DUSTIN EMMONS WILLIAM HERTLEIN FEBRUARY 11, 2008 Colorado Stock Selection

Introduction: Colorado Companies Bloomberg Colorado Index  Price-weighted index of a range of Colorado Companies  100 Companies  Spread across all sectors  Financial (WU)  Materials (BLL)  Health Care (ARRY)  Energy (FST) How to select a stock?

Introduction: Eliminating Companies Criteria for Elimination  < $2,500,000 average daily volume  Lack of information  Will need or likely need access to capital markets  Difficult to understand revenue streams  Change in state of incorporation  Poor historical performance (Earnings, CF)

Final Three Companies Newmont Mining Corp (NEM)  Gold (Materials) Royal Gold Inc (RGLD)  Gold (Materials) CSG Systems International Inc (CSGS)  Business Software and Services (Technology)

Newmont Mining Corp (NEM) Leading gold producer and miner  Active operations on five continents Active in exploration and acquisition of gold properties Pros  High relative GM and OM– 49% and 27%  Gold reserves of 86.5 million equity ounces Cons  High P/E –  Growth opportunities  Risk Factors – economy and price of gold

Royal Gold Inc (RGLD) Earnings derived from precious metals royalties  Large portfolio of active, developing, and exploration focused royalties around the globe  Gold, silver, copper, lead, and zinc Pros  Large FCF to Sales – 57.52%  No inventory and low PP&E Cons  High P/E –  Risk Factors – economy, price of gold, and contract

CSG Systems International Inc (CSGS) Provides outsourced applications to facilitate customer interaction  Set-up and activation of customer accounts, sales support, order processing, customer billing, etc. Focus on North American cable and Direct Broadcast satellite communications markets Pros  Recent earnings exceeded expectations  Year-over-year growth was 13% (2008)  Expanding to service other industries

Comparative Performance

Industry Overview Business Software and Services  Provide customized outsourced services to companies  Data processing, account management, customer service  Companies still dedicated to spending on IT outsourcing  Cutting costs to improve bottom line  Greater efficiency  Outperformed the market (S&P 500) in 2008  Steady but at a slightly more muted pace  Average growth of 4-8% for 2008

Industry and Market Performance Industry outperformed the market (S&P 500) in ‘08 CSGS outperformed the market and industry in ‘08 Source: Google Finance

Industry Competitors Closest Competition:  DTS Systems Inc (DST  Global Payments (GPN)  Amdocs Ltd (DOX) Success Indicators  Operating markets demonstrate growth opportunities  Financial vs. Security vs. Cable and Satellite Broadcast  Low expenses (i.e. maintaining a high operating margin)

Industry Competitors

Comparative Performance