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Energy & Power Industry UpdateJuly 2011
Member FINRA/SIPC
July 2011
www.harriswilliams.com
Energy & Power Industry UpdateJuly 2011
What We’ve Been Reading
page 1
• With a string of reports released this past month across a range of topics, July is an unofficial
“summer reading” month. The reports begin at the macro level with BP‟s latest release of its annual
Statistical Review of World Energy. BP‟s website provides helpful reviews by energy type, plenty
of downloadable statistics for those inclined to make their own charts, and their “Energy Outlook
2030.” If time is a constraint, the following summary may be helpful. Global energy demand grew
at the fastest level since 1973 with growth rates above long-term trends in every region of the world.
While non-hydro renewables grew at the fastest rate (15.6% off of a small base), coal consumption
led the charge, growing 7.6% and outpacing natural gas (7.4%) and hydro power (5.3%). Expect
this trend to continue as inefficient energy consumers (read: developing nations) continue to drive
economic growth.
• Those trends may help explain why energy efficiency is top-of-mind for executives, building
owners, and facility managers in China and India. According to Johnson Controls‟ 2011 Energy
Efficiency Indicator: Global Results, China and India once again outpaced their North American
counterparts with regards to the prioritization of energy management initiatives. Globally, energy
efficiency remains a top priority, and this year‟s report shows some moderate improvement from
last year. More than three-quarters of respondents now have an energy reduction goal in place.
However, the greatest barrier to implementing efficiency improvements remains return on
investment. Not surprisingly, capital costs are a bigger issue for North American and European
survey respondents.
• Black & Veatch‟s 2011 electric utility survey, Strategic Directions in the Electric Utility Industry,
was released this past month. While the top ten “insights” published as part of the study will
surprise few (in no particular order these include: your utility bill will go up, coal will still be used
to supply energy, energy infrastructure is crumbling, the lack of U.S. energy policy is not a good
thing, natural gas is the new wind, and China is a competitive threat), they do provide a glimpse of
how the utility industry is thinking about the current environment.
• The Wall Street Journal proclaimed this past month that “Natural Gas [is] Entering „Golden Age‟.”
Also in June, MIT released its comprehensive interdisciplinary study, The Future of Natural Gas,
which seems to say, “Maybe it is, maybe it isn‟t.” Acknowledging that “shale gas is
transformative” and that we are still in the early stages of its effects, the study indicates that the U.S.
will most likely be an importer of natural gas within two decades. While in recent months the
“abundance” of natural gas seems to have shifted discussion of the resource from a “bridge to the
future” to just “the future,” Henry Jacoby, a professor of management at MIT, notes, “you had better
have something at the other end of the bridge.”
• Finally, the White House was kind to provide us with some additional reading material through its
heralded (read: a press conference was held for its release) report, A Policy Framework for the 21st
Century Grid: Enabling Our Secure Energy Future. While we applaud the effort, it may be best to
refer them to the Black & Veatch study above. Until a more holistic energy policy is created, we
may have to classify this report under the fiction category (for this summer at least).
Energy & Power Industry UpdateJuly 2011
LTM EBITDA Multiples1
Industry Observations
LTM Indexed Stock Performance1
Indexed LTM EBITDA Multiples1
• The Infrastructure and Industrial Services Indexed LTM EBITDA Multiple has continued to
climb from its three year low in November 2008 and shown particular strength through 2011.
• The Energy LTM Indexed Stock Performance continues to outperform the overall market due
to rising oil prices, surging natural gas activity, and increased aggregate demand.
• Commodity prices remain close to 52 week highs:
– Gasoline and ethanol trade at $2.72 and $2.52 per gallon, respectively.
– Oil currently trades at $91.16 per barrel.
– Central Appalachian Coal prices remain high at $76.16 per ton.
60
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Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11
S&P 500 Energy Power Industrial & Infrastructure Services
0
20
40
60
80
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120
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
Energy Power Industrial & Infrastructure Services
page 2
Index
%
Change
S&P 18.04
Energy 34.88
Power 20.87
I & IS 22.99
Index
%
Change
Energy (9.78)
Power (15.32)
I & IS (42.49)
Energy & Power Industry UpdateJuly 2011
Key Trading Statistics1
Current Valuations Versus Historical 5-Year Average1
Note: Based upon current EV / LTM EBITDA versus 5-year historical average. For Cleantech and Renewables, valuation is based upon EV /
LTM Sales.
5-Year
Average
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
Exploration and
Production
Refining Storage and
Transportation
Energy Services and
Equipment
Electric Utilities
Independent Power
Producers
Integrateds Mid-Cap Power
Industrial & Infrastructure
Services
Coal Producers
Engineering and
Construction
Diversified Power
Cleantech Renewables
page 3
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
180.0%
200.0%
Enegy Power Industrial & Infrastructure Services
Enegy Power Industrial & Infrastructure Services
Stock Price % Change TEV / 2011 P/E Ratio
Industry Segment 1 Month 12 Month 6/27/10 12/27/10 Current EBITDA Current 2009
Energy
Integrateds (6.5%) 34.8% 5.3x 4.8x 4.7x 3.5x 10.2x 8.3x
Energy Services and Equipment (8.2%) 59.5% 9.2x 10.7x 9.4x 5.9x 20.5x 11.8x
Exploration and Production (10.1%) 18.3% 7.4x 7.4x 9.5x 5.0x 31.2x 13.8x
Coal Producers (8.2%) 20.2% 7.3x 10.2x 9.3x 3.8x 19.2x 7.5x
Refining (3.9%) 89.7% 14.2x 10.6x 6.9x 4.4x NM 9.6x
Storage & Transportation (1.2%) 16.4% 13.0x 14.2x 13.8x 10.1x 24.9x 17.2x
Power
Diversified Power (3.3%) 31.9% 9.1x 10.6x 10.0x 8.0x 17.7x 12.2x
Mid-Cap Power (6.2%) 38.8% 8.0x 9.0x 8.7x 6.4x 21.7x 13.5x
Independent Power Producers (7.0%) 25.9% 5.7x 7.0x 17.5x 8.7x 28.9x 19.9x
Electric Utilities (0.3%) 15.5% 8.0x 7.7x 8.8x 7.9x 14.1x 13.2x
Renewables (6.4%) (5.1%) 1.5x 1.4x 1.3x 1.4x 14.5x 9.6x
Cleantech (7.5%) (26.1%) 1.8x 1.5x 1.2x 1.0x 18.3x 14.7x
Industrial & Infrastructure Services
Engineering & Construction (5.8%) 15.4% 7.2x 8.7x 8.9x 6.4x 23.8x 13.5x
Industrial & Infrastructure Services (5.7%) 40.8% 8.1x 10.0x 8.8x 7.3x 22.0x 14.0x
2011 Revenue
TEV /
TEV / LTM EBITDA Multiple as of
LTM Revenue
Energy & Power Industry UpdateJuly 2011
Gasoline and Ethanol1
Oil1 Natural Gas1
U.S. Rig Counts3
Electricity Prices1Coal1
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
($ p
er b
bl)
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
($ p
er M
MB
tu)
0.00
0.75
1.50
2.25
3.00
3.75
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
($ p
er g
all
on
)
Gasoline Ethanol
0
500
1,000
1,500
2,000
2,500
Ap
r-1
0
Ma
y-1
0
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
(# r
igs)
0.0
40.0
80.0
120.0
160.0
0.0
20.0
40.0
60.0
80.0
100.0
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11 ($
per t
on
-R
ott
erd
am
)
($ p
er t
on
-C
en
tra
l
Ap
pa
lach
ian
)
Central Appalachian Rotterdam
0.00
20.00
40.00
60.00
80.00
100.00
Jun
-10
Jul-
10
Au
g-1
0
Sep
-10
Oct-
10
No
v-1
0
Dec-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Jun
-11
($ p
er M
Wg
)
$91.16 per bbl
$58.81 per MWg
page 4
$4.28 per MMBtu
$2.52 per gallon
$2.72 per gallon
CAPP:
$76.17 per ton
Rotterdam:
$121.45 per ton
1,979 rigs
Energy & Power Industry UpdateJuly 2011
Quarterly United States E&P M&A Activity1
Select Recently Announced Energy & Power Transactions1,2
page 5
Date Target Business Description Acquirer
06/22/2011 Bealine Service Co., Inc. US based full-service carrier specializing in the
transportation of waste
Sprint Industrial Holdings, LLC
06/13/2011 Grizzly Wire Rope & Chain US based provider of wire rope, chain, hardware, and
cordage to the O&G industry
Delta Rigging & Tools, Inc.
06/02/2011 Maverick Group US based provider of fracturing and stimulation
services to the O&G industry
Basic Energy Services, Inc.
06/01/2011 Telvent Spain based provider of information technology
services for customers in the infrastructure markets
Schneider Electric SA
05/24/2011 FMC Tech Ltd. Ireland based developer of network management
systems for the transmission grid
General Electric Company
05/24/2011 Sietel Inc. US based provider of seismic data to the O&G industry Centerbridge Partners
05/18/2011 MACTEC, Inc. US based engineering and environmental services
company
AMEC plc
05/18/2011 USM Services Holdings, Inc. US based provider of electrical and mechanical
construction and facilities services
EMCOR Group, Inc.
05/16/2011 LeTourneau Technologies, Inc. US based manufacturer of equipment for the coal
mining industry
Joy Global, Inc.
05/16/2011 Patrick Energy Services Inc., T&D
Engineering Capabilities
US based provider of services for power transmission,
control, and distribution
SAIC, Inc.
05/12/2011 MXEnergy, Inc. US based supplier of natural gas and electricity to
homeowners and small businesses
Constellation Energy Group, Inc.
05/10/2011 Power Engineering Associates, Inc. US based consulting firm to electric, water, and gas
utilities
Metadigm Services
05/06/2011 Blackeagle Energy Services US based provider of oil and natural gas construction
and engineering services
Deseo Corporation
05/04/2011 TC Inspection US based provider of inspection and non-destructive
testing services to the energy sector
Clearview Capital, LLC
0
10
20
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40
50
60
70
Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
Nu
mb
er o
f T
ran
sact
ion
s
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
page 6
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
Energy
Integrateds
Exxon Mobil Corporation $387,318.9 $77.91 (5.7%) 31.8% 88.3% 6.4x 7.4x 6.3x 4.0x 10.9x 8.6x 0.1x
Chevron Corporation $192,253.6 $98.91 (4.2%) 41.2% 90.0% 4.6x 4.9x 4.6x 3.2x 9.5x 7.6x (0.1x)
ConocoPhillips $121,149.8 $71.56 (1.5%) 37.8% 87.5% 5.5x 4.7x 4.7x 3.8x 8.6x 8.2x 0.8x
Occidental Petroleum Corporation $82,683.7 $98.81 (7.3%) 20.9% 83.8% 7.5x 7.6x 7.3x 4.8x 16.5x 10.2x 0.3x
Marathon Oil Corporation $37,685.0 $49.04 (8.1%) 49.7% 90.3% 5.0x 4.6x 4.1x 3.2x 11.4x 8.1x 0.3x
Hess Corporation $27,208.1 $69.13 (12.0%) 28.5% 79.1% 3.8x 4.2x 4.0x 3.2x 9.1x 8.4x 0.5x
Median (6.5% ) 34.8% 87.9% 5.3x 4.8x 4.7x 3.5x 10.2x 8.3x 0.3x
Energy Services and EquipmentLarge Cap Diversified
Schlumberger Limited $114,463.6 $80.37 (5.1%) 38.0% 84.0% 11.1x 17.8x 14.5x 8.9x 23.2x 15.8x 0.7x
Halliburton Company $43,929.6 $45.97 (8.3%) 74.5% 89.3% 9.0x 10.8x 9.7x 6.2x 20.0x 11.9x 0.6x
Baker Hughes Incorporated $31,938.9 $67.66 (7.9%) 58.3% 85.4% 12.7x 12.4x 10.1x 5.9x 26.9x 12.8x 1.2x
National Oilwell Varco, Inc. $27,424.7 $70.36 (3.4%) 99.3% 85.0% 4.6x 8.7x 9.3x 7.1x 17.8x 13.3x (0.8x)
Weatherford International Ltd. $20,193.3 $17.57 (10.6%) 20.5% 62.5% 12.0x 14.2x 10.4x 6.0x NM 11.3x 4.3x
Median (7.9% ) 58.3% 85.0% 11.1x 12.4x 10.1x 6.2x 21.6x 12.8x 0.7x
Mid and Small Cap Equipment and Service ProvidersMid and Small Cap Equipment and Service Providers
Cameron International Corporation $11,045.3 $45.50 (3.9%) 28.0% 72.0% 8.7x 11.8x 10.6x 7.7x 20.6x 13.2x (0.2x)
Oil States International Inc. $4,583.4 $72.54 (7.3%) 74.9% 87.3% 7.0x 8.8x 10.4x 6.3x 20.4x 11.7x 2.3x
RPC Inc. $3,482.3 $23.05 (7.1%) 142.0% 79.3% 13.4x 10.6x 7.6x 4.7x 16.6x 9.9x 0.5x
Exterran Holdings, Inc. $3,241.5 $19.59 (9.1%) (26.5%) 65.4% 7.3x 7.6x 7.8x 6.1x NM NM 3.5x
Key Energy Services Inc. $2,967.7 $16.39 (6.5%) 59.7% 86.6% 18.4x 20.6x 17.6x 5.5x NM 11.7x 5.0x
Complete Production Services, Inc. $2,891.1 $29.74 (10.7%) 110.2% 85.6% 11.8x 9.8x 6.5x 4.1x 18.8x 9.1x 1.7x
Dril-Quip, Inc. $2,366.1 $65.19 (11.6%) 41.7% 77.8% 9.4x 16.3x 14.3x 10.3x 26.8x 17.4x (1.5x)
Basic Energy Services, Inc. $1,730.6 $27.99 0.5% 231.6% 88.7% 24.8x 14.0x 10.8x 5.3x NM 13.8x 6.9x
Median (7.2% ) 67.3% 82.5% 10.6x 11.2x 10.5x 5.8x 20.4x 11.7x 2.0x
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
page 7
Construction and Equipment ContractorsConstruction and Equipment Contractors
Transocean Ltd. $26,604.3 $60.16 (12.7%) 20.9% 70.0% 4.6x 6.2x 7.5x 5.8x 45.3x 9.4x 1.5x
Noble Corp. $12,653.7 $37.56 (9.6%) 28.3% 80.4% 3.3x 6.2x 12.2x 6.2x 21.1x 9.3x 1.5x
Nabors Industries Ltd. $10,429.4 $22.66 (18.0%) 18.6% 69.8% 7.2x 8.1x 6.9x 4.7x 45.9x 9.5x 2.9x
Diamond Offshore Drilling Inc. $9,914.4 $67.07 (7.9%) 8.7% 82.6% 4.1x 5.0x 5.9x 6.6x 10.3x 12.4x 0.3x
Technip $8,756.7 $98.58 (6.7%) 61.6% 89.1% 4.1x 8.5x 7.9x NA 17.9x NA (1.9x)
Subsea 7 SA $8,126.4 $23.11 (10.3%) 46.1% 81.1% 6.0x 8.6x 16.1x NA 17.6x NA (0.1x)
Helmerich & Payne Inc. $6,600.3 $60.49 (3.3%) 54.8% 85.8% 7.0x 7.7x 7.7x 5.7x 18.7x 13.5x 0.2x
Rowan Companies Inc. $5,562.4 $36.09 (9.2%) 52.9% 80.5% 5.2x 8.7x 10.6x 6.2x 17.7x 9.4x 1.7x
Patterson-UTI Energy Inc. $4,728.1 $27.76 (12.4%) 103.7% 85.6% 8.7x 8.5x 7.4x 4.2x 23.8x 10.8x 0.9x
Oceaneering International, Inc. $3,891.8 $37.44 (6.7%) 59.9% 81.1% 5.9x 8.2x 8.6x 7.2x 20.3x 15.9x (0.4x)
Hercules Offshore, Inc. $1,393.8 $5.05 (19.8%) 80.4% 72.2% 10.4x 9.2x 7.7x 8.7x NM NM 5.6x
Pioneer Drilling Co. $1,002.1 $13.53 (7.3%) 112.1% 83.3% 10.9x 9.5x 7.6x 4.4x NM 19.2x 3.4x
Cal Dive International Inc $666.9 $5.42 (16.4%) (14.8%) 66.2% 5.6x 13.2x 9.9x 4.4x NM 11.2x 2.8x
Median (9.6% ) 52.9% 81.1% 5.9x 8.5x 7.7x 5.8x 19.5x 11.0x 1.5x
Exploration and ProductionLarge Cap
Apache Corp. $53,503.2 $115.87 (6.0%) 28.9% 86.4% 4.9x 6.1x 5.4x 4.0x 12.5x 8.7x 1.0x
Anadarko Petroleum Corporation $46,681.4 $71.77 (8.8%) 90.5% 83.9% 5.8x 6.7x 8.5x 4.7x 138.3x 17.1x 1.5x
Devon Energy Corporation $36,150.0 $76.39 (8.3%) 20.0% 81.7% 6.1x 5.7x 7.3x 4.8x 20.2x 9.7x 0.6x
EOG Resources, Inc. $29,992.5 $98.16 (9.2%) (10.6%) 80.8% 15.5x 12.1x 12.5x 4.8x 141.1x 16.0x 1.6x
Chesapeake Energy Corporation $29,985.2 $27.86 (10.4%) 21.2% 77.5% 4.6x 4.9x 10.4x 5.0x 23.6x 8.9x 1.4x
Noble Energy, Inc. $16,438.1 $85.25 (7.7%) 35.5% 86.1% 8.6x 7.7x 10.2x 5.0x 30.1x 12.7x 0.7x
Southwestern Energy Co. $15,395.0 $40.14 (7.4%) (3.4%) 89.8% 10.5x 8.6x 9.7x 7.1x 25.1x 17.3x 0.7x
Pioneer Natural Resources Co. $11,991.8 $84.90 (6.8%) 30.1% 80.0% 10.8x 8.4x 12.8x 5.6x 64.1x 16.3x 1.4x
Murphy Oil Corporation $11,977.1 $62.39 (8.9%) 18.6% 79.8% 3.9x 4.6x 4.1x 3.0x 13.2x 8.0x (0.1x)
Newfield Exploration Co. $10,944.1 $64.30 (13.3%) 23.0% 82.5% 7.2x 6.8x 9.2x 5.0x 33.2x 10.5x 1.4x
Ultra Petroleum Corp. $8,314.3 $43.52 (9.9%) (7.1%) 85.0% 12.7x 7.8x 9.9x 7.2x 20.4x 14.8x 1.5x
Quicksilver Resources Inc. $4,524.4 $14.36 (1.5%) 20.0% 89.9% 3.0x 7.7x 7.6x 8.0x 7.3x 38.4x 3.2x
Median (8.5% ) 20.6% 83.2% 6.6x 7.3x 9.4x 5.0x 24.3x 13.7x 1.4x
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
page 8
Mid and Small Cap
Petrohawk Energy Corporation $10,047.0 $23.14 (11.9%) 21.9% 84.3% 10.6x 7.6x 14.1x 5.1x 88.3x 13.9x 2.8x
Plains Exploration & Production Company $8,355.7 $34.73 (4.8%) 60.2% 86.7% 8.2x 7.6x 9.5x 5.3x 42.8x 11.9x 3.7x
Cabot Oil & Gas Corporation $7,449.6 $61.41 5.7% 86.5% 96.8% 7.9x 8.9x 14.6x 7.8x 74.0x 30.2x 1.9x
SandRidge Energy, Inc. $7,441.8 $10.19 (10.9%) 60.0% 76.4% 16.0x 13.4x NM 7.2x NM 21.4x 7.1x
Forest Oil Corp. $4,587.8 $24.75 (16.8%) (17.0%) 61.5% 8.5x 7.5x 7.9x 5.0x 25.1x 10.3x 2.2x
Swift Energy Co. $1,877.3 $33.33 (11.4%) 10.0% 69.2% 6.3x 7.6x 6.3x 4.2x 25.9x 15.9x 1.6x
Delta Petroleum Corp. $524.1 $0.50 (29.1%) (48.1%) 37.8% NM 20.3x 41.7x 0.0x NM NM 10.3x
PetroQuest Energy Inc. $502.4 $6.44 (18.0%) (14.1%) 66.1% 4.2x 4.6x 4.6x 3.3x 33.5x 9.8x 0.8x
Median (11.7% ) 16.0% 72.8% 8.2x 7.6x 9.5x 5.0x 38.1x 13.9x 2.5x
Coal Producers
Peabody Energy Corp. $16,832.9 $56.49 (8.3%) 29.7% 76.4% 10.2x 11.2x 9.4x 5.5x 18.9x 9.4x 0.8x
CONSOL Energy Inc. $14,119.7 $47.13 (7.1%) 26.1% 83.7% 7.0x 11.6x 10.1x 6.0x 24.3x 10.7x 2.9x
Alpha Natural Resources, Inc. $9,619.3 $42.94 (19.1%) 14.4% 63.1% 7.7x 8.0x 12.2x 3.4x 39.2x 7.0x (0.1x)
Arch Coal Inc. $6,884.2 $25.01 (15.5%) 12.6% 67.6% 11.3x 11.3x 9.3x 3.8x 19.2x 6.4x 2.4x
Alliance Resource Partners LP $2,846.9 $74.98 3.1% 59.1% 89.2% 5.3x 5.5x 5.4x 4.5x 10.5x 8.9x 0.9x
Patriot Coal Corporation $2,126.8 $21.30 (6.5%) 53.3% 72.9% 5.0x 18.8x 32.4x 3.4x NM 7.5x 2.1x
James River Coal Co. $855.3 $19.52 (10.0%) 4.7% 72.1% 4.7x 5.2x 6.7x 3.3x 31.6x 7.4x 1.2x
Farmacol SA $287.5 $11.07 (8.0%) (11.7%) 64.7% 8.3x 9.3x 8.1x NA 10.6x NA 0.7x
Median (8.2% ) 20.2% 72.5% 7.3x 10.2x 9.3x 3.8x 19.2x 7.5x 1.0x
Refining
Valero Energy Corp. $16,914.4 $23.48 (12.8%) 25.1% 75.4% 14.1x 6.4x 4.7x 3.3x 12.0x 6.0x 1.3x
Sunoco, Inc. $6,477.3 $39.40 (1.9%) 8.7% 83.9% 14.2x 7.9x 6.1x 6.4x 24.1x 15.7x 1.1x
Holly Corporation $4,350.8 $61.59 0.1% 120.3% 90.2% 22.3x 11.5x 7.7x 5.0x 14.8x 10.0x 2.0x
Tesoro Corporation $4,199.2 $21.08 (12.7%) 67.3% 73.3% NM 17.0x 5.1x 3.5x 12.7x 7.4x 5.0x
Frontier Oil Corp. $2,726.3 $29.61 0.3% 103.9% 90.1% NM 42.5x 6.0x 4.4x 14.0x 9.6x (7.9x)
Western Refining Inc. $2,516.8 $16.55 (4.1%) 198.2% 84.9% 23.3x 9.8x 6.9x 4.2x 56.2x 6.7x 5.3x
CVR Energy, Inc. $2,146.9 $22.91 6.2% 187.1% 92.0% 6.9x 9.6x 7.7x 3.9x 28.8x 8.5x 0.1x
Alon USA Energy, Inc. $1,441.5 $10.21 (14.3%) 52.6% 65.5% NM NM 15.0x 5.7x NM 10.5x (6.0x)
Delek US Holdings Inc. $976.4 $14.04 (3.9%) 89.7% 91.1% NM 24.1x 9.3x 5.0x NM 14.4x 6.1x
Median (3.9% ) 89.7% 84.9% 14.2x 10.6x 6.9x 4.4x NM 9.6x 1.3x
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
page 9
Storage & Transportation
Kinder Morgan Energy Partners LP $36,023.4 $71.25 (4.0%) 8.0% 91.3% 13.7x 14.3x 13.3x 9.8x 43.4x 30.1x 5.1x
El Paso Corp. $31,975.1 $19.49 (6.8%) 64.6% 90.5% 8.0x 8.0x 12.7x 8.8x 34.6x 14.8x 4.3x
Plains All American Pipeline, L.P. $15,558.1 $62.74 1.0% 6.3% 95.1% 13.7x 15.1x 14.3x 11.2x 24.9x 17.1x 5.7x
Enbridge Energy Partners LP $13,619.0 $30.55 (1.5%) 15.8% 88.3% 11.8x 25.7x 28.9x 10.4x NM 19.2x 9.7x
Magellan Midstream Partners LP $8,558.3 $58.73 (0.5%) 27.1% 93.1% 15.7x 16.2x 15.7x 13.3x 19.3x 16.6x 3.9x
Buckeye Partners LP $8,524.7 $63.66 1.0% 7.4% 88.8% 13.4x 14.0x 22.9x 14.1x 27.4x 17.2x 7.0x
Sunoco Logistics Partners L.P. $4,170.5 $83.97 (0.8%) 17.0% 92.2% 12.0x 13.4x 11.5x 9.7x 9.1x 15.0x 4.1x
Holly Energy Partners L.P $1,534.8 $52.55 (4.5%) 22.8% 86.1% 12.6x 13.4x 12.1x 9.7x 23.2x 19.2x 4.8x
Median (1.2% ) 16.4% 90.9% 13.0x 14.2x 13.8x 10.1x 24.9x 17.2x 4.9x
Power
Diversified Power
General Electric Co. $577,346.9 $18.29 (5.9%) 22.7% 84.5% 26.5x 23.9x 20.2x 17.6x 14.3x 10.8x 14.9x
Siemens AG $116,771.2 $132.47 3.4% 43.3% 93.4% 7.4x 8.3x 7.6x 6.6x 13.4x 11.6x 0.1x
ABB Ltd. $54,984.4 $24.89 (5.9%) 37.2% 86.6% 7.7x 1.5x 11.1x 8.0x 18.9x 13.9x (0.5x)
Schneider Electric S.A. $46,017.2 $156.62 (0.7%) 48.4% 88.8% 8.7x 10.4x 9.9x NA 16.8x NA 0.8x
Emerson Electric Co. $43,958.0 $53.76 (0.7%) 19.8% 86.4% 9.6x 10.8x 9.3x 8.1x 18.7x 13.8x 0.8x
Alstom SA $20,135.5 $59.47 0.8% 26.6% 92.0% 4.2x 5.9x 6.7x NA 26.7x NA 0.9x
Eaton Corporation $19,237.4 $48.11 (6.4%) 37.1% 85.2% 9.7x 11.8x 10.1x 7.2x 15.5x 10.4x 1.7x
Cooper Industries plc $10,022.1 $58.41 (6.1%) 25.1% 83.4% 10.9x 12.1x 11.7x 9.2x 20.3x 12.8x 0.5x
Median (3.3% ) 31.9% 86.5% 9.1x 10.6x 10.0x 8.0x 17.7x 12.2x 0.8x
Mid-Cap Power
Ametek Inc. $7,759.7 $42.40 (0.6%) 54.0% 90.2% 12.1x 14.4x 12.8x 10.4x 21.7x 16.6x 1.8x
Thomas & Betts Corp. $2,833.3 $51.08 (6.2%) 38.8% 82.5% 8.0x 9.0x 8.7x 6.4x 18.4x 12.5x 0.5x
Valmont Industries, Inc. $2,607.8 $91.55 (8.1%) 18.4% 78.9% 9.6x 10.2x 9.6x 7.0x 22.9x 13.5x 0.5x
Littelfuse Inc. $1,195.7 $55.83 (6.9%) 70.4% 84.1% 7.8x 6.9x 7.7x 6.3x 14.5x 11.6x (0.4x)
Powell Industries, Inc. $286.3 $35.06 1.6% 22.5% 85.8% 3.1x 3.9x 6.2x 5.3x 38.8x 16.5x (1.7x)
Median (6.2% ) 38.8% 84.1% 8.0x 9.0x 8.7x 6.4x 21.7x 13.5x 0.5x
Independent Power Producers
NRG Energy, Inc. $13,352.8 $22.90 (6.9%) 4.8% 89.7% 4.1x 5.1x 5.8x 6.9x 38.3x 19.9x 3.2x
Dynegy Inc. $5,099.1 $6.00 1.4% 29.0% 90.0% 7.3x 8.9x 17.5x 12.5x NM NM 8.0x
GenOn Energy, Inc. $4,916.4 $3.69 (8.7%) NA 84.8% NA NA 21.9x 8.7x NM NA 2.3x
Mirrabooka Investments Limited $230.4 $1.88 (7.1%) 25.9% 89.6% NM NM NM NA 19.5x NA NM
Median (7.0% ) 25.9% 89.6% 5.7x 7.0x 17.5x 8.7x 28.9x 19.9x 3.2x
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
page 10
Electric Utilities
Southern Company $54,958.9 $39.75 (0.1%) 19.4% 97.3% 8.9x 9.2x 9.7x 9.0x 17.5x 14.6x 3.6x
Dominion Resources, Inc. $45,403.5 $47.70 1.0% 18.7% 98.2% 9.5x 10.1x 9.1x 9.0x 8.9x 14.6x 4.4x
NextEra Energy, Inc. $44,826.2 $56.83 (0.9%) 15.5% 96.4% 8.0x 7.7x 9.5x 8.2x 14.1x 11.9x 3.9x
Duke Energy Corporation $41,806.0 $18.56 (0.3%) 14.8% 95.2% 8.1x 7.9x 8.2x 7.8x 17.8x 13.2x 3.4x
Exelon Corporation $40,912.5 $42.20 1.2% 10.0% 94.9% 5.3x 5.5x 6.1x 7.9x 11.2x 13.5x 1.9x
FirstEnergy Corp. $36,265.2 $43.35 (2.3%) 20.4% 94.7% 8.8x 9.1x 11.9x 8.2x 19.9x 13.1x 6.5x
American Electric Power Co., Inc. $35,649.4 $37.21 (2.9%) 12.8% 95.4% 7.5x 7.4x 7.4x 7.2x 14.6x 11.5x 3.8x
PPL Corporation $28,282.2 $27.33 (1.9%) 9.6% 96.3% 11.5x 7.4x 9.3x 7.0x 11.2x 10.9x 5.4x
Progress Energy Inc. $26,357.8 $47.25 (0.2%) 20.3% 96.4% 7.7x 8.4x 8.8x 8.6x 16.2x 14.7x 4.2x
Edison International $25,252.9 $38.84 (1.2%) 18.8% 96.7% 5.8x 6.4x 6.7x 6.6x 10.4x 14.6x 3.1x
Entergy Corporation $23,734.3 $69.30 2.3% (5.6%) 85.8% 6.9x 6.5x 6.3x 7.1x 9.8x 11.1x 3.1x
Median (0.3% ) 15.5% 96.3% 8.0x 7.7x 8.8x 7.9x 14.1x 13.2x 3.8x
Renewables 6/27/10 12/27/10 Current
First Solar, Inc. $9,619.4 $116.94 (3.6%) (1.9%) 66.7% 4.2x 4.1x 3.8x 2.0x 16.6x 11.0x (0.5x)
Vestas Wind Systems A/S $5,802.8 $21.56 (23.3%) (51.6%) 35.8% 1.5x 1.2x 0.6x NA 27.8x NA 7.0x
Suntech Power Holdings Co. Ltd. $2,986.3 $7.56 (6.0%) (20.8%) 66.3% 1.3x 0.9x 0.9x 0.8x 5.6x 7.7x 4.5x
GT Solar International, Inc. $1,683.7 $15.64 35.6% 158.4% 101.7% 1.1x 1.5x 1.9x 1.4x 12.3x 8.5x (1.1x)
SunPower Corporation $1,094.0 $17.09 (17.8%) 28.8% 75.6% 1.1x 0.9x 0.5x 0.3x 11.3x 9.6x 2.5x
Clean Energy Fuels Corp. $920.4 $12.32 (13.7%) (22.9%) 63.6% 6.6x 6.0x 3.9x 2.3x 67.4x 57.0x 1.9x
Evergreen Solar Inc. $382.2 $0.59 (19.4%) (87.5%) 8.2% 1.6x 1.4x 1.3x 1.5x NM NM 29.8x
Rentech, Inc. $283.6 $1.02 5.7% (5.1%) 68.6% 1.6x 2.5x 1.9x 1.4x NM NM (5.3x)
FuelCell Energy Inc. $220.5 $1.42 (2.7%) 13.8% 58.9% 2.5x 3.9x 2.3x 1.4x NM NM 0.5x
Energy Conversion Devices, Inc. $159.5 $1.21 (11.7%) (73.6%) 20.9% 1.4x 1.1x 0.6x 0.7x NM NM (2.3x)
Ballard Power Systems Inc. $86.4 $1.60 (6.4%) (2.7%) 64.5% 1.4x 1.2x 1.3x 0.8x NM NM 1.3x
Median (6.4% ) (5.1% ) 64.5% 1.5x 1.4x 1.3x 1.4x 14.5x 9.6x 1.3x
Cleantech
Itron, Inc. $2,346.6 $46.94 (7.5%) (27.8%) 69.5% 1.8x 1.3x 1.0x 1.0x 18.0x 11.1x 1.5x
ESCO Technologies Inc. $1,046.9 $35.48 (3.8%) 28.9% 82.2% 1.6x 1.9x 1.5x 1.4x 15.0x 14.7x 1.2x
Ameresco, Inc. $807.9 $13.82 (7.0%) NA 79.1% 0.0x 1.2x 1.2x 1.0x 18.6x 14.8x 3.9x
Echelon Corporation $341.4 $9.22 (2.3%) 24.3% 86.0% 2.5x 3.5x 2.8x 2.0x NM NM 1.8x
EnerNOC, Inc. $313.6 $15.58 (13.5%) (51.1%) 42.4% 3.3x 1.6x 1.1x 0.9x 89.5x 25.7x (2.9x)
PowerSecure International, Inc. $129.8 $7.06 (12.0%) (24.3%) 63.9% 1.8x 1.5x 1.3x 0.9x NM 14.1x (2.1x)
Comverge, Inc. $73.0 $2.84 (21.8%) (70.7%) 27.2% 2.1x 1.3x 0.6x 0.4x NM NM 2.5x
Median (7.5% ) (26.1% ) 69.5% 1.8x 1.5x 1.2x 1.0x 18.3x 14.7x 1.5x
Revenue
TEV / LTM Revenue Multiple as of TEV / 2011
Member FINRA/SIPC
Energy & Power Industry UpdateJuly 2011
Stock Performance Net Debt /
Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA
TEV 6/27/11 Prior Month Prior Year LTM High 6/27/10 12/27/10 Current EBITDA Current 2011 12/27/2010
TEV / LTM EBITDA Multiple as of
page 11
Industrial & Infrastructure Services
Engineering & Construction
Fluor Corporation $8,422.4 $61.81 (9.1%) 39.3% 81.6% 5.0x 10.4x 11.2x 6.3x 30.6x 15.4x (2.4x)
Jacobs Engineering Group Inc. $4,879.0 $40.95 (9.8%) 3.7% 73.5% 7.0x 8.9x 8.9x 7.0x 21.4x 13.3x (0.6x)
KBR, Inc. $4,708.4 $36.11 (2.4%) 67.0% 93.1% 5.2x 6.0x 8.5x 6.5x 14.5x 13.8x (1.2x)
Dresser-Rand Group Inc. $4,322.3 $49.86 (3.5%) 51.1% 89.2% 7.2x 10.4x 15.7x 8.2x 32.6x 15.3x 1.0x
McDermott International Inc. $4,130.1 $18.50 (14.2%) (20.7%) 70.8% 15.9x 8.5x 9.3x 6.9x 17.8x 11.6x (0.8x)
Quanta Services, Inc. $3,705.8 $19.60 0.1% (10.3%) 81.1% 10.6x 8.6x 10.7x 6.7x 36.9x 17.3x (1.1x)
URS Corporation $3,670.3 $43.38 (0.6%) 6.3% 89.8% 7.1x 6.2x 5.9x 4.8x 13.6x 10.6x 0.3x
Chicago Bridge & Iron Company N.V. $3,159.3 $34.45 (8.1%) 67.6% 81.1% 5.4x 8.7x 8.6x 6.3x 16.4x 12.4x (1.0x)
Shaw Group Inc. $1,789.4 $31.85 (13.2%) (10.6%) 76.5% 6.4x 6.3x 5.6x 4.2x 67.0x 11.6x (1.6x)
MYR Group, Inc. $417.8 $22.53 1.2% 24.4% 84.9% 9.0x 10.4x 8.9x 5.9x 26.1x 15.7x (0.9x)
Pike Electric Corporation $387.6 $8.87 5.1% (9.7%) 84.6% 10.1x 12.9x 10.4x 6.7x NM 29.3x 2.7x
ENGlobal Corp. $99.3 $3.07 (20.3%) 38.9% 54.0% 35.1x NM NM 3.6x NM 6.1x (1.1x)
Median (5.8% ) 15.4% 81.3% 7.2x 8.7x 8.9x 6.4x 23.8x 13.5x (0.9x)
Industrial & Infrastructure Services
EMCOR Group Inc. $1,430.7 $28.34 (6.2%) 19.6% 86.5% 3.7x 5.7x 5.4x 4.5x NM 12.3x (1.8x)
Cape plc $1,114.0 $8.61 NA NA 96.5% NA NA 7.5x NA 13.2x NA 0.6x
Team Inc. $489.4 $23.30 1.2% 73.2% 81.2% 7.4x 10.0x 9.6x 7.3x 20.7x 15.0x 1.0x
Mistras Group, Inc. $451.1 $15.83 (5.7%) 40.8% 85.7% 8.8x 8.9x 10.1x 7.6x 28.1x 20.4x 0.6x
Furmanite Corporation $295.4 $7.98 16.3% 85.2% 92.8% 16.5x 13.2x 10.4x 7.9x 22.0x 14.0x 0.1x
Matrix Service Co. $259.6 $12.28 (6.2%) 22.8% 84.1% NA 10.2x 8.0x 4.7x 35.7x 12.3x NM
Median (5.7% ) 40.8% 86.1% 8.1x 10.0x 8.8x 7.3x 22.0x 14.0x 0.6x
Energy & Power Industry UpdateJuly 2011
page 12
Harris Williams & Co. is the premier middle market advisor
with a two-decade legacy of sell side excellence serving
clients worldwide.
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Energy & Power Industry UpdateJuly 2011
page 13
Harris Williams & Co.’s Energy & Power Group has a broad
range of experience including products, services, and
technologies that support or enhance the overall energy and
power infrastructure.
Key Niches:
• Cleantech, Energy Efficiency, and Renewables
• Power Products, Services, and Technologies
• Oil & Gas Products, Services, and Technologies
• Industrial & Infrastructure Services
• Engineering & Construction
For more information on Harris Williams & Co.’s Energy & Power Group as well as archived
copies of the Energy & Power Industry Update, please visit our website. Archived copies of the
Group’s industry whitepapers, including Transmission & Distribution Infrastructure and ESCOs
– Enabling Energy Efficiency, can also be found on the site.
Energy & Power Industry UpdateJuly 2011
page 14
Mr. Armstrong co-leads the Energy & Power Group and was Harris Williams & Co.’s second employee, joining the
firm in 1993. In 1999, Mr. Armstrong founded the San Francisco office and has over 19 years of transactional
experience focused in middle market mergers and acquisitions assignments. Having directed over 125 mergers and
acquisitions transactions during his career, Mr. Armstrong has worked across industries including energy and power,
consumer products, building products, business services, distribution, retailing, specialty chemicals, and technology.
As Co-Head of the Energy & Power Group, Mr. Armstrong specializes on the Power segment. Prior to joining Harris
Williams & Co., Mr. Armstrong was with Wheat First Butcher Singer (now Wells Fargo). He earned a B.S. with a
concentration in Finance from the University of Virginia's McIntire School of Commerce and is also a Chartered
Financial Analyst. Mr. Armstrong was past president and director of the San Francisco Chapter of ACG and is
currently a director of the Greater Richmond YMCA.
Mr. Spitzer founded and co-leads the Energy & Power Group at Harris Williams & Co. Over his investment banking
career, Mr. Spitzer has advised clients on a variety of merger and acquisition and strategic advisory assignments, as
well as corporate financings. Mr. Spitzer has advised a diverse range of manufacturing and service businesses in the
energy and power industries. Key niche focus areas have included demand response solutions, power quality
equipment, infrastructure and industrial services, and oilfield products and services. Prior to focusing on energy and
power companies, Mr. Spitzer developed experience in numerous industries including industrial manufacturing,
chemicals, automotive, aerospace and defense, business services, and consumer products. Prior to joining Harris
Williams & Co., Mr. Spitzer worked in the General Industrial Group at Banc of America Securities, LLC and in the
Investment Banking Group at Goldman Sachs & Co. Mr. Spitzer earned an M.B.A. with Honors from Columbia
Business School, where he served as the Caplan Fellow. Mr. Spitzer earned a B.A. in Economics from the University
of Virginia.
Mr. Lucas re-joined Harris Williams & Co. following the completion of an M.B.A. from The Wharton School at the
University of Pennsylvania. Prior to business school, Mr. Lucas served as an Associate with Harris Williams & Co.,
working on mergers and acquisitions transactions in a broad range of industries, including general industrial,
consumer products, plastics, and waste equipment/services. Before re-joining Harris Williams & Co., Mr. Lucas
worked as an Associate with Graham Partners, a private equity group in Philadelphia. Previous experience also
includes work as an Investment Banking Analyst with JP Morgan. Mr. Lucas earned a B.S. in Commerce, with a
concentration in Finance from The McIntire School of Commerce at the University of Virginia.
Prior to joining Harris Williams & Co., Mr. White worked as an Associate in the Equity Capital Markets Group at
SunTrust Robinson Humphrey. Previous experience also includes work in the Capital Finance Group at Wachovia
Securities (now Wells Fargo) where he focused on acquisition financing, growth capital, and workout situations. Mr.
White earned an M.B.A. from the Goizueta Business School at Emory University and a B.S. in Business
Administration from the University of North Carolina at Chapel Hill.
Tiff B. Armstrong
Managing [email protected]
+1 (804) 648-0072
Andrew G. Spitzer
Managing [email protected]
+1 (804) 915-0174
Brian S. Lucas
+1 (804) 932-1323
Matthew G. White
Vice [email protected]
+1 (804) 915-0131
Prior to joining Harris Williams & Co., Mr. Semple worked as a Global Banking Associate at Deutsche Bank. Within
energy and power, Mr. Semple has advised a diverse range of businesses, including providers of energy efficiency
and clean technology products and services, oilfield products and services, transmission distribution products and
services, and power generation equipment. He earned an M.B.A. from the Darden School of Business at the
University of Virginia and a B.A. from Trinity College in Hartford, Connecticut.
Luke R. Semple
Vice [email protected]
+1 (804) 648-1158
Energy & Power Industry UpdateJuly 2011
Sources:
1. Capital IQ.2. MergerMarket.3 B k H h
1001 Haxall Point9th FloorRichmond, VA 23219Phone: +1 (804) 648-0072Fax: +1 (804) 648-0073
h i illi
July 2011
3. Baker Hughes.
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© 2011. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, an Appointed Representative of Sturgeon Ventures LLP, which is authorised and regulated by the FSA. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business in the U.S. and Europe, respectively.