University of Utah Top Jobs in Finance Career Conference March 1, 2008 Strictly Private and Confidential

Table of Contents Getting Hired 5. The Analyst Role 3. What is Investment Banking? 2. Introduction 1.

1. Introduction

Introduction Analyst Global Health Care Group Graduated from the University of Utah, DESB in May 2006 Former VP, Top Jobs in Finance Honor Society Member of 2005–2006 Student Investment Fund Participant in 2006 New York Trip Lewis M. Allen Analyst Global Consumer Group Graduated from the University of Utah, DESB in May 2007 Former President, Top Jobs in Finance Honor Society Member of 2005–2006 Student Investment Fund Participant in 2007 New York Trip Lee McClure Analyst Latin America Group Graduated from the University of Utah, DESB in May 2007 Former Secretary, Top Jobs in Finance Honor Society Member of 2006–2007 Student Investment Fund Participant in 2007 New York Trip Burton J. Flynn 1

Analyst

Global Health Care Group

Graduated from the University of Utah, DESB in May 2006

Former VP, Top Jobs in Finance Honor Society

Member of 2005–2006 Student Investment Fund

Participant in 2006 New York Trip

Analyst

Global Consumer Group

Graduated from the University of Utah, DESB in May 2007

Former President, Top Jobs in Finance Honor Society

Member of 2005–2006 Student Investment Fund

Participant in 2007 New York Trip

Analyst

Latin America Group

Graduated from the University of Utah, DESB in May 2007

Former Secretary, Top Jobs in Finance Honor Society

Member of 2006–2007 Student Investment Fund

Participant in 2007 New York Trip

is the No.1 Global Bookrunner (2007) Source: Wall Street Journal and Thomson. Tuesday, January 2, 2008. Last year, Citi continued to dominate and maintained No.1 position as underwriter of global stocks and bonds. 2 THE WALL STREET JOURNAL YEAR-END REVIEW OF MARKETS & FINANCE R18 Wednesday, January, 2, 2008 Who's No. 1? Leading stock and bond underwriters, by 2006 proceeds Global Stocks and Bonds U.S. public, Rule 144a, domestic and int’l equity and euro-market issues, ranked by 2207 proceeds ’ - Global Equity and Equity - Related U.S. public, Rule 144a, domestic and international equity and equity-related markets Global Debt U.S. public, Rule 144a and euro-market issues - Loan - Book Managers Syndicated loans in the U.S., ranked by 2007 amounts Global Junk Bonds Corporate high – yield debt in U.S. and int’l markets, - ranked by 2006 proceeds

is the No.3 Global M&A Advisor (2007) Source: Securities Data Company, Inc. Note: Ranks based on M&A volume for deals rank-eligible from January 1, 2007–December 31, 2007. Europe includes Middle East and Africa. 3 Europe US Global 529.1 684.8 791.0 674.6 663.5 748.0 550.1 Volume ($bn) 9 6 407.8 7 885.1 4 7 397.1 6 989.0 2 9 269.1 5 1,000.7 5 4 516.3 4 1,1087.7 6 3 517.2 3 1,141.5 1 2 625.4 2 1,333.4 3 1 768.9 1 1, 424.1 Rank Rank Volume ($bn) Rank Volume ($bn)

2. What is Investment Banking?

What is an Investment Bank? Investment Banking Capital raising Debt Equity Strategic advisory services Mergers and acquisitions Restructuring Takeover defense An “investment bank” typically consists of three distinct, but related businesses: Sales and Trading Distribution and execution arm of the investment bank Sells and trades stocks and bonds Manages the firm’s risk and makes markets for the securities underwritten by the investment bank Research Analysis and recommendations of stocks and bonds Includes company coverage and sector coverage 4

Investment Banking

Capital raising

Debt

Equity

Strategic advisory services

Mergers and acquisitions

Restructuring

Takeover defense

Sales and Trading

Distribution and execution arm of the investment bank

Sells and trades stocks and bonds

Manages the firm’s risk and makes markets for the securities underwritten by the investment bank

Research

Analysis and recommendations of stocks and bonds

Includes company coverage and sector coverage

Structure of an Investment Bank 5 Chinese Wall Investment Banking Division Clients Research Debt Equity Sales and Trading Investing Public Product Groups Coverage Groups Capital Markets Bank Loans Inv. Grade Debt High Yield Equity Private Client Services Private Banking Merchant Banking Asset Management

Research

Debt

Equity

Capital Markets

Bank Loans

Inv. Grade Debt

High Yield

Equity

Private Client Services

Private Banking

Merchant Banking

Asset Management

Leading Domestic Investment Banks Global/ “Bulge Bracket” Regional 6

What Exactly Do Investment Bankers Do? 7 A banker will provide any service that generates fees for the bank. He’ll even shine your shoes for you if the fees are high enough. (On second thought, he wouldn’t do it personally but he’d have an Analyst do it!). Capital Structuring Strategic Advisory Capital Raising Structure Deals Valuation “ Any service a man in a suit can provide”

Investment Banking—Core Products Advisory Divestitures Acquisitions Mergers Restructuring Defense Strategy Fixed Income Investment Grade Debt High Yield Bridge Loans Syndicated Loans Derivatives Securitization Liability Management Equity IPOs Secondary Equity Offering Preferred Convertibles Derivatives 8 Initial Public Offering Joint Bookrunning Manager $75mm December 2006 Follow-on Equity Offering Joint Bookrunning Manager $112mm November 2006 Sale of Conor Medsystems $1.4bn November 2006 Senior Secured Credit Facility Joint Bookrunning Manager $18.8bn November 2006 Acquisition of HCA $32.7bn July 2006 Private Investor Group Senior Notes Joint Bookrunning Manager $2.0bn June 2006 Convertible Offering Joint Bookrunning Manager $4.0bn April 2006 Convertible Offering Joint Bookrunning Manager $5.0bn February 2006 Acquisition of Schering AG $19.7bn March 2006 Acquisition of Well Choice $6.5bn September 2005 Yen Denominated Investment Grade Offering Joint Bookrunning Manager $970mm February 2006 Investment Grade Debt Offering Joint Bookrunning Manager $3.0bn February 2006

Advisory

Divestitures

Acquisitions

Mergers

Restructuring

Defense

Strategy

Fixed Income

Investment Grade Debt

High Yield

Bridge Loans

Syndicated Loans

Derivatives

Securitization

Liability Management

Equity

IPOs

Secondary Equity Offering

Preferred

Convertibles

Derivatives

IBD Organizational Structure Investment Bank (Corporate Finance) Industry Coverage Groups Consumer Products Financial Institutions Telecom Power and Energy Energy Real Estate Paper and Packaging Lodging Financial Entrepreneurs Media Automotive Health Care General Industrials Chemicals Product Groups Equity Capital Markets Restructuring Debt Capital Markets Mergers and Acquisitions Lewis Lee Burton Regional Coverage Latin America 9

Structure of the Deal Team Client Investment Banking Coverage Officer IBD Support Accountants Director / Vice President Associate Capital Markets Compliance/ Legal Attorneys Research Analyst 10 The Coverage Officer has primary client responsibility and Associate and Analyst ensure that all members of the working party, both internal and external, are informed and working together.

Responsibilities of the Deal Team Associate Transaction execution Has to answer to the MD/VP if something the Analyst does is messed up Important part of coverage team Supervises valuation and financial analysis Assists on due diligence Drafts contracts and other legal documents Managing Director Manages client relationship Transaction coordination Leads the transaction process Director/Vice President Important part of coverage team Team Leader Transaction Supervisor Coordinates contracts with different teams in the transaction (lawyers, accountants) Responsible for the day-to-day execution of the transaction (due diligence, and review contracts and other legal documents) Reviews valuation and financial analysis Analyst Performs valuation and financial analysis Important part of coverage team Works on legal and other documentation Industry and company research and analysis Supports senior team members in the various tasks 11

Associate

Transaction execution

Has to answer to the MD/VP if something the Analyst does is messed up

Important part of coverage team

Supervises valuation and financial analysis

Assists on due diligence

Drafts contracts and other legal documents

Managing Director

Manages client relationship

Transaction coordination

Leads the transaction process

Director/Vice President

Important part of coverage team

Team Leader

Transaction Supervisor

Coordinates contracts with different teams in the transaction (lawyers, accountants)

Responsible for the day-to-day execution of the transaction (due diligence, and review contracts and other legal documents)

Reviews valuation and financial analysis

Analyst

Performs valuation and financial analysis

Important part of coverage team

Works on legal and other documentation

Industry and company research and analysis

Supports senior team members in the various tasks

3. The Analyst Role

What Does an Analyst Actually Do? Responsibilities Preparing presentations (Pitch Books, Management presentations, roadshow presentations) Financial modeling (LBO, Combo, Standalone, Acc/Dil, etc.) Valuation work (Comps, Precedents, DCF) Industry research (Educating the clients on current market dynamics in their space, current multiples, etc.) Deal coordination (Internal, legal, roadshow, client, printer, etc.) Event and travel management (Closing event coordination, last-minute travel arrangements, etc.) Package delivery service (Drive all over Manhattan delivering books) Almost anything else a Senior Banker could conjure up Demands Very, very long hours (e.g. 100 hours / week) (Total and complete devotion to the job) Unpredictable hours (Unable to ever make plans) Can be very stressful at times Rewards Excellent pay Ability to travel (Nice hotels, limos, private jets, etc) Learn a ton Excellent exit opportunities 12 Stare at a computer screen for an absurd amount of hours on end and try to stay sane.

Responsibilities

Preparing presentations (Pitch Books, Management presentations, roadshow presentations)

Financial modeling (LBO, Combo, Standalone, Acc/Dil, etc.)

Valuation work (Comps, Precedents, DCF)

Industry research (Educating the clients on current market dynamics in their space, current multiples, etc.)

Deal coordination (Internal, legal, roadshow, client, printer, etc.)

Event and travel management (Closing event coordination, last-minute travel arrangements, etc.)

Package delivery service (Drive all over Manhattan delivering books)

Almost anything else a Senior Banker could conjure up

Demands

Very, very long hours (e.g. 100 hours / week) (Total and complete devotion to the job)

Unpredictable hours (Unable to ever make plans)

Can be very stressful at times

Rewards

Excellent pay

Ability to travel (Nice hotels, limos, private jets, etc)

Learn a ton

Excellent exit opportunities

Modeling Valuation Models “ Comp” Models Precedent Transactions Discounted Cash Flows (DCF) Standalone Modeling In depth model analyzing and projecting financials Merger Modeling “ Mini-Combo” “ Super Mini-Combo” “ Full Combo’s” LBO Modeling Financing Models Source: Company filings, First Call and Wall Street Research. Market data as of 12/20/06. Kraft Ten Year Discounted Cash Flow Analysis Terminal EBITDA Multiple Approach 13 Modeling takes up a large portion of the Analysts time. Once an Analyst is up the learning curve, modeling in excel becomes second nature. Terms like macros, hotkeys, shortcuts and the infamous “F2—Esc” routine become the Analyst’s best friends. JNJ BDX BSX BAX ABT ZMH SYK MDT 1.68 x 1.58 x 2.09 x 1.38 x 1.72 x 1.32 x 1.15 x 1.64 x 2007 P/E/Growth 10.0 % 12.0 % 10.1 % 13.0 % 10.0 % 15.0 % 20.0 % 14.0 % Five-year. Proj. Growth 15.3 17.0 16.6 15.9 15.3 17.5 19.4 20.0 CY 2008E P/E 16.8 19.0 21.1 18.0 17.2 19.9 23.0 22.9 CY 2007E P/E 9.6 9.7 9.9 10.5 10.7 10.7 11.3 12.4 FV / CY 2008E EBITDA 10.3 x 10.7 x 11.0 x 11.2 x 11.6 x 12.0 x 13.1 x 14.0 x FV / CY 2007E EBITDA 29.8 % 26.2 % 30.8 % 21.4 % 27.4 % 39.5 % 26.8 % 39.9 % % EBITDA Margin 16,219 1,419 2,688 2,110 6,123 1,298 1,305 3,624 CY 2007E EBITDA $54,392 $5,415 $8,739 $9,849 $22,338 $3,286 $4,872 $9,087 CY 2007E Revenue 196,296 18,938 30,856 30,771 82,836 18,593 22,152 65,407 Firm Value $193,237 $18,661 $24,067 $30,030 $74,444 $18,765 $23,222 $62,978 Equity Value 94.7 % 98.2 % 61.4 % 95.3 % 96.9 % 100.0 % 100.0 % 90.9 % % of 52-week High $65.47 $72.49 $16.27 $45.01 $47.96 $77.50 $55.45 $54.11 Price Projected Fiscal Year Ending December 31 $14,213.6 Terminal EBITDA $7,646.8 $6,949.6 $6,402.3 $5,889.2 $5,264.0 $,4,816.3 $4,178.8 $3,790.8 $3,625.9 $3,282.0 Unlevered Free Cash Flow (2,016.3) (2,030.3) (1,934.1) (1,842.6) (1,898.0) (1,808.6) (1,939.0) (1,848.0) (1,565.8) (1,492.7) Capital Expenditure (40.0) (38.8) (37.6) (36.4) (35.3) (34.2) (33.2) (32.1) (31.1) (30.2) Changes in Net Working Capital 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 550.0 Amortization of Intangibles 2,098.3 1,963.4 1,831.3 1,705.4 1,580.7 1,457.2 1,332.2 1206.0 1,092.2 990.3 Depreciation $7,054.8 $6,505.2 $5,992.7 $5,512.8 $5,066.5 $4,652.0 $4,268.7 $3,915.0 $3,580.7 $3,264.6 Earning Before Interest (4,510.5) (4,159.1) (3,831.4) (3,524.6) (3,239.3) (2,974.2) (2,729.2) (2,503.0) (2,289.3) (2,087.2) Taxes 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% 39.0% Marginal Tax Rate $11,565.3 $10,664.3 $9,824.1 $9,037.4 $8,305.2 $7,626.2 $6,997.9 $6,418.0 $5,869.9 $5,351.8 Earning Before Interest and Taxes 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 ($ in Millions)

Valuation Models

“ Comp” Models

Precedent Transactions

Discounted Cash Flows (DCF)

Standalone Modeling

In depth model analyzing and projecting financials

Merger Modeling

“ Mini-Combo”

“ Super Mini-Combo”

“ Full Combo’s”

LBO Modeling

Financing Models

Presentations Pitch Books Financial Documents Prospectuses Investor Presentations Roadshow presentations Board Presentations Fairness opinions Commitment memo’s 14 Pitchbooks are the bankers ammunition for convincing the management that we are the best choice to manage / underwrite the given deal. An army of Analysts pumps these bad boys out.

Pitch Books

Financial Documents

Prospectuses

Investor Presentations

Roadshow presentations

Board Presentations

Fairness opinions

Commitment memo’s

Presentations (Cont’d) 15

Analyst Grandeur Traveling E.g. Limo’s, private jets, nice hotels Excellent Pay Town cars and free meals when working late or on the weekends Tremendous exit opportunities Private Equity, Hedge Funds, Third Year in IBD Deal toys and Lucite’s for closing deals Opportunity to meet the client 16 Analysts work crazy hours sometimes with little or no sleep and lots of stress. It’s not all bad though, the pay isn’t half bad and you get to travel once you start doing deals.

Traveling

E.g. Limo’s, private jets, nice hotels

Excellent Pay

Town cars and free meals when working late or on the weekends

Tremendous exit opportunities

Private Equity, Hedge Funds, Third Year in IBD

Deal toys and Lucite’s for closing deals

Opportunity to meet the client

4. Getting Hired

How Do You Get a Job in Investment Banking? Understand the job description and its required skills Talk to as many people as possible Work hard to get top grades and join student organizations Take honors finance courses Join the student investment fund and / or the venture fund Don’t waste the summers Chase investment banking internships (Makes getting hired full-time a lot easier) Stay away from summer school going into your Junior and Senior years unless absolutely necessary Try to gain relevant experience through internships in related fields if you cannot get an i-banking summer internship E.g. Private wealth management, corporate finance, etc. JUST GET SOMETHING!!! Customize resume to reflect the required skill set Ask to see the resumes of current Analysts that you know (i.e. those of us in the room) Be Aggressive Don’t be intimidated Be persistent Don’t let anyone tell you that you’re not qualified or cannot get the job “If you want something, go get it, period.” 17

Understand the job description and its required skills

Talk to as many people as possible

Work hard to get top grades and join student organizations

Take honors finance courses

Join the student investment fund and / or the venture fund

Don’t waste the summers

Chase investment banking internships (Makes getting hired full-time a lot easier)

Stay away from summer school going into your Junior and Senior years unless absolutely necessary

Try to gain relevant experience through internships in related fields if you cannot get an i-banking summer internship

E.g. Private wealth management, corporate finance, etc. JUST GET SOMETHING!!!

Customize resume to reflect the required skill set

Ask to see the resumes of current Analysts that you know (i.e. those of us in the room)

Be Aggressive

Don’t be intimidated

Be persistent

Don’t let anyone tell you that you’re not qualified or cannot get the job

“If you want something, go get it, period.”

Preparation is the Key Preparation is the Key to Success Know the Industry Know the Job Know What Banks Want Know Your Story Practice Your Story Master the Mechanics Distinguish Yourself 18

Know the Industry and the Job 19 Know what you will be doing Know what you are getting yourself into The Analyst Know why the firm you are interviewing with is unique (e.g. Bulge bracket, mid-market, culture, group selection process, training, career opportunities, etc.) The Firm Know the differences among investment banking, sales and trading, research and asset management Know how investment banking, consulting and startups differ and what each industry looks for Investment Banking Be cognizant of recent developments in the markets Understand basic financial concepts and business fundamentals The Markets

Know what you will be doing

Know what you are getting yourself into

Know why the firm you are interviewing with is unique (e.g. Bulge bracket, mid-market, culture, group selection process, training, career opportunities, etc.)

Know the differences among investment banking, sales and trading, research and asset management

Know how investment banking, consulting and startups differ and what each industry looks for

Be cognizant of recent developments in the markets

Understand basic financial concepts and business fundamentals

Know What Banks Want Intelligence Drive and ambition Communications skills Quantitative ability Technical aptitude Leadership ability Risk-taker Obsessive curiosity Open-mind Creativity Ability to work well in teams A sense of humor Qualities Investment Banks Seek … … And What it Takes to Succeed Once You’re in 20 I-banks wants hard working, motivated individuals with a great attitude.

Intelligence

Drive and ambition

Communications skills

Quantitative ability

Technical aptitude

Leadership ability

Risk-taker

Obsessive curiosity

Open-mind

Creativity

Ability to work well in teams

A sense of humor

Know Your Story 21 What Banks Want Your Experiences Specific Accomplishments Examples of Your Strengths Why You Are What Banks Want

Master the Mechanics: The Resume Highlight your accomplishments Keep it to one page Be clear and succinct Always use layman’s terms Be able to “tell a story” for every line in your resume Do not lie or exaggerate Use an easy to read format Absolutely no spelling and formatting errors Avoid gimmicks (e.g., logos) Include GPA 22

Highlight your accomplishments

Keep it to one page

Be clear and succinct

Always use layman’s terms

Be able to “tell a story” for every line in your resume

Do not lie or exaggerate

Use an easy to read format

Absolutely no spelling and formatting errors

Avoid gimmicks (e.g., logos)

Include GPA

Master the Mechanics: The Interview Know your story Specific accomplishments, examples of your strengths Why you are what banks want Be prompt Dress appropriately Be polite to everyone Maintain good eye contact Show confidence Use good posture Be composed, confident and articulate Show enthusiasm without being hyperactive Ask questions to show your interest Try to match your interviewer’s style and tone 23

Know your story

Specific accomplishments, examples of your strengths

Why you are what banks want

Be prompt

Dress appropriately

Be polite to everyone

Maintain good eye contact

Show confidence

Use good posture

Be composed, confident and articulate

Show enthusiasm without being hyperactive

Ask questions to show your interest

Try to match your interviewer’s style and tone

Interview Assessments Structure and Assessment of the Interview Personality / Qualifications Ability to handle pressure Communication skills Industry commitment—why Investment Banking? Must be concise and compelling; must have own story Understand the industry Understand bank differentiation Technical—Finance / Accounting Explain interaction of all of the financial statements How do you value a company? What is free cash flow? Q&A Session—critical final moments In the questions you ask, seem genuinely interested in the interviewer / position / firm 24

Structure and Assessment of the Interview

Personality / Qualifications

Ability to handle pressure

Communication skills

Industry commitment—why Investment Banking?

Must be concise and compelling; must have own story

Understand the industry

Understand bank differentiation

Technical—Finance / Accounting

Explain interaction of all of the financial statements

How do you value a company?

What is free cash flow?

Q&A Session—critical final moments

In the questions you ask, seem genuinely interested in the interviewer / position / firm

Down the Road… Two Year Program Third Year Opportunity Promotion to Associate Business School Private Equity Venture Capital Hedge Fund Corporate Development Other? 25

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