Coal Supply and Demand Indicators

9/1/10
Paul Forward, CFA Paul Massoud, CFA
(443) 224-1379 (202) 778-4342
pforward@stifel.com pamassoud@stifel.com

• Central Appalachian near future prices fell approximately $0.15/ton over the past week to about
$62.25/ton (up 40.2% y/y). Wyoming (Powder River Basin) future prices for 4Q10 delivery cur-
rently trade in the $14.25/ton area, up about $0.25 from last week’s level.

• U.S. coal production was up 0.1% y/y in the week ended August 21, at 20.9 million tons. Eastern
coal production was up 3.1% y/y in the latest week, but down 1.8% YTD. Western coal production
was down 1.9% y/y in the latest week, and down 1.1% YTD.

• Genscape estimates that power generator coal stockpiles as of August 30 were 145.7 million
tons, 16.9% above the 10-year average but 19.9% below the year-ago stockpile level. We estimate
that generator stockpiles currently represent 53.7 days of coal consumption, 10.5% above the 10-
year average of 48.6 days for August at month-end.

• This week’s electric utility stockpile total of 145.7 million tons implies a draw during the past
week of about 26,000 tons vs. the 10-year average weekly draw of about 1.2 million tons during
August.

• Total electricity generation in the regions where coal competes as a power-generating fuel (the
U.S., excluding the West Coast and New England) was up 4.9% y/y for the week ended August
20, and up 3.7% versus the 5-year average for the week. Year-to-date power generation is up
5.2% vs. 2009.

• For the week ended 8/28/10, cooling degree days (a measure of warm temperatures and therefore
power demand for air conditioning) in the regions that use coal for power generation were 15.8%
above the year-ago level, but 8.1% below the 10-year average. Season-to-date cooling degree
days are up 22.1% vs. last year’s cooling season, and 16.4% above the 10-year average.

• Rail coal shipment volumes were 134,431 railcars for the week ended 8/20/10, up 1.2% vs. last
year but down 5.3% vs. the 5-year average for the week.

• Our Buy-rated coal mining firms include Peabody Energy (BTU - $42.79), CONSOL Energy (CNX -
$32.20), Massey Energy (MEE - $28.76), and Arch Coal (ACI - $22.50).

Prices are as of the close, 8/31/10.

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

All relevant disclosures and certifications appear on pages 10-11 of this report.
Coal Supply and Demand Indicators
September 1, 2010 -2- Stifel, Nicolaus & Company, Inc.

1. Weekly U.S. power generation (excluding noncoal regions).

85,000

80,000 Week ended 8/20/10:

Electricity generation, million kWh

80.0 billion kWh

75,000 (up 4.9% y/y)

70,000 Year-to-date:
2,257 billion kWh
65,000 (up 5.2% YTD)

60,000

55,000 Source: Stifel Nicolaus compilation of

Edison Electric Institute data. West Coast
and New England states are excluded,
50,000 since each represents less than 1% of
May
Mar

Apr

Nov
Aug

Oct

Dec
Jan

Feb

Jun

Jul

Sep
U.S. coal-fired electric power generation.

Five-year average 2009 2010

Total electricity generation in the regions where coal competes as a power-generating fuel (the
U.S., excluding the West Coast and New England) was up 4.9% y/y for the week ended August
20, and up 3.7% versus the 5-year average for the week. Year-to-date power generation is up
5.2% vs. 2009.

2. Manufacturing economic activity.

10%
Latest industrial
production index
5% (July): 93.4
(up 7.7% y/y)
y/y % change

0% U.S. coal consumption

(May): 81.3 M tons
(up 7.8% y/y)
-5%

-10%
Source: Federal Reserve,
EIA

-15%
Jan-99

Jul-99

Jan-00

Jul-00
Jan-01

Jul-01

Jan-02

Jul-02

Jan-03
Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Total U.S. coal consumption, y/y % change U.S. industrial production, y/y % change

U.S. industrial production in July was up 7.7% y/y. The latest monthly coal consumption data from
EIA for May 2010 was up 7.8% y/y. Year-to-date coal consumption through May is up 4.0% vs.
2009.
Coal Supply and Demand Indicators
September 1, 2010 -3- Stifel, Nicolaus & Company, Inc.

3. Cooling degree days (excluding noncoal regions).

110 Week ended 8/28/10:
Average weekly cooling-degree days (weighted by

100 70 CDD (up 15.8% y/y)

regional coal-fired power generation)

90
Season-to-date:
80 1336 CDD (up 22.1% y/y)
70

60

50

40 Source: Stifel Nicolaus compilation of NOAA

data. West Coast and New England states are
30 excluded. Cooling degree days data are region-
ally weighted according to each region’s share
20 of U.S. total coal-fired power generation.

10

0
Jul
Jul
May
May

Nov
Nov
Jan
Jan

Jun
Jun
Mar
Mar

Dec
Dec
Oct
Oct
Feb
Feb

Aug
Aug
Sep
Sep
Sep
Apr
Apr
Apr

Ten-year average 2009 2010

For the week ended 8/28/10, cooling degree days (a measure of warm temperatures and therefore
power demand for air conditioning) in the regions that use coal for power generation were 15.8%
above the year-ago level, but 8.1% below the 10-year average. Season-to-date cooling degree
days are up 22.1% vs. last year’s cooling season, and 16.4% above the 10-year average.

4. Natural gas near future contract prices.

$14 Latest (8/31/10):

$3.77 per MMBtu
Natural gas near future price, $/MMBtu

$12 (up 41.2% y/y)

$10

$8

$6

$4 Source: Bloomberg

$2

$0
Jan-00
May-00

Jan-01
May-01

Jan-02
May-02

Jan-03
May-03

Jan-04
May-04

Jan-05
May-05

Jan-06
May-06

Jan-07
May-07

Jan-08
May-08

Jan-09
May-09

Jan-10
May-10
Sep-00

Sep-01

Sep-02

Sep-03

Sep-04

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Near month natural gas futures fell $0.27/MMBtu from last week’s level to $3.77/MMBtu (up 41.2%
y/y). For the week ended August 20, EIA reported natural gas storage of 3,052 Bcf, 6.1% below
the year-ago level but 6.2% above the 5-year average.
Coal Supply and Demand Indicators
September 1, 2010 -4- Stifel, Nicolaus & Company, Inc.

5. Weekly nuclear power plant output (excluding noncoal regions).

90,000
Week ended 8/29/10:
Average nuclear plant output (MW)

85,000
83,421 MW
(down 0.6% y/y)
80,000
Year-to-date average:
75,000 78,351 MW
(down 1.0% YTD)
70,000

65,000
Source: Nuclear Regulatory
Commission. West (WSCC)
60,000 region and New England ex-
cluded. Weekly nuclear output
May
Mar

Nov
Jan

Jun

Aug

Jan
Jul
Apr
Feb

Sep

Oct

Dec
data shown are average of
daily MW reports from NRCC.

Five-year average 2009 2010

Nuclear power plant output in the regions that use coal for power generation (the U.S., excluding
the West Coast and New England) was down 0.6% vs. last year for the week ended August 29, but
up 0.5% vs. the 5-year average for the week. YTD nuclear power plant output is down 1.0% in the
regions that use coal vs. 2009 levels.

6. Near future prices for Central Appalachian and Wyoming coal.

$30 $150 Central Appalachian
Latest (8/30/10):
Central Appalachian coal near future price, $/ton $62.25/ton
Wyoming (PRB) coal near future price, $/ton

$25 $125
(up 40.2% y/y)

$20 $100 Wyoming 8800 PRB

Latest (8/30/10):
$15 $75 $14.20/ton
(up 109.1% y/y)
$10 $50

$5 $25 Source: EIA reporting of NYMEX is

used for Central Appalachian coal
PRB prices for 4Q10 delivery are currently about $14.25/ton.
and PRB coal since May 24, 2002.
$0 $0 NYMEX for futures pricing.
Bloomberg data used for pre-May
May-00

May-01

May-02

May-03

May-04

May-05

May-06

May-07

May-08

May-09

May-10
Jan-00

Sep-00
Jan-01

Sep-01
Jan-02

Sep-02
Jan-03

Sep-03
Jan-04

Sep-04
Jan-05

Sep-05
Jan-06

Sep-06
Jan-07

Sep-07
Jan-08

Sep-08
Jan-09

Sep-09
Jan-10

Sep-10

2002 price series.

Wyoming (PRB) 8800 coal near future price, $/ton (left axis)
Central Appalachian coal near future price, $/ton (right axis)

Central Appalachian near future prices fell approximately $0.15/ton over the past week to about
$62.25/ton (up 40.2% y/y). Wyoming (Powder River Basin) future prices for 4Q10 delivery currently
trade in the $14.25/ton area, up about $0.25 from last week’s level.
Coal Supply and Demand Indicators
September 1, 2010 -5- Stifel, Nicolaus & Company, Inc.

7. Genscape U.S. coal stockpile index.

195 August 30, 2010:

145.7 million tons
Electric power sector coal stockpiles (million tons)

2010
180 2009 (16.9% above 10-yr average)
1999-2008 max
(down 19.9% y/y)
165 1999-2008 average
1999-2008 min

150

135

Source: Genscape for 2009-2010 data. 1999-

120 2008 min/max levels and average monthly
stockpile data are from the Energy Information
Administration (EIA).
105

90
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
Week

Genscape estimates that power generator coal stockpiles as of August 30 were 145.7 million tons,
16.9% above the 10-year average but 19.9% below the year-ago stockpile level. We estimate that
generator stockpiles currently represent 53.7 days of coal consumption, 10.5% above the 10-year
average of 48.6 days for August at month-end. This week’s electric utility stockpile total of 145.7
million tons implies a draw during the past week of about 26,000 tons vs. the 10-year average
weekly draw of about 1.2 million tons during August.

8. U.S. coal production statistics.

U.S. Weekly Coal Production, 2008-2010 Latest week (8/21/10):
20.9 million tons
24
(up 0.1% y/y)
23
YTD: 687.4 million tons
Million tons per week

22
(down 1.4% y/y)
21
Latest week Year-to-date
20 (M tons) y/y% (M tons) y/y%
East:
19
Central Appalachia 3.7 3.5% 122.3 -4.6%
18 Northern Appalachia 2.5 5.9% 84.1 1.9%
Illinois Basin 2.0 -0.5% 66.3 -1.5%
17 West:
Powder River Basin 9.6 1.4% 300.1 -0.9%
16 Southwest 1.4 -19.4% 49.9 -7.0%
Week 1

Week 4

Week 7

Week 10

Week 13

Week 16

Week 19

Week 22

Week 25

Week 28

Week 31

Week 34

Week 37

Week 40

Week 43

Week 46

Week 49

Week 52

Other 1.9 -2.3% 64.6 3.7%

U.S. Total 20.9 0.1% 687.4 -1.4%
Source: EIA.

2008 2009 2010

U.S. coal production was up 0.1% y/y in the week ended August 21, at 20.9 million tons. Eastern coal
production was up 3.1% y/y in the latest week, but down 1.8% YTD. Western coal production was
down 1.9% y/y in the latest week, and down 1.1% YTD. For 2010, we estimate that the weekly draw
on U.S. coal (i.e., domestic consumption + net exports) will be 21.4 million tons.
 Coal Supply and Demand Indicators
September 1, 2010 -6- Stifel, Nicolaus & Company, Inc.

9. U.S. coal supply/demand balance.

(In million tons) 2007 to 2008 to 2009 to 2010E to
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 2008 2009 2010E 2011E
Coal supply:
Appalachian 431.2 396.2 376.1 389.9 396.7 391.2 377.1 389.8 339.3 329.1 325.8 3.4% -13.0% -3.0% -1.0%
Interior 146.9 146.6 146.0 146.0 149.2 151.4 146.6 146.7 146.8 151.2 158.8 0.1% 0.1% 3.0% 5.0%
West 547.9 550.4 548.7 575.2 585.0 619.4 621.0 633.6 584.5 591.5 612.2 2.0% -7.7% 1.2% 3.5%
Imports 19.8 16.9 25.0 27.3 30.5 36.2 36.3 34.2 22.6 20.3 20.3 -5.8% -34.4% -10.0% 0.0%
Refuse Recovery 1.8 1.0 1.0 1.0 0.7 0.8 0.8 1.4 2.1 2.1 2.1 0.0% 0.0% 0.0% 0.0%
Total supply 1,147.6 1,111.1 1,096.8 1,139.4 1,162.1 1,199.0 1,181.8 1,205.7 1,095.3 1,094.3 1,119.3 2.0% -9.2% -0.1% 2.3%

Coal demand:
Electric power 964.4 977.5 1,005.1 1,016.3 1,037.5 1,026.6 1,046.4 1,041.6 936.5 990.8 992.8 -0.5% -9.0% 5.8% 0.2%
Coking coal 26.1 23.7 24.2 23.7 23.4 23.0 22.7 22.1 15.3 20.0 21.0 -2.6% -26.0% 31.0% 5.0%
Other industrial 65.3 60.7 61.3 62.2 60.3 59.5 56.5 54.5 45.4 47.7 49.1 -3.5% -16.0% 5.0% 3.0%
Exports:
Steam coal 23.3 18.1 20.9 21.2 21.3 22.1 27.0 39.0 21.8 17.9 17.9 44.6% -42.0% -18.0% 0.0%
Coking coal 25.4 21.5 22.1 26.8 28.7 27.5 32.2 42.5 37.3 53.3 55.5 32.1% -13.0% 43.0% 4.0%
Total exports 48.7 39.6 43.0 48.0 50.0 49.6 59.2 81.5 59.1 71.2 73.3 37.8% -27.5% 20.5% 3.0%
Other demand 4.4 4.4 4.2 5.1 4.7 3.2 3.2 3.5 3.2 3.3 3.3 9.4% -9.0% 3.0% 1.0%
Total demand 1,108.9 1,105.9 1,137.8 1,155.3 1,175.9 1,161.9 1,188.0 1,203.2 1,059.5 1,133.0 1,139.6 1.3% -11.9% 6.9% 0.6%

Net over (under)

38.7 5.2 (41.0) (15.9) (13.8) 37.1 (6.2) 2.5 35.8 (38.8) (20.4)
supply:

Source: EIA for supply/demand data 2001-2009; Stifel Nicolaus projections

We expect the 2009 surplus in U.S. coal markets (+36 million tons) to swing to a 39 million ton deficit
in 2010. So far in 2010, U.S. coal production is down 1.4% according to EIA statistics, but we expect
full-year 2010 coal production to be about flat vs. 2009, helped by weak year-ago comparable pro-
duction levels in 2H09. In our view, the major change between 2009 and 2010 will be in demand for
coal, both in domestic power generation (+55 million tons) and coking coal exports (+16 million tons)
to drive the shift from coal market surplus to a deficit.

10. Rail coal shipments.

15.0%
Latest week (8/20/10):
134,431 railcars
Weekly coal rail shipments, y/y % change, 4-wk average

10.0%
(up 1.2% y/y)
5.0%
(5.3% below the 5-
year average for the
0.0% week)

-5.0%

-10.0%

-15.0% Source: Stifel Nicolaus,

based on Bloomberg/
Association of American
-20.0% Railroads data.
May-05

May-06

May-07

May-08

May-09

May-10
Jan-05

Sep-05

Jan-06

Sep-06

Jan-07

Sep-07

Jan-08

Sep-08

Jan-09

Sep-09

Jan-10

Rail coal shipment volumes were 134,431 railcars for the week ended 8/20/10, up 1.2% vs. last year
but down 5.3% vs. the 5-year average for the week.
 Coal Supply and Demand Indicators
September 1, 2010 -7- Stifel, Nicolaus & Company, Inc.

11. U.S. steam and metallurgical coal exports by destination

Total steam coal exports - TTM
60.0 Latest steam coal
Trailing 12-month sum of coal exports (mm short tons)

export data (June):

2.6 million short tons
50.0
(up 1.1% y/y)

40.0 YTD: 9.9 million short

tons (down 12.7%)

30.0 Africa

Asia and Oceania

20.0 South America

Europe
10.0
North America &
Caribbean

0.0
Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10
70.0
Total met coal exports - TTM Latest metallurgical coal
export data (June):
4.8 million short tons
Trailing 12-month sum of coal exports (mm short tons)

60.0 (up 44.1% y/y)

50.0 YTD: 29.8 million short

tons (up 98.4%)

40.0 Africa

Asia and Oceania

30.0 South America

Europe
20.0
North America &
Caribbean
10.0

0.0 So urce fo r bo th graphs: U.S.

Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Internatio nal Trade Co mmissio n.

According to U.S. International Trade Commission data for Jan-Jun 2010, U.S. coal exports were up 50.7% y/y
to 39.7 million tons, driven by a 98.4% y/y increase in metallurgical coal exports. This was somewhat offset by a
12.7% y/y decline in thermal coal exports through June. Coal imports through June were down 16.2% y/y to 9.8
million tons. YTD metallurgical coal exports to Asia are 7.4 million tons, or 25% of total met coal exports, vs. the
year-ago level of 1.8 million tons, or 12% of total met coal exports for the same period.
 Coal Supply and Demand Indicators
September 1, 2010 -8- Stifel, Nicolaus & Company, Inc.

Equity Research
Summary - Coal Mining
September 1, 2010

Alpha
Peabody CONSOL Massey Arch Natural Patriot Alliance
Energy Energy Energy Coal Resources Coal Resource
BTU CNX MEE ACI ANR PCX ARLP
Rating Buy Buy Buy Buy Hold Hold Hold

Stock price $42.79 $32.20 $28.76 $22.50 $37.13 $10.28 $54.07

Market capitalization ($ million) 11,476 7,344 2,896 3,670 4,525 947 1,985
Book value per share $14.80 $13.30 $19.20 $13.19 $21.43 $10.22 $10.65

Enterprise value (w/o legacy liabilities) 13,082 10,826 3,706 5,397 4,852 1,142 3,894

EV/Sales (2010E) 1.9 2.0 1.3 1.7 1.2 0.5 2.4

EV/EBITDA:
2008 7.1 10.1 5.7 7.2 12.3 25.8 15.1
2009 10.1 8.8 7.8 11.8 9.0 10.3 11.4
2010 6.9 7.2 6.4 7.1 5.4 6.2 7.9
2011 5.5 5.4 3.5 4.7 4.2 4.2 7.3

Enterprise value (w/legacy liabilities) 14,912 14,488 4,240 5,964 5,952 2,924 4,069

Price/Earnings
2008 11.8 13.4 9.1 9.2 18.3 NA 22.5
2009 22.3 10.9 27.8 53.7 18.8 NA 15.2
2010 13.6 12.9 25.1 19.7 12.4 NA 8.2
2011 9.6 9.6 6.9 7.9 8.4 NA 7.6

Total debt ($ million) 2,763 3,516 1,307 1,784 746 454 445

Debt/total capital 41% 54% 40% 45% 22% 33% 53%

EBITDA interest coverage (2010E) 8.9 7.5 5.9 5.5 7.1 4.7 16.1

Cash ($ million) 1,157 34 496 57 419 260 10

Sales ($ million)
2008A 6,593 4,652 2,655 3,044 2,469 1,655 1,157
2009A 6,012 4,622 2,401 2,627 2,496 2,045 1,231
2010E 6,952 5,284 2,958 3,136 3,919 2,171 1,635
2011E 8,152 6,021 3,882 3,801 4,381 2,261 1,817

EPS before items

2008A $ 3.63 $ 2.40 $ 3.16 $ 2.45 $ 2.03 $ (1.33) $ 2.41
2009A $ 1.92 $ 2.95 $ 1.03 $ 0.42 $ 1.98 $ (1.79) $ 3.56
2010E $ 3.15 $ 2.50 $ 1.15 $ 1.14 $ 3.00 $ (1.15) $ 6.60
2011E $ 4.45 $ 3.35 $ 4.20 $ 2.85 $ 4.40 $ (0.33) $ 7.15

EBITDA ($ million)
2008A 1,847 1,075 651 753 394 44 258
2009A 1,290 1,224 472 459 541 111 340
2010E 1,895 1,503 581 762 893 184 495
2011E 2,399 1,994 1,072 1,150 1,162 273 534

Free cash flow per share (DCF/unit)

2008A $ 3.37 $ (0.57) $ (4.50) $ 0.92 $ 4.56 $ (0.90) $ 4.41
2009A $ 2.48 $ (0.41) $ (0.07) $ 0.03 $ 1.84 $ (0.45) $ 5.83
2010E $ 2.82 $ 0.27 $ (0.07) $ 1.16 $ 1.71 $ (0.23) $ 9.33
2011E $ 3.09 $ 0.57 $ 2.76 $ 2.52 $ 3.75 $ 0.76 $ 10.12

Prices are as of the close, 8-31-10. ARLP enterprise value reflects combined value of ARLP and AHGP (Hold - $38.54), ad-
justed for AHGP’s holdings of ARLP units. Source: Company reports and Stifel Nicolaus estimates.
 Coal Supply and Demand Indicators
September 1, 2010 -9- Stifel, Nicolaus & Company, Inc.

Equity Research
Summary - Coal Mining
September 1, 2010

Alpha
Peabody CONSOL Massey Arch Natural Patriot Alliance
Energy Energy Energy Coal Resources Coal Resource
BTU CNX MEE ACI ANR PCX ARLP
Rating Buy Buy Buy Buy Hold Hold Hold

Coal reserves:
MM tons 9,015 4,520 2,410 3,935 2,317 1,842 647
MM barrels/oil equivalent (BOE) 29,090 19,386 9,994 10,093 8,684 7,481 2,617
2009 Reserve mix:
Powder River Basin 33% 4% 0% 75% 31% 0% 0%
Central Appalachia 0% 14% 99% 9% 20% 62% 4%
Northern Appalachia 0% 62% 0% 0% 48% 3% 23%
Illinois Basin 40% 18% 1% 10% 1% 35% 72%
Southwest 15% 1% 0% 7% 0% 0% 0%
Other 12% 2% 0% 0% 0% 0% 0%

EV (w/legacy liab.)/ton of reserves $1.65 $3.15 $1.76 $1.52 $2.57 $1.59 $6.29
EV (w/legacy liab.)/BOE reserves $0.51 $0.73 $0.42 $0.59 $0.69 $0.39 $1.55
Coal production (2009):
MM tons - produced 210.8 59.0 38.0 118.8 92.9 31.4 25.8
MM tons - sold 243.7 58.1 36.7 125.0 99.2 32.8 25.0

2009 production: regional mix

Powder River Basin 65% 0% 0% 81% 53% 0% 0%
Central Appalachia 0% 17% 100% 5% 27% 65% 10%
Northern Appalachia 0% 82% 0% 0% 20% 12% 10%
Illinois Basin 14% 0% 0% 0% 0% 23% 80%
Southwest 11% 2% 0% 14% 0% 0% 0%
Other 10% 0% 0% 0% 0% 0% 0%
Metallurgical coal % of total 3% 4% 19% 2% 17% 17% 0%

2009 price/ton ($) $26.13 $58.45 $63.26 $19.51 $46.79 $60.78 $46.58
% of production priced (Stifel ests.):
2010 98% 99% 100% 95% 98% 99% 100%
2011 69% 48% 70% 50% 74% 54% 91%
Legacy liabilities ($ million)
Reclamation liabilities 458 435 184 311 196 249 54
Workers' compensation 74 155 95 28 55 207 57
Accrued postretirement costs 913 2,685 167 45 699 1,173 56
Other 385 388 86 183 152 153 8
Total 1,830 3,662 533 567 1,101 1,782 175
Total/assets 18.2% 31.7% 11.2% 11.8% 21.4% 46.3% 15.4%

Source: Company reports and Stifel Nicolaus estimates.

 Coal Supply and Demand Indicators
September 1, 2010 -10- Stifel, Nicolaus & Company, Inc.

Important Disclosures and Certifications

I, Paul Forward, certify that the views expressed in this research report accurately reflect my personal views
about the subject securities or issuers; and I, Paul Forward, certify that no part of my compensation was, is, or
will be directly or indirectly related to the specific recommendation or views contained in this research report.

For our European Conflicts Management Policy go to the research page at www.stifel.com.

Stifel, Nicolaus & Company, Inc.'s research analysts receive compensation that is based upon (among other factors)
Stifel Nicolaus' overall investment banking revenues.

Our investment rating system is three tiered, defined as follows:

BUY – For U.S. securities we expect the stock to outperform the S&P 500 by more than 10% over the next 12
months. For Canadian securities we expect the stock to outperform the S&P/TSX Composite Index by more than
10% over the next 12 months. For yield-sensitive securities, we expect a total return in excess of 12% over the
next 12 months for U.S. securities as compared to the S&P 500 and Canadian securities as compared to the
S&P/TSX Composite Index, respectively.

HOLD – For U.S. securities we expect the stock to perform within 10% (plus or minus) of the S&P 500 over the
next 12 months. For Canadian securities we expect the stock to perform within 10% (plus or minus) of the S&P/
TSX Composite Index. A Hold rating is also used for yield-sensitive securities where we believe it is unlikely that
a dividend reduction will occur, but that any potential increase in the share price is limited.

SELL – For U.S. securities we expect the stock to underperform the S&P 500 by more than 10% over the next
12 months and believe the stock could decline in value. For Canadian securities we expect the stock to under-
perform the S&P/TSX Composite Index by more than 10% over the next 12 months and believe the stock could
decline in value.

Of the securities we rate, 50% are rated Buy, 47% are rated Hold, and 3% are rated Sell.

Within the last 12 months, Stifel, Nicolaus & Company, Inc. or an affiliate has provided investment banking services for
26%, 16% and 12% of the companies whose shares are rated Buy, Hold and Sell, respectively.

Additional Disclosures

Please visit the Research Page at www.stifel.com for the current research disclosures applicable to the companies men-
tioned in this publication that are within Stifel Nicolaus’ coverage universe. For a discussion of risks to target price
please see our stand-alone company reports and notes for all Buy-rated stocks.

The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us
and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities
referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular
investment objectives, financial situation or needs of individual investors. Employees of Stifel, Nicolaus & Company, Inc.
or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from
the opinions expressed within. Past performance should not and cannot be viewed as an indicator of future perform-
ance.

Stifel, Nicolaus & Company, Inc. is a multi-disciplined financial services firm that regularly seeks investment banking as-
signments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering
or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions. Moreover, Stifel
Nicolaus and its affiliates and their respective shareholders, directors, officers and/or employees, may from time to time
have long or short positions in such securities or in options or other derivative instruments based thereon.

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