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S&P 500 Stock Buybacks Retreat in Q1 But Remain Strong

NEW YORK, June 18 PRNewswire — Standard & Poor's, the world's leading index provider, announced today that preliminary results show S&P 500 stock buyback activity slowing considerably during the first quarter of 2008, posting its first year-over-year quarterly drop since the third quarter of 2003. According to Standard & Poor's data, S&P 500 buybacks are set to record $113.9 billion in stock buybacks during the first quarter, representing a 3.23% decline over the $117.7 billion spent during the first quarter of 2007.

"Despite the slowdown, the first quarter results marked the tenth straight quarter of $100 billion plus buybacks for the S&P 500 companies," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's. "Standard & Poor's expects buyback activity to continue at the $100 billion plus rate throughout 2008, but not at the record setting pace set in the third quarter of 2007 when $172 billion was spent on stock repurchases."

On a sector basis, Standard & Poor's notes the continuing shift in sector buyback participation. Financial issues continue to shy away from buybacks, accounting for just 12.3% of the aggregate repurchases during the first quarter of 2008 — less than half of the 28.7% they spent during the first quarter of 2007. Conversely, Information Technology spent over six times the amount on stock buybacks than it did on cash dividends.

"The market is now seeing a substantial increase in Financial companies issuing common and convertible instruments in an effort to shore up liquidity," add Silverblatt. "The additional financing gives them immediate breathing room, with the payback being longer term dilution."

Over the past fourteen quarters, since the buyback boom began during the fourth quarter of 2004, S&P 500 issues have spent approximately $1.55 trillion on stock buybacks compared to $1.68 trillion on Capital Expenditures and $783 billion on dividends.

The S&P 500 is the world's most followed stock market index with $1.5 trillion directly indexed via ETF's, index funds and other investment vehicles. Over $4.85 trillion is benchmarked to the S&P 500.

Historical S&P 500 buyback data can be found at: www.marketattributes.standardandpoors.com

STANDARD & POOR'S INDEX SERVICES AS MARKET REPORTED VALUE EARNINGS DIVIDENDS BUYBACKS DIVIDEND& BILLION BILLION BILLION BILLION BUYBACK YIELD QUARTER 03/31/2008 $11,510.68 $135.24 $61.72 $113.90 7.25% 12/31/2007 $12,867.85 $68.53 $67.09 $141.71 6.49% 09/30/2007 $13,469.72 $133.66 $60.84 $171.95 5.89% 06/30/2007 $13,349.73 $194.29 $59.44 $157.76 5.43% 03/31/2007 $12,706.32 $190.75 $58.32 $117.70 5.34% 12/31/2006 $12,728.86 $181.65 $61.76 $105.18 5.15% 09/30/2006 $12,019.85 $193.19 $54.78 $109.81 5.39% 06/30/2006 $11,496.84 $182.02 $54.46 $116.66 5.34% 03/31/2006 $11,659.69 $177.30 $53.25 $100.18 4.92% 12/31/2005 $11,254.54 $155.89 $54.83 $104.28 4.90% 09/30/2005 $11,082.59 $160.72 $48.99 $81.47 4.58% 06/30/2005 $10,890.01 $167.19 $49.03 $81.42 4.31% 03/31/2005 $10,819.81 $154.43 $48.99 $82.05 3.92% 12/31/2004 $11,288.60 $129.85 $49.68 $66.42 3.35% 09/30/2004 $10,397.80 $132.28 $45.54 $45.68 3.34% 06/30/2004 $10,623.42 $142.01 $43.43 $42.46 3.11% 03/31/2004 $10,461.32 $141.01 $42.36 $42.92 2.97% 12/31/2003 $10,285.83 $121.74 $46.76 $38.53 2.84% 09/30/2003 $9,207.69 $116.12 $39.96 $34.13 06/30/2003 $9,001.01 $102.53 $37.74 $28.36 03/31/2003 $7,826.70 $109.99 $36.19 $30.03 S&P 500 SECTOR % OF TOTAL BUYBACKS Preliminary Q1 2008 DATA Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Consumer Discretionary 14.87% 11.55% 9.63% 20.30% 11.63% 10.92% Consumer Staples 9.75% 6.20% 9.51% 9.36% 9.44% 8.34% Energy 12.27% 9.43% 10.08% 8.56% 17.87% 14.79% Financials 22.30% 28.68% 17.00% 16.15% 13.41% 12.35% Healthcare 8.41% 9.57% 11.88% 10.85% 10.67% 12.25% Industrials 6.68% 7.90% 8.80% 10.19% 9.96% 11.76% Information Technology 20.57% 20.28% 26.82% 13.90% 22.53% 21.90% Materials 1.66% 1.66% 1.68% 3.78% 1.75% 2.05% Telecommunication Services 2.11% 3.48% 4.16% 2.30% 2.13% 5.06% Utilities 1.37% 1.25% 0.45% 4.62% 0.59% 0.60% S&P 500 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% LARGEST Q1 2008 BUYBACK EXPENDITURES, $ MILLIONS From Q4 COMPANY SECTOR Q1 2008 Q1 2007 Change 2004 Exxon Mobil (4th Energy $9,465 $7,960 18.9% $92,954 largest in S&P history) AT&T Telecommunication $4,071 $3,005 35.5% $19,430 Services Hewlett-Packard Information $2,845 $4,024 -29.3% $28,349 Technology Procter & Gamble Consumer Staples $2,554 $1,348 89.5% $34,847 Intel Corp Information $2,501 $400 525.3% $22,519 Technology ConocoPhillips Energy $2,496 $1,000 149.6% $12,346 International Information $2,427 $3,398 -28.6% $37,532 Business Technology Machines McDonald's Corp Consumer $2,011 $968 107.7% $8,514 Discretionary WellPoint Inc Healthcare $2,009 $635 216.4% $13,045 Chevron Corp Energy $1,899 $1,147 65.6% $15,966 TOP 10 TOTAL $32,278 $23,885 35.1% $285,501

About Standard & Poor's Index Services

Standard & Poor's Index Services, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Its family of indices includes the S&P 500, an index with $1.5 trillion invested and $4.85 trillion benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices. For more information, please visit www.standardandpoors.com/indices.

About Standard & Poor's

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 21 countries. Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com.

SOURCE Standard & Poor's

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