11. Presentation by MFS Investment Management (Large …retirement.ladwp.com/AgendaItems/Agenda - 20110413 Agenda item 11… · Presentation by MFS Investment Management (Large Value)

11. Presentation by MFS Investment Management (Large Value) - Annual Performance Review as of December 31,2010

11

MFS® Large Cap Value EquityFirst Quarter 2009

Presented to

Prospect Name

22191.1FOR INSTITUTIONAL USE ONLYMFS Institutional Advisors, Inc.

First Quarter 2009

MFS® Large Cap Value Equity

Presented to

Los Angeles Department of Water and Power

MFS® Large Cap Value Equity

13 April 2011

MFS® Large Cap Value Equity299-I-C-LCV-28FEB11.2

Presenters

Katrina (Kate) Mead, CFA - Investment Officer- Institutional Equity Portfolio Manager- As an Institutional Portfolio Manager, participates in the research process and strategy discussions.

Assesses portfolio risk, customizes portfolios to client objectives and guidelines, and manages dailycash flows. Communicates investment policy, strategy, and positioning.

- Joined MFS in 1997; positions include Equity Research Analyst.- Previous experience includes 2 years as Financial Analyst - Real Estate Advisory Services at

Coopers & Lybrand, Financial Advisory Services.- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- University of Pennsylvania, MBA- Villanova University, BS, magna cum laude

Carolyn M. Lucey, CIMA - Director, Relationship Management- As a Relationship Manager, responsible for the overall client experience including communicating

portfolio positioning, strategy, and performance attribution and ensuring that our clients’ ongoing serviceneeds are met.

- Joined MFS in 1998; positions include Investment Director for Private Portfolio Services; Vice President,Director of Product Management; Assistant Vice President, Domestic Equity Product Manager.

- Previous experience includes 1 year as Product Manager at Van Kampen American Capital; 6 years asProduct Manager at John Hancock Funds; 2 years as Associate at Putnam Investments.

- Affiliations include Investment Management Consultants Association (IMCA).- Manhattanville College, BA

Corporate overview

Heritage• Founded in 1924• Majority owned by Sun Life Financial, Inc. since 1982• Up to 22% employee ownership available

Global presence and research depth

• Manage $220 billion in assets for clients in 75 countries• 193 equity and fixed income investment professionals• Collaborative, research-intensive investment approach

Product integrity• Capacity management• Emphasis on quality• Risk management

As of 31-Dec-10.

19139.2

1MFS® Large Cap Value Equity299-I-C-LCV-28FEB11.1


As of 31-Dec-10.1 Represents global clients in institutional vehicles only.

Business profile$220 billion total MFS AUM

Clients

Regions

Diversified client and asset base

Assets

US equity $78 billion

Non-US equity $91 billion

Fixed income $51 billion

Institutional business by client type and region1

Client types

• Defined benefit/defined contribution

• Endowment and foundation

• Sovereign wealth fund/government agency

• Institutional platform/insurance subadvisory

19139.2

Institutionalinvestors (50%)

Retailinvestors (50%)

North America (34%)

Europe (22%)

Middle East/Asia (16%)

Australia/New Zealand (16%)

Japan (12%)


MFS investment professionals

As of 31-Dec-10.Years = average years industry experience.

1 Member of Investment Management Committee.

TOTAL193

Betsy Palmer, Global Product Management and Marketing7 professionals – 18 years

31 equity portfolio managers

18 years

President, Chief Investment Officer, and Director of Global Research – Michael Roberge1

Vice Chairman – David Antonelli1Director of Fixed Income – Donald Mykrantz1

20 fixed income analysts 17 years

52 equity analysts 12 years

11 quantitative analysts 12 years

16 fixed income portfolio managers

22 years

3 quantitative portfolio managers

18 years

Portfolio management(50)

Research team(83)

Trading(25)

Product management (7)

Gregory Heller, Director of Fixed Income Trading Paul Skinner, Director of Global Equity Trading13 equity traders – 17 years

12 fixed income traders – 16 years

Chairman and Chief Executive OfficerRobert Manning1

5 fixed income associates 7 years

13 equity associates 4 years

10 quantitative associates 11 years

Research associates(28)

19139.2


MFS equity investment professionals

19140.3

Robert JohnsonTucker JonesSamir ParikhMarc Pascal

Alfred SabloneMichael SpallaJeffrey StarrickEric Trach

Jennifer BlanchetteJeffrey EstellaBrenda FarleyMichael Flint

President, Chief Investment Officer, and Director of Global Research – Michael RobergeVice Chairman – David Antonelli

Paul Skinner, Director of Global Equity TradingJeffrey Estella, Director Brenda Farley, Director

Fundamental Research

Equity Trading

Anne-Christine FarstadBetsy GeorgePaul GordonSimon GreshamWard Griffiths Michael GrossmanEllen HazenKate JacksonManish KaulSalman KhanYuko KikuchiTakeyuki KoraGavin Ma

Dennis AllaireMatthew BarrettFilipe BenzinhoEric Braz Jeffrey ChoMaile ClarkKevin ConnThomas Crowley Claud DavisDavid DeGroffTimothy Dittmer Reinier DobbelmannKevin Dwan

Bradford Mak Edward MaloneyPablo de la MataRyan McAllister Stuart McPherson Sandeep MehtaAyako Mikami Brett MirlianiJonathan MunkoRaj NairVipin NarulaJames NealeTeresa Occhiolini

Portfolio Managers AnalystsNoah RumpfJohn StocksBhushan Vartak

James FallonElena GoncharovaSam Haidar

Matthew KrummellJeffrey MorrisonJonathan Sage

Joseph Flaherty, Director

Quantitative Research

Alison O’NeillMarco QuizaJeffrey RusselMatthew SabelKevin SchmitzMatthew ScholderJames SchusterKiran SebastianDavid ShindlerJoseph SkorskiFlorence TajJohn TsaiScott Walker

Betsy Palmer, Director

Institutional ProductManagement

Portfolio Management

Michael AdamsRichard ChiuAnn Marie CostelloPeter LonctoNicole NeubeltAbel Rebelo

Traders

VALUENevin ChitkaraSteven Gorham Camille Humphries LeeKatrina MeadMaura ShaughnessyBenjamin StoneBrooks TaylorBarnaby Wiener

COREKevin BeattyMichael CantaraBrett FleishmanGabrielle GourgeyChristopher JenningsBen KottlerDaniel LingJoseph MacDougallDavid MannheimRoger MorleySanjay NatarajanMarcus Smith Nicole Zatlyn

GROWTHRobert AlmeidaDavid AntonelliAndrew BoydJeffrey ConstantinoEric FischmanPeter FruzzettiJose Luis GarciaRobert LauThomas MelendezThomas Wetherald

As of 18-Feb-11.

Nevin ChitkaraPortfolio Manager

18 years industry experience

Steven Gorham, CFAPortfolio Manager


Katrina Mead, CFAInstitutional Portfolio Manager


Abel RebeloInstitutional Product

Manager11 years industry

experience

Experienced MFS Large Cap Value Equity team

Jonathan Sage, CFAPortfolio Manager


Brooks TaylorPortfolio Manager


Joseph MacDougall, CFAInstitutional Portfolio


experience

Benjamin StonePortfolioManager


Barnaby WienerPortfolio Manager


Camille Lee, CFAInstitutional Portfolio


experience

Additional resources


5-JAN-11

MFS Large Cap Value Equity team

Nevin P. Chitkara - Investment Officer- Equity Portfolio Manager- As a Value Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 1997; positions include Equity Research Analyst.- Previous experience includes 5 years as Analyst, Acquisition Associate and Manager

at General Electric Company.- Massachusetts Institute of Technology, MBA- Boston University, BS, magna cum laude

Steven R. Gorham, CFA - Investment Officer- Equity Portfolio Manager- Serves on MFS U.S. Equity Management Committee.- As a Value Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 1989; positions include Equity Research Analyst; Marketing Representative;

Teleservices Representative.- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- Boston College, MBA- University of New Hampshire, BS


Katrina (Kate) Mead, CFA - Investment Officer- Institutional Equity Portfolio Manager- As an Institutional Portfolio Manager, participates in the research process and strategy discussions.


- Joined MFS in 1997; positions include Equity Research Analyst.- Previous experience includes 2 years as Financial Analyst - Real Estate Advisory Services at

Coopers & Lybrand, Financial Advisory Services.- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- University of Pennsylvania, MBA- Villanova University, BS, magna cum laude

MFS Large Cap Value Equity team (continued)



Representative MFS institutional client list1Serving over 300 institutional clients globally

Corporate • American Airlines • Bristol-Myers Squibb• Chrysler • Danske Capital• Google• Hewlett Packard• MeadWestvaco Corporation• Mitsubishi Electric Pension Fund• Nestle• Panasonic Pension Fund (Japan)• PepsiCo• Sanyo Electric Corporation• Toyota Motors• U.S. Airways

Non-profit• Archdiocese of New York• California Academy of Sciences• Carleton University• CERN Pension Fund• Children’s Hospital of Pittsburgh• Community Hospital of the Monterey Peninsula• Furman University• National Gallery of Art• North Shore Long Island Jewish Health System• Ochsner Clinic Foundation• Providence College• Texas A&M Foundation• Trinity University• Virginia Tech

Public funds & Taft Hartley• Andra AP-Fonden • County of Los Angeles• Danish Teachers “Laerernes” Pension Fund• Federation of National Public Service Workers

Personnel Mutual Aid Associations, Japan• Government Pension Investment Fund

of Japan• Government Pension Fund of Thailand• London Pensions Fund Authority• LSR (The Pension Fund for State

Employees in Iceland)• Massachusetts Water Resources Authority• Nebraska Investment Council• Oregon and Southwest Washington Painters• Parliamentary Contributory Pension Fund• State of Oregon• UFCW Tri-State Pension

• BNP Paribas Investment Partners• ING Investment Management

• GuideStone Capital Management• NTUC Income Insurance Co-Operative Ltd.

• Russell Investment Group

Sub-advised accounts

1 As of 31-Jan-11. This does not represent a complete list of MFS’ institutional clients. The selection of clients represents a sampling of those who have agreed to the use of their names. It is not known whether the listed clients approve or disapprove of MFS Institutional Advisors Inc. or the advisory service provided. The criteria used to include the above listed clients are a mix of investment style, type of client, and other considerations.


Key contacts

Carolyn Lucey, CIMA Director Relationship Manager

Phone: 617.954.5980 Cell: 978.807.8589 Fax: 617.210.8814

Email: [email protected]

Ryan KellyClient Service Manager

Phone: 617.954.7376Fax: 617.350.2626

Email: [email protected]

Mailing AddressMFS Investment Management 500 Boylston Street, 21st Floor Boston, MA 02116


Disciplined focus on high quality, attractively valued companies to provide compelling long-term risk-adjusted returns

Goals • Outperform the Russell 1000 Value Index with lower volatility over full market cycles• Achieve a competitive ranking in relevant peer universes over full market cycles

PhilosophyThe tenets of our investment philosophy are based upon the following beliefs: • Valuation is one of the most important drivers of stock price performance • Quality is underappreciated by the market

Strategy

We leverage our bottom-up, global research platform to identify undervalued, high quality companies that: • Have sustainable, durable franchises • Generate significant free cash flow • Maintain strong balance sheets • Have strong management teams who are good stewards of capital

Our valuation approach is flexible, but we place a strong emphasis on cash flow and returns-basedmethodologies

We focus on downside risk management at the individual security level


Investment process overview

80 – 100 holdings

Startinguniverse

Russell 1000 companies

+ Global multinational

peers

Attractive valuation • Multiple valuation metrics considered

• Favorable risk/reward

Investableuniverse250 – 350companies

Quality characteristics• Sustainable durable franchise

• Good free cash flow generation

• Solid balance sheet• History of capital stewardship

Portfolioconstruction Idea generation and fundamental research analysis

MFS L

arge

C

ap Value Equity Portfolio


MFS Large Cap Value Equity portfolio

Depth and collaboration of global sector teams provide competitive advantage in research

Tokyo

Sydney

London

Mexico City

Boston

Singapore

Fundamental research Idea generation Analysis and construction

Collaborative research environment

72 fundamental researchanalysts: 28 U.S. equityanalysts and 24 non-U.S.equity analysts; 20 creditanalysts; backed by 18research associates

8 global sector teams organized by region and sectors

Extensive integrationacross geographies andasset classes

50 portfolio managerswith significant industryexperience in value, core,growth, quantitative, andfixed income

Quantitative researchteam: 11 quantitativeanalysts provide proprietaryresearch models,quantitative stock rankings,and scenario testing;backed by 10 quantitativeresearch associates

As of 31-Dec-10.


Consistent focus on high quality and valuation in all market environments

MFS Large Cap Value Equity portfolioFundamental research Idea

generation Analysis and construction

Sustainable, durable franchises• Below average business risk• Robust business model• Consistent returns

High quality companies

Significant free cash flow• Above average returns

on capital• Capital investment discipline

Solid balance sheet• Above average capital

position

History of capital stewardship• Proven track record• Focus on return on incremental

invested capital

Attractively valued securities

Multiple measures of valuation are considered:

• Price/free cash flow• Price/earnings• Price/book• Dividend yield• Price/sales


Fundamental research and focus on downside risk management provide the foundation for buy and sell decisions

MFS Large Cap Value Equity portfolioAnalysis and constructionFundamental researchIdea generation

Buy analysis

• Sustainable, durable franchises• Significant free cash flow• Solid balance sheet• History of capital stewardship• Attractively valued securities

Sell analysis

• Stock becomes expensive• Better alternative available• Breakdown in quality dimensions

Portfolio construction

• Determine position size by conviction, risk andreward, and liquidity

• Manage risk- Security level assessment: operational risk,

financial risk, valuation risk- Portfolio levels have been: Generally, max

position of 5%, or 1.25 times benchmark weight, whichever is greater; 25% industry limit

• Maintain well diversified large-cap value portfolio


1. The Portfolios shall be equity securities of companies doing business in the United States. It is expected that the Portfolios willbe fully invested (<5% cash) at all times. Equity securities shall be restricted to those issues listed on the New York, American,NASDAQ, or other nationally recognized United States stock exchanges.

2. The Board recognizes the Manager is an active manager investing in a universe of securities that resembles the Russell 1000Value Index. The Manager will adjust its Portfolios on an ongoing basis to attempt to outperform the investment results of theRussell 1000 Value Index.

3. The Manager shall not use derivatives within the Portfolios without the expressed written consent of the Plan. If the Managerelects to use derivatives as part of its investment strategy, the Plan requires that the Manager provide written documentation of the rationale for using such instruments. Use of derivatives for speculation is prohibited. Only exchange-traded derivativeswill be utilized.

4. For prudent diversification, no more than 5% of the Portfolios shall be invested in any one issue as of the time of purchase,unless that issue represents more than 5% of the Russell 1000 Value Index. In such cases, the maximum amount allowed is125% of the benchmark weight. At no time shall any specific issue represent more than 10% of the portfolios. In addition, noissue shall be purchased in the Portfolios if more than 10% of the outstanding shares of that company are held by the Managerin the total of all of its accounts.

5. The Manager shall invest in securities specifically authorized in these written guidelines. Unauthorized investments includeforeign securities listed and traded on U.S. exchanges, including American Depository Receipts (ADRs). All foreign securitiesexcept for Benefit Driven Incorporations (BDIs) included in the Russell Indexes are unauthorized. Additional unauthorizedinvestments include short sales, futures, direct investment in raw commodities, and the use of non-approved derivativesecurities (i.e. equity futures and forward contracts), and/or the purchase of securities on margin.

LADWP’s investment guidelines


Style performance (%), 1 year as of 28-Feb-11 Russell 1000 Value sector performance (%) 1 year as of 28-Feb-11

Russell2000

Growth

RussellMidcapGrowth

RussellMidcapValue

Russell2000 Value

Russell1000

Growth

S&P 500 Russell1000 Value

MSCIEAFE

36.333.1

29.3 28.924.9 22.6 22.2 20.0

Ener

gy

Leisu

re

Basic

Mate

rials

Tran

spor

tation

Indus

trial G

oods

& Se

rvice

s

Tech

nolog

y

Utilit

ies &

Comm

unica

tions

Auto

& Ho

using

inanc

ial S

ervic

es

onsu

mer S

taples

Spec

ial P

rodu

cts&

Servi

ces

Retai

ling

Healt

h Car

e

46.2 43.939.4

31.6 29.523.8 23.3

19.616.0 15.9 14.2

8.5 6.4

Market and portfolio overview

Source: benchmark performance from SPAR, FactSet Research Systems, Inc.Past performance is no guarantee of future results.

Portfolio Value (Employees’ Retirement, Disability & Death Benefit Plan)Initial Value as of 18-Feb-04 $243,663,470Contributions +31,868,971Withdrawals 0Change in Market Value +148,641,472Market Value as of 28-Feb-11 $424,173,913Portfolio Value (Retiree Health Benefits Fund)Beginning value as of 15-Sep-09 $42,450,334Contributions +6,678,423Withdrawals 0Change in market value +11,776,334Ending value as of 28-Feb-11 $60,905,091

Portfolio performance (%), net of fees, as of 28-Feb-11

1 Year

19.1 19.0 22.2

Employees' Retirement, Disability and Death Benefit Plan

Retiree Health Benefits Fund

Russell 1000 Value


MFS Large Cap Value strategy has historically outperformed the Russell 1000 Value Index when investors are risk averse (USD)

1Q98

2Q98

3Q98

4Q98

1Q99

2Q99

3Q99

4Q99

1Q00

2Q00

3Q00

4Q00

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3Q01

4Q01

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0

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Perce

nt (%

)

MFS Large Cap Value outperformed Russell 1000 Value Index MFS Large Cap Value underperformed Russell 1000 Value Index

200400600800

100012001400160018002000

Basis

point

s

Yield Premium: Barclays Capital U.S. High-Yield Corporate Bond Index Spread Over U.S. 10 Year Treasuries

Decreasedappetitefor risk

Decreasedappetitefor risk

Heightenedappetite for risk

Heightenedappetitefor risk

Past performance is no guarantee of future results. This exhibit is not designed to assert a direction in performance, but rather highlights the historical relationship between our Large Cap Value strategy and the spread environment given the strategy’sfocus on having less risk than the market. For complete performance results, please see Composite Report in appendix. Sources: Barclays Capital and SPAR, FactSet.

1 Russell 1000 Value Index.2 Periods over 1 year are annualized.

Value Strategy Value Strategy Value Strategy Value StrategyOutperformed1 Underperformed1 Outperformed1 Underperformed1

1Q98 – 3Q02 4Q02 – 2Q07 3Q07 – 1Q09 2Q09 – 4Q10Relative performance2 +6.2% -0.9% +7.7% -4.8%Absolute performance2 +5.6% +18.3% -25.5% +28.8%


Dec2001

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Dec2008

Dec2009

Dec2010

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Perce

nt (%

)

Forward P/E MFS Large Cap Value relative to Russell 1000 Value

3-year average ROE MFS Large Cap Value relative to Russell 1000 Value

Past performance is no guarantee of future results.As of 31-Dec-10.Based on the MFS institutional representative account.Source: MFS research.

The quality of companies owned within the MFS Large Cap Value strategy has increased while their relative valuations have declined


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)

Past performance is no guarantee of future results.Universe is the 1000 largest stocks based on market cap and incorporated in the United States from 12/1974 to 9/2010Quality: Quintiled based on an equal weighted composite score using 3-year average annual Return on Equity (ROE), volatility of ROE (as measured by standard deviation over three years) andleverage (assets/equity, latest annual). Quintile rankings are based on a scale of 1 through 5, with 1 being highest quality rating and 5 being the lowest.Return on Equity is a measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but beforecommon stock dividends) divided by book value, expressed as a percentage.Highest quality stocks defined as those stocks in Quintile 1. As of 30-Sept-2010.Sources: Compustat, FactSet Research Systems, Inc.

Cumulative performance over time of the highest quality stocks vs. the universe


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-0%

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700%

Perc

enta

ge (%

)

Performance of high quality, low P/E companies

Low PE performance

Past performance is no guarantee of future results.Universe is the 1000 largest stocks based on market cap and incorporated in the United States from 12/1974 to 9/2010Quality: Quintiled based on an equal weighted composite score using 3-year average annual Return on Equity (ROE), volatility of ROE (as measured by standard deviation over three years) andleverage (assets/equity, latest annual). Quintile rankings are based on a scale of 1 through 5, with 1 being highest quality rating and 5 being the lowest.Valuation: Quintiled based on Price/ Last Twelve Month Earnings Per Share. Quintile rankings are based on a scale of 1 through 5, with 1 being cheapest valuation and 5 being the most expensive.Return on Equity is a measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but beforecommon stock dividends) divided by book value, expressed as a percentage.Price/earnings ratio (P/E) is the price of a stock divided by its earnings per share.Highest quality stocks defined as those stocks in Quintile 1. Lowest valuation defined as those stocks in Q1 and Q2.As of 30-Sept-2010.Sources: Compustat, FactSet Research Systems, Inc.

Valuation is a significant driver of stock price performance. Owning high quality inexpensively valued companies adds even more value


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)

Past performance is no guarantee of future results.Universe is the 1000 largest stocks based on market cap and incorporated in the United States from 12/1975 to 9/2010Quality: Quintiled based on an equal weighted composite score using 3-year average annual Return on Equity (ROE), volatility of ROE (as measured by standard deviation over three years) andleverage (assets/equity, latest annual). Quintile rankings are based on a scale of 1 through 5, with 1 being highest quality rating and 5 being the lowest.Valuation: Quintiled based on Price/ Last Twelve Month Earnings Per Share. Quintile rankings are based on a scale of 1 through 5, with 1 being cheapest valuation and 5 being the most expensive.Return on Equity is a measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but beforecommon stock dividends) divided by book value, expressed as a percentage.Price/earnings ratio (P/E) is the price of a stock divided by its earnings per share.Highest quality stocks defined as those stocks in Quintile 1. Lowest valuation defined as those stocks in Q1 and Q2.As of 30-Sept-2010.Sources: Compustat, FactSet Research Systems, Inc.

Rolling 20-quarter average return spread of the highest quality stocks with the lowest valuation minus the universe


Compliance with LADWP’s investment guidelinesAs of 28 February 2011

Yes No

All companies doing business in the United States ✔

All issues listed on the New York, American, ✔NASDAQ or other nationally recognized stock exchange

Portfolio is fully invested (<5% cash) ✔

Derivatives Prohibited ✔

No more than 5% in any one issue at purchase ✔unless issue represents more than 5% of the Russell 1000 Value (R1V). If greater than 5% of R1V than maximum 125% of benchmark weight (up to 10%).

No issue purchased if more than 10% of the ✔outstanding shares held by manager

All securities held specifically authorized ✔in the written guidelines


Employees’ Retirement, Disability & Death Benefit PlanPerformance overview

Excess returns (%) vs.Russell 1000 Value -0.4 -3.1 -5.1 1.7 2.5 2.9 2.2 1.9 1.9

YTD 1 Year 2 Years 3 Years 4 Years 5 Years 6 Years 7 Years Inceptionto date

(18-Feb-04)

5.6 6.0

19.1 22.2

33.238.3

1.9 0.2 1.4

-1.9

4.5 1.65.2 3.0

6.5 4.4 6.4 4.3

Portfolio (net)

Russell 1000 Value

Annualized returns (%), as of 28-Feb-11

Annual returns (%) 2010 2009 2008 2007 2006 2005Portfolio (gross) 12.7 20.7 -31.5 10.1 21.7 7.2Portfolio (net) 12.3 20.3 -31.8 9.7 21.3 6.9Russell 1000 Value 15.1 19.7 -36.9 -0.2 22.3 7.1Excess net return -2.8 0.6 5.1 9.9 -1.0 -0.2


Retiree Health Benefits Fund Performance overview

Excess returns (%) vs.Russell 1000 Value -0.4 -3.2 -2.2

YTD 1 Year Inception to date(15-Sep-09)

5.6 6.0

19.022.2

16.518.7

Portfolio (net)

Russell 1000 Value

Annualized returns (%), as of 28-Feb-11

Annual returns (%) 2010Portfolio (gross) 12.6Portfolio (net) 12.3Russell 1000 Value 15.5Excess net return -3.2


MFS® Large Cap Value EquityPeer Universe Rankings as of 31 December 2010

1 Based on monthly returns.2 Based on quarterly returns.3 Relative to the Russell 1000 Value index with net dividends reinvested.4 Rankings are vs. the eVestment Alliance Large Cap Value Equity universe. The number of observations for the Large Cap Value Equity universe: 382 (1 year); 371 (3 years); 353 (5 years);

228 (10 years). Compiled on 26-Jan-11 with 93.4% of firms reporting.5 Russell 1000 Value index with net dividends reinvested.

Please see attached GIPS report for additional performance information.

Product AUM Annualized returns (gross of fees) Tracking error1,3 Information ratio1,3

$ 1 year 3 years 5 years 10 years 3 years 5 years 3 years 5 years

Employees' Retirement,Disability & Death Benefit Plan $401m 12.7% -2.3% 4.5% – 3.9 3.4 0.53 0.96

Retiree Health Benefits Fund $58m 12.6% – – – – – – –

MFS Large Cap Value $34.4bn 12.4% -2.4% 4.3% 4.8% 3.9 3.4 0.51 0.88

MFS Percentile Rank4 – 77 46 22 43 82 82 34 7

Russell 1000 Value Index5 – 15.5% -4.4% 1.3% 3.3% – – – –

Index Percentile Rank5 – 33 78 79 79 – – – –


Performance drivers – sectorsRelative to Russell 1000 Value Index (USD) – one year as of 28 February 2011

Average relative Sector Stock Relative weighting (%) selection (%) + selection (%) = contribution (%)

Contributors Retailing 0.4 0.0 0.4 0.3Autos & Housing 0.9 0.0 0.1 0.1Consumer Staples 3.0 -0.1 0.2 0.1Special Products & Services 0.6 0.0 0.1 0.0Basic Materials 0.5 0.2 -0.2 0.0Utilities & Communications -4.9 0.1 -0.2 0.0

Detractors Technology 2.8 0.1 -0.7 -0.6Industrial Goods & Services 3.6 0.3 -0.8 -0.6Leisure -2.1 -0.4 -0.2 -0.5Health Care 0.2 -0.1 -0.4 -0.5Cash 1.4 -0.4 – -0.4Financial Services -3.8 0.3 -0.7 -0.4Energy -0.7 0.3 -0.5 -0.2Transportation -1.8 -0.2 – -0.2

Total 0.0 -2.8 -2.8

Attribution results are generated by the FactSet application utilizing a methodology which is widely accepted in the investment industry. Results are based upon daily holdings using a buy and holdmethodology to generate individual security returns and do not include expenses. As such, though generally accurate, attribution results are essentially estimates and not guaranteed to aggregate tothe total return of the portfolio or of the benchmark which can be found elsewhere in this presentation.


Average weighting Returns RelativePortfolio (%) Benchmark (%) Portfolio (%)1 Benchmark (%) contribution (%)

Contributors Exxon Mobil 2.2 1.7 35.0 35.0 0.5Berkshire Hathaway – 1.6 – 6.6 0.4Merck & Co Inc 0.5 1.6 -7.9 -7.9 0.4Philip Morris International 3.6 0.2 34.2 39.9 0.4National-Oilwell Varco Inc 0.9 0.3 89.0 84.8 0.3Bank of America Corp. 1.6 2.5 -14.0 -14.0 0.3PPG Industries 1.5 0.2 47.9 47.9 0.3Amgen Inc. – 0.6 – -8.8 0.3Oracle Corp. 2.2 – 34.5 – 0.3Honeywell Inc 1.2 – 48.0 – 0.3

Detractors Abbott Laboratories 2.3 0.1 -8.2 4.7 -0.7Lockheed Martin Corp 4.0 0.1 5.6 4.4 -0.7Medtronic Inc. 1.5 0.1 -5.8 10.4 -0.5Cisco Systems Inc. 0.7 – -23.7 – -0.4Bank of New York Mellon Corp. 2.9 0.5 7.9 7.9 -0.3Conoco Phillips 0.2 1.1 9.3 68.6 -0.3Hewlett Packard 0.8 0.2 -13.5 -9.3 -0.3Comcast Corp – 0.9 – 59.8 -0.3Kellogg Co 1.4 0.0 5.9 4.7 -0.3State Street Corp 1.2 0.3 -0.3 -0.3 -0.2

Performance drivers – stocksRelative to Russell 1000 Value Index (USD) – one year as of 28 February 2011

1 Represents performance for the time period stock was held in portfolio.Attribution results are generated by the FactSet application utilizing a methodology which is widely accepted in the investment industry. Results are based upon daily holdings using a buy and holdmethodology to generate individual security returns and do not include expenses. As such, though generally accurate, attribution results are essentially estimates and not guaranteed to aggregateto the total return of the portfolio or of the benchmark which can be found elsewhere in this presentation.


Period ending 28 February 2011

Employees’ Retirement, Retiree Health RussellCharacteristics Death & Disability Plan Benefits Fund 1000 Value# of holdings 81 81 665Weighted avg mkt cap ($ bn) $87.8 bn $87.2 bn $74.4 bnMedian mkt cap ($ bn) $47.6 bn $47.6 bn $39.5 bnYield 2.2% 2.2% 2.1%P/E (12 month forward) 12.1x 12.1x 12.9xPrice/book 2.0x 2.0x 1.6xPrice/sales 1.4x 1.4x 1.2xPrice/cash flow 9.7x 9.7x 9.1xEPS growth 10.0% 10.1% 9.5%All characteristics are weighted average unless otherwise noted.

Employees’ Retirement, Retiree Health RussellSector weights Death & Disability Plan Benefits Fund 1000 ValueAutos & Housing 2.6 2.6 1.2Basic Materials 3.7 4.1 3.2Consumer Staples 11.3 11.3 8.0Energy 11.6 11.6 12.9Financial Services 23.5 23.5 27.4Health Care 12.2 12.2 12.1Industrial Goods & Services 11.0 10.9 7.0Leisure 4.0 4.0 5.9Retailing 2.7 2.7 2.6Special Products & Services 1.6 1.5 1.0Technology 7.9 7.9 4.9Transportation 0.0 0.0 1.9Utilities & Communications 6.0 6.0 12.0

Employees’ Retirement, Disability &Risk* Death Benefit PlanPredicted tracking error1 4.10%Realized tracking error 3.40%Highest monthly excess return 2.64Lowest monthly excess return -2.18R-square 0.97Beta1 0.90Alpha 0.27Information ratio 0.96Annualized std dev Portfolio 17.18%

Index 18.99%Sharpe ratio Portfolio 0.08

Index -0.01*All risk characteristics based on last 5 years of Employees’ Retirement, Disability & Death BenefitPlan relative to the Russell 1000 value.

Employees’ Retirement,Disability & Death Retiree Health

Top ten holdings Benefit Plan Benefits FundPhilip Morris International Inc 3.8 3.8Lockheed Martin Corp 3.8 3.8Chevron Corp 3.2 3.2Goldman Sachs Group Inc 3.1 3.1JPMorgan Chase & Co 2.9 2.9AT&T Inc 2.8 2.8Bank of New York Mellon Corp 2.8 2.8International Business Machines Corp 2.7 2.7MetLife Inc 2.7 2.7Pfizer Inc 2.8 2.7Total 30.6 30.5

1


10 year historical sector exposure

Autos & Housing 3.2 – 1.6 2.2

Basic Materials 12.7 2.9 6.9 4.2

Consumer Staples 12.5 7.7 10.3 6.2

Energy 17.1 10.7 12.5 13.0

Financial Services 32.3 16.9 25.8 31.4

Health Care 12.6 6.4 8.8 7.1

Industrial Goods & Services 11.5 3.9 8.4 6.6

Leisure 8.5 1.5 4.9 6.2

Retailing 5.1 0.5 2.9 3.0

Special Products & Services 4.0 – 1.5 0.7

Technology 7.3 0.6 4.0 4.8

Transportation 2.0 0.2 1.1 1.3

Utilities & Communications 18.3 7.1 10.6 13.4

1 Based on the MFS institutional representative account.

MFS Large Cap Value Equity1 Russell 1000 ValueAs of 31-Dec-10 Maximum Minimum Average Average


Relative annual historical sector allocations

MFS1 minus Russell 1000 Value sector weights

IndustrialGoods &Services

ConsumerStaples

SpecialProducts

& Services

Tech-nology

Autos &Housing

BasicMaterials

Retailing HealthCare

Energy Transpor-tation

Leisure FinancialServices

Utilities &Communi-

cations

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

% o

f Por

tfolio

Dec1999

Dec-2000

Dec-2001

Dec-2002

Dec-2003

Dec-2004

Dec-2005

Dec-2006

Dec-2007

Dec-2008

Dec2009

Dec2010

Overweight

Underweight

1 Based on the MFS institutional representative account.


Employees’ Retirement, Disability & Death Benefit Plan Portfolio holdings

Cash and other assets are less liabilities.

MarketAs of 28-Feb-11 Value (%)


Autos & Housing 2.6Sherwin-Williams Co 0.9Stanley Black & Decker Inc 0.8Johnson Controls Inc 0.4Pulte Group Inc 0.2General Motors Co 0.2Basic Materials 3.7PPG Industries Inc 1.33M Co 1.3Air Products & Chemicals Inc 1.1Cash & Other 2.0Consumer Staples 11.3Philip Morris International Inc 3.8General Mills Inc 1.7PepsiCo Inc 1.6Kellogg Co 1.1Procter & Gamble Co 0.9JM Smucker Co 0.8Altria Group Inc 0.6Reynolds American Inc 0.5Avon Products Inc 0.2Energy 11.6Chevron Corp 3.2Exxon Mobil Corp 2.7Apache Corp 2.5Hess Corp 1.3EOG Resources Inc 0.8

Occidental Petroleum Corp 0.8Pride International Inc 0.4Financial Services 23.5Goldman Sachs Group Inc 3.1JPMorgan Chase & Co 2.9Bank of New York Mellon Corp 2.8MetLife Inc 2.7Wells Fargo & Co 2.1Bank of America Corp 1.7Travelers Cos Inc 1.4Prudential Financial Inc 1.4AON Corp 1.1State Street Corp 1.0PNC Financial Services Group Inc 0.8Mastercard Inc 0.8Chubb Corp 0.7Allstate Corp 0.6BlackRock Inc 0.3Health Care 12.2Pfizer Inc 2.8Johnson & Johnson 2.6Abbott Laboratories 2.1Medtronic Inc 1.4St Jude Medical Inc 1.0Becton Dickinson and Co 0.9Thermo Fisher Scientific Inc 0.5Quest Diagnostics Inc 0.5Merck & Co Inc 0.4


Employees’ Retirement, Disability & Death Benefit Plan Portfolio holdings (continued)


Industrial Goods & Services 11.0Lockheed Martin Corp 3.8United Technologies Corp 2.3Honeywell International Inc 1.5Northrop Grumman Corp 1.3Danaher Corp 1.0Eaton Corp 0.9Fluor Corp 0.2Leisure 4.0Walt Disney Co 1.5Omnicom Group Inc 1.3Hasbro Inc 0.5Viacom Inc 0.4McDonald's Corp 0.3Retailing 2.7Target Corp 0.8CVS Caremark Corp 0.6Kohl's Corp 0.4Staples Inc 0.3Walgreen Co 0.3Advance Auto Parts Inc 0.3Special Products & Services 1.6Dun & Bradstreet Corp 1.0Western Union Co 0.7Technology 7.9International Business Machines Corp 2.7Oracle Corp 2.4

Intel Corp 1.4Cisco Systems Inc 0.8Hewlett-Packard Co 0.7Utilities & Communications 6.0AT&T Inc 2.8PG&E Corp 1.0Public Service Enterprise Group Inc 0.6Verizon Communications Inc 0.6Dominion Resources Inc 0.5PPL Corp 0.3PPL Corp Conv Pfd 0.2




Retiree Health Benefits FundPortfolio holdings




Autos & Housing 2.6Sherwin-Williams Co 0.9Stanley Black & Decker Inc 0.8Johnson Controls Inc 0.4Pulte Group Inc 0.2General Motors Co 0.2Basic Materials 4.1PPG Industries Inc 1.73M Co 1.3Air Products & Chemicals Inc 1.1Cash & Other 1.7Consumer Staples 11.3Philip Morris International Inc 3.8General Mills Inc 1.7PepsiCo Inc 1.6Kellogg Co 1.1Procter & Gamble Co 0.9JM Smucker Co 0.8Altria Group Inc 0.6Reynolds American Inc 0.5Avon Products Inc 0.2Energy 11.6Chevron Corp 3.2Exxon Mobil Corp 2.6Apache Corp 2.5Hess Corp 1.3EOG Resources Inc 0.8

Occidental Petroleum Corp 0.8Pride International Inc 0.4Financial Services 23.5Goldman Sachs Group Inc 3.1JPMorgan Chase & Co 2.9Bank of New York Mellon Corp 2.8MetLife Inc 2.7Wells Fargo & Co 2.1Bank of America Corp 1.7Travelers Cos Inc 1.4Prudential Financial Inc 1.4AON Corp 1.1State Street Corp 1.0Mastercard Inc 0.9PNC Financial Services Group Inc 0.8Chubb Corp 0.7Allstate Corp 0.6BlackRock Inc 0.3Health Care 12.2Pfizer Inc 2.7Johnson & Johnson 2.6Abbott Laboratories 2.2Medtronic Inc 1.4St Jude Medical Inc 1.0Becton Dickinson and Co 0.9Thermo Fisher Scientific Inc 0.5Quest Diagnostics Inc 0.5Merck & Co Inc 0.4


Retiree Health Benefits FundPortfolio holdings (continued)


Industrial Goods & Services 10.9Lockheed Martin Corp 3.8United Technologies Corp 2.3Honeywell International Inc 1.5Northrop Grumman Corp 1.3Danaher Corp 1.0Eaton Corp 0.9Fluor Corp 0.2Leisure 4.0Walt Disney Co 1.5Omnicom Group Inc 1.3Hasbro Inc 0.5Viacom Inc 0.4McDonald's Corp 0.3Retailing 2.7Target Corp 0.8CVS Caremark Corp 0.6Kohl's Corp 0.4Staples Inc 0.3Walgreen Co 0.3Advance Auto Parts Inc 0.3Special Products & Services 1.5Dun & Bradstreet Corp 0.9Western Union Co 0.7Technology 7.9International Business Machines Corp 2.7Oracle Corp 2.4

Intel Corp 1.4Cisco Systems Inc 0.8Hewlett-Packard Co 0.7Utilities & Communications 6.0AT&T Inc 2.8PG&E Corp 1.0Public Service Enterprise Group Inc 0.6Verizon Communications Inc 0.6Dominion Resources Inc 0.5PPL Corp 0.3PPL Corp Conv Pfd 0.1




Assets Fees

Separate account Initial $100 million 40 basis points or 0.40%

Next $100 million 30 basis points or 0.30%

Over $200 million 28 basis points or 0.28%

LADWP’s fee schedule


Appendix

Contents Page

Glossary of terms 37

Market capitalization 39

Forecasted tracking error and portfolio beta vs Russell 1000 Value Index 40

MFS Large Cap Value Equity team additional resources 41

Composite report (USD) 44


Glossary of terms

Alpha is a measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk asmeasured by beta. A positive alpha figure indicates the portfolio has performed better than its beta would predict. In contrast, anegative alpha indicates the portfolio's underperformance, given the expectations established by the fund's beta.

Beta is a measure of a portfolio's sensitivity to market movements. The beta of the market is 1.00 by definition. A portfolio with abeta of 0.85 would indicate that the portfolio is expected to perform 15% worse that the market's excess return during up marketsand 15% better during down markets , assuming all other factors remain constant.

Earnings-per-share (EPS) growth represents the annualized rate of net-income-per-share growth over the trailing three-yearperiod for the stocks held by the portfolio. Earnings-per-share growth gives a good picture of the rate at which a company hasgrown its profitability per unit of equity.

Excess return is defined as the portfolio's achieved rate of return minus the benchmark return over the same period.

Information ratio is a measure of risk adjusted performance. Dividing the portfolio active return by portfolio tracking error givesyou the information ratio.

Predicted tracking error (also called active risk) is a measure of the expected deviation from the benchmark.

Price/book ratio of the portfolio is the weighted average of the price/book ratios of all the stocks in the portfolio. Book value is thetotal assets of a company, less total liabilities. A company's book value is calculated by dividing the market price of its outstandingstock by the company's book value, and then adjusting for the number of shares outstanding (Stocks with negative book valuesare excluded from this calculation.). The price/book ratio can tell investors approximately how much they're paying for acompany's assets, based on historical, rather than current, valuations.

Price/cash flow is a stock's current price divided by the trailing 12-month cash flow per share. For the portfolio this numberrepresents the weighted average of the price/cash-flow ratios of the stocks in the portfolio. Price/cash-flow represents the amountan investor is willing to pay for a dollar generated from a particular company's operations. Price/cash-flow shows the ability of abusiness to generate cash and acts as a gauge of liquidity and solvency.


Glossary of terms (continued)

P/E (12 month forward) is a stock's current price divided by the company's trailing 12-month earnings per share. The (P/E) ratioof the portfolio is the weighted average of the price/earnings ratios of the stocks in the portfolio. The P/E ratio of a company,which is a comparison of the cost of the company's stock and its expected next 12-month earnings per share, is calculated bydividing these two figures.

Price/sales is a stock's current price divided by the company's trailing 12-month sales per share. For the portfolio this numberrepresents the weighted average of the price/sales ratios of the stocks in the portfolio. Price/sales represents the amount aninvestor is willing to pay for a dollar generated from a particular company's operations.

R-Squared is the measure of correlation between a portfolio and the market (benchmark). Values range between 0 and 1. Thehigher the value of R-Square, the greater the correlation between the two. R-squared can be used to determine the significanceof a particular beta or alpha. Generally, a higher R-squared will indicate a more useful beta figure. If the R-squared is lower, thenthe beta is less relevant to the fund's performance.

Realized tracking error (also called active risk) is a measure of the actual deviation from the benchmark.

Return on Equity (ROE) represents the amount of net income returned as a percentage of shareholders equity. Return on equitymeasures a corporation's profitability by revealing how much profit a company generates with the money shareholders haveinvested. ROE can be one measure of quality of a company.

Sharpe Ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher theSharpe ratio, the better the portfolio's historical risk-adjusted performance.

Standard Deviation is a statistical measurement of dispersion about an average and depicts how widely a portfolio's returnsvaried over a certain period of time. When a portfoliohas a high standard deviation, the predicted range of performance is wide,implying greater volatility.


Los Angeles Department of Power & WaterMarket capitalization (USD)

As of 28-Feb-11

0 – 1 bn 1 – 5 bn 5 – 10 bn 10 – 50 bn 50 – 100 bn 100 bn +

% of

portf

olio

0.0 0.0 1.4

11.1

3.49.7

45.338.1

13.07.3

35.1 33.9

Portfolio Russell 1000 Value

Small-cap Mid-cap Large-cap

Weighted average market cap ($ billions)Employees’ Retirement, Disability &Death Benefit Plan 87.8Retiree Health Benefits Fund 87.2S&P 500 95.0Russell 1000 Value 74.4Russell Midcap Value 8.3Russell 2000 Value 1.2


Forecasted tracking error and portfolio beta vs Russell 1000 Value Index1

As of 31-Dec-10

1 Based on the MFS institutional representative account.The historical predicted tracking error and beta are predicted by BARRA as of the dates shown. This information is used by the portfolio managers at the time of prediction to better assess theportfolio’s positioning. The actual tracking error and beta may be different from the predicted tracking error and beta. The actual tracking error and beta are available upon request.Source: Barra. The Barra information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments orproducts or any indices. The Barra information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. Barra, each of its affiliatesand each other person involved in or related to compiling, computing or creating any Barra information (collectively, the "Barra Parties") expressly disclaims all warranties (including without limitation,any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of theforegoing, in no event shall any Barra Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.

3Q98 2Q00 1Q02 4Q03 3Q05 2Q07 1Q09 4Q100.6

0.7

0.8

0.9

1.0

2

3

4

5

6

7

8

9

Portf

olio b

eta

Fore

caste

d tra

cking

erro

r

Portfolio beta Forecasted tracking error

Jonathan W. Sage, CFA - Investment Officer- Blended Research Portfolio Manager- As a Blended Research Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio

construction, risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 2000; positions include Quantitative Equity Research Analyst.- Previous experience includes 2 years as Supervisor - Portfolio Administration at Santander Global

Advisor, Inc.; 3 years as Mutual Fund Accountant, Sr. Mutual Fund Accountant and Unit Manager at FirstData Investor Services Group.

- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- Boston College, MBA- Tufts University, BA

Benjamin Stone, IIMR - Investment Officer- Equity Portfolio Manager- As a Value Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 2005; positions include Equity Research Analyst.- Previous experience includes 8 years as Research Analyst at Schroders Investment Management.- Affiliations include Institute of Investment Management and Research.- Durham University, BA

Brooks A. Taylor - Investment Officer- Equity Portfolio Manager- As a Value Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 1996; positions include Equity Research Analyst.- Previous experience includes 3 years as Associate/Financial Analyst at The Lodestar Group.- University of Pennsylvania, MBA- Yale University, BA

MFS Large Cap Value Equity team additional resources


Barnaby Wiener - Investment Officer- Equity Portfolio Manager- Serves on MFS Non-U.S. Equity Management Committee.- As a Value Equity Portfolio Manager, responsible for final buy and sell decisions, portfolio construction,

risk and cash management. Participates in the research process and strategy discussions.- Joined MFS in 1998; positions include Equity Research Analyst.- Previous experience includes 2 years as Vice President & Equity Analyst at Merrill Lynch;

2 years as Equity Research Analyst at Credit Lyonnais.- Served five years in the British Army reaching the rank of Captain- Royal Military College, Sandhurst , Graduate Course- Oxford University, MA, upper 2nd class history degree

Camille Humphries Lee, CFA - Investment Officer- Institutional Equity Portfolio Manager- As an Institutional Portfolio Manager, participates in the research process and strategy discussions.


- Joined MFS in 2000.- Previous experience includes 3 years as Research Analyst at SG Cowen Securities

Corporation; 8 years as Research Analyst and Associate Analyst at Alex Brown.- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- University of Virginia, MBA- University of Virginia, BA

MFS Large Cap Value Equity team additional resources (continued)


Joseph G. MacDougall, CFA - Investment Officer- Institutional Equity Portfolio Manager- As an Institutional Portfolio Manager, participates in the research process and strategy discussions.


- Joined MFS in 2000; positions include Senior Product Manager.- Previous experience includes 1 year as Senior Investment Analyst at UAM Investment Services;

4 years as Senior Financial Analyst and Director of Managed Accounts at New England Securities.- Affiliations include CFA Institute, Boston Security Analysts Society, Inc.- Boston University, MBA- Boston College, BS

Abel Z. Rebelo - Director, Institutional Product Management- As an Institutional Product Manager, communicates investment policy, strategy and tactics,

performs portfolio analysis and leads institutional product development.- Joined MFS in 2000; positions include Associate Investment Specialist; Product Services Analyst.- Previous experience includes 2 years as Product Information Specialist, Senior Product Information

Specialist at Mellon Trust/Mellon Financial Company; 2 years as Trust Specialist, Senior Trust Specialistat Mellon Trust/The Boston Company.

- Boston University, MBA- Providence College, BS, cum laude

MFS Large Cap Value Equity team additional resources (continued)


of PeriodGross of fees Net of fees Benchmark

Period CompositeDispersion

Assets in CompositeComposite and Benchmark Return (USD million) % Firm

Accounts in

Composite at End

27,128.612.43 11.822010 15.51 $ 12.30.18 29

19,989.121.85 21.192009 19.69 $ 10.90.49 25

12,169.9-32.09 -32.512008 -36.85 $ 9.50.14 21

16,018.38.85 8.152007 -0.17 $ 8.10.24 20

14,436.421.98 21.202006 22.25 $ 7.70.23 24

11,911.67.41 6.722005 7.05 $ 7.30.21 27

12,016.516.40 15.652004 16.49 $ 8.20.22 37

10,632.426.20 25.392003 30.03 $ 7.60.24 42

6,191.7-12.98 -13.552002 -15.52 $ 5.50.44 34

4,627.8-6.12 -6.732001 -5.59 $ 3.40.01 18

MFS Investment Management® claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliancewith the GIPS® standards. MFS has been independently verified for the periods 1-Jan-1988 through 31-Dec-2009.Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm'spolicies and procedures are designed to calculate and present performance in compliance with the GIPS® standards. MFS Large Cap Value Equity Composite has beenexamined for the periods 01-Feb-1989 through 31-Dec-2009. The verification and performance examination reports are available upon request.

Total Gross-of-fee returns in USD terms (includes both capital appreciation and income), are net of transaction costs, withholding taxes and directexpenses, but before management fees, custody and other indirect expenses. Certain accounts may be subject to Fair Valuation as conditions warrant.Typical separate accounts utilize 4:00 PM (London Time) foreign exchange rates; retail products will use rates deemed most appropriate for daily NAVper share calculations. The possibility exists for performance dispersion between otherwise similarly managed accounts and also with the benchmark.Management fees for this product style are described in full in Form ADV Part II which is available upon request.Net composite returns are prepared by subtracting from the monthly gross returns one-twelfth of the maximum applicable annual institutional separateaccount fee.Total Returns of the Benchmark are provided for each period depicted, expressed in USD. Source of Benchmark Performance: FACTSET ®.Benchmark returns are not examined by independent accountants.Composite Dispersion is measured by the asset-weighted standard deviation of account returns for all accounts in the composite for the full period.There were no non-fee paying accounts in the composite during any of the time periods depicted. No segments of balanced mandates have beenincluded in this composite.Prior to 31-Mar-2009 accounts would be eligible for inclusion in the composite if they have assets greater than 5.0 MM USD and as of their second fullmonth of performance.Prior to 1-Aug-2008, the maximum institutional separate account fee charged for this product was 65 bps. The net returns depicted in this report arebased upon the historical max in effect for each of the periods depicted.For purposes of GIPS® compliance, the firm is defined as MFS Investment Management® which is comprised of Massachusetts Financial ServicesCompany (MFS) and MFS Institutional Advisors, Inc. (MFSI), each of which is a registered investment advisor, and MFS Heritage Trust Company, aNew Hampshire Trust company. Total firm assets are calculated at market value and include assets managed by MFS, MFSI and MFS Heritage TrustCompany as well as assets managed by MFS and MFSI in a sub-advisory capacity on behalf of affiliated investment advisors that may or may not beregistered under the United States Investment Advisers Act of 1940, such as MFS International, Ltd. (MIL UK) and MFS Investment Management K.K.(MIMKK), as well as assets managed by MFS and MFSI on behalf of unaffiliated investment advisors that may or may not be registered under theUnited States Investment Advisers Act of 1940. Total firm assets for GIPS® purposes do not include assets of non-discretionary, advisory relationships.A complete list of firm composites and descriptions, along with additional information regarding policies for calculating and reporting returns areavailable upon request.

Russell 1000 Value -Total Return

MFS Large Cap ValueEquity CompositeComposite:

Investment Objective: To seek capitalappreciation and reasonable income by investingprimarily in out-of-favor and undervalued largecapitalization stocks with lower volatility over fullmarket cycles (typically 3 to 5 years).

Creation Date:

Benchmark

20-Feb-2001Inception Date: 1-Feb-1989

Institutional Separate Account Fee ScheduleAsset Breakpoints (USD) Fee

For Assets Up To 50 MM 55 bpFor Assets From 50 MM To 100 MM 40 bpFor Assets Over 100 MM 35 bp

21.31 23.51

Annualized 3 Year Standard Deviation

Composite: Benchmark:

Accounts are eligible for inclusion in the composite ifthey have assets greater than 2 MM USD.Accounts are included as of their first full month ofperformance.

Performance Presentation Report

2010, Q4

Page 1 of 1AELVRun time: 26-Jan-2011 11:01:13 AM

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