1. Friday February 21 st, 2014 Lafayette College Investment Club

2. Meeting Agenda 1) Market Update 2) AT&T Pitch (BUY T, SELL VZ) 3) Financial Statement Overview 4) Announcements

3. Market Update By: Chris Ulyett and Ryan McCormick

4. Buy American ❖ Many analysts predict “Made in the U.S.A.” ❖ Three Reasons ❖ China’s Economy ❖ U.S energy independence ❖ Skills and innovation

5. Labor Market ❖ U.S. workers are slowly getting bolder and shedding caution ❖ Quitting rate reported at 1.8% November 2013 ❖ Average quitting rate is 2.1% ❖ Most Recent low in quitting rate 1.2% in September 2009

6. Suspension of Debt Ceiling ❖ Extends the government's borrowing authority until March 2015 ❖ The first time since 2009 Congress has passed a "clean" debt limit.

7. Farm Bill Added insurance for agriculture sector $7 Billion in aid for ranchers and farmers nation wide $8 billion cut to food stamps

8. Changes At Coca Cola CFO Gary Fayard will retire To be replaced by veteran Kathy Waller Waller announced $1bn cut in costs this year in response to down quarter

9. Market Ends at week high in DOW and S&P 500 DOW gained 0.6% S&P 500 gained 0.6% Eurofirst 300 gained 0.01% Shanghai dropped 0.18% Gold down 0.3% to $1,317

10. Buy AT&T Dump Verizon NYSE: T, VZ Industry: Telecom Services

11. Company Descriptions Multinational broadband & telecommunications Operates in wireless, wireline, broadband television subscription Share an oligopoly with each other

12. Performance in Sector Combined AT&T and Verizon dominate the mobile wireless and broadband market. FCC reports that the companies enjoy 60% of revenue

13. So, why sell Verizon (VZ)? Overvalued. P/E (ttm) of 12.03 (but isn’t this good? Not in this case!) Investing too much in wireless market. Single focused. Only owns 55% of its most lucrative division VZ Wireless Get out now, yield benefit. VZ (FiOS) is underperforming to keep up with AT&T (U- Verse) wireline

14. Overview: Why Invest in AT&T? AT&T invested in future growth. Long-term dividends! “Our dividend is clearly a sacred matter for us.” CFO John Stephens Dominant in wireline business (broadband and video offerings). Forward thinking management team: overseas investments.

15. The Numbers: Why Invest in AT&T? 29 consecutive years of increased dividends. Now at 5.6% CEO Randall Stephenson has a vision for growth in European market Currently stock is discounted because VZ is perceived to have stronghold. Expected 6.5% earnings growth. Trading at lower P/E (ttm) ratio (9.79) and higher yield than Verizon

16. Financial Statements Othman Guennoun Irvin Cedillo February 14 th, 2014

17. The 4 Financial Statements Income Statement Statement of Retained Earnings Balance Sheet Statement of Cash Flow They all flow into one another

18. Why are they used? Important reasons: Show performance A mean for investors to measure a company Helps the managing team make important decisions

19. The Income Statement Basic Formula: Revenues – Expenses = Net Income or Net Loss

20. The Statement of Retained Earnings Basic Formula: Beginning Retained Earnings + /– Net Income – Dividends Declared = End Retained Earnings Net Income from the Income Statement

21. The Balance Sheet Other name: Statement of Financial Position Snapshot of a company on a specific day Basic Formula: Assets = Liabilities + Stockholder’s Equity

22. Assets: Economic resources to benefit the future of the company Current: Cash, Supplies, Inventory Non Current: Land, Equipment, and Buildings Liabilities: The company’s debt Current: needs to be paid back within a year Long Term: over a year Equity: Retained Earnings, Common Stock, APIC

23. Statement of Cash Flow Operating Activities Investing Activities Financial Activities Shows what the company is doing throughout years. Expand? Net Income in all 4 statements

24. Ratios Current Ratio Use ratios to compare companies (competitors)

25. Important Announcements 1) Potential Speakers coming …. Bennett Goodman Charles Chesebrough 2) Fleece Trivia Contest Currently designing a trader like fleece to be given to select students who answer correct questions 3) Board Meetings Will Be held in 12:15 Simon Lobby If you would like to be added to chain email please see me after meeting (board or member) 4) For next week look at BAC we are going to pitch a sell