Company Report May 7, 2012 Facebook, Inc. Facebook - Initiating Coverage with a Buy Rating and $46 PT Buy FB Price NA Price Target $46.00 Our Call Ahead of Facebook’s (FB) highly anticipated IPO on Friday, May 18 (expected price range of $28 - $35), we are initiating coverage with a Buy rating. Our 1- year/2-year target prices are $46 (30x 2013 EBITDA estimate of $3.8B) and $59 (30x 2014 EBITDA estimate of $5.0B), respectively. The Next Google? FB’s highly coveted Reach, Engagement, Relevance and Social Context. Just like Google did less than a decade ago, we believe Facebook is disrupting the worldwide advertising market (~$600B), particularly its $68B sub- segment of online advertising (a market that is expected to reach $120B by 2015 or CAGR of 13%). Driven by 1) Facebook’s leadership position in social media; 2) its unparalleled reach (900 monthly active users); 3) highly engaged audience (526M daily active users); 4) growing ARPU (average revenue per user); 5) mobile monetization potential; and 6) the wild card—China, we think FB can more than triple its revenue and EBITDA over the next 4 to 5 years. Our estimates would be achievable if FB increases its share of online advertising by only 300bps from 5% in 2011 to close to 8% by 2016. In addition, we have very little contribution from mobile and China modeled currently and as such our estimates could prove conservative. Together, Mobile and China could add $1.5B in incremental revenue and $600 million in incremental EBITDA by 2015. Additionally, the market for virtual/digital goods is expected to reach $14B by 2016, up from $9B in 2011 (CAGR of 9%), according to NPD In-Stat. For advertisers, FB differentiates itself with its ability to provide a highly targeted audience (with 90% to 95% accuracy) and in a social context, which are highly desirable features. Mobile advertising and China opportunities. The mobile advertising market is currently relatively small (was $1.5B in 2010) but is expected to grow rapidly and reach $18B by 2015 or a CAGR of 64%, according to IDC. With 488M users accessing FB through mobile devices, the company already has the reach on mobile. Facebook was the most downloaded app on Android and iPhone in the month of January 2012. We see mobile monetization as a significant long-term growth opportunity for FB, but with some initial challenges. In addition, if FB is able to enter China, which has 23% of the world’s internet users, its growth could accelerate. The potential China opportunity is not reflected in our estimates but we think could add $400 to $600M in incremental revenue and $125M to $300M in incremental EBITDA. That said, clearly this opportunity is neither a given nor without its own unique set of challenges/hurdles. Interactive Entertainment / Internet Arvind Bhatia, CFA (214) 702-4001 [email protected]Brett Strauser (214) 702-4009 [email protected]Company Data Rating Buy Price NA Price Target $46.00 52-Week Range NA - NA Market Capitalization (M) NA Avg. Daily Vol. (000) NA Dividend $0.00 Revenue ($M) 2011A 2012E 2013E FY 3,711.0 5,007.6 6,297.0 EBITDA (M) 2011A 2012E 2013E FY 2,297.0 2,871.4 3,772.8 FYE Dec 2011A 2012E 2013E (Curr) (Curr) (Curr) EPS ($) Q1 (Mar) - 0.13A 0.14 Q2 (Jun) - 0.13 0.17 Q3 (Sept) - 0.13 0.17 Q4 (Dec) - 0.17 0.21 FY EPS - 0.56 0.69 Price Performance Chart Data Not Available Source: FactSet Important Disclosures regarding Price Target Risks, Valuation Methodology, Regulation Analyst Certification, Investment Banking, Ratings Definitions, and potential conflicts of interest begin on Page I of the Appendix Section. 800 Shades Creek Parkway Suite 700 Birmingham, AL 35209 205-949-3500 Sterne, Agee & Leach Inc. is Member NYSE, FINRA, SIPC
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Company ReportMay 7, 2012
Facebook, Inc.Facebook - Initiating Coverage with a Buy Rating and $46 PT
BuyFBPrice NA
Price Target $46.00
Our CallAhead of Facebook’s (FB) highly anticipated IPO on Friday, May 18 (expectedprice range of $28 - $35), we are initiating coverage with a Buy rating. Our 1-year/2-year target prices are $46 (30x 2013 EBITDA estimate of $3.8B) and $59(30x 2014 EBITDA estimate of $5.0B), respectively.
The Next Google? FB’s highly coveted Reach, Engagement, Relevance andSocial Context. Just like Google did less than a decade ago, we believe Facebook isdisrupting the worldwide advertising market (~$600B), particularly its $68B sub-segment of online advertising (a market that is expected to reach $120B by 2015or CAGR of 13%). Driven by 1) Facebook’s leadership position in social media;2) its unparalleled reach (900 monthly active users); 3) highly engaged audience(526M daily active users); 4) growing ARPU (average revenue per user); 5) mobilemonetization potential; and 6) the wild card—China, we think FB can more thantriple its revenue and EBITDA over the next 4 to 5 years. Our estimates wouldbe achievable if FB increases its share of online advertising by only 300bps from5% in 2011 to close to 8% by 2016. In addition, we have very little contributionfrom mobile and China modeled currently and as such our estimates could proveconservative. Together, Mobile and China could add $1.5B in incremental revenueand $600 million in incremental EBITDA by 2015. Additionally, the market forvirtual/digital goods is expected to reach $14B by 2016, up from $9B in 2011(CAGR of 9%), according to NPD In-Stat. For advertisers, FB differentiates itselfwith its ability to provide a highly targeted audience (with 90% to 95% accuracy)and in a social context, which are highly desirable features.
Mobile advertising and China opportunities. The mobile advertising market iscurrently relatively small (was $1.5B in 2010) but is expected to grow rapidlyand reach $18B by 2015 or a CAGR of 64%, according to IDC. With 488Musers accessing FB through mobile devices, the company already has the reach onmobile. Facebook was the most downloaded app on Android and iPhone in themonth of January 2012. We see mobile monetization as a significant long-termgrowth opportunity for FB, but with some initial challenges. In addition, if FB isable to enter China, which has 23% of the world’s internet users, its growth couldaccelerate. The potential China opportunity is not reflected in our estimates butwe think could add $400 to $600M in incremental revenue and $125M to $300Min incremental EBITDA. That said, clearly this opportunity is neither a given norwithout its own unique set of challenges/hurdles.
Important Disclosures regarding Price Target Risks, Valuation Methodology, Regulation Analyst Certification,Investment Banking, Ratings Definitions, and potential conflicts of interest begin on Page I of the Appendix Section.
800 Shades Creek ParkwaySuite 700Birmingham, AL 35209205-949-3500Sterne, Agee & Leach Inc. is Member NYSE, FINRA, SIPC
TABLE OF CONTENTS
FINANCIAL MODELING FRAMEWORK………………………………………………..3
VALUATION ANALYSIS……………………….…………………………………………..5
KEY INVESTMENT POSITIVES………………………………..…………………………6
KEY INVESTMENT RISKS……………………………………………………………….16
COMPANY OVERVIEW…………………………………………………………………..19
FINANCIAL STATEMENTS………………………………………………………………23
TRENDS……………………………………………………………………………………..27
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May 7, 2012
IPO Details
Facebook is expected to sell 337.4M shares in its IPO at a price range of $28 to $35 per share.
This includes 180M new shares and 157M existing insider shares. The company expects to
receive $5.6B at the midpoint of the potential price range. If the IPO is priced at the upper end
of the price range and the over- allotment option is exercised (an additional 6M new shares,
44.6M existing shares), the gross proceeds to the company could be $6.5 billion. Founder and
CEO Mark Zuckerberg will exercise outstanding stock options of 60M shares, and of this, he
will sell 30.2M shares to satisfy taxes related to the above option exercise. We estimate the
total number of shares outstanding (fully diluted) post the IPO will be 2.74 billion. In other
words, the company’s post-money market capitalization based on the IPO price range is $77B
to $96B.
Risks
Key risks to FB include 1) slower-than-expected growth; 2) competitive threats from
companies like Google; 3) regulatory risks; 4) risks associated with entering new international
markets, etc.; 5) regulatory/legislative changes that may limit Facebook’s ability to provide
user information to advertisers, etc. In addition, we have not had a chance to interact with
management prior to this report, and as such, the report relies heavily on publicly available
data and our industry contacts. Also, IPOs are inherently risky given the stock has no history
of trading publicly.
Our Financial Modeling Framework
We believe over the next five years, FB can grow its revenue at a CAGR of at least 25% and
adjusted EBITDA (ex stock-based compensation) 25% to 30%. Additionally, we note our
model assumes only modest leverage on fixed costs. For the most part, our total operating
costs (ex stock-based compensation) are assumed to grow in line to slightly higher than
revenue growth. This is because we believe FB will continue to invest heavily in the coming
years to continually improve user experience. Said differently, we believe the underlying
earnings power and growth rates are somewhat muted by the near to intermediate
investments. Our 5-year (2011-2016) revenue CAGR of 25% is based on traffic (MAUs)
increasing 12% on average and the rest from higher ARPU over time.
Our financial modeling framework assumes:
A) Increasing internet user penetration worldwide.
B) Increasing Facebook penetration of internet users.
C) Increasing engagement of Facebook users.
D) Higher ARPU
E) Modest leverage on fixed costs.
The tables below show that at the end of 2011, Facebook had a worldwide penetration rate of
roughly 48% of internet users, including 66% in the U.S., 46% in Europe, 42% in Asia and
47% in the rest of the world. First, we expect the worldwide internet user base to grow at a
CAGR of 8% in the next 5 years. Second, we expect Facebook to achieve greater penetration
in each of its markets. We believe Facebook could achieve a worldwide penetration rate of
57% by 2016 (up 900 bps versus 2011), including 76% in the U.S., 56% in Europe, 52% in
Asia and 57% in the rest of the world.
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May 7, 2012
Combining the increased internet user base and the higher market penetration rates discussed
above implies Facebook can grow its MAUs to 1.5 billion by 2016, up from 845 million at the
end of 2011 or a CAGR of 12%. This is slower than the historical MAU growth simply due to
the law of large numbers. Facebook’s MAU growth in the past three years has averaged 80%,
including 148% in 2009, 69% in 2010 and 39% in 2011. Revenue growth over the same
period has averaged 139%. This has been result of several factors including the ability to
generate more ads, charge higher prices per ad and the benefit of payment and fee revenue
from developers since the implementation of the 30% tax on developers since 2010, etc.
Founded in 2004, Facebook is a social network that allows its users to connect with their
friends, family, acquaintances, favorite brands, organizations, and public figures, and allows
them to share and express their lives in various ways. Other beneficiaries of Facebook’s
services include developers and advertisers.
Developers can integrate with the Facebook platform through use of developments tools and
APIs to build personalized, social, and engaging products and tap into Facebook’s more than
900M users. Upon the successful integration of a third-party application or website with
Facebook, developers can leverage Facebook’s social distribution channels to drive traffic to
their own products. Facebook created a consistent payment mechanism for developers, giving
users a single payment account to be used for the purchase of virtual and physical goods
offered by third parties on the Facebook Platform. We believe the ease of use and security
offered by Facebook’s payment infrastructure increases a user’s propensity to purchase from a
third party, thereby increasing the total number of transactions on the Facebook platform. In
exchange for offering this payment mechanism, Facebook retains a negotiated fee from
developers (Roughly 30%, or similar to Apple’s iTunes/AppStore model [AAPL - $565.25 –
Buy, WU]).
Advertisers can engage with subsets of users on Facebook based on information users have
provided such as their age, location, gender, interests, and more. Advertisers can increase the
relevancy of their advertisements by leveraging the information users have provided to
Facebook. Facebook’s robust advertising engine allows advertisers to be highly specific
regarding their target audience. Advertisers can also incorporate social context into their
advertisements such as an endorsement from a user’s friend. Users may be more receptive to a
particular advertisement if they see that a friend is a fan of the brand or product being offered.
Advertisers also benefit from managing a Facebook Page, which provides a free, direct
communication channel with customers or potential customers. When an advertiser creates
content on its Facebook Page, users who have “liked” the page will receive the content on
their news feed.
Facebook is free for its users and generates revenue through advertising and through retaining
a portion of revenue generated by third-party developers on the platform. FB derived 82% of
its revenue from advertising in the most recent quarter, down from 87% in the year-ago
period. The other 18% was derived from payments from its partners such as Zynga and other.
FB received a 30% cut of its partner’s gross revenue generated on the FB platform. Zynga
represented 11% of the overall revenue for FB in the most recent quarter, down from 13% in
the year-ago period.
Key Products for Users
Timeline. Timeline is the name of the new and improved Facebook Profile page. The types of
information displayed on the timeline include a user’s interests, photos, education, work
history, relationship status, and contact information. A user can control the information share,
and with whom they want to share it.
News Feed. This is the continuously updated aggregation of stories about friends, business or
other pages a user is connected to on Facebook. It organizes updates chronologically. Types
of updates shown on a news feed include posts, photos, event updates, etc.
Photos and Videos. Facebook and its subsidiary, Instagram, are the most popular photo
uploading services on the web. Users can upload an unlimited number of high resolution
photos, create photo albums, and share them with the audience of their choosing. Users can
also upload and share videos. Users have control over privacy settings for uploaded content,
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May 7, 2012
making them visible to everyone or only select people. Users can tag friends in their photos
and videos, which then appends that photo or video to the tagged person’s profile.
Messages. Facebook’s messaging products include email, chat, and text messaging.
Groups. Facebook groups are shared pages for groups of users to discuss common interests,
post photos, or engage in other shared activities. Groups can control privacy settings to
specify whether the group is public or private.
Lists. Lists allow users to sub-divide and categorize their friend groups. This allows users to
reach or exclude certain people when they share information on Facebook.
Events. Events allow users to organize gatherings, manage invitations, and send event
notifications and reminders to their friends.
Places. This allows users to share their current location and see where their friends are. Users
can let their friends know where they are by “checking in” to places and tagging friends who
are with them. Users can also view comments their friends have made about places they visit.
Subscribe. Similar to Twitter, Subscribe allows users to follow the updates from people not
included in their list of friends, including celebrities and other public figures.
Ticker. Ticker is a live stream of the real-time activities of a user’s friends and the pages to
which a user is connected.
Notifications. This is Facebook’s alert system, informing a user of a new friend request,
message, or that they have been tagged in a photo, etc. Notifications are a key engagement-
driver for Facebook users.
Facebook Pages. A Facebook page is as public profile that allows anyone including artists,
public figures, businesses, brands, organizations, and charities to create a presence on
Facebook and engage with the Facebook community.
Key Products for Developers
Open Graph. The open graph gives developers a way to allow users of their app or website
to share their activities with their Facebook friends. An example of this integration is the way
Spotify gives users the option of letting their Facebook friends see what music they’re
listening to.
Social Plugins. Social plugins are another way for developers to integrate their sites/apps
with Facebook to benefit from the viral effects such an integration can provide. The term
plugin refers to the ease of development integration (i.e. plugins require developers to
incorporate only a single line of HTML code).
Like button. Gives users a 1-click method for sharing content from a third-party website to
Facebook for their friends to see.
Recommendations. This allows a website to display to Facebook users what their friends
have recommended.
Single sign-on registration and log-in. This allows users to long onto third-party websites
using their FB login credentials, eliminating the need to remember multiple usernames and
passwords.
Comments. This allows users to post their views, questions, and critiques on any piece of
content on a website.
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May 7, 2012
Payments. Facebook provides developers with an efficient and secure online payment
infrastructure. In exchange for offering this service, Facebook retains a 30% fee on all
transactions. To date, the majority of Facebook’s payments revenue has been generated by the
purchase of virtual goods in social games.
Apps on Facebook. The Facebook Platform has enabled social apps to facilitate the sharing
and discovery of games, music, news, television programming, and everyday interests such as
cooking, fitness, and travel.
Desktop Apps. Developers can build applications that run directly on the user’s PC.
Developers can add a social element by integrating with Facebook.
Mobile Apps. Developers can integrate their mobile apps with Facebook’s social and
personalization capabilities.
Platform-Integrated websites. Websites can integrate with Facebook using simple social
plug-ins such as the Like button, recommendations, and more. Facebook integration has
proven to be an effective strategy for new websites to gain popularity.
Key Products for Advertisers
Facebook Ads. Facebook has a simple, self-service advertising engine. Facebook gives
marketers the ability to concentrate their ads to a particular segment of the Facebook userbase,
or they can launch more broadly targeted advertisements. Facebook ads have a standard
format on Facebook, providing consistency for users and advertisers.
Sponsored Stories. Sponsored stories allow marketers to more broadly promote stories they
publish to their Facebook page , and also to amplify the reach of stories created by users’
interactions with the page.
Facebook Ad System. Advertisers can create campaigns to target Facebook users based on
their age, location, gender, relationship status, educational history, workplace, and interests.
Ad Analytics and FB Insights. FB gives advertisers the ability to track and optimize their
campaign performance. These analytics allow advertisers to see which ads were displayed and
clicked on. FB Insights allows advertisers with FB pages to view information about the
performance of their page and related posts, such as which posts generated the highest user
engagement via clicks, likes, or shares.
Management
Mark Zuckerberg (27) CEO, Founder, Controlling Stockholder Mark Zuckerberg is the company’s founder and has served as its CEO and as a member of the
board of directors since July 2004. Mr. Zuckerberg has served as Chairman of the board of
directors since January 2012 and is the company’s largest and controlling stockholder. Mr.
Zuckerberg attended Harvard University where he studied computer science.
Sheryl K. Sandberg (42) Chief Operating Officer Sheryl Sandberg has served as the company’s Chief Operating Officer since March 2008.
From November 2001 to March 2008, Ms. Sandberg served in various positions at Google,
Inc., most recently as Vice President, Global Online Sales & Operations. Ms. Sandberg also is
a former Chief of Staff of the U.S. Treasury Department and previously served as a consultant
with McKinsey & Company, a management consulting company, and as an economist with
The World Bank. In addition, Ms. Sandberg has been a member of the board of directors of
the Walt Disney Company since December 2009. Ms. Sandberg holds an A.B. in economics
from Harvard University and an M.B.A. from Harvard Business School.
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May 7, 2012
David A. Ebersman (42) CFO David Ebersman has served as the company’s Chief Financial Officer since September 2009.
Prior to joining Facebook, Mr. Ebersman served in various positions at Genentech, Inc., a
biotechnology company, including as its Chief Financial Officer from March 2005 and as an
Executive Vice President from January 2006 until April 2009, following Genentech’s
acquisition by F. Hoffmann-La Roche Ltd. in March 2009. Prior to joining Genentech, Mr.
Ebersman was a research analyst at Oppenheimer & Company, Inc., an investment company.
In addition, Mr. Ebersman has been a member of the board of directors of Ironwood
Pharmaceuticals, Inc. since July 2009. Mr. Ebersman holds an A.B. in economics and
international relations from Brown University.
David B. Fischer (39) VP of Marketing and Business Partnerships David Fischer joined the company in April 2010 and serves as its Vice President, Marketing
and Business Partnerships. From July 2002 to March 2010, Mr. Fischer served in various
positions at Google, including most recently as its Vice President, Global Online Sales &
Operations. Prior to joining Google, Mr. Fischer served as Deputy Chief of Staff of the U.S.
Treasury Department and was an associate editor at the U.S. News World Report, L.P., a
news magazine company. Mr. Fischer holds a B.A. in government from Cornell University
and an M.B.A. from the Stanford University Graduate School of Business.
Mike Schroepfer (37) VP of Engineering Mike Schroepfer has served as the company’s Vice President of Engineering since September
2008. From December 2005 to August 2008, Mr. Schroepfer served as Vice President of
Engineering at Mozilla Corporation, an Internet company. Prior to Mozilla, Mr. Schroepfer
served in various positions at Sun Microsystems, Inc., an information technology company,
including as Chief Technology Officer of its data center automation division. He also co-
founded CenterRun, Inc., a developer of application provisioning software, which was
acquired by Sun Microsystems. In addition, Mr. Schroepfer has been a member of the board
of directors of Ancestry.com Inc. since January 2011. Mr. Schroepfer holds a B.S. and an
M.S. in computer science from Stanford University.
Theodore W. Ullyot (44) VP, General Counsel, and Secretary Theodore Ullyot has served as the company’s Vice President, General Counsel, and Secretary
since October 2008. From May 2008 to October 2008, Mr. Ullyot was a partner at Kirkland &
Ellis LLP, a law firm. From October 2005 to April 2008, Mr. Ullyot served as Executive Vice
President and General Counsel of ESL Investments, Inc., a private investment firm. Prior to
joining ESL Investments, Mr. Ullyot served in the federal executive branch under President
George W. Bush, including as Chief of Staff at the U.S. Justice Department and as a Deputy
Assistant to the President. Earlier in his career, Mr. Ullyot was an associate general counsel at
AOL Time Warner, Inc. and served as a law clerk for U.S. Supreme Court Justice Antonin
Scalia and for Judge Michael Luttig of the U.S. Court of Appeals for the Fourth Circuit. Mr.
Ullyot holds an A.B. in History from Harvard University and a J.D. from the University of
Chicago.
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May 7, 2012
INCOME STATEMENT ($ In Millions) - FY End: December
Regulation Analyst Certification:I, Arvind Bhatia and Brett Strauser, hereby certify the views expressed in this research report accurately reflect my personal views aboutthe subject security(ies) or issuer(s). I further certify that no part of my compensation was, is, or will be, directly or indirectly, relatedto the specific recommendations or views expressed by me in this report.
Research Disclosures:Sterne, Agee & Leach, Inc. makes a market in the following subject companies Apple Inc. and Zynga Inc..
Sterne, Agee & Leach, Inc.'s research analysts receive compensation that is based upon various factors, including Sterne, Agee & Leach,Inc.'s total revenues, a portion of which is generated by investment banking activities.
Sterne Agee & Leach, Inc. expects to receive or intends to seek compensation for investment banking services from the subject companyand/or companies in the next three months.
Price Target Risks & Related Risk Factors:Investment risks associated with the achievement of the price target include, but are not limited to, a company's failure to achieveSterne, Agee & Leach, Inc., earnings and revenue estimates; unforeseen macroeconomic and/or industry events that adversely affectdemand for a company's products or services; product obsolescence; changes in investor sentiment regarding the specific company orindustry; intense and rapidly changing competitive pressures; the continuing development of industry standards; the company's abilityto recruit and retain competent personnel; and adverse market conditions. For a complete discussion of the risk factors that couldaffect the market price of a company's shares, refer to the most recent Form 10-Q or 10-K that a company has filed with the SecuritiesExchange Commission.
Company Specific Risks:Risks. Key risks to FB include 1) slower-than-expected growth; 2) competitive threats from companies like Google; 3) regulatory risks;4) risks associated with entering new international markets etc.
Valuation Methodology:Methodology for assigning ratings and target prices includes qualitative and quantitative factors including an assessment of industrysize, structure, business trends and overall attractiveness; management effectiveness; competition; visibility; financial condition; andexpected total return, among other factors. These factors are subject to change depending on overall economic conditions or industryor company-specific occurrences. Sterne, Agee & Leach, Inc., analysts base valuations on a combination of forward looking earningsmultiples, price-to-revenue multiples, and enterprise-value-to-revenue ratios. Sterne, Agee & Leach, Inc., believes this accurately reflectsthe strong absolute value of earnings, the strong earnings growth rate, the inherent profitability, and adjusted balance sheet factors.Additional company-specific valuation methodology is available through Sterne, Agee & Leach, Inc.
Definition of Investment Ratings:BUY: We expect this stock to outperform the industry over the next 12 months.
NEUTRAL: We expect this stock to perform in line with the industry over the next 12 months.
UNDERPERFORM: We expect this stock to underperform the industry over the next 12 months.
RESTRICTED: Restricted list requirements preclude comment.
ADDITIONAL INFORMATION AVAILABLE UPON REQUEST: Contact Robert Hoehn at 1-212-338-4731.
Other Disclosures:
Appendix Section, Page I
May 7, 2012
Opinions expressed are our present opinions only. This material is based upon information that we consider reliable, but we do notrepresent that it is accurate or complete, and it should not be relied upon as such. Sterne, Agee & Leach, Inc., its affiliates, or one ormore of its officers, employees, or consultants may, at times, have long or short or options positions in the securities mentioned hereinand may act as principal or agent to buy or sell such securities.
To receive price charts or other disclosures on the companies mentioned in this report, please visit our website at https://sterneagee.bluematrix.com/sellside/Disclosures.action or contact Sterne, Agee & Leach, Inc. toll-free at (800) 240-1438 or(205) 949-3689.
Founded in 1901, Sterne Agee has been providing investors like you with high-quality investment opportunities for over a century. During the early years, our founders prominently established themselves in the financial securities industry in the southeastern United States. Today, we have expanded to serve all regions of the country. Sterne, Agee is headquartered in Birmingham, Alabama with offices in 22 states. Sterne Agee is one of the largest independent firms in the country. Sterne, Agee & Leach, Inc. is a division of Sterne Agee Group, Inc., which also includes The Trust Company of Sterne, Agee & Leach, Inc.; Sterne Agee Asset Management, Inc.; Sterne Agee Clearing, Inc.; and Sterne Agee Financial Services, Inc.—www.sterneagee.com
EQUITY CAPITAL MARKETS
Ryan Medo Managing Dir., Eq. Cap. Mkts. (205) 949-3623 William McIlroy Director, Equity Products (212) 338-4781
INSTITUTIONAL SALES Steve Pokorny Head of Institutional Sales (214) 702-4020
INSTITUTIONAL TRADING JT Cacciabaudo Head of Trading (212) 763-8288
EQUITY RESEARCH
Robert Hoehn Director of Research (212) 338-4731
CONSUMER
Apparel Retailing & Toys Margaret Whitfield SVP, Sr. Analyst (973) 519-1019 Tom Nikic, CFA Analyst (212) 338-4784
Interactive Entertainment / Internet Arvind Bhatia, CFA Mng. Dir. (214) 702-4001 Brett Strauser Analyst (214) 702-4009
Footwear & Apparel Sam Poser Mng. Dir. (212) 763-8226 Ben Shamsian Associate (212) 338-4721
Leisure & Entertainment David Bain Mng. Dir. (949) 721-6651 Sherry Yin Associate (949) 721-6651
Restaurants Lynne Collier Mng. Dir. (214) 702-4045 Philip May Analyst (214) 702-4004
ENERGY
Exploration & Production Tim Rezvan, CFA Sr. Analyst (212) 338-4736
Ryan Mueller Analyst (212) 338-4732 Truman Hobbs Associate (212) 338-4767
Oilfield Services & Equipment Stephen D. Gengaro Mng. Dir. (646) 376-5331 Grant Fox Analyst (212) 338-4723 Tripp Schoff Associate (646) 376-5325
FINANCIAL SERVICES
Asset Management Jason Weyeneth, CFA SVP, Sr. Analyst (212) 763-8293 Charles Warren Analyst (646) 376-5309
Banks & Thrifts Matthew Kelley Mng. Dir. (207) 699-5800 Mike I. Shafir SVP, Sr. Analyst (212) 763-8239 Matthew Breese Analyst (207) 699-5800 Brett Rabatin, CFA SVP, Sr. Analyst (877) 457-8625 Kenneth James Analyst (615) 760-1474 Nathan Race Associate (615) 760-1477 Peyton Green Mng. Dir. (877) 492-2663 Zachary Wollam Analyst (615) 760-1468 Todd L. Hagerman Mng. Dir. (212) 338-4744 Robert Greene Analyst (212) 763-8296
Life Insurance John M. Nadel Mng. Dir. (212) 338-4717 Alex Levine Analyst (212) 338-4748
Mortgage Finance & Specialty Finance Henry J. Coffey, Jr., CFA Mng. Dir. (615) 760-1472 Jason Weaver VP, Sr. Analyst (615) 760-1475 Calvin Hotrum Analyst (615) 760-1476
FINANCIAL SERVICES (CONT.)
Property/Casualty Insurance Dan Farrell Mng. Dir. (212) 338-4782 Nitin Chhabra, FCAS Analyst (212) 338-4779
INDUSTRIALS
Aerospace & Defense Peter Arment Mng. Dir. (646) 376-5336 Josh W. Sullivan Analyst (646) 376-5337
Auto, Auto Parts and Auto Retailers Michael P. Ward, CFA Mng. Dir. (646) 376-5375 Ali-Ahmad Faghri Associate (646) 376-5304
Coal, Metals & Mining, Engineering & Construction Michael S. Dudas, CFA Mng. Dir. (646) 376-5329 Satyadeep Jain Analyst (646) 376-5357 Patrick Uotila, CPA Analyst (646) 376-5358
Construction Materials & Diversified Industrials Todd Vencil, CFA SVP, Sr. Analyst (804) 282-7385 Kevin Bennett, CFA Analyst (804) 282-4506
HEALTHCARE
Pharmaceutical Services Greg T. Bolan Mng. Dir. (615) 760-1469 Himanshu Rastogi, PhD, CFA Analyst (615) 760-1478
TECHNOLOGY
Data Networking and Storage Alex Kurtz Mng. Dir (415) 402-6015 Amelia Harris Analyst (415) 402-6018
Financial Technology Greg Smith Mng. Dir (818) 615-2029 Jennifer Dugan Analyst (415) 402-6051
Hardware, Mobile Devices, IT Supply Chain Shaw Wu SVP, Sr. Analyst (415) 362-7431
LED Supply Chain Andrew Huang Mng. Dir. (415) 362-6143 John Shen Associate (415) 402-6052