energy & power industry update · quarterly united states e&p m&a activity1 select...

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Member FINRA/SIPC

Energy & Power Industry Update April 2012


What We’ve Been Reading

page 1

• For all of the talk of ―green‖ jobs to be created in the transition to a ―clean‖ economy, Energy for

Economic Growth, a report by the World Economic Forum released last month, prepared in

partnership with IHS CERA, suggests the U.S. oil and gas industry was responsible for 9% of new

U.S. jobs created in 2011, including 37,000 direct jobs and more than 100,000 indirect jobs.

Additionally, the report notes that as a result of high-pay in the industry, these workers contribute a

larger share of GDP per hour worked than most other industries.

• The Economist offered a brief history of nuclear power in March, which featured the best opening-

sentence of the month – ―The nuclear age began 70 years ago on a squash court in Chicago, under

the watchful eye of a man with an axe.‖ The article highlights the surprising lack of diversity in

nuclear technologies at this stage in the industry‘s history. Comparing the industry to aircraft,

―Seven decades after the Wright brothers‘ first flight there were warplanes that could travel at three

times the speed of sound, rockets that could send men to the moon, airliner fleets that carried

hundreds of thousands of passengers a day, helicopters that could land on top of skyscrapers.

Include unmanned spacecraft, and there really were flights a billion times as long as the Wright

brothers‘ first and lasting for years. But aircraft were capable of diversity and evolution and could

be developed cheaply by small teams of engineers…Developing a nuclear reactor, on the other

hand, has never been a matter for barnstorming experimentation, partly because of the risks and

partly because of the links to the technologies of the bomb.‖

• In BusinessWeek, Charlie Rose spoke with Daniel Yergin on a wide-ranging set of topics, which

included gasoline prices, U.S. oil and gas development, fracking, the environment, and the Keystone

XL pipeline. On the last point, Yergin notes, ―It‘s not only U.S. oil production that‘s gone up, it‘s

also Canadian oil sands production, which has almost tripled since the beginning of this century.

Canada‘s now our most important source of oil by far. And the Canadian oil sands—to get the

volumes in perspective—they‘re greater now than Libya‘s output before the civil war. The oil that

would flow through Keystone is equivalent to about a third of Iran‘s total exports. There are a lot of

arguments about Keystone, but the argument that people haven‘t paid as much attention to is what it

would mean for our energy security. Keystone would signal that, within two years or so, there

would be major new oil that would help shrink the number of Iranian barrels on a tight world oil

market.‖

• Rhodium Group takes an interesting look at the future of energy in the U.S. with ―American Energy

Independence: Let the Betting Begin.‖ They write, ―With US oil demand falling thanks to high

prices and fuel efficient vehicles, and domestic crude and natural gas supply rising thanks to

unconventional production, energy analysts have begun speculating that policymakers‘ long-elusive

goal of ‗energy independence‘ might be within reach. In this note, we provide a roundup of recent

government and industry projections and will explore what these various American energy futures

mean for the US economy and national security in the weeks and months ahead.‖

http://reports.weforum.org/energy-for-economic-growth-energy-vision-update-2012/







http://www.economist.com/node/21549101









http://www.businessweek.com/articles/2012-03-29/charlie-rose-talks-to-daniel-yergin











http://rhgroup.net/notes/american-energy-independence-let-the-betting-begin















LTM EBITDA Multiples1

Industry Observations

LTM Indexed Stock Performance1

Indexed LTM EBITDA Multiples1

• Energy and power equities have surged in the last five months concurrent with the broader

S&P recovery.

• The North American rig count decreased by over 200 rigs last month, the largest monthly

decline in a year, amid weak natural gas pricing.

• Natural gas prices continue to spiral to $2.13, down over 50% from April 2011 levels.

• Meanwhile, gasoline and oil prices have continued their steady appreciation since October.

60

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Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12

S&P 500 Energy Power Industrial & Infrastructure Services

0

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Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

Energy Power Industrial & Infrastructure Services

page 2

Index

%

Change

S&P 5.67

Energy (11.60)

Power (10.01)

I & IS (15.18)

Index

%

Change

Energy 48.90

Power 15.25

I & IS 58.33


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%

Storage and

Transportation

Mid-Cap Power

Electric Utilities

Engineering and

Construction

Industrial & Infrastructure

Services

Independent Power

Producers

Integrateds Diversified Power

Exploration and

Production

Refining Energy Services and

Equipment

Coal Producers

Cleantech Renewables

page 3

0.0%

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60.0%

80.0%

100.0%

120.0%

140.0%

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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 4/2/11 10/31/11 Current EBITDA Current 2009

Energy

Integrateds (3.8%) (6.7%) 5.6x 4.0x 4.0x 3.6x 11.0x 8.2x

Energy Services and Equipment (7.3%) (25.3%) 10.3x 7.9x 8.6x 5.1x 19.0x 8.5x

Exploration and Production (3.7%) (28.5%) 10.0x 6.7x 6.4x 4.6x 27.8x 11.4x

Coal Producers (11.8%) (65.0%) 9.5x 7.1x 6.5x 5.1x 10.9x 8.3x

Refining (2.3%) (8.5%) 7.6x 4.0x 4.0x 3.8x NM 7.2x

Storage & Transportation (1.6%) 16.1% 13.9x 13.9x 15.0x 10.1x 19.8x 17.8x

Power

Diversified Power 0.9% (14.1%) 10.2x 7.9x 8.6x 7.3x 15.5x 11.7x

Mid-Cap Power 3.8% 8.7% 10.1x 7.7x 10.1x 7.5x 18.0x 15.1x

Independent Power Producers (14.4%) (27.6%) 12.9x 18.9x 6.8x 5.8x 22.4x 155.3x

Electric Utilities 0.8% 13.7% 8.3x 9.0x 9.2x 8.0x 14.9x 14.2x

Renewables 1.0% (34.6%) 2.1x 1.3x 0.9x 0.8x 3.4x 0.0x

Cleantech 1.0% (28.4%) 1.4x 0.9x 0.9x 0.8x 17.4x 13.4x

Industrial & Infrastructure Services

Engineering & Construction (4.8%) (13.3%) 10.3x 7.7x 8.2x 5.7x 18.8x 12.0x

Industrial & Infrastructure Services 3.4% 0.1% 10.7x 8.3x 7.5x 5.5x 16.7x 12.1x

2011 Revenue

TEV /

TEV / LTM EBITDA Multiple as of

LTM Revenue


Gasoline and Ethanol1

Oil1 Natural Gas1

North American Rig Counts3

Electricity Prices1 Coal1

0.00

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($ p

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MB

tu)

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Ap

r-1

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-11

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r-1

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Ap

r-1

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($ p

er g

all

on

)

Gasoline Ethanol

0

500

1,000

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3,000

Jan

-11

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-11

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(# r

igs)

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160.0

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Ap

r-1

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-11

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-12

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r-1

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Ap

r-1

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er t

on

-R

ott

erd

am

)

($ p

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on

-C

en

tra

l

Ap

pa

lach

ian

)

Central Appalachian Rotterdam

0.00

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-11

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Sep

-11

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v-1

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Dec-1

1

Jan

-12

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Ma

r-1

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Ap

r-1

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($ p

er M

Wg

)

$103.54 per bbl

$33.85 per MWg

page 4

$2.13 per MMBtu

$2.31 per gallon

$3.31 per gallon

CAPP:

$59.70 per ton

Rotterdam:

$103.10 per ton

2,471 rigs


Quarterly United States E&P M&A Activity1

Select Recently Announced Energy & Power Transactions1,2

page 5

-

10

20

30

40

50

60

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Nu

mb

er o

f T

ran

sact

ion

s

Date Target Business Description Acquirer

3/26/2012 Comverge, Inc. US based provider of energy management solutions for

commercial and residential consumers

H.I.G. Capital

3/20/2012 Expro International Group Ltd.

(manufacturing arm)

UK based provider of engineering and manufacturing

services for subsea components

Siemens AG

3/19/2012 Randolph Construction Services,

Inc.

US based provider of construction contracting services

for the nuclear energy industry

LVI Services Inc.

3/13/2012 Gall Thomson Environmental Ltd. UK based provider of anti-pollution and safety marine

breakaway couplings

Phoenix Equity Partners

3/13/2012 Transcend Equity Development

Corp.

US based provider of energy efficiency and

sustainability services for commercial properties

SCIenergy, Inc.

3/9/2012 Optima Solutions UK Ltd. UK provider of pumping services and technologies for

the international oil and gas market

TETRA Technologies, Inc.

3/6/2012 C&V Portable Accomodations, Ltd. Canada based provider of oil and gas well site portable

accomodations

Signal Hill Equity Partners

2/27/2012 Zenith Oilfield Technology Ltd. Scotland based provider of technology and products

used to monitor and analyze down-hole data

Lufkin Industries, Inc.

2/20/2012 Flint Energy Services Ltd. Canada based provider of integrated products and

services for the oil and gas industry

URS Corporation

2/13/2012 MAAG Pump Systems Zurich based provider of gear pumps, filtration systems,

and pelletizers for the petrochemical industry

Dover Corp.

2/13/2012 Directional Rentals, Inc. US based provider of tool rental services primarily to

directional drilling companies

Hicks Equity Partners LLC

2/13/2012 AmerCable Holdings Inc. US based provider of industrial cables for the mining,

oil and gas, and marine industries

Nexans SA

2/8/2012 National Response Corporation US based provider of oil spill emergency response,

environmental, and industrial services

J.F. Lehman & Company

2/7/2012 Warren and Christian US based provider of drilling, completion, and

production services to the oil and gas industry

Reservoir Group Ltd.

Member FINRA/SIPC


page 6

Stock Performance Net Debt /

Current Price Change from Change from % of TEV / 2011 P/E Ratio EBITDA

TEV 4/2/12 Prior Month Prior Year LTM High 4/2/11 10/31/11 Current EBITDA Current 2011 10/31/2011


Energy

Integrateds

Exxon Mobil Corporation $419,494.7 $86.73 0.5% 2.4% 98.4% 7.1x 5.6x 6.0x 4.6x 10.3x 9.7x 0.1x

Chevron Corporation $202,830.6 $107.21 (2.2%) (1.0%) 95.5% 5.1x 4.1x 4.0x 3.4x 8.0x 8.0x (0.2x)

ConocoPhillips $118,355.4 $76.01 (2.1%) (4.6%) 93.0% 4.9x 3.8x 3.8x 3.8x 8.5x 8.4x 0.7x

Occidental Petroleum Corporation $79,315.9 $95.23 (8.7%) (8.7%) 80.8% 7.7x 5.9x 5.6x 4.5x 11.7x 9.8x 0.2x

Marathon Oil Corporation $26,507.5 $31.70 (5.4%) (40.8%) 58.3% 5.9x 2.3x 4.1x 2.8x 13.3x 7.2x 0.5x

Hess Corporation $25,679.3 $58.95 (9.9%) (32.0%) 67.8% 5.4x 4.0x 3.9x 3.0x 11.8x 7.4x 0.9x

Median (3.8% ) (6.7% ) 86.9% 5.6x 4.0x 4.0x 3.6x 11.0x 8.2x 0.3x

Energy Services and EquipmentLarge Cap Diversified

Schlumberger Limited $98,566.9 $69.93 (9.4%) (25.4%) 73.2% 16.6x 11.0x 9.9x 7.0x 19.9x 12.2x 0.5x

Halliburton Company $32,530.3 $33.19 (7.9%) (32.7%) 57.5% 10.3x 6.5x 5.3x 3.9x 10.2x 7.4x 0.4x

National Oilwell Varco, Inc. $30,797.1 $79.47 (3.4%) (1.5%) 90.6% 10.8x 8.3x 8.8x 6.2x 16.9x 11.4x (0.9x)

Baker Hughes Incorporated $21,589.1 $41.94 (14.5%) (42.1%) 51.8% 10.7x 7.1x 5.1x 3.9x 10.6x 8.0x 0.8x

Weatherford International Ltd. $18,713.6 $15.09 (12.3%) (34.5%) 64.7% 12.1x 8.2x 7.6x 4.7x 44.4x 8.0x 3.1x

Median (9.4% ) (32.7% ) 64.7% 10.8x 8.2x 7.6x 4.7x 16.9x 8.0x 0.5x

Mid and Small Cap Equipment and Service ProvidersMid and Small Cap Equipment and Service Providers

Cameron International Corporation $13,276.1 $52.83 (4.7%) (6.7%) 90.3% 12.8x 11.1x 11.9x 7.7x 25.3x 12.0x 0.2x

Oil States International Inc. $5,114.1 $78.06 (6.1%) 3.0% 89.1% 10.6x 7.5x 7.3x 5.3x 13.3x 9.6x 1.8x

Key Energy Services Inc. $3,108.8 $15.45 (11.2%) 1.8% 74.4% 15.3x 7.7x 7.5x 4.0x 22.4x 7.5x 2.2x

Exterran Holdings, Inc. $2,838.9 $13.19 (8.1%) (45.0%) 54.3% 8.6x 7.0x 7.5x 5.5x NM NM 4.9x

RPC Inc. $2,524.8 $10.61 2.6% (33.5%) 54.8% 8.0x 4.7x 3.8x 3.6x 7.9x 8.0x 0.3x

Dril-Quip, Inc. $2,318.0 $65.02 (4.9%) (17.6%) 80.9% 17.6x 15.6x 14.7x 9.3x 27.6x 16.7x (2.0x)

Basic Energy Services, Inc. $1,407.7 $17.35 (7.3%) (29.9%) 45.9% 8.9x 5.2x 4.2x 3.0x 15.2x 6.0x 2.5x

Median (6.1% ) (17.6% ) 74.4% 10.6x 7.5x 7.5x 5.3x 18.8x 8.8x 1.8x

Member FINRA/SIPC






page 7

Construction and Equipment ContractorsConstruction and Equipment Contractors

Transocean Ltd. $28,788.2 $54.70 0.9% (30.6%) 65.9% 9.4x 9.1x 15.4x 6.4x NM 11.0x 3.3x

Noble Corp. $13,967.5 $37.47 (7.0%) (17.3%) 80.7% 13.5x 13.9x 13.7x 6.0x 25.7x 8.7x 4.0x

Technip $11,881.4 $117.44 6.1% 8.7% 98.8% 9.1x 7.9x 10.4x NA 20.1x NA (0.9x)

Diamond Offshore Drilling, Inc. $9,538.2 $66.75 (3.1%) (14.5%) 82.2% 6.7x 5.4x 5.8x 6.5x 9.6x 13.0x 0.1x

Nabors Industries Ltd. $9,215.9 $17.49 (18.8%) (42.4%) 53.9% 9.4x 6.1x 5.0x 3.6x 14.9x 6.4x 2.7x

Subsea 7 SA $9,110.7 $26.43 9.6% 1.7% 99.5% 18.5x 16.2x 10.6x NA 22.6x NA 0.2x

Oceaneering International, Inc. $5,850.3 $53.89 (0.2%) 18.3% 94.3% 10.4x 9.2x 12.0x 8.5x 24.9x 16.9x 0.0x

Helmerich & Payne Inc. $5,804.4 $53.95 (11.2%) (21.7%) 73.5% 8.8x 5.7x 5.4x 4.0x 12.4x 9.4x 0.0x

Rowan Companies Inc. $4,764.4 $32.93 (8.4%) (25.5%) 73.6% 13.1x 12.8x 13.1x 5.8x 30.8x 8.5x 1.8x

Patterson-UTI Energy Inc. $3,151.5 $17.29 (10.7%) (40.3%) 50.7% 7.5x 4.0x 3.3x 2.6x 8.4x 7.1x 0.5x

Hercules Offshore, Inc. $1,460.6 $4.73 (6.3%) (30.2%) 67.9% 9.1x 7.5x 10.6x 5.4x NM 104.4x 4.3x

Pioneer Drilling Co. $874.6 $8.80 (11.7%) (36.0%) 48.9% 7.5x 4.6x 4.6x 2.7x 46.3x 8.7x 1.9x

Cal Dive International Inc $452.1 $3.30 3.4% (52.4%) 40.3% 11.9x 13.1x 23.6x 2.9x NM 7.0x 4.5x

Median (6.3% ) (25.5% ) 73.5% 9.4x 7.9x 10.6x 5.4x 21.3x 8.7x 1.8x

Exploration and ProductionLarge Cap

Anadarko Petroleum Corporation $54,218.2 $78.34 (5.1%) (5.5%) 88.3% 9.5x 7.5x 6.7x 5.1x NM 15.8x 2.0x

Apache Corp. $46,749.3 $100.44 (5.6%) (22.7%) 74.9% 6.0x 3.9x 3.7x 3.2x 8.8x 7.2x 0.6x

EOG Resources, Inc. $34,321.9 $111.10 (2.5%) (6.2%) 92.6% 15.1x 7.4x 7.0x 4.7x 27.1x 16.1x 1.2x

Devon Energy Corporation $31,431.6 $71.12 (2.6%) (22.7%) 76.8% 8.5x 4.3x 4.6x 4.1x 13.9x 9.3x 0.4x

Chesapeake Energy Corporation $29,738.0 $23.17 (4.8%) (30.8%) 64.8% 12.9x 7.5x 6.7x 4.5x 10.0x 7.7x 2.5x

Noble Energy, Inc. $20,315.3 $97.78 3.5% 2.2% 92.7% 11.2x 8.2x 8.9x 4.9x 38.5x 11.3x 1.4x

Pioneer Natural Resources Co. $15,908.3 $111.59 2.9% 7.5% 93.6% 16.4x 8.0x 8.8x 5.7x 33.5x 14.6x 1.3x

Southwestern Energy Co. $11,975.1 $30.60 (8.3%) (28.6%) 62.1% 10.1x 9.1x 6.7x 6.0x 16.8x 16.1x 0.8x

Murphy Oil Corporation $10,478.2 $56.27 (9.5%) (23.7%) 72.0% 4.8x 3.6x 3.3x 2.8x 14.8x 8.1x (0.1x)

Newfield Exploration Co. $7,524.6 $34.68 (2.2%) (54.3%) 45.2% 10.3x 5.2x 4.4x 4.2x 8.7x 8.5x 1.8x

Ultra Petroleum Corp. $5,342.8 $22.63 (6.5%) (54.9%) 44.2% 10.8x 7.0x 4.8x 6.4x 7.7x 14.3x 2.0x

Quicksilver Resources Inc. $2,742.3 $5.04 (4.9%) (64.2%) 32.7% 7.7x 6.5x 6.0x 6.8x 9.2x NM 3.8x

Median (4.8% ) (23.2% ) 73.4% 10.2x 7.2x 6.3x 4.8x 13.9x 11.3x 1.3x

Member FINRA/SIPC






page 8

Mid and Small Cap

Plains Exploration & Production Company $8,628.5 $42.65 (4.8%) 15.0% 90.5% 9.7x 6.6x 6.4x 4.4x 29.6x 10.7x 2.2x

Cabot Oil & Gas Corporation $7,447.9 $31.17 (9.5%) 15.4% 69.3% 12.8x 16.9x 12.7x 6.3x 53.7x 24.3x 1.7x

SandRidge Energy, Inc. $6,660.4 $7.83 (2.6%) (39.6%) 59.2% NM 6.2x 8.2x 4.6x 60.2x 20.2x 2.6x

Forest Oil Corp. $3,038.0 $12.12 (3.0%) (68.1%) 31.6% 10.1x 4.6x 5.3x 4.7x 15.2x 9.9x 2.7x

Swift Energy Co. $1,711.3 $29.03 (1.2%) (31.3%) 66.3% 7.3x 4.8x 4.3x 3.1x 14.9x 11.5x 1.3x

PetroQuest Energy Inc. $521.1 $6.14 4.1% (33.8%) 64.0% 6.1x 5.4x 5.3x 4.1x 72.8x 15.3x 1.2x

Delta Petroleum Corp. $391.7 $0.55 120.4% (93.9%) 5.8% NM 13.9x 12.7x NA NM 0.0x 12.3x

Median (2.6% ) (33.8% ) 64.0% 9.7x 6.2x 6.4x 4.5x 41.7x 11.5x 2.2x

Coal Producers

Peabody Energy Corp. $13,773.6 $28.96 (11.9%) (60.2%) 39.2% 11.8x 6.9x 6.5x 5.1x 7.7x 6.6x 3.1x

CONSOL Energy Inc. $10,581.5 $34.10 0.5% (35.8%) 61.6% 11.3x 7.6x 6.4x 5.9x 12.4x 11.6x 1.7x

Alpha Natural Resources, Inc. $5,624.8 $15.21 (12.6%) (74.8%) 24.7% 9.2x 6.6x 4.4x 4.4x NM 41.6x 2.0x

Arch Coal Inc. $6,187.9 $10.71 (16.9%) (69.9%) 29.6% 9.8x 9.0x 6.7x 5.5x 14.5x 8.3x 4.6x

Alliance Resource Partners LP $2,370.7 $60.10 (16.2%) (26.4%) 71.7% 5.9x 5.1x 4.1x 3.6x 10.4x 7.9x 0.8x

Patriot Coal Corporation $827.8 $6.24 (9.4%) (76.8%) 22.6% 41.3x 18.0x 11.8x 5.0x NM NM 3.3x

James River Coal Co. $560.2 $5.12 (11.6%) (79.6%) 20.1% 6.4x 5.6x 3.8x 6.5x NM NM 2.9x

Farmacol SA $176.6 $8.77 3.5% (22.1%) 76.7% 8.7x 7.4x 7.2x NA 10.9x NA (0.9x)

Median (11.8% ) (65.0% ) 34.4% 9.5x 7.1x 6.5x 5.1x 10.9x 8.3x 2.4x

Refining

Valero Energy Corporation $20,977.6 $25.77 (1.0%) (14.2%) 82.8% 6.1x 3.2x 4.0x 3.6x 7.0x 5.8x 1.2x

Sunoco, Inc. $6,464.5 $38.15 (2.3%) (17.3%) 81.2% 7.1x 6.2x 8.7x 10.3x NM 24.8x 1.6x

Tesoro Corporation $4,842.1 $26.84 (2.8%) (0.7%) 89.0% 6.3x 3.3x 3.5x 3.2x 7.0x 6.6x 0.5x

CVR Energy, Inc. $2,948.0 $26.75 (1.6%) 12.9% 88.8% 8.8x 3.5x 4.0x 3.8x 6.8x 7.2x 0.8x

Western Refining, Inc. $2,345.6 $18.82 (1.2%) 4.7% 86.5% 7.6x 4.0x 2.4x 3.7x 14.0x 6.7x 1.1x

Hochschild Mining PLC $2,234.1 $7.45 (8.4%) (25.6%) 71.5% 7.5x 4.3x 4.3x NA 14.5x NA (0.9x)

Alon USA Energy, Inc. $1,444.9 $9.05 (10.8%) (34.2%) 58.1% 17.1x 5.3x 4.9x 4.6x 13.1x 7.6x 3.4x

Delek US Holdings Inc. $1,113.1 $15.51 16.2% 14.5% 88.6% 9.4x 3.3x 3.0x 4.0x 5.6x 8.6x 0.6x

Fortune Oil plc $362.4 $0.17 (5.0%) (8.5%) 70.2% 12.7x 11.1x 11.7x NA 10.1x NA (1.0x)

Median (2.3% ) (8.5% ) 82.8% 7.6x 4.0x 4.0x 3.8x NM 7.2x 0.8x

Member FINRA/SIPC






page 9

Storage & Transportation

Kinder Morgan Energy Partners LP $41,698.5 $82.75 (7.0%) 11.5% 91.3% 13.2x 14.8x 15.4x 9.4x NM 30.8x 5.1x

El Paso Corp. $38,392.0 $29.55 4.2% 62.7% 97.5% 12.4x 13.0x 12.8x 11.6x 164.2x 27.9x 4.5x

Plains All American Pipeline, L.P. $18,665.6 $78.45 (5.6%) 22.6% 92.9% 14.5x 11.5x 12.2x 9.9x 16.1x 16.2x 3.8x

Enbridge Energy Partners LP $14,625.5 $30.97 (4.6%) (5.4%) 89.6% 29.9x 16.3x 15.4x 10.0x 15.6x 18.9x 5.8x

Magellan Midstream Partners LP $10,123.8 $72.34 0.2% 20.7% 98.1% 15.9x 15.0x 15.9x 13.9x 19.8x 17.5x 3.2x

Buckeye Partners LP $8,724.7 $61.18 1.9% (4.4%) 89.4% 18.8x 19.5x 18.5x 13.1x 51.0x 16.8x 6.1x

Sunoco Logistics Partners L.P. $5,739.9 $37.81 (3.4%) 29.9% 89.8% 11.6x 10.4x 10.4x 9.7x 14.9x 15.0x 3.6x

Holly Energy Partners L.P $2,126.6 $61.04 0.3% 5.0% 95.7% 12.9x 12.2x 14.7x 10.3x 22.8x 18.1x 4.5x

Median (1.6% ) 16.1% 92.1% 13.9x 13.9x 15.0x 10.1x 19.8x 17.8x 4.5x

Power

Diversified Power

General Electric Company $583,003.8 $20.07 5.8% (1.3%) 95.6% 21.9x 16.0x 20.6x 17.0x 16.3x 11.4x 11.6x

Siemens AG $95,729.7 $100.64 1.9% (28.3%) 76.3% 8.3x 7.0x 7.7x 6.4x 10.5x 10.3x 0.5x

ABB Ltd. $45,721.5 $20.51 (0.2%) (16.6%) 77.3% 10.2x 8.0x 8.0x 6.8x 14.4x 12.1x (0.3x)

Schneider Electric S.A. $42,388.7 $65.09 (5.8%) (25.5%) 79.0% 10.2x 7.8x 8.8x NA 14.6x NA 1.4x

Emerson Electric Co. $42,008.9 $52.18 3.9% (11.6%) 85.1% 10.3x 7.7x 8.5x 7.7x 16.7x 13.1x 0.7x

Eaton Corporation $19,448.5 $49.83 (2.8%) (10.9%) 88.3% 11.5x 8.5x 8.9x 6.9x 12.7x 9.7x 1.3x

Alstom SA $15,829.5 $39.14 (8.6%) (36.1%) 64.8% 6.9x 5.3x 6.1x NA 20.4x NA 1.7x

Cooper Industries plc $10,887.5 $63.95 6.5% (8.3%) 92.0% 13.9x 11.1x 12.2x 9.6x 16.5x 13.3x 0.9x

Median 0.9% (14.1% ) 82.1% 10.2x 7.9x 8.6x 7.3x 15.5x 11.7x 1.1x

Mid-Cap Power

Ametek Inc. $8,885.8 $48.51 2.1% 8.7% 97.6% 13.5x 10.6x 12.3x 10.2x 20.5x 16.0x 1.6x

Thomas & Betts Corp. $3,783.5 $71.91 (0.4%) 19.2% 99.3% 10.1x 7.6x 10.1x 8.1x 20.0x 15.1x 0.1x

Valmont Industries, Inc. $3,288.6 $117.41 5.5% 9.8% 98.7% 11.2x 7.7x 9.6x 7.4x 13.7x 14.0x 0.4x

Littelfuse Inc. $1,262.0 $62.70 18.4% 7.9% 94.5% 8.0x 6.5x 8.3x 7.5x 16.1x 14.3x (0.6x)

Powell Industries, Inc. $303.0 $34.25 3.8% (12.9%) 82.3% 7.6x 9.3x 12.7x 5.7x NM 16.6x (3.5x)

Median 3.8% 8.7% 97.6% 10.1x 7.7x 10.1x 7.5x 18.0x 15.1x 0.1x

Independent Power Producers

NRG Energy, Inc. $12,834.8 $15.67 (9.4%) (27.6%) 61.1% 5.8x 7.0x 6.8x 7.6x 20.1x 155.3x 4.4x

GenOn Energy, Inc. $3,640.1 $2.08 (19.4%) NA 50.2% NA NA 4.8x 5.8x NM NA 5.5x

Dynegy Inc. $1,510.8 $0.56 (59.1%) (90.2%) 8.1% 20.0x 30.7x 11.3x 3.9x NM NM 8.8x

Mirrabooka Investments Limited $244.8 $1.91 0.8% (4.3%) 93.9% NM NM NM NA 24.7x NA NM

Median (14.4% ) (27.6% ) 55.7% 12.9x 18.9x 6.8x 5.8x 22.4x 155.3x 5.5x

Member FINRA/SIPC


page 10

Electric Utilities

Southern Company $59,743.4 $44.93 1.5% 17.3% 96.2% 9.4x 9.6x 9.5x 9.0x 17.6x 16.0x 3.3x

Dominion Resources, Inc. $50,120.6 $51.21 1.4% 14.6% 95.4% 8.8x 9.7x 10.8x 9.4x 20.9x 14.9x 4.1x

NextEra Energy, Inc. $48,308.0 $61.08 2.1% 9.2% 99.8% 9.3x 9.5x 9.2x 8.4x 13.3x 12.3x 4.8x

Duke Energy Corporation $47,063.6 $21.01 (0.1%) 14.1% 95.0% 8.3x 9.0x 9.2x 8.3x 16.4x 14.2x 3.8x

Exelon Corporation $45,862.4 $39.21 0.8% (4.7%) 86.3% 5.8x 6.4x 6.8x 8.0x 10.5x 13.4x 1.9x

American Electric Power Co., Inc. $37,419.7 $38.58 1.6% 8.6% 91.9% 7.3x 7.5x 7.9x 7.6x 11.9x 12.0x 3.9x

FirstEnergy Corp. $36,220.5 $45.59 2.5% 22.4% 97.9% 9.7x 10.3x 10.3x 8.0x 20.6x 14.2x 4.7x

PPL Corporation $33,990.2 $28.26 (0.7%) 10.0% 93.4% 8.2x 8.9x 7.8x 7.9x 10.5x 11.6x 4.5x

Progress Energy Inc. $29,290.2 $53.11 (0.3%) 13.7% 94.2% 8.7x 9.9x 11.8x 9.2x 27.1x 16.1x 4.8x

Edison International $27,809.2 $42.51 (0.7%) 14.7% 95.5% 6.4x 6.9x 7.1x 6.9x NM 16.5x 3.3x

Entergy Corporation $23,888.4 $67.20 0.1% (0.7%) 90.8% 6.1x 6.8x 6.7x 7.4x 8.9x 12.4x 3.3x

Median 0.8% 13.7% 95.0% 8.3x 9.0x 9.2x 8.0x 14.9x 14.2x 3.9x

Renewables 4/2/11 10/31/11 Current

Vestas Wind Systems A/S $2,776.8 $9.94 (2.8%) (76.6%) 24.6% 0.9x 0.5x 0.4x NA NM NA 1.1x

Suntech Power Holdings Co. Ltd. $2,369.8 $3.06 (0.6%) (67.3%) 31.4% 0.9x 0.7x 0.8x 0.9x NM NM 5.6x

First Solar, Inc. $2,158.8 $25.05 (16.6%) (84.4%) 15.5% 5.1x 1.5x 0.8x 0.5x NM 6.0x (0.0x)

Clean Energy Fuels Corp. $1,847.0 $21.28 13.9% 30.4% 86.0% 4.9x 3.2x 6.3x 4.0x NM NM 1.4x

SunPower Corporation $1,071.7 $6.38 (12.2%) NA 66.9% NA NA 0.5x 0.3x NM NM 1.5x

GT Advanced Technologies Inc. $805.0 $8.27 3.2% (20.6%) 47.3% 1.4x 0.6x 0.9x 0.8x 6.8x 5.4x (0.6x)

Rentech, Inc. $548.7 $2.08 14.9% 66.4% 94.5% 2.2x 2.5x 2.7x 0.0x NM 0.0x 2.2x

FuelCell Energy Inc. $291.6 $1.57 14.2% (27.2%) 71.8% 3.4x 1.4x 2.3x 1.6x NM NM 0.5x

Ballard Power Systems Inc. $90.8 $1.42 2.6% (40.3%) 58.9% 2.0x 1.2x 1.2x 0.8x NM 0.0x 0.9x

Lyxor ETF - New Energy $0.0 $18.86 (2.4%) (34.6%) 68.3% NM NM NM 0.0x 0.0x 0.0x NM

Median 1.0% (34.6% ) 62.9% 2.1x 1.3x 0.9x 0.8x 3.4x 0.0x 1.1x

Cleantech

Itron, Inc. $2,133.6 $45.41 2.1% (18.9%) 80.7% 1.2x 0.8x 0.9x 0.9x NM 11.1x 1.0x

ESCO Technologies Inc. $1,082.2 $36.77 5.1% (3.6%) 95.1% 1.6x 1.3x 1.6x 1.3x 21.1x 13.8x 1.1x

Ameresco, Inc. $793.6 $13.55 0.0% NA 79.3% 1.1x 1.0x 1.1x 0.9x 17.4x 13.1x 3.1x

Echelon Corporation $151.8 $4.43 (10.9%) (56.4%) 41.3% 3.2x 1.6x 1.0x 0.8x NM NM 6.6x

EnerNOC, Inc. $101.1 $7.20 (9.4%) (62.2%) 32.2% 1.1x 0.4x 0.4x 0.3x NM NM (5.1x)

PowerSecure International, Inc. $94.6 $6.06 6.1% (28.4%) 68.4% 1.6x 0.5x 0.7x 0.6x 5.8x 15.2x 22.5x

Median 1.0% (28.4% ) 73.8% 1.4x 0.9x 0.9x 0.8x 17.4x 13.4x 2.1x

Revenue

TEV / LTM Revenue Multiple as of TEV / 2011





Member FINRA/SIPC






page 11


Engineering & Construction

Fluor Corporation $8,514.1 $60.04 (2.7%) (17.7%) 80.6% 14.3x 7.9x 7.2x 6.0x 17.7x 13.8x (1.8x)

Jacobs Engineering Group Inc. $5,291.3 $44.37 (6.0%) (13.9%) 84.5% 10.3x 7.5x 7.9x 6.8x 16.0x 13.0x (0.7x)

Dresser-Rand Group Inc. $4,407.7 $46.39 (10.2%) (12.8%) 82.1% 15.8x 16.1x 12.1x 7.2x 30.3x 11.9x 3.1x

KBR, Inc. $4,341.4 $35.55 (3.8%) (7.3%) 90.4% 9.1x 6.7x 8.7x 5.4x 11.3x 11.3x (1.7x)

Quanta Services, Inc. $4,108.9 $20.90 (0.4%) (8.3%) 90.9% 12.6x 12.1x 11.3x 6.6x 33.7x 15.3x (0.9x)

URS Corporation $3,854.5 $42.52 (1.6%) (7.3%) 90.2% 6.2x 5.4x 6.2x 4.7x NM 9.7x 0.6x

Chicago Bridge & Iron Company N.V. $3,634.6 $43.19 (5.8%) 7.7% 90.5% 9.9x 8.0x 8.5x 5.9x 16.9x 12.4x (1.6x)

McDermott International Inc. $2,498.5 $12.81 (12.6%) (49.8%) 49.4% 12.3x 6.4x 7.5x 4.9x 20.0x 10.4x (1.7x)

Shaw Group Inc. $2,135.9 $31.71 6.7% (10.7%) 79.5% 8.3x 22.7x 25.1x 6.2x NM 12.2x 0.2x

Pike Electric Corporation $400.5 $8.23 (7.5%) (16.9%) 78.5% 11.2x 6.3x 6.3x 5.4x NM 16.3x 2.0x

MYR Group, Inc. $340.8 $17.86 (9.1%) (29.4%) 67.3% 10.1x 7.5x 7.1x 4.2x 20.5x 11.1x (0.5x)

ENGlobal Corp. $85.4 $2.40 4.3% (45.6%) 53.5% NM 40.4x 42.1x 5.3x NM 9.2x 10.6x

Median (4.8% ) (13.3% ) 81.3% 10.3x 7.7x 8.2x 5.7x 18.8x 12.0x (0.6x)


EMCOR Group Inc. $1,482.3 $27.72 0.3% (10.3%) 86.8% 5.7x 4.9x 5.5x 4.5x 15.6x 11.8x (1.3x)

Cape plc $887.1 $6.53 NA NA 68.1% NA NA 6.1x NA 10.6x NA 0.6x

Mistras Group, Inc. $718.4 $23.82 6.7% 39.3% 90.8% 10.9x 12.3x 13.0x 9.0x 32.6x 22.9x 1.0x

Team Inc. $669.2 $30.95 3.4% 19.5% 92.4% 11.1x 8.7x 10.0x 7.8x 20.0x 16.0x 0.9x

Matrix Service Co. $322.9 $14.01 8.2% 0.1% 93.0% NA 5.1x 6.9x 5.2x 17.7x 12.1x NM

Furmanite Corporation $239.5 $6.42 (8.2%) (22.1%) 74.7% 10.5x 8.3x 8.0x 5.5x 10.0x 10.5x 0.0x

Median 3.4% 0.1% 88.8% 10.7x 8.3x 7.5x 5.5x 16.7x 12.1x 0.6x


page 12

Harris Williams & Co. is a preeminent middle market

investment bank focused on the advisory needs of clients

worldwide.

Experience

Focus

Market Intelligence

Stability

Global Reach

Exceptional Results

Middle market leader – closed nearly 200 transactions in the last four years.

Execution focus with unparalleled senior-level attention.

Over 10,000 conversations with buyers and lenders each year.

Unparalleled retention of senior professionals.

Approximately 20% of our transactions are cross-border.

Best-in-class execution produces unmatched closing rate.

• Locations

London, UK

Richmond, VA

Boston, MA

Cleveland, OH

London, UK

Minneapolis, MN

Philadelphia, PA

San Francisco, CA


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.

http://www.harriswilliams.com/industry-energy.html


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 Director [email protected]

+1 (804) 648-0072

Andrew G. Spitzer

Managing Director [email protected]

+1 (804) 915-0174

Brian S. Lucas

Director [email protected]

+1 (804) 932-1323

Matthew G. White

Vice President [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 President [email protected]

+1 (804) 648-1158

Sources:

1. Capital IQ.

2. MergerMarket.

3. Baker Hughes.

Harris Williams & Co. (www.harriswilliams.com), a member of The PNC Financial Services Group, Inc.

(NYSE:PNC), is a preeminent middle market investment bank focused on the advisory needs of clients worldwide.

The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence.

Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private

placements, and capital markets advisory services.

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of

FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized and regulated by the Financial Services

Authority (FRN #540892). Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris

Williams & Co. Ltd conduct business.

THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS

AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE

THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL

NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES,

FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND

SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE

REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER

FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR

MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE

CONTACT US AT +1 804-648-0072.

The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”).

It is not a research report, as such term is defined by applicable law and regulations, and is provided for

informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or

sell any financial instruments or to participate in any particular trading strategy. The information contained herein

is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or

completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act

as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and

also may provide, may have provided, or may seek to provide investment banking services for those companies. In

addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long

or short positions in the securities, options thereon or other related financial products of companies discussed

herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to

change without notice. The financial instruments discussed in this report may not be suitable for all investors, and

investors must make their own investment decisions using their own independent advisors as they believe

necessary and based upon their specific financial situations and investment objectives. Also, past performance is

not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by

any means, or redistributed, without Harris Williams’ prior written consent.

Copyright © 2012 Harris Williams & Co., all rights reserved.

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Phone: +1 (415) 288-4260

Fax: +1 (415) 288-4269

page 15


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