San Diego City. July 19, 2007

Transcription

1 San Diego City July 19, 2007

2 Delta Asset Management History 1981 Developed current investment process at Security Pacific Investment Managers 1991 Founded Delta Asset Management as a Division of Furman Selz Capital Management 1997 ING acquires Furman Selz 2004 BCM acquires Delta, majority owned and financed by Lovell Minnick Partners Focus Large Equity Institutional Clients Active Management Statistics as of 6/30/2007 (not inclusive of Berkeley Capital Management) 11 Person Employee Team Original 5 person team still in place 14 Client relationships (average tenure 15+ years); 1 new client in 2006; 2 lost in 2007 $4 billion under management Parent Company Update Lift-out of Small Cap Growth Team* Addition of Senior Marketing Person to BCM LLC *Press release in Appendix 2

3 Professional Management Team Carl Goldsmith Chief Investment Officer Delta Asset Management 30 Years Investment Experience Portfolio Portfolio Management/Research Management/Research Carl Goldsmith (30 Years Experience) Marla Ryan (15 Years Experience) David Garza (13 Years Experience) Brenda Cullen (6 Years Experience) Trading Trading Ilene Alperstein (25 Years Experience) Marketing/Client Marketing/Client Service Service Robert Sandroni (40 Years Experience) Kevin Hardy (20 Years Experience) Lynn Barr (6 Years Experience) Frank Hurst+ (24 Years Experience) * Brief bios provided in Appendix + Mr. Hurst supports all three divisions of BCM LLC 3

4 Research Responsibilities Larger Team now divides Sector Coverage Carl Goldsmith, CIO Generalist, Financials Marla Ryan, SVP Generalist, Consumer Nondiscretionary, Beverages David Garza, SVP Technology, Consumer Discretionary Brenda Cullen, VP Capital Goods, Energy, Basic Materials 4

5 Organizational Chart Lovell Minnick Equity Partners Berkeley Capital Management LLC Board of Managers Administration, Operations and Finance Kevin Cuccias Chief Executive Officer Chief Compliance Officer Marketing and Client Service Frank Hurst President Director of Marketing Berkeley Capital Management Berkeley Capital Management Division Division David Ruff David Ruff Chief Investment Officer Chief Investment Officer Delta Asset Management Delta Asset Management Division Division Carl Goldsmith Carl Goldsmith Chief Investment Officer Chief Investment Officer Harlingwood Capital Management Harlingwood Capital Management Division Division John Wylie John Wylie Chief Investment Officer Chief Investment Officer Domestic Dividend Equity International Dividend Equity Global Dividend Equity Small/Mid Core Equity Core Growth Equity Enhanced Equity Index Concentrated Core Growth Equity Micro Cap Growth Equity Small Cap Growth Equity SMID Cap Growth Equity Small Cap Hedge Equity Convertible Arbitrage 5

6 Investment Style Large Capitalization Core (Growth/Value) Risk Controls Sector Diversification Stock Specific Limitations Outperform over full market cycle 6

7 Investment Process Portfolio Construction Business Cycle Analysis Sector Emphasis Company Analysis Focus on Positive Change Valuation Analysis Search for Misvalued Companies 7

8 Business Cycle Analysis Business Cycle Provides Framework for Portfolio Structure Early/Mid Cycle Late Cycle Overweight Economically Sensitive Sectors Overweight Non-Cyclical Sectors Under/Overweight Economic Sectors Rule of Thumb: 50% under to 150% over Major Economic Change Results in Portfolio Restructuring Change identified through monitoring of economic data Portfolio sector weights repositioned to benefit from change Sector strategy examined frequently for appropriateness 8

9 Stock Selection Screening Process To be included in the portfolio a company must posses the following features: Pursuing Global Opportunities Using Technology to Improve Productivity and Profit Margins Focused on New Product Development Substantial Free Cash Flow A Valuation which Fails to Incorporate the Attractive Growth Outlook 9

10 Company Analysis Revenue Enhancers Global Expansion New Products Market Share Gains Price Increases Profit Margin Improvements Productivity Gains Restructuring Opportunities Global Sourcing of Inputs Management Execution Cash Flow Management Share Repurchase / Dividends Capital Structure Management Strategic Investments Accretive Acquisitions 10

11 Valuation Analysis Buy Discipline Examine fundamental valuation metrics of earnings, cash flow and enterprise value relative to the market and peers Assign valuation targets based on historic data and changing company fundamentals Monitor stock performance relative to price target Sell Discipline Reverse of Buy Decision Stock inappropriate environment for current macro-economic Negative change in fundamentals Exceeds valuation-based price target 25 percent decline relative to market 11

12 San Diego City Performance Review EQUITY PORTFOLIO MARKET VALUE* As of June 30, 2007 $200,294,404 As of June 30, 2006 $158,976,126 *Market value reflects the withdrawal of $5 million in April

13 Large Cap Core Performance - S&P 500 Index - San Diego City Total Return (%) Year 5 Year 3 Year 1 Year 2nd Quarter 2007 Before Fees Periods Ending 06/30/

14 Rising and Falling Markets - S&P 500 Index - San Diego City Total Return (%) YTD YTD Rising -Technology and Healthcare driven - Excessive Valuations Falling -Technology bubble bursts - Bear Market Ensues Rising -Fiscal and Monetary Stimulus - Economic Revival Full Market Cycle Before Fees 14

15 2006 Performance Analysis Energy Utilities Financials Materials Industrials S&P S&P Consumer Staples Consumer Discretionary Health Care Info Technology Performance of S&P 500 Sectors Cumulative Total Return - 3 Year - 1 Year Large Overweight Large Underweight * Non GAAP Performance by Capitalization Total Return S&P 100 S&P 500 Russell Mega large caps recover after poor Valuation levels for Tech look extremely attractive particularly versus the Utility sector & S&P Comparative Valuations Yr. Future Growth Rate P/E Ratio 2007 P/E to 5 Yr. Average Technology Composite 10% 16x* 63% Utility Composite 5% 15x 120% S&P 500 7% 15.5x NA 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% Supplemental: Please refer to Appendix for Performance Disclosures Source: Baseline, Bloomberg, Delta Analyst estimates 15

16 2007 Performance Analysis Performance of S&P 500 Sectors Cumulative Total Return - YTD June 2007 Energy Performance by Capitalization Materials Utilities Overweight Total Return S&P 100 S&P YTD (June) Industrials Underweight Russell Info Technology S&P 500 S&P 500 Health Care Consumer Staples Consumer Discretionary Financials Large Overweight Attribution 2007 YTD Basis Points Value Added from Sector Selection 36 Value Added From Stock Selection 72 Total 108 Top Sector Contributors Basis Points Technology 85 Industrials 58 Materials % 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 16

17 Market Dynamics by Size and Style Relative Performance of Large Cap vs. Small Cap Companies In the Months Following Economic Recoveries Absolute Performance of Growth vs. Value Companies Cumulative Return Present Russell 1000 Value - Russell 1000 Growth Current % S&P 500 Index / Russell 2000 Index Cumulative Relative Return % Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Number of Months after Recovery Begins Source: Bloomberg. 17

18 Business Environment Summary Investment Environment Cyclical Factors Sustained Economic Growth, driven by Capital Spending Inflation remains controlled at historically low level Interest Rates remain relatively stable (Short and Long Term) Corporate Profits Continue to Rise at a moderate pace (7 10%) Secular Factors Inflation suppressed by: Global Competition Technology Penetration Potential Risk Factors Restrictive Monetary Policy Asset Deflation Protectionism Geopolitical Events Equity Markets Expect solid equity returns for 2007 and beyond given our outlook (7-10%) Portfolio emphasis on companies that benefit from environment and that demonstrate a strong shareholder value orientation 18

19 REAL INDICATORS Purchasing managers index Durable good orders (minus defense) Consumer confidence Real disposable personal income Initial unemployment claims Unit Labor Costs Industrial material prices Composite of foreign industrial production MONETARY INDICATORS Evaluating Change in Macro Environment Examples of Key Economic Variables Commercial & industrial loans & Non-financial commercial paper Money supply Monetary base (St. Louis) Yield Curve (6 month T-bill rate/10 year T-bond rate) International money supply (M2) Jun. 30, 2007 Dec. 31, 2006 Jun. 30, 2006 Economic Slowdown EARLY CYCLE Economic Trough MID CYCLE Economic Expansion LATE CYCLE Expansion Peak FINANCIAL CONSUMER NON-DISCRETIONARY CONSUMER DISCRETIONARY NONDURABLE RETAIL CONSUMER DISCRETIONARY DURABLE Supplemental: Please refer to Appendix for Performance Disclosures 19 INDUSTRIAL COMMODITY CAPITAL SPENDING TECHNOLOGY ENERGY UTILITIES CASH

20 Delta Asset Management Portfolio Structure San Diego City June 07 June 06 S&P 500 (6/07) SLOWDOWN Financial 17.3% 20.7% 20.9% Financial 17.3% 20.7% 20.9% Consumer Non-Discretionary Consumer Non-Discretionary Consumer Non-Durables Consumer Non-Durables Phase I Phase I TROUGH Consumer Durables % Consumer Durables % Retail Retail Phase II Phase II EXPANSION Capital Spending % Capital Spending % Technology Technology Industrial Commodities Industrial Commodities Energy Energy Phase III Phase III PEAK Utilities % Utilities % Cash Cash Phase IV Phase IV TOTAL 100.0% 100.0% TOTAL 100.0% 100.0% Sector Overweights for 2007 Technology Business Investment Expected to be Strong. Balance sheet and cash flow characteristics are excellent. Valuations have declined to very reasonable levels. Capital Goods (Non-Tech) Business Investment Expected to be Strong. Expanding Global Opportunities. Substantial Free Cash Flows Large Financial Services Companies Highest Dividend Yields in the S&P. Solid Dividend Growth Potential. Moderate Growth Potential both Domestically and Globally. Valuations Attractive Particularly Compared to Other Yield Sectors. 20

21 Portfolio Fact Sheet Portfolio Characteristics (as of June 30, 2007) Security Top 10 Holdings (as of June 30, 2007) San Diego City S&P 500 Index P/E 2007 Rel to SPX Weighted Average Market Capitalization ($MM) Forward P/E (2008) San Diego City $120, S&P 500 Index $102, EXXON MOBIL (XOM) GENERAL ELECTRIC (GE) CITIGROUP (C) BANK OF AMERICA (BAC) 3.75% 3.23% 3.18% 3.02% 3.54% 2.95% 1.90% 1.63% Long Term Future Estimated Earnings Growth (3-5 yrs) P/B 12% 3.0 8% 2.9 MICROSOFT CORP (MSFT) CISCO SYSTEMS (CSCO) 2.68% 2.37% 1.86% 1.27% Dividend Yield 1.7% 1.7% CHEVRONTEXACO (CVX) JP MORGAN CHASE & CO (JPM) 2.30% 2.24% 1.36% 1.24% Return on Equity 19.2% 18.9% AT&T (T) PROCTER & GAMBLE (PG) 2.19% 1.95% 1.92% 1.36% Debt/Capital 31% 33% TOTAL Top 35 Names 26.93% 57.19% 19.11% 35.38% N/A N/A Beta Turnover (YTD ending 06/07) 12% N/A Source: Baseline 21

22 Portfolio Strategy Current Sector Overweight TECHNOLOGY Macro Environment Moderate Growth Capital spending seen as source of economic stimulus Fundamental Analysis Improve business trends Cash rich balance sheets Substantial positive operating cash flow Pressure to utilize cash for enhanced shareholder value Valuation Analysis Market consensus Technology stocks fairly valued Delta Opinion Valuations attractive if cash redeployed for shareholder enhancement 22

23 Technology Stocks and Their Liquidity Total Return Cash Annual Capitalization Relative to S&P 500 Price Net Cash Adjusted Free Cash FCF Per Shrink Using Net Company Name 1/1/06-6/30/07 6/29/07 Per Share 07 P/E Flow ($MM) Share Cash & 3Yrs FCF AGILENT (A) 22.5% % ANALOG DEVICES (ADI) 7.9% % APPLE COMPUTER (AAPL) 69.8% , % APPLIED MATERIALS (AMAT) 12.6% , % BROADCOM (BRCM) -7.0% % CISCO SYSTEMS (CSCO) 62.7% , % CORNING (GLW) 30.0% % EMC (EMC) 32.9% , % HEWLETT-PACKARD (HPQ) 57.9% , % IBM (IBM) 30.7% , % INTEL (INTC) -1.9% , % KLA-TENCOR (KLAC) 13.1% % MICROSOFT (MSFT) 15.1% , % MOTOROLA (MOT) -20.5% , % QUALCOMM (QCOM) 2.5% , % TERADYNE (TER) 20.7% % TEXAS INSTRUMENTS (TXN) 18.3% , % Source: Baseline and Delta estimates. Securities listed are currently in the portfolio.. 23

24 Key Delta Investment Executives Carl L. Goldsmith Chief Investment Officer Present, Delta Asset Management , Senior Vice President, Security Pacific Investments , Corporate Bond Trader, First Boston Corporation MBA, UCLA, BA Economics, UCLA David P. Garza, CPA/CFA Senior Vice President Present, Delta Asset Management , Director of Investment, Engemann Asset Mgmt , Founder, Galileo Capital Management , Managing Director, Roxbury Capital Management , Accountant, Ernst & Young BA Economics, UCLA Marla K. Ryan, CFA Senior Vice President, Portfolio Manager, Client Services, Present, Delta Asset Management , Senior Portfolio Manager/Analyst, Farmers Insurance , Analyst, Arco Investment Management , Assistant Vice President, Security Pacific MBA, UC Berkeley, BA, Economics, UCLA Brenda C. Cullen Vice President, Analyst, 2005 Present, Delta Asset Management , Equity Analyst, Hotchkis and Wiley Capital Mgmt , Marketing and Performance Analyst, Hotchkis and Wiley Capital Mgmt MBA, USC, BA, University of Minnesota Los Angeles Society of Financial Analysts Ilene P. Alperstein Vice President, Head Trader 1991 Present, Delta Asset Management , Vice President, Trading, Security Pacific Investments BA, State University of New York at Albany 24

25 Key Berkeley Executives Robert U. Sandroni Vice Chairman, Marketing/Client Services Present, Delta Asset Management , President, Security Pacific Investments , Citicorp BBA. JD, St. John's University Frank P. Hurst President & Director of Marketing Present, Berkeley Capital Management LLC , Founder, President, Duncan-Hurst Capital Mgmt , Senior Institutional Sales Manager, Scudder, Stevens & Clark and Pacific Century Advisors Jon Mishima Controller 2000 Present, Berkeley Capital Management LLC , Malcolm Drilling Company, Inc. BS, Business Administration, University of California at Berkeley Lynn R. Barr Institutional Product Manager Present, Delta Asset Management , Account Manager, Dimensional Fund Advisors , Product Trainer, Adforce BA, Economics, University of San Diego Kevin P. Cuccias Chief Executive Officer 2004 Present, Berkeley Capital Management LLC , President, American Century Brokerage , EVP/ CFO Benham Capital Mgmt , CPA KPMG BS, Santa Clara University Kevin Hardy Senior Vice President, 2005 Present, Delta Asset Management , McMorgan & Co. BA, University of Notre Dame James P. Cain Vice President, Operations Present, Delta Asset Management , Vice President, Operations, Security Pacific Investments BA, St. Patrick s College 25

26 Press Release Berkeley Capital Management to Acquire Investment Team From CapitalWorks Investment Partners; Industry Veteran Frank Hurst Joins as President SAN FRANCISCO, February 26, 2007 Berkeley Capital Management LLC, an independent multi-investment investment boutique managing approximately $4.3 billion in assets s in equity portfolios for institutional investors, is pleased to announce that it has signed a definitive agreement to acquire the investment i team from San Diego-based CapitalWorks Investment Partners. The CapitalWorks investment team, to be renamed the Harlingwood Capital Management division of Berkeley Capital, manages approximately $650 million in assets for institutional investors and specializes in growth equities in micro cro-cap, cap, small-cap, and small/mid-cap (SMID), and small-cap hedge and convertible arbitrage portfolios. Harlingwood,, which will remain in San Diego, is led by veteran portfolio managers John Wylie, Chief Investment Officer, and Kenneth Applegate, and includes five investment professionals, all gaining a greater interest in the financial success of their division through the transaction with Berkeley Capital. Financial terms weren t disclosed. Additionally, San Francisco-based Berkeley Capital is pleased to announce that Frank P. Hurst t has joined the company as President and Director of Marketing, a new position. Hurst, 55, brings more than 24 years of asset management nt industry experience to Berkeley Capital. He co-founded Duncan-Hurst Capital Management in San Diego in 1990 and served as the firm s s President and head of marketing and client service through Previously, he worked in senior institutional sales positions at Scudder, Stevens & Clark and Pacific Century Advisors. We We re thrilled to partner with the highly regarded CapitalWorks investment team, and with Frank Hurst, who has been a very successful and effective asset management executive for more than two decades, said Kevin Cuccias, Berkeley Capital s s Chief Executive Officer. We will now offer institutional investors a broader range of attractive investment products managed by multiple autonomous groups that focus exclusively on investments and have a significant t financial stake in their team s s success. The investment divisions share operational and distribution resources provided by Berkeley Capital. Following the acquisition, Berkeley Capital will manage approximately ately $5 billion in traditional and alternative assets, ranging across the equity style and market capitalization spectrum, and in US and international markets, through three divisions: Delta Asset Management in Los Angeles; Harlingwood Capital Management in San Diego; and Berkeley Capital in San Francisco. Berkeley Capital is jointly owned by private equity investor Lovell Minnick Partners, the firm s s management, and the investment professionals of the three divisions. The deal with Berkeley Capital frees us to focus on what we do best, b which is investing for our clients, while expanding our financial incentives and providing additional marketing and operational resources, said John Wylie, investment chief of the new Harlingwood Capital division. We We re delighted with this outcome. The Berkeley Capital business model offers a superior solution to asset management professionals and institutional investors alike by aligning interests effectively, said Frank Hurst. Our goal is to expand our multi-boutique firm in the years ahead by acquiring additional investment ent skills to meet the needs of our clients. Berkeley Capital Management was acquired in 2003 from London Pacific Group Ltd. by Lovell Minnick Partners and Berkeley Capital s s management. Delta Asset was purchased in 2004 from ING Investment Management Co., part of ING G Group, by Lovell Minnick Partners and management of Berkeley Capital C and Delta Asset. 26

27 Page 1 of 5 Grouped by: Sector Sorted by: Security Description (Ascending) ACCOUNT REVIEW 21 - SDCERS 9H1B June 29, 2007 Quantity Security ID Security Description Unit Cost Original Cost Unit Market Total Market Value Accrued Income % Gain %PF Total Capital Spending 20,592, ,840, , % 13.90% Total Cash Equivalents 5,261, ,261, % 2.63% Total Consumer Disc-Durables 1,090, ,276, % 1.14% Total Consumer Disc-Nondurable 6,991, ,985, , % 4.99% Total Consumer Non-Discretionary 17,744, ,548, , % 12.76% Total Energy 11,580, ,014, , % 10.49% Total Financial 24,562, ,719, , % 17.34% Total Industrial Commodity 6,103, ,312, , % 4.15% Total Retail 7,452, ,672, % 5.33% Total Technology 36,914, ,153, , % 24.04% Total Utilities 4,746, ,309, % 3.15% Total Investments: 143,040, ,096, % 99.91% Accrued Income: 171, % Total Account*: 143,040, ,267, % % Curr Yld Cost Yld *Weighted averages include accrued income. Report Printed on: 9:50 AM

28 Page 2 of 5 Grouped by: Sector Sorted by: Security Description (Ascending) ACCOUNT REVIEW 21 - SDCERS 9H1B June 29, 2007 Quantity Security ID Security Description Unit Cost Original Cost Unit Market Total Market Value Accrued Income % Gain %PF Capital Spending 18, MMM 3M CO COMMON ,379, ,562, % 0.78% , BA BOEING CO COMMON ,389, ,577, % 0.79% , BNI BURLINGTON NORTHN SANTA F COMMON , , , % 0.35% , CAT CATERPILLAR INC DEL COMMON ,319, ,317, % 1.16% , DE DEERE & CO COMMON , ,424, , % 0.71% , EMR EMERSON ELEC CO COMMON , ,024, % 0.51% , FDX FEDEX CORP COMMON ,810, ,875, , % 0.94% , GE GENERAL ELEC CO COMMON ,954, ,434, , % 3.21% , HON HONEYWELL INTL INC COMMON ,008, ,198, % 0.60% , IR INGERSOLL-RAND COMPANY LT COMMON , , % 0.47% , KMT KENNAMETAL INC COMMON , ,008, % 0.50% , NSC NORFOLK SOUTHERN CORP COMMON , ,077, % 0.54% , PH PARKER HANNIFIN CORP COMMON , , % 0.46% , ROK ROCKWELL AUTOMATION INC COMMON , ,229, % 0.61% , TEX TEREX CORP NEW COMMON , ,065, % 0.53% , TXT TEXTRON INC COMMON , ,068, , % 0.53% , UTX UNITED TECHNOLOGIES CORP COMMON ,207, ,624, % 0.81% , YRCW YRC WORLDWIDE INC COMMON , , (14.11)% 0.39% Total Capital Spending 20,592, ,840, , % 13.90% Cash Equivalents 5,261, CASH STATE STREET STIF FUND ,261, ,261, % 2.63% Total Cash Equivalents 5,261, ,261, % 2.63% Consumer Disc-Durables 17, ASD AMERICAN STD COS INC DEL COMMON , ,026, % 0.51% , SWK STANLEY WKS COMMON , ,250, % 0.62% Total Consumer Disc-Durables 1,090, ,276, % 1.14% Consumer Disc-Nondurable 25, KO COCA COLA CO COMMON ,169, ,307, , % 0.65% , CMCSA COMCAST CORP NEW CL A ,223, ,827, % 0.91% , MCD MCDONALDS CORP COMMON , ,898, % 0.95% , PEP PEPSICO INC COMMON ,002, ,400, % 0.70% , TWX TIME WARNER INC ,773, ,260, % 1.13% , VIA.B VIACOM INC CL B , ,289, % 0.64% Total Consumer Disc-Nondurable 6,991, ,985, , % 4.99% Consumer Non-Discretionary 46, ABT ABBOTT LABS COMMON ,597, ,479, % 1.24% , AET AETNA INC NEW COMMON , ,489, % 1.24% , MO ALTRIA GROUP INC COMMON , ,648, , % 0.82% Curr Yld Cost Yld Report Printed on: 9:50 AM

29 Page 3 of 5 Grouped by: Sector Sorted by: Security Description (Ascending) ACCOUNT REVIEW 21 - SDCERS 9H1B June 29, 2007 Quantity Security ID Security Description Unit Cost Original Cost Unit Market Total Market Value Accrued Income % Gain %PF 20, BAX BAXTER INTL INC COMMON , ,154, , % 0.58% , BDX BECTON DICKINSON & CO COMMON , ,005, % 0.50% , CL COLGATE PALMOLIVE CO COMMON , ,018, % 0.51% , GILD GILEAD SCIENCES INC COMMON , , % 0.38% , HNZ HEINZ H J CO COMMON , , , % 0.43% , JNJ JOHNSON & JOHNSON COMMON ,047, ,904, % 0.95% , KMB KIMBERLY CLARK CORP COMMON , , , % 0.41% , LLY LILLY ELI & CO COMMON , , % 0.33% , MDT MEDTRONIC INC COMMON ,462, ,576, % 0.79% , PFE PFIZER INC COMMON ,977, ,886, (4.58)% 0.94% , PG PROCTER & GAMBLE CO COMMON ,788, ,934, % 1.96% , STJ ST JUDE MED INC COMMON , , (4.80)% 0.31% , WYE WYETH COMMON ,063, ,717, % 1.36% Total Consumer Non-Discretionary 17,744, ,548, , % 12.76% Energy 15, APA APACHE CORP COMMON , ,240, % 0.62% , CVX CHEVRONTEXACO CORP COMMON ,712, ,594, % 2.29% , DVN DEVON ENERGY CORP NEW COMMON ,175, ,229, % 0.61% , XOM EXXON MOBIL CORP COMMON ,220, ,508, % 3.75% , GSF GLOBALSANTAFE CORP SHS , ,127, , % 0.56% , HAL HALLIBURTON CO COMMON ,279, ,359, % 0.68% , HES HESS CORP COMMON ,279, ,491, % 0.74% , SLB SCHLUMBERGER LTD COMMON , ,463, , % 1.23% Total Energy 11,580, ,014, , % 10.49% Financial 56, AIG AMERICAN INTL GROUP INC COMMON ,923, ,949, % 1.97% , AMP AMERIPRISE FINL INC COMMON , ,214, % 0.61% , BAC BANK OF AMERICA CORP COMMON ,201, ,003, % 3.00% , CB CHUBB CORP COMMON , , , % 0.46% , CIT CIT GROUP INC COMMON , , % 0.43% , C CITIGROUP INC COMMON ,383, ,377, % 3.18% , HIG HARTFORD FINL SVCS GROUP COMMON , ,497, , % 0.75% , JPM J P MORGAN CHASE & CO COMMON ,066, ,486, % 2.24% , LEH LEHMAN BROS HLDGS INC COMMON , ,159, % 0.58% , MER MERRILL LYNCH & CO INC COMMON , ,487, % 0.74% , MS MORGAN STANLEY COMMON , ,669, % 0.83% , USB US BANCORP DEL COM NEW ,204, ,844, , % 0.92% , WB WACHOVIA CORP 2ND NEW COMMON ,827, ,244, % 1.62% Total Financial 24,562, ,719, , % 17.34% Curr Yld Cost Yld Report Printed on: 9:50 AM

30 Page 4 of 5 Grouped by: Sector Sorted by: Security Description (Ascending) ACCOUNT REVIEW 21 - SDCERS 9H1B June 29, 2007 Quantity Security ID Security Description Unit Cost Original Cost Unit Market Total Market Value Accrued Income % Gain %PF Industrial Commodity 17, APD AIR PRODS & CHEMS INC COMMON , ,430, , % 0.71% , AL ALCAN INC COMMON , , % 0.40% , AA ALCOA INC COMMON , , % 0.31% , DOW DOW CHEM CO COMMON ,363, ,255, , (7.92)% 0.63% , DD DU PONT E I DE NEMOURS & COMMON ,276, ,469, % 0.73% , FCX FREEPORT-MCMORAN COPPER & COMMON , ,072, % 0.54% , PX PRAXAIR INC COMMON , ,180, % 0.59% , X UNITED STATES STL CORP NE COMMON , , % 0.24% Total Industrial Commodity 6,103, ,312, , % 4.15% Retail 23, BBBY BED BATH & BEYOND INC COMMON , , (3.08)% 0.42% , BBY BEST BUY INC COMMON , , % 0.37% , CVS CVS/CAREMARK CORP COMMON , ,388, % 0.69% , HD HOME DEPOT INC COMMON , ,349, % 0.67% , KSS KOHLS CORP COMMON , ,264, % 0.63% , TGT TARGET CORP COMMON ,832, ,977, % 0.99% , WMT WAL MART STORES INC COMMON ,564, ,103, % 1.55% Total Retail 7,452, ,672, % 5.33% Technology 30, A AGILENT TECHNOLOGIES INC COMMON , ,188, % 0.59% , ADI ANALOG DEVICES INC COMMON , , % 0.41% , AAPL APPLE INC COMMON ,350, ,514, % 1.26% , AMAT APPLIED MATLS INC COMMON , ,186, % 0.59% , ARW ARROW ELECTRS INC COMMON ,148, ,906, % 0.95% , BRCM BROADCOM CORP COMMON , , (18.77)% 0.37% , CSCO CISCO SYS INC COMMON ,705, ,751, % 2.37% , GLW CORNING INC COMMON ,267, ,660, % 0.83% , EMC E M C CORP MASS COMMON ,833, ,477, % 1.24% , FLEX FLEXTRONICS INTL LTD ORD ,066, , (35.57)% 0.34% , GOOG GOOGLE INC COMMON , ,306, % 0.65% , HPQ HEWLETT PACKARD CO COMMON ,922, ,887, , % 1.44% , INTC INTEL CORP COMMON ,019, ,381, % 1.19% , IBM INTERNATIONAL BUSINESS M COMMON ,750, ,010, % 1.50% , KLAC KLA-TENCOR CORP COMMON ,112, ,208, % 0.60% , LUCENT TECHNOLOGIES INC COMMON , % 0.00% , MU MICRON TECHNOLOGY INC COMMON , , % 0.31% , MSFT MICROSOFT CORP COMMON ,081, ,316, % 2.65% , MOT MOTOROLA INC COMMON ,280, ,015, , (20.67)% 0.51% Curr Yld Cost Yld Report Printed on: 9:50 AM

31 Page 5 of 5 Grouped by: Sector Sorted by: Security Description (Ascending) ACCOUNT REVIEW 21 - SDCERS 9H1B June 29, 2007 Quantity Security ID Security Description Unit Cost Original Cost Unit Market Total Market Value Accrued Income % Gain %PF 134, ORCL ORACLE CORP COMMON ,758, ,647, % 1.32% , PMCS PMC-SIERRA INC COMMON , , (1.76)% 0.36% , QCOM QUALCOMM INC COMMON ,559, ,761, % 0.88% , RIMM RESEARCH IN MOTION LTD COMMON , , % 0.40% , SLR SOLECTRON CORP COMMON ,213, , (46.46)% 0.32% , SUNW SUN MICROSYSTEMS INC COMMON , , % 0.46% , TER TERADYNE INC COMMON ,217, ,074, (11.80)% 0.54% , TXN TEXAS INSTRS INC COMMON ,437, ,235, % 1.12% , WDC WESTERN DIGITAL CORP COMMON , , (5.30)% 0.33% , YHOO YAHOO INC COMMON ,050, , (6.74)% 0.49% Total Technology 36,914, ,153, , % 24.04% Utilities 104, T AT&T INC COMMON ,116, ,355, % 2.17% , VZ VERIZON COMMUNICATIONS COMMON ,629, ,954, % 0.98% Total Utilities 4,746, ,309, % 3.15% Total Investments: 143,040, ,096, % 99.91% Accrued Income: 171, % Total Account*: 143,040, ,267, % % Curr Yld Cost Yld *Weighted averages include accrued income. Report Printed on: 9:50 AM