General Body Meeting 04.07.11

1. General Body Meeting 04.07.11

2. Agenda • Announcements • News Updates • Industrials Sector Pitch

3. Announcements

4. Senior Analyst Applications • Senior Analyst Application for Fall • Take Charge of a Sector • Applications open TODAY Deadline: Friday 4/15

5. News Updates

6. Unemployment Good… • US unemployment rate dips to 8.8% in March • Payrolls up 216,000; + 230,000 private • 12 consecutive months of private sector job growth • March avg. workweek and avg. hourly earnings flat • …Bad • 45.5% out of work 6+ months; 4x average since 1970s (~6 million) • 64.2% in labor force; lowest in 25yrs • March avg. workweek and avg. hourly earnings flat

7. The Budget Basics • Barack Obama’s plan for 2012 Budget • Jobs, health care, clean energy, education, and infrastructure will be priorities. • Estimates: • Total Revenue = $2.627 trillion • Total Expenditures = $3.729 trillion • Total Deficit = $1.101 trillion • For Specific Information: • http://www.whitehouse.gov/omb/budget

8. Recent Budget News • Republicans seem to be taking this time to pressure the democrats into enormous budget cuts. • House Republicans move ahead with a one-week extension • Includes more budget cuts that the White House has already rejected • The government authority to spend money runs out on Friday night*** • Yesterday afternoon President Obama called a nighttime conference • Discuss the current stalemate between the two parties as to where and how to cut the spending • The key opposing republican figure is Mr. Boehner • Possible shut down of government spending on Saturday • 800,000 federal employees could be laid off • National Parks and the Smithsonian would potentially close

9. 2012 Presidential Election: What to Expect • Based on pre-election polling republicans seem to be making strong progress • If Republicans take office then there is a strong chance that there will be significant budget cuts • Either way, in the near future it appears that there will have to be bipartisan support for budget cuts

10. Tech Supply Chain • 8.9 Earthquake in Japan: major impact on Tech supply chain • Disruption for Japanese companies • Sony: closed 6 factories, 1 semiconductor plant • Panasonic: suspended a hybrid car battery JV • Sharp, Mitsubishi, Sanyo & Panasonic: unspecified major disruptions • Nikon, Fujitsu (6/11 factories affected), Casio, Hitachi: scaling back operations • Renesas: 7/22 factories shut (top NAND producer)

11. Tech Supply Chain • 8.9 Earthquake in Japan: major impact on Tech supply chain • Disruption for foreign companies • TI: semiconductor factory heavily damaged • Apple: components from Toshiba (NAND), Elpida (DRAM), Asahi Glass (screen), and AKM (compass) • Most affected components • Semiconductors, NAND, DRAM, LEDs

12. Tech Supply Chain • Direct Factory Damage • Rolling Blackouts • Forcing Japanese tech companies to scale back operations (will continue through summer) • High precision fabrication plants require stable, reliable power • Transportation Difficulty • Destruction of roads, infrastructure • Debris, clearing of areas hit by disaster

13. Tech Supply Chain • Apple Impact? • Apple has tremendous power in the supply chain, frequently orders very early • Likely to be least affected by component supply shortages in NAND, DRAM • There may be an effect on specialized components • Consumer Impact? • Tech prices very unlike oil, slow to react • Component price hikes will first hurt component buyers, impact on end-consumers will be small (if any arises)

14. Japan Disaster Impact on Luxury Japan represents 23% of world market for hard/soft luxury goods Burberry shares down 5% in days after earthquake Analysts cite weaker consumer sentiment in the nation as well as a huge community awareness of conspicuous consumption The effects on the world economy still unclear and global consumer sentiment has been shaken as well

15. Still some optimism remains with growing Chinese market and a hope for quick recovery in Japan • Shares have been experiencing extraordinary growth in the past year with stellar performance from leading brands such as Burberry, LVMH and Tiffany’s.

16. Procter & Gamble sells Pringles • PG announced the sale of the Pringles brand of chips to Diamond Foods in a deal valued at $2.35 billion which includes Diamond Foods paying $1.5 billion in stock and assuming $850 million of Pringles’ debt on April 6 • The divestiture is the final piece of the company strategy to exit the food business and focus on its core businesses of beauty, health and home products • The deal values Pringles at an enterprise value of 1.6X revenue and at 9.8X EBITDA, in line with comparable companies in the industry

17. David Sokol Resigns from Berkshire Hathaway • David Sokol has resigned from Berkshire Hathaway as of March 28th 2011 • Formerly Chairman, President and CEO of NetJets and Chairman of MidAmerican Energy Holdings Company • Was considered a likely favorite to take over from Warren Buffet (80) • Resignation came as a shock to many Berkshire employees and Buffet also emphasized that it was “unusual”

18. David Sokol Resigns from Berkshire Hathaway • Class A shares of Berkshire Hathaway fell more than 2 percent after resignation • Resignation could be due to Sokol’s personal stake in Lubrizol which he successfully pitched to the Berkshire board • SEC has not filled any charges and Buffett does not feel this is an issue of insider trading • Sokol cited personal reasons in his letter of resignation

19. Keppel Corp. (BN4.SI) & (KPELY.PK) David Wong Alan Calabrese Nick Hosseini Daryl Lin Marshall Verdi

20. Thesis • High growth potential in core segments • Well diversified firm • Exposure to high GDP growth Asian economies • Extremely strong pipeline of orders and contracts

21. Corporate Structure Nick

22. Keppel Corp. • Diversified Mid/Large-Cap conglomerate with 4 main subsidiaries

23. Geographical Distribution

24. Offshore and Marine • World’s largest offshore oil-rig offshore rig design • Rig construction and repair • Ship repair and conversion • Specialized shipbuilding company • Full-solution provider-design, construct, and maintain offshore rigs

25. Real Estate • Assets in Asia with 2 core business • Keppel Land • Real estate investment and development • Keppel-Real Estate Investment Trust • Property fund management with $10.2Bn AUM • Geographically diversified in the Asian economies of Singapore, China, Vietnam, India, Indonesia

26. Infrastructure • Keppel Integrated Engineering • Environmental engineering, cooling service provider in Singapore, Waste-to-Energy plants, facilities management • Keppel Energy • Power plants in Brazil, China, Philippines, Nicaragua, and much of Singapore • Keppel Telecommunications & Transportation • Leading service provider in Southeast Asia and Europe, spanning 12 countries.

27. Investments • k1 Ventures • Diversified investment company with stakes in companies across key diverse sectors of transportation leasing, education, oil and gas exploration, and automotive retail • M1 Limited • Leading integrated communications service provider in Singapore with >1/3 Singapore market share

28. Offshore and Marine Marshall

29. Oil and Gas Drilling • Oil extraction off the coast of continents • Also includes drilling in lakes and inland seas • Much more expensive than traditional onshore oil drilling • Becomes cost effective as the price of oil continues to rise • Poses numerous environmental hazards • Oil spills, destruction of aquatic habits, etc. • BP

30. Offshore Drilling • Largest spending in Gulf of Mexico, West Africa, Brazil, and Asia Pacific • Industry expected to grow at 6.6% between 2009 and 2015 • Depletion of onshore reserves driving growth in offshore drilling • Also driven by improvements in seismic and drilling technologies

31. Offshore Drilling • Current growth being driven by deep and ultra deep oil exploration and production • Huge deep water reserves found in various parts of the world • Gulf of Mexico, Brazil, Asia Pacific • Shallow water resources beginning to decrease causing companies to look to deeper reserves • Facilitated by new technology

32. Main Projects • Offshore Division • Keppel FELS • Leading designer and builder of high-performance mobile offshore rigs • Marine Division • Keppel Shipyard • Trusted industry name for the repair, conversion and upgrading of a diverse range of vessels

33. Keppel FELS • Successfully delivered almost half of the world's newbuildjackup rigs and semisubmersibles in the past decade • April 3rd , secured a new contract worth $180 million • Have also patented several critical rig components including jacking, fixation, self-positioning and skidding systems

34. Keppel Shipyard • Leaders in the conversion of Floating Production Storage Offloading (FPSO) units, Floating Storage Offloading (FSO) vessels and Floating Storage and Regasification Units (FSRU) • March 10th, secured $133.7 million contract for two fast track projects

35. Overall Success • Successfully delivered 34 projects including 12 rigs on time and within budgetin 2010 • In 2010, Keppel FELS partnered with Seafox, a leading fleet owner and operator, to commercialize a new wind turbine installation vessel design for deeper water • Joint venture with J Ray McDermott also secured a $1 billion contract from Brazil for its tension leg wellhead platform

36. Future Growth • Clinched $3.7 billion worth of new orders with deliveries extending to 2014 • Exploration and production budgets are expected to increase by 15-20% on average in 2011, with oil planning prices in the region of $70 per barrel • According to Douglas Westwood, the world will need more than 100 Floating Production Systems (FPS) to be installed between 2010 to 2014 • This is equivalent to a value of $45 billion

37. Contract Increase

38. Financial Performance of O&M • O and M’s revenue and profit after tax and minority interest represents 69% of Keppel Corporation’s business. • Profits in 2010 increased by 22% • SGD$810 million to 987 million • Due to improved operating margins driven by cost efficiencies and higher productivity on delivered contracts

39. Property Daryl

40. Real Estate Property Investment & Investment Fund Management Vision: To provide urban living solutions through the twin core businesses of property development and property fund management

41. Business Model • Joint ventures, M&A, and strategic partnerships • When expanding into new cities in Asia • Focus on developing quality residential, township, commercial projects in fastest growing cities • Tianjin, Chengdu, Shanghai, Saigon, Ho Chin Minh, Bangalore, Kolkata • Recently Established Keppel Land China • Policy of capital recycling • Take on large-scale development projects • Increase residential development pipeline

42. Joint Ventures/Strategic Partnerships With Local Companies

43. Drivers of Asian Real Estate Growth

44. Expansion Into Fast-Growing Cities

45. Expansion Into Fast-Growing Cities

46. Leveraging Singapore’s Position as South-East Asian Financial Hub • Singapore government wants to make Marina Bay a seamless extension of the existing Central Business District(CBD) • Record pre-commitment for commercial office space

47. ‘Capital Recycling’ Policy $826mil Asset Swap in 2010 • Maximize value creation through continued profits from capital appreciation of commercial properties • Assets are optimally utilized to unlock value Pre-Sold Commercial/Industrial Office Space(OFC) Capital

48. Fund Management • Total $11.2bn AUM of prime industrial and commercial office space • K-REIT • Stable income growth • Alpha Investment Partners • Manages funds of Grade A office space & shopping malls

49. KepLand Net Profit:274.2mil

50. Earnings Comparison (yoy)