In Finder I deleted directory ClassicPhotos/AFNetworking. This didn't change ClassicPhotos git working directory.

Then add Podfile. I adjusted entries for AFNetworking 2.0
References
https://github.com/AFNetworking/AFNetworking/wiki/Getting-Started-with-AFNetworking
http://stackoverflow.com/questions/17265674/cocoapods-doesnt-install-pods-for-ios7-and-xcode-5?rq=1