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Impact of the Current Crisis on Corporations

Impact of the Current Crisis on Corporations. A Sample Presentation Tailored to Non-Finance Audience. February 2009. Explaining Current Economic Conditions to a Non-Finance Audience.

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Impact of the Current Crisis on Corporations

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  1. Impact of the Current Crisis on Corporations A Sample Presentation Tailored to Non-Finance Audience February 2009

  2. Explaining Current Economic Conditions to a Non-Finance Audience As executives seek to communicate company conditions and new initiatives to employees and other stakeholder audiences, they need a succinct way to explain the business environment.  In response to a member request, the Corporate Executive Board prepared the following slides to provide a market context for CEO presentations to employees. The presentation incorporates key economic data and forecasts from the following CEB reports that are updated on a regular basis: Monthly Dashboard of Leading U.S. Economic Indicators Monthly Planning Assumption Guidance Report Daily Capital Markets Review 2008 Capital Markets Recap To subscribe to these reports, please contact us at 571-303-5235. Please feel free to adapt and use these pages in your own presentations, and don’t hesitate to contact us for further support.

  3. …caused a crisis of confidence in bank solvency. Collapsing real estate values (which underpin mortgage security values)… Total Market Value: Global Banks** (Q2 2007 - January 20, 2009, $ billions) Case-Shiller Home Price Index* $1,726 15 leading global banks have experienced a 71% decline in market value since Q2 2007. $502 Market Value as of Q2 2007, $Bn Market Value as of January 20, 2009, $Bn * The Case-Shiller Index is a composite index comprised of home price changes within the top 20 metropolitan markets. ** Global banks included in the calculation are: Morgan Stanley, RBS, Deutsche Bank, Credit Agricole, Societe Generale, Barclays, BNP Paribas, Unicredit, UBS, Credit Suisse, Goldman Sachs, Santander, Citigroup, JP Morgan, HSBC Source: Bloomberg; Corporate Executive Board research, JP Morgan research.

  4. Deteriorating consumer confidence… …leads to a freefall in Consumer spending. Consumer Confidence Index U.S. Real Personal Consumption Expenditure YoY%* Consumer Confidence fell 15% in December. Personal expenditures have been shrinking on a year-over-year basis since July. *Price chained to 2000 dollars. Source: Bloomberg; Corporate Executive Board research.

  5. The consumer staples sector has outperformed the market… …while 2009 growth expectations for the sector remain resilient. Change in Adjusted Stock Price %* Consumer Staples Sector vs. S&P 500 Estimated 2009 Revenue Growth** Consumer Staple Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  6. The healthcare sector has outperformed the market… …as 2009 growth expectations for the sector remain resilient. Change in Adjusted Stock Price %* Healthcare Sector vs. S&P 500 Estimated 2009 Revenue Growth** Healthcare Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  7. The telecom services sector has performed close to the market… …while 2009 growth expectations remain resilient. Change in Adjusted Stock Price %* Telecom Services Sector vs. S&P 500 Estimated 2009 Revenue Growth** Telecom Services Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  8. The utilities sector has outperformed the market … …as 2009 growth expectations remain resilient. Change in Adjusted Stock Price %* Utilities Sector vs. S&P 500 Estimated 2009 Revenue Growth** Utilities Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  9. The consumer discretionary sector has tracked the performance of the general market… …while 2009 growth expectations are slightly higher than the market. Change in Adjusted Stock Price %* Consumer Discretionary Sector vs. S&P 500 Estimated 2009 Revenue Growth** Consumer Discretionary Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  10. The materials sector has underperformed the market… …as 2009 growth expectations are slightly weaker than the market. Change in Adjusted Stock Price %* Materials Sector vs. S&P 500 Estimated 2009 Revenue Growth** Materials Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  11. The industrials sector has tracked the performance of the market… …while 2009 growth expectations are higher than the market. Change in Adjusted Stock Price %* Industrials Sector vs. S&P 500 Estimated 2009 Revenue Growth** Industrials Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  12. The technology sector has performed close to the market … …while 2009 growth expectations are higher than the market. Change in Adjusted Stock Price %* Technology Sector vs. S&P 500 Estimated 2009 Revenue Growth** Technology Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  13. The energy sector has underperformed the market … …as 2009 growth expectations are significantly weaker than the market. Change in Adjusted Stock Price %* Energy Sector vs. S&P 500 Estimated 2009 Revenue Growth** Energy Sector vs. non-financial S&P 500 *Close price adjusted for dividends and splits.** Revenue Growth based on equity analyst projections. Source: Bloomberg; Corporate Executive Board research.

  14. The following reports also contain data and forecasts that may help in preparing your presentations. Monthly Dashboard of Leading U.S. Economic Indicators Monthly Planning Assumption Guidance Report Daily Capital Markets Review 2008 Capital Markets Recap Corporate Finance Division Quantitative Research Team David Lee – Analyst Jacqueline Stromberg – Analyst Bob Sanders – Senior Analyst Jian Chen – Project Manager Oleg Polishchuk – Project Manager Brian Powilatis – Managing Director Michael Griffin – Managing Director Scott Bohannon – General Manager Please contact the quantitative research team with any questions or comments at (571) 303-6259. Professional Services Note The Quantitative Research Team has worked to ensure the accuracy of the information it provides to the Corporate Executive Board members. This project relies upon data obtained from many sources, however, and the Quantitative Research Team cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the Quantitative Research Team is not engaged in rendering legal, accounting, or other professional services. Its projects should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from any errors or omissions in their reports, whether caused by Corporate Executive Board or its sources.

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