January 26, 1999

Investors' Rights

Ratings 10 - 8

In a wholly unscientific manner, Yi-Hsin Chang and Louis Corrigan each picked 10 well-known companies from a wide range of industries. Efforts were made to contact every company's investor relations (IR) department to ask about policies regarding conference calls, website offerings, and earnings press releases. Conference calls were rated on two criteria -- their availability to individual shareowners and whether a live broadcast was available on the Internet. Earnings announcements were rated on clarity, detail, and depth. The companies' IR websites were navigated to determine usefulness to shareowners. Each company was rated on a scale of 1 to 10, 10 being the highest rating possible.

Intel (NYSE: INTC)
2200 Mission College Blvd.
Santa Clara, CA 95052
(408) 765-8080

Rating: 9

Foolish Efforts: Intel's IR efforts do the bunny hop because the company makes savvy use of its website, posting a clear notice of upcoming earnings releases and broadcasting its quarterly conference call live over the Web, where calls are archived for two weeks. Investors can also listen to a telephone replay of the call, which is available for four days. Better yet, Intel's semi-annual meeting with analysts is broadcast live on the Web and archived until the next meeting.

The site also offers an archive of earnings releases (complete with balance sheet, a geographic breakdown of sales, stock buyback activity, sequential comparisons, and helpful metrics like days sales outstanding and employee headcount) going back through 1996; an archive of press releases back to 1995; three years worth of annual reports (both for online viewing and for download); historical financial information that can be downloaded into a spreadsheet; links to the SEC filings; an outline of its corporate governance policies; a useful FAQ; an archive of streaming audio/video speeches from the last three semi-annual Intel developer forums and other events; links to some major news articles about Intel; a monthly investors news page with a calendar of upcoming events; and access to the Intel Technology Journal. Investors can also subscribe to a customizable weekly news bulletin (Info@Intel) to get press releases and other information sent automatically via email. Investment questions can be sent via the Feedback page; there's also a contact number. That's almost everything an investor could hope to find.

Areas for Improvement:
Intel doesn't allow individual investors to participate in its quarterly calls. That's not a major problem given the live listen-only access on the Web, but it would be nice for Intel to offer a similar Q&A session immediately following the analyst call for actual owners of the business. Also, you need to contact Intel to get the replay code; that info should just be included in a pre-earnings press release for all to see. The company should provide a transcript of the full call and keep an archive of this material on its website just as it does with the earnings releases. Stamp it "stale" after a few weeks if need be, but this information is valuable. Also, Intel should offer a live feed of its shareholder meeting and of its executives' appearances at "analyst only" investment conferences.

Microsoft Corp. (Nasdaq: MSFT)
One Microsoft Way
Redmond, WA 98052
(425) 882-8080

Rating: 9

Foolish Efforts: In terms of investor relations, Microsoft rocks. Not only has the company been broadcasting its quarterly conference calls live over the Internet for the past two years, its IR website has justifiably been recognized as the best among those of leading U.S. companies by Investor Relations magazine. The site, which is updated almost daily and gets more than 100,000 visitors a month, is just chock full of information. The most notable features include transcripts and slides of the annual shareholder meeting, financial analyst meetings, and speeches given by top company executives; extensive corporate background information and archives of its financial and stock trading history; analysis tools; and daily updates on the Microsoft antitrust trial. Plus the company's annual report is available in 11 languages, and income statements can be viewed in accordance with accounting standards and in the local currencies of six countries besides the U.S.

Areas for Improvement:
Microsoft should archive its quarterly conference call broadcasts on its website and provide live feeds of executive talks. It should also offer a service by which investors can sign up to be notified by e-mail of major announcements and events. The company does plan to introduce an e-mail newsletter to communicate directly with investors.

Cisco (Nasdaq: CSCO)
170 West Tasman Drive
San Jose, CA 95134
(408) 526-4000

Rating: 9

Foolish Efforts: Cisco's website is very easy to navigate and full of useful info, including annual reports (view online or download in whole or in part) for the last 2 years; 2 years of earnings releases complete with balance sheets; downloadable historical financials; a backlog of news releases through 1992; links to the SEC filings; one of the most useful FAQs of any we saw; and very clear contact information. You can also subscribe to receive news releases by e-mail.

For more reading, the "Cisco in the News" section links to interviews with CEO John Chambers and an excellent assortment of recent news articles about Cisco. There's also product literature and transcripts or audiofiles of executive presentations, including those from the November 5-6 meeting with analysts. Also, Cisco now uses the Business Wire plus a notice on its website to invite all investors to listen to the live quarterly conference call via an 800 number. The replay is also available for 7 days either by phone or via the Web.

Areas for Improvement:
IR head Mary Thurber and crew are notably helpful and promise to answer emailed questions in a day's time. Since we spoke with her, she's already taken action to provide broader dissemination of the conference call info. But Cisco should also offer live Web audiocasts and transcripts of the calls, plus a longer-term archives of both. A forum allowing individual shareowners to ask questions would also be a welcome addition. Furthermore, Cisco's execs still appear at brokerage-sponsored conferences where individual investors -- and sometimes even the media -- are excluded. We would love to see a company take a stand against this common practice, and Cisco has the clout to do it: No live Web audiocast, no Cisco.

One New Orchard Road
Armonk, NY 10504
(914) 499-1900

Rating: 8

Foolish Efforts: IBM's website is chock full of info. There's an archive of earnings releases through 1994 (including balance sheets and helpful percentage change calculations); an archive of annual reports back through 1994 (downloadable, but only in parts); a nifty Lou Gerstner page where you can read many of the CEO's speeches and contact him directly by e-mail (he's said to read and respond); and a helpful little "Guide to Understanding Financials" area for the beginner investor, including a glossary.

In the press room, you'll find a bunch of IBM "white papers" and other publications plus a selection of chronologically organized links to articles (or at least abstracts) about IBM from various publications. Among its best features, the company offers live Web audiocasts with slideshow presentations of its quarterly conference calls (they are archived for 90 days). Call replays are also available for 90 days. The IR department promises to return calls in 8 business hours, and they did.

Areas for Improvement:
The news archive is uneven, going back a couple of years for Lotus but only 1 year for IBM. The feedback e-mail page isn't IR-specific, plus the link to it isn't included with the other contact info listed in the FAQ. That's only part of a sometimes non-intuitive site. (I never could find the archived conference call, even using the search feature.) Also, while those calls are open to all investors and the media, space available, IBM doesn't publicize the dial-in number or the replay number. It also has no plans to provide a call transcript or an automatic e-mail service to notify investors of major announcements. Also, while some tradeshow speeches by execs are broadcast live on the Web, talks given to brokerage house execs are not. There's room for improvement on each count.

Berkshire Hathaway (NYSE: BRK.A and BRK.B)
1440 Kiewit Plaza
Omaha, NE 68131
(402) 346-1400

Rating: 8

Foolish Efforts: Well, you can't charge the company with selective disclosure. That's because it's a tight-lipped company that doesn't hold conference calls, doesn't meet with analysts, and doesn't participate in surveys (which was the answer we got when we called its Omaha headquarters.) In fact, Berkshire doesn't even have an IR department. What's great about the company's website, however, are its "Owner's Manual" and annual chairman's letters to shareholders, which date back to 1977 and are so comprehensive and forthcoming that some have called the archive an MBA in and of itself. The site also provides a page of links to the company's subsidiaries.

Areas for Improvement:
Although we appreciate that Berkshire creates a level playing field for analysts, institutional investors, and individual investors by limiting all disclosure, shareowners may benefit from more frequent communication with management than their once-a-year pilgrimage to the company's annual meeting. Indeed, Berkshire should broadcast the annual meeting live on the Internet and archive it on its website, especially for shareowners who can't make the journey out to Nebraska.

Next -- Company Ratings 7.5 - 6.5