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EMPLOYEES PENSION PLAN - PERFORMANCE REVIEW - THIRD QUARTER 102 W. Whiting Street, Suite 400, Tampa, FL 33602-5140 ♦ Tel: 813/218-5000 ♦ www.captrustadv.com Eric W. Bailey, CFA John J. Griffith, JD, CPC Managing Principal Senior Investment Consultant CITY OF CLEARWATER EMPLOYEES PENSION PLAN PERFORMANCE REVIEW SEPTEMBER 30, 2010 TABLE OF CONTENTS Capital Markets Review 1 Fund Overview 2 Performance Review Total Fund 3 Domestic Equity 4 International Equity 5 Fixed Income 6 Real Estate 7 Appendix 8 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. IndexQTRYTD1 Yr3 Yr5 Yr10 Yr Domestic Fixed Income 3 Month T-Bill0.04%0.10%0.12%0.90%2.50%2.43% Barclays Capital 1-3 year Gov't0.62%2.53%2.62%4.30%4.49%4.37% Barclays Capital Interm Gov't2.13%6.63%6.19%6.65%5.87%5.69% Barclays Capital Interm Credit4.07%9.09%10.84%7.90%6.38%6.70% Barclays Capital Interm Govt/Cred2.76%7.44%7.77%6.93%5.95%6.05% Barclays Capital Aggregate Bond2.48%7.94%8.16%7.42%6.20%6.41% Domestic Equity Standard & Poor's 50011.29%3.89%10.16%-7.16%0.64%-0.43% Dow Jones Industrial Average11.13%5.57%14.12%-5.38%3.13%2.51% Dow Jones US Total Full Cap11.66%5.33%11.51%-6.12%1.37%0.41% Dow Jones US Select REIT 13.22%19.20%30.14%-6.98%1.36%10.12% Russell 1000 - Large Cap11.55%4.42%10.75%-6.79%0.86%-0.21% Russell 1000 Growth - Large Cap13.00%4.36%12.65%-4.36%2.06%-3.44% Russell 1000 Value - Large Cap10.13%4.49%8.90%-9.39%-0.48%2.59% Russell Midcap13.31%10.97%17.54%-4.16%2.60%4.86% Russell Midcap Growth14.65%10.85%18.27%-3.90%2.86%-0.88% Russell Midcap Value12.13%11.15%16.93%-4.78%1.97%7.80% Russell 2000 - Small Cap11.29%9.12%13.35%-4.29%1.60%4.00% Russell 2000 Growth - Small Cap12.83%10.23%14.79%-3.75%2.35%-0.13% Russell 2000 Value - Small Cap9.72%7.92%11.84%-4.99%0.73%7.72% International Equity MSCI EAFE16.48%1.07%3.27%-9.51%1.97%2.56% MSCI World13.78%2.58%6.76%-8.29%1.30%0.79% MSCI EM 17.16%8.70%17.67%-3.72%10.22%10.79% Blended Benchmarks 30% S&P 500 / 70% Barclays Agg5.12%6.73%8.76%3.05%4.53%4.36% 40% S&P 500 / 60% Barclays Agg6.00%6.32%8.96%1.59%3.98%3.67% 50% S&P 500 / 50% Barclays Agg6.89%5.92%9.16%0.13%3.42%2.99% 60% S&P 500 / 40% Barclays Agg7.77%5.51%9.36%-1.33%2.86%2.31% 70% S&P 500 / 30% Barclays Agg8.65%5.11%9.56%-2.79%2.31%1.62% 1 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. This market review was written by the Institutional Consulting Group at Wells Fargo Advisors and provided to you courtesy of CapTrust Financial Advisors. Capital Markets Summary It was another quarter of mixed economic data and conflicting market indicators. Perhaps Federal Reserve Chairman Ben Bernanke summarized it best, noting that “the economic outlook remains unusually uncertain.”At the end of August it looked like the equity markets were heading for another dismal (quarterly) finish, with September historically the worst (performance) month of the year for stocks. Considering the market volatility of the past two years it seems only fitting that the expected became the unexpected. September hasn’t provided market returns like this since 1939. The Dow Jones Industrial Average (DJIA), S&P 500 and NASDAQ each reversed August’strend and finished in positive territory for the quarter and year-to-date. Intl Emerging … High Yield Bonds MCG Equities MC Equities MCV Equities SCG Equities SC Equities Long Term … LCG Equities Corporate Bonds SCV Equities LC Equities S&P 500 LCV Equities Mortgage Backed … Municipal Bonds Foreign Bonds Intl Frontier … Intl Developed … 3-Month T-Bill 20.5% 18.4% 18.3% 17.5% 16.9% 14.8% 13.4% 12.7% 12.7% 12.1% 11.8% 10.8% 10.2% 8.9% 5.9% 5.8% 5.1% 4.0% 3.7% 0.1% One Year Performance of Asset ClassesAs Of September 30, 2010 Most of the economic debate this quarter focused on the issue ofa potential double-dip recession. Federal Reserve Chairman Ben Bernanke provided little positive commentary to Congress in his semiannual monetary policy report (July 2010). Highlights of those comments indicate FOMC members expect moderate economic growth, slow employment growth,and continued economic problems in Europe among other issues. St. Louis Fed President James Bullard grabbed investors’ attention with comments that the U.S. has moved closer to a Japanese-style deflation. First quarter GDP was revised to 3.7 percent. Second quarter GDP growth was 1.6 percent. Depending on your point of view this latter number indicated either a weak economy stillteetering on the edge of recession, or the “new normal”for economic recovery. There is sufficient data to support either point of view. The economy continues to grow, although at a very subdued pace. Job growth in the private sector is not expanding as rapidly as expected and the Fed is “prepared to provide additional accommodation, if needed”. 2 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Capital Markets Summary Corporate earnings continue to improve. Apple Inc. (AAPL), eBay (EBAY), Coca-Cola (KO) Caterpillar (CAT) and AT&T (T) all exceeded analyst’s estimates by wide margins this quarter. Misses were few and largely discounted by investors. IPO’s have dropped to a five year low with equity offerings off 23% year-to-date. With interest rates expected to remain low, corporations are choosing to issue debt rather than sell equity. BC Agg BC Int GC R 1000 R Mid R 2000 MSCI EAFE MSCI EM T‐Bills ML HYM 0 2 4 6 8 10 12 14 051015202530 Return (%) Risk (Standard Deviation %) Risk/Return Comparison Five Years Ending September 30, 2010 In Europe, investors were encouraged by the results of the bank stress tests. Ninety-one banks were tested. Only seven failed. This was taken as a sign that Europe may not need additional monies to shore up a weak financial system. The Basel Committee on BankingSupervision set stricter requirements for banks dealing internationally, but many of the banks tested already meet the minimum requirements and those that don’t will see these new requirements phased in over a ten year time period. The IMF is suggesting supervision extend beyond banks to all sectors of the financial industry, including insurance companies, hedge funds and non-bank institutions that present risks to the current system. In the Pacific Rim, the pace of Chinese manufacturing increased from the second quarter. Japan’s economy continues to struggle with its huge public debt. The recent rise in the Yen is threatening their export driven economy and the Prime Minister has asked the central bank to do more to fight deflation. In the fixed income markets, the Federal Reserve maintained their accommodative stance with regard to interest rates. The Fed Funds target range remains 0.00 –0.25%. Comments released from FOMC meetings show the Fed remains committed to a low interest environment for the foreseeable future. Low interest rates have not deterred debt investor’s as auctions of U.S. notes remain strong. High-grade corporate debt from U.S issuers exceeded $110 billion in September making it the largest issuance month so far this year. Globally, high-grade corporate debt issues exceeded $4.6 trillion (USD) year-to-date versus just $611 billion (USD) for the same period last year. 3 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 3Q101 year3 years5 years10 years Return (%) Broad Domestic Equity Performance Large Cap Mid Cap Small Cap Domestic Equity As summer came to a close, the U.S. stock market posted a strong third quarter performance to recover from its early July lows. After a dismal second quarter, a strong July rally and an even stronger September rally helped the major averages return to nearly the same levels as they had been when spring began. After rising 11.13% this quarter, the Dow Jones Industrial Average ended the six months between April 1st and September 30th with a total gain of 0.72%. Likewise, the S&P 500 was able to use an 11.29% third quarter return to pare its loss over the same six-month period to -1.42%. The S&P 500 began July at its low for the year, however, solid corporate earnings reported in July helped to pull the market out of its summer doldrums . Each sector rallied to positive returns as the markets enjoyed their best month since July 2009. The S&P 500 was led by the Materials sector which was up 12.34% on steadily increasing positive sentiment for nitrogen and fertilizer manufacturer CF Industries. 0 50 100 150 200 250 300 Style Performance 10 Year Growth of $100 R1000 Va lue R1000 Growth R2000 Value R2000 Growth Consumer Staples and Financials slightly trailed the overall index posting monthly gains of 6.05% and 6.67% respectively, versus 7.01% for the broader index. The Health Care sector posted a relative paltry 1.35% return for the month. The sector was more than 400basis points behind any other sector and had four of the ten worst performing stocks in the S&P 500 for the month (Thermo Fisher, Life Technologies, Hospira, and Medco Health). As earnings season quieted, the sense of optimism abated as the markets had their worst August performance since 2001. All major indices were down for the month as small caps were particularly weakened by the downturn. Only Utilities (up 1.48%) and Telecom (up 2.25%) sectors enjoyed a positive month for the S&P 500. Industrials, IT, and Financialseach trailed the broader index. 4 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. 4.33 8.86 10.63 11.29 11.78 12.35 12.95 14.31 15.17 17.84 20.96 Financials Health Care Consumer Staples S&P 500 Information Technology Utilities Energy Industrials Consumer Discretionary Materials Telecommunication Services S&P 500 Third Quarter Sector Returns Russell 1000 Russell Midcap Russell 2000 510 Domestic Equity Quarterly Return -10-50 ValueGrowth 10.1311.55 9.7211.2912.83 13 12.1313.3114.65 Domestic Equity As September rolled on the scene, economic news, while not great, was at least strong enough for the market to enjoy its third best month of the past 10 years, narrowly trailing only March 2003 and April 2009. IT, which trailed the broader index in July, was up 12.14% and led all other sectors as Jabil Circuit, JD Uniphase, AMD, and NVIDIA each posted gains greater than 25% for the month. Other double-digit sectors for the month were Industrials (up 11.40%) and Consumer Discretionary (up 11.10%). Consumer Staples (up 5.86%) and Utilities (up 2.93%) were the smallest gainers. In individual stocks, the third quarter saw a flurry of activityin mergers and acquisitions. There were nearly fifty multi-billion dollar M&Asduring the quarter headlined by BHP Billiton’s acquisition of Potash Corporation of Saskatchewan for $40.03 billion. Other notable deals included Intel’s acquisition of McAfee Inc. for $7.67 billion, General Motors purchase of AmeriCredit Corp. for $3.5 billion and Hewlett-Packard outbidding rival Dell for storage solutions firm 3PAR. 5 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. International Markets International markets made up for their second quarter losses asthe EAFE posted a 16.5% gain in the third quarter. The MSCI emerging markets came in slightly better at 18.2%. South Africa, Australia, and Brazil along with the rest of Latin America all returned over 20% for the quarter leading the international space. The health of Europe has been a major driver of world markets this year. The results of the European bank stress test as well as more time passing since the onset ofthe Greek debt crisis has stabilized European markets. This quarter MSCI Europe with and without theUK are trailing only the previously mentioned international markets. Even with the strong quarterly showing Europe remains the only region with a loss year to date. The Euro has made strong gains this quarter causing pressure for imports to rise which has benefitted European trading partners such as China and India. Austerity still remains an issue in Europe as many countries have seen mass protest against the cuts that are being mandated by the IMF and the European Union as part of loanpackage deals. With near zero interest rates and the U.S. economy predicted to be in a slow growth mode for some time a large percentage of the cash that is moving off the sidelines has been into the international markets. Predicted flows for 2010 have been recently revised upward to $825 billion (USD) which include both equity and debt instruments. The slide of the dollar against most major currencies is making assets in those currencies look more attractive adding tothe increased flow of funds into international securities. Japan Germany Australia United Kingdom Russia China Brazil Mexico India South Africa 0.3% 2.0% 9.6% 9.8% 13.2% 14.1% 16.6% 24.3% 27.4% 29.7% One Year International Returns As Of September 30, 2010 6 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Fixed Income In the absence of inflation, all fixed income sectors continued to make gains in the third quarter. Yields, already at historically low levels, moved even lower across a flattening curve. The Barclays Capital US Aggregate Bond index was up 2.48% on the quarter with monthly returns of 1.07%, 1.29%, and .11%. The Barclays Capital US Government/ Credit index was up 3.28% for the quarter with monthly returns of 1.13%, 1.86%, and .27%. The Barclays Capital US Government Intermediate index increased 2.12% for the quarter with monthly returns of .74%, 1.10%, and .27%. Lastly, the Barclays Capital Municipal Bond index was also up for the quarter by 3.40% with monthly returns of 1.25%, 2.29%, and -.16%. The Fed’s action to buy Treasuries in August showed its commitment to the ‘low for long’interest 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 3 MO6 MO2 YR5 YR10 YR30 YR Treasury Yield Curve 12/31/200712/31/200812/31/20099/30/2010 0.00% 5.00% 10.00% 15.00% 3Q10YTD1 YR3 YR5 YR10 YR Sector Performance GovtsCorpsMortgagesMunis 0.00% 5.00% 10.00% 15.00% 20.00% 3Q10YTD1 YR3 YR5 YR Credit Performance AAA AA A BBB BB rate policy. The 5-Year Treasury yield was 1.28% at the end of September, compared to the start of the year at 2.68%. Low inflation and moderate growth supported the drop in yield. The so-called ‘Bernanke Put’has also been a significant contributor to lower yields. The belief that the downside is now protected by the Fed is derived from the following FOMC statements: “Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the long run, with its mandate to promote maximum employment and price stability.” “The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and return inflation, over time, to levels consistent with its mandate.” Nevertheless, treasuries underperformed corporate, high-yield, and emerging market debt as investors returned to risk assets. September was the busiest on record for corporate debt sales, although there was a slow-down in the last week of the month. Corporate issuers rushed to market at the beginning of the month in anticipation of a volatile September in equity markets. In spite of this, the Barclays Capital US Corporate Investment Grade index still eked out a .70% gain for the month, finishing the quarter with a positive 4.71%. Spreads on investment grade credit are at 160bp as of the end of September, little changed from the start of the year. Given an historical averagespread of 105bp, credit remains attractive in the marketplace. 7 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Zephyr StyleAdvisor, Barclay’s Capital, MSCI Barra& Standard & Poor’s Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Fixed Income Following the move to risk assets, high-yield investors were rewarded with a 6.72% return, according to the Barclays Capital US Corporate High Yield index. Resulting from decreasing default risk and improved corporate balance sheets, high-yield remained attractive through the third quarter. Agencies and MBS posted modest gains in the third quarter as theFed focused repurchases in treasuries, and investors expect prepayments to escalate as borrowers refinance. Investors are also on alert to market predictions with regard to the restructuring of the government sponsored enterprises, primarily Fannie Mae and Freddie Mac. Commodities Commodity prices were higher and continue to show strength across most sectors aided in part by a weaker U.S. dollar. Silver and gold lead the advance and set record prices during the quarter. Gold, of course, is often considered a safe haven in weak or uncertain market conditions, but both medal prices have also been driven higher by momentum buying. Improvement in China’s Manufacturing Purchasing Managers’Index provided further support for commodities. Crude oil prices, for the most part, remained range bound between $70 -$80 per barrel, but showed strength at the end of September and closed at $80.91. Currency On the currency front, the Fed created dollars through purchasesof Treasury securities. This materially weakened the dollar resulting in its decline against most major currencies. Adding further selling pressure was the Fed’s repeated commitment to stand ready to use all tools at its disposal to support economic growth. Dollar sellers also stepped up their activity after European bank ‘stress tests’results supported a more positive financial opinion of their condition, and early productivity reports from several European countries supported weak but growing economies. The dollar lost value this quarter against the Euro and Pound. ‐5.00%0.00%5.00%10.00%15.00%20.00% U.K. Japan Europe Canada Australia 9.8% 0.3% 0.3% 13.5% 9.6% 6.9% 11.3% -1.5% 11.5% 17.1% 1 Year Country And Currency Returns As of September 30, 2010 CurrencyCountry Return 8 Russell 1000 Value contains those Russell 1000 (larger capitalization) securities with a less-than-average growth orientation. Securities in this index generally have lower price-to-book and price-to-earnings ratios, higher dividend yields, and lower forecasted growth rates. Russell 1000 Growthcontains those Russell 1000 (larger capitalization) securities with a greater-than-average growth orientation. Securities in this index generally have higher price-to-book and price-to-earnings ratios, lower dividend yields, and higher forecasted growth rates. Russell 2000 Value contains those Russell 2000 (smaller capitalization) securities with a less-than-average growth orientation. Securities in this index generally have lower price-to-book and price-to-earnings ratios than those in the Russell 2000 Growth Index. Russell 2000 Growth contains those Russell 2000 (smaller capitalization) securities with a greater-than-average growth orientation. Securities in this index generally have higher price-to-book and price-to-earnings ratios than those in the Russell 2000 Value Index. MSCI EAFEis the Morgan Stanley Capital International Europe, Australia, Far East Index designed to measure the performance of developed stock markets in these areas. Barclays AggBondis the Lehman Brothers Aggregate Bond Index. This index includes U.S. government, corporate and mortgage-backed securities rated investment grade or higher with maturities up to 30 years. S&P 500is a representative sample of 500 leading companies in leading industries of the U.S. economy. DJ Wilshire REITis intended as a broad measure of the performance of publicly traded real estate equity. The index is comprised of companies whose charter is the equity ownership andoperation of commercial real estate. CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 CAPITAL MARKET INDEX RETURNS This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Morningstar Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. 19911992199319941995199619971998199920002001200220032004200520062007200820092010 Russell Russell Russell DJ Russell Russell Russell DJ Russell BarclayRussell DJ DJ DJ Russell BarclayRussell DJ BEST 200020001000Wilshire 100010002000Wilshire 2000Agg2000Wilshire Wilshire Wilshire 1000Agg1000Wilshire ValueValueValueREITValueGrowthGrowthREITValueBondGrowthREITREITREITGrowthBondGrowthREIT 41.70%29.15%32.94%8.06%38.35%37.04%35.18%38.71%43.09%31.04%13.96%10.27%48.53%33.14%14.00%36.13%11.81%5.24%37.21%19.20% Russell DJ Russell Russell Russell Russell Russell DJ DJ Russell Russell Russell Russell Russell 1000Wilshire 20001000100010002000Wilshire Wilshire 20002000200020002000 GrowthREITValueGrowthGrowthGrowthValueREITREITValueValueValueGrowthGrowth 41.16%15.13%23.84%2.66%37.53%23.12%33.35%28.57%33.16%22.83%12.36%3.60%46.02%22.25%13.54%26.34%11.17%-28.92%34.47%10.23% DJ Russell Russell DJ Russell Russell BarclayBarclayRussell Russell Russell Russell Russell Barclay Wilshire 10001000Wilshire 10002000AggAgg20001000200020001000Agg REITValueValueREITGrowthValueBondBondValueValueValueGrowthValueBond 23.84%13.81%18.12%2.66%37.19%22.94%31.78%20.33%27.30%11.63%8.44%-11.42%39.16%20.25%7.05%23.48%7.05%-36.85%31.78%7.94% Russell Russell DJ Russell Russell Russell Russell Russell Russell Russell DJ Russell Russell Russell BarclayDJ Russell 20002000Wilshire 2000100010001000100010001000Wilshire 100010001000AggWilshire 2000 GrowthGrowthREITGrowthValueGrowthValueValueValueValueREITValueGrowthValueBondREITValue 21.18%7.77%15.14%1.31%31.04%21.64%30.49%15.63%21.04%7.01%-5.59%-15.52%36.06%16.49%5.26%22.25%6.97%-37.00%28.46%7.92% Russell Russell Russell Russell DJ BarclayRussell Russell Russell Russell Russell Russell 2000200020002000Wilshire Agg100020001000200010001000 GrowthValueValueValueREITBondValueGrowthValueGrowthGrowthValue 30.48%7.62%13.37%-1.55%25.75%21.37%19.67%8.67%7.35%-9.10%-9.22%-15.94%30.03%14.31%4.91%15.79%5.49%-38.44%26.46%4.49% Russell BarclayRussell BarclayRussell Russell Russell DJ Russell Russell Russell Russell Russell Russell Russell 1000Agg1000Agg200020002000Wilshire 1000200020001000200020001000 ValueBondValueBondGrowthGrowthGrowthREITGrowthValueGrowthValueGrowthValueGrowth 24.61%7.40%10.06%-1.99%18.48%11.26%12.95%1.23%-2.57%-13.96%-11.88%-22.09%29.76%10.87%4.71%13.35%-0.17%-38.54%20.58%4.36% BarclayRussell BarclayRussell DJ BarclayRussell BarclayRussell Russell Russell Russell Russell Russell Russell DJ Russell Agg1000Agg2000Wilshire Agg2000Agg1000100010001000200010002000Wilshire 1000 BondGrowthBondGrowthREITBondValueBondGrowthGrowthGrowthGrowthGrowthGrowthValueREITValue 16.00%5.00%9.75%-2.44%12.24%6.36%9.68%-6.46%-0.83%-22.42%-20.42%-27.89%28.67%6.30%4.15%9.07%-9.78%-39.20%19.69%3.89% Russell BarclayBarclayDJ Russell Russell Russell BarclayBarclayBarclayBarclayDJ Barclay 1000AggAggWilshire 200020002000AggAggAggAggWilshire Agg WOR S T GrowthBondBondREITValueGrowthGrowthBondBondBondBondREITBond 12.49%-11.85%2.90%-2.92%11.55%3.61%2.06%-17.00%-1.49%-22.43%-22.00%-30.27%4.11%4.34%2.43%4.33%-17.56%-45.09%5.93%1.07% S&P 500 MSCI EAFE S&P 500 MSCI EAFE S&P 500 MSCI EAFE MSCI EAFE S&P 500 S&P 500 MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 MSCI EAFE S&P 500 MSCI EAFE MSCI EAFE S&P 500 S&P 500 MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 MSCI EAFE MSCI EAFE MSCI EAFE 9 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 RELATIVE PERFORMANCE OF KEY INDICES This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Morningstar Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Equity vs. Fixed -60 -40 -20 0 20 40 60 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Equity vs. FixedMean1 Standard Deviation2 Standard Deviations Equity Outperforming Fixed Outperforming Aug '82 –DJIA 776 Black Monday -Oct '87 Asian Crisis Invasion of Iraq Domestic vs. Foreign -60 -40 -20 0 20 40 60 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Domestic vs. ForeignMean1 Standard Deviation2 Standard Deviations Foreign Outperforming Domestic Outperforming 10 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 RELATIVE PERFORMANCE OF KEY INDICES This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Morningstar Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Large vs. Small -60 -40 -20 0 20 40 60 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Large vs. SmallMean1 Standard Deviation2 Standard Deviations Large Outperforming Small Outperforming Large Value vs. Large Growth -60 -40 -20 0 20 40 60 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Large Value vs. Large GrowthMean1 Std Deviation2 Std Deviations Value Outperforming Growth Outperforming 11 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 RELATIVE PERFORMANCE OF KEY INDICES This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Morningstar Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Small Value vs. Small Growth -60 -40 -20 0 20 40 60 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Small Value vs. Small GrowthMean1 Standard Deviation2 Standard Deviations Value Outperforming Growth Outperforming Equity vs. REIT -80 -60 -40 -20 0 20 40 60 80 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Equity vs. REITMean1 Standard Deviation2 Standard Deviations Equity Outperforming REIT Outperforming 12 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 RELATIVE PERFORMANCE OF KEY INDICES This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. Data Sources: Morningstar Data provided by sources believed to be reliable but no guarantee is made as to its accuracy. Past performance is no guarantee of future performance. Fixed Income vs. REIT -120 -80 -40 0 40 80 120 12/79 - 12/8012/80 - 12/8112/81 - 12/8212/82 - 12/8312/83 - 12/8412/84 - 12/8512/85 - 12/8612/86 - 12/8712/87 - 12/8812/88 - 12/8912/89 - 12/9012/90 - 12/9112/91 - 12/9212/92 - 12/9312/93 - 12/9412/94 - 12/9512/95 - 12/9612/96 - 12/9712/97 - 12/9812/98 - 12/9912/99 - 12/0012/00 - 12/0112/01 - 12/0212/02 - 12/0312/03 - 12/0412/04 - 12/0512/05 - 12/0612/06 - 12/0712/07 - 12/0812/08 - 12/09 Fixed Income vs. REITMean1 Standard Deviation2 Standard Deviations Fixed Income Outperforming REIT Outperforming 13 FIRM:Wells Fargo Advisors is the trade name used by two separate, registered broker/dealers and nonbank affiliates of Wells Fargo & Company, providing certain retail securities brokerage services: Wells Fargo Advisors, LLC., member FINRA, SIPC, and Wells Fargo Financial Network, LLC, member FINRA, SIPC. Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE. CONFLICTS OF INTEREST: To review important information about certain relationships and potential conflicts of interest that may exist between Wells Fargo Advisors , its affiliates, and the companies that are mentioned inthis report, please visit the our research disclosure page at www.wellsfargoadvisors.com/gotoresearchdisclosuresor call your Financial Advisor. STATEMENT OF OPINION: This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Any opinions expressed or implied herein are not necessarily the same as those of Wells Fargo Advisors or its affiliates and are subject to change without notice. The report herein is not a complete analysis ofevery material fact in respect to any company, industry or security. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request. ASSET CLASS SUITABILITY:Stocks of small companies are typically more volatile than stocks of larger companies. They often involve higher risks because they may lack the management expertise, financial resources, product diversification and competitive strengths to endure adverse economic conditions. High-yield, non-investment grade bonds are only suitable for aggressive investors willing to take greater risks, which could result in loss of principal and interest payments. Global/International investing involves risks not typically associated with US investing, including currency fluctuations, political instability, uncertain economic conditions and different accounting standards. PAST PERFORMANCE:Past performance is not an indication of future results. ASSET CLASS PERFORMANCE REPRESENTATIONS: Long Term Treasuries = BC Treasury Long; Municipals = BC Municipal; Foreign Bonds = Salomon World BIG –IB; US Govt/Credit = BC Govt/Credit; MtgeBacked Securities = ML Mortgage Master; Corporate Bonds = Salomon Corporate; 90 Day T-Bills = Salomon; Japanese Stocks = Salomon Japan BMI; High Yield Bonds = ML High Yield Master; Small Cap USValue = RU 2000 Value; MidCapUS Stocks = RU Midcap; Large Cap US Value = RU 1000 Value; European Stocks =Salomon Europe BMI; Small Cap US Stocks = RU 2000; LgCap US Growth = RU 1000 Growth; Latin American Stocks = SalomonLatin America BMI; SmCap US Growth = RU 2000 Growth BROAD EQUITY MARKET & SECTOR PERFORMANCE REPRESENTATIONS: Large-Cap = S&P 500 or Russell 1000; Mid-Cap = RU Midcap; Small-Cap = RU 2000; International = MSCI EAFE DATA SOURCES:Information found in this document was derived from the following sources: Zephyr Associates StyleAdvisor, InformaM-Watch, Investor Force, Barclays Capital, MSCI Barra, and Standard & Poor’s. CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 GENERAL DISCLOSURE STATEMENT This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. 14 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 GENERAL DISCLOSURE STATEMENT Dow Jones Industrial Average-This index is comprised of 30 "blue-chip" US stocks selected for their history of successful growth and wide interest among investors. The DJIA represents about 20% of the total market value of all US stocks and about 25% of the NYSE market capitalization. It is aprice-weighted arithmetic average, with the divisor adjusted to reflect stock splits and the occasional stock switches in the index. NASDAQ Composite-A cap-weighted index comprised of all common stocks that are listed onthe NASDAQ Stock Market (National Association of Securities Dealers Automated Quotation system). S&P 500-A broad-based measurement of changes in stock market conditions based onthe average performance of 500 widely held common stocks. This index does not contain the 500 largest companies nor the most expensive stocks traded in the U.S. While many of the stocks are among the largest, thisindex also includes many relatively small companies. This index consists of approximately 380 industrial, 40 utility, 10 transportation and 70 financial companies listed on U.S. market exchanges. It is a capitalization-weighted index (stock price times number of shares outstanding),calculated on a total return basis with dividends reinvested. S&P 500/Citigroup Growth-The S&P/Citigroup Growth tracks the performance of those stocksin the S&P 500 with lower book-to-price ratios. A cap-weighted index, it is rebalanced semi-annually, based on its price-to-book ratios and market capitalizations at the close of trading one month prior. The index is adjusted each month to reflect changes in the S&P 500. This index is more heavily weighted in the consumer non-cyclical, health care, and technology sectors than the S&P 500. S&P 500/Citigroup Value-The S&P Citigroup/Value tracks the performance of those stocks in the S&P 500 with higher book-to-price ratios. A cap-weighted index, it is rebalanced semi-annually on January 1 and July 1, based on its book-to- price ratios and market capitalizations at the close of trading one month prior. The index is adjusted each month to reflect changes in the S&P 500. This index tends to be more heavily concentrated in the energy and financial sectors than the S&P 500. Russell 1000-The 1000 largest companies in the Russell 3000 index, based on market capitalization. Russell 1000 Growth-A segment of the Russell 1000 with a greater-than-average growth orientation. Companies in this index have higher price-to-book and price-earnings ratios, lower dividend yields and higher forecasted growth values than the Russell 1000 Value index. Russell 1000 Value-Represents a segment of the Russell 1000 with a less-than-average growth orientation. Companies in this index have low price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth values than the Russell 1000 Growth Index. Russell Mid Cap-The index consisting of the bottom 800 securities in the Russell 1000 as ranked by total market capitalization, and it represents over 35% of the Russell 1000 total market cap. Russell 2000-The 2000 smallest companies in the Russell 3000 index. Russell 2000 Growth-A segment of the Russell 2000 with a greater-than-average growth orientation. Companies in this index have higher price-to-book and price-earnings ratios, lower dividend yields and higher forecasted growth values than the Russell 2000 Value index. Russell 2000 Value-A segment of the Russell 2000 with a less-than-average growth orientation. Companies in this index have low price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth values than the Russell 2000 Growth index. Russell 2500-The index consisting of the bottom 500 stocks in the Russell 1000(as ranked by market capitalization) and all of the stocks in the Russell 2000. This index is intended tobe used as a measure of small to medium/small stock performance, and it represents over 22% of the Russell 3000 total market cap. This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. 15 CAPITAL MARKETS REVIEW –SEPTEMBER 30, 2010 GENERAL DISCLOSURE STATEMENT MSCI EAFE-A market capitalization-weighted index representing all of the MSCI developed markets outside North America. It comprises 20 of the 22 countries in the MSCI World. These 20 countries include the 14 European countries in the MSCI Europe and the 6 Pacific countries in the MSCI Pacific.This index is created by aggregating the 20 different country indexes, all if which are created separately. MSCI World-This market capitalization-weighted index represents all 22 of the MSCI developed markets in the world. It is created by aggregating the 22 different country indexes, all if which are created separately. MSCI Emerging Markets Free (EMF)-A market capitalization-weighted index representing 26 of the emerging markets in the world. Several factors are used to designate whether a country is considered to be emerging vs. developed, the most common of which is Gross Domestic Product Per Capita. The "Free" aspect indicates that this index includes only securities that are allowed to be purchased by global investors. This index is created by aggregating the 26 different country indexes, all if which are created separately. Barclays Capital Government/Credit-This index includes all bonds that are in the Barclays Capital Government Bond and the Barclays Capital Credit Bond indices. Barclays Capital Government Intermediate-All bonds covered by the Barclays Capital Government Bond indexwith maturities of 1 and 10 years. Barclays Capital Aggregate Bond-This index is made up of the Barclays Capital Government/Credit, the Mortgage- Backed Securities, and the Asset-Backed Securities indices. All issues in the index are rated investment grade or higher, have at least one year to maturity, and have an outstanding par value of at least $100 million. Barclays Capital Government Long Term-All bonds covered by the Barclays Capital Government Bond indexwith maturities of 10 years or greater. Barclays Capital Municipal Bond-This market cap weighted index includes investment grade tax-exempt bonds and is classified into four main sectors: General Obligation, Revenue, Insured, and Pre-refunded. To be included in this index, the original transaction size of a bond must have been greater than $50 million. Merrill Lynch Convertibles-The convertible securities used in this index span all corporate sectors and must have a par amount outstanding of $25 million or more. The maturity must be at least one year. The coupon range must be equal to or greater than zero and all quality of bonds are included. Excluded from this index are preferred equity redemption stocks. When the component bonds of this index convert into common stock, the converted securities are dropped from the index. Merrill Lynch High Yield Master-Market-cap weighted index providing a broad-based measure of bonds in the US domestic bond market rated below investment grade but not in default. Includes only issues with a credit rating of BB1 or below as rated by Moody’s and/or S&P, at least $100 million in face value outstanding and a remaining term to final maturity equal to or greater than one year. Dow Jones Wilshire REIT Index-A measurement of equity REITs and Real Estate Operating Companies. No special- purpose or health care REITs are included. It is a market capitalization-weighted index for which returns are calculated monthly using buy and hold methodology; it is rebalanced monthly. Citigroup 3 Month Treasury Bill-Representing the monthly return equivalents of yield averages that are not marked to market, this index is an average of the last three three-month Treasury bill issues. 50/50 Blend (S&P 500/BCIGC)–A blended benchmark consisting of 50% S&P 500 and 50% Barclays Capital Government/Credit Intermediate indices. This and/or the accompanying information was prepared by or obtained from sources which Wells Fargo Advisors believes to be reliable but does not guarantee its accuracy. Please see important disclosure and reference information at theconclusion of this report. Past performance is not indicative of future results. 16 City of Clearwater Asset Allocation vs Target & Policy Total Fund As of 9/30/10 Manager Market Value Actual % Policy % ING Investment Management Aletheia Research NTGI-QM Russell 1000 Value Artisan Partners Wedge Capital Management LMCG Small Cap Selected Growth Atlanta Capital Management Systematic Financial Management Riverbridge Partners Total Domestic Equity Dodge & Cox Western Asset Management Co. Security Lending Income Account In House Account Total Domestic Fixed Income Earnest Partners Wentworth Hauser & Violich Eaton Vance Management Wellington Management Total International Equity Security Capital Total Real Estate Total Fund 80,620,584.69 24,914,460.55 38,754,649.36 35,809,676.52 36,139,976.60 5,209.31 10,038,450.89 9,614,267.34 16,876,304.61 252,773,579.87 105,548,263.49 82,378,407.13 37,415.64 2,244,662.94 190,208,749.20 27,858,049.80 27,338,561.20 28,791,543.72 26,804,123.00 110,792,277.72 60,711,991.68 60,711,991.68 614,486,598.47 13.12 4.05 6.31 5.83 5.88 0.00 1.63 1.56 2.75 41.14 17.18 13.41 0.01 0.37 30.95 4.53 4.45 4.69 4.36 18.03 9.88 9.88 100.00 42.00 30.00 18.00 10.00 17 City of Clearwater Sources of Fund Growth Total Fund 6/30/10 - 9/30/10 Manager Name Beginning Value Net Contrib Invest Fees Invest Gain/Loss Ending Value ING Investment Management Aletheia Research NTGI-QM Russell 1000 Value Artisan Partners Wedge Capital Management LMCG Small Cap Selected Growth Atlanta Capital Management Systematic Financial Management Riverbridge Partners Domestic Equity Composite Dodge & Cox Western Asset Management Co. Security Lending Income Account In House Account Fixed Income Composite Earnest Partners Wentworth Hauser & Violich Eaton Vance Management Wellington Management International Equity Composite Security Capital Real Estate Total Fund 49,346,360 14,479,660 35,167,711 30,160,867 33,267,654 36,728,667 18,436,154 14,081,130 0 231,668,203 103,010,808 80,167,341 1,480,155 -130,006 184,528,299 23,340,063 23,186,855 24,277,153 22,755,098 93,559,169 53,691,134 53,691,134 563,446,804 23,387,253 8,482,631 0 0 0 -39,794,187 -10,000,000 -6,000,000 16,794,116 -7,130,187 0 0 -1,568,297 2,374,669 806,372 -1,552 -10 0 0 -1,562 0 0 -6,325,377 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7,886,972 1,952,170 3,586,939 5,648,809 2,872,323 3,070,729 1,602,297 1,533,138 82,188 28,235,564 2,537,456 2,211,066 125,557 0 4,874,079 4,519,538 4,151,716 4,514,391 4,049,025 17,234,670 7,020,858 7,020,858 57,365,171 80,620,585 24,914,461 38,754,649 35,809,677 36,139,977 5,209 10,038,451 9,614,267 16,876,305 252,773,580 105,548,263 82,378,407 37,416 2,244,663 190,208,749 27,858,050 27,338,561 28,791,544 26,804,123 110,792,278 60,711,992 60,711,992 614,486,598 18 City of Clearwater Executive Summary Table Periods Ending September 30, 2010 Net of Fee Return Name Value $(000) Periods Ending 9/30/10 Cur Qtr 1 Year 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Since Inception Ret Date Total Fund Policy Index Domestic Equity Composite Standard & Poors 500 Large Cap Equity Composite Russell 1000 Aletheia Research Russell 1000 Value ING Investment Management Russell 1000 Growth NTGI-QM Russell 1000 Value Russell 1000 Value Mid Cap Equity Composite Russell MidCap Artisan Partners Russell MidCap Growth Wedge Capital Management Russell MidCap Value Small Cap Equity Composite Russell 2000 Atlanta Capital Management Russell 2000 Value LMCG Small Cap Selected Growth Russell 2000 Growth Riverbridge Partners Systematic Financial Management Russell 2000 Value International Equity Composite MSCI EAFE Index Gross Dividend Earnest Partners MSCI EAFE Index Gross Dividend Eaton Vance Management MSCI Emg Mkts (Gross) Wellington Management MSCI Emg Mkts (Gross) Wentworth Hauser & Violich MSCI EAFE Index Gross Dividend 614,487 252,774 144,290 24,914 80,621 38,755 71,950 35,810 36,140 36,534 10,038 5 16,876 9,614 110,792 27,858 28,792 26,804 27,339 10.30 9.92 12.40 11.30 11.90 11.56 11.88 10.13 12.84 13.00 10.20 10.13 13.43 13.32 18.73 14.65 8.63 12.14 12.36 11.29 12.56 9.72 12.17 12.82 13.98 9.72 18.42 16.53 19.36 16.53 18.60 18.16 17.79 18.16 17.91 16.53 14.85 12.02 15.04 10.15 11.54 10.75 10.32 8.91 13.12 12.66 9.43 8.91 19.91 17.56 23.07 18.27 16.94 16.94 16.11 13.34 16.40 11.85 15.44 14.78 18.95 11.85 15.75 3.71 15.59 3.71 21.26 20.54 15.83 20.54 11.50 3.71 0.97 -1.35 -4.63 -7.16 -5.82 -6.80 -5.69 -9.39 -3.32 -4.36 -9.15 -9.39 -2.67 -4.17 0.23 -3.90 -2.50 -4.78 -4.88 -4.29 3.44 -4.99 -8.71 -3.74 -5.41 -4.99 -4.47 -9.06 5.05 4.46 2.35 0.64 1.12 0.85 2.99 2.06 4.38 2.60 7.49 2.86 2.33 1.60 7.04 0.74 2.69 0.74 5.50 2.44 6.68 7.24 5.81 4.04 4.74 4.47 6.06 4.15 7.15 8.01 10.11 7.10 6.40 6.13 10.23 6.31 6.32 6.31 9.94 8.29 3.53 4.87 0.95 -0.44 0.14 -0.21 -0.32 -3.44 2.00 4.86 7.15 7.61 7.11 6.45 6.45 6.63 7.78 5.26 8.19 9.16 9.15 9.37 10.37 9.40 9.52 9.39 -5.66 -8.77 10.71 8.71 -8.53 -8.76 11.80 11.09 6.93 4.28 -1.28 -3.72 5.81 5.78 9.58 6.06 -5.49 -1.12 5.73 6.06 6.07 4.78 -1.63 -9.05 -0.41 -1.42 2.64 1.76 -7.37 -9.05 12/31/87 12/31/87 12/31/87 12/31/87 3/31/88 3/31/88 6/30/07 6/30/07 12/31/87 12/31/87 6/30/07 6/30/07 3/31/88 3/31/88 7/31/01 7/31/01 2/28/07 2/28/07 8/31/03 8/31/03 8/31/03 8/31/03 2/28/07 2/28/07 9/30/10 8/31/03 8/31/03 5/31/01 5/31/01 4/30/08 4/30/08 4/30/08 4/30/08 3/31/08 3/31/08 4/30/08 4/30/08 19 City of Clearwater Executive Summary Table Periods Ending September 30, 2010 Net of Fee Return Name Value $(000) Periods Ending 9/30/10 Cur Qtr 1 Year 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Since Inception Ret Date Fixed Income Composite Barclays U.S. Aggregate Dodge & Cox Barclays U.S. Aggregate In House Account Citigroup 3-month T-Bill Security Lending Income Account Citigroup 3-month T-Bill Western Asset Management Co. Barclays U.S. Aggregate Security Capital Wilshire RESI Index 190,209 105,548 2,245 37 82,378 60,712 2.67 2.48 2.46 2.48 0.00 0.04 9.87 0.04 2.76 2.48 13.08 13.24 8.94 8.16 9.20 8.16 0.00 0.12 30.00 0.12 8.58 8.16 34.17 30.02 8.32 7.42 8.27 7.42 0.00 1.01 14.66 1.01 8.12 7.42 6.80 6.20 6.91 6.20 0.00 2.47 10.63 2.47 6.59 6.20 5.75 5.35 0.00 2.28 8.03 2.28 6.20 6.41 0.00 2.41 6.19 6.43 0.00 3.34 7.10 7.49 5.88 5.34 0.81 4.14 7.79 2.23 6.05 5.63 -6.06 -6.23 12/31/87 12/31/87 2/29/04 2/29/04 12/31/87 12/31/87 6/30/03 6/30/03 9/30/04 9/30/04 4/30/08 4/30/08 20 City of Clearwater Executive Summary Table September 30, 2010 Net of Fee Return Name Value $(000) Calendar Years YTD 2009 2008 2007 2006 2005 Total Fund Policy Index Domestic Equity Composite Standard & Poors 500 Large Cap Equity Composite Russell 1000 Aletheia Research Russell 1000 Value ING Investment Management Russell 1000 Growth NTGI-QM Russell 1000 Value Russell 1000 Value Mid Cap Equity Composite Russell MidCap Artisan Partners Russell MidCap Growth Wedge Capital Management Russell MidCap Value Small Cap Equity Composite Russell 2000 Atlanta Capital Management Russell 2000 Value LMCG Small Cap Selected Growth Russell 2000 Growth Riverbridge Partners Systematic Financial Management Russell 2000 Value International Equity Composite MSCI EAFE Index Gross Dividend Earnest Partners MSCI EAFE Index Gross Dividend Eaton Vance Management MSCI Emg Mkts (Gross) Wellington Management MSCI Emg Mkts (Gross) Wentworth Hauser & Violich MSCI EAFE Index Gross Dividend 614,487 252,774 144,290 24,914 80,621 38,755 71,950 35,810 36,140 36,534 10,038 5 16,876 9,614 110,792 27,858 28,792 26,804 27,339 9.60 7.30 8.74 3.88 5.10 4.41 3.76 4.50 5.51 4.37 4.72 4.50 12.57 10.98 16.62 10.86 8.84 11.16 10.93 9.11 11.38 7.93 10.03 10.22 14.12 7.93 8.51 1.46 9.33 1.46 14.62 11.02 8.01 11.02 2.45 1.46 30.28 26.00 32.14 26.45 24.59 28.42 36.50 19.69 24.43 37.21 20.35 19.69 45.33 40.47 51.38 46.30 38.51 34.20 33.51 27.19 26.83 20.57 35.93 34.48 35.72 20.57 57.93 32.46 55.54 32.46 67.01 79.02 74.44 79.02 55.98 32.46 -27.10 -27.73 -37.76 -36.99 -35.23 -37.60 -37.97 -36.85 -33.18 -38.43 -36.86 -36.85 -41.79 -41.46 -42.87 -44.32 -34.89 -38.45 -38.63 -33.80 -19.52 -28.92 -46.27 -38.53 -40.71 -28.92 -47.94 -43.06 7.20 6.69 7.18 5.52 7.76 5.77 17.10 11.82 10.26 5.59 22.31 11.41 3.27 -1.55 6.91 -9.77 0.49 -9.77 11.02 11.63 11.76 16.59 13.01 15.81 11.52 15.46 7.14 9.09 12.53 15.27 10.94 10.64 17.40 18.35 16.22 23.48 18.61 23.48 27.62 26.85 6.71 8.25 8.12 4.89 8.63 6.27 12.02 5.27 7.85 12.65 10.19 12.10 7.21 4.56 6.23 4.70 8.27 4.70 13.15 14.01 21 City of Clearwater Executive Summary Table September 30, 2010 Net of Fee Return Name Value $(000) Calendar Years YTD 2009 2008 2007 2006 2005 Fixed Income Composite Barclays U.S. Aggregate Dodge & Cox Barclays U.S. Aggregate In House Account Citigroup 3-month T-Bill Security Lending Income Account Citigroup 3-month T-Bill Western Asset Management Co. Barclays U.S. Aggregate Security Capital Wilshire RESI Index 190,209 105,548 2,245 37 82,378 60,712 7.79 7.94 7.39 7.94 0.00 0.09 23.76 0.09 8.27 7.94 21.98 19.35 12.37 5.93 14.53 5.93 0.00 0.16 17.48 0.16 9.24 5.93 24.68 29.20 2.54 5.24 1.37 5.24 0.00 1.80 2.43 1.80 3.92 5.24 5.94 6.96 5.47 6.96 0.00 4.74 5.10 4.74 6.51 6.96 5.05 4.33 5.62 4.33 0.00 4.76 4.87 4.76 4.66 4.33 2.59 2.43 2.40 2.43 0.00 3.01 3.09 3.01 2.77 2.43 22 City of Clearwater Cumulative Performance Comparison Total Returns of Total Fund Public Sponsors Periods Ending 9/10 High 1st Qt Median 3rd Qt Low T Total Fund Net Ret Rank 1 Policy Index Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 10.36 9.16 8.27 6.69 5.71 10.30 6 9.92 10 12.11 10.09 9.34 8.17 6.80 14.85 1 12.02 6 7.98 6.67 5.55 3.90 2.62 10.53 2 6.53 29 2.84 1.54 -0.98 -2.44 -4.27 0.97 28 -1.35 55 5.24 3.89 2.51 1.62 0.41 4.01 19 2.65 45 5.58 4.56 3.82 2.95 2.22 5.05 9 4.46 30 6.31 5.47 4.95 4.31 3.74 6.25 7 6.15 7 7.38 6.17 5.73 5.09 4.60 6.68 12 7.24 5 9.09 7.37 6.83 6.25 5.17 7.87 10 8.85 5 7.30 6.11 5.42 4.95 4.41 6.14 21 7.08 7 5.88 5.00 3.90 3.25 2.37 3.53 68 4.87 28 -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% T1 T 1 T 1 T 1 T 1 T1 T1 T1 T 1 T 1 T 1 23 City of Clearwater Calendar Year Performance Comparison Total Returns of Total Fund Public Sponsors Years Ending December High 1st Qt Median 3rd Qt Low T Total Fund Net Ret Rank 1 Policy Index Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 8.35 7.01 6.26 5.43 4.43 9.60 1 7.30 19 27.27 21.96 19.19 15.40 9.61 30.28 3 26.00 5 -9.71 -20.34 -24.26 -27.30 -30.38 -27.10 73 -27.73 79 10.72 8.69 7.51 6.33 4.61 7.20 57 6.69 66 16.11 14.12 12.19 10.51 4.85 11.76 56 16.59 4 10.34 8.19 6.55 5.33 3.91 6.71 46 8.25 24 13.91 11.83 9.90 8.45 6.10 9.90 50 13.48 6 27.00 22.74 19.89 17.10 11.64 19.63 51 25.03 10 1.58 -6.24 -8.36 -9.78 -12.76 -8.74 59 -8.11 47 4.17 -0.92 -2.74 -4.93 -9.26 -5.35 79 -3.38 58 8.93 3.81 0.91 -1.77 -5.04 -3.49 87 -1.93 76 -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% T1 T 1 T1 T1 T 1 T1 T 1 T 1 T1 T1 T1 24 City of Clearwater Performance Summary Total Fund September 30, 2010 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Qtr YTD 1 Year 3 Year 5 Year Incept 12/31/87 Total FundPolicy Index Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Total Fund Policy Index Rank ING Investment Management Russell 1000 Growth Rank Aletheia Research Russell 1000 Value Rank NTGI-QM Russell 1000 Value Russell 1000 Value Rank Artisan Partners Russell MidCap Growth Rank Wedge Capital Management Russell MidCap Value Rank LMCG Small Cap Selected Growth Russell 2000 Growth Rank 10.30 9.92 6 12.84 13.00 39 11.88 10.13 18 10.20 10.13 54 18.73 14.65 4 8.63 12.14 87 12.17 12.82 41 9.63 7.30 1 5.51 4.37 28 3.76 4.50 52 4.72 4.50 31 16.62 10.86 4 8.84 11.16 38 10.03 10.22 55 14.89 12.02 1 13.12 12.66 27 10.32 8.91 36 9.43 8.91 41 23.07 18.27 7 16.94 16.94 20 15.44 14.78 59 0.98 -1.35 28 -3.32 -4.36 22 -5.69 -9.39 19 -9.15 -9.39 70 0.23 -3.90 12 -2.50 -4.78 28 -8.71 -3.74 92 5.06 4.46 9 2.99 2.06 29 7.49 2.86 1 9.15 9.37 10.71 8.71 -5.66 -8.77 -8.53 -8.76 6.93 4.28 -1.28 -3.72 -5.49 -1.12 12/31/87 12/31/87 6/30/07 6/30/07 7/31/01 2/28/07 2/28/07 $614,486,598 $80,620,585 $24,914,461 $38,754,649 $35,809,677 $36,139,977 $5,209 25 City of Clearwater Performance Summary Total Fund September 30, 2010 Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Atlanta Capital Management Russell 2000 Value Rank Systematic Financial Management Russell 2000 Value Rank Riverbridge Partners Earnest Partners MSCI EAFE Index Gross Dividend Rank Wentworth Hauser & Violich MSCI EAFE Index Gross Dividend Rank Eaton Vance Management MSCI Emg Mkts (Gross) Rank Wellington Management MSCI Emg Mkts (Gross) Rank Dodge & Cox Barclays U.S. Aggregate Rank Western Asset Management Co. Barclays U.S. Aggregate Rank Security Lending Income Account Citigroup 3-month T-Bill In House Account Citigroup 3-month T-Bill 12.56 9.72 15 13.98 9.72 3 19.36 16.53 11 17.91 16.53 27 18.60 18.16 63 17.79 18.16 76 2.46 2.48 70 2.76 2.48 54 9.87 0.04 0.00 0.04 11.38 7.93 30 14.12 7.93 10 9.33 1.46 19 2.45 1.46 64 15.33 11.02 46 8.01 11.02 92 7.39 7.94 65 8.27 7.94 43 27.03 0.09 0.00 0.09 16.40 11.85 30 18.95 11.85 6 15.59 3.71 15 11.50 3.71 22 22.02 20.54 53 15.83 20.54 89 9.20 8.16 46 8.58 8.16 54 33.43 0.12 0.00 0.12 3.44 -4.99 1 -5.41 -4.99 86 8.27 7.42 30 8.12 7.42 33 15.66 1.01 0.00 1.01 7.04 0.74 1 2.69 0.74 47 6.91 6.20 31 6.59 6.20 44 11.21 2.47 0.00 2.47 9.58 6.06 5.73 6.06 -1.63 -9.05 -7.37 -9.05 -0.15 -1.42 2.64 1.76 5.88 5.34 6.05 5.63 44 8.17 2.23 0.81 4.14 8/31/03 8/31/03 9/30/10 4/30/08 4/30/08 4/30/08 3/31/08 2/29/04 9/30/04 6/30/03 12/31/87 $10,038,451 $9,614,267 $16,876,305 $27,858,050 $27,338,561 $28,791,544 $26,804,123 $105,548,263 $82,378,407 $37,416 $2,244,663 26 City of Clearwater Performance Summary Total Fund September 30, 2010 Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Security Capital Wilshire RESI Index Rank 13.08 13.24 20 21.98 19.35 2 34.17 30.02 2 -6.06 -6.23 4/30/08 $60,711,992 27 28 City of Clearwater Domestic Equity Composite as of 9/30/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Cisco Sys Inc Google Inc Philip Morris Intl I Qualcomm Inc Roper Inds Inc New Wal Mart Stores Inc Directv GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Consumer Staples Information Technology Industrials Consumer Staples Consumer Discretionary 2.14 1.86 1.49 1.29 1.15 1.13 1.13 1.09 0.96 0.95 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 6.66 6.84 16.56 13.61 5.89 10.47 11.87 24.98 0.43 2.68 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Domestic Equity CompositStandard & Poors 500 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Domestic Equity Composite Standard & Poors 500 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.40 11.30 231,668 -7,130 28,236 252,774 8.74 3.88 239,449 -7,130 20,455 252,774 15.04 10.15 226,334 -7,130 33,570 252,774 -4.63 -7.16 307,949 -7,130 -48,045 252,774 2.35 0.64 290,646 -7,130 -30,741 252,774 0.95 -0.44 342,777 -7,130 -82,873 252,774 10.37 9.40 32,236 -7,130 227,668 252,774 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 29 City of Clearwater Domestic Equity Composite as of 9/30/10 Cash & Equiv $4,761 1.88% Domestic Equity $248,012 98.12% Periods from 12/87 to 9/10 Alpha Beta R-Squared 0.17 1.09 0.93 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 E 1 T Annualized Standard Deviation% E Domestic Equity Composit 1 Standard & Poors 500 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 10.37 9.40 4.28 17.96 15.97 1.13 0.34 0.32 0.00 0.23 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 30 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low E Domestic Equity Composite Net Ret Rank 1 Standard & Poors 500 Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 16.45 12.58 11.21 9.60 2.64 12.40 27 11.30 45 21.98 15.44 11.38 9.08 3.68 15.04 26 10.15 66 12.73 6.31 2.84 1.13 -2.60 4.78 35 1.26 73 2.76 -2.53 -5.33 -7.13 -9.87 -4.63 44 -7.16 75 6.96 2.52 -0.02 -1.71 -4.20 0.45 44 -1.75 77 7.40 3.81 1.81 0.66 -1.47 2.35 43 0.64 76 9.25 6.30 4.25 2.76 1.38 4.62 44 2.49 84 10.90 8.06 6.01 4.36 3.02 5.81 53 4.04 85 13.73 10.62 8.33 6.56 5.19 8.48 48 6.39 83 11.70 8.56 5.62 3.45 2.71 5.30 53 3.00 88 10.84 6.41 3.16 -0.29 -1.95 0.95 64 -0.44 83 -15% -10% -5% 0% 5% 10% 15% 20% 25% E1 E 1 E 1 E 1 E 1 E 1 E 1 E 1 E 1 E 1 E 1 31 City of Clearwater Calendar Year Performance Comparison Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low E Domestic Equity Composite Net Ret Rank 1 Standard & Poors 500 Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 14.90 9.23 5.21 3.42 -0.51 8.74 28 3.88 69 54.29 37.01 29.04 24.67 13.04 32.14 40 26.45 67 -16.56 -33.50 -37.01 -41.10 -49.11 -37.76 57 -36.99 49 21.80 9.91 5.38 0.14 -7.80 7.18 35 5.52 46 23.05 17.51 14.59 10.01 1.64 13.01 61 15.81 38 15.63 10.40 6.85 4.51 -0.10 8.12 41 4.89 69 25.36 18.11 13.02 9.95 3.31 13.18 48 10.87 67 58.57 39.43 31.39 27.52 18.25 33.74 41 28.69 66 -3.85 -14.52 -20.92 -24.84 -35.28 -21.30 52 -22.12 62 20.22 3.26 -8.34 -14.01 -30.91 -10.98 56 -11.88 63 28.45 12.49 -0.33 -9.12 -22.96 -10.07 79 -9.12 75 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% E 1 E 1 E1 E1 E1 E1 E1 E 1 E1 E1 E1 32 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -14.0 -12.2 -10.4 -8.5 -6.7 -4.9 -3.1 -1.3 0.4 2.2 4.0 E 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank E Domestic Equity Composite 1 Standard & Poors 500 Median -4.634425.4555 -7.167524.0034 -5.3325.03 33 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 12.0 13.8 15.6 17.4 19.2 21.0 22.8 24.6 26.4 28.2 30.0 -3.0 -2.1 -1.1 -0.2 0.6 1.5 2.4 3.3 4.2 5.1 6.0 E 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank E Domestic Equity Composite 1 Standard & Poors 500 Median 2.354320.1752 0.647619.1330 1.8120.12 34 City of Clearwater Large Cap Equity Composite as of 9/30/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Cisco Sys Inc Google Inc Philip Morris Intl I Qualcomm Inc Wal Mart Stores Inc Directv Caterpillar Inc GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Consumer Staples Information Technology Consumer Staples Consumer Discretionary Industrials 4.31 3.75 3.00 2.60 2.30 2.26 2.26 1.92 1.91 1.71 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 10.02 8.95 13.76 12.61 8.70 10.05 7.75 25.55 0.80 1.82 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Large Cap Equity ComposiRussell 1000 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Large Cap Equity Composite Russell 1000 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 11.90 11.56 98,994 31,870 13,426 144,290 5.10 4.41 105,398 31,870 7,022 144,290 11.54 10.75 99,324 31,870 13,096 144,290 -5.82 -6.80 132,589 31,870 -20,170 144,290 1.12 0.85 147,735 31,870 -35,316 144,290 0.14 -0.21 234,972 31,870 -122,552 144,290 9.52 9.39 18,032 31,870 94,388 144,290 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 35 City of Clearwater Large Cap Equity Composite as of 9/30/10 Cash & Equiv $1,475 1.02% Domestic Equity $142,815 98.98% Periods from 3/88 to 9/10 Alpha Beta R-Squared 0.07 0.98 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.0 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 L1 T Annualized Standard Deviation% L Large Cap Equity Composi 1 Russell 1000 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 9.52 9.39 4.26 16.41 16.42 1.13 0.32 0.31 0.00 0.02 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 36 City of Clearwater Large Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low L Large Cap Equity Composite Net Ret Rank 1 Russell 1000 Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 12.66 11.49 11.29 10.59 8.03 11.90 11 11.56 21 13.78 11.12 10.21 9.16 5.90 11.54 17 10.75 31 6.04 2.61 1.45 1.24 -1.95 1.73 40 1.95 38 -1.60 -5.97 -6.99 -7.15 -9.00 -5.82 23 -6.80 45 2.27 -0.89 -1.61 -1.72 -3.70 -0.92 27 -1.37 42 4.25 1.35 0.75 0.65 -0.62 1.12 34 0.85 43 5.54 3.76 2.81 2.51 2.04 3.36 36 2.97 48 7.26 5.54 4.49 4.06 3.38 4.74 44 4.47 50 9.31 7.70 6.82 6.41 6.07 7.37 35 6.85 49 6.62 4.65 3.44 3.03 2.84 3.68 43 3.54 49 5.94 2.44 -0.08 -0.40 -0.61 0.14 47 -0.21 55 -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% L1 L1 L1 L 1 L1 L1 L1 L1 L1 L1 L1 37 City of Clearwater Large Neutral Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low L Large Cap Equity Composite Net Ret Rank 1 Russell 1000 Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 7.60 4.87 3.90 3.16 0.63 5.10 17 4.41 32 38.93 29.43 26.68 25.72 20.47 24.59 85 28.42 34 -31.21 -36.08 -36.96 -38.17 -43.21 -35.23 17 -37.60 69 11.05 6.07 5.49 4.39 -0.76 7.76 13 5.77 30 21.00 17.45 15.86 15.67 11.92 11.52 95 15.46 81 15.55 10.24 6.35 4.90 4.05 8.63 38 6.27 51 22.14 15.58 11.40 10.84 7.37 11.24 51 11.39 50 41.92 31.86 28.84 28.60 25.17 31.37 31 29.90 41 -9.99 -18.67 -21.94 -22.08 -24.23 -22.02 58 -21.65 45 9.51 -5.06 -11.41 -11.91 -12.42 -12.65 96 -12.46 95 20.05 4.96 -8.34 -9.05 -9.91 -7.47 43 -7.80 43 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% L1 L 1 L1 L1 L 1 L1 L1 L1 L1 L1 L1 38 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -14.0 -12.2 -10.4 -8.5 -6.7 -4.9 -3.1 -1.3 0.4 2.2 4.0 L 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank L Large Cap Equity Composite 1 Russell 1000 Median -5.825423.6527 -6.806624.5545 -5.3325.03 39 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 12.0 13.8 15.6 17.4 19.2 21.0 22.8 24.6 26.4 28.2 30.0 -3.0 -2.1 -1.1 -0.2 0.6 1.5 2.4 3.3 4.2 5.1 6.0 L 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank L Large Cap Equity Composite 1 Russell 1000 Median 1.126218.7421 0.856719.4842 1.8120.12 40 City of Clearwater ING Investment Management as of 9/30/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Cisco Sys Inc Google Inc Philip Morris Intl I Qualcomm Inc Directv United Technologies Wal Mart Stores Inc GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Consumer Staples Information Technology Consumer Discretionary Industrials Consumer Staples 5.62 4.28 3.62 3.39 3.00 2.95 2.95 2.49 2.02 1.97 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 8.22 5.07 14.74 13.17 8.21 12.34 5.90 31.31 1.04 0.00 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 ING Investment ManagemenRussell 1000 Growth Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 ING Investment Management Russell 1000 Growth Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.84 13.00 49,346 23,387 7,887 80,621 5.51 4.37 52,775 23,387 4,458 80,621 13.12 12.66 49,223 23,387 8,010 80,621 -3.32 -4.36 61,596 23,387 -4,362 80,621 2.99 2.06 48,970 23,387 8,263 80,621 -0.32 -3.44 115,741 23,387 -58,507 80,621 10.71 8.71 17,469 23,387 39,765 80,621 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 41 City of Clearwater ING Investment Management as of 9/30/10 Cash & Equiv $780 0.97% Domestic Equity $79,840 99.03% Periods from 12/87 to 9/10 Alpha Beta R-Squared 0.61 0.83 0.92 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 i 1 T Annualized Standard Deviation% i ING Investment Managemen 1 Russell 1000 Growth T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 10.71 8.71 4.28 16.44 18.98 1.13 0.39 0.23 0.00 0.22 Asset Allocation ($000) Risk/Return Analysis 42 City of Clearwater Large Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low i ING Investment Management Net Ret Rank 1 Russell 1000 Growth Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 17.71 13.46 12.24 11.11 8.00 12.84 39 13.00 35 19.91 13.35 10.72 8.17 3.43 13.12 27 12.66 32 11.43 5.65 3.53 1.82 -1.69 3.43 50 5.15 31 -0.62 -3.44 -5.04 -6.88 -9.87 -3.32 22 -4.36 41 4.73 1.90 0.84 -0.62 -2.59 1.76 27 1.09 43 4.56 3.26 1.99 1.03 -1.39 2.99 29 2.06 48 6.62 5.22 4.20 3.13 1.60 5.23 24 3.59 64 8.11 6.44 5.30 4.16 2.69 6.06 28 4.15 76 10.68 8.73 7.06 6.01 4.89 7.81 40 6.64 60 7.47 5.78 4.31 2.87 1.93 4.31 50 2.93 72 3.11 1.04 -0.73 -1.88 -3.23 -0.32 42 -3.44 95 -15% -10% -5% 0% 5% 10% 15% 20% 25% i1 i1 i 1 i1 i1 i1 i 1 i 1 i1 i 1 i 1 43 City of Clearwater Large Growth Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low i ING Investment Management Net Ret Rank 1 Russell 1000 Growth Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 10.21 5.93 3.68 1.86 -1.95 5.51 28 4.37 41 53.63 38.58 33.26 27.86 16.42 24.43 85 37.21 28 -28.97 -34.25 -38.52 -42.72 -49.23 -33.18 13 -38.43 49 24.61 18.84 13.92 8.95 4.00 17.10 30 11.82 62 17.78 11.57 8.37 5.53 -2.94 7.14 66 9.09 46 17.00 11.06 8.04 5.24 1.92 12.02 22 5.27 73 19.36 14.70 11.09 6.89 4.65 10.27 53 6.30 81 48.42 33.43 29.57 26.06 18.89 30.00 44 29.75 48 -12.59 -19.74 -23.85 -27.67 -32.10 -22.22 34 -27.89 78 9.46 -11.47 -15.36 -20.28 -27.09 -21.29 78 -20.42 78 11.39 0.85 -7.45 -12.58 -21.90 -3.12 33 -22.43 96 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% i1 i 1 i 1 i 1 i1 i 1 i1 i1 i 1 i1 i 1 44 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low i ING Investment Management Return Rank 1 Russell 1000 Growth Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -3.32 31 -4.36 41 1.51 -5.62 -8.56 -10.35 -14.59 -5.32 22 -6.91 35 4.67 -0.46 -3.29 -5.11 -9.86 0.68 16 -0.78 27 3.13 -1.83 -4.63 -6.49 -11.31 -0.88 19 -1.88 25 3.77 -1.61 -4.27 -6.19 -10.68 -1.77 26 -2.50 33 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% i 1 i 1 i 1 i 1 i1 45 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -14.0 -12.2 -10.4 -8.5 -6.7 -4.9 -3.1 -1.3 0.4 2.2 4.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank i ING Investment Management 1 Russell 1000 Growth Median -3.323121.7712 -4.364124.4644 -5.3325.03 46 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 12.0 13.8 15.6 17.4 19.2 21.0 22.8 24.6 26.4 28.2 30.0 -3.0 -2.1 -1.1 -0.2 0.6 1.5 2.4 3.3 4.2 5.1 6.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank i ING Investment Management 1 Russell 1000 Growth Median 2.993417.5711 2.064619.3540 1.8120.12 47 City of Clearwater Equity Summary Statistics ING Investment Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 1000 Growth 63 79,840,216 73,593,807 17,317,095 1.18 19.42 18.09 1.11 2.63 34.55 11.06 629 76,176,007 5,355,792 1.54 18.20 18.33 1.02 3.54 33.49 10.07 Ten Largest Holdings Apple Computer Inc Exxon Mobil Corp Microsoft Corp Cisco Sys Inc Google Inc Philip Morris Intl I Qualcomm Inc Directv United Technologies Wal Mart Stores Inc Market Value% of PortfolioQuarterly Ret 4,480,413 3,416,369 2,891,265 2,700,861 2,395,499 2,352,616 2,352,376 1,985,168 1,607,946 1,574,023 5.62 4.28 3.62 3.39 3.00 2.95 2.95 2.49 2.02 1.97 12.81 9.06 6.99 2.77 18.17 23.62 38.07 22.73 10.40 12.00 Ten Best Performers Priceline Com Inc Eastman Chem Co Alberto Culver Co Ne Qualcomm Inc Wyndham Worldwide Co Arch Coal Inc National-Oilwell Inc Blackstone Group L P Netapp Inc Caterpillar Inc Quarterly Ret 97.31 39.61 39.38 38.07 37.10 35.45 34.81 34.00 33.45 31.88 Ten Worst Performers Urban Outfitters Inc Medco Health Solutio Conagra Foods Inc National Semiconduct Zimmer Hldgs Inc Amerisourcebergen Co Thermo Fisher Scient Hospira Inc Procter & Gamble Co Covidien Plc Quarterly Ret -8.58 -5.48 -5.13 -4.36 -3.18 -3.17 -2.39 -0.77 0.77 1.01 48 City of Clearwater Equity Contribution to Return ING Investment Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 1000 Growth 63 79,840,216 73,593,807 17,317,095 1.18 19.42 18.09 1.11 2.63 34.55 11.06 629 76,176,007 5,355,792 1.54 18.20 18.33 1.02 3.54 33.49 10.07 Ten Best Contributors Priceline Com Inc Qualcomm Inc Apple Computer Inc Philip Morris Intl I Directv National-Oilwell Inc Google Inc Wyndham Worldwide Co Alberto Culver Co Ne Caterpillar Inc Market Value% of PortfolioQuarterly Ret 1,436,903 2,352,376 4,480,413 2,352,616 1,985,168 1,273,265 2,395,499 1,172,529 1,103,672 1,324,578 1.80 2.95 5.62 2.95 2.49 1.60 3.00 1.47 1.38 1.66 97.31 38.07 12.81 23.62 22.73 34.81 18.17 37.10 39.38 31.88 Ten Worst Contributors Medco Health Solutio Urban Outfitters Inc National Semiconduct Conagra Foods Inc Amerisourcebergen Co Zimmer Hldgs Inc Thermo Fisher Scient Hospira Inc Procter & Gamble Co Covidien Plc Market Value% of PortfolioQuarterly Ret 1,031,309 627,511 847,992 690,803 1,004,912 660,876 687,222 1,393,267 557,661 1,074,721 1.29 0.79 1.06 0.87 1.26 0.83 0.86 1.75 0.70 1.35 -5.48 -8.58 -4.36 -5.13 -3.17 -3.18 -2.39 -0.77 0.77 1.01 49 City of Clearwater Equity Sector Attribution Analysis ING Investment Management Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 7.45 2.05 14.77 10.67 11.75 16.37 14.79 22.14 0.00 0.00 100.00 10.09 4.59 13.02 14.19 10.02 10.97 4.65 31.42 0.86 0.18 100.00 15.46 26.03 16.67 25.23 11.52 5.50 10.54 12.88 13.50 9.97 18.87 15.51 17.78 13.11 6.94 11.57 12.21 17.08 8.40 13.03 0.41 0.15 0.17 0.79 -0.19 -0.24 -0.15 0.15 0.00 0.00 1.09 0.08 -0.15 0.04 -0.17 0.00 -0.33 -0.15 0.08 -0.03 0.01 -0.62 0.49 -0.00 0.21 0.63 -0.19 -0.56 -0.30 0.22 -0.03 0.01 0.48 Index - Russell 1000 Growth Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.39% [ Actual Return 13.11% ] - [ Buy Hold Return 13.50% ] 50 City of Clearwater Equity Sector Attribution Chart ING Investment Management Quarter Ending 9/10 % Allocation Energy 7.45 10.09 Materials 2.05 4.59 Industrials 14.77 13.02 Con. Discretionary 10.67 14.19 Consumer Staples 11.75 10.02 Health Care 16.37 10.97 Financials 14.79 4.65 Infomation Tech. 22.14 31.42 Telecom. Services 0.00 0.86 Utilities 0.00 0.18 ING Investment ManagementRussell 1000 Growth % Return 15.46 9.97 26.03 18.87 16.67 15.51 25.23 17.78 11.52 13.11 5.50 6.94 10.54 11.57 12.88 12.21 17.08 8.40 % Variance 0.49 -0.00 0.21 0.63 -0.19 -0.56 -0.30 0.22 -0.03 0.01 51 City of Clearwater Aletheia Research as of 9/30/10 Great Atl & Pac Tea Atp Oil & Gas Corp Goldcorp Inc New MGM Grand Inc Sunpower Corp Barrick Gold Corp Newmont Mng Corp Hld Intl Business McHn Hess Corp Canadian Nat Res Ltd GICS Sector% Port Consumer Staples Energy Materials Consumer Discretionary Information Technology Materials Materials Information Technology Energy Energy 2.22 2.21 2.20 2.09 2.05 2.04 2.03 2.02 1.99 1.98 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 15.95 21.74 10.53 10.74 10.29 2.52 13.86 6.55 0.00 7.83 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 Aletheia ResearchRussell 1000 Value Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 Aletheia Research Russell 1000 Value Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 11.88 10.13 14,480 8,483 1,952 24,914 3.76 4.50 15,613 8,483 819 24,914 10.32 8.91 14,683 8,483 1,749 24,914 -5.69 -9.39 19,318 8,483 -2,887 24,914 -5.66 -8.77 19,365 8,483 -2,933 24,914 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 52 City of Clearwater Aletheia Research as of 9/30/10 Cash & Equiv $695 2.79% Domestic Equity $24,220 97.21% Periods from 6/07 to 9/10 Alpha Beta R-Squared 1.00 1.03 0.91 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.028.0 -9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 a 1 T Annualized Standard Deviation% a Aletheia Research 1 Russell 1000 Value T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -5.66 -8.77 1.45 26.61 24.62 0.92 -0.27 -0.41 0.00 0.43 Asset Allocation ($000) Risk/Return Analysis 53 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low a Aletheia Research Net Ret Rank 1 Russell 1000 Value Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 13.05 11.22 10.33 9.28 6.06 11.88 18 10.13 58 18.72 11.45 8.92 6.80 3.38 10.32 36 8.91 50 7.79 2.53 0.87 -0.93 -3.01 2.20 27 -1.34 85 -1.19 -6.62 -8.08 -9.35 -11.26 -5.69 19 -9.39 75 -15% -10% -5% 0% 5% 10% 15% 20% a 1 a 1 a 1 a 1 54 City of Clearwater Large Value Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low a Aletheia Research Net Ret Rank 1 Russell 1000 Value Net Ret Rank 9/30/10 YTD20092008 12.18 5.24 3.87 2.05 -0.23 3.76 52 4.50 37 41.73 28.07 23.92 20.58 15.93 36.50 11 19.69 83 -26.68 -33.69 -36.23 -38.47 -44.44 -37.97 71 -36.85 61 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% a 1 a 1 a 1 55 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low a Aletheia Research Return Rank 1 Russell 1000 Value Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -5.69 54 -9.39 93 1.51 -5.62 -8.56 -10.35 -14.59 -9.57 61 -12.33 89 4.67 -0.46 -3.29 -5.11 -9.86 3.13 -1.83 -4.63 -6.49 -11.31 3.77 -1.61 -4.27 -6.19 -10.68 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% a 1 a 1 56 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -14.0 -12.2 -10.4 -8.5 -6.7 -4.9 -3.1 -1.3 0.4 2.2 4.0 a 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank a Aletheia Research 1 Russell 1000 Value Median -5.695427.7976 -9.399325.7158 -5.3325.03 57 City of Clearwater Equity Summary Statistics Aletheia Research Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 1000 Value 70 24,219,935 47,871,403 16,021,123 1.55 56.10 13.98 1.23 1.66 49.46 -2.14 671 66,652,865 4,153,984 2.34 17.18 15.13 1.03 1.39 54.28 -0.34 Ten Largest Holdings Great Atl & Pac Tea Atp Oil & Gas Corp Goldcorp Inc New MGM Grand Inc Sunpower Corp Barrick Gold Corp Newmont Mng Corp Hld Intl Business McHn Hess Corp Canadian Nat Res Ltd Market Value% of PortfolioQuarterly Ret 536,917 534,056 532,685 504,949 495,936 493,914 490,232 488,270 480,941 479,037 2.22 2.21 2.20 2.09 2.05 2.04 2.03 2.02 1.99 1.98 1.54 28.90 -0.65 17.01 19.01 2.20 1.98 9.18 17.65 4.35 Ten Best Performers Agrium Inc Mosaic Co Freeport-McMoran Cop Transocean Ltd Zug Cliffs Natural Resou Silver Wheaton Corp Caterpillar Inc Du Pont E I De Nemou Atp Oil & Gas Corp Barnes & Nobles Inc Quarterly Ret 53.23 50.89 45.09 38.77 35.87 32.59 31.88 30.30 28.90 27.67 Ten Worst Performers Dole Food Co Inc New Cemex S A Bank Amer Corp AMR Corp Transatlantic Petrol Overseas Shipholdng Wells Fargo & Co New Goldcorp Inc New Intel Corp Nucor Corp Quarterly Ret -12.27 -12.10 -8.70 -7.52 -6.62 -6.22 -1.66 -0.65 -0.38 0.74 58 City of Clearwater Equity Contribution to Return Aletheia Research Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 1000 Value 70 24,219,935 47,871,403 16,021,123 1.55 56.10 13.98 1.23 1.66 49.46 -2.14 671 66,652,865 4,153,984 2.34 17.18 15.13 1.03 1.39 54.28 -0.34 Ten Best Contributors Freeport-McMoran Cop Atp Oil & Gas Corp Silver Wheaton Corp Caterpillar Inc Agrium Inc Mosaic Co Murphy Oil Corp Barnes & Nobles Inc Sunpower Corp AES Corp Market Value% of PortfolioQuarterly Ret 369,312 534,056 448,520 449,656 238,093 232,102 430,654 366,508 495,936 407,862 1.53 2.21 1.85 1.86 0.98 0.96 1.78 1.51 2.05 1.69 45.09 28.90 32.59 31.88 53.23 50.89 25.61 27.67 19.01 22.84 Ten Worst Contributors Dole Food Co Inc New Bank Amer Corp Cemex S A Overseas Shipholdng AMR Corp Transatlantic Petrol Goldcorp Inc New Wells Fargo & Co New Intel Corp Canadian Oil Sands T Market Value% of PortfolioQuarterly Ret 345,916 387,951 231,260 295,667 237,790 248,758 532,685 167,743 369,985 402,064 1.43 1.60 0.96 1.22 0.98 1.03 2.20 0.69 1.53 1.66 -12.27 -8.70 -12.10 -6.22 -7.52 -6.62 -0.65 -1.66 -0.38 59 City of Clearwater Equity Sector Attribution Analysis Aletheia Research Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 13.46 23.66 12.81 11.00 8.71 2.56 15.33 4.55 0.00 7.93 100.00 10.58 2.87 9.10 7.27 10.53 13.44 28.51 5.39 4.95 7.36 100.00 13.61 17.95 9.71 15.61 10.51 7.40 6.49 9.07 13.66 12.64 15.87 16.46 11.98 12.00 8.56 10.26 4.43 10.25 21.34 12.37 10.18 -0.30 0.35 -0.29 0.40 0.17 -0.07 0.32 -0.05 0.00 0.10 0.62 0.16 1.31 0.07 0.07 0.03 -0.01 0.76 -0.00 -0.55 0.01 1.84 -0.14 1.66 -0.22 0.47 0.20 -0.08 1.07 -0.05 -0.55 0.12 2.46 Index - Russell 1000 Value Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.50% [ Actual Return 12.14% ] - [ Buy Hold Return 12.64% ] 60 City of Clearwater Equity Sector Attribution Chart Aletheia Research Quarter Ending 9/10 % Allocation Energy 13.46 10.58 Materials 23.66 2.87 Industrials 12.81 9.10 Con. Discretionary 11.00 7.27 Consumer Staples 8.71 10.53 Health Care 2.56 13.44 Financials 15.33 28.51 Infomation Tech. 4.55 5.39 Telecom. Services 0.00 4.95 Utilities 7.93 7.36 Aletheia ResearchRussell 1000 Value % Return 13.61 15.87 17.95 16.46 9.71 11.98 15.61 12.00 10.51 8.56 7.40 10.26 6.49 4.43 9.07 10.25 21.34 13.66 12.37 % Variance -0.14 1.66 -0.22 0.47 0.20 -0.08 1.07 -0.05 -0.55 0.12 61 City of Clearwater NTGI-QM Russell 1000 Value as of 9/30/10 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 NTGI-QM Russell 1000 ValRussell 1000 Value Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 NTGI-QM Russell 1000 Value Russell 1000 Value Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 10.20 10.13 35,168 0 3,587 38,755 4.72 4.50 37,009 0 1,745 38,755 9.43 8.91 35,417 0 3,338 38,755 -9.15 -9.39 51,671 0 -12,916 38,755 -8.53 -8.76 26,197 0 12,558 38,755 Portfolio Performance (%) 62 City of Clearwater NTGI-QM Russell 1000 Value as of 9/30/10 Domestic Equity $38,755 100.00% Periods from 6/07 to 9/10 Alpha Beta R-Squared 0.07 1.00 1.00 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 -9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 n1 T Annualized Standard Deviation% n NTGI-QM Russell 1000 Val 1 Russell 1000 Value T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -8.53 -8.76 1.45 24.66 24.62 0.92 -0.40 -0.41 0.00 1.31 Asset Allocation ($000) Risk/Return Analysis 63 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low n NTGI-QM Russell 1000 Value Net Ret Rank 1 Russell 1000 Value Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 13.05 11.22 10.33 9.28 6.06 10.20 54 10.13 58 18.72 11.45 8.92 6.80 3.38 9.43 41 8.91 50 7.79 2.53 0.87 -0.93 -3.01 -0.94 75 -1.34 85 -1.19 -6.62 -8.08 -9.35 -11.26 -9.15 70 -9.39 75 -15% -10% -5% 0% 5% 10% 15% 20% n 1 n 1 n 1 n 1 64 City of Clearwater Large Value Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low n NTGI-QM Russell 1000 Value Net Ret Rank 1 Russell 1000 Value Net Ret Rank 9/30/10 YTD20092008 12.18 5.24 3.87 2.05 -0.23 4.72 31 4.50 37 41.73 28.07 23.92 20.58 15.93 20.35 77 19.69 83 -26.68 -33.69 -36.23 -38.47 -44.44 -36.86 61 -36.85 61 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% n 1 n 1 n1 65 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low n NTGI-QM Russell 1000 Value Return Rank 1 Russell 1000 Value Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -9.15 92 -9.39 93 1.51 -5.62 -8.56 -10.35 -14.59 -12.10 88 -12.33 89 4.67 -0.46 -3.29 -5.11 -9.86 3.13 -1.83 -4.63 -6.49 -11.31 3.77 -1.61 -4.27 -6.19 -10.68 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% n 1 n 1 66 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -14.0 -12.2 -10.4 -8.5 -6.7 -4.9 -3.1 -1.3 0.4 2.2 4.0 n1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank n NTGI-QM Russell 1000 Value 1 Russell 1000 Value Median -9.159225.7559 -9.399325.7158 -5.3325.03 67 City of Clearwater Mid Cap Equity Composite as of 9/30/10 Borg-Warner Automoti Sonoco Prods Co Computer Sciences Co Simon Ppty Group Inc Dover Corp Duke Realty Corp. Allstate Corp Cerner Corp Transdigm Group Inc Lincoln Natl Corp In GICS Sector% Port Consumer Discretionary Materials Information Technology Financials Industrials Financials Financials Health Care Industrials Financials 2.59 2.18 2.11 2.04 1.94 1.94 1.91 1.85 1.80 1.71 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 3.58 4.93 20.27 15.44 2.70 8.01 16.65 23.33 0.00 5.09 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Mid Cap Equity CompositeRussell MidCap Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Mid Cap Equity Composite Russell MidCap Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 13.43 13.32 63,429 0 8,521 71,950 12.57 10.98 63,914 0 8,036 71,950 19.91 17.56 60,003 0 11,947 71,950 -2.67 -4.17 94,354 0 -22,404 71,950 4.38 2.60 87,278 0 -15,328 71,950 2.00 4.86 107,850 0 -35,900 71,950 11.80 11.09 15,585 0 56,365 71,950 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 68 City of Clearwater Mid Cap Equity Composite as of 9/30/10 Cash & Equiv $2,358 3.28% Domestic Equity $69,591 96.72% Periods from 3/88 to 9/10 Alpha Beta R-Squared 0.07 1.16 0.82 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 M 1 T Annualized Standard Deviation% M Mid Cap Equity Composite 1 Russell MidCap T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 11.80 11.09 4.26 23.68 18.36 1.13 0.32 0.37 0.00 0.11 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 69 City of Clearwater Midcap Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low M Mid Cap Equity Composite Net Ret Rank 1 Russell MidCap Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 16.51 13.58 12.95 11.25 8.39 13.43 27 13.32 29 21.38 18.76 17.45 13.58 9.46 19.91 12 17.56 48 25.06 10.02 7.53 6.11 2.84 9.45 31 6.48 71 4.31 0.60 -1.99 -4.41 -6.83 -2.67 57 -4.17 68 7.74 5.40 2.82 0.77 -0.71 3.11 46 0.93 68 12.74 7.25 4.03 2.45 0.80 4.38 44 2.60 66 13.73 9.10 7.83 6.30 3.98 6.54 69 6.05 75 14.36 10.76 9.34 7.88 6.36 7.15 83 8.01 71 15.86 13.73 11.35 10.26 8.67 10.07 78 10.82 54 11.70 10.02 8.61 8.43 7.16 8.08 85 8.42 76 11.37 7.64 6.37 5.55 5.29 2.00 100 4.86 100 -10% -5% 0% 5% 10% 15% 20% 25% 30% M1 M 1 M 1 M 1 M 1 M 1 M1 M1 M1 M1 M 1 70 City of Clearwater Midcap Neutral Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low M Mid Cap Equity Composite Net Ret Rank 1 Russell MidCap Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 14.62 12.31 10.67 8.67 6.58 12.57 22 10.98 45 63.28 41.68 37.16 31.92 18.13 45.33 19 40.47 30 -21.12 -27.11 -36.83 -41.74 -50.49 -41.79 77 -41.46 71 12.74 7.76 3.07 -0.41 -2.17 10.26 10 5.59 41 28.41 18.61 13.84 10.51 6.16 12.53 60 15.27 43 16.06 12.54 11.55 9.25 3.93 7.85 79 12.65 21 26.20 21.64 20.47 16.52 10.62 14.48 91 20.23 50 68.55 39.21 35.62 33.40 27.72 38.95 25 40.08 15 -2.05 -8.82 -12.46 -14.56 -20.81 -19.87 91 -16.19 83 20.64 15.75 2.57 -1.10 -5.61 -7.30 99 -5.62 99 28.81 20.25 17.55 17.06 8.47 -15.89 100 8.26 99 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% M1 M 1 M1 M1 M1 M 1 M 1 M1 M1 M1 M 1 71 City of Clearwater Return vs Risk Total Returns of Midcap Neutral Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.8 19.6 22.4 25.2 28.0 30.8 33.6 36.4 39.2 42.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 M 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank M Mid Cap Equity Composite 1 Russell MidCap Median -2.675728.5868 -4.176829.2584 -1.9927.58 72 City of Clearwater Return vs Risk Total Returns of Midcap Neutral Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 10.0 12.4 14.8 17.2 19.6 22.0 24.4 26.8 29.2 31.6 34.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 M 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank M Mid Cap Equity Composite 1 Russell MidCap Median 4.384422.7776 2.606622.9482 4.0321.42 73 City of Clearwater Artisan Partners as of 9/30/10 Cerner Corp Citrix Sys Inc Allergan Inc Precision Castparts Cummins Engine Inc Agilent Technologies Trimble Navigation L C H Robinson Worldwi Borg-Warner Automoti Roper Inds Inc New GICS Sector% Port Health Care Information Technology Health Care Industrials Industrials Information Technology Information Technology Industrials Consumer Discretionary Industrials 3.67 3.28 3.16 3.09 3.06 2.78 2.70 2.54 2.41 2.25 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 5.17 0.00 19.23 21.01 0.00 12.81 7.56 34.23 0.00 0.00 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 7/31/01 Artisan PartnersRussell MidCap Growt Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 7/31/01 Artisan Partners Russell MidCap Growth Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 18.73 14.65 30,161 0 5,649 35,810 16.62 10.86 30,708 0 5,102 35,810 23.07 18.27 29,098 0 6,712 35,810 0.23 -3.90 26,409 0 9,401 35,810 7.49 2.86 38,537 0 -2,727 35,810 6.93 4.28 29,914 0 5,896 35,810 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 74 City of Clearwater Artisan Partners as of 9/30/10 Cash & Equiv $820 2.29% Domestic Equity $34,990 97.71% Periods from 7/01 to 9/10 Alpha Beta R-Squared 0.58 0.94 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 r 1 T Annualized Standard Deviation% r Artisan Partners 1 Russell MidCap Growth T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 6.93 4.28 2.27 20.72 20.77 0.51 0.22 0.10 0.00 0.36 Asset Allocation ($000) Risk/Return Analysis 75 City of Clearwater Midcap Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low r Artisan Partners Net Ret Rank 1 Russell MidCap Growth Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years 18.46 14.73 13.65 11.95 8.79 18.73 4 14.65 28 24.02 20.13 18.03 15.78 10.21 23.07 7 18.27 41 13.50 8.99 7.48 5.15 0.66 13.10 7 8.54 34 1.26 -0.84 -3.55 -5.11 -7.47 0.23 12 -3.90 57 7.18 5.27 3.08 1.76 -0.57 7.17 6 1.84 72 7.05 6.02 4.57 3.42 2.02 7.49 1 2.86 83 9.87 8.61 7.32 6.71 5.56 9.38 11 6.04 90 10.84 9.56 7.67 6.97 6.84 10.11 16 7.10 68 12.76 12.25 10.58 9.90 9.27 12.33 13 10.64 37 10.16 9.37 9.27 7.14 6.41 9.56 16 7.37 69 -10% -5% 0% 5% 10% 15% 20% 25% r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 76 City of Clearwater Midcap Growth Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low r Artisan Partners Net Ret Rank 1 Russell MidCap Growth Net Ret Rank 9/30/10 YTD20092008200720062005200420032002 16.48 12.55 10.58 8.88 4.21 16.62 4 10.86 47 57.23 44.56 38.63 34.28 26.32 51.38 10 46.30 19 -29.77 -35.43 -40.73 -45.10 -49.08 -42.87 60 -44.32 70 26.62 21.55 16.66 10.32 4.84 22.31 19 11.41 69 22.13 15.41 12.20 7.68 3.54 10.94 58 10.64 60 20.79 15.60 13.04 9.91 5.64 10.19 69 12.10 62 28.62 19.62 16.23 12.64 10.06 16.07 53 15.48 53 58.29 45.68 38.18 32.91 23.25 33.84 68 42.72 33 1.39 -15.23 -20.31 -27.14 -33.11 -23.37 62 -27.41 75 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% r 1 r 1 r1 r 1r1 r1 r1 r 1 r1 77 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low r Artisan Partners Return Rank 1 Russell MidCap Growth Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 0.23 11 -3.90 36 1.51 -5.62 -8.56 -10.35 -14.59 -3.50 12 -7.53 40 4.67 -0.46 -3.29 -5.11 -9.86 2.98 8 -2.05 38 3.13 -1.83 -4.63 -6.49 -11.31 1.89 8 -3.18 37 3.77 -1.61 -4.27 -6.19 -10.68 2.33 7 -3.11 38 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% r 1 r 1 r 1 r 1 r 1 78 City of Clearwater Return vs Risk Total Returns of Midcap Growth Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 18.2 20.4 22.6 24.8 27.0 29.2 31.4 33.6 35.8 38.0 -11.0 -9.5 -8.0 -6.5 -5.0 -3.5 -2.0 -0.5 1.0 2.5 4.0 r 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank r Artisan Partners 1 Russell MidCap Growth Median 0.231228.5261 -3.905729.4174 -3.5526.91 79 City of Clearwater Return vs Risk Total Returns of Midcap Growth Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0 32.0 0.0 0.9 1.8 2.6 3.6 4.5 5.4 6.3 7.2 8.1 9.0 r 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank r Artisan Partners 1 Russell MidCap Growth Median 7.49122.8058 2.868323.1566 4.5721.39 80 City of Clearwater Equity Summary Statistics Artisan Partners Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell MidCap Growth 74 34,989,962 9,447,931 5,952,782 0.48 31.68 30.20 1.23 3.71 19.40 9.10 495 7,136,396 3,845,102 0.93 23.76 18.67 1.17 3.53 37.77 6.90 Ten Largest Holdings Cerner Corp Citrix Sys Inc Allergan Inc Precision Castparts Cummins Engine Inc Agilent Technologies Trimble Navigation L C H Robinson Worldwi Borg-Warner Automoti Roper Inds Inc New Market Value% of PortfolioQuarterly Ret 1,285,047 1,146,432 1,104,398 1,082,475 1,068,844 971,067 946,080 887,984 841,920 788,678 3.67 3.28 3.16 3.09 3.06 2.78 2.70 2.54 2.41 2.25 10.67 61.59 14.28 23.77 39.53 17.38 25.14 26.09 40.92 16.67 Ten Best Performers Citrix Sys Inc Fossil Inc Arm Hldgs Plc Netflix Com Inc Red Hat Inc Borg-Warner Automoti Cummins Engine Inc Vanceinfo Technologi Mercadolibre Inc Vmware Inc Quarterly Ret 61.59 55.01 51.73 49.25 41.67 40.92 39.53 38.92 37.35 35.71 Ten Worst Performers Tesla Mtrs Inc Gsi Commerce Inc Intuitive Surgical I Cree Inc Community Health Sys Cme Group Inc Verisk Analytics Inc Blackboard Inc Varian Semiconductor Garmin Ltd Quarterly Ret -14.98 -14.24 -10.10 -9.56 -8.40 -7.09 -6.32 -3.46 0.42 4.01 81 City of Clearwater Equity Contribution to Return Artisan Partners Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell MidCap Growth 74 34,989,962 9,447,931 5,952,782 0.48 31.68 30.20 1.23 3.71 19.40 9.10 495 7,136,396 3,845,102 0.93 23.76 18.67 1.17 3.53 37.77 6.90 Ten Best Contributors Citrix Sys Inc Cummins Engine Inc Borg-Warner Automoti Arm Hldgs Plc Precision Castparts Mercadolibre Inc Trimble Navigation L Juniper Networks C H Robinson Worldwi Cameron Internationa Market Value% of PortfolioQuarterly Ret 1,146,432 1,068,844 841,920 598,444 1,082,475 678,492 946,080 716,260 887,984 717,432 3.28 3.06 2.41 1.71 3.09 1.94 2.70 2.05 2.54 2.05 61.59 39.53 40.92 51.73 23.77 37.35 25.14 33.00 26.09 32.10 Ten Worst Contributors Gsi Commerce Inc Cree Inc Cme Group Inc Community Health Sys Verisk Analytics Inc Blackboard Inc Intuitive Surgical I Tesla Mtrs Inc Varian Semiconductor Starbucks Corp Market Value% of PortfolioQuarterly Ret 543,400 472,323 505,533 185,820 229,682 367,608 114,063 54,702 166,924 58,834 1.55 1.35 1.45 0.53 0.66 1.05 0.33 0.16 0.48 0.17 -14.24 -9.56 -7.09 -8.40 -6.32 -3.46 -10.10 -14.98 0.42 5.82 82 City of Clearwater Equity Sector Attribution Analysis Artisan Partners Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 4.63 0.00 16.40 20.88 0.29 15.05 6.48 36.26 0.00 0.00 100.00 5.11 6.61 15.87 19.74 5.42 14.45 6.94 23.34 1.86 0.66 100.00 19.43 22.56 19.66 19.20 12.16 13.53 22.56 19.65 11.51 16.38 15.90 18.83 9.44 6.63 13.04 17.43 18.34 8.40 14.75 0.37 0.00 1.09 0.17 0.03 0.83 0.03 1.86 0.00 0.00 4.38 0.02 -0.11 0.01 0.05 0.27 -0.05 0.01 0.35 -0.07 0.04 0.51 0.38 -0.11 1.10 0.22 0.30 0.78 0.04 2.20 -0.07 0.04 4.90 Index - Russell MidCap Growth Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.25% [ Actual Return 19.40% ] - [ Buy Hold Return 19.65% ] 83 City of Clearwater Equity Sector Attribution Chart Artisan Partners Quarter Ending 9/10 % Allocation Energy 4.63 5.11 Materials 0.00 6.61 Industrials 16.40 15.87 Con. Discretionary 20.88 19.74 Consumer Staples 0.29 5.42 Health Care 15.05 14.45 Financials 6.48 6.94 Infomation Tech. 36.26 23.34 Telecom. Services 0.00 1.86 Utilities 0.00 0.66 Artisan PartnersRussell MidCap Growth % Return 19.43 11.51 16.38 22.56 15.90 19.66 18.83 19.20 9.44 12.16 6.63 13.53 13.04 22.56 17.43 18.34 8.40 % Variance 0.38 -0.11 1.10 0.22 0.30 0.78 0.04 2.20 -0.07 0.04 84 City of Clearwater Wedge Capital Management as of 9/30/10 Sonoco Prods Co Computer Sciences Co Simon Ppty Group Inc Dover Corp Duke Realty Corp. Allstate Corp Transdigm Group Inc Lincoln Natl Corp In Pinnacle West Cap Co Microchip Technology GICS Sector% Port Materials Information Technology Financials Industrials Financials Financials Industrials Financials Utilities Information Technology 4.38 4.25 4.11 3.90 3.90 3.84 3.62 3.45 3.37 3.31 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 1.98 9.92 21.32 9.79 5.42 3.15 25.86 12.31 0.00 10.25 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 Wedge Capital ManagementRussell MidCap Value Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 Wedge Capital Management Russell MidCap Value Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 8.63 12.14 33,268 0 2,872 36,140 8.84 11.16 33,206 0 2,934 36,140 16.94 16.94 30,905 0 5,235 36,140 -2.50 -4.78 31,278 0 4,862 36,140 -1.28 -3.72 30,365 0 5,775 36,140 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 85 City of Clearwater Wedge Capital Management as of 9/30/10 Cash & Equiv $1,539 4.26% Domestic Equity $34,601 95.74% Periods from 2/07 to 9/10 Alpha Beta R-Squared 0.56 0.96 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 w 1 T Annualized Standard Deviation% w Wedge Capital Management 1 Russell MidCap Value T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -1.28 -3.72 1.80 24.71 25.28 0.61 -0.12 -0.22 0.00 0.42 Asset Allocation ($000) Risk/Return Analysis 86 City of Clearwater Midcap Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low w Wedge Capital Management Net Ret Rank 1 Russell MidCap Value Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 14.30 11.85 10.16 8.83 6.55 8.63 87 12.14 21 20.71 16.72 13.73 11.44 7.76 16.94 20 16.94 20 20.90 7.19 4.81 2.71 -2.35 5.33 42 4.22 52 0.33 -1.96 -4.47 -5.57 -8.33 -2.50 28 -4.78 53 -10% -5% 0% 5% 10% 15% 20% 25% w 1 w1 w1 w 1 87 City of Clearwater Midcap Value Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low w Wedge Capital Management Net Ret Rank 1 Russell MidCap Value Net Ret Rank 9/30/10 YTD20092008 21.58 10.86 7.70 6.17 4.89 8.84 38 11.16 18 62.14 45.19 35.69 31.02 22.46 38.51 37 34.20 50 -26.18 -33.51 -35.07 -40.59 -51.14 -34.89 47 -38.45 68 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% w 1 w 1 w 1 88 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low w Wedge Capital Management Return Rank 1 Russell MidCap Value Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -2.50 24 -4.78 45 1.51 -5.62 -8.56 -10.35 -14.59 -6.09 28 -9.44 59 4.67 -0.46 -3.29 -5.11 -9.86 -2.95 47 -5.23 75 3.13 -1.83 -4.63 -6.49 -11.31 3.77 -1.61 -4.27 -6.19 -10.68 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% w 1 w 1 w 1 89 City of Clearwater Return vs Risk Total Returns of Midcap Value Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 18.4 20.8 23.2 25.6 28.0 30.4 32.8 35.2 37.6 40.0 -12.0 -10.5 -9.0 -7.5 -6.0 -4.5 -3.0 -1.5 0.0 1.5 3.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Wedge Capital Management 1 Russell MidCap Value Median -2.502829.3673 -4.785330.0180 -4.4728.07 90 City of Clearwater Equity Summary Statistics Wedge Capital Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell MidCap Value 37 34,601,263 6,112,583 3,378,415 2.37 20.69 14.46 1.03 1.64 43.23 1.10 544 6,801,535 3,401,462 2.14 22.67 15.33 1.18 1.31 55.44 -1.14 Ten Largest Holdings Sonoco Prods Co Computer Sciences Co Simon Ppty Group Inc Dover Corp Duke Realty Corp. Allstate Corp Transdigm Group Inc Lincoln Natl Corp In Pinnacle West Cap Co Microchip Technology Market Value% of PortfolioQuarterly Ret 1,514,832 1,469,286 1,420,128 1,347,018 1,346,433 1,328,255 1,251,859 1,191,455 1,163,814 1,144,780 4.38 4.25 4.11 3.90 3.90 3.84 3.62 3.45 3.37 3.31 10.66 2.02 15.62 25.69 3.67 10.60 21.60 -1.48 15.06 14.71 Ten Best Performers United Rentals Inc Borg-Warner Automoti Teradata Corp Del Dover Corp Transdigm Group Inc Aptargroup Inc Bemis Inc Family Dlr Stores In Questar Corp Simon Ppty Group Inc Quarterly Ret 59.23 40.92 26.51 25.69 21.60 21.26 18.53 17.59 17.56 15.62 Ten Worst Performers Beckman Coulter Inc Carlisle Corp Comtech Telecommunic Bank Hawaii Corp Werner Enterprises I Sara Lee Corp Qep Res Inc Lincoln Natl Corp In Computer Sciences Co Energen Corp Quarterly Ret -18.76 -16.64 -8.62 -6.17 -5.96 -4.03 -2.18 -1.48 2.02 3.44 91 City of Clearwater Equity Contribution to Return Wedge Capital Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell MidCap Value 37 34,601,263 6,112,583 3,378,415 2.37 20.69 14.46 1.03 1.64 43.23 1.10 544 6,801,535 3,401,462 2.14 22.67 15.33 1.18 1.31 55.44 -1.14 Ten Best Contributors United Rentals Inc Borg-Warner Automoti Dover Corp Transdigm Group Inc Simon Ppty Group Inc Bemis Inc Pinnacle West Cap Co Microchip Technology Aptargroup Inc V F Corp Market Value% of PortfolioQuarterly Ret 814,404 957,684 1,347,018 1,251,859 1,420,128 1,139,825 1,163,814 1,144,780 771,823 1,109,974 2.36 2.77 3.90 3.62 4.11 3.30 3.37 3.31 2.23 3.21 59.23 40.92 25.69 21.60 15.62 18.53 15.06 14.71 21.26 14.73 Ten Worst Contributors Beckman Coulter Inc Carlisle Corp Bank Hawaii Corp Werner Enterprises I Comtech Telecommunic Sara Lee Corp Lincoln Natl Corp In Qep Res Inc Phh Corp Energen Corp Market Value% of PortfolioQuarterly Ret 1,089,139 1,099,165 965,780 922,050 516,915 1,066,342 1,191,455 684,178 138,343 612,648 3.15 3.18 2.80 2.67 1.50 3.09 3.45 1.98 0.40 1.77 -18.76 -16.64 -6.17 -5.96 -8.62 -4.03 -1.48 -2.18 10.61 3.44 92 City of Clearwater Equity Sector Attribution Analysis Wedge Capital Management Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 0.00 9.51 21.40 8.98 5.59 3.42 26.80 12.93 0.00 11.38 100.00 10.12 5.42 11.05 9.91 7.31 5.36 29.65 6.28 1.85 13.04 100.00 15.48 13.01 20.54 2.68 -18.76 5.80 8.36 12.59 9.68 14.76 13.97 12.61 17.87 8.98 9.31 10.17 10.14 17.81 12.59 12.20 0.00 0.14 0.08 0.24 -0.35 -0.96 -1.17 -0.23 0.00 -0.00 -2.24 -0.26 0.07 0.04 -0.05 0.06 0.06 0.06 -0.14 -0.10 -0.01 -0.28 -0.26 0.22 0.13 0.19 -0.30 -0.90 -1.11 -0.37 -0.10 -0.01 -2.52 Index - Russell MidCap Value Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.58% [ Actual Return 9.10% ] - [ Buy Hold Return 9.68% ] 93 City of Clearwater Equity Sector Attribution Chart Wedge Capital Management Quarter Ending 9/10 % Allocation Energy 0.00 10.12 Materials 9.51 5.42 Industrials 21.40 11.05 Con. Discretionary 8.98 9.91 Consumer Staples 5.59 7.31 Health Care 3.42 5.36 Financials 26.80 29.65 Infomation Tech. 12.93 6.28 Telecom. Services 0.00 1.85 Utilities 11.38 13.04 Wedge Capital ManagementRussell MidCap Value % Return 14.76 15.48 13.97 13.01 12.61 20.54 17.87 2.68 8.98 -18.76 9.31 5.80 10.17 8.36 10.14 17.81 12.59 12.59 % Variance -0.26 0.22 0.13 0.19 -0.30 -0.90 -1.11 -0.37 -0.10 -0.01 94 City of Clearwater Small Cap Equity Composite as of 9/30/10 Cepheid Inc National Instrs Corp Lkq Corp Chemed Corp New Rollins Inc Gentex Corp United Nat Foods Inc Ultimate Software Gr Ansys Inc Semtech Corp GICS Sector% Port Health Care Information Technology Consumer Discretionary Health Care Industrials Consumer Discretionary Consumer Staples Information Technology Information Technology Information Technology 2.11 2.01 2.01 1.82 1.75 1.56 1.55 1.53 1.49 1.40 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 2.87 4.44 17.52 12.97 3.94 16.51 14.57 26.53 0.17 0.48 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Small Cap Equity ComposiRussell 2000 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Small Cap Equity Composite Russell 2000 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.36 11.29 69,246 -39,000 6,288 36,534 10.93 9.11 70,138 -39,000 5,396 36,534 16.11 13.34 67,008 -39,000 8,527 36,534 -4.88 -4.29 81,011 -39,000 -5,477 36,534 2.33 1.60 55,638 -39,000 19,896 36,534 5.81 5.78 29,988 -39,000 45,546 36,534 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 95 City of Clearwater Small Cap Equity Composite as of 9/30/10 Cash & Equiv $928 2.54% Domestic Equity $35,606 97.46% Periods from 8/03 to 9/10 Alpha Beta R-Squared 0.13 0.91 0.94 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 S1 T Annualized Standard Deviation% S Small Cap Equity Composi 1 Russell 2000 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.81 5.78 2.38 20.21 20.80 0.56 0.17 0.16 0.00 -0.03 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 96 City of Clearwater Small Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low S Small Cap Equity Composite Net Ret Rank 1 Russell 2000 Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years 14.81 12.15 11.04 9.68 7.28 12.36 23 11.29 41 20.14 16.46 14.44 12.89 9.46 16.11 29 13.34 70 11.48 7.13 3.74 1.16 -2.77 4.94 41 1.26 74 2.44 -0.16 -3.25 -4.56 -7.49 -4.88 78 -4.29 72 5.85 2.73 1.48 0.02 -2.24 -0.01 75 -0.38 81 7.05 4.29 3.41 2.15 0.26 2.33 71 1.60 85 8.46 6.89 6.16 5.15 3.38 4.88 79 4.16 89 10.99 8.95 8.09 7.07 5.47 6.40 83 6.13 89 -10% -5% 0% 5% 10% 15% 20% 25% S1 S 1 S 1 S1 S1 S1 S 1 S1 97 City of Clearwater Small Neutral Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low S Small Cap Equity Composite Net Ret Rank 1 Russell 2000 Net Ret Rank 9/30/10 YTD200920082007200620052004 15.27 11.28 9.38 8.07 4.89 10.93 27 9.11 56 51.45 36.84 29.54 25.57 12.37 33.51 40 27.19 64 -23.82 -29.55 -33.76 -38.06 -45.46 -38.63 77 -33.80 51 10.80 3.36 0.07 -3.38 -9.49 3.27 25 -1.55 59 25.22 19.57 17.58 15.31 12.19 17.40 51 18.35 41 15.04 10.53 8.22 5.25 2.16 7.21 61 4.56 82 27.47 23.56 20.67 18.36 14.08 15.69 90 18.32 75 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% S 1 S 1 S 1 S 1 S 1 S 1 S 1 98 City of Clearwater Return vs Risk Total Returns of Small Neutral Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 18.2 20.4 22.6 24.8 27.0 29.2 31.4 33.6 35.8 38.0 -12.0 -10.2 -8.4 -6.5 -4.7 -2.9 -1.1 0.6 2.4 4.2 6.0 S 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank S Small Cap Equity Composite 1 Russell 2000 Median -4.887826.7639 -4.297227.9355 -3.2527.72 99 City of Clearwater Return vs Risk Total Returns of Small Neutral Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 15.0 16.5 18.0 19.5 21.0 22.5 24.0 25.5 27.0 28.5 30.0 -1.0 -0.1 0.7 1.7 2.6 3.5 4.4 5.3 6.2 7.1 8.0 S 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank S Small Cap Equity Composite 1 Russell 2000 Median 2.337121.4233 1.608522.7457 3.4122.36 100 City of Clearwater LMCG Small Cap Selected Growth as of 9/30/10 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 LMCG Small Cap Selected Russell 2000 Growth Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 LMCG Small Cap Selected Growth Russell 2000 Growth Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.17 12.82 36,729 -39,794 3,071 5 10.03 10.22 37,443 -39,794 2,356 5 15.44 14.78 35,687 -39,794 4,113 5 -8.71 -3.74 43,309 -39,794 -3,509 5 -5.49 -1.12 30,094 -39,794 9,705 5 Portfolio Performance (%) 101 City of Clearwater LMCG Small Cap Selected Growth as of 9/30/10 Domestic Equity $0 5.17% Cash & Equiv $5 94.83% Periods from 2/07 to 9/10 Alpha Beta R-Squared -1.06 1.01 0.95 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.028.030.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 l 1 T Annualized Standard Deviation% l LMCG Small Cap Selected 1 Russell 2000 Growth T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -5.49 -1.12 1.80 27.38 25.92 0.61 -0.27 -0.11 0.00 -0.73 Asset Allocation ($000) Risk/Return Analysis 102 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low l LMCG Small Cap Selected Growth Return Rank 1 Russell 2000 Growth Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -8.71 89 -3.74 35 1.51 -5.62 -8.56 -10.35 -14.59 -11.91 86 -7.53 40 4.67 -0.46 -3.29 -5.11 -9.86 -7.49 89 -2.42 41 3.13 -1.83 -4.63 -6.49 -11.31 3.77 -1.61 -4.27 -6.19 -10.68 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% l 1 l 1 l 1 103 City of Clearwater Return vs Risk Total Returns of Small Growth Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 18.0 20.0 22.0 24.0 26.0 28.0 30.0 32.0 34.0 36.0 38.0 -12.0 -10.2 -8.4 -6.5 -4.7 -2.9 -1.1 0.6 2.4 4.2 6.0 l 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank l LMCG Small Cap Selected Growth 1 Russell 2000 Growth Median -8.719229.4274 -3.745628.3561 -3.2627.83 104 City of Clearwater Equity Sector Attribution Analysis LMCG Small Cap Selected Growth Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 5.25 1.05 15.97 16.49 5.48 22.68 4.74 26.68 1.67 0.00 100.00 3.94 4.40 17.27 17.75 3.26 21.37 5.13 25.52 1.27 0.08 100.00 20.97 18.72 11.25 10.65 7.34 6.35 7.67 19.90 14.25 10.04 12.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.11 -0.20 0.02 0.03 -0.12 -0.08 0.02 0.08 0.01 0.00 -0.14 0.11 -0.20 0.02 0.03 -0.12 -0.08 0.02 0.08 0.01 0.00 -0.14 Index - Russell 2000 Growth Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect 12.54% [ Actual Return 12.54% ] - [ Buy Hold Return 0.00% ] 105 City of Clearwater Equity Sector Attribution Chart LMCG Small Cap Selected Growth Quarter Ending 9/10 % Allocation Energy 5.25 3.94 Materials 1.05 4.40 Industrials 15.97 17.27 Con. Discretionary 16.49 17.75 Consumer Staples 5.48 3.26 Health Care 22.68 21.37 Financials 4.74 5.13 Infomation Tech. 26.68 25.52 Telecom. Services 1.67 1.27 Utilities 0.00 0.08 LMCG Small Cap Selected GrowthRussell 2000 Growth % Return 20.97 18.72 11.25 10.65 7.34 6.35 7.67 19.90 14.25 10.04 % Variance 0.11 -0.20 0.02 0.03 -0.12 -0.08 0.02 0.08 0.01 0.00 106 City of Clearwater Equity Summary Statistics Riverbridge Partners Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Growth 54 16,521,303 1,533,459 765,283 0.42 35.00 23.20 1.04 2.93 11.74 4.80 1,277 1,151,444 466,695 0.53 41.51 14.92 1.29 2.88 15.73 4.19 Ten Largest Holdings Cepheid Inc Chemed Corp New Rollins Inc National Instrs Corp Gentex Corp Ultimate Software Gr Semtech Corp Neogen Corp Lkq Corp United Nat Foods Inc Market Value% of PortfolioQuarterly Ret 749,803 646,610 623,662 589,513 555,547 542,892 499,703 478,978 464,360 463,960 4.54 3.91 3.77 3.57 3.36 3.29 3.02 2.90 2.81 2.81 16.79 4.55 13.47 3.18 9.18 17.59 23.34 29.94 7.88 10.91 Ten Best Performers F5 Networks Inc Telvent Git Sa Neogen Corp Verint Sys Inc Costar Group Inc Dynamex Inc Semtech Corp Cheesecake Factory I Ultimate Software Gr Cepheid Inc Quarterly Ret 51.39 35.45 29.94 28.03 25.54 25.00 23.34 18.91 17.59 16.79 Ten Worst Performers Beacon Roofing Suppl Universal Technical Cabot Microelectroni Grand Canyon Ed Inc Bio-Reference Labs I Mobile Mini Medtox Scientific In Capella Education Co Forward Air Corp Mednax Inc Quarterly Ret -19.15 -11.73 -6.97 -6.40 -5.91 -5.77 -5.45 -4.59 -4.32 -4.15 107 City of Clearwater Equity Contribution to Return Riverbridge Partners Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Growth 54 16,521,303 1,533,459 765,283 0.42 35.00 23.20 1.04 2.93 11.74 4.80 1,277 1,151,444 466,695 0.53 41.51 14.92 1.29 2.88 15.73 4.19 Ten Best Contributors F5 Networks Inc Neogen Corp Cepheid Inc Semtech Corp Verint Sys Inc Ultimate Software Gr Rollins Inc Cheesecake Factory I Telvent Git Sa Costar Group Inc Market Value% of PortfolioQuarterly Ret 420,431 478,978 749,803 499,703 349,429 542,892 623,662 424,182 173,609 230,155 2.54 2.90 4.54 3.02 2.12 3.29 3.77 2.57 1.05 1.39 51.39 29.94 16.79 23.34 28.03 17.59 13.47 18.91 35.45 25.54 Ten Worst Contributors Beacon Roofing Suppl Mednax Inc Cabot Microelectroni Universal Technical Bio-Reference Labs I Portfolio Recovery A Grand Canyon Ed Inc Forward Air Corp Mobile Mini Innerworkings Inc Market Value% of PortfolioQuarterly Ret 302,328 447,720 217,215 128,541 253,449 454,166 152,962 201,500 146,881 203,013 1.83 2.71 1.31 0.78 1.53 2.75 0.93 1.22 0.89 1.23 -19.15 -4.15 -6.97 -11.73 -5.91 -3.19 -6.40 -4.32 -5.77 -3.81 108 City of Clearwater Atlanta Capital Management as of 9/30/10 Affiliated Managers Morningstar Inc Dril-Quip Inc Kirby Expl Co. Blackbaud Inc Forest City Enterpri Bio Rad Labs Inc Aptargroup Inc Alberto Culver Co Ne Lkq Corp GICS Sector% Port Financials Consumer Discretionary Energy Industrials Information Technology Financials Health Care Materials Industrials Consumer Discretionary 3.78 3.77 3.16 3.15 3.13 2.94 2.83 2.79 2.76 2.60 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 3.16 3.98 24.00 18.06 4.48 9.26 18.23 18.83 0.00 0.00 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Atlanta Capital ManagemeRussell 2000 Value Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Atlanta Capital Management Russell 2000 Value Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.56 9.72 18,436 -10,000 1,602 10,038 11.38 7.93 18,632 -10,000 1,407 10,038 16.40 11.85 17,827 -10,000 2,212 10,038 3.44 -4.99 18,746 -10,000 1,293 10,038 7.04 0.74 28,633 -10,000 -8,595 10,038 9.58 6.06 14,990 -10,000 5,049 10,038 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 109 City of Clearwater Atlanta Capital Management as of 9/30/10 Cash & Equiv $336 3.35% Domestic Equity $9,702 96.65% Periods from 8/03 to 9/10 Alpha Beta R-Squared 1.11 0.69 0.91 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 t 1 T Annualized Standard Deviation% t Atlanta Capital Manageme 1 Russell 2000 Value T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 9.58 6.06 2.38 18.00 20.95 0.56 0.40 0.18 0.00 0.28 Asset Allocation ($000) Risk/Return Analysis 110 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low t Atlanta Capital Management Net Ret Rank 1 Russell 2000 Value Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years 13.84 12.44 10.68 9.76 6.69 12.56 15 9.72 76 24.61 16.93 13.87 11.72 6.57 16.40 30 11.85 70 10.74 4.94 2.45 0.60 -2.36 8.54 10 -1.14 86 1.98 -0.51 -4.15 -5.00 -6.81 3.44 1 -4.99 73 5.06 2.80 0.62 -1.31 -3.62 6.63 1 -2.33 89 6.96 4.67 2.36 0.86 -1.03 7.04 1 0.74 75 9.36 7.08 5.18 3.84 2.66 8.94 9 3.39 85 11.95 10.10 9.28 7.59 6.51 10.23 23 6.31 99 -10% -5% 0% 5% 10% 15% 20% 25% 30% t 1 t 1 t 1 t 1 t 1 t 1 t 1 t 1 111 City of Clearwater Small Value Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low t Atlanta Capital Management Net Ret Rank 1 Russell 2000 Value Net Ret Rank 9/30/10 YTD200920082007200620052004 15.95 11.74 9.54 7.30 4.83 11.38 30 7.93 67 53.30 35.52 29.85 25.32 16.35 26.83 56 20.57 91 -25.08 -29.56 -31.81 -33.65 -42.47 -19.52 2 -28.92 18 5.89 -2.00 -5.35 -10.09 -12.10 6.91 3 -9.77 69 23.65 21.70 20.93 18.33 8.55 16.22 85 23.48 7 13.63 10.86 7.91 5.70 2.60 6.23 69 4.70 85 26.31 24.56 21.39 19.83 17.51 20.24 67 22.25 39 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% t1 t 1 t 1 t 1 t 1 t 1 t 1 112 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low t Atlanta Capital Management Return Rank 1 Russell 2000 Value Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 3.44 3 -4.99 46 1.51 -5.62 -8.56 -10.35 -14.59 0.55 5 -9.85 70 4.67 -0.46 -3.29 -5.11 -9.86 4.59 5 -5.71 79 3.13 -1.83 -4.63 -6.49 -11.31 2.96 5 -8.22 85 3.77 -1.61 -4.27 -6.19 -10.68 3.55 5 -6.65 78 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% t 1 t 1 t 1 t 1 t 1 113 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 18.6 21.2 23.8 26.4 29.0 31.6 34.2 36.8 39.4 42.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 t 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank t Atlanta Capital Management 1 Russell 2000 Value Median 3.44121.491 -4.997328.8949 -4.1529.02 114 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0 32.0 34.0 -5.0 -3.5 -2.0 -0.5 1.0 2.5 4.0 5.5 7.0 8.5 10.0 t 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank t Atlanta Capital Management 1 Russell 2000 Value Median 7.04117.151 0.747523.4340 2.3623.78 115 City of Clearwater Equity Summary Statistics Atlanta Capital Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Value 63 9,702,097 1,884,477 1,531,542 0.99 23.38 20.67 1.11 2.40 18.93 4.86 1,298 980,354 403,722 1.95 28.57 13.10 1.23 1.11 38.14 -2.21 Ten Largest Holdings Affiliated Managers Morningstar Inc Dril-Quip Inc Kirby Expl Co. Blackbaud Inc Forest City Enterpri Bio Rad Labs Inc Aptargroup Inc Alberto Culver Co Ne Lkq Corp Market Value% of PortfolioQuarterly Ret 366,647 364,946 306,202 305,658 303,144 284,441 274,245 270,366 267,692 251,680 3.78 3.77 3.16 3.15 3.13 2.94 2.83 2.79 2.76 2.60 28.37 4.80 41.09 4.73 11.00 13.34 4.65 21.26 39.38 7.88 Ten Best Performers Dril-Quip Inc Alberto Culver Co Ne Daktronics Inc Sally Beauty Hldgs I Jones Lang Lasalle I Meridian Bioscience Affiliated Managers Columbia Sportswear Balchem Corp Ulta Salon Cosmetcs Quarterly Ret 41.09 39.38 37.86 36.59 31.43 29.94 28.37 25.66 23.44 23.42 Ten Worst Performers Pinnacle Finl Partne Carlisle Corp Peets Coffee & Tea I Pool Corporation International Speedw Forward Air Corp Knight Transn Inc Power Integrations I Umpqua Hldgs Corp Diamond Foods Inc Quarterly Ret -28.48 -16.64 -12.83 -7.86 -5.28 -4.32 -4.20 -1.09 -0.78 -0.17 116 City of Clearwater Equity Contribution to Return Atlanta Capital Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Value 63 9,702,097 1,884,477 1,531,542 0.99 23.38 20.67 1.11 2.40 18.93 4.86 1,298 980,354 403,722 1.95 28.57 13.10 1.23 1.11 38.14 -2.21 Ten Best Contributors Dril-Quip Inc Alberto Culver Co Ne Affiliated Managers Jones Lang Lasalle I Aptargroup Inc Forest City Enterpri Sally Beauty Hldgs I Factset Resh Sys Inc Daktronics Inc Acuity Brands Inc Market Value% of PortfolioQuarterly Ret 306,202 267,692 366,647 250,183 270,366 284,441 103,040 162,260 90,344 154,840 3.16 2.76 3.78 2.58 2.79 2.94 1.06 1.67 0.93 1.60 41.09 39.38 28.37 31.43 21.26 13.34 36.59 21.48 37.86 21.99 Ten Worst Contributors Pinnacle Finl Partne Carlisle Corp Peets Coffee & Tea I Forward Air Corp Knight Transn Inc Pool Corporation International Speedw Power Integrations I Umpqua Hldgs Corp Diamond Foods Inc Market Value% of PortfolioQuarterly Ret 95,576 119,800 94,475 187,980 143,042 74,259 98,088 133,518 116,802 114,772 0.99 1.24 0.97 1.94 1.48 0.77 1.01 1.38 1.21 1.18 -28.48 -16.64 -12.83 -4.32 -4.20 -7.86 -5.28 -1.09 -0.78 -0.17 117 City of Clearwater Equity Sector Attribution Analysis Atlanta Capital Management Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 2.78 4.06 23.56 18.66 3.74 8.77 18.23 20.19 0.00 0.00 100.00 6.81 5.15 14.26 9.48 3.29 5.78 38.74 9.39 0.64 6.47 100.00 41.09 21.88 8.68 7.79 15.49 5.45 12.83 11.24 11.20 11.40 20.64 9.50 14.20 10.65 11.75 5.82 12.23 10.53 11.42 9.78 0.83 0.05 -0.19 -1.20 0.18 -0.55 1.28 -0.20 0.00 0.00 0.19 -0.07 -0.12 -0.03 0.41 0.00 0.06 0.81 0.27 -0.00 -0.11 1.23 0.76 -0.07 -0.22 -0.79 0.19 -0.49 2.09 0.06 -0.00 -0.11 1.42 Index - Russell 2000 Value Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect 1.86% [ Actual Return 13.06% ] - [ Buy Hold Return 11.20% ] 118 City of Clearwater Equity Sector Attribution Chart Atlanta Capital Management Quarter Ending 9/10 % Allocation Energy 2.78 6.81 Materials 4.06 5.15 Industrials 23.56 14.26 Con. Discretionary 18.66 9.48 Consumer Staples 3.74 3.29 Health Care 8.77 5.78 Financials 18.23 38.74 Infomation Tech. 20.19 9.39 Telecom. Services 0.00 0.64 Utilities 0.00 6.47 Atlanta Capital ManagementRussell 2000 Value % Return 41.09 11.40 21.88 20.64 8.68 9.50 7.79 14.20 15.49 10.65 5.45 11.75 12.83 5.82 11.24 12.23 10.53 11.42 % Variance 0.76 -0.07 -0.22 -0.79 0.19 -0.49 2.09 0.06 -0.00 -0.11 119 City of Clearwater Systematic Financial Management as of 9/30/10 Dupont Fabros Techno Fpic Ins Group Inc Polyone Corp Cbl & Assoc Pptys In Webster Finl Corp Co Nu Skin Enterprises Health Mgmt Assoc In Amtech Sys Inc Complete Production Carrizo Oil & Co Inc GICS Sector% Port Financials Financials Materials Financials Financials Consumer Staples Health Care Information Technology Energy Energy 3.38 2.60 2.45 2.23 2.21 1.97 1.91 1.82 1.72 1.69 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 7.61 9.77 13.39 10.59 4.13 5.96 31.62 14.46 0.65 1.81 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Systematic Financial ManRussell 2000 Value Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Systematic Financial Management Russell 2000 Value Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 13.98 9.72 14,081 -6,000 1,533 9,614 14.12 7.93 14,063 -6,000 1,551 9,614 18.95 11.85 13,494 -6,000 2,120 9,614 -5.41 -4.99 18,964 -6,000 -3,350 9,614 2.69 0.74 27,009 -6,000 -11,394 9,614 5.73 6.06 15,001 -6,000 613 9,614 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 120 City of Clearwater Systematic Financial Management as of 9/30/10 Cash & Equiv $232 2.41% Domestic Equity $9,382 97.59% Periods from 8/03 to 9/10 Alpha Beta R-Squared 0.12 0.97 0.81 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 s 1 T Annualized Standard Deviation% s Systematic Financial Man 1 Russell 2000 Value T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.73 6.06 2.38 21.93 20.95 0.56 0.15 0.18 0.00 -0.02 Asset Allocation ($000) Risk/Return Analysis 121 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low s Systematic Financial Management Net Ret Rank 1 Russell 2000 Value Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years 13.84 12.44 10.68 9.76 6.69 13.98 3 9.72 76 24.61 16.93 13.87 11.72 6.57 18.95 6 11.85 70 10.74 4.94 2.45 0.60 -2.36 7.68 11 -1.14 86 1.98 -0.51 -4.15 -5.00 -6.81 -5.41 86 -4.99 73 5.06 2.80 0.62 -1.31 -3.62 -0.40 57 -2.33 89 6.96 4.67 2.36 0.86 -1.03 2.69 47 0.74 75 9.36 7.08 5.18 3.84 2.66 5.15 50 3.39 85 11.95 10.10 9.28 7.59 6.51 6.32 99 6.31 99 -10% -5% 0% 5% 10% 15% 20% 25% 30% s 1 s 1 s 1 s1 s 1 s 1 s 1 s1 122 City of Clearwater Small Value Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low s Systematic Financial Management Net Ret Rank 1 Russell 2000 Value Net Ret Rank 9/30/10 YTD200920082007200620052004 15.95 11.74 9.54 7.30 4.83 14.12 10 7.93 67 53.30 35.52 29.85 25.32 16.35 35.72 21 20.57 91 -25.08 -29.56 -31.81 -33.65 -42.47 -40.71 93 -28.92 18 5.89 -2.00 -5.35 -10.09 -12.10 0.49 12 -9.77 69 23.65 21.70 20.93 18.33 8.55 18.61 66 23.48 7 13.63 10.86 7.91 5.70 2.60 8.27 47 4.70 85 26.31 24.56 21.39 19.83 17.51 11.42 100 22.25 39 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% s 1 s 1 s 1 s 1 s 1 s1 s 1 123 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low s Systematic Financial Management Return Rank 1 Russell 2000 Value Return Rank 9/10 6/10 3/10 12/09 9/09 2.76 -2.53 -5.33 -7.13 -9.87 -5.41 51 -4.99 46 1.51 -5.62 -8.56 -10.35 -14.59 -10.45 76 -9.85 70 4.67 -0.46 -3.29 -5.11 -9.86 -4.70 71 -5.71 79 3.13 -1.83 -4.63 -6.49 -11.31 -6.83 77 -8.22 85 3.77 -1.61 -4.27 -6.19 -10.68 -6.13 74 -6.65 78 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% s 1 s 1 s 1 s 1 s 1 124 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 18.6 21.2 23.8 26.4 29.0 31.6 34.2 36.8 39.4 42.0 -9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 s 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank s Systematic Financial Management 1 Russell 2000 Value Median -5.418631.2875 -4.997328.8949 -4.1529.02 125 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0 32.0 34.0 -2.0 -1.1 -0.2 0.6 1.5 2.5 3.4 4.3 5.2 6.1 7.0 s 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank s Systematic Financial Management 1 Russell 2000 Value Median 2.694725.1165 0.747523.4340 2.3623.78 126 City of Clearwater Equity Summary Statistics Systematic Financial Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Value 106 9,382,474 1,415,106 1,201,751 0.86 23.59 14.49 1.65 1.43 39.41 -2.25 1,298 980,354 403,722 1.95 28.57 13.10 1.23 1.11 38.14 -2.21 Ten Largest Holdings Dupont Fabros Techno Fpic Ins Group Inc Polyone Corp Cbl & Assoc Pptys In Webster Finl Corp Co Nu Skin Enterprises Health Mgmt Assoc In Amtech Sys Inc Complete Production Carrizo Oil & Co Inc Market Value% of PortfolioQuarterly Ret 316,890 243,876 229,710 208,960 207,208 184,320 179,244 170,620 161,555 158,004 3.38 2.60 2.45 2.23 2.21 1.97 1.91 1.82 1.72 1.69 2.90 36.80 43.59 6.61 -2.07 16.06 -1.42 115.09 43.01 54.15 Ten Best Performers Amtech Sys Inc Mips Technologies In Ferro Corp Atmel Corp Verifone Hldgs Inc Carrizo Oil & Co Inc Universal Stainless Entropic Communicati Buckeye Technologies Timken Co Quarterly Ret 115.09 90.41 74.90 65.83 64.13 54.15 53.60 51.42 48.34 48.15 Ten Worst Performers FSI Int Inc Mattson Technology I Select Comfort Corp Pacer Intl Inc Tenn Oshkosh Truck Corp First Merchants Corp Omnova Solutions Inc Felcor Lodging Tr In First Niagara Finl G Lionbridge Technolog Quarterly Ret -36.52 -27.44 -22.51 -13.59 -11.75 -9.91 -7.94 -7.82 -6.03 -5.91 127 City of Clearwater Equity Contribution to Return Systematic Financial Management Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth PortfolioRussell 2000 Value 106 9,382,474 1,415,106 1,201,751 0.86 23.59 14.49 1.65 1.43 39.41 -2.25 1,298 980,354 403,722 1.95 28.57 13.10 1.23 1.11 38.14 -2.21 Ten Best Contributors Amtech Sys Inc Polyone Corp Fpic Ins Group Inc Carrizo Oil & Co Inc Mips Technologies In Tibco Software Inc Complete Production Timken Co Verifone Hldgs Inc Entropic Communicati Market Value% of PortfolioQuarterly Ret 170,620 229,710 243,876 158,004 82,705 156,112 161,555 138,096 80,782 99,840 1.82 2.45 2.60 1.69 0.88 1.67 1.72 1.47 0.86 1.06 115.09 43.59 36.80 54.15 90.41 47.10 43.01 48.15 64.13 51.42 Ten Worst Contributors Select Comfort Corp Pacer Intl Inc Tenn Mattson Technology I FSI Int Inc Omnova Solutions Inc Oshkosh Truck Corp First Niagara Finl G First Merchants Corp Webster Finl Corp Co Felcor Lodging Tr In Market Value% of PortfolioQuarterly Ret 84,750 111,136 43,725 31,122 112,164 74,250 138,635 48,069 207,208 36,800 0.90 1.19 0.47 0.33 1.20 0.79 1.48 0.51 2.21 0.39 -22.51 -13.59 -27.44 -36.52 -7.94 -11.75 -6.03 -9.91 -2.07 -7.82 128 City of Clearwater Equity Sector Attribution Analysis Systematic Financial Management Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 7.34 8.22 13.82 13.09 3.54 4.48 32.17 15.77 0.00 1.57 100.00 6.81 5.15 14.26 9.48 3.29 5.78 38.74 9.39 0.64 6.47 100.00 28.64 21.29 11.46 12.96 3.60 2.06 7.84 21.05 6.11 13.29 11.40 20.64 9.50 14.20 10.65 11.75 5.82 12.23 10.53 11.42 9.78 1.26 0.05 0.27 -0.16 -0.25 -0.43 0.65 1.39 0.00 -0.08 2.70 0.01 0.33 0.00 0.16 0.00 -0.03 0.26 0.16 -0.00 -0.08 0.81 1.27 0.39 0.27 -0.00 -0.25 -0.46 0.91 1.55 -0.00 -0.16 3.52 Index - Russell 2000 Value Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect 2.62% [ Actual Return 15.91% ] - [ Buy Hold Return 13.29% ] 129 City of Clearwater Equity Sector Attribution Chart Systematic Financial Management Quarter Ending 9/10 % Allocation Energy 7.34 6.81 Materials 8.22 5.15 Industrials 13.82 14.26 Con. Discretionary 13.09 9.48 Consumer Staples 3.54 3.29 Health Care 4.48 5.78 Financials 32.17 38.74 Infomation Tech. 15.77 9.39 Telecom. Services 0.00 0.64 Utilities 1.57 6.47 Systematic Financial ManagementRussell 2000 Value % Return 28.64 11.40 21.29 20.64 11.46 9.50 12.96 14.20 3.60 10.65 2.06 11.75 7.84 5.82 21.05 12.23 10.53 6.11 11.42 % Variance 1.27 0.39 0.27 -0.00 -0.25 -0.46 0.91 1.55 -0.00 -0.16 130 City of Clearwater International Equity Composite as of 9/30/10 Bhp Billiton Ltd Rio Tinto Plc Potash Corp Sask Inc Core Laboratories N Transocean Ltd Zug Arm Hldgs Plc Noble Corporation Ba Weichai Power Co Novartis A G Nestle S A GICS Sector% Port Materials Materials Materials Energy Energy Information Technology Energy Industrials Health Care Consumer Staples 4.39 3.04 3.02 2.78 2.55 2.50 2.48 2.46 2.24 2.16 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 20.73 20.67 14.61 1.86 7.98 7.58 20.37 3.14 2.69 0.37 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 5/31/01 International Equity ComMSCI EAFE Index Gros Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 5/31/01 International Equity Composite MSCI EAFE Index Gross Dividend Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 18.42 16.53 93,559 -2 17,235 110,792 8.51 1.46 102,105 -162 8,850 110,792 15.75 3.71 95,509 -162 15,445 110,792 -4.47 -9.06 111,770 -162 -816 110,792 5.50 2.44 52,640 -162 58,314 110,792 6.07 4.78 20,000 -162 90,954 110,792 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 131 City of Clearwater International Equity Composite as of 9/30/10 Cash & Equiv $4,000 3.61% Intl Equity $79,935 72.15% Domestic Equity $26,857 24.24% Periods from 5/01 to 9/10 Alpha Beta R-Squared 0.32 1.02 0.95 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 I 1 T Annualized Standard Deviation% I International Equity Com 1 MSCI EAFE Index Gross Di T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 6.07 4.78 2.30 19.16 18.54 0.51 0.20 0.13 0.00 0.25 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 132 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low I International Equity Composite Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years 20.79 18.04 16.84 14.90 8.24 18.42 16 16.53 56 24.39 11.07 7.35 3.51 -0.97 15.75 15 3.71 72 21.45 8.66 5.82 2.43 -2.01 12.30 17 3.75 63 2.27 -4.33 -6.66 -9.25 -13.51 -4.47 26 -9.06 72 12.74 3.42 0.52 -1.76 -4.42 2.17 38 -1.45 69 13.07 6.74 4.02 2.35 0.44 5.50 38 2.44 71 19.63 10.13 7.83 5.98 4.00 8.64 43 6.08 73 19.61 12.12 9.81 8.36 6.28 9.94 49 8.29 76 23.31 14.39 12.27 10.61 8.80 11.39 63 10.42 78 20.67 11.71 9.27 7.71 6.11 8.45 63 7.22 83 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% I 1 I 1 I 1 I 1 I 1 I 1 I 1 I 1 I1 I1 133 City of Clearwater Calendar Year Performance Comparison Total Returns of International Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low I International Equity Composite Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank 9/30/10 YTD20092008200720062005200420032002 16.64 8.01 3.75 1.36 -2.04 8.51 22 1.46 73 76.47 43.32 36.13 26.05 13.31 57.93 11 32.46 59 -24.15 -40.12 -43.32 -47.37 -58.04 -47.94 78 -43.06 47 39.11 17.81 11.71 7.64 0.74 11.02 57 11.63 50 35.20 29.52 26.15 22.37 12.45 27.62 37 26.85 41 36.29 20.62 15.01 11.45 6.44 13.15 63 14.01 55 30.78 23.57 19.98 17.16 10.21 17.66 72 20.69 40 57.98 43.11 37.25 32.12 24.09 31.06 80 39.16 40 4.18 -9.36 -14.12 -16.98 -22.59 -13.03 40 -15.66 63 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% I 1 I 1 I 1 I1 I1 I1 I1 I 1 I1 134 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 16.0 19.0 22.0 25.0 28.0 31.0 34.0 37.0 40.0 43.0 46.0 -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 I 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank I International Equity Composite 1 MSCI EAFE Index Gross Dividend Median -4.472634.2076 -9.067230.6950 -6.6630.78 135 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 14.0 16.2 18.4 20.6 22.8 25.0 27.2 29.4 31.6 33.8 36.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 I 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank I International Equity Composite 1 MSCI EAFE Index Gross Dividend Median 5.503826.8678 2.447124.5954 4.0224.50 136 City of Clearwater Earnest Partners as of 9/30/10 Arm Hldgs Plc Weichai Power Co United Industrial Co Bancolombia S A Core Laboratories N Dnb Nor Asa Rio Tinto Plc Itau Unibanco Banco Orient Overseas Int Is MSCI Eafe GICS Sector% Port Information Technology Industrials Financials Financials Energy Financials Materials Financials Industrials Industrials 4.89 4.80 3.10 2.91 2.83 2.80 2.79 2.77 2.76 2.71 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 12.36 12.16 11.53 3.63 1.89 11.95 35.09 6.14 5.25 0.00 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Earnest PartnersMSCI EAFE Index Gros Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Earnest Partners MSCI EAFE Index Gross Dividend Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 19.36 16.53 23,340 -2 4,520 27,858 9.33 1.46 25,484 -4 2,378 27,858 15.59 3.71 24,105 -4 3,757 27,858 -1.63 -9.05 29,002 -4 -1,140 27,858 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 137 City of Clearwater Earnest Partners as of 9/30/10 Cash & Equiv $1,687 6.06% Intl Equity $26,171 93.94% Periods from 6/08 to 9/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.0 -10.0 -9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 e 1 T Annualized Standard Deviation% e Earnest Partners 1 MSCI EAFE Index Gross Di T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -1.63 -9.05 0.55 30.48 28.13 0.25 -0.07 -0.34 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 138 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low e Earnest Partners Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank Last Qtr Last Year Last 2 Years 20.79 18.04 16.84 14.90 8.24 19.36 11 16.53 56 24.39 11.07 7.35 3.51 -0.97 15.59 15 3.71 72 21.45 8.66 5.82 2.43 -2.01 14.02 14 3.75 63 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% e 1 e 1 e 1 139 City of Clearwater Calendar Year Performance Comparison Total Returns of International Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low e Earnest Partners Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank 9/30/10 YTD2009 16.64 8.01 3.75 1.36 -2.04 9.33 19 1.46 73 76.47 43.32 36.13 26.05 13.31 55.54 12 32.46 59 -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% e 1 e 1 140 City of Clearwater Global Equity Summary Statistics Earnest Partners Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth Five Year Dividend Growth PortfolioMSCI EAFE Index Gross Dividend 52 26,170,561 32,007,961 16,230,084 1.83 17.77 15.93 1.05 1.92 104.21 3.68 4.37 967 47,983,264 6,690,562 3.07 18.92 16.19 1.00 1.50 101.53 -1.86 5.32 Ten Largest Holdings Arm Hldgs Plc Weichai Power Co United Industrial Co Bancolombia S A Core Laboratories N Dnb Nor Asa Rio Tinto Plc Itau Unibanco Banco Orient Overseas Int Is MSCI Eafe Market Value% of PortfolioQuarterly Ret 1,277,556 1,254,421 809,620 761,308 739,536 732,673 728,252 724,796 721,603 708,468 4.89 4.80 3.10 2.91 2.83 2.80 2.79 2.77 2.76 2.71 51.73 61.92 18.27 31.61 20.23 40.77 35.89 35.09 18.10 18.08 Ten Best Performers Weichai Power Co The Mac Services Gro Anhui Conch Cement Arm Hldgs Plc Schoeller Bleckmann Banco Bradesco S A Dnb Nor Asa Transocean Ltd Zug Icici Bk Ltd Societe Generale Quarterly Ret 61.92 59.47 54.41 51.73 43.08 41.54 40.77 38.77 37.94 37.29 Ten Worst Performers Icon Pub Ltd Co Grupo Elektra(New) Mindray Medical Intl Roche Holdings Ag Secom Co Industrial & Commerc Nippon Steel Corp China Shipping Conta China Merchants Bank Petroleo Brasileiro Quarterly Ret -25.16 -12.41 -5.89 -0.65 0.97 1.36 2.16 2.46 6.15 6.22 141 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 9/10 Countries/ Currencies Benchmark Active Weight Currency Weight Local Return US $ Return Portfolio Active Weight Currency Weight Local Return US $ Return Return Attribution Market Select Currency Select Security Select Total Australia Austria Belgium Bermuda Brazil Canada Cayman Islands China Colombia Cyprus Czech Republic Denmark Ecuador Finland France Germany Greece Hong Kong India Ireland Isle of Man Israel Italy Japan Kazakhstan Luxembourg Mexico Netherlands New Zealand Norway 8.10 0.29 0.95 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.00 1.01 0.16 1.03 9.78 7.82 0.28 2.56 0.00 0.29 0.06 0.86 2.84 23.27 0.00 0.00 0.00 2.65 0.10 0.73 8.10 0.29 0.95 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.00 1.01 0.16 1.03 9.78 7.82 0.28 2.56 0.00 0.29 0.06 0.86 2.84 23.27 0.00 0.00 0.00 2.65 0.10 0.73 8.33 15.26 7.35 14.48 5.62 13.55 8.66 4.86 5.00 21.82 -13.31 58.97 4.50 7.89 -0.02 3.56 6.32 14.00 24.18 28.46 19.64 14.84 17.67 26.56 21.10 16.87 17.03 22.20 -3.38 68.73 11.60 20.25 5.90 15.52 13.73 26.59 2.70 4.96 0.00 0.00 6.29 2.16 0.00 12.03 2.78 0.00 0.70 0.00 0.00 0.00 3.47 0.00 0.00 3.12 2.07 3.49 0.00 0.00 0.00 8.11 0.00 0.00 1.31 4.99 0.00 4.80 0.06 4.82 0.00 0.00 -0.02 0.00 0.00 0.00 0.00 0.00 0.68 0.00 0.00 0.00 3.38 0.00 0.00 14.73 0.00 0.00 0.00 0.00 0.00 7.88 0.00 0.00 1.27 1.97 0.00 3.22 25.09 21.21 28.94 15.25 31.88 31.61 15.76 19.07 17.74 37.94 -25.16 -2.54 -14.82 16.94 24.17 25.50 35.09 28.94 15.25 32.28 31.61 34.89 32.70 18.10 37.94 -25.16 6.07 -12.41 21.67 29.86 -0.06 0.37 -0.00 -0.01 0.02 -0.06 -0.09 0.19 0.01 0.08 -0.66 -0.03 0.02 -0.02 1.10 -0.09 0.00 0.27 1.85 -1.28 0.19 0.01 0.18 0.27 1.34 1.31 0.05 -2.61 -0.01 0.04 0.10 0.57 0.90 0.10 0.01 -0.63 0.45 0.29 0.36 -0.13 -0.41 -0.20 0.67 0.49 2.25 -0.61 0.18 0.01 0.19 0.21 1.62 1.50 0.05 -2.65 -1.08 0.01 0.12 0.55 1.80 0.69 0.01 0.14 Benchmark : MSCI EAFE Index Gross Dividend 142 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 9/10 Countries/ Currencies Benchmark Active Weight Currency Weight Local Return US $ Return Portfolio Active Weight Currency Weight Local Return US $ Return Return Attribution Market Select Currency Select Security Select Total Panama Portugal Scotland Singapore South Korea Spain Sweden Switzerland United Kingdom United States 0.00 0.27 0.03 1.70 0.00 3.47 2.93 8.04 21.02 0.00 100.00 0.00 0.27 0.03 1.70 0.00 3.47 2.93 8.04 21.02 0.00 100.00 8.16 11.78 7.46 14.54 7.89 2.78 13.79 -8.91 20.55 17.74 14.06 27.66 24.74 13.45 19.85 0.45 0.77 0.00 0.00 3.27 3.07 2.11 2.15 6.28 15.61 3.74 100.00 0.00 0.00 0.00 3.18 0.00 2.05 2.09 2.44 7.77 44.45 99.98 26.74 11.43 13.77 -0.62 3.82 9.36 27.28 2.47 17.44 26.74 18.27 13.77 10.76 20.04 13.71 27.43 2.47 21.16 -0.00 -0.00 0.00 -0.10 -0.00 0.08 -0.35 0.68 0.06 0.00 -0.20 0.39 0.21 0.75 2.61 6.21 0.13 -0.32 -0.09 0.41 2.11 3.76 0.05 0.00 -0.07 -0.03 0.11 1.24 4.37 10.66 Benchmark : MSCI EAFE Index Gross Dividend Market Selection [Portfolio Active Weight - Benchmark Active Weight] x [Benchmark Market Ret Premium - Benchmark Tot Ret Premium] Currency Selection [Portfolio Currency Weight - Benchmark Currency Weight] x [Currency Discount Rate - Total Currency Discount Rate] Security Selection [Portfolio Active Weight] x [Portfolio Market Return Premium - Benchmark Market Return Premium] 143 City of Clearwater International Equity Sector Attribution Analysis Earnest Partners Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 11.73 11.14 11.16 4.24 2.11 14.57 34.20 5.30 5.57 0.00 100.00 7.08 10.21 12.13 10.24 10.65 9.01 24.53 5.03 5.60 5.52 100.00 23.87 28.44 27.39 4.41 11.53 -0.37 24.66 44.32 15.98 21.07 22.87 19.24 15.88 18.74 14.67 11.26 18.00 8.48 20.34 11.31 16.61 0.12 1.02 1.28 -0.61 -0.07 -1.69 2.28 1.90 -0.24 0.00 3.99 0.29 0.02 0.01 -0.13 0.17 -0.30 0.13 -0.02 -0.00 0.29 0.47 0.41 1.05 1.29 -0.74 0.10 -1.99 2.41 1.88 -0.24 0.29 4.46 Index - MSCI EAFE Index Gross Dividend Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.04% [ Actual Return 21.03% ] - [ Buy Hold Return 21.07% ] 144 City of Clearwater Wentworth Hauser & Violich as of 9/30/10 Bhp Billiton Ltd Potash Corp Sask Inc Noble Corporation Ba Nestle S A Schlumberger Ltd Transocean Ltd Zug Weatherford Internat Vale S A Cooper Industries Pl Suncor Energy Inc Ne GICS Sector% Port Materials Materials Energy Consumer Staples Energy Energy Energy Materials Industrials Materials 6.26 6.19 5.09 4.41 4.41 3.95 3.89 3.80 3.79 3.73 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 29.51 29.58 17.85 0.00 14.36 3.01 4.93 0.00 0.00 0.76 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Wentworth Hauser & VioliMSCI EAFE Index Gros Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Wentworth Hauser & Violich MSCI EAFE Index Gross Dividend Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 17.91 16.53 23,187 0 4,152 27,339 2.45 1.46 26,685 -1 655 27,339 11.50 3.71 24,520 -1 2,820 27,339 -7.37 -9.05 29,002 -1 -1,662 27,339 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 145 City of Clearwater Wentworth Hauser & Violich as of 9/30/10 Cash & Equiv $2,365 8.65% Intl Equity $24,973 91.35% Periods from 6/08 to 9/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.0 -10.0 -9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 w 1 T Annualized Standard Deviation% w Wentworth Hauser & Violi 1 MSCI EAFE Index Gross Di T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -7.37 -9.05 0.55 31.25 28.13 0.25 -0.25 -0.34 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 146 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low w Wentworth Hauser & Violich Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank Last Qtr Last Year Last 2 Years 20.79 18.04 16.84 14.90 8.24 17.91 27 16.53 56 24.39 11.07 7.35 3.51 -0.97 11.50 22 3.71 72 21.45 8.66 5.82 2.43 -2.01 3.64 64 3.75 63 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% w 1 w 1w 1 147 City of Clearwater Calendar Year Performance Comparison Total Returns of International Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low w Wentworth Hauser & Violich Net Ret Rank 1 MSCI EAFE Index Gross Dividend Net Ret Rank 9/30/10 YTD2009 16.64 8.01 3.75 1.36 -2.04 2.45 64 1.46 73 76.47 43.32 36.13 26.05 13.31 55.98 12 32.46 59 -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% w 1 w 1 148 City of Clearwater Global Equity Summary Statistics Wentworth Hauser & Violich Period Ending 9/10 Total Number Of Securities Equity Market Value Average Capitalization $(000) Median Capitalization $(000) Equity Segment Yield Equity Segment P/E - Average Equity Segment P/E - Median Equity Segment Beta Price/Book Ratio Debt/Equity Ratio Five Year Earnings Growth Five Year Dividend Growth PortfolioMSCI EAFE Index Gross Dividend 37 24,973,170 50,978,351 23,550,670 1.50 15.13 16.89 0.00 2.15 52.67 15.41 6.75 967 47,983,264 6,690,562 3.07 18.92 16.19 1.00 1.50 101.53 -1.86 5.32 Ten Largest Holdings Bhp Billiton Ltd Potash Corp Sask Inc Noble Corporation Ba Nestle S A Schlumberger Ltd Transocean Ltd Zug Weatherford Internat Vale S A Cooper Industries Pl Suncor Energy Inc Ne Market Value% of PortfolioQuarterly Ret 1,560,744 1,542,668 1,268,815 1,100,658 1,099,739 985,244 969,143 946,699 945,572 929,303 6.26 6.19 5.09 4.41 4.41 3.95 3.89 3.80 3.79 3.73 24.70 67.20 11.42 10.76 11.76 38.77 30.14 28.42 11.91 10.90 Ten Best Performers Potash Corp Sask Inc Yara Intl Asa Agrium Inc Teck Resources Ltd Transocean Ltd Zug Rio Tinto Plc Weatherford Internat Ubs Ag Vale S A Brookfield Asset Mgm Quarterly Ret 67.20 61.30 53.23 39.15 38.77 35.89 30.14 28.82 28.42 26.07 Ten Worst Performers Manulife Finl Corp Nabors Industries Lt Rwe Ag Ingersoll-Rand Plc Canadian Nat Res Ltd Syngenta Ag Unilever N V Nestle S A Suncor Energy Inc Ne Tenaris S A Quarterly Ret -12.47 2.50 2.98 3.75 4.35 8.59 10.31 10.76 10.90 11.01 149 City of Clearwater Global Performance Attribution Analysis Wentworth Hauser & Violich Quarter Ending 9/10 Countries/ Currencies Benchmark Active Weight Currency Weight Local Return US $ Return Portfolio Active Weight Currency Weight Local Return US $ Return Return Attribution Market Select Currency Select Security Select Total Australia Austria Belgium Bermuda Brazil Canada Cayman Islands China Cyprus Denmark Ecuador Finland France Germany Greece Hong Kong Ireland Isle of Man Israel Italy Japan Kazakhstan Luxembourg Netherland Antilles Netherlands New Zealand Norway Portugal Scotland Singapore 8.10 0.29 0.95 0.00 0.00 0.00 0.09 0.00 0.00 1.01 0.16 1.03 9.78 7.82 0.28 2.56 0.29 0.06 0.86 2.84 23.27 0.00 0.00 0.00 2.65 0.10 0.73 0.27 0.03 1.70 8.10 0.29 0.95 0.00 0.00 0.00 0.09 0.00 0.00 1.01 0.16 1.03 9.78 7.82 0.28 2.56 0.29 0.06 0.86 2.84 23.27 0.00 0.00 0.00 2.65 0.10 0.73 0.27 0.03 1.70 8.33 15.26 7.35 14.48 5.62 13.55 8.66 4.86 5.00 21.82 -13.31 58.97 4.50 7.89 -0.02 3.56 6.32 14.00 8.16 11.78 7.46 24.18 28.46 19.64 14.84 17.67 26.56 21.10 16.87 17.03 22.20 -3.38 68.73 11.60 20.25 5.90 15.52 13.73 26.59 20.55 17.74 14.06 6.07 0.00 0.00 10.65 3.70 24.62 5.56 0.00 0.00 0.00 0.00 0.00 0.64 3.31 0.00 0.00 3.04 0.00 0.00 0.00 0.00 0.00 3.92 4.73 5.62 0.00 0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 24.70 10.57 27.88 28.05 11.42 13.97 11.89 3.75 11.01 11.76 15.14 61.30 24.70 10.57 27.88 28.05 11.42 13.97 11.89 3.75 11.01 11.76 15.14 61.30 -0.02 -0.02 -0.00 0.39 0.02 -0.06 -0.13 0.11 0.01 -0.37 -0.57 -0.03 0.02 -0.02 1.70 -0.11 0.00 -0.04 -0.00 -0.00 -0.00 1.87 0.08 0.19 0.01 0.18 0.27 2.05 1.31 0.05 0.55 -0.01 0.04 0.10 0.57 1.37 0.41 0.01 0.18 0.06 0.00 0.23 0.99 -0.17 0.03 0.23 0.52 0.65 0.06 2.84 0.06 0.18 0.24 0.19 0.21 1.96 1.65 0.05 0.18 -0.06 0.01 0.12 0.55 3.06 0.95 0.01 0.20 0.05 0.00 0.23 Benchmark : MSCI EAFE Index Gross Dividend 150 City of Clearwater Global Performance Attribution Analysis Wentworth Hauser & Violich Quarter Ending 9/10 Countries/ Currencies Benchmark Active Weight Currency Weight Local Return US $ Return Portfolio Active Weight Currency Weight Local Return US $ Return Return Attribution Market Select Currency Select Security Select Total Spain Sweden Switzerland United Kingdom United States 3.47 2.93 8.04 21.02 0.00 100.00 3.47 2.93 8.04 21.02 0.00 100.00 14.54 7.89 2.78 13.79 -8.91 27.66 24.74 13.45 19.85 0.45 0.00 0.00 17.94 10.08 0.00 100.00 0.00 0.00 0.00 0.00 100.00 100.00 22.36 21.73 19.91 22.36 21.73 19.91 -0.25 -0.02 -0.44 -0.71 -0.56 0.95 0.72 1.08 4.14 16.40 3.51 0.80 6.63 0.70 0.70 4.15 4.23 22.46 Benchmark : MSCI EAFE Index Gross Dividend Market Selection [Portfolio Active Weight - Benchmark Active Weight] x [Benchmark Market Ret Premium - Benchmark Tot Ret Premium] Currency Selection [Portfolio Currency Weight - Benchmark Currency Weight] x [Currency Discount Rate - Total Currency Discount Rate] Security Selection [Portfolio Active Weight] x [Portfolio Market Return Premium - Benchmark Market Return Premium] 151 City of Clearwater International Equity Sector Attribution Analysis Wentworth Hauser & Violich Quarter Ending 9/10 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 30.48 26.16 19.25 0.00 15.20 3.01 5.03 0.00 0.00 0.89 100.00 7.08 10.21 12.13 10.24 10.65 9.01 24.53 5.03 5.60 5.52 100.00 16.11 35.51 11.05 13.80 19.35 17.51 2.98 19.91 22.87 19.24 15.88 18.74 14.67 11.26 18.00 8.48 20.34 11.31 16.61 -2.06 4.26 -0.93 0.00 -0.13 0.24 -0.02 0.00 0.00 -0.07 1.28 1.46 0.42 -0.05 -0.22 -0.09 0.32 -0.27 0.41 -0.21 0.25 2.02 -0.60 4.67 -0.98 -0.22 -0.22 0.56 -0.30 0.41 -0.21 0.17 3.30 Index - MSCI EAFE Index Gross Dividend Stock Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.02% [ Actual Return 19.89% ] - [ Buy Hold Return 19.91% ] 152 City of Clearwater Eaton Vance Management as of 9/30/10 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Eaton Vance ManagementMSCI Emg Mkts (Gross Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Eaton Vance Management MSCI Emg Mkts (Gross) Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 18.60 18.16 24,277 0 4,514 28,792 14.62 11.02 25,119 -157 3,829 28,792 21.26 20.54 23,743 -157 5,205 28,792 -0.41 -1.42 8,277 -157 20,671 28,792 Portfolio Performance (%) 153 City of Clearwater Eaton Vance Management as of 9/30/10 Intl Equity $28,792 100.00% Periods from 6/08 to 9/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.040.0 -1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 v 1 T Annualized Standard Deviation% v Eaton Vance Management 1 MSCI Emg Mkts (Gross) T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -0.41 -1.42 0.55 33.71 34.75 0.25 -0.03 -0.06 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 154 City of Clearwater Cumulative Performance Comparison Total Returns of Emerging Markets Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low v Eaton Vance Management Net Ret Rank 1 MSCI Emg Mkts (Gross) Net Ret Rank Last Qtr Last Year Last 2 Years 21.74 20.80 19.97 17.89 7.82 18.60 63 18.16 72 33.65 25.71 22.77 18.77 5.46 21.26 57 20.54 61 30.36 22.59 18.43 16.80 -0.22 17.43 61 19.99 35 -5% 0% 5% 10% 15% 20% 25% 30% 35% v 1 v 1 v 1 155 City of Clearwater Calendar Year Performance Comparison Total Returns of Emerging Markets Portfolios Years Ending December High 1st Qt Median 3rd Qt Low v Eaton Vance Management Net Ret Rank 1 MSCI Emg Mkts (Gross) Net Ret Rank 9/30/10 YTD2009 25.09 17.57 13.38 10.85 1.70 14.62 48 11.02 73 92.28 77.74 70.53 63.20 16.09 67.01 63 79.02 23 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% v 1 v 1 156 City of Clearwater Wellington Management as of 9/30/10 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/08 Wellington ManagementMSCI Emg Mkts (Gross Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/08 Wellington Management MSCI Emg Mkts (Gross) Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 17.79 18.16 22,755 0 4,049 26,804 8.01 11.02 24,816 0 1,989 26,804 15.83 20.54 23,141 0 3,664 26,804 2.64 1.76 8,000 0 18,804 26,804 Portfolio Performance (%) 157 City of Clearwater Wellington Management as of 9/30/10 Cash & Equiv $-53 -0.20% Domestic Equity $26,857 100.20% Periods from 3/08 to 9/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.040.045.0 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 l 1 T Annualized Standard Deviation% l Wellington Management 1 MSCI Emg Mkts (Gross) T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 2.64 1.76 0.57 38.77 39.81 0.39 0.05 0.03 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 158 City of Clearwater Cumulative Performance Comparison Total Returns of Emerging Markets Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low l Wellington Management Net Ret Rank 1 MSCI Emg Mkts (Gross) Net Ret Rank Last Qtr Last Year Last 2 Years 21.74 20.80 19.97 17.89 7.82 17.79 76 18.16 72 33.65 25.71 22.77 18.77 5.46 15.83 89 20.54 61 30.36 22.59 18.43 16.80 -0.22 18.62 45 19.99 35 -5% 0% 5% 10% 15% 20% 25% 30% 35% l 1 l 1 l 1 159 City of Clearwater Calendar Year Performance Comparison Total Returns of Emerging Markets Portfolios Years Ending December High 1st Qt Median 3rd Qt Low l Wellington Management Net Ret Rank 1 MSCI Emg Mkts (Gross) Net Ret Rank 9/30/10 YTD2009 25.09 17.57 13.38 10.85 1.70 8.01 92 11.02 73 92.28 77.74 70.53 63.20 16.09 74.44 34 79.02 23 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l 1 l 1 160 City of Clearwater Fixed Income Composite as of 9/30/10 FNMA Pool #ad0494 FNMA Cl 30 - Tba Oct United States Treas FNMA Cl 30 - Tba Oct United States Treas FNMA Pool Ae0381 FNMA Pool #ad0217 FNMA Pool #959477 Federal Home Ln Mtg GNMA Ii Pool 004772 Sector% Port Mortgage Mortgage Government Mortgage Government Mortgage Mortgage Mortgage Government Mortgage 2.19 1.96 1.85 1.58 1.41 1.39 1.37 1.29 1.29 1.12 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 18.64 17.51 16.50 40.74 2.09 0.59 2.13 0.87 0.93 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Fixed Income CompositeBarclays U.S. Aggreg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Fixed Income Composite Barclays U.S. Aggregate Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 2.67 2.48 184,528 806 4,874 190,209 7.79 7.94 180,115 -3,769 13,862 190,209 8.94 8.16 169,043 -3,769 24,934 190,209 8.32 7.42 206,846 -3,769 -12,869 190,209 6.80 6.20 174,965 -3,769 19,013 190,209 6.20 6.41 158,787 -3,769 35,190 190,209 7.10 7.49 59,224 -3,769 134,753 190,209 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 161 City of Clearwater Fixed Income Composite as of 9/30/10 Domestic Equity $69 0.04% Cash & Equiv $15,703 8.26% Domestic Fixed $174,437 91.71% Periods from 12/87 to 9/10 Alpha Beta R-Squared 0.22 0.59 0.57 Annualized Return% 1.01.52.02.53.03.54.04.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 F 1 T Annualized Standard Deviation% F Fixed Income Composite 1 Barclays U.S. Aggregate T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 7.10 7.49 4.28 3.18 4.14 1.13 0.89 0.77 0.00 -0.16 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 162 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low F Fixed Income Composite Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years Last 7 Years Last 8 Years Last 9 Years Last 10 Years 7.23 4.06 2.87 2.36 0.34 2.67 58 2.48 68 18.15 11.71 8.97 7.39 1.84 8.94 50 8.16 63 17.71 13.14 10.09 7.68 1.49 12.36 29 9.35 61 11.06 8.53 7.48 6.04 1.53 8.32 29 7.42 52 9.78 7.85 7.01 6.04 2.71 7.49 36 6.84 57 8.66 7.11 6.44 5.64 2.94 6.80 35 6.20 61 8.11 6.52 5.89 5.24 3.15 6.21 35 5.63 62 8.13 6.47 5.62 5.02 3.34 5.75 44 5.35 63 10.20 6.77 5.66 5.10 3.62 5.64 51 5.35 66 9.24 6.83 5.98 5.34 3.96 5.66 65 5.71 63 9.00 7.36 6.64 5.96 4.15 6.20 69 6.41 61 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% F1 F 1 F 1 F 1 F1F1 F1 F1 F1 F1 F1 163 City of Clearwater Calendar Year Performance Comparison Total Returns of Fixed Income Portfolios Years Ending December High 1st Qt Median 3rd Qt Low F Fixed Income Composite Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank 9/30/10 YTD2009200820072006200520042003200220012000 14.26 9.85 8.01 6.56 1.49 7.79 57 7.94 53 18.96 13.02 8.27 5.35 -0.10 12.37 26 5.93 70 9.44 5.33 3.06 -2.25 -15.90 2.54 53 5.24 27 9.58 7.47 6.49 5.01 2.08 5.94 60 6.96 39 11.33 5.30 4.57 4.13 2.89 5.05 30 4.33 65 6.67 3.07 2.54 2.03 1.32 2.59 47 2.43 56 10.45 5.17 4.34 3.15 1.29 3.93 61 4.34 50 17.31 5.77 4.44 3.55 1.80 3.77 70 4.11 62 12.23 10.42 9.29 6.91 0.88 8.06 66 10.26 28 10.57 9.11 8.38 7.19 2.55 5.57 86 8.43 48 13.56 12.00 10.91 8.69 -1.36 11.13 46 11.63 35 -20% -15% -10% -5% 0% 5% 10% 15% 20% F1 F 1 F 1 F1 F1 F1 F1 F1 F 1 F 1 F1 164 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -2.0 -0.2 1.5 3.4 5.2 7.0 8.8 10.6 12.4 14.2 16.0 F 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank F Fixed Income Composite 1 Barclays U.S. Aggregate Median 8.32294.8650 7.42523.5626 7.484.91 165 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 0.0 1.2 2.4 3.6 4.8 6.0 7.2 8.4 9.6 10.8 12.0 1.0 2.1 3.1 4.2 5.3 6.4 7.5 8.7 9.8 10.9 12.0 F 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank F Fixed Income Composite 1 Barclays U.S. Aggregate Median 6.80354.2152 6.20613.4130 6.444.12 166 City of Clearwater Dodge & Cox as of 9/30/10 FNMA Pool #ad0494 United States Treas FNMA Pool Ae0381 FNMA Pool #ad0217 FNMA Pool #ad0119 United States Treas United States Treas Aol Time Warner Inc Xerox Corp Sr Nt 6.4 FNMA Pool #ae0099 Sector% Port Mortgage Government Mortgage Mortgage Mortgage Government Government Industrials Industrials Mortgage 3.94 3.33 2.51 2.47 2.01 1.91 1.90 1.77 1.76 1.70 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 20.10 10.29 17.69 42.92 3.06 0.49 3.62 0.26 1.57 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/29/04 Dodge & CoxBarclays U.S. Aggreg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/29/04 Dodge & Cox Barclays U.S. Aggregate Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 2.46 2.48 103,011 0 2,537 105,548 7.39 7.94 98,284 0 7,264 105,548 9.20 8.16 89,229 7,585 8,734 105,548 8.27 7.42 99,898 -2,415 8,065 105,548 6.91 6.20 78,868 -2,415 29,096 105,548 5.88 5.34 75,656 -2,415 32,307 105,548 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 167 City of Clearwater Dodge & Cox as of 9/30/10 Cash & Equiv $2,846 2.70% Domestic Fixed $102,703 97.30% Periods from 2/04 to 9/10 Alpha Beta R-Squared 0.17 0.95 0.64 Annualized Return% 0.51.01.52.02.53.03.54.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 d 1 T Annualized Standard Deviation% d Dodge & Cox 1 Barclays U.S. Aggregate T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.88 5.34 2.48 3.84 3.64 0.57 0.89 0.79 0.00 0.19 Asset Allocation ($000) Risk/Return Analysis 168 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low d Dodge & Cox Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years 7.23 4.06 2.87 2.36 0.34 2.46 70 2.48 68 18.15 11.71 8.97 7.39 1.84 9.20 46 8.16 63 17.71 13.14 10.09 7.68 1.49 12.74 27 9.35 61 11.06 8.53 7.48 6.04 1.53 8.27 30 7.42 52 9.78 7.85 7.01 6.04 2.71 7.53 34 6.84 57 8.66 7.11 6.44 5.64 2.94 6.91 31 6.20 61 8.11 6.52 5.89 5.24 3.15 6.29 32 5.63 62 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% d1 d 1 d 1 d 1 d 1d 1 d 1 169 City of Clearwater Calendar Year Performance Comparison Total Returns of Fixed Income Portfolios Years Ending December High 1st Qt Median 3rd Qt Low d Dodge & Cox Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank 9/30/10 YTD20092008200720062005 14.26 9.85 8.01 6.56 1.49 7.39 65 7.94 53 18.96 13.02 8.27 5.35 -0.10 14.53 14 5.93 70 9.44 5.33 3.06 -2.25 -15.90 1.37 59 5.24 27 9.58 7.47 6.49 5.01 2.08 5.47 66 6.96 39 11.33 5.30 4.57 4.13 2.89 5.62 20 4.33 65 6.67 3.07 2.54 2.03 1.32 2.40 58 2.43 56 -20% -15% -10% -5% 0% 5% 10% 15% 20% d 1 d 1 d 1 d 1d 1 d1 170 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low d Dodge & Cox Return Rank 1 Barclays U.S. Aggregate Return Rank 9/10 6/10 3/10 12/09 9/09 11.06 8.53 7.48 6.04 1.53 8.27 30 7.42 52 11.22 8.34 7.30 5.27 0.68 8.14 27 7.55 43 9.63 7.06 6.14 4.83 0.98 7.28 21 6.14 50 9.18 6.93 6.06 4.71 1.27 6.98 24 6.04 51 9.18 7.14 6.17 4.72 1.08 6.98 28 6.41 43 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% d 1 d 1 d 1 d 1 d 1 171 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -2.0 -0.2 1.5 3.4 5.2 7.0 8.8 10.6 12.4 14.2 16.0 d 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank d Dodge & Cox 1 Barclays U.S. Aggregate Median 8.27305.2759 7.42523.5626 7.484.91 172 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 0.0 1.2 2.4 3.6 4.8 6.0 7.2 8.4 9.6 10.8 12.0 1.0 2.1 3.1 4.2 5.3 6.4 7.5 8.7 9.8 10.9 12.0 d 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank d Dodge & Cox 1 Barclays U.S. Aggregate Median 6.91314.3754 6.20613.4130 6.444.12 173 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Dodge & Cox Quarter Ending 9/10 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBarclays U.S. Aggregate 154 102,702,755 2.12 14.72 5.83 4.53 0.31 4.05 6.06 8,258 2.56 6.58 4.34 4.94 -0.23 4.67 6.58 Yield to Maturity 9+ 0.0% 8 - 90.7% 7 - 80.3% 6 - 76.8% 5 - 66.8% 0 - 585.3% Time to Maturity 10+ 53.2% 7 - 1018.2% 5 - 79.2% 3 - 54.5% 1 - 35.3% 0 - 19.6% Coupon 11+ 0.0% 9 - 111.1% 7 - 917.6% 5 - 768.3% 3 - 53.6% 0 - 39.4% Quality NR 1.2% B 1.4% BA 4.7% BAA 20.8% A 14.5% AA 5.4% AAA 42.0% GOVT 10.0% Duration 8+ 15.2% 6 - 812.8% 4 - 613.6% 3 - 412.4% 1 - 333.7% 0 - 112.3% Effective Duration 8+ 13.3% 6 - 811.5% 4 - 613.4% 3 - 413.3% 1 - 330.6% 0 - 117.7% 174 City of Clearwater Percent Invested by Sector and Quality Dodge & Cox As of 9/30/10 Name Moody’s Quality Ratings Aaa Aa A Baa Ba B Other NR Total Government Treasury Agency Corporate Industrial Utility Finance Yankee Transportation Mortgage GNMA FHLMC FNMA Other Mortgage Municipals Cash Other Total 10.29 7.90 2.39 --- --- --- --- --- --- 41.73 --- 4.09 33.33 4.31 --- --- --- 52.02 --- --- --- 4.15 1.05 --- 3.10 --- 0.47 --- --- --- --- --- 0.50 --- 0.31 5.43 --- --- --- 10.54 2.37 --- 7.92 0.26 0.82 --- --- --- --- --- 3.12 --- --- 14.48 --- --- --- 17.73 10.78 --- 6.95 --- 1.77 --- --- --- --- --- --- --- 1.27 20.77 --- --- --- 4.72 3.49 0.49 0.75 --- --- --- --- --- --- --- --- --- --- 4.72 --- --- --- 1.38 --- --- 1.38 --- --- --- --- --- --- --- --- --- --- 1.38 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 0.00 --- --- 0.00 --- --- 1.20 --- --- 1.20 --- --- --- --- 1.20 10.29 7.90 2.39 38.52 17.69 0.49 20.10 0.26 3.06 42.93 --- 4.09 34.53 4.31 3.62 --- 1.58 100.00 175 City of Clearwater Fixed Income Sector Attribution Analysis Dodge & Cox Quarter Ending 9/10 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 19.24 12.56 17.89 40.62 3.72 0.45 3.46 0.26 1.79 100.00 10.91 41.59 9.47 34.99 0.35 1.15 0.00 1.54 0.00 100.00 5.62 0.53 5.00 0.91 3.87 11.72 3.90 4.54 2.75 3.49 2.66 4.40 1.05 4.33 5.61 0.00 3.52 0.00 2.41 0.41 -0.27 0.11 -0.06 -0.02 0.03 0.13 0.00 0.00 0.34 0.09 -0.07 0.17 -0.08 0.06 -0.02 -0.08 -0.01 -0.04 0.01 0.50 -0.34 0.27 -0.13 0.05 0.01 0.05 -0.01 -0.04 0.35 Index - Wilshire GCM Index Security Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.24% [ Actual Return 2.52% ] - [ Buy Hold Return 2.75% ] 176 City of Clearwater Western Asset Management Co. as of 9/30/10 FNMA Cl 30 - Tba Oct FNMA Cl 30 - Tba Oct United States Treas FNMA Pool #959477 Federal Home Ln Mtg GNMA Ii Pool 004772 Federal Home Ln Mtg FNMA Cl 30 - Tba Oct FNMA Cl 30 - Tba Nov Federal Home Ln Mtg Sector% Port Mortgage Mortgage Government Mortgage Government Mortgage Government Mortgage Mortgage Government 4.53 3.65 3.26 2.99 2.98 2.59 2.43 2.16 2.07 1.81 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 16.57 27.82 14.80 37.62 0.72 0.74 0.00 1.74 0.00 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/04 Western Asset ManagementBarclays U.S. Aggreg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/04 Western Asset Management Co. Barclays U.S. Aggregate Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 2.76 2.48 80,167 0 2,211 82,378 8.27 7.94 76,089 0 6,289 82,378 8.58 8.16 75,876 0 6,502 82,378 8.12 7.42 98,025 0 -15,647 82,378 6.59 6.20 78,047 0 4,332 82,378 6.05 5.63 74,568 0 7,810 82,378 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 177 City of Clearwater Western Asset Management Co. as of 9/30/10 Domestic Equity $69 0.08% Cash & Equiv $10,612 12.88% Domestic Fixed $71,697 87.03% Periods from 9/04 to 9/10 Alpha Beta R-Squared 0.01 1.13 0.92 Annualized Return% 0.51.01.52.02.53.03.54.04.5 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 w 1 T Annualized Standard Deviation% w Western Asset Management 1 Barclays U.S. Aggregate T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 6.05 5.63 2.60 3.99 3.39 0.99 0.86 0.89 0.00 0.32 Asset Allocation ($000) Risk/Return Analysis 178 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years 7.23 4.06 2.87 2.36 0.34 2.76 54 2.48 68 18.15 11.71 8.97 7.39 1.84 8.58 54 8.16 63 17.71 13.14 10.09 7.68 1.49 11.55 36 9.35 61 11.06 8.53 7.48 6.04 1.53 8.12 33 7.42 52 9.78 7.85 7.01 6.04 2.71 7.32 40 6.84 57 8.66 7.11 6.44 5.64 2.94 6.59 44 6.20 61 8.11 6.52 5.89 5.24 3.15 6.05 44 5.63 62 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% w 1 w 1 w 1 w 1 w 1 w 1 w 1 179 City of Clearwater Calendar Year Performance Comparison Total Returns of Fixed Income Portfolios Years Ending December High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Net Ret Rank 1 Barclays U.S. Aggregate Net Ret Rank 9/30/10 YTD20092008200720062005 14.26 9.85 8.01 6.56 1.49 8.27 43 7.94 53 18.96 13.02 8.27 5.35 -0.10 9.24 43 5.93 70 9.44 5.33 3.06 -2.25 -15.90 3.92 43 5.24 27 9.58 7.47 6.49 5.01 2.08 6.51 49 6.96 39 11.33 5.30 4.57 4.13 2.89 4.66 45 4.33 65 6.67 3.07 2.54 2.03 1.32 2.77 38 2.43 56 -20% -15% -10% -5% 0% 5% 10% 15% 20% w 1 w 1 w1 w 1 w 1 w 1 180 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Three Year Rolling Periods Ending High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Return Rank 1 Barclays U.S. Aggregate Return Rank 9/10 6/10 3/10 12/09 9/09 11.06 8.53 7.48 6.04 1.53 8.12 33 7.42 52 11.22 8.34 7.30 5.27 0.68 8.15 27 7.55 43 9.63 7.06 6.14 4.83 0.98 6.65 35 6.14 50 9.18 6.93 6.06 4.71 1.27 6.53 34 6.04 51 9.18 7.14 6.17 4.72 1.08 6.90 31 6.41 43 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% w 1 w 1 w 1w 1 w 1 181 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 3 Years Ending 9/30/10 Annualized Rate of Return 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 -2.0 -0.2 1.5 3.4 5.2 7.0 8.8 10.6 12.4 14.2 16.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Western Asset Management Co. 1 Barclays U.S. Aggregate Median 8.12334.6046 7.42523.5626 7.484.91 182 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios 5 Years Ending 9/30/10 Annualized Rate of Return 0.0 1.2 2.4 3.6 4.8 6.0 7.2 8.4 9.6 10.8 12.0 1.0 2.1 3.1 4.2 5.3 6.4 7.5 8.7 9.8 10.9 12.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Western Asset Management Co. 1 Barclays U.S. Aggregate Median 6.59444.1752 6.20613.4130 6.444.12 183 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Western Asset Management Co. Quarter Ending 9/10 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBarclays U.S. Aggregate 231 71,697,432 2.72 18.37 4.81 5.41 0.31 4.80 8.82 8,258 2.56 6.58 4.34 4.94 -0.23 4.67 6.58 Yield to Maturity 9+ 2.2% 8 - 90.0% 7 - 80.5% 6 - 72.4% 5 - 64.6% 0 - 590.4% Time to Maturity 10+ 56.4% 7 - 1011.8% 5 - 77.2% 3 - 58.9% 1 - 38.8% 0 - 16.9% Coupon 11+ 0.1% 9 - 111.8% 7 - 96.5% 5 - 750.7% 3 - 522.9% 0 - 318.0% Quality NR 1.4% B 1.3% BA 1.1% BAA 11.6% A 13.5% AA 5.8% AAA 39.3% GOVT 25.9% Duration 8+ 20.1% 6 - 87.6% 4 - 615.3% 3 - 49.2% 1 - 341.8% 0 - 16.0% Effective Duration 8+ 19.0% 6 - 87.3% 4 - 614.1% 3 - 46.6% 1 - 338.5% 0 - 114.6% 184 City of Clearwater Percent Invested by Sector and Quality Western Asset Management Co. As of 9/30/10 Name Moody’s Quality Ratings Aaa Aa A Baa Ba B Other NR Total Government Treasury Agency Corporate Industrial Utility Finance Yankee Transportation Mortgage GNMA FHLMC FNMA Other Mortgage Municipals Cash Other Total 26.97 10.46 16.51 0.61 0.44 --- --- 0.16 --- 37.62 10.69 3.18 23.01 0.75 --- --- --- 65.20 0.75 --- 0.75 4.89 1.47 --- 3.42 --- 0.15 --- --- --- --- --- --- --- --- 5.80 --- --- --- 13.52 4.56 0.39 8.22 0.34 --- --- --- --- --- --- --- --- --- 13.52 0.09 --- 0.09 11.41 7.80 0.20 2.18 1.23 0.11 --- --- --- --- --- --- --- --- 11.62 --- --- --- 1.14 0.37 0.15 0.62 --- --- --- --- --- --- --- --- --- --- 1.14 --- --- --- 0.85 --- --- 0.85 --- 0.46 --- --- --- --- --- --- --- --- 1.31 --- --- --- 0.15 0.15 --- 0.00 --- --- --- --- --- --- --- --- --- --- 0.15 --- --- --- 1.27 --- --- 1.27 --- --- --- --- --- --- --- --- --- --- 1.27 27.81 10.46 17.35 33.84 14.79 0.74 16.56 1.73 0.72 37.62 10.69 3.18 23.01 0.75 --- --- --- 100.00 185 City of Clearwater Fixed Income Sector Attribution Analysis Western Asset Management Co. Quarter Ending 9/10 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 17.64 40.31 17.72 21.05 0.32 0.86 0.00 1.60 0.51 100.00 10.91 41.59 9.47 34.99 0.35 1.15 0.00 1.54 0.00 100.00 7.38 3.22 5.39 0.96 6.16 6.12 0.00 7.55 3.95 3.49 2.66 4.40 1.05 4.33 5.61 0.00 3.52 0.00 2.41 0.69 0.22 0.18 -0.02 0.01 0.00 0.00 0.06 0.00 1.14 0.07 -0.00 0.16 0.19 -0.00 -0.01 -0.00 0.00 -0.01 0.40 0.76 0.22 0.34 0.17 0.01 -0.01 0.00 0.06 -0.01 1.54 Index - Wilshire GCM Index Security Selection Return Attribution [ Portfolio Market Value Sector Percentage ] * [ Portfolio Sector Return - Index Sector Return ] Sector Selection Return Attribution [ Portfolio Sector Percentage - Index Sector Percentage ] * [ Index Sector Return - Index Total Return ] Trading Effect -0.57% [ Actual Return 3.38% ] - [ Buy Hold Return 3.95% ] 186 City of Clearwater Security Capital as of 9/30/10 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Security CapitalWilshire RESI Index Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Security Capital Wilshire RESI Index Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 13.08 13.24 53,691 0 7,021 60,712 21.98 19.35 49,770 0 10,942 60,712 34.17 30.02 45,245 0 15,467 60,712 -6.06 -6.23 19,347 0 41,365 60,712 Portfolio Performance (%) 187 City of Clearwater Security Capital as of 9/30/10 Real Estate $38,075 62.71% Cash & Equiv $22,637 37.29% Periods from 6/08 to 9/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.040.045.050.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 s1 T Annualized Standard Deviation% s Security Capital 1 Wilshire RESI Index T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -6.06 -6.23 0.55 45.66 46.01 0.25 -0.14 -0.15 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 188 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 9/10 High 1st Qt Median 3rd Qt Low s Security Capital Net Ret Rank 1 Wilshire RESI Index Net Ret Rank Last Qtr Last Year Last 2 Years 18.86 11.89 5.75 1.85 -5.14 13.08 20 13.24 17 31.77 13.34 5.52 -0.87 -23.21 34.17 2 30.02 8 11.06 -4.13 -15.89 -19.25 -36.95 -2.84 23 -4.13 25 -40% -30% -20% -10% 0% 10% 20% 30% 40% s 1 s 1 s 1 189 City of Clearwater Calendar Year Performance Comparison Total Returns of Real Estate Portfolios Years Ending December High 1st Qt Median 3rd Qt Low s Security Capital Net Ret Rank 1 Wilshire RESI Index Net Ret Rank 9/30/10 YTD2009 20.66 12.92 8.81 2.38 -17.09 21.98 2 19.35 8 38.88 2.91 -28.69 -30.79 -42.66 24.68 17 29.20 14 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% s 1 s 1 190 Dow Jones Industrial Average: This index is comprised of 30 "blue-chip" US stocks selected for their history of successful growth and wide interest among investors. The DJIA represents about 20% of the total market value of all US stocks and about 25% of the NYSE market capitalization. It is a price-weighted arithmetic average, with the divisor adjusted to reflect stock splits and the occasional stock switches in the index. NASDAQ Composite: A cap-weighted index comprised of all common stocks listed on the NASDAQ Stock Market (National Association of Securities Dealers Automated Quote system). S&P 500: A broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. This index does not contain the 500 largest companies or the most expensive stocks traded in the US. While many of the stocks are among the largest, this index also includes many relatively small companies. This index consists of approximately 380 industrial, 40 utility, 10 transportation, and 70 financial companies listed on the US market exchanges. It is a capitalization-weighted index (stock price times number of shares outstanding), calculated on a total return basis with dividend reinvested. Russell 1000: The 1000 largest companies in the Russell 3000 index, based on market capitalization. Russell 1000 Growth: A segment of the Russell 1000 with a greater-than-average growth orientation. Companies in this index have higher price-to-book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values than the Russell 1000 Growth index. Russell 1000 Value: Represents a segment of the Russell 1000 with a less-than-average growth orientation. Companies in this index have low price-to book and price-to-earnings ratios, higher dividend yields and lower forecasted growth values than the Russell 1000 Growth index. Russell Mid-Cap: This index consists of the bottom 800 securities in the Russell 1000 as ranked by total market capitalization, and represents over 35% of the Russell 1000 total market cap. Russell Mid-Cap Growth: The Russell Mid-cap Growth Index offers investors access to the mid-cap growth segment of the U.S. equity universe. The Russell Midcap Growth Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap growth market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine growth probability approximates the aggregate mid-cap growth manager's opportunity set. Russell Mid-Cap Value: Measures the performance of the Russell 3000 Index extended to include micro-cap securities of the Russell Micro-cap Index. The index represents approximately 99% of the U.S. Equity Market. As of the latest reconstitution, the average market capitalization was approximately $3.8 billion; the median market capitalization was approximately $612 million. The index had a total market capitalization range of approximately $368.5 billion to $67.3 million. Russell 2000: the 2000 smallest companies in the Russell 3000 index. Russell 2000 Growth: A segment of the Russell 2000 with a greater-than-average growth orientation. Companies in this index have higher price-to book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values than the Russell 2000 Value index. City of Clearwater Employees Pension Fund Appendix Russell 2000 Value: A segment of the Russell 2000 with a less-than-average growth orientation. Companies in this index have low price-to-book and price-to-earnings ratios, higher dividend yields and lower forecasted growth values than the Russell 2000 Growth index. Russell 2500: This index consists of the bottom 500 stocks in the Russell 1000 (as ranked by market capitalization) and all of the stocks in the Russell 2000. This index is intended to be used as a measure of small to medium/small stock performance. Russell 2500 Growth: A segment of the Russell 2500 with a greater-than-average growth orientation. Companies in this index have higher price-to book and price-to-earnings ratios, lower dividend yields and higher forecasted growth values than the Russell 2500 Value index. Russell 2500 Value: A segment of the Russell 2500 with a less-than-average growth orientation. Companies in this index have low price-to-book and price-to-earnings ratios, higher dividend yields and lower forecasted growth values than the Russell 2500 Growth index. Russell 3000: is composed of the 3,000 largest U.S. securities, as determined by total market capitalization. Russell 3000 Growth: This index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indexes. Russell 3000 Value: This index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. The stocks in this index are also members of either the Russell 1000Value or the Russell 2000 Value indexes. MSCI EAFE: A market capitalization-weighted index representing all of the MSCI developed markets outside North America. It comprises 20 of the 22 countries in the MSCI World. These 20 countries include the 14 European countries in the MSCI Europe and the 6 Pacific countries in the MSCI Pacific. This index is created by aggregating the 20 different country indexes, all of which are created separately. MSCI World: A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007 the MSCI World Index consisted of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. MSCI World ex U.S.: The MSCI World index excluding the U.S. portion of the index. MSCI All Country World Index: a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of January 2009 the MSCI ACWI consisted of 46 country indices comprising 23 developed and 23 emerging market country indices. The developed market country indices included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States. The emerging market country indices included are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, City of Clearwater Employees Pension Fund Appendix MSCI All Country World Index ex U.S.: The MSCI All Country World Index excluding the U.S. portion of the index. MSCI Emerging Markets Free (EMF): A market capitalization-weighted index representing 2 of the emerging markets in the world. Several factors are used to designate whether a country is considered to be emerging vs. developed, the most common of which is Gross Domestic Product Per Capita. The "Free" aspect indicates that this index includes only securities that are allowed to be purchased by global investors. This index is created by aggregating the 26 different country indexes, all of which are created separately. Barclays Capital U.S. Aggregate Bond: This index is made up of the Barclays Capital U.S. Government/Credit, the Mortgage-Backed Securities, and the Asset-Backed Securities indices. All issues in the index are rated investment grade or higher, have at least on year maturity, and have an outstanding par value of at least $100 million. Barclays Capital U.S. Government/Credit: This index includes all bonds that are in the Barclays Capital U.S. Government Bond and the Barclays Capital U.S. Credit Bond indices. Barclays Capital U.S. Government/Credit Intermediate: All bonds by the Barclays Capital U.S. Government/Credit Bond index with maturities of 1 to 10 years. Barclays Capital Municipal Bond: This market capitalization-weighted index includes investment grade tax-exempt bonds and is classified into four main sectors General Obligation, Revenue, Insured, and Pre-refunded. To be included in this index, the original transaction size of a bond must have been greater than $50 million. Barclays Capital U.S. Treasury Index: This index includes public obligations of the U.S. Treasury. Treasury bills are excluded by the maturity constraint, but are part of a separate Short Treasury Index. In addition, certain special issues, such as state and local government series bonds (SLGs), as well as U.S. Treasury TIPS, are excluded. STRIPS are excluded from the index because their inclusion would result in double-counting. Securities in the Index roll up to the U.S. Aggregate, U.S. Universal and Global Aggregate Indices. Barclays Capital U.S. TIPS: This index measures the performance of U.S. Treasury Inflation Protection Securities. Merrill Lynch Convertibles: The convertible securities used in this index span all corporate sectors and must have a par amount outstanding of $25 million or more. The maturity must be at least on year. The coupon range must be equal to or greater than zero and all equity of bonds are included. Excluded from this index are preferred equity redemption stocks. When the component bonds of this index convert into common stock, the converted securities are dropped from the index. Merrill Lynch Corp/Govt 1-3 Years A or Better: An unmanaged index of government and corporate fixed-rate debt issues with maturities between one and 3 years. Merrill Lynch High Yield Master: Market capitalization weighted index providing a broad-based measure of bonds in the US domestic bond market rated below investment grade, but not in default. Includes only issues with a credit rating of BB1 or below as rated by Moody's and/or S&P, at least $100 million in face value outstanding and a remaining term to final maturity equal to or greater than one year. Dow Wilshire REIT: A measurement of equity REITs and Real Estate operating Companies. No special-purpose or health care REITs are included. It is a market capitalization weighted index for which returns are calculated monthly City of Clearwater Employees Pension Fund Appendix Alpha: A risk-adjusted measure of 'excess return' on an investment. That is, it measures an active manager's performance in excess of a benchmark index or 'risk-free' investment. An alpha of 1.0 means the manager outperformed the market 1.0%. A positive alpha is the extra return awarded to the investor for taking additional risk rather than accepting the market return. Batting Average: The percent of periods the manager has beaten the benchmark. A high average for the fund (e.g. over 50) is desirable, indicating the fund has beaten the policy frequently. Beta: A measure of systematic risk, or the sensitivity of a manager to movements in the benchmark. A beta of 1 implies that you can expect the movement of a manager's return series to match that of the benchmark used to measure beta. Down Market Capture Ratio: A measure of a manager's performance in down markets. A down-market is defined as those periods (months or quarters) in which market return is less than 0. It tells you what percentage of the down-market was captured by the manager. Information Ratio: The Information Ratio measures the consistency with which a manager beats a benchmark. R-squared: The R-Squared (R2) of a manager versus a benchmark is a measure of how closely related the variance of the manager returns and the variance of the benchmark returns are. Sharpe Ratio: The Sharpe Ratio is a risk-adjusted measure of return which uses standard deviation to represent risk. It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. Standard Deviation: Standard deviation of return measures the average deviations of a return series from its mean, and is often used as a measure of risk. A large standard deviation implies that there have been large swings in the return series of the manager. Tracking Error: A divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark. Treynor Ratio: The Treynor Ratio is a risk-adjusted measure of return which uses beta to represent risk. It is calculated by subtracting the risk-free rate from the rate of return for a portfolio and dividing the result by the portfolio's beta value. Up Market Capture Ratio: A measure of a manager's performance in up markets. An up-market is defined as those periods (months or quarters) in which market return is greater than 0. It tells you what percentage of the up-market was captured by the manager. City of Clearwater Employees Pension Fund Appendix This material is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Any opinions expressed are our current opinions only. Assumptions, opinions and estimates constitute CapTrust's judgment as of the date of this material and are subject to change without notice. While the information contained herein is from sources believed reliable, we do not represent that it is accurate or complete and it should not be relied upon as such. CapTrust accepts no liability for loss arising from the use of this material. Performance Comparison Page Information: Shaded Areas represent where the investment objective was achieved either by: 1)The investment return vs the index; 2)The investment return universe ranking (the lower the number the better the ranking) Manager performance begins on the last day of the inception month. Any investment results depicted represent historical net performance. Past performance is no guarantee of future performance. City of Clearwater Employees Pension Fund Appendix Disclaimer Page