Divested Companies

Following are companies that have been removed from Portfolio 21 because they no longer meet our investment criteria.

We divest from companies for financial, environmental, and/or corporate responsibility performance issues. We inform companies when they are divested for environmental and corporate responsibility concerns with the intention of providing education that may motivate changes in their performance. Following is a sample of divested companies during the last 12 months.

Securities mentioned are not recommendations to buy or sell any security. Current and future portfolio holdings are subject to risk.

DIVESTED COMPANIES
Date Company Comments
6/10 Munich Re Reinsurance giant Munich Re has been a Portfolio 21 holding since September 2004. Munich Re was divested due to the possibility of deteriorating balance sheets as assets exhibit weaker market prices. The company also has limited pricing power on the premiums it charges. Additionally, we are concerned about the risk profile of its core business due to the growing likelihood of costly natural disasters as a result of climate change.
6/10 Swiss Re Global reinsurance company Swiss Re was originally purchased in the fund in October 1999. Swiss Re was divested due to the possibility of deteriorating balance sheets as assets exhibit weaker market prices. The company also has limited pricing power on the premiums it charges. Additionally, we are concerned about the risk profile of its core business due to the growing likelihood of costly natural disasters as a result of climate change.
6/10 Kao Corporation Purchased in June 2007, Kao Corporation was originally added to the fund as a result of the company's use of life-cycle analysis to reduce the environmental impact of its products. Portfolio 21 divested from the company as a result of worsening profit prospects due to deflation and higher materials costs, as well as a less competitive export market as the yen appreciates.
5/10 VMware VMware was added to the fund in January 2008 because the company's software increases the energy efficiency of servers and data centers. This is an area of growing concern as the demand for data centers is outpacing the availability of clean, reliable power. However, Portfolio 21 decided to sell its position in VMware given the increasing valuation and competition concerns.
5/10 H. Lundbeck H. Lundbeck, a Portfolio 21 holding since June 2008, develops and markets drugs for the treatment of psychiatric and neurological disorders. H. Lundbeck recognizes its greatest environmental impacts and works to avoid and/or reduce the use of hazardous chemicals and to improve production processes from the early development stages. Portfolio 21 sold its position in H. Lundbeck based on a looming patent expiration of a key drug, with little in the company's pipeline to take its place.
5/10 Mitsubishi Electric Added to Portfolio 21 in October 1999, Mitsubishi Electric, one of Japan's largest producers of industrial and consumer electric. The company has for more than a decade seen the Natural Step as an integral part of its organization and has been a leader in environmental design, resource conservation, and material utilization. However, given the worsening prospects for Japanese electronics companies and heavy industry, Portfolio 21 sold its position in Mitsubishi Electric.
5/10 ProLogis ProLogis is a global provider of distribution facilities. The company was added to Portfolio 21 in June 2008. We sold our shares of ProLogis as the risk/return profile for the company has changed. The company is likely to face higher financing costs going forward and Prologis relies on financing for operations and growth. Furthermore, global warehouse demand may not meet company expectations in coming quarters.
3/10 AstraZeneca AstraZeneca researches, manufactures, and sells pharmaceuticals and biopharmaceuticals for a variety of healthcare area. The company was added to Portfolio 21 in April 2009. We sold our stake in AstraZeneca in March after they made big cuts in R&D and shifted focus to marketing drugs that will face generic competition. We don't see this as a strategy that will foster long-term growth. Furthermore, a probe into the company's settlements with generics firms has shaken our confidence. AstraZeneca has struck deals with generic competitors in an effort to preserve revenues on high earning treatments.
12/09 Fuel Tech Fuel Tech, an environmental technologies company, was purchased in December 2007. We divested of our position in this smaller company has long been very small and we decided to divest in favor of larger companies that we feel exhibit more stable characteristics.
12/09 Interface We purchased Interface in September 1999 because the company is a leader in environmental stewardship and has set the bar high in terms of what companies can and should do to lessen their environmental loads. Our position in this smaller company has long been very small and we decided to divest in favor of larger companies that we feel exhibit more stable characteristics.
12/09 Agilent Agilent, a Portfolio 21 holding since June 2000, was divested from the fund as a result of the company's growing military revenues. In fiscal year 2009, Agilent's military revenues exceeded Portfolio 21's 10% cutoff.
11/09 Genzyme Genzyme is a biotechnology company purchased in April 2009. The company offers products and services focused on rare inherited disorders, kidney disease, orthopedics, cancer, transplant and immune disease, and diagnostic testing. Around the world, Genzyme's facilities include environmentally responsible features. Despite these features, on numerous occasions Genzyme's facilities have been contaminated. The risk of further manufacturing and regulatory setbacks outweigh potential share outperformance.
9/09 Xerox Xerox, the document system and services company, has been a Portfolio 21 holding since September 1999. Over the years the company has introduced a growing number of environmentally innovative photocopiers and continuously worked to exceed product standards for environmental performance and energy efficiency. We sold our stake in Xerox Corporation due to our uneasiness over the company's acquisition of Affiliated Computer Systems. We applauded Xerox for improving its credit profile during Anne Mulcahy's tenure as CEO. But new CEO Ursula Burns is re-levering the balance sheet and paying too much in attempt to transform Xerox into a service provider.
8/09 Dell Dell has been a Portfolio 21 holding since August of 2004. The company is among the largest U.S. computer companies and has made great strides in electronic waste management and incorporating Design for Environment principles into its products. However, we divested from the company due to the company's inability to retake lost market share in the PC segment and its lack of product depth in the server segment.
8/09 Ericsson Ericsson was originally purchased in Portfolio 21 in October 1999. The company, headquartered in Sweden, is one of the world's largest providers of mobile networks and cellular phones. Over the years Ericsson has demonstrated environmental leadership by utilizing Design for Environment principles and performing life-cycle analyses on its products and services. We decided to sell our shares because of the razor thin margins and increasing competition in the telecom equipment industry.
8/09 Swisscom SwissCom is a Swiss telecommunications company that was added to the fund in November 1999. While Swisscom has demonstrated good management of its energy use and carbon dioxide emissions, we sold our position in SwissCom because of diminishing growth in its legacy telecom segment and our belief that the company has overpaid for recent acquisitions in an attempt to restore growth.