Financials Associate Nate Bard Analysts Steve Belsterling Carlos

Financials Associate: Nate Bard Analysts: Steve Belsterling, Carlos Padilla, Sang Lee, Jackie Carney, Ryan Conner, Sean Colleran, Lydia Coleman

Holdings

LTM Performance

American International Group l Provides a variety of insurance and insurance-related services in the United States and overseas. l The Company writes property and casualty and life insurance, as well as provides financial services.

Quick Facts Current Price: $71. 21 52 -week high/low: $77. 36 -$56. 16 One year return: 19. 24% Earnings (past 12 months): 4. 23 Year est. EPS: 4. 55 P/E (trailing): 16. 95 Est. P/E: 15. 80 Shares Outstanding: 2. 605. 397 M Market Cap: 186, 754. 900 M ROE: 14. 23

SWOT Strengths l #1 in the industry l Outstanding management Weaknesses l How much is left on the upside? l CEO Hank Greenberg is 78 Opportunities l Continued Asian expansion l Financial services Threats l Increased competition l Proper hedging for baby boom

The Company has three operating segments: Travel Related Services (TRS), American Express Financial Advisors (AEFA) and American Express Bank (AEB).

Quick Look Current Pricing as of Dividend Information 9/17/04 Recent Price $51. 40 52 -Week High 52 -Week Low Latest Ex. Date 6/30/04 $54. 50 Indicated Dividend Rate $0. 40 $43. 53 Dividend Yield 0. 8% Price Change - Last Month 2. 8% Price Change - 26 Week 0. 6% Price Change - 52 Week 9. 2% Price Change - YTD 6. 6%

SWOT Strengths l #1 in traveler’s checks l #1 financial planning company l Warren Buffett owns 11% Opportunities l Expansion abroad l Debit card explosion Weaknesses l Charge higher fees l 80% of revenues are domestic l Lag behind competition Threats l Sluggish consumer spending l Terrorist attacks

Pennsylvania REIT

Quick Look 52 Week Change: 15. 01% l Market Cap: 1. 32 Billion l FFO: 79 Million l Beta: -0. 028 l l l Annual Dividend: 2. 16 Dividend Yield: 5. 85% ROA: 1. 99% ROE: 3. 51% Consecutive Dividends: 110

SWOT Strengths l Consistent dividend l Quality retail portfolio Weaknesses l Non-core assets provide distraction l Declining operating margin Opportunities l Low interest rates l Strong business investment Threats l Sluggish consumer spending l Over-leveraging

Quick Look Citigroup Tumbles as Merrill Cuts Rating on Japan (Correct) September 20, 2004 16: 49 EDT -- Citigroup Inc. shares had their biggest one-day drop in 18 months after Merrill Lynch & Co. cut its rating on the stock because Japanese regulators shut the bank's Tokyo-based private banking unit. Price: $45. 40 P/E ratio: 14. 98 52 -week range: $52. 88 -$42. 99 Year est. EPS: 3. 92 1 -year return: -0. 177% Earnings past 12 months: 3. 81 Market cap: 235, 184 M ROE: 19. 518 Shares outstanding: 5, 180. 258 M Div Yield (trailing 12 months): 3. 414

SWOT Strengths l Diversified l Successful M&A l Leader Weaknesses l Growth through acquisition l Net income growth lags behind “comps” Opportunities l Rebounding market l Financing and deals abroad Threats l Other conglomerates l Reliance on the market

NORTHBROOK, Ill. (Aug. 25, 2004) -- Grubb & Ellis Company (OTC: GBEL), one of the leading providers of integrated real estate services, today reported net income of $12. 6 million, or $0. 83 per share, for the fiscal year ended June 30, 2004, compared with a net loss of $17. 9 million, or $1. 19 per share, for the prior year. For the fourth quarter, the Company reported net income of $9. 0 million, or $0. 59 per share, compared with a net loss of $870, 000, or $0. 06 per share, in the fourth quarter of fiscal 2003. Price: $4. 12 P/E ratio: 22. 89 52 -week range: $4. 26 -$0. 80 Year est. EPS: N/A 1 -year return: 298. 058% Earnings past 12 months: . 78 Market cap: 61. 899 M ROE: N/A Shares outstanding: 15. 097 M Div Yield (trailing 12 months): N/A

SWOT Strengths Weaknesses l Local market knowledge l Work without pay l Hiring back management l CEO controls 60% of stock l Turnaround Opportunities l New alliances l Partnerships abroad Threats l Takeover/merger l Rising interest rates

Sell l Agreement last semester to sell half and see how things go l It has only gotten worse

Stock Decline

Management Problems l Charles Schwab in and out. l Cost cutting – more job cuts and closures. l Reexamine Sound. View acquisition – Charles Schwab said that business lacked "synergy" with its tradition of supporting the individual investor. UBS has agreed to buy the unit.

Awful Financials Net PM ROE ROA ROIC P/E Interest Cover 12 -Month Net Income Growth Schwab Ameritrade E*Trade 11. 71% 30. 01% 16. 45% 11. 6% 22. 8% 18. 0% 1. 2% 1. 8% 1. 3% 10. 2% 22. 8% 8. 4% 23. 10 19. 06 11. 89 4. 9 33. 10 2. 0 381. 6% 655. 0% 330. 1%

Intuitively Speaking l Bad company in a bad industry – Fierce competition, on price – Company left its roots – Operates in a way it once despised – Industry based upon individual active traders – Ramped up branching only to slash them a few years later – Launch of Charles Schwab bank - conglomerate

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