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EMPLOYEES PENSION PLAN - PERFORMANCE REPORT - SECOND 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 Managing Principal Senior Investment Consultant CITY OF CLEARWATER EMPLOYEES PENSION PLAN PERFORMANCE REVIEW JUNE 30, 2012 TABLE OF CONTENTS Important Disclaimer Information 1 Capital Markets Review 2 Fund Overview 3 Performance Review Total Fund 4 Domestic Equity 5 International Equity 6 Fixed Income 7 Real Estate 8 Appendix 9 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. When applicable, 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 –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:ZephyrStyleAdvisor,Barclay’sCapital,MSCIBarra&Standard&Poor’s Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. IndexQTRYTD1 Yr3 Yr5 Yr10 Yr Domestic Fixed Income 3 Month T-Bill0.02%0.04%0.05%0.10%0.80%1.82% Barclays Capital 1-3 year Gov't0.20%0.18%0.86%1.69%3.40%3.14% Barclays Capital Interm Gov't1.45%1.07%5.01%4.44%5.77%4.63% Barclays Capital Interm Credit1.53%4.07%6.23%8.40%6.79%5.90% Barclays Capital Interm Govt/Cred1.48%2.10%5.42%5.81%6.01%5.08% Barclays Capital Aggregate Bond2.06%2.37%7.47%6.93%6.79%5.63% Domestic Equity Standard & Poor's 500-2.75%9.49%5.45%16.40%0.22%5.33% Dow Jones Industrial Average-1.85%6.83%6.63%18.25%2.00%6.02% Dow Jones US Total Full Cap-3.21%9.45%3.78%16.84%0.63%6.16% Dow Jones US Select REIT 3.75%14.91%13.29%33.52%1.97%10.27% Russell 1000 -Large Cap-3.12%9.38%4.37%16.64%0.39%5.72% Russell 1000 Growth -Large Cap-4.02%10.08%5.76%17.50%2.87%6.03% Russell 1000 Value -Large Cap-2.20%8.68%3.01%15.80%-2.19%5.28% Russell Midcap-4.40%7.97%-1.65%19.44%1.06%8.45% Russell Midcap Growth-5.60%8.10%-2.99%19.01%1.91%8.47% Russell Midcap Value-3.26%7.78%-0.37%19.92%-0.13%8.17% Russell 2000 -Small Cap-3.47%8.53%-2.08%17.80%0.54%7.00% Russell 2000 Growth -Small Cap-3.94%8.82%-2.71%18.09%1.99%7.39% Russell 2000 Value -Small Cap-3.01%8.23%-1.44%17.43%-1.05%6.50% International Equity MSCI EAFE-7.13%2.96%-13.83%5.96%-6.10%5.14% MSCI World-5.07%5.91%-4.98%10.97%-2.96%5.18% MSCI EM -10.00%2.29%-18.22%7.18%-2.42%11.36% Blended Benchmarks 30% S&P 500 / 70% Barclays Agg0.62%4.51%6.86%9.77%4.82%5.54% 40% S&P 500 / 60% Barclays Agg0.14%5.22%6.66%10.72%4.16%5.51% 50% S&P 500 / 50% Barclays Agg-0.35%5.93%6.46%11.67%3.51%5.48% 60% S&P 500 / 40% Barclays Agg-0.83%6.64%6.26%12.61%2.85%5.45% 70% S&P 500 / 30% Barclays Agg-1.31%7.35%6.06%13.56%2.19%5.42% 3 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:U.S.DepartmentofCommerce,BloombergLP,WellsFargoSecurities,LLC,HaverAnalytics Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. CapitalMarketsOverview Apositivefirstquarterledtoacelebrationofthingstocomeforthemarkets,butthepartywasshort lived.MostleadingeconomicindicatorsshowedevidenceofaU.S.economythatcontinuestoexpand, butthepaceofgrowthisnotenoughtosatisfyjobexpectationsbyhouseholds,profitsofinvestorsor thepublicpurseatalllevelsofgovernment.WhiletheU.S.economyhasbeenresilienttoglobal problems,investorsremainsensitivetoEurope’sdeepeningfinancialproblems. TheU.S.economycontinuestogrowatabelow-averagerate.Thisquartermarkedthethree-year anniversaryfromtheendofthe2008-2009recession.Unlikepreviouseconomiccycles,thecurrent recoveryisslowerthannineoutofthe10previousrecoveriessince1949.Corporationscontinueto deleveragedebt,cautiouslyinvestingrowth,andarereluctanttoaddtopayrollsduetomarket uncertainty. Despitea4.1%gaininJune,theS&P500Indexendedthequarterwitha2.8%loss.TheDowJones IndustrialAveragealsogained4.1%inJune,trimmingitsquarterlylossto1.8%.TheNASDAQ Compositegained3.9%inJune,butstilllost4.8%forthequarter.Althoughsufferingsecondquarter losses,themajoraveragesfinishedthefirsthalfoftheyearwithencouraginggains.TheS&P500isup 9.5%,theDowisup6.8%,andtheNASDAQisup13.3%fortheyear. EuropeanmarketconcernswereeasedafterGreeceelectedthepro-austerityparty.Germanyagreed againtoexpandedmeasurestoreduceborrowingcostsdesignedtostemfurtherfinancialturmoil. Albeitslow,theU.S.economyisdoingbetterthanmanyforeigneconomiesandhasstrengthenedthe dollarwhilepushingcommoditieslower.Consequently,U.S.stockshaveoutperformedcommodities. Thisisachangefromthepastdecadewhencommoditiesoutperformedstocks. Economyremainssluggish,butshowingsignsofimprovement EconomicgrowthinthisrecoverycontinuestofallwellshortofwhattheU.S.experiencedinthe last10recoveries. -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 9697989900010203040506070809101112 Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change Real GDP: Q1 @ 1.9% Real GDP: Q1 @ 2.0%0 2 4 6 8 10 12 14 16 2009‐Q22009‐Q42010‐Q22010‐Q42011‐Q22011‐Q42012‐Q2 Cumulative percentage growth in economy from cycle low Source: Haver Analytics, Wells Fargo Advisors INFLATION‐ADJUSTED ECONOMIC RECOVERY FROM CYCLE LOW THISRECOVERY OVERLAY OF THE AVERAGEOF PREVIOUS 10 RECOVERIES 4 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:FactSet,ZephyrStyleAdvisor,Barclay’sCapital,MSCIBarra,Standard&Poor’s Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. Mostsectorsdeclinedinthesecondquarterasdefensivesectorsoutperformedcyclicals TelecomsandUtilitieswerethebigwinnersofthequarterasinvestorssoughtlargerdividend payingcompanieswithgreaterrevenuebasedintheUnitedStates. FearsofaneconomicslowdowninChinaandtheUnitedStatesledtosofterperformanceforthe Industrial,Material,andEnergysectors. ValueoutperformedGrowthascreditdowngradesinthefinancialsectorsinEuropeandtheUnited StatesweighedonGrowthstrategies. -6.83 -6.68 -5.99 -4.19 -3.56 -2.75 -2.60 1.75 2.88 6.55 14.13 Financials Information Technology Energy Materials Industrials S&P 500 Consumer Discretionary Health Care Consumer Staples Utilities Telecommunication S&P 500 Second Quarter 2012 Sector Returns Second Quarter Domestic Equity Returns ValueGrowth Russell 1000-2.2-3.1-4.0 Russell Midcap-3.3-4.4-5.6 Russell 2000-3.0-3.5-3.9 -10-50510 5 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:FactSet,ZephyrStyleAdvisor,Barclay’sCapital,MSCIBarra,Standard&Poor’s Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. Secondquarterearningsguidanceturnedmorenegative 74companiesintheS&P500haveissuednegativeEPSguidanceforthesecondquarter.28 companieshaveissuedpositiveEPSguidance. Comparedtothetrailing5YearAverage,therewere32%fewerpositivepreannouncementsand 13%morenegativepreannouncementsmaderegardingQ2earnings. Theaveragepricedecline*afternegativeguidancewas-1.4%inQ2andthe5yearaverage declinewas-1.5%. Theaveragepriceincrease*afterpositiveguidancewas2.4%inQ2andthe5yearaverage increasewas3.0%. *averagepricedecline/increase-2daysbeforetheguidancewasissuedthrough2daysaftertheguidancewasissued. S&P 500 Negative and Positive Preannouncements 5 Year 6 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:U.S.DepartmentofCommerce,BloombergLPandWellsFargoSecurities,LLC Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. Internationalmarketspersevereinthefaceofaveryslowglobalrecovery Europeanwoescontinuetoweighonthemarkets.TheEuropeancrisisremainstheprincipalriskto globalconfidence.JuneprovidedafewglimmersofhopethatEuropemightgetitsacttogether afterall. Greekvotersgaveausteritymeasuresanotherchance.Thepro-austeritypartieswonbyaslight marginontheJune17th election.However,thenewcoalitiongovernmentwantstorenegotiatethe termsofthebailoutpackage. OntheirJune29th meeting,theEUleadersagreedinprincipletocreateanEU-widesupervisory mechanismthatwilluseavailablebailoutfundstorecapitalizetroubledbanks.Inreturnfordirect support(fortheirbanks),EUmembershaveagreed(alwaysinprinciple)toturnovernationalbank controltoBrussels. -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% -14% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 2000200220042006200820102012 Eurozone Real GDP Bars = Compound Annual Rate Line = Yr/Yr % Change Compound Annual Growth: Q1 @ 0.1% Year-over-Year Percent Change: Q1 @ 0.0% 7 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:BloombergLP,WellsFargoSecurities,LLC,FactSet,ZephyrStyleAdvisor,Barclays Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. InvestorsflocktothesafetyofTreasuries underglobaluncertainty Theyieldonthebenchmark10-year Treasurynotesetanewalltimerecordlow of1.47%attheendofMay,endingthe quarteronlyslightlyhigherat1.67%. Treasuryprices,whichmoveinverselyto yields,increasedsubstantiallytogeneratea returnontheBarclaysLongTermU.S. Treasurybenchmarkof10.57%forthe quarter.Theshorter-termBarclays1-3 YearTreasurybenchmarkpostedamodest 0.20%return. TheFedannounceditwillbeextendingits programreferredtoas“OperationTwist”, theprocessofsellingshorter-term Treasuriesandbuyinglonger-term Treasuriesinanefforttokeeplongterm ratesdown. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 3 MO6 MO2 YR5 YR10 YR30 YR Treasury Yield Curve 12/31/200912/31/201012/31/20116/30/2012 Topqualitysovereigndebthasbenefitedfromperceivedsafe-havenflows InvestorsreactedtocontinuedstrugglesinseveralEuroNationcountries,particularlySpain,by shiftingintoa“riskoff”mentalitythatfocusedonretainingcapitalinsteadofsearchingforyield. Safe-havendebtralliedasinvestorsavoidedtheuncertaintyassociatedwithbailoutpackagesand austeritymeasurestakingplaceinseveralEuropeancountries. Germany,Switzerland,SwedenandJapanallofferloweryieldsthanU.S.Treasuries.Yieldson Spanishdebtincreasednear7%,alevelthatisconsideredunsustainableinthelongrun. Forthequarter,governmentdebtslightlyoutperformedcorporatewithreturnsof2.63%and2.52%, respectively.Municipalbondsalsoperformedwellastheysawsolidnew-issuedemandand continuedstrongbondfundinflows,returning1.88%forthequarter. 8 CAPITAL MARKETS REVIEW –JUNE 30, 2012 Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:BloombergLP,WellsFargoSecurities,LLC,FactSet Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. StrengtheningU.S.Dollarkeepsdownwardpressureoncommodityprices Thefearofaprolongedglobalslowdownkeptpressureoncommoditypricesthisquarter.The financialcrisisinEuropekeptpressureontheEuroandinvestorsfavoredtheperceivedsafehaven valueoftheU.S.DollarandYenovertheEuro. Goldpulledbackandthenmadeamodestrecoveryedgingclosetothepsychologicallyimportant $1,600level.GoldpricesflounderedafterrecentFederalReservemeetingminutesshowedthatthe centralbankwassplitonwhethertheU.S.economyrequirednewmonetarystimulusmeasures. Crudeoilpricesdeclinedsharplythisquarter,fallingmorethan17%.Oilperbarrelisdown slightlymorethan15%YTD. Commodities Current 3 Months Ago* 1 Year Ago** Gold (per Troy ounce) $1604.40 $1668.35 $1491.10 Oil (per barrel) $84.96 $103.02 $94.45 Copper (per pound) $345.20 $382.20 $428.20 *As of March 31, 2012 **as of June 30, 2011 Source: FactSet, Wells Fargo Advisors 9 Russell1000ValuecontainsthoseRussell1000(largercapitalization)securitieswithaless-than-averagegrowthorientation. Securitiesinthisindexgenerallyhavelowerprice-to-bookandprice-to-earningsratios,higherdividendyields,andlower forecastedgrowthrates. Russell1000Growth containsthoseRussell1000(largercapitalization)securitieswithagreater-than-averagegrowth orientation.Securitiesinthisindexgenerallyhavehigherprice-to-bookandprice-to-earningsratios,lowerdividendyields, andhigherforecastedgrowthrates. Russell2000ValuecontainsthoseRussell2000(smallercapitalization)securitieswithaless-than-averagegrowth orientation.Securitiesinthisindexgenerallyhavelowerprice-to-bookandprice-to-earningsratiosthanthoseintheRussell 2000GrowthIndex. Russell2000Growth containsthoseRussell2000(smallercapitalization)securitieswithagreater-than-averagegrowth orientation.Securitiesinthisindexgenerallyhavehigherprice-to-bookandprice-to-earningsratiosthanthoseintheRussell 2000ValueIndex. MSCIEAFEistheMorganStanleyCapitalInternationalEurope,Australia,FarEastIndexdesignedtomeasurethe performanceofdevelopedstockmarketsintheseareas. BarclaysAggBondistheLehmanBrothersAggregateBondIndex.ThisindexincludesU.S.government,corporateand mortgage-backedsecuritiesratedinvestmentgradeorhigherwithmaturitiesupto30years. S&P500isarepresentativesampleof500leadingcompaniesinleadingindustriesoftheU.S.economy. DJWilshireREITisintendedasabroadmeasureoftheperformanceofpubliclytradedrealestateequity.Theindexis comprisedofcompanieswhosecharteristheequityownershipandoperationofcommercialrealestate. CAPITAL MARKETS REVIEW –JUNE 30, 2012 CAPITAL MARKET INDEX RETURNS Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:Morningstar Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. 19931994199519961997199819992000200120022003200420052006200720082009201020112012 Russell DJ Russell Russell Russell DJ Russell BarclaysRussell DJ DJ DJ Russell BarclaysRussell Russell DJ DJ BEST 1000Wilshire 100010002000Wilshire 2000Agg2000Wilshire Wilshire Wilshire 1000Agg10002000Wilshire Wilshire ValueREITValueGrowthGrowthREITValueBondGrowthREITREITREITGrowthBondGrowthGrowthREITREIT 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%9.37%14.91% Russell Russell Russell Russell Russell DJ DJ Russell Russell Russell Russell DJ BarclaysRussell 20001000100010002000Wilshire Wilshire 2000200020002000Wilshire Agg1000 ValueGrowthGrowthGrowthValueREITREITValueValueValueGrowthREITBondGrowth 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%7.84%10.08% Russell DJ Russell Russell BarclaysBarclaysRussell Russell Russell Russell Russell Russell Russell 1000Wilshire 10002000AggAgg2000100020002000100020001000 ValueREITGrowthValueBondBondValueValueValueGrowthValueValueGrowth 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%2.64%9.49% DJ Russell Russell Russell Russell Russell Russell Russell DJ Russell Russell Russell BarclaysDJ Russell Russell Wilshire 2000100010001000100010001000Wilshire 100010001000AggWilshire 10002000 REITGrowthValueGrowthValueValueValueValueREITValueGrowthValueBondREITGrowthGrowth 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%2.11%8.82% Russell Russell Russell Russell DJ BarclaysRussell Russell Russell Russell Russell Russell Russell Russell 2000200020002000Wilshire Agg10002000100020001000100010001000 GrowthValueValueValueREITBondValueGrowthValueGrowthGrowthValueValueValue 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%0.39%8.68% Russell BarclaysRussell Russell Russell DJ Russell Russell Russell Russell Russell Russell Russell Russell 1000Agg200020002000Wilshire 10002000200010002000200020002000 ValueBondGrowthGrowthGrowthREITGrowthValueGrowthValueGrowthValueGrowthValue 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%-2.91%8.23% BarclaysRussell DJ BarclaysRussell BarclaysRussell Russell Russell Russell Russell Russell Russell DJ Russell Russell Agg2000Wilshire Agg2000Agg1000100010001000200010002000Wilshire 10002000 BondGrowthREITBondValueBondGrowthGrowthGrowthGrowthGrowthGrowthValueREITValueValue 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%-5.50%2.96% Russell BarclaysBarclaysDJ Russell Russell Russell BarclaysBarclaysBarclaysBarclaysDJ BarclaysBarclaysBarclays 1000AggAggWilshire 200020002000AggAggAggAggWilshire AggAggAgg WORST GrowthBondBondREITValueGrowthGrowthBondBondBondBondREITBondBondBond 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%-12.14%2.37% MSCI EAFE MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 S&P 500 S&P 500 S&P 500 MSCI EAFE MSCI EAFE S&P 500 S&P 500 MSCI EAFE MSCI EAFE MSCI EAFE MSCI EAFE MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE S&P 500 S&P 500 MSCI EAFE MSCI EAFE MSCI EAFE MSCI EAFE S&P 500 MSCI EAFE MSCI EAFE S&P 500 S&P 500 S&P 500 S&P 500 MSCI EAFE S&P 500 S&P 500 S&P 500 S&P 500 10 CAPITAL MARKETS REVIEW –JUNE 30, 2012 RELATIVE PERFORMANCE OF KEY INDICES Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:Morningstar Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. Aug '82 –DJIA 776 Black Monday -Oct '87 Asian Crisis Invasion of Iraq -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 - 12/1012/10 - 12/11 Domestic Equity vs. Fixed IncomeMean1 Standard Deviation2 Standard Deviations Fixed Income Outperforming Domestic Equity OutperformingDomestic Equity vs. Fixed Income -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 - 12/1012/10 - 12/11 Domestic Equity vs. Foreign EquityMean1 Standard Deviation2 Standard Deviations Foreign Equity Outperforming Domestic Equity OutperformingDomestic Equity vs. Foreign Equity Aug '82 –DJIA 776 Black Monday -Oct '87 Asian Crisis Invasion of Iraq 11 CAPITAL MARKETS REVIEW –JUNE 30, 2012 RELATIVE PERFORMANCE OF KEY INDICES Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:Morningstar Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. -40 -20 0 20 40 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 - 12/1012/10 - 12/11 Large Cap vs. Small CapMean1 Standard Deviation2 Standard Deviations Small Cap Outperforming Large Cap OutperformingLarge Cap vs. Small Cap -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 - 12/1012/10 - 12/11 Large Value vs. Large GrowthMean1 Standard Deviation2 Standard Deviations Growth Outperforming Value OutperformingLarge Value vs. Large Growth 12 CAPITAL MARKETS REVIEW –JUNE 30, 2012 RELATIVE PERFORMANCE OF KEY INDICES Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:Morningstar Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. -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 - 12/1012/10 - 12/11 Small Value vs. Small GrowthMean1 Standard Deviation2 Standard Deviations Growth Outperforming Value OutperformingSmall Value vs. Small Growth -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 - 12/1012/10 - 12/11 Domestic Equity vs. REITMean1 Standard Deviation2 Standard Deviations REIT Outperforming Domestic Equity OutperformingDomestic Equity vs. REIT 13 CAPITAL MARKETS REVIEW –JUNE 30, 2012 RELATIVE PERFORMANCE OF KEY INDICES Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. DataSources:Morningstar Dataprovidedbysourcesbelievedtobereliablebutnoguaranteeismadeastoitsaccuracy.Pastperformanceisnoguaranteeoffutureperformance. -120 -100 -80 -60 -40 -20 0 20 40 60 80 100 120 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 - 12/1012/10 - 12/11 Fixed Income vs. REITMean1 Standard Deviation2 Standard Deviations REIT Outperforming Fixed Income OutperformingFixed Income vs. REIT 14 FIRM:WellsFargoAdvisorsisthetradenameusedbytwoseparate,registeredbroker/dealersandnonbankaffiliatesof WellsFargo&Company,providingcertainretailsecuritiesbrokerageservices:WellsFargoAdvisors,LLC.,member FINRA,SIPC,andWellsFargoFinancialNetwork,LLC,memberFINRA,SIPC.Investmentsinsecuritiesandinsurance productsare:NOTFDIC-INSURED/NOTBANK-GUARANTEED/MAYLOSEVALUE. CONFLICTSOFINTEREST:Toreviewimportantinformationaboutcertainrelationshipsandpotentialconflictsof interestthatmayexistbetweenWellsFargoAdvisors,itsaffiliates,andthecompaniesthatarementionedinthisreport, pleasevisittheourresearchdisclosurepageatwww.wellsfargoadvisors.com/gotoresearchdisclosuresorcallyour FinancialAdvisor. STATEMENTOFOPINION:Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsources whichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy.Anyopinionsexpressedor impliedhereinarenotnecessarilythesameasthoseofWellsFargoAdvisorsoritsaffiliatesandaresubjecttochange withoutnotice.Thereporthereinisnotacompleteanalysisofeverymaterialfactinrespecttoanycompany,industryor security.Anymarketpricesareonlyindicationsofmarketvaluesandaresubjecttochange.Thematerialhasbeen preparedorisdistributedsolelyforinformationpurposesandisnotasolicitationoranoffertobuyanysecurityor instrumentortoparticipateinanytradingstrategy.Additionalinformationisavailableuponrequest. ASSETCLASSSUITABILITY:Stocksofsmallcompaniesaretypicallymorevolatilethanstocksoflargercompanies. Theyofteninvolvehigherrisksbecausetheymaylackthemanagementexpertise,financialresources,product diversificationandcompetitivestrengthstoendureadverseeconomicconditions.High-yield,non-investmentgradebonds areonlysuitableforaggressiveinvestorswillingtotakegreaterrisks,whichcouldresultinlossofprincipalandinterest payments.Global/InternationalinvestinginvolvesrisksnottypicallyassociatedwithUSinvesting,includingcurrency fluctuations,politicalinstability,uncertaineconomicconditionsanddifferentaccountingstandards. PASTPERFORMANCE:Pastperformanceisnotanindicationoffutureresults. ASSETCLASSPERFORMANCEREPRESENTATIONS:LongTermTreasuries=BCTreasuryLong;Municipals= BCMunicipal;ForeignBonds=SalomonWorldBIG–IB;USGovt/Credit=BCGovt/Credit;MtgeBackedSecurities= MLMortgageMaster;CorporateBonds=SalomonCorporate;90DayT-Bills=Salomon;JapaneseStocks=Salomon JapanBMI;HighYieldBonds=MLHighYieldMaster;SmallCapUSValue=RU2000Value;MidCapUSStocks= RUMidcap;LargeCapUSValue=RU1000Value;EuropeanStocks=SalomonEuropeBMI;SmallCapUSStocks= RU2000;LgCapUSGrowth=RU1000Growth;LatinAmericanStocks=SalomonLatinAmericaBMI;SmCapUS Growth=RU2000Growth BROADEQUITYMARKET&SECTORPERFORMANCEREPRESENTATIONS:Large-Cap=S&P500or Russell1000;Mid-Cap=RUMidcap;Small-Cap=RU2000;International=MSCIEAFE DATASOURCES:Informationfoundinthisdocumentwasderivedfromthefollowingsources:ZephyrAssociates StyleAdvisor,InformaM-Watch,InvestorForce,BarclaysCapital,MSCIBarra,Standard&Poor’s,andMorningstar. CAPITAL MARKETS REVIEW –JUNE 30, 2012 GENERAL DISCLOSURE STATEMENT Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. 15 CAPITAL MARKETS REVIEW –JUNE 30, 2012 GENERAL DISCLOSURE STATEMENT DowJonesIndustrialAverage-Thisindexiscomprisedof30"blue-chip"USstocksselectedfortheirhistoryofsuccessful growthandwideinterestamonginvestors.TheDJIArepresentsabout20%ofthetotalmarketvalueofallUSstocksandabout25%oftheNYSEmarketcapitalization.Itisaprice-weightedarithmeticaverage,withthedivisoradjusted toreflectstocksplitsandtheoccasionalstockswitchesintheindex. NASDAQComposite-Acap-weightedindexcomprisedofallcommonstocksthatarelistedontheNASDAQStockMarket(NationalAssociationofSecuritiesDealersAutomatedQuotationsystem). S&P500-Abroad-basedmeasurementofchangesinstockmarketconditionsbasedontheaverageperformanceof500widely heldcommonstocks.Thisindexdoesnotcontainthe500largestcompaniesnorthemostexpensivestockstradedintheU.S.Whilemanyofthestocksareamongthelargest,thisindexalsoincludesmanyrelativelysmallcompanies.Thisindexconsistsofapproximately380industrial,40utility,10transportationand70financialcompanieslistedonU.S.marketexchanges.Itisacapitalization-weightedindex(stockpricetimesnumberofsharesoutstanding),calculatedonatotalreturnbasiswithdividendsreinvested. S&P500/CitigroupGrowth-TheS&P/CitigroupGrowthtrackstheperformanceofthosestocksintheS&P500withlowerbook-to-priceratios.Acap-weightedindex,itisrebalancedsemi-annually,basedonitsprice-to-bookratiosandmarket capitalizationsatthecloseoftradingonemonthprior.TheindexisadjustedeachmonthtoreflectchangesintheS&P500.Thisindexismoreheavilyweightedintheconsumernon-cyclical,healthcare,andtechnologysectorsthantheS&P500. S&P500/CitigroupValue-TheS&PCitigroup/ValuetrackstheperformanceofthosestocksintheS&P500withhigherbook-to-priceratios.Acap-weightedindex,itisrebalancedsemi-annuallyonJanuary1andJuly1,basedonitsbook-to-priceratiosandmarketcapitalizationsatthecloseoftradingonemonthprior.TheindexisadjustedeachmonthtoreflectchangesintheS&P500.Thisindextendstobemoreheavilyconcentratedintheenergyandfinancialsectorsthan theS&P500. Russell1000-The1000largestcompaniesintheRussell3000index,basedonmarketcapitalization. Russell1000Growth-AsegmentoftheRussell1000withagreater-than-averagegrowthorientation.Companiesinthisindexhavehigherprice-to-bookandprice-earningsratios,lowerdividendyieldsandhigherforecastedgrowthvaluesthanthe Russell1000Valueindex. Russell1000Value-RepresentsasegmentoftheRussell1000withaless-than-averagegrowthorientation.Companiesin thisindexhavelowprice-to-bookandprice-earningsratios,higherdividendyieldsandlowerforecastedgrowthvaluesthantheRussell1000GrowthIndex. RussellMidCap-Theindexconsistingofthebottom800securitiesintheRussell1000asrankedbytotalmarketcapitalization,anditrepresentsover35%oftheRussell1000totalmarketcap. Russell2000-The2000smallestcompaniesintheRussell3000index. Russell2000Growth-AsegmentoftheRussell2000withagreater-than-averagegrowthorientation.Companiesinthisindex havehigherprice-to-bookandprice-earningsratios,lowerdividendyieldsandhigherforecastedgrowthvaluesthantheRussell2000Valueindex. Russell2000Value-AsegmentoftheRussell2000withaless-than-averagegrowthorientation.Companiesinthisindexhavelowprice-to-bookandprice-earningsratios,higherdividendyieldsandlowerforecastedgrowthvaluesthantheRussell2000Growthindex. Russell2500-Theindexconsistingofthebottom500stocksintheRussell1000(asrankedbymarketcapitalization)andallofthestocksintheRussell2000.Thisindexisintendedtobeusedasameasureofsmalltomedium/smallstockperformance,anditrepresentsover22%oftheRussell3000totalmarketcap. Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. 16 CAPITAL MARKETS REVIEW –JUNE 30, 2012 GENERAL DISCLOSURE STATEMENT MSCIEAFE-Amarketcapitalization-weightedindexrepresentingalloftheMSCIdevelopedmarketsoutsideNorthAmerica.Itcomprises20ofthe22countriesintheMSCIWorld.These20countriesincludethe14EuropeancountriesintheMSCIEuropeandthe6PacificcountriesintheMSCIPacific.Thisindexiscreatedbyaggregatingthe20differentcountry indexes,allifwhicharecreatedseparately. MSCIWorld-Thismarketcapitalization-weightedindexrepresentsall22oftheMSCIdevelopedmarketsintheworld.Itiscreatedbyaggregatingthe22differentcountryindexes,allifwhicharecreatedseparately. MSCIEmergingMarketsFree(EMF)-Amarketcapitalization-weightedindexrepresenting26oftheemergingmarketsintheworld.Severalfactorsareusedtodesignatewhetheracountryisconsideredtobeemergingvs.developed,themostcommonofwhichisGrossDomesticProductPerCapita.The"Free"aspectindicatesthatthisindexincludesonlysecuritiesthatareallowedtobepurchasedbyglobalinvestors.Thisindexiscreatedbyaggregatingthe26differentcountry indexes,allifwhicharecreatedseparately. BarclaysCapitalGovernment/Credit-ThisindexincludesallbondsthatareintheBarclaysCapitalGovernmentBondand theBarclaysCapitalCreditBondindices. BarclaysCapitalGovernmentIntermediate-AllbondscoveredbytheBarclaysCapitalGovernmentBondindexwithmaturities of1and10years. BarclaysCapitalAggregateBond-ThisindexismadeupoftheBarclaysCapitalGovernment/Credit,theMortgage-BackedSecurities,andtheAsset-BackedSecuritiesindices.Allissuesintheindexareratedinvestmentgradeorhigher,haveatleastoneyeartomaturity,andhaveanoutstandingparvalueofatleast$100million. BarclaysCapitalGovernmentLongTerm-AllbondscoveredbytheBarclaysCapitalGovernmentBondindexwithmaturitiesof10yearsorgreater. BarclaysCapitalMunicipalBond-Thismarketcapweightedindexincludesinvestmentgradetax-exemptbondsandisclassified intofourmainsectors:GeneralObligation,Revenue,Insured,andPre-refunded.Tobeincludedinthisindex,theoriginaltransactionsizeofabondmusthavebeengreaterthan$50million. MerrillLynchConvertibles-Theconvertiblesecuritiesusedinthisindexspanallcorporatesectorsandmusthaveaparamountoutstandingof$25millionormore.Thematuritymustbeatleastoneyear.Thecouponrangemustbeequaltoorgreater thanzeroandallqualityofbondsareincluded.Excludedfromthisindexarepreferredequityredemptionstocks.Whenthecomponentbondsofthisindexconvertintocommonstock,theconvertedsecuritiesaredroppedfromtheindex. MerrillLynchHighYieldMaster-Market-capweightedindexprovidingabroad-basedmeasureofbondsintheUSdomesticbondmarketratedbelowinvestmentgradebutnotindefault.IncludesonlyissueswithacreditratingofBB1orbelow asratedbyMoody’sand/orS&P,atleast$100millioninfacevalueoutstandingandaremainingtermtofinalmaturityequaltoorgreaterthanoneyear. DowJonesWilshireREITIndex-AmeasurementofequityREITsandRealEstateOperatingCompanies.Nospecial-purposeorhealthcareREITsareincluded.Itisamarketcapitalization-weightedindexforwhichreturnsarecalculatedmonthlyusingbuyandholdmethodology;itisrebalancedmonthly. Citigroup3MonthTreasuryBill-Representingthemonthlyreturnequivalentsofyieldaveragesthatarenotmarkedtomarket,thisindexisanaverageofthelastthreethree-monthTreasurybillissues. 50/50Blend(S&P500/BCIGC)–Ablendedbenchmarkconsistingof50%S&P500and50%BarclaysCapitalGovernment/CreditIntermediateindices. Thisand/ortheaccompanyinginformationwaspreparedbyorobtainedfromsourceswhichWellsFargoAdvisorsbelievestobereliablebutdoesnotguaranteeitsaccuracy. Pleaseseeimportantdisclosureandreferenceinformationattheconclusionofthisreport.Pastperformanceisnotindicativeoffutureresults. 17 18 City of Clearwater Asset Allocation vs Target & Policy Total Fund As of 6/30/12 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 Earnest Partners Wentworth & Violich Eaton Vance Mgmt Total International Equity Dodge & Cox Western Asset Management Co. Security Lending Income Account In House Account Total Domestic Fixed Income Multi Employer Property Trust Security Capital Molpus Woodlands Group Hancock Total Real Estate Total Fund 98,111,748.00 26,567,393.29 57,648,252.12 40,075,652.13 40,626,498.95 13,363,052.76 11,484,338.79 23,050,257.76 310,927,193.80 33,155,559.91 28,445,418.75 33,734,146.66 95,335,125.32 110,594,745.12 89,681,725.46 681,835.62 4,691,889.26 205,650,195.46 24,545,344.27 43,850,524.55 6,559,689.00 1,263,055.00 76,218,612.82 688,131,127.40 14.26 3.86 8.38 5.82 5.90 1.94 1.67 3.35 45.18 4.82 4.13 4.90 13.85 16.07 13.03 0.10 0.68 29.89 3.57 6.37 0.95 0.18 11.08 100.00 42.00 18.00 30.00 10.00 19 City of Clearwater Sources of Fund Growth Total Fund 3/31/12 - 6/30/12 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 Atlanta Capital Mgmt Systematic Financial Mgt Riverbridge Partners Managed Equity Earnest Partners Wentworth & Violich Eaton Vance Mgmt International EQ Comp Dodge & Cox Western Asset Management Co. Security Lending Income Account In House Account Fixed Income Comp Multi Employer Property Trust Security Capital Molpus Woodlands Group Hancock Real Estate Comp Total Fund 107,892,567 28,757,762 58,940,021 43,251,905 41,360,335 13,793,218 12,134,999 22,429,282 328,560,090 36,460,839 30,019,077 36,495,574 102,975,489 113,988,281 87,893,782 309,302 3,939,739 206,131,103 24,048,039 46,514,449 2,863,689 0 73,426,176 711,092,859 -5,000,649 -146 0 -660 -460 -211 -91 -288 -5,002,505 -1,858 -1,792 0 -3,649 -5,001,012 -2,961 371,340 752,150 -3,880,483 0 -4,000,169 3,696,000 1,263,055 958,886 -7,927,751 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -4,780,170 -2,190,223 -1,291,768 -3,175,593 -733,376 -429,954 -650,570 621,264 -12,630,391 -3,303,421 -1,571,866 -2,761,427 -7,636,714 1,607,476 1,790,905 1,194 0 3,399,575 497,306 1,336,245 0 0 1,833,550 -15,033,981 98,111,748 26,567,393 57,648,252 40,075,652 40,626,499 13,363,053 11,484,339 23,050,258 310,927,194 33,155,560 28,445,419 33,734,147 95,335,125 110,594,745 89,681,725 681,836 4,691,889 205,650,195 24,545,344 43,850,525 6,559,689 1,263,055 76,218,613 688,131,127 20 City of Clearwater Executive Summary Table Periods Ending June 30, 2012 Net of Fee Return Name Value $(000) Periods Ending 6/30/12 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 Wentworth & Violich MSCI EAFE Fixed Income Comp BC Agg 688,131 310,927 182,327 26,567 98,112 57,648 80,702 40,076 40,626 47,898 13,363 23,050 11,484 95,335 33,156 33,734 28,445 205,650 -2.10 -1.57 -3.83 -2.75 -4.20 -3.12 -7.62 -2.20 -4.39 -4.01 -2.19 -2.20 -4.62 -4.41 -7.34 -5.60 -1.77 -3.26 -0.95 -3.47 -3.12 -3.01 2.77 -3.94 -5.36 -3.01 -7.42 -6.85 -9.06 -6.85 -7.57 -8.78 -5.24 -6.85 1.67 2.06 1.29 3.69 2.19 5.44 2.13 4.38 -13.00 3.00 6.94 5.77 1.81 3.00 1.71 -1.67 1.45 -2.99 1.92 -0.40 3.79 -2.06 3.29 -1.43 7.10 -2.73 -1.76 -1.43 -14.16 -13.38 -14.72 -13.38 -14.88 -15.67 -12.10 -13.38 6.52 7.48 14.64 14.19 18.48 16.39 16.21 16.64 9.79 15.80 18.39 17.50 15.57 15.80 22.03 19.44 22.61 19.01 21.43 19.92 20.41 17.80 20.81 17.43 21.22 17.43 9.62 6.45 11.20 6.45 10.56 10.10 11.09 6.45 7.82 6.93 3.79 2.78 1.82 0.22 0.57 0.38 -3.96 -2.19 4.15 2.87 -2.25 -2.19 3.70 1.05 6.46 1.90 2.54 -0.13 2.56 0.54 8.48 -1.05 -0.45 -1.05 -3.29 -5.63 7.29 6.80 6.14 5.95 5.53 4.10 4.14 4.26 6.60 5.51 7.42 5.42 9.85 5.83 6.59 4.61 10.18 3.38 5.36 3.38 4.67 2.79 6.10 5.58 6.75 7.43 6.85 5.33 5.55 5.71 6.99 6.03 8.67 8.45 10.31 8.46 6.08 5.62 5.90 5.63 6.25 6.48 5.94 4.78 4.75 5.10 6.68 3.88 7.92 8.14 6.11 6.27 9.07 9.32 10.55 9.66 9.64 9.63 -3.96 -2.19 11.02 9.10 -2.25 -2.19 12.01 11.09 8.22 5.42 3.53 0.76 7.89 6.88 10.98 6.81 19.51 12.92 6.69 6.81 4.65 3.76 -1.36 -5.97 -2.30 -2.92 -3.42 -5.97 6.96 7.31 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 4/30/08 4/30/08 12/31/87 12/31/87 21 City of Clearwater Executive Summary Table Periods Ending June 30, 2012 Net of Fee Return Name Value $(000) Periods Ending 6/30/12 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 Policy Index Hancock NCREIF Timberland Index Molpus Woodlands Group NCREIF Timberland Index Multi Employer Property Trust NCREIF ODCE Security Capital Wilshire RESI 110,595 4,692 682 89,682 76,219 1,263 6,560 24,545 43,851 1.42 2.06 0.00 0.02 0.37 0.02 2.04 2.06 2.47 3.22 0.00 0.61 2.07 2.58 3.10 3.54 6.07 7.48 0.00 0.04 4.29 0.04 7.15 7.48 9.73 13.25 -2.39 1.13 9.80 12.43 10.95 12.56 8.14 6.93 0.00 0.10 14.84 0.10 7.36 6.93 31.85 32.15 33.16 33.58 7.25 6.80 0.00 0.87 9.95 0.87 7.21 6.80 6.24 5.58 0.00 1.90 8.40 1.90 5.92 5.58 0.00 1.77 0.00 2.73 5.76 5.28 0.75 3.84 6.84 1.81 5.82 5.49 2.31 2.76 0.00 0.61 -2.39 1.13 12.41 15.38 3.04 3.51 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 5/31/12 5/31/12 6/30/11 6/30/11 9/30/10 9/30/10 4/30/08 4/30/08 22 City of Clearwater Executive Summary Table June 30, 2012 Net of Fee Return Name Value $(000) Calendar Years YTD 2011 2010 2009 2008 2007 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 Wentworth & Violich MSCI EAFE Fixed Income Comp BC Agg 688,131 310,927 182,327 26,567 98,112 57,648 80,702 40,076 40,626 47,898 13,363 23,050 11,484 95,335 33,156 33,734 28,445 205,650 7.00 6.99 10.05 9.48 9.23 9.38 0.88 8.67 11.88 10.09 8.73 8.67 11.89 7.96 12.17 8.11 11.61 7.76 10.24 8.53 5.33 8.23 12.56 8.81 11.68 8.23 3.02 3.38 -1.04 3.38 5.52 4.12 5.02 3.38 3.44 2.37 -0.36 1.81 -0.21 2.12 -0.90 1.51 -13.18 0.39 3.04 2.63 -0.77 0.39 -0.10 -1.56 0.07 -1.66 -0.33 -1.38 2.07 -4.17 10.20 -5.50 4.27 -2.92 -9.91 -5.50 -15.04 -11.73 -6.88 -11.73 -19.27 -18.17 -13.64 -11.73 5.94 7.84 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 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 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 23 City of Clearwater Executive Summary Table June 30, 2012 Net of Fee Return Name Value $(000) Calendar Years YTD 2011 2010 2009 2008 2007 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 Policy Index Hancock NCREIF Timberland Index Molpus Woodlands Group NCREIF Timberland Index Multi Employer Property Trust NCREIF ODCE Security Capital Wilshire RESI 110,595 4,692 682 89,682 76,219 1,263 6,560 24,545 43,851 4.08 2.37 0.00 0.03 4.11 0.03 2.70 2.37 9.84 11.74 -0.37 0.97 3.72 5.47 14.29 14.85 5.10 7.84 0.00 0.08 2.85 0.08 7.23 7.84 8.85 11.62 12.99 15.99 6.86 8.56 7.53 6.54 0.00 0.13 21.70 0.13 7.09 6.54 30.51 24.96 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 24 City of Clearwater Cumulative Performance Comparison Total Returns of Total Fund Public Sponsors Periods Ending 6/12 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 -0.44 -1.49 -2.38 -2.89 -3.61 -2.10 42 -1.57 27 4.24 2.16 1.12 0.08 -1.50 1.29 39 3.69 5 12.40 11.54 10.62 9.97 7.85 12.39 5 12.76 2 13.45 11.98 10.88 10.53 8.44 14.64 2 14.19 4 5.82 4.86 3.67 2.57 1.03 6.24 2 5.00 20 4.09 3.17 2.07 0.93 -0.28 3.79 7 2.78 30 5.83 4.99 4.27 3.62 2.54 5.59 9 5.15 18 6.40 5.43 4.83 4.29 3.59 6.14 7 5.95 13 6.98 5.77 5.27 4.76 4.19 6.34 13 6.71 6 8.06 6.68 6.13 5.64 4.89 6.98 15 7.79 6 7.76 6.61 5.91 5.54 4.79 6.75 17 7.43 7 -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% T1 T 1 T1 T1 T 1 T 1 T1 T1 T1 T 1 T 1 25 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 6/30/12 YTD2011201020092008200720062005200420032002 7.49 5.94 5.52 5.01 3.60 7.00 5 6.99 5 4.54 1.86 1.04 0.02 -1.83 -0.36 79 1.81 28 16.74 14.05 12.67 11.43 8.92 17.73 3 13.96 27 27.92 22.24 19.53 16.01 10.11 30.28 3 26.00 8 -10.14 -20.65 -24.73 -27.30 -30.38 -27.10 73 -27.73 79 11.17 8.95 7.71 6.40 4.61 7.20 60 6.69 69 16.43 14.33 12.47 10.61 7.46 11.76 58 16.59 4 10.75 8.46 6.62 5.36 4.02 6.71 49 8.25 27 14.38 12.07 10.16 8.56 5.76 9.90 55 13.48 8 27.27 23.21 20.26 17.46 11.64 19.63 55 25.03 12 1.46 -5.91 -8.13 -9.63 -12.74 -8.74 62 -8.11 49 -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% T1 T1 T 1 T 1 T1 T1 T 1 T1 T 1 T 1 T1 26 City of Clearwater Performance Summary Total Fund June 30, 2012 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Qtr YTD 1 Year 3 Year 5 Year 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 -2.10 -1.57 42 -4.39 -4.01 36 -7.62 -2.20 93 -2.19 -2.20 28 -7.34 -5.60 66 -1.77 -3.26 12 -3.12 -3.01 34 7.00 6.99 5 11.88 10.09 15 0.88 8.67 93 8.73 8.67 20 12.17 8.11 7 11.61 7.76 10 5.33 8.23 77 1.29 3.69 39 6.94 5.77 16 -13.00 3.00 99 1.81 3.00 54 1.45 -2.99 15 1.92 -0.40 25 3.29 -1.43 5 14.65 14.19 2 18.39 17.50 18 9.79 15.80 95 15.57 15.80 35 22.61 19.01 7 21.43 19.92 8 20.81 17.43 25 3.79 2.78 7 4.15 2.87 16 -3.96 -2.19 94 -2.25 -2.19 72 6.46 1.90 5 2.54 -0.13 36 8.48 -1.05 1 9.07 9.32 11.02 9.10 -3.96 -2.19 94 -2.25 -2.19 72 8.22 5.42 3.53 0.76 10.98 6.81 12/31/87 12/31/87 6/30/07 6/30/07 7/31/01 2/28/07 8/31/03 $688,131,127 $98,111,748 $26,567,393 $57,648,252 $40,075,652 $40,626,499 $13,363,053 27 City of Clearwater Performance Summary Total Fund June 30, 2012 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 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 Multi Employer Property Trust NCREIF ODCE Rank -5.36 -3.01 85 2.77 -3.94 1 -9.06 -6.85 88 -5.24 -6.85 25 -7.57 -8.78 51 1.42 2.06 64 2.04 2.06 45 0.37 0.02 0.00 0.02 2.07 2.58 59 11.68 8.23 5 12.56 8.81 9 -1.04 3.38 95 5.02 3.38 40 5.52 4.12 44 4.08 2.37 42 2.70 2.37 66 4.11 0.03 0.00 0.03 3.72 5.47 75 -1.76 -1.43 52 7.10 -2.73 1 -14.72 -13.38 69 -12.10 -13.38 42 -14.88 -15.67 61 6.07 7.48 61 7.15 7.48 44 4.29 0.04 0.00 0.04 9.80 12.43 58 21.22 17.43 19 11.20 6.45 23 11.09 6.45 24 10.79 10.10 48 8.14 6.93 49 7.36 6.93 60 15.84 0.10 0.00 0.10 -0.45 -1.05 78 7.25 6.80 46 7.21 6.80 47 10.52 0.87 0.00 0.87 6.69 6.81 19.51 12.92 -1.36 -5.97 -3.42 -5.97 -2.15 -2.92 5.76 5.28 5.82 5.49 7.15 1.81 0.75 3.84 12.41 15.38 8/31/03 9/30/10 4/30/08 4/30/08 4/30/08 2/29/04 9/30/04 6/30/03 12/31/87 9/30/10 $11,484,339 $23,050,258 $33,155,560 $28,445,419 $33,734,147 $110,594,745 $89,681,725 $681,836 $4,691,889 $24,545,344 28 City of Clearwater Performance Summary Total Fund June 30, 2012 Cur Qtr YTD 1 Year 3 Yrs 5 Yrs Incept Incept Date Cur Assets Security Capital Wilshire RESI Rank Molpus Woodlands Group NCREIF Timberland Index Rank Hancock NCREIF Timberland Index 3.10 3.54 30 0.00 0.61 89 14.29 14.85 20 -0.37 0.97 93 10.95 12.56 51 -2.39 1.13 91 33.16 33.58 5 3.04 3.51 -2.39 1.13 0.00 0.61 4/30/08 6/30/11 5/31/12 $43,850,525 $6,559,689 $1,263,055 29 30 City of Clearwater Domestic Equity Comp as of 6/30/12 Apple Inc Microsoft Corp Google Inc Philip Morris Intl I Oracle Systems Corp Wyndham Worldwide Co Abbott Labs Wal Mart Stores Inc Comcast Corp New Costco Whsl Corp New GICS Sector% Port Information Technology Information Technology Information Technology Consumer Staples Information Technology Consumer Discretionary Health Care Consumer Staples Consumer Discretionary Consumer Staples 3.61 1.67 1.43 1.42 1.29 1.22 0.95 0.95 0.93 0.89 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 6.06 4.61 14.06 15.78 8.28 13.68 10.81 24.18 0.21 2.33 -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 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 -3.83 -2.75 328,560 -5,003 -12,630 310,927 10.05 9.48 287,135 -5,005 28,797 310,927 2.19 5.44 308,476 -4,513 6,964 310,927 18.48 16.39 193,740 -9,649 126,836 310,927 1.82 0.22 334,428 -9,649 -13,852 310,927 6.85 5.33 200,820 -9,649 119,755 310,927 10.55 9.66 32,236 -9,649 288,340 310,927 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 31 City of Clearwater Domestic Equity Comp as of 6/30/12 Cash & Equiv $7,059 2.27% Domestic Equity $302,863 97.41% Other $1,006 0.32% Periods from 12/87 to 6/12 Alpha Beta R-Squared 0.14 1.09 0.94 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 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 10.55 9.66 3.98 18.15 16.13 1.21 0.36 0.35 0.00 0.22 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 32 City of Clearwater Cumulative Performance Comparison Total Returns of Equity Portfolios Periods Ending 6/12 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 0.72 -2.61 -3.85 -5.63 -8.84 -3.83 49 -2.75 29 10.61 4.66 0.90 -3.18 -10.87 2.19 42 5.44 17 21.82 17.57 15.62 13.12 4.56 17.93 22 17.39 30 23.35 18.82 16.42 14.59 8.93 18.48 28 16.39 51 10.04 5.81 4.16 2.66 -0.88 5.48 28 3.86 60 5.36 2.66 1.00 -0.58 -3.07 1.82 37 0.22 62 7.86 5.19 3.73 2.64 0.45 4.42 39 3.36 61 9.19 6.31 4.81 3.96 2.11 5.53 39 4.10 71 9.38 6.93 5.49 4.46 3.05 5.82 44 4.37 80 11.56 9.30 7.38 6.14 4.92 7.41 49 5.91 84 10.69 8.49 6.79 5.45 4.48 6.85 49 5.33 81 -15% -10% -5% 0% 5% 10% 15% 20% 25% E1 E 1 E1 E 1 E 1 E 1 E1 E 1 E 1 E 1 E 1 33 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 6/30/12 YTD2011201020092008200720062005200420032002 12.73 9.47 7.70 5.26 0.40 10.05 16 9.48 24 7.93 2.21 -0.02 -4.07 -10.98 -0.21 51 2.12 27 32.53 25.05 16.92 13.55 4.09 22.53 31 15.05 65 54.34 36.66 28.73 24.10 8.68 32.14 38 26.45 64 -16.26 -33.45 -37.01 -41.04 -49.21 -37.76 57 -36.99 49 22.30 10.23 5.43 0.41 -7.24 7.18 36 5.52 47 23.16 17.55 14.63 10.14 1.75 13.01 61 15.81 38 15.83 10.49 6.95 4.57 -0.10 8.12 41 4.89 70 25.39 18.13 13.04 9.97 3.32 13.18 49 10.87 68 58.56 39.20 31.40 27.48 17.66 33.74 41 28.69 66 -3.34 -14.43 -20.82 -24.65 -35.37 -21.30 53 -22.12 63 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% E1 E1 E 1 E 1 E1 E1 E1 E1 E1 E 1 E1 34 City of Clearwater Risk Measure Summary Domestic Equity Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.04 1.20 0.25 -16.27 14.43 2.19 2.19 2 2 -13.86 12.58 5.44 5.44 3 9 1.11 1.05 0.67 -16.27 16.83 -0.21 36.09 20.39 1.06 0.25 0.98 0.90 17.25 2.83 0.74 3 9 -13.86 15.60 1.15 30.69 19.02 0.86 8 12 1.11 1.01 0.60 -23.59 18.14 -37.76 55.86 23.30 1.07 0.46 0.99 0.04 0.79 2.93 0.65 9 11 -21.93 15.93 -38.07 49.75 21.74 -0.03 32 66 1.09 1.05 0.54 -23.59 22.08 -37.76 55.86 18.15 1.09 0.14 0.94 0.36 6.02 4.79 0.22 28 70 -21.93 21.32 -38.07 49.75 16.13 0.35 35 City of Clearwater Return vs Risk Total Returns of Equity Portfolios Annualized Rate of Return 10.012.214.416.618.821.023.225.427.629.832.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 E S MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank E Domestic Equity Comp S Standard & Poors 500 Median 18.482820.3943 16.395119.0223 16.4221.27 Annualized Rate of Return 14.016.018.020.022.024.026.028.030.032.034.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 E S MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank E Domestic Equity Comp S Standard & Poors 500 Median 1.823723.3049 0.226221.7426 1.0023.48 36 City of Clearwater Large Cap Equity Comp as of 6/30/12 Apple Inc Microsoft Corp Google Inc Philip Morris Intl I Oracle Systems Corp Abbott Labs Wal Mart Stores Inc Comcast Corp New Costco Whsl Corp New Home Depot Inc GICS Sector% Port Information Technology Information Technology Information Technology Consumer Staples Information Technology Health Care Consumer Staples Consumer Discretionary Consumer Staples Consumer Discretionary 7.28 3.37 2.89 2.87 2.61 1.92 1.91 1.88 1.80 1.77 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 6.66 6.58 9.96 15.76 13.44 12.20 6.16 27.62 0.43 1.20 -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 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 -4.20 -3.12 195,590 -5,001 -8,262 182,327 9.23 9.38 171,555 -5,001 15,774 182,327 2.13 4.38 172,403 4,495 5,429 182,327 16.21 16.64 84,965 38,364 58,998 182,327 0.57 0.38 172,406 38,364 -28,443 182,327 5.55 5.71 132,167 38,364 11,796 182,327 9.64 9.63 18,032 38,364 125,931 182,327 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 37 City of Clearwater Large Cap Equity Comp as of 6/30/12 Cash & Equiv $2,108 1.16% Domestic Equity $179,214 98.29% Other $1,006 0.55% Periods from 3/88 to 6/12 Alpha Beta R-Squared 0.04 0.98 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 L1 T Annualized Standard Deviation% L Large Cap Equity Comp 1 R1000 T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 9.64 9.63 3.96 16.62 16.60 1.22 0.34 0.34 0.00 -0.01 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 38 City of Clearwater Large Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 0.13 -2.40 -2.83 -4.00 -7.07 -4.20 77 -3.12 62 11.75 5.49 4.50 2.68 -6.48 2.13 79 4.38 55 20.77 17.50 17.31 14.88 10.31 16.06 68 17.36 47 22.61 16.90 16.39 15.31 11.70 16.21 59 16.64 30 7.98 4.60 3.96 3.20 -0.28 3.20 75 3.85 63 4.61 1.26 0.36 -0.18 -2.12 0.57 38 0.38 46 7.61 4.29 3.45 3.07 1.00 3.22 70 3.48 47 7.82 4.95 4.21 4.02 2.40 4.14 61 4.26 45 7.65 5.50 4.57 4.39 3.69 4.65 44 4.71 42 9.17 7.08 6.18 5.95 5.44 6.19 48 6.26 45 8.36 6.25 5.60 5.36 4.74 5.55 51 5.71 47 -10% -5% 0% 5% 10% 15% 20% 25% L1 L 1 L 1L1 L1 L1 L1 L1 L1 L1 L1 39 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 6/30/12 YTD2011201020092008200720062005200420032002 12.53 9.52 9.38 7.70 4.22 9.23 58 9.38 51 6.19 2.20 2.08 1.09 -5.69 -0.90 87 1.51 66 21.22 17.07 15.13 14.94 12.16 16.87 26 16.10 33 39.27 29.85 26.78 26.47 21.28 24.59 89 28.42 37 -27.80 -35.89 -36.95 -37.19 -41.46 -35.23 22 -37.60 81 10.93 6.14 5.54 5.25 0.65 7.76 12 5.77 32 19.93 15.93 15.78 15.46 11.16 11.52 93 15.46 75 11.98 8.40 5.10 4.90 3.97 8.63 23 6.27 38 19.81 12.56 10.92 10.82 8.99 11.24 41 11.39 40 41.03 31.54 28.73 28.60 24.65 31.37 27 29.90 39 -6.83 -20.89 -22.00 -22.08 -23.79 -22.02 54 -21.65 42 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% L1 L1 L1 L 1 L1 L1 L 1 L1 L1 L1 L1 40 City of Clearwater Risk Measure Summary Large Cap Equity Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 0.97 1.08 0.25 -15.13 14.01 2.13 2.13 2 2 -14.68 12.90 4.38 4.38 4 8 1.00 1.04 0.58 -15.13 16.91 -0.90 31.89 20.10 1.02 -0.16 0.99 0.80 15.77 1.51 -0.20 3 9 -14.68 16.07 0.91 31.95 19.63 0.84 10 10 0.98 0.98 0.65 -20.96 16.91 -37.57 49.31 21.76 0.97 0.03 0.99 -0.02 -0.42 2.17 0.02 9 11 -22.48 16.49 -38.26 51.57 22.29 -0.03 32 65 0.99 0.98 0.52 -20.96 20.12 -37.57 49.31 16.62 0.98 0.04 0.96 0.34 5.80 3.15 -0.01 28 69 -22.48 21.88 -38.26 51.57 16.60 0.34 41 City of Clearwater Return vs Risk Total Returns of Large Neutral Portfolios Annualized Rate of Return 15.016.017.018.019.020.021.022.023.0 9.0 10.5 12.0 13.5 15.0 16.5 18.0 19.5 21.0 22.5 24.0 L1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank L Large Cap Equity Comp 1 R1000 Median 16.215920.1066 16.643019.6359 16.3919.32 Annualized Rate of Return 17.018.019.020.021.022.023.024.025.026.027.0 -4.0 -3.1 -2.1 -1.2 -0.3 0.5 1.4 2.3 3.2 4.1 5.0 L 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank L Large Cap Equity Comp 1 R1000 Median 0.573821.7650 0.384622.2961 0.3621.77 42 City of Clearwater ING Investment Mgmt as of 6/30/12 Apple Inc Microsoft Corp Google Inc Philip Morris Intl I Oracle Systems Corp Abbott Labs Wal Mart Stores Inc Costco Whsl Corp New Home Depot Inc Starbucks Corp GICS Sector% Port Information Technology Information Technology Information Technology Consumer Staples Information Technology Health Care Consumer Staples Consumer Staples Consumer Discretionary Consumer Discretionary 9.21 4.27 3.66 3.63 3.30 2.43 2.41 2.27 2.23 2.09 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 4.81 2.88 11.05 17.10 13.50 12.18 5.01 33.47 0.00 0.00 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 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 -4.39 -4.01 107,893 -5,001 -4,780 98,112 11.88 10.09 92,198 -5,001 10,915 98,112 6.94 5.77 96,465 -5,003 6,650 98,112 18.39 17.50 42,933 18,384 36,795 98,112 4.15 2.87 58,137 18,384 21,591 98,112 6.99 6.03 44,601 18,384 35,126 98,112 11.02 9.10 17,469 18,384 62,259 98,112 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 43 City of Clearwater ING Investment Mgmt as of 6/30/12 Cash & Equiv $1,961 2.00% Domestic Equity $96,151 98.00% Periods from 12/87 to 6/12 Alpha Beta R-Squared 0.60 0.84 0.93 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 3.0 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 11.02 9.10 3.98 16.63 18.95 1.21 0.42 0.27 0.00 0.22 Asset Allocation ($000) Risk/Return Analysis 44 City of Clearwater Large Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 -1.09 -3.90 -5.34 -6.76 -9.75 -4.39 36 -4.01 28 12.17 5.88 2.46 -0.53 -8.51 6.94 16 5.77 25 22.89 19.39 17.17 15.00 11.61 20.16 16 19.50 21 20.85 17.73 16.11 14.04 11.33 18.39 18 17.50 29 10.98 5.49 3.86 1.80 -0.83 5.54 23 5.20 31 8.43 3.66 2.30 1.01 -0.99 4.15 16 2.87 34 8.96 5.73 4.87 3.81 2.68 6.14 17 5.41 31 8.13 6.48 5.48 4.83 3.01 6.60 22 5.51 47 7.90 6.31 5.69 4.68 3.27 6.81 16 5.02 67 9.56 7.84 6.68 6.14 4.89 8.03 19 6.38 64 8.84 7.31 6.34 5.29 4.32 6.99 28 6.03 59 -15% -10% -5% 0% 5% 10% 15% 20% 25% i1 i1 i1 i1 i1 i1 i1 i1 i 1 i 1 i1 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 6/30/12 YTD2011201020092008200720062005200420032002 13.28 10.80 9.24 7.90 3.91 11.88 15 10.09 36 6.73 2.02 -0.35 -4.06 -8.86 3.04 17 2.63 20 26.12 19.23 16.90 13.38 9.66 17.10 46 16.72 53 54.26 40.87 34.60 30.98 24.07 24.43 93 37.21 35 -28.78 -35.37 -38.47 -42.20 -49.17 -33.18 11 -38.43 49 26.93 19.47 13.78 10.95 6.24 17.10 33 11.82 68 18.07 11.84 8.69 5.02 -3.09 7.14 64 9.09 49 19.42 12.70 8.67 5.60 4.00 12.02 32 5.27 81 19.31 12.98 10.33 6.39 4.76 10.27 51 6.30 79 48.42 33.05 29.80 25.94 19.03 30.00 48 29.75 51 -9.80 -20.08 -24.48 -27.67 -33.45 -22.22 30 -27.89 76 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% i1 i1 i1 i 1 i 1 i 1 i1 i 1 i1 i1 i 1 46 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low i ING Investment Mgmt Net Ret Rank 1 R1000G Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 18.39 29 17.50 36 34.62 28.09 24.10 21.85 8.25 24.32 47 25.27 40 24.63 18.87 15.16 13.12 6.11 14.51 58 18.02 30 9.75 4.42 1.84 0.41 -3.03 3.71 30 4.69 22 13.76 8.12 4.62 2.71 -2.47 5.08 46 5.02 46 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% i 1 i 1 i 1 i 1 i1 ING Investment Mgmt Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 1.7 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 0.3 0.6 0.3 -0.8 2.0 -0.4 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000G 47 City of Clearwater Risk Measure Summary ING Investment Mgmt Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.06 1.00 0.50 -12.86 17.02 6.94 6.94 2 2 -13.14 14.69 5.77 5.77 3 9 1.03 0.99 0.58 -12.86 17.02 3.04 35.01 19.52 1.00 0.18 0.99 0.94 18.20 1.81 0.44 3 9 -13.14 14.69 2.63 35.01 19.37 0.90 8 12 0.97 0.91 0.60 -18.51 17.02 -33.18 43.38 20.64 0.91 0.32 0.96 0.15 3.48 4.74 0.17 8 12 -22.79 16.32 -38.43 49.75 22.12 0.09 29 69 0.95 0.79 0.54 -18.51 23.26 -33.74 44.38 16.63 0.84 0.60 0.93 0.42 8.36 5.40 0.22 32 66 -22.79 26.75 -45.64 49.75 18.95 0.27 48 City of Clearwater Return vs Risk Total Returns of Large Growth Portfolios Annualized Rate of Return 12.013.815.617.419.221.022.824.626.428.230.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank i ING Investment Mgmt 1 R1000G Median 18.391819.5238 17.502919.3736 16.1120.64 Annualized Rate of Return 14.015.817.619.421.223.024.826.628.430.232.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 i 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank i ING Investment Mgmt 1 R1000G Median 4.151620.6425 2.873422.1240 2.3022.99 49 City of Clearwater Equity Summary Statistics ING Investment Mgmt Period Ending 6/12 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 96,150,976 116,997,041 22,713,670 1.33 17.32 18.51 1.11 2.97 33.46 17.03 573 108,162,933 5,803,548 1.64 18.59 18.51 0.98 4.16 45.34 15.08 Ten Largest Holdings Apple Inc Microsoft Corp Google Inc Philip Morris Intl I Oracle Systems Corp Abbott Labs Wal Mart Stores Inc Costco Whsl Corp New Home Depot Inc Starbucks Corp Market Value% of PortfolioQuarterly Ret 8,847,600 4,097,806 3,512,904 3,483,943 3,167,475 2,334,459 2,317,493 2,183,100 2,143,975 2,003,232 9.21 4.27 3.66 3.63 3.30 2.43 2.41 2.27 2.23 2.09 -2.58 -4.52 -9.54 -0.62 2.06 6.09 14.69 4.97 5.94 -4.31 Ten Best Performers Petsmart Inc Whole Foods Mkt Inc Wal Mart Stores Inc Monster Beverage Cor Biogen Idec Inc Wyndham Worldwide Co Union Pac Corp Disney Walt Prodtns Watson Pharmaceutica Comcast Corp New Quarterly Ret 19.44 14.93 14.69 14.67 14.61 13.93 11.60 10.78 10.33 7.65 Ten Worst Performers Netapp Inc Prudential Finl Inc National-Oilwell Inc Eog Res Inc Qualcomm Inc Blackrock Inc Lam Resh Corp Dover Corp Halliburton Co Macys Inc. Quarterly Ret -28.93 -23.60 -18.77 -18.76 -17.79 -16.37 -15.42 -14.37 -14.20 -13.05 50 City of Clearwater Equity Contribution to Return ING Investment Mgmt Period Ending 6/12 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 96,150,976 116,997,041 22,713,670 1.33 17.32 18.51 1.11 2.97 33.46 17.03 573 108,162,933 5,803,548 1.64 18.59 18.51 0.98 4.16 45.34 15.08 Ten Best Contributors Wal Mart Stores Inc Biogen Idec Inc Wyndham Worldwide Co Union Pac Corp Whole Foods Mkt Inc Disney Walt Prodtns Comcast Corp New Abbott Labs Watson Pharmaceutica Home Depot Inc Market Value% of PortfolioQuarterly Ret 2,317,493 1,495,777 1,556,357 1,836,181 1,212,470 1,447,725 1,915,642 2,334,459 1,288,166 2,143,975 2.41 1.56 1.62 1.91 1.26 1.51 1.99 2.43 1.34 2.23 14.69 14.61 13.93 11.60 14.93 10.78 7.65 6.09 10.33 5.94 Ten Worst Contributors Netapp Inc Qualcomm Inc Google Inc Blackrock Inc Apple Inc Eog Res Inc National-Oilwell Inc Prudential Finl Inc Microsoft Corp Macys Inc. Market Value% of PortfolioQuarterly Ret 1,298,892 1,941,339 3,512,904 1,414,601 8,847,600 1,204,771 1,056,300 788,440 4,097,806 1,254,222 1.35 2.02 3.66 1.47 9.21 1.25 1.10 0.82 4.27 1.31 -28.93 -17.79 -9.54 -16.37 -2.58 -18.76 -18.77 -23.60 -4.52 -13.05 51 City of Clearwater Equity Sector Attribution Analysis ING Investment Mgmt Quarter Ending 6/12 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 10.33 2.84 11.24 15.71 11.79 10.96 5.50 31.63 0.00 0.00 100.00 10.04 5.25 12.49 14.50 11.96 10.14 4.30 30.46 0.80 0.07 100.00 -5.76 -17.25 -3.37 -4.75 3.15 5.34 -13.09 -6.74 -4.10 -6.18 -3.48 -6.35 -5.19 4.10 1.75 -0.42 -6.59 7.07 -6.06 -3.65 0.04 -0.39 0.33 0.07 -0.11 0.39 -0.70 -0.04 0.00 0.00 -0.41 -0.01 -0.00 0.03 -0.02 -0.01 0.04 0.04 -0.03 -0.09 0.00 -0.04 0.04 -0.40 0.37 0.05 -0.13 0.44 -0.66 -0.08 -0.09 0.00 -0.45 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 -0.32% [ Actual Return -4.43% ] - [ Buy Hold Return -4.10% ] 52 City of Clearwater Equity Sector Attribution Chart ING Investment Mgmt Quarter Ending 6/12 % Allocation Energy 10.33 10.04 Materials 2.84 5.25 Industrials 11.24 12.49 Con. Discretionary 15.71 14.50 Consumer Staples 11.79 11.96 Health Care 10.96 10.14 Financials 5.50 4.30 Infomation Tech. 31.63 30.46 Telecom. Services 0.00 0.80 Utilities 0.00 0.07 ING Investment MgmtR1000G % Return -5.76 -6.18 -17.25 -3.48 -3.37 -6.35 -4.75 -5.19 3.15 4.10 5.34 1.75 -13.09 -0.42 -6.74 -6.59 7.07 -6.06 % Variance 0.04 -0.40 0.37 0.05 -0.13 0.44 -0.66 -0.08 -0.09 0.00 53 City of Clearwater Aletheia Research as of 6/30/12 Merck & Co Inc New Noble Energy Inc Molycorp Inc Del Intl Business McHn Verizon Communicatio Dominion Res Inc Va Boeing Co Opko Health Inc Safeway Inc Vornado Rlty Tr GICS Sector% Port Health Care Energy Materials Information Technology Telecom Services Utilities Industrials Health Care Consumer Staples Financials 2.37 2.25 2.17 2.11 2.07 2.03 1.97 1.90 1.86 1.84 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 13.66 20.58 5.82 10.66 13.22 12.30 10.53 5.44 2.07 5.72 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -7.62 -2.20 28,758 0 -2,190 26,567 0.88 8.67 26,336 0 232 26,567 -13.00 3.00 30,538 -1 -3,970 26,567 9.79 15.80 12,088 10,481 3,998 26,567 -3.96 -2.19 19,365 10,481 -3,279 26,567 -3.96 -2.19 19,365 10,481 -3,279 26,567 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 54 City of Clearwater Aletheia Research as of 6/30/12 Cash & Equiv $147 0.55% Other $1,006 3.79% Domestic Equity $25,415 95.66% Periods from 6/07 to 6/12 Alpha Beta R-Squared -0.33 1.02 0.90 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 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 -3.96 -2.19 0.98 25.03 23.24 0.80 -0.20 -0.14 0.00 -0.21 Asset Allocation ($000) Risk/Return Analysis 55 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 4 Years Last 5 Years 1.20 -1.78 -3.50 -4.71 -8.14 -7.62 93 -2.20 30 10.17 4.38 2.14 -0.68 -7.17 -13.00 99 3.00 42 18.63 15.95 14.69 12.89 8.24 5.11 99 15.24 41 18.11 15.93 14.96 13.23 9.79 9.79 95 15.80 30 6.23 4.23 2.83 1.74 -0.03 -2.90 99 2.46 60 2.90 -0.38 -1.30 -2.40 -4.13 -3.96 94 -2.19 72 -15% -10% -5% 0% 5% 10% 15% 20% a 1 a 1 a 1 a 1 a 1 a 1 56 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 6/30/12 YTD2011201020092008 10.24 8.58 6.82 4.26 -0.51 0.88 93 8.67 22 11.59 3.62 0.36 -2.82 -7.48 -13.18 98 0.39 49 22.86 16.54 14.46 12.60 9.91 16.98 20 15.51 39 42.52 29.44 24.33 20.58 14.71 36.50 12 19.69 83 -26.75 -33.62 -36.24 -38.45 -43.31 -37.97 69 -36.85 60 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% a 1 a 1 a 1 a 1 a 1 57 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low a Aletheia Research Net Ret Rank 1 R1000V Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 9.79 93 15.80 59 34.62 28.09 24.10 21.85 8.25 19.03 86 22.82 67 24.63 18.87 15.16 13.12 6.11 11.50 85 11.55 85 9.75 4.42 1.84 0.41 -3.03 -2.07 92 -1.52 89 13.76 8.12 4.62 2.71 -2.47 0.72 88 2.28 79 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% a 1 a 1 a1 a 1 a 1 Aletheia Research Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -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 -2.0 -3.0 -5.5 -3.8 -1.7 -5.5 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000V 58 City of Clearwater Risk Measure Summary Aletheia Research Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 0.73 1.49 0.00 -20.78 9.20 -13.00 -13.00 2 2 -16.21 13.11 3.00 3.00 4 8 0.98 1.36 0.33 -20.78 21.47 -13.18 26.98 23.59 1.13 -1.74 0.95 0.41 8.55 5.90 -0.82 4 8 -16.21 18.24 -1.90 28.94 20.24 0.77 10 10 0.99 1.07 0.45 -26.26 21.47 -42.20 59.12 25.03 1.02 -0.33 0.90 -0.20 -4.85 7.98 -0.21 11 9 -22.17 18.24 -42.42 53.57 23.24 -0.14 10 10 0.99 1.07 0.45 -26.26 21.47 -42.20 59.12 25.03 1.02 -0.33 0.90 -0.20 -4.85 7.98 -0.21 11 9 -22.17 18.24 -42.42 53.57 23.24 -0.14 59 City of Clearwater Return vs Risk Total Returns of Large Value Portfolios Annualized Rate of Return 8.010.412.815.217.620.022.424.827.229.632.0 6.0 7.8 9.6 11.4 13.2 15.0 16.8 18.6 20.4 22.1 23.9 a 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank a Aletheia Research 1 R1000V Median 9.799523.5990 15.803020.2447 14.9620.50 Annualized Rate of Return 14.015.817.619.421.223.024.826.628.430.232.0 -6.0 -5.1 -4.2 -3.2 -2.3 -1.4 -0.5 0.3 1.2 2.1 3.0 a 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank a Aletheia Research 1 R1000V Median -3.969425.0375 -2.197223.2454 -1.3023.17 60 City of Clearwater Equity Summary Statistics Aletheia Research Period Ending 6/12 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 80 25,414,619 46,366,472 13,841,653 2.18 16.38 14.10 1.19 1.64 70.25 3.06 690 88,238,547 4,658,387 2.59 13.72 14.65 1.08 1.49 51.71 0.09 Ten Largest Holdings Merck & Co Inc New Noble Energy Inc Molycorp Inc Del Intl Business McHn Verizon Communicatio Dominion Res Inc Va Boeing Co Opko Health Inc Safeway Inc Vornado Rlty Tr Market Value% of PortfolioQuarterly Ret 602,244 570,839 551,788 535,889 524,170 516,240 499,296 483,299 470,993 468,189 2.37 2.25 2.17 2.11 2.07 2.03 1.97 1.90 1.86 1.84 9.91 -13.06 -36.30 -5.87 17.79 6.52 0.50 -2.75 -9.31 0.53 Ten Best Performers Aol Inc Dean Foods Co New M D C Corp Colo Verizon Communicatio Lennar Corp- Cl A Union Pac Corp U S G Corp Merck & Co Inc New Comcast Corp New Allstate Corp Quarterly Ret 48.02 40.63 27.82 17.79 13.91 11.60 10.76 9.91 7.65 7.29 Ten Worst Performers Atp Oil & Gas Corp Chiquita Brands Intl Molycorp Inc Del United States Stl Co Cliffs Natural Resou Morgan Stanley Citigroup Inc Sunpower Corp Ford Mtr Co Del Continental Resource Quarterly Ret -54.01 -43.12 -36.30 -29.73 -28.17 -25.50 -24.98 -24.61 -22.88 -22.37 61 City of Clearwater Equity Contribution to Return Aletheia Research Period Ending 6/12 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 80 25,414,619 46,366,472 13,841,653 2.18 16.38 14.10 1.19 1.64 70.25 3.06 690 88,238,547 4,658,387 2.59 13.72 14.65 1.08 1.49 51.71 0.09 Ten Best Contributors Aol Inc Dean Foods Co New Verizon Communicatio M D C Corp Colo Merck & Co Inc New Lennar Corp- Cl A U S G Corp Dominion Res Inc Va Coca Cola Co Comcast Corp New Market Value% of PortfolioQuarterly Ret 319,129 316,843 524,170 304,321 602,244 410,794 354,997 516,240 466,794 364,938 1.26 1.25 2.07 1.20 2.37 1.62 1.40 2.03 1.84 1.44 48.02 40.63 17.79 27.82 9.91 13.91 10.76 6.52 6.37 7.65 Ten Worst Contributors Molycorp Inc Del Cliffs Natural Resou Chiquita Brands Intl Continental Resource Atp Oil & Gas Corp Caterpillar Inc Citigroup Inc Noble Energy Inc United States Stl Co Ford Mtr Co Del Market Value% of PortfolioQuarterly Ret 551,788 379,779 240,395 454,682 161,395 413,936 313,598 570,839 218,875 281,131 2.17 1.50 0.95 1.79 0.64 1.63 1.24 2.25 0.86 1.11 -36.30 -28.17 -43.12 -22.37 -54.01 -19.95 -24.98 -13.06 -29.73 -22.88 62 City of Clearwater Equity Sector Attribution Analysis Aletheia Research Quarter Ending 6/12 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 18.21 22.66 5.36 9.39 15.25 4.73 11.54 5.19 1.83 5.83 100.00 11.64 2.64 9.26 9.32 7.68 12.30 26.89 8.93 4.43 6.91 100.00 -15.92 -14.21 -3.29 -1.04 -2.26 3.86 -11.53 -4.35 17.79 5.07 -7.49 -6.86 -8.32 -0.56 -1.31 -0.49 1.63 -6.74 -9.02 14.24 6.22 -2.58 -1.65 -1.34 -0.15 0.02 -0.27 0.11 -0.55 0.24 0.07 -0.07 -3.59 -0.28 -1.15 -0.08 0.00 0.16 -0.32 0.64 0.24 -0.44 -0.10 -1.32 -1.93 -2.48 -0.23 0.03 -0.11 -0.21 0.08 0.48 -0.37 -0.16 -4.91 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 -0.06% [ Actual Return -7.55% ] - [ Buy Hold Return -7.49% ] 63 City of Clearwater Equity Sector Attribution Chart Aletheia Research Quarter Ending 6/12 % Allocation Energy 18.21 11.64 Materials 22.66 2.64 Industrials 5.36 9.26 Con. Discretionary 9.39 9.32 Consumer Staples 15.25 7.68 Health Care 4.73 12.30 Financials 11.54 26.89 Infomation Tech. 5.19 8.93 Telecom. Services 1.83 4.43 Utilities 5.83 6.91 Aletheia ResearchR1000V % Return -15.92 -6.86 -14.21 -8.32 -3.29 -0.56 -1.04 -1.31 -2.26 -0.49 3.86 1.63 -11.53 -6.74 -4.35 -9.02 17.79 14.24 5.07 6.22 % Variance -1.93 -2.48 -0.23 0.03 -0.11 -0.21 0.08 0.48 -0.37 -0.16 64 City of Clearwater NTGI-QM R1000V as of 6/30/12 -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 -2.19 -2.20 58,940 0 -1,292 57,648 8.73 8.67 53,022 0 4,626 57,648 1.81 3.00 45,400 9,499 2,749 57,648 15.57 15.80 29,944 9,499 18,205 57,648 -2.25 -2.19 26,197 9,499 21,952 57,648 -2.25 -2.19 26,197 9,499 21,952 57,648 Portfolio Performance (%) 65 City of Clearwater NTGI-QM R1000V as of 6/30/12 Cash & Equiv $0 0.00% Domestic Equity $57,648 100.00% Periods from 6/07 to 6/12 Alpha Beta R-Squared -0.02 0.99 1.00 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 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 -2.25 -2.19 0.98 23.10 23.24 0.80 -0.14 -0.14 0.00 -0.13 Asset Allocation ($000) Risk/Return Analysis 66 City of Clearwater Large Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 4 Years Last 5 Years 1.20 -1.78 -3.50 -4.71 -8.14 -2.19 28 -2.20 30 10.17 4.38 2.14 -0.68 -7.17 1.81 54 3.00 42 18.63 15.95 14.69 12.89 8.24 14.64 52 15.24 41 18.11 15.93 14.96 13.23 9.79 15.57 35 15.80 30 6.23 4.23 2.83 1.74 -0.03 2.34 62 2.46 60 2.90 -0.38 -1.30 -2.40 -4.13 -2.25 72 -2.19 72 -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% n1 n 1 n 1 n 1 n 1 n1 67 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 6/30/12 YTD2011201020092008 10.24 8.58 6.82 4.26 -0.51 8.73 20 8.67 22 11.59 3.62 0.36 -2.82 -7.48 -0.77 62 0.39 49 22.86 16.54 14.46 12.60 9.91 15.75 34 15.51 39 42.52 29.44 24.33 20.58 14.71 20.35 77 19.69 83 -26.75 -33.62 -36.24 -38.45 -43.31 -36.86 60 -36.85 60 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% n1 n 1 n 1 n 1 n1 68 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low n NTGI-QM R1000V Net Ret Rank 1 R1000V Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 15.57 61 15.80 59 34.62 28.09 24.10 21.85 8.25 22.61 68 22.82 67 24.63 18.87 15.16 13.12 6.11 11.40 86 11.55 85 9.75 4.42 1.84 0.41 -3.03 -1.22 88 -1.52 89 13.76 8.12 4.62 2.71 -2.47 2.52 77 2.28 79 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% n1 n1 n1 n1 n1 NTGI-QM R1000V Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -1.4% -1.2% -1.0% -0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 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 0.00.00.0 0.1 -1.3 0.00.0 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R1000V 69 City of Clearwater Risk Measure Summary NTGI-QM R1000V Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 0.94 1.00 0.75 -16.15 11.68 1.81 1.81 2 2 -16.21 13.11 3.00 3.00 4 8 0.99 1.00 0.92 -16.15 18.29 -1.78 29.10 20.03 0.99 -0.01 1.00 0.77 15.63 0.88 -0.28 4 8 -16.21 18.24 -1.90 28.94 20.24 0.77 11 9 0.99 1.00 0.85 -22.13 18.29 -42.31 54.33 23.10 0.99 -0.02 1.00 -0.14 -3.25 0.68 -0.13 11 9 -22.17 18.24 -42.42 53.57 23.24 -0.14 11 9 0.99 1.00 0.85 -22.13 18.29 -42.31 54.33 23.10 0.99 -0.02 1.00 -0.14 -3.25 0.68 -0.13 11 9 -22.17 18.24 -42.42 53.57 23.24 -0.14 70 City of Clearwater Return vs Risk Total Returns of Equity Portfolios Annualized Rate of Return 10.012.214.416.618.821.023.225.427.629.832.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 n1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank n NTGI-QM R1000V 1 R1000V Median 15.576120.0338 15.805920.2441 16.4221.27 Annualized Rate of Return 14.016.018.020.022.024.026.028.030.032.034.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 n1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank n NTGI-QM R1000V 1 R1000V Median -2.259123.1046 -2.199023.2448 1.0023.48 71 City of Clearwater Mid Cap Equity Comp as of 6/30/12 Allstate Corp Brunswick Corp Duke-Weeks Realty Co Lincoln Natl Corp In Transdigm Group Inc Computer Sciences Co Ihs Inc Carlisle Corp Wyndham Worldwide Co Pg&E Corp GICS Sector% Port Financials Consumer Discretionary Financials Financials Industrials Information Technology Industrials Industrials Consumer Discretionary Utilities 2.18 2.14 2.12 2.12 2.11 1.97 1.95 1.88 1.86 1.63 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 7.08 2.85 17.56 16.90 2.29 14.69 17.39 16.35 0.00 4.89 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 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 -4.62 -4.41 84,612 -1 -3,909 80,702 11.89 7.96 72,130 -2 8,574 80,702 1.71 -1.67 89,920 -9,006 -212 80,702 22.03 19.44 50,334 -9,007 39,376 80,702 3.70 1.05 92,247 -9,007 -2,537 80,702 8.67 8.45 68,659 -9,007 21,050 80,702 12.01 11.09 15,585 -9,007 74,125 80,702 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 72 City of Clearwater Mid Cap Equity Comp as of 6/30/12 Cash & Equiv $3,225 4.00% Domestic Equity $77,477 96.00% Periods from 3/88 to 6/12 Alpha Beta R-Squared 0.12 1.15 0.83 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.026.0 3.0 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 12.01 11.09 3.96 23.57 18.66 1.22 0.34 0.38 0.00 0.12 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 73 City of Clearwater Midcap Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 -1.23 -4.66 -5.08 -6.55 -8.59 -4.62 19 -4.41 16 2.44 -1.74 -2.34 -4.70 -6.72 1.71 7 -1.67 23 19.45 16.75 16.32 15.35 11.00 20.08 1 16.69 38 20.87 19.43 18.80 17.23 12.36 22.03 1 19.44 20 9.97 7.10 5.26 4.78 2.68 7.56 15 4.37 78 4.80 2.89 2.59 1.48 0.34 3.70 15 1.05 83 8.67 6.66 5.19 4.95 4.09 6.50 29 4.11 87 9.42 7.13 6.29 5.90 4.41 7.42 22 5.42 79 9.33 8.29 7.16 6.81 5.70 7.26 46 6.82 74 12.14 11.03 9.70 9.24 8.94 9.00 93 9.12 88 11.38 10.69 9.39 8.71 7.90 8.67 76 8.45 81 -10% -5% 0% 5% 10% 15% 20% 25% M1 M 1 M 1 M 1 M 1 M 1 M 1 M 1 M1 M1 M1 74 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 6/30/12 YTD2011201020092008200720062005200420032002 9.51 8.00 7.20 5.05 1.87 11.89 1 7.96 28 6.44 5.42 -1.57 -4.35 -9.24 -0.10 41 -1.56 48 31.99 27.04 23.69 22.19 15.86 28.03 19 25.49 39 63.14 41.17 37.16 34.77 19.11 45.33 18 40.47 27 -21.07 -26.71 -35.94 -37.68 -44.82 -41.79 91 -41.46 88 14.95 8.67 3.46 -0.52 -2.17 10.26 15 5.59 44 27.40 18.75 14.43 10.56 8.24 12.53 56 15.27 46 17.47 12.73 11.70 9.22 2.29 7.85 79 12.65 27 26.82 21.31 20.53 17.45 15.01 14.48 96 20.23 52 44.04 39.21 35.67 33.40 27.16 38.95 28 40.08 12 -4.15 -9.81 -12.33 -14.56 -16.55 -19.87 99 -16.19 87 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% M1 M1 M1 M 1 M1 M 1 M1 M 1 M 1 M1 M1 75 City of Clearwater Risk Measure Summary Mid Cap Equity Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.07 0.93 0.50 -17.17 17.31 1.71 1.71 2 2 -18.90 12.94 -1.67 -1.67 3 9 1.01 0.87 0.67 -17.17 19.21 -0.10 41.77 21.43 0.93 0.84 0.97 1.02 23.52 4.19 0.45 3 9 -18.90 20.61 -1.67 38.49 22.70 0.85 8 12 1.02 0.91 0.70 -26.78 23.05 -41.79 65.80 25.81 0.98 0.64 0.98 0.11 2.78 3.63 0.67 9 11 -27.28 20.80 -41.46 67.72 26.17 0.00 31 66 1.16 1.16 0.57 -26.78 49.24 -41.79 77.74 23.57 1.15 0.12 0.83 0.34 7.03 10.20 0.12 32 65 -27.28 20.80 -41.46 67.72 18.66 0.38 76 City of Clearwater Return vs Risk Total Returns of Midcap Neutral Portfolios Annualized Rate of Return 17.018.319.620.922.223.524.826.127.428.730.0 10.0 11.8 13.6 15.4 17.2 19.0 20.8 22.5 24.3 26.1 27.9 M 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank M Mid Cap Equity Comp 1 R Mid Cap Median 22.03121.4322 19.442022.7029 18.8023.37 Annualized Rate of Return 19.020.321.622.924.225.526.828.129.430.732.0 -2.0 -1.1 -0.2 0.6 1.5 2.5 3.4 4.3 5.2 6.1 7.0 M 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank M Mid Cap Equity Comp 1 R Mid Cap Median 3.701525.8161 1.058326.1770 2.5925.64 77 City of Clearwater Artisan Partners as of 6/30/12 Ihs Inc Discover Finl Svcs Regeneron Pharmaceut Cerner Corp Agilent Technologies Athenahealth Inc Cepheid Inc Verisk Analytics Inc Coach Inc Trimble Navigation L GICS Sector% Port Industrials Financials Health Care Health Care Health Care Health Care Health Care Industrials Consumer Discretionary Information Technology 3.95 3.16 3.11 2.86 2.78 2.53 2.44 2.36 2.32 2.29 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 7.97 0.00 13.94 20.35 2.15 25.02 5.16 25.40 0.00 0.00 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -7.34 -5.60 43,252 -1 -3,176 40,076 12.17 8.11 35,729 -1 4,348 40,076 1.45 -2.99 45,234 -5,004 -154 40,076 22.61 19.01 24,899 -5,005 20,182 40,076 6.46 1.90 24,919 -5,005 20,162 40,076 10.31 8.46 26,571 -5,005 18,510 40,076 8.22 5.42 29,914 -5,005 15,167 40,076 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 78 City of Clearwater Artisan Partners as of 6/30/12 Cash & Equiv $1,922 4.80% Domestic Equity $38,154 95.20% Periods from 7/01 to 6/12 Alpha Beta R-Squared 0.64 0.94 0.95 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 1.5 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 8.22 5.42 1.92 20.25 20.34 0.52 0.31 0.17 0.00 0.36 Asset Allocation ($000) Risk/Return Analysis 79 City of Clearwater Midcap Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 10 Years -1.33 -4.08 -5.57 -8.32 -10.32 -7.34 66 -5.60 50 6.89 0.38 -2.50 -7.21 -16.40 1.45 15 -2.99 55 22.83 19.45 17.00 13.98 6.75 23.35 4 17.89 41 23.45 20.24 19.09 16.00 11.74 22.61 7 19.01 51 11.06 5.81 3.79 0.67 -2.22 9.77 8 4.10 44 6.46 3.89 1.98 -0.21 -4.07 6.46 5 1.90 53 9.28 7.67 5.29 4.39 0.28 9.28 5 4.68 57 10.19 9.26 7.01 6.18 6.00 9.85 9 5.83 99 10.21 9.29 8.10 6.70 6.62 9.62 11 6.45 100 11.59 11.40 10.31 8.75 8.60 11.55 16 8.59 99 11.41 10.02 9.63 8.12 7.89 10.31 16 8.46 69 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 r 1 80 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 6/30/12 YTD2011201020092008200720062005200420032002 13.79 10.75 9.00 5.43 2.80 12.17 7 8.11 54 6.76 0.71 -1.99 -5.91 -16.27 0.07 31 -1.66 45 35.50 29.96 26.80 24.98 18.56 33.15 12 26.39 57 57.39 46.22 39.68 36.32 26.78 51.38 15 46.30 24 -33.13 -37.54 -40.90 -44.99 -50.49 -42.87 62 -44.32 70 25.01 21.02 16.48 8.66 4.30 22.31 17 11.41 65 20.90 14.95 13.34 9.95 5.97 10.94 65 10.64 65 23.20 14.84 13.04 10.19 5.73 10.19 75 12.10 65 21.82 18.98 16.35 13.13 10.59 16.07 60 15.48 60 51.00 44.86 37.89 33.38 29.41 33.84 72 42.72 25 -2.74 -13.31 -20.35 -24.78 -30.09 -23.37 67 -27.41 85 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% r1 r1 r 1 r 1 r1 r 1r1 r1 r1 r 1 r1 81 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low r Artisan Partners Net Ret Rank 1 R Mid Cap G Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 22.61 6 19.01 24 34.62 28.09 24.10 21.85 8.25 33.83 5 29.16 18 24.63 18.87 15.16 13.12 6.11 26.35 3 22.06 10 9.75 4.42 1.84 0.41 -3.03 11.27 3 5.89 16 13.76 8.12 4.62 2.71 -2.47 12.69 7 6.58 35 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% r 1 r 1 r 1 r 1 r 1 Artisan Partners Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 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 -0.2 1.2 5.7 -4.6 5.7 -1.8 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R Mid Cap G 82 City of Clearwater Risk Measure Summary Artisan Partners Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.04 0.88 0.50 -14.74 21.06 1.45 1.45 2 2 -19.33 14.52 -2.99 -2.99 3 9 1.04 0.86 0.50 -14.74 21.06 0.07 49.98 22.48 0.95 0.98 0.92 1.00 23.65 6.40 0.43 3 9 -19.33 17.58 -2.99 43.26 22.78 0.83 7 13 1.04 0.86 0.50 -27.54 21.06 -42.87 58.59 25.91 0.95 1.11 0.94 0.21 5.78 6.36 0.64 8 12 -27.36 20.67 -44.32 62.98 26.55 0.03 14 29 1.02 0.90 0.42 -27.54 26.70 -42.87 58.59 22.19 0.94 0.64 0.95 0.39 9.17 5.30 0.36 15 28 -27.36 27.06 -44.32 62.98 23.06 0.27 83 City of Clearwater Return vs Risk Total Returns of Midcap Growth Portfolios Annualized Rate of Return 14.016.018.020.022.024.026.028.030.032.034.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 r 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank r Artisan Partners 1 R Mid Cap G Median 22.61722.4840 19.015122.7844 19.0923.96 Annualized Rate of Return 20.022.024.026.028.030.032.034.036.0 -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 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank r Artisan Partners 1 R Mid Cap G Median 6.46525.9139 1.905326.5544 1.9828.04 84 City of Clearwater Equity Summary Statistics Artisan Partners Period Ending 6/12 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 38,153,985 9,830,060 7,081,740 0.44 28.41 23.77 1.23 4.25 27.39 11.94 460 8,768,465 4,524,708 1.12 23.64 18.87 1.10 4.16 44.00 8.98 Ten Largest Holdings Ihs Inc Discover Finl Svcs Regeneron Pharmaceut Cerner Corp Agilent Technologies Athenahealth Inc Cepheid Inc Verisk Analytics Inc Coach Inc Trimble Navigation L Market Value% of PortfolioQuarterly Ret 1,508,220 1,206,842 1,187,888 1,091,112 1,059,480 965,874 930,800 901,458 883,048 874,190 3.95 3.16 3.11 2.86 2.78 2.53 2.44 2.36 2.32 2.29 15.03 4.03 -2.06 8.53 -11.62 6.81 6.98 4.88 -23.99 -15.45 Ten Best Performers Edwards Lifesciences Vertex Pharmaceutica Cabot Oil & Gas Corp Concur Technologies Incyte Pharmaceutica Ihs Inc Davita Inc Cerner Corp Ariad Pharmaceutical Lkq Corp Quarterly Ret 42.03 36.36 26.47 18.68 17.62 15.03 8.92 8.53 7.90 7.15 Ten Worst Performers Fossil Inc Netflix Com Inc Verifone Hldgs Inc Aruba Networks Inc Qlik Technologies In Juniper Networks Coach Inc Flir Sys Inc Ctrip Com Intl Ltd Mercadolibre Inc Quarterly Ret -42.01 -40.48 -36.21 -32.45 -30.88 -28.72 -23.99 -22.69 -22.55 -22.37 85 City of Clearwater Equity Contribution to Return Artisan Partners Period Ending 6/12 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 38,153,985 9,830,060 7,081,740 0.44 28.41 23.77 1.23 4.25 27.39 11.94 460 8,768,465 4,524,708 1.12 23.64 18.87 1.10 4.16 44.00 8.98 Ten Best Contributors Ihs Inc Concur Technologies Edwards Lifesciences Cabot Oil & Gas Corp Cerner Corp Incyte Pharmaceutica Vertex Pharmaceutica Athenahealth Inc Cepheid Inc Lkq Corp Market Value% of PortfolioQuarterly Ret 1,508,220 817,200 320,230 464,920 1,091,112 424,490 201,312 965,874 930,800 711,420 3.95 2.14 0.84 1.22 2.86 1.11 0.53 2.53 2.44 1.87 15.03 18.68 42.03 26.47 8.53 17.62 36.36 6.81 6.98 7.15 Ten Worst Contributors Fossil Inc Coach Inc Borg-Warner Automoti Cameron Internationa Ralph Lauren Corp Vmware Inc Trimble Navigation L Aruba Networks Inc Agilent Technologies Juniper Networks Market Value% of PortfolioQuarterly Ret 811,324 883,048 741,167 798,677 770,330 782,944 874,190 382,270 1,059,480 412,643 2.13 2.32 1.94 2.09 2.02 2.05 2.29 1.00 2.78 1.08 -42.01 -23.99 -22.23 -19.16 -19.43 -18.98 -15.45 -32.45 -11.62 -28.72 86 City of Clearwater Equity Sector Attribution Analysis Artisan Partners Quarter Ending 6/12 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 7.24 0.00 11.75 21.84 2.63 24.09 4.41 28.03 0.00 0.00 100.00 9.03 8.57 14.88 20.69 5.85 13.30 6.93 18.86 1.62 0.26 100.00 -7.39 0.37 -16.93 -13.96 1.15 1.69 -12.14 -7.61 -12.33 -3.31 -6.44 -6.88 -0.36 3.07 -2.28 -8.99 -0.60 -6.06 -5.27 0.36 0.00 0.80 -2.20 -0.36 -0.46 0.18 -0.88 0.00 0.00 -2.57 0.13 -0.17 0.04 -0.02 -0.16 0.90 -0.08 -0.34 -0.08 0.00 0.23 0.48 -0.17 0.84 -2.21 -0.52 0.44 0.10 -1.22 -0.08 0.00 -2.34 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 -0.07% [ Actual Return -7.68% ] - [ Buy Hold Return -7.61% ] 87 City of Clearwater Equity Sector Attribution Chart Artisan Partners Quarter Ending 6/12 % Allocation Energy 7.24 9.03 Materials 0.00 8.57 Industrials 11.75 14.88 Con. Discretionary 21.84 20.69 Consumer Staples 2.63 5.85 Health Care 24.09 13.30 Financials 4.41 6.93 Infomation Tech. 28.03 18.86 Telecom. Services 0.00 1.62 Utilities 0.00 0.26 Artisan PartnersR Mid Cap G % Return -7.39 -12.33 -3.31 0.37 -6.44 -16.93 -6.88 -13.96 -0.36 1.15 3.07 1.69 -2.28 -12.14 -8.99 -0.60 -6.06 % Variance 0.48 -0.17 0.84 -2.21 -0.52 0.44 0.10 -1.22 -0.08 0.00 88 City of Clearwater Wedge Capital Mgmt as of 6/30/12 Allstate Corp Brunswick Corp Duke-Weeks Realty Co Lincoln Natl Corp In Transdigm Group Inc Computer Sciences Co Carlisle Corp Wyndham Worldwide Co Pg&E Corp Pinnacle West Cap Co GICS Sector% Port Financials Consumer Discretionary Financials Financials Industrials Information Technology Industrials Consumer Discretionary Utilities Utilities 4.30 4.23 4.19 4.18 4.17 3.88 3.70 3.67 3.22 3.07 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 6.20 5.63 21.08 13.54 2.42 4.65 29.29 7.55 0.00 9.65 -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 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 -1.77 -3.26 41,360 0 -733 40,626 11.61 7.76 36,401 -1 4,226 40,626 1.92 -0.40 44,686 -4,002 -58 40,626 21.43 19.92 25,434 -4,002 19,194 40,626 2.54 -0.13 32,228 -4,002 12,401 40,626 3.53 0.76 30,365 -4,002 14,263 40,626 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 89 City of Clearwater Wedge Capital Mgmt as of 6/30/12 Cash & Equiv $1,304 3.21% Domestic Equity $39,323 96.79% Periods from 2/07 to 6/12 Alpha Beta R-Squared 0.69 0.99 0.97 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 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 3.53 0.76 1.24 22.67 22.82 0.55 0.10 -0.02 0.00 0.60 Asset Allocation ($000) Risk/Return Analysis 90 City of Clearwater Midcap Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 4 Years Last 5 Years -0.26 -3.78 -5.31 -8.16 -10.42 -1.77 12 -3.26 14 11.89 1.92 -4.67 -7.64 -16.17 1.92 25 -0.40 30 22.08 16.70 14.93 10.57 5.80 17.01 22 15.66 36 25.44 19.10 18.22 14.32 11.88 21.43 8 19.92 16 10.60 5.86 5.37 4.37 0.99 7.58 15 4.62 67 3.78 3.30 1.85 -0.00 -4.44 2.54 36 -0.13 80 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% w 1 w 1 w 1 w 1 w 1 w 1 91 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 6/30/12 YTD2011201020092008 18.68 7.95 7.00 4.82 -5.91 11.61 10 7.76 32 12.27 7.12 -1.81 -6.20 -11.29 -0.33 40 -1.38 43 30.88 25.84 23.30 19.78 14.62 23.30 50 24.76 43 57.20 45.34 35.12 30.58 19.07 38.51 35 34.20 50 -31.72 -33.94 -36.61 -43.71 -51.14 -34.89 31 -38.45 53 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% w 1 w 1 w 1 w 1 w 1 92 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low w Wedge Capital Mgmt Net Ret Rank 1 R Mid Cap V Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 21.43 8 19.92 15 34.62 28.09 24.10 21.85 8.25 31.82 8 29.19 18 24.63 18.87 15.16 13.12 6.11 19.40 21 18.20 29 9.75 4.42 1.84 0.41 -3.03 3.31 34 1.98 48 13.76 8.12 4.62 2.71 -2.47 9.54 17 6.35 36 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% w1 w 1 w 1 w1 w 1 Wedge Capital Mgmt Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 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 1.7 0.6 -1.4 0.2 2.0 1.5 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R Mid Cap V 93 City of Clearwater Risk Measure Summary Wedge Capital Mgmt Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.11 1.00 0.75 -19.63 13.62 1.92 1.92 2 2 -18.47 13.36 -0.40 -0.40 4 8 0.98 0.86 0.67 -19.63 21.51 -0.63 34.32 21.78 0.93 0.66 0.95 0.98 22.98 5.07 0.19 4 8 -18.47 23.62 -2.36 34.30 22.97 0.86 10 10 1.04 0.92 0.70 -26.40 25.65 -39.75 73.15 26.59 0.99 0.67 0.97 0.06 1.58 4.57 0.56 10 10 -27.19 23.62 -42.51 72.41 26.52 -0.04 10 11 1.05 0.92 0.71 -26.40 25.65 -39.75 73.15 25.96 0.99 0.69 0.97 0.08 2.18 4.46 0.60 10 11 -27.19 23.62 -42.51 72.41 25.88 -0.02 94 City of Clearwater Return vs Risk Total Returns of Midcap Value Portfolios Annualized Rate of Return 14.016.018.020.022.024.026.028.030.032.034.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Wedge Capital Mgmt 1 R Mid Cap V Median 21.43821.7836 19.921622.9748 18.2223.03 Annualized Rate of Return 16.017.819.621.423.225.026.828.630.432.234.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank w Wedge Capital Mgmt 1 R Mid Cap V Median 2.543626.5975 -0.138026.5275 1.8525.43 95 City of Clearwater Equity Summary Statistics Wedge Capital Mgmt Period Ending 6/12 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 43 39,322,904 6,050,315 3,274,404 2.76 22.04 16.12 1.20 1.33 62.49 0.82 560 7,696,733 3,779,614 2.29 17.36 15.08 1.24 1.35 63.12 0.17 Ten Largest Holdings Allstate Corp Brunswick Corp Duke-Weeks Realty Co Lincoln Natl Corp In Transdigm Group Inc Computer Sciences Co Carlisle Corp Wyndham Worldwide Co Pg&E Corp Pinnacle West Cap Co Market Value% of PortfolioQuarterly Ret 1,687,829 1,659,834 1,643,735 1,641,562 1,635,103 1,522,484 1,452,748 1,439,802 1,263,033 1,205,542 4.30 4.23 4.19 4.18 4.17 3.88 3.70 3.67 3.22 3.07 7.29 -13.71 3.30 -16.77 16.02 -16.43 6.57 13.93 5.34 9.19 Ten Best Performers Hca Holdings Inc Transdigm Group Inc Wyndham Worldwide Co Phh Corp Convergys Corp Pinnacle West Cap Co Capstead Mtg Corp Mfa Mtg Invts Inc UGI Corp New Health Care Reit Inc Quarterly Ret 23.00 16.02 13.93 12.99 11.02 9.19 9.18 9.08 9.01 7.47 Ten Worst Performers First Niagara Finl G URS Corp New Lincoln Natl Corp In Computer Sciences Co Dover Corp Brunswick Corp Comtech Telecommunic Hillshire Brands Co Murphy Oil Corp Entertainment Pptys Quarterly Ret -21.56 -17.48 -16.77 -16.43 -14.37 -13.71 -11.51 -11.30 -10.10 -9.72 96 City of Clearwater Equity Contribution to Return Wedge Capital Mgmt Period Ending 6/12 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 43 39,322,904 6,050,315 3,274,404 2.76 22.04 16.12 1.20 1.33 62.49 0.82 560 7,696,733 3,779,614 2.29 17.36 15.08 1.24 1.35 63.12 0.17 Ten Best Contributors Transdigm Group Inc Hca Holdings Inc Wyndham Worldwide Co Allstate Corp Pinnacle West Cap Co Carlisle Corp Convergys Corp Pg&E Corp Health Care Reit Inc Great Plains Energy Market Value% of PortfolioQuarterly Ret 1,635,103 1,049,835 1,439,802 1,687,829 1,205,542 1,452,748 802,011 1,263,033 810,836 884,233 4.17 2.68 3.67 4.30 3.07 3.70 2.04 3.22 2.07 2.25 16.02 23.00 13.93 7.29 9.19 6.57 11.02 5.34 7.47 6.75 Ten Worst Contributors Lincoln Natl Corp In Computer Sciences Co Brunswick Corp URS Corp New Dover Corp Sonoco Prods Co V F Corp Murphy Oil Corp Comtech Telecommunic First Niagara Finl G Market Value% of PortfolioQuarterly Ret 1,641,562 1,522,484 1,659,834 1,112,672 798,789 1,143,529 1,027,565 824,756 637,334 282,285 4.18 3.88 4.23 2.84 2.04 2.91 2.62 2.10 1.62 0.72 -16.77 -16.43 -13.71 -17.48 -14.37 -8.31 -8.11 -10.10 -11.51 -21.56 97 City of Clearwater Equity Sector Attribution Analysis Wedge Capital Mgmt Quarter Ending 6/12 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 6.37 7.29 23.06 12.65 3.92 2.65 27.84 7.86 0.00 8.36 100.00 5.99 4.69 10.81 11.85 6.56 6.12 32.10 8.55 0.68 12.64 100.00 -6.75 -5.69 -1.43 -3.16 -5.03 -1.59 -1.47 -6.92 7.31 -2.16 -10.30 -9.07 -8.37 -5.82 0.93 -6.47 -1.90 -11.65 -10.35 6.28 -3.85 0.23 0.25 1.60 0.34 -0.23 0.13 0.12 0.37 0.00 0.09 2.88 -0.02 -0.14 -0.55 -0.02 -0.13 0.09 -0.08 0.05 0.04 -0.43 -1.18 0.20 0.11 1.05 0.32 -0.36 0.22 0.04 0.42 0.04 -0.35 1.70 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 0.32% [ Actual Return -1.84% ] - [ Buy Hold Return -2.16% ] 98 City of Clearwater Equity Sector Attribution Chart Wedge Capital Mgmt Quarter Ending 6/12 % Allocation Energy 6.37 5.99 Materials 7.29 4.69 Industrials 23.06 10.81 Con. Discretionary 12.65 11.85 Consumer Staples 3.92 6.56 Health Care 2.65 6.12 Financials 27.84 32.10 Infomation Tech. 7.86 8.55 Telecom. Services 0.00 0.68 Utilities 8.36 12.64 Wedge Capital MgmtR Mid Cap V % Return -6.75 -10.30 -5.69 -9.07 -1.43 -8.37 -3.16 -5.82 -5.03 0.93 -1.59 -6.47 -1.47 -1.90 -6.92 -11.65 -10.35 7.31 6.28 % Variance 0.20 0.11 1.05 0.32 -0.36 0.22 0.04 0.42 0.04 -0.35 99 City of Clearwater Small Cap Equity Comp as of 6/30/12 Lkq Corp Ultimate Software Gr Cepheid Inc Rollins Inc National Instrs Corp United Nat Foods Inc Chemed Corp New Techne Corp Maximus Inc Portfolio Recovery A GICS Sector% Port Consumer Discretionary Information Technology Health Care Industrials Information Technology Consumer Staples Health Care Health Care Information Technology Industrials 2.35 2.31 2.00 1.92 1.84 1.64 1.47 1.44 1.44 1.37 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 2.76 2.40 18.98 13.96 4.71 15.91 12.01 28.26 0.00 1.02 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -0.95 -3.47 48,357 -1 -459 47,898 10.24 8.53 43,450 -1 4,449 47,898 3.79 -2.06 46,153 -3 1,748 47,898 20.41 17.80 58,442 -39,006 28,462 47,898 2.56 0.54 69,785 -39,006 17,118 47,898 7.89 6.88 29,988 -39,006 56,915 47,898 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 100 City of Clearwater Small Cap Equity Comp as of 6/30/12 Cash & Equiv $1,726 3.60% Domestic Equity $46,172 96.40% Periods from 8/03 to 6/12 Alpha Beta R-Squared 0.37 0.91 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 1.5 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 S 1 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 7.89 6.88 1.92 19.72 20.64 0.57 0.30 0.24 0.00 0.15 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 101 City of Clearwater Small Neutral Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 8 Years -1.32 -3.41 -4.33 -5.18 -7.79 -0.95 3 -3.47 31 4.77 0.83 -1.87 -3.69 -7.37 3.79 9 -2.06 55 23.23 17.94 16.09 14.30 10.95 21.38 8 16.00 50 24.51 20.05 18.75 17.02 14.72 20.41 23 17.80 64 10.50 7.50 6.51 4.57 1.66 8.16 15 5.22 69 5.58 3.21 1.72 0.69 -1.17 2.56 34 0.54 76 8.44 6.16 4.47 3.21 2.05 4.84 43 3.03 75 8.70 6.97 5.85 4.81 3.55 6.59 32 4.61 78 9.06 7.78 6.69 5.86 4.75 6.91 42 5.20 84 -10% -5% 0% 5% 10% 15% 20% 25% 30% S 1 S 1 S 1 S 1 S 1 S 1 S 1 S 1 S 1 102 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 6/30/12 YTD20112010200920082007200620052004 12.71 9.10 8.09 5.98 4.00 10.24 11 8.53 40 6.54 -0.93 -3.05 -4.83 -11.49 2.07 12 -4.17 70 36.32 29.64 26.99 25.10 20.97 29.27 29 26.85 52 53.35 36.35 29.15 26.09 19.50 33.51 31 27.19 66 -22.15 -29.87 -33.24 -36.09 -42.48 -38.63 85 -33.80 59 11.39 3.44 0.65 -2.60 -8.40 3.27 27 -1.55 65 25.57 19.63 17.58 15.75 12.80 17.40 52 18.35 38 14.03 10.02 8.36 5.69 2.79 7.21 71 4.56 86 26.61 22.75 20.68 18.42 15.47 15.69 91 18.32 78 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% S1 S 1 S1 S 1 S 1 S 1 S1 S1 S1 103 City of Clearwater Risk Measure Summary Small Cap Equity Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 0.97 0.79 0.75 -18.74 15.86 3.79 3.79 2 2 -21.86 15.48 -2.06 -2.06 4 8 0.97 0.82 0.75 -18.74 16.53 2.07 41.95 21.71 0.89 0.96 0.98 0.93 22.79 3.88 0.43 4 8 -21.86 19.28 -4.17 37.40 24.27 0.73 9 11 0.99 0.92 0.70 -25.65 20.74 -38.63 57.55 25.19 0.93 0.46 0.96 0.06 1.70 5.52 0.27 10 10 -26.12 20.68 -37.50 62.77 26.55 -0.02 12 23 0.96 0.89 0.63 -25.65 20.74 -38.63 57.55 20.21 0.91 0.37 0.96 0.32 7.11 4.66 0.15 13 22 -26.12 20.68 -37.50 62.77 21.77 0.24 104 City of Clearwater Return vs Risk Total Returns of Small Neutral Portfolios Annualized Rate of Return 16.018.020.022.024.026.028.030.032.0 12.0 13.4 14.8 16.1 17.5 18.9 20.3 21.7 23.1 24.5 25.9 S 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank S Small Cap Equity Comp 1 R2000 Median 20.412321.7113 17.806424.2762 18.7523.80 Annualized Rate of Return 18.020.022.024.026.028.030.032.034.0 -3.0 -2.1 -1.1 -0.2 0.6 1.5 2.4 3.3 4.2 5.1 6.0 S 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank S Small Cap Equity Comp 1 R2000 Median 2.563425.1934 0.547626.5563 1.7226.32 105 City of Clearwater Riverbridge Partners as of 6/30/12 Ultimate Software Gr Cepheid Inc Rollins Inc United Nat Foods Inc Lkq Corp National Instrs Corp Chemed Corp New Maximus Inc Portfolio Recovery A Grand Canyon Ed Inc GICS Sector% Port Information Technology Health Care Industrials Consumer Staples Consumer Discretionary Information Technology Health Care Information Technology Industrials Consumer Discretionary 4.77 4.13 3.96 3.39 3.30 3.22 3.03 2.97 2.84 2.76 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 0.00 0.00 17.26 10.67 5.41 24.90 1.29 40.47 0.00 0.00 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 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 2.77 -3.94 22,429 0 621 23,050 12.56 8.81 20,478 0 2,572 23,050 7.10 -2.73 21,523 -1 1,528 23,050 19.51 12.92 16,876 -1 6,175 23,050 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 106 City of Clearwater Riverbridge Partners as of 6/30/12 Cash & Equiv $716 3.11% Domestic Equity $22,334 96.89% Periods from 9/10 to 6/12 Alpha Beta R-Squared N/A N/A N/A Annualized Return% -2.00.02.04.06.08.010.012.014.016.018.020.022.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 R 1 T Annualized Standard Deviation% R Riverbridge Partners 1 R2000G T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 19.51 12.92 0.10 16.37 21.34 0.03 1.19 0.60 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 107 City of Clearwater Small Growth Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 High 1st Qt Median 3rd Qt Low R Riverbridge Partners Net Ret Rank 1 R2000G Net Ret Rank Last Qtr Last 2 Qtrs Last 3 Qtrs Last 4 Qtrs -1.01 -4.26 -4.89 -6.82 -8.86 2.77 1 -3.94 21 13.02 9.84 7.58 5.47 2.75 12.56 9 8.81 37 30.08 25.04 22.26 20.51 16.37 27.34 16 25.12 24 4.95 -1.44 -3.57 -6.64 -10.54 7.10 1 -2.73 40 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% R 1 R 1 R 1 R 1 108 City of Clearwater Small Growth Consecutive Performance Comparisons Total Returns of Equity Portfolios Years Ending December High 1st Qt Median 3rd Qt Low R Riverbridge Partners Net Ret Rank 1 R2000G Net Ret Rank 6/30/12 YTD2011 13.02 9.84 7.58 5.47 2.75 12.56 9 8.81 37 7.94 2.26 -1.11 -3.87 -8.91 4.27 14 -2.92 62 -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% R 1 R 1 109 City of Clearwater Equity Summary Statistics Riverbridge Partners Period Ending 6/12 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 50 22,334,244 1,823,712 1,073,403 0.39 28.93 27.15 1.04 3.70 12.36 7.64 1,132 1,356,008 589,466 0.71 36.32 16.14 1.25 3.18 29.25 6.83 Ten Largest Holdings Ultimate Software Gr Cepheid Inc Rollins Inc United Nat Foods Inc Lkq Corp National Instrs Corp Chemed Corp New Maximus Inc Portfolio Recovery A Grand Canyon Ed Inc Market Value% of PortfolioQuarterly Ret 1,064,538 921,582 883,995 758,165 736,136 718,156 677,835 663,953 634,257 616,348 4.77 4.13 3.96 3.39 3.30 3.22 3.03 2.97 2.84 2.76 21.62 6.98 5.52 17.57 7.15 -5.33 -3.30 27.49 27.24 17.91 Ten Best Performers 3-D Sys Corp Del Stratasys Inc Maximus Inc Portfolio Recovery A Abaxis Inc Ipc the Hospitalist Ultimate Software Gr Concur Technologies Echo Global Logistic Neogen Corp Quarterly Ret 45.03 35.68 27.49 27.24 27.02 22.79 21.62 18.68 18.39 18.25 Ten Worst Performers Maxwell Technologies Constant Contact Inc Mobile Mini Faro Technologies In Cabot Microelectroni Semtech Corp Gentex Corp Ebix Com Inc Pegasystems Inc Resources Connection Quarterly Ret -64.21 -39.98 -31.82 -27.86 -24.87 -14.55 -14.37 -13.63 -13.49 -12.09 110 City of Clearwater Equity Contribution to Return Riverbridge Partners Period Ending 6/12 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 50 22,334,244 1,823,712 1,073,403 0.39 28.93 27.15 1.04 3.70 12.36 7.64 1,132 1,356,008 589,466 0.71 36.32 16.14 1.25 3.18 29.25 6.83 Ten Best Contributors Ultimate Software Gr Maximus Inc Portfolio Recovery A Stratasys Inc United Nat Foods Inc Abaxis Inc 3-D Sys Corp Del Ipc the Hospitalist Grand Canyon Ed Inc Neogen Corp Market Value% of PortfolioQuarterly Ret 1,064,538 663,953 634,257 386,986 758,165 444,962 263,595 488,323 616,348 586,555 4.77 2.97 2.84 1.73 3.39 1.99 1.18 2.19 2.76 2.63 21.62 27.49 27.24 35.68 17.57 27.02 45.03 22.79 17.91 18.25 Ten Worst Contributors Faro Technologies In Semtech Corp Maxwell Technologies Cabot Microelectroni Gentex Corp Constant Contact Inc Ritchie Bros Auction Ebix Com Inc Mednax Inc Mobile Mini Market Value% of PortfolioQuarterly Ret 310,971 594,381 112,373 275,480 389,121 132,848 503,753 339,290 568,539 136,296 1.39 2.66 0.50 1.23 1.74 0.59 2.26 1.52 2.55 0.61 -27.86 -14.55 -64.21 -24.87 -14.37 -39.98 -10.07 -13.63 -7.84 -31.82 111 City of Clearwater Equity Sector Attribution Analysis Riverbridge Partners Quarter Ending 6/12 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 0.00 17.91 9.80 4.85 25.27 1.39 40.79 0.00 0.00 100.00 8.31 4.17 16.57 15.23 4.07 20.35 7.62 22.61 0.98 0.09 100.00 2.39 4.03 15.37 5.38 -4.07 -0.79 2.55 -16.80 -4.45 -6.15 -5.38 3.05 5.55 -0.58 -6.69 -2.98 -3.60 -3.76 0.00 0.00 1.53 0.92 0.60 -0.04 -0.05 2.41 0.00 0.00 5.36 1.08 0.03 -0.03 0.09 0.05 0.46 -0.20 -0.53 -0.01 -0.00 0.94 1.08 0.03 1.50 1.01 0.65 0.41 -0.25 1.87 -0.01 -0.00 6.31 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 0.41% [ Actual Return 2.96% ] - [ Buy Hold Return 2.55% ] 112 City of Clearwater Equity Sector Attribution Chart Riverbridge Partners Quarter Ending 6/12 % Allocation Energy 0.00 8.31 Materials 0.00 4.17 Industrials 17.91 16.57 Con. Discretionary 9.80 15.23 Consumer Staples 4.85 4.07 Health Care 25.27 20.35 Financials 1.39 7.62 Infomation Tech. 40.79 22.61 Telecom. Services 0.00 0.98 Utilities 0.00 0.09 Riverbridge PartnersR2000G % Return -16.80 -4.45 2.39 -6.15 4.03 -5.38 15.37 3.05 5.38 5.55 -4.07 -0.58 -0.79 -6.69 -2.98 -3.60 % Variance 1.08 0.03 1.50 1.01 0.65 0.41 -0.25 1.87 -0.01 -0.00 113 City of Clearwater Atlanta Capital Mgmt as of 6/30/12 Morningstar Inc Sally Beauty Hldgs I Henry Jack & Assoc I Lkq Corp Bio Rad Labs Inc Kirby Expl Co. Dril-Quip Inc Fair Isaac Corp Blackbaud Inc Manhattan Assocs Inc GICS Sector% Port Consumer Discretionary Consumer Discretionary Information Technology Consumer Discretionary Health Care Industrials Energy Information Technology Information Technology Information Technology 3.52 3.10 2.89 2.75 2.74 2.66 2.62 2.59 2.48 2.42 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 2.62 3.17 27.24 21.38 3.72 9.00 14.32 18.54 0.00 0.00 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -3.12 -3.01 13,793 0 -430 13,363 5.33 8.23 12,688 0 676 13,363 3.29 -1.43 12,938 -1 426 13,363 20.81 17.43 15,451 -10,001 7,913 13,363 8.48 -1.05 18,131 -10,001 5,233 13,363 10.98 6.81 14,990 -10,001 8,374 13,363 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 114 City of Clearwater Atlanta Capital Mgmt as of 6/30/12 Cash & Equiv $625 4.68% Domestic Equity $12,738 95.32% Periods from 8/03 to 6/12 Alpha Beta R-Squared 1.28 0.72 0.92 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.0 1.0 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 10.98 6.81 1.92 17.39 20.62 0.57 0.52 0.24 0.00 0.37 Asset Allocation ($000) Risk/Return Analysis 115 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 8 Years -1.96 -2.57 -4.26 -4.89 -6.32 -3.12 34 -3.01 30 3.45 0.68 -1.75 -4.23 -6.14 3.29 5 -1.43 43 18.70 16.37 15.44 14.05 12.54 21.56 1 13.78 81 24.25 20.82 19.22 17.89 15.94 20.81 25 17.43 84 11.38 9.01 6.88 5.41 4.28 12.54 2 4.89 85 4.19 2.82 1.58 -0.10 -1.62 8.48 1 -1.05 80 8.25 5.78 4.69 2.77 1.23 9.52 1 1.62 81 9.45 7.26 6.10 3.81 3.30 10.18 1 3.38 92 9.74 9.11 7.78 5.47 4.54 10.42 1 4.69 94 -10% -5% 0% 5% 10% 15% 20% 25% 30% t1 t 1 t 1 t 1 t 1 t 1 t 1 t 1 t 1 116 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 6/30/12 YTD20112010200920082007200620052004 11.68 8.18 7.24 5.86 2.98 5.33 77 8.23 21 1.95 -0.63 -4.03 -6.21 -8.96 10.20 1 -5.50 68 33.58 30.90 27.62 24.82 21.40 25.98 65 24.51 79 55.19 36.04 32.28 25.37 20.58 26.83 62 20.57 96 -23.17 -28.21 -30.75 -33.26 -38.96 -19.52 1 -28.92 27 5.01 0.79 -2.59 -7.82 -11.30 6.91 3 -9.77 83 25.08 21.53 19.90 16.57 13.06 16.22 78 23.48 8 13.63 10.31 8.22 5.85 2.16 6.23 70 4.70 83 27.20 25.39 21.40 18.37 12.52 20.24 59 22.25 43 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% t1 t 1 t1 t 1 t 1 t 1 t 1 t1 t1 117 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low t Atlanta Capital Mgmt Net Ret Rank 1 R2000V Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 20.81 11 17.43 36 34.62 28.09 24.10 21.85 8.25 29.02 19 25.35 39 24.63 18.87 15.16 13.12 6.11 20.76 14 12.36 80 9.75 4.42 1.84 0.41 -3.03 8.05 7 -2.79 94 13.76 8.12 4.62 2.71 -2.47 15.81 2 7.08 32 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% t 1 t 1 t 1 t 1 t 1 Atlanta Capital Mgmt Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 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 2.7 5.4 7.3 0.4 -2.6 -0.1 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R2000V 118 City of Clearwater Risk Measure Summary Atlanta Capital Mgmt Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 0.90 0.77 0.50 -15.76 16.42 3.29 3.29 2 2 -21.47 15.97 -1.43 -1.43 3 9 0.91 0.67 0.58 -15.76 16.42 3.29 43.07 19.72 0.78 1.54 0.94 1.05 26.69 7.33 0.22 4 8 -21.47 22.70 -6.00 31.34 24.89 0.70 8 12 0.91 0.59 0.70 -16.60 18.00 -24.55 52.53 20.79 0.75 2.04 0.94 0.36 10.05 8.48 0.90 10 10 -24.89 22.70 -38.89 65.05 27.05 -0.08 11 24 0.88 0.60 0.60 -16.60 18.00 -24.55 52.53 16.56 0.72 1.28 0.92 0.58 13.24 7.69 0.37 12 23 -24.89 22.70 -38.89 65.05 22.02 0.23 119 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios Annualized Rate of Return 18.019.420.822.223.625.026.427.829.230.632.0 10.0 11.8 13.6 15.4 17.2 19.0 20.8 22.5 24.3 26.1 27.9 t 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank t Atlanta Capital Mgmt 1 R2000V Median 20.812519.722 17.438424.8951 19.2224.99 Annualized Rate of Return 18.020.022.024.026.028.030.032.034.036.038.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 t 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank t Atlanta Capital Mgmt 1 R2000V Median 8.48120.791 -1.058027.0546 1.5827.83 120 City of Clearwater Equity Summary Statistics Atlanta Capital Mgmt Period Ending 6/12 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 62 12,737,607 2,067,368 1,700,396 1.01 19.99 19.51 1.07 2.85 22.43 5.60 1,418 1,033,757 421,162 2.13 23.85 12.81 1.26 1.14 48.84 1.31 Ten Largest Holdings Morningstar Inc Sally Beauty Hldgs I Henry Jack & Assoc I Lkq Corp Bio Rad Labs Inc Kirby Expl Co. Dril-Quip Inc Fair Isaac Corp Blackbaud Inc Manhattan Assocs Inc Market Value% of PortfolioQuarterly Ret 447,682 394,079 367,983 349,698 349,035 338,976 333,197 329,784 315,484 307,628 3.52 3.10 2.89 2.75 2.74 2.66 2.62 2.59 2.48 2.42 -8.11 3.79 1.53 7.15 -3.55 -28.44 0.88 -3.64 -22.40 -3.83 Ten Best Performers Raven Inds Inc Liquidity Services I Columbia Sportswear J & J Snack Foods Co Advisory Brd Co Young Innovations In Aaron Rents Inc Landauer Inc Exponet Inc Balchem Corp Quarterly Ret 14.45 14.26 13.54 12.92 11.92 11.67 9.37 9.33 8.88 7.80 Ten Worst Performers II VI Inc Kirby Expl Co. Blackbaud Inc Daktronics Inc Monro Muffler Brake Acuity Brands Inc Peets Coffee & Tea I Scansource Inc Brady Corporation State Bk Finl Corp Quarterly Ret -29.51 -28.44 -22.40 -20.92 -19.65 -18.78 -18.53 -17.90 -14.47 -13.42 121 City of Clearwater Equity Contribution to Return Atlanta Capital Mgmt Period Ending 6/12 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 62 12,737,607 2,067,368 1,700,396 1.01 19.99 19.51 1.07 2.85 22.43 5.60 1,418 1,033,757 421,162 2.13 23.85 12.81 1.26 1.14 48.84 1.31 Ten Best Contributors Raven Inds Inc Liquidity Services I J & J Snack Foods Co Exponet Inc Lkq Corp Columbia Sportswear Choice Hotels Intl I Aaron Rents Inc Sally Beauty Hldgs I Hibbett Sports Inc Market Value% of PortfolioQuarterly Ret 230,343 230,355 196,803 284,225 349,698 169,064 246,767 164,056 394,079 254,501 1.81 1.81 1.55 2.23 2.75 1.33 1.94 1.29 3.10 2.00 14.45 14.26 12.92 8.88 7.15 13.54 7.44 9.37 3.79 5.79 Ten Worst Contributors Kirby Expl Co. Blackbaud Inc Monro Muffler Brake Acuity Brands Inc II VI Inc Morningstar Inc Graco Inc Forward Air Corp Brady Corporation Scansource Inc Market Value% of PortfolioQuarterly Ret 338,976 315,484 261,266 225,022 140,862 447,682 221,184 233,312 172,213 136,042 2.66 2.48 2.05 1.77 1.11 3.52 1.74 1.83 1.35 1.07 -28.44 -22.40 -19.65 -18.78 -29.51 -8.11 -12.79 -11.80 -14.47 -17.90 122 City of Clearwater Equity Sector Attribution Analysis Atlanta Capital Mgmt Quarter Ending 6/12 GICS Sectors Weight Portfolio Index Return Portfolio Index Selection Stock Sector Total Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom. Services Utilities 2.48 3.12 27.79 20.44 3.30 8.37 14.27 20.23 0.00 0.00 100.00 4.64 5.06 14.81 12.21 2.92 5.01 37.51 10.85 0.62 6.37 100.00 0.88 -2.53 -7.75 -0.02 8.10 3.12 -3.62 -6.21 -3.46 -13.05 -10.49 -6.48 -4.55 -1.23 1.48 1.10 -9.51 -7.65 3.29 -3.07 0.35 0.25 -0.35 0.92 0.31 0.14 -0.67 0.67 0.00 0.00 1.60 0.22 0.14 -0.44 -0.12 0.01 0.15 -0.97 -0.60 0.03 -0.41 -1.99 0.56 0.39 -0.80 0.80 0.31 0.29 -1.64 0.06 0.03 -0.41 -0.39 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 0.15% [ Actual Return -3.31% ] - [ Buy Hold Return -3.46% ] 123 City of Clearwater Equity Sector Attribution Chart Atlanta Capital Mgmt Quarter Ending 6/12 % Allocation Energy 2.48 4.64 Materials 3.12 5.06 Industrials 27.79 14.81 Con. Discretionary 20.44 12.21 Consumer Staples 3.30 2.92 Health Care 8.37 5.01 Financials 14.27 37.51 Infomation Tech. 20.23 10.85 Telecom. Services 0.00 0.62 Utilities 0.00 6.37 Atlanta Capital MgmtR2000V % Return 0.88 -13.05 -2.53 -10.49 -7.75 -6.48 -0.02 -4.55 8.10 -1.23 3.12 1.48 -3.62 1.10 -6.21 -9.51 -7.65 3.29 % Variance 0.56 0.39 -0.80 0.80 0.31 0.29 -1.64 0.06 0.03 -0.41 124 City of Clearwater Systematic Financial Mgt as of 6/30/12 Cbl & Assoc Pptys In Dupont Fabros Techno Cno Finl Group Inc Pier I Imports Inc Waddell & Reed Finl Brandywine Rlty Tr Hain Celestial Group Infinity Ppty & Cas Polyone Corp U S Airways Group In GICS Sector% Port Financials Financials Financials Consumer Discretionary Financials Financials Consumer Staples Financials Materials Industrials 4.21 3.76 2.67 2.43 2.18 1.85 1.68 1.66 1.62 1.61 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 8.49 6.34 12.96 12.05 4.43 5.72 30.95 14.83 0.00 4.23 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -5.36 -3.01 12,135 0 -651 11,484 11.68 8.23 10,284 0 1,201 11,484 -1.76 -1.43 11,691 -1 -206 11,484 21.22 17.43 10,763 -6,001 6,722 11,484 -0.45 -1.05 19,609 -6,001 -2,123 11,484 6.69 6.81 15,001 -6,001 2,484 11,484 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 125 City of Clearwater Systematic Financial Mgt as of 6/30/12 Cash & Equiv $384 3.35% Domestic Equity $11,100 96.65% Periods from 8/03 to 6/12 Alpha Beta R-Squared 0.11 1.06 0.86 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.022.024.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 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 6.69 6.81 1.92 22.56 20.62 0.57 0.21 0.24 0.00 0.04 Asset Allocation ($000) Risk/Return Analysis 126 City of Clearwater Small Value Cumulative Performance Comparisons Total Returns of Equity Portfolios Periods Ending 6/12 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 Last 8 Years -1.96 -2.57 -4.26 -4.89 -6.32 -5.36 85 -3.01 30 3.45 0.68 -1.75 -4.23 -6.14 -1.76 52 -1.43 43 18.70 16.37 15.44 14.05 12.54 16.69 19 13.78 81 24.25 20.82 19.22 17.89 15.94 21.22 19 17.43 84 11.38 9.01 6.88 5.41 4.28 4.54 90 4.89 85 4.19 2.82 1.58 -0.10 -1.62 -0.45 78 -1.05 80 8.25 5.78 4.69 2.77 1.23 2.89 68 1.62 81 9.45 7.26 6.10 3.81 3.30 5.36 59 3.38 92 9.74 9.11 7.78 5.47 4.54 5.47 76 4.69 94 -10% -5% 0% 5% 10% 15% 20% 25% 30% s 1 s1 s 1 s 1 s1 s1 s1 s 1 s1 127 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 6/30/12 YTD20112010200920082007200620052004 11.68 8.18 7.24 5.86 2.98 11.68 5 8.23 21 1.95 -0.63 -4.03 -6.21 -8.96 -9.91 96 -5.50 68 33.58 30.90 27.62 24.82 21.40 35.50 1 24.51 79 55.19 36.04 32.28 25.37 20.58 35.72 31 20.57 96 -23.17 -28.21 -30.75 -33.26 -38.96 -40.71 97 -28.92 27 5.01 0.79 -2.59 -7.82 -11.30 0.49 30 -9.77 83 25.08 21.53 19.90 16.57 13.06 18.61 62 23.48 8 13.63 10.31 8.22 5.85 2.16 8.27 47 4.70 83 27.20 25.39 21.40 18.37 12.52 11.42 100 22.25 43 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% s1 s 1 s 1 s 1 s 1 s 1 s 1 s1 s 1 128 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Equity Portfolios High 1st Qt Median 3rd Qt Low s Systematic Financial Mgt Net Ret Rank 1 R2000V Net Ret Rank 6/12 3/12 12/11 9/11 6/11 23.35 18.82 16.42 14.59 8.93 21.22 9 17.43 36 34.62 28.09 24.10 21.85 8.25 30.65 11 25.35 39 24.63 18.87 15.16 13.12 6.11 18.33 28 12.36 80 9.75 4.42 1.84 0.41 -3.03 0.84 70 -2.79 94 13.76 8.12 4.62 2.71 -2.47 6.74 34 7.08 32 -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% s 1 s 1 s 1 s 1 s 1 Systematic Financial Mgt Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 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 1.0 -2.3 -7.4 4.3 5.7 -2.4 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. R2000V 129 City of Clearwater Risk Measure Summary Systematic Financial Mgt Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.45 1.31 0.50 -27.29 20.97 -1.76 -1.76 2 2 -21.47 15.97 -1.43 -1.43 4 8 1.33 1.24 0.67 -27.29 25.37 -11.58 38.60 31.19 1.25 0.09 0.99 0.68 16.94 7.07 0.69 4 8 -21.47 22.70 -6.00 31.34 24.89 0.70 10 10 1.04 1.00 0.60 -27.29 25.37 -40.88 74.73 31.29 1.08 0.41 0.86 -0.05 -1.33 11.80 0.09 10 10 -24.89 22.70 -38.89 65.05 27.05 -0.08 14 21 1.01 1.00 0.54 -27.29 25.37 -40.88 74.73 25.10 1.06 0.11 0.86 0.21 4.98 9.58 0.04 12 23 -24.89 22.70 -38.89 65.05 22.02 0.23 130 City of Clearwater Return vs Risk Total Returns of Small Value Portfolios Annualized Rate of Return 18.019.420.822.223.625.026.427.829.230.632.0 10.0 11.8 13.6 15.4 17.2 19.0 20.8 22.5 24.3 26.1 27.9 s 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank s Systematic Financial Mgt 1 R2000V Median 21.221931.1999 17.438424.8951 19.2224.99 Annualized Rate of Return 18.020.022.024.026.028.030.032.034.036.038.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 s 1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank s Systematic Financial Mgt 1 R2000V Median -0.457831.2989 -1.058027.0546 1.5827.83 131 City of Clearwater Equity Summary Statistics Systematic Financial Mgt Period Ending 6/12 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 106 11,100,075 1,603,467 1,320,221 1.31 17.49 13.63 1.58 1.51 54.00 4.05 1,418 1,033,757 421,162 2.13 23.85 12.81 1.26 1.14 48.84 1.31 Ten Largest Holdings Cbl & Assoc Pptys In Dupont Fabros Techno Cno Finl Group Inc Pier I Imports Inc Waddell & Reed Finl Brandywine Rlty Tr Hain Celestial Group Infinity Ppty & Cas Polyone Corp U S Airways Group In Market Value% of PortfolioQuarterly Ret 467,006 416,976 295,620 269,123 242,240 204,844 185,760 184,544 179,208 178,622 4.21 3.76 2.67 2.43 2.18 1.85 1.68 1.66 1.62 1.61 4.51 17.38 0.56 -9.42 -5.84 8.91 25.63 10.65 -4.64 75.63 Ten Best Performers U S Airways Group In Susser Hldgs Corp M D C Corp Colo Hain Celestial Group Mips Technologies In McMoran Exploration Dupont Fabros Techno Texas Capital Bancsh Allied Wrld Assur Co Glu Mobile Inc Quarterly Ret 75.63 44.80 27.82 25.63 22.61 18.41 17.38 16.67 15.73 14.43 Ten Worst Performers Wabash Natl Corp Swift Energy Co Omnivision Technolog Callon Pete Co Del Ryder Sys Inc Axcelis Technologies Xyratex Ltd Kulicke & Soffa Inds Silicon Motion Techn FSI Int Inc Quarterly Ret -36.04 -35.89 -33.20 -32.27 -31.33 -30.23 -28.56 -28.24 -27.16 -26.58 132 City of Clearwater Equity Contribution to Return Systematic Financial Mgt Period Ending 6/12 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 106 11,100,075 1,603,467 1,320,221 1.31 17.49 13.63 1.58 1.51 54.00 4.05 1,418 1,033,757 421,162 2.13 23.85 12.81 1.26 1.14 48.84 1.31 Ten Best Contributors U S Airways Group In Dupont Fabros Techno Susser Hldgs Corp Hain Celestial Group M D C Corp Colo Cbl & Assoc Pptys In Infinity Ppty & Cas Brandywine Rlty Tr Texas Capital Bancsh U S G Corp Market Value% of PortfolioQuarterly Ret 178,622 416,976 137,529 185,760 88,209 467,006 184,544 204,844 76,741 116,205 1.61 3.76 1.24 1.68 0.80 4.21 1.66 1.85 0.69 1.05 75.63 17.38 44.80 25.63 27.82 4.51 10.65 8.91 16.67 10.76 Ten Worst Contributors Wellcare Group Inc Hercules Offshore In Wabash Natl Corp Callon Pete Co Del Swift Energy Co Valueclick Inc Sauer-Danfoss Inc Ryder Sys Inc Pier I Imports Inc United Rentals Inc Market Value% of PortfolioQuarterly Ret 159,000 140,892 86,722 94,146 81,884 169,227 106,537 84,624 269,123 122,544 1.43 1.27 0.78 0.85 0.74 1.53 0.96 0.76 2.43 1.11 -26.27 -25.16 -36.04 -32.27 -35.89 -16.97 -24.92 -31.33 -9.42 -20.63 133 City of Clearwater Equity Sector Attribution Analysis Systematic Financial Mgt Quarter Ending 6/12 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 7.25 5.07 14.04 17.12 2.45 7.15 29.66 14.16 0.00 3.12 100.00 4.64 5.06 14.81 12.21 2.92 5.01 37.51 10.85 0.62 6.37 100.00 -17.79 -6.77 -9.35 -3.71 28.80 -13.27 2.80 -13.84 6.67 -4.75 -13.05 -10.49 -6.48 -4.55 -1.23 1.48 1.10 -9.51 -7.65 3.29 -3.07 -0.34 0.19 -0.40 0.14 0.73 -1.05 0.50 -0.61 0.00 0.11 -0.74 -0.26 -0.00 0.03 -0.07 -0.01 0.10 -0.33 -0.21 0.03 -0.21 -0.94 -0.60 0.19 -0.38 0.07 0.73 -0.96 0.17 -0.83 0.03 -0.10 -1.68 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 -0.70% [ Actual Return -5.45% ] - [ Buy Hold Return -4.75% ] 134 City of Clearwater Equity Sector Attribution Chart Systematic Financial Mgt Quarter Ending 6/12 % Allocation Energy 7.25 4.64 Materials 5.07 5.06 Industrials 14.04 14.81 Con. Discretionary 17.12 12.21 Consumer Staples 2.45 2.92 Health Care 7.15 5.01 Financials 29.66 37.51 Infomation Tech. 14.16 10.85 Telecom. Services 0.00 0.62 Utilities 3.12 6.37 Systematic Financial MgtR2000V % Return -17.79 -13.05 -6.77 -10.49 -9.35 -6.48 -3.71 -4.55 28.80 -1.23 -13.27 1.48 2.80 1.10 -13.84 -9.51 -7.65 6.67 3.29 % Variance -0.60 0.19 -0.38 0.07 0.73 -0.96 0.17 -0.83 0.03 -0.10 135 136 City of Clearwater International EQ Comp as of 6/30/12 Core Laboratories N Bhp Billiton Ltd Is MSCI Emerge Agrium Inc Rio Tinto Plc Potash Corp Sask Inc Arm Hldgs Plc Cooper Industries Pl Nestle S A Novartis A G GICS Sector% Port Energy Materials Materials Materials Materials Materials Information Technology Industrials Consumer Staples Health Care 3.79 3.61 2.82 2.80 2.53 2.43 2.35 2.28 2.13 2.13 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 20.97 19.84 12.81 2.23 9.27 8.62 19.41 4.96 1.89 0.00 -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -7.42 -6.85 102,975 -4 -7,637 95,335 3.02 3.38 92,549 -8 2,794 95,335 -14.16 -13.38 123,228 -9,522 -18,371 95,335 9.62 6.45 85,762 -9,690 19,263 95,335 -3.29 -5.63 75,007 -9,690 30,018 95,335 6.08 5.62 36,926 -9,690 68,098 95,335 4.65 3.76 20,000 -9,690 85,025 95,335 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 137 City of Clearwater International EQ Comp as of 6/30/12 Cash & Equiv $3,859 4.05% Intl Equity $91,476 95.95% Periods from 5/01 to 6/12 Alpha Beta R-Squared 0.24 1.04 0.96 Annualized Return% 0.02.04.06.08.010.012.014.016.018.020.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 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 4.65 3.76 1.95 19.39 18.80 0.52 0.14 0.10 0.00 0.20 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 138 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 6/12 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 Last 10 Years -1.62 -5.22 -6.74 -7.98 -10.27 -7.42 65 -6.85 53 -0.63 -8.84 -12.89 -15.30 -21.05 -14.16 62 -13.38 53 13.36 9.34 6.72 5.19 0.02 6.33 57 6.49 53 16.14 11.04 8.50 6.62 2.72 9.62 39 6.45 76 5.15 -0.68 -2.60 -4.55 -7.94 -2.10 43 -4.47 73 3.06 -0.77 -2.95 -5.32 -7.91 -3.29 52 -5.63 79 8.29 4.15 1.58 -0.35 -2.79 1.37 53 -0.78 80 10.80 7.21 4.93 3.14 1.25 4.67 53 2.79 78 13.76 8.17 6.23 4.32 2.52 5.93 52 4.14 79 15.92 10.93 8.89 7.06 5.54 7.77 61 7.00 80 14.98 9.43 7.50 5.78 4.57 6.08 69 5.62 80 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% I1 I1 I1 I 1 I 1 I 1 I 1 I 1 I 1 I1 I1 139 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 6/30/12 YTD2011201020092008200720062005200420032002 10.07 6.11 4.26 3.05 -1.04 3.02 75 3.38 68 -3.13 -10.56 -13.30 -15.59 -21.74 -15.04 70 -11.73 35 25.22 17.11 11.98 8.48 2.37 18.37 20 8.21 76 76.36 42.27 35.69 26.24 9.83 57.93 11 32.46 59 -24.15 -40.21 -43.33 -47.44 -57.07 -47.94 77 -43.06 46 39.18 18.13 11.88 7.76 0.74 11.02 58 11.63 52 35.41 29.39 26.09 22.29 11.41 27.62 37 26.85 41 36.71 20.84 15.25 11.58 6.45 13.15 64 14.01 57 31.90 23.58 19.98 17.15 10.24 17.66 72 20.69 40 58.53 43.10 37.76 32.58 24.09 31.06 81 39.16 40 4.02 -9.37 -14.30 -17.04 -22.59 -13.03 40 -15.66 62 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% I1 I1 I 1 I 1 I 1 I1 I1 I1 I1 I 1 I1 140 City of Clearwater Risk Measure Summary International EQ Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 2 2 1.25 1.12 0.50 -21.66 11.27 -14.16 -14.16 2 2 -18.95 10.98 -13.38 -13.38 4 8 1.19 1.02 0.58 -21.66 19.18 -15.04 31.72 23.83 1.04 0.75 0.96 0.40 9.17 4.66 0.71 3 9 -18.95 19.52 -13.38 30.92 22.48 0.28 9 11 1.18 1.01 0.55 -26.42 31.05 -47.94 71.81 29.04 1.09 0.91 0.95 -0.15 -3.88 6.82 0.46 9 11 -20.50 25.85 -46.20 55.20 25.97 -0.25 16 28 1.05 1.00 0.50 -26.42 31.05 -47.94 71.81 23.34 1.03 0.24 0.96 0.13 2.95 4.99 0.20 16 28 -20.50 25.85 -46.20 58.14 22.07 0.10 141 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios Annualized Rate of Return 10.012.615.217.820.423.025.628.230.833.436.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 I 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank I International EQ Comp 1 MSCI EAFE Median 9.623923.8460 6.457622.4835 8.5023.14 Annualized Rate of Return 14.016.619.221.824.427.029.632.234.837.440.0 -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 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank I International EQ Comp 1 MSCI EAFE Median -3.295229.0473 -5.637925.9742 -2.9526.91 142 City of Clearwater Earnest Partners as of 6/30/12 Is MSCI Emerge Arm Hldgs Plc Core Laboratories N United Industrial Co Icici Bk Ltd Shire Diageo Getinge Ab Is MSCI Eafe Rio Tinto Plc GICS Sector% Port Materials Information Technology Energy Financials Financials Health Care Consumer Staples Health Care Industrials Materials 5.13 4.27 4.06 3.48 3.42 3.20 2.92 2.87 2.49 2.49 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 13.77 12.51 9.09 4.05 2.92 13.37 31.81 9.03 3.45 0.00 -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -9.06 -6.85 36,461 -2 -3,303 33,156 -1.04 3.38 33,508 -6 -347 33,156 -14.72 -13.38 32,104 5,485 -4,433 33,156 11.20 6.45 19,915 5,478 7,763 33,156 -1.36 -5.97 29,002 5,478 -1,324 33,156 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 143 City of Clearwater Earnest Partners as of 6/30/12 Cash & Equiv $1,405 4.24% Intl Equity $31,751 95.76% Periods from 4/08 to 6/12 Alpha Beta R-Squared 1.46 1.08 0.97 Annualized Return% -2.00.02.04.06.08.010.012.014.016.018.020.022.024.026.028.0 -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 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 -1.36 -5.97 0.36 26.13 25.01 0.20 -0.07 -0.25 0.00 0.96 Asset Allocation ($000) Risk/Return Analysis 144 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 6/12 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 Last 3 Years Last 4 Years -1.62 -5.22 -6.74 -7.98 -10.27 -9.06 88 -6.85 53 -0.63 -8.84 -12.89 -15.30 -21.05 -14.72 69 -13.38 53 13.36 9.34 6.72 5.19 0.02 8.31 31 6.49 53 16.14 11.04 8.50 6.62 2.72 11.20 23 6.45 76 5.15 -0.68 -2.60 -4.55 -7.94 0.51 18 -4.47 73 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% e 1 e 1 e 1 e 1 e 1 145 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 6/30/12 YTD201120102009 10.07 6.11 4.26 3.05 -1.04 -1.04 95 3.38 68 -3.13 -10.56 -13.30 -15.59 -21.74 -6.88 13 -11.73 35 25.22 17.11 11.98 8.48 2.37 16.61 27 8.21 76 76.36 42.27 35.69 26.24 9.83 55.54 12 32.46 59 -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% e 1 e 1 e 1 e 1 146 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of International Equity Portfolios High 1st Qt Median 3rd Qt Low e Earnest Partners Net Ret Rank 1 MSCI EAFE Net Ret Rank 6/12 3/12 12/11 9/11 6/11 16.14 11.04 8.50 6.62 2.72 11.20 23 6.45 76 29.50 22.95 19.51 17.30 10.80 26.04 11 17.68 68 22.44 14.21 10.61 8.06 3.87 19.09 12 8.16 73 10.46 3.99 0.52 -1.06 -4.69 6.27 14 -0.66 69 9.15 2.67 0.88 -1.43 -5.84 6.17 11 -1.30 72 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% e 1 e 1e 1 e 1 e 1 Earnest Partners Value Added Analysis - Net of Fee 9/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.5 -4.6 6.5 5.2 1.3 3.4 2.0 3.1 2.4 0.0 3.9 -1.3-1.2 4.1 -1.9-2.4 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. MSCI EAFE 147 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios 3 Years Ending 6/30/12 Annualized Rate of Return 10.0 12.6 15.2 17.8 20.4 23.0 25.6 28.2 30.8 33.4 36.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 e 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank e Earnest Partners 1 MSCI EAFE Median 11.202323.8359 6.457622.4835 8.5023.14 148 City of Clearwater Global Equity Summary Statistics Earnest Partners Period Ending 6/12 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 51 31,750,597 29,093,465 15,270,706 2.37 14.72 12.66 1.03 1.37 91.53 3.57 1.89 920 47,353,795 6,455,465 3.90 12.81 13.82 1.00 1.28 84.39 0.77 4.49 Ten Largest Holdings Is MSCI Emerge Arm Hldgs Plc Core Laboratories N United Industrial Co Icici Bk Ltd Shire Diageo Getinge Ab Is MSCI Eafe Rio Tinto Plc Market Value% of PortfolioQuarterly Ret 1,628,016 1,353,651 1,286,490 1,103,581 1,085,735 1,014,311 927,323 911,683 789,368 788,865 5.13 4.27 4.06 3.48 3.42 3.20 2.92 2.87 2.49 2.49 -7.74 -15.62 -11.72 -7.94 -5.01 -10.97 7.28 -12.75 -6.80 -14.00 Ten Best Performers Everest Re Group Ltd Carnival Corp Diageo Icon Pub Ltd Co China Oilfield Servi Novartis A G Denso Corp Hsbc Holdings Plc Roche Holdings Ag Royal Dutch Shell Quarterly Ret 12.39 7.67 7.28 6.17 1.51 0.88 0.45 0.45 -0.55 -2.16 Ten Worst Performers Credit Suisse Group Orient Overseas Int China Shipping Conta Banco Do Brasil S A Petroleo Brasileiro Advanced Semiconduct Dnb Asa Societe Generale Nippon Steel Corp Transocean Ltd Zug Quarterly Ret -33.46 -31.88 -30.91 -30.53 -28.70 -20.66 -20.53 -20.13 -18.67 -18.23 149 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 6/12 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 Channel Islands China Colombia Czech Republic Denmark Finland France Germany Greece Hong Kong India Ireland Isle of Man Israel Italy Japan Kazakhstan Luxembourg Netherlands New Zealand Norway Panama Portugal 8.44 0.26 1.03 0.00 0.00 0.00 0.00 0.08 0.00 0.00 0.00 1.12 0.88 9.25 8.61 0.09 2.86 0.00 0.28 0.08 0.64 2.32 21.62 0.00 0.00 2.46 0.12 0.97 0.00 0.20 8.44 0.26 1.03 0.00 0.00 0.00 0.00 0.08 0.00 0.00 0.00 1.12 0.88 9.25 8.61 0.09 2.86 0.00 0.28 0.08 0.64 2.32 21.62 0.00 0.00 2.46 0.12 0.97 0.00 0.20 -3.78 -8.50 5.88 -22.79 1.58 -16.70 -3.44 -7.44 -16.77 -3.85 0.24 -16.81 -9.16 -7.26 -10.13 -2.59 -6.17 -5.39 -14.30 -4.80 -12.80 0.90 -24.20 -3.13 -20.62 -7.99 -11.80 -20.69 -3.76 -4.47 -17.43 -13.79 -11.63 -7.31 -7.16 -7.97 -9.22 -18.34 2.54 6.13 0.00 0.00 4.48 1.69 0.00 0.00 10.46 2.31 1.28 0.00 0.00 0.76 0.00 0.00 2.70 1.29 1.77 0.00 0.66 0.00 8.40 0.00 0.00 5.61 0.00 6.65 1.51 0.00 0.00 5.98 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.25 0.00 0.00 0.74 0.00 0.00 12.82 0.00 0.00 0.00 0.00 0.00 8.18 0.00 0.00 1.09 0.00 4.43 0.00 0.00 -9.81 -6.19 -22.65 -7.72 -12.77 -3.71 -0.99 -16.18 -31.95 -5.01 6.17 -9.69 -9.60 -10.04 -14.46 7.67 -9.81 -10.60 -22.65 -7.72 -12.69 -3.71 -8.16 -20.13 -31.88 -5.01 6.17 -9.69 -6.77 -10.52 -15.24 7.67 -0.07 -0.20 -0.11 0.22 0.08 0.01 0.52 0.12 0.06 -0.07 0.10 -0.13 0.21 0.01 -0.00 0.06 0.08 0.01 -0.00 0.05 0.68 0.08 0.00 -0.02 0.08 0.02 -0.06 -0.14 0.03 -0.00 0.02 0.03 0.02 0.24 0.22 0.00 0.19 0.01 -0.00 0.02 0.06 -0.62 0.04 0.00 -0.07 0.00 -0.15 0.14 -1.02 -0.13 -1.34 -0.09 -0.01 -0.10 -0.76 -0.06 0.10 -0.00 0.04 -0.42 -0.60 0.12 -0.29 -0.21 -0.08 -0.79 -0.05 0.01 -0.81 0.03 0.07 -0.04 0.12 0.01 0.43 0.01 -0.58 0.00 0.19 0.01 0.01 0.11 0.10 -0.30 0.00 -0.70 0.19 0.02 Benchmark : MSCI EAFE Index Gross Dividend 150 City of Clearwater Global Performance Attribution Analysis Earnest Partners Quarter Ending 6/12 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 Scotland Singapore South Korea Spain Sweden Switzerland Taiwan United Kingdom United States 0.09 1.80 0.00 2.89 3.19 8.55 0.00 22.44 0.00 100.00 0.09 1.80 0.00 2.89 3.19 8.55 0.00 22.44 0.00 100.00 -4.89 -1.91 -7.68 -3.34 -1.27 -1.97 -5.01 -6.64 -2.65 -12.03 -7.07 -5.72 -3.77 -6.78 0.00 3.73 2.42 1.80 2.51 6.76 2.64 18.01 3.90 100.00 0.00 3.63 0.00 1.75 2.44 1.98 0.00 8.95 46.77 100.00 -7.25 -3.83 -30.28 -9.24 -11.17 -20.66 -7.74 2.79 -10.15 -7.94 -3.83 -33.56 -12.75 -12.13 -20.66 -7.59 2.79 -10.59 -0.00 0.06 0.12 0.03 -0.01 -0.07 0.13 -0.13 0.20 2.11 -0.00 0.02 0.03 0.01 0.18 0.00 0.83 1.05 -0.20 -0.09 -0.41 -0.15 -0.67 -0.54 -1.04 0.11 -7.26 -0.00 -0.12 0.03 -0.35 -0.14 -0.56 -0.41 -1.17 1.13 -4.10 Benchmark : MSCI EAFE Index Gross Dividend Market Selection [Portfolio Active Weight - Benchmark Active Weight] x [Benchmark Local Return - Benchmark Total Local Return] Currency Selection [Portfolio Currency Weight - Benchmark Currency Weight] x [ (Benchmark US$ Return - Benchmark Local Return) - (Benchmark Total US$ Return - Benchmark Total Local Return) ] Security Selection [Portfolio Active Weight] x [Portfolio Local Return - Benchmark Local Return] 151 City of Clearwater International Equity Sector Attribution Analysis Earnest Partners Quarter Ending 6/12 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 15.86 11.88 10.61 3.74 2.59 12.83 29.33 9.58 3.59 0.00 100.00 8.54 10.18 12.72 10.83 11.22 9.32 22.58 4.83 5.44 4.33 100.00 -10.30 -12.44 -18.30 3.29 7.28 -5.62 -11.67 -14.43 -6.15 -10.49 -8.81 -13.02 -9.29 -8.85 -1.27 1.10 -7.34 -14.19 -0.02 -4.47 -6.80 -0.24 0.07 -0.96 0.45 0.22 -0.86 -1.27 -0.02 -0.22 0.00 -2.82 -0.15 -0.11 0.05 0.15 -0.48 0.28 -0.04 -0.35 -0.13 -0.10 -0.87 -0.38 -0.04 -0.90 0.60 -0.26 -0.59 -1.31 -0.37 -0.35 -0.10 -3.69 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 0.34% [ Actual Return -10.15% ] - [ Buy Hold Return -10.49% ] 152 City of Clearwater Wentworth & Violich as of 6/30/12 Agrium Inc Potash Corp Sask Inc Bhp Billiton Ltd Cooper Industries Pl Nestle S A Noble Corporation Ba Canadian Pac Railway Canadian Natl Ry Co Schlumberger Ltd Diageo GICS Sector% Port Materials Materials Materials Industrials Consumer Staples Energy Industrials Industrials Energy Consumer Staples 6.21 5.41 5.15 5.08 4.74 4.71 4.60 4.49 4.46 3.99 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 29.77 28.78 17.37 0.00 17.03 2.80 4.25 0.00 0.00 0.00 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -5.24 -6.85 30,019 -2 -1,572 28,445 5.02 3.38 27,087 -2 1,360 28,445 -12.10 -13.38 32,371 -7 -3,919 28,445 11.09 6.45 20,759 -11 7,698 28,445 -3.42 -5.97 29,002 -11 -546 28,445 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 153 City of Clearwater Wentworth & Violich as of 6/30/12 Cash & Equiv $2,454 8.63% Intl Equity $25,991 91.37% Periods from 4/08 to 6/12 Alpha Beta R-Squared 0.45 1.14 0.89 Annualized Return% -5.00.05.010.015.020.025.030.0 -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 -3.42 -5.97 0.36 28.01 25.01 0.20 -0.13 -0.25 0.00 0.08 Asset Allocation ($000) Risk/Return Analysis 154 City of Clearwater Cumulative Performance Comparison Total Returns of International Equity Portfolios Periods Ending 6/12 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 Last 3 Years Last 4 Years -1.62 -5.22 -6.74 -7.98 -10.27 -5.24 25 -6.85 53 -0.63 -8.84 -12.89 -15.30 -21.05 -12.10 42 -13.38 53 13.36 9.34 6.72 5.19 0.02 10.78 13 6.49 53 16.14 11.04 8.50 6.62 2.72 11.09 24 6.45 76 5.15 -0.68 -2.60 -4.55 -7.94 -5.01 80 -4.47 73 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% w 1 w 1 w 1 w 1 w 1 155 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 6/30/12 YTD201120102009 10.07 6.11 4.26 3.05 -1.04 5.02 40 3.38 68 -3.13 -10.56 -13.30 -15.59 -21.74 -13.64 56 -11.73 35 25.22 17.11 11.98 8.48 2.37 17.58 23 8.21 76 76.36 42.27 35.69 26.24 9.83 55.98 12 32.46 59 -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% w 1 w 1 w 1 w 1 156 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of International Equity Portfolios High 1st Qt Median 3rd Qt Low w Wentworth & Violich Net Ret Rank 1 MSCI EAFE Net Ret Rank 6/12 3/12 12/11 9/11 6/11 16.14 11.04 8.50 6.62 2.72 11.09 24 6.45 76 29.50 22.95 19.51 17.30 10.80 22.00 34 17.68 68 22.44 14.21 10.61 8.06 3.87 16.56 17 8.16 73 10.46 3.99 0.52 -1.06 -4.69 -1.15 76 -0.66 69 9.15 2.67 0.88 -1.43 -5.84 -2.51 84 -1.30 72 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% w 1 w 1 w 1 w 1 w1 Wentworth & Violich Value Added Analysis - Net of Fee 9/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% -8.4 -16.1 12.2 -0.3 -1.2 6.5 1.8 -2.0 1.2 7.6 2.9 -4.8 -6.3 6.6 -0.1 1.7 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. MSCI EAFE 157 City of Clearwater Return vs Risk Total Returns of International Equity Portfolios 3 Years Ending 6/30/12 Annualized Rate of Return 10.0 12.6 15.2 17.8 20.4 23.0 25.6 28.2 30.8 33.4 36.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 w 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Wentworth & Violich 1 MSCI EAFE Median 11.092426.4588 6.457622.4835 8.5023.14 158 City of Clearwater Global Equity Summary Statistics Wentworth & Violich Period Ending 6/12 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 36 25,990,976 48,256,101 20,641,896 2.09 17.59 14.80 0.00 1.91 53.61 5.41 6.31 920 47,353,795 6,455,465 3.90 12.81 13.82 1.00 1.28 84.39 0.77 4.49 Ten Largest Holdings Agrium Inc Potash Corp Sask Inc Bhp Billiton Ltd Cooper Industries Pl Nestle S A Noble Corporation Ba Canadian Pac Railway Canadian Natl Ry Co Schlumberger Ltd Diageo Market Value% of PortfolioQuarterly Ret 1,612,808 1,403,760 1,335,385 1,317,579 1,230,644 1,221,502 1,194,138 1,166,554 1,158,644 1,035,854 6.21 5.41 5.15 5.08 4.74 4.71 4.60 4.49 4.46 3.99 3.01 -4.06 -9.81 7.08 -2.43 -12.87 -3.08 6.73 -6.78 6.81 Ten Best Performers Partnerre Hldgs Ltd Cooper Industries Pl Diageo Canadian Natl Ry Co Brookfield Asset Mgm Agrium Inc Ingersoll-Rand Plc Syngenta Ag British Amern Tob Pl Novartis A G Quarterly Ret 12.43 7.08 6.81 6.73 5.29 3.01 2.42 1.50 0.89 0.88 Ten Worst Performers Manulife Finl Corp Canadian Nat Res Ltd Basf Ag Transocean Ltd Zug Nabors Industries Lt Finning Tractor & Eq Weatherford Internat Ubs Ag Axa Sa Vale S A Quarterly Ret -18.77 -18.75 -18.41 -18.23 -17.67 -16.52 -16.30 -15.07 -14.98 -14.92 159 City of Clearwater Global Performance Attribution Analysis Wentworth & Violich Quarter Ending 6/12 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 Channel Islands China 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 8.44 0.26 1.03 0.00 0.00 0.00 0.00 0.08 0.00 1.12 0.88 9.25 8.61 0.09 2.86 0.28 0.08 0.64 2.32 21.62 0.00 0.00 0.00 2.46 0.12 0.97 0.20 0.09 1.80 2.89 8.44 0.26 1.03 0.00 0.00 0.00 0.00 0.08 0.00 1.12 0.88 9.25 8.61 0.09 2.86 0.28 0.08 0.64 2.32 21.62 0.00 0.00 0.00 2.46 0.12 0.97 0.20 0.09 1.80 2.89 -3.78 -8.50 5.88 -22.79 1.58 -16.70 -3.44 -7.44 -16.77 -3.85 0.24 -16.81 -9.16 -7.26 -10.13 -2.59 -6.17 -5.39 -14.30 -4.89 -1.91 -7.68 -4.80 -12.80 0.90 -24.20 -3.13 -20.62 -7.99 -11.80 -20.69 -3.76 -4.47 -17.43 -13.79 -11.63 -7.31 -7.16 -7.97 -9.22 -18.34 -6.64 -2.65 -12.03 5.34 0.00 0.00 9.83 3.04 28.95 5.07 0.00 0.00 0.00 0.00 0.53 2.92 0.00 0.00 2.74 0.00 0.00 0.00 0.00 0.00 3.26 4.50 6.38 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 -9.81 -1.50 -14.82 -3.35 -12.87 -14.98 -18.41 2.42 -7.17 -6.78 -7.27 -6.86 -9.81 -1.50 -14.82 -3.35 -12.87 -14.98 -18.41 2.42 -7.17 -6.78 -7.27 -6.86 -0.04 0.01 -0.11 0.49 0.15 1.45 0.25 0.01 -0.07 0.10 -0.14 0.14 0.01 -0.03 0.13 0.01 0.03 0.05 1.11 0.16 0.23 0.10 0.00 0.00 0.02 -0.00 -0.06 0.08 -0.06 0.01 0.03 -0.00 0.03 0.02 0.26 0.22 0.00 -0.05 0.01 -0.00 0.02 0.06 -0.99 0.07 0.00 0.02 0.00 -0.00 -0.02 0.07 -0.32 -0.15 -0.45 -0.97 -0.65 -0.06 -0.32 0.06 -0.23 -0.31 -0.30 -0.00 -0.42 0.02 -0.08 0.35 -0.30 0.48 -0.40 0.01 -0.04 0.12 0.06 0.04 0.01 -0.09 0.20 0.01 0.04 0.11 0.11 -0.07 -0.08 -0.13 0.00 0.02 0.02 -0.00 -0.07 0.15 Benchmark : MSCI EAFE Index Gross Dividend 160 City of Clearwater Global Performance Attribution Analysis Wentworth & Violich Quarter Ending 6/12 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 3.19 8.55 22.44 0.00 100.00 3.19 8.55 22.44 0.00 100.00 -3.34 -1.27 -1.97 -5.01 -7.07 -5.72 -3.77 -6.78 0.00 17.42 9.85 0.00 100.00 0.00 0.00 0.00 100.00 100.00 -7.99 -1.25 -5.82 -7.99 -1.25 -5.82 -0.05 0.33 -0.38 3.98 0.06 0.23 0.01 1.77 1.77 -1.17 0.07 -4.81 0.01 -0.61 -0.31 1.77 0.94 Benchmark : MSCI EAFE Index Gross Dividend Market Selection [Portfolio Active Weight - Benchmark Active Weight] x [Benchmark Local Return - Benchmark Total Local Return] Currency Selection [Portfolio Currency Weight - Benchmark Currency Weight] x [ (Benchmark US$ Return - Benchmark Local Return) - (Benchmark Total US$ Return - Benchmark Total Local Return) ] Security Selection [Portfolio Active Weight] x [Portfolio Local Return - Benchmark Local Return] 161 City of Clearwater International Equity Sector Attribution Analysis Wentworth & Violich Quarter Ending 6/12 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 32.03 29.27 15.86 0.00 16.10 2.60 4.14 0.00 0.00 0.00 100.00 8.54 10.18 12.72 10.83 11.22 9.32 22.58 4.83 5.44 4.33 100.00 -12.67 -7.32 2.98 -0.06 0.88 -2.65 -5.82 -8.81 -13.02 -9.29 -8.85 -1.27 1.10 -7.34 -14.19 -0.02 -4.47 -6.80 -1.24 1.67 1.95 0.00 0.19 -0.01 0.19 0.00 0.00 0.00 2.76 -0.47 -1.19 -0.08 0.22 0.27 -0.53 0.10 0.36 -0.37 -0.10 -1.79 -1.71 0.48 1.87 0.22 0.46 -0.54 0.30 0.36 -0.37 -0.10 0.97 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 0.10% [ Actual Return -5.73% ] - [ Buy Hold Return -5.82% ] 162 City of Clearwater Eaton Vance Mgmt as of 6/30/12 -18.0 -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 -7.57 -8.78 36,496 0 -2,761 33,734 5.52 4.12 25,011 7,692 1,030 33,734 -14.88 -15.67 31,008 7,692 -4,967 33,734 10.56 10.10 19,527 7,536 6,671 33,734 -2.30 -2.92 8,277 7,536 17,921 33,734 Portfolio Performance (%) 163 City of Clearwater Eaton Vance Mgmt as of 6/30/12 Cash & Equiv $0 0.00% Intl Equity $33,734 100.00% Periods from 4/08 to 6/12 Alpha Beta R-Squared 0.05 0.99 0.98 Annualized Return% -5.00.05.010.015.020.025.030.035.0 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 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 -2.30 -2.92 0.36 29.06 30.42 0.20 -0.09 -0.11 0.00 0.00 Asset Allocation ($000) Risk/Return Analysis 164 City of Clearwater Cumulative Performance Comparison Total Returns of Emerging Markets Portfolios Periods Ending 6/12 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 Last 3 Years Last 4 Years -0.76 -3.68 -7.45 -8.41 -11.28 -7.57 51 -8.78 82 1.26 -5.33 -10.70 -16.00 -21.69 -14.88 61 -15.67 68 14.70 7.94 5.31 3.28 -2.01 4.27 67 3.96 71 19.73 13.57 10.67 8.64 4.57 10.56 51 10.10 55 9.06 3.30 -0.48 -2.77 -4.46 -0.63 50 -0.93 52 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% v 1 v 1 v 1 v 1 v 1 165 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 6/30/12 YTD201120102009 10.07 8.27 4.50 3.47 -0.33 5.52 44 4.12 55 -1.80 -11.05 -17.41 -19.16 -25.62 -19.27 76 -18.17 64 29.89 23.83 20.47 18.43 7.41 23.33 30 19.19 60 88.13 77.73 71.34 63.20 27.05 67.01 69 79.02 19 -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% v 1 v 1 v1 v 1 166 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of International Equity Portfolios High 1st Qt Median 3rd Qt Low v Eaton Vance Mgmt Net Ret Rank 1 MSCI Emg Mkts Net Ret Rank 6/12 3/12 12/11 9/11 6/11 16.14 11.04 8.50 6.62 2.72 10.56 30 10.10 34 29.50 22.95 19.51 17.30 10.80 26.34 10 25.42 12 22.44 14.21 10.61 8.06 3.87 18.48 13 20.42 7 10.46 3.99 0.52 -1.06 -4.69 5.44 18 6.59 13 9.15 2.67 0.88 -1.43 -5.84 4.63 15 4.53 15 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% v 1 v 1 v 1 v 1 v1 Eaton Vance Mgmt Value Added Analysis - Net of Fee 9/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -7.0% -6.0% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 5.4 -0.6 -6.8 2.3 0.5 -2.6 2.9 0.0 0.40.2 -1.4 0.5 1.8 -2.2 0.0 1.3 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. MSCI Emg Mkts 167 City of Clearwater Return vs Risk Total Returns of Emerging Markets Portfolios 3 Years Ending 6/30/12 Annualized Rate of Return 10.0 12.8 15.6 18.4 21.2 24.0 26.8 29.6 32.4 35.2 38.0 2.0 3.8 5.6 7.4 9.2 11.0 12.8 14.6 16.4 18.1 19.9 w 1 MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Wentworth & Violich 1 MSCI EAFE Median 11.094226.4590 6.458522.4830 10.6724.56 168 City of Clearwater Fixed Income Comp as of 6/30/12 United States Treas United States Treas Fhgld Gu Sf 15 - Tba United States Treas United States Treas United States Treas FNMA Pool #ad0494 United States Treas United States Treas FNMA Ci 15 - Tba Jul Sector% Port Government Government Mortgage Government Government Government Mortgage Government Government Mortgage 2.08 1.75 1.58 1.36 1.24 1.07 1.05 0.98 0.91 0.90 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 20.51 16.95 18.25 35.99 1.70 0.89 4.12 0.91 0.68 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 1.67 2.06 206,131 -3,880 3,400 205,650 3.44 2.37 200,087 -1,330 6,893 205,650 6.52 7.48 191,806 1,235 12,609 205,650 7.82 6.93 165,102 -5,744 46,293 205,650 7.29 6.80 208,746 -5,744 2,649 205,650 5.90 5.63 178,405 -5,744 32,990 205,650 6.96 7.31 59,224 -5,744 152,170 205,650 Holdings and allocations only include SMA accounts. Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 169 City of Clearwater Fixed Income Comp as of 6/30/12 Other $0 0.00% Domestic Equity $3 0.00% Cash & Equiv $24,855 12.09% Domestic Fixed $180,793 87.91% Periods from 12/87 to 6/12 Alpha Beta R-Squared 0.25 0.59 0.57 Annualized Return% 1.01.52.02.53.03.54.04.5 3.5 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 6.96 7.31 3.98 3.10 4.08 1.21 0.96 0.82 0.00 -0.15 Asset Allocation ($000) Risk/Return Analysis Holdings and allocations only include SMA accounts. 170 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 6/12 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 5.84 2.50 1.90 1.03 -0.00 1.67 55 2.06 44 19.90 8.27 6.94 4.45 0.47 6.52 55 7.48 39 13.04 8.81 6.43 5.00 1.23 5.87 61 5.67 64 16.80 10.87 8.13 6.30 1.71 7.82 53 6.93 66 11.99 8.83 7.22 5.52 1.25 7.65 43 6.71 61 10.10 8.12 7.14 5.79 1.99 7.29 46 6.80 61 9.58 7.92 6.97 5.73 2.64 7.14 45 6.68 60 8.43 6.89 5.97 5.23 2.66 6.10 44 5.58 67 8.94 7.05 6.16 5.37 2.77 6.14 50 5.73 68 8.65 6.52 5.55 4.77 3.18 5.43 55 5.12 68 9.54 7.04 6.14 5.44 3.32 5.90 60 5.63 70 -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% F1 F 1 F1 F 1 F 1 F1 F1 F1 F1 F1 F1 171 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 6/30/12 YTD2011201020092008200720062005200420032002 7.91 5.69 3.60 2.39 0.47 3.44 54 2.37 75 13.88 7.79 6.16 3.87 0.09 5.94 54 7.84 23 15.82 9.93 7.13 5.58 0.56 7.37 46 6.54 61 21.09 13.37 8.34 5.28 -0.49 12.37 28 5.93 69 9.76 5.42 3.14 -2.27 -15.77 2.54 54 5.24 28 9.73 7.48 6.53 5.06 2.22 5.94 61 6.96 40 11.68 5.31 4.57 4.13 2.80 5.05 30 4.33 64 6.79 3.10 2.55 2.04 1.32 2.59 48 2.43 57 10.76 5.25 4.35 3.17 1.32 3.93 62 4.34 50 20.91 6.15 4.51 3.60 1.77 3.77 71 4.11 63 12.61 10.43 9.33 6.99 0.88 8.06 66 10.26 29 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% F1 F 1 F1 F 1 F 1 F1 F1 F1 F1 F1 F 1 172 City of Clearwater Risk Measure Summary Fixed Income Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 0 4 0.87 0.50 1.19 1.76 6.52 6.52 0 4 0.30 3.82 7.48 7.48 1 11 1.08 0.30 0.67 -0.39 5.40 4.29 11.86 2.78 0.72 0.69 0.64 2.77 10.78 2.03 0.40 1 11 -1.30 3.82 3.90 9.50 3.20 2.13 4 16 1.09 1.26 0.50 -2.54 5.72 0.68 15.87 3.90 0.93 0.22 0.60 1.62 6.79 2.62 0.17 3 17 -1.30 4.57 3.13 10.56 3.38 1.72 16 82 0.89 0.30 0.47 -2.54 5.72 -0.07 15.87 3.10 0.59 0.25 0.57 0.96 5.08 2.63 -0.15 19 79 -2.87 7.96 -3.23 18.48 4.08 0.82 173 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 F 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank F Fixed Income Comp 1 BC Agg Median 7.82532.7826 6.93663.2040 8.133.55 Annualized Rate of Return 0.01.83.65.47.29.010.812.614.416.218.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 F1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank F Fixed Income Comp 1 BC Agg Median 7.29463.9044 6.80613.3830 7.144.50 174 City of Clearwater Dodge & Cox as of 6/30/12 United States Treas United States Treas United States Treas United States Treas FNMA Pool #ad0494 Xerox Corp Sr Nt 6.4 Aol Time Warner Inc FNMA Pool #ad0217 Citigroup Inc Sr Nt General Elec Cap Cor Sector% Port Government Government Government Government Mortgage Industrials Industrials Mortgage Finance Industrials 3.86 3.26 2.53 2.31 1.95 1.65 1.49 1.49 1.35 1.29 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 24.23 15.13 18.83 30.37 2.12 0.94 6.92 0.65 0.82 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 1.42 2.06 113,988 -5,001 1,607 110,595 4.08 2.37 111,073 -5,002 4,524 110,595 6.07 7.48 108,989 -5,005 6,610 110,595 8.14 6.93 93,893 -7,420 24,122 110,595 7.25 6.80 97,852 -7,420 20,163 110,595 5.76 5.28 75,656 -7,420 42,359 110,595 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 175 City of Clearwater Dodge & Cox as of 6/30/12 Cash & Equiv $2,680 2.42% Domestic Fixed $107,915 97.58% Periods from 2/04 to 6/12 Alpha Beta R-Squared 0.27 0.82 0.55 Annualized Return% 0.51.01.52.02.53.03.54.0 1.5 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 5.76 5.28 1.97 3.59 3.44 0.58 1.06 0.96 0.00 0.16 Asset Allocation ($000) Risk/Return Analysis 176 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 6/12 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 Last 7 Years Last 8 Years 5.84 2.50 1.90 1.03 -0.00 1.42 64 2.06 44 19.90 8.27 6.94 4.45 0.47 6.07 61 7.48 39 13.04 8.81 6.43 5.00 1.23 5.94 60 5.67 64 16.80 10.87 8.13 6.30 1.71 8.14 49 6.93 66 11.99 8.83 7.22 5.52 1.25 7.83 40 6.71 61 10.10 8.12 7.14 5.79 1.99 7.25 46 6.80 61 9.58 7.92 6.97 5.73 2.64 7.19 43 6.68 60 8.43 6.89 5.97 5.23 2.66 6.24 38 5.58 67 8.94 7.05 6.16 5.37 2.77 6.25 46 5.73 68 -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% d1 d 1 d1 d 1 d 1 d1 d1 d1 d1 177 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 6/30/12 YTD2011201020092008200720062005 7.91 5.69 3.60 2.39 0.47 4.08 42 2.37 75 13.88 7.79 6.16 3.87 0.09 5.10 62 7.84 23 15.82 9.93 7.13 5.58 0.56 7.53 44 6.54 61 21.09 13.37 8.34 5.28 -0.49 14.53 17 5.93 69 9.76 5.42 3.14 -2.27 -15.77 1.37 60 5.24 28 9.73 7.48 6.53 5.06 2.22 5.47 67 6.96 40 11.68 5.31 4.57 4.13 2.80 5.62 21 4.33 64 6.79 3.10 2.55 2.04 1.32 2.40 59 2.43 57 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% d 1 d 1 d1 d 1 d 1 d1 d 1 d1 178 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Fixed Income Portfolios High 1st Qt Median 3rd Qt Low d Dodge & Cox Return Rank 1 BC Agg Return Rank 6/12 3/12 12/11 9/11 6/11 16.80 10.87 8.13 6.30 1.71 8.14 49 6.93 66 21.33 12.35 8.40 6.07 0.62 10.08 34 6.84 65 20.40 10.86 8.04 5.79 0.81 8.98 38 6.77 64 15.13 10.07 8.24 6.11 0.47 9.79 30 7.97 55 11.99 8.62 6.83 5.24 0.51 8.42 27 6.46 57 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% d 1 d 1 d 1 d 1 d 1 Dodge & Cox Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -7.0% -6.0% -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 -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 0.8 -0.4 -2.9 0.0 2.3 -0.6 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. BC Agg 179 City of Clearwater Risk Measure Summary Dodge & Cox Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 0 4 0.81 0.25 0.83 2.63 6.07 6.07 0 4 0.30 3.82 7.48 7.48 0 12 1.09 -0.10 0.50 0.13 5.73 4.12 12.68 2.80 0.51 1.10 0.32 2.86 15.66 2.98 0.37 1 11 -1.30 3.82 3.90 9.50 3.20 2.13 3 17 1.07 1.06 0.40 -2.88 6.98 -0.26 17.78 4.17 0.78 0.44 0.36 1.51 8.10 3.65 0.11 3 17 -1.30 4.57 3.13 10.56 3.38 1.72 7 26 1.04 0.72 0.52 -2.88 6.98 -0.26 17.78 3.84 0.82 0.27 0.55 0.98 4.57 2.86 0.16 9 24 -2.44 4.57 -0.81 10.56 3.54 0.92 180 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 d 1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank d Dodge & Cox 1 BC Agg Median 8.14492.8027 6.93663.2040 8.133.55 Annualized Rate of Return 0.01.83.65.47.29.010.812.614.416.218.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 d1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank d Dodge & Cox 1 BC Agg Median 7.25464.1748 6.80613.3830 7.144.50 181 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Dodge & Cox Quarter Ending 6/12 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBC Agg 184 107,915,161 2.40 12.58 5.44 5.11 0.49 4.75 6.98 7,921 1.98 7.05 3.78 5.11 -0.22 5.07 7.05 Yield to Maturity 5+ 14.5% 4 - 510.0% 3 - 425.9% 2 - 324.8% 1 - 28.9% 0 - 116.0% Time to Maturity 10+ 47.2% 7 - 106.1% 5 - 716.7% 3 - 513.2% 1 - 36.8% 0 - 19.9% Coupon 11+ 0.0% 9 - 111.1% 7 - 917.4% 5 - 756.7% 3 - 511.2% 0 - 313.6% Quality NR 1.7% B 0.4% BA 2.3% BAA 28.7% A 19.7% AA 2.5% AAA 30.8% GOVT 13.8% Duration 8+ 19.2% 6 - 85.8% 4 - 625.0% 3 - 424.6% 1 - 315.1% 0 - 110.3% Effective Duration 8+ 17.5% 6 - 85.6% 4 - 623.6% 3 - 423.6% 1 - 317.7% 0 - 112.1% 182 City of Clearwater Percent Invested by Sector and Quality Dodge & Cox As of 6/30/12 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 15.13 12.53 2.60 --- --- --- --- --- --- 29.51 --- 8.52 18.99 2.00 --- --- --- 44.64 --- --- --- 1.27 --- --- 1.27 --- 0.47 --- --- --- --- --- 0.79 --- --- 2.53 --- --- --- 13.05 4.71 --- 7.70 0.65 0.56 --- --- --- --- --- 6.13 --- --- 19.74 --- --- --- 27.57 13.12 0.49 13.97 --- 1.09 --- --- --- --- --- --- --- --- 28.66 --- --- --- 2.31 1.01 --- 1.30 --- --- --- --- --- --- --- --- --- --- 2.31 --- --- --- 0.45 --- 0.45 --- --- --- --- --- --- --- --- --- --- --- 0.45 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 0.86 --- --- 0.86 --- --- --- 0.82 1.67 15.13 12.53 2.60 44.65 18.84 0.94 24.24 0.65 2.12 30.37 --- 8.52 19.85 2.00 6.92 --- 0.82 100.00 183 City of Clearwater Fixed Income Sector Attribution Analysis Dodge & Cox Quarter Ending 6/12 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 22.44 13.41 17.38 36.51 2.04 0.91 6.69 0.62 0.00 100.00 9.87 41.30 10.81 33.77 0.37 1.77 0.01 2.06 0.04 100.00 2.07 0.34 2.73 1.52 2.06 1.25 21.23 2.91 3.03 1.70 2.61 2.66 1.67 3.77 3.14 4.49 1.57 1.73 2.20 0.08 -0.30 0.01 -0.05 -0.03 -0.02 1.12 0.01 0.00 0.81 -0.06 -0.11 0.03 -0.01 0.03 -0.01 0.15 0.01 0.00 0.02 0.02 -0.42 0.04 -0.07 -0.01 -0.03 1.27 0.02 0.00 0.83 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 -1.59% [ Actual Return 1.44% ] - [ Buy Hold Return 3.03% ] 184 City of Clearwater Western Asset Management Co. as of 6/30/12 Fhgld Gu Sf 15 - Tba United States Treas United States Treas United States Treas FNMA Ci 15 - Tba Jul GNMA Ii Sf 30 - Tba FNMA Cl 30 - Tba Jul Freddie Mac Gold FNMA Ci 15 - Tba Jul FNMA Cl 30 - Tba Jul Sector% Port Mortgage Government Government Government Mortgage Mortgage Mortgage Mortgage Mortgage Mortgage 3.61 2.45 2.25 2.08 2.07 1.55 1.54 1.54 1.52 1.46 Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous % Port 15.01 19.64 17.39 44.27 1.09 0.82 0.00 1.30 0.49 -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 2.04 2.06 87,894 -3 1,791 89,682 2.70 2.37 87,331 -9 2,359 89,682 7.15 7.48 83,727 -35 5,989 89,682 7.36 6.93 72,517 -47 17,212 89,682 7.21 6.80 95,293 -47 -5,565 89,682 5.82 5.49 74,568 -47 15,161 89,682 Portfolio Performance (%) Top Fixed Income HoldingsSector Allocation 185 City of Clearwater Western Asset Management Co. as of 6/30/12 Other $0 0.00% Cash & Equiv $16,804 18.74% Domestic Fixed $72,878 81.26% Periods from 9/04 to 6/12 Alpha Beta R-Squared 0.02 1.07 0.91 Annualized Return% 0.51.01.52.02.53.03.54.0 1.5 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 5.82 5.49 2.03 3.70 3.32 1.02 1.02 1.04 0.00 0.26 Asset Allocation ($000) Risk/Return Analysis 186 City of Clearwater Cumulative Performance Comparison Total Returns of Fixed Income Portfolios Periods Ending 6/12 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 Last 7 Years 5.84 2.50 1.90 1.03 -0.00 2.04 45 2.06 44 19.90 8.27 6.94 4.45 0.47 7.15 44 7.48 39 13.04 8.81 6.43 5.00 1.23 5.80 62 5.67 64 16.80 10.87 8.13 6.30 1.71 7.36 60 6.93 66 11.99 8.83 7.22 5.52 1.25 7.31 47 6.71 61 10.10 8.12 7.14 5.79 1.99 7.21 47 6.80 61 9.58 7.92 6.97 5.73 2.64 7.02 48 6.68 60 8.43 6.89 5.97 5.23 2.66 5.92 53 5.58 67 -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% w1 w1 w1 w1 w1 w1 w 1w1 187 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 6/30/12 YTD2011201020092008200720062005 7.91 5.69 3.60 2.39 0.47 2.70 66 2.37 75 13.88 7.79 6.16 3.87 0.09 7.23 35 7.84 23 15.82 9.93 7.13 5.58 0.56 7.09 50 6.54 61 21.09 13.37 8.34 5.28 -0.49 9.24 44 5.93 69 9.76 5.42 3.14 -2.27 -15.77 3.92 44 5.24 28 9.73 7.48 6.53 5.06 2.22 6.51 50 6.96 40 11.68 5.31 4.57 4.13 2.80 4.66 45 4.33 64 6.79 3.10 2.55 2.04 1.32 2.77 39 2.43 57 -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% w1 w1 w1 w 1 w1 w1 w 1 w1 188 City of Clearwater June 30, 2012 Cumulative Performance Comparison Total Returns of Fixed Income Portfolios High 1st Qt Median 3rd Qt Low w Western Asset Management Co. Return Rank 1 BC Agg Return Rank 6/12 3/12 12/11 9/11 6/11 16.80 10.87 8.13 6.30 1.71 7.36 60 6.93 66 21.33 12.35 8.40 6.07 0.62 8.09 52 6.84 65 20.40 10.86 8.04 5.79 0.81 7.85 51 6.77 64 15.13 10.07 8.24 6.11 0.47 9.20 38 7.97 55 11.99 8.62 6.83 5.24 0.51 7.36 40 6.46 57 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% w 1 w 1 w 1 w 1w 1 Western Asset Management Co. Value Added Analysis - Net of Fee 9/0712/073/086/089/0812/083/096/099/0912/093/106/109/1012/103/116/119/1112/113/126/12 -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 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 0.1 0.0 -0.8 0.2 0.3 0.0 Cumulative Value Added 2 Yr Rolling Avg (Annualized) Quarterly Value Added vs. BC Agg 189 City of Clearwater Risk Measure Summary Western Asset Management Co. Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 0 4 0.96 0.50 0.65 2.94 7.15 7.15 0 4 0.30 3.82 7.48 7.48 1 11 1.05 0.84 0.67 -1.09 4.64 4.46 10.57 3.12 0.95 0.18 0.94 2.32 7.60 0.81 0.50 1 11 -1.30 3.82 3.90 9.50 3.20 2.13 4 16 1.10 1.50 0.60 -2.17 5.22 1.56 14.60 3.92 1.10 -0.05 0.87 1.59 5.65 1.49 0.27 3 17 -1.30 4.57 3.13 10.56 3.38 1.72 9 22 1.08 1.23 0.61 -2.17 5.22 -0.46 14.60 3.70 1.07 0.02 0.91 1.02 3.54 1.21 0.26 8 23 -1.30 4.57 -0.81 10.56 3.32 1.04 190 City of Clearwater Return vs Risk Total Returns of Fixed Income Portfolios Annualized Rate of Return 0.01.22.43.64.86.07.28.49.610.812.0 0.0 1.8 3.6 5.3 7.2 9.0 10.8 12.6 14.4 16.2 18.0 w1 MedianRisk Median Return Historical Standard Deviation of Return 3 Years Ending 6/30/12 Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank w Western Asset Management Co. 1 BC Agg Median 7.36603.1236 6.93663.2040 8.133.55 Annualized Rate of Return 0.01.83.65.47.29.010.812.614.416.218.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 w1 MedianRisk Median Return Historical Standard Deviation of Return 5 Years Ending 6/30/12 Annualized Net of Fee Return Standard Deviation Value Rank Value Rank w Western Asset Management Co. 1 BC Agg Median 7.21473.9244 6.80613.3830 7.144.50 191 City of Clearwater Fixed Income, Mortgage and Municipals Summary Statistics Western Asset Management Co. Quarter Ending 6/12 Total Number Of Securities Total Market Value Yield to Maturity Time to Maturity Current Coupon Duration Effective Convexity Effective Duration Effective Maturity PortfolioBC Agg 292 72,877,516 2.18 18.47 4.12 5.95 0.43 5.22 8.85 7,921 1.98 7.05 3.78 5.11 -0.22 5.07 7.05 Yield to Maturity 5+ 5.9% 4 - 56.1% 3 - 412.8% 2 - 325.7% 1 - 226.5% 0 - 123.0% Time to Maturity 10+ 57.0% 7 - 1012.8% 5 - 77.3% 3 - 57.7% 1 - 38.3% 0 - 16.9% Coupon 11+ 0.1% 9 - 111.4% 7 - 94.5% 5 - 738.9% 3 - 530.0% 0 - 325.2% Quality NR 1.6% BA 0.8% BAA 16.1% A 15.5% AA 3.6% AAA 45.3% GOVT 17.1% Duration 8+ 22.4% 6 - 86.6% 4 - 615.6% 3 - 423.9% 1 - 325.1% 0 - 16.3% Effective Duration 8+ 21.0% 6 - 87.0% 4 - 610.8% 3 - 411.9% 1 - 339.8% 0 - 19.5% 192 City of Clearwater Percent Invested by Sector and Quality Western Asset Management Co. As of 6/30/12 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 19.11 13.34 5.77 0.43 --- --- --- 0.43 --- 42.91 15.09 11.33 15.94 0.54 --- --- --- 62.45 0.26 --- 0.26 2.61 0.53 --- 1.49 0.60 0.20 0.55 --- --- --- 0.55 --- --- --- 3.62 0.09 --- 0.09 15.39 8.09 0.67 6.49 0.14 --- --- --- --- --- --- --- --- --- 15.48 0.19 --- 0.19 15.29 8.78 0.14 6.25 0.13 0.63 --- --- --- --- --- --- --- --- 16.11 --- --- --- 0.01 --- --- 0.01 --- 0.26 --- --- --- --- --- --- --- 0.49 0.75 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 0.77 --- --- 0.77 --- --- 0.81 0.37 --- 0.43 --- --- --- --- 1.58 19.65 13.34 6.31 34.50 17.40 0.81 15.01 1.30 1.09 44.27 15.46 11.33 16.37 1.09 --- --- 0.49 100.00 193 City of Clearwater Fixed Income Sector Attribution Analysis Western Asset Management Co. Quarter Ending 6/12 Weight Portfolio Index Return Portfolio Index Selection Security Sector Total Finance Government Industrials Mortgage Transportation Utilities Municipals Foreign Miscellaneous 16.17 24.46 17.59 38.94 1.17 0.78 0.00 0.40 0.48 100.00 9.87 41.30 10.81 33.77 0.37 1.77 0.01 2.06 0.04 100.00 1.72 6.16 2.76 1.60 2.35 4.04 0.00 0.23 2.96 1.70 2.61 2.66 1.67 3.77 3.14 4.49 1.57 1.73 2.20 0.00 0.87 0.02 -0.03 -0.02 0.01 -0.00 -0.01 0.00 0.85 -0.03 -0.07 0.03 -0.03 0.01 -0.01 -0.00 0.01 -0.00 -0.09 -0.03 0.80 0.05 -0.05 -0.00 -0.00 -0.00 0.01 -0.00 0.76 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 -0.35% [ Actual Return 2.60% ] - [ Buy Hold Return 2.96% ] 194 City of Clearwater Real Estate Comp as of 6/30/12 Simon Ppty Group Inc Equity Residential P Public Storage Inc Prologis Inc Hcp Inc Ventas Inc Avalonbay Cmntys Inc Apartment Invt & Mgm Sl Green Rlty Corp Health Care Reit Inc GICS Sector% Port Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials 10.80 7.84 7.15 6.60 6.01 5.57 4.89 4.44 4.20 4.13 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 0.00 0.00 0.00 1.62 0.00 0.00 98.38 0.00 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 4/30/08 Real Estate CompPolicy Index Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 4/30/08 Real Estate Comp Policy Index Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 2.47 3.22 73,426 959 1,834 76,219 9.84 11.74 68,499 959 6,761 76,219 9.73 13.25 68,565 958 6,696 76,219 31.85 32.15 33,882 -931 43,268 76,219 2.31 2.76 19,347 -931 57,803 76,219 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 195 City of Clearwater Real Estate Comp as of 6/30/12 Cash & Equiv $2,674 3.51% Domestic Equity $41,178 54.03% Real Estate $32,366 42.46% Periods from 4/08 to 6/12 Alpha Beta R-Squared -0.06 0.99 0.99 Annualized Return% -5.00.05.010.015.020.025.030.035.040.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 R 1 T Annualized Standard Deviation% R Real Estate Comp 1 Policy Index T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 2.31 2.76 0.36 35.36 35.63 0.20 0.06 0.07 0.00 -0.11 Asset Allocation ($000) Risk/Return Analysis 196 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 6/12 High 1st Qt Median 3rd Qt Low R Real Estate Comp Net Ret Rank 1 Policy Index Net Ret Rank Last Qtr Last 2 Qtrs Last 3 Qtrs Last 4 Qtrs 6.07 3.55 2.30 1.30 -1.25 2.47 43 3.22 29 15.69 13.29 5.78 3.72 -1.78 9.84 32 11.74 30 32.85 22.33 9.21 6.31 -4.54 20.44 28 24.37 20 20.67 13.17 11.08 3.53 -8.69 9.73 59 13.25 23 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% R 1 R 1 R 1 R 1 197 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 Policy Index Net Ret Rank 6/30/12 YTD201120102009 15.69 13.29 5.78 3.72 -1.78 9.84 32 11.74 30 24.97 16.67 12.52 5.59 -12.85 8.85 62 11.62 54 30.69 18.42 13.91 3.68 -23.52 30.51 5 24.96 12 38.04 -3.23 -28.19 -31.21 -45.86 24.68 14 29.20 11 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% R 1 R 1 R 1 R 1 198 City of Clearwater Risk Measure Summary Real Estate Comp Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 1 3 0.84 1.00 0.25 -8.90 9.65 9.73 9.73 1 3 -8.94 11.30 13.25 13.25 2 10 0.97 0.87 0.42 -8.90 33.55 6.21 58.46 20.44 0.94 0.35 0.99 1.55 33.75 2.77 -0.17 2 10 -8.94 35.93 7.43 56.07 21.64 1.48 4 12 0.97 0.99 0.44 -37.93 33.98 -45.85 118.01 38.67 0.99 -0.06 0.99 0.14 5.25 3.36 -0.11 4 12 -40.40 35.93 -45.65 115.40 38.74 0.14 199 City of Clearwater Return vs Risk Total Returns of Real Estate Portfolios 3 Years Ending 6/30/12 Annualized Rate of Return 0.0 3.6 7.2 10.8 14.4 18.0 21.6 25.2 28.8 32.4 36.0 -25.0 -18.5 -12.0 -5.5 1.0 7.5 14.0 20.5 27.0 33.5 40.0 R 1MedianRisk Median Return Historical Standard Deviation of Return Annualized Net of Fee ReturnStandard Deviation ValueRankValueRank R Real Estate Comp 1 Policy Index Median 31.851220.4469 32.151221.6473 8.4310.22 200 City of Clearwater Security Capital as of 6/30/12 Simon Ppty Group Inc Equity Residential P Public Storage Inc Prologis Inc Hcp Inc Ventas Inc Avalonbay Cmntys Inc Apartment Invt & Mgm Sl Green Rlty Corp Health Care Reit Inc GICS Sector% Port Financials Financials Financials Financials Financials Financials Financials Financials Financials Financials 10.80 7.84 7.15 6.60 6.01 5.57 4.89 4.44 4.20 4.13 Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecom Services Utilities % Port 0.00 0.00 0.00 1.62 0.00 0.00 98.38 0.00 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 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 3.10 3.54 46,514 -4,000 1,336 43,851 14.29 14.85 41,960 -4,000 5,891 43,851 10.95 12.56 46,098 -6,809 4,561 43,851 33.16 33.58 33,882 -28,810 38,778 43,851 3.04 3.51 19,347 -28,810 53,314 43,851 Portfolio Performance (%) Top Equity HoldingsGICS Sector Allocation 201 City of Clearwater Security Capital as of 6/30/12 Cash & Equiv $2,672 6.09% Domestic Equity $41,178 93.91% Periods from 4/08 to 6/12 Alpha Beta R-Squared -0.08 0.99 0.99 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 s 1 T Annualized Standard Deviation% s Security Capital 1 Wilshire RESI T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio 3.04 3.51 0.36 36.69 37.01 0.20 0.07 0.09 0.00 -0.15 Asset Allocation ($000) Risk/Return Analysis 202 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 6/12 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 Last 3 Years Last 4 Years 6.07 3.55 2.30 1.30 -1.25 3.10 30 3.54 25 20.67 13.17 11.08 3.53 -8.69 10.95 51 12.56 34 24.93 19.61 15.55 10.11 -0.46 22.06 17 23.59 8 33.24 15.03 8.43 4.81 -4.85 33.16 5 33.58 3 8.10 3.33 -2.25 -4.21 -10.46 6.34 13 6.69 12 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% s 1 s 1 s1 s 1 s 1 203 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 6/30/12 YTD201120102009 15.69 13.29 5.78 3.72 -1.78 14.29 20 14.85 13 24.97 16.67 12.52 5.59 -12.85 6.86 70 8.56 66 30.69 18.42 13.91 3.68 -23.52 31.62 4 29.12 7 38.04 -3.23 -28.19 -31.21 -45.86 24.68 14 29.20 11 -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% s 1 s 1 s 1 s 1 204 City of Clearwater Risk Measure Summary Security Capital Quarterly Periods Ending 6/30/12 Risk Measures 1 Year PortfolioBench 3 Years PortfolioBench 5 Years PortfolioBench Inception PortfolioBench Negative Periods Positive Periods Up Market Capture Down Market Capture Batting Average Worst Quarter Best Quarter Worst 4 Quarters Best 4 Quarters Standard Deviation Beta Alpha R-Squared Sharpe Ratio Treynor Ratio Tracking Error Information Ratio 1 3 0.96 1.03 0.00 -15.51 14.90 10.95 10.95 1 3 -15.08 15.40 12.56 12.56 2 10 0.97 0.94 0.25 -15.51 33.55 0.35 58.46 23.03 0.95 0.25 1.00 1.43 34.66 2.01 -0.27 2 10 -15.08 35.93 1.76 56.07 24.14 1.39 4 12 0.98 0.99 0.31 -37.93 33.98 -45.85 118.01 39.86 0.99 -0.08 0.99 0.15 6.04 2.94 -0.15 4 12 -40.40 35.93 -45.65 115.40 39.96 0.16 205 City of Clearwater Multi Employer Property Trust as of 6/30/12 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 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 2.07 2.58 24,048 0 497 24,545 3.72 5.47 23,665 0 881 24,545 9.80 12.43 22,355 0 2,190 24,545 12.41 15.38 0 20,000 4,545 24,545 Portfolio Performance (%) 206 City of Clearwater Multi Employer Property Trust as of 6/30/12 Cash & Equiv $2 0.01% Real Estate $24,543 99.99% Periods from 9/10 to 6/12 Alpha Beta R-Squared N/A N/A N/A Annualized Return% 0.00.20.40.60.81.01.21.41.61.82.02.2 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 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 12.41 15.38 0.10 2.05 1.86 0.04 6.02 8.22 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 207 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 6/12 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 Last 2 Qtrs Last 3 Qtrs Last 4 Qtrs 6.07 3.55 2.30 1.30 -1.25 2.07 59 2.58 41 15.69 13.29 5.78 3.72 -1.78 3.72 75 5.47 54 32.85 22.33 9.21 6.31 -4.54 6.31 75 8.61 54 20.67 13.17 11.08 3.53 -8.69 9.80 58 12.43 36 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% M O M O M O M O 208 City of Clearwater Calendar Year Performance Comparison Total Returns of Real Estate Portfolios Years Ending December High 1st Qt Median 3rd Qt Low M Multi Employer Property Trust Net Ret Rank O NCREIF ODCE Fund Index Net Ret Rank 6/30/12 YTD2011 15.69 13.29 5.78 3.72 -1.78 3.72 75 5.47 54 24.97 16.67 12.52 5.59 -12.85 12.99 46 15.99 26 -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% M O M O 209 City of Clearwater Molpus Woodlands Group as of 6/30/12 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/11 Molpus Woodlands GroupNCREIF Timberland Index Net of Fee Returns Qtr YTD 1 Year 3 Year 5 Year 10 Year Incept 6/30/11 Molpus Woodlands Group NCREIF Timberland Index Asset Growth ($000) Beginning Market Value Net Contributions & Withdrawals Gain/Loss + Income Ending Market Value 0.00 0.61 2,864 3,696 0 6,560 -0.37 0.97 2,874 3,696 -11 6,560 -2.39 1.13 111 6,504 -56 6,560 -2.39 1.13 111 6,504 -56 6,560 Portfolio Performance (%) 210 City of Clearwater Molpus Woodlands Group as of 6/30/12 Real Estate $6,560 100.00% Periods from 6/11 to 6/12 Alpha Beta R-Squared N/A N/A N/A Annualized Return% 0.00.20.40.60.81.01.21.41.6 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 M 1 T Annualized Standard Deviation% M Molpus Woodlands Group 1 NCREIF Timberland Index T 91-Day Treasury Bill Annualized Net Ret Std. Dev. Sharpe Ratio Info Ratio -2.39 1.13 0.05 1.46 0.92 0.03 -1.68 1.17 0.00 Asset Allocation ($000) Risk/Return Analysis (Number of returns < 12) 211 City of Clearwater Cumulative Performance Comparison Total Returns of Real Estate Portfolios Periods Ending 6/12 High 1st Qt Median 3rd Qt Low M Molpus Woodlands Group Net Ret Rank 1 NCREIF Timberland Index Net Ret Rank Last Qtr Last 2 Qtrs Last 3 Qtrs Last 4 Qtrs 6.07 3.55 2.30 1.30 -1.25 0.00 89 0.61 83 15.69 13.29 5.78 3.72 -1.78 -0.37 93 0.97 88 32.85 22.33 9.21 6.31 -4.54 -1.71 92 1.49 88 20.67 13.17 11.08 3.53 -8.69 -2.39 91 1.13 83 -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% M 1 M 1 M 1 M 1 212 City of Clearwater Calendar Year Performance Comparison Total Returns of Real Estate Portfolios Years Ending December High 1st Qt Median 3rd Qt Low M Molpus Woodlands Group Net Ret Rank 1 NCREIF Timberland Index Net Ret Rank 6/30/12 YTD 15.69 13.29 5.78 3.72 -1.78 -0.37 93 0.97 88 -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% M 1 213 214 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 215 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 216 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 217 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 218 This material is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Any opinions expressed are our current opinions only. Assumptions, opinions and estimates constitute CapTrust's judgment as of the date of this material and are subject to change without notice. While the information contained herein is from sources believed reliable, we do not represent that it is accurate or complete and it should not be relied upon as such. CapTrust accepts no liability for loss arising from the use of this material. Performance Comparison Page Information: Shaded Areas represent where the investment objective was achieved either by: 1)The investment return vs the index; 2)The investment return universe ranking (the lower the number the better the ranking) Manager performance begins on the last day of the inception month. Any investment results depicted represent historical net performance. Past performance is no guarantee of future performance. City of Clearwater Employees Pension Fund Appendix Disclaimer Page 219