RBC

U.S. RESEARCH AT A GLANCEJANUARY 13, 2010

RBC Insight is RBC's new global research destination on the web.To find out more, please contact your RBC Capital Markets' sales representative.

Ratings Revisions! American Ecology Corporation Summary Challenges to Continue into 2010; Moving to Sector Perform

! Atlas Air Worldwide Holdings Summary All In On The Airfreight Sector

! United Parcel Service, Inc. Summary Preannounces Q4'09 Earnings; We Would Be Buyers Here

Price Target Revisions! Celgene Summary More Positive Data, Solid Q4, and Strong 2010 Sales - Raising Target to $68

! Check Point Software Summary Increasing Estimates and Introducing 2011

! EXFO Electro-Optical Summary FQ1/10 Results In-line; Strong Outlook For FQ2

! Isilon Systems, Inc. Summary 4Q09 Earnings Preview

! Legacy Reserves LP Summary Equity Offering Helps Fund Acquisition; Raising PT By 5%

! Methanex Corp. Summary Starting 2010 with Higher Methanol Prices; Target Increased to $31.00

! OSI Pharmaceuticals Summary Q4 Upside; Modestly Increasing 2010 Forecasts

! QLogic Corporation Summary Raising The Bar Again

! Seagate Technology Summary Fiscal 2Q10 Earnings Preview

! VeriFone Holdings, Inc. Summary Thoughts from Management Meetings

! Xyratex Group Summary Hang On

First Glance Notes! Baidu, Inc. Summary One Search Platform To Rule The Middle Kingdom?

! Biogen Idec Inc. Summary Tysabri Patient Growth Decelerated in Q4:09 but Sales Were In-line

! Cornell Companies, Inc. Summary Announces Bureau of Prisons Contract Award

! Corrections Corp. of America Summary Loses Part of Recompeted Bureau of Prisons Procurement

! Health Management Associates Summary Pre-Announces Slight Upside to 4Q09; FY10 Guidance In Line

! Kraft Foods Inc. Summary Kraft Raises FY09 EPS Guidance

Earnings Preview! EMC Corporation Summary 4Q09 Earnings Preview

Company Comments! Amgen Inc. Summary Takeaway Thoughts on Guidance and Dmab Timelines; No Changes to LT Thinking

! Apollo Group, Inc. Summary Reducing FY10 Estimates and Reiterating Underperform Rating

! LM Ericsson Telephone Company Summary Digesting Canadian Bacon

! Nokia Corporation Summary Choppy in the Middle

! Verizon Communications Summary Fine-Tuning Estimates

Industry Comments! Ag Connect Expo Highlights Summary Cautious Optimism at Ag Connect Expo

! Bakken Shale Weekly: January Summary Progress Report on the North Dakota Bakken

! - Action-Oriented Research

Priced as of prior day's market close, EST (unless otherwise noted).

For Required Non-U.S. Analyst and Conflicts Disclosures, see Page 20.

12, 2010

! East Coast Banks 4Q09 EarningsOutlook; "On the Cusp of Change"

Summary Will "Kitchen Sinks" Dominate the Headlines?

! Global Clean Energy Directions Summary RBC's Daily Snapshot

! RBC Construction ContractorSurvey, Vol. 2

Summary Small Bump in Sentiment; Stimulus Expectations Waning

! Real Estate Investment Trusts Summary Q1-2010 REIT Quarterly (Summary)

! South African Gold Majors Summary Q4 CY2009 Earnings Outlook

Investment Strategy Research! RBC Investment Strategy Weekly Summary Excess Capacity, Policy Settings & Earnings

In-Depth Reports! Global Mining Trends & Values Summary January 12, 2010

Upcoming Events Marketing schedule and upcoming events

Find our Research at:RBC CM: www.rbcinsight.comThomson: www.thomsononeanalytics.comReuters: www.knowledge.reuters.comBloomberg: RBER GO

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Ratings RevisionsJamie Sullivan, CFA (Analyst)(212) 428-6465; [email protected] Shlisky (Associate)(212) 428-6690; [email protected]

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Revenue (MM) Prev.2008A 175.82009E 127.92010E 83.7↓ 109.92011E 94.7

All values in USD unless otherwise noted.

American Ecology Corporation (NASDAQ: ECOL; 16.99)

Rating:Risk Qualifier:Price Target:

Sector Perform (prev: Outperform)Average Risk18.00 ▼ 19.00

Challenges to Continue into 2010; Moving to Sector Perform• ECOL provided qualitative guidance for 2010, including a slow recovery in the

Base (i.e., recurring) business (~50% of '09 total), few Event clean-up projects,and improvement in Army Corps business (specific, stimulus).

• Fewer Event projects in the pipeline to replace Honeywell project (~40% of '09revenues) completed in 3Q09 will cause 2010 revenues to lag the recovery thatmany industrials are expected to experience.

• Our Outperform thesis was predicated on potential upside from stimulus andsome event project work while the industrial recovery takes hold. As upsideappears limited from these factors in 2010, we are lowering are our rating toSector Perform from Outperform.

• High ROIC (~20%), solid assets, strong balance sheet and dividend yield of4% protect downside, but upside catalysts are few at this time.

John Barnes (Analyst)(804) 782-4020; [email protected] Fountaine (Associate)(804) 782-4013; [email protected] Maiden (Associate)(804) 782-4014; [email protected]


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Revenue (MM) Prev.2008A 1,607.52009E 986.6↑ 984.12010E 1,106.6↑ 1,044.62011E 1,317.0


Atlas Air Worldwide Holdings (NASDAQ: AAWW; 39.35)


Outperform (prev: Sector Perform)Above Average Risk50.00 ▲ 28.00

All In On The Airfreight SectorWe are upgrading AAWW to Outperform from Sector Perform and raising our 12-monthprice target to $50 from$28 based on the following: (1) increased likelihood of favorableACMI contract renewals during 2010; (2) the potential for market share gains in the AMCcharter market on top of the benefit from the recently announced troop surge inAfghanistan; and (3) elimination of the financing risks associated with the delivery of thefirst 747-800s following the recent stock offering. Lastly, we believe further deals similarto the recently announced SonAir agreement are in the works, which could provide anadditional boost to earnings. We are also introducing 2011 and 2012 EPS estimates of$3.81 and $5.38, respectively, which are well above Street expectations. As these eventsunfold over the coming months, we believe AAWW shares will materially outperform itspeer group.

January 13, 2010 U.S. RESEARCH AT A GLANCE

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John Barnes (Analyst)(804) 782-4020; [email protected] Fountaine (Associate)(804) 782-4013; [email protected] Maiden (Associate)(804) 782-4014; [email protected]


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Revenue (MM) Prev.2008A 51,486.02009E 45,254.0↑ 45,000.02010E 47,556.0↓ 48,163.02011E 50,718.0


United Parcel Service, Inc. (NYSE: UPS; 62.40)


Outperform (prev: Sector Perform)Average Risk72.00 ▲ 60.00

Preannounces Q4'09 Earnings; We Would Be Buyers Here• UPS announced that it expects 4Q'09 earnings to be in the range of

$0.73-$0.75/sh, better than our estimate and the consensus of $0.63. The upsideto prior guidance is due to strength throughout the network, both domestic andinternational, as well as the result of various cost-savings measures previouslyimplemented. UPS also announced that it plans to further streamline itsoperations and reduce ~1,800 positions, and another ~1,100 employees will beoffered a voluntary separation package. We believe that the stock will continueto benefit from any positive commentary surrounding the airfreight space.Additionally, we believe that UPS has some built-in downside earningsprotection given that it still has a material amount of cost it can remove fromits network. With that said, we are raising our rating to Outperform, AverageRisk and increasing our 12-month price target to $72 from $60.

Price Target RevisionsJason Kantor, PhD (Analyst)(415) 633-8565; [email protected] Yee (Analyst)(415) 633-8522; [email protected] Butt (Associate)(415) 633-8588; [email protected]


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Rpt EPS Prev. P/Rpt EPS2008A 1.56 36.5x2009E 2.08↑ 2.07 27.4x2010E 2.73↓ 2.76 20.9x


Celgene (NASDAQ: CELG; 56.99)


OutperformAbove Average Risk68.00 ▲ 60.00

More Positive Data, Solid Q4, and Strong 2010 Sales - Raising Target to $68• We are increasing our price target to $68 following new positive data for

Revlimid, better than expected Q4 results, and bullish top-line guidance for2010. Celgene is our No.1 large cap pick for 2010, based on projectedRevlimid growth and upcoming data releases. New sales guidance provides abullish outlook for 2010 growth, but we believe EPS guidance for 2010($2.55-2.60) is overly conservative and we remain above guidance ($2.73), onexpectations of better operating leverage.

• Another major trial of Revlimid was stopped early due to efficacy. This is thefifth trial of Revlimid in a first-line setting to stop early for efficacy. We expectdata from three major studies to be presented at ASCO or EHA in June anddrive increased duration of therapy. The average duration in the US is 11.4months and 7+ months in the EU; both are growing.


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Robert Breza (Analyst)(612) 313-1207; [email protected] Hedberg (Associate)(612) 313-1293; [email protected] Bergstrom (Associate)(612) 313-1254; [email protected]


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Check Point Software (NASDAQ: CHKP; 33.75)


OutperformSpeculative Risk40.00 ▲ 35.00

Increasing Estimates and Introducing 2011• Our industry analysis compiled from conversations with C-level executives and

channel contacts indicate a fairly robust spending environment as theconfidence to spend on IT appears to have returned. We believe mostcompanies in our universe are executing towards the higher end of theirguidance range with a positive, yet conservative outlook expected for the1H'2010, and aided by easier year-over-year comparisons. Based on ourchecks, we expect Q4'09 revenue/EPS for Check Point near the high end ofguidance or $260.0M$0.58, vs. consensus of $257.6M/$0.57 and guidance of$245M-$268M/$0.53-$0.60, driven by strong year-end renewals, a Nokiaproduct refresh /conversion cycle and better close rates.

• We believe the pipeline is building for the March quarter and expectmanagement to offer a positive, yet conservative outlook. As such, we areincreasing our 2010 revenue/EPS estimates to $1,016.5B/$2.26 vs. consensusof $1,011.1M/$2.24 and are introducing 2011 revenue/EPS of$1,099.5M/$2.49 vs. consensus of $1,083.9M/$2.48.

Steve Arthur, CFA (Analyst)(416) 842-7844; [email protected] Maierovits (Associate)(416) 842-5338; [email protected]


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EXFO Electro-Optical (NASDAQ: EXFO; 4.58; TSX: EXF)



FQ1/10 Results In-line; Strong Outlook For FQ2• FQ1/10 Results In-line With Pre-Announcement: EXFO reported sales of

$45.6MM, in-line with their positive pre-announcement on November 30th.GM was 63.9% for the quarter (vs. our 60% expectation). Adj. EPS was $0.03- inline with EXFO's pre-announcement.

• Forecast Revisions - Significant Increases On Higher Revenue and GMOutlook: EXFO's guidance range for FQ2/10 was well ahead ofRBC/consensus expectations. We now forecast F2010E sales of $208.6MM(from $184.6MM previously) generating EPS of $0.24 ($0.12 previously).

• Target To $6.25 (From $4.50): On higher earnings forecast, our targetincreases to $6.25 from $4.50. EXFO shares have performed well in recentweeks, but still trade at attractive valuation metrics relative to improvedearnings outlook and execution. With ~ 37% return to our revised target, weremain buyers of the shares. We maintain our Outperform, AAR rating,with a revised target of $6.25.


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Amit Daryanani, CFA (Analyst)(415) 633-8659; [email protected] Rinderer, CFA (Associate)(503) 833-5264; [email protected] Jones (Associate)(415) 633-8533; [email protected]


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Isilon Systems, Inc. (NASDAQ: ISLN; 6.90)



4Q09 Earnings Preview• What's New? We increased our estimates for 4Q09 and beyond, as we believe

Isilon realized strong 4Q09 order patterns through year-end, and the pricingenvironment for enterprise storage systems, while still aggressive, remained atminimum consistent with 3Q09. On a 12-month basis, we increased our pricetarget to $10 (was $9) and maintained our Outperform, Speculative Risk rating.Even with the recent share price increase, Isilon still trades at discounts of~30% and ~5% on an enterprise value-to-CY10 revenue basis versusCompellent and 3PAR. We expect the Compellent-related discrepancy todiminish over the near term, as we expect Isilon to report breakevennon-GAAP EPS in 4Q09 that should reduce some of the going-concern risk.

• Sentiment. Currently, Isilon trades at ~2.7x our new, higher FTM revenueestimate, suggesting negative execution sentiment.

Leo Mariani, CFA (Analyst)(512) 708-6381; [email protected] Schultz, CFA (Associate)(512) 708-6385; [email protected]


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Legacy Reserves LP (NASDAQ: LGCY; 20.70)



Equity Offering Helps Fund Acquisition; Raising PT By 5%• LGCY Raised ~$83 Million In A Follow-On Equity Offering. The

Company's primary use of proceeds is to help fund the $130 million acquisitionin Wyoming (which is scheduled to close by February 17, 2010).

• Following The Offering & Acquisition, LGCY Should Have About $70Million Available On Its $340 Million Revolver. We believe LGCY will beable to maintain adequate liquidity through 2011.

• The Equity Raise Is About 5% Dilutive To Our Estimates. We estimatedistribution coverage tightens from 1.06x to 1.01x in 2010 and from 1.05x to1.00x in 2011.

• We Have Increased Our Price Target By 5% To $20/Unit. LGCY trades ata 5% discount to the Group. LGCY is trading at an expected annual yield ofabout 10.0%. Our $20/unit price target implies a 9% discount to the group and7% all-in 12-month upside potential.


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Fai Lee, CGA, CFA (Analyst)(604) 257-7662; [email protected] Martin (Associate)(604) 257-7145; [email protected]


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EPS (Op) Prev. P/E2008A 1.48 15.5x2009E 0.07↓ 0.10 NM2010E 2.09↑ 1.32 11.0x2011E 3.38↑ 2.68 6.8x


Methanex Corp. (NASDAQ: MEOH; 22.92; TSX: MX)



Starting 2010 with Higher Methanol Prices; Target Increased to $31.00• Target Price Increased from $23.00 to $31.00. The increase to our target

price reflects an upward revision to our methanol pricing assumptions.• Upward Revision to Methanol Price Forecast. Consistent with the new

European contract price, we increased our Q1/10 methanol price assumptionfrom $288/tonne to $340/tonne. For the remainder of our forecast period, weincreased our methanol price assumption from $260/tonne to $300/tonne.

• EPS Estimates Increased. We increased our 2010 and 2011 EPS estimatesfrom $1.32 and $2.68, respectively, to $2.09 and $3.38. The changes reflect theupward revision to our methanol pricing assumptions, partially offset by amore conservative ramp-up of production in Chile. We have assumed anoverall operating rate of 40% for Chile by 2011 (previously 50%). In addition,we decreased our Q4/09 EPS estimate by $0.03 as the start-up of the secondproduction unit was slightly later than our forecast.

Jason Kantor, PhD (Analyst)(415) 633-8565; [email protected] Yee (Analyst)(415) 633-8522; [email protected] Butt (Associate)(415) 633-8588; [email protected]


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OSI Pharmaceuticals (NASDAQ: OSIP; 33.61)



Q4 Upside; Modestly Increasing 2010 Forecasts• We are increasing our 2009 and 2010 EPS estimates and raising our price

target to $37 from $36 following OSIP's surprising pre-announcement of betterthan expected Tarceva sales in the US and ex-US. Our fully-taxed 2010non-GAAP EPS estimate increases from $2.06 to $2.14, which could beconservative.

• We had expected increasing growth for Tarceva, but the magnitude of thegrowth (10% sequentially) was a surprise and remains relatively unexplained.We have therefore been conservative in our new 2010 forecasts pending moredetails from Roche on February 3. If the Q4 sales figures represent a true runrate for 2010, then our forecasts would need to be increased.

• We believe the risk benefit is favorable for OSIP going into its January 18thPDUFA date for the first-line maintenance indication. Expectations are verylow following the 12-1 negative ODAC vote, and a surprise positive FDAdecision could take shares up 10%, in our view.


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QLogic Corporation (NASDAQ: QLGC; 20.66)



Raising The Bar Again• What's New? Citing particular strength in the Host Products division, QLogic

pre-announced positive results versus our recently increased estimates andStreet expectations. QLogic expects revenue of $147.0-$149.0 million andnon-GAAP EPS of $0.29-$0.30 (Street: $138.3 million and $0.24). On a12-month basis, we increased our price target to $25 (was $23) and maintainedour Outperform, Above Average Risk rating. We continue to believe QLogichas a multitude of tailwinds working in its favor (easier year-over-yearcomparables for HBA and switch businesses, continued Intel's Nehalem serverrefresh cycle, volume leverage on margins, and broad portfolio targeted atunified fabrics).

• Sentiment. Currently, the stock trades at ~18x our FTM non-GAAP EPSestimate, suggesting neutral execution, which is in line with the average levelacross our coverage list. We believe a positive bias is warranted given thecatalysts that QLogic has working in its favor over the next several quarters.



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Seagate Technology (NYSE: STX; 17.72)


Sector PerformAbove Average Risk22.00 ▲ 19.00

Fiscal 2Q10 Earnings Preview• What's New? We increased our estimates for the December quarter and

beyond, as we believe Seagate realized strong order patterns through calendaryear end, and the pricing environment remains tame, as supply remains tightdue to industry consolidation and yield issues at a major competitor. For theMarch quarter, we expect the industry TAM to be roughly flat sequentially dueto continued OEM inventory restocking and healthy consumer PC demand(helped by Windows 7 adoption). On a 12-month basis, we increased our pricetarget to $22 (was $19) to reflect our higher estimates but maintained ourSector Perform rating and Average risk assessment.

• Sentiment. Currently, the stock trades at ~8x our assessment of the Streetconsensus FTM non-GAAP EPS estimate, suggesting negative executionwhich is below the average level of our coverage list but is likely warranteddue to near peak profitability metrics.


8

Daniel R. Perlin, CFA (Analyst)(410) 625-6130; [email protected] V. Roswell, CFA (Associate)(410) 625-6131; [email protected]


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VeriFone Holdings, Inc. (NYSE: PAY; 17.28)


Sector PerformSpeculative Risk19.00 ▲ 17.00

Thoughts from Management MeetingsWe recently hosted meetings with Robert Dykes, SVP and CFO and William Nettles, VPof IR and came away believing new growth initiatives, albeit small today, could becomemore meaningful as we exit 2010 and into 2011. Key growth opportunities include 1)payment enabled media, 2) end-to-end encryption (VeriShield Protect), and 3) expansioninto Level V merchants through PAYware Mobile.



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EPS (Op) Prev. P/E2008A 0.56 27.2x2009A 0.04↓ 0.17 NM2010E 2.00↑ 0.94 7.6x2011E 2.13 7.2x


Xyratex Group (NASDAQ: XRTX; 15.25)



Hang On• What's New? Xyratex reported revenue ($243.0 million) and non-GAAP EPS

($0.26) below the Street estimates ($262.8 million and $0.38), as unexpectedsemiconductor constraints negatively impacted shippable NSS orders. Withoutthis impact, Xyratex stated that it would at least have met Street expectations.Xyratex provided fiscal 1Q10 and FY10 revenue and non-GAAP EPS targetswell ahead of Street expectations, as Seagate and Western Digital havereturned to more normalized order patterns. On a 12-month basis, wesubstantially increased our price target to $21 (from $13) to reflect oursignificant increase in profits and reiterated our Outperform, Speculative Riskrating.

• Sentiment. As of Tuesday's close, Xyratex traded at ~8x our FTM non-GAAPEPS estimate, suggesting severe, negative execution sentiment that is below theaverage level (neutral) across our coverage list. With the substantial increase inEPS, we expect the shares to materially increase over the near term.


9

First Glance NotesStephen Ju (Analyst)(212) 428-2365; [email protected] Bank (Analyst)(212) 858-7333; [email protected] Sandler (Analyst)(212) 428-6227; [email protected] (Sean) Kim (Associate)(212) 428-2363; [email protected] Vineyard (Associate)(212) 428-6489; [email protected] Goldstein (Associate)(212) 428-6412; [email protected]


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Baidu, Inc. (NASDAQ: BIDU; 386.49)

Rating:Risk Qualifier:

OutperformSpeculative Risk

One Search Platform To Rule The Middle Kingdom?Google issued a blog post suggesting it may have to re-evaluate its operations in China asit approaches the government with a bid to unfilter search results on Google.cn. Weremind investors that media in China is State-controlled and the government has next tono incentive to accede to Google's wishes. Hence, in our view the most likely conclusionis that if Google were to insist on the ability to unfilter search results, it may eventually bebanned in China. The financial implications for Google are minimal, as we believerevenue from China accounts for around 1% of total. The implications for BIDU are moreprofound should Google withdraw from the Chinese market: 1) opportunity for BIDU topick up Google's wallet share; 2) increased urgency among advertisers in the Phoenix Nesttransition; 3) increased urgency among larger portals to invest in search; and 4) improvedinvestor sentiment.

Jason Kantor, PhD (Analyst)(415) 633-8565; [email protected] Yee (Analyst)(415) 633-8522; [email protected] Butt (Associate)(415) 633-8588; [email protected]


42.00

48.00

54.00

60.00

66.00

72.00

78.00

84.00

AS O N2007




CLOSE 53.25

LO-21NOV08 37.21

20000

40000PEAK VOL. 63742.5VOLUME 5055.1

90.00

105.00

120.00

135.00

150.00Rel. S&P 500 HI-20FEB09 152.30

LO/HI DIFF 71.31%

CLOSE 108.24

LO-08AUG08 88.90


Biogen Idec Inc. (NASDAQ: BIIB; 53.25)


Sector PerformAbove Average Risk

Tysabri Patient Growth Decelerated in Q4:09 but Sales Were In-line• Biogen preannounced year-end 2009 Tysabri patient numbers totaling 48,200

(commercial), which were below our forecast of 48,750. This is the secondquarter of sequential declines in net new patients after a big jump in Q2:09.

• Reported worldwide Tysabri sales were $297.8M, in line with our Q4 forecastof $298.3M. US sales of $136.5M were $2.4M below our estimate; ex-US salesof $161.3M were $1.9M higher than forecast (likely helped by Fx)

• Another metric we watch closely is revenue per patient which had improvedover the past few quarters after declining. Revenue per patient was flat overQ3:09.


10

Jamie Sullivan, CFA (Analyst)(212) 428-6465; [email protected] Shlisky (Associate)(212) 428-6690; [email protected]


14.00

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24.00

26.00

28.00

AS O N2007




CLOSE 22.96

LO-13MAR09 13.42

300

600

900


100.00

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140.00

160.00 Rel. S&P 500 HI-28NOV08 161.12LO/HI DIFF 95.51%

CLOSE 123.64

LO-07MAR08 82.41


Cornell Companies, Inc. (NYSE: CRN; 22.96)


Sector PerformAbove Average Risk

Announces Bureau of Prisons Contract Award• After the close on Tuesday, CRN won a recompeted CXW contract from BOP

for 2,180 beds (potentially 2,507). The inmates will be housed in CRN's D.Ray James facility in Georgia.

• Our view is that per-diems were likely lower in Georgia ($54-$64) than at oneof the existing CXW faclities in California.

• This is positive for CRN, in our view, as the 700 incremental inmates (net ofState of Georgia transfers out of the facility) could add an annualized$0.10-$0.15 of EPS.

Jamie Sullivan, CFA (Analyst)(212) 428-6465; [email protected] Shlisky (Associate)(212) 428-6690; [email protected]


12.00

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28.00

AS O N2007



D JHI-14DEC07 31.58HI/LO DIFF -69.92%

CLOSE 23.88

LO-06MAR09 9.50

5000

10000

15000

20000

25000


90.00

105.00

120.00

135.00Rel. S&P 500 HI-06NOV09 138.65

LO/HI DIFF 84.79%

CLOSE 120.73

LO-13FEB09 75.03


Corrections Corp. of America (NYSE: CXW; 23.88)


OutperformAverage Risk

Loses Part of Recompeted Bureau of Prisons Procurement• After the close on Tuesday, CRN won a recompeted CXW contract from BOP

for 2,180 beds (potentially 2,507). Expectations were that CXW would retainthe contract.

• The inmates involved could come from CXW's California City facility in CA(2,304 design capacity), although this is not yet confirmed.

• Our view would be that per-diems were likely lower in Georgia ($54-$64) thanin the higher-cost region of California.

• Financial impact (est. $0.07-$0.09 to 2011) is somewhat minor for CXW,though it increases available inventory.

• That said, the California City facility may be attractive to the State ofCalifornia in 2011 as the State continues to try to alleviate prisonovercrowding.

Frank G. Morgan, CFA (Analyst)(615) 372-1331; [email protected] Hie (Associate)(615) 372-1321; [email protected]


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AS O N2007



D JHI-16OCT09 8.58LO/HI DIFF 986.08%

CLOSE 7.51

LO-28NOV08 0.79

20000

40000


40.00

80.00

120.00160.00

Rel. S&P 500 HI-09OCT09 170.29LO/HI DIFF 499.45%

CLOSE 143.06

LO-21NOV08 28.41


Health Management Associates (NYSE: HMA; 7.51)


Sector PerformSpeculative Risk

Pre-Announces Slight Upside to 4Q09; FY10 Guidance In Line• HMA previewed 4Q09 and FY09 results that were slightly better than expected

and issued initial FY10 guidance that was essentially in-line.• We view this announcement as a positive data point for hospitals going into the

4Q09 earnings season.


11

Edward Aaron, CFA (Analyst)(303) 595-1127; [email protected]


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AS O N2007



D JHI-07DEC07 35.29HI/LO DIFF -41.03%

CLOSE 29.29

LO-06MAR09 20.81

100000

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300000


105.00

120.00

135.00

150.00Rel. S&P 500 HI-23JAN09 158.44

LO/HI DIFF 63.45%

CLOSE 118.52

LO-01FEB08 96.93


Kraft Foods Inc. (NYSE: KFT; 29.29)


Sector PerformAverage Risk

Kraft Raises FY09 EPS GuidanceAfter the close tonight, Kraft (KFT) raised FY09 guidance to "at least $2.00" compared toprior guidance of "at least $1.97." We view the news as mostly a non-event in the largerscope of the pending Kraft/Cadbury merger.

Earnings PreviewAmit Daryanani, CFA (Analyst)(415) 633-8659; [email protected] Rinderer, CFA (Associate)(503) 833-5264; [email protected] Jones (Associate)(415) 633-8533; [email protected]


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AS O N2007




CLOSE 17.47

LO-21NOV08 8.25

100000

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75.00

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120.00Rel. S&P 500 HI-09OCT09 127.00

LO/HI DIFF 69.89%

CLOSE 115.28

LO-18JUL08 74.76

EPS (Op) Prev. P/E2007A 0.91 19.2x2008A 1.03 17.0x2009E 0.88↑ 0.87 19.9x2010E 1.10↑ 1.05 15.9x


EMC Corporation (NYSE: EMC; 17.47)


Sector PerformAverage Risk21.00

4Q09 Earnings Preview• What's New? We increased our revenue and non-GAAP EPS estimates for

4Q09 and beyond, as we believe EMC realized strong 4Q09 order patternsthrough year end, and the pricing environment for enterprise storage systems,while still aggressive, remained at minimum consistent with 3Q09. On a12-month basis, we maintained our $21 price target, Sector Perform rating, andAverage risk assessment. On a relative basis, we prefer NetApp and HP as ourmid and large cap investment vehicles in the current recovery cycle of ITspending.

• Sentiment. EMC trades at ~16x our assessment of the Street consensus FTMnon-GAAP EPS estimate, suggesting negative execution sentiment which isbelow the current neutral sentiment level across our coverage list. We believeEMC's sentiment level is likely warranted given VMware's high valuation andthe difficulty for EMC to provide FY10 guidance that meets some investors'extended expectations.


12

Company CommentsMichael Yee (Analyst)(415) 633-8522; [email protected] Kantor, PhD (Analyst)(415) 633-8565; [email protected] Butt (Associate)(415) 633-8588; [email protected]


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AS O N2007



D JHI-19SEP08 66.51LO/HI DIFF 69.84%

CLOSE 56.03

LO-21MAR08 39.16

20000400006000080000

100000


105.00

140.00

175.00

210.00Rel. S&P 500 HI-20FEB09 216.55

LO/HI DIFF 149.66%

CLOSE 145.05

LO-16MAY08 86.74

Revenue (MM)2008A 15,003.02009E 14,612.02010E 14,941.52011E 15,832.7


Amgen Inc. (NASDAQ: AMGN; 56.03)


OutperformAverage Risk72.00

Takeaway Thoughts on Guidance and Dmab Timelines; No Changes to LT Thinking• FY09 will come in "close to the low end" of EPS guidance of $4.90-5.05 partly

due to the ARRY deal. Revenues will be "just above the midpoint" of guidanceof $14.4-14.8B. We adjusted our FY EPS to $4.93.

• Prolia re-filing hasn't occurred yet. This is not completely surprising to us andis partly due to the fact that the final post-marketing surveillancerecommendations by FDA did not get to AMGN until mid-December. Wehypothesize it is possible that management is waiting on the prostate SRE dataexpected to come very soon in Q1 — to include this, too, as part of theresubmission so that FDA has all three SRE studies in hand as part of therequested "safety update."

• Fundamentals still intact. We believe an important catalyst is the prevention ofbone mets, not in Street estimates. This study is a wild-card but provides goodrisk/reward, in our view.

Robert C. Wetenhall, Jr. (Analyst)(212) 618-3251; [email protected]


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CLOSE 59.65

LO-04APR08 37.92

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135.00

180.00

225.00

Rel. S&P 500 HI-16JAN09 263.67LO/HI DIFF 234.95%

CLOSE 131.90

LO-28MAR08 78.72

Adj EPS Prev. P/AEPS2009A 4.22↑ 3.75 14.1x2010E 5.15↓ 5.52 11.6x


Apollo Group, Inc. (NASDAQ: APOL; 59.65)


UnderperformAverage Risk66.00

Reducing FY10 Estimates and Reiterating Underperform Rating• We are reducing our FY10E EPS estimate to $5.15 vs. consensus of $5.25.• Good Company Faces Multiple Issues: Our Underperform recommendation

reflects concerns about slower enrollment growth and the persistence ofregulatory issues. The latter includes an ongoing and open-ended informalinquiry by the SEC into APOL's revenue recognition practices and theDepartment of Education's discovery of minor infractions related to the timingof Title IV refunds owed to the government.

• Intriguing Valuation Offset by Enrollment Concerns and RegulatoryOverhang: Our CY10E EPS estimate of $5.47 implies a forward P/E of 10.9xcompared with a peer group average multiple of 15.5x. We believe that the~30% discount is appropriate because it captures both regulatory concerns andfears of slower enrollment growth. For these reasons, we believe that otherstocks in the sector currently have better risk/reward characteristics thanAPOL.


13

Mark Sue (Analyst)(212) 428-6491; [email protected] Longobardi (Associate)(212) 618-3330; [email protected]


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CLOSE 9.67

LO-21NOV08 5.49

20000400006000080000

100000120000


60.00

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90.00

105.00 Rel. S&P 500 HI-05OCT07 105.11HI/LO DIFF -49.03%

CLOSE 67.43

LO-21MAR08 53.57

EPS (Op) Prev. P/E2008A 5.02 13.6x2009E 4.43↑ 4.15 15.4x2010E 4.97↑ 4.91 13.7x2011E 6.41 10.6x

All market data in USD; all financial data in SEK.

LM Ericsson Telephone Company (NASDAQ: ERIC; 9.67)


Sector PerformAbove Average Risk12.00

Digesting Canadian Bacon• Ericsson's 4Q09 may benefit from year-end seasonality and a contribution

from the Sprint managed services. Nortel's CDMA/LTE assets maycontribute approximately half of a quarter as well. Overall, our view is thatwireless infrastructure is a late-stage recovery segment and we remain neutralon the shares as the outlook in developed regions remains limited and webelieve new 3G wins in India may come at major price concessions. The newyear may bring top-line improvements at ST Ericsson and Sony Ericsson, yetthe near-term metrics may be more bottom-line centric as both companies workto reduce their operating loss.

Mark Sue (Analyst)(212) 428-6491; [email protected] Longobardi (Associate)(212) 618-3330; [email protected] Abramsky (Analyst)(416) 842-7840; [email protected]


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35.0040.00

AS O N2007




CLOSE 12.92

LO-13MAR09 8.47

50000

100000

150000

200000


60.00

75.00

90.00

105.00120.00 Rel. S&P 500 HI-22FEB08 122.05

HI/LO DIFF -58.52%

CLOSE 50.98

LO-18DEC09 50.63

EPS (Op) Prev. P/E2008A 1.33 6.7x2009E 0.58 15.4x2010E 0.70↑ 0.69 12.7x2011E 0.85 10.5x

All market data in USD; all financial data in EUR.

Nokia Corporation (NYSE: NOK; 12.92)


OutperformAbove Average Risk16.00

Choppy in the Middle• We're reducing our forward unit expectations for Nokia as the company works

to reinvigorate its product portfolio. Nokia is making a big bet on Symbian andplans to launch a slew of new devices this year; we believe development istaking some time with full availability of new smartphones expected later in2010. For 1Q10, our unit expectation is 105M (-14% QoQ), while ourconsensus 2Q10 units decline from 110M to 108M (+3% QoQ). Full-year2010E units are 470M (+10% YoY). Stock is now trading at 13x our CY10EEPS. Nokia may lose incremental share in 1Q10 and 2Q10 before reversingthis trend.


14

Jonathan Atkin (Analyst)(415) 633-8589; [email protected] Allen, CFA (Analyst)(416) 842-3806; [email protected] Hyun (Associate)(415) 633-8581; [email protected] Coleman (Analyst)(415) 633-8579; [email protected]


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AS O N2007




CLOSE 31.91

LO-10OCT08 23.07

50000

100000

150000


100.00

110.00

120.00

130.00140.00 Rel. S&P 500 HI-06MAR09 141.13

LO/HI DIFF 54.04%

CLOSE 99.29

LO-18APR08 91.62

EPS (Op) Prev. P/E2007A 2.39 13.3x2008A 2.54 12.6x2009E 2.40↓ 2.44 13.3x2010E 2.30↓ 2.48 13.9x


Verizon Communications (NYSE: VZ; 31.88)


OutperformAbove Average Risk33.00

Fine-Tuning Estimates• Updating estimates to reflect margin impacts on EPS and wireline and Alltel

trust divesture impact on 2010 EPS.

Industry CommentsSeth Weber (Analyst)(212) 618-7545; [email protected]

Vlad Bystricky (Associate)(212) 618-3280; [email protected]


Ag Connect Expo Highlights

Cautious Optimism at Ag Connect Expo

• We attended the inaugural AG Connect Expo in Orlando, FL on Jan 12(event ongoing), which included meetings with representatives from AGCO,Deere, CNH and other industry participants.

• We would characterize the tone of most of our discussions as cautiouslyoptimistic, which is consistent with good recent equipment sales reports out ofN. America and Brazil (we believe Europe remains relatively weaker),including some positive commentary regarding order trends for some larger N.American equipment. Favorable crop fundamentals, lower farmer input costs, asomewhat better/less bad dairy/livestock environment, and the extension ofBrazil financing programs were all cited as positive factors.

• It remains to be seen whether fallout from the surprising January 12WASD report tempers farmer sentiment going forward, as significantlystronger-than-expected corn production and yield projections contributed tobroad weakness in key crop prices.

Scott Hanold, CPA (Analyst)(512) 708-6354; [email protected]

Chad Potter, CFA (Associate)(512) 708-6349; [email protected]


Bakken Shale Weekly: January 12, 2010

Progress Report on the North Dakota Bakken

• Completion Activity. Results from 12 Bakken wells were released fromconfidential status with the state with reported IPs averaging 677 boe/d. Nonew Three Forks-Sanish (TFS) well results were released this week.

• CLR reported five TFS well IPs that averaged 1,260 boe/d and one Bakken testrate of 694 boe/d.

• NFX reported a Bakken IP of 1,300 boe/d.• Early 4Q09 Bakken IP rates are up 90% sequentially and up 96%

year-over-year. 4Q09 TFS well IP rates are up 30% sequentially and up 82%


15

year-over-year.• Permit Activity. The NDIC issued 15 permits for wells located in the greater

Mountrail County area and 14 wells outside the area.

• Rig Activity. The North Dakota rig count increased by 3 to 78 rigs.

• Other Bakken News. CLR's Mercer County well was unsuccessful.

Gerard Cassidy (Analyst)(207) 780-1554; [email protected]

Jake Civiello (Associate)(207) 780-1554; [email protected]


East Coast Banks 4Q09 Earnings Outlook; "On the Cusp ofChange"

Will "Kitchen Sinks" Dominate the Headlines?

We anticipate the commercial banks in our universe will report net interest margin (NIM)expansion due to a steeper yield curve, widening asset/liability spreads and lesscompetition from the shadow banking system.

In our view, "Kitchen Sink" strategies will drive net charge-offs to elevated levels that willnecessitate higher levels of loan loss provisions, which will lead some banks in ourcoverage universe to report losses and others to report lower than normal profitability.Partially offsetting positive margin implications will likely be the continued rise innonperforming assets leading to the reversal of interest accruals.

The rate of growth in NPAs will be the Achilles' heel for 4Q09 results, in our view. Wewould not be surprised if some banks announce that NPAs have peaked in the quarter.

Stuart Bush (Analyst)(512) 708-6384; [email protected]

Sandeep Ayyappan (Associate)(512) 708-6386; [email protected]

Nick Hyslop (Analyst)020-7653-4600; [email protected]

Andrew Dunn (Associate)020-7029-7877; [email protected]


Global Clean Energy Directions

RBC's Daily Snapshot

The S&P Global Clean Energy Index declined 2.4% on a weak day for the equitymarkets. Solar stocks sold off with Evergreen Solar -6.7% and JA Solar -5.5%experiencing the sharpest losses. Ballard Power +3.2% continued rising on heavyvolume.

Seth Weber (Analyst)(212) 618-7545; [email protected]

Vlad Bystricky (Associate)(212) 618-3280; [email protected]


RBC Construction Contractor Survey, Vol. 2

Small Bump in Sentiment; Stimulus Expectations Waning

• Key takeaways: 1) We observed a small uptick in sentiment relative to ourprevious survey; 2) the majority of respondents that plan to supplement theirequipment fleets as conditions improve will do so via the rental channel; 3)optimism for the stimulus is waning.

• Bottom line: Survey results are consistent with our view that U.S. constructiontrends are likely to improve slowly; we look toward the back part of 2010 forsome improvement in activity and machinery demand, supported by abottoming of residential construction, some stimulus spending, stabilizing usedequipment prices, aging rental fleets, and low channel inventories. We expectoperators with earth-moving and infrastructure exposure to be among theearlier beneficiaries, and maintain Outperform ratings on Caterpillar and Terex,as well as RSC and United Rentals (although rental results are likely to remaintough near-term). Separately, Mueller Water should benefit from an increase inwater spending.

Neil Downey, CA, CFA (Analyst)(416) 842.7835; [email protected]

Tyler Bos (Associate)(416) 842-4123; [email protected]

Michael Markidis, CFA (Associate)(416) 842-7897; [email protected]

Real Estate Investment Trusts

Q1-2010 REIT Quarterly (Summary)

• Liquidity Is Back - REITs and REOCs raised $3.6B of equity and relatedcapital in 2009. $3.2B was issued in H2/09 alone. This activity has boostedaggregate liquidity to $4.4B (~12% of total debt).


16

All values in CAD unless otherwise noted. • Fundamentals: Looking Over The Valley - Encapsulating the 2010 outlookfor each major property sector in a "sound bite": office - deteriorating; retail -stable/soft; industrial - soft; multi-res - stable; and lodging - improving, yet at apotentially disappointing rate versus the severe downturn of 2009.

• Canada Performs Admirably - The S&P/TSX Capped REIT Index generateda 2009 total return of +55%, widely outpacing the TSX Index (+35%), U.S.REITs (+29%), Global REITs (+38%) and 10-year Canada's (-4%).

• Valuation: Multiples Climb Through The Average; Yield Spreads StillModestly Favourable To History - In short, we believe the sector is now a"yield play". The 7.3% AFFO yield is now 80bps below the long-term average.

Leon Esterhuizen (Analyst)(+44) 207 653-4154; [email protected]

Arnold van Graan (Associate)(+44) 207 653-4639; [email protected]

Yuen Low (Associate)(+44) 207 653-4647; [email protected]

All values in ZAR unless otherwise noted.

South African Gold Majors

Q4 CY2009 Earnings Outlook

We expect better results than seen in Q3 and these would likely indicate the South AfricanGold producers have become relatively attractive in terms of valuation. Gold Fields seemsto be the cheapest, or most discounted of the South African Majors and may well offer agood opportunity for a long-short trade going into the results (long GFI, short ANG).Weare looking for ANG to deliver ZAR 270cps (Q3 loss of ZAR 1319cps), GFI to give ZAR146cps (Q3 ZAR 89cps), Harmony around ZAR 56cps (from Q3 loss of ZAR 12cps) andDRDGOLD coming it at a loss of some ZAR 12cps (Q3 loss of ZAR 13cps) for Q4CY2009.

Investment Strategy ResearchMyles Zyblock, CFA (Analyst) (Analyst)(416) 842-7805; [email protected]

Kien Lim (Associate)(416) 842-8745; [email protected]

RBC Investment Strategy Weekly

Excess Capacity, Policy Settings & Earnings

Highlights from today's report:

• The economy is still operating under conditions of significant excesscapacity.

• A Fed rate hike might still be a long way off.• An initial rate hike is usually associated with the onset of curve flattening

and a modest equity market correction spanning the subsequent quarter.• Consumer and Financial stocks generally lag the benchmark when the US

10-year yield rises.• An upturn in global activity, firming domestic demand and high operating

leverage will combine to generate noticeable earnings improvement thisquarter.

• We see some pretty decent earnings gains beyond the current quarter.


17

In-Depth ReportsH. Fraser Phillips (Analyst)(416) 842-7859; [email protected]

Adam Schatzker (Analyst)(416) 842-7850; [email protected]

Robin Kozar (Analyst)(416) 842-7861; [email protected]

Lasan Johong (Analyst)(212) 428-6462; [email protected]

Geoff Breen (Analyst)(+61) 2 9033-3022; [email protected]

Chris Drew, CFA (Analyst)+61 2 9033 3060; [email protected]

David Haddad (Analyst)(+61) 2 9033-3071; [email protected]

Cailey Barker (Analyst)(+44) 207 653-4603; [email protected]

Leon Esterhuizen (Analyst)(+44) 207 653-4154; [email protected]

Des Kilalea (Analyst)(+44) 207 653-4538; [email protected]

Patrick Morton (Analyst)(+44) 207 002-2111; [email protected]

Global Mining Trends & Values

January 12, 2010

Commodity Price Performance:Metal prices were mixed last week, on average up 2.4%. Silver was the best performer up9.5%, followed by lead up 5.4%, gold up 3.7%, aluminium up 2.4%, copper up 1.4%, anduranium flat 0.0%. Nickel was the worst performer down 1.9%, followed by zinc down1.6%.

Mining Share Price Performance:Mining shares were up on average 11.0%. The best performing group was molybdenumup 30.0%, followed by zinc up 25.9%, iron ore up 13.7%, copper up 11.7%, mineral sandsup 9.6%, coal up 9.4%, the diversified group up 8.2%, uranium up 7.5%, nickel up 6.8%,and aluminium up 5.6%.

Valuation:Mining shares are now trading at a 4.9% premium to NAV at forward curve prices, versusa 15.2% premium one week ago.

Long/Short Metal Positions:RBC CM's proprietary data for the LME shows that the net long positions in copper,aluminium, zinc, nickel, and lead all increased last week.

Exchange Inventories:Total exchange inventories of aluminium decreased last week, while total inventories ofcopper, nickel, and zinc increased last week.


18

UPCOMING EVENTS

Jan 13-Jan 19, 2010MARKETING / CONFERENCES / EVENTS

WednesdayJanuary 13

ThursdayJanuary 14

FridayJanuary 15

MondayJanuary 18

TuesdayJanuary 19

New York/Mid-Atlantic■ Dan Perlin■ Pembina PipelineIncome Fund■ Mahesh Sanganeria■ CEVA Inc.■ Novellus Systems,Inc.

■ Dan Perlin■ Mahesh Sanganeria■ Daniel Meron

■ Seth Weber ■ Canadian EnergyServices

Boston■ Seth Weber ■ Gluskin Sheff &

AssociatesMid-West

■ Ed AaronWest Coast

■ Jon Atkin/DaveColeman

South East■ Mark Dwelle ■ Mark Dwelle ■ Mark Dwelle

Toronto/Montreal■ New Year Preview2010■ Canadian Bank CEOPre Conference Dinner■ Mike Harvey &Fergal Kelly■ Robert Sluymer■ Jason Gere■ Pembina PipelineIncome Fund■ Robert Breza■ Lasan Johong■ GoldminexResources Ltd■ Greg Pardy■ Al Stanton■ Scott Hanold■ Robert Kwan■ Kurt Hallead

■ RBC Canadian BankCEO Conference■ New Year Preview2010■ Mike Harvey &Fergal Kelly■ Glenn Novarro■ Scot Circcarelli■ Robert Sluymer■ Amit Daryanani■ Jason Gere■ Robert Breza■ Irene Nattel■ Premier Gold Mines

■ New Year Preview2010■ Mike Harvey &Fergal Kelly■ Glenn Novarro■ Jason Kantor■ Stuart Bush■ Robert Kwan■ Al Stanton■ Irene Nattel■ Brian Jackson■ Premier Gold Mines■ Fraser Phillips■ Stephen Walker■ Michael Curran■ Adam Schatzker

■ New Year Preview2010■ Fai Lee

Europe/Asia■ REITS■ UIC■ Uranium InvestmentCorp

■ REITS■ UIC■ Uranium InvestmentCorp■ Extract

Please contact your Sales Representative for additional information on the events listed above.


19

Required Disclosures

Non-U.S. Analyst Disclosure

Albert Maierovits (i) is not registered/qualified as a research analyst with the NYSE and/or FINRA and (ii) may not be associatedpersons of the RBC Capital Markets Corporation and therefore may not be subject to FINRA Rule 2711 and NYSE Rule 472restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Geoff Breen, Adam Schatzker, David Haddad, Des Kilalea, Cailey Barker, Leon Esterhuizen, and Chris Drew, CFA (i) are notregistered/qualified as research analysts with the NYSE and/or FINRA and (ii) may not be associated persons of the RBC CapitalMarkets Corporation and therefore may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications witha subject company, public appearances and trading securities held by a research analyst account.

Nick Hyslop and Andrew Dunn (i) are not registered/qualified as research analysts with the NYSE and/or FINRA and (ii) may not beassociated persons of the RBC Capital Markets Corporation and therefore may not be subject to FINRA Rule 2711 and NYSE Rule472 restrictions on communications with a subject company, public appearances and trading securities held by a research analystaccount.

Owen Martin (i) is not registered/qualified as a research analyst with the NYSE and/or FINRA and (ii) may not be associated personsof the RBC Capital Markets Corporation and therefore may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions oncommunications with a subject company, public appearances and trading securities held by a research analyst account.

Tyler Bos and Michael Markidis, CFA (i) are not registered/qualified as research analysts with the NYSE and/or FINRA and (ii) maynot be associated persons of the RBC Capital Markets Corporation and therefore may not be subject to FINRA Rule 2711 and NYSERule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analystaccount.

Yuen Low, Leon Esterhuizen, and Arnold van Graan (i) are not registered/qualified as research analysts with the NYSE and/or FINRAand (ii) may not be associated persons of the RBC Capital Markets Corporation and therefore may not be subject to FINRA Rule 2711and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by aresearch analyst account.

Conflicts Disclosures

This product constitutes a compendium report (covers six or more subject companies). As such, RBC Capital Markets chooses toprovide specific disclosures for the subject companies by reference. To access current disclosures for the subject companies, clientsshould refer to http://www7.rbccm.com/GLDisclosure/PublicWeb/DisclosureLookup.aspx?EntityID=1 or send a request to RBC CMResearch Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower, Toronto, Ontario M5J 2W7.

The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including totalrevenues of the member companies of RBC Capital Markets and its affiliates, a portion of which are or have been generated byinvestment banking activities of the member companies of RBC Capital Markets and its affiliates.

Distribution of Ratings

For the purpose of ratings distributions, regulatory rules require member firms to assign ratings to one of three rating categories - Buy,Hold/Neutral, or Sell - regardless of a firm's own rating categories. Although RBC Capital Markets' ratings of Top Pick/Outperform,Sector Perform and Underperform most closely correspond to Buy, Hold/Neutral and Sell, respectively, the meanings are not the samebecause our ratings are determined on a relative basis (as described above).

Distribution of RatingsRBC Capital Markets, Equity Research

Investment BankingServ./Past 12 Mos.

Rating Count Percent Count Percent

BUY[TP/O] 584 49.30 180 30.82HOLD[SP] 531 44.80 121 22.79SELL[U] 71 6.00 4 5.63


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Conflicts Policy

RBC Capital Markets Policy for Managing Conflicts of Interest in Relation to Investment Research is available from us on request. Toaccess our current policy, clients should refer tohttps://www.rbccm.com/global/file-414164.pdfor send a request to RBC CM Research Publishing, P.O. Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Tower,Toronto, Ontario M5J 2W7. We reserve the right to amend or supplement this policy at any time.

Dissemination of Research and Short-Term Trading Calls

RBC Capital Markets endeavours to make all reasonable efforts to provide research simultaneously to all eligible clients, havingregard to local time zones in overseas jurisdictions. RBC Capital Markets' research is posted to our proprietary websites to ensureeligible clients receive coverage initiations and changes in rating, targets and opinions in a timely manner. Additional distribution maybe done by the sales personnel via email, fax or regular mail. Clients may also receive our research via third party vendors. Pleasecontact your investment advisor or institutional salesperson for more information regarding RBC Capital Markets research.RBC Capital Markets also provides eligible clients with access to a database which may contain Short-Term trading calls on certain ofthe subject companies for which it currently provides equity research coverage. The database may be accessed via the followinghyperlink https://www2.rbccm.com/cmonline/index.html. The information regarding Short-Term trading calls accessible through thedatabase does not constitute a research report. These Short-Term trading calls are not formal ratings and reflect the research analyst'sviews with respect to market and trading events in the coming days or weeks and, as such, may differ from the price targets andrecommendations in our published research reports reflecting the research analyst's views of the longer-term (one year) prospects ofthe subject company. Thus, it is possible that a subject company's common equity that is considered a long-term 'sector perform' oreven an 'underperform' might be a Short-Term buying opportunity as a result of temporary selling pressure in the market; conversely,a subject company's common equity rated a long-term 'outperform' could be considered susceptible to a Short-Term downward pricecorrection.

Analyst Certification

All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of thesubject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly orindirectly, related to the specific recommendations or views expressed by the responsible analyst(s) in this report.

Disclaimer

RBC Capital Markets is the business name used by certain subsidiaries of Royal Bank of Canada, including RBC Dominion Securities Inc., RBC Capital MarketsCorporation, Royal Bank of Canada Europe Limited and Royal Bank of Canada - Sydney Branch. The information contained in this report has been compiled by RBCCapital Markets from sources believed to be reliable, but no representation or warranty, express or implied, is made by Royal Bank of Canada, RBC Capital Markets, itsaffiliates or any other person as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute RBC Capital Markets'judgement as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Nothing in this reportconstitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and has been preparedwithout regard to the individual financial circumstances and objectives of persons who receive it. The investments or services contained in this report may not besuitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. Thisreport is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed,and a loss of original capital may occur. RBC Capital Markets research analyst compensation is based in part on the overall profitability of RBC Capital Markets, whichincludes profits attributable to investment banking revenues. Every province in Canada, state in the U.S., and most countries throughout the world have their own lawsregulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, the securitiesdiscussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act assecurities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in thatjurisdiction. To the full extent permitted by law neither RBC Capital Markets nor any of its affiliates, nor any other person, accepts any liability whatsoever for anydirect or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copiedby any means without the prior consent of RBC Capital Markets.

Additional information is available on request.

To U.S. Residents:This publication has been approved by RBC Capital Markets Corporation (member FINRA, NYSE), which is a U.S. registered broker-dealer and which acceptsresponsibility for this report and its dissemination in the United States. Any U.S. recipient of this report that is not a registered broker-dealer or a bank acting in a brokeror dealer capacity and that wishes further information regarding, or to effect any transaction in, any of the securities discussed in this report, should contact and placeorders with RBC Capital Markets Corporation.To Canadian Residents:This publication has been approved by RBC Dominion Securities Inc.(member IIROC). Any Canadian recipient of this report that is not a Designated Institution inOntario, an Accredited Investor in British Columbia or Alberta or a Sophisticated Purchaser in Quebec (or similar permitted purchaser in any other province) and thatwishes further information regarding, or to effect any transaction in, any of the securities discussed in this report should contact and place orders with RBC DominionSecurities Inc., which, without in any way limiting the foregoing, accepts responsibility for this report and its dissemination in Canada.To U.K. Residents:This publication has been approved by Royal Bank of Canada Europe Limited ('RBCEL') which is authorized and regulated by Financial Services Authority ('FSA'), inconnection with its distribution in the United Kingdom. This material is not for general distribution in the United Kingdom to retail clients, as defined under the rules ofthe FSA. However, targeted distribution may be made to selected retail clients of RBC and its affiliates. RBCEL accepts responsibility for this report and itsdissemination in the United Kingdom.


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To Persons Receiving This Advice in Australia:This material has been distributed in Australia by Royal Bank of Canada - Sydney Branch (ABN 86 076 940 880, AFSL No. 246521). This material has been preparedfor general circulation and does not take into account the objectives, financial situation or needs of any recipient. Accordingly, any recipient should, before acting onthis material, consider the appropriateness of this material having regard to their objectives, financial situation and needs. If this material relates to the acquisition orpossible acquisition of a particular financial product, a recipient in Australia should obtain any relevant disclosure document prepared in respect of that product andconsider that document before making any decision about whether to acquire the product.To Hong Kong Residents:This publication is distributed in Hong Kong by RBC Investment Services (Asia) Limited and RBC Investment Management (Asia) Limited, licensed corporationsunder the Securities and Futures Ordinance or, by Royal Bank of Canada, Hong Kong Branch, a registered institution under the Securities and Futures Ordinance. Thismaterial has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of any recipient. Hong Kong personswishing to obtain further information on any of the securities mentioned in this publication should contact RBC Investment Services (Asia) Limited, RBC InvestmentManagement (Asia) Limited or Royal Bank of Canada, Hong Kong Branch at 17/Floor, Cheung Kong Center, 2 Queen's Road Central, Hong Kong (telephone numberis 2848-1388).To Singapore Residents:This publication is distributed in Singapore by RBC (Singapore Branch) and RBC (Asia) Limited, registered entities granted offshore bank status by the MonetaryAuthority of Singapore. This material has been prepared for general circulation and does not take into account the objectives, financial situation, or needs of anyrecipient. You are advised to seek independent advice from a financial adviser before purchasing any product. If you do not obtain independent advice, you shouldconsider whether the product is suitable for you. Past performance is not indicative of future performance.

®Registered trademark of Royal Bank of Canada. RBC Capital Markets is a trademark of Royal Bank of Canada. Used under license.Copyright © RBC Capital Markets Corporation 2010 - Member SIPC

Copyright © RBC Dominion Securities Inc. 2010 - Member CIPFCopyright © Royal Bank of Canada Europe Limited 2010

Copyright © Royal Bank of Canada 2010All rights reserved


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