marci l. ryvicker, cpa, cfa los angeles, california may 2013 please see page 30 for rating...

Marci L. Ryvicker, CPA, CFA

Los Angeles, California

May 2013

Please see page 30 for rating definitions, important disclosures and required analyst certifications.

Wells Fargo Securities, LLC 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 the report and investors should consider this report as only a single factor in making their investment decision.

Ignite!Ignite!OAAA/TAB National Convention & Trade ShowOAAA/TAB National Convention & Trade Show

All estimates/forecasts are as of May 15, 2013, unless otherwise stated.

22

Advertisers: What is most important to you?Advertisers: What is most important to you?

Source: Wells Fargo Securities, LLCSource: Wells Fargo Securities, LLC

REACH OF REACH OF TARGETTARGET AUDIENCE AUDIENCE

EASE OF USEEASE OF USE

MEASUREMENTMEASUREMENT

CONSISTENCYCONSISTENCY

RETURN ON INVESTMENTRETURN ON INVESTMENT

333

How Does Out of Home Stack Up?How Does Out of Home Stack Up?


EASE OFREACH USE MEASUREMENT CONSISTENCY ROI

OUT OF HOME X X X X

RADIO X X X

NEWSPAPERS X X X

INTERNET X X X

TELEVISION X X X X X

444

Wells Fargo Analyst SurveyWells Fargo Analyst Survey


We surveyed all We surveyed all 6060 Wells Fargo equity Wells Fargo equity analysts and asked them ONE questionanalysts and asked them ONE question::

DO YOU ANTICIPATE YOUR SECTOR(S) DO YOU ANTICIPATE YOUR SECTOR(S) TO: TO:

INCREASEINCREASE, ,

DECREASEDECREASE, or , or

MAINTAINMAINTAIN

AD SPEND OVER THE NEXT 12 MONTHS?AD SPEND OVER THE NEXT 12 MONTHS?

5555

Wells Fargo Analyst Survey: The ResultsWells Fargo Analyst Survey: The Results

Source: OAAA and Wells Fargo Securities, LLCSource: OAAA and Wells Fargo Securities, LLC

RankRank CategoryCategory % of Revenue% of Revenue Expected in ‘13Expected in ‘13

11 Misc. Services & AmusementsMisc. Services & Amusements 18%18% IncreaseIncrease

22 Media & AdvertisingMedia & Advertising 10%10% IncreaseIncrease

33 RetailRetail 9%9% IncreaseIncrease

44 RestaurantsRestaurants 8%8% IncreaseIncrease

55 Public Trans., Hotels & ResortsPublic Trans., Hotels & Resorts 7%7% IncreaseIncrease

66 FinancialFinancial 7%7% SameSame

77 CommunicationsCommunications 6%6% IncreaseIncrease

88 Insurance & Real EstateInsurance & Real Estate 5%5% SameSame

99 Government, Politics & Orgs.Government, Politics & Orgs. 5%5% DecreaseDecrease

1010 Schools, Camps, SeminarsSchools, Camps, Seminars 4%4% DecreaseDecrease

6666

Wells Fargo Analyst Survey: The ResultsWells Fargo Analyst Survey: The Results


Increase Stay the Same Decrease

AgricultureAgriculture MachineryMachinery None! None!

AutoAuto RailroadsRailroads

BeveragesBeverages TobaccosTobaccos

FoodFood UtilitiesUtilities

SoftwareSoftware

77777

The Digital RevolutionThe Digital Revolution

Source: Thomson Reuters and Wells Fargo Securities, LLCSource: Thomson Reuters and Wells Fargo Securities, LLC

““We are changing the world with technology.”We are changing the world with technology.”

--BILL GATES, Co-Founder, Microsoft--BILL GATES, Co-Founder, Microsoft

888888

WHAT Is Digital?WHAT Is Digital?


MOBILEMOBILE

SEARCHSEARCH

BANNER ADSBANNER ADS

VIDEO PRE-ROLLSVIDEO PRE-ROLLS

DIGITAL BILLBOARDSDIGITAL BILLBOARDS

VIRAL MARKETINGVIRAL MARKETING

POPUPSPOPUPS

INTERACTIVE INTERACTIVE

QR CODES QR CODES

ONLINE RADIOONLINE RADIO

E-MAIL SPAME-MAIL SPAM

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Television Radio Newspapers Outdoor Internet

9999999

Digital: The OpportunityDigital: The Opportunity

Source: TVB, OAAA, RAB, and Wells Fargo Securities, LLC estimatesSource: TVB, OAAA, RAB, and Wells Fargo Securities, LLC estimates

~5%~5% ~5%~5%

14%14%

100%100%

12%12%

DIGITAL REVENUES AS A % OF TOTAL REVENUEDIGITAL REVENUES AS A % OF TOTAL REVENUE

Dig

ital

as

a P

erce

nt

of

To

tal R

even

ue

Dig

ital

as

a P

erce

nt

of

To

tal R

even

ue

1010101010101010

Digital: The CompetitionDigital: The Competition

Source: Company data and Wells Fargo Securities, LLCSource: Company data and Wells Fargo Securities, LLC

GROUPON – A possible flash in the pan?GROUPON – A possible flash in the pan?

• Gross margin declined 9 consecutive QsGross margin declined 9 consecutive Qs

• Trades 66% lower than IPO priceTrades 66% lower than IPO price

• S&P up over 30% over same time frameS&P up over 30% over same time frame

PANDORA – Still tweaking its business model. PANDORA – Still tweaking its business model.

• Just instituted a 40 hour capJust instituted a 40 hour cap

• At what price?? At what price??

111111111111111111

Digital: Your Audience Is ChangingDigital: Your Audience Is Changing

Source: Nielsen, RAB and Wells Fargo Securities, LLCSource: Nielsen, RAB and Wells Fargo Securities, LLC

• TELEVISION – Time ShiftingTELEVISION – Time Shifting• DVRs are now in 40% of TV homes vs. 20% in ’07DVRs are now in 40% of TV homes vs. 20% in ’07• VOD – hundreds of thousands of choicesVOD – hundreds of thousands of choices• 40+ % of viewers time shift the BEST PT shows40+ % of viewers time shift the BEST PT shows

• NEWSPAPERS – Source ShiftingNEWSPAPERS – Source Shifting• Print circulation is down ~20% since ‘03Print circulation is down ~20% since ‘03• But online revenue is UP 150%But online revenue is UP 150%

• RADIO – A Shift in the DashboardRADIO – A Shift in the Dashboard• TSL to terrestrial radio continues to declineTSL to terrestrial radio continues to decline• But over 89 million Americans now listen online – But over 89 million Americans now listen online –

more than double from 5 years agomore than double from 5 years ago

12121212121212121212

Digital: Your Audience Is ChangingDigital: Your Audience Is Changing


• Facebook is used by:Facebook is used by:• 72% of women and 62% of men72% of women and 62% of men• 73% of adults 30-49 year old73% of adults 30-49 year old• 57% of 50-64 year olds57% of 50-64 year olds

• Twitter is used by:Twitter is used by:• 15% of women and 17% of men15% of women and 17% of men• 18% of 30-49 year olds18% of 30-49 year olds

• Pinterest is used by:Pinterest is used by:• 25% of women and 5% of men25% of women and 5% of men• 19% of 18-29 year olds19% of 18-29 year olds• 19% of 30-49 year olds19% of 30-49 year olds

• Instagram is used by:Instagram is used by:• 16% of women and 10% of men16% of women and 10% of men• 18% of 30-49 year olds18% of 30-49 year olds

1313131313131313131313

Digital: The BundleDigital: The Bundle


• THE GOAL: CREATE CUSTOMER STICKINESSTHE GOAL: CREATE CUSTOMER STICKINESS

• Example: The Cable Triple PlayExample: The Cable Triple Play• VideoVideo• High Speed DataHigh Speed Data• PhonePhone

• THE GOAL: GRAB SHARE OF WALLETTHE GOAL: GRAB SHARE OF WALLET

• Example: Added Home Security to BundleExample: Added Home Security to Bundle

1414

The Economy: Advertising Is CyclicalThe Economy: Advertising Is Cyclical

Source: The Federal Reserve of St. Louis and Wells Fargo Securities, LLC estimatesSource: The Federal Reserve of St. Louis and Wells Fargo Securities, LLC estimates

(20%)

(15%)

(10%)

(5%)

0%

5%

10%

Total Ad Growth Local Ad Growth Real GDP Nominal GDP

Yea

r o

ver

Yea

r C

han

ge

Yea

r o

ver

Yea

r C

han

ge

+10%+10%

-6%-6%

+8%+8%

-5%-5%

-15%-15%

+5%+5%+3%+3%

+6%+6%

-2%-2%

+6%+6%

-9%-9%

-19%-19%

+1%+1%

-1%-1%

1515

The Economy: Haves v. Have NotsThe Economy: Haves v. Have Nots

THE HAVESTHE HAVES NOMINAL GDP GROWING 3%-PLUS NOMINAL GDP GROWING 3%-PLUS RETAIL SALES REMAIN UP MSD RETAIL SALES REMAIN UP MSD AUTO – NEW VEHICLE SALES UP BY ANOTHER ~1M, to 15.3M UNITSAUTO – NEW VEHICLE SALES UP BY ANOTHER ~1M, to 15.3M UNITS INTEREST RATESINTEREST RATES

THE HAVE NOTSTHE HAVE NOTS UNEMPLOYMENT IS EXPECTED TO REMAIN AT ~8% in 2013UNEMPLOYMENT IS EXPECTED TO REMAIN AT ~8% in 2013


THE KINDA HAVESTHE KINDA HAVES HOUSING STARTS ARE EXPECTED TO APPROACH 1MMHOUSING STARTS ARE EXPECTED TO APPROACH 1MM

1616

The Economy: What To Watch ForThe Economy: What To Watch For


UNEMPLOYMENT – UNEMPLOYMENT – Was 9.6%, expected to be 7.6%Was 9.6%, expected to be 7.6%

HOUSING STARTS – HOUSING STARTS – Were 600k, expected to be 1MMWere 600k, expected to be 1MM

RETAIL SALES – RETAIL SALES – Were $3.8T, expected to be $4.5TWere $3.8T, expected to be $4.5T

CONSUMER SPENDING CONSUMER SPENDING –– Was $10.2T, expected to be $11.6TWas $10.2T, expected to be $11.6T

GAS PRICES GAS PRICES – Was $2.83/gal, expected to be $3.66/gal– Was $2.83/gal, expected to be $3.66/gal

AUTO SALES AUTO SALES –– Were 11.6MM, expected to be 15.3MMWere 11.6MM, expected to be 15.3MM

SMALL BUSINESS OPTIMISIM INDEX –SMALL BUSINESS OPTIMISIM INDEX – Was 89, expected to be Was 89, expected to be

90+90+

INTEREST RATES INTEREST RATES – 30 Yr FRM was 5%, expected to be 3.5%– 30 Yr FRM was 5%, expected to be 3.5%

REAL REAL GDP – GDP – Was $13.0T, expected to be $13.8TWas $13.0T, expected to be $13.8T

NOMINAL GDP NOMINAL GDP – – Was $14.5T, expected to be $16.2TWas $14.5T, expected to be $16.2T

1717

The Economy: SBOIThe Economy: SBOI

WHAT IS THE SBOI?WHAT IS THE SBOI? The Small Business Optimism Index (SBOI) is based on ten survey The Small Business Optimism Index (SBOI) is based on ten survey

indicators that are seasonally adjusted, analyzed month-to-month and indicators that are seasonally adjusted, analyzed month-to-month and set to an index of 100. set to an index of 100.

WHAT ARE THE INDICATORS?WHAT ARE THE INDICATORS? Plans to increase employment?Plans to increase employment? Plans to make capital outlaysPlans to make capital outlays Plans to increase inventoriesPlans to increase inventories Expects economy to improveExpects economy to improve Expects real sales to be higherExpects real sales to be higher Expects favorable credit conditions?Expects favorable credit conditions? Current inventory?Current inventory? Current earnings trends?Current earnings trends? Current job openings?Current job openings? Is now a good time to expand?Is now a good time to expand?


Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

70

75

80

85

90

95

100

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

SBO Index Radio Advertising y/y growth

1818

The Economy: SBOI vs. RadioThe Economy: SBOI vs. RadioY

ea

r o

ve

r Y

ea

r C

ha

ng

eY

ea

r o

ve

r Y

ea

r C

ha

ng

eS

BO

I Ind

ex

Va

lue

SB

OI In

de

x V

alu

e

RADIO REVENUE CORRELATES WELL WITH THE SBOIRADIO REVENUE CORRELATES WELL WITH THE SBOI


Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

70

75

80

85

90

95

100

-20%

-15%

-10%

-5%

0%

5%

10%

15%

SBO Index Outdoor Advertising y/y growth

1919

The Economy: SBOI vs. OutdoorThe Economy: SBOI vs. OutdoorY

ea

r o

ve

r Y

ea

r C

ha

ng

eY

ea

r o

ve

r Y

ea

r C

ha

ng

eS

BO

I Ind

ex

Va

lue

SB

OI In

de

x V

alu

e

BUT OUTDOOR REVENUE CORRELATES EVEN BETTERBUT OUTDOOR REVENUE CORRELATES EVEN BETTER


(5%)

(15%)

5%2%

3%

(0%)

(9%)

(19%)

1%0%

(1%) (2%)

(20%)

(15%)

(10%)

(5%)

0%

5%

2008 2009 2010 2011 2012 2013E

Total Ad Growth Local Ad Growth

2020

Advertising: Recent TrendsAdvertising: Recent TrendsLOCAL ADVERTISING HAS UNDERPERFORMED DUE TO PRINT (NEWSPAPERS/DIRECTORIES)LOCAL ADVERTISING HAS UNDERPERFORMED DUE TO PRINT (NEWSPAPERS/DIRECTORIES)

Yea

r o

ver

Yea

r C

han

ge

Yea

r o

ver

Yea

r C

han

ge

Source: OAAA, TVB, RAB and Wells Fargo Securities, LLC estimatesSource: OAAA, TVB, RAB and Wells Fargo Securities, LLC estimates

(20%)

(15%)

(10%)

(5%)

0%

5%

2008 2009 2010 2011 2012 2013E

Total Ad Growth Local Ad Growth Real GDP

2121

Advertising: Recent TrendsAdvertising: Recent TrendsY

ear

ove

r Y

ear

Ch

ang

eY

ear

ove

r Y

ear

Ch

ang

e

’’13E AD REVENUE IS DOWN DUE TO TOUGH POLTICAL COMPS13E AD REVENUE IS DOWN DUE TO TOUGH POLTICAL COMPS

Source: OAAA, TVB, RAB and Wells Fargo Securities, LLC estimatesSource: OAAA, TVB, RAB and Wells Fargo Securities, LLC estimates

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

2222

Advertising: Impact of Balance SheetsAdvertising: Impact of Balance SheetsDEBT LEVELS HAVE BEEN CONTINUOUSLY RISINGDEBT LEVELS HAVE BEEN CONTINUOUSLY RISING

Y/Y

Gro

wth

in D

ebt

Y/Y

Gro

wth

in D

ebt


23232323

The Stock Market: Historical TrendsThe Stock Market: Historical Trends

Source: FactSet and Wells Fargo Securities, LLCSource: FactSet and Wells Fargo Securities, LLC

(50%)

(40%)

(30%)

(20%)

(10%)

0%

10%

20%

30%

0

200

400

600

800

1,000

1,200

1,400

1,600

S&P 500 S&P 500 Growth

THE STOCK MARKET HAS STEADILY IMPROVED SINCE ‘09 AND RECENTLY HIT RECORD LEVELSTHE STOCK MARKET HAS STEADILY IMPROVED SINCE ‘09 AND RECENTLY HIT RECORD LEVELS

S&

P 5

00 L

evel

S&

P 5

00 L

evel Y

/Y G

row

thY

/Y G

row

th

24242424Source: FactSet and Wells Fargo Securities, LLCSource: FactSet and Wells Fargo Securities, LLC

*Traditional Media includes: Broadcast TV, Radio and Outdoor*Traditional Media includes: Broadcast TV, Radio and Outdoor

The Stock Market: Media TrendsThe Stock Market: Media TrendsBOTH TRADITIONAL AND INTERNET STOCKS HAVE PERFORMED WELL AS OF LATEBOTH TRADITIONAL AND INTERNET STOCKS HAVE PERFORMED WELL AS OF LATE

Y/Y

Gro

wth

Y/Y

Gro

wth

(75%)

(25%)

25%

75%

125%

175%

Traditional Stock Growth Internet Stock Growth

0%

20%

40%

60%

80%

100%

120%

140%

TV 2013 Performance YTD S&P 500 2013 Performance YTD

The Stock Market: TelevisionThe Stock Market: Television

WHY?WHY?

MASSIVE INDUSTRY CONSOLIDATIONMASSIVE INDUSTRY CONSOLIDATION USE OF INEXPENSIVE DEBTUSE OF INEXPENSIVE DEBT MULTIPLE EXPANSIONMULTIPLE EXPANSION ADDITIONAL FREE CASH FLOWADDITIONAL FREE CASH FLOW

THE TV INDUSTRY HAS BEEN ON FIRETHE TV INDUSTRY HAS BEEN ON FIRE

YT

D S

tock

Per

form

ance

YT

D S

tock

Per

form

ance


0%

5%

10%

15%

20%

25%

30%

35%

S&P 500 2013 Performance YTD CBS 2013 Performance YTD

CCO2013 Performance YTD LAMR 2013 Performance YTD

The Stock Market: Out of HomeThe Stock Market: Out of HomeY

TD

Sto

ck P

erfo

rman

ceY

TD

Sto

ck P

erfo

rman

ce

AND OUTDOOR HAS BEEN NO SLOUCH EITHERAND OUTDOOR HAS BEEN NO SLOUCH EITHER IT IS ALL ABOUT THE REITIT IS ALL ABOUT THE REIT

CBS HAS OUTPERFORMED BY 1,400BPSCBS HAS OUTPERFORMED BY 1,400BPS LAMR HAS OUTPERFORMED BY 900BPSLAMR HAS OUTPERFORMED BY 900BPS CCO HAS BEEN IN-LINECCO HAS BEEN IN-LINE


7.8x 7.6x 8.4x6.5x

29.3x

7.7x 7.8x10.4x

7.2x

20.8x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

TV Radio Outdoor Newspapers Internet

'08/'09 '13E/'14E

The Stock Market: ValuationThe Stock Market: Valuation

Source: FactSet and Wells Fargo Securities, LLC estimatesSource: FactSet and Wells Fargo Securities, LLC estimates

EV

/EB

ITD

A M

ult

iple

EV

/EB

ITD

A M

ult

iple

The Stock Market: What Investors Care AboutThe Stock Market: What Investors Care About

SustainabilitySustainability EBITDA margins and growthEBITDA margins and growth

ExpensesExpenses Fixed versus variableFixed versus variable

The REITThe REIT Peak to trough cyclicalityPeak to trough cyclicality Capital intensityCapital intensity

Digital Digital PenetrationPenetration CannibalizationCannibalization

CompetitionCompetition MobileMobile

CategoriesCategories Real estate recovery?Real estate recovery?


2929

Our Forecasts: The Economy and AdvertisingOur Forecasts: The Economy and Advertising

Source: TVB, CAB, RAB, OAAA, NAA, MPA, and Wells Fargo Securities, LLC estimatesSource: TVB, CAB, RAB, OAAA, NAA, MPA, and Wells Fargo Securities, LLC estimates2929

2011A 2012A 2013E 2014ENominal GDP 4% 4% 3% 4%Real GDP 2% 2% 2% 2%Unemployment 9% 8% 8% 7%

Radio 1% 1% (0%) 1%Broadcast TV 1% 10% (6%) 8%Newspapers (7%) (7%) (7%) (6%)

Outdoor 4% 4% 4% 4%

Internet 23% 16% 14% 11%

Overall Advertising 2% 3% (0%) 3%

3030

Questions?Questions?

3030

Marci Ryvicker, CFA, CPAMarci Ryvicker, CFA, CPA

Wells Fargo Securities, LLCWells Fargo Securities, LLC

[email protected]@wellsfargo.com

212-214-5010212-214-5010

31

DisclosuresDisclosures

31

Additional Information Available Upon Request

I certify that:1) All views expressed in this research report accurately reflect my personal views about any and all of the subject securities or issuers discussed; and 2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by me in this research report.

Wells Fargo Securities, LLC maintains a market in the common stock of Lamar Advertising Company, Clear Channel Outdoor Holdings, Inc., CBS Corporation. Wells Fargo Securities, LLC or its affiliates managed or comanaged a public offering of securities for CBS Corporation within the past 12 months. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from CBS Corporation. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from CBS Corporation, Clear Channel Outdoor Holdings, Inc. in the past 12 months. Clear Channel Outdoor Holdings, Inc., CBS Corporation currently is, or during the 12-month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to Clear Channel Outdoor Holdings, Inc., CBS Corporation. CBS Corporation currently is, or during the 12-month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided noninvestment banking securities-related services to CBS Corporation. Wells Fargo Securities, LLC received compensation for products or services other than investment banking services from CBS Corporation in the past 12 months. Wells Fargo Securities, LLC or its affiliates has a significant financial interest in CBS Corporation, Lamar Advertising Company. Wells Fargo Securities, LLC or its affiliates intends to seek or expects to receive compensation for investment banking services in the next three months from an affiliate of Lamar Advertising Company, Clear Channel Outdoor Holdings, Inc., CBS Corporation. Wells Fargo Securities, LLC or its affiliates managed or co-managed a public offering of securities for an affiliate of CBS Corporation, Clear Channel Outdoor Holdings, Inc., Lamar Advertising Company within the past 12 months. Wells Fargo Securities, LLC or its affiliates received compensation for investment banking services from an affiliate of Lamar Advertising Company, Clear Channel Outdoor Holdings, Inc., CBS Corporation in the past 12 months.

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CBS: Risks include a downturn in the economic/advertising environment and/or ratings weakness (radio and TV).CCO: Risks include a high debt load which may become unmanageable during an economic slowdown, and a potential conflict of interest at CCU.LAMR: Risks include a negative REIT outcome (i.e. IRS does not approve it), or significant deceleration in top line growth.

Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions.Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm, which includes, but is not limited to investment banking revenue.

STOCK RATING1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the next 12 months. BUY2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market over the next 12 months. HOLD3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12 months. SELLSECTOR RATINGO=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months.M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.VOLATILITY RATINGV = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.

As of: 5/15/201348% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Outperform.Wells Fargo Securities, LLC has provided investment banking services for 47% of its Equity Research Outperform-rated companies.49% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Market Perform.Wells Fargo Securities, LLC has provided investment banking services for 37% of its Equity Research Market Perform-rated companies.3% of companies covered by Wells Fargo Securities, LLC Equity Research are rated Underperform.Wells Fargo Securities, LLC has provided investment banking services for 21% of its Equity Research Underperform-rated companies.


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Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission and a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Institutional Securities, LLC, a member of FINRA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, Wells Fargo Bank, N.A. and Wells Fargo Securities International Limited, authorized and regulated by the Financial Services Authority.Wells Fargo Securities, LLC is a U.S. broker-dealer registered with the U.S. Securities and Exchange Commission and a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities Investor Protection Corp.This report is for your information only and is not an offer to sell, or a solicitation of an offer to buy, the securities or instruments named or described in this report. Interested parties are advised to contact the entity with which they deal, or the entity that provided this report to them, if they desire further information. The information in this report has been obtained or derived from sources believed by Wells Fargo Securities, LLC, to be reliable, but Wells Fargo Securities, LLC, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment ofWells Fargo Securities, LLC, at this time, and are subject to change without notice. For the purposes of the U.K. Financial Services Authority's rules, this report constitutes impartial investment research. Each of Wells Fargo Securities, LLC, andWells Fargo Securities International Limited is a separate legal entity and distinct from affiliated banks. Copyright © 2013Wells Fargo Securities, LLC.

marci l. ryvicker, cpa, cfa los angeles, california may 2013 please see page 30 for rating...

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