1. Finance & Investment Club Fall 2012 1.Updates From the Week 2.3 Trend Slides with supportive Excel Backups 3.Plan for the next few years senior Analyst Forum #5

2. 2 Updates From The Week? ResearchCollaborationAction  Reflections on SA Time Commitments  Reflections on General Meetings – Attendance?  Past 2 weeks & Trend Research?  Sector Meeting (workshop) Attendance?

3. 3 Recommendations For Making Sector Meetings Interesting 1.Make an Agenda to Follow for Structural purposes 2.Emphasize or focus on teaching the junior analysts at least one new thing each week 3.Reinforce reasons to stay in the club (ideas?) 4.Ask for feedback from your JA’s on the club, the meetings 5.Do not keep your JA’s for a full hour if they need to be 6.Communicate effectively before and after the meeting, so the JA’s know expectations 7.Use Humor (Play Music? Ideas?)

4. 4 Fall 2012 Industry Analysis Sample Industry Composition & Breakdown Trend Analysis Risks & Prospective Conclusion

5. 5 Analyzing the 10-K: Risk Factors Sample Inclusion: Overview – general description of risk factors Risk Factors Related to our Business RFR to our Intellectual Property & Technology RFR to our Corporate Structure RFR to our Organization RFR to our Common Stock

6. 6 Sample 1 st Semester Risks  Competition from Chinese steelmaking overproduction or under consumption –China can sell steel at or below cost of production. –Dilutes domestic steel prices and makes them more volatile.  Changing or updated environmental regulation –Government is constantly in process of passing new taxing regulation on emissions, most notably a Cap and Trade approach –Foreign producers of steel, that are not regulated, could have an advantage. –Steel producers subject to regulation at the national, state, and local levels of government.  Cyclical profitability of steel production –Steel production relies heavily on commodity prices, and demand for construction. –It is therefore, very dependent on the current state of economy.  Production requires high levels of electricity and natural gas –Industry is dependent on the price of energy determined by current market conditions. –Unexpected economic, political, and natural disasters can significantly increase costs of production.

7. Sample 2 nd Semester Risks Given the negative trends seen in municipal spending- if 2011 – 2015 saw a 50% decrease in municipal spending in ITT’s products: ITT Water revenues down by 16% ITT total revenues down by 5.3% Construction accounts for 23% of ITT Water Business. If ITT were to face a 50% decrease in construction spending, it would decrease: ITT Water revenues by 11.5% ITT total revenues by 3.8% Plastic piping may attract more spending for infrastructure development Funds for plastic pipes may be partially drawn from spending on ITT products With about 50% of aggregate ITT’s revenue coming from the U.S. government management predicts an annual 2% decline in 2011, what if this is too optimistic? If ITT faced 10% less contracts starting in 2011, ITT’s revenue would drop by 4.5%.

8. Sample 2 nd Semester Risks

9. 9  The time series slide acts to connect something that is reasonably predictable such as Steel Production in the United States with a valuation metric such as EBITDA. If there is a strong relationship it allows for an easier projection of EBITDA in the future. R 2 =.693

10. 10 Time Series Analysis Revenue – Medicare Spending Correlation: 0.98 Revenue – Medicaid Spending Correlation: 0.86 Based off anticipated US government spending on Medicare and Medicaid (which can be found from records and projections from the US Government Office of Budget and Administration), we can reason that a comparable growth rate will be found in projected revenue of the generic drugs industry Projected Revenue (Billion $) = 6.601 + 0.112*Medicare – 0.68*Medicaid Spending (Billion $) Accurate within +/- 3 Billion $ Source: Office of Management and Budget, IBISworld & BUFC Analysis

11. 11 Recycled Steel: Weak Industry CompanySCHN RecommendationNeutral / Negative Although prices are raising, much of the recycled steel success hinges on Chinese exports. China’s Steel industry is becoming more independent and vertically integrated, cutting out the need for Domestic Steel suppliers. With major turmoil in the Euro Zone, many companies are facing increased levels of inventory with minimal potential for growth.

12. Sample Industry Comparable – Healthcare © Leverage Academy 2009. All rights reserved. 12

13. Trailing twelve months (ttm) © Leverage Academy 2009. All rights reserved. 13 Trailing twelve months is the company’s performance over the twelve months before their last filing. Ttm is calculated to show a more recent picture of the financials of the company. Since the quarterly reports does not include, the full year so it might be skewed because of seasonality or events. This is not done for the balance sheet, since the balance sheet only reflects one point in time. You calculate ttm by adding their performance in their latest quarter, you add their last full year performance and then subtract out last years corresponding quarter. Ttm calculation Most Recent Quarter(s) + Most Recent Year – Last years Corresponding Quarter(s)

14. 14 E-Mail Rough Drafts  Google Doc For Presentation Sign Ups: December 3 rd (Monday) 6:00pm-8:00pm. December 5 th (Wednesday) 6:00pm-8:00pm  Top Presentations selected by the judging professors (Top 3-4) Finals” December 12 th (Wednesday) 6:00pm-7:00pm  E-Mail the work you have completed to date to Xun and I

15. 15 Fall 2012 Calendar (IR Team Deliverables) Senior Analyst Forum #5 November 11 th Deliverable #8 : Finished intro, trends. Adding risks and any SA unique aspects November 11 th Review of Rough Drafts (Not In Sector Meetings) November 11 th – 18 th General Meeting #10 Wednesday 6:00pm PHO 206 (1 Hour) November 14 th

16. 16 Fall 2012 Calendar (IR Team Deliverables) Deliverable #9: Rough draft of finished Industry Analysis, for E-Board review Before Thanksgiving Deliverable #10: Practice presentations in sector meetings & final edits Individual sector meeting times November 25 th – 30 th General Meeting #11 Wednesday 6:00pm (1 Hour) November 28 th BUFC Event #4: Brandy Peete’s Fall Networking Event. Send VPs of IR Top Junior Analyst nominations November 30 th Deliverable #11: Final PowerPoint due (prepare print- outs for presentations) Saturday 2:00pm via E-mail to VPs of IR December 1 st

17. 17 Fall 2012 Calendar (IR Team Deliverables) BUFC Event #5 : First Round Presentations (8 Industries) Tuesday 6:00pm SMG 105 (2 Hours) December 3rd BUFC Event #6: First Round Presentations (8 Industries) Wednesday 6:00pm SMG 105 (2 Hours) December 5 th Top 4 Presentations notified for final presentations Saturday 11:00am via E-mail from VPs of IR December 8 th General Meeting #12: Finalist Presentations, BUFC semester wrap-up December 12 th