Energy & Power Industry Update October 2011

Transcription

1 Member FINRA/SIPC

2 What We ve Been Reading Solyndra, a.k.a. the federal government s rude introduction to large scale venture capital investing, ruled the energy headlines this past month. For those who may have missed it, The Economist lays out the key issues in Letting Sunlight In, while Matthew Wald of The New York Times examines the potential impacts on other energy innovations. There has already been some fallout within the industry, notably SolarCity s SolarStrong project, a large-scale solar installation program for military housing which represents one of the industry s biggest projects contemplated to-date. SolarCity was informed by the U.S. Department of Energy ( DOE ) that its $275 million loan guarantee would not be finalized by a September 30 deadline. Like all good government scandals, there will surely be some babies tossed out with the bathwater in the post-solyndra upheaval. Outside of the clear questions raised by the government attempting to pick winner and losers, the basics of the investment have left many scratching their heads as to just what level of diligence the government is performing it its selection process. Jon Stewart, whose Daily Show dubbed it, That Custom-Tailored Obama Scandal You Ordered Is Finally Here, may have said it best in his question of Solyndra s fundamental business model (it sold a product that cost six dollars to manufacture for three dollars), I wonder if that s why my business, Johnny s $10 Bill Buy One Get One Free Emporium, didn t work because I had plenty of volume! On the heels of Solyndra, energybiz notes the federal government s loan program comes to a close at the end of September in Loans to Clean Energy Dwindling. While Solyndra has garnered the headlines, it is a small percentage of an overall portfolio representing more than $40 billion in loan guarantees. The DOE s Loan Programs Office website provides an overview of the projects funded to-date through the program. Executive Director Jonathan Silver notes, This is without question the largest and most successful clean energy financing effort in U.S. history and the scale in which we ve been able to operate is really remarkable. With weak venture capital investments for renewables and fading federal support, it s uncertain what the future holds for the sector. Some are certainly hoping for a window in the equity markets as Greentech Media notes in Cleantech IPOs on Deck. With eleven S-1s filed by prospective cleantech IPO candidates, there is a strong pipeline, representing more than $1.4 billion in potential capital raises. Out of curiosity, we looked through the filings to get a sense for the companies historical earnings. It turns out cumulative losses for the eleven companies were also a little more than $1.4 billion. In its review of Daniel Yergin s new book, The Quest: Energy, Security, and the Remaking of the Modern World, which is a follow-up to his 1991 Pulitzer Prize-winning, The Prize: The Epic Quest for Oil, Money, and Power, The New York Times writes, In the two decades since [The Prize], Mr. Yergin, operating as a kind of one-man think tank, has had a virtual monopoly on the subject of energy and geopolitics. Such is his influence that one half expects his competitors to file antitrust litigation. Earlier in the month, Yergin offered a preview of his new work in a Saturday essay for The Wall Street Journal, There Will Be Oil, which provides a sharp counter to the peak oil argument. Yergin argues that a better way to visualize oil market dynamics is as a plateau rather than a peak. In this view, the world has decades of further growth in production before flattening out into a plateau perhaps sometime around midcentury at which time a more gradual decline will begin. And that decline may come not from a scarcity of resources but from greater efficiency, which will slacken global demand. page 1

3 Industry Observations The Energy, Power, and Infrastructure and Industrial Services indices experienced slight declines in September in the face of economic headwinds. The North American rotary rig count reached a new three year high. Many commodity prices remain depressed amidst rising fears about the European debt crisis and tepid domestic growth forecasts: Oil prices remain below $85.00 per barrel and have fallen 30% from their one year high. Natural gas is trading at $3.77. Electricity prices have fallen over 25% since the beginning of summer. Index % Change S&P 1.03 Energy 5.71 Power (7.77) I & IS (2.76) LTM Indexed Stock Performance Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 S&P 500 Energy Power Industrial & Infrastructure Services 160 LTM EBITDA Multiples 1 Indexed LTM EBITDA Multiples Index % Change Energy (12.62) Power (19.74) I & IS (22.70) Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Energy Power Industrial & Infrastructure Services page 2

4 Key Trading Statistics 1 Stock Price % Change TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio Industry Segment 1 Month 12 Month 9/23/10 3/23/11 Current EBITDA Current 2009 Energy Integrateds 1.1% 15.9% 4.7x 5.3x 3.9x 3.1x 8.3x 6.9x Energy Services and Equipment 5.3% 31.5% 9.5x 11.0x 7.5x 4.6x 17.9x 7.8x Exploration and Production 5.8% 12.2% 6.5x 8.8x 7.5x 4.5x 19.7x 10.7x Coal Producers 4.6% (9.0%) 8.4x 9.3x 7.9x 3.8x 13.8x 7.3x Refining 9.7% 85.3% 9.6x 10.9x 5.2x 2.9x NM 4.9x Storage & Transportation 2.3% 2.2% 13.7x 14.7x 13.1x 9.7x 19.8x 16.9x Power Diversified Power (4.6%) (3.9%) 10.1x 10.5x 7.6x 6.2x 12.4x 9.7x Mid-Cap Power 2.1% 18.3% 8.3x 9.9x 8.4x 5.2x 17.3x 11.8x Independent Power Producers 6.6% 14.5% 7.4x 7.2x 9.8x 7.3x 15.5x 15.9x Electric Utilities 0.0% 5.6% 8.3x 8.1x 8.9x 8.0x 12.5x 13.8x TEV / LTM Revenue 2011 Revenue Renewables (2.0%) (15.5%) 1.6x 1.6x 1.1x 0.7x 8.8x 5.5x Cleantech 1.0% (42.3%) 1.8x 1.1x 0.8x 0.8x 12.6x 10.9x Industrial & Infrastructure Services Engineering & Construction 6.0% 18.3% 6.4x 10.2x 7.9x 4.5x 14.9x 10.4x Industrial & Infrastructure Services 1.4% 25.3% 7.8x 9.9x 7.2x 5.2x 17.8x 8.6x Current Valuations Versus Historical 5-Year Average % 200.0% 180.0% 180.0% 160.0% 160.0% 140.0% 140.0% 120.0% 120.0% 100.0% 100.0% 80.0% 80.0% 60.0% 60.0% 40.0% 40.0% 20.0% 20.0% 0.0% 0.0% Refining Storage Independent Electric Energy Exploration Coal Integrateds Industrial & Mid-Cap Engineering Diversified Cleantech Renewables and Power Utilities Services and and Producers Infrastructure Power and Power Transportation Enegy Producers Equipment Production Power Services Construction Industrial & Infrastructure Services 5-Year Average Enegy Power Industrial & Infrastructure Services Note: Based upon current EV / LTM EBITDA versus 5-year historical average. For Cleantech and Renewables, valuation is based upon EV / LTM Sales. page 3

5 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 ($ per ton - Central Appalachian) ($ per ton - Rotterdam) ($ per MWg) Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 (# rigs) ($ per gallon) Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 ($ per bbl) ($ per MMBtu) Energy & Power Industry Update Oil 1 Natural Gas $80.12 per bbl $3.77 per MMBtu U.S. Rig Counts 3 Gasoline and Ethanol 1 3,000 2,500 2,000 1,500 1, ,430 rigs $2.52 per gallon $2.44 per gallon Gasoline Ethanol Coal 1 Electricity Prices CAPP: $74.35 per ton Rotterdam: $ per ton $45.30 per MWg Central Appalachian Rotterdam page 4

6 Number of Transactions Energy & Power Industry Update Select Recently Announced Energy & Power Transactions 1,2 Date Target Business Description Acquirer 9/23/2011 First Choice, Power, L.P. US based provider of renewable energy plans and meterbased and prepaid electricity services 9/12/2011 Axis Energy Services Holdings Inc. Canada based provider of directional drilling and MWD services 9/12/2011 Global Industries, Ltd. US based provider of construction and subsea services to the offshore oil and gas industry 9/7/2011 Total Safety U.S., Inc. US based provider of integrated safety and compliance solutions to the power industry 9/6/2011 Quinn's Oilfield Supply Ltd. Canada based manufacturer and distributor of reciprocating pumps for oil and gas production 9/2/2011 Power Holdings Inc. US based manufacturer of specialized power distribution, conditioning, and monitoring systems 8/25/2011 APS Energy Services US based provider of energy conservation and renewable energy solutions 8/24/2011 Confluence Solar, Inc. US based manufacturer of single crystal silicon substrates for the solar photovoltaic industry 8/22/2011 AMES Group LLC US based provider of maintenance and engineering services to the nuclear power industry 8/18/2011 Liberty Electric Power, LLC US based operator of a 575 MW natural gas-fired, combined-cycle power generation facility 8/16/2011 North American Substation Services, LLC 8/15/2011 Dearborn Precision Tubular Products, Inc. US based provider of repair, maintenance, and installation services for electric utilities US based manufacturer of deep hole drilling and precision tubing products 8/6/2011 Deltak, LLC US based provider of waste heat recovery solutions for the global power industry 8/5/2011 TSI Acquisition Holdings LLC US based manufacturer of products for the oil and gas service sector Direct Energy, LP Precision Drilling Corporation Technip Warburg Pincus LLC Lufkin Industries, Inc. Smiths Interconnect Ameresco, Inc GT Advanced Technologies Inc. Bartlett Holdings, Inc. Energy Capital Partners Brown Brothers Harriman & Co. Hunting plc Hamon Corporation Hunting Energy Services, Inc. Quarterly United States E&P M&A Activity Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q page 5

7 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Integrateds Exxon Mobil Corporation $358,670.5 $72.79 (1.0%) 19.0% 82.5% 7.2x 7.7x 5.5x 3.5x 9.4x 7.8x 0.1x Chevron Corporation $185,838.2 $ % 25.6% 89.7% 4.5x 5.3x 4.0x 2.8x 8.3x 6.7x (0.2x) ConocoPhillips $110,448.7 $ % 20.9% 81.6% 4.2x 4.9x 3.8x 3.3x 8.3x 7.1x 0.7x Occidental Petroleum Corporation $69,487.4 $ % 12.8% 71.3% 6.3x 8.0x 5.6x 3.7x 12.0x 7.8x 0.2x Hess Corporation $22,756.5 $ % 5.0% 67.3% 3.6x 4.7x 3.2x 2.6x 6.9x 6.7x 0.5x Marathon Oil Corporation $17,874.5 $ % (16.6%) 48.3% 4.9x 5.3x 2.2x 1.9x 7.7x 5.6x 0.0x Median 1.1% 15.9% 76.5% 4.7x 5.3x 3.9x 3.1x 8.3x 6.9x 0.2x Energy Services and Equipment Large Cap Diversified Schlumberger Limited $105,128.0 $ % 31.5% 79.9% 12.3x 17.0x 12.2x 6.5x 20.6x 11.2x 0.6x Halliburton Company $39,536.6 $ % 31.8% 72.5% 9.7x 10.7x 7.9x 3.9x 15.8x 7.2x 0.5x Baker Hughes Incorporated $28,030.6 $ % 51.9% 73.9% 11.2x 12.7x 7.9x 4.2x 19.1x 8.5x 1.0x National Oilwell Varco, Inc. $24,167.8 $ % 53.2% 75.6% 5.5x 10.6x 7.9x 4.8x 15.5x 9.5x (1.0x) Weatherford International Ltd. $19,032.7 $ % (1.7%) 58.9% 12.3x 12.0x 9.1x 4.7x 69.0x 7.7x 3.9x Median 3.2% 31.8% 73.9% 11.2x 12.0x 7.9x 4.7x 19.1x 8.5x 0.6x Energy Mid and Small Cap Equipment and Service Providers Cameron International Corporation $11,966.5 $ % 23.0% 79.3% 10.0x 13.1x 11.4x 7.1x 21.5x 11.8x (0.1x) Oil States International Inc. $4,048.3 $ % 43.1% 73.0% 6.8x 11.7x 7.9x 4.4x 14.4x 7.6x 2.5x RPC Inc. $3,699.9 $ % 93.2% 85.1% 10.8x 9.4x 6.9x 3.2x 14.6x 6.3x 0.5x Exterran Holdings, Inc. $2,639.0 $ % (48.5%) 41.9% 6.9x 7.9x 6.9x 5.3x NM NM 3.8x Complete Production Services, Inc. $2,613.9 $ % 41.2% 66.1% 10.5x 7.7x 5.1x 2.5x 12.9x 4.7x 1.3x Key Energy Services Inc. $2,486.7 $ % 56.4% 66.2% 17.0x 19.9x 10.1x 3.0x 291.6x 5.2x 4.3x Dril-Quip, Inc. $2,246.0 $ % 6.8% 76.5% 12.3x 16.2x 14.4x 9.3x 27.1x 15.9x (1.4x) Basic Energy Services, Inc. $1,378.6 $20.06 (3.0%) 149.8% 53.1% 14.2x 12.7x 6.5x 2.6x NM 4.6x 5.0x Median 5.9% 42.1% 69.6% 10.6x 12.2x 7.4x 3.8x 18.1x 6.3x 1.9x page 6

8 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Construction and Equipment Contractors Transocean Ltd. $24,524.7 $ % (6.8%) 64.4% 5.4x 8.1x 7.5x 5.4x NM 8.6x 1.9x Noble Corp. $12,330.4 $ % 0.6% 73.7% 4.1x 10.3x 14.0x 5.9x 28.0x 8.0x 2.4x Diamond Offshore Drilling Inc. $9,032.8 $ % 1.7% 77.5% 4.5x 6.3x 5.3x 6.0x 8.9x 11.5x 0.3x Nabors Industries Ltd. $8,607.8 $ % (1.0%) 55.5% 6.8x 8.3x 5.4x 3.3x 29.4x 5.6x 2.5x Technip $8,482.9 $ % 20.0% 84.3% 6.7x 8.7x 7.3x NA 16.5x NA (1.5x) Subsea 7 SA $7,563.8 $21.29 (2.7%) 20.7% 73.5% 7.0x 16.0x 15.0x NA 15.9x NA (0.1x) Helmerich & Payne Inc. $5,796.1 $ % 43.4% 76.2% 6.8x 8.9x 6.2x 4.0x 14.7x 9.3x 0.1x Rowan Companies Inc. $4,795.3 $ % 22.7% 80.9% 5.9x 10.3x 11.4x 5.9x 23.8x 8.8x 0.8x Oceaneering International, Inc. $4,276.1 $ % 57.5% 90.6% 6.3x 9.4x 9.4x 7.2x 21.6x 15.5x (0.3x) Patterson-UTI Energy Inc. $3,855.6 $23.14 (0.6%) 40.7% 67.9% 8.3x 8.9x 5.0x 2.5x 14.9x 5.9x 0.6x Hercules Offshore, Inc. $1,265.3 $ % 66.8% 58.2% 11.5x 8.2x 7.1x 7.8x NM NM 4.4x Pioneer Drilling Co. $972.1 $ % 101.6% 66.2% 9.5x 9.3x 6.3x 2.9x NM 8.9x 2.7x Cal Dive International Inc $395.3 $2.43 (17.3%) (53.0%) 29.7% 8.7x 12.5x 6.1x 2.8x NM 5.2x 2.9x Median 6.9% 20.7% 73.5% 6.8x 8.9x 7.1x 5.4x 16.5x 8.7x 0.8x Exploration and Production Large Cap Anadarko Petroleum Corporation $45,762.7 $ % 31.7% 85.4% 6.0x 8.0x 7.2x 4.5x 41.8x 16.6x 1.5x Apache Corp. $44,641.0 $98.89 (1.6%) 4.1% 73.7% 5.0x 6.4x 4.1x 2.9x 9.6x 6.4x 0.8x Chesapeake Energy Corporation $32,693.2 $ % 51.3% 87.9% 1.7x 8.6x 9.5x 5.0x 20.6x 8.9x 2.3x Devon Energy Corporation $27,723.4 $ % 5.9% 70.5% 5.1x 7.1x 4.9x 3.3x 18.6x 7.5x 0.2x EOG Resources, Inc. $27,072.8 $89.89 (0.0%) 0.2% 74.0% 11.6x 15.5x 8.7x 4.0x 54.7x 14.1x 1.7x Noble Energy, Inc. $16,206.4 $ % 17.2% 85.2% 7.7x 9.4x 9.0x 3.9x 24.9x 10.0x 0.7x Southwestern Energy Co. $13,845.8 $37.38 (0.0%) 15.8% 75.9% 8.3x 9.8x 8.2x 6.0x 20.6x 14.6x 0.7x Pioneer Natural Resources Co. $10,857.6 $ % 15.2% 71.7% 7.9x 9.8x 9.6x 4.9x 30.7x 13.7x 1.5x Murphy Oil Corporation $9,938.5 $ % (11.5%) 67.1% 3.9x 4.8x 3.3x 2.4x 10.2x 6.5x 0.1x Newfield Exploration Co. $9,043.9 $ % (7.5%) 63.5% 6.1x 7.5x 6.5x 3.6x 16.4x 6.7x 1.8x Ultra Petroleum Corp. $6,524.4 $32.57 (0.6%) (17.5%) 63.6% 3.9x 8.5x 7.1x 5.4x 13.1x 10.5x 1.7x Quicksilver Resources Inc. $3,511.5 $ % (19.9%) 60.1% 8.0x 7.5x 6.8x 6.3x 4.1x 26.9x 3.5x Median 2.3% 5.0% 72.7% 6.1x 8.3x 7.1x 4.2x 19.6x 10.2x 1.5x page 7

9 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Mid and Small Cap Cabot Oil & Gas Corporation $8,902.8 $ % 177.8% 98.5% 7.2x 11.5x 16.5x 7.1x 65.9x 23.4x 2.0x Plains Exploration & Production Company $7,482.8 $ % 14.4% 69.5% 6.6x 9.2x 8.0x 4.0x 19.8x 7.6x 4.0x SandRidge Energy, Inc. $6,068.5 $ % 57.4% 54.9% 11.3x 21.4x 23.2x 5.8x NM 14.1x 8.1x Forest Oil Corp. $3,784.3 $ % (31.1%) 48.4% 7.0x 7.7x 6.1x 4.7x 16.8x 9.1x 2.3x Swift Energy Co. $1,683.3 $ % 19.4% 64.6% 5.2x 7.6x 5.0x 3.4x 18.2x 12.7x 1.6x PetroQuest Energy Inc. $553.9 $ % 35.8% 80.6% 3.5x 5.5x 5.0x 3.1x 202.1x 9.7x 0.9x Delta Petroleum Corp. $445.7 $ % (57.7%) 22.0% NM 18.8x 16.1x 20.8x NM NM 9.8x Median 9.3% 19.4% 64.6% 6.8x 9.2x 8.0x 4.7x 19.8x 11.2x 2.3x Coal Producers Peabody Energy Corp. $13,634.2 $ % 0.7% 64.7% 10.1x 12.1x 7.1x 3.8x 13.8x 6.3x 0.7x CONSOL Energy Inc. $13,404.0 $ % 26.3% 80.0% 10.1x 12.9x 8.7x 5.0x 22.1x 8.0x 2.8x Alpha Natural Resources, Inc. $8,996.7 $ % (18.7%) 48.5% 6.7x 8.9x 9.6x 3.4x 106.3x 7.3x 2.7x Arch Coal Inc. $8,109.5 $ % (19.4%) 54.8% 10.5x 10.6x 9.7x 4.2x 19.5x 4.4x 6.0x Alliance Resource Partners LP $2,691.6 $ % 21.5% 86.0% 5.7x 6.2x 5.0x 4.1x 9.6x 8.0x 0.8x Patriot Coal Corporation $1,407.5 $ % 38.9% 51.5% 5.6x NM 13.8x 2.5x NM 6.1x 4.6x James River Coal Co. $699.8 $ % (36.6%) 38.1% 3.7x 5.0x 5.3x 3.0x 9.9x 13.6x 2.4x Farmacol SA $227.8 $8.57 (5.4%) (43.9%) 53.7% 11.4x 9.3x 6.7x NA 8.8x NA 1.1x Median 4.6% (9.0% ) 54.2% 8.4x 9.3x 7.9x 3.8x 13.8x 7.3x 2.6x Refining Valero Energy Corp. $15,912.7 $ % 33.7% 71.5% 7.1x 6.5x 4.0x 2.5x 9.3x 4.5x 1.1x Sunoco, Inc. $6,397.9 $ % 15.5% 82.9% 7.5x 6.2x 7.2x 6.1x NM 15.0x 0.9x Tesoro Corporation $4,767.7 $ % 94.7% 83.9% 18.5x 11.8x 4.3x 2.9x 8.7x 4.9x 2.6x Hochschild Mining PLC $2,631.5 $ % 26.6% 76.8% 8.8x 10.2x 5.1x NA 12.6x NA (1.1x) Western Refining Inc. $2,434.6 $ % 274.4% 81.6% 9.5x 9.2x 5.2x 2.8x 14.1x 4.6x 3.2x CVR Energy, Inc. $2,355.4 $ % 280.7% 98.4% 9.8x 11.6x 5.0x 2.7x 12.2x 5.4x (0.9x) Alon USA Energy, Inc. $1,500.2 $ % 85.3% 59.2% NM NM 9.0x 3.3x NM 2.6x (17.4x) Delek US Holdings Inc. $1,148.6 $ % 114.6% 82.3% 28.1x 17.0x 6.2x 3.3x NM 5.6x 5.7x Fortune Oil plc $361.4 $0.16 (11.3%) 30.0% 69.5% 9.8x 12.6x 11.7x NA 10.1x NA (0.9x) Median 9.7% 85.3% 81.6% 9.6x 10.9x 5.2x 2.9x NM 4.9x 0.9x page 8

10 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Storage & Transportation Kinder Morgan Energy Partners LP $34,680.8 $ % 0.8% 88.6% 14.0x 14.1x 13.5x 9.4x 118.7x 29.3x 4.7x El Paso Corp. $31,780.1 $ % 59.1% 88.6% 8.2x 10.1x 11.9x 8.6x 26.6x 13.2x 4.8x Plains All American Pipeline, L.P. $15,188.1 $ % (1.7%) 91.2% 14.2x 15.3x 12.7x 10.6x 19.8x 15.0x 5.5x Enbridge Energy Partners LP $13,145.8 $ % 3.5% 81.6% 11.5x 31.0x 26.7x 9.9x NM 17.2x 11.8x Magellan Midstream Partners LP $8,678.0 $ % 17.7% 94.0% 15.2x 16.6x 15.6x 13.7x 19.6x 16.9x 4.0x Buckeye Partners LP $8,229.0 $ % 0.4% 87.1% 13.7x 21.7x 20.6x 13.6x 20.9x 17.0x 7.2x Sunoco Logistics Partners L.P. $4,458.3 $ % 9.7% 92.4% 13.6x 12.3x 10.5x 9.4x 8.1x 13.6x 4.3x Holly Energy Partners L.P $1,454.9 $ % (3.4%) 81.1% 13.8x 13.0x 11.0x 9.1x 19.7x 17.5x 4.3x Median 2.3% 2.2% 88.6% 13.7x 14.7x 13.1x 9.7x 19.8x 16.9x 4.7x Diversified Power General Electric Co. $544,892.1 $ % (2.5%) 72.7% 24.4x 22.3x 19.2x 18.1x 11.8x 9.5x 13.9x Siemens AG $85,921.7 $96.48 (6.0%) (5.4%) 69.0% 8.5x 8.1x 5.5x 5.1x 10.9x 8.6x 0.3x ABB Ltd. $42,010.8 $18.64 (8.5%) (10.5%) 66.8% 9.2x 10.4x 7.9x 5.7x 14.4x 9.9x (0.3x) Schneider Electric S.A. $38,382.7 $59.24 (7.8%) (1.9%) 68.1% 10.5x 10.4x 7.3x NA 12.7x NA 1.4x Emerson Electric Co. $35,946.4 $44.28 (3.3%) (13.5%) 71.1% 10.0x 10.5x 7.4x 6.8x 14.4x 11.4x 0.8x Eaton Corporation $16,580.1 $ % 2.2% 72.4% 10.1x 11.5x 8.1x 5.4x 11.7x 7.6x 1.6x Alstom SA $14,607.4 $40.81 (7.9%) (15.8%) 64.0% 4.7x 7.1x 4.9x NA 18.6x NA 0.9x Cooper Industries plc $7,704.9 $ % (1.4%) 66.5% 10.2x 13.0x 8.9x 7.8x 12.1x 10.5x 0.6x Median (4.6% ) (3.9% ) 68.6% 10.1x 10.5x 7.6x 6.2x 12.4x 9.7x 0.8x Mid-Cap Power Ametek Inc. $6,964.8 $ % 24.7% 80.2% 12.4x 13.9x 10.7x 8.2x 17.4x 12.5x 1.8x Valmont Industries, Inc. $2,506.5 $ % 29.6% 77.4% 8.9x 11.0x 8.4x 6.2x 17.3x 11.8x 0.7x Thomas & Betts Corp. $2,250.8 $ % 5.3% 68.5% 8.3x 9.9x 6.6x 5.2x 13.5x 9.8x 0.4x Littelfuse Inc. $894.3 $44.27 (4.6%) 6.1% 66.7% 7.8x 8.0x 5.5x 4.8x 10.7x 9.2x (0.7x) Powell Industries, Inc. $262.7 $34.52 (3.1%) 18.3% 82.9% 3.2x 5.5x 8.4x 4.2x 218.3x 14.3x (2.2x) Median 2.1% 18.3% 77.4% 8.3x 9.9x 8.4x 5.2x 17.3x 11.8x 0.4x Independent Power Producers NRG Energy, Inc. $14,341.5 $ % 14.5% 91.9% 4.7x 6.1x 6.6x 6.9x 10.2x 15.9x 3.9x Dynegy Inc. $5,206.4 $ % 21.9% 79.6% 10.1x 8.4x 13.0x 11.3x NM NM 7.5x GenOn Energy, Inc. $4,373.2 $ % NA 72.0% NA NA 9.8x 7.3x NM NA 3.3x Mirrabooka Investments Limited $221.2 $ % 10.7% 84.1% NM NM NM NA 20.9x NA NM Median 6.6% 14.5% 81.9% 7.4x 7.2x 9.8x 7.3x 15.5x 15.9x 3.9x Power page 9

11 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Electric Utilities Southern Company $56,774.6 $ % 11.4% 99.6% 9.4x 9.3x 9.6x 9.2x 17.5x 15.7x 3.6x Dominion Resources, Inc. $46,529.4 $48.22 (2.7%) 11.1% 95.2% 10.5x 8.6x 8.9x 9.3x 16.5x 15.3x 3.8x NextEra Energy, Inc. $44,561.8 $54.97 (1.9%) 2.7% 93.2% 8.3x 8.1x 8.9x 8.0x 12.5x 11.4x 4.0x Duke Energy Corporation $42,555.0 $18.75 (0.6%) 5.6% 96.2% 8.3x 8.1x 8.6x 7.9x 12.1x 14.0x 3.5x Exelon Corporation $41,173.3 $42.87 (0.4%) 1.4% 94.7% 5.7x 5.6x 6.1x 7.9x 10.6x 13.8x 1.9x FirstEnergy Corp. $36,626.6 $ % 16.8% 95.4% 8.9x 9.4x 11.6x 8.4x 24.6x 13.5x 6.0x American Electric Power Co., Inc. $36,207.1 $ % 6.7% 98.8% 7.8x 7.4x 7.5x 7.3x 12.8x 11.6x 3.7x PPL Corporation $34,022.3 $ % 4.0% 97.5% 10.0x 9.1x 9.5x 8.3x 11.8x 11.5x 6.5x Progress Energy Inc. $27,036.8 $ % 10.3% 99.0% 8.1x 8.2x 9.2x 9.2x 16.7x 16.0x 4.1x Edison International $25,104.7 $36.27 (0.2%) 4.9% 90.3% 6.4x 6.4x 6.5x 6.7x 11.1x 14.1x 3.3x Entergy Corporation $23,279.9 $ % (16.3%) 79.2% 6.6x 6.1x 6.3x 7.2x 8.9x 10.7x 3.2x Median 0.0% 5.6% 95.4% 8.3x 8.1x 8.9x 8.0x 12.5x 13.8x 3.7x TEV / LTM Revenue Multiple as of TEV / 2011 Renewables 9/23/10 3/23/11 Current Revenue First Solar, Inc. $7,456.4 $88.97 (7.1%) (37.9%) 50.7% 5.1x 4.7x 3.0x 1.2x 14.9x 6.6x (0.1x) Vestas Wind Systems A/S $5,329.8 $18.83 (6.7%) (48.4%) 42.9% 1.5x 0.9x 0.5x NA 8.8x NA 1.7x Suntech Power Holdings Co. Ltd. $2,614.0 $4.60 (9.0%) (50.9%) 42.4% 1.1x 1.0x 0.8x 0.7x 4.7x 4.4x 5.2x SunPower Corporation $1,738.8 $13.33 (3.3%) (4.2%) 57.1% 1.1x 0.8x 0.7x 0.4x 53.5x 6.2x 2.0x GT Advanced Technologies Inc. $1,037.3 $11.75 (1.0%) 53.0% 67.1% 1.4x 1.4x 1.0x 0.5x 7.2x 4.7x (1.5x) Clean Energy Fuels Corp. $915.3 $ % (11.0%) 76.6% 5.7x 4.8x 3.5x 2.2x NM NM 3.2x Rentech, Inc. $293.5 $ % 1.0% 61.4% 2.1x 2.3x 1.7x 1.5x NM NM 75.3x FuelCell Energy Inc. $165.9 $ % 14.7% 51.4% 2.1x 3.2x 1.5x 1.0x NM NM 0.5x Energy Conversion Devices, Inc. $165.3 $0.64 (2.9%) (85.7%) 11.9% 1.2x 0.7x 0.7x 0.7x NM NM (5.9x) Ballard Power Systems Inc. $78.3 $ % (20.1%) 55.9% 1.6x 1.9x 1.1x 0.7x NM NM 0.9x Median (2.0% ) (15.5% ) 53.7% 1.6x 1.6x 1.1x 0.7x 8.8x 5.5x 1.3x Cleantech Itron, Inc. $1,881.3 $ % (34.5%) 56.0% 1.5x 1.1x 0.8x 0.8x 12.8x 8.0x 1.3x ESCO Technologies Inc. $855.5 $29.23 (0.5%) (9.5%) 67.7% 1.8x 1.7x 1.2x 1.1x 12.4x 11.2x 1.0x Ameresco, Inc. $714.8 $ % NA 67.9% 1.2x 1.1x 1.0x 0.8x 15.5x 10.6x 3.8x Echelon Corporation $298.6 $7.97 (5.5%) (1.0%) 74.4% 2.7x 3.0x 2.2x 1.6x NM NM 1.5x EnerNOC, Inc. $194.3 $ % (64.7%) 33.4% 3.0x 1.1x 0.7x 0.6x NM NM (4.2x) Comverge, Inc. $62.5 $ % (63.2%) 29.7% 1.4x 0.8x 0.4x 0.3x NM NM (0.2x) PowerSecure International, Inc. $59.4 $4.55 (0.9%) (50.1%) 45.6% 1.9x 1.4x 0.6x 0.5x 5.2x 16.1x (30.4x) Median 1.0% (42.3% ) 56.0% 1.8x 1.1x 0.8x 0.8x 12.6x 10.9x 1.0x page 10

12 Member FINRA/SIPC Stock Performance Net Debt / Current Price Change from Change from % of TEV / LTM EBITDA Multiple as of TEV / 2011 P/E Ratio EBITDA TEV 9/23/11 Prior Month Prior Year LTM High 9/23/10 3/23/11 Current EBITDA Current /23/2011 Industrial & Infrastructure Services Engineering & Construction Fluor Corporation $7,949.5 $ % 24.4% 79.1% 5.9x 14.1x 10.3x 4.9x 28.2x 12.4x (2.9x) Jacobs Engineering Group Inc. $4,270.9 $ % 1.5% 66.7% 7.5x 9.6x 6.6x 5.9x 14.2x 11.2x (0.4x) Dresser-Rand Group Inc. $4,126.5 $ % 17.8% 77.0% 8.5x 13.2x 15.4x 7.7x 33.3x 13.3x 2.7x KBR, Inc. $3,635.5 $ % 24.1% 75.6% 4.8x 8.9x 6.6x 4.0x 11.5x 8.8x (1.1x) Quanta Services, Inc. $3,445.7 $ % 1.3% 76.6% 8.3x 10.2x 10.2x 6.4x 34.8x 16.3x (0.9x) Chicago Bridge & Iron Company N.V. $3,069.2 $ % 54.5% 78.2% 6.1x 10.1x 8.1x 4.8x 14.9x 9.6x (0.8x) URS Corporation $3,023.2 $33.93 (1.2%) (9.7%) 70.2% 6.4x 6.1x 4.8x 3.7x 10.0x 7.5x 0.5x McDermott International Inc. $2,786.8 $ % (0.1%) 53.5% 6.3x 12.4x 6.4x 4.0x 13.2x 7.2x (0.9x) Shaw Group Inc. $1,630.5 $ % (26.5%) 57.9% 5.6x 7.2x 8.9x 4.4x NM 9.1x (0.3x) Pike Electric Corporation $379.3 $8.06 (3.7%) 18.9% 76.8% 10.5x 12.1x 7.9x 4.5x NM 14.1x 3.1x MYR Group, Inc. $366.5 $19.44 (0.8%) 36.9% 73.2% 7.0x 10.8x 7.6x 4.5x 22.1x 11.6x (0.6x) ENGlobal Corp. $94.2 $3.11 (2.4%) 27.6% 54.8% NM NM NM 3.4x NM 5.6x (1.0x) Median 6.0% 18.3% 74.4% 6.4x 10.2x 7.9x 4.5x 14.9x 10.4x (0.7x) Industrial & Infrastructure Services EMCOR Group Inc. $1,145.6 $ % (8.6%) 66.3% 4.1x 5.9x 4.3x 3.2x NM 8.4x (1.0x) Cape plc $1,078.4 $8.01 NA NA 83.8% NA NA 7.3x NA 13.0x NA 0.8x Mistras Group, Inc. $563.0 $ % 80.6% 97.2% 7.9x 10.7x 11.7x 7.6x 31.8x 18.8x 0.6x Team Inc. $528.4 $ % 57.5% 85.0% 7.6x 11.2x 9.3x 5.8x 17.8x 11.6x 1.2x Matrix Service Co. $211.8 $ % 25.3% 76.4% NA 9.4x 5.0x 2.5x 30.4x 7.3x NM Furmanite Corporation $203.5 $5.50 (0.5%) 20.1% 64.0% 11.8x 9.9x 7.0x 5.2x 13.4x 8.6x 0.2x Median 1.4% 25.3% 80.1% 7.8x 9.9x 7.2x 5.2x 17.8x 8.6x 0.6x page 11

13 Experience Focus Market Intelligence Stability Global Reach Exceptional Results Harris Williams & Co. is the premier middle market advisor with a two-decade legacy of sell side excellence serving clients worldwide. Middle market leader closed nearly 200 transactions in the last four years. Execution focus with unparalleled senior-level attention. Over 10,000 conversations with buyers and lenders each year. Unparalleled retention of senior professionals. Approximately 20% of our transactions are cross-border. Best-in-class execution produces unmatched closing rate. Locations London, UK Richmond, VA Boston, MA Cleveland, OH London, UK Minneapolis, MN Philadelphia, PA San Francisco, CA page 12

14 Harris Williams & Co. s Energy & Power Group has a broad range of experience including products, services, and technologies that support or enhance the overall energy and power infrastructure. Key Niches: Cleantech, Energy Efficiency, and Renewables Power Products, Services, and Technologies Oil & Gas Products, Services, and Technologies Industrial & Infrastructure Services Engineering & Construction For more information on Harris Williams & Co. s Energy & Power Group as well as archived copies of the Energy & Power Industry Update, please visit our website. Archived copies of the Group s industry whitepapers, including Transmission & Distribution Infrastructure and ESCOs Enabling Energy Efficiency, can also be found on the site. page 13

15 Tiff B. Armstrong Managing Director +1 (804) Mr. Armstrong co-leads the Energy & Power Group and was Harris Williams & Co. s second employee, joining the firm in In 1999, Mr. Armstrong founded the San Francisco office and has over 19 years of transactional experience focused in middle market mergers and acquisitions assignments. Having directed over 125 mergers and acquisitions transactions during his career, Mr. Armstrong has worked across industries including energy and power, consumer products, building products, business services, distribution, retailing, specialty chemicals, and technology. As Co-Head of the Energy & Power Group, Mr. Armstrong specializes on the Power segment. Prior to joining Harris Williams & Co., Mr. Armstrong was with Wheat First Butcher Singer (now Wells Fargo). He earned a B.S. with a concentration in Finance from the University of Virginia's McIntire School of Commerce and is also a Chartered Financial Analyst. Mr. Armstrong was past president and director of the San Francisco Chapter of ACG and is currently a director of the Greater Richmond YMCA. Andrew G. Spitzer Managing Director aspitzer@harriswilliams.com +1 (804) Mr. Spitzer founded and co-leads the Energy & Power Group at Harris Williams & Co. Over his investment banking career, Mr. Spitzer has advised clients on a variety of merger and acquisition and strategic advisory assignments, as well as corporate financings. Mr. Spitzer has advised a diverse range of manufacturing and service businesses in the energy and power industries. Key niche focus areas have included demand response solutions, power quality equipment, infrastructure and industrial services, and oilfield products and services. Prior to focusing on energy and power companies, Mr. Spitzer developed experience in numerous industries including industrial manufacturing, chemicals, automotive, aerospace and defense, business services, and consumer products. Prior to joining Harris Williams & Co., Mr. Spitzer worked in the General Industrial Group at Banc of America Securities, LLC and in the Investment Banking Group at Goldman Sachs & Co. Mr. Spitzer earned an M.B.A. with Honors from Columbia Business School, where he served as the Caplan Fellow. Mr. Spitzer earned a B.A. in Economics from the University of Virginia. Brian S. Lucas Director blucas@harriswilliams.com +1 (804) Mr. Lucas re-joined Harris Williams & Co. following the completion of an M.B.A. from The Wharton School at the University of Pennsylvania. Prior to business school, Mr. Lucas served as an Associate with Harris Williams & Co., working on mergers and acquisitions transactions in a broad range of industries, including general industrial, consumer products, plastics, and waste equipment/services. Before re-joining Harris Williams & Co., Mr. Lucas worked as an Associate with Graham Partners, a private equity group in Philadelphia. Previous experience also includes work as an Investment Banking Analyst with JP Morgan. Mr. Lucas earned a B.S. in Commerce, with a concentration in Finance from The McIntire School of Commerce at the University of Virginia. Matthew G. White Vice President mwhite@harriswilliams.com +1 (804) Prior to joining Harris Williams & Co., Mr. White worked as an Associate in the Equity Capital Markets Group at SunTrust Robinson Humphrey. Previous experience also includes work in the Capital Finance Group at Wachovia Securities (now Wells Fargo) where he focused on acquisition financing, growth capital, and workout situations. Mr. White earned an M.B.A. from the Goizueta Business School at Emory University and a B.S. in Business Administration from the University of North Carolina at Chapel Hill. Luke R. Semple Vice President lsemple@harriswilliams.com +1 (804) Prior to joining Harris Williams & Co., Mr. Semple worked as a Global Banking Associate at Deutsche Bank. Within energy and power, Mr. Semple has advised a diverse range of businesses, including providers of energy efficiency and clean technology products and services, oilfield products and services, transmission distribution products and services, and power generation equipment. He earned an M.B.A. from the Darden School of Business at the University of Virginia and a B.A. from Trinity College in Hartford, Connecticut. page 14

16 1001 Haxall Point 9 th Floor Richmond, VA Phone: +1 (804) Fax: +1 (804) Market Street 31st Floor San Francisco, CA Phone: +1 (415) Fax: +1 (415) Two International Place 24th Floor Boston, MA Phone: +1 (617) Fax: +1 (617) Brook Street London, W1K 4HS Phone: Fax: South Ninth Street Suite 3350 Minneapolis, MN Phone: +1 (612) Fax: +1 (612) East 9th Street 20th Floor Cleveland, OH Phone: +1 (216) Fax: +1 (216) Market Street 21st Floor Philadelphia, PA Phone: +1 (267) Fax: +1 (267) Sources: 1. Capital IQ. 2. MergerMarket. 3. Baker Hughes. Harris Williams & Co. ( a member of The PNC Financial Services Group, Inc. (NYSE:PNC), is the premier middle market advisor with a two-decade legacy of sell side excellence serving clients worldwide. The firm is focused exclusively on the middle market providing sell side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets advisory services. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, an Appointed Representative of Sturgeon Ventures LLP, which is Authorised and Regulated by the Financial Services Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2011 Harris Williams & Co., all rights reserved Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, an Appointed Representative of Sturgeon Ventures LLP, which is authorised and regulated by the FSA. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively. page 15