Global Utility White Paper CONFIDENTIAL Global Sector Positioning Tech Industrials Insurance Pharma Discretionary Materials Energy Banks Staples % : Substantially Telecoms underweight Utilites ~ -40 -35 -30 -25 -20 15 -10 § +0 +5 +10 +16 #20 425 +30 435 <= underweight /! overweight => Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013 Net % Overweight Global Utilities sass 20 1 f w7o TAMIA ah ATH the | sty | III | vo | Me underweight vs mean nM AML AA E*20 é|| | iy! WNT AH = i HHH WH HI | | ba4a0 a0 P | fy - 1 ’ "| Wi | ; Red circle = a04 ‘al } -1o underweight vs mean | crossing below | my F oo | 10 underweight &O J | ‘ie } | : 2Q0O5 q 2004 y 2006 i 2006 r 2007 y O08 y OOD ] 2010 7 2zO11 7 2012 r 2013 it Net % Overweight Wtilities Potentially Underowned ~— Sector Relative to VWorldacrR HH SCALE) Potentially Qverowned Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013 The sector has been not only a substantial long-only underweight, but also a wholesale short for many macro/generalist hedge funds. However, it is very interesting to note that an inflection point appears to have occurred in the middle of 2012, with hedge funds increasing their net exposure to the global utility sector after a long period of reducing net. The long/short ratio of utility stocks held by hedge funds fell from 3.0x in Jan 08 to about 1.7x in Jan 12 (4 years), but has since risen by 60% to 2.7x, which is more than twice the increase for hedge funds’ overall net exposure during the same period (source: Goldman Sachs). Based on discussions with the Street, it appears that this short exposure has been expressed via ETFs, regional utility indices or large bellwether index utility proxies. Individual name crowdedness has continued to remain at a low level (e.g., utilities rarely show up Goldman Sachs Hedge Fund VIP list — ticker GSTHHVIP). Today, utilities account for the lowest in gross assets held of the 10 global sectors. (Source: Goldman