Capital Markets Equity Screens A P R I L 3 0 2 0 1 3

United States

Past performance is not a guarantee of future performance.

Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Investing in smaller/mid-cap companies involves greater risks not associated with investing in more established companies, such as business risk, significant stock price fluctuations and illiquidity.

Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations.

Information provided herein has been obtained from outside sources that are deemed to be reliable. However, Morgan Stanley Wealth Management has not independently verified them and we make no guarantees, express or implied, as to their accuracy or completeness or as to whether they are current.

This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This is not a research report and was not prepared by the research departments of Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC or Citigroup Global Markets Inc. It was prepared by Morgan Stanley Wealth Management sales, trading or other non-research personnel. Past performance is not necessarily a guide to future performance. Please see additional important information and qualifications at the end of this material.

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Companies with a Long History of Dividend Payment/Growth This report is prepared on a monthly basis according to the criteria listed below. These criteria are pre-set and will not be adjusted in this or future reports. Accordingly, the securities listed have not been individually reviewed by the author nor is the author recommending these securities. • Focus — This report identifies those stocks in the research coverage universe of

Morgan Stanley & Co. LLC (Morgan Stanley) and Citi Research (Citi) which have a long history of dividend payment and growth.

• Criteria — The identified stocks have historically achieved an annualized dividend growth rate of 5% or better over a 15 year trailing period. Please note past performance is not a guarantee of future performance.

− Stocks must be Overweight or Equal-Weight rated by Morgan Stanley Research and/or Buy (1) or Neutral (2) Rated by Citi Research

− Market-capitalization greater than $2 billion

− Dividend Yield greater than or equal to S&P 500 Yield

− Closing price greater than or equal to $3

− Current dividend payout < 60% of the current year's EPS estimate, in order to avoid stocks that have potentially unsustainable dividend levels.

• Reminder — This list should be used as a starting point only. This is not a research report. Please ask your Financial Advisor for a copy of current fundamental research on those stocks which appear to be of interest.

Morgan Stanley Wealth Management

Capital Markets

Miro Pasic

Casey Galligan

Simon Kong

Sean Diffley

Herwin Yip

John Storey

30 April 2013

This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the research departments of Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC or Citigroup Global Markets Inc. Please refer to important information and qualifications at the end of this material.

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Figure 1. Companies with a Long History of Dividend Payment/Growth

Mktcap Price Div. 15Yr Div. Payout MS MS Industry CitiSector Company Name ($ mil) 04/29/13 Yield Growth Ratio Rating View Rating

Energy HFC HollyFrontier Corp. 10,221.15 50.23 2.39% 29.7% 18% OW Attractive 2HHealth Care CAH Cardinal Health Inc. 14,997.84 44.00 2.50% 24.6% 31% OW In-Line 2C. Discre. HD Home Depot Inc. 109,191.54 73.67 2.12% 22.6% 44% EW In-Line 1Financials AFL AFLAC Inc. 25,183.99 54.04 2.59% 20.4% 23% EW In-Line 1C. Staples WMT Wal-Mart Stores Inc. 257,889.86 78.39 2.40% 18.5% 35% EW In-Line 1Materials PX Praxair Inc. 33,827.88 114.38 2.10% 18.5% 40% EW Attractive 1Health Care MDT Medtronic Inc. 47,486.67 46.84 2.22% 17.1% 28% EW In-Line 1Energy ESV Ensco PLC Cl A 13,126.77 56.37 3.55% 16.8% 30% EW Attractive 1C. Discre. TGT Target Corp. 45,307.57 70.64 2.04% 15.1% 31% OW In-Line 1C. Staples WAG Walgreen Co. 46,824.71 49.42 2.23% 15.1% 34% EW In-Line 1Industrials UTX United Technologies Corp. 84,226.36 91.62 2.34% 14.5% 35% OW In-Line 1Health Care JNJ Johnson & Johnson 239,370.36 85.58 3.08% 12.9% 49% EW In-Line 1C. Staples PEP PepsiCo Inc. 127,811.29 82.65 2.60% 12.1% 49% OW In-Line 2Industrials GD General Dynamics Corp. 25,881.54 73.28 3.06% 12.0% 33% 1Financials ACE ACE Ltd. 30,238.14 88.92 2.20% 11.9% 24% OW In-LineC. Discre. JCI Johnson Controls Inc. 24,043.50 35.10 2.17% 11.8% 29% OW In-Line 2C. Staples PG Procter & Gamble Co. 212,903.25 77.68 3.10% 11.0% 60% EW In-Line 1Industrials DE Deere & Co. 34,604.26 88.83 2.30% 10.7% 24% 1C. Staples CLX Clorox Co. 11,296.78 86.26 2.97% 10.0% 59% EW In-Line 1C. Staples KO Coca-Cola Co. 188,126.63 42.24 2.65% 9.6% 52% EW In-Line 1Industrials ETN Eaton Corporation PLC 28,490.38 60.28 2.79% 9.5% 39% EW In-Line 1Industrials PH Parker-Hannifin Corp 13,249.71 88.83 2.03% 9.4% 28% 1C. Discre. LTD L Brands Inc. 14,441.45 49.94 2.40% 9.1% 38% OW Cautious 1Industrials DOV Dover Corp. 11,925.88 69.70 2.01% 8.7% 27% OW In-Line 2Industrials CR Crane Co. 3,093.35 53.65 2.09% 8.1% 26% 1Energy CVX Chevron Corp. 235,179.31 121.32 3.30% 8.0% 32% OW In-Line 1Industrials NOC Northrop Grumman Corp. 17,628.27 74.96 2.93% 7.9% 31% 1Industrials EMR Emerson Electric Co. 39,937.86 55.31 2.97% 7.0% 46% EW In-Line 1Health Care BAX Baxter International Inc. 38,341.46 70.56 2.55% 6.5% 39% OW In-Line 2Industrials HON Honeywell International Inc. 58,064.66 73.80 2.22% 6.4% 33% OW In-Line 1Industrials MMM 3M Co. 71,662.95 103.83 2.45% 6.0% 38% OW In-Line 2Industrials RTN Raytheon Co. 19,710.56 60.72 3.62% 5.9% 41% 1C. Staples GIS General Mills Inc. 32,368.28 50.21 3.03% 5.7% 56% EW In-Line 1Materials RPM RPM International Inc. 4,223.00 31.87 2.82% 5.3% 50% OW AttractiveUtilities MDU MDU Resources Group Inc. 4,607.48 24.40 2.83% 5.1% 53% EW Attractive 1Industrials SWK Stanley Black & Decker Inc. 12,059.50 74.48 2.63% 5.0% 36% OW In-Line

Source: Factset; Morgan Stanley Research; Citi Research

30 April 2013

This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the research departments of Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC or Citigroup Global Markets Inc. Please refer to important information and qualifications at the end of this material.

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Morgan Stanley & Co. LLC Research Ratings Definitions Morgan Stanley uses a relative rating system using terms such as Overweight, Equal-weight, Not-Rated, or Underweight. Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks covered. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all ratings used in Morgan Stanley Research. In addition, since Morgan Stanley Research contains more complete information concerning the analyst's view, investors should carefully read Morgan Stanley Research, in its entirety, and not infer the contents from the ratings alone. In any case, ratings (or research) should not be used or relied upon as investment advice. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Overweight (OW): The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage

universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (EW): The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's)

coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U): The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage

universe, on a risk-adjusted basis, over the next 12-18 months. Not-Rated (NR): Currently, the analyst does not have adequate conviction about the stock's total return relative to the average total return of

the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. In addition to analyst stock ratings, Morgan Stanley provides the analyst’s industry views: Attractive (A): Performance of industry coverage universe over the next 12 to18 months is expected to be attractive versus the relevant broad

market benchmark.* In Line (I): Performance of industry coverage universe over the next 12 to18 months is expected to be in line with the relevant broad

market benchmark.* Cautious (C): Performance of industry coverage universe over the next 12 to18 months is viewed with caution versus the relevant broad

market benchmark.* Citi Research Ratings Definitions Citi’s stock recommendations include an investment rating and an optional risk rating to highlight high risk stocks. The risk rating takes into account both price volatility and fundamental criteria. Stocks will either have no risk rating or a High risk rating assigned. Investment Ratings: Citi's investment ratings are Buy (1), Neutral (2) and Sell (3). Citi’s ratings are a function of analyst expectations of expected total return (“ETR”) and risk. ETR is the sum of the forecast price appreciation (or depreciation) plus the dividend yield for a stock within the next 12 months. Citi’s investment rating definitions are: Buy (1) ETR of 15% or more or 25% or more for High risk stocks; and Sell (3) for negative ETR. Any Citi covered stock not assigned a Buy or a Sell is a Neutral (2). For stocks rated Neutral (2), if a Citi analyst believes that there are insufficient valuation drivers and/or investment catalysts to derive a positive or negative investment view, they may elect with the approval of Citi management not to assign a target price and, thus, not derive an ETR. Citi analysts may place covered stocks “Under Review” in response to exceptional circumstances (e.g. lack of information critical to the analyst's thesis) affecting the company and / or trading in the company's securities (e.g. trading suspension). As soon as practically possible, the Citi analyst will publish a note re-establishing a rating and investment thesis. To satisfy regulatory requirements, Citi corresponds Under Review and Neutral to Hold in its ratings distribution table for Citi’s 12-month fundamental rating system. However, Citi reiterates that it does not consider Under Review to be a recommendation. Prior to October 7, 2011, Citi used a different stock recommendation system. Please refer to a Citi research report for a complete description of Citi’s prior and current recommendation system and for more information regarding Citi. * Benchmarks include North America: S&P 500, Latin America: relevant MSCI country index, Europe: MSCI Europe, Japan: TOPIX and Asia: relevant MSCI country index. For important disclosures (including copies of historical disclosures) regarding the securities and/or companies that are the subject of this material, please contact Morgan Stanley Wealth Management Research, 522 Fifth Ave., New York, N.Y. 10036, Attention: Research Management. In addition, the same important disclosures, with the exception of the historical disclosures, are contained on the Firm's disclosure website at https://www.morganstanleysmithbarney.com/researchdisclosures. Historical disclosures will be provided upon request back to June 1, 2009.

30 April 2013

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Important Information and Qualifications This material was prepared by sales, trading or other non-research personnel of Morgan Stanley Smith Barney LLC (together with its affiliates hereinafter, “Morgan Stanley Wealth Management” or “the firm”). Morgan Stanley Wealth Management was formed pursuant to a Joint Venture between Citigroup Inc. and Morgan Stanley & Co. LLC (“Morgan Stanley & Co.”). This material was not produced by a research analyst of Morgan Stanley & Co., Citigroup Global Markets Inc., (“Citigroup”) or Morgan Stanley Wealth Management, although it may refer to a Morgan Stanley & Co., Citigroup, or Morgan Stanley Wealth Management research analyst or report. Unless otherwise indicated, these views (if any) are the author’s and may differ from those of the aforementioned research departments or others in the firms.

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