ford motor company (f)

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Stock Price Latest: $7.83 52-Week High: $12.60 52-Week Low: $7.39 Investment Returns Return on Equity: 17.60% Return on Assets: 0.8% Return on Capital: 1.4% Financial Condition Debt/Equity 11.91 Current Ratio: 2.1 Quick Ratio: 1.6 Interest Coverage: 1.2 Profit Margins: Gross Margin: 21.9% Net Profit: 1.3% Price Ratios Current P/E: 6.8 Price/Sales: 0.08 Price/Book 1.08 Price/Cash Flow: 1.60 Management Efficiency Income/Employee: 8,000 Revenue/Employee: 590,000 Receivable Turnover: 1.5 Inventory Turnover: 13.1 Asset Turnover: 0.6 Report by: Zaza Tugushi Email: [email protected]

Ford Motor Company (F)

Company Overview Since its inception in 1903, Ford Motor Company grew to be the world’s second largest1 automaker. The Company manufacturers and distributes automobiles in 200 markets across six continents. Its core and affiliated automotive brands are:

Aston Martin Ford Jaguar Land Rover Lincoln Mazda Mercury Volvo

In addition, Ford and its subsidiaries provide extensive range of automotive-related services. Genuine Parts & Service, one of Ford’s subsidiaries, produces plastic, glass, electronic and replacement parts for its vehicles. Ford Motor Credit and American Road Insurance provide financial services such as vehicle-related financing, leasing and insurance.

Ford was engaged in car rental business. However, in December of 2005, Ford sold Hertz Corporation for approximately $15 billion, including about $5.6 billion in cash.

The difficulties of Ford Motor Company and American automakers in general are well known to the investment world. Ford has been struggling to stop the market share loss to its competitors. Recent headlines captured the financial trouble of General Motors. The need for change to turn around American auto manufacturers is obvious. However, both Ford and GM have been ineffective so far in their efforts to strengthen their positions and compete effectively against Toyota, which has enjoyed solid market share gains, and other foreign automakers.

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mailto:[email protected]

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EXECUTIVE SUMMARY

There are more factors against investing in Ford than the factors for buying Ford shares at this moment. Despite, the Company’s best efforts operating environment does not appear to be bright in 2006. Needed cost restructuring of North American operations is on the way but the outcome is still uncertain. Elimination of 10% of salaried workforce in North America will help Ford to reduce its expenses. However, it is a sign of reduction in capacity. Meanwhile foreign automakers are opening new plants all over the North America. Recently, Toyota pushed Ford down to third place in the battle for the US market share. While majority of people agree that Ford needs to lessen its healthcare expenses, the call for an increase of the Company capacity utilization may be questionable at present stage. In addition to other problems Ford Taurus is no longer a leader in the family sedan category. It was replaced by Toyota Camry and Toyota Prius emerged as the top-selling hybrid. Still, there are bright spots. The Mustang and F-150 series trucks continue to sell regardless of high fuel costs. These two vehicles are both major blockbusters and Ford possesses strong pipeline of new vehicles for next several years. Nevertheless, the sustainability of success by selling fuel demanding vehicles is questionable. Despite the apparent popularity of Ford Mustang and Ford F-150, the automotive operations of the Company post continuous losses and the financial segment keeps Ford out of red. Many analysts base their expectations of Ford’s turnaround on the Company’s ability to reduce fixed costs and add more fuel efficiency to the current product mix. Competition in the automobile industry will only get worse. Value Line predicts that 2006 will be the fieriest battle on the American Automotive front in recent history. Financial Operations North American automotive operations of Ford lost $1.6 billion in 2005. Still, Ford posted the third consecutive year of overall profitability. This phenomenon has been present for several years now. Financial Statements provide little help on identifying this trend. However, taking a closer look at annual reports of the company and various financial publications unveils this secrecy. The reason Ford posts profits while its main operations are loosing money is the profitability of its financial business unit.

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ECONOMIC AND INDUSTRY ENVORONMENT Company’s Relation to Industry Over the last five years automobile industry performed very poorly. The industry shows signs of possible recovery based on the year-to-date performance. However, the sustainability of this recovery is uncertain. The impact of higher interest rates on the automobile industry has yet to be seen.

Performance of Ford Motor has been consistently worse than the automobile industry. Although year-to-date figures show minor improvements, the Company still lags behind the industry. This is unfavorable combination and a reverse in the two months upward trend will hit Ford hard. In addition to negative impact on automobile business operations of Ford, higher interest rates will decrease revenues and profitability of financial unit of the Company.

Performance During Past: Ford Automobiles DJ U.S. Total Market Index

3 Months -4.16% -3.30% 1.97%

6 Months -20.81% -17.35% 3.71%

YTD 1.55% 2.68% 2.89%

12 Months -36.62% -29.88% 7.90%

2 Years -40.56% -37.56% 16.80%

5 Years -73.95% -65.38% 9.19%

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Competition Competition in automobile industry is very intense and companies compete with each other on global scale. Exhibit A provides the ranking of automakers by their sales (number of units sold, not the revenues). Ford Motor is fourth as General Motors, DaimlerChrysler, Toyota capturing the first, second and third positions respectively. Exhibit F provides overview of some financial figures of these four companies. The superior performance of Toyota Motor is difficult to overlook. The company posts the highest numbers in all categories described in the exhibit while its workforce is below of that Ford, GM, DaimlerChrysler and the industry. The financial statements will be analyzed in the later sections with more scrutiny. Several aspects presented in the Exhibit F have to be addressed at this time. First, revenues of the top four companies are almost same. In fact, trailing-to-month sales of Ford are higher than that of Toyota. Ford currently employees about 300,000 workers (lower than GM and Daimler). However, the operating margin is only 1% compared to 7.8% of the industry. Earning per share is also only $1.04. P/E of Ford is 7.34 and is half the P/E of Daimler and Toyota. The number may suggest that the stock may be undervalued. According to Value Line, the battle for US market share will intensify further in the coming 6 to 18 months. Ford will have to improve drastically its automotive business profitability and effectiveness in order to survive this battle and to reverse the declining market share in the United States (see Exhibit B). Ford has been losing its market share in the United States for al least seven consecutive years. Although, the data for 2005 is not available yet, the consensus among financial analysts predicts further decline of Ford’s market share in the United States. Ford had 24.6% of market share in 1998 and in 2004, its market share dropped to 19.3%. On a more positive note, total number of vehicles sold trended upward in 2004 and 2005. The latest consumer report on automobiles further darken already gloomy situation of Ford Motor and American automakers in general. The following table summarizes consumer rating of reliability. Japanese automakers are excelling in most of the categories and the popularity of Japanese automobiles is at the all-time-high. It is apparent that not a single car in the top-ten list for reliability is manufactured by Ford.

1. Lexus2. Honda3. Toyota4. Mitsubishi5. Subaru6. Acura8. Mercury9. Mazda10. Suzuki

http://cnn.edmunds.com/zipcode/new/lexus/index.html

http://cnn.edmunds.com/zipcode/new/honda/index.html

http://cnn.edmunds.com/zipcode/new/toyota/index.html

http://cnn.edmunds.com/zipcode/new/mitsubishi/index.html

http://cnn.edmunds.com/zipcode/new/subaru/index.html

http://cnn.edmunds.com/zipcode/new/acura/index.html

http://cnn.edmunds.com/zipcode/new/mercury/index.html

http://cnn.edmunds.com/zipcode/new/mazda/index.html

http://cnn.edmunds.com/zipcode/new/suzuki/index.html

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Product Development Ford continues to spend millions of dollars to push the sales of Hybrid SUV’s. The Company completed the project in 2004 and started producing Escape Hybrids. The sales of Ford Hybrid vehicles accounted for only 10% of total hybrid sales in the United States. However, the Company plans to produce as many as 250,000 hybrids by 2010 and will have at least seven new hybrid models. This year sales of hybrids have been weak so far. Ford continues to offer cash incentives on its vehicles. In January and February, the incentives were $1,000 per hybrid vehicle. In addition to incentives, Ford has launched a marketing campaign featuring CEO Bill Ford, Jr. and Kermit the Frog. The purpose of this campaign is to promote the “Green Image” of the company and to remind the consumers that Japanese automakers are not the only ones making hybrid automobiles. The importance of strengthening Ford’s position in the United States is very important. Ford’s market share has declined for at least six consecutive years (See Exhibit B). The latest results from monthly automobile sales report indicate that the marketing plan has shown some signs of success. The Company sold 1,200 Escape Hybrids in February, up from 800 in January. Producing cost effective hybrid automobiles is becoming increasingly important. According to Wall Street Journal articles, the segment of the consumers in the United States that would pay the $3,000 premium to own a hybrid vehicle is tapped and consumers look for affordable alternatives, bargains and automobiles that stand out from the crowd. However, Jim Cain, the Company spokesperson, commented that Ford has no immediate plans to reduce the sticker price of its hybrids vehicles. At present time, Ford devotes more than 50% of its scientific research budget towards environmental efforts of cleaner motorized transportation. This includes the development of better hybrid vehicles. Overall, the company introduces 40 all-new or substantially new vehicles in 2004. However, the impact of the introduction of these models has yet to be seen. Although, Japanese automakers dominate consumer preferences, Ford has some promising products too. The new Ford Focus has accomplished a best-in-class five-star occupant protection rating from the European New Car Assessment Programme. This automobile offers European customers a stylish and fun-to-drive ride. Image Image of Ford Motor is not at its highest levels. However, the Company alone cannot be blamed for lower image. Image of American automakers has suffered significant setbacks. Major American automakers are closing factories and reducing their workforce. The financial difficulties of General Motors are discussed continuously and

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rumors of possible bankruptcy of the largest automaker. The managements of the Big Three are engaged in intense negotiations with labor unions to lower pension obligations. Meanwhile, Japanese and other automakers are expanding their production capacities and are opening new plants in North America. Recently, KIA Motors announced its plans to open its very first plant in the United States, which will be located in Georgia. These developments negatively reflect on the image of American automakers as well as Ford. Ford tries to promote the spirit of responsible corporate citizenship within the organization. The Company sponsors various programs designed to improve employee “work-life” balance and promote the spirit of cooperation. Recently, Ford created Ford Volunteer Corps, an umbrella organization under which employees can engage in various volunteer projects. These are plausible efforts on behalf of the management to improve the company image in the community. However, the harm caused by factor discussed earlier will be difficult to overcome. Legal Proceedings Number of legal actions and governmental investigations are pending against the Company in any given year. Causes of such litigations include alleged defects of Ford products, governmental regulations related to safety, emissions, and fuel-economy, financial services, products warranties, environmental issues, etc. More detailed list is available in the company annual report. However, neither actual details nor specific number of lawsuits is provided. Ford established a reserve to cover fines imposed on the Company. Contribution amount is dedicated to cover losses that are deemed “probable and reasonably estimable.” Still, outcome of lawsuits can never be accurately predicted and while company does believe its estimates are adequate, the management is open to admit the possibility of significant losses if certain cases are ruled against Ford. Management Quality Using Warren Buffett’s approach to the integrity of managers dictates reading annual reports. Reports should be clear and understandable. Annual Report of Ford was complex and difficult to read. In addition, the top management seems distanced from the realities of the industry. The tone of voice is very upbeat but does not address possibility of serious difficulties in a straight forward fashion. Finally, the letter to shareholders describes how much company cares about the employees but the regret of letting thousands of other workers being fired can nowhere be founded.

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FINANCIAL STATEMENT ANALYSIS Common Size Income Statement Very few items on the common size income statement show improvement. Modestly decreasing Interest Expense as a percentage of sales is one of them. In addition, revenues have increased for five consecutive years. However, Cost of Goods Sold has increased as well. Cost of Goods Sold represented a record 78% of sales in the last five years. More bad news is an increase in Selling and Administrative Expense as a percentage of sales from 8.4% in 2001 to nearly 14% in 2005. Meanwhile, there is no positive change in Net Income Margins and while Gross Operating Margin has been decreasing (See Exhibit D for full details) Common Size Balance Sheet Cash and Cash Equivalents increased as a percentage of total assets. It increased from 2.6% in 2001 to 11.7% in 2005. This increase may be viewed both as positive as well as negative sign. Ford has more money to pay for its large debt load. At the same time, the company may not have many promising projects to pursue. The rapid increase in Receivables to 41% of total assets is alarming. The Company is making sales but is not collected cash. The increase in Sales matched with an unproportional increase in Receivables will not contribute to the Company’s long-term success and may even hurt it significantly. The Inventories as a percentage of total assets has increased somewhat over the last five years. Overall, Total Assets have decrease moderately and if in 2001 non-current assets accounted for 87% of total assets, in 2005 they account for only 26%. Debt plays an important part in the Ford’s capital structure. In 2005, total liabilities accounted for 95% of total liabilities and stockholders’ equity. The Company regularly repays and reissues debt. Overall, percentage of debt as source of capital has not changed significantly in the past 5 years. However, if the Company continues to pursue this approach, the rising interest rates will have strong negative impact on its cash flow. Finally, Accounts Payable as percentage of total liabilities and stockholders’ equity has increased suggesting slow payment on the bills (See Exhibit C for line-by-line breakdown of the Balance Sheet). Cash Flow Statement Large cash flow from Investing Activity ($7,937) was contributed form the sale of Hertz rental business unit. As part of its financing activities, the company regularly repaid more than it borrowed (See Exhibit E for full disclosure of Cash Flow Statement).

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ANALYSIS OF RISK Marketability The ticker symbol of Ford is F. The stock is traded on the New York Stock Exchange (NYSE). Average daily volumes for the part year, six months and three months are summarized in the following table.

One-year average daily volume: 15.9 million shares 6 months average daily volume: 18.9 million shares 3 months average daily volume: 21.6 million shares

The data suggests that the number of Ford shares traded has increased in the past several months. According to technical analyses philosophy, an increased trading volume accompanied by a decline in stock price is generally a negative sign. Total Risk

Range Stock Price

52-week High $12.60

52-week Low $7.39

Current stock price is near its 52-week low and as of March 11, 2006, Ford shares were trading at $7.84 each.

Standard Deviation Ford S&P 500

1 year 4.94% 1.37%

3 year 4.74% 1.59%

5 year 5.26% 2.22%

The expected return of Ford is more dispersed around the mean than that of S&P 500. In perspective, the returns of Ford will show more volatility than the returns of S&P 500. Systematic Risk

Correlation to S&P 500

1 year 73.71%

3 year 67.43%

5 year 60.09%

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Calculations of correlation between Ford and S&P 500 are based on monthly returns for one, three and five years.

Beta Time Frame Zaza MSN

1-year -1.10

3-year 0.90

5-year 0.83

TTM 1.73

The calculation of betas in second column is based on weekly returns of Ford and S&P 500. The returns are adjusted for splits and dividend payments using Yahoo Finance historical prices data. The estimated 1-year beta is significantly different from

FUNDAMENTAL VALUATION

Financial Tenet #1: Return on Equity (Warren Buffett) Return on Equity graph shows a lot of volatility over the past 15 years (See Exhibit L). Ford posted three negative results out of fifteen. 2001 stands out with a staggering negative 68% ROE. Ford’s performance improved in the following years. However, 2002 and 2003 showed a modest ROEs of 6.4% and 7.7%. 66% of the time during the examined years, Ford’s ROE was double digit. The formula for calculating Ford’s Return on Equity was adjusted to include Warren Buffett’s approach to measuring this ratio. Specifically, extraordinary gains were subtracted and extraordinary losses were added to the net income number. The preciseness of the numbers reflecting these extraordinary items were difficult to verify. Different sources presented varying figures. The difference primarily derived because of various methods of classifying discontinued operations, cumulative changes of accounting practices and other items. The figures used in calculating Return on Equity according to Warren Buffett represent the best information available for use. Clearly, the ROE numbers lack consistency and vary from negative 68% to positive 94%. More modest but steady trend would be more preferable. Financial Tenet #2: Owner Earnings (Warren Buffett) Owner Earnings is another financial tenet examined by Warren Buffett to evaluate investment alternatives. Once again, Ford fails to produce consistent results. Starting in 1993, the Owner Earnings have increased substantially. The run-up was accompanied by a gradual decline. The past five or six years have been tough for Ford and Owner Earnings reflect the struggle to maintain strong operations. The ratio displayed signs of

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turn around starting in 2001 but dropped into red in 2005. Over a period of fifteen years, Owners Earnings have been higher than Net Profit most of the time. According to Warren Buffet’s evaluation technique, Owner Earnings of Ford Motor Company would not create much excitement (See Exhibit M for complete analysis). Financial Tenet #3: Owner Earnings (Warren Buffett) Next financial tenet examines Net Profit margin. Net Profit margin of Ford has stayed relatively low in the past fifteen years. Also, the ratio has been negative in 1991, 1992, 2001 and 2002. Only once during this time frame Ford reached 15% margin in 1998. Warren Buffet looks for companies with consistent and high net profit margins. Clearly, Ford is not one of them (See Exhibit N). Financial Tenet #4: One-Dollar Premise (Warren Buffett) Basically, one-dollar premise evaluates management’s rationality. It seeks to find out whether one dollar retained within the company produced at least one-dollar increase in the market cap of the company. If the test fails repeatedly, management needs to re-evaluate allocation of company profits. In this particular example, this financial tenet is not very helpful since Ford on several occasions was not able to add to retained earnings. Furthermore, six times the retained earnings of Ford decreased (See Exhibit O). Company Value – Warren Buffett Model Six scenarios were used to come up with a possible range of Ford stock price. Several assumptions were made to arrive at the best estimate. First, since Owner Earnings were negative in 2005, 5-year arithmetic mean of Owner Earnings was used instead. The resulting number is $3,832 million. This estimate seems conservative because the owner earnings of Ford, except the years when the owner earnings were negative, have been much higher than our estimate. 1st and 2nd stage growth numbers are 2.5% and 1.00%, once again representing very conservative estimates. The low growth rates do not consider the possibility of negative growth directly. But since the growth rates in profitable periods is much higher than 2.5%, the numbers used in the model should smooth out any estimation errors over time. The range of possible intrinsic values per share is summarized in the Appendix V. The highest estimate is $63.34 when using the discount rate of 5.62 – Yield of 20 year Treasury Bill. The lowest intrinsic value was calculated by using 30% discount rate and equals to $9.52. The value is still above the current trading price of Ford shares. It is highly likely that the prices of Ford Motor are undervalued.

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OTHER CONSIDERATIONS Benjamin Graham Stock Selection Criteria

Corporate Bond Rating Yield 5-year AAA 4.96 10-year AAA 5.39 20-year AAA 5.62

Criterion 1: Pass 2 x 5.62 < 14.70

Current P/E is 6.25. Reciprocal: 1 / 6.25 = 14.70 Criterion 2: NA P/E Ratios 5-year High is not available Criterion 3: Fail 5.10 Barely > 4.96 5.10 < 5.39, 5.10 < 5.65 Dividend Yield = 5.10% Criterion 4: Fail 7.84 > 3.69 x 2/3 Tangible Book Value = 7,012,000,000 Outstanding Shares = 1,900,000,000 Tangible Book Value per Share = 3.69 Criterion 5: Fail Negative Number Current Assets = 200,142,000,000 Total Liabilities = 256,519,000,000 Criterion 6: Fail 256,519,000,000 > 12,957,000,000 Total Debt: 256,519,000,000 Book Value: 12,957,000,000 Criterion 7: Fail 1.6 < 2 Current Ratio = 1.6 Criterion 8: Pass 256,519,000,000 < 2 x (200,142,000,000) Current Asset = 200,142,000,000 Total Debt = 256,519,000,000 Criterion 9: Fail Earnings Growth sporadic Negative Earnings Growth Criterion 10: Fail Significant and multiple negative earnings growth

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Ford Motor Company fails to pass the majority of the criteria dictated by Benjamin Graham model. According to the model, the stock does not pass buy recommendation. Exhibit W provides description of Benjamin Graham’s criteria. Institutional Ownership Nearly 50% of the outstanding shares of Ford Motor Company are owned by institutional investors. Top 10 institutions hold almost 24% of the outstanding shares. The number of sellers was higher than the number of buyers. However, the total number of shares purchased was 155% higher than the number of shares sold. Brandes Investment Partners, the largest institutional holder, increased their position by 25%. Mutual fund ownership information is separated from institutional holders. Out of 15 top mutual fund holders, only 3 funds reduced their holdings of Ford shares. Complete data on institutional ownership is provided in the Exhibit X.

Analyst Recommendations The sentiment among the analysts regarding Ford Motor Company is more bearish than bullish. Majority of the analysts recommend holding, reducing and selling the positions in Ford. Very few analysts recommend buying the shares at this moment. Many of these analysts work for large established companies such as Bank of America and Citigroup reflecting the extra cautiousness that most of such entities have to exercise. Smaller firms and individuals may be inclined to take more risk than large well-established institutions with strict investment policies. Complete data on analyst recommendations is provided in the Exhibit Y.

CONCLUSION Ford Motor Company is facing number of serious issues. The future is uncertain and the investment world is cautious with the stock. Neither Warren Buffett’s model nor Ben Graham’s criteria recommend buying Ford shares at this time. Buying Ford shares is a risky investment. But the Company has a substantial potential to turn around its operations and start making serious profits. Waiting for that to happen will rob investors with above-the-average risk tolerance to make a substantial return on their investment in the Ford Motor Company. My recommendation is to buy now until stock price starts reflecting the results of improving operations of the Company.

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Sources Ford Annual Reports Ford Financial Result MSN Money The Standard & Poor’s The Value Line The Wall Street Journal WRDS Database Yahoo – Finance Disclaimer: This analysis does not necessarily reflect the beliefs of the University of Missouri-Columbia or the College of Business. The insights and opinions are of the students of Investment Funds Management and should not be used in personal investment decisions. The University of Missouri and the author of this analysis take no responsibility for the validity of the valuation and analysis.

1 According to Value Line, Toyota is now the second largest automaker in U.S. auto industry.

Exhibits

Exhibit ATotal Unit Sales

Year Worldwide Vehicle Sales US Market Share European Market Share1998 na 24.6% 10.0%1999 7,220,000 23.8% 10.2%2000 7,424,000 23.7% 10.0%2001 7,008,000 22.8% 10.7%2002 6,973,000 21.1% 10.8%2003 6,736,000 20.5% 10.7%2004 6,798,000 19.3% 11.0%2005 6,848,000 na na

Exhibit BTotal Unit Sales

Worldwide Vehicle Sales (units)

6,200,000

6,400,000

6,600,000

6,800,000

7,000,000

7,200,000

7,400,000

7,600,000

1999 2000 2001 2002 2003 2004 2005

US Market Share

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1998

1999

2000

2001

2002

2003

2004

European Market Share

9.4%

9.6%

9.8%

10.0%

10.2%

10.4%

10.6%

10.8%

11.0%

11.2%

1998

1999

2000

2001

2002

2003

2004

Exhibit CCommon Size Balance Sheet

Year ended December 31,(in millions) 2005 2004 2003 2002 2001ASSETSCurrent Assets:

Cash and Equivalents 31,499 11.7% 23,511 8.0% 21,770 6.9% 12,250 4.2% 7,218 2.6%Receivables 114,497 42.5% 116,720 39.9% 113,614 36.0% 99,095 34.2% 3,152 1.1%Inventories 10,271 3.8% 10,766 3.7% 9,181 2.9% 6,980 2.4% 6,191 2.2%Other Current Assets 43,875 16.3% 59,159 20.2% 27,603 8.7% 75,944 26.2% 19,699 7.1%

Total Current Assets 200,142 74.3% 210,156 71.8% 172,168 54.5% 194,269 67.1% 36,260 13.1%

Non-Current Assets:Property, Plant & Equipment, Gross 73,324 27.2% 75,564 25.8% 72,105 22.8% 62,935 21.7% 60,631 21.9%Accum. Depreciation & Depletion 32,617 12.1% 31,013 10.6% 30,112 9.5% 25,000 8.6% 27,510 9.9%Property, Plant & Equipment, Net 40,707 15.1% 44,551 15.2% 41,993 13.3% 37,935 13.1% 33,121 12.0%Intangibles 5,945 2.2% 7,271 2.5% 7,262 2.3% 6,617 2.3% 0 0.0%Other Non-Current Assets 22,682 8.4% 30,676 10.5% 94,497 29.9% 50,536 17.5% 207,162 74.9%

Total Non-Current Assets 69,334 25.7% 82,498 28.2% 143,752 45.5% 95,088 32.9% 240,283 86.9%

Total Assets 269,476 100.0% 292,654 100.0% 315,920 100.0% 289,357 100.0% 276,543 100.0%

LIABILITIES & STOCK. EQUITYCurrent Liabilities:

Accounts Payable 22,813 8.5% 21,489 7.3% 20,420 6.5% 18,981 6.6% 15,677 5.7%Short Term Debt 0 0.0% 0 0.0% 29,573 9.4% 0 0.0% 302 0.1%Other Current Liabilities 72,977 27.1% 31,187 10.7% 32,295 10.2% 81,364 28.1% 28,567 10.3%

Total Current Liabilities 95,790 35.5% 52,676 18.0% 0.0% 100,345 34.7% 44,546 16.1%

Non-Current liabilities:Long Term Debt 154,332 57.3% 172,973 59.1% 150,231 47.6% 162,222 56.1% 167,035 60.4%Deferred Income Taxes 5,275 2.0% 6,171 2.1% 13,413 4.2% 14,561 5.0% 10,065 3.6%Other Non-Current Liabilities 0 0.0% 43,912 15.0% 57,678 18.3% 969 0.3% 46,439 16.8%Minority Interest 1,122 0.4% 877 0.3% 659 0.2% 5,670 2.0% 672 0.2%

Total Non-Current Liabilities 160,729 59.6% 223,933 76.5% 221,981 70.3% 183,422 63.4% 224,211 81.1%

Total Liabilities 256,519 95.2% 276,609 94.5% 304,269 96.3% 283,767 98.1% 268,757 97.2%

Shareholder's Equity:Preferred Stock Equity 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0%Common Stock Equity 12,957 4.8% 16,045 5.5% 11,651 3.7% 5,590 1.9% 7,786 2.8%

Total Equity 12,957 4.8% 16,045 5.5% 11,651 3.7% 5,590 1.9% 7,786 2.8%

Total Liabilities & Stock. Equity 269,476 100.0% 292,654 100.0% 315,920 100.0% 289,357 100.0% 276,543 100.0%

Exhibit DIncome Statement

Year ended December 31,(millions) 2005 2004 2003 2002 2001Sales 177,089 100.0% 171,652 100.0% 164,196 100.0% 163,420 100.0% 162,412 100.0%Cost of Sales 138,222 78.1% 122,804 71.5% 124,303 75.7% 109,960 67.3% 125,706 77.4%Gross Operating Profit 38,867 21.9% 48,848 28.5% 39,893 24.3% 53,460 32.7% 36,706 22.6%Selling, General & Admin. Expense 24,652 13.9% 25,115 14.6% 17,480 10.6% 28,426 17.4% 13,602 8.4%Other Taxes - 0.0% - 0.0% - 0.0% - 0.0% - 0.0%EBITDA 14,215 8.0% 23,733 13.8% 22,413 13.7% 25,034 15.3% 23,104 14.2%Depreciation & Amortization 6,722 3.8% 13,052 7.6% 14,297 8.7% 15,177 9.3% 19,750 12.2%EBIT 7,493 4.2% 10,681 6.2% 8,116 4.9% 9,857 6.0% 3,354 2.1%Other Income, Net 2,146 1.2% 1,243 0.7% 944 0.6% (80) 0.0% (90) -0.1%Income Avail for Interest Exp. 9,639 5.4% 11,924 6.9% 9,060 5.5% 9,777 6.0% 3,264 2.0%Interest Expense 7,643 4.3% 7,071 4.1% 7,690 4.7% 8,824 5.4% 10,848 6.7%Minority Interest 280 0.2% 282 0.2% 314 0.2% 367 0.2% 20 0.0%Pre-tax Income 1,996 1.1% 4,853 2.8% 1,370 0.8% 953 0.6% (7,584) -4.7%Income Taxes (512) -0.3% 937 0.5% 135 0.1% 302 0.2% (2,151) -1.3%

Total Net Income¹ 2,024 1.1% 3,487 2.0% 495 0.3% (980) -0.6% (5,453) -3.4%

¹ Totals may not add up because minor effects of cumulative accounting changes and discounted operations are not listed separately

Exhibit ECash Flow Statement

Year ended December 31,(in millions) 2005 2004 2003 2002 2001Cash Flow from Operating Activities

Net Income (Loss) 2,228 3,634 921 284 -5,453Depreciation and Amortization 6,722 13,052 14,297 15,177 19,750Deferred Income Taxes 787 4,283 2,059 -782 -1,719Operating (Gains) Losses 6,720 1,351 2,688 -2,236 4,304Extraordinary (Gains) Losses 0 0 0 0 0Change in Working Capital(Increase) Decr. in Receivables -1,058 3,854 -92 71 522(Increase) Decr. in Inventories -76 -112 -505 -650 1,122(Increase) Decr. in Other Curr. Assets 0 0 0 0 0(Decrease) Incr. in Payables -347 -9,499 -654 6,652 4,189(Decrease) Incr. in Other Curr. Liabs. -629 0 0 0 0Other Non-Cash Items 7,327 7,951 1,481 117 49Net Cash from Cont. Operations 21,674 24,514 20,195 18,633 22,764Net Cash from Discont. Operations 5 0 0 0 0

Net Cash from Operating Activities 21,679 24,514 20,195 18,633 22,764

Cash Flow from Investing ActivitiesCash Flow Provided by:

Sale of Property, Plant, Equipment 7,937 537 281 257 0Sale of Short Term Investments 6,154 8,414 9,382 3,924 14,531

Cash Used by:Purchase of Property, Plant, Equipmt. -9,548 -9,267 -7,749 -91,219 -11,155Purchase of Short Term Investments -6,278 -8,470 -10,074 -4,055Other Investing Changes Net 9,192 -6,065 1,835 87,473 -7,322

Net Cash from Investing Activities 7,457 -14,851 -6,325 -3,620 -17,169

Cash Flow from Financing ActivitiesCash Flow Provided by:

Issuance of Debt 24,559 27,160 24,391 15,842 46,255Issuance of Capital Stock 325 0 9 5,187 453

Cash Used for:Repayment of Debt -44,671 -36,021 -28,780 -30,780 -45,568Repurchase of Capital Stock 0 -151 0 -177 -1,838Payment of Cash Dividends -738 -732 -733 -743 -1,929Other Financing Charges, Net -126 -120 -19 338 -349

Net Cash from Financing Activities -20,651 -9,865 -5,132 -10,333 -2,976

Effect of Exchange Rate Changes -496 505 811 373 -252Net Change in Cash & Cash Equivalents 7,989 303 9,549 5,053 2,367

Exhibit FDirect Competitor Comparison

Ford DaimlerChrysler General Motors Toyota IndustryMarket Cap: 14.34B 55.98B 11.20B 171.11B 53.25BEmployees: 300,000 382,724 327,000 265,753 300.00KQtrly Rev Growth (yoy): 3.6% na -1.2% 14.8% 5.60%Revenue (ttm): 177.09B 177.37B 192.60B 173.35B 177.09BGross Margin (ttm): 8.21% 3.46% 1.53% 18.27% 18.27%EBITDA (ttm): 16.10B 21.40B 5.82B 24.35B 16.10BOper Margins (ttm): 1.00% 3.46% -5.34% 8.30% 7.89%Net Income (ttm): 2.23B 3.37B -8.45B 10.82B 3.37BEPS (ttm): 1.048 3.32 -15.14 6.61 2.19P/E (ttm): 7.34 16.51 na 15.92 15.99PEG (5 yr expected): 2.07 2.05 na 2.9 2.07P/S (ttm): 0.08 0.31 0.06 0.99 0.66

Date: March 6, 2006

EXHIBIT G

Correlation to S&P 5001 year 73.71%3 year 67.43%5 year 60.09%

Exhibit H

Performance During Past: Ford Automobiles DJ U.S. TotalMarket Index

3 Months -4.16% -3.30% 1.97%

6 Months -20.81% -17.35% 3.71%

YTD 1.55% 2.68% 2.89%

12 Months -36.62% -29.88% 7.90%

2 Years -40.56% -37.56% 16.80%

5 Years -73.95% -65.38% 9.19%

EXHIBIT I

Standard Deviation¹ Ford S&P 500

1 year 4.94% 1.37%

3 year 4.74% 1.59%

5 year 5.26% 2.22%

¹ calculated using weekly returns

Exhibit JBeta

Time Frame Zaza MSN

1-year -1.10

3-year 0.90

5-year 0.83

TTM 1.73

Exhibit KAutomakers Ranked by Sales

Company Ticker Market CapGeneral Motors Corporation GM 11.20BDaimlerchrysler AG DCX 55.98BToyota Motor Corporation TM 171.11BFord Motor Co. F 14.34BVolkswagen AG Private naNissan Motor Company NSANY naHonda Motor Co. Ltd. HMC 52.85BPeugeot PEUGY.PK naFiat FIA naRenault S.A. Private na

Date: March 6, 2006

s

Exhibit L

Financial Tenet #1: ROE according to WB

ROE = Net Income - Extraordinary Gains + Extraordinary LossesBook Value - Gain from Marketable Securities + Losses from Marketable Securitie

Year Net Income ExtraordinaryItems Book Value ROE

1990 860,100,000 0 23,238,100,000 3.7%1991 (2,258,000,000) 0 22,690,300,000 -10.0%1992 (7,385,000,000) 6,883,200,000 14,752,900,000 -3.4%1993 2,529,000,000 0 15,574,000,000 16.2%1994 5,308,000,000 0 21,659,000,000 24.5%1995 4,139,000,000 0 24,547,000,000 16.9%1996 4,446,000,000 0 26,762,000,000 16.6%1997 6,920,000,000 0 30,734,000,000 22.5%1998 22,071,000,000 0 23,409,000,000 94.3%1999 7,337,000,000 0 27,537,000,000 26.6%2000 3,467,000,000 2,043,000,000 18,610,000,000 29.6%2001 (5,453,000,000) 168,000,000 7,786,000,000 -67.9%2002 (980,000,000) 1,335,000,000 5,590,000,000 6.4%2003 495,000,000 407,000,000 11,651,000,000 7.7%2004 3,487,000,000 147,000,000 16,045,000,000 22.6%2005 2,024,000,000 204,000,000 12,957,000,000 17.2%

Return on Equity

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Exhibit M

Financial Tenet #2: Owner Earnings

Owner Earning = Net Income + Depreciation + Amortization - Capital Expenditures

Year NetIncome

Depreciation&

Amortization

CapitalExpenditures Owner Earnings

1990 860,100,000 4,879,600,000 7,162,900,000 (1,423,200,000)1991 (2,258,000,000) 5,778,300,000 5,847,300,000 (2,327,000,000)1992 (7,385,000,000) 6,755,700,000 5,789,500,000 (6,418,800,000)1993 2,529,000,000 7,468,000,000 6,814,000,000 3,183,000,0001994 5,308,000,000 9,336,000,000 9,470,000,000 5,174,000,0001995 4,139,000,000 11,719,000,000 10,456,000,000 5,402,000,0001996 4,446,000,000 12,791,000,000 10,410,000,000 6,827,000,0001997 6,920,000,000 13,583,000,000 9,675,000,000 10,828,000,0001998 22,071,000,000 14,329,000,000 10,407,000,000 25,993,000,0001999 7,337,000,000 15,193,000,000 10,274,000,000 12,256,000,0002000 3,467,000,000 14,849,000,000 10,455,000,000 7,861,000,0002001 (5,453,000,000) 15,922,000,000 8,420,000,000 2,049,000,0002002 (980,000,000) 15,177,000,000 9,124,000,000 5,073,000,0002003 495,000,000 14,297,000,000 9,254,000,000 5,538,000,0002004 3,487,000,000 13,052,000,000 9,237,000,000 7,302,000,0002005 2,024,000,000 6,722,000,000 9,548,000,000 (802,000,000)

(10,000,000,000)

(5,000,000,000)

0

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Net IncomeOwner Earnings

Exhibit N

Financial Tenet #3: Profit Margin

Net Profit Margin = Net Income / Revenues

Year NetIncome Revenues Net Profit

Margin

1990 860,100,000 97,650,000,000 0.88%1991 (2,258,000,000) 88,286,300,000 -2.56%1992 (7,385,000,000) 100,132,300,000 -7.38%1993 2,529,000,000 108,448,000,000 2.33%1994 5,308,000,000 128,439,000,000 4.13%1995 4,139,000,000 137,137,000,000 3.02%1996 4,446,000,000 146,991,000,000 3.02%1997 6,920,000,000 153,627,000,000 4.50%1998 22,071,000,000 144,416,000,000 15.28%1999 7,337,000,000 162,558,000,000 4.51%2000 3,467,000,000 169,298,000,000 2.05%2001 (5,453,000,000) 160,654,000,000 -3.39%2002 (980,000,000) 162,258,000,000 -0.60%2003 495,000,000 164,338,000,000 0.30%2004 3,487,000,000 171,652,000,000 2.03%2005 2,024,000,000 177,089,000,000 1.14%

Net Profit Margin

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

1990199119921993199419951996199719981999200020012002200320042005

Exhibit O

Financial Tenet #4: The One-Dollar Premise

Year SharesOutstanding

RetainedEarnings

StockPrice¹

MarketCap

1990 473,100,000 10.60$ 5,014,860,0001991 483,300,000 (3,170,600,000) 8.74$ 4,224,042,0001992 489,500,000 (9,262,500,000) 10.96$ 5,364,920,0001993 499,000,000 427,300,000 15.61$ 7,789,390,0001994 1,023,000,000 5,370,000,000 17.36$ 17,759,280,0001995 1,160,000,000 2,919,000,000 16.45$ 19,082,000,0001996 1,189,000,000 2,023,000,000 18.45$ 21,937,050,0001997 1,203,000,000 3,662,000,000 22.95$ 27,608,850,0001998 1,209,000,000 (5,978,000,000) 29.96$ 36,221,640,0001999 1,207,000,000 4,694,000,000 32.64$ 39,396,480,0002000 1,854,000,000 (8,231,000,000) 27.22$ 50,465,880,0002001 1,809,000,000 (9,863,000,000) 23.06$ 41,715,540,0002002 1,831,220,000 (2,461,000,000) 12.57$ 23,018,435,4002003 1,831,390,000 5,879,000,000 11.96$ 21,903,424,4002004 1,830,900,000 4,426,000,000 14.98$ 27,426,882,0002005 1,900,000,000 28,000,000 11.16$ 21,204,000,000

10-Mar-06 1,800,000,000 7.84$ 14,112,000,000

Change in Retained Earnings $ (3,170,600,000)Change in Market Cap 16,189,140,000 The One-Dolalr Premise: (5.11)$

¹ Stock Price: Average of High and Low for the yearAdditional Notes: 1994 - 2 for 1 stock split

2000 - 174 for 100 stock split

(20,000,000,000)

(10,000,000,000)

0

10,000,000,000

20,000,000,000

30,000,000,000

40,000,000,000

50,000,000,000

60,000,000,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

RetainedEarningsMarketCap

Exhibit P

Warren Buffett Way of Owner Earnings Discount Model

assuming Discount Rate (k) of 4.70%

Adjusted Owner Earnings in 2004Net Income naDepreciation & Amortization naCapital Expenditures naOwner Earnings (5-year avg.) 3,832,000,000

Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Prior Year Owner Earnings 3,832,000,000$ 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ First Stage Growth Rate (add) 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%Owner Earnings 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ 4,905,283,973$ Discounted Value per annum 3,927,800,000$ 3,845,267,431$ 3,764,469,070$ 3,685,368,478$ 3,607,929,981$ 3,532,118,654$ 3,457,900,306$ 3,385,241,465$ 3,314,109,362$ 3,244,471,916$

Sum of PV of owner earnings: $35,764,676,663

Residual ValueOwner Earnings in year 10 4,905,283,973$ Second Stage Growth Rate (g) (add) 1.00%Owner Earnings in year 11 4,954,336,813$ Capitalization rate (k-g) 3.70%Value at end of year 10 133,900,994,948$

Present Value of Residual $84,589,603,105Intrinsic Value of Company $120,354,279,768

Shares Outstanding 1,900,000,000

Intrinsic Value per Share: 63.34$

EXHIBIT Q




Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015







EXHIBIT R




Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015







Exhibit S




Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Prior Year Owner Earnings 3,832,000,000$ 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ First Stage Growth Rate (add) 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%Owner Earnings 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ 4,905,283,973$ Discounted Value per annum 3,927,800,000$ 3,354,995,833$ 2,865,725,608$ 2,447,807,290$ 2,090,835,393$ 1,785,921,899$ 1,525,474,955$ 1,303,009,857$ 1,112,987,587$ 950,676,897$






Exhibit T




Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Prior Year Owner Earnings 3,832,000,000$ 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ First Stage Growth Rate (add) 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%Owner Earnings 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ 4,905,283,973$ Discounted Value per annum 3,927,800,000$ 3,220,796,000$ 2,641,052,720$ 2,165,663,230$ 1,775,843,849$ 1,456,191,956$ 1,194,077,404$ 979,143,471$ 802,897,646$ 658,376,070$






Exhibit U




Year2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Prior Year Owner Earnings 3,832,000,000$ 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ First Stage Growth Rate (add) 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%Owner Earnings 3,927,800,000$ 4,025,995,000$ 4,126,644,875$ 4,229,810,997$ 4,335,556,272$ 4,443,945,179$ 4,555,043,808$ 4,668,919,903$ 4,785,642,901$ 4,905,283,973$ Discounted Value per annum 3,927,800,000$ 3,096,919,231$ 2,441,801,701$ 1,925,266,726$ 1,517,998,765$ 1,196,883,641$ 943,696,717$ 744,068,566$ 586,669,446$ 462,566,294$






Exhibit VValuation Summary

Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6Owner Earnings ############ ############ ############ ############ ############ ############Discount Rate 5.62% 10.00% 15.00% 20.00% 25.00% 30.00%1st Stage Growth 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%2nd Stage Growth 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%Intrinsic Value per Share 63.34$ 26.53$ 17.60$ 13.46$ 11.07$ 9.52$

Exhibit WBenjamin Graham's Criteria

Description of Criteria

1 An earnings-to-price yield at least twice the AAA bond yield.

2 A price-earnings ratio less than 40 percent of the highest price-earnings ratio the stock had over the past five years.

3 A dividend yield of at least two-thirds the AAA bond yield.

4 Stock price below two-thirds of tangible book value per share.

5 Stock price below two thirds "net current asset value".

6 Total debt less than book value.

7 Current ratio greater than two.

8 Total debt less than twice "net current asset value".

9 Earnings growth of prior 10 years at least at a 7 percent, annual (compound) rate.10 Stability of growth of earnings - no > than two declines of 5% or more in year end earnings in prior 10 years are permissible

Exhibit X

Institutional Ownership Data

Ownership InformationShares Outstanding 1.91 BilInstitutional Ownership (%) 44.8Top 10 Institutions (%) 23.7Mutual Fund Ownership (%) 12.295%/Insider Ownership (%) 5.16Float (%) 94.84

Ownership Activity# of Holders Shares

Total Positions 437 855,355,200New Positions 52 19,587,192Soldout Positions 62 -14,973,512Net Position Change -35 53,228,688Buyers 197 149,334,768Sellers 232 -96,106,080

Institution Name Shs Held Shs Chg %Chg $Chg* %Out %Port Rpt DateBrandes Investment Partners 143,844,656 28,896,716 25 -22,905,948 7.7 2.4 12/31/2005Barclays Global Investors Intl 66,227,748 -447,996 -1 -146,144,624 3.6 0.1 12/31/2005State Street Global Advisors 52,108,376 -962,677 -2 -121,003,920 2.8 0.1 12/31/2005Vanguard Group 44,991,672 1,472,383 3 -81,764,480 2.4 0.1 12/31/2005Deutsche Bank (other Managers) 32,370,172 -25,684,140 -44 -322,517,792 1.7 0.3 12/31/2005Northern Trust Co 29,542,020 -769,337 -3 -70,805,584 1.6 0.1 12/31/2005Bnp Cooper Neff 27,427,384 25,142,040 1,100.00 189,205,904 1.5 5.1 12/31/2005Tiaa-cref Investment Management 21,885,664 9,280,900 74 44,674,352 1.2 0.1 12/31/2005American Century Investments 17,059,736 2,407,524 16 -12,769,646 0.9 0.2 12/31/2005Credit Suisse First Boston Inc 15,990,857 6,311,096 65 28,006,972 0.9 0.2 12/31/2005Lsv Asset Mgmt 15,208,756 101,600 1 -31,544,962 0.8 0.4 12/31/2005Grantham Mayo Van Otterloo & Co 14,263,952 2,219,083 18 17,303,108 0.8 0.5 9/30/2005Pioneer Investments Management (boston) 13,019,349 980,271 8 -18,195,936 0.7 0.4 12/31/2005Goldman Sachs Asset Management 12,943,968 -16,441,253 -56 -189,810,848 0.7 0.1 12/31/2005JPMorgan Chase (US) 11,690,639 7,600,144 186 49,919,452 0.6 0.1 12/31/2005

Mutual Fund Shs Held Shs Chg %Chg $Chg* %Out %Port Rpt DateVanguard 500 Index Fund 17,745,260 192,805 1.1 1,901,057 1 0.2 9/30/2005Investment Company Of America 12,109,700 -3,390,300 -21.9 -33,428,356 0.7 0.1 9/30/2005Cref Stock Account 10,368,536 331,835 3.3 3,271,893 0.6 0.1 9/30/2005Income & Growth Fund 9,870,612 3,733,881 60.8 36,816,064 0.5 1.2 9/30/2005Vanguard Institutional Index Fund 9,036,993 390,181 4.5 3,847,185 0.5 0.2 9/30/2005Vanguard Total Stock Market Index Fund 8,049,662 263,406 3.4 2,597,183 0.4 0.2 9/30/2005Spdr Trust (spy) 7,884,123 -163,196 -2 -1,609,113 0.4 0.2 9/30/2005Pioneer Fund 7,000,000 1,000,000 16.7 9,860,000 0.4 0 9/30/2005Us Large Cap Value Portfolio 6,812,600 0 0 0 0.4 1.3 11/30/2005Gmo Trust 4,137,311 3,163,000 324.6 39,442,612 0.2 0.4 2/28/2005Brandes Global Equity Fund (can) 4,041,700 2,682,400 197.3 27,467,776 0.2 1.4 6/30/2005Capital World Growth & Income Fund, Inc 4,000,000 -1,847,400 -31.6 -15,444,263 0.2 0 11/30/2005Spartan Us Equity Index Fund 3,758,313 117,002 3.2 978,137 0.2 0.2 11/30/2005Oppenheimer Main Street Fund 3,000,426 0 0 0 0.2 0.7 11/30/2005Government Petroleum Fund 2,920,059 2,920,059 0 42,749,664 0.2 0 12/31/2004

Date: February 28, 2006

Exhibit YAnalyst Recommendations

Date Research Firm Action From To24-Jan-06 Calyon Securities Downgrade Neutral Reduce21-Oct-05 Goldman Sachs Downgrade In-Line Underperform14-Oct-05 Citigroup Downgrade Hold Sell

6-Oct-05 Bear Stearns Initiated Underperform20-Jul-05 KeyBanc Capital Mkts / McDonald Downgrade Underweight Sell20-Jun-05 Banc of America Sec Upgrade Sell Neutral17-Jun-05 KeyBanc Capital Mkts / McDonald Downgrade Hold Underweight16-Jun-05 Deutsche Securities Upgrade Sell Hold

27-May-05 Goldman Sachs Initiated In-Line11-Apr-05 Thomas Weisel Downgrade Outperform Peer Perform

7-Apr-05 Smith Barney Citigroup Downgrade Buy Hold28-Feb-05 Banc of America Sec Downgrade Neutral Sell

Source: Yahoo Finance

Rating Current 1 Month Ago 2 Months Ago 3 Months AgoStrong Buy 1 1 3 3Moderate Buy 0 0 0 0Hold 6 6 7 7Moderate Sell 3 3 2 2Strong Sell 3 4 4 4

Source: MSN Finance

Rating Current 1 Month Ago 2 Months Ago 3 Months AgoStrong Buy 2 1 1 2Moderate Buy 0 1 1 1Hold 2 1 1 0Moderate Sell 0 0 0 0Strong Sell 0 0 0 0 [email protected]

Source: Thomson Financial

Firm AnalystArgus Research Kevin TynanBanc of America Rod TadrossBear Stearns Peter NesvoldBernstein Brian JohnsonBurnham Securities David HealyCalyon Securities Joseph AmaturoCitigroup Jon RogersCredit Suisse Chris CerasoDeutsche Bank Securities Rod LacheGoldman Sachs Robert BarryJ.P. Morgan Himanshu PatelKey Banc Capital Markets Brett HoseltonLehman Brothers Darren KimballMerrill Lynch John MurphyMorgan Stanley Jonathan SteinmetzPrudential Securities Michael BruynesteynThomas Weisel Partners Scott MerlisUBS Rob Hinchliffe

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