BEST PRACTICES IN INVESTOR RELATIONS AMONG AWARD-WINNING COMPANIES Interviews With CEOs, CFOs, Investor Relations Officers and Investors

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1 Best Practices in Investor Relations Based on Hundreds of Investor and Corporate Executive Interviews Candid Investor Perception Studies and Investor Feedbacks on Value-Drivers and Benchmarking to Best Practice and Peers BEST PRACTICES IN INVESTOR RELATIONS AMONG AWARD-WINNING COMPANIES Interviews With CEOs, CFOs, Investor Relations Officers and Investors Special Report #10 This report includes interviews with award winning companies in investor relations. Best Practices For Companies is distributed in a series of Special Reports by, a global capital markets and investor relations firm that assists companies in the development of successful investor programs by introducing best practices and key essentials that guarantee success and produce long-term sustainable value. This Special Report #10 is Best Practices in Investor Relations Among Award-Winning Companies, Interviews With Executives. March 30, Park Avenue, 15 th Floor New York, NY Phone: (646)

2 Introduction Our interviews with hundreds of investors and corporate executives in companies with award winning investor relations programs have identified how these companies perform above and beyond peers on a variety of IR-specific and company facets. In their own words, these interviews with executives and call outs from investor interviews provide insight into how the most successful IR programs deliver top-notch investor communications. The Investor Relations ScoreCard and the interviews are invaluable for any investor relations professional interested in enhancing their own program. These interviews and the Investor Relations ScoreCard answer these questions: What can CEOs and CFOs do to understand the importance of and support excellence in investor relations? What can senior executives do to recognize and promote excellence in investor relations? What can investor relations professionals do to advance their own positions and to design and follow a path of success up the corporate ladder? What does the investment community expect and how does this correlate with what is currently being provided? Most professionals are so busy with the day-to-day requirements of the job that they're unable to carve out time for true career development and personal brand building. Fast, punchy and prescient, these interviews are worth bookmarking today for greater job security, value and recognition tomorrow. Investor Relations Best Practices series of reports in this collection are available in individual reports on the website at Each publication gathers together separate but related articles on investor relations, governance, and enterprise risk management. Sincerely, Jeff Christensen, CPA Managing Partner All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of. 2

3 INTERVIEW QUESTIONS & ANSWERS Topics Within This Report Topic Page Introduction 2 A. Investor Relations ScoreCard 4 B. Interviews With Award-Winning Companies and Investors 6 C. Executives Interviewed 10 About 12 3

4 A. Investor Relations ScoreCard This Investor Relations ScoreCard is designed to help you understand exactly where you are with your being strategic in investor relations. What's working, what's not working and where do you need to pay the most attention to improve your investor relations?. A Note About the Investor Relations ScoreCard : The areas on the ScoreCard are Key Best Practice Indicators are developed from our work with hundreds of companies and our interviews on best practices in investor relations with hundreds of investors and executives within companies with award-winning investor relations programs. These are all action-oriented items. They are the things you need to be, do, and have for powerful investor relations. Our experience has proven that improving any of these areas can have a major impact on your investor relations effectiveness. The trick is knowing what to improve and how to improve it. Score yourself (investor relations at your company) objectively from 0 to 5 for each statement below. Investor Relations ScoreCard Score Each Question: 5.0 = Yes, Frequently 2.5 = Inconsistent 0 = No, never Best Practice Indicators Does investor relations officer win awards and rank #1 in third party polls? SCORE YOURSELF (0 to 5) Does the investor relations officer have a meaningful role in the strategic planning process? Is your CEO and CFO each spending less than 15% of their time in investor relations? Has the investor relations officer s role expanded so he / she is the major presenter at brokerage conferences? Do investors / analysts consider the investor relations officer as a thought leader or go to person on transitions and trends in their industry, macro topics, and company information? 4

5 Best Practice Indicators Has the investor relations officer had a meaningful role in identifying and improving the strategic direction of the company that significantly increased share value? SCORE YOURSELF (0 to 5) Does an independent firm, other than a brokerage firm, provide third-party investor perception research and feedbacks to confirm investors understanding of the company s strategy effectiveness, evaluation of other drivers, and support of outreach and messaging? Please Note There are 14 other Best Practice Indicators from our hundreds of interviews on best practices in investor relations with investors and executives within companies with award-winning investor relations programs. Contact us, we can help you quickly develop a plan to increase your scores best practices in investor relations are not one size does not fit all. Total Your Score (100 total possible points; 20 Best Practice Indicators x 5 points each = 100 total possible points) If your score is: : Congratulations! You are doing many things right and probably getting a lot of recognition for your efforts : You are doing many things right, look through your answers to determine where you can improve. The items on the ScoreCard are all action oriented. We can help you be most effective and get the recognition you deserve. Below 60: We can help you dramatically increase your scores in all of the areas above. It's a matter of know-how, practice and implementation. If your answer to any of these is less than 5, contact us for actions plans that are in place at your peers that will ensure success. We have helped hundreds of investor relations teams get the recognition and awards they deserve for efforts and value contributions. 5

6 B. Interviews With Award-Winning Companies and Investors (Excerpts) B1. Investor Relations Has Role in Strategic Planning Process Throughout this entire process of transformation of Newfield Exploration, investor relations had a seat at the executive management and board director tables and we were able to anticipate the reaction from the Street in terms of news flow and change. So, if investor relations have a seat at the table with management and the board of directors, I think you can ultimately make better decisions as a company. An effective IRO you have to the ear of management and sit at the table with Management and the board of directors to intimately understand how strategy is being developed and what the ultimate view for the company is. Steve Campbell, Vice President of Investor Relations at Newfield Exploration B2. Investor Relations is Helpful to Board of Directors CACI established an Investor Relations Committee of the Board of Directors. Interestingly, the committee started with 4 directors. Other directors learned how useful the committee is and three additional directors asked to be on the committee. So today, 7 of the total 11 directors on CACI s board are on the Investor Relations Committee of the Board. Transparency is key. The Ear of management and sit at the table with board of directors Additional Board of Directors asked to be on the investor relations committee committee meets each quarter in conjunction with the quarterly board meeting. Dave Dragics, Vice President of Investor Relations at CACI International 6

7 B3. Value-Driving Performance Metrics of the Company The company s understanding of statistically selected value-driving performance metrics that drive value of our peers and Devon Energy played a significant role in the decision to strategically reposition Devon, a move announced about a year ago. We recognized that we did not have enough capital to develop all of our opportunities. This was resulting in a suboptimum present value of our portfolio of projects, White said. It became obvious that our international and offshore segments were dragging down our value-driving metrics, contributing to the underperformance of our stock price. As a Focus company where it is most competitive and has best risk-adjusted returns result, Devon announced its decision to strategically reposition the company. Devon monetized its international and offshore assets to focus solely on the North American onshore segment. This is where the company is most competitive and has the best risk-adjusted returns. We are now positioned to deliver industry-leading, organically-funded growth. It has been a great move for the company. Vince White, Senior Vice President of Investor Relations at Devon Energy B4. Investor Perception Research and Feedbacks on Value-Drivers One of the most beneficial things that we did in the perception studies was not only polling buyside and sell-side, but polling internal management that allowed us to see where there were discrepancies in our future view, and where there were perception realities that didn t line up. I think when you can compare your internal views on key strategies to the external views to the market has you are able to craft your message to ensure it is factual and addresses things that are of most interest to internal and external participants. By polling Wall Street and polling management simultaneously and comparing results yields a big eye opener and a huge benefit in planning your communications strategy. Steve Campbell, Vice President of Investor Relations at Newfield Exploration Polling investors / analysts and polling management simultaneously and comparing results yields a big eye opener and a huge benefit in planning your communications strategy. 7

8 Chief Financial Officers must take a leadership role in improving the company s investor relationships. Chief Financial Officers must understand the needs of the company s primary constituents and be aware of their perception of the company, its critical issues and enterprise risks. We have found independent perception research is an invaluable tool for reaching out to investors, board directors and all levels of management to capture in confidence their most intimate thoughts, identify concerns and collect suggestions on immediate corrective actions to build understanding and create sustainable long-term value. Nothing else matters if you don t take action. James Hatfield, Senior Vice President & Chief Financial Officer of Pinnacle West Capital Corporation Investors trust and their perceived credibility of our company management increased dramatically when we started having an independent firm gather investor perceptions on our company they simply ask investors for their input and concerns, and our company evaluates and acts upon investor comments. I can t overstate the importance of the positive feeling among investors when they understand that our company seriously values investors opinion and input. We have not always had smooth sailing, we have had shareholders make demands on the company and some have filed shareholder lawsuits, and we have had hiccups in our financial results. Because of our relationships with investors by asking for their input and acting upon investor comments, we have navigated through tough times with surprisingly little impact on our market capitalization. Jeff Elefante, former Executive Vice President, General Counsel, Corporate Secretary and Director of Contract and Administrative Services for CACI. Kyphon reaches out before investor meetings and earnings conference calls to find out what investors want to talk about and what s important for management to discuss. Institutional Investor 8 Chief Financial Officers must understand the needs of the primary constituents and be aware of their perception of the company, its critical issues and enterprise risks. Send a strong message to the investment community that management values investors opinions and input. Performing pre- and post-event candid investor feedback on value-drivers before and after earnings conference calls and meetings with investors contributes real value. Kyphon has solid 2-way communication they always want to know how they can be better and want to know which investor questions are topical for upcoming quarterly earnings meetings; they are very responsive in getting answers to investors. Institutional Investor Kyphon won best IR program among smaller U.S. medical device companies and here is what investors said about Kyphon:

9 B5. Investor Relations Outreach We have sell-side analysts arrange only about 25% of our investor meetings. We arrange our own meetings with investors and with the help of an independent agency this enables us to have a better relationship with investors than when a sell-side analyst arranges meetings with investors. We encourage investors to call our investor relations department because if an investor is going to come to a conclusion that could impact their buy/hold/sell decision We have sell-side analysts arrange only about 25% of our investor meetings. on the company or the investor has a question about our company, our industry, or the business environment in which we operate, we want the investor to know our company s position. We help to educate investors on our company, our industry, and the business environment in which we operate. Dave Dragics, Vice President of Investor Relations at CACI International 9

10 C. Executives Interviewed (Partial List) David Dragics is Senior Vice President of Investor Relations for CACI International Inc, an information technology company with fiscal 2010 revenue of approximately $3.0 billion. Dave manages the company's overall investor relations program and reports directly to the CEO and works closely with the Executive Chairman of the Board and the Investor Relations Committee of the Board. He has developed and implemented the concept of a Corporate Compliance Team, using the resources of investor relations, legal and risk management. Dragics has over 30 years of experience in investor relations, finance, strategic planning, marketing and operations in banking, financial services, aviation services, and information technology firms. He was a presenter at the 2010 NIRI Annual Conference on Regulations and Governance; a topic which is under an intense spotlight brought about by "game-changing" proposals from the SEC as well as numerous bills in Congress related to proxy access, compensation and proxy disclosures. CACI provides professional services and IT solutions, and has market capitalization of $1.3 billion. James Hatfield, Senior Vice President & Chief Financial Officer of Pinnacle West Capital Corporation and its principal subsidiary Arizona Public Service Company. He has over 30 years of experience in the electric and gas industries where he has held various management and executive positions. Pinnacle West, through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States. Pinnacle West's market capitalization is $4.1 billion. 10

11 Jeff Elefante, Corporate Governance Consultant and Attorney-at-Law, former Executive Vice President, General Counsel, Corporate Secretary and Director of Contract and Administrative Services for CACI, a professional services and information technology (IT) company with revenues of $3.0 billion. As a member of CACI's Top Management Team, Jeff reported to the CEO/Chairman of the Board. He was responsible for the Company's legal, contracts, governance, compliance, crisis and risk management and participated in Board of Director and Executive Committee meetings and actions and investor relations matters. CACI provides professional services and IT solutions, and has market capitalization of $1.3 billion. Vince White is Senior Vice President of Investor Relations at Devon Energy Corporation. Prior to joining Devon in 1993, he served as Controller of Arch Petroleum Inc. and was an auditor with KPMG Peat Marwick (now KPMG LLP). White is a Certified Public Accountant, and he is a member of the Petroleum Investor Relations Association and the National Investor Relations Institute. He received his Bachelor of Accounting degree from the University of Texas at Arlington. Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production. Devon is a leading U.S.-based independent oil and gas producer and is included in the S&P 500 Index. Devon Energy s market capitalization is $32 billion. 11

12 About s principals have assisted 200 plus clients over the past 30 years. We assist in the development of successful investor programs by introducing best practices and key essentials that guarantee success and produce long-term sustainable value. The Firm provides complimentary resources, educational articles and advice for company executives on our website at including a free report called, Best Practices In Investor Relations, Interviews With Executives. Our executives are ex-arthur Andersen and provided ongoing consulting services with other global investor and public relations firms. Our executives were the CFO & corporate secretary of a NYSE company and was the investor relations officer & chief planning officer for a large diversified NYSE company, and board member of NYSE companies. In these challenging times, two things that may be especially helpful to you at this time: (a) Best Practice Review of Investor Relations. Want to jump start your investor relations program? Have a top-quartile investor relations program? We have a successful record of increasing the recognition of investor relations officers to enable them to perform at peak efficiency with comfort in their decisions and recommendations, and be in line for promotion to higher executive levels within their company. Also, our interviews with hundreds of investors and corporate executives in companies with awardwinning investor relations programs have identified how these companies perform above and beyond peers on a variety of IR-specific and company facets. (b) Candid Investor Perception Study and Investor Feedbacks on Value-Drivers and Benchmarking to Best Practice and Peers Do you want to get the recognition you deserve for your efforts and value contributions? Contacts: Jeff Christensen, CPA Managing Partner 410 Park Avenue, 15 th Floor New York, NY Phone: (646) jchristensen@capitalmarketsboard.com Howard A. Christensen Chairman Phone: (480) hchristensen@capitalmarketsboard.com 12