Investment Lifecycle and Strategies

WHERE WE DIFFER AT HAYDEN, WE AIM TO INVEST WITH A DECADE-LONG INVESTMENT VIEW. • Over this time period, sales and earnings power growth drive ~90% of equity returns (i.e. fundamental business performance). • It's not worth our time looking for "catalysts" to get multiple expansion, or understand why other investors will pay a higher multiple for the company in the future. WE GET A HIGHER RETURN ON TIME BY UNDERSTANDING THE UNDERLYING RETURNS / UNIT ECONOMICS OF PROJECTS THE COMPANIES ARE INVESTING IN, AND BUYING THESE BUSINESSES AT A GOOD-TO-FAIR PRICE. • If we can understand the drivers of the high incremental ROICs, this is what will drive higher earnings power, and therefore intrinsic value growth in the future. Long-Term Sales & Earnings Power Drive Returns From Morgan Stanley Research Topline Growth the Long-Run Driver of Stock Performance Sales Growth Is the Key Driver of Long-Term Stock Performance Sources of Total Shareholder Return for Top-Quartile Performers S&P 500 (1990 - 2009) 100% 90% 29% 80% 50% 70% 58% 13% 74% Sales 60% and 50% Profit 40% 20% 46% 30% 20% 20% 19% 15% 15% 10% 5% 12% 11% 7% 6% 0% 1 Year 3 Years 5 Years 10 Years Free cash flow Multiple Margin Revenue Growth Source: BCG Analysis, Morgan Stanley Research HAYDEN CAPITAL 12

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