EARNINGS INSIGHT. Key Metrics. S&P 500 October 3, 2014

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1 EARNINGS INSIGHT Key Metrics John Butters, Senior Earnings Analyst Media Questions/Requests S&P 500 October 3, Earnings Growth: The estimated earnings growth rate for Q is 4.6%. The Telecom Services sector is expected to report the highest earnings growth for the quarter, while the Consumer Discretionary sector is the only sector expected to report a year-over-year decline in earnings. + Earnings Revisions: On June 30, the estimated earnings growth rate for Q was 9.0%. Nine of the ten sectors have lower growth rates today (compared to June 30) due to downward revisions to earnings estimates, led by the Financials and Energy sectors. + Earnings Guidance: For Q3 2014, 82 companies have issued negative EPS guidance and 27 companies have issued positive EPS guidance. + Valuation: The current 12-month forward P/E ratio is This P/E ratio is based on Thursday s closing price ( ) and forward 12-month EPS estimate ($129.63). + Earnings Scorecard: Of the 21 companies that have reported earnings to date for Q3 2014, 16 have reported earnings above the mean estimate and 14 have reported sales above the mean estimate. All data published in this report is available on FactSet. Please contact media_request@factset.com or FACTSET for more information. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 1

2 Topic of the Week EARNINGS INSIGHT October 3, 2014 Higher EPS Estimate Cuts in Q3 Relative to Recent Averages, But Below Long-Term Average Over the course of the third quarter, analysts have lowered earnings estimates for companies in the S&P 500 for the quarter. The Q3 bottom-up EPS estimate (which is an aggregation of the estimates for all 500 companies in the index) dropped 4.2% (to $29.06 from $30.33) from June 30 through September 30. How significant is a 4.2% decline in the aggregate EPS estimate during the quarter? How does this decrease compare to recent quarters? During the past year (4 quarters), the average decline in the EPS estimate during the quarter has been 3.2%. During the past five years (20 quarters), the average decline in the EPS estimate during the quarter has been 2.7%. During the past ten years, (40 quarters), the average decline in the EPS estimate during the quarter has been 4.5%. Thus, the decline in the EPS estimate recorded during the course of the Q quarter was larger than both the trailing 1-year and 5-year averages. However, the decrease was slightly below the 10-year average. While the decline in expected EPS for the index was larger than more recent averages for the quarter, the value of the index actually increased during this same period. From June 30 through September 30, the value of the S&P 500 increased 0.6% (to from ). Is it unusual for the earnings estimate for the index to decline and the value of the index to increase during the course of a quarter? In recent quarters, it has not been unusual for the value of the index to increase at the same time analysts are trimming earnings estimates for the same quarter. In fact, it has occurred in 14 of the past 20 quarters (including Q3 2014). During these 14 quarters, the average decrease in the bottom-up EPS has been 3.0%, while the average increase in the value of the index has been 6.4%. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 2

3 Earnings Season: Q Overview EARNINGS INSIGHT October 3, 2014 In aggregate, earnings for the third quarter for the S&P 500 are expected to increase by 4.6% on a yearover-year basis. The estimated growth rate today is nearly half the expectation at the start of the quarter (9.0%). The decline in the growth rate can be attributed in part to Bank of America, as analysts included the impact of the company s settlement with the DOJ in their Q3 estimates. In addition, 82 companies in the index have guided EPS estimates lower for the quarter. Overall, the Telecom Services, Materials, Health Care, and Financials sectors are projected to report the highest earnings growth rates, while the Consumer Discretionary sector is the only sector projected to a report a decline in earnings. In terms of revenues, sales for the S&P 500 are projected to increase by 3.6% on a year-over-year basis. The market will likely be watching for comments from companies regarding results (or economic conditions) in the United States, Europe, and China, as well as comments regarding geopolitical risks. Looking at forward estimates, analysts are projecting much higher earnings growth in Q and the first half of 2015 compared to Q However, they are not predicting a substantial improvement in revenue growth, which implies that net margins are expected to increase in future quarters as well. Despite recent declines in the value of the index, the forward 12-month P/E ratio of 15.0 is still well above the 5-year and 10-year averages. Earnings Revisions: Earnings Growth Rate Cut Nearly in Half since June 30 Little change in Estimated Earnings Growth Rate This Week The estimated earnings growth rate for the third quarter is 4.6% this week, slightly below the estimated earnings growth rate of 4.7% last week. The small decrease in the earnings growth rate this past week was mainly due to downward revisions to earnings estimates for Ford Motor, partially offset by small upward revisions to earnings estimates for companies in the Financials sector (including Citigroup, Berkshire Hathaway, and Allstate). Financials and Energy Sectors Have Seen Largest Cuts to Earnings Growth Estimates since June 30 The estimated earnings growth rate for Q of 4.6% is nearly half the estimate of 9.0% at the start of the quarter (June 30). Nine of the ten sectors have recorded a decline in expected earnings growth since the beginning of the quarter due to downward revisions to earnings estimates, led by the Financials and Energy sectors. The only sector that has recorded an increase in expected earnings growth since the start of the quarter is the Health Care sector. The Financials sector has recorded the largest decline in expected earnings growth (to 10.5% from 20.6%) since the beginning of the quarter. At the company level, Bank of America has witnessed the largest decrease in expected earnings (to -$0.09 from $0.32) in the sector and accounts for most of the drop in the growth rate, as analysts have incorporated the negative impact of the company s settlement (announced on August 21) with the DOJ and other government entities into their EPS estimates. Despite the reduction in EPS, the price of the stock of the company has actually increased by 12.0% (to $17.21 from $15.37) since June 30. Over this same time frame, the price of the Financials sector as a whole has increased by 0.8% (to from ), which is the third highest increase in the price of any sector over this period. The Energy sector has witnessed the second largest dip in expected earnings growth (to 4.0% from 11.9%) since the start of the quarter. At the company level, 37% of the companies in the sector have seen double-digit reductions to their EPS estimates during this time, led by Noble Energy (to $0.52 from $0.84), Noble Corporation (to $0.55 from $0.86), and Williams Companies (to $0.19 from $0.28). Since June 30, the price of the Energy sector has declined by 11.2% (to from ), which is the largest price decrease of all ten sectors during this period. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 3

4 Health Care: Only Sector to Record Increase in Expected Earnings Growth since June 30 On the other hand, the Health Care sector is the only sector that has witnessed an increase in expected earnings growth (to 10.6% from 9.4%) since the start of the quarter. At the company level, just 7% of the companies in this sector have recorded double-digit increases to EPS estimates during this time, led by Mallinckrodt (to $1.27 from $0.89), Gilead Sciences (to $1.92 from $1.50), Universal Health Services (to $1.39 from $1.21), and Biogen Idec (to $3.45 from $3.01). Since the start of the third quarter, the value of the Health Care sector has jumped 3.7% (to from ), which is the highest increase in price of all ten sectors over this period. Higher Earnings Estimate Cuts in Q3 Compared to 1-Year and 5-Year Averages Over the course of the third quarter, analysts cut earnings estimates in aggregate by levels above the trailing 1-year and 5-year averages. The percentage decline in the Q3 bottom-up EPS estimate (which is an aggregation of the earnings estimates for all 500 companies in the index and can be used as a proxy for the earnings for the index) was 4.2% during the quarter. This decline in the EPS estimate was above the trailing 1-year average (-3.2%) and the trailing 5-year average (-2.7%), but below the trailing 10-year (-4.5%) average for a quarter. Please see page 2 for more details. Earnings Guidance: Negative Guidance (75%) Above Average At this point in time, 109 companies in the index have issued EPS guidance for the third quarter. Of these 109 companies, 82 have issued negative EPS guidance and 27 have issued positive EPS guidance. Thus, the percentage of companies issuing negative EPS guidance to date for the third quarter is 75% (82 out of 109). This percentage is above than the 5-year average of 67%. For more details on guidance, please see the most recent FactSet Guidance Quarterly report, published on September 30 ( Estimated Earnings Growth: 4.6% The estimated earnings growth rate for Q is 4.6%. Nine sectors are expected to report higher earnings relative to a year ago. Four of these nine sectors are predicted to reported double-digit earnings growth: Telecom Services, Materials, Health Care, and Financials. On the other hand, the Consumer Discretionary sector is the only sector projected to report a year-over-year decline in earnings. Telecom Services: Ex-Verizon, Growth Rate Drops to -5% The Telecom Services sector is predicted to report the highest earnings growth rate of all ten sectors at 23.3%. At the company level, Verizon Communications is the only company within the sector projected to report growth in EPS for the quarter. The mean EPS estimate for the company for Q is $0.93, compared to actual EPS of $0.77 in Q If Verizon is excluded, the earnings growth rate for the sector would drop to -5.2%. Materials: Strength in Chemicals Industry The Materials sector is projected to report the second highest earnings growth rate at 11.1%. At the industry level, only three of the five industries are expected to report earnings growth, led by the Construction Materials (62%) and Chemicals (19%) industries. However, the Chemicals industry is by far the largest contributor to growth for the Materials sector. If this industry is excluded, the earnings growth rate for the sector would fall to -2.5%. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 4

5 Health Care: Gilead Sciences Leads Growth EARNINGS INSIGHT October 3, 2014 The Health Care sector is predicted to report the third highest earnings growth rate at 10.6%. At the company level, Gilead Sciences is expected to report the highest percentage growth in EPS in the sector. The mean EPS estimate for the company for Q is $1.92, compared to actual EPS of $0.52 in Q The company is also the largest contributor to earnings growth for the sector. If Gilead Sciences is excluded, the earnings growth rate for the sector would drop to 3.9%. Financials: A Tale of Two Companies The Financials sector is projected to report the fourth highest earnings growth rate at 10.5%. At the company level, two companies are having significant and opposite effects on the estimated earnings growth rate for the sector: JPMorgan Chase and Bank of America. JPMorgan Chase is the largest contributor to earnings growth for the sector, mainly due to a charge the company reported in the year-ago quarter. The mean EPS estimate for the company for Q is $1.38, compared to actual EPS of -$0.17 in Q The loss reported by JPMorgan Chase in Q included a charge of $1.85 for legal expenses and reserves. If JPMorgan Chase is excluded, the earnings growth rate for the sector would drop to -3.2%. On the other hand, Bank of America is the largest detractor to earnings growth for the sector, mainly due to the settlement with the DOJ announced in August. The mean EPS estimate for the company is -$0.09, compared to actual EPS of $0.20 in Q The expected loss for Bank of America in Q includes a negative impact of approximately $0.43 per share due to the settlement with the DOJ announced on August 21. If Bank of America is excluded, the earnings growth rate for the Financials sector would rise to 18.8%. Consumer Discretionary: PulteGroup a Drag on Growth Due to Comparison to High Year-Ago EPS The Consumer Discretionary sector is the only sector predicted to report a year-over-year decline in earnings at -5.7%. At the company level, PulteGroup is the largest contributor to the expected earnings decline for the sector, mainly due to a gain the company reported in the year-ago quarter. The company is expected to report EPS of $0.36 for Q3 2014, compared to actual EPS of $5.87 in the year-ago quarter. The unusually high EPS reported by PulteGroup in Q included a deferred tax asset valuation allowance reversal (gain) of $5.42. If PulteGroup is excluded, the earnings growth rate for the sector would jump to 1.9%. Estimated Revenue Growth: 3.6% The estimated revenue growth rate for Q is 3.6%, which is slightly above the estimated growth rate of 3.5% at the start of the quarter (June 30). Upward revisions to revenue estimates for companies in the Energy and Health Care sectors, partially offset by downward revisions to revenue estimates for companies in the Consumer Discretionary, Financials, Industrials, and Materials sectors, have accounted for most of the improvement in the revenue growth rate for the index since the start of the quarter. Overall, nine sectors are expected to report revenue growth for the quarter, led by the Health Care sector. The Energy sector is the only sector projected to see a year-over-year decline in revenues. The Health Care sector is predicted to have the highest revenue growth of all ten sectors at 10.2%. All six industries in the sector are predicted to report sales growth for the quarter. Four of the six industries are expected to report double-digit sales growth, led by the Biotechnology (37%) industry. On the other hand, the Energy (-3.0%) sector is the only sector projected to report a year-over-year decrease in sales for the quarter. Five of the seven sub-industries in the sector are predicted to report a decrease in revenue, led by the Coal & Consumable Fuels (-27%) sub-industry. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 5

6 Economic Themes: U.S., Europe, and China United States EARNINGS INSIGHT October 3, 2014 On a quarter-over-quarter basis (SAAR), U.S. economic growth has been inconsistent in recent quarters. In Q4 2013, Q1 2014, and Q2 2014, quarter-over-quarter (SAAR) GDP growth rates for the U.S. were 3.5%, -2.1%, and 4.6%. According to FactSet Economic estimates, quarter-over-quarter (SAAR) GDP growth for the third quarter is estimated to be 3.1%. Despite the inconsistency, a number of companies to date have reported strong results from the U.S. and North America in their third quarter earnings releases and conference calls. And finally, North America continues to be a growth driver for the company, with Q1 revenues up 12%. NIKE (Sep. 25) Let me start with the United States, our largest single market where I'm particularly pleased with our 10% revenue growth for the fourth quarter and 8% revenue growth for the full year. Accenture (Sep. 24) The global economy has improved, although it certainly remains a multi-speed world. The U.S. is leading the way and emerging markets are picking up. FedEx (Sep. 17) However, other companies have reported weak results in the U.S. or have expressed reservations about future economic growth. When we introduced our fiscal 2015 guidance in July, we indicated that we were still looking for more consistency in the U.S. economy. We continue to see inconsistent employment figures resulting in no real change to our customers hiring patterns, and we see heightened global uncertainty that may affect U.S. businesses. We are updating our fiscal 2015 guidance based on our first quarter results but also based on our views of the U.S. economic situation Cintas (Sep. 29) Our results were driven by sales and profit declines in the U.S., where industry trends were weak in the quarter. In addition, higher merchandising expense for our U.S. Retail businesses in this period depressed reported net sales and gross margin." -General Mills (Sep. 17) Europe On a quarter-over-quarter basis, economic growth in Europe has been weak in recent quarters. In Q4 2013, Q1 2014, and Q2 2014, quarter-over-quarter GDP growth rates in the Eurozone were 0.3%, 0.2%, and 0.0%. According to FactSet Economic estimates, economic growth in the Eurozone is expected to remain weak, as quarter-over-quarter GDP growth in the Eurozone is estimated to rise 0.3% for the third quarter. Despite the weak economic growth, a number of companies to date have cited strong results from Europe in their third quarter earnings releases and conference calls. First, Western Europe, where our incredible business momentum continued into the first quarter, with revenues up 25%; our revenue growth was broad-based with every key category and territory reporting double-digit growth. There is tremendous energy around the brand in Europe, with innovative products that are resonating with consumers. We saw strong results from both performance footwear and apparel, as well as in sportswear. NIKE (Sep. 25) In Europe, despite an economic environment that continues to be difficult, we are performing very well in many of our largest countries, including France, Italy, Germany, and the United Kingdom. Accenture (Sep. 24) Our continental European operations also enjoyed strong yield and profit improvement in the quarter, reflecting continued progress for the Costa brand. Carnival Corp. (Sep. 23) FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 6

7 China EARNINGS INSIGHT October 3, 2014 On a year-over-year basis, economic growth in China has been declining in recent quarters. In Q3 2013, Q4 2013, and Q1 2014, year-over-year growth GDP growth rates in China were 7.8%, 7.7%, and 7.4%. In Q2 2014, there was a slight uptick in GDP growth to 7.5%. However, according to FactSet Economic estimates, year-over-year GDP growth in China is expected to dip back to 7.3% for the third quarter. Despite the slowing growth, a number of companies to date have cited solid results from China in their third quarter earnings releases and conference calls. Our consumer business results were led by a 15% sales increase in China McCormick & Co. (Oct. 2) In Greater China, we continue to see strength in the NIKE Brand and positive near-term results from our actions to sharpen our product assortments and reset the marketplace. Revenues grew 20% in the quarter, led by 30% comp store growth in our own DTC doors. NIKE (Sep. 25) Our Asia operations performed particularly well during the quarter, driven by a double-digit yield increase in our China program, further solidifying our industry leading presence in this important emerging cruise market. Carnival Cruise (Sep. 23) There is a slowdown in the macro environment in China, which combined with government-driven changes in gifting policy is having some impact on our business there. Despite these factors, our first quarter constant currency sales in Greater China grew at a mid single-digit rate. With an exciting lineup of new products coming in the second half, we expect Greater China sales growth to strengthen in the remainder of the year. General Mills (Sep. 17) Geopolitical Themes: Russia/Ukraine and the Middle East During the third quarter, tensions between Russia and Ukraine continued and military action in the Middle East region escalated. However, these will likely not have a significant impact on the sales and earnings reported by S&P 500 companies for the third quarter, given the limited aggregate revenue exposure S&P 500 companies have in these two regions. According to FactSet Geographic Revenue Exposure, S&P 500 companies in aggregate only generate 2% of sales from the Middle East region and 2% of sales from the non-european Union region (which includes Russia and Ukraine). However, some companies have discussed or cited geopolitical issues in their earnings releases and conference calls. As Scott Farmer indicated in our press release earlier today, we believe the U.S. economy remains inconsistent, and we believe recent global events increase the unpredictability of the environment. Cintas (Sep. 29) So Russia, you're all aware of the geopolitical situation there. It's had a significant impact. In fact, one could argue that Russia was already slowing down before the geopolitical aspects. The sanctions have sped back up unfortunately, and we now see that the Russian GDP growth is about 0.3%, probably heading to zero, and probably no greater than 1% next year. The industry sales this year are down about 15%, and that means it's an industry of about $2.3 million. Most people were forecasting this year about $3.3 million. So about 1 million units reduction in the industry for this year, with that sort of level probably flowing through to next year.we didn't know when we wrote the plan that the level of deterioration that we would face in Russia. And the impact on that Russian deterioration this year is about $300 million more than we originally planned. Ford Motor (Sep. 29) In Central and Eastern Europe, currency-neutral revenues rose 9%, with growth across all key categories except action sports, and all territories except Russia and Israel. We continue to closely monitor the situation in these markets and remain focused on the things we control, building strong consumer connections, leading with innovative products, and managing a healthy marketplace. NIKE (Sep. 25) Thanks to the fantastic EMEA management team, considering the geopolitical situations in Europe and the Middle East, EMEA was up an astounding 7%. Oracle (Sep. 18) FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 7

8 Higher Net Margins Projected for Q414 Q215 EARNINGS INSIGHT October 3, 2014 While the estimated earnings growth rate for Q is 4.6%, analysts do expect earnings growth for the S&P 500 to be much higher through the middle of For Q4 2014, Q1 2015, and Q2 2015, analysts are predicting earnings growth rates of 8.8%, 10.2%, and 10.9%, respectively. For all of 2014, the projected earnings growth rate is 6.8%. For all of 2015, the projected earnings growth rate is 11.9%. However, revenue growth is not expected to improve dramatically over the next three quarters relative to expectations for Q3. The estimated revenue growth rate for Q is 3.6%. For Q4 2014, Q1 2015, and Q2 2015, analysts are predicting revenue growth rates of 3.6%, 4.6%, and 3.8%. For all of 2014, the projected revenue growth rate is 4.0%. For all of 2015, the projected revenue growth rate is 4.3%. Given this divergence in expected earnings and revenue growth over the next few quarters, analysts are expecting profit margins to continue to expand into Using the bottom-up sales-per-share (SPS) and earnings-per-share (EPS) estimates for the S&P 500 as proxies for expected sales and earnings for the index over the next few quarters, profit margin estimates can be calculated by dividing the expected EPS by the expected SPS for each quarter. Using this methodology, the estimated net profit margins for Q4 2014, Q1 2015, and Q are 10.4%, 10.5%, and 10.8%. These numbers are above the estimated net profit margin for Q (9.9%), and are also well above the average net profit margin of 9.3% recorded over the past four years. Valuation: Forward P/E Ratio is 15.0, above the 10-Year Average (14.1) The current 12-month forward P/E ratio is This P/E ratio is based on Thursday s closing price ( ) and forward 12-month EPS estimate ($129.63). At the sector level, the Consumer Staples (17.6) and Consumer Discretionary (17.2) sectors have the highest forward 12-month P/E ratios, while the Financials (12.9), Energy (13.0), and Telecom Services (13.4) sectors have the lowest forward 12-month P/E ratios. The P/E ratio of 15.0 for the index as a whole is above the prior 5-year average forward 12-month P/E ratio of 13.5, and above the prior 10-year average forward 12-month P/E ratio of However, it is below the forward 12-month P/E ratio of 15.3 recorded at the start of the fourth quarter (September 30). During the fourth quarter, the price of the index has decreased by 1.3%, while the forward 12- month EPS estimate has increased by 0.1%. At the sector level, no sector has recorded an increase in the forward 12-month P/E ratio since the start of the fourth quarter. All ten sectors have recorded a decrease in the forward 12-month P/E ratio since the start of the fourth quarter, led by the Materials (to 15.9 from 16.4) sector. Companies Reporting Next Week: 8 During the upcoming week, eight S&P 500 companies are scheduled to report earnings for the third quarter. Predicted Earnings Surprises The FactSet Sharp estimate predicts the direction of upside and downside EPS surprises relative to the mean EPS estimate. Next Week: 1 For the upcoming week, one company (Alcoa) has a Sharp EPS estimate above the mean EPS estimate (upside positive surprise indicator) for Q3 and no companies have a Sharp EPS estimate below the mean EPS estimate (downside surprise indicator). FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 8

9 Second Quarter: 48 EARNINGS INSIGHT October 3, 2014 For the S&P 500 overall, 44 companies have a Sharp EPS estimate above the mean EPS estimate (upside surprise indicator) for Q3 and 4 companies have a Sharp EPS estimate below the mean EPS estimate (downside surprise indicator) for Q3. The remaining companies in the index do not have a Sharp estimate at this time for Q3 (no surprise predicted) or have already reported actual EPS for Q3. At the sector level, the Financials sector currently has the highest number (15) and the highest percentage (18%) of companies with a Sharp estimate above the mean EPS estimate for the third quarter. At the company level within the sector, Allstate (+14.2%), XL Group (12.7%), and Travelers (+9.9%) have the largest upside differences (on a percentage basis) between the Sharp estimate and the mean estimate. Eight of these 15 companies are in the Insurance industry. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 9

10 Q3 2014: Scorecard FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 10

11 Q3 2014: Scorecard FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 11

12 Q3 2014: Scorecard FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 12

13 Q3 2014: Projected EPS Surprises (Sharp Estimates) FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 13

14 Q3 2014: Growth FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 14

15 Q4 2014: EPS Guidance EARNINGS INSIGHT October 3, 2014 FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 15

16 Q4 2014: EPS Revisions EARNINGS INSIGHT October 3, 2014 FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 16

17 Q4 2014: Growth FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 17

18 CY 2014: Growth FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 18

19 CY 2015: Growth FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 19

20 Bottom-up EPS Estimates: Revisions EARNINGS INSIGHT October 3, 2014 FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 20

21 Bottom-up EPS Estimates: Current & Historical FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 21

22 Bottom-up SPS Estimates: Current & Historical FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 22

23 Net Margins: Current & Historical EARNINGS INSIGHT October 3, 2014 FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 23

24 Forward 12M Price / Earnings Ratio: Sector Level FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 24

25 Forward 12M Price / Earnings Ratio: Long-Term Averages FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 25

26 Trailing 12M Price / Earnings Ratio: Long-Term Averages FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 26

27 Important Notice EARNINGS INSIGHT October 3, 2014 The information contained in this report is provided as is and all representations, warranties, terms and conditions, oral or written, express or implied (by common law, statute or otherwise), in relation to the information are hereby excluded and disclaimed to the fullest extent permitted by law. In particular, FactSet and its affiliates disclaim implied warranties of merchantability and fitness for a particular purpose and make no warranty of accuracy, completeness or reliability of the information. This report is for information purposes and does not constitute a solicitation or an offer to buy or sell any securities mentioned within it. The information in this report is not investment advice. FactSet and its affiliates assume no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this report. About FactSet FactSet (NYSE:FDS) (Nasdaq:FDS) combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations along with its affiliates from thirty locations worldwide, including Boston, New York, Chicago, San Francisco, London, Amsterdam, Frankfurt, Paris, Milan, Tokyo, Hong Kong, Mumbai, Dubai, and Sydney. FactSet.com Copyright 2014 FactSet Research Systems Inc. All rights reserved. 27