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Home My WebLink AboutDocumentation_Pension Public Safety_Tab 04A_11/09/2004Investment Review VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND November 9, 2004 Representing Northstar Capital Management, Inc. Peter V. Van Beuren, Principal Stephen K. Mergler, Principal NORTHSTAR CAPITAL MANAGEMENT, INC. INVESTMENT COUNSEL 4400 PGA Boulevard, Suite 600 Palm Beach Gardens, Florida 33410 (561) 775-5880 (Sbl) 775-5909 FAX TABLE OF COl~T ~~ ~~- Section 1: An Overview of Northstar Capital Management, Inc. Section 2: Investment Philosophy & Strategy A. Quality Growth Equity Management B. Fixed Income Management Section 3: A. Summary of Investment Guidelines B. Portfolio Status C. Equity Characteristics D. Performance Results E. Cash Flow Figures Section 4: Financial Outlook A. Financial Market Review B. Economic Benchmarks Section 5: September 30, 2004 Appraisal Section 6: Purchase, Sale & Commission Report Section 7: Proxies Section 8: Corporate Biographies NORTHSTAR CAPITAL MANAGEMENT FIRM STRUCTURE & HISTORY ~ Structure - Northstar Capital Management, Inc. is 100% employee owned. ~ Board of Directors - H. Kent Mergler, CFA, CIC -President - Robert G. Jacobsen, CFA, CIC -Senior Vice President - Peter V. Van Beuren -Senior Vice President - Stephen K. Mergler, JD -Vice President - Margaret R. Rogers -Vice President -~ History - Northstar has offered the same investment style and service since our Team was established in 1992. Originally, our group was an autonomous product team and profit center of a national firm. As that firm restructured in preparation for sale to a foreign entity, we elected to acquire our operation to maintain the integrity of our product and our independence. 1-1 i NORTHSTAR QUALITY GROTTH EQ UITY MANAC EMENT TEAM Name "Title and Responsibility Exp Education Degree Ycar Brandon A. Dorsey Equity Trader 11 Boston College BS 1994 Robert G. Jacobsen, CFA, CIC Senior Vice President and Portfolio Manager Eileen McCarthy H. Kent Mergler, CFA, CIC Vice President and Portfolio Manager President and Portfolio Manager N Stephen K. Mergler, JD Jason J. McPharlin Vice President and Portfolio Manager Associate Meg R. Shea Vice President and Marketing Contact 33 Georgia State University 34 University of Illinois 41 University of Cincinnati 8 University of Florida 1 Thunderbird 14 St. Mary's College of Calif MBA 1971 BA 1953 MBA 1964 JD 1991 MBA 1997 BS 1987 Peter V. Van Beuren Senior Vice President and Portfolio 40 Colgate University BA 1961 Manager Selected members of the Group comprise the Investment Management Team for the quality growth equity product. That Investment Management Team meets regularly to establish parameters for, and to evaluate the composition of, quality growth accounts. However, the portfolio managers for any particular account ultimately have the discretion to purchase and sell securities for that account. NORTHSTAR QUALITY GROWTH EQUITY MANAGEMENT Investment Philosophy 1~ We believe high quality, high earnings growth companies provide superior investment returns over full market cycles Investment Process I® Investment research screens help identify "wealth creators" IIC Fundamental, bottom-up analysis is performed to target companies with growth characteristics I® A portfolio of approximately 30 names representing the "best ideas" of our portfolio management team is selected ~ Holdings are monitored to assure competitive advantage and growth characteristics IIQ Analysis of market characteristics is used to monitor current holdings and to screen our universe for new buy ideas 2-1 NORTHSTAR QUALITY FIXED INCOME MANAGEMENT Portfolio Construction -Fixed Income ~ Primary focus on investment grade debt securities. I® Debt securities include: Asset and Mortgage Backed Securities Commercial Paper Convertible Bonds Corporate Bonds and Notes Government Issues, including Agencies Municipal Bonds III Yield spreads vs. Treasury bonds are monitored and evaluated by sector, industry and issue to identify relative value. 1® We avoid interest rate speculation but will seek to capitalize on secular interest rate trends. Fixed Income Portfolio Characteristics We attempt to add value through: IIC Yield Advantage (verses benchmark index) III Above Average Call Protection (consistent with interest rate and economic outlook) ~ Appropriate Volatility (consistent with benchmark index} IIC Prudent Duration (gradual adjustments with a bias towards intermediate and long-term securities) 2-2 Fixed Income - Building a Client Portfolio 2-3 VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND Summary of Investment Guidelines Investment Objectives: 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 one or two years or less. Long Term Asset Mix Guidelines: Fixed Income Securities Equities (Including Convertible Issues & Foreign Securities) Cash Equivalents (under 1 yr maturity} Limitations and Restrictions: MAXIMUM MINIMUM 60% 35% 60% 0% 50% 0% Equities both foreign and domestic including convertible bonds should not exceed 60% of fund assets at cost No more than 10% in foreign securities No short selling, security lending, private placements, lettered stock or real estate No speculating infixed income or interest rate futures No bonds below top four grades -but only 25% permitted in BAA No more than 5% in capital stock of any one issuing company No more than 5% of aggregate investment of any one issuing company No repurchase agreements No investments prohibited under Florida Statutes 112.661 Benchmarks: Equities: S&P 500 Index (60%) Fixed Income: Lehman Brothers Intermediate Bond Index (40%) (Lehman Bros. Government/Credit Intermediate Bond Index) 3-1 * CORRECTED* VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND PORTFOLIO STATUS PORTFOLIO STATUS: AS OF September 30, 2004 Asset Mix Cash Equivalents 11.9% Equities 54.6% Bonds 33.5% Income Estimated Annual Yield of 2.2% Equity Characteristics Portfolio S&P 500 Index 2004 Price Earnings Multiple 24.6 X 16.2 X Projected 5-Year Earnings Growth 17.7 % 7.0 2003 Return on Equity 23.8 % 17.3 Current Yield 0.6 % 1.7 Diversification Summary Portfolio S&P 500 Index Consumer Discretion 23.7 11.2 Consumer Staples 3.3 10.7 Energy 5.7 7.5 Financials 19.1 20.1 Health Care 18.2 13.2 Industrials 11.8 11.7 Information Tech 15.6 15.9 Materials 0.0 3.1 Telecommunications 2.6 3.7 Utilities 0.0 2.9 100.0 % 100.0 Fixed Income Characteristics Leman Bros. Govt/Credit Portfolio Intermediate Index Duration 5.0 Yrs 3.8 Yrs Average Maturity 6.1 Yrs 4.4 Yrs Yield to Maturity 5.2 % 3.5 Average Quality AA+ Aa2 3-2 VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND PORTFOLIO STATUS PORTFOLIO STATUS: AS OF September 30, 2004 Asset Mix Cash Equivalents 11.9% Equities 33.5% Bonds 54.6% Income Equity Characteristics Estimated Annual Yield of 2.2% 2004 Price Earnings Multiple Projected 5-Year Earnings Growth 2003 Return on Equity Current Yield Diversification Summary Consumer Discretion Consumer Staples Energy Financials Health Care Industrials Information Tech Materials Telecommunications Utilities Fixed Income Characteristics Duration Average Maturity Yield to Maturity Average Quality Portfolio S&P 500 Index 24.6 X 16.2 X 17.7 % 7.0 23.8 % 17.3 0.6 % 1.7 Portfolio S&P 500 Index 23.7 11.2 3.3 10.7 5.7 7.5 19.1 20.1 18.2 13.2 11.8 11.7 15.6 15.9 0.0 3.1 2.6 3.7 0.0 2.9 100.0 % 100.0 Leman Bros. Govt/Credit Portfolio Intermediate Index 5.0 Yrs 3.8 Yrs 6.1 Yrs 4.4 Yrs 5.2 % 3.5 AA+ Aa2 3-2 FUNDAMENTAL CHARACTERISTICS OF THE CURRENT HOLDINGS IN THE VILLAGE OF TEQUESTA PUBLIC SAFETY PORTFOLIO 9/30/2004 [:mm~anv Name w w 5 Yr EPS 1 Yr EPS IBES Forward Estimated Symbol Historical Historical 5Yr Fut 4 Qtrs P/E to Current Current Growth (%1 Growth 1%1 Growth I%1 PIE Ixl Growth ROE 1%) Yield (%1 AMBAC FINANCIAL GROUP INC ABK 17.97 21.98 15.00 11.80 0.80 15.40 0.63 ALCON INCORPORATED ACL 14.41 33.14 17.00 29.30 1.70 45.08 0.70 AMGEN INCORPORATED AMGN 17.43 28.03 20.00 20.90 1.00 12.75 0.00 APOLLO GROUP INCORPORATED APOL 40.76 44.54 25.00 30.10 1.20 26.29 0.00 AMERICAN EXPRESS COMPANY AXP 8.35 17.13 13.00 17.30 1.30 21.41 0.93 BED BATH & BEYOND INCORPORATED BBBY 30.88 31.53 20.00 21.00 1.00 22.14 0.00 BJ SERVICES COMPANY BJS 63.75 63.37 15.00 22.10 1.50 14.96 0.61 CAPITAL ONE FINANCIAL CORPORATION COF 32.10 25.42 15.00 11.40 0.80 22.50 0.14 COACH INCORPORATED COH 54.97 72.15 20.00 23.60 1.20 41.36 0.00 CISCO SYSTEMS INCORPORATED CSCO 14.21 27.78 15.00 20.30 1.40 18.23 0.00 DELL INCORPORATED DELL 11.89 25.27 17.00 24.70 1.50 48.47 0.00 GENENTECH INCORPORATED DNA 20.53 15.31 29.00 51.90 1.80 9.44 0.00 EBAY INCORPORATED EBAY 116.37 65.22 37.00 61.70 1.70 12.37 0.00 FEDEX CORPORATION FDX 11.32 39.58 15.00 17.70 1.20 15.28 0.33 GENERAL ELECTRIC COMPANY GE 9.16 10.71 10.00 19.40 1.90 18.63 2.38 HARMAN INTL INDUSTRIES INC HAR 23.32 47.10 25.00 35.00 1.40 20.13 0.05 INTERNATIONAL GAME TECHNOLOGY IGT 26.63 14.00 15.00 23.70 1.60 21.95 1.34 L-3 COMMUNICATIONS HOLDINGS INC LLL 26.97 25.30 15.00 17.70 1.20 12.35 0.60 LOWES COMPANIES INCORPORATED LOW 26.32 18.40 18.00 17.50 1.00 19.61 0.29 MOODYS CORPORATION MCO 25.71 27.14 15.00 25.10 1.70 99.90 0.41 MEDTRONIC INCORPORATED MDT 17.77 16.44 16.00 25.60 1.60 23.41 0.65 MARVELL TECHNOLOGY GROUP LTD MRVL 37.53 999.90 30.00 28.10 0.90 4.20 0.00 MICROSOFT CORPORATION MSFT 8.60 40.00 12.00 21.80 1.80 16.23 1.16 NEXTEL COMMUNICATIONS CL A NXTL NMN 139.02 14.00 13.30 1.00 35.30 0.00 PFIZER INCORPORATED PFE 18.88 2.01 12.00 13.30 1.10 17.21 2.22 PROCTER & GAMBLE COMPANY PG 10.28 13.97 11.00 20.30 1.80 35.61 1.85 STARBUCKS CORPORATION SBUX 27.61 35.94 21.00 39.50 1.90 15.59 0.00 SMITH INTERNATIONAL INCORPORATED SII 31.78 85.56 15.00 26.60 1.80 13.53 0.00 STRYKER CORPORATION SYK 29.17 31.47 20.00 29.50 1.50 23.91 0.15 SYMANTEC CORPORATION SYMC 28.56 45.56 16.00 31.70 2.00 18.88 0.00 WACHOVIA CORPORATION WB -1.24 22.77 10.00 11.40 1.10 15.17 3.41 Portfolio Avera e 26.73 67.28 17.68 24.62 1.40 23.78 0.58 S&P 500 INDEX WITH OPERATING EPS SPX 0.36 26.97 7.00 16.20 2.31 17.33 1.67 Portfolio Data / S&P Data 74.26 2.49 2.53 1.52 0.60 1.37 0.34 ' VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS PEN TR FD EQUITY Relative Sector Allocation (October 01, 2004) ~ILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS PEN TR FD EQUITY Tech Industrl 15.6% 11.$% -- Tech ~ Telecoms 15.9% Sector Groups ~ Percent of Current Total Portfolio Over/Under Return (Current) Sector % 4Weeks % Materials -3.15 Industrials 11-78 0.04 1.91 Telecommunications Services 2.55 -1.10 2.23 Consumer Discretionary 23.85 12.64 7.43 Health Care 18.16 4.98 2.14 Consumer Staples 3.31 -7-41 -3.55 Energy 5.66 -1.79 5.59 Financial 19.09 -1.03 4.75 Information Technology 15.59 -0.27 6.69 Utilities _2.90 Mkt. wgt. S&P 500 avgs. Total portfolio avg. -share weighted 0.94 4.6 l>7ergy 7.5% SAP 500 Utility Material 2.9°1° 3.1% Industrl 11.7% Telecoms 3.7% h.~ti,"~ Cons~isc 11.2% Staples 10.7% FlthCare 13.2% 3-4 VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND TOTAL RETURNS 12/31 /03- 9/30/03- 10/31 /97- 9/30/04 12/31 /03- 9/30/04 10/31 /03- 9/30/04 10/31 /97- Calendar Year 11 /05/04 Fiscal Year 10/31 /04 Since Inception* 11 /05/04 W Equities (Plus Cash) + 6.5 % + 11.3 % + 12.8 % + 9.4 % + 55.2 % + 62.2 Equities (Only) + 7.4 % + 12.6 % + 14.4 % + 10.5 % + 55.6 % + 63.1 S&P5001ndex +1.6% + 6.4% +13.9% + 9.4% +34.7% +41.2% Bonds (Plus Cash) + 3.4 % + 4.3 % + 3.1 % + 4.6 % + 43.9 % + 45.1 Bonds (Only) + 3.5 % + 4.5 % + 3.1 % + 4.8 % + 48.4 % + 49.8 Lehman Bros. Govt/Credit + 2.6 % + 2.7 % + 2.7 % + 4.3 % + 55.1 % + 55.3 Intermediate Index Total Portfolio + 5.4 % + 8.6 % + 9.0 % + 7.6 % + 49.7 % + 54.3 60%S&P 500/ +2.0% + 4.9% + 9.4% + 7.4% +42.9% +46.8% 40% Int. Govt./Credit Index * Inception 10/31/97 W ~„ VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND TOTAL RETURNS 12/31 l03- 9/30/03- 10/31 /97- 9/30/04 9/30/04 9/30/04 Calendar Year Fiscal Year Since Inception* Equities (Plus Cash) + 6.5 % + 12.8 % + 55.2 Equities (Only) + 7.4 % + 14.4 % + 55.6 S&P 500 Index + 1.6 % + 13.9 % + 34.7 Bonds (Plus Cash) + 3.4 % + 3.1 % + 43.9 Bonds (Only) + 3.5 % + 3.1 % + 48.4 Lehman Bros. Govt/Credit + 2.6 % + 2.7 % + 55.1 Intermediate Index Total Portfolio + 5.4 % + 9.0 % + 49.7 60% S&P 500/ + 2.0 % + 9.4 % + 42.9 40% Int. Govt./Credit Index * Inception 10/31/97 VILLAGE OF TEQUESTA PUBLIC SAFETY CONTRIBUTIONS/WITHDRAWALS OCTOBER 1, 2003 TO SEPTEMBER 30, 2004 October 16 6021.38 17 3128.92 23 2,212.01 23 172.00 24 6,322.95 29 894.01 November 04 3,576.06 10 6,153.52 20 39.51 20 95.97 21 6,491.38 December 04 7,259.23 19 6,929.27 22 102.87 23 411.47 31 7,441.61 January 20 7,507.23 20 45.42 30 6,794.04 February 12 3,082.10 13 443.82 17 6,378.47 17 27.42 17 4,422.00 25 1,908.00 26 200.00 26 350.00 March O1 6,888.60 03 300.00 10 6,170.00 19 4,612.00 19 203.72 22 21.53 22 14.19 29 6,443.26 April 02 22.97 OS 42.34 12 6,236.23 23 6,326.37 3-6 26 6,860.58 26 1,526.03 26 4,734.85 27 18.10 27 1,715.15 27 43.06 27 1,183.71 May 06 6,272.69 12 112.90 13 2,142.49 13 4,560.00 24 6,265.84 June 07 6,247.66 25 6,938.14 30 67.50 30 67.50 30 28.78 July 07 225.58 07 995.35 07 613.65 08 6,512.10 09 845.25 19 11,964.85 August 02 6,208.92 12 4,591.00 13 225.80 16 1,613.45 20 6,155.07 30 6,098.54 September O1 56,535.86 O1 67,950.00 27 6,665.73 28 5,654.77 $309,613.97 $51,544.22 3-7 VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND Financial Market Review Close Close Close 12/31 /02 12/31 /03 9/30/04 S&P's 500 Stock Index 879.82 1,111.92 1,114.58 Prime Rate 4.25% 4.00% 4.75% Federal Funds Rate 1.25% 1.00% 1.75% 90 Day U.S. Treasury Bills 1.19% 0.92% 1.70% 5 Year U.S. Govt Notes 2.73% 3.25% 3.37% 10 Year U.S. Govt Notes 3.81 % 4.25% 4.12% 30 Year U.S. Govt Bonds 4.76% 5.07% 4.89% Total Returns 12 Mos. 12 Mos. 9 Mos. 12/31 /02 12/31 /03 9/30/04 S&P 500 Stock Index - 22.1 % + 28.6% + 1.51 Lehman Bros. Int. Govt/Credit + 9.8% + 4.3% + 2.59% Index 4-1 ECONOMIC BENCHMARKS AS OF 10/19/04 2000 2001 2002 2003A 1. Real G.D.P. % 3.50 0.50 2.40 3.10 2. C.P.I. % 2.60 1.56 2.43 1.90 3. Industrial Production % 4.20 -5.74 1.48 2.30 4. Light Vehicle Sales 16.20 16.70 16.80 16.70 5. Housing Starts (millions of units) 1.60 1.60 1.70 1.85 6. S&P Reported E.P.S. 50.00 24.90 28.00 49.24 °~ Change 4 -50 12 76 7. S8P Dividends Per Share °~ Change 8. Price-Earnings Ratios Range (One Year-End S8tP 500 Index) 2004E 4.00 3.00 2.70 16.80 2.00 54.00 10 16.27 15.74 16.08 17.38 18.76 -3 -3 2 8 8 22-31 X 22-46X 22-46X 27-38X 13-26X The information presented m this report has been developed in[emafly and/or obtained from sources which Northstar Capital Management, [nc. believes to be reliable; however, Northstar does not guarantee the accuracy, adequacy or completeness of such information nor does it guarantee the appropriateness of airy strategy refereed to vt this report for any particular client This report is provided for informational purposes only and is not to be coristruc[ed as advice or a recommendation for the purchase or sale of a severity. Ecoramic forecasts reflect subjective judgments and assurtrplions, and unexpected events may occur. Therefore, there can be no assurance that developments will transpire as forecasted in this report. This repoR reflects the opinion of Notthstar on the date made and is subject to change at any time with notice. 4-2 Northstar Capital Management, Inc. SUMMARY OF INVESTMENT POSITION VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND 4806P3 Septembe~~ 30, 2004 Total "/o Est. Annual Classification Market Value Total Fund Income CASH INSTRUMENTS CASH -71,920 -3.0 MONEY MARKET FUNDS 357,399 14.9 TOTAL ASSET CLASS 285,479 11.9 FIXED INCOME BONDS U.S. GOVERNMENTS TOTAL ASSET CLASS COMMON STOCK CONSUMER DISCRETIONARY CONSUMER STAPLES ENERGY FINANCIALS HEALTHCARE INDUSTRIALS TECHNOLOGY TELECOMMUNICATION SERVICES TOTAL ASSET CLASS TOTAL PORTFOLIO 0 2,359 2,359 Curr Yield 0.0 0.7 0.8 266,561 11.1 15,495 5.8 534,508 22.3 26,360 4.9 801,069 33.5 41,855 5.2 311,676 13.0 275 0.1 43,296 1.8 1,456 3.4 73,957 3.1 192 0.3 249,385 10.4 2,551 1.0 237,305 9.9 2,020 0.9 153,921 6.4 1,368 0.9 203,634 8.5 224 0.1 33,376 1.4 0 0.0 1,306,550 54.6 8,086 0.6 2,393,098 100.0 52,300 2.2 Northstar Capital Management, Inc. PORTFOLIO DETAIL VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND 4806P3 Septenzber 30, 2004 Security Call Call Unit Total Market Annual Curr Quantity Description Date Price Cost Cost Price Value Income Yield CASH INSTRUMENTS ('ASH CASH ACCOUN'T' PENDING ('ABEL CASH TOTAL MONEY MARKET FUNDS SHORT TERM PAPER U.S. GOVT MONEY MARKET FUNDS TOTAL CASH INSTRUMENTS TOTAL FIXED INCOME U.S. GOVERNMENTS AGENCIES 25,000 FEDERAL HOME LOAN BANKS 6.240'% Due 12-11-06 50,000 FEDERAL. HOME LOAN MTG CORP. 3.500% Due 09-15-07 25,000 FEDERAL HOME LOAN BANK BOND 5.250% Due 02-13-09 50,000 FEDERAL HOME LOAN BANK 5.550% Due 10-18-11 50,000 FEDERAL HOME LOAN BANK 4.700% Due 10-04-11 50,000 FEDERAL HOME LOAN BANK 5.000% Due 04-I 5-14 50,000 FEDERAL HOME LOAN BANK 5.550% Due OS-18-14 50,000 FEDERAL FARM CREDIT 5.000'% Due 08-25-10 50,000 FED HOME LOAN BANK 4.100% Due 03-30-09 50,000 FEDERAL HOME LOAN BANK 5.250% Due 10-17-13 50,000 FEDERAL HOME LOAN BANK 5.200% Due 01-23-14 25,000 FEDERAL ROME LOAN MORTGAGE CORP. 6.250% Due 03-OS-12 U.S. GOVERNMENTS TOTAL -71,920 -71,920 0 0.0 -71,920 -71,920 0 0.0 357,399 357,399 2,359 0.7 357,399 357,399 2,359 0.7 285,479 285,479 2,359 0.8 98.69 24,672 106.97 26,742 1,560 5.8 101.56 50,779 101.03 50,516 1,750 3.5 99.20 24,800 106.56 26,641 1,312 4.9 10-18-04 100.00 99.98 49,992 100.12 SO,OG2 2,775 5.5 04-04-OS 100.00 100.00 50,000 100.28 50,141 2,350 4.7 04-15-OS 100.00 100.00 50,000 100.16 50,078 2,500 5.0 08-18-OS 100.00 100.00 50,000 101.91 50,953 2,775 5.4 08-25-OS 100.00 100.00 50,000 101.72 50,859 2,500 4.9 09-30-OS 100.00 100.00 50,000 101.22 50,609 2,050 4.1 10-17-OS 100.00 100.00 50,000 101.59 50,797 2,625 5.2 Ol -23-OG 100.00 100.00 50,000 ] Ol .47 50,734 2,600 5.1 03-OS-07 100.00 100.50 25,125 105.50 26,375 1,562 5.9 525,368 534,508 26,360 4.9 525,368 534,508 26,360 4.9 Northstar Capital Management, Inc. PORTFOLIO DETAIL VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND 4806P3 Septerr:ber• 30, 2004 Security Call Call Quantity Description Uate Price BONDS CORPORATES 25,000 AMERITECH CAP FUNDING CORP 6.300% Due 10-15-04 25,000 PENNSYLVANIA PWR & LT CO 6.500'% Due 04-O1-OS 25,000 PUBLIC SVC ELEC & GAS CO 6.250'% Due OI-Ol-07 25,000 BANKERS TR NY CORP SUB MTN BE 6.700% Due 10-O1-07 25,000 CSX "fRANS INC EQUIP TR 93-A 6.480°/, Due 03-15-08 25,000 FIRST UNION CORP 6.000% Due 10-30-08 25,000 VERIZON NEW ENGLAND INC 6.500% Duc 09-15-11 25,000 CREDIT SUISSE FB USA 6.soo'io nue o1-15-12 50,000 BANK OF AMERICA CORP 5.375% Due 06-15-14 BONDS TOTAL FIXED INCOME TOTAL COMM110N STOCK ENERGY OIL. & GAS -DRILLING & EQUIPMENT 700 SMITH INTERNATIONAL INC OIL WELL SERVICES 600 BJ SERVICES ENERGY TOTAL INDUSTRIALS AEROSPACE/DEFENSE 600 L3 COMMUNICATIONS HLDGS. EI,ICTRICAL EQUIPMENT 1,200 GENERAL ELEC' CO FREIGHT TRANSPORTATION 600 FEDEX CORP. Unit Total Cost Cost Price 99.12 24,781 100.12 98.22 24,556 101.96 100.00 25,000 106.38 99.57 24,R92 110.53 101.42 25,356 109.88 99.09 24,773 108.27 100.87 25,219 110.31 101.13 25,282 111.09 99.87 49,937 103.85 - 249,796 - _ 249,796 775,164 Market Annual Curr Value Income Yield 25,030 1,575 6.3 25,489 1,625 6.4 26,596 1,562 5.9 27,632 1,675 6.1 27,470 1,620 5.9 27,068 1,500 5.5 27,578 1,625 5.9 27,773 1,625 5.9 51,924 2,687 5.2 266,561 15,495 5.8 266,561 15,495 5.8 801,069 41,855 5.2 56.11 39,274 60.73 42,511 0 0.0 48.69 2_9,215 52.41 31,446 192 0.6 68,489 73,957 192 0.3 63.50 38,099 67.00 40,200 240 0.6 27.59 33,109 33.58 40,296 960 2.4 84.22 50,534 85.69 51,414 168 0.3 Northstar Capital Management, In c. PORTFOLIO DETAIL VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND 4806P3 September 30, 2004 Securit~~ Call Call Unit Total Market Annual Curr Quantitq Description Date Price Cost _ __. Cost Price Value Income Yield SCHOOLS 300 APOLLO GROUP, INC. 25.49 7,646 73.37 _ 22,011 0 0.0 INDUSTRIALS TOTAL 129,388 153,921 1,368 0.9 CONSUMER DISCRETIONARY AUDIO/VIDEO PRODUCTS 300 HARMAN INTERNATIONAL 82.28 24,685 107.75 32,325 15 0.0 CASINO & GAMING 1,400 INTERNATIONAL GAME TECH 20.10 28,137 35.95 50,330 140 0.3 RETAIL-SPECIALTY 1,100 BED BATH AND BEYOND 30.62 33,685 37.1 l 40,821 0 0.0 1,000 COACH, INC. 39.20 39,198 42.42 42,420 0 0.0 1,000 LOWE'S COMPANIES 47.80 47,804 54.35 54,350 120 0.2 120,687 137,591 120 0.1 RESTAURANTS 1,000 STARBUCKS CORP COM 29.25 29,255 45.46 45,460 0 0.0 E-COMMERCE/SERVICES 500 EBAY INC. 65.19 32,595 91.94 45,970 0 0.0 CONSUMER DISCRETIONARY TOTAL 235,359 31 1,676 275 0.1 CONSUMER STAPLES HOUSEIiOLD PRODUCTS -PERSONAL CARE 800 PROCTER & GAMBLE CO 44.78 35,825 54.12 43,296 1,456 3.4 CONSUMER STAPLES TOTAL 35,825 43,296 1,456 3.4 FIEALTHCARE HEALTHCARE-BIOTECHNOLOGY 700 AMGEN INC 45.93 32,154 56.81 39,767 0 0.0 400 GENENTECH INC NEW 40.67 16,267 52.42 20,968 0 0.0 48,421 60,735 0 0.0 HEALTHCARE-DRUGS 1,100 PFIZER INC 33.90 37,287 30.60 33,660 748 2.2 HEALTHCARE -MEDICAL PROD/SUPPLY 600 ALCON INC. 78.11 46,865 80.20 48,120 871 1.8 900 MEDTRONIC INC 32.37 29,136 51.90 46,710 261 0.6 Northstar Capital Management, Inc. PORTFOLIO DETAIL VILLAGE OF TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND 4806P3 September 30, 2004 Security Call Call Unit Total Market Annual Curr Quantity Description Date Price Cost Cost Price Value Income Yield 1,000 STRYKER CORPORATION 35.79 35,789 48.08 48,080 140 0.3 1 l I ,790 142,910 I ,272 0.9 HEALTHCARE "fOTAI. 197,498 237,305 2,020 0.9 FINANCIALS I3ANKS & THRIFTS 1,000 FWANCIAL - CONS 600 1,000 700 700 WACHOVIA CORP. JMER/DIVERSIFIED AMBAC FINANCIAL GROUP INC AMERICAN EXPRESS CO CAPITAI.ONE FINANCIAL CORP MOODY'S CORP. FINANCIALS TOTAL 37.82 37,819 46.95 46,950 1,000 3.4 70.78 42,466 79.95 47,970 264 0.6 37.32 37,325 51.46 51,460 400 0.8 47.53 33,269 73.90 51,730 77 0.1 48.70 34,088 73.25 51,275 210 0.4 147,149 202,435 951 0.5 184,968 249,385 2,551 1.0 15.85 15,849 18.10 18,100 0 0.0 28.92 31,811 35.60 39,1 G0 0 O.U 47,660 57,260 0 0.0 34.35 48,091 27.65 38,710 224 O.G 21.63 25,958 54.88 65,856 0 0.0 74,049 104,566 224 0.2 22.45 35,916 26.13 41,808 0 0.0 157,625 203,634 224 0.1 27.12 37,962 23.84 33,376 0 0.0 37,962 33,376 0 0.0 1,047,113 1,306,550 8,086 0.6 2,107,756 2,393,098 52,300 2.2 TECI INOLOGY COMPUTERS - I IARDWARE 1,000 CISCO SYS INC 1,100 DELL INC. COMPUTERS -SOFTWARE/SERVK'ES 1,400 MICROSOFTCORP 1,200 SYMANTEC CORPORATION SEMICONDUCTORS 1,600 MARVELLTECHNOLOGYGROUP TECHNOLOGY TOTAL TELECOMMUNICATION SERVICES CELLULAR/WIRELESS TELECOM 1,400 NEXTEL COMMUNICATIONS CL A TELECOMMUNICATION SERVICES TOTAL COMMON STOCK TOTAL TOTAL PORTFOLIO September 3Q, 2004 Wachovia Securities Attn: Fred Kenney 3399 PGA Blvd Ste 400 North Palm Beach, Florida 33408-2713 ('USTODY NO. 8582-0313 Please use this letter as your notitication that we executed the following trade(s): Account: VILLAGE OF TEQUF.STA PUBLK' SAFETY OFFIC'ERS' PENSION TRUST FUND 4806P3 Trade Settle Date Date Activity Quantity Symbol Security Price 07-O1-04 07-07-04 BUY 50,000 060505bm5 BANK OF AMERICA 99.8750 07-O1-04 07-07-04 AC('RUED lN'1'ERES" 07-15-04 07-20-04 SELL 07-20-04 07-23-04 SELL 07-23-04 08-18-04 BUY 07-23-04 07-23-04 SELL 07-27-04 07-30-04 SELL. 07-27-04 07-30-04 BUY 08-02-04 08-OS-04 SELL 08-09-04 08-09-04 SELL, 08-10-04 08-13-04 SELL 08-24-04 08-27-04 BUY 09-16-04 09-21-04 BUY CORP 5.375% Due 06-15-14 1' 060505bm5 BANK OF AMERICA CORP 5.375% Due 06-15-14 500 wmt WAL MART' S"PORES 52.5800 INC 300 sbux STARBUCKS CORP 46.1600 COM 50,000 3133x83bG FEDERAL HOME 100.0000 LOAN BANK 5.50'% Due 08-18-14 25,000 3133mggs9 FEDERAL HOME 100.0000 LOAN BANK 6.000'% Due 07-23-OS 400 dna GENENTECH INC 48.6500 NEW 400 bjs BJ SERVICES 47.8600 200 apol APOLLO GROUP, INC. 75.4000 25,000 3133mgp83 FEDERAL HOME 100.0000 LOAN BANK 6.300% Due 08-09-1 1 1,000 var VARIAN MEDICAL 32.0800 300 fdx FEDEX CORP. 81.6400 300 fdx FEDEX CORP. 86.4400 Other Exchange Principal Commis. Fee Fec Net Amount Broker 49,937.50 0.00 0.00 0.00 49,937.50 WACHOVIA SE('URI"f1ES 26,290.00 75.00 0.00 0.62 13,848.00 55.00 0.00 0.33 50,000.00 0.00 0.00 0.00 25,000.00 0.00 0.00 216.49 26,214.38 WACHOVIA SECURITIES 13,792.67 WACHOVIA SECURITIES 50,000.00 SALOMON SMITH BARNEY 25,000.00 19,460.00 60.00 0.00 0.46 19,399.54 WACf10V[A SF.CLIRITIES 19,144.00 60.00 0.00 0.00 19,204.00 WACHOVIA SECURITIES 15,080.00 55.00 0.00 0.36 15,024.64 WACHOVIA SECURITIES 25,000.00 0.00 0.00 25,000.00 32,080.00 100.00 0.00 0.76 31,979.24 WACFIOVIA SECURITIES 24,492.00 55.00 0.00 0.00 24,547.00 WACHOVIA SECURITIES 25,932.00 55.00 0.00 0.00 25,987.00 WACHOVIA SL:CURI"PIES 09-16-04 09-21-04 BUY 09-I6-04 09-21-04 l3UY 09-17-04 09-20-04 SELL 09-17-04 09-20-04 ACCRUED INTEREST 09-17-04 10-04-04 BUY 09-23-04 09-28-04 SELL 09-23-04 09-28-04 SELL 09-23-04 09-28-04 BUY 09-23-04 09-28-04 BUY 09-23-04 09-28-04 BUY 09-23-04 09-28-04 BUY 09-30-04 10-OS-04 BUY 09-3(1-04 09-30-04 Slil.l. 200 syk STRYKIiR 46.9200 9,384.00 CORPORATION 200 bjs 13.1 SERVI('ES 49.7800 9,956.00 50,000 3128x06k0 FEDERAL HOME LN 101.1250 50,562.50 M"CG ('ORP. 4.250'%, Duc OS-OS-10 3128x06k0 FEDERAL HOME LN M"CG CORP. 4.250'%~ Due OS-OS-10 50,000 3133x8rg7 FEDERAL HOME 100.0000 50,000.00 LOAN BANK 4.700%, Due 10-04-11 400 teva T'EVA 25.8500 10,340.00 PHARMACEUTICAL 1,000 teva '1'EVA 25.8600 25,860.00 PHARMACEU"CICAL 300 acl ALCON INC. 78.9600 23,688.00 100 sii SMITH 59.8500 5,985.00 INTERNATIONAL INC 100 sii SMTHi 59.8400 5,984.00 INTIiRNA"I'IONAL [NC' 200 sbux STARBCIC'KS CORP 44.8200 8,964.00 COM 400 low I,OWE'S COMPANIES 54.6500 21,860.00 50,000 3133x15n3 EED I-TOME LOAN 100.0000 50,000.00 BANK 5.620°/~ Due 09-30-13 55.00 0.00 0.00 55.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.00 0.00 0.25 100.00 0.00 0.61 55.00 0.00 0.00 27.50 0.00 0.00 27.50 0.00 0.00 55.00 0.00 0.00 60.00 0.00 0.00 0.00 0.00 9,439.00 WACIiOVIA SECURI"DIES 10,011.00 WACHOVIA SECURI I'll'.S 50,562.50 FIRS"I' l'IiNN BANK 796.87 50,000.00 FIRS"1"CGNN BANK 10,299.75 WACHOVIA SECURITIES 25,759.39 WACHOVIA SECURI"fl[?S 23,743.00 WACHOVIA SECURI"1'1[5 6,012.50 WACHOVIA SECURITIES 6,011.50 WACIiOVIA SECURI"PIES 9,019.00 WACHOVIA SECURITIES 21,920.00 WAC'HOVIA SECURITIES 50,000.00 'I'l1ANK YOU Northstar Capital Management, Inc. ProxyEdge -Vote Summary by Account with Ballot Detail and Ballot Comments Meeting Date Range: 07/01/2004 to 07/31/2004 Report Date: 08/04/2004 Selected Groups - Tequesta Vote Page 1 of 4 Account - TEQUESTA PUBLIC SAFETY BED BATH 8 BEYOND INC. BBBY Annual Meeting Date: 07/01/2004 Holdings Reconciliation Date: 05/05/2004 Issuer: 075896 City: ISIN: Country: UNITED STATES Vote Deadline Date: 07/0112004 SEDOL: Vote Group: GLOBAL Agenda: 932182354 -MANAGEMENT Proposal Vote Number Cast MRV Proposal 01 For For ELECTION OF DIRECTORS 02 For For RATIFY APPOINTMENT OF INDEPENDENT AUDITORS 03 For For ADOPT INCENTIVE STOCK OPTION PLAN 04 For Against S/H PROPOSAL -CORPORATE GOVERNANCE 05 For Against S/H PROPOSAL -CORPORATE GOVERNANCE Custodian Internal Stock Voted Ballot Received Last Date Account Account Class Shares Shares Date Vote Date Confirmed OOOOOON01 K963853 A 4806P3 100 1,100 1,100 06/02/2004 07/01 /2004 ProxyEdge -Vote Summary by Account with Ballot Detail and Ballot Comments Meeting Date Range: 07/01/2004 to 07/31/2004 Report Date: 08/04/2004 Selected Groups - Tequesta Vote Page 3 of 4 Account - TEQUESTA PUBLIC SAFETY DELL INC. Annual Meeting Date: 07/16/2004 DELL Issuer: 24702R City: Holdings Reconciliation Date: 05/21/2004 ISIN: Country: UNITED STATES Vote Deadline Date: 07/16/2004 SEDOL: Vote Group: GLOBAL Agenda: 932 189473 -MANAGEMENT Proposal Vote Number Cast MRV Proposal 01 For For ELECTION OF DIRECTORS 02 For For RATIFY APPOINTMENT OF INDEPENDENT AUDITORS 03 For Against S/H PROPOSAL -FORM SHAREHOLDER ADVISORY COMMITTEE Custodian Internal Stock Voted Ballot Received Last Date Account Account Class Shares Shares Date Vote Date Confirmed OOOOOON01 K963853 A 4806P3 101 1,100 1,100 06/03/2004 07/15/2004 Pro Ed a -Vote Summary by Account with Ballot Detail and Ballot Comments XY 9 Meeting Date Range: 08/01/2004 to 08/31!2004 Repoli Date: 09/13/2004 Selected Groups - Tequesta Vote Page 3 of 4 Account - TEQUESTA PUBLIC SAFETY ' MEDTRONIC, INC. MDT Annual Meeting Date: 08!26/2004 Holdings Reconciliation Date: 07/02/2004 Issuer: 585055 City: ' ISIN: Country: UNITED STATES Vote Deadline Date: 08/28/2004 SEDOL: ' Vote Group: GLOBAL Agenda: 932209326 -MANAGEMENT Proposal Vote ' Number Cast MRV Proposal 01 For For ELECTION OF DIRECTORS 02 For For RATIFY APPOINTMENT OF INDEPENDENT AUDITORS 03 Against Against S/H PROPOSAL -CORPORATE GOVERNANCE Custodian Internal Stock Voted Ballot Received Last Date Account Account Ciass Shares Shares Date Vote Date Confirmed OOOOOON01 K963853 A 4806P3 106 900 900 07/26/2004 08/24/2004 08/25/2004 ProxyEdge -Vote Summary by Account with Ballot Detail and Ballot Comments Meeting Date Range: 09/01/2004 to 09/30/2004 Selected Groups - Tequesta Vote Account - TEQUESTA PUBLIC SAFETY Report Date: 09/30/2004 Page 1 of 2 SYMANTEC CORPORATION Issuer: 871503 City: ISIN: Country: UNITED STATES SEDOL: SYMC Annual Meeting Date: 09/15/2004 Holdings Reconciliation Date: 07/2012004 Vote Deadline Date: 09/1512004 Vote Group: GLOBAL Agenda: 932210026 -MANAGEMENT Proposal Vote Number Cast MRV Proposal 01 For For ELECTION OF DIRECTORS 02 For For APPROVE AUTHORIZED COMMON STOCK INCREASE 03 For For ADOPT INCENTIVE STOCK OPTION PLAN 04 For For AMEND DIRECTOR STOCK OPTION PLAN 05 For For RATIFY APPOINTMENT OF INDEPENDENT AUDITORS Custodian Internal Stock Voted Ballot Received Account Account Class Shares Shares Date Last Date Vote Date Confirmed OOOOOON01K963853A 4806P3 108 1,200 1,20008/06/2004 09/14/2004 CORPORATE BIOGRAPHIES 8-1 OIL & GAS -DRILLING EQUIPMENT SMITH INTERNATIONAL INC. Smith International Inc. is a worldwide supplier of products and services to the oil and gas exploration and production industry, the petrochemical industry and other industrial markets. The Company provides a line of products and engineering services, including drilling and completion fluid systems, solids-control equipment, waste-management services, production chemicals, three-cone and diamond drill bits, turbines, fishing services, drilling tools, underreamers, casing exit and multilateral systems, packers and liner hangers. OIL WELL SERVICES E3J SERVICES BJ Services Company is a provider of pressure pumping and other oilfield services serving the petroleum industry worldwide. The Company's pressure pumping services consist of cementing and stimulation services used in the completion of new oil and natural gas wells and in remedial work on existing wells, both onshore and offshore. Other oilfield services include completion tools, completion fluids and casing and tubular services provided to the oil and natural gas exploration and production industry, commissioning and inspection services provided to refineries, pipelines and offshore platforms and production chemical services. 8-2 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ . ~ ~ r ~ ~ ~ ~ ~ AEROSPACE/DEFENSE L-3 COMMUNICATIONS HOLDINGS INC. L-3 Communications Holdings, Inc. is a merchant supplier of secure communications and intelligence, surveillance and reconnaissance systems, training, simulation and support services, aviation products and aircraft modernization, as well as specialized products. The Company's customers include the United States Department of Defense and prime contractors thereof, certain United States Government intelligence agencies, major aerospace and defense contractors, foreign governments, commercial customers and certain other United States federal, state and local government agencies. ELECTRICAL EQUIPMENT GENERAL ELECTRIC General Electric Company develops, manufactures, and markets products for the generation, distribution, and utilization of electricity. The Company, through General Electric Capital Services, Inc., offers a variety of financial services including mutual fund management, financing, asset management, and insurance. General Electric also owns the National Broadcasting Company. FREIGHT TRANSPORTATION FEUEX CORPORATION FedEx Corporation provides transportation, e-commerce and business services with companies that operate independently and compete collectively under the respected FedEx brand. The Company's operations are primarily represented by Federal Express Corporation, FedEx Ground Package System, Inc. FedEx Freight Corporation and FedEx Kinko's Office and Print Services, Inc. FedEx Express is an express transportation company. 8-3 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I• ~ ~ ~ SCHOOLS APOLLO GROUP, INC. Apollo Group, Inc. provides higher education programs for working adults. The Company's subsidiaries include the University of Phoenix, the Institute for Professional Development, the College for Financial Planning, and Western International University. Apollo offers accredited degree programs, certificate programs, and customized training at campuses in the United States and Canada. AUD10/VIDEO PRODUCTS HARMAN INTERNATIONAL Harman International Industries designs, manufactures and markets high-fidelity audio products and electronic systems for the consumer and professional markets. The Consumer Systems Group has operating segments that design, manufacture and market audio and electronic systems for vehicle, home audio, video and computer applications. The Professional Group designs, manufactures and markets loudspeakers and electronics used by audio professionals in concert halls, stadiums, airports and other buildings and recording, broadcast, cinema and music reproduction applications. CASINO & GAMING 1NTERNATIONAL GAME TF,CHNOLOGY The Company is engaged in the design, manufacture and marketing of computerized casino ganiing products and operates proprietary gaming systems. 8-4 ~ ~ ~ ~ ~ ~ I• ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ RETAIL -SPECIALTY BEU BATH 8i BEYOND INC. Bed Bath & Beyond Inc. operates a chain of superstores that sell a variety of domestics merchandise and home furnishings. The Company's stores offer brand name merchandise such as Laura Ashley, Cuisinart, Calphalon, J.A. Henckels, and Krups. Bed Bath & Beyond operates throughout the United States. COACH INC. Coach, Inc. designs, produces, and markets primarily leather goods. The Company's products include handbags, business cases, men's and women's accessories, luggage and travel accessories, leather outerwear, and gloves. Coach, together with a licensing partner, offers watches, footwear, fiuniture, and eyewear. LOWES COMPANIES The Company is a home improvement, home decor and home construction retailer serving the do-it-yourself market. Its stores combine the merchandise, sales and service of a home improvement center, abuilding- contractor supply business and a consumer durables retailer. RESTAURANTS STARB[1CKS COFLPORA'I'ION The Company is engaged in the purchasing and roasting of high-quality whole bean coffees. It also sells them, along with a variety of coffee beverages and coffee-related accessories and equipment, primarily through Company-operated retail stores. 8-5 ~ ~ ~ ~ ~ ~ 1• ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ E-COMMERCE/SERVICES EBAY, INC. EBay Inc. operates a marketplace in which anyone, anywhre, can buy or sell practically anything. The Company has developed aWeb-based marketplace in which a community of buyers and sellers are brought together to browse, buy and sell various items. The Company's marketplace exists as an on-line trading platform that enables a global community of buyers and sellers to interact and trade with one another. HOUSEHOLD PRODUCTS -PERSONAL CARE PROCTER & GAMBLE CO The Procter & Gamble Company manufactures and markets consumer products in countries throughout the world. The Company provides products in the laundry and cleaning paper, beauty care, food and beverage, and health. care segments. Procter & Gamble's products include Pampers diapers, Tide laundry detergent, PUR drinking water systems, Crest toothpaste, and Vicks cough/cold products. 8-6 HEAL"THCARE-BIOTECHNOLOGY AMGEN 1NC. The Company is a biotechnology company engaged in the research and development of human therapeutics based on advances in cellular and molecular biology, its two major products are Epogen, an anti-anemic drug, and Neupogen, a white blood cell promoter. GENENTECH INCORPORATED Genentech, Inc. is a biotechnology company using human genetic information to discover, develop, manufacture and commercialize biotherapeutics for significant unmet medical needs. The Company manufactures and commercializes 10 biotechnology products directly in the United States. These include Herceptin, Rituxan, TNKase, Activase, Cathflo Activase, Nutropin Depot, Nutropin AQ, Nutropin human growth hormone, Protopin and Pulmozyme. HEALTHCARE-llRUGS PFIZER INC. Pfizer Inc. is aresearch-based, global pharmaceutical company that discovers, develops, manufactures, and markets medicines for humans and animals. The Company's products include prescription pharmaceuticals, non- prescription self-medications, and animal health products such as anti-infective medicines and vaccines. 8-7 HEALTHCARE -MEDICAL PRODUCTS/SUPPLIES ALCON INC. Alcon Inc. develops, manufactures and markets pharmaceuticals, surgical equipment and devices and consumer eye care products that treat eye diseases and disorders and promote the general health and function of the human eye. It has local operations in over 70 countries and its products are sold in more thar- 180 countries around the world. MEDTRONIC INC. Medtronic, Inc. provides device-based therapies that restore health, extend life, and alleviate pain. The Company's principal products include those for bradycardia pacing, tachyarrhytlunia management, atrial fibrillation management, heart failure management, heart valve replacement, malignant and non-malignant pain, and movement disorders. Medtronic's products are sold worldwide. STRYKER CORPORATION The Company develops, manufactures and markets specialty surgical and medical products, including endoscopic systems, orthopaedic implants, powered surgical instruments, and patient handling equipment for the global market. BANKS & THRIFTS WACHOVIA CORPORATION Wachovia Corporation is a bank holding company. Its branches are located in the Eastern and South Atlantic states and provide a wide range of commercial and consumer banking trust services and other financial services. 8-8 ['INANCIAL -CONSUMER/DIVERSIFIED AMBAC FINANCIAL GROUP ~ ~ ~ ~ ~ ~ ~ ~ Ambac Financial Group, Inc. is a holding company whose subsidiaries provide financial guarantee products and other financial services to clients in both the public and private sectors around the world. It provides financial guarantees for public finance and structured finance obligations through its principal operating subsidiary, Ambac Assurance Corporation. Through its financial services subsidiaries, Ambac Financial Group provides financial and investment products, including investment agreements, interest rate and total return swaps funding conduits, investment advisory and cash management services, principally to its clients which include municipalities and their authorities, school districts, healthcare organizations and asset-backed issuers. AMERICAN EXPRESS COMPANY The Company is a global travel and financial services firm providing customers with products and services including charge and credit cards, travelers cheques and other stored value products. It offers financial planning, brokerage services, mutual funds, insurance and other investment products. CAPITAL ONE FINANCIAL Capital One Financial Corporation is a financial services company whose primary business is offering credit card products. Its operations are conducted primarily through its subsidiary, Capital One Bank. The Company also offers consumer lending and deposit products, along with automobile and other motor vehicle financing products. MOODYS CORPORATION The Company is engaged primarily in the credit rating of corporations, financial institutions and the public sector. They also market products enabling clients to access this information. Geographic sales for 2002 were 70% in the US and 30% Other. 8-9 COMPUTERS-HARDWARE CISCO SYSTEMS The Company is a supplier of multiprotocol and multimedia routers, bridges, communication servers and network management products designed to meet customer inter-networking application requirements. Its customers span such industries as financial services, transportation, telecommunications, manufacturing, utilities, government, publistung, computing, universities and research centers. DELL COMPiJTER CORP. The Company is a direct marketer of high-performance personal computer systems and the Dell brand of personal computers including desktops, notebooks and servers. Geograpluc sales for 2002 were 65% in the US and 35% COMPUTERS-SOFTWARE/SERVICES NI IcROSOFT coRP Microsoft Corporation develops, manufactures, licenses, sells and supports computer software products. The Company offers operating system software, server application software, business and consmner applications software, software development tools, and Internet and Intranet software. Microsoft also develops the MSN network of Internet products and services. SYMAN'rEC CORPORATION The Company develops, markets and supports a diversified line of application and system software products designed to enhance individual and workgroup productivity as well as manage networked computing environments. The Company also offers internet security software 8-10 SEMICONDUCTORS MARVELL TECHNOLOGY CROl1P Marvell Technology Group Ltd. Is a global semiconductor provider of broadband communications and storage solutions. The Company's product portfolio consists of switching, transceiver, wireless, PC (personal computer) connectivity, gateways, communications controller and storage solutions that power the entire communications infrastructure, including enterprise, metro, home and storage networking. Its core technologies were initially focused on the storage market, where it provided products to disk drive manufacturers such as Fujitsu, Hitachi, Samsung, Seagate and Toshiba. CELLULAR/WIRELESS TELECOM NEXTEL COMMl1NICA"PIONS Nextel Communications, Inc. is a provider of wireless communications services in the United States. The Company's service offerings include digital wireless service, Nextel Direct Connect, its long-range digital walkie-talkie service; wireless data, including a-mail and text messaging and Nextel Online services, which provide wireless access to the Internet, an organization's internal databases and other applications. 8-l 1.