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Covering Companies_Fall 2011_Sarah Bartlett
This document outlines the syllabus for a course on covering companies. The course will be taught on Tuesdays from 9:30am to 12:20pm by Professor Sarah Bartlett. Students will learn how to analyze corporate strategies, evaluate earnings reports, understand the role of capital markets, and produce engaging stories about companies. Each student will select one company to cover throughout the semester, producing stories on the company's strategy, earnings, governance, and CEO. The course aims to help students think analytically about companies and their role in society. Students will complete assignments including a beat memo on their company, a news story using an executive interview, an earnings outlook story, and an in-depth analytical piece on their company.
Covering Companies_Fall 2011_Sarah Bartlett
- 1. COVERING COMPANIES Fall 2011 Tuesdays,9:30 a.m. – 12:20 p.m. Professor Sarah Bartlett Office: Rm. 411 (646) 758-7822 Office hours: I am usually at the school, but if you want to meet me at a specific time, please send me an email sarah.bartlett@journalism.cuny.edu COURSE DESCRIPTION: If the economy is the theater, then companies are the actors on the stage. How they manage and finance themselves, the products and services they sell, and the strategies and behaviors they adopt can leave an indelible impact on our society. Whether it’s BP with its oil spill in the Gulf of Mexico, the financial debacles at AIG and Bear Stearns, or the gravity-defying growth of Apple, Google and Facebook, companies are frequently cast as the villains or heroes of our society. We are living at a time of unusually fierce ideological warfare, a period in which society’s scrutiny of corporate behavior is particularly intense. All the more important, then, that students have the ability to think analytically about companies, rather than casting them in superficial roles. This course will focus on the fundamentals: students will learn how to interview executives aggressively but fairly, evaluate corporate strategies, analyze earnings reports, and understand the role of capital markets and investors in a company’s success or failure. Students will also learn about the regulatory environment in which companies operate, and become familiar with current corporate governance issues. We will use companies in the news as our fodder for classroom discussion. Students will select one company to cover for the semester that will form the basis for stories, whether on the company’s strategic positioning, its quarterly earnings, its corporate governance or its CEO. Print, multimedia and broadcast pieces will be deconstructed in class to show students the different ways that storytelling about companies can occur. LEARNING OBJECTIVES By the end of the semester, students will: • Be familiar with the basic language of business. • Know how to dissect corporate earnings statements. • Have experience interviewing executives, analysts and investors • Be adept at analyzing corporate strategies. • Be proficient at producing stories about companies in an engaging way. REQUIRED READING Financial Statements Demystified: A Self-Teaching Guide , by Bonnie K. Kramer and Christie W. Johnson (McGraw Hill: 2009). The full price for this book is $19.95. However, here are some other options: http://www.textbooks.com/ISBN/9780071543873/author/book.php?utm_medium=Affiliate&utm_source=Performic
- 2. s&utm_term=Affiliate&PartnerID=k284026&utm_campaign=k284026&ganmem=706818169&mcid=XAF-j248274 30k284026-k284026 and http://www.amazon.com/gp/offer-listing/0071543872/sr=/qid=/ref=olp_tab_used?ie=UTF8&coliid=&me=&qid=&s r=&seller=&colid=&condition=used The NYT’s blogDealbook - http://dealbook.blogs.nytimes.com/ - a good aggregator of business news. Also seek out articles on the companies you are covering and the industry in which the companies operate. Consult the top stories on Web sites including www.bloomberg.com and www.marketwatch.com. ASSIGNMENTS You are required to produce three pieces outside of class, and to submit a “beat memo” on the company you are covering for the semester. Beat memo: By following the steps indicated in the beat memo, you will learn how to research and analyze your company, which will make it much easier to produce the earnings and company pieces later in the semester. You may submit portions of the beat memo throughout the semester for review and feed back, however, the completed beat memo is due Dec. 6 at 11:59pm. News story: Using background research, financial analysis and an interview with Steve Sakove, the CEO of Saks, produce a 1-2 minute audio or video piece about Saks, due Oct. 18th by 11:59pm. An earnings outlook story focused on the company you are following for the semester – 400-600 words. The piece should include analysis of the company’s earnings strength and its stock’s prospects. Due by Week 9, specifically, by 11:59pm on Nov. 1. An analytical piece about your company: This story, in any medium, should assess an element of the company's business, whether it involves marketing, management, technology, international expansion, corporate strategy or governance. It should weigh whether the company’s plans are working, and integrate that with an analysis of the share performance, revenue and growth of the company. Industry context and competitive analysis should also be included. We'll review several company pieces in class ahead of time and dissect them to familiarize you with the genre. Length: 1,000-1,200 words, 2-3 minute video or equivalent multimedia package. Pitch memo due by 11:59pm on Nov. 8th. First draft due Week 12, Nov. 29th. Final draft due Week 14, Dec. 13th. GROUND RULES • Deadlines must be met. Unless extenuating circumstances convince us to grant you an extension, work turned in after deadline will receive a reduced grade. • Class attendance is mandatory and promptness is expected. Excessive absences and/or lateness will prompt grade reductions or possible failure. • When we have guest speakers, or are trying to engage the class in discussion, we would like you to keep your laptops closed so that we have your undivided attention. In addition, use of cell phones during class can be distracting and disruptive. • Clarity and precision in writing are key. The best work uses anecdotes and data to support assertions. Solid reporting depends on details. Make every word count.
- 3. • It isa serious ethical violation to take any material created by another person and represent it as your own original work. Any such plagiarism will result in disciplinary action, including possible dismissal from the CUNY J-School. Plagiarism may involve copying text from a book or magazine without attributing the source, or lifting words, photographs, videos, or other materials from the Internet and attempting to pass them off as your own. Student work may be analyzed electronically for plagiarized content. Please ask us if you have any questions about how to distinguish between acceptable research and plagiarism. GRADING Your final grade will be calculated as follows: Quizzes and in-class drills: 20 percent Professionalism and participation: 10 percent Beat memo: 15 percent News story: 15 percent Earnings outlook: 15 percent Analytical company story: 25 percent Grading of individual pieces of work will be determined by the quality of the research and reporting, the creativity of the story concept, the execution of the craft of storytelling, and the overall initiative you display. SYLLABUS WEEKLY OUTLINE Week One – Aug. 30: Introduction to Course General introductions; review of syllabus. In-class viewing of “Is Wal-Mart Good for America? (Frontline, PBS, 2004) Reading assignment for next week’s class: “The Rise of the New Global Elite,” by Chrystia Freeland, The Atlantic, Jan/Feb, 2011 - http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/ “Snacks for a Fat Planet,” by John Seabrook, The New Yorker, May 16, 2011 – full article available through library database “In Online Games, a Path to Young Consumers,” by Matt Richtel, NYT, Apr. 21, 2011 - http://www.nytimes.com/2011/04/21/business/21marketing.html?_r=1&scp=1&sq=In%20Online%20Games,%20a %20Path%20to%20Young%20Consumers&st=cse “U.S. has High Business Tax Rates, Technically,” by David Kocieniewski, NYT, May 3, 2011 - http://www.nytimes.com/2011/05/03/business/economy/03rates.html?scp=1&sq=U.S.%20has%20High%20Busines s%20Tax%20Rates,%20Technically&st=Search “G.E.’s Strategies Let it Avoid Taxes Altogether,” by David Kocieniewski, NYT, Mar. 24, 2011 - http://www.nytimes.com/2011/03/25/business/economy/25tax.html?ref=butnobodypaysthat “Lobbyists Won Key Concessions in Budget Deal,” by Eric Lichtblau, NYT, Apr. 12, 2011 - http://www.nytimes.com/2011/04/13/us/politics/13lobby.html?scp=1&sq=Lobbyists%20Won%20Key%20Concessi ons%20in%20Budget%20Deal&st=Search Review the list of companies handed out in class and send me an email ranking your top three choices no later than 6pm, Sunday, Sept. 4 Week Two – Sept. 6: The big picture. The role of corporations in society. Discussion of readings.
- 4. Context and overview:public vs. private companies, old guard vs. upstart disruptors, how companies are organized, the various stakeholders (management, employees, directors, shareholders, analysts, regulators), what public companies have to disclose Company assignments for the semester will be made Reading assignment for next week’s class: “Inside Pfizer’s Palace Coup,” by Peter Elkind and Jennifer Reingold, Fortune, July 28, 2011 - http://features.blogs.fortune.cnn.com/2011/07/28/pfizer-jeff-kindler-shakeup/ “Africa” Coke’s Last Frontier,” by Duane D. Stanford, Bloomberg Business Week, Oct. 28, 2010 - http://www.businessweek.com/magazine/content/10_45/b4202054144294.htm “Stephen Elop’s Nokia Adventure,” by Peter Burrows, Bloomberg Business Week, June 2, 2011- http://www.businessweek.com/magazine/content/11_24/b4232056703101.htm “Grading Jeff Immelt,” by Geoff Colvin, Fortune, Feb. 28, 2011 - http://management.fortune.cnn.com/2011/02/10/grading-jeff-immelt/ “The Scrappiest Car Manufacturer in America,” by Roben Farzad, Bloomberg Business Week, June 2, 2011 - http://www.businessweek.com/magazine/content/11_24/b4232068147070.htm “Campbell’s Quest for Productivity,” by Craig Torres and Anthony Feld, Bloomberg Business Week, Nov. 24, 2010 - http://www.businessweek.com/magazine/content/10_49/b4206015275454.htm “The Secrets of the GM Diet,” by Sharon Terlep, WSJ, Aug. 5, 2011 – via Factiva Week Three – Sept. 13: How companies fight to stay on top Discussion/dissection of readings Guest speaker: Jennifer Reingold, , senior editor at Fortune and co-author of Pfizer story on reading list Reading assignment for next week’s class: “Groupon Therapy,” by Lauren Etter, Vanity Fair, August 2011 - http://www.vanityfair.com/business/features/2011/08/groupon-201108 “Inside Apple,” by Adam Lashinsky, Fortune, May 23, 2011 - http://tech.fortune.cnn.com/2011/05/09/inside-apple/ “Caterpillar Is Absolutely Crushing It,” by Geoff Colvin, Fortune, May 23, 2011 - http://management.fortune.cnn.com/2011/05/12/caterpillar-is-absolutely-crushing-it/ “Reed Hastings: Leader of the Pack,” by Michael V. Copeland, Fortune, Dec. 6, 2010 - http://tech.fortune.cnn.com/2010/11/18/reed-hastings-leader-of-the-pack/ Week Four – Sept. 20: Ingredients for success: The role of management, strategy, marketing, innovation, industry trends and governance Discussion/dissection of readings Reading assignment for next week’s class: Review the annual report and proxy statement of the company you're covering, do clip search for background and context, begin working on your beat memo Read the introduction, Chapters 1 and 2, and Appendix A of Financial Fine Print: Uncovering a Company's True Value, by Michelle Leder . On e-reserve. Week Five – Sept. 27: Digging for data Uncovering vital company information using public documents. Introduction to various types of SEC filings. NOTE: This class will be held at Bloomberg headquarters, we will have a training session with Alan Mirabella and meet with one or two Bloomberg reporters who cover retail companies Reading assignment for next week’s class: Chapters 1 and 3 of Financial Statements Demystified, plus pp. 235-238 “Beyond the Surge in Corporate Profits,” by Paul J. Lim, NYT, Apr. 24, 2011 - http://www.nytimes.com/2011/04/24/your-money/24fund.html?scp=1&sq=Beyond%20the%20Surge%20in%20Cor porate%20Profits&st=cse Review second quarter earnings release from Saks and listen to Aug. 16th conference call with Saks executives and analysts - http://www.marketwatch.com/tools/calendars/earningsdaily.asp?symb=sks NOTE: NO CLASS ON TUESDAY, OCT. 4
- 5. Week Six –Oct. 11: Analyzing a Company’s Financial Condition, part 1 An examination of income statements – Saks case study. Assignment for next class: Do in-depth research about Saks in preparation for Q&A with CEO NOTE: Students are expected to attend a Q&A session with Steve Sakove, the CEO of Saks, at 10:15am on Friday, Oct. 14th and use that material to produce a news story (any medium), due Oct. 18th at 11:59pm Week Seven – Oct. 18: Analyzing a Company’s Financial Condition, part 2 In-class earnings drill Reading assignments for next class: Chapters 2, 4, and 6, plus pp. 148-155 and pp. 252-257 of Financial Statements Demystified Pp. 239-243 (Appendix 2) from The Number, by Alex Berenson (Random House, 2003) – on e-reserve Week Eight – Oct. 25: Analyzing a Company’s Financial Condition, part 3 Balance sheets and cash flow statements. Red flags. Reading assignment for next week’s class: Pp. 223-226 of Financial Statements Demystified “Why Analysts Keep Telling Investors to Buy," by Jack Healy and Michael M.Grynbaum, NYT, Feb. 9, 2009 - http://www.nytimes.com/2009/02/09/business/09analyst.html?scp=1&sq=Why%20Analysts%20Keep%20Telling% 20Investors%20to%20Buy&st=cse ``What Wall Street Wants From You,'' by Stanley Bing, Fortune.com, May 19, 2008 - http://www.huffingtonpost.com/stanley-bing/what-wall-street-wants-fr_b_102443.html “Including the Good Stuff, while Excluding the Bad Stuff,” from Jeff Matthews Is Not Making This Up blog, Aug. 25, 2009 - http://jeffmatthewsisnotmakingthisup.blogspot.com/2009/08/including-good-stuff-while-excluding.html “Apple’s Earnings Power Befuddles Wall Street,” by Roben Farzad, Bloomberg Business Week, July 28, 2011 - http://www.businessweek.com/magazine/apples-earnings-power-befuddles-wall-street-07282011.html Week Nine – Nov. 1: Managing earnings. The pressure of market expectations The role and impact of stock, bond and credit analysts. The role and impact of rating agencies. Guest speaker: TBA Reading assignment for next week’s class: “Ah, what to do with all that moola,” by Fran Hawthorne, Crains New York Business, Aug. 1, 2011 – available through Factiva “Casting Off Gloom,” (just read the first item about deal-making) by Peter Lattman, NYT, Aug. 15, 2011 - http://dealbook.nytimes.com/2011/08/15/casting-off-gloom-deal-makers-are-in-a-frenzy-of-activity/?scp=1&sq=Cas ting%20Off%20Gloom&st=cse Chapter 6, Mergers and Acquisitions, of “Show Me The Money,” by Roush, available on e-reserve “What Are Mergers Good For?” by Gretchen Morgenson, NYT, June 5, 2005 - http://www.nytimes.com/2005/06/05/magazine/05MERGERS.html?scp=1&sq=What%20Are%20Mergers%20Good %20For?&st=cse “Activists Pressed for Kraft Spinoff,” by Gina Chon, Anupreeta Das and Paul Ziobro, WSJ, Aug. 5, 2011 – http://online.wsj.com/article/SB10001424053111903454504576487720348267828.html?KEYWORDS=activists+pr essed+for+kraft+spinoff “Kraft CEO Spent Billions Preparing to Dismantle,” by Paul Ziobro, David kesmodel and Joann S. Lublin, WSJ, Aug. 5, 2011 – via Factiva “The Boom and Crash Cycle of I.P.O.’s” by Floyd Norris, NYT, July 9, 2011 - http://www.nytimes.com/2011/07/09/business/the-boom-and-crash-cycle-of-ipos.html?scp=1&sq=The%20Boom%2 0and%20Crash%20Cycle%20of%20I.P.O.%E2%80%99s&st=cse “IBM Can’t Get Enough of Its Own Stock,” by Roben Farzad, Bloomberg Business Week, Nov. 4, 2010 - http://www.businessweek.com/magazine/content/10_46/b4203051800661.htm
- 6. Week 10: Nov.8 Managing companies’ financial structures. The role of institutional investors The corporate life cycle: from angels to venture capital to IPOs. How and why companies choose between equity and debt. Why companies pursue mergers and acquisitions. Decisions about dividends, spinoffs and stock buybacks. The role of institutional investors, hedge funds and private equity firms in corporate financial decisions. Reading assignment for next week’s class: “What is Henry Kravis Telling Us?” by Roger Lowenstein, Bloomberg Business Week, Aug. 9, 2010 - http://www.businessweek.com/magazine/content/10_33/b4191007692750.htm “Profits for Buyout Firms as company Debt Soared,” by Julie Creswell, NYT, Oct. 5, 2009 - http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?sq=Profits%20for%20Buyout%20Firms% 20as%20company%20Debt%20Soared&st=cse&adxnnl=1&scp=1&adxnnlx=1313070477-51Eai9PigzYb7uYRoQn K7g Also, watched the related NYT video: “Flipped: How Private Equity Dealmakers Can Win While Their Companies Lose” - http://www.nytimes.com/packages/html/business/2009-private-equity/index.html?scp=1&sq=Flipped:%20How%20 Private%20Equity%20Dealmakers%20Can%20Win%20While%20Their%20Companies%20Lose&st=cse “Hot Tech Companies Like Yelp Are Bypassing IPOs,” by Peter Burrows, Business Week, Feb. 15, 2010 - http://www.businessweek.com/magazine/content/10_07/b4166023271880.htm “Yelp Looks Like It’s Getting IPO Ready,” by Therese Poletti, Marketwatch, July 28, 2011 - http://www.marketwatch.com/story/yelp-looks-like-its-getting-ipo-ready-2011-07-28 “Zipcar, Though Yet to Turn a Profit, Soars in Market Debut,” by Evelyn M. Rusli, NYT, Apr. 15, 2011 - http://dealbook.nytimes.com/2011/04/14/zipcar-soars-on-market-debut/?scp=1&sq=Zipcar,%20Though%20Yet%20 to%20Turn%20a%20Profit,%20Soars%20in%20Market%20Debut,%94%20&st=Search “Waiting for Gravity to Hit LinkedIn,” by James B. Stewart, NYT, July 8, 2011 - http://www.nytimes.com/2011/07/09/business/gauging-if-linkedin-signals-a-social-networking-bubble.html?scp=1& sq=Waiting%20for%20Gravity%20to%20Hit%20LinkedIn&st=cse “Asia Trounces the World in IPOs,” by Michael Tsang and Lee Spears, Bloomberg Business Week, Nov. 8, 2010 - http://www.businessweek.com/magazine/content/10_46/b4203052848358.htm Week 11 – Nov. 15: Private vs. Public Companies The pros and cons of being private or public, for managers, employees and investors. Guest speaker: Greg David Reading assignment for next class: “Corporate Democracy is a Myth,” by Carl Icahn, June 18, 2008 - http://www.icahnreport.com/report/2008/06/corporate-democ.html “The Absurdity of Corporate Board Elections,” by Carl Icahn, June 16, 2008 http://www.icahnreport.com/report/2008/06/corporate-board.html “America’s Teflon Corporate Boards,” by Jeff Green, Bloomberg Business Week, July 18, 2011 - http://www.businessweek.com/magazine/americas-teflon-corporate-boards-07142011.html “Quiet Proxy Season Means Fewer Fights in the Boardroom,” by Steven M. Davidoff, NYT, May 4, 2011 - http://dealbook.nytimes.com/2011/05/03/quiet-proxy-season-means-fewer-fights-in-the-boardroom/?scp=1&sq=Qui et%20Proxy%20Season%20Means%20Fewer%20Fights%20in%20the%20Boardroom&st=Search “Appeals Court Rejects SEC Rule on Access to Proxy Materials,” by Edward Wyatt, NYT, July 22, 2011 - http://www.nytimes.com/2011/07/23/business/appeals-court-rules-against-sec-on-proxy-materials.html?scp=1&sq= Appeals%20Court%20Rejects%20SEC%20Rule%20on%20Access%20to%20Proxy%20Materials&st=cse “Icahn’s Activism helps Lift Some Stocks, but Others Plunge,” by Steven M. Davidoff, NYT, July 20, 2011 - http://dealbook.nytimes.com/2011/07/19/icahns-activism-lifts-some-stocks-but-others-plunge/?scp=1&sq=Icahn%E 2%80%99s%20Activisim%20helps%20Lift%20Some%20Stocks,%20but%20Others%20Plunge&st=Search “After Rebuffs, Icahn Proposes 11 for Clorox Board,” by Michael J. de la Merced, NYT, Aug. 20, 2011 - http://query.nytimes.com/gst/fullpage.html?res=9A05E0DE1139F933A1575BC0A9679D8B63&&scp=1&sq=After %20Rebuffs,%20Icahn%20Proposes%2011%20for%20Clorox%20Board&st=cse “We Knew They Got Raises, But This?” by Pradnya Joshi, NYT, July 2, 2011 - http://www.nytimes.com/2011/07/03/business/03pay.html?scp=1&sq=We%20Knew%20They%20Got%20Raises,% 20But%20This?&st=Search
- 7. “Investor ‘Say OnPay’ Is a Bust,” by John Helyar, Bloomberg Business Week, June 16, 2011 - http://www.businessweek.com/magazine/content/11_26/b4234023747122.htm “Moving The Goal Posts On Pay,” by Gretchen Morgenson, NYT, May 8, 2011 - http://www.nytimes.com/2011/05/08/business/08gret.html?scp=1&sq=Moving%20The%20Goal%20Posts%20On% 20Pay&st=cse “Compensation Consultants Grease the Executive Pay Casino,” by Carl Icahn, Oct. 31, 2008 - http://www.icahnreport.com/report/2008/10/compensation-co.html “Board Pay: Unchecked and out of hand,” by Carol J. Loomis, Fortune, Jan. 18, 2010 - http://money.cnn.com/2010/01/04/news/companies/director_compensation.fortune/index.htm NOTE: NO CLASS ON TUESDAY, NOV. 22 Week 12 – Nov. 29: Corporate Governance, Shareholder Activists and Executive Pay The role of shareholder activists and directors. Pay-for-performance. How much is enough, too much? How do you calculate it (options, bonuses, allowances). The impact of Sarbanes-Oxley. The role of independent directors. Guest speaker: Amy Borrus, Deputy Director, Council of Institutional Investors Week 13 – Dec. 6: Review and drill Beat memo due Week 14 – Dec. 13: Course Conclusion Final story due.