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EMPLOYEES PENSION PLAN - PERFORMANCE REVIEW - FOURTH 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 DECEMBER 31, 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 This report has been created as a courtesy for the clients of CapTrust Advisors. The information contained herein was taken from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Performance Comparison Page Information: Shaded areas represent where the investment objective was achieved either by: 1) The investment return versus the index; 2) The investment return universe ranking (The lower the number the better the ranking) Due to methodologies utilized by our systems, the performance results presented are calculated and presented beginning on the last day of an account's inception month. Results do not include the interim period from an account's inception date to an account's first month-end. For example, for an account that has an inception date of March 15, this report begins measuring performance as of March 31. Omission of performance during this interim period is likely to result in different performance figures than if the interim period's performance was included in this report. Any investment results depicted represent historical net of fees performance. Past performance is no guarantee of future performance. This report is not the official record of your account. However, it has been prepared to assist you with your investment planning and is for information purposes only. Your Custodial Client Statement is the official record of your account. Therefore, if there are any discrepancies between this report and your Client Statement, you should rely on the Client Statement and call your Financial Advisors if you have any questions. Transactions requiring tax consideration should be reviewed carefully with your accountant or tax tax advisor. This is not a substitute for your own records and the year-end 1099 form. Cost data and acquisition dates provided by you are not verified by CapTrust Advisors. Indices are unmanaged and you cannot invest directly in an index. For index definitions, please see the Capital Markets Review. City of Clearwater Employees Pension Fund Important Disclaimer Information 1 2 CAPITAL MARKETS REVIEW –DECEMBER 31, 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%0.14%0.14%0.60%2.31%2.27% Barclays Capital 1-3 year Gov't-0.13%2.40%2.40%3.47%4.32%4.07% Barclays Capital Interm Gov't-1.55%4.98%4.98%4.94%5.41%5.11% Barclays Capital Interm Credit-1.22%7.76%7.76%6.70%6.03%6.22% Barclays Capital Interm Govt/Cred-1.44%5.89%5.89%5.40%5.53%5.51% Barclays Capital Aggregate Bond-1.30%6.54%6.54%5.90%5.80%5.84% Domestic Equity Standard & Poor's 50010.76%15.06%15.06%-2.86%2.29%1.41% Dow Jones Industrial Average8.04%14.06%14.06%-1.61%4.31%3.15% Dow Jones US Total Full Cap11.74%17.70%17.70%-1.56%3.17%2.64% Dow Jones US Select REIT 7.45%28.07%28.07%0.01%2.32%10.42% Russell 1000 - Large Cap11.19%16.10%16.10%-2.37%2.59%1.83% Russell 1000 Growth - Large Cap11.83%16.71%16.71%-0.47%3.75%0.02% Russell 1000 Value - Large Cap10.54%15.51%15.51%-4.42%1.28%3.26% Russell Midcap13.07%25.48%25.48%1.05%4.66%6.54% Russell Midcap Growth14.01%26.38%26.38%0.97%4.88%3.12% Russell Midcap Value12.24%24.75%24.75%1.01%4.08%8.07% Russell 2000 - Small Cap16.25%26.86%26.86%2.22%4.47%6.33% Russell 2000 Growth - Small Cap17.11%29.09%29.09%2.18%5.30%3.78% Russell 2000 Value - Small Cap15.36%24.50%24.50%2.19%3.52%8.42% International Equity MSCI EAFE6.61%7.75%7.75%-7.02%2.46%3.50% MSCI World8.95%11.76%11.76%-4.85%2.43%2.31% MSCI EM 7.05%16.36%16.36%-2.59%10.26%13.18% Blended Benchmarks 30% S&P 500 / 70% Barclays Agg2.32%9.10%9.10%3.27%4.75%4.51% 40% S&P 500 / 60% Barclays Agg3.52%9.95%9.95%2.40%4.40%4.07% 50% S&P 500 / 50% Barclays Agg4.73%10.80%10.80%1.52%4.05%3.63% 60% S&P 500 / 40% Barclays Agg5.94%11.65%11.65%0.64%3.69%3.18% 70% S&P 500 / 30% Barclays Agg7.14%12.50%12.50%-0.23%3.34%2.74% 3 CAPITAL MARKETS REVIEW –DECEMBER 31, 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 Despite mixed economic and market data throughout the quarter the domestic markets finished the year with a strong performance in the fourth quarter. The S&P 500 Index (up 10.76%), NasdaqComposite Index (NASDAQ) (up 12.43%), S&P 400 Mid-cap Index (up 13.50%), and S&P 600 Small-cap Index (up 16.24%) all finished the quarter with double-digit returns. Only the Dow Jones Industrial Average (DJIA) (up 8.04%) posted a single-digit return for the quarter. Volume remains low across all exchanges and trading platforms. Investor and consumer confidence is improving, but the job market is still weak and expected to remain so well into 2011. SCG Equity SC Equity MCG Equity MC Equity MCV Equity SCV Equity Intl Frontier Equity Intl Emerging Equity LCG Equity LC Equity S&P 500 LCV Equity High Yield Bonds Long Term Treasury Bonds Corporate Bonds Intl Developed Equity Mortgage Backed Bonds Foreign Bonds Municipal Bonds 3-Month T-Bill 29.1% 26.9% 26.4% 25.5% 24.8% 24.5% 24.2% 19.2% 16.7% 16.1% 15.1% 15.5% 15.2% 9.4% 9.1% 8.2% 5.7% 4.4% 2.4% 0.1% One Year Performance of Asset ClassesAs Of December 31, 2010 The markets received a jump start early in the quarter when it was announced that the Fed was set to execute another round of quantitative easing, labeled QE2. This announcement coupled with the release of a better than expected September ISM Services Index number (54.4) propelled the S&P 500 to a one day gain of 2.1% on October 5th. Over-weighting of this information by investors and the discounting of a poor employment report from ADP later in the week seemed to set the tone for the quarter. Employment numbers were mixed and largely impacted by the loss of census workers and gain of seasonal retail employees . There was also an abundance of positive commentary regarding corporate infrastructure spending, manufacturing output, servicesector activity, and small business owner confidence –a three-year high, to support market advances. Initial Public Offerings (IPOs) brought to market drew interest from investors, and set records again this quarter led by a $20.5B offering from AIA Group, Inc. and a$20.1B offering from General Motors. Earnings season provided few surprises. In addition to the accustomed earnings target overachievers, Thomson Reuters' data indicated that 60% of reporting companies beat analyst’s top-line forecasts. The overall earnings growth rate for the S&P 500 Index was 31% year-over-year, and nine out of ten sectors are up over the same period last year. The markets also benefited from several industry leaders’, now flush with cash, announcement of dividend increases. Retailers received good news as early reports indicated holiday spending could increase by 6 –8% from last year’s levels. 4 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 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 December 31, 2010 Capital Markets Summary In international markets, emerging market economies led by a rally in commodity prices continued to outperform the developed market economies. In addition to demand, the rise in commodity prices was also attributed to investors’ willingness to accept the risk/return rewards offered by commodities. Latin America showed strong performance led by a surge in Argentina’s Mervalindex. Germany’s market, as measured by the DAX, led Europe’s developed economies, followed by the United Kingdom (FTSE), and France (CAC). Manufacturing activity in Europe is expanding at a slow but steady pace. Unemployment is still hovering around 10%. In Asian markets, inflation remains a concern for China, and therefore, its Asian trading partners. Some investors had expected that rate increases would slow the rapidly expanding economy. However, China’s manufacturing output continued to increase through November until finally showing signs of a slowdown in December. Speculation about how China would manage this concern drove the CSI index down 7.19% in November (-12.27 YTD), but despite raising interest rates this quarter (China), Asian markets moved higher. China’s CSI 300 Index advanced 6.56%, and Hong Kong’s Hang Sengwas up 3.03% for the quarter. In domestic fixed income markets the Treasury announced plans for QE2. To help jump start the economy, the Treasury plans to purchase up to $600 billion of long-term Treasuries, and reinvest an additional $250 -$300 billion in Treasuries with the proceeds of its earlier investments. Some economists, and Kansas City Fed President Thomas Hoenig, disagree with this strategy’s planned success. Treasury yields bottomed early in the quarter and thenmoved steadily higher. The sudden spike in rates caused some corporate issuers, like Allegheny Generating, to reconsider the timing of their debt offering. Europe continued to struggle with debt issues. After much negotiation, Ireland was offered and finally accepted debt relief. Attention has now turned to Portugal and Spain as they consider their options. Italy is being watched closely, and Belgium is also on the radarscreen. While battling inflationary issues on the home front, China, anxious to reaffirm its desire to be recognized as a global leader affirmed its long-term investment commitment to the European markets, and expressed its confidence, specifically in the Spanish financial markets, with a pledge to continue to purchase European debt. Japan’s central bank cut its key interest rate to zero, and like the U.S., intends to begin a debt and other asset-backed securities repurchase program designed to stimulate its economy. 5 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 4Q101 year3 years5 years10 years Return (%) Broad Domestic Equity Performance Large Cap Mid Cap Small Cap Domestic Equity As 2010 drew to a close, the U.S. equity market enjoyed an impressive quarter as strong corporate earnings and tax-relief extensions outweighed continued weakness in employment and home sales. Most major domestic indices posted double-digit returns in the fourth quarter and all major domestic indices were up double-digits for calendar year 2010. A tepid start to 2010 left the S&P 500 down 4.62% heading into September, but a 20.64% gain over the final four months of the year saw the index reach a 15.06% return for the year. By late December, the index had recouped all its losses since the September 2008 collapse of Lehman Brothers. In U.S. mergers and acquisitions, activity increased 14.2% in 2010 as consolidation continued in the energy and health care industry. The biggest deal of the fourth quarter came on the final day of 2010 as CVS Caremark (CVS) announced it had acquired the Medicare Part D business of Universal American (UAM) for $1.25 billion. 0 50 100 150 200 250 300 Style Performance 10 Year Growth of $100 R1000 ValueR1000 GrowthR2000 ValueR2000 Growth At the time CVS’s existing Part D program served 1.2 million Medicare recipients, while Universal American’s program served 1.9 million recipients. In another announcement shortly after quarter end, Duke Energy (DUK) said it would acquire Progress Energy (PGN) inan all-stock deal valued at just over $13 billion. In IPOs, the previously mentioned General Motors IPO in mid-November raised $20.1 billion in the largest IPO in U.S. history. Small cap stocks greatly outperformed large caps as the Russell 2000 beat the Russell 1000 by over 5% in the quarter and greater than 10% (26.86% vs. 16.10%) for the year. The quarter and year also saw growth stocks slightly outperform value stocks across all capitalization levels. 6 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 1.09 3.64 6.11 7.34 10.24 10.76 11.57 11.81 12.63 19.03 21.48 Utilities Health Care Consumer Staples Telecommunication Services Information Technology S&P 500 Financials Industrials Consumer Discretionary Materials Energy S&P 500 Fourth Quarter Sector Returns Russell 1000 Russell Midcap Russell 2000 510 Domestic Equity Quarterly Return -10-50 ValueGrowth 10.5411.19 15.3616.2517.11 11.83 12.2413.0714.01 Domestic Equity All the 10 major sectors enjoyed gains for both the quarter and the year. Energy was the strongest sector of the quarter as it posted returns greater than 5% in each of the final three months to reach a 21.48% return for the quarter. Consumer Discretionary (up 27.66%) and Industrials (up 26.73%) were the big gainers for the year, but Materials and Energy also enjoyed gains of greater than 20% in 2010. Health Care and Utilities lagged in the quarter and were also the only two sectors to report single digit gains in 2010 (up 2.90% and 5.46% for the year). 7 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. China Brazil United Kingdom Germany Australia Japan Russia India Mexico South Africa 4.8% 6.8% 8.8% 9.3% 14.7% 15.6% 19.4% 21.0% 27.6% 34.2% One Year International (Gross) Returns As Of December 31, 2010 International Markets The international markets this quarter lagged domestic markets by a few percentage points. Early index returns show the EAFE (GR) up 6.65% for the quarter with other international indices slightly higher. The continuing spread of the European debt crisis alongwith monetary tightening in China has kept foreign markets from moving higher. In a story that has been unfolding for over a year now, Ireland has followed Greece in accepting a bailout to finance its debt. Prior to the bailout investors were demanding 9.2% returns on Irish bonds. The high rates were a factor for Ireland agreeing to a deal being funded by the Euro zone, the larger European Union and the IMF. These three sources are providing over 67.5 billion in Euros. Financing is also coming from other sources including England that has more financial ties with its neighbor. The average loan rate of 5.8% is higher than the package offeredto Greece 5.2% interest. Economist speculate the higher rate was an attempt to get Ireland back into the private debt market sooner than if they were given a lower rate comparable to Greece. The bailout was accompanied with an announced plan and broader powers for bailing out future financially distressed members of the EU. The plan or the bailout of Ireland did not do much in settling European markets as Portugal, Spain and Italy all had their debt prices sink the following week. With Ireland shored up the next domino likely to fall is Portugal. 8 CAPITAL MARKETS REVIEW –DECEMBER 31, 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 Portuguese bond prices fell with Spain and Italy in December. Portugal’s debt was downgraded by Fitch at the end of the year to A+ from AA-. Fitch rating agency warned that further downgrades may be coming. While Portugal has problems the big elephant in the room is Spain. Spain’s economy is twice the size of Greece, Ireland and Portugal combined. The consensus is that a bailout for Spain would cost more than the EU and the IMF currently has available.There have been calls recently to increase the size of the European Union’s Bailout fund. A bailout of Spain would require financially stable countries like Germany and France to tap their debt market to finance their share of any possible agreement. Paying for what they see as other countries excessesis already a sore spot and it will be even harder to swallow if it requires taking on debt to accomplish it. Economists and pundits will be watching how the Euro zone fares in 2011 and waiting to see if there will be an end in sight for the crisis. The other factor keeping a lid on rising equity prices is the monetary tightening in China to control inflation and cool perceived bubbles, especially in real estate.China increased its one year lending rate by 25 basis points twice in the quarter. The first occurred in October and the second was over the Christmas holiday to bring the rate to 5.81%. Economist believethe rate moves will do little in cooling down the economy which grew 9.6% in the quarter and created inflation breaching 5% in November. China also increased the minimum required reserve by .5% in December, the sixth such increase in 2010. These broad moves were preceded by moves aimed at cooling the real estate market. The moves included a pilot for a property tax as well as increasing down payment minimums to 30% and suspending lending for third homes. How far China tightens will obviously depend on growth and inflation numbers as we move into 2011. Fixed Income U.S. Treasury yields moved higher during the quarter. The benchmark 10-year Treasury was yielding 2.51% in October, rising to 3.29% to close the quarter. Treasury securities were one of the worst performing fixed income sectors for the quarter, yet still posted strong gains for the year. Agency debt performed somewhat better than Treasuries for the quarter, although yields still rose. Agency yield spreads are presently below long term averages, and yields are only slightly above comparable treasury maturities. 9 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 3 MO6 MO2 YR5 YR10 YR30 YR Treasury Yield Curve 12/31/200712/31/200812/31/200912/31/2010 ‐5.00% 0.00% 5.00% 10.00% 15.00% 4Q10YTD1 YR3 YR5 YR Credit Performance AAA AA A BBB BB ‐5.00% 0.00% 5.00% 10.00% 4Q10YTD1 YR3 YR5 YR10 YR Sector Performance GovtsCorpsMortgagesMunis Fixed Income Corporate bonds followed Treasury yields higher in the fourth quarter. However, this year’s refinance boom, fueled by low rates, led to respectable annual gains. The positive outlook for U.S. economic growth, along with declining credit risk, allowed corporate spreads to tighten further. U.S. companies sold approximately 844 billion investment grade debt this year, and they are sitting on a record cash hoard of roughly $1.17 trillion. The high yield sector was the big performer of the quarter with a return of 3.21% according to the Barclays Capital U.S. Corporate High Yield index. The Barclays Capital U.S. Aggregate Bond index was down 1.29% on the quarter with monthly returns of 0.36%, -0.57%, and -1.08%. The Barclays Capital U.S. Government Intermediate index was down 1.55% for the quarter with monthly returns of 0.37%, - 0.58%, and -1.34%. Finally, the Barclays Capital U.S. Corporate Investment Grade index fell 1.60% for the quarter with monthly returns of 0.12%, -0.81%, and -0.92%. Improving economic conditions led to a volatile fourth quarter in fixed income markets. Most fixed income categories suffered as long term rates moved higher. As investors removed money from the bond market to seek out riskier assets, bond funds saw outflows for the first time in two years. The Federal Reserve initiated additional quantitative easing in the fourth quarter. The Fed purchases are targeting the belly of the curve (2-10 year maturities), which they hope will support an economic recovery, and aid corporate refinancing for capital purchases. Rising prices should not be a concern for the Fed as it was reported in mid-November that inflation, less food and energy, was now the lowest since 1957. 10 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. Commodities A weakened dollar and strong manufacturing data from China attributed to the continued advance of commodities this quarter. Oil traded in a narrow range most of the year, but rallied after several inventory reports showed declines in reserves, and analysts projected a higher demand for crude and refined petroleum in 2011. The February futures closed slightly above $91 per barrel, and a 12% gain in the fourth quarter pushed oil to a 27 month high, finishing the year up 16%. Metals also gained during the quarter. Silver was up better than41% closing the quarter at $30.83, up 83.24% for the year. Gold, often considered a safe haven by investors, continued to draw interest from non-traditional investing realms. The metal reached an intra-day high above $1,432 an ounce on December 7, before closing the quarter at $1,421. Gold was up 8.69% for the quarter, and 29.58% for the year. Currency Mixed economic reports from around the globe kept the major currencies in a state of flux. Ahead of the October G20 meeting in Seoul, Treasury Secretary Tim Geithnerrequested other member nations to “refrain from exchange rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of undervalued currency”. Although intended for China, this request was considered disingenuous by other members(and many emerging market countries) as the U.S. Dollar continued to slide to an eight-month low against a basket of currencies. The U.S. Dollar as measured against the Dollar Index was down 1.85% in October, up 5.22% in November, finishing the quarter up just 0.39%. Supportive commentary by the Federal Reserve and continued economic weakness in Europe contributed to the dollar’s late quarter strength. ‐5.00%0.00%5.00%10.00%15.00%20.00%25.00% U.K. Japan Europe Canada Australia 8.8% 15.6% 2.4% 21.2% 14.7% 4.4% 17.6% -4.6% 12.0% 19.8% 1 Year Country And Currency Returns As of December 31, 2010 CurrencyCountry Return 11 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 –DECEMBER 31, 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 Russell BEST 200020001000Wilshire 100010002000Wilshire 2000Agg2000Wilshire Wilshire Wilshire 1000Agg10002000 ValueValueValueREITValueGrowthGrowthREITValueBondGrowthREITREITREITGrowthBondGrowthGrowth 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%29.09% Russell DJ Russell Russell Russell Russell Russell DJ DJ Russell Russell Russell Russell DJ 1000Wilshire 20001000100010002000Wilshire Wilshire 2000200020002000Wilshire GrowthREITValueGrowthGrowthGrowthValueREITREITValueValueValueGrowthREIT 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%28.07% DJ Russell Russell DJ Russell Russell BarclayBarclayRussell Russell Russell Russell Russell Russell Wilshire 10001000Wilshire 10002000AggAgg200010002000200010002000 REITValueValueREITGrowthValueBondBondValueValueValueGrowthValueValue 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%24.50% Russell Russell DJ Russell Russell Russell Russell Russell Russell Russell DJ Russell Russell Russell BarclayDJ Russell 20002000Wilshire 2000100010001000100010001000Wilshire 100010001000AggWilshire 1000 GrowthGrowthREITGrowthValueGrowthValueValueValueValueREITValueGrowthValueBondREITGrowth 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%16.71% 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%15.51% Russell BarclayRussell BarclayRussell Russell Russell DJ Russell Russell Russell Russell Russell Russell 1000Agg1000Agg200020002000Wilshire 100020002000100020002000 ValueBondValueBondGrowthGrowthGrowthREITGrowthValueGrowthValueGrowthValue 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%15.06% 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%7.75% Russell BarclayBarclayDJ Russell Russell Russell BarclayBarclayBarclayBarclayDJ BarclayBarclay 1000AggAggWilshire 200020002000AggAggAggAggWilshire AggAgg WORST GrowthBondBondREITValueGrowthGrowthBondBondBondBondREITBondBond 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%6.54% S&P 500 MSCI EAFE MSCI EAFE MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 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 S&P 500 MSCI EAFE S&P 500 MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 MSCI EAFE S&P 500 MSCI EAFE MSCI EAFE S&P 500 S&P 500 S&P 500 MSCI EAFE S&P 500 MSCI EAFE S&P 500 12 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 - 12/0912/09 - 12/10 Equity vs. FixedMean1 Standard Deviation2 Standard Deviations Equity Outperforming Fixed Outperforming CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 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 - 12/0912/09 - 12/10 Domestic vs. ForeignMean1 Standard Deviation2 Standard Deviations Foreign Outperforming Domestic Outperforming 13 CAPITAL MARKETS REVIEW –DECEMBER 31, 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 - 12/0912/09 - 12/10 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 - 12/0912/09 - 12/10 Large Value vs. Large GrowthMean1 Std Deviation2 Std Deviations Value Outperforming Growth Outperforming 14 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 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 - 12/0912/09 - 12/10 Equity vs. REITMean1 Standard Deviation2 Standard Deviations Equity Outperforming REIT Outperforming 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 - 12/0912/09 - 12/10 Small Value vs. Small GrowthMean1 Standard Deviation2 Standard Deviations Value Outperforming Growth Outperforming 15 CAPITAL MARKETS REVIEW –DECEMBER 31, 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 - 12/0912/09 - 12/10 Fixed Income vs. REITMean1 Standard Deviation2 Standard Deviations Fixed Income Outperforming REIT Outperforming 16 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 –DECEMBER 31, 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. 17 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 18 CAPITAL MARKETS REVIEW –DECEMBER 31, 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. 19 20 City of Clearwater Asset Allocation vs Target & Policy Total Fund As of 12/31/10 Manager Market Value Actual % Policy % ING Investment Mgmt Aletheia Research NTGI-QM R1000V Artisan Partners Wedge Capital Mgmt Atlanta Capital Mgmt Systematic Financial Mgt 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 & Violich Eaton Vance Mgmt Wellington Mgmt Total International Equity Multi Employer Property Trust Security Capital Total Real Estate Total Fund 89,481,396.24 30,335,955.09 42,840,068.90 40,885,652.46 40,943,328.54 11,513,746.87 11,415,579.16 19,641,532.48 287,057,259.74 105,689,606.32 81,482,273.50 137,548.28 4,973,933.80 192,283,361.90 29,711,160.27 31,374,115.12 30,980,328.82 28,784,020.36 120,849,624.57 20,943,622.37 41,879,496.73 62,823,119.10 663,013,365.31 13.50 4.58 6.46 6.17 6.18 1.74 1.72 2.96 43.30 15.94 12.29 0.02 0.75 29.00 4.48 4.73 4.67 4.34 18.23 3.16 6.32 9.48 100.00 42.00 30.00 18.00 10.00 21 City of Clearwater Sources of Fund Growth Total Fund 9/30/10 - 12/31/10 Manager Name Beginning Value Net Contrib Invest Fees Invest Gain/Loss Ending Value ING Investment Mgmt Aletheia Research NTGI-QM R1000V Artisan Partners Wedge Capital Mgmt LMCG SmallCap Selected G Atlanta Capital Mgmt Systematic Financial Mgt Riverbridge Partners Domestic Equity Comp Dodge & Cox Western Asset Management Co. Security Lending Income Account In House Account Fixed Income Comp Earnest Partners Wentworth & Violich Eaton Vance Mgmt Wellington Mgmt International EQ Comp Multi Employer Property Trust Security Capital Real Estate Comp Total Fund 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 0 60,711,992 60,711,992 614,486,598 0 2,000,000 0 0 0 -2,431 0 0 0 1,997,569 0 0 101,007 2,729,271 2,830,278 -588 -921 0 -1 -1,509 20,000,000 -22,000,000 -2,000,000 2,826,338 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8,860,812 3,421,495 4,085,420 5,075,976 4,803,352 -2,778 1,475,296 1,801,312 2,765,228 32,286,111 141,343 -896,134 -875 0 -755,666 1,853,698 4,036,475 2,188,785 1,979,898 10,058,856 943,622 3,167,505 4,111,127 45,700,429 89,481,396 30,335,955 42,840,069 40,885,652 40,943,329 0 11,513,747 11,415,579 19,641,532 287,057,260 105,689,606 81,482,274 137,548 4,973,934 192,283,362 29,711,160 31,374,115 30,980,329 28,784,020 120,849,625 20,943,622 41,879,497 62,823,119 663,013,366 22 City of Clearwater Executive Summary Table Periods Ending December 31, 2010 Net of Fee Return Name Value $(000) Periods Ending 12/31/10 Cur Qtr 1 Year 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Since Inception Ret Date Total Fund Policy Index Domestic Equity Comp S&P 500 Large Cap Equity Comp R1000 Aletheia Research R1000V ING Investment Mgmt R1000G NTGI-QM R1000V R1000V Mid Cap Equity Comp R Mid Cap Artisan Partners R Mid Cap G Wedge Capital Mgmt R Mid Cap V Small Cap Equity Comp R2000 Atlanta Capital Mgmt R2000V Riverbridge Partners R2000G Systematic Financial Mgt R2000V International EQ Comp MSCI EAFE Earnest Partners MSCI EAFE Eaton Vance Mgmt MSCI Emg Mkts Wellington Mgmt MSCI Emg Mkts Wentworth & Violich MSCI EAFE Fixed Income Comp BC Agg 663,013 287,057 162,657 30,336 89,481 42,840 81,829 40,886 40,943 42,571 11,514 19,642 11,416 120,850 29,711 30,980 28,784 31,374 192,283 7.42 6.20 12.68 10.76 11.20 11.20 12.75 10.54 10.99 11.84 10.54 10.54 13.73 13.08 14.17 14.01 13.29 12.24 16.53 16.25 14.70 15.36 16.39 17.11 18.74 15.36 9.08 6.65 6.65 6.65 7.60 7.36 7.39 7.36 14.77 6.65 -0.39 -1.30 17.73 13.96 22.53 15.05 16.87 16.10 16.98 15.51 17.10 16.72 15.75 15.51 28.03 25.49 33.15 26.39 23.30 24.76 29.27 26.85 25.98 24.51 35.50 24.51 18.37 8.21 16.61 8.21 23.33 19.19 15.99 19.19 17.58 8.21 7.37 6.54 3.79 1.24 0.26 -2.86 -1.93 -2.38 -0.32 -4.42 -0.88 -0.47 -4.19 -4.42 2.70 1.05 4.81 0.97 3.60 1.01 1.93 2.22 8.75 2.19 2.93 2.19 -0.90 -6.55 7.35 5.91 6.02 5.24 4.07 2.30 2.53 2.59 4.08 3.76 6.09 4.66 9.33 4.88 5.13 4.47 9.83 3.52 5.38 3.52 6.63 2.94 6.61 5.80 6.67 6.81 5.90 3.85 4.59 4.32 6.05 4.34 7.50 7.89 10.40 7.35 6.87 6.36 10.73 6.18 6.64 6.18 9.06 6.85 5.64 5.10 4.96 5.82 3.42 1.41 2.05 1.82 1.85 0.02 5.53 6.54 5.68 5.84 7.45 7.73 7.78 6.77 6.97 7.00 8.40 5.73 9.03 9.82 5.92 6.04 9.39 9.55 10.83 9.78 9.92 9.79 -1.97 -5.50 11.09 9.14 -5.27 -5.50 12.30 11.56 8.26 5.62 2.07 -0.53 7.83 7.77 11.08 7.93 16.39 17.11 8.03 7.93 6.87 5.36 0.93 -5.99 2.41 1.38 5.08 4.26 -1.75 -5.99 7.00 7.34 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 9/30/10 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 12/31/87 12/31/87 23 City of Clearwater Executive Summary Table Periods Ending December 31, 2010 Net of Fee Return Name Value $(000) Periods Ending 12/31/10 Cur Qtr 1 Year 3 Yrs 5 Yrs 7 Yrs 10 Yrs 15 Yrs Since Inception Ret Date Dodge & Cox BC Agg In House Account 3-month T-Bill Security Lending Income Account 3-month T-Bill Western Asset Management Co. BC Agg Real Estate Comp Wilshire RESI Index Multi Employer Property Trust NCREIF ODCE Security Capital Wilshire RESI 105,690 4,974 138 81,482 62,823 20,944 41,879 0.13 -1.30 0.00 0.04 -1.67 0.04 -1.09 -1.30 6.99 8.18 4.72 4.99 7.89 8.18 7.53 6.54 0.00 0.13 21.70 0.13 7.09 6.54 30.51 29.12 31.62 29.12 7.68 5.91 0.00 0.69 13.56 0.69 6.73 5.91 6.82 5.80 0.00 2.30 10.05 2.30 6.27 5.80 0.00 2.25 7.73 2.25 0.00 2.25 0.00 3.25 5.68 4.94 0.80 4.09 7.28 2.16 5.62 5.17 -3.08 -2.84 4.72 4.99 -2.78 -2.84 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 9/30/10 9/30/10 4/30/08 4/30/08 24 City of Clearwater Executive Summary Table December 31, 2010 Net of Fee Return Name Value $(000) Calendar Years 2010 2009 2008 2007 2006 2005 Total Fund Policy Index Domestic Equity Comp S&P 500 Large Cap Equity Comp R1000 Aletheia Research R1000V ING Investment Mgmt R1000G NTGI-QM R1000V R1000V Mid Cap Equity Comp R Mid Cap Artisan Partners R Mid Cap G Wedge Capital Mgmt R Mid Cap V Small Cap Equity Comp R2000 Atlanta Capital Mgmt R2000V Riverbridge Partners R2000G Systematic Financial Mgt R2000V International EQ Comp MSCI EAFE Earnest Partners MSCI EAFE Eaton Vance Mgmt MSCI Emg Mkts Wellington Mgmt MSCI Emg Mkts Wentworth & Violich MSCI EAFE Fixed Income Comp BC Agg 663,013 287,057 162,657 30,336 89,481 42,840 81,829 40,886 40,943 42,571 11,514 19,642 11,416 120,850 29,711 30,980 28,784 31,374 192,283 17.73 13.96 22.53 15.05 16.87 16.10 16.98 15.51 17.10 16.72 15.75 15.51 28.03 25.49 33.15 26.39 23.30 24.76 29.27 26.85 25.98 24.51 35.50 24.51 18.37 8.21 16.61 8.21 23.33 19.19 15.99 19.19 17.58 8.21 7.37 6.54 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 35.72 20.57 57.93 32.46 55.54 32.46 67.01 79.02 74.44 79.02 55.98 32.46 12.37 5.93 -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 -40.71 -28.92 -47.94 -43.06 2.54 5.24 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 5.94 6.96 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 5.05 4.33 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 2.59 2.43 25 City of Clearwater Executive Summary Table December 31, 2010 Net of Fee Return Name Value $(000) Calendar Years 2010 2009 2008 2007 2006 2005 Dodge & Cox BC Agg In House Account 3-month T-Bill Security Lending Income Account 3-month T-Bill Western Asset Management Co. BC Agg Real Estate Comp Wilshire RESI Index Multi Employer Property Trust NCREIF ODCE Security Capital Wilshire RESI 105,690 4,974 138 81,482 62,823 20,944 41,879 7.53 6.54 0.00 0.13 21.70 0.13 7.09 6.54 30.51 29.12 31.62 29.12 14.53 5.93 0.00 0.16 17.48 0.16 9.24 5.93 24.68 29.20 24.68 29.20 1.37 5.24 0.00 1.80 2.43 1.80 3.92 5.24 5.47 6.96 0.00 4.74 5.10 4.74 6.51 6.96 5.62 4.33 0.00 4.76 4.87 4.76 4.66 4.33 2.40 2.43 0.00 3.01 3.09 3.01 2.77 2.43 26 City of Clearwater Cumulative Performance Comparison Total Returns of Total Fund Public Sponsors Periods Ending 12/10 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 8.12 6.77 5.75 4.40 3.38 7.42 10 6.20 39 16.23 13.67 12.20 10.98 9.33 17.73 3 13.96 20 21.31 16.98 15.32 12.82 9.87 23.85 1 19.83 8 4.13 3.00 1.74 0.30 -2.29 3.79 9 1.24 59 5.16 4.09 3.03 1.92 0.37 4.63 13 2.58 57 5.99 5.22 4.63 4.13 2.74 6.02 4 5.24 22 6.22 5.41 4.96 4.32 3.34 6.14 7 5.73 14 7.00 6.09 5.52 5.04 4.14 6.67 9 6.81 7 8.78 7.76 7.11 6.48 5.02 8.21 13 8.93 4 7.11 6.22 5.47 4.96 4.12 6.18 27 6.89 8 6.52 5.56 4.90 4.26 3.12 4.96 47 5.82 19 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% T 1 T 1 T 1 T 1 T 1 T1 T1 T1 T1 T1 T1 27 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 2010200920082007200620052004200320022001 16.23 13.67 12.20 10.98 9.33 17.73 3 13.96 20 27.37 21.60 19.11 15.60 9.23 30.28 3 26.00 7 -9.71 -20.13 -24.04 -27.15 -30.38 -27.10 74 -27.73 80 10.77 8.69 7.52 6.33 4.36 7.20 58 6.69 66 16.32 14.05 12.08 10.28 6.63 11.76 54 16.59 4 10.34 8.11 6.52 5.33 3.91 6.71 45 8.25 23 13.92 11.79 9.89 8.40 5.70 9.90 49 13.48 7 26.04 22.56 19.72 17.04 11.34 19.63 51 25.03 10 1.58 -5.83 -8.21 -9.76 -12.76 -8.74 60 -8.11 49 4.40 -0.68 -2.68 -4.76 -8.99 -5.35 81 -3.38 59 -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% T 1 T 1 T1 T1 T 1 T1 T 1 T 1 T1 T1 28 City of Clearwater Performance Summary Total Fund December 31, 2010 -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 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 Mgmt R1000G Rank Aletheia Research R1000V Rank NTGI-QM R1000V R1000V Rank Artisan Partners R Mid Cap G Rank Wedge Capital Mgmt R Mid Cap V Rank Atlanta Capital Mgmt R2000V Rank 7.42 6.20 10 10.99 11.84 63 12.75 10.54 8 10.54 10.54 43 14.17 14.01 48 13.29 12.24 70 14.70 15.36 68 17.77 13.96 3 17.10 16.72 37 16.98 15.51 20 15.75 15.51 29 33.15 26.39 8 23.30 24.76 58 25.98 24.51 65 17.77 13.96 3 17.10 16.72 37 16.98 15.51 20 15.75 15.51 29 33.15 26.39 8 23.30 24.76 58 25.98 24.51 65 3.80 1.24 9 -0.88 -0.47 41 -0.32 -4.42 14 -4.19 -4.42 71 4.81 0.97 18 3.60 1.01 37 8.75 2.19 5 6.03 5.24 4 4.08 3.76 33 9.33 4.88 7 9.83 3.52 1 9.39 9.55 11.09 9.14 -1.97 -5.50 -5.27 -5.50 8.26 2.07 11.08 12/31/87 12/31/87 6/30/07 6/30/07 7/31/01 2/28/07 8/31/03 $663,013,366 $89,481,396 $30,335,955 $42,840,069 $40,885,652 $40,943,329 $11,513,747 29 City of Clearwater Performance Summary Total Fund December 31, 2010 Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Systematic Financial Mgt R2000V Rank Riverbridge Partners R2000G Rank Earnest Partners MSCI EAFE Rank Wentworth & Violich MSCI EAFE Rank Eaton Vance Mgmt MSCI Emg Mkts Rank Wellington Mgmt MSCI Emg Mkts Rank Dodge & Cox BC Agg Rank Western Asset Management Co. BC Agg Rank Security Lending Income Account 3-month T-Bill In House Account 3-month T-Bill 18.74 15.36 16 16.39 17.11 51 6.65 6.65 64 14.77 6.65 2 7.60 7.36 28 7.39 7.36 31 0.13 -1.30 26 -1.09 -1.30 65 -1.67 0.04 0.00 0.04 35.50 24.51 1 16.61 8.21 27 17.58 8.21 23 24.10 19.19 25 15.99 19.19 87 7.53 6.54 43 7.09 6.54 49 24.91 0.13 0.00 0.13 35.50 24.51 1 16.61 8.21 27 17.58 8.21 23 24.10 19.19 25 15.99 19.19 87 7.53 6.54 43 7.09 6.54 49 24.91 0.13 0.00 0.13 2.93 2.19 63 7.68 5.91 18 6.73 5.91 32 14.55 0.69 0.00 0.69 5.38 3.52 54 6.82 5.80 19 6.27 5.80 40 10.62 2.30 0.00 2.30 8.03 16.39 0.93 -1.75 2.65 5.08 4.26 5.68 5.62 5.17 7.65 2.16 0.80 4.09 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 $11,415,579 $19,641,532 $29,711,160 $31,374,115 $30,980,329 $28,784,020 $105,689,606 $81,482,274 $137,548 $4,973,934 30 City of Clearwater Performance Summary Total Fund December 31, 2010 Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Multi Employer Property Trust NCREIF ODCE Rank Security Capital Wilshire RESI Rank 4.72 4.99 54 7.89 8.18 13 31.62 29.12 1 31.62 29.12 1 4.72 4.99 54 -2.78 9/30/10 4/30/08 $20,943,622 $41,879,497 31 32 City of Clearwater Domestic Equity Comp as of 12/31/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Google Inc Cisco Sys Inc Oracle Systems Corp Qualcomm Inc Roper Inds Inc New Borg-Warner Automoti Philip Morris Intl I GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Information Technology Information Technology Industrials Consumer Discretionary Consumer Staples 2.15 2.15 1.39 1.27 1.14 1.13 1.09 1.08 1.05 1.04 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 7.62 6.46 16.51 14.54 6.23 10.42 11.66 23.94 0.32 2.30 -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 24.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Domestic Equity CompS&P 500 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Domestic Equity Comp S&P 500 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.68 10.76 252,774 1,998 32,286 287,057 22.53 15.05 239,449 -5,133 52,741 287,057 22.53 15.05 239,449 -5,133 52,741 287,057 0.26 -2.86 298,670 -5,133 -6,480 287,057 4.07 2.30 301,381 -5,133 -9,191 287,057 3.42 1.41 303,359 -5,133 -11,169 287,057 10.83 9.78 32,236 -5,133 259,954 287,057 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 33 City of Clearwater Domestic Equity Comp as of 12/31/10 Cash & Equiv $6,905 2.41% Domestic Equity $280,152 97.59% Periods from 12/87 to 12/10 Alpha Beta R-Squared 0.18 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 Comp 1 S&P 500 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 10.83 9.78 4.24 17.98 15.97 1.15 0.37 0.35 0.00 0.24 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 34 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low E Domestic Equity Comp Net Ret Rank 1 S&P 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 18.60 14.07 11.41 9.76 1.89 12.68 36 10.76 59 32.04 25.09 17.09 14.11 6.38 22.53 32 15.05 67 40.28 29.63 24.04 20.52 12.86 27.24 35 20.61 73 7.97 2.64 -0.85 -2.88 -5.99 0.26 41 -2.86 74 8.00 3.84 1.15 -0.79 -3.61 1.94 42 -0.83 77 9.63 5.82 3.62 2.32 -0.03 4.07 44 2.30 76 9.63 6.54 4.39 2.98 1.42 4.73 44 2.72 84 11.04 8.01 5.79 4.24 2.56 5.90 48 3.85 85 14.60 11.70 8.94 7.03 5.47 9.03 48 6.67 84 11.46 8.26 5.65 3.41 2.42 5.16 54 3.01 85 11.94 7.31 3.93 1.69 0.17 3.42 56 1.41 83 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% E 1 E 1 E 1 E 1 E 1 E1 E 1 E 1 E 1 E 1 E 1 35 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 Comp Net Ret Rank 1 S&P 500 Net Ret Rank 2010200920082007200620052004200320022001 32.04 25.09 17.09 14.11 6.38 22.53 32 15.05 67 54.50 36.65 28.69 24.08 8.75 32.14 38 26.45 64 -15.88 -33.44 -37.01 -41.10 -49.27 -37.76 57 -36.99 49 22.16 10.18 5.41 0.28 -7.56 7.18 35 5.52 47 23.16 17.52 14.59 9.99 1.64 13.01 61 15.81 38 16.04 10.49 6.90 4.56 -0.10 8.12 41 4.89 70 25.38 18.13 13.02 9.97 3.32 13.18 48 10.87 67 58.79 39.38 31.40 27.52 17.91 33.74 41 28.69 66 -3.46 -14.46 -20.85 -24.74 -35.43 -21.30 53 -22.12 62 19.83 3.14 -8.39 -14.06 -30.94 -10.98 56 -11.88 63 -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 36 City of Clearwater Return vs Risk Total Returns of Equity Portfolios Annualized Rate of Return 16.018.220.422.624.827.029.231.433.635.838.0 -10.0 -8.2 -6.3 -4.5 -2.7 -0.9 0.8 2.6 4.4 6.2 8.0 E S MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank E Domestic Equity Comp S Standard & Poors 500 Median 0.264126.4654 -2.867424.9032 -0.8526.27 Annualized Rate of Return 12.013.815.617.419.221.022.824.626.428.230.0 -3.0 -1.6 -0.2 1.1 2.6 4.0 5.4 6.8 8.2 9.5 10.9 E S MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank E Domestic Equity Comp S Standard & Poors 500 Median 4.074420.8051 2.307619.6630 3.6220.84 37 City of Clearwater Large Cap Equity Comp as of 12/31/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Google Inc Cisco Sys Inc Oracle Systems Corp Qualcomm Inc Philip Morris Intl I McDonalds Corp Caterpillar Inc GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Information Technology Information Technology Consumer Staples Consumer Discretionary Industrials 4.38 4.37 2.84 2.58 2.33 2.31 2.22 2.12 1.85 1.83 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 11.68 8.87 12.31 14.12 9.29 8.48 7.44 25.73 0.65 1.41 -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 3/31/88 Large Cap Equity CompR1000 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Large Cap Equity Comp R1000 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 11.20 11.20 144,290 2,000 16,368 162,657 16.87 16.10 105,398 33,870 23,390 162,657 16.87 16.10 105,398 33,870 23,390 162,657 -1.93 -2.38 130,607 33,870 -1,819 162,657 2.53 2.59 153,241 33,870 -24,453 162,657 2.05 1.82 216,163 33,870 -87,375 162,657 9.92 9.79 18,032 33,870 110,755 162,657 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 38 City of Clearwater Large Cap Equity Comp as of 12/31/10 Cash & Equiv $3,184 1.96% Domestic Equity $159,473 98.04% Periods from 3/88 to 12/10 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 10.5 L1 T Annualized Standard Deviation% L Large Cap Equity Comp 1 R1000 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 9.92 9.79 4.22 16.41 16.43 1.15 0.35 0.34 0.00 0.02 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 39 City of Clearwater Large Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low L Large Cap Equity Comp Net Ret Rank 1 R1000 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 13.02 11.54 10.75 10.59 8.80 11.20 31 11.20 31 20.21 16.64 15.09 14.51 11.23 16.87 23 16.10 28 27.80 22.76 20.76 20.51 16.46 20.67 68 22.10 32 2.44 -1.61 -2.75 -2.88 -4.53 -1.93 31 -2.38 38 3.69 0.12 -0.70 -0.85 -2.52 0.40 19 -0.40 41 5.74 3.06 2.38 2.31 1.15 2.53 41 2.59 39 5.49 3.88 2.92 2.75 2.05 3.53 35 3.19 44 6.79 5.21 4.07 3.86 3.32 4.59 40 4.32 45 9.83 8.25 7.03 6.69 6.05 7.62 39 7.22 44 6.82 4.53 3.16 3.03 2.54 3.83 40 3.55 43 6.57 3.06 1.55 1.43 0.95 2.05 41 1.82 44 -5% 0% 5% 10% 15% 20% 25% 30% L1 L1 L 1 L1 L1 L1 L1 L1 L1 L1 L1 40 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 Comp Net Ret Rank 1 R1000 Net Ret Rank 2010200920082007200620052004200320022001 20.21 16.64 15.09 14.51 11.23 16.87 23 16.10 28 38.93 29.44 26.70 26.29 18.60 24.59 85 28.42 35 -27.87 -35.51 -36.93 -37.21 -42.02 -35.23 24 -37.60 80 12.44 5.91 5.51 5.01 -0.20 7.76 12 5.77 29 20.50 16.48 15.80 15.60 11.42 11.52 94 15.46 79 12.80 9.09 5.04 4.88 3.44 8.63 28 6.27 41 19.97 12.84 10.93 10.82 8.16 11.24 42 11.39 40 39.49 31.48 28.73 28.59 24.60 31.37 26 29.90 35 -11.66 -20.66 -22.00 -22.08 -23.79 -22.02 55 -21.65 41 8.89 -6.89 -11.77 -11.93 -12.38 -12.65 97 -12.46 96 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% L1 L 1 L1 L1 L 1 L1 L1 L1 L1 L1 41 City of Clearwater Return vs Risk Total Returns of Large Neutral Portfolios Annualized Rate of Return 19.020.221.422.623.825.026.227.428.629.831.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 L 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank L Large Cap Equity Comp 1 R1000 Median -1.933124.6329 -2.383825.4776 -2.7524.91 Annualized Rate of Return 14.015.116.217.318.419.520.621.722.823.925.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 L 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank L Large Cap Equity Comp 1 R1000 Median 2.534119.2820 2.593920.0372 2.3819.66 42 City of Clearwater ING Investment Mgmt as of 12/31/10 Apple Computer Inc Exxon Mobil Corp Microsoft Corp Google Inc Cisco Sys Inc Oracle Systems Corp Qualcomm Inc Philip Morris Intl I National-Oilwell Inc Directv GICS Sector% Port Information Technology Energy Information Technology Information Technology Information Technology Information Technology Information Technology Consumer Staples Energy Consumer Discretionary 5.80 5.09 3.75 3.41 3.08 3.05 2.94 2.80 2.19 2.17 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 9.86 4.43 12.25 15.37 9.83 10.55 5.31 31.54 0.86 0.00 -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 12/31/87 ING Investment MgmtR1000G Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 ING Investment Mgmt R1000G Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 10.99 11.84 80,621 0 8,861 89,481 17.10 16.72 52,775 23,387 13,319 89,481 17.10 16.72 52,775 23,387 13,319 89,481 -0.88 -0.47 63,462 23,387 2,633 89,481 4.08 3.76 51,550 23,387 14,544 89,481 1.85 0.02 103,604 23,387 -37,510 89,481 11.09 9.14 17,469 23,387 48,625 89,481 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 43 City of Clearwater ING Investment Mgmt as of 12/31/10 Cash & Equiv $1,569 1.75% Domestic Equity $87,912 98.25% Periods from 12/87 to 12/10 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 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 i 1 T Annualized Standard Deviation% i ING Investment Mgmt 1 R1000G T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 11.09 9.14 4.24 16.44 18.98 1.15 0.42 0.26 0.00 0.21 Asset Allocation ($000) Risk/Return Analysis 44 City of Clearwater Large Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low i ING Investment Mgmt Net Ret Rank 1 R1000G 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 15.69 12.69 11.62 10.32 7.55 10.99 63 11.84 43 26.45 18.69 15.50 12.65 7.14 17.10 37 16.72 43 36.28 27.37 24.96 21.35 17.72 20.71 78 26.55 32 3.38 -0.01 -1.67 -3.08 -6.13 -0.88 41 -0.47 34 7.45 3.91 2.18 1.02 -1.29 3.33 33 2.47 45 6.68 4.73 3.50 2.52 0.81 4.08 33 3.76 42 6.66 5.45 4.42 3.66 1.78 5.37 26 4.01 63 7.96 6.45 5.44 4.46 2.65 6.05 31 4.34 81 11.43 9.45 8.53 7.09 6.04 8.79 40 7.22 68 7.48 5.48 4.28 3.21 2.17 4.81 35 2.59 84 4.69 2.71 1.56 0.83 -0.12 1.85 40 0.02 91 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% i1 i1 i 1 i1 i1 i1 i1 i 1 i1 i 1 i 1 45 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 Mgmt Net Ret Rank 1 R1000G Net Ret Rank 2010200920082007200620052004200320022001 26.45 18.69 15.50 12.65 7.14 17.10 37 16.72 43 54.26 39.38 34.43 29.68 20.58 24.43 90 37.21 33 -29.47 -35.21 -38.55 -42.41 -49.09 -33.18 12 -38.43 49 25.99 19.47 14.13 11.04 5.11 17.10 33 11.82 67 15.78 11.25 8.67 4.80 -3.09 7.14 64 9.09 49 17.71 12.52 8.64 5.36 2.63 12.02 29 5.27 77 21.30 13.68 11.01 7.03 4.67 10.27 53 6.30 81 50.58 33.26 29.82 26.33 18.63 30.00 49 29.75 53 -15.71 -20.78 -23.85 -27.67 -33.45 -22.22 30 -27.89 79 -5.52 -12.60 -16.75 -20.69 -26.21 -21.29 80 -20.42 73 -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 46 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low i ING Investment Mgmt Return Rank 1 R1000G Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 -0.88 50 -0.47 47 3.01 -2.49 -5.39 -7.20 -10.66 -3.32 31 -4.36 41 1.76 -5.52 -8.51 -10.35 -14.70 -5.32 23 -6.91 36 4.85 -0.34 -3.21 -5.12 -9.86 0.68 17 -0.78 28 3.27 -1.74 -4.57 -6.45 -11.31 -0.88 19 -1.88 26 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% i 1 i 1 i 1 i 1i 1 ING Investment Mgmt Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 0.8 -1.3 0.2 -1.5 -0.6 -0.1 1.7 3.8 0.8 -1.3 3.4 5.5 -4.6-4.8 0.6 -0.7 0.7 0.5 -0.1 -0.8 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000G 47 City of Clearwater Return vs Risk Total Returns of Large Growth Portfolios Annualized Rate of Return 16.018.020.022.024.026.028.030.032.034.036.0 -9.0 -7.5 -6.0 -4.5 -3.0 -1.5 0.0 1.5 3.0 4.5 6.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank i ING Investment Mgmt 1 R1000G Median -0.884122.6813 -0.473425.4547 -1.6725.88 Annualized Rate of Return 13.014.415.817.218.620.021.422.824.225.627.0 -2.0 -0.9 0.2 1.3 2.4 3.5 4.6 5.7 6.8 7.9 9.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank i ING Investment Mgmt 1 R1000G Median 4.083318.0414 3.764219.9449 3.5020.04 48 City of Clearwater Equity Summary Statistics ING Investment Mgmt Period Ending 12/10 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 PortfolioR1000G 59 87,912,260 88,756,562 21,143,450 1.17 19.82 18.90 1.06 3.39 36.27 10.04 627 85,308,940 6,019,661 1.41 18.84 19.63 1.01 3.86 32.84 9.58 Ten Largest Holdings Apple Computer Inc Exxon Mobil Corp Microsoft Corp Google Inc Cisco Sys Inc Oracle Systems Corp Qualcomm Inc Philip Morris Intl I National-Oilwell Inc Directv Market Value% of PortfolioQuarterly Ret 5,093,222 4,475,675 3,296,207 2,997,173 2,708,129 2,681,440 2,580,211 2,458,026 1,925,502 1,904,102 5.80 5.09 3.75 3.41 3.08 3.05 2.94 2.80 2.19 2.17 13.68 19.07 14.71 12.97 -7.63 16.79 10.12 5.62 51.49 -4.08 Ten Best Performers National-Oilwell Inc Freeport-McMoran Cop Whole Foods Mkt Inc Arch Coal Inc Coach Inc Occidental Pete Corp Broadcom Corp Ansys Inc Harley Davidson Inc Verisk Analytics Inc Quarterly Ret 51.49 42.33 36.32 31.70 29.09 25.81 23.28 23.24 22.26 21.67 Ten Worst Performers Sprint Nextel Corp Cisco Sys Inc Directv Aetna Inc Hospira Inc Pepsico Inc Hershey Foods Corp Citrix Sys Inc Wal Mart Stores Inc Gilead Sciences Inc Quarterly Ret -8.64 -7.63 -4.08 -3.36 -2.32 -0.95 -0.24 0.25 1.33 1.77 49 City of Clearwater Equity Contribution to Return ING Investment Mgmt Period Ending 12/10 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 PortfolioR1000G 59 87,912,260 88,756,562 21,143,450 1.17 19.82 18.90 1.06 3.39 36.27 10.04 627 85,308,940 6,019,661 1.41 18.84 19.63 1.01 3.86 32.84 9.58 Ten Best Contributors National-Oilwell Inc Exxon Mobil Corp Apple Computer Inc Freeport-McMoran Cop Microsoft Corp Oracle Systems Corp Arch Coal Inc Google Inc Harley Davidson Inc Caterpillar Inc Market Value% of PortfolioQuarterly Ret 1,925,502 4,475,675 5,093,222 1,251,338 3,296,207 2,681,440 1,323,199 2,997,173 1,401,257 1,576,766 2.19 5.09 5.80 1.42 3.75 3.05 1.51 3.41 1.59 1.79 51.49 19.07 13.68 42.33 14.71 16.79 31.70 12.97 22.26 19.70 Ten Worst Contributors Cisco Sys Inc Directv Sprint Nextel Corp Hospira Inc Aetna Inc Pepsico Inc Hershey Foods Corp Citrix Sys Inc Wal Mart Stores Inc Gilead Sciences Inc Market Value% of PortfolioQuarterly Ret 2,708,129 1,904,102 757,678 1,361,008 785,938 1,366,704 540,339 1,245,746 1,586,081 1,236,944 3.08 2.17 0.86 1.55 0.89 1.56 0.62 1.42 1.81 1.41 -7.63 -4.08 -8.64 -2.32 -3.36 -0.95 -0.24 0.25 1.33 1.77 50 City of Clearwater Equity Sector Attribution Analysis ING Investment Mgmt Quarter Ending 12/10 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 8.22 5.07 14.74 13.17 8.21 12.34 5.90 31.31 1.04 0.00 100.00 9.97 4.97 13.18 14.67 9.91 10.20 4.64 31.45 0.93 0.09 100.00 27.43 9.36 14.43 10.25 7.23 7.94 10.59 10.62 -8.64 11.64 21.57 20.01 12.91 12.86 6.41 6.19 10.23 10.62 2.50 3.01 11.84 0.48 -0.54 0.22 -0.34 0.07 0.22 0.02 -0.00 -0.12 0.00 0.01 -0.17 0.01 0.02 -0.02 0.09 -0.12 -0.02 0.00 -0.01 0.01 -0.21 0.31 -0.53 0.24 -0.36 0.16 0.10 0.00 0.00 -0.13 0.01 -0.20 Index - R1000G 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 -0.48% [ Actual Return 11.16% ] - [ Buy Hold Return 11.64% ] 51 City of Clearwater Equity Sector Attribution Chart ING Investment Mgmt Quarter Ending 12/10 % Allocation Energy 8.22 9.97 Materials 5.07 4.97 Industrials 14.74 13.18 Con. Discretionary 13.17 14.67 Consumer Staples 8.21 9.91 Health Care 12.34 10.20 Financials 5.90 4.64 Infomation Tech. 31.31 31.45 Telecom. Services 1.04 0.93 Utilities 0.00 0.09 ING Investment MgmtR1000G % Return 27.43 21.57 9.36 20.01 14.43 12.91 10.25 12.86 7.23 6.41 7.94 6.19 10.59 10.23 10.62 10.62 -8.64 2.50 3.01 % Variance 0.31 -0.53 0.24 -0.36 0.16 0.10 0.00 0.00 -0.13 0.01 52 City of Clearwater Aletheia Research as of 12/31/10 MGM Grand Inc Silver Wheaton Corp Atp Oil & Gas Corp Continental Resource Ishares Silver Trust Canadian Nat Res Ltd Hess Corp United States Stl Co Exxon Mobil Corp Suncor Energy Inc Ne GICS Sector% Port Consumer Discretionary Materials Energy Energy Financials Energy Energy Materials Energy Industrials 2.38 2.32 2.31 2.26 2.23 2.22 2.20 2.19 2.13 2.09 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 17.34 22.65 12.50 10.28 7.61 2.08 14.04 7.70 0.00 5.80 -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 6/30/07 Aletheia ResearchR1000V Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 Aletheia Research R1000V Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 12.75 10.54 24,914 2,000 3,421 30,336 16.98 15.51 15,613 10,483 4,240 30,336 16.98 15.51 15,613 10,483 4,240 30,336 -0.32 -4.42 18,443 10,483 1,410 30,336 -1.97 -5.50 19,365 10,483 488 30,336 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 53 City of Clearwater Aletheia Research as of 12/31/10 Cash & Equiv $1,615 5.32% Domestic Equity $28,721 94.68% Periods from 6/07 to 12/10 Alpha Beta R-Squared 1.08 1.03 0.91 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.028.0 -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 R1000V T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -1.97 -5.50 1.36 26.55 24.52 0.90 -0.13 -0.28 0.00 0.50 Asset Allocation ($000) Risk/Return Analysis 54 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low a Aletheia Research Net Ret Rank 1 R1000V Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 13.66 11.24 10.26 8.31 5.67 12.75 8 10.54 43 21.22 16.34 13.95 11.84 9.48 16.98 20 15.51 32 29.61 22.67 19.31 17.52 13.45 26.36 13 17.58 74 2.20 -1.83 -3.20 -4.40 -6.29 -0.32 14 -4.42 75 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% a 1 a1 a 1 a 1 55 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 R1000V Net Ret Rank 201020092008 21.22 16.34 13.95 11.84 9.48 16.98 20 15.51 32 41.44 29.54 24.49 20.94 16.32 36.50 14 19.69 86 -26.51 -34.31 -36.88 -39.77 -44.44 -37.97 61 -36.85 49 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% a 1 a 1 a 1 56 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low a Aletheia Research Return Rank 1 R1000V Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 -0.32 45 -4.42 89 3.01 -2.49 -5.39 -7.20 -10.66 -5.69 52 -9.39 90 1.76 -5.52 -8.51 -10.35 -14.70 -9.57 62 -12.33 89 4.85 -0.34 -3.21 -5.12 -9.86 3.27 -1.74 -4.57 -6.45 -11.31 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% a 1 a 1 a 1 Aletheia Research Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -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% -1.1 1.4 5.5 7.0 -8.2 -5.2 7.8 0.9 2.7 2.0 -2.0 -0.3 1.6 2.0 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000V 57 City of Clearwater Return vs Risk Total Returns of Large Value Portfolios 3 Years Ending 12/31/10 Annualized Rate of Return 14.0 16.4 18.8 21.2 23.6 26.0 28.4 30.8 33.2 35.6 38.0 -10.0 -8.6 -7.2 -5.8 -4.4 -3.0 -1.6 -0.2 1.1 2.6 4.0 a 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank a Aletheia Research 1 R1000V Median -0.321428.6781 -4.427526.4757 -3.2026.27 58 City of Clearwater Equity Summary Statistics Aletheia Research Period Ending 12/10 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 PortfolioR1000V 67 28,721,160 50,153,702 15,719,993 1.39 75.85 15.04 1.19 1.94 50.78 -2.39 668 71,126,278 4,794,409 2.16 17.11 16.10 1.03 1.60 54.33 -0.74 Ten Largest Holdings MGM Grand Inc Silver Wheaton Corp Atp Oil & Gas Corp Continental Resource Ishares Silver Trust Canadian Nat Res Ltd Hess Corp United States Stl Co Exxon Mobil Corp Suncor Energy Inc Ne Market Value% of PortfolioQuarterly Ret 675,527 657,043 654,953 641,465 632,724 628,099 622,653 620,713 604,702 591,389 2.38 2.32 2.31 2.26 2.23 2.22 2.20 2.19 2.13 2.09 31.65 46.49 22.64 26.94 41.62 28.61 29.64 33.40 19.07 17.97 Ten Best Performers Novagold Res Inc Dole Food Co Inc New Silver Wheaton Corp Freeport-McMoran Cop Ishares Silver Trust Fluor Corp United States Stl Co MGM Grand Inc Mosaic Co Hess Corp Quarterly Ret 63.27 47.65 46.49 42.33 41.62 34.06 33.40 31.65 30.04 29.64 Ten Worst Performers Dean Foods Co New Barnes & Nobles Inc Sunpower Corp Aol Inc Sanofi-Aventis Newmont Mng Corp Hld Boeing Co M D C Corp Colo Johnson & Johnson United Contl Hldgs I Quarterly Ret -13.42 -11.25 -10.90 -4.20 -3.07 -1.97 -1.33 -0.04 0.69 0.80 59 City of Clearwater Equity Contribution to Return Aletheia Research Period Ending 12/10 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 PortfolioR1000V 67 28,721,160 50,153,702 15,719,993 1.39 75.85 15.04 1.19 1.94 50.78 -2.39 668 71,126,278 4,794,409 2.16 17.11 16.10 1.03 1.60 54.33 -0.74 Ten Best Contributors Novagold Res Inc Silver Wheaton Corp Dole Food Co Inc New Ishares Silver Trust MGM Grand Inc United States Stl Co Hess Corp Canadian Nat Res Ltd Continental Resource Atp Oil & Gas Corp Market Value% of PortfolioQuarterly Ret 575,723 657,043 580,660 632,724 675,527 620,713 622,653 628,099 641,465 654,953 2.03 2.32 2.05 2.23 2.38 2.19 2.20 2.22 2.26 2.31 63.27 46.49 47.65 41.62 31.65 33.40 29.64 28.61 26.94 22.64 Ten Worst Contributors Sunpower Corp Barnes & Nobles Inc Dean Foods Co New Aol Inc Newmont Mng Corp Hld Boeing Co Sanofi-Aventis M D C Corp Colo General Motors Corp. United Contl Hldgs I Market Value% of PortfolioQuarterly Ret 447,446 345,543 164,468 329,806 502,190 438,547 186,934 267,993 387,399 263,354 1.58 1.22 0.58 1.16 1.77 1.55 0.66 0.95 1.37 0.93 -10.90 -11.25 -13.42 -4.20 -1.97 -1.33 -3.07 -0.04 0.80 60 City of Clearwater Equity Sector Attribution Analysis Aletheia Research Quarter Ending 12/10 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 15.95 21.74 10.53 10.74 10.29 2.52 13.86 6.55 0.00 7.83 100.00 11.33 2.92 8.97 7.50 10.31 13.40 27.32 5.48 5.35 7.43 100.00 19.35 23.23 19.17 13.93 -16.92 -0.46 14.22 4.16 5.52 12.57 22.27 17.88 12.91 13.90 6.16 3.19 11.04 12.12 7.49 1.86 10.53 -0.47 1.16 0.66 0.00 -2.37 -0.09 0.44 -0.52 0.00 0.29 -0.90 0.54 1.38 0.04 0.11 0.00 0.80 -0.07 0.02 0.16 -0.04 2.95 0.08 2.55 0.70 0.11 -2.37 0.71 0.37 -0.50 0.16 0.25 2.04 Index - R1000V 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 0.85% [ Actual Return 13.43% ] - [ Buy Hold Return 12.57% ] 61 City of Clearwater Equity Sector Attribution Chart Aletheia Research Quarter Ending 12/10 % Allocation Energy 15.95 11.33 Materials 21.74 2.92 Industrials 10.53 8.97 Con. Discretionary 10.74 7.50 Consumer Staples 10.29 10.31 Health Care 2.52 13.40 Financials 13.86 27.32 Infomation Tech. 6.55 5.48 Telecom. Services 0.00 5.35 Utilities 7.83 7.43 Aletheia ResearchR1000V % Return 19.35 22.27 23.23 17.88 19.17 12.91 13.93 13.90 -16.92 6.16 -0.46 3.19 14.22 11.04 4.16 12.12 7.49 5.52 1.86 % Variance 0.08 2.55 0.70 0.11 -2.37 0.71 0.37 -0.50 0.16 0.25 62 City of Clearwater NTGI-QM R1000V as of 12/31/10 -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 6/30/07 NTGI-QM R1000VR1000V Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/07 NTGI-QM R1000V R1000V Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 10.54 10.54 38,755 0 4,085 42,840 15.75 15.51 37,009 0 5,831 42,840 15.75 15.51 37,009 0 5,831 42,840 -4.19 -4.42 48,696 0 -5,856 42,840 -5.27 -5.50 26,197 0 16,643 42,840 Portfolio Performance (%) 63 City of Clearwater NTGI-QM R1000V as of 12/31/10 Domestic Equity $42,840 100.00% Periods from 6/07 to 12/10 Alpha Beta R-Squared 0.06 1.00 1.00 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 -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 R1000V 1 R1000V T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -5.27 -5.50 1.36 24.55 24.52 0.90 -0.27 -0.28 0.00 1.25 Asset Allocation ($000) Risk/Return Analysis 64 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low n NTGI-QM R1000V Net Ret Rank 1 R1000V Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 13.66 11.24 10.26 8.31 5.67 10.54 43 10.54 43 21.22 16.34 13.95 11.84 9.48 15.75 29 15.51 32 29.61 22.67 19.31 17.52 13.45 18.03 66 17.58 74 2.20 -1.83 -3.20 -4.40 -6.29 -4.19 71 -4.42 75 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% n1 n 1 n 1 n 1 65 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 R1000V Net Ret Rank 1 R1000V Net Ret Rank 201020092008 21.22 16.34 13.95 11.84 9.48 15.75 29 15.51 32 41.44 29.54 24.49 20.94 16.32 20.35 80 19.69 86 -26.51 -34.31 -36.88 -39.77 -44.44 -36.86 49 -36.85 49 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% n 1 n 1 n1 66 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low n NTGI-QM R1000V Return Rank 1 R1000V Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 -4.19 87 -4.42 89 3.01 -2.49 -5.39 -7.20 -10.66 -9.15 89 -9.39 90 1.76 -5.52 -8.51 -10.35 -14.70 -12.10 87 -12.33 89 4.85 -0.34 -3.21 -5.12 -9.86 3.27 -1.74 -4.57 -6.45 -11.31 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% n 1 n 1 n 1 NTGI-QM R1000V Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -0.2% -0.1% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 0.0 0.1 0.0 0.1 -0.2 0.1 0.2 0.1 0.0 0.3 0.1 0.0 0.1 0.0 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000V 67 City of Clearwater Return vs Risk Total Returns of Equity Portfolios 3 Years Ending 12/31/10 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 -10.0 -8.2 -6.3 -4.5 -2.7 -0.9 0.8 2.6 4.4 6.2 8.0 n1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank n NTGI-QM R1000V 1 R1000V Median -4.198726.5054 -4.428926.4754 -0.8526.27 68 City of Clearwater Mid Cap Equity Comp as of 12/31/10 Borg-Warner Automoti Computer Sciences Co Sonoco Prods Co Donnelley R R & Sons Cerner Corp Simon Ppty Group Inc Duke Realty Corp. Dover Corp Carlisle Corp Sara Lee Corp GICS Sector% Port Consumer Discretionary Information Technology Materials Industrials Health Care Financials Financials Industrials Industrials Consumer Staples 3.12 2.13 2.03 2.00 1.97 1.92 1.91 1.90 1.84 1.76 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 3.67 4.53 21.67 15.83 2.84 9.74 16.54 20.58 0.00 4.61 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Mid Cap Equity CompR Mid Cap Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/88 Mid Cap Equity Comp R Mid Cap Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 13.73 13.08 71,950 0 9,879 81,829 28.03 25.49 63,914 0 17,916 81,829 28.03 25.49 63,914 0 17,916 81,829 2.70 1.05 91,352 0 -9,523 81,829 6.09 4.66 91,492 0 -9,662 81,829 5.53 6.54 87,253 0 -5,424 81,829 12.30 11.56 15,585 0 66,244 81,829 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 69 City of Clearwater Mid Cap Equity Comp as of 12/31/10 Cash & Equiv $2,570 3.14% Domestic Equity $79,259 96.86% Periods from 3/88 to 12/10 Alpha Beta R-Squared 0.06 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 13.0 M 1 T Annualized Standard Deviation% M Mid Cap Equity Comp 1 R Mid Cap T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 12.30 11.56 4.22 23.65 18.38 1.15 0.34 0.40 0.00 0.11 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 70 City of Clearwater Midcap Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low M Mid Cap Equity Comp Net Ret Rank 1 R Mid Cap 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 18.32 13.91 13.41 13.07 9.84 13.73 27 13.08 73 34.81 26.97 24.84 23.04 20.57 28.03 20 25.49 46 44.69 34.80 31.88 29.31 22.59 36.40 19 32.77 38 9.91 4.50 2.91 1.32 -2.64 2.70 51 1.05 76 7.25 6.06 4.11 2.19 -1.09 4.54 40 2.17 75 9.51 8.12 5.54 4.45 2.76 6.09 36 4.66 61 10.27 9.16 6.97 5.65 4.08 6.38 60 5.95 65 11.54 10.88 8.80 7.77 6.50 7.50 75 7.89 66 14.58 12.97 11.35 10.66 9.22 11.01 62 11.46 42 11.17 9.59 8.12 7.88 6.69 7.06 89 7.99 66 12.46 11.19 7.31 7.00 6.79 5.53 100 6.54 99 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% M1 M 1 M 1 M1 M 1 M1 M1 M1 M1 M1 M1 71 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 Comp Net Ret Rank 1 R Mid Cap Net Ret Rank 2010200920082007200620052004200320022001 34.81 26.97 24.84 23.04 20.57 28.03 20 25.49 46 61.89 42.82 37.59 35.51 26.66 45.33 21 40.47 34 -21.07 -32.73 -36.93 -41.77 -50.25 -41.79 78 -41.46 72 16.98 9.26 5.92 -0.06 -2.86 10.26 15 5.59 50 24.57 18.61 14.01 10.56 8.21 12.53 58 15.27 41 17.47 12.60 11.35 8.53 1.24 7.85 79 12.65 23 24.59 21.17 19.93 16.71 13.80 14.48 93 20.23 45 43.43 39.40 36.44 34.16 27.16 38.95 35 40.08 12 -4.52 -9.81 -12.33 -14.56 -16.55 -19.87 99 -16.19 91 26.71 15.75 0.43 -3.06 -5.61 -7.30 99 -5.62 99 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% M1 M 1 M1 M 1 M1 M 1 M 1 M1 M1 M1 72 City of Clearwater Return vs Risk Total Returns of Midcap Neutral Portfolios Annualized Rate of Return 14.016.819.622.425.228.030.833.636.439.242.0 -6.0 -4.2 -2.3 -0.5 1.2 3.0 4.8 6.6 8.4 10.2 12.0 M 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized ReturnStandard Deviation ValueRankValueRank M Mid Cap Equity Comp 1 R Mid Cap Median 2.705129.4866 1.057630.0980 2.9128.43 Annualized Rate of Return 12.014.216.418.620.823.025.227.429.631.834.0 1.0 1.9 2.8 3.7 4.6 5.5 6.4 7.3 8.2 9.0 9.9 M 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Return Standard Deviation Value Rank Value Rank M Mid Cap Equity Comp 1 R Mid Cap Median 6.093623.3678 4.666123.5482 5.5422.26 73 City of Clearwater Artisan Partners as of 12/31/10 Cerner Corp Precision Castparts Agilent Technologies Cooper Industries Pl Borg-Warner Automoti Trimble Navigation L Allergan Inc C H Robinson Worldwi Roper Inds Inc New Citrix Sys Inc GICS Sector% Port Health Care Industrials Health Care Industrials Consumer Discretionary Information Technology Health Care Industrials Industrials Information Technology 3.95 3.06 3.05 2.99 2.92 2.88 2.62 2.37 2.34 2.28 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 5.26 0.00 21.26 20.70 0.00 16.34 7.37 29.07 0.00 0.00 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 7/31/01 Artisan PartnersR Mid Cap G Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 7/31/01 Artisan Partners R Mid Cap G Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 14.17 14.01 35,810 0 5,076 40,886 33.15 26.39 30,708 0 10,178 40,886 33.15 26.39 30,708 0 10,178 40,886 4.81 0.97 26,364 0 14,522 40,886 9.33 4.88 40,420 0 466 40,886 8.26 5.62 29,914 0 10,972 40,886 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 74 City of Clearwater Artisan Partners as of 12/31/10 Cash & Equiv $1,286 3.15% Domestic Equity $39,599 96.85% Periods from 7/01 to 12/10 Alpha Beta R-Squared 0.59 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 8.0 8.5 r 1 T Annualized Standard Deviation% r Artisan Partners 1 R Mid Cap G T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 8.26 5.62 2.22 20.56 20.62 0.52 0.29 0.17 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 12/10 High 1st Qt Median 3rd Qt Low r Artisan Partners Net Ret Rank 1 R Mid Cap G 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 20.84 15.69 13.96 12.40 8.40 14.17 48 14.01 48 35.44 29.55 26.96 24.34 18.44 33.15 8 26.39 57 42.95 36.49 33.68 29.73 26.93 41.97 8 35.98 30 5.60 3.95 1.33 -0.52 -4.22 4.81 18 0.97 59 8.96 7.31 4.92 3.54 -0.98 8.94 6 3.49 75 9.45 7.93 6.53 5.35 2.98 9.33 7 4.88 85 10.11 9.41 7.87 6.43 4.85 9.48 19 6.05 89 10.93 9.86 8.44 7.96 7.02 10.40 8 7.35 87 14.90 12.98 12.01 11.27 9.90 13.09 17 11.24 75 9.51 9.23 8.01 6.17 5.72 8.30 41 6.09 81 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% r1 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 R Mid Cap G Net Ret Rank 201020092008200720062005200420032002 35.44 29.55 26.96 24.34 18.44 33.15 8 26.39 57 58.21 46.06 38.63 36.32 28.46 51.38 14 46.30 24 -33.13 -36.97 -40.90 -44.28 -49.08 -42.87 62 -44.32 75 25.51 21.55 16.68 10.39 4.90 22.31 17 11.41 71 30.32 16.20 13.34 10.41 5.33 10.94 68 10.64 68 23.20 14.83 12.36 9.85 5.70 10.19 64 12.10 52 24.98 18.39 16.35 12.67 10.86 16.07 61 15.48 61 51.00 39.45 37.89 32.91 29.41 33.84 67 42.72 15 -8.61 -19.46 -21.96 -25.52 -31.39 -23.37 61 -27.41 85 -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 December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low r Artisan Partners Return Rank 1 R Mid Cap G Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 4.81 12 0.97 36 3.01 -2.49 -5.39 -7.20 -10.66 0.23 11 -3.90 36 1.76 -5.52 -8.51 -10.35 -14.70 -3.50 13 -7.53 40 4.85 -0.34 -3.21 -5.12 -9.86 2.98 8 -2.05 39 3.27 -1.74 -4.57 -6.45 -11.31 1.89 8 -3.18 38 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% r 1r 1 r 1 r 1 r 1 Artisan Partners Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -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% 24.0% 0.20.2 -0.1 0.0 -0.6 4.8 3.8 1.6 -1.9 -2.6 7.7 -0.2 5.4 -0.1 -0.6 -1.1-0.9 2.5 3.6 0.1 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R Mid Cap G 78 City of Clearwater Return vs Risk Total Returns of Midcap Growth Portfolios Annualized Rate of Return 16.018.420.823.225.628.030.432.835.237.640.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 r 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized ReturnStandard Deviation ValueRankValueRank r Artisan Partners 1 R Mid Cap G Median 4.811829.4961 0.975930.4571 1.3327.80 Annualized Rate of Return 14.015.817.619.421.223.024.826.628.430.232.0 2.0 2.9 3.8 4.7 5.6 6.5 7.4 8.3 9.2 10.0 10.9 r 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Return Standard Deviation Value Rank Value Rank r Artisan Partners 1 R Mid Cap G Median 9.33723.3858 4.888523.8263 6.5322.42 79 City of Clearwater Equity Summary Statistics Artisan Partners Period Ending 12/10 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 PortfolioR Mid Cap G 73 39,599,233 10,599,621 7,146,429 0.43 35.60 31.94 1.20 4.21 20.74 8.23 493 8,177,990 4,502,943 0.85 24.59 20.46 1.15 3.97 38.21 6.21 Ten Largest Holdings Cerner Corp Precision Castparts Agilent Technologies Cooper Industries Pl Borg-Warner Automoti Trimble Navigation L Allergan Inc C H Robinson Worldwi Roper Inds Inc New Citrix Sys Inc Market Value% of PortfolioQuarterly Ret 1,563,210 1,211,127 1,205,613 1,183,287 1,157,760 1,141,998 1,036,917 938,223 924,803 903,012 3.95 3.06 3.05 2.99 2.92 2.88 2.62 2.37 2.34 2.28 12.80 9.34 24.15 19.72 37.51 13.96 3.29 15.11 17.43 0.25 Ten Best Performers Lululemon Athletica Borg-Warner Automoti Dicks Sporting Goods Tesla Mtrs Inc Fossil Inc Coach Inc Wynn Resorts Ltd Illumina Inc Varian Semiconductor Gardner Denver Machy Quarterly Ret 53.00 37.51 33.74 31.44 31.03 29.09 28.97 28.74 28.46 28.31 Ten Worst Performers Home Inns & Hotels M Ctrip Com Intl Ltd First Solar Inc Hdfc Bank Ltd Intuitive Surgical I Mercadolibre Inc Gsi Commerce Inc Citrix Sys Inc Core Laboratories N Garmin Ltd Quarterly Ret -17.15 -15.29 -11.68 -9.36 -9.16 -7.66 -6.07 0.25 1.22 2.11 80 City of Clearwater Equity Contribution to Return Artisan Partners Period Ending 12/10 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 PortfolioR Mid Cap G 73 39,599,233 10,599,621 7,146,429 0.43 35.60 31.94 1.20 4.21 20.74 8.23 493 8,177,990 4,502,943 0.85 24.59 20.46 1.15 3.97 38.21 6.21 Ten Best Contributors Borg-Warner Automoti Agilent Technologies Lululemon Athletica Coach Inc Fossil Inc Cooper Industries Pl Polo Ralph Lauren Co Gardner Denver Machy Cerner Corp Cme Group Inc Market Value% of PortfolioQuarterly Ret 1,157,760 1,205,613 526,834 890,491 775,280 1,183,287 898,452 722,610 1,563,210 817,567 2.92 3.05 1.33 2.25 1.96 2.99 2.27 1.83 3.95 2.07 37.51 24.15 53.00 29.09 31.03 19.72 23.55 28.31 12.80 23.98 Ten Worst Contributors Ctrip Com Intl Ltd Home Inns & Hotels M Hdfc Bank Ltd Gsi Commerce Inc Mercadolibre Inc First Solar Inc Intuitive Surgical I Booz Allen Hamilton Opentable Inc Citrix Sys Inc Market Value% of PortfolioQuarterly Ret 513,715 253,952 367,642 528,960 413,230 208,224 129,391 99,093 28,192 903,012 1.30 0.64 0.93 1.34 1.04 0.53 0.33 0.25 0.07 2.28 -15.29 -17.15 -9.36 -6.07 -7.66 -11.68 -9.16 3.53 0.25 81 City of Clearwater Equity Sector Attribution Analysis Artisan Partners Quarter Ending 12/10 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 5.17 0.00 19.23 21.01 0.00 12.81 7.56 34.23 0.00 0.00 100.00 5.53 7.02 15.61 20.08 4.84 12.99 6.97 24.58 2.06 0.31 100.00 15.53 17.93 19.93 14.47 7.54 10.64 14.50 24.74 15.77 17.13 14.99 9.07 9.20 12.65 13.33 3.56 3.01 14.04 -0.48 0.00 0.15 1.04 0.00 0.68 -0.39 -0.92 0.00 0.00 0.08 -0.04 -0.12 0.11 0.01 0.24 0.01 -0.01 -0.07 0.22 0.03 0.38 -0.51 -0.12 0.26 1.05 0.24 0.68 -0.39 -0.99 0.22 0.03 0.47 Index - R Mid Cap G 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 0.09% [ Actual Return 14.59% ] - [ Buy Hold Return 14.50% ] 82 City of Clearwater Equity Sector Attribution Chart Artisan Partners Quarter Ending 12/10 % Allocation Energy 5.17 5.53 Materials 0.00 7.02 Industrials 19.23 15.61 Con. Discretionary 21.01 20.08 Consumer Staples 0.00 4.84 Health Care 12.81 12.99 Financials 7.56 6.97 Infomation Tech. 34.23 24.58 Telecom. Services 0.00 2.06 Utilities 0.00 0.31 Artisan PartnersR Mid Cap G % Return 15.53 24.74 15.77 17.93 17.13 19.93 14.99 9.07 14.47 9.20 7.54 12.65 10.64 13.33 3.56 3.01 % Variance -0.51 -0.12 0.26 1.05 0.24 0.68 -0.39 -0.99 0.22 0.03 83 City of Clearwater Wedge Capital Mgmt as of 12/31/10 Computer Sciences Co Sonoco Prods Co Donnelley R R & Sons Simon Ppty Group Inc Duke Realty Corp. Dover Corp Carlisle Corp Sara Lee Corp Lincoln Natl Corp In Allstate Corp GICS Sector% Port Information Technology Materials Industrials Financials Financials Industrials Industrials Consumer Staples Financials Financials 4.25 4.06 3.99 3.85 3.81 3.81 3.68 3.51 3.50 3.39 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 2.08 9.05 22.08 10.96 5.68 3.14 25.71 12.10 0.00 9.21 -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 24.0 26.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 Wedge Capital MgmtR Mid Cap V Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/28/07 Wedge Capital Mgmt R Mid Cap V Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 13.29 12.24 36,140 0 4,803 40,943 23.30 24.76 33,206 0 7,738 40,943 23.30 24.76 33,206 0 7,738 40,943 3.60 1.01 29,539 0 11,404 40,943 2.07 -0.53 30,365 0 10,578 40,943 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 84 City of Clearwater Wedge Capital Mgmt as of 12/31/10 Cash & Equiv $1,283 3.13% Domestic Equity $39,660 96.87% Periods from 2/07 to 12/10 Alpha Beta R-Squared 0.62 0.97 0.97 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 w 1 T Annualized Standard Deviation% w Wedge Capital Mgmt 1 R Mid Cap V T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 2.07 -0.53 1.69 24.22 24.80 0.61 0.02 -0.09 0.00 0.46 Asset Allocation ($000) Risk/Return Analysis 85 City of Clearwater Midcap Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low w Wedge Capital Mgmt Net Ret Rank 1 R Mid Cap V Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years 16.39 14.97 13.77 12.82 9.03 13.29 70 12.24 80 32.41 25.76 24.29 21.45 14.39 23.30 58 24.76 36 45.52 33.15 29.24 26.21 18.27 30.68 36 29.40 47 7.58 4.80 2.91 1.65 -1.94 3.60 37 1.01 79 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% w 1 w 1 w 1 w 1 86 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 Mgmt Net Ret Rank 1 R Mid Cap V Net Ret Rank 201020092008 32.41 25.76 24.29 21.45 14.39 23.30 58 24.76 36 63.14 45.34 34.08 28.00 16.38 38.51 33 34.20 47 -26.24 -31.89 -34.45 -37.68 -51.14 -34.89 59 -38.45 81 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% w 1 w 1 w 1 87 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low w Wedge Capital Mgmt Return Rank 1 R Mid Cap V Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 3.60 18 1.01 36 3.01 -2.49 -5.39 -7.20 -10.66 -2.50 25 -4.78 44 1.76 -5.52 -8.51 -10.35 -14.70 -6.09 29 -9.44 60 4.85 -0.34 -3.21 -5.12 -9.86 -2.95 47 -5.23 75 3.27 -1.74 -4.57 -6.45 -11.31 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% w 1 w 1 w 1 w 1 Wedge Capital Mgmt Value Added Analysis - Net of Fee 6/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 1.1 0.6 0.4 -0.1 1.1 3.6 1.1 -1.0 3.9 -1.7 2.1 -3.7 5.0 -3.1 0.9 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R Mid Cap V 88 City of Clearwater Return vs Risk Total Returns of Midcap Value Portfolios Annualized Rate of Return 16.018.621.223.826.429.031.634.236.839.442.0 -6.0 -4.2 -2.3 -0.5 1.2 3.0 4.8 6.6 8.4 10.2 12.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized ReturnStandard Deviation ValueRankValueRank w Wedge Capital Mgmt 1 R Mid Cap V Median 3.603729.9972 1.017930.5688 2.9128.58 89 City of Clearwater Equity Summary Statistics Wedge Capital Mgmt Period Ending 12/10 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 PortfolioR Mid Cap V 37 39,659,956 6,661,862 3,604,061 2.26 19.17 15.49 1.05 1.78 49.66 -0.07 541 7,756,883 3,816,222 1.96 21.35 16.51 1.18 1.51 63.78 -1.88 Ten Largest Holdings Computer Sciences Co Sonoco Prods Co Donnelley R R & Sons Simon Ppty Group Inc Duke Realty Corp. Dover Corp Carlisle Corp Sara Lee Corp Lincoln Natl Corp In Allstate Corp Market Value% of PortfolioQuarterly Ret 1,683,474 1,609,426 1,582,048 1,523,490 1,510,601 1,508,010 1,458,458 1,390,294 1,385,216 1,342,148 4.25 4.06 3.99 3.85 3.81 3.81 3.68 3.51 3.50 3.39 8.27 1.57 4.51 8.13 9.06 12.50 33.32 31.37 16.31 1.74 Ten Best Performers Beckman Coulter Inc United Rentals Inc Borg-Warner Automoti Carlisle Corp Sara Lee Corp Steelcase Inc Convergys Corp Qep Res Inc Werner Enterprises I Endurance Specialty Quarterly Ret 54.74 53.30 37.51 33.32 31.37 28.00 26.03 20.54 19.00 16.39 Ten Worst Performers Sonoco Prods Co Pinnacle West Cap Co Allstate Corp Comtech Telecommunic Bemis Inc Donnelley R R & Sons Aptargroup Inc Arch Cap Group Ltd Energen Corp Bank Hawaii Corp Quarterly Ret 1.57 1.72 1.74 2.22 3.65 4.51 4.58 5.07 5.85 6.17 90 City of Clearwater Equity Contribution to Return Wedge Capital Mgmt Period Ending 12/10 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 PortfolioR Mid Cap V 37 39,659,956 6,661,862 3,604,061 2.26 19.17 15.49 1.05 1.78 49.66 -0.07 541 7,756,883 3,816,222 1.96 21.35 16.51 1.18 1.51 63.78 -1.88 Ten Best Contributors Beckman Coulter Inc Borg-Warner Automoti Carlisle Corp Sara Lee Corp United Rentals Inc Steelcase Inc Convergys Corp Lincoln Natl Corp In Werner Enterprises I Transdigm Group Inc Market Value% of PortfolioQuarterly Ret 1,243,025 1,316,952 1,458,458 1,390,294 802,597 1,085,539 941,655 1,385,216 1,087,399 1,222,370 3.14 3.32 3.68 3.51 2.03 2.74 2.38 3.50 2.74 3.09 54.74 37.51 33.32 31.37 53.30 28.00 26.03 16.31 19.00 16.05 Ten Worst Contributors Comtech Telecommunic Pinnacle West Cap Co Allstate Corp Sonoco Prods Co Teradata Corp Del Aptargroup Inc Wyndham Worldwide Co Phh Corp Arch Cap Group Ltd Bemis Inc Market Value% of PortfolioQuarterly Ret 524,097 1,222,775 1,342,148 1,609,426 399,252 803,933 392,476 391,235 792,450 1,172,494 1.32 3.09 3.39 4.06 1.01 2.03 0.99 0.99 2.00 2.96 2.22 1.72 1.74 1.57 6.74 4.58 9.52 9.92 5.07 3.65 91 City of Clearwater Equity Sector Attribution Analysis Wedge Capital Mgmt Quarter Ending 12/10 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 1.98 9.92 21.32 9.79 5.42 3.15 25.86 12.31 0.00 10.25 100.00 10.29 5.17 10.24 10.79 6.93 5.25 29.87 6.42 2.12 12.92 100.00 20.54 2.94 22.16 17.15 20.69 54.74 9.03 11.25 4.60 14.14 24.01 16.08 15.98 12.90 8.86 13.29 10.13 11.61 17.90 3.35 12.23 -0.07 -1.30 1.32 0.42 0.64 1.31 -0.29 -0.04 0.00 0.13 2.11 -0.98 0.18 0.42 -0.01 0.05 -0.02 0.08 -0.04 -0.12 0.24 -0.19 -1.05 -1.12 1.73 0.41 0.69 1.28 -0.20 -0.08 -0.12 0.37 1.92 Index - R Mid Cap V 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 -0.21% [ Actual Return 13.93% ] - [ Buy Hold Return 14.14% ] 92 City of Clearwater Equity Sector Attribution Chart Wedge Capital Mgmt Quarter Ending 12/10 % Allocation Energy 1.98 10.29 Materials 9.92 5.17 Industrials 21.32 10.24 Con. Discretionary 9.79 10.79 Consumer Staples 5.42 6.93 Health Care 3.15 5.25 Financials 25.86 29.87 Infomation Tech. 12.31 6.42 Telecom. Services 0.00 2.12 Utilities 10.25 12.92 Wedge Capital MgmtR Mid Cap V % Return 20.54 24.01 2.94 16.08 22.16 15.98 17.15 12.90 20.69 8.86 54.74 13.29 9.03 10.13 11.25 11.61 17.90 4.60 3.35 % Variance -1.05 -1.12 1.73 0.41 0.69 1.28 -0.20 -0.08 -0.12 0.37 93 City of Clearwater Small Cap Equity Comp as of 12/31/10 Cepheid Inc Gentex Corp National Instrs Corp Rollins Inc Lkq Corp Chemed Corp New Ultimate Software Gr Power Integrations I Neogen Corp Ansys Inc GICS Sector% Port Health Care Consumer Discretionary Information Technology Industrials Consumer Discretionary Health Care Information Technology Information Technology Health Care Information Technology 2.17 2.01 1.97 1.88 1.87 1.72 1.63 1.48 1.38 1.36 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 3.74 3.41 18.45 13.25 4.12 17.15 14.15 25.35 0.00 0.38 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Small Cap Equity CompR2000 Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Small Cap Equity Comp R2000 Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 16.53 16.25 36,534 -2 6,039 42,571 29.27 26.85 70,138 -39,003 11,435 42,571 29.27 26.85 70,138 -39,003 11,435 42,571 1.93 2.22 76,717 -39,003 4,856 42,571 5.13 4.47 56,654 -39,003 24,919 42,571 7.83 7.77 29,988 -39,003 51,585 42,571 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 94 City of Clearwater Small Cap Equity Comp as of 12/31/10 Cash & Equiv $1,151 2.70% Domestic Equity $41,419 97.30% Periods from 8/03 to 12/10 Alpha Beta R-Squared 0.18 0.91 0.95 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 8.0 S1 T Annualized Standard Deviation% S Small Cap Equity Comp 1 R2000 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 7.83 7.77 2.30 20.11 20.68 0.57 0.28 0.26 0.00 -0.02 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 95 City of Clearwater Small Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low S Small Cap Equity Comp Net Ret Rank 1 R2000 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 19.19 17.14 15.59 14.44 12.26 16.53 29 16.25 35 32.78 28.80 26.73 24.07 17.69 29.27 21 26.85 48 40.26 32.37 28.49 25.87 21.63 31.37 34 27.02 65 8.46 6.27 3.69 2.09 -0.85 1.93 80 2.22 72 7.15 4.28 2.91 1.24 -1.00 2.27 61 1.27 74 9.99 7.17 5.70 4.68 2.46 5.13 59 4.47 79 9.84 7.48 6.17 5.15 3.62 5.47 63 4.49 90 10.36 9.41 7.91 7.27 5.37 6.87 78 6.36 91 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% S1 S 1 S 1 S1 S1 S1 S 1 S1 96 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 Comp Net Ret Rank 1 R2000 Net Ret Rank 2010200920082007200620052004 32.78 28.80 26.73 24.07 17.69 29.27 21 26.85 48 52.91 37.35 30.06 26.61 18.82 33.51 38 27.19 68 -22.15 -29.40 -33.10 -36.70 -44.05 -38.63 84 -33.80 59 11.23 3.52 -0.17 -3.12 -8.12 3.27 28 -1.55 59 22.94 19.63 17.30 15.59 12.80 17.40 48 18.35 38 12.47 10.49 8.84 6.13 3.50 7.21 71 4.56 88 25.69 22.55 20.82 18.65 15.58 15.69 93 18.32 79 -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 97 City of Clearwater Return vs Risk Total Returns of Small Neutral Portfolios Annualized Rate of Return 18.020.222.424.626.829.031.233.435.637.840.0 -3.0 -1.6 -0.2 1.1 2.6 4.0 5.4 6.8 8.2 9.5 10.9 S 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank S Small Cap Equity Comp 1 R2000 Median 1.938028.2339 2.227229.2958 3.6929.06 Annualized Rate of Return 16.017.519.020.522.023.525.026.528.029.531.0 1.0 1.9 2.8 3.7 4.6 5.5 6.4 7.3 8.2 9.0 9.9 S 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank S Small Cap Equity Comp 1 R2000 Median 5.135922.5040 4.477923.7462 5.7023.19 98 City of Clearwater Riverbridge Partners as of 12/31/10 Cepheid Inc Gentex Corp Rollins Inc Chemed Corp New Ultimate Software Gr National Instrs Corp Neogen Corp Mednax Inc Semtech Corp Ritchie Bros Auction GICS Sector% Port Health Care Consumer Discretionary Industrials Health Care Information Technology Information Technology Health Care Health Care Information Technology Industrials 4.73 4.37 4.10 3.74 3.54 3.52 3.01 2.93 2.90 2.87 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 0.00 0.67 17.36 13.04 3.31 26.79 2.85 35.98 0.00 0.00 -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 9/30/10 Riverbridge PartnersR2000G Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/10 Riverbridge Partners R2000G Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 16.39 17.11 16,876 0 2,765 19,642 16.39 17.11 16,876 0 2,765 19,642 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 99 City of Clearwater Riverbridge Partners as of 12/31/10 Cash & Equiv $593 3.02% Domestic Equity $19,049 96.98% Periods from 9/10 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -1.00.01.02.03.04.05.06.07.08.09.010.011.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 R1 T Annualized Standard Deviation% R Riverbridge Partners 1 R2000G T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 16.39 17.11 0.04 10.44 6.52 0.03 1.57 2.62 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 100 City of Clearwater Small Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low R Riverbridge Partners Return Rank 1 R2000G Return Rank Last Qtr 24.76 17.75 16.49 15.11 12.72 16.39 51 17.11 38 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% R 1 101 City of Clearwater Equity Summary Statistics Riverbridge Partners Period Ending 12/10 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 PortfolioR2000G 54 19,048,865 1,631,229 893,426 0.38 35.12 26.91 1.01 3.41 12.39 4.73 1,269 1,381,587 563,145 0.47 40.18 16.43 1.27 3.41 18.36 3.75 Ten Largest Holdings Cepheid Inc Gentex Corp Rollins Inc Chemed Corp New Ultimate Software Gr National Instrs Corp Neogen Corp Mednax Inc Semtech Corp Ritchie Bros Auction Market Value% of PortfolioQuarterly Ret 900,104 831,671 780,461 712,265 674,498 670,933 572,984 558,171 553,322 546,423 4.73 4.37 4.10 3.74 3.54 3.52 3.01 2.93 2.90 2.87 21.59 52.36 27.14 11.74 25.85 15.67 21.21 26.25 12.13 11.57 Ten Best Performers Dynamex Inc Gentex Corp Faro Technologies In Financial Engines In Constant Contact Inc Ipc the Hospitalist Resources Connection Cabot Microelectroni Mobile Mini Rollins Inc Quarterly Ret 62.36 52.36 50.57 49.32 44.61 42.79 35.42 28.81 28.36 27.14 Ten Worst Performers Enernoc Inc Capella Education Co Grand Canyon Ed Inc Napco Sec Sys Inc Echo Global Logistic Landec Corp Innerworkings Inc Angiodynamics Inc Allscripts Healthcar Concur Technologies Quarterly Ret -23.88 -14.22 -10.67 -8.21 -5.72 -3.70 -0.30 0.85 4.33 5.04 102 City of Clearwater Equity Contribution to Return Riverbridge Partners Period Ending 12/10 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 19,048,865 1,631,229 893,426 0.38 35.12 26.91 1.01 3.41 12.39 4.73 1,269 1,381,587 563,145 0.47 40.18 16.43 1.27 3.41 18.36 3.75 Ten Best Contributors Gentex Corp Rollins Inc Cepheid Inc Ultimate Software Gr Mednax Inc Resources Connection Ipc the Hospitalist Faro Technologies In Neogen Corp Power Integrations I Market Value% of PortfolioQuarterly Ret 831,671 780,461 900,104 674,498 558,171 374,774 308,569 242,688 572,984 442,343 4.37 4.10 4.73 3.54 2.93 1.97 1.62 1.27 3.01 2.32 52.36 27.14 21.59 25.85 26.25 35.42 42.79 50.57 21.21 26.42 Ten Worst Contributors Enernoc Inc Capella Education Co Grand Canyon Ed Inc Echo Global Logistic Landec Corp Napco Sec Sys Inc Innerworkings Inc Angiodynamics Inc Usana Inc Financial Engines In Market Value% of PortfolioQuarterly Ret 187,574 262,325 260,821 82,390 127,135 21,811 199,906 363,654 123,833 20,504 0.98 1.38 1.37 0.43 0.67 0.11 1.05 1.91 0.65 0.11 -23.88 -14.22 -10.67 -5.72 -3.70 -8.21 -0.30 0.85 7.66 49.32 103 City of Clearwater Equity Sector Attribution Analysis Riverbridge Partners Quarter Ending 12/10 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 1.69 16.06 11.34 3.52 26.76 2.75 37.89 0.00 0.00 100.00 4.18 4.89 17.19 17.34 3.10 19.58 4.97 27.38 1.30 0.07 100.00 8.04 18.26 20.28 10.07 15.31 16.32 18.93 17.44 35.65 16.84 19.27 14.39 14.81 12.42 16.41 18.10 13.23 6.27 16.96 0.00 -0.15 -0.16 0.67 -0.17 0.77 -0.00 0.32 0.00 0.00 1.28 -0.78 0.00 -0.03 0.15 -0.01 -0.33 0.01 0.12 0.05 0.01 -0.80 -0.78 -0.14 -0.19 0.82 -0.18 0.45 0.01 0.44 0.05 0.01 0.48 Index - R2000G 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 -0.35% [ Actual Return 17.09% ] - [ Buy Hold Return 17.44% ] 104 City of Clearwater Equity Sector Attribution Chart Riverbridge Partners Quarter Ending 12/10 % Allocation Energy 0.00 4.18 Materials 1.69 4.89 Industrials 16.06 17.19 Con. Discretionary 11.34 17.34 Consumer Staples 3.52 3.10 Health Care 26.76 19.58 Financials 2.75 4.97 Infomation Tech. 37.89 27.38 Telecom. Services 0.00 1.30 Utilities 0.00 0.07 Riverbridge PartnersR2000G % Return 35.65 8.04 16.84 18.26 19.27 20.28 14.39 10.07 14.81 15.31 12.42 16.32 16.41 18.93 18.10 13.23 6.27 % Variance -0.78 -0.14 -0.19 0.82 -0.18 0.45 0.01 0.44 0.05 0.01 105 City of Clearwater Atlanta Capital Mgmt as of 12/31/10 Morningstar Inc Dril-Quip Inc Forest City Enterpri Affiliated Managers Kirby Expl Co. Bio Rad Labs Inc Henry Jack & Assoc I Lkq Corp Blackbaud Inc Aptargroup Inc GICS Sector% Port Consumer Discretionary Energy Financials Financials Industrials Health Care Information Technology Consumer Discretionary Information Technology Materials 3.91 3.44 3.33 3.30 3.02 2.83 2.49 2.47 2.42 2.36 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 3.44 3.50 23.38 17.35 6.52 9.87 17.86 18.07 0.00 0.00 -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 24.0 26.0 28.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Atlanta Capital MgmtR2000V Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Atlanta Capital Mgmt R2000V Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 14.70 15.36 10,038 0 1,475 11,514 25.98 24.51 18,632 -10,000 2,882 11,514 25.98 24.51 18,632 -10,000 2,882 11,514 8.75 2.19 18,250 -10,000 3,264 11,514 9.83 3.52 28,479 -10,000 -6,966 11,514 11.08 7.93 14,990 -10,000 6,524 11,514 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 106 City of Clearwater Atlanta Capital Mgmt as of 12/31/10 Cash & Equiv $382 3.31% Domestic Equity $11,132 96.69% Periods from 8/03 to 12/10 Alpha Beta R-Squared 1.15 0.70 0.92 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 11.0 12.0 t 1 T Annualized Standard Deviation% t Atlanta Capital Mgmt 1 R2000V T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 11.08 7.93 2.30 17.71 20.82 0.57 0.50 0.27 0.00 0.24 Asset Allocation ($000) Risk/Return Analysis 107 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low t Atlanta Capital Mgmt Net Ret Rank 1 R2000V 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 19.20 17.64 15.61 14.28 12.69 14.70 68 15.36 58 33.44 30.90 28.08 24.15 21.47 25.98 65 24.51 71 36.94 32.25 27.54 24.53 16.81 26.40 62 22.52 91 8.99 7.13 3.53 2.36 -0.98 8.75 5 2.19 78 6.61 4.71 1.52 -0.03 -2.51 8.28 1 -0.95 90 9.48 7.74 5.61 4.03 1.37 9.83 1 3.52 85 9.01 7.48 6.08 4.51 3.00 9.22 1 3.71 92 10.91 9.23 8.39 7.16 5.90 10.73 10 6.18 89 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% t1 t1 t 1 t 1 t 1 t 1 t 1 t 1 108 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 Mgmt Net Ret Rank 1 R2000V Net Ret Rank 2010200920082007200620052004 33.44 30.90 28.08 24.15 21.47 25.98 65 24.51 71 53.30 35.72 26.24 23.62 18.36 26.83 47 20.57 93 -23.21 -28.67 -30.43 -33.57 -38.47 -19.52 1 -28.92 28 7.22 -1.48 -5.10 -9.60 -11.83 6.91 6 -9.77 76 29.98 21.78 19.37 17.06 11.45 16.22 80 23.48 12 11.55 8.27 7.05 4.76 2.33 6.23 58 4.70 75 28.23 26.31 23.25 19.26 17.23 20.24 66 22.25 54 -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% t 1 t 1 t 1 t 1 t 1 t 1 t 1 109 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low t Atlanta Capital Mgmt Return Rank 1 R2000V Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 8.75 3 2.19 29 3.01 -2.49 -5.39 -7.20 -10.66 2.96 5 -4.99 46 1.76 -5.52 -8.51 -10.35 -14.70 0.55 6 -9.85 70 4.85 -0.34 -3.21 -5.12 -9.86 4.59 5 -5.71 79 3.27 -1.74 -4.57 -6.45 -11.31 2.96 5 -8.22 85 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% t 1t 1 t 1 t 1 t 1 Atlanta Capital Mgmt Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% -2.8 0.1 -0.8 -2.5 0.8 1.5 10.3 5.0 1.7 1.5 -1.2 11.010.9 0.0 -6.0 0.9 -2.6 3.2 1.2 -0.6 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R2000V 110 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios Annualized Rate of Return 18.020.422.825.227.630.032.434.837.239.642.0 -6.0 -4.2 -2.3 -0.5 1.2 3.0 4.8 6.6 8.4 10.2 12.0 t 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank t Atlanta Capital Mgmt 1 R2000V Median 8.75522.391 2.197829.8447 3.5330.04 Annualized Rate of Return 16.017.819.621.423.225.026.828.630.432.234.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 t 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank t Atlanta Capital Mgmt 1 R2000V Median 9.83117.831 3.528524.3141 5.6124.76 111 City of Clearwater Equity Summary Statistics Atlanta Capital Mgmt Period Ending 12/10 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 PortfolioR2000V 64 11,132,152 2,036,314 1,613,617 0.86 25.60 23.01 1.09 2.83 20.42 5.22 1,296 1,128,565 475,760 1.79 37.66 14.74 1.24 1.36 45.21 -2.48 Ten Largest Holdings Morningstar Inc Dril-Quip Inc Forest City Enterpri Affiliated Managers Kirby Expl Co. Bio Rad Labs Inc Henry Jack & Assoc I Lkq Corp Blackbaud Inc Aptargroup Inc Market Value% of PortfolioQuarterly Ret 434,725 383,160 370,017 367,114 336,102 314,666 276,925 274,912 269,619 262,586 3.91 3.44 3.33 3.30 3.02 2.83 2.49 2.47 2.42 2.36 19.23 25.13 30.09 27.19 9.96 14.74 14.71 9.23 8.21 4.58 Ten Best Performers Daktronics Inc Hibbett Sports Inc Pinnacle Finl Partne Rofin Sinar Technolo Carlisle Corp Acuity Brands Inc Forest City Enterpri Diamond Foods Inc Sally Beauty Hldgs I Hittite Microwave Co Quarterly Ret 62.12 47.90 47.77 39.64 33.32 30.70 30.09 29.88 29.73 28.10 Ten Worst Performers Fair Isaac Corp Landauer Inc Jones Lang Lasalle I Caseys Gen Stores Knight Transn Inc Westamerica Bancorp Manhattan Assocs Inc Owens & Minor Inc Ne Aptargroup Inc Choice Hotels Intl I Quarterly Ret -5.15 -3.45 -2.61 2.16 2.46 2.52 4.05 4.06 4.58 5.47 112 City of Clearwater Equity Contribution to Return Atlanta Capital Mgmt Period Ending 12/10 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 PortfolioR2000V 64 11,132,152 2,036,314 1,613,617 0.86 25.60 23.01 1.09 2.83 20.42 5.22 1,296 1,128,565 475,760 1.79 37.66 14.74 1.24 1.36 45.21 -2.48 Ten Best Contributors Forest City Enterpri Affiliated Managers Dril-Quip Inc Daktronics Inc Morningstar Inc Hibbett Sports Inc Pinnacle Finl Partne Rofin Sinar Technolo Acuity Brands Inc Diamond Foods Inc Market Value% of PortfolioQuarterly Ret 370,017 367,114 383,160 146,464 434,725 146,493 141,232 157,921 201,845 202,084 3.33 3.30 3.44 1.32 3.91 1.32 1.27 1.42 1.81 1.82 30.09 27.19 25.13 62.12 19.23 47.90 47.77 39.64 30.70 29.88 Ten Worst Contributors Fair Isaac Corp Jones Lang Lasalle I Landauer Inc McGrath Rentcorp Caseys Gen Stores Knight Transn Inc Westamerica Bancorp Pss World Med Inc Owens & Minor Inc Ne Ruddick Corp Market Value% of PortfolioQuarterly Ret 182,286 226,584 95,952 13,110 116,477 140,600 144,777 111,870 161,865 103,520 1.64 2.04 0.86 0.12 1.05 1.26 1.30 1.01 1.45 0.93 -5.15 -2.61 -3.45 10.45 2.16 2.46 2.52 5.71 4.06 6.59 113 City of Clearwater Equity Sector Attribution Analysis Atlanta Capital Mgmt Quarter Ending 12/10 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 3.16 3.98 24.00 18.06 4.48 9.26 18.23 18.83 0.00 0.00 100.00 7.01 5.75 13.74 9.62 3.06 5.98 37.89 9.57 0.65 6.73 100.00 25.13 6.22 13.69 15.14 19.19 8.24 16.54 16.09 14.73 26.22 25.33 20.69 16.82 6.03 10.41 12.56 15.53 12.63 6.14 15.30 -0.03 -0.76 -1.68 -0.30 0.59 -0.20 0.72 0.11 0.00 0.00 -1.56 -0.42 -0.18 0.55 0.13 -0.13 -0.16 0.54 0.02 0.02 0.62 0.98 -0.45 -0.94 -1.13 -0.18 0.46 -0.36 1.26 0.13 0.02 0.62 -0.58 Index - R2000V 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 0.46% [ Actual Return 15.19% ] - [ Buy Hold Return 14.73% ] 114 City of Clearwater Equity Sector Attribution Chart Atlanta Capital Mgmt Quarter Ending 12/10 % Allocation Energy 3.16 7.01 Materials 3.98 5.75 Industrials 24.00 13.74 Con. Discretionary 18.06 9.62 Consumer Staples 4.48 3.06 Health Care 9.26 5.98 Financials 18.23 37.89 Infomation Tech. 18.83 9.57 Telecom. Services 0.00 0.65 Utilities 0.00 6.73 Atlanta Capital MgmtR2000V % Return 25.13 26.22 6.22 25.33 13.69 20.69 15.14 16.82 19.19 6.03 8.24 10.41 16.54 12.56 16.09 15.53 12.63 6.14 % Variance -0.45 -0.94 -1.13 -0.18 0.46 -0.36 1.26 0.13 0.02 0.62 115 City of Clearwater Systematic Financial Mgt as of 12/31/10 Cbl & Assoc Pptys In Dupont Fabros Techno Webster Finl Corp Co Fpic Ins Group Inc Wabash Natl Corp Polyone Corp International Coal G Health Mgmt Assoc In Complete Production Carrizo Oil & Co Inc GICS Sector% Port Financials Financials Financials Financials Industrials Materials Energy Health Care Energy Energy 2.79 2.39 2.35 2.29 2.15 2.11 2.01 1.99 1.95 1.78 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 10.38 7.99 15.42 9.54 3.11 8.01 29.62 14.52 0.00 1.42 -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 8/31/03 Systematic Financial MgtR2000V Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 8/31/03 Systematic Financial Mgt R2000V Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 18.74 15.36 9,614 0 1,801 11,416 35.50 24.51 14,063 -6,000 3,353 11,416 35.50 24.51 14,063 -6,000 3,353 11,416 2.93 2.19 17,474 -6,000 -59 11,416 5.38 3.52 28,180 -6,000 -10,765 11,416 8.03 7.93 15,001 -6,000 2,414 11,416 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 116 City of Clearwater Systematic Financial Mgt as of 12/31/10 Cash & Equiv $177 1.55% Domestic Equity $11,238 98.45% Periods from 8/03 to 12/10 Alpha Beta R-Squared 0.22 0.98 0.82 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 7.0 7.5 8.0 8.5 s1 T Annualized Standard Deviation% s Systematic Financial Mgt 1 R2000V T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 8.03 7.93 2.30 21.83 20.82 0.57 0.26 0.27 0.00 0.03 Asset Allocation ($000) Risk/Return Analysis 117 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low s Systematic Financial Mgt Net Ret Rank 1 R2000V 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 19.20 17.64 15.61 14.28 12.69 18.74 16 15.36 58 33.44 30.90 28.08 24.15 21.47 35.50 1 24.51 71 36.94 32.25 27.54 24.53 16.81 35.61 9 22.52 91 8.99 7.13 3.53 2.36 -0.98 2.93 63 2.19 78 6.61 4.71 1.52 -0.03 -2.51 2.31 45 -0.95 90 9.48 7.74 5.61 4.03 1.37 5.38 54 3.52 85 9.01 7.48 6.08 4.51 3.00 5.86 56 3.71 92 10.91 9.23 8.39 7.16 5.90 6.64 89 6.18 89 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% s 1 s 1 s 1 s1 s 1 s 1 s 1 s1 118 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 Mgt Net Ret Rank 1 R2000V Net Ret Rank 2010200920082007200620052004 33.44 30.90 28.08 24.15 21.47 35.50 1 24.51 71 53.30 35.72 26.24 23.62 18.36 35.72 25 20.57 93 -23.21 -28.67 -30.43 -33.57 -38.47 -40.71 98 -28.92 28 7.22 -1.48 -5.10 -9.60 -11.83 0.49 21 -9.77 76 29.98 21.78 19.37 17.06 11.45 18.61 63 23.48 12 11.55 8.27 7.05 4.76 2.33 8.27 27 4.70 75 28.23 26.31 23.25 19.26 17.23 11.42 100 22.25 54 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% s 1 s 1 s 1 s 1 s 1 s1 s 1 119 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low s Systematic Financial Mgt Return Rank 1 R2000V Return Rank 12/10 9/10 6/10 3/10 12/09 7.97 2.64 -0.85 -2.88 -5.99 2.93 23 2.19 29 3.01 -2.49 -5.39 -7.20 -10.66 -5.41 50 -4.99 46 1.76 -5.52 -8.51 -10.35 -14.70 -10.45 75 -9.85 70 4.85 -0.34 -3.21 -5.12 -9.86 -4.70 71 -5.71 79 3.27 -1.74 -4.57 -6.45 -11.31 -6.83 77 -8.22 85 -16% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% s1 s 1 s 1 s 1 s 1 Systematic Financial Mgt Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 0.0 -0.2 -1.6 -2.2 3.9 4.5 3.2 -0.6 -6.0 8.3 -17.8 -0.3 9.1 0.4 2.2 0.6 2.6 -0.8 3.9 2.9 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R2000V 120 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios Annualized Rate of Return 18.020.422.825.227.630.032.434.837.239.642.0 -4.0 -2.5 -1.0 0.5 2.0 3.5 5.0 6.5 8.0 9.5 11.0 s 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank s Systematic Financial Mgt 1 R2000V Median 2.936332.6783 2.197829.8447 3.5330.04 Annualized Rate of Return 16.017.819.621.423.225.026.828.630.432.234.0 1.0 1.9 2.8 3.7 4.6 5.5 6.4 7.3 8.2 9.0 9.9 s 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank s Systematic Financial Mgt 1 R2000V Median 5.385426.2676 3.528524.3141 5.6124.76 121 City of Clearwater Equity Summary Statistics Systematic Financial Mgt Period Ending 12/10 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 PortfolioR2000V 108 11,238,381 1,421,434 1,153,124 0.73 40.43 13.77 1.62 1.82 42.38 -7.25 1,296 1,128,565 475,760 1.79 37.66 14.74 1.24 1.36 45.21 -2.48 Ten Largest Holdings Cbl & Assoc Pptys In Dupont Fabros Techno Webster Finl Corp Co Fpic Ins Group Inc Wabash Natl Corp Polyone Corp International Coal G Health Mgmt Assoc In Complete Production Carrizo Oil & Co Inc Market Value% of PortfolioQuarterly Ret 313,250 268,002 263,980 256,872 241,740 237,310 225,234 223,236 218,670 200,042 2.79 2.39 2.35 2.29 2.15 2.11 2.01 1.99 1.95 1.78 35.52 -14.94 12.25 5.33 46.48 3.31 45.49 24.54 44.50 44.07 Ten Best Performers Kodiak Oil & Gas Cor Axcelis Technologies Noranda Alum Hldg Co Lo-Jack Corp FSI Int Inc Sfn Group Inc Abraxas Pete Corp Rosetta Resources In Entegris Inc United Rentals Inc Quarterly Ret 94.69 79.27 77.62 69.11 66.17 62.40 60.92 60.24 59.96 53.30 Ten Worst Performers Cole Kenneth Prodtns Dupont Fabros Techno Black Hills Pwr & Lt Smith A O Corp ’b’ Medicines Co Magellan Health Svcs Health Net Inc. Radian Group Inc Polyone Corp Fpic Ins Group Inc Quarterly Ret -25.07 -14.94 -2.68 -0.96 -0.49 0.08 0.37 3.23 3.31 5.33 122 City of Clearwater Equity Contribution to Return Systematic Financial Mgt Period Ending 12/10 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 PortfolioR2000V 108 11,238,381 1,421,434 1,153,124 0.73 40.43 13.77 1.62 1.82 42.38 -7.25 1,296 1,128,565 475,760 1.79 37.66 14.74 1.24 1.36 45.21 -2.48 Ten Best Contributors Wabash Natl Corp Cbl & Assoc Pptys In International Coal G Complete Production Carrizo Oil & Co Inc Noranda Alum Hldg Co Sfn Group Inc United Rentals Inc Dana Holding Corp Rosetta Resources In Market Value% of PortfolioQuarterly Ret 241,740 313,250 225,234 218,670 200,042 111,690 128,832 129,675 163,495 104,451 2.15 2.79 2.01 1.95 1.78 0.99 1.15 1.15 1.46 0.93 46.48 35.52 45.49 44.50 44.07 77.62 62.40 53.30 39.69 60.24 Ten Worst Contributors Dupont Fabros Techno Cole Kenneth Prodtns Black Hills Pwr & Lt Smith A O Corp ’b’ Medicines Co Campus Crest Cmntys Magellan Health Svcs Health Net Inc. Dime Cmnty Bancorp I Radian Group Inc Market Value% of PortfolioQuarterly Ret 268,002 28,727 159,000 114,240 60,759 119,170 127,656 158,282 40,852 81,507 2.39 0.26 1.42 1.02 0.54 1.06 1.14 1.41 0.36 0.73 -14.94 -25.07 -2.68 -0.96 -0.49 0.08 0.37 6.31 3.23 123 City of Clearwater Equity Sector Attribution Analysis Systematic Financial Mgt Quarter Ending 12/10 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 7.61 9.77 13.39 10.59 4.13 5.96 31.62 14.46 0.65 1.81 100.00 7.01 5.75 13.74 9.62 3.06 5.98 37.89 9.57 0.65 6.73 100.00 46.43 17.43 25.20 12.82 9.19 12.72 11.23 22.51 20.75 3.27 18.11 26.22 25.33 20.69 16.82 6.03 10.41 12.56 15.53 12.63 6.14 15.30 1.54 -0.77 0.60 -0.42 0.13 0.14 -0.42 1.01 0.05 -0.05 1.80 0.07 0.40 -0.02 0.01 -0.10 0.00 0.17 0.01 0.00 0.45 1.00 1.61 -0.37 0.59 -0.41 0.03 0.14 -0.25 1.02 0.05 0.40 2.80 Index - R2000V 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 1.08% [ Actual Return 19.19% ] - [ Buy Hold Return 18.11% ] 124 City of Clearwater Equity Sector Attribution Chart Systematic Financial Mgt Quarter Ending 12/10 % Allocation Energy 7.61 7.01 Materials 9.77 5.75 Industrials 13.39 13.74 Con. Discretionary 10.59 9.62 Consumer Staples 4.13 3.06 Health Care 5.96 5.98 Financials 31.62 37.89 Infomation Tech. 14.46 9.57 Telecom. Services 0.65 0.65 Utilities 1.81 6.73 Systematic Financial MgtR2000V % Return 46.43 26.22 17.43 25.33 25.20 20.69 12.82 16.82 9.19 6.03 12.72 10.41 11.23 12.56 22.51 15.53 20.75 12.63 3.27 6.14 % Variance 1.61 -0.37 0.59 -0.41 0.03 0.14 -0.25 1.02 0.05 0.40 125 126 City of Clearwater International EQ Comp as of 12/31/10 Bhp Billiton Ltd Rio Tinto Plc Potash Corp Sask Inc Schlumberger Ltd Core Laboratories N Arm Hldgs Plc Transocean Ltd Zug Noble Corporation Ba Weatherford Internat Vale S A GICS Sector% Port Materials Materials Materials Energy Energy Information Technology Energy Energy Energy Materials 4.84 3.36 2.94 2.64 2.55 2.51 2.49 2.38 2.29 2.16 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 22.41 22.33 14.32 1.99 7.77 6.87 18.66 3.32 2.33 0.00 -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 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 5/31/01 International EQ CompMSCI EAFE Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 5/31/01 International EQ Comp MSCI EAFE Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 9.08 6.65 110,792 -2 10,059 120,850 18.37 8.21 102,105 -163 18,908 120,850 18.37 8.21 102,105 -163 18,908 120,850 -0.90 -6.55 109,243 -163 11,770 120,850 6.63 2.94 54,427 -163 66,586 120,850 6.87 5.36 20,000 -163 101,013 120,850 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 127 City of Clearwater International EQ Comp as of 12/31/10 Cash & Equiv $4,606 3.81% Intl Equity $87,442 72.36% Domestic Equity $28,801 23.83% Periods from 5/01 to 12/10 Alpha Beta R-Squared 0.37 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 7.0 I 1 T Annualized Standard Deviation% I International EQ Comp 1 MSCI EAFE T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 6.87 5.36 2.24 19.05 18.57 0.51 0.24 0.17 0.00 0.30 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 128 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low I International EQ Comp Net Ret Rank 1 MSCI EAFE 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 12.54 8.44 7.29 5.89 2.40 9.08 17 6.65 64 24.78 17.02 11.98 8.45 2.37 18.37 20 8.21 76 46.65 29.55 23.74 19.40 11.07 36.73 14 19.72 71 3.86 -1.42 -3.87 -6.88 -10.43 -0.90 21 -6.55 70 10.61 2.85 0.11 -2.37 -4.68 1.95 34 -2.30 72 14.64 7.54 4.92 2.84 1.06 6.63 31 2.94 73 17.80 9.19 6.89 4.69 3.13 7.69 46 4.70 74 18.28 11.27 8.91 6.90 5.35 9.06 48 6.85 76 23.67 14.54 12.29 10.65 9.08 11.60 63 10.44 81 21.12 12.47 9.05 7.76 6.14 8.55 58 7.18 83 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% I 1 I 1 I 1 I 1 I 1 I 1 I 1 I 1 I1 I1 129 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 EQ Comp Net Ret Rank 1 MSCI EAFE Net Ret Rank 201020092008200720062005200420032002 24.78 17.02 11.98 8.45 2.37 18.37 20 8.21 76 75.57 42.19 35.69 26.17 9.83 57.93 10 32.46 59 -24.16 -40.27 -43.33 -47.40 -57.57 -47.94 78 -43.06 47 39.16 17.91 11.75 7.70 0.74 11.02 57 11.63 51 35.41 29.44 26.09 22.36 12.12 27.62 37 26.85 41 36.39 20.77 15.15 11.56 6.44 13.15 64 14.01 56 31.43 23.55 19.98 17.16 10.24 17.66 72 20.69 40 57.98 43.10 37.49 32.40 24.03 31.06 81 39.16 40 4.02 -9.37 -14.21 -17.03 -22.65 -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 130 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios Annualized Rate of Return 15.020.025.030.035.040.045.050.0 -12.0 -10.2 -8.4 -6.5 -4.7 -2.9 -1.1 0.6 2.4 4.2 6.0 I 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank I International EQ Comp 1 MSCI EAFE Median -0.902134.5377 -6.557031.0247 -3.8731.36 Annualized Rate of Return 12.014.416.819.221.624.026.428.831.233.636.0 -4.0 -2.2 -0.4 1.3 3.1 5.0 6.8 8.6 10.4 12.2 14.0 I 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank I International EQ Comp 1 MSCI EAFE Median 6.633127.0377 2.947324.6852 4.9224.67 131 City of Clearwater Earnest Partners as of 12/31/10 Arm Hldgs Plc Weichai Power Co Rio Tinto Plc United Industrial Co Schoeller Bleckmann Orient Overseas Int Bhp Billiton Ltd Dnb Nor Asa Is MSCI Eafe Core Laboratories N GICS Sector% Port Information Technology Industrials Materials Financials Energy Industrials Materials Financials Industrials Energy 5.13 4.05 3.22 3.22 3.20 3.18 3.00 2.74 2.72 2.71 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 13.53 12.99 11.24 4.08 1.93 11.26 33.43 6.79 4.76 0.00 -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 4/30/08 Earnest PartnersMSCI EAFE Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Earnest Partners MSCI EAFE Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 6.65 6.65 27,858 -1 1,854 29,711 16.61 8.21 25,484 -4 4,231 29,711 16.61 8.21 25,484 -4 4,231 29,711 0.93 -5.99 29,002 -4 714 29,711 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 132 City of Clearwater Earnest Partners as of 12/31/10 Cash & Equiv $2,126 7.15% Intl Equity $27,586 92.85% Periods from 6/08 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 e 1 T Annualized Standard Deviation% e Earnest Partners 1 MSCI EAFE T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 0.93 -5.99 0.52 29.30 27.50 0.24 0.01 -0.24 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 133 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low e Earnest Partners Net Ret Rank 1 MSCI EAFE Net Ret Rank Last Qtr Last Year Last 2 Years 12.54 8.44 7.29 5.89 2.40 6.65 64 6.65 64 24.78 17.02 11.98 8.45 2.37 16.61 27 8.21 76 46.65 29.55 23.74 19.40 11.07 34.68 16 19.72 71 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% e1 e 1 e 1 134 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 Net Ret Rank 20102009 24.78 17.02 11.98 8.45 2.37 16.61 27 8.21 76 75.57 42.19 35.69 26.17 9.83 55.54 12 32.46 59 0% 10% 20% 30% 40% 50% 60% 70% 80% e 1 e 1 135 City of Clearwater Global Equity Summary Statistics Earnest Partners Period Ending 12/10 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 52 27,585,515 35,296,171 16,639,161 1.75 18.89 17.57 1.05 2.04 100.81 2.40 3.12 969 50,244,792 7,065,051 2.94 19.40 17.50 1.00 1.59 98.09 -2.07 5.34 Ten Largest Holdings Arm Hldgs Plc Weichai Power Co Rio Tinto Plc United Industrial Co Schoeller Bleckmann Orient Overseas Int Bhp Billiton Ltd Dnb Nor Asa Is MSCI Eafe Core Laboratories N Market Value% of PortfolioQuarterly Ret 1,413,075 1,117,330 888,584 888,139 882,606 877,799 826,988 755,241 751,038 748,020 5.13 4.05 3.22 3.22 3.20 3.18 3.00 2.74 2.72 2.71 10.61 16.55 22.02 9.70 32.28 21.65 21.75 3.08 7.00 1.22 Ten Best Performers China Oilfield Servi Ceragon Networks Ltd Schoeller Bleckmann Hitachi Rio Tinto Plc Bhp Billiton Ltd Orient Overseas Int Carnival Corp Norsk Hydro Asa Grupo Elektra(New) Quarterly Ret 38.53 33.27 32.28 22.19 22.02 21.75 21.65 20.97 20.93 20.26 Ten Worst Performers Mindray Medical Intl Getinge Industrier Bnp Paribas Rogers Communication Societe Generale Posco Koninklijke Kpn Nv Mapfre Sa Bancolombia S A Credit Suisse Group Quarterly Ret -10.72 -10.44 -10.32 -6.67 -6.45 -5.52 -5.41 -5.40 -5.15 -5.05 136 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 12/10 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 Finland France Germany Greece Hong Kong India Ireland Isle of Man Israel Italy Japan Kazakhstan Luxembourg Mexico Netherlands New Zealand Norway Panama 8.58 0.32 0.97 0.00 0.00 0.00 0.10 0.00 0.00 0.00 0.00 1.02 1.12 10.14 7.95 0.31 2.67 0.00 0.23 0.08 0.82 2.86 21.14 0.00 0.00 0.00 2.65 0.10 0.81 0.00 8.58 0.32 0.97 0.00 0.00 0.00 0.10 0.00 0.00 0.00 0.00 1.02 1.12 10.14 7.95 0.31 2.67 0.00 0.23 0.08 0.82 2.86 21.14 0.00 0.00 0.00 2.65 0.10 0.81 0.00 4.04 13.73 -2.45 18.35 9.00 7.75 3.62 11.27 -5.62 5.03 8.33 17.74 2.14 -1.64 8.83 4.27 5.39 10.21 10.14 11.76 -4.14 18.19 7.12 5.88 1.83 9.34 -7.26 4.89 6.45 20.89 4.83 -3.35 12.09 2.48 11.93 11.04 2.77 5.51 0.00 0.00 6.64 2.03 0.00 13.27 2.99 0.00 0.77 0.00 0.00 3.79 0.00 0.00 2.84 2.35 2.15 0.00 0.00 0.00 7.04 0.00 0.00 0.94 4.93 0.00 5.91 0.80 0.10 5.36 0.00 0.00 0.00 0.00 0.00 0.00 -0.90 0.00 0.75 0.00 0.00 3.69 0.00 0.00 15.67 0.00 0.00 0.00 0.00 0.00 6.85 0.00 0.00 0.92 1.96 0.00 4.13 0.00 21.66 23.41 1.30 -6.67 11.92 -5.15 12.68 -7.19 21.81 1.58 1.30 8.41 18.37 -0.45 8.34 20.97 21.92 21.28 1.30 -6.67 11.77 -5.15 8.42 -8.79 21.65 1.58 1.30 11.66 20.26 -1.50 10.08 20.97 1.25 -0.62 0.27 0.01 0.17 0.20 1.40 1.14 0.10 -0.03 -0.33 0.01 0.19 0.78 2.37 -0.49 0.02 -0.79 0.49 0.53 -0.41 0.48 -0.15 -0.03 -0.23 -0.11 1.74 -0.08 0.27 0.01 0.17 0.20 0.99 1.14 0.10 0.44 -0.48 0.01 0.19 0.78 2.34 -0.72 0.02 -0.90 Benchmark : MSCI EAFE Index Gross Dividend 137 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 12/10 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 Portugal Scotland Singapore South Korea Spain Sweden Switzerland United Kingdom United States 0.28 0.03 1.70 0.00 3.77 3.18 7.82 21.55 0.00 100.00 0.28 0.03 1.70 0.00 3.77 3.18 7.82 21.55 0.00 100.00 1.11 19.41 3.13 -6.76 7.21 2.77 6.78 5.73 -0.64 18.64 5.89 -8.37 7.33 7.72 6.10 6.70 0.00 0.00 3.18 2.88 1.91 2.13 5.87 16.13 3.15 100.00 0.00 0.00 3.10 0.00 1.86 2.07 2.00 7.14 44.40 99.10 6.84 -2.14 -3.73 -10.54 2.13 11.74 -7.48 6.83 9.70 -2.14 -5.40 -10.44 3.85 10.60 -7.48 6.87 0.07 0.00 -0.33 0.60 0.19 0.45 1.02 7.65 0.12 0.06 -0.38 -0.04 0.80 1.13 0.07 0.00 -0.22 0.66 -0.18 0.41 1.82 8.78 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] 138 City of Clearwater International Equity Sector Attribution Analysis Earnest Partners Quarter Ending 12/10 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 12.36 12.16 11.53 3.63 1.89 11.95 35.09 6.14 5.25 0.00 100.00 7.34 10.50 12.25 10.37 10.41 8.51 24.82 4.82 5.76 5.22 100.00 15.26 12.72 15.39 18.46 7.42 -0.61 1.01 12.97 -4.12 6.88 10.38 17.99 10.50 9.00 3.92 2.58 1.79 10.86 2.21 2.54 6.73 0.60 -0.64 0.56 0.34 0.07 -0.38 -0.27 0.13 -0.33 0.00 0.08 0.18 0.19 -0.03 -0.15 0.24 -0.14 -0.51 0.05 0.02 0.22 0.07 0.79 -0.45 0.54 0.19 0.31 -0.52 -0.78 0.18 -0.31 0.22 0.15 Index - MSCI EAFE 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 0.32% [ Actual Return 7.19% ] - [ Buy Hold Return 6.88% ] 139 City of Clearwater Wentworth & Violich as of 12/31/10 Bhp Billiton Ltd Potash Corp Sask Inc Schlumberger Ltd Noble Corporation Ba Weatherford Internat Vale S A Nestle S A Tenaris S A Cooper Industries Pl Suncor Energy Inc Ne GICS Sector% Port Materials Materials Energy Energy Energy Materials Consumer Staples Energy Industrials Materials 6.60 5.76 5.18 4.67 4.49 4.24 4.21 4.03 3.91 3.80 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 30.91 31.26 17.28 0.00 13.37 2.66 4.52 0.00 0.00 0.00 -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 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Wentworth & ViolichMSCI EAFE Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Wentworth & Violich MSCI EAFE Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 14.77 6.65 27,339 -1 4,036 31,374 17.58 8.21 26,685 -2 4,691 31,374 17.58 8.21 26,685 -2 4,691 31,374 -1.75 -5.99 29,002 -2 2,374 31,374 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 140 City of Clearwater Wentworth & Violich as of 12/31/10 Cash & Equiv $2,498 7.96% Intl Equity $28,877 92.04% Periods from 6/08 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.0 -6.5 -6.0 -5.5 -5.0 -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 w 1 T Annualized Standard Deviation% w Wentworth & Violich 1 MSCI EAFE T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -1.75 -5.99 0.52 30.31 27.50 0.24 -0.07 -0.24 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 141 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low w Wentworth & Violich Net Ret Rank 1 MSCI EAFE Net Ret Rank Last Qtr Last Year Last 2 Years 12.54 8.44 7.29 5.89 2.40 14.77 2 6.65 64 24.78 17.02 11.98 8.45 2.37 17.58 23 8.21 76 46.65 29.55 23.74 19.40 11.07 35.43 15 19.72 71 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% w 1 w 1 w 1 142 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 & Violich Net Ret Rank 1 MSCI EAFE Net Ret Rank 20102009 24.78 17.02 11.98 8.45 2.37 17.58 23 8.21 76 75.57 42.19 35.69 26.17 9.83 55.98 12 32.46 59 0% 10% 20% 30% 40% 50% 60% 70% 80% w 1 w 1 143 City of Clearwater Global Equity Summary Statistics Wentworth & Violich Period Ending 12/10 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 35 28,876,588 59,251,782 30,447,067 1.21 18.25 18.65 0.00 2.47 52.13 14.24 6.64 969 50,244,792 7,065,051 2.94 19.40 17.50 1.00 1.59 98.09 -2.07 5.34 Ten Largest Holdings Bhp Billiton Ltd Potash Corp Sask Inc Schlumberger Ltd Noble Corporation Ba Weatherford Internat Vale S A Nestle S A Tenaris S A Cooper Industries Pl Suncor Energy Inc Ne Market Value% of PortfolioQuarterly Ret 1,900,214 1,658,229 1,490,475 1,343,164 1,292,190 1,219,457 1,211,692 1,159,602 1,126,454 1,093,180 6.60 5.76 5.18 4.67 4.49 4.24 4.21 4.03 3.91 3.80 21.75 7.56 35.90 6.24 33.33 11.32 10.09 28.24 19.72 17.97 Ten Best Performers Teck Resources Ltd Manulife Finl Corp Schlumberger Ltd Weatherford Internat Ingersoll-Rand Plc Nabors Industries Lt Canadian Nat Res Ltd Yara Intl Asa Tenaris S A Talisman Energy Inc Quarterly Ret 50.99 37.22 35.90 33.33 32.08 29.90 28.61 28.38 28.24 27.65 Ten Worst Performers Fibria Celulose S A Axa Sa Ubs Ag Partnerre Hldgs Ltd Core Laboratories N Novartis A G British Amern Tob Pl Canadian Natl Ry Co Unilever N V Noble Corporation Ba Quarterly Ret -7.46 -4.20 -3.29 0.92 1.22 2.22 4.00 4.24 5.93 6.24 144 City of Clearwater Global Performance Attribution Analysis Wentworth & Violich Quarter Ending 12/10 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 Finland France Germany Greece Hong Kong Ireland Isle of Man Israel Italy Japan Kazakhstan Luxembourg Netherland Antilles Netherlands New Zealand Norway Portugal Scotland Singapore Spain 8.58 0.32 0.97 0.00 0.00 0.00 0.10 0.00 0.00 1.02 1.12 10.14 7.95 0.31 2.67 0.23 0.08 0.82 2.86 21.14 0.00 0.00 0.00 2.65 0.10 0.81 0.28 0.03 1.70 3.77 8.58 0.32 0.97 0.00 0.00 0.00 0.10 0.00 0.00 1.02 1.12 10.14 7.95 0.31 2.67 0.23 0.08 0.82 2.86 21.14 0.00 0.00 0.00 2.65 0.10 0.81 0.28 0.03 1.70 3.77 4.04 13.73 -2.45 18.35 9.00 7.75 3.62 11.27 -5.62 5.03 8.33 17.74 2.14 -1.64 8.83 4.27 5.39 10.21 1.11 19.41 3.13 -6.76 10.14 11.76 -4.14 18.19 7.12 5.88 1.83 9.34 -7.26 4.89 6.45 20.89 4.83 -3.35 12.09 2.48 11.93 11.04 -0.64 18.64 5.89 -8.37 6.26 0.00 0.00 9.83 3.97 26.36 5.09 0.00 0.00 0.00 0.00 0.61 3.11 0.00 0.00 2.64 0.00 0.00 0.00 0.00 0.00 3.65 4.41 5.38 0.00 0.16 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 0.00 21.75 18.74 10.53 17.27 6.24 -4.20 19.71 32.08 28.24 35.90 3.53 28.38 21.75 18.74 10.53 17.27 6.24 -4.20 19.71 32.08 28.24 35.90 3.53 28.38 0.50 0.04 0.27 -0.36 0.17 0.20 2.10 0.70 0.10 0.55 -0.42 0.01 0.19 0.78 3.55 -0.58 0.02 0.10 0.07 0.00 0.38 1.22 1.11 -0.62 -0.05 0.26 0.63 -0.04 0.03 1.61 0.04 0.27 -0.98 0.17 0.20 2.05 0.96 0.10 0.55 0.21 0.01 0.19 0.78 3.55 -0.62 0.02 0.13 0.07 0.00 0.38 1.22 Benchmark : MSCI EAFE Index Gross Dividend 145 City of Clearwater Global Performance Attribution Analysis Wentworth & Violich Quarter Ending 12/10 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 Sweden Switzerland United Kingdom United States 3.18 7.82 21.55 0.00 100.00 3.18 7.82 21.55 0.00 100.00 7.21 2.77 6.78 5.73 7.33 7.72 6.10 6.70 0.00 18.39 10.15 0.00 100.00 0.00 0.00 0.00 100.00 100.00 13.10 10.27 16.23 13.10 10.27 16.23 0.59 -2.42 2.15 9.90 1.90 0.35 3.58 0.59 -0.52 2.50 13.48 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] 146 City of Clearwater International Equity Sector Attribution Analysis Wentworth & Violich Quarter Ending 12/10 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 29.51 29.58 17.85 0.00 14.36 3.01 4.93 0.00 0.00 0.76 100.00 7.34 10.50 12.25 10.37 10.41 8.51 24.82 4.82 5.76 5.22 100.00 21.23 19.86 14.63 7.75 2.22 6.19 -1.50 16.23 10.38 17.99 10.50 9.00 3.92 2.58 1.79 10.86 2.21 2.54 6.73 3.20 0.55 0.74 0.00 0.55 -0.01 0.22 0.00 0.00 -0.03 5.22 0.81 2.15 0.21 -0.24 -0.11 0.23 0.98 -0.20 0.26 0.19 4.28 4.01 2.70 0.95 -0.24 0.44 0.22 1.20 -0.20 0.26 0.16 9.50 Index - MSCI EAFE 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 16.25% ] - [ Buy Hold Return 16.23% ] 147 City of Clearwater Eaton Vance Mgmt as of 12/31/10 -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 24.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Eaton Vance MgmtMSCI Emg Mkts Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Eaton Vance Mgmt MSCI Emg Mkts Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 7.60 7.36 28,792 0 2,189 30,980 23.33 19.19 25,119 -157 6,018 30,980 23.33 19.19 25,119 -157 6,018 30,980 2.41 1.38 8,277 -157 22,860 30,980 Portfolio Performance (%) 148 City of Clearwater Eaton Vance Mgmt as of 12/31/10 Intl Equity $30,980 100.00% Periods from 6/08 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.0 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 v 1 T Annualized Standard Deviation% v Eaton Vance Mgmt 1 MSCI Emg Mkts T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 2.41 1.38 0.52 32.34 33.38 0.24 0.06 0.03 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 149 City of Clearwater Cumulative Performance Comparison Total Returns of Emerging Markets Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low v Eaton Vance Mgmt Net Ret Rank 1 MSCI Emg Mkts Net Ret Rank Last Qtr Last Year Last 2 Years 8.81 7.71 5.96 5.30 2.21 7.60 28 7.36 32 29.48 24.10 20.80 18.43 8.88 23.33 36 19.19 61 53.20 45.98 43.97 39.77 13.21 43.52 50 46.07 22 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% v 1 v 1 v 1 150 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 Mgmt Net Ret Rank 1 MSCI Emg Mkts Net Ret Rank 20102009 29.48 24.10 20.80 18.43 8.88 23.33 36 19.19 61 92.22 77.74 70.53 50.52 27.05 67.01 62 79.02 21 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% v 1 v 1 151 City of Clearwater Wellington Mgmt as of 12/31/10 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/08 Wellington MgmtMSCI Emg Mkts Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 3/31/08 Wellington Mgmt MSCI Emg Mkts Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 7.39 7.36 26,804 0 1,980 28,784 15.99 19.19 24,816 0 3,968 28,784 15.99 19.19 24,816 0 3,968 28,784 5.08 4.26 8,000 0 20,784 28,784 Portfolio Performance (%) 152 City of Clearwater Wellington Mgmt as of 12/31/10 Cash & Equiv $-17 -0.06% Domestic Equity $28,801 100.06% Periods from 3/08 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -5.00.05.010.015.020.025.030.035.040.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 l 1 T Annualized Standard Deviation% l Wellington Mgmt 1 MSCI Emg Mkts T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.08 4.26 0.54 36.91 37.89 0.38 0.12 0.10 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 153 City of Clearwater Cumulative Performance Comparison Total Returns of Emerging Markets Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low l Wellington Mgmt Net Ret Rank 1 MSCI Emg Mkts Net Ret Rank Last Qtr Last Year Last 2 Years 8.81 7.71 5.96 5.30 2.21 7.39 31 7.36 32 29.48 24.10 20.80 18.43 8.88 15.99 87 19.19 61 53.20 45.98 43.97 39.77 13.21 42.25 67 46.07 22 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% l1 l 1 l 1 154 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 Mgmt Net Ret Rank 1 MSCI Emg Mkts Net Ret Rank 20102009 29.48 24.10 20.80 18.43 8.88 15.99 87 19.19 61 92.22 77.74 70.53 50.52 27.05 74.44 31 79.02 21 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% l 1 l 1 155 156 City of Clearwater Fixed Income Comp as of 12/31/10 United States Treas United States Treas FNMA Pool #ad0494 United States Treas FNMA Pool #ad0217 FNMA Cl 30 - Tba Jan FNMA Pool Ae0381 Fhgld Pool #g03771 United States Treas United States Treas Sector% Port Government Government Mortgage Government Mortgage Mortgage Mortgage Mortgage Government Government 3.31 2.61 1.94 1.31 1.26 1.23 1.22 1.20 1.08 1.07 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 17.94 23.04 15.47 37.20 1.80 0.57 2.44 0.58 0.96 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Fixed Income CompBC Agg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 12/31/87 Fixed Income Comp BC Agg Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value -0.39 -1.30 190,209 2,830 -756 192,283 7.37 6.54 180,115 -938 13,107 192,283 7.37 6.54 180,115 -938 13,107 192,283 7.35 5.91 212,692 -938 -19,471 192,283 6.61 5.80 175,843 -938 17,379 192,283 5.68 5.84 165,696 -938 27,525 192,283 7.00 7.34 59,224 -938 133,998 192,283 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 157 City of Clearwater Fixed Income Comp as of 12/31/10 Domestic Equity $75 0.04% Cash & Equiv $18,718 9.73% Domestic Fixed $173,490 90.23% Periods from 12/87 to 12/10 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 F 1 T Annualized Standard Deviation% F Fixed Income Comp 1 BC Agg T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 7.00 7.34 4.24 3.20 4.17 1.15 0.87 0.75 0.00 -0.15 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 158 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low F Fixed Income Comp Net Ret Rank 1 BC Agg 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 4.08 0.27 -0.77 -1.29 -3.16 -0.39 40 -1.30 76 15.43 9.72 7.02 5.69 0.69 7.37 45 6.54 61 21.46 11.42 7.85 5.54 0.86 9.84 35 6.24 68 9.19 7.16 6.02 4.60 0.86 7.35 22 5.91 54 9.11 7.10 6.35 5.29 2.06 7.00 27 6.17 56 8.09 6.63 6.03 5.25 2.59 6.61 25 5.80 59 7.43 6.03 5.48 4.79 2.91 5.93 28 5.23 60 7.29 5.90 5.29 4.60 2.97 5.64 31 5.10 59 8.14 5.93 5.18 4.59 3.38 5.40 41 4.98 62 7.62 6.37 5.69 5.05 3.82 5.70 49 5.55 60 7.72 6.67 5.97 5.40 4.07 5.68 66 5.84 59 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% F1 F1 F 1 F 1 F1 F1 F1 F1 F1 F1 F1 159 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 Comp Net Ret Rank 1 BC Agg Net Ret Rank 2010200920082007200620052004200320022001 15.43 9.72 7.02 5.69 0.69 7.37 45 6.54 61 19.37 13.01 8.22 5.28 -0.27 12.37 26 5.93 69 9.60 5.50 3.47 -0.99 -10.58 2.54 57 5.24 29 9.65 7.47 6.51 5.04 2.16 5.94 60 6.96 39 11.38 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 10.46 5.20 4.34 3.16 1.32 3.93 61 4.34 50 17.31 5.78 4.44 3.55 1.77 3.77 70 4.11 62 12.25 10.41 9.31 6.98 0.95 8.06 66 10.26 28 10.59 9.12 8.38 7.17 2.54 5.57 86 8.43 48 -15% -10% -5% 0% 5% 10% 15% 20% 25% F1 F 1 F 1 F1 F1 F1 F1 F1 F 1 F 1 160 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.02.04.06.08.010.012.014.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 F 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank F Fixed Income Comp 1 BC Agg Median 7.35225.0552 5.91543.8928 6.025.03 Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 F 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank F Fixed Income Comp 1 BC Agg Median 6.61254.2855 5.80593.6233 6.034.13 161 City of Clearwater Dodge & Cox as of 12/31/10 United States Treas FNMA Pool #ad0494 FNMA Pool #ad0217 FNMA Pool Ae0381 Fhgld Pool #g03771 United States Treas United States Treas FNMA Pool #ad0119 Xerox Corp Sr Nt 6.4 FNMA Pool #984262 Sector% Port Government Mortgage Mortgage Mortgage Mortgage Government Government Mortgage Industrials Mortgage 4.74 3.53 2.30 2.23 2.19 1.95 1.89 1.87 1.71 1.61 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 19.39 12.44 16.27 43.28 2.26 0.47 4.10 0.25 1.52 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/29/04 Dodge & CoxBC Agg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 2/29/04 Dodge & Cox BC Agg Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 0.13 -1.30 105,548 0 141 105,690 7.53 6.54 98,284 0 7,405 105,690 7.53 6.54 98,284 0 7,405 105,690 7.68 5.91 101,707 -2,415 6,397 105,690 6.82 5.80 79,324 -2,415 28,780 105,690 5.68 4.94 75,656 -2,415 32,449 105,690 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 162 City of Clearwater Dodge & Cox as of 12/31/10 Cash & Equiv $2,471 2.34% Domestic Fixed $103,219 97.66% Periods from 2/04 to 12/10 Alpha Beta R-Squared 0.23 0.93 0.63 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 BC Agg T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.68 4.94 2.39 3.79 3.64 0.58 0.87 0.70 0.00 0.26 Asset Allocation ($000) Risk/Return Analysis 163 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low d Dodge & Cox Net Ret Rank 1 BC Agg Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years 4.08 0.27 -0.77 -1.29 -3.16 0.13 26 -1.30 76 15.43 9.72 7.02 5.69 0.69 7.53 43 6.54 61 21.46 11.42 7.85 5.54 0.86 10.98 29 6.24 68 9.19 7.16 6.02 4.60 0.86 7.68 18 5.91 54 9.11 7.10 6.35 5.29 2.06 7.12 24 6.17 56 8.09 6.63 6.03 5.25 2.59 6.82 19 5.80 59 7.43 6.03 5.48 4.79 2.91 6.07 24 5.23 60 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% d 1 d 1 d 1 d 1 d 1 d 1 d1 164 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 BC Agg Net Ret Rank 201020092008200720062005 15.43 9.72 7.02 5.69 0.69 7.53 43 6.54 61 19.37 13.01 8.22 5.28 -0.27 14.53 15 5.93 69 9.60 5.50 3.47 -0.99 -10.58 1.37 63 5.24 29 9.65 7.47 6.51 5.04 2.16 5.47 67 6.96 39 11.38 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 -15% -10% -5% 0% 5% 10% 15% 20% 25% d 1 d 1 d 1 d 1d 1 d 1 165 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Fixed Income Portfolios High 1st Qt Median 3rd Qt Low d Dodge & Cox Return Rank L Barclays U.S. Aggregate Return Rank 12/10 9/10 6/10 3/10 12/09 9.19 7.16 6.02 4.60 0.86 7.68 18 5.91 54 11.06 8.49 7.44 5.74 1.00 8.27 29 7.42 50 11.16 8.32 7.29 5.37 0.67 8.14 27 7.55 43 9.63 7.06 6.14 4.84 0.83 7.28 21 6.14 50 9.18 6.93 6.06 4.72 1.27 6.98 23 6.04 50 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% d L d L d L d L d L Dodge & Cox Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 0.7 0.4 -0.2 0.4 0.1 0.4 -0.7 -1.2 -0.9 0.8 -2.4 -1.2 -0.5 5.1 1.9 1.5 0.6 -1.1 0.0 1.4 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. Barclays U.S. Aggregate 166 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.02.04.06.08.010.012.014.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 d 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank d Dodge & Cox 1 BC Agg Median 7.68185.3859 5.91543.8928 6.025.03 Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 d 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank d Dodge & Cox 1 BC Agg Median 6.82194.4056 5.80593.6233 6.034.13 167 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Dodge & Cox Quarter Ending 12/10 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBC Agg 156 103,218,717 2.45 14.56 5.73 4.41 0.18 3.82 5.91 7,999 2.97 7.08 4.24 5.25 -0.04 4.98 7.08 Yield to Maturity 5+ 16.7% 4 - 512.4% 3 - 420.2% 2 - 319.8% 1 - 213.9% 0 - 117.0% Time to Maturity 10+ 53.4% 7 - 1014.3% 5 - 710.6% 3 - 54.9% 1 - 32.1% 0 - 114.7% Coupon 11+ 0.0% 9 - 111.1% 7 - 917.2% 5 - 766.7% 3 - 53.4% 0 - 311.5% Quality NR 1.9% B 1.4% BA 4.7% BAA 19.1% A 13.2% AA 5.2% AAA 42.3% GOVT 12.2% Duration 8+ 15.1% 6 - 810.0% 4 - 613.7% 3 - 413.5% 1 - 332.7% 0 - 115.1% Effective Duration 8+ 13.1% 6 - 87.9% 4 - 615.3% 3 - 412.0% 1 - 330.5% 0 - 121.2% 168 City of Clearwater Percent Invested by Sector and Quality Dodge & Cox As of 12/31/10 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 12.44 10.36 2.09 --- --- --- --- --- --- 42.10 --- 6.67 31.52 3.90 --- --- --- 54.54 --- --- --- 4.00 1.03 --- 2.97 --- 0.46 --- --- --- --- --- 0.46 --- 0.30 5.22 --- --- --- 9.72 1.77 --- 7.70 0.25 0.55 --- --- --- --- --- 2.96 --- --- 13.24 --- --- --- 16.64 10.05 --- 6.59 --- 1.24 --- --- --- --- --- --- --- 1.23 19.11 --- --- --- 4.66 3.43 0.47 0.76 --- --- --- --- --- --- --- --- --- --- 4.66 --- --- --- 1.37 --- --- 1.37 --- --- --- --- --- --- --- --- --- --- 1.37 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 0.00 --- --- 0.00 --- --- 1.18 --- --- 1.18 --- 0.68 --- --- 1.86 12.44 10.36 2.09 36.39 16.28 0.47 19.39 0.25 2.25 43.28 --- 6.67 32.70 3.90 4.10 --- 1.53 100.00 169 City of Clearwater Fixed Income Sector Attribution Analysis Dodge & Cox Quarter Ending 12/10 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 20.10 10.29 17.69 42.92 3.06 0.49 3.62 0.26 1.57 100.00 11.10 42.59 9.64 33.33 0.37 1.28 0.00 1.69 0.00 100.00 -1.13 -0.02 -0.64 2.06 -2.21 -0.62 -3.38 -1.72 0.34 -0.05 -2.23 -1.85 0.82 -2.65 -2.82 0.80 -1.34 0.00 -0.93 -0.22 0.23 0.21 0.53 0.01 0.01 -0.15 -0.00 0.00 0.63 0.08 0.42 -0.07 0.17 -0.05 0.02 0.06 0.01 0.01 0.64 -0.14 0.65 0.14 0.70 -0.03 0.03 -0.09 0.00 0.01 1.27 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 -0.20% [ Actual Return 0.14% ] - [ Buy Hold Return 0.34% ] 170 City of Clearwater Western Asset Management Co. as of 12/31/10 United States Treas United States Treas FNMA Cl 30 - Tba Jan United States Treas FNMA Ci 15 - Tba Jan Federal Home Ln Mtg FNMA Cl 30 - Tba Jan GNMA Ii Pool 004772 GNMA Ii Sf 30 - Tba United States Treas Sector% Port Government Government Mortgage Government Mortgage Government Mortgage Mortgage Mortgage Government 7.81 3.08 2.90 2.54 2.47 2.46 2.36 1.92 1.91 1.89 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 15.82 38.57 14.29 28.28 1.12 0.71 0.00 1.07 0.13 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/04 Western Asset Management Co.BC Agg Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/04 Western Asset Management Co. BC Agg Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value -1.09 -1.30 82,378 0 -896 81,482 7.09 6.54 76,089 0 5,393 81,482 7.09 6.54 76,089 0 5,393 81,482 6.73 5.91 100,798 0 -19,316 81,482 6.27 5.80 78,400 0 3,083 81,482 5.62 5.17 74,568 0 6,914 81,482 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 171 City of Clearwater Western Asset Management Co. as of 12/31/10 Domestic Equity $75 0.09% Cash & Equiv $11,136 13.67% Domestic Fixed $70,271 86.24% Periods from 9/04 to 12/10 Alpha Beta R-Squared 0.03 1.12 0.92 Annualized Return% 0.51.01.52.02.53.03.54.04.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 w 1 T Annualized Standard Deviation% w Western Asset Management 1 BC Agg T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 5.62 5.17 2.51 4.04 3.49 1.00 0.77 0.76 0.00 0.34 Asset Allocation ($000) Risk/Return Analysis 172 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Net Ret Rank 1 BC Agg Net Ret Rank Last Qtr Last Year Last 2 Years Last 3 Years Last 4 Years Last 5 Years Last 6 Years 4.08 0.27 -0.77 -1.29 -3.16 -1.09 65 -1.30 76 15.43 9.72 7.02 5.69 0.69 7.09 49 6.54 61 21.46 11.42 7.85 5.54 0.86 8.16 47 6.24 68 9.19 7.16 6.02 4.60 0.86 6.73 32 5.91 54 9.11 7.10 6.35 5.29 2.06 6.67 38 6.17 56 8.09 6.63 6.03 5.25 2.59 6.27 40 5.80 59 7.43 6.03 5.48 4.79 2.91 5.67 41 5.23 60 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% w 1 w 1 w 1 w 1 w 1 w 1 w 1 173 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 BC Agg Net Ret Rank 201020092008200720062005 15.43 9.72 7.02 5.69 0.69 7.09 49 6.54 61 19.37 13.01 8.22 5.28 -0.27 9.24 43 5.93 69 9.60 5.50 3.47 -0.99 -10.58 3.92 46 5.24 29 9.65 7.47 6.51 5.04 2.16 6.51 50 6.96 39 11.38 5.30 4.57 4.13 2.89 4.66 44 4.33 65 6.67 3.07 2.54 2.03 1.32 2.77 38 2.43 56 -15% -10% -5% 0% 5% 10% 15% 20% 25% w 1 w 1 w1 w 1 w 1 w 1 174 City of Clearwater December 31, 2010 Cumulative Performance Comparison Total Returns of Fixed Income Portfolios High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Return Rank L Barclays U.S. Aggregate Return Rank 12/10 9/10 6/10 3/10 12/09 9.19 7.16 6.02 4.60 0.86 6.73 32 5.91 54 11.06 8.49 7.44 5.74 1.00 8.12 32 7.42 50 11.16 8.32 7.29 5.37 0.67 8.15 27 7.55 43 9.63 7.06 6.14 4.84 0.83 6.65 35 6.14 50 9.18 6.93 6.06 4.72 1.27 6.53 34 6.04 50 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% w L w L w L w Lw L Western Asset Management Co. Value Added Analysis - Net of Fee 3/066/069/0612/063/076/079/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/10 -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 0.1 -0.1 0.2 0.10.1 -0.4 0.0 -0.2-0.2 0.1 -1.7 0.6 -0.2 2.3 0.9 0.1 0.2 -0.1 0.3 0.2 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. Barclays U.S. Aggregate 175 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.02.04.06.08.010.012.014.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 12/31/10 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Western Asset Management Co. 1 BC Agg Median 6.73324.8949 5.91543.8928 6.025.03 Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 w1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 12/31/10 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank w Western Asset Management Co. 1 BC Agg Median 6.27404.3255 5.80593.6233 6.034.13 176 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Western Asset Management Co. Quarter Ending 12/10 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBC Agg 225 70,271,060 3.40 16.64 4.42 6.68 0.52 5.92 10.13 7,999 2.97 7.08 4.24 5.25 -0.04 4.98 7.08 Yield to Maturity 5+ 13.5% 4 - 517.7% 3 - 430.8% 2 - 320.5% 1 - 25.2% 0 - 112.3% Time to Maturity 10+ 46.8% 7 - 1023.8% 5 - 710.6% 3 - 55.4% 1 - 36.7% 0 - 16.8% Coupon 11+ 0.1% 9 - 111.8% 7 - 95.5% 5 - 735.9% 3 - 534.2% 0 - 322.4% Quality NR 2.0% B 1.4% BA 1.3% BAA 11.4% A 12.8% AA 5.5% AAA 32.8% GOVT 32.9% Duration 8+ 33.9% 6 - 89.9% 4 - 623.7% 3 - 47.9% 1 - 317.3% 0 - 17.3% Effective Duration 8+ 23.0% 6 - 818.2% 4 - 617.3% 3 - 49.7% 1 - 323.4% 0 - 18.4% 177 City of Clearwater Percent Invested by Sector and Quality Western Asset Management Co. As of 12/31/10 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 38.10 26.27 11.83 0.17 --- --- --- 0.17 --- 27.45 10.59 1.33 13.54 1.99 --- --- --- 65.72 0.21 --- 0.21 4.51 1.23 --- 3.28 --- 0.21 0.53 --- --- --- 0.53 --- --- --- 5.46 --- --- --- 12.78 4.86 0.38 7.21 0.34 --- --- --- --- --- --- --- --- --- 12.78 0.26 --- 0.26 11.01 7.82 0.18 2.44 0.57 0.11 --- --- --- --- --- --- --- --- 11.38 --- --- --- 1.31 0.38 0.15 0.78 --- --- --- --- --- --- --- --- --- --- 1.31 --- --- --- 0.55 --- --- 0.55 --- 0.81 --- --- --- --- --- --- --- --- 1.35 --- --- --- 0.00 --- --- 0.00 --- --- --- --- --- --- --- --- --- --- 0.00 --- --- --- 1.57 --- --- 1.57 --- --- 0.30 --- --- --- 0.30 --- --- 0.13 2.00 38.57 26.27 12.30 31.90 14.29 0.71 15.83 1.08 1.13 28.28 10.59 1.33 13.54 2.82 --- --- 0.13 100.00 178 City of Clearwater Fixed Income Sector Attribution Analysis Western Asset Management Co. Quarter Ending 12/10 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 16.57 27.82 14.80 37.62 0.72 0.74 0.00 1.74 0.00 100.00 11.10 42.59 9.64 33.33 0.37 1.28 0.00 1.69 0.00 100.00 -0.19 -3.26 -1.62 1.24 3.14 -4.78 0.00 -1.96 -0.76 -0.05 -2.23 -1.85 0.82 -2.65 -2.82 0.80 -1.34 0.00 -0.93 -0.02 -0.29 0.03 0.16 0.04 -0.01 -0.00 -0.01 0.00 -0.10 0.05 0.19 -0.05 0.07 -0.01 0.01 -0.00 -0.00 0.00 0.27 0.03 -0.09 -0.01 0.23 0.04 -0.00 -0.00 -0.01 0.00 0.17 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 -0.59% [ Actual Return -1.34% ] - [ Buy Hold Return -0.76% ] 179 180 City of Clearwater Real Estate Comp as of 12/31/10 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Real Estate CompWilshire RESI Index Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Real Estate Comp Wilshire RESI Index Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 6.99 8.18 60,712 -2,000 4,111 62,823 30.51 29.12 49,770 -2,000 15,053 62,823 30.51 29.12 49,770 -2,000 15,053 62,823 -3.08 -2.84 19,347 -2,000 45,477 62,823 Portfolio Performance (%) 181 City of Clearwater Real Estate Comp as of 12/31/10 Cash & Equiv $906 1.44% Real Estate $61,917 98.56% Periods from 6/08 to 12/10 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 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 R1 T Annualized Standard Deviation% R Real Estate Comp 1 Wilshire RESI Index T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -3.08 -2.84 0.52 43.50 43.92 0.24 -0.08 -0.08 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 182 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low R Real Estate Comp Net Ret Rank 1 Wilshire RESI Index Net Ret Rank Last Qtr Last 2 Qtrs Last 3 Qtrs Last 4 Qtrs 10.13 6.67 4.90 3.46 -1.41 6.99 21 8.18 12 26.00 20.36 11.34 8.83 -1.90 20.98 22 22.50 16 21.47 17.44 14.33 9.17 -5.41 17.82 20 17.09 27 30.11 18.66 15.49 10.65 -12.72 30.51 3 29.12 6 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% R 1 R1 R 1 R 1 183 City of Clearwater Calendar Year Performance Comparison Total Returns of Real Estate Portfolios Years Ending December High 1st Qt Median 3rd Qt Low R Real Estate Comp Net Ret Rank 1 Wilshire RESI Index Net Ret Rank 20102009 30.11 18.66 15.49 10.65 -12.72 30.51 3 29.12 6 36.12 -5.52 -28.27 -30.79 -45.55 24.68 13 29.20 10 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% R 1 R 1 184 City of Clearwater Security Capital as of 12/31/10 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Security CapitalWilshire RESI Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Security Capital Wilshire RESI Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 7.89 8.18 60,712 -22,000 3,168 41,879 31.62 29.12 49,770 -22,000 14,109 41,879 31.62 29.12 49,770 -22,000 14,109 41,879 -2.78 -2.84 19,347 -22,000 44,533 41,879 Portfolio Performance (%) 185 City of Clearwater Security Capital as of 12/31/10 Cash & Equiv $904 2.16% Real Estate $40,976 97.84% Periods from 6/08 to 12/10 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 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 s1 T Annualized Standard Deviation% s Security Capital 1 Wilshire RESI T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -2.78 -2.84 0.52 43.53 43.92 0.24 -0.08 -0.08 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 186 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low s Security Capital Net Ret Rank 1 Wilshire RESI Net Ret Rank Last Qtr Last Year Last 2 Years 10.13 6.67 4.90 3.46 -1.41 7.89 13 8.18 12 30.11 18.66 15.49 10.65 -12.72 31.62 1 29.12 6 30.79 7.90 -9.17 -11.76 -32.33 28.10 14 29.16 10 -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% s 1 s 1 s 1 187 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 Net Ret Rank 20102009 30.11 18.66 15.49 10.65 -12.72 31.62 1 29.12 6 36.12 -5.52 -28.27 -30.79 -45.55 24.68 13 29.20 10 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% s 1 s 1 188 City of Clearwater Multi Employer Property Trust as of 12/31/10 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/10 Multi Employer Property TrustNCREIF ODCE Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 9/30/10 Multi Employer Property Trust NCREIF ODCE Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 4.72 4.99 0 20,000 944 20,944 4.72 4.99 0 20,000 944 20,944 Portfolio Performance (%) 189 City of Clearwater Multi Employer Property Trust as of 12/31/10 Cash & Equiv $2 0.01% Real Estate $20,941 99.99% Periods from 9/10 to 12/10 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -1.00.01.02.03.04.05.06.07.08.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 M 1 T Annualized Standard Deviation% M Multi Employer Property 1 NCREIF ODCE T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 4.72 4.99 0.04 6.67 7.06 0.06 0.70 0.70 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 190 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 12/10 High 1st Qt Median 3rd Qt Low M Multi Employer Property Trust Net Ret Rank O NCREIF ODCE Fund Index Net Ret Rank Last Qtr 10.13 6.67 4.90 3.46 -1.41 4.72 54 4.99 46 -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% M O 191 City of Clearwater Calendar Year Performance Comparison Total Returns of Real Estate Portfolios Years Ending December High 1st Qt Median 3rd Qt Low O NCREIF ODCE Fund Index Net Ret Rank 2010 30.11 18.66 15.49 10.65 -12.72 16.36 44 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% O 192 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