Recommendation Industry Information Analysis

◦ Business◦ Economic◦ Financial◦ Valuation

Summation and comments

Decrease SIM portfolio by 42 basis points to come in line with S&P 500

Reallocate funds within the Telecommunication SIM Sector

Sector S&P 500 SIM Portfolio DifferenceConsumer Discretionary 9.11% 7.51% -1.60%Consumer Staples 11.94% 12.23% 0.29%Energy 12.35% 12.80% 0.45%Financials 14.66% 6.59% -8.07%Health Care 12.65% 13.13% 0.48%Industrial 10.09% 11.97% 1.88%Information Technology 19.04% 21.97% 2.92%Materials 3.39% 4.52% 1.13%Telecommunications 3.09% 3.51% 0.43%Utilities 3.68% 3.19% -0.49%

Industries Market CapWireless Telecom Service $12.00Integrated Telecom Service $116.90

Largest Companies in the Telecom Sector AT&T

◦ Former SBC merged with AT&T creating the new AT&T (USA) China Mobile

◦ Formerly China state-owned, now still state-controlled, one of two mobile phone monopolies in the entire China.

Vodafone ◦ Britain's largest telecom operator.

Verizon Communications◦ US-based telecom company formed after a series of mergers.

Deutsche Telekom◦ German telecom company, also owns T-Mobile.

America Movil◦ Mexican operator controlled by the world's richest man - Carlos

Slim.

MTD QTD YTD-5.05% -5.05% -7.95%

Mature and Defensive (Industry Specific)◦ Established networks and low maintenance costs,

little need for increased capital spending.◦ More resistant to economic fluctuations, domestic

and foreign. Marketing Mix Indicators

◦ Product◦ Price◦ Distribution◦ Promotion

.85 Beta

Demand saturated with providers New capacity

◦ 3G and 4G networks◦ Open Interface programming

Government Regulations Currency Fluctuations New Innovations Spectrum Availability Workforce

Domestic and International Spectrum availability User dynamics

Threats of New Entrants◦ Capital intensity◦ Ownership of a telecom license◦ Acceptable radio spectrum

Power of Suppliers◦ Large number of vendors dilutes the bargaining power

Power of Buyers◦ Increasing choice◦ Low differentiation◦ Switchover costs

Availability of Substitutes◦ Cable TV, Satellite Operators, and Internet

Competitive Rivalry◦ Cut-Throat◦ Low price and slight differentiations

Economic Factor CorrelUnemployment -0.65Consumer Confidence 0.72New Homes 0.81Federal Funds Rate 0.74Capital Spending 0.82

Sector Growth Financial Analysis Sales Earnings 5-year Growth Rate 8% 9% 2005 2006 2007 2008 2009 AverageNet Profit Margin 10.1% 10.3% 10.4% 9.4% 8.5% 9.7%Return on Equity 14.8% 14.3% 14.9% 13.4% 13.9% 14.3%

S&P 500 Growth Financial Analysis Sales Earnings 5-year Growth Rate 7% 0% 2005 2006 2007 2008 2009 AverageNet Profit Margin 8.8% 9.3% 8.9% 6.5% 6.2% 7.9%Return on Equity 17.6% 21.0% 17.0% 15.0% 11.0% 16.3%

Industry - Wireless Growth Financial Analysis Sales Earnings 5-year Growth Rate 6% -19% 2005 2006 2007 2008 2009 AverageNet Profit Margin 11.2% 10.1% 6.8% 1.4% 1.0% 6.1%Return on Equity 12.3% 7.6% 4.9% 2.7% 2.2% 5.9%

Industry - Integrated Telecom Growth Financial Analysis Sales Earnings 5-year Growth Rate 10% 14% 2005 2006 2007 2008 2009 AverageNet Profit Margin 10.1% 10.4% 11.0% 10.6% 9.6% 10.3%Return on Equity 15.7% 18.0% 19.0% 16.0% 16.8% 17.1%

AT&T

2005 2006 2007 2008 2009 Average

Net Profit Margin 10.9% 11.7% 10.0% 10.4% 17.9% 12.2%

Return on Equity 10.1% 8.6% 10.4% 12.2% 15.6% 11.4%

2005 2006 2007 2008 2009 Average

Total Sales $ 43,862 $ 63,055 $ 118,928 $ 124,028 $ 123,008 $ 94,576

Depreciation $ 7,622 $ 9,879 $ 21,546 $ 19,883 $ 19,661 $ 15,718

Depreciation % of Sales 17.4% 15.7% 18.1% 16.0% 16.0% 16.6%

Operating Margins 14.1% 16.3% 17.2% 18.2% 18.5% 16.9%

Operating Cash Flows Positive Operating Cashflows

Verizon

2005 2006 2007 2008 2009 Average

Net Profit Margin 9.8% 6.2% 5.9% 6.6% 6.7% 7.0%

Return on Equity 19.2% 12.4% 11.1% 13.9% 14.9% 14.3%

2005 2006 2007 2008 2009 Average

Total Sales $ 75,112 $ 88,144 $ 93,469 $ 97,354 $ 103,970 $ 91,610

Depreciation $ 14,047 $ 14,545 $ 14,377 $ 14,565 $ 15,596 $ 14,626

Depreciation % of Sales 18.7% 16.5% 15.4% 15.0% 15.0% 16.1%

Operating Margins 19.0% 15.2% 16.7% 17.3% 17.0% 17.0%

Operating Cash Flows Positive Operating Cashflows

  Sector S&P 500 Wireless Integrated

P/Trailing E -33% -33% 209% -34%

P/Forward E -11% -16% NM -18%

P/B -19% 14% -33% -22%

P/S -33% -18% -59% -33%

P/CF -36% -20% -60% -29%

>30% below mean – Green>0% above mean - Red

Company Comparison NIHD AT&T VerizonP/Forward E -28% -16% -13%P/S -58% -24% -43%P/B -71% -32% -26%P/EBITDA -64% -40% -49%P/CF -55% -36% -25%

Slightly undervalued, Defensive (.85), Cheap relative to S&P 500

Potential growth in wireless and data division

Cut throat competition in the growth areas Tightening profit margins in the wireless

industry Uncertainty in global financial market

Decrease SIM portfolio by 42 basis points to come in line with S&P 500

Reallocate funds within the Telecommunication SIM Sector

Questions?