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Home My WebLink AboutDocumentation_Pension Public Safety_Tab 03_05/05/2008Village of Tequesta Public Safety Officers' Pension Fund 1St Quarter 2008 Strategy Review Presented by: Andy Holtgrieve Managing Partner Andy@rockwoodcapital. com ROCKW OOD CAPITAL ADVISORS 721 Emerson Road, Suite 565 St. Louis, Missouri 63141 (888) 962-8336 (toll-free) (314) 962-1254 (fax) ' Te uesta Public Safet Officers' Investment Polic q Y y ii ii 1 .. ' The Board recognizes that the obligations of the Fund are long-term and that the investment policy should be made with a view toward performance and return over a number of years. The general investment objective, then, is to obtain a reasonable total rate of return -defined as interest and dividend income plus realized and unrealized ' capital gains or losses -commensurate with the Prudent Investor Rule and any other applicable statute. Reasonable consistency of return and protection of assets against the inroads of inflation are paramount. However, the volatility of interest rates and securities markets make it necessary to judge results within the context of several years rather than over short periods of two years or less. The performance of the total Fund will be measured for rolling three and five year periods and compared to the return of a portfolio comprised of 60% S&P 500 Stock Index and 40% Lehman Brothers Intermediate Government/Credit Bond Index. On a relative basis, performance for the combined portfolio over three to five year periods is expected to be in the 40% of the Mobius Universe. Additionally, on an absolute basis, performance for the combined portfolio over three to five year periods is expected to meet or exceed the actuarial earnings assumption of 8%. All investments made or held in the fund shall be limited to, obligations issued by the United States Government or guaranteed as to principal and interest by the US Govt. or by an agency of the US Govt. Additionally, stocks, commingled funds administered by national or state banks, mutual funds and bonds or other evidence of indebtedness, issued or guaranteed by a corporation organized under the laws of the United States, any state or organized territory of the United States or the District of Columbia. Fixed income securities are to be ranked Investment Grade by S & P or Moody's and 90% of the equities shall be rated by a major rating service in the top three quality grades. Not more than 5% of the Fund's assets shall be invested in the common stock, capital stock or debt of any one issuing company, nor shall the aggregate investment in any one issuing company exceed 5% of the outstanding capital stock of the company. Foreign securities shall not exceed 10% of the value at cost of the fund. ~ ROCRWOOD CAPITAL ADVISORS Tequesta Public Safety Officers' Pension Fund First Quarter 2008 Tota I Fun d Portfolio Summary Portfolio Summary Fixed Income Total Fund Performance short-Term ~ ~ Funds Tequesta PS -5.6% -0.1% 7% Policy (60/40) -4.4% +0.5% (Policy 60% S&P 500 and 40% LBIN) Equities 54% ROCRWOOD CAPITAL ADVISORS Change in Market Value ~ Tequesta Public Safety Officers' Pension Fund Equity -First Quarter 2008 Is it Over Yet? With the challenges of 2007 spilling over into the first quarter of 2008, the question on investors' minds is: Is it over yet? The equity market, as represented by the S&P 500, had one of its worst quarters since the bear market setback earlier this decade, declining 9.4%. The average diversified equity fund sank 10.6%. The S&P 500 has experienced five consecutive months of losses (-16% over that period) for the first time since October 1990. The continued uncertainty surrounding the magnitude and impact of the sub-prime mortgage crisis has roiled the equity markets leading to heightened volatility and significant declines for all major equity benchmarks. For those companies directly involved in sub-prime investments, the news could not have been worse. Mortgage foreclosures have led to unprecedented losses for many of Wall Street's largest firms. The run on Bear Stearns' assets led to a liquidity freeze requiring swift federal intervention and a private sector bailout. 1 Within the Equity Portfolio, we entered 2008 most heavily concentrated in industrial, technology, healthcare, and consumer staples issues. A seemingly good mix without much exposure to the most distressed parts of the market, financials and consumer discretionary. However, as speculation grew that the economy could be headed for a full blown recession (a result ' of the collapsing housing market); it was obvious that there would be few places to "hide." Not uncommon, the market typically takes everything down before hitting a bottom. There is some good news, however. The Fed has been highly responsive to the current crisis. The aggressive rate cuts (three totaling 2.0%) and unusual accommodations at the discount window have served both to underscore the severity of the problem and to instill confidence that our financial plumbing is still functioning. Historically, the equity markets are higher twelve months after such aggressive easing by the Fed. There are already signs that the equity markets want to mend and move past this crisis. After all, the equity markets are a futures market, and investors are beginning to look for signs that a bottom has been reached. ' The first quarter was difficult, but the basic tenets for owning the companies we own have not changed. While in our normal course of disciplined investing we will be forced to downgrade some of our holdings, the vast majority remain in solid up trends (consumer staples and utilities). We have weathered these periods before. We will make adjustments as necessary to ~ respond to market shifts, and it is our investment discipline that will lead us to superior returns in the long-term. Contravisory Research & Management Corp. is a registered investment adviser and equity sub-adviser to Rockwood Capital Advisors, LLC. & Performance 15% 10% 5% 0% -5% -10% -15% 1st Qtr. One 2008 Year Tequesta Public Safety 8.0% 6.7 3.6% 3.0% -9.5% -10.9% Two Since Inception Years (5/1 /05) S&P 500 ROCKWOOD CAPITAL ADVISORS 3 Equity Portfolio First Quarter 2008 Style Box Top Ten Holdings 1. Praxair Inc. 3.3% 2. Bayer AG 3.2% 3. United States Steel 3.1% 4. Stericycle Inc. 2.9% 5. Precision Castpart 2.9% 6. Intl Business Machines 2.8% 7. Lockheed Martin Co. 2.8% 8. Smith & Nephew Plc. 2.8% 9. PPL Corp. 2.8% 10. Thermo Fisher Scientific 2.8% Five Best Impact 1. Echostar Holding Corp. +63.6% 2. Smith & Nephew Plc. +14.9% 3. McDermott Intl. +10.1 4. Koninklijke +6.9% 5. Intl Business Machines +6.9% Val Cr Grvv Large Cap - 57.3% Mid Cap - 42.7% Small Cap - 0% Average Market Cap $45.9 billion Median Market Cap $21.1 billion Sector Allocation Producer Durables 8% Technology Mate 12 orgy Utilities 5% Health Car 24% Five Worst Impact R's 1. VCA Antech Inc. -38.2% 2. Waters Corp. -29.6% 3. Precision Castparts -26.4% 4. Cigna Corp. -24.4% 5. Dell Inc. -21.5% 'ROCRWOOD CAPITAL ADVISORS Characteristics Finance Cons. Staples 6% 17% Equity Transactions First Quarter 2008 Sold Jan General Motors Corp. Jan Volvo Feb Dish Network Corp. Feb Echostar Holding Corp. Mar Boeing Co. Mar International Flavor & Fragrances Mar Schering Plough Corp. Mar Cisco Systems Inc. Mar Delllnc. Bought Jan Schlumberger Ltd. - Lg Cap. Energy, Oil & Gas Equip. & Services Co. Jan COCA Cola Co. - Lg Cap, Consumer Staples. Worlds largest soft drink Co. Feb Aetna InC. - Lg Cap, Health Care, Managed health care Co. Mar Freeport - McMoran Copper - Lg Cap. Materials -metals & mining Co. Mar Chevron Corp. - Lg Cap, Energy. Integrated oiJ ~ gas Co. Mar Pepisco Inc. - Lg Cap. Consumer Staples, Major rntl. food & beverage Co. Mar MCDonalds Corp. - Lg Cap, Cons. Disc., Largest fasf-food rest. Co. rn world Mar McDermott Intl. -Mid Cap, Indus. Conglomerate, Serving energy & pwr. Indus. 15t Qtr 2008 Commissions paid to Lynch, Jones & Ryan $446 ROCRWOOD CAPITAL ADVISORS ~~ 5 Equity Analysis and Attribution 1 First Quarter 2008 Sector Allocation 24% 20% 16% 12% 8% 4% 0% -4 -8 -12 °/ o I Di tribution ' Stye s 40% 35% 30% 25% 20% 15% 10% 5% 0% -5 -10% ~ Rockwood 31.8 ~ Russell 3000 24.7 23 6 24.9 . Relative 19 2 18.9 Pertormance 10.9 9.8 9.0 8.1 4.3 4.7 4 3.9 3 ~- ' . 2.8 0.0 0.0 0.0 Value Core Growth Value Core Growth Value Core Growth Large Cap Mid Cap Small Cap ROCKWOOD CAPITAL ADVISORS 6 ' E uit Holdin s -March 31, 2008 N Y ~ i~ ,. .. ... -- Cash 245,101 1.00 245,101 1.00 245,101 9.7 1.0 2,451 NA AET AETNA INC 1,090 53.48 58,298 42.09 45,878 1.8 0.1 44 0.85 ~ BUD ANHEUSER BUSCH COS 1,200 47.30 56,762 47.45 56,940 2.3 2.8 1,584 0.79 T AT&T INC 1,700 34.20 58,146 38.30 65,110 2.6 4.2 2,720 0.82 BAX BAXTER INTL INC 1,100 58.90 64,791 57.82 63,841 2.5 1.5 957 0.42 BAYRY BAYER A G 1,000 55.32 55,318 80.50 80,496 3.2 1.3 1,072 NA CVX CHEVRON CORP 620 85.34 52,910 85.36 52,923 2.1 2.7 1,438 0.66 CI CIGNACORP 1,160 54.84 63,617 40.57 47,108 1.9 0.1 46 0.94 KO COCA COLA CO 1,000 61.91 61,906 60.87 61,250 2.4 2.5 1,520 0.74 EBAY EBAY INC 1,791 34.47 61,733 29.84 53,443 2.1 0.0 - 0.76 EIX EDISON INTL 1,120 56.72 63,527 49.02 55,244 2.2 2.5 1,366 0.86 ENR ENERGIZER HLDGS IN 550 115.64 63,603 90.48 49,764 2.0 0.0 - 0.44 FCX FREEPORT-MCMORAN C 550 97.34 53,536 96.22 52,921 2.1 1.8 963 0.27 HNZ HEINZ H J CO 1,160 42.56 49,367 46.97 54,926 2.2 3.2 1,763 0.89 HPO HEWLETT PACKARD CO 1,485 33.46 49,682 45.66 67,924 2.7 0.7 475 0.62 IBM INTL BUSINESS MCHN 613 110.24 67,575 115.14 70,581 2.8 1.4 981 0.30 AHONY KONINKLIJKE AHOLD 4,260 16.09 68,543 14.90 63,453 2.5 1.3 801 NA LMT LOCKHEED MARTIN CO 710 64.92 46,095 99.30 70,503 2.8 1.7 1,193 0.17 LTR LOEWS CORP 1,630 25.16 41,007 40.22 65,559 2.6 0.6 408 0.15 MDR MCDERMOTT INTL 970 49.79 48,297 54.82 53,175 2.1 0.0 - NA MCD MCDONALDS CORP 950 52.86 50,213 55.77 52,982 2.1 2.7 1,425 0.64 MTD METTLER TOLEDO INT 632 102.87 65,012 97.12 61,380 2.4 0.0 - 0.80 PEP PEPSICOINC 700 70.14 49,099 72.20 50,540 2.0 2.1 1,050 0.86 PPL PPL CORP 1,500 34.50 51,752 45.92 69,383 2.8 2.9 2,010 0.34 PX PRAXAIR INC 1,000 63.70 63,700 84.23 84,230 3.3 1.8 1,500 0.79 PCP PRECISION CASTPART 715 50.64 36,211 102.08 72,987 2.9 0.1 86 0.45 COL ROCKWELL COLLINS I 869 75.16 65,316 57.15 49,663 2.0 1.1 556 0.43 HSIC SCHEIN HENRY INC 1,085 46.78 50,753 57.40 62,279 2.5 0.0 - 0.78 SLB SCHLUMBERGER LTD 620 98.10 60,822 87.00 54,070 2.1 1.0 521 NA SNN SMITH 8 NEPHEW PLC 1,062 59.29 62,970 65.99 70,081 2.8 0.9 598 NA SRCL STERICYCLE INC 1,440 33.13 47,713 51.50 74,160 2.9 0.0 - 0.42 TROW T.ROWE PRICE GROUP 1,250 35.30 44,130 50.00 62,500 2.5 1.9 1,200 0.63 TMO THERMO FISHER SCIE 1,219 49.08 59,827 56.84 69,288 2.8 0.0 - 0.32 UN UNILEVER N V 1,800 34.22 61,600 33.73 60,714 2.4 2.8 1,670 NA X UNITED STATES STL 622 104.30 64,872 126.87 78,913 3.1 0.8 622 0.71 WOOF VCA ANTECH INC 1,570 29.55 46,401 27.35 42,940 1.7 0.0 - 0.08 VRSN VERISIGN INC 2,075 29.00 60,181 33.24 68,973 2.7 0.0 - 0.03 WAT WATERS CORP 1,037 61.84 64,124 55.70 57,761 2.3 0.0 - 0.89 ' ~ ROCRWOOD CAPITAL ADVISORS 7 Proxy Voting Record i 1 Rockwood Capital Advisors, through our equity sub-adviser, Contravisory Research & Management Co., has retained Institutional Shareholder Services ("ISS") to coordinate and vote proxies with respect to client securities. Proxy voting is an important right of shareholders and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised. When the Adviser has discretion to vote the proxies of its clients, they will be voted by ISS in accordance with their Proxy Voting Guidelines in effect from time to time. The Adviser believes that having proxies voted by a professional proxy voting service which has the staff and resources to carefully evaluate voting issues is in the best interests of its clients and will remove the possibility of encountering conflicts of interest on the part of the Adviser with respect to the voting of proxies. The Compliance Officer has reviewed the most recent ISS Proxy Voting Guidelines and believes that having proxies voted in accordance with such guidelines is consistent with the best interests of the Adviser's clients. The Chief Compliance Officer has also determined that ISS, as a leading proxy voting firm, has the capacity and competency to adequately analyze proxy issues. The Compliance Officer has also received information from ISS demonstrating to the satisfaction of the Compliance Officer that ISS has adopted procedures to ensure that it is independent with respect to its proxy voting decisions, including using "Chinese wall" and other procedures to segregate its proxy voting operations from its corporate servicing operations. ' ISS has agreed to notify the Adviser if it believes ISS faces a material conflict of interest with respect to voting the proxies of a particular issuer. The Compliance Officer will monitor ISS to ensure that all proxies are being properly voted by periodically engaging in "spot reviews" of votes made by ISS. The Compliance Officer will also have ISS confirm annually that it is maintaining appropriate records as set forth below. Client quarterly reports contain information with respect to each voted proxy about which the client portfolio held during the period, including (a) the name ' , of the issuer, (b) the proposal voted upon, and (c) how ISS voted the client s proxy. Additionally, the Compliance Officer will maintain files relating to the Adviser's proxy voting procedures in an easily accessible place. Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record, with records for the first two years kept in the offices of the Adviser. Records of the following will be included in the files: , • Copies of this proxy voting policy and procedures, and any amendments thereto. • A copy of each written client request for information on how ISS voted such client's proxies, and a copy of any written response to any (written or oral) client request for information on how ISS voted its proxies. The Adviser has arranged with ISS to have ISS maintain and make available promptly upon request (i) copies of each proxy statement that is received ' for one of Adviser's clients, provided however that ISS and the Adviser may rely on obtaining a copy of proxy statements from the SEC's EDGAR system for those proxy statements that are so available, (ii) a record of each vote that ISS casts for one of Adviser's clients and (iii) a copy of any document ISS created that was material to making a decision how to vote proxies, or that memorializes that decision. '~ROCRWOOD CAPITAL ADVISORS g ' Tequesta Public Safety Officers' Pension Fund Fixed Income First Quarter 2008 Market Environment 12% 10% 8% 6% 4% 2% 0% -2% -4% • In an effort to contain the subprime crisis, the Fed aggressively lowered the funds rate in Q1 2008. In January alone, the Fed lowered the funds rate a stunning 1.25%. An additional 75 bps reduction in March lowered the rate to 2.25%, down from 4.25% at year end 2007. • The Fed has taken a number of dramatic and unprecedented moves to control the crisis. In December, the Fed created a $20 billion Term Auction Facility for banks to anonymously acquire desperately needed liquidity. In March, the Fed established a Term Securities Lending Facility for cash-strapped Wall Street firms and extended discount window borrowing for these firms. • The combination of a "flight to quality" bid, a Fed in easing mode and a slowing US economy sent Treasury yields lower in Q1 2008. The yield curve steepened dramatically in the quarter. Two-year Treasury yields dropped nearly in half from 3.0% to 1.6%, while 30-year yields fell only 0.2% to 4.3%. • The current crisis will be contained only when housing prices stabilize. This crisis was set in motion by subprime borrowers who were initially funded with a low rate, adjustable mortgage. As these loans reset to higher rates, the borrowers defaulted. The peak for subprime resets will be May 2008. • The Lehman Aggregate was up 2.2% in the first quarter. Once again, investors scurried for the safety of Treasuries, and riskier assets took a beating. Treasuries returned 4.4%, their highest quarterly return since Q3 2002 (7.4%). Corporate bonds badly underperformed the broad market during the quarter with an awful -0.15% return. Sector Index Returns ^ 1st Qtr 2008 2007 Tsy Agy MBS Credit HY 6% 5% 4% 3% 2% 1% Fixed Income Performance 1 o°i° 8% 6% 4% 2% 0% U.S. Treasury Yield Curves 3 2 5 10 mos yrs yrs yrs 30 yrs 3.0% 2.2% ~ s.s°ro 8.2 7.1% 7.5% 5.4% 5.4% 1stQtr. One Two Since Inception 2008 Year Years (5/1 /05) ~ Tequesta Public Safety ®Lehman Int. Gov't/Credit ROCKWOOD CAPITAL ADVISORS 9 Fixed Income Portfolio Structure March 31, 2008 Effective Maturity Tequesta Public Safety u.s. Cash Treasuries 1% 26% A BS/CMBS 9% Corpora 15% 1 to 3 yrs 3 to 5 yrs 5 to 10 yrs ~ Tequesta PS 10 + ®Lehman Int. G/C 0% 20% 40% 60% Lehman Int. Gov't/Credit u.s. Treasuries d'20/ Agencies 39% A BS/CN 0% Corporate 33% Mortgages 0% ~ncies 24% ROCKWOOD CAPITAL ADVISORS Characteristics Mortgages 10% Bond Holdings -March 31, 2008 i~ . •. .- .. 16 OOOOOOCM CASH & EQUIVALENTS AAA - 2.090 4130/2008 16,870 100.000 16,870 0.95 2.090 0.08 25 07388VAB BSCMS 2007-T26 A2 AAA - 5.330 3112/2012 25,137 97.645 24,522 1.51 4.971 3.50 20 161571 CH CHASE_ISS_TR_2007-017AA AAA - 5.120 10115/2014 20,000 103.387 20,723 1.23 4.342 3.99 20 161571CP CHASE_ISS_CC_2008-4AA NIA - 4.650 311512015 19,999 99.996 19,999 1.21 4.405 4.42 11 17275RAC CISCO SYS INC Al C+ 5.500 2/2212016 11,015 103.461 11,446 0.68 4.964 6.50 20 30161 MAE EXELON GENERATION CO LLC A3 B+ 6.200 101112017 20,089 99.082 20,447 1.22 6.330 7.08 25 3133MLT8 FEDERAL HOME LN BKS AGY - 5.250 2113/2009 25,940 102.531 25,800 1.54 2.281 0.85 50 3133X15Y FEDERAL HOME LN BKS AGY - 4.100 3130/2009 49,725 101.781 50,896 3.03 2.288 0.98 20 3134A3EM FEDERAL HOME LN MTG CORP AGY - 5.750 311512009 20,866 103.250 20,701 1.23 2.291 0.93 40 31359MH8 FEDERAL NATL MTG ASSN AGY - 5.000 311512016 38,719 106.844 42,826 2.55 3.987 6.74 105 31359MHK FEDERAL NATL MTG ASSN AGY - 5.500 3/1512011 110,959 107.594 113,230 6.74 2.804 2.74 200 31398AMV FEDERAL NATL MTG ASSN AGY - 2.500 41912010 201,056 100.406 201,562 12.01 2.293 1.96 200 31398AMW FEDERAL NATL MTG ASSN AGY - 3.250 419/2013 198,656 99.875 200,725 11.96 3.277 4.62 25 31413GN7 FNMAPOOL - 945114 AGY - 5.780 811/2037 25,973 100.000 25,952 1.54 4.064 1.28 29 36200EUP GNMA POOL - 599190 AGY - 6.000 311512035 30,887 103.396 30,893 1.81 4.654 4.31 46 36291W7H GNMAPOOL-640896 AGY - 7.000 4/1512035 49,894 105.311 49,164 2.91 4.740 2.91 60 36291XMW GNMA POOL - 641273 AGY - 4.500 4115/2035 59,540 97.188 59,388 3.50 5.094 6.67 20 38144LAC GOLDMAN SACHS GROUP INC AA3 NIA 5.450 11/1/2012 20,135 101.281 20,750 1.24 5.131 3.95 15 428236AQ HEWLETT-PACKARD A2 NIA 4.500 31112013 15,040 101.449 15,270 0.90 4.442 4.39 25 46625HGT JP MORGAN CHASE & CO AA2 N/A 5.375 101112012 24,978 103.833 26,630 1.59 4.426 3.91 20 46625YNC JPMCC 2005-LDP2 A4 AAA - 4.738 5/1512015 19,095 98.117 19,702 1.13 5.659 5.96 30 52108HU5 LBUBS 2004-C8 A4 AAA - 4.510 12/1512011 29,388 96.571 29,046 1.77 4.911 3.35 25 565849AD MARATHON OIL CORP BAA1 NIA 6.000 1011/2017 25,030 101.444 26,128 1.56 5.800 7.20 20 58013ME6 MCDONALDS CORP MED TERM A3 NIA 5.800 10/15/2017 20,416 105.000 21,525 1.28 5.130 7.39 15 595620AD MIDAMERICAN ENERGY CO A2 B- 4.650 10/1/2014 14,073 98.514 15,126 0.90 4.920 5.51 15 713448BF PEPSICOINC AA2 NIA 5.150 511512012 14,993 105.995 16,191 0.96 3.572 3.67 10 742718DA PROCTER 8 GAMBLE CO AA3 B+ 4.950 811512014 9,792 104.640 10,527 0.63 4.114 5.51 10 78387GAP SBC COMMUNICATIONS INC A2 C 5.100 911512014 9,621 99.347 9,957 0.59 5.220 5.52 15 806605AJ SCHERING PLOUGH CORP BAA1 A 6.000 9/1512017 14,994 100.497 15,115 0.90 5.930 7.36 20 907818CZ UNION PAC CORP BAA2 NIA 5.750 11/15/2017 19,992 101.245 20,731 1.24 5.580 7.41 15 912828AP UNITED STATES TREAS NTS TSY - 4.000 11115/2012 14,192 107.383 16,335 0.97 2.307 4.21 15 912828DV UNITED STATES TREAS NTS TSY - 4.125 5115/2015 14,057 108.102 16,450 0.98 2.859 6.24 110 912828FH UNITED STATES TREAS NTS TSY - 4.875 5131/2011 109,812 109.141 121,857 7.26 1.887 2.93 280 912828HT UNITED STATES TREAS NTS TSY - 2.750 212812013 284,544 101.375 284,520 16.95 2.451 4.61 25 92343VAJ VERIZON COMMUNICATIONS A3 - 4.350 211512013 24,971 97.986 24,645 1.47 4.817 4.35 35 929766X2 WBCMT 2005-C19 A5 AAA - 4.661 7/1512012 34,103 95.814 33,671 2.06 5.068 3.82 i ~~ ~~ 'ROCRWOOD CAPITAL ADVISORS 11 Economic Environment & Outlook First Quarter 2008 ~ The credit erosion that began in mid-2007 showed no signs of halting in Q1 2008. The credit crisis snowball continues to roll, with liquidity still impaired, issuance of new securities slowing and credit yield spreads gapping wider. ~ Despite increasing doubts regarding the effectiveness of the federal funds rate as a magic bullet in the current crisis, the Fed continues to drive the funds rate lower. In January alone, the Fed lowered the funds rate a stunning 1.25%. An additional 75 bps reduction in March lowered the rate to 2.25%, 2% lower than its year-end level. ~ The Fed has taken a number of dramatic and unprecedented moves to control the crisis. In December, the Fed created a $20 billion Term Auction Facility for banks to anonymously acquire desperately needed liquidity. In March, the Fed established a Term Securities Lending Facility for cash-strapped Wall Street firms and extended discount window borrowing for these firms. ~ Employment growth has fallen off a cliff in Q1 2008. For the first time since mid- 2003, the economy has lost jobs for three consecutive months. Year to date, non- farm payrolls have declined 232,000. The unemployment rate has risen from 4.4% in March 2007 to the present 5.1 %. ~ The economy grew at a paltry 0.6% annualized rate in Q4 2007. Some analysts believe the economy will contract in the first quarter of 2008, and that the economy may have already slipped into recession. (The technical definition of a recession is two consecutive quarters of negative GDP growth.) ~ The financial markets remain wary that in the process of trying to contain the subprime damage, the Fed may have stoked the flames of inflation. Without question, the Fed has at least temporarily cast aside its inflation-fighting credentials in a bid to prevent the credit markets from seizing up and to steer the economy away from the recessionary iceberg ahead. ~ Core CPI has been trending higher over the past several months, with the YOY rate rising from 2.1 % in September to 2.4% in March 2008. Headline CPI has remained at or above 4% since November 2007 due to higher energy and food prices. ~ It is possible that the economy has already slipped into recession. Stocks were hammered in the quarter, and investors are still fleeing to the safety of US Treasury securities. We believe the Fed is nearing the end of this easing cycle, but market psychology remains fragile. The Fed has moved aggressively to instill confidence that they will do everything in their power to stabilize the economy. InI u 'ROCRWOOD CAP[TAL ADVISORS 12 ' -_ Monetary Policy 1 1 Fed Funds Target Rate ° s ro 6% 1 4% ' 2% ' 0% 6/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03 6104 12/04 6/05 12/05 6/06 12/06 6/07 12/07 1 ' Real GDP Growth (Quarterly Growth at Annualized Rate) 10% 8% 6% 4% ' 2% 0% -2% 4°/ 2004 2005 2006 2007 2008 4.5 4.8 4.9 3.5 3.6 3.0 3.1 2 8 3.8 2.5 . 2.4 2.1 1.2 1.1 0.6 0.6 0.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 - o ~ ROCRWOOD CAPITAL ADVISORS *median forecast 13 Inflation Pressures Building 1 1 Capacity Utilization , 86 84 U Q 82 (0 U ' ~ 80 .` ,~ 78 C N ~ 76 w 74 72 70 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 ' Inflation 0 7 /o 6% 5% C g . 4% ~ c 3% 0 m m ~ 2% 1% 0% 1 88 90 92 94 96 98 00 02 04 06 08 'ROCRWOOD CAPITAL ADVISORS 14 ' Labor Market Keeps Tightening 9% ' 8% 1 7% ' 6% ' 5% 4% 3% Unemployment Rate 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 ' Wages ° 5.0 /o ' 4.5% rn •~ 4.0% ~ 3.5% , _° 3.0% rn Q 2.5% 0 } 2.0% 1.5% 1.0% 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 ~ ROCKWOOD CAPITAL ADVISORS 15 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta Public Safety Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed : I :56:49 PM Account Number 80103784 Market Unr Gain Loss Est Ann Inc Yield Government Monev Market Fund 266,309.75 GS Financial Sq Trsy Oblig Adm 266,309.75 266,309.75 0.00 4,074.54 1.53% GSTREAS 38141XXX0 Sub TOtll~ $ 266,309.75 266,309.75 0.00 4,074.54 1.53% U S Government Notes & Bonds 110,000 U S Treasury Note 4.875% 05/31/11 109,812.11 117,768.75 7,956.64 5,362.50 4.55% UST4812 912828FH8 15,000 U S Treasury Note 4.000% 11/15/12 14,191.99 15,703.13 1,511.14 600.00 3.82% USTN9012 912828AP5 140,000 U S Treasury Note 2.7500 02/28/13 142,252.91 138,206.25 -4,046.66 3,850.00 2.79% UST2713 912828HT0 Suh Total $ 266,257.01 271,678.13 5,421.12 9,812.50 3.61% U S Government A~ency Notes 25,000 FHLB Series UD09 5.250% 02/13/09 24,799.78 25,500.00 700.22 1,312.50 5.15% FHLB5209 3133MLT88 20,000 FHLMC 5.750% 03/15/09 20,866.06 20,531.25 -334.81 1,150.00 5.60% FHLMC0509 3134A3EM9 50,000 FHLB Series X209 4.100% 03/30/09 50,000.00 50,640.63 640.63 2,050.00 4.05% FHLB4112 3133X15Y9 200,000 FNMA 2.5000 09/09/10 201,056.00 198,937.50 -2,118.50 5,000.00 2.51% FNMA2510 31398AMV1 105,000 FNMA 5.500% 03/15/11 110,958.75 111,496.88 538.13 5,775.00 5.18°h FNMA5511 31359MHK2 200,000 FNMA 3.250°°-0 04/09/13 198,656.00 196,750.00 -1,906.00 6,500.00 3.30% FN3213 31398AMW9 40,000 FNMA S.000o 03/15/16 38,719.08 42,087.50 3,368.42 2,000.00 4.75% FNMA0516 31359MH89 Sub Total $ 645,055.67 645,943.76 888.09 23,787.50 3.68% GNMA Mort~a~e Pass Thru USF Affiliate Serv/ces Inc. Page 1 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta Public Safety Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed : I :56:58 PM Account Number 80103784 Market Unr Gain Loss Est Ann Inc Yield 21,124.16 GNMA Pass Thru Pool #599190 6.000° 03/15/35 GN599190 36200EUP9 46,369.49 GNMA Pass Thru Pool #640896 7.000° 04/15/35 GN640896 36291W7H8 60,770.31 GNMA Pass Thru Pool #691273 4.5000 09/15/35 GN641273 36291XMW6 Sub Tota! g Govt MBS/CMO/ABS 24,302.01 FNMA Pass Thru Pool #945114 5.8000 08/01/37 FN945114 31913GN71 148,194.48 FHLMC Gold Pool #G04051 6.000% 02/01/38 FG09051 3128M5ZQ6 Sub Tota[ g Non Govt MBS/CMO/ABS 20,000 Chase Insurance Trust 2007-A 5.120°, 10/15/14 CT5119 161571CH5 30,000 LB-UBS Comm Mtge Tr 2004-C8 9.510% 12/15/29 LBUBS4529 52108HU51 20,000 JPMorgan Chase Ser 2005-LDP2 4.7380 07/15/42 JP4742 96625YNC3 35,000 Wachovia Bank Series 2005-C19 4.6610 05/15/94 WB4644 929766X24 25,000 Bear Stearns Series 2007-T26 5.330% 01/12/45 BS5395 07388VAB4 Sub Total g Corporate Bonds 15,000 Pepsico Inc 5.1500 05/15/12 PEP5112 713948BF4 21,942.72 21,748.56 -194.16 1,267.45 5,83% 49,832.70 49,214.84 -617.86 3,245.86 6.60% 59,440.93 58,281.83 -1,159.10 2,734.66 4.69% 131,216.35 24,438.70 151,644.63 129,245.23 24,812.25 151,741.25 -1,971.12 373.55 96.62 7,247.97 1,396.64 8,891.67 5.61% 5.63% 5.86% 176,083.33 176,553.50 470.17 10,288.31 5.83% 19,999.50 20,141.20 141.70 1,024.00 5.08% 29,388.28 29,379.30 -8.98 1,353.00 4.61% 19,095.31 19,548.60 453.29 947.60 4.85% 34,103.13 34,038.20 -64.93 1,631.35 4.79% 25,137.14 24,740.75 -396.39 1,332.50 5.39% 127,723.36 127,848.05 124.89 8,288.45 4.92% 14,992.95 15,584.76 591.81 772.50 4.96% USF AffUlate Services inc. Page 2 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta Public Safety As Of :05/01/2008 Time Printed :1:56:58 PM Account Number 80103784 Shares Asset Description Cost Market Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 20,000 Goldman Sachs Group Inc 5.9500 11/01/12 20,135.40 20,225.28 89.88 1,090.00 5.39% GS5412 38194LAC4 25,000 Verizon Communications 4.3500 02/15/13 24,971.00 24,638.38 -332.62 1,087.50 4.41% VZ9313 92343VAJ3 15,000 Hewlett-Packard Co 4.500% 03/01/13 15,039.90 15,122.13 82.23 675.00 4.46% HPQ4513 428236AQ6 20,000 JP Morgan Chase & Co 4.7500 05/01/13 19,936.60 19,955.66 19.06 950.00 4.76% JPM4713 96625HHB9 10,000 Procter & Gamble Co 4.950°s 08/15/19 9,792.00 10,419.55 627.55 495.00 4.75% PGC4914 742718DA4 10,000 5BC Communications 5.100°s 09/15/14 9,621.10 10,031.13 410.03 510.00 5.08% 5BC5114 78387GAP8 15,000 MidAmerican Energy Co 9.650 10/01/14 14,072.85 14,826.93 754.08 697.50 4.70% MEC4619 595620AD7 20,000 Chase Insurance Trust 4.650a 03/15/15 19,999.28 19,637.52 -361.76 930.00 4.74% CI4615 161571CP7 11,000 Cisco Systems 5.5000 02/22/16 11,015.07 11,393.79 378.72 605.00 5.31% CSC05516 17275RAC6 15,000 Schering-Plough Corp 6.000% 09/15/17 14,994.45 15,147.29 152.84 900.00 5.94% SP6017 806605AJ0 20,000 Exelon Corp 6.200a 10/01/17 20,089.20 19,912.80 -176.40 1,240.00 6.23% EXC6217 30161MAE3 25,000 Marathon Oil Corp 6.000° 10/01/17 25,029.50 25,465.75 436.25 1,500.00 5.89% MRC6017 565849AD8 20,000 Mc Donald's Corp 5.8000 10/15/17 20,416.40 20,931.48 515.08 1,160.00 5.54% MCDD5817 58013MEB6 20,000 Union Pacific Corp 5.7500 11/15/17 19,991.80 20,248.22 256.42 1,150.00 5.68% UP1117 907818CZ9 USF AKiliate Services Inc. Page 3 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : OS/0 I /2008 Account Name: Tequesta Public Safety Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed : I :56:58 PM Account Number 80103784 Market Unr Gain Loss Est Ann Inc Yield 20,000 Monsanto Co. MON5118 61166WAF8 Sub Totul Common Stock 1,090 Aetna Inc AET 00817Y108 1,200 Anheuser-Busch Cos Inc BUD 035229103 1,700 AT&T Inc T 002068102 1,100 Baxter International Inc BAX 071813109 620 Chevron Corp CVX 166769100 1,160 CIGNA Corp CI 125509109 1,000 Coca-Cola Co KO 191216100 ggp Costco Wholesal e Corp COST 22160K105 1,791 eBay Inc EBAY 278642103 1,120 Edison Internat ional EIX 281020107 550 Energizer Holdi ngs Inc ENR 292668108 580 Entergy Corp ETR 293696103 5.125% 04/15/18 20,001.60 19,914.70 -86.90 1,025.00 5.15% $ 280,099.10 283,455.37 3,356.27 14,787.50 5.22% 58,298.21 47,524.00 -10,774.21 43.60 0.09% 56,761.59 59,040.00 2,278.41 1,584.00 2.68% 58,146.18 65,807.00 7,660.82 2,720.00 4.13% 64,790.55 68,552.00 3,761.45 957.00 1.40% 52,910.37 59,613.00 6,702.63 1,438.40 2.41% 63,616.95 49,543.60 -14,073.35 46.40 0.09% 61,905.50 58,870.00 -3,035.50 1,520.00 2.58% 65,574.94 69,825.00 4,250.06 568.40 0.81% 61,733.07 56,040.39 -5,692.68 0.00 0.00% 63,526.96 58,430.40 -5,096.56 1,366.40 2.34% 63,603.49 43,483.00 -20,120.49 0.00 0.00% 64,817.96 66,618.80 1,800.84 1,740.00 2.61% USF Affiliate Services Inc. Page 4 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : 0~/Ol/2008 Account Name: Tequesta Public Safety Shares Asset Description s Ot' :05/01/2008 Cost Prices As Of :04/30/2008 arket ime Printed :1:56:59 PM Account Number 80103784 Unr Gain Loss Est Ann Inc Yield 550 Freeport-McMoran Copper & Gold 53,536.34 62,562.50 9,026.16 962.50 1.54% FCX 35671D857 1,160 Heinz (H J) Co 49,367.39 54,554.80 5,187.41 1,763.20 3.23% HNZ 923079103 1,085 Henry Schein Inc 50,752.58 60,076.45 9,323.87 0.00 0.00% HSIC 806407102 1,485 Hewlett-Packard Co 49,682.22 68,829.75 19,147.53 475.20 0.69% HPQ 428236103 613 International Business Machines Corp 67,574.92 73,989.10 6,414.18 1,226.00 1.66% IBM 959200101 710 Lockheed Martin Corp 46,095.22 75,288.40 29,193.18 1,192.80 1.58% LMT 539830109 1,630 Loews Corp 41,007.32 68,639.30 27,631.98 407.50 0.59% LTR 540429108 970 McDermott International Inc 48,296.59 51,972.60 3,676.01 0.00 0.00% MDR 580037109 950 McDonald' s Corp 50,213.30 56,601.00 6,387.70 1,425.00 2.52% MCD 580135101 632 Mettler-Toledo International 65,011.88 60,204.32 -4,807.56 0.00 0.00% MTD 592688105 700 Pepsico Inc 49,099.05 47,971.00 -1,128.05 1,050.00 2.19% PEP 713498108 1,500 PPL Corp 51,752.46 72,030.00 20,277.54 2,010.00 2.79% PPL 693517106 1,000 Praxair Inc 63,700.19 91,310.00 27,609.81 1,500.00 1.64% PX 74005P109 715 Precision Castparts Corp 36,210.81 84,055.40 47,844.59 85.80 0.10% PCP 740189105 USF Affiliate Services Inc. Page 5 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : OS/01 /2008 Account Name: Tequesta Public Safety Shares Asset Description As Of : US/O1/2008 Cost Prices As Of :04/30/2008 Time Printed : I :56:59 PM Account Number 80103784 Market Unr Gain Loss Est Ann Inc Yield ggg Rockwell Collins Inc COL 774391101 620 Schlumberger Ltd SLB 806857108 1,440 Stericycle Inc SRCL 858912108 1,250 T Rowe Price Group Inc TROW 741447108 1,219 Thermo Fisher Scientific Inc TMO 883556102 g22 United States Steel Corp X 912909108 2,075 Veri5ign Inc VRSN 92343E102 Sub Total Common Stock -ADR 1,000 Bayer AG Spons ADR BAY 072730302 4,260 Koninklijke Ahold NV Spons ADR AHO 500467402 1,062 Smith & Nephew PLC Spons ADR SNN 83175M205 1,800 Unilever NV New York Shares ADR UN 904789709 65,315.86 54,842.59 -10,473.27 834.24 1.52% 60,822.00 62,341.00 1,519.00 520.80 0.84% 47,712.71 76,867.20 29,154.49 0.00 0.00% 44,130.00 73,200.00 29,070.00 1,200.00 1.64% 59,826.60 70,543.53 10,716.93 0.00 0.00% 64,872.30 95,756.90 30,884.60 622.00 0.65% 60,181.26 74,803.75 14,622.49 0.00 0.00% S Sub Total g Crand Total ~ Principal Cash: o.oo Income Cash: o.oo 1,860,846.77 2,139,788.78 278,940.01 27,259.24 1.27% 54,825.58 85,100.00 30,274.42 1,655.58 1.95% 41,764.45 63,141.72 21,377.27 802.12 1.27% 62,969.65 68,743.26 5,773.61 631.36 0.92% 61,599.60 60,372.00 -1,227.60 1,671.12 2.77% 221,159.28 277,356.98 56,197.70 4,760.18 1.72% 3,974,750.62 4,318,177.55 343,426.93 108,306.19 2.51% Invested Income: o.oo USF Affiliate Services Inc. Page 6 of 18 Account Holdings As Of Filtered By: Selected Accolmts Sorted By :Account Number Date Run : OS/0 I /?008 Account Name: Tequesta General Employees Pension Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed : I :56:59 PM Account Number 80105025 Market Unr Gain Loss Est Ann Inc Yield Government Money Market Fund 51,762.03 Federated Treasury Obligations Fund 51,762.03 51,762.03 0.00 807.49 1.56% TOSXX 60939N872 SUL'1 TOtlll $ 51,762.03 51,762.03 0.00 807.49 1.56% U S Government Notes & Bonds 20,000 U S Treasury Note 9.1250 08/15/08 19,888.90 20,150.00 261.10 825.00 4.09% UST9108 912828EC0 10,000 U S Treasury Note 5.5000 05/15/09 10,169.53 10,365.63 196.10 550.00 5.31% UST5509 912827563 15,000 U 5 Treasury Note 2.000% 02/28/10 15,130.08 14,934.38 -195.70 300.00 2.01% 912828H52 15,000 U S Treasury Note 9.250° 10/15/10 14,909.18 15,717.19 808.01 637.50 4.06% UST412510 912828EJ5 10,000 U S Treasury Note 4.625s 10/31/11 10,039.56 10,662.50 622.94 462.50 4.34% UST9612 912828FW5 15,000 U S Treasury Note 2.750% 02/28/13 15,275.98 14,807.81 -468.17 412.50 2.79% UST2713 912828HT0 10,000 U S Treasury Note 9.250=~ 08/15/13 9,850.78 10,568.75 717.97 425.00 4.02% UST4213 912828BH2 5,000 U S Treasury Note 4.125% 05/15/15 5,100.00 5,228.13 128.13 206.25 3.95% UST9115 912828DV9 5,000 U S Treasury Note 4.2500 08/15/15 4,900.63 5,265.63 365.00 212.50 4.04% UST0815 912828EE6 5,000 U S Treasury Note 5.125a 05/15/16 5,130.66 5,535.94 405.28 256.25 4.63% UST5116 912828FF2 15,000 U S Treasury Note 4.625% 02/15/17 14,975.98 16,050.00 1,074.02 693.75 4.32% UST4617 912828GH7 7,000 U S Treasury Note 9.250° 11/15/17 7,115.94 7,271.25 155.31 297.50 4.09% UST4217 912828HH6 USF Affiliate Services Inc. Page 7 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : 05/01 /2008 Account Name: Tequesta General Employees Pension Shares Asset Description Time Printed : I :57:00 PM As Of :05/01/2008 Account Number 80105025 Cost Market Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 Sub Total U S Government A~ ency Notes 10,000 FNMA FNMA5209 31359MEK5 10,000 FHLMC FHLMC0509 3139A3EM9 10,000 FNMA FNMA5309 31359MU68 5,000 FNMA FNMA4711 31359MZL0 7,000 FNMA FNMA5511 31359MHK2 10,000 FNMA FNM5011 31359MZ30 3,000 FHLMC FHLMC4513 3134A4SA3 5,000 FHLMC FHLMC9813 3139A4UK8 8,000 FNMA FNMA50015 31359MA45 8,000 FNMA FNMA5024 31359M7X5 Sub Tota[ Govt MBS/CMO/ABS 11,199.68 FHLMC Gold Pool #C90939 FGC90939 3128P7BG7 11,437.57 FHLMC Gold Pool #C90978 FG6026 3128P7CP6 $ 132,487.22 138,557.21 4,069.99 5,278.75 3.87% 5.250°s 01/15/09 10,150.60 10,184.38 33.78 525.00 5.15% 5.7500 03/15/09 10,153.00 10,265.63 112.63 575.00 5.60% 5.375a 08/15/09 10,092.70 10,318.75 226.05 537.50 5.21% 4.750°°-0 12/15/10 5,003.70 5,218.75 215.05 237.50 4.55% 5 . 5 0 0 0 0 3 / 15 / 11 7,263.36 7,433.13 169.77 385.00 5.18% 5.000 °s 10 / 15 / 11 10,096.27 10,584.38 488.11 500.00 4.72% 4.500% 01/15/13 2,957.65 3,120.00 162.35 135.00 4.33% 9 . 8 7 5 % 11 / 15 / 13 4,860.00 5,282.81 422.81 243.75 4.61 5 . 0 0 0 % 0 4 / 15 / 15 7,933.42 8,480.00 546.58 400.00 4.72% 5.000$ 05/11/17 8,296.96 8,412.50 115.54 400.00 4.75% $ 76,807.66 79,300.33 2,492.87 3,938.75 4.97% 5.500°°-0 12/01/25 10,910.93 11,360.30 449.37 615.98 5.42% 6.000° 07/01/26 11,373.23 11,743.10 369.87 686.25 5.84% USF Affiliate Services lnc Page 8 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : OS/O1 /2008 Account Name: Tequesta General Employees Pension Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed : I :57:00 PM Account Number 80105025 Market Unr Gain Loss Est Ann Inc Yield 12,874.46 FHLMC Gold Pool #C90983 5.5000 08/01/26 FGC90983 3128P7CU5 12,182.36 FNMA Pass Thru Pool #884093 6.000% 05/01/36 FN884093 31910BGA6 Suh Total g Coraorate Bonds 5,000 CIT Group Inc S eries MTN 4.7500 08/15/08 CIT47508 125577AQ9 5,000 CSX Corp 6.250% 10/15/08 CSX6208 126408BR3 6,000 Deutsche Bank F inancial 7.5000 04/25/09 DB7509 251529AF0 5,000 Target Corp 5.375°s 06/15/09 TC5309 87612EAJ5 5,000 Intl Lease Fina nce Corp S.000o 09/15/10 AIG5010 959745FP5 5,000 Capital One Bank 5.7500 09/15/10 COF5710 14040EHH8 5,000 Lehman Brothers Hldgs MTN 5.000% 01/14/11 LEH5011 52517PD57 5,000 Kohls Corporation 6.3000 03/01/11 K556311 500255AM6 5,000 Bank One Corp 5.900% 11/15/11 JMP5911 06423AAQ6 5,000 Gannett Co 6.3750 09/01/12 GCI63712 364725AC5 5,000 Avon Products 4.6250 05/15/13 AVP4613 054303AQ5 12,771.87 13,052.41 280.54 708.10 5.43% 12,070.07 12,468.41 398.34 730.94 5.86% 47,126.10 48,624.22 1,498.12 2,741.27 5.64% 5,001.24 4,898.84 -102.40 237.50 4.85% 5,199.00 5,046.27 -152.73 312.50 6.19% 6,370.50 6,171.27 -199.23 450.00 7.29% 5,107.25 5,087,16 -20.09 268.75 5.28% 4,990.34 4,965.06 -25.28 250.00 5.04% 5,137.75 5,020.89 -116.86 287.50 5.73% 4,953.60 4,844.15 -109.45 250.00 5.16% 5,304.10 5,108.43 -195.67 315.00 6.17% 5,205.05 5,211.13 6.08 295.00 5.66% 5,363.00 5,029.55 -333.45 318.75 6.34% 4,834.80 4,947,10 112.30 231.25 4.67% USF Affiliate Services (nc. Page 9 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : OS/O l /2008 Account Name: Tequesta General Employees Pension As Of :05/01/2008 Time Printed : 1:57:00 PM Account Number 80105025 Shares Asset Description Cost Market Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 5,000 Goldman Sachs Group Inc 5.250% 10/15/13 4,989.15 4,940.96 -48.19 262.50 5,31% GS5213 38191GDQ4 5,000 US Bank NA 6.300% 02/04/14 5,145.25 5,308.27 163.02 315.00 5.93% USB6314 90333WAB4 5,000 HSBC Finance Corp 5.250°s 04/15/15 4,962.75 4,964.67 1.92 262.50 5.29% HSBC5215 40429CCR1 5,000 Wachovia Bank NA 5.6000 03/15/16 4,983.25 4,936.15 -47.10 280.00 5.67% WB5616 92976GAE1 5,000 Kimberly-Clark 6.125% 08/01/17 5,230.50 5,350.57 120.07 306.25 5.72% KMB6117 494368BB8 5,000 JPMorgan Chase Bank NA BKNT 6.000% 10/01/17 5,069.40 5,190.96 121.56 300.00 5.78% JPM6017 48121CYK6 Sub Total $ 87,846.93 87,021.43 -825.50 4,942.50 5.68% Convertible Bonds 5,000 Lowe's Companies Inc S.000o 10/15/15 4,992.25 4,993.25 1.00 250.00 5.01% LCI5015 548661CH8 Sllb T01Q1 $ 4,992.25 4,993.25 1.00 250.00 5.01% Common Stock 102 Abbott Laboratories 5,811.14 5,380.50 -430.64 146.88 2.73% ABT 002824100 g4 Airgas Inc 4,673.89 4,524.22 -149.67 45.12 1.00% ARG 009363102 141 Akamai Technologies 4,911.28 5,043.57 132.29 0.00 0.00% AKAM 009717101 104 Alliance Data Systems 4,886.33 5,970.64 1,084.31 0.00 0.00% ADS 018581108 27g Altera Corp 4,940.96 5,873.28 932.32 55.20 0.94% ALTR 021941100 USF Affiliate Services Inc. Page 10 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run : 05/01/2008 Ti me Printed :1:57:00 PM Account Name: Tequesta General Employees Pension As Of :05/01/2008 Account Nu mber 80105025 Shares Asset Description Cost Mar<cet Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 134 Altria Group Inc 2,720.38 2,680.00 -40.38 402.00 15.00% MO 02209S103 236 Amphenol Corp C1 A 9,841.62 10,898.48 1,056.86 14.16 0.13% APH 032095101 g2 Apache Corp 8,825.30 12,390.56 3,565.26 55.20 0.45% APA 037411105 31 Apple Inc 5,662.23 5,392.45 -269.78 0.00 0.00% AAPL 037833100 191 AT&T Inc 5,413.21 7,393.61 1,980.40 305.60 4.13% T 002068102 113 Bank of America Corp 5,194.59 4,242.02 -952.57 289.28 6.82% BAC 060505109 100 Bank of New York Mellon Corp 4,446.33 4,353.00 -93.33 96.00 2.21% BK 064058100 139 Becton Dickinson & Co 9,774.10 12,426.60 2,652.50 158.46 1.28% BDX 075887109 111 Best Buy Co Inc 5,459.91 4,775.22 -684.69 57.72 1.21% BBY 086516101 161 BMC Software Inc 5,228.25 5,596.36 368.11 0.00 0.00% BMCS 055921100 240 Bristol-Myers Squibb Co 5,747.69 5,272.80 -474.89 297.60 5.64% BMY 110122108 421 Cisco Systems Inc 11,143.94 10,794.44 -349.50 0.00 0.00% CSCO 172758102 7g Coca-Cola Co 4,972.78 4,650.73 -322.05 120.08 2.58% KO 191216100 61 Conoco Phillips 3,839.34 5,255.15 1,415.81 114.68 2.18% COP 208250104 USF Affiliate Services Inc. Page 11 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta General Employees Pension Shares Asset Description s Of :05/01/2008 Cost Prices As Of :04/30/2008 arket ime Printed :1:57:00 PM Account Number 80105025 Unr Gain Loss Est Ann Inc Yield 267 CVS/Caremark Corporation 10,896.47 10,778.79 -117.68 64.08 0.59% CVS 126650100 56 Deere & Co 4,943.11 4,707.92 -235.19 56.00 1.19% DE 294199105 193 DirecTV Group Inc 4,954.60 4,755.52 -199.08 0.00 0.00% DTV 25459L106 2gp Disney (Walt) Co 9,385.31 9,080.40 -304.91 98.00 1.08% DIS 254687106 g4 Ecolab Inc 4,670.61 4,320.24 -350.37 48.88 1.13% ECL 278865100 90 Edison International 4,688.62 4,695.30 6.68 109.80 2.34% EIX 281020107 92 Emerson Electric Co 5,334.76 4,807.92 -526.84 110.40 2.30% EMR 291011104 gg Endurance Specialty Holdings 3,221.03 3,193.18 -27.85 86.00 2.69% ENH 630397106 7g Express Scripts Inc C1 A 4,985.86 5,531.58 545.72 0.00 0.00% ESRX 302182100 gg Exxon Mobil Corp 5,233.26 6,328.76 1,095.50 108.80 1.72% XOM 302316102 2 Fairpoint Communications Inc 17.33 18.42 1.09 3.18 17.26% FRP 305560104 61 FPL Group Inc 4,340.72 4,043.69 -297.03 108.58 2.69% FPL 302571104 65 Genentech Inc 4,763.00 4,433.00 -330.00 0.00 0.00% DNA 368710406 gg General Mills Inc 5,654.17 5,919.20 265.03 156.80 2.65% GIS 370334104 USF Affiliate Services Inc. Page 12 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta General Employees Pension Shares Asset Description s Of : OS/Oi/2008 Cost Prices As Of :04/30/2008 arket ime Printed :1:57:00 PM Account Number 80105025 Unr Gain Loss Est Ann lnc Yield 78 Genzyme Corp 5,842.38 5,487.30 -355.08 0.00 0.00% GENZ 372917104 30 Goldman Sachs Group Inc 4,994.07 5,741.10 747.03 42.00 0.73% GS 381916104 11 Google Inc C1 A 6,890.25 6,317.19 -573.06 0.00 0.00% GOOG 38259P508 283 Halliburton Co 10,473.93 12,992.53 2,518.60 101.88 0.78% HAL 906216101 114 Harris Corp 5,764.68 6,159.42 394.74 68.40 1.11% HRS 413875105 63 Hartford Financial Svcs Grp 5,211.54 4,490.01 -721.53 133.56 2.97% HIG 916515104 113 Hewlett-Packard Co 5,752.11 5,237.55 -514.56 36.16 0.69% HPQ 428236103 g2 Honeywell International Inc 5,291.32 5,464.80 173.48 101.20 1.85% HON 438516106 154 Hospitality Properties Trust 5,629.27 4,948.02 -681.25 474.32 9.59% HPT 44106M102 499 Intel Corp 9,984.07 11,107.74 1,123.67 279.44 2.52% INTO 958140100 55 International Business Machines Corp 4,468.59 6,638.50 2,169.91 110.00 1.66% IBM 459200101 gg Investment Technology Group 4,338.91 4,632.96 294.05 0.00 0.00% ITG 46195F105 92 Johnson & Johnson 5,789.04 6,172.28 383.24 169.28 2.74% JNJ 978160104 344 Johnson Controls Inc 8,707.27 12,129.44 3,422.17 178.88 1.47% JCI 478366107 USF Affiliate Services Inc. Page 13 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta General Employees Pension Shares Asset Description s Of :05/01/2008 Cost Prices As Of :04/30/2008 arket ime Printed :1:57:00 PM Account Number 80105025 Unr Gain Loss Est Ann lnc Yield 146 JP Morgan Chase & Co 6,388.70 6,956.90 568.20 221.92 3.19% JPM 96625H100 83 Kimberly-Clark Corp 5,204.78 5,311.17 106.39 192.56 3.63% KMB 994368103 61 Lockheed Martin Corp 5,921.05 6,468.44 547.39 102.48 1.58% LMT 539830109 174 McKesson HBOC Inc 9,633.70 9,068.88 -564.82 41.76 0.46% MCK 58155Q103 64 MEMC Electronic Materials 4,885.56 4,030.08 -855.48 0.00 0.00% WFR 552715104 g2 Met Life Inc 4,302.97 5,598.20 1,295.23 68.08 1.22% MET 591568108 341 Microsoft Corp 11,460.82 9,725.32 -1,735.50 150.04 1.54% MSFT 594918104 g3 National Oilwell Varco Inc 5,841.63 5,681.35 -160.28 0.00 0.00% NOV 637071101 142 Nike Inc C1 B 9,215.30 9,485.60 270.30 130.64 1.38% NKE 654106103 5g Nobel Energy 4,753.10 5,133.00 379.90 42.48 0.83% NBL 655049105 111 OmniCom Group 5,374.99 5,299.14 -75.85 66.60 1.26% OMC 681919106 553 Oracle Corp 11,177.24 11,530.05 352.81 0.00 0.00% ORCL 68389X105 g2 Parker-Hannifin Corp 4,749.30 7,346.20 2,596.90 77.28 1.05% PH 701099104 g7 Pepsico Inc 5,156.46 4,591.51 -564.95 100.50 2.19% PEP 713498108 USF Affiliate Services Inc. Page 14 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta General Employees Pension Shares Asset Description s Of :05/01/2008 Cost Prices As Of :04/30/2008 arket ime Printed : 1:57:00 PM Account Number 80105025 Unr Gain Loss Est Ann Inc Yield 134 Philip Morris International 6,198.91 6,838.02 639.11 0.00 0.00% PM 718172109 68 PPG Industries Inc 4,100.88 4,173.16 72.28 141.44 3.39% PPG 693506107 61 Praxair Inc 3,866.23 5,569.91 1,703.68 91.50 1.64% PX 74005P104 71 Procter & Gamble Co 4,730.70 4,760.55 29.85 113.60 2.39% PG 792718109 171 Ross Stores Inc 4,966.94 5,726.79 759.85 64.98 1.13% ROST 778296103 213 Schwab (Charles) Corp 5,210.06 4,600.80 -609.26 42.60 0.93% SCHW 808513105 gg Sempra Energy 4,397.56 5,553.66 1,156.10 125.44 2.26% SRE 816851109 260 St Jude Medical Inc 10,430.60 11,382.80 952.20 0.00 0.00% STJ 790849103 130 State Street Corp 9,851.23 9,378.20 -473.03 119.60 1.28% STT 857477103 230 TD Ameritrade Holding Corp 3,765.24 4,163.00 397.76 0.00 0.00% AMTD 87236Y108 134 Terex Corp 8,081.98 9,337.12 1,255.14 0.00 0.00% TEX 880779103 164 Textron Inc 11,202.88 10,005.64 -1,197.24 150.88 1.51% TXT 883203101 102 Thermo Fisher Scientific Inc 5,869.79 5,902.74 32.95 0.00 0.00% TMO 883556102 gg Transocean Inc 8,959.52 10,174.74 1,215.22 0.00 0.00% RIG 690073100 USF Affiliate Services lnc. Page 15 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Account Name: Tequesta General Employees Pension Shares Asset Description Time Printed :1:57:00 PM As Of :05/01/2008 Account Number 80105025 Cost Market Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 g5 Union Pacific Corp UNP 907818108 149 United Technologies Corp UTX 913017109 gg UnitedHealth Group Inc UNH 91324P102 gp Valero Energy Corp VLO 91913Y100 148 Verizon Communications Inc VZ 92343V104 72 VF Corp VFC 918209108 121 Wal-Mart Stores Inc WMT 931192103 130 Wells Fargo & Co WFC 949746101 100 XTO Energy Inc XTO 98385X106 Suh Total Common Stock -ADR 195 Aegon N V - NY Reg Shr ADR AEG 007929103 125 Allianz SE ADR AZ 018805101 51 BT Group PLC Spons ADR BT 05577E101 81 Canon Inc Spons ADR CAJ 138006309 10,668.40 12,341.15 1,672.75 149.60 1.21 8,495.34 10,798.03 2,302.69 190.72 1.77% 4,856.98 3,197.74 -1,659.24 2.94 0.09% 3,954.40 3,908.00 -46.40 38.40 0.98% 4,925.70 5,695.04 769.34 254.56 4.47% 3,984.79 5,355.36 1,370.57 167.04 3.12% 5,983.78 7,015.58 1,031.80 114.95 1.64% 3,940.69 3,867.50 -73.19 161.20 4.17% 4,024.66 6,186.00 2,161.34 48.00 0.78% $ 512252.41 545,203.76 32,951.35 7,975.41 1.46% 4,022.54 3,108.30 -914.24 149.27 4.80% 2,907.27 2,535.00 -372.27 80.32 3.17% 3,233.54 2,251.14 -982.40 153.08 6.80% 4,544.51 4,047.57 -496.94 77.07 1.90% USF Affiliate Services Inc. Page 16 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :05/01/2008 Time Printed :1:57:00 PM Account Name: Tequesta General Employees Pension As Of :05/01/2008 Account Number 80105025 Shares Asset Description Cost Market Unr Gain Loss Est Ann Inc Yield Prices As Of :04/30/2008 148 Cemex SA Spons Part Cer ADR 4,633.36 4,092.20 -541.16 0.00 0.00% CX 151290889 1g2 Danske Bank A/S Unspons ADR 4,189.13 3,146.78 -1,042.35 110.76 3.52% DNSKY 236363107 57 Diageo plc Spons ADR 4,686.88 4,668.30 -18.58 153.05 3.28% DEO 25293Q205 59 E ON AG Spons ADR 2,906.74 4,007.10 1,100.36 98.14 2.45% EON 268780103 137 Infosys Technologies Spons ADR 5,754.88 5,985.53 230.65 38.37 0.64% INFY 456788108 142 KT Corp Spons ADR 3,211.27 3,283.04 71.77 100.08 3.05°h KTC 48268K101 108 Marks & Spencer plc ADR 3,236.94 1,627.78 -1,609.16 87.53 5.38% MAKSY 570912105 142 Nokia Corp Spons ADR 5,765.13 4,269.94 -1,495.19 79.77 1.87% NOK 654902209 271 NTT DoCoMo Inc Spons ADR 4,626.45 3,970.15 -656.30 96.57 2.43% DCM 62992M201 60 Petroleo Brasileiro SA Spons ADR 2,671.75 6,066.00 3,394.25 24.70 0.41% PBR/A 71659V101 8g Sanofi-Aventis SA ADR 4,029.08 3,395.04 -634.04 187.01 5.51% SNY 80105N105 134 Telecom Italia SpA Spons ADR 3,267.21 2,188.22 -1,078.99 166.93 7.63% TI/A 87927Y201 g5 Telefonos de Mexico SA Spons ADR 3,211.97 3,425.70 213.73 76.86 2.24% TMX 879403780 34 Toyota Motor Corp Spons ADR 4,118.36 3,451.00 -667.36 73.60 2.13% TM 892331307 USF Affiliate Services Inc. Page 17 of 18 Account Holdings As Of Filtered By: Selected Accounts Sorted By :Account Number Date Run :0.5/01 /?008 Account Name: Tequesta General Employees Pension Shares Asset Description As Of :05/01/2008 Cost Prices As Of :04/30/2008 Time Printed :1:57:00 PM Account Number 80105025 Market Unr Gain Loss Est Ann Inc Yield 186 Wolseley plc ADR WOS 97786P100 43 Woori Finance Holdings ADR WF 981063100 110 Yara International ADR YARIY 989851209 85 Zurich Financial Svcs ADR ZFSVY 98982M107 Sub Total Exchange Traded Funds-Fixed 242 iShares Lehman 3-7 Year Treasury Bond Fd IEI 469288661 Sub Total Exchange Traded Funds-Equity 156 iShares MSCI EAFE Growth Index Fd EFG 469288885 4,397.01 1,869.49 -2,527.52 120.95 6.47% 3,250.80 2,549.47 -701.33 22.82 0.90% 3,255.44 8,029.34 4,773.90 66.53 0.83% 2,480.73 2,589.02 108.29 107.88 4.17% $ 84,400.99 80,556.11 x,844.88 2,071.29 2.57% 25,068.60 26,097.28 1,028.68 984.46 3.77% $ 25,088.60 26,097.28 1,028.68 984.46 3.77% 12,362.22 11,796.72 -565.50 110.30 0.94% Sub Total $ Grand Total $ Principal Cash: o.oo Income Cash: o.oo 12,352.22 11,795.72 -565.50 110.30 0.94% 1,035,106.41 1,071,912.34 36,605.93 29,100.22 2.71% Invested Income: o.oo USF Affiliate Services Inc. 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