Corporate Research Basics

1. Corporate Research Basics Philip Mattera Corporate Research Project Corporate Research Project of Good Jobs First

2. General principles • There’s a lot more available than you think • Most of what is available is intended for other kinds of users (mainly investors). • A lot of info can be found online, but you need to know where to look. Avoid Google-type needle-in-haystack searches. • Not everything is online. Sometimes you need to go to the library or a government office. Corporate Research Project of Good Jobs First

3. Types of online info sources • Searchable free websites on the open web • Free websites on the “invisible” web; e.g. government sites such as EDGAR/SEDAR • Individual subscription sites on the web • Large commercial aggregators (e.g. Nexis and Factiva) • Database services available through university or public library systems Corporate Research Project of Good Jobs First

4. Major categories of information • Basic operating and financial information • Essential relationships • Social (ir)responsibility record Corporate Research Project of Good Jobs First

5. Types of Basic Information • Company profiles • Company histories • Company operating information • Company financials • Company websites • Press releases and media coverage Corporate Research Project of Good Jobs First

6. Basic information: Company Profiles and Histories • Hoovers’s online • Stock market websites such as Yahoo Finance • Advice for Investors (Canada) • Mergent Manuals • Business and Company Resource Center • D&B reports for private companies Corporate Research Project of Good Jobs First

7. Hoover’s (www.hoovers.com) longer profiles by subscription Corporate Research Project of Good Jobs First

8. Yahoo Finance (biz.yahoo.com) Corporate Research Project of Good Jobs First

9. Canadian equivalent to Yahoo Finance (Advice for Investors) Corporate Research Project of Good Jobs First

10. Mergent Manuals(academic library systems) Corporate Research Project of Good Jobs First

11. Business and Company Resource Center (public library databases) Corporate Research Project of Good Jobs First

12. D&B Business Information Reports(by subscription or pay per view on web) Corporate Research Project of Good Jobs First

13. Specialized mining industry information sources • InfoMine website • MiningUSA website • Mining Journal Online • Mining Magazine online • National Mining Association website Corporate Research Project of Good Jobs First

14. Operating information on public companies in 10-K filings Corporate Research Project of Good Jobs First

15. 10-K Item 1- Business Corporate Research Project of Good Jobs First

16. Main types of operating information in 10-Ks • Description of business • Competitive environment • Regulatory environment • Major suppliers (if highly dependent) • Major customers (if over 10%) • Properties/facilities • Labor information Corporate Research Project of Good Jobs First

17. Main types of financial data found in 10-K filings and annual reports • Recent performance • Income statements • Balance Sheets • Historical performance (past 5-10 years) • Segment breakdown • Exhibits (including loan agreements) • Look for updates in 10-Q quarterly filings Corporate Research Project of Good Jobs First

18. Canadian equivalents to 10-K Annual Information Form • Description of business • Risk Factors • Legal Proceedings etc. MD&A (Management Discussion & Analysis) • Review of results in past couple of years Available via SEDAR (www.sedar.com) Corporate Research Project of Good Jobs First

19. Outside analysis of financial data • Wall Street analyst reports Sources: Investext (via Nexis or some academic library database services) Look especially for reports in which an analyst initiates coverage of a company, since these have much more detail and background. Corporate Research Project of Good Jobs First

20. Key resources in company websites • Glossy annual reports • Archive of company press releases • Full Disclosure documents (e.g., transcripts of analyst conference calls • Biographies of executives • Location of plants and research centers • Store directory (for retailers) Corporate Research Project of Good Jobs First

21. PART II. KEY RELATIONSHIPS • Focus on these to understand how the company works and what may be important areas of vulnerability. For example: • Parent companies and subsidiaries • Institutional shareholders & creditors • Outside directors • Major customers and suppliers Corporate Research Project of Good Jobs First

22. KEY RELATIONSHIPS:Parent companies & subsidiaries • Directory of Corporate Affiliations(on Lexis-Nexis, some academic database systems and via direct subscription) • America’s Corporate Families or Who Owns Whom (on Dialog database service) Corporate Research Project of Good Jobs First

23. Sample page from Directory of Corporate Affiliations on Nexis Corporate Research Project of Good Jobs First

24. KEY RELATIONSHIPS: Outside Directors • Are supposed to be watchdogs but often act as lapdogs of top management • Since the scandals involving Enron etc., there is more emphasis on director independence • Frequently targeted in corporate campaigns, since they are ultimately responsible for company policy Corporate Research Project of Good Jobs First

25. KEY RELATIONSHIPS: Outside Directors • Key info source: Proxy Statements (also known as Form DEF 14A) • Key pieces of information: - director biography and affiliations - transactions with company - director pay and shareholdings - board committee memberships • Also has info on annual meeting, executive compensation and shareholder resolutions Corporate Research Project of Good Jobs First

26. Sample of proxy cover page Corporate Research Project of Good Jobs First

27. Canadian equivalent to DEF14A Management Information Circular • Principal shareholders • Director biographies • Direct shareholdings • Executive compensation Available via SEDAR (www.sedar.com) Corporate Research Project of Good Jobs First

28. KEY RELATIONSHIPS: Institutional Shareholders • Institutions include: pension funds (private and public), mutual funds and other investment firms, insurance companies, university endowments, etc. • Majority of stock in most large corporations held through institutions. • Institutions can have great power over corporate practices, though they don’t always exercise that power. Corporate Research Project of Good Jobs First

29. KEY RELATIONSHIPS:Institutional Shareholders • Obtaining lists of largest holders. • Holders with 5% or more will be disclosed in the proxy statement. • List of ten largest holders available from free websites such as Yahoo Finance. • Detailed (but not totally complete) lists available from subscription services such as Vickers and Thomson. Corporate Research Project of Good Jobs First

30. Sample list from Yahoo Finance Corporate Research Project of Good Jobs First

31. Sample list from Vickers (screen showing voting authority) Corporate Research Project of Good Jobs First

32. KEY RELATIONSHIPS:Wall Street Analysts • Can have a lot of influence over stock prices and thus are key parties to try to influence in a corporate campaign • Get their reports from services such as Investext • Use Nelson’s Directory of Investment Research to find out which ones cover a company (print version or on Lexis-Nexis) Corporate Research Project of Good Jobs First

33. KEY RELATIONSHIPS: Creditors Types of lenders: • Single banks • Credit syndicates (groups of banks) • Bondholders • Get most involved when a company is in financial distress or bankruptcy, but concern about major environmental liabilities, e.g., can lead to higher interest rates for the company. Corporate Research Project of Good Jobs First

34. KEY RELATIONSHIPS: Creditors Sources of information on lenders: • Debt section of Notes to Financial Statements in 10-K • Credit agreements in 10-K Exhibits • D&B services will list firm’s main bank • Specialized newsletters such as Bank Loan Report (available via Nexis) • Uniform Commercial Code filings Corporate Research Project of Good Jobs First

35. KEY RELATIONSHIPS: Customers • Companies are secretive about their customers. • 10-Ks will disclose only if company is very dependent on a few major customers. • Do a full-text search of EDGAR to find firms that list your target company as a major supplier. • Trade publications and customer websites. Corporate Research Project of Good Jobs First

36. KEY RELATIONSHIPS: Suppliers • As with customers, companies tend not to disclose much about suppliers. • 10-K will include a disclosure only if the firm is highly dependent on a supplier. • To determine which firms supply a particular product, see Thomas Register in libraries or ThomasNet on web. • For info on supply chains (especially for timber), see Endgame.org Corporate Research Project of Good Jobs First

37. Part III. SOCIAL RESPONSIBILITY RECORD • Social responsibility profiles • Court proceedings • Federal regulatory matters • Labor relations & employment practices • Workplace safety and health • Environmental compliance • Campaign contributions and lobbying Corporate Research Project of Good Jobs First

38. Other social responsibility issues • Public relations • Advertising practices • Corporate philanthropy • Sponsored research • Executive compensation • Corporate subsidies • Tax compliance Corporate Research Project of Good Jobs First

39. SOCIAL RESPONSIBILITY: Company Profiles • KLD’s Socrates database (expensive) • SocialFunds.com’s Corporate Social Research Center • 10-K sections on Legal Proceedings • Company sustainability reports/web pages Corporate Research Project of Good Jobs First

40. Newmont sustainability report Corporate Research Project of Good Jobs First

41. Types of court information • Dockets (basic info and chronologies; federal: PACER; state: web, Courtlink) • Case documents (complaints, motions etc. increasingly online, especially PACER) • Written federal and state court opinions (Lexis-Nexis and Westlaw) • Selected verdicts and settlements (Lexis-Nexis and Westlaw) Corporate Research Project of Good Jobs First

42. SOCIAL RESPONSIBILITY: Federal regulatory agencies • Securities and Exchange Commission • Federal Trade Commission • Consumer Product Safety Commission • Food and Drug Administration • General Services Administration (oversight of federal contractors) Corporate Research Project of Good Jobs First

43. SOCIAL RESPONSIBILITY: Labor and employment issues • National Labor Relations Board (labor-management issues) • U.S. Dept. of Labor (wage & hour, employee benefits, etc.) • Equal Employment Opportunity Commission • Pension Benefit Guaranty Corporation • FAST CD-ROM Corporate Research Project of Good Jobs First

44. SOCIAL RESPONSIBILITY: Workplace safety & Environment • Occupational Safety and Health Administration inspection database • Mine Safety & Health Administration Environmental Protection Agency databases: • Environmental Compliance History Online • Toxics Release Inventory • Envirofacts Corporate Research Project of Good Jobs First

45. Mine Safety & Health Admin.Data Retrieval System Corporate Research Project of Good Jobs First

46. Environmental Compliance History Online (ECHO) Corporate Research Project of Good Jobs First

47. SOCIAL RESPONSIBILITY: Campaign contributions Federal campaign contributions: • Federal Election Commission website • Center for Responsive Politics- Open Secrets website State campaign contributions: • Institute on Money in State Politics – Follow the Money website Corporate Research Project of Good Jobs First

48. SOCIAL RESPONSIBILITY: Lobbying • Secretary of the Senate website • Open Secrets Lobbying Database • Washington Representatives • State-level lobbying: websites of individual state legislatures or state ethics commissions Corporate Research Project of Good Jobs First

49. Staying up to date on new sources Corporate Research Project of Good Jobs First