Global Utility White Paper CONFIDENTIAL fundamentals that are supportive of higher natural gas prices; while we don’t expect a return to the commodity boom times of 2003-2007, a turn in trend will be very supportive of higher share prices. e Capex (ex-US) is Rebounding Post-Recession Capital spending precedes earnings, and utility capex (ex-US) is rebounding after a recession-driven slowdown. In particular, transmission spending is accelerating in Europe (Germany, Spain, France) and Asia while remaining firm in the US. Transmission capex not only enhances system reliability but also system efficiency, by enabling the delivery of the most efficient generation to meet demand. Many transmission grids face bottlenecks because of the inclusion of intermittent renewable generation in areas with ample wind and solar resources but located far from customers. Companies such as Northeast Utilities (US), National Grid (UK) and Elia (Belgium/Germany) are prime beneficiaries of this transmission capital spending, along with equipment providers such as ABB (Switzerland). In addition, many global utilities will be viewed as back-door beneficiaries of the shale gas boom globally given the substantial amount of capex required to build new or upgrade existing infra-structure. US utilities are building much of the infrastructure to export gas out of the shale basins (Dominion, NiSource) and are building LNG liquefaction facilities (Dominion, Sempra) that are at the front of the queue for US Department of Energy approval. Several European utilities, such as GDF Suez (Belgium/France) and Gas Natural (Spain), and Asian utilities such as Kunlun Energy and ENN Energy (China; note that China has 2x the shale gas reserves of the US) are exposed to LNG infrastructure spending. Finally, because of emerging markets’ growth rates and a higher intensity of energy use, emerging market utilities will benefit from infrastructure spending across the entire utility value chain. 5. Substantial Aloha