28 Feb 2013 Meridian Value Fund - Q4 2012 Commentary
We continue to seek out-of-favor companies, typically having experienced an extended period of declining earnings. In recent years, most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We are gradually shifting the portfolio to more of these investments and believe that this should bode well for a return to the Fund’s historically strong performance levels. The Fund is invested in 56 positions, representing 34 industry groups along with Treasury Bills. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Air Products, Arthur J. Gallagher, Corning, Cree, Energen, Linear Technology and Xylem. We sold our positions in Apache, Heartland Payment Systems, KBW and Wells Fargo.

Flowserve is a leading manufacturer of pumps, valves and seals found in a variety of end- markets such as oil & gas, power generation and chemicals. The company holds leading market positions across various geographies, product segments and end-markets. It is also ahead of the competition with aftermarket service centers located throughout the world, providing it with deeper customer relationships and steadier demand for higher margin replacement and repair business. Flowserve’s late cycle markets have bottomed and pricing on new projects is beginning to improve as excess capacity gets absorbed. Additionally, the company should, in our opinion, benefit from the build-out of emerging market infrastructure and domestic opportunities such as new chemical plants and pipeline expansions brought on by abundant natural gas. Flowserve maintains modest financial leverage and generates returns on equity of 20%. We believe the company is attractively valued at 12x our $13 per share estimate of potential earnings power.

29 Nov 2012 Meridian Value - Q3 2012 Commentary
We continue to seek out-of-favor companies, typically having experienced an extended period of declining earnings. In recent years, most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We are gradually shifting the portfolio to more of these investments and believe that this should bode well for a return to the Fund’s historically strong performance levels. The Fund is invested in 53 positions, representing 34 industry groups along with Treasury Bills. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Aeropostale, Flowers Foods, Gildan Activewear, Koninklijke Phillips, and Verint Systems. We sold our positions in Cummins, CVB Financial Group, Host Hotels & Resorts, Lincoln Electric and TD Ameritrade. One of our newest holdings, Matson, is the result of a spin-off from our holding of Alexander & Baldwin, Inc.

GATX Corporation is one of our largest holdings. The company specializes in owning and leasing long lived, widely used transportation assets that have a valuable service component. The majority of GATX’s business is in the railcar leasing market, particularly tank cars used to transport chemicals, petroleum or food and agriculture products. The company suffered declining earnings due to the weak macroeconomic environment as long term leases signed during better times expired and were renewed at lower rates during the recent downturn and early stages of the current recovery. Earnings growth turned positive as under-production of tank cars during the economic downturn, coupled with improved demand for railcars as the economy stabilized, resulted in favorable supply and demand conditions. Demand is now augmented by secular growth in domestic production of oil and chemicals, with the latter driven by expectations for increased domestic production of low priced natural gas. GATX is well managed, in our opinion, and trades at a reasonable valuation based on normalized earnings per share, which we believe could exceed $3.50 per share if current trends persist. In addition the shares have an attractive 2.8% dividend yield.

05 Sep 2012 Meridian Value - Q2 2012 Commentary
Our investment strategy remains unchanged. We continue to seek out-of-favor companies typically having experienced an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. The Fund is invested in 52 positions, representing 34 industry groups along with Treasury Bills. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Brocade Communications, Haemonetics Corp, Lancaster Colony Corp. and Maidenform Brands.

Equifax, one of the Fund’s largest holdings, is a leading provider of information solutions that help financial institutions and other entities make decisions about extending credit. It holds the number one market share position in the majority of its geographic regions, generates strong margins and cash flow and maintains conservative financial leverage. The recession caused both borrowers and lenders to retrench, bringing down the earnings of Equifax as well. Consumer borrowing is improving in areas such as credit cards, auto loans and home mortgages. We believe that Equifax is particularly well positioned for this improvement beyond its core consumer credit database. It is up-selling exclusive data such as wealth and income data to help customers make more informed credit decisions. Additional growth opportunities are international expansion, commercial credit decision making and personal credit score monitoring. We believe the company is a compelling value at twelve times our four dollar per share estimate of earnings power.

23 May 2012 Meridian Fund - Q1 2012 Commentary
We at the Meridian Funds mourn the untimely passing of our founder, Richard F. Aster, Jr.

Rick led Aster Investment Management Company, the Funds’ investment advisor, for thirty five years. His enduring legacies are building a portfolio management team and the creation and refinement of two very different investment strategies that have successfully stood the test of time. Meridian Growth Fund and Meridian Value Fund have both produced enviable returns for their shareholders, and enjoyed many accolades over their long histories. Rick also developed the techniques employed in the Meridian Equity Income Fund, which we hope will further honor Rick’s legacy of creativity and intellectual flexibility.

Several investment professionals worked alongside Rick for most of the last two decades, implementing and further refining Rick’s early work. These team members enhanced many of the processes and disciplines employed in the execution of these strategies. The Meridian investment research team remains faithful to the founding tenets and investment process for each fund, while continuously striving for further refinements. To assure continuity and quality in our research effort, the team has recently been augmented.

Kevin O’Boyle has returned to Meridian in the position of Director of Investment Research. Kevin brings over 15 years of professional investment experience, with the majority of that experience gained at the Meridian Funds. He was the Lead Manager of the Meridian Value Fund during its formative years, during which time the Fund received awards and recognition for achieving superior performance from Lipper and Money Magazine. Subsequent to his tenure at Meridian, Kevin successfully launched the no-load Presidio Fund.

William Tao, Larry Cordisco, and Jamie England now serve as Co-Managers of the Meridian Growth Fund, with William and Larry shouldering most of the day-to-day research responsibilities for the Fund. William Tao worked directly with Rick Aster on the Meridian Growth Fund for most of the past 5 years, and was recognized by Morningstar as 2010 Co-Manager of the Year: Runner-Up along with Rick. Larry Cordisco recently rejoined Meridian. Larry brings over 10 years of professional investment experience, with most of that experience gained as a valued team member on the Meridian Value Fund.

In addition to his role as Co-Manager of Meridian Growth Fund, Jamie England retains primary day-to-day responsibility for management of the Meridian Value Fund. Jamie England has over 15 years of investment industry experience and has been with Meridian for more than 10 years. He worked with Kevin O’Boyle on the Meridian Value Fund for more than two years before becoming Assistant Portfolio Manager of the fund in 2006.

Finally, Jim O’Connor is now Co-Manager of the Meridian Equity Income with Jamie England. Jim had previously assisted Rick Aster on the Equity Income Fund. Jim is also a Co-Manager on the Meridian Value Fund with Jamie England and has worked on the Value Fund since January 2004.

While the loss of such a renowned investor as Rick Aster cannot be diminished, we believe that the current Meridian investment research team maintains continuity in the Funds’ management.

Our investment strategy remains unchanged. We continue to seek out-of-favor companies typically having experienced an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company- specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We seek to gradually shift the portfolio to more of these investments and expect that this should bode well for a return to the Fund’s historically strong performance levels. We hold 51 positions, representing 32 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Associated Banc-Corp and KBW, Inc.

02 Mar 2012 Meridian - 2011 Annual Letter
The broader stock market indices posted strong fourth quarter results but ended 2011 relatively flat. The S&P 500 index finished essentially unchanged for the year, the NASDAQ down 1.8% and the Russell 2000, which includes smaller companies, dropped 5.5%. Concerns over Europe, U.S. growth and government debt levels were mainly offset by continued corporate earnings growth and low interest rates. The year’s best performing sectors included consumer nondurables, health care and utility stocks. Basic material, financial and industrial companies were among the worst performing groups. The yield on the ten-year Treasury bond declined significantly from 3.30% to 1.87% during 2011. This drop, in our opinion, was due to sluggish economic growth and a flight to safety by investors.

We begin 2012 with the economy growing at a modest pace, historically low interest rates and moderate inflation. GDP grew at a revised 1.8% during the third quarter and is expected to have accelerated somewhat during the quarter just ended. Manufacturing and consumer spending are growing, while construction and employment have recently improved from depressed levels. There remains, however, considerable uncertainty. The viability of the European Union in its current form is questionable and a number of the members will likely experience negative growth in 2012. The U.S. Government, it appears, will not deal with long term deficit reduction, entitlement reform, tax policy, health care or other measures to promote economic growth until 2013, if then. We believe the economy will continue to expand this year, but at a subpar pace compared to other recoveries since World War II.
Long-term investment results, history clearly shows, are improved by buying good companies or mutual funds consistently over an extended period of time. We welcome those new shareholders who joined the Meridian Funds during the quarter and appreciate the continued confidence of our existing shareholders.

Our investment strategy remains unchanged. We continue to seek out-of-favor companies typically having experienced an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company- specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We seek to gradually shift the portfolio to more of these investments and expect that this should bode well for a return to the Fund’s historically strong performance levels. We hold 50 positions, representing 33 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Lennox International. We sold our positions in Heartland Express, Kohl’s and Sealed Air.

Hawaiian Electric Industries, Inc., one of our larger holdings, is the dominant electric utility in Hawaii. The company also owns American Savings Bank, the second largest bank in Hawaii, which contributes roughly one third of earnings. Earnings declined as years of strong economic growth in Hawaii spurred high demand for electricity that outstripped the company’s infrastructure, leading to elevated operating and maintenance costs. Bank earnings declined during the financial crisis, although conservative management cushioned the blow significantly compared to most banks. Earnings growth has resumed as rate increases now cover some of the increased utility operating costs. Further relief should come in 2012 and beyond due to an improved rate adjustment mechanism that encourages conservation and as new generating capacity comes online and earns double-digit returns on investment. The bank is also showing improved performance as the resilient Hawaiian economy outperforms the mainland. We expect earnings to grow from estimates of $1.43 per share in 2011 to $2.35 per share or more over the next 3 to 5 years. We believe the stock is a compelling value at less than 11 times normalized earnings and with a current dividend yield close to 5%.

07 Nov 2011 Meridian Funds - Q3 2011 Commentary
Our investment strategy remains unchanged. We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We are gradually shifting the portfolio to more of these investments and expect that this should bode well for a return to the Fund’s historically strong performance levels. We hold 53 positions, representing 34 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Denny’s Corp. We sold our positions in Curtis-Wright Corp. and Nalco Holding Co.

LKQ Corporation is one of our largest holdings. The company is the leader in the alternative auto parts market. This market consists of recycled auto parts that have been salvaged from wrecks and aftermarket parts that are produced as private label alternatives to original manufactured parts. These parts are sold to mechanics and body shops at a 20 - 50% discount to dealer prices. Barriers to entry are high as it is unlikely that any company will replicate LKQ’s network of over 400 dismantling and distribution facilities. Earnings declined with lower auto repair volumes because of a decline in miles driven first due to high gas prices then by the economic downturn, combined with a steep decline in the price of scrap metal which is a by-product of the parts recycling process. Earnings growth resumed late in 2009 and continues to grow, driven by increased penetration of alternative parts as insurance companies and consumers seek to save money, along with market share gains against smaller competitors and through accretive acquisitions. We believe LKQ can perform well in challenging economic conditions and the valuation is reasonable on normalized earnings which we estimate could exceed $2.50 per share in the next 3 to 5 years.

26 Aug 2011 Meridian Value Fund - Q2 2011 Commentary
We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. Over the past two years most earnings problems were related to poor economic conditions. During this period we invested in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. Many of these investments lagged the market during the strong rally off the 2009 market lows and continued to underperform in 2010 as the market favored smaller, higher growth companies. With some stability in the economy, we now see more companies that fit our strategy for company-specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We are gradually shifting the portfolio to more of these investments and expect that this should bode well for a return to the Fund’s historically strong performance levels. We hold 55 positions, representing 34 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of GATX, Hospira, Huron Consulting Group, ICON and International Speedway. We sold our positions in Forest Oil, Gen-Probe, Northern Trust and NVIDIA.

Costco, a current holding, is the leading warehouse club in the United States with additional locations in Canada, Mexico, the UK and parts of Asia. In an environment of sluggish consumer and small business spending, Costco’s ultra-low prices should drive traffic gains versus retail peers. Membership fees, which constitute the majority of the company’s profits, continue to grow through adding new members, up-selling higher fee memberships and periodic fee increases. Additionally, Costco is expanding its units at a measured pace with greater opportunities abroad. The company has an excellent balance sheet and trades at a reasonable valuation, taking into consideration it’s over $11 in net cash per share, quality of management, leading competitive position and future growth.

11 May 2011 Meridian Value Fund - Q1 2011 Commentary
Our investment strategy remains unchanged. We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. Over the past two years most earnings problems were related to poor economic conditions. During this period we invested in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. Many of these investments lagged the market during the strong rally off the 2009 market lows and continued to underperform in 2010 as the market favored smaller, higher growth companies. With some stability in the economy, we now see more companies that fit our strategy for traditional company-specific reasons. This is historically the strength of the Meridian Value Fund and should bode well for future performance. We hold 53 positions, representing 31 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Aecon Group, General Cable, Bally Technologies, Cintas, EOG Resources, Flowserve, Heartland Payment Systems and Mobile Mini. We sold our positions in Arkansas Best, Acxiom, Franklin Resources, Cameco and The Travelers Companies.

We recently invested in EOG Resources, a leading North American oil and natural gas company with an attractive portfolio of diversified land-based properties. EOG suffered down earnings due to the commodity price declines in 2009. These weak earnings were prolonged and exacerbated by a large bet on natural gas that left the company particularly vulnerable to continued weak gas prices, which have dramatically lagged the price of oil due to large increases in domestic gas supply. The company has embarked on an aggressive transformation by re-allocating investment capital from natural gas to oil producing properties. Oil and liquids should reach 69% of production in 2012, up from 41% in 2009. This shift should drive strong earnings improvement barring a significant decline in energy prices from current levels. EOG has a solid balance sheet and has historically been viewed as a conservative, well managed company and as such is a good fit for our traditional strategy of investing in good companies suffering temporary problems.

01 Mar 2011 Meridian Value Fund - Q4 2010 Commentary
The Fund’s total return and average compounded annual rate of return since June 30, 1995, were 710.4% and 14.5%, respectively. The comparable period returns for the S&P 500 with dividends were 204.0% and 7.4%, respectively.

Our investment strategy remains unchanged. We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. Over the past two years most earnings problems were related to poor economic conditions. During this period we invested in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. Many of these investments lagged the market during the strong rally off the 2009 market lows, and continued to underperform in 2010 as the market favored smaller, higher growth companies. With some stability in the economy, we now see more companies that fit our strategy for traditional company-specific reasons. This is historically the strength of the Meridian Value Fund and should bode well for future performance. We hold 51 positions, representing 31 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Arkansas Best Corporation, Alexander & Baldwin and Orbital Sciences. We sold our shares in Fidelity National Financial, Hologic and JP Morgan Chase.

Carnival Corporation is the world’s leading cruise line with over 90 ships operating worldwide under brands such as Carnival, Holland America, Princess, Cunard and several others. Earnings declined in 2009 as macro conditions impacted discretionary spending. Consumers cut back on vacation spending while cruise operators received previously ordered ships that increased supply in the face of falling demand. Earnings have since begun to rebound and the outlook for Carnival and the industry is bright. Cruise vacations are well suited for the current economic environment as they offer an excellent value proposition to customers at 20-30% the cost of land-based vacations. During the financial crisis cruise operators cut back on new ship orders, resulting in the lowest supply growth outlook that the industry has seen in several years. Cruising is also relatively under-penetrated compared to other vacations, leaving more room for growth. We believe that Carnival can reach normalized earnings of over $4 per share in the next 3 to 5 years, up from $2.47 in 2010. At $47 the stock trades at a reasonable multiple of less than 12 times this earnings level. With fewer new ships coming on line over the next few years Carnival should also see significantly improved free cash flow. The company has indicated that it is likely to use this cash to increase its dividend payout which could offer further upside to investor returns.

15 Nov 2010 Meridian - Q3 2010 Commentary
Broadridge Financial Solutions, one of our largest positions, is a leading provider of technology solutions to the financial services industry, with a wide range of products including investor communications, transaction processing and operations outsourcing. The company was spun off by ADP in 2007 and suffered declining earnings in 2008 and early 2009 due to debt associated with the spin-off and some client losses during the financial crisis. Broadridge is well positioned to grow earnings going forward as its business benefits from two powerful secular trends in the financial industry. Broadridge enables its customers to increase electronic communications to their clients at a considerable cost savings vs. paper communication, and its products also help customers handle increasing regulation. The balance sheet is now strong and the company’s largely recurring business model generates significant free cash flow. Valuation is reasonable at 13.8 times estimated earnings for the current fiscal year and there is a 2.7% dividend yield.

Over the past 18 months most earnings problems have been related to poor economic conditions. During this period we were able to invest in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. In normal economic conditions such companies rarely fall out of favor. While some of these investments lagged the market during the strong rally off last year’s market lows, we believe that with this core of high quality companies the Fund is positioned for positive returns during the next several years.

30 Aug 2010 Meridian - Q2 2010 Commentary
The economy is growing, but at a disappointing pace, especially for the early stages of an economic recovery. The recent news on housing, consumer confidence and job creation has been disappointing. Interest rates remain low and inflation does not appear to be an issue at this time. Deflation, in fact, appears to be more of an immediate concern. Europe has hit the wall on borrowing to finance government programs and has announced austerity measures, including spending reductions and tax increases. The United States has potentially large tax increases on the horizon and, in our opinion, will soon be forced to cut spending also. Many states face the same issues. We believe the only solution is a strong private sector that innovates, invests and creates jobs. This, unfortunately, has not been a priority of the Obama Administration and Congress. Our outlook is for a period of slow growth, large deficits, high levels of unemployment, low interest rates and moderate inflation.

13 May 2010 Meridian Funds - Q1 2010 Commentary
Our investment strategy remains unchanged. We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. Over the past year most of the earnings problems were economic-related and we were able to invest in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. In normal economic conditions such companies rarely fall out of favor. While some of these investments lagged the market during the strong rally off the March lows, we believe that this core of high quality companies positions the Fund for positive returns during the next several years. In addition, with some stability in the economy, we now see more companies that fit our strategy for traditional company-specific reasons. This is historically the strength of the Meridian Value Fund and should bode well for future performance.

During the quarter we purchased shares of Acxiom, Equifax and Northern Trust. We sold our shares in Best Buy and Redwood Trust.

27 Feb 2010 Meridian Funds Q4 2009 Commentary
Our investment strategy remains unchanged. We continue to seek out-of-favor companies exemplified by an extended period of declining earnings. Over the past year most of the earnings problems were economic-related and we were able to invest in many high quality companies at attractive valuations. These are companies, in most cases, with leading and defensible market positions, high returns on invested capital, strong balance sheets and proven management teams. In normal economic conditions such companies rarely fall out of favor. While some of these investments lagged the market during the strong rally off the March lows, we believe that this core of high quality companies positions the Fund for positive returns during the next several years. In addition, with some stability in the economy, we are beginning to see more companies that fit our strategy for traditional company-specific reasons. This is historically the strength of the Meridian Value Fund and should bode well for future performance. We hold 54 positions, representing 30 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are retail, technology and healthcare products.

During the quarter we purchased shares of CVB Financial, Echelon, LKQ and Nalco. We sold our positions in Boston Scientific, Diebold, Exterran, Franklin Electric, Itron and KBR.

26 Oct 2009 Meridian Funds - Q3 2009 Commentary
Gross Domestic Product declined 0.7% in the second quarter, an improvement over previous periods. The economy has stabilized and is showing modest signs of growth in most areas. Housing prices, consumer spending, industrial production and construction spending have improved in recent months. Monetary and fiscal policy remain expansionary, interest rates remain low and inflation is not an issue at this point. We expect the economy to show modest growth for the balance of 2009 and through 2010. It’s questionable, however, whether growth will be sufficient to reduce the rate of unemployment or make a dent in the swelling deficit. We need policies that encourage business to invest, hire workers and remain competitive in world markets. Tax hikes and deficit-increasing entitlement programs are not the medicine for an economy approaching 10% unemployment.

Long-term investment results, history clearly shows, are improved by buying good companies or mutual funds or adding to existing positions during difficult stock market environments. We welcome those new shareholders who joined the Meridian Funds during the quarter and appreciate the continued confidence of our existing shareholders.

02 Mar 2009 Meridian Value Fund - Q4 2008 Report
Our investment strategy remains unchanged. We continue to seek out-of-favor companies that we believe have defensible positions in their industries, strong or improving balance sheets, reasonable valuations and good prospects for earnings growth. Due to the market drop and weak economy the number of candidates meeting our investment requirements has increased significantly. It is our position that over the long term this strategy will produce returns that outperform the Fund’s benchmark. We believe the portfolio is well positioned, reasonably valued and diversified. We hold 52 positions, representing 26 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are healthcare products, technology and industrial products. The outlook for our approach, in our view, is favorable at this time.

During the quarter we purchased shares of Commercial Metals Company, Diebold, JP Morgan Chase, Kohl’s, VeriSign and Wells Fargo.

Abbott Laboratories, one of our holdings, is a diversified healthcare company occupying leadership positions in pharmaceuticals, nutritional products, diagnostics and vascular products. Earnings growth stalled in 2006 due to the conclusion of a co-promotion sales agreement and two smaller drugs going generic. Earnings growth resumed in 2007 due to robust growth of Humira; Abbott’s drug for use in arthritis and psoriasis. The successful US launch of Xience V, Abbott’s drug eluting stent, also accelerated earnings growth. Abbott is well positioned with a solid drug pipeline, limited patent expirations and steady growth across its healthcare portfolio. We expect earnings to reach $4.60 per share in the next three years up from $3.32 in 2008. At 11 times normalized earnings and a dividend yield near 3%, we believe the stock is a compelling value, and has defensive characteristics that are attractive in the current economic environment.