Strategy Tear Sheet Most Recent Strategy Calls Growth

Strategy Tear Sheet Most Recent Strategy Calls… Growth vs. Value Brian G. Belski 612. 303. 1503 / brian. g. belski@pjc. com Adam J. Freeman 612. 303. 1509 / adam. j. freeman@pjc. com Chad E. Klatt, CFA 612. 303. 1506 / chad. e. klatt@pjc. com Living In The Now ~ October 04, 2004 • We believe the lack of forward investing conviction has more to do with near-term psychology and consensus following relative to longer term fundamental strategy Small vs. Large Technology Overweight ~ September 22, 2004 • We believe the broader stock market is positioned for a fundamentally led Q 4 recovery despite accelerating pessimism and negativity. Timely rotational opportunities existing within Tech, Energy, and Utilities… Health Care Overweight ~ September 20, 2004 • We are maintaining and reiterating our Overweight rating on Health Care, as attractive earnings attributes and historically “cheap” valuations persist Back To Work ~ September 13, 2004 • Laying the groundwork for select sector upgrades/downgrades as contributors to potential Q 4 broader market rally Fallen Angels ~ August 23, 2004 Earnings • Focus on high quality growth companies whose prices have been driven lower by emotion rather than actual changes in core fundamental variables Valuation Please call or e-mail for complete reports Market Pulse Weightings Please click on buttons for further analysis on each subject Disclaimer

Growth vs. Value Take-Away Russell 1000 Indices - Value outperformance likely extended; look for growth to close the relative gap over the next 2 -3 quarters Russell 2000 Indices - Despite longer-term relative discount, value becoming progressively more expensive Fundamentals… Growth = Deep relative discounts to market and value persist; increased doubt for growth expectations Performance… Value performance is testimony to extreme conservatism Conclusion Long-term focus = High-quality growth companies Main Page

Small vs. Large Fundamentals… Large-cap valuation discounts proceed Performance… Longer-term: Potential Peak Shorter-term: Outperformance Decelerating Conclusion Small-cap absolute outperformance will likely to come to an end over the next few quarters; large-cap poised for fundamental “run” Main Page

Earnings Analysis Growth Consensus projections of 10 -12% next 3 -4 quarters likely too low Momentum Near-term momentum models rolling over; longerterm strength intact PJC S&P 500 Projections EPS: $61. 65 – 2004 EPS: $66. 58 – 2005 1200 Price Target Conclusions S&P 500 Revisions / Seasonality - Long-term positive trends still intact; near term weakness likely due to traditional seasonality patterns, makes forward numbers more achievable Main Page

Valuation Analysis Indices Overall contraction intact; small- and mid-cap still trading at premium Differentiation Growth sector contraction creates opportunity; Industrial cyclical trends indicative of recovery Conclusion Market NOT as expensive as consensus believes S&P 500 Valuation Model Conclusions S&P 500 Valuation - According to our PPV model (which takes into account P/FE, P/S, P/CF, & P/B) the S&P 500 is trading below it’s 14 year valuation multiple average Cheap or Expensive? ? - On a relative and absolute basis small cap multiples are trading at a premium to large cap Main Page

Sector Weightings S&P 500 Index 6 -12 Month Weighting Russell Mid-Cap Index 6 -12 Month Weighting Russell Small-Cap Index 6 -12 Month Weighting Consumer Discretionary Market Weight Autos & Transportation Market Weight Consumer Staples Market Weight Consumer Discretionary Market Weight Consumer Staples Market Weight Energy Underweight Consumer Staples Financials Underweight Energy Underweight Health Care Overweight Financials Underweight Industrials Overweight Health Care Overweight Information Technology Overweight Materials & Processing Overweight Materials Overweight Producer Durables Overweight Technology Overweight Utilities Underweight Telecommunication Services Utilities Market Weight Underweight The Positives ~ Sectors to Overweight The Negatives ~ Sectors to Underweight Overweight Health Care: Earnings Consistency + Contracting Aggregate Multiples = Long-Term Key Underweight Financials: Earnings: We believe longer-term earnings revision trends have peaked and are now rolling over. Overweight SPX Industrials and RMC/Rut Producer Durables: Earnings Growth Recovery + Long-Term Revision Strength + Peak Valuation = Traditional Upward/Positive Change In Cycle Macro Fundamentals: Treasury yield spreads continue to contract from historical peaks—thereby likely placing forward margin (and earnings) pressure on the sector in aggregate. Overweight Materials: Developing Earnings Recovery + Peak Valuation = Classic Long-Term Cyclical Revival Main Page Valuation: Small- and Mid-Cap Financials are especially expensive compared to large-cap.

Market Pulse Conclusions S&P 500 Price Performance Standard Deviation - Steady deviation contraction intact – analytical proof that this is NOT a stock pickers market; indices, sector, and group price performance remains increasingly correlated Conclusions S&P 500 Health Care Sector - According to our PPV valuation model – Health Care is the cheapest sector in the S&P 500. We believe people may be sitting on their hands waiting for more clarity with the upcoming presidential election before making any moves What CLIENTS want to talk about…. • Energy: When to get out, instead of what to buy? • Tech: When to get in? • Health Care: Election resistance or support? • Cash levels are HIGH • Does dividend investing even matter? • Justifying “stock picking” Main Page S&P 500 Health Care Valuation Model

Analyst Certification—Brian G. Belski The views expressed in this report, including the Key Points and Risk sections in particular, accurately reflect my personal views about the subject Company and the subject security. In addition, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Piper Jaffray research analysts receive compensation that is based, in part, on the firm's overall revenues, which include investment banking revenues. Piper Jaffray research analysts who follow this Company report to the Head of Investment Research who, in turn, reports directly to the Chief Executive Officer of Piper Jaffray. Research Disclosures The following disclosures apply to securities mentioned in this report if and as indicated: (#) Piper Jaffray was making a market in the Company’s securities at the time this research report was published. Piper Jaffray will buy and sell the Company’s securities on a principal basis. (^) A Piper Jaffray analyst who follows this Company or a member of the analyst’s household has a financial interest (a long equity position) in the Company’s securities. (@) Within the past 12 months Piper Jaffray was a managing underwriter of an offering of, or a dealer manager of a tender offer for, the Company’s securities or the securities of an affiliate. (>) Piper Jaffray has received compensation for investment banking services from the Company within the past 12 months. (<) Piper Jaffray expects to receive or intends to seek compensation for investment banking services from the Company in the next 3 months. (~) A Piper Jaffray officer, director, or employee (other than a research analyst who follows the Company) is an officer and/or director of the Company. (+) Piper Jaffray and its affiliates, in aggregate, beneficially own 1% or more of a class of common equity securities of the Company. (=) Piper Jaffray has received compensation for non-investment banking securities-related services from the Company within the past 12 months. (&) A Piper Jaffray analyst who follows this Company has received compensation from the Company in the last 12 months. (*) Piper Jaffray and/or its employees (other than the analyst who follows this Company) own securities of this Company that were acquired prior to the Company’s IPO. Rating Definitions Investment Opinion: Investment opinions are based on each stock’s return potential relative to broader market indices*, not on an absolute return. Outperform: Expected to outperform the relevant broader market index over the next 12 months. Market Perform: Expected to perform in line with the relevant broader market index over the next 12 months. Underperform: Expected to underperform the relevant broader market index over the next 12 months. Suspended: No active analyst coverage, however coverage expected to resume. * Russell 2000 and S&P 500 Risk Rating: Our focus on growth companies implies that the stocks we recommend are typically more volatile than the overall stock market. We are not recommending the “suitability” of a particular stock for an individual investor. Rather, it identifies the volatility of a particular stock. Low: The stock price has moved up or down by more than 10% in a month in fewer than 8 of the past 24 months. Medium: The stock price has moved up or down by more than 20% in a month in fewer than 8 of the past 24 months. High: The stock price has moved up or down by more than 20% in a month in at least 8 of the past 24 months. All IPO stocks automatically get this volatility rating for the first 12 months of trading. Disclaimer This material regarding the subject company is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracy and does not purport to be complete. This information is not intended to be used as the primary basis of investment decisions. Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. It is not a representation by us or an offer or the solicitation of an offer to sell or buy any security. Further, a security described in this release may not be eligible for solicitation in the states in which the client resides. Notice to customers in the United Kingdom: Circulation of this report in the United Kingdom is restricted to investment professionals and high net worth individuals falling within Articles 19 and 49 of the Financial Services and Markets Act (Financial Promotion) Order 2001 as amended. No one else in the United Kingdom should read, rely on or act upon the information in the report. The investments and services to which the report relates will not be made available to others in the United Kingdom. Securities products and services offered through Piper Jaffray & Co. , member SIPC and NYSE, Inc. , a subsidiary of Piper Jaffray Companies. Additional information is available upon request. No part of this report may be reproduced, copied, redistributed or posted without the prior consent of Piper Jaffray & Co. © 2004 Piper Jaffray & Co. , 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402 -7020 Main Page