental analysts or
are currently subject to research restrictions. Our universe includes stocks included in either the S&P 500 or the NDX.
April 4, 2006 5

6. Equity Derivatives Strategy | Equity Volatility Snapshot
Volatility Screen User Interface
Obtain Implied Volatility
Analytics for an
Individual Stock
Screen Universe for
Rich/Cheap Volatility, By
Sector, Analyst Rating,
Earnings Period
Implied and Realized Volatility Implied and Realized Rich/Cheap Indicators for
for Individual Stock Screened Individual Stock Screened
Source: Lehman Brothers
Note: Stocks that appear as unrated are either not covered by Lehman Brothers fundamental analysts or are currently subject to research restrictions.
Volatility Screen Summary Output
Number of Standard Deviations Above or Below
Spreads’ 2-Year Average
Current 1-Month If > 1 then “Rich”. If < -1 then “Cheap”
Implied Volatility
1-Month Implied Volatility 3-Month Implied Volatility
Standard Deviations from Mean Standard Deviations from Mean
Lehman Expected Current Current
Lehman Implied vs Implied vs Implied vs Implied vs Implied vs Implied vs
Ticker Name GICS Sector Company Price Earnings 1-Month 3-Month
Sector View Realized Sector S&P 500 Realized Sector S&P
Rating Date Implied Implied
A AGILENT TECHNOLOGIES INC Information Technology 1-Overweight 2-Neutral 37.72 5/16/2006 21% 0.1 -1.9 -1.7 24% 0.2 -1.9 -1.6
AA ALCOA INC Materials 1-Overweight 1-Positive 29.80 4/6/2006 28% 1.2 0.6 0.9 27% -0.5 0.0 0.6
AAI AIRTRAN HOLDINGS INC Industrials 1-Overweight 1-Positive 18.21 4/26/2006 42% 0.6 -0.5 -0.7 43% -0.4 -0.8 -0.9
AAP ADVANCE AUTO PARTS Consumer Discretionary 1-Overweight 1-Positive 41.28 5/18/2006 27% -0.1 0.6 0.4 29% 1.4 1.6 1.4
AAPL APPLE COMPUTER INC Information Technology 2-Equal weight 2-Neutral 63.99 4/13/2006 44% 0.7 0.6 0.6 42% -0.8 0.2 0.1
ABC AMERISOURCEBERGEN CORP Health Care 2-Equal weight 2-Neutral 47.34 4/21/2006 23% 0.3 0.8 0.1 21% 0.5 -0.5 -1.0
ABI APPLIED BIOSYSTEMS GROUP-A Health Care 2-Equal weight 1-Positive 27.56 4/26/2006 24% 0.4 0.0 -0.5 24% 0.0 -0.4 -0.7
ABK AMBAC FINANCIAL GROUP INC Financials 0-Unrated 0-Unrated 81.80 4/20/2006 18% 0.2 0.0 -0.4 18% 0.3 -0.3 -0.5
ABS ALBERTSON'S INC Consumer Staples RS-Rating Suspe2-Neutral 25.81 6/7/2006 12% 0.4 -1.9 -1.8 13% -2.8 -2.3 -2.0
ABT ABBOTT LABORATORIES Health Care 0-Unrated 0-Unrated 44.25 4/12/2006 19% 0.5 1.6 0.7 19% -0.4 2.0 1.2
ACE ACE LTD Financials 2-Equal weight 1-Positive 56.61 4/25/2006 19% -0.2 -1.0 -1.2 22% 0.1 -0.1 -0.4
ACF AMERICREDIT CORP Financials 0-Unrated 0-Unrated 30.32 4/25/2006 24% -1.0 -1.0 -1.2 27% -0.5 -1.1 -1.2
ACI ARCH COAL INC Energy 1-Overweight 1-Positive 69.78 4/25/2006 35% -0.6 -1.0 -0.1 37% 0.3 -1.1 0.2
ACS AFFILIATED COMPUTER SVCS-A Information Technology 0-Unrated 0-Unrated 63.02 4/21/2006 20% 1.0 -1.7 -1.5 21% -2.3 -2.0 -1.6
ACV ALBERTO-CULVER CO Consumer Staples 0-Unrated 0-Unrated 46.03 4/28/2006 19% 0.3 0.0 -0.3 19% 0.2 -0.3 -0.1
ACXM ACXIOM CORP Information Technology 0-Unrated 0-Unrated 26.09 5/11/2006 27% 0.4 -0.2 -0.3 25% 0.0 -0.3 -0.5
ADBE ADOBE SYSTEMS INC Information Technology 2-Equal weight 2-Neutral 36.55 3/22/2006 38% 1.6 1.9 2.3 34% -0.1 1.4 1.6
ADCT ADC TELECOMMUNICATIONS INCInformation Technology 1-Overweight 2-Neutral 25.55 6/1/2006 38% -0.1 -1.4 -1.4 40% -0.2 -1.3 -1.2
ADI ANALOG DEVICES Information Technology 1-Overweight 1-Positive 37.51 5/12/2006 28% 0.0 -0.7 -0.7 27% -0.1 -1.1 -0.8
ADM ARCHER-DANIELS-MIDLAND CO Consumer Staples 0-Unrated 0-Unrated 35.00 4/28/2006 25% 0.0 0.7 0.5 28% -0.2 1.7 1.5
Rich/Cheap Metrics: Rich/Cheap Metrics:
Company Details 1-Month 3-Month
Implied Volatility Implied Volatility
Source: Lehman Brothers
April 4, 2006 6

7. Equity Derivatives Strategy | Equity Volatility Snapshot
Earnings Watch: Companies Reporting 4/5 – 4/11
We incorporate implied volatility information to estimate the expected stock price reaction priced in by
the options market for upcoming earnings announcements. Please see Options Strategy Monthly: Low
th
Volatility in the 7 Inning? (January 10, 2006) for further details.
Figure 8: Expected Absolute Stock Price Reactions to Upcoming Earnings Announcements
Average Absolute Stock Price Average Stock Price Move
Expected Implied 1-day Stock
Ticker Name Price (3/27/06) Move Following Earnings Following Earnings
Earnings Date Price Move
Announcements Announcements
BBBY BED BATH & BEYOND INC 05-Apr-06 37.95 4.3% 4.7% 0.2%
MON MONSANTO CO 05-Apr-06 86.65 3.5% 2.5% 0.0%
STZ CONSTELLATION BRANDS INC-A 06-Apr-06 25.25 2.5% N/A N/A
AA ALCOA INC 10-Apr-06 30.90 3.9% 3.0% -0.5%
Source: Source: Lehman Brothers, Bloomberg
Note: This list does not exclude illiquid options. Investors should consider liquidity of options before entering a trade. For details on the methodology we use to calculate the implied
stock price move, please see “Earnings Impact on Implied and Realized Volatility”, included in the Options Strategy Monthly, January 10, 2006.
April 4, 2006 7

8. Equity Derivatives Strategy | Equity Volatility Snapshot
Analyst Certification:
The respective research analysts responsible for the fundamental ratings hereby certify (1) that the views expressed in this research email accurately reflect our
personal views about any or all of the subject securities or issuers referred to in this email and (2) no part of our compensation was, is or will be directly or indirectly
related to the specific recommendations or views expressed in this email.
I, Ryan Renicker, hereby certify (1) that the views expressed in this research email accurately reflect my personal views about any or all of the subject securities or
issuers referred to in this email and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed
in this email.
To the extent that any of the conclusions are based on a quantitative model, Lehman Brothers hereby certifies (1) that the views expressed in this research email
accurately reflect the firm's quantitative research model (2) no part of the firm's compensation was, is or will be directly or indirectly related to the specific
recommendations or views expressed in this research report.
Important Disclosures
Lehman Brothers does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a
conflict of interest that could affect the objectivity of this email communication.
Customers of Lehman Brothers 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 www.lehmanlive.com or can call 1-800-2-LEHMAN to request a copy of
this research.
Investors should consider this communication as only a single factor in making their investment decision.
The analysts responsible for preparing this report have received compensation based upon various factors including the Firm’s total revenues, a portion of which is
generated by investment banking activities.
Stock price and ratings history charts along with other important disclosures are available on our disclosure website at www.lehman.com/disclosures
And may also be obtained by sending a written request to: LEHMAN BROTHERS CONTROL ROOM , 745 SEVENTH AVENUE, 19TH FLOOR NEW YORK, NY
10019
Options are not suitable for all investors and the risks of option trading should be weighed against the potential rewards.
Supporting documents that form the basis of the recommendations are available on request. Please note that the trade ideas within
this report in no way relate to the fundamental ratings applied to European stocks by Lehman Brothers' Equity Research.
Guide to Lehman Brothers Equity Research Rating System
Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2- Equal weight or 3-Underweight (see definitions below) relative to other
companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (“the sector coverage universe”). To see a list of companies that
comprise a particular sector coverage universe, please go to www.lehman.com/disclosures.
In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative (see definitions below).
A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investors should carefully read the entire research report including the
definitions of all ratings and not infer its contents from ratings alone.
Stock Rating
1-Overweight - The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.
2-Equal weight - The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.
3-Underweight - The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.
RS-Rating Suspended - The rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in certain circumstances
including when Lehman Brothers is acting in an advisory capacity on a merger or strategic transaction involving the company.
Sector View
1-Positive - sector coverage universe fundamentals are improving.
2-Neutral - sector coverage universe fundamentals are steady, neither improving nor deteriorating.
3-Negative - sector coverage universe fundamentals are deteriorating.
April 4, 2006 8

9. Equity Derivatives Strategy | Equity Volatility Snapshot
Distribution of Ratings:
Lehman Brothers Equity Research has 1805 companies under coverage.
43% have been assigned a 1-Overweight rating which, for purposes of mandatory disclosures, is classified as a Buy rating, 29% of companies with this rating are investment
banking clients of the Firm.
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